Jon Alan Enochs


All sorts of issues can arise in the financing of the purchase of real estate. Problems can arise involving the following transaction:

Loan Broker Disputes

Instead of going directly to a bank such as Wells Fargo or Bank of America many homebuyers or homeowners will seek financing of real estate through the assistance of an intermediary called a loan broker. These loan brokers work for independent real estate offices and shop the market for real estate loans for their clients. These loan brokers owe their clients a fiduciary duty and sometimes they breach that duty by placing their clients into loans that the clients cannot afford. Often the motivating factor in doing so is an increased commission or kickback that the loan broker receives from the ultimate lender behind the loan.

In today’s economic climate we are seeing a lot of homeowners claiming that they are surprised to see that their loans have adjusted. Regrettably we see people whom in order to be able to qualify for the loan to purchase a home misrepresented the income that they earned in order to obtain a loan large enough to buy the house. The consequence of the embellishment of their income is that the homeowner now has a loan that they cannot afford to pay. The inability to afford the monthly payments ultimately results in the loss of the property to foreclosure. If you find yourself in a similar scenario you should not seek self-help and you should quickly seek the assistance of legal counsel. These transactions are complex and involve more than just the homeowner’s dispute with their loan broker. There is also an ultimate claim by the lender who is jockeying for position over the homeowner in anticipation of trying to get their money back. This means that there could be a civil suit filed by the lender against the borrower/homeowner. So these cases tend to get a little complicated because there are a lot of moving parts to them and there are multiple parties involved with the issue.

You’ve probably heard the term “forensic loan audit” offered by people having a solution to mortgage distress. Those people that are providing forensic loan audits usually look through the homeowner’s loan documents trying to find violations of the Real Estate Settlement Procedures Act and the Truth in Lending Act. Though these laws do exist they provide relief of little value to the homeowner. It is my personal opinion that these forensic loan audits are simply a rouse to separate a financially strapped homeowner from their hard earned money. When we look at the remedies that are available for RESPA and TILA Violations we are usually talking about rescission of the original contract. When you rescind a contract both parties get restored to the position that they occupied prior to the contract. Though this remedy allows the client to undo the contract, it requires that the client return the money. If it’s the client’s objective to hold onto the house or to circumvent any obligation to pay any residual balance owing on their loan after the loss of the property then these TILA and RESPA claims provide little assistance. Whenever a homeowner is experiencing mortgage distress they should always set a goal or objective for themselves in navigating their mortgage distress. Then take a look at the TILA and RESPA Violations to assess whether or not the remedy will achieve their goal or objective. Frequently these legal claims do not achieve the homeowner’s goals or objective.

I can be of assistance in helping homeowners navigate through their mortgage distress.

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