FORECLOSURE LITIGATION LA LAW LIBRARY – AUGUST 6, 2014 SPEAKER: LAUREN RODE, ESQ. CONSUMER ACTION LAW GROUP OF PANZARELLA, GUREVICH & RODE, PC 3700 EAGLE ROCK BLVD., LOS ANGELES CA 90065 (818) 254-8413
TODAY’S DISCUSSION POINTS PRACTICAL PRACTICE TIPS FOR REPRESENTING HOMEOWNERS IN FORECLOSURE WHEN SEEKING LOAN MODIFICATION ASSESSING A POTENTIAL CASE: RESPONDING TO MODIFICATION DENIALS BY LENDERS DEALING WITH LONG DELAYS IN MODIFICATION REVIEW RESPONDING TO LOAN MODIFICATION AND FORECLOSURE “DUAL TRACKING” BY LENDERS TEMPER CLIENT EXPECATIONS FROM DAY 1 CASE SCENARIOS: CAUSES OF ACTION BROUGHT BEHALF OF HOMEOWNERS
PRACTICAL PRACTICE TIPS WHAT JUDGES’ DON’T LIKE: “SHOW ME THE NOTE” ARGUMENT NO “PROPER LENDER” THEREFORE THE BORROWER DOESN’T OWE PAYMENTS TO ANYONE “LENDER HAS A DUTY TO MODIFY” ARGUMENT – NO SUCH LAW EXISTS THE BETTER ARGUMENT: BORROWER WAS IN MODIFICATION REVIEW FOR TWO YEARS WITH NO RESOLUTION GET PAST DEMURRER AND MAKE THE LENDER SPEND SOME MONEY PRESENT A SYMPATHETIC LEGAL STORY - LENDER WILL DEMURRER (A COUPLE TIMES) SEND LOTS OF DISCOVERY TALK TO OPPOSING COUNSEL
RESPONDING TO MODIFICATION DENIALS DEALING WITH DELAYS LENDERS ARE WITHIN THEIR LEGAL RIGHTS TO DENY MODIFICATIONS COMMON WRONGFUL DENIALS IF DENIAL IS GENUINE, MAY NEED TO DISCUSS ALTERNATIVES WITH BORROWER NO LAW FORCES A LENDER TO RUSH A REVIEW FILING A LAWSUIT MAY SPEED UP PROCESS, BUT THERE MUST BE A LEGAL CLAIM; REMEMBER, THIS IS NOT A MODIFICATION, THIS IS LITIGATION! LENDER TOOK SO LONG TO REVIEW, KICKED BORROWER OUT OF PROGRAMS LENDER TOOK SO LONG TO REVIEW, BORROWER’S EQUITY EATEN UP
DUAL TRACKING CALIFORNIA LAW – SB 900 – ENACTED JANUARY 1, 2013 PRIMARY RESIDENCE IF BORROWER IS IN MODIFICATION REVIEW, LENDER MUST HALT FORECLOSURE PROCESS UNTIL THEY RENDER A DENIAL IN WRITING: NOD NTS FORECLOSUE SALE EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER – VERY SUCCESSFUL WITH CA JUDGES
TEMPER CLIENT EXPECTATIONS FROM DAY 1 CLIENT MUST UNDERSTAND: JUDGE CANNOT AND WILL NOT ORDER THE LENDER TO MODIFY EXCEPTION: BREACH OF PERMANENT MOD CONTRACT – SPECIFIC PERFORMANCE JUDGE WILL NOT PUSH THE LENDER TO APPROVE A MODIFICATION, NO MATTER HOW HARD THE HARDSHIP LAWSUIT ITSELF WILL NOT STOP FORECLOSURE TRO -> PRELIMINARY INJUNCTION INFORMAL AGREEMENT WITH OPPOSING COUNSEL LITIGATION PROCESS: LONG PROPOUNDING AND RESPONDING TO DISCOVERY IS NECESSARY CONSEQUENCES OF REFUSING TO SUBMIT DOCUMENTS MAY NOT RECEIVE ANYTHING AT THE END
CASE SCENARIOS – CAUSES OF ACTION BROUGHT ON BEHALF OF HOMEOWNERS FIVE MAIN CATEGORIES: ACCOUNTING ERRORS AND MISHAPS BY LENDER DELAY IN MODIFICATION PROCESS CAUSED MODIFICATION DISQUALIFICATION OR ATE UP EQUITY LENDER FAILED TO IMPLEMENT PERMANENT MODIFICATION CA SENATE BILL 900 – HOMEOWNER’S BILL OF RIGHTS LENDER TOLD BORROWER TO FALL BEHIND ON MORTGAGE PAYMENTS OUTLIERS
ACCOUNTING LENDER WENT AHEAD AND PAID SOMETHING (INSURANCE, PROPERTY TAXES) THEN MISAPPLIED BORROWER’S PAYMENTS, CAUSING BORROWER TO BE IN “DEFAULT” BREACH OF CONTRACT NEGLIGENCE BUSINESS AND PROFESSIONS CODE 17200 FRAUD AND DECEIT ELDER ABUSE ACCOUNTING CA CIVIL CODE SECTION 1785.25 – CALIFORNIA CONSUMER CREDIT REPORTING AGENCIES ACT (REPORTING IN DEFAULT WHEN REALLY NOT) BORROWERS FIND IT IMPOSSIBLE TO GET THE LENDER TO CORRECT MISTAKE ON WITHOUT LEGAL INTERVENTION
DELAY IN MODIFICATION REVIEW CAUSED DAMAGE START OF MOD REVIEW BELOW HAMP LIMIT; TOOK SO LONG LOAN BALANCE WENT ABOVE HAMP LIMIT NEGLIGENCE FDCPA (FAIR DEBT COLLECTION PRACTICES ACT) ROSENTHAL FAIR DEBT COLLECTION PRACTICES ACT DELAY CAUSED LOAN MODIFICATION DENIAL (DENIED BASED ON NPV, I.E. TOO FAR BEHIND) NEGLIGENCE PROMISSORY ESTOPPEL BUSINESS AND PROFESSIONS CODE 17200 INTENTIONAL MISREPRESENTATION / NEGLIGENT MISREPRESENTATION FDCPA ROSENTHAL DELAY KILLED EQUITY NEGLIGENCE, 17200, FRAUD
FAILURE TO IMPLEMENT PERMANENT H.A.M.P . MODIFICATION OR PERMANENT MODIFICATION BORROWER APPROVED FOR A TRIAL MODIFICATION, ASKED TO REMIT PAYMENT UNDER THAT T .P .P ., MADE PAYMENTS, NEVER PROVIDED PERMANENT MODIFICATION (USUALLY ACCOUNT TRANSFER TO NEW SERVICER) BREACH OF CONTRACT PROMISSORY ESTOPPEL NEGLIGENCE BUSINESS AND PROFESSIONS CODE 17200 FRAUD AND DECEIT H.A.M.P . CONTAINS GUIDELINES THAT SAY IF A BORROWER COMPLETES T .P .P ., THEN MUST BE PROVIDED WITH PERMANENT MODIFICATION IF NOT A SIGNED, CONTRACT , MAY HAVE TOUGHER TIME, STRONG CASE IF BORROWER MADE PAYMENTS AND LENDER CASHED/ACCEPTED
SB 900 – Homeowner’s Bill of Rights Notice of Trustee Sale was issued while borrower was in loan modification review; no written denial = dual tracking SB 900 In review, NTS issued, lender sold SB 900 PROMISSORY ESTOPPEL NEGLIGENT MISREP / INTENTIONAL MISREP 17200 ROSENTHAL; CCRA NEGLIGENCE
TOLD TO FALL BEHIND IN ORDER TO QUALIFY FOR ASSISTANCE TOLD TO FALL BEHIND FRAUD NEGLIGENT MISREP / INTENTIONAL MISREP PROMISSORY ESTOPPEL 17200 ROSENTHAL; CCRA PLACED IN FOREBEARANCE AGREEMENT – PAY US A LOWER AMOUNT WHILE WE FIGURE OUT IF YOU QUALIFY FOR FURTHER ASSISTANCE + PENALTIES + FEES = ARREARS ACCRUE NEGLIGENCE 17200 BREACH OF CONTRACT BREACH OF THE CONVENANT OF GOOD FAITH AND FAIR DEALING
OUTLIERS BORROWER DIES; SURVIVING CHILDREN WANT TO SAVE HOME, LOAN USUALLY IN DEFAULT ASSUME LOAN? CAN’T MODIFY WITHOUT ASSUMING, CAN’T ASSUME WITHOUT MODIFYING (NEED TO BE CURRENT) – DELAY = DAMAGES LOAN STEMMED FROM AN ILLEGAL TRANSACTION – SCAM TO GET ELDERLY TO “REFINANCE” THEIR LOAN WHEN THEY REALLY QUIT CLAIMED TITLE TO THEIR HOME; MORTGAGE TAKEN OUT; FORECLOSURE COMMENCING VOIDABLE DEED LAW – MORTGAGE STEMING FROM A VOIDABLE DEED CAN BE CANCELLED CHASE FORECLOSED ON HOME IN 2008; BORROWER NOT TOLD UNTIL 2013 – 5 YEARS LATER! WRONGFUL EVICTION, TRESPASSING, FRAUD, WRONGFUL FORECLOSURE, 17200 WHO OWNS THE LOAN? TRANSFERS FROM ORIGINAL LENDERS TO SUBSEQUENT SERVICES WERE DONE INCORRECTLY CHARTING NEW TERRITORY – QUIET TITLE, VOID OR CANCEL DEED OF TRUST
THANK YOU! Questions?
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