How do I know if my foreclosure is wrongful?

In the recent past we have experienced a huge number of foreclosures. As individuals have lost their jobs and subsequent incomes, they have been delinquent in mortgage payments. As the number of these payments continued to go unpaid, banks have moved forward with the foreclosure process. In most cases, an individual is going to know whether or not their foreclosure was properly processed due to the simple fact that they have gone a particular period of time without paying their mortgage. However, the sheer number of foreclosures have led mistakes on the part of the banking industry and mortgage holders. 

In the fall of 2010 several large banks revealed to the public that some of their foreclosures were not properly processed. And this was in almost half of the judicial foreclosure states. Reuters reported the following on October 9, 2010 "More than two-thirds of U.S. state attorneys general plan this week to launch a joint probe into charges that some banks used fraudulent paperwork to kick struggling borrowers out of their homes..."

If a bank acted improperly in foreclosure it is due to several potential mistakes. To begin with there were many lapses in evaluating the authenticity of the information on mortgage documents. Several large banks found themselves caught up in lawsuits with owners as well as investigations and probes by state attorney generals. They have discovered that in some cases employees working for the lending institutions rushed mortgage documents through the process without properly verifying information. Some of the incorrect information resulted in inaccurate loan information including the names of the owners of several mortgages.

A difficult mistake to stomach surfaced in these investigations as if became apparent that multiple banks claimed the right to foreclose on the same property.

The issue of flawed paperwork quickly put in doubt the validity of the documents of ownership. There were cases where an individual moved into a home after the payment was made, but were not the legal owner of the property. The result was that mortgage companies expelled the wrong people from the wrong homes during the foreclosure process.

Facing legal challenges as well is the Mortgage Electronic Registration System (MERS) which handles mortgage transfers between member banks. Apparently MERS was part of the problem in creating false promissory notes as well as affidavits that were used in the mortgage foreclosure process.

If a person suspects that they bay have suffered an improper foreclosure, contact the state attorney and explain the reasons for your suspicions. The best alternative, however, may be to hire an attorney who specializes in foreclosure laws and have him verify that the process was legitimate or not.