It can feel like you have nowhere to turn when a bank threatens to foreclose on your home. Often, your lender has a vested interest in seeing you fail, but despite their worst intentions, you can take action to stop predatory mortgage loan servicers from stealing your home. But when you are unable to get them to listen to you and make the needed corrections to your account, what recourse is there left? Much of your life is tied into your home, and the fear and anxiety you face can be paralyzing. Its not time to give up. Its time to act.
You might be considering bankruptcy as your only option.
There may one more option to consider: Filing a lawsuit to stop your impending foreclosure.
Its called “mortgage litigation,” and it might be your best option to delay or even dismiss foreclosure attempts by your mortgage holder. It can bring your lender to the negotiating table and give you leverage to try to end your nightmare. It is especially important that you act when the foreclosing party failed to follow the law, and you have been deprived of your rights as a homeowner. Most people don’t know that you can get a free case evaluation and you may be able to hire a lawyer who agrees to take attorney fees only from winning your case. The law firm may even cover all of the case expenses until a successful conclusion to your case.
For a long time, it was rare for a plaintiff to obtain a judgment in their favor in our courts. The costs of litigation and the vast resources of large firms hired by Big Finance worked to intimidate even those who were facing wrongful foreclosure. You may also feel that you cannot win, but the tide has begun to turn in the fallout of the mortgage crisis.
You have a right to a hearing and to make the mortgage servicer prove that you were in default when the foreclosure was brought against you. There are two types of foreclosure: Judicial, filed through a lawsuit, and nonjudicial, enforced by a “power of sale” provision in your contract. Both have different state regulations as to their requirements, and your lender will file this based on the assumption you will not contest them. While it is easier to simply address judicial foreclosure in court, it may also be possible to contest the nonjudicial foreclosure in court by filing a lawsuit of your own.
A power of sale provision is a clause in the deed of trust or mortgage in which the borrower pre-authorizes the sale of property by way of a nonjudicial foreclosure to pay off the balance of the loan in the event of a default. With a power of sale foreclosure, the lender can foreclose without court oversight. Because of this, due process suffers, but in many states, including Oklahoma, one can force judicial oversight through legal process, even if your loan has a power of sale provision.
The most basic rule of foreclosure is that you have a right to be notified. If you are not given proper notice of any impending foreclosure action, you have grounds to sue.
Many lenders engage in deceptive or predatory practices, which can build a case for you getting your impending foreclosure delayed or dismissed. In addition to improperly handled paperwork and selling off your mortgage to the highest bidder in elaborate chains, many servicers rush to foreclosure and are graded on such as a metric. As a homeowner, with your whole life at stake, you have a right to due process.
A homeowning couple from Missouri named David and Crystal Holm suffered substantial damage to their home from a storm, and had an open dispute regarding the proceeds from their insurance payment. While in dispute, Wells Fargo commenced foreclosure proceedings against the family they owed money to. Even when the Holms received a dollar amount to stop the foreclosure and procured the money to pay per the agreement, Wells Fargo sold the property wrongfully to another company. When the lawsuit went to trial, the repossession was found to be unlawful, and Wells Fargo was found liable for punitive damages nearing three million dollars.
This kind of malfeasance need not come from malicious intent alone. With mortgages being sold from one servicer to the next, service begins to fail. Another homeowning couple, Todd and Alma Ritsema in California, found misapplied charges on their mortgage payments that resulted in months of harassment from their mortgage servicer in collections payment. They had the wherewithal to avoid non-payment, but if you are facing a tight budget or crisis in your life, this kind of technical error could result in wrongful foreclosure.
Misapplied fees and charges, or needlessly attached home insurance or other services you did not agree to, can be used as a way to create a pretext for a servicer to foreclose on your property or otherwise extract more money than you actually owe based on the terms of your contract.
These are some of the most common wrongful acts that can give you a legal basis to file a claim against your mortgage servicer or lender, but there are others. Over the years, the common law—law fashioned in cases decided by our courts—have provided protection to consumers unfairly treated by their lenders.
For example, you might be able to block foreclosure by arguing that your loan terms are unconscionable—that is, so unfair that they shock the conscience of the judge. In one case, for example, the borrower spoke very little English, was pressured to agree to a loan that he obviously couldn’t repay, was not represented by an attorney, and was unaware of the harsh terms attached to the loan (such as an unaffordable balloon payment).
For many, a home is at the center of their life. Their family and loved ones, their work, their pets and possessions, all can center around the home they pay for. When the home is under attack by these wrongful practices, you should seek out every option at your disposal to protect it.
We have significant experience defending homeowners and representing them in cases we file against mortgage servicers including Bank of America, Chase, Citibank, Wells Fargo, Ocwen, Nationstar (now Mr. Cooper), Seterus, and others.
Whether a judicial or nonjudicial foreclosure, the proceedings can take 6 to 9 months to resolve the case. Many cases against lenders never make it to trial, as once challenged many will come to the negotiating table with their counsel and with yours to avoid further costs. Likewise, we have your own costs in mind, and one thing it costs nothing to get is a Free Case Review with us to discuss your case and what options you might have to protect your rights as a consumer.