Practice Pointers: Foreclosure Defense is Not About Getting a Free Home



When I started this blog almost a year ago, I wrote that one of the major myths of foreclosure defense is that a borrower can get a free home if they fight their foreclosure.  What was true then remains true today: foreclosure defense is not about getting a free home.

Obtaining a free home in a foreclosure defense case is a completely unrealistic goal.  While lenders and servicers have made a mess out of the foreclosure process–and continue to do so–these mistakes can, and certaintly will, be corrected at some point in time. Faulty notices can be corrected, loan modifications can be re-reviewed properly, and missing promissory notes can still be enforced.  A lender is doing a foreclosure because a great deal of money is at stake: anywhere from $100,000-$500,000 (and sometimes even more).  If a lender has made a mistake in the foreclosure process, it will be corrected: there is too much money involved to do otherwise.  In short, without dealing with the unpaid debt that caused the foreclosure, the ax will eventually fall for the homeowner.

A much more realistic goal for foreclosure defense is affordability: obtaining a mortgage loan that a homeowner can pay.  A well-crafted foreclosure defense can convince a lender that a reasonable loan modification is a better option than spending years in litigation.  But, make no mistake: even the best lawsuit is never going to convince a lender to give up their mortgage on a home.

As a foreclosure defense attorney, I practice what I preach:  I do not accept clients with unrealistic goals in foreclosure defense, nor do I advocate legal arguments that would amount to a court giving my client their home for free.  Attorneys and pro se litigants who do make these arguments cause much more harm than good; not only do they hurt their own cases, they make this area of law harder for everyone else.

Good Read on the Pending Federal Court Lawsuit Challenging Local Ant-Foreclosure Ordinances

I previously wrote about the pending federal court lawsuit brought by several banks challenging local town and city anti-foreclosure ordinances.  The cases raises many interesting questions on law and public policy, and is a rare case of local state banks taking legal action to challenge anti-foreclosure laws.

Yesterday, the Boston Globe published a well written editorial by Paul McMorrow in favor of these anti-foreclosure ordinances. Mr. McMorrow raises some good arguments on this matter and is worth a read.  I’ll be on the lookout for a similar editorial advocating the banks’ position in this matter.

Massachusetts’s Right to Request a Modified Mortgage Loan


In 2012, Massachusetts passed “An Act Preventing Unlawful and Unnecessary Foreclosures,” aimed at helping struggling homeowners
stay in their homes.  One of the key components of this law, the right to request a modified mortgage loan, is an effective tool for foreclosure defense.

This law, found in G.L. c. 244, § 35B, requires lenders to make a “good faith effort” to avoid foreclosure for borrowers with “certain mortgage loans.”  The definition of “certain mortgage loans” is lengthy, but does cover a large share of residential mortgage loans.  Pursuant to the Division of Bank’s regulations, if the lender cannot determine if the loan falls into this list of definitions, it is considered a “certain mortgage loan” and the lender therefore must consider the borrower for a modification.  The right to request a modified mortgage loan only applies to borrowers who have received a right-to-cure notice after November 1, 2012.

The right to request a modified mortgage loan law requires lenders to consider borrowers for a loan modification.  Lenders have several different loan modification models to choose from, but the federal Home Affordable Modification Program (“HAMP”) is likely to be the most widely used option.  For this reason, this law is also known as “State HAMP,” because it makes HAMP a requirement at the state level (HAMP is presently a federal program that only applies to a list of specific lenders).

Borrowers who are entitled to request a modified mortgage loan will receive a notice from their lender informing them of this right, and the documentation needed to process such an application.  The deadline for the borrower to respond to this letter is generally thirty days, so borrowers need to act quickly in preparing an application.  After receipt of the application, the lender is suppose to respond to the applicant’s request with an assessment of their eligibility for a modification.

G.L. c. 244, § 35B is important for foreclosure defense because it makes many Massachusetts residents eligible for a loan modification who previously had not been.  I also like this law because it explicitly requires a lender to perform a “compliant” loan modification analysis.  While it is no secret that lenders routinely mess up loan modification applications, fighting these mistakes are not always easy, as consumer protection laws and common law remedies do not always cover these abuses.  However, G.L. c. 244, § 35B appears to open the door for allowing homeowners to challenge loan modification denials.

If you are in need of assistance in preparing a loan modification application or fighting the denial of your modification, contact me.

Practice Pointers: Lessons from a Successful Foreclosure Defense Lawsuit


I’m happy to write that I settled a foreclosure defense lawsuit for one of my clients this week.  I won a temporary restraining order to stop the foreclosure
several days before the sale and negotiated a loan modification for my client that will keep him in his home with an affordable mortgage loan payment–my goal in every foreclosure defense case.

My experience in this reminded me of some important practice pointers in foreclosure defense:
  • Earlier is always, always better in stopping a foreclosure. While I encourage anyone in any stage of foreclosure to consult an attorney, sooner is always better
    in trying to save a home.
  • The more paperwork you can provide to your attorney about your mortgage loan and home, the better of a chance that they can help you.
    My client had papers going back to the closing of his home, and every notice he had received since then, which made my job much more effective (at less cost to him).
  • Working with the bank can help you save your home.  I know few, if any, bank attorneys who want to see someone lose their home.  Most, if they can, will make every effort to find a way to avoid this.  Developing a good working
    relationship with the other side can go a long way towards an effective resolution of the problem.
In need of foreclosure defense assistance?  Contact me.

Better Call . . . Sherwin!

As a huge fan of the television show Breaking Bad, I’m looking forward to Better Call Saul, the widely anticipated spin-off involving Walter White’s attorney: Saul Goodman.  Saul was one of my favorite characters on the show; the type of lawyer I never want to be, but one who I can’t help enjoy watching.

The trailer for the new show is out, and while I wouldn’t look to Saul Goodman for legal advice, I do admit that his words of wisdom in this clip are spot on, especially in the area of foreclosure defense.  He compares lawyers to health insurance: one hopes you never need either of these services, but not having these types of protection are a recipe for disaster.  Unfortunately, I’ve seen far too many clients who have not followed this advice, and forced themselves into foreclosure when they might have been able to solve the problem with legal assistance.

So, if you are facing foreclosure or another tricky legal situation, follow Saul’s advice and talk to a lawyer.  Just like a sickness, no one wants to be in a legal proceeding, but if you are, make sure you get the help you need.  In other words, Better Call Sherwin!

Overview of Important Paperwork in a Foreclosure

There is no shortage of paperwork involved in a foreclosure. I have found that some of my best educated, most informed clients do not understand all of the important documents involved in the purchase of a home and subsequent foreclosure.  Here is a quick overview of these items.

Promissory Note
When a home is purchased, the buyer signs a contract with his or her lender to borrow money to buy the home.  This contract is called a promissory note.  In it, the borrower promises to repay the lended money with interest over a period of time.  An important feature of a promissory note is that it may–and probably will–be transferred to another person or entity. This person or entity is permitted to enforce this agreement just as the original lender could. Transfers of a promissory note are often made with endorsements, that assign the debt to another entity.  These endorsements can be found on the note itself or another slip of paper, called an allonge.
Pursuant to the Supreme Judicial Court’s landmark Eaton v. Federal National Mortgage Association case, the foreclosing entity needs to be the holder of this note at the time of foreclosure. This, however, only applies to foreclosures occurring after June 22, 2012.
If you do not have a copy of your promissory note, you can obtain one by submitting a Qualified Written Request to your lender, requesting that they show you proof they are the lawful owner of your note.  Someone who signs a promissory note is on the hook for repaying the borrowed money.  However, a borrower can discharge (ex. “wipe out”) this debt in bankruptcy.  Because of this fact, the lender will want additional protection for their investment, also known as security.  This is the reason for a mortgage.

mortgage is a security interest that allows a lender to repossess (“foreclosure”) the underlining property if the debt is not repaid.  While it is common for homeowners to talk about paying their mortgage when making payments on their home, they are actually referring to the mortgage loan.  A mortgage is merely the lender’s means of protecting its financial investment.
In Massachusetts, mortgages are almost always recorded in the local county’s Registry of Deeds.  These can be found online at
Just like your promissory note, your mortgage can–and almost certainty will–be assigned throughout the life of your loan.  In another landmark decision, the Supreme Judicial Court in U.S. Bank v. Ibanez held that, at the time of foreclosure, the foreclosing entity must have record assignment of the mortgage.  Anyone involved in one of these cases should therefore review their mortgage assignments carefully to see if this requirement has been complied with.
Mortgage Assignments
Mortgages are often assigned throughout the life of a loan.  Like mortgages, these assignments are almost always recorded in the Registry of Deeds.  In a typical mortgage assignment, the grantor (the person or entity giving the assignment) assigns the mortgage to the grantee (the person or entity receiving the assignment).
A deed is the document that passes property ownership to another person or entity.  When a home is purchased, the seller deeds the property to the buyer through a quitclaim deed (the standard type of deed in Massachusetts). When a home is foreclosed, the foreclosing entity records a foreclosure deed that passes ownership of the property from the prior homeowner to the person or entity who purchased the property at the foreclosure sale (typically the entity who held the mortgage and conducted the foreclosure sale).  Included in a typical foreclosure deed is an affidavit of sale, stating the steps taken to comply with Massachusetts foreclosure law, as well as a copy of the notice of sale used to advertise the foreclosure.

Understanding the Home Affordable Modification Program (“HAMP”)

The federal Home Affordable Modification Program (“HAMP”) is aimed at offering struggling homeowners a loan modification that will provide them a mortgage payment of 31% of their monthly income.  While HAMP is intended to help homeowners, the reality is that the program has extensive requirements and complicated guidelines.  I encourage anyone applying to create a paper trail when applying for a loan modification and consult a foreclosure defense attorney if you are not having success with your application.

I recently came across an excellent power point presentation on HAMP.  It is intended for loan servicers and provides an excellent overview of the loan modification process under HAMP.  It is a little outdated (March 2013), but it does provide a great overview of the process, with examples.

If you need to apply for a loan modification and are having trouble with the paperwork, contact me for a consultation. While you can apply for a modification without an attorney, many find the process easier with the help of a professional.

Breaking News: Banks Challenge Local Foreclosure Ordinances


Earlier this month, several banks filed a federal court lawsuit challenging several Massachusetts city ordinances related to foreclosure prevention.  These ordinances, among other things, require lenders to engage in mediation prior to foreclosure and rent to homeowners who have been foreclosed.

Foreclosure law in Massachusetts, like the rest of the country, primarily comes from state law.  It is unusual for a town or city to pass an ordinance relating to foreclosure, making these laws ripe for legal challenge.  This is an important case about whether local government can get involved in foreclosure defense, and will undoubtedly decide the fate of other local efforts to prevent foreclosure.  Stay tuned!

Practice Pointers: Create a Paper Trail When Applying for a Loan Modification

With foreclosures on the rise in Massachusetts, struggling homeowners will likely continue to apply for loan modifications in record numbers.  Loan modifications are a good option for mortgagors who have steady income and need help in obtaining an affordable mortgage loan payment.  However, despite federal and state laws created to promote loan modifications, the application process for loan modifications is, often times, anything but a breeze.

Too often, I hear from homeowners who have applied for modifications in good faith, and have been told by their loan servicers repeatedly that their applications have been lost and paperwork is missing.  Errors like these have been the subject of frequent litigation against banks and servicers.

In these unfortunate situations, a foreclosure defense attorney can help you fight a loan modification.  However, as I have often seen, a homeowner is in a much, much better position in fighting a modification if they have proof that they have been applying for a modification.  In other words, without documentation, it is only a homeowner’s word against the bank or loan servicer in claiming the loan modifications were not properly considered, which makes for a MUCH tougher case.

With this in mind, anyone applying for a loan modification should create a paper trail of their application process.  Hopefully this paper trial will never have to be used, but if a homeowner finds themselves having to go to a lawyer, this information will be a huge help in preparing your case.  Applicants for loan modifications should always do the following:

  • Make a copy of everything you submit to your bank or loan servicer.  An inexpensive scanner can be a huge help in organizing these files electronically.
  • Use some means of confirming that your bank or servicer received your application.  If you are mailing your application, send it by certified mail, which is proof that the recipient actually got what you sent them.  If you are sending it by fax, get a confirmation that your application was actually received.
  • Keep a log of all of your communications with your bank or servicer.  Note the date, time, who you were speaking with, and the status of your file.

Hopefully, your loan modification application will not end up in court.  But if you do find yourself in litigation, these steps will put you in a much, much stronger position in helping you get the relief you deserve.