Simply put, you may be able to stop or slow foreclosure now (or at least slow it down) by requesting copies of the originator's Power of Attorney and a trail of mortgage assignments
How does this happen? Well, to stop or slow foreclosure proceedings is all about connecting the dots. For a mortgage company to foreclose on you they must prove that they have a legal right to do so. This legal right is generally proven through the use of mortgage assignments.
A mortgage assignment is a legal document that outlines which company is suppose to handle, process, and apply payments for my mortgage account? A mortgage assignment also stipulates who handles default proceedings such as collections activity, foreclosure processing, loss mitigation, loan modifications, bankruptcy filings, etc.
Here's what happens in a typical mortgage:
The company that lends you money to buy your house is called the "Originator." This is the financial institution that collected your information and underwrote your loan. There could have been an intermediary such as a real estate broker or lending broker. These are merely agents who earn a commission from the originating lender for serving as the primary contact for you during the mortgage buying process.
The originator is typically only interested in lending you the money to get the mortgage started. Ever since the 1990's most of the originators have then taken your mortgage and dumped it into a "Pool" of mortgage loans. This "Pool" of loans are generally loans that have the same type of credit criteria. For example, there might be 100 mortgages in POOL ABC. The object is for the originator to then go and sell the POOL on whats called a secondary market thereby making more profit.
An INVESTOR will then come along and purchase the POOL from the originator. The POOL total is usually a combination of the total of the 100 loan's principal balances and a commission or service fee.
All the consumers who have these mortgages in this pool might have the following similarities:
1. The property is in the State of Missouri, and
2. The borrowers have FICO scores between 620 and 680, and
3. All borrowers put down at least 5%, and
4. All borrowers are paying mortgage insurance, and
5. All borrowers have non self-employment jobs that they have been in for at least five years.
The key here is how to analyze the risk. If the POOL of loans has borrowers with FICO scores of 500-600, the POOL is more riskier, so the cost to purchase the pool might be less. If the POOL FICO scores are all greater than 700, then the POOL is going to cost more because there is less risk of default (collections and foreclosure).
Now to make things even more convoluted, the POOL is sold from the originator to the new investor, but the new investor may or may not want to actually do the work required of "Servicing" the mortgage.
The "Servicing" of a mortgage is the actual day to day handling of the loan. Companies that perform this process are called "SERVICERS." So now you potentially have even more parties involved in who owns your mortgage note.
When the originator sells the loan to the investor, the originator includes a POWER OF ATTORNEY document that stipulates that the originator is signing over their legal rights to own the note, collect payments, service the mortgage, and issue NEW ASSIGNMENTS of mortgages. Typically a mortgage can be signed from the originator to a new investor or servicer several times during the lifetime of that mortgage.
The mortgage assignment is different from the POA in that it spells out who now services the mortgage. Where most financial institutions (investors and servicers) are getting into trouble with the courts is that they are creating mortgage assignments without having a power of attorney on file with the courts from the original originator.
You should ask your mortgage servicer for the following if you are unsure of who these different parties are:
1. Who originated my mortgage? (Usually on your mortgage note you signed at your closing)
2. Was my mortgage sold? If so, can a POA be provided from the originator?
3. Can my mortgage company supply a properly dated trail of assignments to show that the originators legal right to collect and foreclose on my property has been passed from one organization to the next, to the current mortgage servicer?
When you send a letter or communicate with your mortgage company regarding these questions, make sure you do so by utilizing what is known as a RESPA Qualified Written Request. For more information on submitting a RESPA QWR, consult an attorney, research this topic on the web, or get non-legal help by contacting Alliance Insight Investigations at www.AllianceInsight.com
These efforts are a good first start for most homeowners and they have been helpful in stopping, preventing, and questioning the foreclosure process.