How Homeowners Can Effectively Use TILA in their Foreclosure Defense

11 Wednesday Jun 2014

Posted by BNG in Case Laws, Case Study, Federal Court, Foreclosure Defense, Fraud, Judicial States, Legal Research, Mortgage Laws, Non-Judicial States, Pro Se Litigation, Your Legal Rights

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Many homeowners often wonder what is TILA and how it applies to them.

The Truth in Lending Act (TILA) (Subject to Update)

This post is designed to enlighten homeowners about the benefits of TILA in their foreclosure defense.

Some of the things homeowners should be aware of is that, Under TILA, a debtor has a right of rescission as to nonpurchase residential
mortgages that lasts for three days after completion of the transaction or delivery of the disclosure, which ever occurs later. It is required that each debtor receives two copies of the notice of their right of rescission. According to Rodriguez v. U.S. Bank (In re Rodriguez), 278 B.R. 683 (Bankr. D.R.I. 2002), the date of the expiration of the right of
rescission must be filled in. If the notices are not given or other material disclosures are not made, the rescission right is extended from three days to three years from the completion of the transaction. See In re Lombardi, 195 B.R. 569 (Bankr. D.R.I. 1996).

Any extension of the right of rescission beyond the three-year period provided by TILA must come from state law. The Supreme Court in Beach v. Ocwen Fed. Bank, 523 U.S. 410 (1998), held that federal law does not provide an extension of more than three years, and that equitable tolling does not apply because the three year limit is a statute of repose, not a statute of limitations. Some states allow rescission in recoupment beyond the TILA’s three-year extension period. See, Fidler v. Cent. Coop.
Bank, 336 B.R. 734 (Bankr. D. Mass. 1998)

TILA §1635(b) provides a three-step rescission process:

1. The debtor must first give notice of the rescission. By invoking rescission, the debtor is relieved of liability for any finance or other charge, and the security interest becomes void.

2. The creditor must return any money paid or property given, including the down payment.

3. The debtor must tender any property received or the value of it.

Courts have considerable discretion concerning the three-step process, and are able to circumvent the process if they see fit. See, Williams v. BankOne, N.A. (In re Williams), 291 B.R. 636 (Bankr. E.D. Pa. 2003); Bell v. Parkway Mortgage, Inc. (In re Bell), 309 B.R. 139, 167 (Bankr. E.D. Pa. 2004).

In the event a court requires that the principal debt be repaid in Chapter 13 bankruptcy, the rescinding borrower/debtor still receives a considerable benefit. In this case, the creditor must reduce the obligation by the amount the borrower has paid through any down payment, closing costs, insurance premiums and by the amount of the finance charges. The obligation to repay only the principal over the life of a Chapter 13 plan is an unsecured claim.

TILA § 1640(a) provides for damage actions for violations of its requirements. In an individual action relating to a closed-end credit transaction secured by real estate or a dwelling, statutory damages of not less than $200 and not greater than $2000 are recoverable. Damages can also be recovered where rescission is available. In cases
dealing with personal property loans, although rescission is not available, the statutory damages are twice the finance charge, with a minimum of $100 and a maximum of $1000. See, Koons Buick Pontiac GMC, Inc. v. Nigh, 125 S. Ct. 460 (2004).

TILA § 1640(e) actions for actual and statutory damages are subject to a one year statute of limitations, measured from the occurrence of the violation. This section also states it, “does not bar a person from asserting a violation of this title in an action to collect the debt which was brought more than one year from the date of the occurrence of the violation as a matter of defense by recoupment or set-off in such
action, except as otherwise provided by State Law.”

Courts recognize that debtors in bankruptcy can assert damages in recoupment by objecting to a creditor’s proof of claim. See, In re Coxson, 43 F.3d 189 (5th Cir. 1995); Roberson v. Cityscape Corp., 262 B.R. 312 (Bankr. E.D. Pa. 2001). Unlike the three-year right of rescission, the statute of limitations for TILA damage actions can be equitably tolled. Fraudulent concealment of a TILA violation is a basis for tolling the
one-year statute of limitations, however, mere failure to make disclosures is not enough. The consumer must prove the creditor concealed the violation and that the consumer exercised due diligence to discover the facts giving rise to the claim. See, Evans v. Rudy-Luther Toyota, Inc., 39 F. Supp. 2d 1177 (D. Minn. 1999).

The Truth in Lending Act requires disclosure of credit terms, applies to most extensions of consumer credit and frequently apply to restructured loans that meet the definition of a refinancing under the Act and Regulation Z. The Truth in Lending Act offers actual damages, statutory damages for some violations, and attorney’s fees. For second mortgage, home equity loans, and some other transactions secured by home,
rescission may be available.

– Citation: 15 U.S.C. §1601, et seq.
12 C.F.R- Part 226 (Regulation Z)

– Liable Parties: Creditor (generally the original lender) Assignee, if violation “apparent on face” of documents

– Actionable Wrongs: Failure to disclose credit information or cancellation
rights

– Remedies: Rescission, unless transaction was for purchase or
construction of home, Actual damages, Statutory damages up to $2,000 (SEE UPDATE PER SUPPLEMENT), Attorney fees

– Limitations: 1 year to rescind under TILA, though limit does not apply to recoupment under state law
1 year to bring damages claim
3 year limitation if used defensively by way of recoupment,
unless effectively brought as a DUTPA claim

Matthews v. New Century Mortgage Corp., 185 F. Supp. 2d 874 (S.D. OH 2002). (An opinion which includes the facts and claims for a typical predatory lending case involving elderly homeowners. Claims include descriptions of TILA, HOEPA, Equitable Tolling, FHA, ECOA, Conspiracy, Fraud, Unconscionability, and Ohio’s Rico Statute.)

Anderson v. Frye, 2007 U.S. Dist. LEXIS 20935. Plaintiff must show each of the following: (1) that she is a member of a protected class; (2) that she applied for and was qualified for loans; (3) that the loans were given on grossly unfavorable terms; and (4) that the lender continues to provide loans to other applicants with similar qualifications,
but on significantly more favorable terms. Citing Matthews,.

In re Nat’l Century Fin. Enters., Inv. Litig., Fed. Sec. L. Rep. (CCH) P94,314 (May 2007) “[W]hile Plaintiff is required to prove the existence of some unlawful act independent of the civil conspiracy itself, that unlawful act does not need to be committed by each of the alleged co-conspirators.” Citing Matthews,.

Regulation Z Sec. 226.20 Subsequent disclosure requirements

(a) Refinancings. A refinancing occurs when an existing obligation that was subject to this subpart is satisfied and replaced by a new obligation undertaken by the same consumer. A refinancing is a new transaction requiring new disclosures to the consumer. The new finance charge shall include any unearned portion of the old finance charge that is not credited to the existing obligation. The following shall not be treated as a refinancing:

(1) A renewal of a single payment obligation with no change in the original terms.

(2) A reduction in the annual percentage rate with a corresponding change in the payment schedule.

(3) An agreement involving a court proceeding.

(4) A change in the payment schedule or a change in collateral requirements as a result of the consumer’s default or delinquency, unless the rate is increased, or the new amount financed exceeds the unpaid balance plus earned finance charge and premiums for continuation of insurance of the types described in Sec. 226.4(d).

(5) The renewal of optional insurance purchased by the consumer and added to an existing transaction, if disclosures relating to the initial purchase were provided as required by this subpart.

Commentary to Section 226.20 Subsequent Disclosure Requirements

Paragraph 20(a) Refinancings.

1. Definition. A refinancing is a new transaction requiring a complete new set of disclosures. Whether a refinancing has occurred is determined by reference to whether the original obligation has been satisfied or extinguished and replaced by a new obligation, based on the parties’ contract and applicable law. The refinancing may involve the consolidation of several existing obligations, disbursement of new money to
the consumer or on the consumer’s behalf, or the rescheduling of payments under an existing obligation. In any form, the new obligation must completely replace the prior one.

– Changes in the terms of an existing obligation, such as the deferral of individual installments, will not constitute a refinancing unless accomplished by the cancellation of that obligation and the substitution of a new obligation.

– A substitution of agreements that meets the refinancing definition will require new disclosures, even if the substitution does not substantially alter the prior credit terms.

1. Annual percentage rate reduction. A reduction in the annual percentage rate with a corresponding change in the payment schedule is not a refinancing. If the annual percentage rate is subsequently increased (even though it remains below its original level) and the increase is effected in such a way that the old obligation is satisfied and
replaced, new disclosures must then be made.

2. Corresponding change. A corresponding change in the payment schedule to implement a lower annual percentage rate would be a shortening of the maturity, or a reduction in the payment amount or the number of payments of an obligation. The exception in §226.20(a)(2) does not apply if the maturity is lengthened, or if the payment
amount or number of payments is increased beyond that remaining on the existing transaction.

Court agreements. This exception includes, for example, agreements such as reaffirmations of debts discharged in bankruptcy, settlement agreements, and post judgment agreements. (See the commentary to §226.2(a)(14) for a discussion of court approved agreements that are not considered “credit.”)

Workout agreements. A workout agreement is not a refinancing unless the annual percentage rate is increased or additional credit is advanced beyond amounts already accrued plus insurance premiums.

Insurance renewal. The renewal of optional insurance added to an existing credit transaction is not a refinancing, assuming that appropriate Truth in Lending disclosures were provided for the initial purchase of the insurance.

This regulation limits refinancing to transactions in which the entire original obligation is extinguished and replaced by a new one. Redisclosure is no longer required for deferrals or extensions.

When Homeowner’s good faith attempts to amicably work with the Bank in order to resolve the issue fails;

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; among other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will show you step-by-step litigation solutions helping you challenge these fraudsters and ultimately saving your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

What Every Homeowner Should Know About Fair Debt Collection Practices Act (FDCPA)

11 Wednesday Jun 2014

Posted by BNG in Case Laws, Case Study, Federal Court, Foreclosure Defense, Judicial States, Mortgage Laws, Non-Judicial States, Your Legal Rights

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The Fair Debt Collection Practices Act (FDCPA) provides two ways to stop a
debt collector from calling a consumer:

1. If the consumer notifies the debt collector in writing that the consumer refuses to pay the debt or that the consumer wishes the collector to stop calling, the collector must cease calling after one final communication. 15 USC § 1692c(c).

2. If a debt collector knows that the consumer is represented by an attorney and knows or can readily ascertain the attorney’s name and address, the debt collector may not communicate with the consumer unless the attorney fails to respond to communications within a reasonable time. § 1692c(a)(2).

The FDCPA cannot be used to stop direct collections from creditors because it is applicable only to third-party debt collectors.

The FDCPA does not apply to creditors collecting debts on their own behalf, except if they use a name other than their own to do so. “Debt collector” is defined in §1692a(6) as a person who is “collecting on behalf of another” and who “regularly” collects or attempts to collect debts. Lawyers often come under this definition of debt collector. The Supreme Court in Heintz v. Jenkins, 514 U.S. 291 (1995), held that an attorney who regularly uses litigation to collect consumer debts on behalf of a client is a debt collector, subject to the FDCPA. Therefore, lawyers who bring suits on behalf of clients against consumers, seeking payment of debts, need to adopt practices that comply with the FDCPA and this includes “appearance” attorneys.

Section 1692g requires that a debt collector send a written “validation” notice along with the debt collector’s initial communication to the consumer. The notice must contain the following:

– the amount of the debt;
– the name of the creditor;
– a statement that unless the consumer disputes the validity
of the debt within 30 days of receipt of the notice it will be
assumed to be valid, and
– information that verification of the debt will be obtained if
the consumer disputes it.

Debt collectors must convey the validation notice in a legible manner that will be noticed.

Any debt collector that fails to comply with any FDCPA provisions is liable to the consumer for any actual damages and for up to $1000 in statutory damages. 15 U.S.C. § 1692k(a)(1)-(2). The consumer may recover the costs of the action and a reasonable attorney’s fee as determined by the court. Actual damages include compensation for emotional distress. State law requirements for recovery of negligent or intentional infliction of emotional distress are inapplicable. See Maxwell v. Fairbanks Capital Corp., 281 B.R. 101 at 118 (noting that the appropriate standard for judging unfairness of debt collection practices is from the perspective of “the least sophisticated debtor,” suggesting that damages for subjectively-experienced emotional distress could be recoverable even if that distress is greater than what an ordinary debtor might experience).

A debt collector is, “any person who uses an instrument of interstate
commerce or mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” 15 U.S.C. § 1692a(6). Repossession and the sale of personal property is not a debt collection activity under the FDCPA. Likewise, with respect to non-judicial foreclosure of security interests in houses. See, Bergs v. Hoover, Bax & Slovacek, LLP, 2003 U.S. Dist. LEXIS 16827, at 1 (N.D. Tex. Sept. 24, 2003); Beadle v. Haughey, 2005 WL 300060, 4 (D.N.H. Feb. 9, 2005) It is not clear whether foreclosing on a mortgage constitutes debt collecting activity under the FDCPA. Id. at 4. However, the most recent case to discuss whether proceeding in rem is debt collecting and subject to the FDCPA seems to suggest it is.
Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227 (3d Cir. 2005). In Piper, the law firm subjected itself to the FDCPA by attempting to collect a personal liability and requesting payment to be made directly to the firm instead of to the city. Accordingly, the court stated that “the issue for decision is whether PLA’s communications to Piper were communications by a ‘debt collector’ with a ‘consumer’ in ‘connection with the collection
of a [debt].’” Id. at 232.

The Seventh Circuit determined that a loan servicer was not a debt collector under the FDCPA because it was seeking payment currently due under a superseding agreement. Bailey v. Security Nat’l Servicing Corp., 154 F.3d 384 (7th Cir. 1998).

When Homeowners good faith attempts to amicably work with the Bank in order to resolve the issue fails;

How Homeowners Can Effectively Use RESPA in their Foreclosure Defense

11 Wednesday Jun 2014

Posted by BNG in Affirmative Defenses, Banks and Lenders, Federal Court, Foreclosure Defense, Judicial States, Non-Judicial States, RESPA, Your Legal Rights

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It is important for every homeowner to use the RESPA provisions in their foreclosure defense.

Most Homeowners often wonder what is RESPA. This post is designed to enlighten homeowners as to what RESPA is and how the provisions of RESPA can help them in the foreclosure fight.

So What is RESPA!

Real Estate Settlement Procedures Act (RESPA)

1. RESPA initially applied to loans subject to a first lien on residential property of one to four units. In 1992, it was amended to apply to subordinate loans on such property as well. The implementing regulations are contained in Regulation X, 24 C.F.R. § 3500, as well as in Regulation Z, 12 C.F.R. § 226.19.

2. RESPA requires good faith estimates of Truth In Lending Act disclosures before consummation or within three business days after the creditor receives the consumer’s written application, whichever occurs earlier. Re-disclosure is required no later than consummation or settlement. According to § 226.19(b), when dealing with variable-rate loans a booklet on adjustable rate mortgages must be provided along with other detailed disclosures specified in the regulations.

3. RESPA prohibits mortgage transaction servicers from giving and creditors from accepting “any portion, split or percentage” of any charge made or received for settlement services “other than for services actually performed. 12 U.S.C. § 2607(b). High and unearned fees that are not actionable under RESPA, are still subject to challenge as unconscionable and that it is an unfair and deceptive practice to represent a charge as for a specific purpose, when the actual cost of that item is much less.

4. RESPA also requires servicers of covered mortgages to respond to written requests from the borrower or the borrower’s agent for information or disputes concerning the servicing of the loan, and to either make appropriate corrections or, after investigation, explain why the account is correct. Failure to comply with the response requirements gives rise to liability for actual damages, statutory damages up to $1000 in case of a pattern or practice of noncompliance and attorneys’ fees and costs, with special class action provisions.

5. The provisions of RESPA which deal with mortgage servicing are generally found in either 12 U.S.C. § 2605 or § 2609. Section 2605, known as the “Servicer Act,” requires servicers to respond to borrower requests for information and to correct account errors (referred to as “qualified written requests”), § 2605(e); disclose information relating to the transfer of servicing operations, §§ 2605(a) and (b); and make timely payments out of escrow accounts. § 2605(g); Section 2609 deals
exclusively with escrow accounts and limits the amount servicers can demand to be deposited in an escrow account and requires an escrow analysis be conducted to determine the proper escrow payment. § 2609(a); It also requires servicers to provide an annual escrow statement § 2609(c) and a notice of escrow shortages or deficiencies.
§ 2609(b)

6. There is one requirement imposed by § 2605 that does not apply if the borrower is behind on payments. Section 2505(g) requires a servicer to make payments from an escrow account for taxes, insurance and other charges “in a timely manner as such payments become due.” As long as the borrower’s mortgage payment is not more than thirty days late, the servicer must pay escrow items such as taxes and insurance in a timely manner even if there are not sufficient funds in the escrow account to cover the items. Reg. X, 24 C.F.R. § 3500.17(k)(2). RESPA creates an express right of action for a servicer’s failure to make payments from an escrow account for taxes, insurance and other charges “in a timely manner as such payments become due.” 12 U.S.C. § 2605(g). Regulation X provides that this obligation to make timely disbursements out of escrow does not apply when the “borrower’s payment is more than 30 days overdue.” Reg. X, 24 C.F.R. § 3500.17(k)(1), (2) The regulation has no explanation of this limitation. It could be interpreted to mean that a servicer has no obligation to timely disburse payments for taxes and insurance or other charges whenever the home owner’s mortgage payment is more than thirty days late at the time the disbursement becomes due, even if there are sufficient funds in the escrow account to cover the disbursement.

7. The regulation should not give an exemption to a servicer who wrongly claimed that the borrower was late with payments at the time the disbursement was required, or if timely payments are being made under a forbearance or repayment agreement. If the exemption does not apply, the servicer must pay escrow items such as taxes and insurance timely even if there are not sufficient funds in the escrow account to cover the
items.[ Reg. X, 24 C.F.R. § 3500.17(k)(2) The application of the regulation denies a servicer an opportunity to force-placed insurance from another carrier in this situation. The servicer is required to pay the insurance premium on the borrower’s policy when due by advancing funds. Any escrow deficiency resulting from the advance is paid by the borrower through an adjustment to future escrow payments following an escrow
account analysis.

It is important for homeowners to know that;

RESPA – provides a private cause of action for violation of its prohibitions against misuse of escrowed funds, kickbacks from companies providing settlement services, and steering borrowers to title insurance companies. Either treble or statutory damages plus attorney’s fees are available for violations. RESPA also requires advance disclosures (Good Faith Estimate), and disclosure at settlement of settlement costs in real estate transactions. While the statute does not create a private cause of
action for disclosure violations, analyzing the disclosures often reveals Truth in Lending and HOEPA violations.

The bankruptcy mentors say that to avoid the Reg X 30-day default exception, an argument can be made that the exception does not apply after confirmation of the plan. The reason is that the confirmation designates the account as reinstated. In re Jones, 2007 WL 1112047 (Bankr.E.D.La. Apr 13, 2007)(plan confirmation “recalibrates” the
amounts due as of the petition date); In re Wines, 239 B.R. 703 (Bankr. D.N.J. 1999) (post-petition mortgage debt treated like a current mortgage and consists of those payments which come due after the bankruptcy petition is filed. Ongoing postpetition payments, including escrow amounts and timely disbursements, should be treated under the terms of the note and mortgage as if no default exist. The Fannie Mae/Freddie Mac Single-Family Uniform Instrument for a mortgage or deed of trust
(Section 3, entitled “Funds for Escrow Items”), requires the servicer to maintain the escrow account in compliance with RESPA. A provision in the plan can require the servicer to comply with the RESPA escrow account requirements during the administration of the plan.

The general RESPA preemption provision provides that state laws are
preempted only to the extent of their inconsistency with RESPA. 12 U.S.C. § 2616. State laws providing greater protections to borrowers than RESPA that are not inconsistent with RESPA are not preempted.

– Citation: 12 U.S.C. §2601, et seq. 24 C.F.R. Part 3500 (Regulation X) 64 Fed. Reg. 10079 (HUD Policy Statement on lender paid broker fees)

– Liable Parties: Lender Broker, if not exclusive agent or lender,
Servicer, Title Company

– Actionable Wrongs: Failure to give Good Faith Estimate; disclose other credit-related information and give HUD-1 Settlement Statement and servicing statements; Payment or acceptance of kickbacks or referral
fees; Making charges for which no identifiable services are provided; Improper servicing of loan.

– Remedies: Three times amount of illegal charges Attorney fees

– Limitations: 1 year to bring an affirmative claim No limit if raised by way of recoupment

Hirsch v. Bank of America, 328 F. 3d 1306 (11th Cir. 2003). (provides a two-part test in analyzing RESPA kickback violations involving a mortgage broker. First, the court must “determine whether the broker has provided goods or services of the kind typically associated with a mortgage transaction.” Then, the court must “determine whether the total compensation paid to the broker is reasonably related to the total value of the goods or services actually provided.”

Recently followed by: Culpepper v. Irwin Mortg. Corp., 20 Fla. L. Weekly Fed. C 824 (11th Cir. Ala. July 2, 2007) (applying two part test)

§ 203.508 Providing information.

(a) Mortgagees shall provide loan information to mortgagors and arrange for individual loan consultation on request. The mortgagee must establish written procedures and controls to assure prompt responses to inquiries.

(c) Within thirty days after the end of each calendar year, the mortgagee shall furnish to the mortgagor a statement of the interest paid, and of the taxes disbursed from the escrow account during the preceding year. At the mortgagor’s request, the mortgagee shall furnish a statement of the escrow account sufficient to enable the mortgagor to reconcile the account.

(d) Mortgagees must respond to HUD requests for information concerning individual accounts.

(e) Each servicer of a mortgage shall deliver to the mortgagor a written notice of any assignment, sale, or transfer of the servicing of the mortgage. The notice must be sent in accordance with the provisions of § 3500.21(e)(1) of this title and shall contain the information required by § 3500.21(e)(2) of this title. Servicers must respond to mortgagor inquiries pertaining to the transfer of servicing in accordance with §3500.21(f) of this title.

§ 203.550 Escrow accounts.
It is the mortgagee’s responsibility to make escrow disbursements before bills become delinquent. Mortgagees must establish controls to insure that bills payable from the escrow fund or the information needed to pay such bills is obtained on a timely basis. Penalties for late payments for items payable from the escrow account must not be charged to the mortgagor unless it can be shown that the penalty was the direct
result of the mortgagor’s error or omission. The mortgagee shall use the procedures set forth in § 3500.17 of this title, implementing Section 10 of the Real Estate Settlement Procedures Act (12 U.S.C. 2609), to compute the amount of the escrow, the methods of collection and accounting, and the payment of the bills for which the money has been escrowed.

In the case of escrow accounts created for purposes of § 203.52 or § 234.64 of this chapter, mortgagees may estimate escrow requirements based on the best information available as to probable payments that will be required to be made from the account on a periodic basis throughout the period during which the account is maintained.

The mortgagee shall not institute foreclosure when the only default of the mortgagor occupant is a present inability to pay a substantial escrow shortage, resulting from an adjustment pursuant to this section, in a lump sum.

When the contract of mortgage insurance is terminated voluntarily or because of prepayment in full, sums in the escrow account to pay the mortgage insurance premiums shall be remitted to HUD with a form approved by the Secretary for reporting the voluntary termination of prepayment. Upon prepayment in full sums held in escrow for taxes and hazard insurance shall be released to the mortgagor promptly.

When Homeowners good faith attempts to amicably work with the Bank in order to resolve the issue fails;

How Homeowners Can Use Available Options to Save their Homes

10 Tuesday Jun 2014

Posted by BNG in Bankruptcy, Federal Court, Foreclosure Crisis, Foreclosure Defense, Judicial States, Loan Modification, MERS, Non-Judicial States, Pro Se Litigation, State Court, Your Legal Rights

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Each state has its own foreclosure laws covering the notices the lender must post publicly and/or with the homeowner, the homeowner’s options for bringing the loan current and avoiding foreclosure, and the process for selling the property. In 22 states – including Florida, Illinois and New York – judicial foreclosure is the norm, meaning the lender must go through the courts to get permission to foreclose by proving the borrower is delinquent.

If the foreclosure is approved, the local sheriff auctions the property to the highest bidder to try to recoup what the bank is owed, or the bank becomes the owner and sells the property through the traditional route to recoup its loss. The entire judicial foreclosure process, from the borrower’s first missed payment through the lender’s sale of the home, usually takes 480 to 700 days, according to the Mortgage Bankers Association of America.

The other 28 states – including Arizona, California, Georgia and Texas – primarily use non-judicial foreclosure, also called power of sale, which tends to be faster and does not go through the courts unless the homeowner sues the lender. In some cases, to avoid foreclosing on a home, lenders will make adjustments to the borrower’s repayment schedule so that he/she can afford the payments and thus retain ownership. This situation is known as a special forbearance or mortgage modification.

What Options are available for Homeowners?

1. Reach out to the lender and explain your situation.

If you think you’ll be at risk for missing a monthly payment or possibly several, putting you at risk of foreclosure, reach out to your lender immediately. Don’t sweep the problem under the rug. As weird as it may sound, it’s in the lender’s best interest not to foreclose on you, as it costs close to $30,000 by some estimatesfor the lender to foreclose. That’s time, hassle, and money down the drain for the lender; they want to avoid foreclosure if at all possible. Talking to your lender will start a dialogue in which both parties can talk about possible solutions before foreclosure becomes the only option.

– Let the lender know if your problems are temporary. If you’ve incurred unexpected medical bills or have been laid off, for example, the lender is more likely to give you a reprieve until you’ve got your head above water. They might ask you to make a payment in one lump sum, or even freeze your monthly payments if you’re lucky.

2. Try to modify the loan in your dialogue with the lender.

As far as the lender is concerned, 50% of something is better than 100% of nothing. That means they’ll often be willing to modify the terms of your loan to get you paying something, even if it’s not the original monthly amount.

Try to extend the amortization period. Amortization period is a fancy word for the life of the loan. If you make the life of the loan longer, your monthly payment will go down.
Change the interest rate. The interest rate of your loan is determined by your credit rating, as well as other factors. Suffice it to know that it can be lowered in order to make monthly payments more manageable.
Switch from an adjustable rate to a fixed rate. Adjustable rate mortgages (ARMs) usually start off with a pretty low interest rate and then shoot up over the life of the loan. They look nice to start off with but they actually end up being pretty expensive. Switching from an ARM to a fixed rate — where the interest rate stays the same for each monthly payment — can save you a lot of money as well as make the monthly payment much more manageable.

3. Ask for forbearance.

Asking for forbearance is a temporary way to stall the foreclosure proceeding, but it works in a lot of instances. Forbearance allows you to either pay partial payments or no mortgage payments for a specified time agreed upon by you and the lender. You must, however, eventually pay the full amount forbore. You may agree to one lump sum payment to catch up on your mortgage or make extra payments in addition to your monthly mortgage payments.

4. Consider hiring a housing counselor.

A housing counselor will work on your behalf to get your finances back on track and find a compromise between you and the lender so that foreclosure can be avoided. A good quality counselor will usually be a good investment, especially if they help you hold onto your house.

Be weary of those housing counselors who “guarantee” a stall or stop in the foreclosure process. These counselors often charge exorbitant sums (think thousands of dollars) and sometimes only stall the proceedings, leaving you no better off than you were to begin with. Visit the Department of Housing and Urban Development’s website to see a full list of approved housing counselors.

5. If you do decide to fight the foreclosure, file a written answer to the foreclosure complaint.

Some of those well written response and other pleadings can be found at http://www.fightforeclosure.net foreclosure defense package. Filing an answer and attending the hearing stops the lender or county from obtaining a default judgment against you. Research the defenses to foreclosure — these are the reasons why the mortgage lender or county shouldn’t win, and they are listed below. A more comprehensive Guide to the fight and well structured foreclosure defense tools can be found in the package.

Select the defense to foreclosure that fits your circumstances.
Write an answer, including your defense to the foreclosure.
Submit the written answer to the county court where the lender or municipality filed the foreclosure complaint.

Foreclosure Defense Package at http://www.fightforeclosure.net will help Homeowners in the following ways.

Homeowners should consider the following options to either retain their homes or secure the equity.

1. Make the lender “produce the note.”

When you sign a mortgage document, there’s a promissory note that lenders are supposed to keep that details all the specifics of the loan agreement. During the housing boom, unscrupulous lenders underwrote so many loan documents and filed them away or sold them off, content simply to know they had made money. Now, many of the documents cannot be found, partly because they were sent off when the mortgage was securitized. The short story is this: if the lender cannot find the note, foreclosure can effectively be postponed, if not stopped completely.

– Making the lender “produce the note” can be effective, especially if the lender used less-than-savory means of getting you to agree to the loan, but it’s not a long term strategy for success. You can buy a lot of time if the lender can’t produce the note, but in most cases you won’t be able to stop foreclosure once the note is found.

2. Consider selling the house before the house is auctioned off.

If you can manage to sell the house before the foreclosure of your home actually clears, you can keep whatever equity you still have invested in the home. It may be hard to sell your home on such a quick turnaround, but it’s definitely possible, especially with the market heating up.

3. Question the chain of title.

Homeowners can effectively question the chain of title to their properties using the information at http://www.fightforeclosure.net

When a property is about to be foreclosed on, a database attempts to make sure that the ownership of the mortgage — from the time you signed the papers up to the present moment — is clear and unambiguous. This way, the courts can recognize the legality of the foreclosure. Because so many mortgages were bundled into complex securities and traded on the marketplace, the chain of title is often not clear and unambiguous. If you can successfully question the database that keeps track of the chain of title, you may be able to keep your home.

– The database that keeps of the chain of title is called the Mortgage Electronic Registration System, or MERS. It was established specifically in order to track the chain of title, a tall task given the rate at which many mortgages were being securitized and then traded. But some courts are skeptical of MERS’s legitimacy. One popular foreclosure defense rests on forcing the lender to independently verify the chain of title without using MERS.

– In order to save your home from foreclosure using the chain of title defense, you’re probably going to need a lawyer. This may be a bit more expensive than some of the other options, but it’s a defense that’s quickly gaining traction.

4. Negotiate a deed in lieu of foreclosure. If you have little other option, you can always ask the lender’s loss mitigation department if they’re willing to accept a deed in lieu of foreclosure. This is a document where you legally agree to transfer ownership of the deed over to the lender in exchange for the ability to walk away owing nothing to the lender. If you don’t think you’ll be able to hold onto your house, this option can be especially attractive if you owe a significant amount on monthly payments in arrears.

To Effectively Negotiate a Deed in Lieu of Foreclosure, homeowners needs to be aware of the following.

A deed in lieu of foreclosure is a foreclosure prevention process that can be used when you are upside down on your mortgage and cannot afford to keep your home. You simply sign a deed transferring ownership of your home back to your mortgage lender in exchange for walking away owing them nothing on your mortgage balance. The deed in lieu is a mechanism used to avoid foreclosure that saves you and your lender the time and costs of having to go through a formal foreclosure process. It benefits you and your lender by saving on court and legal fees. It can also save your credit if negotiated properly.

a. Call your lender’s loss mitigation department and tell them you are experiencing a financial hardship and can no longer afford to keep your home.

b. Ask if they will accept a deed in lieu of foreclosure.

c. Find out what other foreclosure prevention options you qualify for from your lender’s loss mitigation department and also by contacting a HUD Certified Counseling Agency or a real estate foreclosure defense attorney.

d. Download your lender’s deed in lieu of foreclosure forms, complete them and submit them to the lender with a hardship letter and any financial information they require.

e. Negotiate that the deed in lieu satisfies your mortgage balance and that the lender will not come after you later for a for the outstanding mortgage balance.

f. Request and negotiate with the lender that they report the transaction to the three credit bureaus as paid settlement or satisfied and ask them to remove any prior negative reporting from your credit report. Otherwise, they will report it as a foreclosure or deed in lieu of foreclosure, which stays on your credit for 7 years and lowers your credit score.

g. Sign the deed in lieu of foreclosure back over to the lender. Hand them the keys to your home and walk away owing nothing.

Bankruptcy as a last Option.

Bankruptcy is the process of eliminating some of all of your debts in exchange for either regular payments or a seizing of your property. Although it may not seem like an enviable option, it’s the smartest way out of an underwater mortgage for many homeowners. When you file for bankruptcy, the foreclosure proceedings can be stopped with an automatic stay.

Qualify for bankruptcy. In order to qualify, you have to complete a means test, pre-bankruptcy credit counseling, as well as acquire the correct paperwork such as tax documents.

1. Decide between filing chapter 7 and chapter 13 bankruptcy.

There are essentially two different kinds of bankruptcy declarations, each with their own unique rules and specifications. As they relate to stopping a foreclosure, they are briefly described below:

– In chapter 7 bankruptcy, you ask to have most, if not all, or your debts discharged by the courts. In exchange for this discharge, the courts can take any property not exempt from collection, sell it, and distribute the proceeds to your creditors. With chapter 7, you won’t be able to keep your house, but you will be able to stall the foreclosure for at least a couple of months.

– In chapter 13 bankruptcy, you agree to a plan to pay back all or most of your debts over a certain period of time. The time you have to repay the debt, as well as the repayment plan itself, depends on how much you earn, as well as the types of debt you currently own. With chapter 13, you should be able to keep your home, especially if you think you’ll be able to make payments in the future. The repayment plan usually lasts three to five years.

2. File your bankruptcy petition with your local U.S. Bankruptcy Court.

Meet with a lawyer and declare your bankruptcy. Start making payments. After a while, attend a meeting of the creditors. This is a meeting between you and a bankruptcy trustee. However, your creditors may also attend. This meeting will give you a better sense of where foreclosure proceedings are at.

With that said, homeowners should also be aware of What Not to do in Foreclosure

a. Do not sign the title of the property over to another company.

Some companies lure desperate families into a trap by promising to get the mortgage current and then re-sign the mortgage back over to you. Yet this rarely happens. More often than not, the company pulls equity out of the home, lets foreclosure proceedings continue, and dumps the home like a bag of wet peanuts. Worst of all, there’s nothing you can do because the title of the property is no longer in your name.

b. Do not seek counseling from a non-HUD approved organization.

Seeking counseling is an important tool for many homeowners fighting to keep control of their home. Yet many sharks take advantage of people by demanding steep up-front fees and interest rate hikes after the dust has settled. Be sure to vet any counseling service you use on HUD’s list of approved housing counselors.

c. Do not avoid court documents or requests.

Although out of sight, out of mind may be a decent coping strategy for some of life’s problems, it’s generally not a good way to hang on to a house. Promptly honor any requests that come from either the court or lender, as failure to do so may result in hefty fees and even legal trouble.

When Homeowners good faith attempts to amicably work with the Bank in order to resolve the issue fails;

How Homeowners in ‘Pro Se” Litigation Can Effectively Prepare Their Discovery Requests

02 Monday Jun 2014

Posted by BNG in Discovery Strategies, Fed, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, Pro Se Litigation, State Court, Trial Strategies, Your Legal Rights

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There are certain rules of Discovery every litigant must follow when in a lawsuit.

After a lawsuit is filed, each side is permitted to obtain information and documents from the other side. This process is referred to as discovery.

There are several methods of obtaining information – tools in the discovery tool belt. The methods covered in this book are those that are the least costly and easiest to employ: Interrogatories, Requests for Admissions, and Requests for the Production of Documents. Discovery enables you to get damaging information directly from the bank! Serving the lender with discovery. A defendant may usually commence discovery as soon as he or she has been served the complaint (the written document containing information about the lawsuit).

Sometimes, as is the case in federal court, there are mandatory disclosures that must be provided by each side without being asked. See Federal Civil Rule 26 for more information about mandatory disclosures if your foreclosure is in federal court.

Interrogatories are simply questions asked of the other party. For example, an interrogatory might say, “State the date and amount of each and every payment received by the plaintiff in payment of the mortgage or note since May 1, 2005.” They can be questions, or directed statements, such as this one is, telling the other side to provide specific written information you seek.

Usually, interrogatories are preceded by a list of definitions so the other side is clear on what you mean when you use a particular term. For example, in the suggested definitions following this chapter, “identify” has a very specific (and extensive) definition. These are usually used so the other side’s attorney can’t avoid answering the question based on a limited definition.

One of the most important things to remember about interrogatories is that they are generally limited in how many can be asked. In the Federal Rules of Civil Procedure, each party is limited to asking just 25 interrogatories, and they can only be directed to parties.

A party is someone or some organization who is suing or being sued in a lawsuit.

This means interrogatories can’t be served on the mortgage broker who took the borrower’s loan application unless he or she is first brought into the lawsuit as a party (accomplished by filing a third party complaint). Federal Rule 33 governs interrogatories in federal court. Look at your state’s rules for a heading called “Interrogatories.”

Many chapters will have a section that suggests some interrogatories based on that particular defense. This assumes you will be using the model interrogatory form, and adding in the suggested interrogatories as paragraphs where indicated.

Here are some general rules to follow with respect to interrogatories:

· Leave several spaces below each interrogatory for an answer.
· Some courts require the interrogatory form be provided on diskette or CD to the other party, so the other party can type in the answers and return it to you.
· You must mail a copy of your interrogatories to every other party in the lawsuit (everyone suing or being sued), even if the questions are only directed to the bank.
· You will usually need to mail a copy of the interrogatories to the court, to be filed with the case. (Read your state’s rule on interrogatories.)

Requests for Admissions.

Requests for admissions are simple statements that requires the other party to either admit or deny the true of the statement.

A request for admission to the lender might be, “Admit on May 5, 2006, plaintiff purchased the mortgage from ABC Corporation.”

The lender would then respond in writing with a simple “Admit” or “Deny.” If the lender objects to the request, it may state something similar to, “Plaintiff objects to this request for admission because….”

It may state it doesn’t have sufficient information to form a belief, or refuse to answer on other grounds.

The purpose of requests for admissions is that they narrow the scope of what is contested for trial. If the parties can admit that certain facts are true, then these facts do not generally need to be litigated later. These must be presented in a manner where the other side can either admit or deny each.

If you seek to ask questions with open ended responses, then using interrogatories or depositions might be more useful.

Depositions are beyond the scope of this book, but well-crafted interrogatories might get you the information you seek. In federal court,
like interrogatories, they can only be served on parties.

One of the most important facts to remember about requests for admissions is that in many states, failing to respond to requests within the time limit (30 days in federal court) is equivalent to admitting the statement’s truthfulness.

Be very careful if you are served with requests for admissions so your failure to respond doesn’t equate to admitting each!
Do not be late filing your responses, or you may find them deemed admitted.

Many chapters will have a section that suggests some requests based on that particular chapter. This assumes you will be using the model request for admission form, and adding in the suggested requests as paragraphs where indicated.

Here are some general rules to follow with respect to requests for admissions:

· Leave a couple of spaces below each for an answer.
· Some courts require the requests be provided on diskette or CD to the other party.
· You must mail a copy of your requests to every other party in the lawsuit (everyone suing or being sued), even if the questions are only directed to the bank. · You usually must mail a copy of the requests to the court, to be filed with the case.

Requests for the Production of Documents.

Requests for the production of documents or other tangibles (like records) are a right afforded to litigants during a lawsuit. You may ask the lender in a formal document to produce the original mortgage and note, as well as any other physical thing that relates to the lawsuit. Federal Rule 34 governs these requests.
It would be wise to get copy of the closing documents from the title company, lender, broker, real estate agent, and whoever else is involved in the transaction that may have copies.
You may also want obtain copy of the invoice and appraisal via subpoena to ensure the amount showing on the settlement statement is correct. If the party you want information from is not a party to the lawsuit, you may have to subpoena them for the information.

When you have been served with this type of discovery by the lender, you will not mail a packet of documents court (again, do not mail documents in response to this type of discovery request to the court), although the court may want you to file a Notice that you did, in fact, respond. You will only send the packet of documents to the party requesting that you produce documents.

Getting served with discovery.

Be very mindful that failing to respond to discovery within the time period prescribed by the rules can get you into deep trouble. Answering untruthfully can also get a party into trouble, opening up them to sanctions or attorneys fees and costs for trying to avoid a bona fide question.

Discovery Cut-Off.

In some areas, the court may set a date as the cut-off for discovery. That means you must complete your discovery requests to other parties by this deadline. If the court sets a deadline, it will be included within the cover page of the lawsuit, or a notice will be mailed to you directly.

How Homeowners Can Effectively Handle Discovery in Foreclosures

02 Monday Jun 2014

Posted by BNG in Discovery Strategies, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Non-Judicial States, State Court, Trial Strategies, Your Legal Rights

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This post details an experience of a Florida foreclosure defense Attorney challenging the big banks to proof their case. Homeowners and “Pro Se” litigants will learn from this experience when implementing strategies to win their foreclosure lawsuits.

Here it goes:

Many people who don’t work in the legal field and/or are unfamiliar with normal court procedures are surprised to see how a lawsuit actually works. It’s not like you see on TV, where a dispute arises and the parties are immediately thrust into a trial. In real life, all litigants have the right to obtain discovery from the other side. This means, in non-lawyer terms, that both sides have the right to require his/her opponent, prior to trial, to provide documents pertinent to the case, to answer interrogatories, and submit to depositions. It’s not like the old TV shows like Matlock, where a cunning lawyer could bring in a surprise witness during trial, win the case, and leave his opponent scratching his head, wondering what happened. Both sides have to disclose their witnesses, indicate what those witnesses are going to testify, and provide pertinent documents, usually long before trial ever begins. The process of obtaining documents from your opponent in a court case, identifying witnesses, and learning what those witnesses will testify is called discovery.

Florida law, like that in most states, has broad discovery rules. Not only must all parties disclose anything relevant to that case, but anything “likely to lead to the discovery of admissible evidence” should also be provided. These broad discovery rules ensure both sides can litigate fairly, preventing a ”trial by sagotage.” In some ways, trials in real life ares like a game of cards, except the participants all have their cards laid on the table, face up.

With this backdrop in place, the interesting question becomes – Do the same rules apply in foreclosure cases? Do homeowners get the same, broad rights to discovery (that every other litigant in every other case enjoys)?

According to the letter of the law, there is no reason to provide homeowners fewer rights in the discovery process than any other litigant. Foreclosure cases are litigated in court (in Florida, anyway), so if homeowners want to ask banks to produce documents, identify witnesses, ascertain what those witnesses will say, answer interrogatories, or submit to depositions, homeowners are perfectly entitled to do so.

In reality, though, it often doesn’t work this way. Banks and their lawyers hate providing discovery in foreclosure cases. They avoid it like the plague. Unfortunately, I’ve witnessed this dynamic many times in foreclosure cases, when bank lawyers respond to my discovery by saying:

You don’t need no stinkin’ discovery, Stopa. I have the original Note, with an endorsement, and that’s all that matters.

Perhaps I’m exaggerating a little, but not much. In my experience, it’s quite common for banks to respond to my discovery requests by saying “we have the Note, we have the mortgage, here is a life of loan history, and a corporate representative will testify at trial. That’s all we’re giving you.”

Obviously, I very much disagree with the banks’ approach in this regard, as I think my clients’ discovery rights are much broader than this. To illustrate, take another look at one of my favorite cases, McLean v. J.P. Morgan Chase Bank, N.A., 37 Fla. L. Weekly D 334 (Fla. 4th DCA 2012). In that case, the Fourth District reversed a summary judgment in favor of a bank because the bank did not prove it had standing at the inception of the case. As the court explained in detail, if a bank is relying on an endorsement to convey standing, it has to prove the endorsement was entered prior to the lawsuit being filed.

If you’ve ever looked at an endorsement on a Note in a mortgage foreclosure case, you know that such endorsements are virtually never dated. It’s just a signature on a piece of paper – no date. As such, it’s essentially impossible for anyone – a homeowner, a judge, or the lawyers for either side – to know when that endorsement was executed. So how is anyone supposed to know whether that endorsement was entered before the lawsuit was filed? In my view, that is a classic example of the type of thing a homeowner can inquire about in discovery. Send the bank an interrogatory and ask when that endorsement was entered. Better yet, send the bank an interrogatory like this:

Interrogatory: The Note you filed in this case on March 23, 2012 contains an endorsement by Mickey Mouse, as Assistant Secretary of Wells Fargo Bank, N.A. Please specify the date of this endorsement as well as the name, address, telephone number, job title, and job description of Mr. Mouse, to include his relationship with Wells Fargo Bank, N.A. on the date of the endorsement.

Of course, this is just one example of the many facts about which homeowners can inquire during the discovery process of a foreclosure case. To illustrate, I had a hearing this week that played out exactly like I described above. I served a Request for Production and First Set of Interrogatories on a bank in a foreclosure case. The bank’s lawyers responded with objections to nearly every request, refusing to disclose much of anything. So I filed a Motion to Compel compliance with these discovery requests. At the hearing, the judge granted that motion, compelling sufficient answers to 17 interrogatories (similar to the one above, but on a broad range of topics, to include forcing the bank to identify all of its witnesses and to provide information about any insurance payments on the subject note/mortgage). In fact, the judge agreed with every one of my requests except for one, finding this interrogatory to be irrelevant:
Interrogatory: Have you ever received any bailout money of any kind from the United States government, either pursuant to TARP or otherwise? If so, please identify the amount of money you received and how and when the money was spent/used/allocated. In your answer, please be sure to disclose the extent to which any such funds were used to provide loans of homeowners in Volusia County, Florida.

My argument for requiring the bank to answer this interrogatory went something like this … Mortgage foreclosure cases are proceedings in equity. A claim for a deficiency is a claim sounding in equity. There is nothing equitable about a bank taking billions of dollars in taxpayer bailout money, including from my clients, which money was intended to avoid foreclosures and provide loan modifications, but for those banks to refuse such modifications. Worse yet, there is nothing equitable about banks getting this bailout, flooding the real estate market with foreclosed properties, driving down property values because of those foreclosures, and then recoup 100% of its alleged deficiency, which it created, despite having been bailed out.

Unfortunately, despite agreeing with me on everything else, the judge did not require an answer to that interrogatory, strongly suggesting (without saying) that he did not agree with the premise of my argument. Respectfully, that’s terribly disappointing. Do you seriously mean to tell me that a bank should get to collect billions in bailout money, not use that money for loan modifications, create a flood of foreclosures in the real estate market, cause prices to drop, create a deficiency, foreclose, collect 100% of the deficiency, and that a homeowner can’t argue “wait, you shouldn’t be able to do this?”

Even if you don’t agree with that argument, I certainly think I should at least be able to argue it. To present evidence to support it (under Florida’s broad discovery rules).

I hope everyone reading this will think long and hard about that issue. Think about the broad discovery rules. Think about how mortgage foreclosure cases are proceedings in equity. Is it really that unreasonable for homeowners to ask, in the face of a lawsuit for foreclosure and a deficiency, “where did all the TARP money go?”

More importantly, if you’re a Florida homeowner, make sure you realize the rights you enjoy during the discovery process. I didn’t win on that interrogatory, but I won on 17 others, and I assure you – forcing the banks to answer such questions will only help as you fight your foreclosure.

End Post!

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What Homeowners in “Pro Se” Foreclosure Litigation Needs to Know About Perjury.

02 Monday Jun 2014

Posted by BNG in Federal Court, Foreclosure Defense, Fraud, Judicial States, Litigation Strategies, Non-Judicial States, Pro Se Litigation, Scam Artists, State Court, Your Legal Rights

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In foreclosure defense litigation across the Country, many large financial institutions and their well paid Attorneys routinely commits crime of perjury on a daily basis. Some of the way these entities perpetrate this crime, is by furnishing witnesses who made false statements under oath; or filling false affidavits and furnishing worthless pieces of forged documents in the forms of exhibits bearing false impressions; and of course, (getting Away with it), in their fraudulent attempts to illegally foreclose on properties they do not own.

In its most simple form, perjury is lying under oath. The crime of perjury is the willful swearing, either spoken or in writing, to tell the truth and then giving false information.

Perjury can occur even if the person has not been sworn to tell the truth, such as in a courtroom. Merely signing a document under penalty of perjury that contains false statements can be a crime. Signing an income tax return that contains false information is an act of perjury, for example.

In most jurisdictions, the false information has to be material to the issue or affect the outcome for perjury to be a chargeable crime. If the false statement directly affects the results of the case or causes a unjust decision to be made, the person can be charged with perjury.

Because the crime of perjury can cause a miscarriage of justice to occur, it is considered a very serious crime. Under U.S. federal law, for example, perjury is a felony punishable by up to five years in prison.

“I swear to tell the truth, the whole truth, and nothing but the truth” – a mantra recited dozens of times a week in TV shows and movies. It’s so familiar that its significance can be overlooked. But, when sworn in a court or other official proceeding, it makes everything said afterward either the truth or perjury.

Perjury, the crime of lying under oath, is a serious offense because it can derail the basic goal of the justice system—discovering the truth. Even the famous and the powerful have faced the consequences of perjury, which include prosecution (Barry Bonds), prison (Marion Jones), and impeachment (Bill Clinton).

Historically, perjury was defined as lying while testifying in court. The law now defines the crime to cover not just trials but also many other proceedings, including grand juries, family law court, bail hearings, Congressional committee hearings, and depositions in civil lawsuits. Sworn statements made to governmental agencies such as the Social Security Administration or in financial affidavits (such as loan applications) are also covered.

It’s also a criminal offense to cause another to commit perjury, called suborning perjury.

What Is Perjury?

A witness under oath commits perjury by making a statement in a court or other proceeding that the witness knows is not true. The statement must be “material” to the subject of the proceeding, meaning that it must have some relationship to the lawsuit, investigation, or inquiry of the proceeding. All parts of this definition are important, so let’s take a closer look at each:

Perjury only happens under oath. The witness must have vowed to tell the truth to someone who is authorized to administer the oath, such as a judge, notary public, or other official. And, the proceeding must be “competent,” that is, authorized by law. For example, a grand jury that has launched an investigation that is beyond its powers is not a competent proceeding.
Perjury requires a statement. Silence or a refusal to give a statement is not perjury (but may lead to other charges). In addition to testimony, a statement adopted in the proceeding, as when a witness authenticates a false writing while under oath, is also perjury.
Intent to mislead. The witness must know that the testimony is false and must give it with the intent to mislead the court.
Only false statements are perjury. False testimony that results from confusion, lapse of memory, or mistake is not perjury. Conflicts in testimony may be perjury if one of the conflicting statements is necessarily false (and prosecutors can prove perjury without proving which one is false).
Inconsistent statements can lead to perjury. A witness’s testimony is viewed as a whole. So, a witness who claimed he did not remember an event when questioned at one point in testimony, but who clearly recalled aspects of the event when asked later, may have committed perjury. (Inconsistency under oath is what led to Bill Clinton’s impeachment.) But, where a witness’s testimony is inconsistent in a way that is of no consequence in the proceeding, that is not perjury.
Statement made in court or other proceeding. False statements made outside of official proceedings are not perjury. For example, if a witness lies to a lawyer who is taking notes in order to draft an affidavit, the witness has not committed perjury (unless she later signs the affidavit under oath with the false statement in it). Sworn, written statements submitted to courts or government agencies are statements made in a proceeding and subject to perjury laws.
Only a “material” statement can be perjury. The false statement must be capable of influencing the proceeding – that is, it must have a relationship to the subject of the proceeding. This includes a false statement that would tend to mislead or hamper an investigation. This means that a lie, even under oath, about a subject that is not material to the proceeding is not perjury. For example, falsely bragging that “I never update my Facebook page at work,” while testifying in a case having nothing to do with social networking at work, would not be a likely candidate for a perjury charge.
A material statement that is superflouos to the outcome may still be perjury. Even where false testimony does not affect the outcome of a case, the lying witness may be prosecuted for perjury. For example, suppose an ex-cop is on trial for his involvement in a gambling operation. Several witnesses have testified to his involvement, but on the stand, he falsely denies any involvement. This denial would be a material statement, even though it arguably did not affect the jury’s finding of guilt (the jury had the other witnesses’ testimony to rely on).

Common Defenses to Perjury

Here are some common defenses to perjury.

True statements

Remember, perjury is giving false testimony—saying or writing something that is not true. This means that true statements, even when made to intentionally mislead, are not perjury. For example, where a defendant in a mail fraud case testifies that he did not “send” the fraudulent document because he did not actually put the document in the mailbox himself, he has told the literal truth and has not committed perjury. In such a situation, the prosecutor has to ask further questions (such as, “did you direct someone to drop the document in the mailbox?”) in order to get the defendant to admit to participating in the fraud, or get the defendant to lie about participating.

Recanted or corrected statements

Sometimes, witnesses say or write something that they later recant. Whether their change of heart constitutes a legally recognized defense to a perjury charge depends on the law of the state where charges would be brought. If the case were to be brought in federal court, one of two results is possible, courtesy of the two federal laws that concern perjury:

A person charged under a broad perjury statute (18 U.S.C. §1621) won’t necessarily avoid prosecution even by recanting during the same proceedings where she committed the perjury, but the recantation can be taken into consideration to show that the person did not intend to mislead.
Someone may be able to avoid eventual prosecution by recanting or correcting the false statement, but must do so during the same proceeding in which it was made; and the false statement must not have “substantially affected” the proceedings. But this only works if the witness is charged under the second, narrower statute (18 U.S.C. §1623). However, by admitting to the prior false statement (in order to take it back), the witness may open herself up to prosecution under the broader statute described above (§1621)! Needless to say, a witness who must decide whether to recant a false statement needs the advice of an experienced attorney (see below).

The “perjury trap”

In some cases, the prosecutor will call a defendant solely because the prosecutor knows that he will likely lie under oath, committing perjury, and the prosecutor doesn’t need his testimony for any other purpose. In these cases, a defendant will claim that this has happened and the prosecutor will deny it. Whether or not a prosecutor has actually set this “perjury trap,” this is a hard defense to raise, for two reasons:

No materiality. For a perjury charge to stick, the lie must be material, as explained above. But where the perjury trap involves asking about something that doesn’t really matter, the lie won’t rise to the level of perjury. So the better course is to claim simply that there’s no materiality.
The prosecutor’s hopes that the witness will lie aren’t enough to defeat the charge. After all, hoping a witness will lie doesn’t make that witness do so. As long as the questions asked of the witness are related to the issue under investigation or raised in a lawsuit, the prosecutor is not setting a trap, even if the prosecutor harbors a hope that the witness will lie.

Defenses that aren’t

Some defenses that you might think will apply will not be available in a perjury prosecution in certain situations. They include:

Double jeopardy. This defense claims that the defendant is being tried twice, in the same jurisdiction (court), for the same offense. It doesn’t apply when a defendant is being tried for a crime, but then is charged later for perjuring himself during trial. For example, a defendant in a rape case who was acquitted based on DNA evidence but lied under oath about his alibi may still be prosecuted for perjury.
The limits of immunity. Prosecutors sometimes offer immunity from prosecution to witnesses who themselves are (or could be) subject to criminal charges, but who have important information that would support a case against another, more serious criminal defendant. For example, a low-level accomplice might be granted immunity so that he can testify against a crime syndicate’s boss. But false testimony given after a prosecutor has granted a witness immunity may still be prosecuted as perjury!

How is Perjury Punished?

A person convicted of perjury under federal law may face up to five years in prison and fines. The punishment for perjury under state law varies from state to state, but perjury is a felony and carries a possible prison sentence of at least one year, plus fines and probation. Penalties are increased in relation to how much the perjury interfered with the proceeding. When the perjurer was a witness in his own criminal trial, his sentence for the underlying conviction may also be increased, on the grounds that a lying defendant is one who has a bad character and is not likely to be rehabilitated quickly.

Judges can punish a perjurer who lied under oath to hide or assist a crime in a way that goes beyond the sentence for perjury. That defendant may also be charged as an accessory to the crime he was attempting to hide or assist, if that charge will carry a greater sentence. And a perjurer may even be charged as an accessory to a crime of which he is convicted, if he lied to conceal that crime.

There is no civil remedy for a criminal defendant wrongly convicted based on another’s perjury, nor for a party to a civil lawsuit who loses because of a witness’s perjury.

A person who commits perjury also may have violated other laws that do provide remedies.

Homeowners need to fight these crime of perjury that is routinely crippling our justice system.

Home owners should wake up TODAY! before it’s too late by mustering enough courage for “Pro Se” Litigation (Self Representation – Do it Yourself) against the Lender – for Mortgage Fraud and other State and Federal law violations using foreclosure defense package found at http://www.fightforeclosure.net “Pro Se” litigation will allow Homeowners to preserved their home equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for Mortgage Fraud, Quiet Title and Slander of Title; amongst other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

9 Options For Homeowners Facing Foreclosure

26 Monday May 2014

Posted by BNG in Banks and Lenders, Federal Court, Foreclosure Defense, Judicial States, Loan Modification, Non-Judicial States, Pro Se Litigation, State Court, Your Legal Rights

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Many Homeowners facing foreclosure often wonder what are their best possible options. This post is designed to let homeowners struggling with mortgage payments what their best possible options are.

Option #1: Renegotiate with the lender

Step one is to contact your lender as soon as you know you can’t make a payment. The faster you move the more options you’ll have to fix your financial future. Borrowers may have the option of renegotiating their loan with the lender. Try to negotiate a plan that will enable the loan to be back in service. Lenders don’t want the property back; they want to keep their loan portfolio full of performing loans — not defaulting loans. Lenders say that the sooner they hear from a delinquent borrower in trouble, the easier it is to negotiate a solution.

Option #2: Reinstatement

Prior to a foreclosure sale, borrowers have the right to reinstate a delinquent loan. The reinstatement option gives homeowners the opportunity to make up back payments plus any incidental charges incurred by the bank such as filing fees, trustee fees and legal expenses. Paying off the reinstatement amount will cancel the foreclosure and enable the homeowner to continue to live in the home as if no default occurred. For many delinquent borrowers, however, reinstatement is not an option because they are deep in debt and cannot make up back payments, plus other expenses. Consult with a real estate attorney or an experienced real estate broker because reinstatement laws vary from state to state.

Option #3: Forbearance

One of the most overlooked foreclosure options a borrower has is forbearance. Forbearance is the postponement for a limited time of a portion or all of the payments on a loan in jeopardy of foreclosure. Partial or full payment waivers had their origins in the Great Depression. A lender expects that during the moratorium period the borrower can solve the problems be securing a new job, selling the property or finding some other acceptable solution.

Depending on your lender, you may be able to restructure your loan. For example, delinquent mortgage payments may be added to the backend of the borrower’s scheduled payments or the borrower could be given more time to bring the late payment current. Some mortgage companies are able to arrange a repayment plan based on your current financial situation. You may qualify for this option if you recently lost your job. Call your lender and inquire if you meet the requirements for forbearance.

Option #4: Redemption

To redeem a loan, the borrower must pay off the loan in full. Borrowers may accomplish this by refinancing (with a family member cosigning perhaps) or by a friend or relative bailing out the borrower in exchange for equity or some other financial arrangement. Again, redemption rights — like reinstatement rights — vary from state to state. Most states permit redemption up to the foreclosure sale.

Option #5: Sell the Property

For owners who don’t care to save the property, or who have no other choice than to let the property go, selling the property may be a smart choice. If you have enough equity in the house to allow you to pay off the mortgage in full, then a sale is usually your best option. This option preserves your equity and what’s left of your credit score. Selling also leaves you in a much better financial position should you want to buy another home in the future. Even if you don’t have equity, you may be able to arrange a short sale, where the bank agrees to forgive the mortgage debt for less than the total amount owed on the mortgage if you sell the property to a third party. The advantage to the lender is that it does not have to deal with costly foreclosure proceedings.

Option #6: Deed in Lieu of Foreclosure

For homeowners who have no opportunity to reinstate, redeem or even sell their property and just want out of the property, a deed in lieu of foreclosure may be viable option. Essentially, a deed-in-lieu of foreclosure is a transfer of title from a borrower to the lender, which the lender accepts as full satisfaction of the mortgage debt. With this option, you as a borrower voluntarily “give back” your property to the mortgage company. You won’t save the house, but you do avoid the trauma of foreclosure and reduce the negative impact on your credit.

Option #7: Bankruptcy

Filing bankruptcy is not a permanent cure for foreclosure, but it can temporarily halt the foreclosure process. Once a borrower in default files a petition for bankruptcy, foreclosure proceedings stop immediately. A homeowner, however, must hire an attorney in order to file bankruptcy, which can be expensive. Before considering this option, a homeowner should consult a real estate attorney.

Option #8: Foreclosure

Allowing the foreclosure to proceed to the auction is generally the worst choice. By doing nothing, homeowners will lose their home and any equity they have earned. Plus they will damage their credit at the same time. Moreover, some states allow lenders to go after borrowers in court for any deficit between what the house eventually sells for and what the homeowner owes. This is called a deficiency judgment. Unfortunately, many homeowners chose this option, putting their heads in the sand and hoping they’ll win the lottery and avoid foreclosure.

Option #9: “PRO SE” LITIGATION

“Pro Se” Litigation (Self Representation – Do it Yourself) – for Mortgage Fraud using foreclosure defense package found at http://www.fightforeclosure.net homeowners preserved their equity, saves Attorneys fees by doing it “Pro Se” and pursuing a litigation for mortgage fraud amongst other causes of action. This option allow the homeowner to stay in their home for 3-5 years for FREE without making a red cent in mortgage payment, until the “Pretender Lender” loses a fortune in litigation costs to high priced Attorneys which will force the “Pretender Lender” to early settlement in order to modify the loan; reducing principal and interest in order to arrive at a decent figure of the monthly amount the struggling homeowner could afford to pay.

Six Most Effective Ways For Homeowners to Stop Foreclosures

25 Sunday May 2014

Posted by BNG in Bankruptcy, Banks and Lenders, Federal Court, Foreclosure Defense, Judicial States, Litigation Strategies, Loan Modification, Non-Judicial States, Pro Se Litigation, State Court, Your Legal Rights

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In recent years, many homeowners found themselves in difficult financial situations that requires serious round the table decision making.

Anytime a homeowner runs into financial trouble dire consequences can enter into the equation. That is especially true when it comes to foreclosure of the home that was used to secure the debt owed to the lender who is now foreclosing to get title to the property back.

However, there are several methods that homeowners in financial distress can use to stop foreclosure fast. Some methods require money, while others require agreement to forgo money by the lender or through the court system using the complete foreclosure package found at http://www.fightforeclosure.net

Here’s 6 steps to take that can help stop the foreclosure process dead in its tracks:

Step 1: Don’t Panic.

Most households have a surprising array of assets that can be used to make payments and delay foreclosure. Unemployment insurance, disability insurance and savings are each potential cash sources. Household budgets can be slashed. Big, expensive cars can be traded in for cash. Retirement funds are often available — but be aware that withdrawals may result in penalties and additional income taxes.

Step 2: Late and Missed Payments.

If problems cannot be delayed or deferred, and if mortgage payments will be late or unpaid, then you MUST contact the lender as soon as possible.

At this point your goal is to help the lender create a “workout” agreement that effectively modifies your mortgage so that the foreclosure can be stopped before going to completion.

Step 3: Look at Workout Options.

Once you enter into discussions with a lender or a “servicer” — the company that services the loan for an investor — any number of options are open. While lenders are typically NOT required to modify loan arrangements, many will. The usual choices include:

Loan Modification: “This option should be considered when the borrower experiences difficulty making regular mortgage payments as a result of a permanent or long-term financial hardship,” says Liz Urquhart with AIG United Guaranty, a leading private mortgage insurance company. “Reducing an above-market interest rate to a market rate and/or by extending the original terms of the note may enable the borrower to continue making payments. Permanent interest rate reductions appeal most to borrowers, but even a temporary rate reduction of one to three years can provide substantial help.”

Repayment plans: Say you must miss a payment and that each payment is $1,000. With a repayment plan you might pay $1,075 a month until the missing money is repaid.
Reinstatement: Imagine you missed two or three monthly payments. With a reinstatement, or what is also known as a “temporary indulgence,” you bring your loan current, pay late fees and other costs, and the loan continues as before.
VA Refunding. If you have a loan backed by the Department of Veterans Affairs, the VA may buy the loan from your lender and take over the servicing. If you have the ability to make mortgage payments, but your loan holder has decided it cannot extend further forbearance or a repayment plan, you may qualify for refunding, according to the VA.
FHA loans: If you financed with a loan guaranteed by the Federal Housing Administration, call 1-800-569-4287 or 1-800-877-8339 (TDD) to reach a HUD-approved housing counseling agency for assistance and advice.
Forbearance: This is a temporary change in mortgage terms, such as the right to skip a payment or make smaller payments for a year or less.
Private mortgage insurers. Mortgage insurance companies typically require lenders to begin foreclosure proceedings once a delinquency reaches 150 days or when a sixth missed payment is due. However, such requirements may be waived in areas impacted by natural disasters and for other reasons.
Claim advance: If you bought with less than 20 percent down then either the loan is self-insured by the lender or you have private mortgage insurance (PMI). In some cases PMI companies will provide a cash advance to bring the loan current — money which is sometimes interest free and need not be repaid for several years.
Disasters: Most lenders, but not all, will provide substantial relief in the face of hurricanes, earthquakes and other terrible events. Typical measures include a suspension of late fees, no late payment reports to credit bureaus, a pause in foreclosure actions and modified payment schedules. To get such benefits you must contact the lender as soon as possible after the disaster.
Re-amortization: In this case your missed payment is added to the loan balance. This brings your account current. However, says Saccacio, “since your debt has increased, future monthly payments may be larger unless the lender agrees to lengthen the loan term.”
Deed in Lieu: The deed-in-lieu would allow you to sign over legal ownership to your home for the lender’s agreement not to foreclose.
Short Sale: An arrangement where the lender accepts less than the mortgage debt in satisfaction for the entire loan amount. Also called a “compromise agreement” with VA loans. Be cautious: Saccacio says in some instances money not repaid may be regarded as taxable income. Also, lenders in some cases may sue to recover any shortfall.
Bankruptcy: When all other options are exhausted many homeowners consider bankruptcy as a last resort to save their home. Unfortunately, in most cases bankruptcy only delays the inevitable; in the worst case it can actually speedup the process.
Full Blown “Pro Se” Litigation (Self Representation – Do it Yourself) –for Mortgage Fraud using foreclosure defense package found at http://www.fightforeclosure.net which will allow you to stay in your home for 3-5 years for free without making a red cent in mortgage payment.

Step 4: Refinance the Loan.

Since 2001 millions of loans with new formats have been issued, permitting low monthly payments for the first several years of the loan term and then much higher monthly payments thereafter.

If you have a loan where soaring payments are a certainty, don’t wait to refinance. Do it now while you have a strong credit profile and no missed payments.

Step 5: Sell the Property.

In some situations there is no workout or refinancing option which can save a property. If a job is lost, medical payments are overwhelming, or mortgage payments are rising to the point of bankruptcy the only plausible choice may be to sell the property.

If the situation is getting worse every month, you have to protect your interests and sell the property. This is a hard choice but if you sell before foreclosure you will get a better price for the property and preserve your credit standing.

Most importantly, remember that there still are options, but you have to act quickly. Also, never rule out seeking out foreclosure assistance like using the package found at http://www.fightforeclosure.net to fight the lender for mortgage fraud among others.

If you find yourself in an unfortunate situation of losing or about to lose your home to wrongful fraudulent foreclosure, and need a complete package that will help you challenge these fraudsters and save your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

Caution to Homeowners About Bankruptcy Foreclosure

25 Sunday May 2014

Posted by BNG in Bankruptcy, Federal Court, Foreclosure Defense, Judicial States, Loan Modification, Non-Judicial States, Pro Se Litigation, State Court

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Many Homeowners sometimes wonder about what their options are when they defaults on their mortgage loans and what possible options they might have with Bankruptcy.

There’s not enough money at the end of all the bills you have to pay. You need one more paycheck to make ends meet. Costs of living keep going up and your monthly paycheck isn’t keeping up with the price of gas, the cost of food and everything else you value in your life. You can’t save anything because all your money goes to paying bills and supporting yourself and/or your family. And then . . .

One day you receive a piece of paper in the mail called a “Notice of Default” or a process server hands you a “Lis Pendens.” Either way, both are bad news because they mean your lender has initiated foreclosure proceedings against you (in either a non-judicial or a judicial foreclosure state respectively) because you owe back payments — typically three months worth. . . or more.

And then you start thinking, “Maybe I could cheat fate by filing for bankruptcy. That will wipe out all my debts. I can stop the foreclosure, keep the house, and the lender can’t do anything about it.” Well, think again!

If you file for personal bankruptcy under Chapter 7 a so-called “automatic stay” is placed on all your creditors, including the foreclosing lender, by the court. HOWEVER, the stay is only a temporary fix to the situation.

Chapter 7 never permanently stops home foreclosure. It only gives you relief from unsecured creditors like credit cards and prevents certain creditors from pursuing collection action against you. It does NOT discharge debts such as taxes, child support, alimony or student loans, nor can it give you relief from other secured creditors — like your lender — whose debt is secured by the home you’re living in.

In fact the “automatic stay” is only effective so long as the court wants it to be in place. At any time the court can grant your lender’s motion for “relief from the automatic stay.” Once the court grants that motion the foreclosure against your home can proceed to conclusion.

One viable exception does exist, however, by filing for a Chapter 13 bankruptcy. Under Chapter 13 you are allowed to sit down with your creditors and arrange a payment plan to pay back what you owe them over a given length of time and usually on a lower payment schedule. Once accepted, the creditors, like your lender, must abide by the terms of the plan.

Call it financial reorganization or a workout plan, any way you look at it Chapter 13 is a good way to save your home from foreclosure, and can indeed stop foreclosure so long as you continue to make the payments agreed to under the plan until all debt owed is totally paid off.

In essence, then, through a Chapter 13 debt reorganization plan you can cure the default and save your home. However, you must realize up front that not everyone qualifies to file for bankruptcy. There are certain threshold qualifications that must be met which were tightened up when the U.S. Bankruptcy Code was revised a few years ago.

Additionally, there are court costs to be paid, AND, of course, the homeowner must hire an attorney who is going to want to get paid too!

If you find yourself in an unfortunate situation of losing or about to your home to wrongful fraudulent foreclosure, and need a complete package that will help you challenge these fraudsters and save your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net

FightForeclosure.net

~ Your "Pro Se" Foreclosure Fight Solution!

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True statements

Recanted or corrected statements

The “perjury trap”

Defenses that aren’t

9 Options For Homeowners Facing Foreclosure

Option #1: Renegotiate with the lender

Option #2: Reinstatement

Option #3: Forbearance

Option #4: Redemption

Option #5: Sell the Property

Option #6: Deed in Lieu of Foreclosure

Option #7: Bankruptcy

Option #8: Foreclosure

Option #9: “PRO SE” LITIGATION

Six Most Effective Ways For Homeowners to Stop Foreclosures

Step 1: Don’t Panic.

Step 2: Late and Missed Payments.

Step 3: Look at Workout Options.

Step 4: Refinance the Loan.

Step 5: Sell the Property.

Caution to Homeowners About Bankruptcy Foreclosure

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True statements

Recanted or corrected statements

The “perjury trap”

Defenses that aren’t

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Option #1: Renegotiate with the lender

Option #2: Reinstatement

Option #3: Forbearance

Option #4: Redemption

Option #5: Sell the Property

Option #6: Deed in Lieu of Foreclosure

Option #7: Bankruptcy

Option #8: Foreclosure

Option #9: “PRO SE” LITIGATION

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Step 1: Don’t Panic.

Step 2: Late and Missed Payments.

Step 3: Look at Workout Options.

Step 4: Refinance the Loan.

Step 5: Sell the Property.

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