Mortgage Resolution (Litigation)

Definition: Mortgage Resolution, also commonly referred to as Mortgage Litigation is the examination of loan documents for the prevalence of fraud in the origination or implementation of the loan. Legal recourse is then sought against the lender based on the findings. It is not a loan modification and the results are typically a lot more impressive. The legal recourse that can be sought is a substantially lower mortgage payment, principal reductions, cash settlements or rescission of the original loan.

Between 1999 and 2008 over 80% of all loans were found to have violations. The loan resolution process will find the violations in a loan and provide clients with experienced attorneys for representation against lenders. When loan violations are discovered, the lender will possibly receive penalties and fines. Facing possible penalties lenders will come to the bargaining table.

Mortgage Resolution is both the process of pre-litigation and litigation by licensed attorneys against mortgage lenders. The pre-litigation process starts by identifying violations that may have occurred in the origination, implementation, execution or recording of the loan. Over the course of the last 10 years nearly 80% of all mortgage loans have substantial violations. Some of these violations are found in Real Estate Settlement Procedures Act, Truth in lending, appraisal fraud, HUD-1 disclosures, The Home Owners and Equity Protection Act, Mortgage Electronic Registration System improperly foreclosing on properties, failure to record with the SEC or the local county recorder’s office, claiming insurance on your loan and still attempting to collect on the loan. These are just a few of the violations that may exist in your loan. Some of these violations are felonies.

Once violations are discovered and a resolution strategy is determined, attorneys then draft a demand letter seeking specific legal recourse. The demand letter will summarize to the lender violations found related to the loan and will include, when applicable, an econometrics damages estimate and a determination of what type of reformation or rescission action sought.

You might ask why this is important to you. In the event you have you have violations, which 4 out of 5 loans that are reviewed do, then you now have leverage against you lender to settle the law firm’s demands. You may have fraud (civil and/or criminal) perpetrated against you and the law firm will use this as leverage to settle with your mortgage company. As stated before the results could include a substantially lower mortgage payment, principal reductions, cash settlements or rescission of the original loan. The intent is to ensure that the client is made whole.

Individuals cannot rely on their lender to cooperate without proper legal counsel. Experienced mortgage resolution attorneys do not play the games your lender is offering. They go straight to the legal departments and if necessary the US Court System.

Mortgage Resolution is a commonly used term but does not always translate to the litigation concept discussed here. Mortgage Resolution is very different from loan modification although the outcomes can be very similar if successful. Mortgage Resolutions is for the consumer who feels they have been a victim of predatory lending practices or was misguided during the loan origination process. If facts were misrepresented during your loan origination or you feel you may be a victim of fraudulent lending practices Mortgage Resolution is for you.

One comment

  1. Chris McCain

    I purchased a land lot with mobile home from a FSBO, only personal contract no escrow or title company. The contract stated that three consecutive missed mortgage payments would begin foreclosure. At the time this agreement was made I was unemployed and have been for quite some time. The first year and a half there were many issues with tenants in and out. There was at least one occasion that needed eviction process. When motioning the court the court advised me that mine and the people that I was purchasing from signatures were necessary as well as mine.
    During this time the interest was doubled monthly on every month and the principal had grown rather than decrease. In April of this year we restructured our agreement after a large sum of money was paid from me to them as another down payment or a balloon payment. The renters I had at the time had fallen behind and I had served a 5 day pay or quit notice and notified the people I was buying from that their signature was required again. She was out of town and said she would contact me upon getting back. Another month went by after many missed calls and sent emails that received no response I issued another five day notice to tenants. With 2 days left until the eviction process would have taken the trip to court the people I am buying from go behind my back and make arrangements with the tenants that owe me 2100 dollars to continue renting from them?
    What are my legal options? I have already drafted a Les Penance and am ready to file. Not sure what I can do with the people that I was buying place from? I have close to 20000 dollars in that place and am not about to lose it to some shady predatory lending or mortgage fraud. Please assist me?

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