Foreclosure Mix Up Causes Borrower to Consider Bankruptcy

November 03, 2010

A San Antonio man profiled in a recent WOAI-TV segment has experienced a bizarre path to the foreclosure process. Roque De Leon claims that his original $35,000 mortgage, secured in 2002, multiplied tenfold when Chase purchased the mortgage from Washington Mutual in 2008 and somehow tacked a zero on the end of his account balance. "Chase started rejecting my $350/month payments, and demanded $2,000 per month," De Leon explained through a translating friend. Before the confusion had been cleared up, the bank initiated foreclosure proceedings and he was at risk of losing his home.

De Leon's brush with financial peril brings to mind an issue that is crossing the nation like wildfire. Judges have begun to dismiss foreclosure actions in unprecedented numbers after discovering discrepancies, missing data and other errors in mortgage company records. A wave of reports of "robo-review" of mortgage files by companies seeking foreclosure has inspired the attorneys general in all 50 states, including Texas, to investigate mortgage servicers' record-keeping practices.

A national moratorium on foreclosures is not likely, but the rhetoric has financial institutions deservedly on the defensive. "Banks blatantly broke the law, papering the courts with defective documents to railroad consumers into fast, possibly fraudulent foreclosures," Connecticut Attorney General Richard Blumenthal said in a recent statement. "At the best, banks engaged in careless negligence, at worst, outright fraud."

While a local TV investigation inspired Chase to postpone the foreclosure auction of Mr. De Leon's home, most citizens may need to consider aggressive legal action to fight for their interests. If you are convinced that the bank is foreclosing in error, a consultation with a debt relief lawyer can help you take immediate action. But people who are seeking to take control of their financial future should consider the full range of benefits available via the bankruptcy process.

The Automatic Stay: Halting Creditor Harassment, Repossession and Foreclosure

Consumer bankruptcy under Chapter 7 of the Bankruptcy Code provides immediate relief to petitioners in the form of an automatic stay of certain types of debt collection. Among the actions prohibited until the bankruptcy process is resolved are the filing or continuation of lawsuits, telephone calls and collection letters, garnishment, repossession, and foreclosure on an allegedly delinquent mortgage.

By putting all of your cards on the table with an experienced bankruptcy attorney, you can learn a great deal about legal options that you may not have considered -- even if you are delinquent in your mortgage payments. Taking charge of the process is the best way to achieve meaningful debt relief and peace of mind.

Article provided by Rosenbaum Law Offices
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