MORTGAGE FORECLOSURES: THE MOST SERIOUS CHALLENGE TO MUNICIPALITIES THROUGHOUT THE UNITED STATES
Websites such as StopForeclosureForms.com offer considerable benefit to metropolitan areas and States that have been severely hurt by the foreclosure epidemic. Foreclosure costs extend far beyond the basic issue of paying off a secured debt. The costs to communities can be considerable. The proliferation of empty, and sometimes boarded-up residences, adversely affects home values, quality of life, safety, and the tax base of communities throughout the United States. The financial and other burdens that foreclosures impose upon local tax payers and area residents, though frequently difficult to quantify, are acute. The solution to these societal threats caused by foreclosures must include efficient and cost-effective legal forms that offer homeowners with mortgage arrears and/or facing foreclosures with tools for saving their homes. By providing access to easy-to-use foreclosure defense forms, our website plays a vital role in the nationwide battle to save families and communities from the foreclosure epidemic so severe that it has been frequently described as the modern-day plague. The legal forms that provide defense against foreclosures include kits that enable homeowners to request modification of their mortgages, permission to sell their properties, and other forms of relief. In addition, homeowners who are already facing foreclosure litigation must have access legal forms, such as Answers to Foreclosure Complaints, Motions to Dismiss Foreclosure Cases, and Motions to Stay or Cancel Foreclosure/Sheriff's Sales. We offer all of these forms, with the hope that homeowners in distress will be able to incorporate these forms into their fight to save their homes.
The availability of low-cost legal forms is particularly important because it enables consumers to effectively defend against abusive lenders. Answers to Complaints, Motions to Dismiss, and Motions to Stay Foreclosure Sales are particularly effective tools in cases where a homeowner has been exploited by unethical lenders, and has been saddled with exorbitant interest rates and unfair contractual terms. With foreclosure on the rise, and strong indications of further increases during the next several years, the availability of legal forms for homeowners facing foreclosure constitutes a vital part of the solution to America's greatest challenge since the Great Depression.
By: Marc A. Rapaport, Esq.
Marc Rapaport is an attorney in New York City. He is the founder of Rapaport Law Firm, PLLC., He is also the Founder and President of Empire State Legal Forms, Inc., America's Premier Provider of Legal Forms for Consumers.
FIVE REASONS WHY IT IS EASIER THAN YOU THINK TO GET YOUR LENDER TO APPROVE YOUR REQUEST FOR A LOAN MODIFICATION OR SHORT SALE
The number of residential loan foreclosures that have occurred in the United States during the past twelve months is staggering. Sadly, many of the homeowners who have lost their homes could have avoided foreclosure if they had simply submitted a relatively easy-to-complete mortgage modification request to their lenders. Many people feel too overwhelmed to take action in the face of financial strain. Others are simply unaware of the opportunities that may be available for them to remain in their homes and avoid the catastrophic losses caused by foreclosure.
Most people are unaware of the simple fact that banks are highly motivated to grant loan modification requests. Previously in my legal career, I handled residential mortgage foreclosures for three major banks. None of the banks that I represented actually wanted to foreclose on the homeowners to whom they had given loans. For the banks, the process of foreclosing on a loan was time-consuming, expensive, and -- even under the most favorable legal and economic circumstances -- put them in the position of paying thousands of dollars to gain control of an asset that they did not want in the first place. Believe it or not, your bank is far from excited about the idea of seizing your home. This has always been true, but even more so now that so many homes are "under water" (worth far less than the amounts owed).
Particularly when faced with financial pressure and stress, many people incorrectly assume that it is too late for them to approach their bank, or that their bank is so powerful that any effective negotiations would be impossible. These assumptions are false. For the following five reasons, banks are far more likely to approve requests for mortgage modifications or short sales than most homeowners assume:
(1) Banks Do Not Want to Own Homes. Banks do not want to be in the business of owning and controlling real estate. This was always true. However, this axiom is particularly true now - when real estate throughout the United States has depreciated quickly and precipitously. A bank would much rather have a performing loan rather than a depreciating piece of property. Moreover, with respect to adjustable rate (ARM) loans affected by interest rate resets, the amount of interest charged to homeowners can and should be reduced.
(2) The Willingness of Banks to Grant Loan/Mortgage Modification Requests Has Been Under-Reported. Banks have never actively promoted loan modifications because they want to encourage borrowers to remain current in their monthly payments. In its internal reports, Mortgage Bankers Association addresses the concern that by publicizing loan modification possibilities, lenders may destroy "borrower discipline." Therefore, banks and mortgage servicers have always downplayed the availability of loan modifications and the extent to which basic adjustments (adding missed payments to the end of the loan period; reducing interest rates; reducing payments; etc.) are frequently granted.
(3) Statistics Regarding Loan Modifications or Short Sales Are Unreliable and Inaccurate. Reports regarding the amount of help being given to borrowers through mortgage modifications or approvals of short sales are unreliable, and undoubtedly minimize the number of borrowers who have received such assistance. This occurs for a variety of reasons. One reason is that modifications and short sales are not reported on credit records, and thus are not known to companies, such as Moody's, that maintain statistics. Second, the calculus (cost-benefit analysis) that banks use in deciding whether to approve help to homeowners with arrears has changed dramatically during the past year. The current environment of quickly declining home prices due to job loss, over supply, and general economic deterioration, especially in some states (Ohio, California, Oregon, Florida, Nevada, to name a few) has made it far more likely for banks to approve help for homeowners in the form of modifying loans or approving short sales. Lenders are aware that with each foreclosure, they are exacerbating the real estate crisis.
(4) National and State Governments are Putting Pressure on Banks to Help Homeowners Avoid Foreclosure. Recent initiatives by Federal and State governments to assist homeowners are unprecedented. In increasing numbers, banks have pledged to develop plans for homeowners to avoid foreclosures. Given the severity of the economic crisis in general, and, particularly, the real estate crisis, the involvement and pressure of government is not likely to diminish. In fact, initiatives by the Obama administration suggest that the trend toward greater flexibility in mortgage modifications and short sales will continue.
(5) Courts Have Started Delaying and Stopping Foreclosures. Banks now face an entirely new set of challenges when they file court papers seeking foreclosure. In rapidly increasing numbers, courts throughout the United States are mandating that banks mediate with homeowners. Even worse for the banks and loan servicers, some courts have started refusing to grant judgments of foreclosure when banks are unable to produce original loan documents. Such documents are often unavailability to the institution that currently holds the loan because of the repeated prior transactions (assignments, sales etc.) of the loan. Consequently, lenders are no longer able to approach the legal process of foreclosure with the near certitude that they will be granted a judgment of foreclosure.
This website, www.StopForeclosureForms.com, was established with the idea that many homeowners could derive enormous benefit if they were given affordable access to the basic forms they need to save their homes.
Marc A. Rapaport is the founder of StopForeclosureForms.com and the President of Empire State Legal Forms, Inc. He is also a practicing attorney in New York City, where he runs a full service law firm, Rapaport Law Firm, PLLC