Suspect a fraudulent foreclosure? I heard this term for the first time last week. Someone told me they had one filed against them. I had to ask for an explanation. Apparently this is the common term now being used for the bank walk-away.
A foreclosure filing is not a fraud just because the bank did not follow through with the Sheriff Sale. The word “sham” does come to mind though. In this day of underwater home loans it is far too common for people to fall behind on their payments. This is where you enter your own personal hell dealing with your mortgage company. The only payment they will accept is the one that pays the current house payment, all the past due payments and the penalty fees in full. If you can’t do that in about 4 months then they use the dreaded F word. Not that one, I mean Foreclosure, but maybe both of them apply.
That is your greatest fear if you have a family and this is your home. They won’t work with you at all, then they won’t talk to you because they sent your file on to their foreclosure counsel. You try to call the attorney. He won’t talk either. Doesn’t anyone understand, you want to keep your house. This is where you live. You need to talk to someone to stop this madness.
Next thing you know, mom calls to tell you that a civil lawsuit was filed against you. She saw it in the paper. Now embarrassment added to losing your house. It takes months, still no one talks to you, and a sheriff sale is about to happen. You give up and move out.
Then, years later you hear from the city building department that you are being prosecuted for not maintaining the foreclosed home. What? That was foreclosed on. Yes and no. Was it a fraudulent foreclosure? This is what happened:
- The bank gets an order of sale
- The county sheriff posts notice of sale in the paper and actually has a sale
- The bank buys back the property
- No confirmation of sale is filed
- The foreclosure case is ultimately dismissed
- You are left with real estate with a lien but no mortgage to pay
Sometimes the bank will even cancel the entire sale days before it is scheduled. The mistake most people make is to move out as soon as they get wind of the foreclosure. Better to move than to be put out, right?
The problem is that Ohio law does not require a plaintiff to execute on or enforce a judgment once it is granted. This applies to foreclosure cases as well. The bank can even bid on the home at the sheriff sale. What counts is the confirmation of sale. That is the document that actually takes your name off the title to the land. Until that is filed, you are still the owner. Sounds like a fraudulent foreclosure doesn’t it? So long as the bank is acting within the law there is nothing fraudulent about it.
If they do not intend on carrying through with the foreclosure, why won’t they talk with you to avoid this whole mess? That is the three trillion dollar question Congress, the courts, and you need an answer to. The banks are not giving it. If this has happened to you, move back in and live rent and mortgage payment free.