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Judge’s Ruling an NJ Foreclosure Game Changer

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Judge’s Ruling an NJ Foreclosure Game Changer

April 26th, 2019 by

On the surface, this may not seem like a big deal, but here is why it is important to a homeowner who may be facing or fighting foreclosure.

Here is how it helps the homeowner.

Foreclosures are filed in state court.  In New Jersey, the state courts have become more unfavorable to homeowners since 2012, and they

often rubber stamp bank requests even where the documents are missing.  Courts have made it easier and easier for banks to obtain foreclosure judgments in New Jersey.

Where the State Court allowed the bank to get a judgment including money not owed by the homeowner and the Federal Court ruled that by seeking to collect money not owed the attorneys involved violated Federal Law.  When a bank seeks to collect money it is not owed, a homeowner can sue in Federal Court instead of State Court.  Federal Courts apply the law more accurately than the State Courts.

Homeowners that go on the offensive level the playing field.  A homeowner that shows the bank they are not afraid to fight when their rights are violated, creates leverage.

The number of ways banks and their collection attorneys violate homeowner rights is never-ending and always evolving.  Federal Courts can hear claims where a bank refuses to honor a loan modification, misapplies money paid to the bank, or where the bank breaks into a home.  These are the types of violations that happen on a daily basis across the country.  These are violations of homeowner rights ignored by the State Courts.

Additionally, banks process foreclosure cases as quickly and inexpensively as possible and don’t look into details unless forced to.  Often times they haven’t even looked at the repayment history or loan servicing file before filing a foreclosure.  This increases the chance for an error on by the debt collecting lawyers.  Finding these errors and turning them into leverage for the homeowner is the foundation to creating a smart and effective legal plan for combating foreclosure.

Denbeaux & Denbeaux doesn’t just think about how to defend a foreclosure, they have developed tools to utilize several Federal Laws that allow homeowners to go on the offensive if their rights have been violated by the loan owner, servicer, attorney or their representatives.  The Denbeaux firm uses the Real Estate Settlement Procedures Act to obtain a homeowner’s complete loan servicing file.  This includes loan payment history, letters sent by the loan servicer, loan modification applications, phone call records, and other documents that often demonstrate violations of Federal Law that can be acted upon by the homeowner.

Going on the offensive is the best way a homeowner facing foreclosure can improve their situation.  The banks, loan servicers, and their attorneys take matters seriously when they get sued with legitimate claims.  They pay attention in part because they are under a close watch from the Financial Consumer Protection Bureau (CFPB) which pays attention to how often financial institutions get sued, and the reasons for the lawsuits.  The ruling in Psaros v. Green Tree Servicing demonstrates the difference between operating in State Court and Federal Court and shows that homeowners facing foreclosure have many rights, but only if they are willing to directly stand up for themselves.

Judge’s Ruling a NJ Foreclosure Game Changer

February 16th, 2016 by

Why is this important?
It is the idea that the best defense is to be able to be in control and have an aggressive offensive strategy. This applies to whether you are trying to stop a foreclosure, get a loan modification, or believe that you were subject to fraud.

This is why this ruling is such a game changer for you. It allows you to turn the tables on the banks, loan servicers, and even their attorneys.

A loan servicer trying to foreclose on your home is subject to the same laws as that apply to a debt collector.  A law firm that represents a loan servicer is also subject to the same laws. In a foreclosure action both the loan servicer and the law firm are subject to penalties and enforcement under federal laws as debt collectors and can be sued by a homeowner.

What changed?
In the landmark case [Psaros vs. Gree Tree Servicing ] brought and won this year by Denbeaux and Denbeaux, possible favorable outcomes for foreclosure defense shifted more in favor of the homeowner.

The takeaway for New Jersey homeowners facing foreclosure as explained in the articles “Debt collectors beware: Judge’s Ruling Could Change the Game” by David Porter of the Associate Press, and ‘These Are People’s Lives You’re Playing With’:The Fight to Curb Debt Collector Lies” by Alan Pyke is this: a law firm who represents a bank in a foreclosure case can be held responsible for the mortgage company’s loan servicing errors.

Both the loan servicer and the law firm that represent them can have complaints filed against them and the law firm can be made to testify and provide evidence against their client.

Judge’s Ruling a NJ Foreclosure Game Changer

Joshua Denbeaux, Esq.

On the surface this may not seem like a big deal, but here is why it is important to a homeowner who may be facing or fighting foreclosure.

Here is how it helps the homeowner.

Foreclosures are filed in state court.  In New Jersey, the state courts have become more unfavorable to homeowners since 2012, and they often rubber stamp bank requests even where the documents are missing.  Courts have made it easier and easier for banks to obtain foreclosure judgments in New Jersey.

Psaros v. Green Tree Servicing is a good example, where the State Court allowed the bank to get a judgment including money not owed by the homeowner, the Federal Court ruled that by seeking to collect money not owed the attorneys involved violated Federal Law.  When a bank seeks to collect money it is not owed, a homeowner can sue in Federal Court instead of State Court.  Federal Courts apply the law more accurately than the State Courts.

Homeowners that go on the offensive level the playing field.  A homeowner that shows the bank they are not afraid to fight when their rights are violated, creates leverage.

The number of ways banks and their collection attorneys violate homeowner rights is never-ending and always evolving.  Federal Courts can hear claims where a bank refuses to honor a loan modification, misapplies money paid to the bank, or where the bank breaks into a home.  These are the types of violations that happen on a daily basis across the country.  These are violations of homeowner rights ignored by the State Courts.

Additionally, banks process foreclosure cases as quickly and inexpensively as possible and don’t look into details unless forced to.  Often times they haven’t even looked at the repayment history or loan servicing file before filing a foreclosure.  This increases the chance for an error on by the debt collecting lawyers.  Finding these errors and turning them into leverage for the homeowner is the foundation to creating a smart and effective legal plan for combating foreclosure.

Denbeaux & Denbeaux doesn’t just think about how to defend a foreclosure, they have developed tools to utilize several Federal Laws that allow homeowners to go on the offensive if their rights have been violated by the loan owner, servicer, attorney or their representatives.  The Denbeaux firm uses the Real Estate Settlement Procedures Act to obtain a homeowner’s complete loan servicing file.  This includes loan payment history, letters sent by the loan servicer, loan modification applications, phone call records, and other documents that often demonstrate violations of Federal Law that can be acted upon by the homeowner.

Going on the offensive is the best way a homeowner facing foreclosure can improve their situation.  The banks, loan servicers, and their attorneys take matters seriously when they get sued with legitimate claims.  They pay attention in part because they are under a close watch from the Financial Consumer Protection Bureau (CFPB) which pays attention to how often financial institutions get sued, and the reasons for the lawsuits.  The ruling in Psaros v. Green Tree Servicing demonstrates the difference between operating in State Court and Federal Court and shows that homeowners facing foreclosure have many rights, but only if they are willing to directly stand up for themselves.

$5M Jury Award for One Foreclosure Fraud Makes U.S. Punishment Look Trivial

November 14th, 2015 by

$5M Jury Award for One Foreclosure Fraud Makes U.S. Punishment Look Trivial

Article by David Dayen in theintercept.com 11/13/15 tells of  a couple’s foreclosure fight and award of $5 million in damages.

Article suggests that the Department of Justice let big banks escape from paying $32 trillion and settle for less that a tenth of a penny on the dollar.

By David Dayen

A Texas jury’s recent decision to award over $5 million in damages and fees for the fraudulent foreclosure of a single home suggests that the big banks could have been on the hook for as much as $32 trillion — before the Justice Department and state attorneys general settled for $25 billion, or less than on tenth of a penny on the dollar.

In the trial in Harris County district court, the jury awarded Houston foreclosure victims

Mary Ellen and David Wolf $5.38 million on November 6, on the grounds that Wells Fargo Bank and Carrington Mortgage Services knowingly submitted false documents to kick them out of their home.

The Wolfs had taken out a $400,000 home equity loan from Carrington (then known as New Century), which was immediately sold into a mortgage-backed trust administered by Wells Fargo. The loan was never properly placed into that trust, however, breaking the chain of title and making it impossible for Carrington or Wells Fargo to legally enforce the lien.

They put the Wolfs into foreclosure anyway, relying on a transfer document fabricated (or “robo-signed”) by Tom Croft, a New Century employee. New Century did not own the promissory note or deed of trust and could therefore not legally transfer the lien, and Croft signed off without personal knowledge of the underlying loan.

The jury agreed with the Wolfs that this made the foreclosure invalid, and awarded the family $150,000 in financial injuries, $40,000 for mental anguish, $5 million in punitive damages and $190,000 in attorney’s fees. Wells Fargo can seek a new trial, ask the judge to reduce the damages, or appeal the case, though they haven’t done so yet.

Numerous court depositions released in 2010 revealed that robo-signing of mortgage documents in an attempt to prove ownership of loans and secure foreclosures – in other words, foreclosure fraud — was a widespread industry practice. Two years later, the five leading mortgage servicing companies, including Wells Fargo, paid $5 billion in fines and $20 billion in credits in return for federal and state prosecutors agreeing not to pursue civil charges.

With the jury award in the Wolf family case, we can now assess the true financial exposure on these banks and mortgage companies. There have been roughly 6 million foreclosures since the beginning of the financial crisis in 2008, and virtually all of them were completed with robo-signed, fabricated or fraudulent documents in one form or another. If we apply the $5.38 million jury award to all of those loans, you have a potential cost from the foreclosure fraud scandal of $32.28 trillion.

This obviously represents the extreme edge of the possible financial hit to the industry. A small number of foreclosures may have been completed properly. And while the settlement didn’t preclude individual civil lawsuits most foreclosure victims don’t have the wherewithal or fortitude for a protracted legal fight like the Wolf family did.

It’s law enforcement’s job to step in and protect the rights of vulnerable victims lacking resources. And the contrast between the penalty banks actually paid, and what they could have been put on the hook for, could not be more stark. The $25 billion National Mortgage Settlement – and calling it that is extremely generous, since banks got credit to pay off the penalty through routine activities like bulldozing blighted properties and donating homes to charity – represents roughly 0.08 percent of the total possible exposure.

That barely qualifies as a slap on the wrist for breaking the centuries-old American property rights system, and fraudulently mocking up foreclosure documents to cover it up.

Disclosure: I’ve written a book that will be released next May, Chain of Title, detailing these foreclosure fraud practices and the individuals who exposed them.

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