When Ivan Hooker, a 65-year-old man living with his wife in Oregon, defaulted on his mortgage in 2009 after losing his business, the last thing he expected was to take on the bank and actually win.
This week, though, a federal district court judge ruled in his favor, thus allowing him to pursue a loan modification program in order to save his home.
His lender attempted to foreclosure on his home after the default, but Hooker challenged the decision and attempted to pursue a loan modification. The lender sued, and the federal judge ultimately ruled that the lender violated Oregon law and had “unexplained gaps” in the paper trail for the home – a common occurrence these days throughout the country.
The mortgage servicing company, MERS, sells off properties like Hooker’s in the form of securities; this time, the court said, it did so without proper paperwork or documentation. Six other cases in Oregon in the past few years have ruled against MERS in similar circumstances. There are an estimated 25 more cases pending in the state involving MERS.
This doesn’t mean that Hooker is in the clear, though. It does, however, give him the opportunity to pursue a loan modification to hopefully make the payments on his home and keep it in his name. Loan modification programs have been successful in other states – Pennsylvania’s system in particular has worked pretty well – but it is no guarantee, and even with such a program, Hooker could still lose his home.
But, in this foreclosure market of ours, loan modification programs are a way out for homeowners who can still pay something on a mortgage, albeit not the original payment. More and more people like Hooker will ultimately win their battles in court, which should help slow the foreclosure rate this year.
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Written by Alex Rolim.
