Lender's Foreclosure Attempt Of Alleged Predatory Loan To 75-Year Old Widow Hits Roadblock As C. Florida Non-Profit Law Firm Steps In, Files Suit

In Sarasota, Florida, the Sarasota Herald Tribune reports:

• Mildred McClendon's troubles with a small second mortgage show just how quickly people caught up in predatory home loans can find themselves on the verge of losing their home. The 75-year-old Sarasota widow, her attorneys say, was granted a second mortgage that was written up illegally, and the lender then tried to foreclose, even though McClendon continued to make her monthly payments.

• Along the way, they say she was also charged bogus late fees and penalties, and in just the past 10 months the mortgage company doubled the amount McClendon is said to owe -- from $8,000 to $16,000. Then the firm then offered a settlement agreement that would allow it to take her $55,000 home of 40 years if she missed just one payment.(1)

• A local legal aid group has helped McClendon file a lawsuit against Nationstar Mortgage in Texas. It is the first of many lawsuits Gulfcoast Legal Services(2) expects to file to make mortgage companies and collection agencies treat troubled Southwest Florida homeowners more fairly.

• McClendon's case has so many loan irregularities on such a small amount owed that Gulfcoast Legal attorney Elizabeth Boyle is optimistic McClendon will not owe anything after her lawsuit goes through the courts. "It's rare that this relatively early in the case we would have so much evidence of wrongdoing," Boyle said.

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• The lawsuit is related to others Gulfcoast Legal Services plans to file on behalf of troubled homeowners who made mortgage payments for months on modified mortgages only to have the lender file a foreclosure anyway.

For more, see Second loan turns into a foreclosure nightmare.

(1) Go here for more on The Predatory Nature of Home Loan Modifications.

(2) Gulfcoast Legal Services is a Central Florida-based non-profit corporation providing free legal aid to income eligible residents of the greater Tampa Bay area, having offices in Pinellas, Manatee, Sarasota and Hillsborough Counties.