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Is it possible to face foreslocure without missing a payment?

the past 30 days, Kendra and Todd Parker have been trying to figure out what to tell their four children, fearing that they, like millions of other Americans facing foreclosure, could be tossed out of their home. But unlike the vast majority of homeowners in their predicament, Kendra Parker says she can prove she and her husband have not missed a single mortgage payment. The Parkers' mortgage began like any other that might have emerged from the housing boom: the neighborhood bank that originally issued their mortgage sold the loan, and it eventually landed in the hands of one of the nation's largest mortgage companies. In industry parlance, the loan was "securitized," or sliced into parts and combined with hundreds, possibly thousands of other mortgages, then sold piecemeal to investors. The complex reality of the modern mortgage system was supposed to have very little effect on the Parkers -- they would simply mail their monthly payment to a mortgage servicer, which would handle the payment on behalf of the investors holding the mortgage securities. But, along the way, that machinery broke down. No one, the Parkers say, told them their loan had been sold. With no word from the new servicer, New Jersey-based PHH Mortgage, the Parkers sent their first payment to the original bank, which mailed the check to PHH, according to documents the Parkers provided to The Huffington Post. But that check went missing. The Parkers say that despite the fact that they made every other payment, that missing check led to foreclosure proceedings, and a wrecked Kendra Parker's credit rating. Soon, the mortgage company informed the Parkers that they were three months past due and owed over $3,000. As the housing bust led to the loss of millions of jobs, displaced families and eroded U.S. wealth, gaping holes in the mortgage market began to emerge, raising legal doubts about even the most mundane of transactions. Regulators and banks say that those who are current on their mortgages are almost never foreclosed on, but isolated cases remain. Story continues below Advertisement Last year, court documents exposed potentially massive breakdowns of the mortgage industry. Inundated with thousands of foreclosures, mortgage servicers, some hired by banks, allegedly signed hundreds of foreclosure documents without examining them. These "robo-signer" cases spurred some major banks to temporarily halt their foreclosures nationwide. All 50 state attorneys general, federal prosecutors and a host of agencies have since launched investigations into foreclosure practices. Investors sued banks over the question of which soured mortgage securities banks should be forced to buy back. Legal challenges to the fundamentals of the mortgage system have proliferated of late. In January, Massachusetts' Supreme Judicial Court ruled against U.S. Bancorp and Wells Fargo, affirming a lower court's ruling that invalidated two mortgage foreclosure sales. The court found that the banks, in their capacities as trustees for mortgage securities, did not prove that they actually owned the mortgages at the time of foreclosure. Legal experts say the decision is likely to lead more borrowers to sue for wrongful foreclosures. Paul Collier, a lawyer based in Cambridge, Mass., who represented plaintiff Antonio Ibanez, said he believes wrongful foreclosures are more common than has been reported. Collier said Ibanez's house was actually purchased by the bank a full year and a half after the bank foreclosed on it, and that he had heard of other cases in which payments went missing or were applied to the wrong accounts. The chaos, he said, stretched through the entire life of some mortgages, from the securitization process to wrongful foreclosures. With lenders and servicers contending wi

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emilysmom1966

Asked by emilysmom1966 at 1:55 PM on Feb. 19, 2011 in Politics & Current Events

Level 18 (6,228 Credits)
Answers (22)
  • They did miss a payment. It may not have been through any fault of their own, but there is a payment missing on their account. It's lying to suggest they are being foreclosed on for no reason at all. Unfortunate, but things like this will always happen, no matter what state the economy is in, and the best you can do is hope it's cleared up and whoever screwed up gets fired.
    NotPanicking

    Answer by NotPanicking at 1:59 PM on Feb. 19, 2011

  • Paying a bill doesn't stop at mailing your payment. You have to follow up. I pay my mortgage directly to the mortgage company, (which is owned by family) but I still follow up to make sure the amortization schedule is credited properly, so I'm not paying extra interest

    lovinangels

    Answer by lovinangels at 2:30 PM on Feb. 19, 2011

  • The Parkers sent a check for $1,111.86 to Metropolitan National Bank on Sept. 8. Documents from Metropolitan National Bank provided by Kendra Parker show the bank sent the check by registered mail via UPS to a "Mortgage Servicing Center" in Chicago and that it arrived on Sept. 9. Someone in the firm's mailroom would have had to have signed for it. It appears that that check went missing, and that payment was never applied.It looks like one payment got misplaced and that started the domino effect," said lawyer Greg Nelson, who works for law firm Michaelson, Connor & Boul. The law firm examines all foreclosures stemming from loans by lenders approved by the Federal Housing Administration. When an FHA approved loan is foreclosed on, the firm can help some homeowners to stay in their homes. After hearing the story, and seeing the proof Kendra had to offer, he too forwarded the details to PHH. When the Parkers

    emilysmom1966

    Comment by emilysmom1966 (original poster) at 2:33 PM on Feb. 19, 2011

  • It looks like one payment got misplaced

    In other words - they are missing a payment. For 3 months of late payment interest to accrue, that means they went at least 3 months (or longer) without bothering to see if their payments were posting or that their acct was in order. This could happen to anyone at any time with any bill. There's a lesson in this to be on top of your finances at all times.

    NotPanicking

    Answer by NotPanicking at 2:37 PM on Feb. 19, 2011

  • Stuff like this happens all the time - we ended up in foreclosure because the bank wouldn't take our check without the late payment penalty included in the monthly payment - but they held the check and the other two that were mailed after it and never cashed them but didn't bother to tell us until they were calling wanting the full amount due in one lump sum (over $100K). It was a nightmare and we ended up filing bankruptcy over the mess.  Never again will we use Countrywide for anything, this wasn't the first time we had a problem with them, but it will be the last.

    scout_mom

    Answer by scout_mom at 2:38 PM on Feb. 19, 2011

  • IfCome on, the bank sent the check by registered mail via UPS to a "Mortgage Servicing Center" !!!! They stop cashing the checks!!! After they didn't receive the check certified by UPS!!! Doesn't that sound a little odd ? I have dealt witht hese people before. They don't know their asses from their elbow,.
    emilysmom1966

    Comment by emilysmom1966 (original poster) at 2:53 PM on Feb. 19, 2011

  • wait so the mortgage company can do what ever the hell they want, and get away with how come people are not pissed off and making a stink? They got there payment and CHOSE not to cash the check, is that is sounds like to me. Sounds like more crooked people, wanting to destroy other peoples lives for a dollar!!!!
    mrssundin

    Answer by mrssundin at 3:04 PM on Feb. 19, 2011

  • Did The Parker's put a "stop payment" on the missing check?! If it was sent via UPS, there would be a TRACKING HISTORY of who signed for it when, and at which point it became "missing." They should have followed up! And when their check didn't clear, they should have made an inquiry, instead of waiting 3 months.

    Our mortgage payments are taken out of my husband's paycheck electronically...so there has never been an "MIA payment," in this day and age I don;t know WHY more people don't do this--especially regarding the single biggest monthly bill most of us owe!!
    LoriKeet

    Answer by LoriKeet at 3:39 PM on Feb. 19, 2011

  • If their check went uncashed they should have been on the phone pronto. You don't notice if you've got an extra grand in the bank? Do they NEVER balance their check books? Yes, the company screwed up, but so did they.
    lovinangels

    Answer by lovinangels at 3:42 PM on Feb. 19, 2011

  • If these people didn't bother looking to see where their child was for 3 months, people would be all over them. Not following up on $1000+ and it's the big bad company's fault?
    NotPanicking

    Answer by NotPanicking at 3:42 PM on Feb. 19, 2011

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