The real estate collapse of recent years has destroyed the hopes of many. People get the foreclosure notice, they panic, and they obediently do whatever the lender asks, including emptying their savings accounts.
A Warning About Banks
Banks are not your best friends. Sometimes the best thing you can say to them is No. There are people eating macaroni and cheese every night, but still making mortgage payments that are killing them. There is a better way. We have seen banks squeeze the last dollar from a homeowner's assets, giving them the false hope that spending down their savings would lead to a loan modification. They do this to families with medical emergencies, families who will wind up homeless after they have written their last check.
Banks have gone as far as telling people: "If you can't make the entire payment, send us what you can." Fact is, if you don't send them every dime on time, you are in default.
Big banks use tactics guaranteed to pull the last dollar from your pocket. It's time you fought back with some bold tactics of your own. Short sales and strategic default are two we employ to defend against foreclosure at Tom D. Waldron, P.A.
Foreclosure Defense #1: Short Sales
You own a $200,000 house whose value has fallen to $100,000. Your wife just lost her job, and you are staring foreclosure in the mouth. You have a potential buyer willing to buy the house for $100,000. You hire Tom D. Waldron, we negotiate a short sale, in which the bank releases the house for $100,000. Few people understand the bank can sue you for their losses anytime within the next five years.
Now, many banks, unhappy at settling for half a loaf, will want to send the IRS a 1099 statement, listing the forgiven $100,000 as income for you. You will have to pay tax on that money that you never had. We provide counsel to help you in deal with this kind of situation.
Foreclosure Defense #2: Strategic Defaults
You bought a house in a subdivision, putting down about 30 percent. The neighborhood is eviscerated by bad mortgages. Your home value plummets along with everybody else's, so your mortgage is now upside-down. Every time you make a payment, you are buying a house worth less than what you owe. The solution? Stop making payments.
With proper planning, the loss to you can be greatly reduced.
Beware of Mortgage Modification Attorneys
It sounds great. Talk the bank into letting you stay in your home, with payments spread out over 40 years. But mortgage modifications like this are actually very rare. You only see this kind of modification occur when a foreclosure has been ordered into mediation.
The sad truth is, every week I see people who are facing a foreclosure who have hired someone and pay them hundreds, even thousands, to negotiate a new deal, and get nothing for their money.
Lesson: Stop doing what your bank tells you and hire a lawyer who can map out a strategy that doesn't wipe out your assets. Call Tom D. Waldron — we will use the power of the strategic default to address your bad mortgage problem.