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You’ve been served with a foreclosure action. Like many people, you are probably receiving lots of advice and unsolicited mail and telephone calls urging you to take one action or another. Foreclosure is overwhelming enough and now you have to decide what to do. Depending on your situation, there may be options for you and picking the best one is a matter of understanding the facts and circumstances and reviewing them with someone who is knowledgeable about both the law and the foreclosure process. If you make the wrong first move, your foreclosure action may be over before you have a chance to decide. Below some common mistakes made by homeowners facing foreclosure.
1. Do nothing: Remember when you were a little kid and you’d hide under the covers when you were scared? Many people have that same reaction as adults. If they ignore a problem, it will go away. In the case of foreclosure, the only thing that will go away if you ignore it is your house and the possibility of your keeping it or avoiding a judgment of foreclosure against you.
2. Go to court without representation: Some people decide that they will wait until there is a court date. At that point, they figure they will show up, tell the judge their story and he/she will not allow this to happen. This does not work because, while a judge may sympathize with your situation, the judge is required to follow the law. In order to prevent a foreclosure, you need to have a legal defense.
3. Fall victim to a scam: Unfortunately, there are people out there seeking to take advantage of homeowners who have been served with a foreclosure action. In a previous post, I discussed some of the more prominent foreclosure scams. Beware of any non lawyer who charges an upfront fee, anyone who offers to help by taking title to your home, or placing your home “in trust” while you work with the bank or any phone offers promising to stop foreclosure. Sadly, these scams exist and many who are already in an unfortunate situation have become victims.
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EXTRAJUDICIAL FORECLOSURE DEFENSE: THE TERRIBLE, TICKING, TITLE TIME BOMB
ReplyDeleteDocumentary Clearing House and Associates, LLC. (DCH) has just completed a new product to interdict foreclosure. (See cancelthemortgagenow.com ). Anyone can use it because it is so elegantly simple to use. It creates a ticking, title, time bomb for the foreclosing lender in the land records of the jurisdiction where the property is located unless the lender either refinances or modifies the current loan or accepts another alternate dispute resolution acceptable to the homeowner. The product is very user friendly. The product consists of a letter to be sent to all parties by certified mail return receipt requested and a Notice which is to be signed before a notary and recorded. The product can be used without going to court to defend against foreclosure.
This time bomb takes the form of a notice of rescission. The notice is in form suitable for recordation and is recorded in the land records by the homeowner. This notice creates a cloud upon title for any purchaser at foreclosure. Enforcement of the mortgage by a judgment of foreclosure will enable the homeowner to bring a cause of action for wrongful foreclosure and enforcement of the rescission subsequent to the wrongful foreclosure. The foreclosure judgment does not and cannot remove the cloud on title. No purchaser at the foreclosure auction or subsequent purchaser will be able to purchase with merchantable title or obtain title insurance. The party conducting the foreclosure sale must disclose known title defects; failure to do so may result in legal action by a purchaser against the unit of local government conducting the sale of the trustee in a deed of trust jurisdiction.
In addition, it is also likely the mortgaged property has an unconnected chain of assignments in its mortgage history. This could represent an additional title defect which could technically affect ownership rights for a future owner and create third party liability for the foreclosing law firm and the foreclosing lender for improper foreclosure if it could be established that the bank did not have the right to foreclose and the law firm chose to proceed with foreclosure despite this.
Title is an emerging area of vulnerability for foreclosing lenders. The quickest, cheapest way to avoid title problems is for the lender to refinance the loan or another alternate dispute resolution thereby resolving the liabilities created by securitization and title issues. By recording the notice, the lender is painfully reminded of potential liability which will survive a judgment of foreclosure.