The first step to preparing a strong mortgage law case is to hire an experienced real estate attorney. Many individuals have a mortgage and are familiar with the process. There are, however, some legal details that most people may not know. Knowing these can help in preparing for a case.
A mortgage is a security interest attached to a property and/or home. It is collateral for the repayment of the loan the individual borrowed from the bank and/or other financial institution in order to purchase the property. The mortgage is placed on the property. This is done so that, in the event the borrower does not pay, or defaults on their loan, the financial lending institution will have the right to take possession of the property that is subject to the mortgage. It is important to note that a mortgage lien may also be referred to as a real estate lien and/or property lien.
The legal terms an average home buyer may not be familiar with are the promissory note and the actual mortgage, or “deed of trust.” A promissory note is a legal contract. In the case of a mortgage, the terms of a promissory note usually state that the borrower promises to repay a specific amount of money to the lending party, usually a bank, in a certain time frame, often 30 years. It holds the borrower responsible for repaying the loan even if the property is sold.
A mortgage, or deed of trust, functions as a lien on the property. If the borrower does not repay their loan, the financial institution that lent the funds may force them to repay it by selling the property. The mortgage document provides a guarantee to the financial institution that the funds they lent will be repaid even if the actual borrower does not make those repayments.
There are several different types of mortgages. These include:
- A fixed rate mortgage;
- An adjustable rate mortgage;
- A balloon mortgage; and
- An interest-only mortgage.
A fixed rate mortgage is a common mortgage used when individuals purchase a home and/or property. An attorney will be able to review mortgage documents and determine which type of mortgage an individual has on their property.
Mortgages and issues that arise out of mortgages can be very complex and involve multiple parties. A mortgage is a complex financial arrangement that involves valuable property. In addition, an individual may have multiple mortgages on the property, further complicating the issues. For these reasons, it is important to seek the help of an attorney in resolving mortgage disputes.
In many cases, a mortgage claim involves a dispute between the homeowner and the lending company. These lawsuits have the potential to cause the homeowner to lose their home. In addition, the mortgage company is losing payments. This may cause the proceedings to be complex and adversarial.
In many mortgage lawsuits, the lender will be granted a lien, which allows them to take possession of a borrower’s property to make up for missed payments. When the borrower fails to pay their mortgage for a period of time, the lender may begin the foreclosure process. However, an individual typically has a grace period in which to repay missed payments.
If the individual does not pay their mortgage by the end of the grace period, they may be reported to the credit bureau. This will result in a decline of their credit score and will appear on their credit history.
The individual will also receive a default notice and notification that the foreclosure process will begin. If an individual cannot make the required payments prior to the foreclosure process beginning, the court will take control of the borrower’s home and sell it in order to reimburse the lender. The lender will receive the remaining amount of the loan from the proceeds of the foreclosure sale.
A court also has the authority to impose a lien on the property. A lien placed on the property by the court is a judicial lien. These liens are difficult to challenge.
What Type of Documents and Questions Should I Bring to My Mortgages Attorney?
It is important to gather any documents related to the mortgage and compile a list of questions prior to a consultation. Documents that an individual should bring to their consultation include:
- Any documents pertaining to the actual mortgage;
- Documents showing the payment history on the mortgage;
- Any correspondence between the lending institution and the individual;
- Any documents pertaining to the foreclosure process, if applicable; and
- Any documents related to a mortgage lawsuit, if applicable.
An attorney will review these documents and determine what types of issues are arising in the individual’s particular case. There may be further documentation required that the attorney will need after reviewing the case initially.
It is important to compile a list of questions an individual has regarding their case prior to their consultation. Questions may include:
- Will the individual be able to keep their home?;
- What are the next steps?;
- Is there a possibility of negotiation with the lending company?; and
- Any other questions the individual may have.
The attorney will be aware these cases are complex and will be prepared to patiently answer any questions an individual may have regarding their case and/or the process. There is no such thing as a frivolous question when it comes to saving an individual’s home.
What Makes a Strong or Weak Mortgage Law Case?
There are many reasons why an individual may fall behind on their mortgage loan payments. Mortgage lawsuits are fairly common in the United States. As previously mentioned, these lawsuits can result in the loss of a property. Having an attorney is the foundation for a strong mortgage law case.
A home and/or property is often an individual’s most valuable asset. It is important to protect that asset by contacting an attorney as soon as possible when any mortgage dispute arises. The earlier the attorney becomes involved in the case, the better the chances of an individual keeping their home.
An attorney may be able to negotiate a resolution with the lending institution that an individual cannot. There may be extenuating circumstances that the attorney can point out and provide in order to show the lending institution that foreclosure is not necessary.
What Types of Mortgage Cases Benefit the Most from an Attorney’s Help?
All types of mortgage cases can benefit from an attorney’s help. An attorney will be more experienced with the process and knowledgeable about communicating with the lending institution.
If there is a lien on an individual’s property, the title to their property will be considered clouded. This will make it difficult to sell the property. Buyers often request a clean title when making a property purchase.
A clean title will be created when the lien holders on a property release those liens. As a borrower, it is extremely important to remove any liens on a property in order to be able to sell it in the future.
There are different ways in which a borrower can contest and/or remove a lien from their property, including:
- Paying off all loans;
- Filing bankruptcy; and/or
- Filing a lawsuit.
The simplest way to remove a lien is to pay off all lien holders. A borrower may also be able to negotiate with the lien holders. An attorney is an invaluable asset during negotiations.
An attorney may also be able to evaluate an individual’s financial situation and determine if bankruptcy is an option. Bankruptcy may wipe out the mortgage loan, but will cause the individual to lose their property, as the lender will still have the right to foreclose on the property.
If an invalid lien was placed on the property, an individual may file a lawsuit against the lien holder. These cases are best presented with the help of an attorney. If the court determines the lien is invalid, it will be removed from the property.
When Do I Need a Mortgage Law Attorney?
As noted above, mortgages and issues that arise from mortgages are very complex legal matters. If you are involved in a mortgage dispute, it is imperative you contact a mortgage lawyer. An attorney can review your case, advise you of the best course of action, and represent you during any court proceedings, if necessary.
A mortgage law attorney can also assist you in negotiations with the lending institution. Your home and your credit are on the line. The consequences of an unfavorable outcome can affect all areas of your life for years to come.