Archive for phoenix foreclosure attorney
Strategic Defaults or “Buy and Bail”? What do you call it when you walk away from your home after the lender refuses to do anything meaningful as far as loss mitigation?
There is a new wave of happenings in the loss mitigation marketplace. When a loan servicer or lender fails to modify a loan (especially loans that are upside down and in need of principal reduction) some buyers are deciding to blow off the lender and just walk away from the property.
Well of course the lenders are up in arms about this financial preservation strategy (as I learned in contract law many years ago, this is the concept of “efficient breach” wherein sometimes it is simply in ones best interest to breach a contract). Of course the rules change when the efficient breach is perpetrated on the mighty banks. To them this is “mortgage fraud” or “buy and bail” or “unethical” or “immoral.”
What banks fail to realize is that if they would provide MEANINGFUL MODIFICATIONS WITH ALL THE TAXPAYER FUNDED BAILOUT MONEY THEY RECEIVED PERHAPS PEOPLE WOULD NOT BE BAILING OUT ON THE LENDERS.
IF THE LENDERS (AND THEIR INVESTORS WHO INVESTED IN THE SECURITIZED LOANS) DO NOT WANT TO PROVIDE MEANINGFUL LOAN MODIFICATIONS BECAUSE THEY ARE SEEKING TO DO WHAT’S IN THEIR BEST INTEREST, SHOULD THEY REALLY BE SURPRISED THAT BORROWERS AND HOMEOWNERS ARE PROTECTING THEIR INTERESTS BY PURSUING WHAT SOME WOULD CALL A “STRATEGIC DEFAULT” STRATEGY.
Now, before you exercise these types of strategies, it would be wise to consult with a foreclosure defense lawyer to discuss your options, review your situation, and to analyze whether or not there is any liability in this regard. Whether or not something is immoral or unethical is a different question than whether or not something is illegal and can result in civil liability. Have your case reviewed.
IN THIS MARKETPLACE IT SEEMS THE TIDE IS SHIFTING TO AN EVERY MAN AND EVERY COMPANY FOR THEMSELVES APPROACH REGARDLESS OF THE IMPACT THAT MAY RESULT TO LOCAL NEIGHBORHOODS AND PEOPLE THAT ARE NOT IN DEFUAULT. WHO IS TO BLAME IS A QUESTION OF WHICH CAME FIRST, THE CHICKEN OR THE EGG.
Trying to Leverage Loan Modifications against the Assignee of the loan (who will undoubtedly argue they are not liable for any predatory lending violations committed by the loan originator) as they are a “Holder in Due Course.”
By Steve Vondran, Esq. who is practicing Real Estate, Bankruptcy, and Foreclosure Defense in Arizona and California where he is licensed to practice law. He also holds a real estate broker’s license in both states as well. Prior to becoming an attorney, Mr. Vondran also was a mortgage loan officer which has given him insight into the current financial crises. He can be reached at steve@vondranlaw.com or (877) 276-5084. The following is general legal information only, and is not to be construed as legal advice, or a substitute for legal advice. The following information may not be updated or accurate, and is simply provided as general information and things to think about if you are facing foreclosure in California or Arizona. For specific questions, please contact a foreclosure defense attorney on your area. Please do not post confidential information on my blogs and do not send us confidential information in emails as we cannot guarantee the confidentiality of such. No attorney-client relationship is formed until a retainer agreement is signed.
One of the key things we must figure out as foreclosure defense lawyers is whether or not your loan was “sold-off on the secondary market” and/or “securitized” and sold to investors on wall street (ex. hedge funds, pension funds, foreign investors, insurance companies, etc.).
Common Scenario: Your sub-prime ARM was originated by Countrywide. Countrywide then sells the loan to Wells Fargo and Wells Fargo works either holds the note, and/or sells it off to an investment banker to securitize the loan. Countrywide, as loan originator, knowing it was going to sell off your loan, may not have cared much about any predatory lending issues such as:
(1) Ability to afford the payment after the loan adjusts (ex. option ARM loans / pick-a-pay); See our website discussing Option ARMS / Pick-a-Pay Loans atwww.OptionArmLawyer.com
(2) Inflated appraisals that helped get the loan funded;
