Regulation X Loss Mitigation Rights MIght Survive Foreclosure Judgment

I’m on the run, but this article was sent to me and I thought I would share it. Sorry for not stating where the article is from. I just don’t know. But you will see the names of the authors.


Ohio District Court Distinguishes Date of Foreclosure Action from Date of Foreclosure Sale When Applying New CFPB Mortgage Rules

August 21, 2015 by and

In Cooper v. Fay Servicing, LLC, 2015 WL 4470213 (S.D. Ohio July 17, 2015), the mortgagors sued the servicer of their real estate loan asserting claims for alleged violations of Regulation X relating to the loss mitigation process. Critical to this case was the timing of the loss mitigation process that resulted in the alleged Regulation X violations, the date of the foreclosure filing, and the date of the foreclosure sale. Specifically, the foreclosure proceeding was initiated on January 4, 2014, six days prior to the effective date of the CFPB’s new Mortgage Rules, while the alleged Regulation X violations occurred in December 2014. The foreclosure sale had not been completed.

Defendants argued that Plaintiffs were precluded from enforcing their Regulation X claims because the complaint initiating the foreclosure action was filed on January 4, 2014, six days prior to Regulation X’s January 10, 2014 effective date. Citing Campbell v. Nationstar Mortg., 2015 WL 2084023, Defendants argued that applying Regulation X would be impermissibly retroactive. However, the District Court distinguished Campbell, where both the loss mitigation process and foreclosure sale occurred before the January 10, 2014 effective date. Here, the foreclosure sale had not yet occurred.

Relying on White v. Wells Fargo Bank, 2015 WL 1842811 and Lage v. Ocwen Loan Servicing LLC, 2015 WL 631014, the District Court held that Plaintiffs’ Regulation X claims did not constitute an impermissible retroactive application of Regulation X because the language of 12 C.F.R. § 1024.41 contemplates that a party may seek to enforce his or her rights after a foreclosure complaint is filed, which was presumably during the effective time period of the new CFPB Mortgage Rules. Specifically, the District Court held that “while it would constitute retroactive application to apply 12 C.F.R. § 1024.41 to a case where the date of enactment [of the new Mortgage Rules] trailed the foreclosure sale, the regulation contemplates application after a foreclosure action has been brought.” Therefore, since Plaintiffs are permitted to assert their loss mitigation rights up to 37 days prior to the foreclosure sale (during the effective time period of the new Mortgage Rules), their Regulation X claims were not impermissibly retroactive.

26 Responses


    This is good news! We all knew this was going on, but finally the courts are starting to get it. The foreclosure mill “Trustees” are cutting corners, ALWAYS in the banks favor, and running for the foreclosure sale so they can get paid and keep their “Clients” happy.

    This has been a long time coming, and the significance of this ruling will become even more apparent in the weeks to come! Stay tuned!

    Following our recent decision in Lyons v. U.S. Bank National Ass ‘n, 181
    Wn.2d 775, 336 P.3d 1142 (2014), we hold that a trustee cannot rely on a beneficiary
    declaration containing such ambiguous alternative language. Trujillo therefore
    alleged facts sufficient to show that NWTS breached the DT A and also to show that
    that breach could support the elements of a Consumer Protection Act (CPA) claim.
    Ch. 19.86 RCW. However, her allegations do not support a claim for intentional
    infliction of emotional distress or criminal profiteering. We therefore reverse in part
    and remand for trial.

    Download WA SupremeCt TRUJILLO v NWTS, WF_2015-08-20

  2. Not only do deriv investors owe taxes, so does the entity, if one be found, which received money characterized and accounted for as interest when the trust has no mtg loan assets as a result of non-transfer and delivery (having either made a loan or been bilked). What won’t be found in the case of non-transfer and delivery is an entity with a preferred tax status, meaning the entity itself (like I said if one be found) is also subject to taxation like a corporation – I think. So if US Bank, say, is the alleged trustee and so found to be the ringleader by any name of an association of some kind, it’s poss if not likely US Bank would be liable for corporate type taxes. If the seller to the trust didn’t deliver and also didn’t characterize the funds from the deriv investors as loans, they are committing at least tax fraud (by not recognizing the monster profit of selling a loan for 500k but not tendering the thing paid for).
    I think as to the loan “seller”, it’s the same as if I sell you a car for 20k, take your 20k and don’t give you the car. There’s no exchange, no value for value, and so the 20k is pure, taxable profit (plus in this deal you’d sue me hands down even if I gave you back your money by monthly payments with interest. Five years later, I want to get credited for the 5 years of payments I made to you, say 7k including interest, and now give you the car with a value of 6k. No one would say okay).
    WHY don’t these guys sue for non-delivery instead of quality and misrepresentation? Not enough will agree because of the ramifications? Aren’t these current-event assignments evidence the loans weren’t previously transferred to trusts?
    lay opinions as always

  3. For somebody who knows nothing like me…..
    You speak clearly …. And factually I like that!!!

    Signing capacity!

    To bad for others…the court accepted a non disputed allegation as true.

    Now others must reopen cold cases and prove … Oh never mind.
    They settled.

  4. This case is cited in NG’s material:
    Campbell v. Nationstar Mortg., 2015 WL 2084023 aka
    No. 14-1751. United States Court of Appeals, Sixth Circuit.
    May 6, 2015.

    Campbell alleged that NS said it wouldn’t foreclose during the loan mod consideration period. NS foreclosed. The Campbell court basically said so what, it wasn’t an irregularity in the FORECLOSURE process. I’m moving closer to that dark side I’ve denied exists.dang.

  5. Opinion,
    Bad idea for court, but not for FTC, CFPB, and the criminality of doing things without prior agreements [ie in my opinion, considered – identity theft] AG.

    Trespass Unwanted, Creator, Corporeal, Life

  6. All roads lead to Rome. Okay, no they don’t, Don’t know where that came from! But indicia so far says trustees in dots may NOT delegate their trustee obligations, which has been my premise for some time, right or wrong. So what about these secn trustees in de facto amendments to the trust agreements? Isn’t that what they are? If so, we may only stand on what we may stand on – law which says nix. imo.
    The cert holders could likely “contractually” if not under law squawk about amendments to securities offerings.
    We’ve seen NOD’s executed by Joe Blow of Schmoe and Co, for instance, instead of by the trustee. There’s never any evidence of any relationship between / among any of these people in the first place EVEN IF the dot trustee could delegate this ‘critical-to-his-appt’ job.
    I read two cases today involving banksters, trustees, bottle-washers, and POA’s (as well as conflict of interest) and I can tell you it’s a bad idea to broach the matter (as well as conflicts of interest and so on) without being totally informed.

  7. When the depositor (allegedly) sold the loans to a trust, tax-wise, it was allowed (as anyone would be) not to claim the dollar for dollar amt paid for the loan in regard to the principal owing on the note. If the depositor didn’t in fact transfer and deliver the loan, unless he called the trust’s funds on his books a loan (and therefore an admission of non-transfer and delivery), he’d have to call the amt paid to him as to principal for the note income (because nothing was exchanged) and would accordingly owe taxes. I think if a depositor never actually transferred and delivered a loan to another (here a NY trust / remic) he owes taxes on the money received (and at best a group of guys have an equitable interest if not UCC lien / sec interest in the loans and they owe taxes on earnings). We’ve only given some thought to the deriv holders tax problems heretofore.
    I guess the questions are 1) how was that alleged sale treated on those books and 2) how do we find out? 3) If the dep showed the funds received as a loan to avoid taxation, what are the ramifications of an assignment 7 years later (say) just on that score? If he didn’t transfer the loan and still hasn’t, what does this mean to us? I mean if x and y make a sale a sale, one can’t just pretend one occurred when it didn”t for numerous reasons, and one which newly strikes me is the possible / potential tax consequence to the depositor if no exchange actually occurred. According to these current-event assignments, no exchange previously occurred. Well, something for serious defenders to chew on. I got this by looking at a tax code under a search for I forget what.

  8. Interesting JG

    I know nothing, and I don’t even think I know something.
    I do not give legal advice, because I do not know legal things.
    [don’t want to. don’t plan to]

    A power delegated cannot be again delegated (my butchered way of stating it)

    So it may be introduced, but some backtracking of the authority, I doubt it initially came from CEO who probably has to get it from Board of Directors.

    It’s just more paperwork to confuse, in my opinion.
    Remember, if they produce something and it’s not disputed, the paperwork stands as valid in their court business.

    Discovery – not possible in court – but discovery of who issued the POA would probably determine they had no authority to issue it, and probably didn’t have their own POA in the first place.

    I’m reminded the IRS pressed corporations to name one people

    (not person/persons are corporations, associations, conservatorships/statutory [not real – have a body – but no hands, legs, feet] like corporate bodies, arms of corporations – still missing other limbs and mostly created on paper)

    The IRS wanted corporations to name one people that the IRS would go to for all tax issues, and that people would have the power to make decisions and give the IRS access to any documents they sought and all kinds of stuff. I can guarantee ya, that power delegated could not be delegated to anyone else by the one it was given to do the job.

    They know how to give power of attorney (POA) to specific people.
    Question the POA. Read that link for clarity.

    Trespass Unwanted

  9. Arizona Statutes

    44-1403. Establishment, maintenance or use of monopoly

    The establishment, maintenance or use of a monopoly or an attempt to establish a monopoly of trade or commerce, any part of which is within this state, by any person for the purpose of excluding competition or controlling, fixing or maintaining prices is unlawful.

  10. I have no good info on ‘scratch and dent mtgs’, but imo any loan in default, at least long-term, would fall in that category.
    Nationstar has produced a “limited POA” from US Bank regarding a zillion alleged trusts, so now we can add POA’s to our studies. Yawn.
    So to the extent they find it beneficial, we can look forward to these for some time to come (and argue about what the POA authorizes).
    Interestingly, at least imo, in the case where I found this, NS (the servicer!) was the assignor to US Bank as trustee after the execution of the POA.

  11. In a breach of contract case…… enforce
    .I want things filed or I want my money back.

    How much does KC owe?

  12. Think JG. ..THINK!

    The unfilled deed was granted by the Estate to the CAPITAL ASSET funding …….

    Think HELOC

    Pay tax
    Keep insured.

  13. You should have played by the rules IAN. ..Kondaur Capital was my 1st kill on the job. To you….Nodda!!!

  14. Need consent (lack of denial) from ALL TRUSTEES.

    Self appointed trustee HAS NO AUTHORITY TO ACT FOR ME!!!!!

  15. Jg- any links to well-argued “scratch and dent” mortgages? What, if anything the courts have ruled? I know Kondaur Capital deals in these loans, but am looking to find something more definitive than their info. Thx

  16. TU. …. Me either! I said NO!
    The day husband and wife need separate council..
    Theye are FC the Estates…..has nothing to do with the house.

    I revoked my trustees duties the day the wanna be acted against the interest of the trust\estate.

  17. JG,

    Where are you seeing reference of them showing up with POAs.

    I did not give POA to the self appointed substitute trustee to take any action to transfer my property to their client who did not loan me any ‘thing’.

    I’m finding that now that the CFPB is identifying all the ‘debt collectors’, these local agencies that like to write tickets and hand them to the courts, are going to find they could be placed under CFPB for creating the debt without POA showing where they have the right to claim they are billing us for a service without having a contract with us, or a POA from the agency they claim to be enforcing the rules for.

    This is getting interesting. They will not be able to fleece us much longer as we unravel their perceived control structure.

    Where are you seeing them ‘trying to cya’ [cover your a..zzz] with a POA?

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, State, Independent, In Jure Proprio, Jure Divino

  18. “Grant of specific authority.

    1.  An agent under a power of attorney may do the following on behalf of the principal or with the principal’s property ONLY if the power of attorney EXPRESSLY grants the agent the authority and exercise of the authority is not otherwise prohibited by another agreement or instrument to which the authority or property is subject:

    (d) Create or change a beneficiary designation;

    (e) Delegate authority granted under the power of attorney;

    (g) Exercise fiduciary powers that the principal has authority to delegate; or

    (h) Disclaim property, including a power of appointment.”

    Of course I’m thinking of MERS’ agency claim first and foremost, which doesn’t imo rise to att in fact (let alone agency) and is not signed by the alleged principal in the first place, certainly not in the dot. ( I have to admit that I’m confused by the word “agent” in No. 1 because I’ve always thought of one with a poa as an att in fact, not an “agent”.
    The law cited above isn’t from Florida, but Florida seems to have some interesting laws on agency and POA’s, btw.

  19. “The Trust Agreement has been duly and validly authorized by all
    necessary action on the part of the Company and, when duly executed and delivered by the Company, the Trustee, the Master Servicer, and any other party thereto, the Trust Agreement will constitute a legal, valid and binding agreement of the Company, enforceable against it in accordance with its terms……”

    The issuance and sale of the Certificates have been duly authorized
    by all requisite corporate action on the part of the Company and,
    when duly and validly executed and authenticated in accordance with
    the terms of the Trust Agreement and delivered against payment
    therefor pursuant to the underwriting agreement dated ……
    2005, between the Company and Lehman Brothers Inc., and a terms
    agreement dated 2006 between the Company and XXXXXX Corp., the Certificates will be duly and validly issued and outstanding,
    and entitled to the benefits of the Trust Agreement…”;

    Maybe what’s seeing de facto amendment (by the use of limited but still fairly broad POA’s allegedly executed by trust trustees) is more the Trust Agreement than the PSA.

  20. Banksters are coming up with alleged poa’s from alleged trusts. These poa’s are not recorded, but are submitted in litigation (say).

    How do we know
    1) the trust exists as a bona fide, ongoing entity?

    2) the party signing for the trust is authorized to do so ( do we have this luxury – of making an issue of this one?)

    3) If the party executing a poa as trustee of the trust and thus on behalf of a trust IS authorized to execute documents on behalf of the trust and its trustee, how can we know that party isn’t exceeding the trustee’s actual authority?

    Aren’t this legit questions for which answers are warranted? I’ve already mentioned that we don’t even know if “Structured Asset Mtg Loan Trust 1254-6” is a viable entity in the first place (such that it’s a proper party to be a transferee or to enforce a contract).

    These (limited) POA’s allege to authorize others (particularly services of the alleged but unproved trust) to do x, y, and z, which “x,y, and z” I’ve also opined is, whether allowable or not, de facto amendment to the PSA. But my charge is that is it UNlawful amendment to the PSA. Is it factual that amendment, say five years after a closing date, and significantly AFTER the offering and purchase of the certificates, is prohibitted? If it’s permissable as to the specific laws relevant to
    REMIC’s (re: new ‘stuff’ after those events), does other common law preclude a sec’n trust from delegating his own responsibility (to the extent the POA authorized the trustee to do what he is now delegating)? Agents, for example, may only delegate administerial
    duties and that’s it, not the corpus of the job they accepted.

    IF they (de facto amendments) are allowable, must these POA’s be recorded prior to their “use”?* The activities allegedly authorized by other parties in these POA’s imo carry the same mandate for general notice to the populace as if I were using a POA to deed my neighbor’s house to his buyer.

    *to my knowledge, they don’t specifically authorize alienation/ sale of the principal’s interest, but I’d be surprised if that isn’t tried under the POA or give rise to arguments re: credit bid assignments.

  21. E.Tolle- they post that they have reblogged in order to get traffic to their website.

  22. ET. … Bad hair day? It seems you are looking to pick a fight…..bullying littlepeople? Really? Bankster Behavior!!!
    Shame on You!!!!

    PS. .. What’s in the kitty stays in the kitty.
    You need not worry about my sock drawer….

  23. I’m wondering……why do people post that they’ve re-blogged a website? Does anyone care? What on earth could the purpose be?

    And why would you do it with the comment, “And the beat goes on….”

    Now I have that old 70’s Sonny and Cher song on my mind for no reason whatsoever. Just because someone re-blogged, whatever in the hell that means.

  24. Reblogged this on littlefolksblog and commented:
    And the beat goes on……

  25. There seems to be a great deal of hair splitting in this one. We can use all the loss mitigation rights we can get. The homeowners got a good judge.

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