Problems with Mortgage Companies

Today, many homeowners are facing foreclosure and many more will join the ranks of homeowners who have lost their homes in foreclosure as our economic crisis continues. Foreclosure is a very stressful and upsetting process for families to go through, and can also be a very intimidating process to go through alone. Therefore, it is important to realize that there may be options available to help you save your home.

Foreclosure Process

There are either judicial or nonjudicial foreclosures depending on the state where you reside. The most common method of foreclosure in Virginia is nonjudicial, so the lender, servicer, or other agent initiating the foreclosure is not required to go through the state court system. Defending yourself against a foreclosure by a large company such as a bank or other mortgage lender can be a daunting and complicated process. Therefore, we recommend seeking legal aid immediately to determine what options you may have to save your home.

HAMP

In 2009, the Making Home Affordable Program (MHA), which helps homeowners remain in their homes by modifying or refinancing their mortgages, went into effect. The main foreclosure-relief program is the Home Affordable Modification Program (HAMP), which provides incentives for mortgage servicers to lower homeowners’ monthly payments. However, this process is not always easy and often takes great diligence on the part of the homeowner. For more information on HAMP and other federal foreclosure-relief and housing programs, you can take a look at the following websites:

• The U.S. Department of Treasury’s Making Home Affordable Program
• The U.S. Department of Housing and Urban Development (HUD)
• The Federal Housing Finance Agency (FHFA)

Foreclosure Rescue Scams

If you are facing foreclosure, beware of so called “foreclosure rescue” scams, which have become increasingly common as the number of foreclosures rises. These alleged “foreclosure rescue” companies or firms generally make promises that not only result in homeowners losing thousands of dollars when already experiencing financial difficulty, but also often result in their homes being lost in foreclosure or through other means. Below are a few examples of rescue scams that generally do more harm than good:

• Bailout – Here the scammer pays off the default amount in exchange for the homeowner surrendering the title to their house. The homeowners are then told they can rent their house back from the scammer until they are able to payback what is owed. Ultimately, under unconscionable rental terms the homeowners default, are evicted, and lose all the equity in their homes.
• Bait and Switch – This scam occurs when the homeowners do not realize they are surrendering ownership of their houses in exchange for a “rescue.” Either the sale documents are forged or the homeowners are led to believe that they are only signing documents for a new loan to make the mortgage current.
• Phantom Help/“Loan Modification Specialists” – Here the supposed rescuer charges very high fees for basic phone calls and paperwork that the homeowners could have done themselves. Or, the rescuer will make promises to represent the homeowners in negotiations with the bank, but will then do nothing to save the home. Many of these scammers use deceptive tactics to market their “services” as an affiliate government-run loan modification program even though that is the furthest thing from the truth.

What should I do if I am facing foreclosure?

Many times mortgage companies will hire debt collectors to process the foreclosure of your home. Under the Fair Debt Collection Practices Act (FDCPA), there are specific procedures that must be followed when these debt collectors contact you attempting to collect a debt, or in your case attempting to provide notice of a potential or pending foreclosure sale. Very often these debt collectors violate federal law when they contact and communicate with homeowners facing foreclosure.

If you have been contacted by a debt collector that is attempting to foreclose on your home or you have already lost your home in a foreclosure sale, it is imperative that you contact us or another consumer attorney as soon as possible. Your claim(s), if any, against these debt collectors could expire as quickly as one or two years, depending on the type of claim. If this is the issue you are facing, you may send an email to our intake department here or you may contact us by phone.