Dyck O’Neal Zombie Second Mortgage Foreclosure Defense

Dyck O’Neal is a company that is headquartered in Texas and it has filed thousands of second mortgage foreclosure lawsuits throughout the country. Major financial institutions in the United States understand that it is a waste of their time and money to file lawsuits against homeowners. As such, they bundle first and second mortgage loans and sell them to third-party companies such as Dyck O’Neal for pennies on the dollar. These third-party companies, including Dyck O’Neal, then try to recover the debt from homeowners, often using harassing, harsh, and aggressive methods to do it.

Dyck O’Neal has been in business since 1988 and so, they have extensive experience trying to recover mortgage debt from homeowners just like you. It is critical that you do not go up against them on your own. A Fort Lauderdale zombie second mortgage foreclosure defense lawyer can defend your rights and give you the best chance of saving your home or protecting your credit score.

What are Second Mortgages?

Consumers take out second mortgages on their homes for many reasons. Sometimes, homeowners borrow against the equity in their home by taking out a home equity line of credit. In other instances, borrowers take out second mortgages on their homes at the same time they take out their first mortgage. They do this so they can purchase the home.

When homeowners take out a second mortgage, the loan is in second position to the first mortgage. This means that if a borrower defaults, the lender that owns the first mortgage has priority. If the borrower defaults on both mortgages, the owner of the first loan has the right to try and recover the debt before the owner of the second mortgage. Still, an owner of a second mortgage can file a foreclosure lawsuit if the consumer defaults, even if the first mortgage is current.

When the owner of a first mortgage forecloses, many people believe the debt on the second mortgage is eliminated, but that is not true.

What are Zombie Second Mortgages?

Zombie second mortgages are called such because they remain relatively dormant for years before they come back to life and the lender or third-party company tries to collect on the debt. Zombie second mortgages are often closely associated with loans distributed just prior to the housing collapse of 2008. During that time, many mortgages were classified as being underwater, meaning the balance on the loan is greater than the market value of the home. The banks knew that it was pointless to try and foreclose on a home that had little value anyway. As such, they bundled mortgages and sold them to third parties such as Dyck O’Neal.

Dyck O’Neal, and similar companies, then held onto the loans for several years. Only when the housing market started rebounding and property values started to increase again did Dyck O’Neal surprise homeowners with foreclosure actions. Even though Dyck O’Neal had not tried to contact borrowers about the debt for many years, they then resurrected these debts. Fortunately, Dyck O’Neal and companies like it do not always have the right to do so.

Defenses to Zombie Second Mortgage Foreclosure Lawsuits

Just as there are defenses to first mortgage foreclosure lawsuits, you can also defend against a zombie second mortgage foreclosure. The fact that these loans are second mortgages can actually help with a defense. The most common strategies used when fighting back against a second mortgage foreclosure are as follows:

• Statute of limitations: If the statute of limitations, or time limit, on filing a foreclosure lawsuit has expired, you can use this as a defense in your case. In cases of debt, the statute of limitations starts on the day of default. In cases that involve second mortgages, each day of default could trigger the statute of limitations to start over again. Due to the fact that companies such as Dyck O’Neal sit on these mortgages for so long, the statute of limitations has often expired by the time they file a lawsuit.
• Proof of the loan: Again, companies such as Dyck O’Neal typically purchase large bundles of second mortgages from lenders for very small amounts. They do not often analyze these bundles to determine that all the proper documentation is included. If Dyck O’Neal cannot prove that they own the loan, they have no right to file a foreclosure lawsuit and so, that can also be used as a defense.
• The FDCPA: The federal Fair Debt Collection Practices Act prohibits lenders and debt companies from taking certain actions. One of these is threatening you with a lawsuit when they do not intend to do so, or when they do not have the legal authority to take such action. If Dyck O’Neal has violated the FDCPA, you can file a countersuit against them to collect up to $1,000 in statutory damages and any other loss you suffered as a result.
• Failure to comply with state law: When any company, including Dyck O’Neal, purchases a second mortgage from a lender, they must provide you with notice that the loan has been transferred to them. They must also send you regular updates about the status of your loan. Dyck O’Neal and other companies often fail to comply with these laws. If you were not notified within 30 days that Dyck O’Neal purchased your loan, they did not comply with state law, and that can serve as a defense in your case. Any other violation of the law may also apply in your case and help you avoid foreclosure.
• Bankruptcy: Bankruptcy is a last resort for many people who are struggling with debt, but it can help you avoid foreclosure. As soon as you file bankruptcy, the judge will issue an automatic stay, which prohibits Dyck O’Neal and any other debt collector or creditor from contacting you about the debt.

Call Our Zombie Second Mortgage Foreclosure Defense Lawyers in Fort Lauderdale for a Free Case Review

Being contacted by Dyck O’Neal and being told they are going to start a foreclosure action is stressful. At Loan Lawyers, our Fort Lauderdale foreclosure defense lawyers can determine the best strategy for moving forward to give you the best chance of a positive outcome. Call us now at (954) 523-4357 or contact us online to schedule a free review of your case.