The Rush to Foreclosure: Wells Fargo Loses the Argument on Trial Modifications

As Danielle Kelley, Esq. (Tallahassee) has repeatedly predicted, the trial modification practices of the big banks are getting them into hot water. Scenarios vary. But one typical scenario  is that the trial modification is “approved” (which under current law means that it has been through underwriting) and the borrower makes the trail payments. Then the bank says the “investor” (with whom they have most likely NOT been in contact) has denied the modification. After receiving the trial payments and assuring the borrowers that they were safe in their home, the bank then forecloses. Many homeowners, unaware that they in fact probably have a binding contract with the bank on the modification, walk away.

Kelley has won cases based upon the argument that the bank had no choice but to modify the loan according to the terms of the trial modifications — and to make any other adjustments necessary to make the numbers come out right. The important point being that the payments offered in the trial modification are the same payment they will have for the rest of the term of the loan. The Bank argued that they were under no obligation to make the trial modification permanent. The Judge was furious with the bank and its attorneys, reminding them that forfeiture of one’s home is an extreme remedy, not to be taken lightly.

Of course the game of the Banks has been, all along, that they want as many of the mortgage loans in foreclosure, because that is the only way out of potential liability for refunds and buybacks of loans that have now been “assigned” to REMIC trusts, most of which were never funded and thus lacked the capacity to originate or acquire any loans. The servicers are rushing to foreclosure sale because that is an opportunity for them to claim the proceeds of liquidation of the property to get back “servicer advances” paid while they claimed the homeowner was in default (but the creditors (investors) were being paid on time in the right amount — i.e., NO DEFAULT).

The investors are suing the broker dealers (investment banks) for fraud, mismanagement of funds, documents and title. The investors affirmatively allege that the loan documents are unenforceable but when it gets down to state court level in the foreclosure cases, those assertions by the creditors are not considered relevant by a standard that does not seem to have any support under the law but which is nonetheless applied.

In all probability no investor knows of any foreclosures nor do they get notice of how the Servicers and Trustees are forcing the cases into foreclosures where the investors do the worst, the borrowers do the worst, and the banks, trustees and servicers get to take all the spoils of the largest economic fraud in human history.  I know that sounds like hyperbole. But I will bet anything that the time will come when the real truth comes out in its entirety — and the shock and awe of the whole thing becomes apparent to everyone.

While most of the cases involving trial modifications result in confidential settlements that cannot be discussed here or I would be violating the confidentiality agreement, one case recently stands out as having been at least partially litigated now.

Borrowers Can Sue Wells Fargo Over Mortgage Modifications — Reuters

The 9th Circuit, which has been considered unfriendly to borrowers, changed course in this decision.

The 9th U.S. Circuit Court of Appeals said Wells Fargo was required under the federal Home Affordable Modification Program [HAMP] to offer loan modifications to borrowers who demonstrated their eligibility during a trial period. … the appeals court rejected the argument that Wells Fargo became bound only upon sending borrowers signed modification agreements.

 

The court said this would create “unfettered discretion” for the San Francisco-based bank to reject modifications “for any reason whatsoever – interest rates went up, the economy soured, (or) it just didn’t like the borrower.”

While a federal appeals court in Chicago reached a similar conclusion last year, the 9th Circuit decision applies in several western U.S. states – among them California, Arizona and Nevada – that have been particularly hard-hit by foreclosures.

Corvello v. Wells Fargo Bank NA et al, 9th U.S. Circuit Court of Appeals, No. 11-16234.

 

This decision, like others coming out of Federal and State courts shows a growing anger and mistrust of the banks and their attorneys that most borrowers would say is long overdue.

For people familiar with determining the present value of a flow of funds, the analysis of the modification deals is easier. The average length of time a home is held by its owner is around 7 years, but many people stay in the home for life. Just to make things easier, here is a way of looking at certain modifications that don’t seem to offer anything of value on their face.

Assuming the original mortgage was $500,000 and now with default interest, attorneys fees etc. the total demanded is $600,000 the bank might offer a low interest rate (2%-5%) with amortization for forty years at a payment you can afford. But you don’t like the deal because you were the victim of appraisal fraud so you would be accepting a mortgage and waiving your defenses and ratifying the ownership of the loan in exchange for what?

The payment over 40 years changes the equation dramatically and does address the appraisal fraud if you stay in the house for a long time. In 40 years, with even low inflation, each dollar you are spending now is going to be worth around 20 cents. And even without any organic growth in prices from demand, your house might be worth $300,000 now, will be priced in 40 years at around $1,200,000. This assumes 2% rate of inflation. The risk factors are deflation and stagnation, which at this point most economists are not predicting.

For more information on trial modifications, litigation support, or other related information contact Danielle Kelley at 850-765-1236.

 

 

 

 

 

VICTORY for Homeowners: Received Title and 7 Figure Monetary Damages for Wrongful Foreclosure

As a California appellate court decision several years ago noted, “For homeowners struggling to avoid foreclosure, this dual tracking might go by another name: the double-cross.” – See more at: http://calcoastnews.com/2013/09/onewest-bank-pays-7-figures-mortgage-fraud-case/#sthash.xcKP1Tpl.dpuf
As a California appellate court decision several years ago noted, “For homeowners struggling to avoid foreclosure, this dual tracking might go by another name: the double-cross.” – See more at: http://calcoastnews.com/2013/09/onewest-bank-pays-7-figures-mortgage-fraud-case/#sthash.xcKP1Tpl.dpuf

“As a California appellate court decision several years ago noted, ‘For Homeowners struggling to avoid foreclosure, this dual tracking might go by another name: the double-cross.'” Daniel Blackburn, http://www.calcoastnews.com, 9/11/13.

Internet Store Notice: As requested by customer service, this is to explain the use of the COMBO, Consultation and Expert Declaration. The only reason they are separate is that too many people only wanted or could only afford one or the other — all three should be purchased. The Combo is a road map for the attorney to set up his file and start drafting the appropriate pleadings. It reveals defects in the title chain and inferentially in the money chain and provides the facts relative to making specific allegations concerning securitization issues. The consultation looks at your specific case and gives the benefit of litigation support consultation and advice that I can give to lawyers but I cannot give to pro se litigants. The expert declaration is my explanation to the Court of the findings of the forensic analysis. It is rare that I am actually called as a witness apparently because the cases are settled before a hearing at which evidence is taken.
If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services. Get advice from attorneys licensed in the jurisdiction in which your property is located. We do provide litigation support — but only for licensed attorneys.
Neil Garfield, the author of this article, and Danielle Kelley, Esq. are partners in the law firm of Garfield, Gwaltney, Kelley and White (GGKW) based in Tallahassee with offices opening in Broward County and Dade County.
See LivingLies Store: Reports and Analysis

Neil F Garfield, Esq. http://www.Livinglies.me, 9/13/13

Victory in California, as we have predicted for years. Maria L. Hutkin and Jude J Basile were the attorneys for the homeowners and obviously did a fine job of exposing the truth. Their tenacity and perseverance paid off big time for their clients and themselves. They showed it is not over until the truth comes out. So for all of you who are saying you can’t find a lawyer who “gets it” here are two lawyers that got it and won. And for all those who were screwed by the banks, it isn’t over. Now it is your turn to get the rights and damages you deserve.

Maria L. Hutkin and Jude J. Basile
Maria L. Hutkin and Jude J. Basile

The homeowners won flat out at a trial — something that should have happened in most of the 6.6 million Foreclosures conducted thus far. U.S. Bank showed its ugly head again as the alleged Trustee of a trust that was most probably nonexistent, unfunded and without any assets at all much less the homeowners alleged loan. Still the settlement shows how far Wall Street will go to pay damages rather than admit their liability to investors, insurers, counterparties in credit default swaps, and the Federal Reserve.

When you think of the hundreds of millions of wrongful foreclosures that were the subject of tens of billions of dollars in “settlements” that preserved homeowners rights to pursue further damages and do the math, it is obvious why even the total of all the “settlements” and fines were a tiny fraction of the total liability owed to pension funds and other investors, insurers, CDS parties, the Federal Government and of course the borrowers who never received a single loan from the banks in the first place. If 5 million foreclosures were wrongful, as is widely suspected at a minimum, using this case and some others I know about the damages could well exceed $5 Trillion. Simple math. Maybe that will wake up the good trial lawyers who think there is no case!

Maria L. Hutkin and Jude J. Basile

A fitting announcement on the 5th anniversary of the Lehman Brothers collapse. the economy is still struggling as more than 15 million American PEOPLE were displaced, lost equity and forced into bankruptcy by imperfect mortgages that were a sham, and thus imperfect foreclosures that were also a sham. Another 15 million PEOPLE will be displaced if these wrongful, illegal and morally corrupt sham foreclosures are allowed to continue.

This case, like the recent case won by Danielle Kelley (partner of GGKW) was based upon dual tracking. In Kelley’s case the homeowners had completed the process of getting an approved modification, which meant that underwriting, review, confirmation of data, and approval from the investor had been obtained. In Kelley’s case the homeowner had made the trial payments in full and paid the taxes, insurance, utilities and maintenance of the property.

The Bank argued they were under no obligation to fulfill the final step — permanent modification. Kelley argued that a new contract was formed — offer, acceptance and the consideration of payment that the Bank received, kept and credited to the homeowner’s account. But the bank as Servicer was still accruing the payments due on the unmodified mortgage, which is why I have been harping on the topic of discovery on the money trail at origination, processing, and third party payments. 

 

The accounting records of the subservicer and the Master Servicer should lead you to all actual transactions in which money exchanged hands, although getting to insurance payments and proceeds of credit default swaps might require discovery from the investment banker. So in Kelley’s case, the Judge essentially said that if an agreement was reached and the homeowner met the requirements of a trial period, the deal was done and entered a final order in favor of the homeowner eliminating the the foreclosure with prejudice.

In this One West case the court went a little further. The homeowners were lured into negotiations, expenses and augments under the promise of modification and then summarily without notice to the homeowner sold the property at a Trustee sale under the provisions of the deed of trust. The Judge agreed with counsel for the homeowners that this was dual tracking at its worst, and that the bank did not have the option of proceeding with the sale. 

 

The homeowners were forced to vacate the property and make other housing arrangements and these particular homeowners were enraged and had the resources to do what most homeowners are too fearful to do — go to the mat (go to trial.)
One West made several offers of settlement once the Judge made it clear that the homeowners had stated a cause of action for wrongful foreclosure. Bravely the attorneys and the homeowners rejected settlement and insisted on a complete airing of their grievances so that everyone would know what happened to them. After multiple offers, with trial drawing near, OneWest finally agreed to give clear title back to the homeowners and pay $1 million+ in damages on what was a six figure loan. 

 

We now have cases in both judicial and non-judicial jurisdictions in which the homeowner was awarded the house without encumbrance of a mortgage and even receiving monetary damages in which the attorneys achieved substantial rewards on 7 figure settlements  that probably would be much higher if they ever went to trial — particularly in front of a jury. This is only one of the paths to successful foreclosure defense. I hope attorneys and homeowners take note. Your anger can be channeled into a constructive path if the lawyers know how to understand these loans, and how to litigate them.

“There’s hope. I feel their pain.” — Danielle Kelley, Esq. , partner in Garfield, Gwaltney, Kelley and White.

http://calcoastnews.com/2013/09/onewest-bank-pays-7-figures-mortgage-fraud-case/

Danielle Kelley, Esq. Swings Back at Separation of Note and Mortgage

If the banks lose the application of the UCC, which they should, they are dead in the water because they have no way to prove the transactions upon which they rely in collection and foreclosure.

Internet Store Notice: As requested by customer service, this is to explain the use of the COMBO, Consultation and Expert Declaration. The only reason they are separate is that too many people only wanted or could only afford one or the other — all three should be purchased. The Combo is a road map for the attorney to set up his file and start drafting the appropriate pleadings. It reveals defects in the title chain and inferentially in the money chain and provides the facts relative to making specific allegations concerning securitization issues. The consultation looks at your specific case and gives the benefit of litigation support consultation and advice that I can give to lawyers but I cannot give to pro se litigants. The expert declaration is my explanation to the Court of the findings of the forensic analysis. It is rare that I am actually called as a witness apparently because the cases are settled before a hearing at which evidence is taken.
If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services. Get advice from attorneys licensed in the jurisdiction in which your property is located. We do provide litigation support — but only for licensed attorneys.
See LivingLies Store: Reports and Analysis

Danielle Kelley, Esq. whom I admired before she became my law partner has again broke some old/new ground in compelling fashion. This is not legal advice and nobody should use it without consulting an attorney who is properly licensed in good standing in the jurisdiction in which the property is located and who is competent on the subject of bills and notes.

The bottom line: if the note and mortgage were intended by the law to be considered one instrument, they would be one instrument. But they are not because all the conditions in the mortgage would render the note non-negotiable under the UCC and that would be true even if the loan was actually sold, for real, with payment and an assignment. The conditions expressed in the mortgage or deed of trust render the mortgage non-negotiable. Hence an alleged transfer of the note separates the note from the mortgage because the mortgage is by definition non-negotiable. If the banks lose the application of the UCC, which they should, they are dead in the water because they have no way to prove the transactions upon which they rely in collection and foreclosure.

All of this leads us back to the “sale” of the loan because the presumption arising out of being a holder or holder in due course does not exist where the paper is non-negotiable. The Banks must allege and prove the origination and sale the old fashioned way — by alleging that on the ___ day of ___, in the year ___ XYZ loaned the homeowner $____________. Pursuant to that transaction the defendant executed a note and mortgage (or deed of trust), attached hereto and incorporated by reference. On the ___ day of ________ in the year ________, Plaintiff acquired said loan by payment of valuable consideration and received an assignment that was recorded in the public records at page ___, Book ____ of the public records of ____ County. Defendant failed or refused to make payment commencing the ___ day of ____ in the year ____. Plaintiff gave notice of the delinquency and default, provided the Defendant with an opportunity to reinstate as required by the mortgage and applicable law (copy of said notices attached). Defendant will suffer financial loss without collection of the debt for which it owns the account receivable. Pursuant to the terms of the mortgage which is attached hereto, Defendant agreed that the subject property was pledged as collateral for the faithful performance of the duties under the note, to wit: payment.

Of course the Banks refuse to do that because it opens the door to discovery to exactly what money was paid, to whom and why. AND it would show that there were no actual transactions — just shuffling of paper.

Affirmative defense

Non-negotiability of Subject Note Prohibits Plaintiff from Enforcing it Pursuant to Fla. Stat. §673, et seq and Failure to Attach Documents Pursuant to Florida Rule of Civil Procedure 1.130

With regard to all counts of the Complaint, the Plaintiff’s claims are barred in whole or in part because the subject note that the Plaintiff may produce is not a negotiable instrument and therefore the Plaintiff cannot claim enforcement of the note pursuant to Fla. Stat. §673, et seq.  In order for an instrument to be negotiable it must not, amongst other things, “state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money.”  §673.1041(1)(c).  While there is no appellate case law in Florida (and precious little in the entire country) which has ever interpreted this portion of the statute to mortgage promissory notes, the Second District has interpreted this section with respect to retail installment sales contracts in GMAC v. Honest Air Conditioning & Heating, Inc., et al., 933 So. 2d 34 (Fla. 2d DCA 2006).  There, the Second District held that clauses in the RISC such as the requirement for late fees and NSF charges rendered the contract non-negotiable.  This Court should be mindful that the GMAC case was recently applied to a mortgage foreclosure in the Sixth Judicial Circuit.  See Wells Fargo Bank, N.A. v. Christopher J. Chesney, Case No. 51-2009-CA-6509-WS/G (6th Judicial Circuit/Hon. Stanley R. Mills February 22, 2010).

The note attached to Plaintiff’s Complaint contains the following obligations other than the payment of money

1.      The obligation that the borrower pay a late charge if the lender has not received payment by the end of a certain period of days after the payment is due.  Defendants assert this defense although Section 7(a) of the Note attached states “See Attached Rider”.  The only riders attached to the Complaint are a “Prepayment Rider to Note” and an “Adjustable Rate Rider”, the latter of which deals with the interest change, not late fees.  Therefore there are documents potentially missing from the Complaint which runs afoul of Florida Rule of Civil Procedure 1.130 that such documents be attached as they are a document upon which a defense can be made.  Defendants are asserting the defense without the applicable rider; however, if Plaintiff is in possession of the original note, as they should be in order to foreclose, Plaintiff would have had said document to file.   

2.      The obligation that the borrower to tell the lender, in writing, if borrower opts to may prepay in clause 5 of the Note and the Prepayment Rider to the Note. 

3.      The obligation that the lender send any notices that must be given to the borrower pursuant to the terms of the subject note by either delivering it or mailing it by first class mail in clause 8; and

4.       The obligation of the borrower to waive the right of presentment and notice of dishonor in clause 9.

Because the subject note contains undertakings or instructions other than the payment of money, the subject note is not negotiable and therefore the Plaintiff cannot claim that it is entitled to enforce same pursuant to Fla. Stat. §673, et seq.

In addition to, or in alternative of, the following argument, even if the subject note is deemed negotiable, Fla. Stat. §673, et seq. (and therefore negotiation) cannot be utilized to transfer the non-negotiable mortgage, which is a separate transaction.  See in Sims v. New Falls Corporation, 37 So. 3d 358, 360 (Fla. 3d DCA 2010) (providing that a note and mortgage were two separate transactions).  The terms of the mortgage are expressly not incorporated into the terms of the note; rather, they are merely referenced by the note.  See clause 11 of the note.  Indeed, nowhere in the subject note is the right to foreclose the mortgage a remedy for default under the note.  It is clause 22 of the mortgage, on the other hand, which allows this.  Clause 22 of the mortgage, however, cannot be transferred to Plaintiff by negotiation as the mortgage is not negotiable.  

 

Danielle Kelley Forces Bank Into Permanent Modification

Danielle Kelley, Esq., is a senior litigation partner in GGKW (the law offices of Garfield, Gwaltney, Kelley and White with home offices in Tallahassee and branches in South Florida and Central Florida), now liberated from the administrative duties associated with running a law practice. Focusing her attention on litigating her cases, the results are getting better and better. Her latest blog turns her attention to enforcement of modification duties by the very same banks who report they are doing their best when in fact they are intentionally done their worst. She be reached at 850-765-1236, 954-495-9867, or dkelley@ggkwlaw.com. Neil F Garfield can be reached at the same numbers and ngarfield@ggkwlaw.com.

The latest is that Danielle Kelley took on the banks in the murky area of modifications — in Court. Her argument: once the trial modification has been satisfied, there is no discretion for the bank to deny the permanent modification. Her client made the payments and supplied the documentation (the usual 30 times because the bank kept lying to her client saying they didn’t have the complete file, asking for things that Kelley proved had even already received several times).

As with the whistle blower affidavits in the current breaking news, Kelley showed that the bank lied saying they had not received paperwork when they had. Opposing counsel was forced to concede that his client had behaved that way — thus setting up the unclean hands argument (which in this case turned out to be unnecessary).

Despite her client satisfying all parts of the trial modification which opposing counsel had to admit, the permanent modification was denied. Kelley said basically “no, it isn’t denied. It is automatic.” The bank scoffed at her and paid the price. Kelley ditched them in the preliminaries. She was just warming up and she had already won.

Opposing counsel citing the HAMP statute said that the bank was under no obligation to permanently modify the loan — even if the borrower has accepted the offer of the bank for the trial modification and then paid in accordance with the terms of the trial modification and even if the bank accepted those payments. Opposing counsel said “just because they complied with the trial modification doesn’t mean they automatically get a permanent modification.” The Judge thought otherwise and was pretty angry about it authorizing sanctions against the bank. “Yes it does mean that counsel — what else could it mean?”

The Judge took it under advisement, did the research, and issued the order. The modification is permanent by Court Order. The case is over with jurisdiction reserved to impose sanctions on the banks and award attorney fees to Kelley and her client. Whether the bank is going to appeal is unknown. But the lesson from this simple motion to enforce the settlement/modification are clear starting with THERE WAS REAL MONEY PAID AND REAL MONEY ACCEPTED AND THE MOVEMENT OF THE MONEY PRECISELY FOLLOWED THE PAPERWORK (the agreement to go into a trial modification).

See more on modification: http://dkelleylaw.wordpress.com/2013/06/26/the-in-house-modification-what-the-boa-declarations-point-to/

You might not see the connection but the ninth circuit opinion essentially came to the same conclusion and then turned the borrower down on his argument that the loan documents should not or could not be enforced. The decision starts out with the statement that the borrower was loaned money as stated in the note. Everything was down hill from there. Once the Court is presented with a real transaction (more apparent than real in the Arizona case, but this issue was never raised), where real money was paid pursuant to the terms of a real contract, the case is essentially over.

The Banks successfully suckered the lawyer into looking at the paperwork instead of looking at the money trail and comparing it with the paperwork. No allegation was made and no Discovery was put in the record showing that there was no real transaction as stated in the note and mortgage.

The two cases are very different in fact pattern but the result is the same: THERE WAS REAL MONEY PAID AND REAL MONEY ACCEPTED AND THE MOVEMENT OF THE MONEY PRECISELY FOLLOWED THE PAPERWORK. The problem in the Arizona case is that there never was any real issue with whether the money had tracked the paper trail even though it appears as though in reality it probably didn’t. Without the issue in the record, as the Court pointed out, they had no obligation to raise issues that were never raised at the trial level.

LISTEN TO DANIELLE KELLEY ON BLOG RADIO

See: 9th circuit slams homeowners. June 28. 2013 http://cdn.ca9.uscourts.gov/datastore/opinions/2013/06/28/11-16597.pdf

this is not a bad decision. it is just another example of how lost we can get if we just follow the paper trail. the court was perfectly correct in its reasoning and and its conclusion. I predicted the outcome and told the lawyer involved here that he was pursuing the wrong path.

The opening words of the decision basically tells all we need to know. it says that the homeowner borrowed the money from the party set forth on the note. There is no question raised as to whether or not the party set forth on that note as the payee was in fact the lender. After that, it was all downhill.

The only way these cases can be won is by showing the money trail first. That is what reveals the actual parties to the transaction. Then by showing that the money trail does not track or follow the paper trail you can argue standing, and the fact that the mortgage lien was never perfected. That is the only thing that can stop a foreclosure.

It only makes sense that the courts as a whole are not going to let people off the hook unless the adversary has no right to receive the benefits. If you start with the premise that the loan was made just like it says in the note, you might as well pack your bags and go home. The courts are not going to refuse to enforce an obligation they think is real and which is not challenged by the debtor. The business of some coffee spilled on the document thus rendering the document unenforceable is not going to work and it isn’t working. Nor should it.

THERE IS NO MAGIC BULLET THAT IS GOING TO STOP ENFORCEMENT OF WHAT IS OBVIOUSLY AND ADMITTEDLY A LEGITIMATE DEBT. IT IS THE DEBT ITSELF AND THE COMPARISON TO THE PAPERWORK THAT LAWYERS SHOULD CONCENTRATE THEIR ATTENTION. Then you will see a tsunami of decisions in favor of the borrower because the transaction described in the note, the mortgage, the assignments and the pleadings do not exist. Pierce through the smoke and mirrors of Wall Street and you will find nothing to support their position.

The lawyers who insist on maintaining their focus of attention on the paperwork are simply guilty of mental masturbation. They get paid and the client suffer the consequences. With this latest decision, there should be little doubt that looking for a “gimmick” way out of this is not going to work. Foreclosure defense lawyers need to show that the party seeking the benefit of of foreclosure is not entitled to it.

DANIELLE KELLEY, ESQ. ON BLOGTALKRADIO.COM 1P.M. Sunday, June 30

Call in and ask questions:

https://mail-attachment.googleusercontent.com/attachment/u/0/s/?view=att&th=13f8fedaa7af0881&attid=0.1&disp=attd&realattid=769b2943-c02d-4305-a586-1356d0456696&safe=1&zw&saduie=AG9B_P_DCkgli0FzdgKNROgb7CGn&sadet=1372509323342&sads=1tTrekRDYIBgvYQNSfys6ACI9N8&sadssc=1

http://www.blogtalkradio.com/senkalive/2013/06/30/you-can-write-off-our-homes-but-were-still-here-1

LISTEN: Danielle Kelley is rapidly ascending to the position of one of the leading foreclosure defense attorneys. She is a partner in Garfield, Gwaltney, Kelley and White a law firm based in Tallahassee, the state capital of Florida. The firm is expanding its presence throughout Florida and provides extensive litigation support to attorneys throughout the United States.

Sunday, June 30th at 1:00 pm EST

Danielle Joyner Kelley: An attorney from FL who is fighting her own foreclosure case and also assisting homeowners who are facing foreclosures, evictions. Attorney Kelley testified before the House Committee against Florida House Bill 87 which has since passed and been signed into law.

She also said: ”Don’t discount these foreclosure victims, you can write off their home with a foreclosure judgment but they are still there, as are their stories, and they will be told.”

Darrell and Jennifer Neilander (CT) are fighting the servicers SLS and the alleged fake creditors pro se in Federal Court under the FDCPA statues charging that these servicers and creditors are 3rd party debt collectors. They are the only Plaintiffs in Federal Court in Connecticut challenging these entities.

Who is the DEADBEAT: Borrower or Bank?

Many thanks to Danielle Kelley, Esq. for appearing on last night’s members’ teleconference. I forgot to give the number out for the firm: 850-765-1236

Just to cap it off, here is her Post from yesterday at Danielle Kelley Blog:

Danielle Kelley, Esq.

The propaganda from the banks has been far-reaching.   Even if they devised a scheme to fraudulently throw away a homeowner’s hope at a modification, they are still pursuing the “deadbeat” homeowner argument.  The essence is that the homeowner was not paying, so it doesn’t matter what happened after the homeowner defaulted.

That “deadbeat” argument is a myth.  Whenever I interview a client, I am careful not to lead them.  I simply ask the question, “What caused you to go into default?”.  Nine times out of ten I will hear, “The bank said I had to be so many months behind to help me.”  Or in the alternative, “My payments kept increasing and I didn’t know why.  I called the bank to ask and they told me that unless I was behind in payments they couldn’t help.”  After that the homeowner is left at the mercy of bank who is pretending to consider them for a modification, but yet fraudulently thwarting that process.

The first answer is the “stop payment” answer, which I have discussed in a previous blog.  The second answer is now what I call the “bait and switch” on escrow accounts.  Homeowners who pay monthly to the bank, unless agreed otherwise, expect the bank to take part of that payment and pay the taxes and insurance on the property with it.  If the bank does not, the escrow account goes into the negative and the homeowner has to make up the difference in the payment.  It is called an “escrow shortage”.  And no one is immune, not even those who pay every month, on time, and would not dare to consider themselves as people who would fall into foreclosure.

I have seen it time and again.  In one case, BOA inflated the escrow account $12,000 which resulted in a payment of $900 more per month.  That very case would become my own, with my father on our Note.  When he called to ask “why” the payments were going up he was given the script “To get that $900 off you need help.  We can’t help you because you are current on your payments.  You need to show us you need our help by making a partial payment.”  Later when the partial payment was not applied, BOA stated that to be considered for a modification we had to stop paying altogether.  Left with four years of modification attempts in bad faith, we were requested by BOA (in order to keep the modification file open) to record a quit claim deed to myself and my husband which came with a high price for documentary stamps.  We were told to submit letters to the bank, and then told we could not mention the “stop payment” language in them.  The letters had to be all about how we were suffering a “hardship” with no blame pointed towards the bank.  The reasoning?  They had to get Freddie Mac, the loan “owner”, to approve a modification, and Freddie wouldn’t dare approve a modification if BOA had done something wrong.  To this day, BOA wants to pursue a foreclosure, yet they have absolutely no explanation for what inflated the escrow account to begin with.

In another case, unrelated to me, other than my representation of my client, the bank stopped paying the insurance in full.  The homeowner had no idea that the insurance policy had lapsed until a year later when they were asked to make up for an escrow deficiency.  At a payment climbing hundreds of dollars more than they ever agreed to pay, when they had been making their payments in full and counting on the bank, per the mortgage contract, to pay the insurance, they were now faced with payments they should have never been liable for.  They were not a “deadbeat”.  They were paying in full all along.

Then the truth is brought to light, and the deadbeat argument fails because we learn that no one, not one person, is immune from this.  If a homeowner is making monthly payments and depending on a bank to pay the taxes and insurance, they are at the mercy of the bank. And often to a bank like BOA who is seeking to foreclose loans to get them off of their books, as their own employee declarations filed in the HAMP case in Massachusetts show us.

They have no incentive not to deliberately inflate a homeowner’s escrow account and cause the payment to rise to the point where the homeowner calls them and eventually ends up in default.  Their own employees have stated that they profit from foreclosures over modifications.

So before the argument is bought that the homeowner in foreclosure is a “deadbeat”, know this much, the bank can cause you to become a “deadbeat” too, even if every payment is made in full and right on time.

Danielle Kelley appears on tonight’s member teleconference

At 6 PM Eastern daylight Time I will host the twice monthly teleconference for members of the living lies blog. We are going to start adding guests more frequently than we had done in the past. Tonight we have Danielle Kelley who is an attorney in Tallahassee Florida and has been frequently quoted in mainstream media over the last few days regarding corruption of the modification process for mortgage loans under HAMP and other programs. She is also challenging foreclosures resulting from alleged “defaults” that only occurred because the bank or its representative told the borrower that they must stop paying if they want to be considered for a modification. It is a trick that has landed many people in foreclosure instead of modification.

Danielle Kelley is a partner in the law firm of Garfield, Gwaltney,  Kelley and White  with offices in Tallahassee and Fort Lauderdale.

The teleconference is only for paying members of the blog. If you have not recently updated your credit card information with our Internet store you should do so now.

Questions submitted by email will get preference over questions that are presented orally. The format for tonight’s short monologue by me, an interview of Danielle Kelley,  and then questions and answers.

As always we caution you not to use the information on tonight’s program as advice on your case even if it is in Florida where we are licensed. Small details changing the fact pattern of each case would very likely change the tactics or strategy and certainly change the advice given to any client. Before you act or decide not to act based upon something you heard on our program or that you read on our blog you should first consult with a licensed attorney who is practicing in the geographical area and jurisdiction in which the property is located.

Bank of America employees admit they lied to foreclosure victims
http://www.allvoices.com/contributed-news/14814391-bank-of-america-employees-admit-they-lied-to-foreclosure-victims

Ex-BofA employees say they delayed mortgage help, received bonus for foreclosures
http://www.bizjournals.com/charlotte/blog/bank_notes/2013/06/ex-bofa-employees-say-they-delayed.html

Waters Asks for Investigation into B of A Foreclosure Tactics
http://www.americanbanker.com/issues/178_117/waters-asks-for-investigation-into-bofa-foreclosure-tactics-1059962-1.html

Where did all that money go? Why Citi Wants to Rack Up US Taxes
http://www.cnbc.com/id/100823752
UK parliamentarians call for ‘reckless’ bankers to face jail
http://uk.reuters.com/article/2013/06/19/uk-britain-banks-idUKBRE95H1FB20130619

 

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