As a foreclosure defense attorney, I have the privilege of being on the front lines in the battles with the banks. I get to see the fraud, misrepresentation, and questionable paperwork first hand. And for the homeowners I represent, they have had the misfortune of seeing the banks’ incompetence up close. For the rest of the country, this hasn’t always been the case.
Based on many comments I’ve heard, most folks used to side with the banks. They held the opinion that if a bank foreclosed on a property, it probably had the right to do so. After all, the homeowner got a loan, and the loan wasn’t repaid. This public opinion–rightfully–is changing.
Recently, the Massachusetts Supreme Court ruled that banks must follow the laws of their state or they could not foreclosure. The court expressly ruled that it wasn’t even a matter of fairness to the homeowner–it was about following the rule of law. Clearly, the court found that the banks in that lawsuit had not followed the rule of law. Kind of scary, considering the consequence of that failure is a family losing their home.
The judges I have appeared in front of are also beginning to give foreclosures a second look. At first glance, the banks have an easy argument to make: there was a loan, the loan became delinquent–hence, a foreclosure. But as anyone who follows this blog knows, residential mortgages aren’t that simple. The overwhelming majority of them have been securitized, making the issue of who owns the loan, and therefore, who might be entitled to foreclose, very complicated.
The American public is also starting to come around on the idea that–surprise!–banks falsify documents to cover their mistakes. The robo-signer controversy finally shined the light on the big banks’ questionable practices.
Most recently, I came across an op-ed piece by Dylan Ratigan that perhaps sums up the change in public sentiment better than anything. Dylan Ratigan was a long-time anchor and host on the financial news network CNBC, which caters to the banking and finance industries. He even hosted a show, Fast Money, that was all about stock trading. The op-ed piece calls out banks for making fraudulent loans and then betting against them, and politicians for not doing anything about it. I think this criticism, coming from this source, is very indicative that there is a major shift in public opinion on the banks.
What does this mean for homeowners facing foreclosure? Quite a bit, actually. It means that the chances of obtaining a temporary restraining order or injunction stopping a foreclosure have increased. It means that judges are more willing to allow attorneys, such as myself, to investigate what really went on with people’s mortgages. In short, it means that families struggling with their mortgage have a fighting chance to stay in their homes.