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Can courts waive off your mortgage debts? Well, yes, they can. Two recent legal decisions - one in a New York and another one in a Tampa, Florida have canceled homeowner's entire mortgage as the lender was unable to provide the mortgage paperwork to the court. Let's check out what happened in both the cases:

[b:566459a58e]The New York case…[/b:566459a58e]
A New York resident was facing foreclosure this September. The borrower requested for a copy of the mortgage deed on his home. The lender, PHH Mortgage, was unable to provide the required papers to the court. Thus, the court waived off the entire mortgage debt. Do you want to know the amount waived off? It's $461,263.

[b:566459a58e]The Florida case…[/b:566459a58e]
A Tampa based woman, facing foreclosure, requested her lender to provide her with the original mortgage paperwork. However, to her delight, she found out that the lender didn't have the deed. Thus, the foreclosure court stopped the proceedings and has threatened to cancel the entire debt if the lender couldn't produce the paperwork in the court.

[size=9:566459a58e](Source: "www.mainstreet.com/article/moneyinvesting/real-estate/new-way-fight-fore...)[/size:566459a58e]
These decisions by the foreclosure courts have left the mortgage lenders in shivers.

In 2008, the University of Iowa has concluded in a study that mortgage companies have the habit of misplacing important documents related to mortgage. The most surprising fact is that, it has been found that 40% of the time, the original note was misplaced by the lender.

Though it's not easy, but homeowners can go ahead and ask their lenders to produce the required paperwork if they are facing foreclosure. However, nothing's guaranteed and they would require the help of a good real estate lawyer.

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Though the incidents go in favor of the mortgage borrowers who will be better off in this period of real estate crisis, the lenders would be in a bad state. Moreover, I feel such decisions would badly affect the mortgage market which is showing signs of recovery. I hope a bill would be passed in the future wherein the terms and conditions of waiving off the mortgage would be mentioned clearly. Thus, it would help both the borrowers and lenders.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hey Sara,

Another incident of waiving off mortgage by the court took place with an Long Island couple. There property had gone into foreclosure. However, the Suffolk Judge Jeffrey Spinner, gave them a nice Thanksgiving present and wiped out $525,000 in mortgage payments as demanded by their bank. The court had declared the foreclosure decision of the bank as "harsh, repugnant, shocking and repulsive" act.

The borrowers, an aged couple, had been paying off only interest on their mortgage. Thus, they had no equity in the property. They had requested the lender to restructure their loan. However, as per the borrowers, the lender did not co-operate with them.

The lender, on the other hand, has claimed that they would appeal against the judgment at the higher court and try to overturn it. The bank has also claimed that they were extremely co-operative with the consumers and have modified loans through the Obama administration's Home Affordable Modification Program and other loan modification initiatives.

(source - foxnews.com/story/0,2933,577105,00.html )

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

I agree with the fact that it's the lender's responsibility to maintain the documents related to the borrower's loan. However, it's quite shocking that the court would forgive the debts. I don't think this would help the mortgage market. Rather, such decisions can further hamper the recovery of the real estate market from the crisis that it's going through.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

riseabove's picture
riseabove | Joined: November 9, 2009 12:58 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

If the lender is foolish enough to not be able to prove their legal debt, then yes they deserve to lose their right to recover it, but come on you have to wionder how often this will work. surely if it';s widespread enough to make a difference to many people it'll just start another mortgage domino effect?

Banks not being able to recover debt means they lose money, and on a large enough scale it's not too different to what started the credit crunch to start with.

Great for a few people, potentially catastrophic for the wider community if it's widespread.

That said, I'd love it if my bank just lost my mortgage - instant end to my financial worries for the foreseable future- like winning the lottery really.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i doubt it's a matter of "how often this will work," quite frankly. it does, of course, make sense, for a borrower to use a defense such as asking the mortgagee to produce the documentation surrounding the mortgage.

okay...rise...being selfish here? what's good for the goose is not good for the gander, or something like that? just kidding here, of course.

i agree that this isn't going to be rampant in the country - few lenders are inefficient in such a manner. but i wonder why copies of the documents that are recorded in the land records in various locales wouldn't be sufficient to make a judge happy. they'd be easy to obtain and deliver to the court on a timely basis and would presumably save face as well as plenty of dollars for the lenders.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

UMAR_MUGHAL76's picture
UMAR_MUGHAL76 | Joined: October 20, 2009 12:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

HI
t';s widespread enough to make a difference to many people it'll just start another mortgage domino effect?

Banks not being able to recover debt means they lose money, and on a large enough scale it's not too different to what started the credit crunch to start with.

Great for a few people, potentially catastrophic for the wider community if it's widespread.

That said, I'd love it if my bank just lost my mortgage - instant end to my financial worries for the foreseable future- like winning the lottery really.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

umar, the copying of someone else's post to pretend it's yours is downright ridiculous and rather rude.

i hope you have a little more sense than that in the future.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I recently did a refi and to date the new mortgager has not wired monies to the settlement compnay. Now the servicing sid eof the new mortgage has accepted the first payment with out nothing being done close on the loan. Settlement company sent me a letter saying to to continue paying old mortgage becuase they feel and have cancled nor did not file the new mortgage. My old mortgage lender now has me 2 months late on mrtgage payments. What a mess! Any clues to correct this issue fast.

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

attorneys will be falling all over themselves to hear of your quandary. have you contacted any? have you contacted the regulatory agency charged with oversight of this new lender? you need to act, and act fast. go both routes, if necessary. this is a travesty.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I am in need of a lawyer. How do I ask to take this case with out paying a fortune up front.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

you need to shop around, quite frankly. i think you've already wasted time, and your next opportunity to find one is next week now.

starting right now, you ought to be checking with friends, loved ones, clergy, etc. - whoever you know and may have trust in - to recommend to you a good lawyer who might be willing to work with and for you. presumably, in a case such as you describe, a lawyer might ask for an upfront fee that will later be offset by an award by the court.

a fortune? i suppose that's highly individualized - my fortune is perhaps more or less than yours. you'll have to be the judge of that. but they'll talk to you for free, so get on the horn and start asking around.

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csorrell211's picture
csorrell211 | Joined: February 2, 2010 08:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi guys. For all the best info on Florida mortgages please go to -
"http://www.flmortgage.us"

[size=9:8d204e1746][color=Red:8d204e1746][Link deactivated as per forum rules. Thanks.][/color:8d204e1746][/size:8d204e1746]

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

having very quickly previewed this florida site, i have to say i cannot recommend it at this time to anyone. the author appears to be located in the United Kingdom (across the Atlantic Ocean, in case you didn't do well in geography), and that leads one to wonder just how much expertise there might be lending itself to a site concerning mortgages and real estate in the State of Florida.

before relying on any specific claims on that site, do your homework.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My question is this I live in Las Vegas and as everyone knows what the market is like here. My husband is retired and I'm on disability. Our home that we purchased 3 years ago is worth less than half of what we owe on it. We have our retirement fund and our S.S. payments and I have a disability payment that will stop in a couple of years. Our house payment is 46% of our income now and when my disability stops it will be much worse. We don't want to use our life saving to try and keep our house when it is only a matter of time that we will loose it because of our income going down. There is no chance of my husband who is 64, getting even a part time job here in Vegas because of the high unemployment. What do you think our options are. Please help

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi grannie,

A query similar to yours has been answered in the given page:
http://www.mortgagefit.com/problems/underwaterhome-ssincome.html

Take a look at it. Hope it helps you.

Thanks

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

highcaliber1956's picture
highcaliber1956 | Joined: July 31, 2010 07:01 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

It is really great that many courts are taking the financial crisis into consideration. This is an unfortunate situation when someone's home becomes involved in a situation as simple as either keeping it or losing it. I believe that many issues must be looked at here. The responsibility of the mortgage foreclosure still falls on the borrower. Maybe a reexamination of spending habits and credit card use may be required. I am quite sure the bankruptcy court takes into consideration if the home can really afford the home before allowing the people to stay. In most cases unsecured credit and auto loans take priority over mortgage payments in time of financial crisis.

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keilysmith's picture
keilysmith | Joined: August 29, 2010 10:19 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

The main responsibility for the foreclosure is still the borrower. Perhaps an examination of patterns of consumption and credit cards can be used required. I am convinced that the bankruptcy court takes into account only if the home can really afford the house before allowing people to stay.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

foreclosureus1's picture
foreclosureus1 | Joined: November 24, 2010 03:42 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Millions of struggling homeowners have benefited with the Obama home [url=http://www.mortgagefit.com/refinance.html]refinance[/url] program and prevented their homes from being foreclosed. By qualifying for government assistance with the $ 75 billion Obama stimulus plan, borrowers can get 4.5 % interest rate home refinance loans that are sustainable in the long run and thus, save their home as well as money. But to derive the benefits of mortgage refinancing, you could be required to meet few important requirements.

[color=Red:7a280429db][URL Deleted as per forum rules. Thanks][/color:7a280429db]

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

For my money, good advice is far more beneficial than platitudinous deliveries of well-known data.

How, when, where, why...these are the basics of the issue - not that "a few important requirements" must be met for a refinance.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

bankrupcyus's picture
bankrupcyus | Joined: July 8, 2010 09:26 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

According to the Making Home Affordable manual for servicers if you file for bankruptcy while you are on the 3 month trial payment plan, the servicer cannot deny you a permanent modification on the basis of the bankruptcy filing.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

s_am_inc's picture
s_am_inc | Joined: April 29, 2011 09:27 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Franco, I am a foreclosure specialist. if you need let me know and I can get you in contact with someone who can help you.

[color=Red:e399cb4787][URL Deleted as per forum rules. Thanks][/color:e399cb4787]

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I recommend that anyone facing a foreclosure action contact a HUD-approved consultant and eliminate consideration of any of the "foreclosure specialists" who advertise here and elsewhere. Most will ask for upfront funds in excess of what you can afford to lose, and the end result will be that you end up losing your home to foreclosure. In other words, they dont' do as promised and you end up on the short end of the stick.

[b:5ada315eaf]BUYER BEWARE![/b:5ada315eaf]

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

alvina.john's picture
alvina.john | Joined: December 25, 2011 01:03 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

you should be aware with the legal terminology while entering any negotiation or making contract of any type otherwise you have nothing to get any support from anywhere!

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:19 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Okay, Alvina.

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chiranjeevi.7thfoldmedia's picture
chiranjeevi.7th... | Joined: February 22, 2012 03:53 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

try to get more knowledge about it and clarify all your legal doubts

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saliviyajonathan1's picture
saliviyajonathan1 | Joined: September 11, 2012 01:27 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

It is right that when a person needs financial help or want to apply for mortgage then he have to face several formalities. Every company has different rules and terms that a person must consider to get mortgage.

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