Waiting for Ameriquest to resolve the bad affidavit cases

We are now handling over 20 "bad affidavit" cases in the courts, and mostly in the bankruptcy court. Ten of them have been filed within the last three months. The most common question I get from my in-house friends is "why now?" and "why this claim?"

The trustees are counting on a positive outcome in the Maryland Court of Appeals case we call "Ameriquest." One issue in that case is whether the Curative Act, which says certain document drafting errors are self-curing if not challenged by a party to the instrument within 6 months, actually means what it reads. If the Court of Appeals does not make a clear statement that the statute is clear and unambiguious on its face, then the bankruptcy trustees can argue to avoid millions of dollars in encumbrances on real property.

Now, this will not dispose of the underlying debts. After all, the lenders will continue to participate in the estates as large, if not the largest, unsecured creditor. But it would give the trustees a toehold from which they will negotiate for some payment of tribute in order for the lender to keep its lien.

Until then, we are checking the docket, daily!

The Good Guys win one!

A couple that lost their home to a PHIFA foreclosure rescue scam has been awarded $700,000 in damages against the fraudsters. Kudos to my friend Phil Robinson, at Public Justice, for shooting these fish in their barrel. The real issue in these cases is not proving the cause of action, it is getting paid.

But for the title professional, the key element of this Baltimore Sun article is its description of the 2007 lawsuit, where the homeowners regained title to their house, and an "new" mortgage in their name. This is describing the "bona fide" lender that retained a lien on the real property to the extent it paid off the homeowner's existing loan secured by the property.

Now, Phil, go get paid!

Want free rent? Stop paying your mortgage.

Jay Hancock, of the Baltimore Sun, takes note of a disturbing trend that title insurance claim counsel has seen over the last two years: it takes too long to evict. Add a title claim, and the borrower is living large for two to three years as the case drags.