The Jensen Litigation Firm, PLLC represents businesses and individuals in mortgage litigation. People hire us to sort out their rights as a lender or borrower, and to fight for those rights. If you are a bank facing compliance issues or litigation, we can help. If you are a borrower whose lender failed to comply with lending rules, we can help. Contact us now to protect your lending-related rights.
What is a basic mortgage arrangement?
People are most familiar with bank mortgages on residential homes and foreclosures for non-payment. However, many people are not aware of the broader universe of mortgages, and the range of disputes that can arise over those mortgages.
A mortgage is a security interest in land. Typically, a transaction involves a promissory note and a mortgage. The promissory note is basically the “loan” with the repayment terms for a borrower. The mortgage secures that debt to land.
When a borrower fails to repay the loan, there has been a breach of the promissory note and the mortgage can be foreclosed. The lender, such as a bank, uses the breach to take back the land. Mortgage foreclosures are generally governed by Chapters 580, 581, and 582 of Minnesota Statutes.
What are commercial mortgages?
Bank mortgages on residential homes are the most common mortgages. However, mortgages are frequently put on other properties, including commercial or business property, agricultural land, townhomes, manufactured homes, and condominiums.
These types of mortgages may have different terms than a residential bank mortgage, and there may be different rules governing foreclosure of these mortgages. Often, mortgages on non-residential property is tied in with business loans that may cover business property and personal property.
What are common disputes over mortgages?
Mortgages are a frequent source of litigation. While some cases involve a simple non-payment and foreclosure, other cases are not so clear.
The lender's claimed breach may involve non-monetary terms, such as improper use of the land or failure to pay off mechanic's liens. In such a case, the borrower may have grounds to dispute the foreclosure and may want to hire an attorney. The borrower and lender may seek a modification of the mortgage if there is not a clear breach.
What laws govern mortgages?
There are complicated laws that govern mortgages. Federal laws, federal regulations, and state laws govern residential loan transactions, mortgages, and foreclosures. If a bank lender fails to comply, it may not be able to foreclose on a mortgage and the borrower may be entitled to damages.
Some of the primary federal laws include:
- Truth in Lending Act (TILA)
- Real Estate Settlement Procedures Act (RESPA)
- Fair Credit Reporting Act (FCRA)
- Unfair, Deceptive, or Abusive Acts or Practices Act (UDAAP)
- Fair Debt Collection Practices Act (FDCPA).
Federal agencies such as the Consumer Financial Protection Bureau (CFPB) write and enforce regulations under these laws. There are also rules that govern how your bank “passes through” the rights to your mortgage to investors.
With all these rules, there is more pressure than ever on banks to get the mortgages right. If not, they may lose rights to foreclose and may be exposed to liability and scrutiny from regulators.
Why is it important to hire an attorney for a mortgage dispute?
It is important that lenders understand the applicable statutes and the compliance risk. If they do not have proper process in place, they may face regulatory pressure and may be sued by their borrowers. Likewise, it is important for borrowers to understand their rights because land is a valuable investment.
We have the knowledge and experience to handle mortgage litigation. Do not hesitate to contact us if:
- You are a bank, credit union, or financial company with compliance issues related to lending.
- You are a lender with default and loan collection needs.
- You are a borrower that has been served with loan default paperwork.
- You are a lender or borrower involved in a dispute over terms of a note or mortgage.
- You are a creditor being impacted by another creditor's mortgage or foreclosure.
With offices in Shakopee (Scott County) and Litchfield (Meeker County), we handle mortgage disputes throughout the Twin Cities and Greater Minnesota.