Every day, on my way home from work, I pass a billboard that says “If you’re facing foreclosure, talk to your bowling buddies second.” (ForeclosurePSAs)The first time I saw it, I laughed. Then, I realized that, while many people get advice from their friends, neighbors, and niece’s best friend’s mother’s sister, word of mouth is often one of the quickest ways to get information.
While I had already signed a forbearance agreement with my lender, I still shared my story with my friends. One friend suggested I talk with a former co-worker who was responsible for arranging financing for low-income families. She referred to my local Housing Resource Center.
Housing Resource Centers have been set up across the country. They are non-profit entities funded by the Housing and Urban Development (HUD) agency, and usually set up in conjunction with municipal or county governments. (Of course, if you investigate one near you, make sure they are HUD-approved and check with HUD on their website www.hud.org – a lot of people are looking to take advantage of homeowners in difficulty.) Although these agencies were originally set up to service low-income households, they can help most homeowners.
I set up an appointment the next day. The counselor I spoke with said people usually contact them prior to entering into any agreements, because they are able to negotiate with the lenders on their behalf. And that they can usually get a different answer from the mortgage companies, because they are more willing to work with the housing agencies. She also suggested that whenever I needed to contact my lender from that out, such as faxing my financials, I should send them via their agency.
In retrospect, I’m glad I used their services, as it added another layer of credibility to my legal battle.
After diligently making three of the four accelerated payments on time, I received a letter asking me to provide verification of my income and other information I had shared over the phone. After gathering everything together, I went over to the Housing Resource Office, and asked them to fax the documents for me. Some of these documents were my two most recent paystubs, most recent tax return, two most recent bank account statements, and a letter explaining the reason for my hardship.
A few weeks later, I received another letter, stating they were missing some information and requested my two most recent paystubs, but now I must send three months’ worth of bank statements. I returned to the Housing Resource Center and had them fax the documents again.
Two weeks later, I received a letter from the lender, informing me that they would no longer work with me on a loan modification because information was missing from my application, and that they would continue to pursue all avenues open to them, including foreclosure. It went on to say that if I had information that would affect their decision, it must be received in their offices five days prior to the foreclosure sale, “if one was scheduled”.
Here’s the kicker – the letter was dated July 25, 2009. The envelope was postmarked July 27, 2009. The foreclosure sale was scheduled for July 30, 2009. I got the letter the day after the sale. In timing their correspondence with me in this way, my lender effectively subverted my rights under California law.
First off, because we had entered into a Forbearance Agreement, we had effectively changed the original sale date. By law, the lender had to re-start the foreclosure process, sending me a new Notice of Default. Of course, since I hadn’t defaulted on our agreed-upon payments, there was no default.
Secondly, California law provides for a “right to cure” or “right of redemption”. Under this law, I should have been given enough notification to either find a new lender or cure the default. That timeline here is 5 days.
Even though the letter reached my mailbox the day after the sale, I was blissfully unaware that a sale had taken place until a real estate agent showed up at my door, offering “Cash for Keys”. This is a program implemented to get homeowners or renters out easily. In exchange for an agreement to leave quietly within 30 days, the mortgage company will offer some small token sum to assist with the cost of moving – usually anywhere from $500-$3,000.
Shocked, I exclaimed, “No, we have a forbearance agreement!” She advised me to get on the phone to my lender because names were being changed over with the county.
As soon as I could, I ran in to the Housing Resource office, since we had agreed they would communicate on my behalf. They dialed up the mortgage servicer’s general number, and after a brief conversation, were referred to the REO (Real Estate Owned) office. A call to that office referred us back to the mortgage company. At that point, the Housing Resource consultant referred me to a non-profit attorney.
After several unsuccessful attempts to contact the attorney – as I’m sure he was overwhelmed with requests for assistance from around the county – I struck out on my own to find an attorney to help me at least understand what my rights were and what I could do about the situation.
Attorneys will usually offer a free consultation. Make sure you have all of your facts and any supporting documentation before you seek an attorney out. The caveat is that time is of the essence when your home has been foreclosed on. You must move quickly, especially if you believe (as I do) that you have been the victim of Wrongful Foreclosure, or as some pundits call it, “Fraudclosure”.
If you have not been foreclosed on, and have a forbearance agreement, one of the key things you can do to avoid being wrongfully foreclosed on is to check your local paper for notice of the sale date. Your lender is required to publish all notices of sale in an “adjudicated” newspaper.
I made the mistake of checking only the paper that gets delivered to everyone’s doorstep daily, only to find out that the free weekly entertainment newszine that I could only get from a newspaper machine was the one the notices were being published in! Yeah, they don’t make it easy. (To search on the web, look up “adjudicated newspaper your county”, and you should find a listing from your county government.)
So, sometimes it helps to talk to your “bowling buddies” first. If I hadn’t talked with my friend, and been referred to the Housing Resource office, I might still be wondering whether or not my mortgage company was in the wrong, and what I could have done.