It used to be when a homeowner fell into default, the bank could feel pretty secure that foreclosure proceedings would eventually lead to forfeiture of the property in question. Back then, a competent attorney could possibly forestall forfeiture of the home for a period of time before foreclosure proceedings usually ended in a judgment for the Bank. That meant the home would be placed on the auction block for sale at a foreclosure auction. Recently though, foreclosure proceedings have been less friendly to lenders.
An article in the Daily Business Review, entitled “Distressed Homeowners Take on Lenders in Court” (published April 9, 2010), points out that foreclosure cases which might have been resolved through summary judgment in favor of the bank a few years ago are now reaching trial. This is significant because a trial affords the homeowner the possibly of having their mortgage completely extinguished, leaving the homeowner in possession of the property free and clear of any mortgage.
At trial, a competent foreclosure defense attorney can raise defenses including the plaintiff’s lack of standing. Attorneys are forcing banks to prove they own the loan in question by requiring them to produce the original documents, including the Note. Obtaining that original paperwork is often problematic for lenders, mostly due to internal sloppiness on behalf of the lenders.
Without the original loan documents, the lender cannot prove that he is the proper plaintiff to even bring the homeowner into court. Based on that fact alone, it is completely within the Judge’s power to render a judgment for the homeowner. This is why lenders should be concerned about the cases going to trial.
If you are interested in learning more about this topic, you can either post a comment to this blog, contact me, Larry Tolchinsky, a Florida foreclosure attorney, by email, or call me at (954) 458-8655 and I will be happy to answer your questions. I offer a free initial consultation.