(BREAKING NEWS, OP-ED) — The author posits the following for your educational consideration in light of the current uptick in foreclosures and this article should not be regarded as legal advice.
Here’s a brief scenario for homeowners to ponder …
It’s 2009. A Tampa homeowner was among thousands served by a process server with a Summons and Complaint to Foreclose because of an alleged default on their mortgage.
Like most homeowners at the time, when served, they freaked out. They freaked out, so much so, that 97% of them decided to pack up their belongings and move away.
Like most homeowners at the time, before the foreclosure even took place, more than likely, they couldn’t afford to pay their hazard insurance, which is mandatory under their mortgages and deeds of trust. That’s usually the first thing that gets defaulted on BEFORE the mortgage payments go into arrears. The next thing that goes into default is the property taxes, despite the fact most mortgage loans are escrowed. But what if they’re not?
So the Tampa homeowner gives up in despair, with no hazard insurance in place and moves out, leaving the swimming pool uncovered and the backyard fence unlocked.
A couple moves in next door and as they’re moving load after load into their “new home”, they notice their 2-year-old toddler has wandered off. Where do you think they found him?
Floating face down in the neighbor’s pool … unable to be revived by paramedics. Nice first day in their new home, huh?
THIS REALLY HAPPENED IN TAMPA, FLORIDA
The couple discovered that the bank was foreclosing on the property and sued the bank for negligence. The bank balked, saying that the title to the home was not in the bank’s name but in the name of the homeowner because the foreclosure was not completed and the bank wasn’t in possession of the home.
So who’s liable? The Tampa homeowner?
For further clarification, check out this newly-released, 10-page case: Apex Mtg Corp v Great Northern Ins Co et al, 7th App Cir No 19-2525 (Aug 24, 2020)
This will help you understand how banks think. This will also help any homeowner under fire in a foreclosure setting to understand what unintended consequences are.
Even if your name is still on title, there can be unintended consequences if anything happens on your property AFTER you vacate it.
Next, look at Page 5 in the case and see how the 7th U.S. Circuit Court of Appeals viewed “actual possession” and “default” as to their stated terminology.
Here again, we look at the definitions in play as the means for who’s liable and who’s not.
Who’s in possession?
The entire schematic in this case falls upon the party in control of the contract (mortgage or deed of trust). This is why this case is very self-explanatory, no matter how many times you read it. It contains some great nuggets that may help in keeping homeowners in foreclosure trouble out of hot water. While the author of this post submits that the responsible thing for any vacating homeowner is to “secure” everything on their property to prevent such dangers, what sense does it make putting all that extra money into a place you’re going to end up moving out of?
As long as you are in possession, this author suggests you examine the chain of title for flaws and suspicious assignments because those assignments will generally be filed just prior to the alleged lender attempting foreclosure commences the process against you. Fighting those suspect documents is clearly a way to stay in your home for up to two years, which is why this author has materials available on the Clouded Titles website. No pressure.
If you have lots of equity in your home, the banks want the house and they’ll fight you for it, which is why this author likes the idea of selling and downsizing while the benefits of recovering any equity are within reach. This gives you more options. The author only suggests fighting if the bank is moving too quickly and you need time to market and sell your home … or stay in it until you’ve formulated a PLAN B. Staying in the home and fighting the bank for years on end only adds to the stress on your body’s immune system, which by now, you’ve probably figured factors right into why your chances for getting COVID-19 might be higher due to a weakened immune system.
Having a weak immune system makes you more “liable” to succumb to more than just the common cod. This author knows because he’s seen it first hand.
Stay the course. Fight if you have to. Always have a PLAN B … and don’t be afraid to do your due diligence to avoid unintended consequences.