How long will it take to resolve a foreclosure suit? How long will it take to attempt to accomplish reasonable foreclosure defense litigation objectives? On average, our office has historically seen the process take around 18 months from the filing of a suit to resolution of the same. A side effect of defending a foreclosure suit is time. Time is often your friend. The longer the foreclosure suit takes, the more pain the lender suffers, and the more likely the lender will realize that it should cut a deal. We are also seeing increases in the time involved in attempting to resolve a foreclosure suit by short sale in that the lender appears to believe that it can get more for the property by taking it back and selling it themselves, than what short sale purchasers are willing to pay. On top of this, the lender’s decision-making is greatly dependent upon or primarily driven by what works out best for the lender’s balance sheet. Such factors often include, how the loan was financed by the lender, what the lender paid for the loan, whether there is mortgage insurance, what triggers the mortgage insurance to take effect, etc. These internal lender factors often change so that what works one month or one quarter, does not work next month, and vice versa. In all of this, don’t lose sight of the primary goal, the reason to defend a foreclosure suit is to get an agreement with the lender to refrain from pursuing a deficiency judgment / to cancel the promissory note in exchange for the property or its equivalent value through a short sale, assuming the borrower is upside-down in the property.
Another set of factors that contribute to the length of time involved in resolving a foreclosure suit is that court system is clogged and that the plaintiff, “the lender” in a foreclosure suit, is largely responsible for the pace of the litigation. When the attorney for the lender, or the in-house attorney for the lender is ready to deal with a file or has recently reviewed a file, that is the time that deals are struck.
A recent development that concerns the time involved in resolving a foreclosure suit is the implosion of several firms that represent the lenders; David Stern’s office and now Ben-Ezra & Katz. This not only causes problems for those cases that are no longer going to be handled by those firms, but the foreclosure cases pulled from these firms must be sent elsewhere. We have a number of files that have sat for six or eight months awaiting new counsel to appear on behalf of the lender. It also takes time for the remaining foreclosure plaintiffs firms to ramp up, hire attorneys and staff, and to figure out the status of the cases recently transferred to the new firm. All these factors will certainly contribute to longer timelines in the foreclosure defense arena going forward.
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Defending a foreclosure suit can provide not only legal leverage but also time to get a loan modification, to conduct a short sale or to avoid a deficiency.Learn More
A deficiency judgment can last up to 20-years unless paid or otherwise resolved. A deficiency judgment can be a lien on all non-homestead real estate and other assets.Learn More
Even if you perfectly “qualify” the lender does not have to modify your particular loan. Lenders cannot modify everyone’s loan; it’s simply not economically feasible.Learn More
Short Sale Consulting
Castle Law Group helps clients decide if a short sale is right for them by explaining the risks and potential rewards relative to our clients’ unique financial situation.Learn More
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