What are wrongful foreclosures?

Wrongful foreclosures are the result of mortgage lenders starting a foreclosure action against homeowners even though the lenders have no legal cause of action. Typically, in the foreclosure process mortgage lenders initiate the procedures to take the homeowners’ property away from them because of non-payment. In other words, the mortgage lenders foreclosure, or take the property, to recoup the money the homeowners still owe on their homes.

Thus, when mortgage lenders wrongfully foreclose on property, they are doing so even when the homeowners have paid their mortgage. Thus, mortgage lenders may allege on the default notice that incorrect information or wrong information. For instance, the lenders may allege that homeowners owe more than they actually do because they have misapplied payments. Also, mortgage lenders claim a breach of contact when there isn’t one. If homeowners were in bankruptcy, the lenders may not properly account for the money paid through the U.S. bankruptcy Courts.

Sometimes wrongful foreclosures are the result of miscommunication between mortgage lenders and homeowners. For instance, lenders could have misapplied the payments to another account or there was an error in interest charges. Other times they may be caused by predatory mortgage lenders.

Wrongful foreclosures are serious. They can lead to homeowners losing their homes and have a foreclosure on their credit reports. Therefore, good recordkeeping of all mortgage payments is a must. Another must is good communication between homeowners and mortgage lenders. However, if a wrongful foreclosure is already a reality, homeowners should seek legal help. Real estate lawyers can help stop the wrong foreclosure.