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Can we sue our mortgage lender for damages caused by their agent for improperly winterizing our home?
Anonymous5 views7 answers
We had a closing date set for a short sale, but before we could close we discovered major water damage to the floors and mold on the walls. This was caused by an agent hired by our mortgage company to winterize our home. They shut off the water inside the home without properly draining the radiators which resulted in $25,000 worth of damages. The lender has refused the repair estimate and advised us to contact Fannie Mae to file a value dispute. Why are we being asked to absorb the monetary costs by accepting a lower sale price? This will greatly increase the deficit we are responsible for. We are ready to proceed with further legal action against all parties involved, however we need to know how to proceed. Can someone please advise what the best course of action would be moving forward?
With the limited facts you've shared on , that burden may be difficult to meet. If you believe your case to be meritorious, then consult an attorney that will be able to fill in the blanks from your post.
Best of luck to you!
The best course of action for you at this point is to hire a real estate litigator if you have not already done so. There is really little that we can do for you in this simple Q&A forum except to direct you to what you need to do next.
You are not going to solve this by way of a question and answer forum--you are going to need to hire an attorney. Obviously, there will be questions as to why the lender was responsible for winterizing the property when it appears you were still the owner, but that is something you can address with your attorney.
If you haven't closed yet this would be a good opportunity to walk away, if possible. Lawsuits are a gamble. Why bother yourself with years of frustration and attorney expense (you will most likely be unable to find one to take the case on contingency)? I would not buy a damaged house unless I was willing to fix it. Consult your real estate attorney and see how you can walk from the purchase.
My firm has occasionally sued mortgage lenders and property preservation companies in similar situations so it is definitely possible, but whether it is advisable in your case is very fact specific. Your mortgage contains a clause which allows them to take action to preserve the property when necessary. To prove it wasn't necessary, you would need photos, copies of paid utility bills and witnesses who could say that you were maintaining the property. If you did not discover this problem for so long that mold damage had already occurred, you may have a hard time making a convincing argument that you were properly monitoring the property. The best cases are cases where they also removed valuable possessions. Talk to a real estate or consumer law attorney about all of your specific facts to see if they believe you have a successful case, and be careful about signing anything without having an attorney review it.
The answer depends on whether the mortgage company had any right to access the property. It also depends on whether you are in the midst of a foreclosure action, and where in that timeline you are at.
My colleagues that suggest walking away do have a good point. There may also be benefits to bringing claims if there is already a foreclosure action in progress. You should talk this over with a real estate attorney with foreclosure and loss mitigation experience.
