How to Stop Foreclosure

A foreclosure in Mississippi is almost always done without any court supervision and it is done fast, in a matter of weeks.  Therefore, in order to stop the foreclosure you have to take one of the following actions:

 

  1. Get the mortgage company to agree to cancel the sale.  It is unlikely that you will get them to agree to stop the foreclosure once they start.  If they do agree, you must get something in writing that states they will stop the foreclosure.  If they tell you they will cancel the sale and they don’t, you want to have more than just someone’s word over the telephone.
  2. Get the mortgage company to agree to modify your loan.  Again, it is unlikely that they will do this after they make the decision to begin to foreclose, but if they agree to review or screen you for a modification, they should not proceed with the foreclosure.  You must get something in writing that states they will stop the foreclosure. If they tell you they will consider you for a modification and they still foreclose, again you want to have more than just someone’s word over the telephone.  Since the left hand doesn’t know or care what the right hand is doing, they will continue to foreclose during the modification process.
  3. Pay all the money they claim is due.  Paying all the past due payments and fees will stop the foreclosure. This will give you time to fight with them later on about whether you really owe that much money.  But, by this time the amount needed to reinstate the loan is much more than most people are able to come up with.  It will include all of the mortgage payments they claim are past due, late fees and other charges, and up to $2,000 in foreclosure fees.
  4. File a lawsuit. Since foreclosure in Mississippi takes place outside of court proceedings, it would be up to you to file a lawsuit in Chancery Court or Federal District Court to stop the foreclosure.  You would ask the court for an injunction or restraining order to stop the foreclosure.  In most cases the court would require that you put up a bond (money) before they would stop the foreclosure.  If you couldn’t come up with the bond, the foreclosure goes through.  Usually, if the foreclosure has already started there simply is not enough time to prepare and file a lawsuit before the foreclosure sale date.
  5. File bankruptcy.  Filing bankruptcy will stop the foreclosure.  Though I wouldn’t want to cut it so close, you could file bankruptcy 10 minutes before the foreclosure sale and save your home.  A Chapter 13 will allow you to start back making the monthly payments and catch up the past due payments over a 3 to 5 year time period.  Bankruptcy gives YOU the advantage.  Believe it or not, you get the upper hand over your mortgage company when you file bankruptcy.  There is a new set of rules and regulations placed upon the mortgage company by the bankruptcy court.  You can also sue your mortgage servicer and the owner of your note in the bankruptcy proceeding.  This is another great advantage of a Chapter 13 bankruptcy. 

We are in the middle of a major mortgage fraud scandal involving robo-signers, fake documents, false affidavits and assignments.  Mortgage servicers make more money when they foreclose than they do taking your regular monthly payments.  The ability to sue your mortgage company while you are in bankruptcy and protected from foreclosure gives you a huge advantage.   You can bring all your claims and allegations against the mortgage company in a court that was set up to protect you from abuse by creditors.

Whatever you do, do not attempt to file bankruptcy without an attorney.  Filing bankruptcy is a complicated process.  There are too many traps you could get caught in and you may end up losing the very property you are trying to save if you try to do it on your own.

 

*Other foreclosure information available on the following site sub-pages:

Understanding the Foreclosure Process in Mississippi

American Dream – Homeownership

Avoid Foreclosure Rescue Scams

Bank Foreclosure Secrets

How to Fight Foreclosure in Mississippi

Loan Modifications & Forbearance