Begos Horgan & Brown LLP
From The Firm — Press Release
Mortgage Foreclosure Predictions for 2010
By Christopher G. Brown
WESTPORT, CT, Nov. 18, 2009 — Expect 2010 to be another tough year for those having trouble keeping up with their mortgage payments. This is one of several predictions about the shape of things to come for home owners from an attorney who made his name fighting against mortgage lenders.
"We are predicting that there will be some good news for cash-strapped home owners next year as the courts take a good hard look at the legality of some mortgage foreclosure proceedings. On the other hand, I don't foresee much of a decline in the number of mortgage foreclosures in 2010," says Christopher G. Brown, an attorney who has a history of taking on the entrenched mortgage industry in foreclosure matters.
In 2008, he received positive judgments in two ground-breaking foreclosure cases that changed the face of mortgage foreclosure in Connecticut. Brown is a partner in the Westport firm of Begos Horgan & Brown LLP.
Here are his predictions for 2010:
The Pace of Foreclosures Will Not Slow in 2010.
There will be no significant decline in the number of mortgage foreclosures within the next 12 months. "The first wave of foreclosures was for those who took out subprime loans. These posed the highest risk of default and so it was natural that these loans would start the foreclosure wave. Unfortunately, I expect that wave to intensify as more and more loans from the next riskiest loan category – Alt-A – fall into default. When you add that to a struggling economy, high unemployment and a terrible real estate market, you have a recipe for an increase in foreclosures for at least the next 12 months."
More Foreclosures Will Be Fought Successfully Because of the Industry's Faulty System.
Brown expects problems in the loan registration system to slow or even halt some foreclosure proceedings. "More courts will take a dim view of Mortgage Electronic Registration Systems, Inc. (MERS) which is the system that's supposed to keep track of mortgage filings," he says. Brown first challenged this system in 2008, halting a client's foreclosure completely. "In 2009, the Supreme Court of Kansas and other courts observed that the MERS system can create insurmountable problems for a party seeking to foreclose. More court decisions like these will follow in 2010 as the spotlight becomes more and more focused on the problems with MERS."
The system was originally created to keep track of any changes in the ownership of a mortgage. Today, it has some significant problems when it comes to proving what institution actually has the ability to launch a foreclosure proceeding. Brown expects more and more courts to take notice of that in 2010.
More foreclosures will be defeated because the wrong party tried to take the house.
Only the owner of a loan has the right to foreclose on a mortgage in most jurisdictions. "There is, however, a distinction in the law between owning the loan and having a right to enforce the note," Brown points out, "And that distinction can make the difference between whether a foreclosure action is proper or not. In the past, courts allowed parties to file foreclosure actions based on the assertion that those parties had the right to enforce the note. I've fought these actions by arguing to the court that the foreclosing party needs to prove ownership, which is more than just a right to enforce the note. I anticipate that more courts in 2010 will recognize the distinction between the right to enforce the note and the right to foreclose the mortgage and more foreclosure actions will be dismissed as a result."
Mortgage modifications and other foreclosure alternatives will become rarer.
Brown believes it will be harder to avoid foreclosure in 2010. "If a borrower is seeking a mortgage modification, she probably will be talking to one department in the bank. If she is seeking a short sale, she probably will be talking to a different department," Brown explains. "Foreclosures are handled by yet another department in the bank. The problem is that the different departments don't talk to each other and what one department is doing does not affect the other. This means that, for example, borrowers could be working on a modification with the loss mitigation department only to find that the foreclosure department has had them served with a foreclosure summons. A pending modification application does not prevent the borrowers from losing their house in foreclosure."
In general, Brown foresees that foreclosures will continue at the current pace in 2010 but that borrowers will have more success in keeping the foreclosure wolves at bay.
About Begos Horgan & Brown LLP
Attorney Christopher Brown heads the Foreclosure Defense practice of Begos, Horgan & Brown. This practice group provides comprehensive legal advice and assistance to those concerned with mortgage debt. Chris received the attention of the legal and consumer press in 2008 for two positive judgments in ground-breaking foreclosure cases, in which he took on and beat the mortgage industry in foreclosure matters. His work on foreclosure cases earned the firm the Connecticut Law Tribune's distinction of being named one the "Dozen Who Made a Difference" in 2008.
Chris is a partner in the Westport law firm of Begos Horgan & Brown, LLP. He works primarily on cases involving mortgage foreclosure issues; predatory lending; securities arbitration; ERISA benefits litigation; and disability insurance coverage disputes.
Begos Horgan & Brown LLP engages in sophisticated business, financial and insurance related litigation, trials and appeals in all courts, state and federal, in Connecticut and New York as well as securities arbitrations before the Financial Industry Regulatory Authority (“FINRA”).
Their practice areas include general commercial and corporate disputes, securities litigation, debtor/creditor disputes, insurance coverage disputes, real estate litigation, employment-related litigation, real estate purchase and sales and trust and estates.
In 2008, the firm was cited by the Connecticut Law Tribune as one of the state's "Dozen Who Made a Difference." They have also been recognized as one of the nation's "Go To" law firms by Corporate Counsel and as one of the state's best General Law firms by the Commercial Record. They have offices in Southport, CT and Bronxville, NY. For more information click through the website.
Media Contact: Andrea Obston, aobston@aomc.com, (860) 243-1447 – office, (860) 803-1155 – cell,
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