Foreclosure Defense

It keeps you awake at night. Or the thought of it ruins your fun times.  Sometimes you are afraid to look in the mailbox because of it. Your mortgage haunts you.  Many homeowners who are struggling to pay their mortgage are afraid that without warning and at any time the Sheriff will show up on their doorstep telling them that they need to vacate their home.  Nothing could be farther from the truth.

Millions of Americans are behind on their mortgages and the reasons why read like a library filled with sad novels.  Big banks and shady investors caused a “sub prime” mortgage crisis and even if your mortgage was not related to that scandal, the mortgage industry often used questionable tactics against homeowners.

Luckily the abuses of the mortgage industry have led to some reforms and a homeowner is not defenseless against the banks and service companies when they seek to foreclose.

In Maine, there are strict requirements for a foreclosure and when the lender fails to follow the rules, the homeowner can seek protection.

Often the servicers (who manage the mortgage-holder’s business) or the banks and other companies that own mortgages can be required to negotiate in good faith with a homeowner who cannot make payments as promised or is in foreclosure.

Because of the scandals associated with foreclosure abuse after the sub-prime mortgage expansion, several major lenders entered into a settlement agreement with Maine (and other states). They are required to inform struggling homeowners about options to avoid foreclosure. But often these lenders send paperwork that is hard to understand and causes homeowners a great deal of worry and stress because they do not understand why or how to use the programs offered.

Many homeowners lack the time, energy and skill to defend themselves against these banks and other entities but are willing to do practically anything to keep their homes.

A homeowner who has been told she or he is in default, or knows that soon they will be unable to meet their mortgage responsibilities needs advice.  Shankman & Associates Legal Center is here to help.

We represent Mainers in foreclosure actions or work with homeowners to avoid foreclosures through negotiation, mediation and other practices. Our attorneys can counsel you on how and when to submit paperwork (helping you with the documents and the forms along the way). We can represent you at foreclosure hearings and mediations. And, if necessary, we can represent you in an action against a mortgagor bank or servicer to stop harassment, to recover damages you’ve suffered because of unfair collection practices.

In Maine a foreclosure must be brought in court, so that in Maine, a judge will decide your foreclosure matter. This is a benefit to a homeowner because a skilled attorney can guide the process on your behalf.

Let us help figure out the best plan for you and negotiate with your lender.  Having an attorney involved at all stages helps you sleep at night and protects your legal rights.

As a Mainer facing possible foreclosure, you have a wide variety of options that can help to save your home. The experienced attorneys at Shankman & Associates Legal Center can help you to choose the one that is right for you, and guide you through the process. Call us today at (207) 786-0311 for a free telephone consultation.

Who owns what?

Although you made a deal with a particular entity (usually a bank) when you signed your mortgage, you most likely agreed to have it be freely assignable. Therefore, you may now be receiving mail from some business you never heard of. Mortgage assignments—when done properly—are fully effective.

Sometimes you will be asked to deal with an entity that does not actually own your mortgage. These Servicers often act as an agent for the owner the same way a building manager would act for a landlord.  They accept payment, pay fees, manage legal affairs and sometimes seek foreclosures on behalf on another party. This is perfectly legal so long as they are acting within the scope of their authority and are upfront with you about their role.

In Maine, there can be complications when it comes to bringing a foreclosure if the ownership interest in your mortgage has been assigned (sold, transferred or otherwise given) by a party that did not fully own the mortgage. If you believe this has happened with your mortgage, you should seek legal advice immediately.

Why hire an attorney?

Before, during or sometimes even after a judicial foreclosure we can:

  • Analyze your options
  • Negotiate with your lender
  1. Repayment
  2. Refinance
  3. Forbearance
  4. Temporary changes to your obligation such as a reduction in interest rates
  5. Modification of the mortgage
  • Discuss a sale of the property to satisfy the obligation.
  • Help you decide whether bankruptcy protection would be in your best interest.
  1. Often times a person is overwhelmed by debt that no matter how much (s)he wants to honor her commitments,
  • Handle all paperwork on your behalf.
  1. Sometimes the paperwork is worse than the foreclosure.  The mountains of paper can be addressed by our staff under the supervision of an attorney.
Foreclosure scams

Digging out from default on your mortgage isn’t going to be easy. But that’s not a reason to give up hope. But if the solution sounds too good to be true, it probably is.  There are criminals who use this time of crisis to exploit unsuspecting homeowners.  You may hear from someone offering to repair your credit or save your home.  As a general rule, do not agree to anything, and do not sign anything, until you can talk to a lawyer or reliable housing counselor.

But how will I tell who is trying to help and who is trying to cheat me?

First off, legitimate third parties (that is, not your mortgage servicer or lender) such as attorneys or housing counselors, will not be calling you. We only become involved with a potential client when that homeowner calls us. A scammer will probably contact you or advertise in a newspaper or on the internet.

Sadly in some cases, even “reputable” attorneys are violating their client’s trust.

  • Do not sign papers without reading and understanding them (or asking for help from someone you trust to read and understand them);
  • Do not pay money for services that are not clearly defined and written in an agreement;
  • Do not sign blank documents to be filled in later.

For more information visit the Federal Trade Commission’s website.

Steps to Get help
  1. Identify Your Situation
  2. Explore programs for which you might qualify
  3. Prepare what you will need
  4. If you can’t manage the process, seek help as soon as possible. An attorney is often the best choice but there is free help available as well.
Mediation

In Maine a homeowner can Answer the Complaint with a request for Mediation.  If so, the parties do not go to court but rather meet with a trained mediator to attempt in good faith to resolve the issue without going to trial.

Mediation generally consists of:

  • An Information session which allows the homeowner to understand the process from start to finish.
  • Meditation between the parties seeking to resolve the issues to reach a mutually agreeable solution.

Additional mediations can be held to further explore possible solutions that require more analysis, investigation or submission of documents (usually financial information from the homeowner).

In Maine mediation is often between a homeowner and a lawyer representing the lender or servicer. While a homeowner may have an attorney, homeowners often represent themselves.

Documents to review and keep current (as time goes by the dates need to stay recent)
  • Mortgage documents (the actual “deal” that was signed)
  • Tax returns (at least for the latest two years). If you are planning to submit these as legal documents, if they have been electronically filed, also provide the IRS e-file Signature Authorization form. You may be asked to add your signature to the electronically filed document;
  • Pay stubs for at least 2 months;
  • Bank statements from all of your accounts;
  • All mail from the lender/servicer;
  • If you have a business or home-business Profit and Loss Statement for the most recent quarter and showing your year to date totals;
  • If you receive Social Security or Disability Benefits, please provide a copy of your most recent benefit statement or award letter stating the amount, frequency and duration of the benefit;
  • Legal documents, if any, showing the amount, frequency and duration of CHILD SUPPORT OR ALIMONY;
  • Provide copies of all rental or lease agreements and evidence of at least 2 months rent;
  • If you pay property taxes and/or property insurance, and it is not part of your monthly mortgage payment, please provide a copy of your recent property  tax statement and a copy of your Homeowner’s policy’s Declarations Page;
  • Copies of your most recent utility bills – with property address, showing your service address, billing address and account number.
Settling before trial

Sometimes even when they negotiate in good faith and provide all the relevant documentation, homeowners and lenders (or their agents) cannot settle the matter before going to trial.

  • The Litigation process
  • Notice of Default
  • Right to Cure
  • Summons & Complaint
  • Mediation
  • Motion for Summary Judgment
  • Pre-trial Conference
  • Trial
  • Judgment by Court
  • Right to Redemption
Right to Cure

In Maine a homeowner has a right to cure the deficiency of their mortgage arrears—in other words a right to pay what is owed to get back to being current with mortgage payments. In order for this right to be meaningfully exercised, lenders must tell you how much you owe and how to pay it. Often homeowners know they are in default on their payments but cannot cure the deficiency so the notice of a right to cure is merely a procedural hoop a lender must jump through.

Acceleration clauses

Usually the path to Foreclosure begins with a mortgage note’s “acceleration clause.” The initial agreement signed to secure the loan most likely required you to make a certain payment every month for a fixed period. When there is a default—a failure to pay as promised—lenders can seek to recover just the one missed payment or can activate an “acceleration clause” written into the note allowing it to seek the entire remaining loan balance (that is all the money you ever have to pay under the agreement). If the lender does not seek to activate the acceleration clause and have the entire amount due, it is usually impractical, or in some cases legally impossible, to seek foreclosure.

Preventing Foreclosure

The Home Affordable Modification Program (often simply called “HAMP”) provides a mechanism for homeowners to have a “re-do” of their mortgage in light of their current financial situation. Not all mortgages are eligible for HAMP but almost all lenders will consider a request for a modification similar to HAMP.

Often major lenders have official, though not required, processes to provide such relief.  We can help you determine whether you qualify for a program and whether the lender has complied with the requirements.

Foreclosure Diversion Program

Maine’s Foreclosure Diversion Program (FDP) provides homeowners in foreclosure a chance to explore other options besides losing their homes.  In mediation both parties, with the help of a neutral mediator, talk about whether it is possible to avoid a foreclosure on the property.

When a homeowner lives in the home and the property has no more than four units a homeowner in foreclosure can request mediation.   All requests for mediation must be in writing and given or sent to the Court Clerk. A copy of the request must also be given or sent to the attorney for the lender.  Homeowners can request mediation by using the one-page Answer form attached to the foreclosure complaint, by filing an Answer without the form, or by writing a letter to the court to ask for mediation.

Gather your paperwork

No matter where you find yourself in a possible foreclosure action you will need to know the state of your financial affairs.  And if you are dealing with an attorney, a lender or servicer, a court or a mediator, you will need to be able to show what your financial picture looks like.  In most cases your documents speak for themselves but if not, an attorney can help you explain what your real financial situation is.

Preventing Foreclosure

Lenders must comply with Maine’s foreclosure statutes. Having an attorney involved gives a homeowner a chance to catch paperwork that was faulty and therefore will cause the lender to start over again or, in some cases, may prevent a foreclosure from ever being finalized.

The foreclosure Process in Maine

Presumably, a homeowner has defaulted (failed to pay their mortgage as required) and hopefully is aware of the default.

A lender must offer the borrower an opportunity to cure the default (the failure to pay). Therefore, the process is usually begun with a letter that is a Notice of default and Right to Cure to a homeowner providing the amount overdue and granting 35 days to pay that amount.  This ability to cure is a statutory right for Mainers and must be strictly complied with before a lender may seek foreclosure

If the homeowner does not make the payments as required, the lender will likely file a Complaint—the beginning of a lawsuit—with a court near the homeowner. The lender must serve this Complaint, along with a Summons (which a command from a court to the homeowner to appear). Once served, a homeowner is on the clock and needs to determine how to defend the suit quickly. Usually some answer to the Complaint is required within 20 days.

Routinely, the Complaint is answered by a request for Mediation. Mediation is a process of meeting with a person trained to streamline issues for court and to seek a resolution. While the mediation is ongoing, the trial is postponed. If the mediation does not achieve a solution, the case is scheduled for trial.

  • Do you want to stay in the house?
  • Do you have money to pay for it?
  • What is the benefit of mediation?

These are just some of the questions we can answer for you.  Call us today at (207) 786-0311 for a free telephone consultation.

Our Three Locations

Lewiston

472 Main Street
Lewiston, Maine 04240

Topsham

2 Melcher Place
Topsham, Maine 04086

Yarmouth

305 Main Street
Yarmouth, Maine 04096

Lewiston

472 Main St
Lewiston, ME 04240

Topsham

2 Melcher Pl
Topsham ME 04086

Yarmouth

305 Main St
Yarmouth, ME 04096,

DISCLAIMER:   This website is not, nor is it intended to be, “legal advice”.  While a great deal of care has been taken to provide accurate, current and unambiguous information, it should not be used as a substitute for the advice of a lawyer.  Contact us if you have any questions or concerns regarding a particular issue.