Articles Posted in Debt Defense

For the fourth year in a row, elected lawmakers in the Florida legislature have introduced a bill designed to bypass your constitutional rights and speed up the process of taking people’s property away and throwing them into the street.  This bill is given a tricky name meant to fool people into thinking it is good for Floridians.  The “Fair Foreclosure Act”, House Bill 87, has been introduced into the Florida House of Representatives by Representative Kathleen Passidomo (R-Naples). We call it the “UNfair Foreclosure Act” to more accurately portray the intention and goals of the bill.  This is the third year Rep. Passidomo has introduced her bill.  She just won’t give up.  She believes that faster foreclosures that kick more Floridian families out of their homes will speed up the recovery of Florida economy. This bill will have a twin in the Florida Senate, to be introduced by Senator Jack Latvala (R-Clearwater).


What will change if this bill passes?  The law will affect every single pending foreclosure case in the state because it is retroactive.  The banks only need to submit certain documents and then it is up to the homeowner to prove there are issues of fact.  However, the judge can ignore the owner’s issues and enter a ruling anyway!  The traditional rule of law, where a person who sues another must prove their case by “the greater weight of the evidence” will be dead for foreclosure cases.  Banks can take your home away, quickly and easily…  They can continue to fabricate documents as they have been caught doing countless times, file them in court, and then the homeowner has only 20 days to raise doubt, which again, the judge can ignore!  The homeowner is not allowed to take time to ask for bank records or payment history to help prove bank misconduct or a wrongful foreclosure.  Lastly, if a house is wrongfully foreclosed, in certain circumstances a homeowner cannot sue to get their house back!

Over the next month, the bills will move through committees in the Florida House and the Florida Senate where our elected representatives will vote on the bills.  If the “YES” votes outnumber the “NO” votes in each committee, then the bills will go to a floor vote in both chambers of the Florida legislature (the Florida House of Representatives and the Florida Senate).  If those “YES” votes outnumber the “NO” votes in both chambers and the Governor signs off, the bill becomes a law.

In December of 2011, the Department of Justice (DOJ) reached a $335 million dollar settlement to resolve allegations of lending discrimination by Countrywide Financial Corporation.  Countrywide was charged with steering African-American and Hispanic borrowers into loans with higher fees, higher interest rates, or other sub-prime loan features, simply because of a person’s race or national origin.  Skin color, not credit worthiness, was the determining factor for the higher cost loan.

After finalizing the settlement, the DOJ conducted a statistical analysis of millions of Countrywide loans.  The DOJ compiled a list of eligible African-American and Hispanic borrowers who obtained a Countrywide loan which contained higher costs and less favorable rates than loans extended to similarly-qualified non-Hispanic white borrowers during the time frame from 2004 through 2008.  Either a borrower is on this list or not.  There is no dispute process.  Settlement notification letters were mailed in November 2012.  The quickly approaching deadline to return a settlement claim is Thursday, February 28, 2013. 

Despite having numerous African-American and Hispanic clients that should be eligible to participate in this settlement, only one client from our firm received a settlement notification and that client is a non-Hispanic, white person.  This leads us to believe there are massive flaws in the DOJ’s identification and notification process.

As we review our clients’ online docket and/or official records search results each week during this holiday season, we can’t help but think that so many will not be able to spend time with family or loved ones or otherwise enjoy the holidays like they have in years past because of a variety of financial challenges.  We know that this is true for far too many who were just doing as they were told was the “right” thing to do; buying a home, taking out student loans, or responding to numerous offers to borrow money at initial “teaser” interest rates to fix up their home or consolidate some other debt.  We now know that those pushing this “right” thing were really interested in ONE thing, profit, over all else. The result is, years after the supposed “recession” and “bailouts”, much of Main Street is suffering, primarily as a result from Wall Street’s unfettered greed and the governments that enable them.

While providing the best possible legal service to our clients is and always will be our top priority, we can’t help but also be motivated to see justice serviced for an out of control financial services industry which has made the government and so many others believe they are both too big to fail and too big to jail.  This is despite the fact that all the major players continue to commit a growing list of heinous crimes, like we saw recently from HSBC’s money laundering (and don’t forget Wells Fargo and JP Morgan), racist practices by Countrywide/BoA and Wells Fargo and GFI, Ocwen fraud, and top five banks’ foreclosure fraud, and UBS interest rate rigging, and massive schemes involving forgery and land ownership document forgery and fraud.  It is this combined passion that keeps us working long hours, nights, and weekends to serve you in foreclosure defense, debt defense, bankruptcy, real estate and soon, student loan defense.

We are dedicated to all of our clients, to keeping them informed, and most of all, to providing them with the best possible legal representation! While there are still so many challenges ahead and causes worthy of our fight to see justice served, we would like to take this time to reflect and express our most sincere gratitude, especially to our clients who put their trust and confidence in us and also to extend our most heartfelt wishes for a peaceful and healthy holiday season and very happy New Year.

In the past few months there has been a rash of news stories exposing abusive debt collection tactics employed against struggling Americans.  These tactics include fraud, abuse, harassment, and violations of consumer protection laws.  There is no end to the scams employed by these scoundrels; phantom debt collectors, debt collectors convicted of bank, mail, and wire fraud“prolonged, illegal, and systemic abuse”, filing fraudulent affidavits in state courts, failure to verify amount due, and the creditors’ reliance on important legal documents “signed” by dead people.

If you are in South Florida and have been the victim of illegal or unfair debt collection practices or harassment, contact the attorneys at the Law Offices of Evan M. Rosen, P.A. immediately to discuss your options and protect your rights.  Have someone on your side to ensure that you are protected by the Federal Fair Debt Collection Practices Act, Florida’s Consumer Collection Practices Act, Florida’s Deceptive and Unfair Trade Practices Act, as well as other federal and state laws. If a debt collector has violated your rights, you may be entitled to up to $1,000 in actual damages, costs, attorneys fees and even punitive damages, designed to punish the wrongdoer.  The Law Offices of Evan M. Rosen has helped countless people in Miami-Dade, Broward and Palm Beach to assert their legal rights with debt collectors. Don’t be intimidated by illegal debt collection practices. For more information, contact Evan M. Rosen, P.A. at (754) 400-5150.

Please check out our newly updated blogTwitter, Facebook, and LinkedIn pages for all of the latest up-to-date information on the foreclosure crisis, bankruptcy, debt defense, student loan bubble and more.  You can also subscribe to receive our blog updates as well.

In Florida, about half of all homeowners with mortgages owe more than the value of their home. This is called “having negative equity, ” being “upside down,” or “underwater.”  Most of those families owe a LOT more, up to 50% or more than their homes are actually worth!  If a family owes tens of thousands or worse, hundreds of thousands, more than the value of their home, there is little hope of ever refinancing into a better interest rate.  Selling the home, moving for a job, or relocating for family needs is also very difficult but possible as discussed below.  It’s very likely that many families who owe so much more than their homes are worth will never catch up and will never truly own their homes.  Many of these families have hundreds of thousands of dollars owed in a balloon payment that is due after ten to twenty years of paying their monthly mortgages.  Modifications that only reduce interest rates or extend the number of years to pay off the underwater mortgage may effectively lower the monthly payment but are only delaying the inevitable day of reckoning on the disproportionate mortgage balance compared to the value of the home.

Now that the top five banks (Citi, Wells, Chase, BoA, and GMAC/Ally) get short sale “credit” towards the $25 billion foreclosure fraud settlement , there is an increased approval rate for short sales.  A short sale is when a new buyer pays less than the outstanding mortgage owed on the home and the bank allows the sale to go through without demanding the current homeowner come to the closing table with the left-over amount owed.  In many short sales though, the bank reserves the right to collect, at some point in the future, the left over (deficiency) amount that was not paid off at the short sale.   When banks claim credit towards the settlement penalty, they are required to waive the deficiency.  This waiver qualifies as mortgage debt forgiveness, which is normally taxable.  Until the end of 2012, the waived mortgage debt is exempt from taxation due to a 2007 Mortgage Debt Forgiveness Act that was passed by Congress.  This act will expire next month unless Congress votes to extend it.  Our firm helps homeowners review short sale documents to make certain that the deficiency waiver legal language adequately protects our clients.

With each passing year, there is growing awareness that millions of 2003-2007 vintage mortgages were based on a massive Wall Street demand for fraudulent loans.  A demand fueled by investment banking firms which bundled up thousands of loans into scam investment bonds and then foisted the scam bonds off on to our pensions and retirement funds but not before insuring the fraudulent bonds and often the mortgage loans themselves.  To further enrich themselves, these investment banks bet heavily on the fact that the loans would fail.

Florida has earned the dubious honor of being number one in the nation for foreclosures filed against families.  Florida has more than twice national average of foreclosure activity.  And if that wasn’t bad enough, those figures came from a housing data firm, RealtyTrac, which reported Palm Beach County’s October 2012 foreclosure starts at 925 while the Palm Beach County Clerk of Court reports a much more larger figure, 1,418 new October 2012 foreclosures.  This is 493 or 35% more than what RealtyTrac is reporting and that’s just in Palm Beach County.

What’s most important though is that these statistics are not just numbers.  At our firm, we know foreclosures are happening to far too many good people, real people with real lives, each month.  Countless families are living in a state of deep unease due to the financial crisis, caused by big banks and their greed.  Those banks got bailed out while families all across the country are left to fend for the themselves, often scapegoated as being the cause of their own problems.  Your neighbors, co-workers, friends, and acquaintances may be struggling with a foreclosure and afraid to talk about it.  We are here for all South Floridians who would like to consult with someone who will be on their side during these difficult times as well as in the future when times are much better.

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A federal prosecutor from the Department of Justice has filed a one BILLION dollar civil lawsuit against Countywide/BoA for a massive scheme to defraud investors, notably Freddie and Fannie, into purchasing loans that were practically guaranteed to quickly go bad.  This lawsuit is based on the courage of a former six year Countrywide Vice President, Edward J. O’Donnell.  Notably, while Countrywide executives who heavily participated in the fraudulent conduct are named in the lawsuit, none of these, or, for that matter, are any individuals held accountable for this conduct.  Remember Countrywide’s CEO, Anthony Mozillo who made $521 million from 2000-2008 plus $140million when he sold his Countrywide stock and about whom Forbes magazine asked in 2010, “Why isn’t Mozillo in jail?” here.  He was fined by the SEC, paid a tiny percentage of his ill-gotten gains and has moved on, leaving a horrific financial crisis and foreclosure fraud crisis in his wake.The lawsuit was filed today, is 46 pages long and can be found here.

The claims are familiar but include details about the creatively named Countrywide loan approval process called “Hustle” or “HSSL”, for high-speed-swim-lane.  This process was concocted in late 2006 when investor appetite for subprime loans was drying up due to the early defaults of many of the subprime loans backing mortgage investment vehicles sold to retirement fund managers and other investors.  The Hustle eliminated any and all obstacles to loan approval while compensating Countrywide employees based on number of  loans.  Gone were the quality control measures, loan approval staff, and incentives to deny bad loans.  When quality control staff actually did raise some alarms over some of the loans, a remarkable feat given the effort to cover up the horrible loan quality, another group was given a bonus to override those concerns.  The Hustle process started in 2007, $408 billion in loans approved that year alone, and ran full swing until just after the BoA bailout, ending in November 2008.  There was a single minded purpose for extending these fraudulent loans, to sell them to Fannie Mae and Freddie Mac, which were essentially supporting Countrywide by 2007 until it keeled under from the weight of it’s own fraud and was absorbed by Bank of America in January 2008.

Countrywide wasn’t the only hustler out there.  In an earlier case filed by the Department of Justice (DOJ) against Deutsche Bank and originator MortgageIt, the same process was detailed.  The same willful disregard of fraud warnings were part of the DOJ’s claims.  For example, pages four and five of that lawsuit tells of a closet full of stacks of unopened, unread loan process compliance audits that warned MortgageIt of massive fraud in their loan approval process.  That lawsuit was settled for $202 million in May of 2012.

The nation’s top banks are tired of paying the price for crashing the economy, defrauding billions from retirement savings, and dispossessing tens of millions of people from their homes in fraudulent foreclosures across the nation.  The banks are ready to move on already.   Their officers and representatives are whining about the continued investigations, lawsuits, and damage to their reputation.  If the banks are tired of fending off lawsuits, how must millions of Americans facing debt collection, foreclosure, or student loan collection lawsuits feel?

In February 2012, a foreclosure fraud settlement was reached between five of the top banks; Citi, Wells, BoA, Chase, and Ally/GMAC.  The settlement, between these top five banks and forty-nine state attorneys general and federal housing and banking regulators, was the result of sixteen months of negotiations after the story about foreclosure fraud and robosigning (aka forgery and real estate fraud) broke in the mainstream media.   What specific acts of wrongdoing were settled, thereby removing the threat of future demands, settlements, or government lawsuits? According to a FAQ document on the settlement published by HUD on March 12, 2012:

Q: What set of violations are servicers being released from?

In the fall of 2010, after years of tireless work by foreclosure defense attorneys and citizen activists, the media finally shed light on what is widely known as robosigning.  Robosigning is a dismissive term for the widespread manufacture of evidence, including real estate document fraud and forgery by banks, in order to fraudulently claim the right to foreclose on the homes of millions of American citizens, when the paperwork to legally do so did not exist.  The forgery and fraud was also committed in order to continue the fraudulent mortgage-backed-investment scheme used to deplete American’s retirement savings, pension funds, and 401ks.

Within a few months of the media exposure, a working group comprised of all 50 state’s attorneys general and regulators from federal banking and housing agencies came together, albeit some state’s AGs dragged their feet and only joined the group after it was too politically toxic to remain on the sidelines.  The former Alabama AG, Troy King, was so in the thrall of the banks that he stalled until he could no longer do so.  He was the 50th AG to join the group.   In 2011, Luther Strange succeeded King.  As Alabama’s new AG, he was equally reluctant to investigate or rein in the fraudulent practices of the fraudulently foreclosing banks.  Many of these prosecutors believe that we should be satisfied with and celebrate the Justice Department gloating over harsh prosecution and punishment of the small fry, regular people caught up in the foreclosure fraud crisis.

The Attorney General group was headed by Iowa’s Attorney General, Tom Miller, who, at first, used strong language and, in December 2010, stated publicly that criminal investigations and indictments of foreclosure fraud would be forthcoming.  He was up for re-election.  Miller received a flood of campaign contributions from the financial industry, and soon after his reelection took on a much weaker, more conciliatory tone.  Four Republican attorneys general from Florida, Oklahoma, Texas, and Virginia were outwardly hostile to the groups’ efforts to prosecute bank crimes and provide relief for millions of the citizens whom they represent in their respective states.  Despite the promise of quick action, it took a year for news of possible settlement filtered into the media.  Several Democratic AGs from Nevada, California, Delaware,  Massachusetts, and New York, were opposed to the first settlement proposals, faulting the weak provisions and insufficient penalties for the massive scale of the wrongdoing.  Each of them filed their own civil lawsuits against banks for a variety of mortgage servicing and foreclosure abuses.  Miller, the group’s lead AG, even went so far as to kick NY AG Schneiderman off the group’s executive panel due to Schneiderman’s strong objections to weak and useless settlement proposals.

The 2008 bailout of the American financial industry was based on a law enacted by Congress, Emergency Economic Stabilization Act of 2008 (TARP).   Under rushed and pressured emergency conditions, Congress passed the legislation with very little understanding of why the economy was crashing.  There was a sense that the housing boom had something to do with the urgent need for a bailout, so provisions were added that required the bailout trickle down to millions of American homeowners who were given suspect mortgages.  The spectacularly failed mortgage modification program now known as HAMP is part of this law.  HAMP was authorized by sections 101 and 109 of the Emergency Economic Stabilization Act of 2008, which was later amended by 7002 of the American Recovery and Reinvestment Act of 2009.

Because no help was actually extended, most do not realize that the bailout law demanded real relief to the American people not just the financial industry.  To this day, the funds earmarked to help hardest hit families have largely gone unspent.  Programs, presented as a last hope and help, like HAMP, are now being exposed as a way for banks to deplete savings, 401k, and other assets from millions of families.  HAMP leaves families worse off more often than not, owing more, trapped in a home with higher mortgage debt and worse loan terms in the long run.  Sheila Bair, before she stepped down as the chairman of the FDIC, was an outspoken critic of chain of title problems caused by mortgage banking fraud and other foreclosure fraud tactics.  She even called for a Superfund to help American families who have saddled with unsustainable, fraudulent, toxic mortgages.

Bair’s new book, “Bull by the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself,” explains that HAMP was intended to cheat borrowers, to string them along and drain their savings and eventually foreclose on their homes.  This truth is even more strongly echoed in Neil Barofsky’s recent book, “Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.”  In Barofsky’s book, he explains how it dawned on him that the post-bailout goal of the U.S. Treasury was to allow banks to take dwindling wealth of American families while offering false promises of loan modifications all in a continued effort to increase the banks’ health and value.  Barofsky’s realization came to him during a contentious conversation he had with Tim Geithner, the Secretary of the Treasury, when Geithner expressed satisfaction that HAMP was allowing banks to coast gently down after the financial crisis instead of crashing since the American families “foamed the runway” for the banks.  Later, Geithner blocked attempts to use TARP funds to help families cover legal costs to defend against fraudulent foreclosures.

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