Alabama Foreclosure — What If I Am Not Sure I Want To Keep My House — What Are My Options?

Alabama Foreclosure — What If I Am Not Sure I Want To Keep My House — What Are My Options?

This is a situation that is growing.

You’re facing foreclosure on your Alabama home that is underwater (you owe more than it is worth) and you are not sure you want to keep your home.

The time pressure of the foreclosure is growing on you and you are getting conflicting advice.  What are your options?

First Option — Let the Foreclosure Happens

This is the option of doing nothing.

You let the foreclosure date approach and then the actual foreclosure happens.

The ownership of the home will be transferred from you to the company (or person) that buys the home.

Normally this is the mortgage company or Fannie Mae or Freddie Mac.

If the Alabama foreclosure was done properly (at the right time and place) and the actions of the mortgage company were proper leading up to the foreclosure were proper, then you will need to leave your home as you don’t own it anymore.

If the foreclosure was not done properly or if the mortgage company lied to you before the foreclosure (or never had the right to foreclose), then you should look carefully to see if you can sue for wrongful foreclosure.

Normally this is done in the context of an answer and counterclaim to an ejectment lawsuit against you by the new owner (normally the mortgage company).

Second Option — File Bankruptcy

You can file for bankruptcy.

Either chapter 7 or chapter 13.

This will normally stop the foreclosure.

At least temporarily but then the mortgage company will get permission to foreclose.

Some people can stay in a chapter 13 — where you make payments to court — and pay not only their normal payment but also their back payments (arrearage) but for most folks this is difficult to do.

It is an option, however, to stop the foreclosure and come up with a good solution.

This is why mortgage companies often lie about postponing the foreclosure date — they want you to lose this option to stop the foreclosure.

Third Option — Sue and Settle for a Deed in Lieu of Foreclosure

If the mortgage company has violated the law — and there are numerous ways this happens — then you can sue.

This normally stops the foreclosure.

We don’t file TRO — temporary restraining orders — for a variety of reasons.

When we sue before a foreclosure we simply notify the foreclosure lawyer that we have filed suit and leave it up the lawyer and the mortgage company whether they will go forward with the foreclosure despite our suit.

They never have.

Because we have told them, in a federal court lawsuit, that the foreclosure is wrongful.

If they go ahead with it, and we are right that the foreclosure is wrong, then the mortgage company and foreclosure lawyer have just magnified the damages.

Part of the settlement can be for you to leave your home by giving up the deed in lieu of (instead of) a foreclosure.

We insist on that there be no “deficiency” and we want some relief on credit reporting in exchange for dropping the lawsuit.

Fourth Option — Sue and Settle for a Loan Modification

If you want to stay in your home, and you have the ability to pay, then the mortgage company will normally be interested in seeing if you can qualify for a loan modification.

If you can meet the requirements, then the foreclosure deed will be voided (if the foreclosure already happened), your loan will be modified, and the lawsuit will be dropped.

You need to have a legitimate claim and be able to show your ability to pay the modified loan.

There are no guarantees that the mortgage company will settle but then there are no guarantees in life, are there?  This gives you an opportunity and if it doesn’t work, then you always have the fifth option . . . .

Fifth Option — Sue and Don’t Settle

If you sue the mortgage company and you (or the mortgage company) don’t want to do a deed in lieu of foreclosure and don’t want to do a loan modification, then the final option is both sides push forward with the lawsuit to get to trial.

Most cases settle at some point but there is a reason we have jury trials and courthouses — to try cases.

Bottom Line — Which Option Is Best For You?

You have to decide by looking at all options for your Alabama foreclosure.

We will be happy to sit down and talk with you to help you understand your options.

We represent consumers all over the state of Alabama.

Give us a call at 205-879-2447.

Or you can fill out our online contact form and we will get back with you as soon as possible.