We know some people prefer to read a short book on their computer or in a hard copy rather than watching videos or reading websites.

We have two free books that deal with Stopping Wrongful Foreclosures in Alabama and the Five Common Mistakes Made When You Are Sued For Ejectment After A Foreclosure in Alabama.

We are setting up form to request these books but until that is completed you can call us at 205-879-2447 or leave us a comment below and we will get in touch with you.

For right now, we are putting our entire book on Ejectment lawsuits up.  We will take this down soon but we wanted you to be able to read it right now without taking any other action.

 

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Who Am I?

Before we get too far into this, let me tell you a little bit about who I am. My name is John Watts. I’m a lawyer in Birmingham, Alabama. I’ve been practicing for about 15 years.

There are three main areas in which I practice. One is in helping people dealing with foreclosure. I help them if they are facing a foreclosure, or maybe there has been a wrongful foreclosure that has already occurred.  In this call we are going to focus on the lawsuit or “ejectment” part – where the mortgage company is trying to kick you out of your house.  We also have a book that discusses in more detail when a foreclosure in Alabama is illegal and you can request this for free if you live in Alabama.

Another area is dealing with debt collectors and the Fair Debt Collection Practices Act. We really won’t touch on that much, but it can relate to foreclosures. Often the company that you’re dealing with when facing a foreclosure is governed by that law. They are considered debt collectors. That does have some application when we talk about foreclosure.  We do have several books and calls related to abusive debt collectors so let us know if you are interested in receiving these

The third area we primarily deal in is the Fair Credit Reporting Act. That deals with errors on credit reports. That can apply in a foreclosure. If you were not properly in foreclosure but the mortgage company is telling Equifax, Experian and TransUnion that you’re in foreclosure, that’s going to have a devastating effect on your credit report.

All these areas come together. For the purpose of this call, we’re going to primarily focus on the ejectment suit aspect.

 

Additional Resources

If you would like more information, I can give you a couple of sources. One is our primary website, www.AlabamaConsumer.com. Another is our primary blog at www.AlabamaConsumerLawBlog.com.

If you’re reading this report, you’re probably getting our Consumer Power newsletter. If not, feel free to call me at (205) 879-2447, or shoot me an email at John@WattsLawGroup.com. This is a Thursday morning email newsletter that we send out. We try to have something funny, interesting or motivating at the beginning of the email. Then we get into a particular area of consumer law.

 

Overview

I’ll give you an outline of what we’ll do today.

We’ll talk first about the stages of foreclosure. We’ll talk about before the foreclosure sale, after the foreclosure sale, and then once the ejectment lawsuit is filed.

We’ll focus on the ejectment lawsuit, but I want to make sure we have the background.

Let’s quickly run through the five mistakes that Alabama consumers often make:

Mistake #1: Not answering the lawsuit.

This is the most critical mistake. If we don’t answer the lawsuit, we will lose. There is no other way to say it. Whether the company suing for ejectment is right or wrong, it doesn’t matter. If we don’t answer, we lose.

The second mistake explains why people often don’t answer.

Mistake #2: Assuming that nothing can be done after the foreclosure sale.

We’ll talk for a moment about judicial versus non-judicial foreclosures. Here in Alabama, we have non-judicial foreclosures. Once the house is sold, many people wrongly assume there is nothing that can be done. That’s why they don’t answer the complaint.

Mistake #3: Assuming that the mortgage company (or whoever it was that foreclosed on the house) had the right to foreclose.

Some people call this “standing,” and what is meant by this is that the company doing the foreclosing has to have the legal right to do this.  If they don’t, then they lack the standing to foreclose and any foreclosure by this company will be a wrongful foreclosure.

Mistake #4: Assuming that the foreclosure process was lawful and valid.

People think, “It happened, and they must have done it right.” That’s not always an accurate assumption.

Mistake #5: Failing to file a counterclaim.

This is when folks have potential claims they can bring against a mortgage company that is suing to eject or evict them from their home, but they fail to file counterclaims. In other words, when people have been sued, they have the right to countersue or file a counterclaim, but they don’t do that. We’ll talk about some of the consequences of that.

 

The Three Stages of Foreclosure

Before we get into the five mistakes, let’s lay a little background about what type of foreclosures we have in Alabama and the three stages of foreclosure.

As I mentioned a moment ago, we have what is called a non-judicial foreclosure. Some states such as Florida have judicial foreclosure. This means that any time a mortgage company wants to foreclose, they have to file suit and have a judge agree that foreclosure is proper. That’s why in Florida there are tens of thousands of these lawsuits. In Jacksonville, Florida there were something like 14,000 foreclosure lawsuits filed in 2009 alone. You can only imagine the number in Miami, Orlando, and other cities.

Alabama is a non-judicial foreclosure state, and so the court is not involved. All the mortgage company has to do is to let you know that it is deeming or declaring you to be in default and that the entire balance is owed. That’s what’s called an “acceleration letter.”

Then the company will do three weeks of advertising. During that time period, the pending foreclosure sale will be advertised in whatever newspaper is in your county. If you’re in Jefferson County, it’s in The Alabama Messenger, which is a newspaper nobody reads except for lawyers and real estate agents. If you are outside of Jefferson County, it is normally the major newspaper of your county (although sometimes it is not).  Whichever newspaper it is in, the mortgage company will advertise in it for three weeks.

Then there’s a guy at the courthouse steps who literally reads a notice and the sale happens. It’s a lot like repossession in that the lender or company that claims to have the right to collect the money on the note simply goes and does the foreclosure.

The difference between repossession and a non-judicial foreclosure is they can’t actually physically get your house and get you out of the house until they sue you. That’s why we see these ejectment lawsuits being filed more often.

The company that now owns the house, nine times out of ten, is the company that was doing the foreclosure. In other words, in this market, we don’t see big crowds of people out there bidding on houses because so many people are upside down and owe more than the house is actually worth.

Normally it’s the mortgage company itself that actually does the foreclosure. The company that does the foreclosure buys it, and then files the ejectment lawsuit against you.

That’s the background for how we get to where I assume everybody reading this special report is – facing ejectment.  If you are not personally facing an ejectment suit, then perhaps you have a friend or family member facing a suit so you’re trying to learn more information.

Let’s jump right into these five mistakes.

 

Mistake #1: Not Answering The Lawsuit

The first and most critical mistake is true of any type of lawsuit that is filed. We see this all the time in collection lawsuits where the debt collectors or debt buyers will file suit against somebody.

From 70% up to 90% of people simply do not respond. They do not answer the lawsuit. They don’t think about it, or they think there’s nothing they can do. Whatever the case, they do nothing and the court enters what’s called a “default judgment.” A default judgment means we lose automatically.

The same is true of these ejectment actions. Most people simply don’t answer the lawsuit (complaint).

When I say “answer,” I mean to file a response in court where you deny or challenge the allegations of the plaintiff. The plaintiff is the mortgage company. They’ll say, “You fell behind. We properly foreclosed and properly bought the house, and now we want to kick you out.” If those things are not true, you want to deny or challenge the allegations.

Normally in an ejectment lawsuit, you have 30 days to answer from the time you’re served. “Served” means you received certified mail or somebody handed it to you or to an adult living in your house. When you get that piece of paper, that lawsuit or complaint, the clock starts running. If there’s any doubt about when that clock started to run, call the court.

There’s a clerk’s office in every county in Alabama. You can call the court and say, “This is my name. Does the court show me being served? When does it show me being served?” Then you’ll know what the time limit is.

When you go beyond 30 days, these companies will file a motion for default judgment. They say to the court, “We sued this person and they didn’t respond. What we’re saying about them must be true.” That’s why it’s so critical to answer.

If they file that motion for default judgment and the court enters the judgment against you, it means the court has determined that this was a proper foreclosure and you are supposed to be ejected, evicted or kicked out of your home. The next thing that happens is the sheriff comes and helps you get out of the home.

What we have often is an improper foreclosure. The people never should have been ejected or evicted from their home, but they did not answer the ejectment lawsuit. Then they want to go back later and explain to the court why it was a wrongful foreclosure and why the ejectment should not have been granted, but in court there are certain time limits.

If we don’t respond, there are bad consequences. One of those consequences is that the court will say, “I made my ruling.” It’s very difficult to get the court to undo a default judgment, particularly when we know that we were served with a lawsuit and we just chose not to answer it.

That is by far the biggest mistake we see made in ejectment lawsuits – simply not answering it.

One reason people don’t respond is they’re in a state of denial. “This can’t be happening! I can’t be losing my home.” Maybe this is where their children have been or are being raised or it’s their dream home. Whatever it may be, people sometimes say, “I refuse to believe this is happening. I refuse to believe a judge would actually rule against me.”

If we don’t answer, if we don’t follow the rules of the court, the judge doesn’t have a choice. He or she has got to rule against us.

This is the biggest mistake. If you get nothing else out of this book, remember this:  Answer the lawsuit.

Go meet with a lawyer. If you’re in Alabama, you can meet with us, or you can meet with other lawyers that you find that do this type of work. If you’re somewhere else, go to www.NACA.net. It has a place to find an attorney in your hometown.

Do something. File a response to that lawsuit so you don’t automatically lose.

The date of this call is February 9, 2010. We had a Super Bowl not many days ago. We had two teams. The New Orleans Saints won that Super Bowl. If they played it again next week, maybe the Colts would win. I know this: There was only one game, and the Saints won. If the Saints had not shown up to the game, they wouldn’t have won.

If we don’t show up, we lose automatically.

I spend a lot of time on this because I really want to try to hammer this point home. We must respond to the complaint. Don’t make that critical mistake of failing to respond. Instead, respond to the lawsuit and at least you have a chance in your case when you do that.

 

Mistake #2: Assuming That Nothing Can Be Done
After the Foreclosure Sale

When we talk with people, particularly those people who maybe haven’t responded to an ejectment lawsuit, and we say, “Did you know that you have been sued?” they say, “Oh, yes.”

“Did you know that there’s a foreclosure?” “Yes, I knew that.” “Did you know that you only had 30 days to answer?” “Yes.” “Why didn’t you answer?”

They say, “Because there’s nothing I can do about it. The foreclosure has already happened. What chance do I have?”

Don’t make that assumption. I’m not saying that in a critical way because there are a lot of factors to why people believe this, but trust me on this. I’ll give you some evidence to back it up.

One reason why people believe this is they will often call around to attorneys. I can’t tell you how many people have come into our office facing an ejectment lawsuit and said, “I called attorney after attorney and every one of them said, ‘Has the foreclosure sale happened?’” They’d say yes and the attorney would say, “There’s nothing I can do for you.”

That is the attitude of a lot of attorneys. Part of that comes from the fact that most people that are facing this type of situation with a foreclosure will talk to a bankruptcy attorney. They get advertisements from bankruptcy attorneys. They look in the Yellow Pages and online and see all these bankruptcy attorneys that talk about stopping foreclosure.

They can do that. There are ways to use bankruptcy laws to stop foreclosure. We don’t file bankruptcy. That’s not our model, but that works for some people – but only when the foreclosure has not yet happened.

This is why so many people will call lawyers and the lawyers will say, “There’s already been a foreclosure sale, so there’s nothing I can do to help you.” That reinforces the belief that it’s too late and there is nothing that can be done.

They talk to friends, family members, coworkers, and people at church and at the Little League ballpark. All these people may say, “If your house has already been sold at foreclosure, you’re done. There’s nothing that can be accomplished here.”

Let me tell you why that’s not true.

The reason that’s not true is the foreclosure may have been improper if the company doing the foreclosure violated the law. In other words, when somebody comes in and buys your property, if the whole process was flawed, then what they bought, in our judgment, is not a valid deed. They don’t really have the right to eject you from your home.

From a purely legal standpoint, you may have more rights or a better case if the foreclosure sale has already occurred and it was done improperly.

Sometimes we file suit before foreclosure to try and stop the foreclosure, and then the mortgage company will say, “We weren’t really going to foreclose. We knew we lied to your people,” or “We knew we were doing it in the wrong county,” or “We knew we hadn’t advertised it. We weren’t really going to foreclose, so your person has no injury or damages.”

We covered a lot of this in our special report on “4 Secrets to Stopping a Wrongful Foreclosure in Alabama.” If you don’t have that, feel free to email me at John@WattsLawGroup.com, or you can call my office at (205) 879-2447 and we’ll get you a copy. I won’t repeat all of that information but we’ll touch on it just a bit in this book.

If that same mortgage company forecloses in the wrong county or after they’ve lied to you, if there’s been any wrongful conduct during the foreclosure process, then you may be in a better position than you think, even if you’re being sued.

That means this mortgage company is coming to court and putting themselves before the judge and saying, “Judge, we want you to look at what happened and say that we did everything right and this person needs to be evicted.”

If they didn’t do everything right, if they broke the law, if they lied to you or broke the contract, then they’re in a bad position. Now they are in front of a judge.

Remember, Alabama is a non-judicial foreclosure state. It’s like the repo guy. They have a wonderful advantage in it being non-judicial. The flipside of it is we require strict compliance with the law.

We’re not going to let these mortgage companies do all this stuff privately and then break the law. Strict compliance with the foreclosure laws is required. If they have not done that and then they have the audacity to sue you and try to kick you out of your home, they’ve got some problems.

Never assume, “The foreclosure sale happened, so there is nothing I can do.” In our experience, that is simply an incorrect assumption.

 

Mistake #3: Assuming The Mortgage Company
Had The Right To Foreclose

Another incorrect assumption is when we see people just assuming that the mortgage company that did the foreclosure actually had the right to foreclose.

I want to define a couple of terms here:

We’ve got the note, which is the debt. That’s the $150,000 at 8% interest for 30 years.

We have the mortgage, which gives the lender the right to have our home if we don’t pay that note. That ties the debt to the dirt. It ties the note to the house. Otherwise, it would be just a really big personal loan.

Typically what we have in transactions that occurred in the last 10 years or so is the company that made the loan is called the “originator.” Sometimes there’s a company before that, but we’ll just make it simple here. The company that made the loan is called the originator.

They don’t want to keep the loan. They don’t want to collect your payments every month and have to wait 30 years before they get their money back. They want to go out and make more loans. The idea is, “We’re really good at making loans, so let’s make the loan. We’ll immediately sell it, and then we’ll make more loans.”

They transfer those loans to a company called a “depositor.” The depositor gathers up all these loans — sometimes 10,000 loans — and then puts them into a trust. There are a lot more steps involved in this, but for our purposes this will be accurate enough.

They put all those loans in a trust, and then people invest in the trust. The trust has to hire somebody to service or handle all these loans. There may be 10,000 loans. That company is called a “servicer.”

Often, the servicer is either the same company or a wholly owned subsidiary company of the originator. If we borrow money from Bank of America, it will go to a depositor that deposits all those loans or assets into a trust. Then the trust will hire a servicer, which often will be Bank of America.

When we talk about this assumption that the mortgage or servicing company had the right to foreclose, we have to challenge and question that assumption and say, “Is that really true?” If it’s true, that’s fine, but if it’s not true, then it has enormous consequences.

Let’s think about this for a moment . . . if the servicer is foreclosing, it can only do this if the owner of the loan (the trust) actually owns the loan.  So, the servicer doesn’t have more rights than whoever owns it.

Therefore, if the trust truly doesn’t own the loan, then the servicer has no right to collect on the loan. It has no right, particularly in what we’re talking about here, to foreclose on the loan. This is not unusual in Alabama foreclosures.

If we’re dealing with a situation where the servicer has no right to foreclose, that means the foreclosure was improper. It means it was a wrongful foreclosure.

When the servicer conducts a foreclosure, they usually are the ones that buy it. It may be somebody connected with the trust who actually buys your house at the foreclosure sale. If it was a wrongful foreclosure, then none of that is proper.

I’m not saying that every single foreclosure involves a company that doesn’t have the right to actually foreclose. I will say that I’m not sure I’ve seen a situation where the company does have the right to foreclose. Maybe it’s out there. Maybe somebody properly transferred all these loans, but part of why we’re in the mess we’re in today from an economic and financial standpoint is all these players in the mortgage industry got very sloppy and careless.

To some extent, there was a lot of fraud. We’re going off on a tangent here, but there’s a very fascinating company that now no longer exists on Wall Street. Part of what it did was look for fraud. Not fraud against homeowners, but fraud by these various mortgage companies to each other.

What it found was that there were some of these companies that would make a loan and then sell that loan to four, five, six and even seven different trusts. They were getting paid five, six and seven times for a single $100,000 loan. Nobody was keeping track of this stuff.

It’s possible the foreclosure was legitimate, particularly if you’re dealing with a local bank that has just a couple branches and actually keeps the note and you make your payments to them. That’s probably fine, but for most loans from banks like Bank of America, Deutsche Bank, Wells Fargo and other places like that, typically there will be a trust involved.

While we don’t know for certain that the foreclosure was wrong in that the servicer did not have the right to do it, it at least needs to be examined. We don’t need to assume that it was right.

We need to say, “I don’t know if it’s right. Let’s check it out and look at the documents.” Sometimes we can tell from the documents pretty easily, and other times we can’t tell. But just because we can’t always tell at the very beginning of a case doesn’t mean we shouldn’t look at it at all.

We need to examine it and say, “Did this company that foreclosed have the right to do so?” If they didn’t, then the ejectment action is improper. We have a company that not only foreclosed on us, but now is going to court and trying to get a judge to bless their efforts to steal our home. If they didn’t have the right to foreclose, that’s called stealing.

We definitely want to challenge this assumption, and at least look into it.

We’ve looked at the first mistake, which is not answering the complaint. Then we looked at the assumption that really is the cause of that first mistake.

That second mistake is assuming nothing can be done, and that’s simply not the case. I don’t care if the foreclosure has already happened. If it was wrong, then assuming the statute of limitations has not expired or we haven’t failed to answer an ejectment action (I’ll get to that – that’s our last mistake about failing to file a counterclaim), we still have the option to bring suit against the people who committed a wrongful foreclosure.

The first mistake is not answering, the second is assuming nothing can be done, and the third mistake is assuming the mortgage company had the right to foreclose in the first place.

 

Mistake #4: Assuming That The Foreclosure Process Was Lawful And Valid

The fourth mistake is assuming that the foreclosure process itself was lawful and valid.

This is going to be a quick summary of a lot of what we talked about in our special report on wrongful foreclosures in Alabama. Let me just say it this way. A lot of times people assume that if this big company out there, Bank of America or whoever it may be, says that I’m behind and in default of my note and mortgage, then that must be true.

All these charges that have been incurred, like inspection fees, property preservation fees, forced-placed insurance, various late fees and all of this type of stuff maybe are improper. Just because they say you owe it, doesn’t mean that it’s accurate or true.

There are many cases when judges have come down on these mortgage companies because they cannot even apply a payment correctly.

You would think if nothing else, they could take your $1,000 a month mortgage payment and do a certain part to interest and a certain part to principal. That would be pretty easy. But it’s amazing the errors that are made. So often, people mistakenly assume, “If I get this piece of paper from Bank of America Servicing or this or that company, it must be correct.”

We have people that have been told there will be no foreclosure while they’re considering a loan modification, and then the day after they’re told that the foreclosure happens. The next day, they get a loan modification package. Then the next day, they get a letter that says, “You’ve got to get out of your house. We’ve foreclosed on you.”

People assume they can do that. It’s a big bank, so surely they wouldn’t do anything wrong. That’s a terrible assumption to make.

Let’s look at some of the ways in which a foreclosure can be improper or unlawful.

One, we briefly mentioned. We have all these charges that mortgage companies, particularly servicing companies, love to impose. These are things like inspection, property preservation, and lawyer fees for foreclosures. These different fees and charges are where servicing companies make their money. People assume these charges are correct, but we need to look at them.

For example, I had somebody in the office the other day. They’ve always been living in their home. There’s no damage to their home. It’s not like they have a big hole in their roof or anything like that. Multiple people clearly live there.

All of the sudden, they get a $600+ asset preservation fee. They’re thinking, “What in the world is this?” They could assume this is right, or they could challenge that assumption and say, “Wait a minute. What is this charge, and what right does the company have to charge me this?”

That’s a charge that companies use when somebody has abandoned their house and maybe the roof is caving in or the windows are broken. They’ll send a crew in to fix it and preserve it. That makes a certain amount of sense, but they charged this person when nothing was wrong with the house.

Here’s the whole key to all these charges: They are automatic charges. A computer automatically spits out the charges whether or not anybody actually goes and inspects or preserves the property. It doesn’t matter. This is an automatic system, and these charges get cranked out by the computer.

The other thing we look at is where is the authority for these charges? Where did you agree in your contract to pay these charges? You certainly don’t want to assume that all these charges are correct. They need to be examined.

If you get your credit card statement and it has a $500 administrative charge, you’ll think, “What is that?” You’d call Bank of America, CitiBank, Discover or whoever it is and say, “What is this? Explain to me what this $500 administrative charge is.” We would be very concerned about that if we have a credit card with a $1,000 balance and suddenly there was a $500 charge we don’t understand.

What is unfortunate is that often people would spend a lot of time trying to correct that mistake or error on a credit card but if it’s on their house, they say to themselves, “Well, I assume they can do that.”

Let’s not assume that. Let’s dig in and find out. There are various ways we can find out if these charges are correct.

Was there fraud? In other words, did the servicer or mortgage company lie to us? Like the example I mentioned earlier, did they say, “We will not foreclose while we are considering your loan modification,” and then they foreclosed? That’s lying.

Fraud is made up of four elements:

1. There has to be a lie or misstatement.

2. It has to be something important, what the law calls a “material fact.”

3. There has to be reliance.

We have to believe in that lie, and it has to be a reasonable or justifiable belief. If somebody sells us the Brooklyn Bridge, they may have lied to us and it may be important, but it’s not reasonable to think we can buy the Brooklyn Bridge.

4. We have to be harmed by it.

Here’s where we often see this. A company will advertise a foreclosure, but then they will tell you, “We are not going to foreclose until we give you a decision on this loan modification.”

Naturally, when they say that, you say, “Thank you.”

You can relax and think, “I’m not going to lose my home,” and you don’t explore other options.

You don’t go to see a bankruptcy lawyer. You don’t go see a lawyer who specializes in the type of law we practice. You don’t see if there is a relative that can buy out the loan. You’re relying on and believing that mortgage company.

Who else would know? Who else in the world has any idea if Bank of America is going to proceed in a foreclosure against you other than Bank of America? They are the perfect people to ask, so it’s perfectly reasonable to believe them or rely upon what they say.

Like I mentioned before, if you call a bankruptcy lawyer after they foreclose, they’ll say it’s too late to do anything. It’s too late to find somebody that perhaps could have caught you up on your payments.

If we find fraud, we definitely want to explore that, even if the foreclosure sale has already occurred. We don’t want to assume that the foreclosure sale was proper or lawful. Instead, we want to challenge that assumption and find out if it was really proper or not.

Another example of a wrongful foreclosure ties into our last point. Did the company that foreclosed even have the right to foreclose? Assume every charge was correct. Did they have the right to foreclose? If they didn’t, it’s a wrongful foreclosure.

You may owe money and be three months late, but that doesn’t mean I have the right to foreclose against you, because I don’t own the loan. It’s got to be the right company that forecloses. If the wrong company foreclosures, that’s a problem.

There are two other examples of a wrongful foreclosure. Force-placed insurance is a big one. That is simply where the mortgage company, or normally a servicing company, says, “You did not keep up your homeowner’s insurance, so we are buying insurance for you and sticking it on your property.”

That’s where the expression “force-placed” comes from. Whether you want it or not, they are shoving insurance onto that property.

This insurance normally only protects the lender. It doesn’t protect you if there’s a fire, water damage or whatever the case may be. The other thing is it’s normally multiples of what normal insurance would cost. If your homeowner’s insurance is $1,000 a year and the servicer says, “We’re going to force-place insurance,” that may be $4,000 a year.

If we don’t keep up our insurance, the company has the right to force-place insurance. Whether they can make it that expensive is another issue, but they have a right to make sure their security interest is being protected.

Here’s the problem: It’s not unusual for the mortgage company to do that when you already have insurance and they have proof of it. Somehow it gets into their system that you do not have insurance. They will force-place that bogus type of insurance.

We’ve seen clients write and call the servicing company or have their insurance agents send proof to the servicing company, but the force-placed insurance still stays there.

You can imagine that all of the sudden, boom, there’s $4,000 in charges. You’re going to start falling behind. If you have escrow, it’s going to wreck your account. That can be the deciding factor that leads you down the road to foreclosure. Now they say your payments are late and you’re not paying enough.

Again, we don’t want to assume the foreclosure was proper. We need to examine everything that happened.

This is something that’s always been very annoying to me. These companies have what is called a “suspense account.” It’s kind of an account that they stick money into. They say, “If your payment is $1,000 and you send us $800, that’s not a complete payment. Instead of applying it to principal or interest, we’re going to stick that in a suspense account and it will just sit there.”

Except it doesn’t just sit there. Think about it. They’ve got 10,000 or 100,000 loans. They gather up that money, and they can loan it out overnight. Corporations swap money back and forth. In other words, they’re making interest off of that money. They don’t have an incentive to put it toward your payment. They have an incentive to keep putting as much as they can in a suspense account.

We see this a lot in chapter 13 bankruptcies where people are making payments to the court. All the payments end up going into a suspense account.

Every month, the mortgage company says, “You didn’t make your payment. There’s another late fee. You’re behind, so we’re doing an inspection of your property. Now you’re three months behind, so we’re doing a property preservation charge against you.” All the while, there may $10,000 in a suspense account. These Wall Street geniuses who wrecked our economy will say, “We don’t know how to transfer it out of the suspense account so we had to foreclose on you.  Why are you now fighting back?”

My point is that we need to examine whether or not the foreclosure process itself was lawful or improper.

 

Mistake #5: Not Filing A Counterclaim

Our last mistake is not filing a counterclaim. We talked about how so often people don’t answer, so there’s a default judgment. They assume nothing can be done and that the mortgage company has the right to foreclose. They assume that the foreclosure itself was proper. The final thing is not filing counterclaims.

If you read our special report on wrongful foreclosure or look on our websites, www.AlabamaConsumer.com and www.AlabamaConsumerLawBlog.com, we have articles about foreclosure. You’ll gain all of this information and think, “They did bad stuff to me. They lied to me. They never had the right to foreclose.” If you don’t do anything with that, then it’s no good. We might as well not know it. We’ve got to have the knowledge plus the action.

In this context, if we know that we have legitimate claims against the mortgage, servicing or trust company, whoever it may be, we have to bring some of those claims as a counterclaim, or we lose those claims automatically. Some, we may have a choice on. We have to look at your specific situation. It’s a unique situation, and we’ll give you our judgment on it.

In most circumstances, it’s wise to go ahead and bring all your claims as a counterclaim against the company that is suing to have you ejected or evicted from your home. We have seen situations where people don’t bring those counterclaims until a year or two later, and they run into trouble.

I’m not saying it’s always right for a judge to deny a homeowner the right to bring those counterclaims, but my suggestion is don’t put yourself in that position. Let’s go ahead and bring those counterclaims. We won’t have to face any argument that we waited too long or run into a statute of limitation (time period to sue) issue.

In most cases, those are not legitimate reasons to prevent us from bringing a late counterclaim, but why give this company that has cheated you and broken the law any defense or argument to try to avoid responsibility for what they’ve done?

If you have a claim, it’s a good idea to strongly consider bringing that as a counterclaim or countersuit against the company that’s suing you and any other companies. Often these trusts have what’s called a trustee, who may be the one that sued you. You can counterclaim against them and the servicer. Bring the servicer into the lawsuit and file a counterclaim against them.

 

You Must Take Action

What’s the bottom line or take-home message? Here’s what I want you to leave this book with: Understand that just because there has been a foreclosure, it does not mean the story is over. It does not mean that you have lost or are somehow without your legal rights.

So many people feel that way, and it’s such a tragedy. Sometimes they come to us long after it’s too late for us to do anything about it and we know in our heart that they are right and were done wrong by this mortgage company. We can’t do anything about it because they waited too long.

Don’t assume that. Instead, think about these five mistakes and do the opposite.

Instead of not answering the complaint, answer the complaint.

Instead of assuming nothing can be done, assume that if somebody has cheated you and broken their contract, you can do something about it.

Instead of assuming that the mortgage company had the right to foreclose, say, “I’m going to check that out. I’m going to see if they really did have the right to foreclose.”

Instead of assuming that the foreclosure was proper and lawful, say, “Let me go back through and see exactly what happened. Let me examine that and see if it truly was a proper foreclosure.”

Instead of not filing a counterclaim, our suggestion is to strongly consider filing counterclaims if you have any legitimate claims that you can bring.

How do you figure all of this out? The short answer is you’ve got to educate yourself on this. How do you do that? You can research online. We have information on our website, www.AlabamaConsumer.com, and we’re continuing to add to it. We’ll have videos and other things that will be helpful on this subject of wrongful foreclosures and ejectment actions.

You can look at our blog, www.AlabamaConsumerLawBlog.com, where we have a lot of information about foreclosures. Some of it is specific to Alabama, and some is national. It will start to give you a good base of knowledge as you educate yourself on this.

The purpose of the special report has been to educate you, and to try to motivate all of us to take whatever action we need to take.

Sit down with a lawyer that does type of work. Find out what your options are.

When my car needs the oil changed, I go to a mechanic because I don’t have the knowledge to figure it out or the time to change the oil or fix the brakes. It’s the same thing with the doctor, doing my taxes, or growing food. I’d rather go to the grocery store.

Sit down with a lawyer who understands these issues, and find out what your rights are for answering this ejectment action. Was this foreclosure proper or improper? Did the company that foreclosed have the right to foreclose? Or was it a company that had absolutely no right to do what it did?

Sit down with somebody and find out your options. If a lawyer does this type of work and will not sit down with you and explain the various possibilities and the good or bad of each, I would be a little concerned.

I know there are lawyers that say, “There’s only one way to do this. I don’t need to talk to you. This is what you need to do.” That would make me a little concerned because you have a unique situation and you need somebody who’s willing to spend the time with you. The lawyers that do this type of work should be willing to sit down and talk with you.

If you live in Alabama and you want to talk with us, we’re more than happy to do that. You can email us. My direct email is John@WattsLawGroup.com. You can call my main number, (205) 879-2447. We have a receptionist that answers typically from about 8:00 in the morning to 8:00 at night, and even on the weekends for five or six hours each day.

The receptionist can take your information and get you to the right member of our team so we can talk to you and start understanding your specific situation.

If you live out of state, find a lawyer that does this type of work. You should get the same treatment.

It is very important for you to know what are your rights are. How do they apply specifically in your situation with the statements that were made to you, the charges that were filed against you, and with the advertisement for the foreclosure that was imposed upon you?

Find out what your options are. Then you’re in a position to make the best decision. What do you want to do? Do you want to fight this, or do you want to leave your home? You’ll be able to make an informed decision.

There are a lot of things we did not cover. There are certainly a lot of exceptions and things we could say. My hope is that this time we have spent together has been helpful to give you a little bit of knowledge and encouragement to find out exactly what your rights are, and then take action.

If you’ve listened to our teleseminars or read our other special reports, you’ve heard this theme over and over. We’re trying our best to make this clear, and to encourage everyone to learn what our rights are and take action. If we don’t, the bad guys win.

If we don’t know what our rights are, these mortgage companies can do whatever they want and there’s no penalty to them. If we do know what our rights are but we don’t take any action, they still win. They get to take peoples’ homes that they have no right to take.

People are being kicked out of their homes, families are being uprooted, and whole lives are being devastated by this. We have these mortgage companies doing wrongful foreclosures. On top of that, they have the audacity to sue and to have a court issue an order saying we have to leave our home. Then they send out a sheriff.

If the foreclosure was improper, that is absolutely wrong. The only way you can stop it is by knowing what your rights are, standing up for yourself, and taking action.

We hope this has been helpful to you. Feel free to get in touch with us if you have any questions. Our contact information is always on our website, www.AlabamaConsumer.com. Thanks for being with us.