I am writing this diary in an attempt to help those who are being subjected to a non-judicial foreclosure. In a judicial foreclosure, because of the court oversight, you have a better chance of having your protected. However, in a non-judicial foreclosure, the banks will run roughshod over you. So here are a few tips that may help you protect your rights or even beat a foreclosure.
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Most of this information has already been discussed in other places. However, there are nuances that may help people beat a foreclosure attempt. Just to be clear, I am not suggesting anything illegal. I’m only trying to make the playing field a little even. So, here goes:
- Most loan originating banks sale the loans to investors. But they may stay connected to the loan by acting as the service agent in managing the loan, processing the payments,... (level 1)
- The mortgages that were sold may have been bundled with other securities (home mortgages, credit card debt, student loans,...) and sold, in parts, to upstream investors (level 2)
- Some bundled security investors, in turn, combined and repackaged these bundles and sold parts of it to yet another level of investors (level 3)
- In some cases there may be a level 4 or 5 bundling and reselling
- Some of the level 2, 3, 4,.. bundlers and investors are no longer in business, and
- Some of the original loan documents have gone missing
So, how does this help the person who is being foreclosed on?
- The servicing banks may not have the ability to renegotiate the loan. Ask to speak with the owner of the loan. They may be more amenable to renegotiation
- ALWAYS, ALWAYS ask to see the original loan documents. Banks can not foreclose without the originals. COPIES WILL NOT DO.
- Threaten them with legal action to soften them up for negotiation. The banks hate to go to court because it costs them money. They also have to produce documents and answer some uncomfortable questions.
- Read the foreclosure authorizations carefully. I have seen lots of fraudulent documents produced by "reputable" major banks. E.g. Notarized Power of Attorney signed by non-existent VP of another bank. Notarized "Self" Authorization to represent another entity. Power of Attorney authorizations that do not identify the property in question but only refer to a type of security bundle. etc.
I’ve seen foreclosures that have been reversed due to bank’s failure to produce the original document or for their inability to produce the actual owner of the loan. I have seen lots of out-and-out fraud and criminal conducts by the attorneys, banks, escrow companies, and real estate agents. Unfortunately, no one goes after them. They always go after the easier target, some poor schmuck who fudged on their loan applications.
If we have to play by the rules, so should they. So, use the above information to renegotiate your loans and hopefully get a better deal.
One last parting question: Who actually owns the right to a bundled mortgage and hence has the right to commence the foreclosure?