Although a real estate attorney is usually called upon in the front-end of a deal, a recent story suggests that a legal professional could also provide counsel to residential or commercial owners facing foreclosure.
Specifically, the Federal Reserve recently issued a report indicating that around 83 percent of borrowers across the country have been compensated for some form of financial injury, most commonly in the form of improper or premature foreclosure proceedings. As of April 2014, borrowers had cashed payment checks totaling around $3.1 billion.
The payments are from a settlement program funded by 13 banks, which came about as an alternative to an independent review of alleged bank misconduct in instituting home foreclosures. According to the Federal Reserve’s data, the independent review that began in April 2011 indicated a 4.6 aggregate error rate before the settlement was reached. Yet variances among individual banks privy to the settlement were notable. For example, GMAC Mortgage’s error rate of 11.4 percent is considerably higher than the 3.3 percent rate attributed to SunTrust Banks, Inc. Not enough pre-settlement data was compiled to produce preliminary error rates for some of the other banks participating in the settlement, such as Goldman Sachs Group, Inc. and Morgan Stanley.
When facing intimidating correspondence from lenders, a property owner may be uncertain about his or her rights. From refinancing and paying off an existing loan, to modifying debt to obtain more favorable terms, a real estate attorney can work with owners to obtain their personal or business objectives. If foreclosure proceedings have been prematurely initiated, an attorney can also provide strong advocacy in that context.
Source: The Wall Street Journal, “Fed Defends Its Approach to Punishing Banks for Improper Foreclosures,” Ryan Tracy, July 7, 2014