Changing Horses in Mid-Foreclosure

Once upon a time a Lender and a Loan Servicer were in a very busy horse race to get to the end of the home foreclosure crisis.  The Lender was very busy indeed, and the Loan Servicer said, “Give me these files and I will foreclose them before you can get to them.”  The Lender was far too busy to even assign the mortgages to the Loan Servicer before the Loan Servicer started filing foreclosures. You cannot really do that.  The plaintiff has to have subject matter jurisdiction in order to bring the complaint before the court.  If the Lender starts the case and then transfers the loan to the Loan Servicer, that is fine.  But if the Loan Servicer files the foreclosure case AND THEN the Lender assigns the loan to that Servicer—that is a problem. The plaintiff was not the right plaintiff.  All those foreclosure cases had to be dismissed and re-filed by the right party, which slowed the race to finish the foreclosure crisis. Do not file foreclosure before you have subject matter jurisdiction, and do not change plaintiffs in mid-foreclosure.   Read More

Foreclosure Case Dismissed Without Prejudice

A mortgage foreclosure trial can be over in 30 seconds if the Plaintiff is not allowed to have witnesses or exhibits.  Court procedures come with deadlines, and if the lender does not turn in their witness list or evidence on time, the lender might not get to use them…and that could result in a foreclosure case dismissed without prejudice. Having a case dismissed ‘without prejudice’ does not necessarily mean the fight is over… ‘without prejudice’ means the Plaintiff can re-file a suit on the same claim. A home foreclosure dismissed ‘without prejudice’ gives the lender an opportunity to get their case together.  However, while the homeowner is waiting for the lender to re-file, the homeowner has time to pursue an alternative outcome, like a short sale or mortgage modification. Seek competent legal counsel to help review personal and financial factors, and to pursue a strategy to bring you the best benefit for your circumstances.     Read More

Things Happen

Job loss, medical hardship, death in the family—these are some of things that can make mortgage payments difficult.  The reason does not matter according to the law, but a legal defense can make a big difference for homeowners facing foreclosure. A lot of things have happened that cause problems with home loans.  Originators did things badly, and servicers have done things badly too.  (Not all loan servicers are that way, but some are.)   Foreclosure defense gives homeowners an opportunity to review their circumstances and legal choices, and pursue a strategy towards their best benefit.  Foreclosure defense addresses the litigation while providing time for an alternative to occur, such as short sale, mortgage modification, or reverse mortgage. Things can happen during a foreclosure defense which can result in a different outcome.  Read More

Why Defend a Foreclosure?

Why Defend a Foreclosure? In 99% of foreclosure cases, the client did not pay.  So why defend them?  The goal of a foreclosure defense is to modify the loan or work something else out.  NOT to say the client is innocent or to get a free house.   When the recent foreclosure crisis started, plaintiffs were making stuff up.  Then they were having people sign off of documents that they had no knowledge of.  “Linda Green” was apparently Vice President in charge of robo-signers for a number of different banks, along with “Bogus Assignee.” Homeowners knew they owed money, they knew they had not made payments, but they had no idea what their lender was doing to compromise their rights as debtors.  Many Florida homeowners went into foreclosure without ever questioning their lenders.  Thus they gave up rights as well as opportunities to seek a resolution with the best benefit to them. Because defense attorneys got involved in the foreclosure crisis, people’s rights were protected, and plaintiffs are doing a better job.   Read More

Bankruptcy Mediation Promotes More Meaningful Negotiations

Bankruptcy has long-term consequences you need to know and understand before you file.  However, sometimes Bankruptcy is the only way to have a meaningful conversation with your mortgage servicer. In Foreclosure Mediation, typically the bank’s representative appears by phone and does not have the authority to negotiate anything other than a HAMP modification (which the borrower is entitled to anyway without the added mediation fee).  It is difficult to negotiate if there is only one outcome possible. Bankruptcy is a way to make the bank put their money where their mediation is.  A Bankruptcy Mediation is different because it requires the representative to appear in person and to have authority to make a deal.  Bankruptcy Court has more teeth with monetary consequences for the bank if they do not comply with the rules. Even if you are having trouble communicating with your mortgage servicer, Bankruptcy is not for everybody.  Seek competent legal counsel to discuss all your personal and financial goals, and what legal choices are available to you.   Read More

Most Wonderful Time…In Foreclosure Defense

The time of gift giving often happens before a foreclosure trial, when you get a settlement instead of a sale on the courthouse steps.  It is the most wonderful time of the year no matter what season, but it generally is not going to happen without prompting from a foreclosure defense. If the loan servicer and the home loan borrower can come to an agreement before the trial, then they can avoid the time and expense of litigation.  It can be the best outcome for both parties in a non-ideal situation.  Usually it takes a foreclosure defense to facilitate this kind of result. Without a foreclosure defense, the loan servicer’s case is going to go through the court system unquestioned and therefore most likely unfulfilled by further generosity.  “No” is always the answer if you do not ask.  However, if the borrower raises a legal defense, then the loan servicer is more motivated to look deeper into the file and see how much they can give. Charity starts at home…but your loan servicer is not going to remember that without a foreclosure defense to remind them.  If you are facing foreclosure, seek competent legal counsel to open a dialogue of […] Read More

Bankruptcy to Get a Modification

Chapter 13 Bankruptcies are becoming more popular—why?  The main reason is to get a mortgage modification.  Bankruptcy forces the lender into a meaningful negotiation…one with real sanctions. Eighty thousand dollars is the going rate for not coming prepared.  Lenders could avoid the threat of this kind of price tag if they would send the right person to negotiate mortgage modifications, someone who has authority and can get creative. A lot of homeowners do not fight back, and lenders are not prepared to encounter a foreclosure defense.  It can take them six to eight months to get the records—why?  Do they have to go make them?  Is the lender too busy?  Do they have to Photoshop the documents? Bankruptcy is not for everybody.  Neither is mortgage modification.  Seek competent legal counsel if you are facing home foreclosure to develop a strategy that best fits you.   Read More

Good Housekeeping in Foreclosure Cases

If the Loan Servicer did everything right, what is a homeowner going to do in a foreclosure defense, say that he made the payments?  Technical issues are often the only things a homeowner has in a foreclosure case…and they can be enough to pursue a foreclosure alternative. The Rules for Trial require the Plaintiff thirty days before the docket sounding to give the name, address, and telephone number for witnesses they plan to use.  What typically happens in foreclosure cases is the Plaintiff writes in “Corporate Representative.”  That does not give the Defense any humans to depose. If the Plaintiff (the lender or loan servicer) is going to use witnesses, they have to name them so the Defense (the homeowner) has the chance to question them before trial.  If the Plaintiff is challenged on this practice (by a legal defense), they often voluntarily dismiss the case.  (That does not mean it goes away; they will get their case together and re-file, but in the meantime the homeowner can pursue a different outcome.) Often the best way to solve the problem for the homeowner is through mortgage modification or short sale, but these things take time.  A Foreclosure Defense that insist […] Read More

Standing & Foreclosing on Solid Ground

If the lenders and loan servicers have done their jobs right, what is a foreclosure defense attorney going to say?  In many cases, lenders and loan servicers have left room for conversation about alternatives to foreclosure. Private lenders usually do not sell their loans; whereas, with institutional lenders, the servicing of a loan gets transferred.  The biggest issue we have with these institutional lenders is standing.  There is no personal knowledge of the loan, so the servicer must rely on business records to prove their case.  If they only have records from the time they have been servicing the loan, then their standing to foreclose on the property comes into question. There should be no doubt about the facts in a foreclosure summary judgment hearing.  Very often lenders or loan servicers are unprepared to prove their authority to foreclosure because they lack witnesses and proper business records…but very often these lenders and loan servicers prevail because most homeowners do not put a legal defense. A Foreclosure Defense is not a denial of debt, but it asks the other side to prove their case…and in the meantime gives the homeowner an opportunity to pursue an alternative to foreclosure, an outcome towards […] Read More

The FDIC Footfall on Home Loans

It takes the owner of a loan to modify that loan…the other shoe to fall is FDIC insurance. A foreclosure often nets a bank less than half of the loan’s unpaid balance, so why do they not negotiate instead of letting the home go into foreclosure?  Easy answer:  money.  As banks buy banks and take over loan servicing, they are insured for loss through the Federal Deposit Insurance Corporation. In 1933 the Glass-Steagall Act created a temporary governmental corporation called the Federal Deposit Insurance Corporation (FDIC).  The FDIC guarantees the safety of deposits up to $250,000 per depositor per insured bank.  Thus bank customers are assured a certain amount backed by the federal government.  However, that insurance may interfere with your mortgage negotiations. The bank may let your house go on the courthouse steps for far less than what you could have gotten in a short sale.  That is not necessarily the bank being lazy.  That is the bank making more money through an FDIC claim (with the added benefit of not having to go through the hassle of negotiation with the homeowner). Because of FDIC insurance, the lender, or servicer, is not highly motivated to modify the loan.  That […] Read More