Most people think that their mortgage company is a giant, sprawling operation that has tons of sophisticated computer systems designed to track and monitor every single loan and keep things in check.
Most people also think that their mortgage company has their paperwork in order and pays attention to the law.
I’m sure there are also adults who still believe in Santa Claus.
Remember we talked about how mortgages are bought and sold, chopped up into little pieces and transferred to people and companies all over the world? Well, here’s the big secret…
In their mad rush for the big bucks, these greedy lenders and investors cut corners. In their psychotic eagerness to buy up as many loans as possible, investors got sloppy. They failed to keep track of your loan documents and may have even violated certain federal lending guidelines.
When you got your home, you signed a document called a Deed of Trust. This Deed of Trust is the evidence that your home is the security for the loan you received from the lender. The Deed of Trust is recorded in the real estate records at the Chancery Clerk’s office in the county where your property is located.
When the original lender sells the Deed of Trust and Promissory Note to investors, a document called an Assignment must be properly signed. However, frequently the selling lender never executed an assignment. Some lenders have taken to back dating assignments and other documents after they have already started foreclosure proceedings, even though this is invalid and fraudulent.
When a Deed of Trust is transferred, the Promissory Note (that’s the other document you signed) must also be transferred. When a foreclosure is begun, the entity that is foreclosing must have possession of both the Deed of Trust and the Note properly transferred and properly signed over. If there is no Note, then the party foreclosing does not have the legal right to do so.
Because a loan may be sold multiple times and may be parceled out so that multiple investors own small fractions of it, it may be impossible for them to produce the Note. If the lender or investor cannot produce the Note, it does not have the legal right to proceed with a foreclosure.
But that’s not all. Some errors arise when you’re closing on the loan in the first place.
Under federal truth-in-lending laws, lenders are required to make certain disclosures to the borrower about the loan. These disclosures include a Good Faith Estimate, a Truth in Lending statement, a 3 day Right of Rescission Notice, and the itemization of the amount financed. If the lender failed to provide these documents to you prior to or at closing or if there are any discrepancies in the documents as they relate to your loan amount, interest rate, and other loan charges, you have leverage to force the lender to modify your loan terms.
Another issue which may play out in your favor is the inability of the lender or servicer to produce a complete and accurate payment history.
A loan may also be challenged on the grounds that the lender disguised interest charges as other loan fees, charged excess junk fees such as wire transfer fees, courier fees, engaged in predatory lending or other questionable practices.
And here’s another secret…
You think Wells Fargo, Bank of America (Countrywide), JPMorgan Chase, CitiMortgage, GMAC Mortgage, Ocwen, or Saxon, to name a few, own your mortgage? Think again. These are mortgage servicers. They are rent collectors, middlemen who get paid for dealing with you and collecting the mortgage money each month. They don’t own your mortgage. They don’t care if you pay on time and they don’t care if you are late. It is not their loan.
They will make more money by foreclosing on you and the further behind you are the more money they make.
*Other foreclosure information available on the following site sub-pages:Understanding the Foreclosure Process in Mississippi
American Dream – Homeownership
Avoid Foreclosure Rescue Scams
How to Fight Foreclosure in Mississippi
How to Stop Foreclosure in Mississippi
Loan Modifications & Forbearance