Short Term Mortgage Modified in Chapter 13.

Posted by kevin on September 4, 2012 under Foreclosure Blog | Comments are off for this article

You have not heard from me for a while. I have been out of work for most of the summer. For years, I have said that I wanted to take the summer off and hang out on the beach. Well, I took the summer off. Unfortunately, I was not on the beach. In June, I had redness and pain in my upper chest. I thought I pulled a muscle lifting weights. It turned out to be a MRSA related abscess which required surgery. I was in the hospital for well over a month and confined to home for a few weeks. But I am getting back to what might be called normal. Went to Court twice last week, and will be attending a mediation tomorrow.

The time off gave me lots of time to think; lots of time to read. Of course, one of the things that I read about and thought about was the whole issue of foreclosure defense. I was not happy with the Guillaume decision. Going into Guillaume, you had a hodge podge of decisions based on the conflicting appellate division decisions. Both the lender bar and the borrower bar wanted a bright line decision. What we got was anything but. Trial judges are allowed to make their own calls. You would think that would give the borrower a 50-50 shot; however, the examples given in the decision , I believe, skewed the issue in favor of lenders. Irrespective of my opinion on the opinion (an Austin Powers moment), I would have been happier with a straight up or down ruling.

I read the daily opinions. I am not happy with the analysis on standing issues. I believe Judge Todd in Raftogianis and Judge Wizmur (Bankruptcy Chief Judge) in Kemp provided the strongest analyses and basically got it right. Lenders, however, have jumped on a stray statement called “dicta” in the Mitchell decision which appears to say that standing could be based on NJSA 46:9-9 assignment of mortgage. This takes us back to the pre-Raftogianis era when people were losing their homes based on questionable MERS assigments usually drafted by the plaintiff’s attorneys. What makes it worse is that the leading case on NJSA 46:9-9 states that the statute only applies to non-negotiable instruments. Of course, Mitchell dealt with a negotiable instrument so—whatever. This is an issue that needs to go up on appeal.

A summer of pondering has led me to at least the following conclusion- a borrower in foreclosure, more than ever before, needs an experienced attorney to wade thru the verbiage (euphemistic term) to present a forceful defense.

In future blogs, I will talk more about the $25B settlement and how it will impact our approach to representation of borrowers.