Things You'll Need:
- A licensed attorney who is an expert on this subject. (I can recommend a few depending on where you live)
- Any documents you received from the lender (If you don't have all of them don't worry, I have tips on how to find them)
- A forensic loan audit (I know a couple great auditors I can recommend)
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Step 1
The first step in any action is understanding. Due to the complexitites of the whole financial system, and how mortgages were put together, I will give you an analogy in step two so that you can understand the whole premise of how this strategy works.
Keep in mind that although I am not an attorney, I do know a few excelent attorneys who specialize in this type of law. You can go about this on your own, but your chances of suceeding are much higher when you hire a lawyer who has experience in this field. If your case is successful, you could end up with a home without a mortgage, or a settlement that could involve a reduced principal balance, and/or a lower interest rate. -
Step 2
Imagine you need a mortgage and you go to a company called Ameriquest and take out a mortgage. The loan is underwritten, you sign the documents, and on your loan docs it explains you have a loan with Ameriquest. You start making your payments to the address on your statement. You keep sending the monthly check to Ameriquest to the address on the statement.
The next month you get an official notice that says that next month you need to send your payments to Countrywide as they state that they are the new owner of the loan. You get a statement that says your payments now need to be sent to Countrywide. What most consumers do is simply send the payment to the new lender. There is only one problem; How do you know that Countrywide is in fact the new owner of the loan? What just took place was called an "assignment" and there are laws that are in place which gives the consumer the rights to find out if in fact Countrywide is the lender. Sometimes a loan gets sold more then once, making this more confusing. -
Step 3
The first thing you need to do is send out a letter to the lender asking them for a copy of the note, the beneficiary information, as well as the assignments, this is called a qualified written request.
(I can provide you with a sample letter to you free of charge) although I can tell you that a letter coming from an attorney asking for this information, can be much more adventagious, as it is more likely your lender takes you seriously, and your case, and they might offer to give you a loan modification right away. The reason behind this is because the lenders do not want to have to litigate your case, it costs them money, and makes foreclosing on your home in California much more difficult. -
Step 4
The lender must provide you with a as well as who is the beneficiary statement within 21 days (California Law) as well as as copy of the note, the assignment rights within 60 days (This is Federal Law).
Since a large majority of the lenders will not respond to your letter, or send you incomplete information, you might want to send out a second letter (I can provide you with a sample letter to you free of charge for this letter as well) as I feel strongly that nobody in California should be foreclosed on by any entity that does not have the right to do so.
If the lender can't prove they are entitled to collect on a mortgage, then you can demand they remove themselves from the title. If you cannot prove you own something, then how can you take it from someone else? This is the reason why the produce the note strategy is so effective. The major problem is that the note is not the only thing you want to see. -
Step 5
Another step in the process is to get a forensic loan audit. This is a where a professional examiner goes through your entire set of loan documents line by line to find any and all errors on your disclosures, and loan documents. I can refer you to a wonderful document examiner who is affordable, and in my opinion, one of the best in the business.
The forensic loan auditor has found that approximately 98% of the documents that examine that were originated over the last several years has had some form of predatory lending, misleading disclosures, or violations of State and Federal regulations. State and Federal regulations that govern the mortgage industry are extensive and complex to say the least but they have become law to protect you, the consumer.
Since there are hundreds of check points involved in the forensic examination of real estate documents and many discoveries are made during the examination this gives you more evidence to go after your lender for violations. -
Step 6
At this point if you have sent out the letters, and have a copy of the audit, you can now take your lender to task for their actions. Some people attempt to go to court and sue the lender on their own. This is called "Pro Per" or "Pro Se". Although some people have been successful, your chances of success are much higher if you have an attorney who is experienced in this type of law. Like I said earlier, if you need a referral in California, let me know, and I will point you in the right direction.
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Step 7
The lender settles with you, or you file a lawsuit. Sometimes once you file the lawsuit, a stubborn lender might decide that settling with you is the best idea. If you win the case, you could potentially end up with a home without a mortgage, or you might settle for new terms that you are happy with. This is where you would want to go over your options with an attorney. Keep in mind that the majority of the time, these lawsuits have an attorneys fee clause, which means you could end up getting all the money back you paid for your attorney, plus damages.
