Money Minute: Foreclosures Flatten Out
The following are legal defenses to foreclosure to beat the bank:
 1.      Truth in Lending Act (TILA) violations enabling rescission. If your loan is a refinance, the bank must have provided you a set of disclosures at the time of closing. If these disclosures are inaccurate, the loan is statutorily rescindable under TILA. For example, in a foreclosure action, the finance charge must have been accurate within $35 or the loan may be rescindable. This means the loan is cancelled and all money paid to the lender is refunded.  Â
2.      Truth in Lending Act (TILA) violations enabling damages. If you purchased the property with the loan or used the proceeds to refinance and proper disclosures were not given, then you may be entitled to money damages to offset the foreclosure.
3.      Home Ownership and Equity Protection Act (HOEPA). This is a very powerful federal law governing high cost refinance loans. If your loan is under $150,000 or the initial rate was above 8%, you should evaluate your loan for violations of this act. Violations here enable rescission and substantial money damages that can be in excess of the loan’s dollar amount.
4.      Failure to Provide a Correct Notice of the Right to Rescind. There is a specific notice that must be provided to refinance customers at closing. If this form is inaccurate or incorrect, the loan is rescindable up to three years after the closing date.Â
5.      Breach of Contract. Many times the lender will do things that are unfair or unjustified before starting the foreclosure process. Just as you have an obligation to pay the mortgage, the lender has a responsibility not to interfere with your ability to do so – like force placing insurance making the payments substantially more expensive than they should have been.
6.      Real Estate Settlement Procedures Act. This federal law governs many types of disclosures that lenders must provide at the time of closing, in addition to prohibiting things like kickbacks and unearned fees. It enables damages, and sometimes rescission if the error triggers TILA.
7.      Fair Debt Collection Practices Act. This federal law requires servicers or lenders who obtain the mortgage after default follow specific protocol in attempting to collect on the debt. A failure to follow this law enables statutory damages and attorney’s fees.
8.      Fair Credit Reporting Act. This federal law governs lenders ability to report information about the mortgage and requires the accurate reporting of negative information. Violations of this act also enables damages and attorney’s fees. Punitive damages might be available under this act.
9.      Real party in interest. This is a procedural defense to foreclosure that can be extremely effective at stopping the lender’s ability to foreclose. It essentially questions the ownership of the mortgage and questions whether the foreclosing party is, in fact, the holder of the mortgage and note.
10.  Unconscionability. This defense is focused on the events surrounding the creation and closing of the mortgage loan. A violation here gives the court great leeway in deciding whether the mortgage should be voided or changed.
11.  Failure to state a claim upon which relief can be granted. This general defense attacks the lender’s ability to foreclose and is can be used in conjunction with one of the other foreclosure defenses.
12.  Failure to establish conditions precedent. Want to get a foreclosure action thrown out of court right away? Use this defense that attacks the lender’s pre-foreclosure processes.
13.  Failure to comply with FHA pre-foreclosure requirements. FHA requires every lender to mail a booklet called “How to Avoid Foreclosure†and set up a face-to-face meeting with the borrower before foreclosing (in most cases). If the lender does not take these steps, then it cannot foreclose.
Watch the video related to Foreclosures
A new report finds foreclosure filings held steady in August, jobless claims drop and a New York City landmark files for bankruptcy protection. The AP's Mark Hamrick reports. (Sept. 10)
Help answer the question about Foreclosures
Where do I start checking for foreclosures in Illinois?How do I get the list from banks of their foreclosures?I live in Downers Grove, however I know there is a building in Chicago that I can go to check for foreclosures and to see if there are any liens and etc on them. Also, I'm interested in the lists that banks have of foreclosures. Can someone who has experience in buying foreclosures through their state and through their bank advise me on this. I thank you in advance for your kindness.
About Author
The author of 23 Legal Defenses to Foreclosure has identified over 50 legal defenses to foreclosure (23 with detailed explanations), which are listed in his book. For more information about each of the defenses above, consider the book, 23 Legal Defenses to Foreclosure, by
clicking here. The book includes checklists and easy-to-read chapters that show you how to identify these errors in your own loan.
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November 26th, 2006 - 16:10
Thank you forbesdotcom for this information.
November 26th, 2006 - 17:43
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November 26th, 2006 - 17:14
The process of buying and selling real estate is always a matter of negotiation. Offers and counter offers are the norm. Do not be afraid to offer less than the asking price. The goal of the bank is to realize enough cash through the sale to satisfy the unpaid balance of the mortgage principal. In a slow market, they may even be willing to take a small loss in order to turn the property to cash.
Good luck with your offer.
November 26th, 2006 - 17:41
There are a couple of places where you can look for foreclosures. Keep in mind that it's not always as easy as buying a house the normal way.
Here is a list of places you could look:
- real estate agents
- driving through neighborhoods where you would like to buy. The riders on the sign post might say: foreclosure; bank-owned or bank repo
- websites of major banks
- Asset Management Companies (ex. HomeEq Servicing, Premiere Asset Services and Keystone Asset Management)
- government agencies: HUD (Housing Urban Development foreclosure homes), Fannie Mae (foreclosure homes), Department of the Treasury (homes seized by the International Revenue Service) and SBA (Small Business Association).
- web-based foreclosure companies
I hope this helps
November 26th, 2006 - 20:40
Check with the County Treasurer. The website may list properties in default for taxes.
November 26th, 2006 - 22:54
What people do not understand is that if/when a property is foreclosed on the borrower does not simply walk away with a FC on their credit. At the beginning of the following year they get a 1099 and have to claim the banks loss as an income and then pay taxes on it. The IRS billing them is understandable, especially if they had unpaid taxes and the IRS placed a 2nd lien against the property.
The other thing that people forget is that the borrower may ask banks for help, but they have to qualify for it. Investors are not 'handing' the bank to people because they need help – they have to qualify by showing they can afford a lower payment/interest rate. If they do not qualify this way, or if there are 2nd liens on the property – often the banks hands are tied because the collateral can be FC on by the other lien holder(s) and the risk of loss all the way around is to great.
You have a couple of choices here;
1) If your parents haven't been evicted yet and if you're in a "Redemption State" you might be able to redeem the property by making a years worth of interest payments. You'll want to contact the FC attorney assigned by the investor to get answers to those questions – or look it up on the internet.
2) Again, if your parents are still on the property they still might be able to sell it, possibly even a Short Sale which would mean getting an offer for close to Fair Market Value. You can contact the REO of your parents loan servicer to inquire about this possible option.
3) Move forward. The FC is done. I would inquire (if you haven't already) with that BK attorney to see if they do anything to reduce the debt owed to the IRS.
Good Luck.
November 27th, 2006 - 04:17
You have to have a Realtor. Prices are based on current market value, usually based on taxes or a Current Market Analysis. Be careful of your web searches, get a reference from someone you trust. A lot of vultures out there right now, even at good prices today, you could still get stiffed.
November 27th, 2006 - 08:04
Good question, I like to know the answer as well. I am fighting foreclosure myself. Getting tossed into a mess I didn't ask for.
We should be 1st in line for the next bail out. All I ask for is time to get back on my feet from this mess someone else put us in. Loose my home and put my children on the street is not an American Dream, but now the American Shame of big wigs with fat pockets.
November 28th, 2006 - 02:44
There were 47,171 foreclosures on California properties in the first quarter of 2008. The figure for the same period last year was just over 10,000.
An increase was also reported in the state of Arizona. The Attorney general there released a report on this issue. It said that "the collective efforts of servicers and government officials to date have not translated into meaningful improvement in foreclosure prevention outcomes." The Attorney General also commented on the report:
"We continue to see a rising number of foreclosures in Arizona, which is a significant drag on Arizona's economy. This report confirms that efforts made by servicers to prevent unnecessary foreclosures are not enough. We need to explore additional approaches to prevent tens of thousands of unnecessary foreclosures in Arizona."
November 28th, 2006 - 07:30
The companies are of SOME help, but only if you do not feel to qualified to speak with your lender on your own. These companies cannot STOP a home foreclosure, but they can assist in negotiating with your lender for more favorable terms, loan extensions, etc. You can do the same by yourself for free.
The decision whether or not to foreclose always remains with the lender (unless some law is enacted which might put a temporary moratorium on foreclosures)
November 29th, 2006 - 17:53
Call a title company in your area that does foreclosures or HUD deals they can get information before the houses go into foreclosure most of the time on the house that are going up for bid first. Here is a site that you can look at also
http://www.foreclosure.com/state/ca.html Find the property that you want and then you can find the rest of the information on tax site for that county, go to google and type the county name then CAD this will give a wealth of information on the property.
November 29th, 2006 - 20:23
people buying things that they can ill afford. tb