I have often said that the banks involved with servicing (i.e. collecting the monthly payments on) securitized loans (those bundled with thousands of other loans in a pool or trust, which nearly all home loans are), are like the proverbial schoolyard bully – they are the first to pick a fight, and also the first to run away in fear when their intended victim stands up to them. Lest you think that you cannot stand up and successfully fight to save your home against the biggest banks in the world who are bent on taking it away because it is profitable to foreclose, consider the story of Josephine, the latest example of the “schoolyard bully phenomenon”.
Josephine was first sued for foreclosure by Bank of the Nation in June, 2009 after falling only several months behind in her payments on her $90,000 mortgage. Thereafter, she was offered mortgage relief under the federal government program known as HAMP (Home Affordable Mortgage Program). Pursuant to the Program, she made all three of the “trial plan payments”, which according to the bank’s promises, were supposed to lead to a permanent loan modification agreement. Instead, the Bank strung her along by making her pay another six months of payments. Then, after the better part of a year of doing exactly what it had asked of her, the Bank pulled the rug out from beneath Josephine by telling her that she did not qualify for a modification. Of course, this was after it squeezed thousands of dollars more out of her through its false promises.
That led to the filing a second foreclosure action against Josephine by Bank of the Nation in November, 2011. After continually refusing to work her on a loan modification for the year that followed, the Bank finally caved in by dismissing the second foreclosure case altogether. What triggered this alarming about-face? We were able to convince the Bank that many serious questions remained unanswered in Josephine’s case. For example, was Bank of the Nation the true holder of Josephine’s note? Was the Assignment of Mortgage valid? Was the case already resolved for good when the first foreclosure was dismissed during the time when Josephine was making her trial plan payments? Did the Bank satisfy all conditions precedent prior to filing the second foreclosure case?
These are the kinds of questions which arise in many of the cases we handle. The key to successfully winning the foreclosure fight is to know where to look to expose the bank’s weaknesses, while at the same time providing it with the borrower’s financial information in order to allow it to do the tactical retreat (grant mortgage relief), once you do. Just like the schoolyard bully who doesn’t have the stomach for a real fight once you stand up for yourself, your bank will turn tail and run if you have a good faith ability to pay on your mortgage.
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 elephant in the room with securitized mortgages.
Copyright 2012 Daniel L. McGookey