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Notice: I am not an attorney. Anything I write about on this blog is for informational purposes only from a fellow homeowner facing foreclosure. I’m only sharing what I’ve been through and learned. Consult an attorney for legal advice.
Folks start down the path to foreclosure by missing house payments. Most of the time there is a job loss or severe illness keeping bread-winners from earning a living.
When you miss one payment or are late, you can make that payment plus a late fee and get back on track. Once you’ve missed two payments, it gets harder to make up payments and late fees, and that’s where the real trouble starts.
If you won’t be later than 10-15 days and can make your next payment on time, send in your late payment with late fee, make your next payment on time, and you should be fine. This usually isn’t caused by a serious financial situation change.
If your financial situation has changed and you know you will miss payments or pay significantly late, call your mortgage servicer (the bank or company you send your payments to every month). Let them know you will be late or will miss upcoming payments and why (unemployed, underemployed, illness, etc.).
Then call the Homeowners HOPE Hotline for help: 888-995-HOPE (4673), and go to the Making Home Affordable website.
If you get a new job or return to work and can afford to restart your mortgage payments, do so right away. The servicer may tell you not to make payments while they put you in a modification program, but don’t listen. Make the payments.
If a payment is refused, immediately go to the CFPB website (Consumer Financial Protection Bureau) and send a complaint. Scan the refusal letter into electronic form and attach it with your complaint. Send a copy to your servicer’s legal department as well. Call them for the address.
Type the complaint in a word processing document that has a word and character count function, and copy and paste it into the complaint form online. You only have 4000 characters, and the site times out, often before you can finish typing.
If you’re making payments you have strong evidence to qualify for a mortgage modification or other catch-up program because you have proof you can pay your mortgage. It sounds like a no-brainer, but it often isn’t.
Once you’ve missed 4 or more payments it gets very difficult to make them up, unless you come upon a lump-sum of money or land a great, high-paying new job. It’s time to start working with your servicer on a mortgage modification.
At this point, you may get a notice of default or letter from the servicer’s attorney that they are starting to foreclose. Which notice you get depends on whether the property is in a judicial or non-judicial state. Most states are non-judicial. (I live in a judicial state).
If you begin or are in the modification process, the servicer must stop foreclosure proceedings until a determination is made on your modification. If they keep you in foreclosure during the modification process, that’s called duel-tracking and it’s illegal. You will need to file a separate complaint with the CFPB.
Things to know:
The 12 biggest mortgage servicers signed a consent order on April 13, 2011. The 5 biggest mortgage servicers signed a consent judgment on April 4 2012. Both order and judgment were signed with the U.S. Department of Justice.
All servicers are bound by these agreements.
If a servicer takes any action which violates either of them, file a complaint with the CFPB.
You can read the agreements at the Homeowners for Justice foreclosure defense page. Regulators changed since 2012, so file your complaints with the CFPB, not the OCC. If you file with the OCC they will forward your complaint to the CFPB.
Know your rights. Read the consent order and judgment. Read about your state foreclosure, county (parish) land recording laws, and federal land ownership laws. Land ownership recording laws and current bank real property loan recording procedures directly conflict with each other. The law rules when in conflict with procedures, but you may have to sue to uphold your rights.
In my next post, I’ll take you through the modification process and how it’s supposed to work.
Please tell me what you’ve experienced or ask questions in the comments below.