Did you receive a Notice of a Motion for Relief from the Automatic Stay (“ROS”)? Homestead SPC is a social purpose law firm that helps folks after their bankruptcy protection ends. If you are about to lose bankruptcy protection, it’s time to review your foreclosure defense options.
In the meantime, here are SIX lawyer tips that may improve your chances of saving your home and\or buying time:
- The Automatic Stay is a temporary benefit of filing a bankruptcy case. The stay is an “injunction” that freezes the foreclosure process. The stay typically lasts only until your case ends or the bankruptcy judge grants a request by the lender to resume foreclosure. Typical reasons for granting this request are: failure to pay all “post-petition” payments on time (Chapter 13) or a lack of adequate equity (Chapter 7). Once the stay is gone, new protections under California and RESPA laws kick in that can help you buy time. Do not wait until you lose the stay to explore your “plan B” options.
- Once Relief of Stay is GRANTED, a lender is free to recover the debt owed by selling your home at auction, without taking you to court. The point of the auction to recover the money lent, get rid of a risky borrower and allow for re-investment of the funds. California’s “non-judicial” foreclosure statutory process is allowed based on a “power of sale” clause of your Deed of Trust, a contract you signed when you borrowed the money. If you lose the relief of stay motion, protection from foreclosure and eviction is lost, but are still in a bankruptcy case. Whatever you do, do not wait until you lose the stay to explore your “plan B” options.
- Create a road map to your earliest possible auction date after Relief of Stay While the minimum countdown to a California auction is 121 days from the Notice of Default (“NOD”), a lender need not start the process over or provide any written notice. Lender’s need not re-file the NOD, but are sometimes required to re-file the Notice of Trustee Sale (NTS). An auction could be scheduled for the day after your bankruptcy hearing. Whatever you do, do not wait until you lose the stay to explore your “plan B” options.
- Foreclosure is an industry; don’t confuse the role of each player: Your originating lender likely sold your loan to a mortgage-backed security trust (“MBST”). A MBST is an investment vehicle that pools 4,000-5,000 mortgages with cash funded by hedge funds, government and insurance bond buyers. While a trustee (like Deutsch Bank, Wells Fargo or U.S. Bank) is appointed as a figurehead for each MBST; most functions are performed by loan servicers, like OCWEN, Select Portfolio Servicing or Mr. Cooper. Loan servicers are hired collectors charged with of processing loan mod requests; but they do not “own” your loan. The foreclosure trustee is another hired gun; charged with managing the state non-judicial foreclosure process, conducting the auction and granting new title to the highest bidder. Whatever you do, do not wait until you lose the stay to explore your “plan B” options.
- Understand the pros, cons and limitations of RESPA and the CA Homeowner Bill of Rights. Since you breached the contract, the lender has the advantage in the eyes of the law. However, the both federal and state law can be used as a tool to maximize your chances for fair consideration for a loss mitigation program. These laws empower you to delay the auction and get vital information. Master them…or hire an attorney adept at applying these tools. Whatever you do, do not wait until you lose the stay to explore your “plan B” options.
- Do not pay anyone for loan modification services in advance. Be prepared to be inundated with calls and letters from foreclosure predators, shady realtors and unscrupulous law firms. It is illegal for anyone (including realtors and lawyers) to accept upfront money from a borrower for loan modification services. You may be entitled to a triple refund! While you do not need a lawyer to process a loan modification, you may need one to advise you, delay the auction, monitor your lender’s compliance and advocate your state and federal rights. Whatever you do, do not wait until you lose the stay to explore your “plan B” options.
Knowledge is your BEST DEFENSE!
Foreclosure defense attorney Joseph Arthur Roberts offers in-depth hotline consultations for only $99.
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