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1/7/2011

Banks lose key foreclosure ruling in top Massachusetts court

By Jonathan Stempel and Dena Aubin Jonathan Stempel And Dena Aubin Fri Jan 7, 4:58 pm ET

NEW YORK (Reuters) – In a decision that may slow foreclosures nationwide, Massachusetts’ highest court voided the seizure of two homes by Wells Fargo & Co and US Bancorp after the banks failed to show they held the mortgages at the time they foreclosed.

Bank shares fell, weighing on broader stock indexes, on fears the decision could threaten lenders’ ability to work through hundreds of thousands of pending foreclosures.

The Supreme Judicial Court of Massachusetts’ unanimous decision on Friday upheld a lower court ruling. It is among the earliest cases to address the validity of foreclosures done without proper documentation.

That issue, including the use of “robo-signers” who approved foreclosure documents without reviewing them, last year prompted an uproar that led lenders such as Bank of America Corp, JPMorgan Chase & Co and Ally Financial Inc to temporarily stop seizing homes.

“A ruling like this will slow down the foreclosure process” for lenders, said Marty Mosby, an analyst at Guggenheim Securities in Memphis, Tennessee. “They’re going to have to be really precise and get everything in order. It doesn’t leave a lot of wiggle room.”

Wells Fargo and U.S. Bancorp lacked authority to foreclose after having “failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph Gants wrote for the Massachusetts court.

In a concurring opinion, Justice Robert Cordy lambasted “the utter carelessness” that the banks demonstrated in documenting their right to own the properties.

Courts in other U.S. states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly.

Friday’s decision applies in Massachusetts, and need not be followed by federal judges or by courts in other states.

Nonetheless, “it will be certainly cited as persuasive authority by anybody in a similar scenario who’s trying to hold onto his home,” said Robert Nislick, a real estate lawyer at Marcus, Errico, Emmer & Brooks PC in Braintree, Massachusetts.

LEAVING PAPERWORK BEHIND

Analysts said the decision may also raise the specter that loans transferred improperly will need to be bought back.

“What they were doing was peddling these mortgages and leaving the paperwork behind,” said Michael Pill, a real estate partner at Green, Miles, Lipton & Fitz-Gibbon LLP in Northampton, Massachusetts who is not involved in the case.

The Massachusetts court rejected a request by the banks to apply the decision only in future cases, leaving homeowners already foreclosed upon without a remedy. Gants chided the banks for ignoring settled rules in their “rush” to sell mortgage-backed securities.

A spokeswoman for San Francisco-based Wells Fargo, Teri Schrettenbrunner, had no immediate comment on the decision.

U.S. Bancorp spokesman Steve Dale said the decision has no financial impact on the Minneapolis-based bank, which has “no responsibility” for the terms or means of transfer of mortgages used in the securitization trusts it oversees as trustee.

Martha Coakley, Massachusetts’ attorney general, praised Friday’s decision. “In their careless and hasty stampede to securitize loans, the banks moved at their own peril,” she said. “They should bear the brunt and the cost of the remedy.”

In Friday trading, Wells Fargo shares closed down 65 cents, or 2 percent lower, at $31.50, while U.S. Bancorp shares fell 20 cents, or 0.8 percent, at $26.09.

Bank of America stock fell 1.3 percent and JPMorgan fell 1.9 percent, and the KBW Bank Index fell 0.9 percent. Broader share indexes declined about 0.2 percent.

Bank shares recovered some losses after it was revealed that Maine’s highest court on Thursday allowed JPMorgan to conduct a foreclosure proceeding despite not having possessed the underlying mortgage until after that process began.

NOT IMMUNE

In the Massachusetts case, U.S. Bancorp and Wells Fargo had said they controlled through different trusts the respective mortgages of Antonio Ibanez and the married couple Mark and Tammy LaRace, who lost their homes to foreclosure in 2007.

The banks bought the Springfield, Massachusetts, homes in foreclosure, and sought court orders confirming they had title. A lower court judge ruled against them in March 2009.

“It is the first time the supreme court of a state has looked straight at securitization practices and told the industry, you are not immune from state statutes and homeowner protections,” Paul Collier, a lawyer for Ibanez, said in an interview.

Massachusetts is one of 27 U.S. states that do not require court approval to foreclose.

“I’m ecstatic,” Glenn Russell, a lawyer for the LaRaces, said in an interview. “The fact the decision applies retroactively could mean thousands of homeowners can seek recovery for homes wrongfully foreclosed upon.”

Russell said the LaRaces moved back to their home after the 2009 ruling, while Collier said Ibanez has not. “U.S. Bancorp will have to compensate him in exchange for the deed, or will have to walk away,” Collier said.

Analysts said the decision could make it harder to sell homes, and perhaps weigh on the nation’s economic recovery.

“The inventory on foreclosures will keep a lid on housing prices for some time,” said Blake Howells, head of equity research at Becker Capital Management in Portland, Oregon.

Gants did suggest in his opinion how banks might properly transfer mortgages via securitization trusts.

“The executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder,” Gants wrote. “However, there must be proof that the assignment was made by a party that itself held the mortgage.”

The American Securitization Forum, a trade group, in a statement said it “is confident securitization transfers are valid and fully enforceable.”

The cases are U.S. Bank N.A. v. Ibanez and Wells Fargo Bank NA v. LaRace et al, Supreme Judicial Court of Massachusetts, No. SJC-10694.

(Reporting by Jonathan Stempel and Dena Aubin; Additional reporting by Joe Rauch and Dan Wilchins; Editing by Matthew Lewis, Dave Zimmerman and Tim Dobbyn)

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1. A copy of any collection letters, foreclosure filings, etc.
2. Lender name, contact name/s, and phone numbers for lender
3. Information/contact info on any outstanding leins on the home.
4. Recent mortgage statement or coupon showing balances
5. Property Survey (if available)
6. Copy of previous Appraisal
7. Hardship letter
8. W-2’s (needed for each person on the deed)
9. Bank statements- for last 2 months all 4 pages of each (needed for each person on the deed)
10. Financial package completed from lender/s (will be provided by each lender)
11. last 2 Pay stubs from employer (needed for each person on the deed)

^{Feel free to contact myself for more information at (704) 840-4137 or Rod Potter at rpotter@carolina.rr.com.}

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Are you in foreclosure and looking to save your credit?

I can sell your home and as the seller, you may not have to pay any COMMISSIONS!!!  I will negotiate with your mortgage company to have ALL CLOSING FEE’S  (including the commissions) paid by them, or by the buyer of your home if a shortsale is needed.

A shortsale is a process where I will negotiate with your lender/s towards getting them to accept a reduced payoff amount on your loan/s. On many occasions, a shortsale is required because the amount owed (including the loan/s, agent commissions, closing costs, taxes, etc.) on the home is more than what the home is worth.

Contact me today to setup a no hassle, no obligation private consultation specific to yourforeclosure needs. I am a licensed North Carolina and South Carolina Realtor® who has been in real estate industry for years and that specializes in this type of real estate transaction.

Let me take all of the guess work out of the process. Even if you have tax liens, second & third mortgages, etc…. I can help.

You won’t know if I can help or not unless you call me today. Please call my cell phone at (704) 840-4137 and I will personally take your call…. no answering service and no receptionists.

If you are going to sell your home, use a Realtor that……

A) Has a clientel of investors that can buy your home quickly.
B) Is experienced with foreclosures and shortsales.
C) Knows how to deal with frustrating lenders.
D) Specializes in foreclosure listings.
E) Understands the importance of getting a quick sale and closing.

Please give me a call today at (704) 840-4137 and let’s see how I can help.

In these difficult times, it can feel like there are nothing but bad choices.   However, some are not as bad as others.   If you are finding yourself having difficulty with keeping up with your payments you do have some choices.

Short Sale: Even if you are behind on your payments or don’t think you can sell your home for as much as you owe, we may still be able to help you sell our home and get out from under your loans.   A short sale is when you sell your home for less than the total amount you owe the lender(s).    The process can be arduous but you avoid a foreclosure and generally will face less negative consequences on your credit score.   We have successfully negotiated over 30 short sales and usually gotten the lenders to forgive the shortfall on the payoffs.

We will help you through every step of the process.  The lenders generally require a couple years of tax returns, bank statements, and a letter explaining why the loan cannot be paid in full (a hardship letter).

Foreclosure: Foreclosure is when the bank actually goes through the process with the public trustee to sell a property at auction.   The process starts when the Public Trustee sends a Notice of Election and Demand.   From that point it can be as little as 120 days before the property is sold at auction.  Frequently the bank ends up with the property.    Even if the process has started, you may still be able to sell your home – if we can get an offer, most lenders will pause (forestall) the foreclosure proceedings, giving more time to complete the sale.

Foreclosure can a have significant effect on your credit score, ability to obtain loans, possible employment (if potential employers check it) and even security clearances.

Contact me today for more information!  Email: rpotter@carolina.rr.com / Phone: (704)840-4137 / Website:  www.rodpotter.com

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Moving to a new home is an exciting event.  Whether you plan to move down the street or five states away, the moving process does not change very much.  Keep in mind, though, that even when the move is to a better place, the process of moving can be very tiring and stressful for you and your family.

Realtors have many years of experience working with people like you and have gathered information about the moving process during that time. The information they can provide will be helpful to you whether you are selling and moving or buying a home for the first time. Naturally, there will be differences in the process for everyone, because no two situations are identical. But by following these practical tips, you will make your move ? and your life ? easier during this exciting time.

Keep a Calendar!
Once you have decided to move from your current home, even if that move seems to be in the distant future, you need to begin planning each step as soon as possible.  Advanced planning, when possible, will make the process smoother for everyone involved and it will also help you remember all the little details.

An organizer-type calendar with a folio cover will help you keep everything together. You can put important papers and notices in the folder to stay organized.  Organization is the key to success in almost everything, and planning a move is no exception.

If you know when you are moving, the first thing to write in your calendar is the date of the move. Work backwards from there to note critical tasks along the way.  As you think of things that you need to do, make a note of them in the calendar.

Schedule some personal time, too. It is important to make sure that you are spending time doing the things you love to do, as well as the things you have to do for your move.

Keep an Updated Phone List!
To ensure that you are ready to disconnect and connect your utilities when the time comes, and that you don´t forget anything of importance, keep a list of important telephone numbers inside your calendar folder.  Depending on where you are moving and how far it is from your current home, you may need to arrange for new doctors, dentists, and other professional services as well.

Try to establish a relationship with your new doctor as early as possible to ease the transition process. Also, if you are changing doctors or dentists, request that your medical records be transferred ahead of time.

Make a Complete Inventory!
Keeping an inventory of your assets is a good way to avoid forgetting anything when you move.  Well before moving day, begin to keep an inventory in a notebook.  Begin with your largest pieces of furniture and work your way down to smaller possessions.

Having a complete inventory will make the process of sorting and packing easier, too.  It will help you make an accurate estimate of the number and sizes of boxes required and decide whether you need to rent a storage unit. Also, if you are moving far away from your current home, you be estimate how large a moving truck you will need.

Determine Whether You Will Hire Movers or Do It Yourself!
Sometimes, home buyers know in advance whether they plan to use professional movers or complete the move themselves with the assistance of friends and family.  However, because every situation is different, sometimes this is a difficult decision.  In general, if you have a lot of heavy furniture and not enough help to move it on your own, hiring professional movers is an excellent idea.

On the other hand, if you are preparing to move into your first home and expect to purchase most of your furniture afterwards, then hiring professional help may not be worth the expense.

Most of the time, it is a good idea to hire movers for long-distance moves. First, consider the cost of renting multiple trucks and the fuel associated with hauling.  When you hire professionals, you are almost always sharing that cost with someone else for an interstate move.  This may be the case for short-distance moves, too. It really depends on the moving company and what you will be moving.

Clean Out the Clutter!
When you prepare for your move in advance, you have time to get ride of the clutter that you have accumulated.  The garage may be a good place to start, so that when you begin the process of packing you will have a place in which to store the boxes.

If you plan to sell your home while preparing to move, it is a good idea to eliminate clutter anyhow, since clutter-free homes are more attractive to potential buyers.  Consider holding a garage sale or making charitable donations.  You could also offer to give your items to friends and family members who could put them to good use.

Regardless of how you choose to eliminate clutter, it is a highly involved and time-consuming process.  Therefore, if you need to move soon, without much advance notice, know that it may be necessary to wait until you have reached your new destination to sort through your belongings and decide what to keep and what to eliminate.

Hire Help Throughout the Moving Process!
For families with young children, babysitting is the most valuable service that can be procured while preparing for a move.  Hire a local teenager, a relative, or even a daycare center.  This will give you the time and freedom necessary to successfully prepare for your upcoming move.

Again, the process can be more complicated when you are preparing for a move and selling your home simultaneously.  You may need to hire landscapers, painters and even haulers to help with some of the more difficult chores.

Hopefully, these tips on successfully preparing for a move will make the process less stressful for you and everyone else involved.  The value of a folio-style calendar cannot be stressed enough.  If you purchase one that is large enough to hold all your important documents in one place, you will never need to spend your valuable time searching for the information you need.

Allow yourself as much time as possible before the move, to prepare and pack.  And remember to take good care of yourself throughout the process. Getting enough sleep and eating healthy meals is critical.  Too many people rely on fast-food meals during the moving process, but a steady take-out diet is a recipe for disaster. Make wise choices and schedule time to eat nutritious meals.

Also, make sure that you are getting enough exercise.  Even a short daily walk will keep you refreshed and healthy, so schedule enough time every day for at least a short walk outside.  Sometimes, breaking up the tedium of moving preparations is the best gift that you can give to yourself.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

Bargain hunters and first-time home buyers alike almost always have questions about the value of buying foreclosed homes. Realtors have access to listings of foreclosed homes being sold at prices that are extremely competitive in today´s housing market.

When realtors show potential buyers foreclosed properties, they should make every effort to convey the difficulties that a new home owner may experience once the sale is complete.  If you are considering the purchase of a foreclosure property that may be too large of a commitment for your lifestyle, a good realtor will be honest and share his or her concerns with you.  This is because good realtors want their clients to be happy with their purchase, and therefore try to ensure that each client is making the best decision for his or her particular circumstances.

Logistically, the process of searching for a foreclosed home is very similar to that for any other home.  Specific listing services provide information to potential buyers, and realtors receive additional information that they can shared with potential buyers.

Potential buyers usually want more information about foreclosed homes than what is available. Understand that when you seek information about a home being sold through a foreclosure sale service, your realtor will probably need additional time to find the answers you need.

A foreclosure is almost always a home that was purchased by a buyer with a federally insured mortgage.  The buyer then defaulted on the loan and the home went into foreclosure.  Because the borrower´s mortgage was federally insured, the insuring agency was required to satisfy the remaining balance of the loan, in essence buying the home from the lender.

Obviously, the government does not want or need this surplus property.  Therefore, the government usually sells the property to a company which specializes in the sale of foreclosed properties.  These agencies are located across the country and list thousands of homes for sale.

Some of the higher-quality homes in affluent areas are sold immediately, perhaps even before they are officially listed for sale.  This leaves average home buyers with opportunities to save a significant amount of money if and when they find a home that works well for their current situation.

Many foreclosed homes have been vacant for a long time before the listing agency places them on the market for sale.  The risk of problems arising from that vacancy may leave buyers disillusioned when they finally have a chance to visit the homes they are considering.

Also, in some foreclosure situation, the previous borrower may not have maintained the home adequately and there may be missing or damaged items throughout the home.  Sometimes foreclosure homes are referred to as buyer beware, because these homes are almost always sold as-is.

Here are the three most questions that realtors are asked about foreclosed properties:

How Can I Find a List of Foreclosures?
Stay away from companies that promise to provide you with a list of homes that you can purchase for pennies on the dollar.  These companies have been known to provide sellers with lists of homes that have already sold, or lists of homes that are already available for free through realtors.

The Internet is a good place to begin your search.  Most of the reputable agencies place their listings of foreclosed properties online.

If you want to know whether additional foreclosed homes are for sale in your area, contact your realtor.  His or her office probably maintains a list of foreclosed properties, and your realtor would be more than happy to meet with you to discuss the possibilities.

So, Do I get pre-approved for a regular mortgage?  Or Am I Required to Pay Cash?
A common misunderstanding among potential buyers is that unless they are prepared to pay cash on the spot, they cannot purchase a foreclosed home.  This is simply not true.  Some lenders offer special loan programs aimed at borrowers who intend to buy a foreclosed home.

Lender appraisals and inspections may sometimes make it difficult to obtain a mortgage for a foreclosed home that has been damaged or is in need of significant repair.  Consequently, the same federal agencies that put the homes up for sale may be willing to extend financing to potential buyers.  These agencies will sometimes give the buyer grant money or a low-cost second mortgage loan to be used for the repair of the home.

In sum, you do not need to pay cash. However, you may need to borrow a specific type of mortgage loan, depending on the home´s condition and price.

Will I Save a Lot by Buying a Foreclosed Home?
Another common misconception is that foreclosed homes are priced at pennies on the dollar.  Well, if you consider this phrase to mean 99 pennies on the dollar, then you may be correct.  Generally, foreclosed homes are listed for sale at their approximate market value, according to the home´s location and condition.

Some foreclosed homes sell for very low prices, but in most of those cases the homes were razed in order to make room for new construction.  More commonly, high-priced homes in affluent areas sell for a few percentage points less than their current market value.  If this is the type of deal that you are looking for, then definitely consider purchasing a foreclosed home.

A good realtor will warn you up-front that the costs associated with buying a foreclosed home can be significant.  The buyer may be required to perform very costly repairs before occupying the property. Also, these buyers may be unable to take advantage of low interest-rate specials offered by lenders.

If you are considering the purchase of a foreclosure, be realistic in your expectations and prepare to expect the unexpected.  Many buyers are thrilled with their home after purchase, but others are forced to complete months of costly repair work before they can move in. As long as you investigate the possible options, including the available mortgage and assistance programs, you will be an educated consumer prepared to make an educated purchase.  Buying a home is often the largest investment that you will ever make, so you need to feel secure in the knowledge that you have invested wisely.

If you are interested in purchasing a foreclosure property, many realtors will offer you the benefit of their experience and expertise.  Realtors normally do not work with these types of sales every day, but they do have access to information and property listings that can help you decide whether buying a foreclosed property is the right option for you.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

Facing Foreclosure? 10 different options that you have.

If you fall behind on your home loan, you will quickly learn that your options are limited. The more behind you get, the less options you have. Here are some suggestions that you could use to delay/stop a potential foreclosure………

1. Sell your home-

Call my cell phone at (704) 840-4137 for a free, no-hassle, no obligation consultation on how you can sell your home and have the lender pay for it.

2. Call lender/s-

Contact all of your lenders and ask them to postpone it. Tell them you are trying to save the home, and can prove that you are working on a solution (refinancing, selling, etc.) and offer to fax them a letter and documents to back up those claims. Call me and I can get you a name or two of a mortgage professional that might be able to help you re-finance your home.

3.Call Subtrustee-

Contact the lender’s attorneys (sub trustee) and do the same thing. Sometimes, the attorneys will have a better contact at the bank than you do.

4. Bankruptcy-

If necessary, file bankruptcy and have the foreclosure process stopped immediately. Speak with an attorney about how long you would need to be able to file before the sheriff sale. Some states may allow you to file the day of the sale, while others have laws that drag out the process by days or weeks. This will only DELAY the sale, not stop it. This should used in specific situations, please consult a qualified bankruptcy attorney for more information.

5. Deed-in-Leu-

If acceptable to the lender, they will take the home from you voluntarily.

6. Loan Modification-

Speak with your lender about doing a loan modification. Essentially, this is changing the terms of the loan to better match your current income/situation.

PRO’s- This is a good option to change your loan terms.

CON’s- This can take a while to get completed (if ever). Working on a loan modification will not stop or delay a foreclosure action by your lender. It would be recommended to probably try to sell your home at the same time that you are doing a loan modification.

7. Get help NOW, not tomorrow, not next Tuesday, not after the lender calls me back….NOW. From who?

Contact a HUD-approved housing counseling agency. Call (800) 569-4287 or TDD (800) 877-8339 for the housing counseling agency nearest you. These agencies are valuable resources. They frequently have information on services and programs offered by Government agencies as well as private and community organizations that could help you. The housing counseling agency may also offer credit counseling. These services are usually free of charge.

Contact the state agency responsible for housing in your state. Ask them of any organizations sponsored by the state or run by the state which can assist you in this issue. Many states are funding programs to help homeowners by advocating on their behalf with lenders, providing one-time grants for funds to catch up past-due payments, etc.

8. Avoid being scammed by those anxious to take advantage of you in your circumstance either by offering to buy your home quickly, make payments on your behalf, etc. How to know if you are being scammed?

Phony counseling agencies. Some groups calling themselves “counseling agencies” may approach you and offer to perform certain services for a fee. These could well be services you could do for yourself for free, such as negotiating a new payment plan with your lender, or pursuing a pre-foreclosure sale. If you have any doubt about paying for such services, call a HUD-approved housing counseling agency at (800) 569-4287 or TDD (800) 877-8339. Do this before you pay anyone or sign anything.

Don’t sign any papers you don’t fully understand.

If you’re selling the house yourself to avoid foreclosure, check to see if there are any complaints against the prospective buyer. You can contact your state’s Attorney General,  or the local District Attorney’s Consumer Fraud Unit for this type of information.

9. Ask for help.

The earlier you ask for help, the less help you need. If you get 2 payments behind on your home loan, there is still time for a church friend, family member, etc. to help you catch-up. Asking for help early makes it more likely help can…well…HELP. Waiting until the house is going to be auctioned on the courthouse steps is simply too late for most people to get behind you and your circumstances and provide you financial help.

Lenders do not want your home. Foreclosure is expensive and unprofitable for a lender. They will often work with homeowner’s who communicate with them, who do what they say they will do, and who present some kind of plan for getting back on track.

10. Court Hearing-

Before the court hearing date or the date of the hearing on your home, ask the judge for an adjournment (delay). If the date was inconvienent, tell him/her that the date and time of the hearing is/was inconvenient. (ie. work, or inability to obtain the documents for the lender in-time). Lenders are notorious for being slow, it is not unusual for people to wait a while for the lender to provide payoff documents etc to them.

§        Dress nice the day of the court hearing.

§        Address the judge as “Sir”, “mam” or “Your Honor”.

^{Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137}

DISCLAIMER: Presentation of this information is for general purposes only. No information on this page is to be viewed as legal advice or as an official description of judicial process. These descriptions are general and are displayed strictly as a service to consumers. They are not intended to be all-inclusive or to cover default situations in all states. Default procedures vary by state and change often. The information herein is not to be construed as up-to-date. Consumers are advised to seek professional legal counsel in any default proceeding.