Is Your Foreclosure a Result of Fraud Or Financial Mistakes?
With all of the fraud and deception coming to light during the current foreclosure crisis, it is easy to overlook the massive fraud that has been a staple of the mortgage industry for years.
When loans are originated, they are often quickly sold off to large investment banks, which then hire mortgage servicing companies to collect the monthly payments.
But these servicers have been involved in the practice of stealing homes from uninformed, vulnerable property owners through a variety of schemes.
They may hold payments made on time for a few extra days, thereby making them late, or place forced property insurance onto an already-insured home, or engage in any number of other activities that set up an easy foreclosure if homeowners fall behind due to a hardship.
This is the type of situation that gives servicing companies a bad name and exposes them to widespread claims of mortgage servicing fraud.
Misapplied payments and selling the loan without informing the homeowners of the new creditor are two common activities these companies engage in that pushes homeowners straight into foreclosure and make it more difficult for the owners to find out what is really happening to them.
Homeowners, of course, have rights and can try to protect themselves against such deceitful acts by the lenders, but it is often very difficult for them to win court battles without a class action lawsuit.
One reason for this is that the banks pay hefty filing fees to initiate the lawsuit, which pays the salaries of the judges and court employees; and they also hire high-priced attorneys who will lie, misrepresent, violate rules, and otherwise fight as hard for the mortgage company as they can to keep their client happy.
In cases of suspected mortgage fraud, possibly the best action homeowners can take is to learn as much about foreclosure and the legal process as possible.
If it is not possible to hire their own attorney, then they need to understand what resources they have in the court system to put an end to the fraudulent foreclosure.
This will not guarantee they will be able to stop foreclosure, but they may learn enough about the scam to help themselves or others avoid it in the future.
It is also in their best interests to consult with a company or attorneys who specialize in such cases of mortgage lender misconduct to determine if the bank has violated any state foreclosure laws or rules of procedure.
If this is the case, the entire foreclosure may be reversed and the bank will have to start all over again from the beginning, or give up their lawsuit if they can not prove their case or follow the rules.
One of the more devious aspects to situations like these, however, is that the mortgage servicing company will keep making these "clerical errors" like misapplying payments or putting forced insurance onto a property and never inform the owners.
But if the owners miss a mortgage payment, then the foreclosure process will start up and proceed very swiftly, while the bank uses its own errors and fraud to pile on the reasons that the homeowners have defaulted on their mortgage.
Because they often engage in such fraud and misconduct, servicing companies in particular seem to feel the need to move forward as quickly as possible with the foreclosure.
This has the effect of pushing the owners into a desperate attempt to save the house any way possible, instead of examining critically the errors that the bank is making in the process.
The fact that the homeowners will often miss a payment also leads them to blame themselves for the situation, rather than the mortgage company's fraud and mistakes.
The entire foreclosure lawsuit is often nothing more than a distraction, a legal method of stealing a home that relies on the desperation and ignorance of the owners to fail to recognize the scam.
When loans are originated, they are often quickly sold off to large investment banks, which then hire mortgage servicing companies to collect the monthly payments.
But these servicers have been involved in the practice of stealing homes from uninformed, vulnerable property owners through a variety of schemes.
They may hold payments made on time for a few extra days, thereby making them late, or place forced property insurance onto an already-insured home, or engage in any number of other activities that set up an easy foreclosure if homeowners fall behind due to a hardship.
This is the type of situation that gives servicing companies a bad name and exposes them to widespread claims of mortgage servicing fraud.
Misapplied payments and selling the loan without informing the homeowners of the new creditor are two common activities these companies engage in that pushes homeowners straight into foreclosure and make it more difficult for the owners to find out what is really happening to them.
Homeowners, of course, have rights and can try to protect themselves against such deceitful acts by the lenders, but it is often very difficult for them to win court battles without a class action lawsuit.
One reason for this is that the banks pay hefty filing fees to initiate the lawsuit, which pays the salaries of the judges and court employees; and they also hire high-priced attorneys who will lie, misrepresent, violate rules, and otherwise fight as hard for the mortgage company as they can to keep their client happy.
In cases of suspected mortgage fraud, possibly the best action homeowners can take is to learn as much about foreclosure and the legal process as possible.
If it is not possible to hire their own attorney, then they need to understand what resources they have in the court system to put an end to the fraudulent foreclosure.
This will not guarantee they will be able to stop foreclosure, but they may learn enough about the scam to help themselves or others avoid it in the future.
It is also in their best interests to consult with a company or attorneys who specialize in such cases of mortgage lender misconduct to determine if the bank has violated any state foreclosure laws or rules of procedure.
If this is the case, the entire foreclosure may be reversed and the bank will have to start all over again from the beginning, or give up their lawsuit if they can not prove their case or follow the rules.
One of the more devious aspects to situations like these, however, is that the mortgage servicing company will keep making these "clerical errors" like misapplying payments or putting forced insurance onto a property and never inform the owners.
But if the owners miss a mortgage payment, then the foreclosure process will start up and proceed very swiftly, while the bank uses its own errors and fraud to pile on the reasons that the homeowners have defaulted on their mortgage.
Because they often engage in such fraud and misconduct, servicing companies in particular seem to feel the need to move forward as quickly as possible with the foreclosure.
This has the effect of pushing the owners into a desperate attempt to save the house any way possible, instead of examining critically the errors that the bank is making in the process.
The fact that the homeowners will often miss a payment also leads them to blame themselves for the situation, rather than the mortgage company's fraud and mistakes.
The entire foreclosure lawsuit is often nothing more than a distraction, a legal method of stealing a home that relies on the desperation and ignorance of the owners to fail to recognize the scam.
