foreclosure

[mommyangel]

At our local bank where we have a mortage on our home-has started foreclosure on our home-we have a autmatic withdrawel from our checking account to withdraw our house payment. we thought they were removing the montly payements until we were served with papers --we have asked why the payments were not deducated -no answer- we have even taken the five months payments in a casheirs check to then -they refuse to take the money, unless we also pay 1,800 to their lawyer for his fee of fileing legal action against us.
But here is my question id we signed a contract giving the bank permission to debit our checking account every month for the payment--and they don't but we are being forced out of our home due to non payement --are we at fault?-yes we know we should have noticed sooner that they were not being deducted ,but we did't --we assumed too much--are we legally wrong or is the bank wrong for not debiting our checking account for the money?

 

[HomeGuru]

<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by mommyangel:
At our local bank where we have a mortage on our home-has started foreclosure on our home-we have a autmatic withdrawel from our checking account to withdraw our house payment. we thought they were removing the montly payements until we were served with papers --we have asked why the payments were not deducated -no answer- we have even taken the five months payments in a casheirs check to then -they refuse to take the money, unless we also pay 1,800 to their lawyer for his fee of fileing legal action against us.
But here is my question id we signed a contract giving the bank permission to debit our checking account every month for the payment--and they don't but we are being forced out of our home due to non payement --are we at fault?-yes we know we should have noticed sooner that they were not being deducted ,but we did't --we assumed too much--are we legally wrong or is the bank wrong for not debiting our checking account for the money?<HR></BLOCKQUOTE>

You are still at fault even if the debiting bank screwed up. Reason being that common and proper accounting procedures are to balance the checkbook monthly so you would have discovered the error within 1-2 months. If the bank that has your mortgage and your checking account are the same bank, you may have a case and you can negotiate with the bank on the legal fees.

The legal fees seem to be somewhat of a ripoff for just reviewing the title report, mortgage docs and filing the foreclosure action. Unless the attorney actually did more work. Regardless, you must pay the entire amount in full so the foreclosure action can be dismissed. Do this immediately. You can always file a complaint against the checking account bank later. I find it hard to believe that no one from the bank called you or wrote to say that your mortgage payments have not been received. I would presume as it is SOP, that the bank send a demand notice and a preforeclosure notice out to every customer, prior to the foreclosure action being filed. Was the bank negligent in informing you that the mortgage payments were not made? Where you negligent in not balancing your checkbook or is a state of denial due to the extra money in the accont every month? Did you tell us the entire story and all the events that transpired?

 

[Tracey]

Pay the entire amount "under protest, rights reserved", then sue the bank for breach of contract. Argue that the mortgage documents only allows them to collect a _reasonable_ attorney's fee, & that no attorney's fee is reasonable when the original non-payment was due to the bank's breach of failing to withdraw its money as it agreed in the contract to do, AND when the bank made no effort to contact you for 5 months & the entire situation could have been resolved with a 2 minute phone call from a random teller or a 32-cent stamp. Argue that the doctrine of laches should preclude the bank from charging you an attorney's fee when it initiated the breach & allowed the situation to get completely out of hand.

Be prepared to show that the money for the mortgage payments was in the account & you never took it out at any time. This shows that you weren't trying to avoid paying due to financial difficulties.

Don't bother trying to fight the foreclosure -- it will cost you more than $1800 in attorney fees you won't get back even if you win. Just pay & sue. Also, you can ask the court to direct the bank to place a letter in your credit report indicating that the forclosure was due to their mistake & was found to be improper. A small claims court may not have the power to force the bank to write the letter, but you can always write it yourself & include a copy of the judgment holding that the bank improperly foreclosed on you.

If the foreclosure has gone onto your credit report, you can also request damages for negligently damaging your credit report. I'm making up this cause of action. You might have to call it negligent interference with business prospects or infliction of emotional distress or something. Ask for a judgment of $2000 OR fixing your credit report.

If you're REALLY ticked off, you can always stand on the sidewalk outside the bank & hand out leaflets about how the bank breaches it mortgages & then charges its customers to fix the breach. Negative publicity can be effective against local banks.

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

[This message has been edited by Tracey (edited July 07, 2000).]