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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We received notice of a June 2 sale date. First we have heard of it. Tenant occupied investment property. We live in Fla. Any knowledge would be appreciated. Thanks!!

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Knows About Non-Judicial
Drew:

Non-judicial sales are extremely difficult to stop.  For this reason, in those states that permit deeds of trust and private sales, mortgage lenders universally insist upon these one-sided and onerous provisions.

In most states, there are two principal avenues to stop or delay the sale.  First, you can go to court and seek a restraining order and injunction.  Second, you can file for bankruptcy.  The latter only suspends matters by effecting a civil stay.

This is COMPLICATED.  You need to talk to a GOOD lawyer!

Most of the defensive strategies discussed in this Forum do not apply in those states where a deed of trust and private sales prevail.

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In many states where deeds of trust are used and private sales are permitted, the lender may still need to go to court afterwards to seek an EJECTMENT to obtain actual possession of the subject property.  The requisites and the processes vary widely.

IF YOU ARE INTIMIDATED BY MAILED OR POSTED NOTICES AND WALK AWAY FROM THE PROPERTY AFTER THE PRIVATES SALE, YOU MAY BE GIVING THE LENDER A FREE RIDE AS TO THE EJECTMENT ACTION.

But staying in the property is also problematic as it may expose your personal possessions to loss or damage if and when an ejectment actually occurs.  If you REMOVE all of your possessions, you may seem to abandon the property.

The bottom line here is that this is a treacherous area and you would be well counselled to seek competent advise from an experienced lawyer familiar with Georgia consumer debt and bankruptcy law. 
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'Tenant Occupied Investment Property'

I agree with Knows.. This is a minefield.  In 'some' states if the property is not your principal residence, there may be differing time frames for the foreclosure.  For non-principal residences the lender may be able to use a Notice of Election To Forfeit which could have a vastly shortened time frame.

In AZ that process can be under 30 days versus at least 91 days for a residence.

Look at your notices very carefully and research your state statutes.  Whatever you don't don't let a single day go by without doing something.

If you can find a good lawyer, that is of course the proper route to go.

In any event don't give up without a fight.  There may be adequate or equitable defenses.


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Knows About Non-Judicial
Also bear in mind that most investor properties include an assignment of rents provision within the mortgage or deed of trust.  This entitles the note owner to step in and begin to collect the monthly rent directly from the tenant as an additional rental.

If the bank proceeds with a non-judicial sale, you may EXPECT that they will also notify the tenant to either (a) pay the rent directly to the mortgage investor and/or (b) to vacate the premises.

Any actual ejectment action would be against the TENANT.  The tenant's interests probably do NOT coincide with yours.  That is the tenant is going to want to minimize his or her own legal expenses and minimize any exposure of their personal property to the lender's actions. There is also just the matter of inconvenience. 

And if you are asserting continued ownership, remaining in the property may subject the tenant to multiple claims for rent.  Who should the tenant PAY?

The tenant's lawyer may advise the tenant to pay the rent into escrow which deprives you of the immediate cash flow to use as a part of a workout.

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If the tenant DEPARTS, reoccupying may NOT be a viable option.  While REMAINING IN possession of a property may put the onus on the lender to initiate an ejectment and is probably a civil matter, re-entering the property after a lawful private sale may very well be a civil and/or a criminal treaspass.  You need to be VERY CAREFUL in such a situation.  You do NOT want to discover that agressive defensive tactics subject you to prosecution!

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One final nore:  While I have been proactive in seeking to help and inform foreclosure defendants, bear in mind that if the ONLY ISSUE is your inability to pay -- that is if you are not having issues with fraud in the origination or servicing -- you need to very carefully examine whether this is really worth the fight!  In an instance where you have a property that is deeply underwater -- with value well below the current mortgage balance -- and lack the cash flow to make the payments, it is unclear to me what is achieved by holding onto the property, particularly in a non-judicial foreclosure state where you are holding very few cards.  In most parts of the country, property values are still FALLING and will probably continue to be depressed for YEARS.

You need to very carefully assess your situation and NOT let your anger regarding your circumstances color your self-interest.  There are many instances, where simply walking away from a property is actually the best strategy!

Again, I would encourage you to seek some counsel from a good attorney.  In many places, you can get at least an initial preliminary interview and discussion with a lawyer for free.  But be WARY of the many scoundrels out there who will prey on your vulnerability and use this as simply an opportunity to separate you from your money as you are going under! 
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Sara
I don't know anything about these types of foreclosures but have been thinking about this post.

Please be honest with your tenants!  Let them know what is going on and the whole truth of how long they have to stay in the property.   If you aren't making the payments, why don't you let them have a free month or two before the sale so they can come up with enough money to move in lieu of the deposit they gave you.

Remember: Karma can come back to bite you.


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