What I Found in a Recent Property Analysis May Surprise You (Part 1)
This is a multi-part series about a recent loan audit I did.
I'm seeing a lot of interest the content I write about foreclosure defense, and interest in my digital products for auditing your own loan, but not a lot of people are ready for an audit.
I hear there are many programs being offered by lenders to put people into loan modifications, and it's an election year so we're not going to see high numbers of foreclosures going through in 2024.
However, I wanted to share some information and takeaways from a recent loan audit I did for a New Jersey homeowner.
I know people REALLY like content about securitization, because I see how many people are looking at my videos on it, but it's not a magic bullet in terms of winning a foreclosure defense case.
The recorded chain of title on your property is the #1 best place to find leverage for yourself as a homeowner. It might not be as sexy as an expensive computerized report showing how your loan was traded on Wall Street (if you have a loan it's likely securitized, no mystery there), but it is FAR superior to that.
It’s also free or low cost to research at your recorder’s office.
This homeowner purchased her property in 2010, long after subprime crashed. The loan was originated by BigCity Lender, who indicated on the Mortgage that it was the real lender.
At some point, she began having issues paying the loan and getting a loan modification. BigCity had its people record a transfer of Mortgage to Fannie Mae in 2014, likely in anticipation of beginning foreclosure proceedings.
The borrower got tired of getting jerked around and filed a lawsuit against Fannie and the servicer, Mr. Cooper. I had never heard of this servicer until I audited her loan.
They were in litigation for five or six years, until things got worked out and a settlement was reached. All was well at that point.
Fast forward to 2020, when debt sales slowed or halted because of the pandemic. At the same time, the homeowner’s spouse had a major health issue and they began having problems making the payments.
The hits just kept on coming…sound familiar to any of you?
The homeowner didn’t know she was in foreclosure until she began receiving soliciation notices from attorneys for bankruptcy in 2024. That’s about the time she hired me.
I want to talk specifically for a moment about the chain of title. This is a series of documents that are recorded at the county recorder's office where the property is located.
The last foreclosure crisis created a big mess when it comes to ownership, titles and the legitimacy of ownership. Ditto to notaries. What is the point when someone can just forge the notary's signature? But I digress.
For those of you who are new to how the chain of title works, the main thing to remember is that it should be in linear order and it should make sense.
A to B
B to C
C to D
and so on.
This is an unbroken chain of title. It's unbroken because each of these parties are connected to the party who previously owned the loan because they transferred it directly to them.
Although it should make sense, when it comes to foreclosure, it rarely makes sense. I say this because I don't want you to be confused when you go the recorder's website and the chain of documents isn't linear, or you can't figure out where a party got authority to insert themselves into your chain of title.
Also, don't let this upset you. This is widespread and the documents are filed by a third party and I'll explain that in this series.
For now, understand that a screwed up chain of title is where you get most of your leverage to get what you want from the bank.
You don't need an expensive computerized audit. You can probably look at all this stuff for free on your recorder's website.
If you would like to know more about auditing your own loan, please check out the books I've written for homeowners, professionals and people who want to audit for others. I also have a book on legal research for non-lawyers that might help you too.
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