MORTGAGE BALANCE GOES THROUGH THE ROOF ANN’S STORY


HISTORY OF MORTGAGE PROBLEMS

Before she came in to see us, Ann had a history of mortgage problems. She had three prior foreclosures, ending in three loan modifications. Each time she was able to bail herself out by paying large chunks of cash to her bank, placating and convincing it to give her another chance.


BIG QUESTIONS

Now Ann is in yet another foreclosure. Over the years, her loan balance has more than doubled, going from the original amount of $89,000 to up over $190,000, a $100,000 increase. Even so, her home is worth more than the current balance, so she has equity and wants to fight to save the home. Big questions in the case are whether the bank properly credited Ann’s payments and whether all its charges were appropriate. In other words, “Is the balance claimed legitimate?”


NOT THE FIRST TIME

We told Ann that if it were discovered that her bank (or, more properly her loan servicer), was overcharging her it wouldn’t be the first time that this kind of misconduct occurred. In fact, the problem was so bad that in 2014 the federal government instituted regulations specifically addressing it. It is illegal for a bank not to properly credit a borrower’s payments or to add on false charges. Onerous penalties can be assessed against a bank which violates these rules. We will need to have an accountant review the records to determine whether the law was violated in Ann’s case. If it was, she will have a claim for the damages she suffered due to the bank’s illegal conduct.



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Kathryn Eyster contributed to this article.