An Experienced Mortgage Attorney Can Stop Your Foreclosure

Unresponsive Customer Service

Difficulty in reaching a knowledgeable and responsive customer service representative is also common and can lead to frustration, especially when you need immediate assistance or have urgent questions.

Mistakes in Handling Insurance and Tax Payments

Mishandling your insurance, property taxes, and escrow payments and disbursements is very common and often leads to the lender demanding that you make extremely large payments to catch up on what they claim are escrow shortfalls.

Unlawful Fees or Charges

Some mortgage companies may impose unauthorized fees, penalties, or charges on your account and refuse to explain or remove them.

Foreclosure Threats

Miscommunications or delays in processing payments can also result in unwarranted foreclosure threats, causing you significant distress for homeowners.

Loan Modification Denials

Mortgage companies may improperly deny your requests for a loan modification, even when you are facing financial hardship. This can be due to misapplication of strict eligibility criteria or administrative errors.

Inaccurate Loan Documentation

Errors in loan documents, such as incorrect loan terms or missing information, can lead to legal disputes and complications with your mortgage.

Loan Servicing Transfers

When loans are transferred from one servicing company to another, there can often be problems with the handoff. This can lead to errors regarding the principal balance, payment processing, escrow management, and communication channels. Often the new servicers do not give you credit for payments made to the previous servicers or has the wrong balance for your escrow account.



Dealing with these problems can be stressful and time-consuming for you. Seeking assistance from a qualified and experienced mortgage foreclosure prevention attorney can help you navigate these issues and give you an advocate for your rights.

What is Foreclosure?

Foreclosure is the legal process by which your mortgage company can sell or take your home or other real estate away from you. This usually happens if you don’t make your mortgage payments or otherwise don’t comply with the terms of your home loan, like maintaining insurance or paying the property taxes.

How Does the Foreclosure Process Work?

In Oregon, there are two kinds of foreclosures; judicial and non-judicial. Almost all home foreclosures are done non-judicially. This means that the mortgage company doesn’t have to file a lawsuit to foreclose but instead can just send you the required legal notices. Then, they can sell or take back your home without going before a judge for approval. 

The first notice is called a notice of default. It lists the reasons why the mortgage company is going to try to foreclose. It is followed by a notice of sale that sets a date when your house will be sold, usually on the steps of the courthouse. This has to be at least 120 days from when the notice is sent to you. 

You have the right to cure the default by catching up on your mortgage payments anytime up to 5 days before the sale date.



For some loans, after the notice of default you will get a letter from the Oregon Attorney General inviting you to participate in the Oregon Foreclosure Avoidance Program. You will have 30 days to respond. Do not miss this opportunity. The foreclosure will be delayed as you go through the program to see if there is a way to avoid the foreclosure.

How a Foreclosure Prevention Attorney Can Help

A foreclosure defense attorney can investigate the process used by the mortgage company and stop the foreclosure sale if it is really the result of errors by the mortgage company. This includes things like failure to send the proper notices, failure to properly apply payments or handle your escrow for taxes or insurance, or the mishandling a loan modification or mortgage assumption. 



They can also help by getting a Chapter 13 bankruptcy filed if the foreclosure sale is being handled properly or is coming up very soon. These are situations, for example, where you really are behind on your mortgage payments or if the sale date is so close that there isn’t time to stop the foreclosure sale any other way.

Legal Expertise and Guidance

There are many state and federal laws and regulations regarding mortgages. An attorney experienced with them can cut through this maze of laws surrounding foreclosure and find the best way to save your home before the sale date.

But it is absolutely critical to contact an attorney right away, as soon as your mortgage company starts the foreclosure process or you notice that they are making mistakes in handling your loan. This can be things like saying that you are behind on payments when you know you are not or telling you that you have to increase your payments substantially to cover escrow withdrawals that you believe were not right. 



Far too often we hear from people just weeks or sometimes even just days before the date set for the foreclosure sale. This limits our options on ways to address the problems.

Negotiations with Lenders

Often it may be possible to negotiate with the mortgage company to get time to resolve the problems, including additional time to refinance, sell or get a loan modification. Mortgage companies will sometimes agree to reschedule a sale date if they see that there is a path to resolution that won’t require a foreclosure sale.

Also, a foreclosure prevention attorney may be able to negotiate with your mortgage company if they failed to properly follow the legal process. Sometimes the sale date can be extended, giving you time to catch up on payments or do a loan modification or refinance, if your attorney can show them how they have failed to proceed according to the legal requirements.

Bankruptcy as a Tool for Prevention

Chapter 13 bankruptcy is often the solution when the foreclosure is legitimate and there isn’t any other way to stop the sale. The Chapter 13 allows you to reinstate the loan and cure the default over 5 years while resuming the regular payments. It also can give you the time to sell your home and save your equity even if you can’t afford to make the regular payments. We have saved many homes for our clients through Chapter 13 and have given many others more time to sell for a better price than they could get with the foreclosure sale hanging over their heads.

A Chapter 7 will also stop a foreclosure sale. However, it just isn’t as good as Chapter 13 because you don’t have the ability to reinstate the loan and just resume the regular payment.

Chapter 7 is only used in circumstances where you don’t have regular income and so can’t qualify for Chapter 13, but where you have more than enough equity to get your homestead exemption and still leave something for the trustee to distribute to other creditors.

The homestead exemption in Oregon is woefully inadequate: $40,000.00 for an individual or $50,000.00 for a couple. So Chapter 7 is used only when you are satisfied getting that amount or when there is so much equity that you’ll get more than that after the trustee pays themselves and all of your creditors.

In some cases, Chapter 13 can be used to delay a foreclosure while you go through one of the processes below.

Foreclosure Defense Strategies to Consider

There are several alternatives to a foreclosure. There are state and charitable programs that can help with payments. And lenders can also help with forbearance and loan modification options. If these do not work, it may be time to sell the house.

Loan Modification

The options for a loan modification usually need to be explored early in the process, just as soon as you start to get behind on your payments. However, it may be available even after you have missed a lot of payments. Sometimes, lenders may be willing to put missed payments to the end of the loan as part of a deal that includes a change in the terms like higher interest rates or a later maturity date.

Loan modifications have saved the homes of many people but they require that you be persistent and patient. So, if you get a letter advising you that it may be an option, you have nothing to lose by applying for it.



For some loans that must go through the Oregon Foreclosure Avoidance Program, you will have a third party mediator and in person meetings to work through the process. The foreclosure will be delayed as you go through the program to see if there is a way to avoid the foreclosure.

Forbearance Agreements

Sometimes the lender will agree to enter into a forbearance agreement. This can mean suspending your payments for a period of time. Usually in this situation, there are extraordinary circumstances like illness or loss of employment. Typically, the lender may add the missed payments to the end of the loan but often you are required to catch up on them at the end of the forbearance period. Another common situation is a loan modification at the end of the payment forbearance.

 

Sometimes, lenders will agree to a forbearance agreement for delaying the foreclosure sale to give you time to catch up on missed payments. Typically this kind of agreement requires that you continue to make the regular payments while paying something extra to catch up on the missed payments. 

Short Sale

Sometimes the best solution is for you to sell the house, even though there isn’t enough equity to pay all of the liens against it. This is usually when you can’t afford to make the payments and there are liens that you’d like to have at least partially paid, like federal tax liens or Oregon Distraint Warrants. Or, this is common where there are judgment liens that can be stripped off, either completely or partially, to allow you to get your homestead exemption. 



We have successfully made possible the sale of many homes that were “upside down" or “underwater”. So, if your house would only sell for less than the amount of all of the liens against it, please call us to see what options are available.

Deed in Lieu of Foreclosure

The Deed in Lieu of Foreclosure is a last resort when there are no other options to save your home or get equity out of it. The only advantage is that it could keep you from having a foreclosure on your credit history. It means simply that you agree to transfer your home to the lender to avoid foreclosure. It doesn’t happen very often because it only works when there are no junior lienholders like second mortgages, tax liens or judgments.

Oregon Homeowners Assistance Fund

The Oregon Housing and Community Services (OHCS) Homeowner Assistance Fund (HAF) can help homeowners who are in a difficult financial situation due to the coronavirus pandemic. As part of the American Rescue Plan Act of 2021, Oregon has received $90 million to help eligible homeowners avoid mortgage foreclosures and displacement, and to cure delinquencies and defaults. The HAF program can help homeowners through a Past-Due Payment Relief program and an Ongoing Payment Relief program, or a combination of the two. Please note that funds are limited and cannot serve all in need.

Go to https://oregonhomeownerassistance.org/program/ to get more information on how to apply and to learn if you may be eligible. Your local HUD housing counselor can help with the application.

Some of our clients have qualified for loans of up to $50,000.00 to cure mortgage arrears and make mortgage payments. These loans are forgiven over a 5 year period.

Oregon Foreclosure Avoidance Program

The Oregon Foreclosure Avoidance Program (OFAP) is a state-sponsored program aimed at facilitating communication and collaboration between homeowners and their lenders. It operates within the Oregon Department of Consumer and Business Services.

One of the key features of OFAP is its emphasis on mediation as a means of resolving foreclosure-related issues. The program provides a neutral platform where homeowners and lenders can engage in face-to-face discussions facilitated by professional mediators. This mediation process serves as an alternative to the traditional foreclosure path, fostering an environment where both parties can explore viable solutions. This approach not only helps you better understand their options but also encourages lenders to consider alternatives to foreclosure, such as loan modifications or repayment plans.

In most situations, the lender has to offer you an opportunity to participate in the OFAP. So, if you are behind on your payments and you get a letter from the Oregon Attorney General about the OFAP, be sure to reply and request the mediation. This is not a scam. This will give you a chance to delay the foreclosure while the lender is required to meet with you and a representative from the state to discuss alternatives.

The Benefits of Hiring a Mortgage Attorney

Hiring a mortgage foreclosure prevention attorney will help you keep your home. And the earlier in the process the better the outcome. There are many things that can impact your mortgage loan, including the contract, the lending source such as VA or FHA loans, federal regulations and state law. Even when you are protected by a federal or state law, you need advice on how to ensure those protection.

Preventing Foreclosure

We frequently help homeowners save their homes from foreclosure by filing Chapter 13. Usually they are able to resume their regular payments and, with the reinstatement of their mortgage, they are able to keep their homes. We have this situation come up all the time and have hundreds of clients comfortably living in homes that they would have lost if they hadn’t let us help them.

In many other cases, we have helped homeowners retain and recover the equity in their homes by stopping a foreclosure or stopping the judgment liens that were impairing their homestead exemptions. This allows you to sell and get the equity out of your house, even if you can’t make the payments or there are liens against your home on top of your mortgage.

In these situations, our clients have received tens of thousands of dollars of equity from their homes. Equity that they were on the verge of losing. Many were able to sell their homes even after they had been told it was impossible because of the judgment liens against them.

And in some cases, Chapter 13 stops the foreclosure and allows you time to explore the other options, like the HAF loan, before you have to pay the amount needed to bring your loan current over the 5 year Chapter 13 plan.

The sooner you call us, the better. We will have more options if we have more time to deal with your situation.

Straightening Out Errors in Handling Your Mortgage

We have also had many, many clients whose mortgage company made mistakes in handling their mortgage. Often, payments have been put into a suspense account instead of being applied to principal and interest. Other times, the mortgage company has tried to charge the borrowers for “force placed” insurance when the homeowner had insurance in place.

We have seen other situations in which the mortgage company wrongfully denied a loan modification or didn’t follow the rules for a foreclosure proceeding.

 

We have been able to straighten out the payment history and get the house off of the foreclosure sale list in many of these situations.

If You’re Facing a Mortgage Foreclosure Contact Us Today

The sooner you call us, the better. We will have more options if we have more time to deal with your situation. We may be able to get the mortgage company to postpone a foreclosure sale, process a loan modification or undo improper allocation of your loan payments.

If you wait until just weeks or even days before a foreclosure sale, you may be left with only a Chapter 13 to stop the sale.

If you are contacting the mortgage company yourself to try to work things out, do not accept an oral promise that the sale has been or will be postponed. This means nothing and must be in writing to be effective even if just an email. We recommend that you contact us at the same time you are reaching out to your mortgage company.

Homeownership is a major achievement for anyone who owns a home and usually a major goal for anyone who does not, but this advantage can quickly be lost if you get behind on your payments or if your mortgage company is making mistakes in processing your payments.

Don’t delay! There is absolutely no reason to take a chance on losing your home!!

Foreclosure Prevention Attorney FAQ's