I have been "working" with one client to buy his home for about 2 months now. He has been dragging his feet every time I try to meet with him or get information from him. He stopped paying his mortgage March 1, 2006 - 15 months ago! How is it that he is still living in his house after such a long time? A foreclosure auction, even in NY, takes less time than this usually.
There's a huge industry of lawyers and other swindlers that have sprung up to help people "stop foreclosure". For a fee these people will do something that delays the inevitable. My client paid a law firm $1800 to stop his foreclosure and they did. The first foreclosure was stopped. Of course, when my client did not pay up the back interest and fees, the bank filed another lis pendens (lawsuit) to foreclose again. Initially my client probably had about $20k in equity in his house. Now a year later he owes far more than the house is worth. On the one hand he got something - he is still living in his house and he has been doing it "rent free" for a 15 months. Of course, it was not really free. He would have been better of financially selling the house, taking the cash and renting a cheaper place.
When I first spoke with him he was intent on getting some of "his equity". Despite being well educated he didn't seem to understand that his equity was disappearing every month that he hadn't paid the banks. When I finally told him what he owed he finally got serious about selling and avoiding the foreclosure. Now we have to hope that the 2 banks will take discounts on what is owed them, otherwise the house will go to auction and he will have 7 years of bad credit to look foreword to.
So do these "stop foreclosure" experts work? I guess to some extent they do if your objective is to stay in your house. But if you have no intention of re-instating your mortgage, they just buy you a little time. Maybe that is what you need, but it is not a recipe for financial success. Of course, if the people in foreclosure knew anything about financial success, they would not be in foreclosure to begin with.