How to Avoid a Foreclosure Defense Scam


All too often, homeowners who are in danger of losing their home to foreclosure are under the impression that they can’t afford to pay for the assistance of an experienced foreclosure attorney.

This leads people to seek out alternatives to saving their home. You may have seen advertisements for services that make ‘too good to be true’ claims; they can often be found in local newspapers, on bulletin boards or on random signs near your home (often on telephone poles or staked into the ground.)

These “services” are very often scam artists disguised as a foreclosure defense or loan modification company. Typically, they’ll entice you by claiming to charge only a one-time flat fee amount that is less expensive than retaining a foreclosure defense attorney.

For that one-time flat fee, the scammer company will make lofty promises in relation to your specific money problems. If you’re about to lose your home to foreclosure, promises will be made to “save your home,” “stop the foreclosure,” “negotiate a loan modification,” etc.

While all of these false promises are being tossed around, the fraudulent foreclosure defense company may begin asking for more money in order to continue negotiations that have taken “longer than expected” or to initiate an automatic stay. Because of the addition of more and more fees, you will almost always end up paying a scammer a lot more money than a certified foreclosure defense lawyer!

Will a fraudulent foreclosure defense company actually help me save my home?

So, you’re thinking, “Ok; I may have gotten taken for more money than the deal I thought I was getting, but at least my house will not be sold at Sheriff’s Sale.” You may be kicking yourself for spending more than you had to, but as long as your foreclosure is stopped, you’ll probably feel somewhat relieved.

The problem with that line of thinking is that these foreclosure defense scammers don’t actually plan on doing any work on your case at all. Their solitary goal is to take your money. In some cases, they may use some of your money to pay a third party to negotiate a loan modification for you (which will do nothing in terms of stopping a foreclosure), while they keep the rest of your money as profit.

Throughout the vast majority of this process, the scammers will lead you to believe that they are constantly working on your case – filing paperwork and negotiating with your lender as your foreclosure defense team. In reality, almost nothing is actually being done to further your case along at all.

Some foreclosure defense scam artists may even make bold claims that suggest they are working with or for the government or your mortgage company in order to increase your comfort level. Multiple promises will be made to you about what they can deliver in terms of saving your home. If your home is already in foreclosure, it’s important to know that a loan modification will not stop or even delay the foreclosure process in the slightest.

If you are facing foreclosure and wish to save your home, you need a New Jersey foreclosure defense attorney working for you. Although an attorney’s fees may seem higher up front, the alternative is to pay smaller amounts out over a long stretch of time to a scam artist. In the end, your certified and experienced attorney may even come out costing LESS, and you will have gotten the results you wanted.

Veitengruber Law has saved many homes for New Jersey residents who are struggling, and we will continue to save more homes for those who need help. Paying our fees is beyond worth it, because we do not stop working until your home is saved, and we don’t make any promises we can’t keep.

Foreclosure vs Deed in Lieu: Which is Right for You?


When it comes to debt resolution, there are quite a few options, and many of them can be confusing and/or overwhelming at first. Although you have probably heard the term “deed in lieu of foreclosure” before, you may not be completely sure of what exactly it entails. Its meaning may be of particular interest to you if you are currently struggling to make ends meet, and if you have a mortgage loan.

When you begin struggling to pay your monthly bills, one of the first things you should do is take a good, hard look at your budget. Where can you make some cuts? Are there any services that you could take a step down on – at least temporarily? Once you’ve gone through your budget (including all of your income and all of your expenses for the month) with a fine-toothed comb, does it look like your financial situation will improve with small changes?

If making small changes to your monthly expenses does not pull you above water, it may be time to start looking at your bigger expenses – and your home almost always resides right at the top of that list. Making changes to your mortgage with a loan modification or mortgage refinancing may be a possible solution. These are two options that can sometimes bring your monthly mortgage payment down enough that it becomes manageable once again.

If you’ve already gone the loan modification/refinancing route only to find that you’re still fighting an uphill battle, your options become: selling your home, listing your home as a short sale, foreclosure, or applying for a deed in lieu of foreclosure.

Today, we’re going to focus on the last two: foreclosure vs deed in lieu of foreclosure.


If you’ve missed a mortgage payment, or several, your lender can foreclose on your property. Essentially, this means that they can kick you out (due to the fact that you are failing to hold up your end of the mortgage agreement) and take the house back from you. This may sound like an acceptable resolution to your problem, however, your lender can also obtain a deficiency judgement against you if they don’t make enough money re-selling the home to cover your unpaid mortgage. For example, let’s say you owe $210,000 on your home when it goes into foreclosure, but the bank is only able to sell it to someone else for $190,000. That $20,000 difference can become your responsibility. Additionally, having a foreclosure on your credit report will cause your credit score to plummet.

Deed in Lieu of Foreclosure

In plain English: ‘in lieu of’ means ‘instead of.’ Instead of your lender taking your home away from you via foreclosure, you can approach them and offer to give back the property (and the deed to same). Pros for a deed in lieu include: no embarrassing Sheriff’s Sale, and giving your lender plenty of notice that you’re having trouble paying your mortgage means that they may be more inclined to forego charging you the deficiency amount. If they do charge you, the amount you owe may be smaller, and you have the added benefit of coming to an agreement on the amount together (with the help of your attorney). The fewer surprises, the better! Although a deed in lieu will also hurt your credit score, with all of the other factors taken into consideration, it’s usually the better option.


 Image credit: Julia Manzerova

My Bank Won’t Accept a Deed in Lieu of Foreclosure


Unfortunately, banks and lenders are under no obligation to accept a deed in lieu of foreclosure application from you, or from anyone, for that matter. While it may seem like a much more attractive alternative than foreclosure for you, deeds in lieu are not popular among most lenders.

What is a deed in lieu of foreclosure?

Filing for a deed in lieu of foreclosure (also referred to as a DIL) is an option for a distressed homeowner who is either having trouble paying his monthly mortgage payment or is unable to do so at all due to a change in life circumstance. A DIL is a process in which the homeowner essentially gives his home to the bank and walks away.

Since foreclosure is such a negative event to have listed on a credit report, many people desperately try to avoid foreclosure at all costs. A foreclosure happens when the bank or lender essentially puts your home up for sale if you have not been making payments. You must vacate the home and find another place to live. Even worse news regarding foreclosure is that afterwards, the lender can still sue you for what is known as a “deficiency judgment.”

If the bank secures a deficiency judgment, the homeowner will then owe the bank the difference between what was still owed on the mortgage and what the bank was able to sell it for in a foreclosure sale. So, while you will have already lost your home and your credit score will be marred, you will also have the possibility of still owing money to the bank. All of these reasons combined are why many people are choosing to apply for a deed in lieu of foreclosure.

A deed in lieu of foreclosure (DIL) occurs when the lender agrees to accept ownership of your home without pursuing foreclosure or deficiency judgments. It is important that you get a detailed agreement in writing during your deed in lieu process, so that you are assured that there will be forgiveness of any money you may still owe on the mortgage, along with any deficiency between what is still owed and what the home eventually sells for.

Lenders are hesitant to accept deed in lieu applications. The main reason for this is that they are in the money business, not the property business. Taking care of a home that they now essentially own (via a deed in lieu of foreclosure) means there will be further costs in order to maintain the home, such as homeowners fees, taxes and general upkeep of the home’s exterior and interior until it can be sold.

In order to increase the chances of your deed in lieu application being approved by your bank, you’ll have to be able to prove that you are indeed suffering from significant financial hardship. When a lender sees that you are at least a month behind on your mortgage payments, they are more inclined to accept your proposal.

Additionally, property with liens on their title are not attractive to lenders for a deed in lieu. It’s also extremely important that all of your DIL application paperwork is filled out completely and correctly.

Deeds in lieu of foreclosure do appear on your credit report and will cause an impact on your credit score, though it will be much less of an impact than a foreclosure. Alternatives to filing for a DIL include applying for a loan modification and applying for federal assistance through the Home Affordable Modification Program (HAMP). Both of these options will avoid any negative effects on your credit report or credit score.

To learn more about the specifics behind filing for a deed in lieu of foreclosure or applying for a loan modification to make your payments more affordable, contact Veitengruber Law. We have achieved DILs for many clients before you, and we would love nothing more than to help you get the best result possible as well.


Photo credit: Images Money (flickr)

Loan Modification Made Easier With HAMP Tier 2

Photo courtesy of Tiger Girl

If you have received a Notice of Foreclosure on your home, don’t panic. There are some effective steps you can take to avoid foreclosure, thanks to some new governmental guidelines that were just added to Obama’s ‘Making Home Affordable’ program. The changes became effective on June 1, 2012 with the main goal of making more homeowners eligible for the program and decreasing the number of foreclosures.

The ‘Making Home Affordable’ program’s new guidelines are being called the Home Affordable Modification Program (HAMP) Tier 2. Under HAMP, the qualifications for loan modification have been expanded, and deadlines have been extended to December 31, 2013. Fannie Mae or Freddie Mac loans, and those from the VA or FHA are not eligible for modification through HAMP Tier 2.

If you are a financially distressed homeowner, or are in imminent danger of foreclosure, George Veitengruber, Esq.,  will sit down with you to discuss your new, expanded options under HAMP. We specialize in loan modification and credit repair, so we are up to date on all of the governmental programs that will keep you in your home. For example, HAMP Tier 2 now allows for up to 3 mortgage modifications per individual, and has expanded to include displaced homeowners. Relief is also available for unemployed borrowers (Through HAMP’s UP initiative), who will be considered for HAMP relief once they find employment or 12 months have passed.

A requirement under HAMP is that your monthly principal and interest payments must be reduced by at least 10% after the loan modification. If this is not possible, your mortgage will not qualify for HAMP assistance. Additionally, condemned homes are not eligible to qualify for help under HAMP and the Making Home Affordable Program.

To take advantage of these governmental revisions and find out exactly how you can avoid foreclosure, give us a call today. We can explain all of the fine details of loan modification and the HAMP Tier 2 revisions as they apply to your unique situation. We can show you how to reduce your monthly mortgage payments, make life affordable again, and keep your home.