Requesting the Note: Avoiding Foreclosure?

FACING THE LOSS of their homes, some individuals are partnering with their attourneys and asking banks to produce the original mortgage note, thinking it can delay foreclosure.

This and many other similar tactics are employed by both savvy and unscrupulous attorneys to affect this and other delaying outcomes on a foreclosure. Some of these tactics are reputable and others are not.

The main disreputable thing attorneys are sometimes doing is implying that they can “Stop” foreclosures. Or they are implying that by “Avoiding” foreclosure that the bank will not (or cannot) foreclose. Just not true.

The measures introduced today by the Obama administration may positively effect homeowner’s goal to stay in their homes. The challenge can be likened to that of “triage” in a war zone battle: who can be saved and who is just “too far gone” to be helped? What criteria should be applied? Who should be “thrown a lifejacket” – and who should be allowed to drown?

Some possible criteria include: method of qualification (stated / full doc), can they prove they can make a reduced payment, did they buy with a downpayment or with “no money down”, are they employed? Some not so popular additional criteria may be applied (rightly or wrongly!) such as: are they party to a lawsuit, is it a condominium in which there will be special assessments, do they have unpaid taxes to the Federal or State, are they currently behind in child support or alimony payments, etc? Are there unpaid property taxes and if so, how will they be brought current?

If they could not qualify for a home in today’s market, even with a revised market value placed on their home, then perhaps they should not be “bailed out”. These are difficult and unpopular decisions. Regrettably, however, we cannot save everyone – nor would it be wise to do so. We await the criteria by which lenders will decide to lower interest rates, fix interest rates, reduce principal balances, and recover the real estate market.