The quick and easy way to stop foreclosure - use the law

If you’ve received a notice of sale or a notice of foreclosure or are afraid that you may soon be getting one, I want you to know that you have options. You can keep your house and you can get a monthly payment that you can actually afford. Best of all, you can do it just by following the law.

This isn’t some pie-in-the-sky trick or a scheme to fool your lender. What I’m talking about is a completely legal remedy that you can take advantage of to get lenders off your back, signs out of your yard and your home remaining in your name. What I’m talking about isn’t magic, it’s the law. The law is California Civil Code 2923.5.

The law states that before a bank can provide homeowners with a notice of foreclosure or a notice of default, the bank must go through a number of due diligence efforts to help the homeowner retain the mortgage.

It applies to loans given out from January 1, 2003 to December 31, 2007 that are purchased as the main residence. If this applies to you, keep reading because there is more good news.

No bank or lender can file a notice of default until 30 days after contacting the borrower by phone or in person. To quote the legal statute itself:

The beneficiary shall contact the borrower in person or by telephone to assess “the borrower’s financial situation and explore options for the borrower to avoid foreclosure.” During the initial contact, the beneficiary must:

1. Advise the borrower that he or she has the right to request a subsequent meeting to be scheduled by the beneficiary within 14 days; and

2. Provide the borrower with the toll free number made available by the US Dept of Housing and Urban Development to find a HUD certified housing counseling agency.

What does all that legalese mean? It means that before a lender or a bank can give you a notice of foreclosure or notice of default, they must have contacted you and performed due diligence to help you find any way to retain your mortgage, including a loan modification. If they have not done that, they have broken the law.

What does this mean for you? Well, if your lender has not contacted you and given you the required amount of notice and time to act then they have broken the law. If they have broken the law, you have the upper hand and have the opportunity to get a permanent injunction on any process they’ve undertaken to take your home. A permanent injunction means you owe them nothing for as long as it takes them to get their act together. Once that happens, guess who will be knocking down your door begging to give you a loan modification – the lender.

There are a number of other little nuances and requirements that your lender may have neglected to take care of, so chances are they have not done everything required by law before providing you with a notice of foreclose or default. And if they did not follow the law, then they broke the law.