Do You Need to Defend a Foreclosure While Pursuing a Loan Modification?

For many homeowners, the mortgage crisis that occurred a few years ago inspired many nightmares. It also left many consumers victim to a process called dual tracking. Dual tracking allows mortgage lenders to continue to pursue a foreclosure on a property while also offering a loan modification to the homeowner. Sounds confusing, right? Not only is it confusing, but also a devastating process. Dual tracking left many homeowners unsure of their options. Usually, homeowners were left with whichever option finalized first, usually the foreclosure. Even worse, homeowners who decided to pursue the loan modification were shocked to learn that their home had instead been foreclosed upon in the meantime.

However, new laws were developed through a nationwide mortgage settlement to limit lenders introducing both foreclosure and loan modification to borrowers. For Florida homeowners, the protections available depend on the stage of the foreclosure proceedings. If a homeowner has been unable to make mortgage payments, but a foreclosure has not yet been initiated, the lender can offer the homeowner a loan modification within 120 days of the homeowner’s delinquency. After a foreclosure has been filed, the lender only has five days after the foreclosure filing to offer a loan modification.

Despite the fact that these rules were intended to simplify the foreclosure process and make options available to homeowners more understandable, there are specific timelines in place that must be followed for all options to still be available. If you are having trouble paying your mortgage, you should consult with an attorney immediately to see if a loan modification may be possible in lieu of a foreclosure. If a foreclosure has already been initiated, an attorney can also help you understand what other options may be available to you in order to save your home.

Falling behind on your mortgage doesn’t mean you will lose your home. By speaking with an attorney about your particular situation, you will find an ally who may be able to work with your lender to come up with the best option for all parties. Consulting with an attorney will also help you understand the timeline involved in your particular case, and you may find you have more options than you initially thought.