by Brian Mahany
We like rooting for the underdog. Particularly when the underdog has no lawyer and takes on the Federal Home Loan Mortgage Company (“Freddie Mac”). Freddie Mac is a government sponsored enterprise with over $2 trillion in assets. They certainly can afford great lawyers and take on small homeowners who dare take on the government alone. If you were wondering who might be crazy enough to try such a thing, meet Keith Mitan. He not only took on the mortgage elite all by himself, he won.
Wells Fargo foreclosed on the home of Frank Mitan. While the case was pending, Frank died and Keith became his personal representative. Under Michigan law, mortgage companies can foreclose by advertisement. Such procedures are available in a minority of states. We don’t like them because the process is fraught with peril and fraud. In our opinion, having a judge review every step of the foreclosure process is a much better way to go.
After the foreclosure, Freddie Mac purchased the home at a sheriff’s sale. Prior to the end of the redemption period, Mitan filed suit against Freddie Mac. The trial court tossed Mitan’s challenges but last month the 6th Circuit Court of Appeals reversed the decision. This is a huge win for Mitan and Michigan homeowners in general.
Michigan law was amended after the foreclosure crisis began. State law requires lenders to offer a loan modification to borrowers that qualify. If there is a dispute, foreclosures are supposed to be handled by a judge and banks can no longer just simply proceed by advertisement. Although Wells Fargo says that Mitan never replied to modifications discussions, Frank Mitan disagrees. Anyone involved in loan modification negotiations with the big banks knows that the banks repeatedly lose paperwork, provide erroneous information and generally mistreat and mislead borrowers.
Mitan’s case will head back to the trial court for a hearing to determine whether Wells Fargo properly assessed Mitan’s eligibility for a modification. Our guess? They did not.
The take home from this case is that non-judicial foreclosures are fraught with peril. At least courts in Michigan will now be required to really scrutinize whether borrowers were eligible for a modification before they simply throw out a challenge to the foreclosure. If the lender failed to do so, courts in Michigan must unwind the sale.
The mortgage fraud lawyers at Mahany & Ertl do not handle traditional mortgage foreclosure defense cases. Instead, we are a boutique law firm that sues banks for wrongful foreclosures and denials of loan modifications. If you believe that you are the victim of a foreclosure fraud, wrongful foreclosure or have been ripped off by a bank, give us a call. Our lender liability lawyers have helped homeowners across the United States.
Mahany & Ertl – Giving Homeowners A Voice. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and coming soon, San Francisco, California. Services available in many jurisdictions.