Video Response to MERS’ Comments on ForeclosureIndustry.com
Video: CA SB 94 Becomes Law: No More Upfront Fees for Loan Mods
Video: Coming Soon: Open Season on Appraisers in Arizona
Got a Wachovia Mortgage?
Is Wachovia your mortgage lender? One of my law firm contacts advises that Wachovia has been voluntarily offering principal reductions.
You can get a loan modification with a principal reduction on your own, but she reports that they’ve had success getting higher reductions for their represented clients.
Contact me at Christine@DesertEdgeLegal.com and I’ll connect you with the law firm handling these loan modifications.
One more thing: I don’t know how much longer they will offer these reductions because Wells Fargo acquired them, so time is of the essence if you’re going to attempt this on your own or hire an attorney.
ForeclosureIndustry.com Is Looking for an Expert on Securitization
I’m looking for an expert on securitization of mortgages. If you are familiar with how the process works, please contact me at Christine@DesertEdgeLegal.com.
How to Sue Your Lender for Predatory Lending Practices
Ok, so here’s my disclaimer: I’m not an attorney and not qualified to give you legal advice. I’m writing this post because I work with homeowners and attorneys all the time to help people fight foreclosure, and I know how it works, or at least how it’s supposed to work. However, please consult an attorney for legal advice specific to your situation.
First, check out this article that appeared in last week’s New York Times from Gretchen Morgenson. The judge in the case wiped away the entire loan debt!
This article brings me to my next point: the entire discussion around the mortgage mess, including loan modifications, has matured quite a bit over the last six or so months. We all know how loan mods work and hear the statistics every day about how the lenders and our government aren’t doing enough to help homeowners.
I’ve been saying this all along, but you need a big stick to get the lender to pay attention to you. And that big stick is a lawyer with lawsuit papers with the lender’s name on them.
This is where things are headed because there are more and more court cases talking about how a homeowner sued a lender and wound up owning their home free and clear because the lender didn’t do things correctly when the loan closed, or couldn’t produce the note, or any other number of things.
And, the other day I received the following comment from a reader, and I’m sure there are lots of you out there wondering the same thing, so I thought I’d write this post.
The comment reads as follows:
“Hi Christine:
I see if they can’t produce the note, or have other missing clauses in my loan, that I can fight it? This is amazing!!! I need more information however. I paid $100 to speak to an attorney here in Vegas, but he won’t file anything for under $3500, which I don’t have, and until I’ve been served with foreclosure paperwork.
If I have not been served with foreclosure paperwork yet, should I file a Produce the note request in court? If not, when should I? Have you heard of any Litton Loan customers who this strategy has worked for? Do I have grounds to file for a quiet title if they cannot produce the note, or are found after a loan audit, to have fraudulent paperwork? And lastly, how do I find out if MERS is the entity trying to foreclose.
Thanks Christine! You are an angel!!!!” (His words, not mine!)
It occurred to me after I read this comment that I’ve never done a post that explained exactly the steps for beating the lender to the punch when it comes to saving your home from foreclosure. So here’s everything I currently know about how to go about suing your lender for predatory lending.
The first step is to figure out what you want to do with the property. If you think you want to keep the property, get a loan audit. Get this piece done as early as you can so that you can be in a strong position long before the lender files for foreclosure or sends you a notice of trustee’s sale.
I’ve been doing loan audits for nearly a year now and find problems in 98% of the mortgage audits I perform. Some common things the lenders consistently screw up are miscalculated APR’s, undisclosed finance charges and missing disclosures required under TILA and RESPA.
Thinking of Walking Away?
My dad snail-mailed me an article last week (thanks Dad!) that appeared in the AARP News Bulletin about a woman named Archie Stewart, who abandoned her house in Cleveland (presumably because she couldn’t get the lender, HSBC Bank, to negotiate with her on her house payments, although the article doesn’t give specifics about her situation).
The article says that HSBC set Ms. Stewart’s home for foreclosure but never actually foreclosed on the home, which meant she still owned the property. Stewart, 62 and on Social Security, is still liable for the debt and the property.
The problem? She applied for subsidized housing but was rejected because she still owned a home. In her case, the home has become a public nuisance after being vandalized, and a lien remains on the home for more than it’s worth. She has no way of removing her name from the title of the home, and no one else wants the property, not even the bank.
The article says that her situation is not unique. Apparently, there are homeowners who find themselves in this situation, where servicers begin the foreclosure process, postpone the sale and never follow through with the foreclosure.
The article’s expert, Kermit Lind, a clinical law professor at Cleveland State University, says most homeowners in a walkaway situation have no recourse. Lind is working to propose state-level legislation to change that.
So, if you’ve walked away from a property, check with your local county recorder’s office to determine whether it’s actually been foreclosed upon. You might want to contact the lender to ask when the sale will take place.
If you’re thinking of walking away, be aware that this situation may happen. I suggest you continue to carry insurance on the property until the bank forecloses. If something happens to the abandoned property, you are responsible for it.Unless you’ve filed for bankruptcy, my guess is that you remain responsible for any damage or vandalism to the property, which could be even more financially devastating than simply walking away.
Breaking News: ABA Files Suit Challenging the Validity of the Repeal of AZ SB 1271
Well, we all knew it was just a matter of time before we heard from the Arizona Bankers Association over the repeal of SB 1271. They didn’t spend all that money to get the bill passed, only to see it repealed when everyone found out about it.
The greedy bankers are at it again! I wish I could say that I’m surprised.
The Associated Press reports that the Arizona Supreme Court is being asked to overturn budget legislation that repeals a controversial new state law on legal protections for homeowners after foreclosures.
The suit was apparently filed on Tuesday by the Arizona Bankers Association, who says the repealed legislation is unconstitutional on several grounds, namely because the issue wasn’t included in Gov. Jan Brewer’s special session call for action on budget and tax matters.
I don’t have much more information to report on this at the moment, but stay tuned. I’m sure it will get interesting.
What to Do If Your Servicer Won’t Tell You Who The Investor is on Your Note
I’ve been receiving LOTS of great questions from homeowners lately and I’m honored that you trust us enough to send us your questions.
Today I received an e-mail along the following lines, with the pertinent part in bold:
Hi Christine:
My servicer is National City. I have been trying to get a loan mod for 10 months.
You’ve probably heard this many times, but until I was in default I could not get their attention. Eventually they listened; of course my credit is now destroyed. Anyway, long story short my “modified” loan is now more than I was previously (and could not afford) paying, as my previous loan was 6% interest only, and the modified loan is 4% for 5 years, 5% for 25 years, but fully amortized.
My request to the servicer to find out my investor, so that I could talk to them, rather than a National City loss mitigation person was fruitless. National City claims they cannot reveal the investor. I even wrote a letter asking for the investor, but got a letter stating they could not reveal the investor because of some agreement they have.
How can I find out who owns my loan. If I am able to 3% interest I can stay in my home. As it is right now, I’m on borrowed time.
Is your B.S. alert on right now? Mine went off a long time ago. I wish I could say that I’m surprised, but I’m not. If this is happening to this person, I’m sure it’s happening to a lot of you because someone took the time to e-mail me (Christine@DesertEdgeLegal.com) about it. If there’s one person struggling with it, that means there are probably thousands of you out there struggling with the same issue.
Aside from the heartbreaking story of how the lender screwed another homeowner with a bad loan modification (please, save yourself this problem and have an attorney look over your loan mod agreement BEFORE you sign it!), the bigger issue I want to discuss is how to make your servicer reveal who owns your note.
Take a look at this link to Neil Garfield’s blog about how to get through to judges who are unfamiliar with securitization. This is good information (from a lawyer) who explains why you should force the servicer to tell you who the investor is on your note. The servicer, MERS, and everyone else playing the foreclosure game doesn’t have standing! Only the investor or mortgage pool has standing to foreclose.
As Garfield says, begin with the QWR. The lender has twenty days to acknowledge your correspondence and sixty days to make a good faith effort to provide the documents under RESPA.
If you don’t get a response or it’s not a complete response, send them another letter and bug the hell out of them. Threaten to file a lawsuit if they don’t comply and report them to the regulatory authorities. Make your voice heard!
After you get the response, get yourself a loan audit with an auditor who can research the chain of assignment issues, securitization and undisclosed finance charges. (I happen to know a really great loan auditor….)
Once you have the audit and a clear picture of what’s happening with your loan, you can proceed from there. Options may include filing a TILA/RESPA lawsuit, getting a loan modification or fighting foreclosure using the audit results.
If your QWR and loan audit reveals the lender is a mortgage pool, look on the Securities and Exchange Commission’s website, called the EDGAR database. There’s a wealth of information on that site and will reveal a lot of about the mortgage pool security.
Check this out: some of you have mortgages that may have already been paid off! For example: Aurora Loan Services is the servicing arm of Lehman Brothers, who securitized ALL of its mortgages. They cannot prove which of these loans have been paid, written down, bailed out or who even owns them.
Note: If you have a loan serviced by Aurora Loan Services, your loan is LIKELY securitized.
If, during the discovery phase of litigation it is revealed (1) payments from TARP (Troubled Asset Relief Program, a.k.a. “bailout”) or from investors have been applied to your collateral in the stream of securitization and investment and/or (2) the loan was table funded (your lender was paid a commission to “act” as the lender at the table, ostensibly to pretend to underwrite the loan, perform due diligence, confirm the appraisal, confirm the viability of the transaction, and confirm the affordability and benefits) and/or (3) the debt was released in bankruptcy, you may have a legal claim of satisfaction on some or all of your debt.
Loan modifications have been a great tool, but ultimately if you don’t owe the money on your loan, why modify it? This is why I think more people are missing the boat when it comes to resolving their mortgage issues with a loan modification. Many of you have serious predatory lending issues in your documents and have causes of action under TILA and RESPA that could show your loan was paid off. It’s possible that many of you are paying for something you really don’t owe.
Whatever you do, don’t wait until the last minute to deal with these issues. If you know you’re looking at a mess down the road, get started early. Sixty days isn’t a lot of time in the scope of a foreclosure filing. Plan ahead and execute so you have your strategy in place for whatever you want to accomplish.
As always, I love hearing from you, so send me an e-mail at Christine@DesertEdgeLegal.com or post your comments below.
