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IN RE BERTRAM, Court of Appeals, 11th Circuit |  the Rooker-Feldman doctrine does not bar the Bertrams’ claims challenging the foreclosure sale, which were not actually raised or inextricably intertwined with the issues resolved in the state court’s final judgment.

IN RE BERTRAM, Court of Appeals, 11th Circuit | the Rooker-Feldman doctrine does not bar the Bertrams’ claims challenging the foreclosure sale, which were not actually raised or inextricably intertwined with the issues resolved in the state court’s final judgment.

 

In Re: BERESFORD BRYAN BERTRAM, THERESA BERTRAM, Debtors.
BERESFORD BRYAN BERTRAM, THERESA BERTRAM, Plaintiffs-Appellants,
v.
HSBC MORTGAGE SERVICES, INC., Defendant-Appellee.

No. 17-11774, Non-Argument Calendar.
United States Court of Appeals, Eleventh Circuit.
November 5, 2018.
Daniel C. Shatz, for Defendant-Appellee.

Brendan S. Everman, for Defendant-Appellee.

Brian C. Frontino, for Defendant-Appellee.

Appeal from the United States District Court for the Southern District of Florida, D.C. Docket Nos. 0:16-cv-61582-CMA; 16-bkc-01154-RBR.

Before MARCUS, ROSENBAUM and JILL PRYOR, Circuit Judges.

DO NOT PUBLISH

PER CURIAM.

This appeal primarily presents an issue about the scope of the Rooker-Feldmandoctrine, which bars a plaintiff from challenging in federal court the validity of a state court judgment. Defendant HSBC Mortgage Services, Inc., (“HMSI”) filed a foreclosure action in Broward County Circuit Court related to real property owned by plaintiffs Beresford and Theresa Bertram. After the state court entered a final judgment in favor of HMSI, Beresford petitioned for Chapter 7 bankruptcy. In an adversary proceeding in bankruptcy court, the Bertrams sued HMSI, claiming that the foreclosure judgment was invalid because the debt they owed HMSI was unsecured and, alternatively, that even if HMSI had properly foreclosed on the mortgage, the subsequent sale of their property was improper.

HMSI moved to dismiss the Bertrams’ complaint, arguing that the bankruptcy court lacked subject matter jurisdiction because the Rooker-Feldman doctrine barred their claims. The bankruptcy court agreed with HMSI and dismissed the complaint. The district court affirmed the bankruptcy court’s judgment.

We agree that the Rooker-Feldman doctrine bars the Bertrams’ claims challenging the validity of the state court’s foreclosure judgment. But the Rooker-Feldmandoctrine does not bar the Bertrams’ claims challenging the foreclosure sale, which were not actually raised or inextricably intertwined with the issues resolved in the state court’s final judgment. We thus affirm in part and reverse in part.

I. FACTUAL BACKGROUND

The Bertrams owned property in Broward County, Florida, secured by a mortgage. When the Bertrams defaulted on the mortgage, HMSI filed an action in state court seeking to foreclose on the mortgage. The trial court granted summary judgment to HMSI and entered a final judgment in its favor foreclosing the mortgage (the “final foreclosure judgment”). The Bertrams did not appeal the final foreclosure judgment.

Instead, the Bertrams filed in the trial court a motion to aside the final foreclosure judgment, which was denied. After their motion was denied, the Bertrams filed an interlocutory appeal with Florida’s Fourth District Court of Appeal. While the appeal was pending, a foreclosure sale of the property moved forward. The sale was scheduled, and the Clerk of Court for Broward County purported to sell the property. A few days after the sale, the Bertrams filed in the trial court an objection to the foreclosure sale. In their objection, the Bertrams requested that the trial court invalidate the final foreclosure judgment it had previously entered in favor of HMSI. They also alleged that HMSI failed to follow proper procedures in conducting the foreclosure sale. After a hearing, the trial court overruled the Bertrams’ objection and directed the Clerk to issue a certificate of title and writ of possession.

Shortly after the sale, the Fourth District Court of Appeal affirmed the trial court’s earlier order denying the Bertrams’ motion to set aside the final judgment. The Bertrams did not appeal the decision to the Florida Supreme Court. Instead, they filed another interlocutory appeal with the Fourth District Court of Appeal— this time seeking review of the trial court’s order overruling their objection to the foreclosure sale. The Fourth District Court of Appeal affirmed the trial court. Under the rules of Florida’s appellate courts, the mandate from the Fourth District Court of Appeal would issue 15 days after the decision. See Fla. R. App. P. 9.340(a). Because the decision was released on October 22, 2015, the mandate was set to issue on November 6, 2015. But, on November 4, Beresford filed a Chapter 7 bankruptcy petition. The Florida appellate court then stayed issuance of the mandate pending resolution of Beresford’s bankruptcy.

After the bankruptcy court entered an order granting Beresford a discharge, the Bertrams commenced a pro se adversary proceeding against HMSI. In the adversary proceeding, the Bertrams brought claims challenging the validity of the final foreclosure judgment and the subsequent sale of the property. The Bertrams alleged that the sale of the property was invalid because, among other reasons, HMSI allegedly had transferred its interest in the property to another entity after the final foreclosure judgment was entered but before the sale was completed.

HMSI moved to dismiss the Bertrams’ complaint, claiming that the Rooker-Feldman doctrine barred the action. HMSI attached to its motion a certificate of service indicating that it had “filed” the motion “via CM/ECF.” Doc. 11-2 at 341.[1]The certificate included a “service list” for the motion that listed the Bertrams’ address as well as an email address but did not identify how HMSI had served the Bertrams. Id. The Bertrams admit that they received a copy of the motion via email.

The bankruptcy court then noticed a hearing on the motion to dismiss and directed HMSI to serve a copy of the notice on the Bertrams. HMSI filed a certificate of service indicating that it had served the Bertrams with a copy of the notice setting the hearing via Federal Express and email.

Beresford appeared at the hearing on the motion to dismiss but claimed that he had received no notice of the hearing and only happened to learn of it when he asked the clerk’s office about the status of HMSI’s motion to dismiss. To give the Bertrams time to prepare, the bankruptcy court rescheduled the hearing on the motion to dismiss. The Bertrams subsequently filed their opposition to the motion to dismiss.

The Bertrams then filed a motion to strike the certificate of service attached to HMSI’s motion to dismiss as well as the certificate showing that HMSI had notified them of the original hearing on the motion to dismiss. They asserted that the certificate of service attached to the motion to dismiss was insufficient because it failed to identify how HMSI had served them. The Bertrams also challenged the accuracy of the certificate of service for the notice of hearing. And they contended that their address on both certificates of service was incorrect because the wrong zip code was listed. Because HMSI had failed to effectuate proper service, the Bertrams asked the bankruptcy court not to consider HMSI’s motion to dismiss.

The bankruptcy court held a hearing on the motions to strike and to dismiss. The court denied the motion to strike because the Bertrams admitted they received a copy of the motion to dismiss via email and had adequate time to prepare for the hearing. The court granted the motion to dismiss, concluding that the Bertrams’ claims were, in effect, challenging the validity of a state court judgment and barred by the Rooker-Feldman doctrine.

The Bertrams appealed the bankruptcy court’s order denying the motion to strike and granting the motion to dismiss to the district court. The district court affirmed the bankruptcy court. This is the Bertrams’ appeal from the district court’s decision.

II. STANDARD OF REVIEW

When we review an order of a district court entered in its role as an appellate court reviewing a bankruptcy court’s decision, we “independently examine[] the factual and legal determinations of the bankruptcy court, applying the same standards of review as the district court.” In re FFS Data, Inc., 776 F.3d 1299, 1303 (11th Cir. 2015). We review de novo determinations of law whether from the bankruptcy court or district court, and we review a bankruptcy court’s factual findings under a clearly erroneous standard. See In re Bilzerian, 100 F.3d 886, 889 (11th Cir. 1996). We further review de novo a bankruptcy court’s application of the Rooker-Feldmandoctrine. See Lozman v. City of Riviera Beach, 713 F.3d 1066, 1069 (11th Cir. 2013). And we review for abuse of discretion the bankruptcy court’s denial of a motion to strike. See Telfair v. First Union Mortg. Corp., 216 F.3d 1333, 1337 (11th Cir. 2000).

III. DISCUSSION

The Bertrams contend that the bankruptcy court erred in denying their motion to strike and granting HMSI’s motion to dismiss. We address these arguments in turn.

A. The Motion to Strike

The Bertrams argue that the bankruptcy court erred when it denied their motion to strike. They contend that they were never properly served with a copy of the motion to dismiss or given notice of the first hearing and that they were denied due process.

Before we can address this issue, we must consider whether we have jurisdiction to review it. HMSI argues that we lack jurisdiction to review the bankruptcy court’s order denying the motion to strike because it was a non-final order. “A court of appeals has jurisdiction over only final judgments and orders arising from a bankruptcy proceeding, whereas the district court may review interlocutory judgments and orders as well.” In re Donovan, 532 F.3d 1134, 1136 (11th Cir. 2008)see 28 U.S.C. § 158(a), (d). A bankruptcy court order is final if it “completely resolve[s] all of the issues pertaining to a discrete claim.” Donovan,532 F.3d at 1137 (internal quotation marks omitted). HMSI reasons that because the bankruptcy court’s order denying the motion to strike was not a final order, we may not review it.

Even if the bankruptcy court’s order denying the motion to strike was not final on its own, we conclude that we have jurisdiction because the bankruptcy court entered a final order when it granted HMSI’s motion to dismiss, which completely resolved all of the issues pertaining to the Bertrams’ claims in the adversary proceeding. We have recognized, outside the bankruptcy context, that “review of the final judgment opens for consideration the prior interlocutory orders.” Barfield v. Brierton, 883 F.2d 923, 931 (11th Cir. 1989). Put differently, “the doctrine of cumulative finality allows an appeal from a non-final order to be `saved’ by subsequent events that establish finality.” In re Rimstat, Ltd., 212 F.3d 1039, 1044 (7th Cir. 2000). And we have applied the doctrine of cumulative finality in the bankruptcy context. See In re Valone, 784 F.3d 1398, 1401 (11th Cir. 2015)(concluding that we had jurisdiction to review bankruptcy court order disallowing an exemption, even though the order was not final, because the bankruptcy court had subsequently confirmed the Chapter 13 plan and thus entered a final order). Applying the doctrine of cumulative finality, we conclude that we have jurisdiction to review the order denying the motion to strike.

Turning now to the merits of the Bertrams’ arguments regarding the motion to strike, we cannot say that the bankruptcy court abused its discretion. We assume for purposes of this appeal that the certificate of service attached to HMSI’s motion to dismiss did not strictly comply with the bankruptcy court’s local rules because it failed to identify how HMSI had served the Bertrams. See Bankr. S.D. Fla. L.R. 2002-1(F), 9013-3. We also assume for purposes of this appeal that HMSI failed to properly serve the Bertrams with the notice about the first hearing. See Bankr. S.D. Fla. L.R. 9073-1(B). We acknowledge that the bankruptcy court had discretion to impose sanctions for HMSI’s failure to comply with the local rules. See Bankr. S.D. Fla. L.R. 1001-1(D). But we disagree that the court abused its discretion in declining to impose sanctions here, given that the Bertrams actually received a copy of the motion to dismiss from HMSI via email and had sufficient time to prepare for the hearing.

The Bertrams nevertheless contend that the lack of proper service denied them due process. Again, we disagree. Procedural due process guarantees a person notice and an opportunity to be heard “at a meaningful time and in a meaningful manner.” Catron v. City of St. Petersburg, 658 F.3d 1260, 1266 (11th Cir. 2011). We see no due process violation here. Even if HMSI’s certificates of service were technically deficient, the Bertrams admit that they actually received a copy of the motion to dismiss, meaning they received actual notice. Although the Bertrams contend that they failed to receive adequate notice of the first hearing on the motion to dismiss, they were not prejudiced because the bankruptcy court rescheduled the hearing. At the subsequent hearing, the Bertrams confirmed they had had adequate time to prepare and were able to present oral argument. The bankruptcy court did not violate the Bertrams’ due process rights given that they actually received a copy of HMSI’s motion to dismiss when it was filed, had the opportunity to submit a written opposition to the motion, and were heard on the merits.

B. The Motion to Dismiss

We now turn to the bankruptcy court’s decision to dismiss the Bertrams’ claims based on the Rooker-Feldman doctrine. The Rooker-Feldman doctrine takes its name from two Supreme Court cases, Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923), and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983). These decisions collectively hold that a federal district court may not review and reverse a state court civil judgment, because only the United States Supreme Court has appellate jurisdiction over judgments of state courts in civil cases. See 28 U.S.C. § 1257; Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 292 (2005).

The Rooker-Feldman bars litigation in federal court of claims that were actually raised in the state court and those “inextricably intertwined” with the state court judgment. Casale v. Tillman, 558 F.3d 1258, 1260 (11th Cir. 2009). “A claim is inextricably intertwined if it would effectively nullify the state court judgment, or it succeeds only to the extent that the state court wrongly decided the issues.” Id.(internal quotation marks and citation omitted). The doctrine does not apply, however, where “the plaintiff had no reasonable opportunity to raise his federal claim in state proceedings.” Powell v. Powell, 80 F.3d 464, 467 (11th Cir. 1996)(internal quotation marks omitted). We have explained that “[a] claim about conduct occurring after a state court decision cannot be either the same claim or one `inextricably intertwined’ with that state court decision, and thus cannot be barred under Rooker-Feldman.” Target Media Partners v. Specialty Mktg. Corp.,881 F.3d 1279, 1286 (11th Cir. 2018).

The Supreme Court has cautioned that the scope of the Rooker-Feldman doctrine is narrow and “confined to cases of the kind from which the doctrine acquired its name: cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments.” Exxon Mobil Corp.,544 U.S. at 284. The doctrine is inapplicable if the federal action was commenced before the state proceedings ended. Nicholson v. Shafe, 558 F.3d 1266, 1274-75 (11th Cir. 2009). State proceedings end, for purposes of the Rooker-Feldmandoctrine when: (1) “the highest state court in which review is available has affirmed the judgment below and nothing is left to be resolved,” (2) “the state action has reached a point where neither party seeks further action,” or (3) “the state court proceedings have finally resolved all the federal questions in the litigation, but state law or purely factual questions (whether great or small) remain to be litigated.” Id. at 1275 (internal quotation marks omitted). As to the second scenario, a state proceeding ends when the losing party allows the time for appeal to expire. Id. Conversely, state proceedings remain pending when “the losing party . . . does not allow the time for appeal to expire (but instead, files an appeal).” Id. It follows that state proceedings have not ended if an appeal from the state court judgment remains pending at the time that the plaintiff files the federal case. In this circumstance, if the state appellate court affirms the lower court’s judgment afterthe federal case is filed, the federal court retains jurisdiction. Id. at 1279 n.13.

This case does not fit completely the Rooker-Feldman mold. We agree with the bankruptcy court and district court that the Rooker-Feldman doctrine barred the Bertrams’ claims that sought to invalidate the state court’s final foreclosure judgment. The state proceedings related to the final foreclosure judgment ended for purposes of the Rooker-Feldman doctrine when the state trial court entered the judgment and the Bertrams did not appeal, which was years before the Bertrams filed their adversary proceeding in the bankruptcy court. See id. at 1275. Because the state court proceedings as to the final foreclosure judgment had ended when the adversary proceeding complaint was filed, the Bertrams could not sue in federal court to invalidate that judgment. See id. at 1274-75.

The Rooker-Feldman doctrine does not bar all of the Bertrams’ claims, however. A close reading of their complaint shows that some of the Bertrams’ claims arose out of HMSI’s conduct with regard to the foreclosure sale. Because these claims are about conduct that occurred after the final foreclosure judgment was entered and the time for appeal expired, they cannot be barred under the Rooker-Feldmandoctrine. See Target Media Partners, 881 F.3d at 1286.

We acknowledge that the Bertrams also litigated issues related to the foreclosure sale in state court when they filed an objection to the foreclosure sale. At the time that the Bertrams brought the adversary proceeding, the state court had overruled their objection and the Fourth District Court of Appeal had affirmed the trial court. But the Fourth District Court of Appeal had not yet issued the mandate. Because the mandate had not issued, the state action had not yet reached a point where neither party sought further action, meaning the state court litigation challenging the foreclosure sale had not yet ended. See Nicholson, 558 F.3d at 1275. It is true that this litigation was pending when the Fourth District Court of Appeal issued its mandate, bringing an end to the state court litigation challenging the foreclosure sale. The Rooker-Feldman doctrine does not bar the Bertrams’ claims challenging the foreclosure sale because the doctrine “cannot spring into action and vanquish properly invoked subject matter jurisdiction in federal court when state proceedings subsequently end.” Id. at 1275 n.13.

The Bertrams nonetheless urge us to conclude that the bankruptcy court erred in applying the Rooker-Feldman doctrine because, they contend, the debt they owed to HMSI was discharged in Beresford’s Chapter 7 case. This argument rests on the premise that the debt the Bertrams owed to HMSI was unsecured. The problem is that in raising this argument the Bertrams seek to nullify the state court’s final foreclosure judgment, which necessarily involved a determination that HMSI had a valid mortgage on the property. The Rooker-Feldman doctrine bars this attempt to relitigate issues that were decided by the state court. See Casale,558 F.3d at 1260. Because we must accept that the Bertrams’ debt to HMSI was secured by a mortgage interest, we reject the Bertrams’ argument that the bankruptcy court’s Chapter 7 discharge extinguished HMSI’s right to foreclose on the mortgage debt. See Johnson v. Home State Bank, 501 U.S. 78, 82-83 (1991)(recognizing that a Chapter 7 discharge extinguishes only the debtor’s personal liability on the debt, not the right to foreclose on the mortgage).

The Bertrams also argue that the bankruptcy court erred in relying on the Rooker-Feldman doctrine because a bankruptcy court is authorized to abstain from hearing a case only when abstention is authorized under 28 U.S.C. § 1334(c). This provision states that “nothing in this section prevents a district court in the interest of justice, or in the interest of comity with State courts or respect for State law, from abstaining from hearing a particular proceeding under title 11 or arising in or related to a case under title 11.” 28 U.S.C. § 1334(c)(1). We reject the Bertrams’ interpretation because nothing in this provision bars a bankruptcy court from abstaining from hearing a particular proceeding under the Rooker-Feldmandoctrine.[2]

We thus conclude that the Rooker-Feldman doctrine bars some but not all of the Bertrams’ claims. We emphasize that our opinion today addresses only the applicability of the Rooker-Feldman doctrine, not whether HMSI has other defenses to the Bertrams’ claims, and we offer no opinion about whether the Bertrams’ claims will ultimately succeed on the merits.

IV. CONCLUSION

We hold that the Rooker-Feldman doctrine barred only the Bertrams’ claims related to whether HMSI could foreclose on the mortgage, not their claims related to HMSI’s conduct when the property later was sold. We thus affirm the district court’s order affirming the bankruptcy court’s dismissal of the Bertrams’ claims challenging the final foreclosure judgment. But we reverse the district court’s order affirming the bankruptcy court’s dismissal of the Bertrams’ claims related to the foreclosure sale. We remand the case to the district court for further proceedings consistent with this opinion.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

[1] All citations in the form “Doc. #” refer to the district court docket entries.

[2] The Bertrams raise a litany of other arguments about why the bankruptcy court erred in granting the motion to dismiss. All of these arguments lack merit. For example, they argue that HMSI’s motion to dismiss constituted a non-core matter, meaning the bankruptcy court had to issue proposed findings of fact and conclusions on law on the motion to dismiss. Because the bankruptcy court instead issued an order granting the motion to dismiss, the Bertrams argue that we must vacate. But the Bertrams conceded in the bankruptcy court that their adversary complaint raised a core proceeding. It was thus appropriate for the bankruptcy court to follow the procedures that apply to core proceedings in deciding the motion to dismiss.

 

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‘Zombie foreclosures’ just won’t die

‘Zombie foreclosures’ just won’t die

Fox 5-

Zombie foreclosures – abandoned houses that are hung up somewhere in the foreclosure process – seem to be the problem that just won’t die. And even though the problem is getting better nationally, Georgia is still haunted with way too many of these “haunted houses.”

 Here to help you protect yourself is real estate expert John Adams.

Currently, close to 1.5 million single-family homes and condos are vacant, representing 1.52% of all homes nationwide. That’s down from 1.58% at this time in 2017. This is according to ATTOM DATA SOLUTIONS. But just because the problem is getting better nationally doesn’t mean it is going away anytime soon.  There are problem pockets across the U.S., and Georgia is among them.

[FOX 5]

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TFH 11/11 | Ten Common Misstates That Many Homeowners and Even Many of Their Attorneys Continue To Make in Defending Foreclosures

TFH 11/11 | Ten Common Misstates That Many Homeowners and Even Many of Their Attorneys Continue To Make in Defending Foreclosures

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 11, 2018

Ten Common Misstates That Many Homeowners and Even Many of Their Attorneys Continue To Make in Defending Foreclosures

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 ———————

 

On past shows John and I have identified many of the mistakes that homeowners and their counsel have been committing while defending against state and federal foreclosures, often resulting in eviction.

Today we highlight and summarize ten such major common mistakes that are still dominant today which, properly understood, could save your home, including the following:

1. Foreclosure litigation is not a static but a dynamic sport, success in which intellectual battle requires an ever changing awareness and constant understanding that nothing is preordained.

2. The outcome of your case will depend not necessarily upon what the law is, but who your judge is, including your adjusting to his or her past decisions and institutional pay grade.

3. Success in foreclosure litigation depends upon basing your arguments in court not upon generalizations but upon your specific facts, and primarily upon the controlling judicial decisions in your jurisdiction and not elsewhere except as used as persuasive authority.

4. Homeowners in foreclosure need to avoid most Internet foreclosure defense advice, any use of generalized foreclosure defense forms, reliance alone on forensic audits, paying for assistance in preparing loan modification applications, and all deceptive mortgage rescue scams.

5. Foreclosure defendants need to avoid being overcome by a dead beat psychosis, blaming yourself for the foreclosure, and causing divorce, depression, illness, drug addiction, and even suicide, when in fact most foreclosures are usually not entirely or even partially a homeowner’s fault.

6. You should marshal your financial resources to delay or to defeat eviction whatever your goal may be, filing a Chapter 7 bankruptcy petition only as a last resort and only if evicted unless needing earlier to discharge other debts.

7. Do not make a fool out of yourself in court by arguing unavailing defenses, such as the Justice Mahoney defense, the copyrighted name defense, the Hawaiian Kingdom or Spanish Land Grant defense, the Postal Court defense, the Admiralty Law defense, and/or the DC defense.

8. Do not consider a loan modification as a gift, but as your federal right and your lender having a duty to grant you one, and specifically document both the contents and the timing of your loan modification application with witnesses’ signatures properly notarized, and when turned down internally appeal and if necessary thereafter sue.

9. Do not file lengthy memoranda of law in court. Winning based on “the weight of the evidence” does not mean how much your papers weigh. Get right to the point. Many judges typically only will read the first few pages and eye scan the rest. Avoid defending with empty labels like “fraud” and “predatory lending” and “robo-signer,” which unless fully explained and documented mean nothing by themselves and will turn away your judge.

10. Do not agree to stipulate or accept any fact submitted by your lender. Deny every material fact. Make your lender prove with evidence based on personal knowledge every material burden of its required proof, including its having sent you an accurate notice of default and to the correct address, the contents your loan general ledger, and its standing to bring the foreclosure action against you.

Listening to today’s show hopefully will save many more homes from foreclosure. One might be yours.

Please remember that most of the Nation (except Hawai’i which remains on standard time) went back to standard time last week.

As a result, The Foreclosure Hour is now heard live one hour earlier on most of the Mainland on iHeart Radio on the Internet, which live show however repeats itself streaming the following hour on iHeart Radio for those who missed our live broadcast.

Gary Dubin

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Host: Gary Dubin Co-Host: John Waihee

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CALL IN AT (808) 521-8383

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 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

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He never missed a payment, but the bank still foreclosed on his home anyway

He never missed a payment, but the bank still foreclosed on his home anyway

WLTX-

Marcus Green knows the stress and anger of a customer-service nightmare.

The repetitive phone calls to a string of service agents, each telling him something different.

Letters demanding a resolution that never comes.

He also knows what it’s like when what’s at stake is his most important possession: his home.

“They said, ‘Oh, yeah, we’re gonna get this house.’ I said, ‘You’re going to get this house?’ They said, ‘Yeah.’ I said, ‘Well, is there anything I can do? Is there anyone I can talk to?’ They say, ‘No,’” Green said.

Green sued his mortgage lender, Chase Home Finance, after the bank foreclosed on his New Orleans East home in 2011. Chase tried to take the house shortly after Green rebuilt it using flood insurance proceeds from Hurricane Katrina, and Green’s attorney, Marc Michaud, argues in court filings that Chase committed fraud to justify foreclosing on him.

[WLTX]

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Wells Fargo Executives Knew How Screwed Up Their Car Insurance Program Was for Years: Lawsuit

Wells Fargo Executives Knew How Screwed Up Their Car Insurance Program Was for Years: Lawsuit

JALOPNIK-

Bank scandals, electric-vehicle production, carmakers spending cash like a kid with too big of an allowance, recall investigations and how the midterm elections affected legislators who deal with the auto industry. All of that and more in The Morning Shift for Wednesday, Nov. 6, 2018.

1st Gear: Here Comes the “You Knew About It” Lawsuit

The new Wells Fargo “re-established in 2018” commercials are all nice and “We’re sorry we screwed up” and all, but its scandals extend wide and far. Just get a load of this one: Reuters reports that a new lawsuit alleges Wells Fargo executives knew how bad the bank’s auto-insurance program was for years.

Our big breakdown on the Wells Fargo insurance scandal is here, but, to be quick: The bank forced around 800,000 people to purchase insurance they didn’t need along with their car loans, pocketing millions that it’s now having to pay back. Wells Fargo called it “collateral protection insurance,” or CPI.

[JALOPNIK]

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Wells Fargo now estimates that about 545 homeowners lost their homes after they were “incorrectly denied” a loan modification or deemed ineligible to apply.

Wells Fargo now estimates that about 545 homeowners lost their homes after they were “incorrectly denied” a loan modification or deemed ineligible to apply.

CNN-

Wells Fargo has identified 145 more customers whose homes were foreclosed on because of an apparent computer glitch.

The embattled bank first revealed a disastrous “calculation error” in its mortgage modification underwriting tool in August.
Wells Fargo (WFC) said in a filing on Tuesday that an expanded review found additional “errors” that inflated estimates of attorneys’ fees for homeowners in the foreclosure process.
Legal fees are taken into account when banks determine if customers qualify for mortgage modifications or repayment plans. Wells Fargo said homeowners were not actually charged the inaccurate attorney costs.
[CNN]
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1st Cir. Confirms Rooker-Feldman Barred Borrower’s State and Federal Law Claims

1st Cir. Confirms Rooker-Feldman Barred Borrower’s State and Federal Law Claims

Lexology-

The U.S. Court of Appeals for the First Circuit recently affirmed dismissal of a borrower’s state and federal law claims, concluding that the trial court lacked jurisdiction under the Rooker-Feldman doctrine, because the borrower’s federal suit sought to invalidate the state courts’ judgments.

A copy of the opinion in Klimowicz v. Deutsche Bank National Trust Company is available at: Link to Opinion.

After a borrower defaulted on her mortgage loan, the assignee to the borrower’s mortgage (“mortgagee”) filed a petition in the Massachusetts Land Court to foreclose the mortgaged property. Final judgment was entered in the mortgagee’s favor, and the property was sold to the mortgagee at a foreclosure sale.

The mortgagee then turned to the state’s county Housing Court and filed a summary process action to evict the borrower, who in turn filed a counterclaim. After lengthy motion practice, and challenges to the validity of the mortgage assignment, the mortgagee was eventually awarded possession of the property. The borrower’s appeal of the final judgment in the eviction action was dismissed for failure to post bond.

[LEXOLOGY]

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TFH 11/4 | Ten Major Myths Versus Realities in Foreclosure Litigation

TFH 11/4 | Ten Major Myths Versus Realities in Foreclosure Litigation

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 4, 2018

Ten Major Myths Versus Realities in Foreclosure Litigation

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John and I been discussing on past shows the increasing yet frustratingly slow changes in favor of homeowners taking place today in foreclosure litigation in many States, particularly in Hawaii which developments we highlighted on last week’s show.

Mainly responsible for all of these changes are shifting public and judicial attitudes regarding the archaic unfairness of an ancient common law foreclosure system, largely inherited from English law.

Those of us committed to reversing so many still entrenched attitudes unfairly harming homeowners can ultimately only succeed if we openly challenge such misguided received legal traditions, in effect, amounting to historical brainwashing, improperly hiding behind such doctrines as stare decisis and res judicata.

In doing so, we must expose and openly challenge at least ten major myths underlying those entrenched attitudes, which are the subject of today’s show, including the following departures from reality:

Myth # 1: Foreclosure defendants want a free house.

Myth #2: Foreclosure auctions produce fair sale prices.

Myth #3: Recorded loan documents are trustworthy.

Myth #4: Foreclosures promote market stability.

Myth #5: Foreclosure defendants have no standing to challenge securitized trust documents.

Myth #6: Stare Decisis and Res Judicata cannot be challenged in foreclosure litigation.

Myth #7: Attorney affirmations have evidential weight.

Myth #8: Mortgage and Trust Deed Notes are negotiable instruments.

Myth #9: The mortgage follows the note.

Myth #10: Foreclosure judges are dishonest.

Listen to this Sunday’s show to match reality against these ten major myths.

And please remember that most of the Nation (except Hawai’i which remains on standard time) goes back to standard time today.

As a result, The Foreclosure Hour will now be heard live one hour earlier on most of the Mainland on iHeart Radio on the Internet, which live show however repeats itself the following hour on iHeart Radio as well for those who missed our live broadcast.

Gary Dubin

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Host: Gary Dubin Co-Host: John Waihee

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CALL IN AT (808) 521-8383

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 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

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RENALDO vs DEUTSCHE BANK NATIONAL TRUST | FL 4DCA – we find that the Bank failed to prove compliance with the condition precedent of mailing Borrowers a default notice as required by paragraph 22 of the mortgage. Thus, we reverse and remand for the trial court to enter an order of involuntary dismissal.

RENALDO vs DEUTSCHE BANK NATIONAL TRUST | FL 4DCA – we find that the Bank failed to prove compliance with the condition precedent of mailing Borrowers a default notice as required by paragraph 22 of the mortgage. Thus, we reverse and remand for the trial court to enter an order of involuntary dismissal.

Renaldo vs Deutsche Bank National Trust by DinSFLA on Scribd

© 2010-18 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Deutsche Bank National Trust Company, etc. v. Noll | Florida’s Second DCA Clarifies on Standing if New Case is Commenced While the Clerk Possesses the Note

Deutsche Bank National Trust Company, etc. v. Noll | Florida’s Second DCA Clarifies on Standing if New Case is Commenced While the Clerk Possesses the Note

JD SUPRA-

On October 31, 2018, Florida’s Second District Court of Appeal recently distinguished two of its prior opinions and held that a foreclosure plaintiff does not lose its standing as a holder of a negotiable instrument if it surrenders a promissory note to the clerk of court for purposes of obtaining a foreclosure judgment, and later re-files the action without retaking possession of the note from the clerk.

Two prior opinions from the Second District Court of Appeal, Partridge v. Nationstar Mortgage, LLC, 224 So. 3d 839 (Fla. 2d DCA 2017) and Geweye v. Ventures Trust 2013-I-H-R, 189 So. 3d 231 (Fla. 2d DCA 2016) were often misinterpreted by foreclosure defense counsel as holding that a foreclosure plaintiff that surrenders the note and mortgage somehow loses the necessary standing to commence a new foreclosure action.

However, in the opinion issued in Deutsche Bank National Trust Company, etc. v. William Noll, 2D16-5635, the Second District Court of Appeal clarified its prior opinions, stating that:

“At issue in Partridge was a purported assignment of the mortgage, but not the note, after the original note was filed with the court in the prior foreclosure action instituted by a different plaintiff. Geweye, on which this court relied in Partridge, did not address whether the plaintiff had standing at the inception of the action. Rather, the court held that the substituted plaintiff lacked standing to enforce the note at the time of trial despite the original note having been in the court file because the evidence established the mortgage, but not the note, had been assigned to the plaintiff. This case does not turn on the effectiveness of a post-commencement assignment after the original note was surrendered to the clerk.” (internal citations and quotations omitted)

[JD SUPRA]

165635_39_10312018_08570471_i by DinSFLA on Scribd

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Bauer v. Roundpoint Mortg. Servicing Corp. | Loan Servicer Not “Foreclosed” From Reporting Default to CRAs

Bauer v. Roundpoint Mortg. Servicing Corp. | Loan Servicer Not “Foreclosed” From Reporting Default to CRAs

The National Law Review-

We have a good one for our lender and servicer friends out there.

In Bauer v. Roundpoint Mortg. Servicing Corp., No. 18 C 3634, 2018 U.S. Dist. LEXIS 184328 (N.D. Ill. Oct. 29, 2018), the Court held that despite a court order dismissing the mortgage foreclosure with prejudice, plaintiff’s mortgage servicer could report the plaintiff’s default to the credit reporting agencies.

The plaintiff, Bauer, defaulted on his mortgage. Then-mortgagee, JP Morgan Chase (“Chase”), filed a judicial foreclosure (“First Foreclosure”) against Bauer which was voluntarily dismissed in 2013. Chase then filed a second judicial foreclosure action (“Second Foreclosure”) against Bauer.  The Second Foreclosure was voluntarily dismissed in 2015. In March 2016, then-mortgagee, U.S. Bank, filed a third foreclosure action (“Third Foreclosure”) against Bauer.

Bauer moved to dismiss the Third Foreclosure based on Illinois’s “single filing rule.” Under the rule, after a voluntary dismissal, a plaintiff may only commence a new action on the same cause of action within one year or within the remaining period of limitation, whichever greater.   The court agreed that the rule applied and dismissed the Third Foreclosure with prejudice. In relevant part, the dismissal order (“Order”) said, “… Plaintiff’s complaint is dismissed with prejudice based on the single re-filing rule.”

[THE NATIONAL LAW REVIEW]

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Alleged mail bomber lost home to bank once owned by Secretary Mnuchin

Alleged mail bomber lost home to bank once owned by Secretary Mnuchin

Chicago Tribune-

The bank that foreclosed on the home of Cesar Sayoc, the suspect in the pipe bomb mailings, was formerly owned by Treasury Secretary Steven Mnuchin.

Sayoc lost his home in 2009 when IndyMac moved to foreclose on his south Florida home, according to Florida property and court records. IndyMac was a California-based bank that failed during the recession and was later purchased by a group of investors that included Mnuchin. IndyMac was renamed OneWest Bank.

Further, there are signs that Sayoc may have been a victim of a controversial industry practice during the recession.

The lawyer who signed Sayoc’s foreclosure paperwork was Erica Johnson-Seck, a lawyer for OneWest. Johnson-Seck was an official at the center of OneWest’s so-called “robo-signing” scandal. Robo-signing is where banks signed off on thousands of legal documents automatically without checking their accuracy, causing thousands of people to lose their homes without proper procedures.

[CHICAGO TRIBUNE]

See the fraudulent assignment of mortgage I pulled from Broward County below:

Cesar Sayoc ASMNT by DinSFLA on Scribd

© 2010-18 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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TFH 10/28 | Summarizing and Understanding the Thirty-Five Year Transformation of Foreclosure Defense in Hawaii from 1983 to 2018, What Remains Ahead, and What the Hawaii Experience Can Mean for Listeners in Other States

TFH 10/28 | Summarizing and Understanding the Thirty-Five Year Transformation of Foreclosure Defense in Hawaii from 1983 to 2018, What Remains Ahead, and What the Hawaii Experience Can Mean for Listeners in Other States

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 – October 28, 2018

Summarizing and Understanding the Thirty-Five Year Transformation of Foreclosure Defense in Hawaii from 1983 to 2018, What Remains Ahead, and What the Hawaii Experience Can Mean for Listeners in Other States

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On past shows John and I, in addition to discussing foreclosure defense issues nationally, have highlighted a number of advances in judicial protections for Hawaii homeowners, in which our law firm has played a part, that have also caught the attention of numerous commentators nationwide.

Several of our listeners have requested that we summarize the history of those changes, how they occurred, and what additional advances in Hawaii can be anticipated in the future, of interest not only to our Hawaii listeners, but listeners in other States, including judges and legislators, who would like to replicate those changes in their jurisdiction.

On today’s show, therefore, John and I will discuss the Hawaii experience, concentrating on ten of the most important Hawaii appellate decisions that collectively have reshaped foreclosure defense in our State, challenging our listeners to achieve the same and more in their jurisdiction, including:

1. Hawai’i Community Federal Credit Union v. Keka, 94 Haw. 213, 11 P.3d 1 (2000);

2. GE Capital Hawaii v. Yonenaka, 96 Haw. App. LEXIS 113 (2001);

3. Beneficial Hawaii, Inc. v. Kida, 96 Haw. 289, 30 P.3d 895 (2001);

4. U.S. Bank v. Salvacion, 2011 Haw. App. LEXIS 387 (2011);

5. Kondaur Capital Corp. v. Matsuyoshi, 136 Haw. 227, 361 P.3d 454 (2015);

6. Santiago v. Tanaka, 137 Haw. 137, 366 P.3d 612 (2015);

7. Bank of America v. Reyes-Toledo, 139 Haw. 361, 390 P.3d  1248 (2017); Bank of America v. Reyes-Toledo 2, 2018 Haw. LEXIS 214, 2018 WL 4870719 (2018);

8. U.S. Bank v. Mattos, 140 Haw. 26, 398 P.3d 615 (2017);

9. Wells Fargo Bank v. Behrendt, 142 Haw. 37, 414 P.3d 89 (2018);

10. Sakal v. AOAO Hawaiian Monarch, 143 Haw. 219, 426 P.3d 443 (App. 2018), reconsideration denied, 2018 Haw. App. LEXIS 395, 2018 WL 4483207 (Haw. App. 2018).

When the audio of this Sunday’s show is posted on our website www.foreclosurehour.com, we will attach copies of all ten appellate opinions.

Thirty-five years ago in Hawaii our judges asked only whether a foreclosure defendant had timely paid his or her mortgage monthly.

Listen to this Sunday’s show to learn how different things are today in Hawaii Courts and what new protections may be expected.

Gary Dubin

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Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383

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 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

© 2010-18 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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NJ Appellate Court Sounds Warning Bell to Lenders About Issuing Pre-Foreclosure Notices

NJ Appellate Court Sounds Warning Bell to Lenders About Issuing Pre-Foreclosure Notices

NJ Law Connect-

In a published decision issued on October 4, 2018, the New Jersey Appellate Division issued a controversial ruling that allows a homeowner to pursue a claim against Bank of America under the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA) due to the defendants’ failure to identify the lender’s name and address in several pre-action foreclosure notices served on the homeowner, even though  the bank ultimately did not file a foreclosure suit. Wright v. Bank of America, et al., Docket No. A-2358-15T-3 (App. Div. NJ, October 4, 2018).

In this particular case, the homeowner filed a complaint against Bank of America and its loan servicer BAC Home Loans Servicing, LP (BAC), alleging that five notices of intention to foreclose served on him by BAC violated the FFA because the notices neglected to include Bank of America’s name and address.  The homeowner did not dispute having defaulted on his mortgage or claim that the notices were false and misleading.

The trial court dismissed the homeowner’s complaint against Bank of America and its loan servicer BAC, finding that a violation of the FFA cannot support a TCCWNA claim. The homeowner appealed.

[NJ LAW CONNECT]

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Sims v. New Penn Financial LLC | 7th Cir. Rejects ECOA Claim Based on Vague Statement by Defendant’s Employee

Sims v. New Penn Financial LLC | 7th Cir. Rejects ECOA Claim Based on Vague Statement by Defendant’s Employee

THE CFS BLOG-

The U.S. Court of Appeals for the Seventh Circuit held that the plaintiffs failed to prove a violation of the federal Equal Credit Opportunity Act (ECOA) under a disparate treatment theory where their only evidence was a vague statement from one of the defendant’s employees.

Accordingly, the Seventh Circuit affirmed the ruling of the trial court granting summary judgment in favor of the defendant.

A copy of the opinion in Mario Sims v. New Penn Financial LLC is available at:  Link to Opinion.

The plaintiffs, an African-American couple, purchased a home from the seller in October 2008 for $185,000.  The plaintiffs made a down payment of $12,000, and monthly payments of $1,400 to the seller for about one year.

[THE CFS BLOG]

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California Reinstates Homeowner Bill of Rights with Amendments

California Reinstates Homeowner Bill of Rights with Amendments

JD SUPRA

The State of California recently reinstated and amended its Homeowner Bill of Rights, which previously expired on January 1, 2018.  The Homeowner Bill of Rights contains various foreclosure protections for borrowers pursuing loan modifications or similar foreclosure prevention alternatives.  The law becomes effective on January 1, 2019.

The Homeowner Bill of Rights provides for a variety of requirements and prohibitions in connection with foreclosures.  These provisions generally apply to first lien loans secured by owner-occupied homes.  Among other things, entities that foreclosed on more than 175 homes during the prior reporting year are prohibited, following submission of a complete loan modification application, from recording a notice of default or notice of sale, or conducting a trustee’s sale (if an application is submitted at least 5 business days prior to a scheduled sale) until the borrower: (i) is provided a written denial of an application (including the reasons for denial and foreclosure prevention alternatives) and the 30-day period to appeal the denial expires; (ii) does not accept a written offer to participate in a modification within 14 days; or (iii) defaults under an accepted modification.  Further, prior to recording any notice of default: (i) the borrower must be given written notice of protections that may be available under the federal SCRA and the right to request copies of the evidence of indebtedness and security instrument, any assignment, and payment history since the borrower was last less than 60 days past due; and (ii) 30 days must pass after contacting the borrower or after making diligent effort to do so.  In addition, a notice of default also may not be recorded if the borrower is approved in writing for a foreclosure prevention alternative, and certain other specified conditions are met.

If a foreclosure prevention alternative is offered, a servicer must generally send written communication providing specified information about the alternative within 5 days after recording a notice of default.  If an alternative is approved, a servicer is prohibited from recording a notice of sale or conducting a trustee’s sale if specified conditions are met.  A notice of default must be rescinded, and a pending trustee’s sale canceled, upon execution of a permanent foreclosure alternative.  The law prohibits fees from being charged in connection with a modification or foreclosure prevention alternative, and requires that modifications and prevention alternatives previously approved must be honored following transfer or sale to another servicer.  The law also requires that a notice of default must include a specified declaration regarding contact with the borrower, and provides that a mortgage servicer satisfies specified telephone contact requirements in this regard if the borrower makes a written request to cease communications.  Certain technical changes have also been made to provisions requiring a servicer to establish a single point of contact for a borrower requesting a foreclosure prevention alternative.  The law also defines what it means for a loan modification application to be “complete.”

Violations of the above provisions may result in liability to borrowers, as well as awards of the greater of treble damages or statutory damages of $50,000 for intentional or reckless violations.  Violations of certain provisions by CFL, CRMLA, and REL licensees may be deemed violations of those respective licensing laws.  Mortgage servicers engaging in multiple and repeated filings of unsubstantiated foreclosure documents may be subject to a civil penalty of up to $7,500 per lien and further administrative enforcement.

Additionally, the law provides that any amendment, addition, or repeal of a section of the Homeowner Bill of Rights does not release, extinguish, or change any liability under a previous section that was in effect at the time of an action.  The law also generally subjects entities that foreclosed on fewer than 175 properties during the prior reporting year to similar, but in some cases less stringent, requirements and restrictions.

A copy of the reinstated California Homeowner Bill of Rights, as amended, is available here.

© 2010-18 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Fake Accounts Still Haunt Wells Fargo

Fake Accounts Still Haunt Wells Fargo

Bloomberg-

Oh Wells Fargo.

The Wells Fargo & Co. fake-accounts scandal is one of the highest-profile cases of banking villainy since the financial crisis, but it is an odd kind of villainy. If you were a cartoon-villain banker, this is pretty much the last thing you would do. Wells Fargo’s retail bankers were under a lot of pressure to open accounts, so they responded by opening fake accounts. This angered customers and the public, but it’s not like it did Wells Fargo any favors. Wells Fargo’s goal in pressuring its employees to open lots of accounts for customers was to open lots of real accounts, to get customers to make deposits and take out loans and do transactions and generate revenue for Wells Fargo. The thing about fake accounts is that they mostly don’t bring in any money: At least 95 percent of Wells Fargo’s fake accounts brought in zero dollars, while the rest seem to have brought in about $2.4 million in fees, a rounding error for a bank with $88 billion of net revenue last year, and orders of magnitude less than the fines Wells has had to pay. The fake-accounts scandal is not a story about a clever greedy bank exploiting customers for money; it is a story about a dumb greedy bank with poorly designed incentives and inadequate supervision harming customers without making any money.
© 2010-18 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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A.G. Underwood Announces $65 Million Settlement With Wells Fargo For Misleading Investors Regarding Cross-Sell Scandal

A.G. Underwood Announces $65 Million Settlement With Wells Fargo For Misleading Investors Regarding Cross-Sell Scandal

A.G. Underwood Announces $65 Million Settlement With Wells Fargo For Misleading Investors Regarding Cross-Sell Scandal

Wells Fargo Failed to Disclose to Investors that Success of Cross-Sell Efforts was Built on Misconduct  Such as Opening Millions of Fake Deposit and Credit Card Accounts; NY Investors Lost Millions when Misconduct was Disclosed

Settlement Marks Latest Martin Act Enforcement Action to Protect NY Investors and Integrity of Financial Marketplace

NEW YORK – Attorney General Barbara D. Underwood announced today that Wells Fargo & Company will pay a $65 million penalty following the Attorney General’s investigation into the bank’s fraudulent statements to investors in connection with its “cross-sell” business model, related sales practices, and the bank’s publicly reported cross-sell metrics.

“The misconduct at Wells Fargo was widespread across the bank and at every level of management – impacting both customers and investors who were misled,” said Attorney General Underwood. “State securities laws are vital to protecting the hard-earned savings of working families and Main Street investors from financial fraud, and my office will continue to do what’s necessary to protect the public and the integrity of our markets.”

“Cross-sell” refers to the process of selling new financial products and/or services to an existing customer.?Wells Fargo represented to investors its ability to increase revenues and better serve customers by pursuing its purportedly superior cross-sell strategy; it also regularly reported cross-sell metrics that supposedly reflected the success of that strategy.

However, Wells Fargo failed to disclose to investors that the success of its cross-sell efforts was built on sales practice misconduct at the bank. Driven by strict and unrealistic sales goals, employees in Wells Fargo’s Community Bank division engaged in fraudulent sales practices, including the opening of millions of fake deposit and credit card accounts without customers’ knowledge. Through a significant incentive compensation program, employees who met these targets were eligible for promotions and bonuses, while employees who did not meet the sales targets faced relentless pressure and even termination.

Today’s settlement notes that Wells Fargo made numerous misrepresentations to investors over many years, and failed to disclose its knowledge of systemic problems pervading the bank’s sales practices. In one email from June 2011, a member of the incentive compensation team acknowledged this misconduct by Wells Fargo employees, stating that “I’ve asked bankers… why people cheat… it’s because their manager tells them they’ll be fired if they don’t hit their minimums.”

Beginning as early as 2011, Wells Fargo’s Board of Directors received reports that described increasing numbers of allegations of this sales practice misconduct by its employees. In Congressional testimony, Wells Fargo’s former CEO stated that he personally became aware of widespread fraud by Wells Fargo employees in 2013. Yet Wells Fargo failed to disclose to investors the misconduct at the heart of the bank’s vaunted cross-sell business model. When the truth was publicly disclosed, New York investors lost millions of dollars.

The Attorney General, through the office’s Investor Protection Bureau, is charged with enforcing the New York State securities law (commonly known as the Martin Act), to protect New York investors and the integrity of the marketplace through investigations of suspected fraud in the offer, sale, or purchase of securities.

The Attorney General’s office is also continuing its investigation of Wells Fargo in connection with its illegal business practices of opening millions of unauthorized accounts and enrolling consumers in services without their knowledge or consent. Today’s settlement has no impact on that ongoing investigation and other pending investigations of Wells Fargo.

This matter was handled by Senior Enforcement Counsel Hannah K. Flamenbaum and Assistant Attorneys General Melissa Gable and Amita Singh, all of the Investor Protection Bureau, under the supervision of Investor Protection Bureau Chief Cynthia Hanawalt. Data Scientist Katie Rosman and Director Jonathan Werberg of the Research and Analytics Department and Chief Economist Peter Malaspina also assisted in this matter. The Investor Protection Bureau is part of the Economic Justice Division, which is led by Executive Deputy Attorney General for Economic Justice Manisha M. Sheth.

Click here to view the settlement agreement.

© 2010-18 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Attorney Mark Stopa’s foreclosure cases are halted but clients’ checks are being cashed

Attorney Mark Stopa’s foreclosure cases are halted but clients’ checks are being cashed

Tampa Bay-

A bankruptcy judge has ordered a temporary halt to all state and appellate court proceedings in which suspended foreclosure defense attorney Mark Stopa and his former law firm are counsel of record.

The emergency order, effective until Nov. 6, could give dozens of Florida homeowners a temporary respite from the threat of foreclosure. But many have been surprised and dismayed to find that the trustee overseeing the law firm’s bankruptcy case has been cashing post-dated checks they wrote to the firm.

“It’s a hot mess,” Tonya McKendree, a former client of Stopa, said Wednesday. She said trustee Stephen Meininger cashed four checks totaling $1,250, causing her account to be overdrawn by about $400 and costing her more than $100 in overdraft fees.

[TAMPA BAY]

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Major Atlanta Foreclosure Attorney Nathan E. Hardwick IV Guilty of Major Fraud and Conspiracy

Major Atlanta Foreclosure Attorney Nathan E. Hardwick IV Guilty of Major Fraud and Conspiracy

Coosa Valley News-

A federal grand jury convicted Nathan E. Hardwick IV of twenty-one counts of wire fraud, one count of conspiracy to commit wire fraud, and one count of making false statements to a federally insured financial institution on October 12, 2018.

“Hardwick was motivated by unadulterated deceit and greed when he blatantly violated the trust placed in him by embezzling millions of dollars from his clients and partners,” said U.S. Attorney Byung J. “BJay” Pak. “The extravagant lifestyle that Hardwick enjoyed at the expense of others will now be traded for time in prison.”

“This case is especially troubling given the illegal actions were orchestrated by a lawyer who swore an oath to uphold the law and represent his clients with integrity,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The magnitude of theft Hardwick is convicted of merits a lengthy sentence, one that will hopefully send a message that the FBI and U.S. Attorney’s Office will not tolerate this type of white-collar crime.”

According to U.S. Attorney Pak, the charges and other information presented in court: Hardwick and Asha Maurya engaged in a scheme to defraud MHSLAW, Inc. and its subsidiaries, Morris Hardwick Schneider, LLC and LandCastle Title, LLC, (collectively referred to as “MHS”). MHS owned and operated a law firm that specialized in residential real estate closings and foreclosures, and it ran a title business. MHS employed approximately 800 people in 16 states. Hardwick was the managing partner of the law firm and the CEO of the title business. He also ran the law firm’s closing division, which was based in Atlanta. Maurya managed MHS’s accounting operations under Hardwick’s supervision and control.

[COOSA VALLEY NEWS]

© 2010-18 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Florida judge rejects sanctions against Bank of America

Florida judge rejects sanctions against Bank of America

  • Miami attorney Bruce Jacobs, representing a couple in a foreclosure case, had sought to get his allegations against Bank of America heard in court.
  • The bank argued his claims were baseless.
  • Judge Bronwyn Miller dismissed the attorney’s claims over the bank’s purge of 1.8 billion of bank records.

CNBC-

A Miami-Dade County judge on Tuesday turned down requests by a real estate attorney to punish Bank of America over claims of withholding and destroying records.

Judge Bronwyn Miller also dismissed the attorney’s claims over the bank’s purge of 1.8 billion of bank records. The ruling, handed down after a hearing on Monday, did not explain the legal reason for her decision.

Miami attorney Bruce Jacobs, representing a couple in a foreclosure case, had sought to get his allegations against Bank of America heard in court. The bank argued his claims were baseless.

[CNBC]

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Freddie Mac Offers Assistance to Hurricane Michael Borrowers

Freddie Mac Offers Assistance to Hurricane Michael Borrowers

(GLOBE NEWSWIRE) — Freddie Mac(OTCQB: FMCC) today reminded Servicers of its disaster relief policies for borrowers who have been affected by Hurricane Michael. Freddie Mac’s disaster relief options are available to borrowers whose homes or places of employment are located in presidentially-declared Major Disaster Areas where federal individual assistance programs are made available to affected individuals and households.

In areas where the Federal Emergency Management Agency (FEMA) has not yet made individual assistance available, mortgage servicers may immediately leverage Freddie Mac’s short-term forbearance programs to provide mortgage relief to their borrowers that have been affected by the hurricane.

“Safety is our top priority for those in the Florida panhandle and nearby states as Hurricane Michael approaches,” said Yvette Gilmore, Freddie Mac’s Vice President of Single-Family Servicer Performance Management. “Once safe from this dangerous storm, we strongly encourage homeowners whose homes or places of employment have been impacted by Hurricane Michael to call their mortgage Servicer—the company to which borrowers send their monthly mortgage payments—to learn about available relief options. We stand ready to ensure that mortgage relief is made available.”

News Facts:

  • Freddie Mac disaster relief policies authorize mortgage servicers to help affected borrowers in eligible disaster areas: those federally-declared Major Disaster Areas where federal individual assistance programs have been extended. A list of these areas can be found on the FEMA’s website.
  • Freddie Mac mortgage relief options for affected borrowers in eligible disaster areas include:
    • Suspending foreclosures by providing forbearance for up to 12 months;
    • Waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; and
    • Not reporting forbearance or delinquencies caused by the disaster to the nation’s credit bureaus.
  • Freddie Mac is reminding servicers to consider borrowers who are impacted by the storm, but who live and work outside of an eligible disaster area, for Freddie Mac’s standard relief policies, which include forbearance and mortgage modifications.
  • Affected borrowers should immediately contact their mortgage servicer—the company to which they send their monthly mortgage payment.
  • See http://www.freddiemac.com/singlefamily/service/natural_disasters.html for a description of Freddie Mac disaster relief policies.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com@FreddieMac and Freddie Mac’s blog.

MEDIA CONTACT: Chad Wandler
703-903-2446
Chad_Wandler@FreddieMac.com

© 2010-18 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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