Now that I am actively practicing law I see the reasons for the anger and recriminations regarding the conduct of proceedings involving foreclosure. But whether the judge likes it or not the law is very clear regarding a condition precedent to the filing of foreclosure action. The borrower must receive notice. The notice must state that the borrower is in default and must also state the conditions for reinstatement to cure the default. The law is very clear that failure to give proper notice is reason enough to deny the foreclosure. It doesn’t stop the bank from coming back later after giving proper notice, but it does stop the current foreclosure proceeding.
Generally speaking you’ll find the required language in the mortgage in paragraph 22. There are other paragraphs that speak to default have the right to reinstatement — usually in the preceding paragraphs to the paragraph 22.
Notwithstanding the law, I am finding that there are many judges who consider it to be their political mandate to push the foreclosures through to sale. They may be right as to the political mandate but they are wrong to use it in a court of law. Failure to give proper notice or any other material fact that might be in issue is sufficient to defeat a motion for summary judgment as long as it is clearly in the record at the time the order on summary judgment is entered. In Florida at least I detect an attitude from the bench which disregards the facts of the case in favor of entering judgment for the banks.
Having the facts and law on your side does not mean that you will be able to stop the foreclosure. This does not stop judges from blaming borrowers for delays in the proceedings despite the fact that it is the obligation of the foreclosing party to prosecute the action. And yesterday I saw a judge enter an order granting summary judgment despite the fact that there were dozens of facts in dispute. His reason appeared to be that the case had been hanging around for four or five years — during which time the homeowner could have filed a motion to dismiss for failure to prosecute the action at least twice.
Of course homeowners do not know the Rules of Civil Procedure which is why I have stated so strongly and so often why they should retain counsel if they really want to keep their home.
In the course of my research on a related topic I uncovered the information shown below. It is obvious that under federal and Florida law the notice must contain information concerning the right to reinstate the loan and a demand for a specific amount of money required for reinstatement. Some banks have chosen to ignore the right to reinstatement because of their enthusiasm for obtaining a foreclosure judgment. And there are judges that will ignore the issue of notice and enter judgment for the bank. But on appeal there seems to be little doubt that the judges order will be reversed, the sale will be reversed, and the foreclosure action will be dismissed (without prejudice to refile).
Most judges appeared to approach a foreclosure case as a fairly simple matter that is very annoying to them. Instead of asking the attorney for the bank to present his/her case there are several judges who are announcing that everything seems to be in order and so judgment will be entered. While this is wrong I would caution the reader not to draw the further conclusion that the judge is corrupt or has an agenda designed to hurt homeowners. In the eyes of the judge, based upon actual experience for several years, most defenses that have been presented to judges have been for the purposes of delay. In part this was allowed and even encouraged by the banks who were unready to fully prosecute the foreclosure action because of the potential liability for taxes, insurance and maintenance.
In my firm we generally refer clients who are simply looking for delays to other attorneys whose down payment and monthly payment is far less than what we charge. After years of writing about it I have reentered the practice of law and I am attempting to set a standard of vigorous and aggressive prosecution of the case against the bank. This of course is only possible if the bank has done something wrong. But you are not going to know that without someone going through the entire process starting with the application for mortgage and going through the present time. It also requires discovery in the form of interrogatories, requests for admission, requests to produce, and subpoenas issued to appropriate witnesses requiring them to bring documents with them.
In my opinion the more lawyers that aggressively pursue the case, the more judges will start questioning why the bank is backpedaling. Once you get a judge thinking that you are the aggressor, you have succeeded in taking control of the narrative. Once you have taken control of the narrative you can raise questions in the judge’s mind as to whether or not there might actually be something wrong with this particular foreclosure action.
I don’t deny that there is a value to any homeowner in getting free rent or no mortgage payment and that an attorney might be useful in maximizing the length of time in which the homeowner is not required to pay anything. It might be the only way that the homeowner can recover part of his or her investment. But delay tactics seem to dominate the litigation landscape. So it should come as no surprise that any judge would approach a foreclosure case with the assumption that the debt is valid and that the documents are in order; the only question left is when will the sale take place.
My mission, as I conceive it, is to make some changes in the litigation landscape. Specifically, I think that with proper pleading and discovery, it may be revealed that the party seeking the foreclosure lacks any ownership interest in the loan and lacks any authority to represent anyone with an ownership interest in the loan. I also think that the amount demanded for reinstatement or redemption is also misstated in that the borrower is not getting the benefit of offset from third-party payments that should be credited to the account in which the loan receivable is held. In short, I still believe what I said six years ago, to wit: as crazy as it might seem, the loan was prepaid at the time of origination and then repaid several times over after which it was then sold to the Federal Reserve probably multiple times and sold two government-sponsored entities multiple times. If the loan is paid (several times over, no less) then there can be action to collect on it, least of all foreclosure.
While the presumption is on preventing a homeowner from getting a free ride, courts have been giving the financial industry the equivalent of corporate welfare with each foreclosure sale. And in doing so they have actually stripped the true creditor from any collateralized claim and further stripped the true creditor from making any claim at all. The beneficiaries of this idiotic system are obviously the banks. The victims include everyone else including the investors, insurers, taxpayers, borrowers, and the Federal Reserve. Of course in the case of the Federal Reserve, it knows that it is a victim and that it is buying completely worthless paper from the banks who have previously sold the same paper to others. That doesn’t seem to matter to the federal reserve and so far it doesn’t seem to matter to any of the judges sitting on the bench.
http://www.credit.com/credit_information/credit_law/Understanding-Your-Foreclosure-Rights.jsp
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