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Fight Foreclosure: Buying More Time

October 6, 2008


Here’s the insanity of the mortgage mess created by lenders:  a homeowner gets behind a few payments, gets back on her feet and when she tries to pay, they won’t take her money.  No, apparently lenders would rather have the taxpayers’ money. “How can this be?” you ask.  No lender WANTS to foreclose, right? (see related articles “Mortgage Work-Out Myth” and “Mortgage Servicers Secret”)  Just watch this story from the Tampa NBC affliliate WFLA which highlights the ridiculous brick wall many homeowners run into when they get behind in payments and try to catch up.

Jacci O’Brien’s battle with Wachovia is a perfect example of why homeowners facing unfair foreclosure actions must fight back.  The Produce the Note strategy gives homeowners a way to do that.  It’s time to force the lenders to negotiate with homeowners who WANT to stay in their homes and, yes, WANT to pay their mortgages.  Watch the video below for more information on how to use the “Produce the Note” strategy.

Read more in the excerpt below from an article in the Tampa Tribune: Foreclosure Looming:  You Can Buy Time

By SHANNON BEHNKEN

Published: October 5, 2008

There were 14,960 foreclosure filings in the Tampa metro area during the second quarter, according to California-based RealtyTrac. That’s up 159 percent from the same period a year ago. The Sunshine State had the second-highest number of foreclosure filings among all states in August, with 44,000 default notices, auction sale notices and bank repossessions.

In Florida, lenders have to get a court’s permission to take a home. In the majority of cases, the borrower doesn’t even show up in court. When foreclosure suits aren’t contested, the process takes, on average, about seven months.

That’s a lot longer than in some states, such as Georgia, where lenders can evict homeowners in as little as a month. Still, homeowners who want more time, or think they’re being treated unfairly, can try to delay foreclosure.

The most prevalent method is as simple as making the lender prove it owns the mortgage, said Chris Hoyer, a Tampa lawyer who has made a YouTube video to help homeowners. He also has posted forms at www.consumerwarningnetwork.com to guide homeowners through the process if they don’t have an attorney. Hoyer’s office concentrates on class-action suits and doesn’t typically do foreclosure work.

About 80 percent of foreclosure lawsuits don’t contain the original mortgage note – the proof that the lender has a right to foreclose, lawyers said. This is because mortgages often were sold in bundles to investors during the housing boom. The notes were sometimes misplaced.

The produce-the-note strategy is a delay tactic on its face, but Hoyer said it can protect homeowners. In Tennessee, for example, he said a woman lost her home in foreclosure only to receive a foreclosure filing later from another lender who claimed the rights to the home.

In other cases, Hoyer said, mortgages were sold to servicing companies and homeowners weren’t notified. They later received foreclosure filings because they had been making mortgage payments to the wrong company. Once they got behind, fees started to pile up.

One motivation to fight, Hoyer said, is to hang on until help arrives. The federal government soon may be offering relief to some financially strapped homeowners.

Although lenders say they want to help homeowners avoid foreclosure, Hoyer said sometimes they make it more difficult.

He said client Jacci O’Brien of Belleair Beach is an example.

When she fell behind on her mortgage payments last fall amid a family illness, she tried to catch up. However, her mortgage had been sold, and the new lender, Wachovia, wouldn’t take her money, she said, and filed to foreclose.

“It wasn’t a case that I didn’t have the money to pay them,” she said. “It was a case that they wouldn’t accept my money. It was shocking.”

A judge delayed the foreclosure in June because Wachovia had not produced the note. Hoyer said he’s waiting on paperwork outlining what O’Brien owes, including penalties that grow each month. She hasn’t made a payment in nearly a year.

“Jacci wants to stay in her home,” Hoyer said. “She wants to pay her mortgage.”

Another reason to fight is the amount of excessive fees some lenders charge, said Katherine Porter, an associate professor who specializes in bankruptcy at the University of Iowa College of Law. In nearly half the foreclosure cases she studied recently, she found hefty or vaguely described fees.

It’s difficult to say how many lenders begin foreclosure on loans they can’t prove they own. To get a better idea, Porter recently combed through 1,733 bankruptcy files for homeowners who faced foreclosure. She found 40 percent contained no proof the plaintiff owned the mortgage.

“My impression is that most mortgage companies would be able to come up with documents to prove it eventually, but it’s also my impression that lenders are being sloppy and not following all the rules because they’re swamped,” Porter said. “This opens up doors for consumers to fight.”

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Written by editwizard · Filed Under Featured