Free house?

Probably not, but here is my story:
I bought my home in April of 2007 for about $240,000. I was intending to live there once I married my fiance. Together, we were making $110,000 a year, and we could easily afford the $1800 a month payments. The problem was that the bottom fell out a year later.

Being an employee of local government, my income is based upon an employer who derives income from local property taxes. Since property values were falling like a stone, our hours were being cut. By September of 2009, we were making $20,000 a year less than we were when we bought the house. Worse, the house was now worth less than half of what it was when we bought it. To make matters worse, my wife’s student loans came due, and she lost her job a month later. Stuck with a falling paycheck and a depreciating asset, we made the decision to declare bankruptcy. During the bankruptcy, my mortgage bank provided copies of my promissory note and mortgage, stated that they were the owner of the mortgage and the note, and asked the judge for permission to begin foreclosing on the house. This is where things get interesting.

I had intended on returning the house to the bank as soon as they foreclosed on it. I figured that would take six months, at the most. They filed a foreclosure suit against me, and provided me with copies of the note and mortgage as proof to the court that they were entitled to foreclose on the house. The only problem? The note in the foreclosure was a different piece of paper than the one they gave the bankruptcy court. It turns out that my note and mortgage were sold to Fannie Mae in 2007, and my mortgage bank was just servicing the loan- that is, taking my payments and forwarding them on. Who knows which mortgage company Fannie Mae sold it to after that, no one knows. In other words, they committed perjury. (For my Republican/Conservative readers: Remember that perjury was considered to be enough of a crime to impeach President Clinton, so don’t lecture me on how requiring that a mortgager not fabricate things in court is just a “hyper technical” legal loophole.)

I sued my mortgage bank, and they have agreed to settle out of court. It looks like they are going to write me a large check. The rub here is that no one knows who owns the rights to foreclose on my home. Until someone can prove that they are the one with the right to foreclose, I live here for free. We are at 15 months and counting.

2 replies on “Free house?”

I have no sympathy for "them" at all. They made the rules, but apparently weren't able to follow them.

I hope that either the check from the bank is enough to cover the principal of the mortgage or that, as seems likely, they can't figure out who owns the mortgage. That will entail some work to straighten out the title, but with luck you'll end up with the house and no payments.

One can hope.

I'm in the UK and things are different here but economically it has been bad here too. I hope things work our for you and your family. It's a worrying time.

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