www.robertjpellegrino.com How to Save Your Home from Foreclosure 627 Hearthglen Boulevard Winter Garden, Florida 34787 (407) 574-5100, (407) 362-1638 fax, e-mail [email protected] RJP Admitted: Florida and New York www.robertjpellegrino.com DISCLAIMER Legal Notice:- This digital eBook is for informational purposes only. While every attempt has been made to verify the information provided in this report, the author does not assume any responsibility for errors or omissions. Any slights of people or organizations are unintentional and the development of this eBook is bona fide. The trademarks, screen-shots, website links, products and services mentioned in this eBook are copyrighted by their respective owners. This eBook has been distributed with the understanding that we are not engaged in rendering legal accounting or other professional advice. We do not give any kind of guarantee about the accuracy of information provided. In no event will the author be liable for any direct, indirect, incidental, consequential or other loss or damage arising out of the use of the information in this document by any person, regardless of whether or not informed of the possibility of damages in advance. The author may be considered by law to be a debt relief agency, helping people to file for bankruptcy using the U.S. Bankruptcy Code. This may be deemed by state law to be legal advertising. 2 www.robertjpellegrino.com THE most important thing you can do as a homeowner to save your home from foreclosure is LEARNING YOUR RIGHTS! CONGRATS! You have taken the 1st step! The banks and mortgage companies have teams of lawyers just waiting and willing to take advantage of you. You worked hard to get your home, saving for years to get the down payment for a place you could call your own. No landlord and a nice neighborhood where you would live the American dream - a HOME of your own! and then.... They didn't tell you it was an "adjustable" rate. Just when your budget is stretched as thin as it would go, here's another jack in the payments of another few hundred dollars. Maybe one of you lost some income and now it's impossible to pay everyone you owe. No matter the cause, some banker or mortgage exec is looking to kick you while you're down by taking your dreams away. They WILL take your home - IF YOU LET THEM. FIGHT BACK! Always remember, you're not alone. Recent reports estimate that there are now over 2.8 million foreclosures that were filed across the US in 2009 and the numbers are expected to rise in 2010. 3 www.robertjpellegrino.com A word of caution - BEWARE of scams! There were so many scammers claiming to be able to "rescue" your home from foreclosure that most States have now passed rescue foreclosure laws. These laws are designed to protect homeowners from con artists who promise the world, then disappear when no results are forthcoming. Forbearance agreements? Good luck, you have a better chance of winning the lottery. Loan modification? Yes, it is possible and part of my practice. However, there is such a volume of requests for these agreements that the lender's are overwhelmed to the extent that it is more likely that the home will be foreclosed upon long before the lender can process the paperwork for the modification. Did the lender tell you that you needed to be 2 or 3 months behind on the payments before they would consider a modification? Did they ALSO tell you by falling behind you would be subject to interest, fees and penalties? That they could then accelerate the loan and make you pay it in full right away? That they could immediately FORECLOSE??? I'm guessing NO! In fact, The Wall Street Journal recently reported a "new wave of fraud" affecting "thousands upon thousands" of homeowners. The F.B.I. is investigating more than 1,200 mortgage fraud cases with more being added every day. Your situation may look awful, but it's not hopeless. 4 www.robertjpellegrino.com WHO I AM. My name is Robert J. Pellegrino. I am admitted in both New York and Florida State Court's, the US District Court for the Middle and Northern Districts of Florida and the US Bankruptcy Court's for the Middle and Northern Districts of Florida. I graduated from Hofstra University, a prestigious school on Long Island, New York in 1981 and from The John Marshall Law School in 1984. I have been helping families in crisis for over 23 years. HOW I CAN HELP. In this e-book, I'm going to empower you by giving you the information you need to fight back. How to fight, how to take control and how to save your home. At any time, you're free to call me with questions at (407) 574-5100, send me an email at [email protected] or visit my website where there are many free tools that will help you. If you love the help I offer, please leave feedback about how I can make this as valuable and useful to you as possible. 5 www.robertjpellegrino.com Introduction 700 billion in bailouts and we're at the worst financial crisis since the Great Depression. Unemployment is way up, foreclosures are skyrocketing and many of us are at the brink of financial ruin. Since the bailout, where has the money gone? To help homeowner's out of their dilemma? or did the banks use it to buy assets??? We KNOW what you did! All the while as we suffered and worried about keeping a roof over our heads. Waiting for the banks and lenders to help is like waiting for Santa to drop off that Mercedes you wanted - not going to happen. Arm yourself with the right information and at least you have a good chance of leveling the playing field. You need help - NOW! Practical information that can help if you're already in foreclosure or just a few months behind. You have OPTIONS and it's not too late - BUT the clock is ticking! 6 www.robertjpellegrino.com Step One. Our American Dream. Once, in the not too distant past, you had to have a good, long standing job, a huge down payment and documents up the wazoo to get a mortgage. It was worth it. Historically, 60% or more of a person's retirement was coming out of their real estate holdings. It was once one of the safest places to invest for our retirement. An appreciating asset to be sure. Then came greed - WALL STREET GREED. "Say - wouldn't it be great if we could make MORE?" Let's make a sub-prime market so more folks can get a home. Let's DEREGULATE our industry, change the RULES. Let's approve mortgages so just about anyone can get in on this! Better still, let's go no doc! No need to prove you can afford it - just state your income and sign on the dotted line - we'll even lend you the down payment - what a GREAT idea! All's we have to do is hold the loan for a month or so, bundle them with other more respectable loans and sell them off -usually all ending up at Freddie Mac or Fannie Mae anyway. 7 www.robertjpellegrino.com STILL can't afford that mortgage? NO PROBLEM! - just go INTEREST ONLY or adjustable. "We'll make a killing!" Did it help people to get a piece of the American Pie - sure. Did they explain all that was necessary, all the implications what these loans really were? "Just re-finance when the loan jumps a point or two". Did they tell you that the home had to gain in value to do that? Did they tell you the adjustable rate meant that your payments could double or even triple if you did not refinance? Did THEY KNOW - THIS - was coming??? Money makes good people do bad things. They KNEW they could bundle and that there were investors willing to buy high risk deals. Ever hear of a hedge fund? Money streaming in from China, Saudi-Arabia, Japan and Dubai. The "adequate value" of the home wasn't important. What was important was the 300 trillion in mortgage debt that was being packaged and resold for PROFIT. 8 www.robertjpellegrino.com Why is this important to you? You might have a home that is worth less today than when you bought it. You may have an adjustable or interest only loan. You may have lost your job, become underemployed, divorced, ill or taking care of a sick loved one all adding to your financial hardship. Your sleepless nights compound the worry of losing your home and you have no idea what to do. Step Two. Foreclosure. It is a legal process, a lawsuit, where the lender or holder of the Note obtains an Order from the Court to sell your home. You 1st get a letter telling you if you don't pay up, they will sue you. The lender then serves you with a LIS PENDENS, which is the formal document notifying you that the lender intends on commencing foreclosure. They will file this document with the clerk of the court in the county where the property is located. This notifies the world that there is a lien on the property that must be dealt with before there can be a sale of the property. If there is no 9 www.robertjpellegrino.com compliance, a summons and complaint will be served against you and the clock starts. You only have 20 days to respond by answering the suit or filing an appropriate Motion. If you do nothing, the foreclosure will proceed and you options quickly diminish. A default is entered and the lender then motions the Court for Summary Judgment. Eventually, in a process that usually takes 6 months, a sale date is ordered. The sale takes place at auction on the Courthouse steps where anyone can bid, even the lender. The property goes to the highest bidder and you, in Florida, are responsible for the deficiency which is the difference of what the home sold for and what you owe under the Note. With a deficiency judgment, all collection remedies are available to the lender and may include seizure of bank accounts, cash, property, investment accounts or other investments, garnishments and attachments. You can also make claims ag ainst the lender as well! It is time consuming, all the while where your lender does NOT collect payments from you. 10 www.robertjpellegrino.com Step Three. Gather evidence. What if you filed an answer? The fast track ends and discovery begins. Discovery is where your attorney gathers information and evidence usually by interrogatories, production requests and by depositions. It can also be examined by experts who can testify as to discovered wrongdoing by the lender or closer of the loan. These experts perform forensic analysis on both the mortgage and closing process that helps prove if any regulatory shortcuts were taken by the lender or closer of the loan - whether the law was violated and whether there are any discrepancies during the loan process. Challenges to foreclosure may also include whether predatory lending practices occurred, where interest charges are disguised as loan fees or excess junk fees or other questionable practices. 11 www.robertjpellegrino.com STEP FOUR. FIGHT BACK. You can. You have the choice to save your home. Gather all the evidence you can. All documents and advertisements the lender used. All correspondence between you and the lender and closing agents. All evidence that might show illegal activity must be given to your lawyer. Your attorney will examine these documents for violations of laws such as truth in lending, improper service of process, RESPA violations, and violations of Fair credit Reporting Act and of the Home Owner Equity Protection Act. Did you qualify for the Hope for Homeowners program and were wrongfully denied? Did the lender correctly apply your payments to principal and interest? Are they now in violation of the Fair Debt Collection Practices Act? Are they in breach of Contract or have they committed Fraud? Why not fight to save your home? 12 www.robertjpellegrino.com Step Five. BANKRUPTCY. Lenders have spent billions with a B! stigmatizing bankruptcy. They want you to feel like you're doing something wrong by trying to save your home by filing. Over a million people a year file bankruptcy. Most, like you, are hardworking folks, who have through little or no fault of their own, found themselves between a rock and a hard place. Chapter 13 is known as Debt Consolidation, or a re-organization. Chapter 13 Bankruptcy is primarily designed to allow you to stop foreclosures and repossessions, and allows you to put together a payment plan to make up payments. Your bills can be consolidated into one monthly payment. An “estate” is created when you file bankruptcy. The trustee oversees the administration of the estate and a plan is developed where you make your regular secured payments, catch up payments and pay a fraction of your unsecured debts each month to the trustee. It "stays" all lawsuits, including the foreclosure and allows you to obtain a fresh financial start. It stops the sale of your home in foreclosure, stops the harassing calls, stops repossessions, attachments or garnishments. 13 www.robertjpellegrino.com As long as you have a regular source of income, you should qualify for a Chapter 13 Bankruptcy filing. If your interest rate is high, you can still try to negotiate a loan modification with the lender, who may be much more receptive to this idea knowing that you have the option to surrender the home without further recourse against you. STEP SIX KNOW THE MYTHS ABOUT BANKRUPTCY. Myth 1: Bankruptcy damages your credit for 10 years. Not True. You can begin repairing your credit once the bankruptcy is formally discharged. The bankruptcy shows on your credit for 7 – 10 years. If you make timely, full payments on your restructured debt, you will be in the position to slowly improve your credit score. Afterward, rebuild your credit by spending less than you owe and do not finance more than 40% of your available credit limits. Myth2. Everyone has access to my bankruptcy records. 14 www.robertjpellegrino.com Not True. Public records do include bankruptcy filings. The average person’s records are not dug up or actively being searched for this type of information. Some celebrities or political figures have their records searched by adversaries, but in the general population, this is rarely a concern. Myth3. The new bankruptcy law can’t help my situation. Not True. A debtor can qualify differently under the new bankruptcy reform laws, but most do qualify for some relief. Any US citizen can file and in many instances the same relief is available as was the case before the law was amended. Myth 4. Only irresponsible people need to file bankruptcy. Not True. More than one million people file for bankruptcy each year. These people certainly have valid, compelling reasons for filing bankruptcy, and it did not make them “bad” people because of the choice they made to restructure their debt. Loss of a job, underemployment, divorce, illness, credit card companies charging 20 or 30% 15 www.robertjpellegrino.com interest rates, devaluation of homes, predator lending practices, skyrocketing cost of living increases, getting ripped off by the greed on Wall Street, all are legitimate reasons for seeking relief! Filing for bankruptcy offers a chance to start again for people deserving a second chance. Myth 5. I can decide what goes into my bankruptcy and what does not. Not True. When you file bankruptcy, you are required to list all your property, all your assets and all your debts, including every creditor. Myth 6. It’s too difficult to figure out how to file bankruptcy. Not True. Your bankruptcy attorney is an expert at navigating the paperwork involved in filing for bankruptcy, and will guide you on the specifics on filing. Much of the work can now be done online and communication between us is now streamlined and efficient. 16 www.robertjpellegrino.com Myth 7. I’ll never get another house later if I file bankruptcy now. Not True. In most cases, opportunities for owning property and building credit will be available immediately following the discharge of your bankruptcy. Buying and spending within your means and making timely payments will be the most important aspect of augmenting your credit status going forward. Myth 8. If I file bankruptcy, I will lose everything I have worked so hard to achieve. Not True. In most cases, bankruptcy allows you to maintain your principal residence. Without filing for bankruptcy, you could be forced to forfeit property to creditors to satisfy your debts. One misconception is that bankruptcy erases any liens on the property, and this may not be the case universally. Laws vary State to State, so don’t take chances, speak to an experienced bankruptcy attorney who knows the answers to these important questions. Myth 9. If I file for bankruptcy, my spouse has to file too. 17 www.robertjpellegrino.com Not True. It’s your choice to file bankruptcy separately or jointly. The Court allows each couple to weigh what is best in their specific circumstance when it comes to filing together or not. Myth 10. Bankruptcy doesn’t clear back taxes. Not True. If the tax liability is over 3 years old, it may be discharged in bankruptcy, but there are qualifying conditions to be met. Often though, some taxes may be cleared through bankruptcy. Myth 11. I can only file bankruptcy one time. Not True. A person can file bankruptcy more than once. You can always seek relief under a chapter 13 at any time, but there are time limits as to when you can file between chapters that may affect your discharge. Myth 12. Bankruptcy prevents ever getting credit later. 18 www.robertjpellegrino.com Not True. As soon as your bankruptcy discharge is filed, your debts will be eliminated and your credit score, with proper management, will begin to improve. Make timely payments and creditors will see you are trustworthy. Myth 13. My creditors can still call me for money after I file for bankruptcy. Not True. There is immediate protection for you and your property once a bankruptcy is filed. Creditors are prohibited from contacting you regarding your debts and can be penalized by law if they disregard these notices. Myth 14. Bankruptcy breaks apart families and is more trouble than it's worth. By reducing current debt, families who file for bankruptcy move forward towards brighter futures. Their decision to file bankruptcy provides welcome relief from overwhelming financial obligations. The bankruptcy acts as a beacon of light at the end of a dark tunnel, provides a legitimate restructuring of debts and affords you a fresh financial start. 19 www.robertjpellegrino.com The truth is that bankruptcy is not for everyone, but sometimes it is the best solution for saving a home. STEP SEVEN. FIND THE RIGHT ATTORNEY. Would you go to a foot doctor to have heart surgery? For the same reason, you need an experienced lawyer, who practices primarily bankruptcy law to handle your case. You need someone who is willing and knows HOW to fight for you. You want an attorney who knows the dirty little tricks the mortgage lender and closing agents use when trying to cheat you out of your American dream. You deserve someone who understands and who will be at your side and in your corner. Ask how long the attorney has practiced? It should be at least ten years. Ask if they have any petitions dismissed because of their mistakes? Are there any bar complaints against them? Do they actually answer your questions? Are you comfortable with them? Did they explain all your options so you can make informed decisions? 20 www.robertjpellegrino.com Remember, the wheel turns both ways. Be honest with your lawyer. Tell him all the facts about your situation. Prepare for your meeting with him. Have a list of questions you want answered and the documents gathered that will help him with your case. The difference may mean saving your home or losing it. STEP EIGHT GET MORE INFORMATION. This is just the beginning and there's much more to be discussed with the right lawyer. When you're ready to take control and fight back, fight for your home and your family call me at: Robert J. Pellegrino, P.A. 627 Hearthglen Boulevard Winter Garden, Florida 34787 (407) 574-5100 e-mail [email protected] 21