Sal came in to see us for the first time a month ago after having gotten a second foreclosure complaint from Chase Bank. The first foreclosure was filed years ago, and was dismissed when Sal and his wife filed a Chapter 13 bankruptcy. Unfortunately, the bankruptcy was only a band-aide measure which didn’t give Sal any relief on his 11.9% interest rate. Even though he owed less than $120,000 on his mortgage because of his exorbitant interest rate, Sal’s monthly payment was a whopping $1,660!
So it was that Sal started missing mortgage payments in May, 2013. And even though he religiously sent in financial form after financial form, no mortgage relief was offered by Chase to Sal. Instead of getting an offer of a loan modification in the mail from Chase, Sal got a foreclosure complaint.
It was obvious from taking one look at the Complaint and comparing it to the one filed years earlier, that a serious standing issue existed in Sal’s case. Standing is the legal defense whereby the homeowner makes the bank prove that it is the proper party to be foreclosing. The reason this defense was strong in Sal’s situation was because the promissory note attached in his recent Complaint was markedly different from the one attached to the original foreclosure Complaint. This is a critical fact when it comes to standing, as it is essential for the bank to prove it is the holder of the original promissory note (not a reproduction) in order to
Because of the drastic differences between the two promissory notes produced by Chase, it was going to be virtually impossible for it to prove it was the proper party to be foreclosing because of the lack of standing. Thus it probably is not surprising that within a matter of days after we contacted Chase’s attorney and entered a defense on behalf of Sal in the foreclosure that he received a phone call from Chase telling him that it was offering the mortgage relief which had been so long previously been denied him. And what relief that was! In addition to reducing his interest rate from 11.9% to 4.375%, his loan balance was reduced from over $117,000 to approximately $78,000, a reduction of almost $40,000. Fortunately for Sal, as it turned out, all it took was to call Chase out on its fraud in order for him to save his home.
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Kate Eyster and Lauren McGookey contributed to this article.
Copyright 2014 Daniel L. McGookey