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He Built Houses For Years. Now Housing Speculators Are Trying To Hound Him Out Of His Home.

October 31st, 2015 by

He Built Houses For Years. Now Housing Speculators Are Trying To Hound Him Out Of His Home.

rabolli-lawsuit-housing-speculators/ AP PHOTO MATT YORK
CREDIT: AP PHOTO/MATT YORK

 

FROM THINK PROGRESS.ORG
ECONOMY

For decades, Bill Rabolli built firehouses, family homes, and just about anything else people wanted made out of wood in northern New Jersey. A reputation for quality workmanship helped grow his carpentry business large enough that he needed a staff of 15 to keep up.

Then it all went to hell. Business had been slowing for a couple of years when the market crash cratered the broader economy in 2008. Suddenly clients were delaying payments or cancelling jobs entirely.

“It was shockingly quick,” Bill said in an interview. “My crew went down to like three other people and myself. The people that worked for me had families, and I wanted them to get a paycheck. But it got down to where it was costing me money to pull out of my own driveway and go to work.”

Bill says he was up front with his mortgage company about his hardships. “I told them I was going to miss that payment and it doesn’t look good for the next, either,” he said. After defaulting on the loan in August 2008, he struck a forbearance agreement: the Rabollis wouldn’t face foreclosure while they made up the missed payments gradually in future months.

It seemed, for a time, like the carpenter and his family would weather the worst of the recession and come out of it something close to intact. In arrears, maybe, but still in the Allendale, NJ home they have shared for decades.

But the company that gave Bill a forbearance decided to cut bait on him and sell his mortgage to another firm, which tried and failed to foreclose on the family before reselling the loan to yet another firm.

A stranger knocked on the back door in the spring of 2012, Bill said, and told him whatever deal he’d been promised to keep re-finance his loan and keep the house was no longer on the table. Over the next two-plus years, according to a lawsuit filed this fall, a trio of tiny New York companies milked him for cash and tried to take possession of his home using a dizzying mixture of charm, cajoling, and outright harassment.

It really feels a little Sopranos-esque at times.

That’s not how the housing market is supposed to work, even in these last-resort situations. But after wave upon wave of foreclosures and defaults around the country, the kinds of companies that actually operate as mortgage finance firms with incentive to keep people in their homes whenever possible have retreated. And a crop of new buyers that act more like debt collectors than housing companies is springing up to fill the void, often taking care to stay small enough to stay off the federal government’s radar.

These new entrants fracture the incentive structure of the housing marketplace, bringing in different kinds of profit motive that too often run counter to homeowners’ interests. It couldn’t have happened at a worse time for the country as a whole, or for Bill Rabolli.

Now the man who supported his family by building houses for others is struggling to keep hold of the home where he, his wife Terri, and their teenage daughter have lived since 1997.

The lawsuit targets three separate companies, but Bill’s lawyers at the firm Denbeaux & Denbeaux are pretty sure the trio were in cahoots throughout the carpenter’s nightmare. The man at the helm of the alleged conspiracy is Cornerstone Realty Partners President Frank Rizzo, who first walked through their side yard to knock on their back door.

“There’s no modification coming, but don’t worry, this is better. You’re gonna be happy I bought this,” Terri says Rizzo told them that day. But “the first thing he did was try and get money from us.”

It was an even heavier blow because they’d thought they were on the verge of finally striking a deal with the company that had just sold their loan to Rizzo. Kondaur Capital almost never does modifications. It’s part of a new class of companies on the housing finance scene who operate as debt collectors rather than dealmakers.

Rizzo allegedly told them to expect a call from Christopher McElroy of Fort Funding Corp., another of the companies the Rabollis are suing. “Fort Funding absolutely denies any wrongdoing whatsoever and looks forward to clearing it up,” attorney Joseph Armstrong told ThinkProgress. Rizzo did not respond to a request for comment by press time.

Shaken by the sudden evaporation of their deal with Kondaur, the plan McElroy allegedly proposed sounded like a giant relief to the Rabollis. They would send him their financial documents along with three checks for over $2,500 each, dated for the next three months. That would let McElroy get started figuring out what kind of modification might be possible, they say he told them.

In fact, according to the Rabollis’ attorneys, both Rizzo and McElroy never had any intention of saving the family’s mortgage. They were acting as debt collectors, looking to wring enough money out of the family and the house to exceed the cut-rate price they’d paid to buy the loan from Kondaur.

It was like we were in fucking purgatory.

That’s the opposite of what’s supposed to happen with struggling mortgage, Center for American Progress housing finance expert Sarah Edelman told ThinkProgress.

“The best outcome for a neighborhood is, whenever possible, for the homeowner to stay in their home,” Edelman said. “If home retention can’t be achieved, companies need to do something that helps stabilize the neighborhood, not destabilize it. That means avoiding foreclosure at all costs.”

Traditional housing finance companies stand to make more money by keeping the original occupant in place, even if it means modifying a loan in ways that dramatically slow the flow of cash back to the lender. But with a massive number of mortgages underwater in the wake of the financial crisis, these traditional industry actors were eager to get all that bad paper off their books.

Enter the speculators. Much like uncollected credit card and medical debts get resold for pennies on the dollar to collections agents who will hound debtors into repaying a larger share of the debt than what they paid to buy it, distressed mortgages are flooding into the collections industry’s hands. Unlike traditional housing companies that make money by preserving the value of a home, these actors profit by getting more out of both homeowner and property than they paid to buy a loan.

The first thing you hear when you call Kondaur Capital is a recorded warning that the company is a debt collector. The people the Rabollis are suing never offered such a disclosure, according to the lawsuit, even though it is required by federal law.

The fallout from all this speculation is still taking shape. It doesn’t always produce the kind of horror story the Rabollis are accusing Rizzo of engineering. Wall Street firms are buying up huge numbers of family homes in order to rent them out, creating a frightening new type of landlord-tenant relationship and the potential for a new kind of housing bubble. And the government isstruggling to ensure that distressed loans go to buyers who will try to preserve homeowners’ rights and communities’ economic wellbeing.

READ: Why A Bank Was Allowed To Plunder Family Heirlooms That Escaped The Nazis

“I don’t think it’s quite as simple as all these companies are total deadbeats,” Edelman said. “[It’s not] always worse for the consumer to have one of these companies buy your loans.” There are small servicing companies out there with strong records of producing good outcomes for homeowners and neighborhoods, she said.

But there’s no good data out there to assess the overall performance of this new class of housing speculators. “Their portfolios are growing very rapidly and we don’t know much about them or their capacity to do good work,” she said.

The Rabollis gave McElroy his three checks, and later a fourth. Fort Funding allegedly cashed a total of $10,268 in ostensible mortgage payments from the couple, furnished mostly by the job Terri found when demand for Bill’s trade dried up.

They never got a mortgage statement in return, according to the complaint. They say they asked Rizzo and McElroy repeatedly to mail them documents showing where their money was going and how far they still had to climb out of the hole that threatened to swallow their home. Nothing was delivered.

Without proof of the four monthly payments from Rizzo or McElroy, they had no hope of getting any kind of re-financing from a traditional mortgage broker.

“It was like we were in fucking purgatory,” said Terri. By the fall, Rizzo had offered them $20,000 plus a sliver of any profit Cornerstone would make by selling their home if they would the house and renounce ownership. Over the following months, the lawsuit alleges, “several people came to Plaintiffs’ home and could be seen inspecting the home from the outside.” The Rabollis said that multiple people interested in buying a house from Frank Rizzo harassed both their downstairs tenant and, on one occasion when they were not home, their young daughter.

“Jen had already told him, my parents are not home, but he wanted to come in,” Terri said. “After that we told her don’t answer the door. We felt like prisoners in our own house.”

Months later a man named Carmine Masullo showed up in Allendale. Masullo told the couple he could almost certainly get them a modification to save their home, for a modest fee.

But like every previous attempt, the couple say, Masullo’s efforts mostly amounted to wheel-spinning and eventually they stopped believing his claims.

We felt like prisoners in our own house.

Soon Masullo was texting and calling Bill and Terri at all hours. Sometimes it was with an encouraging word about his promised modification. Other times it was to threaten them with imminent foreclosure if they didn’t agree to a payoff that same day.

Neither Masullo nor Rizzo have the proper business registrations for their Staten Island firms to conduct business in New Jersey, according to the lawsuit. Yet “you have the cojones to go door to door, to the back door, to send other people there.” plaintiffs’ attorney Adam Deutsch said. “It really feels a little Sopranos-esque at times.”

Reached by phone briefly, Masullo told ThinkProgress that “most of [these claims are] not accurate.”

“What you’re gonna need to do is speak to Frank Rizzo, because he’s the one that’s actually involved in this and I’m not,” Masullo said, before hanging up.

The Rabollis remain in their house, but that doesn’t mean it feels like home. “It does in one way, and in another it really doesn’t,” Bill said. “I wake up in the middle of the night in a ball of sweat. It’s like a living nightmare.”

“The stress was unbelievable,” Terri said. “I went on meds. My nerves were shot, I couldn’t work.”

Just a few years ago they wouldn’t have had much ability to fight back against the alleged harassment and the scheme that Denbeaux & Denbeaux believe they’ve uncovered. The Dodd-Frank legislation that overhauled financial industry regulation across the board included some rules for the mortgage industry that give homeowners new rights.

“That means you don’t have to rely on federal regulators to go ahead and prosecute something,” Deutsch said.

Bill says the whole thing nearly knocked the fight out of him before he ever knew the law provided a chance to go on the attack. “I’m a pretty principled person. I really feel this whole thing is not right,” he said. “But I had thought– I mean, it’s been very detrimental to both my wife, my daughter and myself– maybe it’s the wrong call.”

“Maybe I should’ve thrown my keys on the counter and walked, even if I didn’t know where I was gonna be walking to.”

NJ Lawyer Using Federal Consumer Law Models Supreme Court Oral Hearing on FDCPA

October 30th, 2015 by

In Chung v. Shapriro and Denardo, Docket :14-cv-06899-FSH-JBC the District Court of New Jersey sustained the right of a debtor to seek collection of statutory damages for violations of the Fair Debt Collections Practices Act. On November 2nd the Supreme Court will determine whether plaintiffs going forward can enforce Congressionally enacted consumer rights statutes based solely on claims for statutory damages.

The United States Supreme Court is back in session with the majority of media coverage and debate being focused on cases addressing affirmative action in college admissionsunion rightsabortion, and the manner in which populations are counted in drawing voting districts. While it may lack obvious sex appeal, there is one case that has the potential to affect the rights of the 280 million Americans who have credit history by neutering the consumer protection statutes that allow consumers to recover a nominal statutory fine when laws such as the Fair Credit Reporting Act, Fair Debt Collection Practices Act, Real Estate Settlement Procedures Act and Truth in Lending Act are violated. Each of these statutes play a vital role in self-regulation of our financial markets.

In Chung v. Shaprio and Denardo the law firm of Denbeaux and Denbeaux defeated a motion to dismiss by a debt collection law firm and established the right of a debtor to seek enforcement of the Fair Debt Collections Practices Act based on a statutory damage claim. Core issues in that case are now before the Supreme Court on November 2nd, 2015.

Adam Deustsch, Esq. Host of FCRT

“The upcoming oral argument before the Supreme Court may determine whether consumers will be able to continue bringing private rights of action to enforce statuary damages where no actual damages have been suffered. In the upcoming argument a corporation is asking the Court to find unconstitutional, the awarding of a statutory fine when the consumer plaintiff does not also prove actual damages resulting from the wrongful conduct. The case has the potential to restrict the operation of free markets and roll back the progress of civil rights which should cause us all to have great concern,” says NJ lawyer Adam Deutsch.

“The vital function at risk is not only for consumers but the marketplace at large. Denbeaux and Denbeuax addressed that function in Chung v. Shapairo and Denardo, LLC.

Congress enacted a series of consumer protection laws, such as that being enforced by Chung, to encourage consumers to be watchdogs that can effectively police the financial industry without the intervention of big government.”

“The key legal question before the Supreme Court is whether a statutory damage enacted by Congress can be used to establish a concrete injury and satisfy the constitutional requirement of standing. Although this may seem hyper technical, the significance cannot be overstated, ” says lawyer Adam Deutsch.

Mr. Deutsch goes on to say, “Since the 1970’s, as part of the final chapter in civil rights legislation, Congress has enacted a series of consumer protection statutes that provide individual consumers with a private right of action to protect themselves from overzealous greedy companies. These statutes also provide enforcement mechanisms by governmental agencies such as the Federal Trade Commission and Consumer Financial Protection Bureau. The private right of action component is the ultimate free market self-regulation mechanism because it empowers consumers to be industry watchdogs, incentivizes companies to adhere to the law, and prevents the Federal Government from having to grow and be burdened with the obligation of enforcement. This function is recognized in the statement of purpose for the Fair Credit Reporting Act which states “The banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system…” and “[t]here is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.” By providing a nominal statutory damage, right to recover costs and attorney fees, Congress incentivized every day American consumers to be watchdogs, to report and act upon their rights while having the natural effect of preventing injuries to other consumers and the public at large.”

“Demonstrating the consequences at risk in this case to be heard by the Supreme Court, there have been forty three amicus curiae briefs (friend of the court) filed by companies and organizations that are not parties to the case but are attempting to sway the Court. The overwhelming majority of the non-party briefs are submitted on behalf of corporations, and do not represent the consumer interest or good of the public. The Association of Credit and Collection Professionals argues in its brief for the Court to expand its ruling beyond the Fair Credit Reporting Act, stressing “this case’s implications go beyond the statute at issue and affect the credit-and-collection industry at every level.” The stakes are high. If the right to sue a company that violates federal law in the course of publishing or reporting credit information and recover a statutory damage for doing so is eliminated, the public will suffer. Enforcement obligations will be entirely on the shoulders of the Federal Government which does not have the man power, budget, or time to prevent individual violations that occur on a daily basis. Congress has empowered you and I, the consumer to play a vital role in maintaining a self-regulating free market banking and credit system. We know what happens when enforcement powers are relegated only to the Federal Government because we experienced it in 2008. The entire purpose of hearing this oral argument is to see whether the federal government gets bigger in order to sustain the efforts of the CFPB, or if the laws them selves disappear.” concludes Mr. Deutsch.

Adam Deutsch is an attorney at the law firm of Denbeaux and Denbeaux located at 366 Kinderkamack Road Westwood New Jersey 07675. Tel: 201-664-8855 or email pr(at)denbeauxlaw(dot)com. Mr. Deutsch also hosts the Financial Consumer Rights Talk podcast.

Denbeaux and Denbeaux is a family operated law firm with a tradition of excellence in consumer rights and family law. Formed in 1989, Denbeaux & Denbeaux is a law firm dedicated to providing top level legal representation to its clients. Their work has been featured in major media sources throughout the country including CNN, MSNBC, NPR, C-SPAN, CBS Evening News, the Associated Press, The Star Ledger, and The Record.

The partners, Marcia Denbeaux and Joshua Denbeaux, represent individuals and businesses in New Jersey State and Federal Trial and Appellate Courts. The firm primarily practices civil litigation, with a concentration in , consumer fraud, commercial litigation, matrimonial law, business, insurance coverage litigation, and mortgage foreclosure defense.

NJ Attorney Fights Foreclosure with Federal Laws

October 27th, 2015 by

NJ Attorney Fights Foreclosure with Federal Laws

In New Jersey, the trend in foreclosure litigation has been to narrow the defenses available to homeowners almost to the point of non-existence. In light of CFPB Director Richard Cordray’s recent remarks regarding “mandatory pre-dispute arbitration clauses”, Joshua Denbeaux explains how his firm combats this growing problem, by using federal laws enforced by the CFPB to protect NJ homeowners in foreclosure.

Consumer Finance Protection Bureau Director Richard Cordray delivered remarks to the Consumer Advisory Board last week regarding “arbitration’s role in resolving consumer complaints.”


Director, Richard Cordray

“Companies have been able to use these obscure clauses to rig the game against their customers to avoid group lawsuits. Group lawsuits can result in substantial relief for many consumers and create the leverage to bring about much-needed changes in business practices. But by inserting the free pass into their consumer financial contracts, companies can sidestep the legal system, avoid big refunds, and continue to pursue profitable practices that may violate the law and harm consumers on a large scale, ” Directory Cordray went on to say in prepared comments.

Nowhere else are consumers being harmed on as large scale as in New Jersey where the foreclosure rate is the highest in the U.S., according to a report released by Realty Trac on October 15, 2015. In New Jersey, the trend in foreclosure litigation has been to narrow the defenses available to homeowners almost to the point of non-existence. To combat this growing problem, Joshua Denbeaux explains why Denbeaux and Denbeaux proactively fights for the rights of consumers in concert with the CFPB.

Josh Denbeaux, Esq. at CFPB Field Hearing

“I have a transcript where a judge in New Jersey says ‘fraud is not a defense to a foreclosure.’ It’s been said to me off the record 3 or 4 times in different counties. I have four different judges who don’t allow discovery to happen in foreclosure cases because the bank has a note and created an assignment of mortgage,” Mr. Denbeaux asserts.

Free download The Six Warning Signs of a Possible Consumer Protection Law Violation

The law firm of Denbeaux and Denbeaux is located at 366 Kinderkamack Road Westwood New Jersey 07675. Tel: 201-664-8855 or email pr(at)denbeauxlaw(dot)com.

Denbeaux and Denbeaux is a family operated law firm with a tradition of excellence in consumer rights and family law. Formed in 1989, Denbeaux & Denbeaux is a law firm dedicated to providing top level legal representation to its clients. Their work has been featured in major media sources throughout the country including CNN, MSNBC, NPR, C-SPAN, CBS Evening News, the Associated Press, The Star Ledger, and The Record.

The partners, Marcia Denbeaux and Joshua Denbeaux, represent individuals and businesses in New Jersey State and Federal Trial and Appellate Courts. The firm primarily practices civil litigation, with a concentration in , consumer fraud, commercial litigation, matrimonial law, business, insurance coverage litigation, and mortgage foreclosure defense.

Supreme Court Watch: Consumer Rights Under Attack

October 26th, 2015 by

Supreme Court Watch: Consumer Rights Under Attack

 by Adam Deutsch Esq.

The Supreme Court will hear oral argument in Spokeo, Inc. v. Robins in which a corporation is asking the Court to find unconstitutional, the awarding of a statutory fine when the consumer plaintiff does not also prove actual damages resulting from the wrongful conduct on November 2, 2015.

The case has the potential to restrict the operation of free markets and roll back the progress of civil rights which should cause us all to have great concern.

The United States Supreme Court is back in session with the majority of media coverage and debate being focused on cases addressing affirmative action in college admissionsunion rightsabortion, and the manner in which populations are counted in drawing voting districts.  While it may lack obvious sex appeal, there is one case that has the potential to affect the rights of the 280 million Americans who have credit history by neutering the consumer protection statutes that allow consumers to recover a nominal statutory fine when laws such as the Fair Credit Reporting Act, Fair Debt Collection Practices Act, Real Estate Settlement Procedures Act and Truth in Lending Act are violated.  Each of these statutes play a vital role in self-regulation of our financial markets.  On November 2, 2015 the Supreme Court will hearoral argument in Spokeo, Inc. v. Robins in which a corporation is asking the Court to find unconstitutional, the awarding of a statutory fine when the consumer plaintiff does not also prove actual damages resulting from the wrongful conduct.  The case has the potential to restrict the operation of free markets and roll back the progress of civil rights which should cause us all to have great concern.

At the heart of Spokeo is a concept of constitutional law known as “standing,” which requires a litigant to show (1) a concrete injury (2) caused by the defendant and (3) for which some remedy can be provided by the Court.  Standing is not a test of a case’s merits, but requirement to obtain access to the Court.  Spokeo challenges whether a concrete injury can be a statutory damage established by Congress, where the Plaintiff did not suffer any actual damages resulting from the offending conduct.  Specifically, Robins sued under the Fair Credit Reporting Act and sought to recover a statutory damage ranging from $100-1,000 that Congress enacted to be imposed against any entity whose conduct willfully violated the statute.  Robins alleged that false information regarding his finances and employment history were published in violation of the Fair Credit Reporting Act, however Robins did not allege that he suffered actual damages resulting from the publication.  By suing, Robins provided a vital function to make sure the same conduct is not repeated causing actual damage to you or me.  The key question is whether a statutory damage enacted by Congress can be used to establish a concrete injury and satisfy the constitutional requirement of standing.  Although this may seem hyper technical, the significance cannot be overstated.

Since the 1970’s, as part of the final chapter in civil rights legislation, Congress has enacted a series of consumer protection statutes that provide individual consumers with a private right of action to protect themselves from overzealous greedy companies.  These statutes also provide enforcement mechanisms by governmental agencies such as the Federal Trade Commission and Consumer Financial Protection Bureau.  The private right of action component is the ultimate free market self-regulation mechanism because it empowers consumers to be industry watchdogs, incentivizes companies to adhere to the law, and prevents the Federal Government from having to grow and be burdened with the obligation of enforcement.  This function is recognized in the statement of purpose for the Fair Credit Reporting Act which states “The banking system is dependent upon fair and accurate credit reporting.  Inaccurate credit reports directly impair the efficiency of the banking system…” and “[t]here is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.”  By providing a nominal statutory damage, right to recover costs and attorney fees, Congress incentivized every day American consumers to be watchdogs, to report and act upon their rights while having the natural effect of preventing injuries to other consumers and the public at large.

Demonstrating the consequences at risk in this case, there have been forty three amicus curiae briefs (friend of the court) filed by companies and organizations that are not parties to the case but are attempting to sway the Court.  The overwhelming majority of the non-party briefs are submitted on behalf of corporations, and do not represent the consumer interest or good of the public.  The Association of Credit and Collection Professionals argues in its brief for the Court to expand its ruling beyond the Fair Credit Reporting Act, stressing “this case’s implications go beyond the statute at issue and affect the credit-and-collection industry at every level.”  The stakes are high.  If the right to sue a company that violates federal law in the course of publishing or reporting credit information and recover a statutory damage for doing so is eliminated, the public will suffer.  Enforcement obligations will be entirely on the shoulders of the Federal Government which does not have the man power, budget, or time to prevent individual violations that occur on a daily basis.  Congress has empowered you and I, the consumer to play a vital role in maintaining a self-regulating free market banking and credit system.  We know what happens when enforcement powers are relegated only to the Federal Government because we experienced it in 2008.  With repercussions this significant, history will relegate Spokeo, Inc. v. Robins among the most important Supreme Court cases over the coming decades.

Supreme Court Watch: Consumer Rights Under Attack

October 26th, 2015 by

Supreme Court Watch: Consumer Rights Under Attack

 by Adam Deutsch Esq

  The Supreme Court will hear oral argument in Spokeo, Inc. v. Robins in which a corporation is asking the Court to find unconstitutional, the awarding of a statutory fine when the consumer plaintiff does not also prove actual damages resulting from the wrongful conduct on November 2, 2015.

The case has the potential to restrict the operation of free markets and roll back the progress of civil rights which should cause us all to have great concern.

The United States Supreme Court is back in session with the majority of media coverage and debate being focused on cases addressing affirmative action in college admissionsunion rightsabortion, and the manner in which populations are counted in drawing voting districts.  While it may lack obvious sex appeal, there is one case that has the potential to affect the rights of the 280 million Americans who have credit history by neutering the consumer protection statutes that allow consumers to recover a nominal statutory fine when laws such as the Fair Credit Reporting Act, Fair Debt Collection Practices Act, Real Estate Settlement Procedures Act and Truth in Lending Act are violated.  Each of these statutes play a vital role in self-regulation of our financial markets.  On November 2, 2015 the Supreme Court will hearoral argument in Spokeo, Inc. v. Robins in which a corporation is asking the Court to find unconstitutional, the awarding of a statutory fine when the consumer plaintiff does not also prove actual damages resulting from the wrongful conduct.  The case has the potential to restrict the operation of free markets and roll back the progress of civil rights which should cause us all to have great concern.

At the heart of Spokeo is a concept of constitutional law known as “standing,” which requires a litigant to show (1) a concrete injury (2) caused by the defendant and (3) for which some remedy can be provided by the Court.  Standing is not a test of a case’s merits, but requirement to obtain access to the Court.  Spokeo challenges whether a concrete injury can be a statutory damage established by Congress, where the Plaintiff did not suffer any actual damages resulting from the offending conduct.  Specifically, Robins sued under the Fair Credit Reporting Act and sought to recover a statutory damage ranging from $100-1,000 that Congress enacted to be imposed against any entity whose conduct willfully violated the statute.  Robins alleged that false information regarding his finances and employment history were published in violation of the Fair Credit Reporting Act, however Robins did not allege that he suffered actual damages resulting from the publication.  By suing, Robins provided a vital function to make sure the same conduct is not repeated causing actual damage to you or me.  The key question is whether a statutory damage enacted by Congress can be used to establish a concrete injury and satisfy the constitutional requirement of standing.  Although this may seem hyper technical, the significance cannot be overstated.

Since the 1970’s, as part of the final chapter in civil rights legislation, Congress has enacted a series of consumer protection statutes that provide individual consumers with a private right of action to protect themselves from overzealous greedy companies.  These statutes also provide enforcement mechanisms by governmental agencies such as the Federal Trade Commission and Consumer Financial Protection Bureau.  The private right of action component is the ultimate free market self-regulation mechanism because it empowers consumers to be industry watchdogs, incentivizes companies to adhere to the law, and prevents the Federal Government from having to grow and be burdened with the obligation of enforcement.  This function is recognized in the statement of purpose for the Fair Credit Reporting Act which states “The banking system is dependent upon fair and accurate credit reporting.  Inaccurate credit reports directly impair the efficiency of the banking system…” and “[t]here is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.”  By providing a nominal statutory damage, right to recover costs and attorney fees, Congress incentivized every day American consumers to be watchdogs, to report and act upon their rights while having the natural effect of preventing injuries to other consumers and the public at large.

Demonstrating the consequences at risk in this case, there have been forty three amicus curiae briefs (friend of the court) filed by companies and organizations that are not parties to the case but are attempting to sway the Court.  The overwhelming majority of the non-party briefs are submitted on behalf of corporations, and do not represent the consumer interest or good of the public.  The Association of Credit and Collection Professionals argues in its brief for the Court to expand its ruling beyond the Fair Credit Reporting Act, stressing “this case’s implications go beyond the statute at issue and affect the credit-and-collection industry at every level.”  The stakes are high.  If the right to sue a company that violates federal law in the course of publishing or reporting credit information and recover a statutory damage for doing so is eliminated, the public will suffer.  Enforcement obligations will be entirely on the shoulders of the Federal Government which does not have the man power, budget, or time to prevent individual violations that occur on a daily basis.  Congress has empowered you and I, the consumer to play a vital role in maintaining a self-regulating free market banking and credit system.  We know what happens when enforcement powers are relegated only to the Federal Government because we experienced it in 2008.  With repercussions this significant, history will relegate Spokeo, Inc. v. Robins among the most important Supreme Court cases over the coming decades.

Fraudulent Banking Practices, Poor Loan Servicing Behind NJ High Foreclosure Rate

October 21st, 2015 by

Joshua Denbeaux, Esq.

If the bank could get everything they wanted you’d be out of your house by now. They have to lie to you encourage you not to contest the foreclosure. They say that the foreclosure is not yet scheduled to make you think it is right around the corner, when it is down the road. Don’t listen to the banks who are misrepresenting facts to their own benefit.

Adam Deutsch, Esq.

Clients believe they have resolved their foreclosure issues by agreeing to a loan modification, only to discover that after a few months their servicer has breached the agreement. Some servicers stop accepting loan modification payments; others manipulate the rate payments so that the homeowners are paying more than agreed upon.

Poor Loan Servicing Reason for NJ Leading Nation in Foreclosures

October 20th, 2015 by

NJ Leads Nation in Foreclosures Due to Poor Loan Servicing

NJ law firm Denbeaux & Denbeaux says continued mortgage-servicing problems, such as breached loan modification agreements, play a major role in why the state leads the nation in foreclosures, and is the cause for the recent RealtyTrac report which revealed that NJ has highest foreclosure rate in the U.S.

New Jersey consumer rights and foreclosure defense lawyer, Adam Deutsch, Esq., of the law firm Denbeaux and Denbeaux has noticed a significant increase in the number of homeowners pushed into foreclosure and collections due to the conduct of the mortgage servicer rather than the borrower’s ability to pay.

A recent report by RealtyTrac reveals that as of the third quarter of 2015, New Jersey has again claimed the highest foreclosure rate in the United States. The report also states that foreclosure activity in New Jersey has increased 27% from this time last year. Among those not surprised by the RealtyTrac findings is Denbeaux & Denbeaux Senior Associate Attorney Adam Deutsch.

UPDATE 10/18/16 : As of September 2016 , foreclosure rate for New Jersey was the highest in the country with 1 in every 544 homes

“I have noticed a large increase in the number of homeowners with loan modification problems,” said Deutsch. “Clients believe they have resolved their foreclosure issues by agreeing to a loan modification, only to discover that after a few months their servicer has breached the agreement. Some servicers stop accepting loan modification payments; others manipulate the rate payments so that the homeowners are paying more than agreed upon. A third pattern is that servicing of the loan is transferred and the new company refuses to honor the agreement.”

Deutsch surmises that the 27% jump in NJ foreclosures since this time last year may also have something to do with the recent increase in mergers in the mortgage servicing industry. The changing business models brought on by the mergers could be forcing homeowners into foreclosures that did not exist previously. Regardless of the issue, Deutsch instructs homeowners to seek legal counsel sooner than later.

“Time is on the side of the homeowners, but only if they take action. In the past, I saw many borrowers talking to their loan servicer and passively trusting that wrongful conduct would be corrected. They would only come to us after years of being misled. Amendments to federal laws that became effective in early 2014 have resulted in new opportunities to obtain meaningful relief for borrowers who have been lied to, injured, or otherwise harmed in the loan servicing and collection process. Unfortunately, the banking industry continues to abuse borrowers, and borrowers have not been made aware that they can sue the bank to enforce their rights.. These federal laws can have major impacts on a homeowner’s case, from issues relating to loan origination, misapplication of interest rates and escrow charges in loan servicing, and improper debt collection efforts. Relief has to be sought quickly, with some statutes having time limits as short as one year. This is why it is so important to keep good records and speak to a knowledgeable attorney as soon as the borrower thinks there is a problem.” Deutsch concluded.

The law firm of Denbeaux and Denbeaux is located at 366 Kinderkamack Road Westwood New Jersey 07675. Tel: 201-664-8855 or email pr(at)denbeauxlaw(dot)com.

Denbeaux and Denbeaux is a family operated law firm with a tradition of excellence in consumer rights and family law. Formed in 1989, Denbeaux & Denbeaux is a law firm dedicated to providing top level legal representation to its clients. Their work has been featured in major media sources throughout the country including CNN, MSNBC, NPR, C-SPAN, CBS Evening News, the Associated Press, The Star Ledger, and The Record.

The partners, Marcia Denbeaux and Joshua Denbeaux, represent individuals and businesses in New Jersey State and Federal Trial and Appellate Courts. The firm primarily practices civil litigation, with a concentration in , consumer fraud, commercial litigation, matrimonial law, business, insurance coverage litigation, and mortgage foreclosure defense.

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N.J. foreclosure rate is highest in U.S., report shows

October 16th, 2015 by

N.J. foreclosure rate is highest in U.S., report shows

New Jersey’s foreclosure rate was the highest in the nation in the third quarter of 2015, edging out Florida for the top spot, according to a new report released on Thursday.

By Erin O’Neill | NJ Advance Media for NJ.com

New Jersey’s foreclosure rate was the highest in the nation in the third quarter of 2015, edging out Florida for the top spot, according to a new report released on Thursday.

One in every 171 housing units had a foreclosure filing in New Jersey in the third quarter of this year, the report from the Irvine, Calif.-based housing firm RealtyTrac shows. That’s more than double the national average.

In New Jersey, foreclosure activity increased 27 percent in the last three months compared to the same quarter last year. The number of foreclosure starts in the state dropped from a year ago but scheduled foreclosure auctions and bank repossessions jumped in the state.

Foreclosure activity nationwide was up 3 percent from the same quarter last year and the country experienced the largest year-over-year increase in bank repossessions since RealtyTrac started tracking quarterly data in the beginning of 2008.

Daren Blomquist, vice president at RealtyTrac, attributed the rise in foreclosure activity to “two starkly different trends taking place.”

“In states such as New Jersey, Massachusetts, and New York, a flood of deferred distress from the last housing crisis is finally spilling over the legislative and legal dams that have held back some foreclosure activity for years,” Blomquist said in a statement. “That deferred distress often represents properties with deferred maintenance that will sell at more deeply discounted prices, creating a drag on overall home values.”

But Blomquist said increases in other states, like Texas, Michigan and Washington, are a sign of a foreclosure market that “has settled into a normalized pattern close to or even below pre-crisis levels” and that additional activity should not have a significant impact on home values.

New Jersey, which has a judicial foreclosure process, has consistently ranked near or at the top of recent rankings based on foreclosures rates and distressed mortgages.

The state also has the highest number of vacant homes in the foreclosure process, according to RealtyTrac, a problem that has led Gloucester and Atlantic counties to pursue registration programs for abandoned properties.

Erin O’Neill may be reached at [email protected]. Follow her on Twitter @LedgerErin. Find NJ.com on Facebook.foreclosureforeclosure

Denbeaux and Denbeaux Says Passage of H.R. 3192 Puts Foreclosure Victims Rights at Risk

October 14th, 2015 by

Denbeaux and Denbeaux Says Passage of H.R. 3192 Puts Foreclosure Victims Rights at Risk

According to New Jersey law firm Denbeaux and Denbeaux, Congress buckling to pressure from industry lobbyists when recently passing H.R. 3192 the “Homebuyers Assistance Act” to give lenders immunity from loan origination abuses for several months, signals consumer’s rights at risk in the future.

On Oct. 7, the House of Representatives passed bipartisan bill H.R.3192 which could provide the mortgage origination industry with a four-month window (through Feb 1, 2016) in which it will be immune from liability in civil actions by aggrieved consumers and regulatory actions by governmental agencies including the Consumer Finance Protection Bureau for failures to comply with new standards governing the disclosure of accurate information to consumers in the mortgage origination process.

“Consumer victims of lending abuses have failed to assert their rights in large numbers under the new statutes enacted in connection with the Dodd Frank Wall Street and Mortgage Reform Act. Now those rights are at risk, ” says NJ foreclosure defense attorney, Adam Deutsch Esq.

This is especially the case in New Jersey where only a small number of foreclosure cases are contested. “Nearly 95 percent of those cases are uncontested, despite evidence in the flaws in the foreclosure process,” said New Jersey Chief Justice Stuart Rabner in the February 4th, 2015 story in NJ Spotlight, “New Foreclosure Procedures Put to Test as Number of Cases Climbs in New Jersey.”

“Buckling to pressure from industry lobbyists, Congress recently voted to give lenders immunity from loan origination abuses for several months. Industry efforts to roll back consumer rights and the enforcement powers of the CFPB demonstrate just how potent the protection statutes are and emphasize that if consumers don’t use it, they may lose it,” Mr. Deutch continued.

“Homeowners may not be contesting their foreclosure for a number of reasons,” said Denbeaux & Denbeaux Senior Associate Attorney Adam Deutsch. “Fear is certainly at the top of the list, as is how overwhelming and confusing the entire situation can be. Homeowner trust in their loan servicing companies is another cause. Homeowners report that they continue to work with their loan servicing company in the belief that their loan will be modified and their home saved without the foreclosure being completed. By the time the homeowner finds out the loan servicer will not modify their home, the foreclosure is complete and the homeowner has effectively waived their right to contest the judicial process. The earlier into the process a homeowner knows their rights and the loan servicers and lenders obligations under the law, the better the outcomes,” Mr. Deutsch went on to say.

“Time is on the side of the homeowners, but only if they take action. There are numerous situations in which a homeowner has rights that a lender, bank or loan servicing company must follow. However, there is a much larger issue at stake which the lender, the homeowner, and the loan servicing company are often unaware of involving consumer protection laws enacted by Congress. These federal laws can have major impacts on a homeowner’s case, from issues relating to loan origination, misapplication of interest rates and escrow charges in loan servicing, and improper debt collection efforts. This is why it is so important to keep good records and speak to a knowledgeable attorney who can see the violations in the paperwork,” Mr. Deutsch concluded.

Briefly, these are six of the most obvious situations that homeowners may find themselves in where their rights have been violated and are in need of an attorney’s understanding of federal and NJ state laws.

  • Payments are not being accepted by a loan servicing company
  • Payments are not being recorded correctly by a servicing company or lender
  • Homeowner instructed to go into default in order to get a refinance.
  • Denial of a loan modification without proper explanation
  • Inaccurate charges of interest, penalties, and escrow fees
  • The bank falsely repeats claims that the homeowner has not provided all documents requested as part of the loan modification application process.

Request a download the whitepaper provided by the law firm of Denbeaux and Denbeaux,“The Six Warning Signs of a Possible Consumer Protection Law Violation”, for greater insight on how consumer protection laws enacted by Congress can help you.

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The law firm of Denbeaux and Denbeaux is located at 366 Kinderkamack Road Westwood New Jersey 07675. Tel: 201-664-8855 or email pr(at)denbeauxlaw(dot)com.

Denbeaux and Denbeaux is a family operated law firm with a tradition of excellence in consumer rights and family law. Formed in 1989, Denbeaux & Denbeaux is a law firm dedicated to providing top level legal representation to its clients. The partners, Marcia Denbeaux and Joshua Denbeaux, represent individuals and businesses in New Jersey State and Federal Trial and Appellate Courts.The firm primarily practices civil litigation, with a concentration in mortgage foreclosure,consumer fraud, commercial litigation, matrimonial law, business, insurance coverage litigation.

Their work has been featured in major media sources throughout the country including CNN, MSNBC, NPR, C-SPAN, CBS Evening News, the Associated Press, The Star Ledger, and The Record.

House delays consumer mortgage protections

October 12th, 2015 by

House delays consumer mortgage protection

On Oct. 7, the House of Representatives passed bipartisan bill 3192 which could provide the mortgage origination industry with a four-month window (through Feb 1, 2016) in which it will be immune from liability in civil actions by aggrieved consumers and regulatory actions by governmental agencies including the Consumer Finance Protection Bureau for failures to comply with new standards governing the disclosure of accurate information to consumers in the mortgage origination process.

By including a four-month grace period in the Homebuyers Assistance Act, Congress is providing a window of opportunity for mortgage originators to make inaccurate disclosures of loan terms, use bait and switch tactics and other wrongful conduct that caused the economy to grind to a halt in 2008.  This time there is one major difference.  Today, consumers have meaningful federal statutes enacted as part of the Dodd Frank Wall Street Reform and Consumer Protection Act that provide consumer relief and serve as a deterrent to would be wrongdoers.  Now, Congress has voted to allow the bankers to act with complete immunity from the consumer protection statutes it enacted only a few short years ago.

The new mortgage origination disclosures commonly referred to as TRID are intended to eliminate confusion in the loan origination process and improve transparency.  House Financial Services Committee Chairman Jeb Hensarling (R-Texas) claims “without this bill, homebuyers could encounter delays and difficulties when they try to close on their homes.”  We are told expediency is trumping the financial future of individual Americans.  Missing from the quotes of politicians is recognition that the industry has known about the new disclosure rules since November 2013 and were originally scheduled to take effect on August 1, 2015.  During the early summer of 2015 the Consumer Financial Protection Bureau published formal guides for the mortgage lending industry to rely upon in preparing for TRID taking effect.  After concern from the industry and members of Congress were brought to the attention of Consumer Financial Protection Bureau Director Richard Cordray in June 2015, Cordray delayed the August 1, 2015 implementation of TRID to the start of October, 2015.  Accordingly, the industry has already had years of preparation and extra months added to the date upon which it must increase transparency in the lending process.

We must not allow short memories to place the future of individual Americans, and the financial recovery of the nation at risk.  On Oct. 6, the White House issued a Statement of Administration Policy setting forth the intention of President Obama to veto H.R. 3192 should it be presented to the president for signature.  Knowing the legislation is likely to be blocked is a relief, but a bitter taste lingers that Congress seeks to place the consumer at risk and grant immunity to the mortgage banking industry for it to repeat the ills of loan origination during the 2000s.

Deutsch is senior associate attorney at Denbeaux & Denbeaux.