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Working Foreclosures

Kendall TierneyPresident, GRCA

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The Language of Foreclosure

• Varies by state• Strict Foreclosure• Deed in Lieu of Foreclosure• Judicial vs. Non-Judicial• Short Sale• Trustee Sale• Redemption

What should I ask?

• What stage of foreclosure is the home in?

What should I ask?

• What stage is the foreclosure in?

• What options have they explored?

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Making Home Affordable

• Loan terms may be modified by reducing payments for distressed borrowers

• Refinancing is intended to help owners who are current on payments, but have little or no equity in their home

• Loans can be modified only one time • To be eligible, your loan must be owned or

guaranteed by a government-backed mortgage company such as Fannie Mae or Freddie Mac

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Making Home Affordable

• Plan starts immediately and is strictly for primary residences that are not vacant or condemned

• There are no fees for this type of loan modification

• Modification plan ends on December 31, 2012

• www.makinghomeaffordable.gov

What should I ask?

• What stage is the foreclosure in?• What options have they explored

with their lender?

• Are they planning to file bankruptcy?

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Foreclosure and Bankruptcy

• Chapter 7 bankruptcy does not prevent foreclosure

• Equity• Chapter 13 can prevent foreclosure• Post-petition debt• Loan modifications made by judges

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How Might Modifications Work?

• Amends Bankruptcy Code section 1322(b)

• What are the rules?

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An Example

Under the current Chapter 13 laws:

Parker, Chip. “How Will Mortgage Modification Work under the New Bankruptcy Law?” www.bankruptcylawnetwork.com.

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An Example

Under the proposed Chapter 13 laws:

Parker, Chip. “How Will Mortgage Modification Work under the New Bankruptcy Law?” www.bankruptcylawnetwork.com.

What should I ask?

• What stage is the foreclosure in?• What options have they explored

with their lender?• Are they planning to file

bankruptcy?

• Does my government have a lien in place?

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What About My Judgment?

• Deficiency judgments• First position v. Junior position• When a Junior lien holder forecloses• Do I need a new judgment?

What should I ask?

• What stage is the foreclosure in?• What options have they explored

with their lender?• Are they planning to file

bankruptcy?• Does my government have a lien

in place?

• What do I do now?

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Determine Property Ownership

• What is the importance of the trustee sale date?– Homeowners are responsible for the

property until the sale date– Trustco Bank, National Association v.

Eakin (681 N.Y.S.2d 410)

• What is the importance of having the deed recorded by the new buyer?

The debtor says…

• My house is in foreclosure.• I gave my house back in the

bankruptcy.• I lost the property in

foreclosure.• The bank kicked me out.

Thank you for your attention.

Kendall Tierney877-724-GRCA

Kendall.tierney@govcollect.org