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Borrowers Increasingly Defend Foreclosures by Asking Lenders to Prove Ownership

June 8, 2011

Our Rancho Cucamonga foreclosure defense lawyers frequently work with clients whose loans have been thrown into confusion by robo-signing, securitizations and other financial slicing and dicing they couldn't control. This has led to confusion in many courts, especially after the robo-signing scandal led courts to start scrutinizing foreclosure paperwork more closely. So we were very interested to see a June 1 article from the Wall Street Journal suggesting that homeowners are increasingly demanding in court that lenders prove their ownership before a foreclosure can go through. The cases, which are in multiple states across the country, include cases where mortgages were not properly assigned as well as cases of documentation that turns out to be false.

The Journal noted that borrowers have been making these kinds of arguments throughout the foreclosure crisis. But according to the article, judges have recently started responding favorably to those arguments more often. In the wake of robo-signing, the article said, borrowers have uncovered problems that go beyond the "clerical errors" that lenders claimed robo-signing was. One problem is incomplete mortgage assignments, when ownership of the loan was never properly transferred. Some of the companies involved have gone out of business, which means the paperwork can't be completed now. Courts have rejected attempts to fix this problem with backdated documents, especially if the documents are dated after the foreclosure attempt or after one involved company has gone out of business.

As Whittier foreclosure defense attorneys, we're pleased that courts are taking these issues more seriously, if this article is right. Paperwork problems don't necessarily mean a home will be saved, if the borrower is genuinely unable to keep paying. However, some of these paperwork problems amount to attempts to lie to the court, and judges rightly dislike and punish perjury. It's also worth noting that the paperwork involved here is not trivial -- it's required to prove that the lender owns the loan and is eligible to foreclose. Asking lenders to prove this is not only reasonable but an important part of protecting borrowers from banks' mistakes and overreaching. And borrowers who have struggled with lenders' bureaucracy for many months might wonder whether the lenders or courts would show them any mercy over technical problems.

If you're scheduled for a foreclosure sale and you haven't been able to get much help from your lender, you should call Howard Law PC right away. From main offices in Anaheim, we represent clients across California who are suing to stop unfair, avoidable foreclosures and get fair consideration for their applications for loan modifications. As this article suggests, lenders are less than attentive to detail in foreclosures, sometimes rushing them through without proving ownership, while loan modifications are being considered or even foreclosing incorrectly. Our Mission Viejo foreclosure defense lawyers help borrowers fight these and other unfair behaviors by bringing lawsuits to stop foreclosures and get independent scrutiny of the loan modification decisions in court.

Howard Law offers free, confidential case evaluations, so you can speak to us about your options at no further cost or obligation. To set up a meeting, send us an email or call toll-free at 1-800-872-5925 today.