How to Use the Law to Stop Mortgage Foreclosure

You can try to use the law to help stop mortgage foreclosure on your home, but you need to know what your options are and what you are looking for.  Your best bet is to hire a real estate attorney to look over your foreclosure documents for any mistakes.

The Truth in Lending Act may be an ally for you to stop mortgage foreclosure, if you question the validity of your mortgage loan.  If you go this route, you will need to prove that your originating loan documents were wrong.  If this is the case, it’s possible that the loan itself could be cancelled.  It is very important to have an attorney who is familiar with the detailed requirements of Regulation Z.

You may want your attorney to verify the following on your loan:

• Your mortgage company having more money in your escrow account than they were allowed.
• Not putting information in the documents to describe how to get rid of PMI (private mortgage insurance).
• Not adjusting your ARM (adjustable rate mortgage) correctly.
• Not including your referral fees to the originator of the mortgage.

You should also make sure that your attorney goes through all of your loan origination documents with a fine-tooth comb.  Any errors or discrepancies could mean the difference between being able to stop mortgage foreclosure and losing your home.

Some other legal avenues to stop mortgage foreclosure are:

• If you can prove that your mortgage company lost any of your payments.  You must have clear and detailed records on this (it can be your best defense)
• If you have an FHA insured loan, you should have received information about pre-foreclosure counseling.  This is required by law for FHA-insured loans.
• If your mortgage company accepted payment from you after foreclosure was filed on the home.