During the 2000s, many lenders engaged in shoddy underwriting and used legal shortcuts to get homeowners out of their homes. The “big guys” like Wells Fargo, J.P. Morgan Chase and Bank of America have all been accused of submitting court documents that made it look like the bank that was foreclosing had a right to do so, when it did not.

The unethical foreclosure practices have continued. The National Consumer Law Center took a survey of 260 consumer attorneys in 45 states. It found that “thousands of homeowners were improperly foreclosed on” during 2011 alone. Attorneys reported that four out of five times, a lender failed to credit payments in the proper manner or claimed that the homeowner owed bogus fees.

Now, foreclosure attorneys are using the paper trail of those practices against the lenders in foreclosure proceedings and when lenders refuse to follow the rules for loan modifications, which give homeowners a chance to stay in their homes.

At least one couple from Tennessee succeeded in their quest to prevent the loss of their home by relying on an aggressive lawyer who used the shady paper trail (or lack of a paper trail at all) to challenge the lender’s attempt to take the house. The fight was successful, leading to a loan modification that gave the couple smaller monthly payments that they could afford.

For those who are facing the threat of foreclosure consider whether you believe that paperwork related to your mortgage was signed by “robo-signers.” Were the files properly reviewed? Have you been given a fair chance to secure a loan modification with the lender? If you have any concerns like these or more, reach out to a foreclosure attorney in your area who can help find answers and try to seek relief for you.

Source

msnbc, Economy Watch: “Homeowners battle banks to stop foreclosures … and win,” John W. Schoen, Mar. 12, 2012