White Plains Foreclosure Case Ruling is Sending out Stern Warnings to Lenders
November 6th, 2009
The White Plains foreclosure case ruling has sent out stern warnings to lenders. The USA Trustees of the Justice Department has taken great interest in the case. It has registered itself as an interested party.
A borrower living in her home had purchased the house in 2001 after contracting a mortgage with Wells Fargo. After four and a half years she refinanced it with Mortgage World Bankers INC.
David B. Shaev a lawyer dealing with consumer bankruptcy filed Chapter 13 bankruptcy on her behalf in February 2009 when she fell behind her dues. In March PHH a firm of Laurel New Jersey claimed the debt amounting to $461,263 inclusive of arrears of $33,545. Shaev said that at the time of filing he had only hoped for modification of the loan.
Months passed and PHH obviously began to drag its feet about the modification. At this point Shaev wanted proof of the standing of PHH in the case. PHH replied that it was the servicer and that note holder was U.S. Bank – the trustee of a securitization packet of mortgages. But U.S. Bank claimed it was not a party to the suit. Shaev now wanted proof that U.S. Bank held the note. The bank produced an affidavit from the vice president of PHH, Tracy Johnson, repeating what had been stated earlier – PHH was the servicer and U.S. Bank the holder of the note. Supporting this was submitted a copy of the assignment of the mortgage but that was signed by Johnson in the capacity of being vice president of MERS. This device had done away with the requirement of recording changes of ownership of property in the county land records office.
Another startling point was that as per the document the note was assigned on 26th March 2009 – much later after the filing of the bankruptcy.
Being questioned about ownership PHH admitted that it had charged a foreclosure fee of $450 that was not proper. Interest had also been overcharged.
The attorney representing PHH had the uncomfortable task of explaining these anomalies. Attempting to justify the actions he said, “In the secondary market, there are many cases where assignment of mortgages, assignment of notes, don’t happen at the time they should. It was standard operating procedure for many years.”
It was a welcome surprise to the defendants when the judge ruled, “Right now I am in bankruptcy court with a house that has no discernible debt on it, yet I have a client with a signed mortgage. We cannot in theory just go out and sell this house because the title company won’t give a clear title on it.”
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January 21st, 2010 at 11:15 am
[...] on their homes than they are worth. In these regions, people cannot undertake refinancing because lenders need homes to have at least 20 per cent equity for refinancing. They cannot do anything if homes [...]