by Ted L Glines
When a property owner defaults on his loan payments, the mortgage lender moves to foreclose on the loan. For many months, we have been treated to this growing tale of woe. And our hearts go out to those who have lost their homes. Where do they go, and what do they do now? In the early months of this crisis, many people simply departed; abandonned their homes. Most foreclosed borrowers left their homes on the deadline stated in their notice of foreclosure. Some of them, a growing number, have elected to remain in their homes under a legal position called adverse possession (squatting). Additional homeless people have moved in to adversely occupy vacated foreclosed properties. What is squatting and how is this possible?
“Adverse possession (squatting) is similar to prescription, another way to acquire title to real property by occupying it for a period of time. Prescription is not the same, however, because title acquired under it is presumed to have resulted from a lost grant, as opposed to the expiration of the statutory time limit in adverse possession.
“Title to land is acquired by adverse possession as a result of the lapse of the Statute of Limitations for Ejectment, which bars the commencement of a lawsuit by the true owner to recover possession of the land. Adverse possession depends upon the intent of the occupant to claim and hold real property in opposition to all the world and the demonstration of this intention by visible and hostile possession of the land so that the owner is or should be aware that adverse claims are being made.
“The legal theory underlying the vesting of title by adverse possession is that title to land must be certain. Since the owner has, by his or her own fault and neglect, failed to protect the land against the hostile actions of the adverse possessor, an adverse possessor who has treated the land as his or her own for a significant period of time is recognized as its owner.
“Title by adverse possession may be acquired against any person or corporation not excepted by statute. Property held by the federal government, a state, or a Municipal Corporation cannot be taken by adverse possession. As long as the property has a public use, as with a highway or school property, its ownership cannot be lost through adverse possession.
“Anyone, including corporations, the federal government, states, and municipal corporations, can be an adverse possessor.
“Elements In order that adverse possession ripen into legal title, nonpermissive use by the adverse claimant that is actual, open and notorious, exclusive, hostile, and continuous for the statutory period must be established. All of these elements must coexist if title is to be acquired by adverse possession. The character, location, present state of the land, and the uses to which it is put are evaluated in each case. The adverse claimant has the burden of proving each element by a preponderance of the evidence.
“Actual Adverse possession consists of actual occupation of the land with the intent to keep it solely for oneself. Merely claiming the land or paying taxes on it, without actually possessing it, is insufficient. Entry on the land, whether legal or not, is essential. A Trespass may commence adverse possession, but there must be more than temporary use of the property by a trespasser for adverse possession to be established. Physical acts must show that the possessor is exercising the dominion over the land that an average owner of similar property would exercise.” ~http://legal-dictionary.thefreedictionary.com/Squatters+rights.
The Statute of Limitations for Ejectment, provides a legal period of time wherein a foreclosing mortgage lender may eject the tenant (squatter) from a foreclosed property. In order to do this, the foreclosing mortgage lender must present the original loan documents signed by the buyer and a representative of the original mortgage lender, said document signed in escrow. When the original mortgage lender subsequently sells the loan to a Sub-Prime lender, a problem emerges. Many such Sub-Prime lenders are unable to produce the original loan documents, and are therefore unable to prove ownership of the foreclosed property mortgage or a contractual agreement with the property's tenant. A simple Transfer of Title document does not provide a contractual agreement between the Sub-Prime lender and the tenant. It follows that they are legally unable to eject the remaining tenant of the subject property, and they are unable to resell the foreclosed property, because they cannot prove that they own the loan on said property.
Now that you have read and understood all of the foregoing legalese, there will be a test. Just kidding. At least one Congress-woman has gone on record, advising foreclosed property tenants to remain in their homes as squatters. This Congress-woman comes from a background in Real Estate law.
So, you purchased this house years ago using a loan from Ace Mortgage Lender. Two years ago, Ace sold the loan to Ajax Sub-Prime Mortgage Lender. The interest on your loan was increased until you were no longer able to make your monthly mortgage payment. You could no longer make the payment so you defaulted on the loan. Ajax foreclosed on your loan and gave you a certain amount of time to vacate the property. However, you stay living in the house (adverse possession) and you have become a squatter. Ajax threatens you but you do not move. Unpleasant, perhaps, but you still have a home.
And there is a humorous side-element because the repeated harassment of you (the adverse possessor or squatter) by Ajax is against the law in all fifty of our states. Look it up.
People who are much more elderly than myself will remember the Great Depression and its aftermath, when "squatting" was a way of life for many otherwise dispossessed people. Regardless of technological advances, history is a wheel and we seem to have come full turn.