I’m probably partly to blame for this notion so I want to correct it. The goal is NOT to get your house for free, although that COULD be the result, as we have seen in a few hundred cases. The simple answer is “No Judge I am not trying to get my house for free, I’m trying to stop THEM from getting my house for free. They don’t have one dime invested in this deal and payments have been received by the real creditors for which they refuse to give an accounting.”
The obligation WAS created. The question is not who holds the note but to whom the note is payable, and what is the balance due on the note after a full accounting from the creditor.
So don’t leave your mouth hanging open when the Judge says something like that. Tell him or her that they have the wrong impression because they are getting misinformation from the other side which is trying to get a lawyer’s argument admitted as evidence. Tell him you want the deal you signed up for — including the appraised value that the lender represented to you at closing.
Don’t say you won’t pay anything. Offer to make a monthly payment into the court registry — not in the amount demanded, but for perhaps 25% of the amount demanded. Tell him you refuse to pay someone who never lent you the money, who is not on the closing documents and is relying on securitization documents which contain multiple conditions, many of which they have violated.
Tell the Judge you deny the default because you know they received third party payments and they refuse to allocate the payments to your loan, and they refuse to inform you or the Court as to whether these third party insurers and guarantors have equitable or legal rights of subrogation. Subrogation is taking the place of another person because you are the real party in interest.
“Why should I lose my house just because I didn’t pay them. The note isn’t payable to them. Even if they have an assignment, it violates the terms under which they are permitted to accept it, and even if they were permitted to accept it, it wold be on behalf of the true creditors who were the investors who advanced the funds and now could be anyone because of the transactions in which the investors were paid or settled.
“The question is not whether I made a payment, it is whether a payment is due after allocation of third party insurance, credit default swap and guarantee payments. Who are they to declare a default when they refuse to give a full accounting?”
Neal, I agree completely. Debtors are well advised to be proactive in proposing an alternate debt resolution to convince the judge that they are not seeking forfeiture of the debt.