Selling your home is the most common way to exit foreclosure without getting approval from your lender. If selling isn't an option for you, you can also consider pursuing legal action against you lender or filing bankruptcy in some situations. Both of these actions, however, require local, experienced legal counsel. I don't recommend going to your personal, general practice lawyer because they won't know the specifics of Truth in Lending laws, mortgage regulations, or bankruptcy. They may be able to give you a good referral, though....or see below for my recommendation on how to find a good, trustworthy lawyer.
How Does Bankruptcy Work, Memphis Bankruptcy Attorney, Free Bankruptcy Lawyer,
Litigation
If you believe there was anything improper about the way your loan was sold or structured or the manner in which the foreclosure action has been initiated or conducted, you should contact your lender with your concern. If they refuse to correct the error, it may be appropriate to bring legal action against them. You may want to consider legal action if you feel you were defrauded by the lender, its employees, or the broker that sold you your loan as well.
Bankruptcy
Bankruptcy should be a last resort in my opinion. Once you file for bankruptcy, your opportunity to negotiate with your lender goes away. Proactive homeowners are often successful in negotiating with lenders to reduce monthly payments, reduce interest rates, and waive certain fees; especially with the Home Affordable Refinancing and Modification Programs. You can also often get past due payments and charges added to the loan balance and re-amortized into the mortgage under the right circumstances. All these options are gone once you file bankruptcy, though. Your mortgage cannot be modified most of the time unless it's removed from the bankruptcy case.
On the flip side, however, a bankruptcy filing can eliminate your legal responsibility to pay for your mortgage. What it does not do, however, is remove the lien from your home. Which means your lender can still foreclose on you and kick you out of your home. I know it sounds confusing, but if your bankruptcy is settled and the judge says you aren't responsible to pay your mortgage payment any more (which is VERY unlikely), you could still lose your home. Don't be fooled by companies or people that tell you filing bankruptcy will stop your foreclosure!
It will stop it temporarily, but in over 90% of cases, the judge either excludes the mortgage from the bankruptcy case or adds the amount you're past due on it to your bankruptcy workout plan. Either way, your lender can continue with the foreclosure action if you don't pay and many times, you'll wind up paying a much larger payment than if you had worked with the lender yourself!
Find a good/trustworthy lawyer that may take your case for free or at low cost:
National Association of Consumer Advocates
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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