In difficult economic times, people hope that they can meet all their financial obligations. However, there are times when that just isn’t possible. While there are some safety nets that can provide debt relief, there are times when people face losing their possessions. In particular, people’s homes can often be at risk if they cannot pay their mortgage. Through a legal process called foreclosure, a bank can claim ownership over a Tennessee home.

However, in order for a bank to foreclose on a home, the bank — or other lending institution — must follow very specific legal guidelines. There are consumer protection statutes in place to keep people from losing their home before these steps have been taken. When lending institutions fail to adhere to these foreclosure proceedings, homeowners may have legal rights.

Recently, Tennessee homeowners that lost their homes to foreclosure between Jan. 1, 2009 and Dec. 31, 2012 may have received compensation. Ocwen — a national lending institution — was paying Tennessee residents for illegal foreclosures and other servicing abuses according to the terms of a settlement reached with the federal government. In total, $2.6 million was being given to more than 2,000 Tennessee residents. On average, residents will receive around $1,100. The company will also provide loan modifications and principal reductions for debtors as part of the settlement.

Tennessee residents who risk losing their homes to foreclosure should understand their legal options. They also need to make sure the lending institute takes all proper steps before a foreclosure is completed. By protecting these rights people may be able to remain in their home. Sometimes people have options — like filing for bankruptcy — that can stop a foreclosure from happening.

Source: Macon County Times, “More than 2,300 foreclosed Tennessee borrowers receiving checks,” Leigh Ann A. Jones, Dec. 11, 2014