Miami Homeowner Not So Secret Weapon to fight Foreclosure – The lost note defense!

Miami and South Florida homeowners fighting foreclosure or upside down on their mortgage may have a way out. Judges around the Country are holding banks trying to foreclose to their burden. TILA, HOEPA, RESPA are words Banks don’t want to hear. Many judges have lost patience with lenders. The days of a quick foreclosure sale and whopping deficiency judgment have changed some. A strong defense to foreclosure can make the difference in avoiding financial ruin. You need qualified counsel with prior bank experience to fight for you. Jacobs Keeley are trial lawyers who negotiate from strength.

The law in Miami, Coral Gables, Kendall and Pinecrest is the same throughout South Florida and NY – The bank has to prove they own the note to foreclose. In October of 2009, New York Bankruptcy Judge Robert D. Drain held PHH Mortgage failed to meet its burden to foreclose on a home in White Plains, and wiped out the $461,263 mortgage debt on the property. The pen is mightier than the mortgage, especially when applied to a court order. The reason for the result: if the lender can’t prove ownership of the promissory note, borrowers have leverage, and “may even be able to stay in their homes mortgage-free.”

Securitization is the reason notes have gone missing since the housing boom. Large pools of bank loans were bundled and sold to scores of investors. However, no one was watching the henhouse and the notes, were never adequately tracked or recorded. In some cases, that means nobody truly knows who owns what.

According to a transcript of the Sept. 29 hearing in the White Plains case, The Bank’s counsel said: “In the secondary market, there are many cases where assignment of mortgages, assignment of notes, don’t happen at the time they should. It was standard operating procedure for many years.” Judge Drain rejected that argument, and ruled he had “more than 50 percent doubt that if the debtor paid this claim, it would be paying the wrong person.”
Fair Game – If the Lender Can’t Find the Mortgage – NYTimes.com.pdf