BE SMART, BE PREPARED, TAKE AGGRESSIVE ACTION EARLY

    As your legal counsel, we will help you navigate through the loan modification, short sale or deed in lieu of foreclosure, and defend you in the foreclosure litigation process.  We are here to make certain that you aware of the options you may have to avoid foreclosure of your home and to assist you in making the best decision for you, your family and your future.  Many homeowners come to us with great trepidation about the foreclosure process and what lies ahead down the road.  While we cannot eliminate the fact that there is or may be borrower default and consequences to borrower default, what we can do is explain to you the options that exist for you going forward in your particular case. We will give you the information and knowledge you need to make an informed business decision as to what is best for you and your family. 

    If you are in financial distress, feel that you are headed into default or have been served with a Mortgage Foreclosure Complaint, make sure you consult an attorney early in the process.  It is critically important to take action, ideally prior to default or at least early in the default stage, so that you as the homeowner have more control about what happens to your family, your credit, your future and your life.  So, what does that mean - "More Control"?  It means the earlier you take the foreclosure machine head on, face the reality that you are in default, the greater likelihood that there will be available options for you to consider that will absolutely impact your life and your future.  In essence, your lender is more likely to want to help you if you help them by acting early.  Don't bury your head in the sand and do nothing.  Waiting until a sale date is set on your property or the week before your house is set to go to auction is NOT the answer, in fact there may be very few or no options for you at that late stage.  Increasingly, we are observing that U.S. lenders are becoming more and more amenable to helping homeowners with loss mitigation if the homeowner takes initiative and approaches his or her lender EARLY with the request for assistance.  Early means prior to the litigation commencing at all or very early on in the litigation process.

                                           LEGAL DEFENSES TO FORECLOSURE

    If viable legal defenses to the foreclosure action exist in your case, we are going to fight hard and aggressively for you in opposition to the lender so that your rights are well preserved and protected.  The danger that has been injected into the foreclosure litigation process by such elements as Mortgage Loan Securitization, mortgage broker and lender failure to comply with the Federal Truth-In-Lending Act (Reg Z), fraudulent affidavits and note indorsements, "robo-signers" swearing under oath to documents of which they have no knowledge, questionable firm practices by some lenders' law firms, lost original promissory notes, failure of some plaintiff lenders to properly assert their legal standing to sue for foreclosure, and lenders improperly foreclosing on military families due to failure to comply with federal law has made mortgage foreclosure litigation an extreme challenge to all parties involved, and to U.S. courts.  Even where there is clear default and breach of the mortgage instrument, it is still essential to ensure the lender properly serves all documents and the legal procedures are followed.  We have read horror stories of homeowners who have lost their homes to foreclosure, only to find out later the wrong plaintiff foreclosed on the property or there was an essential document to the case that was missing.    

    We will make sure you are aware every step of the way what is happening with your case and you will have consistent updates with your attorney as to the status of the litigation.  When you hire this firm to represent you in foreclosure, you will be expected to become an active participant in your case.  There will be information and documents you will be asked to provide, and our philosophy is to work as a cohesive team in order to accomplish your objectives and protect your rights.   

             WHICH EXIT STRATEGIES MAY BE AVAILABLE TO AVOID FORECLOSURE?

LOAN MODIFICATION

Loan modification options provided under the U.S. Treasury and Department of Housing and Urban Development's HAMP ( Making Home Affordable Program) is for primary residence, owner-occupied properties where the borrower meets specific eligibility criteria for the modification.  While this program had great aspirations of success, the unfortunate reality is that many fewer homeowners than forecasted have become eligible.  For eligibility criteria, visit the HAMP website.

SHORT SALE

Another option available to many homeowners is the Short Sale.  A Short Sale is when the lender agrees to accept less money than is owed on the mortgage securing the note, by virtue of a buyer coming in and purchasing the property from the homeowner in default.  There is a gap between the amount the homeowner owed to the lender and what the new buyer is paying for the property.  That gap is called a Deficiency.  There may or may not be consequences to the homeowner when doing a short sale, and each lender evaluates each case separately.  For example, the lender will look carefully at the hardship expressed and documented by the homeowner and the financial documents supplied by the homeowner.  The deficiency and the potential of the lender seeking a judgment for the deficiency amount ("Deficiency Judgment") is a concern to many homeowners.  There are cases where lenders agree to release the debt and waive their right to seek a deficiency judgment, but those are limited and normally in the HAFA context (read below, HAFA SHORT SALE).  Additionally, in exchange for agreement to do the short sale, in some cases lenders may ask for the homeowner to sign a promissory note and/or make a cash contribution at the closing table.  There are tax consequences to the homeowner in short sales, and it is highly advisable to seek the professional advice of your accountant or other tax professional prior to considering the short sale option.

Each short sale negotiation process is different with many distinct variables at play, and this is the primary reason we suggest that any homeowner in the default situation consult an attorney.  Homeowners should not only be aware which exit strategies or options exist, but also be made aware of  what is expected of them by the lender if the lender agrees to settlement, the procedures of negotiating a settlement with the lender and potential outcomes and consequences of that settlement is likely to have.

HAFA SHORT SALE

Homeowners have heard what a nightmare the short sale process is, and we are here to tell you that while such claims may have been true a year ago, they are no longer.  The creation of the federal HAFA Program ( Home Affordable Foreclosure Alternatives) in 2010 brought a major change in how lenders addressed and processed short sales.  Lenders must voluntarily agree to participate in HAFA in order to assist homeowners short sell their homes in exchange for financial incentives from the U.S. Treasury and Department of Housing and Urban Development.  HAFA eligible loans are those owned or guaranteed by Fannie Mae or Freddie Mac, or are serviced by a HAMP Participating Servicer.  To find out if your loan is owned or guaranteed by Fannie Mae, visit www.fanniemae.com/loanlookup. To find out if your loan is owned or guaranteed by Freddie Mac, visit www.freddiemac.com/mymortgage.  HAFA was passed and became effective legislation on April 5, 2010 and will remain in effect until December 31, 2012.  To learn more about this government program, visit http://www.makinghomeaffordable.gov/learn-more/videos/Pages/default.aspx?vid=XbPaLHFHL7A&#fragment-1 

You have the option of contacting an attorney to discuss the benefits of a HAFA Short Sale, to learn whether you may be eligible and how to apply, or you may contact your lender directly.  At Ermel Law Firm, we provide the service of representing your interests while working directly with your lender to determine if your particular set of circumstances meets the HAFA eligibilty requirements.  If you are HAFA eligible, we then represent you through the short sale negotiation process with your lender which includes from the time we establish eligibility, through the marketing and sale of your property, and finally through to closing.

SHORT SALE - TRADITIONAL PROGRAM

Traditional short sales comprise all short sale transactions that are not HAFA eligible because they do not meet the criteria set by the U.S. Treasury and Department of Housing and Urban Development, for one reason or another.  The reason(s) may include the holder of the mortgage did not agree to voluntarily participate in HAFA,  the subject property is an investment property or second home, the property has not been owner occuped for the preceding twelve months, the first mortgage loan amount is $729,750 or greater, the loan was obtained after January 1, 2009 or the homeowner purchased another property within the last twelve months.  (click here for current HAFA Eligibility Requirements)

Traditional short sales have also come a long way since the beginning of the fourth quarter of 2010, particularly due to systems created by the lenders which are now in place to streamline the short sale process.  It is important to hire an attorney when attempting a short sale because each lender's procedures and policies are different and it is crucial to understand how the lenders operate in order to successfully negotiate the transaction all the way to closing.  This is not an easy or quick process.  It is complicated and requires a great deal of patience and commitment to a successful outcome.  The point is that if you decide that the most prudent business decision for your family, your future and your credit is to do a short sale, start early by listing your house with a licensed Florida Realtor® who will find you a buyer and be able to bring you a competitive offer on your property.  We work closely with local Realtors® throughout the entire short sale process and consider them an integral component of the transaction in order to successfully close the short sale. 

DEED IN LIEU OF FORECLOSURE

The "Deed In Lieu" may be an alternative option to the short sale to some homeowners if it appears unlikely or impossible to obtain a buyer and executed contract on the subject property after marketing the property for at least 90 days.  This is where the lender agrees to have the homeowner sign the deed back over to the lender and in exchange, the lender accepts that the loan has been satisfied.  The Deed in Lieu strategy is not usually going to be successful where there are multiple liens on the property, such as a second mortgage or HOA lien. 

A NOTE ON STRATEGIC DEFAULT

Our firm DOES NOT advocate "Strategic Default".  If you are considering stopping payment on your mortgage while you are still able to afford the payments, it is critical that you seek advice of skilled and experienced legal counsel.  While we do not take cases involving strategic default, we would be able to explain to you the potential consequences of choosing strategic default as your exit strategy.