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Proposed Wrongful Foreclosure Settlement

As a Waco bankruptcy attorney, I see people who are going to lose their homes to foreclosure all the time. In McLennan County alone, approximately 60-80 homes are set to be foreclosed on every month. I frequently hear clients in my office saying that they are attempting to modify their home loans and the mortgage company is working with them, so why should they be worried about the foreclosure? Wow, that is a loaded question. Mortgage companies are not supposed to foreclose on a home while they are considering a modification, so, as long you are attempting a modification, you are safe from foreclosure, right? Wrong. Across the nation, mortgage companies are wrongfully foreclosing on homes with little consequence.

Currently a coalition of attorney generals are in settlement negotiations with five mortgage companies: Bank of America, JPMorgan Chase, Wells Fargo, Citibank, and Ally Financial (formerly known as GMAC). The allegation is bad mortgage servicing and fraudulent foreclosure paperwork. Yesterday a proposed settlement was announced. It appears that homeowners who were wrongfully foreclosed on could receive approximately $1,500.00 to $2,000.00. Notice they are not getting their homes back. They are not receiving enough money to truly compensate them for losing their homes. Basically, the mortgage company will have to say “So sorry, we took your home unlawfully. Here is a check.” For the full article, go to http://news.firedoglake.com/2011/12/26/proposed-foreclosure-fraud-settlement-still-looks-woefully-inadequate/.

So, when clients ask me if they should be worried about their mortgage companies wrongfully foreclosing on them, my answer is “Yes, you should be worried.” Even if you can prove it was a wrongful foreclosure, history is showing that you probably won't get your house back and the money you receive is woefully inadequate. Filing for bankruptcy before the foreclosure is one of the only ways to stop a foreclosure sale. You need an experienced bankruptcy attorney to discuss your options regarding your home. Don't rely on the bank's promises. Protect yourself. Call 254-633-2876 or email us at [email protected] today for a free consultation to explore your options.

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