Homeowners Resorting To Litigation To Modify Loans In Default
The Memphis Daily News recently ran a story that discusses, in general terms, the approach that some consumer bankruptcy attorneys take in represnting homeowners facing foreclosure from losing their homes. Interviewed for the story was North Carolina consumer bankruptcy litigation attorney O. Max Gardner III.
In a nutshell, the approach starts by filing a bankruptcy on behalf of the homeowner in order to "stop the bleeding." The next step is to determine whether there may have been any failures to make the required consumer disclosures when the mortgage was originally made that violates the law (the Federal Truth In Lending Act is one such law). Another step is to review the mortgage servicing history to determine if the mortgage servicing company may have charged improper fees during the time it collected the loan payments from the homeowner (for example, imposing late charges, property inspections, appraisals, etc. - every single month).
If there is any indication that these violations may have taken place, the homeonwer's attorney can then file an adversary proceeding against the lender and mortgage servicer in order to pursue the matter further (An adversary proceeding is nothing more than a lawsuit filed in the context of a Federal bankruptcy proceeding).
The homeowner's negotiating leverage acquired by such litigation tends to make lenders and servicers "more cooperative" in negotiating a mortgage modification. One Mississippi attorney commented for the story that he has settled about a dozen of these cases in the last couple of months and still filing more. (Editorial Note: if the homeowner's claims have merit, the lender and servicer may find themselves being hit by the judge with an enormous legal bill for the homeowner's attorney fee - after all, the attorney is not doing this for nothing).
For more, see Attorneys Employ Creative Methods To Stem Foreclosures (if link expired, try here).
For another story on claiming violations of consumer mortgage disclosure laws in representing homeowners facing foreclosure, see Homeowners Invoking "Truth In Lending" Rights To Back Out Of Bad Loans.
Go here for more posts on homeowners who have refinanced into bad mortgage loans and are now using the Federal TILA to try and undo the bad loans.
Go here , go here , and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics zebra undo mortgage loans TILA alpha
In a nutshell, the approach starts by filing a bankruptcy on behalf of the homeowner in order to "stop the bleeding." The next step is to determine whether there may have been any failures to make the required consumer disclosures when the mortgage was originally made that violates the law (the Federal Truth In Lending Act is one such law). Another step is to review the mortgage servicing history to determine if the mortgage servicing company may have charged improper fees during the time it collected the loan payments from the homeowner (for example, imposing late charges, property inspections, appraisals, etc. - every single month).
If there is any indication that these violations may have taken place, the homeonwer's attorney can then file an adversary proceeding against the lender and mortgage servicer in order to pursue the matter further (An adversary proceeding is nothing more than a lawsuit filed in the context of a Federal bankruptcy proceeding).
The homeowner's negotiating leverage acquired by such litigation tends to make lenders and servicers "more cooperative" in negotiating a mortgage modification. One Mississippi attorney commented for the story that he has settled about a dozen of these cases in the last couple of months and still filing more. (Editorial Note: if the homeowner's claims have merit, the lender and servicer may find themselves being hit by the judge with an enormous legal bill for the homeowner's attorney fee - after all, the attorney is not doing this for nothing).
For more, see Attorneys Employ Creative Methods To Stem Foreclosures (if link expired, try here).
For another story on claiming violations of consumer mortgage disclosure laws in representing homeowners facing foreclosure, see Homeowners Invoking "Truth In Lending" Rights To Back Out Of Bad Loans.
Go here for more posts on homeowners who have refinanced into bad mortgage loans and are now using the Federal TILA to try and undo the bad loans.
Go here , go here , and go here for posts on questionable mortgage servicing practices. questionable mortgage servicing practices tactics zebra undo mortgage loans TILA alpha
posted by Home Equity Theft Reporter at 8:03 AM
<< Home