What is a Wrongful Foreclosure Action?

29 Aug

The pretender lender does not have the loan and did not invest any of the servicers money. Yet these frauds are occurring every day. They did not loan you the money yet they are the ones foreclosing, taking the bail out money, the mortgage insurance, and then throwing it back on the investor for the loss. We could stop them if a few plaintiffs where awarded multi million dollar verdicts for wrongful foreclosure.
A wrongful foreclosure action typically occurs when the lender starts a non judicial foreclosure action when it simply has no legal cause. Wrongful foreclosure actions are also brought when the service providers accept partial payments after initiation of the wrongful foreclosure process, and then continue on with the foreclosure process. These predatory lending strategies, as well as other forms of misleading homeowners, are illegal.

The borrower is the one that files a wrongful disclosure action with the court against the service provider, the holder of the note and if it is a non-judicial foreclosure, against the trustee complaining that there was an illegal, fraudulent or willfully oppressive sale of property under a power of sale contained in a mortgage or deed or court judicial proceeding. The borrower can also allege emotional distress and ask for punitive damages in a wrongful foreclosure action.
Causes of Action

Wrongful foreclosure actions may allege that the amount stated in the notice of default as due and owing is incorrect because of the following reasons:

Incorrect interest rate adjustment
Incorrect tax impound accounts
Misapplied payments
forbearance agreement which was not adhered to by the servicer
Unnecessary forced place insurance,
Improper accounting for a confirmed chapter 11 or chapter 13 bankruptcy plan.
Breach of contract
Intentional infliction of emotional distress
Negligent infliction of emotional distress
Unfair Business Practices
Quiet title
Wrongful foreclosure

Injunction

Any time prior to the foreclosure sale, a borrower can apply for an injunction with the intent of stopping the foreclosure sale until issues in the lawsuit are resolved. The wrongful foreclosure lawsuit can take anywhere from ten to twenty-four months. Generally, an injunction will only be issued by the court if the court determines that: (1) the borrower is entitled to the injunction; and (2) that if the injunction is not granted, the borrower will be subject to irreparable harm.
Damages Available to Borrower

Damages available to a borrower in a wrongful foreclosure action include: compensation for the detriment caused, which are measured by the value of the property, emotional distress and punitive damages if there is evidence that the servicer or trustee committed fraud, oppression or malice in its wrongful conduct. If the borrower’s allegations are true and correct and the borrower wins the lawsuit, the servicer will have to undue or cancel the foreclosure sale, and pay the borrower’s legal bills.
Why Do Wrongful Foreclosures Occur?

Wrongful foreclosure cases occur usually because of a miscommunication between the lender and the borrower. This could be as a result of an incorrectly applied payment, an error in interest charges and completely inaccurate information communicated between the lender and borrower. Some borrowers make the situation worse by ignoring their monthly statements and not promptly responding in writing to the lender’s communications. Many borrowers just assume that the lender will correct any inaccuracies or errors. Any one of these actions can quickly turn into a foreclosure action. Once an action is instituted, then the borrower will have to prove that it is wrongful or unwarranted. This is done by the borrower filing a wrongful foreclosure action. Costs are expensive and the action can take time to litigate.
Impact

The wrongful foreclosure will appear on the borrower’s credit report as a foreclosure, thereby ruining the borrower’s credit rating. Inaccurate delinquencies may also accompany the foreclosure on the credit report. After the foreclosure is found to be wrongful, the borrower must then petition to get the delinquencies and foreclosure off the credit report. This can take a long time and is emotionally distressing.

Wrongful foreclosure may also lead to the borrower losing their home and other assets if the borrower does not act quickly. This can have a devastating affect on a family that has been displaced out of their home. However, once the borrower’s wrongful foreclosure action is successful in court, the borrower may be entitled to compensation for their attorney fees, court costs, pain, suffering and emotional distress caused by the action. Fortunately, these wrongful foreclosure incidences are rare. The majority of foreclosures occur as a result of the borrower defaulting on their mortgage payments.

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4 Responses to “What is a Wrongful Foreclosure Action?”

  1. bob sweeting August 29, 2012 at 11:33 pm #

    I have a case against MERS, Chicago Title, GMAC, Fremont Inv. and others. In the re-fi, the Mortgage broker quoted 7% int. 1/2 pt in fees.and $150,000. cash out. THAT did not happen. When they came up with a new loan 5 months later, the loan proceeds due to me were STOLEN, the first payment due back to Fremont was stolen, the Broker/Escrow had a REVOKED licnese, never left the Right to cancels, No Disclosures, NO copy of the loan contrac itself. They forged docs, and bribed the Appraiser. The Interest was at a Usurious 10.4%!
    EVERY LAW listed in the Financial Codes was VIOLATED, starting with NO License.
    Fremont was ordered OUT of the Mortgage Business in 2007. Fremont never posted my payments. Fremont sold their loans to GMAC for half price, of which all were “DOOMED TO FORECLOSE” GMAC adds $100,000.00 to my principal, then files their NOD. GMAC Demanded I pay them the stolen proceds at 10.4% also.
    Fremont tells the FDIC that they sold those Doomed loans. They did NOT do that. Both GMAC and Fremont rapidly signed over all those bad loans to another Mortgage company, Truman Capital (TCIF REO GCM) who, oddly enough has the SAME address as…Fremont. TCIF Foreclosed on Thousands fo homes, and no one knew who they were.
    GMAC SWORE in court they never owned my loan, NOR did they EVER own the Title to escape liability. YET, GMAC went into another court, and swore there thet they DID own the Deed. GMAC Filed THREE Unlawful Detainers in an attempt to steal the porperty, and get out of the case at the same time. GMAC GOT CAUGHT in the lie in court.
    GMAC,. in firther retribution, places on all my credit reports that I owe them an additional $ 16 MILLION on the same loan they swore they never had. They place 25 “120 Lates” on all credit bureaus, on that same loan. They were CAUGHT by the judge committing FRAUD UPON THE COURT.
    The Appellate Court is now reviewing the ENTIRE 4 years of documents to shake out the fraud the GMAC and Fremont have broought to the court in my case.
    The Courts will have GMAC’s ASS when those sneakly bastards get out of Chapter 11.
    Because the documents were forged and hidden, and after I served a “Request for Documents” neither Chicago nor MERS is able to produce any.
    GMAC took my home WITHOUT the Title, “assigned” my deed over to a fourth company, who then threw me in the street.
    Now, not only “Wrongful Foreclosure” but “WRONGFUL EVICTION” without the Title.
    The original loan was so illegal, that neither the Note Nor the deed were EVER Legal.

  2. cazcan22 March 1, 2013 at 2:22 am #

    Hello.
    Please email me.
    World Loan closed 7/2006 turned Wachovia
    Last mortgage bill received 12/2011
    Was current. Wells suppose servicer has never sent me one mortgage bill or statement ever.. No calls nothing. Nod filed on 10/27/2012 stated I owed 830,000 .
    Cal Western signed themselves as new trustee. No bank signature on SOT..
    Sale date taped to door today. Not signed or recorded. 3/25 sale date. Been here 26 years. Freaking out to be homeless w 6 animals…. Please email cazcan22@live.com
    Homeless is not an option. 😦
    Help..!!

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