Posted on March 30,2012 in Foreclosure

In Illinois, if a homeowner misses a mortgage payment, their loan then goes into default. Although just one missed payment violates the mortgage contract. most lenders won't start foreclosure proceedings until a borrower is at least three payments behind. However, a Chicago foreclosure doesn't mean that the homeowner must immediately move out. In Illinois, the borrower is considered the lawful occupant of the property and is allowed to live in the property until a judgment of possession is entered, which takes a minimum of 9 months.

Illinois' Homeowner's Rights Act, requires that lenders take certain steps before filing for foreclosure proceedings. When a homeowner is at least 30 days behind on a mortgage payment, the lender must notify them that they have 30 days to seek assistance. Obtaining that assistance allows the borrower another 30 days to work out a payment plan.

If the borrower fails to do either of these things, the lender may begin foreclosure proceedings. The lender will send the borrower notification of its intention to foreclose and then file a lawsuit, detailing the reasons for the foreclosure request.

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 Posted on March 16,2012 in Foreclosure

As it is now mid-march, it is time for the Final Four…affirmative defenses that can be raised in a Mortgage Foreclosure Defense

1. Unclean hands: Foreclosure actions in Illinois are filed with the Chancery Division of the Court in the County in which the property is located. In order to initiate a legal action in the Chancery, the parties must “be before the court with clean hands.” This essentially means that the lender cannot have engaged in any actions that have contributed to the borrower being in default.

2. Standing: a party must have standing for the Courts in Illinois to have jurisdiction over a matter involving that party. All indispensable parties must be included in the action and the Plaintiff must be in possession of the debt. If a party lacks standing, it cannot being a law suit in the Illinois courts.

3. Fraud: lenders have been known to commit fraud, in fact, in some cases homeowners have been induced to sign loan documents because of lender fraud. There are several different elements that must be examined to determine if the lender engaged in fraudulent actions. Two examples: a) was the appraisal over-inflated? b) were any fiduciary obligations violated?

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 Posted on February 27,2012 in Foreclosure

Here are three more affirmative defense that may arise out of violation of the Unfair and Deceptive Trade Practices Act:

1. If your lender did not provide you with statements of the escrow account associated with your loan transaction, then an affirmative defense may exist.

2. If your lender failed to pay property taxes or insurance premiums for the subject property, there may be an affirmative defense.

3. The third is sort of a catchall catergory for actions or behavior that does not fit into the other affirmative defenses under the Unfair and Deceptive Trade Practices Act. If the actions of the lender were misleading or deceiving to the consumer in a way that could be construed as unfair or deceptive, there may be an affirmative defense.

If you believe that your lender has engaged in the above, please contact an attorney (especially for the third defense listed above).

(e) Otherwise misleading or deceiving the consumer in a way in which the practice can be construed as unfair or deceptive.

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 Posted on February 18,2012 in Foreclosure

The third Act that can give rise to affirmative defenses in a mortgage foreclosure is the Unfair and Deceptive Trade Practices Act. Courts can hold lenders accountable under the Unfair and Deceptive Trade Practices Act and can also be made to pay punitive damages and attorneys' fees.

Some examples of violations include:

1. If the lender obtained a yield spread premium (YSP) that was excessive or not properly disclosed.

2. If the lender charged excessive fees or required the payment of fees to parties not entitled to receive any fees.

As always, please contact an attorney if you believe one of the above may apply to your mortgage or loan situation.

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 Posted on February 15,2012 in Foreclosure

Here are two (2) more affirmative defenses that come from violations of the Real Estate Settlement & Procedures Act, or RESPA for short:

1. If a lender accepted fees, kickbacks or other items of value in exchange for settlement services and or split fees and received unearned fees for services that the lender did not actually perform, there may be an affirmative defense for a RESPA violation.

2. If the lender did not provide annual escrow disclosure statements for each year of the mortgage since its inception, an affirmative defense may exist for a RESPA violation.

Please contact an attorney if you believe your lender engaged in the above actions.

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 Posted on February 10,2012 in Foreclosure

The Real Estate Settlement & Procedures Act, or RESPA for short, is another possible source of affirmative defenses. RESPA is part of the U.S. Code and can be found at 12 U.S.C. Section 2601.

To begin:

1. An affirmative defense exists if a lender, at the time of the loan closing, charged a fee for the preparation of the truth in lending uniform settlement and escrow account statements.

2. An affirmative defense may also exist if the lender, at the time of the loan or within three (3) days after, failed to provide a special information booklet about the loan, a mortgage servicing and disclosure statement or a good faith estimate of settlement and closing costs to the defendant.

If you believe that one of the above may apply to your loan situation please contact an attorney. More RESPA defenses to follow.

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 Posted on January 23,2012 in Foreclosure

There are several affirmative defense that can be raised against a foreclosure action. One such affirmative defense that can be raised is for a violation of the Truth in Lending Act or TILA. The Truth in Lending Act is part of the United States Code: 15 U.S.C. Section 1601 et seq. as well as Regulation Z of 226 etseq.

Three of the numerous possible affirmative defenses for violations of TILA are:

1. The amount financed by the lender needs to be clearly stated and itemized in a real estate closing. Further, for consumer residential closings, banks are required to follow TILA when a consumer credit transaction involves a lien or security interest being placed in a principal dwelling or primary residence. If these requirements are not followed, the homeowner may be entitled to rescind the transaction.

2. There is an affirmative defense based on TILA if the lender fails to clearly and accurately state and disclose the number, amounts and timing of the payments scheduled to repay the loan or obligation.

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 Posted on January 16,2012 in Mortgage

Mortgage Foreclosure is a complex process that involves many different aspects and elements. Consequently, foreclosure defense is an area of law that encompasses a variety of legal issues. There are several different workout options that banks, lenders and borrowers must be aware of and consider. Sometimes lenders will offer a mortgage loan forbearance to a homeowner who is experiencing a temporary or short-term hardship.

Essentially, a mortgage forbearance is designed to allow a homeowner who has fallen behind on mortgage loan payments to become current on those payments over a condensed period of time. With a forebearance agreement, the lender basically gives the homeowner an extension, typically 6 months, to bring their payments current.

Sometimes the homeowner is charged for the delinquent amount in equal monthly installments over the forbearance period but some lenders will require the borrower pay part or all of the delinquency upfront. In some situations the lender will agree to a temporary suspension or reduction of mortgage payments. If a lender is willing to agree to reduce or suspend mortgage payments, the unpaid payments will be added to the principal of the loan and will be due when the loan matures. Forbearance agreements are negotiated between the lender and the borrower.

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 Posted on December 30,2011 in Foreclosure

There are many who do not want to leave their home even if they are underwater, meaning the amount owed on the mortgage is greater than the value of the home and property. One option for borrowers who really want to keep their house is a loan modification. A loan modification is when the bank alters the terms of a mortgage to reduce amount of the monthly payment. If the bank will give borrowers a better interest rate it may matter less that the house is underwater, especially if the home has unique characteristics or sentimental value. Sometimes borrowers are also able to obtain a reduction in principle through the loan modification process. It is not unusual to obtain 2% interest rate and extended terms of 40 years to help make mortgages more affordable.

Although anyone may apply for a loan modification, it is recommended that you consult a foreclosure defense attorney if a loan modification is a desirable option. Again, beware of “loan modification specialists” or other entities who will submit a modification application for a fee. Some of these are scams.

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 Posted on December 20,2011 in Mortgage

For many borrowers, a strategic default is a good option. A strategic default is when the borrowers decides to stop making their mortgage payments. A strategic default generally is used for properties that are “under water”, meaning that the value of the property is lower than the debt owed. Why a strategic default? There are many reasons. For example, many banks will not consider loan modifications or other workout options unless the borrower is in default, meaning that the borrower has missed mortgage payments.

However, although a strategic default may be a viable option for many borrowers who are interesting in fighting back against the bank, there are many factors to consider. One such factor is that a strategic default will inevitably result in a negative credit rating. Those interested in pursuing a strategic default should consult an attorney for advice and further information.

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