Consumer Law

How To Force Your Mortgage Company To Stop A Foreclosure In Alabama

By M. Stan Herring

Alabama consumers are facing foreclosures at a record pace -- some are legitimate but many foreclosures are illegal and should be stopped or undone if they have already occurred.

If you are facing a foreclosure in Alabama, how can you stop it? [We'll address in a future post about how to undo a foreclosure that has already happened.]

First, if the mortgage company has illegally started foreclosure proceedings, you can often sue your mortgage company. Sometimes it is good to file a "Temporary Restraining Order" (TRO) to stop the foreclosure but we have found in our cases in Alabama that this is not necessary.

We file the lawsuit and send a copy to the foreclosure lawyer (most foreclosures are handled by Sirote & Permutt) and tell them they can do whatever they want. They understand the clear implication: The foreclosure is wrongful and if you go forward with it you will magnify the damages as you have now been warned.

The foreclosures have been stopped because the mortgage companies know we would argue for punitive damages and high compensatory damages based upon their refusal to stop the foreclosure. So they do their best to take away our arguments. We have plenty of others but when they stop the foreclosure it helps our clients.

A second option is to file bankruptcy -- normally chapter 13 bankruptcy which will normally stop the foreclosure and let you make payments into court. But keep in mind that normally you will need to continue to make your normal mortgage payments and make payments into court on the back amount you owe so this is something you need to discuss with a bankruptcy lawyer to see if this is practical for you to do.

Your final practical option to stop a foreclosure (we'll talk about short sales, etc. in another post) is to obtain a loan modification with the mortgage company. These, unfortunately, are fairly rare and most of our mortgage fraud cases arise out of lies regarding modifications. If you are discussing a loan modification, protect yourself.

Document every phone call. If you want to record the phone calls, make sure you have permission to do so. But at least write down every call. Every detail. How long you were on hold. What was said. What was promised.

We have filed dozens of wrongful foreclosure cases (you can read some here) related to promises to stop or cancel or postpone the foreclosure but then the mortgage company forecloses anyway so you need to protect yourself by making sure you document everything to discourage the mortgage company from lying to you.

If you live in Alabama and have questions about an upcoming foreclosure or a foreclosure that has already happened, feel free to contact us through this blog, our website, or by picking up the phone and calling 205-879-2447. We have a paralegal who only works on our foreclosure cases and she will discuss your situation with you and can set up an in person consultation at our office.

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

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Full post as published by Alabama Consumer Blog on November 27, 2010 (boomark / email).