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 caseâ€¦[/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 caseâ€¦[/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.
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.