by Brian Mahany
The story of Trevor Douglas has become typical in today’s wild foreclosure climate.* Trevor purchased a home in Orlando 6 years ago. When the economy crashed in 2008, he fell behind on his mortgage. Ultimately his lender started foreclosure proceedings. That was two years ago. Trevor is still living in his home, however. Why?
Trevor hired a good lawyer, one that convinced a court to make his lender prove that they owned the mortgage. Thus far the lender has not been able to find the mortgage, according to a story in Time.
Since refinancing his home, Trevor’s mortgage has been bought and sold five times. Seven different banks have been involved and somewhere in the process, the original mortgage went missing.
Many would think that something as important as a mortgage would not get lost. According to the Time story, however, one professor from Harvard said that banks lost over 400,000 loan documents last year – and that’s just in the cases that go to court.
Until recently, many courts were still taking the word of lenders and letting the foreclosure proceed. In other words, the court would simply gloss over the paperwork formalities. Times have changed now, however. Courts are getting increasingly frustrated with shoddy recordkeeping and penalizing lenders. The ultimate penalty is not allowing the foreclosure to proceed until the proper paperwork is found.
As I have written before, stalled court hearings are great for those faced with losing their home. But with thousands of foreclosures now being put on hold, the housing market is not likely to recover. Until the inventory of foreclosed properties is reduced, home prices are not likely to rise.
What should you do if you receive a foreclosure notice? Hire a lawyer. The money you spend could keep you in house for months or even years. In a few cases, courts have simply dismissed the foreclosure action completely. It’s hard to raise money for a lawyer when things are tight but you may save much, much more in the long run.
* Kudos to Time / CNN for breaking this story – investigative journalism at its finest.
Mahany & Ertl is a full service law firm offering foreclosure defense throughout Wisconsin. Often we can represent you on a flat fee basis and help you remain in your home. Contact our Milwaukee mortgage foreclosure lawyers at (414) 704-6731 for a no obligation, no nonsense consultation.
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