A Riverview family on the brink of losing their home for failing to pay a $150 homeowners association fee has been offered an 11th hour chance at mediation following news coverage of their plight.
Tampa property rights attorney Ryan Torrens, who represents Tina and Luis Lopez, said the law firm for the Rivercrest Master Homeowners Association approached him about mediating the dispute over the Lopez family’s 2009 homeowners association fee.
The change-of-heart comes as state lawmakers are considering a measure that addresses many of the issues arising from the Lopez family’s case, including a requirement that homeowners’ associations provide more notice when members fall behind on fees.
United States Bankruptcy Court for the Eastern District of California
March 23, 2017, Decided
Adv. Pro. No. 14-02278, Case No. 10-35624-B-13J
ERIK SUNDQUIST and RENÉE SUNDQUIST, Plaintiffs,
v. BANK OF AMERICA, N.A.; RECONTRUST COMPANY, N.A.; BAC HOME LOANS SERVICING, LP, Defendants. In re: ERIK SUNDQUIST and RENÉE SUNDQUIST, Debtors.
Conclusion
Bank of America willfully violated the automatic stay by,
among other things, foreclosing on the Sundquist residence,
prosecuting an unlawful detainer action, forcing them to
move, secretly rescinding the foreclosure, failing to protect
the residence from looting, refusing to pay for Sundquist
property lost, and subjecting the Sundquists to a mortgage
modification charade. Pursuant to § 362(k)(1), Bank of
America [*102] is liable for all damages incurred between the
initial violation of the automatic stay and the time the stay
violation is fully remedied (which remedy comes in this
decision and accompanying judgment).
The actual § 362(k)(1) damages are $1,074,581.50. The
appropriate § 362(k)(1) punitive damages are $45,000,000.00.
The Sundquists are enjoined to deliver $40,000,000.00 (minus
applicable taxes) to public service entities that are important
in education in consumer law and delivery of legal services to
consumers: National Consumer Law Center ($10,000,000.00),
National Consumer Bankruptcy Rights Center
($10,000,000.00), and the five public law schools of the
University of California System ($4,000,000.00).
Bank of America may have a remittitur of $40,000,000.00 of
the punitive damages if, and only if, it contributes a total of
$30,000,000.00 (to be used only for education in consumer
law and delivery of legal services to consumers and be subject
to no other condition imposed by Bank of America) to
National Consumer Law Center ($7,500,000.00), National
Consumer Bankruptcy Rights Center ($7,500,000.00), and the
five public law schools of the University of California System
($3,000,000.00 each).
This opinion contains [*103] findings of fact and conclusions
of law. An appropriate Judgment shall be entered.
Read the paragraph that says “It stressed that the settlement, which focused on how auto loans were originated, were not about securitizations, but said any such claims were released under the accords.”
Massachusetts Attorney General Healey negotiated the settlement – which she did a similar thing with housing. Released the foreclosure mill attorneys and all the banks from liability over practices for small penalty.
Reuters-
Santander Consumer USA Holdings Inc (SC.N) has agreed to pay $25.9 million to resolve investigations by the attorneys general in Massachusetts and Delaware into its financing and securitization of sub-prime auto loans.
The settlements were announced on Wednesday and resolved allegations Santander facilitated unfair, high-rate auto loans for thousands of car buyers. The loans were then packaged into securities sold to investors.
The accords mark the first settlements in connection with U.S. investigations into subprime auto loan securitization, Massachusetts Attorney General Maura Healey said. The U.S. Justice Department has also been investigating the matter.
The U.S. Court of Appeals for the Fifth Circuit recently affirmed a trial court’s denial of a mortgagor’s motion for remand because the non-diverse substitute foreclosure trustee was improperly joined in order to defeat diversity jurisdiction.
The Fifth Circuit also affirmed the trial court’s summary judgment ruling in favor of the trustee and loan servicer because the foreclosure sale never took place, and therefore the mortgagor could not state a cause of action for wrongful foreclosure under Texas law.
A copy of the opinion in Foster v. Deutsche Bank National Trust Co. is available at: Link to Opinion.
The mortgagor purchased a home with her husband in 2004 in Grand Prairie, Texas. Her husband signed the promissory note, but the plaintiff mortgagor did not. She did, however, sign the deed of trust.
Earlier Tuesday, Wells Fargoannounced that its Community Reinvestment Act rating is being downgraded by the Office of the Comptroller of the Currency, due in part to the bank’s fake account scandal that led to a $185 million fine from the Consumer Financial Protection Bureau, the OCC, and the city and county of Los Angeles.
But the fallout from the fake account fiasco, which stemmed from more than 5,000 of the bank’s former employees opening more than 2 million fake accounts to get sales bonuses, is far from over.
In fact, the bank’s financial hit from the scandal is about to get worse, as the bank announced late Tuesday that it reached a $110 million settlement in a class action lawsuit brought on behalf of the bank’s customers who had a fake account opened in their name.
A behind-the-scenes effort of Wall Street banks to take over the mortgage market is driven by advocates who switch between roles in Washington and the private sector.
NYT-
Seven years after their dubious lending practices helped push the United States economy to the brink of disaster, the nation’s largest banks are closing in on a long-sought goal: to unseat Fannie Mae and Freddie Mac, the mortgage finance giants, and capture their share of the profits in the country’s $5.7 trillion home loan market.
Taking place largely behind the scenes, the movement to take over the mortgage market has been propelled in part by a revolving door between Washington and Wall Street, an investigation by The New York Times has found.
While the big banks’ effort to enshrine their vision into law has failed so far, plans to replace Fannie and Freddie — which have long supported the housing market by playing a unique role as so-called government-sponsored enterprises, or G.S.E.s — are still very much alive. The Obama administration has largely embraced the idea, and government regulators are being pushed to put crucial elements into effect.
Investors could get clarification on liens imposed after final judgment if the Florida Supreme Court accepts jurisdiction over a closely watched municipal foreclosure.
The question to the high court, certified by a divided appellate panel, is whether a bank’s formal public notice, or lis pendens, at the start of foreclosure proceedings bars a local government’s constitutional right under Florida law to enforce code violations on distressed property. The question targets property after a foreclosure judgment but before the real estate changes hands in a judicial sale.
Fourth District Court of Appeal Judges Alan Forst and Mark Klingensmith concurred on the certification that might lead Florida Supreme Court justices to accept jurisdiction, but their colleague, Judge Robert Gross, dissented without a written opinion.
COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII
LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)
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Sunday – March 26
Foreclosure Workshop #29: The Rule Ritual, Neil Gorsuch, and the Case of
the Frozen Truck Driver — Its Significance for the Future of Foreclosure Defense ———————
Reminded that The Foreclosure Hour begins one hour later Pacific and Eastern time as most of the Mainland, unlike Hawaii, switches to Daylight Savings Time.
In a strange reverberation of the housing crisis, Goldman Sachs Group Inc. has become a voracious buyer of soured mortgages, trying to make money even as it looks to fulfill terms of a government settlement that calls for it to help struggling homeowners.
Over the past year-and-a-half, the Wall Street giant has become the largest buyer of severely delinquent home loans from mortgage giant Fannie Mae. The firm has acquired nearly two-thirds of $9.6 billion in loans the agency has auctioned, representing unpaid loan balances of $5.7 billion, a Wall Street Journal review of government records shows.
Goldman’s buying spree has been sparked by a $5.1 billion settlement the firm entered into last year with federal and state governments over its role in packaging and selling mortgage-backed securities in the housing meltdown. As part of this, the firm agreed to provide $1.8 billion in homeowner relief.
Whether Respondent, Mortgage Electronic Registration Systems, Inc., which is identified in most mortgages and deeds of trust as a “beneficiary” or “nominee” of the lender, possesses an interest in a borrower’s property sufficient to establish Article III standing.
To date, MERS nor its parent, MERSCORP, which is also “MERS” according to Rule 1 § 1 of its own 2009 Membership Rules, has confused courts all over the country and the author of this post is encouraging everyone to contact their attorney or institution of higher learning to facilitate support for this Writ in the form of an amicus brief in support of the nation’s highest court accepting this Writ for official hearing and review by the Court. The deadline, according to Supreme Court rules, is April 17, 2017 to have all submissions in.
A family home was sold to the highest bidder Friday; it was an auction overshadowed by tears. Peggy Stroud wept as a bidder bought the home she grew up in on Urbine Road.
Stroud said the home is the place where her mother took her last breath, and her father was shot to death on the porch two years ago.
For months after his death, Stroud says she paid the bank her dad’s mortgage, nearly $8,500 total.
She was stunned to learn that all of those payments still did not stop a foreclosure.
The president of the Federal Reserve Bank of New York told the Banking Standards Board in London on Tuesday that he sees quite a few similarities between the Wells Fargo fake account scandal and the subprime mortgage crisis of the late 2000’s.
New York Fed President William Dudley, in a speech entitled “Reforming Culture for the Long Term,” said that the goal-driven sales culture at Wells Fargo, which drove 5,000 of the bank’s former employees to open as many as 2 million accounts without authorization in order to get sales bonuses, reminded him of the environment that led to the mortgage crisis.
“As I have argued before, incentives shape behavior, and behavior drives culture. If you want a culture that will support your long-term business strategy, you need to align incentives with the behaviors that will sustain your business over the long haul,” Dudley said in his speech across the pond.
Citibank, N.A., as Trustee for the registered holders of Bear Stearns Asset Backed Securities I Trust 2005-CL1, Asset-Backed Certificates, Series 2005-CL1, Plaintiff,
against
David Cullen Bravo a/k/a David S. Bravo Cullen; Christine Bravo Cullen a/k/a Christine A. Bravo Cullen, New York State Board of Elections, “John Doe, ” said name being fictitious, it being the intention of Plaintiff to designate any and all occupants of premises being foreclosed herein, and any parties, corporations or entities, if any, having or claiming an interest or lien upon the mortgaged premises, Defendants.
2013-0582
McCABE, WEISBERG & CONWAY, P.C.
By: Heino J. Muller, Esq.
Attorneys for Plaintiff
145 Huguenot Street, Suite 210
New Rochelle, New York 10801
THE CROSSMORE LAW OFFICE
By: Edward Y. Crossmore, Esq.
Attorneys for Defendants Bravo and Cullen
115 West Green Street
Ithaca, New York 14850
Phillip R. Rumsey, J.
“In June 2013, plaintiff commenced this foreclosure action on residential real property — mortgaged in January 2008 for about $82,600 — owned by defendants David Cullen Bravo and Christine Bravo Cullen (hereinafter collectively referred to as defendants) in the Town of Dryden, Tompkins County. Defendants answered asserting, among other things, that plaintiff was not the holder of the note. After a series of delays resulting primarily from conduct by plaintiff and its attorneys which prompted two preclusion motions by defendants, Supreme Court granted the second preclusion motion in December 2014.” Citibank, N.A. v Bravo, 140 AD3d 1434, 1435 (2016).
The trial court order dated December 2, 2014 (Mulvey, J.) precluded plaintiff “from offering at the trial of this action, or upon any dispositive motion made herein, proof of the indebtedness alleged in the complaint or that the plaintiff is the current holder of the note.” In affirming that order, the Appellate Division noted that plaintiff had engaged in a pattern of conduct which gave rise to an inference of willfulness sufficient to warrant the trial court’s imposition of the sanction of preclusion, specifically noting that
“among other things, plaintiff refused to appear for a deposition, canceled depositions at the last minute, missed a CPLR 3408 court-ordered mandatory conference, failed to comply with a court-ordered deposition deadline, and created confusion and delay with an inadequate and unclear effort to substitute counsel. With respect to plaintiff’s contention that it had the right as a corporation to determine who it would initially produce for a deposition, we note that defendants specifically named in their May 2014 demand the person who had executed an affidavit regarding the note and plaintiff failed to comply with the statutory requirement to, no later than 10 days prior to the scheduled deposition, notify defendants that another individual would instead be produced and the identity, description or title of such individual. Instead of giving timely notice to defendants, seeking a protective order or even producing a person it deemed knowledgeable, plaintiff simply refused to produce the named individual resulting in the failure to comply with the court-ordered date for conducting the deposition.” Citibank, N.A. v Bravo, 140 AD3d 1435-1436 (quotation and citations omitted).
Defendants now move for summary judgment dismissing the complaint, directing discharge and cancellation of the mortgage that the plaintiff seeks to foreclose in this action and directing cancellation of the notice of pendency, on the basis that the preclusion order prevents plaintiff from establishing the facts necessary to permit foreclosure of the mortgage. Notably, plaintiff did not at first directly oppose defendants’ motion; rather it moved for an order dismissing the action, without prejudice, and cancelling the notice of pendency, on the basis that it is not “able to verify compliance with pre-acceleration notice requirements” (Affirmation of [*2]Matthew Smith, Esq. dated December 19, 2016, ¶ 3).[FN1] Plaintiff has since, with leave of court, submitted a memorandum of law in opposition to defendants’ motion and defendants have filed a memorandum of law in response thereto.
Defendants accurately note that the preclusion order prevents plaintiff from establishing material elements of its cause of action for mortgage foreclosure, namely, its ownership of the debt instrument secured by the mortgage and of the debt purportedly due thereunder. Plaintiff argues that the dismissal of the action with prejudice is a drastic remedy disproportionate to plaintiff’s failure to provide disclosure that would cause it substantial prejudice and result in a windfall to defendants by permanently barring enforcement of the mortgage lien. In reply, defendants argue that dismissal of the action without prejudice would impermissibly allow plaintiff to avoid the adverse impact of the preclusion order.
The Court of Appeals has stated that “[i]f the credibility of court orders and the integrity of our judicial system are to be maintained, a litigant cannot ignore court orders with impunity” (Kihl v Pfeffer, 94 NY2d 118, 123 [1999]). In that regard, a motion for leave to discontinue an action without prejudice should not be granted where it would allow a party to circumvent an adverse determination of the court, such as an order of preclusion (see Baez v Parkway Mobile Homes, Inc., 125 AD3d 905 [2015], citing Kaplan v Village of Ossining, 35 AD3d 816, 816-807 [2006]; see also NBN Broadcasting Networks, 240 AD2d 319 [1997]). Notably, cases cited by plaintiff for the proposition that dismissals for failing to provide disclosure are not on the merits acknowledge that violations of a preclusion order merit the stronger sanction of dismissal on the merits (see e.g. Maitland v Trojan Elec. & Mach. Co., 65 NY2d 614 [1985] [in holding that the dismissal of a prior case for failing to comply with a disclosure order, the Court noted that”[t]his is not a case such as Strange v Montefiore Hosp. & Med. Center (59 NY2d 737) where plaintiff’s second action constituted an attempt to circumvent an order of preclusion”]; Aguilar v Jacoby, 34 AD3d 706 [2006]; Stray v Lutz, 306 AD2d 836 [2003], lv dismissed 100 NY2d 615 [2003]).
Granting defendants’ summary judgment motion and dismissing the action on the merits is a drastic remedy; however, that course was charted when the Appellate Division affirmed that the preclusion order was an appropriate sanction for plaintiff’s own wrongful conduct. Indeed, it bears emphasizing that the decision of the Appellate Division was made in light of its prior decisions acknowledging that preclusion is a drastic remedy that may prevent a party from [*3]proving its claim,[FN2] and that dismissal on the merits is a proper sanction where a party willfully fails to provide disclosure or where an order of preclusion prevents a party from proffering evidence in support of its claims.[FN3]
Finally, the Practice Commentaries, with extensive attention to Citibank, N.A. v Bravo, 140 AD3d 1434, also conclude that enforcement of the preclusion order requires dismissal of this action on the merits (see Connors, 2017 Supp Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3126:8, 2017 Supp Pamph, at 282-283).
Based on the foregoing:
1. Defendants’ motion is granted and the complaint is dismissed, with prejudice; the mortgage which plaintiff seeks to foreclose in this action is discharged and cancelled, the notice of pendency filed in this action is cancelled, and the Tompkins County Clerk is ordered to mark her records accordingly.
2. Plaintiff’s motion is denied.
This decision constitutes the order of the court. The transmittal of copies of this decision and order by the court shall not constitute notice of entry (see CPLR 5513).
Dated: March 7, 2017
Cortland, New York
HON. PHILLIP R. RUMSEY
Supreme Court Justice
The following documents were filed with the Clerk of the County of Tompkins:
Notice of motion dated October 19, 2016.
Affidavit of Edward Y. Crossmore, sworn to October 12, 2016, with Exhibit A.
Affidavit of David Bravo Cullen, sworn to October 13, 2016, with Exhibits A-F.
Notice of motion dated December 19, 2016.
Affirmation of Matthew Smith, Esq. dated December 19, 2016, with Exhibits A-B.
Affidavit of Edward Y. Crossmore, sworn to December 28, 2016, with Exhibit A.
Reply affirmation of Heino J. Muller, Esq. dated January 6, 2017.
Original Decision and Order dated March 7, 2017.
Footnotes
Footnote 1:Plaintiff was represented at commencement of the action by Shapiro, DiCaro & Barak, LLC. Defendants filed their first motion to preclude on September 11, 2013 and duly served their motion papers on that firm. McCabe, Weisberg & Conway, P.C. appeared in opposition to that motion, representing that plaintiff had contacted that firm on September 15, 2013 to request that it represent plaintiff in this action (see Affirmation of Matthew Russell, Esq. dated November 4, 2013, ¶ 9). Defendants accurately noted that Shaprio, DiCaro & Barak, LLC remained attorneys of record for plaintiff. McCabe, Weisberg & Conway, P.C. has continued to represent plaintiff in the trial court at all times since September 2013, and a Consent to Change Attorney executed by plaintiff’s agent on May 8, 2014 was finally filed on June 19, 2014, nine months after McCabe, Weisberg & Conway, P.C. first attempted to appear on plaintiff’s behalf.
Footnote 3:See Citibank, N.A. v Bravo, 140 AD3d at 1435, quoting Doherty v Schuyler Hills, Inc., 55 AD3d 1174, 1176 (2008) (the answer was stricken and plaintiffs were awarded default judgment on the merits based on defendant’s willful failure to comply with disclosure demands) and citing Hesse Constr., LLC v Fisher, 61 AD3d 1143, 1144 (2009) (summary judgment was granted to plaintiff where defendant was unable to offer any admissible evidence due to a preclusion order); see also Du Valle v Swan Lake Resort Hotel, LLC, 26 AD3d 616 (2006) (summary judgment was properly granted to defendant who argued that a preclusion order prevented plaintiff from establishing her claim); Greaves v Burlingame, 12 AD3d 730 (2004), lv dismissed and denied 5 NY3d 741 (2005), lv dismissed 5 NY3d 742 (2005) (summary judgment was properly granted in plaintiff’s favor where preclusion order prevented defendant from submitting competent proof sufficient to raise a question of fact).
Florida’s Sawgrass Marriott Golf Resort & Spa offers the kinds of amenities you’d expect from a swanky venue overlooking the Atlantic coast: two championship golf courses, villas with private balconies, therapy baths and massage lessons.
It’s also where Wells Fargo will hold its annual meeting for shareholders next month, the San Francisco bank said in a regulatory filing last week. It will be the first such gathering since regulators fined Wells in September over its sales scandal.
But at a time when Wells is trying to move past the scandal, the choice of the Ponte Vedra Beach venue is sparking fresh criticism from shareholders already angered by revelations of its sales practices.
COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII
LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)
ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET
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Sunday – March 19
The Rule Ritual: Revealing for the First Time the Centuries Long Hidden Linguistic Origin of Rule Enterprise Reasoning Misleading Today’s Foreclosure Courts ———————
The Foreclosure Hour this Sunday turns attention away from individual cases to share with listeners some original basic research.
We will for the first time anywhere reveal new insight into the foreclosure crisis by challenging the basic philosophy behind the traditional legal reasoning of American Courts and hence of the entire legal profession.
On this Sunday’s live show we will explore the deep-seated, heretofore unseen semantic causes of the foreclosure crisis and the even broader lessons we can learn from such basic research to improve the functioning of our entire legal system.
Surprisingly, few realize that centuries old foreclosure rules originally were designed to assist and to protect homeowners, yet today the very opposite is true.
Today’s show reveals fundamental flaws in the way all of us, most importantly our judges, have been viewing Rules, identifying an egregious error in legal reasoning endemic to our entire institutions of governance that not only has been instrumentally unfairly abusing homeowners, but which by transforming most of our judges into word robots is now threatening all of our governmental institutions.
We promise that listeners to this ground breaking show, including any judges, legislators and attorneys listening, will never view Rules in the same erroneous way ever again.
This new, accurate understanding of the difference between a “Rule” and a “Rule Statement” promises to ultimately impact our social sciences in the same way the splitting of the atom impacted our physical sciences.
Reminded that The Foreclosure Hour begins one hour later Pacific and Eastern time as most of the Mainland, unlike Hawaii, switches to Daylight Savings Time.
MAHIN OSKOUI, an individual, Plaintiff-Appellant,
v.
J.P. MORGAN CHASE BANK, N.A.; U.S. BANK, N.A., as Trustee, Successor in Interest to Bank of America, National Association as successor by merger to LaSalle Bank NA as Trustee for WAMU Pass-Through Certificates Series 2007-HY06 Trust Erroneously Sued As U.S. Bank, N.A., Defendants-Appellees.
Argued and Submitted January 13, 2017 — Pasadena, California.
Filed March 13, 2017.
Appeal from the United States District Court for the Central District of California; D.C. No. 2:12-cv-03511-FMO-AGR, Fernando M. Olguin, District Judge, Presiding.
Richard L. Antognini (argued), Law Office of Richard L. Antognini, Grass Valley, California, for Plaintiff-Appellant.
Richard P. Steelman, Jr. (argued) and Glenn J. Plattner, Bryan Cave LLP, Santa Monica, California, for Defendants-Appellees.
Before: Stephen S. Trott, M. Margaret McKeown, and Paul J. Watford, Circuit Judges.
The panel reversed the district court’s summary judgment in favor of J.P. Morgan Chase Bank, N.A. in Mahin Oskoui’s action seeking damages she allegedly suffered when she unsuccessfully attempted to modify the loan on her home.
The panel held that the facts plainly demonstrated a viable claim under California’s Unfair Competition Law on the ground that Oskoui was a victim of an unconscionable process.
The panel also held that the district court erred in failing to acknowledge Oskoui’sclaim for breach of contract in her pro se complaint. The panel remanded with instructions to permit Oskoui to amend if necessary and to proceed with her complaint for a breach of contract.
The panel also remanded with instructions to permit Oskoui to amend her complaint to allege a right to rescind pursuant to Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015) (holding that the Truth in Lending Act gives a borrower the right to rescind certain loans), conditioned on Oskoui’s delivery of a rescission letter.
OPINION
TROTT, Circuit Judge.
Mahin Oskoui sued defendant J.P. Morgan Chase Bank, N.A. (“Chase”) for damages allegedly suffered when she unsuccessfully attempted over a two-year period to modify the loan on her home. Acting as her own attorney, she asserted inter alia claims for a breach of contract, “breach of implied covenant of good faith and fair dealings,” and a violation of California’s Unfair Competition Law (“UCL”), CAL. BUS. & PROF. CODE § 17200, the latter based on an assertion that she had been victimized by Chase’s unfair or fraudulent business acts or practices. She also attempted to sue Chase for a violation of 15 U.S.C. § 1601, the Truth in Lending Act (“TILA”). Without argument, the district court declined to consider Oskoui’s breach of contract claim and granted summary judgment to defendant Chase.
We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291. We reverse and remand.
In 1990, Mahin Oskoui, a registered nurse, purchased a single-family home for herself in Los Angeles, California. Her down payment on the property was $250,000. In 2007, the appraised value of the property was $1,250,000. On March 27, 2007, she refinanced her acquisition with a loan from Washington Mutual Bank (“WaMu”). As security, she executed a promissory note and a deed of trust securing the note with the property. At that time, WaMu was the United States’ largest savings and loan association until it imploded in 2008 during the subprime mortgage crisis and the collapse of the so-called “housing bubble.” In turn, this debacle triggered massive loan defaults and a severe national economic recession. The Office of Thrift Supervision closed WaMu on September 25, 2008, naming the Federal Deposit Insurance Corporation (“FDIC”) as WaMu’s receiver. On September 25, 2008, the FDIC transferred WaMu’s assets to defendant Chase.
In November 2008, Oskoui missed a loan payment, as did many homeowners in similar dire straits. In January 2009, not knowing about WaMu’s demise, she applied to WaMu for a loan modification. On May 21, 2009, Chase sent her a letter offering her a “Trial Plan Agreement.” The letter did not advise her of what was required of a borrower or of a loan for approval under the applicable modification rules, regulations, and guidelines. The letter did advise her that “[i]f you comply with all the terms of this Agreement, we’ll consider a permanent workout solution for your loan once the Trial Plan has been completed.” The only specified term of the Agreement was that Oskoui remit three equal payments of $3,280.05 to Chase between July and September 2009. Oskoui signed the Agreement on June 1, 2009.
Oskoui fully complied with the Agreement’s payment term by timely sending $9,840.15 to Chase, only to be informed on November 10, 2009, that she did not qualify “at this time” for a modification under either the federal Making Home Affordable Program (“HAMP”), 12 U.S.C. § 5219(a), or the Chase Modification Program (“CHAMP”) because “[y]our income is insufficient for the amount of credit you have requested.” Her monthly income during that period was $10,575.00. Chase gave Oskoui no additional reasons for its denial even though its internal paperwork reveals two others, each apparently fatal to her attempt to modify her loan. One barrier was the unpaid principal balance on the loan — $833,000 — which was higher than the amount allowed under the HAMP Guidelines. This factor rendered her ineligible for a HAMP modification. The other barrier, which made her ineligible for CHAMP relief, was the loan’s failure to satisfy Chase’s net present value test (“NPV”). Chase’s internal modification documents reveal that a person identified as “CHANG” determined on November 10, 2009 that Oskoui’s application should be rejected. The document says, “denied — income insufficient and did not pass the npv calc test.”
This test, which Chase did not reveal or explain in its November 10, 2009 letter, compares the NPV expected from a modification to the NPV of the unmodified loan. The test compares cash flow from the modification to the cash flow expected from the absence of a modification. If the cash flow from a viable modification exceeds that of a non-modified loan, HAMP requires a servicer to offer a modification to a borrower. If the NPV test generates a negative result, modification is optional.
Not only did Chase fail to advise Oskoui that she was not eligible for these modifications, it told her instead that “we may be able to offer other alternatives to help avoid the negative impact” of foreclosure and a deficiency judgment. Chase failed to explain what its “other alternatives” were or what Oskoui would be required to demonstrate to qualify for them.
Given this enticing invitation, Oskoui tried again, by submitting in January 2010 another application for a loan modification. She had no inkling that Chase had already determined that she was not eligible because of the amount of the unpaid balance of the loan and the NPV problems with it.
On March 1, 2010, Chase responded by letter to Oskoui’s new application. This letter said Chase “wants to help you stay in your home” and confirmed receipt and review of “your verification of income documentation.” Included with the letter were three payment coupons and three return envelopes, each coupon in the amount of $2,988.49, and due on April 1, May 1, and June 1, 2010. The March 1, 2010 letter also stated on the first page: “After successful completion of the Trial Period Plan, CHASE will send you a Modification Agreement for your signature which will modify the Loan as necessary to reflect this new payment amount.” (emphasis added). Chase said not a word about any concerns about her income and did not specify anything in that regard as a condition precedent to a modification. The March 1, 2010 letter says on page 2, however, that “[i]f all payments are made as scheduled, we will consider a permanent workout solution for your Loan.” This language on page 2, which is followed by bold type detailing the manner in which she should remit her payments, when read in the light of Chase’s promise on page 1 creates at best a misleading ambiguity. Page 2 attempts to temper what Chase offered and promised on page 1: a Modification Agreement for her signature. Once again, as with Chase’s November 10, 2009 letter, its March 1, 2010 letter, which Oskoui appended to her complaint as “Exhibit A,” failed to alert her to her apparent ineligibility for a modification.
The next event in this drawn-out process came as quickly as night extinguishes the day. On March 2, 2010, one day after Chase’s letter welcoming Oskoui for a second time to its Trial Period Plan (“TPP”) and acknowledging receipt of her income verification documents, Chase sent her another letter telling her for the first time that she was not eligible for a federal HAMP modification “because the current unpaid principal balance on your Loan is higher than the program limit. . . .” Not only did the letter omit any reference to the fatal NPV test, it said that Chase was “happy” to tell Oskoui that she “may be eligible for other modification programs” and that Chase may be able to offer “other alternatives” to stave off “the negative impact a possible foreclosure may have on [her] credit rating, the risk of a deficiency judgment. . . and the possible adverse tax effects of a foreclosure. . . .” Oskoui took these consequences as menacing threats, not friendly legal advice. Chase’s letter did not explain what its “other alternatives” were or what it would take to qualify for them. Also, Chase made no mention of the payments it had requested the previous day in its March 1, 2010 letter. Because Chase had left the door open to relief and even urged her to do so, Oskoui diligently made — and Chase accepted — her monthly payments as solicited, not just for three, but for seven months.
On October 1, 2010, Oskoui sent a $2,988.49 payment to Chase. Nevertheless, on October 25, 2010, a foreclosure notice appeared on her front door, listing a foreclosure sale date of November 18, 2010. Remarkably, Chase allegedly sent her another letter dated November 1, 2010 encouraging her to continue to seek a modification. Chase even told her she might “qualify for monetary incentives that will be used to pay down the principal balance of your loan if you make your modified payments on time.” At this point, Oskoui withdrew from the process. She was now $33,738.00 poorer with nothing to show for her efforts to comply with Chase’s requests.
In a signed pro se declaration submitted to the district court in connection with Chase’s motion for summary judgment, Oskoui explained her reluctance to continue the process any further.
Defendants’ actions have proven their lack of intention in modifying plaintiff’s loan and putting her through an intense, stressful 2 years of agony and fear of losing her home which was not an ethical or just thing to do. The [October] payment was the last one plaintiff made, and she had stopped following the modification program that seemed to be a way for Chase to extract more money with the only purpose in mind of “[s]elf-enrichment.” She had lost faith in Chase’s modification game and was also completely exhausted emotionally and physically between handling Chase’s never-ending documents requests, foreclosure threats, her highly demanding job as a registered [n]urse and daily life’s responsibilities. . . .
* * *
In fact, because of Plaintiff’s advanced age, the damage done by Defendants has been more severe than it might have been for a younger person. Since her profession requires emotional wellbeing in order to carry out her duty as RN. She felt less than qualified to deal with other people’s pain and life & death situations. After 2 long years of modification drama, she still was put through the horrors and nightmares of post foreclosure ordeal. Fear of homelessness, and embarrassment in the closely-knit homeowners’ community of her 25 year lived neighborhood. Not to mention the trauma of this litigation. All this, just because defendants’ insatiable appetite for ENRICHMENT.
On January 4, 2011 — two years after her first application — Chase sent Oskoui a final letter denying her application, stating, “We are unable to offer you a modification through the federal Home Affordable Modification Program (HAMP) or any Chase modification programs . . . because you did not provide us with the documents we requested.”
II
Notwithstanding Oskoui’s explanation of her understandable withdrawal from the exhausting two-year process, the district court granted Chase’s motion for summary judgment on the ground that she had failed in late 2010 to provide Chase with the “requested documentation to support her loan modification request.” The court declined to entertain her contractual claim because she had only “conclusorily” asserted that the “modification back-and-forth ripened into a contract with Chase” and remarked that she “sensibly” had not included a breach of contract claim in her first amended complaint.
III
In denying Chase’s Fed. R. Civ. P. 12(b)(6) motion to dismiss as to Oskoui’s UCL claim, Judge George Wu remarked that Oskoui had indeed presented the court with a viable claim under California law for a fraudulent and an unfair business practice. Citing Davis v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1169 (9th Cir. 2012) (“A business practice is fraudulent under the UCL if members of the public are likely to be deceived.”), Judge Wu said,
Although Defendants express some uncertainty concerning the nature of Plaintiff’s claims, she expressly includes a claim for unfair business practices, which the Court presumes (and Defendants have presumed) refers to a claim under California Business and Professions Code § 17200. The Court can conceive of Plaintiff’s allegations satisfying both the “fraudulent” and “unfair” prongs of a section 17200 claim. If what Plaintiff alleges is true — that Chase’s left hand sought payments from Plaintiff pursuant to a plan designed to give her an opportunity to modify her loan while, notwithstanding Plaintiff’s payment in accordance with that plan, Chase’s right hand continued all along with foreclosureproceedings and both hands should have known from the start that Plaintiff’s loan would not be eligible for modification in any event — the Court can conceive of such allegations stating a section 17200 claim.
Minutes of Hearing on Defendants’ Motion to Dismiss Plaintiff’s First Amended Complaint, Oskoui v. JPMorgan Chase Bank, N.A., No. 2:12-cv-03511-FMO-AGR (C.D. Cal. Oct. 4, 2012), ECF No. 23 (footnote omitted).
We agree with Judge Wu’s analysis. The facts we have arrayed plainly demonstrate a viable UCL claim.
The published HAMP Guidelines disqualified Oskoui from HAMP relief. In an age of computerized records, Chase no doubt had this disqualifying information at its fingertips and could have made this simple determination within a matter of minutes. But instead of determining eligibility before asking for money — logical protocol called for by HAMP as of January 28, 2010 — Chase asked Oskoui for more payments. See Bushell v. JPMorgan Chase Bank, N.A., 220 Cal. App. 4th 915, 924 n.4 (Cal. Ct. App. 2013) (citing U.S. Dep’t of Treasury, HAMP Supplemental Directive No. 10-01 (Jan. 28, 2010)). And even when Chase told Oskoui the next day that she did not qualify for HAMP, it did not inform her of her precarious situation concerning unexplained “other alternatives,” preferring instead to accept payments for seven additional months.
Moreover, in Chase’s words, she was “not eligible” for proprietary CHAMP modification because her debt to income ratio was “well over the 31% limit.” Chase did not timely alert Oskoui to this problem or explain it in its March 2, 2010 letter. Two years after she began this journey and $33,738.00 out of pocket, Oskoui received nothing for her efforts. She argues that “[i]f Chase had told her she was not eligible for a loan modification, she never would have made those payments.” This option should have been hers to exercise.
It boils down to this. With its March 1, 2010 letter, Chase deceptively enticed and invited Oskoui into a process with the demonstrably false promise that a loan modification was within her reach if she were to make three monthly payments of $2,988.49 each. The next day — and for the first time — Chase eliminated a HAMP modification from its menu, but neither advised Oskoui what the CHAMP Guidelines required nor suspended additional payments until it could determine her CHAMP eligibility. Chase now says in its brief that the CHAMP Guidelines did not have the HAMP loan balance limitation, but conspicuous by its absence in Chase’s representation is any reference to the NPV test. Chase’s counsel suggested during oral argument that Chase had a valid reason for continuing the process as it did, i.e., that Oskoui’s income situation might have improved. On this record, any such expectation would have been patently unreasonable.
We can discern no acceptable utility in Chase’s alluring “other alternatives” strategy or tactics. Whether Chase’s Kafkaesque conduct was intentional or the result of corporate ineptitude — as suggested by Judge Wu — the result is the same: The facts in this record would amply support a verdict on this claim in Oskoui’s favor on the ground that she was the victim of an unconscionable process. Chase knew that she was a 68 year old nurse in serious economic and personal distress, yet it strung her along for two years, kept moving the finish line, accepted her money, and then brushed her aside. During this process, Oskoui made numerous frustrating attempts in person and by other means to seek guidance from Chase, only to be turned away.
IV
The district court erred in failing to acknowledge Oskoui’s claim for breach of contract in her pro se complaint. She explicitly styled her complaint on its first page as one for “BREACH OF CONTRACT AND BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALINGS.” On page 4, she averred that:
Once an offer of TPP was made to Plaintiff, Chase entered into a contract which was binding, superseding and implicitly having the effect of suspending the default condition that had existed between Plaintiff (alleged borrower) and Defendants. . . . Plaintiff successfully executed and met all terms outlined in the TPP and far exceeded all her obligations. . . . Plaintiff not only met all the financial obligations required by Chase but most importantly, provided ample documentation demonstrating her financial ability to qualify for a modification loan. . . .
On page 11, she said,
In the absence of a valid reason for refusing to modify, it can logically be inferred, through Defendant’s breach of the TPP contract, that it was simply extracting additional payments under the guise of a loan modification offer while still intending to foreclose.
Moreover, Oskoui attached to her complaint Chase’s March 1, 2010 letter containing its representation that upon her successful completion of the TPP, Chase “will send you a Modification Agreement for your signature which will modify the loan as necessary to reflect this new payment amount.”
The Seventh Circuit’s opinion in Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012), which we identified in Corvello v. Wells Fargo Bank, NA, 728 F.3d 878, 880 (9th Cir. 2013) (per curiam) as “the leading federal appellate decision” on this issue of contract, illuminates the viability of Oskoui’s claim. As in the case now before us, Wells Fargo argued in Wigod that its TPP language was not an enforceable offer because it was conditioned on Wells Fargo’s further review of Wigod’s financial information to ensure that she qualified under HAMP. Wigod, 673 F.3d at 561. The Seventh Circuit dismissed this contention as an unreasonable reading of the TPP. The court pointed out that the TPP spelled out two conditions precedent to Wells Fargo’s obligation to offer a permanent modification, and that Wigod alleged that she fulfilled both conditions. Id. at 560-61. The court refused to allow other language in the TPP to nullify Wells Fargo’s clear promise of an offer of a permanent modification if Wigod complied with its conditions. Id. at 562-63.
In Bushell, the California Court of Appeal identified Wigod as “provid[ing] guidance,” and it followed the Seventh Circuit’s approach to this issue. 220 Cal. App. 4th at 918-19. We also noted in Corvello that there is “no material difference” between California and Illinois law. 728 F.3d at 884.
Although its letter of November 3, 2010 thanks Oskoui for participating in the HAMP program, Chase now protests that it never offered a HAMP modification to Oskoui. There’s the rub. Once Oskoui made her three payments, Chase was obligated by the explicit language of its offer to send her an Agreement for her signature “which will modify the loan as necessary to reflect this new payment amount.” Chase did not call it either a HAMP agreement or a CHAMP agreement, just an “Agreement.” What program the Agreement was part of is irrelevant. Chase must abide by its own language. It did not live up to its promise. If Oskoui did not consider the offered modification to be acceptable, at that point she could have extracted herself from this aspect of her difficult situation instead of soldiering on towards a beckoning mirage.
In her original complaint, Oskoui included a claim for a violation of the Truth in Leading Act. Judge Wu dismissed this allegation pursuant to Fed. R. Civ. P. 12(b)6 for failure to state a claim. Subsequently, the Supreme Court decided Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015). The Court held that TILA gives a borrower the right to rescind certain loans, and that this right may be exercised by a written notice from the borrower to the lender within three years after the consummation of the transaction. Oskoui now asks for leave to amend her operative complaint to articulate a claim for rescission. She asserts that she sent a TILA rescission letter to Chase in December 2009, within the three years required by the statute. 15 U.S.C. § 1635(f). Chase responds that its agreement with the FDIC protects it from any liability WaMu may have had in connection with its previous business. Oskoui says not so because she sent her rescission letter to Chase, not to WaMu.
This dispute is best resolved in the district court. Accordingly, we remand with instructions to permit Oskoui to amend her complaint to allege a right to rescind pursuant to Jesinoski. However, this permission to amend is conditional on her prompt delivery to the court of the “rescission” letter of December 2009 to which she refers in her brief.
REVERSED and REMANDED for further proceedings.
[*] This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.
Wells Fargo & Co’s board of directors awarded Chief Executive Timothy Sloan $12.8 million for his work last year, a 17 percent increase, despite scrapping executive bonuses in light of an accounts scandal that rocked the bank last year, according to a proxy filing on Wednesday.
Sloan was CEO for only a few months in 2016. He took over after his predecessor, John Stumpf, resigned in light of revelations that thousands of Wells Fargo employees had opened perhaps millions of unauthorized customer accounts.
Sloan, 56, had been president and chief operating officer until October. Though his promotion came with a higher base salary and more long-term stock awards, his total package was less than the $19.3 million Stumpf received for 2015.
Let’s get rid of the lawyers in Washington — and bring in the bankers.
That’s the pitch from a Wall Street lobbying group that represents the $17 trillion banking industry, which said Tuesday it’s launching a program to “help bankers run for office.”
The program — which will teach bankers everything from raising funds to kissing babies — is aimed at swelling banker ranks in elected state and federal positions, said Rob Nichols, CEO of the American Bankers Association.
Big banks have cut yet another settlement from the mortgage crisis at pennies on the dollar.
Wells Fargo, Royal Bank of Scotland and Deutsche Bank have reached a $165 million class-action settlement of investor claims over their underwriting for the now-bankrupt subprime lender NovaStar Mortgage.
The truce resolves claims that offering materials prepared by the banks misled investors into believing that loans underlying roughly $7.55 billion of NovaStar mortgage-backed securities they bought were properly underwritten, and were safe.
District Court of Appeal of Florida, Fourth District.
March 8, 2017.
Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Joel T. Lazarus, Judge; L.T. Case No. CACE 13-002348 (11).
Anthony J. Badway and Kendrick Almaguer of The Ticktin Law Group, PLLC, Deerfield Beach, for appellants.
Adam M. Topel of Liebler Gonzalez & Portuondo, Miami, for appellee.
PER CURIAM.
We reverse the summary final judgment of foreclosure because a genuine issue of material fact was created by the two different versions of the note filed by the appellee bank. Attached to the original complaint was a copy of the original note which contained three indorsements on the last page of the note. Attached to the amended complaint and to the summary judgment motion was a purported copy of the original note which contained two indorsements on the last page of the note and a third indorsement on an allonge. Appellants’ amended answer raised lack of standing as an affirmative defense and challenged the validity of the allonge. In support of its motion for summary judgment, the bank neither addressed the discrepancy between the notes nor countered the lack of standing defense.
Reversed and remanded.
GROSS, MAY and DAMOORGIAN, JJ., concur.
Not final until disposition of timely filed motion for rehearing.
If it becomes law, a bill that would end class-action lawsuits would be a disservice to the working class — voters who are said to have driven the 2016 election.
A chilling little bill is working its way through Congress. It could have the effect of ending the class action as an American institution.
The legislation, the Fairness in Class Action Litigation Act, passed the House last week. If it becomes law, it will be one more perverse disservice to the working class who are said to have driven the 2016 election, because the main losers will be ordinary Americans.
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