foreclosure – Page 74 – Parsons Realty

Bank Must Produce The Note?

May 7, 2010 By Leave a Comment

Dear Bill Parsons,

You asked me to look into the rumors that people who are under water in their homes can get out of their debts, stop foreclosures, and even cancel their home mortgage by going to court. Those rumors are all over the Internet and even in seminars right now and all I can tell you to advise the people who come to you is:

Beware of False Hope and Help. Banks Do Not Have to Prove Note in California Foreclosures.

People who have received Notices of Default, Notice of Sale or who are in trouble with their mortgages are being misled by Internet and other promises that they can get out of their mortgage by suing the banks and loan servicers.

Most of the false promises urge people to go to court and to make the bank or their agent produce the actual note upon which the debt is owed.

The common denominator is that the people making these false promises refer to court cases from Ohio or other states, including the federal courts in other states, to convince people to hire them or to attempt to get out of their mortgage by filing a case in California’s state and federal courts to get rid of the mortgage and stop a foreclosure — How? By saying the bank must prove it has the original note or a copy.

The false promisors then claim that the court can void the note or loan if the bank or their agent does not have the note. URGENT: PLEASE READ THE FOLLOWING FROM A JANUARY 2010 CASE IN THE NORTHERN CALIFORNIA FEDERAL COURT: IN CALIFORNIA AND OTHER WESTERN STATES THE BANK OR THEIR AGENT DOES NOT HAVE TO PRODUCE THE ORIGINAL NOTE OR A COPY IN COURT TO ENFORCE A FORECLOSURE. DO NOT PAY ANYBODY MONEY TO TRY TO GET OUT OF YOUR MORTGAGE UNLESS YOU HAVE RESEARCHED ALL THIS AND HAVE CONSULTED WITH ANOTHER ATTORNEY.

William O. Davis, attorney at law, Redding, CA 530-242-1275

Cases to be aware of:

Newbeck v. Washington Mut. Bank
Slip Copy, 2010 WL 291821
N.D.Cal.,2010.
Jan 19, 2010 (Approx. 5 pages)

Even if they alleged tender, the basis on which they appear to seek relief does not support their claim. In California, there is no requirement that a trustee produce the original promissory note prior to a non-judicial foreclosure sale. See, e.g., Pantoja v. Countrywide Home Loans, Inc., 640 F.Supp.2d 1177, 1186 (N.D.Cal.2009); Smith, 2009 WL 1948829, at *3; Neal v. Juarez, 2007 WL 2140640, *8 (S.D.Cal.) (citing R.G. Hamilton Corp. v. Corum, 218 Cal. 92, 94, 97, 21 P.2d 413 (1933); Cal. Trust Co. v. Smead Inv. Co., 6 Cal.App.2d 432, 435, 44 P.2d 624 (1935)). California Civil Code Sections 2924 through 2924k “provide a comprehensive framework for the regulation of a non-judicial foreclosure sale pursuant to a power of sale contained in a deed of trust.” Knapp v. Doherty, 123 Cal.App.4th 76, 86, 20 Cal.Rptr.3d 1 (2004) (quoting Moeller v. Lien, 25 Cal.App.4th 822, 830, 30 Cal.Rptr.2d 777 (1994)). Knapp explains the non-judicial foreclosure process as follows:
Upon default by the trustor [under a deed of trust containing a power of sale], the beneficiary may declare a default and proceed with a nonjudicial foreclosure sale. The foreclosure process is commenced by the recording of a notice of default and election to sell by the trustee. After the notice of default is recorded, the trustee must wait three calendar months before proceeding with the sale. After the 3-month period has elapsed, a notice of sale must be published, posted and mailed 20 days before the sale and recorded 14 days before the sale.

Knapp, 123 Cal.App.4th at 86, 20 Cal.Rptr.3d 1 (citation omitted). “A properly conducted nonjudicial foreclosure sale constitutes a final 13 adjudication of the rights of the borrower and lender.” Id. at 87, 20 Cal.Rptr.3d 1.

Plaintiffs have not pointed to controlling authority to show that this statutory scheme requires production of the original promissory note or deed of trust. Thus, even if they alleged tender, to the extent that they allege irregularities in the foreclosure sale based on Washington Mutual’s failure to produce the original promissory note or deed of trust, they do not state a claim.

Plaintiffs cite various out-of-state cases, which apply non-California law to judicial foreclosure actions. See In re Foreclosure Actions, 2007 WL 4034554 (N.D.Ohio); In re Foreclosure Cases, 2007 WL 3232430 (N.D.Ohio); Landmark Nat’l Bank v. Kessler, 289 Kan. 528, 216 P.3d 158 (2009); U.S. Bank Nat’l Ass’n v. Ibanez, 2009 WL 3297551 (Mass.Land Ct.). Because these cases do not apply California’s non-judicial foreclosure sale statutes, they do not support Plaintiffs’ position.

Accordingly, the Court dismisses Plaintiffs’ claim for “Equitable Set Aside Foreclosure Sale” with leave to amend to allege tender or the ability to offer tender and to plead facts that warrant setting aside the foreclosure sale V. Claim for Declaratory Relief. The Declaratory Judgment Act (DJA) permits a federal court to “declare the rights and other legal relations” of parties to “a case of actual controversy.” 28 U.S.C. § 2201; ee Wickland Oil Terminals v. Asarco, Inc., 792 F.2d 887, 893 (9th Cir.1986). The “actual controversy” requirement of the Declaratory Judgment Act is the same as the “case or controversy” requirement of Article III of the United States Constitution. Am. States Ins. Co. v. Kearns, 15 F.3d 142, 143 (9th Cir.1993). Plaintiffs’ declaratory judgment claim fails because they have not alleged facts showing that there is an actual case or controversy. As noted above, the foreclosure sale has already been completed, which operates as a final adjudication of the rights among the parties. Unless Plaintiffs plead facts that show actionable irregularities in the foreclosure sale or any other reason to believe that the ownership of the property is in genuine dispute, declaratory relief is not necessary. Accordingly, the Court dismisses Plaintiffs’ declaratory judgment claim with leave to amend to plead a cognizable case or controversy.

Fannie Mae Improves “First Look” Program for REO Property Sales

May 4, 2010 By Leave a Comment

First Look program helps owner occupant home buyers get first opportunity over investors to buy Shasta County bank owned (REO) properties.

Fannie Mae’s First Look, initially started in late 2009, is designed to provide owner occupants a “first look” at Fannie Mae homes. Under this policy, Fannie Mae will only consider offers from owner occupants and buyers using public funds during the First Look marketing period which is typically the first 15 days a property is listed. If the property is still for sale after the First Look Marketing period expires, investor offers may be submitted and will be considered. Properties in the First Look marketing period will have a timer with the number of days remaining on the Fannie Mae Home Path property details page.

To start searching for Foreclosures and Bank owned properties in Redding and Shasta County.

Fannie Mae Removes 4 Property Limit For Investors

February 11, 2009 By

Last Friday Fannie Mae announced that they are lifting the rule that limits investors to only four financed properties starting March 1st. Fannie Mae’s policy change will increase the limit of four financed properties to ten. This should get investors active again which will help keep the inventory of foreclosures and short sales down.

Homeowners buying a 5th, 6th, 7th, 8th, 9th or 10th home will need to meet the following standards, as set forth by Fannie Mae

1. 720 credit score

2. 25% downpayment for a 1-unit (30% for a 2-4 unit)

3. No mortgage delinquencies in the last 12 months

4. 6 months of reserves for each investment property

30% of U.S. Homebuyers Expect At Least A 50% Discount When Purchasing Foreclosure Properties.

December 16, 2008 By

Trulia & RealtyTrac released the results of a new study conducted on their behalf by Harris Interactive ® showing notable decreases from their previous survey in the willingness to buy foreclosed properties with three-quarters of respondents expecting a discount of at least 25 percent on a foreclosure purchase. In the previous survey conducted seven months ago, 54 percent of all U.S. adults surveyed said they would consider purchasing a foreclosed home, whereas now 47 percent of U.S. adults would consider purchasing a foreclosure, a drop of seven percentage points in only seven months. These findings are part of a regular series of surveys conducted by Trulia to better understand consumer sentiment around housing issues.

During the last seven months, negative sentiment around buying a foreclosure rose. In April of 2008, 69 percent of U.S. adults originally felt that there were negative aspects to purchasing a foreclosed home (www.trulia.com). In this recent study, conducted during a three-day period in November, 80 percent of U.S. adults are now concerned with negative aspects, citing hidden costs, risky process, home losing value and personal connection with foreclosure as the core concerns. To compensate for perceived risks, consumers expect hefty discounts on foreclosed homes. More than 75 percent of consumers think they should pay at least 25 percent less for a foreclosed home, with three in ten consumers expecting a major discount of at least 50 percent less than a comparable home not in foreclosure.

“What’s significant about our findings is that just as the market is being flooded with more foreclosures, homebuyers are more hesitant to buy them. Misinformation around foreclosures abounds and that’s dangerous for the market and for homebuyers,” said Pete Flint, co-founder and CEO of Trulia. “Information is power and at Trulia we are giving homebuyers the information they need to make a fully informed decision about whether a foreclosed property is a good buy or investment for them.”

“The results of this study are eye-opening and highlight the need for consumer education about foreclosures. Being that the sale of foreclosed properties has been on the rise due to the increased inventory and discounts available on foreclosed homes, it is somewhat counterintuitive — although not totally unexpected — that consumers are more hesitant to purchase a foreclosed property,” said Rick Sharga, senior vice president of RealtyTrac. “We expect that foreclosures will continue to dominate the market in 2009, and well-educated consumers will be able to find great deals on these properties.”

Some Groups Now Less Inclined to Consider Purchase
The results of the most recent Harris Interactive ® survey provide nuanced insight into the shift in confidence for consumers looking to purchase a foreclosed home. In particular:

56 percent of single/never married adults were at least somewhat likely to consider purchasing a foreclosed home, down from 60 % in April.

43 percent of married adults were at least somewhat likely to consider purchasing a foreclosed home, down from 50% in April.

42 percent of divorced/separated/widowed adults were at least somewhat likely to consider purchasing a foreclosed home, down from 50% from April.

Foreclosures Decrease 7% In November

December 11, 2008 By

RealtyTrack released its November 2008 Foreclosure Market Report which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 259,085 U.S. properties during the month, a 7 percent decrease from the previous month but still up 28 percent from November 2007. The report also shows one in every 488 U.S. housing units received a foreclosure filing in November.

“Foreclosure activity in November hit the lowest level we’ve seen since June thanks in part to recently enacted laws that have extended the foreclosure process in some states, along with more aggressive loan modification programs and self-imposed holiday foreclosure moratoriums introduced by some lenders,” said James J. Saccacio, chief executive officer of RealtyTrac. “There are several indications, however, that this lower activity is simply a temporary lull before another foreclosure storm hits in the coming months.

“Delinquencies on loans not yet in the foreclosure process jumped to nearly 7 percent in the third quarter, a record high, according to the Mortgage Bankers Association,” Saccacio continued. ”And more than half of the homeowners who received loan modifications to reduce monthly mortgage payments in the first half of 2008 are already delinquent on their loans again, according to the U.S. Office of Thrift Supervision. Many of these delinquencies could turn into foreclosures next year.”

California, Florida, Michigan post highest foreclosure totals

Foreclosure filings were reported on 60,491 California properties in November, the most of any state and a 6 percent increase from the previous month following two consecutive monthly decreases. The state’s foreclosure activity was up 51 percent from November 2007, and one in every 218 housing units received a foreclosure filing during the month — more than twice the national average.

See the full report at RealtyTracks website.

Recourse Loan or Nonrecourse Loan?

December 10, 2008 By

Knowing whether or not a loan is recourse or nonrecourse debt is critical when borrowers are facing foreclosure. Depending on the type of debt there could be tax consequences for a foreclosure or a short sale.

The main difference in a recourse loan and a nonrecourse loan is the liability. With a nonrecourse loan the lenders only way of recovering their loan is the security, in this case the property. With a recourse loan the lender is able to go after the borrowers assets if they do not receive enough from the secured asset to pay the loan off in full.

Whether or not a loan is a nonrecourse or recourse depends on the type of loan.

Notes secured by real estate are nonrecourse when the note is:

· The original purchase money loan on an owner occupied one-to-four unit residential property;

· A seller carry back note secured by the real estate sold; or

· A note containing an exculpatory clause, relieving the borrower of liability.

Examples of recourse loans are refinances of existing mortgages, home improvement loans, equity lines of credit, and loans, other than seller financing, securing a debt for purchase of property that is not an owner-occupied one-to-four unit property.

With recourse debt the lender is not limited to taking the property back and the borrower may be personally liable on the debt.

Here is a handout from the California Association of REALTOR’s that explains more about recourse and nonrecourse debt.

https://www.parsonsrealty.com/parsons_realty/taxes/car_faq.pdf