Lost Track of Who Owns Your Mortgage? Lender says they “Lost the Note?”Chances are You’re Not Alone
In the confusing sea of paperwork transferring mortgage notes from lender to holder to securitized pool, many consumers aren’t at all sure exactly which entity owns their mortgage notes, or how one entity is related to another.
But this big paperwork mess is working to the advantage of many homeowners facing foreclosure in that the mortgage lenders and note holders may not know, either. This is evidenced by the fact that 90% of all Foreclosure Complaints I have read in the last 6 months allege (by the Plaintiff/Lender) that the “Note was lost or destroyed and its whereabouts cannot reasonably be determined.” Thus, they are seeking under certain state statutes to “Re-establish a Lost/Stolen Promissory Note.” Legalese for re-creating the note out of thin air.
If homeowners do nothing in these foreclosure lawsuits, the courts essentially “rubber stamp” these requests and find the homeowner in default. One BIG mistake I am finding is that some homeowners ARE responding to the suits in their own words on the ADVICE of certain friends, even some attorneys. Folks, this is a HUGE mistake. If you do not claim all of your defenses (afforded to you) in your initial response (called a responsive pleading) then by Rules of Civil Procedure, you are in fact “waiving those defenses.”
I highly recommend retaining an attorney to represent you. If you want an attorney to help you, which I highly recommend, send an email to lane@lanehouk.com
Hiring an attorney to represent you in a foreclosure is the only smart move and it’s an investment that pays a return, not an expense. If you don’t understand my point here, email me and I’ll explain…
Florida attorney April Charney noticed that a lot of the mortgage foreclosure cases she saw involved affidavits of lost notes. An affidavit of lost note is essentially a sworn statement that says, “we own this debt, but we can’t find any paperwork to prove it, so please just take our word for it”. A bit of investigation revealed that in many cases, the paperwork didn’t exist, or originated at the wrong time, or conflicting interests had been recorded. In some cases, notes had been illegally purchased by pools after they were already in default.
These flaws can bring a mortgage foreclosure action screeching to a halt; Forbes reported on one such homeowner who is still in residence five years after foreclosure actions were commenced.
If you’re facing foreclosure, don’t assume the worst. Get the professional help you need to untangle the paper trail and find out whether you have valid defenses in a forecosure action.
Florida- How do you defend against a 2nd mortgage lender turning the 2nd mortgage debt over to a credit collection agency, instead of going through with foreclosure?
I have heard this is the new trick for lenders to get around “lost note” and to get something out of property owners, that have properties that are upside down on value and the lender would get zero in second position at a Florida foreclosure auction, due to the devaluation of real estate.
1) loan was sold to “big time” lender
2) “big time” lender sues for foreclosure- files with the claim they “lost the note”
3) voluntarily dismisses lawsuit for 2nd mortgage foreclosure with the court
4) property owner calls to find out the deal. “big time” lender says they are now wanting to work out a loan modification and are turning the debt over to a credit collection agency.
5) how do you fight this? the same way as the foreclosure…when the collection agency mails you a letter, dispute it? do they still have to prove the own the note and the rights to the debt?
my rent is for 1500 hundred amounth iwould like to get help how can i get help
Collection agencies are regulated by the Fair Debt Collection Practices Act. Click Here to link to the FDCPA.
I have a post on Debt Validation and how to deal with collection agencies. Click Here to read that post.
Basically, if the collection agency can’t produce an original, certified copy of the Note with your signature on it, they must stop collection activity and cannot report any derogatory information on your credit report. You may need an attorney to fight this if they try to report on your credit or sue you but the same rules apply… no evidence of debt, no collection.
You might also look into sending a Qualified Written Request to the servicer of record and the originator to request information and dispute the amount that they say you owe. If you need help with this, you can contact me. My info is on the “Contact Author” page.