A friend of mine is facing foreclosure on a house she inherited through a realty trust set up by her mother. Her mother took out a $100,000 HELOC in 2010, and my friend assumed the loan in 2017 after her mother passed away. Unfortunately, she has fallen behind on payments due to medical issues and a disability. The mortgage has been reassigned several times, but every time, it was recorded in her deceased mother’s name. She filed for an injunction in state court based on these incorrect assignments, but the case was moved to Federal Court. She has no money for an attorney and is representing herself. Is this a valid defense to delay foreclosure and buy time until January, when she turns 62 and qualifies for a reverse mortgage to pay off the debt? Would filing bankruptcy disqualify her from getting a reverse mortgage?
Incorrect mortgage assignments could be a valid defense to delay foreclosure, but it depends on state and federal laws. A judge might require the bank to correct the paperwork before proceeding.
Valor said:
Incorrect mortgage assignments could be a valid defense to delay foreclosure, but it depends on state and federal laws. A judge might require the bank to correct the paperwork before proceeding.
Agreed. Courts generally want the chain of title to be clear before allowing foreclosure to move forward. She should emphasize that in her defense.
Valor said:
Incorrect mortgage assignments could be a valid defense to delay foreclosure, but it depends on state and federal laws. A judge might require the bank to correct the paperwork before proceeding.
She might not be able to stop the foreclosure completely, but this argument could buy her some time to sort things out.
Filing for Chapter 13 bankruptcy might help her get more time to work things out. A reverse mortgage could still be possible during Chapter 13, but she’d need court approval.
Zach said:
Filing for Chapter 13 bankruptcy might help her get more time to work things out. A reverse mortgage could still be possible during Chapter 13, but she’d need court approval.
Right. I’ve heard of people getting reverse mortgages while in Chapter 13, but it’s case-by-case. The court would need to agree.
If she can delay until January, a reverse mortgage could solve her problems. She should focus on any procedural errors in the foreclosure to buy that time.
Leith said:
If she can delay until January, a reverse mortgage could solve her problems. She should focus on any procedural errors in the foreclosure to buy that time.
Exactly. Highlighting the incorrect assignments could force the bank to restart the process, which might give her the time she needs.
Representing herself in Federal Court will be tough. She should reach out to legal aid services in her area for guidance. They might be able to help her navigate this.
She should also consider talking to a foreclosure defense attorney, even if just for a free consultation. They might be able to suggest strategies to delay the foreclosure.
Davin said:
She should also consider talking to a foreclosure defense attorney, even if just for a free consultation. They might be able to suggest strategies to delay the foreclosure.
Good idea. Some attorneys offer payment plans or reduced rates for cases like this. It’s worth exploring.