Once you receive the foreclosure sale notice, panic often sets in. You think you're going to lose your home no matter what and the sheriff's coming soon to put your family out on the street. These 10 strategies can help you delay the sale. Delaying the sale could get you the time you need to finish negotiating with the bank or let you plan a graceful move out of your home rather than an expedited one.
Note: The strategies below may work in certain circumstances. Make sure to run them by a lawyer before you implement them because some may actually make your situation or negotiating position worse if you use them. This is due to state laws or your specific situation. Remember...this IS NOT legal advice. It is legal information. Only licensed attorneys can provide legal advice.
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Chapter 7 Bankruptcy
The first and probably one of the more well known ways of delaying a foreclosure is chapter 7 bankruptcy. It will usually buy between 45 to 75 days...sometimes more or less depending on your local foreclosure laws and bankruptcy court.
Chapter 13 Bankruptcy
The second way of delaying is chapter 13 bankruptcy. It also gets you about 45 to 75 days...sometimes more. If you make payments according to the plan and properly include mortgage debt in the bankruptcy you should be able to permanently stop foreclosure. However, typically chapter 13 payment plans aren't realistic. It's very difficult to be successful with a chapter 13, but it will force your lender into a payment plan.
Use a Non-Profit Organization
Use a nonprofit organization as an advocate with the court, the media, the sheriff and your lender. You may have a group like ACORN or ESOP in your area. Some of these organizations have had amazing success using all sorts of tools to delay or stop foreclosure. While non-profits are normally free, they are also usually very busy and overworked.
Written Answer
File a written answer in the court system, asking for more time. Do this as soon as you get notice of legal action. This could easily buy you an additional 30 to 60 or more days. If you don't file an answer, typically the case goes straight to default judgment and the foreclosing lender doesn't even have to prove the facts of the case.
File a Continuance
Related to filing a written answer is the filing of a continuance. File a continuance after the first hearing is scheduled. A continuance, like all court documents should probably be filed by an attorney. A continuance is simply a request for the judge to give you more time because you need to prepare your case or have another reasonable excuse.
Defend the Foreclosure
You should have an attorney no matter what technique you're using so you can have quality advice to keep you out trouble and put you in a better position. There are attorneys that specialize in foreclosure defense who are able to rip most foreclosure complaints to pieces. Most of these complaints are put together in foreclosure factories with form letters by underpaid paralegals. They only work because no one challenges them.
Challenge Jurisdiction
Recently, attorneys have been challenging the lender's right to sue based on jurisdiction. The attorneys argued that since the foreclosing lender was based out of state they should be suing in federal court rather than county court. In some cases, this strategy got the case thrown out of the county court and moved to federal court, which takes a lot more time because the lender has to re-file everything and wait for a new court date.
Challenge Right to Sue
Attorneys can also challenge the right of a plaintiff to sue because they could not prove they actually owned the mortgage. This could stall the case indefinitely, or at least until they can trace back from all the servicer transfers and the sale of the mortgage from one investor to the other, to find the original signed document that says that you, the borrower, actually owe the money. In some cases that d
ocument can't be found. There have been federal judges that have eliminated mortgage balances because they couldn't prove the homeowner actually owed the money to the foreclosing lender/servicer.
Challenge the Sherriff's Appraisal
Once your property has worked through the court process and they've scheduled a sheriff sale, typically the sheriff appraises the property for the purposes of auctioning it off. The property is then auctioned off and the starting minimum bid is a certain percentage of that appraisal amount. You could challenge the appraisal and make a case to the sheriff and/or the judge that they appraised it wrong and need to reappraise it.
Countersue
Finally, there are thousands of state and federal rules that a lender must abide by as they lend money. There are attorneys that specialize in auditing your loan documentation and bringing law suits against lenders. If your attorney makes a good case, your debt could be erased. At a minimum, though, your attorney can delay the foreclosure and possibly lower the balance of your loan a significantly.
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