|SPOTLIGHT ON THE LAW – FORECLOSURE /SHIFTING THE
BALANCE OF POWER
SPOTLIGHT ON THE LAW - FORECLOSURE
By Scott McCluen, Attorney at Law 8/25/08
Sometimes the American Dream of owning a home can quickly become the American Nightmare.
According to the RealtyTrac U.S. Foreclosure Market Report, 1 in every 639 Tennessee households faced a foreclosure filing in May 2008.
Foreclosure can happen because of unforeseeable loss or tragedy. In a growing minority of instances, it can be the foreseeable result of illegal, predatory practices of the lender.
Such lender practices may include: inflated appraisals, excessive fees, abusive prepayment penalties and kickbacks to brokers.
Other predatory practices may include loan flipping, without providing any net tangible benefit to the homeowner; unnecessary products sold and financed with the loan; mandatory arbitration and improper steering of homeowners to subprime mortgages when in fact they may have qualified for less expensive mortgages.
Because mortgages are bundled together and sold several times, increasingly, homeowners are successfully challenging foreclosures started by “foreclosure mills”, law firms handling hundreds of foreclosures, by proving that so-called "securitization lenders" that bought scores of mortgages as investments — are initiating foreclosures without the original paperwork and proper chain of title (ownership of the mortgage) and sometimes, without ensuring that homeowners are properly notified.
Homeowners are protected from these practices by federal and state law.
Because of the speed of foreclosure, usually within 60 days from Notice of Foreclosure, it is best for the homeowner who anticipates foreclosure problems to begin defending against foreclosure as soon as foreclosure becomes a worry.
Prompt legal action is required to defend against these practices and, perhaps, save their home.
There are state and federal programs to help homeowners avoid foreclosure. Call (888) 995-HOPE (4673). Also, help is available through legal aid and private attorneys.
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