Is Mortgage Foreclosure Avoidable?

Since the housing crash, I have tried to help homeowners seek mortgage modifications, one of several options to avoid a foreclosure. Unfortunately, the process is extremely time-consuming. Most mortgage modifications take a year to complete. It usually doesn’t make financial sense to hire a lawyer to help you get a modification. However, in Maine, when a lender files a foreclosure lawsuit, homeowners are legally entitled to mediation. This is where hiring counsel who is experienced in mediation is useful.

I am J. Scott Logan, and I have the knowledge to help you use the mediation process to fast track your loan modification application. As one of only two bankruptcy lawyers in the state who have been court-appointed mediators, I have the knowledge to help you use the mediation process to expedite your loan modification application. Seeking a loan modification in the context of a foreclosure mediation can achieve the results you are seeking in a fraction of the time and at a fraction of the cost. If modification fails, we can also consider filing Chapter 13 to get rid of a second mortgage and/or get caught up with the first mortgage over up to five years.

What Are My Foreclosure Options?

You do not have to face the dread of losing your home alone. Speaking openly and honestly with an experienced attorney as soon as possible can help you make sound decisions. You may not realize that you have several options for avoiding foreclosure, including:

• Reinstating your mortgage – You will not need your lender’s approval to request a reinstatement of your mortgage. You ask your lender to provide for the total amount you owe on your mortgage to date and pay it. In Maine, you may reinstate your mortgage up to the very day before a final foreclosure sale.
• Repayment plan or forbearance – You may negotiate with your lender to pay your current mortgage plus an agreed-to sum of the back payments until you are caught up on the amount you owe.
• Modifying your mortgage  – Mortgage modification involves pursuing a lower monthly payment by looking to reduce your loan’s interest rate or principal balance or the length of the loan.
• Renting your property – Rental property is at a premium in Maine and your mortgage payment may be low enough that renting out your property could cover your monthly mortgage.
• Deed-in-lieu of foreclosure – Also known as a “friendly foreclosure,” or giving the property back to the bank. You may wish to vacate the property and get your lender’s approval to return the property to them rather than go through foreclosure.
• Bankruptcy – If eliminating your credit card payments, personal loans and other debts through bankruptcy discharge means you will be able to pay your mortgage, then filing for bankruptcy may be a good solution.
• Refinancing your mortgage – If you have built enough equity in your property and your credit is still in reasonably good standing, you may qualify to refinance your mortgage.
• Selling property – You may wish to speak with a qualified real estate who has foreclosure experience to list your property for sale.
• Pursuing a short sale – If you owe more on your property than it is worth, a short sale may be a viable solution. You will need to get your lender’s approval to complete a short sale.
• Cash for keys – Often I can help you obtain a few thousand dollars for relocation expenses in exchange for your cooperation in the foreclosure process.

Frequently Asked Questions About Foreclosure

When facing foreclosure, you likely have many questions about the process and your rights. As your Portland foreclosure attorney, I am here to help you navigate this challenging time. Below are answers to some frequently asked questions about foreclosure in Oregon. Remember, every situation is unique, so it’s important to consult with a lawyer for personalized advice.

How does bankruptcy affect foreclosure?

Filing for bankruptcy can temporarily stop foreclosure proceedings. This is called an “automatic stay.” The automatic stay goes into effect as soon as you file. It prohibits your lender from taking further action against you, including continuing with the foreclosure.

This break in the action can provide you with time to:

• Catch up on missed payments
• Negotiate a repayment plan with your lender
• Explore other options to save your home

It is important to remember that bankruptcy does not automatically eliminate your mortgage debt. However, it can provide a path to get back on track and potentially save your home.

What are the consequences of foreclosure?

Foreclosure has serious and long-lasting consequences. It is crucial to understand these consequences before deciding on a course of action. Here are some of the potential outcomes:

• Loss of your home: This is the most obvious and immediate consequence of foreclosure.
• Damage to your credit: Foreclosure can stay on your credit report for up to seven years, making it difficult to obtain loans or lines of credit.
• Deficiency judgment: If the foreclosure sale of your home does not cover the full amount of your mortgage debt, your lender may be able to obtain a deficiency judgment against you for the remaining balance.

Facing foreclosure can feel overwhelming. I can explain these consequences in detail and provide guidance tailored to your situation.

Can I stop foreclosure once it’s started?

Yes, it’s possible to stop foreclosure even after the process has begun. Some options include:

• Loan modification: Negotiating with your lender to change the terms of your mortgage
• Reinstatement: Paying the past-due amount plus any fees to bring your loan current
• Short sale: Selling your home for less than the outstanding mortgage balance
• Deed in lieu of foreclosure: Voluntarily transferring ownership to the lender

Time is of the essence when facing foreclosure. The sooner you take action, the more options you may have available. I can help you understand which strategies might work best for you.

Will I still owe money after foreclosure?

In Oregon, whether you’ll owe money after foreclosure depends on several factors:

• The type of foreclosure (judicial or non-judicial)
• Amount owed on the mortgage versus the property’s sale price
• Whether the lender pursues a deficiency judgment

In some cases, you may be responsible for the difference between what you owed and what the property sold for at auction. However, Oregon law provides certain protections against deficiency judgments in non-judicial foreclosures.

Let me help you understand your potential liability and explore options to minimize or eliminate any remaining debt after foreclosure.

Solutions With Confidence

At the Law Office of J. Scott Logan, LLC, I offer free initial consultations so you can learn more about how an attorney can help you navigate the various pathways to avoiding foreclosure. Call my office in Portland at 207-613-8590 or send me an email to start the conversation.