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

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

What is MERS?

In current headlines, MERS is that Middle East Respiratory Syndrome that starts with flu-like systems and goes bad from there.  MERS also stands for ‘Mortgage Electronic Registration Systems, Inc.’  You may recognize it as the brand name for finding your mortgage loan servicer and / or the owner of your note. Know your mortgage servicer—that is who you should send your mortgage payments to.  It is also the company you ask to negotiate the terms of your loan if you have difficulty making those payments.  Cannot find your mortgage servicer?  MERS usually can, using the property address, borrower’s name and Social Security number, or mortgage identification number.  With some additional information, they can also find the owner of your note in most cases. MERS is only known to lead to death in the medical context.  In the mortgage context, MERS can help you find the correct company to negotiate your loan.   Read More

Standard Operating Procedures in Foreclosure Mediation

Negotiations with your loan servicer is not neuroscience, but you do need to work with a brain that has the authority to make a deal.  In most cases, the loan servicer sends someone with as much creativity and signing power as a toenail clipping.  Let us say you are dealing with a large law firm that is representing your mortgage loan servicer, the standard operating procedure goes something like this: You send them something and it takes ten days to get to the right person.   The person you talk to on the phone is not the person in charge of your file.   The person (who is not in charge of your file) tells you, “We cannot give you what you want, but we’ll take your information”  (after you have already provided said information eight hundred times in triplicate).  That would not happen in Bankruptcy Court. Bankruptcy is becoming a popular standard operating procedure for borrowers because it motivates more meaningful conversations with the loan servicer. A Bankruptcy Mediation requires the representative to appear in person (not by telephone) and to have authority to make a deal.  Furthermore, there are monetary consequences for non-compliance with the rules, and there are audit […] 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 Dog Ate My Mortgage Note

Once upon a time Ms. and Mrs. Joe Homeowner took out a bank loan with Taylor, Bean & Whitaker (TB&W).  Then Mr. and Mrs.  Homeowner came into financial hardship and stopped making mortgage payments.  TB&W had gone out of business at that point, and the Homeowners were being sued for foreclosure by Loan Servicer, Inc. While TB&W was the originator, after two years they had lost the note, and failed to file an Affidavit of Lost Note before they sold the Homeowner’s loan to Loan Servicer, Inc.  Therefore Loan Servicer, Inc. lacked authority in this matter and was not the proper party to foreclose on the Homeowner’s property.  This case should have been thrown out. But it was not. Mr. and Mrs. Homeowner owed the money, they knew they owed the money, and they let the foreclosure go to judgment without bothering to verify what was going on or to look for other options. Because they did not defend themselves, Mr. and Mrs. Homeowner lost their house to Loan Servicer, Inc. who claimed, “The dog my Mortgage Note.” Foreclosure Defense is not a denial of debt, but it is a way to pursue another outcome, perhaps through a short sale […] Read More

Mistaken Identity in Foreclosure

Mrs. Widow Homeowner had paid her mortgage all her life, even after her husband passed away, and she was still making her payments on time every month.  First, Woolworth Wealth sent her a foreclosure lawsuit, and then she received another foreclosure lawsuit from Montgomery Mortgage.  You can imagine the Judge’s surprise when both plaintiffs showed up in the courtroom against Mrs. Homeowner, especially when Mrs. Homeowner arrived with a pocketbook full of cancelled checks from her regular payments. It happens.  Banks and loan servicers do not always have their records right. Just because a bank or loan servicer has the experience of handling thousands of similar accounts, that does not necessarily mean they have yours right.  You may need to seek legal counsel to defend you against mistaken identity. Read More

Fuzzy Photos of Foreclosure Mediation

Foreclosure mediation—you ever seen one of these work?  You may have fuzzy photos, but there are better portraits of the Loch Ness monster than a clear picture of success through foreclosure mediation.  In theory it is great; in practice it is…. The problem is no person on the planet has authority to negotiate.   The loan servicer is supposed to send a representative with full signing power, but with mortgage-backed securities, the loan ownership is so ambiguous that there is no one who can make decisions beyond HAMP (Home Affordable Modification Program).  Bigfoot’s autograph has more signing power than the loan servicer’s representative. Furthermore, the homeowner is entitled to HAMP anyway.  Homeowners should not have to spend their time and money (half of the mediation fee) on foreclosure mediation when they are already entitled to the result. Not much of a negotiation if there is only one outcome, and even less value for the homeowner if has to pay for what he was already entitled to. Read More

Procedure, Procedure, Procedure in Foreclosure Court

The key to Foreclosure Defense is PROCEDURE, PROCEDURE, PROCEDURE.  Court procedure is supposed to apply a legal protocol of checks and balances, assuring that both sides of a case are fairly heard.  Witnesses should be sworn in, Rules of Evidence should be followed, and Justice should be served.  However, procedure is getting short-changed in some foreclosure courts. Procedure is sometimes cited at the core of the foreclosure debacle.  Starting with the Borrower and the Original Lender:  did the Lender run down his checklist to make sure the Borrower fully qualified for the loan?  Then following the chain of ownership of the loan:  did the note follow the mortgage?  Was the debt transferred properly?  If not, then who really has the right to foreclose on the house?  If the Borrower resolves with the Current Loan Servicer, will another financial institution also claim a right to that debt?  Procedure is no small matter when it comes to legal jurisdiction…and procedure should be no small matter in courtroom procedure. Proper procedure is the difference between hoping and hopping in court.  That is right, I am talking about Kangaroo Court, where foreclosure cases come in and get bounced out without consideration of proper procedure.  […] Read More