Foreclosure Defense

Mortgage Fraud

RESPA & TILA Violations?

If you don’t recognize the name of the party suing you in foreclosure, and it’s different from the company that gave you the original loan, you should immediately contact Mr. Adams. Once you have been served with a copy of a foreclosure complaint, you or your lawyer must file a timely written response with the court within twenty (20) days. Otherwise, you risk having a judgment entered against you which could result in the loss of your home at a Sheriff’s Sale. Doing nothing in response to a foreclosure complaint is the absolutely worst thing you can do. If a mortgage foreclosure complaint has been filed against you, contact the Law Office of Joseph M. Adams immediately for assistance. Mr. Adams has been successful in representing homeowners in mortgage foreclosure actions and is very knowledgeable about the various legal defenses available. Foreclosure matters are very time sensitive and immediate action must be taken to preserve your rights and options. The following is a non-exhaustive list of some of the possible objections and defenses to a foreclosure complaint and lawsuit:

Forged documents in the case of ROBO-SIGNING
Failure to comply with the pleading requirements prescribed by the Pennsylvania Rules of Civil Procedure
Failure to properly verify the Complaint
Non-default
Failure to demonstrate that the plaintiff is the real owner of the Promissory Note
Missing or lost Promissory Note
In the case of a transfer of the original loan, failure to negotiate or endorse the Promissory Note pursuant to the requirements of Article 3 of the Uniform Commercial Code
Improper mortgage assignment
Failure to establish chain of title
Inflated amounts claimed due and owing, including excessive servicing and other fees
Improperly executed mortgage documents
Lack of jurisdiction
Lack of standing
Insufficient specificity of Complaint
Lack of capacity to sue
Failure to exercise or exhaust statutory remedies
Failure to join indispensible parties

Depending on your particular case, these or other possible defenses or objections may be applicable to fighting your foreclosure. When you defend a foreclosure lawsuit, it will take the plaintiff much longer to put your home ownership in imminent danger. In fact, depending on the particular facts of your case, foreclosure litigation can take years. This additional time can not only can provide you with “piece of mind”, but can also be valuable whether you wish to:

stay in your home and financially “catch up” on things
try to get a loan modification
take an aggressive approach and try to win the foreclosure case outright
do a “short sale” while eliminating the pressure associated with imminent foreclosure
sell your home while eliminating the pressure to accept a “discounted offer” for a “quick sale” because of the foreclosure threat

In addition to the above, consider whether you may have any affirmative claims against the mortgage company for violations of statutes or regulations designed to offer you consumer protection. Some of these include the Fair Debt Collection Practices Act (“FDCPA”), the Telephone Consumer Protection Act (“TCPA”), the Real Estate Settlement Procedures Act (“RESPA”) and the Truth in Lending Act (“TILA”). (Click on the links to get more information). These statutes and regulations allow you to recover money if they are violated.

Foreclosure Options

If a mortgage foreclosure complaint has been filed against you, here are some options you need to consider. Remember, doing nothing is the worst thing you can do. In addition to some of the options listed below, consider whether you may have any affirmative claims against the mortgage company for violations of statutes or regulations designed to offer you consumer protection. Some of these include the Fair Debt Collection Practices Act (“FDCPA”), the Telephone Consumer Protection Act (“TCPA”), the Real Estate Settlement Procedures Act (“RESPA”) and the Truth in Lending Act (“TILA”). (Click on the links to get more information). These statutes and regulations allow you to recover money if they are violated. Some violations have resulted in significant sums of money being recovered for borrowers.

What can you do about mortgage foreclosure? Here are some options:

Click on an option to read the full description below.

DEFEND

Contrary to popular belief, filing for bankruptcy is not your only option when it comes to looking to the courts for help with mortgage foreclosure. You also have the right to defend against the foreclosure by filing responsive papers with the court. There are a number of legal defenses that may be available to you depending on the facts of your particular case. It is a mistake to automatically assume that everything the mortgage company says about your loan is correct. In fact, depending on your specific situation, state and federal laws may even provide you with a basis to raise certain affirmative claims against the mortgage company for things it may have done wrong in connection with your loan. For example, have they complied with Pennsylvania Act 6 and/or Act 91 Notices as applicable?

When considering the advisability of defending against the mortgage foreclosure, your case must be evaluated on its own individual facts. If you choose to defend, you should know that the court has very strict time frames within which you must act. Therefore, you should seek legal counsel immediately.

CURE

Before your house is sold at a Sheriff’s Sale, you have the option to cure your loan by bringing yourself up-to-date on the amount you owe the mortgage company. Of course, you will need to have sufficient funds in order to do this. If you cure the loan, it will be reinstated and you will have saved your house from foreclosure.

NEGOTIATE

Many mortgage companies may be willing to try to workout a deal with you rather than proceed with foreclosure and have the Sheriff sell your property. This may include agreeing to some type of loan modification or forbearance agreement. In these situations the mortgage company will most likely require you to fill out a detailed financial statement and provide them with tax returns and proof of your current income status. It is important to know that the mortgage company that if you are being considered for a loan modification you SHOULD NOT assume this will stop a pending foreclosure action.

REFINANCE

There may be other companies interested in lending you money so that you can refinance and pay off your current mortgage. Usually, however, you will need to have sufficient equity in your property in order to do this. If you refinance, you will likely have to pay a relatively high interest rate and high up-front fees. With refinancing, it is important that you understand all of the terms and conditions associated with the new loan so that there are no surprises later. Keep in mind that if you do refinance, you are still subject to another foreclosure proceeding if you default on your payment obligations with the new lender.

BANKRUPTCY

Filing for bankruptcy can stop the foreclosure proceedings against you – at least temporarily. Under Chapter 13 of the Bankruptcy Code, you may be eligible to have the Bankruptcy Court approve a plan for you to pay back your creditors, including the mortgage company, over time (typically a 3 to 5 year period). If you comply with the plan and make your payments, you can save your house. However, you must be able to show that you will have enough income to make the plan work. If not, Chapter 13 may not be your best option. If you can’t afford a repayment plan under Chapter 13, then Chapter 7 may be an alternative for you to consider, but you will have to give up your house in that case. Filing for bankruptcy will damage your credit for years.

SHORT SALE

If you have little or no equity in your property, the mortgage company might agree to allow you to sell your house for an amount less than what you owe on it. This is called a “short sale”. If the mortgage company agrees to this, it will usually accept the sales proceeds in full payment of your debt. You would then be relieved from any further obligation to pay back the remaining balance. Also, in some cases, potential buyers might be interested in leasing the house back to you if you do not wish to move. You can then start to rebuild your credit.

REGULAR SALE

You can always simply sell your house outright, pay off the mortgage company and hopefully receive some cash from the sale.

DO NOTHING

Absolutely, the worst thing you can do.

Has Your Mortgage Company Violated Your Rights?

The Consumer Financial Protection Bureau (“CFPB”) enacted regulations (“Regulation X”) designed to provide fairness and transparency in mortgage servicing. Many of these regulations, if violated, are privately enforceable through the Real Estate Settlement Procedures Act (“RESPA”). In the course of my representing clients who have been subjected to CFPB violations, I have been successful recovering damages for these violations. Some typical violations include: failure to make timely payments out of the borrower’s escrow account; failure to a provide the borrower with a transfer of servicing statement and 60-day payment safe harbor; failure to timely and adequately respond to a borrower’s “Notice of Error” or “Request for Information” (otherwise known as “Qualified Written Requests”); failure to respond to a borrower’s request for the identity of the mortgage owner; failure to comply with early intervention requirements when the borrower falls behind on their mortgage payments, failure to comply with “loss mitigation” procedures, including procedures related to a possible “loan modification”; “dual tracking”; and, obtaining and charging the borrower for force-placed insurance on the property without a reasonable basis for doing so.

Clients facing foreclosure may gain significant financial negotiation leverage by bringing a court action to enforce their rights as compared to not bringing such action. Even if you have already lost your home to foreclosure, you may still have an enforceable claim and be entitled to compensation if the mortgage company violated certain regulations when dealing with you.

In addition to Regulation X as enforced through RESPA, other federal statutes such as the Fair Debt Collection Practices Act (“FDCPA”), the Truth in Lending Act (“TILA”) and the Telephone Consumer Protection Act (“TCPA”), if violated, may add further value to a client’s potential claim. Some of these case may even be appropriate to proceed as a class action lawsuit.

The following is a just a partial list of mortgage loan servicing companies which have been sued for consumer violations:

Ally Bank

Aurora Financial Group

Bank of America

Bayview Loan Servicing

Carrington Mortgage Services

CitiMortgage

Greentree Servicing

Nationstar Mortgage

Ocwen Loan Servicing (now PHH)

PennyMac Loan Services

PHH Mortgage Corporation

PNC Mortgage

Saxon Mortgage Services

Select Portfolio Servicing

Seterus

U.S. Bank

Wells Fargo Home Mortgage

With the array of potential legal remedies available, it is possible that, in some cases, homeowners whose rights have been violated can not only save their home, but they can also come out ahead. Also, since the RESPA, TILA and FDCPA have provisions for the payment of attorney’s fees, in many cases a homeowner can have a lawyer pursue their claims without paying anything.

RESPA Violations

Pursuant to the “Real Estate Settlement Procedures Act” (“RESPA”), the Consumer Financial Protection Bureau (“CFPB”) (formed under the authority of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) instituted new regulations which provide borrowers (in most cases, homeowners) with certain rights regarding the servicing of mortgage loans taken out against their homes. If a mortgage loan servicer fails to comply with these regulations, the servicer in certain cases can be liable to the borrower for monetary damages. The servicer can also be responsible for paying the borrower’s attorney’s fees.

Some typical RESPA violations that a borrower may assert against a mortgage loan servicer include:

Failure to make timely payments out of the borrower’s escrow account
Failure to a provide the borrower with a transfer of servicing statement and 60-day payment safe harbor
Failure to timely and adequately respond to a borrower’s “Notice of Error” or “Request for Information” (otherwise known as “Qualified Written Requests”)
Failure to respond to a borrower’s request for the identity of the mortgage owner
Failure to comply with early intervention requirements when the borrower falls behind with their mortgage payments
Failure to comply with “loss mitigation” procedures, including procedures related to a possible “loan modification”
Obtaining and charging the borrower for force-placed insurance on the property without a reasonable basis for doing so

Under RESPA, if a mortgage loan servicer is found to have violated applicable regulations, it can be responsible for paying the borrower money in compensation for actual damages, plus attorney’s fees. As noted above, the CFPB has expanded the rights of borrowers, particularly those facing foreclosure.

TILA Violations

The “Truth in Lending Act”, otherwise known as “TILA” provides a borrower (in most cases, the homeowner) with certain rights regarding their mortgage loan. Some typical TILA violations that a borrower may assert include:

Failure to send interest rate and payment change notices
Failure to promptly credit mortgage payments
Failure to provide a timely payoff statement upon request
Failure to send periodic mortgage statements

Borrowers whose rights have been violated under TILA, may be able to recover actual damages, plus up to twice the finance charge (up to $4,000), plus attorney’s fees.

Quiet Title Actions

An action to quiet title is a legal proceeding instituted for the purpose of resolving claims over title to real estate. Typically, an action to quiet title is brought when there is either a dispute or question as to the legal rights of a party as it pertains to an interest in real estate. When legal title to real property is unclear, there is said to be a “cloud on the title”. This sometimes necessitates a court to make a final determination as to what parties own what interest in the real estate and what parties do not. Thus, a court in making this determination “quiets” all challenges and claims to the title.

There are many reasons why a quiet title action might be filed. Some include extinguishing invalid or outdated mortgages, clearing up various title defects, resolving legitimate ownership disputes, or voiding a fraudulent deed conveyance. From a practical standpoint, if there is a “cloud on the title” and the matter is not resolved through an action to “quiet title”, a prospective buyer of the real estate may not be able to procure title insurance and the property would be very difficult to resell.

If you need assistance with filing or defending an action to “quiet title”, contact the Law Office of Joseph M. Adams at 215-996-9977.

Foreclosure Defense Attorney - Bucks, Chester, Delaware, Montgomery, Philadelphia County