“Junior” lienholders Should File Wrongful Foreclosure Actions

As will be discussed in the workshops coming up in California (check the schedule), it isn’t just the homeowner who could be filing wrongful foreclosure actions for damages. Junior lienholders should be doing the same. They are the association that maintains the property or common elements, second mortgage holders, holders of HELOCS etc.

When THEY file, it will institution vs institution and the playing field will be more even. If the foreclosure was accomplished by a credit bid, and nearly all of them fall into that category, then all it takes is an allegation that the bidder was not the secured creditor and therefore the deed on foreclosure was invalid because it was wrong for the auctioneer to accept the credit bid.

Presto the first lien is gone and the the next “junior” lienholders move up in priority leaving the so-called first loan in the dust. That leaves the homeowner with a workable debt in which he can maintain the home, pay the junior lienholders, and tell the pretender lender to go pound salt.

23 Responses

  1. I ref’d that CA stinking case the other day about the second guy being able to go after a deficiency judgment and also then the one B of A lost on that score. Does CA have a 35 day rule or its kin like NV? If so, why should a 2nd who chose not to cure (including by not filing a Request for Notice and, well, while we’re at it, an assgt if it is an assignee of a second, which might have entitled it to Notice – like I said, don’t know) have a right to a deficiency judgment? That second chose to be a sold out lienholder by not exercising its prescribed rights. And this is just what I came up with. Imagine if more knowledgeable people put their minds to it. I did a short blog about pmi and other insurance elsewhere a while back. Someone commented that mostly high ltv’s were done by way of a first and a second, which I didn’t give much thought at the time. After that CA case which found in favor of certain 2nd holders getting deficiency judgments, it looks a tad diff today.

  2. A legit holder (?!) of a second may have to comply with certain laws first. laws on the books give a jr lienholder a right to cure the senior loan in a time certain (after the NOD), just like the homeowner. In NV, and don’t take my word for it, just what I recall w/out spending a week trying to find it, the jr lienholder has 35 days to cure to protect its interest. Now, during that 35 days, if the 2nd has a beef with the f/c’er, it might file an action and ask for at least temp injunctive relief staying the f/c by the 1st.
    Pretty sure the court would find the req interest by the 2nd, since they will be a sold out jr lienholder. The jr. lienholder may have to be notified of the pending f/c by the first. Not sure. Most legit 2nd lenders file a Reguest for Notice (generally for the purpose of being notified of such an action as f/c). Well, they used to, anyway. If the law doesn’t afford notice to a jr lienholder, then they were just too dense in not recording a Reguest for Notice. Home sellers who carried back a substantial 2nd at the time the prop was purchased might be interested in this fight. An institutional holder of a substantial second might be interested in joining the homeowner against the first, but in any scenario, it’s likely the first must be cured pursuant to the law I can’t find just now. But once a homeowner has determined the wrong party, or at least a party which has not evidenced any rights, is coming after him, why would he want to give anyone more money? Even if a court ruled in favor of an escrow for those funds, where are they coming from? Imo, if a defaulted loan is cured and sub goes into default again, the lender has to start over. But a court may order the payments to remain current, if only in escrow, which I think is bull, but as usual, they didn’t ask me.
    Some people have been buying h.o.a. association claims for their priority. I don’t know all the game. Probably has to do with 1) buying at huge discount and 2) tacking on significant fees to the claim for the purchaser of the claim. Kind of like the banksters, if they even part with a dime.
    This is all some sort of monopoly. Unless the banksters have a contractual right, and maybe even then, they are precluding free commerce: WE can’t buy these alledgedly defaulted notes, can we? (which is not to say the banksters or any of the collection outfits are buying them.)

  3. According to what I read yesterday, Falciani released 80,000 names, 8,000 of which were French and over 15,000 were German. The rest was Brits, Americans and others. He was provided with a new ID by the government, which he refused to use.

    Anyway, still my kinda hero…

    Business ::

    HSBC theft man arrested in Spain, Swiss seek extradition

    GENEVA, SWITZERLAND – The French and Italian citizen who is accused of stealing data from his one-time employer, HSBC bank in Geneva, and then selling it to the French government, has been arrested in Spain. Switzerland has had an international arrest warrant out for him, but as long as he stayed in France he could not be extradited since France, like many countries including Switzerland, does not extradite its own citizens as a rule.

    Herve Falciani was arrested 1 July in Barcelona, the Federal Department of Justice and Police says, and Switzerland requested four days later that he be extradited to face charges of theft of the bank’s records and breaking banking privacy laws. (GenevaLunch background story, March 2010)

    The Wall St Journal reports that he has initially denied the bank’s allegations.

    Falciani has been accused by HSBC of stealing client records during 2006 and 2007 when he was an IT employee at the bank. The data he sold has reportedly been used by the French government to go after tax evaders, although the bank said after it announced the theft in 2009 that the records stolen contained only old data. Nevertheless, French authorities have said the names and account details provided useful information.

    Bloomberg reports that “In May, a Spanish court ended a tax-fraud investigation into undeclared Swiss funds belonging to members of the Botin family, who helped run Banco Santander SA for a century, after they paid the money they owed. The National Court said 13 months ago it would investigate the Botins after details of hidden funds at HSBC’s Swiss private bank were passed to Spanish tax authorities by France.”

    The case has caused friction between the two countries because France, unlike Germany, which has also received stolen data, says the information can be used legally.

    Posted 24 Jul 2012 at 23:05

  4. My pleasure.

    It’s all completely tied and that’s what is scary. Our hard work and hard-earned money are used against us to kill us so that a very small number of people may make more, more, more all the time.

    Because it is so foreign to me, I never subscribed to any conspiracy theory and even judged people who did as unbalanced for years. Now, hearing Dr. Steven Greer tell us what is really going on puts it under the proper light. While we’re all fighting to preserve the sanctity of homeownership, we are, de facto, being distracted from tackling the real issue. It was an intended distraction and it is working.

  5. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: ASSOCIATIONS, HELOC, junior lienholders, second mortgages, wrongful foreclosure Livinglies’s Weblog […]

  6. I watched the videos…very scary.
    Here are the effects of aluminum on the body:
    http://www.globalhealingcenter.com/heavy-metals/aluminum-exposure

  7. Enraged, thank you for that video link! Something is making many of us feel badly. We thought it might be the chem trails overhead. I will watch the video.

  8. A new look at what and what “they” are spraying in the sky.

    In one word… MONEY. This is Monsanto at work. Again.

    http://www.whatintheworldaretheyspraying.info/why-in-the-world-are-they-spraying

  9. Jim, thanks for response.

  10. BS packed in BS…

  11. Linda

    Exactly….

  12. Actually, both loans were made by World Savings and of course, no assignments recorded.

  13. Yeah, but not when the first and second are serviced by the same bank, right? The second foreclosed on the first, for example. Same bank for both loans, Wachovia.

    Then our California home was sold in a credit bid to Wells Fargo, who claimed they had nothing to do with Wachovia, even though they are a division of Wells Fargo.

  14. Besides would an association etc have standing to complain about wrongful foreclosure against the homeowner?

  15. I agree with TN

    Very questionable Do you ever really eliminate the first without years of fighting. And what jr lien holder wants that. I think they’re all I the back room working it out

  16. sure java and carie – fight fraud with fraud. what would be the point of that? just to maintain this wrongful foreclosure action that Neil suggests? and i’m not following his logic in the last paragraph – if you’re successful and set aside the sale, that doesn’t mean the junior lienholder “moves up”. it means the first is back and the junior is still junior.

    too much misinformation to process….

  17. Hardly any info out there on a junior doing the foreclosure. and if the first can foreclose on whomever got the deed conveyed to them down the line. Seems like the could..then again.

  18. Interesting, javagold!

  19. i keep thinking, the smart thing to do is, have family members put junior liens on every house and then fight from there

  20. […] FILE WRONGFUL FORECLOSURE ACTIONS July 26, 2012   Uncategorized   No comments “Junior” lienholders Should File Wrongful Foreclosure Actions Posted on July 26, 2012 by Neil […]

  21. http://www.huffingtonpost.com/mark-gongloff/sandy-weill-too-big-to-fail_b_1706111.html?utm_hp_ref=business

    Sandy Weill’s Hidden Message: Banks Would Be Worth More If They Broke Up

    “Former Senator Chris Dodd (D-Conn.), of Dodd-Frank fame, appeared on CNBC on Thursday to harrumph about how unrealistic it was to think of breaking up the banks. Former Senator Phil Gramm (R-Tex.), who delivered the death blow to Glass-Steagall in 1999, on Thursday insisted that big banks didn’t cause the crisis, nervously looking up at the sky the whole time for errant lightning bolts…”

  22. What if the SELLER was not the secured creditor?

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