Having your home foreclosed on by your mortgage lender is an experience no one should have to face. But what happens if the lender foreclosed due to a mistake with a loan modification application? If this has happened to you, you may be the victim of wrongful foreclosure. Here is everything you need to know about loan modification mistakes and how to fight back when the bank makes a mistake and wrongfully foreclosure on your property.
When a home is foreclosed on using improper methods, this is what is known as a wrongful foreclosure. Generally speaking, most wrongful foreclosures are the result of miscommunications between a borrower and a lender. Often, wrongful foreclosures involve lenders such as banks using unethical, inappropriate, or intimidating tactics in an effort to take away the homeowner’s property.
Some of the most common tactics used by lenders which are deceitful or unethical include:
- Unfairly raising interest rates
- Require unnecessary insurance coverage
- Violating terms of the mortgage
- Falsifying foreclosure documents
- Not following state law
- Improper loan modification
Loan Modifications Mistakes
Loan modification mistakes are one of the leading causes of wrongful foreclosure in Florida. When homeowners seek their loans modified to meet their current economic realities, occasionally the mortgage servicers who deal with these applications make crucial mistakes, which in turn result in wrongful foreclosures.
Some of the most common loan modification mistakes include:
- Telling homeowners they cannot apply for a loan modification unless they are in default – During the economic crisis of 2008, many lenders erroneously told homeowners they could not modify the terms of their loans. Today, this continues, but in many instances the banks are incorrect.
- Not processing loan modification applications in a timely manner – In many cases, homeowners are left waiting for far too long by loan servicers, meaning their financial issues are not addressed and they may be subject to foreclosure. Under a federal law passed in 2014, loan modification applications must be reviewed, and a determination made within 45 days of the receipt of the application. If additional documentation is required, the servicer has five days to notify the homeowner.
- Calculation errors – Occasionally, mortgage servicers make an incorrect calculation regarding a mortgage loan. If, for example, the servicer wrongly calculates net present value (NPV), a foreclosure could begin. NPV refers to the estimated value of the loan to the investor lending money to the homeowner. If the NPV is determined, the situation would be more advantageous for the investor if the home is foreclosed upon over a loan modification and foreclosure may be imitated.
Because of the ramifications, these common errors can have on homeowners, if you believe your loan modification application was denied through an error, you need to talk to an experienced real estate and foreclosure attorney today.
Contact an Experienced Attorney Today
If you have been foreclosed on by your lender, but feel that their actions are unjust, you should contact an experienced attorney to discuss your case right away. Wrongful foreclosures due to loan modification mistakes are no laughing matter and can have massive implications for your future. Call the Law Offices of Patrick L. Cordero for a free consultation today at (305) 445-4855.