I’m often asked “What should I do when I fall behind on my mortgage payments? If you even see the possibility of falling behind on your Mortgage, contact your lender immediately – don’t wait, get help early! This act of initial contact, before letters of delinquency arrive, will help your lender understand that you are facing issues that impede your payments. Do not rely on oral promises, and keep good records of all conversations and information sent.

Effective January 19, 2012, the State of Delaware has initiated a mandatory foreclosure mediation program. You must act immediately after being served with a foreclosure complaint. See the “Delaware Automatic Residential Mortgag Foreclosure Mediation Program“ link on this website for forms and additional information.

Just because your mortgage company is suing you, it doesn’t mean you automatically lose. Many mortgage companies do not initiate foreclosure proceedings correctly, and you have powerful State and Federal laws that can protect you, such as:

  • The mortgage company suing you may not be the same one that loaned you the money in the first place, and thus may not have the right to foreclose;
  • Often a mortgage lender will claim that you owe more money than you really do, by loading up the account with inaccurate and bogus fees and charges;
  • Lenders are required to adhere to important consumer protection laws, and if they don’t, you may have defenses under the Truth in Lending Act, the Real Estate Settlement Procedures Act, or other laws

Additionally, for those who qualify, a Chapter 13 bankruptcy will halt the foreclosure process and/or stop a Sheriff’s Sale. This requires that you have sufficient family income to repay the current monthly payments on your mortgage, your normal living expenses, and a NEW payment, called the Chapter 13 plan payment. This Chapter 13 Trustee payment, in large part, is based on the amount required to reinstate your mortgage. The maximum time for these payment plans is five years. The mortgage reinstatement figures include the amount past due on your mortgage, based on the number of months your mortgage is past due, plus fees and cost including foreclosure counsel fees and costs.

When we file Chapter 13 bankruptcy on your behalf, the mortgage company will file a Proof of Claim with the District of Delaware Bankruptcy Court, seeking to get repaid these mortgage arrears. We often find that the arrears and fees calculations are not entirely accurate. We aggressively seek to have these issues resolved, by filing objections to the mortgage company claims, and in many cases filing adversary proceedings (lawsuits within the bankruptcy case) to have these overcharges corrected.

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