Denbeaux Wins in Supreme Court on Behalf of Homeowner with Loan Modification

August 16th, 2017 by

Homeowners with Loan Modifications No Longer at the Mercy of Banks

NJ Supreme Court unanimously rules a loan modification agreement is a permanent agreement and cannot be unilaterally altered by mortgage lenders

WESTWOOD, NJ (August 15, 2017) – In a major victory for distressed NJ homeowners, the NJ Supreme Court reversed two lower court decisions and ruled that loan modification agreements are binding contracts and must be treated as permanent agreements.

The decision GMAC Mortgage L.L.C. v. Tamilynn Willoughby, Docket No. A-97-15 (2017), enforced the original negotiated settlement agreement and disallowed the changes that the lender unilaterally made to the agreement, which ultimately resulted in the homeowner (Willoughby) losing her home.

Joshua Denbeaux, Esq.

Attorney Joshua Denbeaux (Willoughby’s legal representative) declared, “This case forces courts to honor contracts between banks and homeowners. The potential ramifications of this decision are staggering. When you combine this ruling with past court decisions (such as Gonzalez vs. Wilshire Credit) which ruled that lenders who deceive borrowers during the course of mortgage servicing are committing consumer fraud, it potentially means that every breach of contract by a bank is an act of consumer fraud.” (The penalties for Consumer Fraud are severe, including triple damages, plus costs and attorneys’ fees.)

Denbeaux continued, “So this decision is a huge game-changer, not only in the damages phase, but also in the liability phase. And the recent appellate decision stating that you don’t have to bring these claims to the foreclosure courts but can bring them separately, means that you don’t have to deal with the foreclosure judges. You can go to the law division and have your case decided by a jury.”

According to court documents, a permanent loan modification agreement was reached in May 2010 under the auspices of the Residential Mortgage Foreclosure Mediation Program which the chancery courts failed to recognize. Furthermore, there was nothing in the agreement to suggest that after a period of a year, GMAC could unilaterally demand that Willoughby had to agree to new different terms than were previously set forth in the Settlement Memorandum.

According to the syllabus provided by the Office of the Clerk, “Willoughby satisfied all contingent terms of the May 2010 Agreement, rendering the Agreement permanent and binding. Despite being compelled to engage in subsequent mediations and negotiations in an effort to save her home, Willoughby did not voluntarily abandon the May 2010 Agreement. The chancery court should have granted her pro se motion to enforce the Agreement as a permanent loan modification.”


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.