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Foreclosed homeowners fighting back with lawsuits

TAMPA - So many homeowners in foreclosure are fighting back that a mortgage litigation index skyrocketed during the second quarter. The index climbed to its highest level during any quarter since it began in 2007, according to Mortgage Daily, a trade publication that provides data to the mortgage industry. More mortgage lenders are winding up in court for various reasons, said Sam Garcia, publisher of Mortgage Daily, but foreclosure cases made up the bulk of cases tracked in the second quarter. "The bottom line is money," Garcia said. "In 2006 and prior everybody was making money and nobody was suing. But now that they're losing money people are trying to figure out ways to recover money."
Cases involving investors shot up as well as cases involving criminal activity within a bank. The second quarter index came in at 190 total cases. Activity grew 26 percent from the prior quarter and was well more than double the level a year earlier. The report, which reflects mortgage-related legal actions covered by MortgageDaily.com between April 1 and June 30, was prepared in conjunction with Patton Boggs LLP , a Washington, D.C., law firm. The cases come from various parts of the country and are complied from pubic records and news reports. The data does not include all lawsuits involving lenders, the index is to serve as a gauge to track mortgage litigation trends, Garcia said. "There are way too many cases out there to keep track of them all," he said. Foreclosure cases are only counted, he said, when some action is taken in court in favor of the borrower, not just when a homeowner sues. During the second quarter, there were 67 cases in the index. That's up from 46 in the first quarter and 29 in the second quarter of 2010. Criminal cases involving a lender went up from 11 in the second quarter of 2010 to 44 during the same quarter of 2011.

Sowusay shares his experience trying to fight off foreclosure in the comments section. Join the discussion in the comments below.

"I didn't want to live the 'rich' lifestyle, I just wanted my own home. Bought one built in 1923, paid it off in 12 years. I had a good career so I borrowed money to remodel it, had like one electrical outlet in each room, closets the size of caskets, about 50 coats of paint that couldn't be scraped or sanded enough to keep the new paint from peeling off, so I had to put vinyl up, not to mention the roof, you get the picture, so I borrowed enough to remodel.

"But then I got 'laid off,' or too old, or didn't have a bubbly personality, I don't know. I have already paid them well over the amount I borrowed, but most of that went to interest, have eight years to go, no job for a while now and have to come up with creative ways to meet the mortgage payment every month although rarely within the grace period, so there you go, late charges.

"Of course the insurance and taxes keep going up and up and adds to the amount I have to pay each month. When I went to sign the note, I caught them trying to slip an extra 3% interest into the mix, good thing I can read. But after all of this, I still may lose, loan modifications are a joke.

"When the banks were deregulated, what a dream come true for those of us who didn't quite qualify for a mortgage loan, but what the hey, I had a good job and I could update my house to the 20th century, but the question is, who did I update it for, certainly not my kids since I probably won't have it to leave to them.

"So there you go, can't be just people trying to live beyond thier means, since every other house in my neighborhood has been foreclosed on and those houses are all more of less as old as mine."

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