Challenging the Validity of a Mortgage Loan in Bankruptcy: A Simplified Guide

When people talk about bankruptcy, they often feel overwhelmed and confused by the legal jargon. But it’s crucial to understand these laws, especially if you’re trying to protect your home. One way to do this is by filing what’s known as an “adversarial action.”

An adversarial action in bankruptcy is like a separate lawsuit within the bankruptcy case. In simple terms, it’s a way for you to fight back against a creditor, such as the bank holding your mortgage, by arguing that the debt should not be treated the way they say it should.

The Problem with some Mortgage Loans

Sometimes, banks and other lenders don’t follow the rules when they give out a mortgage. They might mix up the paperwork, or they might not have the right to collect the money they say you owe them.

In legal terms, this can mean that the mortgage is “unsecured.” When a debt is unsecured, it doesn’t have a specific piece of property (like your house) tied to it. That means if you don’t pay it, the creditor can’t automatically take that property from you.

Adversarial Actions: A Possible Solution

If you believe that your mortgage is unsecured, you can use an adversarial action to challenge it. Here’s a simple breakdown of how that works:

  1. **Filing the Action**: You or your lawyer will prepare legal documents that explain why you believe the mortgage is unsecured and why it should not be treated as valid. This can include evidence of mistakes or misconduct by the lender. Here at livinglies we assist in preparing documentation to be used in court filings for adversarial actions.
  2. **Serving the Action**: These documents must be given to the lender and anyone else involved. This is called “serving” the action.
  3. **Response from the Lender**: The lender will have a chance to respond, and they may try to prove that the mortgage is valid and secured.
  4. **Going to Court**: If you and the lender can’t agree, a judge will hear the case. You’ll have to present your evidence, and the judge will decide who’s right.
  5. **Outcome**: If you win, the judge may decide that the mortgage is unsecured and can be treated differently in your bankruptcy. This might make it easier to keep your home or to deal with the debt in a way that works for you.

Conclusion

Challenging a mortgage through an adversarial action isn’t easy, but it’s a powerful tool if you believe your lender has treated you unfairly. It’s vital to have a good support team and a bankruptcy lawyer who understands these issues and can guide you through the process.

Remember, every case is different, so this guide is only a starting point. Talk to a professional about your unique situation. Don’t be afraid to ask questions and make sure you understand what’s happening. After all, this is your home, and you have the right to fight for it.

 

9 Responses

  1. Got it. Thanks.

  2. Where? Need your email.

  3. ANON: just responded.

  4. How goes California, goes New York, goes New Jersey – goes the rest of the county. All began in California. Can someone define what liberal really means? And – Thanks Papergate – “they could never afford that to happen”. After all, they have budgets to oversee. Oh — you mean votes?? MONEY MONEY MONEY. TO who???

  5. Or you could simply file a motion in opposition objecting to the alleged ‘self-serving’ ‘secured’ creditor’s proof of claim and if lucky they cannot or will not appear at hearings and are denied and disallowed in their entirety, rendering their false ‘lien’ claim void by operation of law pursuant to 11 U.S.C. § 502 (claim disallowance) which rendered the ‘lien claim’ void by operation of law per 11 U.S.C. § 506(d). But these guys on Wall Street, DC, will persist in engaging in whatever tactic they can to ensure the ‘debtor’ never prevails. Adversarial proceeding, or not, they have been instructed to block Americans from succeeding at all costs because if just one or two of us regarded as consumer ‘cockroaches’ to them ‘escape’ we will procreate and come back in the millions . . . and prevail so they stop us at the kitchen sink, swatting us with their papers. They cannot afford for us to prevail; even when those of us did prevail with judgments in our favors – barriers were put up to prevent us from going anywhere. Think about it – what is all the wronged homeowners charged into the highest court in DC making the same charges against the legal ward of the GSEs – USG – they could never afford that to happen, so they ensure we are smacked down at all costs. God forbid their actions were allowed to be disclosed – that would definitely invoke a civilian attack.

  6. How did the private label mortgage backed securities (PLMBS) come into existence? Where did they originally come from? The GSEs! All part of the Community Reinvestment Act (CRA). The CRA mandated that ‘banks” fund loans for low/middle income homeowners and then sell them to the GSEs. There was nothing in that for the banks. But Freddie/Fannie were in trouble by low fixed rates. So they worked out deal — the bank servicers to F/F (the big banks were servicers) falsely reported to GSEs that loans were in default/delinquent. GSEs sell collection rights to big bank servicer who then become security underwriters to the PLMBS which was never compliant with Regulation AB for mortgage/asset backed securities. Nothing is funded, the collection rights are restructured into non-compliant loans and securities – for which the top tranches are sold back to GSEs. Everyone in scheme is happy. All getting much higher interest rate. CRA is satisfied. When it all crashes – the homeowners are blamed for buying too much house or using as an ATM. Homeowners get crushed, and big banks bailed out. In the scheme – I don’t think the mortgages ever left the GSEs. It is just void and unsecured. I wonder if truth will ever be told. Barny Frank tried to implement bankruptcy reform to fix it. It was voted down. Remnants of the crisis continue to date.

  7. You can also use rule 2004 option for early discovery in bankruptcy

  8. What I am trying to do in writing all the agencies and regulators is get them to admit that for assigning of all Washington Mutual Bank’s Fed Gov backed loans to Wells Fargo Bank a year before they were shut down was an illegal transfer when the l1/3 million loans were not sold, which made all the loans unsecured loans that once WAMU stopped existing made the mortgage loan stop existing as there was no counterparty to the debt.

Contribute to the discussion!

%d bloggers like this: