I'm re-posting with the options in reverse order. I would not want someone to consider "Do nothing" without first trying to "Do something."

Some options for those facing foreclosure :

1. Do something:

-Call the lender and try to arrange a loan modification, refinance, short sale, or Deed-in-Lieu of foreclosure.

-Loan Modification- A Loan Modification is a permanent/temporary change in one or more of the terms of your mortgage loan. Ideally, this will result in a payment you can afford. (You can do this yourself).
-See http://makinghomeaffordable.gov/eligibility.html

-Short sale- A sale of a house for less money than is owed to the lender. Ideally, the lender agrees to accept the proceeds of a short sale and forgives the rest of what is owed. (You will likely need the help of a R.E. Broker & a R.E. Attorney).

-Deed-in-lieu of Foreclosure- (May only be available after a failed Short Sale attempt). Ideally, the lender accepts ownership of the property in place of the money owed on the mortgage. (You will likely need the help of a R.E. Attorney).

-Consult with an attorney regarding:

-Foreclosure Defenses- Such as a Lack of standing, TILA violations, RESPA violations etc.

-Bankruptcy- Such as Chapter 13- which is a type of “reorganization” used by individuals to pay all or a portion of their debts over a period of years using their current income. The most important thing about a chapter 13 case is that it may allow you to keep your home if you can make the payments which the bankruptcy law requires to be made to your creditors.

-Deficiency Judgments- Generally, a judgment for the amount a homeowner owes the lender after a house is foreclosed upon and sold by the creditor for less than the actual amount still owed.

2. Do nothing:

-Walk away OR

-Stay in your home until you get evicted.

-Pay or go calculator: http://www.payorgo.com/

All the best,

Robbie L. Vaughn, Esq. (Robbie Vaughn)- Long Island, Brooklyn and Queens Real Estate & Bankruptcy Attorney.

Broker/Owner of Bayview Estates Realty of Long Island.


Rlvaughnlaw.com
Bayviewestatesrealty.com


Disclaimer:

No Attorney-Client, or Broker-Client relationship is formed until we have a signed agreement. This is not legal advice. Please verify any and all information provided to you.

Have your friend watch this NYSBA video: http://204.8.127.102/peopleslaw/SaveYourHome.htm

DON'T WALK AWAY!.....it looks like you are in NY which has the Honorable Judge Shack who has kicked major a$$ for foreclosed homeowners in the Brooklyn area.

You have MANY defenses now and if the loan was SECURITIZED (99% likely) then you can beat this foreclosure by following the proper steps and challenge the Lender on the grounds that they have NO STANDING to sue in the Court of Law. Put the burden of proof on THEM!

I'm not 100% sure if NY is a judicial foreclosure...if so please view our site below. Its fore Maine homeowners but the steps are the same for any judicial foreclosure state that still embraces Due Process.

I agree with Karen that it is important to speak with an attorney and contact a real estate agent. It will depend on what point in the foreclosure porcess your freind is in, how long they have been delinquant, negotiations with the mortgage holder, etc. The worst thing they can do is nothing. There may be more options for them than they are aware and there are definately programs available to try to keep them in thier homes. See the below for information on one such program that is helping some homeowners.

Your friend should contact a REALTOR who specializes in pre-foreclosure/short sale properties at the same time seek legal advice from an attorney who specializes in foreclosure sales. Depending on where in the foreclosure process your friend is in, it may be possible to sell the property as a "short" sale provided your friend qualifies and there is enough time between now the and sheriff's sale.