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Veteran Sues Bank Over Foreclosure

While fighting foreclosure to stay in his home, a California veteran sues bank over foreclosure citing dual tracking by Chase was illegal. Foreclosure lawsuits by banks have forced homeowners out of homes across the country. While many people ignore the foreclosure paperwork and let the foreclosure happen, others fight the foreclosure. 

Eric Lanigan and Roddy Lanigan of Lanigan and Lanigan urge all homeowners to contact an attorney immediately after a foreclosure notice. Do not delay because your options will lessen. 

There are many options including a financially viable foreclosure defense program so that you may fight the foreclosure. In addition, there are programs available to homeowners to not only keep the home but to also get the payments lowered or provide funds if a move is truly the best decision for the homeowner. 

There may be improprieties in the foreclosure where the bank or lender may have done something illegal in the foreclosure process, or in the foreclosure proceedings. Many banks are being sued and have been caught in a wide array of illegalities. 

California Veteran Sues Bank Over Foreclosure

A 10-year veteran named Tom McDivitt is suing JP Morgan Chase who is alleged to have illegally foreclosed on the home although McDivitt was involved in the Home Affordable Mortgage Program.

McDivitt was using , a government program created to help homeowners get affordable refinancing completed on homes. McDivitt fell upon hard times when his wife became ill and they were in debt enough to have to file bankruptcy.

HAMP provides homeowners with assistance to try to keep their home through a reduced monthly mortgage and various aide to help sustain ownership.

A 2012 California law was created to help struggling homeowners remain in their homes when banks tried to foreclose on properties even when owners had reached the point of getting help. Some would fight the foreclosure with a lawyer, others would try government help to save their homes. The goal of either option was to fight the foreclosure. 

What is Dual Tracking?

A California law was created stating that banks cannot foreclose on homeowners fighting foreclosure if they were either in court fighting foreclosure or using a government program to get financial relief on the mortgage–or both. 

The Consumer Financial Protection Bureau helped to create the rule in 2012 when dual-tracking was common. Several years into the mortgage crisis the CFPB created Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Under the Dodd-Frank Act, a bank cannot initiate a foreclosure for 120 days after a homeowner becomes delinquent. The lender cannot begin the foreclosure process if a loss mitigation application is pending.

Banks were doing what was called dual-tracking: starting foreclosure proceedings on the home AND “allowing” homeowners to believe that refinancing opportunities were moving forward.  

Banks were then foreclosing on homeowners who were involved in HAMP, HAFA, or a foreclosure lawsuit and refinancing and talking earnestly with the bank to get monthly mortgage payments reduced. 

McDivitt Alleges Dual Tracking

The lawsuit alleges that McDivitt contacted JP Morgan Chase to let them know that they were involved in the HAMP program. The attorney for the McDivitts said that the bank foreclosed on the home 11 days after McDivit contacted the bank which in California was made illegal. 

McDivitt began to pursue the lawsuit against Chase after seeing a story on the news about Chase being accused of Dual Tracking.  

The attorney also said that the McDivitts were paying the HAMP payments on time each month they were involved with the program. 

McDivitt said that he got a notice put on the door telling him that a management company had taken over the home and that he had 30 days to leave the premises. 

The McDivitts are asking JP Morgan Chase for a rescission of the foreclosure action that would return the home and allow the family to continue to make the payments that were structured through HAMP.  

There Are Many Government Programs for Homeowners

HAMP is just one of many options that homeowners may qualify for through the government homeowner programs. There are several home loan options through HAMP including:

  • Lowered interest rates
  • Options if you have to relocate for work
  • Forbearance 
  • Deferment for certain amount of time 
  • Refinance for a lowered mortgage payment

There are several government home assistance programs created to help keep desperate homeowners afloat and owning a home through the Making Home Affordable program

1. The Affordable Foreclosure Alternatives Program (HAFA) which allows you to transition out of your home and avoid foreclosure with $3,000 in relocation assistance.

2. The Home Affordable Unemployment Program (UP) where mortgage payments may be reduced to 31 percent of your income or suspended for 12+ months

3. The Hardest Hit Fund which is a program to assist homeowners in the hardest hit states. This fund also provides funds to stabilize and rebuild cities so that they can begin to regain home values in hard hit areas.

  • There is mortgage payment assistance for unemployed or underemployed homeowners
  • Principal reductions on the total amount of money owed
  • Funding to pay off second mortgages
  • Relocation funds if someone is moving

4. There are Veteran’s programs, there are programs for FHA loan holders, USDA and VA loan holders through the USDA’s Special Loan Servicing program

In this plan homeowners lower their monthly mortgage payment to no more than 31 percent of their verified wages. 

Act Immediately to Increase Your Options as a Homeowner

The key to keeping your home is leaving your options open to the many opportunities that have been created to help homeowners stay in their homes. That means that time is of the essence and you need to get to an attorney to review your paperwork to help you decide what your best options are.

The options close when you wait. As always, the Lanigans encourage everyone that gets a foreclosure notice to call an attorney to fight the foreclosure. The government programs will help to keep you in your home. 

The review of loan documentation will help to fight the foreclosure and uncover any wrongdoings by the banks. 

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