In one of our rare commercial cases, we represent a business owner, Ralph, who has had mortgage issues for a number of years with U.S. Bank. Ralph’s loan is serviced by Aurora Financial Services, acting on behalf of U.S, Bank in collecting the monthly loan payments. Within the past few days, we had the opportunity to argue Ralph’s case in the Court of Appeals, after the trial court granted a foreclosure judgment against Ralph. Based upon that hearing, we are confident that the judgment will be reversed, and Ralph will get his day in court.
The reason we say this is on account of the exceedingly sloppy paperwork of U.S. Bank and its servicer Aurora. Ralph took out the loan in 2006. At the time, the “lender” named on his promissory note was Lehman Bros. Lehman later changed its name to Aurora, the current loan servicer. At least in theory, Ralph’s loan was supposed to be put in a loan pool or trust, bundling it with thousands of other loans, shortly after its inception in 2006. The problem is that neither Lehman, the loan originator, nor U.S. Bank, the Trustee of the pool or trust in which the loan was supposed to be placed, caused any paperwork to be completed evidencing that this happened.
This is an exceeding common scenario in our experience. In their rush to make billions of dollars off the backs of hard-working Americans, banks like U.S. Bank paid practically no attention to such a minor item as completing legally-required paperwork. This fact creates a huge opening for those homeowners struggling in good faith to get a break on their mortgages to fight back against their banks. In Ralph’s case, the paperwork mess started with the fact that his Promissory Note and Mortgage were not transferred into the pool or trust until 2011, six years after they were supposed to be. Worse yet, no proof was presented by the Bank that a key document effectuating the transfer of the Promissory Note into the trust was attached to the Note, as required by law. This raises a serious question as to the validity of the transfer. Without a proper transfer, the Bank cannot obtain a foreclosure order.
For Ralph, this paperwork meltdown by U.S. Bank could provide him the chance to save tens, if not hundreds of thousands of dollars on his business loan. It is indeed ironic that the same slipshod practices employed by the Wall Street Banks, meant to save them money, now could cost them dearly. But for that to happen, struggling homeowners as a whole must look at their own loan papers with a discerning eye. If they do, chances are very good that, like in Ralph’s case, flaws will be exposed. And with the exposure of those flaws, comes the opportunity for fantastic mortgage relief.
Note from the author: If you have questions or comments- regarding this or any Foreclosure Story article or should you like to have a “free mortgage analysis”, please visit www.mcgookeylaw.com, visit us on Facebook or call us at 419-502-7223.
Kate Eyster and Lauren McGookey contributed to this article.
Copyright 2014 Daniel L. McGookey