Real Estate Litigation – Wrongful Foreclosure

Between 2009 and 2010, about 1.2 million homeowners lost their homes due to foreclosure by 11 top financial institutions. The big problem, however, was that many of these homeowners were not even delayed in their mortgage payment or (even had there been actual problems in payment) they had just been approved by the bank either for a temporary delay in mortgage payments or for a restructuring of payment, or that their property was under the protection of federal laws.

Studies and litigations show that majority of the foreclosures made during the height of the housing crisis in the US were not even due to homeowners defaulting in their loan obligations; these were rather due to errors made by banks or due to practices (which greatly favor banks and other creditors) that are now considered illegal. While banks and creditors naturally deny any wrongdoing, one fact is real – that wrongful foreclosures are not real; these are widespread too.

Some of the most commonly identified causes of wrongful foreclosure include:

  • Miscommunication and processing errors. Despite not being behind on their mortgage, many homeowners have faced foreclosure due to lack of proper communication between banks and other creditors, title insurers, foreclosure law firms, and servicers (also called mortgage servicers. These are usually composed of the biggest banks in the US which collect mortgage payments and foreclose properties with delinquent payments).
  • Incorrect instructions from banks or servicers. This usually happens to homeowners who are current on their mortgage but wish to apply for a loan modification. To qualify for loan modification they are told to fall behind on their mortgage, but only to find that afterwards that the bank has foreclosed on their property – due to delinquency in payment.
  • Additional fees. Many homeowners end up failing to make late payments on their mortgage due to the so many added fees, like late fee, attorney’s fee, inspection fee, broker-price opinion, and others. Many legal experts agree that these fees are major contributory factors to a great number of foreclosures.
  • Dual track on loan modification processing and foreclosure resulting in mistaken foreclosures. Loan modification and foreclosure are usually processed in separate divisions of a bank; thus, while a homeowner may be awaiting the result of his/her application for loan modification, his/her property might be foreclosed without fully understanding what actually went wrong.

Losing one’s home because of foreclosure can usher in a lot of pain for any hardworking individual, especially if such is due to an error committed by someone else. Proving this is pretty hard, though, as real estate laws can be too complicated for a homeowner. Despite missing payments on mortgage, the law offers various means for the property owner to retain his/her property, thus no bank or creditor can simply foreclose on it.

The Dallas real estate litigation lawyers are among the most qualified legal professionals always armed with very strong arguments in defense of the homeowner’s rights. Entrusting your legal battle (against your creditor) to someone else may cast you in a position where you could lose everything you have worked for so hard.

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