Archive for the ‘Foreclosure’ Category

Bank of America Settles Racial Discrimination Claim for $335 Million

Wednesday, December 28th, 2011

The U.S. Justice Department announced on December 21, 2011 that Bank of America agreed to a $335 million settlement for racial bias allegations in connection with Countrywide Financial mortgage loans. This is the largest residential fair lending settlement in history, according to the New York Times. Bank of America was under investigation by the Justice Department over allegations of racial bias against African American and Hispanic mortgage lenders by Countrywide Financial between 2004 and 2008, before it was acquired by Bank of America in 2008.

The investigation by the Justice Department revealed that loan officers and brokers from Countrywide charged higher fees and rates to over 200,000 minority borrowers across the country than to white borrowers who posed the same credit risk. According to the New York Times article from December 21, 2011, “Countrywide also steered more than 10,000 minority borrowers into costly subprime mortgages when white borrowers with similar credit profiles received regular loans.”

This settlement is the latest in a series of costly agreements by Bank of America related to improper mortgage lending practices by its predecessor, Countrywide.  In June 2010, the company agreed to pay $108 million to settle charges that Countrywide imposed inflated fees on homeowners struggling to stay in their homes.   Just two months later in August 2010, Bank of America agreed to settle lawsuits by shareholders for their mortgage losses for $600 million.

Additionally, an investigation is currently underway against several mortgage lenders in connection with improper foreclosure practices.  That investigation could spell another costly settlement for Bank of America.

The foreclosure and bankruptcy attorneys at PERENICH The Law Firm have decades of experience representing distressed homeowners and helping them stay in their homes or discharging any deficiency judgment liability to the banks following foreclosure.

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New Program May Compensate Homeowners for Errors in their Foreclosure

Wednesday, December 7th, 2011

On November 1, 2011, the Federal Reserve Board announced that homeowners who believe they were financially harmed during the mortgage foreclosure process by certain banks and other lending institutions in 2009 and 2010 may be entitled an independent review and potential compensation.

This new government initiative to address the ongoing mortgage foreclosure crisis throughout Florida and the country is called “Independent Foreclosure Review.” Similar to an audit, this program offers the opportunity for a review of the homeowner’s mortgage foreclosure case by an independent consultant to determine if errors, misrepresentations, and other deficiencies made by the lender may have caused financial harm to the borrowers. If so, homeowners may be financially compensated.

Some examples of such errors, misrepresentations, and deficiencies are as follows:

• The mortgage balance amount at the time of the foreclosure action was more than was actually owed.
• The homeowner was doing everything the modification agreement required, but the foreclosure sale still occurred.
• The foreclosure action occurred during bankruptcy.
• The homeowner requested a modification, submitted complete documents on time, and was awaiting a decision when the foreclosure sale occurred.
• Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
• The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the servicemember did not waive his/her rights under the Servicemembers Civil Relief Act.

Borrowers are eligible for a review if their primary residence was in the foreclosure process in 2009 or 2010, whether or not the foreclosure was completed.

Additionally, the mortgage loan must be with one of the following 14 participating lenders:

• America’s Servicing Company
• Aurora Loan Services
• Bank of America
• Beneficial
• Chase
• Citibank
• CitiFinancial
• CitiMortgage
• Countrywide
• EMC
• Everbank/Everhome
• GMAC Mortgage
• HFC
• HSBC
• IndyMac Mortgage Services
• Metlife Bank
• National City
• PNC
• Sovereign Bank
• SunTrust Mortgage
• U.S. Bank
• Wachovia
• Washington Mutual
• Wells Fargo

The program also requires mortgage lenders and loan servicers to correct other deficiencies in residential mortgage loan servicing and foreclosure practices going forward. Among others, servicers must specify a single point of contact for certain borrowers who are having difficulty paying their mortgages, ensure that foreclosures are not pursued when a borrower is performing on a loan modification, and establish controls as well as oversight over their third-party vendors.

Participating lenders are currently mailing letters titled “Independent Foreclosure Review” to homeowners who may qualify for a review of their loans, along with an application packet. The application form must be received by April 30, 2012.

To learn more about the program, please visit www.independentforeclosurereview.com or call  888-952-9105, Monday through Friday from 8 a.m. to 10 p.m. (ET), and Saturday from 8 a.m. to 5 p.m. (ET).

For homeowners who do not qualify for an independent foreclosure review under this program, there are still options, including available foreclosure defenses and bankruptcy.  The foreclosure and bankruptcy attorneys at PERENICH The Law Firm have decades of experience representing distressed homeowners and helping them stay in their homes or discharging any deficiency judgment liability to the banks following foreclosure.

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Mortgage Principal Reductions: Rare, But Not Impossible

Tuesday, November 29th, 2011

As a result of the economic downturn and residential mortgage crisis in recent years, Floridians have been hit the hardest. According to the Daily Finance, 24% – nearly a quarter – of all home loans in Florida are delinquent, and 14% are in foreclosure.  After the mortgage lender files a foreclosure lawsuit in Florida state court, the lender is required to pay for and attend a mediation before proceeding with the lawsuit.  The goal of this requirement is to give the homeowner another opportunity to obtain a loan modification from the lender and bring the loan current.

Many homeowners apply for a loan modification or go into a foreclosure mediation expecting that the mortgage lender will adjust the amount of principal remaining on the loan to the home’s current value, given that an overwhelming number of homeowners in Florida and throughout the country are upside down on their mortgages.  For example, if someone purchased a home in 2007 at the height of the housing market for $300,000 and obtained a mortgage for $295,000, she may ask the bank to adjust its principal loan amount to $150,000, which is the home’s current market value.

Unfortunately, while many banks may offer reductions on interest rates and extensions of the loan term to 30 and even 40 years, few banks are willing to reduce principal.  However, there is hope for a relatively small number of homeowners with a Countrywide (now Bank of America) pick-a-pay option or subprime loan.  Florida is one of 14 states that reached a settlement with Bank of America earlier this year for $8.6 billion.  The settlement terms require that qualified homeowners whose loans originated between January 1, 2004 and December 31, 2007 receive a principal reduction of up to 95% of the home’s current value.

For homeowners who do not hold such loans, there are still options, including available foreclosure defenses and bankruptcy.  The foreclosure and bankruptcy attorneys at PERENICH The Law Firm have decades of experience representing distressed homeowners and helping them stay in their homes or discharging any deficiency judgment liability to the banks following foreclosure.

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Deed-Rent Back Scam Adds to Foreclosure Fiasco

Friday, October 7th, 2011

Much has been reported in the past year about questionable tactics by mortgage lenders and their attorneys in their efforts to foreclose on homes throughout Florida and the United States, despite the lenders’ inability to prove they owned the loans or otherwise had legal standing to foreclose.  This, in turn, has made short sales and foreclosure sales more difficult because the prospective buyers are unable to obtain title insurance if there is no clear evidence of ownership by the foreclosing lender.

As if the foreclosure situation in Florida wasn’t already fraught with issues of title and proper ownership, an Osceola County, Florida man has compounded the problem by placing himself on more than 100 deeds to foreclosed properties.  According to an article in today’s St. Petersburg Times, the deeds are improper because the man, named Jacob Dyck, convinced homeowners, who were desperate to remain in their home, to sign a deed to the property over to Dyck in exchange for a $2,500 fee and monthly rent.   The problem is that the deeds were signed after final foreclosure judgment had been entered in favor of the lender banks, meaning the homeowners no longer owned the home and had no right to sign the deed to Dyck.  Thus, Dyck has no claim to the properties, yet the effect of filing the bogus deeds continues to cloud title and hinder prospective buyers’ ability to purchase these properties.

The attorneys at PERENICH The Law Firm have more than 20 years of experience representing homeowners facing foreclosure on their homes, whether by the lender or an HOA.  We work to help homeowners remain in their homes by defending the foreclosure and and participating in mediation with the lender.  Depending on the situation, bankruptcy can also allow homeowners to keep their home and reinstate their mortgage.

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PERENICH Attorneys to Volunteer at St. Pete Foreclosure Forum

Thursday, August 25th, 2011

Attorneys from PERENICH The Law Firm will be among dozens of Tampa Bay area foreclosure and bankruptcy lawyers who will participate in this Saturday’s Residential Mortgage Foreclosure Forum. The Forum, which is sponsored by the City of St. Petersburg, the St. Petersburg Bar Association, and the St. Petersburg Bar Foundation, will be held on Saturday, August 27, 2011 from 9:00 to 3:00 at the Coliseum, 535 4th Avenue North, St. Petersburg, Florida.  This is a free event open to all.

The Forum offers an opportunity for homeowners to meet one to one with attorneys for free on issues such as mortgage loan modification, foreclosure, bankruptcy, and other options.  Debt management specialists, real estate agents, mediators, and community professionals will also be on hand to offer education, information, and resources to the public.

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HOAs & Investors Add Insult to Injury for Hurting Homeowners

Monday, June 27th, 2011

Homeowner associations (HOAs) and unscrupulous real estate investors are riding the wave of misfortune in the distressed housing market–all the way to the bank.  As illustrated in a recent St. Petersburg Times article concerning this latest practice, HOAs are racing to file a foreclosure action against homeowners who are behind on their HOA dues before the bank lender initiates foreclosure on the mortgage.   If the HOA can obtain a final judgment before the bank, it can then sell the property at auction to try to recoup the delinquent fees.

Real estate investors then purchase such homes at public auction, often for pennies on the dollar, and subsequently they rent the homes until the bank catches up and forecloses.  Tenants are seldom notified by these investor-landlords of the impending bank foreclosure, and they are often shocked when they are served with an eviction notice.  Like the homeowners before them, the tenants are then are forced to find a new place to live in a very short time and must scramble to find the money for a new deposit and moving costs.

One HOA foreclosure investor, who was convicted in 1999 and served time in state prison for armed robbery, boasted in the St. Petersburg Times article that he was able to purchase a $700,000 property for merely $7,000.  Another investor featured in the article is also a former inmate; he was indicted for Medicare fraud to the tune of $14 million.

The attorneys at PERENICH The Law Firm have more than 20 years of experience representing homeowners facing foreclosure on their homes, whether by the lender or an HOA.  We work to help homeowners remain in their homes by fighting the foreclosure as well as trying to negotiate a loan modification or short sale.  Depending on the situation, bankruptcy can also allow homeowners to keep their home and reinstate their mortgage.

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Hardest Hit Fund will Help More Floridians Avoid Foreclosure

Thursday, April 7th, 2011

This week, Florida Housing announced the expansion of a federal foreclosure prevention program called the “Hardest Hit Fund” throughout the State of Florida.   On Monday, April 18, 2011, Florida homeowners facing possible mortgage foreclosure will be able to apply online for help under the program.

This foreclosure assistance program offers help in two ways:

  • The Unemployment Mortgage Assistance Program will provide 6 months of mortgage assistance (up to $12,000) to unemployed or underemployed Florida homeowners.  Homeowners will have to pay 25% of their monthly income or at least $70 toward their monthly mortgage payment.
  • Alternatively, the Mortgage Loan Reinstatement Program will pay up to $6,000 to bring a delinquent mortgage current, if the homeowner has returned to work or is recovering from underemployment.

Homeowners may qualify for this program if:

  • they have suffered a financial hardship such as job loss and are currently unemployed or underemployed;
  • their total household income is below 140% of the area median income;
  • they are fewer than 180 days (6 months) delinquent on their mortgage payments;
  • their mortgage payments are more than 31% of their gross monthly income;
  • the property must be their primary residence;
  • they have not had a bankruptcy discharge or dismissal; and
  • they have not been convicted of a mortgage-related felony.

The complete eligibility requirements are available on the Hardest Hit website.

The Hardest Hit Fund program in Florida began as a pilot in Lee County last year.  The federal government provided a total of $1.05 billion to the State of Florida, with the last installment being paid in September, 2010.  The 7-month delay in making the program available to eligible Floridians throughout the state was due in large part to “very strong mixed signals” from Governor Rick Scott’s administration.

Florida Housing hopes the program will help approximately 40,000 struggling homeowners avoid losing their homes in foreclosure.

At PERENICH the law firm, our foreclosure defense attorneys are committed to helping Florida homeowners in distress save their homes or avoid deficiency judgments through loan modifications, short sales, deeds in lieu of foreclosure, and bankruptcy.

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The Consequences of Fast-Tracking Foreclosure Lawsuits

Wednesday, February 9th, 2011

Recent media exposure of fraud and other illegal practices pervading the residential mortgage industry has forced some banks to suspend temporarily their pending foreclosure lawsuits while they try to sort out their paperwork. Unfortunately, the situation is likely to worsen before it improves. The revelations about bank “robo-signers” (people who signed thousands of affidavits without reviewing or having any knowledge about their accuracy), along with foreclosure law firms that forged assignments of promissory notes from one lender to another, are only the tip of the iceberg. It is likely that every step of the process – even before the homeowner signed on the dotted line – is mired with procedural potholes. In their haste to securitize residential mortgage loans and sell them to investors for juicy profits, lenders far and wide routinely ignored fundamental legal procedures, triggering a chain reaction that has transformed the American Dream into a nightmare and has nearly crippled the global economy.

For years, foreclosure defense attorneys such as PERENICH The Law Firm’s Tim Perenich have tried to draw attention to the widespread corruption throughout the mortgage industry, but in many jurisdictions, including Pinellas and Pasco Counties, this did not preclude many judges from granting the lenders’ motions for summary judgment liberally. In fact, in 2010, the Sixth Judicial Circuit used federal stimulus money to hire retired judges to expedite the summary judgment process and set quotas for closing out pending residential foreclosure actions.

While this may be an effective way to clear the backlog of cases created by the throng of foreclosure lawsuits and ease the strain on the judiciary, the banks could have easily prevented this bottleneck by waiting to file suit until their paperwork was in order and until they had complied with all conditions and procedures under federal and Florida law. Moreover, the federal government’s bailout of the banks to the tune of billions of dollars in TARP funds carried its own restrictions, including requiring banks to modify loans for qualified borrowers who had any income under President Obama’s Making Homes Affordable Program (“HAMP”). In most pre-foreclosure modification attempts, however, the banks have ignored or refused to comply with these requirements and have instead proceeded directly to court to file foreclosure actions.

As a result, a rapid ruling in the bank’s favor on summary judgment, despite valid affirmative defenses calling into question the bank’s ownership of the note, lack of assignment prior to the filing of the lawsuit, or failure to file the original note, creates significant issues when the bank attempts to sell the property at auction. If there is any ambiguity as to the bank’s actual ownership of the property, the bank cannot legally convey marketable title. This means that the bank cannot sell the property, and the new prospective buyers cannot obtain title insurance.

Therefore, the fast-track summary judgment process may ultimately be more detrimental than it is helpful. Any procedural defects or oversights at the inception of the foreclosure action – or perhaps even at the closing itself – do not disappear once the bank prevails on summary judgment or at trial. Instead, they impede future prospective buyers from purchasing foreclosed properties, thereby prolonging the stalemate in the current housing crisis.

© PERENICH the law firm 2011.

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Foreclosure Scam Shocks Baltimore

Wednesday, May 19th, 2010

In the late summer of 2008, many working families watched their livelihood disappear and the American dream slip away. The harsh realities of the sub-prime mortgage crisis left countless facing home foreclosure and eviction. Shockingly two veteran Real Estate investors in Baltimore Maryland have sought to make profit from the misery of countless local households.

Prosecutors in Maryland have alleged a conspiracy by real estate investors to rig bids and stifle competition at sales auctions. Two of the chief organizers have supposedly made as much as 10 million dollars from the fees paid by homeowners to avoid foreclosure.

According to the Huffington Post, local Governments in Maryland sell investors the right to collect unpaid taxes and fees, for a couple hundred dollars or less; allowing holders to take the property of those who fail to make payment. Abdicating the power to collect such fees has allowed reward of profit to drive the maintenance of these basic responsibilities. Baltimore County lawyer Harvey M. Nusbaum and investment partner Jack W. Stollof, took advantage of this opportunity to recklessly raise fees and skim excessive (and illegal) earnings off the top of their collections. This “Crime of Greed”, cheated local governments out of revenue and enriched these criminals.

According to the District Court of Baltimore, these men used the court system to threaten home owners with the seizure of their property unless they paid interest, legal fees and other costs which often totaled more than ten times the original debt.

Mr. Nusbaum, a former IRS agent, filed some 6,000 lawsuits over the six-year period to foreclose on the property on which there were outstanding fees, from which he yielded an estimated $6 million in legal costs. In one case, an 80-year-old widow with a $369.86 outstanding water bill sold in the 2005 Baltimore tax sale was billed more than $5,000, according to court records.

Both of these men have pleaded guilty to felony charges. Nusbaum has been sentenced to a year and a day in federal prison and an 800,000 dollar fine. Mr. Stollof awaits sentenced.

Here at Perenich The Law Firm, we understand the difficulties posed by foreclosure and the problems confronting many families during this time of economic stress. The current recession has hit the Tampa Bay area hard and many look for a trustworthy firm to represent their needs in the court of law and we are confident in the ability of our attorneys to provide exactly that.

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