Why Did My Mortgage Company Lie To Me About Postponing My Alabama Foreclosure?
Why Did My Mortgage Company Lie To Me About Postponing My Alabama Foreclosure?
Alabama consumers often wonder why mortgage companies will lie about postponing a foreclosure.
We sue mortgage companies for doing this, and we have filed dozens of lawsuits dealing with this exact subject right now.
The mortgage companies and their lawyers claim that there’s no reason for them to lie about postponing an Alabama foreclosure.
I was recently presenting to a group of several hundred foreclosure defense lawyers at a national seminar and I was discussing the reason why mortgage companies lie about the foreclosure sale date and several of the attorneys came up and said that they found the discussion to be useful.
So I wanted to share it with our readers here on our website.
One thing to keep in mind is that before a foreclosure a homeowner has more options than after the foreclosure in Alabama.
At least in Alabama, and generally in other states as well.
For example, before a foreclosure the homeowner can cure the default.
It may be difficult but it is doable.
Perhaps with family money or accessing retirement accounts or other assets a homeowner may be able to bring the account current and stop the foreclosure.
Certain loan modification or other loss mitigation programs are available.
A homeowner can file a bankruptcy petition and stop the foreclosure due to what is known as the “automatic stay.”
Generally we do NOT recommend bankruptcy to deal with wrongful foreclosures, however it certainly is a viable option and in some cases is the best option.
But after a foreclosure the homeowner can no longer file bankruptcy. At least not to stop the foreclosure as it has already happened.
They no longer qualify for a modification program, because there is nothing to modify anymore.
In addition, they can no longer cure the deficiency.
Instead, the homeowner has the choice of moving out within 10 days of the foreclosure.
Or, they could face forever losing their right of redemption.
The homeowner will also be sued for ejectment or eviction.
So, let’s go back to our original question.
“Why do these mortgage companies lie about postponing a foreclosure?”
The answer is that the mortgage company does not want you to have the option of filing bankruptcy or curing the default. Or doing loss mitigation.
The truth is that mortgage companies make a lot more money when you are in default or when you go into foreclosure.
However, they violently disagree with this. I would suggest to you that if their lips are moving, they are lying. 🙂
When you cure a default, the mortgage company loses a lot of fees and profits that it can make if it can keep you in default and even push you into a foreclosure.
When we sue for fraud, we often point out that the purpose of the fraud is to take away the options that the homeowner has before the foreclosure actually occurs.
The typical fraud involves telling the homeowner that the foreclosure will be postponed if the homeowner will pay a certain amount of money.
Or submit a loan modification package, or any number of things.
When the homeowner does this, it is quite natural to believe the mortgage company and to be confident that the foreclosure sale has been postponed.
However, the shock occurs several days later.
The homeowner is told that not only has the mortgage company lied, but foreclosure has occurred.
Unfortunately, all of the options which existed pre-foreclosure are now ripped away from the homeowner.
This includes some of the governmental loan modification programs.
It is not by accident or chance that this is happening.
You normally can sue the mortgage companies when they lie to you and foreclose.
We can sue under the FDCPA (Fair Debt Collection Protection Act) if the mortgage company is a debt collector.
We can also use RESPA (Real Estate Settlement Procedures Act).
This is a very powerful law to help us fight back against mortgage companies who break the law.
We also sue under Alabama state law.
Understand you do have options and we’ll be happy to help you understand those options.
When mortgage companies realize they will be sued, and have to pay money damages, they tend to get busy fixing their mess.
Feel free to contact us.
If you would like more information about wrongful foreclosures in Alabama give us a call at (205) 879‑2447.
You can also contact us through our website.
I look forward to chatting with you.
Have a great day!