Mortgage Foreclosure Crisis – Unique Challenges for Homeowners

The challenges for those facing foreclosure can be overcome with a foreclosure lawyer

The mortgage foreclosure crisis began to plague and torment the U.S. economy and the communities and neighborhoods across America around 2008. Attempts to resolve this crisis have sparked government programs, mortgage lender initiatives… and sadly enough, many lawsuits.

As foreclosure lawyers began to help homeowners facing foreclosure, they noticed a number of irregularities and illegal practices committed by the mortgage lenders and banks. These caused an endless stream of illegal foreclosures and a significant impact on the nation’s residential markets. Not since the Great Depression of the early 20th century have so many homes been seized and so many homeowners put out onto the streets and left sleeping in their cars.

Some of these homeowners saw their payments skyrocket just as they lost their jobs and a few were actually guilty of buying more homes than they could afford. In many cases, the homeowners noticed glaring errors and servicer mistakes that pointed to questionable accounting practices, penalties imposed without notice, excessive fees for property inspections and maintenance, even overinflated and unnecessary attorney’s fees being tacked onto their mortgages.

How Lenders Contributed to the Mortgage Foreclosure Crisis

Many homeowners were cheated by the mortgage lenders in a number of ways. Here is how the lenders contributed to our nation’s mortgage foreclosure crisis:

  • Several homeowners who signed up for mortgage modification programs sponsored by their mortgage loan servicers were surprised to come home and find foreclosure notices stuck on their front doors and signs in their yards. It turns out a ‘computer glitch’ was blamed but many homeowners actually lost their homes due to incorrect paperwork processing between differing departments within the bank.
  • Many homeowners did the right thing upon realizing they wouldn’t be able to make a payment – they contacted their mortgage lender and asked them for options to modify or extend their loans. The lenders agreed to be in touch and then when the homeowner was off the phone, began processing the foreclosure instead.
  • Other homeowners worked out an agreement with their bank and continued to send in their payments only to have those payments processed incorrectly by the banks and to have to fight foreclosure proceedings due to servicing errors of their mortgage.
  • The banks sliced and diced up loans and sold them packaged as ‘securities’ with gold-plated ratings to investors such as large pension funds and foreign banks. As housing values began to drop and the lending market dried up, loan servicers began to take a second look at those securities. The goal was to determine why the money wasn’t flowing in the way it did before and they then discovered a whole range of accounting errors.

All in all, the lenders have demonstrated a significant lack of legal proficiency or attention to the law and it appears that none of the lawsuits filed against them have done much to curb their enthusiasm. The only way a homeowner can get a fair shake in this mortgage foreclosure crisis is by staging a proper foreclosure defense and fighting their foreclosure with an attorney who is experienced with applying foreclosure law. The only way this nation is going to put an end to the mortgage foreclosure crisis is by working through the mess slowly and surely and putting an end to wrongful foreclosure.