Real Estate Law

ruce Richardson has also conducted numerous real estate transactions and is well versed in residential real estate closings. He has also counseled and represented individuals in mortgage foreclosure actions. He has sought remedies best suited for his client’s needs including loan modifications, short sales and mortgage foreclosure defense litigation. If your want to know how to avoid foreclosure, Bruce Richardson has the knowledge and experience to investigate your situation in depth and help you stop foreclosure on your property.

Mortgage lenders have contributed mightily to the housing crisis and are culpable in the foreclosure of millions of homes in America. Unfortunately, most home owners do not realize their own victimization and fail to respond to a foreclosure action and lose their home. However, most homeowners have viable legal issues that if raised, could: - prevent the foreclosure of their home, -be awarded monetary and/or punitive damages - have the contract rescinded - have their loan modified in accordance with state and federal guidelines. There are federal and state protections that may allow a client to successfully defend a foreclosure action and/or also assert his rights.

How to avoid foreclosure? What is the foreclosure process?

MORTGAGE FORECLOSURE DEFENSE

In asserting a defense to a mortgage foreclosure action, the entire real estate closing, and accompanying loan documents must be analyzed to determine whether a homeowner has any claims, counterclaims or defenses. The following is a list of some of the questions that must therefore be addressed in every foreclosure action:

Did the lender comply with contractual notice provisions?

Did the disclosures provided at closing comply with the federal truth in lending act?

Did the lender comply with the federal fair debt collection practices act?

Were the mortgage Banker and/or Mortgage Broker properly licensed?

Is the lender the owner and Holder of the Note and mortgage?

Have payments been made? Has the loan been properly accelerated?

Has the Lender complied with the requirements of the High-Cost Home loan statute? Has the Lender satisfied all procedural requirements?

PREDATORY LENDING

It is a fact that certain mortgage lenders have a demonstrated history of engaging in predatory loan practices throughout the United States. These mortgage lenders issued thousands of subprime loans, with multiple layers of risk, through mortgage brokers who regularly provided the mortgage lenders with false information that they, intentionally, recklessly or negligently failed to verify or audit. Lenders then paid and awarded mortgage brokers, originators and others in a manner that, predictably, induced brokers to steer borrowers into costly loan products.

Mortgage brokers typically used adjustable rate mortgages to steer borrowers into costly loan products.

Adjustable rate loan features (ARM) consisting of a lower fixed rate for a short term period, followed by an increase to a higher, adjustable rate (calculated by adding points to an interest rate index), which then could further increase every six months for the remaining years. Typically, ARM loans are three-year rate/twenty-seven year adjustable loans that are referred to as “3/27” loans. These ARM features would typically be combined with a “stated income,” ”low doc,” or “no doc” feature, where the borrower need only state his income, without providing any supporting documentation, to obtain a loan.

Thus, an already excessive rate would increase after three years. Typically upward to 1% (adding 7.5% to the LIBOR index), and then adjusted upward every six months by not more than 1.5%. The interest rate increase after three years caused a typical borrower’s monthly payment to increase significantly, referred to as the “payment shock” of an ARM loan adjustment. The rate increase would increase a borrower’s monthly mortgage payment by as much as 80% in some cases after only several years.

The lender and the mortgage brokers selling its products approved borrowers for these ARM loans based on the initial fixed “teaser” rate, without regard for a borrower’s ability to pay after the initial two/three year period.

These lenders knew or should have known substantial numbers of its subprime loans, especially absent prompt refinancing, would fail and result in foreclosure. Nonetheless lenders made the loans to promptly package and sell to the secondary market. Predictably, as a result of these predatory loans, scores of borrowers across America now face foreclosure, and many have already lost their home and savings. However, borrowers do have remedies to address their foreclosure related issues. The following is a list of some of the protections afforded homeowners under Federal and state law.

FEDERAL PROTECTIONS

- Truth in Lending Law
- The Home Ownership and Equity Protection Act of 1994
- The Real Estate Settlement Procedures Act - Federal Fair Housing Act
- Federal Equal Credit Opportunity Act - National Housing Act

STATE PROTECTIONS

- General Business Law (Deceptive Practices Act)
- Existing Anti-Predatory Lending Laws
- New Anti-Lending Laws enacted by State

NON LITIGATION OPTIONS

There are also options available other than other than litigating the foreclosure issues that can enable homeowners to keep their home. Such options are:

- Negotiate the loan repayment with the lender
- Short sale
- Refinance with a new Lender
- Seek reverse mortgage (if a client is a senior citizen
- Consider a Chapter 13 bankruptcy

Homeowners that act quickly have the best chance of being able to obtain remedies for their foreclosure related issue and ultimately save their home.

Bruce Richardson