Couple Heads Off Foreclosure by Fighting Back
Elghossain of North Brunswick, N.J., a real estate broker who raised four children in the bi-level home, pictured left, used his industry knowledge to fight his case in court without a lawyer after he noticed that the servicer of the loan that sent him the notice of intent to foreclose was not the lender that owned his loan.
"When I got the foreclosure complaint I found out the people suing me was not the people I had been paying. Now I had issues with am I paying the right party, and paying the right bank," Elghossain told AOL Real Estate. "So naturally I didn't continue payments, even though I could've made the payment."
By New Jersey state law, the homeowner is suppose to be notified of various items, including the name of the lender that owns the loan and its contact information.
In its paperwork, loan servicer Bank of America failed to include the names of the lender and the lender's representative in its notice of intent to foreclose, New Jersey's Fair Foreclosure Act, which was enacted in 1995 and has been updated several times.
"The Fair Foreclosure Act is clear, unambiguous, and readily comprehensibly (especially to a sophisticated lender)," according to the opinion written by Judge Glenn Berman of Middlesex County.
Bank of America wanted the judge to expand the meaning of who is a lender so that it would include any "mortgage lender, mortgage investor or mortgage loan servicer that owns ... or is authorized to negotiate the terms of the homeowner's mortgage." Berman said the bank's argument "is misplaced."
Elghossain purchased the home in 1985 and with his wife and refinanced it in 2004 with a local bank called New Millenium Bank for $260,000 at a 6.25 percent interest rate for 30 years. Zillow currently estimates that the home is worth about $295,000, down from a peak of about $485,000 in 2008.
About a month after Elghossain refinanced, New Millenium sold the loan to Countrywide Document Custody Services, which shortly transferred it to Countrywide Home Loans, Inc. Countrywide sold it to the Bank of New York, but maintained a servicing agreement, which was recorded on December 7, 2006. When Countrywide was purchased by Bank of America, BofA became the servicer, but Bank of New York remained the holder of the mortgage.
Bank of New York was one of 24 lenders to file 200 or more foreclosure actions in New Jersey in 2010, reported the New Jersey Law Journal.
"Homeowners in New Jersey don't contest their foreclosures, and they should," said the 50-something-year-old Elghossain. "With all the forgery and fraud, people should contest their foreclosures. That's my advice. If they can't do it themselves, they should consult an attorney to make sure the lenders have complied with the rules."
Elghossain, who was last with Weichert Realty before becoming his own broker with GME Realty, says the financial downturn in the industry took its toll on his business. In November 2009, he missed a payment on his mortgage and he received the intent to foreclose about 30 days later.
"Before Bank of America filed its lawsuit, I wrote them a certified letter saying I'd like to start making my payments again. Instead of taking that with open arms, they never responded and they filed for foreclosure."
Although the family, with two kids still living at home, are still holding on to the property, Bank of America still has the right to come back and serve the Elghossains with a proper notice of intent to foreclose.
For others facing similarly situations, Elghossain repeats, "Fight your law gives you a lot of protection. People say the courts are biased, but that's not my experience." And to buyers of foreclosures, this former real estate instructor says, "Make sure the bank has the right title, or else you'll be facing previous homeowners who find out they still have rights to the title."
Sheree R. Curry, who has owned three homes and once had a Wells Fargo mortgage, is a three-time award-winning journalist who has covered real estate for six years. During her 20-year career, her articles have appeared regularly in the Wall Street Journal, TV Week, and Fortune. She's been writing for AOL Real Estate since 2009 from a Minneapolis-area rental. She seeks a book publisher -- or at least a lender who'll give a reasonable mortgage rate to a self-employed mom.
For more on mortgages and related topics see these AOL Real Estateguides:
- Stop Foreclosure Scammers Before They Scam You
- How to Get a Low Mortgage Rate
- Mortgage Jargon in Simple Terms
- How Much Home Can I Afford?
- How to Buy Foreclosures
- Closing Costs: How Much to Budget
- Guide to Settlement and Escrow