Foreclosure is a complicated and lengthy process, and the mortgage lenders certainly do not make it easier on homeowners by using complicated language and sidestepping phone calls. At the end of the day, an honest mortgage lender just wants you to pay on time, and they have to take your home away if you don't. When the mortgage lender takes this position it can be easy to feel like suing them will stop the action or even save your home. Have you ever felt like you were a victim to any of these practices:
Situation #1
You have made your trial loan payments but still have not been approved for the loan modification.
It is important to note that trial loans are not contracts. If you apply for a loan modification and the lender gives you a trial loan payment plan, this does not mean that if you successfully make these payments you will get a loan modification. You do not have the grounds to sue your mortgage lender if they do not grant you a loan modification, and they don't have to return your trial loan payments.
Situation #2
You were approved for a loan modification but you still received a foreclosure notice.
It is important to note that just because you have been approved for a loan modification does not mean that your home is no longer in foreclosure. If you receive approval for a loan modification your foreclosure case will still be active depending on how long you waited to apply for a loan modification and how long it took for you to get approved. If you received a foreclosure notice after being approved for a trial loan modification you do not have the grounds to sue your mortgage lender, but you should have your attorney review everything.
Situation #3
You've tried multiple times to communicate with your mortgage lender but get no response.
In this case, you may have standing to sue your mortgage lender. According to the Real Estate Settlement Procedures Act mortgage lenders and servicers are required to provide the borrower with accurate and timely information and documents with respect to the borrowers mortgage loan if the borrower submits a qualified written request. If the mortgage lender fails to honor this rule, it is considered a violation of RESPA. For each violation of RESPA the mortgage lender will pay a statutorily mandated amount for damages. In order to show that you have sent a qualified written request the letter or email must 1) request information about the loan, 2) must enable the servicer to identify your account and 3) include a statement from the borrower explaining why they need this information. Only if these terms are met will you possibly have the grounds to sue your mortgage lender.
Situation #4
Your mortgage lender forged documents in order to proceed with the foreclosure.
If your mortgage lender forges loan documents you have the grounds to sue them. However, proving that the loan documents are forged can be very difficult and this burden rests on the person claiming the documents are forged. As long as the documents have been executed with proper formalities, they are presumed to be valid. In order to sue your mortgage lender for forging documents you will need the help of an experienced attorney, as this is not a case you want to try to take to court on your own.
When these things happen it can seem like the only right thing to do is to sue your mortgage lender. However, there are other ways to go about fighting foreclosure that are more effective and more appropriate. You can refinance the home, ask for a forbearance, or file for bankruptcy. It is better for homeowners to consult with a foreclosure defense attorney who can help you determine what is the best route for you to take. A foreclosure defense attorney can also pursue that route for you so that you can have the peace of mind that a legal professional is dealing with your case, rather than trying to face the bank by yourself.