Listen Now-Homeowner Bill of Rights Nuts and Bolts

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Listen to our discussion of the Homeowner Bill of Rights here.  We review the provisions and tell you how you can use the new law to help you save your home.  Next Wednesday, March 27, 2013, @12:30 pm,  join us on Blog Talk Radio for a question and answer session about the issues presented here today.

Send your questions to legallink1@gmail.com by Wednesday, March 27, 2013.

 

Why Are You Still Be Duped Into Paying For Forensic Audits?

In this age of the internet, it is possible to throughly research any decision that you might make in regard to saving your home, or spending any money on any service that claims to help you accomplish that goal.  Why then, do consumers continued to be scammed and duped into buying ridiculous reports which the sellers claim will save their home from foreclosure, get them a free house, take on the banks, etc?  In announcing the latest settlement, the FTC announced:

     "The defendants behind an operation that allegedly preyed on vulnerable homeowners have agreed to settle Federal Trade Commission charges that they lured people into paying $1,995 or more by holding out bogus promises that they could help them avoid foreclosure and renegotiate their mortgages.

     The FTC’s settlement order against the Los Angeles, California-based Consumer Advocates Group Experts, LLC, company owner Ryan Zimmerman, and two other related companies is part of the agency’s continuing crackdown on scams that target consumers in financial distress. It bans the defendants from marketing any mortgage assistance relief or other debt relief products or services. It also prohibits them from making misleading claims about any financial product or service, or any other type of product or service."

     The settlement also imposes a $3.5 million judgment, which reflects the full amount of consumer injury during the two years before the operation was shut down.

     The judgment will be suspended due to the defendants’ inability to pay. If it is later determined that the financial information the defendants provided to the FTC was false, the full amount of the judgment will become due.

You can read the judgment here. 

Nuts and Bolts-Homeowner Bill of Rights

The Homeowner Bill of Rights spells out the servicers' obligations  when homeowners make a request for a "Foreclosure Prevention Alternative", i.e. a loan modification, short sale or deed in lieu.  The rules are simple--getting compliance may not be as simple.  Become familiar with the rules and know how to use them to your advantage--pursue litigation to enforce your rights if necessary.  Here is a summary of the nuts and bolts...remember, there will be no free house, but perhaps you will find a resolution that you can live with. 


SERVICER OBLIGATIONS

•Meet and confer contact regarding FPA, 14 day meeting
CC 2923.55

•Send Pre-Foreclosure Letter

•CC 2923.55

•Confirm receipt and notify of missing docs 5 business days
 CC 2924.10

•Single point of contact

•CC 2923.7

•No application fee/late fee while considering completed FPA request

 CC 2924.11(e)(f)

•No dual tracking-no NOD or NTS while in review

• CC 2323.6(c)

•Decision on loan mod with reasons. Notify of 30 day
appeal rights if denied

CC 2923.6(d)

•Notice of Default after denial and appeal time expires

•CC 2923.6(e)(1)

•Notice of Default 15 days after appeal denied
 CC 2923.6(e)(2)

•Notice of Default in English and 5 languages

•CC 1632

•Notify borrower within 5 days of recording of NOD of FPA
 CC 2924.9

•If loan mod approved, NOD or NTS must be rescinded and borrower provided executed copy. If short sale, all parties agree and proof of funds provided.

CC 2924.11(a)(b)(c)(d).

•Successor servicer must honor approved FPA

CC 2924.11(g)

 

BORROWER ACTIONS

 

•Call and request 14 day meeting CC 2923.55

•Submit complete loan modification (Short Sale) package

•Request Note, DoT, Assignments, Substitution of Trustee and loan history, proof of right to foreclose. 2923.55.

•Examine documents for defects—do they establish right to foreclose? Accurate, complete and supported by competent and reliable evidence? CC 2924.17

•Irregularities or robosigning?  Report to AG for civil penalty of $7500.  CC 2924.17(c)

•Monitor public records and trustee for sale dates

•Can request documents re: denial. CC 2924.6(f)(3)

•Run npv analysis at www.checkmynpv.com

•If servicer violations of HBoR, recommend meet and confer for minor violations, action for injunctive relief for material violations before sale. TRO requires irreparable harm—sale qualifies, minor issues do not.  TRO in place until violation corrected. CC 2924.12(a)(1).

•Serve discovery 10 days after service of complaint to obtain documents supporting “right to foreclose” and “competent and reliable evidence.”

•After sale, action for damages for material violation by servicer, trustee, beneficiary or agent. CC 2924.12(b)

•If material violation intentional, reckless or wilfull, treble damages or $50,000 statutory damages. CC 2924(b).

•After sale, no affect on BFP. CC 2924.12(e).

•Attorneys fees for TRO or damages to prevailing borrower.

CC 2924.12 (i).

Don't Count Your Settlement Funds Before...Well, Ever.

The Independent Foreclosure Review was allegedly created to compensate homeowners who had suffered "damage" during the foreclosure process in 2009-10.  The 13 question claim form requested detailed information from homeowners about the "damage" that they suffered as a result of the wrongful foreclosure or loan mod process.  (Read here) Initially, the deadline was April 2012, then  July 2012, extended to September 2012, and finally to December 2012.  Yesterday, the whole program was shut down, with over 495,000 homeowners who had applied for relief uncertain about the status of their claim.  At this point, $8.5 billion dollar settlement that replaced the program will be distributed by the banks, based on some unknown criteria--essentially, you are back to where you started.  Read more...

Independent Foreclosure Review Scrapped-New Settlement Arising Out of April 2011 OCC Consent Orders

 

The OCC has announced today that the lauded Independent Foreclosure Review Program is a failure, and has been scrapped.  It has been replaced with a new $8.5 Billion dollar settlement program involving the majority of the initial servicers.  The details are here, but expect contact in March from a payment agent who will advise you about your eligibility.  Not many details yet, but they will presumably be available soon:


WASHINGTON — Ten mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing have reached an agreement in principle with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers.
The sum includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision. The agreement ensures that more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 with the participating servicers will receive cash compensation in a timely manner.
Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error.
This agreement includes Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. For these participating servicers, fulfillment of the agreement would meet the requirements of the enforcement actions that mandated that the servicers retain independent consultants to conduct an Independent Foreclosure Review.
As a result of this agreement, the participating servicers would cease the Independent Foreclosure Review, which involved case-by-case reviews, and replace it with a broader framework allowing eligible borrowers to receive compensation significantly more quickly. The OCC and the Federal Reserve accepted this agreement because it provides the greatest benefit to consumers subject to unsafe and unsound mortgage servicing and foreclosure practices during the relevant period in a more timely manner than would have occurred under the review process. Eligible borrowers will receive compensation whether or not they filed a request for review form, and borrowers do not need to take further action to be eligible for compensation.
A payment agent will be appointed to administer payments to borrowers on behalf of the servicers. Eligible borrowers are expected to be contacted by the payment agent by the end of March with payment details. Borrowers will not be required to execute a waiver of any legal claims they may have against their servicer as a condition for receiving payment. In addition, the servicers’ internal complaint process will remain available to borrowers.
The agencies continue to work to reach similar agreements in principle with other servicers that are not parties to the agreement announced today, but that are also subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing.
OCC and Federal Reserve examiners are continuing to closely monitor the servicers’ implementation of plans required by the enforcement actions issued in April 2011 to correct the unsafe and unsound mortgage servicing and foreclosure practices.

More Protection For Homeowners In California

Governor Brown signed three significant foreclosure bills into law yesterday:

AB 2610 (Skinner) - Extends the federal 90-day notice protection to all tenants in foreclosed properties, not just bona fide tenants. The bill also enacts the PTFA's lease protections into state law but places the burden of proof on who qualifies for lease protections on the landlord. The newly enacted law also reforms the eviction process to better ensure that foreclosed tenants can assert their rights in post-foreclosure eviction actions.

SB 1191 (Simitian) - Requires landlords in 1-4 unit properties to disclose a notice of default (foreclosure) to prospective renters. Disclosure must be made in the six most frequently used languages in California. If the landlord fails to make the necessary disclosure, the tenant may ether (1) void the lease and recover all pre-paid rent plus additional damages or (2) elect to remain in the home and deduct one month's rent from future rent obligations.

AB 1599 (Feuer) - Requires foreclosure notices (notice of default and notice of trustee sale) to include summaries in the six most frequently used languages in California listed in Civil Code 1632. This law will take effect on April 1, 2013 or 90 days after the Department of Consumer Affairs issues the translations, whichever is later.

Time For Claim Forms Under the AG Settlement

 

The claim notifications,(not the actual claim forms) have been mailed to homeowners that may potentially be eligible for compensation under the AG Settlement.  The notification advises the receipient that they may be eligible, and that they will be receiving important information within the next month regarding payments.  Upon receipt of the package, you will be required to complete the forms provided in order to be eligible for payments.  If you have moved and have not received a package, it is advisable to contact the settlement information hotline to obtain the documents.  Information can be found at www.nationalmortgagesettlement.com and claims can be submitted online after September 24, 2012.

As we previously discussed, this is the portion of the AG Settlement that compensates homeowners who have been foreclosed on during the period of January 2008 to Dec 2011, and will most likely result in a payment of $1800 to $2000.  Accepting the payment does not waive any rights to pursue other remedies.