Don’t postpone getting legal advice until it’s too late
Simply being in default on a mortgage does not automatically entitle a bank or other lender to foreclose real estate. Very strict consumer protection laws and procedures exist that must be followed in such situations — to protect you.
For example, many consumer loans are subject to the federal Truth-in-Lending Act (TILA). If the terms of the loan were not properly disclosed, or if you were not given proper notice of your rights, you may have substantial claims for damages that could reduce or offset the outstanding loan balance. For some mortgages that are not used to purchase property — such re-finances or home equity loans — the failure of the lender to comply with TILA could actually permit you to rescind the entire loan under certain circumstances.
As a result of the mortgage and foreclosure crisis, new laws have gone into effect which further strengthen consumer protections, and there are new programs which provide certain homeowners with options for modifying mortgages.
It is extremely important to consult a qualified attorney as soon as you’ve been notified of the possibility of foreclosure. Although there may be available remedies after foreclosure, these are much more difficult to pursue and may not be adequate for recovering your home.