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CFPB Takes Action Against Citibank For Student Loan Servicing Failures That Harmed Borrowers

CFPB Takes Action Against Citibank For Student Loan Servicing Failures That Harmed Borrowers

Company Deceived Borrowers About Tax Benefits, Incorrectly Charged Late Fees and Interest, Sent Misleading Monthly Bills and Incomplete Notices

The Consumer Financial Protection Bureau (CFPB) today took action against Citibank, N.A. for student loan servicing failures that harmed borrowers. Citibank misled borrowers into believing that they were not eligible for a valuable tax deduction on interest paid on certain student loans. The company also incorrectly charged late fees and added interest to the student loan balances of borrowers who were still in school and eligible to defer their loan payments. Citibank also misled consumers about how much they had to pay in their monthly bills and failed to disclose required information after denying borrowers’ requests to release loan cosigners. The Bureau is ordering Citibank to end these illegal servicing practices, and to pay $3.75 million in redress to consumers and a $2.75 million civil money penalty.

“Citibank’s servicing failures made it more costly and confusing for borrowers trying to pay back their student loans,” said CFPB Director Richard Cordray. “We are ordering Citibank to fix its servicing problems and provide redress to borrowers who were harmed.”

Citibank, based in Sioux Falls, South Dakota, is one of the world’s largest banks with over $1.4 trillion in assets. Citibank provides a variety of products to consumers, including credit cards, mortgages, personal loans, and lines of credit. For years, Citibank made private student loans to consumers and also serviced these loans. As a loan servicer, Citibank manages and collects payments, and provides customer service for borrowers. They are also responsible for providing borrowers with accurate periodic account statements and supplying year-end tax information. The servicer also keeps track of the borrower’s in-school enrollment status and is responsible for granting and maintaining deferments when appropriate.

For the student loan accounts that Citibank was servicing, the Bureau found that Citibank misrepresented important information on borrowers’ eligibility for a valuable tax deduction, failed to refund interest and late fees it erroneously charged, overstated monthly minimum payment amounts in monthly bills, and sent faulty notices after denying borrowers’ requests to release a loan cosigner. Specifically, the Bureau found that Citibank:

  • Misled borrowers about their tax-deduction benefits: Federal law allows some borrowers to deduct up to $2,500 in student loan interest paid on “qualified education loans” annually. On its website and periodic account statements, Citibank made statements that suggested borrowers had not paid qualified interest, or that the borrowers were not eligible for the qualified interest tax deduction. Consequently, borrowers did not seek this tax benefit, even though they may have been able to benefit from it.
  • Incorrectly charged late fees and interest on loan balances to students still in school:Current students are eligible for in-school deferments, which postpone repayment until six months after they are no longer enrolled in school. Citibank erroneously canceled in-school deferments for certain borrowers based on inaccurate information about their enrollment status. In doing so, Citibank charged late fees when the borrowers did not make payments, even though payments should not have been due. Citibank also erroneously added interest to the loan principal, and failed to refund late fees and erroneously charged interest after discovering that in-school deferments had been terminated in error.
  • Overstated the minimum monthly payment due on account statements: Citibank serviced some loans for “mixed-status borrowers,” who had multiple student loans with Citibank, some of which were in repayment status, while other loans were in deferment status. While loans were in deferment, no payment was required, though borrowers had the option to make payments on those loans. For mixed-status borrowers with student loans in or approaching repayment, Citibank overstated the minimum amount due on the mixed-status account statements.
  • Failed to disclose required information after refusing to release a cosigner: Many consumers applied for student loans from Citibank with a cosigner to help guarantee the loan. Some of these borrowers later requested that these cosigners be released for some or all of their student loans with Citibank. When Citibank received an application from a student loan borrower to release a cosigner and place the loan in the borrower’s name only, Citibank would make a determination based on information in the borrower’s credit report and score. When Citibank denied a cosigner release application, it failed to provide the borrower with all of the information required under the Fair Credit Reporting Act.

Enforcement Action

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bureau has the authority to take action against institutions violating consumer financial laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB’s order requires Citibank to:

  • Refund $3.75 million to harmed consumers: The Bureau’s order requires Citibank to pay $3.75 million in restitution to harmed consumers who were charged erroneous interest or late fees, paid an overstated minimum monthly payment, or received inadequate notices as a result of Citibank’s faulty servicing.
  •  Make changes to their servicing practices: The Bureau’s order requires Citibank to provide accurate information regarding student loan interest paid, implement a policy to reverse erroneously assessed interest or late fees, and to provide borrowers who were denied a cosigner release with their credit scores, the phone number of the credit reporting agency that generated the credit report, and disclosure language confirming that the credit reporting agency did not make the decline decision.
  • Pay a $2.75 million fine: The Bureau’s order requires Citibank to pay a $2.75 million penalty to the CFPB’s Civil Penalty Fund.

A copy of the Bureau’s consent order is available at:http://files.consumerfinance.gov/f/documents/cfpb_citibank-n.a._consent-order_112017.pdf 

The CFPB previously addressed many of these issues in a related 2015 enforcement action against Discover for servicing practices related to the loans it acquired from Citibank beginning in late 2010. Today’s enforcement action applies to the private student loans that Citibank retained, and continued to service, after that period.

Earlier this year the Bureau issued a consumer advisory warning student loan borrowers to watch out for similar servicing errors driven by faulty information about whether a borrower was enrolled in school. This advisory highlighted complaints from consumers about surprise late fees and other charges driven by inaccurate college enrollment information.

The Bureau’s consumer advisory is available at: https://www.consumerfinance.gov/about-us/blog/consumer-advisory-bad-information-about-your-college-enrollment-status-can-cost-you/

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Judge rips Colorado AG’s case against foreclosure giant as “groundless and frivolous,” orders state to pay attorneys’ fees

Judge rips Colorado AG’s case against foreclosure giant as “groundless and frivolous,” orders state to pay attorneys’ fees

Denver Post-

The Colorado attorney general’s office was so haphazard and reckless in its failed pursuit to prove former foreclosure king Larry Castle and his law firm had defrauded thousands of consumers that a judge has ordered it to pay his attorneys’ tab – an amount that easily could toll into the millions of dollars.

Denver District Judge Morris Hoffman on Tuesday said Attorney General Cynthia Coffman “was wrong to bring and pursue most of this case” against Castle, his former law firm, The Castle Law Group, and two other associated businesses caught up in the investigation. He said the civil lawsuit the state filed was “substantially groundless and substantially frivolous” enough to merit the award of the defendants’ attorneys’ fees.

“The evidence, or lack of evidence, at trial was nothing short of breathtaking, especially compared to the investigative build-up and the serious and pervasive allegations in the complaint,” Hoffman wrote in a far-ranging, 20-page opinion. “The case (the state) put on wasn’t even a sick relative of the robust allegations they made. … Their 40-page, 217-paragraph complaint reads more like a press release than a complaint.”

[DENVER POST]

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TFH 11/26 | Thanksgiving Special: The Best Foreclosure Related Judicial Opinions of 2017

TFH 11/26 | Thanksgiving Special: The Best Foreclosure Related Judicial Opinions of 2017

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 – November 26

 ———————
Thanksgiving Special: The Best Foreclosure Related Judicial Opinions of 2017

 

 

 

Too many homeowners and their families are still unfairly being evicted from their homes in 2017 as a result of yet unexplained, long-standing judicial tolerance of pretender lenders’ false loan documentation and other securitized trust abuses.

Yet there have nevertheless been several very important judicial decisions this year favorable to homeowners well worth noting.

This Sunday, John Waihee and I will provide our nominations by month for the best such judicial opinions nationwide in 2017, and review their individual significance with you as time allows.

Call in and share with our listeners your own individual selections: (888) 565-8383 or (808) 521-8383.

Don’t miss our selections and those of our listeners for 2017.

Especially join us this Thanksgiving weekend in honoring those handful of judges who are helping to bring justice to this too long neglected and heretofore too low visibility area of American law.

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

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Host: Gary Dubin Co-Host: John Waihee

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CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII (2:00 p.m. instead of 3:00 p.m. due to the start of the Raiders football game being aired this Sunday starting in our regular time slot.)
5:00 PM PACIFIC
8:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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US BANK TRUST NATIONAL ASSOCIATION v. Lopez, 2017 IL App (2d) | As assignment of debt to Plaintiff must have occurred after foreclosure complaint was filed, assignment of mortgage did not give Plaintiff the rights of a holder, and Plaintiff lacked standing at the time complaint was filed.

US BANK TRUST NATIONAL ASSOCIATION v. Lopez, 2017 IL App (2d) | As assignment of debt to Plaintiff must have occurred after foreclosure complaint was filed, assignment of mortgage did not give Plaintiff the rights of a holder, and Plaintiff lacked standing at the time complaint was filed.

2017 IL App (2d) 160967

U.S. BANK TRUST NATIONAL ASSOCIATION, Not in Its Individual Capacity but Solely as Owner Trustee for Queen’s Park Oval Asset Holding Trust, Plaintiff-Appellee,
v.
MARIO A. LOPEZ, a/k/a Mario Augusto Lopez-Franco; MARTHA D. LOPEZ; UNKNOWN OWNERS; and NONRECORD CLAIMANTS, Defendants-Appellants.

No. 2-16-0967.
Appellate Court of Illinois, Second District.

Opinion filed November 14, 2017.
Appeal from the Circuit Court of Du Page County, No. 14-CH-47, Honorable Robert G. Gibson, Judge, Presiding.

JUSTICE BURKE delivered the judgment of the court, with opinion.

Justices McLaren and Schostok concurred in the judgment and opinion.

OPINION

JUSTICE BURKE delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, U.S. Bank Trust National Association, as owner trustee for Queen’s Park Oval Asset Holding Trust, filed a foreclosure suit against defendants, Mario A. Lopez, a/k/a Mario Augusto Lopez-Franco, and Martha D. Lopez. Defendants raised the affirmative defense that plaintiff lacked standing when it filed the suit. Defendants also raised the affirmative defense that plaintiff violated Illinois Supreme Court Rule 113 (eff. May 1, 2013) and failed to comply with Title 24, section 203.604 of the Code of Federal Regulations (Code) (24 C.F.R. § 203.604 (2014)). The trial court struck defendants’ affirmative defenses, granted plaintiff summary judgment, and entered a judgment for foreclosure and sale. On appeal, defendants challenge the trial court’s orders striking their affirmative defenses and granting plaintiff summary judgment. For the following reasons, we reverse the judgment of foreclosure, vacate the order approving the sale, and dismiss the foreclosure action.

¶ 2 I. BACKGROUND

¶ 3 A. Initial Foreclosure Proceedings and Amended Complaint

¶ 4 On March 11, 2014, plaintiff filed a complaint to foreclose the mortgage on property owned by defendants. The complaint contained a copy of the mortgage and the note. The note bore two indorsements, one from the original lender to Countrywide Bank, FSB (Countrywide), and the second from Countrywide to the Secretary of Housing and Urban Development (HUD), a nonparty to the case. The note included no indorsements or assignments to plaintiff. The complaint alleged in paragraph “n” that plaintiff was the “legal holder of the indebtedness.”

¶ 5 Defendants filed an answer with affirmative defenses on May 12, 2014, claiming that plaintiff lacked standing because the note attached to the complaint was indorsed to HUD and not to plaintiff, that plaintiff failed to comply with Rule 113 because the note did not show an indorsement to plaintiff, and that plaintiff failed to comply with Title 21, section 203.604, of the Code.

¶ 6 On November 7, 2014, plaintiff amended its complaint to resolve any issue regarding the note. The allegations were substantially similar to those in the original complaint except that it alleged at paragraph “n” that “on March 11, 2014[,] Plaintiff was a non-holder in possession of the Note with rights of a holder. Plaintiff is currently the legal holder of the Note.” Also, plaintiff attached to the pleading a copy of the note that bore the same two indorsements, one from the original lender to Countrywide and the second from Countrywide to HUD. The amended complaint included an “allonge to note” that was not filed with the original complaint. The allonge, which is undated, contains a special indorsement from HUD to Queen’s Park Oval Asset Holding Trust, the trust for which plaintiff was the named trustee.

¶ 7 B. Defendants’ Motion to Dismiss the Amended Complaint

¶ 8 On December 24, 2014, defendants filed a motion to dismiss plaintiff’s amended complaint, pursuant to section 2-619.1 of the Code of Civil Procedure (735 ILCS 5/2-619.1 (West 2014)). They repeated the arguments they raised in their affirmative defenses, that plaintiff lacked standing and that the foreclosure action was barred under Rule 113. Defendants claimed that the defect could not be cured by amendment. Following argument, the court denied defendants’ motion to dismiss, without prejudice.

¶ 9 C. Defendants’ Affirmative Defenses to the Amended Complaint

¶ 10 On April 16, 2015, defendants filed an answer to plaintiff’s amended complaint and repeated their previous affirmative defenses. They argued again that, when the case was filed, plaintiff lacked standing, as the note attached to the original complaint was indorsed to HUD and no assignment to plaintiffs was attached. Defendants maintained that the allonge attached to plaintiff’s amended complaint contained an indorsement executed after the filing of the original complaint. Defendants supported their answer with judicial admissions made by plaintiff throughout the proceedings that it was not in possession of an indorsed note at the time of the original filing. Defendants alleged that plaintiff violated Rule 113 when it amended the complaint to include the allonge. Defendants also alleged that plaintiff failed to comply with Title 24, section 203.604, of the Code because plaintiff did not provide for the required face-to-face meeting with defendants or offer defendants “an opportunity to conduct one.”

¶ 11 D. Striking the Affirmative Defenses, Summary Judgment, and Judicial Sale

¶ 12 Plaintiff filed a motion to strike the affirmative defenses, pursuant to section 2-619.1. The motion attached a January 16, 2014, assignment of the mortgage without the note, various affidavits, and a Federal Express tracking label. Plaintiff argued that the standing defense was insufficiently pleaded because defendants did not properly articulate how plaintiff lacked standing and defendants failed to support their claim that a violation of Rule 113 compelled dismissal. Plaintiff maintained that the assignment established its legal capacity as a nonholder with the rights of a holder when the original complaint was filed.

¶ 13 At the hearing on the motion to strike, plaintiff produced the original note, and the trial court read a description of it into the record. The trial court determined that plaintiff was a nonholder with the rights of a holder. Following the hearing, the trial court granted plaintiff’s motion and struck the affirmative defenses with prejudice.

¶ 14 With the affirmative defenses stricken, the trial court granted plaintiff’s motion for summary judgment and entered a judgment of foreclosure and sale on July 18, 2016. The judicial sale occurred, and the court granted plaintiff’s motion to confirm the sale on November 7, 2016. Defendants timely appeal from the trial court’s orders granting plaintiff’s motion to strike their affirmative defenses pursuant to section 2-619.1 and granting it summary judgment.

¶ 15 II. ANALYSIS

¶ 16 Defendants raise a number of arguments on appeal regarding plaintiff’s legal standing to bring the foreclosure action, plaintiff’s violation of Rule 113, and plaintiff’s failure to strictly adhere to the mandated servicing guidelines of Title 24, section 203.604, of the Code. We initially examine the trial court’s entry of the foreclosure judgment in plaintiff’s favor, the validity of which rests on whether plaintiff had the ability to bring this suit against defendants.

¶ 17 Plaintiff’s motion to strike defendants’ affirmative defense of standing was brought pursuant to section 2-619.1 of the Code of Civil Procedure (735 ILCS 5/2-619.1 (West 2016)). A motion under section 2-619.1 allows a party to combine a section 2-615 (735 ILCS 5/2-615 (West 2016)) motion to dismiss based upon insufficient pleadings with a section 2-619 (735 ILCS 5/2-619 (West 2016)) motion to dismiss based upon certain defects or defenses. 735 ILCS 5/2-619.1 (West 2016); Carr v. Koch, 2011 IL App (4th) 110117, ¶ 25 (citing Edelman, Combs & Latturner v. Hinshaw & Culbertson, 338 Ill. App. 3d 156, 164 (2003)). When the legal sufficiency of a complaint is challenged by a section 2-615 motion to dismiss, all well-pleaded facts in the complaint are taken as true and a reviewing court must determine whether the allegations of the complaint, construed in the light most favorable to the plaintiff, are sufficient to establish a cause of action upon which relief may be granted. King v. First Capital Financial Services Corp., 215 Ill. 2d 1, 11-12 (2005). On the other hand, a motion to dismiss under section 2-619 admits the legal sufficiency of the complaint, but asserts affirmative matter that defeats the claim. Id. at 12. If a cause of action is dismissed due to the affirmative matter asserted in a section 2-619 motion to dismiss, the question on appeal is whether there is a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law. Illinois Graphics Co. v. Nickum, 159 Ill. 2d 469, 494 (1994). We review de novo an order striking a pleading pursuant to section 2-619.1. Carr, 2011 IL App (4th) 110117, ¶ 25.

¶ 18 The doctrine of standing requires that a party have a real interest in the action and its outcome. Wexler v. Wirtz Corp., 211 Ill. 2d 18, 23 (2004). A party’s standing to sue must be determined as of the time the suit is filed. Deutsche Bank National Trust Co. v. Gilbert, 2012 IL App (2d) 120164, ¶ 24. “[A] party either has standing at the time the suit is brought or it does not.” Village of Kildeer v. Village of Lake Zurich, 167 Ill. App. 3d 783, 786 (1988). An action to foreclose upon a mortgage may be filed by a mortgagee or by an agent or successor of a mortgagee. Gilbert,2012 IL App (2d) 120164, ¶ 15.

¶ 19 Typically, lack of standing to bring an action is an affirmative defense, and the burden of proving the defense is on the party asserting it. Lebron v. Gottlieb Memorial Hospital, 237 Ill. 2d 217, 252 (2010)Bayview Loan Servicing, LLC v. Cornejo, 2015 IL App (3d) 140412, ¶ 12.

¶ 20 To support their argument that plaintiff had no standing to sue them on the date the foreclosure action was filed, defendants point to the note attached to the original complaint. The original complaint alleged that plaintiff was the legal holder of the indebtedness of the attached note. However, the note establishes that it was indorsed to a nonparty to the case. When plaintiff filed the complaint, the note was indorsed to HUD, not to plaintiff. Indeed, plaintiff conceded that the note was not indorsed to plaintiff at that time.

¶ 21 In Gilbert, the defendant raised standing as an affirmative defense. In support, the defendant showed that the note and the mortgage attached to the original complaint identified not the plaintiff but another mortgagee. Also, the assignment attached to the amended complaint showed that the interest in the mortgage was not assigned to the plaintiff until several months after the foreclosure action was filed. Gilbert, 2012 IL App (2d) 120164, ¶ 17. We held that this evidence met the defendant’s burden to show that the plaintiff lacked standing when the suit was filed, because the plaintiff was not identified on either the note or the mortgage. The documents attached to the complaint contradicted the plaintiff’s allegation that it was “the mortgagee” and they supported the defendant’s argument that the plaintiff did not have an interest in the mortgage that would confer standing. Because the defendant made a prima facie showing that the plaintiff lacked standing, the burden shifted to the plaintiff to refute this evidence or demonstrate a question of fact. Id. ¶ 21.

¶ 22 Similarly here, the note attached to the original complaint showed on its face that it was not indorsed to plaintiff. At the hearing on defendants’ motion to dismiss plaintiff’s amended complaint, plaintiff conceded that the note was not indorsed to plaintiff on the date the original complaint was filed. Plaintiff alleged that the copy of the note attached to its original complaint was a “copy of the note as it currently exists.” Thus, the allonge, which has no date of execution, must have been executed after the filing of the original complaint. As defendants observe, plaintiff’s admission that the note attached to its complaint was in its current form leaves no other possible interpretation. As in Gilbert, defendants have made a prima facieshowing of a lack of standing, and plaintiff has failed to rebut it.

¶ 23 Defendants further contend that “equally inaccurate” is plaintiff’s position that it was a “non-holder with rights of a holder” when the action was filed. Plaintiff’s argument rests on the January 16, 2014, assignment of the mortgage, from HUD to plaintiff. However, “`[a]n assignment of the mortgage without an assignment of the debt creates no right in the assignee.'” Bristol v. Wells Fargo Bank, National Ass’n, 137 So. 3d 1130, 1133 (Fla. Dist. Ct. App. 2014) (quoting Vance v. Fields,172 So. 2d 613, 614 (Fla. Dist. Ct. App. 1965); see also Elvin v. Wuchetich, 326 Ill. 285, 288-89 (1927) (assignment of mortgage on truck without transferring note transferred no interest in truck authorizing replevin). Without the assignment of the debt to plaintiff, which must have occurred after the foreclosure complaint was filed, when the allonge was executed, the assignment of the mortgage did not give plaintiff the rights of a holder.

¶ 24 Plaintiff also attempts to rebut defendants’ argument by stating that “it proved it possessed the original note before it filed the lawsuit.” Plaintiff points to its counsel’s affidavit that established that he possessed the note on plaintiff’s behalf before it filed the foreclosure suit. A similar contention was raised by the plaintiff in Gilbert. The plaintiff endeavored to challenge the standing argument by noting that, in an affidavit of an employee of a company that serviced loans for the plaintiff, he averred that, based on his review of “`the documents contained in the Gilbert loan file,'” the interest was assigned to the plaintiff before the filing of the initial complaint. Gilbert, 2012 IL App (2d) 120164, ¶ 7. The plaintiff argued that this statement must be taken as true in the absence of contrary evidence. Id. ¶ 19. Noting that this principle applies only to admissible evidence, we held that the statement about the date of the assignment was inadmissible because it was unsupported by any foundation. Id. (citing Complete Conference Coordinators, Inc. v. Kumon North America, Inc., 394 Ill. App. 3d 105, 108 (2009)).

¶ 25 In this case, plaintiff points to the affidavit of Robert H. Rappe, Jr., managing attorney of the law firm representing plaintiff. He attached three exhibits to his affidavit. Exhibit 1 is an image of a computer screen reflecting that the original indorsed note was scanned and imaged into the firm’s case management system on March 10, 2014, the day before the original complaint was filed. Exhibit 2 is a copy of the original note, which was also imaged and electronically stored. Exhibit 3 is the allonge to the note. However, because plaintiff’s name does not appear on the original note and because the assignment of the note occurred after the original complaint was filed, these items do not rebut defendants’ standing argument.

¶ 26 Plaintiff cites Cornejo, 2015 IL App (3d) 140412, in support of its argument that attaching a copy of the note to the foreclosure complaint was prima facieevidence that it owned the note. In Cornejo, the note attached to the foreclosure complaint was held to be prima facie evidence that the plaintiff owned the note, even though it lacked an indorsement in blank. Id. ¶ 13. The Third District Appellate Court held that the defendants failed to present any evidence that the transfer did not occur before the complaint was filed and that the defendants thus failed to meet their burden of showing that the plaintiff lacked standing. Id. ¶ 14. Here, as in Gilbert, defendants presented evidence that showed that the assignment of the debt actually took place after the original complaint was filed and that plaintiff thus lacked standing when the complaint was filed.

¶ 27 Based on our determination that plaintiff lacked standing, we need not address the other issues defendants raise.

¶ 28 III. CONCLUSION

¶ 29 For the preceding reasons, we reverse the judgment of foreclosure, vacate the order approving the sale, and dismiss the foreclosure action.

¶ 30 Judgment reversed; order vacated; action dismissed.

 

_______________________________

Illinois Appellate Court
Civil Court
Citation
Case Number:

2017 IL App (2d) 160967

Decision Date:

November 14, 2017

District:

2d Dist.

Division/County:

DuPage Co.

Justice:

BURKE

Holding:

Reversed and vacated; action dismissed.

Plaintiff bank, as owner trustee, filed foreclosure suit against Defendants. The note attached to original complaint showed on its face that it was not indorsed to Plaintiff. Defendants made a prima facie showing of a lack of standing, and Plaintiff failed to rebut it. As assignment of debt to Plaintiff must have occurred after foreclosure complaint was filed, assignment of mortgage did not give Plaintiff the rights of a holder, and Plaintiff lacked standing at the time complaint was filed. (McLAREN and SCHOSTOK, concurring.)

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JPMorgan hired ex-cons, gave them access to customer data: watchdog

JPMorgan hired ex-cons, gave them access to customer data: watchdog

NY POST-

JPMorgan Chase hired ex-cons into jobs that could access clients’ bank-account information as it failed to properly screen thousands of employees for more than eight years, according to an industry watchdog.

The financial behemoth headed by Jamie Dimon failed to perform proper background screens on as many as 8,670 employees from January 2009 to May of this year, according to the Financial Industry Regulatory Authority.

The bank failed to properly fingerprint about 2,000 employees on time, according to Finra. Others were only screened for having committed financial crimes, the watchdog said.

[NY POST]

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Wells Fargo Sued Over In-House 401(k) Funds, Again

Wells Fargo Sued Over In-House 401(k) Funds, Again

Big Law Business-

Wells Fargo & Co. is once again in the crosshairs of a proposed class action challenging the in-house investment funds in the company’s 401(k) plan.

The lawsuit, filed Nov. 17 in a Minnesota federal court, accuses the banking giant of filling its 401(k) plan with expensive and poorly performing investment funds that earned fees for Wells Fargo. The company is also accused of failing to use its “enormous size” as the third-largest 401(k) plan in the country—with nearly $40 billion in assets at one point—to negotiate for lower fees ( Wayman v. Wells Fargo & Co. , D. Minn., No. 0:17-cv-05153-PJS-KMM, complaint filed 11/17/17 ).

The claims echo those in a 2016 lawsuit that Wells Fargo defeated when a federal judge determined that the company couldn’t be liable under the Employee Retirement Income Security Act for “failing to choose the cheapest fund” for its 401(k) plan. That decision is currently on appeal in the U.S. Court of Appeals for the Eighth Circuit, where Wells Fargo has received support from industry groups including the U.S. Chamber of Commerce and the Securities Industry and Financial Markets Association.

[BIG LAW BUSINESS]

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Eight of world’s biggest banks to settle cartel case with Brussels

Eight of world’s biggest banks to settle cartel case with Brussels

Irish Times-

Eight of the world’s largest banks are set to discuss financial settlements with the European Commission, drawing a line under a four-year probe into allegations that they formed a cartel to rig the €4.5 trillion global foreign-exchange market.

UBSRoyal Bank of Scotland, JPMorgan Chase, CitigroupBarclaysHSBCand two other banks are gearing up to negotiate settlements likely to cost billions of euro combined, according to sources.

The cartel case – one of the biggest that Brussels has handled – poses a challenge to investigators because of the complexity of the alleged misconduct across a large number of currencies. It is one of the last in a flurry of investigations into the manipulation of financial benchmarks.

[IRISH TIMES]

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Banks delayed foreclosures to influence discussion of Dodd-Frank, paper finds

Banks delayed foreclosures to influence discussion of Dodd-Frank, paper finds

Market Watch-

In 2009-2010, the housing crisis was at its worst: an average of nearly 300,000 new foreclosures were started every month during those two years.

But those numbers should have been higher, according to a paper released in October.

Banks that serviced delinquent mortgages held off on starting foreclosure proceedings on loans located in the electoral districts of members of the House Financial Services Committee in order to influence Congressional action on the Dodd-Frank financial reform bill, researchers found.

[MARKETWATCH]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Woman Says Bank Foreclosed On Her Home Despite Making Mortgage Payments

Woman Says Bank Foreclosed On Her Home Despite Making Mortgage Payments

CBS-

Imagine paying your mortgage on time every month, and your bank takes your home away anyway.

It may not make any sense, but this mortgage mess is happening.

Holidays, birthdays, baby’s first steps — since 2004, Kim Shibles’ beloved Erma, New Jersey home has been the backdrop for everything.

“I would like to have back what they took,” she told CBS2’s Kristine Johnson.

[CBS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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TFH 11/19 | Rebroadcast of Foreclosure Workshop #23: Special Checklist of Twenty Proven Ways of Bulldozing Through a Foreclosing Mortgagee’s Dismissal and Summary Judgment Firewalls

TFH 11/19 | Rebroadcast of Foreclosure Workshop #23: Special Checklist of Twenty Proven Ways of Bulldozing Through a Foreclosing Mortgagee’s Dismissal and Summary Judgment Firewalls

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

.

.

Sunday – November 19

 ———————
Rebroadcast of Foreclosure Workshop #23: Special Checklist of Twenty Proven Ways of Bulldozing Through a Foreclosing Mortgagee’s Dismissal and Summary Judgment Firewalls

 

 

 

In just about every foreclosure case the major events usually are (1) a summary judgment hearing in which a foreclosing plaintiff seeks to prevail on its claims, or against a homeowner defendant’s counterclaims, without having to go to trial and (2) a dismissal hearing in which a foreclosing plaintiff seeks to prevail by having a homeowner defendant’s counterclaims dismissed.

Last year we summarized for our listeners twenty proven ways of defeating in a foreclosure case a motion to dismiss or a motion for summary judgment, afterwards receiving many emails of appreciation from listeners who reported prevailing based upon the airing of that show.

Too many homeowners facing foreclosure and their attorneys (if any), however, are still not using such proven strategies to their maximum advantage.

John and I therefore decided to rebroadcast that November 20, 2016 Show this Sunday, especially for the benefit of our new listeners.

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

.
Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII (2:00 p.m. instead of 3:00 p.m. due to the start of the Raiders football game being aired this Sunday starting in our regular time slot.)
5:00 PM PACIFIC
8:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

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Wall St. traders secretly used chat rooms to rig Treasury bond prices: suit

Wall St. traders secretly used chat rooms to rig Treasury bond prices: suit

NY POST-

Wall Street banks secretly shared client information in online chat rooms in order to rig auctions for the $14 trillion US Treasurys market, according to an explosive lawsuit filed in Manhattan federal court on Wednesday.

The move wrongly fattened the banks’ profits and picked profits from clients, the suit claims.

The new accusations, leveled by several pension funds and wealthy individual investors, are contained in an expanded class-action suit originally filed in July 2015 — and include an unusual twist: Some of the evidence came from confidential informants and one of the banks sued in the earlier action.

[NEW YORK POST]

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Richard Cordray Stepping Down As Head Of U.S. Consumer Protection Agency

Richard Cordray Stepping Down As Head Of U.S. Consumer Protection Agency

NPR-

Richard Cordray, the embattled director of Consumer Financial Protection Bureau, announced Wednesday that he will leave the agency by the end of November.

“I am confident that you will continue to move forward, nurture this institution we have built together, and maintain its essential value to the American public,” Cordray wrote in an email to the agency’s staff.

Cordray, who has been a tough regulator of banks and other financial institutions, has been a frequent target of Republican lawmakers. Most recently, Congress killed a rule by the bureau that allowed consumers to bring class-action lawsuits against banks and credit card companies to resolve financial disputes.

[NPR]

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Justice investigation into Russian laundering through Deutsche Bank gone quiet

Justice investigation into Russian laundering through Deutsche Bank gone quiet

CNN-

A Justice Department investigation into Deutsche Bank’s role in a $10 billion Russian money laundering scheme has gone dormant months after the bank settled with regulators, according to people with direct knowledge of the investigation.

DOJ’s money laundering division along with the US attorney’s office for the Southern District of New York have been investigating the German lender over allegations it missed red flags that allowed Russians to launder billions of dollars out of Moscow using an elaborate trading scheme.
The bank has paid over $670 million in civil penalties to US and UK regulators this year relating to the Russian trades and disclosed in regulatory filings as recently as last month that it set aside an undisclosed amount to cover a potential settlement with DOJ. It is common for regulators and DOJ to move to settle cases at the same time, which companies often advocate for so they can put the matter behind them.
[CNN]
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Arias v. Gutman, Mintz, Baker & Sonnenfeldt | Win for Consumers: Second Circuit Reverses Debt Collection Suit

Arias v. Gutman, Mintz, Baker & Sonnenfeldt | Win for Consumers: Second Circuit Reverses Debt Collection Suit

LAW-

Attorneys for the plaintiffs in a debt collection suit lauded a decision Monday by the U.S. Court of Appeals for the Second Circuit, calling it a major victory for low-income people facing aggressive and potentially illegal collection practices.

In Arias v. Gutman, Mintz, Baker & Sonnenfeldt, 16?2165?cv, the panel of Circuit Judges Guido Calabresi and Raymond Lohier Jr., along with U.S. District Judge Katherine Forrest of the Southern District of New York, sitting by designation, vacated the motion for judgment on the pleadings by U.S. District Judge George Daniels for the Southern District of New York in a suit against Gutman, Mintz, Baker & Sonnenfeldt for violations of the Fair Debt Collection Practices Act. The panel remanded the case for further proceedings.

 According to plaintiff Franklin Arias’ co-counsel on appeal, National Center for Law and Economic Justice staff attorney Claudia Wilner, the order is a watershed decision by the appellate court in addressing unfair actions under the FDCPA.

“We’ve never had a court ruling that looks at these practices before,” Wilner said. “To have a court say so clearly that the representations are deceptive, that the conduct is unfair, really is just so important.”

[LAW]

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DFS Fines Credit Suisse AG $135 Million for Unlawful, Unsafe and Unsound Conduct in its Foreign Exchange Trading Business

DFS Fines Credit Suisse AG $135 Million for Unlawful, Unsafe and Unsound Conduct in its Foreign Exchange Trading Business

Press Release

November 13, 2017

Contact: Richard Loconte, 212-709-1691

DFS FINES CREDIT SUISSE AG $135 MILLION FOR UNLAWFUL, UNSAFE AND UNSOUND CONDUCT IN ITS FOREIGN EXCHANGE TRADING BUSINESS

Credit Suisse Traders Engaged in Efforts to Manipulate Prices, Profited at the Expense of Clients, and Improperly Shared Customer Information

Credit Suisse Executives Encouraged Traders to Engage in Front Running, Which Deceived and Disadvantaged Customers

The Bank Will Also Engage a Consultant Approved by DFS to Review and Report Agreed Upon Remedial Efforts to DFS

Financial Services Superintendent Maria T. Vullo today announced that Credit Suisse AG agreed to pay a $135 million fine as part of a consent order with the New York State Department of Financial Services (DFS) for violations of New York banking law, including improper efforts with other global banks, front-running client orders, and additional unlawful conduct that disadvantaged customers.  The violations announced today stem from an investigation by DFS determining that from at least 2008 to 2015, Credit Suisse consistently engaged in unlawful, unsafe and unsound conduct by failing to implement effective controls over its foreign exchange business.  As part of the consent order, Credit Suisse will also engage a consultant, subject to approval by DFS in its sole discretion, to review and report to the Department about the bank’s remedial efforts with regards to its FX business.

“Certain Credit Suisse executives in the bank’s foreign exchange unit deliberately fostered a corrupt culture that failed to implement effective controls in its foreign exchange trading business, which allowed the bank’s foreign exchange traders and others to violate New York State law and repeatedly abuse the trust of their customers over the course of many years,” said Superintendent Vullo.  “DFS will not tolerate any violations of law that threaten the integrity of our markets and undermine customer confidence.”

The DFS investigation found that for many years, Credit Suisse foreign exchange traders participated in multi-party electronic chat rooms, where traders, sometimes using code names to discreetly share confidential customer information, discussed coordinating trading activity and attempted to manipulate currency prices or benchmark rates.  By improperly working together, these traders sought to diminish competition among banks, allowing these banks and traders to reap higher profits from the execution of foreign exchange trades at customers’ expense.  Credit Suisse traders also engaged in improper activity by sharing of confidential customer information, again enhancing their own profits to the detriment of customers.

“Building ammo,” a manipulative practice used by Credit Suisse and other banks, involved an agreement among traders at different banks to allow a single, designated trader to take on multiple orders from the other participants.  This ensured that multiple traders minimized their risks by staying out of each other’s way, especially during the potentially chaotic trading around a fixing window.  Allowing a designated trader to build and deploy “ammo” provided the designated trader enhanced market power and to push the price of a currency pair in a direction benefitting the traders involved.

The DFS investigation also found that front-running – trading ahead of known client orders – was encouraged by executives of eFX, Credit Suisse’s electronic trading platform.  From at least April 2010 to June 2013, Credit Suisse employed an algorithm designed to front-run clients’ limit and stop-loss orders.  Credit Suisse programmers designed the algorithm to predict the probability that a client’s limit or stop-loss order would be triggered.   Credit Suisse traders would apparently enter the market with that information, knowing that the market might move in a specific direction if the stop-loss or limit order was triggered.  From April 2010 through June 2013, Credit Suisse executed approximately 31,000 limit orders and 41,000 stop-loss orders that may have been a source of profit through front running.  Additionally, because front-running can occur on orders that ultimately remain unfilled, Credit Suisse may have profited as well from front running many tens of thousands of additional client orders.

The DFS investigation also discovered that the bank expanded use of the “last look” functionality in its electronic trading platform to improve profit, improperly disadvantaging customers, without sufficiently disclosing to them how the bank’s electronic trading was conducted. In addition, Credit Suisse misled customers about the existence and extent of its use of “last look” and implemented a transparency initiative related to the function only after negative press reports.

Under the consent order announced today, Credit Suisse will take remedial actions to prevent the conduct from re-occurring and will submit plans to DFS to improve senior management oversight of the company’s compliance with New York State laws and regulations relating to the company’s foreign exchange trading business.  The bank will also enhance internal controls and compliance, and improve its compliance risk management program with respect to its foreign exchange trading business; and enhance its internal audit program with respect to its compliance with applicable laws and regulations, as well as its internal policies and procedures.

Credit Suisse will also engage a consultant for one year, subject to approval by DFS in its sole discretion, to review and report to the Department about the bank’s remedial efforts with regards to its FX business, including:

  • The bank’s compliance with applicable New York State and federal laws and regulations;
  • The bank’s compliance with recognized FX industry best practices;
  • The bank’s creation of enhanced policies and procedures governing the FX business, and its compliance with those policies and procedures; and
  • The bank’s maintenance of an honest, ethical, and fair FX business.

Credit Suisse must also submit to DFS a written progress report detailing all actions taken to secure compliance with the provisions of the consent order eighteen months and twenty-four months after the order’s execution.

Credit Suisse does business in the U.S. through a foreign bank branch in New York State that is licensed and regulated by DFS, as well as through other affiliates.  The New York branch holds assets of approximately $42 billion.  Credit Suisse conducts foreign exchange trading operations in New York, London, and other global foreign exchange hubs.

A copy of the consent order can be found here.

###

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SEC Fines Wells Advisors $3.5 Million Over Money-Launder Procedures

SEC Fines Wells Advisors $3.5 Million Over Money-Launder Procedures

Advisor Hub-

The ongoing scandal at Wells Fargo & Co. extended to its wealth management unit on Monday as the Securities and Exchange Commission imposed a $3.5 million penalty on Wells Fargo Advisors for anti-money-laundering reporting violations.

Without admitting or denying the findings that new managers beginning in March 2012 pressured compliance officials to stop filing suspicious activity reports (SARs) in violation of the Bank Secrecy Act, Wells agreed to the settlement.

The regulator charged Wells with failing to file the reports, or for delaying filings, at least 50 times over 15 months, saying the majority of the violations involved accounts at Wells Advisor branches catering to international customers. The failures related to customers who had previously been the subject of suspicious activity reports.

[ADVISOR HUB]

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Wells Fargo settles $5.4 million for repossessing 450 service members’ cars

Wells Fargo settles $5.4 million for repossessing 450 service members’ cars

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Tuesday, November 14, 2017

Justice Department Obtains $5.4 Million in Additional Relief to Compensate Servicemembers for Unlawful Repossessions by Wells Fargo Dealer Services

The Justice Department announced today that it has obtained an additional $5.4 million for servicemembers whose vehicles were unlawfully repossessed by Wells Fargo Bank, N.A. in violation of the Servicemembers Civil Relief Act (SCRA).  The bank, which does business under the name Wells Fargo Dealer Services, has agreed to pay this money to approximately 450 servicemembers under a 2016 settlement that resolved the department’s SCRA lawsuit against the company.  This additional amount brings the total compensation under the settlement to more than $10.1 million and the total number of servicemembers eligible for relief to more than 860.

On Sept. 29, 2016, the department filed a complaint in United States v. Wells Fargo Bank N.A., d/b/a Wells Fargo Dealer Services in the Central District of California, alleging that Wells Fargo repossessed 413 vehicles of SCRA-protected servicemembers without court orders between Jan. 1, 2008 and July 1, 2015.  On the same day, the department agreed to a settlement that required Wells Fargo to pay $10,000 to each of the affected servicemembers, plus any lost equity in the vehicle with interest.  Wells Fargo was also required to pay a $60,000 civil penalty to the United States and repair the credit of all affected servicemembers.   At the time of the settlement, the department announced that 413 servicemembers were eligible to receive compensation. The prior press release can be found here.

Since entering into the settlement with the department in September 2016, Wells Fargo has identified additional violations affecting approximately 450 servicemembers that occurred during the period covered by the settlement.  Wells Fargo has begun to provide over $5,400,000 in compensation to these additional servicemembers under the agreement.  Together with the compensation previously announced by the department in September 2016, a total of more than 860 servicemembers and their co-borrowers are eligible to receive $10,183,950.

“Just a few days ago, we observed Veterans Day to honor those who have served our country so bravely,” said Acting Assistant Attorney General John M. Gore.  “The Justice Department will continue to honor their service throughout the year by vigorously enforcing servicemembers’ rights under federal law.  The men and women of our armed forces should be able to devote their full attention to their military duties, without having to worry about their cars being repossessed back home.  We are pleased that our settlement agreement has ensured that hundreds of additional servicemembers will be compensated for the damages they suffered as a result of illegal auto repossessions.”

“The SCRA provides important protections and is intended to prevent unnecessary financial hardship for the brave women and men who serve in our armed forces,” said Acting United States Attorney Sandra R. Brown. “Losing an automobile through an unlawful repossession while serving our country is a problem servicemembers should not have to confront. We are pleased that Wells Fargo is taking action to compensate these additional servicemembers as required under the settlement with the Justice Department.  My Office is committed to protecting the rights of servicemembers on all fronts.”

The SCRA requires a court to review and approve any repossession if the servicemember took out the loan and made a payment before entering military service.  The court may delay the repossession or require the lender to refund prior payments before repossessing.  The court may also appoint an attorney to represent the servicemember, require the lender to post a bond with the court and issue any other orders it deems necessary to protect the servicemember.  By failing to obtain court orders before repossessing motor vehicles owned by protected servicemembers, Wells Fargo prevented servicemembers from obtaining a court’s review of whether their repossessions should be delayed or adjusted to account for their military service.

For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.  Servicemembers and their dependents who believe that their rights under SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office.  Office locations may be found at legalassistance.law.af.mil/content/locator.php.

Topic(s):
Servicemembers Initiative
Press Release Number:

 

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MACHLES v. McCABE, WEISBERG & CONWAY, PC, Dist. Court, ED Pennsylvania | activities as a debt collector, which activities are not immunized from UTCPL liability

MACHLES v. McCABE, WEISBERG & CONWAY, PC, Dist. Court, ED Pennsylvania | activities as a debt collector, which activities are not immunized from UTCPL liability

 

ARNOLD MACHLES, AS EXECUTOR OF THE ESTATE OF CHARLES H. KOONS, Plaintiff,
v.
MCCABE, WEISBERG & CONWAY, P.C., d/b/a MCCABE, WEISBERG & CONWAY, LLC, AND CIT BANK, N.A., d/b/a FINANCIAL FREEDOM, Defendants.

Civil Action No. 17-1015.
United States District Court, E.D. Pennsylvania.
November 7, 2017.
ARNOLD MACHLES, Plaintiff, represented by DAVID EUGENE PEARSON.

MCCABE, WEISBERG & CONWAY, P.C., Defendant, represented by JOSEPH F. RIGA, MCCABE WEISBERG & CONWAY PC.

CIT BANK, N.A., Defendant, represented by MARY BETH BUCHANAN, BRYAN CAVE LLP.

OPINION

WENDY BEETLESTONE, District Judge.

This case arises out of a foreclosure action involving a reverse mortgage on a property in Clifton Heights, Pennsylvania (“the Property”) that became due on the death of the borrower. Plaintiff, who is the executor of the borrower’s estate, claims that the Defendants, the bank that purports to hold the note and mortgage as well as the law firm hired by the bank to pursue the foreclosure action in state court, made false or misleading misrepresentations and used unfair practices. Both Defendants have filed a motion to dismiss. For the reasons outlined herein, CIT Bank N.A.’s (“CIT”) motion will be granted in its entirety, and McCabe, Weisberg & Conway, P.C.’s motion will be denied.

I. FACTUAL AND PROCEDURAL BACKGROUND

On November 30, 2015, Financial Freedom, a division of CIT, sent Plaintiff a notice of intent to foreclose on the Property. The notice refers to a mortgage on the Property “held by CIT Bank, N.A. and serviced by Financial Freedom” and states that due to the death of the borrower, the mortgage was in in default in the amount of $161,545.23. The default, according to the notice, could not be cured “however, foreclosure can be avoided by repaying the loan balance or selling the property for at least 95% of the appraised value.” The notice represented that the property had an appraised value of $170,000.

According to Plaintiff, CIT was not the successor in interest to the note and was, thus, not entitled to foreclose on it. Furthermore, the appraised value of the Property at the time the notice was sent was $67,000, not $170,000.

These misrepresentations, claims Plaintiff, were compounded in filings made on behalf of CIT’s attorneys — Defendant McCabe, Weisberg & Conway, P.C. (“McCabe”) — in the mortgage foreclosure action they filed in the court of Common Pleas of Delaware County. Specifically, the pleadings include statements that CIT was the assignee of the mortgage and note — which Plaintiff contends it was not — as well as an assertion that CIT had “complied with all notice requirements as prescribed by 41 P.S. § 101, et seq. (“Act 6″) . . .” which Plaintiff says it had not. Plaintiff also contends that a denial that CIT had violated the National Housing Act was also a misrepresentation.

Plaintiff’s claims are that these representations — in the notice and in the state court pleadings — were made in violation of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692e-1692f, the Pennsylvania Fair Credit Extension Uniformity Act (“FCEUA”), 73 P.S. §§ 2270.4(a)-(b), 2270.5, and the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. § 201-3.

II. LEGAL STANDARD

Defendants move to dismiss Plaintiff’s claims under Federal Rules of Civil Procedure Rule 12(b)(6) for failure to state a claim. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Threadbare” recitations of the elements of a claim supported only by “conclusory statements” will not suffice. Id. at 683. Rather, a plaintiff must allege some facts to raise the allegation above the level of mere speculation. Great Western Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 159, 176 (3d Cir. 2010) (citing Twombly, 550 U.S. at 555).

In analyzing a motion to dismiss legal conclusions are disregarded, well-pleaded factual allegations are taken as true, and a determination is made whether those facts state a “plausible claim for relief.” Fowler v. UPMC Shadyside, 578 F. 3d 203, 210-11 (3d Cir. 2009). Generally that determination is made upon a review of the allegations contained in the complaint, exhibits attached appropriately to the complaint and matters of public record. Pension Benefit Guar. Corp. v. White Consol. Indus., Inc. 998 F.2d 1192, 1996 (3d Cir. 1993). Here, where Defendants have attached to their motion to dismiss various pleadings in the state court proceedings, those may properly be considered as well. See S. Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Ground Ltd., 181 F.3d 410, 426 (3d Cir. 1999).[1] Furthermore, a court may grant a motion to dismiss under Rule 12(b)(6) if there is a dispositive issue of law. Neitzke v. Williams, 490 U.S. 319, 326-27 (1989).

III. DISCUSSION

a. FDCPA

Plaintiff alleges that the Defendants made false or misleading representations “in connection with the collection of [a] debt.” 15 U.S.C. § 1692e. More specifically, he contends that the Defendants violated multiple provisions of the FDCPA regarding the prohibition from “falsely represent[ing] the character and/or legal status of a debt, . . . represent[ing] and/or impl[ying] that nonpayment of a debt would result in the seizure, garnishment, attachment, or sale of property, when such action was unlawful, . . . [or] us[ing] a false representation or deceptive means to attempt to collect a debt.”[2] 15 U.S.C. §§ 1692e(2), 1692e(4), 1692e(10). Given that the FDCPA is designed “to eliminate abusive debt collection practices by debt collectors,” its language is construed broadly to give full effect to those purposes. See 15 U.S.C. § 1692(e); Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 148 (3d Cir. 2013)Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227, 232 (3d Cir. 2005).

To state a FDCPA claim, a plaintiff must allege that: (1) he is a consumer; (2) the defendant is a debt collector; (3) the challenged practice involves an attempt to collect a “debt” as the FDCPA defines it; and (4) the defendant has violated a provision of the FDCPA in attempting to collect a debt. Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014).

In this case, Defendants do not challenge Plaintiff’s status as a consumer or that the notice and the lawsuit were attempts to collect a debt. Neither does McCabe contest that it is a “debt collector” within the meaning of the FDCPA. However CIT does seek to refute that label and both CIT and McCabe argue that neither of them has violated a provision of the FDCPA.

A. Any Alleged Misrepresentations Made Before March 7, 2016 are Barred by the Statute of Limitations

As a preliminary matter any representations contained in the Notice of Intent to foreclose on the property are not actionable under the FDCPA because they are barred by the statute of limitations. A claim under the FDCPA must be brought “within one year from the date on which the violation occurs.” 15 U.S.C. § 1692k(d). In this case, the notice was sent out on November 30, 2015, one year, three months and one week before Plaintiff filed suit on March 7, 2017. Therefore, the only misrepresentations that are at issue here are the allegedly false statements made in the state court foreclosure action, which was filed on March 8, 2016 or in the reply to Plaintiff’s answer and new matter, filed on July 8, 2016.

B. CIT is not a “Debt Collector” Under the FDCPA

Prior to evaluating those statements, there is a question as to whether CIT is a “debt collector” within the purview of the FDCPA. The FDCPA defines a “debt collector” as “[1] any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or [2] who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be due another.” 15 U.S.C. § 1692a(6). Thus, “a business may be a `debt collector’ because its `principal purpose’ is the collection of debts or because it `regularly’ engages in the collection of debts.” Oppong v. First Union Mortg. Corp., 215 F. App’x 114, 118 (3d Cir. 2007). Here, Plaintiff merely recites the FDCPA’s definitions of a “debt collector” in his Complaint, alleging no facts to support his assertion that CIT’s “principal purpose” is the collection of debt. Neither does he allege any facts to support the allegation that CIT “regularly collect[s]” debts. These threadbare recitations of the legal definition of a debt collector, without more, fail to sufficiently allege that CIT is a debt collector. Cf. White v. Bank of America Bank, NA, 597 Fed. App’x 1015, 1020 (11th Cir. 2014) (dismissing FDCPA claims where the plaintiff “alleged no facts, only a conclusory assertion that [Defendant] `regularly attempt[ed] to collect debts.”); Glover v. F.D.I.C., 698 F.3d 139, 152 (3d Cir. 2012) (refusing to dismiss FDCPA claims where Plaintiff alleged that Defendants regularly institute litigation to collect debts and Defendants self-identified as debt collectors in litigation documents).

The term “debt collector” in the statute specifically excludes “any person collecting or attempting to collect any debt owed . . .” if the debt “was not in default at the time it was obtained by such person.” 15 U.S.C. § 1692a(6)(F). Plaintiff alleges that the mortgage was in default at the time it was obtained by CIT and extrapolates from that CIT is not a debt collector. There is a dispute between the parties as to whether the mortgage was in default at the time it was obtained by CIT. The complaint alleges that it was, but provides little more than a bald legal assertion unsupported by factual allegations. CIT meanwhile attaches to its brief documentary evidence — which cannot be considered on this motion to dismiss — suggesting that it was not. There is, however, no need to allow the litigation to proceed to resolve the dispute because if the debt was not in default at the time it was obtained by CIT, pursuant to section 1692a(6)(F) CIT is not a debt collector. And, even if it was in default, the Supreme Court has recently clarified that the FDCPA’s definition of “debt collector” does not include entities that obtain debts originated by others and then seek to collect those debts on their own account even if those debts were in default when obtained. Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718, 1722 (2017):

For while the statute surely excludes from the debt collector definition certain persons who acquire a debt before default, it doesn’t necessarily follow that the definition must include anyone who regularly collects debts acquired after default. After all . . . you have to attempt to collect debts owed another before you can ever qualify as a debt collector.

Id. at 1724.

Thus, CIT is not a debt collector and Plaintiff’s FDCPA claims against it must be dismissed.[3]

C. FDCPA Liability Arising from Statements made in Court Filings

Plaintiff’s remaining FDCPA claims concern only the statements included by McCabe in the complaint it filed on behalf of CIT in the foreclosure action as well as the statements it made in the reply it filed to Plaintiff’s answer and new matter in that action.

Both Plaintiff and McCabe agree that the two statements made in the Complaint — that CIT was not the successor in interest to the Note and that CIT violated the notice requirements of Act 6 — are potentially actionable under the FDCPA. The parties dispute, however, whether a debt collector’s technical pleading denial to allegations made by the alleged debtor in his own pleadings can constitute misstatements that are also actionable under the FDCPA.

The dispute is easily resolved by reference to the Third Circuit case Kaymark v. Bank of Am., N.A., 783 F.3d 168 (3d Cir. 2015), cert.denied sub nom., Udren Law Offices, P.C. v. Kaymark, 136 S. Ct. 794 (2016). In that case, the Plaintiff had sought relief under Sections 1692e(2)(a), (5), (10) and 1692f(1) of the FDCPA — the same provisions invoked by Plaintiff here — premised on statements made by a law firm on behalf of its client in a foreclosure complaint filed in a Pennsylvania state court. The issue directly before the Third Circuit was whether statements made in the foreclosure complaint violated the FDCPA. In a tightly reasoned opinion, the Court held that: “[A] communication cannot be uniquely exempted from the FDCPA because it is a formal pleading or, in particular, a complaint.” Id. at 177. Although the Court’s focus was on whether statements made in a foreclosure complaint were exempted from the FDCPA, the language of its holding was broader — not only can statements made in complaints give rise to FDCPA liability, statements made in any “formal pleadings” can as well. Thus, the issue presented here is whether the reply to Plaintiff’s answer and new matter filed by McCabe on CIT’s behalf in the state court foreclosure action, is a “formal pleading.” Pennsylvania Rule of Civil Procedure 1017 sets forth the pleadings allowed in a state court action which include not only a complaint but also “a reply if the answer contains new matter. . . .” Pa. R. Civ. P. 1017(2). Given this Rule, it follows inexorably that the filing is a formal pleading. Further, as it was filed as a pleading in a foreclosure proceeding involving a defaulted mortgage on the Property, it was filed in connection with an attempt to collect a debt. See Kaymark, 783 F.2d at 178-79 (foreclosure actions meet the broad definition of debt collection under the FDCPA); see also Simon v. FIA Card Servs., N.A., 732 F.3d 259, 266 (3d Cir. 2013) (quoting Grden v. Leijin Ingber & Winters PC, 643 F.3d 169 (6th Cir. 2011)) (“for a communication to be in connection with the collection of a debt, an animating purpose of the communication must be to induce payment by the debtor.”).

D. Misrepresentations Made in the Complaint and the Reply to Answer and New Matter

Turning now to the statements made in the complaint and in the reply to Plaintiff’s answer and new matter for a determination as to whether the allegations pass muster in the face of a challenge under Rule 12(b)(6). The statements Plaintiff complains of are: (1) CIT was the successor in interest to the note and mortgage and, thus, was entitled to foreclose on the note; (2) that CIT complied with the notice requirements of Act 6. Plaintiff also alleges that McCabe made an additional representation in the reply to new matter in that it denied CIT had violated the National Housing Act.

The standard for evaluating these misstatements in the context of an FDCPA claim is generally through the lens of the “least sophisticated consumer.” The focus is thus “on whether a debt collector’s statement in a communication to a debtor would deceive or mislead the least sophisticated debtor.” See Jensen v. Pressler & Pressler, 791 F.3d 413, 420 (3d Cir. 2015). Here, Plaintiff argues that because the misstatements were contained in formal pleadings which were drafted by counsel and served upon counsel, they should be analyzed from the perspective of a “competent attorney” which analysis mandates that the alleged FDCPA claims cannot proceed. He turns to district court cases[4] to find support for his position as well as to an unpublished non-precedential Third Circuit opinion[5] that declined to decide whether the “competent attorney” standard applies to communications between attorneys in litigation. See Simon v. FIA Card Servs. NA, 639 F.App’x 885, 889 (3d Cir. 2016). There is no need, however, to parse the precedential value of these cases given that the Third Circuit expressly applied the least sophisticated consumer — rather than the competent attorney standard — in Kaymark (which was brought under the same provisions of the FDCPA and involved a substantially similar fact pattern). Kaymark, 783 F.3d at 176 (on a motion to dismiss “we must view the Foreclosure Complaint through the lens of the least-sophisticated consumer and in the light most favorable to the Plaintiff). Accordingly, the misstatements alleged here shall be evaluated from that perspective. The standard incorporates a requirement that a false statement must be “material” in order to be actionable, i.e., it must be capable of influencing the decision of the least sophisticated consumer by affecting their ability to make intelligent decisions. Jensen, 791 F.3d at 421. “The standard is an objective one, meaning that the specific plaintiff need not prove that she was actually confused or misled, only that the objective least sophisticated debtor would be.” Id. at 419. The next task is, thus, to analyze whether Plaintiff’s factual allegations regarding the misrepresentations made in the foreclosure complaint are material and whether they plausibly state a FDCPA claim.

i. Plaintiff Has Stated a Claim Related to McCabe’s Representation that CIT Was the Successor in Interest to the Note

Plaintiff alleges that CIT was not the successor in interest to the note and mortgage and not entitled to foreclose. Although, there are no additional factual allegations explaining why Plaintiff has reached this conclusion, taken as true it allows the court to draw a reasonable inference that defendant is liable for an FDCPA violation. Certainly, who owns the mortgage and note is material to the Plaintiff — who would quite rightly want to be sure that he was paying the amount owed to the correct party. See, e.g. Potoczny v. Aurora Loan Servs., LLC, 33 F. Supp.3d 554, 564 (E.D. Pa. 2014) (assuming that “by suing on a debt that the foreclosure plaintiff did not own,” plaintiffs could have violated the FDCPA, but finding that Plaintiffs did, in fact, own the note and mortgage); Chulsky v. Hudson Law Offices, P.C., 777 F. Supp.2d 823, 834 (D.N.J. 2011) (concluding that “[p]laintiff has sufficiently plead a § 1692e violation” by alleging that the foreclosure plaintiff was not the true owner of the mortgage and note); Dewalder v. Platinum Fin. Servs. Corp., 443 F. Supp.2d 942, 947-48 (S.D. Ohio 2005) (“Courts have recognized claims under Section 1692(e) that are . . . based upon a debt collector’s filing of a complaint to collect a debt . . . that allegedly misrepresented the amount of the debt or the debt collector’s legal claim upon the debt.”).[6]

ii. Plaintiff Has Sufficiently Pled a Violation of the FDCPA Related to McCabe’s Act 6 Compliance Statement

Plaintiff next claim is that Defendants falsely stated that they had complied with 41 P.S. § 403(c)(3) — known as “Act 6” — which requires the mortgagee to “clearly and conspicuously state, inter alia, the right of the debtor to cure the default and exactly what performance, including what sum of money, if any, must be tendered to cure the default.” The notice provisions of Act 6, at issue in this case, are “typically raised as a defense to mortgage foreclosure proceedings.” Bennett v. Seave, 554 A.2d 886, 891 (Pa. 1989). “[T]he remedy for a defective Act 6 notice, such as the pre-foreclosure notice at issue in this case, is typically to set aside the foreclosure or deny a creditor the ability to collect an impermissible fee.” Benner v. Bank of Am., N.A., 917 F. Supp.2d 338, 357 (E.D. Pa. 2013). In this case, however, Plaintiff raises the defective notice as a basis, not for a violation of Act 6, but as a violation of the FDCPA.

Plaintiff appears to reason that McCabe misrepresented their compliance with Act 6 in the underlying foreclosure action and had they accurately represented that the foreclosure Notice did not comply with Act 6, the court would be required to set aside the foreclosure. By misrepresenting compliance with Act 6, McCabe, acting on behalf of CIT, would become entitled to foreclose on the Property when they otherwise would not be entitled to foreclose. The FDCPA prohibits debt collectors from using a misrepresentation in order to collect a debt. By falsely misrepresenting compliance, McCabe would become able to foreclose on the mortgage, which is prohibited by the FDCPA.[7] Once again, whether or not CIT was entitled to foreclose on the Property is a fact that Plaintiff would need in order to make an intelligent decision about how to proceed with payment on the defaulted debt.

E. Denial by CIT that it Violated the National Housing Act.

The final misrepresentation that Plaintiff claims McCabe made in filings in the foreclosure action concerns the National Housing Act. More specifically, the allegation is that in the reply to Plaintiff’s answer and new matter, McCabe denied that CIT had violated the National Housing Act, 12 U.S.C. § 1715z-20, and its implementing regulations, 24 C.F.R. § 206.15, which require, according to the Complaint, that a mortgagee permit a mortgagor to sell the property for at least 95% of the appraised value as determined by an appraisal obtained by the mortgagee no later than 30 days after the mortgagee became aware of the mortgagor’s death. Reading the Plaintiff’s Complaint broadly, the contention is that the denial was a misrepresentation because CIT had violated the National Housing Act regulation by representing that the appraised value of the Property was $170,000 when, in fact, it had obtained an appraisal within 30 days of becoming aware of the borrower’s death that put the value of the Property at $67,000.

McCabe’s stated reliance on CIT’s representations concerning their compliance with the National Housing Act may not be considered on a motion to dismiss. The FDCPA provides that “[a] debt collector may not be held liable . . . if the debt collector shows by a preponderance of the evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error.” 15 U.S.C. § 1692k(c). McCabe argues that it was unaware of the inconsistent appraisal and relied on facts provided by its client, CIT. Safe harbor under this provision of the FDCPA is an affirmative defense and cannot be considered in a motion to dismiss. See Sayyed v. Wolpoff & Abramson, LLP, 485 F.3d 226, 235 (4th Cir. 2007) (holding that the “district court erred in dismissing [Plaintiff’s] claim outright” when defendants argued that they relied on their client’s representation regarding the validity of a debt).

A statement that a creditor complied with the National Housing Act’s requirement to provide an accurate appraisal value of a property could mislead a consumer if the underlying appraisal incorrectly stated the value of the property. By asserting that Defendants complied with the statute might lead the least sophisticated consumer to believe that the incorrect appraisal accurately stated the appraisal value of the property. This is particularly problematic here where the appraisal stated that the Property value exceeded the current mortgage. Accordingly, Plaintiff’s claim that McCabe misrepresented its compliance with the National Housing Act survives the motion to dismiss.

F. UTPCPL Claims Against McCabe

Plaintiff also asserts a claim against McCabe and CIT for a violation of the UTPCPL. The UTPCPL provides a private right of action to “[a]ny person who purchases or leases good or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use of employment by any person of a method, act or practice declared unlawful by [73 Pa. Cons. Stat. § 201-3].” 73 Pa. Cons. Stat. § 201-9.2(a). Under section 201-3, it is unlawful to employ “unfair or deceptive acts or practices in the conduct of any trade or commerce.” Id. § 201-3.

McCabe argues that, under the Pennsylvania Supreme Court case of Beyers v. Richmond, 937 A.2d 1082 (Pa. 2007), the UTPCPL does not apply to attorneys practicing law. First, Beyers did not alter the settled law in the Third Circuit that attorneys who act as “debt collectors” are not engaged in the practice of law. See Yelin v. Swartz, 790 F. Supp.2d 331, 338 n.5 (E.D. Pa. 2011). Second, the court in Beyers distinguished attorneys engaged in debt collection activities from those practicing law. Beyers, 937 A.2d at 1089 (“The UTPCPL was interpreted to apply to debt collection as a trade or commerce.”). Third, the Third Circuit has directly addressed this issue and held that the UTPCPL applies to attorneys engaged in debt collection activities. See Kaymark, 783 F.3d at 180 n.4 (“[A]ttorneys engaged in debt collection — considered an “act of trade or commerce” within the definition of the UTPCPL — are not . . . immun[e] [] from liability.”). McCabe encourages a distinction between debt collection work and litigation work — the latter which it would not have covered by the UTPCPL. This distinction is untenable after Kaymark. The Third Circuit noted that if the alleged misconduct in the complaint concerns the adequacy of an attorney’s legal representation, then it is not actionable under the UTCPL. Id. But, if the matters complained of concern that attorney’s debt collection efforts, those efforts are an “act of trade or commerce” within the definition of UTPCPL and are not exempt from its coverage. Here, Plaintiff’s complaint is not about McCabe’s legal representation, rather, it concerns its activities as a debt collector, which activities are not immunized from UTCPL liability. Therefore, Plaintiff’s claim under UTPCPL survives McCabe’s motion to dismiss.

An appropriate order follows.

[1] CIT argues as a threshold matter that collateral estoppel and the Rooker-Feldman doctrines bar Plaintiff’s action because the identical issues were raised in Plaintiff’s motion for summary judgment on his New Matter in the underlying foreclosure action. Both doctrines apply only when an underlying litigation has finally resolved the disputed issues. See Great W. Mining & Mineral Co., 615 F.3d at 166(requiring entry of judgment in state court to apply Rooker-Feldman). The finality of an award largely depends on whether it is appealable. See Lean v. Atl. City Showboat Inc., 2007 WL 1545288, at *2 (E.D. Pa. May 25, 2007). In this case, the state court denied Plaintiff’s Motion for Summary Judgment in the foreclosure proceedings. The denial of a motion for summary judgment is interlocutory and generally not appealable. See Aubrey v. Precision Airmotive LLC, 7 A.3d 256, 261 (Pa.Super. 2010)(citing Pa. Tpk. Comm’n v. Atl. Richfield Co., 394 A.2d 491 (Pa. 1978); Pa. R.A.P. 311, 341). Therefore, neither doctrine applies to bar Plaintiff’s claims.

[2] Plaintiff’s claim that Defendants “threatened to take an action that could not legally be taken, in violation of FDCPA, 15 U.S.C. § 1692e(5),” is, on its face, not viable. The only allegations involving a threat to take legal action occurred in the Notice. However, as discussed below, misrepresentations contained in the Notice fall outside the statute of limitations. The only claims which survive concern misrepresentations made by the Defendants in the foreclosure Complaint. Those misrepresentations do not “threaten to take that action, but actually took it by filing the complaint.” Delawder v. Platinum Fin. Servs. Corp., 443 F. Supp.2d 942, 948 (S.D. Ohio 2005). Therefore, Plaintiff’s claim under subsection 1692e(5) is not viable.

Similarly, Plaintiff’s claim that Defendants attempted to “collect amounts that were not expressly authorized by any agreement creating the debt” under Section 1692f(1) is also not viable. The focus of a 1692f(1) violation is whether the amount sought is authorized. See Allen ex rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364, 369 (3d Cir. 2011). Here, the complaint seeks only “the sum of $162,561.82, together with interest accruing thereafter, other costs and charges collectible under the Mortgage and applicable law. . . .” In other words, it seeks only to collect on amounts allowable under the Mortgage and applicable law. Accordingly, Plaintiff does not state a claim for a violation of Section 16921f(1).

[3] Plaintiff alleges that CIT also violated the UTPCPL and FCEUA. The UTPCPL prohibits “unfair or deceptive acts or practices in the conduct of any trade or commerce.” 73 Pa. Stat. Ann. § 201-3. However, in order to assert a violation of the UTPCPL based on a false representation, Plaintiff must allege justifiable reliance on the misrepresentation. See Hunt v. U.S. Tobacco Co., 538 F.2d 217, 221 (3d Cir. 2008). Plaintiff argues that he demonstrated justifiable reliance by hiring an attorney to defend the foreclosure action. However, hiring a lawyer to file an answer denying Defendants’ alleged misrepresentations and also to assert a new matter demonstrates the opposite of reliance. It demonstrates that Plaintiff understood that the representations were false and chose, instead, to fight them, particularly. See Kimmel v. Phelan Hallinan & Schmieg, PC, 847 F. Supp.2d 753, 771 (E.D. Pa. 2012) (describing Plaintiff’s conduct in hiring an attorney as “the opposite of reliance; it’s defiance. After being (falsely) told they were liable on the debt, they hired lawyers and fought [] the lawsuits.”). Therefore, Plaintiff’s UTPCPL claim against CIT must be dismissed.

Plaintiff’s FCEUA theory is that CIT violated the FCEUA because any violation of the FDCPA or UTPCPL constitutes an unfair or deceptive practice under the FCEUA. See 73 Pa. Stat. Ann § 2270.4(a) (violation of the FDCPA is a per se violation of the FCEUA); Salvati v. Deutsche Bank Nat. Tr. Co., 575 F. App’x 49, 57 (3d Cir. 2014) (“[Plaintiff] has no viable remedy under the UTPCPL, and thus his FCEUA claim . . . must also fail.”). However, since Plaintiff’s FDCPA and UTPCPL claims must be dismissed, his FCEUA claim, which depends on the success of either claim, is also not viable and must be dismissed.

[4] Fratz v. Goldman & Warshaw, P.C., 2012 WL 4931469, at *3 (E.D. Pa. Oct. 16, 2012)see also Marshall v. Portfolio Recovery Assocs., Inc., 646 F. Supp.2d 770 (E.D. Pa. 2009) (applying the “competent attorney” standard); Wright v. Phelan, Hallinan & Schmieg, LLP, 2010 WL 786536 at *6 (E.D. Pa. Mar. 8, 2010) (discussing the “competent attorney” standard, but ultimately finding no FDCPA violation occurred).

[5] Internal Operating Procedures of the United States Court of Appeals for the Third Circuit 5.7.

[6] But see, e.g., Lake v. MTC Fin., Inc., 2017 WL 3129624, at *7 (W.D. Wash. July 24, 2017) (declining to accept “conclusory allegations and legal conclusions” that foreclosure plaintiff “made a false representation that it had rights to foreclose . . . as true”); White v. BAC Home Loans Servicing, L.P.,2011 WL 1483901, at *7 (E.D. Mo. Apr. 19, 2011) (holding that “plaintiff’s allegations regarding [Defendant’s] interest in the subject property . . . are unsupported legal conclusions or naked assertion devoid of factual enhancement [and] not properly accepted as true when considering these motions to dismiss.”); Jung v. Bank of Am., N.A., 016 WL 5929273, at *9 (M.D. Pa. Aug. 2, 2016) (dismissing FDCPA claims because Plaintiff merely offered a “formulaic recitation of acts prohibited by the FDCPA.”).

[7] McCabe argues that, even though the Notice stated that Plaintiff had no right to cure, the Notice complied with the Act 6 requirement to state Plaintiff’s right to cure the default because there is no right to cure a reverse mortgage upon the death of the borrower. See 24 C.F.R. 206.125 (stating requirements under HUD regulations). Whether a reverse mortgage may be cured, however, is a matter of contractual interpretation, and not statute or regulation, see Nationstar Mortg., LLC v. Williams, 2016 WL 5887356, at *4 (Pa. Super. Ct. Sept. 12, 2016) (holding that “[a] reverse mortgage is a contract” which requires the court to “interpret[] the meaning of [the] contract . . .”). The Mortgage is not attached to the Complaint nor included as an exhibit to McCabe’s Motion to Dismiss. Therefore, it is not properly considered at this stage of the litigation.

 

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Hurricanes could bring another disaster: Foreclosures

Hurricanes could bring another disaster: Foreclosures

CNN-

As life slowly returns to normal in hurricane-ravaged parts of Texas, Florida and Puerto Rico, housing experts and consumer advocates worry another crisis is on the horizon: Foreclosures.

Already, legal aid groups are working with people who are struggling to make mortgage payments on homes made uninhabitable by the storms, while paying rent somewhere else.

Although most mortgage lenders are offering grace periods for homeowners in disaster zones, the real trouble begins when those grace periods run out.

[CNN]

image: NBC NEWS

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TFH 11/12 | Veterans Day Special: What Every Homeowner Needs To Know To Emotionally Survive Foreclosure

TFH 11/12 | Veterans Day Special: What Every Homeowner Needs To Know To Emotionally Survive Foreclosure

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 – November 12

 ———————
Veterans Day Special: What Every Homeowner Needs To Know To Emotionally Survive Foreclosure

 

 

 

In discussing foreclosures and the numerical proliferation of pretender lenders and robo-signers, for example, we too often tend to forget the individuals and family members who are the victims of mortgage abuse behind the aggregate numbers, who are the veterans too often also of courtroom abuse, and their emotional ordeal and personal needs beyond financial losses alone.

It therefore seems fitting this Veterans Day Weekend to go behind the statistics and to examine some of the terrible harm inflicted on homeowners, the veterans as it were of foreclosures, such as divorce, suicide, crime, drug and alcohol abuse, child endangerment, homelessness, physical illness, and mental depression.

We will also consider whether such disturbing byproducts of the present foreclosure system are worth it to society when other more sensible and humane ways of handling mortgage defaults exist.

And finally we will suggest realistic ways of coping with, as well as avoiding, some of the worse aspects of such threats to personal health and safety and to the social order.

Your co-host, John Waihee, former Hawaii Governor, and I are therefore pleased to rebroadcast this Veterans Day Weekend, especially for our many new listeners, our May 17, 2015 Radio Program “What Every Homeowner Needs To Know To Emotionally Survive Foreclosure”.

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

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Host: Gary Dubin Co-Host: John Waihee

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CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII (2:00 p.m. instead of 3:00 p.m. due to the start of the Raiders football game being aired this Sunday starting in our regular time slot.)
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ON KHVH-AM
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The Foreclosure Hour 12

 

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Justice Department Sues Northwest Trustee Services, Inc. in Bellevue, Washington, for Illegally Foreclosing on Homes of at Least 28 Servicemembers

Justice Department Sues Northwest Trustee Services, Inc. in Bellevue, Washington, for Illegally Foreclosing on Homes of at Least 28 Servicemembers

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Thursday, November 9, 2017

Justice Department Sues Northwest Trustee Services, Inc. in Bellevue, Washington, for Illegally Foreclosing on Homes of at Least 28 Servicemembers

The U.S. Department of Justice today filed a lawsuit in U.S. District Court for the Western District of Washington, alleging that Northwest Trustee Services, Inc. (Northwest) violated the Servicemembers Civil Relief Act (SCRA).  The complaint alleges that since 2010, Northwest completed foreclosures on at least 28 homes owned by servicemembers without obtaining the required court orders.

The SCRA protects the rights of servicemembers on active duty by suspending or modifying certain civil obligations.  The law prohibits foreclosing on the home of a servicemember during active military service and one year thereafter without a court order if the mortgage originated prior to the servicemember’s period of military service.

The department launched an investigation into Northwest’s practices after United States Marine veteran Jacob McGreevey of Vancouver, Washington, submitted a complaint to the department’s Servicemembers and Veterans Initiative in May 2016.  Northwest had foreclosed on McGreevey’s home in August 2010, less than two months after he was released from active duty in Operation Iraqi Freedom.  McGreevey sued both PHH Mortgage (his mortgage servicer) and Northwest in 2016, but a U.S. District Court Judge accepted PHH and Northwest’s argument that McGreevy had waited too long to file his case, and dismissed the case on that basis.  The department’s investigation revealed that, in addition to McGreevey, NWTS had foreclosed on other homes of SCRA-protected servicemembers in violation of the SCRA since 2010.

“As we reflect this Veterans Day on the great debt we owe to those who have fought so hard for our freedom, we also reaffirm our commitment to protecting the rights of those who serve,” said Acting Assistant Attorney General John M. Gore of the Justice Department’s Civil Rights Division.  “Our men and women in uniform make immense personal sacrifices to keep our country safe.  Losing their home to an unlawful foreclosure should not be one of them.”

“The loss of a home is a devastating blow for anyone – but far worse for active duty service members often called to war zones far from Western Washington,” said U.S. Attorney Annette L. Hayes. “Our investigation revealed that Northwest Trustee Services repeatedly failed to comply with laws that are meant to ensure our service members do not have to fight a two front war – one on behalf of all of us, and the other against illegal foreclosures.  My office will continue to work closely with our colleagues in the Civil Rights Division in Washington, D.C. to protect Western Washington service members from this kind of misconduct.”

In addition to monetary damages for affected servicemembers, the SCRA provides for civil monetary penalties of up to $60,788 for the first offense and $121,577 for each subsequent offense.  The department will also seek injunctive relief to prevent future foreclosures that violate the SCRA.

Northwest Trustee Services is based in Bellevue, Washington, and describes itself as a full-service trustee company providing foreclosure services to mortgage lenders in the Western United States.  The complaint is an allegation of unlawful conduct.  The allegations must still be proven in federal court.

This case is being jointly handled by the department’s Civil Rights Division and the U.S. Attorney’s Office for the Western District of Washington.

The department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section, often in partnership with local United States Attorney’s Offices.  Since 2011, the department has obtained over $450 million in monetary relief for servicemembers through its enforcement of the SCRA.  The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments.  For more information about the department’s SCRA enforcement, please visit www.servicemembers.gov.

Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office.  Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.

Topic(s):
Servicemembers Initiative
Component(s):
Press Release Number:
17-1273
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Judge: ‘I’ve never seen such horrible treatment’ of a homeowner

Judge: ‘I’ve never seen such horrible treatment’ of a homeowner

TBO-

As head of civil processing for the Pinellas County Sheriff’s Office, Sgt. Tim Grundmann supervised employees who serve subpoenas, eviction notices and notices of foreclosure.

Thus it was embarrassing to Grundmann when a clerk told him:

“You’re being sued. You’re being foreclosed on.”

That was in 2013, when the Tampa Bay area was still reeling from the housing crash and 70,000 homeowners in Pinellas alone had been hit with foreclosure notices. The overwhelming majority of those had not been paying their mortgages and were living in their houses rent free.

[TBO]

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