Facing Foreclosure?

Few things outside of harm to our family cause as much stress as facing a foreclosure of your home in Alabama.

If you are like most people, you have a lot of questions.

We want to do our best to answer the questions that you may be asking yourself and others.  This will be a growing part of our website so let us know what questions you have that we have missed.

What does it mean when your mortgage company accelerates the note?

You receive a letter from your mortgage company or its foreclosure lawyers.  The letter says you are in default of your note and mortgage.

Under some circumstances, the mortgage company can say the entire balance owed is due now.  Instead of paying it over 30 years it is “accelerated” to be due now.

If you don’t pay it off, then the mortgage company will foreclose on your home.

Why did my mortgage company say it will advertise my foreclosure in my local newspaper?

In Alabama, foreclosures are done in a non judicial manner — there is no lawsuit against you.  Instead the mortgage company auctions, or sells, your property at a foreclosure sale.

The way this is advertised, according to Alabama law and your mortgage, is to advertise the sale in a newspaper in your county for three consecutive weeks.

Isn’t advertising in my newspaper an invasion of my privacy?

It could be if the foreclosure sale is improper.  But if it is proper and legal, then this is what the mortgage company has to do in order to foreclose.

Is there any way to stop the foreclosure sale of my home?

Yes.

What are some options?

You have several.

• File bankruptcy.
• Sue your mortgage company and obtain a temporary restraining order (TRO).
• Reinstate the loan by paying the back amount owed (plus fees).
• Sue and let the mortgage company decide if it wants to stop the foreclosure or not.

Explain to me about filing bankruptcy.

If you file a bankruptcy, normally this will stop a foreclosure immediately.  Now, it may only be a temporary delay but it can work to give you time to think and act.  Do keep in mind that if you file a chapter thirteen bankruptcy, you will need to make your normal payments as well as pay back the arrearage, so for most people this is not very feasible.  In a chapter seven bankruptcy, if you are behind (and you must be if we are talking about a foreclosure), then the mortgage company does not have to let you re-affirm and keep the house.

Bankruptcy is certainly an option but normally it is not the ultimate solution — it is normally a temporary solution so you can think through all of your options and then make the right decision.

How do I sue my mortgage company and get a TRO?

As in any suit, you need a valid basis to file the suit.

Maybe it is breach of contract or fraud or negligence.  But there must be something that the mortgage company is doing wrong to justify filing suit.

We do not ever file suit just to buy someone time.  In our opinion, that is not a proper reason or basis to file suit.

But if you have a legitimate basis — the mortgage company has broken the law in some manner — then you can sue before the foreclosure and ask for a temporary restraining order to stop the foreclosure.

There are some requirements to prove you deserve a TRO and that you qualify for it but this course of action is an option in some circumstances.

What does it mean to reinstate the loan?

Normally the mortgage company will give you an amount that you need to pay in order to stop the foreclosure and get the loan back to a current status.  This is also known as re-instating the loan.  Usually this is a sizeable amount of money but it is certainly worth looking into if you have access to some money.

If I sue, why would the mortgage company cancel the foreclosure sale without obtaining a TRO?

If you have a basis for suing, then one approach that we normally take is to file suit before the foreclosure.  Then we notify the foreclosure attorneys that suit has been filed and why we feel the threatened foreclosure is a wrongful one.

We then point out that there client has a choice.  Proceed with foreclosure and, if it is wrongful, they will have serious consequences because the mortgage company was warned.

Or, the mortgage company can postpone the foreclosure.

Since the lawyers we deal with know we will try cases, they normally do not like to give us arguments that make their clients look bad.  Imagine the closing argument “We sued them, let them know the foreclosure was wrong, and they still foreclosed  What will it take to stop this company.  A large verdict.”

What comes after a foreclosure?

After the foreclosure sale, you will normally receive a letter from the foreclosure attorney saying that your home has been sold and you must leave or “vacate” the premises.  If you do not vacate within 10 days, the attorney will tell you that you will be sued to force you out of your home.

You will also likely receive a visit from a real estate agent who will tell you that you have to leave and the agent wants to help you.  The agent will offer you “cash for keys” which is where you get some money (a thousand or a couple of thousand of dollars) and in exchange you give up your right of redemption and agree to leave the house.  Normally, you will also have to sign a release which means all of the wrongdoing that you may have suffered from the mortgage company is “settled” or “released.”

Should I start packing?

That is a tough question to answer.  First, you need to know if you want to stay in your home.  Does it make economic sense to stay there?  Are you upside down?

Do you have emotional or non economic reasons for wanting to stay?  Great neighbors, school district, close to family, etc?

Second, do you have a legal basis to sue the mortgage company?

Was there fraud?  The most common type we see relates to cancelling the foreclosure sale, and then after the foreclosure, the company says “Oops, we told you wrong.  Sorry.  We can’t help you.”

But there can be fraud before the foreclosure sale also.

Bogus fees.  Improper application of payments.  A number of things that be a breach of contract.

You should really get with a lawyer in Alabama who has experience suing mortgage companies to see what your options are legally speaking.  Then you combine this with how much do you want to keep your home and you should reach the right decision for you.

Can you afford to hire a lawyer to fight against your mortgage company?

Different lawyers charge different ways.

But you should expect to have to pay money if you want someone to fight for your home.  It may be that at the end of the day there is money to split with your lawyer or there may not be any money at the end of the day and most lawyers are not going to work on a foreclosure case on a pure contingency basis.

Bottom line is if you want to fight for your home, then be prepared to fight.  If you are looking to not have “skin in the game” in terms of your own money, then I can tell you that we cannot help you.  Perhaps other lawyers can.

We will say this in closing on the issue of money — if you can afford your house, you can afford a lawyer.  If you can’t afford your house, then you need to consider whether you want to stay there and how you will stay there.

Give us a call at 205-879-2447 or fill out our online contact form and we will be glad to chat with you and go over your options.