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).
If you've lost work because of the coronavirus outbreak and fall behind on loan payments, loan modification could help you avoid default.
Loan modifications are most common for secured loans, such as mortgages, but you may also be able to modify other types of loans. That could include personal loans or student loans.
A loan modification can relieve some of the financial pressure you feel by lowering your monthly payments and stopping collection activity.
But loan modifications are not foolproof. They could increase the cost of your loan and add derogatory remarks to your credit report.
That doesn't mean you should avoid a loan modification. But before you jump at the chance, consider all the angles.
A loan modification is different from a refinance. When you take a loan modification, you change the terms of your loan directly through your lender. Most lenders agree to modifications only if you’re at immediate risk of foreclosure. A loan modification can also help you change the terms of your loan if your home loan is underwater. Contact your lender if you think you qualify for a modification.
On the other hand, a refinance replaces your existing mortgage with a new loan. When you refinance, you can change your loan’s term, your interest rate and even your loan type. You can also take cash out of your equity with a cash-out refinance. To get a refinance, you’ll go through an application process that’s similar to the process you went through to buy your home.