Can A Mortgage Company Be Sued For Negligence
As mentioned above, if your mortgage lender commits negligence, you may sue your mortgage lender. Examples of this can include where they negligently fail to include terms in the loan agreement that were agreed to by both parties, or if they breach their fiduciary duties.
The answer is Yes if your mortgage company has violated RESPA then you can sue and that may stop a foreclosure against you. RESPA is a powerful law. Its very helpful when youre facing foreclosure, and especially if the mortgage company has made any mistakes.
Suing Your Mortgage Lender
When you believe that your home is worth saving, and your situation is such that you can afford modified payments, then you should fight on, with legal help from a lawyer. The more persistent you and your legal counsel are, the better your chances will be of winning. If you have a first and second mortgage, consider combining them into one mortgage. You may even be able to negotiate, with the help of a lawyer, a settlement on that mortgage. If your second has been sold its possible that you may only have to pay 1%-3% of the remaining balance.
Class actions lawsuits and MERS have so far proven to be unsuccessful in the courts. People who handle their cases on an individual bases have proven to be more successful than the other suits. In these cases, homeowners allege that the lenders acted in bad faith. One such case was Big Bear City, California. The homeowner sued Bank of America successfully.
There are a number of scams making the rounds, and the Better Business Bureau is constantly working to make homeowners aware of it. One scam is to get the homeowner to pay monies for upfront for costs related to mortgage assistance. They will ask you to pay as much as $5,000, as part of the upfront costs to pursue fighting a foreclosure, give you mortgage assistance modification help, lien stripping, and even giving you clear title to your property. Unfortunately many homeowners will fall for this scam, but those with a lawyer will understand immediately what is happening.
Can I Sue Mortgage Lender For Negligence
- Posted on Aug 25
You may have a claim against the title company, but that will depend entirely upon the documents you signed at closing. Those often contain language that protects the title company against errors of this sort. You need to sit down with a local real estate attorney to determine whether you have a claim that is worth pursuing . The attorney needs to review the closing documents before he or she will be able to advise you on how to proceed.
This answer is for general information purposes only and is not intended to create an attorney-client relationship. Additional facts are necessary to assure that the answer is entirely accurate. An attorney in your local area should be consulted for a formal legal opinion.
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Respa Is A Powerful Law
Its very helpful when youre facing foreclosure, and especially if the mortgage company has made any mistakes.
Usually they do make mistakes, or at least they make things confusing.
Maybe youve sent Notice Of Error and Request For Information letters which they havent responded to.
Maybe the mortgage company forecloses on you which violates the dual tracking prohibition when you are in the middle of loss mitigation.
There are many issues that you could be dealing with.
What Legal Issues Can Arise When Dealing With Mortgage Lenders
As noted above, numerous legal issues can arise when dealing with a mortgage lender, most commonly due to a breach of the loan agreement. A loan agreement is similar to any other contract this means all breach of contract remedies are available, should a party breach the contract.
Common examples of legal issues that may arise when dealing with a mortgage lender include, but are not limited to the following:
As can be seen, there are many disputes that may occur with a mortgage lender. Therefore, it is important to carefully review your mortgage lending agreement before signing the agreement. Thus, you should feel free to ask questions and voice any concerns that you might have to the mortgage lender, in order to prevent any of the aforementioned problems from occurring.
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Here’s How To Make Your Servicer Correct An Error Or Provide You With Important Information
By Amy Loftsgordon, Attorney
Mortgage servicers sometimes make serious errors when handling a homeowner’s loan account. Fortunately, a federal law, the Real Estate Settlement Procedures Act , provides a way for you to make the servicer correct the error if you believe it made a mistake when managing your mortgage payments. This law also gives you a way to get specific information about your account. Whether you want to notify the servicer about an error or get information about your account, you’ll have to send your servicer a letter.
Under amendments to Regulation X, which implements RESPA, your letter will be considered a “notice of error” or a “request for information.” Different time limits apply for when the servicer has to respond to your letter based on which type of request you send.
How Long Can A Lender Wait Before Foreclosing Or Suing On A Note
Years ago, Justice Oliver Wendell Holmes, Jr. asked: What is the justification for depriving a man of his rights, a pure evil as far as it goes, in consequence of the lapse of time? Several reasons exist: our laws aim to resolve just claims within a reasonable time if a claimant sits on her rights for too long, relevant evidence to disprove the claim may be lost or destroyed by the passage of time and litigation of a long-dormant claim by result in more cruelty than justice.
Consequently, the law establishes a limitation period on almost all claims, including claims concerning mortgages and promissory notes. It is well settled law that mortgages and deeds of trust do not create debt. Rather, the debt is created by an agreement to pay set forth in a promissory. Mortgages and deeds of trust are merely security devises providing collateral for the debt actually created under the promissory note. So, although lenders often consider mortgages when considering remedies against a defaulting borrower, e.g. A.R.S. § 33-701, et seq., lender and other creditors should be mindful of Arizonas statute of limitations regarding breach of contract claims. For example, A.R.S. § 12-548 imposes a six-year limitations period to bring an action once a default occurs.
Take-aways:
End notes:
Christopher is a licensed Real Estate Instructor and he teaches continuing education classes at the Arizona School of Real Estate and Business. He can be reached at or at .
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We Sue Lenders For Mortgage Fraud
We offer free legal advice, and we strive to make our services available to homeowners who cannot afford to pay thousands of dollars to save their home. If you believe that your lender has lied to you or is committing mortgage fraud, you should immediately call our office and speak with our experienced mortgage foreclosure attorney to determine your best options to fight foreclosure.
How Do I Dispute An Error Or Request Information About My Mortgage
If you think your mortgage servicer has made an error or you need information about your mortgage loan, you can call or write a letter to your servicer. You may get more protections if you write a letter.
Your servicer may be able to help you over the phone. See your monthly mortgage statement or coupon book for the phone number. However, to guarantee yourself a timely written response, you should write to your servicer and send it to the address provided by the servicer for such requests.
Sample Letters
- to help you write your mortgage servicer to request information. This document also provides some additional information about requesting information from your servicer.
If you submit a letter, remember:
- To include your name, home address, and mortgage account number. Use the name that is on your mortgage.
- To identify the error or information. Tell your servicer exactly what error you believe occurred, or what information youre requesting.
- Not to write your letter on your payment coupon or other payment form. You might not get the same protections.
- To mail the letter to the right address. A mortgage servicer may use a special address for borrowers to send requests to correct errors or request information. You generally should be able to find this address in a notice from your servicer, on your monthly mortgage statement or coupon book, on your servicers website, or by calling your servicer. If your servicer uses a special address, you must send the letter to that address.
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Should I Hire An Attorney If I Have A Mortgage Lender Dispute
As can be seen, there are many disputes that may arise with a mortgage lender during the process of purchasing a home. Further, the real estate process is often a complicated process involving numerous parties. Therefore, it may be in your best interests to seek out a well qualified and experienced mortgage attorney to help guide you through the process of obtaining a mortgage and purchasing a home.
An experienced mortgage attorney can help you review loan documents, assist you in contract negotiations, as well as represent and file a legal claim on your behalf against the mortgage lender, should any disputes arise.
- No fee to present your case
- Choose from lawyers in your area
- A 100% confidential service
How To Lower My Mortgage Payment Without Refinancing
Category: Loans 1. Lower your mortgage payment without refinancing Feb 25, 2020 A mortgage recast lets you lower your monthly payment, without the large upfront cost of refinancing. Learn more about mortgage recast here. How to Lower Your Mortgage Payment without Refinancing · 1. Re-Amortize Your Mortgage · 2.
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Should You Sue Your Mortgage Lender
Wednesday, February 17, 2016 Maxwell Swinney foreclosure grief
If you’re like many homeowners fighting foreclosure, you may have wondered if you can sue your mortgage lender. After all, it’s been proven that the banks have lied, forged documents, deceived people in desperate need of help, and broken countless laws. It’s happened with loan origination, servicing, and in the foreclosure process. If you can’t sue for that, then what in the world can you sue for?
Technically speaking, you can sue. You can pretty much sue anyone for anything. All you need is the money to pay the attorney’s fees. The question is whether you should. Is it worth the considerable time, effort, and expense? Every situation is different, so the answer will have to be decided on a case-by-case basis, but there are some things everyone should look into before they decide to file a lawsuit against their mortgage lender.
Fair Debt Collection Practices Act
If your issue is how the lender is trying to collect the money you owe, then your best bet is to sue under the FDCPA. This prohibits the lender from using arbitrary and abusive practices to collect your debt.
The FDCPA covers all types of personal credit, including mortgages and credit card loans. This law is aimed primarily at the harassment to which debt collectors have been known to subject debtors.
Debt collectors cannot call you past a certain time at night, and they are forbidden from contacting you at work. They are not allowed to subject you to a pattern of harassment. Moreover, they cannot contact you directly if they know you have a lawyer.
The law has a provision that allows you to file a civil lawsuit against a debt collector.
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Did Your Lender Act Illegally
We have hundreds of homeowners call our office each month looking to sue their mortgage company, but there are many cases that we simply cannot accept. If the bank has not acted illegally in anyway, then there are no grounds for us to file a lawsuit on. The interesting thing is that many times, the homeowner calling us doesnt even know about the violations the bank has committed. Our foreclosure defense attorneys review all documentation related to the mortgage, and often find violations that are grounds for a winning lawsuit against your lender.
Have you recently been denied for a loan modification? Did your lender issue a notice of default or notice of trustee sale? Have you done everything in your power to stop the foreclosure process to no avail without an attorney? Dont lose your home, take action!
Top Five Questions To Ask Before Suing Your Lender For Mortgage Fraud
1. Is the lender moving forward with foreclosure during the modification process?
In California, dual tracking is a common violation. When a lender is offering to modify a loan, all foreclosure action must stop. If you are in the process of applying for a modification and the lender sends a notice of default or notice of trustee sale, you should immediately call a lawyer.
2. Is the lender in contact and offering to help save the home after you missed payments?
In California, lenders are required to contact homeowners before starting the foreclosure process. If you have missed mortgage payments and the lender sends a notice of default or notice of trustee sale without contacting you first, you should immediately call a lawyer.
3. Have you filed bankruptcy in the past 7 years?
A skilled foreclosure lawyer will be able to advise regarding the best legal strategy to save your home. It is possible to file a lawsuit when the lender violates the law, but a bankruptcy may also be a good option for stopping a foreclosure. Some clients may qualify to file bankruptcyand make monthly payments in a court-approved plan to keep their homes.
4. Can you afford to stay in the home?
As a rule of thumb, litigationlawyers can stop a foreclosure, but saving the home largely depends on the income of the borrower.
5. Can you afford litigation paying legal fees, costs, etc.?
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Can You Sue Your Mortgage Company For Not Paying Your Taxes
As a last resort, you can sue your loan servicer in your local small claims court for the amount of the unpaid property tax and penalty. If the credit bureaus adversely report the late property tax payment, insist your loan servicer straighten out the problem with all three of the nationwide credit bureaus.
Enact Your Right Of Rescission
The right of rescission is each individuals right to turn down a loan after signing the paperwork.
According to the Truth in Lending Act , the right of rescission lasts three days on most loans.
Predatory lenders, however, often intentionally fail to adhere to the disclosure requirements outlined in the TILA.
One such disclosure is the Notice of Rescission.
This document informs the borrower of his right to rescind the loan within three days.
It isnt legally binding if your borrower did not provide you with a Notice of Rescission or the notice contained any errors.
If a loan closes without a Notice of Rescission, the borrower has three years to rescind the loan agreement.
If you want out of your predatory loan and your lender failed to provide you with proper notification of your rescission rights, you can legally walk away from your obligation to your lenderin addition to collecting damages in court.
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How To Get A Private Mortgage In Canada
Private mortgage lenders can be individuals or institutions who can be thought of as angel investors they come to your rescue when regular financing options are not feasible. These lenders offer short term asset backed loans for the purchase of property. Many individuals and businesses in Canada take out mortgages from private mortgage lenders Canada. They are great alternatives to regular financing options in many situations.
My Lender Backed Out Of My Mortgage Can I Sue
What can you do if your lender backs out of the mortgage commitment? A lot of buyers might want to sue the lender because it is difficult to close if, at the last minute, youâre scrambling to find a new lender. There are advantages to working with recommended lenders , but you have to make sure you are working with a well-known and reputable lender.
Q: My lender backed out of my mortgage. Should I pursue a lawsuit against the builder because the builder recommended the lender? The lender backed out of the mortgage commitment three days prior to closing, so I couldnât close and the builder decided to keep my earnest deposit. I didnât default in any way and still donât understand why the mortgage lender backed out of the deal.
A: Our first question to you would be on figuring out why the lender backed out of giving you a mortgage. Itâs not unusual for developers and builders to find and work with particular lenders on their projects. These lenders generally will know the ins and outs of the development and have a better handle on the underwriting issues involved.
There are always pluses and minuses to using a lender recommended by your developer/builder/seller. One disadvantage in using a seller recommended lender is that the lender may give you an above market deal for your loan. The lender may not have your best interests at heart in giving you the loan. The lender may not be the best lender out there for the loan you are looking for.
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