Foreclosure Process

The Foreclosure Process And How to Avoid Foreclosure

Unfamiliar with the foreclosure process? Are you facing foreclosure and looking for more information about the foreclosure process? This site is designed to help you understand the foreclosure process and how you can save your home.

The mortgage foreclosure process is different depending on which state you live in. If you live in one of the Eastern States, then chances are that likely, you are in a Judicial foreclosure process state. If you live n Washington, Oregon, California, Nevada, Arizona, etc, then chances are you live in a Non-Judicial foreclosure process state.

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Foreclosure Process – A Quick Introduction

To understand the foreclosure process we must look back to when you closed your loan, you signed two documents: The Promissory Note and a Deed of Trust (in a Non-Judicial State) or a Mortgage (in a Judicial State).

The Deed of Trust/Mortgage is recorded at the County Hall of Records and it is this instrument that gives your lender the “Due on Sale” clause when they sell your property in the event of a default.

However, the first document; the Promissory Note, is the most important document that most lenders do not own or possess as required by law. You see, under US Supreme Court ruling in Carpenter v Longan, it was ruled that for a party to be entitled to enforcement of the promissory note, they must be the owner of the note. Here’s the deal: most “lenders” do not own or possess the note. They are just servicers….

However, before we go into how to defend your home from foreclosure, we need to go briefly into the foreclosure process.

The Judicial Foreclosure Process

In a Judicial State, the foreclosure process involves the “lender” (who actually is a servicer) to hire a foreclosure mill and file a law suite and sue you once your loan is in default.

Typically, after 3 to 6 months of non-payment, depending on your State and which bank, your lender will file a Notice of Default at the County Hall of Records against you and your property. They will then send this notice to you via certified mail.

Then, depending on your State, you will be given a certain number of days to cure this default, typically this varies between 30 to 90 days. After this time, the “lender” (servicer) will then file a civil action against you. This involves them claiming that you have defaulted on the mortgage, and requiring you to answer the action within 30 days or appearing in court to defend yourself.

It is here that most homeowners lose because they simply do not know their options or rights. Most homeowners simply don’t respond and/or don’t show up at their court appearance and end up losing their homes by default.

As a homeowner, you are protected not only under your State’s foreclosure laws, commercial laws but also under the Constitution of the United States. You are entitled to proper due process of the law, and against illegal search and seizure of property.

You see, these “banks” are literally stealing people’s homes without any real authority to do so. They are relying on your ignorance. They are relying on the court system’s ignorance. And they are getting away with this every single day.

We will go into more detail about this later.

The Foreclosure Process And How To Stop Foreclosure

To learn how to stop a foreclosure in one of these judicial states, you will need to have evidence of movement and evidence of faulty chain of title for your property.

Evidence of Movement is when you have closed your loan with an original lender (Bank A) and now another party – the servicer (who has no real interest in the loan at all) is trying to foreclose and who has filed the civil action against you in fraud.

You see, more than likely, your loan has been securitized. This means that your loan is bundled up with thousands of other people’s loans and sold onto Wall St as a Mortgage Backed Security….which mean neither your original lender…nor your servicer actually owns the promissory note. In order for them to actually have Standing (jurisdiction) to foreclose, they must be a real party of interest or the Holder in Due Course of your promissory note. More than likely, they are not.

All you have to do to stop foreclosure if you are in a Judicial State is to file a Motion to Dismiss if your loan has evidence of movement. You simply state in your Motion to Dismiss that your lender of record is the original lender and there is no evidence of a chain of title giving this current servicer the ability to foreclose…ie having any Standing to foreclose.

To learn how to file a Motion to Dismiss, please consult your local attorney. If you would like to use our pre-made template (used by many homeowners to successfully have their case dismissed), simply fill in your name and email to learn how to Stop Foreclosure.

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The Non-Judicial Foreclosure Process

In a Non-Judicial state, the foreclosure process is handled without any court involvement. In other words, the “lender” (or anyone else) can literally foreclose on anyone if they put in the proper paper work as governed under the State’s Civil Code governing the foreclosure process.

After 3 to 9 months after non-payment, the “lender” will file a Notice of Default and record this against the County Hall of Records. Again, depending on your State you will have between 3 to 6 months to bring this loan current to cure the default. They are required to send you this notice along with the Notice of Substitution of Trustee to you via certified mail.

The “lender” also file a Notice of Substitution of Trustee with the County. When you originally signed your loan, you appointed an initial Trustee (this is usually the same company you went to to sign your closing documents). When your “lender” wants to foreclose, they then appoint a substitution Trustee who will administer the foreclosure process.

After the passage of 3 to 6 months, your “lender” will then send a “Notice of Trustee Sale”, which usually gives you a date between 30 to 60 days out. They usually send it to you in both regular and certified mail.

Then on the date of the sale, an auction is typically held at the local court house. Your house goes on bid to the highest bidder. By default, your “lender” will usually bid 1 dollar above the loan amount…using the delinquent amount as their payment. In other words, they do not have to put up any of their own money.

Once the house is sold, if it goes to the “lender”, then the lender will typically give you another 30 to 60 days to move out. If by this time, you have not moved out, then they will file a court action called an Unlawful Detainer. It is your responsibility to answer this. Once it is ruled upon, the “lender” will be given a court order to have the right to kick you and your family out of the house.

What most people don’t understand is, there are options available to defend your home. You see, under the Federal Rules of Civil Procedure Rule 17 “an action must be taken in the name of a real party of interest”, your “lender” is not a real party of interest. They are just a servicer. They don’t own the note and are therefore not a lender at all.

In the next section, we will go into some foreclosure process defense strategies.

Want To Learn About The Foreclosure Process Further?

foreclosure-processIf you are in a Non-Judicial State and want to learn about how to stop foreclosure and have proof that your lender broke the law, then you can file a civil action against your lender.

    Examples of this include:

  • You have proof that your lender does not own your loan. For example, you closed with ABC Mortgage company, yet someone else XYZ Company is trying to foreclose on you – and there is no chain of title between the original lender and XYZ
  • You have proof that you are currently in a loan modification program, and yet your lender is foreclosing on you
  • You have proof that your loan has been securitized (meaning your lender sold your loan to Wall St – and no longer owns your loan), but are trying to foreclose on you

Filing a civil action against your lender is not something you should take lightly. It requires a great deal of education. For more information about lender fraud and how you can put up a legal defense, download this free ebook from Vince Khan called “The Foreclosure Defense Handbook”, which shows you step by step how to put up a fight…and win.

Once you have filed for a Civil Action, you can then Motion for a TRO.

Firstly, in order for a TRO and/or an Injunctive Relief to be granted, the petitioner has to show a strong likelihood of success. This means that as a Plaintiff, you will need to bring compelling evidence to convince the judge that you deserve a stay of the sale. It is your job to bring significant controversy that brings doubt as to who the real party of interest is in the foreclosure action.

Obviously, having a securitization audit would be hugely beneficial as well as a pleading/complaint that argues the points and authority that the pretender lender is not the real party of interest. However, this takes time. Time you might not have.

Crafting a pleading takes time and requires great care. It is not something that can be rushed. You should consult your lawyer as to the proper method and process for this.

If you are a member of the foreclosure defense membership program, they have included sample TROs, Injunctive Reliefs as well as sample pleadings that others have used. It is then up to you to simply customize the arguments as it applies to your own situation. You should consult legal counsel before engaging in something like this.

If you are interested in learning how to file for a TRO, you should consult a local attorney (this usually start around $5000 but could run you up to $25,000). If you would like to do it yourself and use our pre-made foreclosure defense template, click here to learn how to Stop Foreclosure Dead in its Tracks.

Foreclosure Process Prevention Strategies

There are a number of different things you can do to prevent foreclosure and the loss of your home. Obviously, losing one’s home is a source of anguish and pain.

The first thing you need to know about foreclosure defense is that you have rights. You need to know what those rights are. If you are ignorant of your rights, then you do not have any rights.

You have the right to ask questions. You have the right to know who owns your promissory note, because only the “holder in due course” can foreclose on your home.

You see, your loan, like millions of loans around the country has been securitized. In other words, it was put into a large pool of other loans and packaged into what’s called “mortgage backed securities” and sold onto Wall St. Your bank is then paid in full for the loan and acts as a servicer for the loan.

In other words, the “lender” is not really a lender at all. They fully sold their interest in the loan. Their only responsibility is to collect money for the loan and send it to the owner of the note. The problem is, no one knows who this part really is.

As more and more homeowners learn about this issue, more and more people are learning to fight back; challenging the servicer’s rights to foreclose.

Case and point is in a recent Massachusetts Supreme Court ruling, a homeowner won against US Bank because it was ruled that US Bank was not the owner of the note and therefore did not have the right to foreclose on the homeowners.

To learn more about how to defend your home from foreclosure and the foreclosure process, then enter your name and email into the form below for a free ebook on the foreclosure process and how to avoid foreclosure.

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For more in depth information about how to save your home and the foreclosure process please explore our free foreclosure defense handbook.