Mortgage Servicer Cited in Foreclosure Lawsuit

Real estate experts have always advised troubled homeowners to immediately contact their lenders if they are having problems with mortgage payments. This is actually an effective way of avoiding foreclosure. Unfortunately, a couple did not expect that they will experience a problem with their mortgage servicer and caused them to lose their Boston home to foreclosure. For this reason, the couple decided to file a lawsuit.

According to the lawsuit, the servicer, Washington Mutual was unresponsive to the attempts of the couple to communicate with them and negotiate a new mortgage payment term in order for them to avoid foreclosure. The couple is seeking damages for the effect of the foreclosure entry on their credit record. In addition, they are also hoping for the reversal of the eviction as well as the foreclosure.

Sadly, this is not the only case as more homeowners have come forward with the same unfortunate experience. Loan servicers actually played a major role in the mortgage mess that resulted to millions of homes entering some stage of foreclosure. Many of these servicing firms failed to handle loan modifications properly, causing borrowers to lose their homes.

In the first place, many loan servicers were engaged in predatory lending practices during the last housing boom that allowed homeowners to take out mortgages which they could not afford in the first place.

Borrowers are encouraged to negotiate with the lenders if they are serious about stopping foreclosure. But if the loan servicer or lender is not working with them, it will indeed be difficult. Many state governments have already passed legislation that required lenders to work with the borrowers and look for an alternative to foreclosure before filing a Notice of Default.

There are also laws that prohibit lenders from foreclosing without a 30-day notice. These laws serve as protection for troubled homeowners so that abusive lenders and loan servicers will not be able to take advantage of their situation.

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