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2nd mortgage trying to foreclose on foreclosed property

Discussion in 'Foreclosure, Repossession, Auctions, Short Sales' started by nuttybuddee, Jul 15, 2014.

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  1. nuttybuddee

    nuttybuddee Law Topic Starter New Member

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    The Defendant’s home entered foreclosure and the Plaintiff bought (assumed) the second mortgage after default, but before foreclosue. According to Plaintiff’s council, before the foreclosure the original mortgage holder offered the Plaintiff a buyout to satisfy the second mortgage so the foreclosure could proceed (through e-mails). The Plaintiff accepted this offer of $6000, thereby releasing the Defendant of all ties to the property and financial responsibility. The Plaintiff didn’t hear from the original mortgage holder (according to Plaintiff’s council) after this agreement and the foreclosure proceeded and the original mortgage holder did not seek a Deficiency Judgment against the Defendant.
    Rather than pursue the contract made with the original mortgage holder, the Plaintiff’s council has made it known to the Defendant’s wife that it wouldn’t be in the Plaintiff’s financial interest. A phrase was used that meant “it would cost more to pursue than can be gotten” according to Plaintiff’s council who explained it to the Defendant’s wife. The Defendant maintains the position that a contract was offered and accepted for a financial note (not property) and therefore falls under legally binding contract. The Plaintiff probably doesn't hold the original second mortgage with raised seal so I think this could be argued as an asset rather than real property thus not falling under the requirements of paper signature in real estate law. Essentially, they own the contents of the box (asset), and can't produce the box (original 2nd mortgage papers) Is this a wrong premise? I'm to provide the court with an Answer in a short period of time. I'm hoping someone can give me a precedent to cite. Thank you
     
  2. army judge

    army judge Super Moderator

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    I wouldn't consider an email offer to be an offer. An email acceptance wouldn't be an acceptance, either. Wouldn't they fail as for their form and sufficiency, not to mention their authenticity?

    Now comes the second mortgage holder attempting to obtain something before the first has been satisfied. This little side deal is fraught with issues of fraud, counselor. It's a very creative way to extract blood from a turnip, but I would be worried about its legality. Alchemy, a very admirable skill, fraud - well, it's still fraud and a negotiation may have been made not in good faith.
     
  3. nuttybuddee

    nuttybuddee Law Topic Starter New Member

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    Army Judge.....the 1st has already gone thru the courts and has been finalized (in Feb of 2014). According to the UEC passed in 1999 ((??) not sure of the initials right at this moment), electronic correspondence can be considered legally binding contracts. If there is an offer, acceptance and consideration (payment). The primary mortgage holder offered, the 2nd accepted and the Primary reneged on the consideration. My fuzziness is in regard to a little aside in the law that 'real estate' must have pen to paper signature. An argument is that this is a JDB who bought this in a grouping and doesn't actually hold the original contract with raised seal. Therefore, wouldn't it fall into a financial transaction of the debt without the property since the 2nd probably doesn't have the original contract? Since it's a HELOC (Home Equity Line of Credit), and yes it did have the property tied to it, but it has changed hands so many times that it's, in essence, turned into a credit card type debt.
     
  4. army judge

    army judge Super Moderator

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    This is why the statute of frauds is applied to real estate dealings.
    Ultimately a judge will have to sort this one.
     

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