Stay In Your Home Payment-Free
The most important point about foreclosure is this: you don’t have to give up your home just because the Bank starts sending you threatening letters.
It may be up to you to decide whether the foreclosure process takes 3 to 5 months or whether it takes 12 to 24 months --during which time you can be hoarding all or part of the funds you would normally be paying to a bank. (Open up a separate bank account and don't touch it!)
The 3 to 5 month period is where you assume that you are powerless to fight the bank, you offer no resistance, the bank files a lawsuit for foreclosure, you don’t contest the lawsuit, the bank gets a judgment requiring a sale of the house, the bank takes the home back, the bank has you evicted.
But here are the alternatives if you fight the bank in court:
(a) You win and the bank decides to make you a reasonable settlement offer enabling you to keep the house;
(b) You win and the bank has to start the foreclosure process again. This gives you more time.
(c) You lose--but you have been able to prolong the process.
Admittedly (a) and (b) are long shots. But you will be surprised by the number and variety of legal defenses that can be used, depending upon the facts of your case. There are many rules and laws and regulations on the books so there is a good chance that we will find something that the bank did wrong.
But there is also a very good chance that the bank will—early in the case—win a motion for Summary Judgment (the judge decides that you have no case at all). This means that you will lose the time it would take to schedule and hold a trial. So let’s say the bank wins a Summary Judgment and the judge orders your house sold at auction. More time will take place before the auction is held. Surely you will have to move sometime before the auction date. Right? No. Wrong. You may decide to file for a Chapter 13 Bankruptcy (say the day before the sale.) So the house must be pulled out from the auction. The bankruptcy process may give you another 3 months before the bank shows up again.
During Chapter 13 Bankruptcy, the bank succeeds in restarting the foreclosure process. After more months pass, another auction date is set. At auction, either the bank will “take the home back” in repayment of your loan or a home buyer will make the purchase. Either way, the eviction proceedings will be undertaken and a judge will order you to vacate.
You can then appeal the judge’s order, lose the appeal, be ordered to vacate, force the homeowner to go back to court to get a “warrant of possession”, then ask the Sheriff to force you to vacate at a certain date—and you move just prior to that date.
So let’s review the timeline. You miss payments; the bank writes letters; the bank accelerates your loan (this makes the whole loan balance due); the bank files a foreclosure action; let’s assume that the bank wins; an auction is scheduled; you file for Chapter 13 Bankruptcy; the bank restarts the foreclosure process, another auction date is set; now you move out.
This whole process can take between 12 months and two years. In the meantime, you have saved enough to rent a decent house or apartment. You will rebuild your credit and, after a couple of years, you buy another home—or perhaps you decide that home ownership is not as great as you once thought.
Questions about Foreclosure? I am an attorney and I give advice on foreclosures and bankruptcy in Louisville, Kentucky and Southern Indiana. CALL ME ON MY CELL NOW. I WILL PICK RIGHT UP OR CALL YOU BACK WITHIN 20 MINUTES”
