Fighting Mortgage Fraud and Saving Your Home
Posted on July 28, 2008
Filed Under Loans |
For the many homeowners who have had to live with the loss of the home due to fraud or illegal activities, it is not surprising to them that banks are the ones that more often than not will win foreclosure lawsuits. Most of the laws that are now in action are designed to keep homeowners in the dark about their dealings with their mortgage company.
Since the foreclosure crisis has begun, there has been much coming out about mortgage fraud, the misuse of bankruptcy laws, banks violating the Truth in Lending Act and a host of other unethical lending practices.
Mortgage fraud occurs when a mortgage company is hired by the bank to collect mortgage payments and take care of the home loan. Since financial companies want to get as much money as they can from a homeowner and since getting the interest on the loan does not equal to a lot of money, mortgage companies will often raise the fees on loans and this in turn will push a home into foreclosure. After this happens the home can be sold at a high price.
Homeowners who have been victims of unethical lending practices often report that they have dealt with discrepancies in account balances, outrageous fess, and other things that have added thousands of dollars onto their mortgage. Many often initially believe that these things are just mistakes made by their lenders, but many discover that when they try to stop foreclosure they are thwarted by the lawyers for the banks.
Mortgage fraud can be seen in the bankruptcy process. Bankruptcy laws of reform were established to keep borrowers from taking advantage of the bankruptcy process in order to keep from making their loan payments. Bankruptcy courts have realized this but there is not much that can be done about this as far as first mortgages are concerned and lowering mortgage balances. There have been talks in the government about allowing bankruptcy judges to drop the amount of mortgage payments so that the payments match the value of the house but so far this proposal has not gotten far in congress.
Surprisingly, some have fought the foreclosure of their home by filing lawsuits against the bank. In these lawsuits, homeowners demand that their lender prove that they are in possession of the initial mortgage contract and that they actually have standing to sue them for foreclosure. Banks can have difficulty doing this because a bank may only hold a part of the home mortgage. Many loans are split up and sold to investors; this means that there is not one person who can declare complete ownership of the home loan.
There are now some ways that mortgage fraud and unethical lending practices can be fought. Even though this is no real consolation to some who are trying to keep their homes, any new legal option that becomes available to fight bank foreclosures will be a good thing. However, there is no guarantee that an unethical judge may not let the banks continue to dupe homeowners. However when it comes to saving your home, there are some risk you cannot afford NOT to take.
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