Category Archives: Foreclosure Mediation

Foreclosure mediation is a one way to defend foreclosure allow a defendant to have an ear.

If the Bank Denies my Modification, what are My Options?

If the Bank denies your loan modification and you still want to keep your home, a  Chapter 13 may be an option; however, you will still need to show the U.S. Trustee that you can both afford to stay current on your mortgage payments as well as pay off your prearrange (the amount you are behind) over a 3 to 5 year period (see below for discussion on Chapter 13).

If you really cannot afford to keep your home, you should look into options to avoid the sale of your home at a sheriff sale, such as a deed in lieu or a short sale. If your home is sold at a sheriff sale, you will be liable to the bank for the total amount of the Court’s Judgment (the payoff); in addition, the foreclosure will hurt your credit score.

Summary

If a person does not qualify for a loan modification and still wants to keep his home, he can consider a Chapter 13 Bankruptcy.  If he cannot keep his home and wants to be free of liability on the mortgage note, he should look into a deed in lieu or a short sale
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Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

The Court Approved My Request to Mediate; can the Bank still Refuse to Modify My Loan?

Yes. Getting the court to agree to mediate your case does not always mean that the bank will modify your mortgage note. Even if court approves your request to mediate, the bank will still want to verify through financial documents that you can afford your loan.

There are Federal programs which may assist a homeowner to qualify for a loan modification. For example, there is the HAMP program, or Obama Plan, where the bank will try to lower ones mortgage payments to 31% of his gross income. However, a person may still not qualify under this if his total debt to income ratio is beyond 55%. There is also a new program called “Hardest Hit” whereby an individual hardest hit by this economy may qualify for government subsidization of his mortgage payment; however as of the writing of this pamphlet, the terms for qualification of the program have not yet been determined.

If a person’s income is high enough that he does not qualify for one of the above Federal Programs, he may still qualify for an “in house (bank)” modification; however the bank may still deny the loan modification if the payoff of the home far exceeds the appraised value.

If the bank does not approve your loan modification, your case will go back onto the Court’s foreclosure docket and your home may be sold at a sheriff sale.  If you cannot keep your home should still consider doing a short sale or deed in lieu to try to avoid  liability on the note.  Because of the various obstacles involved with mortgage modification, it is important to seek the advice of an attorney with strong experience in these matters.

Summary

When determining if a homeowner qualifies for a loan modification, there are various questions and issues that arise, namely, first, whether a person qualifies under a Federal program; if a person does not because his income is too high, then he may qualify for an “in house” modification; but the bank may still deny the modification if the payoff of the home is well above its appraised value.

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Attorney Eli Tamkin is a Cleveland bankruptcy Lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

What is a Reaffirmation Agreement in a Bankruptcy?

Many times when a person files a Bankruptcy, the bank will send him or his attorney a document called a “reaffirmation agreement.” With this, the bank is asking him to reaffirm the mortgage debt if he wants keep his home.  Many times the reaffirmation agreement will include better mortgage terms than the original note—this is done by the bank to induce your agreement.

Under the law, when one is in a bankruptcy, he is not required to reaffirm this debt or any other, but it is another option for him to keep his home. One should file the signed reaffirmation agreement with the court prior to the discharge, or within 60 days after the 341 creditor’s meeting. If one reaffirm’s his mortgage note and then goes into default because he cannot afford to make the payments, he will be liable for the note even though he had filed a Chapter 7 Bankruptcy.

There are instances when mediation is better for a homeowner than signing a reaffirmation with the bank (see below, for discussion on mediation).  For example, sometimes a person can discharge his mortgage note in a bankruptcy and then continue on to mediate the terms of his monthly payment, even though he may not liable for the note if he defaults; whereas, if a person signs a reaffirmation agreement, he will still be liable for the mortgage note if he later defaults.

Summary

When a homeowner is in bankruptcy, he may sign a reaffirmation agreement; many times, the terms in the reaffirmation agreement will be better than the original note.  There are instances when it is better for a homeowner to mediate his mortgage terms in court than to sign a reaffirmation with the bank in bankruptcy.

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Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Can I Disharge my Mortgage Note in a Chapter 7 Bankruptcy and Still Keep my Home?

Generally, yes you may if your loan is modified in mediation; but you should consult an attorney about your particular situation.  In many instances the bank will approve a loan modification even though you have already discharged your debts, including your mortgage note, in a bankruptcy; however, as will be discussed next, you will nevertheless be liable for that note if you sign a reaffirmation agreement with the bank during your Chapter 7 Bankruptcy.

Summary

While a homeowner generally can proceed to mediation after discharging the mortgage note in a Chapter 7 bankruptcy, there are exceptions to this rule, and one should consult with a bankruptcy attorney.

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Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Can I Mediate My Foreclosure Case if a Sheriff Sale Has Already Been Set?

Yes.  The Court may approve your request to mediate even though a sheriff sale has been set.  While the mediation will not stop the sale, that sale will not be approved or “confirmed” by the Court.  The Court will first wait to see what the outcome is of the mediation; ie., whether a deal can be worked out with the bank.

Nevertheless, you should still check the court’s docket periodically because at times the court can make a mistake and still confirm the sale. This has happened to me on occasion and I have had to file motions to vacate the sale in emergency hearings.

Summary

While mediation will stop the foreclosure process, it will not stop a sheriff sale; that sale goes forward as scheduled, but the court will generally not confirm the sale and will wait to see the outcome of the mediation.

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Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Mediation in Ohio to Stop Foreclosure in lieu of Chapter 13 Bankruptcy

I read an interesting article called “Filing Bankruptcy: 9% Rise in Personal Bankruptcy Filings with Chapter 7 More Popular than Chapter 13”, which discusses the rising interest of Chapter 7 over Chapter 13 bankruptcies.

In the article, the author correctly states that the Bankruptcy Law was amended in 2005 to make it more difficult for some people to file Chapter 7s and to steer these people instead into Chapter 13s.  Generally,  Chapter 7 involves the discharge or wiping out of ones unsecured debts (credit cards, medical bills, etc.), while Chapter 13 involves paying off ones debts over time.

The new law was intended to prevent some Chapter 7s in cases where the debtors have higher incomes, because presumably they could afford to pay off some of their debts.  The author of the article comments that in fact the opposite has happened:  Despite the new law, more people have filed Chapter 7s since 2005 due to the significant housing slump and deep recession and fewer have filed Chapter 13s then expected.

Historically, Chapter 13s have been used to save ones home from foreclosure because through it one could pay off his arrearage over 3-5 years.  In my opinion, a reason for the decrease in Chapter 13s in Ohio is due in part to the implementation of the mediation program in foreclosures.  Mediation permits an individual to get out of foreclosure by negotiating in court directly with the bank without the need for a Chapter 13. I would refer the reader to the 10 questions and answers  where I discuss the strategic use of mediation to defend oneself in a foreclosure.  In Ohio, Chapter 13s will continue to take a back seat in foreclosure defense while foreclosure mediation I believe will become increasingly popular.

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Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994.  Since then, he has dealt with a variety of legal issues,  including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well.   His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

The Use of Mediation in a Foreclosure Action- An Interview with Eli Tamkin

In this video, Andy Morris, a real estate broker with MortgageRx.org,  interviews Eli Tamkin, Esq.  about mediation in Cuyahoga County in a foreclosure action. Work with a foreclosure defense attorney who has experience negotiating with banks in mediation.

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Attorney Eli Tamkin has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

At the law offices of Eli Tamkin in Cleveland, we represent clients throughout northeast Ohio, including Cleveland, Avon, Painesville, Cleveland Heights, Shaker Heights, Parma, Elyria, Strongsville, Lorain, Independence, Westlake, Lakewood, Maple Heights and Beachwood; and in Cuyahoga County, Lake County, Lorain County and Geauga County.

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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code as well as provide other representation.


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