How to live in a house and not pay mortgage?

Heard about that. I guess Florida is disposing of its foreclosures rather efficiently after a slow start.

This is what must happen. There must be a penalty for not paying, they need to toss the bums out ASAP. Banks must be allowed to fail. Stupid insurance companies that wrote business insurance on the bad banks must be allowed to fail. If you take away the pain, the Darwinian aspect of capitalism then it becomes socialism rapidly. At this point I don't care if a depression results. Bad business decisions must have a natural outcome or the system doesn't work.

 

the home would be located in a high density area where there is a high number of homes for sale where the homes are mid priced.

Banks in many cases have worked out an arrangement where by the existing home owner keeps the home clean and presentable and pays the Utilities as it is cheaper than having it vacant and monitored by an independant firm. The home owner has the right to bring the home into good standing up to the sale and closing of a new owner.

So if the Bank sells it too cheap as they have to obtain several appraisals to accept a new lower offer most Courts will still favor the home owner especially if the new home price would be affordable to the existing home owner.
Catch 22

 

I agree completely.

 

I moved into my current townhome in October 2007 after signing a 2 year agreement with my landlord, who stopped paying their mortgage soon after my family moved in. Of course, my landlord kept this to himself, and my family had no idea. In January 2009, we got a foreclosure notice, and stopped paying rent since then. meanwhile, a realtor dropped by 2 weeks ago, and she told me that my landlord stopped paying mortgage more than a year ago. bottomline.....

sure you can live more than a year after stop paying a mortgage. Nowdays, it could take as long as 1 year from defaulting on mortgage payment to actually getting foreclosed. of course this is case by case. and then it another few months to kick out the tenants. Any kids or pregnant woman will delay the process significantly. I'm hoping to move out by early summer(my wife is due april/may, so can't really make a move soon), but I certainly don't enjoy being on thin ice here with a pregnant wife and 2 kids. I have friends realtor friends telling me that, given my situation, I can probably live rent-free until October...........of course, the lender's realtor is threatening to change door locks if we don't move out by end of March. My wife went hysterical for few days, before I finally convinced her that no one can change the lock without a court order.(I had to make phone calls to county office on a speaker phone, print out documents to prove my words, and finally call the realtor who threated us to move out. It wasn't until that realtor finally backed off my wife began to breathe normal again).

 

I'm definitely not a bum. Many tenants are victims here. I'd pay rent if the new lender is willing to negotiate. The new 'month-to-month' rent policy FNM/FRE is working on is in beginning stages and they're not even offering to all victim tenants yet. Realtors are telling me it's a rigorous process it itself, and rent isn't cheap at all. One fact I know, is that I wasn't offered any deals. Besides, I woudn't enjoy living on 'month-to-month' basis with 3 kids.

 

Foreclosure has to do with state law, so it differs from state to state. But regardless of where it is, it's a function of what the statutory process is. It's just a matter of time.

Take California for instance. The borrower misses his first payment. The bank sends a notice, and lets some time go by. They probably don't begin the foreclosure process until at least 60 days have gone by. If it was a VA loan, or a FHA loan, it might be much longer.

Once enough time has gone by, the Trustee is notified, who files a notice of default. In California 90 days must go by after the Notice of Default is filed. OK, so now we're at a minimum of 5 months.

Let's say at this point that the borrower files bankruptcy. This bogs the whole procedure down. Now we have to wait for a court date for the bankruptcy. The court is going to need to hear testimony in order to determine how much equty exists. There goes another couple of months.

Once they get it out of bankruptcy, and assuming that the borrower doesn't file a different type of bankruptcy, now the trustee has to file a Notice of Sale. That's another 30 days.

Now the lender has the property. But the borrower is still in the property. So now he must evict. In my area that could take another3-4 months depending on whether we gotta get the sheriff out there to remove the guy and his possessions.

Now that's about 1 year. And that assumes the lender filed after 60 days. I've seen lenders wait 10 months.

5 years is hard to believe though.

One thing for sure. These deadbeats have alot of tricks up their sleeves. In fact, there's an industry out there that helps them string a foreclosure/eviction out. I don't buy the victim theory.

OldTrader

 

April Charney, an attorney with Jacksonville Area Legal Aid, and other lawyers are fighting home fore_closures on the grounds that it can be impossible to tell who has the right to foreclose and collect the debt on loans that have been sold, bundled into securities and sold to investors. Many loans have changed hands so often that struggling homeowners like Ed Taylor, a retired Hillsborough County insurance adjuster, are unable to find anyone to deal with as they try to renegotiate their mortgages. But the confusion also means that Taylor and others are able to stay in their homes for months or even years without making a payment. Susan Taylor Martin, Times Senior Correspondent

Oct. 4, 2005: Taylor gets a $116,000 loan from Argent Mortgage, a subprime lender based in California.

2005 or 2006: Taylor's loan is bundled with hundreds of other subprime loans into an "Argent Securities Asset-Backed Pass-Through Certificate,'' which is sold to investors. Taylor continues to make his $880 monthly payments to Argent.

Aug. 31, 2007: Citigroup buys Argent and the right to collect on $45 billion in Argent home loans, including Taylor's. He starts making payments to a Citigroup subsidiary, Citi Residential Lending.

Fall 2007: When Taylor misses a payment because of a serious illness, he contacts Citi to make the first of several attempts to modify his mortgage. He says he repeatedly writes to Citi and offers to pay what he can on his loan, but never hears anything back.

April 3, 2008: Deutsche Bank, as trustee for Pass-Through Certificate Series 2006-W25, files a notice of lis pendens — the first step in foreclosure — against Taylor in Hillsborough Circuit Court. However, there is nothing in the county's official records to show that Argent or Citi Residential ever assigned Taylor's note to Deutsche Bank, which would give Deutsche the legal right to foreclose and collect the debt.

April 16, 2008: Nearly two weeks after Deutsche Bank starts foreclosing, Citi Residential assigns the mortgage and note to Deutsche. But the document filed by Citi shows Taylor's loan as part of Pass-Through Certificates, Series 2005-W5, not 2006-W25. (A letter Taylor got from Deutsche's law firm has yet a third serial number. "There are a lot of mistakes,'' a Deutsche attorney told the St. Petersburg Times.)

July 29, 2008: Deutsche Bank files a motion for final judgment of foreclosure.

February, 2009: American Home Mortgage Servicing, a Texas company, buys the rights from Citi Residential to collect payments on 185,000 loans, including Taylor's.

March 10, 2009: Deutsche Bank cancels a hearing on its motion for final judgment of foreclosure, but gives no reason. The case remains open.

Taylor has now remained in the house for almost two years without making a payment.

http://www.tampabay.com/news/business/realestate/article989465.ece

 

TAMPA — At the start of class, April Charney makes one thing clear.

"This is very dense, complicated work,'' she warns. "If you don't get it, raise your hand and ask questions because the chances are others don't get it either.''

Charney pauses for emphasis. Casually dressed, dark hair streaming down her back, she could be a high school teacher introducing a bunch of kids to physics and calculus.

But these are lawyers and judges from all over Florida. And they've come to this seminar in Tampa to learn from the woman many consider the nation's foremost expert on fighting fore_closure.

An attorney with Jacksonville Area Legal Aid, the 51-year-old Charney has parlayed her own experience helping clients save their homes into a veritable crusade to protect millions of Americans from what she says are illegal fore_closures. Over the next eight hours, she will cite example on example of the sloppiness, deception and outright fraud — including forged signatures — in some of the 275,000 foreclosure suits filed nationally each month.

At the root of the problem are what Charney calls "feral loans'' — home loans that were sold, bundled into securities and sold to investors. They are skulking across the financial landscape like wild things whose true owners can be impossible to determine.

The companies filing fore_closure "don't own these loans and don't have any legal right to collect the debt,'' she tells the class. "If you're going to be able to stop foreclosures in your community, you need to know about these systemic failures.''

Since 2007, Charney has conducted 17 seminars from California to South Carolina, and trained more than 2,000 lawyers. Paid under $90,000 a year in her legal aid job, she receives no money for the class and insists that all participants donate 20 hours of pro bono legal work.

Charney's approach rankles foreclosure plaintiffs and even some judges, who say the challenges filed by her and her growing band of disciples simply delay the inevitable for homeowners months behind in their payments. But at a time when many attorneys are also feeling the pinch, this crowd of 180 shows that foreclosure defense is becoming one of the hottest areas of the law.

"I've never done foreclosures, but we all have to eat,'' says Raquel James, a corporate lawyer who has driven from Miami to hear Charney. "A lot of lawyers come across as cocky, but she's very humble. You can tell she cares about her clients.''

A mysterious name

A New Jersey native, Charney grew up in Miami, where her father worked for Eastern Airlines and her mother taught English. While in college, she served as a congressional intern but decided against politics because "I didn't like the sausage-making process.''

Instead, she went to law school and started a career that has taken her to Orlando, Arkansas and Sarasota, where she first taught other attorneys to fight foreclosures. But only after arriving at Jacksonville Area Legal Aid in 2004 did she notice a curious pattern.

"Every day there was a fresh batch of foreclosures,'' she recalls, "and every one was filed by MERS.''

Short for Mortgage Electronic Registration Systems, MERS was created in 1993 by the lending industry to track home loans, including those that had been repackaged as interest-bearing securities and sold to investors. If a securitized loan went into default, the company could foreclose on behalf of all investors, eliminating the need for hundreds of individuals to troop into court.

But Charney discovered that MERS didn't own the loan "notes'' — the borrower's obligation to repay — because they were still in the hands of the original lenders. So she began filing motions to dismiss all of the company's foreclosure suits, contending it had no right to collect the debt.

In 2005, Charney's cause got a major boost when she and other defense lawyers helped persuade Pinellas Circuit Judge Walt Logan that MERS lacked legal standing to sue and offered no recourse for homeowners struggling with their payments.

"Who is MERS?'' Logan wondered aloud. "These people are calling my office out of frustration and they want to deal, they want to refinance, they want to save their property, and there's no person (to talk to.)''

Ruling that the company was not the proper party to foreclose, Logan threw out nearly two dozen cases. Among them was that of Jose Montalvo, a disabled Coast Guard veteran who fell behind in payments on his St. Petersburg home when his wife, a hairdresser, hurt her shoulder and couldn't work.

"She's a firecracker,'' Montalvo says of Charney. "MERS sent like five or six attorneys from Miami and she got right in their faces.''

But the foreclosure was re-filed in 2006 — this time under the name of the original lender, Washington Mutual — and the case is still dragging on, leaving the Montalvos in limbo. They have not made a payment in years and they are reluctant to spend money on the house.

"We don't know if they're going to take it away the next day,'' he says. "It's very stressful.''

Wasted energy?

An appeals court reversed Logan's ruling in 2007. Though the reversal had no effect on the Montalvos, it did allow MERS to resume filing thousands of foreclosure suits under its own name.

Logan has since moved to family court, but a colleague still handling foreclosures, Thomas McGrady, says he too demands proof that MERS or any other plaintiff has the legal authority to collect the debt.

"It's very important that the right person bring the action, no doubt about that,'' says McGrady, one of eight Pinellas judges who heard a record 13,522 foreclosure cases last year, three times as many as in 2006.

Before signing a final judgment, McGrady asks for the name and phone number of someone the homeowner can contact to try to work out a settle_ment. He can also order both parties to mediation.

Some owners hire attorneys to challenge foreclosures, but "the success rate has not been good,'' McGrady says.

"I'm concerned that a lot of people will spend a lot of money for lawyers that might be better spent trying to save their homes. I'm not saying she (Charney) is wrong or that people are wrong to go to a lawyer, but the bottom line is that they got money they didn't pay back.''

'Ground is shifting'

Charney, who handles dozens of foreclosure cases herself, acknowledges that her own track record is mixed. She has saved homes when the original lender still held the note but has had zero success with securitized loans because it is so hard to find anyone to deal with.

"You have to do local servicing on residential mortgages,'' says Charney, who borrowed from a credit union to make sure that the loan for her Jacksonville house would not be sold. "We have to have flexibility in servicing and securitization does not allow that.''

At the seminar, Charney stresses that the "ground is shifting every day'' on foreclosure case law as new rulings come out. She is frustrated by judges who let plaintiffs foreclose even if they fail to follow correct procedures, like showing that loans have been legally assigned from one party to another.

"When clients in criminal cases are not read their rights, you're not going to convict them,'' she says. "Why are we so unable to make that leap to the civil context?''

After eight hours — most of it on her feet — Charney announces that class is over and "I'm pretty burnt out.'' But she patiently answers questions as lawyers crowd around her. "You were brilliant,'' some comment.

Charney shrugs off the praise. Separated from her husband, she says her great pride in life are her kids, Morgan, 23, an aspiring forensic anthropologist, and Katherine, 25, who's specializing in environmental law. The three are "joined at the hip,'' as Charney puts it, and camp and kayak together as she wrings time from a schedule that has her battling the nation's foreclosure wave many of her waking hours.

"I'm working way too much,'' she says after the seminar, sagging into a sofa at her Tampa hotel. "I feel like I've been drafted into an army.''

http://www.tampabay.com/news/business/realestate/article989450.ece

 

This subject is a lot more complicated than any of the post here reflect.

Here are just some of the issue's:

What state do you live in?
In Cali forclosure is an administrative process, in other states it's a judicial process.

Also, is the state recourse or non recourse?

Is there a 2nd mortgage?
The trend right now is for the holder of the 2nd to foreclose ahead of the 1st.

It seem s a lot of you think these people are getting off scott free. Thats not true in most states.

Here's why:
In most states a 1st mortgage is recourse. In all states a 2nd mortgage is recourse.

On 1st's as part of the foreclosure process the bank request a deficientcy judgement against the borrower and it's almost always granted. The bank the turns around and writes off the loss and issue's a 1099 to the borrower. Then the bank sells the bad debt to a collectgion agency.

Same thing happens with the second except now holder's of the second are suing on consumer debt laws rather than typical mortgage foreclosure statues. That means even after 5 years of chapter 13 the remaining debt is still owed.

To collect these judgements, they may garnish wages, sieze accounts, real estate, personal property, etc.

This will be a huge business in the future and somewhere down the road you'll be hearing the horror stories of those who lost their house for whatever reason being wiped out again.

It's a pretty sad situation.

 

That mess wherein the borrower can't even find somebody to deal with is bad, very bad. Punching these lenders in the face via the courts is the only answer, it's not like Congress is going to fix anything. Congress has never fixed the identity theft problem even, and they have had the means for decades.

That was new info for me that the second mortgage is consumer debt. I have one on a rental and always thought that they could only collect whatever the first mortgager did not get...

The property is in both my and my wife's name but the second was taken out only on my name. If I had to abandon ownership of the property I wonder if they could sieze my wife's property... only her name is on the propery we live in, and it's held in a trust...