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How Do Consumer Protection Laws Protect You in a Foreclosure?

How Do Consumer Protection Laws Protect You in a Foreclosure?

Have you received a notice of foreclosure on your property, or do you expect to? If so, you are likely worried about losing your home, something you worked hard to purchase.  Your fears are well-founded.

Lenders expect mortgage payments to be made in full and on time.

While lenders do have the right to move forward in pursuit of what they are owed, there are laws in effect to protect borrowers who may fall behind on their mortgage payments. If you find yourself in this position, consider contacting a Florida real estate foreclosure attorney for advice and counsel on moving forward.

Consumer Protection Laws Offer Various Safeguards for Homeowners Facing Foreclosure

Who Do These Laws Protect?

While consumer protection laws are valuable, they do not impact everyone. They are designed to protect specific property owners, the first of which are those whose property in question is their primary residence. In Florida, this tends to be an issue, as many in the state own second or even third homes. Vacation properties are everywhere.

While in most cases your primary residence is the home in which you live most of the time, in some cases other properties may fit this categorization. Your South Florida foreclosure defense attorney can review your property ownership and determine if it can be considered your primary residence.  Remember, these protections do not apply to all mortgage situations; those with reverse mortgages and home equity lines of credit may be excluded.

Understanding the Rights Consumer Protection Laws Defend

Right to Notice and Communication

One of the most important aspects of consumer protection laws deals with communication and timing. Your mortgage company cannot foreclose on your property after one late or missed mortgage payment.  The timing and communication standards are clearly articulated and regulated by the law.

It is the responsibility of the lender to reach out to the borrower, either by phone or in person, AND in writing. Additionally, the timing of this contact is specific; it must be no more than 36 days after the missed payment date and must recur every 36 days after each continued missed payment.

Within 45 days of a missed payment, the lender must also communicate possible loss-mitigation options. This process must continue 45 days after each missed payment, but this notice is only required to be provided in writing once every 180 days.

Exceptions to regular communication exist if you have filed for bankruptcy or requested your lender to cease communications. Under the Fair Debt Collection Practices Act, this absolves the lender from contacting you in person or via telephone.

In short, there should be no doubt that the borrower both recognizes their delinquency and understands their options going forward.

Protection from Errors and Unfair Practices

In addition to being responsible for providing appropriate notice and regular communication, consumer protection laws hold lenders responsible for operating in good faith. These laws:

  • Prevent lenders from directing their clients towards less appropriate mortgage options.
  • Forbid specific issues including mandatory waivers of consumer protection rights and arbitration where homes are the security.
  • Require lenders to minimize foreclosure risk by researching prospective borrowers and their ability to make timely and complete mortgage payments.
  • Provide home purchase borrowers three days after closing to cancel their transactions.
  • Mandate lenders to end preauthorized electronic funds transfers after an account has been closed.
  • Insist that partial payments are handled correctly.
  • Prohibit lenders from overcharging for fees not disclosed in their loan terms.
  • Direct lenders to accurately report loan transactions and payment histories.
  • Instruct lenders to review applications for loss-mitigation options in the time period required by law (within 30 days).

If you believe your lender’s actions are not compliant with consumer protection laws and you are facing an unfounded foreclosure, contact an experienced Florida foreclosure defense attorney immediately.

Just as important as protecting you against certain actions is preserving your well-being when mortgage servicing errors occur.  Such errors include:

  • Failure to pay property taxes from property owner-provided funds
  • Miscommunication regarding missed mortgage payments
  • Escrow account payment errors for taxes or insurance
  • Incorrectly raising escrow payments
  • Failure to implement loan modifications
  • Misappropriating mortgage payments.

These lender errors can have a very real impact on your mortgage and your financial reputation. You are not responsible for the mistakes of others.

You Have the Right to Challenge and Dispute Mortgage Servicing Issues, Including Foreclosure

Understanding What You Can Do

If you believe your lender has made a mistake in servicing your mortgage and has erroneously filed for foreclosure or has violated your rights provided under consumer protection laws in pursuit of a foreclosure, you have the right to challenge their actions and respond in court.

Additionally, if you have missed mortgage payments, have been properly notified, and are in default of your loan, you also may have the opportunity to become current on your payments, apply for loss mitigation, pay the loan completely. Foreclosure is not the only option.

On the other hand, if your lender did not correspond appropriately or has acted unethically, they may have violated your rights.

In all cases, it is wise to recognize that the laws governing mortgages and lender behaviors are complex, and identifying and engaging a reputable and experienced foreclosure defense attorney may be in your best interests.  The property you own is likely your largest asset, and you should do everything in your power to protect it and your financial reputation.

Carlos M. Amor, Florida Foreclosure Defense Attorney, Can Help You

While consumer protection laws protect borrowers, mortgage companies don’t always comply with them. Sometimes their communications are not in accordance with the law, and other times their errors can impact your mortgage payment history. In either case, identifying the issues and holding lenders accountable can be challenging.

Carlos M. Amor has been providing foreclosure defense services throughout Florida for his entire career. His knowledge of federal and Florida state law and his experience in the local courts provide him with the ideal background to draw upon when helping those whose rights have been violated.

Mr. Amor is committed to protecting his community and offers all potential clients a free consultation.  Reach out to him today at 954-453-7200 to schedule yours and learn how powerfully he can support you.


Carlos M. Amor is a skilled and experienced attorney and real estate broker. His legal practice in South Florida focuses on real estate litigation, real estate investments, tax deed and foreclosure auction purchases, traditional real estate transactions, short sales, foreclosure defense, and civil litigation. Carlos thinks “outside the box” and takes a practical approach to finding solutions that benefit his clients. [ Attorney Bio ]