In the wake of the collapse of the housing market and foreclosure crisis caused by banks, mortgage companies, and predatory lenders, the federal government enacted tough laws designed to hold financial firms accountable when they harm homeowners and consumers. One important feature of the new statutes: victims are eligible to receive thousands of dollars in statutory and compensatory damages.
The attorneys at the Dann Law Group are recognized as national leaders in using these powerful new tools, including Regulation X of the Real Estate Settlement Procedures Act (RESPA) and Regulation Z of the Truth in Lending Act (TILA), to help homeowners and consumers who are engaged in a dispute with their mortgage lender, have fallen behind in their mortgage payments or are in Chapter 13 Bankruptcy.
While every situation is different, the following issues may trigger liability under Regulations X and Z and produce statutory and/or compensatory damages of $1,000 to $4,000 per violation. In addition, servicers who violate the regulations may be liable to pay victims’ legal fees.
- Failure to process loss mitigation applications, including loan modifications, deed-in-lieu of foreclosure applications and short sale requests in a timely manner.
- Under the new laws, loan servicers must render a decision within 30 business days of receiving a complete loss mitigation package. Requests for additional information from applicants must be submitted within five business days.
- Failure to properly apply mortgage payments.
- Servicers are obligated to credit mortgage payments on the day they are received and to apply payments to principal, interest and escrow before late fees and other charges.
- Failure to provide properly requested information in a timely manner.
- Under TILA servicers must provide information about ownership or a note or mortgage within 10 business days and must provide information about loan payments, loan history, and other pertinent loan matters within 30 business days.
- Dual Tracking.
- Filing a loss mitigation application triggers a 120-day stay on any activity to advance a foreclosure. During this period servicers may not begin a foreclosure action, schedule a sheriff’s sale or foreclosure sale, move forward with motion for summary judgment in a judicial foreclosure proceeding, present evidence at trial or take any other action to advance judgment or sale.