Legal tip to delay or even avoid foreclosure

[mckitterick]

verminiusrex suggests a way to delay foreclosure long enough to get your finances in order:

"Demand to see the note that proves that the mortgage company is owed the money. With so many trades and mortgages being bought in bulk, the companies often don't know where the paperwork is, so saying 'Produce the note' can apparently delay some foreclosures, since the companies are going to go after easier pickings first. Lawyers say that it's a good stalling tactic that may work to get finances in order, but eventually they usually find an electronic copy that is accepted in court."

I hope that none of you are facing this problem, but if you or someone you know is, this might help. Spread the word!

Best,
Chris

Comments

[tully01.livejournal.com]

Yep--if they sue for foreclosure and you don't stipulate to all the facts (and you SHOULDN'T) they have to prove you actually took out AND SIGNED the mortgage documents that they're suing over.

But it gets even better! In many cases, they can't find the original documents at all. The loans have been sold and re-sold so many times and so much time has passed that they can't be located even if they still exist...and sometimes they don't, but have been lost or destroyed. A few judges also balk at accepting electronic copies rather than originals, when there is any doubt, which can give you additonal leverage to work out the loan without losing the house.

So rather than losing your home to that foreclosure suit, there's a decent chance you can end up owning your home free and clear thanks to their suing you and being unable to prove their claim! And no matter what, even if they dig out the goods, you've still bought some time and maybe some bargaining leverage. :-)

[mckitterick.livejournal.com]

I hope the "even better" scenario works out for a lot of people. If we're bailing out the banks, at least a few of us taxpayers can get a house out of it!

[amjhawk.livejournal.com]

That's pretty clever - and says something about our times...

But actually, Jon Stewart had a pretty good idea (it has a few flaws, but I think it's one that it's actually worth discussing and building on):

Paraphrasing: Why not give the money to the people that owe the banks to pay back their loans? Then, you're bailing out the people at the bottom that need it most, and the banks still get capital to loan out and start the economy flowing again.

The most notable issues are a) enforcement - making sure people use said money to pay back said loans. And b) virtue - you're probably giving money to a lot of people who don't deserve it...

But who cares? Currently, we're giving money to people who don't deserve it anyway.

But yes, if you do the math, all the bailout money, in total, works out to over $5k per person in the U.S. Of course, not nearly everyone would even need that. Hell, just give it to everyone earning less than $100k or something, and all of a sudden you have a LOT of money flowing... again, probably far from the most effective use of funds - but definitely food for thought.

Personally, I think a modified version of Stewart's proposal, plus a complete transformation of the national energy grid (easily done with that money, and creating tons of jobs in the process) is the way to go.

[mckitterick.livejournal.com]

Hm, giving everyone who holds a mortgage - who earns less than $100k per person or $200k per household, for a home they live in - some $5000 - $10,000 would be huge. People have to apply, and the money is sent directly to the bank to pay down the loan. To receive the money, the bank then must negotiate to non-usuristic rates and terms (as described by the feds).

Viola! This would save homes, free up billions of buckies, and not be a black hole for money like the current plan.

Plus, dude, what home-owning taxpayer would be against that? Oh, right: the rich and the moralists. Pshaw. As if the bankers are moral in any way.

[fortyozspartan.livejournal.com]

Apartment owners! Give us money too!

[mckitterick.livejournal.com]

Don't they call those "condos"?

[roya-spirit.livejournal.com]

Also.. something that most folks don't know:

Even if the house is sold in foreclosure, in Kansas the original owner has a year to get finances in order and reclaim the house.
Gee, yay for something decent in Kansas, eh?

[mckitterick.livejournal.com]

Oh, interesting: Does that mean you might be able to buy the house back for the discounted foreclosure rate?

Do you have a link to KS.gov website that supports this? 'Cuz, if so, wow!

[tully01.livejournal.com]

It's called "right of redemption" and yes, in Kansas it runs for twelve months. You can find it at KSA 60-2414(a). BUT...you have to pay back the foreclosure sale price plus costs, interest, and taxes, and it's possible that you may have waived the right of redemption in the mortgage papers themselves.

If they can find them.....

[roya-spirit.livejournal.com]

No, it's not *that* groovy. It means you can get back to where you were by paying up the total you owed, plus expenses. AND the bank can sue you for the difference between the discounted foreclosure sale and the amount you still owe. That's federal, I believe. (and disclaimer, the rights of redemption may be void, depending on your mortgage agreement).

Actually, it's covered in the statutes you can search through on kslegislature.org.

Layperson's language can be found on most law firm sites dealing in foreclosures such as this one.

ETA.. oh, what ^ tully said. didn't know that had been posted when I answered.
Unfortunately, I have a bit of experience with this.

[tully01.livejournal.com]

Paying the difference (deficiency judgement) varies by state. In some states the lender's sole recourse is only against the collateral, namely the property itself. In others (including Kansas) they can come after you for the shortfall. Why walking away from upside-down loans is more popular in some states than others.

Sorry you've had the experience. Not a lawyer here--I know way too much about it from community work.

[roya-spirit.livejournal.com]

Thank you.
To our favor, we managed to rescue our home at the last day before the courthouse sale, and have kept it current ever since, and for that, I'm grateful.

[mckitterick.livejournal.com]

Yowza! I didn't realize it had been that close....

[roya-spirit.livejournal.com]

Yah, it took us time to scramble and get what we needed together, but the good thing is that it can be done.. no matter how bad the situation looks, there can be a way to fix it, even at the very last minute.
AND knowing what we know now, we would have done it differently.
The banks and what-have-you sure have the common folk over a barrel due to ignorance of the laws.

[tully01.livejournal.com]

Cheers for the successful rescue! Amen to the barrel. Lawyers can have their uses, even if they should be kept chained and muzzled most of the time.