Every foreclosure is different; that is why we ask homeowners to complete our “Foreclosure Analysis” form. Once we receive this information, we can review it and accurately determine which options are best for the homeowner.

If a loan modification, forbearance, or refinance is the best option for a homeowner who is in a position to keep his or her home, we will provide you free guidance on how to successfully work with the lender to resolve this matter on your own at no cost or obligation. We can also provide you a list of ethical lenders and realtors who can refinance or list your home if that is an option. As a community service, the law firm provides free guidance to homeowners on how to avoid being defrauded by unethical foreclosure consultants or criminals that prey on distressed homeowners. We encourage you to read the contents of our web pages entitled “Foreclosure Fraud” and “Consumer Protection Laws” to stay informed and protect your interests if you are in the foreclosure process. We don’t charge for any of the above services because we want to educate the homeowner on how the foreclosure process works as well as provide general advice when the homeowner can engage in self-help. None of the above services will require you to retain our law firm.

Many people get nervous about hiring a law firm because they don’t want to be involved in a lawsuit. We aren’t interested in filing a lawsuit. We are a real estate transaction law firm that focuses on helping homeowners avoid foreclosure by negotiating a “Short Sale” with the lender on their behalf. Avoiding foreclosure by selling the property allows the homeowner to save their credit, eliminate the debt, and move on with their lives. If you choose to retain our law firm, we will represent you for free. Many people ask us how we can provide such a service to homeowners for free. The legal services we provide are not free; it’s just that someone else pays for them. Allow us to explain.

If a homeowner is “Upside Down” on their loan (meaning they owe more on the property than the property is worth) and they are unable to make loan payments due to financial constraints, then they may be able to take advantage of our services in negotiating a “Short Sale” of their property. A “Short Sale” is the settlement of your debt with the lender for less than is owed. We will determine if you are a good candidate for a “Short Sale” based on the information we obtain from your “Foreclosure Analysis” form. If so, we will ask you to sign an engagement letter. When you sign the engagement letter and retain us, we will contact the lender on your behalf and handle the matter for you.

When a lender accepts a "Short Sale," they waive any right to legally pursue you for the difference in the balance owed on the debt (often called a “Deficiency Judgment”). A “Short Sale” of your property also allows you to avoid foreclosure and minimizes the damage to your credit history, as the loan debt will ultimately be listed as satisfied on your credit report.

Another advantage for the homeowner in obtaining a “Short Sale” on their property is a recent federal law (Mortgage Forgiveness Debt Relief Act of 2007) excluding “debt forgiveness income” from federal income tax through December 31st, 2012*. This means if we can successfully negotiate a “Short Sale” of your property, you will in most cases be absolved of any income tax on the debt forgiveness. Visit this “link” to the IRS web site for additional details on the recent changes in the federal law. We also recommend you consult with a certified public accountant to evaluate your individual situation as it relates to a “Short Sale” transaction.

The law firm’s compensation is obtained through the sale of your property. If we successfully negotiate a “Short Sale” with the lender, we will obtain an assignable contract on your property. The law firm does not under any circumstance purchase the property of its clients. We have a network of investors who purchase properties one of whom we will ultimately assign the contract. At the close of escrow, the individual investor who purchases the property will provide the law firm compensation for the legal services rendered.

As stated above, our legal services are rendered to the homeowner for free. Even if the homeowner retains our law firm and we are unable to successfully negotiate a “Short Sale” with the lender or assign a “Short Sale” to an investor, we will not seek reimbursement of our legal fees or costs from the homeowner. The homeowner would only be liable for legal fees or costs under one circumstance: If they retained our law firm and then in “Bad Faith” refused to cooperate or assist us with the “Short Sale.”

Many homeowners ask us why a lender would settle for less than the debt owed on the property. There are many reasons:

1)     The foreclosure process is very expensive. It is not uncommon for a lender to pay more than $50,000 in fees to foreclose on a property;

2)     The lender has investment capital tied up in your home. As long as they aren’t receiving a loan payment, they are not getting a return on their investment;

3)     The lender wants your loan payment and not your property. If they foreclose on your property, they will have to pay maintenance fees, property taxes, and other fees related to holding the property; and

4)     At the end of the foreclosure, the property is auctioned off to cover the debt owed. If the auction is unsuccessful in finding a bidder willing to pay enough for the property to cover the debt, then the lender will end up with your property (called an REO). The lender will then have to list the property for sale, which will result in additional costs for them. They will have to pay closing costs and realtor fees (these fees often total as much as 8% of the sale price) on top of any necessary repairs to the property in connection with its sale.

So ultimately, the lender has many financial motivations to settle the debt for less than owed during the pre-foreclosure process, especially if they know there is a cash buyer for the property. Since time is money to the lender, it is critical we start the negotiation process as soon as possible to leverage the advantages listed above.

Don’t wait until the last minute! If you wait too long before starting this process, we may not have time to complete it before the auction of your property occurs. If this happens, the sheriff's department will ultimately remove you from the property if you stay and you will suffer a foreclosure on your credit history.

Did you know if you ignore the situation and just walk away from your home without a “Short Sale” or some other workout, the resulting foreclosure on your credit history will not only prevent you from buying another home, it may also prevent you from getting a credit card or any other credit to buy a car, furniture, or other necessity? It may also hinder your ability to rent an apartment or get auto insurance. This impact can last for up to seven years. Your lender may also pursue a lawsuit against you for your loan balance in the case where a loan was refinanced or if you have more than one loan against your home. We are here to help you; don’t let it get that far.