For some time now, I have been listening to people discuss the relative merits of demanding that a mortgage company produce the actual note.
When I discussed it with an attorney, I realized the problem. Nobody understands what the real argument is! An attorney specifically said to me that a judge told him that if his client expects the court to strip the mortgage off the property and give the defendant a free house than “he is mistaken”. This is when I discovered why this attorney, and likely yours, is having difficulty defending this position. The problem is that you do owe somebody money for your house. You must complain that don’t owe money to the company that is suing you.
When you admit that you owe money you change the nature of the argument and are now asking the bank that is suing you to prove something different than they expect. The banks and the judge start by presuming you owe them money and have at least photocopies of documents to prove it. You must then argue why you don’t owe money. By arguing that you owe money, but not to these people in particular, they must now prove that even though they may have the mortgage paperwork, that you did, at the time they filed foreclosure owe the money to them and not someone else. They must also prove that this has not changed since the suit was filed.
Here is an example: What if Countrywide lent you the money? It is fairly common belief that Bank of America took over the assets of Countrywide and therefore it would be easy to ASSUME that you now owe bank of America. In reality, many companies bought assets from Countrywide.
What if yours is just on the list that Bank of America got but has not actually been transferred to Bank of America and instead belongs to Bank X? Bank X has decided that because of the value of your house, it is better for them to wait a few years for the market to come back before suing you. You are forced into court by BOA and must defend against their seemingly powerful position. If they win, don’t you still owe the money to Bank X? Bank X may now sue you and because they own the loan they may recover and you have no recourse against BOA because your appeal rights have expired.
The bottom line is that you must argue that you owe money but not to the bank that is suing you and you don’t know who you actually owe money!
October 6th, 2011 at 1:46 am
I am the happy owner of a repossessed property bought on auction
for well-below the market value. After searching the web for a decent site for repossessed property, I came across this site. The site is worth visiting, since the whole process of searching was done online, even the bidding.
October 6th, 2011 at 11:46 am
Your post should serve both as warning and as hope for my readers. The people who lost that home you bought didn’t know how to fight and ultimately failed to keep it. You as a buyer had an opportunity to get a home in which you could afford to live. The biggest problem with saving your home is that once you get behind, you now need a boat load of cash to catch up because the bank will only accept the full amount you are behind. Here is an idea for those of you who will lose your home no matter what: Many of my readers could pay the mortgage now if only the bank was willing to move the payments to the back end and extend the mortgage the amount of time you were behind. Since it takes a long time to lose your house in most places particularly if you are fighting, pay the amount of mortgage money into a savings account and use it toward your next house! For many of you that money might even buy a house completely and you will never have mortgage again!
Since the prices of houses is so different this is true in many markets. Besides this, some banks or private individuals will lend you the money to buy again because you have such a large down payment that their risk is small.
Here is an example: Let’s say you currently have a mortgage for $175,000, your payment at 5% is $1856.15. Your payment to an attorney might be as small (in Chicago) as $1,500 or, less than one mortgage payment. If the attorney can stretch your foreclosure out to 18 months, which is possible here and likely other places if the attorney is smart and asks the right questions, you can save a lump sum of cash equaling $33,410.00 and if you have not been paying the tax that might add another $10,000 for a grand total cash collected of $43,410.00!
I happen to know that in this particular development, a small house has dropped in value to the point that a foreclosed home needing some work might be had for between $40,000-$75,000! With your savings, you could buy a house for cash or perhaps borrow as little as 43% of the home value. This would be a good deal for a “hard money” lender and if you paid him off in 2 years at 24% interest, your payment would only be $1982.67, only $126.52 more than your old payment which we already decided you can afford because you are back to work or whatever.
Even if you decided to rent, this extra cash could pay for a new car or payoff enough debts that you will have an easier time making your payments or saving for that new house.