In the last five years, the number of foreclosure lawsuits filed in federal court in California has ballooned —Just like the exploding adjustable-rate mortgages that drove the foreclosure storm — from only 29 statewide in 2005 to nearly 1,400 last year.
And these are only the lawsuits filed in federal courts; many such lawsuits also are filed in state courts, which don’t track the numbers or the outcomes.
So what are these homeowners suing for? For not working with sellers to modify loans, for not allowing short sales, for not extending foreclosure sale dates like they promised, and for not honoring agreements afforded under the Treasury’s new Home Affordable Modification Program (HAMP).
Even if a lawsuit doesn’t ultimately succeed, it can sometimes significantly delay the loss of a home. Some suits contend the lender reneged on a promise of a loan modification. Others argue lenders screwed up the foreclosure.
It’s not jus thappening here in California either, homeowner/foreclosure lawsuits are definately happening all over the nation and will probably continue.