Homeowners who are behind in mortgage payments often make one mistake that, if not made, would allow them many more months to recover financially before losing their home. This mistake is when borrowers move out of their home before they are legally required to do so. And now, with the steep rise in the foreclosure rate over the past few years, there are even more reasons to stay put as long as possible.

Of course, a small number of homeowners realize the financial advantages of delaying the final move into a new apartment or rental house for as long as they can. Every month without a mortgage or rent payment is extra money that can be used to pay off other bills, keep on top of car payments, or simply save up for a security deposit or emergency fund. And as long as they still have legal rights to remain, there is no reason to move just yet.

Some homeowners even go to great lengths to get even more time from the bank to stay in their home. They do whatever they can to apply for solutions to foreclosure, request postponements of a sheriff sale, and defend the lawsuit in court for months. Finally, they file bankruptcy to drag the process out even longer. In many cases, this can result in months or years of living rent and mortgage free. A far greater number of homeowners, though, fall behind on their monthly bills, listen to the lender’s threats of foreclosure, and simply move out of their house. The property sits abandoned while the banks takes it through the legal foreclosure process, and then it sits abandoned while the bank hires a local Realtor to sell the home. In the meantime, if falls into disrepair and becomes a victim of squatters or people stripping the property of anything of value.

However, now that banks have so many foreclosures on their books, many foreclosure auctions are simply being postponed for no apparent reason. While more homeowners than ever are applying for assistance, even more sheriff sales are being delayed. In addition, lenders are often incompetent enough to proceed with a public auction of a home even if the borrowers are negotiating for a loan modification or other plan. This indicates that the banks are voluntarily postponing some sheriff auctions in order to avoid having to declare the loans as losses and then declaring the properties as assets at their true market values. Banks have gotten away for years with overestimating values of homes in order to inflate the values of the loans on the properties and the securities made up of these mortgage debts.

Homeowners facing foreclosure typically employ their own attorneys in two separate instances. The first is when borrowers attempt to defend against a foreclosure action in court by hiring a lawyer to represent or help them through the lawsuit. The second is, if there are no other options left to save the house, the homeowners decide to file for bankruptcy and hire an attorney to help them with this. In either case, the banks do whatever they can to discourage the homeowners from seeking out legal counsel and fighting for a realistic solution to keep their properties out of foreclosure. Lenders would much rather let a house go into foreclosure and take it back quickly, knowing they can rely on government bailouts and Federal Reserve counterfeiting to keep them in business without having to help clients.

The are a number of benefits that homeowners receive by seeking out legal representation during foreclosure. First, a lawyer who is familiar with lending laws can usually find various laws or regulations the bank may have violated in the origination or servicing of the loan. Raising these issues in court during foreclosure lawsuit can severely derail the process and drag out the foreclosure for years. Banks are willing to do almost anything to avoid having the foreclosure last for years, as this is all time that the home is under litigation, it is costing the bank in legal fees, and they are not collecting payments on the loan. In fact, this tactic can be one way for homeowners and their own lawyers to persuade the bank to offer a mortgage modification rather than going through with the foreclosure.

In terms of filing for bankruptcy, changes to the bankruptcy code in 2005 made it more time-consuming and paperwork-intensive for borrowers to discharge or reorganize their debts. Although it is still very possible for homeowners to file on their own, they may wish to hire a bankruptcy lawyer to help them with the process. Lenders, of course, like bankruptcy just as much as they like homeowners who are defending their homes in court. Although these same lenders rely on homeowners and taxpayers to keep the entire banking system itself out of bankruptcy, they do not like when homeowners file to avoid foreclosure. Most times, they will do whatever they can, including outright lying through their own attorneys, to have the case dismissed.

This is not to say, though, that filing for bankruptcy is a great solution for homeowners facing foreclosure. In many cases, the reorganization plan under a Chapter 13 can be very expensive and will lead the borrowers right back into foreclosure once they miss a payment. Although banks know that bankruptcy will most likely fail within a few months, they still try to get the case dismissed and go right back to foreclosure. It seems more than a little ironic that, given the banking industry’s love affair with the law industry, banks would be so loathe to work with attorneys hired by homeowners in foreclosure. Obviously, the lenders believe that the law should be too expensive for the common person and instead defined and decided by those who own the lawyers, courts, and legislators; i.e., the banks themselves.