What Do Mortgage Lawyers Do?
A mortgage lawyer or mortgage attorney is a lawyer who specializes in mortgages and any issues that arise from mortgages. A mortgage lawyer is knowledgeable in all areas of mortgages and can assist clients in obtaining a mortgage or assisting with mortgage lender disputes.
Purchasing a home is usually the biggest investment of a person’s lifetime. Sometimes, however, errors may occur during the mortgage process. A mortgage lawyer can explain an individual’s rights and assist with any issues that may arise out of the purchase process.
What Is a Mortgage?
A mortgage is a loan that helps an individual pay for something, such as a home, using payments over a period of time. Two important documents in a mortgage transaction are a promissory note and a deed of trust.
A promissory note is a legal contract. The promissory note usually states that one party promises to repay a specific amount of money to the lender, often a bank, in a certain time frame and requires the borrower to pay back the loan even if they sell the property.
The deed of trust acts as a lien on the property or home. In the event the loan is not repaid as agreed, the lender may force the borrower to repay the loan by selling the property. The deed of trust ensures the lender will be repaid for their loan.
A mortgage lender, or mortgagee, provides a loan to a borrower, or mortgagor, to purchase a home or property. In most cases, a mortgage lender is a bank or mortgage company. Some individuals may be eligible to borrow from government-sponsored lenders such as the Federal Housing Administration (FHA), United States Department of Housing and Development (HUD), or the United States Department of Veterans Affairs (VA). Once the mortgagor has satisfied the loan, or paid off the home or property, the title to the home or property transfers to the mortgagor.
Other parties to a mortgage may include a mortgage broker and/or a real estate agent. A mortgage broker assists the borrower in finding the best loan. A real estate agent helps the borrower find a home or property to purchase and may also work with the mortgage lender and/or broker helping the mortgagor finance their purchase. Since there are so many parties involved and the purchase is so important, disputes can arise.
What are Some Common Disputes and Violations Involved with Mortgages?
There are many legal issues that may arise during or after a mortgage. These usually include a breach of the mortgage loan agreement. A mortgage loan agreement is a contract, meaning all breach of contract remedies are available if any party breaches. Examples of common issues that may arise from a mortgage are discussed below.
Foreclosureis usually the most common legal issue that arises between a mortgagor and mortgagee. This usually occurs when the mortgagor is behind on payments or fails to make them entirely. In these cases, the mortgagee will foreclose on the home or property and sell the home or property at a public auction to satisfy the mortgagor’s debt.
Mortgage fraudoccurs when information provided on a load application is false or incorrect. For example, a potential borrower may lie about income to obtain the loan. In these cases, the borrower will be charged with the crime of mortgage fraud. Mortgage lenders may also be charged with the crime of mortgage fraud in cases where mortgage contracts are forged. If a lender commits mortgage fraud, the borrower may use that as a legal defense to a foreclosure.
Predatory lendingoccurs when a mortgage lender targets a susceptible buyer, such as a first-time buyer or elderly buyer. In these cases, the lender will offer these individuals loans with absurdly high interest rates or unreasonable loan terms knowing that they are either too inexperienced to know or cannot obtain loans elsewhere.
Discriminationmay also occur in the mortgage process. Mortgage lenders cannot discriminate against a borrower because of their race, gender, religion, national origin or other federally protected characteristic as defined in the Fair Housing Act and Equal Credit Opportunity Act. These federal acts protect a borrower from discrimination when seeking a mortgage or loan.
Is it Important to Have a Mortgage Lawyer?
Yes, since disputes can arise before a mortgage is even obtained, it is important to have a mortgage lawyer assisting during the entire process.Mortgages often consume an individual’s savings and the majority of their income will be tied up in paying for their home or property.
A mortgage lawyer will be aware of normal loan terms and be on the lookout for predatory lending and discrmination. The mortgage process should be transparent, and any questions a borrower has about their loan or terms should be answered by the lender.
Should You Hire a Mortgage Lawyer for Assistance with Your Property?
Yes, mortgages can be complex transactions with many parties involved. Amortgage lawyer can assist you in all aspects of a home or property purchase and can assist if any disputes arise out of the mortgage.
An experienced mortgage lawyer can help you review your home purchase contract, contract negotiations for the purchase, and loan documents. A mortgage lawyer can also file a claim for you should any issues arise out of your mortgage and represent you in any proceedings that may arise from the mortgage dispute.