Florida readers know how hard it can be to manage an unexpected financial burden. Even those who save and plan carefully for their futures can at some point face bad luck and a confluence of circumstances that leads to a foreclosure. Borrowers often seek loan modifications when hard times hit, to try to stay on top of debt and avoid a greater calamity. Unfortunately, loan modifications can be difficult to come by and banks may make it difficult to secure a modification and ultimately pursue a foreclosure instead.

One couple who immigrated to the United States after escaping oppression in North Korea is suing their lender in federal court, after the bank pursued a foreclosure at the same time that they were trying to secure a loan modification. That practice, known as dual-track foreclosure, is now prohibited under a settlement between the attorney general and the nation’s five largest mortgage companies. The Consumer Financial Protection Bureau is also seeking to curb deceptive and aggressive tactics like this, but unfortunately this couple is still fighting to have their foreclosure stopped.

According to court filings, bank representatives misrepresented the terms of their adjustable rate mortgage and later told them they would be approved for a loan modification. While the couple was still in the process of obtaining that medication, the bank moved to foreclose and bought the home back in an auction.

This is a difficult situation for borrowers, who often rely on verbal statements by bank employees rather than the written contracts that they sign, and the two can be in conflict. Courts typically side with whatever the terms on the written contract are, since borrowers are expected to read it carefully before making an agreement. However, that ignores the fact that most people taking out a mortgage on their home are not attorneys and don’t have advanced knowledge of contracts, which makes many of the terms within the length document difficult to understand. As a result, they rely on bank employees to explain the terms, which is where some borrowers can get into trouble.

These cases serve as an important reminder that even though banks and their employees may act like they’re trying to help you and want to work together, they are still for-profit companies and will go to great lengths to recoup on an investment. This is just one reason why it is so important to work with an experienced attorney dedicated to advocating for your interests when dealing with the bank.

Source: MPR, “Foreclosures down, yet struggles for loan modifications continue,” Jessica Mador, Nov. 28, 2012.