Foreclosure suit thrown out for missed deadline

A New York appeals court dismissed a couple’s foreclosure case in April, unanimously ruling that the lender had missed a key deadline in its efforts to repossess their Long Island house. As a result, they are able to keep their home … with no more mortgage payments.

Their case, which began 12 years ago, is a familiar saga. Many homeowners are successfully fighting foreclosures on the basis of bungled paperwork by lenders.

Many foreclosure actions are hopelessly flawed

During the housing boom of the late 1990s and early 2000s, banks and mortgage lenders frequently sold home loans to third parties. Homeowners had no control over who their mortgage note was sold to. It was not uncommon for loans to be sold several times. The paperwork was often incomplete, incorrect, lost in the transaction, and in some cases forged by overworked loan processors.

Then came the housing crash and the Great Recession, which led to a record number of loan defaults and foreclosures. Millions of homeowners were railroaded, losing their homes.

But some fought back. When the current mortgage holder attempts to foreclose, that entity is often unable to produce the original loan documents or sufficient proof that they have the authority to foreclose.

Hope for distressed homeowners

In the New York foreclosure defense case, the mortgage company sought to foreclose on a military veteran and his wife. A judge eventually dismissed the case, saying that the lender never properly served the foreclosure notice because the paperwork was badly flawed. The appeals court ruled unanimously that Wells Fargo missed the deadline to refile the foreclosure lawsuit. As a result, the couple owns their home free and clear.

Wells Fargo may appeal the ruling, especially in light of the fact that dozens of homeowners are fighting foreclosure on similar grounds that the deadline expired.

Bridgewater attorney Rajeh A. Saadeh has successfully challenged foreclosures. But fighting foreclosure is fact-specific and not always feasible. He also negotiates with lenders to rework loans or buy additional time for clients who are behind on their mortgage, in order to keep their homes and salvage their hard-earned equity.