Foreclosure Process

Some Thoughts on Foreclosure Defense...

Posted on Wednesday, April 22, 2009

Was ervice of procees properly effectuated?
Are there charges that are not allowe dincluded in what the lender is claiming is due - these might include especially high inspection fees or forced place insurance that costs a lot more than what the homeowner was paying for insurance purchased on hi own.
Was there an assignment of the mortgage and if so was it properly done and completed before the forelcosure action started? If not some courts will automatically dimiss the case with prejudice.
Does the l;ender have the original note and documents?
Did each borrower and guarantor/obligor get a copy of the TILA notices.
Check out the SEC website to track securitization and proper parties to send certain notices to.
Does your jurisdication order mandatory mediation before foreclosing - Mimi Daded is supposed to start May 1 , others have already started. Still others are considering starting.
Did the lender send pleadings to the borrower (as opposed to the borrowers attornwey) after they learned that the borrower was represented by counsel? If so the court may issue sanctions against the other lawyer.
AAre there TILA violations? If so the borrower may be able to rescind the loan (or use the right to do so as leverage to get a good modification. Essentially if a loan is rescinded it becomes and unsecrued debt - in other words the lien on the home goes away but the borrower still has to repay the amount borrower minus some possible credits). For example, if the TILA disclosure in a RESPA applicable refinance situation was not provided within three days of the closing or was incorrect or incomplete, the borrower may be able to rescind the loan for up to 3 years from the closing date! These numbers aare often inclete as costs which should have been put under "Finance Charge" are instead put under "Amount Financed" in order to aviod inclusion in the APR and give the appearance of a lower cost loan. But remember if you prevail on a recission claim (by filing a notice/motion to rescind) eventually you will need to "tender payment" back to the lender for the amount borrower. Again you may be able to negotiate a modification (or if in bankruptcy convince the judge to force this) but you may be able to credit certian lender penalties against the amount you have to pay back. For example, a $2000 penalty for a material violstion of the TILA 9such as not properly disclosing information on the TILA notice), a $200 penalty for failing to rescind when properly requested. A refund of lender costs, closing costs and mortgage payments made can all be credited against tender and a Satisfaction of the Mortgage has to be provided before you have to tender.
Assifgnees of the original lender are liable for damages bit not always for the other claims and defenses. And attorney feesd and costs are all statutory in a TILA case.
On top of that, the HOEPA (an amendement to TILA for high costs loans 0 such as subprime mortgages) applies too if the total costs are more than 8% of the loan amount and allows for even more penalties. Under HOEPA you can rescind and earn a $200 penalty for each of the following: prepayment penalty, default interest, negative amortization, among other features. In addition, under HOEPA assignees ar eliable and subject to addiotnal claims and defenses.

This is important stuff but it is also complicated. If you think it may apply to your case, definitely consult an experienced attorney. It is also not stuff to be used and abused by folks who just dont want to pay their mortgage so don't evne go there.


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