Mortgage Dispute Resolution

Today I am answering a question from a homeowner in Clarkston concerning a mortgage dispute. He’s seeking a “mortgage resolution” to his problem. He writes:

“I received a call from a new mortgage company stating that they now own my mortgage. It is for an old second mortgage that I have not paid on in over 8 years. This is because several of my earlier payments were returned to me in 2012 and the old company never responded to my Inquiries. I never heard from them since. This mortgage company has threatened me with a lawsuit. Nothing legal has happened to me, yet. How should I respond to this mortgage company?”

Mortgage Discharge is Required

First, you should know that even if the former mortgage companies in the past did not respond, the mortgage that you have most certainly encumbers your property. So at some point, if you go to refinance or sell the home, you will need to contact the appropriate lender for a mortgage discharge.

Verify Mortgage Rights

When there is confusion as to what happened to a mortgage, or who has the right to collect on a mortgage, I always request that the purported mortgage company verify or validate how they have come to own the rights to collect under the mortgage. This is usually verified by filed mortgage assignments from one lender to another. This is where you start.

Determine Amount of Mortgage

Once you get the proper response and documents from the mortgage company proving how they own or have the rights to service the mortgage, then I ask for an accounting. Then you need to determine how much will be needed to pay off or reinstate payments under the mortgage. It is very likely that this company has bought the mortgage at a deep discount and so they are looking for a high rate of return for their investment, especially in this prosperous economy where home values have Increased and equity positions have improved.

Improve Your Position

Finally, you will want to seek the counsel of a qualified real estate or mortgage attorney. You may feel that you’re able to negotiate payment terms on your own, but that is just the half of it. You need to generate the best forbearance documentation memorializing your agreement. Without an attorney, you will most certainly miss the little tricks that lenders can play that may worsen, not improve, your position. Remember, lenders and banks have attorneys who create their documents. If you don’t have your own attorney, you are at a serious disadvantage. Trust me, half of every week is cleaning up what I call, people’s legal vomit. Good for me, but at first, bad for the client.

 

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DAVID SOBLE

DAVID SOBLE

Real Estate & Finance Attorney

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