Knowledgeable Attorneys Help Homeowners Protect Their Rights Against Lenders
The current crisis in home loans was caused by lenders who gave bad loans to homeowners based on inflated property appraisals and inflated income assessments. The lenders didn’t care whether borrowers could pay back their loan since the lenders’ profit was made instantaneously by “flipping” the loan to a real estate investment trust to be sold on Wall Street as a stock. The lenders continued to make a profit from these bad loans by retaining the servicing rights on behalf of these trusts and then retaining a third income stream if the borrower defaulted and the servicer was able to foreclose. This was a win-win-win for the lenders, but not so great for those borrowers caught in the scheme. Foreclosure statutes have been enacted in California to rectify this situation and provide protection for homeowners.
At Advocate Legal, we use these new foreclosure statutes in court to battle the lenders whose negligence, fraud and other unlawful actions are costing homeowners the homes they worked so hard to afford. Using these new expanded California statutes, we help our clients force lenders to modify loans when possible, dispute inaccuracies in credit and fight wrongful foreclosures.
Reinstatement or Repayment
Pursuant to California Civil Code §2924c(e), a borrower has a right to reinstate a mortgage until five business days prior to a scheduled foreclosure sale and your right to repayment exists up until the time of sale. This requires you to send a certified letter to your trustee demanding your reinstatement amount and a window of time when that amount will be correct. The trustee must respond with this information as well as payment information on where and how you can pay this amount.
Reinstatement is different than Repayment which is the full amount of the loan. This amount can be paid at any time up until the foreclosure sale as long as you complete the transfer of funds before the sale.
Recent Foreclosure Law and the Effect on Homeowners
A wrongful foreclosure lawyer can assist borrowers by defending their rights under a broad range of new foreclosure statutes. We know how these statutes affect homeowners’ rights and use them for additional protection against predatory lenders and unscrupulous actions:
- California Foreclosure Prevention Act was signed into law on Feb. 20, 2009. It gives qualifying borrowers an additional 90 days from the date the lender filed the notice of default before the trustee can give notice of sale in a non-judicial foreclosure, essentially giving homeowners six months to work out a more affordable loan modification. A lender or mortgage loan servicer may obtain an exemption when it can prove it provides a comprehensive loan modification program offered to borrowers with the purpose of helping them keep their homes.
- California Homeowner Bill of Rights (HBOR) was signed into law on July 11, 2012, and became effective Jan. 1, 2013. This landmark legislation was created to combat the foreclosure crisis and hold lenders accountable for creating it. The HBOR allows a private right of action for borrowers against the country’s five largest servicers (GMAC, Citi, Bank of America, Chase and Wells Fargo) despite their participation in the National Mortgage Settlement (NMS).
Some of the key provisions of the HBOR include:
- A servicer may not record a notice of default until 30 days after contacting a borrower to discuss alternatives to foreclosure.
- Borrowers who successfully bring claims under HBOR may enjoin the sale of their property, or, if a sale has already occurred, they may receive statutory damages.
- The HBOR prohibits “dual tracking,” meaning that a servicer may not proceed with the foreclosure process if a borrower has submitted a completed loan modification application.
- The HBOR also forbids a servicer from proceeding with a foreclosure against borrowers in trial payment plans or other “approved foreclosure prevention alternatives” if the borrower is in compliance with the plan.
- The HBOR provides additional challenges in unlawful detainer cases if the borrower can prove that the foreclosure was wrongful.
- The HBOR allows borrowers to demand a single point of contact who will be able to make a decision on their loan modification application.
- Robo-signing is forbidden, and lenders that record and file unverified documents may be subject to penalties.
- Loan servicers must provide a denial in writing that includes the reasons for denial and information about the appeal.
- Borrowers have the right to appeal a denial of their loan modification application within 30 days of a denial.
- Tenant rights include a 90-day notice prior to eviction proceedings and the honoring of fixed-term leases.
Seek Assistance from Seasoned Lawyers to Learn About Your Rights
At Advocate Legal, our decisive lawyers provide straightforward representation to help homeowners understand and protect their rights before, during and after foreclosure.