A debtor may also challenge the validity of the debt in a claim against the bank to stop the foreclosure and sue for damages. In a foreclosure proceeding, the lender bears the burden of proving that there was a valid debt. There is case law to support the debtor’s case: First National Bank of Montgomery vs. Jerome Daly, 1969, in the Justice Court State of Minnesota the Judge ruled in favor of the debtor on December 9, 1968: IT IS HEREBY ORDERED, ADJUDGED AND DECREED: 1.That the Plaintiff is not entitled to recover the possession of Lot 19, Fairview Beach, Scott County, Minnesota according to the Plat thereof on file in the Register of Deeds office. 2.That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void. 3.That the Sheriff’s sale of the above described premises held on June 26, 1967 is null and void, of no effect.That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void.
The economic environment of today has seen home foreclosure become a serious problem. Property foreclosure is not only a problem for millions of Americans, but it is become an enormous problem for money lenders as well. Avoiding property foreclosure through Loan Modification has not only become more common, it has literally turned into one of the largest industries in America today!
The process of loan modification may not be common knowledge to the people that are in need of it, banks, loan service providers, and mortgage lenders are very aware of how it can help home owners keep their property. Almost all of these organizations have established a Loss Mitigation department designed to negotiate with homeowners that are experiencing difficulty making their mortgage payments and are subject to home foreclosures.
Unfortunately many individuals are reluctant to speak with their mortgage lender primarily because they are afraid of how their lender will react and by past bad experiences with other debt collectors. Negotiating directly with a lender’s loss mitigation department concerning a loan modification is a completely different type of conversation. Your mortgage lender may have more to lose than you do so talk to them and try to come to a resolution. Money lenders do not want your property back, they simply want to get their money, and if you can show them how you will continue to pay they will be more than willing to work with you!