David Norris J. D.
Can anything be done when facing home foreclosure?
Like the automobile and the open road, home ownership in America has always been symbolic of the independent spirit that we all cherish. Historically the average American has built their net worth by buying real estate and holding it for many years while it slowly and steadily appreciated in value. We began to see a change in this process through the years 2002-2008 when more Americans realized their dream of home ownership than at any other time in our history. The increase in home ownership was made possible by the creative financing mechanisms of many lending institutions. Temporary interest only loans, variable interest rates, hybrid ARMs, balloon mortgages, no doc loans, and loan bundling are but a few of those mechanisms. Millions of people who could never afford homes before were enjoying the freedom of home ownership.
The net result of the above-factors was that the demand far exceeded the available housing; this artificially drove up home values, expanded the demand for sub-prime lending and created a new industry of real estate wheelers and dealers known as "flippers." Millions of American homeowners suddenly had tremendous paper equity in their homes. They were loaned billions of dollars against this artificial equity. The building industry flourished, building supply costs skyrocketed and the sub-prime lenders, mortgage brokers and appraisers churned out millions of ill advised loans against the artificial equity. We were paying more for old and new houses and we owed more for homes that we had owned for years. Everyone believed the spiral would continue upward and our equity would continue to grow. Then unemployment began to rise, oil prices doubled and all the creative loan practices started to come home to roost. The bubble burst.
Foreclosure will certainly happen. In fact, your third missed payment will trigger your mortgage company to accelerate your note so that the entire mortgage balance is due. The foreclosure summons and complaint wi II not be far behind. Florida is the state with the fourth highest number of foreclosures behind Arizona, Nevada and California. Foreclosures in Florida have increased almost 24% over 2008 and over 250% from 2007. One house in every 56 had a foreclosure initiated in the third quarter of 2009, and nearly a quarter of the houses on the market in many areas of Florida are bank owned foreclosures. Many of these houses are being sold for a third to one-half of the price that they sold for in 2005. This situation practically eliminates selling your property as a solution when faced with foreclosure.
Don't delay; foreclosure is not an eviction it is a serious lawsuit with potentially devastating effects on your future. If you do not file an appropriate written response within twenty (20) days of being served with a foreclosure complaint you may be subject to a default judgment. You must be proactive if you are behind on your mortgage payments. Do not wait for a foreclosure action to be filed-contact a lawyer who is familiar with foreclosure, loan modification and bankruptcy to develop a strategy. Keep in regular contact with your mortgage holder, but believe only a portion of what they tell you. Every lending institution that participated in the Federal Stimulus Program is also participating in President Obama's Housing Rescue Plan. There are a multitude of loan modification programs offered by the various lending institutions, some are simple, some are very complex, but all require time to implement.
Treating the foreclosure as a serious lawsuit is imperative. Mortgages are contracts between the buyer and the banle The bank must honor the contract and its terms and conditions just as it expects you to. The bank must also follow many mandated federal guidelines while attempting to collect a debt. Alternatives to a foreclosure judgment require time to explore. Short sales or a deed in lieu of foreclosure are two of these alternatives that can leave you in a much better position than a foreclosure, so be persistent in your efforts. The fact that a foreclosure has begun does not preclude you from a mortgage modification, short sale or a deed in lieu of foreclosure. In fact many of these alternative resolutions are reached after a foreclosure is filed. Many counties are initiating mediation programs for foreclosures which can facilitate the homeowner and lender in reaching more favorable resolutions than foreclosure. An attorney who is familiar with the process and alternatives can relieve a lot of the burden associated with this stressful situation. If you are facing possible foreclosure, feel free to contact my office at 352-343-1001 or please visit our website at www.DavidNorrisLaw.com.
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