Update: (1) A recent U.S. District Court decision (Judge Ann D. Montgomery (D. Minn.)) surveys recent decisions on whether claims under state law are “preempted” by the recent federal law which was intended to alleviate some of the hardship of our current housing/home ownership implosion; (2) Some readers have commented to Minnesota Litigator that our use of the phrase, “Housing Holocaust,” troubled them as possibly denigrating, devaluing, or dishonoring the term “holocaust,” as an expression of “The Holocaust” (that is, the fate of six million Jews last century under the Nazis in Europe).
Minnesota Litigator apologizes to those offended by its use of the term. The first use of the word “holocaust” in connection with the current U.S. housing situation appears to have been here. Minnesota Litigator used the term in its older sense of a “large fire” or a “conflagration.” For many U.S. homeowners in recent years, it is almost as if their homes burned to the ground because they lost them, sometimes with no place else to go.
Original Post (October 26, 2011): While many borrowers are not without fault for their own challenged circumstances, having been coaxed and cajoled into inappropriate mortgage loans that they should never have qualified for, it is the sophisticated lenders who induced these unsound transactions who most hold more responsible, and who deserve a great deal more condemnation and no sympathy.
Preying on these desperate home-owners, dangling salvation before them in order to push them from trouble into despair, takes one to new lows.
Nick Slade of Barry, Slade & Wheaton represents Greg and Diane Erickson who allegedly fought off foreclosure only to have “help” in the form of a shady “equity stripper.” Equity strippers offer short-term reprieves on eviction for former home-owners in exchange for the home-owners’ remaining monetary interest in their homes (their “equity”).
The trade is often one that no reasonable person would take — six more months or less in one’s home in exchange for, say, $85,000 of accumulated equity in the property.
What is the law to do when confronted with a trade that, on its face, could only be understood as procured by fraud or, at a minimum, duress? Invoking Minnesota law specifically targeting this all too common scenario, the Ericksons seek to leave the alleged equity stripper homeless (that is, stripping the stripper of any interest in the Ericksons’ home) rather than vice-versa.