Understanding Loan Modification and Your Rights as the Borrower
It is important to understand your rights as a borrower with regard to loan modifications. There are powerful new regulations that have been promulgated by the Consumer Finance Protection Bureau (“CFPB”) under the Real Estate Settlement Procedures Act (“RESPA”) and the Truth in Lending Act (“TILA”) that finally give borrowers the right to sue when mortgage loan servicers fail to meet their servicing obligations. We can sue your lender if they violate these regulations.
Do I Have a Case for a Loan Modification Lawsuit?
Under RESPA, you might have a case for a loan modification lawsuit if:
- You have submitted a complete loan modification application and the loan servicer moves forward in any way to foreclose. (This includes filing a Foreclosure Complaint, filing a motion for relief from stay in Bankruptcy, applying for Final Judgment, or setting a date for a sheriff sale or failing to avoid a judgment or withdraw a sale.)
- Mortgage Servicer fails to honor an agreed-to Loan Modification. (Even if your loan was transferred to a new Servicer, they must honor the modification)
- Mortgage Servicer fails to make a decision on a Short Sale within 30 Business Days.
- Mortgage Servicer refers for foreclosure before a borrower is 120 days past due.
- Mortgage Servicer charges for unnecessary appraisals, legal fees, property inspections, and other corporate advances.
You May Also Have a Case Under TILA Regulations
You could also have a case under TILA Regulations if the Mortgage Servicer:
- Fails to provide correct information on Monthly Statements to Borrower (Borrowers in Bankruptcy are currently exempted). For example, the statement shows the improper interest rate.
- Fails to send statements at all (Borrowers in Bankruptcy or Discharged from Bankruptcy are currently exempt)
- Takes money from suspense for payment of fees or corporate advances, before principal, interest, taxes and insurance are brought current.
- Fails to provide the name of owner, master servicer, and servicer within 10 business days of the date of receipt of written request.
- Fails to provide payoff or reinstatement figures within 7 business days of receipt of written request.
Clients who could benefit from Regulations X and Z Case Review:
- Borrowers who have been recently discharged from Chapter 13 or Chapter 7.
- Borrowers who have filed Bankruptcy to avoid Foreclosure but who had an application for loss mitigation pending.
- Borrowers who had a contract to sell their home by way of a short sale, and the Servicer failed to make a decision within 30 business days from submission of the application, and the buyer withdrew.
Contact the Law Office of Ira J. Metrick, Esq., for a Free Legal Consultation
Contact Ira J. Metrick today to discuss whether you have a good case for a loan modification lawsuit. In addition to fighting for justice on your behalf, we’ve helped clients save their homes from foreclosure, claim surplus funds, and stop sheriff sales. If your home is in danger of foreclosure, or you need help with submitting a loan modification or pursuing a lawsuit against a lender, we can help. Call today to learn more.
