When you are struggling to make mortgage payments, the prospect of losing your home can be devastating. For far too many Americans, the COVID-19 pandemic has resulted in immense job losses and the inability to make payments on loans and other lines of credit, including mortgages. Since there is so much information about foreclosure on the internet, it can be difficult to obtain factual information that can actually help you to understand your options. Even if you have not conducted internet searches for options to avoid foreclosure, you might not be getting the whole picture from a friend or family member who relied on a mortgage modification to avoid losing their home.
In short, misconceptions about foreclosure prevention abound, and it is critical to speak with an experienced Oak Park foreclosure defense attorney who can provide you with accurate and detailed information about the full range of options that may be available to you. Mortgage modification may be one option for avoiding foreclosure, but it is not the only option.
Seek a Mortgage Modification
A mortgage modification can be one path to avoiding foreclosure. With a mortgage or loan modification, the homeowner asks the lender to change the terms of the loan in order to make the monthly mortgage payment lower. A modification can involve adding additional payments to the loan, extending the length of the loan, or reducing the interest rate, for example.
Obtain a Forbearance
If you are struggling in the short term but you expect to be able to resume making regular mortgage payments in the near future, your lender may be willing to agree to a forbearance. With a forbearance agreement, you may be able to make reduced mortgage payments, or no mortgage payments at all, for a particular period of time.
File for Chapter 13 Bankruptcy
Chapter 13 bankruptcy is an extremely helpful tool for homeowners who want to avoid foreclosure and get back on track with their loan. In a Chapter 13 bankruptcy, the automatic stay will prevent the lender from moving forward with any foreclosure actions, and you will be able to include your mortgage in your bankruptcy repayment plan. However, to qualify for Chapter 13 bankruptcy, you will need to be able to show the court that you can make payments on your bankruptcy plan over a period of three to five years.
Refinance Your Loan
Sometimes homeowners who are struggling to make payments have loans with unfavorable terms. It may be possible to refinance your loan for a better rate, thereby resulting in significantly lower monthly mortgage payments. However, refinancing may not be an option if your credit has already taken a hit due to missed mortgage payments.
Consider a Short Sale
The above options are all ways that you may be able to prevent foreclosure and remain in your home, which is what most homeowners are hoping for when they begin looking for information about foreclosure avoidance. Yet in some cases, it is not possible to remain in the home. With a short sale, you will not be able to keep your house, but you will be able to avoid having a foreclosure on your credit.
Contact Our Oak Park Foreclosure Defense Lawyers
If you have questions about foreclosure avoidance options, one of our experienced Oak Park foreclosure defense attorneys can help you. Contact the Emerson Law Firm to learn about your options.
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Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts
Friday, April 30, 2021
Thursday, November 8, 2018
Wells Fargo Admits to Hundreds of Wrongful Foreclosures
A number of erroneous foreclosures have been linked to Wells Fargo bank. Back in August 2018, Wells Fargo admitted that it had “accidentally foreclosed on” almost 400 homes due to a software glitch that denied homeowners the ability to seek mortgage modifications, according to a report from CBNC. This week, Wells Fargo announced again that it had “improperly foreclosed on 545 customers after wrongly denying them mortgage loan modifications, up from the 400 borrowers the company disclosed in August,” according to a recent article in Bloomberg.
While Wells Fargo is based in California, it provides mortgages to homeowners across the country, including in the Chicago area. What should Oak Park residents know about these “accidental foreclosures” and the harm caused by Wells Fargo’s actions? First, we want to provide some background information about the wrongful foreclosures that were reported in August, and then to speak to the new information this November about additional “accidental” foreclosures that have affected consumers and homeowners.
Alleged “Glitch” Results in Hundreds of Foreclosures That Should Not Have Happened
As the CNBC report explains, between 2010 and 2015, almost 400 Wells Fargo mortgage customers “lost their homes when they were accidentally foreclosed on after a software glitch denied them the ability to modify their mortgages as they sought federal aid,” In August, Wells Fargo “apologized” to those homeowners who were affected, and planned to remedy the serious errors by providing $8 million to customers who were impacted. According to Tom Goyda, the senior vice president of Wells Fargo, “during the course of an internal review, we determined that an automated calculation of error may have affected the decision on whether or not to offer or approve some mortgage modifications between April 13, 2010 and October 20, 2015, when the error was corrected.”
Goyda apologized for the “error” and said that Wells Fargo had plans to provide “remediation to the approximately 625 customers who may have been impacted.” While 400 homeowners actually lost their homes due to Wells Fargo’s mistake, as the report underscores, hundreds more were affected.
New Errors Revealed Regarding Wells Fargo Mortgage Accounts and Foreclosure
In August, Wells Fargo issued an apology to homeowners affected by its so-called “accidental” foreclosures and provided a remedy of $8 million, yet just this month, the bank again reported that nearly 150 additional homeowners were foreclosed on “accidentally” due to Wells Fargo errors. While the bank indicated that 625 customers in total had been affected when it made its announcement back in August, now it says that 870 customers in total actually were affected.
It is important to also underscore that these “accidental” foreclosures are not the only problem currently linked to Wells Fargo. The bank has been cited for improperly assessing fees on certain accounts, and fraudulently openning accounts for up to 3.5 million Wells Fargo customers who never wanted an account opened.
Learn More from an Oak Park Foreclosure Defense Lawyer
If you were one of the hundreds of homeowners with a Wells Fargo mortgage who faced foreclosure as a result of the bank’s error, you may be eligible for compensation. If you need assistance with foreclosure defense and keeping your home, you should speak with an advocate about getting started on your case. An experienced Oak Park foreclosure defense attorney can assist you. Contact the Emerson Law Firm for more information.
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Thursday, April 20, 2017
Mortgage Defaults Reach Recent High in Chicago
Is foreclosure activity in Chicago on the rise again? According to a recent article in ChicagoNow, mortgage defaults in the Chicago area have now hit a two-year high. What does this mean for the real estate market? Do these numbers signal a renewed issue with foreclosures in Illinois? Sometimes it can be difficult to identify a single factor that is contributing most significantly to foreclosure rates in different parts of the country. While we may not be able to say with certainty what is causing new foreclosure activity in the Chicago area, the recent trend appears to be problematic. What else should you know about Illinois foreclosures?
Remaining Foreclosures in Chicago
As the article points out, we have known for quite some time that there are remaining foreclosed homes around Chicago and its suburbs. As such, when we see continued high rates of foreclosure auctions and bank repossessions, this does not necessarily point to new foreclosures. Rather, these numbers frequently signal that homes that were previously abandoned, or with untenable underwater mortgages, simply are in the process of being resolved. When foreclosures are being resolved—for instance, are being auctioned and sold—that is generally a good thing for the region.
What is the problem? New foreclosures going into the “foreclosure pipeline,” as the article describes it. In other words, there are mortgages out there for which homeowners are having difficulty making payments, and those homes are just now entering the foreclosure process. While the total of all homes in Chicago that are at various stages of the “foreclosure pipeline” actually reached a new low recently, the article intimates that we need to be concerned and vigilant about new foreclosures in the area. While even the rate of new foreclosures had been on the decline, it recently “regained momentum.”
Urban Areas Having More Difficult Bouncing Back from Recessions
As a report in The Global Dispatch explains, it may not be all that surprising that foreclosed properties remain in the Chicago market, and that new foreclosures are not at record lows. In total, as of February 2017, the number of single-family homes at any stage of foreclosure in the Chicago area reached an 11-year low.
However, as that report notes, there are still millions of homeowners in Chicago who are dealing with “pre-crisis subprime mortgages.” In other words, many homeowners in Chicago were able to buy homes prior to the foreclosure crisis through subprime mortgages. Millions of those homeowners’ properties did not go into foreclosure during the peak of the crisis or immediately afterward. Now, around three million homeowners in Chicago still have subprime mortgages, and those loans are just beginning to catch up with them. As a result, many of those homeowners are just now dealing with the threat of foreclosure.
Chicago was among the “hardest-hit cities” in the foreclosure crisis, and millions of foreclosures resulted from subprime mortgages. So, it should not come as a complete surprise that many homeowners in the city are still dealing with subprime mortgages and trying to find a way to keep their homes.
Contact an Oak Park Foreclosure Defense Lawyer
There are many ways an Oak Park foreclosure defense lawyer can help if you are dealing with a subprime mortgage or are trying to avoid foreclosure. Contact the Emerson Law Firm to learn more about how we can help.
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Tuesday, February 7, 2017
Sandra Emerson Discusses Senate Bill Addressing Foreclosure Process
A recent state Senate bill aims to fast-track aspects of the mortgage foreclosure process, according to a recent article in the Chicago Daily Law Bulletin. However, many foreclosure defense lawyers and consumer protection advocates in Illinois are concerned about whether the Senate bill actually might not have the best interests of debtors in mind. Some commentators have voiced worries that the proposed legislation “would unfairly advantage bank lenders.” Sandra Emerson was quoted in the article, emphasizing that the bill may require more of homeowners than is fair.
What else do you need to know about the Senate bill, and what else does Sandra Emerson have to say about the potential harms it could pose for homeowners in the Chicago area?
Learning More About Senate Bill 192
The proposed legislation, Senate Bill 192, aims to make revisions to Section 15-1506 of the Code of Civil Procedure. More specifically, the bill would amend the mortgage foreclosure article of this part of the law, and it would make two primary changes:
- When there is a foreclosure trial, once the mortgage lender presents the mortgage in the current case and the mortgage note, it establishes a prima facie case for foreclosure; and
- The initial burden of proof would shift from the lender to the borrower as soon as the mortgage lender establishes a foreclosure case.
What is a prima facie case? In brief, it is one that is sufficient to establish that the party presenting evidence has enough in its favor to move forward with the case. As you might be able to guess, these proposed amendments to Illinois law could make it more difficult for homeowners to defend against foreclosure, while also making it easier, potentially, for banks to be able to move forward with foreclosure cases against struggling debtors.
Foreclosure Defense Advocates in Illinois Speak Out Against Proposed Legislation
In response to the proposed new law, many Illinois foreclosure defense advocates emphasize that such amendments to the law suggested by SB 192 could deny mortgage borrowers of due process. Sandra Emerson emphasized that the Senate bill has the potential to do serious harm to borrowers who want to build a successful foreclosure defense in order to remain in their homes. Given that mortgage servicers make errors, it can be difficult for a borrower to dispute the amount owed early in the case, and the banks could move forward, potentially unfairly, with a foreclosure case. As she explained, “What we’ve noticed is that a lot of mortgage companies make mistakes, very serious errors in accounting.”
Moreover, as Emerson clarified, shifting the burden of proof to the homeowner makes it very difficult on the homeowner: “That’s really hard for anybody to do . . . . You don’t have any way to prove what is actually owed, because the bank has the information you need to do that.” As Emerson highlighted, the way in which the bill has been written (including the shift in the burden of proof) would favor the banks while making it so that “someone who is a layperson isn’t going to understand the potential impact that this law would have.”
Contact an Oak Park Foreclosure Defense Lawyer
If you are facing foreclosure, it is more important than ever to discuss your case with an Oak Park foreclosure defense attorney. An advocate at the Emerson Law Firm can speak with you today. Contact us to learn more about how we can help.
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Friday, October 9, 2015
New Mortgage Disclosure Rule
In the age of the real estate crash and the foreclosure crisis, many Chicagoans found themselves with subprime mortgages and the inability to make any headway on their home loans. Now, while the risk of foreclosure in Illinois remains a reality for many homeowners, many more find themselves in a better financial situation. One of the reasons that more homeowners are under control of their financial futures, according to a recent news release from the Consumer Financial Protection Bureau (CFPB), is the institution of laws aimed at protecting consumers.
Consumer advocates have emphasized that soon-to-be home buyers simply need more information about the terms of their loans, and how those terms are likely to impact their financial futures. A new rule that aims toward the goal is now in effect.
Know Before You Owe and Mortgage Disclosure Requirements
The “Know Before You Owe” mortgage disclosure rule represents one of those legal changes. As the CFPB explains, the “disclosures required for getting most mortgages have been redesigned to help you shop around to compare offers and find the loan that is best for you.” In addition to underlining the need for consumers to shop around to find the best mortgage for their needs, the new rule also requires the following:
- Lenders to give homeowners more time to review the terms of a mortgage prior to acceptance;
- Lenders allowing homeowners to ask direct questions or to seek advice about the terms of a loan from an experienced consumer protection lawyer.
The Know Before You Owe rule is not entirely new. The Dodd-Frank Act mandated mortgage disclosure changes for new homeowners. At the same time, the new rule does even more for consumers. In addition to disclosures, as we mentioned, it also gives soon-to-be homeowners additional time to understand the terms of the loan and to ask questions they need to know to feel comfortable with the mortgage. For most Americans who apply for a mortgage on or after October 3rd, the new disclosures will be mandatory.
Helping Consumers to Avoid Costly Mistakes
The Know Before You Owe initiative from the CFPB is designed ultimately to prevent consumers from seeing “costly surprises” once they agree to the terms of a mortgage. When it comes to getting a fair mortgage and affordable terms based on your income and lifestyle, education is the key. In addition to “making the mortgage process easier” for consumers, the CFPB’s initiative also comes with tools to help you make the right decisions—and ultimately to avoid foreclosure—including but not limited to:
- Sample loan estimate for consumers considering a mortgage;
- Closing disclosure for soon-to-be homeowners so they do not have any financial surprises when it comes time to close on a house;
- Tools to help you learn more about the process of getting a mortgage, including information about local rates, loan options, and the steps in a closing; and
- Budgeting information, including worksheets and checklists to help you get through the process of buying a home affordably.
If you have concerns about how the new rule will affect you, or if you have questions about avoiding foreclosure, it is important to seek advice from an experienced Oak Park foreclosure defense lawyer. Do not hesitate to contact the Emerson Law Firm. We can discuss your case with you today.
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Illegal Mortgage Servicing Results in $1.5 Million Fine
Tuesday, August 25, 2015
Illegal Mortgage Servicing Results in $1.5 Million Fine
The Consumer Financial Protection Bureau (CFPB) has been busy in the last few months. The watchdog agency was created to monitor and enforce laws that protect consumers, and it appears that it is working to do just that. According to a recent article from HousingWire, the CFPB has levied a fine of $1.5 million against Residential Credit Solutions, a mortgage servicer that didn’t abide by the law.
Illegal Mortgage Servicing Allegations Against Residential Credit Solutions
Why did Residential Credit Solutions receive a whopping $1.5 million fine? The company was fined for illegally servicing of thousands of loans it acquired from other servicers. According to the article, the mortgage servicer broke the law in a number of ways, including:
- Failing “to honor modifications for loans transferred from other servicers”;
- Providing false information to consumers about unpaid loan balances, payment due dates, required payment amounts, and delinquency statuses;
- Treating “consumers as if they were in default when they weren’t”;
- Misrepresenting the amount of escrow surplus due to consumers; and
- Forcing consumers “to waive their rights in order to get a repayment plan.”
The mortgage servicer is based out of Fort Worth, Texas, but it has consumers across the country. Residential Credit Solutions is known as a company that “specializes in servicing delinquent or default loans and so-called ‘credit-sensitive’ residential mortgage loans, where the borrower is at high risk for default.” The CFPB estimates that the mortgage servicer has assets totaling about $95 million. And since 2009, around 75,000 homeowners have seen their mortgage loans transferred to the Texas-based company.
Details of Mortgage Servicer’s Violations
One of the biggest problems, according to the CFPB, is the way in which Residential Credit Solutions handled loans that had already undergone modifications from other servicers. A number of its customers are said to have had trial loan modifications with their previous servicers, but when Residential Credit Solutions acquired those mortgages, it failed to honor the modifications.
Instead, the CFPB alleges that the Texas mortgage servicer “insisted that the consumer re-prove that he or she was qualified.” And if the CFPB is correct, then Residential Credit Solutions “effectively set consumers back as though they had not received a trial modification.” The CFPB described the position into which the mortgage servicer placed these consumers as a “trial period purgatory.” In connection to the issues surrounding loan modifications and other violations, the CFPB alleged that the Texas-based mortgage servicer effectively prevented consumers from saving or selling their homes through confusion and misrepresentation.
In addition to the fine, will the CFPB require any additional steps from Residential Credit Solutions? The article emphasizes that the mortgage servicer won’t be able to simply pay the $1.5 million and forget about the accusations against it. Rather, it will have to take some of the following steps to repair the harms it is alleged to have caused:
- Engaging in outreach campaigns to help borrowers save their homes;
- Honoring loss mitigation agreements entered into with prior servicers;
- Creating a rigorous program to ensure accurate information in mortgage transfers; and
- Making loss mitigation applications available to consumers electronically and at no cost.
If you believe you were treated unfairly by a lender or a mortgage servicer, it is important to discuss your case with an Oak Park consumer protection attorney. Contact the Emerson Law Firm today to learn more about how we can assist you with your claim.
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