A handful of Central Florida homeowners have defied the odds doing what most people only dream of: they walked away from their mortgage.
Audrey Sterling battled foreclosure for 8 years first filing bankruptcy then challenging the fifth lender to hold her mortgage, Nationstar Bank, to produce the “original promissory note.”
[WEB EXTRA: Mortgage Fraud ]
“I haven’t gotten a phone call or foreclosure notice in years," she said.
Sterling says the bank couldn’t prove they had a right or “standing” to collect on the mortgage because they couldn’t produce the signed note. It was never assigned from the previous lender.
Under Florida Statute 702.015 the lender must produce the “original note” or “promissory note” not a copy.
While banks will fight and appeal that strategy for years those consumers willing to endure the emotional toll could end up like Sterling living in the place she’s called home for the last 10 years with no monthly mortgage and no debt collectors at her door.
“Once you learn the system and what they’re doing it makes sense, and that’s how I learned how to get them.”
Seminole County Judge Robert Pleus has reviewed foreclosure cases for years.
He says he doesn’t view it as someone “getting a free house“ and says the cases in his court are very rare but can happen.
“Sometimes banks have difficulty doing that (producing the original note) and in those instances, yes, the homeowner wins and walks away from it," Pleus
Jan Leach of Janus Document Examination in Winter Park, reviews bank documents and has testified as an expert witness.
In the 40 cases she has been asked to investigate she says 80 percent failed to produce the original note.
“I’m looking for real ink, wet ink,” she says.
Many times Leach says, there are color copies that are dead giveaways the blue is always a teal color.
She contends it’s all about the paper trail.
“If your mortgage was sold eight or 10 times who do you owe the money to?" Leach asks.
Leach says any homeowner can check public records to follow the paper trail to the lender currently holding their mortgage. If the original not has been assigned you could challenge the lender to produce it.
That is the issue that has exposed an overloaded system that passes mortgages off to various lenders many times failing to assign the mortgage to the new servicer.
But Sterling cautions it doesn’t happen overnight and there are no guarantees.
“I know I’m not the only one, I hear it over and over in court…very few (are successful) because of the stress,” Sterling said.
Sterling now has the right to file for a quiet title giving her full right to the home and its value and “quieting” any lenders seeking payment for the mortgage.