Let’s face it; nobody likes to deal with an uncooperative lender, especially during the pre-foreclosure phase of a mortgage loan. Uncooperative lenders are the ones that fail to offer the assistance that they should, the ones who lie to their borrowers, the ones that fail to maintain possession of important financial information, and the ones that generally refuse to negotiate with borrowers.
Most people reading this list of uncooperative lender attributes will wonder what the benefits of dealing with this kind of lender could be. Well, despite what many may think, dealing with an uncooperative lender does have its benefits, but one has to be optimistic about their situation in order to understand those benefits.
In the event that a lender is uncooperative and refuses to work with the borrower, the borrower has every right to take their lender to court to force them to cooperate. When a borrower and lender go to court over a mortgage contract, the type of trial they take part in is called mortgage litigation. When a case goes to trial, the law offers certain protections to both parties.
When a mortgage contract goes to trial, the trial period creates a sort of time out for the lender. A lender is not allowed to pursue a foreclosure or even accept a monthly mortgage payment from their borrower so long as the case is pending the outcome of a mortgage litigation trial. That means that if a lender is refusing to negotiate or consistently refuses to provide assistance; their borrower can take them to court and put a freeze on any foreclosure actions. Once the freeze has been initiated, one of two things will generally happen:
–The lender decides that the freeze is not profitable and a settlement (or at least a negotiation) would be more beneficial…opening up the door for a more likely loan modification.
–The lender will call the borrower’s bluff and take the case to trial. If the borrower is acting on the advice of an attorney, then they stand a good chance of winning, especially if the borrower can provide evidence of predatory lending practices which are in part to blame for the borrower’s financial trouble. It is always best to get the advice of an attorney before going to trial because they will be able to assess the borrower’s odds of winning a case based on the evidence at hand and their own personal experiences.
Another good thing about uncooperative lenders is that they basically dig their own graves, so to speak, if the case goes to trial. Most judges won’t tolerate blatant violations of the law by lenders and if the lender has been so uncooperative as to force undue hardship on the borrower, the lender will have to provide an explanation for their actions in court. In some cases where lenders have acted with such disregard for the law and in violation of certain court orders, judges have been known to cancel entire mortgage debts, leaving the lender unable to purse a single red cent from the same borrower they were attempting to foreclose on. Granted, these cancellations of debt don’t happen every day, but in instances when they have, it was always the lender who acted uncooperatively. In these cases, dealing with an uncooperative lender actually benefitted the borrower by the time their case went to trial.