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“My mortgage was $124,000…property was titled to the lender after foreclosure and conveyed to Fannie Mae for $132,000…property was then transferred to new purchaser for $156,000…all my equity was lost because lender would not work with me…am I entitled to any portion of Fannie Mae’s profit in selling my house?”
ANSWER: The answer is a qualified YES, but there is a wrinkle here. The scenario you have described is being reported by other readers as well. It is rare that any profit occurs in the forced sale of a home in foreclosure. At least it WAS rare. But the work done by Charles Koppa has shown that this is happening all over the country in one form or another. First of all the only party that can bid without money (called a “credit bid”) is the the party to whom the money is owed. THAT is not happening. The “credit bid” is submitted by a party who has no financial stake in the loan. And then the property is titled to yet another entity and frequently transferred to still another entity or person, rewarding them for playing in this scheme.
So the first thing is that the “credit bid” was invalid and that under the applicable state law, the bid was completely ineffective to cause title to be issued. Check with a local licensed attorney who is very well versed in property law before you take any action, since this is general information and opinion and not an opinion on your case.
The second thing you want to do is check and see if the foreclosure was fraudulent to begin with — see the recent posts and comments on that. It is entirely possible that not only was the paperwork fabricated, forged and wrong, it was based based upon a presumed default that never occurred or was cured by third party payments that mitigated the loss.
The third thing you want to do is consider an action (lawsuit) to recover the excess. Every note and mortgage and state law I have ever seen states quite clearly that if the proceeds of sale exceed the obligation, the homeowner gets the rest. In that case you might also be entitled to recover attorney fees and costs.
What I worry about is lawyers and pro se litigants making it tougher for those who actually have done their homework. If you are going to attack these events and get your house back in a quiet title action and/or recover damages, punitive damages, treble damages, attorney fees, for rescission, fraud, predatory loan practices, violations of TILA or whatever cause of action you pursue you MUST NOT ASSUME that because of news stories you are a winner and the other side is the loser. You must prove your case. THAT is why people are getting title searches, securitization searches, title reports, securitization reports and analyses of there loan and foreclosure by competent experts.
If you don’t have the facts in the form that can be admitted into evidence, you have nothing. If you do have the facts in the form that can be admitted into evidence your chances of winning or settling on favorable terms are immeasurably improved.