How would this be handled? - Posted by Frank

Posted by Frank on June 27, 2001 at 22:12:41:

The reason I was under the impression that the new mortgage holder would have to start over with their own suit was because I was considering buying a mortgage once that was in foreclosure from the lender. I called an attorney about handling it for me and said since I would be buying the mortgage then I would have to start the foreclosure process over again and that I couldn’t just pick up where the lender left off. He said it would take at least 12 months before I would get the property back. I don’t know how good of an attorney he was or his experience was with foreclosures but I’ll check with another attorney to be sure.

It’s got me curious now.

Thanks again.

How would this be handled? - Posted by Frank

Posted by Frank on June 27, 2001 at 21:12:47:

I have a seller who is in foreclosure. The lender they had the loan with started foreclosure and turned things over to a collection company that is handling the foreclosure for them. While they were in the process of foreclosing the lender sold the mortgage to another company. They sent notification to the seller informing them their loan had been transfered to another lender. They also stated that if the property was in foreclosure that it would continue through the new mortgage holder automatically without any interruptions.

Now they get a notice from this collection company that was handling the foreclosure for the original lender stating their is a court date to have a hearing to enter a default judgement. They are suing under the original lenders name as the plantiff even though they no longer hold the mortgage since they sold it to someone else. Can they do this or would the suit have to be filed through the new mortgage holder that purchased the mortgage?

Since the original lender has sold the mortgage wouldn’t the new mortgage holder have to start the foreclosure process all over again? Or at least have the suit filed naming the new mortgage holder as the plaintiff?

Would this just be a matter of going to court on the court date set and having the case dismissed since the original lender no longer holds the mortgage and the suit is listing the original mortgage holder as the plaintiff or can they legally do this?

Re: How would this be handled? - Posted by JT - IN

Posted by JT - IN on June 27, 2001 at 22:36:45:

Caveat: I am NOT an Atty.

There should be NO problem with continuation of judgement on suit filed by previous mtg co. I see this all the time, as an affidavit being filed for a “Substitute Plaintiff” or successor; as long as they clearly have this same interest, and they do in this instance. (I read about 10 complete foreclosure suits/files each week, and this is common). Likewise, when a mtg is sold, the new mtg co, need not get a new mtg signed by the property owner. How come? Assignment rights. Those are clearly at play in this situation of a FC suit.

Just for kicks, you should review the schedule of this trial, and plan on attending the hearing for deficiancy judgement. See who says what, cause I have a feeling from your 3 or 4 posts here, that you aren’t going to believe that the Owner, or his Atty, couln’t just raise their hand, object like Perry Mason, and have this whole thing go away. Go see for yourself, it is an open (public) forum.


Re: How would this be handled? - Posted by Ronald * Starr

Posted by Ronald * Starr on June 27, 2001 at 21:33:58:


This is a question to be answered by an attorney or a careful study of the state law dealing with foreclosures.

My first impression is that this is probably absolutely correct. It makes no sense to me that somebody would have to back up when doing a foreclosure just because the holder of the loan has changed.

Also, since these are professionals doing the foreclosure, it doesn’t make a lot of sense to me that they would screw up a point like this.

But, check with an attorney, I am not an attorney. And I don’t even know in which state this is.

Good InvestingRon Starr**

Re: How would this be handled? - Posted by Frank

Posted by Frank on June 27, 2001 at 21:40:38:

Thanks for the reply.

What throws me off on this is even if they can continue the foreclosure process, how can they continue by naming the original lender as the plaintiff and not the new mortgage holder. They don’t even list the name of the new mortgage holder in the suit.

The property is in Illinois.

Re: How would this be handled? - Posted by Ronald * Starr

Posted by Ronald * Starr on June 27, 2001 at 21:52:54:


Sounds like you aren’t an attorney. Neither am I. Don’t go guessing what a person can do in a lawsuit. Find out the rules. Consult with somebody that knows or study the law yourself.

If you don’t want to pay an attorney for advice, you might try calling some of the other companies who do foreclosures and ask them about the law in this regard.

I’ll bet you that this is perfectly legal.

Good Investing*****Ron Starr**********