If there was anything positive that came out of the prolonged discussions between the states and the banks on the mortgage servicing settlement, it was that banks were reluctant to go full steam ahead in the foreclosure process while talks were ongoing.
But even before the settlement was announced, we saw signs that pointed to more foreclosures in 2012.
According to RealtyTrac, there were 24,783 foreclosure filings in the state of Florida in January, a 14% percent rise from January 2011, the first year-over-year increase in over a year.
Now that the settlement has been agreed to, the training wheels are off.
It’s petal to the metal folks. One thing that the settlement does for the banks is provide them a blueprint for how to proceed in the foreclosure process without getting their fingers stuck in the cookie jar.
Which means borrowers will once again have to defend themselves just as rigorously as they did pre-robosigning.
I’ve been asked if the settlement changes my advice to homeowners, to which I reply, ABSOLUTELY NOT!
You must continue to stand your ground. If you are in foreclosure or about to enter foreclosure, I will say what I have always said, you must fight the banks and force them to kick you out of your home.
The settlement may have changed the rules for the banks, but it shouldn’t change the rules for you, the homeowner. The banks will not transform into wonderful and charitable companies just because the settlement might penalize them.
Make no mistake about it, they will continue to come at you and come at your hard.
So allow me to reiterate my advice to you, the borrower.
Get legal representation if you need it and force the banks to kick you out. Settlement or no settlement, you still have the choice to modify or do a short sale or stay and fight.
Just because the settlement exposed much of the banks misconduct does not mean you will automatically be off the hook.
Unless there is a sheriff’s deputy at your door, do not give in.
If there is proof your mortgage was caught up in a fraudulent securitzied trust, you have a much better chance now of halting the foreclosure process outright. Courts have finally caught on to the banks illegal behavior and they can’t hide behind the bench as they have done before.
Of course you won’t have your case dismissed if you don’t, say it with me now, STAND YOUR GROUND.
If a dismissal seems unlikely, then you should look at a short sale. They are on the rise and many banks will offer you substantial cash, as much as $35,000, if you agree to sell your house back to the bank.
Lenders are willing to let you walk away from your underwater mortgage if you do so legally.
That way you can get a fresh start in a more affordable home or in a rental property. But don’t expect them to make such an offer if you move out the minute you are unable to afford your mortgage. State your case, and STAND YOUR GROUND.
Your third option is to seek a loan modification or mortgage relief from the government. There are more government programs than ever, in part because of the mortgage settlement.
While many of them have not been successful in the past, the settlement has pumped more money into these programs and you have a much better chance of qualifying and ultimately staying in your home.
But remember you can’t qualify for these programs if you move out.
Stand your ground, and fight the banks.
In The Trenches