Feb 06

Wells Fargo v. Sandra A. Ford is a NJ case that started as a pro se defense to a foreclosure. It ends with Wells Fargo getting spanked by the NJ court of Appeals in what will be a published decision..  At appeal the defendant was represented by Legal Services of NJ, which is similar to Legal Action of WI.

My great interest in foreclose defense cases is twofold.

First I see some of these cases holding the potential of unraveling the entire real estate market by creating hundreds of thousands of “free” homes across the nation. I fear this will cause a second and more dramatic drop in housing prices as once the mortgages are wiped people can sell for practically nothing and make a profit.

Secondly, on a personal level, absent this new legal trend I feel that we are nearing the time to buy again in the two markets I’m interested in  (Milwaukee and Miami)  I am very concerned that these cases could proceed to a point that properties previously foreclosed upon could revert to the original owner if cases are allowed to be reopened on the basis of fraud on Court by the banks and/or MERS.  Wisconsin §806.07(1)(c) or 806.07(1)(g) would appear to allow cases to be reopened if there were to be a major Wisconsin, Florida or Federal ruling on this in the future.  (Florida is one of the states that has a high number of foreclosure cases being lost by the banks)

While title insurance would should cover the cost of the property, would you be able to recover the cost of repairs and improvements?

6 Responses to “Unsettling new trend in Foreclosure cases”

  1. […] This post was mentioned on Twitter by Sharon4Anderson, Tim Ballering. Tim Ballering said: Unsettling new trend in Foreclosure cases #landlording #propertymanagement #realestate http://bit.ly/h9YPGK […]

  2. DC says:

    Not sure if I understand your point. I agree that the real estate market could be drasticallyaffected but it’s not the homeowners fault entirely. If the banks broke the law and the result is a homeowner getting their homes for free, so be it. I think its naive to believe the banks are losing money since it appears the securitization process was abused. The real suckers are the investors who bought the banks offerings.

    • Tim Ballering says:

      I’m not suggesting it was the homeowners’ fault. I think most of us can agree that the government, the lenders as well as some homeowners, caused this mess.

      Rather I am concerned what will happen to the market as mortgages are invalidated, thereby causing further dramatic price reductions. The other concern is what happens when you buy a previously foreclosed upon home. If the courts subsequently allow the foreclosure to be reopened due to fraud then you could lose all improvements you’ve made after purchase.

  3. DC says:

    I understand yor concern and it is indeed a valid one which I have had when discusing this with a friend. There is only one way to fix it. Inforce the law, that is if the lender committed fraud, or broke the law then the remedies should apply, for example the agreements may be void. That would clear title on the homes and make homes available for sale or financing. It would put the money back into the peoples hands instead of the banks. Will some banks suffer, yes, will some banks close, yes, but thats what happens when bad decisions are made in any business. Maybe these banks could sue their laywers who advised them to make these decisions, then we would have fewer lawyers, which isn’t a bad idea. Someone is going to suffer the consequenses, if the banks are allowed to continue these actions homes will be vacant and titles will remain clouded which certainly won’t help the ecomony.

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