Everyone Should Care That The Plaintiff Foreclosing Has The Right to Do So And That Every Party With an Interest In The Property is Joined
So let’s say you’re a judge who just wants to push foreclosures through as quickly as possible so you can get the backlog of cases off your desk. The general perspective is if no-one has filed a response and the bare bones allegations of foreclosure are made, Foreclosure Granted, onto the next one. A few weeks later, the homeowner is kicked out of the home and the home is sold on the foreclosure steps. A smart investor buys the home for 30% of the value it sold for just a few short years ago and begins dumping thousands of dollars into the property to repair and rehab it. It’s sold to a happy new couple who likewise get a deal and they put more money into it to fix it up and make it their own.
The Title Claim Comes Knocking
Just after the paint dries on the home a process server knocks on the door with a new foreclosure….not the foreclosure from before….a brand new case by the real holder of the mortgage….let’s say the lender whose name was on the mortgage recorded in the county register. You see in the first foreclosure that started this story, there was no assignment of mortgage to that Plaintiff and no note, but they had official, “real” assignments of mortgage and a “real” affidavit of lost note. Only they weren’t real, they were form documents spit out of a computer and signed by a robo signer who had no idea what was being signed or for whom. Problem is the party to whom the mortgage and note were assigned had no ownership interest in the note or mortgage and the nameless, faceless robo signer had no authority to transfer anything on behalf of the corporation whose name still remains on the note and mortgage. Or now the Plaintiff foreclosing is the second mortgage holder or the holder of a certified lien against the property that was sold. They weren’t served with the foreclosure so they still have a lien against the property. Read here for an recent Kansas case that details who loses when the title claim comes knocking. (No surprise it’s the little guy, the homeowner….don’t worry the lender comes out just fine. Too bad about the homeowner and purchaser who improved the property and sunk their life savings into it.)
Valid Liens, Valid Claims Against A Foreclosed Property
In the rush to push foreclosures through, the law firms that are pushing them through are spitting out incredibly sloppy and reckless work product. In the Bank’s rush to file foreclosures, they’re creating documents that purport to show they own notes and mortgages at a blistering pace. To move the process along, the documents that purport to support the foreclosure are generated in assembly line fashion with very little attention paid to the actual facts. (See a Sarasota Tribune Article on the subject here. Sure, foreclosures are moving through at a record pace, but major, important details are being missed at a record pace as well. Judgment creditors are not being served, junior lienholders are not being served. The City of St. Petersburg reports millions of dollars of valid municipal liens exist on properties and many times these liens are ignored by the Plaintiffs firms when they file foreclosure. These problems are not going away. The reckless, sloppy practices that bring quick foreclosures is going to result in massive claims on the title companies (I’ve been predicting bankruptcy of title insurors for quite a while now.) It’s going to result in total instability of the secondary real estate market. (No one is buying foreclosed homes now just based on the cosmetic and other problems that are apparent. When the wave of title problems becomes apparent, forget about selling any of these “toxic” properties.) The title industry is finally starting to recognize the catastrophic problem on their hands read title here for a chilling article on the failure of the title industry and consider the consequences of this failure.
Defending Foreclosures Is a Duty to The Court, Our Neighbors And The Country As A Whole
As dedicated and ethical attorney, my primary duty is to protect the interests of the clients I serve. I take that sacred duty very seriously and do my job accordingly. In the course of this practice and in meeting with the good lawyers who share these goals, there is also developing a very serious commitment to helping prevent the major catastrophes we see occurring right in front of our faces every day. The process as it exists represents a catastrophe because we’re allowing wholesale, widespread fraud to be committed on the courts across the country. It is a catastrophe that it has become standard practice to submit documents to judges that are outright frauds and have no basis in fact. There is a continuing and coming catastrophe when the country realizes that title to property based on foreclosures are questionable. There is a catastrophe when lenders and and institutions realize that they can no longer rely on the protections of the title insurance industry.
So the bottom line is this….it matters to us all that a foreclosure is done correctly. We all stand to lose in this system gone awry.
