Esoteric Knowledge for the Homeowner

Help yourself prepare to stop foreclosure

If you expect something, is it still exciting? For me…..No. The unexpected is so much more entertaining and satisfying to observe. Red Sox defeat the Yankees, David defeats Goliath. How about Homeowner defeats Deutsche Bank in Ohio ruling? Hmm.................. Sounds interesting.

Homeowners are fighting back. Let’s look at the previous precedent more closely:

Judge Christopher Boyko of the Eastern Ohio United States District Court, on October 31, 2007 dismissed 14 Deutsche Bank-filed foreclosures. The lending institution did not prove they owned the debt they were trying to collect.

The “rabbit hole goes deep”. There were 2.2 million foreclosure filings last year. Many of the properties had notes that were securitized and sold off to trusts which were than sliced up and resold to thousands of investors. The investors were pension funds, foreign governments, wealthy individuals, and other funds. Well lets look at the players involved. There is the mortgage originator or retailer, than there is the pool sponsor who often is a large banking institution, a multitude of loan servicers who may or may not be the pool sponsor, a trustee who administers the pool, an investment bank or syndicate of investment banks who will underwrite the pool and than finally the investor. As homeowners started missing their mortgage payments, these entities started looking elsewhere besides themselves for blame. The credit expansion of the previous decade has turned into the litigation expansion of today. Banks are foreclosing on homes successfully but as you can see with all the people involved, there may be plenty of inconsistencies for savvy attorneys and consumers to use as a way to defend themselves.

Question: Who has the right to foreclose on your property? Is it the originator, the pool administrator, the servicer, the trustee, or how about the thousands of investors that cumulatively hold your note?

Per Ohio it looks like the “legal” note holder has the right to collect. Deutsche Bank could not prove they were the legal note holder. So who is the legal note holder or who are the legal note holders? The thousands of investors who purchased partial interests in your note. Even if that is the case, Would they foreclose? If so, how would they foreclose? That’s a lot of people to gather up.

The “legal” note holder defense works. Case law is now being established even in my home state of New Jersey. There are cases in Passaic, Essex, Monmouth and Ocean that have been overturned. Legal Services of New Jersey has taken a proactive role to educate lawyers on this new angle of defense. “The truth will set you free”. Ok, maybe not set you free from your mortgage obligation but for the moment will definitely buy you more time.

Written by Kevin Levonas