House Foreclosures - Foreclosure Fraud Cases In Nebraska

Foreclosure Fraud Cases In Nebraska

January 8th, 2008

Nebraska Supreme Court will give a second chance to two defendants to plead their case. Their contention is that they were cheated out of their houses. In 2005 the High Court of the State had taken up 13 cases against Mid-America Financial Investment Corporation. Of these 11 cases were adjudged to be instances of defrauding by the financial body. All of the plaintiffs said that they while signing the papers they were under the impression that loan papers were being signed to stop foreclosures. But they had no idea that actually they were handing over the titles of their estates to Mid-America by agreeing to rental agreement. They were made to understand that these were loan papers. The whole thing was rushed through before foreclosure.

Two of the plaintiffs – William Street and David Welton are given special consideration by the Supreme Court. A previous bankruptcy court ruling complicated Street’s case. Mid-America now holds that under the circumstances Street could not sue them for damages. So far the courts have been in favour of Street. In the case of Welton the Douglas County District Court had ruled that he no damages had been proved by him. But the Supreme Court did not agree and instructed the lower court to find out how much was due to Welton from Mid-America.

Both the plaintiffs, Street and Welton, won damages to the tune of approximately $35,000 together with legal fees of about $12,000 at the re-hearing at Douglas County Court. Mid-America pleaded that they did not owe anything to either Street or Welton; even if it was so, their advocate argued, the amount was much less. They also stressed that the terms had been clearly stated in the agreement.

There are three models of foreclosure scam tactics taken by the scammers. Mid-America has followed one of these setlines of cheating, reports the National Consumer Law Centre.

States are coming forward with legislation to protect house owners from nefarious tactics employed by downright cheats. Already eight states have taken positive steps. Nebraska’s legislature is yet to pass the law. The laws vary in detail from state to state but the broad line is that the agreements must be clearly written giving a chance to the borrowers to cancel within few days of signing it.

Supreme Court ordered Mid-America to return 11 of the titles and also to pay penalties.