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Tuesday, January 30, 2007

Joyce Powell could have had some REAL issues 

Now that my Google account provides me access to my blogs, rather than someone else's blog (Go Bears!), I can continue the discussion that I started here.

And, for the record, there are notification requirements for a Notice of Default, which you can find right in the good ol' U.S. Code.

TITLE 12 > CHAPTER 38 > § 3708

§ 3708. Service of notice of default and foreclosure sale


(1) The notice of default and foreclosure sale, together with the designation required by section 3704 of this title, shall be sent by certified or registered mail, postage prepaid and return receipt requested...

So I'm forced to conclude that Joyce Powell got a certified or registered Notice of Default, then got a certified or registered Notice of Sale, and still didn't realize the significance of the documents.

In my Yahoo post, I done said:

[T]he wonderful wonderful mortgage company that held the mortgage (presumably the same Amerivision Mortgage Corporation) sent a Notice of Default, and then sent a Notice of Sale, but never tried to make personal contact with the mortgage holder.

While this may be true, Joyce Powell is probably lucky, since there are some people that specifically contact mortgage holders who are in Notice of Default.

I'll start by quoting the side of these people - the foreclosure specialists. First off, what is a foreclosure specialist?

I have bought and sold real estate for 7 years, often dealing with people in foreclosure who wanted nothing more than some cash to move on with and for me to keep the foreclosure off of their credit report.

(We'll get to a differing view of foreclosure specialists a little later.)

Now this particular foreclosure specialist feels victimized:

I’m so tired of hearing about the big bad investors. Do you people realize that if we weren’t here to stop the foreclosures that your property values would suffer. When the bank takes the property at foreclosure, they usally only bid what is owed on the property, and if that is considerably less than the value, you now have a low comp in your neighborhood.... let that happen a few times and see what happens to your property values.

As an investor who does preforeclosure homes, I have always lived by a mantra that “good things happen to bad people,” however I also know that denial is more than a river in Egypt and that people in foreclosure will deny that they asked for help once thier problem is solved.

For example, I once got a phone call from a woman in foreclosure. When I went to see the house, I found some very obvious sinkhole damage. I told her that I could not buy the house outright because the problem was going to have to be addressed by her insurance company first. I told her that I would pay to reinstate her loan, get her some money, make her payments until her insurance company addressed the problem, and through a power of attorney would see her claim through for her.

I gave the woman $2,500, paid $8,000 to her lender to reinstate her loan, and made the payments on her house for a year, when suddenly her payment increased due to an increase in taxes and insurance, and her lender never notified me and put the house back into foreclosure. The woman called me screaming at me and told me that she spoke to a lawyer and that it was still her house. I explained to her that I was making the payments, and she would hear none of it. She broke into the house, and stole the appliances. While filing a police report, a neighbor came over and told us that it was in fact the former owner who did it. When the police went to her house and explained that she did not own the house, and that she did commit a crime, she called me and was apologetic and told me that she understood that I owned the house and that she was sorry. When the claim finally settled, I sent in a check to her mortgage company to pay off the loan entirely and after 4 months, they still have refused to do it, costing me more money to hire an attorney to fight them. And this “poor” homeowner is nowhere to be found.

Well, while Vanessa Blais may be honest, some foreclosure specialists don't provide their clients with all the facts. In a court case, a plaintiff alleged the following:

On or about December 13, 1978, plaintiff defaulted on a note in the amount of $3,500 secured by a third deed of trust to the subject property. Plaintiff's house was also encumbered by a note dated October 30, 1967, to Farmers Home Insurance secured by a first deed of trust and a note dated June 12, 1969, to Farmers Administration secured by a second deed of trust. The value of the property in June 1982 was approximately $50,000, and plaintiff's equity therein was approximately $45,000.

On or about August 1, 1979, a trust deed sale was scheduled for plaintiff's residence. Immediately thereafter, plaintiff was contacted orally by telephone by defendant Craft. Craft represented to plaintiff that he was a foreclosure specialist, that plaintiff would lose her house in foreclosure without his assistance, that he wanted to help plaintiff keep her house, that he would bring the payments on the notes secured by the third deed of trust current provided plaintiff kept all payments current on the notes secured by the first and second deeds of trust and repaid defendant Craft all sums advanced by him together with interest.

On or about August 17, 1979, defendant Craft arranged at his own expense to have plaintiff flown to the Oakland Airport where plaintiff met Craft and defendant Barton. While at the Oakland Airport, Craft and Barton presented certain written documents to plaintiff for signature. At the time the documents were presented to plaintiff, plaintiff was advised by defendants Craft and Barton that the papers presented to her were a loan agreement under which Craft and Barton agreed to pay off the note secured by a third deed of trust, thereby avoiding a trust deed sale of plaintiff's residence. Defendants further advised plaintiff that she would be able to retain title to {Page 164 Cal.App.3d 802} and possession of her house, that she would be obligated to pay defendants together with interest at such time as she became financially able to do so, that she would continue to make all payments on the note secured by the first and second deeds of trust to the residence, that it was absolutely essential that the loan transaction be consummated immediately, and that there was no time for plaintiff to either read the documents or seek advice of counsel. Plaintiff then signed the documents.

In fact, the documents presented to plaintiff consisted of a grant deed conveying plaintiff's property to defendant Barton, escrow instructions to Founder's Title Company for said conveyance, and a release for Founder's Title Company of Alameda which purported to absolve that company of any liability for that party's failure to notify the Farmers Home Administration of said conveyance. The legal effect of said instruments was to transfer title to the subject premises and all of plaintiff's equity to defendant Craft for a total consideration of approximately $100.

So we have two views of foreclosure specialists. What does the California Department of Real Estate say?

"Foreclosure consultants" or "foreclosure specialists" often contact homeowners who have received a notice of default. They may claim they can prevent the foreclosure, and may even suggest that you transfer title to your home to them. Persons who contact you and claim they can prevent a foreclosure should be questioned carefully to determine how they believe that this can be accomplished.

And the Sheriff of Volusia County, Florida isn't any more complimentary:

Residents facing the threat of losing a home quite often are flooded with overtures from individuals or companies offering to help. Now, there's absolutely nothing wrong with spending money in exchange for a worthwhile service. But in many cases, the services offered to people in foreclosure are nothing more than worthless scams looking to exploit your hardship. Instead of helping, they will only compound your financial problems....

They may promise to take care of your problems by offering to negotiate with your mortgage lender in exchange for a fee. They may offer to obtain refinancing for you. Sometimes they ask you to make your mortgage payments directly to the scam operator. They may even ask you to hand over your property deed and then offer to lease the residence back to you so you can stay in your home.

Any of these pitches should send up warning flags! And here's the reason why: Instead of contacting your lender or refinancing your loan, scam operators will pocket all of the money that you pay to them. They may file a bankruptcy case in your name to give the elusion that they are taking action to clear up your problems. But this is only a temporary device, since bankruptcy doesn't stop foreclosure, but merely puts it on hold. When the scam artist walks away after the filing, the bankruptcy petition will be dismissed and the foreclosure proceeding will continue. If this happens, you could end up losing your home as well as any money paid to the scam operator.

Many companies, some reputable and some not, will offer to negotiate or consolidate your debt to help you out of a mortgage jam. The catch is that you will be asked to pre-pay for these services. The truth is that in many cases, the services don't offer anything that you can't do on your own. And there are many non-profit debt counseling agencies that will provide the same services free of charge.

If you can't pay your mortgage, the best advice is to contact the mortgage lender or a lawyer for help.


Favorite U.S. president - Third favorite Finnish figure skater

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