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

Choice Point in Home Foreclosure: Answer to the Foreclosure Summons

So you have not made a mortgage payment in months and get served a foreclosure lawsuit—what now?  You have 20 days from your receipt of that court summons to file an Answer…or do nothing. If you DO NOT file a valid Answer with the court within those 20 days, a Summary Judgment Request may be filed against you, and you give up your right to contest the foreclosure.  Once a Final Summary Judgment is entered, a foreclosure sale date is set, then your house is sold on the courthouse steps, a Certificate of Title is issued to the new owner, and you will be served an eviction notice. If you DO file a valid Answer with the court within those 20 days, you have a chance at a better outcome. (Note:  If you have not made your mortgage payments just to live in a free house, the judge probably will not be inclined to rule in your favor.  Getting a free house from a foreclosure proceeding happens about as often as popsicle sightings on the sun.) With the help of a HUD-certified counselor or an attorney, you can file a valid Answer with the court, and pursue a strategy with […] Read More

What Isn’t A Negotiable Instrument?

A Negotiable Instrument is an unconditional promise to pay a certain amount of money and no other undertakings.  It is like a courier without luggage. Some notes are negotiable instruments, but not all. When you buy a car, that note is not a negotiable instrument because that note has so many things with it.  You cannot just say pay to the order of…and endorse it over to someone else.  It is a note, but not a negotiable instrument. Whereas, if you write a check to me, and I lose the check, someone who picks up the check can cash it.  A check is a negotiable instrument. Similarly, most mortgages have notes that are negotiable instruments.  If you have the note, you can transfer enforcement of a foreclose.  A reverse mortgage note; however, is not a negotiable instrument—you cannot endorse it and hand it to someone—possession is not going to work.   Read More

Short Sale & Reverse Mortgage

A Short Sale does not usually happen quickly and you do not have to drive backwards to get a Reverse Mortgage.  Both are strategies to deal with mortgage debt, but which has the best benefit depends on your situation (and if you qualify). A Short Sale is when the lender agrees to accept less than a full payoff of the mortgage balance.  The lender gets a smaller amount than what is owed, but generally more than if the lender finished the foreclosure and sold the property themselves.  The homeowner typically sacrifices his credit on the altar of getting the short sale done, but usually a Short Sale is not as bad on a credit score as a completed foreclosure lawsuit (or Bankruptcy). A Short Sale is often best for the universe when a borrower cannot pay his mortgage—the bank receives more than they would otherwise in foreclosure, the homeowner gets out of a house he cannot afford and can start to rebuild his credit, and the neighborhood gets a new owner faster—instead of leaving the house vacant for months—which helps maintain property value in the area.  Also the transaction stays local, benefitting the local economy—the vendors involved in the completion […] Read More

Zombie Debt

The Double Tap and Beware of Bathrooms are a couple of survival rules from the Zombieland movie.  While you are waiting for the Zombie Apocalypse to carry away unwanted relatives, do not lose your head to Zombie Debt. Zombies are generally slow, but relentless, like debts that do not realize they are dead.  People are victimized by Zombie Debt simply because they do not know any better. Once upon a time in 2007, a bank foreclosed on a property, the Foreclosure Judgment was entered, but the foreclosure sale got cancelled.  The debt was signed to another company, which started suing on it in 2013, after the Statute of Limitations had already run on it.  Furthermore, the Note and Mortgage merged into that Foreclosure Judgment.  The Note and Mortgage no longer exist; only the Foreclosure Judgment exists. Though the debt has been dead for a while, it does not realize it is dead and is back in court.    There are business models for going after Zombie Debt—make more money than they lose.  Those companies pursuing Zombie Debt do not expect every case to pay off, but they employ zombie strategy of menace in numbers to make more profits than losses.  […] Read More

‘Watch Man Fighting to Keep Home’

Once upon a time there was a man literate only enough to sign his name.  He needed a loan to help him pay his property taxes; what he got was a lease with an option to buy back his homestead at interest rates well over criminal usury.  This is no fairytale.  See a First Coast News clip about the case at http://link.brightcove.com/services/player/bcpid2857356515001?bckey=AQ~~,AAAACCo2HcE~,Xq6bv4z8O3WrBlTuUCc4XcMYQJmz5JX6&bclid=0&bctid=3386650672001. Read More

Opening a Chapter on Lender Negotiations

Bankruptcy is not for everybody, but sometimes it is the best way to have a meaningful negotiation with your lender.  Whereas foreclosure mediation is generally limited to a HAMP modification, bankruptcy court offers sanctions to motivate lenders to come prepared with full authority to make a deal. Thus Chapter 13 Bankruptcies have been on the rise.  Known as the ‘Wage-Earner Plan,’ Chapter 13 protects your assets while you make payments, and allows you to catch up on unsecured debt.  It acts like a consolidation loan—you make payments to a Bankruptcy Trustee, who then distributes funds to your creditors. Bankruptcy should not be entered lightly.  Especially because of the complexity and recent major changes to the law, consult competent legal counsel before you file any chapter of bankruptcy.  For general information about Bankruptcy, the US Courts offer the following link:  http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter13.aspx.   Read More

Good Partnership for Mortgage Modification – St. Johns Housing Partnership

A mortgage modification may be rarer than Bigfoot frosted in unicorn dust.  While there is no EASY way to get a mortgage modification, the less difficult way is to go through St. Johns Housing Partnership (SJHP). SJHP is non-profit agency whose services are offered to the public regardless of income.  They are sensitive to what their clients are going through, and they are knowledgeable and experienced negotiating with lenders on a loan modification that works for everybody.  SJHP does a background check on their clients without waiting for the bank to do one.  They get good results because they do the homework ahead of time.  There is no way to predict how long a mortgage modification will take, but you have a better chance to a permanent solution with SJHP. To learn more about St. Johns Housing Partnership, contact them at (904) 824-0902 (www.sjhp.org ). Mortgage modification is a very good idea in concept.  St. Johns Housing Partnership may be able to make it a reality, giving relief to local homeowners by negotiating monthly payments they can afford. http://staugustine.com/news/business/2014-02-02/st-johns-county-housing-partnership-provides-alternatives-foreclosure#.UvErbvldV2A     Read More

When a Foreclosure is Not

When is a foreclosure NOT a foreclosure?  Answer:  when the party that filed the lawsuit lacks the authority to foreclose…but you need a Foreclosure Defense to determine that. A foreclosure sale becomes a reality on your credit score when you lose your house because of a foreclosure lawsuit, regardless of who filed the complaint.  In most cases, the plaintiff will prevail if not challenged even if that plaintiff does not have all the proper documents in place. Sometimes the legal action gets ahead of the paperwork.  In transferring the debt collection from one loan servicer to the next, the authority to foreclose can lag behind the collection of the mortgage debt. If Party A does not own the home loan, it should be difficult for Party A to foreclosure on the property.  However in most cases, the homeowner does not put up a Foreclosure Defense, and the authority to foreclose is not questioned.  A Foreclosure Defense is not a denial of debt, but it asks the other side to prove their case—to verify their authority and the details of what is owed.  Time is a side effect of Foreclosure Defense, time for a homeowner to pursue an alternative such as […] Read More

Time Effect of Foreclosure Defense

When defending a home foreclosure, I never have a client come into court and say, “I made all my payments.”  Usually the property owner has missed mortgage payments.  Foreclosure Defense is not as much about Where did this lawsuit come from? as it is about Where am I going? Foreclosure Defense asks the loan servicer to prove their case—to verify the debt amount and their authority to foreclose, etc.  The side-effect to Foreclosure Defense is time…time to pursue an alternative outcome, such as short sale or mortgage modification, which generally will not be as bad on your credit as a foreclosure sale. With Foreclosure Defense, you are looking for your best benefit.  You are not going to win a free house any more than you will get an all expense-paid trip to Tahiti.  But you will get time to pursue your best option for a better financial future.   Read More