Article Courtesy of The Palm Beach Post
By Kimberly Miller
Published May 18, 2012
A suburban West Palm Beach foreclosure case has even bank employees confused, with internal emails that question whether the wrong entity is repossessing the house - but that then decide to move forward anyway.
Bank attorneys now want to purge the court file with the messages, which were filed mistakenly. The emails also mention trying to avoid mounting community association fees.
"I think the emails basically say the plaintiff doesn't own the loan, and it belongs to a different lender," said attorney Peter Snyder, who is representing Abby Lopez. "It may be Bank of America, or Bank of America could just be the servicer. That's where it all gets crazy."
Homeowner advocates say the three email exchanges exemplify one of their biggest concerns - that the wrong bank will take their home.
The concern arose when boom-time loans were repeatedly bundled or broken into pieces and sold by the original lender to trusts, investors or other lenders. As a result, a bank may be responsible for collecting payments and daily loan oversight, but not be the true owner.
The emails in Lopez's case were filed in October with a sworn "affidavit of indebtedness" that details how much Lopez owes on the mortgage, and asserts that Bank of America is the servicer of the loan.
But Bank of America is not listed as a plaintiff in the case. HSBC Bank USA, "as trustee for the holders of Deutsche Alt-A Securities Mortgage Loan Trust, Series 2007-Bar1 Mortgage Pass-Through Certificates," is the party named as foreclosing on the home.
When concern is raised in an August email exchange that the plaintiff doesn't match what is on the foreclosure complaint or the affidavit, and that the "investor has requested that we foreclose in our name," the answer is to proceed with the foreclosure and quit claim-deed the property on the back end to the correct party.
"Changing the plaintiff at the time of sale may result in a significant increase in fees due to the condominium or homeowner association involved in this case," the email states. "Correcting post sale may result in documentary stamp taxes being incurred, but the taxes should be less than the association dues unless the loan is very large."
Property records show Lopez bought the house near Belvedere Road and Florida's Turnpike new in October 2006 for $608,715. Snyder said Lopez put down a hefty deposit, and court records reflect a $365,028 loan from Texas-based DHI Mortgage Co. was used to pay the rest.
The loan then went into the Mortgage Electronic Registration System, a company created by banks as a way to more quickly sell and buy loans without having to file paperwork with county clerks or recorders.
Bank of America said that despite the confusion, the case, which is scheduled for a May 24 hearing, is sound.
"The affidavit is factually accurate and the foreclosure is valid," spokeswoman Jumana Bauwens said.
HSBC spokesman Neil Brazil said he could not comment .
The foreclosure was filed against Lopez in September 2009. The home's current total market value is listed by the Palm Beach County property appraiser as $189,343.
Snyder said he has no expectation of winning the home free and clear for Lopez, but wants to determine for sure who is the correct foreclosing party.
"The banks have millions of non performing loans, but record-keeping is so poor they don't know who owns them," Snyder said.