This is a weekly column by Sandusky attorney Dan McGookey, devoted to telling true stories of homeowners who have been victimized by a lending system that makes it profitable to foreclose. The names used have been changed for privacy purposes. This is the Warrens' Tale.
I was contacted about six weeks ago by the Warrens, who are experiencing what I see is a growing trend in this day and age of securitized lending, where your mortgage payment are not made to the owner of your loan, but to a loan servicer. This fact alone opens things up tremendously for fraud. After all, who’s to say that a complete stranger to your loan might just contact you, claim it is entitled to collect on your loan, and demand that you make payments to it? This exact situation appears to be unfolding with the Warrens.
Until several months ago, they were making mortgage payments to GMAC. Then, out of the blue they received a letter from Old View Mortgage Corp., stating that it took over the servicing rights, and directing that payments on the $85,000 loan be made to it. Suspicious, the Warrens contacted our office, and we proceeded to contact Old View, demanding that it substantiate its claim that it was entitled to collect on the loan. The documents we ended up receiving were woefully weak; so much that it can be fairly said that Old View itself might have fabricated them.
Now what’s a homeowner to do in a case like this? There is a mortgage on the Warrens’ home which, at first blush, might lead one to believe that Old View is entitled to collect payments, but on the other hand, should the Warrens simply start making payments to someone who has a questionable right to collect? Since the Warrens are in a position to obtain financing from another bank, I believe the answer is clear – negotiate a loan down to a fraction of the amount claimed to be due and get an agreement to pay off the drastically reduced amount. However such an agreement would be conditioned on our ability to obtain a title policy insuring that the mortgage has been properly discharged. With that policy in hand, the Wilsons can rest assured that they will not suffer a loss in the unlikely event another bank steps forward and claims it is entitled to collect on the mortgage serviced by Old View.
Foreclosure Stories update: In February of this year, I reported on the story of Sam and Sarah, who appeared to be wrongfully denied a HAMP loan modification. Since that time, I am pleased to report that we have achieved the goal of getting them a great loan modification, which will easily keep Sam and Sarah in their home for years to come. That modification consisted of a reduction in their interest rate from 8.59% to 2.09% for the first three years, capping off at 5% in year five. This reduction will result in their principal and interest payments being reduced from $1,011 per month to $683 per month. Congratulations, Sam and Sarah!
Note from the author: If you have questions or comments regarding this or any Foreclosure Story article, please visit www.mcgookeylaw.com.
Next week: The story of the Penns, whose bank reneged on its promise of a loan modification, filed a wrongful foreclosure, only to end up offering them a better modification than the first one.
Copyright 2012 Daniel L. McGookey