Standing in a Foreclosure Action

I have a mortgage that went into foreclosure,  i have filed a chapter 13,  since I learned that my mortgage has been sold to another lender, is i true that the old mortgage company cannot proceed with the foreclosure because it does not own the mortgage any longer.   The new company would have to file a new foreclosure proceeding if I fall behind on my mortgage. Is this true?  Do i still need to be in Chapter 13??

Thanks,
Larry

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Hello Larry,

If your “mortgage has been sold to another lender” meaning it transferred its interest in the note, then it would no longer possess the right to foreclose; however, you were probably notified of a change in servicing and not ownership.  The notice you received was probably to comply with RESPA Section 2605(b)(1) and (2)(A) which requires that: “Each servicer of any federally related mortgage loan shall notify the borrower in writing of any assignment, sale, or transfer of the servicing of the loan to any other person.” And such notice “shall be made to the borrower not less than 15 days before the effective date of transfer of the servicing of the mortgage loan”.

One tactic in foreclosure defense is to challenge the “lost note affidavit”.  Actually, this isn’t really new.  In Florida in 2005 MERS standing to foreclosure was successfully challenged.  All that means is that it is delayed until the right party in interest can bring the foreclosure action.  And once that happens, the house goes back to the bank and it’s gone.

Larry, you’re in a Chapter 13.  Did you know that with on-time payments you may qualify for an FHA refinance?  I’d focus on that strategy.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.

(source=fdic.gov/regulations/laws/rules/6500-2530.html)