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New Strategy to Stall Banks' Foreclosure Gaining Popularity

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By : John Cutts    99 or more times read
As the number of foreclosure homes in the country continues to increase, distressed homeowners are finding more ways to stall the foreclosure process to give them time to save their properties from the clutches of foreclosures.

One strategy that is gaining popularity among owners of foreclosure homes is to require banks and mortgage lenders to produce the documents which show that they hold notes on mortgages.

When this strategy was first reported, it was regarded as a tactic designed to stall the inevitable. The strategy exploited a technicality to allow owners of foreclosure homes to remain in their properties until such time that banks have produced the required paperwork to show that they are true holders of mortgage notes.

However, this strategy works in favor of homeowners who want to have time to explore other options that will help them save their properties from foreclosure.

Meanwhile, the Ohio Mortgage Bankers Association (OMBA) has issued a statement criticizing the strategy as counter-productive.

The OMBA expressed its concern that troubled owners of foreclosure homes would rather focus on how to delay repaying their mortgage than finding ways to repay their loans in order to protect their properties from foreclosure.

According to OMBA, the strategy is not designed to help homeowners permanently stop banks and mortgage lenders from taking away their foreclosure homes.

The OMBA has assured owners of distressed properties in Ohio that it is trying to establish programs and find available resources to help borrowers who are sincere in their efforts to repay their mortgages and protect their homes from foreclosure.

On the other hand, Peggy Lee, a Southeastern Ohio Legal Services lawyer, explained that asking banks to produce the necessary paperwork is not a delaying strategy.

She pointed out that under Ohio’s real estate law, any entity that files a foreclosure case against a homeowner should attach documentation that shows the defendant owes the plaintiff.

In the event that banks could not produce the necessary documents, they have to explain why the paperwork is not available. Failure to explain may lead to the dismissal of the case against the homeowner.

According to Lee, in foreclosure lawsuits that she handles, 3 out of 4 homeowners asked banks if they can produce documents that show they have the right to sue for foreclosure.

This strategy takes advantage of the fact that banks could not keep track of mortgages as they were packaged and re-sold several times.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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