Most people that are facing foreclosure can get easily overwhelmed and feel like nothing can be done to salvage the situation. Millions of families have been in the same boat as you over the past few years. Some people have done nothing, and lost their house. Some families have fought to the bitter end and won. You can work through foreclosure, but you are going to have to do some heavy lifting, or have a professional do the heavy lifting for you.

There are a range of options that are available today that weren’t available a few years back. Today, we will go over a few of these options, and we will dial into more in depth solutions in the following posts.

The first thing you MUST do is SOMETHING. That may sound weird to you, but there are people who go into “foreclosure” avoidance mode and wind up losing their house when other options were available to them.

Foreclosure Options:

1. Sell Your House
If you have equity, and time, the best thing to do might be to go a traditional route and hire a professional real estate agent that specializes in distressed property. There is a company that specializes in helping people Sell Their House Fast

2. Short Sale Your House
If you are upside down on your mortgage, meaning you owe more than the home is worth, one avenue to explore is having a short sale on your house. A short sale is when you get the mortgage holder to accept less than the stated mortgage. To get this facilitated, reach out to a local short sale expert. In the next few weeks, we will introduce some of the top short sale experts in the country to you.

3. Apply for a Loan Modification Program
A load modification is when the mortgage holder modifies the original terms of the mortgage note. Sometimes the mortgage holder will reduce the monthly payments temporarily to help you if this is a short term trouble spot for you. The note holder might adjust your APR (annual percentage rate), this will reduce your monthly payments.

Another type of modification is when the mortgage holder takes all of the payments that you are behind and parks it on the back of the mortgage. This is a grace period and the back payments will still have to be made. Loan Modifications can come in all shapes and sizes, and we will explore these in depth as the weeks go on.

4.Offer your Bank a Deed In Lieu of Foreclosure
What this basically means is that you give the keys and all interest in the property back to the bank. This was once a popular tactic used by the banks because most homes in foreclosure a few years back had equity built in. The banks would sell the home and keep the profit. Today, less and less banks will accept a deed in lieu.

5. PICK UP THE DANG phone and call your mortgage company. Explain your situation, and ask them what special options they have for you. Banks DO NOT want to take your home via the foreclosure process. You will find a much more responsive loan officer on the phone today than you would have 3-4 years ago.

6. You can file bankruptcy
There are different types of bankruptcy and every state has different laws on the books. We will have state and national specialists post the various pros and cons of bankruptcy.

7. Strategic Default

When all else fails, and you have tried to sell your house, work with the bank, and do everything else you can, strategic default is always an option, although it is one the we would only recommend to a slight fraction of the homeowners facing foreclosure.

Our next series of posts will be on short sales, the process of short sales, and how to find a short sale expert near you.

Latest Acquisition Extends Consumer Reach of Company’s Real Estate Vertical

MARIETTA, GA- HBN Interactive today announced the acquisition of IAmFacingForeclosure.com, a leading foreclosure help website.

IAmFacingForeclosure.com has grown by 200% during the last two months and is projected to have well over 500,000 UVs (unique visitors) in 2010. This growth is driven by the site’s collection of foreclosure help experts and foreclosure assistance companies.

“This is a hot area,” said Duane LeGate, CEO of HBN Interactive. “Foreclosures continue to plague the real estate market and there are no clear cut solutions for homeowners. Our mission at IAmFacingForeclosure.com is to is to walk the homeowner through the minefield of options and provide them with the service(s) and advice that best suits their personal situation.”

IAmFacingForeclosure.com is a perfect compliment to HBN Interactive’s portfolio of real estate related companies. Some of which include: HouseBuyerNetwork.com which focuses on short sales on behalf of the homeowner, SellMyHouseFast.com which introduces homeowners to quick sale solutions, and ~4,000 other real estate web properties with related resources. Since its establishment in 2004, HBN’s real estate vertical has expanded from a single website to include over 4,000 principal websites which consist of millions of monthly page views.

“We are very focused on helping homeowners face the challenges in today’s extreme real estate market. By leveraging HBN Interactive’s suite of services, homeowners can: sell their house in a quick and efficient manner, short sale their house with HBN’s experts, buy discounted property, and perform various other real estate related transactions.” added LeGate. “We believe the market will continue to struggle for years, and we plan to continue to bring innovative solutions to the market that will benefit homeowners that need immediate assistance.”

About HBN Interactive

Founded in 2004, HBN Interactive is a unique and leading Internet Real Estate Media Company. HBN Interactive has assisted close to one million homeowners needing specialized assistance. HBN Interactive has built a network of the best professional service providers in the real estate arena that can assist both home sellers and home buyers.

HBN Interactive Media Contact
For all media inquiries and interview requests, contact us.

Contributed by Rob Harrington
co-founder, LoanChex, Inc.

I basically got into the loan audit business as a means to save my properties. As a small-fish RE investor, I was able to retire in 2005, only to wake up in 2007 and find I was possibly going to lose everything. I started the same way many of you are starting–by researching the fraud in my own two WAMU loans. My Florida nightmare had begun.

A few weeks ago, after 2 and 1/2 years of pure hell, fear, misery, frustration…. (sound familiar…?) opposing counsel and whoever purported to “own my loan” failed to show up to the hearing. The hearing was to show cause as to why the Judge’s direct order to compel discovery was not followed. That is a no-no with Judges. It shows disrespect to the Judge, the court, and to justice and fairness. And my case was dismissed… for now.

As co-founder of a Mortgage Fraud Examination firm, I have talked to many of the best auditors in the country. Here is what you should consider before you spend more money towards your legal defense of your home.

1. Only get a loan audit if you are under direct supervision of a qualified foreclosure defense attorney. Your counsel will better determine the scope of work of the audit. I urge new auditors to work ONLY under Attorney supervision and NEVER directly be paid by the homeowner. The rationale behind my humble opinion is that history repeats itself. The Attorney Generals will soon be coming after the auditors as they did the loan mod types for many good reasons. Many auditors will be coming over from the loan mod business now that they are getting shut down. This industry will become “infested.”
2. Don’t buy an audit directly from an auditing firm. You may fall into the same problem that many struggling homeowners did over the last few years when hiring a loan mod company. Loan audits are very time consuming. Audits need to be exact and precise, and direct counsel to which laws are effected by breaking down the loan origination, underwriting, appraisal, closing documents, disclosures, pooling and service agreements, escrow accounts, payment histories… and the list goes on and on, ad nauseum.
3. Beware of simple TILA/RESPA software audits. They can be easily manipulated and biased if data is not entered correctly. My partner Dave is a 15-year mortgage expert who can tear a loan apart backwards and forwards. He is emphatic that you need to find fraud and serious errors to build good pleadings, effective affirmative defenses, and viable counter-suits. Additionally, focus on securitization/ownership issues and fraudulent assignments. That’s the meaty stuff! A simple TILA/RESPA is only a small fraction of the audit process, as well, the full audit cannot be performed until after full discovery. Your attorney and auditor will work better with a collaborative approach to building your proper defense. In other words, there are far better ways to ensure better results in court. A nationally prominent examiner describes a basic TILA/RESPA audit as a “band-aid on an amputation.” Spending $300 – $499 on a TILA/RESPA audit (over the internet?) will only limit the strength of your case. Your investment may be a waste of money. When it comes to YOUR case, “why bring a knife to a gun fight?”
4. Hold your attorney accountable and responsible for the audit’s content. Great attorneys win more cases than bad attorneys. Your attorney should be the key to increasing the odds of your success. Otherwise, why are you paying them to take on a losing case that they knew you would never win?
5. And your biggest question? How much? A comprehensive audit will average around $1500 to $2500. Ouch! I humanely suggest that the audit process can evolve over a long period of time and best compliments and supplements your attorneys work as your case evolves. Discovery may take a year or longer (as it did in my personal foreclosure case.) If your case gets dismissed earlier than the discovery phase, then you would never have paid the entire cost anyways with a phased-in metered approach. Your attorney should always explain the process and expense to you. More and more attorneys are starting to create creative billing systems for homeowners in today’s market. They oftentimes will take foreclosure cases with small down payments and reasonable monthly fees. If you already have been forced to stop paying your mortgage, IT MIGHT BE CHEAPER TO LITIGATE ON A MONTHLY BASIS THAN TO PAY RENT, OR A MORTGAGE PAYMENT, ON THE SAME MONTHLY BASIS. Additionally, set a flat fee for scope of work to include all work through discovery obtainment and analysis. This “caps” your high end of your legal investment so that you are not taking some crazy ride in a taxi from hell. This also helps you budget your expenses. Drastic times demand creative solutions. Demand creative payment solutions from your attorney. If they won’t, someone else will. Their ranks are growing by the day to meet the demand.

In fairness to foreclosure defense attorneys, today’s litigation defense is not as cut and dry as any of us would like to see it. Yet, case law is being made almost daily. Judges and attorneys alike are starting to see that loans made in the last ten years are a lot different than in earlier banking history. Securitization, exotic loan products, insane underwriting practices, lack of regulatory oversight, criminality, and pure greed, creates a different slant to today’s legal issues.

This is why it is crucial to hire an attorney who has been specially-trained in foreclosure defense [Editor's Note: You can find such attorneys through our site, IamFacingForeclosure.com]. This special rare breed should be an expert in contract law, real estate law, finance law and securities law, due to the overwhelmingly complex nature of this decade’s loans. Now you know WHY, in 2009, MILLIONS of (non-attorney) consumers are in foreclosure today!

By 2010, get ready for 3 more years of the exploding “Option Arms!” As lending insiders have famously stated, “Option Arms” are like neutron bombs…. kills the people but leaves the buildings standing.” Thanks guys!! See y’all in court!

So in the final analysis, hire the right attorney first–deal with the audit later!

Relax and keep the faith! I know of four foreclosure dismissals this last few weeks. The odds are tipping in your favor!

Rob Harrington
co-founder
LoanChex, Inc.
(850) 259-6422

PS – I am NOT an attorney. No information that I share should be construed as legal advice. Always consult with a qualified foreclosure defense attorney regarding your foreclosure. (I am only a ticked-off, entrepreneurial homeowner who stands for property rights, free speech, due process, justice, and fairness in the USA.)

Homeowners facing foreclosure are often desperate for a way out, but the agencies that claim they can save your home may not be able to help. Foreclosure filings topped 2 million in the United States last year — a 65 percent increase over the previous year.Mave Elise Brown of Housing and Economic Rights Advocates in California said innocence and desperation on the part of the homeowner can make them prime targets of such scam

Foreclosure rescue scams come in creative packages — the most popular are mortgage negotiation and title transfer.

The ploy in mortgage negotiation goes something like this — for a fee, a company can save your home from foreclosure by negotiating with your loan servicer.

The homeowner puts out over several hundred or thousand dollars and never sees the scammer again, and still loses their house.

See the rest of the KCRA.com story

By Moe Bedard Founder of Loan Safe 

Our forum at www.LoanSafe.org has been offering free foreclosure help to homeowners for the past 6 months and has become the #1 most trusted website for struggling borrowers. Over 25 homeowners have saved their home by getting mortgage help using the tools on this website to negotiate a loan modification.

LoanSafe.org is endorsed by CBS2 News and KCAL 9 News of Southern California as a safe website for homeowners to obtain free foreclosure information. You can see Loan Safe on on CBS 2 News right here and also a recent feature article in the Press Enterprise Newspaper.

Many homeowners have been victimized by predatory lending and mortgage fraud and they do not even realize that until they come to our forum and tell their story. Our experts have been able to identify these abuses just by the borrowers telling their problems in this open forum and then directing them to the proper relief and tools to give them the mortgage help they need.

Please join our one of a kind homeowners forum where you can ask questions and get answers in this unique and interactive community that was created to assist people in an anonymous, yet open question format. Meet other homeowners that are going through the same thing and get the help you need from industry experts and foreclosure defense and mortgage law attorneys. 

Please click on the banner to enter the Loan Safe forum.

From Crain’s Detroit Business;

The state House on Tuesday passed a package of bills to offer new refinancing options to Michigan homeowners facing mortgage foreclosures.

Democrat-sponsored House Bills 5443-5447 establish programs to allow some homeowners who have adjustable-rate mortgages or who have missed mortgage payments to refinance and secure lower-interest, fixed-rate loans through the Michigan State Housing Development Authority, or MSHDA.

The legislation sets up two new refinance loan programs through MSHDA. One program would help homeowners who have an adjustable-rate mortgage that is increasing or projected to increase, while another program would assist homeowners who have missed mortgage payments and are at risk of losing their home.

The initiatives would be funded by the sale of bonds, and homeowners would be responsible for paying off the full value of their refinanced mortgage. The programs are designed to help low- and moderate-income borrowers who meet other eligibility criteria, such as having a good overall credit history.

The bills, many of which passed the House by large margins, now go to the Senate.

by Aaron Krowne and Moe Bedard

A story we broke this past Tuesday in regards to the Ohio Federal Court Deutsche Bank ruling has been getting a tremendous amount of attention, and probably rightfully so. It wasn’t long after we posted it here that dozens of bloggers and forums were circulating the news around cyberspace.

Calculated Risk’s Tanta did a total of three blog posts of follow-up (here is one, and another), largely intended to rebut our points, and Gretchen Morgenson did a great New York Times piece yesterday, bringing much more visibility to the issue. Even Nigel and the Haterz gave us credit where credit is due:

“It may be a Casey fantasy, but it is true in real life. I Am Facing Foreclosure broke a story that was respected enough and accurate enough to be stolen by the New York Times.”

Well, maybe not stolen… but apparently we were on the right track.

Tanta had numerous issues with our conclusions and apparently those of April Charney (who is actually an attorney on these sorts of cases, mind you). We wanted to reply to some of the those objections here. We don’t believe the issue is settled, and our lawyers aren’t budging.

But first, we want to establish that even Tanta seems to agree with us on one critical point: foreclosures are going to be more expensive for investors in mortgage-backed securities than they might have hoped. Perhaps much more expensive. While Deutsche Bank may have a chance to “get its ducks in a row” yet, since the foreclosures were not dismissed with prejudice, that ain’t exactly nothing.

Tanta might not see this as a big deal or game-changer, but we suspect investors will.

That point aside, there is something more profound going on here. Tanta’s core criticism (as we understand it) is that finding the assignments was simply a matter of due diligence that Deutsche Bank was attempting to shirk out of sloth. Not being legal gurus ourselves, we went back to April Charney for further comment and clarification. She had this to say:

“First of all, it is not a fair assumption that “nobody could find the original assignments.” The “original” assignments from the originating lender to the trust don’t exist to be found until after the foreclosure actions are filed and the loans are already supposedly in default. It would be very interesting to see where these nonperforming loans have been booked until now. This is an epidemic across the country.

As to the real ramification of the Ohio decision, aside from slowing the foreclosure trains, is that the fact that there were no “original” assignments rendering the sales of the mortgages to the trusts, in violation of the true sale obligations imposed by securities law. ”

That, again, does not seem like nothing to us.

April also passed us this link for a primer on the true sale issue. She further directed us to this article By Tim Reason (love the name) regarding true sale in securitizations, which is from 2003.

What we gleaned is that the “true sale” issue (specifically as it comes to securitization) has never been settled. One would think from the Reason article that securitizations would have fallen out of favor after the tech stock collapse, where they were used for various sorts of accounting legerdemain and producing synthetic AAA-ratings (including, famously, in the Enron case). Instead, the problems were swept under the rug and everyone got back on the merry-go-round a second time for the housing bubble. Reason’s article contains this ominous quote on that subject:

Kenneth Kettering, associate professor at New York Law School, argues that the securitization industry owes its very existence to the willingness of rating agencies to rate ABS securities based on “extravagantly hedged” true-sale opinions. “No competent lawyer ever gave a simple flat opinion that the asset transfers involved in a securitization transaction constitute a ‘true sale.’ Indeed, given the absence of controlling case law, a lawyer could not responsibly do so,” he wrote in a letter to Congress. “These all-but-liability-proof legal opinions underline the fact that the parties to a securitization transaction are knowingly assuming a serious legal risk.”

Somehow we suspect that nobody explained this state of affairs to your local pension fund, the Chinese, the Europeans, the Canadians, and other sundry parties exposed to questionable securitized MBS pools. But hey, what’s a few trillion between friends? (We’re all friends, right?)

So this time around, securitization was scaled-up to a greater extent than ever before, despite the fact that the fundamental issues of ownership were not settled. Echoing (and reinforcing) the pay-to-play ratings complex that emerged at the same time, the securitization complex chugged merrily along, while profits were high and defaults were low.

But now these fundamental issues are getting their day in court again, and if this Deutsche Bank ruling is indicative, it isn’t going well for the investor class. Will there be another muddle-through, like last time?

The conflagration seems unlikely to blow out quite so easily this time around. Previously, true sale challenges could be counted on to be rare and occur only in the occasional large-scale corporate bankruptcy—i.e., when a creditor or the bankrupt company itself wanted to “raid” the assets of a securitization to satisfy obligations. Now, the challenges are threatening to proliferate right along with the exploding number of foreclosure cases across the country.

We followed up with California mortgage attorney Nathan Fransen about this landmark case and its implications:

“California is a non-judicial foreclosure state. This means the banks do not file a complaint in court to foreclose on the property. They simply execute a Trustee Sale. This requires them to provide notices in strict accordance to the applicable laws. The sale is a private action that effectively terminates ownership rights by the borrower.

Typically the sale is followed up by an unlawful detainer proceeding to evict the former owners. The way in which the logic of this court could be used is by filing a complaint and Preliminary Injunction in a court in the county where the property is located. The injunction would stay any foreclosure proceedings by the trustee. A declaratory judgment could also be obtained that would declare the rights of the trustee invalid and thus prevent them from taking future actions against the homeowner.

There are other claims worth exploring that are derivatives of all this. For example, perhaps a claim for slander of title since the trustee did not have the rights to initiate the foreclosure process. Claims under California Business and Professions Code Section 17200 (UDAP statute) may also be available. The leverage that a consumer attorney could use from this type of an action may very well make the difference between a homeowner staying in their home, or packing their bags.”

So quoth the lawyers. Hence we take it that, far from a trivial matter of paperwork, Boyko’s decision is serious business – a tangible ray of hope for distressed homeowners, and a huge headache for securitized mortgage investors (we’re not even sure it’d be proper to use the term “holders” or “owners” anymore).

(Update, Nov 16: And now, apparently, the decision has been reinforced again, with another ruling.).