If you’ve taken out an FHA loan on a property and have failed to made payments, or your lender has begun FHA foreclosure proceedings against you and you feel these actions are without merit, you can delay the foreclosure or in some cases have the foreclosure stopped altogether by knowing your available defenses against foreclosure.
The Truth in Lending Act
Your lender is required to provide to you, at the time of closing or prior, accurate disclosures about your loan. For instance, the amount of finance charges applied, and the Annual Percentage Rate must be clearly and accurately stated. If your lender fails to provide this information, your loan may be considered “statutorily rescindable” under the Truth in Lending Act. Your lender also has the obligation of providing you a Notice of Your Right to Rescind at the time of closing, allowing you to cancel your loan and obtain a refund for any money paid to your lender within 3 years of the closing date.
Unfair or Deceptive Practices
Under the Unfair or Deceptive Acts or Practices Act, your lender may have committed any number of licensing violations, making any transactions with unlicensed lenders null and void.
- Typically the violation of a UDAP statute results in compensation for all actual, statutory, or multiple damages, and the homeowner will be reimbursed for any and all attorney and court costs.
- In some states the compensation given under the UDAP Act will result in the homeowner being able to receive punitive damages as well, meaning if a homeowner should have to move due to a voidance of contract, they would be compensated for all related cost incurred.
Fraudulent Appraisal
In some cases an appraiser will raise or inflate the reported property value before a loan is given in order to help a lender obtain more money than the property is worth. Appraisers may do this to gain the lender’s repeat business, or to receive a monetary kickback or collect payment from the lender when the loan closes. In these cases the homeowner is granted all reimbursement for both actual and punitive damages, including but not limited to attorney fees and court costs.
Breach of Contract by the Lender
Just as the homeowner is obligated to pay the mortgage payment, the lender providing the loan is contracted to in no way interfere with the homeowner’s ability to make those payments. Typically the way lenders do this is by forcing their provided insurance on the loan, in efforts to make the payments more than they typically would have been. Also, any lender who pays or in any other way rewards a broker for providing borrowers to them is also liable for that broker’s voluntary breach of ethical fiduciary duties.
Getting Help
If you feel you are being violated by any of these actions, you should consider seeking legal assistance immediately. An experienced foreclosure attorney can help you protect your rights and make sure you aren't treated unfairly.
