A few weeks ago, Capital One Financial Corp. announced that its mortgage and home-equity loan origination arm was struggling to generate profit, and thus would be discontinued. Initially, the focus following the decision was on the estimated 1,100 jobs the company was forced to cut as a result. However, with a few weeks to reflect on the news, many are now turning their attention to another group of potential victims of the situation: the debtors who were either in the process of securing a loan modification for such a loan, or in the midst of foreclosure.
Our Miami foreclosure defense lawyers are shedding some light on the matter.
What the Decision Means for Loans in Foreclosure
According to the most recent numbers released, the lender’s residential mortgage loans totaled approximately $20.6 billion prior to its move to stop offering the service. Upon making its announcement, Capital One stated it would continue to service the loans it currently backs — for now, that is. This includes a number of loans that are currently somewhere in the foreclosure process. Eventually, these accounts will be transferred to new loan servicers.
Assuming the new lender is in possession of the note, the action should continue on schedule. That said, it is advisable to enlist qualified legal representation to ensure the new party has standing to foreclose, as well as identify any mistakes that may have been made by the lender. While the process can move forward without a hitch, it is not uncommon for something to go wrong that impedes upon the borrower’s rights during the shuffle.
What the Decision Means for Loans in Loan Modification
For those who were in the process of obtaining a loan modification, it is reasonable to believe that the bank will honor any terms that have been agreed to. However, it will be important to pay close attention to the progress of one’s case to ensure it remains on track. This is particularly true for those whose loans may get transferred to a new servicer before the process is completed. While federal law mandates that the application be transferred along with the loan, there is always the possibility that those documents will get lost, or the new lender will refuse to accept the modification. In this case, Miami foreclosure defense lawyers can assist borrowers with submitting a “notice of error” and fighting the wrongful decision.
How to Handle the Potential Impact
Given the changes that are on the horizon for debtors with loans backed by Capital One, it has become increasingly important for those who are behind on payments to seek out experienced legal counsel. The Miami foreclosure defense lawyers at Graham Legal can help you seek justice, while protecting your rights every step of the way. Contact our office now to schedule a free consultation.