Just because you owe money to a mortgage company, it doesn't mean that it has the leeway to treat you as it pleases. There are rules and regulations to follow, and lenders who do not follow these rules may be guilty of fraud. Foreclosures, which involve a lender trying to recoup as much of its money as possible, tend to involve a lot of fraudulent moves. Here are three forms of fraudulent moves that you should be on the lookout for when going through a foreclosure:
Dual Tracking
Loan modification, which involves renegotiating a loan to get favorable terms that you can afford, is a common way of avoiding foreclosure. Ideally, a lender should not process your foreclosure once you have applied for a loan modification.
However, some lenders may continue to process your foreclosure even while processing the modification application. Their rationale for dual tracking is that it protects their investments in case your loan restricting application fails to go through. There are federal and state laws that deal with dual tracking. Your lawyer can help you to identify which ones your lender has broken.
Denial After Delay
In law, estoppel is the principle that denies one party from getting harmed by another person's voluntary conduct. In this case (mortgage fraud), it means that you should not experience any loss due to the lender's voluntary acts. Therefore, if a lender takes too long to process your loan modification process, then it shouldn't deny your application. After all, the long wait might have signaled to you that the lender had abandoned its foreclosure plans to grant you a modification.
Negligence
In some cases, a lender's negligence may cost you your chance of loan modification. For example, a lender may tell you that it cannot process your application because your documents have been lost. That shouldn't happen whether the "negligence" was intentional or not. However, if the negligent acts turn out to be intentional, then it may be viewed as a form of fraud.
Accounting Errors
This may be rare, but it can still happen. What is more, accounting "errors" are more difficult to spot if you aren't in the financial or mortgage industry. However, if an accounting error costs you money (for example by increasing your fees), then you have the authority to question the lender about it. Accounting errors become fraudulent if they are deliberately committed.
If you ever suspect that a mortgage lender is not treating you right, then contact a real estate lawyer for an evaluation of your case before instigating a lawsuit. Property laws tend to be very complicated, and you may not understand them if you are not a professional in the industry. To learn more about the law, contact someone like Iannello Anderson.
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