Real Estate Tip

Two of the aspects of foreclosure that banks rely upon when attempting to steal homes from borrowers is homeowners’ ignorance of how the mortgage works and what information the lender really needs to show to prove it has a case. But if the homeowners remain in the dark, and banks are not challenged on the issues, the courts will allow the lawsuit to proceed as far as possible, including evicting homeowners for the sake of banks who may not even have a right to complain. A couple of written requests made by homeowners to lenders, however, can have dramatic effects on a bank’s willingness to negotiate a more reasonable solution.

As has been mentioned in numerous articles, it seems that mortgage companies are having a difficult time producing the original note that proves that they bought the loan and have the right to foreclose once the payments are delinquent. Judges have thrown out dozens of cases where lenders could not show they were even entitled to collect the monthly payments because they could not conclusively show they owned the mortgage. Homeowners should take advantage of this by requesting the promissory note that they signed when pledging their house as collateral for a mortgage.

In fact, this written request can be quite simple, comprising only a few sentences giving the bank a couple of weeks to produce the note for the borrowers’ inspection. Since the house is security for the loan, the bank should be able to show the document is in its possession within a period of ten to fifteen days, at the most. If the owners receive a form letter back with anything other than the promissory note, it may be an indication that the information is not in the lender’s possession, and there may be no ability to sue for foreclosure.

Borrowers dealing with a loan servicing company, which owns only the rights to collect the monthly payments, may have even more complaints about junk fees, forced insurance, escrow account deficiencies, and other equity stripping scams. Thankfully, the government has provided an avenue for homeowners to send a “Qualified Written Request” (QWR) to their mortgage companies in order to have their complaints addressed. Section 6 of the Real Estate Settlement Procedures Act (RESPA) outlines the terms under which such complaints may be made.

The mortgage servicer must acknowledge receipt of the QWR within twenty days, and respond to the complaints within sixty days. The bank may either correct the situation or explain its position to the homeowners, but it may not ignore the written request. Although it is unlikely to win a lawsuit against such a mortgage company, noncompliance with the Act leaves the lender open to private lawsuits for three years after its inability to respond properly to the QWR. Class action lawsuits may be more effective, and there is also a three-year time limit for initiating those.

When homeowners are facing foreclosure, they often see their equity quickly disappear under a mound of fees and interest charges that may not even be entirely legal. In addition, the bank attempting to take the house might not even have standing to complain or be able to prove it owns the mortgage it is claiming to collect on! For the small cost of postage for certified mail, sending a request for the promissory note as well as a Qualified Written Request under Section 6 of RESPA may be a simple way to begin the process of defending against the bank’s attempted real estate theft.

Nick writes articles focusing on how homeowners can qualify for various solutions to save a home from foreclosure, including loan modification with the current mortgage company, as well as applying for a new loan with a specialized foreclosure lender. You can read more about how foreclosure works, how to stop it once it’s begun, and how to recover your credit and finances afterwards by visiting his site: http://www.myforeclosurelender.com/

Nick_Adama

Tags: mortgage, Foreclosure

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Tags: Foreclosure, mortgage

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