Protecting Your Home

I. Mortgage Foreclosure Defense/Modification
II. Mortgage Servicer Litigation
III. Fair Credit Reporting Act Litigation
IV. HOA or Community Disputes
V. Residential Contractor Litigation

Owning a home can be tremendously rewarding. It’s where you will spend most of your life and it should be a solid investment in your future. Unfortunately, home ownership can come with unexpected hassles that, if not handled properly, can result in losing your home or a substantial portion of its value. GSW attorneys specialize in handling these unexpected hassles and can protect you and your most valuable asset in a number of ways.

I. Mortgage Foreclosure Defense/Modification

It’s easy to fall behind on mortgage payments due to sudden illness, excessive debt, divorce, or other life disruptions. When this happens, financial stresses can feel like a quagmire. Is the only outcome foreclosure? Will you lose your home?

If you’re behind on your mortgage loan and are facing foreclosure, it’s important to know that there plenty of options available to avoid losing your home. Your options include fighting the foreclosure in court, pursuing a “loss mitigation” option such as a loan modification, short-sale, or turning the property over to the bank in what is called a “Deed in Lieu,” or bankruptcy. GSW’s experienced foreclosure defense team can assess your options and help you choose what is right for you. We work with clients who are behind on their mortgage payments throughout the District, Maryland and Virginia (DMV).

How Does a Foreclosure Happen?

When a homeowner defaults on their mortgage loan, mortgage lenders and service companies may attempt to seize the property through the process of foreclosure. Banks and lenders would like the issue to be as simple as “you haven’t paid, give us the keys,” but fortunately, our government has recognized the importance of protecting homeowners. As such, banks and lenders are required to comply with regulations and terms of the mortgage contract before a foreclosure can occur.

The foreclosure process begins with a “Notice of Default” or “Notice of Intent” to foreclose letter from your lender explaining the reasons for the default and the amount of money necessary to reinstate the loan. If the borrower does not cure the default and reinstate the loan, the lender can move forward with filing for foreclosure or the foreclosure sale depending on state law.

A foreclosure sale is a public auction at which the lender will sell the property to the highest bidder. After the sale, the lender performs an accounting and the proceeds are used to pay off the loan, pay any other lienholders, and pay whatever is left over to the homeowner. If the house is “underwater” and sells for less than is owed on the loan, the remaining balance is known as the “deficiency” and the lender can continue to seek repayment from the homeowner for that amount.

When Should You Fight in Court?

GSW aggressively litigates foreclosure cases to ensure that a bank cannot foreclose unless and until the bank has proven to the Court that it has complied with the terms of the mortgage and all state and federal laws and regulations. Banks are often represented by “foreclosure mill” lawyers who are pursuing thousands of foreclosures at a time and pay little attention to any individual case. This leads to carelessness and mistakes that GSW can exploit for your benefit. Through litigation, GSW has secured dismissals, modifications, and even six-figure cash settlements for their clients while keeping them in their home.

The primary reasons a homeowner should defend their case in court and possibly countersue is if you have a legal defense to the foreclosure. These legal defenses include:

• You are not in default
• You are in default solely because of the illegal actions of the lender or servicer
• You were the victim of a predatory loan
• The lender’s claim is outside the statute of limitations
• The lender cannot prove they are the party entitled to enforce your mortgage
• The lender or servicer has failed to follow all state and federal laws regarding loan modifications and foreclosure
• You were wrongfully denied a loan modification
• You have claims against the lender or servicer which can offset the default

What is a Loan Modification?

A loan modification is an agreement between the borrower and the lender to change the original terms of the mortgage. The terms that can be changed include the payment amount, length of loan, and interest rate. The purpose of a modification is to bring the loan current and reduce the borrower’s monthly payments. A modification is often the best outcome for the borrower and the lender as the borrower gets to keep their home, and the lender gets paid back their money.

When Should I Pursue a Loan Modification?

A loan modification should be pursued by all borrowers in default. It is free to apply and often results in the best outcome for a borrower in default.

The only exception is when your foreclosure sale date is quickly approaching. If your sale date is in the near future you should only pursue a loan modification if it is likely that you and your loan are eligible for modification and you are likely to be approved. If you are likely not eligible or unlikely to be approved, then it is best to speak to an experienced foreclosure defense attorney as soon as possible to assess your other options.

Whether a loan is eligible for modification is determined by the lender or servicer guidelines or pooling and serving agreement. Whether you are likely to be approved is based on several factors but most importantly whether you have the income to pay the modified monthly payment.

How Can GSW Help?

Unfortunately, obtaining a loan modification is more difficult than it should be, and borrowers are often wrongfully denied. Mortgage Servicers “lose” applications and repeatedly ask for the same documents or information over and over again. This is where GSW’s experience in successfully negotiating hundreds of loan modifications, including dozens in which the borrower had been in default for years, is so important. Because the criteria for government backed loans, such as loans owned by Freddie Mac or Fannie Mae or insured by the VA, HUD, or FHA, are publicly available, GSW’s Loan Modification Expert can do a preliminary analysis to determine your likelihood of approval.

Once the GSW expert completes his initial assessment you can make an informed decision on how to best defend against foreclosure. In addition to performing the loan modification preliminary analysis, GSW will help you put together your application and interact with the servicers’ representatives on your behalf. GSW can ensure that you are promptly and fairly reviewed for modification.

What is a Short Sale?

A short sale is when you sell your home for less than you owe on your mortgage prior to a foreclosure sale. If your mortgage servicer or lender agrees to a short sale, you can sell your home and pay off a portion of your mortgage balance with the proceeds. Once the short sale is complete you may be relieved of your responsibility to pay any remaining balance—called a “deficiency waiver.” A borrower should consider a short sale if they do not have a legal defense to foreclosure, are not eligible for a refinance or modification, and/or they are underwater on the property. GSW can help you determine if a short sale is right for you and negotiate the most beneficial terms.

What is a Deed in Lieu ?

A Deed in Lieu of foreclosure is a transaction in which the borrower voluntarily transfers the deed of the property to the lender in exchange for the release of the mortgage. This transaction is beneficial for the homeowner because it allows them to avoid a foreclosure sale and can result in a deficiency waiver, or cash settlement or both. GSW can help you determine if a Deed in Lieu is right for you and negotiate the most beneficial terms.

II. Mortgage Servicer Litigation

A mortgage servicer is the entity that collects your payments, pays homeowner’s insurance, and taxes, and reviews you for a loan modification. Your servicer could be the bank that holds your loan, or it could be a separate company that simply collects payments and funnels them to the lender. Either way, these institutions handle billions of dollars in homeowner payments, and sometimes, they make costly errors. When errors occur, it can lead to devasting consequences for the homeowner including late fees, overcharges, and even foreclosure. Because servicers are operating on razor thin margins and cutting costs wherever possible, borrowers attempts to fix servicers mistakes are often frustrated with endless wait times on hold, everchanging cast of employees, and the servicers’ outright refusal to correct their own errors.

Fortunately, federal and state laws now exist to protect borrowers. The Real Estate Settlement Procedures Act (RESPA) can help you dispute mortgage servicing errors. Some of the more common types of mortgage service company errors can include:

• “Dual-Tracking” such as pursuing a foreclosure simultaneous to working out a payment modification or arrangement.
• Failing to pay escrowed taxes or homeowner’s insurance.
• Failing to provide all of the options during a foreclosure process.
• Failing to timely review a loan modification application, repeatedly requesting the same documents, or wrongful denial of an application.
• Imposing unfair or improper fees, penalties, or charges.
• Improperly applying payments.
• Improperly conducting the foreclosure process.
• Falsely declaring a property as vacant.

In addition to these errors, there is another subsection of situations where the banks, lenders, servicers, or their agents have acted maliciously. Clients have received predatory loans, or had their homes broken into and their property stolen by agents of the lenders or servicers before a foreclosure sale was complete. When these malicious events occur, we go on the offensive and make the wrongful parties defendants in a lawsuit.

If you’re a homeowner with a mortgage loan, the law is on your side. In addition to RESPA, other state and federal laws and regulations force mortgage service companies to play fairly and prevent them from taking advantage of the homeowner for financial gain. Some of the laws designed to help homeowners in these situations include:

• Financial privacy rules in Title V of the Gramm-Leach-Bliley Act
• The Equal Credit Opportunity Act (ECOA)
• The Fair Credit Reporting Act (FCRA)
• The Fair Debt Collection Practices Act (FDCPA)
• The Truth in Lending Act (TILA)

Further, state and regional consumer credit and debt collection rules help to protect you and your home from the actions of predatory banks, lenders, servicers and their agents. GSW can leverage these laws, regulations and rules while vigorously defending your most valuable asset. Foreclosure is not inevitable with the right legal partner on your side. Let us help you keep your home.

III. Fair Credit Reporting Act Litigation

In the digital age, your credit score and report is either a key to opportunity or a roadblock on the highway of life. In a manner of seconds, your future lender, employer, or landlord can access your entire credit history. Whether you are hired, receive a lease, or are approved for a loan, and at what rate, are all contingent upon your credit report. The decision is often made by a computer without the aid of any human review. Credit reporting agencies have significant power over our lives and as such, there are multiple regulations that are designed to ensure credit reporting is fair and accurate.

Under the Fair Credit Reporting Act, the credit bureaus (Experian, Equifax, and Transunion) and furnisher (lenders, credit card companies, and landlords) are required to follow certain regulations related to a credit application. Unfortunately, they often do not. Problems arise including identify theft, inaccurate information, a mixed file, and more. When this occurs, it is only through litigation that you can have false information removed or corrected on your credit report, and receive compensation for the harm which you have suffered. GSW attorneys are well versed in the myriad of problems related to Fair Credit Reporting Act Litigation. Call us today to learn more about your rights and how to protect them.

IV. HOA or Community Disputes

The Home Owners Association (HOA) bi-laws and rules can be enforced against residents of the community even when the HOA rules violate state and federal law. For example, it would be illegal for a municipality to pass a law preventing homeowners from placing a Black Lives Matters or #MeToo sign on their front lawn, but an HOA could establish a rule preventing what would normally be considered free speech. This, however, does not mean that an HOA can do anything it wants. However, the defenses available to homeowners engaged in a dispute with an HOA are often not ones that a lay person might think of and require a lawyer with experience to find a positive resolution for the homeowner. These matters can be some of the most difficult cases to handle because often emotions are high, there are unexperienced or shortsighted people serving on the Board of the HOA or there is often a personal, ulterior motive involved. Before escalating a war with your neighborhood and neighbors, contact a GSW attorney and develop a plan of attack.

V. Residential Contractor Litigation

The Washington D.C. area is booming. People are buying old houses and renovating them at a break-neck pace. This is a wonderful time to purchase a home and make it your own. But there is a dark side to this. Many people who hold themselves out as contractors and service professionals do not have the experience or skill to complete the projects for which homeowners hire them. Other times, homeowners will hire people to work on their house, and the contractor will begin the project and never complete it. This happens because small independent contractors use your deposit to fund the next project, and then they need to go and sign another contract to have enough funds to start another project and so on. They are always searching for that next deposit instead of finishing work as promised.

When something goes wrong with your construction project, it can be a frightening experience. Before you panic, give us a call. We will review the contract with you, go over your documents – things like emails, texts, and receipts – and give you your options. We can begin talking with your contractor and trying to get the situation resolved, and if that doesn’t work, we have the knowledge and the resources to take them to court. We know the experts we need to hire to evaluate the issues. Many times, the contract will have a clause that requires arbitration. GSW has experience in arbitration proceedings and an arbitration clause in a contract will not scare us from taking case.

At GSW we represent homeowners. We can make sure your costs are kept in check while at the same time aggressively pursuing your case. We’ve won cases against contractors who refused to finish projects and contractors who have done poor work. We’ve seized their assets and helped make homeowners whole again.

Allegations of poor construction and remodeling in the DMV area frequently make the news. While thousands of successful remodeling and building projects are completed each year for homeowners, dozens do not go as planned and end up in litigation.

We help clients deal with red-flag residential contractors that:

• Use lower-grade materials to cut costs.
• Fail to obtain the proper work permits then leave homeowners with an illegal construction project that must be explained to the authorities.
• Abandon the project due to bankruptcy.
• Threaten to quit if the homeowner doesn’t provide additional compensation to finish the work.
• Use unlicensed or undocumented workers to complete projects.
• Fail to provide and renew adequate insurance coverage for their business.

Residential construction firms can end up in serious legal trouble involving defects in workmanship or contract disputes. Homeowners have a right to receive a quality product with no defects, built to their specifications on time and within budget.

But residential construction comes with unforeseen variances that can throw projects off track. Heated disputes can flare-up between residential contractors and homeowners around project delays, loss of productivity, or variances between the project deliverables and what was promised.

GSW offers consumers a way to recoup losses incurred when contractors default or complete sub-par work.

GSW has a proven track record of protecting residential property owners from construction projects that have gone awry. Our goal is to gather the facts, resolve the issue through negotiation if possible, or litigate the matter whenever necessary.

Our litigation and legal consultative services include:

• Contract negotiation, interpretation, or breach of contract.
• Analysis and mitigation of defective specifications or design.
• Remedy for construction defects and failures.
• Negotiation of payment disputes and recovery of fees.
• Bid, payment, performance, and other surety bond claims.
• Claims for project delay, disruption, inefficiency, or other issues.
• Project defaults and contractor terminations.
• Mediation and arbitration of warranty disputes.

Construction projects come with high risk. Homeowners can suffer extensive losses and damages, and the fallout can be devastating.

Whether you are dealing with contract disputes, payment, financial obligation breach or poor workmanship, GSW focuses on leveraging every legal tool available to help you resolve problems with your residential construction project.

Contact us today at (202) 408-5400 for a free evaluation of your case.