Here is a CNN link to an interesting article about home foreclosure fraud: See this link. Fraud was prevalent in home mortgages obtained prior to the economy crash of 2008 and can be found in mortgages that have used the Mortgage Electronic Registration System or MERS. MERS in many cases failed to properly document the chain of title in home loans that were transferred around between services and lenders. Often times robo signers or other fraudulent documents were filed in order to transfer a home loan from one place to another. Most homeowners who accuse their bank of fraud won’t get a free home but if you can make your case you may be able to prevent a home foreclosure, especially if your bank cannot find your original mortgage tile.
Suing your bank for mortgage fraud in my opinion should be used as a last resort if you have already looked into obtaining a loan modification, foreclosure fairness mediation and bankruptcy. Litigation can be expensive and suing your bank is very time consuming with several motions having to be filed and defended as well as discovery and possible depositions. Many firms will require an upfront retainer to take on your case which can range from $7,000 -$10,000 in many cases. Many of these cases are filed with the hope of avoiding a foreclosure and being able to work out a loan modification or forgiveness of delinquent debt arrears owed. If you do sue your bank to avoid a foreclosure you should keep in mind that you will probably be living in your home for free while waiting for the court to make a ruling so even after paying your lawyer, you would still come out ahead if you can stop the foreclosure.