Foreclosures aren’t always legal. In some cases, lenders deceive and take advantage of homeowners who are having financial difficulties, and work against them to speed up the auction of their property. In addition, bank negligence and associated errors may result in lenders moving forward with a foreclosure, even when it’s not entirely warranted. If fraud occurs throughout the foreclosure process in any form – including improper documentation, predatory mediators and illegal lending practices – you may be able to file a claim for wrongful foreclosure with one of our top wrongful foreclosure attorney in Los Angeles.
Common causes of wrongful foreclosure
Wrongful foreclosures occur for a variety of reasons, including lender mistakes, a lack of due diligence, negligence and outright fraud. Some of the most common causes include:
Banks may be held liable in a wrongful foreclosure case if they engaged in fraudulent practices and predatory tactics. For example, if the bank tricked the homeowner into default by promising a loan modification after receiving late payments, only to reverse their decision and continue moving forward with the foreclosure process, the action may be considered unlawful.
A bank’s negligence and associated errors throughout the foreclosure process may also lead to a lawsuit if the owner suffered damages as a result. For example, let’s say the bank sold the mortgage to another lender. In the process, some of the records were lost and not all mortgage payments were properly credited to the account. In this case, it would be mistakenly reported that the mortgage is in default.
Breach of contract
Homeowners may also sue for wrongful foreclosure if the lender is in breach of contract. For example, this often occurs if the bank provided a loan modification, and then attempts to change it by increasing the interest rate or otherwise altering the terms. The bank may also be considered in breach of contract if they accepted trial payments from the borrower and then denied the loan modification.
If a lender/servicer forecloses on a property, this foreclosure may be wrongful if the lender/servicer violated California Foreclosure Laws. A lawsuit may be necessary to enforce your rights, which may result in the foreclosure being “rescinded” (canceled), and/or monetary damages from the lender/servicer.
Have you experienced a wrongful foreclosure?
After the trustee sale has occurred, the homeowner will likely be named in an unlawful detainer action. When this occurs, the lender or new buyer will attempt to evict the former homeowner and take ownership of the property.
If you have equity in your home, and the home is auctioned for more than the remaining loan amount, you may be entitled to the surplus funds.
How to prove your case
The process of proving wrongful foreclosure is both technical and complex. As such, homeowners are advised to retain a Los Angeles wrongful foreclosure attorney who is well-versed in applicable lending and foreclosure laws, and has thorough knowledge of homeowners’ rights and protections. An experienced attorney can identify fraud that’s occurred throughout the process, protect your rights and may even be able to stop or postpone the foreclosure so that you can remain in your home until the matter is resolved.
Contact our office today
With over a decade of experience in real estate litigation, the attorneys at RA & Associates have successfully resolved countless cases for our clients. For help with your legal issue, contact one of our Los Angeles wrongful foreclosure attorney today for a preliminary analysis of your case.