When homeowners are involved in a foreclosure lawsuit, either defending against the bank or initiating their own to stop a sheriff sale, there is a vast amount of information that can be obtained from the bank. Much of this information will be worthless, but there may be a few gems in the mix that make it much easier to show an invalid mortgage, a reason to dismiss the foreclosure, or violations of state and federal laws.
The only real problem is getting this information out of the bank, mortgage servicing company, or other appropriate parties. For such cases, homeowners and their attorneys can rely on the discovery process. Requests made to the lender and other companies to produce documents relating to the real estate transaction can assist borrowers in putting together an adequate defense of their home.
In fact, the largest problem may be figuring out which documents to request from whom and then going through all of the paperwork to find the applicable information. There are numerous documents that may be requested from parties such as the mortgage broker, appraiser, lender, assignees, trusts, and so on. Just a few of the documents are listed and discussed below to give borrowers some idea of the scope of the matter.
From the settlement agent, borrowers may be able to request copies of all canceled checks that were sent out to all of the parties after the closing of the loan. Especially in refinances, homeowners may take out a loan expecting to receive a substantial amount of cash back at closing, only to find out that it has all been eaten up by fees and charges. It may be a good idea to find out who all those fees were paid to and for what.
The actual underwriting guidelines in place at the time the mortgage was originated may also provide important information for borrowers. If there were basically no underwriting standards in place for the type of mortgage that was offered to the debtors, can the bank expect anything besides foreclosure as the likely result? Or was it instead a case of predatory lending, where the bank made a loan it counted on to fail?
If the homeowners are alleging a pattern of abusive lending by one company or servicer, requesting copies of files of other borrowers can be done. Often, a company that abuses one homeowner will be guilty of abusing many others in similar situations, especially if there is a financial incentive (in the case of servicing companies) to charge late fees and push homeowners towards foreclosure.
Homeowners can also request many of the complete files of other parties involved in the transaction. These might include the creditor's file, the mortgage broker's file, the home inspector's file, the closing agent's file, and so on. In cases of conspiracy or RICO charges, there may be a collusion between many actors that had the end result of lying to and fleecing the borrowers to steal money from banks.
Agreements between different parties in the origination or subsequent securitizing and servicing of the loan can also be requested. Lenders make agreements with brokers, assignees, home inspection companies, and more to get a loan closed and sold. Other companies will securitize the loan and make agreements with investment firms, mortgage servicers, and others. Even servicing companies will make agreements with subservicers or trustees to handle foreclosures.
Thus, all of the information that homeowners can request to stop foreclosure can become a huge pile of paperwork to go through. But the rewards may be worth far more than the time invested. If it can be proven that lenders acted fraudulently or in a manner designed to hurt borrowers, then the foreclosure may not be allowed to go through. Especially if homeowners believe they have been taken advantage of, they should begin requesting documents from the companies involved.
Author Resource:-
Nick writes for the ForeclosureFish website, which gives homeowners the advice and resources they need to avoid foreclosure on their own and defend themselves against the bank's lawsuit. The site describes numerous methods to save a property, including foreclosure refinancing, deed in lieu, loss mitigation, stopping a sheriff sale, bankruptcy, and more. Visit the site on the web to read more about how you can avoid losing your house, repair your credit, and establish a long term financial plan once a crisis is over: http://www.foreclosurefish.net/
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