Embattled homeowners battle foreclosures

Although relief is on the way for up to nine million American homeowners following the announcement last week by U.S. President Barack Obama of a plan to assist them to refinance their mortgages or stop foreclosure, some troubled homeowners are battling foreclosures by filing lawsuits against their lenders.

One strategy often used by borrowers is to have their mortgages rescinded, which cancels their loans if they are able to prove the lender did not follow the Truth in Lending Act by failing to spell out clearly loan costs and terms. Chicago lawyer Daniel Harris observed the rise in such cases that attorneys are starting to get selective which clients to take on. Harris is handling about 100 such cases.

The economic crisis has led to a 52 percent increase in foreclosure filings in the Chicago area in 2008, according to the Woodstock Institute.

Some residents attempt to find relief by consulting legal websites. An indicator of this is the over 20,000 hits daily registered by the online portal Consumer Warning Network, which offers free template legal documents. The website said the most popular template is a document that asks lenders to produce the original agreement which proves a debt is owed by the homeowner.
The self sufficiency in legally battling lenders is probably because troubled homeowners are no longer confident federal sponsored measures will work at all. Even U.S. President Barack Obama admitted the newly unveiled plan will not save every troubled home.

However, the president gave the assurance to Arizona residents to whom he first unveiled the $275 billion housing rescue package, "It will give millions of families resigned to financial ruin a chance to rebuild... It will prevent the worst consequences of this crisis from wreaking havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone."