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Posts Tagged ‘Foreclosure Cases’

The Judicial Foreclosure – Due Process? Not in Foreclosure. And in the Future in a Lot Less Areas as a Result.

January 12, 2014 Leave a comment

Not much to say except that I have seen a great deal of this first hand. As someone who has had doubts in the two governmental branches where officials are truly elected (with the exception of local judicial elections), I have always trusted the judiciary was the true “check” on our government. The branch that was “for the people”, who made the hard decisions such as Brown v. Board. Truly the admirable branch. Not anymore (with the exception of the Judges I have seen that truly try to remember there are two parties to a case). People are now sold for expediency, and the settlements and promises from the other two branches helped to make it happen. Disgusted. The future backlash on our notion of due process will create a backlog where “expediency” over human rights is the rule of the day. Can you imagine that in ALL areas of law? Be concerned. And no backlog problem is solved through expediency. Reversals coming down from appellate judges who truly believe in the American ideal of due process will remind us once again that no amount of legislative funding can buy due process.

“Despite the seemingly favorable stories about the economy and real estate, Florida homeowners are now worse off than ever before. Banks continue their culture of mortgage fraud, and foreclosure litigation has become the legal “wild west.”

For example, on a single day more than 90 foreclosure trials were set to occur before one trial judge. But general magistrates have now become empowered to take the homes of Floridians, despite the fact they were not summoned by any electorate.

In yet another judicial circuit, court staff unilaterally communicates with the bank’s counsel, prompting them on what to file in order to advance the case along.

In yet another circuit, homeowners are being denied routine depositions and discovery.

Banks that ignored the court’s rules for years are not being sanctioned. As if that was not bad enough, courts statewide have been bullied into clearing the backlog of foreclosure cases by the Legislature in order to receive funding. Forget your Pollyanna notions of separation of powers among the state’s branches of government.

The foreclosure crisis is not over; it’s not even close to being over. It’s getting worse. Issue saturation has led to apathy among leaders, the media and the populace. But the due process rights of homeowners continue to be further marginalized on a daily basis across our state.”

http://tbo.com/list/news-opinion-letterday/foreclosure-crisis-getting-worse-in-florida-20140109/

BOA Defeats Class Certification in HAMP Case…is it Over for Homeowners? Or Just Beginning?

September 5, 2013 3 comments

It’s no secret that eyes watching the foreclosure crisis have been watching the class action against Bank of America (BOA) in Massachusetts for some time now.  Today, the Court declined to certify the class, and what that means to us is not what many may think.

It does not mean that the Court ruled the homeowners claims are without merit.  It means that the Court said the homeowners claims do not meet the class action criteria.  Long story short the claims have to contain numerosity, commonality, typicality, and adequacy.  I used to practice in class actions and I can tell you the courts have gotten extremely stringent on what they allow to become certified class-wise.  Do I agree that the HAMP class didn’t meet the criteria?  No.  But these days it would take 22 sets of identical twins, all suffering the same injury at the same time by the same person under the same weather conditions to potentially meet it.  If one-half the sets of twins are under partly cloudy skies and the others under mostly cloudy skies then forget it.  That is how bad it has gotten.  And the famous Walmart case didn’t help things.

Class actions have their pros and cons always.  The upside is usually that people who cannot afford representation can be represented, the cases are massive and we obtain lots of information that we normally would not get from the other side.  The down side is if you are just part of a class you can end up with a lot less than you think.  I’ve been the associate calling people to tell them all they were getting was a magazine subscription for a year after they sued the company.  Not pretty.

But all hope is not lost.  What BOA has been relying on is that there is no private right of action for a homeowner to sue under HAMP, that HAMP was between them and the government, and the homeowner is not a third party beneficiary entitled to sue under it.  But that isn’t what the Court said, and basically we are left with a ruling that says the claims cannot be resolved as a class but can be resolved individually.

The Judge in the HAMP stated that the “Plaintiffs have plausibly alleged that Bank of America utterly failed to administer its HAMP modifications in a timely and efficient way; that in many cases it lost documents, or pretended it had not received them, or arbitrarily denied permanent modifications…Plaintiffs’ claims may well be meritorious….”

So before BOA gets too excited, I’d think long and hard about that.  Individual cases before juries?  Some with punitive damage claims?  Ouch.  Jurors are often more than ready to teach a big corporation a lesson.  Imagine tens of thousands of those cases.  I’m seeing more and more every day.

I think it is safe to say we have all learned a lot from this case.  From the BOA whistleblower affidavits to the Court’s ruling, the information will be used in courtrooms nationwide.  We’ve already seen Judges forcing modifications.  After how much money BOA took from the government and what their own employees state they did with that money while homeowners were suffering damages as a result, there is little doubt this has only just begun.

http://finance.yahoo.com/news/bank-america-defeats-class-certification-140828605.html

Modification Mess…and the Government’s Inaction

July 6, 2013 2 comments

It is common knowledge that now Bank of America’s own employees have stated the bank would have rather foreclosed or offered higher interest rate “in house” alternatives instead of modifying the loans under the Home Affordable Modification Program and directed them to make sure that goal was achieved.  Given that, would there be a light at the end of the tunnel?  Are the Congressional demands for investigation worth anything?

No.  The government knew that the servicers were engaged in egregious behavior.   As reported over and over again on March of 2013, before the Senate Judiciary Committee, Attorney General Holder stated “I am concerned that the size of some of these institutions becomes so large that it does become difficult to prosecute them … When we are hit with indications that if you do prosecute, if you do bring a criminal charge it will have a negative impact on the national economy, perhaps world economy, that is a function of the fact that some of these institutions have become too large. It has an inhibiting impact on our ability to bring resolutions that I think would be more appropriate.”  The Home Affordable Modification Program (HAMP)’s own page administered by Fannie Mae, acknowledges that servicers told homeowners to stop payment.

When HAMP, once sold to homeowners as a promise of help was revamped, they had procedures in place to deal with homeowners who were told to stop making mortgage payments by the banks in order to qualify for a modification.  Combine that with the BOA affidavits which say there was never an intent to modify and the end result is thousands of foreclosure cases pending, with homeowners willing to pay their mortgages, who were prevented from doing so by the banks.  And to make it worse, they have been drug through years and years of modification attempts where their payments were not accepted, and the bank now has the audacity to come to court and ask for all the back payments they would not accept and attorney’s fees for the bank bringing a foreclosure.  That is the judgment the bank is asking for.  It is extortion at an extreme that is incredible.

One would think this is so horrific – “homeowners told to stop payment for a modification?” that even given the legislative and executive stance (or lack thereof) on the issue, that the judiciary would right this wrong.

Wrong.  The judiciary has consistently held that homeowners are not “third-party beneficiaries” under any of these agreements, new legislation, consent orders, judgments, etc.  Therefore, they have no right to raise the argument, and they have no right to a loan modification (although tort and contract law are still alive and well – just make sure you aren’t suing to get a modification).  So what was HAMP passed for exactly?

Given that when the program was revamped, the government knew of bank errors that were as huge as the “stop paying” deal, it appears HAMP was passed to do absolutely nothing.  The government will shell out billions – if not trillions – to banks pretending to consider files for HAMP, but they will do nothing when a bank accepts that money and doesn’t follow the rules.  The only thing the program managed to do is lure people into default, give them false hope, and make sure the foreclosure goes through.  Why would they not correct the errors of the banks already affected when they revamped the program?  Why wouldn’t they have made it known that thousands of homeowners were sitting in limbo on their home in Court all because a bank caused a default?

Go back to Holder’s comments.  The end result is too big, the end result is too much, the end result hurts the economy.  To truly prosecute them runs way beyond the HAMP scandal.  Were the banks considering loans that they even had authority to consider?  That they had the authority to modify?  Did the loan really belong to someone else?  Why are multiple lenders suing a single homeowner for foreclosure over the same loan?  How many foreclosure mediations were successful?  Mediation rules about the person being there required to have the authority to settle?  How often is Fannie or Freddie at a mediation?

The banks cutting corners all these years has created a mess that the government will not clean up, any willingness to do so stops every time they hear the word “Wall Street”.  So for everyone who has seen “A Civil Action” that remembers the fight John Travolta (playing Jan Schlichtmann) had on his hands that was ultimately lost, until the very end when the Environmental Protection Agency packet is delivered to Robert Duvall (as the Defense attorney for the corporation) and had that “ooooooooooohhhhh” moment.  That the “the government is going to help so it is not over” moment.  Don’t hold your breath this time.

Fannie and Freddie: Hear no evil, speak no evil, see no evil.

June 30, 2012 Leave a comment

Reportedly, new housing finance has been under a strange shadow.  The typical news is that those self-employed have to show two years of tax returns in order to get financed.  But what those tax returns must show is not.    If a self-employed person makes $30,000 a year, but has a bunch of tax write-offs and reports income of only $15,000 a year, then the bank goes by the income that is reported to the IRS.  That’s right.  Better watch your Schedule K.  It won’t matter what your bank statements say, it’s all what you told the IRS.  The government can control tax write offs based on what you are financed for.  In an age where there are two government bailed out mortgage entities, Fannie Mae and Freddie Mac, that is scary news. Government is getting more involved by the day buying up loans.  Why the secrecy? Fannie is “under a lot of political pressure, and wants to keep everything” quiet, says Paul Miller, managing director of FBR Capital Markets.

What most people working with lenders don’t understand is that when Bank of America tells someone they are being considered for a loan modification and then declines that modification that one of these entities is the reason.  When you ask “why” you were declined, Bank of America won’t hesitate to point to Freddie Mac’s guidelines.  If you ask who owns your note through a legal letter, Bank of America will often tell you it is Freddie Mac or Fannie Mae.  However, when Bank of America sues you for foreclosure, don’t be surprised when they put in the Complaint that they actually own the Note.

One would think the time for secrecy should be over in order to fix the problem. From Robo-signing to break ins, the foreclosure crisis has pretty much run the gamut.   In New York they are trying to make this fraud punishable by criminal penalty.  Why isn’t that happening everywhere?  It has been reported that such entities are drilling through locks and breaking into properties in foreclosure.  Their reasoning?  They can because when you signed your mortgage you agreed to it.  But unless you remember being told at closing that by signing your mortgage you were waiving your Fourth Amendment right to be free from unreasonable searches and seizures, then someone is running against the law.

Our government is claiming that they can mandate healthcare for the general welfare of the public.  At the same time, in courtrooms, congressional hearings, and executive meetings the subject of foreclosure practices is going by the wayside.  Sure they  have offered to have banks rent the homes back to the homeowners.  The same entities that you can’t write off taxes for and get approved if you are self-employed?  The same entities that wrongfully foreclosed because they didn’t have the note and got away with it?  The same entities that broke into homes when there was no final judgment of foreclosure?  I’m sure we would all love to rent from them.

Just know that the private servicers loans are being bought up by government bailed out entities.  And if it isn’t happening through the government here, then it happens overseas.  Recently, one mortgage company sold off to another in the European market that helped make them quite a bundle over there.  Of course that doesn’t benefit us much.

Speech is being silenced if it is against banks by those speaking out, and everything that is being sold is some big secret.  Hear no evil, speak no evil, see no evil, right?  If we want to fund huge programs, then the economy has to be able to.  You cannot run a car without gas or unless you charged it up.  Fixing the real estate crisis is key to doing just that.  The question is how many of our rights do we have to give up to get there.  The Fourth Amendment?  The First?

These are not merely just people who stopped paying a mortgage.  Many of them were told to in order to get a loan modification by the very lender who claims they own the note.  The information that is being put out is pure propaganda, and the secrets being held the truth.  No viable solution has been offered to fix this problem, and everywhere people would rather turn their heads than deal with it.  That is until you start to hear the drill at your own door.

http://www.americanbanker.com/issues/176_243/fannie-mae-secretly-become-mortgage-servicing-giant-1044951-1.html?zkPrintable=true