Describes steps you can take to save your home from foreclosure.

The first thing a homeowner needs to do is keep communicating with the bank. Don’t wait until you fall behind to see if you qualify for a temporary payment plan or a complete modification of your loan. Try to work out some kind of deal; this is good advice when your bank is willing to work with you. It is far more likely your bank will abuse you, given the opportunity, and will crush you and your family.

You can deploy all of the following methods in defense of your home. These techniques worked for many homeowners and they will work for you. To make any of this advice work you must be relentless in taking the steps to stop the bank from foreclosing. This may only provide you with a delay and give you some valuable time to save money to move into a rental.

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When in imminent threat of being tossed out, filing bankruptcy or a civil suit will grant you an automatic stay, or legal pause, on the foreclosure process. With the new bankruptcy laws in effect, a judge can reduce your mortgage and alter the terms. Schedule appointments with a number of lawyers to seek free advice regarding your particular situation. The first visit is always free.

While you are looking for lawyers contact your local legal aid office and see if you qualify for their free legal services. If so, get signed up. You should also contact a HUD-Approved Housing Counselor to determine what options are available to you. 

You will be visiting several offices, be sure to take all your paperwork, this includes copies of all records regarding your loan including those from the courthouse. You also need to find out what the accepted security instrument is in your state, the deed of trust or the mortgage note and the rules of document recording. Be sure to request from your bank a certified copy of the original mortgage note and proof the bank has a legal security instrument, as required by your state’s laws, or in other words, an enforceable lien on your home.

Making written requests for 1) the note, 2) the security instrument and 3) an itemized statement of your account can send your bank into a paralysis trying to produce documents they must legally provide. Many times the lender cannot provide a security instrument and does not have the legal right to force a foreclosure.

There is a multitude of documents you need to request from your bank:

1.      The note

2.      Security instrument

3.      An itemized statement of your account

4.      Itemized statement of escrow account separate from the loan account

5.      Copy of loan pool and servicing agreement stating who is the servicer of the loan and who owns note They are usually two different companies.

6.      Complete transaction history of your loan

7.      Indemnification agreement between servicer and the owner of your mortgage note

If you already know they can’t provide 1 and/or 2 file a request for release of the lien and mortgage.

Many of these documents are never provided, even during the discovery process, so don’t be surprised if they will not give them up without filing a lawsuit. The main point here is you need to stay ahead of the bank by making them prove they have legal right to collect the debt or foreclose.    

It would be far more surprising that a loan, after professional scrutiny, did not contain some element that could void the mortgage or force a renegotiation of terms. The mortgage banking system is really this fouled up and you need to know this before you abandon your home.

Contact HUD (800) 569-4287 by phone or search by state for a a HUD-Approved Housing Counselor

http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm