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Major Lenders Halting Foreclosures! What Does That Mean for the Property Owner?

These days you can’t pick up the newspaper without reading about another financial institution temporarily suspending their mortgage foreclosure cases to review their in-house procedures. GMAC, JP Morgan Chase and Bank of America are just a few worth mentioning. You may be wondering “what does that mean for me”? If you’ve been following any of my writings these last few months, I’ve been suggesting that simply “walking away”, delivering a “deed-in-lieu” of a foreclosure, or abandoning the property is not in the property owner’s best interest.

What has happened sooner than expected has been the “stoppage” or “slowdown” of cases by some major lenders as they have sought to review their foreclosure procedures. More surprisingly, lenders have acknowledged what many foreclosure defense lawyers have been saying for months – the “procedures and documents are faulty and/or fraudulent and violate the ‘due process rights’ of property owners”. As a result, it is clear these foreclosure actions and/or judgments should not be allowed to proceed or remain in effect since the very foundation of these cases is tenuous at best.

The weight and impact of that argument has finally taken hold. But, will this mean the end of foreclosures? No. What it does mean is we will be entering a phase where loan modifications and short-sales will finally take on a new meaningful role. Lenders appear to be recognizing the risks of relying on faulty (possibly fraudulent) documents. That recognition should now lay the groundwork for meaningful loan modifications and short-sale negotiations to take place. I believe lenders will weigh in, carefully, gingerly, but dare I say “realistically”, to actually enter negotiations where “principal reduction” and “waiver of deficiencies” will actually be part of the conversation.

In this new environment, proficient and experienced negotiators will make the difference as you seek modifications that are long-lasting and short-sales where you sell the property and need not endure years of fear over the possibility of being sued for the deficiency.

As the foreclosure landscape shifts and lenders now appear more willing to negotiate in “good faith”, the Reyes Law Group is able to bring over 22 years of experience, expertise and passion to defending a foreclosure action or negotiating with lenders for a loan modification or short-sale approval. In prior writings I’ve said that real settlement talks at the right time can lead to a fair and reasonable outcome. Today, more than ever, contacting a FORECLOSURE DEFENSE attorney who understands the process and the objective can help you aggressively litigate your case, negotiate your loan modification and/or successfully close your short-sale transaction. In the end, you deserve a passionate voice to help you defend your property and preserve your rights!


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