How Can Ohio’s RESPA Rights Stop A Wrongful Foreclosure?
Receiving a foreclosure notice can be a frightening experience. The very thought of losing your home, a place where you’ve built so many memories, raised your family, and invested your savings, can overwhelm most people. But before you assume that foreclosure is inevitable, it’s important to know that you have rights under the law. Among the most powerful tools available is the Real Estate Settlement Procedures Act (RESPA), a statute that protects consumers and places obligations on mortgage services.
The Columbus, Ohio, foreclosure defense lawyers at Kohl & Cook have successfully used RESPA to defend Ohio homeowners from wrongful foreclosure actions. Understanding how this law works can make all the difference between keeping your home and losing it.
What is RESPA?
RESPA was enacted in 1974. It was designed to increase transparency in real estate transactions, thus protecting consumers from unfair business practices by lenders and mortgage servicers. Amendments have expanded the scope of RESPA to cover a wide range of servicing and foreclosure matters.
Under RESPA, a mortgage servicer must:
- Provide timely and accurate information to borrowers
- Correct errors when notified in writing
- Acknowledge and respond to borrower inquiries
- Provide disclosures about the servicing of loans and escrow accounts
- Follow specific loss mitigation procedures before moving forward with foreclosure
How does RESPA protect homeowners facing foreclosure?
If your mortgage servicer failed to follow federal regulations, RESPA gives you the ability to challenge any ensuing foreclosure that might occur. Some of the most common RESPA violations we’ve seen in our practice include:
- Failure to respond to Qualified Written Requests (QWRs) – Homeowners can submit written requests for either information or error correction. Servicers are legally required to respond within a strict deadline.
- Dual tracking violations – Servicers are not allowed to pursue foreclosure while simultaneously reviewing a borrower for loss mitigation options like loan modifications.
- Mishandling escrow accounts – RESPA sets rules for managing escrow balances and requires annual statements on escrow accounts. Errors sometimes result in wrongful defaults.
- Failure to evaluate all available foreclosure alternatives – Before they foreclose on your property, a servicer must inform you about and consider options like repayment plans, forbearance, or loan modifications.
When a servicer ignores these obligations, they may not only be violating RESPA, but they could also be trying to push through a foreclosure that should not legally proceed.
What remedies are available under RESPA?
If a borrower suffers some form of harm due to a servicer’s RESPA violations, they can file a lawsuit to stop the wrongful foreclosure. Courts can order the servicer to correct errors, halt foreclosure proceedings, and, in some cases, award damages for losses caused by the violation. In addition, successful plaintiffs can recover attorney fees, making it possible to fight back against powerful mortgage companies.
Talk to a Columbus, OH, Foreclosure Defense Lawyer Today
Kohl & Cook Law Firm, LLC, represents the interests of Ohio residents who have suffered from a wrongful foreclosure. Call our Columbus consumer lawyers today to schedule an appointment, and we can begin discussing your next steps right away.
