Deed in Lieu of Foreclosure

When a property was purchased at a price beyond the current market value, it may not make sense to hold on to it. A deed in lieu of foreclosure allows you to be free of the property without the damage to your credit that foreclosure brings.

A deed in lieu of foreclosure is an alternative suggested by banks and the federal government for homeowners to give title to their property back to the lender. Often times, the lender will even entice wary homeowners by suggesting they may qualify of up to $3,000 in financial assistance for relocation and moving costs.

The unfortunate truth is that deeds in lieu of foreclosure are relatively rare and only available to homeowners that can demonstrate documented financial hardship. This means that if you can continue to pay the mortgage of the property, it is very unlikely that you would qualify for a deed in lieu of foreclosure under standard industry guidelines.

In a perfect world, the borrower and the lender would enter into a deed in lieu agreement that allows the property owner to voluntarily transfer the property to the lender. This may sound like an easy transfer, many unaware homeowners have completed deed in lieu transactions only to discover that they still owe money to the bank for the amount they were underwater on the loan.

If you are considering a deed in lieu of foreclosure, contact us today. We can advise you on whether this is or isn’t a good option for you as well as provide information about why a strategic default may be a better option than a deed in lieu of foreclosure.

Recommendations Worth Your Attention

Fraudulent companies often market their service aggressively. They often advertise everywhere from television to the internet, and claim to be associated with attorneys or that they have attorneys available to assist you.

They are often easily identified by the slogans they use including;

“Over 90% of our customers get loan modifications!”
“100% money back guarantee!”
“We have a special relationship with the banks that can speed up the modification process!”
“We can stop foreclosure – guaranteed!”
“We can save your home from foreclosure and even cancel your mortgage!”

Once they have your attention, they give you the “hard sell” and try to convince you to pay them a fee for their services. They tell homeowners that for a large fee, they will negotiate with your bank for a deal that will drastically reduce the payment you owe. Sometimes, they even convince homeowners to make their monthly mortgage payments to them instead of directly to the bank. All too often, these companies will take your payments and then disappear.

Red flags to look out for:

The company offers a “forensic loan audit” for an up-front fee. According to the FTC, there is absolutely no evidence that forensic loan audits are of any benefit in obtaining a mortgage modification or other mortgage relief.
These “forensic audits” are generally of no value whatsoever and often contain information that is wrong, misleading and does not accurately reflect the state and federal laws they supposedly address.
Con artists offer you a “rescue loan” or a “rent to buy” scheme where you surrender title to your property to avoid foreclosure,
and then rent it back from the company to buy it back later. These schemes are almost always illegal and result in the loss of the home to the scam artists.
The company or “mortgage counselor” claims to be affiliated with an attorney or claims they have attorneys “on-staff.”
These claims are most often false. Make sure that you are dealing directly with a licensed Florida attorney.
Any company that promises to cancel or rescind your loan using legal loopholes or by finding “violations” of REPSA or TILA in your loan documents is highly suspect. These types of claims are almost always cons perpetrated against frightened and desperate homeowners.
Beware of any company that pressures you to hire them right away gives you a high-pressure sales pitch.
Any reputable attorney or law firm will not pressure you to make a quick decision.
Avoid any company or lawyer that offers you a money-back guarantee or otherwise guarantees results.
Attorneys in Florida are prohibited from offering a guarantee to their clients. If someone promises you a guarantee, they are probably not actually affiliated with a licensed Florida lawyer.
Always check any company’s rating with the Better Business Bureau.

These are all reasons why homeowners should not work with anyone who isn’t a licensed attorney when facing foreclosure. It is vital that homeowners know that there are honest legal resources to turn to.

Avoiding Foreclosure Scams

Facing the possibility of foreclosure can be devastating. There are many fraudulent companies and scam artists preying on frightened homeowners by offering mortgage modification and foreclosure rescue services.

These companies often claim they can get a change to your loan that will reduce your monthly mortgage payment or lower your interest rate. Some even claim that they can cancel or rescind your mortgage using legal loopholes, while others claim to be affiliated with a government agency or your lender.

These types of claims are most often completely false. They promise instant relief and financial miracles, when in reality they often leave their “clients” in worse financial shape than when they started.

The Federal Trade Commission (FTC) has enacted rules to help and protect homeowners from these types of scams. For example, the Mortgage Assistance Relief Services Rule (MARS) makes it illegal for mortgage modification companies to collect any fees until a homeowner has actually received a modification offer from their lender that they choose to accept.

Do not fall for these scams from predatory mortgage modification companies!

You Only Have 20 Days!

In Florida, the foreclosure process begins when a bank or mortgage company files a foreclosure lawsuit and records a lis pendens.

A notice of lis pendens is recorded in public record of the county where the property is located. The borrower is then served with a summons and foreclosure complaint. The bank or mortgage company also generally names any other person or entity that may have a legal claim to the property as defendants, including holders of second mortgages or home equity lines of credit, homeowners or condominium associations, and municipal or county governments asserting claims or liens for unpaid taxes or code enforcement fines. Some lenders also commonly name unknown tenants and unknown spouses as defendants.

After a process server or sheriff serves the foreclosure summons and complaint on the borrower, a notice of process is filed with Clerk of Courts. The homeowner then has only 20 days to file a response. If the homeowner fails to do this within 20 days, the attorneys representing the lender can move for a default to be entered.

In our experience, law firms that represent banks in foreclosure actions often fail to move entry of a default. In that case, even if it has been more than 20 days since you were served, you may still be able to defend the case and fight foreclosure. In some situations, the lender’s attorneys fail to move for a default for months. It is very important that you consult with an experienced foreclosure defense lawyer even if you didn’t respond in 20 days. There may still be time for you to defend your case and assert your legal rights.

If you have been served with a foreclosure lawsuit or notice of foreclosure, our firm is here to help you and guide you though the process and inform you of your rights.

Remember, from the time you are served, you only have 20 days to retain an attorney to respond on your behalf and raise legal defenses. Waiting too long can damage your legal rights. Contact us today for a free consultation to find out how we can help you.