What To Do When You Must Face Foreclosure?
DON'T PANIC!!!
by Danny Hammond
- THERE IS HOPE If you are not interested in keeping the house the options are (a) simply walking away from it after you have spent a few months (or years) rent free, (b) a short-sale in which banks are sometimes paying some serious money to avoid litigation, (c) modification but there are two kinds.
The first is the one the bank steers people into which merely puts off the inevitable foreclosure and where you waive all your defenses, of which there are many more than you might think. The second is a HAMP or similar modification which can be forced in litigation because the truth is they are not considering the modification offer and certainly not transmitting it to the investor lender who bought a bogus mortgage bond.
So a well reasoned well documented modification proposal should be followed by a motion or lawsuit stating that they violated the HAMP statute by not considering it and that you can prove it --- by showing that your proposal produces a far better result for the investor than the impending foreclosure.
Our experience shows that when you demand to see what the "servicer" used as a standards or what the investor used as standards to consider the modification proposal the case settles on the terms or close to the terms proposed by the borrower, because they have no formula or even a record of who considered the proposal, much less any analysis showing a reasonable basis for rejecting the borrower's offer. Wrongful foreclosure lawsuit for damages:
This is favored by many lawyers, especially for those who no longer want to live in the home. It is a lawsuit for money damages only and includes the possibility of punitive damages. Some awards have been in the millions of dollars.
If you DO want to keep the house (which I recommend) you must follow the rules as to when to object, when to seek a Temporary restraining Order etc. As I explain thoroughly, it is far better to DENY AND DISCOVER than to make allegations where the burden is on you to prove facts that are exclusively known by the other side.
This is particularly effective after a bankruptcy where one party gets the automatic stay lifted and another party forecloses. That is as close to open and shut as we get. The Judges's order usually includes a finding that the party who moves for relief from stay is the owner of the loan.
So, the second party to actually foreclose, without getting a court order, lifting the stay for them to foreclose has comitted a crime. They can't say it doesn't matter because there has already been a finding of fact that the the first one to come to court alleged that they were the owner of the loan and the court entered the order on that basis. The second one is a stranger to the transaction, against which compensatory, punitive, exemplary damages are awardable and there is one developing case law showing that it is possible to get an award for emotional distress.
The action is a cause of action called wrongful foreclosure and it is recognized in all states in common law and in many states as statutory law. Be patient and make them commit to what their proffer is to the court so they can't turn it around after saying they made a mistake.
Wells Fargo, US Bank and BOA are among the banks fined millions for misrepresenting their true status in the loan chain and thus misrepresenting the status of the loan. Whether you are seeking damages for a home lost or trying to prevent the home from being lost, do not fall into the trap of following the documents.
All evidence points to the fact that the documents from beginning to end were fabricated and were not the result of ANY financial transaction, even with you when the loan was funded. There were two loan closings when you closed --- one which you knew about where a "naked nominee"with no money, no authority and nothing to do with the transaction rented their name to Wall Street to play the part of the lender and named on a note as the lender and named on the mortgage as the lender protected by the collateral of the house.
But you never had a financial transaction with THAT lender. And the closing agent should have informed you of the fact that there were two closings occurring. But they didn't. You thought there was due diligence and confirmation of the appraisal when it was just the reverse. The appraiser was told if they didn't come back with an appraisal at least $20k higher than the contract price or refi price then they would never work again. So the first closing had documents but no transaction. The second closing was a transaction but was not documented where the investor lender and borrower agreed to terms. There was no note, so that is why the battle cry of those defending these bogus foreclosures is DENY and DISCOVER.
Most lawyers and realtors don't understand or even want to understand the securitization scheme of Wall Street. They just want to use tired old procedures and defenses to justify their fee rather than win their case. The fact is that in many if not most cases, the servicer was paying the creditor your monthly payment whether you paid it or not, thus reducing the creditor's claim against you making the notice of default and notice of sale invalid.
The second major issue is that, as the San Francisco study and many others like it across the country discovered, was that the creditor who submitted a "credit bid" at auction had no right to order the auction much less submit a credit bid lieu of cash. While the attempts to "get a free house" are ascribed to homeowners, the real culprits are the banks and servicers who are seeking a free house by making it appear as though they are legitimate "lenders" or that they purchased the loan, and then they show the assignment.
But if in discovery you ask to see the transaction where they paid for that assignment and if you ask to see the trail of money where your loan was funded, you will find that nothing in the documents that were fabricated, forged, robo-signed etc. is true.
There was no transaction and the actual creditor has received payments that were not recorded and may well have settled and moved on to another investment vehicle. If you are getting the feeling that the banks claimed losses to get bailout and insurance money when they had actually used money of investors (often without the investors knowing there were ANY investments in mortgages) then you are right. The banks lost nothing on loan defaults and the bailout was a sham, and the odds are overwhelming in your favor that the part of the obligation that was intended to be secured with the collateral of the home was in fact never secured and therefore not subject to foreclosure.
Before taking any action on anyone's opinion in this column make absolutely certain you consult with an attorney who is fully conversant with the current mortgage and foreclosure climate. It is far different than it was ten years ago.
Tags: foreclosure, wrongful foreclosure | Categories: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud |
