Myths of stopping foreclosures in Alabama

Stopping your Alabama foreclosure is possible but many homeowners fall victim to one of the common myths.

The problem is when we start with the wrong assumption, we reach the wrong conclusion.

If I’m in Birmingham and I want to go to Atlanta, then driving West will not get me to Atlanta.  I can be as motivated as possible, but driving the wrong direction won’t get me to where I want to be.

So if you are facing a foreclosure, make sure you don’t start with the wrong assumption — one of these myths — or you may find yourself out of your home.

Here are common myths:

1. My mortgage company won’t foreclose on me anyway
2. The loan modification/loan audit company I hired will handle everything for me
3. I’ll just file bankruptcy as that is my only option
4. It is too expensive to stop a foreclosure by suing my mortgage company
5. It is unfair to sue my mortgage company as they have my best interests in mind

My mortgage company won’t foreclose on me anyway

This is one of the most common myths.

I can’t tell you the countless number of folks that contact us after a foreclosure.  They are completely shocked that it happened.

They are in utter disbelief.

“Surely this is a bad dream and my mortggae company did not really take my home!”

“They can’t do this — my kids are still in school — there must be a mistake.”

“My cousin is 18 months behind and still no foreclosure so surely my company is not allowed to foreclose on me when I’m only 6 months behind.”

There are hundreds of foreclosures every month in Alabama.  Virtually every single one of those foreclosures involved a family who bought this myth.

Understand that foreclosures are real and your mortgage company really will foreclose.

The loan modification/loan audit company I hired will handle everything for me

You know a foreclosure is coming so you decide you must take action.

Very good decision.

But your solution is to hire a loan modification company or a loan audit company.  Almost always they are from out of state and have no physical location.  (Look up their address — you’ll see it is normally a UPS type store location where they rent a box but it looks like a suite number).

They tell you they have secret insider knowledge.

Countless contacts with the mortgage companies and especially with your mortgage company.

Every time we have seen this it is a bogus scam company that is looking to take your money.

Ultimately you need to decide what to do but this is a myth — a mistake — we see so many homeowners make and it costs them literally everything.

I’ll just file bankruptcy as that is my only option

Here’s the bottom line — bankruptcy is one option.

It is not the only option.

As we explain to lawyers — bankruptcy is normally a terrible option.

But so many homeowners think this is the only path to saving their home.

Again, you can file bankruptcy but if your goal is to stop the foreclosure, then normally there are much better ways of doing this.  Including suing your mortgage company as is your right under your mortgage.

It is too expensive to stop a foreclosure by suing my mortgage company

Here’s the thought process of many Alabama homeowners.

1. I know the foreclosure can happen
2. Not going to hire some scam/bogus loan modification or loan audit company
3. Despite all the bankruptcy advertisements, I know this is a lousy option
4. But it will cost too much to sue my mortgage company

People often assume the cost is too much.

But to know if something is a “good deal” or “too expensive” or “not worth it” you have to put it into perspective.

What are you trying to do with the lawsuit?

• Stop a foreclosure.
• Stop this from appearing on your credit report.
• Prevent you from having, for the rest of your life, to say “Yes, I have been foreclosed”.
• Keep you from having to uproot your family and find a new place to live, with a foreclosure on your record.

Now some people say, “I agree with all the above” but they are unwilling to spend any money.  Here’s their “I’m a victim and won’t do anything to help myself” perspective:

“Lawyers should help me for free and I should never have to pay on my mortgage again — I want my $300,000 house free and clear.”

Not much we can do with that — in fact, we refuse to represent these types of folks.

But if you are willing to pay some money (the exact amount varies), then compare the lawyer’s fee to what you get out of stopping the foreclosure.

I can tell you at my firm that it is rare that someone who wants to save their home cannot afford us.  Wh0ever you talk with, find out the cost and compare that to the benefits.

Then you can see if it is a good deal.

But sometimes folks believe it is a good deal but feel that they should not sue their mortgage company because that is unfair . . . .

It is unfair to sue my mortgage company as they have my best interests in mind

Here’s the thought process:

1. My mortgage company does not want a foreclosure
2. I’ve fallen behind at some point
3. So I have no right to sue my mortgage company

But you see — you do have the right.  Look at your mortgage — typically paragraph 22.  Does it give you the “right to bring a court action to assert the nonexistence of a default or any other defense of Borrower to acceleration and sale”?

Almost every mortgage does.

Do you have any defenses?

How about any of these:

• Are you really in default?
• Was a proper default letter sent?
• Does the mortgage company have the right to collect on this debt?
• Has the mortgage company violated RESPA — for example, in not properly processing your request for loss mitigation?
• Is there false credit reporting that conflicts with what your mortgage company is claiming about how far behind you are?
• Is your mortgage company threatening to foreclose in the wrong county?

There are dozens of other defenses — the point is, if you have any of these defenses, you have the right to bring the court lawsuit to have a judge and jury look at these.

This is not unfair — it is very fair.  It is what the original mortgage company told you to do in your mortgage.

Bottom line — don’t fall for these myths — instead discover the truth and take immediate massive action now!

You made it to the end of this long article — congratulations!  Now, what will you do?

You have gained some knowledge or been reminded of things you already knew — now what?

If we learn something and then take no action, it does us no good.

For knowledge to mean anything, we must take action.

Feel free to call us at 205-879-2447 and ask for Randi.

Or you can fill out this form and we’ll get right back with you.

Best wishes!

John Watts