2021-09-19

Affectphobia

All about delay foreclosure

How to Prove Wrongful Foreclosure

how to prove wrongful foreclosure

Foreclosure is a difficult, trying process to suffer through. It is even worse when a lender forecloses without following the proper legal requirements. Wrongful foreclosure refers to when a lender initiates foreclosure proceedings without good legal cause to do so. 

For example, a lender may begin negotiations with a homeowner and agree on a payment plan with the homeowner and then continues to foreclose on the homeowner’s property anyway. Lenders may also begin the foreclosure process without the necessary documentation to show that foreclosure is proper. Regardless of the way a lender wrongfully forecloses on a property, the lender’s actions harm the homeowner and such misleading actions are types of illegal foreclosures.

Why Do Wrongful Foreclosures Occur?

Often, lenders will state that wrongful foreclosures are the result of miscommunications between the homeowner and the company. Sometimes wrongful foreclosures occur because lenders act in a predatory, unscrupulous manner. 

For example, some lenders have wrongfully begun the foreclosure process knowing that a homeowner was current on all payments and knowing that the lender had no right to foreclose. Wrongful foreclosures occur for both intentional and unintentional bad lending behaviors, including:

  • Bad calculations on the lenders part;
  • Mismanagement of loan information;
  • Failure to provide proper notice;
  • Poor communication and poor business management;
  • Failure to adhere to a loan modification agreement
  • Bad loan documents and poorly drafted agreements;
  • Inaccurate or deceitful credit practices;
  • Incorrect tax accounts
  • Unfair and predatory business practices; 
  • And many other reasons, too.

Homeowner’s who experience wrongful foreclosure have a right to compensation regardless of whether the wrongful foreclosure is the result of inaccurate loan documents or the lender’s intentional bad actions. If you believe that your lender wrongfully began the foreclosure process for any reason, experienced attorneys will help you determine what rights you may have to compensation.

What is a Wrongful Foreclosure Action?

A wrongful foreclosure action is when a homeowner sues his or her mortgage lender for wrongfully initiating foreclosure proceedings without proper legal cause to do so. When lenders wrongfully foreclose on a home, a homeowner can sue the lender for the damages caused by the wrongful foreclosure.

At the end of the day, lenders most often have the upper hand in foreclosure proceedings, meaning that lenders have the money and power to make homeowners work hard to save their homes during the foreclosure defense. So, when lenders wrongfully foreclose on someone’s home, they deserve to pay homeowners for mistakenly or wrongfully foreclosing on a property. Homeowners who experience wrongful foreclosure also deserve to be compensated for the financial and emotional hardship experienced because of the wrongful foreclosure. 

Wrongful Foreclosure Statute of Limitations

In New York, anyone who believes they have experienced a wrongful foreclosure needs to act sooner rather than later. The wrongful foreclosure statute of limitations in New York is six years, but the longer you wait to file the more difficult it may be for your attorney to collect the necessary evidence to prove your case. Also, the longer you wait, the longer it will take to be compensated for any wrongs you may have suffered. 

Proving Wrongful Foreclosure

There are four basic elements of a wrongful foreclosure lawsuit:

  1. The lender owed the homeowner a duty to act in good faith;
  2. The lender breached that duty (negligently or intentionally)
  3. The breach of that duty caused the homeowner injuries;
  4. Damage was suffered.

Essentially, to prove that you have suffered a wrongful foreclosure, you must show that your lender acted wrongfully in the foreclosure process, and that you suffered some type of monetary and/or emotional damages as a result.

Should You Fight After You Have Been Wronged?

You may be thinking, “Is it really worth suing for wrongful foreclosure?” If you genuinely believe that your lender did not act in good faith during the foreclosure process, filing a wrongful foreclosure lawsuit can help you recover for the hardships you suffered during the foreclosure process. The decision to file a wrongful foreclosure lawsuit is always up to you. 

Attorneys can help you determine whether wrongful foreclosure is right for you, and want to offer you a free consultation so you can share your concerns with us and we can show you all the options you may have. Regarding what a wrongful foreclosure lawsuit may do for you, know that victims of wrongful foreclosure typically can sue for the following: 

Compensation for wrongful foreclosure can include:

  • Compensation for the lost property value;
  • Compensations for the damage to the homeowner’s credit score;
  • Compensation for the emotional distress the foreclosure caused;
  • Compensation for the expenses of moving and finding a new place to live, 
  • And even punitive damages are proper for wrongful foreclosures when lenders act fraudulently or in a vicious manner. 

How Wrongful Foreclosure Damages Your Credit Score

Any foreclosure will impact your credit score negatively, but when the foreclosure is wrongful it is unnecessarily damaging your credit score because of your lender’s bad actions. For those with a high credit score, foreclosure can result in a credit score drop of 140 to 160 points. 

For those with lower scores, the drop in credit score may be closer to 85 to 105 points. Regardless of how much your credit score may have dropped, if it dropped because of your lenders bad actions in the foreclosure process, you have been wronged. 

Wrongful Foreclosure Settlement Amounts

Wrongful foreclosure settlement amounts vary depending on the amount of damages the homeowner may have suffered. Some wrongful foreclosure settlements may be in the hundreds of thousand and even millions of dollars range. Regardless of the amount, lenders who act in bad faith deserve to pay for their bad behavior. Likewise, homeowners deserve compensation when they suffer because of bad lending practices. If you live in New York and you have been the victim of a wrongful foreclosure, we are here for you. 

As experienced foreclosure attorneys, we know the pain you have suffered and we want to fight for your right to compensation. We have helped many others successfully file wrongful foreclosure complaints against lenders who engage in unlawful foreclosure cases. We want to assist you as well. Contact your local foreclosure attorney to learn how to prove a wrongful foreclosure case and what options you have.