Legal action against homeowners uneven, varied

Readers of this blog should already realize that every case involving debt, bankruptcy and/or foreclosure is different. However, too many people still make the mistake of thinking that if their situation is similar to someone else’s, their outcome will be similar as well. That can be a costly misconception.

For example, people who lose a home in foreclosure can face legal proceedings to collect an outstanding mortgage balance. However, this process will look different for every person.

Recently, a report in Bloomberg Business pointed out this fact by examining numerous claims filed by Heritage, a company that bought junior liens after foreclosure. According to the report, the company filed legal claims against about 300 homeowners seeking repayment of the mortgage in addition to punitive damages, in some cases.

The article goes on to point out the fact that there were a number of different resolutions in these cases, from dismissed requests by Heritage and settlements to summary judgments and dismissal. The reasons for the varied outcomes stem from the unique circumstances of the people involved.

For instance, legal representation played a significant role for homeowners. Some lawyers were able to poke holes in Heritage’s claims while others negotiated settlements. Further, the individual judges in each case played a role in the numerous outcomes. Some judges allowed expert testimony that others denied, affecting Heritage’s claims.

What this report should show readers is that every case is different and there is no guarantee of a particular outcome simply because another case was settled that way.

With this in mind, you should understand the importance of working with a lawyer who is familiar with bankruptcy laws, the legal system, as well as the countless details that can and will affect your individual case. With proper guidance and support, you can stand up to banks and other companies to protect yourself and your financial future.

Source: Bloomberg Business, “Why Hundreds of Nearly Identical Bankruptcy Claims Yielded Vastly Different Results in the Aftermath of the Housing Bubble,” Tracy Alloway, Feb. 3, 2016