Foreclosure Battle: Who Owns Your Loan?

November 19, 2008

Here’s what can go wrong when a mortgage lender sells your loan and doesn’t tell you. One hand is moving to foreclose and kick you out, while the other is telling you they want to negotiate a loan modification. The results aren’t pretty. This is the story of a Tampa woman faced with foreclosure.  She was negotiating with her lender to work-out a deal to stay in her home. Only one problem: the lender didn’t actually own her loan.

The actual owner, Freddie Mac, decided to move forward with foreclosure and never told her. They trashed her belongings and changed her locks. All a big shock, since she thought she was working out a deal to stay. This is the mess caused by the modern day mortgage process where they sell your loan off as a part of an investment called a mortgage backed security. The Tampa Tribune and WFLA Newschannel 8 in Tampa shined a light on the outrageous story. Here’s an excerpt of the story by Shannon Behnken in the Tampa Tribune:

TAMPA – Natalie Fuentes was about to lose her foreclosure battle when her lender said it would work out a loan modification so she could stay in her home of 13 years.

The lender, Washington Mutual, agreed to hold off on an eviction until the new loan was final, she said.

So she was stunned last month to find the locks had been changed. Her belongings, including her children’s baby photos, clothes and toys, were gone. The lawn and windows were blanketed with realty signs advertising the Carrollwood home for sale.

“I called the bank, and they said they didn’t know who had done this,” Fuentes said. “I called the real estate company and was told my stuff was trash and had been thrown away. We’re talking about stuff that can’t be replaced.”

Click here to read the entire story.

The Consumer Warning Network’s Terry Smiljanich was interviewed for the story.  He called the actions by Freddie Mac outrageous.  “Freddie Mac had no authority to go onto this woman’s property and throw out her stuff when they didn’t yet have title. They jumped the gun,” Smiljanich said.