Deficiency Judgments, Short Sale, And Foreclosure: Part Two Of Conversation With Bank’s Foreclosure Attorney

This is part two of a two-part post recounting parts of my conversation with an experienced attorney working for one of the state’s largest foreclosure law firms. The first installment was published on June 19, 2012. Here is a summary of the rest of our conversation:

My question: What is the most effective mortgage foreclosure defense issue.
His answer: allege that the bank lacked standing to sue at the beginning of the foreclosure process. This defense includes an improper mortgage assignment or lost note. He said that courts will permit a “blank assignment” and that only about 10% of his cases involve a lost note or other essential instrument.

My question: How often will banks agree to waive personal liability and deficiency claims in first mortgage foreclosures or short sale.

His answer: No.  Otherwise, do not expect a bank to waive a deficiency claim in foreclosure or short sale.  There are a few exemptions. For instance, Seterus Bank (one of his clients) frequently forgives personal liability.
My question: What is your biggest frustration as a mortgage foreclosure attorney?
His answer: Getting a response from my own client. It is just as frustrating for my client to deal with bank personnel. As it is for the borrower. There are limited people at his bank clients with any authority. Most of the time he is dealing with “non-thinking drones” at his client banks. He says tat he feels that there is very little intelligent life on the mortgage banking staff dealing with foreclosures. Most of these people, according to this attorney, or very inexperienced, very afraid or just stupid.
My question: Why won’t banks negotiate reasonable, mutually beneficial settlements, with upside down homeowners?
His answer: It’s not that the banks don’t want reasonable solutions- the problem is that there are not enough people at any bank with authority to make decisions. He told me that on many occasions he will submit to his client an offer that is beneficial to the bank, but he cannot get a response to the offer and cannot speak to anybody with authority to make a decision. As a result the homeowner’s offer “dies on the vine”
The above paraphrase of my exchange with this mortgage defense attorney- hopefully will provide some insights to those homeowners experiencing frustration of the mortgage foreclosure process.

Last updated on May 22, 2020

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