Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Hello,

I'm trying to find out if there is any legislative effort to disallow deficiency judgements after foreclosure.

Our story as briefly as I can tell it: We bought our home in 2005 through Novastar (subprime loan). Although we knew that our fixed rate was only for 2 years and included a prepay penalty, we did not know that the prepay penalty was for 3 years. So we were forced to refinance (our have our interest adjust up astronomically) and eat $10,000 for the penalty. We refinanced (through Greenpoint Mortgage) just in the knick of time, but that didn't go as well as we had hoped. Just days before the signing of the papers, we were informed that we were not getting the 30 year fixed mortgage we requested, but rather an 80/20 loan that was in part fixed for five years (the 80%) and in part an adjustable HELOC (the 20%). Three months ago our loans were sold to Countrywide.

Due to the meltdown in the automotive industry, my mechanic husband is now earning 2/3 less than we used to. He was unemployed for nearly 3 months, which is when our loan went into default (and this was after exhausting our savings and 401K to make the payments in the previous months). When he finally found a new job it was at 1/3 of our previous income. For this reason, we are not a good candidate for a loan modification, even if Countrywide was truly interested in helping. We've been watching Congress to see if mortgage cramdown legislation has any hope of passing (not likely to get through the Senate).

So, it is likely that we will have to 'walk away'. Here's the problem with that though, Countrywide is likely to come after us with a deficiency judgement. Although CA is said to be a 'non-deficiency' state, that only applies if you never refinanced your loan. Well, in our case that was impossible - we had to get out from under a really horrible subprime loan. So here's my question:
Does anyone know of any efforts to legislate against deficiency judgements?

I contacted Countrywide last week to request a 'Deed in Lieu of Foreclosure', but was told I'd have to attempt to short sell the home for 3 months before they'd even consider it.  If we let it foreclose and walk away, and face a deficiency judgement, we will be forced to file a Chapter 7 to get out from under that. Has anyone else dealt with this situation?

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h gosh
Why don't you read the CA v. Countrywide judgment in our legal section?  Bet you will be surprised at what you learn.
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