With skyrocketing foreclosure rates across the nation, homeowners have felt powerless to stop big banks from taking over. Many are turning to bankruptcy to try to save their homes.
Those dreaded legal proceedings are leading to free homes for some.
"We were terrified," homeowner Siwanna Green said. "We didn't know what to do."
Green is talking about the day last spring that she found out her 3-bedroom Harlem apartment was going into foreclosure – not from the bank, but from a notice in fine print in the newspaper.
"I tried to negotiate with the bank, and they wouldn't give me any information," Green said. "I keep hearing my apartment is going to be sold, and they kept saying, 'call back, call back.'"
It's the story of many families, but this one may have a nearly fairytale ending since the Greens could get their apartment for free. After being forced into bankruptcy, Green's lawyer David Shaev dug through reams of paperwork to find the bank that says they own the Green home doesn't have a legal leg to stand on.
"They cant prove they have ownership of the mortgage or the note, and they're filing basically are bogus claims," Shaev said.
These cases are far from isolated. Just a handful of attorneys are finding these foreclosure filings are either missing paperwork or fraudulent, meaning the bank doesn't have claim to the home and the mortgage just disappears.
Judges are now ruling that those mortgages be written off. A Patchogue family had their nearly $300,000 mortgage wiped out, and a Cortlandt Manor homeowner just had her $460,000 mortgage thrown out.
In a scathing court hearing the judge declared the mortgage company had a "lack of evidence" to prove they owned the home.
"The judges are very aware and catching on that the documents presented by these banks are not valid," Shaev said.
Shaev and fellow attorneys estimate there could be $1.1 trillion worth of similar mortgage mix-ups.
"If you want to take my client's house away, you better at least prove you have the right to," Shaev said.
A lack of that proof could lead to a very Merry Christmas for some.
While these homeowners can live in their houses free and clear, selling it is another matter since the title is in question. Those battles are currently being fought in court as well.