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With the economic upheavals of the last few years, many homeowners have found themselves in danger of losing their homes. Loss of jobs meant loss of income for many, and as a result, they fell behind in their mortgage payments and faced foreclosure. However, there are homeowners who play by the book and do everything right. Yet they find themselves in foreclosure through no fault of their own, but through negligence or outright wrongdoing on part of the lender.
AUTHOR YURIY MOSHES, ESQ
Founding Member of Moshes Law, P.C.
During his years of practice, Yuriy has concentrated in litigation and real estate transactions as his areas of expertise
Protect your home and your rights—contact our experienced foreclosure attorney today for a free consultation.
If you find yourself in this situation, the right legal help is necessary to help you keep your home. Chat with, or fill out a form for a phone consultation, with one of our wrongful foreclosure attorneys. They can go over your case with you, and if needed, explain how to file a wrongful foreclosure suit
Banking and other lending institutions shouldnt’ foreclose until all loss mitigation options have been exhausted. But nevertheless, it still happens. So what are some wrongful foreclosure elements?
An incorrect adjustment to interest rates
One of the most common reasons for wrongful foreclosures are incorrect adjustments of interest rates. Sometimes different divisions will process loan modifications and foreclosures at the same time. This can cause homeowners working on modiftying their loans, to try to avoid foreclosure, to be foreclosed on anyway.
Incorrect tax accounts
Another common cause of wrongful foreclosures is incorrect tax accounts. Many mortgage companies require a person to pay into an “impound tax account”, which then in turn pays things like property taxes and insurance aside from the straight mortgage payment you pay. Some borrowers who put down less than 20% down payment may be required to pay into an impound account. This account is hands free for homeowners for the most part as the lender manages the impound tax account. But it doesn’t mean that lending companies might inadvertently or deliberately mismanage these accounts, potentially resulting in shortages to pay the needed taxes and insurance.
Breach of contract
Mortgages are legally binding, and terms apply to the lender as well as the borrower. Breaches of contract can happen in a couple of different ways. The lender fails to adhere to a loan modification agreement and refinance or restructure accordingly. A lender can also fail tp provide proper notice of loan term changes, both of which result in breach of contract.
Infliction of emotional distress
The hassle of having to deal with and fight a wrongful foreclosure can create undue stress on a homeowner and their family. The added expense of having to relocate if evicted, aside from being in default on a mortgage, as well as any legal expenses incurred with potential foreclosure lawsuits against lenders, can be more than many want to deal with.
Unfair business practices
One would think lenders would work for the best interest of borrowers. But soem lenders will engage in unfair business practices because they ultimately have their bottom line to watch out for. And this may include questionable business practices aimed at increasing profits for the lender through unfair practices like higher interest rates and unfair loan agreements.
Improper accounting
Sometimes glitches in software or computer system malfunctions can affect the numbers on the books. Key example is the aforementioned Wells Fargo incident.
Wrongful foreclosures, if not resolved or reversed, can have severe years-long impacts on homeowners. From the immediate issues of relocating and the financial and emotional stress it can create, to further in the future when things like adversely affected credit scores can affect future ability to buy things like homes or even cars.
Foreclosures are complicated matters to fight, especially if you are being wrongly foreclosed upon. Luckily you can sue for wrongful foreclosure. New York is a judicial foreclosure state, meaning the lender has to take you to court to foreclose on your home or other property. Often wrongful foreclosure is brought about as a counter defense. How do you calculate damages on a wrongful foreclosure? Each case is different, but there are three main components to wrongful foreclosure damages: actual damages, court costs and punitive damages for wrongful foreclosure.
One important thing to keep in mind, in lawsuits involving wrongful foreclosure, statute of limitations may apply. In New York, the statute of limitations for wrongful foreclosures is six years. It may seem like a long time to be able to take legal action, but it’s still important to file suit as soon as possible. And the first step starts with hiring the right legal team. Visit Moshe’s Law to chat with our wrongful foreclosure legal team, or to make an appointment for a phone or in-person consultation.
It may be impossible to avoid wrongful foreclosure in some cases, but it’s possible to fight it. And you can take steps to avoid wrongful foreclosure actions:
Sometimes wrongful foreclosures are unavoidable despite the most diligent record keeping. One other possible avenue for forestallign a wrongful foreclosure is applying for an injunction to stop a foreclosure sale until the lawsuit is resolved.
An illegal foreclosure is a foreclosure which has no legal basis (like a homeowner falling behind on mortgage payments). These foreclosures can be accidental, negligent, or deliberate in nature.
A wrongful foreclosure must contain the following elements: a legal duty, and a breach of that duty, from the lender to the borrower, a provable link between the breach and the wronged borrower, and damages for the wronged borrower.
To win a wrongful foreclosure case, you must prove that the lender violated legal procedures or acted in bad faith, and that this directly caused harm. Working with an experienced foreclosure attorney is key to gathering evidence, filing timely claims, and navigating court procedures.
Yes, if you can prove that the foreclosure was conducted without legal justification or involved fraud, you may have grounds for a lawsuit. Courts may award damages or even reverse the foreclosure under certain circumstances.
Wrongful foreclosure settlement amounts vary widely based on damages, lost property value, emotional distress, and legal fees. Settlements can range from tens of thousands to hundreds of thousands of dollars, depending on the severity of the case.
Yes, depending on the stage of the foreclosure, you may be able to stop it through loan reinstatement, bankruptcy, a loan modification, or legal action against a wrongful foreclosure. An experienced attorney can help determine the best option.
You don’t have to deal with wrongful foreclosures by yourself. Our team of wrongful foreclosure attorneys will examine your case in detail and suggest the best course of action when suing for wrongful foreclosure.
Fill out the form on our website to talk with one of our legal experts, or chat with one of them online today. The sooner you get started with us, the sooner you can start getting your life back.
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