Ingham County Commissioners set to vote on June 12th

Further foreclosure fraud assistance By Roberta M. Gubbins Legal News Since last July, over 140 cases of potential foreclosure fraud have been opened on behalf of Ingham County residents under a grant funded by Ingham County. The program, which Ingham County Register of Deeds Curtis Hertel Jr. began when he became aware of suspected fraud being perpetrated through his office, has helped numerous clients move towards a successful resolution of their case. The County Commissioners initially funded the program with a one-year grant, allowing for re-evaluation after its pilot period. That grant comes up for a vote on renewal on June 12. Legal Services of South Central Michigan, a non-profit agency that provides low-cost legal assistance to low-income families, is the organization that partnered with Ingham County under grant. Perry Thompson, hired by LSSCM, has worked exclusively on the program since its inception. Most of the requests for help have come through a special Foreclosure Fraud Hotline that Hertel arranged within the Register of Deeds office. "We have opened 146 cases since July 1 2011 under the grant," Thompson said, "and we have closed 105, with 41 still open and most of those in litigation." According to Thompson, the common issues with the cases "relate to failure to comply with the Michigan modification law, assignments of mortgages that were not filed, were forged, or were filed at a time when the entity who tried to foreclose could not legally accept them." Several cases, he noted, involved lenders who unilaterally breached loan modification or forbearance agreements and then foreclosed on homeowners who were in compliance with those agreements. "Nearly every case involves failure to comply with modification requirements of programs like HAMP (Home Affordable Modification Program). Asked why the County Commissioners should continue the program, he said: "The value to homeowners facing foreclosure is obvious. They are in financial distress and in many cases could not afford to hire a private attorney even if one was available. And that does not take into account the people that we referred to housing counselors who were able to get loan modifications without litigation, but who would not have known to call the counselor without talking to us first." "Beyond the homeowners directly impacted by foreclosure of their own home, statistically each foreclosure lowers the value of other homes in the neighborhood by about $1500 and a study by the Congressional Budget Office has shown that each foreclosure costs the municipality in which it is located $19,227 in lost tax revenue, increased crime, code violations, and blight remediation." "Our litigation efforts have either prevented or overturned 8 foreclosures so far and 30 more cases are pending. At cost of about $20,000 each according to the CBO study, just looking at the closed cases, the grant resulted in a net gain of $100,000 to the county. The biggest stumbling block, Perry noted to resolving the cases is that the "legal options for enforcing those requirements are extremely limited. So, we end up arguing about technical compliance with the foreclosure statute. This seems like a windfall for the homeowner whose foreclosure is overturned because an assignment was recorded a month too late. But, the back story is that this homeowner was also wrongfully denied, or not even considered for, a loan modification and the only way we can get them considered is to argue about recording requirements because we cannot enforce things like HAMP directly." Hertel believes the program has been exactly what he had hoped for: professional legal assistance for residents who were being illegally foreclosed upon, but were unable to pay for an attorney to help. "I am optimistic that the commissioners will approve another year for this program," said Hertel. "We have aided so many people to stay in their homes, which in turn is great for our county's population and property tax numbers. When the big banks are forced to show up in court and provide the proper paperwork to foreclose, we've seen their cases fall apart. There are so many of our residents that have been illegally threatened with foreclosure. We just need to continue forcing the banks to play by the rules." Published: Mon, Jun 11, 2012

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