Navigating Foreclosure: 5 Steps To Take If You Recieve a Foreclosure Notice

DJ Olojo [00:00:05]:

Hey, foreclosure fix family. And welcome to the Foreclosure Fix Podcast. I'm your host DJ Olojo, and I am excited to be here with you today. Our goal is to help 1 million homeowners successfully navigate foreclosure. So if this mission resonates to you, please do us a favor like subscribe and tell a friend and let them know, like, hey, we're here and that we want to help more homeowners. today I'm excited to dive into one of the common questions I often get from homeowners who are in foreclosure. And it's a very simple question, but the question is what to do when you actually get served with the foreclosure paperwork. It's a common question we get, and I wanted to dive into that. So that way we can really help those folks who are stuck in analysis paralysis and don't know what to do.

DJ Olojo [00:00:54]:

So what to do when you receive a foreclosure notice and when you receive a foreclosure notice. The foreclosure notice in some places could be the actual complaint that the lender has given you. Sometimes it could be just as simple as the demand letter saying, hey, you owe this debt and you're required to pay this debt. The next thing that you can see sometimes is actually an acceleration letter saying like, hey, this debt is due and payable in full. So maybe you had a balloon payment and now the remaining balance is due on that balloon payment after you have been making your monthly payments. So there are different type of accelerations or different types of documents that you can receive that will say, hey, you need to pay me all the money you owe me, right? It's not always that you were being a delinquent borrower and you haven't been paying your bill on time. It could be the fact that, hey, you had a loan and that loan had a set maturity date. So whether it be a line of credit or note with a balloon payment, so it's not always a borrower who has done something wrong.

DJ Olojo [00:02:01]:

It just could be something where they didn't know that it was time to make the final payment. And so there are five simple steps that you need to take when you receive any type of demand letter request for the full payment of a loan amount or a notice of foreclosure. And those five simple steps, they seem really easy, but they're nuanced, right? The first thing is going to be open the mail. And that seems very simple, but there's some nuance to that because sometimes when folks are in a tough situation, whether it be depression, whether it be disease, whether it be divorce, whatever may be the case, the mail is the last thing they want to open. And so there's some nuance and some structure to that. The next piece is processing of your emotions. Foreclosure is a traumatic event, so we want to make sure that we process those emotions. The third piece is verifying that it's not a scam and that the documents you're receiving are real and legitimate.

DJ Olojo [00:02:59]:

The fourth piece is contacting the loan servicer and the attorney or the company claiming that you owe the money. And the last piece is making a plan and getting help. And so I want to dive deep into all those five steps so that way you can have a plan that allows you to make the best decision given your situation. So opening the mail again, I don't want to be the oracle of the obvious here. Yes, you should open your mail, but what I've seen in my experience in meeting with homeowners and talking with homeowners who are in situations they never expected to be in, is that sometimes opening the mail is a difficult process. I've seen people who had stacks of mail from creditors, collectors, friends, family, just stacked on a desk. And you got to imagine if you're going through something that you never thought you'd be going through, whether you're getting divorced and the person who you're separating from is the person who handled all the bills or took care. Of all the financial responsibility and you have no clue what to do, or you have a disease that doesn't give you the ability to actually do the normal things that you expect to do.

DJ Olojo [00:04:09]:

You're always tired, you're lethargic you're on medicine or whatever else may be the case. A lot of times if you're just depressed, you have a lot of different issues going on externally. And those issues cause you to kind of be a recluse sometimes and just kind of curl up. And so it's not uncommon that people do not open their mail. But one of the things that you need to do, one of the things that you have to do, is you have to open that mail because you want to see what's going on. And typically when you get these type of letters, they're going to come certified. So you know, it's an important piece of mail if somebody sends it to you certified. And so when you get that piece of mail, you got to open it up.

DJ Olojo [00:04:49]:

The other thing that I often see is that people miss when the servicer has changed for their loan. So by law, servicers are required to tell you when the servicing company is going to change. So you will receive documentation via mail about the servicer, and the servicing letter will tell you the name of the existing servicer, which is the one you probably know, but then also the name and the contact information for the new servicer. So if you miss that piece of mail, or if you miss that email that was sent to you, that's another reason why you may be sending payments to the wrong company. The last piece is that the servicing company doesn't have your correct contact information on file. So for whatever reason, maybe this is a rental property or maybe your phone number changed or whatever else may be the case, they don't have the right location to send you the information. So they're sending mail, they're sending correspondence to the wrong address, and you just are never receiving it. And so that's really important that you have the right address on file.

DJ Olojo [00:05:53]:

And so sometimes a loan can be escalated because the servicing company has reached out to you numerous times to no avail. You are maybe sending the payments to the old servicing company, and they're just holding it in escrow or haven't returned it to you or returning it to the wrong address, and you think everything is perfect when in actuality things are awry. And so that is a situation we often see. So opening the mail is the first step when you receive any type of foreclosure notice. Going back and looking on your desk to see if there's old mail. If you have a PO box you don't check, or Ups box you don't check, or if it's the actual address of the property and you no longer live there. Going and asking the residents of that property whether they be tenants or family or whoever, or if it's vacant, going and checking the mailbox, because oftentimes we see that people have mail there that they have not opened. So that's the first thing to do is you got to open the mail.

DJ Olojo [00:06:49]:

The next thing that you need to do is process your emotions. And what I mean by process your emotions is that foreclosure can be traumatic, not just for the person whose name is on the house, but for everybody who is involved or impacted. Your kids, your family, your loved ones, anyone living in that house, or anyone or your tenants if it's a tenant occupied property, because they may have to move. And so being able to understand that this is a traumatic event and that you should have some feelings naturally towards this situation. You may have self doubt. You may have a feeling of loss, of integrity. Our homes are a place of pride. Our homes are a place in which we want to say, hey, this is my house.

DJ Olojo [00:07:35]:

There's so many memories connected to our home. And so the thought of losing that can be very jarring. And so it's okay to process these emotions. It's okay to feel like, man, I'm hurt. I feel distraught. Those are normal feelings, and they should be expected. But what you can't do is stay in those feelings. You have to understand that you are not alone and that there are numerous people in this country going through foreclosure.

DJ Olojo [00:08:02]:

In actuality, there was a survey done recently where it found out that 73% of people feel some type of stress as it pertains to their finances. And so you're definitely not alone. And I want you to really understand that, that there are other people who are going through this situation just like you. That's one of the main reasons we started this podcast is because we want you to know that there are options available for you to keep your home. In addition to options available for you to keep your home, there's a community available for you to really say, hey, let's link arms together and make sure that we are supporting each other and helping each other during challenging times. After you process your emotions, the next thing you need to do is verify the notice is legitimate. And I can't stress the importance of this right now. In the age of AI, in the age of Scammers from all over the world trying to tap into your pockets, you need to make sure that what you are being told is legitimate.

DJ Olojo [00:09:03]:

And scammers have gotten very good in defrauding people and making people take action and do things very rapidly when they receive jarring letters like a foreclosure notice. So the first thing that you want to do is beware of Scams and you may say, DJ, how do I know if it's legitimate or not? Right? The first thing is, do you recognize the loan servicer? Is this a loan servicer that you've seen before? Is this somebody who you've made payments to? Have you seen correspondence from them? Do you have a login for their website? Does the login look the same? Does the logo look the same or is it a little bit different? So recognizing the loan servicer is the first thing. The next thing is, do you recognize the loan amount? Right? So did you take out a loan on the property that is the same as the amount they're saying you owe? And I'm not talking about interest and fees and things like that, but just the original principal balance. Does the interest rate look correct? Is this a loan you recognize? Right? And then the next question is, have you paid your mortgage? Right? So a lot of times people will say, well yeah, I had a second mortgage that I took out back in 2012. Well, that mortgage still exists. So even if you haven't paid the mortgage for ten years, that mortgage is still around and it doesn't mean you don't owe the money. Or if it's a first mortgage and you have been paying that mortgage, but you've been paying it to the wrong place, that is a red flag. But if you know that you've been paying your mortgage on time and in full, then if you get a document like this, you definitely want to be leery.

DJ Olojo [00:10:50]:

The next thing is, a lot of people have been on COVID-19 forbearance programs and a lot of those programs are starting to end. And so you may be in a situation where you didn't have to pay for an extended period of time. And when we don't have to pay a debt, we get used to that not paying that debt. And sometimes that could be for a year, could be for 18 months, could be for 24 months. Different scenarios out there for different people. But we've gotten used to not paying that debt. And sometimes you get a lot of correspondence in the mail going back to opening the mail that says, hey, your loan payment is about to restart, please be aware that your loan payment will be due coming up soon. And so if you have ignored that and you haven't looked at that and you haven't seen those things and they're saying, hey, I'm reaching out to you, please start paying your mortgage again, that could be problematic for you.

DJ Olojo [00:11:42]:

And so you really want to make sure that if you are on a forbearance program or on an adjusted modification program, where your payment may change from one low amount to a higher amount, or if you are on a variable rate mortgage where your payment adjusts depending on a scale used. You want to make sure that you are paying attention to that. Because those are not scams. Those are legitimate things that could cause you to be in a situation where you do get a foreclosure notice or a demand letter. The next thing is if you think that you are being scammed and you have someone saying, hey, you need to pay me right now. You owe me this money. If you don't pay me by the end of the day, I'm going to take your house or your house is going to the courthouse steps or whatever else may be the case that they'll tell you. To try to get you to act fast, please contact the Consumer Financial Protection Bureau.

DJ Olojo [00:12:35]:

There is a number online for the Consumer Financial Protection Bureau, and they are here to make sure that those scammers get caught and get prosecuted. So please do not get taken by a scam. The next thing is contacting the servicer or the attorney. So you receive the document in the mail. You've processed your emotions, you understand what's going on. You're ready to deal with it. You have verified that it's not a scam because you recognize the mortgage amount. You recognize this is a debt that you did take out and that you want to satisfy.

DJ Olojo [00:13:13]:

The next thing you need to do is contact the loan servicer and the attorney on the documents. The first thing is that no servicer or attorney will demand you pay them immediately. So you won't call up to your loan servicer and they say, hey, you need to send me gift cards right now. You need to make an immediate Western Union cash transfer. You need to log on to PayPal and send me this money. You need to log on to Zale and send me this money. Loan servicers and foreclosure attorneys do not operate that way. They operate using certified checks and wire transfers.

DJ Olojo [00:13:56]:

And in addition to that, this is a business for them. There is no emotion tied to it. So if you're talking to somebody on the other end of the phone and they seem very hostile. They seem as if they are disgruntled, they seem as if they are berating you. You need to know that that could be a scam because when you talk to a loan servicer or you talk to a foreclosure attorney, this is what they deal with every single day. So they understand that when people call in and they're frustrated, they're emotional, they dealt with this day in and day out. And so they are used to customers and clients calling and being somewhat upset or being alarmed about something that caught them off guard. And so they are not trying to scam you.

DJ Olojo [00:14:44]:

They know the statutes, they know the timelines, they know that foreclosure in many states can take many years and in other states may take a few months. But they know that they have sent this document to get your attention. And ideally, the goal for a servicer or foreclosure attorney is not necessarily to foreclose, but it's to come to a resolution with the borrower. And so the first thing is that you should never be expected to just pay money via a medium that is not a certified check or a wire transfer and most likely it will be a wire transfer. The next thing when you talk about the servicer or you talk about the foreclosure attorney, the servicer should be a national company that you'll be able to look up online and that servicer will have an NMLS number. So you'll be able to look that company up and you will know that that company is legitimate because they have licenses in the state in which they are collecting the payments for your loan. The other thing about the foreclosure attorney, most foreclosure attorneys will have an office in your state. And so if you are talking to somebody who is saying, hey, I'm an attorney in Hawaii, but your loan is in New York, unless they have an office, there just be a little leery, right? Most states require that the attorney foreclosing has some type of physical office in that state.

DJ Olojo [00:16:10]:

Now, that is not necessarily the case 100% of the time, but typically is the case. So those are things that can cause red flags for you. So definitely keep that in mind. The last thing is these people want to work something out with you and so do not be afraid to call them and see what options are available to you. And without knowing your options, without understanding exactly what you can do and what you can't do in these situations, you are not armed with all the options available. And so you have to call and know your options. The last piece is you have to make a plan and get help. And when I say make a plan, you have to learn your options.

DJ Olojo [00:16:53]:

But then also you got to decide if you want to keep your house or you want to let it go. And that is where the real question happens is, is this a house that you want to keep? Is this a house you want to stay in? Whether it's a rental property or your primary residence or whatever else may be the case, do you want to still keep the house? Because if you want to keep the house, you have one set of options. But if you want to let the house go and you want to sell the house or just do a cash for keys or whatever else may be the case, you have a different set of options. So making that decision about keeping the house or letting it go is really paramount to helping you understand what direction you go in. Now, you can definitely feel free to explore both directions at the same time as you do your due diligence. But if you understand what you're trying to accomplish, it allows those people who are helping you to better guide you and direct you. There's also free help from the United States government. I can't stress this enough.

DJ Olojo [00:17:51]:

There are tons of different companies out there who want to charge you to kind of help you with foreclosure, and some are legitimate and some are not. But if you do not have the financial resources, there is free help available from the United States government. There are foreclosure counselors in every state around the country that you can be connected with. If you just go online, go to the HUD website and just type in foreclosure counseling, you will get free help available to you. Now, if you want to use a professional like an attorney or something like that, they are not free. But a lot of times attorneys, in particular bankruptcy attorneys or foreclosure attorneys, they may be willing to do a consultation with you free for 30 minutes or so. So definitely look into that as you identify what the best plan for you is. Next, you want to ask your friends and family for help.

DJ Olojo [00:18:47]:

What I mean by ask your friends and family for help if you are not technologically savvy and you are not used to using a computer or going online to check for these resources, there may be documents that you have to submit online. And so you need to ask friends and family to help you with those documents. The other reason I say you may want to ask friends and family is because if your default is a very small amount and maybe you don't have the money right now, but you're going to get a bonus in the future. Or maybe you're retiring soon and you are setting yourself up to live on a fixed income, and you're going to have a steady payment. Your friends and family may be able to help you financially get over this. So I'm talking about asking your church, ask local assistance programs for help, all those different things that sometimes our ego won't allow us to do now is the time to consider doing those things because they're very important to your ultimate financial future. The most important thing in this situation is that you have to take ownership. And what I mean by that is that there are tons of people out there who will help you with your foreclosure.

DJ Olojo [00:19:58]:

I'm here to help you. I'm giving you this advice because I care about you and I want you to succeed. But at the end of the day, this is a you problem and so you need to take ownership of this situation. You can have as many people as you want on board to help you. Your attorney, your friends, your family, your kids, whoever may be there around, they can all help you with this problem. But you need to take ownership and make sure that at the end of the day, you are the one double checking to make sure things are done correctly. That you are the one ensuring that you get to keep your home, that you are the one calling and checking in with the servicer. And so I would say the most important thing you need to know is that you need to take ownership of the situation.

DJ Olojo [00:20:47]:

So with that, those are the five steps you need to take in order to handle your foreclosure situation. And these are just five high level steps. Each step definitely is nuanced and has more detail. But if you are served with a foreclosure letter and you are worried, afraid or scared, we get it, we understand. We have been there. We have been around the table with homeowners who don't know what to do, who are looking for hope and who are trying to find the best way to move forward. Take these five steps to help you rebuild your financial future. And again, those steps are opening the mail, processing your emotions, verifying the documents are legitimate, contacting your loan servicer and foreclosure attorney making a plan and get help.

DJ Olojo [00:21:39]:

So that leads us to my favorite part of the podcast which is our Bow Tie round where you, the listeners, get to tie one on with Today, your host. So let's tie one on. As you know, the B stands for the best advice I have for someone in foreclosure. The O stands for One Thing I'm grateful for and the W stands for my wildest or most interesting foreclosure related story. So with that being said, the best advice I have for someone who is facing foreclosure right now is to make a decision if you want to keep your house or if you want to get rid of your house. By making that decision, you will put yourself in the best possible situation to act. And what I mean by act is that you won't be double minded. You will know exactly which direction you want to go in and I want you to try to keep your house.

DJ Olojo [00:22:33]:

I'm going to push you in that direction when it makes sense. There are some situations where it doesn't make sense to keep your house, but oftentimes it does make a lot of sense to keep your house. And I would love to see you do that. The one thing I'm grateful for right now is being able to host this podcast and speak to listeners who find themselves in a challenging situation. Life is tough, life is difficult. And being able to hopefully provide you with some encouragement, provide you with some advice, and provide you with the opportunity to take action to change your financial situation is something I am so grateful and so humbled to have the opportunity to do. My wildest or most interesting foreclosure related story is what inspired me to create this podcast. I have been a real estate investor for over a decade and I have renovated and brokered numerous real estate transactions.

DJ Olojo [00:23:39]:

And in my years of experience, the story that is just ingrained in my head is from a time when I was at the foreclosure auction and this is in Georgia. And the way the auctions are set up in Georgia is basically the first Tuesday of every month you go to the foreclosure auction and different attorneys come out and they cry out the properties in which they are trying to sell. And on this particular day, there was a family there and the family was pretty much begging people not to buy their house. They had exhausted all of their resources, exhausted all of their relational connections, and their last ditch attempt was to tell people, hey, please don't buy my house, please don't buy my house. And so for hours it was a husband, a wife, and the kid in a stroller. They were just pacing back and forth around the courthouse steps, which is where they auction the properties, just asking people, please don't buy my house. Giving people the address and saying, don't buy my house, please don't buy my house. I don't have anywhere to go, I don't have anything to do, I don't have any place that I can go.

DJ Olojo [00:25:10]:

And so that picture, that image of that family is really seared in my brain because I think about all the different steps they could have taken to avoid being on the courthouse steps that day, all the things they could have done differently. And I don't know their story, I never saw them again and I'll probably never get to ask them what happened. But that's the reason why this podcast is important to me. That's the reason why helping homeowners save their home is important to me is because when I saw that family, it just made me realize that there has to be a better way. And so that is my most interesting foreclosure related story today. Well, I sincerely appreciate you joining us today on the Foreclosure Fix podcast. Please do us a favor like subscribe and tell a friend. You can check us out on the Foreclosurefixpodcast.com or online on YouTube.

DJ Olojo [00:26:14]:

So please, peace. Until next time. Thank you so much. God bless you. I love you and welcome to the Foreclosure Fix family. The views and opinions on this podcast are for informational purposes only and should not be construed as legal advice. If you have a specific legal question, we highly recommend you contact a qualified legal professional.