Mortgage litigation is a legitimate form of foreclosure avoidance that has the potential to keep homeowners in their home. Some “financial extremists” will claim that a person who agrees to pay a lender a certain amount has no grounds for a case, but these individuals fail to realize how many borrowers are taken advantage of during a confusing process that few have extensive experience with. Buying a home is a major step in every person’s life, and most people only buy a home once or twice in their lives. Due to this lack of experience, borrowers assume that their lenders have their best interests in mind and don’t think that their lender would every do anything as unethical as inflating fee amounts or failing to advise borrowers of possible lower rates. Once a borrower becomes a victim of fraud, the contract they signed holds little weight in court. Two instances when a contract, including a mortgage contract, may not be enforced are when evidence of fraud from either party is present or when the contract is created and violates applicable law.
When a lender knowingly or unknowingly commits an act of fraud, they risk voiding some of or the entire contract entered into with a borrower. When a borrower becomes aware of the fraud, they gain leverage when negotiating with the mortgage company. Now, instead of the lender holding all of the power over the borrower, the borrower is given some power over their lender. If a lender previously refused to provide assistance to a borrower by lowering their monthly payment, and the borrower realizes through a review of their documents that they have been made victims of fraud, the borrower is now able to offer their lender an ultimatum…lower the monthly payment, pay back the money collected through fraud, or risk having to admit to fraudulent practices in court, where all matters presented become public record. The borrower is also given this same type of leverage when terms of their contract violate the law.
One should never assume that lenders or lender agents are as knowledgeable about real estate / mortgage law as they say they are. Asking a lender if their contract is all legal is like asking a used car salesman about the condition of the car they are trying to sell. Most will nod their heads and say yes. If any readers have stumbled across this article before they’ve signed any mortgage documents, take this advice: Have a lawyer review the loan documents prior to signing.
Mortgage litigation saves people’s homes by placing the terms of the original mortgage documents under intense scrutiny. Lawyers hired by borrowers to negotiate with lenders or handle mortgage litigation will review any and all loan documents line by line. When it becomes evident that the current financial distress of the borrower is directly related to the fraudulent and illegal practices of the lender, the borrower is placed in a better position to negotiate a modification or settlement with their lender.