Foreclosed on when the payments are up-to-date?!
November 19, 2009 10:40 PM   Subscribe

A friend got a notice of foreclosure on a house on which he's made regular payments for over a decade. It's in Sonoma County, California; he's lived in and owned the house since the late 90s. I've advised him to lawyer up, and tomorrow will help investigate what pro bono attorneys are available to him. He has little money; his home is his wealth. Meanwhile, maybe someone here has been in this position and can provide a roadmap?

His e-mail to me:

I got a weird story to tell you.
On November 3rd a notice was put on my home saying it was a foreclosed property and I have to move out.
So I knew it wasn't right because I'm current on my loan and have never missed a payment.
Anyway it turns out that my lender seems to have foreclosed on my house, put it up for public auction and then when it didn't get a high enough bid, it was sold to freddie mac.
I think under CA law if someone had picked it up at auction I would have legally lost the house.
Now freddie mac says they own the house, but they're saying that they won't resell it at auction because of what I've told them.
My lender says they're investigating but won't tell me what's going on.
I've been cautious about going out, just in case they try to block me from coming back.
I sent a complaint form to the state lender regulator in Sacramento,
and I also filled out a request to have the consumer news advocate "7 on your side " look into it.
posted by goofyfoot to Home & Garden (17 answers total) 6 users marked this as a favorite
I am a lawyer in California, but not your lawyer or your friend's lawyer, and I don't work with foreclosures or real estate in general. This is not legal advice.

Lawyering up is The Thing To Do Here. The links on the MeFi Wiki's Get a lawyer article are a good start; you could also ask professors at local law schools. Also, the State Bar has a database of California lawyer referral services.

Also, document everything. Any records of your friend's payments, mortgage, or communications with the companies involved would be useful. The more complete, the better. Have your friend get a notebook and write down everything concerning the matter.

Good luck!
posted by tellumo at 11:06 PM on November 19, 2009 [1 favorite]

Thanks for reminding me: I forgot to state that I am aware that askme does not offer legal advice, nor does it purport to, and I'm not asking for any legal advice on behalf of my friend. My question has to do with any reputable, on-point referrals mefites have, and any lay experience with this kind of situation that kind point him to the best way to act in his situation.
posted by goofyfoot at 11:25 PM on November 19, 2009

Is he absolutely sure that all this legal action is all happening to HIS property? Maybe it's actually about his neighbor's house but the notice got put on the wrong door and now everyone's confused? What does the county assessor (or whoever it is that handles property title records in his area) say about current ownership of his home?

In Vegas things are such a mess that there have been several stories of foreclosure notices being sent/posted to the wrong places, the sheriff evicting the wrong household of people, etc. Hell, it even happened to me, to a lesser extent -- a month after we bought our place we got a nastygram on our door telling us that we were trespassing on a foreclosed property, because the company rep was working off an old list. I wouldn't be surprised if there was similar confusion elsewhere.
posted by Jacqueline at 12:53 AM on November 20, 2009

In the new Michael Moore film, a senator told people that unless the lender can produce the actual copy of the mortgage you signed, the lender is powerless. Most lenders apparently no longer have the paperwork.
posted by devnull at 2:30 AM on November 20, 2009

>In the new Michael Moore film, a senator told people that unless the lender can produce the actual copy of the mortgage you signed, the lender is powerless. Most lenders apparently no longer have the paperwork.

Let's add to the usual admonitions on legal issues: never take legal advice from Michael Moore.
posted by yclipse at 4:12 AM on November 20, 2009 [8 favorites]

Although representing himself would not be the best option, it is an option. Empire Law School, in Santa Rosa, has a Self-Help Access Center which is designed to help those that, for one reason or another, have to help themselves.
posted by yclipse at 4:19 AM on November 20, 2009

Your friend should call his Congress Critter and make sure they are aware of the situation. He may need someone who can cut through red tape and ensure that he doesn't get tossed out of his house. His representative in Congress could do that.

Of course, lawyer up and all that. But this is a good insurance policy, plus its free. It is a high profile issue, so the Congress Critter should be inclined to help.
posted by alms at 5:48 AM on November 20, 2009

I'd suggest two things: contacting the nearest law school, which may have a clinic where law students supervised by attorneys work on cases and I'd also check with the California bar, which might have a foreclosure-specific program. In Maryland they have such a program.

Good luck!
posted by Ironmouth at 5:50 AM on November 20, 2009

It might help your friend to understand what happened. Mortgage buyers and sellers wanted to make their assets more transferable, so they created MERS. The best answer from this question covers it fairly well. My guess in your friend's case, the transfer system has broken down so the owner of the mortgage is not receiving the friend's payment.

The only additional thing I can think of for your friend to do is to look at the county clerk's website to get any information you can about who owns the mortgage.
posted by rakish_yet_centered at 6:43 AM on November 20, 2009

There was a similar situation in Detroit recently, where a mortgage company was taking payments and not applying them to the loans. Get a real estate lawyer.
posted by chocolatetiara at 7:38 AM on November 20, 2009

Just curious about the payments - if they are checks, can he make sure they all were cashed and get a copy of the canceled check information? This would be part of the "document everything" stage.
posted by CathyG at 8:25 AM on November 20, 2009

After thinking about this some, I think your friend should view this as an opportunity. And if respondents can't take Michael Moore's view without snarking or favoriting, then consider the New York Times on the subject.
posted by rakish_yet_centered at 9:57 AM on November 20, 2009

Yes, have your friend get copies of his cashed checks right away. His lawyer is going to ask for them anyway, may as well get started with the banks now since this might take some time.
posted by Asparagirl at 11:34 AM on November 20, 2009

Thank you all. I've sent a link to this thread to my friend, and because I'm working in a law library at the moment was able to ask a librarian/attorney to look into it.

I don't know how this will end up for my friend, but will post here what he was able to gain from the advice.
posted by goofyfoot at 12:18 AM on November 21, 2009

AskMes are open for a long time, so please please do post an update once this has been resolved, or as events develop.
posted by Deathalicious at 12:45 AM on November 22, 2009

So far, nothing. Friend cussed out a Freddie Mac rep who denied him specifics, and talked to a pair of husband-and-wife multi-specialist lawyers (who have been licensed in the state since 2008 and May 2009), who wouldn't take his case. I have encouraged him to contact free advocacy (he has several addresses/URLs now) and his congresspersons' constituent services, including his Representative. So far, he's contacted Boxer and Atty Gen. Jerry Brown. He's getting nowhere with PNC, to which he's paid his mortgage.
posted by goofyfoot at 1:04 AM on November 25, 2009

A months-later update: My friend reports that amidst his other calls, he contacted the California Office of Consumer Affairs. His complaint was forwarded, because his mortgage was supposedly now held by Mac or Mae, to a federal agency, the Controller of the Currency. This concern has responded to him, I don't know exactly to what extent, but sufficiently that he feels the problem will get sorted out. It has not been completely resolved yet.
posted by goofyfoot at 12:34 AM on February 6, 2010 [1 favorite]

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