Bankruptcy

What the Foreclosure Fiasco Means for People in Foreclosure

By Nathalie Martin

It?s hard to keep up with all the foreclosure news or to make heads or tails of it, but two articles strike me as critical reading for foreclosure defense attorneys and people in foreclosure, the first quoting our own Adam Levitan, as well as one on the MERS debacle quoting both Adam and Professor Chris Petersen of the University of Utah. Both explain why robo-signing is not about formalities but real, substantive defenses to foreclosure. The latter article also explains why questions about MERS? standing are not frivolous. There also is a fabulous series of PBS videos those in foreclosure might want to watch. 

So what should a lawyer do in defending a foreclosure now that we know what we know? Do some basic chain-of-title interrogatories and other discovery, to start. Today I was chatting with my colleague Professor Jim Butler, who is supervising the UNM Business and Tax Clinic this semester.  Jim warns us to make our discovery requests narrow and to the point, so as not to run up lender attorney fees that borrowers could end up liable for.  He also mentioned a couple of baseline discovery requests that might help consumers. 

First, find out if the lender has a right to sue. Does it own this loan? Start by asking for copies of all assignments of the note and mortgage from the loan origination to today. Check out the whole chain. Consider asking for production of the original note and mortgage for inspection (but balance the potential benefit of finding out that the bank does not have them, with the detriment of alerting the bank to the missing originals months before trial). 

Then ask for a copy of any pooling or servicing agreement or trust agreement (if not available directly on the SEC Edgar site) to see what the servicer?s obligations are and whether they were fulfilled.  If not, then that defense can also be raised. Other tips anyone? 

Full post as published by Credit Slips on October 22, 2010 (boomark / email).