I know that the first line of thieves and con artists are viewed by many as the banks and the “servicers” and the “trustees.” But the second wave are those who prey on the emotional turmoil of homeowners and get them to deed their homes into some sort of convoluted entity that will (1) shred the homeowners credibility in court and (2) essentially allow the new thief to get into your living room before the old thief has a chance to do so. In all events none of these schemes will ever do anything substantive to save a home, although some of the schemes may delay the judgment and sale for a short period of time.
THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
With the single exception of recording a notice of rescission I don’t see any plan by which a homeowner can preserve their rights in a foreclosure that is allowed by a judge to proceed. In nonjudicial states there MIGHT be one more: filing a corrective substitution of trustee returning the original trustee to the deed of trust. Anything in the chain of title on public records that is properly filed may well give homeowners a leg up and preserve rights when the issue of title finally comes front and center. The banks are proceeding under cover of title insurance. But in my opinion that cannot last and the title companies will file for bankruptcy protection in many cases.
It will be interesting to see what happens later when courts are faced with the consequences of their own decisions — creating and augmenting a title nightmare. Ultimately I think the rescission will have the effect that Federal law requires. Until then homeowners must seek to preserve their rights. They might find out years later that they still own the home they thought was long gone. This specific strategy requires very little money and certainly does not require deeding your home to another person leaving them to claim the asset and leaving you with the same apparent “debt” you had before.
People facing foreclosures are generally in severe emotional distress. Their home and their lifestyle are being threatened and the likelihood they will lose is in the statistics. As a result their judgment is impaired. In their desperation they will grasp at straws potentially destroying any hope of saving their home.
Although far more homeowners are winning their cases than a few years ago, it is nonetheless true that the deck is stacked against them. Some people, meaning well, have attempted to reverse the schemes from the banks by doing the same crazy documentation tactics that the banks.
Those schemes have failed because of the assumption by the judges that when the banks do it, which might include fabrication and forgery, they are merely patching up the paperwork on a valid debt. When homeowners do it, as Judges see it, it is to escape a legitimate debt. Both assumptions are wrong. Those judges are wrong but it seems counterintuitive.
This underscores the need for a lawyer: just because you found a statute or case that shows you are right and the bank, servicer or trustee is wrong doesn’t mean you will win. Trial court orders and judgments are final even if they are wrong. If you fail to appeal or preserve your rights in some other way, they stay final. Going to a smooth talking nonlawyer is likely the first step in jumping off of a legal cliff. BUT if the nonlawyer is attached to an actual lawyer, the outcome changes.
The problem with some of the schemes is that they are not per se illegal. But they lead to one result — the homeowner pays money and then loses the house. The moral of the story is don’t go with someone who is offering a nonexistent magic bullet. If it is so crispy clear and it works you would have heard about it already. Use a lawyer. Get references. Choose wisely.