Asian Journal- The Filipino-American Community Newspaper

A recent study has concluded that about 27 percent of the nation’s homeowners owe more to their lenders than their home is worth, known in industry jargon as being ""upside down" or "under water" on their mortgages. This has caused widespread distress to millions of homeowners. As the country’s economy continues to trend towards an uncertain future, more and more people are experiencing the onslaught of what is the most virulent mortgage crisis in US history. Foreclosures are at an all-time high, while home prices have plunged by up to 50 percent in some high-growth areas of California, Nevada and Florida.

The federal and state governments both realize that something must be done to avert a more serious crisis from threatening the stability of the broader economy. Banks and other financial institutions have been thown a lifeline by the recent $840 billion bailout package passed by Congress, but until now, the average homeowner who is "upside down" or "under water" has not been offered any solutions to help them remain in their homes. Many believe that the only solution is to mail in their keys to the lenders and walk away from their homes. This has created a whole new group of homeowners, known in the mortgage industry as "walk aways."

Bander Law Firm offers homeowners who are "upside down" a solution to allow them to remain in their homes, while drastically reducing the loan principal amounts to today’s more modest appraised values. In most cases, we are able to force lenders to "write down" the loan principal amounts to 90 percent of today’s appraised values, compared to the inflated prices of three or four years ago. However, homeowners must be able to prove that they currently have sufficient income to qualify for this new, smaller loan.

How is this possible? A competent lawyer has a whole range of powerful legal tools at his disposal which can be used to invalidate, void or cancel the existing mortgage contracts and promissory notes between the homeowner and the lender. Most of these legal tools were enacted decades ago for the protection of the consumer. However, during the boom times in the mortgage industry, most of these legal protections were ignored by the industry in the rush to originate trillions of dollars in new loans.

Homeowners do not have to make the monthly payments on their mortgage while their mortgage is under dispute. Furthermore, the lenders cannot report those missed payments as derogatory information on the homeowner’s credit report, due to the protections afforded the homeowners under the Fair Credit Reporting Act.

The Truth In Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) are violated on a regular basis by lenders and mortgage companies. These consumer protection laws are in place to protect the homeowner, but they are often completely ignored. Your loan is possibly unlawful or illegal, and you may be entitled to relief, whether or not you’re presently in foreclosure.

Not only can the laws be used to immediately stop the foreclosure process but it also lets the homeowner avoid bankruptcy. Once violations are identified in your loan documents, your lender will have no alternative than to stop the unlawful foreclosure process and settle the dispute.

Failure to comply with these consumer protection laws may result to extensive penalties. A creditor who violates the disclosure requirements may be charged for twice the amount of the total finance charge on the loan. This can be a very significant amount in the case of home mortgage. Costs and attorney’s fees may also be awarded to the borrower. A lawsuit must be filed by the borrower within a year of the violation but certain tolling provisions allow the consumer more time.

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Atty. Joel R. Bander is the partner of Bander Law Firm, LLP. With over 15 years of litigation and immigration experience, Mr. Bander is a leading litigator and accomplished trial strategist. He has successfully handled numerous cases before Federal, State, Civil, and Criminal Judges and has participated in hundreds of arbitrations and trials.

Norberto F. Reyes, III, Esq., is Of Counsel to Bander Law Firm. He has been in private law practice for over 16 years and specializes in real estate and business matters, including commercial finance and international project finance. He is also a licensed California Real Estate Broker.

Bander Law Firm, LLP Downtown office address: 1055 W. 7th Street, Suite 1950, Los Angeles, CA, 90017. Tel: (213) 873–4333 Fax: (213) 873–4334. San Gabriel Office address: 1045 E. Valley Blvd., #A215, San Gabriel, CA 91776. Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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