Getting out of a bad real estate deal

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NEW YORK (CNNMoney.com) -- Consumers are finding new tools to fight back against the deteriorating housing market.

The downturn of the real estate market has led a lot of purchasers to re-evaluate their condo purchases. And now there are companies out there that will help those folks get out of their contracts and get their deposit money back.

No-condo.com was started last year -it's a company staffed by lawyers who currently have about 10 cases in litigation.

How do they overturn a signed contract?

They find legal loopholes - they maintain there were certain procedures these firms were supposed to follow through on, but they failed to do so ...rendering the contract null and void.

It's not just condo buyers trying to get out of a deal. People who have seen their monthly mortgage payment balloon in cost often sue their lender, claiming that their mortgage documents are invalid.

Here are some reasons why: the lender may have failed to provide a good faith estimate of the loan cost, there may have been excessive fees or perhaps the lender created a false income for the borrower.

These borrowers threaten a lawsuit and that may encourage the lender to modify the loan instead of foreclosing on it.

It's a fairly new technique that's being used. One expert we talked to said that lenders have been slow to respond to inquiries.

Challenging the legality of your mortgage shouldn't be your first step. It's much more cost effective to try to work out a loan modification with your lender. But if you've been denied any kind of a workout, it may be worthwhile to give your mortgage documents a second look - paying close attention to good faith estimates and any modifications or addendums.

If you decide to pursue this route, you can get a forensic loan audit, but be prepared to pay at least $1,000. And make sure you vet any auditor you use with the better business bureau.

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