How to Stop California Foreclosure Without Bankruptcy
Stopping a foreclosure without bankruptcy isn't easy and will take time. You will need to contact the lender to see if you qualify for modification program. The most popular modification program is the Making Homes Affordable Program. While it is possible to do enroll by yourself, free help is available from groups such as the Neighborhood Assistance Corporation of America (NACA). Asking the bank to produce the note to the house and having a loan audit done on the original loan documents can help push the bank to stop foreclosure and give a loan modification instead.
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Things You'll Need
- Income verification
- Monthly mortgage statement
- Tax returns authorization
- Property tax bill
- Homeowner's insurance bill
- Original mortgage loan documents
Instructions
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After cutting back expenses, start paying extra to catch up on your bills. Calculate all your expenses and start living within your means. Keep track of exactly how much you spend and start cutting back on everything. Call your utility, cell phone and credit card providers and ask if they can help lower your bills. Look through all the links in "Resources" for ideas on how to cut back on living expenses.
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If you have enough equity in the house, you may be able to refinance. Call your mortgage provider and ask about their home loan modification programs. To qualify for the Making Home Affordable program, your monthly mortgage amount must be over 31% of your gross monthly income. To calculate, multiply your gross monthly income by .31. For example if your gross monthly income is $3,000, then $3000 X .31 = $930. If the amount owed per month is over the 31% mark (in the example, $930), then you would could qualify. You must also not owe more than $729,750 on a first mortgage and the house must be your primary residence.
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The Making Home Affordable Plan is also known as the Obama Plan. Submit all the paperwork required by your mortgage provider. Call to make sure all the paperwork is received and keep records exactly who you talked to and when. Once you submit all your paperwork, the foreclosure process must stop until the bank either rejects the submission or makes an offer.
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Contact home loan modification help providers such NACA. Submit any information they require and make an appointment for their counseling session. The counseling session will help explain the process and what they can do to help.
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Call your mortgage provider and ask who is the holder of the Note for the house. The Note holder is beneficiary of the loan. While it might not completely protect you in foreclosure, the bank is supposed to produce the Note in order to legally foreclose a house. Some judges in California have ruled in favor of the banks even when the original note isn't produced in court; however, you can request another hearing with a different judge.
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It is much easier to get a modification if you can prove illegal actions done by the lender. Obtain a mortgage loan audit, also called a forensic loan audit. This is done by a professional lawyer. The lawyer will go through your entire mortgage loan paperwork word for word to look for anything illegal and if your loan might have been a predatory loan.
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Tips & Warnings
Do not stop paying your mortgage. Even if you cannot pay the full amount, you should pay what you can. If you don't, the mortgage provider will tack it on to the full loan amount and additional interest will be paid on the delinquent amount even on a modification.
Never trust a company that guarantees it will stop a foreclosure or requires upfront payment.
References
Resources
- Photo Credit house image by Michael Shake from Fotolia.com Paying Bills image by ne_fall_photos from Fotolia.com calculator image by gajatz from Fotolia.com paperwork 2 image by chrisharvey from Fotolia.com Documents image by GHz from Fotolia.com
