Livinglies's Weblog

OCTOBER 2008 NEWSLETTER

ADVOCATES FOR JUSTICE

ADVOCATES TEAM just stopped Countrywide’s foreclosure of homeowner in the San Bernadino, CA. area today. A temporary restraining order was granted stopping the scheduled foreclosure sale for Oct. 20th.

A preliminary hearing is set for Nov. 3rd on the issue of a preliminary injunction, the stopping of the sale until the merits of the client’s case are heard. The three attys., Advocates expert and support experts worked together to provide: referral to a local representative attorney, Advocate’s expert support and consultation to that atty., an extensive 35 page compliance audit report of the relative mortgage industry player’s misconduct, statutory and actual damages and common law claims for bait and switch, equity stripping and misrepresentation, among others, along with a Summary of Key Issues and list of Points and Arguments for the local attorney to argue in the court, a report of personal interviews with the clients, a comprehensive written and oral historical and chronological account of the facts involving all aspects of the consumer’s mortgage loan, effectual judicial documents and the local attorney’s appearance at the court today.

The aforementioned consumer/homeowner, a poster-child for the AG’s extensive Complaint against Countrywide for abusive lending practices,  still has some hurdles to jump; but is now on his way. There are still some important battles to fight. However, the ADVOCATES team has prepared a legal and effective professional defense with care for the client; and is providing a entirely legitimate opportunity for the homeowner to stay in his home… as it is the particular homeowner’s objective.

The homeowner’s claims involve a claim for spurious open-end credit/HELOC for over $60,000.  Unbeknownst to the homeowner, the entire HELOC credit line was exhausted before he used it; part of which was applied to approximately $15,000 in prepayment penalty fees to the same lender, Countrywide. Moreover, the homeowner’s car and furniture was paid off by the loan without the homeowner’s knowledge. He is now paying for his car and furniture for a period of 30 years.

The application has mortgage broker notations showing that the homeowner’s car and furniture accounts/payments were not included in the underwriting guideline ratios. Therefore the loans had to be paid off  in order for the homeowner to qualify for the loan.  It also appears that the homeowner’s income was overstated on the loan application.

As often is the case, this particular homeowner did not receive certain pre-disclosures pursuant the requisite time provided by consumer protection statutes nor did he receive a complete Settlement Statement, all three pages of the HUD 1, which would have shown the $5000, in round numbers, for the prepayment penalty for the second lien. The $10,000 prepayment penalty on the first lien was embedded in the total payoff amount found on the first page of the Settlement Statement.

AFJ requested the homeowner obtain the final HUD 1 from the applicable title company.  The title company summarily provided the HUD 1 sending a copy directly to AFJ. In finality and in violation of RESPA, the homeowner did not receive the HUD 1 until approximately two years after consummation.

The HELOC was actually required, based on the way the loan was structured and  applicable fees and charges, for the homeowner to qualify for the first lien loan.

Due to the fact that the Attorney General of California filed a lawsuit against Countrywide and that CW subsequently and recently agreed to pervasively modify loans, the AFJ team is hopeful that this consumer can keep his home with terms he can afford…eventually.

One of the objectives of this homeowner is to stay in his home as long as possible before the time of settlement. However, the next hurdle is to first to be granted a preliminary injunction in the first week of November.

The four previously-mentioned professionals and the auxiliary associates invested approximately 30-40 hours collectively preparing the  homeowner’s defense. Many attorneys have been known to charge near $10,000 – $20,000 and/or more  for similar services…and the case still requires significant hours of investment in the form of document preparation, case analysis, strategizing and consultation, including possibly a number court appearances and discussions with the lenders/servicers as the case nears settlement … to continue to fight.  Advocates fees range from $5000 -$7000 which includes the local attorney’s retainer fee, typically.  Limited-payment plans may be available based on the status of the case.

Sometimes the struggle lasts for years, other times…months, depending on the unique facts of each case, the temperament of each court and other existing and intervening factors.  Certain challenges can arise on the American Mortgage Battlefield but certain members on the ADVOCATES team have years of experience and are wholly prepared to defend and contend.

The ADVOCATES TEAM is working on another CA case, near Fontana, where the homeowner was set up by a multi-level marketing mortgage brokerage with a bogus employer. The brokerage charged the homeowner $600 for the ‘service.”
Additionally the homeowner paid approximately $11,000 in Yield Spread and $11, 000 in prepaid penalties.

We will be filing an Original Complaint in the next few weeks and will keep you updated.

UPDATE ON TEXAS PROPERTIES
ADVOCATES reported several weeks ago that we had successfully defended against the lender’s eviction petition. The court required a $10,000 bond in the event the lender wanted to file an appeal. Approximately a year and a half ago, this consumer was paying $9,000 per month including payments for the rental in which he was living. The consumer/homeowner has not paid a house payment during the time AFJ has been defending him. Approximately a year ago, AFJ stopped Ameriquest’s attempt to foreclosure on the night before the trustee’s sale. AFJ negotiation’s resulted in the homeowner paying $7,000 up front and monthly payments thereafter. Homeowner has not paid a payment since that time.

Time has expired for the lender to file their appeal and the homeowner will revisit the issue of quiet title as he tries to sell or refinance his home, which the homeowner states has $300,000 equity in his $700,000 home.  To get a more complete picture of this particular situation,  it is prudent to state that this case has other atypical muddled concerns that complicate the title and note holder issues.

Also, several weeks ago, ADVOCATES reported that  ADVOCATE’S TEAM had successfully stopped  an Option One foreclosure base on a wrongful eviction. Since then Option One pulled the foreclosure from their foreclosure-mill attorneys indefinitely. Subsequently Option One approved the short sale and agreed to pay all closing costs requested.

We are slowly addressing complicated issues involving another Texas property where Option /American Home Mortgage Servicing, Inc. OO/AHMS wrongfully foreclosed, selling the homeowner’s home, even after the default had been cured. OO/AHMS responded by returning the bona fide purchaser’s check to the buyer. However, the buyer returned the check to AHMS. As a result the entire property is in a state of flux, as AHMS ‘is working on it.”

Only recently has ADVOCATES intervened by placing certain phone calls to AHMS’s legal department ,as advised by the Home Retention Department. We were given the name of the Associate General Counsel in AHMS legal department.

We are hoping to settle the case for money damages and avoid litigation. AFJ will keep you posted. We represent the homeowner and comparative investors who had an agreement with the homeowners to purchase the house before the wrongful foreclosure trustee’s sale.

At this time, OO/AHMS has admitted that they dropped the ball and have requested that we confer with the parties who have rights and determine what they want for remedy.

Among the remedies proposed was: a new house, an REO house in OO/AHMS’s inventory. Additionally, we discussed that generous loan modification would have been applicable had AHMS responded in a more timely manner to resolve the issue.

FYI, the title of the property remains in the name of the bona fide purchasers who are also investors. At this time, the ball is in our ballpark.  We are conferring with the prospective attorney for the homeowners and their agents.

Will keep you posted as to the settlement.

OTHER CASES
We have cases in both St. Louis, MO and Indianapolis, Indiana, that ADVOCATES and their attorneys have defended for over two years nearing three.  Each of the attorneys on the cases had not taken any Consumer Mortgage Defense cases before. The consumer paid ADVOCATES’ fees to consult and support the attorneys on each case.

An AFJ case involving military personnel here in Texas resulted in Wells Fargo offering a $40,000 reduction in the obligation… to walk away. This particular client’s goal was to modify the ARM to a fixed. The walk-away price will render the homeowner house-less since his credit is such that he cannot get refinanced.

At the time ADVOCATES began defending the consumer’s property/mortgage when he was only approximately thirty (30) days behind. His case has been in the works for about nine months without making monthly payments. The attorney has gone back to the lender with the homeowner’s counter offer; to modify the loan changing the current interest rate back to the original introductory fixed rate so he can afford stay in the home.  We will keep you posted as additional facts are available.

Wells Fargo in the above case had violated various TILA. RESPA and Texas Constitution statutory violations. Additionally, allegations for bait and switch were unquestionably applicable. The homeowner states that he was ambushed at closing with payments $300 higher than he was told or expected. As often the case in a bait and switch case, the homeowner was missing important disclosures.

At closing, the homeowner, thinking it was too late to back out, or that contending would cause the lender to rescind their offer to lend, did his best to make payments for almost two years until his second source of income was significantly reduced.  At that point he was referred to AFJ to seek possible remedies to address the issue of rising ARM payments.

Whatever provider you chose to help you through this tenuous time, the ADVOCATES team wishes you peace and a life of well-being.

Best Regards,
Linda J. Rougeux
Consumer Advocate
325-338-7072
loan_busters@yahoo.com

Filed under: CDO, currency, Eviction, foreclosure, GTC | Honor, Mortgage | Tagged: countrywide, foreclosure defense |