Defending Against Judicial Foreclosure
 

In a judicial foreclosure, the lender files a lawsuit in state court. You will receive a foreclosure complaint, petition, or similar document, along with a summons. The summons will notify you about your rights and state how many days you have to formally respond in writing (called the answer) to the complaint, usually 20 or 30 days.


 

What goes in the answer. An answer, which you must file with the court and serve to the foreclosing party, should include:

 a response to each numbered paragraph in the complaint stating whether you admit, deny, or don’t have sufficient information to respond (and therefore deny) the allegations in the paragraph (if you admit an allegation, the lender does not have to provide proof of that allegation) your defenses (for example, you’re not actually behind in payments) or affirmative defenses (why the court shouldn’t let the lender foreclose), and    any counterclaims (your claims that the lender has violated other laws).

Your Loan Mod Was Denied…Now What?
 

Was Your Ratio Correct?

 

If you believe you were eligible for a loan modification, but didn’t know your DTI (debt to income ratio) or NPV and the optimal way to structure these ratios for your lender, then you were setting yourself up for failure from the get-go. If you’re unsure about how to structure these figures, then it’s best for you to hand your loan modification over to a negotiator who can handle the process for you. An experienced loan modification representative can help you restructure the way your financial situation is presented to give you your best chance at a great loan modification.





 

Do Loan Modifications Affect Your Credit?
 

If you're thinking about a loan modification, chances are your credit has already taken a hit. "Most customers in the process are already delinquent," Broeker says.
 

When you proceed with a loan modification, a comment code will appear on your credit report that says something like "paying by modified terms."
 

But getting back on track with payments could have enough of a positive effect on your credit over time to make up for this derogatory remark.
 

If you're still unsure whether a loan modification is a good idea and hesitate to extend your loan term, remember that you can refinance later, when you're on better financial footing.
 

"I don't think loan modification fits everybody," Broeker says, "but it's the single best tool we have from a loss mitigation perspective to keep people in their homes."