This is a WTF moment… So if you know there is deceptive practices happening, then why not DO something about it? What is a freakin warning? Just like the warnings about foreclosure fraud, just sit and watch as it happens!!
HW-
The Federal Housing Administration continues trying to refine its policies and procedures on Home Equity Conversion Mortgages for lenders, the goal of which is to ensure more vulnerable senior borrowers aren’t confused or mislead in the loan process.
Lenders in the HECM program must certain older borrowers are fully informed of all their options when applying for reverse mortgages, and underscored the agency’s prohibition against misleading or deceptive advertising.
“Senior borrowers deserve freedom of choice when considering whether a reverse mortgage is appropriate for them,” said FHA Commissioner Carol Galante. “This guidance is intended to make sure lenders know we’re keeping a watchful eye on their marketing and advertising practices that might steer borrowers toward reverse mortgage options that limit their available choices.”
On the eve of the financial crisis, the hedge fund manager Bruce M. Rose did a surprising deal that took his firm into the business of collecting mortgage payments from people with tainted credit.
Now, seven years later, securities regulators are scrutinizing the deal, looking in particular at how part of it was financed.
The Securities and Exchange Commission last fall began to subpoena documents from Mr. Rose’s Carrington Holding Company about the purchase of mortgage servicing operations from the failed subprime lender New Century Financial, according to regulatory filings. The previously unreported investigation is seeking information about how Carrington financed the $188 million deal, which relied in part on the firm’s later issuing special securities to the investors in its hedge fund.
Company Also Ordered to Pay $10 Million for Servicing Misconduct and Fined $418 Million by the DOJ
WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB), Department of Justice (DOJ), Department of Housing and Urban Development (HUD), and attorneys general in 49 states and the District of Columbia filed a proposed federal court order requiring SunTrust Mortgage, Inc. to provide $500 million in loss-mitigation relief to underwater borrowers. The order also requires SunTrust to pay $40 million to approximately 48,000 consumers who lost their homes to foreclosure and $10 million to the federal government. The order addresses systemic mortgage servicing misconduct, including robo-signing and illegal foreclosure practices. SunTrust must also pay a $418 million penalty, in a parallel mortgage lending filing announced by DOJ today.
“Deceptive and illegal mortgage servicing practices have pushed families into foreclosure and devastated communities across the nation,” said CFPB Director Richard Cordray. “Today’s action will help homeowners and consumers harmed by SunTrust’s unlawful foreclosure practices. The Consumer Bureau will continue to investigate mortgage servicers that mistreat consumers, and we will not hesitate to take action against any company that violates our new servicing rules.”
SunTrust is a mortgage lender and servicer headquartered in Richmond, Va., and is a wholly-owned subsidiary of Atlanta-based SunTrust Banks, Inc. As a mortgage servicer, it is responsible for collecting payments from the mortgage borrower on behalf of the owner of the loan. It handles customer service, collections, loan modifications, and foreclosures.
The CFPB, DOJ, HUD, and state attorneys general uncovered substantial evidence that SunTrust was engaged in systemic mortgage servicing misconduct. According to the complaint filed in the federal district court in the District of Columbia, SunTrust’s illegal practices put thousands of people at risk of losing their homes. Specifically, the complaint alleges that SunTrust:
Took advantage of homeowners with servicing shortcuts and unauthorized fees: SunTrust failed to promptly and accurately apply payments made by borrowers, and charged unauthorized fees for default-related services.
Deceived homeowners about foreclosure alternatives and improperly denied loan modifications: SunTrust failed to provide accurate information about loan modification and other loss-mitigation services, failed to properly process borrowers’ applications and calculate their eligibility for loan modifications, and provided false or misleading reasons for denying loan modifications.
Engaged in illegal foreclosure practices: SunTrust provided false or misleading information to consumers about the status of foreclosure proceedings where the borrower was in good faith actively pursuing a loss mitigation alternative also offered by SunTrust. The company also robo-signed foreclosure documents, including preparing and filing affidavits whose signers had not actually reviewed any information to verify the claims.
Enforcement action
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive, or abusive practices. Today’s proposed court order, filed in federal district court in the District of Columbia, would require SunTrust to correct their practices and provide relief to harmed consumers. Under the terms of the order, SunTrust must:
Provide at least $500 million in relief to underwater borrowers: Over a three-year period, SunTrust must provide more than $500 million in loss mitigation relief to consumers, including reducing the principal on mortgages for borrowers who are at risk of default and reducing mortgage interest rates for homeowners who are current but underwater on their mortgages. If SunTrust fails to meet this requirement, it must pay a cash penalty equal to at least 125 percent of the shortfall.
Provide $40 million in refunds to foreclosure victims: SunTrust must refund $40 million to consumers whose loans it serviced who lost their homes to foreclosure between Jan. 1, 2008 to Dec. 31, 2013. All consumers who submit valid claims will receive an equal share of the $40 million. Borrowers who receive payments will not have to release any claims and will be free to seek additional relief in the courts. Eligible consumers can expect to hear from the settlement administrator about potential payments later this year.
Pay $10 million to the federal government: SunTrust must pay $10 million to cover losses it caused to the Federal Housing Administration, Department of Veterans Affairs, and the Rural Housing Service.
Homeowner protections: Today’s order will require SunTrust to establish additional homeowner protections, including protections for consumers in bankruptcy. Like other servicers, SunTrust is subject to the CFPB’s new mortgage servicing rules that took effect on January 10, 2014. The agreement only covers SunTrust’s violations before the new rules took effect, and does not prevent the CFPB from pursuing civil enforcement actions against SunTrust for violations of these rules.
The complaint is not a finding or ruling that the defendants have actually violated the law. The proposed federal court order will have the full force of law only when signed by the presiding judge.
The settlement administrator will be in touch with eligible consumers who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2013. Consumers who are interested in loss mitigation should contact SunTrust at 1-800-634-7928 or by email through the SunTrust Mortgage, Inc. support page at SunTrustMortgage.com.
Mortgage Servicer to Provide $3 Million in Relief to Homeowners
BOSTON – The nation’s fourth largest mortgage servicer has agreed to pay Massachusetts a total of $3.7 million to resolve claims that it failed to provide certain notices to homeowners as required by state law and that it unlawfully foreclosed on certain properties, Attorney General Martha Coakley announced today.
The assurance of discontinuance, filed in Suffolk Superior Court, alleges that the national loan servicer failed to follow Massachusetts law for notices and mortgage assignments in the handling of certain mortgage loans. This included failures to send state-mandated notices to homeowners in default, and failures to execute proper mortgage assignments, filed in the Massachusetts Registry of Deeds, as required by Massachusetts statutes. In addition, Litton Home Servicing Limited Partnership (Litton), a company acquired by Ocwen, allegedly initiated foreclosures when it did not hold the actual mortgages in violation of Massachusetts law.
“Massachusetts homeowners faced unnecessary challenges due to these companies failure to provide proper notices and by initiating illegal foreclosures,” AG Coakley said. “This agreement provides for direct relief for affected borrowers and requires that Ocwen undertake efforts to repair problem titles in the Commonwealth.”
The AG’s Office alleges that Litton’s unlawful conduct resulted in void foreclosures affecting the marketability and insurability of the titles. The Supreme Judicial Court ruled in the Ibanez decision that mortgagees must strictly comply with Massachusetts foreclosure laws. Under the statutory power of sale, a bank or other foreclosing party must be the mortgagee of record, or hold the mortgage through a valid assignment, prior to the publication of the notice of foreclosure sale, or the foreclosure will be void.
Under the terms of the settlement, $3 million will be paid to Massachusetts homeowners, and $700,000 will be paid to the Commonwealth.
Also as part of the agreement, Ocwen is required to properly execute documents filed in connection with foreclosure proceedings, and mail notices to residents that are in compliance with applicable statutes and regulations.
In December, Ocwen Financial Corporation of Atlanta, Georgia, its subsidiary, Ocwen Loan Servicing LLC, and two companies it purchased, Litton and Homeward Residential Holdings LLC, entered into a $2.1 billion national settlement resulting in an estimated $80 million in principal reduction and cash payments to Massachusetts homeowners. The national settlement resolved claims of loan servicing misconduct and so-called “robo-signing” claims. Massachusetts homeowners will also receive approximately $1.5 million in cash payments from that multistate agreement.
The National Mortgage Settlement, an agreement announced in February 2012, involving the nation’s five largest mortgage servicers and their connection with unlawful foreclosures and loan servicing has so far provided more than $63 billion in relief to distressed homeowners and created significant new servicing standards, which Ocwen must follow. The settlement brought more than $300 million in relief to Massachusetts borrowers, including a direct payment of more than $44.5 million to the Commonwealth, used in part to establish the AG’s HomeCorps program and offer grants aimed at helping to mitigate the impact of the foreclosure crisis.
This matter was handled by Assistant Attorneys General Amber Anderson Villa, Justin Lowe, and Stephanie Kahn of Attorney General Martha Coakley’s Consumer Protection Division, and Assistant Attorneys General Glenn Kaplan and Peter Leight of AG Coakley’s Insurance & Financial Services Division and paralegal Erica Harmon, also of the Insurance & Financial Services Division.
Louisiana parishes and Texas counties have urged the U.S. Supreme Court to revive their Racketeer Influenced and Corrupt Organizations Act suits accusing banks of defrauding them, alleging in a filing made available Monday that they were injured by the banks’ use of Mortgage Electronic Registration System Inc., a database of residential mortgage servicer information, to avoid paying local recording fees.
The county and parish land recorders argued in a petition for a writ of certiorari filed June 2 that the Fifth Circuit erroneously held they didn’t…
JPMorgan Chase & Co has been sued by the city of Miami, accusing the bank of predatory mortgage lending in minority neighborhoods that allegedly caused a wave of foreclosures during the last decade’s housing crisis.
The lawsuit, filed on Friday in federal court in Florida, said the country’s largest bank engaged in a continuous practice of discriminatory mortgage lending since at least 2004, violating the U.S. Fair Housing Act.
After issuing high-cost loans to minorities in the years before the housing crisis, JPMorgan later refused to refinance the loans on the same terms as it extended to whites, leading to defaults and foreclosures, the complaint said.
On June 13, 2014, Snohomish County Superior Court Judge George Bowden signed an order after an unlawful detainer trial (which does not involve quiet title) that invalidated the Trustee’s Deed recorded in 2012; denied the Beneficiary/purchaser possession; and, awarded statutory costs and attorney fees to the homeowner.
The Judge found that the assignment of the Beneficial interest to Nationstar by MERS was invalid because MERS never held the note and even if it did, it had already conveyed it to Wells Fargo. He then went on to hold the appointment of QLS as successor Trustee was invalid because Nationstar lacked authority to make the appointment.
That however is only the beginning of the Court rulings. The Judge also found that QLS could not rely on the declaration by Nationstar (prepared by QLS in its normal business practice) which declared Nationstar was the note holder because QLS had breached its statutory duty of good faith and fair dealing owed to the debtor.
The Court did not stop there. The Plaintiff argued the DTA barred the Debtor from making a claim to title because he had not attempted to restrain the sale. The Court ruled that failure of QLS to materially comply with requisites requirements of the DTA resulted in the DTA not applying at all so the issue of waiver was not reached.
The homeowner was successfully represented by John Long and Brett Masch of the Law Firm of John A Long in Issaquah The case name is The Federal National Mortgage Association vs. Brevick, Snohomish County Superior Court Case # 12-2-05605 and is attached along with the Court’s oral ruling.
Attached is a copy of the signed Findings, Conclusions and Order along with a copy of the transcript of the Court’s oral ruling.
A law firm that specialized in foreclosing on Massachusetts homeowners is facing eviction from its Woburn offices.
According to a Mass Lawyers Weekly investigation, Connolly, Geaney, Ablitt & Willard has failed to pay rent, stopped paying insurance premiums, and bounced checks in the past few months. Aside from the eviction, employees lost their health insurance coverage, according to the investigation.
Steven Ablitt, who told Lawyers Weekly he was no longer involved in the day-to-day operations of the firm despite company records listing him as an owner, denied many of the details uncovered in the investigation.
Disbarred Plantation foreclosure attorney David J. Stern has settled a lawsuit brought by the Chinese company that bought his back-office company operations for $60 million cash.
The confidential settlement was announced Tuesday in Broward Circuit Court, according to court filings.
DJSP Enteprises Inc., Chardan 2008 China Acquisition Group Corp. and DJS Processing LLC sued Stern in 2012, alleging he made fraudulent misrepresentations when selling exclusive rights to his back-office and foreclosure processing operations to the Chinese companies in 2010.
FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
IN RE: MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,
JONATHAN E. ROBINSON; SALLY J. ROBINSON-BURKE; ROSA A. SILVAS; JOSEPHA S. LOPEZ; JOSE TRINIDAD CASAS; MARIA C. CASAS; LYNDON B. GRAVES; TYRONE EVENSON; MICHELLINA EVENSON; BRYAN GRAY, [for complete list of plaintiff/appellants, see Notice of Appeal]; PABLO LEON, Plaintiffs-Appellants, v. AMERICAN HOME MORTGAGE SERVICING, INC.; AMERICA’S SERVICING COMPANY; AMERICA’S WHOLESALE LENDER; AURORA LOAN SERVICES, LLC; AZTEC FORECLOSURE CORP.; BAC HOME LOANS SERVICING LP; BANK OF AMERICA, NA; BANK OF NEW YORK MELLON; CALIFORNIA RECONVEYANCE CO.; CENTRAL MORTGAGE CO.; COOPER CASTLE LAW FIRM LLP; CR TITLE SERVICES, INC.; DEUTSCHE BANK; EXECUTIVE TRUSTEE SERVICES, LLC; FEDERAL HOME LOAN MORTGAGE CORPORATION; FEDERAL HOUSING FINANCE AGENCY; FEDERAL NATIONAL MORTGAGE ASSOCIATION; FIDELITY NATIONAL TITLE INSURANCE CO.; FIRST AMERICAN LOAN STAR TRUSTEE SERVICES, LLC; FIRST HORIZON HOME LOAN CORP.; G.E. MONEY BANK; GMAC MORTGAGE, LLC; HOUSEKEY FINANCIAL CORP.; HSBC MORTGAGE CORPORATION, USA; HSBC MORTGAGE SERVICES, INC.; HSBC BANK, U.S.A., N.A.; IB PROPERTY HOLDINGS; JPMORGAN CHASE BANK; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; MERSCORP, INC.; MORTGAGE IT, INC.; MTC FINANCIAL, INC., DBA Trustee Corps.; NATIONAL CITY MORTGAGE; PNC FINANCIAL SERVICES GROUP, INC.; NATIONAL DEFAULT SERVICING CORP.; NDEX WEST LLC; OLD REPUBLIC NATIONAL TITLE INSURANCE CO.; QUALITY LOAN SERVICE CORPORATION; RECONTRUST COMPANY; SAXON MORTGAGE, INC.; T.D. SERVICE COMPANY; UTLS DEFAULT SERVICES, LLC; WELLS FARGO BANK, NA; WESTERN PROGRESSIVE TRUSTEE, LLC; CITYMORTGAGE, INC.; LIME FINANCIAL SERVICES LIMITED, Defendants – Appellees.
Excerpt:
Fourth, the MDL Court held that appellants had not pleaded their robosigning claims with sufficient particularity to satisfy Federal Rule of Civil Procedure 8(a). We disagree. Section 33-420 characterizes as false, and therefore actionable, a document that is “forged, groundless, contains a material misstatement or false claim or is otherwise invalid.” Ariz. Rev. Stat. §§ 33-420(A), (B) (emphasis added). The CAC alleges that the documents at issue are invalid because they are “robosigned (forged).” The CAC specifically identifies numerous allegedly forged documents. For example, the CAC alleges that notice of the trustee’s sale of the property of Thomas and Laurie Bilyea was “notarized in blank prior to being signed on behalf of Michael A. Bosco, and the party that is represented to have signed the document, Michael A. Bosco, did not sign the document, and the party that did sign the document had no personal knowledge of any of the facts set forth in the notice.” Further, the CAC alleges that the document substituting a trustee under the deed of trust for the property of Nicholas DeBaggis “was notarized in blank prior to being signed on behalf of U.S. Bank National Association, and the party that is represented to have signed the document, Mark S. Bosco, did not sign the document.” Still further, the CAC also alleges that Jim Montes, who purportedly signed the substitution of trustee for the property of Milan Stejic had, on the same day, “signed and recorded, with differing signatures, numerous Substitutions of Trustee in the Maricopa County Recorder’s Office . . . . Many of the signatures appear visibly different than one another.” These and similar allegations in the CAC “plausibly suggest an entitlement to relief,” Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009), and provide the defendants fair notice as to the nature of appellants’ claims against them, Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).
We therefore reverse the MDL Court’s dismissal of Count I.
U.S. Bank National Association AS TRUSTEE FOR RASC 2005-EMX4, Plaintiff,
against
Kristine H. McCrory, MICHAEL P. McCRORY, et al., Defendant.
13-539 Julie A. Campbell, J.
Plaintiff U.S. Bank National Association as Trustee for RASC 2005-EMX4 commenced this action for foreclosure.
In 2010 U.S. National Bank Association commenced a foreclosure action against these same defendants with respect to the same real property. That action was dismissed based on plaintiff’s lack of good faith during the settlement process [see Order and Decision, Index No. 10-001; RJI No. 2010-0060-C, copy attached]. In the dismissal order the court outlined a long succession of missteps by plaintiff taking place over a period of a year. The court found that plaintiff had made misrepresentations to the court and to the defendants; that plaintiff had reneged on modification offers after accepting defendants’ good faith payments; that plaintiff repeatedly violated both the statute and this court’s orders, and failed to provide documentation requested by the court. In short, the court found egregious behavior amounting to lack of good faith.
The order of dismissal contained the following provisions:
ORDERED, that in the event plaintiff commences a new action in [*2]foreclosure with respect to Kristine McCrory and the premises at issue herein, no additional costs or attorney fees will be allowed, absent good cause shown, and it is further
ORDERED, that a copy of the Order and Judgment of Dismissal shall be attached to the original pleadings in any such subsequent action in foreclosure and shall be specifically referenced in the body thereof.
That order was never appealed and remains the law of the case.
On November 12, 2013, plaintiff commenced this foreclosure action against Kristine McCrory, inter alia. The prior order of this Court is not attached to that complaint. The body of the complaint does not make reference to that order. And the complaint seeks relief including additional interest, late charges, attorney’s fees and costs.
On April 3, 2014, this Court held a conference on this action in accordance with CPLR 3408, which requires that plaintiff “appear in person or by counsel, and if appearing by counsel, such counsel shall be fully authorized to dispose of the case.” Plaintiff did not appear in person but sent counsel who advised that he was not authorized to dispose of the case without consulting with plaintiff. Moreover, counsel for plaintiff claimed to by wholly uninformed of this Court’s previous decision and order.
The Uniform Rules for Trial Courts also require that “only attorneys fully familiar with the action and authorized to make binding stipulations, or accompanied by a person empowered to act on behalf of the party represented, will be permitted to appear at a pretrial conference.” [22 NYCRR 202.26 (e)].
In short, plaintiff continues to ignore the laws of this state, to flaunt the orders of this Court and to manipulate the legal system with an absence of good faith toward defendants, the court and, apparently, its own attorney.
As this Court noted in the previous Decision and Order:
A foreclosure action is equitable in nature and triggers the equitable powers of the court [Notey v Darien Constr. Corp, 41 NY2d 1055 (1977)]. Once equity is invoked, the court’s power is as broad as equity and justice require [Mortgage Elec. Registration Sys., Inc. V Horkan, 68 AD3d 948 (Second Dept., 2009)]. “Moreover, as particular to foreclosure actions, this court has the power, and indeed the affirmative obligation under the New York Code of Rules and Regulations, to ensure that the parties are acting in good faith (see 22 NYCRR 212.12-a [c] [4]). In the wake of a national banking crisis resulting from years of wide-spread predatory lending practices … New York enacted sweeping new legislation effective August 2008 in an effort to stave off the alarming surge of mortgage foreclosures upon homeowners.” [BAC Home Loans Servicing v Westervelt, 29 Misc 3d 1224 (A) (Sup Ct, 2010)]. The court’s role is to ensure (1) [*3]that the primary statutory goal of keeping homeowners in their homes is met wherever feasible [see CPLR 3408 (a)]; and (2) to ensure the concomitant obligation of the parties to act in good faith [BAC Home Loans Servicing v Westervelt, supra].
For the reasons stated herein , and pursuant to Uniform Rule 202.26 (e), it is hereby
ORDERED, that the above matter is hereby dismissed, with prejudice.
This constitutes the Order and Judgment of the Court. The mailing of a copy of this Order and Judgment by this court shall not constitute notice of entry.
A federal judge on Wednesday said he would consider dismissing a U.S. Department of Justice lawsuit accusing Bank of America Corp (BAC.N) of civil fraud in the sale of mortgage securities that soured during the global financial crisis.
While not issuing a formal ruling, U.S. District Judge Max Cogburn said he had concerns and indicated at a hearing in Asheville, North Carolina that he might adopt the recommendation of a federal magistrate judge for a dismissal of the fraud claims tied to the $850 million (506.29 million pounds)sale of securities.
“DOJ may not have the evidence to try this as a fraud case,” Cogburn said.
A lawsuit by the City of Los Angeles accusing Citigroup Inc of mortgage discrimination can go forward, a federal judge ruled on Monday, turning down the bank’s motion to dismiss the case stemming from last decade’s real estate boom.
The lawsuit, filed in December, accuses Citigroup of engaging in a “continuous pattern” of discrimination since at least 2004 by targeting minorities for high-cost mortgage loans, violating the U.S. Fair Housing Act. The city is seeking damages from the bank for the costs of extra services and lost tax revenue in blighted neighborhoods.
Citigroup is one of four banks that Los Angeles has sued since December for allegedly giving minorities home loans they could not afford, resulting in a wave of foreclosures and a lower tax base.
Wells Fargo & Co. (WFC) lost a bid to throw out a lawsuit by Los Angeles in the city’s renewed effort to hold mortgage lenders liable for record foreclosures during the collapse of the U.S. housing market.
U.S. District Judge Otis Wright II in Los Angeles, without ruling on the merits of the claims, today said the city’s allegations that the bank targeted minority lenders with “predatory loans” were legally sufficient at this stage to proceed with the case.
The second-largest U.S. city separately sued Wells Fargo, Citigroup Inc. (C) and Bank of America Corp. last year, saying the three mortgage lenders engaged in discriminatory practices since at least 2004, placing minority borrowers in loans they couldn’t afford and driving up the number of foreclosures in their neighborhoods.
Homeowners should be a whole lot diligent these days…
HuffPO-
From the very first day she was allowed to speak with clients at her new law firm job, Michele Stephens wondered if she was doing something unethical. By the time she quit, nearly a year later, she no longer had any doubt about it. “I was told to lie again and again,” she said.
Stephens claims she took part in what consumer groups and federal regulators say is an especially ruinous scam, directed by lawyers, meant to defraud desperate and broke homeowners.
Reading from a six-page script, Stephens told hundreds of clients solicited by The Hoffman Law Group of Palm Beach, Florida, that the firm was suing banks on their behalf, seeking compensation for mortgage abuses. This aggressive litigation was all made possible, she would say, by the fees homeowners paid to support the cases – $6,000 up front, plus $495 a month.
Let me just say that they ALL knew what was going on! So what happened to all the robo-signed documents…. What is the court going to do about this to make the homeowners whole again?
BDN Maine-
A lawyer disciplined for not blowing the whistle loudly enough on his client’s “robo-signed” foreclosure documents is fighting the public reprimand he received from the Maine legal profession’s oversight board in April.
The Maine Board of Overseers of the Bar had determined that Drummond & Drummond lawyer Paul Peck, who led the firm’s foreclosure division, did not “ take immediate and effective action” to stop foreclosure proceedings in 2010 that were based on faulty affidavits.
James Bowie, the attorney representing Peck in the appeal, said his client is contesting the factual basis for the board’s decision.
“The panel issued the lowest level of discipline that is available if they are going to issue discipline,” Bowie said in a telephone interview. “Despite that, we feel the factual findings don’t support the imposition of any discipline at all.”
If anyone comes across similar mauals, please email them to me. Merci.
New York Post-
How exactly do the note endorsement processes described in Wells Fargo’s controversial Home Mortgage Foreclosure Attorney Procedure Manual work?
On March 12, The Post broke the news of this manual and allegations in court papers by attorney Linda Tirelli that the document provides detailed procedures to fabricate foreclosure papers on demand. Wells Fargo denied the allegations.
Now a federal judge wants the nation’s largest mortgage servicer to shed further light on the procedures described in the manual, and how it may have been used in the case of Westchester resident Cynthia Carssow-Franklin.
Decided on May 30, 2014 Supreme Court, Kings County
One West Bank, F.S.B., Plaintiff, – against-
against
Daniel Corrar a/k/a DANIEL CARRAZ a/k/a DANIEL COKRAR a/k/a DANIEL E. CORRAR, City of New York Environmental Control Board, Sea Gate Association, Manhattan Beer Distributors, “JOHN DOE”, “RICHARD ROE”, “JANE DOE”, “CORA COE”, “DICK MOE” and “RUBY POE”, the six, defendants last named in quotation marks being intended to designate tenants or occupants in possession of the herein described premises or portions thereof, if any there be, said names being fictitious, their true names being unknown to the plaintiff, Defendants.
19614/09
Attorney for Defendant Daniel Corrar Baum & Bailey, P.C. 48 Wall Street, 11th Fl New York, NY 10005
Attorney for Plaintiff Stein, Weiner & Roth, LLP One Old Country Road, Suite 113 Carle Place, NY 11514
Attorney for Defendant Sea Gate Association Alan J. Wohlberg, Esq. 2805 Avenue N Brooklyn, NY 11210
Attorney for Plaintiff Ras Boriskin, LLC 900 Merchants Concourse, Suite LL-13 Westbury, NY 11590 Donald Scott Kurtz, J.
Recitation, as required by CPLR §2219(a), of the papers considered in the review of these motions:
PapersNumbered
Notice of Motion/Cross Motion/Attorneys’ affirmations
supplementing the motions……………………………………….1,2
Answering Affidavits/Affirmations……………………………3
Reply Affidavits/Affirmations/Memoranda of Law…….4Referee’s Report……………………………………………………….
Upon the foregoing cited papers, plaintiff’s motion for an Order of Reference and defendant Corrar’s cross-motion to dismiss plaintiff’s complaint pursuant to CPLR §3215(c), is decided as follows:
Plaintiff commenced this foreclosure action by the filing of a Summons and Verified Complaint on August 3, 2009. Defendant Daniel Corrar a/k/a Daniel Carraz a/k/a Daniel Cokrar a/k/a Daniel E. Corrar (hereinafter “defendant”) was allegedly served pursuant to CPLR §308(2) by delivery of the Summons and Verified Complaint to a co-tenant on August 6, 2009 and by the required mailing on August 11, 2009. Defendant failed to answer. A proposed Order of Reference was received by the Court on September 23, 2009. By letter dated October 13, 2010, plaintiff withdrew its proposed Order of Reference. On January 17, 2013, plaintiff filed a motion [*2]for an Order of Reference, noticed for February 6, 2013. On February 6, 2013, both plaintiff and defendant failed to appear and said motion was marked off. On September 27, 2013, plaintiff filed its second motion for an Order of Reference. On the return date, defendant appeared pro-se and the case was adjourned at his request to retain counsel. On January 29, 2014, defendant cross-moved for an order dismissing the complaint pursuant to CPLR §3215(c); cancelling any accrued interest from the date of defendant’s default including all fees and penalties; and, in the alternative, granting him an extension of time to serve an answer.Defendant maintains he never received the Summons and Verified Complaint. He submits an affidavit wherein he states he completed a trial modification in October 2008, prior to the action’s commencement. Thereafter, he was informed that IndyMac was no longer servicing his loan and he was unable to ascertain the identity of the new servicer. He maintains he does not know the co-tenant who was allegedly served with the Summons and Verified Complaint and that the first he learned of this action was when he received plaintiff’s second motion for an Order of Reference on September 24, 2013. Defendant argues that plaintiff failed to move for a default judgment within a year after defendant’s default and, therefore, pursuant to CPLR §3215(c), the action should be dismissed.
In opposition to defendant’s cross-motion, plaintiff argues that it made an application for entry of a default judgment within a year of defendant’s default, despite the application having been withdrawn. Plaintiff maintains that the threshold for satisfying CPLR §3215(c) is very low and merely an application for a default judgment is enough. Moreover, it argues that settlement discussions can constitute a reasonable excuse for plaintiff’s delay in entering a judgment and notes that on May 18, 2010, the case was calendered for a foreclosure pre-settlement conference.
CPLR §3215(c) states, in pertinent part, that if a plaintiff “fails to take proceedings for the entry of judgment within one year after the default, the Court shall…dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed.” This section “prevents a plaintiff from taking advantage of a defendant’s default where the plaintiff has also been guilty of inaction.” Myers v. Slutsky, 139 AD2d 709, 710 (2d Dept 1988). The legislative intent underlying CPLR §3215(c) was to “prevent the plaintiffs from unreasonably delaying the determination of an action…” and “to avoid inquests on stale claims (citations omitted).” Id., Giglio v. NTIMP, Inc., 86 AD3d 301, 307 (2d Dept 2011).
The Court does not agree with plaintiff’s contention that it made an application for entry of a default judgment within one year of defendant’s default. In fact, upon review of the papers, it is noted that plaintiff submitted an ex-parte application for an Order of Reference only, which was submitted directly to the court clerk. Therefore, this “application” could not have been a motion for a default judgment pursuant to CPLR §3215. Moreover, even if the Court considered plaintiff’s application to be a motion pursuant to CPLR §3215, said application or motion was withdrawn by plaintiff. “The effect of a withdrawal of a motion is to leave the record as it stood prior to its filing as though it had not been made.” Stoute v. City of New York, 91 AD2d 1043, [*3]app dismissed 59 NY2d 602, lv to app dismissed 59 NY2d 762 (1983). On January 17, 2013, approximately two and a half years after defendant’s alleged default, plaintiff filed its first motion for an Order of Reference. The Notice of Motion did not state plaintiff was seeking a default judgment. The motion was marked off on February 6, 2013. Plaintiff now makes its second motion for an Order of Reference. Again, upon review of the Notice of Motion, it still does not seek a default judgment, even though defendant’s alleged default occurred almost four years ago.
The Court finds plaintiff’s remaining argument that the May 18, 2010 foreclosure pre-settlement conference constitutes a reasonable excuse for plaintiff’s delay in entering a judgment to be without merit. Defendant did not appear and no conference was held. Moreover, the case was in that part only once, and after that one appearance, the case was immediately released to the IAS part for plaintiff to proceed.
In view of the foregoing, plaintiff’s application for an Order of Reference is hereby denied and defendant’s cross-motion to dismiss pursuant to CPLR §3215(c) is hereby granted.The foregoing shall constitute the Decision and Order of the Court.
“The government’s response to the foreclosure crisis is the equivalent of trying to put out a forest fire with an eye dropper.” — Senator Elizabeth Warren
HUFFPO-
While the foreclosure crisis continues to ravage communities around the country there’s a pressing need for homeowner education and empowerment. Maegan Nikolic, a single mom in Whittier California, can attest to that. Since 2010 she’s been run through the foreclosure wringer. She’s woken up to find notices of default tacked on to her door, hired a succession of lawyers to try and find some way to resolve the mess but at every turn ran into a brick wall. After the tears, the stress, the overwhelming anxiety Maegan with her small boy in tow and threatened with a forcible eviction left her house of 17 years.
Maegan’s story has been distilled down to a statistic; one that shows up on industry data bases like CoreLogic and Realty Trac but like all statistics they don’t reveal the faces behind the numbers. While trillions were lost in housing values the human cost, measured in lost dreams, dislocation, divorce, depression, suicide, addiction, is incalculable. Since the housing bubble burst in 2007 there are upwards of five million stories similar to Maegan’s, and if you’re watching too much Fox Business News and CNBC you might think that this just an old bad dream and we’re now back on the royal road to economic prosperity.
Nearly 30,000 city homeowners — most of them in minority communities — are in danger of losing their properties to foreclosure, an alarming new report by Senate co-leader Jeffrey Klein says.
Even while most of the country is recovering from the 2007-2008 housing crisis and has watched foreclosure rates go down, New York City homeowners are suffering, according to the report, which will be released Friday.
“Not only are foreclosure notices up 15% from the previous year, but foreclosure activity in the region experienced an annual increase in 21 of the past 23 months,” the report says.
The Haas Institute has just released a new report entitled Underwater America: How the So-Called Housing Recovery is Bypassing Many Communities. Download the full report here.
The report was launched at a national press conference on May 8 in Richmond, CA, in order to highlight the problem of widespread “underwater mortgages” – homeowners stuck in loans for more than their home is worth- which persists in many communities across the country. The report identifies the nation’s most troubled hot spots: the cities, metro areas and communities where the highest proportion of homeowners still have negative equity, or are “underwater.” The report’s authors argue that market forces alone will not bring the recovery to these severely impacted communities, and call for local or federal intervention to reduce mortgage principal.
In the first report of its kind, the authors analyze negative equity and foreclosure data together with race and income data, at a zip code level, as well as city and metropolitan area. The report uncovers the depth of the housing problem that persists in these hard hit communities, as well as how the legacy of predatory lending has meant a disproportionate negative impact on African American and Latino communities. One in ten Americans live in the 100 hardest hit cities where the number of underwater homeowners range from 22% to 56%, the report says.
REPORT AUTHORS: Peter Dreier, Professor of Politics and chair of the Urban & Environmental Policy Department at Occidental College; Saqib Bhatti, Fellow at the Nathan Cummings Foundation; Rob Call, graduate student in urban planning at the Massachusetts Institute of Technology; Alex Schwartz, Professor of Urban Policy at the Milano School of International Affairs, Management, and Urban Policy at The New School; and Gregory Squires, Professor of Sociology and Public Policy & Public Administration and chair of the Department of Sociology at The George Washington University.
RECOMMENDATIONS FROM THE REPORT
1. Loan holders—banks, government sponsored enterprises (i.e., Fannie Mae and Freddie Mac, which are regulated by the Federal Housing Finance Agency, FHFA), and investors—should reduce the principal on underwater mortgages to current market values.
2. If loan holders are unwilling or unable to reduce the principal on underwater mortgages to current market values, they should allow these loans to be purchased by publicly-owned or nonprofit entities that are willing to restructure them with fair and affordable terms.
3. Local municipalities should use all options at their disposal to facilitate the goal of resetting mortgages to current market values, including the use of “reverse eminent domain” (the program proposed in Richmond, California and elsewhere) to acquire mortgages in order to restructure them with fair and affordable terms.
4. Banks, government sponsored enterprises like Fannie Mae and Freddie Mac, and investors that own vacant homes that have already been foreclosed upon should sell them to publicly- owned or nonprofit entities that can convert them to affordable housing units for residents of the community instead of selling them to speculators.
5. Local municipalities should use all options at their disposal to facilitate the goal of turning vacant, foreclosed homes into affordable housing. This includes the use of “reverse eminent domain” to acquire properties in order to convert them to af- fordable housing units for residents of the community and to prevent them from being purchased by speculators.
Fact Sheets on Hardest-Hit Areas
View specific reports on the hardest-hit cities and neighborhoods.
Re: Burt v. Bank of New York Mellon Case No. 14CECG00641
Hearing Date: June 4th, 2014 (Dept. 403)
Motion: Defendants’ Demurrer to Complaint
Tentative Ruling: To overrule the demurrer to the complaint, in its entirety. (Code Civ. Proc. § 430.10(e).) Defendants shall serve and file their answer within ten days of the date of service of this order.
Explanation: Defendants have demurred to the entire complaint on the ground that it fails to state facts sufficient to constitute a cause of action. Their first argument is that plaintiffs are required to allege that they are ready, willing and able to tender the entire amount they owe under the loan in order to state a claim for wrongful foreclosure, or related causes of action.
In Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575, the Court of Appeal stated, “It is settled that an action to set aside a trustee’s sale for irregularities in sale notice or procedure should be accompanied by an offer to pay the full amount of the debt for which the property was security.” (Arnolds Management Corp. v. Eischen (1984) 158 Cal.App.3d 575, 578-579, emphasis added.)
Here, however, plaintiffs are not attempting to set aside a completed trustee’s sale. They are instead trying to prevent the foreclosure sale from happening at all. Thus, the rule stated in Arnolds Management does not apply here, because the trustee’s sale has not yet taken place.
Also, in Glaski v. Bank of America, N.A. (2013) 218 Cal.App.4th 1079, the Fifth District Court of Appeal held that a plaintiff who challenges a pending foreclosure proceeding based on alleged defects in the assignment of the note and deed of trust that render the assignment void does not have to allege tender in order to state a valid claim for wrongful foreclosure and related claims.
“Tender is not required where the foreclosure sale is void, rather than voidable, such as when a plaintiff proves that the entity lacked the authority to foreclose on the property. [¶] Accordingly, we cannot uphold the demurrer to the wrongful foreclosure claim based on the absence of an allegation that Glaski tendered the amount due under his loan.” (Id. at 1100, internal citations omitted.)
Here, plaintiffs have alleged that the assignment of the note and deed of trust is void because it was completed after the closing date of the trust. (Complaint, ¶¶ 21- 26.) Thus, plaintiffs are not required to allege tender of the full amount due under the loan in order to support their claims. The court declines to sustain the demurrer to the extent it is based on the tender rule.
Next, defendants argue that plaintiffs have not stated a claim under Civil Code section 2923.6 because the statute only applies to “owner-occupied residential” properties (Civil Code § 2924.15(a)), and plaintiffs have admitted that their property is not residential. Plaintiffs have alleged that the County of Fresno refused to recognize their property as residential, and County records only show a “mobile home” on the property. (Complaint, ¶ 29.)
Section 2924.15(a) does not define what “residential” property is, but it does state that “‘owner-occupied’ means that the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes.” (Civ. Code, § 2924.15(a).) Here, the plaintiffs have alleged that the property is their principal residence, and that it was security for the loan made for the personal, family or household purposes. (Complaint, ¶¶ 28, 62.) While the property may not be recognized as containing a residence in the County’s records, the plaintiffs have adequately alleged that they are actually residing on the property, and that the loan was made to purchase their family home. Therefore, plaintiffs have sufficiently alleged that the property is “owner-occupied residential real property” for the purpose of section 2923.6(a).
Defendants also argue that plaintiffs have not alleged any actual violation of section 2923.6, because section 2923.6 only bars foreclosure proceedings when a loan modification application is pending, and here the plaintiffs admit that they did not submit their loan modification application until after the notice of default was issued.
Civil Code section 2923.6(c) states, in part, “If a borrower submits a complete application for a first lien loan modification offered by, or through, the borrower’s mortgage servicer, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or notice of sale, or conduct a trustee’s sale, while the complete first lien loan modification application is pending. A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default or notice of sale or conduct a trustee’s sale until any of the following occurs: (1) The mortgage servicer makes a written determination that the borrower is not eligible for a first lien loan modification, and any appeal period pursuant to subdivision (d) has expired.”
Here, plaintiffs allege that they were attempting to obtain a loan modification application in June of 2013, but they did not actually receive the application until July 3rd, 2013. (Complaint, ¶¶ 38, 40.) They completed and submitted the loan modification application on July 24th, 2013 by Federal Express. (Id. at ¶ 40.) However, the notice of default was issued on June 21st, 2013, before the loan modification application was completed or sent out. (Request for Judicial Notice, Exhibit 3. The court intends to take judicial notice of the notice of default and the other documents attached to the request for judicial notice as officially recorded documents.) Thus, plaintiffs cannot show that the notice of default was issued in violation of section 2923.6.
On the other hand, plaintiffs also allege that defendants issued the notice of trustee’s sale on February 12th, 2014, while the loan modification process was still pending. (Complaint, ¶¶ 41-55.) The Bank appears to claim that the notice of trustee’s sale was sent out after the first application for loan modification had been denied, and before plaintiffs resubmitted a new application. However, the allegations of the complaint appear to indicate that the first loan modification application was pending at the time the notice of trustee’s sale was served on plaintiffs. (Complaint, ¶¶ 51, 55.) Defendants have not shown that there was a written denial of the application before the notice of trustee’s sale was issued. Therefore, the plaintiffs have sufficiently alleged that the defendants violated section 2923.6 by issuing the notice of trustee’s sale while the loan modification application was pending.
With regard to the second cause of action for wrongful foreclosure, defendants argue that the plaintiffs cannot show that they were injured by the alleged irregularities in the assignment process, as there was no change in their obligations under the note. They also contend that plaintiffs have no standing to allege defects in the assignment, because they were not parties to the assignment. However, the Fifth District Court of Appeal rejected these arguments in Glaski v. Bank of America, supra, 218 Cal.App.4th 1079.
In Glaski, the Court of Appeal found that the plaintiff had alleged sufficient facts to support claims for wrongful foreclosure, quiet title, declaratory relief, cancellation of instruments, and unfair business practices under Business and Professions Code section 17200 based on alleged defects in the assignment of the note and deed of trust. (Glaski, supra, at 1101.) The Glaski court found that the allegation that the assignment was made after the closing date of the trust was sufficient to show that the assignment was void, and thus the lender had no authority to foreclose on the property. (Id. at 1096-1097.) The Glaski court also rejected the argument that the borrower has no standing to challenge the assignment because the borrower was not a party to the assignment. (Id. at 1094-1095.)
Here, plaintiffs’ allegations are similar to those in Glaski, since plaintiffs are alleging that the deed of trust and note were not transferred or assigned properly before the closing date for the trust. (Complaint, ¶¶ 23-25.) Therefore, under Glaski, the plaintiffs have stated a valid claim for wrongful foreclosure, because Bank of America and Bank of New York allegedly have no standing to foreclose on the note. Conversely, plaintiffs do have standing to assert the improper assignment, because they are alleging that the assignment is void, and not just voidable. (Glaski, supra, at 1094-1095.) The court in Glaski did not require any showing that the borrower suffered actual prejudice from the improper assignment, since the improper assignment rendered the entire assignment void. (Ibid.) Therefore, the court intends to overrule the demurrer to the second cause of action for wrongful foreclosure.
Likewise, the third cause of action for cancellation of the notice of default, assignment of the deed of trust, and notice of trustee’s sale is also sufficiently alleged.
In Glaski, the court specifically found that plaintiff could state a claim for, among other things, cancellation of the allegedly invalid instruments based on the defects in the assignment. (Glaski, supra, at 1101.) Here, plaintiffs have made allegations that the assignment was void, so the court will permit plaintiffs to proceed with their cancellation of instruments cause of action and overrule the demurrer to the third cause of action. For the same reasons, plaintiffs have adequately alleged their quiet title claim in the fourth cause of action. Glaski specifically held that plaintiff could allege a quiet title claim based on the same theory alleged in the present case. (Glaski, supra, at 1101.) Defendants argue that plaintiffs cannot state a quiet title claim against them because plaintiffs have not alleged full payment of the note. However, plaintiffs have alleged that defendants have no authority to collect payments on the note or foreclose on the property because of the improper assignment. (Complaint, ¶ 84.) Therefore, plaintiffs do not have to allege that they paid the note in order to allege a quiet title claim against defendants.
Finally, defendants demur to the plaintiffs’ fifth cause of action for unfair business practices under Business and Professions Code section 17200, contending that plaintiffs have not alleged a predicate violation of any statute, or that they have suffered any loss of money or property as a result of defendants’ actions. However, as discussed above, plaintiffs have adequately alleged violations of Civil Code section 2923.6 by proceeding with the foreclosure while the loan modification application was pending, as well as falsely claiming that they were entitled to collect on the note when allegedly the assignment of the note and deed of trust was invalid. Thus, plaintiffs have sufficiently alleged predicate violations of other laws to support their UCL claim. In addition, plaintiffs have alleged that they are in danger of losing their home due to defendants’ unfair business practices. Therefore, plaintiffs have sufficiently alleged their claim under the UCL, and the court intends to overrule the demurrer to the fifth cause of action.
Pursuant to CRC 3.1312 and CCP §1019.5(a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.
Ocwen Financial (OCN) reached an agreement with the New York Department of Financial Services, saying that it would stop using gag orders on mortgage modifications.
“In discussions with our Department, Ocwen has agreed to no longer seek gag rules as part of settlement agreements or loan modifications with borrowers,” Benjamin Lawsky, superintendent of Financial Services, said.
“Additionally, the company has stated it will not enforce gag rule provisions in existing agreements. We are gratified that Ocwen worked constructively with us to resolve this matter, and our Department intends to review this issue at other financial institutions,” Lawsky added.
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