Why Did My Mortgage Company Lie To Me About Postponing My Foreclosure?

When lawyers sue mortgage companies for postponing a foreclosure without notice to the homeowner, the company and their lawyers always claim that they have no reason to lie to the homeowner. In this article we will discuss some of the reasons why mortgage companies continue to do this and then act like there is no benefit to them for lying to homeowners about the postponement of their foreclosure.

The truth is that homeowners have more options before a foreclosure than after it goes through, so mortgage companies strongly dislike for foreclosures to take any longer than absolutely necessary. For example, before a foreclosure, you as a homeowner can cure the default. It won't be easy, but it may be possible for you to cull various assets and bring your account up to date and stop the foreclosure. Another viable option is to try to obtain a loan modification. We rarely see them work, but they can certainly be worth a try to save your home.

You could also file a bankruptcy petition which will stop the foreclosure because of an "automatic stay." We generally don't recommend bankruptcy as an option to counteract foreclosure, but it's still an option.

However, after it goes through, you won't be able to do any of these things...which is exactly what they want. You no longer have the right to bring your account up to date, qualify for a loan modification (since there's no longer a mortgage to modify), or file for bankruptcy.

Mortgage companies make a lot more money when you are in default and when they foreclose on you than if you bring your account current and no longer have the risk of foreclosure. When you cure a default, the company misses out on a massive amount of fees and profits that it makes as long as you stay in default and are pushed into foreclosure.

Suing the company for fraud is one way to fight back. When we sue for fraud we are pointing out that the mortgage company's fraud took way the homeowner's options they are entitled to before a foreclosure. Typically, this type of fraud involves the company telling the homeowner that their foreclosure will be postponed if they pay a certain sum of money; submit a loan modification packet, etc. When you, the homeowner, do this, you are trusting that the company will actually hold up their end of the bargain. It comes as a huge shock when you find out a few days later that the foreclosure has gone through and the mortgage company lied about postponement and you no longer have pre-foreclosure options.

Mortgage companies all over the country routinely lie to homeowners, deliberately participate in methodical fraud, and then push homeowners into an illegal foreclosure where they no longer have access to options to prevent it.