How to stop an Alabama foreclosure from Nationstar Mortgage (Mr. Cooper)

Nationstar Mortgage is one of the largest servicing companies of home mortgages and they foreclose on many Alabama homeowners.

A recent “branding” campaign of changing their name to “Mr. Cooper” is designed to make you think Nationstar is a kind, compassionate old friend.

A name change does not mean the corporate culture has changed.

Understand this — they will foreclose on you in a heartbeat.  You must protect yourself from their tactics.

So how can you stop a foreclosure from Nationstar?

1. File suit under paragraph 22 of your mortgage to have a judge consider a foreclosure
2. Use the FDCPA as normally Nationstar is a debt collector
3. Use RESPA as Nationstar is a “servicer” of your mortgage
4. File bankruptcy (normally a terrible idea but it is an option)
5. Get help with loss mitigation
6. Reinstate your mortgage

Let’s see how each of these apply to Nationstar and your mortgage.

File suit under paragraph 22 of your mortgage to have a judge consider a foreclosure

Normally your mortgage will give you the right to sue before a foreclosure.

Often this is under paragraph 22 of your mortgage.

It basically will say in the “notice of default” (default letter) that your mortgage company must tell you that you have the right to bring a court action (lawsuit) to have a judge decide about the upcoming foreclosure.

If it does, then great.

If the default letter does not, you still can sue based on your mortgage.  (And you may have grounds to sue Nationstar for lying in the default letter).

This can be a wonderful option to stop the foreclosure.

Use the FDCPA as normally Nationstar is a debt collector

Generally, Nationstar or Mr. Cooper claims to be the “servicer” for your loan and some other company actually owns the loan or the debt.

If Mr. Cooper starting servicing your loan when it was technically in default, then normally it will be considered a “debt collector” under the FDCPA.

Here’s the importance of the FDCPA (Fair Debt Collection Practices Act) applying to Nationstar (Mr. Cooper).

This is a very powerful law that makes it illegal for Nationstar to lie to you.

You see, a lot of laws are set up to give mortgage companies the right to lie to you, at least if they don’t do it in writing.  And the crooked mortgage companies take full advantage of this “loophole” to tell you one thing over the phone, but then do the opposite.

So you might be told over the phone that the foreclosure sale has been canceled, but really a company like Mr. Cooper will still foreclose.  (Nationstar would insist it would never do this — whether they are telling you the truth — protect yourself by knowing your rights).

If your mortgage company lies to you and it is covered by the FDCPA, this gives you the power to sue after you have been harmed.

But even before the foreclosure, when you catch them in lies, the FDCPA is a powerful motivator for your mortgage company to stop its planned illegal foreclosure.

Use RESPA as Nationstar is a “servicer” of your mortgage

RESPA (Real Estate Settlement Practices Act) is a powerful law that regulates “mortgage servicers” of your loan.

We’ll touch on just a few aspects that relate to stopping foreclosures.

First, you can send out notice of error and request for information letters to Nationstar.

These letters are powerful.  But many mess them up so they do absolutely no good.

You must use the correct address to send your notice of error or request for information letters.  Do make sure you check this address — it can change — look on your mortgage statement and the Mr. Cooper/Nationstar website for it.  Right now it appears to be this:

CUSTOMER SERVICE

Notice of error, complaints, request for information or other qualified written requests

Attn: Customer Relations
PO Box 619098
Dallas, TX 75261-9741

Second, there are rules about loss mitigation applications.

We won’t cover every rule here but here’s the basic point.  If you fill out a loss mitigation application, it should be accepted or rejected.  You should be told about the answer so either it works or you can potentially appeal if you think the rejection was wrong.

There are all sorts of details on timelines and deadlines but understand suing under RESPA can be an option if the mortgage company mistreated you.

Third, there is the 120-day rule on foreclosures in Alabama.

The basic idea is there can not be a foreclosure until you are at least 120 days past due.

We don’t see this violated very often but occasionally it is so keep it in mind.

Bottom line is RESPA has a lot of rules and you need to look at them to see if they give you any help in stopping a foreclosure from Nationstar.

File bankruptcy (normally a terrible idea but it is an option)

Here’s the short version.

Bankruptcy is a life-altering event and normally it does not work very well.  It may stop the foreclosure initially, but then if you can’t afford all the bankruptcy monthly payments, you’ll be foreclosed on and have a bankruptcy on your record.

Here is an article designed for Alabama lawyers but you might find it useful where we talk about filing bankruptcy is normally a bad idea.

And here is an example case study comparing bankruptcy and suing your mortgage company.

Get help with loss mitigation

This is where you either on your own or with the help of someone you apply for loss mitigation.  You can do this on your own so it is normally not a great idea to hire someone to help you.

If you do hire someone, I would be very careful about hiring an out of state company — what exactly are you paying for.

Even hiring an Alabama law firm — what are you paying for?  Make sure you know the costs and the benefits.

But loss mitigation can be great — just consider doing it on your own:

• Loan modification
• Short Sale
• Deed in lieu of foreclosure

These are just several examples of loss mitigation.  And here is an article with some tips on protecting yourself from being mistreated while you do a loss mitigation application.

Reinstate your mortgage

The idea of reinstating your mortgage is that you pay off the past due amount.  Normally there will be some fees and charges added to it but you can request a “reinstatement” amount.

Read your mortgage but normally you can do this within 5 days of the foreclosure.

For most people this is not a realistic option but sometimes you can get the money to pay this reinstatement.

A warning:  We have cases where people pay the reinstatement and the mortgage company still forecloses.  This turns out very bad for the mortgage company but do protect yourself when reinstating:

• Make sure you know the exact amount to pay Nationstar
• How you are to pay them — cashier’s check, wire transfer, etc
• When you are to pay
• Where you are to pay — lawyer’s office, call into Nationstar, etc.
• Keep detailed records of everything so you can prove that you did exactly what Nationstar told you to do

What should you do now to stop Nationstar from foreclosing on your home?

You have options.

Go through each option and see if it is practical for you.

Get rid of the ones that won’t work for you.

Then take the remaining options and list out the advantages and disadvantages of each one and find the best one for you.

We are happy to help you do this — you can call us at 205-879-2447 or fill out the form below and we’ll get right back with you.

Best wishes!!

John Watts