Rep: Foreclosed owners should squat in their own homes

If you're poor and the bank is coming for your home, Congresswoman Marcy Kaptur has a plan for you.

Just squat, she says.

Yes, this Ohio Democrat is actually encouraging her financially distressed constituents whose homes have been foreclosed upon, to simply stay put.

In a Friday report, CNN's Drew Griffin explored the case of Ohioan Andrea Geiss, whose home was foreclosed upon in April.

"Behind in payments, out of work, a husband sick, she had nowhere to go," said Griffin. "So, she decided to follow the advice of her Congresswoman and go nowhere."

In Lucas County, Ohio, over 4,000 properties were foreclosed upon in 2008, reports CNN.

"So I say to the American people, you be squatters in your own homes," said Congresswoman Kaptur before the House of Representatives. "Don't you leave."

She's called on all of her foreclosed-upon constituents to stay in their homes and refuse to leave without "an attorney and a fight," said CNN.

"If they've had no legal representation of a high quality, I tell them stay in their homes," Kaptur told Griffin.

Kaptur is a high-profile advocate of an increasingly popular mode of fighting foreclosures best known for it's key phrase: "Produce the note."

By telling a bank to "produce the note," a homeowner can delay foreclosure by forcing the lender to prove the suing institution is actually the same which owns the debt.

"During the lending boom, most mortgages were flipped and sold to another lender or servicer or sliced up and sold to investors as securitized packages on Wall Street," explains the Consumer Warning Network. "In the rush to turn these over as fast as possible to make the most money, many of the new lenders did not get the proper paperwork to show they own the note and mortgage. This is the key to the produce the note strategy."

And Friday's segment on this growing foreclosure fighting "movement" was not the network's first. Earlier in January, CNN explored one person's strategy in demanding her bank "produce the note," only to find that the lender had "lost or destroyed" the evidence of debt ownership. Such a revelation can significantly strengthen a homeowner's position when asking to renegotiate a mortgage.

That these banks, many of which received billions of dollars in government bailout funds, continue to boot defaulted owners from their homes, makes them "vultures" says Kaptur.

"They prey on our property assets," she said. "I guess the reason I'm so adamant on this is because I know property law and its power to protect the individual homeowner. And I believe that 99.9 percent of our people have not had good legal representation in this."

So far in the foreclosure crisis and resulting meltdown of the financial markets, there does not seem to have been an increase in the number of banks seeking out deficiency judgments against homeowners. On the contrary, the market has really only seen increases in the number of banks attempting to unload their bad mortgages onto the government.

As a result, it may be easier to get a loan modification through the government, if the loans are eventually taken over (like with Bear Stearns or AIG mortgages). But banks have not increased their activity in pursuing foreclosure victims for deficiency judgments.

If homeowners are planning on using the "produce the note" defense to avoid a deficiency judgment, though, they should do that in their defense to the bank's foreclosure lawsuit. Immediately upon being served with the paperwork, they can file a Motion for Extension of Time to request an additional 30 days or so from the court to put together their answer. Then, based on the contents of the complaint and the bank's actions up to that point, borrowers can file a Motion to Dismiss based on the bank not providing the original note.

In their answer to the complaint (which would not have to be filed until after the Motion to Dismiss has been ruled upon), homeowners can claim the bank has suffered no losses because of its bailout by the government. To sue for foreclosure, the bank must suffer a loss on the contract -- it can not transfer the note to the government and still sue for recovery of damages.

This defense may not have been used yet, and how far it will get homeowner is debatable, but the longer borrowers can drag out the lawsuit, the better chance they might have to force the bank to negotiate a loan modification, deed in lieu, or other solution.

If nothing else, homeowners can probably hire an attorney for a few thousand dollars and get an extra 6-12 months to live in the foreclosed house mortgage-free. By then, the bank may be willing to negotiate a deed in lieu just to get control of the property and move the owner out of the house.

In those negotiations, borrowers can specifically demand that the bank give up any right to sue them again for a deficiency judgment or any other damages. Although the deficiency may not be a problem, this route may give homeowners the peace of mind they are looking for.

If you have a mortgage that the government acquired through its rescues of Bear Stearns or AIG, you may have an incentive not to pay your mortgage anymore and stick the government with the bill. Through a new program, the Federal Reserve is looking at modifying mortgages that the government took over as a result of bailing out these two corporations.

The program, called the Homeownership Preservation Policy, is open to homeowners who are behind in payments by at least sixty days. For those borrowers who are still current on their homes but have seen serious declines in value or would just like to have a lower mortgage payment, missing a couple of monthly bills should be fairly easy. Of course, the program is not open to families who are making their payments on time -- after all, these diligent, hard-working people are the ones footing the bill for these types of programs.

But for the borrowers who have faced a financial hardship or those who just do not want to pay such a high mortgage anymore, the Fed's new policy may offer relief. Instead of facing the loss of the house through foreclosure of the loan, homeowners can have the government reduce their monthly payment through a loan modification -- a solution to foreclosure that is often very difficult to qualify for from commercial banks.

Of course, this program, far from actually preventing the foreclosure rate from rising even further, will simply encourage more people to become sixty days late in their payments. Because the government now owns these mortgages, foreclosure may be off the table, but the policy will encourage the devaluation of mortgages assets as families who are on time now decide to take advantage of a potentially lower payment.

Just as with all of the government's programs to stop foreclosure so far, the Homeownership Preservation Policy will fail. And once it does, it will be declared a success and funding for it will increase. The program only involves mortgages that were acquired through the bailouts of Bear Stearns and AIG for now, but once it fails to affect the foreclosure crisis, expect it to expand to other types of mortgages.

Thus, homeowners are being given more incentives to leave behind their overvalued homes and unaffordable mortgage payments in the hopes of a government bailout. And why shouldn't they take advantage of such programs? The government has bailed out nearly every company that has requested assistance -- why not homeowners themselves directly? Just as corporate CEOs are rewarded for driving a company into the ground, borrowers should have the same right to take on too much debt, not be able to pay it, and have the government steal or print money and assume these losses.

Citation
Fisher, Eric. (2009, January 26). The Venture Capital Well Runs Dry. Street & Smith’s Sports Business Journal, 11.38, 1+.

Purpose
The purpose of this article was to examine trends in venture capital investments in the sports industry in light of current economic conditions.

Summary
The severe downturn in the American economy has affected venture capital investment in the sports industry in a number of ways, particularly at companies concentrating in digital media. Digital media startup companies have always looked to the venture capital market for funding, but recessionary conditions in the market have begun to curtail traditional lending, as well as investment by venture capital investors. In the year 2008, such investment projects fell by a considerable amount, and digital media companies have been forced to become more competitive or to settle for less funding. Investment money is still available for deals, but firms must have more than just a good idea and a rough business plan in order to be considered by a venture capital firm. A more robust business plan, a track record of success, and a consistent level of audience growth is now necessary. Firms must also be developing a product or service that is innovative, rather than an attempt to compete with similar offerings by larger corporations. As well, companies must not rely on either advertising-based or subscription-based revenue models, as venture capitalists are demanding a more balanced combination of the two. The value of digital media projects has been declining in the recession, but this has created investing opportunities at the right price level. While venture capital firms may not see much return on their investment in the short- to medium-term in the economy, there is an incentive to fund startups at lower prices now with an expectation of high returns in three to five years.

Conclusions
Stricter investing criteria make it more difficult for digital media firms in the sports industry to obtain capital. Frequently, startup companies like the ones in this industry rely on venture capital investors more than commercial banks for funding. While funding for new companies has significantly contracted and companies’ values have adjusted downwards, the stricter investing criteria indicate that managers whose projects that can show a track record of success and continued growth will receive funding. The capital market has not frozen for digital media companies in the sports industry, but only the most deserving companies will receive funding while the economy continues to suffer.

Implications
The article shows that, more than a credit or investing crisis, the economy may be experiencing a value crisis. Managers of firms expecting 2006 prices for their digital media products or services may have few interested investors. Digital media firms whose values have declined due to overall declines in the economy can still find funding for projects, but only if they are able to work with less capital up front. On the positive side, venture capital firms still have access to investment money, despite the recession, and are willing to put it into projects with little expectation of a quick return. Management from firms providing and demanding capital can still create mutually-beneficial deals for their companies. The fact the investment criteria has become stricter will force managers to come up with good ideas and establish a proven track record before they can expect private funding for their projects. This will only make the digital media component of the sports industry stronger in the future, as nonperforming companies will have to reorganize or abandon their projects.

Can the government really save the banking system? What does it mean that the banks have such low stock prices right now? What should ordinary people like us do to protect ourselves against the government's destructive policies? These are just a few of the questions that people are asking themselves as they watch the US economy slide into a depression.

The fact that banks have very low stock prices now compared to what they were just a few years ago proves how little trust there is in the American banking system. The banks took advantage of their creative financing schemes and wasted all of their trust around the world on subprime mortgages and securities fraud. Now that so much corruption has leaked out, there is no private capital available for these companies.

So the government has stepped in to begin nationalizing the banking system. Although politicians state that this is the last best hope to prevent a complete meltdown and save the world, and that they are only doing this reluctantly, government has always wanted to take more power. It already has control over the central bank through the Federal Reserve. Now it is taking ownership of the banks, where most of the money in the economy is created.

Nationalizing the banking system through the TARP and other methods is not so much an indication of socialism as it is of fascism in America. The banks will not be owned by "the people," but instead seem to be entering into partnerships with government, where bureaucrats will place restrictions on salaries, bonuses, and dividends, while dictating how the companies are run and who gets loans. The taxpayers, while receiving none of the benefits of the system, will be left on the hook.

The real danger is if the government takes on so much bad banking debt (from defaulted subprime mortgages, foreclosed homes, credit card delinquencies, and so on) that it loses its credit rating. US government debt has enjoyed a AAA rating from the credit rating agencies, but this may change if the government has to create so much debt in order to bail out the financial sector of the economy.

Through its inflationary policies, government can wreck vast areas of the world. Weimar Republic Germany, the US during the Revolutionary War, and Zimbabwe today are all examples of how vast money creation impoverishes a people. The role of money in an economy is too important to leave in the hands of politicians, who too often abuse the printing press.

If this happens in America, the dollar's current position as the world reserve currency will be threatened. As a result of this, the American empire itself may be threatened, as the military and the dollar act in conjunction to keep both the most powerful in the world. Lack of money is already turning America into a depression-era police state in some localities throughout the country.

So what is the solution? In effect, families must become their own central banks and leave behind their blind faith in the dollar and the Federal Reserve. People can purchase small quantities of gold, silver, and other hard assets to protect against a government that has so far created nearly $8 trillion to bail out the banks. Although asset prices are falling now, the overreaction to deflation will lead to hyperinflation down the road.

The credit industry is largely a fraud based on the willingness of the average person to believe propaganda. Banks do not actually lend out money, people are not defined by their credit ratings, and there is little a collection agency can do besides pester a family long after the point of prudence and reasonable behavior. But for those families who are being pestered and threatened with lawsuits, jail time, repossessions, or other horrible events, the following tips may help them deal with an old debt.

Frequently, when an account goes into default, the credit card or other unsecured loan will be sold off by the original lender to a collection agency. Numerous laws then become applicable to the new owner of the debt and any subsequent collection agencies. These laws include the Fair Debt Collection Practices Act (FDCPA), state licensing laws of debt collectors, and any other state laws that dicate how individuals or organizations must act when pursuing a debt.

The first step that most collection agencies will take is to send out a letter to the borrowers informing them that the agency is now the owner of a particular debt. The debtors will also be given thirty days to dispute the account or it will be assumed to be valid. There may also be a settlement offer or a proposed payment plan, although this is not required and some collection agencies will just include threats and scary language, instead of trying to solve the problem. These companies would rather force the borrowers into paying back every cent possible, instead of offering a settlement right away.

But when borrowers get this type of letter, they can take either of two actions. The first is simply to do nothing and not respond to the communication from the collection agency. In most cases, the company will sell the account to another debt collector within six months or a year and the debtors will receive another letter from another company with similar settlement offers and language threatening lawsuits and repossessions. But nothing ever really happens with many debts -- the original lender already wrote it off and the collection agencies buy the debts for so little that they can just pursue the easiest, least informed borrowers.

The second action that debtors may take is to request that the collection agency validate the debt. Federal laws provide that collection agencies must prove that they own a debt before they are able to collect on it. When borrowers do not request validation, the complany collecting the debt will assume that it is valid. Fortunately for borrowers, though, most original creditors do not keep very accurate records and it is very difficult for future owners of these accounts to validate them properly.

What is required to validate a debt? For starters, borrowers should request proof that the collection agency has been assigned or purchased the debt (although it can not do both at once). Also, debtors have a right to request a complete payment history in order to find out how the debt has been calculated from the beginning. This includes requesting a copy of every account statement through the original creditor. And finally, without a copy of the original signed loan agreement or credit card application, the debt may not be validated.

In fact, when a company is unable to validate a debt, it can not continue to collect on it. It must cease all collection attempts until it is able to provide the borrowers with the applicable information. Even if the collection agency is a law firm, it still counts as a debt collector under the federal laws and must comply with debt validation requirements. This means that companies may not keep calling borrowers or initiate a lawsuit in court unless it has properly validated the debt. If it takes any of these actions despite not validating the debt, the borrowers may be able to sue under the FDCPA.

Many Americans blame themselves for missing mortgage payments and falling into foreclosure. But not surprisingly, in many cases, it is the lender who may have forced you into this situation from the beginning! If you are facing foreclosure and you feel you've been taken advantage of by your lender, or if they were unwilling to offer help to stop the foreclosure, then you need to find help immediately.

When you first received the loan for your home, your lender was required to provide that loan in accordance with the Truth in Lending Act and fair lending guidelines set up by HUD. If your lender did not follow these guidelines, then the loan they are trying to foreclose on may not even be valid. In these cases, your lender could be forced to write the loan as a new loan, as if it was never written in the first place and you never missed a single payment.

Imagine how much different your life would be if you could change your loan to a new low fixed interest rate and completely forget about all the missed payments. This may sound too good to be true, but here are just a few ways that may help you qualify for this type of program.

1. Inflated appraisals. It is no secret that lenders have used their own appraisers for mortgages and have chosen these appraisers by picking the one who gives them the most favorable appraisals. If an appraiser, chosen by your lender, provided an inflated appraisal to help get you approved for your mortgage, then you have a very strong case against your lender. When an inflated appraisal is given, this allows you to get a loan higher than the value of your home. This happened a lot in the past when borrowers didn't have much money to put down, or to lower monthly payments by eliminating PMI (Private Mortgage Insurance).
2. Stated Income Loans. If your broker knew you couldn't afford your monthly payment and instructed you to provide documents (possibly false or forged) for a "stated" loan, they acted illegally. This also happened quite often in the past. Here is the scenario: You want to buy a new home, but your monthly income does not qualify you for the monthly payment. You told your broker your income and provided docs, but they could not get it approved as a "full doc" loan. At this point, they will either tell you they need you to "state" that your income is higher than it actually is, or even worse, they will do it for you. In some cases, the brokers have even lied for you and provided false documents to "state" a higher income.
3. You thought you were getting a fixed rate, but later you found out it was adjustable. This happens more often than you could ever imagine. Sometimes the borrower notices at closing, but more often, they closer skims over that section and the borrower never even notices. This is a classic bait and switch scam. They promise a lower monthly payment than they can actually deliver, so they just switch to a lower interest, adjustable rate loan to match the quoted payment. This is highly illegal and you should not lose your home if you are a victim of this type of fraud.
4. Your interest rate was different at closing, than what was shown to you on the Truth In Lending statement. When you signed your loan documents, they should have shown you a Truth In Lending statement, which tells you your interest rate, total loan amount, and the term of the loan. This should be exactly the same at closing. If it is not, then you should not have gone through with the loan. But even if you did, it is not too late to get satisfaction.
5. Your broker faked a lease agreement or asked you for fake canceled checks. This type of fraud happens, because your broker is trying to do a refinance loan, rather than a purchase loan for you. Because lenders sometimes allow a leased homes, or land contracts to qualify for a refinance, this can eliminate the need for a down payment or PMI insurance. This happens a lot when friends or family members sell a home to each other. If your lender asked you to state something, or provide documentation that wasn't 100% accurate or true, then it was fraud. Even though you may have though this was for your own benefit, it was illegal advice from your broker.

   There are many other forms of fraud that your lender may be guilty of, so if your lender is refusing to help you stop foreclosure, or if there are other situations that make you suspect your lender of fraud, then you may be able to keep your home, with a new lower interest rate!

   If one of these five scenarios seems familiar, or if you think you have been taken advantage of in another way by your lender, then you need to find help immediately. Many companies and organizations, both private and public, have been helping victims of such fraud for decades now, so do not think that it is too late, or that there is not help available. No matter what your situation is, you should seek the help of a professional to help you get satisfaction on your mortgage.

In a simple model of the economy, households use their income for consumption, tax payments to the government, and private savings. The government also spends the money that it receives from tax payments or simply borrows or prints money in order to spend it. In the current economic climate, though, where prices are declining in some sectors (the housing market being the most obvious example), the supply of money available to households seems to be shrinking even as the government prints more than it has ever done in the past.

When a recession hits, incomes generally fall overall and all three ways that families spend their money can decrease. The fall in consumption was clear this past holiday season as people spent less than in previous years. Local and state governments are pleading with the feds to steal or print more money in order to make up budget deficits. And the savings rate in America has been at zero or negative for years now, although there is some indication that people are beginning to save more than borrow or spend.

Homeowners and other consumers who have taken out too much debt will then arrange to have it either paid off or discharged through bankruptcy proceedings. The nature of the monetary system in the United States, where money is created as debt and only the principal is created (not the interest necessary to pay back the debt), creates a shortage of money. Some people will pay back loans that they have taken out, but they must accumulate the interest by preventing some other borrowers from being able to pay back loans. There is simply not enough money out there for every loan to be paid on time.

Thus, the households that can not pay their debts will be forced to declare bankruptcy, fall into foreclosure on house loans, or the banks will simply have to write off the bad debt. Of course, this gives homeowners and others a convenient way to get out of the perpetual debt system, but some banks, attorneys, and collection agencies may attempt to pursue these debts forever. But discharging a loan through foreclosure or bankruptcy is not a reflection on any family's core values of beliefs, but simply a byproduct of how the monetary system is designed to function.

The Federal Reserve, in order to stimulate spending and borrowing and delay discharges of bad debt, does not easily allow this destruction of the inflated currency and will print more money. When rising prices as a result of inflation is obviously occurring, the government manipulates the numbers downwards to make the problem seem smaller. But if prices decline, this product of deflation is immediately addressed by the Fed printing trillions of dollars of new money in order to force prices back upwards. The government's bailout of the economy is now approaching $8.5 trillion dollars of newly created or borrowed money, which is doing nothing but setting up a possibly hyperinflation in the future.

There is little that the government can do to help the private market recover from a severe recession. The government, in fact, set up the conditions that made a recession inevitable, and is now doing everything in its power to turn it into a depression, if not the Great Depression II. Households will have to begin saving again in order to provide stability to the markets, rather than the government artificially lowering interest rates to discourage savings, all the while debasing the currency. From now until the recovery, the government will be responsible for every home lost to foreclosure or job lost to downsizing, as the private sector attempts to solve the problems created by government in spite of bureaucratic interventions.

Over two years ago, the Center for Responsible Lending predicted nearly two million families were at risk of losing their homes to foreclosure. That was in December of 2006, just as the subprime mortgage industry was collapsing. In the two years since then, much has happened, and these disturbing estimates have turned out to be wildly optimistic.

The banking industry has now collapsed, with virtually all of the Wall Street investment firms that set up the subprime market to fail going out of business or converting to banks in order to be rewarded by the federal government for destroying the economy. The American auto industry has also imploded, with the minor three being given billions of dollars to continue force-feeding unwanted cars into the marketplace.

The government has stepped in to manipulate the economy in numerous ways, from simply handing billions of dollars over the banks to creating an FHA mortgage guarantee program that almost no one has applied for yet. Bureaucrats and politicians have addressed the foreclosure crisis with new programs being created by Congress or the Federal Reserve weekly in order to save the economy.

And the result so far? The foreclosure rate nearly doubled from 2007 to 2008, and could double again in 2009. Nearly 2.4 million homeowners have lost their properties to foreclosure, and hundreds of thousands of workers are losing their jobs each month. Trillions of dollars of new money has been created by the Federal Reserve, inflating the currency by many times. The government has saved us all!

Clearly, stealing money from homeowners and other people in America and handing it over to banks to cover up their losses has not served any good for anyone who is not a corporate executive or power-hungry bureaucrat. Inflating the currency until gas is so expensive that no one can afford to drive and businesses have to shut down, resulting in demand destruction is another evil manipulation of government.

Unfortunately, our warning of two million families being evicted needs to be revised upwards to nearly 5 million families. Because of the government's manipulations of the economy, the money supply, bank lending, and the micromanagement of our lives, there is already reason to believe the depression will be at least twice as bad as originally expected.

And possibly the worst part about the situation: the more the media speaks, the more it tries to sell us all on government as savior of the economy. Nearly ever show and every interview puts all of the blame for the recession on the private sector and all hope for the future in the government, while ignoring the pivotal role of government in setting up the economy to collapse.

(updated below - Update II - Update III)

As the economy continues to worsen, one of the last bubbles to burst will be that of local and state government budgets. They grew at enormous rates during the real estate boom years as property values increased, and they received a large amount of federal aid for infrastructure and militarization of the police force. Now that the economy has fallen into recession, the addiction for local and state governments to grow will be difficult to break.

Some states or cities are already raising the cost of fees, fines, and another charges, along with sales and other taxes. This will only take money out of the hands of homeowners already facing foreclosure and families facing bankruptcy and the loss of jobs and transfer it into the hands of bureaucrats who will use the money to devise new methods of extracting money. The fact that the rape of people's wallets is always done in the name "protecting the public" makes it even more sickening.

Despite falling real estate prices throughout the country, homeowners should not expect a break on their ad valorem (based on the value) real estate taxes. While rising prices are an excuse to impose more taxes on people, falling values are "irrelevant" to the government's propensity to keep growing and micromanaging more of the lives of ordinary, reasonable people. But local governments can not afford to decrease tax revenues voluntarily, as the high foreclosure rate is already draining the counties of homeowners to steal from.

But these are only the overt, public ways that the government will utilize its violent nature to keep growing, despite the fact that its growth in the face of economic collapse will impoverish us all, human beings and bureaucrats included. The government also has many covert methods of extracting more money from decent, hardworking people who work in the private sector to create products and services that the politicians can attach themselves to as a leach.

Especially important to watch out for is any involvement with the city, county, or state police. These former human beings have been turned into heavily militarized, steroid-addicted sociopaths by the federal government's military aid and the willingness of police departments to hire only the most brutal, small-minded applicants. The same applies to administrators and processors in county jails and courthouses who will treat private people as little more than cattle to be herded or sheep to be sheared.

Speed traps are growing and cops are actively out "revenuing," searching out nonviolent "offenders" of vice "crimes" or who "fail to appear" and pay blind obedience to the State's authority. This is done to bring them into the State's gulags, steal their money, and then set them a church date where they will have to follow the rituals of a man wearing a dress court hearing in front of a judge. This is a much more direct way for government to keep imposing its psychopathic violence on the vast majority of nonviolent human beings.

As the foreclosure crisis continues to roll through the country and the economy collapses further and further, despite the best manipulations that the government can devise, one ray of hope is that the State may finally be starved and have to stop growing. Unfortunately, all such transitions are associated with violence from and destruction of the old order, and right now, the desperation of government is on full public display. Raising charges, keeping taxes based on value high as value falls, and bringing the guns of government out in full view are signs of weakness of the State.

UPDATE: Speeding, Parking Tickets on Rise as Government Revenue Source. Watch how fast you drive and check if your headlights and brake lights are working -- you do not want to have to pay hundreds of dollars in fines while you are unable to pay thousands of dollars in mortgage payments.

UPDATE II: I was in Chicago just a few days ago and saw two overweight government agents lurking through the streets checking parking meters. I encountered these two ticket producing walkers within the space of two blocks -- one was walking one way down a street and the other was just around the corner. A few blocks later, the government had put another overweight parasite on a four-wheeler in order to block traffic in one lane while simultaneously handing out tickets.

This type of activity by the government will only increase as times get tougher and the economy slips further into a depression. And the more that the government takes from citizens by force, the deeper the recession is guaranteed to progress. Budget shortfalls of billions of dollars will not be made up simply by stealing more money from people -- it will only make keeping order a more precarious business and further erode peoples' trust in government.

UPDATE III: Do you claim fewer exemptions on your state income taxes, hoping to get a larger refund check back every year? If so, you might want to think again -- when the going gets tough for government, laws like the tax code get set aside. Kansas has stopped processing income tax refunds and may not even have enough money to pay all of the bureaucrats already on its payroll.

Economists must be the least informed group of people on the planet. When nearly every consumer and homeowner believed that the country was in a recession almost a year ago, economists and the government just figured it out last month. Of course, that made the recession "official," which meant it was less wrong, in the government's eyes, to use the word, and also gave the government more reason to interfere in the economy and all our lives.

But what is it that economists really study to determine whether or not the country is in an "official" recession? The most important concepts in studying the broad economy are Gross domestic product (GDP), the consumer price index (CPI), and the unemployment rate. Homeowners should know more about these terms, if for no other reason to defend themselves against political manipulation of the language.

GDP is a measure of the nation's total output. It is measured either as the total income earned in the country, including foreign own factories or workers in the United States, or as the total amount spent by consumers on goods and services. Ideally, these two numbers are equal, although some assumptions are made in order to deal with situations like unsold inventory by businesses.

The consumer price index measures the level of prices for a specific "basket" of goods and services purchased by typical households. This number is computed by the Bureau of Labor Statistics and is used to determine the level of inflation. Unfortunately, the CPI that the government uses does not include food or energy costs, which make the official number seem quite low in the face of rising energy and food prices, as we saw in early 2008. Many economists, however, believe that the CPI actually overestimates inflation for the other products and services it measures.

Finally, the unemployment is pretty straightforward. The Bureau of Labor Statistics conducts surveys on Americans to find out if they are employed, unemployed, or not in the labor force. The labor force is the total amount of people employed and unemployed. In fact, the BLS conducts two different surveys to measure unemployment. The establishment survey determines how many workers firms have on payroll, while the household survey asks individuals if they are working, unemployed, or not looking.

These are the most basic definitions of some of the most important numbers that economists use to make fancy contradictory predictions about how the economy is not in a recession, how the recession is not deep, and how long the current recession will last. Just understanding what these terms means can help homeowners and consumers develop a much-needed distrust of anything economic professionals on television or the radio propose to fix an ailing economy.

Too often, manipulated government numbers are manipulated in order to give the government more reasons to manipulate the economy further. And if that does not work, more manipulation of the numbers will be called for and more power given to the government to save the economy through depression economics. Depression economics, though, will almost guarantee depression prosperity for large numbers of people.

Governments at every level throughout the nation have set up so many requirements on any person or company attempting to engage in business related to banking, real estate, and lending, that it is almost too simple to point out licensing violations. This bureaucratic red tape is good for homeowners using such violations in self-defense when defending against foreclosure in a court of law.

The bad part is that, despite all this government manipulation of the housing market, crooks can and do find their way into the mortgage industry and take advantage of thousands of homeowners every year. And all of the costs associated with these licensing requirements are passed along to the borrowers anyway, when they buy a property and take out a mortgage from a bank or broker to finance their purchase.

Therefore, merely holding a license issued by a state government is really no guarantee of legitimacy or fair dealing. Small time criminals who set up homeowners into a few predatory loans may cause a small number of families thousands of dollars of damage, but they may also be too inconsequential of white collar criminals for government regulatory agencies to dedicate much of their funding to catch and prosecute.

However, it is still a good plan for borrowers to make certain that every person or company they deal with during their real estate transaction is properly licensed. If they find out that no license was in effect, and the mortgage bank knew about this factor or should have known about it, it may have a harder case proving its right to foreclose on a loan down the line. And it may be much simpler for property owners to show conspiracy or predatory lending if the broker and bank acted together to create an unconscionable mortgage.

Loan brokers and real estate agents are currently licensed at the state level. There has been some political will to create new federal mortgage broker licensing laws, but this has not been put into place yet. Appraisers are similarly licensed at the state level, if anywhere.

Banks may be licensed either by the state or the federal government, depending on how many assets it has, how many states it owns branches in, and if it elected to be a federal or state bank. Banks, though, will often be regulated at all levels of government to some degree.

Although filing complaints with the proper state or federal regulatory agencies may not help in a current foreclosure case, especially if the unlicensed party has left the industry and skipped town to avoid prosecution, it may help prevent that person from taking advantage of others later on. As well, if borrowers can show that they were given a loan or sold a home by someone without a state license, it may help bolster the rest of their case as to why the lawsuit should not be allowed to go ahead.

It seems that every establishment publication, website, and television news media outlet has been supporting the idea that the government needs to spend money until the recession is over. But there are numerous problems with this approach, all of which will make the downturn that much more severe and long.

First of all, the government only gets money in a limited number of ways: through taxing, borrowing, or monetizing debt (also known as the printing press). The government produces nothing, so it can not create any value for the marketplace -- all it can do is steal money from the productive sectors of the economy or destroy the measure of value.

So far, the federal government has not seriously considered raising taxes and the Obama administration has even proposed some tax cuts. These may not go very far, though, as state and local governments across the country are increasing taxes and fees, which will only depress local real estate markets even further.

For bureaucrats who are crying for government intervention to solve the housing market collapse, very few are actually attempting to stimulate local markets themselves. Lowering property taxes would be one way to make housing costs more affordable, especially when values have fallen by 40-50% in some areas of the country.

But property valuations are only important when they can be used as an excuse to raise taxes on homeowners. When home prices fall, even by large amounts, taxes are kept at the previous levels. It is easier to ask the federal government to steal from homeowners in order to finance the larger level of bureaucratic parasitism than to lower taxes as the entire ad valorum tax concept would seem to demand.

With all of the bailouts and stimulus packages that have been passed and proposed, the government has borrowed money in the financial markets. In effect, the country has borrowed from foreigners for years to finance consumption, and now that it is unable to pay the bills, the government is asking these same foreign nations to lend more money to bail the country out of the mess caused by too much borrowing.

As surprising as it sounds, other governments have so far kept purchasing US government debt and allowed the country to borrow even more money. Of course, if the stimulus packages do not work to end the recession (which they will not), it is disturbing to see how much money America owes other countries. But if foreign nations did stop lending us money, the entire facade would collapse, and the dollar would lose much, if not all, of its value.

The government has also been relying on the printing press to bail out failing banks and the entire financial system. The Federal Reserve has been creating trillions of dollars out of nothing to help banks hide bad assets, as it allows mortgage securities, car loans, and credit card loans to be exchanged for US Treasury debt. Trillions of dollars have been fed into the financial system this way, allowing the banks to remain in business while still being insolvent.

Can the government really get it right and spend us all back into prosperity? The fact that the government instituted one policy after another to create a spendthrift state and prolonged the Great Depression for over a decade is quite worrying. The fact that it is doing the exact same thing now to spend us out of the current crisis, but on a much larger scale, is even more disturbing.

Months ago, when the foreclosure crisis was raging through much of America, politicians had a brief moment of clarity when they proposed allowing bankruptcy judges to modify mortgages in Chapter 13 proceedings. The banks, of course, fought against the proposal and it was defeated in order to make room for trillions of dollars in free money transferred from homeowners and other Americans straight to the banks.

But now Citigroup, after being bailed out for tens of billions of dollars by the federal government, has seen the light and decided that maybe government intervention in bankruptcy loan modification is not such a bad thing, after all. Thus, the proposal has been reincarnated in both houses of Congress and is expected to pass. While this may be good news for borrowers, it signals something far more serious for the rest of the country.

After all, where does Citigroup get this huge influence to help block a bill when it is introduced the first time which would have helped it avoid needing a bailout, but then turn around and support the bill, assisting in its broader support? It could not be any clearer that the politicians are nothing more than entertainers keeping us all distracted with meaningless hearings and television interviews while the financial power centers make policy in this country.

Politicians are supposedly elected to represent all of us Americans -- not giant corporations, think tanks, and industry associations. But how is the fact that Citigroup dropped its opposition to the bankruptcy reform bill a sign that the proposal has cleared a "key hurdle?" How much is the support of Citigroup worth compared to the suffering of millions of homeowners facing foreclosure and bankruptcy? Obviously to the politicians, it is worth a lot more.

Although the bankruptcy plan is probably overhyped anyway as a meaningful solution to foreclosure, it may do more for homeowners than many of the government's ill-conceived and poorly administered programs so far. The Hope for Homeowners Act has been a complete failure, and more and more families are filing for bankruptcy every day in order to stop foreclosure for a few extra months.

Is it good news that Citigroup, one of the banks instrumental in creating the foreclosure crisis, has dropped its opposition to allowing bankruptcy judges to modify mortgages and that this acquiescence is seen as a major support for the bill? I don't think so. This is nothing more than the bank trying to save face when, in reality, it is just showing how corrupt the political process has become and how much influence the financial giants have in creating, maintaining, and reducing the effects of these crises.

Be sure to check out the new ForeclosureFish.net website, which has been recently redesigned with several hundred new pages of free foreclosure information.

There are also 12 new foreclosure e-books that can be downloaded that address a huge number of topics and solutions to save your home.

Ever wonder how bankruptcy can help you stop foreclosure?
Do you know how a deed in lieu can affect your credit?
What can you do to stop a foreclosure auction days before it happens?

The answer to these questions and many others can be found on the new site. So visit it today and find out how to avoid foreclosure and repair your credit!

If you do not have any other debts besides your home, it might not make sense to file Chapter 13 bankruptcy to avoid a foreclosure. Chapter 13 can turn out to be a pretty expensive repayment plan, so if you do file, you should know what to expect as a monthly payment.

First of all, you have to keep paying your regular mortgage payment to the bank every month. You have to keep on track with the normal payment throughout the period of the Chapter 13 repayment plan. This monthly bill will not be lowered by the courts.

You also have to pay back a portion of the amount you are currently behind on the loan. This is paid back over a period of three or five years, depending on the circumstances. If you are behind by $10,000, then divide that by 36 or 60 months to see how much extra you will have to pay to get back on track and avoid losing the protection of the federal bankruptcy court.

And finally, you will have to pay the court 10% per month as the trustee fee for administering the payment plan. If your normal payment is $1,000 per month, and you will have to pay back $400 extra to get current with the mortgage, add another $140 per month for the fee that goes to the bankruptcy court.

So will that save your home? Will you be able to afford to pay those three items every month until you are back on track? You can propose a 5-year payment plan to the court, but you might be forced into a 3-year plan if your income and expenses warrant it. Can you afford the shorter plan or only the longer one?

These are questions you will have to determine before you file for Chapter 13, and you might want to consult with a personal lawyer to find out more about the process and other options that avoid both foreclosure and bankruptcy. There are also Do-It-Yourself books available online or at bookstores that explain more about Chapter 7 and 13, as well as other solutions to financial hardships.

Yesterday when I was in the car listening to the radio, I heard an extremely interesting commercial advertising loan modifications for homeowners who are unable to afford the current monthly payments. What made the commercial so strange, though, was the fact that these modifications were being offered by a former mortgage broker.

The commercial went something like this. "My name is John Doe and I owned one of the largest mortgage lending companies in the country. I was written up in various trade journals and recognized to be one of the best brokers in the country over the past eight years. Now, after all this experience, I have moved into the mortgage modification industry and am helping people lower their monthly payments by $300, $400, sometimes even $500 a month."

Two questions immediately came to my mine while listening to this seemingly farcical advertisement. One, if this person ran one of the largest mortgage brokerages in the country, why is he still not lending money to homeowners? And two, why would homeowners who were put into bad loans by this mortgage broker trust him far enough to pay for his loan modification services?

Most of the lenders who have left the mortgage industry have done so because the products they were offering are no longer available. In most cases, these loans were subprime mortgages, and no financial institution or investor is willing to buy any more of these. And most of the largest brokerages in the country over the past decade have specialized in subprime loans, many of which have subsequently gone into default and foreclosure.

So it may be safe to assume that, since this radio advertiser admittedly used to own a large brokerage company, it was probably engaged in lending money to people who could not afford to pay it back. Many people who obtained subprime mortgages were never even able to afford the payment on the teaser rate, let alone when the payment adjusted higher after a few years.

But now this individual, after having run a mortgage company during the real estate boom and bubble years, has gotten into the foreclosure help business! First he helps push people into foreclosure, lets go of his mortgage lending company, and rides to the rescue of all the poor fools that he tricked into buying mortgages in the first place in order to help them modify their predatory loans.

Any one who made large numbers of subprime mortgages during the past decade should probably not be trusted to help homeowners suffering from foreclosure negotiate with banks for loan modifications. Borrowers need to consult with an attorney to help them determine the best route to stop foreclosure and if the loan was even valid in the first place. Trusting the same crooks who helped set up and profit from the housing market bubble is not the answer.

Does anyone remember the so-called credit crunch? Lending had dried up in the money markets, financial institutions were no longer making loans to each other, let alone anyone else, and small business owners and consumers would not be able to keep borrowing money in order to pay off previous borrowings. The end of the world was coming and some unwieldy, badly run corporations may actually fail -- the horror!

Well, it turns out that most of it was a hoax, and credit was available in large supply throughout all of 2008. Granted, it did not grow as fast as it had been, and did not grow at all for about six months during the year. But lending broke out of that plateau and continued growing -- bank credit actually stood higher at the end of 2008 than ever before!

But the government and the banks took this opportunity of slower growth than usual to proclaim a crisis in the credit markets that could only be addressed by vast thefts of money from people all over the country. The $700 billion TARP bailout plan was one brilliant idea, and the Fed's various new lending programs were more of the same.

The media, the financial interests, the corporate state, and politicians all used temporary slowing down of the credit market to steal huge sums of money through inflation and give enormous powers to bureaucrats and preferred companies. Everyone was told to be afraid that the complete lack of credit would bring the world economy to a halt and our only savior was government intervention in the market on a scale never before proposed.

Now, though, we are all on the hook for trillions of dollars of private debt, as one failing company after another has been partially or totally nationalized: Fannie Mae and Freddie Mac, insurance giant AIG, Bear Stearns, Citigroup, the entire financial industry, the irrelevant three automakers. And this is only the beginning, of course, with hundreds of billions of dollars still left in the TARP program and many more companies and industries lining up for handouts.

The Federal Reserve has allowed large financial corporations to become bank holding companies just to get a piece of the TARP bailout, from Goldman Sachs to GMAC, the lending arm of General Motors. It may not be a bad idea of homeowners trying to stop foreclosure to group together and apply for bank holding company status in order to have their mortgages paid off by the government. Seemingly everything else is quickly becoming banks.

The credit crisis was a hoax perpetrated on all of us in order to transfer huge sums of wealth to the banks and largest corporations in America and vastly increase the size and powers of the government. The fact is that it was an entirely manufactured fraud designed only to transfer wealth from the very people who had been taken advantage of (homeowners in the housing market) to the banks and bureaucrats who helped pump and dump the market in the first place.

The bailouts were sold to us all as a method of addressing these crises and providing assistance to borrowers and foreclosure victims, but nothing has been done to help homeowners. What we have ended up with is a few voluntary government programs for homeowners, a hopeless Hope for Homeowners FHA lending scheme, and untold, uncountable, unaccountable billions for the banks and politicians who work for the banks.

While there are many factors influencing the economy which will determine how deep the current recession lasts, eight come to mind that illustrate just how much trouble we may be in. The government, the banks, corporations, and consumer spending habits will all combine with the corruption in the housing and mortgage lending markets to keep the economy on shaky ground for quite a while to come.

First, the federal government has been inflating or borrowing money like it is going out of style in order to nationalize corporations and transfer wealth from the people to banks. None of the money that is being provided from the various Federal Reserve programs or the bailout has been adequately accounted for, with banks even refusing to supply information regarding what they have done with the money they have stolen from taxpayers.

The complete collapse of Wall Street and the financial industry has also contributed enormously to the depression. These financial firms created instruments designed to hide money and confuse buyers, a fraudulent scheme perpetrated on the entire world through CDOs, ABSs, MBSs, and more. Once it became clear what kinds of debt were contained in all of those SIVs and other acronyms, the entire facade collapsed, taking much of Wall Street with it.

But this vast handout of money to bail out Wall Street and the banks has not even helped stabilize the financial markets. While credit is growing again, the impoverishing of America to bail out the lenders has meant that credit markets remain tighter than they were years ago. Of course, this is a good thing for most consumers who were taken in by the free money and borrowed more than they would ever be able to pay back.

Fourth, consumers have been tapped out for years now and have been borrowing money on credit cards and Home Equity Lines of Credit in order to replace old debt with new. But now that consumer lending has dried up, these market segments can no longer continue to pay their previous debt bills with more borrowed money. Defaults, foreclosures, and bankruptcies will continue to be the result.

The housing market is not helping the situation, either. Home values were pumped up beyond belief by easy money from the Federal Reserve flowing through Wall Street banks into subprime mortgage towns. Now prices have collapsed and are falling by the day, in some areas by as much as 40% or more. Huge tracts of land are left undeveloped in Florida, Detroit is an abandoned wasteland in some area, and California is seeing real estate prices fall by the hour. Values are almost impossible to accurately determine.

This has caused a near complete collapse of lending in the housing market, and the tapped out aspect of most borrowers has caused a further collapse in other consumer lending. This is one reason why GMAC, the lending arm of General Motors, needed a bailout from the federal government in order to lower its lending standards again to be able to sell more cars to people who can not pay for them. All such schemes to stimulate borrowing and spending will only lead to more failures and bailouts.

Extraordinary numbers of foreclosures are also contributing to the problem. Why would anyone want to buy a new house when foreclosed homes of every variety are sitting vacant in large numbers? Until this inventory is further liquidated, home builders will have to wait on the sidelines. But of course, the inventory can not be liquidated at today's high prices and with banks no longer providing home loans for people who can not afford to make mortgage payments. Thousands of houses were permanently constructed for families who could only afford to take a temporary break from renting. Now these homes remain foreclosed and abandoned.

A deep recession will keep the economy down for some years, as the government tinkers with one bailout or regulation after another that prevents the market from liquidating bad debt and insolvent companies. As the depression deepens, politicians, the banks, and failing corporations will kick the can a little further down the road. The end result will be a steeper, longer decline that if the economy just took the bad medicine right away and got on with supporting good companies, instead of being forced to prop up failed institutions.

In nonjudicial foreclosure states, mortgage companies do not have to bring a lawsuit against homeowners in order to sell the house at a county auction. If the borrowers believe that the foreclosure is not warranted, they will have to bring a lawsuit themselves against the bank and prove that the house should not be sold. Obviously, this makes defending the lawsuit impossible, as the owners would have to bring the fight into court first and the bank would be on the defensive.

But bringing a lawsuit against a lender to stop foreclosure can be a costly and confusing process for most homeowners. They will have to follow a number of steps just to have the sale initially halted, and then attempt to prove that the foreclosure should not be allowed to go forward at all. This involves bringing a lawsuit, getting a temporary restraining order, posting a bond, getting a preliminary injunction, and finally getting a permanent injunction against the bank. The first few steps will be examined in this article.

This is almost certainly an area of the law in which homeowners would wish to hire an attorney to represent them or, at the very minimum, have attorneys do research to help them build their case. Unfortunately, though, foreclosure situations are one of the times in most borrowers' lives where they can least afford to hire a personal lawyer. Bringing a lawsuit initially against a bank will be an in-depth process, and doing only the first few steps may only result in a delay of a few weeks.

To begin the lawsuit against the mortgage company, homeowners must sue both the lender and the trustee. They must also request that a judge stop any foreclosure proceedings until the homeowners are able to argue why they should not be allowed to go forward at all. The first step will be to request that the court grant the owners a Temporary Restraining Order against the lender, barring it from moving ahead with the foreclosure.

It may be quite simple to get a Temporary Restraining Order against a mortgage company, since the basis for granting one is that the party requesting it would suffer "irreparable injury" if it was not granted. Losing a home to foreclosure is usually accepted as irreparable injury to homeowners, but this action usually only puts the foreclosure on hold for a period of a couple weeks, at most.

However, some courts may require that homeowners post a bond for the TRO to be granted, and if the bond is prohibitively expensive, it can hurt the borrowers' chances of getting a fair hearing in court. The bond is designed to protect the bank against economic harm if the owners do not have any legitimate reason to request that the foreclosure be halted, and they can be costly, in some instances.

Thankfully, homeowners who have suffered a financial hardship may be able to get the bond requirement waived. Having low income is one convincing argument for a waiver. But borrowers will also have to show that the lender will not suffer unreasonable harm if the foreclosure is delayed, or if it can be protected some other way (like if the owners make reasonable monthly payments while the lawsuit is ongoing). Also, if the validity of the mortgage is in question, a waiver may be granted. Banks suffer no harm as a result of the homeowners' actions if the mortgage is not valid in the first place.

Once homeowners are granted a TRO and have their bond requirement waived by the court, the next step will be getting a preliminary injunction against the bank. If this is granted, the homeowners may have already won the war, as the rest of the legal process may take several years. But the final step would be to obtain a permanent injunction, which would not allow the lender to pursue foreclosure against the house.

Homeowners who have the option of completing a short sale in order to avoid foreclosure may be better served by saving their home in this manner. Although there are a few drawbacks of a short sale, it is almost always better just to resolve the mortgage entirely and move on with fewer financial worries.

First of all, when homeowners complete the short sale, they will not have to pay the difference between what they owed originally and what the bank accepts. This counts as forgiven debt and is the main reason for doing the short sale. When property values decline, selling at a high price is almost impossible, and families in foreclosure have no other option for selling their home than to convince the bank to accept less.

However, borrowers may have to pay taxes on the difference, because the IRS treats any forgiven debt as income. But this does not count if the amount forgiven is higher than the market value of the home (when the property is underwater). If a family owes $125,000, but the bank accepts $100,000, and the home is now only worth $100,000, the borrowers will not have to pay taxes on the $25,000 forgiven debt.

The special tax form homeowners will receive from the bank at the end of the year is a 1099, which will list how much income the banks counts that the foreclosure victims received from the short sale and forgiven debt. To determine how to report this to the government, homeowners should talk to their tax preparer about how to count it in income, or read the IRS website for more information on how to treat it.

Another benefit of a short sale is that homeowners can not be sued or have wages garnished by using this method to stop foreclosure. The bank forgives the debt, meaning it is agreeing to release the lien on the house for less than the total amount owed. So the lender is unable from that point to sue the clients for a deficiency on a debt that the bank itself accepted and agreed to a deficiency on.

However, if the property went through a normal foreclosure, the bank may be able to sue the borrowers again after the sheriff sale, depending on the circumstances and the state foreclosure laws. Almost no banks, though, do this, as they figure there is little chance they will be able to collect on any future deficiency judgment against foreclosure victims.

Nor can the bank, as a result of the short sale, put a lien on any other home the borrowers might own. Any part of the debt that is forgiven is no longer owed to the bank -- it accepts the lower amount in return for releasing the lien and not pursuing foreclosure. So homeowners do not even owe the mortgage company any more money once the bank accepts the short sale.

Although banks may not be willing to work enthusiastically with homeowners during a short sale process, persistence pays off. This option will allow more people to escape from a house without the threat of a foreclosure on their credit or the fear of the bank hounding them for a deficiency judgment for years to come. If saving the home some other way is not an option, and market values have declined to make selling difficult, a short sale may be a good compromise for borrowers and lenders.

When lenders begin to foreclose on a mortgage in default, there are typically a number of notices requirements that they must meet for the process to be legal. Otherwise, the homeowners may be able to contest the foreclosure in court for inadequacy of process, and the bank's lawsuit or ability to sell the house may be thrown out and it will have to restart at the beginning.

In most states, homeowners are required to be notified of many aspects of the legal process of foreclosure. Usually this is accomplished by posting the applicable notice on the property itself, which a sheriff's deputy will do. Certified mail may also be used for some documents, such as the complaint and summons or copies of other court documents.

However, banks foreclosing on a property are also required to post legal notices elsewhere, in case the borrowers are no longer living in the home and to notify any other interested parties of the legal action. State foreclosure laws may state that notices of default or sale must be listed in local newspapers for a period of weeks or even posted right on the door or a bulletin board in the county courthouse.

The first notice most homeowners will receive is the notice of default. This will come from the lender and indicate how long the owners have to reinstate their mortgage before the home will be sold. If the borrowers are able to pay back the amounts listed on the notice of default, they will be able to stop foreclosure from going forward and keep their home. But this is the first official notice they will receive that the home is in danger.

The bank will also have to record this notice of default with the county clerk or recorder's office. This will make the foreclosure proceedings a matter of public record and alert any other parties thinking of buying the house or refinancing the loan that payments on the mortgage or deed of trust are currently in default.

In states that require a lawsuit to bring a foreclosure (also known as judicial foreclosure states), banks may be required to inform homeowners that foreclosure proceedings may be brought into court soon. This usually gives borrowers a few week's notice if they wish to try and negotiate a mortgage modification or other other arrangement with the bank before the lawsuit is filed.

Homeowners, if they are unable to reinstate the loan by the end of the period on the notice of default, will then be sent a notice of sale of the property. This indicates when and where the house will be sold by the county at an auction to satisfy the delinquent mortgage. In most cases, the sheriff sale will be conducted at the county courthouse and there will be few other bidders besides the bank itself.

This information is also usually listed in local newspapers for a number of weeks. The exact number of times a sale is listed depends entirely on the state foreclosure law. Too often, this has been the first indication homeowners receive that they are in foreclosure at all, if they have not been opening mail from the bank or ignoring certified mail and other documents sent to them by the lender.

If the state has a redemption period after the sheriff sale has been conducted, homeowners will receive another notice informing them of their right to redeem and how long they have to do so. Some states have no redemption period, while others have from just a few months to a year for borrowers to attempt to save their home.

Banks must follow all of these notice requirements for the foreclosure process to be valid and legal. If it or the attorneys miss one or another notice, the homeowners may be able to contest the foreclosure for inadequacy of process and have the lawsuit thrown out or the sale halted. This would then require the mortgage company to begin the entire process all over again from the beginning.