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Wednesday, October 22, 2008

Get your gloves on and start training for the fight of your life because foreclosure defense is going to be no easy battle. Make no bones about it, you are definitely fighting against one of the toughest and most powerful opponents in the world.

Your lender!

“An Informed Consumer is a Powerful Consumer” - Get Educated and Fight Back!

1. Truth in Lending Act (TILA) - Does your loan have legal violations? Are you the victim of predatory lending? Did you know that 90% of victims do not even know they are victims? Discover how the Truth in Lending Act can help you with your mortgage or to stop foreclosure.

The federal Truth In Lending Act was originally enacted by Congress in 1968 as a part of the Consumer Protection Act. The law is designed to protect consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangement and all costs.

This is the most abused laws by lenders and the one that has the most teeth.

Homeowners can use this defense even if they are not late on their mortgage and an effective tool to bring litigation against their lender or to mediate a loan modification.

This is one defense I am sure the lender funded Hope Now and non-profit, 995-Hope band of merry do gooders do not share with you as you call them for help. I know, because these same homeowners call us daily because they have been turned away by these same people and we use the forensic mortgage audit to discover Truth in Lending Act violations as our weapon of choice against “unhelpful” and “predatory” lenders or servicers.

Here are some very important Truth in Lending Act cases that the banks are shaking in the ring as they wait for the fights to start.

Class Action Under the Truth in Lending Act

Andrews v. Chevy Chase Bank, FSB (2007 WL 112568, E.D. Wisconsin, January 16, 2007).

Borrowers alleged that the lender: (1) failed to properly disclose the payment schedule because the schedule did not reflect that the required payments were due monthly; (2) did not clearly disclose the APR and variable rate feature, based in part on disclosures reflecting a note rate of 1.950% and a five year fixed period that applied to the payment and not the rate; (3) added information to the TILA disclosure that was not directly related to the information required to be disclosed (i.e., the initial discounted interest rate of 1.950% set forth as the note rate); and (4) failed to properly disclose the possibility of negative amortization.

The federal district court agreed with the first three allegations and determined that the loan was rescindable because of the violations. The court further determined that this matter was appropriate for class certification, finding nothing in the language of the TILA that precludes the use of the class action mechanism to obtain a judicial declaration of whether a TILA error entitles each member of the class individually to seek rescission.

The MBA and other industry trade groups have 2 filed an amici curiae brief requesting that the United States Court of Appeals for the Seventh Circuit overturn the class certification.

Right to Rescind After Loan Pay-Off

Barrett v. JP Morgan Chase Bank, N.A. (445 F.3d 874, 6th Cir., April 18, 2006). The borrowers refinanced their mortgage with Bank One in May 2000 and again in January 2001. In May 2001, the borrowers refinanced the loan with another lender, and Bank One released its security interest in their home. The borrowers requested that the Bank One loans be rescinded based on alleged TILA violations.

Bank One responded that because both loans were refinanced, and the security interest released, there was nothing left to rescind. The district court agreed, but the United States Court of Appeals for the Sixth Circuit reversed.

The Sixth Circuit stated that nothing in the TILA or its implementing regulations provides that the act of refinancing extinguishes an unexpired right to rescind, and that the right to rescind gives consumers the right to recover fees in addition to the right to the release of the security interest.

2. Challenge the Ownership of Your Note - Does your lender really own your mortgage? Are you sure? Why don’t you make them prove it?

Aaron Krowne and I first broke the story about the Ohio ruling in which Judge Christopher A. Boyko of the Eastern Ohio United States District Court, on October 31, 2007 dismissed 14 Deutsche Bank-filed foreclosures in a ruling based on lack of standing for not owning/holding the mortgage loan at the time the lawsuits were filed.

Judge Boyko issued an order requiring the Plaintiffs in a number of pending foreclosure cases to file a copy of the executed Assignment demonstrating Plaintiff (Deutsche Bank) was the holder and owner of the Note and Mortgage as of the date the Complaint was filed, or the court would enter a dismissal.

April Charney, a powerful legal aid attorney and foreclosure defense pioneer in Jacksonville Florida said this about the Ohio rulings, “This court order is what I have been saying in my cases. This is rampant fraud on every court in America or non-judicial foreclosure fraud where the securitized trusts are filing foreclosures when they never own/hold the mortgage loan at the commencement of the foreclosure.”

Charney said, “That means that the loans are clearly in default at the time of any eventual transfer of the ownership of the mortgage loans to the trusts. This means that the loans are being held by the originating lenders after the alleged “sale” to the trust despite what it says per the pooling and servicing agreements and despite what the securities laws require.”

“This also means that many securitized trusts don’t really, legally own these bad loans.”

She went on to say, “In my cases, many of the trusts try to argue equitable assignment that predates the filing of the foreclosure, but a securitized trust cannot take an equitable assignment of a mortgage loan. It also means that the securitized trusts own nothing.”

Now, this is quickly becoming a preferred punch of choice used by cleverly trained homeowners and aggressive heavy weight attorneys to bring lenders to their knees with a swift jab to the chin during the foreclosure process.

I can almost guarantee that your lender or servicer will not want to see you in the foreclosure ring if you have been training using the above fighting techniques.

Wednesday, October 22, 2008 6:14:56 PM (Pacific Standard Time, UTC-08:00)

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Foreclosure Defense Tactics

Wednesday, October 15, 2008

Qualified Written Request

Section 6 of RESPA provides borrowers with important consumer protections relating to the servicing of their loans. Under Section 6 of RESPA, borrowers who have a problem with the servicing of their loan (including escrow account questions), should contact their loan servicer in writing, outlining the nature of their complaint. The servicer must acknowledge the complaint in writing within 20 business days of receipt of the complaint. Within 60 business days the servicer must resolve the complaint by correcting the account or giving a statement of the reasons for its position. Until the complaint is resolved, borrowers should continue to make the servicer’s required payment.

The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. RESPA covers loans secured with a mortgage placed on a one-to-four family residential property. These include most purchase loans, assumptions, refinances, property improvement loans, and equity lines of credit. HUD’s Office of RESPA and Interstate Land Sales is responsible for enforcing RESPA.

Loan servicing complaints

A borrower may bring a private law suit, or a group of borrowers may bring a class action suit, within three years, against a servicer who fails to comply with Section 6’s provisions. Borrowers may obtain actual damages, as well as additional damages if there is a pattern of noncompliance.

The following is a sample qualified written request from you, the borrower, to a lender. Use this format to address complaints under the Real Estate Settlement Procedures Act (RESPA). Be sure to read more about RESPA, and your rights under this Act, elsewhere on the RESPA site.

Attention Customer Service:

Subject: [Your loan number]

[Names on loan documents]

[Property and/or mailing address]

This is a “qualified written request” under Section 6 of the Real Estate Settlement Procedures Act (RESPA).

I am writing because:

Describe the issue or the question you have and/or what action you believe the lender should take.

Attach copies of any related written materials.

Describe any conversations with customer service regarding the issue and to whom you spoke.

Describe any previous steps you have taken or attempts to resolve the issue.

List a day time telephone number in case a customer service representative wishes to contact you.

I understand that under Section 6 of RESPA you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

Sincerely,

[Your name]

Here is an example from a Loan Safe member:

Attention Customer Service:

Subject: Loan number xxxxxxxxxx

xxxxxxxx xxxxxxxx xxxxxxxxxxx

Xxxxxxx xxxxxxxxxx xxxxxxxxxx

x xxxxxxx

Xxxxxxxx, TX xxxxx

This is a “Qualified Written Request” under Section 6 of the Real Estate Settlement Procedures Act (RESPA).

I am writing to request:

(1) Copies of all documents pertaining to the origination of my mortgage including my loan application, Right to Cancel, Deed of Trust, note, adjustable rate note, addendum to the note for the interest only payment period, Truth in Lending statements, Good Faith Estimate (GFE), HUD 1, appraisal, and all required disclosures and rate sheets associated with this transaction for the above referenced loan. The copies should be legible and all documents shall be copied in their entirety.

(2) A copy of the loan history including all payments made, all fees incurred, what has been paid out of the escrow account, and how all payments were applied. This information should cover the entire life of the loan.

I have reason to believe that the loan terms were misrepresented to me at the time of application and further obscured and/or modified prior to signing. I believe that our income was inflated on the application. I also have reason to believe that certain statements were not provided for my approval prior to closing, and that signatures may have been forged on various documents. It is also my belief that certain documents may have not presented at all. Additionally, I believe that a notary was not present to witness my signatures on several pertinent documents and that this transaction did not take place in a legitimate title/escrow/real-estate office with any title/escrow/real-estate professionals therefore leaving us ill advised at the time of closing.

I started the process of trying to renegotiate this loan in 11/1/07 when I spoke with your HOPE department. On 11/03/07, I faxed a letter of hardship, along with bank statements and pay stubs as she recommended. I was advised that someone would contact me within 7-10 working days and there would be no problem getting assistance to bring the account current and capitalize the negative escrow. On 12/14/07, I called back, as I hadn’t heard from anyone. I was told my payment was going to be 2300.00$$. I hung up the phone in despair and in tears. On 1/10/08 I visited the local HUD office trying to get help there. Countrywide’s system was down so I returned the next day. This is 160 mile round trip and 2 days off work. This time the CSR set up a repayment plan but now the payments are to be 2700.00$$$. If we could make a payment of 2700.00 we would not be delinquent. Since January I have again spoken to the HOPE department, Home Retention, Work Out Department. And any one else who would listen. I have involved 995HOPE as well as Acorn. I have documented phone calls and kept records. In addition I joined a watchdog website called loansafe.org.

Most recently you COUNTRYWIDE have sent a demand for payment. Again if we hade the 2700.00 x 2 + late fees + other various fees we would not be delinquent. The situation is urgent. We and COUNTRYWIDE can not drag there feet in this process. We do not want to incur further inflated fees by our home going into foreclosure we want to find a solution pleasing to COUNTRYWIDE, ourselves, as well as the investors that hold the loan. It would behoove all parties to come to applicable solution today!!!

We are very proactive in keeping our family home. We do not want to loose it nor do we have to we can make a reasonable payment.

I have been given the runaround by the voice recognition call routing system on numerous occasions. I have talked to various agents with different versions of what the loan modification process really entails. I have been re-routed to the wrong department or individual at dozens of times. I have been disconnected from helpful individuals, when I unsuccessfully tried to call her back I am told it is because she has no extension. I have been told that the negotiator handling my loan is unavailable to speak to anyone via telephone. All of these calls are documented in your records, as they are in mine. The customer service provided to me has been less than adequate. Let this letter serve to document my request to have my communications responded to in a timely manner.

I can be reached at xxx-xxx-xxxx this is my cell whenever a COUNTRYWIDE wishes to contact me. If I do not answer I will call back promptly if a message is left with the phone number that I can call and get thru on. My email address is xxxxxxxx@aol.com, and is the best way to contact me.

I understand that under Section 6 of RESPA you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

In closing we are not trying to get out of paying anything only having the loan modified the interest rate lowered. We want a payment we know we can live with one that will not get us in trouble again

sincerely,

REMEMBER: This letter SHOULD NOT be included with your mortgage payment, but should be sent separately to the customer service address.

You SHOULD continue to make the required mortgage and escrow payment until the request is resolved.

You may bring a private right of action under Section 6, if you suffer damages due to the lender’s servicing of the loan. See the RESPA statute and regulations.

Filing a RESPA complaint

Persons who believe a settlement service provider has violated RESPA in an area in which the Department has enforcement authority (primarily sections 6, 8 and 9), may wish to file a complaint. The complaint should outline the violation and identify the violators by name, address and phone number. Complainants should also provide their own name and phone number for follow up questions from HUD. Requests for confidentiality will be honored. Complaints should be sent to:

Director, Office of RESPA and Interstate Land Sales

US Department of Housing and Urban Development

Room 9154

451 7th Street, SW

Washington, DC 20410

Important Tips From HUD:

Do ask lenders what fees they charge, as well as the interest rate and points, when shopping for a loan.
Do ask the builder whether you are required to use a certain provider in order to get a special concession.
Do compare the costs of different settlement service providers before agreeing to use one to whom you were referred.
Do ask to see the HUD-1 Settlement Statement a day before settlement, and compare the charges with those listed on the Good Faith Estimate.
Do question the lender and settlement agent about any charges you do not understand.
Keep making your mortgage payment on time, even if you have sent a complaint to your lender.
Do forward any tax or insurance bills you receive, immediately to your lender. (If the lender is supposed to pay the bill).
Do check your annual escrow account statement for mistakes.
Do make a “qualified written request” when asking your lender for information or making a complaint.
Do read the FAQs about Escrow Accounts carefully before filing an escrow complaint with a banking or government regulator.

The law from HUD: 12 usc section 2605 servicing of mortgage loans and administration of escrow accounts

Source HUD

(e) Duty of loan servicer to respond to borrower inquiries

(1) Notice of receipt of inquiry

(A) In general

If any servicer of a federally related mortgage loan receives a qualified written request from the borrower (or an agent of the borrower) for information relating to the servicing of such loan, the servicer shall provide a written response acknowledging receipt of the correspondence within 20 days (excluding legal public holidays, Saturdays, and Sundays) unless the action requested is taken within such period.

(B) Qualified written request

For purposes of this subsection, a qualified written request shall be a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, that–

(i) includes, or otherwise enables the servicer to identify, the name and account of the borrower; and

(ii) includes a statement of the reasons for the belief of the borrower, to the extent applicable, that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

(2) Action with respect to inquiry

Not later than 60 days (excluding legal public holidays, Saturdays, and Sundays) after the receipt from any borrower of any qualified written request under paragraph (1) and, if applicable, before taking any action with respect to the inquiry of the borrower, the servicer shall–

(A) make appropriate corrections in the account of the borrower, including the crediting of any late charges or penalties, and transmit to the borrower a written notification of such correction (which shall include the name and telephone number of a representative of the servicer who can provide assistance to the borrower);

(B) after conducting an investigation, provide the borrower with a written explanation or clarification that includes–

(i) to the extent applicable, a statement of the reasons for which the servicer believes the account of the borrower is correct as determined by the servicer; and

(ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower; or

(i) information requested by the borrower or an explanation of why the information requested is unavailable or cannot be obtained by the servicer; and

(ii) the name and telephone number of an individual employed by, or the office or department of, the servicer who can provide assistance to the borrower.

(3) Protection of credit rating

During the 60-day period beginning on the date of the servicer’s receipt from any borrower of a qualified written request relating to a dispute regarding the borrower’s payments, a servicer may not provide information regarding any overdue payment, owed by such borrower and relating to such period or qualified written request, to any consumer reporting agency (as such term is defined under section 1681a of title 15).

(f) Damages and costs

Whoever fails to comply with any provision of this section shall be liable to the borrower for each such failure in the following amounts:

(1) Individuals

In the case of any action by an individual, an amount equal to the sum of–

(A) any actual damages to the borrower as a result of the failure; and

(B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not to exceed $1,000.

(2) Class actions

In the case of a class action, an amount equal to the sum of–

(A) any actual damages to each of the borrowers in the class as a result of the failure; and

(B) any additional damages, as the court may allow, in the case of a pattern or practice of noncompliance with the requirements of this section, in an amount not greater than

$1,000 for each member of the class, except that the total amount of damages under this subparagraph in any class action may not exceed the lesser of–

(i) $500,000; or

(ii) 1 percent of the net worth of the servicer.

(3) Costs

In addition to the amounts under paragraph (1) or (2), in the case of any successful action under this section, the costs of the action, together with any attorneys fees incurred in connection with such action as the court may determine to be reasonable under the circumstances.

(4) Nonliability

A transferor or transferee servicer shall not be liable under this subsection for any failure to comply with any requirement under this section if, within 60 days after discovering an error (whether pursuant to a final written examination report or the servicer’s own procedures) and before the commencement of an action under this subsection and the receipt of written notice of the error from the borrower, the servicer notifies the person concerned of the error and makes whatever adjustments are necessary in the appropriate account to ensure that the person will not be required to pay an amount in excess of any amount that the person otherwise would have paid.

(g) Administration of escrow accounts

If the terms of any federally related mortgage loan require the borrower to make payments to the servicer of the loan for deposit into an escrow account for the purpose of assuring payment of taxes, insurance premiums, and other charges with respect to the property, the servicer shall make payments from the escrow account for such taxes,insurance premiums, and other charges in a timely manner as such payments become due.

(h) Preemption of conflicting State laws

Not withstanding any provision of any law or regulation of any State, a person who makes a federally related mortgage loan or a servicer shall be considered to have complied with the provisions of any such State law or regulation requiring notice to a borrower at the time of application for a loan or transfer of the servicing of a loan if such person or servicer complies with the requirements under this section regarding timing, content, and procedures for notification of the borrower.

Wednesday, October 15, 2008 6:24:29 PM (Pacific Standard Time, UTC-08:00)

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Qualified Written Request

Wednesday, September 17, 2008

Avoid Foreclosure Scams

OCC Consumer Tips for Avoiding Foreclosure Rescue Scams
Foreclosures are increasing nationwide, and so are scams that promise to “rescue” homeowners from foreclosure. What these scams do is take your money, ruin your credit record, and wipe out any equity you have in your home.

Foreclosure con artists take advantage of people who have fallen behind on their mortgages and face foreclosure. Con artists know that people in these situations are vulnerable and likely to be desperate. Potential victims are easy to find: mortgage lenders publish notices before foreclosing on homes. After reading such notices, con artists approach their targets in person, by mail, over the telephone, or by e-mail. They advertise their services on Web sites or publications. They often refer to themselves with titles that sound official, such as “foreclosure consultant” or “mortgage consultant,” and market themselves as a “foreclosure service” or “foreclosure rescue agency.”

Your mortgage lender – or any legitimate financial counselor – can help you find real options to avoid foreclosure. If someone offers to negotiate with your lender and offers to arrange to stop or delay foreclosure for a fee, carefully check his or her credentials, reputation, and experience. To protect yourself, follow the recommendations contained in this Consumer Advisory.

WATCH OUT FOR FORECLOSURE RESCUE SCAMS

Lease-Back or Repurchase Scams – Be very suspicious if someone offers to pay your mortgage and rent your home back to you. This scheme often involves signing the deed to your home over to the con artist. The con artist may promise to sell your home back to you, but this may be very difficult, if not impossible, under the terms of the contract.
Signing over the deed gives the con artist the power to evict you, raise your rent, sell the house, or steal the equity you have in your home. You will still be responsible for your mortgage, so if the con artist stops paying it, your lender would have the right to foreclose on your home, and the foreclosure and any other problems would go on your credit record.

Refinance Fraud – Look out for people posing as mortgage brokers or lenders and offering to refinance your loan so you can afford the payments. Con artists may trick you into signing over the ownership of your home by saying that you are signing documents for a new loan.
Signing over the deed to your home exposes you to the dangers described above. Even if you are a victim of fraud, you could still lose your home.

Bankruptcy Schemes – Several scams attempt to abuse the bankruptcy laws. For example, a con artist may ask you to give a partial interest in your home to one or more persons. Each holder of a partial interest can then file bankruptcy, one after another. The bankruptcy court will issue a “stay” order each time to stop foreclosure temporarily. However, the stay does not excuse you from making payments or from repaying the full amount of your loan. In another kind of scam, a con artist may offer to obtain refinancing or negotiate a payment plan with your lender. If you may make payments to the con artist, he or she may keep the money rather than pay the lender on your behalf. The con artist may even file a bankruptcy case in your name, without your knowledge, as a part of the scam.
Bankruptcy laws provide important protections to consumers. Scams can only temporarily delay foreclosure, and they may keep you from using bankruptcy laws legitimately to address your financial problems. Signing over ownership of your home, or even partial ownership, can result in serious financial harm.

HOW TO PROTECT YOURSELF FROM SCAMS

Know what you are signing. Read and understand every document you sign. If a document is too complex, seek advice from a lawyer or an approved, trusted financial counselor. Never sign documents with blank spaces that can be filled in later. Never sign a document that contains errors or false statements, even if someone promises to correct them later.
Get promises in writing. Oral promises and agreements relating to your home are usually not legally binding. Protect your rights with a written document or contract signed by the person making the promise. Keep copies of all contracts you sign.
Make your mortgage payments directly to your lender or the mortgage servicer. Do not trust anyone else to make mortgage payments for you.
Be very careful about signing over your deed. Foreclosure scams often require you to sign over ownership of your home to a con artist or another third party. Never sign over your deed without getting the advice of your own lawyer, financial advisor, or other independent person that you know you can trust. Understand the terms of the deal you are making. By signing over your deed, you lose your rights to your home and any equity built up in the home.
Report suspicious activity to the Federal Trade Commission and to your state and local consumer protection agencies. Reporting con artists and suspicious schemes helps prevent others from becoming victims.
HOW TO FIND LEGITIMATE HELP FOR YOUR FINANCIAL PROBLEMS

Contact your mortgage lender or mortgage servicer as soon as you think you are unable to make your mortgage payment. Lenders are often in the best position to help, especially if you are current on your loan or not seriously late on your payments. Your mortgage lender or mortgage servicer may be able to identify options to help you bring the loan current or to modify your loan.
Contact a legitimate housing or financial counselor to help you work through your financial problems. To find one:
□ Call (800) 569-4287, or visit HUD Housing Counseling to find counselors approved by the U.S. Department of Housing and Urban Development (HUD).

□ Call the Homeownership Preservation Foundation at (888) 995-HOPE, or visit Homeownership Preservation Foundation, to reach a nonprofit, HUD-approved counselor through HOPE NOW, a cooperative effort of mortgage counselors and lenders to assist homeowners.

Visit the following Web sites for information:
□ NeighborWorks America, NeighborWorks® America: Strengthening Communities and Transforming Lives.

□ Federal Trade Commission, Mortgage Payments Sending You Reeling? Here’s What to Do.

Finally, if you have a complaint or question involving a national bank and cannot resolve it directly with the bank, contact the OCC’s Customer Assistance Group by calling (800) 613-6743, by e-mailing customer.assistance@occ.treas.gov,
or by visiting Help and Frequently Asked Questions about National Banks from OCC's HelpWithMyBank.gov.

Wednesday, September 17, 2008 6:26:14 PM (Pacific Standard Time, UTC-08:00)

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Avoid Foreclosure Scams

Saturday, January 26, 2008

Welcome

Hello and welcome to Nextwave Financial info site. This section is designed to post information for homeowners who are behind on their mortgage and seeking help. Please post relevant information and keep postings "clean"

Saturday, January 26, 2008 4:11:45 PM (Pacific Standard Time, UTC-08:00)

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