Legal Question in Real Estate Law in California
Illegal Foreclosure
For the past year and a half, my inlaws have been receiving threatening phone calls and notices demanding that they pay a past due balance on their loan. The problem is that they have never defaulted on their loan and they have all the paperwork showing that they have made their payments on time. My father in law has gone to his bank, the lenders bank, a realtor, and has send all proper documents to the lender showing cleared checks and bank statements showing that the lender has received payment. Well they just received a letter saying they have to cure the loan and they have to pay $4k in past due charges. Why do they need to pay when they have been on time with their payments. My father inlaw has tried to refinance his home just so he can get out of his current loan because of all the stress they are causing, but was turned down because of this mess. What can they do to resolve this mess and clear up their credit?
1 Answer from Attorneys
Re: Illegal Foreclosure
Hire a local real-estate attorney to write a letter demanding acknowledgment that there is no default, or written proof as to exactly how it occurred. Your inlaws may have overlooked something. The people who do loan servicing for lenders aren't perfect, but often they turn out to be right!
If the inlaws are right and the lender is wrong, the attorney's next step would be to file and serve a lawsuit seeking (at least) a declaratory judgment on the disputed issue. This is an expedited kind of suit that asks only that the court determine the parties' respective rights. I believe the court could be asked for a temporary restraining order if a foreclosure sale were noticed.
The lawyer might also be entitled to file a "lis pendens" to give public notice of the litigation and that would also have an effect on preserving the inlaws' rights and preventing a sale.
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