Loophole to Foreclosure and Get Your Home Back
Loophole to beat foreclosure by failing to pay your mortgage does not usually end up with you outright owning your home. In fact, that’s usually the exact opposite of what happens but a New Jersey man defaulted on his mortgage and ended up retaining ownership of his home, by court order.
The man defaulted on his $520,000 mortgage — this is usually the point at which foreclosure proceedings start, but that’s not exactly what happened, according to the U.S District Court of New Jersey. The man argued that his creditors, Specialized Loan Servicing LLC and Bank of New York Mellon, couldn’t collect on his debt because they didn’t file “A Viable Foreclosure Complaint Within a Six Year Statute of Limitations”.
As humorous as that line is, it’s doubtful the mans creditors are laughing. The man reportedly bought the $650,000 home with $130,000 down and a 30-year, adjustable-rate mortgage, but only made a few monthly payments of $4,165 before defaulting. The outstanding loan is $519,000, just $1,000 less than what the man borrowed, and his creditors now have no claim on his property.
It’s still not an entirely rosy picture for the man — he filed for bankruptcy in March but getting out of a half-million-dollar mortgage is a pretty big victory for someone with financial issues. It’s unclear if the creditors will appeal the decision.
This isn’t your typical foreclosure case. Falling behind on mortgage payments is one of the worst financial issues you can have, because it will trash your credit for several years, not to mention the stress of potentially losing your home.
Of course, most people go into home ownership expecting to be able to pay for it, but given the recent history of mortgages in this country and the gravity of this financial milestone, it’s worth approaching with caution. Before you start home shopping, you should figure out how much house you can afford. Keep in mind that good credit will help you qualify for more affordable mortgage rates, which will greatly reduce the cost of home ownership over the life of your loan. Learn how you can check your credit scores for free every month.
Tags: Bank of New York Mellon, Creditors now Have no Claim on Property, Falling Behind on Mortgage Payments, Figure out how Much House you can Afford, Get Your Home Back From Foreclosure, Loophole to Beat Foreclosure and Get Your Home Back, Specialized Loan Servicing LLC, Viable Foreclosure Complaint Within a Six Year Statute of Limitations, You can Check Your Credit Scores for Free Every Month