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    If any of these financial nightmares describes your situation, you are in company with at least 60 million homeowners in America today. The rapid deflation of house values, coupled with exotic mortgages written during the real estate bubble have put millions of homeowners in dire financial straits as they see all the money and toil they put into their homes vanish and they now owe far more than it their home is worth. The monthly payments under those low interest ARM’s in many cases doubled and families are faced with putting food on the table or paying the bank for the roof over their heads. If one has also lost their job due to the weakened economy or had their hours and pay cut, the situation appears hopeless. Every 90 seconds in some courts people are losing their homes to foreclosure and facing the prospect of the sheriff putting them out on the street. “Rocket dockets” they are called, judges signing foreclosure decrees as rapidly as they can put their signature to the order. The American Dream of home ownership has become the worst of nightmares for millions of families – over 5 million homes lost to foreclosure since 2008. And millions more in the pipeline.

    Some smart people however are lodging a defense and turning the tables on their banks – in some cases living payment- free for up to five years and/or getting their homes free and clear of their onerous mortgage.

    How can that happen? What magic wand do they wave to get a judge to decree “this mortgage is VOID!?”

    What follows is a brief history of how many mortgages were made the past nine years, how people were led (or duped) into mortgages they could not afford to carry to term, and the paths to fighting the banks -- and winning!

    Beginning in 2002, with many bank regulations stripped from the law books and encouraged by federal policy to make home ownership available to as many as possible, banks and mortgage lenders came up with exotic mortgage plans, dispensing with historical prudent rules on qualifying people and properties for loans. “Pick a payment” and others where the individual wasn’t paying even the accruing interest, 110%, 125% of the value loans, “stated income” [no proof of ability to repay], debt ratios as high as 40% and upwards when prudent standards say one should pay no more than 28% -30% of their income for housing expense, “80/20” loans where the seller falsely credits the buyer with 20% down payment, are just some of the Mickey Mouse loans that were concocted for buyers – destining them for nothing but financial disaster down the road.

    When loans were written with payments calculated at 4.75% interest or similar rate, the lender knew within short order the interest would escalate to 8% or more and the person be unable to pay. “Refinance then” was their cavalier philosophy. Well, the real estate bubble burst, values declined, unemployment soared – banks had to be bailed out for bad paper they wrote and refinancing just wasn’t available—especially after a person had missed a payment or two and the house was now worth less than he paid for it – worth even less than he owed.

    The mortgage business was the golden road to easy riches, banks even offering bonuses to officers for volume. In the haste to get as many mortgages written as possible and then sell them to investors before even the ink was dry, a few laws were broken along the way. TILA (Truth in Lending), RESPA (Real Estate Settlement Procedures Act), HOEPA, (Home Owners Equal Protection Act), in some cases Discrimination [Civil Rights Act), and, of course, predatory [loan shark] lending, plus violations of the various states’ consumer protection and fraud laws were part and parcel of as many as 90% of some banks and mortgage companies loans. Further, the federal government has estimated that in at least 60% of mortgages the bank is stealing from the homeowner for miscalculations of payments was common – in favor of the bank, of course.

    Some lenders were more notorious than others , notably Countrywide. All the major banks; Wells Fargo, Bank of America, Chase, Citibank have portfolios full of loans where federal and state laws were violated in the mortgages they wrote from 2002 on. All 50 states attorneys general are investigating to bring charges against these and other lenders who ripped off their citizens with fraudulent and predatory loans over the past 9 years.

    To further muck the issue was the way these loans were sold. With such tremendous volume, selling these mortgages and transferring paper was cumbersome. So an electronic system to transfer and record mortgages, MERS , was born. Mortgages were sold sometimes over and over without the paperwork following to the new investor/owner. The all important note and mortgage may have remained with the original closing office – or not. Or was destroyed.

    Most of the major banks called a brief moratorium on foreclosures earlier this year. The reason was that foreclosure law firms they hired were discovered to be regularly presenting bogus documents, forged signatures in court to convince the court they owned the note and mortgage and as legal owner had the right to foreclose. Forgery and perjury were rampant in foreclosure proceedings and if the homeowner was not represented by a lawyer, the hearing he is given may last as long as 90 seconds.

    HOW these mortgages were made, the violations of federal statutes like TILA, RESPA, HOEPA as well as predation and common law fraud has been the key to defending against the bank, attacking the validity of the mortgage, the illegality of how it was made – and opens the door to having a court declare it invalid.

    When they cannot produce the note and mortgage, per a landmark decision obtained by attorney Glen Russell, the Massachusetts Supreme Court decreed the lender may not foreclose or even collect on the mortgage. The homeowners got their property free and clear. Other jurisdictions are following this ruling and precedent. Thanks to the shortcuts lenders took via MERS, many lenders cannot produce the critical documents – evidence they own the note and mortgage – or that one was even made. That is the reason for the rampant forgery and fraudulent documents foreclosure mills have been generating.

    When financial audits have been performed and it is disclosed that the bank has been collecting too much from the homeowner, a refund can be obtained. In one case, a $35 overcharge was enough for the court to declare the mortgage void and award the house to the homeowner free and clear. In another, the homeowner got a $30,000 refund.

    When the bank is aware the homeowner and his lawyer have done their homework, know they do not have the proper documents and have found the proofs of federal and state law violations, they are amenable to restructuring the loan – reducing principal and/or interest to the homeowner’s satisfaction. For if they go to court, the bank risks losing the entire mortgage.

    Next will be a discussion on modifications – the reasons why not to trust your bank – the disadvantages of a modification vs. restructuring the loan.

  • #2

    Can a son be on the loan paperwork as the interviewer (mortgage broker) for his fathers loan. Both have the same last name???


    • #3

      I read your remarks and have a similar situation.
      I live in Jamaica, (Jamaica is based on English Law), I am in arrears with my mortgage on my apartment,
      the mortgage company has put my apartment up for auction or private treaty sale. I made an 'Official Offer'
      to repay debt, I made the first payment and received an official receipt from the mortgage company. Never the less, the mortgage company is not accepting my offer and are going ahead with the auction.
      Question, The fact that I made an official offer, made the promised payment and have an official receipt from
      the mortgage company; Does this constitute an enforceable new binding contract, and the mortgage company would not be able to exercise their 'Power of Sale' option as long as I continue making payments
      as promised? Looking forward to your opinion.

      Thanks in advance.



      • #4

        What does the receipt say? It may have been treated as a partial payment.
        Due to a recent promotion, I should now be referred to as Major Obvious.

        I would not be trying to provide information and knowledge if I did not sympathize.

        Some days it is just not worth chewing through the restraints to face life.


        • #5
          Who can help me pls. Mort co IS adding CHARGES, i feel unlawfully.. Let to-them, They repeat same actions unfairly-i-feel 7183629599 & [email protected]


          • #6
            see your other post...where we responded.


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