What is foreclosure defense? Foreclosure defense is a relatively new legal specialty, primarily in the US, which has gained considerably in popularity following the 2009 housing crisis.
The art of foreclosure defense is to locate errors, negligence, or even deliberately illegal behaviour on the part of the bank or lender that can often result in the bank being forced to negotiate a loan modification. In other cases, foreclosure defense may simply involve the attorney negotiating directly with the bank for a short sale or loan modification, or devising a strategy (such as certain types of bankruptcy) that protects the home from foreclosure.
If the bank has already begun foreclosure proceedings, foreclosure defense can help prevent the home from being sold off and even stop the process of foreclosure.
Foreclosure defense law is not widely practised in Canada. The best defense is still to negotiate with the lender and try to obtain a modification, such as an alternative payment schedule, that will allow you to bring the mortgage current.
Since foreclosures are expensive and very time consuming for the lender, in many cases they will prefer to work with you, the homeowner, in order get the mortgage “back on track.” However, to do this they must believe that this is the best way for them to recoup their money. If your missed payments are due to a one-time emergency, such as an injury or job loss, then the lender may be willing to work with you and avoid foreclosure.
Unfortunately, this is not always possible. In this case the lender (or, later in the foreclosure process, the court) will give you a chance to “redeem” the mortgage by paying off the balance, including interest and associated fees.
Since many homeowners facing foreclosure are not eligible for a traditional mortgage in order to refinance their current one, we have developed a program to connect them with alternative sources of lending and save their homes from being sold. In this program, the lender is paid off immediately and the homeowner keeps living in the home, paying rent to a private investor.
A portion of their rent goes towards a future down payment on a traditional mortgage, and during the program we mentor the homeowner back to good credit health so that they will be eligible for a mortgage within a few years. Finally they exit the program by going to a bank and getting a normal mortgage again, with a good enough credit score that they do not have to worry about facing foreclosure in the future.
If this sounds interesting to you, contact us and we will be happy to explain how we can save you and your house from foreclosure.