I realize that there are a number of “law firms” from other states that claim to be able to stop or delay foreclosures without filing bankruptcy. They are all scams.
If you never listen to another word from a foreclosure lawyer, listen to this one: there are three ways to stop a foreclosure without convincing the bank to do it on their own -Paying Up, Bankruptcy, and a Temporary Restraining Order.
TROs are pretty tough to get. You have to basically come up with evidence that the foreclosure is clearly wrongful, that the homeowner will be severely and irreparably harmed, and that. Which is not always the case. Now, a foreclosure can be illegal even if the borrower is behind on payments, but asking a court for a TRO requires some pretty heavy lawyering and I don’t know any lawyers who will do it without being paid up front. See, even if you have a good case against the foreclosing bank, letting the foreclosure happen doesn’t destroy the case. Sometimes, it is actually better to do that, because the bank will then try to eject you from the property in a state court lawsuit and you can bring up their illegal conduct as a counterclaim.
Paying up is pretty simple: you can either pay off the entire loan (which you can do after the foreclosure anyway through your 1 year right of redemption), or you can exercise your right to cure, in which case you pay back the amount of money you are behind and the mortgage gets reinstated. The right to cure in Alabama is absolute and can be exercised at any point up to 5 days before the foreclosure sale. Furthermore, they have to provide you with notice of the amount required to cure the default so you know what it will take to fix it. If you send them that amount, they have to call off the foreclosure.
And finally, there is Chapter 13 bankruptcy, which is what most people who want to stop a foreclosure end up doing. There are two reasons for this: 1) there are a million bankruptcy lawyers who flood the TV, radio, and yellow pages with advertisements announcing their ability to “STOP FORECLOSURE, REPOSSESSION, WAGE GARNISHMENTS” and 2) Chapter 13 is a simple, guaranteed remedy. If you can catch up the mortgage arrears over 5 years and keep making the regular payments, then you keep your home. It’s that simple. This is a great remedy – unless you’ve been dealt with illegally, in which case you may have rights against your lender that give you a better result than filing bankruptcy.