Options to Deal With Mortgage Distress and How to Evaluate Your Alternatives
This blog is intended to share the most frequent alternatives that many home owners have to address their mortgage distress. The key to any home owner who has not been making payments on their home loan is to develop a plan of attack in dealing with their situation. This plan of attack should take the following form:
- First and foremost identify the strengths and weaknesses of their current position. This involves a legal assessment as to what rights and obligations the borrower / homeowner has concerning their promissory note, deed of trust, and foreclosure (both judicial and non-judicial)
- Address deficiency liability and tax liability that may arise.
- Look at alternatives using deficiency liability and tax liability as your standard of measurement.
- Rank your alternatives from most favored to least favored (again using deficiency liability and tax liability as your standard of measurement).
- Begin by attempting to implement your most favored alternative. If that ceases to be an alternative then pursue your next best alternative. Continue following this process until you settle on an alternative that works for you. Then and only then will y0u have the satisfaction of knowing that you got the best possible alternative available under the circumstances.
I strongly encourage you to seek the assistance of a California licensed attorney in working through this analysis. If you choose not to then you bear complete responsibility for the consequences of your own analysis. Also, understand that the way things play out for one home owner is not necessarily the way things will play out for another. Looking at the way things played out for one home owner and believing that things will work out the same way for you is called comparative reasoning. Comparative reasoning leads to bad decision making. Don’t do it. Develop an understanding as to what legal rights and obligations you have (both as to deficiency liability and tax liability) and do your own analysis (preferably with the assistance of an attorney).
Future posts will help clarify this approach. But first, I must draw your attention to a very important disclosure.
The information contained within this blog is not intended to be interpreted as legal advice nor is it intended to operate as a substitute for a one on one consultation with an attorney in your State. Every home owner is different. The things that vary from home owner to home owner include: The number of loans encumbering the property; the identity of the lenders with loans encumbering their property; the number of properties the home owner owns; the wording of the loan documents; the wording of the deed of trust, the type of foreclosure the home owner may be experiencing (if applicable); the representations the home owner may have made to their lender, etc. All of these things can and do affect the home owners’ rights and obligations. Through this blog I simply do not have the benefit of time for a one on one consult to study all these aspects of any one home owners’ case. Moreover, there is no expectation of privacy on a public blog so you should not share confidential private information on this blog.
With the foregoing in mind nothing within this blog is intended to operate as specific legal advice; neither expressed nor implied. To the contrary, I strongly encourage anyone encountering mortgage distress to consult with an attorney. Only a California licensed attorney with experience in secured land transactions who has had the benefit of time and access to a client’s paperwork can intelligently and credibly provide a client with any meaningful legal advice.
The information contained within this blog is for general informational purposes only and is intended to help refresh a client’s memory as to any in office meeting they may have had with me. If you have not met with me then you may find the information contained herein to be helpful to developing an understanding as to how a foreclosure works and what rights and obligations you may or may not have. But you are assuming the risk of the outcome of your situation should you choose to not consult with an attorney.
Attorney Enochs is only licensed to practice law within the State of California. The information discussed within this blog is only intended to apply to property located in California. The location of the property and the location of the borrowers could influence the applicability of the information contained herein to your individual situation. This is another reason why it is important for you to seek the assistance of an attorney.