Most mortgage lenders and servicing companies are taking advantage of the public’s sense of desperation and lack of information to strong-arm homeowners into signing one-sided loan modification agreements, or giving up valuable legal rights they may possess against their lender. Prior to signing any loan modification agreement or making any other significant decision affecting your home loan, it is critical that every homeowner be fully aware of the following “myths” that most mortgage lenders want you to believe.
Myth No. 1: If I signed for a bad loan, I have to suffer the consequences of that decision.
In reality, federal and state laws impose severe penalties on lenders that engaged in predatory lending practices. These penalties include cancellation of the entire loan and/or a refund of all payments made by the borrower, including any down payment. More importantly, these penalties and remedies related to the original loan transaction may even be available against the current mortgage company.
Myth No. 2: Once a foreclosure is filed, the bank can immediately seize your bank accounts, garnish your wages and repossess any vehicles you own to satisfy your mortgage debt.
Florida law prevents any lender from seizing any of your assets until after a final judgment of foreclosure, and only after authorization from the Court is obtained to satisfy a “deficiency judgment” (i.e., the difference between the amount owed to the bank and the amount for which the property sold at the foreclosure sale).
Myth No. 3: If you are negotiating a loan modification with your lender, they cannot proceed with a foreclosure of your home.
Actually, lenders can and will use the foreclosure process, especially during a loan modification application, as a means of coercing the homeowner to accept a one-sided loan modification agreement that may even contain a provision where the homeowner gives up all defenses, claims or counter claims he/she may possess against the lender.
Myth No. 4: Your lender is entitled to review all your financial information (assets, tax filings, pay stubs, etc.), even during a foreclosure.
The law in Florida is crystal clear and it states that a party to a lawsuit may not obtain financial information from its opponent at any time prior to a final judgment. Despite this clear principle, most homeowners who are already in foreclosure willingly provide their financial information to their lender under the guise that this information will be considered by the lender as part of a loan modification application. By doing so, the homeowner provides its adversary (the bank) with all the information needed to identify and seize any of the homeowner’s assets if a foreclosure final judgment is obtained.
Myth No. 5: The lender will take into account your best interests and act in good faith to offer you the best terms possible during a loan modification.
In actuality, the lender’s only concern is their “bottom line.” If the deal does not make sense financially to them, they will force you to accept a one-sided loan modification agreement, or attempt to force you out of your home through a foreclosure process.
We hope you are able to use the information in this article as a tool to assist you in any preliminary discussions with your mortgage lender or servicing company about your home loan. However, each case is different, and some of the information may not apply in your case. Nor is this information meant to substitute proper legal advice from an experienced foreclosure defense attorney.
The Arcia Law Firm is privileged to successfully represent dozens of homeowners in our community with mortgage fraud and foreclosure defense cases. If you are struggling to make your monthly mortgage payments, or if you just received a foreclosure summons, contact the Arcia Law Firm today at 1-800-770-7102, or visit www.arcialawfirm.com. We may be able to help you achieve a long term solution to your personal mortgage crisis.
Our Firm accepts and handles consumer fraud, foreclosure defense and other legal matters in Pembroke Pines, Miramar, Davie, Cooper City , Ft. Lauderdale, Plantation, Sunrise, Coral Springs, Lauderhill, Weston, Southwest Ranches, Sunrise, Margate, Oakland Park, Hollywood, Lauderdale Lakes, Hallandale, Dania, Pembroke Park, Wilton Manors, West Palm Beach, Pompano Beach, Miami, Coral Gables, North Miami, Aventura, Sunny Isles, Bal Harbour, Hialeah, Miami Lakes.