Wednesday, December 7, 2022

Can I Sue My Mortgage Company For Stress

When Denial Happens During The Mortgage Process

“Can I really sue my mortgage company for violating RESPA?”

One of the reasons its important to apply for a mortgage prequalification is that it can give you a view into whether your application will ultimately be accepted or denied. However, in rare instances when your situation changes drastically between a prequalification and the mortgage closing, its possible to be denied at closing. To help prevent that, keep in close contact with your lender throughout the process so they can help you avoid actions that can adversely affect your ability to get a mortgage.

Suing For Emotional Distress

Following an act of negligence, its relatively common knowledge that you can sue someone for physical injuries. However, a common question related to those same circumstances is, Can I sue someone for emotional distress?

Experiencing a serious accident can not only result in physical injuries but emotional suffering as well. Compared to physical injuries, emotional distress can be difficult to quantify. However, the damages and the impact on victims are still very real.

Suing for emotional distress allows a victim to recover some of these damages. Read on as we explore the legal ramifications of suing for emotional distress.

Why It Would Indeed Be Daring

The odds are stacked against you, especially if you are dealing with a large firm. You will be stressed throughout the entire case, but the firm but will be as cool as the proverbial cucumber, because it will turn the case over to its compliance division and/or lawyers, who are familiar with all the tricks of the trade, have available resources of all kinds and who know that the converse applies to you. Such cases are often complex, invariably very time consuming and truly draining on all one’s resources – financial, mental and physical.

The other side can and will run up massive legal fees, and if you back out part way you will owe them a frightening amount of money. The fees accruing on the other side are the real problem they are used as a strategic weapon. The theory is that judges are infallible and if you lose, you were in the wrong, deserve no damages and should, therefore, pay the costs of the other side.

It is also common for the other side to try and avoid the real issues and merits of the case from ever being discussed openly and fairly. Thus, the civil process itself gets misused bureaucratically, through various administrative tricks and processes, while the actual financial mismanagement is either not dealt with at all, or simply denied validity.

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When To Sue A Landlord

When you should sue your landlord depends on the reason you are suing. If you are suing because the landlord withheld your security deposit, then it makes sense to file the lawsuit after move out. If you are suing because the landlord refuses to perform repairs to make the unit habitable, then it makes sense to sue while you have an active lease.

If you sue while you are still living in the apartment, you do risk the landlord trying to retaliate against you.

However, many states have laws that prohibit landlords from performing an act of retaliation in response to a tenant taking a legally allowed action, such as taking the landlord to court.

  • Statute of Limitations: You must be aware that there is a statute of limitations for property damage on how much time after the incident you have to sue your landlord. Laws vary widely. In Louisiana, for example, you have as little as a year, while in Rhode Island, you have up to 10 years.

Types Of Mortgage Relief Scams

LoanSense

Here are some common warning signs of a mortgage relief scam:

  • Scammers will demand payment upfront, before you get any services. Thats illegal and a warning sign to avoid them.
  • Scammers may want you to pay only by cashiers check or wire transfer. Scammers like you to pay this way because its hard to get your money back.
  • Scammers may try to convince you to transfer the deed to your home to them. The deed is the legal document that proves who owns the home.

Scammers come up with different stories to pressure you into paying them. Knowing some of their come-ons can help you avoid them.

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Can I Sue My Mortgage Company For Stress

While possible, a lawsuit for emotional stress will generally be successful only in the most egregious of situations. This claim is often called negligent or intentional infliction of emotional stress. This means that the lender would have to negligently or intentionally bring a wrongful foreclosure that causes you emotional stress. Such a claim would be highly dependent on the facts and circumstances.

Other Things You Can Do Make Your Loan Process Go Faster

One of the first steps to getting qualified for a loan is having your credit checked. You can get ahead of this one by requesting a copy of your credit report and clearing up any discrepancies that could hurt your chances of getting approved.

Lenders will need to verify a full two years of employment history. If youve had several jobs in the last couple of years, this isnt an automatic deal-breaker, but it can cause delays if you dont have all of the details ready for your lender.

You can get ahead of the curve by having all of the contact info and dates available so your lender can conduct all of the necessary employment verifications.

There will always be some areas that are out of your control when it comes to getting a mortgage loan. Just knowing this fact can bring some peace of mind. But being proactive and staying ahead of the process can help ensure a faster and smoother closing.

Tim Lucas

Editor

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Qualifying Borrowers Prior To Issuing Pre

Any loan officer can easily qualify and issue a pre-approval for Home Buyers with the following credit and income profiles:

  • 760 FICO
  • never late with any payments
  • have an executed real estate purchase contract

The above type of homebuyer going through the mortgage process will normally not stress during mortgage process. However, not everyone has perfect credit, high credit scores, low debt to income ratios, and perfect credit payment history for many years.

Mortgage Assistance And Your Rights

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Scammers target desperate homeowners looking to avoid foreclosure and stay in their homes. These scammers promise theyll get changes to your loan so you can keep your home. But they want you to pay them an upfront fee before giving you any services or getting any results. Dont do it. Its illegal for a company to charge you upfront for promises to help you get relief on paying your mortgage. If youre working with a lawyer, make sure theyre licensed in the state where you live and are reputable.

If a company offering help with your mortgage debt doesn’t follow these rules, it could be trying to scam you. Heres what to know about your rights.

  • You don’t have to pay any money until the company delivers the results you want. The Mortgage Assistance Relief Services Rule says it’s illegal for a company to charge you a penny until it’s given you a written offer for a loan modification or other relief from your lender and you accept the offer.
  • The company must disclose key information to you. If you decide to accept your lenders offer, the company must
  • give you a document from your lender showing the changes to your loan
  • clearly tell you the total fee the company will charge you for its services
  • warn you that you could lose your home and damage your credit if you stop paying your mortgage
  • The companys ads and telemarketing pitches must clearly say
  • theyre not associated with the government, and their services havent been approved by the government or your lender
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    Avoiding Stress During Mortgage Process: Teamwork

    The first and most important thing in the home loan application process is for the loan originator to thoroughly qualify the mortgage loan application prior to qualifying borrowers. There are many lives at stake on a home purchase. The buyers, the sellers, the buyers attorneys, the sellers attorneys, the buyers realtors, the sellers realtors, the title company, the appraiser, the loan processor, the loan underwriter. A less than perfect pre-qualification and pre-approval will not just affect the lives of these folks but waste everyones time and create stress during the mortgage process for everyone, especially the home buyer. The home buyer will be making plans in moving, hiring movers, changing schools for their children. So will the home sellers.

    There are so many different case scenarios with every loan application. This holds true especially for borrowers who had prior bad credit issues and higher debt to income ratios. If a loan originator has questions or foresees a potential hurdle in the application, then he or she should have the underwriting department review the file prior to issuing the pre-qualification. All pre-approvals should be only issued if the loan officer feels 100% confident the loan will not just close but will close on time.

    Understand Mortgage Process Is Way To Avoid Stress During The Mortgage Process

    One way I try to help my borrowers avoid stress during the mortgage process is by explaining the mortgage application and mortgage approval process when they first call me and we have our first phone interview. I explain that the pre-approval stageis the most important part of the mortgage application and approval process. Most last-minute mortgage denials are due to the mortgage loan officer issuing a sloppy quick pre-approval letter. The loan officer does not review the two years of tax returns. They do not look at unreimbursed expenses and qualify the income improperly. Do not thoroughly review the borrowers credit report.

    are not allowed during the mortgage process. Loan officers should never issue a pre-approval letter if there are non-exempt credit disputes on the credit report. A pre-approval with outstanding credit disputes is null and void. Non-exempt credit disputes need to be removed in order for the mortgage process to start.

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    Should You Sue Your Mortgage Lender

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    If you’re like many homeowners fighting foreclosure, you may have wondered if you can sue your mortgage lender. After all, it’s been proven that the banks have lied, forged documents, deceived people in desperate need of help, and broken countless laws. It’s happened with loan origination, servicing, and in the foreclosure process. If you can’t sue for that, then what in the world can you sue for?

    Technically speaking, you can sue. You can pretty much sue anyone for anything. All you need is the money to pay the attorney’s fees. The question is whether you should. Is it worth the considerable time, effort, and expense? Every situation is different, so the answer will have to be decided on a case-by-case basis, but there are some things everyone should look into before they decide to file a lawsuit against their mortgage lender.

    Has Someone Already Sued Your Lender

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    Before you decide to sue, look into whether or not somebody’s already done it for you. The National Mortgage Settlement of 2012 is a settlement with most states, the federal government, and the largest banks to settle numerous lawsuits related to mortgage servicing misconduct. The settlement requires the banks to provide $26 billion in relief to distressed homeowners through refinancing, loan modifications, and cash payments. A lot of the misconduct is foreclosure related and includes robosigning documents, not following proper foreclosure procedures, and dual-tracking, which is leading a borrower to believe approval for a loan modification is coming while pursuing foreclosure.

    The deadline to make a claim for a cash payout through the National Mortgage Settlement has passed, but exceptions may be possible for eligible borrowers. Visit nationalmortgagesettlement.com for information.

    Smaller lawsuits have been settled as well. You may have gotten a card in the mail letting you know you’re eligible to claim a share of a cash settlement with your bank. The settlement often comes as a result of a class action lawsuit filed against the bank for some kind of misconduct, such as violating credit reporting rules. Unfortunately, each homeowner’s share of the settlement is often only a couple hundred dollars or less.

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    Why Does It Take So Long To Close My Loan

    Generally, there isnt just one answer to why your mortgage application is taking longer than your neighbors. Everyones situation is different.

    There are a number of common explanations that can cause a longer time to process your application.

  • New government-imposed mortgage rules. In 2014, new regulations were set in place by the Consumer Financial Protection Bureau . These new rules significantly affected the way mortgage lenders originate home loans. It takes lenders longer to document and verify a homeowners ability to repay the loan.
  • Appraisal standards. Pre-housing crisis, mortgage lenders had much more flexibility when it came to getting an appraisal completed. But appraisal standards changed significantly on a number of levels. Nowadays, appraisal management companies are required to follow stringent guidelines. This further delays an already time-consuming process.
  • Title-related delays. Many homeowners dont know everything that goes into obtaining a mortgage. Procedures such as making sure theres a clear title to the property are important aspects of getting your loan closed. If there are any judgments or liens on the property, these need to be cleared up before you can close. Unfortunately, this isnt always a quick fix.
  • Is Suing The Best Option

    While suing is one option, it may not always be the best option. If you get into the habit of suing your landlords, it may make it harder for you to find an apartment in the future. You dont want to be known as the tenant who sues over everything.

    There will be legitimate circumstances where a lawsuit is the only option, such as a serious injury caused by a landlords complete neglect. In other, less serious, situations, a lawsuit may be a waste of your time. If your landlord is withholding $25 from your security deposit and it costs $50 to file a lawsuit in small claims court, you have to determine if the hassle of a lawsuit for such a small sum is really worth your time.

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    How To Sue For Emotional Distress

    How can you sue someone for distress? Suing for emotional damages involve the following steps:

  • Document your distress: You must document your medical records, work records, personal journal, etc. to back up your case. You could even have an electronic health tracker monitoring your heart rate and sleeping habits. The better you document your distress, the easier itll be to recover damages.
  • Discuss with an attorney: Discuss the case with your attorney. Your attorney will review your documents and help you prepare for legal action.
  • File a lawsuit: With the help of your attorney, youll file an emotional distress lawsuit against the defendant.
  • Pre-trial preparations: Once the defendant is served, the discovery process where the exchange of information between the two parties will occur. The two parties may work out a settlement offer to avoid trial. Your attorney will advise whether you should accept the settlement deal.
  • Trial & Settlement: The courts will hear arguments and evidence for both sides and make a decision accordingly.
  • Suing someone for emotional distress can be a long and arduous journey. Equip yourself with how the process works and consult with an attorney to give yourself the best chances of recovering your damages.

    Compliance With Modified Loan Terms

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    Mortgages are binding contracts. Just like any other contract, they can be modified by a writing and sometimes orally. If you and your lender have modified your mortgage agreement, the lender must comply with the terms of the loan as modified. A foreclosure based on the original terms will be invalid. While it is generally very difficult to modify the terms of a mortgage orally, that is to say without a formal writing, it is possible in certain situations.

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    Avoiding Stress During Mortgage Process: Will Bad Credit Affect Mortgage Process

    Not everybody had perfect credit all their life. Many people got hurt from theGreat Recession And Real Estate Meltdown of 2008 . Millions of hard-working Americans lost their jobs, lost their businesses, filed for bankruptcy, had foreclosures. A large percentage of Americans lost all of their life savings. Many who retired were forced out of retirement and sought other jobs after the real estate meltdown.

    Millions of homeowners and property owners who owned investment properties with substantial equity in their properties lost it all, literally overnight. Many Americans who had professional careers making over six figures a year found themselves unemployed and not marketable in the job market. They had to settle for jobs at a fraction of the income they once made. The Great Recession of 2008 wiped out whole industries.

    Suing A Bank For Negligence

    Negligence or professional malpractice is one of the many reasons to go after a bank. This may come in the form of a banking institution selling you a product that resulted in you going bankrupt. When this happens, you may not have the funds to hire a lawyer and pay exorbitant fees. We recommend a few risk mitigation steps on how to sue a bank for professional malpractice without having to add to your financial problems:

  • Step 1: Consider third-party litigation funding. The funder can pay for all the expenses incurred in the lawsuit and gets a percentage of the awarded damages if your case wins.
  • Step 2: Draft a conditional fee agreement . A CFA lets you avoid hefty costs such as fixed lawyers fees or hourly rate agreements. Instead, the lawyer will only be paid if the case wins.
  • Step 3: Consider after the event insurance. This type of insurance is purchased after an event has resulted in a dispute, in contrast to health insurance, which is purchased beforehand. ATE insurance can protect you from the damages in case you lose in court. However, its important to note that in case you win in court, a portion of your reward will be needed to pay for the premium.
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