how do you "contest" a foreclosure? - Posted by rm

Real Estate Investing
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Posted by JT-IN on December 20, 2003 at 06:35:15:

Hey JohnBoy:

What I was referring to when stating about the claim being fruitless, is as a part of the foreclosure case. The court will simply listen to the Motion and find for the Plaintiff based on the facts that there is "No material question as to the valiadity of the Note and encumbrance, and find for the Plaintiff for acceleration… I read this type thing all the time, amd these motions go down 100% of the time, as part of the foreclosure case.

Yes, they could file a separate lawsuit and approach it that way, but realistically how many folks who are in foreclosure, usually for lack of funds ot pay the payment, can afford to jut off on another lawsuit…? Such suits are edxpensive and time consuming, and unless a Claimant was out front of the foreclosure suit, the odds are great that the foreclosure suit would be done and gone, before any ruling even if favorable, in such a case. The only hope would be to forestall the forelosure via a Ch 13 while the suit for damages runs its course, but then the Debtor must pay the Ch 13 plan, plus legal costs, etc… Just doesn’t seem like it would work out in most cases… Theory yes, practivality no…

That is why I suggested the long arm of the AG, due to the fact that if they get involved it is on the taxpayers nickel… (nickel in this case is 5K, or more). Of cousre if a Lender is even smelling the heat from the AG, most of them are smart enough to know that the odor that they smell could be the frying of their own bacon… for fraud, racketeering, and the like, all of which could bring a major hurt on even a large player.

Coincidentally, I spent last evening reading over several cases involveing some folks who were referred to me several years ago. They were in foreclosure with good ole Fairbanks Capital for the second time. A first suit had been filed, then the mtg sold from the Money Store to Homecomings Financial, then dismissed. Later refiled and then dismissed a second time. The validity of the mortgage has been challenged by the Defendent due to a Rule 60b scenario, which states that you cannot file then dismiss and refile and dismiss, etc. w/o compormising the collectibility of the Note. They have been fighting this thing for now well over two years, at first getting a favorable ruling from the lower court, then the Plaintiff appealed the decision, only to have if overturned… Then the Defendent filed to take this to the Ohio Supreme Court which just refused to hear the case… “declining jurisdiction”, which doesn’t sound right to me, but they are the Supreme Court…

Anyway, long story… as short as I can make it… is, the Debtors have been in Ch 13 for a year and a half, and in reviewing their Bk case, the Creditor Homecomings has filed for, and received Relief from Stay of Bk on Dec 1st… so this baby will be going to foreclosure again… After several years of massive suits, etc.

I can’t imagine the cost to put on this suit to challenge the Rule 60b, then an appeal case by the Plaintiff… I would guess the cost of such a trial and appeal to be in the 30K to 50K range… Somehow their Atty must be doing some of this pro-bono because they simply do not have the funds for this type of defense… I just can’t imagine the whole thing.

Anyway, I have rambled and strayed off point with too many details on such a complex matter, but 99 out of 100 cases, the small guy gets crushed, either due ot lack of resources, knowledge or time… but they creamed in the end… And I’m not really saying that many shouldn’t either, due to their own lack of dscipline of rushing into a bad deal to begin with…

Great to hear from you again… Long time no hear… and yes, you’re Good… Hope all has been well for you. Happy Holidays.

JT-IN

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how do you “contest” a foreclosure? - Posted by rm

Posted by rm on December 19, 2003 at 15:13:22:

(Sorry, my original phraseology was incorrect.)

Could someone throw me a bone here?

Nobody in my area seems to know squat about foreclosures and short sales, be they title, mortgage, legal, or investor.

If you want to legally contest a foreclosure action…

What constitutes valid grounds for a suit?

Which court do you typically file in?

What sort of motion is made?

I have some deals (and some non-deals) where it appears that the homeowners have legitimate grounds for this type of action… some of the things these lenders are doing are downright EGREGIOUS.

If you could point me in the right direction, maybe I can figure out the rest.

Many thanks.

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Starting to sound emotionally involved - Posted by JT-IN

Posted by JT-IN on December 19, 2003 at 16:26:25:

rm:

One of the hardest things to do when you see some of what goes on is to remain at a distance… emotionally, and not render judgments on the Lenders, because you may not be seeing the whole picture. Especially do not render any legal advice, and it sounds like you could be on the verge of violating that advice soon…

First off, these folks are in default of a mtg obligation, in which there has been a suit filed for collection purposes. Unfortunately, due to many folks who have “dinked” the Lenders along, they have had to adopt a “take no prisoners” attitued, in hopes to survive; and some don’t still.

Now of course your post was extremely vague, so why not post a few examples of what is EGREGIOUS BEHAVIOUR on the part of the Lender, to infuriate you… Now remember, don’t respond emotionally, because you are not emotionally involved.

As far as anyone filing a suit to provide an answer, explanation, etc… why not file, or at tleast the homeowner/defendent could file an answer right to the Clerk of Courts in the active foreclosure case… appealing the judgment, or objecting to the direction of the process. Of course this attempt, if founded by FACTS, might be more successful if a competent Atty filed the motion.

Just the way that I view things…

JT-IN

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First, Go to law school… - Posted by Stew(NE)

Posted by Stew(NE) on December 19, 2003 at 15:27:35:

This sounds like you want to file suit…

have some deals (and some non-deals) where it appears that the homeowners have legitimate grounds for this type of action… some of the things these lenders are doing are downright EGREGIOUS.

…before you take on the lenders.

The advice you got was good for investing to make a profit. It sounds like you want to file some class-action suit or something. But who knows, give some examples maybe someone can help you

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Re: Starting to sound emotionally involved - Posted by rm

Posted by rm on December 19, 2003 at 19:33:13:

“Egregious behavior”

Lender: “Refinance your home loan with us, and we’ll lower your monthly payments by $200!”

Borrower: “Great- where do I sign?”

Re-fi closes, no paperwork is given to the borrower.

Being ignorant, timid, intimidated, whatever, borrower goes home with nothing.

First payment arrives.

It’s $200 HIGHER than the old payment.

And, the payment no longer includes taxes and insurance.

I’ve encountered 6 of these in the last few weeks- all through Ameriquest.

I’m not trying to save the world here, but I had seen or heard some things that there was a legal device that would allow people to challenge a foreclosure process.

Nearly all of the foreclosures in our state are by advertisement. When I hear something that sounds legitimate, I’d like to be able to give someone a chance to fight for their home.

I don’t give legal advice, but if I knew there were methods available to help someone who’s been taken advantage of, I’d like to be able to suggest that they investigate it.

And no, I don’t give legal advice.

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Re: First, Go to law school… - Posted by rm

Posted by rm on December 19, 2003 at 19:36:05:

Where did I say that I was going to file suit?

I’m simply asking if anyone knows or understands the process.

Since it appears that you don’t, I’ll simply thank you for the wonderfully helpful advice in your subject line.

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Re: Starting to sound emotionally involved - Posted by js-Indianapolis

Posted by js-Indianapolis on December 20, 2003 at 10:48:44:

Odd, Ameriquest called me looking to off some non performing loans they had in their portfolio. You think they know that X amount of people are going to not pay, and the 12% loans their giving will make up for it? So, it’s a profit thing?

I’m sure Ameriquest knows exactly what they’re doing. I?m sure they?ve got something signed somewhere saying the borrow understands what they?re doing. Unfortunately, predatory lending doesn’t include the demographic of the ignorant. They’re running rampant, hearing what they want, and then getting angry that the big bad bank tried to take it to em. Welllll…DUH. Did you expect a 6% fixed 2nd with a 100% first and a 500 credit score?

I used to get a little emotional about poor people in FC. Then I got a little smarter, and realized these people were all lying to me about the sob story. You can go crusade to save them, but I’d bet you’d be the lead man of a load of liars. Sorry, I?m jaded anymore.

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Re: Starting to sound emotionally involved - Posted by js-Indianapolis

Posted by js-Indianapolis on December 20, 2003 at 24:16:14:

Odd, Ameriquest called me looking to off some non performing loans they had in their portfolio. You think they know that X amount of people are going to not pay, and the 12% loans their giving will make up for it? So, it’s a profit thing?

I’m sure Ameriquest knows exactly what they’re doing. I?m sure they?ve got something signed somewhere saying the borrow understands what they?re doing. Unfortunately, predatory lending doesn’t include the demographic of the ignorant. They’re running rampant, hearing what they want, and then getting angry that the big bad bank tried to take it to em. Welllll…DUH. Did you expect a 6% fixed 2nd with a 100% first and a 500 credit score?

I used to get a little emotional about poor people in FC. Then I got a little smarter, and realized these people were all lying to me about the sob story. You can go crusade to save them, but I’d bet you’d be the lead man of a load of liars. Sorry, I?m jaded anymore.

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Ignorance isn’t Bliss… - Posted by JT-IN

Posted by JT-IN on December 19, 2003 at 21:30:54:

rm:

I have seen many cases just as you describe. I’m not sure that there is one cut and dried answer to these abuses, but in todays climate of concern over predatory lending practices, probably the best place to go with these complaints would be the Attorney General’s Office.

If one could amass several, or a dozen of these folks witht he same lender, so much the better.

A Debtor can always file a motion as part of the foreclosure case, but this would be futile, as the court will only deal with the fact at hand, the default of payments and is the procedure of law correct to accelerate the note…? Any claim that they were scammed at the time the loan was originated would be fruitless here.

So contact the AG’s office and ask some questions. Just let them know that you see this often and wonder what recourse they have through the AG’s office…? The more victimized that you can make them sound, the better… and who knows, this could turn into something.

Violations of Truth in Lending, and predatory practices are not viewed lightly today, except that they are hard to prove, unequivicably.

Wsh you good luck on the exercise…

JT-IN

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Re: Starting to sound emotionally involved - Posted by Philip

Posted by Philip on December 20, 2003 at 07:24:25:

I have only done few mobile home deals over a1 years time, yet I have become cynical also. The type of folks I have dealt with, buying, selling, looking, borrowing, repairing,…all have had some effect that makes me believe folks less.
You are not by yourself.
Philip

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Re: Ignorance isn’t Bliss… - Posted by JohnBoy

Posted by JohnBoy on December 20, 2003 at 01:06:26:

“Any claim that they were scammed at the time the loan was originated would be fruitless here.”

Not if they file a countersuit based on these claims. Of course, they would have to prove their case on the countersuit, but if they can do so, it wouldn’t be fruitless.

In fact, I know a few attorneys that have used these tatics to fight the foreclosure. One even said his client had an excellent chance of ending up with their home free and clear.

I was involved with one that was dragged through federal court for almost a year. That case was eventually dismissed. Then it was filed in county court. In the end the lender ended up waiving 3 years of defaulted payments, taxes, interest, and attorney fees to the tune of more than $70k…PLUS, they knocked off $5k of the principle balance and lowered the interest rate by 4% and modified the loan at a new 30 year fixed rate of 6%.

Now I know lenders work out modification agreements when loans are in default…but loans where the payments and taxes haven’t been paid in over 3 years and just waive all that and lower the rate over 4% to a new 6% 30 year fixed and knock off $5k of the principle balance owed before the loan went into default?

Why would a lender do this after all this time and after being dragged through the courts for 2 years with no end in sight? Because they were being faced with a major countersuit and the fact they didn’t even have a valid mortgage due to their incompetence.

Man, I’m good!!! (((((smile)))))