Mortgage Servicing Fraud
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Re-Claiming Your Home After Foreclosure – Improper Service

The front page of today’s St. Pete Times tells the story of my client, Michael Carlson, who is seeking to vacate a foreclosure judgment entered against him in 2008.  Here’s the rub – after foreclosing, Bank of America sold the home to a third party, who has been living in the home since 2009, yet, for the reasons set forth in this Motion to Vacate Foreclosure Judgment, I firmly believe my client’s claim for ownership/possession takes priority over the third party purchaser. 

At the outset, I want to make it clear – there are limited circumstances in which a person who has lost his/her home via a Final Judgment of Foreclosure can file a motion to re-claim the home, particularly if someone else now owns it.  The most straightforward way to do so, though, is the one outlined in the motion.  

The argument is actually quite simple.  Like any defendant in any lawsuit, a homeowner in a foreclosure lawsuit cannot be deprived of property without “due process of law,” a right bestowed upon all Americans via the Fifth Amendment to the United States Constitution.  The way Florida courts ensure due process in foreclosure lawsuits is to require that homeowners be served with a Summons and Complaint by a process server or sheriff (commonly called “service of process”).  This way, if a homeowner has valid defenses, he/she has a chance to assert them in a court of law. 

In Mr. Carlson’s case, he was never served with a Summons and Complaint, as the bank served a tenant at a property where he never lived, so he never knew about the suit (until after it was over) and never had a chance to defend it.  On these facts, I firmly believe the law requires that Mr. Carlson regain ownership of his home (even though it’s been more than two years since the foreclosure and even though the home was sold to someone else).  In other words, the Final Judgment of Foreclosure entered against him is void, as if it never existed, because he never had a chance to defend the suit. 

If that sounds like an extraordinary result, bear in mind – that’s how strong the Fifth Amendment is. 

Homeowners cannot be deprived of property without due process of law.

  When I evaluate prospective cases like this, I’m looking for two facts:

1.  The homeowner never defended the foreclosure lawsuit in any way; and

2.  The homeowner was never served with a Summons and Complaint, or was served by publication. 

This is not to say that all foreclosed homeowners who meet these two criteria can file a motion to vacate a Final Judgment of Foreclosure, nor does it mean these are the only circumstances when such a motion can be brought.  That said, if a Florida homeowner who fits these two criteria, I’d be interested in giving you a free consultation.  Even if the foreclosure was months or even years ago, if the Homeowners were never served, and never defended the case, they may be able to re-claim ownership of  their home.

I understand some people reading this may sympathize with the third-party purchasers, the Winters.  However, they are not without remedy.  Their recourse is against Bank of America, the bank that warranted title to the home when they sold it to them, and/or the title insurance company, which issued a title insurance policy when they purchased it.  In fact, if my client prevails on his motion, the Winters should, in my view, have a slam-dunk claim against the title insurance company.  Of course, this is precisely what I’ve been talking about in all of the prior blogs and media stories about title insurance problems.  Here, a title insurance company is looking at a significant claim, on what seems to be a very nice home in Dunedin, even though, arguably, all it did was issue a title policy on a home that Bank of America had foreclosed. 

This story is also a glaring illustration why Florida judges must ensure that foreclosure cases are done the right way, from the outset.  Here, for instance, there could have been some requirement that the process server’s affidavit of service require the process server to indicate some provide personal knowledge that Mr. Carlson lived at the home where the tenant was served.  That safeguard was lacking, however, Mr. Carlson did not live at the home, and now a big mess has unfolded.  Respectfully, the entire court system should slow down and ensure foreclosures are done properly from the outset, failing which more and more of these problems are going to boomerang back to them.

Mark Stopa

http://www.stayinmyhome.com

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