Having your home foreclosed upon by your mortgage lender is an experience no one ever wishes to have. But what happens if you think the lender foreclosed due to a mistake? Or even worse, due to negligence or fraudulent reasons. If this has happened to you, you may be the victim of wrongful foreclosure. But, what is a wrongful foreclosure, and what can be done to prevent one?
What Is Wrongful Foreclosure?
Wrongful foreclosures occur when a lender initiates a foreclosure process upon a homeowner when no legal cause exists. Wrongful foreclosures may also occur when a lender initiates a wrongful foreclosure process and then accepts partial payments from a homeowner to cease the foreclosure but instead continues on with the process.
Causes of Wrongful Foreclosures
Generally speaking, most wrongful foreclosures are the result of miscommunications between a borrower and a lender. Wrongful foreclosures are often initiated by lenders when they allege any one of a number of incidents has occurred. These incidents include, but are not limited to, the following:
- An incorrect adjustment to interest rates.
- Incorrect tax accounts.
- Misapplied payments.
- Breach of contract.
- A forbearance agreement to which the borrower did not adhere to.
- Infliction of emotional distress, either negligently or intentionally.\
- Improper accounting.
- Unfair business practices.
Impact of A Wrongful Foreclosure
Regardless of why a wrongful foreclosure was initiated by a lender, their impacts can be catastrophic for borrowers. Wrongful foreclosures appear on a credit report as a foreclosure, meaning that a borrower’s credit score will be destroyed by the action. Not only that, but a wrongful foreclosure may result in the homeowner losing their property and assets. Beyond these, wrongful foreclosures can take an immense toll on a homeowner’s mental health and emotional state.
What to Do if You Are Wrongfully Foreclosed Upon
When it comes to a wrongful foreclosure, it is the borrower who must initiate action against the lender. This action must be taken against the holder of the note, usually the lender, or in the case of a non-judicial foreclosure, against the trustee, arguing that an illegal or fraudulent sale of property under a power of sale contained within a mortgage has occurred.
As the act of a wrongful foreclosure can have serious repercussions financially and emotionally on a borrower, damages are available should they prove the foreclosure was wrongful. These damages are assessed on the value of the property, the emotional distress the action had upon the borrower, as well as any punitive damages the court may award against the lender. It should be noted, however, that these damages may only be awarded if the borrower is able to prove that the lender acted improperly or fraudulently.
Contact an Experienced Attorney Today
If you have been foreclosed upon by your lender, but feel that their actions are unjust, you should contact an experienced attorney to discuss your case right away. Wrongful foreclosures 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.