What Can I Do About A Mortgage Company That Lied To Me So They Could Steal My Home In Foreclosure?


If the mortgage company did this within the last two years, consider suing them for fraud. These mortgage companies think they can defraud us and get away with it because they are big banks or because they have done this thousands of times to other consumers and have gotten away with it.

But you don’t have to take it. You don’t have to let them get away with it. You can fight back.

Fraud is a horrible problem in Alabama by mortgage companies that are threatening and actually doing foreclosures. This is because the servicers have an incentive to take your home (they make much more money than you paying) but they must pretend to the public and to the government that they are trying to help homeowners stay in their homes. They do this by claiming to do modifications. But at the same time that they tell you that “there will be no foreclosure until your modification is decided” they are foreclosing and will complete the non judicial foreclosure in Alabama.

Fraud in Alabama requires four things:

  • Misrepresentation – this is a fancy way of saying “a lie.”
  • Material Fact – what the lie was about must be important, not something trivial.
  • Reasonable reliance – you must act in a reasonable way in relying upon the lie. In other words, you can’t “close your eyes to the truth” and then claim you were deceived. Fraud is to protect people from lies that will trick a reasonably prudent person, not an extra-ordinarily gullible person.
  • Damages – the lie must have harmed you in that you took action you would not have otherwise taken or you failed to take action that you would have taken had you known the truth.

Let’s look at an example to put some “flesh on the bones” of the skeleton outline of fraud above.

This is the most widespread example of fraud in the context of a mortgage and foreclosure – not only in Alabama but all over the country. It is as if these mortgage companies and servicers went to seminars because they make the exact same lie almost word for word all over the country. As Stan Herring says “McDonald’s doesn’t just flip one hamburger – they flip them all the same way.” The servicers and mortgage companies are at least efficient in their lying in that they tell the same lie over and over.

Here it is. You are facing foreclosure and the mortgage company or mortgage servicer tells you that you should apply for a loan modification. You agree.

The company finally says it received it (even though you have the certified mail receipt proving they received it a week earlier) and then it tells you that the planned foreclosure will “not happen until after we make a decision on your loan modification application.”

You breathe a sigh of relief. You cancel the appointment with a bankruptcy lawyer or a foreclosure defense lawyer. You stop applying for loans and stop begging your rich friends or family members to buy the house at the foreclosure sale because everything is ok.

Little do you know that before your loan modification package is even considered, your house is sold at a foreclosure sale.

The next day you receive a letter from the law firm of Sirote & Permutt (or some similar foreclosure firm) telling you that your house was sold and you have ten days. Ten days to get out of your home. Ten days to move all of your belongings out of the house. Ten days to figure out what to do with your kids and school.

Oddly, the next day you get a letter saying the company needs more information for your loan modification as it is still being considered. When you call you are told “Its too late – your house has been sold. You have no choice but to move out.”

OK – let’s examine this.

Do we have a misrepresentation – a lie? Yes. You were told there would be no foreclosure until the mofidication was considered but that did not occur.

Was it a material fact? Absolutely. What could be more important than your home being stolen at a foreclosure sale?

Did you act reasonably in relying upon the mortgage company? Yes. Who could possibly know better than the mortgage company or servicer if they were going to foreclose on you? No one! No person in the world knows their intentions better than the company itself! Unless we are not to believe mortgage companies (love to see a mortgage company lawyer make that argument to a jury – “Don’t believe us – we lie all the time!”) then your reliance sure seems reasonable to us.

Were you damaged? Of course you were. You lost your home. You could have filed for bankruptcy, or come to see a wrongful foreclosure defense lawyer like us, or found someone to buy the house for you, etc. but you stopped all of those efforts because you believed the mortgage company.

This also means the foreclosure is wrongful and any ejectment lawsuit against you is improper.

This takes us back to the opening sentence – consider suing the responsible (actually irresponsible) parties to stop further harm from occurring to you and to others in our community and to recover damages if you are successful.

We will be glad to meet with you (if you live in Alabama) to help you evaluate your options so that you can receive justice as you confront the ultimate corporate thief – a mortgage company trying to steal your very home. Call us at 205-879-2447 or contact us through our online form.


8 Comments

  1. mary says:

    We were told eligible for modification sold house

    • JohnGWatts says:

      Mary,

      Unfortunately this is a very common occurrence. Did they tell you in writing? Over the phone?

      Document what happened and then get with a lawyer who can advise you on your rights. If you live in Alabama, feel free to contact us.

      Thanks and I’m sorry this happened to you.

      John Watts
      Birmingham, Alabama

  2. mary says:

    We also gave crooks Six hundred dollars a month to help us

  3. Chris Doss says:

    I was told by green tree that they were holding off on the esteste of my mother as Fanny mae was working on a remod. So today I was today in the AM not to worry and then this afternoon that it sold. Can any one help me.

    • John Watts says:

      Chris,

      The short answer is “it depends” so let me explain this as it can be a frustrating answer.

      It depends on whether GreenTree is considered a debt collector under the Fair Debt Collection Practices Act (FDCPA). Normally Green Tree is a debt collector as they normally get the loan after it is in default which is as simple as the payment was not made on time. Here is an article on how the FDCPA applies to mortgage companies.

      It also depends on what was said. Did Green Tree say “we may be able to stop the foreclosure” or did it say “The foreclosure is stopped” — those can lead to different results.

      It depends on who you are as you were the one who GreenTree spoke with. Are you on the loan? Are you the executor of your mother’s estate? Do you live in the home?

      These are some of the factors that can make a difference in whether you can sue Green Tree to get it to do the right thing and get rid of the foreclosure and do what it promised you it would do.

      If you want to chat with us give my firm a call at 205-879-2447. We represent Alabama consumers all over the state and we can set up a call or in person meeting with you to go over your options.

      Best wishes.

      John Watts

  4. Larry Mofield says:

    Do you know an attorney that can help me in Kentucky. The bank lied so many times to long to list it all here.I had to hire an attorney (ky. Legal Aid) to stop foreclosure.The whole time we were working on a modification she had to keep going to court and forcing postponement(not stopping)during this time they kept asking for more paperwork , even going as far as requesting our ebt grocery records not only the amount we received but where and when and how much we spent.
    The more paperwork we faxed and mailed they said they didn’t get it.This went on for almost 3 years,then in 2012 they assigned a personal loan modification person who said we needed to reapply due to new rules and boom we got paperwork with a modification $30.00 less than original loan on 2/3 less income.My attorney said we couldn’t do that and little over a year after picking up a small extra income we got another offer. Almost a $100.00 more than my original loan.The income was about 60% of gross when first purchased the home.In the end we gave in and have just finished the three trial modification payments and are scheduled to sign paperwork and mail it in.Have in black and white where they said I called in 2010 and canceled and then called back in 2012.Then got paperwork stating that it was reported wrong that I didn’t call in but was dropped for failure to send paperwork in. My attorney had been working with them and we replied to their every request. What do you think, can I sue for fraud,stress ,being lied to?

    • John Watts says:

      Larry,

      Sorry you have gone through this.

      My advice is stick with your attorney and see what he can do to help you. Kentucky law is different than Alabama law so I don’t know your options but your attorney should.

      Best wishes and I hope you get this worked out ASAP!

      John Watts

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