Mortgage Forum

Joel Fraser

My parents were the victims of clear mortgage fraud in Minnesota a few years ago. The agent (who is now about to be sentenced for mail fraud in Federal court and has been the topic of many online blogs) forged my parent's and grandparent's signatures on closing papers and checks to get them a Adjustable Rate Mortgage. According to my father we never recieved disclosure on the TILA. However, my father was working 3 jobs (night jobs and one of the weekend) so he can't remember everything. In addition, my parent's home have a lien on it (from my grandparents) which was never cleared. The State Attorney contacted my father regarding this activity by the agent who they were investigating. They asked that he wait to file a lawsuit until he was caught. The agent would skim off equity off mortgages. Afterwards, they encouraged he look for an attorney. My dad refinanced the loan with a new lender (since interest was about to be raised), however, the title company did not disclose the lien on the house and the forgery. My parents have attempted numerous times to work with the new lender which they seldom replied. As they were progressing forward, the new lender did not know who actually owned the loan. Furthermore, after consulting and contacting a lawyer, the new lender admitted there was some wrong doing and offered $6,000 and to return the mortgage to 6.25% interest for a 3 year fix under the condition that they do not file a lawsuit. My parents filed a complaint against the original lender (who's bankrupt and has several judgements against them in Minnesota), the title company, the notrary (who's name is stamped on forged signatures), the agent (who's in Federal prison), and the new lender for violation of TILA (Regulation Z) since the title company did not disclose the lien on my parents house to the lender nor the forgery involved. Just recently the interest on my parent's loan went from 6% to 13%. In discussing settlements with the lender through their attorney, the lender was offering to return the loan to 6.25% for a 30-year fix. However, my parents were robbed $25,000 from the agent and other costs. So my parents are progressing forward with their lawsuit. But they have not recieved their monthly mortgage payment from the lender. Their attorney also hasn't recieved anything. So my question is, do they have to make mortgage payments if the lender isn't sending anything out? Couldn't it be argued that the loan is in modification therefore not necessary to make payment. Does one even have to make payments if they are sueing under TILA? Up until then my parents were not behind in their payments. In addition their child (myself who is under 21) had to help them make their monsterous monthly payments. They do not want to go into foreclosure and their attorney does not want them to make payments (which completely undermines not wanting to foreclosure). So should my parents hold on to their money in case the lender all of a sudden wants to foreclose on the house?