Lender-approved robo-signing tactics have extended the foreclosure crisis Thanks to the judicial foreclosure process in at least 25 different states, lenders are required to take the homeowner to court and demonstrate that the homeowner defaulted on their mortgage and that the lender now has the right to foreclose on the home. Through this process, the lender must prove the requisite facts by submitting documents and written statements signed under oath by a person who has fully reviewed the documents and is supposed to have a personal basis for believing the facts to be true. The idea is to prevent foreclosures on homes when the foreclosing bank cannot prove it actually owns the mortgage – it was designed to protect homeowners. During the foreclosure crisis, when banks were processing thousands of foreclosures daily it came to light that several larger banks were routinely using documents signed by employees who either didn’t exist and/or did not personally review the documents. The documents were, in effect, signed by robots, hence the word ‘robo-signing’ and that means the documents are worthless. How Robo-signed Documents Affected the Foreclosure Crisis The laws exist to ensure that a bank cannot legally foreclose on a house if the paperwork is not in order. During the foreclosure crisis, the banks participated in a number of schemes to bundle good and bad mortgages together and sell them as investments. During that process, millions of mortgages effectively became the property of other financial entities but the speed at which this was done meant that the banks did not properly document the paper trail. As a result, many banks cannot prove that they own the mortgages on which they are trying to foreclose. As their robo-signing tactics came to light, lawyers and judges are now taking a much closer look at the affidavits and paperwork and refusing to sign off on foreclosures that lack proper paperwork. Of course, the reality is that before these tactics were exposed, many homeowners lost their homes in what could easily be termed illegal foreclosures, and those homeowners have a right to sue to get their home back. How the Foreclosure Crisis and Robo-Signing is Helping Homeowners For all practical purposes, for a bank to enforce the terms of a mortgage, it must foreclose on the property. Through a proper foreclosure, the lender gains ownership of the property and has the right to force the ex-homeowner out. If the lender is prevented from foreclosing – often due to their own neglectful practices – it can sue the homeowner for breach of contract if the homeowner falls behind on their mortgage payments. In many cases, a foreclosure attorney is able to represent the homeowner and effectively: - Stall the foreclosure process
- Prove that the foreclosure paperwork is not in order and/or file for a loan modification
- Shame the bank into renegotiating the mortgage on terms the homeowner can afford
At this point, the financial crisis may very well turn in favor of smart homeowners who work with a foreclosure defense attorney. Lawsuits are expensive, and the banks are in no position to further extend their time and effort trying to foreclose on homes they cannot prove they own. Plus, after foreclosing on so many homes, they have a new problem: homes sitting around with no occupants and waiting to be bought in a low market. Whatever your situation may be, getting the right advice and legal counsel can help you fight the foreclosure crisis. For a no cost, no obligation consultation and review of your case you can call the Litvin Law Firm. They are a law firm that is focused on foreclosure defense and you can reach them at 877-829-4104.
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