Understanding Mortgage Disputes and Deed of Trust Litigation

All homeowners need to know the difference between a mortgage and a deed of trust. They are related, but their differences will become apparent if you are ever involved in a mortgage dispute. A mortgage is essentially the promise from the homeowner to pay money used to buy a home to the lender or mortgage company. A deed of trust is when a trustor holds the title of the property for as long as the borrower owes money to the lender. While the mortgage may only involve a lender and a borrower, a deed of trust always involves a third party that holds the legal title.

Many mortgage disputes involve a misunderstanding of the detailed contract between the lender and the borrower. Disagreements may arise regarding the interest rate, the terms of repayment, escrow accounts and balances, balloon payments, and interest rate adjustments. When the conditions of an agreement are not met between the lender and borrower, one of the parties may file litigation.

In cases involving deed of trust litigation, the third party may have the power to settle disputes. More often than not, the trustee will act on behalf of the lender because the borrower has missed payments. This is common when borrowers fall behind on payments and are struggling to catch up. When the three parties cannot come to an agreement, real estate litigation may be needed to sort out the details.

Not all mortgage litigation cases and deed of trust litigation cases result from a failure to make payments. In some instances, the homeowner is the one who has been wronged. For example, homeowners who feel mislead or cheated may have it in their best interest to file a claim. Some lenders have a history of illegal practices and the only way to hold them accountable for their actions is to file a claim.

If you have questions about your loan, it is best to speak with your lender before things get out of hand. Once you start missing payments, your legal options will change. You may face foreclosure and the lender may go to great lengths to recover the money they lent. You will need to act quickly to protect your home. Whether you are filing a claim or have had a claim filed against you, you will need guidance throughout the proceedings from an Orange County real estate attorney who has a successful track record of handling cases like yours.