Matt Weidner – Fighting With The American People

Archive for November, 2009

Lost notes and unrecorded assignments of mortgages complicate an already nightmarish problem infecting the foreclosure process across the country.  A Pinellas County Circuit Court case was recently overturned by the Second District Court of Appeals that, if it weren’t overturned, could have been used to help mitigate some of the problems caused by this failure of the system.  The case involves Florida Statute, Chapter 701.02 requires that when a mortgage is sold or assigned to a third party, the parties are required to record in the same public records an Assignment of Mortgage to show the entity to whom the mortgage has been assigned.

Immediately after a mortgage is taken out on a property, that mortgage is recorded in the public records so that any interested person is aware of the debt against the property.   Prior to a sale or refinance, a title search is performed and, because of a sophisticated and accurate recording system, all details relating to a property are easily discovered.

Prior to the recent period where mortgages were sold and traded multiple times after their execution, it was usually a pretty simple task to identify any party that would have an interest in the mortgage—their name was printed in black and white on the recorded mortgage.  During the frenzied period of mortgage securitization and sales, it is now virtually impossible to determine exactly who owns an interest in the mortgage, but much of this confusion could have been avoided if lenders had been required to follow laws such as Florida Statute, Chapter 701.02 and other laws that have been in existence for years.

For more information on how this might apply to your case, contact Matt Weidner at www.mattweidnerlaw.com

In the heyday of the mortgage refinance market, lenders were closing billions of dollars of loans across the country.  Major lenders in far flung places were agreeing to lend hundreds of thousands of dollars against properties based on representations of loan officers, agents, appraisers and sales people that these lenders knew almost nothing about.  In the years leading up to the crash a phone call and a few short applications were all that was required for a con artist, criminal or capitalist to become an agent of a lender and then have access to start throwing millions of dollars of that lender’s money around.

THE LOAN APPLICATION PROCESS- THE BEGINNING OF THE LIE

After the lender accepted the lies on the application, appraisals and contracts that their loan officer sent them, the lender emailed a mountain of documents to a title company. Someone (sometimes a criminal, sometimes just an employee who had every incentive in the world to close the loan and no incentive not to close it) would plunk the mountain of papers down before the borrower and get them to sign no matter what it took.

INPUT THE LIE (LOAN) QUICKLY- WE’VE ALREADY SOLD THE LIE TO SOMEONE ELSE!

After those documents were signed, the entire package of original documents were sent back to the lender.  When the original documents were received by that lender, data entry clerks inputted basic information such as the borrower’s name, amount of loan, interest rate on loan and property address into a computer system.  In some cases some of the documents were scanned in so that they could be accessed later, but from my experience, (based on the fact that I’ve rarely had a lender produce the important documents) I don’t think this was done in most cases.  At some point both before the documents were scanned and inputted or after many of these loans were already sold to third parties.  The original documents were either shipped off to third parties or in some cases destroyed or lost in the orgy-like rush to close and sell as many loans as possible as quickly as possible.

NO REAL PAPER TRAIL CREATES REAL PROBLEMS

The deal makers, brokers and con artists were more than happy to close loans, package them and sell them time and time again with no concern for the consequences of the failure to confirm the location and existence of the documents because once they sold them, they got their money and the next party was on the hook.  The real problem is that many of the documents signed by the borrower are essential and necessary if the Plaintiff wants to foreclose the mortgage.  The pages of disclosures and other documents that a borrower signs at closing represent literally hundreds of years of real property law and state and federal protections that were developed to protect both the borrower and the lender.

LENDERS- YOU MADE YOUR LIES, NOW LIE IN IT!

It was reckless and irresponsible for these lenders to ignore the fact that these documents were important and they cannot now claim the documents just don’t matter.  Across the country judges are recognizing this fact, but were all struggling to decide just how to deal with the consequences…..stay tuned!

Visit www.mattweidnerlaw.com for more information.

It was almost one year ago when the nation’s third largest title company filed for bankruptcy protection.  Stay tuned and hold onto your hats because many more will be filing for bankruptcy protection, a development that will have grave consequences for the larger housing and financial market.

Title insurance insures that when you purchase a home or when a lender puts a mortgage on the home, there are no competing interests that would impair or threaten that ownership or mortgage.  Most folks bought their homes and most lenders extended mortgages without thinking much about this insurance or the stability of the title insurance underwriters who were issuing these policies.

THE COMING CRASH

The housing and financial markets crashed for a variety of complex and interrelated reasons, but greed, incompetence and reckless institutional and government policies were the general reasons for the totally avoidable debacle that continues to unfold.  These same factors will lead to the eventual crash of the title insurance market that continues to operate.  In the good times, underwriters were writing “clean” policies on homes with relatively simple title problems and issues.  Since the crash of the housing market, title insurers are not writing “clean” policies, they’re writing policies over homes with a myriad of complex and difficult to fix problems.  The lenders who are filing foreclosure are ignoring major title problems in their rush to file foreclosure cases and the insurers are allowing these practices to continue.  I can only speculate that they’re just more interested in taking in premium dollars in the short run than in protecting themselves from the dire consequences that will follow in the long run.

WHO CARES AND WHY?

When the major title insurers collapse the entire housing and lending market will seize up and crash because purchasers will have no confidence in their ability to actually own the property they want to purchase and lenders won’t lend on property if they cannot insure that they have a good mortgage on the property.  The regulators and government officials are both ignoring the problem and frankly just don’t understand the problem and the consequences.  The judges who are hearing foreclosure cases are now complicit in the problem because they’re looking the other way when they grant foreclosure knowing full well that the system is in crisis.  After all we’ve learned over the last several years its just amazing that this continues…..

Remember this article and the date it was written….when the crash comes later, I’ll just sit back and say….”Told Ya So!”

An article in today’s Wall Street Journal, reports that 23% of US homeowners owe more than their home is worth.  In Florida, this number is a staggering 45%.  The national figure means nearly 10.7 million households have negative equity in ther homes, a troubling figure that poses great risk to housing and the overall economy.

LENDERS JUST DON’T GET IT

As an attorney actively fighting foreclosure for hundreds of homeowners, I can confidently say that it is virtually impossible for most foreclosing lenders to take a home back from a homeowner and I often wonder just what would happen if homeowners across the country just stopped paying their mortgage.  I’m certainly not advocating that homeowners not pay their mortgage, but in the vast majorityof my cases, I have homeowners who want to stay in their home and want to and can afford to make a mortgage payment that is usually about 70-80% of what the lender is currently owed.

CLIENTS WORK HARD TO SOLVE THE PROBLEM BUT GET NO RESPONSE FROM THEIR LENDERS!

I require my clients to actively work with their lenders to try and negotiate a modification or other solution….and I require my clients to keep a detailed log of all their phone calls, faxes, emails and other attempts to communicate with their lender.  After reviewing my client’s efforts for many months now, I can say that virtually every client has spent hours and hours and made countless phone calls and other attempts to work with their lender, but very few have gotten anywhere. 

This pattern and practice of incompetence, inflexibility and irrational business behavior is a symptom of deep and serious underlying rot within the housing and mortgage market.  Until this changes, the crisis will only get worse.

In the vast majority of foreclosure cases that I am currently defending in the Tampa/St. Petersburg area the Plaintiffs who are named in the foreclosure case have failed to perform any or many of the acts which are often required before they may be legally entitled to file the foreclosure.  In a recent appelate court case, from the Fourth Judicial Circuit in Florida, the appelate court reversed the lower trial court for failing to consider that the Plaintiff had in fact failed to perform acts it was supposed to do.  This reversal represents an important victory for foreclosure defense strategy and any homeowner or defense attorney should be familiar with the case.

Specifically, the mortgage required the lender to provide notice and an opportunity to cure the default prior to filing foreclosure, but the homeowner alleged that the lender failed to do so.  The lower court granted foreclosure anyway, but the appeals court reversed the court, making it clear that this allegation must be taken into consideration prior to granting foreclosure.  The case, Frost v. Regions Bank, is an important recognition of borrower’s rights that I am currently using in my defense practice.  There are a variety of good cases coming out of various circuits and appelate courts around the state….stay tuned for more information or visit my website at www.mattweidnerlaw.com for more information.