Proof that YOU can AFFORD a Mortgage Exam

Scammers of every stripe seem to crawl the nation looking for gullible home loan borrowers facing foreclosure, in order to sell them a worthless mortgage rescue service for gargantuan fees.

And when those borrowers finally learn about Mortgage Attack, they have the gall to whine that they don’t have the money to pay for the comprehensive mortgage examination they should have bought at the beginning of their trouble.

Why should borrowers invest in a mortgage exam?

Borrowers need the mortgage exam to prove injury and launch a Mortgage Attack against those who hurt them.   Injurious parties can include the lender, servicer, appraiser, mortgage broker, realtor, closer, title company, lawyer, and any others connected to your loan transaction.  Borrowers need the mortgage exam service because they lack the knowledge, experience, and skill to do it themselves.

And they need the exam because Mortgage Attack constitutes the ONLY demonstrably RELIABLE METHOD borrowers can use to collect monetary damages, set-offs from their debt, a loan balance reduction at favorable terms, or even the house free and clear.

You had the money to pay the scammers selling securitization audits, loan audits, and other useless services like the scams in the below press releases.  So DON’T tell me you don’t have the money for a proper mortgage exam that provides you with the proof that will convince a court to order a damages award to you for injuries you suffered.

Otherwise, without the mortgage exam integral to  the Mortgage Attack method, YOU WILL LOSE THE HOUSE, as you should, for breaching your note and failing to challenge the validity of the loan.

Here’s the proof that YOU have the money for the comprehensive mortgage examination that the Mortgage Attack  Maven recommends.  AND, here’s the proof that people like you have the money to pay upward of $10,000 or more to SCAMMERS.

Remember that a DOZEN such scammers get away with their crimes for every scammer the government catches and prosecutes.  And people like you emptied their wallets for them.

So, DON’T TELL me that you can’t afford a mortgage exam.  Go GET the money and order your mortgage examination today.

PROOF 1:  scammer imprisoned for bilking 400 mortgage victims out of $15,000 each.

Department of Justice
U.S. Attorney’s Office
Central District of California

FOR IMMEDIATE RELEASE
Monday, October 5, 2015

Whittier Woman Sentenced to Nearly 6 Years in Prison for Having Duped 400 Victim Homeowners – Many Spanish Speakers – of Nearly $4 Million with False Promises of Eliminating Their Mortgages

LOS ANGELES—A Whittier woman was sentenced today to nearly 6 years in prison for her lead role in a scheme that falsely promised to eliminate mortgage debts for approximately 400 distressed homeowners who each paid a $15,000 fee, totaling nearly $4 million in victim payments. Instead of working on behalf of the homeowners, the woman simply sent worthless “Sovereign Citizen” paperwork to lenders—paperwork that did nothing to affect the mortgage of a single homeowner.

Maria Marcela Gonzalez, 45, was sentenced by Judge Stephen V. Wilson in United States District Court in Los Angeles, for two counts of making a false bankruptcy declaration.  In rejecting her request for a probationary sentence and imposing the 70-month sentence, Judge Wilson said that the defendant’s actions were “callous and in gross disregard of the law.”

Gonzalez, who pled guilty in July of this year, started the Crown Point Education Inc. scheme in early 2010 and operated from offices in Montebello.  She admitted in her plea agreement that she spoke at seminars to recruit distressed homeowners and salespersons in the Crown Point program and ran the day-to-day operations of the scheme. Many of the victims were primarily or exclusively Spanish speakers.

In her plea agreement, Gonzalez admitted that she and others promised distressed homeowners at these seminars that, in exchange for fees that were generally $15,000 per property, Crown Point would eliminate the homeowners’ mortgages within six to eight months through a secret process that involved sending packets of documents to lenders. Even though she told victims that she could eliminate their mortgage woes, Gonzalez admitted in her plea agreement that the process had never been successful. Gonzalez failed to tell distressed homeowners that earlier Crown Point clients had lost their houses to foreclosure and been evicted from their houses.

In the plea agreement, Gonzalez admitted that she worked with co-schemer Jude Lopez, who was also convicted and sentenced to a probationary term, and Ernesto Diaz, who was charged but failed to appear and is currently a fugitive.  Lopez admitted in his plea agreement that he filed bankruptcy documents in the names of Crown Point clients to delay foreclosure and eviction. Diaz admitted in his plea agreement that Crown Point filed many bankruptcy documents without the knowledge of the company’s clients and that signatures of debtors and notaries were forged on many documents filed with the bankruptcy court.

The claims made to distressed homeowners were based on discredited Sovereign Citizen claims that mortgages are invalid because the banks did not actually lend the money used to fund mortgages, and the notes were securitized.

The case against Gonzalez, Diaz, and Lopez was conducted by the Federal Bureau of Investigation.

PROOF 2:  Scammer indicted for bilking 13 mortgage victims out of up to $8000 each for mortgage amelioration service.

PRESS RELEASE

Internal Revenue Service – Criminal Investigation
Cincinnati Field Office
Special Agent in Charge Kathy A. Enstrom

Date: Wednesday, September 30, 2015
Contact: Craig Casserly
IRS – Criminal Investigation
401 N. Front Street
Columbus, Ohio 43215
(614) 744-3130
Craig.casserly@ci.irs.gov
CI Release #: CINFO-2015-35

COLUMBUS BUSINESSMAN INDICTED IN “MORTGAGE AMELIORATION” INVESTMENT FRAUD SCHEME

COLUMBUS, OHIO — A federal grand jury here has indicted Gary Jones, 52, of Columbus, Ohio, charging him with thirteen counts of mail fraud, eight counts of money laundering, and four counts of willfully failing to file a federal income tax return with the Internal Revenue Service (IRS).

Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, announced the indictment returned today.

According to the indictment, between January 2010 and March 2012, Jones was the managing member of 3ARCK Capital Group, LLC, also d/b/a Three Arck Capital Group, LLC (hereinafter “3Arck”). Jones is alleged to have been the sole authorized signatory on several bank accounts for the benefit of 3Arck, which had a banking relationship with Fifth Third Bank, PNC Bank, and J.P. Morgan Chase Bank. In addition, Jones allegedly partnered with an individual in an investment company known as North American Realty Services Corporation, LLC (hereinafter “NARSCOR”).

It has been alleged that between May 2009 and September 2012, Jones, by himself, through his position at 3Arck, and through his partnership with NARSCOR, raised funds under false pretenses through a process called “mortgage amelioration.” Through “mortgage amelioration,” Jones represented that he could eliminate or modify mortgages held by banks, based on theories that the mortgages were invalid or illegal because the banks had no right to foreclose on the loans. Jones represented that, after a long process, the banks would acknowledge that the mortgages and/or foreclosures were not legitimate.

Jones allegedly represented that he could present claims to the banks and the courts on behalf of property owners, and that he could either force the banks to return properties that had already been repossessed through foreclosures, or that he could get restitution for property owners upon whom the foreclosures had occurred. Jones allegedly represented that the property owners could then either have their mortgages completely eliminated, or at the very least, modified with lower payments and a better term. In addition, Jones allegedly represented that those who had already lost their homes would be rewarded with monetary compensation or the return of bank-owned properties.

It has further been alleged that the property owners or investors could place a property into the “mortgage amelioration” program by paying an application fee of between $3,995 and $7,995. The fee was to be held in an escrow account and was represented to be 100% refundable, whether the process was successful or unsuccessful.

Allegedly, Jones represented that the only expenditures out of the escrow account were to be for incidentals necessary for filings with the courts and for the creation of a trust. Even if expenditures were made from funds in the escrow account, the fee was to be returned in full to the investor at the end of the process. Once the trust was created, Jones represented that he would “ameliorate” the mortgages on the properties through communications with the banks and the courts. After the mortgage had been “ameliorated,” the property owner, allegedly, could either buy the property back from the trust or walk away from the property.

It has been alleged that the property owners or investors either mailed or e-mailed their application and other documentation. The application fees were paid by mailing checks or by wire transfer to Jones, 3Arck, Jones’s partner at NARSCOR, or to NARSCOR. Jones represented to victims that he had completed numerous “mortgage amelioration” deals and had a 100% success rate; however, it has been alleged that no mortgages were ever successfully eliminated or reduced through the program. Also, despite representations that the refundable application fees would be kept in escrow accounts, it has been alleged that the money was deposited into bank accounts controlled by Jones and no application fees were ever refunded; rather, Jones used the homeowners’ and investors’ funds for personal use.

It has been alleged that Jones failed to file a federal income tax return with the IRS for the 2009-2012 income tax years, despite earning gross income in the amount of $280,340 in 2009; $1,090,304.54 in 2010; $880,791.12 in 2011; and $146,554.50 in 2012.

Mail fraud carries a maximum penalty of 20 years in prison and a fine of up to $250,000. Money laundering carries a maximum penalty of 10 years in prison and a fine of up to $250,000. Failing to file an income tax return with the IRS carries a maximum penalty of 1 year in prison and a fine of up to $100,000.

“Mr. Jones’s actions not only caused negative ramifications to those financially connected to him, but also the honest taxpayer when he committed significant tax fraud violations as detailed in the indictment,” said Kathy A. Enstrom, Special Agent in Charges, IRS Criminal Investigation, Cincinnati Field Office. “Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money as well as skirt their tax obligations.”

This case is being prosecuted by Assistant United States Attorney Jessica H. Kim and was investigated by special agents of IRS-Criminal Investigation.

An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.

# # #

PROOF 3:  USDC fines and sentences perps for $7 million Loan Mod Scam

Department of Justice
U.S. Attorney’s Office
Central District of California

FOR IMMEDIATE RELEASE
Monday, December 7, 2015

Operator of Inland Empire Loan Modification Scam that Targeted Distressed Homeowners Sentenced to 18 Years in Federal Prison

RIVERSIDE, California – The founder and co-owner of a Rancho Cucamonga business was sentenced today to 18 years in federal prison for orchestrating a scheme that offered bogus loan modification programs to thousands of financially distressed homeowners who lost more than $7 million when they paid for services that were never provided.

Andrea Ramirez, 47, of Rancho Cucamonga, was sentenced today by United States District Judge Virginia A. Phillips, who also ordered the defendant to pay $6,764,743 in restitution.

Ramirez was the organizer of a telemarketing operation known under a series of names – including 21st Century Legal Services, Inc. – that bilked more than 4,000 homeowners across the nation, many of whom lost their homes to foreclosure. Ramirez was sentenced today after pleading guilty to one count of conspiracy to commit mail fraud and wire fraud.

“This fraudulent company purposely targeted homeowners who were extremely vulnerable because they were facing foreclosure,” said United States Attorney Eileen M. Decker. “Ramirez and her co-defendants made false promises to desperate homeowners, often took the last of their money and then abandoned them. Her contempt for her victims will put her in federal prison for nearly two decades.”

Previously in this case, the other co-owner of 21st Century – Christopher Paul George, 45, of Rancho Cucamonga, was sentenced by Judge Phillips to 20 years in federal prison.

A total of 11 defendants linked to 21st Century have been convicted of federal fraud charges as a result of an investigation conducted by the Federal Bureau of Investigation; IRS – Criminal Investigation; the United States Postal Inspection Service; the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and the Federal Housing Finance Agency, Office of Inspector General.

“As the ringleader in a scheme to dupe thousands of distressed homeowners out of their last dollar at the height of the financial crisis, Andrea Ramirez earned the next 18 years in federal prison, which she should use to reflect on her victims,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

During a 15-month period that began in the middle of 2008, Ramirez operated 21st Century, which defrauded financially distressed homeowners by making false promises and guarantees regarding 21stCentury’s ability to negotiate loan modifications for homeowners. Employees of 21st Century made numerous misrepresentations to victims during the course of the scheme, including falsely telling victims that 21st Century was operating a loan modification program sponsored by the United States government. Victims were generally instructed to stop communicating with their mortgage lenders and to cease making their mortgage payments.

21st Century employees contacted distressed homeowners through cold calls, newspaper ads and mailings. The company also controlled websites that advertised loan modification services. Once they contacted the distressed homeowners, 21st Century employees often falsely told clients that the company was operating through a federal government program, that they would be able to obtain new mortgages with specific interest rates and reduced payments, and that attorneys would negotiate loan modifications with their lenders. 21st Century employees regularly instructed financially distressed homeowners to cease making mortgage payments to their lenders and to cut off all contact with their lenders because they were being represented by 21st Century. On some occasions, 21stCentury employees told homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when Ramirez, George and their co-defendants simply were pocketing the homeowners’ money.

After federal authorities executed a search warrant at 21st Century, Ramirez relocated 21st Century’s offices, renamed the company and made it appear it was operating out of Las Vegas, Nevada.

“Fraudulent mortgage fraud schemes affect consumers at the most basic level, jeopardizing their ability to retain ownership of their homes,” said Robert Wemyss, Inspector in Charge of the U.S. Postal Inspection Service – Los Angeles Division. “The U.S. Postal Inspection Service will continue to investigate these crimes to protect consumers and our nation’s mail system from being used for illegal or dangerous purposes.”

Special Agent in Charge Erick Martinez of IRS-Criminal Investigation of the Los Angeles Field Office stated: “Ms. Ramirez took advantage of unsuspecting homeowners hoping to keep a roof over their heads.  Hopefully she will now understand that her irresponsible actions have real consequences.”

In addition to Ramirez and George, nine other defendants have been convicted for their roles in the 21st Century scam. They are:

•           Crystal Taiwana Buck, 40, of Long Beach, who persuaded numerous victims to pay fees to 21stCentury, was sentenced to five years in prison;

•           Albert DiRoberto, 62, of Fullerton, who handled both sales and marketing – which included making a commercial for 21st Century – was sentenced to five years in prison;

•           Yadira Garcia Padilla, 38, of Rancho Cucamonga – who, among other things, posted bogus positive reviews about 21st Century on the Internet – was sentenced to four years in prison;

•           Michael Bruce Bates, of Moreno Valley, was sentenced to one year and one day in prison;

•           Michael Lewis Parker, of Pomona, was sentenced to six years in prison;

•           Catalina Deleon, of Glendora, is scheduled to be sentenced on December 14;

•           Hamid Reza Shalviri, of Montebello, is scheduled to be sentenced on Thursday, December 10;

•           Mindy Sue Holt, of San Bernardino, was sentenced to 18 months in prison; and

•           Iris Melissa Pelayo, of Upland, was sentenced to four years in prison.

15-144
USAO – California, Central
Updated December 7, 2015
# # #

PROOF 4:  Scammers Bilk 54 Mortgage Rescue victims out of $220,000

Department of Justice
U.S. Attorney’s Office
Northern District of Illinois

FOR IMMEDIATE RELEASE
Tuesday, December 17, 2013

Three Defendants Indicted For Allegedly Swindling 54 Victims Of $220,000 In Fees In Mortgage “Rescue” Fraud Scheme

CHICAGO ― Three defendants who operated Washington National Trust, which was not licensed in Illinois as either a trust or a mortgage company, are facing federal fraud charges for allegedly swindling approximately $220,000 from at least 54 homeowners after falsely promising to save their homes from foreclosure and lower their monthly mortgage payments. The alleged mortgage “rescue” fraud scheme primarily preyed upon Hispanic victims in and around Aurora since late 2011.

One defendant, CARLOS RAYAS, 39, of Aurora, whose loan originator license was revoked by state regulators, was arrested today. He pleaded not guilty before U.S. Magistrate Judge Sheila Finnegan and was released on his own recognizance. A status hearing was set for Jan. 10 in U.S. District Court.

Arrest warrants were issued for MELVIN T. BELL, 37, also known as “Alex Crown,” “Minister Bey,” “Sovereign King Bey,” “King Bey,” and “S.K. Bey,” and MONICA HERNANDEZ, 43, Rayas’ cousin and a former licensed real estate broker. Both Bell and Hernandez were last known to reside in Oswego.

Bell and Hernandez were each charged with four counts of mail fraud, and Rayas was charged with two counts of mail fraud, in an indictment that was returned last week by a federal grand jury and unsealed today. The indictment also seeks forfeiture of approximately $220,000.

According to the indictment, the defendants marketed the official-sounding Washington National Trust as a business providing a financial assistance program for homeowners that was operated and controlled by wealthy Native Americans and was exempt from state and federal laws. In exchange for fees ranging between $5,000 and $10,000 per property, the defendants claimed that Washington National Trust would lower the homeowners’ existing mortgage payments by half and defeat any foreclosure. All three defendants knew, however, that Washington National Trust was not licensed to conduct loan originations and modifications in Illinois and could not lower mortgage payments or defeat foreclosure.

Bell, Hernandez, and Rayas allegedly falsely promised that Washington National Trust would pay off and acquire homeowners’ mortgages, and once that happened, the homeowners would owe only half the original mortgage to Washington National Trust, due over five years and free of any interest and property taxes. To effect this so-called “mortgage rescue,” the defendants had homeowners sign documents and deeds purportedly appointing Washington National Trust as trustee and transferring title of their homes to the business, the indictment alleges. As part of the scheme, the defendants recorded fraudulent documents and deeds in Kane, Kendall and other counties to delay foreclosure and to make it appear that their business was the homeowners’ trustee, the charges add.

The indictment also alleges that the defendants falsely promised that the fees paid by homeowners would go toward reducing their principal balance after Washington National Trust acquired the loan from the lender. Instead, Bell and Hernandez used the fees to pay for marketing and operating the business, including making payments to Rayas and others who referred homeowners to them, as well as for various personal expenses, including meals, travel, and merchandise.

All three defendants allegedly concealed from homeowners that the Kane County Circuit Court had issued orders in September and October 2012 barring Washington National Trust from further filing and recording deeds. They also allegedly concealed that the Illinois Department of Financial and Professional Regulation had issued orders in December 2012 and February 2013, first, to Washington National Trust to stop using the word “trust” and, later, to all three defendants to stop engaging in unlawful residential mortgage activity.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Tony Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. The Illinois State Police also participated in the investigation.

The government is being represented by Assistant U.S. Attorney Jessica Romero.

Each count of mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternative fine totaling twice the gross gain or twice the loss, whichever is greater, and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

An indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Indictment

USAO – Illinois, Northern
Updated July 27, 2015
# # #

PROOF 5:  Mortgage Rescue scammers give up $400,000 in compensation for cheating borrowers

A.G. Schneiderman Reaches $400,000 Settlement With Alleged Participants In Mortgage Rescue Scam That Stole Deeds From Long Island Homeowners

Sale-Leaseback Fraud, Perpetrated At Height of Housing Crash on Long Island, Cheated 14 Families Out Of Their Homes’ Deeds and Equity

Settlements Will Return $400,000 To Families Cheated By Scam; Office of the Attorney General Also Working To Return Stolen Deeds To Homeowners

Schneiderman: This Shameful Scam Re-Victimized Families Already Suffering From The Collapse Of The Housing Market

NEW YORK – Attorney General Eric T. Schneiderman today announced that he had reached settlement agreements with a disbarred attorney, an attorney, and a mortgage broker, who along with others allegedly operated a mortgage foreclosure rescue scam on Long Island that robbed 14 Long Island homeowners out of their homes’ deeds and equity. The mortgage foreclosure rescue scam involved multiple alleged partners: Empire Property Solutions and its principals, John Rutigliano and Kenneth Kiefer, located in Medford and Bethpage, NY; Zornberg & Hirsch law firm and its married principals, disbarred attorney Barry Zornberg and Nanci Hirsch, located in Hauppauge, NY; H&Z Abstract, a title company owned by Hirsch, located in Hauppauge, NY; Cory Covert, an attorney licensed to practice in New York, located in Hauppauge, NY; and mortgage broker Leonie Neufville (d/b/a Neufville Mortgage, located in Baldwin, NY).

Under the settlements, Barry Zornberg agreed to pay $340,000; Cory Covert agreed to pay $67,500.00; and Leonie Neufville agreed to pay $10,000.00 and accept a five-year ban on acting as a broker. The Attorney General has received a default judgment against Rutigliano and Kiefer, which will be converted into a money judgment. All of these funds will be used to compensate victims of the “sale-leaseback” fraud, which was perpetrated at the height of the housing crash on Long Island.

“This shameful scam re-victimized families already suffering from the collapse of the housing market,” said Attorney General Schneiderman. “My office has the resources to connect families in danger of foreclosure with qualified housing counselors and lawyers. We’ve already helped more than 50,000 families across the state, but our work will not end until we’ve guaranteed that every family in need can get the help they deserve.”

Under this mortgage rescue scam, Empire Property Solutions advertised in local papers, offering services to help families save their homes from foreclosure by refinancing their mortgages and repairing their credit scores. The company’s principals, Rutigliano and Kiefer, encouraged homeowners to turn over the titles to them through “sale-leaseback” agreements. Homeowners were told they could stay in the properties, pay rent, build up their credit, and then, after a year, that title in the home would revert back to them. But the Attorney General’s investigation found that Rutigliano and Kiefer failed to make good on their promises to use the homeowners’ payments to pay down their mortgages. In the end, the homeowners faced foreclosure and eviction.

The attorneys represented buyers, sellers, and banks at various closings of these sale-leaseback transactions, which took place at the office of Zornberg & Hirsch. But the attorneys allegedly failed to represent the interests of the homeowners, and were instead integral to inducing them to enter into the fraudulent transactions with Empire Property Solutions. As alleged, the scam also relied on the participation of a mortgage broker, Leonie Neufville, who prepared loan applications that were integral to the effort to fraudulently obtain new mortgages.

After filing a civil complaint, Attorney General Schneiderman reached multiple settlements that will return money to the victims of this fraudulent mortgage rescue scheme.

The settlement with Zornberg, Nanci Hirsch, H&Z Abstact, and Zornberg & Hirsch law firm requires Zornberg to pay a total of $340,000. The settlement with the other attorney, Cory Covert, requires him to pay $67,500. The settlement with the mortgage broker, Leonie Neufville, bars her from practicing in the real estate industry for five years and requires her to pay $10,000.

Attorney General Schneiderman has also received a default judgment against Rutigliano and Kiefer, the principals of Empire Principal Solutions. Since Rutigliano has passed away, his estate is in probate, and the Attorney General is working to convert the default judgment against Rutigliano and Kiefer into a money judgment.

The Office of the Attorney General (OAG) is working with several of the victims to return their deeds to their rightful ownership. OAG is also actively helping another family purchase a new home with the restitution they will receive from the settlements.

One of the homeowners who will get her deed back is Rosalie Thomas, a licensed nurse practitioner from Elmont, NY. After receiving a foreclosure notice in 2006, Thomas called Empire Property Solutions for help. Empire Property Solutions claimed Thomas could avoid foreclosure by signing onto their payment plan, but she still received a foreclosure notice a year later after spending tens of thousands of dollars.

“This whole ordeal has been very scary and stressful,” said Rosalie Thomas. “My youngest son was born in the house that Empire Property Solutions tried to take away from me. It’s the only home he’s ever known. I’m looking forward to finally getting the deed back and finally putting this behind me.”

Ronald Lambre and Marie DiManche, Haitian immigrants who live in Medford, NY, are working with OAG to purchase a new home with money from the settlements. After seeing an ad in the newspaper, Ms. Dimanche, a certified nursing assistant, called Empire Property Solutions and set up a payment plan that was initially half of what she and her husband were paying on their mortgage. After a year, Empire Property Solutions tripled the monthly payments and threatened to evict Lambre and DiManche if they did not pay. Their family, which includes six children, left the home and has since moved three times. OAG came across their case after opening an investigation.

“There is no way to describe how you feel when your home is stolen,” said Marie DiManche. “I’m from Haiti, and it was my dream to own a house. How do you tell your kids you can’t get back what you lost? Thanks to these settlements, my family will finally have a chance to start over again.”

The federal government also brought a criminal investigation against the partners of this sale-leaseback fraud. The United States Attorney’s Office (USAO) indicted Rutigliano and Kiefer on charges of conspiracy to commit wire fraud. USAO also indicted Zornberg for lying to federal investigators about his role in the scam.

The indictment has been dismissed against Rutigliano due to his death. Kiefer pleaded guilty and is awaiting sentencing. Zornberg pleaded guilty to perjury as part of a plea deal and has agreed to pay approximately $1.3 million in compensation to the victims of the fraud. Zornberg is awaiting final sentencing in federal criminal court.

This case is being handled by Assistant Attorney General Richard Yorke, Senior Investigator Paul Matthews, and Assistant Attorney General in Charge of the Nassau Regional Office, Valerie Singleton, under the supervision of Executive Deputy Attorney General for Regional Offices, Marty Mack.  The case was previously handled by former Assistant Attorney General Victoria Safran.

In December 2014, Attorney General Schneiderman launched AGScamHelp.com, a web-based app that helps homeowners determine whether a mortgage assistance company has been vetted by a government agency.

OAG launched AGScamHelp.com in direct response to an observed increase in mortgage rescue scams in New York and across the country. According to a December 2014 report by the Center for NYC Neighborhoods and the Lawyers Committee for Civil Rights Under Law, more than 42,000 homeowners have been conned out of $100 million nationwide.

New Yorkers have been hit particularly hard. From March 2010 to September 2014, New York homeowners submitted more than 2,700 foreclosure rescue scam complaints to the Lawyer Committee for Civil Rights, documenting at least $8.25 million in losses. Since AGScamHelp.com launched in December, more than 26,000 New Yorkers have visited the website.

AGScamHelp.com has several informational features:

  • Search Government-Vetted Companies: AGScamHelp.com allows consumers to search the name of an individual or company to determine if that entity is a “government-vetted” agency (that is, either a member of the Attorney General’s HOPP network or a HUD-certified counseling agency). If the company searched is not a government-vetted agency, the consumer will be told to proceed with caution and advised with several tips on how to identify signs of a foreclosure rescue scam.
  • Locate Nearby Counseling Partners: The web-based app also features an interactive map that allows consumers to find the nearest Homeowner Protection Program (HOPP) grantee. The Attorney General has dedicated $100 million to fund HOPP, a network of more than 85 housing counseling and legal services agencies across the state that are dedicated to providing free assistance to New Yorkers.
  • Report Scams: Consumers who have already been contacted by, or are in the process of working with a company suspected of operating a foreclosure rescue scam, will also have the option to file a complaint with the Attorney General’s Office. They will be directed to a separate page where they can complete a complaint form online. All complaints will be directed to the Attorney General’s Bureau of Consumer Frauds and Protection, and will be mediated by the Attorney General’s Office.
  • Get Tips: AGScamHelp.com offers details on how to recognize signs of a foreclosure rescue scam, including samples of scam letters and other materials utilized by fraudsters to target homeowners, and provides information about recent foreclosure scams that have been the subject of enforcement actions brought by the Attorney General’s Office and other law enforcement agencies.

Homeowners at risk of foreclosure should reach out to OAG, which can connect them with a free, qualified housing counseling agency within the Attorney General’s Homeowner Protection Program (HOPP).

# # #

 

CA court affirms $250K for dual tracking in Bergman v JPMCB

 

Read the opinion here (also appended below):

http://www.courts.ca.gov/opinions/nonpub/E060148.PDF

This California 4th District appellate opinion contains a treasure trove of virtual advice for borrowers whom the lender scammed with a fake loan mod while foreclosing on him at the same time (“dual tracking.”

The panel fully supported the opinion of the trial court which awarded Bergman $250,000 in damages plus legal fees.  The court would have awarded him much more had Bergman’s attorney hired Law Partner On Call (http://lawpartneroncall.com) to manage the litigation, write the pleadings, and write the jury instructions.

Bergman got his payday for breach of contract by his creditor, but he made a bunch of mistakes.

For example, he did not include an attorney fees provision in his loan security instrument (that standard form only says the creditor can recover legal fees and costs) in the event the court finds that the creditor or servicer or other agent engaged in wrongdoing that injured the borrower.  The court awarded Bergman fees anyway, but against great opposition by the creditor.  Most borrowers make the same mistake.

And, Bergman failed to add to the security instrument that a special penalty attaches to dual tracking, a scam that virtually every lender has run on desperate borrowers who want a loan mod.

Furthermore, Bergman made the same mistake many do in loan mod negotiations – he failed to record the name and ID# of everyone he talked to at the bank, and he failed to get a signed writing saying he had to miss payments in order to qualify for the loan mod, and that if he missed them, then made proper trial payments, the lender would grant the loan mod.  Everything was oral leading up to the actual mod.  And oral agreements have no more value than the paper on which the parties wrote them.  The lender’s attorney blustered about it, but the court ruled that the parties had indeed make that agreement, then failed to give Bergman a loan mod.  I believe many courts, faced with similar facts, have ruled that no agreement existed.

Bergman’s most monumental mistake:  he failed to hire a competent professional to examine his loan documents for evidence of torts, contract and regulatory breaches, and legal errors.  Had he done that, and lodge those as claims in his complaint, he could have won gargantuan damages award because, almost certainly, fraud underlay his loan.

Bergman while in the right, found uncommon good luck in this litigation.  Many borrowers have lost using his paper-thin arguments.

READ THE OPINION thoroughly, especially if you have a mortgage and consider a loan mod.

But if you really want to win, call me right now at 727 669 5511 and schedule a mortgage examination, whether or not you face foreclosure.  Read all about what wins and what does not win at http://mortgageattack.com.

Mort Gezzam photo
Mort Gezzam

Filed 9/30/15 Bergman v. JP Morgan Chase Bank, N.A. CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT

DIVISION TWO

E060148

(Super.Ct.No. RIC10014015) OPINION

APPEAL from the Superior Court of Riverside County. Ronald L. Taylor, Judge. (Retired judge of the Riverside Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed.

AlvaradoSmith, John M. Sorich, S. Christopher Yoo, Jacob M. Clark; Parker Ibrahim & Berg, John M. Sorich and Mariel Gerlt-Ferraro for Defendant and Appellant.

Burkelegal and Gregory Burke for Plaintiff and Appellant.

I INTRODUCTION

Plaintiff and respondent Jeffrey A. Bergman (Bergman) sued defendant and appellant JPMorgan Chase Bank, N.A. (Chase) on claims involving a residential loan modification. A jury found in favor of Bergman on his causes of action for intentional misrepresentation and breach of the implied covenant of good faith and fair dealing.

Chase appeals from a $250,000 judgment in favor of Bergman, and the posttrial orders denying Chase’s motion for judgment notwithstanding the verdict (JNOV) and granting attorney’s fees to Bergman.

Chase argues the verdict is not supported by substantial evidence because no evidence shows Chase made misrepresentations to Bergman. Additionally, Chase argues the trial court erred in evidentiary rulings and jury instructions. Finally, Chase contends the judgment’s award of damages was duplicative, and the attorney’s fees provision under the subject deed of trust and promissory note did not include recovery of fees.

Bergman has filed a cross-appeal, raising issues of instructional and evidentiary error, and additional claims by Bergman for breach of contract and attorney’s fees.

We presume the judgment is correct if it is supported by substantial evidence. (Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 494; Denham v. Superior

Court (1970) 2 Cal.3d 557, 564; San Diego Metropolitan Transit Development Bd. v. Handlery Hotel, Inc. (1999) 73 Cal.App.4th 517, 528.) To warrant reversal, an error in jury instructions must result in a miscarriage of justice. (Mize-Kurzman v. Marin

Community College Dist. (2010) 202 Cal.App.4th 832, 862; Soule v. General Motors

Corp. (1994) 8 Cal.4th 548, 580.) Evidentiary error must also be “arbitrary, capricious, or patently absurd . . . resulting in a manifest miscarriage of justice.” (Boeken v. Philip Morris, Inc. (2005) 127 Cal.App.4th 1640, 1685.) On a motion for judgment notwithstanding the verdict, an appellate court must decide whether any substantial evidence supports the verdict unless the verdict raises purely legal questions. (Trujilllo v. North County Transit Dist. (1998) 63 Cal.App.4th 280, 284; Wolf v. Walt Disney Pictures

& Television (2008) 162 Cal.App.4th 1107, 1138.) An award of attorney’s fees is

reviewed de novo. (Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1212.) Based on the various appropriate standards of review, we affirm the judgment:

“The ultimate determination is whether a reasonable trier of fact could have found for the respondent based on the whole record.” (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633.)

II

FACTUAL AND PROCEDURAL BACKGROUND

In 2005, Bergman purchased the subject residential real property located at 22330 Foxhall Drive in Corona, making a down payment of $250,000. Bergman proceeded to make improvements to the property costing about $291,000.

In 2007, Bergman refinanced the property with an adjustable rate mortgage of

$937,500, based on a value of $1.25 million. Bergman testified he thought the loan was a conventional loan. Instead, the monthly payments in the fixed amount of $5,273.44 were interest-only for the first 10 years until 2017.

Bergman made the monthly payments from January until October 2008. Chase acquired the beneficial interest in the loan in September 2008. In December 2008, Bergman asked for a loan modification with a lower interest rate. He paid the loan modification fee of $1,582. The bank agreed to reduce the interest rate to 3 percent and the monthly payment to $4,112.74, while increasing the loan balance by an additional

$9,000. In the third year, the monthly payment would increase to $5,417.64, applied to both principal and interest.

When Bergman realized how much the monthly payment would increase in the third year, he immediately contacted Chase about another modification. He testified Chase offered proposed terms for a new loan modification with a 40-year term, a fixed interest rate at 3 percent, and a $3,000 monthly payment. Bergman had the ability to pay

$3,000 a month.

Bergman testified he did not make a payment on the first loan modification in January 2009 or later because the Chase bank staff1 told him that to qualify for another loan modification he would need to be in default. Bergman did not remember making a payment that was reversed and returned in February 2009, for nonsufficient funds, or “NSF.”

A notice of default (NOD) was recorded in April 2009. Although Bergman contacted Chase about the NOD, Bergman did not realize in July 2009 that the

  • Bergman could not name most of the bank staff to whom he Almost none of the correspondence he received from Chase included individual names.

foreclosure was proceeding. A notice of trustee’s sale was mailed to Bergman, posted on the property, and recorded on August 3, 2009.

In the meantime, in August 2009, Bergman consulted with a real estate broker about a short sale. Bergman also finally received information about a HAMP2 loan modification from Chase. Bergman submitted a HAMP hardship affidavit and financial information to Chase on August 20, 2009. Bergman had suffered financial difficulties from a divorce, a downturn in his limousine business, and two surgeries. He stated the property was worth $578,000 and the outstanding loan was $946,000. However, Bergman could not qualify for a HAMP loan because of the limit of $729,750 on loan modifications.

Bergman identified one Chase employee, Hifa Boolori, whose name appears on correspondence dated August 28, 2009, approving a trial plan agreement. A trial plan agreement was not a HAMP loan but a Chase internal loan modification program.

Bergman agreed to the plan and made three trial plan payments of $2,775 in September, October, and November 2009. He provided additional information, anticipating he would receive a second loan modification.

Bergman testified he did not know the foreclosure was proceeding at the same time the second loan modification was being evaluated. He was told the foreclosure

would be “frozen.” In his fifth amended complaint, he alleged he was informed on November 17, 2009, that he had been denied a loan modification and a sale was

  • Home Affordable Modification

scheduled for January 5, 2010. At trial, he testified he did not know the trustee’s sale was scheduled for December 2, 2009, but had been rescheduled for January 15, 2010.

On December 17, 2009, Bergman signed a listing agreement for a short sale. He drafted a letter on December 22, 2009, asking Chase to let him sell the property in a short sale.

On the same date, December 22, 2009, Chase wrote Bergman a letter asking him to provide two recent paystubs to support his loan modification request. After receiving that letter, Bergman called Chase—because he had already been told his loan modification was denied—but Chase told him the loan was still under review. Bergman provided copies of his bank statements for October and November 2009.

On January 12, 2010, Chase again wrote Bergman, stating his loan modification was being reviewed. On February 11, 2010, Bergman wrote Chase, asking to cancel the loan modifications and to proceed with a short sale. Bergman continued to receive conflicting information about his loan from Chase until July 2010.

The property was sold at a trustee’s sale in July 2010 to defendant Mark Mraz, a friend of Bergman’s. One appraised fair market value was $595,000. The unpaid principal balance was $1,022.265.92. Bergman continued to receive notices about loan modification after the sale.

After the property was sold, Bergman was sued for unlawful detainer. Bergman posted a cash bond of $30,000 with money borrowed from his parents. Bergman incurred additional attorney’s fees defending the unlawful detainer action.

The jury completed the special verdict forms on all seven causes of action and punitive damages. The jury awarded Bergman damages of $125,000 on the cause of action for breach of the implied covenant of good faith and fair dealing and $125,000 on the cause of action for intentional misrepresentation.

III

PROPERTY IMPROVEMENTS

At trial Chase objected to Bergman’s testimony about the $291,000 he spent on property improvements on the grounds that information had not been disclosed during discovery. Chase argues the trial court abused its discretion by allowing Bergman to testify. (Evid. Code, § 352.) Chase contends it was prejudiced by “surprise at the trial” because Chase could not adequately challenge Bergman’s testimony regarding the property upgrades. (Chronicle Pub. Co. v. Superior Court (1960) 54 Cal.2d 548, 561.)

Chase’s pretrial motion in limine sought to exclude any documentary evidence and witnesses not previously disclosed. Bergman was not an undisclosed witness and he did not submit documentary evidence about the property upgrades at trial. Furthermore, we have reviewed Chase’s record citations to its discovery requests and those requests do not support Chase’s contention that it “specifically requested all documents in support of Bergman’s claims.” Chase’s requests for admission, form and special interrogatories, and document requests do not ask generally or particularly for any documents in support of Bergman’s claim for damages based on the cost of the property improvements.

Therefore, the predicate for Chase’s argument—that Bergman did not comply with

discovery requests—is not supported by the record. The trial court did not abuse its

discretion in allowing Bergman’s testimony, which did not involve undisclosed documents or witnesses. (Boeken v. Phillip Morris, Inc., supra, 127 Cal.App.4th at p. 1685.)

IV

JURY INSTRUCTION ON CORPORATE FRAUD

The trial court gave the jury a standard instruction based on CACI No. 1900, concerning intentional misrepresentation: “Jeffrey Bergman claims that [Chase] made a false representation that harmed him.” Chase contends the court erred by not giving its proposed Special Instruction No. 11: “To assert a fraud action against a corporation, a plaintiff must also allege [the] names of the person or persons who allegedly made the

fraudulent representation, their authority to speak, to whom they spoke, what they said or

wrote, and when it was said or written.”

The special instruction requested by Chase is based on heightened pleading requirements for corporate fraud, requiring a plaintiff to allege specifically the name of the person who made the alleged misrepresentations, his authority to speak, and what he said or wrote, and when it was said or written. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645; Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153,

157; Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) However, “[l]ess specificity in pleading fraud is required ‘when “it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy . . . .”’ (Committee on Children’s Television, Inc. v. General

Foods Corp. (1983) 35 Cal.3d 197, 217.)” (Cansino, at p. 1469.)

In the present case, Bergman specifically alleged and testified that he knew the name of one Chase employee in particular, Hifa Boloori, who made representations to him, although he spoke to many Chase employees during many phone calls between 2008 and 2010. Additionally, Chase had extensive records of contacts and conversations with Bergman which included information about which Chase employees contacted him, including the period between October 2008 and February 2009. Under the category of “USR,” the Chase delinquency notes identified the Chase employee by his or her initials, allowing Chase to determine who contacted Bergman far more easily than Bergman could do so. Even if Chase’s records do not expressly document an oral promise for a

40-year loan at 3 percent interest with $3,000 monthly payments, the records still include information about the employees who talked to Bergman.

Under these circumstances, it was not error or prejudicial for the trial court to instruct the jury according to the standard jury instruction and not to use Chase’s

proposed special instruction. The instruction to the jury was not required to be as specific as the pleading. Nevertheless, Bergman identified one person by name and Chase had to know its own employees based on its own records. (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.) There was no error causing a miscarriage of justice and no prejudice in refusing Chase’s special instruction. (Mize-Kurzman v. Mann Community College Dist., supra, 202 Cal.App.4th at p. 862, citing Soule v. General Motors Corp., supra, 8 Cal.4th at p. 580.)

V SUBSTANTIAL EVIDENCE

Chase argues there is not substantial evidence to support the jury’s verdict on the causes of action for fraud by intentional misrepresentation and breach of the covenant of good faith and fair dealing. In our review, we are guided by well-established principles: “It is for the trier of fact to determine the weight of the evidence and the credibility of the witnesses and resolve all conflicts. Where disputed facts are presented to and resolved by the trial judge, unless clearly erroneous his findings will not be disturbed by the reviewing court; it is not the province of this court to substitute its judgment for that of                   the trier of fact. On appeal the evidence and all reasonable inferences to be drawn therefrom must be viewed in a light most favorable to the findings and judgment. [Citations.] ‘Such a judgment, when attacked on evidentiary grounds, must be affirmed when there is any evidence, direct or circumstantial, to support the findings of the trial court. Stated negatively, such a judgment cannot be reversed unless there is no evidence, direct or circumstantial, to support the findings. These rules are elementary.’

[Citations.]” (Ach v. Finkelstein (1968) 264 Cal.App.2d 667, 674.)

  1. Intentional Misrepresentation

 Chase contends there is not substantial evidence of the elements of intentional misrepresentation: 1) a false representation of a material fact; 2) knowledge of the falsity; 3) intent to induce another to rely on the misrepresentation; 4) reliance on the misrepresentation; and 5) resulting damage. (Ach v. Finkelstein, supra, 264 Cal.App.2d

at p. 674; Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1111.) Chase argues substantial

evidence does not show that Chase made any misrepresentation to Bergman or that Bergman was induced to default on a loan as a result of a misrepresentation by Chase.

Bergman asserts that Chase was liable for two separate misrepresentations: 1) that, if his loan was in default, he could obtain a loan modification; and 2) if Bergman made three trial plan payments he could obtain a loan modification. The jury found the former was true and the latter was not.

“‘In its broad, general sense the concept of fraud embraces anything which is intended to deceive, including all statements, acts, concealments and omissions involving a breach of legal or equitable duty, trust or confidence which results in injury to one who justifiably relies thereon. . . . There is no absolute or fixed rule for determining what  facts will constitute fraud; whether or not it is found depends upon the particular facts of the case under inquiry. Fraud may be proved by direct evidence or it may be inferred from all of the circumstances in the case. [Citation.] “Actual fraud is always a question of fact.” (Civ. Code, § 1574.)’ [Citations.]” (Ach v. Finkelstein, supra, 264 Cal.App.2d at p. 675.)

Chase’s argument is primarily that Bergman is inconsistent in his testimony about exactly what he was told and when. However, Bergman’s testimony and other evidence certainly supports his contention that Chase informed him that in order to qualify for a second loan modification, he would have to be in default. Based on the evidence, the jury could have reasonably found that, beginning in December 2008 and continuing through 2010, Bergman had many conversations with Chase about modifying his loan.

Although Chase wants to pin Bergman down to precise dates and times, the general tenor

of the evidence was consistent. Because Bergman hoped to obtain a second loan modification, he defaulted on payments under the first modification. His default continued as he waited to complete the second modification, including making the additional three trial payments in late 2009, and investigating a short sale as an alternative if the second loan modification was not completed. We conclude substantial evidence supported the jury verdict that Chase made intentional misrepresentations to Bergman. (Ach v. Finkelstein, supra, 264 Cal.App.2d at pp. 673-676.)

  1. Breach of Covenant of Good Faith and Fair Dealing

 Chase also argues there was not substantial evidence of breach of the covenant of good faith and fair dealing and the special jury verdicts were inconsistent. We disagree.

The court gave the jury the following instructions on breach of contract: 1) Bergman claims that he and Chase “entered into an oral contract for a loan modification  at fixed payments under $3,000.00”; 2) Chase “breached this contract by not providing him a permanent loan modification after he made the three trial plan payments”; and 3) to prove breach of contract, Bergman must prove Chase “failed to do something that the

contract required it to do.” The court gave the jury additional instructions on the breach of the covenant of good faith and fair dealing: 4) Bergman must prove the parties entered into a valid contract; and 5) Chase “interfered with” Bergman’s “right to receive the benefits of the contract.”

The instructions are confusing but the jury apparently reconciled any conflicts by finding that Bergman and Chase had a binding oral contract for a loan modification with

$3,000 payments. However, the jury did not find the oral contract was conditioned on

defendant making three trial plan payments. Therefore, the jury found Chase did not “fail to do something that the oral contract required it to do,” namely provide a loan modification after Bergman made the three payments. Nevertheless, the jury also found Chase interfered with “Bergman’s right to receive benefits of the contract,” i.e. the promise of a loan modification.

In other words, the jury did not find Chase was required to give Bergman a loan modification if he made the three trial plan payments; Chase did not breach the contract for that reason. But Chase did interfere with Bergman’s benefits under the contract by not giving him the promised loan modification. Therefore, as already discussed, sufficient evidence showed that there was a contract for a loan with $3,000 payments and that Chase interfered with the contractual benefit to Bergman.

VI DUPLICATIVE DAMAGES

Bergman testified that his damages included his original down payment of

$250,000 and the property improvements of $291,000. Chase argues the damages award was duplicative and the intent of the jury was not to award $250,000 but to award a total of only $125,000 for both causes of action found in his favor.

The court gave the jury multiple, somewhat contradictory, instructions on damages. Ultimately, the jury awarded damages of $125,000 for breach of the implied covenant and $125,000 for intentional misrepresentation. The trial court entered a judgment of $250,000. The trial court reasoned:

“It’s the Court’s opinion that the jury did intend to award separate damages to the plaintiff for the improvements that the plaintiff testified that he made to his home . . . and the down payment which he made for the home. [¶] So my interpretation of the jury verdict was they intended to award damages for both of those injuries incurred by the plaintiff and not just one sum of the $125,000. So, in other words, I agree . . . as to how the jury reached its verdict on these two separate causes of action, which were based upon different losses incurred by the plaintiff.”

There is no evidence in the record of the “intent” of the jury. Instead, the record shows the jury was given special verdict forms for each of the seven causes of action and the claim for punitive damages. The jury was instructed to award separate damages for each cause of action. It was not instructed to award damages collectively. The amount of damages claimed by Bergman was at least $541,000, the combined amount of his down payment and the property improvements. The jury’s verdict awarding him damages of

$125,000 each on two causes of action is within the realm of damages.

Chase’s argument that the jury meant to award only $125,000 is speculative and the cases relied upon by Chase are distinguishable. Shell v. Schmidt (1954) 126 Cal.App.2d 279, 291, involved a single cause of action, not two causes of action as here. In DuBarry Internat., Inc. v. Southwest Forest Industries, Inc. (1991) 231 Cal.App.3d 552, 564, the court acknowledged a plaintiff could be entitled to recover separate damages on two causes of action: “They do involve, after all, alleged invasions of different rights.” Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1158, held that a party “is

not entitled to more than a single recovery for each distinct item of compensable damage

supported by the evidence.” However, “[i]n contrast where separate items of compensable damage are shown by distinct and independent evidence, the plaintiff is entitled to recover the entire amount of his damages, whether that amount is expressed by the jury in a single verdict or multiple verdicts referring to different claims or legal theories.” (Id. at p. 1159.)

The present case involves two separate causes of action, different theories, and two distinct items of compensable damages. Under these circumstances, no duplicative damages were awarded by the jury.

VII

CHASE’S MOTION FOR JUDGMENT NOTWITHSTANDING THE VERDICT

Chase contends the trial court should have granted its motion for JNOV for two reasons. Chase repeats the argument that Bergman did not identify the employee who made the misrepresentation—an argument we have already rejected.

Second, Chase argues Bergman was not damaged because the proper measure of damages for the wrongful foreclosure of real property is the value of the equity in the property at the time of the foreclosure. (Munger v. Moore (1970) 11 Cal.App.3d 1, 11; Civ. Code, § 3333.) At the time of the foreclosure sale in July 2010, the unpaid principal balance, along with costs, totaled $1,022,256.92, leaving no equity.

Chase’s argument about wrongful foreclosure is not pertinent, however, because the jury rejected the wrongful foreclosure claim and did not award damages on that cause of action. Instead, the jury awarded damages for intentional misrepresentation and

breach of the covenant of good faith and fair dealing. The jury was instructed Bergman

could prove damages for breach of contract based on what would reasonably compensate for the breach. (CACI No. 350.) The jury was also instructed it could award Bergman reasonable compensation for harm. (CACI No. 1923.) The instructions to the jury, as reasonably construed did not prohibit the jury from awarding damages for the original down payment or for the property improvements, even if the losses for those items of damage were not sustained until after Chase committed its breach or made its misrepresentations. The damages awarded were not for wrongful foreclosure and the measure of such damages is not relevant.

VIII ATTORNEY’S FEES

The trial court awarded Bergman attorney’s fees—reduced from $454,772.23 to

$188,100—finding that he could recover fees under both contract and tort based on the attorney’s fees provision in the original note and trust deed under which the foreclosure was conducted. The same result occurred in Smith v. Home Loan Funding, Inc. (2011) 192 Cal.App.4th 1331, 1337-1338. (Civ. Code, § 1717; Code Civ. Proc., § 1021.)

The subject note provides: “. . . the Note Holder will have the right to be paid back by me for all of its costs and expenses in enforcing this Note [including] reasonable attorneys’ fees.” The subject trust deed provides: “Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided . . . including, but not limited to,

reasonable attorneys’ fees . . . .”

The Smith court construed the very same language and found that that “breach of the implied covenant can sometimes support an award of fees under section 1717.”

(Smith v. Home Loan Funding, Inc., supra, 192 Cal.App.4th at p. 1337.) Smith distinguished Sawyer v. Bank of America (1978) 83 Cal.App.3d 135, 140, 145, and held that, where one party had a fiduciary obligation and made an express oral promise, it was justifiable to treat the oral agreement and the loan documents as a single agreement because they were all part of the same transaction. (Smith, at pp. 1337-1338, citing Civ.

Code, § 1642 [“Several contracts relating to the same matters, between the same parties, . . . are to be taken together”].)

The oral contract between Bergen and Chase was part of a single agreement, including the note and deed of trust; the trial court found the oral contract was intended to effect a modification of the original obligation. Therefore, the trial court’s award of attorney’s fees was proper, allowing the prevailing party to recoup attorney’s fees under the intertwined tort and contract claims. (Xuereb v. Marcus & Millichap, Inc. (1992) 3 Cal.App.4th 1338, 1341-1343.)

IX

BERGMAN’S CROSS-APPEAL

  1. Special Verdict on Wrong Foreclosure

 The special verdict on the cause of action for wrongful foreclosure asked: Did Chase “violate any law or regulation governing foreclosure?” Bergman contends the special verdict should have read: Did Chase Bank “cause an illegal, fraudulent or oppressive sale of the real property located at 22330 Foxhall Drive, Corona, CA 92883?” Bergman argues his claim is not for wrongful foreclosure based on a statutory violation

but “Chase’s fraudulent practice of inducing borrowers into default with the promise of a

loan modification.” The basis for this instruction is thus exactly the same as Bergman’s causes of action for intentional misrepresentation and breach of the covenant of good faith and fair dealing, for which he recovered damages. Under these circumstances, there was no miscarriage of justice in refusing Bergman’s alternative instruction. (Mize- Kurzman v. Marin Community College Dist., supra, 202 Cal.App.4th at p. 862, citing Soule v. General Motors Corp., supra, 8 Cal.4th at p. 580.)

  1. Special Verdict on Punitive Damages

 Bergman claims the jury should have been instructed that Chase could be directly liable for fraud and punitive damages. A corporate employer may only be liable for punitive damages as a result of its employees’ acts where it somehow ratified the behavior. (Civ. Code, § 3294, subd. (b); Weeks v. Baker & McKenzie (1978) 63 Cal.App.4th 1128, 1153.) The special verdict on punitive damages was based on CACI No.VF-3904: “Did an agent or employee of [Chase] engage in the conduct of malice, oppression, or fraud against Plaintiff?” The jury was also given an instruction based on CACI No. 3936 about liability for punitive damages for a corporate entity based on the acts of its agents. Chase could not be found directly liable for punitive damages for its own conduct. (Davis v. Kiewit Pacific Co. (2013) 220 Cal.App.4th 358, 365.) The jury was properly instructed on punitive damages.

  1. Motion to Amend

At the end of trial, the court denied Bergman’s request for leave to amend to add a claim for breach of a written contract under HAMP or the Chase trial payment plan. An appeal from a trial court’s decision in granting or denying a request to amend the

pleadings is reviewed for a clear showing of an abuse of discretion. (Garcia v. Roberts (2009) 173 Cal.App.4th 900, 909.) The guiding principles are: “(1) whether facts or  legal theories are being changed and (2) whether the opposing party will be prejudiced by the proposed amendment.” (City of Stanton v. Cox (1989) 207 Cal.App.3d 1557, 1563.)

Throughout the trial, Bergman had relied on a theory of an oral promise, not a written contract. The trial court properly denied Bergman’s oral motion to amend, and subsequent motion for JNOV, because the introduction of new facts and theories would cause prejudice to Chase. There was no reason for Bergman to wait years to amend his claims. We reject Bergman’s contentions on this issue.

  1. Attorney’s Fees

 Bergman argues he should have been allowed to offer evidence of the attorney’s fees he incurred in the unlawful detainer action and he was entitled to recover those fees under the note and trust deed. We conduct a de novo review on whether there is a legal basis for a fee award. (Conservatorship of Whitley, supra, 50 Cal.4th at p. 1212.)

After Chase objected to the submission of evidence on attorney’s fees for the unlawful detainer action, Bergman’s counsel stated he would raise it later. Bergman’s counsel did not raise the issue again. The record shows Bergman waived this issue. (Estate of Odian (2006) 145 Cal.App.4th 152, 168.) Furthermore, Bergman’s claim was for attorney’s fees sustained in a separate unlawful detainer action by Mraz, the third party who purchased the property at trustee’s sale. Bergman cites no authority for the recovery of attorney’s fees under these circumstances. In fact, he concedes there is no

authority but asks this court to resolve the issue in a published opinion. We decline to do so.

X DISPOSITION

We reject both appeals and affirm the judgment. In the interests of justice, we order the parties to bear their own costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

CODRINGTON                     

J.

We concur:

 

RAMIREZ                             

  1. J.

HOLLENHORST                  

J.

Does the Creditor Owe the Borrower a Loan Mod?

Many people have suffered when servicers lied to them about the need to miss payments in order to qualify for a loan modification.  But lenders owe borrowers no duty to give them loan modifications.

Lueras, 221 Cal. App. 4th at 68 (defendants “did not have a common law duty of care to offer, consider, or approve a loan modification, or to offer [plaintiff] alternatives to foreclosure,” nor “a duty of care to handle [plaintiff]’s loan `in such a way to prevent foreclosure and forfeiture of his property;'” however, “a lender does owe a duty to a borrower to not make material misrepresentations about the status of an application for a loan modification.”)

Borrowers should get all loan mod offers in writing, particularly claims that the borrower must miss payments to qualify.

Remember:  An oral agreement isn’t worth the paper it’s written on!

Mort Gezzam photo
Mort Gezzam

How to Get the Benefits of a Securitization Audit FREE

Securitization Audits Decline Dramatically… Find Out Why

Securitization Audits Chart
Why the Shocking Decline in Securitization Audits?

 

How to Get the Benefits of a Securitization Audit FREE

Benefits?  WHAT Benefits? Learn below why the audit is a complete waste of resources.

Copyright © 1 April 2014 by Bob Hurt.  All rights reserved.  http://MortgageAttack.com

TECHNICAL ALERT:  I, the author, am not an attorney or practitioner, and I do not seek in this article to solve any specific problem for any specific person.   I provide this information for academic and discussion purposes.  Consultant a COMPETENT attorney on all questions of law.  To ensure competence, demand and verify a winning record in similar cases before you trust his battle scheme.

Background:  Why I Write this Article

Securitization audits have suffered a SHOCKING decline recently as foreclosure victims learned the hard way that the audits give no value to the foreclosure process, and foreclosure victims cannot use them to avert foreclosure.

Hundreds of people have called me personally or written to me about their mortgage problems since 2009.  I would say thousands, but I have lost count. That year I started giving people FREE information about what works and what does not win mortgage disputes against creditors and their agents and associates.

The majority of those callers had already blown hundreds to thousands of dollars on a “Securitization Audit” or flimsy “Loan Audit” which did not have the worth of the powder to blow them to hell.  Many mortgagors had also blown thousands to pay a foreclosure “pretense defense” attorney for the privilege of dragging out the foreclosure.  Most of those foreclosure victims eventually lost their homes to foreclosure auction.  Many who did loan mods went into foreclosure again and either lost the home or soon will.

Every one of those people bought a service from a clueless “Kool-Aid Drinker” or an out-and-out scammer (charlatan, cheat, con artist).  Even those attorneys who promised “We’ll keep you in the house as long as we can” committed legal malpractice if they failed to examine the mortgage transaction comprehensively for evidence of fraud and other torts, contract breaches, regulation breaches, and legal errors, and as a result failed to lodge the causes of action and affirmative defenses that would have averted foreclosure.

I write this commentary not just to give all those snakes-in-the-grass the literary black eye that they deserve, but also to give the reader something FREE that bozo scammers charge hundreds or thousands for.

I shall tell you, in short order, how to find out who owns your note and why the chain of ownership of the note has no relevance to foreclosure courts.

Securitization audit scammers tell their desperate, clueless foreclosure victim prospects that they will research the “chain of title” and find out who owns the note and what shenanigans happened during transfers of note ownership.   They will suggest that the chain of title to the note really matters in a foreclosure dispute.

In reality, as demonstrated by myriad foreclosure sales, it does not matter at all to the foreclosure judge or trustee.  Those scammers will talk about their certification, credentials, and the crookedness of securitization, putting the note into the trust after the closing date specified in the pooling and servicing agreement (PSA), REMIC violations, Bloomberg terminals for researching Securities and Exchange Commission information, etc.  And they will show you a wad of useless affidavits, and claim to have functioned as expert witnesses.  They will not tell you their affidavits and testimony have no notable effect on foreclosure decisions.

Judges and Lawyers Declare the Securitization Audit CROOKED

I shall prove to you right now that those securitization audit scammers and the charlatan attorneys who con you into paying for such audits are liars and con artists for suggesting such audits have an iota of value.

See, Demilio v. Citizens Home Loans, Inc. (M.D. Ga., 2013) (“Frankly, the Court is astonished by…Plaintiff’s attempt to incorporate such an ‘audit,’ which is more than likely the product of “charlatans who prey upon people in economically dire situation.”)

In other words, after reading this, you show yourself a fool if you ever fall for their suggestions that you need the audit to terminate a foreclosure permanently.

You do not have to take my word for it.  Look at what two attorneys say about securitization audits:

  • “… Most ‘securitization audits’ that I have reviewed are inadmissible in a court of law; they contain a mere opinion of a layman without personal knowledge (direct experience) as to what happened with a particular mortgage note after closing. Why pay a securitization auditor when you can have your grandmother provide an opinion as to what happened with the note and have her sign an ‘audit report’? In reality, in about 95% of all cases, the information supplied by a ‘securitization audit’ is either already publically available, or it is unavailable to either the homeowner or the auditor. Thus, where a homeowner genuinely lacks this information, an outsider’s opinion (in contrast to the bank’s admission) is unlikely to help.”

Gregory Bryl, Foreclosure Defense Attorney, Virginia and Florida.

http://www.veteranstoday.com/2012/03/27/beware-of-the-latest-foreclosure-rescue-scam-securitization-audits/

  • “Mortgage Loan Securitization Audits ARE A CRIME! … THAT INFORMATION IS USELESS IF IT IS NOT ADMISSABLE IN COURT! … So I issue the challenge once again….WILL ANY SO CALLED SECURITIZATION EXPERT PLEASE STAND UP?   PLEASE, SHARE WITH ME ADMISSABLE EVIDENCE OF SUCCESS IN ANY FORECLOSURE OR BANKRUPTCY CASE!” 

Matthew Weidner, Foreclosure Defense Attorney, Florida.

http://mattweidnerlaw.com/mortgage-securitization-audits-they-are-a-crime/

Why A Borrower Defaulting a Valid Loan Cannot Beat Foreclosure

Before I tell you how to get the benefit of a securitization audit FREE, and how to get the name of the note owner, let us examine some essential facts.  To get to those facts, please answer these questions, assuming you have become a mortgagor (borrower):

  1. Did you borrow money to purchase, refinance, or get a line of credit on a home?
  2. Did you sign a note in which you agreed that you had received a loan?
  3. Did you sign a security instrument (Deed of Trust – DOT, or Mortgage) in which you asserted having seisin (possession) and having transferred the estate to the lender for purpose of a mortgage or deed of trust?
  4. Did the lender assign a servicer to service your account (take payments manage, escrow, distribute proceeds, answer your questions regarding servicing the loan)?
  5. Did you make any timely payments to the servicer?

Foreclosure Deals with Breach of Contract

If you answered yes to those questions, then you know you have a contractual relationship with the lender, in which various other entities played a role (realtor, appraiser, mortgage broker, Title Company, attorney, etc.).

Moreover, you know that if either you or the others breach the contract, then that entitles you or the lender to take legal action.  You know that in a judicial foreclosure state the lender may sue you and take the house in a foreclosure sale if you breached the contract.  You know that in non-judicial foreclosure state, the lender may get the trustee to foreclose.

The lender needs to fulfill certain conditions, listed in § 22 of your loan security instrument, prior to such action, such as notify you that you breached the note, accelerate the note to make the balance due and payable now, and then take the matter to the trustee or sue you to get that money or the house.

You Lose the House if You Breached the Note

You SHOULD know that if the lender or his agents or associates engaged in some crooked behavior that invalidated the note or the loan transaction, that will give you reason to sue.

If the lender sues you for a breach and wins, the lender gets your house, or money from its sale, because the lender has a security instrument.

Unlike the lender, you do not have a security instrument that lets you go to the court or trustee to order the lender or his agent or associate to give up his house in some kind of foreclosure sale.  So how do you deal with injuries you suffered in the loan process? And how do you find out who owns the note?

Why Not Ask the Servicer and Complain to the CFPB?

You should know that if you want to learn who owns the note, you do not need a securitization audit because you can just ask the servicer. And that remains true if you want some error in your loan corrected.

You might know, though many do not, that the US Government has established the Consumer Financial Protection Bureau (CFPB) to resolve disputes between borrowers and lenders and their servicers. You can file a complaint at the following web site:

Why You Have No Standing in PSA or Note Assignment Disputes

But wait a minute. Surely you must wonder whether robo-signing, notary falsification of note assignments, assignment to a securitization trust after the closing date specified in the Pooling and Servicing Agreement (PSA), violations of Real Estate Mortgage Investment Conduit (REMIC) rules, and other securitization and assignment issues have any bearing on foreclosure, and whether you can use related arguments to beat foreclosure.  You might actually believe a securitization audit can shine some light on these concerns.

Let us answer another set of questions to get to the truth:

  1. Did you become a party to, become injured by, or become a third party beneficiary of:
    1. The PSA for a trust that owns your note?
    2. Any assignment of your note to another creditor (owner of beneficial interest in the note)?

If you answered NO to both a and b above, then you know that neither the assignment nor the PSA have any effect on you whatsoever.  Surely you know they do not affect whether or not you have breached your note or owe a mortgage loan debt.  So, therefore, you know (do you not?) that you have no standing to dispute or enforce the PSA or any assignment of the note in court.  That means robo-signing of the note (one of those ridiculous things securitization auditors tell you they will find for you) has become irrelevant to you and to any court.

See, Javaheri v. JPMorgan Chase Bank N.A., 2012 WL 3426278 at *6 (C.D. Cal. Aug. 13, 2012). (“Plaintiffs here do not dispute that they defaulted on the loan payments, and the robo-signing allegations are without effect on the validity of the foreclosure process.”)

About Blank Indorsements of the Note

Furthermore, according to the Uniform Commercial Code (UCC), if a creditor indorses the note in blank instead of naming an assignee, the note becomes bearer paper. See, UCC §3-205 https://www.law.cornell.edu/ucc/3/3-205.

  • 3-205. SPECIAL INDORSEMENT; BLANK INDORSEMENT; ANOMALOUS INDORSEMENT.

(a) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument payable, it is a “special indorsement.” When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person. The principles stated in Section 3-110 apply to special indorsements.

(b) If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a “blank indorsement.” When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed.

(c) The holder may convert a blank indorsement that consists only of a signature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.

(d) “Anomalous indorsement” means an indorsement made by a person who is not the holder of the instrument. An anomalous indorsement does not affect the manner in which the instrument may be negotiated.

 

An enormous number of notes bear blank indorsements.  That makes it easy to hand them off without cumbersome paper trails. Thus, whoever holds the note can enforce it, whether or not the holder owns beneficial interest in it. So, try answering this question:

  1. If the most recent indorser of your note indorsed your note in blank, why would you care who owns it?

I suppose you realize that you should not care because the note holder, regardless of identity, will foreclose and take the house if you breach the note.

Who May Enforce the Note, Even if Lost, Stolen, or Destroyed

The UCC defines the “PETE”  – Person Entitled to Enforce the note.  See, UCC §3-301 https://www.law.cornell.edu/ucc/3/3-301.

  • 3-301. PERSON ENTITLED TO ENFORCE INSTRUMENT.

Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

In the event the note becomes lost, destroyed, or stolen, the PETE can enforce the note anyway. See, UCC §3-309 https://www.law.cornell.edu/ucc/3/3-309.

  • 3-309. ENFORCEMENT OF LOST, DESTROYED, OR STOLEN INSTRUMENT.

(a) A person not in possession of an instrument is entitled to enforce the instrument if:

(1) the person seeking to enforce the instrument

(A) was entitled to enforce it the instrument when loss of possession occurred, or

(B) has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred;

(2) the loss of possession was not the result of a transfer by the person or a lawful seizure; and

(3) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

(b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, Section 3-308applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

In view of these laws, the Trustees and Courts do not require the PETE to present the original note in order to foreclose. Some states, like Florida, which require the original and will not admit into evidence a copy of a negotiable instrument, provide a law allowing a creditor to reestablish a lost, stolen, or destroyed instrument, and thereby effectively to create a new, legal “original.” See Florida Statutes, Chapter 71, http://goo.gl/hrB9bY.

So, answer these questions:

  1. Can a creditor foreclose a lost, stolen, or destroyed note on which you defaulted?
  2. Can a PETE who does not have creditor status foreclose a note in default?

I hope you answered YES to those two questions.  If so, you have by now begun to realize that only two questions have salient importance in your mortgage:

  1. Did you breach the note?
  2. Does the note lack validity?

If you answer yes to the first question, then you know that the PETE can enforce the note by foreclosing and forcing a sale of the collateral property – your house.

The ONLY Reliable Basis for Battling the Creditor and Associates

If you answered yes to the second question, then you might have an opportunity to undo the foreclosure and wind up with the house free and clear, or with a loan modified to your advantage, or setoffs from your debt, or compensatory and punitive damages awards.  You may sue for injuries that made the note invalid, whether or not you face foreclosure.

You may NOT sue until you have complied with § 20 of your loan security instrument, which provides the following delightful text:

Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party’s actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action.  If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph.  The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20.

You can find applicable law (RESPA – Real Estate Settlement Procedures Act – 12 U.S.C. 2601 et seq.) and Regulations (Regulation X – 12 C.F.R. 1024 et seq.) at the below web sites, but take note that I have provided links to the latest at this point in time, and you might need to refer to earlier years based on your situation:

Take note of (carefully read) 12 U.S.C. 2605 and 12 C.F.R. 1024.35 at the above links, for these tell you the duties of the servicer to notify you of changes of the servicer, and explain what questions the servicer must answer for you, what questions the servicer may ignore, and what corrective actions the servicer must take.

So, you see, if you know the note lacks validity in some respect because the lender, servicer, title company, mortgage broker, appraiser, realtor, or some attorney or other third party injured you at the inception of the loan, you can ask for a settlement from, or sue the injurious party.  You start by bringing the injuries to the attention of the servicer.

Now you face a gnawing question that you absolutely must answer:

  1. How do you find out whether the note lacks validity?

Why Mortgage Borrowers Need a Professional Mortgage Examination

Obviously, YOU should examine all the documents related to your loan transaction for evidence of fraud, regulatory breaches, contract breaches, legal errors, and flim-flams. You might find all kinds of causes of action (reasons to sue) that entitle you to challenge the validity of the loan in court and get the court to compensate you for your injuries.

To examine your loan transaction and related issues comprehensively and comprehensively, you will need a good working knowledge of tort law, contract law, mortgage finance law, real estate law, criminal law, bankruptcy law, foreclosure law, consumer credit law, and federal and state regulations law dealing with mortgages, lending, disclosures, credit reporting, debt collection, equal opportunity, etc.

That brings us to the toughest question of all:

  1. Do you have the requisite knowledge and skill to perform a comprehensive, professional examination of your loan transaction and any related court actions?

Frankly, I guess most home loan borrowers do not have a clue how to do that. So naturally, you will want an answer to this question:

  1. Who has such competence and experience to perform a comprehensive mortgage loan transaction examination?

This article focuses on an entirely different issue.  It deals with why you do not need a securitization audit and how to get the putative benefits of such an audit FREE.  So, I shall address the answer to the above question briefly at the end of the article.

But, I do guarantee you right now that NO securitization auditor or so-called forensic loan auditor, and only the rarest of attorneys, has the remotest capability of doing such an examination correctly without wasting your money.

How to Discover Who Owns Your Mortgage Note:  Ask the Servicer

So let us get on with this final question:

  1. How do I find out who owns the note?

How to Avoid Paying the Wrong Party

Most people worry about who owns the note because they do not want to pay the wrong person and then face an accusation of breaching the note through non-payment.  Some simply want to mount a challenge against foreclosure, thinking that if the wrong person forecloses, that will justify asking the court to dismiss the case or stop the foreclosure.

Suppose you do not know who owns the note and you fear that the wrong person will receive your mortgage payments. That could open you to an accusation by the real creditor that you breached the note through non-payment.  The courts provide a means for ensuring that your payment goes to the right party:  the Interpleader Action.

Your loan security instrument identifies whom to pay. If you ever doubt whom to pay, you can file the interpleader action to remove doubt and comply with the terms of your loan.  The court will assign someone to take your money and pay it to the correct party.

Federal Law Helps You Find the Owner of the Note

As to how to find out who owns the note, federal law requires the creditor and servicer to notify you of any change in creditor or servicer timely so you do not pay the wrong party.  Read the law for yourself, here:

See, 15 U.S.C. 1641(f)

(f) Treatment of servicer

(1) In general

A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as an assignee of such obligation for purposes of this section unless the servicer is or was the owner of the obligation.

(2) Servicer not treated as owner on basis of assignment for administrative convenience

A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as the owner of the obligation for purposes of this section on the basis of an assignment of the obligation from the creditor or another assignee to the servicer solely for the administrative convenience of the servicer in servicing the obligation. Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone number of the owner of the obligation or the master servicer of the obligation.

 

Federal law also requires the servicer and creditor to notify the borrower of any change in the servicer or creditor.

See, 15 U.S.C. 1641(g)

(g) Notice of new creditor

(1) In general

In addition to other disclosures required by this subchapter, not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of the debt shall notify the borrower in writing of such transfer, including—

(A) the identity, address, telephone number of the new creditor;

(B) the date of transfer;

(C) how to reach an agent or party having authority to act on behalf of the new creditor;

(D) the location of the place where transfer of ownership of the debt is recorded; and

(E) any other relevant information regarding the new creditor.

(2) Definition

As used in this subsection, the term “mortgage loan” means any consumer credit transaction that is secured by the principal dwelling of a consumer.

 

Thus, the borrower should always have timely notice in order to pay the right party and to know whether the right party has made any effort to foreclose a defaulted loan.

If in doubt the borrower need only call or write to ask the servicer.  The servicer must give the borrower the identity and contact information for the creditor, and the details regarding escrow for insurance and property tax, and other information regarding servicing the loan.

Get Help from the Consumer Financial Protection Bureau

If the servicer plays dumb or either the servicer or creditor fail to inform the borrower, then the borrower may seek enforcement assistance from the CFPB.  As I mentioned above, you can file a complaint via the web site:

Sue the Creditor and/or Servicer

As to punishing servicer recalcitrance, federal law provides borrowers with a private right of action against the creditor and/or servicer as appropriate. The court can order the defendants to pay the borrower up to $4000, plus any actual damage, plus legal fees and costs of the action.  The court can force the defendants to give the proper information to the borrower.

See, 15 U.S.C. 1640(a)

§1640. Civil liability

(a) Individual or class action for damages; amount of award; factors determining amount of award

Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part, including any requirement under section 1635 of this title, subsection (f) or (g) of section 1641 of this title, or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of—

(1) any actual damage sustained by such person as a result of the failure;

(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $200 nor greater than $2,000, (iii) in the case of an individual action relating to an open end consumer credit plan that is not secured by real property or a dwelling, twice the amount of any finance charge in connection with the transaction, with a minimum of $500 and a maximum of $5,000, or such higher amount as may be appropriate in the case of an established pattern or practice of such failures; 1 or (iv) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $400 or greater than $4,000; or

(B) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same creditor shall not be more than the lesser of $1,000,000 or 1 per centum of the net worth of the creditor;

(3) in the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 or 1638(e)(7) of this title, the costs of the action, together with a reasonable attorney’s fee as determined by the court; and

(4) in the case of a failure to comply with any requirement under section 1639 of this title, paragraph (1) or (2) of section 1639b(c) of this title, or section 1639c(a) of this title, an amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates that the failure to comply is not material…

 

Please read the full Civil Liability law at the below link.  I have only provided the part important to this discussion.

The SEC Web Site

You can satisfy your curiosity about the PSA and other documents related to your loan, such as the bank’s 424(b)(5) prospectus form filing.  You need only dig around in Edgar at the Securities and Exchange Commission’s web site here:

You can find the regulations requiring such filings in 17 C.F.R. 230.424

Thus, You Need NO Securitization Audit to Receive its Alleged Benefits

As you can see, I have just saved you the cost of a securitization audit.  I have given you the main benefit of it, knowledge of how to discover the identity of the creditor, the person who owns beneficial interest in the note, and I have shown your entitlement to get the court to award damages to you for a failure to give that information.  And I gave you all that ABSOLUTELY FREE.

Now you know also that you do not need to pay some scalawag huckster of a securitization auditor to find out who owns your note. Most of the time the so-called auditor gives clients a bunch of useless information like a copy of the PSA, but fails to tell you who owns the note.  Why? Because creditors indorsed most securitized notes in blank and most notes have become securitized.

If in doubt, check the Fannie Mae or Freddie Mac web site and enter your loan number, for they own many if not most of the mortgage notes.

If still in doubt, pick up the phone.  Call the servicer, and ask, “Who owns my note?”  If you get the bum’s rush, try it in writing, then contact the CFPB, and complain. If that does not work, SUE.

But under NO CIRCUMSTANCES should you bother with a securitization audit.  It will only waste your money and your time, and give you zero benefit.

Yes, I know I titled the article to make it seem like securitization audits provide benefits you can get free.  Well I gave you FREE those benefits that a securitization auditor fools victims into thinking they will get for a big fat fee, but which the victims do not get at all.

If you already made the ill-informed mistake of paying a securitization auditor for that useless audit, I suggest that you demand a full refund and report that scalawag to the State Attorney General.  Why?  Because those crooked “auditors” know they sell useless junk.

Save Your Money for a Professional Mortgage Examination

Besides, you will need all that money to pay a competent, professional mortgage transaction examiner to examine your transaction documents.  That will reveal injuries you have suffered.  And when you show the injuries to the servicer, the injurious parties, the CFPB, and the court, you thereby give yourself the ONLY opportunity of pressing your adversary into a settlement or of obtaining a damage award judgment from the court.

Yes, I know the ONLY such examination firm in the USA, the only one I can confidently recommend.

If you have a mortgage and you want help with it, familiarize yourself with the articles and concepts at the Mortgage Attack web site here:

Then write me using the contact form at the site, or pick up the phone and call me at

  • 1 (727) 669-5511

Bob Hurt

 

 

 

To ALL Real Estate Short Sale & Loan Mod Agents:

Mortgage Exam Ethically Mandatory Prior to Negotiation with Bank

I write to toss a business philosophy gauntlet before you.  I do not run a business.  I function as ombudsman and consumer activist in support of mortgage victims.  I help people with mortgage problems obtain the best possible advantage for any negotiation with the bank and its agents, or to beat them in a lawsuit.

I consider ANYTHING that operates to defeat that purpose as inimical to it. So, I might become YOUR enemy.  I DO NOT SUPPORT efforts of negotiators and other service providers who undermine the mortgage victim’s ability to negotiate from a position of power.  I shall explain why.

Mortgage Attack, the Only Worthy Methodology

ONE and ONLY one methodology has proven worthy at enabling the best financial outcome possible for mortgagors.  I term it the “Mortgage Attack” methodology.  The Mortgage Attack methodology consists of finding any and all of the ways the mortgage lender and its agents and associates injured the borrower, and using those injuries as negotiating leverage against the bank. This applies whether or not the borrower faces foreclosure.  And the negotiating scenario can include a simple negotiation for a loan modification favoring the borrower, as well as a lawsuit or counter/cross-complaint against the injurious parties.

The Mortgage Attack methodology provides a negotiating advantage to the borrower because it carries an explicit or implicit threat of litigation against the injurious parties for injuring the borrower.  It has become common knowledge that jurors loath lenders and associates who injure borrowers with scurrilous tactics.  Since lawyers for the bank know this, the smarter ones will encourage their clients to settle in some way to avoid the litigation and related damage to the lender’s reputation, not to mention the possibility of monumental damages awards against the bank by the courts.

The Bad Guys in the Transaction

By “lender and its agents and associates” I mean the loan originator, owners of beneficial interest in the note, Realtor, mortgage broker, appraiser, title company operative, servicer, and/or related attorney.  In short, it includes everyone involved in the mortgage transaction and related events other than the borrower.  These are the “Bad Guys” in the transaction, EVEN IF the borrower erred too.  Why?  Because YOU work for the borrower, not the bank, etc.

The borrower’s own attorney or other practitioner can become culpable for injuries to the borrower resulting from the attorney’s failure aggressively to look for such causes of action and to lodge corresponding affirmative defenses, motions to dismiss, or counter/cross-complaints against the lenders and its agents and associates who injured the borrower.

By implication, EVERY PRACTITIONER employed by the mortgagor, including agents for short sale and loan modifications, has ethical and moral duties to guide the borrower toward the Mortgage Attack methodology before undertaking any negotiation for short sale or loan modification on behalf of a mortgage victim.  The reason: only that methodology lets you negotiate from a position of power for the borrower.

Mortgage Examination Critically Important for Finding Evidence of Wrongdoing

The Mortgage Attack paradigm requires a comprehensive mortgage examination by a competent professional to find the causes of action against the lender and its agents and associates.  The examination service provider should render a report showing the causes of action in a form that facilitates admission into evidence in a court of law.  I know of only ONE firm capable of performing such an examination and delivering such a report.  I shall happily divulge the identity of the firm to any with sincere need for the information.

The Challenge, the Gauntlet for Negotiators

I write this commentary to challenge short sale and loan modification agents to encourage their mortgage victim prospects to spend the necessary money on a proper mortgage examination (as above) BEFORE undertaking any short sale or loan modification effort.  The reason should seem obvious, but I’ll explain it anyway.  The prospect might decide to sue the injurious parties instead of negotiating from a position of weakness.  As a consequence of winning such a law suite, the borrower might win huge compensatory and punitive damages, enough to buy several houses.  That will certainly leave the borrower in possession of the mortgaged property at risk.  Furthermore, the borrower can negotiate a short sale or loan modification or keys for cash deal from a position of power and strength, rather than from a position of weakness.

Certainly, the agents for short sale and loan mods will lose some commissions by advocating Mortgage Attack.  But they will also win better negotiated settlements AND more clients because of their integrity.

In essence, I assert in this commentary that agents for short sale and loan mod commit ethics breaches and violate their duties to their prospective clients by telling them a mortgage exam is not always the best way to go when the opposite is obviously true.

Mortgage Attack and Mortgage Exam ALWAYS Come First

Mortgage Attack paradigm demands that the mortgage examination ALWAYS comes first in an effort to deal with a troubling mortgage.  In point of fact, a mortgagor who owes more for a property that its actual value, and a mortgagor facing foreclosure, should ALWAYS purchase a comprehensive mortgage examination by a competent professional FIRST AND FOREMOST, before doing any other thing, to minimize the danger in the mortgage.  ONLY a mortgage examination can give the mortgagor the necessary negotiating leverage for dealing with a bank and its stable of attorneys.

You’ll Earn More Commissions If You DO THE RIGHT THING

Agents for short sale and loan mod seem so terribly desperate for commissions that they will sacrifice the mortgagor client’s best interest by denigrating a mortgage exam as the primary step in resolving the mortgagor’s problems.  That is, plainly, unethical and immoral.

Thus the gauntlet becomes the challenge to do the right thing.  Recommend a mortgage examination for all of your clients as a prerequisite for doing business with them.

Here’s How…

Contact me NOW for free help with that process.

Call 727 669 5511 • Or Click Here.

Mort Gezzam photo
Mort Gezzam

Fight the Right Battle to Cure Your Mortgage Crisis

How to Solve Mortgage and Foreclosure Woes

Do you have an underwater mortgage (you owe more than the value of the property)?

Do you face foreclosure?

You can solve those problems with relative ease and minimize damage to your credit rating if you follow the below decision tree.

You have two battles to fight in the war against the bank over your mortgage.

1.  Foreclosure Defense –  On one side of the hill you have the foreclosure.  If you fight the foreclosure battle, you always lose because of several factors – you signed the note and mortgage, failed to pay, and must forfeit the collateral.

2.  Mortgage Attack – On the other you have the mortgage itself.  When you fight the mortgage (challenge its validity), you can get the loan balance reduced (a “cram-down” loan mod) or get financial compensation or the house free and clear IF you find sufficient causes of action and prosecute them effectively.  The mortgage examination  finds those causes of action.  The examination report shows the causes of action so you can point them out to the bank or judge.

It’s that simple.

Now you face a variety of courses of action depending on your financial condition and the mortgage exam results:

Mortgage Examination Decision Tree

  1. If you are broke
    1. go to Minimize Loss
  2. Else (you are not broke)
    1. get the mortgage examined
    2. If the exam shows causes of action
      1. Negotiate settlement with lender (may need to hire lawyer for $1000)
      2. If you can accept the settlement
        1. embrace the settlement
        2. go to Enjoy Life
      3. else (settlement unacceptable)
        1. Sue lender for causes of action or file counter/cross claim
        2. embrace the result
        3. go to Enjoy Life
    3. else (no causes of action)
      1. go to Minimize Loss
  3. Minimize Loss:
    1. Do Short Sale, Deed in Lieu, or beneficial Loan Mod
    2. go to Enjoy Life
  4. Enjoy Life:
    1. Live happily ever after

I imagine you signed a note and mortgage in which you admitted receiving a loan, having seisen (possession) of the estate, and conveying the estate to the mortgagee for purposes of the mortgage.  Article I Section 10 of the Florida Constitution forbids any law from impairing the obligation of contracts (like the note and mortgage) and Section 21 grants injured persons (including banks) the right to use the courts for redress and justice.  You must forfeit the house for defaulting on the note.  You might drag out the process through legal shenanigans, but I guess you will lose the house in the end at great expense to your fortune and peace of mind…

Unless you can prove that the lender or lender’s agents injured you first.

The key to saving a house from foreclosure AND obtaining financial compensation lies in a comprehensive, competent mortgage examination, and negotiating with or suing the originating lender for the related causes of actions.  If the exam report reveals tortious conduct, legal errors, or contract breaches underlying the mortgage loan, those will provide a measure of opportunity to hammer the lender into a settlement.  Otherwise you don’t negotiate from a position of power, and you lose.  Done right, settling or suing stops the foreclosure, of course.

I know only one mortgage examiner with any degree of competence.  He does not negotiate on price, period.  You fill in a non-disclosure agreement and a questionnaire.  You scan and zip them and all your mortgage and foreclosure related documents (plus loan app and appraisal) and upload the file to the examiner.  He invoices you by PayPal.  You pay with Credit Card or PayPal account.  7 business days later you receive the report.  If it shows causes of action (red ink), you or your attorney negotiate settlement with the originating lender and plaintiff.  If you like the settlement, you settle.  If you don’t, you hire another attorney (fee or contingency) and sue.  The process might drag out a couple of years, but you will probably win (just like the mortgagee wins foreclosures).

  • Click the Contact menu item on the Mortgage Attack web site.
  • Email a request for the Non-Disclosure and Services Agreement, and the  QUESTIONNAIRE.
  • When you receive them, fill them in and execute the agreement.
  • Scan those with all mortgage and foreclosure related documents (closing docs plus appraisal, loan application, etc.) and compress them in a ZIP archive file.
  • Contact Mortgage Attack again for an explanation of how to send the archive file.  You will receive necessary details.
  • Upload the archive to the location provided.  The examination firm will invoice you.  Pay the fee, then receive the report in 7 business days
  • Settle or sue for the causes of action in the report, or (if no causes) walk from the  house with short sale, deed in lieu, keys for cash, etc.

Some gentle reminders…

Contact me by phone (727 669 5511) or Email for further details. I’ll put you in touch with the Chief Examiner after I have answered all your questions.

Yes, you may distribute this article Far and Wide.

Mort Gezzam photo
Mort Gezzam

How to Win $16 Million in the Loan Mod Lottery

You Can Win Colossal Damage Awards in a Jury Trial by Proving the Lender Injured you at the Inception of the Loan

The Linza v PHH case shows the good photo of $16000000
sense of MORTGAGE ATTACK (http://mortgageattack.com) as a methodology for dealing with foreclosure.  It shows how to win $16 million if the mortgagee cheats you in the loan modification process.

In a nutshell, mortgage company PHH agreed to a loan modification to reduce Phillip Linza’s payments about $500, then jacked the payments higher than before, then demanded over $7000, and then refused to accept payments, and THEN foreclosed. Linza hired a lawyer, sued, and after 3-years of legal combat the jury awarded $16 million to Linza because of egregious lender behavior including credit rating damage.

If a lender/servicer has jilted YOU in a loan mod,  you might see something familiar in this scenario.  If so, you should do what Linza did:  SUE.

This does not exactly constitute a Loan Mod Lottery, but it might as well because so few mortgagors sue the lender for cheating them in the loan mod.  You can easily see why.  In a lottery you pay a dollar for a ticket and have a slim chance of winning.  In a loan mod lawsuit, you must find an attorney willing to take the case on contingency, or have enough money to pay for a 3-year litigation, but you have a HUGE chance of winning IF your lawyer has sufficient skill and perseverance.

I see a major problems with Loan Modifications.  To begin with the interest rate goes sky high in 5 years and you have a balloon you can never pay off.  Most loan mod agreements require the borrower to agree to an indemnity clause which waives the right to sue for prior injuries in the loan.  I see THAT as INSANE because lenders and their agents have injured 90% of all single family home mortgagors in the past 12 to 15 years.

If you need help unraveling the weirdness of your mortgage and loan mod, and finding the causes of action underlying either, visit http://mortgageattack.com to learn the basics, and then call me for a discussion.  I don’t practice law or give legal advice, but you might appreciate my business perspectives.

Yuba jury awards homeowner $16 million in mortgage case

Published: Friday, Jul. 18, 2014 – 2:43 pm

It started out as a simple loan modification for a troubled homeowner. It turned into a $16.2 million jury verdict against a nationwide loan-servicing company.

A Yuba Superior Court jury this week awarded $16.2 million in damages to a homeowner who nearly lost his home to foreclosure after the loan servicer botched his mortgage modification, the homeowner’s lawyers said Friday.

Phillip Linza, a homeowner in Plumas Lake, was awarded the damages after a three-year battle against PHH Mortgage Services, a loan servicer based in Mount Laurel, N.J.

Linza’s attorneys, Andre Chernay and Jon Oldenburg of the United Law Center in Roseville, said the award included $514,000 in compensatory damages and $15.7 million in punitive damages.