Common Legal Challenges in Mortgages: How Mortgage Lawyers Can Help

The mortgage process can be a challenging time, especially for people looking to purchase a new home and start their lives in it. Coupled with the legal-speak and the pressure of conforming to the lender’s requirements, a person can find themselves caving under the pressures of finalizing and going through all the details of a mortgage. And during this process, should a legal issue or challenge arise, it gets even more overwhelming. Today, we’ll be looking at some common legal challenges in mortgages and how mortgage lawyers will be able to help you navigate your way to a permanent solution. 

First, we’ll take a look at what a mortgage is and then delve deep into the discussion of the legal challenges in mortgages. Afterward, we will discuss how mortgage lawyers are a surefire way of solving these problems and ensuring that no party infringes upon your legal and financial interests. 

What is a mortgage?

A mortgage is a loan that an individual takes out with the intent of buying a property, usually residential. The collateral, in this case, is the property itself, and based on prevailing interest rates, the individual has to pay back premiums in addition to the principal amount. Since property-buying requires considerable investments, mortgages are set for lengthy terms (15 or 30 years) at manageable interest rates to ensure repayments.

Common legal challenges in mortgages

Here are some legal challenges in mortgages that may affect the debtor (the individual taking out the mortgage). 

New lender problems

Mortgage loans are sold as securities and bonds to banks and financial institutions all the time. With a mortgage from a financial entity that sells these loans to other companies, the debtor may suddenly find themselves in a contract with a new company that might not abide by or honor the contract’s original terms. For instance, the new financial holding might raise the interest rates on mortgages, which might have the potential to disrupt your finances. While mortgage contracts usually explicitly state the interest rate at which the mortgage was locked, for adjustable-rate mortgages, banks and other lending institutions are free to set their interest rates after the initial period, which could lead to some trouble with the repayments. Should that be an issue, a mortgage lawyer can always help, communicating to the new lender about the contract, the interest rate set initially, and how any increase in this might not be in the debtor’s financial interests?

Repayment issues

Repayment issues are common, especially with financial institutions and lenders with previous issues and an unsavory reputation. While it is generally agreed that such institutions be avoided, however, should your lender make a mistake in processing the repayment, this can cause a lot of issues. One of the most common ones is the miscalculation of payments, which shows up in the cumulative calculation as unpaid. This can create an additional and unwarranted burden on the debtor despite the fact that they did not lose track of their repayments. Should that happen, your financial history and mortgage lawyer will help set the case straight, informing the lending institution of the error and asking them to update their records to avoid exaggerating the issue even more. 

Issues with the debtor’s finances

By no means is it illegal to fall back on repayments for the mortgage? In fact, considering the uncertainty of the financial system, banks and lending institutions are mandated by the law to allow a grace period for debtors to recover from their financial issues and submit their mortgage payments without incurring a penalty. Again, this is mandated by the law. So, due to some unforeseen and unfortunate circumstances, should you find yourself getting behind on repayments, there is no cause to worry about, especially for late fees. However, suppose your bank or financial institution does charge you a late fee. In that case, it might be time to let your mortgage lawyer know of the situation since these institutions are bound by law not to charge a late fee for a small issue with the debtor’s finances. 

‘Default’ status issues

Many banks and lending institutions are quick to label a debtor as ‘defaulted’ upon not receiving two or three repayments. Again, not everybody shares the same financial situation, and some people may experience difficulties in managing their finances on top of a mortgage to pay off. While this gap may be brief, financial institutions sometimes move to update the debtor’s status as defaulted. Again, this is both unethical and illegal since the law protects individuals from being deemed so owing to a financial hiccup, which is resolved quickly. Should your lending partner be engaged in such practices, it is always advisable to have a mortgage lawyer update them of the issue and ask them to reconsider the situation to avoid incurring any late surcharges or any other penalties, especially since the repayments might have started. 

Miscellaneous issues

Unfortunately, Other issues, including debt servicing, improper paperwork, or predatory lending and financing, are also common. Since mortgages are extremely common, it is easy to fall prey to such financial institutions and their promises. On the other hand, it is all too possible for the lending institutions to commit an error in the processing of repayments, which could seriously affect the finances of an-already strained debtor. In all of these cases, a mortgage lawyer can help you navigate the complex legal terrain and ensure that your financial and legal interests are not affected adversely in any way.

How a mortgage lawyer will help you with these

With a competent and experienced mortgage lawyer by your side, these issues will never grow to the point of worry. This is because mortgage lawyers are well-versed in the particulars of mortgaging laws and regulations and have usually had extensive experience of dealing with issues that might spring up on either side. The debtor may come up with some financial issues that might seem to threaten the continuity of the repayments, and in that case, a mortgage lawyer is imperative since they can always ensure you get some time to reorganize your finances before starting the repayments without incurring a penalty or fees. In general, mortgage lawyers can also help you with advice on monetary affairs and mortgage issues and will represent you in court to protect your legal and financial interests. 

The bottom line

Mortgaging is a complex procedure, and during this time, as life happens, certain circumstances may give rise to issues that could affect the mortgage itself. These issues may put an additional burden on the debtor, which is why engaging and retaining a mortgage lawyer is helpful in navigating these circumstances. Armed with the knowledge of the law and extensive experience, a mortgage attorney will ensure that no matter the circumstances, you and your financial interests are secured in a legal manner. 

Siddiqui Law Office: bonafide mortgage lawyers

Siddiqui Law Office is at your service for the best counsel and advice on common mortgage issues. We have experienced and professional mortgage lawyers ready to take on your case to ensure the best possible legal representation. Whether it’s negotiating with your lender about new applicable interest rates or helping you work your way out of a repayment issue, Siddiqui Law Office is poised to help you secure your legal and financial interests. For more information on how we can help you with your mortgage, visit us at Siddiqui Law Office.