[Post updated related to COVID-19 forbearances] 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.
A note about our services. Our lender liability lawyers do not represent individual homeowners. If you are facing foreclosure, contact a local lawyer immediately. Don’t know where to turn? Try your state or county bar association. Most have a free lawyer referral service that will help you find the right lawyer.
Were You Denied a COVID 19 Related Forbearance?
Our foreclosure related services are primarily geared to large commercial and industrial borrowers. You can read more about what we do at our sister lender liability site. Our consumer services are limited to class actions. Presently we are investigating lenders that have violated the CARES Act by charging fees for COVID related forbearances or not giving borrowers sufficient time to get heir finances in order. (The CARES Act guarantees homeowners with government back loans up to 1 year of forbearance. VA, FHA, HUD, USDA, Fannie Mae and Freddie Mac loans are included.)
To learn more, see our CARES Act loan modification and forbearance investigation page.
For more information, please contact us online, by email or by phone . All inquiries are kept confidential.
Mahany Law – Giving Homeowners A Voice. Services available in many jurisdictions.