Michigan Zombie Foreclosures: An Army Of Bottom Feeding Lawyers Are On The March To Shake You Down!

Armies of bottom-feeding lawyers armed with thousands of Michigan Zombie foreclosures coming! They are barging down the doors of courthouses across Michigan like Walmart shopper on Black Friday hoping for free money for their clients.

This time around its not first lien holder seeking deficiency judgments. It’s the servicers for the second mortgage who have risen from the dead like a horde of zombie.

Homeowners who faced foreclosure in the wake of the 2008 financial crisis could be served at any time. It was assumed these lenders wrote off the debt or accepted short payoffs from the first lien holder.

Most foreclosure victims have moved on with their lives. They have also made their foreclosure a distant memory. They are now back to sipping their Pabst Blue Ribbons and enjoying the benefits of a robust economy.

Process Servers Show Up At Your Door Years After A Foreclosure Like A Teenager Trying To Tell You That You Are Their Father

So when the process server comes knocking nearly a decade after their foreclosure, it’s quite the shock. It’s kind of like a teenager showing up at your door telling you that you are her father.

Lawyers handling this 2nd wave of Michigan zombie foreclosures are more dangerous and insane than before. They can also permanently scar a person’s credit rating for years.  

Usually, it’s the first lender who foreclosures and people generally square off with them. Once the homeowner lost and the first lender took possession, it’s assumed the 2nd mortgage lender is being paid off. Or the 2nd lender is writing off the loan and walks away sulking.

Normally, that would be how it would go down.

Unfortunately, the financial crisis was such a disaster on the US housing market, that conventional wisdom went out the window. 

Lenders went into panic mode. It became dog-eat-dog and every man for themselves. First lien holders took what money they could from deflated home values. Consequently, they cleared the title on the property and moved on. Thus, leaving the second lienholder holding worthless paper. 

Lawyers Pursuing Michigan Zombie Foreclosures Are Pulling Some Crazy Shenanigans

It’s bad enough that bottom-feeding lawyers are filing these lawsuits nearly a decade after the homeowners were emotionally dragged from their homes. Many times, these cases are garbage and are past the statute of limitations. Yet, lawyers are filing them anyway and pulling shady tricks in the hopes of getting $15,000 or $20,000. 

Michigan Zombie Foreclosure Lawyers Think They Are Contestants On The Price Is Right

It also seems as if the second mortgage holder thinks they are contestants on the TV game show, The Price Is Right. Lawyers claim the homeowner owes four different deficiency balances usually ranging from $15,000 to $28,000 in the complaint.

It’s as if lawyers believe they are bidding on a motor scooter on The Price Is Right. They are hoping the judge is Bob Barker who will tell them what the right price is.

Even the pre-foreclosure Letters of Acceleration make no sense. One homeowner who contacted MFI-Miami about her zombie foreclosure received two letters of acceleration from a law firm hired by an unknown mortgage servicer.

The letters dated 24 days apart state two different very different outstanding balances owed by the former homeowner. The first letter stated the former homeowner owed roughly $17,500 with the second letter stating she owed over $25,000.

Lawyers Are Also Forum Shopping Their Michigan Zombie Foreclosures

There appears to be an ulterior motive why law firms are playing The Price Is Right with the judgment amounts they are seeking.

They are also trying to purposely confuse the courts by saying in one claim that the case is a foreclosure and in the other passing it off as a consumer debt case. The answer simply put is that the collection law firm is forum shopping.

Lawyers are disguising unenforceable zombie foreclosures as consumer debt claims or breach of contract claims in order to seek a judgment against the former homeowner.

Thus, lawyers are seeking judgments from the District Court which has no jurisdiction in handling foreclosures. The District Court threshold is also only $25,000.00. Lawsuits seeking a higher dollar amount must go to the Circuit Court. This is why lawyers play number salad with the judgment amounts they are seeking. 

Also, the homeowner’s rights to the property have already been forfeited. In addition, the property had been sold in 2010.

Michigan Zombie Foreclosure Lawyers Claiming A 10-Year Statute Of Limitations To Seek Judgments

I had a Michigan lawyer call me last month on a case involving a zombie foreclosure on a 2nd mortgage. The lender filed a collection action against her client in October 2019 from a property her client lost in foreclosure in 2009.

The plaintiff is alleging Breach of Contract. However, Michigan has a 6-year statute of limitations on contracts like most states. Michigan has a 10-year statute of limitations on collections on judgments.

The plaintiff is invoking their rights under the 10-year statute of limitations claiming the foreclosure gives them that right. In Michigan, foreclosures are considered de facto judgments. 

Yet, there is one small problem with this argument. The plaintiff didn’t bring the foreclosure action in 2009. The first lien holder did. The first lien holder executed the foreclosure and took title to the property. They then performed a post-redemption sale with a loss of $50,000. Only the first lien holder can invoke rights under Michigan’s 10-year statute of limitations law. 

Call MFI-Miami today to learn more at 248.733.5810.