Can I sue my lender for refusal to help me with workout options?

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Can I sue my lender for refusal to help me with workout options?

I am currently in foreclosure. I have been trying to do workout deals with my lender such as loan modification, DIL, short sale, etc. since 2007. I am not getting anywhere. I have been giving the runaround, misleading information from different customer service reps, inconsistent information, etc I believe they are not trying to help me. I have tried numerous options within loss mitigation department. I was denied loan modification.

Asked on March 7, 2011 under Real Estate Law, Delaware

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Unfortunately, you appear to be laboring under a misconception--that your lender has to work with you, or that you have a right to workout or loan modification. It is, on the contrary, purely voluntary on the part of lenders whether they will try to work with debtors; they have the right to simply foreclose and, often, to sue as well for any remaining balance on the loan left after the home is sold at a foreclosure auction and the proceeds applied to the loan (called a "deficiency judgment"). Since your lender is under no legal obligation to work with you, you have no legal grounds to sue them; you can only sue for breach of a duty, if one in fact existed.


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