Having your home foreclosed is an excruciating process. If it hasn’t happened to you, chances are you have a friend or family member who has.
I’ve been going through it since 2010 when OneWest Bank of California began trying to take my North Chattanooga home. I’ve learned many things in this process.
Since I first bought my house, I’ve dealt with a string of different banks and mortgage companies.
Through this process, I’ve learned a lot, and in this four-part series, I’m going to try to help you understand it, and try to show you the most effective ways to deal with a mortgage company and hopefully keep your home. This first part is my personal checklist I’ve developed on how to effectively negotiate with mortgage companies.
You have to understand that in order to keep your home, you need a strategy. Mortgage companies count on your ignorance. This list of methods makes up a comprehensive strategy which I learned the hard way.
I’m not an attorney, or an expert, so use this advice with care and at your own risk. Most of all I advise you to educate yourself. Dig up resources on the Internet, talk with others who have been in your situation, and read everything you can find about your specific mortgage company and circumstances. The more you know the more effective you will be as an advocate for yourself.
Foreclosure Defense Checklist
1) Take notes on everything.
Every time you talk with your mortgage company, take notes on everything they say. When you’re first connected, ask for the operator's ID number. Write it down, along with the date and time of the conversation. If they give you their name, write that down as well. I take notes on my computer because it makes them easier to find later, to email and to print.
2) Believe, but Verify
You can’t really trust your mortgage company. This is a hard lesson if you’re inclined to believe that corporations always follow the law (they don’t). Since the foreclosure run started in 2009, mortgage companies have been caught repeatedly breaking the law. Until you have something in writing, don’t believe or rely on anything a mortgage company operator tells you. Some of them are probably working and hoping for your best interest, but you have no way of knowing, and since you never get to speak with the same person twice, it’s always a crap shoot. One person will tell you something, two days later someone else will tell you the exact opposite. Until you sign a contract with your signature, nothing is real and nothing is set in stone.
3) Give them everything they ask for in a timely manner.
If you’re trying to keep your home, chances are you’re applying for a loan modification. In that case, you’re going to be sending them bank records, employment records, and many other documents. If you’re late, you can miss deadlines, and they can use that against you. Always give them EVERYTHING they ask for to the best of your abilities, ON TIME. If there’s something you can’t give them, tell them why and ask them what to do next.
4) Send documents via registered mail.
When you use fax to send documents, your only record is the fax log, and in my experience, mortgage companies are good at losing faxes. If you must send documents to your mortgage company, it’s best to send them via registered mail, and ask for a receipt with tracking number. Save these receipts, and make notes of what documents were associated with them, when you sent them, and who asked for them (By operator ID). I’ve experienced operators telling me that they hadn’t received documents, but then when I produced receipts for the delivered documents, they had to go back and actually do some research, and found my documents. If I didn’t have the receipts, I would have been unable to continue the conversation, and would have wasted time re-sending documents they already had. This rule doesn’t have to be hard and fast. If the representative you’re speaking with asks for another copy of something, it’s ok to fax it to them, as long as you’re able to verify with them on the phone that they received it. This can save time, but for big documents, like a 30-page loan modification application, send it via registered mail.
5) Keep copies of everything.
In my case, I saved everything on my computer as a PDF file. This makes the electronic documents easy to manage, to send, and to store. If you have a document which isn’t in electronic format, scan it, and save it as a PDF. Scanners are very cheap now, and will save natively as PDF. You must have copies of everything, and also be sure to put a date, time and the operator ID of the person who requested it on the document somewhere, and name the files in a logical way which will allow you to come back later and find one document out of many.
6) Ask for help – Non-Profits, Attorneys and People
There are a couple of non-profit organizations in Chattanooga who help people dealing with foreclosure issues. The one I’ve had the best experience with is Chattanooga-based Save America Homes. In operation since 2008, they have helped stop over 400 foreclosures in the Chattanooga area. This experience makes them a valuable ally in the fight to keep your home. Their website is SaveAmericaHomes.com and they can be reached at (423) 558-0393.
Foreclosure defense with an attorney is going to be another article, but it needs mentioning here. Peter Ensign of Ensign Title and Escrow is the only attorney I know of in Chattanooga who specializes in foreclosure litigation, and I encourage you to make an appointment to at least talk with him. He’s a foreclosure defense attorney with a proven method, who knows what he’s doing. His office number is (423) 510-0410. Attorneys are helpful because, as you may already know, mortgage companies often play fast and loose with the law. In my experience their business practice is (figuratively) shoot first and ask questions later. They often run afoul of the law, and the only reason they get away with it is because those in foreclosure don’t know the law. An experienced attorney knows their tricks and can use their mistakes against them to help you keep your home.
Finally, there’s a loosely-based organization in Chattanooga called “Occupy Our Homes.” They are people like you, who are committed to stopping foreclosure, and have trained in ways to deal directly with mortgage companies through community activism, including phone and email blasts to mortgage company CEO’s, petition drives, publicity, and other methods. They’re very effective, and have had a lot of success in other cities. To find them, search Facebook for Occupy Our Homes Chattanooga.
Finally, ask around and learn from people who have gone through this before.
7) Record your conversations with mortgage company representatives
This is controversial, and not that easy to do, but it’s helpful. Please note, these are my experiences and I’m not an attorney and I’m not recommending that you record any conversation. These are things I’ve found have worked for me. I strongly suggest that you consult an attorney before recording conversations. With the fine print out of the way, here’s how it worked for me.
People who answer the phones at mortgage companies are unskilled, hourly employees with no certifications and no accreditation. They are, however, acting as representatives of their respective companies which mean their words carry weight. When you call your mortgage company they play a recorded message before you’re connected which tells you that they are recording you. They do it for their benefit, to protect themselves, and so they have a record of what you say. On the other hand, if you record your conversations with them, you receive the same value. You have a record of everything they say to you, and, legally, it’s very helpful. I’ve experienced mortgage company representatives lying to me. Sometimes it seemed like they would say anything just to get you off the phone. I’ve had a representative tell me something on Monday, only to have a different representative tell me on Wednesday that the first person was wrong.
When the operator answers, first ask them for their operator ID, make a note of it, and then tell them that you are recording the conversation. This has a two-part effect - it makes them more careful about how they treat you, and they’re less likely to say anything at all just to appease you. They’re not used to hearing it. They’re taught to tell you that you’re not allowed to record them, but Tennessee is a “One Party Consent” state. This means that in order to legally record a phone conversation, one person (you) must be aware that it’s taking place. That doesn’t mean that there aren’t conflicts which could arise from your recording someone who is in another state. I use the recordings for my own personal records and for possible legal action, not for publishing on the Internet. Publishing recorded conversations on the Internet could have other implications so consult an attorney before you choose to do so. If you’re not in Tennessee, check the wiretapping laws for your state before recording your conversations. The second issue is how to do the recording. In my case, I purchased a MagicJack. This is a simple VOIP phone device which plugs into a USB port on your computer, where you then plug in a standard home phone. With MagicJack, for $29 per year, you can make unlimited long distance calls in the continental U.S. Not only is it a great deal on a home phone, the call quality is very high. The one caveat is that in order to use it, you need high speed Internet. The final piece of the recording puzzle for me was a piece of software called MagicJack Recorder. You can find this on Google. It’s easy to use, works well and costs only $19.99. With this combination, you can easily record any phone call by pressing one button on your screen.
8) Decide what your end-game is
What this means is, decide what you want to walk away with. Do you want to keep your house? Do you want to sell it? Whatever you want to do, learn how it works beforehand, and, as I said before, educate yourself. It is possible to keep your home, but that doesn’t mean you will keep it for free. The most common way to keep your home is through a “Loan Modification.” This simply means that the mortgage company writes you a new loan, lowers your payment, and tacks on all the fees to the total mortgage. There’s a new federal program called HARP which is designed to help those in foreclosure get loan modifications. Please note though, even with reduced payments, you still have to make them, and you can still lose your home. If you’re approved for a HARP loan, it will be under conditions and rules which, if not followed, make it quite probable that you will still lose your home. Most of all, give them every document they ask for on time, and make your payments on time.
9) Do not vacate your home until you’re evicted.
Many people in foreclosure vacate their home before they have to. As long as you occupy your home, no one can legally remove you from it without first going through an eviction process in a court of law. Until a sheriff’s deputy shows up at your door with an eviction order, it’s still yours to legally occupy. Once you go into foreclosure, it’s a good idea to rent out a room in your house. Be sure to have the renter sign a rental agreement, and keep track of their payments to you. That’s because having a renter in your home may mean that you can stay in it longer. From what I’ve been told, having a renter in your home means the difference between a 10-day and a 90-day eviction period. When you talk with the law firm handling your eviction, be sure to let them know that you have a renter on your property. They will require you to send them copies of the rental agreement and receipts for rent, or a signed statement from you saying that you’ve been paid in cash.
These are the basics, and, if you follow them, you will have a much higher chance of successfully keeping your home. It’s important to know that keeping your home might not be your best option. If you have no equity or if your loan is under water because of the shrinking economy, it might be best to let it go. There’s a right way, and a wrong way to do this. Following the steps above, mainly the one about seeking help, is the best way to go. This is a complex process and nothing can help you more than good advice from people with experience.
The key to fighting foreclosure is patience. It’s very easy to get frustrated with the process, because it’s designed to frustrate you. Mortgage companies know that the more frustrated you become, the more likely you are to give up. A foreclosure fight can take years. In that time you will make and receive hundreds of phone calls. You will chase dead ends, and fill out tons of paperwork. In the end, it comes down to how much you want to stay in your home. For myself, I decided to use every legal means at my disposal to foil the mortgage company, because their attitude and the way they do business is diabolical.
Understanding what they do and how they do it is the key and, if you’re going to win, you have to play in their arena, and you have to use every tool you can.
This is the first article in a four-part series. The next article will be my interview with Jay Mace, founder of the Chattanooga-based non-profit organization, Save America Homes.
~Fil Manley
filmanley@gmail.com