OHM,
Before taking the Nuclear Option something to consider.
You'd mentioned that there are various amounts added to you loan balance, fees of some sort. Have you sent a notice of error to challenge the amounts and request an explanation regarding what the fees are and how they justify imposing them on you? Check out the wording in your loan docs for charges.
In my DOT I agreed that they could charge fees for "services performed in connection with the Borrower's default, for the purpose of protecting the Lender's interest in the Property and rights under the Security Instrument, including but not limited to attorneys fees, property inspections, and valuation fees....But Lender may not charge fees that are expressly prohibited by the Security Instrument or by Applicable Law."
It's somewhat ambiguous, huh? The obvious request would be an explanation as to how the charges protect the Lender's interest, particularly in the case of corporate advances.
If you're with Fannie or Freddie there are specific allowable fees on their websites. But with others default servicing charges are an industry in themselves and they're known to be padded.
The truth is that overcharging default related fees is a violation of the loan contract. That's according to the FTC who took action against Countywide for over charging fees on 2010.
"In charging marked-up fees for default services Defendants have violated the mortgage contract by charging borrowers for default services that exceed the actual cost of the services and that are not reasonable and appropriate you protect the note holder's interest in the property and rights under the Security Instrument."
Overcharging places the Lender in default of their legal obligations and makes their right to foreclose questionable.
There's another angle you might pursue...
If you have evidence to show that the party trying to take your home has no standing, then right then and there, you can argue through basic contract law that the contract does not include them--and therefore, they gain no rights or benefits through the contract. Meaning, for example, they cannot charge you any fees of any kind because they would have to be a party to the contract to be able to do that.
Also, I think you would have a very hard time trying to convince a court that they broke the contract because of excessive "default related fees", simply because they would only need to respond with "since the borrower was already in default by the time those fees were added, we were no longer required to abide by certain terms of the DOT." And legally speaking they would be correct. Generally, contract law excuses one party from performing under the contract if the other party is already in default. I think that would put the focus in the wrong place and you would be left with a court still saying and believing that you were in default. Charging excessive fees does not make their right to foreclose questionable----it only questions their actions after initiating that foreclosure. That's how I believe a court will look at it.
For that plan to have any teeth, you must show that IF they were even a party to the contract, that THEY defaulted first. That puts YOU in a place where, again generally speaking only, you might be excused from performance without penalty.
I'm using this as part of mine. Since I am able to show that they defaulted by refusing to credit payments I made in good faith--even their own payment history proves it--at that point, under my state's laws, I am excused from performance without penalty until, at the very least, such time as they get around to fixing their errors. Since they won't even admit their errors, let alone fix them, I'm still excused from performance. And, the "without penalty" portion of that statute means that they cannot charge me a single penny in extra interest, foreclosure fees, court costs, inspection costs, or anything else they might try to conjure up as a result. Under the law, I am specifically not required to perform, until they fix what they have broken.
This sentiment is often structured in the laws in a way that allows for different levels of severity for breaches. Example, if they do not credit a payment, that's not a habitual or severe enough breach that would cause you to automatically lose your home. But, if you show a pattern of this behavior, that's more severe. Hence, the allowance that they can rectify their default. Naturally, in a longer-duration issue, where I made payments to them a decade ago that they literally claim to this day I never made, even though they just provided a payment history showing some of them as being made, I can claim more of a dire situation. Then, this can, IMHO, open the door to an unjust enrichment defense--if under the law I am excused from performance WITHOUT PENALTY, then awarding them all those penalties will result in them gaining a very unfair windfall specifically because they refused to obey their own contract. If I refuse to credit your payments, how can I later claim you injured me? That's the deal. I made payments. They cashed the checks. They then pretended I never made them. I even have every receipt from those payments, sent by certified mail and the whole bit.
Now that our courts are hopefully opening up again soon, it's time to dig back in. I am still waiting on the result of a MTC discovery. We'll see what happens next.