Mortgage Lawsuits

NEW -> Contingent Buyer Assistance Program
I

Irvinecommuter

New member
Since everyone here is nice enough to share some of their expertise, I will share a bit of my.

For those who do not know, I am an attorney.  I recently joined a firm that specializes in defending banks in lawsuits brought by homeowners whose houses are  in foreclosure or have been sold.  Before you guys start ripping me, I have to say that the vast majority of the cases I see are straight forward in that they involved people who got in over their head, did not make their payments and are losing/have lost their homes.  Some cases do involve bank error and those usually settle quickly. 

The lesson I wanted to impart to people is that you really really need to read your mortgage docs.  Better yet, take a copy to an experience attorney to review.  Not reading your mortgage docs is not a legit defense.

California laws greatly benefit the lenders in that it is a non-judicial foreclosure state.  This basically means there is no "separate of note/deed of trust" defense, robo-signers do not matter, and claims of duty/fraud fail 99.9999 percent of the time.

The final lesson is to get everything in writing.  EVERYTHING.  Mark down every conversation you have with the Bank if your are negotiating with a lender, who you spoke to, what was said, when the conversation took place, what was promised.  If the bank promises you a loan mod, get it in writing. 

Hopefully this helps a few people.  You are welcome to reply/post comment about the topic and I will provide general knowledge.  Bar regulations/rules forbids me from commenting or providing legal advice so please do not ask :) 

Also, this post is simply meant to be friendly advice and not actual legal advice.  Consult legal assistance/representation before you do anything!
 
Not sure if you can answer this, but of the cases you are presented, what percentage are legitimate "bank error" vs underwater owners?
 
irvinehomeowner said:
Not sure if you can answer this, but of the cases you are presented, what percentage are legitimate "bank error" vs underwater owners?
Click to expand...

I guess it depends on how you define "legimate bank error."  Just above every case claims that they were defrauded during origination.  But who knows what the truth on those are.  Also most of those relate to loan brokers and not the banks themselves.

If you are talking about banks foreclosing while homeowners made payments, probably like 1-3%.  95% are basically people defaulting on the loan and not paying up.  2% are misc.

The other thing I have found shocking is the homeowner's attitude that they "deserve" to stay in the homes.  They fight the bank on really what are really technicalities (if that) so that they can stay there longer rent-free.  People play victim like as if the bank made them take out the loans and that they somehow were hurt because the bank is now taking back the house for them failing to make payments.

After I started the job, I have significantly less sympathy for people underwater (I did not have much to begin with).
 
Since you deal with the banks... do you have any insight on why it takes them so long to foreclose on those who don't have legitimate cases and are squatting? Or is it because of these cases, owners are able to stay in their homes longer without paying?
 
Irvinecommuter said:
After I started the job, I have significantly less sympathy for people underwater (I did not have much to begin with).
Click to expand...

I also have no sympathy for the banks. They borrowed billions of dollars of tax payer money and NO one has gone to jail for the fraud they committed upon the American people.

I do not condone the spend and pretend mob of borrowers but they have the right to take advantage of every loop hole allowed by law. The banks took full advantage of the system so why not the homeowners?

Personally, I would prefer a quick end to this game. The government should have allowed some banks to fail and at the same time disallowed BS loan modifications/REO moratoriums. No more government interventions. Let the market decide prices and we can move on to a meaningful recovery.
 
This by no means is a slam on IACRenter, but every time we see "this pisses me off".... what then is being done to vent this rage? No perp walks, no accountability, moral hazard is an oxymoron, the foolish are rewarded and the prudent punished - yet no one has yet lit their torches nor grabbed a pitchfork. I am the greatest of sinners in this arena, having done nothing myself while watching this kabuki theatre unfold.

One wonders what it will take to really get people upset. Will politicians only get tarred and feathered once the food stamps and medicare tap is turned off? By no means am I suggesting armed insurrection, but there doesn't appear to be any viable protests that can impact change as there was let's say in the Civil Rights / Vietnam / Watergate era. The crimes of our times are just as bad, but whose marching in the streets now?

Soylent Green Is People. 
 
iacrenter said:
Irvinecommuter said:
After I started the job, I have significantly less sympathy for people underwater (I did not have much to begin with).
Click to expand...

I also have no sympathy for the banks. They borrowed billions of dollars of tax payer money and NO one has gone to jail for the fraud they committed upon the American people.

I do not condone the spend and pretend mob of borrowers but they have the right to take advantage of every loop hole allowed by law. The banks took full advantage of the system so why not the homeowners?

Personally, I would prefer a quick end to this game. The government should have allowed some banks to fail and at the same time disallowed BS loan modifications/REO moratoriums. No more government interventions. Let the market decide prices and we can move on to a meaningful recovery.
Click to expand...

I do not really have much sympathize for the banks either.  I am just mystified that the lack of personal responsibility people have now.  I pay my bills and did not buy a house because I could not afforded it.  I do not believe I am owed a house and will only buy one when I can truly afford one.  I see so many complaints stating that people were somehow harmed because they got to live a house for years in a place that they realistically could not afford. 

I do have to say one thing for the banks is that they get burned for trying to work with people.  They offer a trial payment period so as to allow time to consider a loan mod.  Then when banks decide against the loan mod, people claim that they are defrauded. 

As for the backup, it's pretty much a lack of manpower.  I am sure the lawsuits are not helping but I do not know the overall effect they are having on the foreclosure process.  I know that the law/rules in California is helping to get rid of the glut a lot faster than a state like Florida, where they have judicial foreclosure laws.

Finally as to sgip's post, there is no will on any side to do anything.  Lenders do not want stricter rules and borrowers were fine with the lax standard until they had to pay.  No one wants to leave their nice homes and certainly do not want to leave if they are living rent free.
 
Irvinecommuter said:
As for the backup, it's pretty much a lack of manpower.  I am sure the lawsuits are not helping but I do not know the overall effect they are having on the foreclosure process.  I know that the law/rules in California is helping to get rid of the glut a lot faster than a state like Florida, where they have judicial foreclosure laws.
Click to expand...
Do you see any evidence of the banks willingly "allowing" this manpower issue to remain in order for them to recoup lost value on properties on some future recovery rather than impact their borrowing ability by booking at current values?

There is a portion of The Shadow Inventory Theory where the banks are purposely not foreclosing on certain properties for this reason and I'm wondering if you do see that can-kicking.
 
irvinehomeowner said:
Irvinecommuter said:
As for the backup, it's pretty much a lack of manpower.  I am sure the lawsuits are not helping but I do not know the overall effect they are having on the foreclosure process.  I know that the law/rules in California is helping to get rid of the glut a lot faster than a state like Florida, where they have judicial foreclosure laws.
Click to expand...
Do you see any evidence of the banks willingly "allowing" this manpower issue to remain in order for them to recoup lost value on properties on some future recovery rather than impact their borrowing ability by booking at current values?

There is a portion of The Shadow Inventory Theory where the banks are purposely not foreclosing on certain properties for this reason and I'm wondering if you do see that can-kicking.
Click to expand...

That part I do not know about since I only work  with properties that have been foreclosed upon.  I do not doubt that you are right but I just do not know of any specific facts.  Most of properties I have seen have been sold back to the bank at auction.
 
Thank IrvineCommuter for starting this thread.  You wrote:  "banks foreclosing while homeowners made payments, probably like 1-3%"

What happens in this case?  Once the home is foreclosed, can it be undone?  I realize its probably a minute error but I dont like the idea that a person can pay his mortgage payments on time all the time and still be foreclosed upon due to an error. 
 
rkp said:
Thank IrvineCommuter for starting this thread.  You wrote:  "banks foreclosing while homeowners made payments, probably like 1-3%"

What happens in this case?  Once the home is foreclosed, can it be undone?  I realize its probably a minute error but I dont like the idea that a person can pay his mortgage payments on time all the time and still be foreclosed upon due to an error.
Click to expand...

Sorry for the late response.  Foreclosure is a long long process.  Even if property mistakenly sold, the sale can be rescinded if the bank is the one who buys the property (which is most of the cases).  However, there may be a problem if it's sold to a legitimate 3rd party buyer.  I think foreclosure mistakes happen simply due to human error, which is severely increased with incredible number of foreclosure being done.  The risk is probably significantly lower during a normal housing period.
 
You must log in or register to reply here.
Back
Top