Make Sure the Company Pushing for Foreclosure Actually Owns Your Mortgage

If you’re like most people, you likely think the above subtitle, Make Sure the Company Pushing for Foreclosure Actually Owns Your Mortgage, sounds downright silly, ridiculous, even.  But, it’s not; during the current housing crisis, banks and mortgage companies have repeatedly attempted to foreclose on homes for which they don’t own the mortgage.

For example, Bank of America sought foreclosure on a home that had no mortgage at all; the couple who owned the home had paid their mortgage off entirely and had never even had a mortgage through Bank of America.  Most people find Bank of America’s actions and incompetence quite shocking, as they should.

As in the Bank of America case, mortgage paperwork is OFTEN a mess and it is OFTEN unclear, during bankruptcy or foreclosure proceedings.  If you face either foreclosure or bankruptcy, consult with a qualified bankruptcy attorney to make sure you are treated fairly and all of appropriate paperwork is in order.

A recent 6^th Circuit (Ohio is part of the 6^th Circuit) case, remanded the case back to the lower bankruptcy court, with an order to determine which companies actually hold a secured mortgage interest on the home.  This case is called “In re Collins.”

In Collins, the Bankruptcy Appellate Panel of the Sixth U.S. Circuit Court of Appeals reversed a lower bankruptcy court that declined to address issue of which companies owned the mortgage on the real property owned by Elizabeth Collins, bankruptcy petitioner. The bankruptcy trustee had filed for a declaratory judgment seeking to determine the validity, extent and priority of loans claimed by Wilmington Finance, GMAC Mortgage, Litton Loan Servicing, and Bank of New York.

The lower bankruptcy court, rightly, dismissed Wilmington Finance because it was, specifically, found not to have a mortgage interest as they had sold it years ago.  GMAC Mortgage had no proof of mortgage ownership and it was not clear if its interest had ever been perfected.

The 6^th Circuit court mandated the lower bankruptcy court to clear up the GMAC Mortgage ownership claim and determine whether either of the other two lenders have an interest in the real property at issue (Bank of New York and Litton Loan Servicing.)  Ownership was unclear as the mortgage, apparently, was transferred multiple times.

This paperwork mess, improperly attempting to foreclose on a home, or making a claim in bankruptcy, happen all of the time.  Don’t let it happen to you.  Bankruptcy attorneys represent clients facing foreclosure and bankruptcy so that they don’t get bullied by banks and mortgages companies, especially those with no valid claim.  Your next step is to contact our office for a consultation; you can reach us at (513) 793-6555, or by email thomasjr@geygan.com.