Banks and their agents routinely break into homes in which they have no legal interest.

It should come as no surprise that the banks that were incompetent and sloppy in their handling of issuing loans and then foreclosing on them would also be incompetent and sloppy in their retaking possession of the homes they (may) have foreclosed upon.  It is not uncommon for banks or their agents to drill the locks, re-key the doors, damage the property and steal from the home under color of authority from a foreclosure sale.  Oftentimes the banks have no idea what Michigan law requires before they can retake possession of a property and assume that there is no redemption period.  The problem is compounded by police departments that are similarly ignorant and unwilling to take a report to document the problem.  Civil litigation may be the only recourse for a homeowner so violated.  The Michigan Consumer Protection Act may provide some assistance for homeowners, but the Michigan Supreme Court has dramatically reduced the scope of the Act making outcomes uncertain.  Still, it is my opinion that breaking into houses illegally before the end of the redemption period may, with the right fact pattern, be the basis for a MCPA lawsuit.

Who's who in the mortgage foreclosure mess

As detailed in earlier posts much of the current scandal does not directly impact Michigan homeowners due to the fact that most foreclosures in this state proceed by advertisement rather than judicial action.  Many mortgagors, however, have questions about what the problem is in other states and why banks have place a temporary halt to foreclosure actions.  The attached article summarizes the situation nicely and explains the role played by various entities in the foreclosure fraud.

Bank of America loses $9,000,000,000 in Michigan deposits.

BoA claims these dramatic loses have to do with the reclassification of deposits, but I can't help but wonder if it has something to do with the way they treat their mortgage customers.  As an ominous sign to any mortgagor heading to Trott and Trott's offices trying to save their property from foreclosure, Bank of America ATMs are placed prominently in the law firm's lobby.

Vacant land has little value in Metro Detroit

With lending for construction almost non-existent greenfields that can be developed for single family residential have become virtually worthless.   The only reasonable approach would be to hold the land until lending practices ease or values increase dramatically.  That may be a possibility if you hold a single lot with a modest mortgage, but is challenging or impossible when you own hundreds of lots.  In those instances where you can't hold the property and service the loan, perhaps a loan modification is your best bet even if it is just to extend the term of the original loan - "pretend and extend" is not an uncommon practice for lenders - pretend the value is there and extend the term for repayment.  Although the loan may be inadequately secured, as long as the mortgagor continues to make payment, both parties have avoided having a loan slip into default.

Wayne County Family Law Bar Association

This afternoon I will be speaking to a group of a couple hundred family law attorneys at the Coleman A. Young Municipal Center in Detroit.  We will touch on short sales in the context of divorce.  This upside down housing market touches on many practice areas, but none more so than divorce law and the resulting property settlement.  In many instances former spouses end up living in the former marital residence after their divorce becomes final because they can't sell their house. 

Banks were quick to write and foreclose mortgages but slow to modify them.

All the usual players - Bank of America, Wells Fargo, GMAC and Litton Loan Servicing are implicated in this article which describes poorly trained and overwhelmed staff on both sides of the mortgage transaction resulting in bureaucracies that sloppily document a loan application and are challenging to work with for a loan modification.  I have been working with bank loss mitigation departments for 15 years and this has always been a problem, the only thing that has changed is the number of people experiencing the lack of concern and incompetence of these large companies. 

Loan servicing does not make any money for the banks and accordingly they do not devote sufficient resources to the needs of their customers.  Typical scenarios include overseas call centers with customer service representatives that can only read from a script to poor notes in a file to documents that are lost and files closed prematurely.  The result is a system that works slowly and poorly at a time when homeowners need it to work quickly and efficiently to keep their property out of foreclosure.  An attorney experienced in working with mortgage lenders may be able to help you obtain a loan modification that keeps you in your home.

The Federal Home Affordable program has options for borrowers who are current and in default of their mortgage loans.  It makes sense, however, to discuss the different options available so you can understand whether loan modification is either likely or, if obtained, will address your financial concerns. A loan modification my be a long or a short term solution to your situation, but is often is not the only approach for a stretched homeowner. 

Loan modification, in the long term, often provides only incremental or marginal relief for a homeowner.  If, because of a loss of income or new expenses your house is no longer affordable without significant payment reduction, it may be time to consider a short sale or other option before foreclosure is imminent. 

For my entire legal career I have counseled clients in danger of losing their homes and helped them identify pre- and post-foreclosure options that help them reach their goals.

Michigan non-foreclosure real property sales are on the rise

I'm not an appraiser, but information like this can only be good for the market.  Once people can actually start to sell their homes when they have to move, we'll be taking the very first small steps toward returning to something approaching stability in the market.  Even though these numbers show improvement, for most people who financed or refinanced their property in the 21st century, moving is going to require a short sale.