Mortgage Foreclosure Defense
We save homeowner's properties from foreclosure by filing bankruptcy and civil lawsuits on behalf of our clients.
Foreclosure Defense Lawsuits
We have successfully forced the cancellation of hundreds of foreclosure sales for homeowners on the brink of foreclosure. Through lawsuits filed in California Superior Court and Federal Court we assert borrower's legal rights and obtain the best possible outcomes for homeowners. As a result of the litigation process, many borrowers are able to obtain new loan terms that are often more affordable than their previous mortgage. We have a track record of success in obtaining temporary restraining orders (TRO) against mortgage lenders improperly proceeding to foreclosure sale without giving borrowers their due rights. While not all problem mortgages can be resolved through litigation, oftentimes, these cases are settled with homeowners obtaining a modified loan in exchange for dismissing the litigation.
We also assist homeowners in negotiating non-traditional mortgages and loans with usurious interest rates disguised as real estate option contracts, and other similar deceptive schemes. Many times, a distressed mortgage can be resolved in a few weeks or months. However, sometimes, borrowers are stuck in the midst of battle with a lender lasting many years. We routinely and successfully engage in litigation and negotiation with mortgage lenders over periods of many years, and have a track record of success in dealing with long-time problem mortgages.
Homeowner's Bill of Rights (HBOR)
We save homeowner's properties from foreclosure by filing bankruptcy and civil lawsuits on behalf of our clients. In response to the mortgage foreclosure crisis, California enacted the Homeowner’s Bill of Rights (HBOR) on July 11, 2012, instituting a breadth of legal protections for homeowners facing foreclosure. [new]
If your lender is attempting to wrongfully foreclose on your property, and violating your legal rights with respect to foreclosing or modifying your mortgage, we can file a lawsuit to uphold your legal rights in court. We file lawsuits to stop wrongful foreclosure sales and enforce homeowner’s statutory rights under California’s Homeowners Bill of Rights. [new]
As of January 1, 2021, California’s updated HBOR provides for the following (and more):
Key provisions include:
Notification of foreclosure-prevention options: Your servicer must try to contact you at least 30 days before starting the foreclosure process to discuss your financial situation and explore your options to avoid foreclosure. Your servicer can then start the foreclosure process by recording a notice of default in the county where your home is located, and will then send you a copy within 10 business days. Within 5 days of recording a notice of default, your servicer must generally give you information about options to avoid foreclosure that may be available. (Civil Code sections 2923.55, 2924.9)
Guaranteed single point of contact: If you ask for a loan modification or other foreclosure-prevention option, your servicer must assign you a specific person or team who can walk you through application requirements and deadlines, knows the facts and status of your application, including missing documents needed to complete your application, and can get you a decision on your application. (Civil Code section 2923.7)
Acknowledgment of application: If you apply for a loan modification, your servicer must notify you within five business days of any missing information, other errors, and deadlines for completing your application. (Civil Code section 2924.10)
Restrictions on fees: You cannot be charged a fee for applying for a loan modification. You cannot be charged late fees while your servicer is making a decision on your completed loan-modification application, while you are making timely payments under an approved modification, or while a denial is being appealed. Your application is "complete" once you submit all required information within the servicer’s reasonable deadlines. (Civil Code section 2924.11)
Restrictions on dual tracking: Your servicer must generally pause the foreclosure process while it is making a decision on your completed loan-modification application and until after it gives you time to appeal a denial. It also cannot foreclose on you while you are complying with the terms of an approved loan modification, forbearance, repayment plan, or other foreclosure-prevention option. (Civil Code sections 2923.6, 2924.11)
Denial rights: If your servicer denies your loan-modification application, it must state its reasons and identify other possible foreclosure-prevention options in writing. It must also give you a chance to appeal the denial. You may submit a new loan-modification application if you have had a material change in your financial situation since the last application. (Civil Code section 2923.6)
Transfer rights: If your servicer approves a loan modification or other foreclosure-prevention alternative and then sells or transfers your loan to another servicer, the new servicer must honor that foreclosure-prevention alternative. (Civil Code section 2924.11)
Verification of documents: Your servicer must review certain foreclosure documents to make sure they are accurate, complete, and supported by reliable evidence about your loan, your loan’s status, and the servicer’s right to foreclose. (Civil Code section 2924.17)
Tenant rights: Purchasers of foreclosed homes must give tenants at least 90 days before starting eviction proceedings. If the tenant has a fixed-term lease that was entered into before the foreclosure sale, the new owner must honor the lease unless certain exceptions apply. (Code of Civil Procedure section 1161b)
The Homeowner Bill of Rights generally applies to first-lien mortgages on owner-occupied homes that have no more than four units, and the protections above generally apply if your servicer foreclosed on more than 175 homes in the last year.
Phantom Junior Mortgages
Starting in or about 2000, mortgage lending standards and interest rates dramatically decreased, industry-wide, leading many borrowers to take out mortgages that they could not afford. In the years thereafter, the failure of several high-profile institutions, including Countrywide Mortgage, Washington Mutual and Indy Mac Bank caused many of these sub-prime mortgages to be transferred to other investors and lenders. The assets of these institutions, including mortgage-backed securities (MBS), were sold to larger banking institutions and other investors for pennies on the dollar.
During and after the great foreclosure crisis of 2008, many homeowners stopped receiving statements from their mortgage lenders for their junior trust deeds and many homeowners were advised that these loans had been charged-off. However, starting just recently, lenders and investors have started revived these forgotten junior mortgages, and have begun sending borrowers statements again with over-blown demands for full payment. Many borrowers receive start receiving statements after they have received no statements and had no contact with their lender for ten or more years. If borrowers are unable to pay years of mortgage arrears and interest in a short period of time they face foreclosure.
Both state and federal law provide legal protections for recently revived mortgages such as these, and solid legal protection for residential mortgage borrowers being charged mortgage interest while they are not receiving regular monthly statements.
We have successfully negotiated many of these sleeper loans for our clients, obtaining favorable modifications or workouts to these loans, and even cancellation. If you have recently received a statement from your lender for the first time in years, call today to see if you qualify relief.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows homeowners to stop the foreclosure process, and gives them the opportunity to repay mortgage arrears according to a three to five-year, court-approved repayment plan. Click here to learn more about our Chapter 13 Bankruptcy options.
If your mortgage lender has wrongfully instituted foreclosure proceedings, or is engaging in illegal tactics to deny your rights under California’s Homeowners Bill of Rights, or is otherwise preventing you from having a fair opportunity to apply for loan modification, we can help!