Last week I saw this article about a foreclosure in California that I just had to share with you. It highlights what not to do when your mortgage company starts to foreclose on your mortgage. It also highlights how mortgage companies can mishandle foreclosures.
In June of 2008 Elba Coronado received a Notice of Default from her mortgage company, Countrywide Home Loans. She was embarrassed that she was in that position. She didn’t check with anyone. She didn’t research what she could do about it. She thought Countrywide had a right to take possession of her condo. After all she was behind on her mortgage payments and didn’t see how she could catch up. In August she moved out of her condo and into an apartment.
Sometime prior to this the attorneys general in several states filed legal action against Countrywide. (One of these was the attorney general of California.) The action they filed said that Countrywide was not treating people fairly when they were filing foreclosure actions against them.
To settle that legal action, Countrywide stopped the foreclosure process on many mortgages in these states. On these mortgages Countrywide agreed to work with the people to do loan modifications to help them save their homes.
One of the people whose mortgage was selected was Elba.
The only problem was that Countrywide never notified Elba that they had stopped the foreclosure proceedings. Here there was a dispute about what actually happened. Elba says that Countrywide never told her that they would work with her to modify her loan. Countrywide claimed that Elba never told them that she had moved out.
One issue Elba has is that the reason she fell behind on her mortgage payments was that she had two jobs. She lost one of these. She believes that she does not make enough from the job she still has to pay even the reduced mortgage payment she may get from Countrywide. Elba would like to keep her condo. However, she does not see how she can.
Ever since last August Elba’s condo has been vacant. Since Countrywide has not followed through on the foreclosure, she technically still owns the condo. No one has maintained the property. Elba owes all of the back taxes due on it.
One other item – Elba did not get her mortgage through Countrywide when she bought the condo. She got it through Accredited Home Lenders. They were a subprime mortgage company.
Although the article does not indicate what, if any, action Elba took to try to save her condo, it looks like she gave up as soon as she got the Notice of Default. It does not look like she consulted a lawyer or an expert skilled in helping people facing foreclosures save their homes.
If she had consulted a lawyer, the lawyer could have looked to see if Elba’s original mortgage company, Accredited Home Lenders, made any mistakes at closing which would nullify the terms of the mortgage. If they did, the lawyer may have been able to negotiate a lower monthly mortgage payment which Elba could have paid. This payment may have been much lower than the payment Countrywide had offered her.
If Accredited Home Lenders made no legal mistakes at the original closing, the lawyer or an expert in the field could have negotiated a modification to the mortgage which may have helped Elba save her condo. Her again this may have been lower than the payment Countrywide offered her.
I also want you to look at how Countrywide messed up here. As part of a settlement of a legal action they had to stop the foreclosure process on many mortgage and offer modifications. Elba’s mortgage was selected. I am sure that you would agree with me. Countrywide’s handling of her case left much to be desired.
Countrywide did not notify her properly. They did not even know that she had moved out of the condo. They made no attempt to track her down.
In the settlement with the attorneys general, Countrywide agreed to modify 400,000 mortgages. These totaled $8.68 billion.
How many other people in the same situation like Elba did Countrywide fail to notify properly?
If you are facing foreclosure and have a mortgage through Countrywide, run – don’t walk – to a lawyer or an expert skilled in helping people in your situation as soon as possible. You don’t want to be victimized the way Elba was.
Even if you have a mortgage company other than Countrywide, mistakes like this can happen. The entire system is backlogged with foreclosures. Right now mortgage companies are not properly staffed to handle the volume. They are making all types of errors.
Much Success,
Mark Elkins
May 26th, 2009 at 8:13 pm
I have called and asked for help, from my mortgage company and faxed over all needed documents. I called to check on this and i got a recording under my account number stating that they have stopped the collections and will be calling me back in 1 month to go over my mortgage issue and not to call them until then. Should i get a lawyer?
June 3rd, 2009 at 10:33 am
It seems from your post that the mortgage company got everything they needed. If you want to be sure, try to get through to the department that is handling the modification either by pushing the button for additional help or by not putting in your account number when you call. You will be able then to ask if they have everything they need. If you are uncertain after that, get all the paperwork you faxed together, write boldly at the top and bottom of each page the account number and fax again. Then take a copy of everything you sent and put in an envelope for CERTIFIED MAIL from the United States Postal Service, with return receipt requested. Be certain that it is addressed to the department and person that you are dealing with. You will be able to get a delivery confirmation on the internet but you will also get that little green card back. In all states the original rules regarding proof of delivery were written before FedEx and similar delivery services were formed and may remain in their original form on the books. In either case, if you end up fighting, you will be able to prove that you sent the things you claim.