Be Proactive to Shorten Timelines

[Andy Mirza]

When loans are in foreclosure, the tendency is to rely on your foreclosing attorney or trustee to do their job and accept their advice without questioning it. I believe that this is what most big banks do. They blindly follow the advice without any deeper thought on strategy, specifically on how to speed up the process. In these situations, how fast a foreclosure proceeds depends on the quality of the law firm and even of individual attorneys and paralegals.

If you get competent people with a great work ethic, the loan will proceed to foreclosure as soon as possible with little effort on your part. However, if you get someone that does not know what they're doing or is not too motivated, your loan will languish and your timeline will get extended.

As an investor/owner, you will care more about your asset and its outcome than anyone else. With experience, you can learn to spot fixable problems with foreclosure proceedings and how to keep on top of your vendors to keep things moving.

Here are a couple of examples:

We have a loan with property in Chicago, IL. Things are just now starting to loosen up. We were planning to move forward with filing for judgment under some new guidelines when we discovered that the property had been boarded up after we bought the loan. Our attorney suggested that we get a Vacancy Affidavit, which we can then use to shorten the post judgment redemption period.

Instead of having to wait 90 days to go to judicial sale (after the judgment hearing), it will be more like 30.

A big bank probably wouldn't have caught that or even cared that they could shorten their timeline. To us, time is money.

2nd example: We had a WI loan in foreclosure with a mandatory mediation period. To us, it appeared that the borrowers were stalling and had no good faith intentions of mediating. The mediation was postponed month after month. The mediation statute was vague and this particular county court had no mechanism in place to address this.

After 4 months, I asked the paralegal if there was anything we could do and she suggested a Motion to Terminate the Mediation. It seems obvious but I'm not an attorney. I don't know what I don't know. I learn something new all the time.

The Motion was granted and we got that loan back on track.