The mortgage crisis has created an entire new industry: the foreclosure review company. These organizations review clients’ loan documents looking for mistakes. If a mistake is found (which apparently is pretty commonplace with high-risk California loans), the client can use it as leverage to stop the foreclosure proceedings.

One such company, CancelYourForeclosure.com, explains their work:

“Let us save your home or investment property. What we do is review your loan file and stop the foreclosure process. Most loan files have a number of errors, these errors can be grounds for your foreclosure to be postponed, canceled, your loan to be restructured, or all of your loan payments refunded back to you.”

I spoke with the company’s founder earlier today. He gave the example of a homeowner facing foreclosure, forced by his HELOC lender. The homeowners loan documents had some egregious mistakes, leading a judge to declare the loan illegal. The lender was forced to return the past interest payments on the HELOC; the borrower was only required to pay back the principle when the property was sold or the original mortgage was refinanced.

In cases where lenders have acted dishonestly or borrowers have been swindled, this service may certainly prove useful.

See Also:

Home Equity Line of Credit Foreclosures

Stated Income HELOCs and Bankruptcy

HELOC Borrower Tricked into Home Sale

Tags | Heloc, HELOC foreclosure, home equity line of credit, mortgage crisis