Owning a home is a major milestone, but losing a home is a devasting setback. This blow is especially devasting when the basis of the foreclosure is unjust. Although the bank owns the mortgage, they cannot take away a homeowner's rightful possession at will. If you are facing an unlawful foreclosure, it is important to consider legal assistance.
Applicable Local Laws
It is not uncommon for large financial institutions to have their headquarters in one state and serve customers in another. Different states have varying foreclosure laws, but the important thing to remember is that lenders must follow the laws in the state in which the property is owned.
For example, if the law in the state where the main office is located does not allow for legal reinstatement, but the state where the property is located allows a reinstatement any time before the sale of the home, the bank must follow local laws. Any foreclosure that goes against local laws should be investigated.
As long as the property is funded under a mortgage, homeowners are required to maintain standard insurance coverage. Homeowners are not, however, required to carry add-on policies unnecessarily. Consider a lender that is forcing a homeowner to carry flood insurance, although their home is not in a high-risk flood zone, for instance.
When a lender engages in this sort of unfair practice, the home can instantly become unaffordable for the borrower. As a result, the borrower may miss payments and face foreclosure. Lenders can only force borrowers to cover necessary coverage, anything beyond that is against the law.
A benefit that mortgage companies can extend to borrowers is an opportunity to modify their mortgage. Modification can come in the form of a lower interest rate or an extended loan term. Unfortunately, some lenders fail to handle the modification process appropriately.
If a borrower has submitted all the required documentation, the lender is slow to move, and they are facing a foreclosure, it is generally not the fault of the borrower nor is it legal for the lender to move forward with the foreclosure. If the borrower can prove they did their part, an attorney might be able to help them halt the foreclosure process.
You do not have to remain silent during this situation — you can fight back. Contact a foreclosure defense attorney to learn what steps you can take to fight an unlawful foreclosure.