By: Emma Scott, Esq.
Owner, The Scott Law Office, Chicago, IL
www.scottlawchicago.com
For what seems like years now, the headlines have been screaming a seemingly endless stream of bad news from the housing and lending crisis. Lenders are evil! Borrowers are lazy and unworthy! Someone has to take the blame! Truthfully, there is enough blame to go around for everyone. But, if you're a homeowner facing a foreclosure summons, you're less worried about blame and more worried about what to do next.
The first feeling when receiving that summons is often one of being overwhelmed and defeated. It's likely you knew this moment was coming; you're at least three months behind in your mortgage payments, after all. But there's something about getting the papers that makes it more real and final. When feeling overwhelmed and defeated it's easy to give up and not see all the options available to you. However, the most important first step in your foreclosure defense is the realization that you have options, and that there is a wealth of information available to help you make decisions. After you take a few deep cleansing breaths, assess the situation as follows:
What is my goal? Do you want to keep the home? This is maybe the most important initial question to ask yourself. It's followed closely by...
Can I afford my goal? Many people would like to keep their home, but a quick financial assessment shows them it's not realistic. Before even talking with a bank about modification or a short sale, make a written budget including all your income and expenses. Be rigorous and honest with yourself. If you can't afford the current payment, chances are you won't be able to afford the modified loan payments, which are likely to be higher.
How do I get to my goal? If you think you may be able to afford a modification, it's time to contact the bank and have them run the numbers. Be proactive and aggressive in dealing with the bank and get everything in writing. Banks are notorious for letting paperwork on these deals fall through the cracks. Do a little internet research on the HAMP (Making Home Affordable) legislation that builds in a number of protections for consumers modifying their mortgage loans.
If you can't realistically afford to hang onto this particular property, realize that you may have options to pay off the loan such as a short sale or deed in lieu of foreclosure. It's possible one of these could help you get out from under the loan and avoid having a foreclosure judgment on your credit report. An attorney can help you sort through these options and exercise them in a timely manner.
And while we're on the subject of attorneys...
Should I hire an attorney or go pro se? As an attorney focused on defending borrowers in foreclosure litigation, you may think my ultimate goal is to convince you to hire me. Yes, I'd love it if you were moved by this article to call me and get an analysis of your foreclosure case.
But, there are situations where an attorney is called for, and those where it is not. If you don't want to keep the property, and you don't have a defense to the litigation (a topic for another blog post), you're throwing good money after bad by hiring an attorney to represent you. In this situation there are many good free resources on how to file the appropriate paperwork on your own. A good place to start is http://www.illinoisprobono.org/index.cfm?fuseaction=home.dsp_Content&contentID=1640.
Finally...Don't Panic. I realize this may be the most dire situation you've faced in your life, and that not panicking is easier said than done. If you're not sure whether to get an attorney, and you need support, enlist a trusted business-savvy friend to help you sort through the options. Whatever happens, ignoring the situation is NOT the solution. Dealing with the situation head on will leave you feeling more empowered, and put you in charge of your options.
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