If you are a lender or the beneficiary of a mortgage note or deed of trust you may be asking yourself, am I the only one that can be found to have participated in bad faith? In general, yes. The borrower is given extensive rights under these new provisions and generally viewed sympathetically. Rightly or wrongly, it would be difficult to find that a homeowner participated in bad faith. They do not have to accept a lender proposal or modification, even if they are reasonable or advantageous. However, they can suffer more severe consequences, by way of foreclosure on the lender’s terms, if they fail to adopt a reasonable proposal by the lender (which equates to good faith).
The new changes are offered primarily for the protection of homeowners, yet they retain nuggets of incentives for lenders as well. For example, the 90 day foreclosure period is still in effect, despite mediation and petition for judicial review. However, since the law is so new, no one really knows whether or not a petition for judicial review will stay foreclosure proceedings past the 90 day period. I tend to believe that it will, but expedited hearings are not out of the question.
As noted above, if you find yourself in foreclosure mediation proceedings contact a local business or real estate attorney at your earliest convenience. Additionally, please do not hesitate to contact us should you have any questions about the new foreclosure process and mediation.
Disclaimer: This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship. If you have questions or need specific advice relating to the matters contained herein, please contact Lovaas & Lehtinen, P.C.
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