Mortgage Debt Wipe Out! MFI-Miami Client Gets Judge To Wipe Out 1st Mortgage With PHH Mortgage. Then Gets SPS To Lower Balance On 2nd Mortgage From $128,000 to $25,000
It all began when our client, Phyllis’s husband, Dennis started getting sick.
The house went into foreclosure. Thankfully, for Phyllis and Dennis, New York judicial foreclosures have a history of taking 3-5 years of litigation.
Tragedy soon struck the family as Dennis passed away. Phyllis was naturally distraught over the death of her husband.
Unfortunately, Dennis hid the foreclosure from his wife. Soon, Phyllis began getting court notices from the Westchester County Supreme Court.
Fortunately, Phyllis had three things in her favor. First, the foreclosure on the first mortgage was being conducted by PHH Mortgage which now owned by Ocwen. Second, it was still in it’s infancy. Third, New York judicial foreclosures take 3-5 years to litigate if contested.
Phyllis called us in a panic. I discovered she was working with a attorney MFI-Miami worked with at the time. I reviewed the court records and received the file from PHH Mortgage/Ocwen. Afterwards, the attorney and I discussed the serious compliance issues in the file.
The lawyer then successfully convinced the Westchester County judge to dismiss the Ocwen/PHH Mortgage foreclosure complaint with prejudice. This means Ocwen/PHH Mortgage or any future service cannot refile the case. Judge followed this up by filing an order discharging the mortgage lien. Thus, this sealed Ocwen/PHH Mortgage’s fate for ever.
Phyllis now had more than $180,000 in equity in her home.
Mortgage Debt Wipe Out! Part 2
Unbeknownst to Phyllis, her husband signed a $128,000 second mortgage on the house right before he got sick. He also fell delinquent on this loan too.
Thankfully for Phyllis, Bank of America’s closing lawyer dropped the ball and violated New York law.
New York law requires a spouse sign acknowledgments acknowledging their husband or wife is getting a mortgage on a marital property. Unfortunately for current servicer, SPS, originating lender, Bank of America dropped the ball. Bank of America’s closing attorneys neglected to have Phyllis acknowledge that Dennis was pulling out the second mortgage.
SPS Comes Knocking And They’re Not Selling Magazine Subscriptions!
After his death, SPS had come knocking. They wanted their $128,000. However, they had multiple problems. Phyllis had a superior claim on the house as sole deed holder. SPS faced a second problem. Phyllis wasn’t on the second mortgage nor did she sign any of the required acknowledgments at the closing. Phyllis was on the deed but she wasn’t on the 2nd mortgage. As a result, Phyllis had a superior claim and could not be held liable for the mortgage.
However, that didn’t stop SPS. SPS immediately filed foreclosure after the first mortgage was wiped out.
By now, Phyllis’s head was spinning. She had lost her husband and successfully beat the foreclosure on the first mortgage. Now, SPS was coming after her like a pack of hungry hyenas.
Naturally, she contacted her lawyer. Unfortunately, her previous lawyer was now showing signs of dementia. The attorney’s dementia was causing him to miss deadlines for multiple clients. So, she fired him.
Phyllis Makes A Frantic Phone Call That Saves Her Home And Allows Her To Live Her Dream!
Phyllis then called MFI-Miami in a panic. This call saved her house. We reviewed the loan documents from the second mortgage and connected her with one of our top-notch attorneys.
MFI-Miami discovered the issue from the closing. SPS soon realized they had a problem. As a result, they offered to settle with Phyllis for $25,000 instead of $128,000. Phyllis took the write down. She could have fought it and won. However, it would have cost her $15,000 to $20,000 in legal fees. Especially if SPS decided to appeal the ruling.
By this time she wanted the whole ordeal with the house to be over with. She wanted to move to Florida to be closer to son and grandchildren
So, she took the deal with the condition it could be paid when she sold her home. SPS agreed. Now, Phyllis lives in Florida near her grandchildren.