Forclosure Defence

Foreclosure doesn’t necessarily mean… foreclosure.

Just because you’re having trouble paying your mortgage and the lender is threatening to foreclose doesn’t mean you will automatically lose your home.

Help is available to borrowers who have claims against their lenders for violating the Truth in Lending Act and other laws regulating credit transactions. Such violations may be a defense to a mortgage foreclosure.If there is a violation, you may be able to void the mortgage and apply 100% of your payments to principal. You may also be able to recover money damages.

If the answer to any of the following questions is “yes,” please contact the Law Offices of Martin D. Gross so that we may review your loan documents (including demand and collection letters, correspondence, and any account histories or monthly statements).

  • Have you repeatedly refinanced your loan? Was the last refinance within the past 3 years? (A common predatory practice is flipping, which involves repeatedly refinancing a mortgage loan without benefit to the borrower, in order to profit from high origination fees, closing costs, points, prepayment penalties and other charges, steadily eroding the borrower’s equity in his or her home.
  • Did your interest rate increase rather than lower upon refinancing?
  • Are you paying an interest rate in excess of 9.5%?
  • Was the loan obtained to pay for home improvement work that was not done properly, or even at all?
  • Have you had problems with the mortgage company regarding untimely posting of monthly payments? Sudden increases in payments? Adding amounts to your balance for insurance, “property preservation,” or other “advances”? Does your principal balance never seem to go down?
  • Were you charged high closing costs (points and fees) on the mortgage?
  • Did the terms of the mortgage change to your detriment at the last minute before the closing?
  • Did the lender pay money to your mortgage broker (look on your HUD-1 Settlement Statement for a “premium” or POC (paid out of closing) “YSP” or “yield spread premium”)?
  • If you have an adjustable rate mortgage, were any adjustments done improperly? Can you even tell if the adjustments were correct or not?
  • Does your loan contain a prepayment penalty?
  • Do you believe you were treated unfairly by your mortgage company? Has correspondence with the mortgage company gone unanswered? (Mortgage companies have a statutory obligation to respond to complaints and requests for explanations of accounts. Often, they don’t. Each failure may entitle you to $2,000. If your claim against the mortgage company may exceed the number of monthly payments you allegedly missed, the mortgage company may not be able to prove that you are in default.)
  • Did all collection letters sent to you by debt collectors comply with the Fair Debt Collection Practices Act? (Up to $1,000 more if they did not.)
  • Did you (or anyone else who has an ownership interest in and lives in the house) receive a “notice of right to cancel” that was not completely filled out?
  • Did you receive your copy of the loan documents at the closing (as opposed to being sent to you later or did the closing agent send you signed copies at all)?
  • Did you sign a document at the closing stating that you were not canceling?
  • Did the closing occur by mail, or at your home, or in another city?

There is a common assumption that mortgage companies do not want to foreclose and acquire real estate. This assumption is not well founded.

There are an increasing number of scavenging predators that buy up bad debts, including mortgages, for a fraction of face value and then attempt to enforce them on the debtor. Such entities profit by foreclosure. And some unscrupulous lenders are purposely allowing certain borrowers to fall deeper into a financial hole from which they can’t escape.

There are options available to you in the case of a predatory foreclosure, as well as a legitimate foreclosure. Don’t lose your home… we can help prevent foreclosure!

Contact the Law Offices of Martin D. Gross Today.

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