Q: Can a lawsuit against your lender or mortgage broker affect the foreclosure sale or the amounts owed?
Absolutely. If you have had your loan reviewed by a forensic loan auditor and violations have been found,
bringing a lawsuit against the lender and broker could precipitate settlement discussions which affect the foreclosure
sale and the amount you owe under the loan. The lawsuit gives you leverage to negotiate better loan terms and can
impose significant monetary damages against the lender and broker.
Q: I’m behind in my mortgage payments, what should I do?
If you have missed several mortgage payments, you will begin to receive phone calls, letters and/or notices from the lender or bank instructing you to cure your default. Take immediate action and do not ignore the situation! While
you should make every effort to become current with your payments, sometimes you cannot feasibly afford to do so.
If that is the case, you should save or document all the correspondence between the bank and yourself and should seek the counsel of an experienced attorney and develop a plan of action going forward.
Q: I’ve been served court papers for foreclosure, what should I do?
If the bank or mortgage company has started a foreclosure suit against you, you probably were served a summons
and complaint by a process server. Once served with these documents, you must immediately answer or demur to
the complaint. The answer contains your legal justifications or defenses and may include a cross-complaint against
the bank and/or lender for procedural and substantive violations of your legal rights. Once a lawsuit is initiated, there
are complex legal rules and timelines to follow. If you have been served with a lawsuit, in order to properly protect
yourself, you should immediately seek the counsel of a competent attorney.
Q: Should I offer a deed in lieu of foreclosure?
There are advantages to offering a deed in lieu of foreclosure. It could save you time and money and will not be as harsh of an impact on your credit a will a foreclosure. The main disadvantage to taking a deed in lieu of foreclosure
is that any junior liens will not be extinguished. You should order a preliminary title report and review it to determine
if any junior liens exist that would survive the deed in lieu of foreclosure.
Q: Should I short sale my home instead of foreclosure?
A short sale is when the borrower can’t maintain mortgage payments, and the bank allows the property to be sold at a loss instead of going through foreclosure process. With a short sale, the consumer typically doesn't have a
foreclosure or a deficiency judgment and can walk away with their credit mostly intact.
Q: When negotiating with the bank, should I stop paying my mortgage?
If you can afford to make your mortgage payments, you should pay them
as they become due. However, due to the current economic climate,
some hard working families and individuals simply can’t keep up.
Deciding whether to pay or not is up to you. It is both a personal and
business decision. Do you keep siphoning money away on a toxic asset
or do you put yourself in the best possible position to get into a better financial arrangement?
Q: Can I keep my home if I file bankruptcy in California?
A bankruptcy judge may allow a debtor to keep the home if they are able to make the mortgage payments on the
property and if the debtor does not hold more equity in the property than that which is allowed by the California
homestead exemption. California property owners are also entitled to keep some of the equity in their homes
pursuant to the state homestead laws. Those laws provide different exemption amounts for different living
arrangements. A homeowner who lives with a relative who is not an owner of the home is entitled to a $75,000
exemption. A homeowner who is disabled, who is age 65 or older or who is age 55 with a low income is entitled
to a $150,000 exemption. Homeowners who do not fall into either group described above are entitled to a
Q: Can a lender sue a borrower for a Deficiency Judgment if the lender is still owed money after a
foreclosure sale in California?
A lender may only obtain a deficiency judgment if the lender originally sued the borrower to obtain a judicial foreclosure. If the lender sought a non judicial foreclosure sale, then there is no right to sue a borrower for
a deficiency judgment.