Due to a staggering economic slowdown and historic unemployment, many Ohio families are in a position where they are behind in their mortgage payments, or in some situations facing the very real possibility of a foreclosure action against them.
When faced with a foreclosure, or the threat of foreclosure, borrowers are typically overwhelmed by the prospect of losing their home and incorrectly conclude that there are no options available to resolve the issue with the mortgage company. This common mistaken belief is compounded by the fact that the borrowers rarely qualify to re-finance the obligation with a third party (due to the damage that has been done to their credit leading up to the foreclosure) and are almost always unable to pay off the mortgage in full.
In light of these options, borrowers will sometimes adopt an “ostrich defense” in which they ignore the proceedings altogether. This allows the mortgage company to obtain a default judgment against the borrower and shortly thereafter to schedule a judicial sale of the real estate. At the point that an order of sale is issued by the court, borrowers have no option but to pursue bankruptcy relief to protect their home. In the process, irreparable damage is done to the borrower’s credit even when the borrower is current with their other obligations.
However, many alternatives to bankruptcy are available to borrowers who take the initiative to work out a solution with the mortgage company when falling behind in their payments, even after a complaint is filed in a foreclosure action. Mortgage companies are generally willing to negotiate alternatives rather than move forward with a judicial sale that generates more costs to the mortgage company.
Loan modifications and short sales are just two examples of many solutions that a borrower working with a mortgage company can pursue. In addition to solving this situation privately, there are also many public alternatives available such as Legal Aid associations and the Save the Dream Foundation.
If you need to respond to a foreclosure action, or are behind in your mortgage obligations, feel free to contact us to discuss your alternatives and legal rights in detail. Generally, taking a proactive approach will yield a better long-term result.
Keywords:
order of sale
sheriff's sale
credit report
borrower
mortgage company
loan modification
workout
short sale
foreclosure
real estate
