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Potential foreclosure defenses

On Behalf of | Apr 2, 2015 | Real Estate Transactions

Delaware residents may be surprised to find out that some homeowners who have been foreclosed upon may be getting their homes for free. In recent years, the large number of foreclosures that must be approved by state judges has created a backlog in many court systems. This has caused some cases to take multiple years to be resolved if they are resolved at all.

Homeowners in some states are taking advantage of the statute of limitations that apply in foreclosure cases. That would mean that the lender could no longer take ownership of a property if the case takes longer than the statutory period to resolve. Many who study the recent increase in foreclosures say that the federal government and the courts are both to blame. In the last several years, the federal government has made dozens of changes to mortgage modification programs.

This often forces lenders to create new loan modification offers, which may delay the foreclosure process. Even if new loan terms have not been extended, it doesn’t mean that homeowners are being forced to leave their homes. Of 20,000 foreclosure cases involving mortgages that haven’t been paid in the past five years, over 90 percent of those homeowners are still living in their homes.

Homeowners who are facing a foreclosure and have been unable to obtain the permission of the lender to undertake a short sale may wish to talk to an attorney about other types of ways to avoid the process. It may be possible to negotiate new loan terms which would allow the owner to keep the residence and avoid the problems that would otherwise arise, including the damage that a foreclosure can do to the owner’s credit.