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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.

Three Sneaky Foreclosure Tricks of Loan Servicers

June 24th, 2017 by

The best time to get a consultation for foreclosure prevention is before you miss a mortgage payment.

Many homeowners have told us that it is matter of pride that they maintain control of the situation. However, while they think that they have the situation under control, the loan servicer can be moving them closer and closer to foreclosure and eviction without them even knowing it.

When the third mortgage payment is missed it will trigger default and begin the foreclosure process.

Here are three ways that homeowners may be mislead :

  1. Told to miss payments. The loan servicer says to miss payments and go into default to a get a modification.
  2. Trial modification gone wrong.The loan servicer loses the application, payments, or breaches the final modification agreement.
  3. Dual tracking the homeowner. Dual tracking is when the loan servicer is simultaneously processing your loan modification and pushing forward the foreclosure process.

Here are the three warning signs that you need to take action by calling a foreclosure defense attorney:

  1. You are falling behind in payments and the loan servicing company is giving you false or misleading information about what you can do to save your home.
  2. You have applied for a loan modification and you are getting foreclosure notices at the same time from the loan servicing company.
  3. Your loan servicer outright lied to you about stopping the foreclosure while your loan modification application was being reviewed.

Always deal from a position of strength, rather than weakness, and make financial decisions based on facts that than emotion.

We have found that every foreclosure case is unique and every family situation is unique. Denbeaux and Denbeaux has handled thousands of foreclosure cases in New Jersey with most of the loan servicers, banks and attorneys who represent them. We know what violations to look for in both state and federal statutes. In your free consultation we will review your documents and tell you what your options are, what strategies can be used and what the consequences and likely outcomes will be. You will feel more in control because you will be dealing from a position of strength with the facts.

July 12th News of the Week HUD Accountability Hearing

July 12th, 2016 by

HUD Accountability Hearing, Full House Financial Services Committee Hearing, Wednesday, July 13, 10 a.m EST

Rep. Jeb Hensarling (R-Texas), Chairman of the House Financial Services Committee, on Thursday  to appear before his Committee to answer questions about the effect of recent changes to HUD’s delinquent loan sales program on taxpayers. The HUD Secretary accepted the invitation and will testify in a committee before the full House Financial Services Committee on Wednesday.

Tuesday, July 12

May 2016 National Foreclosure Report, CoreLogic

Wednesday, July 13

HUD Accountability Hearing, House Financial Services Committee, 10 a.m. EST

Thursday, July 14

JPMorgan Chase Q2 earnings report

Friday, July 15

Q2 earnings reports for Citi, PNC, U.S. Bank, and Wells Fargo

You can stop Citibank from again violating federal law

March 1st, 2016 by

You can stop Citibank from again violating federal law

By Adam Deutsch and Joshua W. Denbeaux as published in The Hill March 1, 2016

On Feb. 23, 2016 the Consumer Financial Protection Bureau announced the latest settlement with one of America’s darling giants of the banking industry. The Feb. 23 settlement with the CFPB is one of many ongoing systematic frauds relating to the loan servicing practices of Citibank and the credit card industry as a whole.  This time the perpetrator of organized financial fraud is the nation’s third largest bank, Citibank, N.A. and the mark was YOU.

Based on the language of the consent order which details Citibank’s wrongful behavior, the bank got off with a handshake and a brotherly pat on the back.  A settlement payment of $53 million is a lot of money to you and me, but it is a meaningless rounding error to Citibank’s bottom line.  This type of penalty is not meaningful because it is certainly less than Citibank earned through its fraudulent behavior.

According to the consent agreement, Citibank intentionally manipulated credit card accounts before selling the debt to third party debt collection companies.  The manipulations included inflation of the APR for 128,809 accounts.  In some instances the APR was overstated by 29 percent.

Then Citibank sold the loans and the borrowers’ names, addresses, social security numbers and other sensitive information to debt collectors AND after selling the credit accounts to third party collectors, to the debt buyers, Citibank continued to collect payments from the debtors and kept the funds for itself despite not owning the debt.  Those payments were not credited to the already falsely inflated credit card accounts and so many borrowers were told to pay twice on illegally inflated credit card bills.

That means that the affected consumers – YOU AND ME – were subjected to multiple collection attempts from different entities for the same debt.  Where consumers made payments to Citibank that were not credited to their accounts, the consumers were subject to unwarranted negative credit reporting by the debt collectors to the credit reporting agencies and were pursued for debt that they had already paid.  This surely impacted people’s ability to buy a car, a home or to co-sign for college loans funding the education of the next generation.

Admitting that it violated federal law, Citibank also acknowledged that it had no policy in place to notify the debtors that collection rights on their credit card account had been transferred to a different company.

Why would it? Way waste the money to make sure that Citibank does not steal from its customers when stealing makes money?

You need to pay attention to this story.  This story is not about CitiBank, or if it is about Citibank, it is only about Citibank because they happened to get caught.  This story is about you, your siblings, your parents, your children.  It is about anyone who has a credit card.

Consumers are often intimidated to fight with a behemoth like Citibank, and give up after losing the war of attrition waiting for assistance on the customer service phone line.  Do not despair.  The laws are already in place for consumers to force Citibank to pay the individuals and families whose lives it has harmed through acts of fraud.

To stop the unsolicited victimization of the public consumer, we must start to exercise our rights provided by Congress through consumer protection laws including the Fair Debt Collection Practices Act, Truth in Lending Act, and Fair Credit Reporting Act.  These statutes and others provide consumers with protective rights to fight wrongful conduct including the acts perpetrated by Citibank.  When successful, the wrongdoer will not only pay you for the wrong done, they will also pay your court fees and attorney fees.  These laws were put into place to encourage YOU AND ME to be public prosecutors of the financial industry.

This not only means that you as a harmed consumer can access free quality legal representation but it also means that you can help make a difference to this fraudulent financial scheme affected thousands and thousands of people.

If each of the consumers injured by the conduct of Citibank filed a separate lawsuit it would have a far greater impact on future conduct of Citibank than the $53 million settlement with the CFPB.  Citibank and its peers assume that they will get away with illegal conduct, because for years they have.  We, the consumer must stop letting the government do the fighting for our rights alone, a call to arms is necessary if future financial crises are to be averted.

Citibank has assets valuing $1.77 trillion and deposits of $883 billion.  If Citibank has treated you unfairly, some of that money rightfully belongs to you.

Deutsch is a senior associate attorney at Denbeaux & Denbeaux in Westwood, NJ, currently concentrating his practice on consumer rights litigation. Denbeaux is a partner at Denbeaux & Denbeaux concentrating his practice on financial consumer rights issues.

CFPB Orders Citibank to Provide Relief to Consumers for Illegal Debt Sales and Collection Practices

February 24th, 2016 by

CFPB Compliance Bulletin Reminds Debt Collectors that In Person Collection Attempts Often Violation of Federal Law

By Adam Deutsch

Director, Richard Cordray

Feb 23, 2016 WASHINGTON, D.C. – The Consumer Financial Protection Bureau today took two separate actions against Citibank for illegal debt sales and debt collection practices. In the first action, the CFPB ordered Citibank to provide nearly $5 million in consumer relief and pay a $3 million penalty for selling credit card debt with inflated interest rates and for failing to forward consumer payments promptly to debt buyers. The second action is against both Citibank and two debt collection law firms it used that falsified court documents filed in debt collection cases in New Jersey state courts. The CFPB ordered Citibank and the law firms to comply with a court order that Citibank refund $11 million to consumers and forgo collecting about $34 million from nearly 7,000 consumers.

“Citibank sent inaccurate information to buyers when it sold off credit card debt and it also used law firms that altered court documents,” said CFPB Director Richard Cordray.

“Today’s action provides redress to consumers who were victimized by slipshod practices as part of our ongoing work to fight abuses in the debt collection market.”

Citibank, N.A., is a national bank with headquarters in New York, N.Y., that issues consumer credit cards. From 2010 to 2013, Citibank sold portfolios of charged-off credit card accounts. It typically provided debt buyers with information about the consumer and the debt, including the supposed annual percentage rate (APR). A “charged-off” account is one the bank deems unlikely to be repaid, but may sell to a debt buyer, usually for a fraction of face value. The debt buyer then can try to collect on those accounts.

Illegal Debt Sales Practices

Citibank broke the law when, from February 2010 until June 2013, it provided inaccurate and inflated APR information for almost 130,000 credit card accounts it sold to debt buyers. These buyers then used the exaggerated APR in debt collection attempts. Citibank also failed to promptly forward to debt buyers approximately 14,000 customer payments totaling almost $1 million. The CFPB found that Citibank violated the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act. Specifically, Citibank:

  • Overstated the annual percentage rate in accounts sold to debt buyers:Between February 2010 and June 2013, Citibank overstated the APR for 128,809 accounts it sold to 16 different debt buyers. For some accounts, Citibank claimed the APR was 29 percent when it was actually 0 percent. Consumers paid about $4.89 million to debt buyers who used an APR inflated by more than 1 percent in collection efforts.
  • Delayed sending consumer payments to debt buyers: From 2010 to 2013, Citibank delayed forwarding to debt buyers nearly 14,000 payments made by consumers, totaling almost $1 million. This delayed the updating of account balances and subjected consumers to collection efforts from debt buyers after they had already, in reality, paid off their account.

Enforcement action

Under the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals engaged in unfair, deceptive, or abusive acts or practices. Under the CFPB’s order addressing illegal debt sales practices, Citibank must:

  • Refund an estimated $4.89 million to roughly 2,100 consumers:Citibank must refund all payments consumers made from Feb. 1, 2010 to Nov. 14, 2013 to debt buyers that referenced an inflated APR provided by Citibank in their collection efforts where the discrepancy was more than 1 percent.
  • Accurately document the debt it sells: Citibank must provide certain account documents when it sells debt, such as the credit agreement and recent account statements.
  • Stop selling debt it cannot verify: Citibank cannot sell debts if it cannot provide documentation, if the consumers notified Citibank of identity theft or unauthorized use, if consumers allege in writing that they do not owe the amount claimed, or if the account is within 150 days of the end of the statute of limitations.
  • Include certain protections in debt sales contracts: Citibank must include provisions in its debt sales contracts prohibiting the debt buyer from reselling the debt.
  • Provide consumers with basic information about the debt: When it sells a debt, Citibank must give consumers information about the debt, such as the name of the original creditor, the credit agreement, and recent account statements.
  • Pay civil money penalties: Citibank must pay a $3 million penalty to the CFPB’s Civil Penalty Fund.

The full text of the CFPB’s consent order on debt sales is found at:http://files.consumerfinance.gov/f/201602_cfpb_consent-order-citibank-na.pdf

Altered Affidavits

Separately, the CFPB is taking action today against Citibank, two of its affiliates – Department Stores National Bank and CitiFinancial Servicing, LLC – and two debt collection law firms for altering affidavits filed in debt collection lawsuits. Citibank retained Faloni & Associates, LLC, of Fairfield, N.J., and Solomon & Solomon, P.C., of Albany, N.Y. to collect credit card debt on its behalf in New Jersey state courts.

Citibank filed sworn statements attesting to the accuracy of the debt allegedly owed. Citibank then provided the affidavits to their attorneys to file with New Jersey courts. The two firms retained by Citibank altered the dates of the affidavits, the amount of the debt allegedly owed, or both, after the affidavits were executed. This violated the Fair Debt Collection Practices Act.

In May 2011, Citibank learned that one of its law firms had altered affidavits and stopped referring new credit card accounts to it. At Citibank’s request, a New Jersey court dismissed actions pending as of Sept. 12, 2011 that Citibank identified as involving altered affidavits or incorrect information.

The CFPB’s order requires Citibank to comply with the New Jersey state court order, in which Citibank had to refund $11 million collected from consumers and stop collection of an additional $34 million in debts, both of which Citibank has done. Solomon & Solomon, P.C., must pay a $65,000 penalty to the Bureau’s Civil Penalty Fund. Faloni & Associates, LLC, must pay $15,000. Consistent with the Bureau’s Responsible Business Conduct bulletin, the CFPB did not impose civil money penalties on Citibank for this violation, especially in light of its efforts to recompense harmed consumers.

The full text of the CFPB’s consent order against Citibank, N.A., Department Stores National Bank, and CitiFinancial Servicing, LLC, related to the altered affidavits matters is available at:http://files.consumerfinance.gov/f/201602_cfpb_consent-order-citibank-na-department-stores-national-bank-and-citifinancial-servicing-llc.pdf

The full text of the CFPB’s consent order against Faloni & Associates relating to the altered affidavits matters is available at:http://files.consumerfinance.gov/f/201602_cfpb_consent-order-faloni-and-associates-llc.pdf

The full text of the CFPB’s consent order against Solomon & Solomon relating to the altered affidavits matters is available at:http://files.consumerfinance.gov/f/201602_cfpb_consent-order-solomon-and-solomon-pc.pdf

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

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.