Court Foreclosure Moratoriums And Loan Workout Plans

By Author: Nick Adama
Total Articles: 197
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A lot of foreclosure victims seem to have a false idea of what a foreclosure moratorium is. Many seem to think there is a nationwide moratorium that is eliminating foreclosures, while others think that the government is bailing everyone out of foreclosure. These two thoughts couldn't be further from reality.

If you are facing foreclosure, please don't expect Obama to save your property! More foreclosures are happening each and every day; while foreclosure victims think their lender is trying to get them a workout plan, their home gets taken away right out from under them.

If you are expecting your servicer to approve a modification or bailout, you need to make sure you have a back up plan for when theydeliver the bad news! And that's assuming they are even doing anything for you in the first place. Many lenders tell you they are "working" on your case, while they quietly continue foreclosing on your home. This is a drastic problem and foreclosure victims need to wake up and smell the coffee!

Foreclosures are still increasing in many areas and because of this, many families are being left on the streets. ...
... As local governments realize Obama's bailout plan isn't working, they are allowing officials to enforce their own foreclosure rules and moratoriums.

Federal moratoriums are not a mandatory requirement. In some cases, only certain loans qualify for the moratorium. In others, the lenders are only asked to honor the requirements, but no laws or rules are forcing them.

When a local court or government passes a moratorium, it usually applies to all foreclosures in that particular district.

Many of the top lenders have voluntarily agreed to these moratoriums, even when it was not required of them by law, but for the most part, the moratoriums have ended and lenders are back to foreclosing on properties in full force.

Foreclosure moratoriums have been tried, sporadically, over the last 12 months.

Different lenders, courts, or government agencies have determined that it may help. Actually, these moratoriums are not doing much of anything to help stop foreclosure. They are simply putting off a problem until a few months later; as we all know, procrastination is never a good thing. Local courts seem to be following the federal government's model, by starting with a 90 day moratorium and expecting homeowners to stop foreclosure before this 90 day period ends.

The problem with this idea is that no one really knows what to do to stop foreclosure. Foreclosure victims think the government is helping them, so they sit back on do nothing. Lenders don't realize what to do either, so they are just letting everyone apply for a modification, while giving them false hope that they will get the mod.

Today, one thing is fearfully evident, the only people finding help are those who take action on their own and forget about bailout plans and moratoriums! Those who find their own way out of foreclosure or hire a professional to help them are saving their homes at a much higher percentage rate. In fact, many loan modification companies have success rates well above 90%. This is much better than the 20% success rate our government may one day achieve.

Others are still losing their house just as swiftly as before; even faster in most cases, because court systems and lenders are now streamlining the foreclosure process. There are so many foreclosure cases that foreclosure victims are no longer getting a impartial trial. Some courts are rushing through foreclosure cases in just a few minutes per case. Proper proof of foreclosure is no longer mandatory and the foreclosure victims never even have a chance without a lawyer to protect them.

Originally it was though that a moratorium would provide victims enough time for the government to offer a loan mod plan, but now we all realize that the government's idea of a bailout doesn't really benefit the average homeowner. I think it's common sense that procrastination is never a goodthing and that's basically what these moratoriums were. As an alternative to coming up with an actual solution, it was easier to put the problem off for 90 days.

The scary part of a moratorium is that it gives the foreclosure victim a false sense of wellbeing. They think everything is going to be ok; in reality, after the moratorium ends (most moratoriums last 90 days) the foreclosure process will proceed as if it never stopped. In some cases, the foreclosure process even continues during the moratorium and the sale happens almost immediately after it ends.

If you are fortunate enough to have a foreclosure that has been paused by a moratorium, the don't waste any time finding a solution, so your property is not lost when the moratorium runs it's course! Use this time wisely to recover from your financial hardship, or to employ a professional to negotiate the terms of a loan modification with your lender.

There are many ways to stop foreclosure, but remember, a moratorium is not one of them! Unless the foreclosure situation is settled during this time, the home will be sold when the moratorium ends.
Nick writes for the ForeclosureFish website, which gives homeowners the information and resources they need to avoid foreclosure on their own and fight back against the bank's lawsuit. The site describes various methods to save a home, including foreclosure refinancing, deed in lieu, loss mitigation, stopping a trustee auction, bankruptcy, and more. Visit the site on the web to read more about how you can avoid foreclosure and eviction, repair your credit, and establish a long term financial plan once a financial crisis is over: http://www.foreclosurefish.net/