Tonight! Q&A on Prelitigation Strategies — QWR, DVL and Complaints to CFPB and State AG 6PM EST 3PM PST

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Tonight’s Show Hosted by Neil Garfield, Esq.

Call in at (347) 850-1260, 6 pm Eastern Thursdays

As a follow-up to our FREE presentation CLE webinar on Prelitigation Strategies and Practices, we offer an open mike Q&A on tonight’s show. Please think about your questions in advance and refrain from long monologues about your case.

As an introduction let me state the obvious premise of this work: If as a consumer you have executed a promissory note and mortgage (or deed of trust) and you think that there is a loan account receivable somewhere that is owned and maintained by some lender or creditor, you are most likely incorrect.

Most homeowners make the mistake of thinking that the QWR and DVL are simply “form letters.” If that were the case, we would provide you with the template and you could send it out yourself. And back in the old days (pre-1995) that would be entirely appropriate for settling any disputes regarding the proper allocation of payments or any other issues.

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The statutory foundation for the creation of the QWR and the DVL was designed to resolve potential disputes between the debtor and the creditor.
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Today, the situation is different. We already know that there is no valid claim against the homeowner and that there is no valid claimant. We also already know that any company that is claimed to be a “servicer” neither has any legal authority to act as such (from anyone) nor does it perform any functions that are normally attributed to a company claiming to be a servicer.
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So while the legislative intent for providing consumer remedies in RESPA and the FDCPA was designed to resolve disputes, the procedures contained within those statutes are now used by homeowners to start a dispute — because, without a history of disputing the claims made to administer, collect or enforce any alleged obligation due from the homeowner, it is much harder to mount an effective defense.
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So the idea behind the sending of a QWR and DVL is to identify specific issues that you already know will not be answered — which gives you the right to file a lawsuit for violation of RESPA and FDCPA. In order to do that effectively, the homeowner needs to distill the case analysis down to the points that are relevant to those statutes. Although this is not exactly the same as preparing a lawsuit, the drafting of the QWR and DVL requires research, investigation, and very careful wording.
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Some homeowners have been able to do it themselves, but most are unable to do so because they lack the experience, knowledge, and resources to present direct questions concerning the existence of the loan account receivable, the status of the account, the ownership, and the authority to administer, collect or enforce any monetary obligations arising from the alleged existence of the account.
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Most of this is confusing to homeowners because they have never been to law school, received any practical training in trial practice nor have most of them ever been involved in any litigation. When most homeowners send the QWR or the DVL and they fail to get a direct answer or proper response that answers the specific questions asked in those letters, they consider the entire effort a failure and a waste of time — when in fact they just had a win. They have established that the parties seeking to make claims about administration, collection, or enforcement of the alleged obligation are unwilling or unable to provide any corroboration of such claims.
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IMPORTANT PRACTICE NOTE: When the QWR or DVL is used as a general discovery device or is used to pontificate about disputed views, it is generally dismissed by both the recipient and any court reviewing it as an unqualified written request under RESPA and not a demand for debt validation under the FDCPA. This is where the homeowners get themselves into trouble. The general attitude is that the “you know what I mean” argument is sufficient. It isn’t.
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Debt Validation Letter– Creditor or Collector?

the bailout and insurance money was paid not to the investors or the borrowers, it was paid to the investment bankers who never were at risk. I’m beginning to think that the ultra-sophisticated investors have some dog in this race that prevents them from entering the foreclosure market directly to recover or settle their investments at a much higher rate of recovery than that offered by Wall Street.Maybe they were not deceived after all and the investment bank can prove it.

A short note on why you should send one in addition to the QWR.

The response is usually that a DVL is inappropriate in a mortgage case. The mistake universally made is that this response has merit. It doesn’t. And the reason is that it would only be true if the pretender lender was actually a party to the mortgage transaction. In order to be a party to the mortgage transaction it must be the creditor or the debtor.

If they want to take the position that the the DVL does not apply then the proper response is an objection to that statement and a motion to strike it from the record. The basis of the objection is that the lawyer has failed to establish that his client is a party to the transaction. So now he either must give up or withdraw his objection to the demand that the DVL be answered OR prove that his client is a creditor.

Anyone other than a creditor in a mortgage transaction would of necessity be aan agent or at least alleging some agency relationship which makes them a collector — which is exactly why the Consumer Debt Protection Act was written.

Thus if you can get the pretender lender lawyer to state that the DVL doesn’t apply, your response should be good, now he has raised an issue of fact entitling you to discovery and an evidentiary hearing on the issue fo whether his client is a creditor or a collector.

And by the way, you should also note that the statute requires not validation, but verification. validation would merely be a statement from the same party that says, “Yes, that’s what you owe, now pay up.” Verification requires that the collector actually inquire from the principal, disclose the principal and provide a signed, sworn statement that the information is true, providing the details of what was done, who they spoke with, where the files are and how anyone knows the answers.

The usual trick by the foreclosure mills is to get a signature from anyone on a vague document that doesn’t really say anything and doesn’t really say the signer knows anything. Then the lawyer goes to court and tells the court what it says, and if you don’t object, the lawyer’s statement will be taken as a true summary of the contents. Read the document carefully.

It will usually be vague as to the nature of the signor’s employment, and use words like “familiar with” INSTEAD OF WORDS THAT CONNOTE THAT THEY HAVE PERSONAL KNOWLEDGE.  THE PERSON SIGNING PROBABLY HAS NO KNOWLEDGE AND EVEN THEY TYPED OUT THE STATEMENT IT WAS PROBABLY DICTATED BY SOMEONE ELSE WHO ALSO DIDN’T HAVE ANY PERSONAL KNOWLEDGE. THUS THE DOCUMENT AND THE TESTIMONY, IF ANY, ARE HEARSAY AND DO NOT FALL WITHIN ANY EXCEPTION.

Lawyers Beware: A firm grasp of the laws and rules of evidence and the objections that go with that knowledge is the key to winning these cases. Their goal is to prevent you from getting the real information and to keep the investor and the borrower separated by a veil of secrecy or as Countrywide was so fond of saying “confidentiality.”

If the investor and borrower were to actually get together, the investor would find out first that only a small portion of his investment was used to fund mortgages — the rest being kept as fees and betting money that the loan would go bad.

The second thing they would discover as they drilled down further is that the bailout and insurance money was paid not to the investors or the borrowers, it was paid to the investment bankers who never were at risk. I’m beginning to think that the ultra-sophisticated investors have some dog in this race that prevents them from entering the foreclosure market directly to recover or settle their investments at a much higher rate of recovery than that offered by Wall Street. Maybe they were not deceived after all and the investment bank can prove it.

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