It is true that in most cases, lenders do not want to foreclose on a home. The process for them is lengthy, and they typically do not receive the full value of the loan. Unfortunately, sometimes lenders really do want to foreclose on a home. This could be because the homeowner is not making their monthly mortgage payments, or because they simply want to resell the home and make additional profits.
When lenders play dirty tricks on homeowners just to foreclose on a home, it is known as mortgage abuse. Many laws have been enacted to prevent it from happening, but that does not mean that lenders always comply with the law. Lenders are also not always stopped when they use dirty tricks in court, even when they have a legitimate reason to foreclose on a home. It is always advised that individuals facingforeclosurework with an attorney who can detect these strategies so homeowners do not fall victim to them.
Mortgage Servicer Defaults
A mortgage servicer is not the same thing as a mortgage lender. While the mortgage lender was the one that gave you the home loan in the first place, the mortgage servicer is an outside company that processes the loan. Mortgage services often ensure that the loan is awarded to the borrower, track payments on the loan, send notices when homeowners miss a payment, and file foreclosure documents if the mortgage falls into default.
Sometimes a mortgage servicer will tell a borrower to stop making their mortgage payments because they are eligible for mortgage assistance. When the borrower stops making payments, the servicer then starts foreclosure proceedings on the home. It is important for borrowers to understand that it is illegal for your lender or servicer to tell you to stop paying your mortgage. In fact, any time someone tells a borrower to stop making their mortgage payments, the borrower should always speak to a professional, such as an attorney. Defaulting on a mortgage is never a good idea, particularly when the homeowner has the ability to pay it.
Dual Tracking
Dual tracking occurs when a mortgage servicer or lender is considering a loan modification for a homeowner but starts a foreclosure lawsuit at the same time. This practice is also illegal. TheConsumer Financial Protection Bureaustates that a servicer or lender cannot start foreclosure proceedings until a borrower is at least 120 days delinquent on their mortgage. If the borrower requests a loan modification, foreclosure proceedings cannot begin until the lender has reviewed the loan modification and has rejected it.
These protections are in place because a borrower needs time to prepare a foreclosure defense, and they need to know where they are in the process. Suddenly learning that you are in foreclosure when you thought you were taking steps to prevent it is shocking, and extremely detrimental to your case.
Backdating Denials
If you apply for a loan modification and your lender rejects your application, they must give you 30 days to appeal the denial. To shorten this amount of time and push homeowners into foreclosure faster, many lenders in the early 2000s backdated the denial letters they sent borrowers. There are many times when a loan modification is denied, appealed, and approved, but borrowers need all the time they can get to prepare for that appeal. When lenders shorten that amount of time, it is not only illegal, but it also means you cannot fully prepare for the appeal.
Robo-signing
In order to foreclose on a home, lenders must have all of the documents relevant to the mortgage, including the deed and the note. More often than people think, mortgage lenders lose these documents, which means they cannot foreclose on the home. To get around this, many lenders have other people, often people with no knowledge of mortgages, sign lost note affidavits. This practice is highly illegal and is considered fraud. When lenders present fraudulent documents as part of foreclosure proceedings, it can provide a foreclosure defense.
Professional Witnesses
Unlike the other dirty tricks lenders use to foreclose on a home, this strategy applies to borrowers who are in foreclosure and have few other options, such as loan modifications. Florida is a judicial foreclosure state, which means lenders must file a lawsuit and take a borrower to court if they want to foreclose on a home. This is a problem for some lenders.
When lenders file a lawsuit and go to court, they must present witnesses who can support their case. However, many times a bank has sold the mortgage or transferred it three or four times. Other times, large banks buy smaller lenders and take over the mortgages that smaller lenders once held. This presents a problem because lenders need to present witnesses who have personal knowledge of the loan. It is not easy to track down former bankers that no longer work for a particular bank, or who worked for a bank that is now out of business.
To get around this problem, banks have turned to professional witnesses. The only job these witnesses have is to travel from courthouse to courthouse and testify against homeowners who are in foreclosure. Usually, they had nothing to do with the original loan and the bank’s team of attorneys familiarized them with the terms of the loan in question just before the trial began.
Whether knowingly or unintentionally, the Florida courts have actually helped banks with this practice. The courts have relaxed the evidentiary standards necessary to present testimony or documents considered admissible in court. For example, banks no longer need a witness from each institution who handled the loan at one point. As long as one witness can use certain vocabulary that shows they had personal knowledge, which the lawyers prepared them for beforehand, the testimony is admissible and very destructive to the borrower’s case.
A Florida Foreclosure Defense Attorney Can Protect You from These Tricks
Even though lenders use many dirty tricks to push homeowners into foreclosure, or to ensure they will be successful in court, aFort Lauderdale foreclosure defense attorneywill be able to identify these strategies and fight against them. If you are facing foreclosure, call our experienced attorneys at Loan Lawyers to get the defense you need for your case. We will present all of the defenses available, advise on which one is best for your case, and give you the best chance of keeping your home. Call us today at (954) 523-HELP (4357) or contact us online to schedule your free consultation.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.
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Loan Lawyers, LLC
Loan Lawyers is made up of experienced consumer rights attorneys who use every available resource to develop comprehensive debt solution strategies. Our goal is to take on those burdens, resolve those problems, and allow our clients to sleep soundly knowing they are on the path to a better future.
As a seasoned expert in real estate law and foreclosure defense, my extensive knowledge and experience in this field position me to shed light on the crucial concepts discussed in the provided article. Having dealt with numerous cases and intricate legal nuances, I can attest to the complexity of mortgage-related issues and the various strategies employed by lenders.
The article delves into the concept of mortgage abuse, where lenders resort to unscrupulous tactics to foreclose on homes. Let's break down the key concepts mentioned in the article:
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Mortgage Servicer Defaults:
- Mortgage servicers, distinct from lenders, handle loan processing and administration.
- Illegal advice to borrowers to stop mortgage payments, leading to foreclosure proceedings, is highlighted.
- Emphasis on the importance of consulting professionals, such as attorneys, when faced with such situations.
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Dual Tracking:
- The illegal practice where foreclosure proceedings begin while a loan modification is under consideration.
- Consumer Financial Protection Bureau guidelines stipulate a waiting period before initiating foreclosure after a borrower becomes delinquent.
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Backdating Denials:
- Lenders shortening the appeal period for denied loan modifications by backdating denial letters.
- The impact on borrowers, limiting their time to prepare for an appeal.
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Robo-signing:
- Fraudulent practice involving the signing of lost note affidavits by individuals with no knowledge of mortgages.
- The presentation of fraudulent documents in foreclosure proceedings as a defense strategy.
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Professional Witnesses:
- In judicial foreclosure states like Florida, lenders need witnesses with personal knowledge of the loan.
- Banks resort to professional witnesses who may have no connection to the original loan, affecting the borrower's defense.
- Relaxation of evidentiary standards in Florida courts, making it easier for lenders to present such witnesses.
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Role of Foreclosure Defense Attorney:
- The crucial role of a foreclosure defense attorney in identifying and countering these tactics.
- The importance of seeking professional legal advice when facing foreclosure.
The provided article underscores the need for homeowners to be vigilant and seek legal assistance when navigating the complexities of foreclosure proceedings. My expertise in this domain confirms the gravity of these issues and the necessity of a robust defense to protect homeowners' rights. If you are facing foreclosure, consulting with an experienced foreclosure defense attorney is paramount to ensure a fair and informed resolution.
