Can a lender foreclose on loan that’s current?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Can a lender foreclose on loan that’s current?
My lender who is a small bank left me an unpleasant message requesting that I sent them my financial records or they will foreclose on my property and that they need it as soon as possible. The bank has been calling me for the last couple months requesting that I send them the payment on the invoice date vs the grace period date. I have had this loan for the last 4 years and it never has been an issue. I will have to refinance the loan though in couple years as it is a balloon mortgage that matures in 2 years.
Asked on August 30, 2011 Illinois
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Whether or not the lender holding the mortgage or trust deed can foreclose upon the security for it due to not providing it financial records as requested would be determined by the terms of the mortgage or trust deed. Read it very carefully in that its terms and conditions control the obligations you owe to the lender and vice versa absent contrary state law.
Most likely the lender cannot foreclose on a current loan just because your do not provide your updated financials. I sense that the current owner of your loan is in a bad financial position and has been audited recently or will be audited soon. This is the reason for the records it wants from you to make it appear more secure from a lending position. There is probably concern about the balloon payment coming due soon.
If you need to refinance the balloon loan in the next couple of years, you might think about doing so now given the low interest rates.
Good question.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.