Delay Foreclosure in Court to Persuade the Bank to Grant Your Deed in Lieu Request

For homeowners who are not attempting to stop foreclosure but only get enough time to move out and give the house back to the bank, a deed in lieu of foreclosure may be the best option. But even then, it may also be in the best interests of the borrowers to fight the foreclosure in court to persuade the bank to negotiate.

Homeowners, as soon as the bank has begun foreclosure filings, can start filing their own motions in court just to get more time to have the lawsuit pushed back. It may be a huge mistake to allow the bank just to get a default win in court because the owners are too anxious and fail to show up for hearings or file an answer to the complaint in the first place.

For most foreclosure victims, doing the minimum amount of work to defend the lawsuit and stop foreclosure will show the bank that they are not willing to be kicked out of the house quickly and easily. Just going into court to defend the foreclosure can drag out the lawsuit potentially for months or even years.

While the lawsuit is languishing in the county court system, borrowers can then try to work with the bank to execute a deed in lieu of foreclosure to help them preserve at least a little bit of their credit. But they should not let the bank dictate all of the terms and how much time is available to get the deed in lieu done. Homeowners can use a defense against the lawsuit to force the bank to negotiate more beneficial terms.

Otherwise, the lender may just take its time reviewing the deed in lieu, and the house will be foreclosed and sold at sheriff sale. At the last minute, the borrowers may be told the mortgage company will not be accepting the deed in lieu and the house will instead be auctioned off. This is the result every homeowner dreads, but it is far too common for banks to turn down requests for help at the last minute.

There are even just a few little motions that homeowners could file in court and find explanations for online. A Motion for Extension of Time might give them an extra 30 days to file an answer to the complaint. A Motion to Dismiss might give them several extra months until the motion can be ruled upon and either granted or dismissed.

By the time these two motions have taken up valuable months, the bank will know that the owners are serious about finding a solution either in or out of the courts. The judge in the case can even order the bank to try and work with borrowers to stop foreclosure and keep the lawsuit from going to a trial (foreclosure lawsuits rarely go to trial).

That loan modification homeowners do not qualify for right now may look a lot more inviting to the bank if they are defending the lawsuit and looking at a two or three year legal process before they can take the home. That could be several years of mortgage-free living for homeowners and just as many years of legal fees and losses on the loan for the mortgage company.

Homeowners should look into their legal options as well as their non-legal options for avoiding foreclosure. Stopping the lawsuit in court or getting additional time is the best solution to begin with. Borrowers are encouraged to consult with a lawyer if they feel the need to; even spending $1,000 on an attorney would be worthwhile if they received an additional 6 months to work out another solution to foreclosure without having to pay the mortgage.