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Eupora widow files lawsuit against Wells Fargo over home foreclosure

Eupora widow files lawsuit against Wells Fargo over home foreclosure

Clarion Ledger-

A Eupora widow has filed for a temporary restraining order and injunction against Wells Fargo Bank accusing the banking giant of initiating a foreclosure sale of her home prior to telling her.

Sandra Cummings and her attorney say a Wells Fargo Home Mortgage official in correspondence dated Oct. 13, but not received via fax until Nov. 3, said there was no sale date at that time for the property.

However, Cummings’  lawsuit says Wells Fargo had already instituted a foreclosure sale of the property with an initial publication date of Nov. 1 and an ultimate sale date of Nov. 22. The loan was for more than $114,000.

The lawsuit says it is without question and dispute that Wells Fargo didn’t comply with the dictates of the state foreclosure law in that it failed to mail a notice letter at least 45 days before a foreclosure sale is conducted.

[CLARION LEDGER]

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Are We Headed For Another Foreclosure Crisis?

Are We Headed For Another Foreclosure Crisis?

Forbes-

Almost everyone agrees that the Great Recession was triggered largely by the U.S. housing bubble bursting in 2007. For years beforehand, lenders had been giving out riskier and riskier mortgages, including waiving or lowering down payment requirements.

Ten years later, low- or no-down-payment mortgages may be making a comeback. Several private banks are now offering various zero-down mortgage programs or down payment assistance programs for higher-risk borrowers. While they are not identical to the adjustable-rate mortgages that were given out like candy in the runup to 2007, they may herald a worrisome trend that could lead to a repeat of our last housing crisis.

Michigan’s largest bank, Flagstar, is offering a new programto “low-income and moderate-income” borrowers that essentially pays their 3% down payment, plus up to $3,500 for closing costs, for them. Sounds generous, but buyers should be careful to read the fine print: The down payment and closing costs can be taxed as income by the IRS.

[FORBES]

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ANFRIANY v. DEUTSCHE BANK NATIONAL TRUST COMPANY | FL 4DCA –  Anfriany raises substantive issues regarding the application of judicial estoppel to bar his entitlement to fees and costs, and a procedural issue. Because the trial court applied the wrong standard in dismissing the entitlement based on judicial estoppel, we reverse and remand for further proceedings

ANFRIANY v. DEUTSCHE BANK NATIONAL TRUST COMPANY | FL 4DCA – Anfriany raises substantive issues regarding the application of judicial estoppel to bar his entitlement to fees and costs, and a procedural issue. Because the trial court applied the wrong standard in dismissing the entitlement based on judicial estoppel, we reverse and remand for further proceedings

 

WALTOGUY ANFRIANY and MIRELLE ANFRIANY, Appellants,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee, In Trust for the Registered Holders of Argent Securities, Inc., Asset-Backed Pass-Through Certificates, Series 2005-W4, Appellee.

No. 4D16-4182.
District Court of Appeal of Florida, Fourth District.
December 6, 2017.
Petition for writ of certiorari being treated as a final appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Peter D. Blanc, Judge; L.T. Case No. 50-2008-CA-022070.

Brian K. Korte and Scott J. Wortman of Korte & Wortman, P.A., West Palm Beach, for appellants.

Julissa Rodriguez and Stephanie L. Varela of Greenberg Traurig, P.A., Miami, and C. Wade Bowden and Tyrone Adras of Greenberg Traurig, P.A., West Palm Beach, for appellee.

CONNER, J.

The appellants (collectively “Anfriany”) petitioned for certiorari to review the trial court’s order vacating their entitlement to attorney’s fees and costs in the underlying foreclosure action initiated by the appellee, Deutsche Bank National Trust (“the Bank”). This Court ordered that the case be treated as a final appeal pursuant to Florida Rules of Appellate Procedure 9.110 and 9.030(b)(1)(A).

Anfriany raises substantive issues regarding the application of judicial estoppel to bar his entitlement to fees and costs, and a procedural issue. Because the trial court applied the wrong standard in dismissing the entitlement based on judicial estoppel, we reverse and remand for further proceedings. We do not address the procedural issue raised.

Background

The Bank filed the underlying foreclosure action against Anfriany and others in 2008. The trial court granted the Bank’s voluntary dismissal without prejudice. In May 2011, Anfriany, through foreclosure counsel, moved to tax attorney’s fees and costs. In May 2012, the trial court granted the motion and ordered that Anfriany was entitled to reasonable attorney’s fees and costs (“the fee entitlement order”), and if the parties could not agree on the amount, Anfriany would set the matter for an evidentiary hearing.

In May 2013, Anfriany filed a Chapter 11 voluntary bankruptcy petition, represented by separate bankruptcy counsel. The petition included bankruptcy schedules and a statement of financial affairs, which required Anfriany to disclose and list the value of “all personal property of the debtor of whatever kind,” including “contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights to setoff claims.” Anfriany did not list any assets in the contingent claims category. When Anfriany amended his personal property schedule later that year, he again did not list such assets. In 2014, the bankruptcy court confirmed Anfriany’s reorganization plan based on his affidavits and disclosures. Subsequently, the bankruptcy court granted Anfriany’s motion to temporarily and administratively close the case. Because it was a Chapter 11 bankruptcy, Anfriany’s debts were not discharged under the approved reorganization plan.

In October 2015, Anfriany requested the trial court in the foreclosure action to hold an evidentiary hearing on his motion for attorney’s fees and costs. The purpose of the hearing was “to determine the reasonable amount of attorney’s fees and costs.”

In September 2016, the Bank moved to vacate the fee entitlement order. In the motion, the Bank asserted that Anfriany’s claim for attorney’s fees was barred by judicial estoppel because Anfriany failed to disclose in his bankruptcy case his award of entitlement to attorney’s fees and costs, which was a contingent and unliquidated asset. The Bank argued that Anfriany therefore misled “the bankruptcy court and creditors to believe that he had fewer assets from which he could pay his creditors.” Thus, because Anfriany was taking inconsistent positions before the bankruptcy and foreclosure courts, the Bank asserted that judicial estoppel should bar his recovery.

In his written response to the motion, Anfriany argued that judicial estoppel did not bar his claim for fees and costs. Anfriany asserted that, because a Chapter 11 bankruptcy petition does not discharge his debts, he did not deprive any creditors of their rights to collect amounts owed; thus, no parties were prejudiced by his omission. Additionally, Anfriany argued that he himself was unaware that attorney’s fees are legally classified as an “asset” and his bankruptcy counsel was unaware of the attorney’s fees claim; thus, the omission was not an attempt to conceal assets.

A hearing was held on the Bank’s motion to vacate, and the trial court made the following conclusion:

Okay. Relying upon the case of Coastal Plains, which is 179 F.3d 197,which says, “Considering judicial estoppel for bankruptcy cases,” it doesn’t say Chapter 7. It says for bankruptcy cases. “The debtor’s failure to satisfy statutory disclosure is `inadvertent’ only when in general, the debtor either lacks knowledge of the undisclosed claims or has no motive for their concealment.”

That seems to very clearly apply to the facts of this case, so I believe the Court has no discretion. But under a common sense interpretation of that language, even if the Court had discretion, it seems like its discretion is limited.

Because the record states in this case that — well, the record does not indicate that the debtor lacked knowledge of the undisclosed claims. Clearly, the debtor had no motive for concealment, whether it’s inadvertent or not, it doesn’t carry any weight, and the Court is obligated to find that judicial estoppel applies and bars the further pursuit of the attorney’s fees claims.

As such, the trial court granted the Bank’s motion.

Anfriany gave notice of appeal.

Appellate Analysis

We employ a mixed standard of review of a judicial estoppel claim. See Bueno v. Workman, 20 So. 3d 993, 997 (Fla. 4th DCA 2009). “To the extent the trial court’s order is based on factual findings, [the appellate court] will not reverse unless the trial court abused its discretion; however, any legal conclusions are subject to de novo review.” Id. (quoting Foreclosure FreeSearch, Inc. v. Sullivan, 12 So. 3d 771, 774 (Fla. 4th DCA 2009)).

Anfriany raises two substantive issues regarding the application of judicial estoppel to bar his claim for fees and costs. First, he argues that the fee award was not his asset, but an asset of his attorney. Second, he argues the trial court improperly failed to consider the nature of the bankruptcy filing (reorganization of debt versus discharge of debt) and whether his failure to disclose was inadvertent. We affirm without discussion the first argument; we address the second argument.

“Judicial estoppel is an equitable doctrine that is used to prevent litigants from taking totally inconsistent positions in separate judicial, including quasi-judicial, proceedings.” Blumberg v. USAA Cas. Ins. Co., 790 So. 2d 1061, 1066 (Fla. 2001)(quoting Smith v. Avatar Props., Inc., 714 So. 2d 1103, 1107 (Fla. 5th DCA 1998)). This Court has explained that judicial estoppel “protects the integrity of the judicial process and prevents parties from making a mockery of justice by inconsistent pleadings and playing fast and loose with the courts.” Grau v. Provident Life & Accident Ins. Co., 899 So. 2d 396, 400 (Fla. 4th DCA 2005) (internal quotations and citations omitted). Judicial estoppel is imposed because “intentional self-contradiction is being used as a means of obtaining an unfair advantage in a forum provided for suitors seeking justice.” Scarano v. Cent. R. Co. of N.J., 203 F.2d 510, 513 (3d Cir. 1953) (emphasis added).

Our supreme court in Blumberg described the doctrine of judicial estoppel under Florida law as follows:

In order to work an estoppel, the position assumed in the former trial must have been successfully maintained. In proceedings terminating in a judgment, the positions must be clearly inconsistent, the parties must be the same and the same questions must be involved. So, the party claiming the estoppel must have been misled and have changed his position; and an estoppel is not raised by conduct of one party to a suit, unless by reason thereof the other party has been so placed as to make it to act in reliance upon it unjust to him to allow that first party to subsequently change his position. There can be no estoppel where both parties are equally in possession of all the facts pertaining to the matter relied on as an estoppel; where the conduct relied on to create the estoppel was caused by the act of the party claiming the estoppel, or where the positions taken involved solely a question of law.

Blumberg, 790 So. 2d at 1066 (emphasis added) (quoting Chase & Co. v. Little,156 So. 609, 610 (1934)).

In Grau, we noted that Blumberg “reshaped” and “broadened” the Florida doctrine of judicial estoppel announced in 1934 by the court in Chase & Co. in three ways. Grau, 899 So. 2d at 399. The court: (1) recognized an exception to the general rule that there be mutuality of parties between an earlier proceeding and the later one in which judicial estoppel is applied; the court held that mutuality of the parties is not required where “special fairness and policy considerations” compel application of the doctrine; (2) “appears to have dispensed with the Chase & Co.requirement that the `party claiming the estoppel must have been misled and have changed his position’ by the other party’s conduct in the earlier suit”;[1] and (3) held that a jury verdict met the requirement of successfully maintaining a position in a prior suit, even though no final judgment was entered. Id. at 399-400.

Grau described the post-Blumberg rule of judicial estoppel as follows:

A claim or position successfully maintained in a former action or judicial proceeding bars a party from making a completely inconsistent claim or taking a clearly conflicting position in a subsequent action or judicial proceeding, to the prejudice of the adverse party, where the parties are the same in both actions, subject to the “special fairness and policy considerations” exception to the mutuality of parties requirement.

Id. at 400 (footnotes omitted). Additionally, we observed in Grau that “[t]he `prejudice’ component of judicial estoppel occurs when `the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.‘” Id. at 400 n.3 (emphasis added) (quoting New Hampshire v. Maine, 532 U.S. 742, 751 (2001)); see also S. Fla. Coastal Elec., Inc. v. Treasures on Bay II Condo Ass’n, 89 So. 3d 264, 269 (Fla. 3d DCA 2012) (stating that the positions must be “inherently inconsistent”).

In this case, the trial court erred by failing to properly apply the Florida doctrine of judicial estoppel. Instead, the trial court relied on In re Coastal Plains, Inc., 179 F.3d 197 (5th Cir. 1999), a Fifth Circuit case, to conclude that judicial estoppel applied. Below, both parties cited to Florida and federal cases discussing judicial estoppel, but failed to alert the trial court that “the elements of judicial estoppel under federal law in such cases `may not be identical to the elements usually required under state law in Florida.'” Montes v. Mastec N. Am., Inc., 132 So. 3d 1195, 1198 n.2 (Fla. 3d DCA 2014) (quoting Losacano v. Deaf & Hearing Connection, 988 So. 2d 66, 70 n.2 (Fla. 2d DCA 2008)).

Thus, because the trial court did not apply the Florida judicial estoppel doctrine as iterated in Blumberg and Grau, we are compelled to reverse. We conclude that judicial estoppel does not bar the claim for attorney’s fees for two reasons.

First, as stated in Blumberg, “[t]here can be no estoppel where both parties are equally in possession of all the facts pertaining to the matter relied on as an estoppel.” 790 So. 2d at 1066 (quoting Chase & Co., 156 So. at 610). Here, the Bank was a creditor in the bankruptcy proceeding and was as aware of the fee entitlement order as Anfriany.

Second, Anfriany’s asserted inconsistent position of not disclosing the fee entitlement order in the bankruptcy proceeding did not “derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.” Grau, 899 So. 2d at 400 n.3 (quoting New Hampshire, 532 U.S. at 751). In other words, the record fails to show any prejudice to the Bank. Anfriany’s entitlement to fees had already been fully litigated, and no assertions by Anfriany in the bankruptcy proceeding were inconsistent with the facts justifying the fee entitlement order. The trial court made a specific finding that Anfriany had no motive to conceal the fee entitlement order in the bankruptcy proceeding.[2] If there was no motive to conceal, the facts do not support either a finding or conclusion that “intentionalself-contradiction is being used as a means of obtaining an unfair advantage in a forum provided for suitors seeking justice.” Id. at 401 (emphasis added) (quoting Scarano, 203 F. 2d at 513).

Instead, the record before us leads us to the same conclusion this Court reached in Grau: To apply judicial estoppel to Anfriany’s entitlement to fees and costs would bestow a windfall in favor of the Bank. Therefore, we quash the trial court order vacating and dismissing Anfriany’s entitlement to attorney’s fees and costs based on judicial estoppel and remand the case to the trial court for further proceedings.

Reversed and remanded.

DAMOORGIAN and FORST, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

[1] We note that the case law from this and other districts after Grau contends that judicial estoppel has an element of misleading the other party on a factual matter upon which the other party relied. See Bueno, 20 So. 3d at 997 (“The elements of judicial estoppel are the same as equitable estoppel, with the added elements of successfully maintaining a position in one proceeding, while taking an inconsistent position in a later proceeding, in which the same parties and questions are involved.”) Fintak v. Fintak, 120 So. 3d 177, 186 (Fla. 2d DCA 2013) (holding that for judicial estoppel to apply, “the party claiming estoppel must have relied on or been misled by the former position” and “the party seeking estoppel must have changed his or her position to his or her detriment based on the representation”).

[2] In his reply brief, Anfriany raises issues regarding the lack of “evidence” to support the trial court’s decision and the burden of proof for judicial estoppel. However, because these two issues were never raised below or in the initial brief, we state no opinion on these issues. See United Auto. Ins. Co. v. Hollywood Injury Rehab Ctr., 27 So. 3d 743, 744 n.1 (Fla. 4th DCA 2010) (“That issue was not raised in this case until the filing of the reply brief. Matters argued for the first time therein will not be considered by the reviewing court.”).

 

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CORRUPTION | Consumer bureau reconsidering fine against Wells Fargo for mortgage fees: report

CORRUPTION | Consumer bureau reconsidering fine against Wells Fargo for mortgage fees: report

THE HILL-

The acting head of the Consumer Financial Protection Bureau (CFPB) is reportedly mulling whether to go ahead with a multimillion-dollar penalty for alleged mortgage fraud by Wells Fargo.

Reuters reported that the CFPB and Wells Fargo had been hashing out a settlement over the bank charging potentially more than 100,000 mortgage borrowers unnecessary fees to lock in low mortgage rates.

Acting CFPB Director Mick Mulvaney, the White House budget director, said last week he’d review each of the 14 pending enforcement actions left to him by former Director Richard Cordray.

[THE HILL]

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Green v. GREEN TREE SERVICING, LLC | FL 5DCA – the merger may not have established BAC’s standing even with the necessary evidence at trial. The merger involved BAC and CHL Servicing, LP, while the original note listed CHL, Inc., as the original lender. Neither Green Tree nor its witness explained the relationship between these two distinct entities

Green v. GREEN TREE SERVICING, LLC | FL 5DCA – the merger may not have established BAC’s standing even with the necessary evidence at trial. The merger involved BAC and CHL Servicing, LP, while the original note listed CHL, Inc., as the original lender. Neither Green Tree nor its witness explained the relationship between these two distinct entities

 

CHARLES GREEN, Appellant,
v.
GREEN TREE SERVICING, LLC, COUNTRYWIDE HOME LOANS, INC., CAPITAL ONE BANK (USA), N.A. F/K/A CAPITAL ONE BANK, CACV OF COLORADO, LLC, Appellees.

Case No. 5D15-4413.
District Court of Appeal of Florida, Fifth District.
Opinion filed December 1, 2017.
Appeal from the Circuit Court for Brevard County, Lisa Davidson, Judge.

Beau Bowin, of Bowin Law Group, Indialantic, for Appellant.

Brandon S. Vesely, of Albertelli Law, Tampa, for Appellee, Green Tree Servicing, LLC.

No Appearance for other Appellees.

WALLIS, Judge.

Charles Green (“Borrower”) appeals the trial court’s final foreclosure judgment in favor of Green Tree Servicing, LLC (“Green Tree”). Because Green Tree did not establish its standing to foreclose, we reverse and remand for the entry of an involuntary dismissal.

In 2004, Borrower executed and delivered a note and mortgage in favor of Countrywide Home Loans, Inc. (“CHL, Inc.”). In December 2009, BAC Home Loans Servicing, LP (“BAC”), f/k/a Countrywide Home Loans Servicing, LP (“CHL Servicing, LP”), filed a foreclosure complaint against Borrower, alleging a January 2009 default date. BAC also alleged its status as loan servicer and holder of the note. To the complaint, BAC attached an unindorsed copy of the note. Borrower answered the complaint, denying BAC’s ownership of the note, and asserted a lack of standing as an affirmative defense.

In 2012, the trial court granted BAC’s motion to substitute Bank of America, N.A., its successor by merger, as plaintiff. Then, in April 2014, the trial court granted Bank of America’s motion to substitute Green Tree as plaintiff, by virtue of assignment. In October 2014, Green Tree filed an amended complaint, once again alleging a January 2009 default date. In the amended complaint, Green Tree alleged its status as holder of the note and attached a copy of the note bearing an undated blank indorsement from CHL, Inc. In his answer, Borrower again raised BAC’s lack of standing.

At trial, Green Tree called Christopher Lee, a foreclosure mediation specialist for Ditech Financial, LLC (“Ditech”), “formerly known as Green Tree Servicing LLC.” The original note admitted into evidence at trial bore the same blank indorsement as the copy attached to the amended complaint. Lee testified that he had no knowledge of when CHL, Inc., indorsed the note, and provided no business records to indicate the date. Over Borrower’s objection, the trial court admitted several merger documents, including an August 2015 certificate of merger between Green Tree and Ditech. The certificate of merger provided that “[t]he surviving limited liability company is Green Tree Servicing LLC,” but then added that “[t]he name of the surviving limited liability company is hereby amended to Ditech Financial LLC.” Lee further testified that “Countrywide Home Loan Servicing was renamed BAC Home Loan Servicing” in April 2009, before the filing of the original complaint, but Green Tree presented no other evidence or testimony about any servicing agreements. After trial, the lower court entered final judgment of foreclosure for Green Tree.

“A crucial element in any mortgage foreclosure proceeding is that the party seeking foreclosure must demonstrate that it has standing to foreclose.” McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). We review a trial court’s decision as to this standing requirement de novo. See Elsman v. HSBC Bank USA, 182 So. 3d 770, 771 (Fla. 5th DCA 2015). “[A] person entitled to enforce the note and foreclose on a mortgage is the holder of the note, a non-holder in possession of the note who has the rights of a holder, or a person not in possession of the note who is entitled to enforce. . . .” Gorel v. Bank of N.Y. Mellon, 165 So. 3d 44, 46 (Fla 5th DCA 2015) (citing § 673.2011, Fla. Stat. (2013)). Generally, “a party’s standing is determined at the time the lawsuit was filed.” McLean, 79 So. 3d at 173. Here, BAC’s original complaint did not establish its holder status because it included only an unindorsed note payable to the original lender, CHL, Inc. Cf. § 671.201(21), Fla. Stat. (2015) (defining “holder” as “[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession”). Thus, Green Tree properly concedes that its subsequent filing of the indorsed note with the amended complaint and at trial did not retroactively establish BAC’s standing at the inception of the suit. See Walsh v. Bank of N.Y. Mellon Tr., 219 So. 3d 929, 930 (Fla. 5th DCA 2017).

Instead, Green Tree asserts that the merger between BAC and CHL Servicing, LP, established BAC’s standing at the time of filing the original complaint. “[I]n order to prove standing to foreclose based upon a merger, the surviving entity must prove that it `acquired all of [the absorbed entity’s] assets, including [the] note and mortgage, by virtue of the merger.'” Vogel v. Wells Fargo Bank, N.A., 192 So. 3d 714, 716 (Fla. 4th DCA 2016) (quoting Fiorito v. JP Morgan Chase Bank, Nat’l Ass’n, 174 So. 3d 519, 521 (Fla. 4th DCA 2015)). Here, like the witness in Vogel, Green Tree’s witness offered no explanation “as to why the copy of the note attached to the complaint . . . did not reflect the [i]ndorsements” and testified that he did not know when the blank indorsement was placed on the note. See id. at 716-17. Additionally, the witness testified primarily about Ditech’s receipt of Green Tree’s and BAC’s business records but failed to address the transfer of the note to BAC pursuant to the merger. Thus, Green Tree failed to demonstrate that BAC acquired standing based on the merger. See id.

Further, the merger may not have established BAC’s standing even with the necessary evidence at trial. The merger involved BAC and CHL Servicing, LP, while the original note listed CHL, Inc., as the original lender. Neither Green Tree nor its witness explained the relationship between these two distinct entities. Furthermore, throughout trial, Green Tree’s counsel improperly conflated the two by referring to both as “Countrywide Home Loans,” or simply “Countrywide.” See Wisman v. Nationstar Mortg., LLC, 42 Fla. L. Weekly D2251, D2252 (Fla. 5th DCA Oct. 20, 2017) (“While Nationstar claims that CHL Inc., CHL Servicing, LP and BAC are the same entity, its own evidence demonstrates otherwise. . . . [T]he evidence fails to show that CHL Inc. was affiliated with either CHL Servicing, LP or BAC.”). Thus, Green Tree unpersuasively argues that BAC acquired possession of the note by way of the merger with CHL Servicing, Inc., which never held the note. See Vogel, 192 So. 3d at 716. Only on appeal does Green Tree argue that CHL Servicing, LP, had standing as the original servicer. However, the servicer relationship alone does not demonstrate standing to foreclose. See Rodriguez v. Wells Fargo Bank, N.A., 178 So. 3d 62, 63 (Fla. 4th DCA 2015).

Because none of Green Tree’s purported predecessors had standing to foreclose at the inception of the case, the trial court erred by finding that Green Tree acquired standing to foreclose. See Corrigan v. Bank of Am., N.A., 189 So. 3d 187, 190 (Fla. 2d DCA 2016). Accordingly, we reverse and remand for entry of an involuntary dismissal. See Walsh, 219 So. 3d at 930.

REVERSED and REMANDED with Instructions.

COHEN, C.J. and SAWAYA, J., concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

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TFH 12/10 | Foreclosure Workshop #52: HSBC Bank USA v. Yamashita — Why Foreclosing Securitized Trust Plaintiffs Cannot Prove Entitlement To Foreclose

TFH 12/10 | Foreclosure Workshop #52: HSBC Bank USA v. Yamashita — Why Foreclosing Securitized Trust Plaintiffs Cannot Prove Entitlement To Foreclose

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 – December 10

 ———————
Foreclosure Workshop #52: HSBC Bank USA v. Yamashita — Why Foreclosing Securitized Trust Plaintiffs Cannot Prove Entitlement To Foreclose

 

 

 

 

For more than half a century this Nation’s courts have robotically with few exceptions favored lenders over homeowners in foreclosure litigation.

This has been especially true since the Mortgage Crisis of 2008.

Yet gradually judicial confidence in the veracity of pretender lenders’ foreclosing paperwork has been steadily diminishing, first as a result of robo-signing scandals initially exposed in Florida, and second, more recently due to observed, previously overlooked, overall deficiencies in loan servicers’ summary judgment declarations.

As more and more state judiciaries, now in the majority, are adopting the standing-at-inception rule discussed on prior shows, requiring proof of debt ownership when a foreclosure complaint is initially filed, foreclosure summary judgments are being reversed by state appellate courts in increasing numbers.

Every homeowner facing foreclosure needs to urgently know of these new developments and where necessary to bring these new precedents to the attention of their local judiciaries.

In Hawaii, for instance, my law firm has secured nine appellate reversals so far this year (over sixty in the past twenty years).

One such reversal occurred in the Yamashita Case just the other day, which Hawai’i Intermediate Court of Appeals decision, the lead in for this Sunday’s show, provides one of the best summaries yet of how to identify inherent deficiencies in loan servicer moving declarations.

Yamashita also provides us with a convenient fact pattern for further elaboration on our Sunday show regarding the entire range of such deficiencies found in virtually every securitized trust foreclosure case in addition to those discussed in Yamashita.

And beyond mere appellate reversals based on robo-signing and now broader deficiencies found in loan servicer declarations, a third trend is inevitably starting to emerge, holding those submitting such false paperwork in court criminally liable. What took so long?

Listen to this Sunday’s show and learn for example also about this newest trend, sure to accelerate, how two Miami-Dade Circuit Court Judges — Judges Beatrice Butchko and Pedro Echarte Jr. — are seeking to hold foreclosure attorneys in criminal contempt for withholding critical information pertaining to their loan servicer’s actual “boarding” process explaining how the records of previous loan servicers are actually added to successor loan servicer’s records contrary to how the boarding process is falsely portrayed in court.

Exposing the evidentiary inadequacy of the so-called boarding process could defeat every securitized trust foreclosure in the United States, it is that central to a foreclosing securitized trust plaintiff’s burden of proof.

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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Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

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The Foreclosure Hour 12

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End of an era: Foreclosure giant RCO Legal to close its doors for good

End of an era: Foreclosure giant RCO Legal to close its doors for good

Oregon Live-

RCO Legal, once one of the largest foreclosure law firms in the Northwest, is shutting down permanently in December, a victim of the strong economy and housing market.

Joshua Schaer, an RCO lawyer, informed a federal judge of the pending shutdown in a Dec. 4 court filing. “RCO Legal is closing all offices in Washington and nationwide, and (my) employment with RCO Legal will be terminated as of December 12, 2017,” Schaer wrote.

The pending closure comes barely a month after the U.S. Justice Department accused Northwest Trustee Services, RCO’s controversial parent company, of illegally foreclosing against 28 veterans.

[OREGON LIVE]

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HSBC Bank USA v. Yamashita | ICA Hawaii – HSBC Failed to Demonstrate it Was in Possession of the Note and Allonge at the Time This Action Was Commenced, Motion for Default & SJ Vacated

HSBC Bank USA v. Yamashita | ICA Hawaii – HSBC Failed to Demonstrate it Was in Possession of the Note and Allonge at the Time This Action Was Commenced, Motion for Default & SJ Vacated

CAAP-17-0000026sdo by DinSFLA on Scribd

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U.S. homelessness up – first time in 7 years

U.S. homelessness up – first time in 7 years

Florida Realtors-

The nation’s homeless population increased this year for the first time since 2010, driven by a surge in the number of people living on the streets in Los Angeles and other West Coast cities.

The U.S. Department of Housing and Urban Development (HUD) released its annual Point in Time count Wednesday, a report that showed nearly 554,000 homeless people across the country during local tallies conducted in January. That figure is up nearly 1 percent from 2016.

Of that total, 193,000 people had no access to nightly shelter and instead were staying in vehicles, tents, the streets and other places considered uninhabitable. The unsheltered figure is up by more than 9 percent compared to two years ago.

[FLORIDA REALTORS]

image: cbn.com

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Anonymous donor helps evicted East Oakland woman buy back home

Anonymous donor helps evicted East Oakland woman buy back home

San Francisco Chronicle-

Last March, Dorothy DeBose was given 10 minutes to clear her belongings out of the home she lived in for most of her life.

The 76-year-old retired phone company employee was evicted from the East Oakland house her mother had left her after she fell behind on loan payments, a victim of predatory lending. I wrote several columns about DeBose and her attempts to buy back her house from the property management firm that had acquired it in a foreclosure auction.

Things weren’t looking good a few months ago until a generous Chronicle reader stepped in to help DeBose get her home back. The reader gave DeBose and her nephew, Omar Taylor, the downpayment they needed to buy back the home: $120,000.

[SAN FRANCISCO CHRONICLE]

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California wants to suspend or take away Wells Fargo’s insurance license over sales

California wants to suspend or take away Wells Fargo’s insurance license over sales

CNBC-

California’s insurance regulator wants to suspend or take away Wells Fargo‘s insurance license for sales practices related to the bank’s online referral program that it says were improper.

About 1,500 unauthorized policies were opened on behalf of customers, many without their knowing, through the program, according to California, which filed the accusation against Wells Fargo last week.

The sales concerned renter’s insurance policies and term life policies offered by four different insurers through a referral program Wells offered in its branches.

[CNBC]

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Did Russia Buy Trump’s Debt? Deutsche Bank hands bank records of Trump affiliates to Robert Mueller

Did Russia Buy Trump’s Debt? Deutsche Bank hands bank records of Trump affiliates to Robert Mueller

The Guardian-

Deutsche Bank has provided Robert Mueller with bank records of affiliates of US president Donald Trump as part of the special counsel’s investigation into whether the Kremlin conspired with the Trump campaign during the 2016 election.

A person close to the bank told the Guardian that Deutsche Bank received a subpoena for documents several weeks ago but that the subpoena did not directly target Trump. Bloomberg and other media outlets said the subpoena related to people who were “affiliated” with the president.

News outlets had reported on Tuesday that the subpoena specifically targeted Trump and his family, and that Deutsche Bank – which is Trump’s biggest lender – had begun to comply with the request. Several of those news outlets changed their stories on Wednesday, and said the subpoena targeted people who had links to the president.

[THE GUARDIAN]

image: Columbus Free Press

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America’s Foreclosure King Deutsche Bank Subpoenaed By Mueller for Trump Records

America’s Foreclosure King Deutsche Bank Subpoenaed By Mueller for Trump Records

Bloomberg-

Special prosecutor Robert Mueller zeroed in on President Donald Trump’s business dealings with Deutsche Bank AG as his investigation into alleged Russian meddling in U.S. elections widens.

 Mueller issued a subpoena to Germany’s largest lender several weeks ago, forcing the bank to submit documents on its relationship with Trump and his family, according to a person briefed on the matter, who asked not to be identified because the action has not been announced.

“Deutsche Bank always cooperates with investigating authorities in all countries,” the lender said in a statement to Bloomberg Tuesday, declining to provide additional information.

[BLOOMBERG]

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Russell v. BAC HOME LOANS SERVICING, LP | FL 4DCA- a genuine issue of material fact existed as to standing at the inception of the action because the endorsement on the note attached to the complaint was different than the endorsements on the original note filed with the court.

Russell v. BAC HOME LOANS SERVICING, LP | FL 4DCA- a genuine issue of material fact existed as to standing at the inception of the action because the endorsement on the note attached to the complaint was different than the endorsements on the original note filed with the court.

 

LESLINE RUSSELL, Appellant,
v.
BAC HOME LOANS SERVICING, LP f/k/a COUNTRYWIDE HOME LOANS SERVICING LP, Appellee.

No. 4D16-3908.
District Court of Appeal of Florida, Fourth District.
November 29, 2017.
Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; L.T. Case No. CACE10-21416; Joel T. Lazarus, Judge. (28).

Jay L. Farrow of Farrow Law, P.A., Davie, for appellant.

Nancy M. Wallace of Akerman LLP, Tallahassee, and William P. Heller and Henry H. Bolz of Akerman LLP, Fort Lauderdale, for appellee.

LEVINE, J.

Appellant appeals a final judgment of foreclosure following summary judgment. Appellant argues that a genuine issue of material fact existed as to standing at the inception of the action because the endorsement on the note attached to the complaint was different than the endorsements on the original note filed with the court. We agree that a genuine issue of material fact existed and therefore we reverse.

BAC Home Loans Servicing[1] filed a complaint for mortgage foreclosure against appellant. A copy of the note attached to the complaint contained an undated endorsement in blank by Q Lending, the lender named in the note. A copy of the note attached to the amended complaint contained an undated specific endorsement by Q Lending to Taylor, Bean & Whitaker Mortgage Corp. as well as an undated endorsement in blank by Taylor, Bean & Whitaker.

Appellant filed an answer and affirmative defenses, raising lack of standing and pointing out the discrepancy in the endorsements.

Carrington Mortgage Services, LLC, was substituted as party plaintiff and moved for summary judgment. In support of its motion, Carrington submitted an affidavit from its assistant vice president stating that Bank of America had physical possession of the note endorsed in blank by Taylor, Bean & Whitaker as of May 19, 2010, the date the foreclosure action was filed. A screenshot accompanying the affidavit showed that Bank of America received the note on September 26, 2009. A second screenshot purported to show that the version of the note with two endorsements was scanned into Bank of America’s system on December 18, 2009.

The trial court granted summary judgment and entered a final judgment in favor of Carrington.

Whether a party has standing to bring an action is reviewed de novo. Boyd v. Wells Fargo Bank, N.A., 143 So. 3d 1128, 1129 (Fla. 4th DCA 2014). An order granting summary judgment is also reviewed de novo. Craven v. TRG-Boynton Beach, Ltd.,925 So. 2d 476, 479 (Fla. 4th DCA 2006).

“[A] party moving for summary judgment must show conclusively the absence of any genuine issue of material fact, and the court must draw every possible inference in favor of the party against whom a summary judgment is sought.” Id. at 479-80. “The burden is initially on the movant. Only where the movant tenders competent evidence in support of his motion does the burden shift to the other party to come forward with opposing evidence.” Id. at 480.

“[S]ummary judgment should not be granted unless the facts are so crystallized that nothing remains but questions of law.” Id. If the evidence is conflicting, permits different reasonable inferences, or tends to prove the issues, it should be submitted to the trier of fact. Darwiche v. Bank of N.Y. Mellon, 185 So. 3d 1261, 1262 (Fla. 4th DCA 2016). “If the `slightest doubt’ exists, then summary judgment must be reversed.” Id. (citation omitted).

“A crucial element in any mortgage foreclosure proceeding is that the party seeking foreclosure must demonstrate that it has standing to foreclose” at the time the complaint is filed. McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012). “[S]tanding may be established from a plaintiff’s status as the note holder, regardless of any recorded assignments.” Id. “If the note does not name the plaintiff as the payee, the note must bear a special endorsement in favor of the plaintiff or a blank endorsement. Alternatively, the plaintiff may submit evidence of an assignment from the payee to the plaintiff or an affidavit of ownership to prove its status as a holder of the note.” Id. (citations omitted). “[I]f the plaintiff relies upon an affidavit of ownership to prove its status as a holder of the note on the date the lawsuit was filed, it is sufficient if the body of the affidavit indicates that the plaintiff was the owner of the note and mortgage before suit was filed.” Id. at 174.

BAC’s possession of the endorsed note was insufficient to conclusively establish standing at the time BAC filed the complaint. The copy of the note attached to the original complaint contained an undated endorsement in blank by Q Landing. However, the copy of the note attached to the amended complaint, as well as the original note, contained an undated specific endorsement by Q Lending to Taylor, Bean & Whitaker who, in turn, executed an endorsement in blank. Because only the holder of a note may convert a blank endorsement to a special endorsement, this suggests that Taylor, Bean & Whitaker—and not BAC—possessed the original note at the time BAC filed the complaint and that Taylor, Bean & Whitaker executed a special endorsement as the holder of the note after BAC filed the complaint. See § 678.3041, Fla. Stat. (2016) (“A holder may convert a blank indorsement to a special indorsement.”).

Additionally, the affidavit was insufficient to establish BAC’s standing. Floyd v. Bank of America, N.A., 194 So. 3d 1071 (Fla. 5th DCA 2016), is instructive. In Floyd, the Fifth District found that the bank’s affidavit was insufficient to establish standing because it did not resolve all the material issues in the case. The affidavit in Floyd did not offer any explanation of why a blank endorsement appeared on the note filed at the hearing but not on the copy filed with the complaint. Therefore, a material issue remained as to when the note was endorsed and how the bank obtained standing.

Similarly, the affidavit in the instant case did not resolve the inconsistency between the copy of the note attached to the original complaint and the note attached to the amended complaint and filed with the court in support of summary judgment. The affidavit did not offer any explanation as to why a blank endorsement by Taylor, Bean & Whitaker Mortgage Corp. appeared on the note filed in support of summary judgment but a blank endorsement by Q Lending appeared on the copy of the note filed with the original complaint. Like in Floyd, a material issue remained as to when the note was endorsed and how BAC obtained standing.

In sum, a genuine issue of material fact remained as to whether BAC had standing when it filed the complaint. As such, we reverse the entry of summary judgment and remand for further proceedings.

Reversed and remanded for further proceedings.

FORST and KUNTZ, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

[1] BAC later merged into Bank of America, N.A.

 

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Report: Wells Fargo may face more federal sanctions over insurance, mortgage practices

Report: Wells Fargo may face more federal sanctions over insurance, mortgage practices

LA Times-

Wells Fargo & Co. may face new sanctions from a key federal regulator over bad practices the bank has copped to over the last several months, including forcing auto loan customers into unneeded insurance policies and charging improper fees on some mortgage borrowers, according to a news report.

The Wall Street Journal reported Wednesday that the Office of the Comptroller of the Currency, one of the regulators that last year fined Wells Fargo for its creation of sham bank accounts, has advised the San Francisco bank’s board that it may face a new formal reprimand for willingly harming customers and failing to correct problems in its mortgage and auto-lending businesses.

The report, which cited unnamed sources familiar with the matter, suggested the OCC may issue a cease-and-desist order, a regulatory action that demands a bank stop certain practices and take corrective action.

[LA TIMES]

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TFH 12/3 | Foreclosure Workshop #51: Robinson v. Mortgage Electronic Registration Systems — Understanding MERS as the Rubik’s Cube of American Mortgage Law

TFH 12/3 | Foreclosure Workshop #51: Robinson v. Mortgage Electronic Registration Systems — Understanding MERS as the Rubik’s Cube of American Mortgage Law

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 – December 3

 ———————
Foreclosure Workshop #51: Robinson v. Mortgage Electronic Registration Systems — Understanding MERS as the Rubik’s Cube of American Mortgage Law

 

 

 

Listeners to the Foreclosure Hour are familiar with the manner in which MERS has baffled our legal system for most of the past two decades since its artificial creation, reportedly formed in the Washington D.C. law offices of Covington & Burling.

Incorporated originally by Fannie Mae and Freddie Mac, the Big Banks, and one large title company, its purported original purpose was to expedite with cost savings the tracking of the securitized buying and selling and slicing and dicing of ownership interests in mortgages in the United States.

In reality, however, MERS evolved into a blatant attempt in part to nullify the Tenth Amendment to the United States Constitution by substituting a quasi-federal government sponsored private mortgage recording system in place of the historical control of the tracking of land titles and ownership in real property by States through their individual recording offices.

And for many reasons, reviewed on several of our past shows, MERS became in reality an unregulated underground network composed of a proliferation of white collar thieves and robo-signers covering up their fraudulent activities through false record keeping, which at first went largely unnoticed by state and federal judges.

Increasingly, however, legal challenges to MERS began to unravel that Rubik’s Cube, as it were, which recently reached a new legal plateau in the case of Robinson v. Mortgage Electronic Registration Systems, which MERS dispute went from the Los Angeles County Superior Court to the United States District Court for the Central District of California to the United States Court of Appeals for the Ninth Circuit to the United States Supreme Court.

We are grateful to have live on our radio show today Dan Robinson and his attorney Al West, who will provide us with their firsthand experiences challenging in court the legal and constitutional standing of MERS, and lessons learned.

Additionally, John and I will offer our own suggestions concerning how the American Legal System can learn and profit by their experiences.

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

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The Foreclosure Hour 12

image: FT

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Homeowners blast Southfield over foreclosures, city says they didn’t pay taxes

Homeowners blast Southfield over foreclosures, city says they didn’t pay taxes

WXYZ-

A group of Southfield homeowners are about to lose their homes and they believe they’re being targeted by the city’s greed.

The mayor of Southfield told 7 Action News it all comes down to paying taxes. Oakland County can foreclose on a home if residents don’t pay property taxes for three years in a row.

One of the Southfield homeowners, Louis Jackson, said he fell on hard times and tried to stay on track.

“I went through not only a bankruptcy but a loss of a job and was working with an organization called step forward because I had gotten behind on my taxes and was in a payment plan,” said Jackson.

[WXYZ]

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Quicken Loans aims to help 65,000 Detroit households avoid tax foreclosure

Quicken Loans aims to help 65,000 Detroit households avoid tax foreclosure

Metro Times-

This fall, about two thousand Detroit families and households lost the roofs over their heads due to tax foreclosure.

This occurred for a variety of reasons, but in most cases, the people put out were renters with irresponsible landlords who hadn’t paid their tax bills. In other instances, low-income homeowners who would have been eligible for tax exemptions lost their homes because they weren’t aware of the help available or hadn’t properly filled out the sometimes complicated forms required to get it.

Whatever the cause, it was a continuation of the status quo: Since 2009, Wayne County has foreclosed on an estimated one in four Detroit properties.

[METRO TIMES]

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Casting Wall Street as Victim, Trump Leads Deregulatory Charge

Casting Wall Street as Victim, Trump Leads Deregulatory Charge

NYT-

A decade after the financial crisis, the federal government is easing up its policing of Wall Street and the banking industry, even without actually repealing broad swaths of regulation.

The public battle over who will serve as the acting director of the Consumer Financial Protection Bureau — with the White House trying to install Mick Mulvaney, a staunch opponent of the agency — is the most recent example of the banker-friendly approach that has gripped Washington. Less visible are the subtle but steady efforts at the White House, in federal agencies and on Capitol Hill to lessen the regulatory burden on banks and financial firms since President Trump took office.

At the Treasury Department, officials are trying to make it easier for financial firms to avoid being tagged as “too big to fail,” a designation that subjects them to greater oversight. A major banking regulator, the Office of the Comptroller of the Currency, has become more forgiving of big banks when it comes to enforcing laws. And the Securities and Exchange Commission is reining in the power of regional directors to issue subpoenas.

[NEW YORK TIMES]

image: Crooks & Liars

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Make No Mistake, the Business Model Is Fraud

Make No Mistake, the Business Model Is Fraud

Esquire-

At this point, if you told me that Wells Fargo was running dope out of Marseilles, and responsible for the unsolved murder of Roger Rabbit, I’d probably believe you. Seriously, this latest malfeasance alleged against the company, as reported by The Wall Street Journal and relayed to the shebeen via The New York Daily News, is further proof that this particular respected financial institution is about three fedoras short of being the Gambino family.

The bank overcharged their corporate clients on foreign exchanges and levied hefty transactions fees through ingrained practices that rewarded employees for raking in the cash, according to a Wall Street Journal report. If the companies questioned why the foreign exchange rates were higher than the ones they were initially offered by the bank, employees would simply chalk it up to the “time fluctuation,” saying the market rate changed by the time the transaction was executed, one former manager said. Companies were also charged unusually high fees for currency conversions — which employees blamed on the bank’s “automated” computer system.

Oh, come on. This is what a middle-schooler tells the teacher when a term paper is late.

[ESQUIRE]

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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/

###
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.

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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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