Often, struggling homeowners may have to make a tough choice: waive certain rights or face foreclosure. Some banks and others who handle mortgages can force homeowners to waive their right to ever sue the bank for anything related to the loan, even though mortgage servicers often make errors, have long delays, and lose documents, as well as violating some foreclosure processes.
While the practice of forcing homeowners to sign away their rights in order to receive a break on their mortgage has been has been banned by regulators, ProPublica reports that they identified and contacted eight banks and other mortgage servicers that offer help and then put borrowers in this compromised position. “Some said the inclusion of the waivers had been a mistake and would stop. Some argued that language that seemed to waive the homeowners rights didn’t actually do so. One argued that a loophole in a rule barring the practice meant their inclusion in certain agreements was proper,” the article said.
You can read the entire story from ProPublica here.
