Mediation as a means of dispute resolution is usually used when parties with a legal dispute want to avoid going to trial for one reason or another. Mediation can often be less expensive than going through a trial, and that is why it sometimes chosen by the parties. Mediation is available in the foreclosure process as it is in other legal proceedings.

Mediation in the foreclosure process is often started after the mortgage borrower has already defaulted on the mortgage and the mortgage lender has started the foreclosure process. During mediation, the parties come together with a neutral court-appointed third party who hears the facts of the case and tries to help the parties negotiate an outcome that avoids foreclosure.

In mediation, the mortgage lender may agree to modification of the mortgage terms or to the borrower participating in other loss mitigation programs, thereby allowing the mortgage borrower to catch up with the mortgage payments and not lose the house. If the borrower does not stay on schedule with the terms of the mediation, the foreclosure action can continue as before. Both parties must agree to mediation in the foreclosure process. At the height of the foreclosure crisis, mortgage lenders were required to inform borrowers of their mediation options within a certain period of time.

Even though mediation is less formal than trial, borrowers should not go through the process without seeking legal assistance or getting an attorney. Mortgage lenders are usually represented by attorneys, and a mortgage borrower may not be able to negotiate the best deal while representing him or herself instead of working with an experienced attorney.

Mediation can also sometimes be frustrating for the mortgage borrower because the mediator has often worked with the mortgage lender before, and it may feel as though the lender controls most of the mediation process.

Mediation and any of the modification programs offered through it are best if the borrower’s financial problems are temporary in nature, and the borrower will be able to keep up with the modified payments. Generally, a mortgage borrower agrees to mediation in order to find ways to avoid foreclosure and take advantage of loss mitigation offers from the mortgage lender. However, loss mitigation programs may be available without necessarily going through foreclosure or mediation.

If a borrower is going through some tough times, he or she can proactively approach the lender and ask about the programs and how to enroll in them. Mortgage lenders may not always agree to this, especially if the borrower is not yet behind on the payments, but if the lender agrees, the borrower could have a way to avoid foreclosure altogether.

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If you are going through financial trouble and may be facing possible foreclosure, you need to discuss the issue with a knowledgeable foreclosure attorney. For more information on mediation, foreclosure modification, and to find out if you have a valid defense to foreclosure, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through possible defenses and different alternatives to avoid foreclosure.

(image courtesy of Jan Jakub Nanista)

Homeowners who live in a housing development are usually members of a Homeowners’ Association, or an HOA. Being part of an HOA requires the homeowner to abide by certain rules regarding the care of the property and pay dues and fees to the HOA. In return, the homeowner receives communal benefits. In some situations, HOAs can levy fines against homeowners in addition to the monthly or annual fees that the homeowner owes. If the homeowner falls behind on the payments due to the HOA, the homeowner may be surprised to learn that the HOA is filing for foreclosure.

HOAs have the power to file liens when a homeowner has not paid the required dues or fines, and once this lien is filed, it opens the way for the HOA to file a foreclosure action. The exact circumstances under which an HOA can file a lien against a homeowner’s property and eventually proceed to foreclosure is outlined in the HOA’s founding documents or master deed. Generally, when an HOA files a lien against a homeowner’s property, the HOA sends notice to the homeowner in order to give the homeowner an opportunity to contest the lien or pay off any dues in order to avoid foreclosure.

An HOA foreclosure is similar to a foreclosure by a lender on a mortgage. The HOA can either proceed by judicial or non-judicial foreclosure. With judicial foreclosure, the HOA files the foreclosure action in court, and the case goes through all the stages of litigation before a court approves of the foreclosure sale. In a non-judicial sale, the HOA can proceed to a foreclosure sale after notifying the homeowner of the pending sale. This is usually done through publication in a newspaper. This allows the homeowner time to pay the amount owed or contest the pending sale.

If the homeowner has any defenses to foreclosure, he or she can present this information in order to avoid the foreclosure. This can include evidence to show that the fees or dues assessed to the homeowner, which led to the foreclosure, were not assessed properly. Under both foreclosure approaches, the homeowner still has some time after the sale to pay the amount due and any additional costs, including any applicable attorney’s fees, in order to get back the property. This is known as a redemption period. The redemption period may be shorter if the home is deemed abandoned.

The HOA can file for foreclosure even if the homeowner is current on his or her mortgage payments and is not at risk from foreclosure by the bank that holds the mortgage. Once the HOA foreclosure is completed, the homeowner will still owe on any mortgage the homeowner did prior to the foreclosure. The HOA does not extinguish the homeowner’s obligations to other creditors. Selling the home while it still secures a primary mortgage can be difficult, unless the HOA is also the purchaser of the home at the foreclosure sale.

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Whether you are facing foreclosure because of missed mortgage payments or because of unpaid HOA dues, you should contact an experienced foreclosure attorney as soon as possible. For more information and to find out if you have a valid defense to foreclosure on your home, call us at Resnick Law, P.C. in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through possible defenses and different alternatives to avoid foreclosure.

(image courtesy of Breno Assis)

Servicemembers who are serving in the military can sometimes find themselves in financial trouble and facing foreclosure. This may apply to servicemembers who are recalled to active duty or who are about to go on long term deployment and expect to have trouble meeting their financial obligations. Fortunately, these servicemembers have protections from foreclosure under the

Under the Act, servicemembers of any branch of the military who are on active duty are offered several means of relief from debt during their active duty time. For instance, servicemembers are allowed to cap the interest rates on loans to 6%. This includes capping or reducing interest rates on credit cards, car loans, and mortgages. The only exception is that the loan whose interest is capped has to have been secured before the servicemember was called to active duty. The protections apply during a servicemember’s period of active duty and for a period of time after the period of active duty ends.

For mortgages, servicemembers receive protection from foreclosure action taken during the period of deployment. Furthermore, foreclosure cannot be completed without a court order if the homeowner is on active duty. This is important for homeowners in Michigan, who would ordinarily be facing non judicial foreclosure like all other homeowners in Michigan. Servicemembers can also seek protection by stalling a foreclosure action for a period of time.

Even under Michigan’s non judicial foreclosure, a lender has to provide notice to a homeowner before foreclosing on the homeowner’s home. Once the spouse of a servicemember on active duty receives this notice, he or she can contact the servicemember in order to assert the protections of the Servicemembers Civil Relief Act.

Servicemembers can waive their rights under the Servicemembers Civil Relief Act after or during their period of active duty. Waivers executed before active duty deployment are invalid. All waivers are also required to be in writing in order to be considered valid. Servicemembers should ensure that they read all paperwork when taking on a loan in order to ensure that the paperwork does not include a waiver of the protections under the Act.

Servicemembers who want to take advantage of the protections offered under the Servicemembers Civil Relief Act have to make a request for relief. The provisions are not automatic. However, once the servicemembers make the request and get the relief they need, it can help them avoid financial and legal issues such as foreclosure for a while. The affected servicemember can take the time to organize his or her financials and hopefully be able to recover once the period of protection is over.

Contact Us for Legal Assistance

For more information about how you can seek relief under the Servicemembers Civil Relief Act, or by other means to avoid or defend yourself against foreclosure, you need to schedule an appointment with an experienced foreclosure attorney. Call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through possible defenses and different alternatives to avoid foreclosure.

(image courtesy of Israel Palacio)

For homeowners facing foreclosure, understanding the process of foreclosure and the options they have to stop missed payments from leading to foreclosure is important. If a homeowner can get together with his or her mortgage lender early on, and the mortgage lender is willing to work with the homeowner, the lender may offer the homeowner mortgage deferment. This can buy the homeowner some much needed time to get his or her finances together, especially after an emergency.

A deferment for mortgage purposes is a period of time during which the homeowner does not make payments on the mortgage loan. A deferment is similar to mortgage forbearance, although some forbearance terms include lowering the payment due instead of suspending it entirely. During the period that payments are suspended, the homeowner may be able to recover financially and continue making payments when the regular payments resume.

Deferment is generally not to be used by homeowners who are dealing with long term financial shortfalls. This is because deferment only temporarily stops payments; the missed payments are still owed by the homeowner. Deferment does not forgive any part of the homeowner’s financial obligations, it just postpones them. When the deferment period ends, the homeowner may be required to make a lump sum payment to cover the missed payments, or the past payments may be added onto the future mortgage payments. The homeowner may work out a deal with the mortgage lender to get a break on the interest during that time, and have the interest added onto the principal.

Whether a homeowner qualifies for deferment depends on the mortgage lender. The lender may limit deferment to homeowners who are in their primary residences and not paying a mortgage on a second home. In addition, the homeowner may be subject to restrictions on selling the home or moving out during the deferment period. This does not mean that the homeowner cannot use this time to make plans to move out or sell the home after the deferment period if his or her financial outlook does not improve.

Homeowners should also be aware that they can seek deferment for property taxes. Missed property tax payments can lead to foreclosure, and if a homeowner is experiencing a temporary difficulty, he or she can apply for property tax deferment. Homeowners have to meet eligibility requirements that include income limits. Generally, if a homeowner who is granted a deferment makes payments according to the deferment timeline, the deferment does not come with additional costs. However, if the homeowner misses payments, there may be additional costs for interest and fees.  

When negotiating with a mortgage lender for deferment and other loss mitigation programs, it is best to work with an experienced attorney in order to ensure that you are agreeing to the best terms for you and not setting yourself up for future problems.

Contact an Experienced Attorney

If you are facing foreclosure and want to find out more information on deferment, forbearance, and valid defense to foreclosure on your home, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through possible foreclosure defenses and different alternatives to avoid foreclosure.

(image courtesy of Age Barros)

Although it is sometimes difficult to do so, it is possible for a person who has been through foreclosure to buy a house after the foreclosure is behind him or her. A person who wants to buy a home after foreclosure should consider the reasons that led to the foreclosure before, whether it was from misconduct by the mortgage lender or a financial problem. Reviewing these reasons may help avoid foreclosure in the future.

Once a person goes through foreclosure, it is noted on his or her credit report. If there were missed payments before foreclosure, these will be noted on the credit report, as well. These notations may affect a person’s credit score and ability to get approved for another mortgage loan. A person buying a home after foreclosure is likely to be offered higher interest rates for loans than a person who has not, but this also depends on a person’s credit score.

Typically, homeowners also have to wait a certain number of years before applying for a loan to buy a home. If applying for a federal housing administration (FHA) loan, a three-year wait from the time the foreclosure is completed is required. Some lenders can overlook this waiting period, but this is likely to come with steep interest rates on the loan and other unfavorable terms. Military servicemen and others whose foreclosed loans were government-backed loans may have to satisfy other requirements before they are approved for other government-backed loans.

It is critical for a person seeking a mortgage loan to look into various lenders and research the terms they offer, especially to former homeowners who lost their homes to foreclosure. Shopping around for the best terms can help save money in the long run. In addition to considering the financial terms offered by a prospective lender, the person seeking the loan should investigate the loan modification options available to borrowers.

The lender may need to be convinced that a person who has previously gone through foreclosure will not default on payments as before. This can be done in various ways, including remaining current on all other bills. Saving a down payment to purchase the home will also help convince the lender that you are likely to keep up with the payments.

A person who lost a home through foreclosure should ensure that he or she does not lie about the foreclosure or try to hide it on loan application documents. A lender who does its due diligence in checking the financial status of the prospective borrower will almost always catch misrepresentation by a borrower, and it will mean that the lender does not approve the loan.

Contact an Experienced Attorney

If you are going through a financial hardship and are facing foreclosure, you need to contact an experienced attorney as soon as possible. For more information and to find out if you have a valid defense to foreclosure on your home, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through possible defenses and different alternatives to avoid foreclosure. Additionally, we can advise you if filing for and bankruptcy is in your best interest.

(image courtesy of Valentine Locatelli)

A foreclosure may not be the end of a homeowner’s financial problems if the homeowner has multiple loans secured by the home. These additional loans are generally known as junior liens, and they can take the form of second mortgages or home improvement loans. The lenders of these loans are usually behind the original mortgage lender in terms of getting paid when the house sells. This could leave the homeowner personally liable for the junior loans.

If the original lender, the senior lien holder, sells the home in foreclosure, the income from the sale is used to first settle the senior lien holder’s loan. If there are any additional funds left over, they can be applied to any junior loans. The junior lien holders can make a claim on the surplus from the sale of the home, but have to prove the validity of their claims. If the money only partially covers the balance of the loan, the junior lien holder can sue the homeowner for the balance.

This can also be the same outcome in a short sale or deed in lieu of foreclosure. However, in these situations, there is an opportunity for the homeowner to negotiate with all the lien holders in order avoid personal responsibility for a deficiency on all loans. These negotiations should take place before the sale takes place, and all lenders should agree not to seek deficiencies from the homeowner. This may work better if all the loans were provided by the same lender.

Homeowners should note that the junior lienholder who has an interest in the property can also foreclose on the home. If a junior lien holder sells the property, the senior lien holder still has an interest in the property, even if it is transferred to a new owner. Additionally, any surplus from a foreclosure by a junior lien holder does not necessarily go to the senior lien holder, and instead goes to other junior creditors or to the homeowner.

Following foreclosure by a junior lien holder, the original lender can still pursue the balance of the mortgage from the homeowner who took out the loan. The obligation to pay on the loan is not transferred to the new homeowner. However, the new homeowner does not own the property free and clear, and the senior lien holder’s lien remains with the property until the debt is discharged by payment or through bankruptcy.

If there are other creditors seeking to get paid, the homeowner who loses a home to foreclosure and faces the prospect of a deficiency judgement should consider filing for bankruptcy. Bankruptcy would allow the homeowner to erase all the debt, including junior liens, and start fresh even though it may negatively affect the homeowner’s credit.

Contact an Experience Attorney

If you are going through foreclosure and have multiple loans against the property being foreclosed, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced foreclosure attorneys can help you navigate the process and negotiate where possible to try and help you avoid deficiency judgments.

(image courtesy of Nathan Fertig)

It is difficult for some homeowners to figure out the next step after receiving notice that their mortgage lenders have started foreclosure proceedings. The most immediate concern may be where to go and how long after the process starts the homeowner will be expected to leave the home. Fortunately for homeowners, they do not have to leave the home immediately, and can typically stay in the home for the duration of the foreclosure proceedings.

Generally, homeowners should be aware that the mortgage lender is about to begin foreclosure due to missed mortgage payments. Mortgage lenders do not begin foreclosure proceedings immediately after a homeowner misses a payment. The homeowner may be 120 days behind on payments before the mortgage lender starts the foreclosure.

In Michigan, the mortgage lender does not need to go to court in order to start the foreclosure proceedings and sell the home. In other states, a foreclosure can be stated only when the lender files a petition in court against the homeowner, essentially seeking to call in the mortgage loan. Lenders in Michigan can use this judicial method; however, Michigan also allows non-judicial foreclosures, where the lender can start the proceedings without having to go to court first. The lender must still comply with notice requirements and ensure that the homeowner has a chance to respond to the notice. The homeowner can negotiate an agreement with the lender to avoid foreclosure, or can opt to move out and allow the proceedings to continue.

If there is no negotiation, the lender works with the sheriff to clear the home and prepare for auction. The sale is advertised in newspapers and by other reasonable means, and then sold at auction to the highest bidder. As an estimate, from the time the lender initiates foreclosure to the time the auction is organized, it could be six months before the homeowner has to leave the home. This can be extended slightly if the homeowner and the lender negotiate an agreement in the middle of the foreclosure process that delays the foreclosure for a while.

Once the sheriff’s auction has been arranged and prospective buyers are given notice, the redemption period begins. A homeowner has one last chance to keep his or her home during this time by paying the bid price at the auction and fees. This is usually an amount equal to the mortgage balance owed. Most homeowners who are already behind on their payments may not be able to redeem their homes during this period.

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While a foreclosure may be unavoidable for a homeowner who is in a tight financial situation, for some homeowners, the foreclosure may be a result of some wrongdoing by the mortgage lender. In this latter case, the homeowner may have legal defenses to the foreclosure action. For more information and to find out if you have a valid defense to foreclosure on your home, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through possible defenses and different alternatives to avoid foreclosure.

(image courtesy of Julián Gentilezza)

There are several steps that homeowners can take in an attempt to avoid foreclosure and keep their homes. Some of these steps or programs can be temporary fixes, while others are more permanent and can work to restructure the terms of the mortgage loan in order to make the payments more affordable for the homeowner. Temporary approaches focus on helping a homeowner who is experiencing temporary hardship avoid foreclosure. One temporary approach for a homeowner to avoid foreclosure is to apply for forbearance.

Usually, when a homeowner misses several months of mortgage payments without a prior agreement with the mortgage lender, the lender may be able to start foreclosure proceedings. Forbearance is a process through which a homeowner and the mortgage lender enter into an agreement that the homeowner will be allowed to miss monthly mortgage payments or to make lower payments for a period of time. A forbearance agreement assists the homeowner during a short period of time, usually up to six months, during which the homeowner is experiencing an unexpected financial problem.

Forbearance does not mean the missed or lowered payments are forgiven at the end of the forbearance period. Under a typical forbearance agreement, the homeowner agrees to make up the difference between the regular and lowered payments and any missed payments at the end of the forbearance period. These missed payments can also sometimes be absorbed into the overall loan owed, which can increase the monthly payments the homeowner owes after the forbearance period ends.

While forbearance seems like a good way to relieve the financial pressure of making on time mortgage payments while going through some tough times, it is not a good solution if the tough times are more long term. If the homeowner suffers a catastrophic injury and can no longer work to earn the amount of monthly income it would take to keep the home, the homeowner should pursue a different solution other than forbearance. However, if the homeowner is fired, and is in a field of work in which he or she can find another job in a few months, then applying for forbearance may be a good solution.

Mortgage lenders do not have to agree to forbearance for a homeowner, even one with a proven financial need. In some cases, whether or not forbearance is granted depends on the homeowner’s past payment history. The lender may offer a range of other loss mitigation options for a homeowner to choose from if forbearance is off the table. Before accepting any offers, the homeowner should always seek independent advice on the benefits of applying for a particular loss mitigation program in order to avoid getting into further trouble and then losing his or her home.

Contact Us for Legal Assistance

If you are experiencing financial hardship and would like to figure out the best way to handle your finances, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can help you identify the options you have in terms of handling your debt and hopefully avoid foreclosure.

(image courtesy of Jesse Roberts)

A deed in lieu of foreclosure is a process by which the homeowner signs over his or her interest in a property to the mortgage lender in full settlement of the mortgage loan owed. A deed in lieu of foreclosure is also known as a mortgage release. Once the homeowner signs over the interest, he or she may have to immediately leave the home, unless he or she negotiates an exit plan that allows him or her to stay in the home for a short period of time. In some situations, the homeowner may receive financial relocation assistance.

Unlike a short sale, the homeowner in a deed in lieu of foreclosure gives up equity in the property when he or she signs it over to the lender. This means that the homeowner gives up the right to receive any money made in excess of the mortgage debt owed once the home is sold. This excess money is referred to as surplus, and is usually paid to the homeowner if the home is sold under other conditions.

While deed in lieu of foreclosure transactions generally release the homeowner from all obligations relating to the mortgage loan, the homeowner has to be careful when signing the agreement. In entering the agreement, the homeowner can agree to be responsible for any unpaid part of the mortgage loan after the home is sold. The homeowner should closely read the agreement releasing the homeowner from the mortgage loan carefully. Even if the lender has made verbal promises that the homeowner will be released from a deficiency, the promise has to be in writing.

Homeowners should note that the deed in lieu of foreclosure does not take care of any other underlying debts secured by the home. If the homeowner owes a second mortgage on the home, or another kind of loan that was secured by the property, the homeowner will still be liable for those loans. For this reason, the mortgage lender would have to foreclose on the property in order to get clear title. This may mean that if the property has multiple liens on it, the mortgage lender may be less willing to accept a deed in lieu of foreclosure.

Like with a short sale, the deed in lieu of foreclosure does have a negative effect on the homeowner’s credit history, but it is less damaging than a foreclosure.

Contact Us for Legal Assistance

There are different way in which homeowners can avoid foreclosure if they are facing financial hardship. If you are feeling overwhelmed, and think you can no longer afford to make your mortgage payments, call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan. Our experienced attorneys can guide you through different alternatives to avoid foreclosure.

(image courtesy of Gus Ruballo)

When a homeowner is facing foreclosure because of financial problems, and also has other significant debts that are unmanageable, bankruptcy may be the best way forward. However, when a mortgage debt is discharged in a

Reaffirmation of a debt in Chapter 7 bankruptcy means that the person filing for bankruptcy excludes the debt from the debts discharged through the bankruptcy process. The creditor and the debtor agree to waive the debt’s discharge in bankruptcy.

Generally, when a person files for Chapter 7 bankruptcy, there is a period of time known as a stay period, during which creditors are required to stop all collection attempts. If a foreclosure has been started, it has to be put on hold during this stay period. However, the foreclosure action will not be held off indefinitely, and the homeowner has to either reaffirm the mortgage loan or lose the home. In reaffirming the mortgage loan, the homeowner agrees to make on-time payments on the loan and abide by whatever other terms are included in the reaffirmation agreement.

Reaffirmation has to be done before the bankruptcy is discharged, and the mortgage lender has to agree to the reaffirmation. Some lenders may not agree to the reaffirmation because the homeowner has been late on payments or missed payments in the past. If the mortgage lender agrees to the reaffirmation, it could require that the homeowner first make up any missed payments.

Even with a reaffirmation agreement, after the bankruptcy, if the homeowner misses payments on the mortgage or otherwise breaches the reaffirmation agreement, the lender can begin foreclosure proceedings again. If this happens, the homeowner can remain on the hook for any balance after the home is sold. This would be a major disadvantage over dismissing the entire mortgage loan in the bankruptcy.

Before deciding whether to reaffirm a mortgage loan, it is important to discuss this issue with an experienced attorney. While the decision to keep your home after a bankruptcy can be an emotional one, it needs to be approached rationally. If reaffirming the debt will only lead to more missed payments and eventually a foreclosure proceeding, it may not be in the homeowner’s best interest to reaffirm the loan.

It is important to also have an attorney review any reaffirmation agreement to ensure that the homeowner’s interests are well represented, and that the terms are not too difficult for the homeowner to keep up with.

Contact an Experienced Attorney

If you are experiencing financial troubles and foreclosure seems like a possibility, you need to speak with an experienced attorney from a firm that handles both foreclosures and bankruptcy. Our experienced attorneys can discuss the legal issues that will arise with either a foreclosure or a bankruptcy and how they will affect you. Call us at Resnick Law, P.C., in Bloomfield Hills and Detroit, Michigan.

(image courtesy of Eric Parks)