Although you can technically take legal action against someone for many reasons so long as they have merit, the fact remains that it requires a significant investment to pursue any litigation. Therefore, while suing your mortgage lender is an option, you should weigh it thoughtfully before being pursued.
Even though stress is not a legitimate basis for filing a lawsuit, read on to learn how you can potentially sue your mortgage company over errors that may be worth quite a bit of money
What is RESPA?
It’s no wonder customers often seek legal action against lenders and servicers for not correctly conforming to the Truth in Lending Act and Real Estate Settlement Procedures Act when mortgage servicers make blatant mistakes managing a homeowner’s loan account.
If you feel that an error has been made when managing your mortgage payments, the Real Estate Settlement Procedures Act (RESPA) serves as a legal avenue to fix it. In addition to this service, RESPA provides access to detailed data concerning your account.
Suing Your Mortgage Company
Suppose you are a homeowner who suspects that the mortgage company is directly violating RESPA regulations and is facing a foreclosure sale. In that case, you can file suit against them as an individual or on behalf of your business.
Reasons to File a Lawsuit Against Your Mortgage Company
Unpaid mortgage payments can ultimately result in the foreclosure process, but unfortunately, the lender only sometimes acts appropriately. Errors such as inaccurate processing of payments or miscalculations on what has been paid are just a few causes that lead to wrongful foreclosures.
At times, modifications of agreements between parties can be vague and confusing – this includes failure to inform customers about changes promptly. For example, suppose your mortgage company needs to advise you correctly regarding any alterations that affect your contract or withhold necessary information. In that case, you may have the right to dispute their actions and even file a lawsuit against them.
When you’re confronted with foreclosure, and your mortgage lender charges exorbitant fees, you also have the right to begin a legal proceeding. A lawyer expert in foreclosure law can answer if you have this kind of opportunity while facing foreclosure.
When mortgage lenders fail to pay property taxes while their customers expect them to, you can take a legal process against the lender.
A lawsuit against mortgage companies may also be due to their purported improper calculation of interest or taxes and unlawful credit practices.
Notices of Error Under RESPA
What if your mortgage company has made a mistake that leads to a direct violation against homeowners?
If you think your mortgage servicer has erred, sending a letter is the most successful way to challenge it. Furthermore, this approach may provide more protection than other forms of communication.
To qualify as a notice of error that a lawyer can use, a written request must clearly state that there is an issue with servicing one’s mortgage loan.
When mortgage companies review borrowers’ letters, they must determine if each meets the requirements for a notice of error. Here is where an experienced lawyer can ensure everything runs smoothly and efficiently.
Remember that most lawyers offer free consultations, giving you the perfect opportunity to explain your situation and show any relevant documentation. In this way, they can tell you if they can help with your case.
Common Types of Servicer Errors
There are many kinds of mortgage company servicer errors. For example, incidents of lenders imposing late fees on payments made promptly or implementing unexpected default property management charge for borrowers who are not delinquent have occurred quite often.
Many forbearance attorneys know the potential legal battles that can arise from mortgage companies charging for force-placed insurance in unauthorized circumstances.
Deadline to Acknowledge a Notice of Error
Within five days of a servicer receiving notification from the borrower about an error (excluding national legal holidays, Saturdays, and Sundays), they must provide written acknowledgment to confirm receipt.
Discrimination From a Mortgage Company
The Consumer Financial Protection Bureau (CFPB) safeguards fairness and equity in financial transactions by enforcing the Equal Credit Opportunity Act. This law prohibits lenders from discriminating against potential borrowers based on race, gender, religion, or other aspects of identity.
If consumers feel they have received unfair treatment while applying for credit or a loan, they can file a complaint with the CFPB to investigate possible unlawful actions.
How To Sue Your Mortgage Lenders
Regarding legal matters, the most prudent way of proceeding is consulting with a knowledgeable lawyer from your region specializing in mortgage company disputes. Contacting such an attorney is essential for ensuring that you are navigating the issue appropriately and efficiently.
Serve Notice To Your Mortgage Company
According to the Consumer Financial Protection Bureau, servicers are mandated to observe all regulations once they have received a written notice from the borrower that alleges an error.
To be considered authentic, such notices must include the following:
- The borrower’s full name
- Your account number
- Mistakes you think have occurred
Internet Forms Can Serve Notice?
A mortgage lender can choose to create a process for receiving notices of error through email, web forms, or other online methods. This should be an additional step and not replace any existing email-based processes.
Make sure to collect all the pertinent documents associated with your mortgage and home purchase. Do not forget:
- All contracts (sales and mortgage)
- Any communications between real estate agents, brokers, the purchaser, and the lender
- Any other essential documents related to the house and its transactions.
Once you have obtained all applicable documents and thoroughly evaluated your initial mortgage agreement, reach out to the lender and determine if they can address any conflict that may be present.
Keep it handy!
Your initial mortgage agreement holds pertinent details, including your responsibilities and rights per the contract and those of the lender.
As a borrower, you have the right to request specific information from your mortgage lender.
Within fifteen days of receiving a borrower’s request, the servicer must provide free copies of any documents or information supporting their determination that no error had occurred. This timeframe excludes public holidays, Saturdays, and Sundays.
Nevertheless, the mortgage lender is exempt from sharing confidential, proprietary, or privileged documents.
Once again, a mortgage lawyer is a person you must contact to understand how requesting information works.
If an error occurred
Once you are working with the right lawyer, an expert in their practice area, they will begin by requesting information. They will also help you create the perfect letter for notice of error.
The lawsuit process can be complicated but remember you do not have to navigate it alone. The law is there to help consumer interest so that you can bring legal action against the mortgage company.
The right attorney will assist you throughout the process, giving you support.
Worried About Attorney’s Fees?
If your financial circumstances make you unable to pay a lawyer, you can consider legal aid. You also can receive assistance through creative payment arrangements such as deferred or contingent fee contracts.
If you walk in the right direction regarding this legal issue, the lawsuit can also cover attorney’s fees.
Obligations Towards Your Mortgage Lender
Finally, remember you acquired certain obligations when you borrowed money through a mortgage that you must respect. If you fear that you cannot keep up with them, ask your lender for the options to modify or refinance your loan.
A knowledgeable foreclosure lawyer can help you understand these services further and if you hold a chance against your mortgage lender because of their error.
Today is the day to take a stand against mortgage lenders and protect your rights as a homeowner. Speak with a foreclosure defense attorney about filing legal action for any mistreatment you have experienced at the hands of your mortgage company.
Consult with a Foreclosure Defense Attorney here.