Foreclosure and Bad Records–Why We ALL Should Care

By Greenville-Spartanburg bankruptcy lawyer Däna Wilkinson:  I hear it from all sides of the foreclosure crisis–from lenders, lawyers, people on the street, and sometimes even my clients.  Even if the banks that are foreclosing are accused of using falsified documents, robo-signers, failing to meet their own guidelines and misleading their own investors (sometimes even betting against them), homeowners still owe the money, right?  If the payments aren’t made, the lender should be able to foreclose, right?  Despite the fact that they can’t produce a paper trail, they couldn’t be, well, WRONG, could they?  The same banks and mortgage servicers that can’t find the paperwork that says who owns any particular mortgage, couldn’t be, for example, losing payments, could they?  Or misapplying them.  Or losing track of other things?   Rolling Stone explains why those who say that only deadbeats, not deserving people, are being thrown out of their homes, are dead wrong:

There are two things wrong with this argument. (Well, more than two, actually, but let’s just stick to the two big ones.)

The first reason is: It simply isn’t true. Many people who are being foreclosed on have actually paid their bills and followed all the instructions laid down by their banks. In some cases, a homeowner contacts the bank to say that he’s having trouble paying his bill, and the bank offers him loan modification. But the bank tells him that in order to qualify for modification, he must first be delinquent on his mortgage. “They actually tell people to stop paying their bills for three months,” says Parker.

The authorization gets recorded in what’s known as the bank’s “contact data­base,” which records every phone call or other communication with a home­owner. But no mention of it is entered into the bank’s “number history,” which records only the payment record. When the number history notes that the home­owner has missed three payments in a row, it has no way of knowing that the homeowner was given permission to stop making payments. “One computer generates a default letter,” says Kowalski. “Another computer contacts the credit bureaus.” At no time is there a human being looking at the entire picture.

Which means that homeowners can be foreclosed on for all sorts of faulty reasons: misplaced checks, address errors, you name it. This inability of one limb of the foreclosure beast to know what the other limb is doing is responsible for many of the horrific stories befalling homeowners across the country. Patti Parker, a local attorney in Jacksonville, tells of a woman whose home was seized by Deutsche Bank two days before Christmas. Months later, Deutsche came back and admitted that they had made a mistake: They had repossessed the wrong property. In another case that made headlines in Orlando, an agent for JP Morgan mistakenly broke into a woman’s house that wasn’t even in foreclosure and tried to change the locks. Terrified, the woman locked herself in her bathroom and called 911. But in a profound expression of the state’s reflexive willingness to side with the bad guys, the police made no arrest in the case. Breaking and entering is not a crime, apparently, when it’s authorized by a bank.

The second reason the whole they still owe the … money thing is bogus has to do with the changed incentives in the mortgage game. In many cases, banks like JP Morgan are merely the servicers of all these home loans, charged with collecting your money every month and paying every penny of it into the trust, which is the real owner of your mortgage. If you pay less than the whole amount, JP Morgan is now obligated to pay the trust the remainder out of its own pocket. When you fall behind, your bank falls behind, too. The only way it gets off the hook is if the house is foreclosed on and sold.

That’s what this foreclosure crisis is all about: fleeing the scene of the crime. Add into the equation the fact that some of these big banks were simultaneously betting big money against these mortgages — Goldman Sachs being the prime example — and you can see that there were heavy incentives across the board to push anyone in trouble over the cliff.

Read the whole article.  It’ll make you think, and it ought to make you mad.  It’ll help you understand that we are all affected by this crisis.  If you are a homeowner in trouble, it may give you some direction.  If you’re a homeowner in trouble, and never thought you would be, it may help you understand how you got there.  And if you’re a homeowner who’s never had a moments’ trouble making your mortgage payments, and you’ve been thinking that only deadbeats are in foreclosure, it may scare you.  Because it can happen to you, too.

About

Däna Wilkinson (pronounced "Donna") is a bankruptcy lawyer practicing in Spartanburg, South Carolina and serving South Carolina's upstate region, including Greenville, Spartanburg, Gaffney, Union, Anderson, Easley and Pickens. She has been in practice for more years than she cares to count, but it’s more than 20 years. Däna has been a bankruptcy lawyer from the very beginning of her career as a lawyer.

Däna went to law school at the University of South Carolina, where she was Student Works Editor on the South Carolina Law Review and a member of the Order of Coif. She started doing bankruptcy work while still a student, working for a bankruptcy boutique firm whose members included a Chapter 7 panel trustee, and recognized experts in Chapter 11 reorganizations. She enjoyed the work from the beginning, and upon graduation took a job as a law clerk to the Honorable Rodney Bernard, bankruptcy judge for the Western District of Louisiana. Judge Bernard had spent a number of years on the bankruptcy bench, and was an excellent teacher and mentor. Upon Judge Bernard’s retirement, Däna stayed on for a time as clerk to the Honorable Donald W. Boe, until homesickness for South Carolina struck, and she returned to private practice in Charleston. Four years later, she received an offer to return to Columbia, where she practiced until 1997.

In 1997, planning to start a family, Däna decided to return home to the Upstate, and opened her own practice in Spartanburg in 1998. Over the years, Däna represented all sorts of parties in bankruptcy: business debtors in reorganization, individual debtors, creditors and creditors’ committees, and trustees. In establishing her own practice Däna decided to focus on consumer debtors, ordinary people who find themselves overwhelmed by debt. Her focus is on the individual needs of clients, and on crafting a solution to their unique financial needs. She is committed to helping clients make a fresh start, and preserving their dignity in the process.

Däna is the proud mother of a beautiful, talented and very active daughter, who is, as her mother says, “practically perfect.” She is also active in both church and community activities, all of which means that there is a fair chance that any given blog post was written while in the car pool line or while waiting for a hearing or a meeting to start.

Däna is also certified as a bankruptcy specialist by the South Carolina Supreme Court, which means that she has taken and passed a proficiency examination on bankruptcy law, devoted her practice to bankruptcy for a number of years, and continues to take classes on bankruptcy law and related issues.

Contact information for Däna Wilkinson:

Law Office of Däna Wilkinson
365-C East Blackstock Road
Spartanburg, SC 29301
(864) 574-7944
[email protected]
www.danawilkinsonlaw.com

Däna also blogs at www.bankruptcylawnetwork.com.


Comments

  1. gregory says:

    “FRAUD IN THE COURT” and “NO DUE PROCESS IN CALIFORNIA”

    My Civil Case regarding Wrongful Foreclosure went Judicial in California.

    The Judges turned a “Blind Eye” to the Back-Dated, Forged, Non- Acknowledged Fraudulent Foreclosure Documents and EMBEZZLEMENT Scheme, removed the LIS PENDEN, allowing GOLDMAN SACHS to FORECLOSE ON MY PROPERTY.

    GOLDMAN SACHS does not own my property, but their name is all over the Insurance documents.

    To all Foreclosure Victims:
    If you are in need of Affirmative Defenses to combat these thieves and injustice, feel free to visit my blog at http://www.bushnellcomplaint.blogspot.com.

    And Click on this link to view my current Unlawful Detainer:
    https://fdaaccount.box.net/shared/nuym44jzj0

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