Alabama consumers often wonder why mortgage companies will lie about postponing a foreclosure. When we sue mortgage companies for doing this – and we have over 20 lawsuits dealing with this exact subject right now – the mortgage companies and their lawyers claim that there is no reason for them to lie about postponing an Alabama foreclosure.
Recently, I presented to a group of several hundred foreclosure defense attorneys at a national seminar. At this presentation, I discussed the reason that mortgage companies lie about the foreclosure sale date. Afterwards, several of the attorneys expressed to me that they found this information very useful. So, I wanted to share this useful information with the readers on our website as well.
An important point to remember is that (at least in Alabama and generally in other states) a homeowner has more options before a foreclosure than after the foreclosure.
For example, before a foreclosure the homeowner can cure the default. Curing the default may be difficult but perhaps, with family money or accessing retirement accounts or other assets, a homeowner may be able to bring the account current and stop the foreclosure.
Certain loan modification programs are available before the foreclosure, but we rarely see these work but they are an option.
A homeowner can file a bankruptcy petition and stop the foreclosure due to what is known as the “automatic stay”. While we do not generally recommend bankruptcy to deal with wrongful foreclosures, it certainly is a viable option and in some cases is the best option.
But after a foreclosure the homeowner can no longer file bankruptcy, can no longer qualify for a modification program (there is nothing to modify anymore) and can no longer cure the deficiency.
Instead the homeowner has the choice of moving out within 10 days of the foreclosure or forever losing the one-year right of redemption. The homeowner will also be sued for ejectment or eviction.
So, lets address our original question about why these mortgage companies lie about postponing a foreclosure.
The answer: The mortgage company lies about postponing a foreclosure because it does not want you to have the option of filing bankruptcy or curing the default. While the mortgage companies violently disagree with this, the truth is that mortgage companies make a lot more money when you are in default or when you go into foreclosure. When you cure a default, the mortgage company – specifically the servicing company – is deprived of many fees and profits which can be attained if you can be kept in default and even be pushed into a foreclosure.
When we sue for fraud we often point out that the purpose of the fraud is to take away the options that the homeowner has before the foreclosure actually occurs. Usually, fraud involves telling the homeowner that the foreclosure will be postponed if the homeowner will pay a certain amount of money or submit a loan modification package or do any number of things. When the homeowner does this, it is quite natural to believe the mortgage company and to be confident that the foreclosure sale has been postponed. However, the shock occurs several days later when the homeowner is told that not only has the mortgage company lied, but foreclosure has occurred, and all of the options which existed pre-foreclosure (including some of the governmental loan modification programs), are now ripped away from the homeowner.
It is not by accident or chance that throughout the nation and as well as throughout Alabama mortgage companies and servicing companies are continually and deliberately involved in a campaign of systematic fraud against homeowners in order to push these homeowners illegally into foreclosure so that the options that the homeowner has are greatly reduced or eliminated.
For more information concerning wrongful foreclosures in Alabama please feel free to call us at (205) 879‑2447 or contact us through our website
You are welcome to have our free book, “Stopping Wrongful Foreclosures In Alabama”.– just let us know you are interested and we’ll send it right out to you.