Given the current state of affairs with regard to lenders, mortgagees, loan servicing agencies, collection agencies and the like with respect to home or business mortgages, it is frequently impossible to determine with whom you are speaking, what authority they have and what remedies they are actually capable of agreeing to in a home or business loan dispute. Indeed, frequently the actual owner of the debt is so lost in cybernetic space on Wall Street that a signature cannot even be produced to consummate a valid foreclosure.

I frequently speak with people whose loans have been overcharged or convoluted under the guise of late payments and fees, penalty interest, attorney’s fees, reinstatement fees and the like when in fact payments are current or the delay in receipt is due to the bookkeeping errors or computer generated nightmares which frequently exist at mortgage companies and/or servicing lenders. Clients are lost in the backlog of understaffed and overworked mortgage companies who simply make entries that are either late, erroneous, unjustified or not representative of the actual payments that have been submitted to them by the borrowers/homeowners.

The lenders then, usually through computer generated directives, retain attorneys and foreclose or simply foreclose through the existing trustees or substitute trustees when, in point of fact, the loan is current or if it is not current, the disputed sums claimed or their timeliness it is not the fault of the borrower.

It is critical that a homeowner in this situation make an immediate effort to get a court order enjoining the foreclosure before the foreclosure occurs. There are a myriad of legal rights, remedies, defenses and claims that are either lost or seriously watered down when asserted after the foreclosure sale occurs. It is far easier to put the dry spaghetti in stacks and separate it as appropriate than to try to unravel the spaghetti once it has been cooked. Lenders who proceed with foreclosure are by deed granted legal title, or title is passed to a third party purchaser by virtue of the loan documents and the foreclosure sale. This makes it more difficult for an attorney to enforce the rights of the borrower given the claims, expense and costs of the third parties, tying your lawyer’s hands to some degree in what he is capable of doing for you to save your home or business property.

A temporary restraining order injunction upon proper affidavit with sufficient facts is in most cases granted allowing a home or business owner to enforce his claims against the lender or mortgage company while retaining title to the property during the litigation process which can take anywhere from thirty days to three years depending on the court, the county and the jurisdiction.

It is not uncommon for the court to order the borrower to pay all payments into the court registry or an escrow fund where a true and honest accounting of what is being paid while the case is pending can be applied to the final judgment of the court. If the borrower/homeowner’s case has merit and the lender is in breach, state law permits the payment of attorney’s fees in addition to the claims for fees which are ordinarily authorized in form loan documents which puts added pressure on the lender/mortgagee to come to the table and settle the matter based on the actual facts of the case. However, these efforts are hampered greatly if the foreclosure has already occurred. Remember also that a lawyer needs, depending on the court and jurisdiction, enough time in advance of the foreclosure sale date to prepare a petition, temporary restraining order, and request for injunctive relief and/or claim for damages as the case may be in order to properly enforce the rights of the client.

Sadly enough, it is not uncommon for the first words of the client to be “They foreclosed on my house and all my payments are current, what are we going to do now?” The regrettable answer is, we are going to have to set aside the foreclosure and reverse all the legal title convoluted actions which have occurred by virtue of the Trustee Sale, in addition to making a legal effort to reinstate the loan. In most cases this is far more expensive to the client in attorney’s fees, time and consternation than simply preventing the sale in the first place by injunction.