Borrowers and banks usually enjoy a friendly relationship. It’s an exciting day when an individual or couple signs the papers for a mortgage, sealing the deal on their new home. Handshakes, smiles, and free pens make the whole process festive—a milestone in the life of a growing family. But when things have not gone according to plan and foreclosure is on the horizon, that relationship often changes for the worse.
Shady Activities
In New York, foreclosures are notoriously common; so common, in fact, that officials conducted an investigation concluding that a number of different banks were at fault for failing to follow the correct protocols when pushing for foreclosure. HSBC, a prominent mortgage lending bank, was not included in the investigation, but New York’s attorney general has filed a separate lawsuit against the bank, accusing it of the same kinds of shady activities.
Not Willing to Help
At issue is a legal requirement that a bank offer help, in the form of negotiations to modify loan terms, when a borrower is in trouble. This requirement is intended to give homeowners a last alternative to foreclosure, with both the borrower and the lender making compromises. Unfortunately, the attorney general’s lawsuit alleges that many New York foreclosures conducted by HSBC did not include those negotiations.
Stalling Tactics
Many New York homeowners are shocked to discover the kind of stalling tactics that their banks engage in when their home is on the line. The attorney general will seek to prove that HSBC put off the required negotiations for months, and even years in some cases, while continuing to allow the borrowers to get farther behind on their loans. The farther behind a borrower is, the less likely it is that negotiations to avoid foreclosure will be successful.
The Lawsuit’s Goal
In filing the case against HSBC, the attorney general will attempt to recover damages for those who have already been the victims of irregular New York foreclosures. In addition, of course, he will try to ensure that HSBC complies with state law in the future, giving troubled homeowners the chance to stay in their homes and follow a modified payment plan to meet their loan obligations.
If you are in danger of foreclosure and want to know what your options are, contact us for a free consultation. We will work to prevent foreclosure and negotiate a plan that will keep you in your home.