First and foremost, working with your HOA protects your investment. After all, in some cases you’re just one HOA vote away from a hellish nightmare. And HOAs can foreclose on community properties.

At their best, HOAs are annoying student council adults telling you to trim your shrubs and move your trashcans. But at their worst, they are glorified debt collectors with the power to upend lives and expel people from a neighborhood.

— John Oliver, Last Week Tonight

The proliferation of HOAs has been called the most significant privatization of local government responsibilities in recent times.

Here’s Last Week Tonight‘s take on HOAs:

Mortgage forbearance

Under CARES, a borrower may request mortgage forbearance for up to 180 days. Lenders shall extend this period an additional 180 days at the request of the borrower. During the forbearance period, no fees, penalties, or interest beyond the amounts scheduled shall accrue to borrowers.

Lenders, servicers step up

In addition, the Federal Housing Administration put an immediate 60-day moratorium on foreclosures and evictions for single-family homeowners unable to pay their FHA-backed mortgages. Fannie Mae and Freddie Mac will also establish a forbearance program allowing borrowers to skip their mortgage payments for up to 12 months.

The government is essentially offering a year-long payment holiday so those who lose their jobs from COVID-19 can stay in their homes without worrying about mortgage payments or foreclosure.

Jaret Seiberg,
Cowen Washington Research Group

Servicers have lobbied for government assistance (i.e., access to liquidity) to fund forbearance programs. The CARES Act has provided that liquidity, as well as a pleasant surprise tax break for the 1 percent. Of course.

State actions

On March 30, 2020, Virginia governor Ralph Northam signed a “stay-at-home” executive order limiting residents from venturing outside their homes with the exceptions to get food and supplies, receive medical care, go to work, or to get fresh air or exercise. This is essentially a moratorium on foreclosure auctions. The executive order runs through June 10.

On March 18, 2020, the Maryland Court of Appeals entered an administrative order immediately halting both residential foreclosures and pending scheduled evictions. Additionally, new residential foreclosures and foreclosures of right to redeem after tax sales “shall be stayed upon filing.” On April 3, 2020, Maryland Governor Larry Hogan issued an emergency order prohibiting for 90 days (a) lenders from initiating foreclosures and (b) building owners from evicting commercial and industrial tenants.

On March 18, 2020, the District of Columbia stayed all evictions of tenants and foreclosed homeowners until May 15, 2020. By court order, D.C. also continued all hearings on small claims, debt collection, mortgage foreclosure, and housing court matters. On March 29, 2020, D.C. was approved for a major disaster declaration, which will open up more funding for emergency services for those affected by coronavirus.

If you can’t pay your mortgage due to coronavirus

Contact your lender immediately if you won’t be able to make your April mortgage payment. Find out what kind of relief they are offering under CARES, and whether there are any more advantageous internal programs available to you. Neither the coronavirus pandemic nor the moratorium relieve you of your duty to stay on top of your finances. Be proactive and chart a path forward.

1. Reinstatement. Mortgage reinstatement is your first and best option when facing foreclosure. When you reinstate your mortgage, you pay a lump sum to catch up your missed mortgage payments, late fees and charges.
2. Payoff. Payoff is similar to reinstatement, except instead of catching up on missed payments, you pay off the entire balance of the mortgage.
3. Modification. If reinstatement or payoff are not options for you, modification may be a good option. But it takes time, and modifications are frequently denied. Modification will stop a foreclosure fast only if you are well along in the process.
4. Refinance. If you are able to refinance your mortgage, you may be able to wrap missed payments into the new loan and even obtain a lower monthly payment.
5. Postponement. If you are very close to obtaining the funds necessary to reinstate your mortgage (and you can prove it to your lender via documentation), then you may be able to convince them to postpone the auction.
6. Injunction. In cases where your mortgage lender has committed serious errors in foreclosing on your home, you can sue the company and request an emergency injunction to stop the auction. These cases are extremely rare.
7. Bankruptcy. Chapter 13 bankruptcy stops foreclosure immediately and gives you the breathing room you need to reassess your options. Filing bankruptcy allows you to consider modification, reinstatement, and refinancing, as well as repayment over an extended period.

Call us to stop a foreclosure sale

We are thoroughly familiar with all of the options available to homeowners facing foreclosure. We can help you think through solutions and work out a plan suitable to your situation. Call Lee Legal at (202) 448-5136.

Foreclosure defense lawyer in Washington DC

In Washington DC, once you receive notice of the complaint for judicial foreclosure, the clock starts ticking. You have options, but many of them are available to you only if you act quickly. As soon as you receive notice that you are being sued for judicial foreclosure, contact a foreclosure defense attorney immediately. Missed deadlines can be fatal to your case.

Your options include mediation, modification, refinance, sale, surrender, and Chapter 13 bankruptcy. Not all of these options are always available, but usually a homeowner has choices. We will help you assess your situation to determine the best course of action for you.

Foreclosure defense lawyer in Virginia

Foreclosure in Virginia can happen very quickly. While foreclosure in DC is judicial (and thus the lender must first sue you), foreclosure in Virginia is nonjudicial. That means that your mortgage company can simply file a notice of default then schedule a foreclosure auction. In Virginia, the only sure-fire way to stop a scheduled foreclosure auction is by filing a Chapter 13 bankruptcy. Foreclosure defense lawyers and bankruptcy lawyers are basically synonymous in Virginia.

Chapter 13 bankruptcy stops foreclosure and allows you to propose a repayment plan. If confirmed by the court, your mortgage company must accept your modified payment schedule. Some homeowners are able to exit bankruptcy just a few months after they file because mortgage companies frequently offer modifications once a Chapter 13 repayment plan is confirmed.

Foreclosure defense lawyer in Maryland

Maryland foreclosure is very similar to Virginia because Maryland is also a nonjudicial foreclosure jurisdiction. Maryland foreclosures take slightly longer than Virginia foreclosures, but still happen much more quickly than foreclosures in Washington DC.

You have loss mitigation options if you default on your mortgage in Maryland, but those options narrow over time. Mortgage lenders in Maryland have no legal obligation to modify your mortgage, but if you attempt modification early, your chances are greatly improved. Maryland foreclosures can take as few as 60 days. When time is tight and an auction has been scheduled, you must stop the foreclosure by filing a Chapter 13 bankruptcy.

Call us now to talk to a foreclosure defense lawyer

Lee Legal has been representing homeowners facing foreclosure since 2004. We offer free consultations and will assess all of your options. Call us today if you need a foreclosure defense attorney.

You will know if a potential employer is interested in your credit because they must obtain written authorization from you prior to running your credit report. But your credit history is likely not make-or-break when it comes to the hiring decision.

Get your story straight

Run your own credit report before you submit an application with a company. If an employer offers you a job interview and you haven’t yet run your credit, do it. You can obtain your free credit report once a year from each of the three major credit reporting agencies. Review your report carefully. If there are other negative items besides the foreclosure, try to clean them up. Be sure to dispute any erroneous items.

A foreclosure will remain your credit report for seven years. A foreclosure is a public record, so before it expires, the foreclosure cannot be removed from your report. But it can be explained.

Understand the job requirements

A foreclosure on your credit report will affect your application process more if you are seeking a job in the finance, accounting, or banking industries. Likewise, if you are interviewing for a job that requires handling cash, a foreclosure on your credit may hold you back. In addition, positions that require budgeting skills (including executive roles) often require adequate credit as a prerequisite for the job.

Read the interviewer

Try to read the interviewer. If your credit report is never mentioned, then don’t bring it up yourself. But interviewers can be shrewd. References to your credit may be oblique. If you sense that your credit is an issue during the interview, then consider broaching the topic yourself. Your previous foreclosure may be an issue that the interviewer wants you to address without having to prompt you. And you don’t want to appear to be hiding anything about your past.

Be prepared to explain the circumstances surrounding the foreclosure. But do not try to shift blame. Calmly acknowledge the foreclosure, explain what happened, then move on to what you learned during the process. Discuss any opportunities that materialized because of the foreclosure, or how your financial situation may actually have improved post-foreclosure.

If you are never questioned about your credit (or specifically about the foreclosure) then there may be no reason to bring it up. If your credit is the weak point in your application, then try to pull focus back to your qualifications for the job.

Don’t let a foreclosure on your credit report derail your interview

Your interview will go great. Don’t let a foreclosure on your credit report hold you back from getting the job. Be yourself. You’ll be a terrific addition to the team.

If you have an amazing credit score, you shouldn’t count on its giving you an edge in the interview process. But if you have poor credit, prospective employers will be interested in why. And they’ll be interested in what you’re doing to improve it.

Employers and lenders view credit reports differently. Lenders want to see sterling credit, but employers want to know the story behind your credit. Most importantly, employers want to know that credit issues won’t hinder your job performance. Do what you can to reassure them that you’ve moved on with your life since the foreclosure.

When you must file quickly

You must file your bankruptcy prior to a foreclosure auction or you will not be able to save the property. Filing bankruptcy after a foreclosure auction has already been held will not save your home. If you file a Chapter 13 prior to the auction, then the automatic stay takes effect. That stops the auction. Then can make up missed mortgage payments over an extended period of time. But filing bankruptcy after a foreclosure auction is too late.

Likewise, if you file Chapter 13 after your landlord has obtained an eviction judgment, then the bankruptcy will not prevent eviction. You must file the bankruptcy prior to your landlord’s obtaining an eviction judgment.

Filing bankruptcy after a repossession, in some cases, will allow you to get your vehicle back. But the creditor will charge you handsomely for the repo costs and fees. It is usually preferable to file Chapter 13 prior to repossession.

When waiting to file makes more sense

Filing a Chapter 13 bankruptcy during a civil litigation case will not result in the case’s being dismissed. Instead, the case will only be “stayed” temporarily. Usually, bankruptcy courts will allow the plaintiff relief from the automatic stay to allow the litigation to go forward. This allows the claim to be litigated — and liquidated — in the proper venue. Often it makes sense to allow the litigation to run its course prior to filing a Chapter 13 bankruptcy.

Waiting to file until the first of the month might make sense, too. Filing a Chapter 13 bankruptcy after your latest mortgage payment comes due allows you to include that payment in your Chapter 13 plan. On the other hand, if you file near the end of the month, then your first mortgage payment will come due within a few days after your filing. Sometimes this can strain your budget and even cause missed payments.

Especially at the beginning of a Chapter 13 case, you don’t want timing issues to trip you up. The Chapter 13 trustee will scrutinize your case for feasibility to determine whether you have the ability to repay. If you miss mortgage or vehicle payments or fail to make your Chapter 13 Plan payment, your case may be in peril.

Don’t let timing throw you off

Call Lee Legal to schedule a free, comprehensive financial analysis. When to file a case is often just as important as whether to file at all. We will help you identify the issues and develop a plan to allow you to move on with your life.

How do short sales work?

Short sales start the same way as any other home sale: hire an agent, list the home, and find a buyer. Unlike typical property sales, however, you must also complete an application (including a hardship letter and BPO) for the short sale with your lender. Then you must negotiate with your lender and any junior lienholders to obtain an approval letter. Finally, you must vacate the property and close the deal.

Why would your lender agree to accept less than you owe on your mortgage? In short, foreclosure is expensive and unpredictable. Foreclosure costs mortgage lenders both time and money. So mortgage lenders agree to accept less than you owe to quickly dispose of the property and move it off their books.

How long does a short sale take?

Short sales are more complicated than the typical real estate transaction. The average short sale takes between four and six months. Some short sales are approved quickly — within two weeks. Most short sales take much longer, however, and can take up to two years from listing to closing.

Often the fight comes down to differences between the BPO submitted by the homeowner and the BPO generated by the bank. “BPO” stands for “broker price opinion.” It is a broker’s written opinion of the property’s market value based on a minimum of three recent similar property sales adjusted to specifics for your property. When initiating the short sale process, try to find a real estate agent who has experience with short sales.

The advantages of short sales

There are some advantages to a short sale. First and foremost, you will not have to worry about your mortgage anymore.

You will have avoided foreclosure. Either a foreclosure or a short sale will damage your credit, but as time passes, short sales are viewed more favorably by mortgage lenders. Both foreclosure and short sale will remain on your credit report for seven years. But a short sale also allows you to avoid the so-called stigma and embarrassment of foreclosure.

Second mortgages (and other junior lienholders) frequently agree to settle their liens for dramatically reduced amounts. Junior lienholder settlement payoffs are usually paid from the first mortgage short sale proceeds.

You may also qualify for funds to vacate. “Relocation incentives” encourage homeowners to be proactive in preparing the property for sale and vacating the property. Relocation incentives (sometimes called “moving money”) get paid at the closing of a short sale, not beforehand.

The downsides of short sales

Short sales typically take a long time and require patience. And mortgage lenders do not approve every short sale application. In addition, you will not receive any proceeds from the sale. And if your buyer backs out, you will have to restart the entire short sale application process.

While second mortgages can be extinguished in a short sale, these liens require an entirely different negotiation process. You must address all liens against the property prior to closing or the short sale will not close. This is a time-consuming and often frustrating process.

Importantly, applying for a short sale will not stop the foreclosure process.

And finally, short sales require doing a lot of work for the bank. You will not receive any proceeds from the sale. And all of your hard work may be for nothing if your lender declines to approve your application.

Should I short sale my property?

If your mortgage company schedules a foreclosure auction, it is too late to attempt a short sale. The short sale process takes time and should be considered early in the process post-default.

At the same time, if you intend to delever your property but intend to purchase real property in the near future, then short sale is preferable to foreclosure.

Discuss your options with an experienced foreclosure defense attorney. You have other options, too. But exploring your options sooner will increase the likelihood of an favorable outcome.

Do it, don’t just say it

Your mortgage company will accelerate efforts to complete the foreclosure if they feel you may file bankruptcy. In some limited cases, you may be able to convince your mortgage company to voluntarily cancel an auction. But those cases are not common. The only legal way to assure that the foreclosure will not take place is to file bankruptcy.

Don’t tell your mortgage company you’re filing bankruptcy. Do it.

Completing a bankruptcy filing takes time. And you probably want to fix the underlying problem with the mortgage, not just cancel the sale. Chapter 13 bankruptcy allows you to repay your mortgage delinquency over as much as five years. Use bankruptcy not just to stop the sale but to get your mortgage (and other debts) back on track.

The bankruptcy threat

Just like in debt settlement negotiations, your attorney may use the threat of bankruptcy to negotiate with your mortgage company. The bankruptcy threat may induce your mortgagor to consider alternatives to foreclosure. But the threat is only credible when it comes from your bankruptcy attorney. And if you’re planning on filing bankruptcy anyway, there’s usually no reason to tell the mortgage company beforehand.

Keep your mortgage company happy

Mortgage companies want one of two things from their customers: either pay the mortgage or give up the house. At the same time, the foreclosure process is expensive, so that’s really their last resort. Mortgage companies step up efforts to complete a sale if they feel the homeowner may be taking steps to cancel an auction. If you receive notice of foreclosure, you should discuss your options with experienced bankruptcy counsel. But don’t tip your hand to your mortgage company before you have a clear plan.

You are being sued

If a debt collector fails to reach you or receive payment, they then may file a lawsuit. If that lawsuit is successful, the debt will increase with the addition of court costs and attorney fees. A bankruptcy court issues an automatic stay against creditors, which immediately stops all lawsuits. Until your bankruptcy case is discharged or dismissed, creditors cannot take any additional collection actions against you, including lawsuits.

Your wages are being garnished

After a debt collector wins a lawsuit, they can attempt to collect what is owed. The laws according to your residential jurisdiction govern whether they will be able to freeze your bank account or garnish your wages. A court order for wage garnishment requires employers to withhold a certain amount of money from each paycheck until the debt is paid in full. If you file bankruptcy, the automatic stay would halt the garnishment. The automatic stay, however, will not stop domestic support obligations like child support or alimony.

You can’t pay your bills

Losing your job or sudden medical bills are examples of unexpected occurrences that have the potential to leave one in serious financial distress. Circumstances like these can lead to using credit cards to pay for routine living expenses and monthly bills, which can snowball very quickly. If your debt is increasing each month, or you just can’t make a dent in the debt, then it may be time to file for bankruptcy.

You risk losing your home to foreclosure

If foreclosure is a possibility, filing bankruptcy can allow you to get caught up or your mortgage and keep your home. Reinstatement, modification, short-sale, and deed-in-lieu of foreclosure, and open market sale are other options available to you. Often, however, filing for bankruptcy protection is the only legal means by which to stop a foreclosure auction.

When it’s time to file for bankruptcy

In some cases, it is possible to make your way out of debt with revised budgeting, hard work, sacrifice, and patience. Weigh the pros and cons and seek legal assistance.

If you are unsure, take the time to assess your situation. Do this by taking inventory of all your assets, including retirement funds, stocks, bonds, real estate, vehicles, savings, and any other non-bank account funds. Then total your bills and credit cards statements. You can then proceed accordingly knowing how much you truly owe and how much you can realistically pay. The following questions can help you assess if you need to act now:

• Are bill collectors constantly calling you?
• Do you make minimum credit card payments only?
• Are you considering debt consolidation?
• Is fear preventing you from sorting out your finances?
• Are you unsure of how much you actually owe?

Don’t be one of the many that wish they had filed bankruptcy sooner. A bankruptcy attorney can inform you of your options and assist you in obtaining a new financial start.

Zillow found that American homeowners spend nearly $9,400 in hidden costs to own and care for a median-priced home. Let’s first differentiate hidden costs from not-so-hidden costs.

Not-so-hidden costs: Mortgage, taxes, and insurance

Your mortgage payment is not a hidden cost. If you take out a loan to buy real property, then you will have a monthly mortgage payment.

Likewise, taxes and insurance are not hidden costs and are often (but not always) covered in your mortgage payment. An understanding of how much taxes and insurance will cost is an important part of the decision to buy a property.

Hidden cost: HOA fees

HOA fees. When you buy real property governed by a homeowners association, then you will have to pay a monthly or quarterly fee (or “assessment”). You agree to be bound by the HOA at closing on the property, so HOA fees are not hidden. But less obvious is how often and by what percentage the fees are increased. Only by reviewing the association’s documents will you be able to determine how often the HOA raises its rates (and by how much). Also look into the association’s history of “special assessments,” which is an amount additional to regular fees, charged
to make up for budget shortfalls for big-ticket items like roofs or boilers. Special assessments can be very costly.

Hidden cost: Maintenance

Fixtures and appliances periodically break down and need to be replaced. Know the age and replacement value of appliances and fixtures before you purchase the property. Upkeep and repairs can run thousands of dollars per year, depending on the property. Plan on spending between 1 percent and 3 percent of the total purchase price every year on home upkeep and maintenance. Roofs last about 20 years, refrigerators about 13 years. Eventually everything will need replacement.

Hidden cost: Closing costs

These costs include application and appraisal fees, attorney and/or title fees, courier, credit report, home inspection, etc. Estimate approximately 2 percent to 5 percent of the purchase price for closing fees. Zillow says that on average buyers pay about $3,700 in closing fees.

Hidden cost: Utilities

Water, garbage, cable and internet, electricity, gas. No one considers these costs “hidden.” But know before you buy what the average utility bills run for the property. Some HOAs include some of these costs in their fees. But other properties require enormous expenditures on utilities, especially for heat and electrical. Find out beforehand how much you will need to budget for ongoing utility bills, and where you may be able to trim.

Lee Legal serves clients in the Washington, D.C. metropolitan region

If you live in the (202) area code and are interested in hiring a bankruptcy, debt defense, or foreclosure defense attorney, leave us an inquiry here or call us at (202) 448-5136. We also serve clients in (703) and (571) in Virginia and (301) and (240) in Maryland. Lee Legal provides excellent, affordable counsel to clients from the entire D.C. area, and every client gets a free consultation.

If you live in Richmond or Baltimore, then you are a bit outside of our area. If you live in a different state altogether, then you should try to find a lawyer closer to you. We can only assist clients in the D.C., Maryland, and Virginia.

Lots of folks in D.C. have cell phones from other areas. If you live in or near D.C. but have a different area code, obviously we’d love to hear from you, too.

Find an attorney near you to discuss your legal issues

We are, in fact, ethically prohibited from providing legal advice to clients outside our licensed jurisdictions of Virginia, Maryland, or Washington, D.C. Even general questions that you may have should be directed to a lawyer who practices in your jurisdiction.

If you are looking for a bankruptcy attorney near you, you can find one using the NACBA attorney locator. If you seek a foreclosure defense attorney, go to Google and search for:

[your town] foreclosure defense lawyer

Find a lawyer who you’re comfortable working with. You don’t have to retain the first lawyer you meet. Seek out a reputable, well-recommended attorney with a proven track record.

We’re glad to help you, if we can

Thank you for all of the positive feedback on our articles. I’m glad we’re helping people. That’s why I became a lawyer, and it’s the driving principle behind Lee Legal.

We’ll continue to provide fresh, relevant legal information of interest to potential clients. But if you have a legal issue, consult a lawyer close to you. Do not mistake what you read on any website for informed legal advice from a lawyer.

Credit bureau reporting

Mortgage companies report religiously to the credit bureaus. Strings of months with late or missed mortgage payments will badly damage your credit. If your credit score is important to you, prioritize your mortgage over any other bills. A day late and a dollar short just doesn’t work with either your mortgage company or the credit bureaus.

Loan reinstatement

Loan reinstatement means catching up on missed mortgage payments, along with all associated late fees and charges, with a single lump-sum payment. To reinstate, request from your lender a formal, written reinstatement quote with a “good through” date (or deadline). If you pay late or underpay, your loan will not be fully reinstated and your lender may reject your payment and commence foreclosure proceedings.

Mortgage modification

If your lender offers you a mortgage modification, usually there will be a trial period of three to twelve months. Once you have made all of the trial payments, then your lender will permanently modify your mortgage. There are lots of reasons why lenders deny modifications, but the most common reason is that the borrower is a day late and a dollar short. If you underpay the trial payment, your lender will void the trial modification. Worse, if you miss a trial payment or make the trial payment late, your lender will simply deny the modification and restart the foreclosure process.

Don’t be a day late and a dollar short

Actually, don’t be a day late OR a dollar short. Either is sufficient to derail your mortgage status and put you at risk of foreclosure. If you run into mortgage trouble, contact a foreclosure defense attorney early in the process to determine your options.

Loan modification can hurt your credit score

The biggest negative effect to your credit from a modification depends upon whether your lender originates a new loan. If your loan modification results in a new loan and part of the original loan principal was forgiven, your mortgage lender may report the old loan as charged off. This can have a very negative effect on your credit score.

Most loans, however, do not result in a new loan and simply modify the terms of the original loan. For those loans, only the missed mortgage payments prior to modification will negatively affect your credit. Be sure to ask your lender prior to accepting a modification exactly how the modification will be reported to the credit bureaus.

Modification hurts your credit much less than missed payments

Month after month of missed mortgage payments will badly damage your credit. The negative credit impact of a mortgage modification pales in comparison to the impact of missed monthly payments reported by your lender. Missed payments not only indicate that the borrower may no longer be able to afford the property. Missed payments are also accumulative, meaning the past due balance grows monthly, not to mention fees and interest. Missed mortgage payments will damage your credit much more than loan modification.

Modification is almost always preferable to foreclosure

Foreclosure will very negatively impact your credit score. Foreclosure also stays on your credit report for seven years. Over time, the effects of a foreclosure will fade, but the foreclosure itself is considered a very negative credit event. Only under specific circumstances should you simply allow a property to go to foreclosure auction. Instead, contact an experienced foreclosure defense attorney to discuss your options.

Believing that once the foreclosure process starts, you will lose the property.

Not so fast. Your lender must comply with state foreclosure procedures to complete the foreclosure. You may have affirmative defenses. Or you may have other options to fight the foreclosure. Sometimes, selling or surrendering the property is the best option for you. But you must take an active role in the foreclosure process if you want to achieve an optimal outcome. Your lender is concerned with its investment, not yours.

Not exploring selling the property.

If you have equity in the property, then you also have the option of selling the property. But if you wait too long, you will not have time to exercise this option. You must sell the property before a foreclosure auction is held. Selling real property takes time. You must hire a realtor and market the property. You must go to closing and find a new place to live. This process takes time. If you run out of time and still want to sell the property, consider bankruptcy to delay the foreclosure and gain some time to sell.

Not attempting loan modification.

Usually, the best way to avoid foreclosure and retain the property is to obtain a mortgage modification. You will need to submit to your lender a loss mitigation package. Sometimes attempting loan modification can seem futile, especially if you have been denied modification in the past. But once foreclosure proceedings are initiated, the lender’s modification calculations change. Foreclosure is expensive to lenders. If your circumstances have changed and you can afford your mortgage going forward, your mortgage company may now be more willing to extend favorable modification terms. It may seem counterintuitive, but filing for Chapter 13 bankruptcy could also help you obtain a mortgage modification.

Thinking you can get the property back after the auction.

In some states, there is a time period after a foreclosure takes place during which you can pay the full price of the auction bid plus costs. This is called the right of redemption. Unfortunately, there is no right of redemption in Virginia, Maryland, or the District of Columbia. You cannot get your home back after foreclosure in the D.C. area. Once the property sells at foreclosure auction, you no longer own the property and many of your rights are extinguished.

Dealing with the lender instead of their attorneys.

Once your lender has hired counsel, you must deal with the attorneys, not the lender. Certain processes must still go through the lender or their underwriters. But for the most part, you must attempt to negotiate any workout through the lawyers.

Avoiding bankruptcy at all costs.

A Chapter 7 bankruptcy may only temporarily stop a foreclosure. But a Chapter 7 will allow you to orderly vacate the property and to discharge the mortgage debt. In most cases, Chapter 7 is a temporary solution to foreclosure. On the other hand, a Chapter 13 bankruptcy will give you up to five years (60 months) to repay your mortgage arrearage. Chapter 13 reorganization allows you to resume payments and get your mortgage back on track.

Talk to a foreclosure defense lawyer to avoid common foreclosure mistakes.

In most cases, the foreclosure process is fairly straightforward. But your response to foreclosure is critical to achieving your goals toward the property. To avoid the most common foreclosure mistakes, talk to a foreclosure defense attorney once you receive a notice of foreclosure.

Stop the foreclosure process

In some cases, it makes sense to allow a foreclosure auction to take place. If you no longer want to keep the property and intend to file bankruptcy to discharge the mortgage, then allowing the property to go to foreclosure auction can make sense.

In most cases, however, you will want to stop the foreclosure process. We strongly recommended that you seek foreclosure assistance once your mortgage company informs you of their intent to accelerate your loan.

Your options to stop foreclosure

The earlier you act, the more options you have. In most cases, homeowners have four basic options: reinstatement, workout, modification, and bankruptcy.

Reinstatement involves getting current on your mortgage, or paying the entire past-due amount plus costs and fees. Workout broadly refers to the process of obtaining a short-term arrearage repayment agreement with your lender. Modification can take up to a year to complete and therefore requires early and aggressive attempts to modify post-default.

Once a foreclosure auction has been scheduled, generally speaking your only option to stop the process is to file bankruptcy. If you intend to surrender the property, Chapter 7 bankruptcy will stop the foreclosure. Chapter 7 also buys you some “breathing room” to find another place to live. And Chapter 7 allows you to completely eliminate your liability on the mortgage debt.

Chapter 13 bankruptcy, on the other hand, allows you to repay your missed mortgage payments over an extended period. If you want to keep your home but can’t afford to reinstate your loan, Chapter 13 is usually the way to go. Filing bankruptcy immediately stops a scheduled foreclosure auction. We will then propose a Chapter 13 Plan that addresses all of your debts, not just your mortgage.

Lee Legal provides foreclosure assistance

If you are facing foreclosure in Washington DC, Maryland or Virginia, call Lee Legal at (202) 448-5136 to discuss your options. Providing foreclosure assistance to the DC area since 2008, Lee Legal offers top-notch legal services at very reasonable rates.

Calculation errors

If your lender fails to credit payments that you have made then perhaps you should not be in foreclosure at all. A lender’s miscalculation of amounts owed can give rise to a foreclosure defense. This applies to both principal balance, escrow balance, payoff and reinstatement figures. Unfortunately, this happens more often than one would expect, and this is the most common foreclosure defense.

Notice requirements

Maryland, Virginia, and Washington, DC have different requirements for notice to borrowers prior to foreclosure. If your lender attempts to foreclose against your primary residence and you do not receive notice, that can give rise to a foreclosure defense. Lenders per jurisdiction must provide differing degrees of notice of foreclosure, but all must provide a notice of intent to accelerate. After all, it should not come as a surprise to you that your home has been scheduled for a foreclosure auction.

Truth in Lending violations

TILA, or the Truth in Lending Act, requires accurate and fair loan origination and billing practices. Today, all large institutional lenders comply with TILA. Local mortgage lenders, however, may fail to meet TILA standards for loan origination disclosures. In those cases, the homeowner may be able to rescind the loan.

Show the note

This defense challenges the lender’s ownership of the mortgage loan. Lenders often transfer (or “assign”) loans to different lenders. While common during the 2008 mortgage meltdown, the so-called “show the note” defense carries less weight these days. That’s because lenders have cleaned up their documentation, which had gotten sloppy during the days leading up to the financial crisis. In most cases, lenders today can prove ownership.

Predatory lending

Like the “show the note” defense, predatory lending is less common lately. Most of the predatory loans that originated during the mortgage bubble have either already foreclosed or are too old to be considered predatory at this point. Still, in some cases, a defense of predatory lending can be raised. This is especially true in cases where the borrower belongs to a protected class.

Sort through your foreclosure defenses

If you are facing foreclosure, the experienced foreclosure defense team at Lee Legal can help you determine your best options. Call us to schedule a free consultation.

Cold weather evictions in Washington, DC

In the District of Columbia, the U.S. Marshals Service executes writs of restitution issued by DC Superior Court judges. D.C. Code § 42–3505.01 prohibits the Marshals from eviction when the temperature falls below freezing:

 . . . No housing provider shall evict a tenant on any day when the National Weather Service predicts at 8:00 a.m. that the temperature at the National Airport weather station will fall below 32 degrees Fahrenheit or 0 degrees centigrade within the next 24 hours.

The Marshals will also not complete evictions if it’s raining or snowing. In those situations, the Marshals will attempt to contact both tenant and landlord to discuss the anticipated delay for the eviction. In most cases, the Marshals will complete the eviction on the next available day that temperature and precipitation permit.

Cold weather evictions in Maryland

In Maryland, landlords must first obtain an eviction order and then a warrant of restitution before evicting a tenant. Only law enforcement officers — and not landlords — may remove a person from the premises. Baltimore City has slightly different rules for evictions.

As in the District, Maryland evictions may be postponed due to cold weather or precipitation. But the tenant must actively assert an inclement weather defense to the deputy sheriff conducting the eviction. A court hearing may be scheduled the same afternoon as the eviction, in which case the judge will likely grant postponement of the eviction if the weather is below 32 degrees or if it is raining or snowing. The eviction will be rescheduled for the next available day that temperature and precipitation permit. Practically speaking, however, rescheduling an eviction in Maryland takes as many as 30 days.

Cold weather evictions in Virginia

Virginia is less lenient than D.C. and Maryland. Virginia law does not specifically prohibit inclement weather evictions. In Virginia, a landlord commences eviction with a Summons for Unlawful Detainer, then obtains a Writ of Possession. In Virginia, these timelines are very short, typically three months from default to eviction.

County sheriff’s offices oversee all evictions in Virginia. If your landlord attempts lock-out or eviction without the supervision of the sheriff’s office, call the police.

Both the Arlington Sheriff’s Office and the Fairfax County Sheriff’s Office “reserve the right” to postpone an eviction to the next available date in cases of inclement weather. But the sheriffs are not required to do so. The sheriff’s offices for Loudoun County, Prince William County, and Alexandria offer no guidance on cold weather policies for evictions.

Can eviction happen in cold weather?

Yes, in Virginia. Your landlord can legally evict you during a blizzard. Sorry.

Landlords in Maryland and the District of Columbia can also evict in cold weather, but it depends on how cold and where you live. If it’s raining or snowing, or if the temperature is below freezing, take steps to postpone the eviction while you explore alternative housing options.

What is a Notice of Intent to Accelerate?

Sometimes called a Default Letter, the Notice of Intent to Accelerate usually states that a mortgage loan is in default. The letter will also state how much time you have to cure the default. For most mortgages, this time period is 30 days. In addition, the notice may tell you the exact amount needed to reinstate the loan. Many mortgages, however, require the borrower to request a reinstatement figure.

What does the Notice of Intent to Accelerate mean?

In short, the Notice means you are running out of time before your mortgage lender forecloses. Most mortgages contain acceleration clauses. “Acceleration” means that your mortgage company can demand the entire balance of the mortgage, not just the amount past due.

In Virginia and in Maryland, mortgage companies can immediately commence foreclosure proceedings and set an auction date if you do not cure the arrearage. In Washington DC, the mortgage company must file a lawsuit to obtain judicial approval to foreclose.

What to do if you receive a Notice of Intent to Accelerate

If you believe the notice was sent to you in error, contact your mortgage lender or servicer immediately. Request a full accounting and verify that your payments have been correctly applied.

If you are in default but have the means by which to reinstate the loan, do so quickly. Request a formal reinstatement figure in writing from your mortgage company so you have documentation. Pay by check so you can document the payment.

Your lender may have other options available to you, depending on your mortgage type, loan history, and overall credit profile. Call your mortgage servicer and see if you have options other than reinstatement, such as modification or forbearance.

Bankruptcy stops foreclosure

If none of these options are available to you, then foreclosure is imminent. Once you receive a Notice of Intent to Accelerate, act quickly. Whether your goal is to keep the property or simply to delay foreclosure in order to effectuate the orderly transfer of the property, consider filing a Chapter 13 bankruptcy before your lender commences formal foreclosure proceedings.

Assess your foreclosure defense options

Homeowners in the Washington, D.C. area who are facing foreclosure should very carefully examine all of their options. Your personal financial and investment goals will determine your foreclosure defense options.

If you cannot afford your mortgage payment then your options are more limited. Having a steady income, however, opens up more foreclosure defense options to you. If you have disposable income sufficient to sustain a monthly mortgage, then you have even more defenses available to you. Likewise, if your home has equity, your options expand even further.

Set your foreclosure defense strategy early on

Your foreclosure defense strategy depends upon whether you want to retain your property, surrender the property, or simply delay the foreclosure.

Retain the property. If you want to keep the property, you should consider mortgage modification first. If you have not yet defaulted, you may also want to consider refinancing or renting rooms to supplement your income. But f you have equity, then first and foremost you should consider selling the property prior to foreclosure. Pulling equity out of the property before your mortgage company can charge you for the costs of foreclosure often makes more sense than simply waiting. If you are 62 or older, you may qualify for a reverse mortgage.

File bankruptcy. If you want to keep your property but your mortgage company isn’t cooperating, consider filing Chapter 13 bankruptcy to force your mortgage company to accept repayment terms. Chapter 13 not only immediately stops foreclosure. Many mortgage companies also approve homeowners for modification after a successfully confirmed Chapter 13 Plan.

Surrender the property. If you want to surrender the property, then explore your options for short sale or deed-in-lieu of foreclosure. In some cases, consenting to foreclosure can save you money. Be sure to consult with an attorney to negotiate an antideficiency agreement with your lender prior to consenting to foreclosure.

Delay foreclosure. We rarely advise clients simply to allow a property to go to foreclosure auction. Try to keep all options open until you decide on the best option for your situation. When based on a good faith foreclosure defense, delaying the foreclosure provides you the time you need to figure out what to do. Failure to provide proper notice, reinstatement figures, or improper advertisement can all give rise to bona fide foreclosure defenses. Bankruptcy, too, can delay foreclosure while you attempt a workout with your lender.

You may have multiple foreclosure defense objectives

In many cases, starting with one strategy doesn’t mean that’s where you will end up. Sometimes, for instance, strategically surrendering the property may be your ultimate goal. Yet signaling surrender to your lender early in the process may be a big mistake. The further along that you get into foreclosure, the harder it will be to control the process. If you are facing foreclosure, retain a lawyer at the beginning of the process, not at the end.

If you are facing foreclosure in Virginia, Maryland, or the District of Columbia, Lee Legal will vigorously defend your rights during the mortgage foreclosure process. Setting realistic foreclosure defense objectives doesn’t mean exploring creative solutions. We will remain flexible in dealing with your mortgage company or servicer.

States must individually legislate changes to foreclosure procedures because foreclosures are governed by state law. Federal law can impose reforms, but states must implement them. The most effective legislative solution would offer lenders two options: conduct and complete the foreclosure or lose its security interest in the property.

It seems inequitable to allow
lenders to benefit
from the strategic delay
while borrowers and municipalities
bear the cost of a lender’s inaction.

Amidst the Walking Dead,
Andrea Clark, Emory Law Journal

The zombie home problem

Zombie homes are a community problem. “Zombie” homes are properties vacated by homeowners and not taken possession of by the bank. These vacant properties can affect the home values of every property in any given neighborhood.

Requiring mortgage lenders to foreclose within a reasonable period would help to combat the zombie home problem. Forcing the lender to take legal title to the property would strongly incentivize the lender to prepare and sell the property on the open market as quickly as possible. Legislation can compel banks to maintain these properties despite any delay in the foreclosure process.

HOA fees, insurance, and taxes

A homeowner who can no longer afford a mortgage may decide to declare bankruptcy to discharge the mortgage debt. Sometimes, however, lenders decide to let homeowners twist in the wind. The homeowner may no longer owe the mortgage company. Yet the borrower remains legally obligated to pay ongoing bills like homeowner’s association fees, insurance, sewer fees, waste removal, and taxes. This is the lender’s way of sticking it to borrowers who default. Bankruptcy does not absolve a homeowner from these obligations.

A homeowner who vacated a property months or even years ago may be surprised to learn that she remains title owner to the property. By the time that the homeowners learns that the bank has yet to foreclose, these obligations have grown to often unmanageable amounts.

Municipal maintenance charges and fines

As long as the borrower — and not the bank — is title owner of the property, then the borrower is responsible for the upkeep of the property. Local city and municipal governments routinely fine property title owners for properties not properly maintained. Cities can fine property owners for broken windows, improperly boarded doors, uncut grass, and unshoveled snow. Because the homeowner has left the property, and cities usually send notices solely to the property, these fines can rack up quickly to the thousands.

State legislatures can require banks to rehabilitate, repair, and improve properties in their possession. States can also impose a pre-foreclosure duty on banks and servicers to maintain vacant and abandoned properties. These requirements would expedite foreclosure for vacant properties and get them back on the market.

Promoting finality and certainty in the foreclosure process

Extended foreclosure timelines may benefit some delinquent borrowers by allowing them to live in their homes longer without making mortgage payments. But longer foreclosure timelines also slow foreclosed borrowers’ reentry into homeownership. And strategic delays by mortgage lenders allow them to bypass legal liability for maintaining the property while retaining the ability to foreclose in the future.

Requiring mortgage lenders to timely take title to properties in foreclosure would also bring closure to a process that is often heartrending for entire families. States should impose foreclosure deadlines on mortgage lenders to promote finality and certainty in the foreclosure process. In judicial foreclosure jurisdictions, imposing a reasonable timeline would also reduce the drain on judicial resources.