Representing Heirs & Divorcing Spouses in Foreclosure

[Pages:43]Representing Heirs & Divorcing

Spouses in Foreclosure

Diane Thompson, of counsel, National Consumer Law Center

Daniel Lindsey, Supervisory Attorney, LAF

Jessica Hiemenz National Consumer Law Center

July 11, 2013

This Webinar is provided by the National Consumer Law Center and the Legal Assistance Foundation (LAF) of Chicago with a grant from the Office of the Illinois Attorney General.

?National Consumer Law Center 2013

Moderator ? Daniel P. Lindsey

? Supervisory Attorney at LAF (formerly the Legal Assistance Foundation of Metropolitan Chicago), which provides free civil legal services to low-income residents of Cook County, Illinois.

? He has practiced in the areas of housing and consumer law for 20 years. His work has focused on predatory lending, foreclosure defense, and broader issues of homeownership preservation.

? He has litigated in state and federal court and advocated for local, state, and federal laws and policies promoting fair lending and due process for homeowners.

? He has written articles, lectured, participated in task forces, panels, and workshops, consulted with private attorneys, policymakers, and media representatives, and testified before local, state, and federal legislative bodies.

Presenter ? Diane E. Thompson

? Has represented low-income homeowners since 1994.

? She is currently of counsel with the National Consumer Law Center, where she is the co-author of the NCLC treatise Truth in Lending and a contributing author to Cost of Credit.

? Among other publications, she wrote Foreclosing Modifications, 86 Wash. L. Rev. 755 (2011), and co-authored with Elizabeth Renuart The Truth, the Whole Truth, and Nothing But the Truth: Fulfilling the Promise of Truth In Lending, 25 Yale J. Reg. 181 (2008).

? From 1994 to 2007, Ms. Thompson represented individual lowincome homeowners in East St. Louis at Land of Lincoln Legal Assistance Foundation. While there, Ms. Thompson served as the Homeownership Specialist, providing assistance to casehandlers representing homeowners in 65 counties in downstate Illinois, and the Supervising Attorney of the Housing and Consumer unit of the East St. Louis office.

REPRESENTING HEIRS & DIVORCING SPOUSES IN

FORECLOSURE

DIANE E. THOMPSON JULY 2013

?National Consumer Law Center 2012

PROBLEM

? Family member inherits house, or gets it in divorce litigation

? Family member probably needs a modification ? Servicer won't talk to them

WHAT WE'LL TALK ABOUT

? Assumptions

? Should the client assume the mortgage? ? Can the client assume the mortgage?

? Special rules

? HAMP ? Freddie & Fannie ? FHA

? Practice tips for divorce and death ? Litigation theories

STARTING POINT: WHAT DOES THE CLIENT WANT?

? To assume or not assume?

? Assuming the mortgage will mean the client is personally liable on the note

? Not assuming the mortgage usually means losing the home

? This is a financial, legal, and emotional assessment that has to happen FIRST

WHAT'S AN ASSUMPTION?

? Subjects client to personal liability on the mortgage ? Gives clients all rights of mortgagor ? Does not relieve original homeowner of personal liability

unless creditor agrees

? If on the mortgage (or subject to the mortgage), but not the note, and want to keep the house, you are probably talking about an assumption of the mortgage

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