Rick Sharga, senior vice president with RealtyTrac, a national foreclosure website, said lenders likely can simply restart the foreclosure process if they need to correct faulty paperwork. But he said the prove-you-own-the-mortgage-note issue could become serious.

“If you can’t prove that I owe you money, that’s a problem,” he said. “It could throw the whole mortgage industry into chaos.”

The lawsuits represent a tug-of-war that pits home-owners who fell behind on mortgages against lenders who insist any mistakes are mere technicalities.

John Fleming, general counsel for the Texas Mortgage Bankers Association, said that in almost all cases, he expects lenders or servicers will be able to cure any gap in mortgage assignments. “At the end of the day, if a homeowner or investor has not complied with the terms of the mortgage, they will face foreclosure,” Fleming said.

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Real estate investor sues lender to halt foreclosure

A San Antonio real estate investor who helps homeowners avoid foreclosure, recently found himself in the same predicament as his clients.

Rather than simply fight to stop the foreclosure on his investment home, Ezequiel Martinez filed suit against his lender saying the mortgage should be voided because of phony loan documents and because he doesn’t think the bank can prove it owns the mortgage note.

“We’re not trying to get a free house,” he said. “We’re trying to save the house from foreclosure fraud.”

Finding that Martinez “will probably prevail” at trial, state District Judge Karen Pozza on Aug. 26 issued an order prohibiting the house’s foreclosure until the case either is settled or goes to trial in March.

Martinez’s case is one of thousands across the country where homeowners are challenging the validity of foreclosure postings.

Full article here…

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4closureFraud.org