For many people who have made the leap into home ownership, facing foreclosure seems like the worst-case scenario. No one enjoys or plans on missing mortgage payments, but in today’s world, falling behind is sometimes unavoidable. Most Americans are one paycheck or emergency bill away from not being able to make their monthly payments, and there is seemingly little leeway offered up front. The lenders that threaten foreclosure are often intimidating and overwhelming, and may make it seem like you’re in danger of losing your home tomorrow after just a few missed payments. When you’re dealing with the possibility of foreclosure, it’s incredibly easy to become frightened, overwhelmed, and downright hopeless.
However, it isn’t always as dire as it may seem. For many people facing foreclosure, there is hope. While lenders may make borrowers feel helpless and like foreclosure is a foregone conclusion, borrowers have the right to defend themselves. Specifically, there are many tools, restructuring frameworks, and programs that can be used to stop foreclosure and help you get current with your mortgage payments. These include:·
Mortgage Restructuring/Loan Modification
, in which the terms of a loan are renegotiated so as to mitigate losses for both parties.·
, in which both parties meet with a neutral third party to discuss possible ways to move forward.·
, in which the outstanding balance of overdue mortgage payments is added incrementally to future mortgage payments over time.·
, in which the lender agrees to suspend or at least reduce payments to give the borrower time to catch up and gather the money for the past-due amount.
There are also legal defenses that can be used in order to slow down the process, give the borrower time to get back on track, and even give them more leverage with their lender. Ultimately, in many cases, these defenses can save your home, whether or not a foreclosure case has been filed. Some of these defenses include:·
Violation of Federal Truth in Lending Act (TILA) and/or Home Ownership and Equity Protection Act (HOEPA)
: The Truth in Lending Act (TILA) and the Home Ownership Equity Protection Act (HOEPA) are federal laws that protects consumers from predatory lenders, including mortgages. According to the TILA, borrowers must be given certain consistent,standardized disclosures in order to fully inform them of the terms of the loan. If those disclosures are not presented to the borrower in accordance with the law, borrowers—including those who are facing foreclosure—have two main forms of recourse.
For one,borrowers can sue for damages
, which can result in a financial payout in an amount substantial enough to pay off missed payments. Mortgage borrowers whose lenders violated TILA also have the right of recission
. Rescinding a loan means voiding the loan as if it were never made. The right of rescission applies to all mortgages that have liens on the borrower’s primary residence and are non-purchase money loans. These include home equity mortgages and refinances. If given in violation of TILA, these types of loans can be rescinded within three years.
There are many terms and conditions as well as potential complications involved with pursuing damages or loan recission due to TILA violations. However, it is a commonly employed tool that can help some people avoid and prevent foreclosure.
Improper Procedures and IMFL Violations
: When pursuing a foreclosure, lenders must follow very specific procedures in order to have the foreclosure be considered valid. In Illinois, these procedures are governed by a law called the Illinois Mortgage Foreclosure Law (IMFL). Common violations of the IMFL include failure to properly serve a Notice of Default, and various mistakes by the mortgage servicer (such as failing to credit payments, charging unauthorized fees, misrepresenting the terms of loan reinstatement, and accepting payments after filing a foreclosure complaint). ·
Robo-Signing and Ghost-Signing
: Robo-signing is a process where an employee of a mortgage servicing company signs foreclosure documents—specifically foreclosure affidavits—without actually reviewing them, and/or without having first-hand knowledge of the facts they are endorsing. When“robo-signing”, employees can sign off on hundreds and even thousands of mortgages without even absorbing or considering any of the details there in. “Ghost-signing” is signing someone else’s signature onto a document, which is considered fraud. Both robo-signing and ghost-signing are often considered grounds to freeze a foreclosure.
These are only a few of the many defenses and strategies against foreclosure that an experienced attorney can make on your behalf. With the right legal counsel on your side, foreclosure never has to be a foregone conclusion. In the Chicago, IL area, the right legal counsel is Attorney Bardia Fard
. Attorney Fard brings passion, knowledge, and skill to the table to help her clients get their lives back on track every day. Help is just around the corner. Call (312) 600-8815 anytime—24 hours a day, 7 days a week—for a free consultation.
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