A lawsuit has been filed against lenders, Fort Washington, Pennsylvania-based GMAC Mortgage LLC and Santa Ana, California-based Deutsche Bank National Trust Co. to stop them from foreclosing two homes in Massachusetts.
According to the lawsuit filed before the Suffolk Superior Court, both out-of-state lenders lack the legal right to foreclose two homes in the state of Massachusetts because they failed to obtain necessary documents to prove that the mortgages were assigned to them.
The lawsuit was filed on behalf of Hyde Park resident Regine Michel and Darlene Manson who resides in Stoneham.
Last March, Manson’s home in Stoneham was foreclosed. She will soon be evicted from her house where she had lived for almost 35 years.
Meanwhile, Michel’s home in Hyde Park where she is living with her two daughters will be included in a foreclosure sale in December 2008.
Gary Klein, a Roddy Klein and Ryan attorney who represents both women, said that GMAC and Deutsche purchased both mortgages on secondary market. However, both lenders failed to complete the paperwork required under the Massachusetts law to prove that the mortgages are already assigned to them.
The case against GMAC and Deutsche underscores the disorganized way financial companies buy, package and sell mortgage properties to third parties. Klein is blaming the lending industry for the disorganize foreclosure process in Massachusetts.
He pointed out that most often, paperwork for the acquisition of mortgages is given to private parties and not to the registries of deeds, and lenders push through with the foreclosure process before completing the necessary documents.
Klein plans to file class-action suit on behalf of borrowers who were in similar situations with Michel and Manson. This will provide homeowners ample time to live in their homes and to find ways to avoid foreclosure, such as availing of a federal rescue program.
The lawsuit against GMAC and Deutsche alleged that the foreclosure process in Massachusetts has become a lawless and undisciplined way to seize properties.
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