Lenders' Legal Standing To Foreclose Gets Attention At Arizona State Bar Convention

In Phoenix, Arizona, The Arizona Republic reports:

• A growing number of home-mortgage holders in foreclosure are taking their lenders to court, where they are posing fundamental questions about the banks' legal right to repossess their homes, said an attorney addressing a packed crowd of lawyers Thursday at the State Bar of Arizona 2009 Convention in Phoenix.

• "I'm actually going to raise more issues than I have answers for, because that's what's happening here in Arizona," Tucson attorney Beverly Parker, of Southern Arizona Legal Aid, told an audience of about 200 inside a meeting room at the Arizona Biltmore Resort and Spa. Lenders have sought to avoid expensive litigation in their efforts to foreclose on thousands of mortgage holders who have fallen behind on their payments, Parker said, opting for the non-judicial trustee's-sale process.

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• Courts rarely grant injunctions to stop pending foreclosures before they happen, she said, so most borrowers looking to fight off the bank have chosen Bankruptcy Court as their battleground. Filing for personal-bankruptcy protection automatically postpones any scheduled foreclosure, giving the borrowers time to identify all parties with a financial stake in the loan and to mount an effective defense.

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• She said she views legal challenges such as the lender's right to foreclose as tools to pressure banks to work harder on loan modifications. In many cases, those tools have been effective, she said. "The burden of proof is on them (the lenders)," Parker said. "Once you've raised the issue, they have to address it."

For more, see Banks' foreclosure rights questioned (More homeowners seeking day in court, attorney says).

For posts that reference the failure of mortgage lenders and their attorneys to file the proper paperwork when bringing foreclosure actions, Go Here, Go Here, Go Here, Go Here, Go Here, Go Here, and Go Here. EpsilonMissingDocsMtg