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From Homeowner to “Renter”

05 Mar

First, an update on my current situation: My attorney called me yesterday morning, a Sunday morning, and asked me to call him back. It’s not unusual for him to call me on a weekend. But it is unusual for him to call me twice in the same weekend. We had just spoken the day before, on Saturday, and he was just giving me an update, though there wasn’t much going with my cases.

“I got something in the mail on your case and just opened it this morning. I have good news and bad news for you. Which do you want first?” he queried. “Bad,” I responded. I always like to end my conversations on a good note. Plus, getting the good news last always seems to make the bad news less bad. “You’re going to have to start putting some money aside every month,” he said. “That’s the bad news. The good news is that the sheriff is not coming to evict you. The court has ordered that you pay rent into an escrow account until the cases are decided.”

Whoohoo! A heavy load is now lifted from my mind, my heart, and my soul. I know that I’m still not in the clear, that we still have a fight ahead of us, but I feel like I can breathe, knowing that I have bought some time. It is especially encouraging to me that the appellate court overturned my local court’s decision. Maybe they are seeing the irregularities that we have found. Whatever the reason, I am just grateful. Hope still lives!

Alright, now back to where I left off last week. I had a friend who had had to short-sell her home the year before, and had gotten to know her real estate agent. I called her up to see what she knew about my situation. She said she thought I had to move, that that was all there was to it. No, I protested, we had an agreement, and I had held up my end of the agreement. There had to be something I could do! She then spoke to someone in her office, who referred me to an attorney.

After spending about an hour and half on the phone with him, then faxing over my documents, he called me back. “You have a good case,” he informed me. He went on to explain that there were many, many issues with what my lender had done.

First off, the “Forbearance Agreement” or contract they had sent me was not a legal contract, in that a contract is supposed to extract a promise from each party. In order for the contract to be completed, each party must perform the promise made within it. However, the promise also has to be substantial. In my case, the contract required me to pay an accelerated amount (my regular monthly payment plus a small amount beyond that to cover penalties and legal fees) on time for four months. I was also to provide them with proof of my financials in the third month. All of which I did.

For their part of the promise, they had promised to review my loan for modification. He told me that it wasn’t a substantial enough performance. If they had promised to modify my loan, that would have been substantial performance. The contract wasn’t worth the paper it was printed on, he said.

Secondly, he felt the lender had purposely misled me and never had any intention of modifying my loan. You will see the same story repeated ad nauseum across the country. Millions of people, faced with job losses and seeking to save their homes have been cheated by their mortgage companies in this way. (Please refer to my first post to read how I entered into a forbearance agreement with my lender.) They have advised their clients to stop making their mortgage payments, then request a forbearance agreement just before the house goes to auction, then auction it off anyways. Some lenders have dragged their clients through multiple forbearance agreements, and never offering a workable modification, if they do at all.

Thirdly, my lender had breached their fiduciary duty to me. This means that they had a duty to work to preserve my interest in the property, as they were in a position to damage me by their actions. In instructing me to stop making payments, they led me to create a situation in which I effectively abandoned my rights to my home. Even though I didn’t see it that way at the time.

There were many more, smaller issues, but these were the three main issues he planned to sue on.

Several weeks after talking with and hiring him, I filed a civil lawsuit against my mortgage company.

During the process of putting together the civil lawsuit, I received a notice of Unlawful Detainer (UD), about a week after I found out my home had been sold. A UD is sometimes better known as a Landlord eviction. Typically, UDs are served by landlords of rental units to renters who have not paid their rent in 3 months or longer. So, the lenders have found a loophole, and exploited it to the fullest of their ability.

This is how it works: Once your home is sold, the lender declares themselves the landlord (because all that is required to call yourself landlord is that the property be in your name – regardless of how you acquired title), and you become their tenant – even though you never signed a rental agreement with them. Thusly, because you haven’t made your loan payment in three months, you are in default – not only on your loan, but on your supposed “rental” agreement. It now becomes clear why the magic number of months for which you are advised to stop making your payment is 3! This is the minimum time at which they can forcibly and legally evict you.

My attorney had me working with someone who was performing a property audit on my home. I told her about receiving the UD notice, and she suggested I talk to another attorney who specialized in defending on UDs. I spoke with him, and hired him to fight the UD.

So, it’s been 2 1/2 years since I hired my attorneys. And I have been living in my home all that time. Thanks to my dedicated attorney who called me Sunday with the good news that I’ll be able to live here a while longer. He works 7 days a week, defending people who he feels have been wronged by the banks. I’m glad to have him on my side!

Handy tip: Whenever you are changing the terms of your loan, you should keep copies of everything, and take notes during your phone conversation with the lender. I saved copies of Cashier’s Checks, the mailing receipts, my letters from the lender thanking me for making my payments, and took notes during my conversations. All this has wound up in my discovery file.

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Posted by on March 5, 2012 in Foreclosure

 

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