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Foreclosure: Your Legal Rights

Updated on September 27, 2016

Don't Let Your Home End Up on the Bus Tour

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Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. Formally, a mortgage lender (mortgagee) or other lien holder obtains a termination of a mortgage borrower (mortgagor)'s "equitable right of redemption," either by court order or by operation of law (after following a specific statutory procedure).

Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt. As long as this equitable right exists, it is a cloud on title and the lender cannot be sure that (s)he can successfully repossess the property. Therefore, through the process of foreclosure, the lender seeks to foreclose the equitable right of redemption and take both legal and equitable title to the property in fee simple. Other lien holders can also foreclose the owner's right of redemption for other debts, such as for overdue taxes, unpaid contractors' bills or overdue homeowners' association dues or assessments.

Judicial Foreclosure must be processed and the home sold under the supervision of a court.

Non-Judicial Foreclosure may be processed and the home sold without the supervision of a court. This is a faster way for the banks to complete the foreclosure process.

How foreclosures are processed is based on whether the state your home is located in is a judicial or non-judicial state. The chart below outlines the process state by state.

Know What Your Rights Are

State-by-State Foreclosure Chart

State
Judicial or Non-Judicial State
Length of Process by Days
Alabama
Non-Judicial
270
Alaska
Non-Judicial
300
Arizona
Non-Judicial
300
Arkansas
Non-Judicial
280
California
Non-Judical
300
Colorado
Non-Judicial
330
Connecticut
Judicial
690
Delaware
Judicial
480
District of Columbia
Non-Judicial
300
Florida
Judicial
660
Georgia
Non-Judicial
270
Guam
Non-Judicial
500
Hawaii
Judicial
500
Idaho
Non-Judicial
440
Illinois
Judicial
480
Indiana
Judicial
480
Iowa
Judicial
480
Kansas
Judicial
330
Kentucky
Judicial
420
Louisiana
Judicial
390
Maine
Judicial
570
Maryland
Non-Judicial
485
Massachusetts
Non-Judicial
350
Michigan
None-Judicial
270
Minnesota
None-Judicial
270
Mississippi
Non-Judicial
270
Missouri
Non-Judicial
270
Montana
Non-Judicial
360
Nebraska
Non-Judicial
330
Nevada
Non-Judicial
360
New Hampshire
Non-Judicial
270
New Jersey
Judicial
750
New Mexico
Judicial
450
New York City
Judicial
990
New York
Judicial
820
North Carolina
Non-Judicial
300
North Dakota
Judicial
405
Ohio
Judicial
450
Oklahoma
Judicial
420
Oregon
Non-Judicial
330
Pennsylvania
Judicial
480
Puerto Rico
Judicial
720
Rhode Island
Non-Judicial
330
South Carolina
Judicial
420
South Dakota
Judicial
360
Tennessee
Non-Judicial
270
Texas
Non-Judicial
270
Utah
Non-Judicial
330
Vermont
Judicial
510
Virgin Islands
Judicial
510
Virginia
Non-Judicial
270
Washington
Non-Judicial
330
West Virginia
Non-Judicial
290
Wisconsn
Judicial
480
Wyoming
Non-Judicial
270

Up Close and Personal

I write this article from personal experience as I have been at war with Bank of America and can personally attest to the unethical, misleading, deceitful, and tawdry means by which they profit off the misfortunes of their borrowers.

I could spend an entire month and thousands of pages citing examples, but suffice it to say, if the general public really looked deeply into all the facts of the financial crisis we are now faced with, there should be a much stronger and louder demand for justice. These banking and Wall Street crimes should be prosecuted and the offenders jailed. Instead, our government agencies that oversee the banking industry warn these banks to clean up their act and start policing themselves. Policing themselves? Isn't this the same as using prison inmates as guards or the IRS asking the suspected tax cheat to do a self-audit and send them a report? Am I the only one who sees a real problem with this?

The Game of the Missing Paperwork

This was my modification experience as well as millions of others going through "Modification Hell". Wells Fargo, Bank of America, HSBC and others all use the same modification avoidance game. After hearing so many, I believe that all of these banks have one script that is used when distressed borrowers request modifications. Although the videos are a little long, this is what borrowers refer to as "modification hell". I can personally say that I have been to hell and back and, for which there should be no surprise, was never granted a modification. This is a prime example of what is known as fraud in the inducement. The bank still has you making payments while they are dual tracking you straight to foreclosure. Some courts are now beginning to see this for what it really is and are up-holding the law. Many other courts still wave it off as the bank did nothing wrong. You be the judge.

Modification Hell

Obscene Bonuses and Tax Bailouts - Ain't Life Grand

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These banks have received billions of taxpayer dollars by their simple threats that to deny them bailouts will hurt the country. A thorough study by top economists tells it like it really is. The only real hurt will be to the pockets of the big bankers when they can no longer take millions of dollars each year in bonuses paid by taxpayers and on the backs of distressed homeowners. This is the bankers game of a rigged version of Monopoly, in their favor. The game is to foreclose and take the homes by any means possible.

This was a well-organized and well-planned money-making scheme machine by the largest banks and Wall Street. Most people could never even imagine the trillions and trillions of dollars the banks and Wall Street made and will continue to make off the backs of the taxpayers and homeowners in distress as well as the same on-going business practices.

When the CEO of JP Morgan, Jamie Diamond, was asked about the lack of financial regulation and huge amounts of losses to investors, his response was that it is a free (bleeping) country. Yes, Mr. Diamond, foot loose and fancy free for the bankers and Wall Street to line their pockets and off shore accounts. Unfortunately, Mr. Diamond, ordinary folks are feeling a little less free day by day.

One County Office's List of Upcoming Auctions

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Look Around: What Do You See?

But what about the collateral damage? It's all over and everywhere you look. It touches and affects all of us in different ways. Individuals and families are left destroyed and destitute, our property values have plummeted, crime and suicide is on the rise, neighborhoods are now left unattended and vacant homes have become squat houses. Pension and retirement funds have evaporated based on the illusion of mortgage-backed securities. But while the pension funds evaporated and homeowners were thrown out on the streets, the upper echelons of the banks and Wall Street were receiving enormous bonuses and living like kings and queens. According to these fine business guys and gals, anyone who finds this unconscionable is just jealous and trying to start a class war. As Mr. Dimond said, "it's a free (bleeping) country."

Know Your Rights

Bank Propaganda

It is staggering and to whitewash this is wrong on so many levels that it would be a subject for an entire article alone. Do not believe what you hear via the big banks' media mouthpieces that deadbeat homeowners caused this crisis and there is no correlation to foreclosures and a rise in crime and the demise of families; it is just their propaganda in hopes that the masses will believe it so they may continue doing as they've done. It is a lack of justice to continue to let these crimes continue. All players should be investigated and prosecuted, and if found guilty there should be no "get out of jail" card. To do less is a tragedy for all Americans.

The Real Truth: Dual Tracking

The real truth: intense investigations show "modification hell "is a game all in and of itself. The banks have no intention of ever modifying most of these loans. The banks are really just servicing the loans and their servicing fees are based on a percentage of the mortgage balance. The game is played like this:

  1. You are told to apply for a modification and you are told to submit all of the paperwork and a phone application is taken.
  2. You are told to pay a certain amount during the modification process, therefore, the bank is still getting money from you.
  3. During this period the bank is adding on late fees, inspection fees, insurance and other junk fees to up the balance owed. Most of these companies are subsidiary companies of the banks.
  4. You are told that foreclosure proceedings are on hold while the on-going modification process continues. However, this is not the truth and they are moving forward with foreclosure while you think you are getting a modification.
  5. The next thing you know, you are notified or perhaps not notified that your home has or is going to be sold at auction. Some folks don't even know it's happen until the sheriff shows up to process an eviction because the home is no longer theirs. Families with children are put out on the street along with all of their possessions without any time to make other arrangements.
  6. Nine times out of ten, it is the bank or one of it's affliliates that buy the house dirt cheap.
  7. This whole process has become known as "Dual Tracking".

If you are behind on your mortgage payments, you need to seek legal help immediately so that this does not happen to you. Below are sources of where to get legal help and information in you feel you are in danger of foreclosure. You can't depend on the accuracy of the information received from your mortgage company. Whenever possible, get everything in writing.

Sites With Information on Foreclosure and the Law

Foreclosure Facts

  • Is your state a judicial or non-judicial foreclosure state?
  • 95% of homeowners in foreclosure are not working with an attorney to make sure that their rights are protected. You should also have an attorney negotiate with the bank on your behalf to make sure you are benefited by the best alternatives.
  • Nearly 80% of loans contain violations in lending laws and practices.
  • Even if you can't totally stop foreclosure, you may be able stall it long enough to make other arrangements.
  • You can negotiate a payment reduction if you have an attorney or if you think you can do it yourself. Find out whether your mortgage contains lender violations which can include monetary fines as well as modifications.
  • Feel a little more secure knowing that you have a plan and time needed to get back on your feet.
  • Know that modifications or short sales can leave a loan deficiency or taxes owed after everything is said and done. Don't get caught off-guard later.

I am litigating with Bank of America as a pro se plaintiff because I could find no attorneys in my state who would help the homeowner. I personally have learned much of what I know from the referenced sites above: you can count on the accuracy of the information contained at each site. They also provide tons of other resource links and information to help you protect you and your rights. Livinglies has a network of attorneys by state who are knowledge and handle mortgage defense.

Be very cautious of mortgage defense companies that promise to help you and who want money up-front and promise the world. There are many modification scams out there (this government advisory describes some) and can will lose your money as well as your home.

If you feel you are dealing with a company that may be trying to scam you, report it to your State's Attorney General's Office.

Modification Hell

Brookline Man Fighting to Save Home

Unfortunately, in depth investigations have found that this modification hell is for the sole purpose of dual tracking. Dual tracking is keeping borrowers paying while promising a loan modification while really just grabbing every dime, and adding on late and junk fees. The borrowers believe they are in the modification process while at the same time the bank is moving forward with foreclosure without the borrower's knowledge.

This story caught my attention and is another very good example of the millions of folks who have been or are in modification hell by the too-big-to-fail banks. This was also my personal experience, except that I am still fighting and their attempts to foreclose so far have proved futile. This is why you must stay on top of your situation, try to get everything in writing, and know your rights and how to fight back.

Ray Lavoie's Story - One of Millions With Similar Stories

Ray Lavoie's Video Story Link

This article is straight from Nashutelegram.com, written by Joseph G. Cote, and which I would like to share. ray's story is what some of us who have been through it refer to as "modification hell".

Ray Lavoie built his Brookline home over 20 years ago. He added a shop next door and runs his custom woodworking business out of it. Foreclosure proceedings may mean he's both out of a home and out of work.

He added a shop next door and runs his custom woodworking business out of it. Foreclosure proceedings may mean he's both out of a home and out of work.

BROOKLINE – Ray Lavoie is a self-made man, but eventually, everyone needs a hand.

He mostly taught himself carpentry, starting in his parents’ garage and making stairs through trial and error. After that came windows, then trim and so on.

Eventually, he was building houses from the outside in. He works for himself now, and has for 28 years, doing fine woodworking. He built his brother’s house and his sister’s. He built most of the house he lives in on Cleveland Hill Road after buying the land 21 years ago. He built the huge workshop beside the house where he spends most of his days sawing, sanding, nailing and building.

It’s that house, and the workshop where he earns his livelihood, that he’s trying to rescue from foreclosure and the reason he finally had to reach out for help.

For now, Lavoie, his wife and two teenage daughters are living in a house that Bank of America bought at auction – an auction Lavoie says should never have happened, and praying the sale is reversed.

Lavoie, 48, finished building his house in 1991. Everything went pretty well until about a year and a half ago when the economic recession from a couple of years before finally caught up to him.

Business was slow – really slow. Not many people were redoing their kitchen or building an addition when they didn’t know how long they would be employed.

“No one felt comfortable at work a few years ago,” Lavoie said. “They held off and it snowballed.”

Work has rebounded for Lavoie now, but it may be too late. He fell behind on his mortgage. It wasn’t all at once. He missed a payment and then made one. He missed a couple and then made one, then missed one and made two. And so on.

Eventually, Bank of America came calling, and after months of trying to work with them and being rebuffed, Lavoie entered foreclosure.

Lavoie then contacted HSI Trust, a nonprofit group that helps homeowners fight foreclosure. HSI was able to get Bank of America to review Lavoie’s loan for modification.

But that’s when a series of mix-ups and miscommunications came to a head, and before Lavoie even knew his review had been denied, an auctioneer pulled into his driveway.

It was only after the house was sold – thankfully, back to Bank of America, thereby avoiding the complication of a third-party owner – that the bank told Lavoie it needed a certain form, and that that was why his request for loan modification was denied.

But according to Michele Varney, the vice president of client communications who is handling Lavoie’s case at HSI Trust, that form was never requested. Even if it had been, the form applies to a business partnership, and Lavoie is a sole proprietor.

“Our opinion is Bank of America shouldn’t foreclose on somebody because the customer relations manager handling the case is ignorant of the tax laws,” Varney said. “We had no idea he was out of review. We think it was improperly foreclosed.”

“It’s just a horrible situation,” Lavoie said. “I got foreclosed and they didn’t even tell me.”

Even if the Lavoies didn’t qualify for loan modification, the bank is supposed to evaluate their case to see if it qualifies for a series of other programs before holding the auction, Varney said.

“This auction should have never gone through,” she said. “They didn’t properly review him the way they should have.”

Bank of America didn’t respond to requests for comment.

Meanwhile, Lavoie has put his trust in Varney, continues working and tries not to think about losing the home he built and where he raised two daughters – not to mention the expansive workshop he has built and where he makes his living.

“I put it in the back of my mind,” Lavoie said. “I try my best to not let the anxiety get the best of me. Hopefully, this gets resolved and reversed and I can get a loan modification and move on.

“The future is bright for me, but if I don’t get this resolved, it’ll definitely be a devastating blow.”

Lavoie knows he and his family will get through the foreclosure and auction somehow. Even if the sale isn’t reversed, he said he’ll still have thousands of memories of the home and property – snowmobiling for hours in the woods out back, spending time with friends and family around bonfires in the backyard.

“This is who I am,” he said. “That’s what me and my family are all about. That’ll always be there. The bank can’t take that from me.”

That’s not to say he’s giving up.

“They take advantage of people. Period. Because they can,” Lavoie said. “I’m planning on staying here a lot longer. I’m going to make it work somehow. I mean, I have to. I have two girls.”

Do You Bank With This Company?

Here is one young lady who stood up for what she believes to be the right thing to do. She is a story like thousands of other employees who found the moral character of their working conditions intolerable. Many quit of their own volition and the others that disagreed with company policy were terminated. If you do your banking here, it may be time to bank with a different company.

Community banks could use the extra business, have more integrity and want to be a part of the community. Have you looked at doing business with your local community banks? It is one step that everyone can take and that is to take your business away from the Too Big To Fail Banks. Many kudos to the courageous young lady in the video.

Summary

The threat of foreclosure is frightening. The best advice from those who have been down the foreclosure highway is to first educate yourself with the facts of foreclosure. Reach out to one of the non-profit agencies for help and guidance. The sources that I have listed are trusted and reliable sources; use them. This will get you familiar with the whole process as well as what your rights are.

The chart above gives the approximate number of days from start to sale of the property by state. Remember, there are ways to delay this process longer based on an individual's circumstances and the details of their loan. It took me a year to feel somewhat comfortable with all the knowledge and I am still learning.

Also keep in mind that foreclosure defense is a fairly new area of law and many attorneys are not trained or up-to-date on the ins and outs of this area of law. Look for an attorney that knows foreclosure defense. That is very important or you will end up spending dollars on legal fees that will be of no help. This should be the first question to any attorney you contact.

If you choose or have no choice but to go it alone....proceed carefully, question everything and demand answers from the pretend lender (they are really just the servicer not the actual lender of the money). If you are going to be unable to make your payment, I would suggest sending the pretend lender, a Qualified Written Request which will put them on written notice. If they send you a notice of default that tells you to notify them in writing if you contest the debt; you only have 30 days to send a debt challenge letter. Send the letter by certified return mail. Actually, I send everything and anything to them or their attorneys by certified return mail. Cover your bases because they will more than likely claim they never received what ever you sent them.

Loansafe is another site which also has information and forums to communicate with others who are having the same difficulties. There are samples of Qualified Written Requests all over the internet. Use the samples to help guide you in writing yours. Get educated and know what your rights are or you will lose your house and not even be aware of whether it was a legal foreclosure or not. The stronger you are in the knowledge of your rights and any breaches on their part, the better chance you have to force them to negotiate. They want your house. It is how they make obscene amounts of money. Don't just cave in, stand your ground and fight them.

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    • handymanbill profile image

      Bill 2 years ago from western pennsylvania

      Yes the banks are crooks. They get you on both sides. I used to to property work on foreclosed property. I really hated the job. Then on top of it all to get the banks to pay the set fees for working on preserving theses property was really like pulling hens teeth. It is a shame what they do. I hope it works out for you.

    • Vista15 profile image

      Tiana Dreymor 14 months ago from Columbus, OH

      I've been through it all... I am still in my home that was foreclosed on in 2008...and I think it is MINE. My attorney has 2 more days before she demands my deed. I went with Hope Now, which did nothing but stall it off while I continued making my payments...which they kept adding late charges and more fees...

      I'm wondering if you have heard of 'Right to Cancel.com'? They had 4 phase program that teaches you what the attorney's don't know. I ran out of funds, though and couldn't do the last phase. Still, with what I learned and the fact I didn't give in helped me remain in my home and as I said, I think I WON.

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