You Asked, We Answered: How to Report Predatory Lenders, Understand Foreclosure and More

You submitted your questions about quick sales vs. foreclosures, how to report companies you believe to be predatory lenders and more. Foreclosure lawyer Jessica Attie provided insight into your queries below.

Attie is the co-director of the Foreclosure Prevention Project at South Brooklyn Legal Services, where she litigates predatory-lending cases on behalf of low-income homeowners.

Attie received her bachelor of arts from Barnard College in 1997 and her J.D. from Georgetown University Law Center, where she was a Public Interest Law Scholar, in 2000. She is fluent in Spanish.

"thedowtrader" asked: "Before we went to foreclosure, we contacted an agency that sent us a card in the mail saying they could help us negotiate with the bank to keep our home. After $1,200 later, the negotiation was higher than I am paying now. But in the beginning, they had to have the money up front before they would talk to the bank. I have heard that the attorney general is investigating predatory companies like this. Could you tell me what avenue to go to report this company."

Attie answered: Each state has its own attorney general, some of which are more active in investigating deceptive practices than others. You should definitely call your state Attorney General's Office, or visit the Web site, and report the company. Some attorneys general have forms on their Web sites that allow you to file complaints online. The more complaints the attorneys general receive, the more likely it is that they will investigate. You should be aware, though, that it's unlikely that the attorney general will be able to help you with your foreclosure problems. You should also look for a non-profit housing counselor or legal services organization in your community that can help you negotiate with the bank or advise you about what other options you have.

"Docky1978" asked: "Can you explain the difference between foreclosure and a quick sale? i am a 1st time home owner, bought my home 7yrs ago. single female, my mortgage was to increase in june 07. i tried to work with them, they refused. it went from 776 to 1043 then to adjust again in nov..i see the adds on your site no questions it is not true. i asked them about that and they said i didn't qualify.i am in foreclosure. can anyone tell me which is better foreclosure or quick sale. i have been packing to move somewhere"

Attie answered: Every person's situation is a little bit different, and the laws differ from state to state, so I can't tell you what the best choice is for you. But there are some important things to consider. If you can sell your home for more than the balance on the mortgage, you can keep the proceeds of the sale that exceed the mortgage balance. But if the bank forecloses on your property and sells it for less than what you owe on the mortgage, you could end up owing money to the mortgage company. This is what's known as a "deficiency."

A lot of homeowners are finding that their homes are selling for a lot less than what's owed on the mortgage. Some banks or mortgage holders will agree to allow a property to be sold through a Realtor rather than foreclosure, even if the proceeds of the sale will not cover the amount due on the mortgage. This is what's known as a "short" sale. This may make sense in some cases if the lender agrees to waive any deficiency. You should always make sure that the lender confirms in writing that the deficiency has been waived.

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