This makes me angry. How could this happen? I’ve known quite a number of people who’ve ended up with upside down mortgage loans and who’ve lost their homes to foreclosure. In some of these cases, we can blame mortgage fraud and subprime borrowing for these unfortunate events. In some others, we can point the finger at the poor real estate market that fizzled and buckled under the weight of the subprime mortgage financial crisis.
But then there are the people who did nothing wrong and everything right, but who still end up becoming victimized by mortgage fraud. In the past, I used to think that these misfortunes were confined to victims who were unlucky enough to get tangled in a predatory lending scheme. But apparently, that’s not the case as mortgage fraud and other forms of foreclosure fraud can actually happen to anyone — even those with clean records and NO mortgage. It seems rather far-fetched but some homeowners have been unlucky enough to be targeted and therefore sucked into a dreadful situation concocted by an evil bank or lender.
Here’s a video by Congressman Alan Grayson from Central Florida on this matter:
So here’s the message here: foreclosure fraud can hit anyone, whether or not you have a mortgage, whether or not you pay on time or have an income. Root of the problem? Poor record keeping during the real estate bubble paved the way for fraud and foreclosure mills (whose business it is to forge legal documents on anyone targeted for foreclosure). Watch out for those unscrupulous loan servicers! Now the video is an eye-opener but it kept me hanging. How do we get rid of these thieves? What laws do we have to protect us from the vultures?
Blast from the past — here are more articles I’ve written on this topic:
- Who’s To Blame For The Subprime Mortgage Mess
- How To Destroy Your Credit With Bad Mortgage Loans
- The American Nightmare: A Look At The Subprime Lending Mess and Borrowing Bust
Copyright © 2010 The Digerati Life. All Rights Reserved.
{ 6 comments… read them below or add one }
Foreclosure fraud can cause you a great deal of damage because it allows evictions, illegal property flipping, and can even lead to homelessness. This type of fraud allows foreclosure mill lawyers (with the support of bad judges) to deceptively hold auctions and bid for any properties they want. Ultimately, this takes down your neighborhood.
For 7 years, I was paying off my regular mortgage but then I was victimized by a foreclosure mill lawyer who used a defunct lender’s identity to foreclose on my property. The courts sided with the foreclosure mill lawyer despite the illegal moves they were making.
How can this happen? Greedy individuals taking advantage of an overtaxed court system.
This really can happen to anyone and I think that’s something that more and more people are coming to realise.
During the recession, there was a massive leap in the number of wealthier people in the UK who became insolvent… it’s certainly not something just restricted to those who are “poorer.”
Hopefully the taboo around foreclosures or just financial difficulties in general fill fade with time, as this will definitely make people talk about debt problems and seek help sooner.
This is absolutely ridiculous. I’m glad that state attorney generals (senators, reps etc.) are standing up for homeowners and stopping foreclosures/opening up investigations. I wonder how many of these rising foreclosure numbers are actually due to bank errors.
I wrote a blog post about this topic just a few days ago – Foreclosures Gone Wrong:
http://gainmoneycontrol.com/foreclosures-gone-wrong/
Actually you don’t have to be behind on payments to be placed into foreclosure. I know because it happened to me. Citi mortgage was sent a check for the full mortgage balance on my property. They misapplied the funds and lost all record of the transaction. After 4 mos. of phone calls the money was found. Problem solved you say. Not really because they wanted me to pay the four extra payments that accrued during the time they were looking for the money. So, instead of getting a satisfaction piece, I started receiving late payment notices, and the money I had sent them to pay off the mortgage was placed in a non interest bearing escrow account. When I refused to make the additional payments, they began foreclosure proceedings. Two attorneys told me that I should just avoid the hassle and pay the extra money to avoid foreclosure. I refused and began to battle with them. I actually came within 30 days of losing a property that I had paid in full. After another 12 mos. of letters and phone calls, and making a real nuisance of myself, I finally got them to agree to satisfy the mortgage. I had to agree to hold them blameless and signed an agreement to that effect, after which I received my mortgage satisfaction. However, six months later I got a 1099-misc from them charging me with all of the late payments, foreclosure costs etc.etc, nearly 70,000 which is now taxable income for me. In other words what they couldn’t collect directly they’re bilking the IRS out of with this bogus 1099.
So, if I had this much trouble paying them off early, I can only imagine how hard it must be for those who are unable to pay because their circumstances have changed. My advice. Don’t give up. Don’t let them make you feel guilty. You’re not the bad guy here. They are. Stay in your house until they drag you out kicking and screaming. Hopefully you’ll come up with a solution before then, and if not, at least you’ll have fought the good fight, and gone down swinging. If nothing else you’ll have delayed the proceedings against someone else by using as much of their resources as you can. They can’t fight us all.
Dear All:
Please pay close attention to a recent california published opinion, Malkoskie v. Option One Mortgage Corp., 188 Cal. App. 4th 968, 2010 Cal. App. LEXIS 1658 (Cal. App. 2d Dist. 2010; which upheld a stranger with no assignment of the note and deed of trust, to foreclose and evict, when the trustor stipulated to possession.
The complaint meticulously laid out the fact, (and the Court recited same in its summary of the case) that Wells Fargo had no standing to foreclose or evict due to the fact that the assignment of the note it received from Option One was void due to the fact that Option One received its assignment four months AFTER the foreclosure and TWO month after the eviction……rather than focus on the standing issue the Court claimed the seminal issue was an irregularity of the sale (a trustee without a power of sale foreclosed) which was cured by the stip for possession. In essence in California, if you don’t own the note YOU CAN FORECLOSE as long as you are willing to perjure yourself in a verified UD complaint.
There are rules for trustors BUT no rules for strangers without standing…they now can foreclose in California due to the “largesse” of Div* of the Second District Court of Appeals…………………PLEASE NOW TWO JUSTICES, JUSTICE GRIMES AND BIGELOW OF THE THIS COURT ARE UP FOR REAFFRIMATION IN THE NOVEMBER ELECTION….GET RID OF THEM!