Chief Justice Abrahamson,
Over the last 10 years I worked for a Madison attorney helping people deal with foreclosure and bankruptcy. During that time we saw many cases of debtors that had defaulted on loans with no hope of being able to continue to make payments. We also saw many examples of mortgage lenders that had lost payments, failed to accurately report payments and in one or two cases, foreclosed despite having received the payments. In Federal Bankruptcy Court, a lender when confronted with illegal accounting of bankruptcy payments (misapplication of funds) asked, “do you expect us to change our procedures just because someone is in bankruptcy?” to which the Court responded, “Yes.” Increasingly over the last five years, we began noticing that lenders were foreclosing that were not the original mortgage lender, in many cases there were no assignments of mortgages and even more troubling, notes were not included in the documentation, either because the lender was NOT the note holder or it had become ‘lost’.
In my personal life, situations resulted in the default on our mortgage. Our original mortgage lender was Indymac Bank. It failed in 2008 and One West Bank purchased many of its assets (according to press reports). One West Bank’s foreclosure documents did not include the original note to Indymac Bank. When we brought up this deficiency with the court at our hearing (10CV00820), Dane County Court Judge C. William Foust, Branch 14, indicated the lack of the note was a technicality and that he was satisfied with the affidavit of default provided by the lender. The lender did not address the lack of note. We understand the default judgment now replaces the missing note.
In light of the recent actions by the State Attorney General, I am asking the Supreme Court to give guidance to the Municipal Courts in the state to NOT just accept foreclosure documentation that is ‘technically deficient’ in the interest of speeding up the process. We brought the issue to the attention of the Court in our case and it was ignored. Hundreds if not thousands of Wisconsin homeowners are facing foreclosure and are unable to afford legal help to defend themselves.
False affidavits, lost notes and historically bad accounting are being ignored by courts in the interest of ‘processing’ hundreds of thousands of foreclosures throughout the country and in Wisconsin. We are asking you and the Supreme Court of Wisconsin to maintain the integrity of the court system for all parties – not just those lenders hoping to take advantage of distraught homeowners to sweep all the bad acts under the foreclosure rug.
In my case, the issue might soon be over, but lenders who have foreclosed and received judgment are also failing to complete the process. We have seen lenders foreclose, homeowners leave the home and then the lender fail to hold a sheriff’s sale. The lender leaves the homeowner to maintain the empty home indefinitely, including municipal fines for failure to mow or shovel snow, insurance and minimal utilities.
The Courts expect homeowners to abide by the terms of their mortgages, it is time for the court system to make sure the lenders abide by the law.
Tracy C. Coyle
Attorney General J.B. Van Hollen
114 East State Capitol
Madison, WI 53707-7857