The Law Steps In To Prevent Foreclosure

The law had to step in to prevent Sheila Cruz from losing her American dream – her own house. It took her three years to prevent her dream house on Staten Island from becoming a nightmare. But she won against imminent foreclosure.

Her story started in 2004 when she was ready to spend $30,000 of here hard earned money as down payment for a house. But her broker friend told her to opt for a townhouse worth $400,000 without making any initial payment. At first she was reticent thinking of her modest earnings but finally she agreed when her friend told her that the monthly payment would amount to $2,000 per month. An assurance was also given that the figure would soon come down. She inked the agreement and set up her home in the house.

Six months later Sheila began to get worried. After going through the fine print of the document she discovered that there was a clause saying that the interest would shoot up after five years. It showed that so far she had been paying only the interest and not any part of the capital. Suddenly she realized that her houseboat was leaking. It was tough for her to meet the current rate of payment but if it increased further she would default and run into foreclosure without fail.

Like hundreds of many others in this foreclosure age, Sheila had become a victim of predatory lending. The majority succumbs to foreclosure and gets evicted from their hearth and home. But some like Sheila are plucky and lucky enough to force a turn around.

Legalists opine that there are many ways of keeping the foreclosure wolf at bay. A legal aid society or non-profit house-counseling group can be contacted to find out who is the owner of the mortgage. HUD has a list on its website of these counseling groups. In most cases the banks have sold the mortgages and this makes it difficult to trace the current owners of the agreement. Banks may be contacted but usually that step does not come to much use. The banks might make things even worse than before. If the bank is hostile then it is best to hire a lawyer. The legal expert will be able to pin the flaws in the mortgage agreement and put the lender in an awkward position for predatory lending. The law has the power to close in on the offending lender and halt foreclosure proceedings.

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