Protection From Foreclosure Fraud
Between 2008 and 2011, more than one million homes in California were foreclosed. As the number of foreclosures increased so did the amount of cases of foreclosure fraud.
California’s Homeowner Bill of Rights
The increase in foreclosure fraud in California can be linked directly to the number of homeowners who were persuaded by predatory lending practices to buy more property than they could actually afford. Such lending practices became commonplace as brokers used any means possible to qualify borrowers who fell short. Many found themselves in unsustainable financial position as their initial and affordable mortgage rates adjusted to much higher rates they were no longer able to afford. The extreme types of adjustable rate mortgages reset periodically throughout the lifetime of the mortgage, causing them to continuously grow higher and higher. Many of the contracts included mortgages containing inconspicuous balloon payments requiring borrowers to produce enormous sums of money.
Faulty documents and / or procedures are main tenets of foreclosure fraud
Foreclosure fraud utilized faulty documents and/or procedures, which resulted in homeowners wrongfully losing their homes. State and local government agencies are now investigating allegations of improper foreclosures by banks and other lending institutions. Meanwhile, homeowners have also filed foreclosure lawsuits, alleging banks used an unethical foreclosure process to force them out of their homes. In many cases, lenders did not provide homeowners with a significant opportunity to obtain loss mitigation options to avoid foreclosure and also engaged in extensive mortgage servicing misconduct The California’s Homeowner Bill of Rights that went into effect on January 1 2013, helped reform some aspects of California’s foreclosure process through a more fair and transparent nonjudicial process, and was established to better protect homeowners in foreclosure. The law’s protections for homeowners and now the Homeowner Bill of Rights can aid homeowners facing foreclosure in California.
The Servicemembers’ Civil Relief Act
A federal law that provides foreclosure benefits to those on active military is called the Servicemembers Civil Relief Act (SCRA). If you took out a mortgage before you went on active duty, you are entitled to a variety of protections against foreclosure. Under the Servicemembers’ Civil Relief Act (SCRA), all states are required to have judicial review of foreclosures and a judge is required to authorize foreclosures on homes of military members. Foreclosure authorization can only be given after a hearing at which military members are properly represented. The SCRA was enacted to protect active military members, some of them on duty overseas and with no ability to make mortgage payments. It has been reported that some service members have returned from active duty to discover that their home was in active foreclosure.