The Truth About the Foreclosure Cases Won by Homeowners
Have you availed mortgage loans to acquire your dream home? Then you must read this article. A majority of the homeowners who avail mortgages are not fully aware of all the deed clauses. It is quite easy to fall prey to the foreclosure proceedings if you have not read your mortgage deed or document thoroughly. We do not mean that most bankers out there are waiting to pounce on their borrowers who default. However, we have seen some of the cases show that banks are more interested in making money from foreclosure cases rather than wait for the borrower to settle their dues.
Foreclosure frauds are also quite rampant in the industry, which has led to people losing trust in these institutions. The subprime mortgage crisis in late 2000 opened a can of worms in the mortgage industry, which was previously ignored by the Government. This incident exposed the dark side of the mortgage companies in the US. If you are on the verge of facing foreclosure actions from the lender, learn more about some of the cases that were ruled in favor of homeowners. It is always better to be well informed and be aware, as we are not sure when we might have to face such situations. This will better prepare you to fight for your rights when you file for foreclosure defense.
Here we present you with some of the case studies that mostly relate to bankers’ fraudulent activities and help you get an idea of how to deal with the situation god forbid if you ever land in any.
1. Sorenson v. Bank of New York Mellon, Case No: 2D16-273 –
This case dates back to 2009, where the bank had filed a foreclosure case against the homeowner. However, the loan documents did not have the required endorsements to show the legal transfer to the Trustee involved in the foreclosure.
It so happened that later in 2015, during one of the hearings, the endorsements were fraudulently added to the paperwork.
The court also never considered giving the borrower the chance to argue that the bank did not have the right to foreclose as they had backdated the documents to prove their legal right.
In 2016, through his legal counsel, the borrower applied to the court asking permission to argue fraud on the part of the bank. Again, it was denied citing the case was aging, and the borrower has surpassed the period to be allowed to file defenses.
Not taken aback by the court’s ruling, the borrower and his legal counsel filed an appeal to the appellate court requesting the homeowner be given the right to argue a fraud case on the part of the bank.
Though the court agreed that the case was too old as per the statute of limitations, it also noted that the case’s delays were mostly due to the bank’s erroneous records. The silver lining came in the court’s judgment that the homeowner is given the right to argue the fraud allegation against the bank. This also helped the borrower to get some time and stop the foreclosure.
Homeowners should show the grit and determination to fight for their rights and also appeal even to the highest authority, the Supreme court. Most importantly, they should have the support of an experienced and well-read legal counsel.
2. The Miser and other Homeowners v/s Bank of America Case for Loan Modification
In 2008 when the foreclosure crisis was at its peak, a couple in Sweetwater, Tennessee applied loan modification to the mortgage lender after jack lost his job; they tried all possible ways to get the bank to modify their loan with no success.
After more than a year’s struggle, Jewel and Jack decided to move legally as the bank was proceeding with the foreclosure process to remedy the debt collection. However, the lawyer they found was able to challenge the mortgage company that had shoddy paperwork concerning the mortgage and note to proceed with the foreclosure.
In a historic settlement, the bank agreed to modify the loan terms and effectively cut the monthly mortgage payments of the Miser’s to 15 percent. In addition to this, they also got their legal fees paid and were also able to stop foreclosure proceedings.
3. The Connecticut Supreme Court Ruling in Favour of Mortgage Borrowers
In the case of US Bank v/s Blowers, the ruling of the lower courts was challenged by the Housing Clinic, which took up the case in the larger interest of homeowners trying to stop foreclosures.
Blowers’s case was a homeowner who defaulted on his mortgage payments due to the recession in 2010. The bank argued that both parties agreed to a loan modification. However, even after the borrower paid up several installments on time, the bank canceled the modification.
Over the years, the bank devised several other modifications, which increased the monthly payments. Even the plaintiff seemed to have ignored the borrower’s request for additional deadlines to clear his dues.
Finally, when the Housing Clinic took up the case and cited several other cases similar to Blowers, the Supreme Court noticed the misconduct on the part of the bank. It served a ruling in favor of the homeowner. This judgment helped the Blowers and other borrowers who were facing unscrupulous activities from lenders forcing them to accept foreclosures. It also reminded banks to act in adherence to the regulations and ethics to protect the borrowers’ rights.
The real estate market suffered a setback after the 2008 crisis due to the shoddy and improper underwriting practices of the mortgage servicers. The effects of this were felt across the economy. Banks resorting to unfair practices of managing their mortgage were also partly responsible for the crisis. Rulings such as this are sure to restore the confidence of the homeowners in the judiciary.
Though we have Government-backed institutions such as Fannie Mae to oversee the mortgage market’s efficient conduct and make housing finance more affordable, frauds are still not a rarity. Availing mortgages have become a lot easier. However, the debt recovery and practices followed to foreclose homes still appear questionable. Being informed about the pitfalls and risks in availing of mortgage loans and a lot of research will save you from the drawbacks of availing a mortgage.
Debt collectors will resort to all means to ensure they improve the mortgage company’s revenue earning prospects. It is in your best interest to have professional and legal help on hand to make sure you do not have to face the after-effects of a default. In case you are facing a foreclosure or need immediate cash to clear your mortgage, give us a call. We assure you of help within 5 days of you contacting us.