 You don’t need to drive very far in Southern California to know that the foreclosure problem in the region has reached epidemic proportions. As attorney M. Erik Clark tells us, many homeowners are for the first time searching for answers on what to do when they find themselves facing the frightening possibility of losing their home. Clark, a founding partner of Borowitz, Lozano & Clark in West Covina, has represented thousands of consumers in Chapter 7 and Chapter 13 bankruptcy cases and serves as president of the National Consumer Bankruptcy Litigation Center. If you are in danger of losing your home, Clark says, the first thing you need to know is the timeline involved in the foreclosure process. In California, the foreclosure clock begins to tick on the date your lender records a “Notice of Default.” Your lender will mail you a certified copy and the letter will have the recording date stamped in the upper right hand corner. You have three months from the date that the notice is recorded to reinstate your loan. If you do not do so, your lender will record a Notice of Trustee Sale and mail you a copy. The sale can take place as little as twenty-one days from the expiration of the Notice of Default. If the sale is postponed you will NOT be notified of the new date. You must check on this yourself. After the foreclosure sale, the buyer will require you to vacate the premises. If your lender buys the property, you may be able to negotiate the move out date and money to move with. This process is called “cash for keys.” If you do not move out, the buyer will proceed with an eviction. Do not let it get that far. If you fall behind on your payments and are trying to avoid foreclosure, it is imperative that you take a good look at your overall financial situation and figure out why you are in this situation. For example, if you are struggling with significant credit card debt, and the related monthly payments are eating into your ability to make your mortgage payment, then you should consult with an attorney to discuss how to reduce or eliminate this burden through either debt consolidation or bankruptcy. By freeing up these monthly payments you will better be able to make your future mortgage payments. If you suffered a temporary setback, and are now able to make your mortgage payments but are unable to catch up on the missed payments, contact your mortgage servicer and see if they will roll the arrears onto the back of your loan. If they will not do this, again, consult with a lawyer because Chapter 13 bankruptcy will force your lender to spread the missed payments out over five years. In many cases, Chapter 13 also allows you to eliminate your second mortgage if your house is worth less than what you owe on your first mortgage. If, however, your inability to pay your mortgage is due to a change in your interest rate, you will likely need to seek a modification of your mortgage. If your loan qualifies for modification, and not all do, you should contact your mortgage servicer directly. If you want someone to pursue a modification on your behalf, seek a referral and be wary of loan modification scams, which have become very popular in Southern California. Real loan modifications involve lowering the interest rate for a period of time and/or extending the term of the loan. This reduces your payment but may mean that you will pay your mortgage for a longer period of time If ultimately you lose your home in foreclosure, you should consult with an attorney to discuss any potential liability you may have for the losses your lender sustained during the foreclosure process. Page: 1 of 1 pages for this article
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