Are Foreclosures Legal?

Foreclosures are on the rise and it is estimated that over eight million more homes will go into foreclosure in 2009.  This can only mean that we have not seen the bottom of this economic crisis nor have we seen the bottom in the real estate market.

As more homes are vacated and left to deteriorate, values will continue to plunge, furthering this crisis and lowering house prices even more.

We are seeing more and more real evidence of fraud, not only in the mortgage industry – originally blamed for this mess – but in many sectors of the financial industry, mostly at very high levels.

There are many stories yet to be told.  The Medoff story, is just the beginning.  A Ponzi scheme carried out for almost twenty years with no SEC oversight or control.  How could this be?  Are there people very high up in our political system that are complicit?

Another little told story is how investors in the mortgage backed securities were defrauded.  There is evidence that they were sold interests in securities that were falsly rated AAA giving the appearance of a “safe” investment.  More has been learned as well about this fraud.  Some lenders actually sold the same mortgage to several different securities.  Some even forged names onto closing documents then sold these fraudulent mortgage notes in packaged securities to investors world wide.

One fraud that is not being talked about at all anywhere is the fraud that is going on in the foreclosure segment.  Aiding and abetting this fraud are law firms – called foreclosure mills – that knowingly are taking foreclosure actions on behalf of clients that cannot prove or even do not own the mortgage note they are attempting to foreclose on.

They prey and depend upon the fact that most people WILL NOT fight or defend a foreclosure.  For the most part, people know that they are delinquent and have not made a payment in several months.  They know that foreclosure is a forgone conlusion and simply walk away without a fight.

Judges in many states, specifically New York and Ohio have DENIED foreclosures where the paperwork was not proper and Plaintiff was not legally entitled to take the foreclosure action.

Some judges have considered this action by attorneys and their clients to actually be “FRAUD UPON THE COURTS”.  They have dismissed these cases and some even “With Prejudice” meaning that no further action can be taken.

It is my opinion and understanding that many foreclosures ARE illegal.  As such they SHOULD be defended in court and the legality challanged.  If the Plaintiff cannot PROVE ownership of the mortgage note then they cannot foreclosre.

By not taking any action when notified of a foreclosure, this fraud will continue.  In most all of these cases, the original lender – the one that made you your loan – has BEEN PAID in full.

I have always stated and maintain that “two wrongs don’t make a right”.  Yes, you are delinquent on your payments and your contractual obligtation many not by choice but by circumstance beyond our control.  Perhaps because of the way Wall Street functioned giving so many mortgages out then slamming the door shut overnight.

But, just because you are wrong does not mean that you should loose your house unjustly or wrongly.  The laws of the land are there for everyone, not just the few who rule by wealth. 

Stand up for your rights, fight back, stay in your home.  In fact, this could very well help the economy recover.  The more people who stay in their homes, the more these homes will be maintained and the values stabalized.

If more foreclosures are defended the more the true owners of these notes would be willing to negotiate fair and equitable loan modification arrangements.  After all, getting something, even if it is only the principle amount repaid, is better then getting nothing and losing even the original investment.

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