Foreclosure Defense On Fha Loans (24 Cfr 203.604)

Will you commit to the letter writing campaign?


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wanda robo

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Sep 29, 2012
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All good my friend, I'd rather we post in private, or on our NJ thread. I'm tired of picking up our own posts, when doing research. Etc., Etc., (LOL, tonight's movie is the "King & I". "Shall We Dance"?
 

PatZZ

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All good my friend, I'd rather we post in private, or on our NJ thread. I'm tired of picking up our own posts, when doing research. Etc., Etc., (LOL, tonight's movie is the "King & I". "Shall We Dance"?
I really wanted to help people, but only if people want to be helped. It's possible to ask for and give information w/o over-divulging personal info.

1100 visitors is a LOT - and in a short period of time. I'm sure many are repeats, but it's still a lot. Most probably came from searches. Yet none of them made even one comment here?? Very weird.

I think much is lost though when there are too many subforums going on off the boards because we lose the benefit of feedback and interpretation from others, and vice versa. After all, that's the purpose of a forum. We all should be cautious what we post at all times. It was interesting that the FL lawyer said the judges are reading Stopa's blog. So if the judges are reading the blogs, then we know the mills must be reading them. Frankly, in many ways that wouldn't bother me as long as I was sure I wasn't giving up any strategy that would behoove me keeping to myself.

Will never forget the guy from the debtor forum where his own plaintiff's attorney read his comments and then brought it up in court !!!!!!!! He ended up losing because of it. But that was a case where the poster was seriously over-the-top.
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PatZZ

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Another win in the NY Appellate Court on the FHA face-to-face defense. Court made it quick and simple. In about 2 pages, SJ for the bank was reversed. Never should have gotten to the appellate court. The trial court judges are despicable because they are requiring a borrower to pay a lot of extra money to fight the trial judge's preferential decision. Our courts and judges make our legal system look like a big joke. Hope they all rot in hell.

Here's the link to the opinion.

http://decisions.courts.state.ny.us/ad3/Decisions/2016/520683.pdf
 

cyadra

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Jun 9, 2014
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Another win in the NY Appellate Court on the FHA face-to-face defense. Court made it quick and simple. In about 2 pages, SJ for the bank was reversed. Never should have gotten to the appellate court. The trial court judges are despicable because they are requiring a borrower to pay a lot of extra money to fight the trial judge's preferential decision. Our courts and judges make our legal system look like a big joke. Hope they all rot in hell.

Here's the link to the opinion.

http://decisions.courts.state.ny.us/ad3/Decisions/2016/520683.pdf
Here is the thing, you really don't need to hire a lawyer to do this, but I can see why you would. As long as you follow the procedure, outline this as a conditions precedent to SJ, submit the correct affidavit's, and cite case law it shouldn't be a problem, as long as you ask for dismissal with prejudice, and request that all legal fees, late fees, and any other fees be either paid for by the Plantiff or be dismissed.

The question now becomes what happens next? The case goes back to court. So what happens to the note? The loan was never properly accelerated so all of the fees and INTEREST and such get wiped out. The entire balance of the loan is now not due, however what do you do now? I would argue that the note needs to be reset back to the point when the foreclosure was filed. The FHA guidelines don't really state what happens if the note was improperly accelerated.
 

PatZZ

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Here is the thing, you really don't need to hire a lawyer to do this, but I can see why you would. As long as you follow the procedure, outline this as a conditions precedent to SJ, submit the correct affidavit's, and cite case law it shouldn't be a problem, as long as you ask for dismissal with prejudice, and request that all legal fees, late fees, and any other fees be either paid for by the Plantiff or be dismissed.

The question now becomes what happens next? The case goes back to court. So what happens to the note? The loan was never properly accelerated so all of the fees and INTEREST and such get wiped out. The entire balance of the loan is now not due, however what do you do now? I would argue that the note needs to be reset back to the point when the foreclosure was filed. The FHA guidelines don't really state what happens if the note was improperly accelerated.
My feeling is people do not need a lawyer for the majority of foreclosure cases IF they can commit to a large amount of research and education. The exceptions are cases involving some really technical, or never-heard-before defenses, and cases where it's commonly known the judge is an ass and won't allow a pro se to get anywhere in his/her court.

We have been discussing the face-to-face defense for about 2 years now on the "Foreclosure Timeline in NJ forum." I was recently saying to wandarobo that this defense is not as simple as it may seem when it comes to pleading. There have been countless losses - even where the homeowner had counsel. There are little details and nuances that can't be missed. One of those is that it should not be pleaded ONLY as a condition precedent. There are several courts that have said this defense is an affirmative defense, not a condition precedent. So it should be pleaded both ways just in case, UNLESS there is case precedent in the state where that issue has already been resolved. IMO, it is error for the court to find it to be an affirmative defense. HUD makes it clear it is a condition precedent.

When I answer my complaint, I will not request dismissal w/prejudice. I think that is a mistake. I think I have read and saved all the cases using this defense that are online. Not one case was dismissed w/prejudice. Most courts detest this defense and would never entertain a dismissal with prejudice simply because a meeting wasn't held. Think about the precedent that would set. No one gets a dismissal w/prejudice when a NOD isn't sent. This isn't that different. The judge will be outraged if the borrower insinuates that a free house should follow simply because a meeting wasn't held.

What happens after a case is dismissed w/o prejudice is an issue. HUD failed to consider this in their lawmaking. I read one case where Wells lost on this defense and then filed the complaint again after a few months BUT still didn't have the meeting.


HUD has a punishment for the lender in terms of the lender failing to abide by HUD regulations, but that punishment has nothing to do with the homeowner. There are a few scenarios that could happen but I don't want to discuss on this forum. Too many eyes are viewing this forum w/o commenting. I find that odd. I would bet many of the visitors are foreclosure mills.

Most cases with this defense are resolved at the appellate level. 95% of the time, the trial court shuts it down and grants SJ to the bank..

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cyadra

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Jun 9, 2014
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Its a shame that a pro se homeowner has to layout this entire scenario to a judge or a lawyer. The main things I feel that have to be stressed is that you as the homeowner entered into a contract with a lender, knowing full well that there are a set of rules provided for by HUD that both parties must follow. This is listed three times on my note, and three times on the mortgage. Any lender who purchases the note should understand this. It is not your fault as the homeowner that the lender or servicer does not understand or know what the HUD rules are. Also, a judge (or court) is not in a position to determine if a homeowner is getting a "free" house, if that is what they state, then you are not in a court of equity. Their only job is to determine the outcome based on the rules of HUD, in a lot of cases, state law isn't even applicable. I would even appeal a judge's decision if it were in my favor, if he or she insinuated that as a homeowner I was out to get a "free" house, that is injecting bias into a matter that is purely equitable.

The argument is simple. Before a foreclosure can take place the note must be accelerated. You can not go from a missed payment straight to foreclosure. In order to accelerate the note, the face to face meeting (and other things) must take place. The face to face meeting actually has to take place before a certain period of time occurs. If the lender never has that face to face meeting, however you have been in default for over that period of time, you can NEVER go back in time and cure it. From that point forward, the lender can never ever ever be successful in court and they can never foreclose. They can foreclose on you over and over again, and they will never win, even if they hold the face to face meeting after the fact, they are in non compliance. Thus the note can never be accelerated.

If banks and servicers where smart what they would do is forgive all of the past debt and pay the lenders all of it through their own funds, and continue the mortgage as if nothing happened. The note would not be in default and both parties can start over from square one.

As far as foreclosure mills are concerned, they know all about this. I have seen documents already from foreclosure seminars around the country on how to try and get around this, and basically their only hope is that proper court procedures were not followed by the defendant. They know there is no defense to this when properly pleaded. They also know that they are under a much better microscope from the courts, and many mills and servicers are willing to allow a few houses to slip through their fingers vs taking the risk of pissing of the government or the court.

Another HUD regulation often not followed deals with notification when a servicer changes. A lot of times (as is in my case) my original note and mortgage required me to send my payment to the lender. FHA rules require the new or old servicer to send a letter to the homeowner when the servicer changes and payment goes to a new address. 90% of the time this letter (which is very specific) is never sent, a bill is sent, but not a letter. Courts have determined that a bill is not considered a formal letter like HUD wants. In cases like this, the homeowner is not responsible for ANY fees or penalties whether the loan is in default or not.

I 100% agree that this defense is a conditions precedent defense. I would ask for both a dismissal with prejudice and without. And state to the judge that since it is impossible to ever accelerate the note the case should be dismissed with prejudice because they can never collect on it.
 

PatZZ

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Its a shame that a pro se homeowner has to layout this entire scenario to a judge or a lawyer. The main things I feel that have to be stressed is that you as the homeowner entered into a contract with a lender, knowing full well that there are a set of rules provided for by HUD that both parties must follow. This is listed three times on my note, and three times on the mortgage. Any lender who purchases the note should understand this. It is not your fault as the homeowner that the lender or servicer does not understand or know what the HUD rules are. Also, a judge (or court) is not in a position to determine if a homeowner is getting a "free" house, if that is what they state, then you are not in a court of equity. Their only job is to determine the outcome based on the rules of HUD, in a lot of cases, state law isn't even applicable. I would even appeal a judge's decision if it were in my favor, if he or she insinuated that as a homeowner I was out to get a "free" house, that is injecting bias into a matter that is purely equitable.

The argument is simple. Before a foreclosure can take place the note must be accelerated. You can not go from a missed payment straight to foreclosure. In order to accelerate the note, the face to face meeting (and other things) must take place. The face to face meeting actually has to take place before a certain period of time occurs. If the lender never has that face to face meeting, however you have been in default for over that period of time, you can NEVER go back in time and cure it. From that point forward, the lender can never ever ever be successful in court and they can never foreclose. They can foreclose on you over and over again, and they will never win, even if they hold the face to face meeting after the fact, they are in non compliance. Thus the note can never be accelerated.

If banks and servicers where smart what they would do is forgive all of the past debt and pay the lenders all of it through their own funds, and continue the mortgage as if nothing happened. The note would not be in default and both parties can start over from square one.

As far as foreclosure mills are concerned, they know all about this. I have seen documents already from foreclosure seminars around the country on how to try and get around this, and basically their only hope is that proper court procedures were not followed by the defendant. They know there is no defense to this when properly pleaded. They also know that they are under a much better microscope from the courts, and many mills and servicers are willing to allow a few houses to slip through their fingers vs taking the risk of pissing of the government or the court.

Another HUD regulation often not followed deals with notification when a servicer changes. A lot of times (as is in my case) my original note and mortgage required me to send my payment to the lender. FHA rules require the new or old servicer to send a letter to the homeowner when the servicer changes and payment goes to a new address. 90% of the time this letter (which is very specific) is never sent, a bill is sent, but not a letter. Courts have determined that a bill is not considered a formal letter like HUD wants. In cases like this, the homeowner is not responsible for ANY fees or penalties whether the loan is in default or not.

I 100% agree that this defense is a conditions precedent defense. I would ask for both a dismissal with prejudice and without. And state to the judge that since it is impossible to ever accelerate the note the case should be dismissed with prejudice because they can never collect on it.
Hopefully, this info will help other visitors here. You're preaching to the choir with me cyadra. I've been studying this defense and countless cases for the last 5 years.

I don't know how many foreclosure cases you have read or how many times you have sat in on cases in the court, but "free house" comes up all the time. The bank's counsel includes it in their pleadings. The judge will talk about it in the courtroom. There is nothing fair and lawful about a foreclosure case. The judge doesn't care about the regulations or HUD or anything else except making certain the bank wins. The judge is not gonna get pissed off at the bank for ignoring HUD's regs, Again, the judge doesn't care. You're imagining a true, honest court of law. Perhaps the courts are fair and follow the law and the rules where you are. They don't in my state.

If things were as simple as how you describe, then more cases would be won at the trial level. That just doesn't happen. Less alone a dismissal w/prejudice.

You stated: "From that point forward, the lender can never ever ever be successful in court and they can never foreclose. They can foreclose on you over and over again, and they will never win, even if they hold the face to face meeting after the fact, they are in non compliance. Thus the note can never be accelerated." I beg to differ. First of all, yes they can be successful in court. Banks are winning these cases cyadra for a myriad of reasons. If you go here with this kind of pleading, the judge will find anything to make you lose. I am not gonna mention this at all. More importantly, I have never seen pleadings where any defense lawyer went this far. You would be bringing up an issue that might not come up. I have only read a few cases where either the mill or the court mentioned it. Never has a defendant or his/her counsel been the one to raise this ugly possibility. Once YOU raise it, you open a whole other can of worms and you will not win. And as I mentioned before, you mustn't forget about precedent. Once the court grants you a dismissal w/prejudice, it must be granted to everyone else after you in that court - who properly pleads the case. I'll never forget reading a law book written by a judge. He said that the one thing every judge avoids is being the "crazy" judge who writes an opinion about a novel issue that sets horrible precedent in the court.


And of course the mills know about this defense. That wasn't my point. Attorneys visit these forums seeking information. I know that for a fact since one guy lost his case when the plaintiff's attorney brought up something that the defendant had said on a forum. So I am very cautious on forums. I'm certainly not going to help the plaintiff.

IMO, taking that angle in your last paragraph is a battle you will never win. The judge in my county would lose all patience, of which he has little already. Even with a dismissal w/prejudice, I have read more than a few cases where the judge allowed the case to be refiled because another late payment starts a new default. What a bunch of crap, but that's a whole other issue.

Wish you luck though
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wanda robo

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Shame on you, sneaky foreclosure mills. Go back to your boilerplate pleadings & leave us alone to help educate ourselves!!!
 

Fiasco

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Pat, I first read this post about one yr ago but was unable to respond because our computer died & couldn't afford to replace it. Still don't have one. We have suffered through some hard times, however, this info was extremely helpful. Our lender had won the summary judgment, but we still wrote the letters. They got the judgment last year. Since then, we have heard nothing. No one at HUD will tell us if any investigation is going on. They say that's the rule. But we have a sneaky suspicion HUD's inspector general is/was doing something with our complaint. Against my instinct, my husband insisted on calling the bank's attorney. They said it was on hold but would not say why.

Not only did this help me, but I had a job where I encountered a lot of people in trouble with their loans. So 6 of us got together as a group to write the letters and keep each other up to date with what was happening with our own individual campaigns. All of us have been successful at least to some extent. As you said, it wasn't easy. We had to be committed and stick to it. Not one of us spoke to any lawyer who knew anything about this defense. But we have searched for cases and found a bunch of them. I know 3 other people who have not been foreclosed yet & as opposed to writing these letters, they are preparing themselves to fight using this defense & any others they have.

I thank you so very much for posting this. I'm grateful to you & grateful to my brother who told me to keep searching for info online. I found this.

We still have no computer & money is still tight due to 2 ill children, but I will log on when I can get access. Don't want to use a friend or family member's computer. Also don't want to leave much of my personal info here, but is it okay to send you a private message?
 

PatZZ

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Pat, I first read this post about one yr ago but was unable to respond because our computer died & couldn't afford to replace it. Still don't have one. We have suffered through some hard times, however, this info was extremely helpful. Our lender had won the summary judgment, but we still wrote the letters. They got the judgment last year. Since then, we have heard nothing. No one at HUD will tell us if any investigation is going on. They say that's the rule. But we have a sneaky suspicion HUD's inspector general is/was doing something with our complaint. Against my instinct, my husband insisted on calling the bank's attorney. They said it was on hold but would not say why.

Not only did this help me, but I had a job where I encountered a lot of people in trouble with their loans. So 6 of us got together as a group to write the letters and keep each other up to date with what was happening with our own individual campaigns. All of us have been successful at least to some extent. As you said, it wasn't easy. We had to be committed and stick to it. Not one of us spoke to any lawyer who knew anything about this defense. But we have searched for cases and found a bunch of them. I know 3 other people who have not been foreclosed yet & as opposed to writing these letters, they are preparing themselves to fight using this defense & any others they have.

I thank you so very much for posting this. I'm grateful to you & grateful to my brother who told me to keep searching for info online. I found this.

We still have no computer & money is still tight due to 2 ill children, but I will log on when I can get access. Don't want to use a friend or family member's computer. Also don't want to leave much of my personal info here, but is it okay to send you a private message?
That's wonderful news Fiasco. Happy someone got something from it. Can't be sure but I am pretty certain it has helped me too. It's admirable that you sought out other people to help. Yes, you can send me messages. What state are you in? You can tell me in a message if you want to keep that info off this forum. All the best to you & your family.
 

PatZZ

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Uncovered something interesting about Pennsylvania. Per PA Section 403-c(b):

(b) (1) - The agency shall prepare a notice which shall
include all the information required by this subsection and by
section 403 of the act of January 30, 1974 (P.L.13, No.6),
referred to as the Loan Interest and Protection Law and referred
to commonly as the Usury Law. This notice shall be in plain
language and specifically state that the recipient of the notice
may qualify for financial assistance under the Homeowner's
Emergency Mortgage Assistance Program. This notice shall contain
the telephone number and the address of a local consumer credit
counseling agency. This notice shall be in lieu of any other
notice required by law. This notice shall also advise the
mortgagor of his delinquency or other default under the
mortgage, including an itemized breakdown of the total amount
past due, and that such mortgagor has thirty (30) days, plus
three (3) days for mailing, to have a face-to-face meeting with
a consumer credit counseling agency to attempt to resolve the
delinquency or default by restructuring the loan payment
schedule or otherwise
.

(5) The notice shall include a statement that the mortgagor
must have a face-to-face meeting with one of the designated
consumer credit counseling agencies within thirty (30) calendar
days plus three (3) additional days for mailing.

Before a mortgagee/lender can accelerate the maturity of a mortgage obligation or commence a foreclosure action on a residential property in Pennsylvania, they are required to give the mortgagor/borrower this Notice. Effective April 30, 2016, the combined Act 6/Act 91 Notice was amended and mortgagees/lenders are informed that strict adherence with the new format and content are required and PHFA will monitor for compliance. The new Notice must be used no later than September 1, 2016, but may be used any time after publication in the Pennsylvania Bulletin (April 30, 2016). Failure of mortgagees/lenders to comply with the Notice may result in a presumption of deficiency under state law and challenges to the validity of the foreclosure action.​

This PA statute can be used to help support the HUD requirement of the face-to-face. Since judges think it is pure stupid to dismiss a foreclosure due to failure to have a meeting, such a meeting requirement in the state right next door goes to show how critical such a meeting could be to help save a home from foreclosure. PA requires that the lender inform the homeowner about the meeting and then the homeowner must have the meeting in order to see if they qualify for assistance. That's a bit different from HUD, but the concept is the same. The key similarity is that the lender must inform the homeowner about the meeting requirement.

Good stuff. Keep it in your arsenal folks to support this defense. We need all the help we can find.
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PatZZ

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THE LATEST NEWS !!! (for all the many (non-attorneys) who are reading this thread but never commenting)

Florida Court Finds HUD Face-to-Face Requirements (ARE)
a Condition Precedent to Foreclosure -
12/6/2016
by Sara Holladay-Tobias,Jodie Lawson,Stephanie Peel,Emily Rottmann | McGuireWoods LLP

Read article: http://www.jdsupra.com/legalnews/florida-court-finds-hud-face-to-face-91325/

Read decision here: http://www.5dca.org/Opinions/Opin2016/112816/5D15-3358.op.pdf (Palma vs JP Morgan Chase)

Though this decision is not binding on any court outside of Florida, it is STRONG "persuasive" authority in other states. The good part is this condition precedent defense is a fairly simple argument. It is nearly impossible for anyone pleading it properly to have a different argument such that the case outcome would be different. All properly pleaded cases are the same. Therefore, the judge's decision should be the same and persuasive authority will lend credibility to your argument, especially in those states where there are no supportive cases at all.

FHA mortgagors should be encouraged to fight back against the complaint with this defense. It's almost guaranteed your servicer NEVER contacted you about a face-to-face meeting. Why? Because you, the homeowner, probably knows nothing about the requirement for a meeting, so they figure no need to waste time and money. But you can bet your servicer lied and told HUD they DID contact you about a meeting.

Don't be surprised when we lose in the trial court because trial judges hate us and want us to lose. The judges are in bed with the banks and will make certain they win - no matter what. Rest assured the trial judge will say some seriously dumb shit and then rule for the bank. So, an appeal will be likely. This Florida decision was obtained on appeal. We also have the Supreme Court decision in Virginia, Mathews vs PHH.

Good luck to all.
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cyadra

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Jun 9, 2014
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I don't know if this thread is dead or not, but it is now officially 5 years since I was served. I have been fighting the foreclosure of my FHA loan using this defense against WF. WF basically did nothing for 4.5 years. The county court stepped in and wanted to know three times from WF what was going on, if they didn't want to prosecute this the court would dismiss. I remained silent. WF lied and sent the court some BS, and begged for another month. I remained silent. Then in October, six years after I took out my FHA loan, WF decided to sell it to another lender. So it looks like WF sucked the insurance money out of the loan, then decided to dump it to someone else.

However, there has been no court filings, the new lender sent me some notices, etc. But I am not sure that they know what is going on either. So now, unless WF kept real good documentation, how is the new lender going to prove that WF followed through with the FHA guidelines? Anyone else go through this?
 

PatZZ

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I don't know if this thread is dead or not, but it is now officially 5 years since I was served. I have been fighting the foreclosure of my FHA loan using this defense against WF. WF basically did nothing for 4.5 years. The county court stepped in and wanted to know three times from WF what was going on, if they didn't want to prosecute this the court would dismiss. I remained silent. WF lied and sent the court some BS, and begged for another month. I remained silent. Then in October, six years after I took out my FHA loan, WF decided to sell it to another lender. So it looks like WF sucked the insurance money out of the loan, then decided to dump it to someone else.

However, there has been no court filings, the new lender sent me some notices, etc. But I am not sure that they know what is going on either. So now, unless WF kept real good documentation, how is the new lender going to prove that WF followed through with the FHA guidelines? Anyone else go through this?
Don't think this thread will go dead for quite some time.

Did you mean to say, "six years after I took out my FHA loan, WF decided to sell it to another lender"? Or did you mean to say "six yrs after WF first foreclosed"? 6 yrs after you took out the loan doesn't mean much. They can sell the loan anytime they want. But if it's been 6 years since the initial foreclosure, then depending upon your state, the lender could run into a SOL problem - IF the initial complaint gets dismissed. As I see it from your facts, they lied to the court with whatever BS they submitted. So, if I were you, I would consider filing my own motion to dismiss since whatever was in their "pack of lies" did not occur. They lied to the court to get time for assignment. I would prefer that the new servicer file a brand new complaint vs replacing counsel and servicer and picking up from where the prior case ended. And that's where you could have a SOL case if it is refiled.

And are you saying HUD paid the claim on the loan? I'm confused there too. If HUD paid a claim, then your loan has been dumped into the DASP program, and that's a whole other story. Did you receive a letter from HUD? We have been discussing DASP on the forum quite a bit.
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cyadra

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Jun 9, 2014
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My mistake. The loan was made in 2009, WF apparently was the servicer since day one. In June of 2011 WF "purchased" the loan, in December of 2011 WF filed for foreclosure. So it has been five years since the foreclosure has been filed. My state, SC, has a 20 year SOL for contracts in regards to real property (a mortgage), and 3 years SOL on a note. Or in other words, once foreclosure has started they have 3 years to try and finish it, however if it is dismissed for SOL, then they can refile up to 20 years. My state also has a quirky thing where before foreclosure can commence, the lender must try and negotiate a modification with the owner. If they can't reach an agreement or the owner fails to pay they certify this to the court and foreclosure can commence.
Well, in the five years of my foreclosure, they asked for paperwork about 5 times and did nothing with it. So they certified an obvious falsehood with the court and they state to the court: that I neglected to hand in documentation, or I was unwilling to hand in an application, when I have proof to otherwise with the foreclosure firm. I filed a motion to decertify their falsehood, attached an affidavit and copies of all the messages between the two of us, including the law firm saying five times that they sent my application to the lender. So basically this was under Dodd-Frank, that has been violated so many times, because I never received an answer as to the status of my application. At one point, it was an entire calendar year between the time they asked for a completed application. All the while, their law firm emailed me and give me reassurances that they handed in the paperwork to their lender. The Executive order also states that when the law firm sends the final paperwork to me (which MUST be by mail) it needs to state in the paperwork that I have 30 days from receiving the paperwork in order to file a motion with the court to disagree with it, you think that is in the paperwork I received? NAHHH
My first hearing regarding this nonsense is tomorrow, so wish me luck. Funny, but I received four emails from the foreclosure firm the day before my hearing saying that they just noticed that WF is no longer the owner of my mortgage and that the new owner is more than willing to work on a modification with me, do I want to cancel the hearing? They sent three emails, including one to the court all asking me the same thing, do I want to cancel the hearing, as Khan in ST II said: Let them eat static. I filed a motion, they received the date, its on the calendar, let them drive 250 miles down to where I live and explain to the judge why they didn't want to follow his executive order for the past five years. I also asked for sanctions as well, which this executive order allows. So wish me luck, I am confident that I can rip through whatever lie their lawyer tries to state with their own evidence.
 

PatZZ

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However, there has been no court filings, the new lender sent me some notices, etc. But I am not sure that they know what is going on either. So now, unless WF kept real good documentation, how is the new lender going to prove that WF followed through with the FHA guidelines? Anyone else go through this?
I think this is a real issue. But the assignee should have the records from the prior lender for proof. If they don't, then they have a problem. Once you deny the meeting, they then must prove they complied. Same as the requirement to prove what you owe. I bet they will have that.

The only case I saved that deals with this is the below Texas case.

https://scholar.google.com/scholar_case?case=16215250138004246857&q=janice johnson v Chase&hl=en&as_sdt=4,110,125,238,239,241,367,368,369,370

The court said:

"Under the terms of the purchase and assumption agreement between JP Morgan and the FDIC, JP Morgan explicitly did not assume liability for any borrower claims arising from WaMu's "lending or loan purchase activities."

"...... the district court correctly determined that § 203.604(b) is inapplicable to JP Morgan because Johnson was already more than three months in default when JP Morgan acquired the loan
."​

These courts are so full of bullshit. The judges will make any kind of jackass ruling. This ruling is ridiculous since the court is sending a clear message to mortgagees in the entire state that a party can avoid its obligations under a contract by just selling the contract, thus making no one liable. The judge knows this stupid decision would not occur in any other court. If I were you, I would look for precedent in your state about a party not being obligated under a contract merely because it was sold/assigned to another. It needn't necessarily be a mortgage case. Prepare for it and be ready on offense.

Not only that. if the new lender was assigned your loan with full knowledge of your delinquency, then it is NOT a holder in due course, and so it is liable for all the obligations of your prior mortgagee.

"As to parties who acquire a mortgage and mortgage note from the original mortgagee, the general rule is that an assignee of a mortgage has all the rights of the original mortgagee/assignor, but stands in the shoes of that party and enjoys no greater rights and benefits."

The court no doubt thinks that to make the new mortgagee liable is not FAIR. All the courts care about is what is FAIR for the crooked servicers. BUT, the new mortgagee had no obligation to buy a delinquent loan. When they opted to buy a loan in default, they assumed all liability under the contract for that loan. There cannot be a "get out of jail free card."

And think about it this way. If the new assignee has no right or obligation to follow through with the contract requirements as applicable to 24 CFR 203.604, then why does the assignee have the right to pursue anything under the contract? The court has no right to parse obligations under the assigned contract.

The purchase and assumption agreement between JP and the FDIC is moot. First of all, I am pretty sure where the doc says
"liability for any borrower claims arising from WaMu's "lending or loan purchase activities," it is NOT referring to the mortgage and note. That reference applies to things like fraud in loan origination, fraud in the selling of loans to Fannie/Freddie, horrible underwriting of the prior lender, selling those pick-a-pay loans, etc. That statement has nothing to do with obligations under the note and mortgage, which wouldn't even make sense. Not only that, parties cannot make a separate contract with a 3rd party to relieve themselves of liability under a totally different contract. Again, if this were the case, people would do this all the time to evade liability and responsibility. It's akin to me transferring my home/note to a buyer and then that buyer would have no obligation to comply with some or all my mortgage provisions.

The problem with judges making stupid rulings is that they fail to analyze what they are saying to see if the decision might have major repercussions down the road.

If you are worried about this happening, just prep and be prepared. This ridiculous offense surely would not hold up on appeal where far more judges have common sense.

As I have mentioned earlier, this defense sounds easy, but it isn't. Quite a few ways the mill will try to defeat it.
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cyadra

LoanSafe Member
Jun 9, 2014
80
8
8
48
I think this is a real issue. But the assignee should have the records from the prior lender for proof. If they don't, then they have a problem. Once you deny the meeting, they then must prove they complied. Same as the requirement to prove what you owe. I bet they will have that.

The only case I saved that deals with this is the below Texas case.

https://scholar.google.com/scholar_case?case=16215250138004246857&q=janice johnson v Chase&hl=en&as_sdt=4,110,125,238,239,241,367,368,369,370

The court said:

"Under the terms of the purchase and assumption agreement between JP Morgan and the FDIC, JP Morgan explicitly did not assume liability for any borrower claims arising from WaMu's "lending or loan purchase activities."

"...... the district court correctly determined that § 203.604(b) is inapplicable to JP Morgan because Johnson was already more than three months in default when JP Morgan acquired the loan
."​

These courts are so full of bullshit. The judges will make any kind of jackass ruling. This ruling is ridiculous since the court is sending a clear message to mortgagees in the entire state that a party can avoid its obligations under a contract by just selling the contract, thus making no one liable. The judge knows this stupid decision would not occur in any other court. If I were you, I would look for precedent in your state about a party not being obligated under a contract merely because it was sold/assigned to another. It needn't necessarily be a mortgage case. Prepare for it and be ready on offense.

Not only that. if the new lender was assigned your loan with full knowledge of your delinquency, then it is NOT a holder in due course, and so it is liable for all the obligations of your prior mortgagee.

"As to parties who acquire a mortgage and mortgage note from the original mortgagee, the general rule is that an assignee of a mortgage has all the rights of the original mortgagee/assignor, but stands in the shoes of that party and enjoys no greater rights and benefits."

The court no doubt thinks that to make the new mortgagee liable is not FAIR. All the courts care about is what is FAIR for the crooked servicers. BUT, the new mortgagee had no obligation to buy a delinquent loan. When they opted to buy a loan in default, they assumed all liability under the contract for that loan. There cannot be a "get out of jail free card."

And think about it this way. If the new assignee has no right or obligation to follow through with the contract requirements as applicable to 24 CFR 203.604, then why does the assignee have the right to pursue anything under the contract? The court has no right to parse obligations under the assigned contract.

The purchase and assumption agreement between JP and the FDIC is moot. First of all, I am pretty sure where the doc says
"liability for any borrower claims arising from WaMu's "lending or loan purchase activities," it is NOT referring to the mortgage and note. That reference applies to things like fraud in loan origination, fraud in the selling of loans to Fannie/Freddie, horrible underwriting of the prior lender, selling those pick-a-pay loans, etc. That statement has nothing to do with obligations under the note and mortgage, which wouldn't even make sense. Not only that, parties cannot make a separate contract with a 3rd party to relieve themselves of liability under a totally different contract. Again, if this were the case, people would do this all the time to evade liability and responsibility. It's akin to me transferring my home/note to a buyer and then that buyer would have no obligation to comply with some or all my mortgage provisions.

The problem with judges making stupid rulings is that they fail to analyze what they are saying to see if the decision might have major repercussions down the road.

If you are worried about this happening, just prep and be prepared. This ridiculous offense surely would not hold up on appeal where far more judges have common sense.

As I have mentioned earlier, this defense sounds easy, but it isn't. Quite a few ways the mill will try to defeat it.
.
.
You make good points that have to be raised. I do know, that now I have to amend my answer since there is a "new" party. The other issue to bring up is that it is STILL an FHA loan, it has an FHA number assigned to it, and no matter who takes over the loan, it doesn't not change on its face that it is a FHA loan that must meet FHA guidelines. I am prepared to fully lose this case at trial and immediately ask for a TRO for the sale and appeal it to the state level if I need to, at least it seems, in most states the appeals process works.
 

PatZZ

LoanSafe Member
Jan 30, 2011
2,026
157
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Nearby
This is one of the few times I agree with the court:

Illinois App. Court (2nd Dist) Holds FHA’s ‘Face to Face’ Meeting Not Required When Loan Discharged in Bankruptcy

If a borrower does not reaffirm the mortgage in BK, then it makes sense that the borrower will have few defenses, if any. I read a case where the court killed the "who owns the note" defense because the borrower never made this argument in the BK proceedings. I suppose if additional assignments came after the BK, that might be different. Read another case where the court said the borrower should have brought up the face-to-face defense in a BK adversary proceeding since the borrower was 6 months delinquent when the BK was filed.


Judges have gotten tough on foreclosure defense after non-affirmation in BK. A BK can surely complicate matters.

http://www.lexology.com/library/detail.aspx?g=6159f20a-8435-4ac9-ba09-0e8bb231055d
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PatZZ

LoanSafe Member
Jan 30, 2011
2,026
157
63
Nearby
You make good points that have to be raised. I do know, that now I have to amend my answer since there is a "new" party. The other issue to bring up is that it is STILL an FHA loan, it has an FHA number assigned to it, and no matter who takes over the loan, it doesn't not change on its face that it is a FHA loan that must meet FHA guidelines. I am prepared to fully lose this case at trial and immediately ask for a TRO for the sale and appeal it to the state level if I need to, at least it seems, in most states the appeals process works.
Yes, and I neglected to add. Make sure to include the prior mortgagee as a 3rd party also.
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