Home Foreclosure When a Mortgage Lender’s Mistake Can Lead to Potential Borrower Foreclosure

When a Mortgage Lender’s Mistake Can Lead to Potential Borrower Foreclosure

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PLANTATION, FL, March 22, 2022 /24-7 PressRelease/ — Recent increases in home purchases due to favorable interest rates have led to an increase in potential errors from mortgage lenders. Errors on the part of lenders can have significant negative effects on borrowers.

Unfortunately, many borrowers assume that the information their lender gives them and the actions they take are correct. After all, most mortgage lenders handle a high volume of business, so the conclusion that experience means low error rates might seem logical. But it’s not always the case.

Examples of Mortgage Lender Mistakes
Lenders can make mistakes during the mortgage process. Whether through negligence or non-compliance with rules and regulations, these mistakes can cause catastrophic problems for borrowers.

Types of problems caused by mortgage lender errors include failure to apply credit for payments, as well as providing an inaccurate repayment balance after the borrower requests.

Lenders may also initiate abusive foreclosure proceedings, unreasonably deny a loan modification request, or neglect to pay insurance or taxes.

Also, mistakes by lenders include charging unreasonable fees and neglecting to record mortgage satisfaction.

How to Fix Mortgage Lender Mistakes
If you are the victim of a mortgage lender’s mistake, there are things you can do to avoid a potential foreclosure. Probably, the error is not your fault. “Borrowers sometimes feel like they have nowhere to turn if a lender makes a mistake and won’t admit it,” says attorney Carlos M. Amor.

As a licensed real estate broker and lawyer, Amor has a particular understanding of the nuances involved when lenders make mistakes.

He gives the following advice to borrowers if they discover that their lender has made a mistake.

Timely report errors
As soon as you notice a mistake made by a lender, report it and take proactive steps to ensure it is corrected.

Best practices indicate that you should request more information in writing. Fortunately, the Federal Consumer Financial Protection Bureau has sample letters for contacting your mortgage lender. An error notice alerts the lender that there is a problem and provides protections for the lender.

How? ‘Or’ What? The notice simultaneously notifies the lender of the error, serves as an attempt to resolve the error, and gives them a chance to correct it.

After receiving notice of the error, the lender may correct the error, investigate the error, request additional information, or request more time to investigate and respond to the notice.

When Errors Persist, Foreclosure Proceedings Can Happen
When mortgage lender mistakes lead to problems with your account, it may cause a lender to initiate a foreclosure proceedings.

Under federal law, banks generally cannot begin foreclosure proceedings until payments have been made for 120 days. During this period, they must also advise borrowers of possible ways to keep their home, such as repayment plans and loan modifications. If you are in this situation, you may need to seek the help of a lawyer.

“I have a word of warning to all mortgage borrowers,” says Amor. “Always read your mortgage statements and any other correspondence from your lender carefully. Make sure there are no surprises that will come back to haunt you later.

About Attorney Carlos M. Amor

Carlos M. Amor, Esq. is a Plantation, Florida-based law firm specializing in real estate matters. With years of practice in the Florida real estate market as an attorney and real estate broker, Carlos M. Amor knows how to communicate with lenders on your behalf. With an out-of-the-box approach that puts his clients’ needs first, Carlos M. Amor leverages his in-depth knowledge of the South Florida real estate market to deliver profitable results for every case.


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