by Kerry Lutz
Financial Survival Network
A 12-year running foreclosure saga, among the longest in the nation, appears to have finally reached its conclusion. Orna Shapsoshnik, a Los Angeles County resident and home owner has been battling the alleged owners of her mortgage for more than a decade and having exhausted all her appeals, is now facing the imminent forced sale of her home. Shapsoshnik and her ex-husband took out a mortgage from the now-defunct Washington Mutual Bank in the early 2000’s. When the financial crisis hit, she experienced keeping up with her mortgage payments and sought a modification. Unbeknownst to her, the mortgage had been sold several times winding up in the hands of a trust and she was now left to deal with its servicer. Shapsoshnik says they advised her to cease making payments, as this was the only way a modification could be accomplished.
In 2008 following the servicer’s advice, she ceased making payments. According to Shapsoshnik, from that time onward, the servicer has never made a good faith effort to modify the mortgage and foreclosure has appeared imminent for years. Every month her home was placed on the county foreclosure calendar, only to have it adjourned to the following month.
Unbeknownst to Shapsoshnik, her mortgage along with hundreds of thousands of others, was never properly transferred to its current owner, the mortgage trust.
Washington Mutual along with the interim and ultimate purchaser omitted recording these transfers at the Los Angeles County Clerk’s Office in clear violation of the Uniform Commercial Code and other state and federal statutes. Perhaps this is the reason why they waited 12 years to finally foreclose the mortgage.
During the course of her travails Shapsoshnik went through numerous state and federal agencies seeking a way out. None of them provided any meaningful assistance, other than to put off the ultimate date of reckoning.
What started out as a mortgage balance of less than $500,000 is now upwards of $1 million. The mortgage owner has been paying real estate taxes, insurance premiums and has been charging Shapsoshnik penalties and the higher default interest rate since 2008. At one point the home was underwater, more was owed than it was worth, but the booming real estate market has increased the home’s value to around the amount owed. Therefore, it’s very much in the mortgage holder’s interest to sell the property off at auction rather than agree to modify the loan.
Unfortunately, what we’ve learned from the mortgage meltdown is that the banks will be protected regardless of what fraud and misdeeds they may be guilty of, while the owner property owners and taxpayers will get stuck with the ultimate bill.
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(Orna Shapsoshnik vs Select Portfolio Servicing, et. al.)