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Suing Banks and Loan Servicers to Enforce Borrowers' Rights

 

 

In addition to defending foreclosure in state court, changes to federal law have created high standards of conduct and behavior for banks and other companies who service mortgage loans. These laws created powerful legal weapons to hold corporations accountable when they fail to meet those high standards.

​Payton Legal has been a national leader in filing suit on behalf of borrowers who have been wronged by their mortgage lender, using Regulation X of the Real Estate Settlement Protection Act and Regulation Z of the Truth in Lending Act. 

Many people who have a dispute with their mortgage lender, fall behind on their mortgage, are in a Chapter 13 Bankruptcy, or are in a state court foreclosure action have actionable claims against their mortgage loan servicers. 

The following issues could trigger liability under Regulations X and Z for statutory damages of $1,000 to $4,000, compensatory damages (including emotional distress, legal fees, credit diminution and other pecuniary loss) and shifting of attorney's fees: 

  • Failure to timely process loss mitigation applications, including loan modifications, deed-in-lieu of foreclosure applications and short sale requests. A decision must be made within 30 business days of receipt of a complete loss mitigation package and a servicer must request additional documents from an applicant within five business days.

  • Dual Tracking. A loss mitigation application triggers a 120-day stay on any activity to advance a foreclosure, such as: commencing a foreclosure action, scheduling a sheriff's sale or foreclosure sale or moving forward in a judicial foreclosure with a motion for summary judgment, presenting evidence at trial or other effort to advance judgment or sale. 

  • Failure to provide information as properly requested about ownership of note and mortgage under TILA within 10 business days. 

  • Failure to provide information as properly requested about loan payments, loan history and other loan information within 30 business days. 

  • Failure to apply mortgage payments on the day they are received and to principal, interest and escrow payments before late fees and other charges.