I have previously written that some comsumer protection attorneys have told me that there are many ways to successfully defend a mortgage lender's actions for a mortgage deficiency judgment. The complexity of the modern mortgage lending has made mortgage deficiency suits and the underlying foreclosures more complex for many lenders and thereby easier to defend by skilled attorneys. Last Sunday's N.Y. Times had an article about how one borrower defended a mortgage foreclosure and was able to get the mortgage company to agree to a workable settlement. Link: Fair Game - How One Borrower Beat the Foreclosure Machine - NYTimes.com.
A borrower can demand that a bank suing for foreclosure or a deficiency produce the original note and any assignment of the note to the company that purchased the mortgage. As most people know, the majority of mortgages in recent years were sold and resold to large institutional investors here and overseas. The Times article stated:
"In the seemingly long-ago era when banks held on to the mortgage loans they made, this was a straightforward matter. But today, amid the freewheeling packaging of mortgage loans into securities that are sold off to investors, it’s much less clear who controls the note — all of which promises to cause banks enormous legal and financial headaches as foreclosures mount.
The added twist is that some judges are taking the borrowers’ side in foreclosure disputes, precisely because of murkiness surrounding notes."
There are many other defense strategies available to consumer attorneys defending bank foreclosures. Often, investing some money with the right attorney can help change the balance of power in the foreclosure suit and convince the lender to enter into a fair settlement which allows people to remain in their homes. At least a good defense buys time in your home.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida