Foreclosed Homes: Four Judges Who Stood Up to Rescue Them

Foreclosed homes have been pushing families into overloaded homeless shelters or into temporary spaces shared by close friends and family members.

Probably thinking about these images and more, these four judges took a stand and used whatever legal strategy they can to help homeowners save their homes from foreclosure.

Even if these financially distressed families eventually lose their homes, delaying foreclosure for a few months can certainly help.

Judge Schack has rejected 40 of about 100 foreclosures filed by bank lawyers in his court over the past two years.

He looks for errors such as incorrect dates, wrong signatories and insufficient proof of mortgage ownership. Bank lawyers argue that these errors are negligible because they are easy to correct, but Schack insists that the errors are not small if they disrupt the lives of families. Schack also explained that he is not taking the sides of the small guy at the expense of the rich guy. He said he is proving to both the small guy and the big guy that the law is for both of them.

In October, Judge Long affirmed his ruling in March that invalidated the foreclosure of two homes in Springfield by Wells Fargo Bank and US Bank because these two banks were not named as owners of the mortgages in the foreclosure filings.

Long argued that the banks failed to register their purchase of the mortgages. They only registered the purchases 14 months after the transactions. Long also mentioned that the mortgages changed hands three times without any of the transactions registered in public registries.

The decision was applauded by housing advocates, but was criticized by interest groups, saying that the decision would create chaos in the title and mortgage sectors.

Based on HUD guidelines

1. Open, read and respond to all mail from your lender.

2. Collect your all loan documents and your recent financial statements.

2. Know your rights. Learn about foreclosure laws and time frames in your state.

3. Learn about foreclosure prevention options.

4. Call a housing counselor certified by HUD.

List of HUD-certified counselors in your area

5. Avoid foreclosure prevention firms that charge fees upfront.

6. Never sign a document without understanding the contents.

Judge Schurr helped Miami couple Joseph and Blanca Doyle whose house was the subject of a foreclosure case filed in her court. She gave the couple a one-month extension to sell their house in a short sale so they could avoid foreclosure.

In a short sale, even if the couple loses their house, they can still save their credit record. It would be easier for them to take out a home loan in the near future when their finances and the economy get better.

Schurr however was not applauded by her superiors. A state appeals court chastised her, saying that she cannot use compassion as sole basis for her court decisions. The court also said that she abused her judicial discretion.

Republic Federal Bank, which filed the foreclosure case and which appealed the extension, ultimately won its case. It immediately sold the foreclosed home in a foreclosure auction.

In the bankruptcy case of debtors Joshua and Stephanie Mitchell, Judge Riegle ruled that MERS had no claim to the house of the Mitchells because it did not own the mortgage loan.

MERS stands for Mortgage Electronic Recording Systems Inc., which is an electronic registration system that tracks mortgage loans as they are originated, serviced or sold.

Among the shareholders of MERS are CitiMortgage, AIG, WAMU, GMAC, Merrill Lynch, Fannie Mae and Freddie Mac and other financial firms.

In the case Landmark National Bank v. Kesler, the Kansas Supreme Court ruled that MERS had no authority, standing and right to foreclose on a property covered by a mortgage loan that it did not issue.

Although this ruling has not stopped the continued rise in foreclosures, it has delayed processes that are evicting families from foreclosed homes in certain cases.