notice of pendency of action NY
Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
What kind of letter is necessary to make the lender prove they have ther right to forclose?
If the lender has filed for foreclosure. They have filed a complaint. Your response to the compliant filed will include an "Affirmative Defense" where as a function of answering the foreclosure complaint you ask for the court to ensure the plaintiff is the current and correct legal owner of the note and mortgage and the amount owed is correct and that no fraud during the origination took place. As described herein, this is done via a lawyer in the court.
If you are just trying to do this without a lawyer you can write your mortgage servicer and ask for proof of ownership of the note. I am not too positive how much traction that will get you. While the defense as a counter-claim in foreclosure is common and a reasonable defense, as the consumer with no lawyer, it is not going to really get you anywhere and if I was to bet most servicers won't respond to your letter in any sort of timely fashion. While you may think a "high five" for the little guy is in order by them not responding, it will not stop them from filing and proceeding with the foreclosure.
The collateral portion of the file which includes the original note, mortgage, title and some other important pieces is typically held with a mortgage bailee in a locked vault and is not held on hand at the mortgage servicer's office or the office of the investor who owns the note and mortgage. This makes getting copies a bit of a hassle and why you as a consumer might just be ignored.
While the public has latched onto the story that if they (lender,etc) do not have the original note you can not be foreclosed on, this is not entirely true. Notes are lost all the time and foreclosure still takes place legally. The lender's attorney usually gets a copy of the full collateral file and if the note is missing they will file for a lost note affidavit. If the affidavit is approved, because they can prove ownership via a purchase contract or alike then copies of the note can be used to complete the foreclosure complaint. It is only when the chain of ownership is broken that the borrower has the chance of winning that type of argument. Tracing back and fixing broken chains of ownership as a investor in notes and mortgages is not that much of a challenge as the public might think.
In today's climate some firms specialize (like ours) in dealing with files with less than adequate paperwork. It is pretty easy as a lender to proceed with foreclosure in most cases.
Dion, Thanks for your reply, I am working with a friend to try to get a modification on her mortgage. The note appears to have been transfered to a trust for an asset backed certificate held by BAnk of NY melon as successor in interest to Jpmorgan chase bank,.
The owner has been unsucessfully trying to get a modification only to have the file repeatedly closed for documnets that were sent but were lost by the servicer.
Can our modifiction benefit from asking for proof of ownership of the note in our answer or is the forclosure department completely seperate from the area that hanldles the work out?
I would not say there is a benefit that comes your way if you ask to prove ownership. It does not hurt to find out though. I would have the borrower claim confusion perhaps and ask and see if they respond. If I was a betting man, I would presume they just verbally inform her they own it and not really send any document to the same.
The servicer's loss mitigation department would handle the modification initiation. If I understand you correctly, the borrower has repeatedly (or at least once) sent the modification package in and the servicer has lost the paperwork. Unfortunately, this happens. When she sends the paperwork in, send it via certified mail and track who signs for it, etc. I would follow that mailed package with an emailed package as well. Have her start keeping copies and a log of her actions with detail. She will not move forward until they have received said package and regardless of them losing it 100 times, it falls on the borrower to ensure they receive the documents.
I would also call the servicer a couple of times and have them log in the servicing notes what has happened and how she has been trying to respond to the failure of the servicer. New York is a long foreclosure and eviction timeline state, one of the longest in the country so there is an incentive for the servicer to try and get the loan to perform correctly. If she happens to qualify for HARP they would generally jump all over it.
Also, as a heads up. Most modifications do not include principal reduction. Most of the time they will lower the interest rate and take the arrears on to the back side of the loan. Saxon Mortgage was doing principal forgiveness by forgiving 1/3 of the total principal each year for 3 years of successful on time payments. Not too many of the other big guys are doing much of it unless it is tied to the possibility of a government program. The Saxon program was prior to them being sold to Ocwen a couple months back.
If she gets no where, which frankly is likely, unfortunately, she will have a nice package and log of her actions as a responsible borrower. This would fit well if she has to respond to a foreclosure action in the near term.
Sometimes the borrower gets a better audience through the attorney who handles the foreclosure for the plaintiff. Depending on the firm, she can try and deal with them directly (without her own counsel) and send the package to them and ask for mediation. However sometimes these attorney firms are "foreclosure mills" and the attention to detail is not very present. This may require her to get an attorney and have the response heard in court. Remember, there is no legal obligation to modify her loan in any manner. If she is not suffering a true hardship she may not get looked at by either the servicer, investor or judge with any merit to the request. It sort of depends on what she is trying to get done via the modification. If you want post a little detail about what she seeks via the modification and I will give some insight from my vantage point, if that is of value to you.