by Brian Mahany
As we have said many times, the tide is beginning to turn against big banks and in favor of homeowners. For many years, courts simply rubber stamped foreclosure petitions. Now they are much more carefully scrutinized; particularly those filed by the nations largest banks – the so called “too big to fail.”
Last week the Michigan Court of Appeals upheld a trial court decision tossing a suit filed by Citibank.
Last year, Citibank filed a foreclosure action against James and Janelle Renner. The Renners sought to have the suit dismissed because the their mortgage note listed Lendingtree Loans as the lender. Although its not unusual for residential mortgages to be sold, the servicer or note holder seeking to foreclose must prove that it has standing to sue.
Anyone following the MERS debacle in recent years knows that banks often can’t find the assignment. Some lenders (and apparently their lawyers too) have resorted to forging missing paperwork. That obviously doesn’t sit well with courts either. While most homeowners won’t dispute that they have fallen behind, it’s often difficult for them to figure out who holds their loan. Borrowers are understandably reluctant to negotiate with a servicer absent proof that the servicer actually has authority to settle any disputes.
In the Renner case, the trial judge dismissed the foreclosure complaint after Citibank could not timely provide a copy of the assignment of the note and mortgage. Ultimately Citi claims they found and mailed the necessary paperwork but not in time for the judge.
Citibank appealed the judge’s dismissal but still lost again. A panel of 3 appeals court judges unanimously ruled that the trial court was within its discretion when enforcing timelines and did not have to consider the bank’s paperwork once the deadlines had passed.
The result is somewhat harsh – the bank says they were a day late. We view the decision as a signal from trial judges who are getting fed up with delays, missing paperwork and procedural problems in foreclosure cases. We have seen several foreclosure cases involving Citi, Chase, Wells Fargo and Bank of America in which the lender simply dismisses it case whenever a deadline looms. If that were the end of the case we wouldn’t complain but usually, the lender simply refiles again at a future date.
That might work for lenders that have plenty of money for high priced lawyers but borrowers who are already struggling to stay in their homes can ill afford to litigate the same claim two or three times.
If you feel like you were the subject of a wrongful foreclosure or denial of a HAMP loan modification, give us a call. Our fraud lawyers specialize in suing banks and mortgage companies for fraud and predatory lending practices. We are not a traditional foreclosure defense firm, rather we sue banks seeking monetary damages.
Mahany & Ertl – Giving Homeowners A Voice. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota. Services available in many jurisdictions.