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Homeowners: The Courtroom is Your Battlefield

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My recent book, Mortgage Wars: How You Can Fight Fraud and Reverse Foreclosure predicted that those homeowners victimized by predatory lenders would fight back and win the war against foreclosure. Now, it is happening.

The opportunity for a complete transformation of the global financial services industry is upon us. The halting of recent foreclosures due to sloppy paperwork is just the tip of the iceberg. Ultimately, it will be discovered that the holders of mortgage backed securities have no legal link to the mortgages that secured them due to more sloppy paperwork. This will result in an avalanche of legal proceedings from both homeowners and investors.

If you live in a state that requires a judicial procedure to authorize a foreclosure, you are relatively home free. You must fight back and win. If you have received a Notice of Default or have a scheduled foreclosure sales date, it is imperative that you purchase a mortgage audit to identify predatory and fraudulent practices as well as an analysis of the securitization of your loan.

Your audit findings will include an examination of improper fees and relationships; fraud in the solicitation, origination, closing and servicing of your loan; the parties involved in the securitization of your loan and who actually owns your loan. There is an extremely high probability that the lender initiating the foreclosure cannot do so legally. Based on recent findings, many judges will stop the lender in its tracks if there is suspicion that the bank cooked the books.

Once you have your audit findings, you can hire an attorney to write a legal complaint for various causes of action, including wrongful foreclosure and quiet title. During the discovery process, your attorney will challenge your lender to prove it has standing to foreclose. Typically at this point, your lender will want to settle with you rather than face the prospect of the note being dismissed by the judge and you being awarded your home free and clear.

If you live in a non-judicial state, your journey is more complex and risky, but still worth the fight. You will also need to obtain an audit and file a complaint, but you will need a Temporary Restraining Order to stop the foreclosure sale. Depending on the skill of your attorney and the facts of your audit, you will be successful in obtaining a TRO. After that, you will have to obtain a Preliminary Injunction and post a bond until the trial.

Again, the discovery process is the best weapon in your mortgage war. Your lender has no choice but to disclose who actually owns your loan or it will be compelled to do so by the judge. The discovery process will also attack the steps in the foreclosure process to determine if they were done correctly. They rarely are, according to Ohio foreclosure offense/defense attorney, Dan McGookey.

If you are planning to file bankruptcy, or are already in bankruptcy, your opportunity to challenge your lender comes in the form of an "adversary proceeding." You can also oppose your lender's claim as a secured creditor. Both of these actions require an bankruptcy attorney experienced in predatory lending practices and securitization. Experts like Max Gardener and Lewis Landau have won these cases and understand how to launch this kind of technical battle.

When your lender comes calling for a settlement, be sure to do your homework. Your lender will look for the highest appraisals possible to justify a higher settlement. It is important for you to obtain multiple appraisals by local appraisers who understand the true market dynamics of your neighborhood and city. You will also have to provide your own realtor Broker Price Opinions to challenge the diminishing value of your home. Experts like Dennis Sasserman can provide you the model the banks use to determining the "net foreclosure value" of your home. Sasserman, who is also a bank consultant, does a thorough job of analyzing the market, the foreclosure value and the cash out value of your home. There are plenty of private lenders around who can lend you the money to buy out the bank's note at a discount. Contact me and I will put you in touch with them. They will often provide new funding with the interest pre-paid for one year, giving you time to clean up credit problems and find conventional financing.

If you have already been foreclosed, do not give up or move out! Hire an attorney to represent you in an unlawful detainer action where these issues can be challenged and a wrongful foreclosure action can be brought about. Forget cash for keys! Save your home!

If you are, sadly, one of the sixteen million Americans already thrown out of your precious home, it is still not too late to fight your mortgage war. Have your foreclosure and eviction evaluated by an attorney immediately. The American Bar Association has changed the rules for retaining attorneys so that you can bring in an attorney for specific needs, such as a courtroom appearance or to prepare a legal document that you will file as a plaintiff in pro per.

My book, Mortgage Wars, is now available as an e-book, so there is no excuse for you not to educate yourself and become a mortgage warrior. It is only by creating a movement that we as homeowners can transform the financial services industry and ensure our children will never be victims of predatory lenders. Go to www.yourmortgagewar.com to order it.

Recent decisions by the too-big-to-fail banks to temporarily halt foreclosures is the first sign that we will win the war. But the battle is just beginning. And this battle must be fought in a court of law.

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