By Däna Wilkinson, Attorney at Law on May 11, 2007 in South Carolina, Personal Finance, Mortgages, General Bankruptcy Information
Well, this is interesting. It seems that, instead of the usual borrower’s claims against the mortgage servicer, the claim in Super Future Equities, Inc. v. Wells Fargo, et al., is that the mortgage servicers are handling matters in such a way as to benefit themselves, rather than the underlying mortgage holders (and, incidentally, the borrowers). This is just one side of the dispute–though it is a 95 page complaint with a lot of detail in it.
I don’t know if the allegations of this complaint are true, but if they are, it may answer a question asked by virtually all of my clients who have pending foreclosures: Why won’t the mortgage company work with me? Many times the problem started with a default that wasn’t all that significant, that could have been resolved with just a little give on the part of the mortgage company. Many clients, upon learning how Chapter 13 allows a debtor to cure arrears over a fairly long period of time, see the irony: Why would a mortgage company, knowing what will happen in a Chapter 13, refuse better offers which would allow a borrower to avoid bankruptcy? And, in many cases, take that approach when the mortgage balance exceeds the value of the property. Why would a mortgage servicer want to essentially manufacture a default? Yet, that is one of the allegations in the Super Future complaint. If–and it’s a big if–those allegations prove to be true, the repercussions are going to be felt for a long time. And many people who have wondered why a mortgage servicer seemed to act against its own best interest will have an answer to that question.