Are you trying to get a forbearance agreement to stop a foreclosure?
If your home is up for foreclosure, don’t wait until the last minute before you look for help to stop the foreclosure. Contact The Law Offices Of R.J.Atkinson for a free initial consultation. We can explain your options to stop foreclosure and may even be able to help you keep your home.
What is a forbearance agreement?
A forbearance agreement is an agreement by which the lender will not to exercise their legal right to foreclose on you in exchange for an agreement to adhere to a repayment plan that will cure your delinquency. So in exchange for money or you taking some other action like listing the property with a realtor, or agreeing to sell it by a certain date, the lender agrees to temporarily stop the foreclosure proceedings or legal actions against you. In essence you agree to a repayment plan that will, over a certain time period, bring your mortgage current on payments, and the lender agrees not to foreclose. A forbearance agreement is not a long-term solution. Forbearance agreements are used by those who have temporary financial difficulties caused by unforeseen problems such as temporary unemployment or medical problems.
Getting a Lender to Agree to a Forbearance Agreement is harder than you think…
It is very difficult to get a mortgage company to accept a forbearance agreement. Once the lender has initiated the foreclosure process, they oftentimes have little to loose since they have already expended the monies to foreclose. Convincing them with a promise to pay more money every month for a certain period of time without any legal authority is very difficult. You didn’t pay them before so why should they expect to be paid now? Increasing your monthly payments beyond your disposable income, even short term, is probably not going to solve your problem whatever it may be. You are probably in foreclosure because your payments were missed, unaffordable, or for any number of good reasons. So in the slight chance a lender does accept a forbearance agreement, be aware of the increase in your monthly payment and, make sure you know your budget and what you can afford before proposing a forbearance agreement. If you can’t make payments on their terms then you will be back in foreclosure and in a worse position.
Negotiating a Forbearance Agreement to Stop Foreclosure…
Most attorneys are aware that the success rate of forbearance agreements is nominal at best. Forbearance agreements are seldom accepted by lenders once the foreclosure process has begun. This isn’t to say it can’t happen, but in thousands of cases we have handled, we have seen only a few forbearance agreements that have been successfully accepted. As a Debt Relief Agency and Texas Bankruptcy Law Firm we have stopped over a thousand foreclosures with Chapter 13 Bankruptcy. We recommend Chapter 13 Bankruptcy to stop foreclosure for those who can’t work out an informal repayment plan solution with their lender. Despite what you might have heard, foreclosures are seldom stopped with non-bankruptcy options. That’s because the lender doesn’t have much motivation or incentive to take less than they are owed after they have initiated the foreclosure process. Once you are behind 3, 4, 5, or 6 payments or more, it’s very difficult to convince a lender to work with you. If you were a lender and someone was 4 payments behind, and you had to spend $1,500.00 in attorney fees to foreclose, and could sell the property at foreclosure for what you lent them on the property, why would you accept anything less? If you want to use a bankruptcy alternative to stop foreclosure, you have to convince the lender that your situation is either temporary or that you will be able to repay what’s past due fairly quickly.
When your home is posted for foreclosure it’s a matter of public record. Since the foreclosure process is a legal proceeding and considered public information your name and address is likely available through the court’s records system and there are many companies that collect and publish this type of information for legal journals and mailing lists which they in turn sell. If you are facing foreclosure, you have probably received letters and solicitations from investors, mortgage brokers, attorneys, homebuyers, and so called “mortgage negotiators”, from these types of journals or mailing lists.
If you are seeking a forbearance agreement as a bankruptcy alternative to stop foreclosure, you should use caution. You may want to avoid using out of state companies asking for a significant amount of money upfront as opposed to using an experienced Texas attorney such as a real estate lawyer or a bankruptcy lawyer. If you are convinced that a forbearance agreement can work for you, it makes better sense to use a lawyer with significant experience in stopping foreclosures as opposed to using a non-lawyer in another state offering vague negotiation services that has no legal power or authority to compel a lender to do anything.
You should ask any negotiator what they will do for you and how much they will charge. Qualify and quantify their services. Ask for references on previous successes with forbearance agreements and how they intend to convince the lender to stop foreclosure. Whoever you decide to use to attempt to negotiate a forbearance agreement on your behalf, you should make sure they have previous experience and may be able to accomplish one or more of the following for you:
- Stop or postpone a foreclosure sale;
- Obtain a forbearance from any beneficiary or mortgagee;
- Assist you to exercise the right of reinstatement.
- Obtain an extension of the period for which you may reinstate your arrears;
- Obtain a waiver of an acceleration clause contained in any promissory note or contract secured by a deed of trust or mortgage on your residence in foreclosure or contained in any such deed of trust or mortgage.
- Save your home from foreclosure.
Although lawyers are acutely aware that forbearance agreements have a poor success rate, many attorney solicitations will offer to submit a forbearance agreement for free or for a minimal amount of money. In case you’re wondering why an attorney would offer to spend hours negotiating a forbearance agreement for free or very little money knowing the success rate of forbearance agreements is poor at best, so are we. It’s probably a way to get you into their office and get you to consider your options to stop foreclosure in Chapter 13 Bankruptcy.
Forbearance Agreements vs. Chapter 13 Bankruptcy…
Submitting a forbearance agreement to a lender in an attempt to stop foreclosure is a hope that the lender will be generous and understanding enough to allow you to make up your missed payments. This puts all the power into the hands of the lender who you may have failed to pay 3,4,5 or even 6 months of mortgage payments and who has potentially spent $1,500.00 to foreclose on you. You essentially have no power to negotiate since once a foreclosure proceeding has ensued; a lender is on a course to recover their investment at the foreclosure sale. You didn’t pay before, so why will you pay now, and why should we continue to deal with you? Unless the lender stands to suffer some kind of loss, they have no incentive whatsoever to accept anything less than payment in full. Even when the lender has something to loose, they will only consider a forbearance agreement if they are convinced that the borrower’s problem is only temporary. If they do accept a forbearance agreement and you fail to abide by the terms they will have to expend more money to initiate foreclosure again and can loose even more time and money.
Chapter 13 Bankruptcy Stops Foreclosure. If you are eligible to file, Chapter 13 Bankruptcy will definitely stop the foreclosure and allow you to keep your home and repay your past due payments over time. While there are many non-bankruptcy options available to stop foreclosure, none of them have the power of the automatic stay or the ability to force a creditor to accept repayment on terms you can afford based on your disposable income. Chapter 13 Bankruptcy can stop a foreclosure proceeding dead in its tracks. The “automatic stay” of bankruptcy is a powerful Federal Law that goes into effect the moment you file for Chapter 13 Bankruptcy. Once a bankruptcy of any type is filed, creditors must immediately cease and desist most all collection actions against you. This includes foreclosure proceedings. Unless you have filed a previous or recent bankruptcy case, or are ineligible to file bankruptcy, you can stop the foreclosure with Chapter 13 Individual Debt Adjustment.
Chapter 13 Bankruptcy can allow you to repay your past due payments over 3 to 5 years. Filing Chapter 13 Bankruptcy will prevent your home from being sold, and is a debt relief option that can not only stop foreclosure and allow you to save your home, but can also allow you to keep your other property while repaying your debts on your terms. Disposable income from your regular income is what usually funds a Chapter 13 repayment plan. Chapter 13 was designed to help people facing foreclosure and other potential losses of property. Stopping foreclosure is the primary reason people file for Chapter 13 bankruptcy. So, if you are eligible, Chapter 13 can stop foreclosure on your home.
So if you are facing foreclosure, and the potential loss of your home, you have many options to consider. No matter what your non-bankruptcy options are, if you are eligible, Chapter 13 Bankruptcy will definitely stop foreclosure. As for forbearance agreements, don’t count on getting a lender to accept one. Although it is possible to get one accepted, if you put all of your hope into getting a forbearance agreement, you may likely find yourself loosing your home or filing a last minute bankruptcy to save your home. Whatever you do, do something to stop foreclosure. There are many Texas homeowners faced with the possibility of foreclosure who don’t do anything. They attempt to ignore the problem in the hope that it will just disappear or simply go away. Waiting around for the foreclosure to go away won’t solve the problem. Foreclosure is a serious matter and once the lender has started foreclosure against you, the clock is counting down to sale.
Stopping foreclosure with Chapter 13 Bankruptcy can be the best option to save your home. Contact the Texas Bankruptcy Attorneys at The Law Offices Of R.J.Atkinson for a free initial consultation to see how we can help you with the foreclosure. We may be able to help you to stop the foreclosure with Chapter 13 Bankruptcy. Our Texas Bankruptcy Lawyers welcome the opportunity to discuss your legal options on how to stop foreclosure and save your home.
Stop Foreclosure and Save Your Home…
Call the Texas Bankruptcy Law Firm R.J.Atkinson at: 800-436-9056