A client of mine was recently faced with an unusual twist in his residential foreclosure case. While the circumstances that took him into foreclosure may not be that unusual, a stroke of unlikely good luck for my client made this a very interesting battle to protect his credit.
Several years ago, my client went through a divorce. As part of the settlement, his ex-wife was awarded the house, ordered to make the mortgage payments and refinance it in order to remove his name from the mortgage. The woman was responsible for compensating him if she ever missed the payments, failed to refinance and essentially compensate him if he ever had any liability or incurred attorney fees related to the house after the divorce.
The woman lived in the house and made the payments properly for some time as she was gainfully employed with a good salary. Then, she got remarried, moved out of the house and stopped making the mortgage payments. She never refinanced the home and actually never even made the effort to refinance it. Since both names were still on the mortgage documents, both the woman and my client were still responsible for the missed payments.
The mortgage company eventually filed foreclosure proceedings against the divorced couple. My client and I worked with the bank and tried to convince the ex-wife to begin making payments on the property or otherwise cooperate by turning the house over to the mortgage company. As the proceedings continued, another challenge was presented…
In an effort to withdraw from the situation, the ex-wife decided to file for bankruptcy. This put into affect an automatic stay – essentially protecting her from further pursuit of collection by the mortgage company and preventing my client from being able to make her pay the attorney fees for defense in the foreclosure proceedings.
After some time, the property officially went into foreclosure. The mortgage company issued an affidavit that attested to all the missed mortgage payments, interest on the loan, and the costs for attorney fees and filing fees. The house did not get sold at a foreclosure sale and was left to sit vacant. My client worried that the house would end up selling for less than what was owed on the mortgage and he would incur a deficiency judgment, which would hold him responsible for some payment to the mortgage company. Any debt that his ex-wife owed would be discharged in the bankruptcy proceedings.
In all of this mess, however, my client did manage to catch one very lucky break. Somehow, the foreclosure did not make it onto his credit report or negatively affect his credit in any way. This was a very unlikely oversight by the credit bureaus and my client was careful not to take it for granted.
A few years later, another problem arose regarding my client’s case. The major law firm out of Chicago that represented the mortgage company was ordered to file to vacate the foreclosure proceedings in foreclosure cases in thirteen counties in Illinois and request to reenter the foreclosure judgments. Foreclosure affidavits that had been originally prepared and signed for numerous proceedings were deemed inaccurate not because their content was incorrect but because the first page had been retyped but not the second page, which contained the signature of the affiant. A Cook County Judge determined that the discrepancy did not comply with the statute regarding foreclosures.
The motion to “vacate and reenter” the foreclosures meant that every foreclosure in this particular firm’s foreclosure cases (in the thirteen counties) had to be cancelled (vacated) and re-entered with a fresh affidavit.
It was about eighteen months before the law firm representing the mortgage company entered a motion to vacate and reenter the foreclosure filed against my client. It had been more than two years since the original proceedings began and though my client had been making payments toward legal fees, the debts regarding the mortgage on the property still had not been reported against his credit. For this reason, my client strongly objected to vacating and re-entering the foreclosure judgment. He didn’t want to take any risks since he was sure that it was a purely chance occurrence that the credit agencies didn’t pick up on the filing or judgment the first time around.
In a fervent effort to protect my client’s credit, I spent several months trying to negotiate an alternative deal with the lawyers for the mortgage company, but every suggestion was met with resolute refusal.
Finally, on April 4, 2013, my client’s case was heard before a Madison County judge. We argued against the motion to vacate the foreclosure and WON! In thirteen counties and countless foreclosure cases, I had been the first and only attorney to challenge the motion. In addition to making logical arguments to protect my client’s credit, I also pointed out that an order issued by a Cook County judge is not binding on a Madison County judge.
I feel that this was an enormous victory for my client, and a worthwhile account to share with others. You don’t necessarily have to be forced to accept changes in your legal cases when you are not at fault for deficiencies or negligence. It is extremely wise to protect yourself by seeking legal counsel in such cases.