When a Mortgage Lender's Error Can Cause Borrower's Potential Foreclosure

    PLANTATION, FL, March 22, 2022 /24-7PressRelease/ -- Recent surges in home buying due to favorable interest rates have led to an increase in potential errors by mortgage lenders. Mistakes on the part of lenders can have strong adverse effects for borrowers.

Unfortunately, many borrowers assume that the information their lender provides them and the actions they take are correct. After all, most mortgage lenders handle a large volume of business, so the conclusion that experience means a low error rate may seem logical. But that's not always the case.

Examples of Mortgage Lender Errors
Lenders may make mistakes during the mortgage lending process. Whether from carelessness or failure to follow the rules and regulations, these mistakes have the potential to cause catastrophic issues for borrowers.

Types of issues caused by mortgage lender errors include failing to apply credit for payments, as well as providing an inaccurate payoff balance after the borrower's request.

Lenders can also initiate wrongful foreclosure proceedings, unreasonably deny a loan modification request or neglect to pay insurance or taxes.

Furthermore, lenders' errors include charging unreasonable fees and neglecting to record the satisfaction of mortgage.

How to Address Mortgage Lender Errors
If you are the victim of a mortgage lender error, there are things you can do to prevent potential foreclosure. Likely, the mistake is not your fault. "Borrowers sometimes feel they have nowhere to turn if a lender makes a mistake and then won't admit it," says Attorney Carlos M. Amor.

As a licensed real estate broker and lawyer Amor has a special understanding of the nuances involved when lenders make errors.

He provides the following advice for borrowers if they find out their lender made an error.

Timely Report Errors
As soon as you notice a mistake made by a lender, report it and take proactive steps to make sure that it's addressed.

Best practices indicate that you should request more information in writing. Luckily, the Federal Consumer Financial Protection Bureau has sample letters for contacting your mortgage provider. A Notice of Error alerts the lender that there is an issue and provides protections to the lender.

How? The notice simultaneously notifies the lender of the error, serves as an attempt to resolve the error and gives them a chance to correct it.

After receiving notice of the error, the lender can correct the error, investigate the error, seek additional information, or ask for more time to investigate and respond to the notice.

When Mistakes Linger, Foreclosure Proceedings Can Happen
When mortgage lender mistakes result in issues with your account, it may result in a lender initiating a foreclosure proceeding.

Under federal laws, banks usually cannot begin foreclosure proceedings until payments have been missed for 120 days. During this period, they must also inform borrowers about possible ways to keep their homes, such as repayment plans and loan modifications. If you are in this situation, you may need to seek an attorney's help.

"I have a word of caution to all mortgage borrowers," says Amor. "Always read your mortgage statements and any other correspondence from your lender closely. Make sure that are no surprises that will later come back to haunt you."

About Attorney Carlos M. Amor

Carlos M. Amor, Esq. is a Plantation, Florida-based law firm focusing on real estate matters. With years of practice in the Florida real estate market as both a lawyer and a real estate broker, Carlos M. Amor knows how to communicate with lenders on your behalf. With an outside-the-box approach that prioritizes his clients' needs, Carlos M. Amor leverages his in-depth knowledge of the South Florida real estate market to achieve profitable outcomes for each case.

# # #