This continues the series of guest posts by foreclosure defense attorney N. Ana Garner. The first in the series is here.




By N. Ana Garner, Esq.

Typically,  you will receive telephone calls from the servicer (the company to whom you make payments) very soon after missing your first payment. These calls will continue, sometimes daily,  with aggressive bill-collectors badgering you to make your full payment now. The only way to stop the phone calls is to request in writing that they not contact you by telephone,  but only in writing.   If the loan is FHA-insured, many lenders are required to accept partial payments. Before making any partial payment, confirm whether this applies to your loan, otherwise, your partial payment isn’t applied to the loan, nor is it returned to you.

You will probably start getting letters from the servicer stating that you can apply for one of the programs designed to keep people in their homes. I encourage my clients to participate in this process, even though the results are less than satisfying for most. Who knows, you may get lucky and get the modification you need to afford to stay in your home. If your loan was a no-doc, with no income verification, it seems odd that the bank is now asking for documentation of your current income and expenses to modify an oppressive loan that required no such documentation originally.  At the very least, this process can buy you another couple of months before the inevitable foreclosure suit. There are certain regulations a lender must follow before filing suit, and by participating in the loss mitigation process, you may have defenses available to you for the servicer’s failure to follow applicable laws. The servicer who files a foreclosure suit while you are being considered for a HAMP modification is in violation of the servicer’s contract with the  U.S. Treasury and program guidelines. Keep copies of all paperwork generated in this process for later review by your attorney.

After several months of correspondence and documentation has been submitted, you will receive a letter from an attorney for the servicer or bank. When you receive the first letter from an attorney, you’ll know you are getting close to the foreclosure suit being filed. The attorney  will give you a notice of default and intent to accelerate, which means that if payments are not caught up within 30 days, the full amount will become due and owing.  This is a good time to hire an attorney if you want to live in your home for a while. You may get a second letter in 30 days stating that the note has been accelerated, or you may just get a stranger at your door who asks you if you are “Mr. X”, at which point, they hand you a fat envelope. That envelope will contain a Summons, Complaint in foreclosure, and attachments to the Complaint. You have 30 days to file a formal answer with the court, and send a copy to the bank attorneys.   DON’T IGNORE THESE PAPERS!  You must file an answer to avoid a default judgment and imminent sale of your home.  Banks count on most of these foreclosures being granted as a default judgment because most homeowners don’t even bother to file an answer, mistakenly believing there is nothing they can do about the situation.  Why be one of these statistics when you can fight for your home?

In cases where the bank knows it lacks the proof of standing (the legal right to file suit because they are the owner of the Note), just having an attorney file an answer for you may cause some of these cases to wither away.  If the plaintiff (the party who started the lawsuit) fails to take action that moves the case towards finality, the judge may dismiss the action after 6 months of inactivity, for lack of prosecution.  However, the bank can have the case reinstated within 30 days, or it can refile a new lawsuit at a later date.

Aggressively defending the case may put you in a better bargaining position when the case is scheduled for settlement conference.  Many foreclosure defense attorneys are getting good results at mediation, typically far better than the loan modifications that were offered before suit was filed.

Ana Garner, Attorney at Law, represents only homeowners in the Santa Fe and Albuquerque areas.  She has 30 years of litigation experience in N.M. courts. Her mission is to protect the integrity of the judicial process in foreclosure actions and expose the fraud being perpetrated on the courts and citizens.  Her contact information is garnerlaw@yahoo.com; telephone 505 474-5300. She will review foreclosure lawsuit documents at no charge if they are scanned and e-mailed to her with the subject line, Free Review of Foreclosure docs.


The series will continue here tomorrow.


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