A Miami foreclosure defense attorney is getting ready to challenge lenders in court. He claims they are in violation of federal mortgage servicing rules that took place in January. He’s currently working on postponing several foreclosure sales referring to rules that the Consumer Financial Protection Bureau, or CFPB, issued to protect borrowers. His office will file lawsuits, in federal court if necessary. The lawsuits will be against lenders that push for foreclosure sales while borrowers are waiting to receive loan modifications.
The CFPB rule states that the lender must verify that the applicant is able to afford a mortgage; prior to issuing a loan. And, they must obey new protections for homeowners who are having a hard time making payments. The rule also includes foreclosure sale prevention if borrowers are taking the correct steps to obtain a mortgage modification. Flagstar Bank was ordered to pay $27.5 million to nearly 2,000 borrowers in September by the bureau. This is because they were consistently preventing borrowers’ efforts to lessen their losses and keep their homes.
Mortgage servicers are favored due to Miami’s clogged foreclosure dockets all the while the judges are making an effort to lessen the backlog despite federal rules giving homeowners a break, claims the Miami foreclosure defense attorney. While homeowners are hoping to delay the foreclosure process while still waiting to hear back regarding their mortgage modifications, some courts are moving their cases along. And, they are giving lenders loopholes to push forward with the foreclosure.
Lenders are Suffering Losses
However, lenders are stating that they are suffering losses due to heavy spending on foreclosure litigations and compliance teams. Lenders believe that for the foreclosure system to be effective and for the real estate market to return, the foreclosure process has to be fair and efficient. It is in the banker’s preference not to foreclose. But, they will litigate if borrowers became delinquent and the state courts reject motions for continuance.
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