Mortgage Foreclosure Fraud

The news is filled with large banks acknowledging that they have or may have fraudulently foreclosed on properties throughout the United States in jurisdictions that require foreclosure by judicial action (i.e. lawsuit) Michigan allows foreclosure by judicial action, but the vast majority of residential mortgages are foreclosed by advertisement. Michigan foreclosure law was, however, recently changed to encourage and facilitate banks modification of mortgage loans. If a borrower timely invokes their rights to a mediation hearing and demonstrates that they are eligible for a loan modification and the bank denies the loan modification, then the borrower can force the bank to foreclose by judicial action which may cause problems for the bank.

The problem arises from the way that banks became the owners of the loans they now seek to foreclose upon. If the paperwork wasn't put in order when the account/contract was securitized and sold, then perhaps the homeowner has a defense to the foreclosure. Ultimately if the money was borrowed for the purchase of a property and not repaid the homeowner is likely to be required to pay or move, but what is important here is for the borrower to create some leverage in their negotiations with the bank be that for a loan modification, a deed in lieu of foreclosure, treatment of the deficiency or simply more time to move.

Consulting with an attorney can provide you with direction on how to use this situation to your advantage.