The Montgomery County map to the right, examines the percentage
of minority population by census block, along with the number of
foreclosure filings. The darkest areas have an African- American
population of 80% or greater, while the lightest areas have less
than a 20% African-American population Produced by the United
States Department of Housing and Urban Development, 2008.
Slide 5
Race Color Religion National origin Sex Disability Familial
Status Military Status-Ohio Ancestry Ohio Age and Marital Status
Dayton and ECOA Sexual Orientation 11 Ohio Jurisdictions- Akron *,
Athens*, Bowling Green*, Cincinnati*, Cleveland*, Columbus*,
Dayton*, East Cleveland*, Oxford*, Toledo*, and Yellow Springs*.
Source of Income--ECOA
Slide 6
1.Loan Origination a. Purchase b. Refinance 2.Servicing a.Type
of Loan, e.g. FHA; b.Who is the Owner/Servicer, e.g. Fannie Mae,
TARP recipient; c.Note and Mortgage Terms
Slide 7
1. Truth-in-Lending (1 year; 3 years right to rescind) 2. Ohio
Consumer Sales Practices Act(2 years) 3. Equal Credit Opportunity
Act (2 years) 4. Fair Housing Act (State 1 year and Federal 2
years) 5. Fraud(4 years)
Slide 8
Amount Financed : Finance Charges (15U.S.C 1605) plus Amount of
loan (15 U.S.C. 1638) Three business days before closing (15 U.S.C.
1639): (1)(A) You are not required to complete this agreement
merely because you have received these disclosures or have signed a
loan application.. (B) If you obtain this loan, the lender will
have a mortgage on your home. You could lose your home, and any
money you have put into it, if you do not meet your obligations
under the loan.. (2) Annual percentage rate : In addition to the
disclosures required under paragraph (1), the creditor shall
disclose (A) in the case of a credit transaction with a fixed rate
of interest, the annual percentage rate and the amount of the
regular monthly payment; or (B) in the case of any other credit
transaction, the annual percentage rate of the loan, the amount of
the regular monthly payment, a statement that the interest rate and
monthly payment may increase, and the amount of the maximum monthly
payment, based on the maximum interest rate allowed pursuant to
section 3806 of title 12.380612
Slide 9
1.No creditor may make a residential mortgage loan unless the
creditor makes a reasonable and good faith determination based on
verified and documented information, at the time the loan is
consummated, the consumer has a reasonable ability to repay the
loan according to its terms, and all applicable taxes, insurance
and assessments. (except for governmental streamline refinances in
certain situations) 15 U.S.C. 1639c
Slide 10
Loans qualifying as high cost are subject to many restrictions,
including prohibitions against: Balloon payments for loans with
less than five-year terms, except for bridge loans of less than one
year to buy or build a home Negative amortization Higher interest
rate if the borrower defaults A repayment schedule that
consolidates more than two periodic payments to be paid in advance
from the proceeds of the loan Prepayment penalties
Slide 11
Due-on-demand clause, except for consumer fraud or material
misrepresentation in connection with the loan or if the consumer
defaults, or the consumer adversely affects the creditor's security
Making loans based solely on the value of the collateral without
regard to the borrower's ability to repay the loan Refinancing a
high cost loan into another high cost loan within the first 12
months of origination, unless the new loan is in the borrower's
best interest Wrongfully documenting a closed-end, high-cost loan
as an open-end loan.
Slide 12
NOTICE OF RIGHT TO CANCEL (15 U.S.C. 1635) Right to Rescind the
Transaction up three days after loan consummation or the delivery
of the information or up to three years after notice the right to
rescind is actually provided...(look at case lawNote: Tender is an
issueproviding money backnot including certain charges and
interest).
Slide 13
1.Make Sure Covered by Act: Banks and Credit Unions are
exempted. 2.TILA violations rise to level of OCSPA violations
a.Failure to provide disclosures R.C.1345.02(F)(1) b.Unconscionable
Acts R.C. 1345.31 (High Cost Terms) 3. NOT R.C. 1345.03!exempts
residential mortgage transactions.
Slide 14
The Equal Credit Opportunity Act (ECOA), which is implemented
by Regulation B of the Dodd-Frank Act (15 U.S.C. 1691)(actual
damages; attorney fess and punitive damages not more than $10,000
1691e) Applies to all creditors. Its purpose is to require
financial institutions and other firms engaged in the extension of
credit to make credit equally available to all creditworthy
customers without regard to protected class status. It unlawful for
any creditor to discriminate against any applicant with respect to
any aspect of a credit transaction: (1) on the basis of race,
color, religion, national origin, sex or marital status, or age
(provided the applicant has the capacity to contract); (2) because
all or part of the applicants income derives from any public
assistance program; or (3) because the applicant has in good faith
exercised any right under the Consumer Credit Protection Act.
Covers creditor activities before, during, and after the extension
of credit. The ECOA has two principal theories of liability:
disparate treatment and disparate impact (facially neutral
policy).
Slide 15
Actual damages, attorney fees, and can be awarded punitive
damages. Prohibits discrimination in real estate-related
transactions A real estate-related transaction is the making or
purchasing of a loan for purchase, improvement, repair, or
maintenance of a dwelling or making or purchasing a loan secured by
residential property, or The selling, brokering or appraising of
real property 24 CFR 100.115
Slide 16
Discriminate in the making of loans or other financial
assistance Refusing to give a person information about loans or
application requirements or providing incorrect information about
loans Discriminate in the terms and conditions of loans
Discriminate in the purchase of loans 24 CFR 100.120, 125
Slide 17
It is illegal to make, print or publish, or cause to be made,
printed or published, any notice, statement or advertisement with
respect to the sale or rental of a dwelling which indicates a
preference, limitation or discrimination. This provision applies to
all written or oral statements. 24 CFR 100.75
Slide 18
Steering is the restriction or the attempt to restrict a
persons choices in housing by word or conduct. It includes
discouraging a person from looking at, buying or renting a dwelling
because of race, etc. or because of the race etc. of the persons in
a community or neighborhood. It is also described as directing a
person to or away from a particular area or neighborhood based on
that persons race or national origin or based on the racial or
ethnic composition of the neighborhood.
Slide 19
The practice of manipulating homeowners into selling their home
under fair market value by discriminatory means and falsehoods.
Telling homeowners that people who are members of a protected class
are moving into their neighborhood and that because of this they
should expect a decline in the value of their properties for this
reason.
Slide 20
If there is a Federal Fair Housing Violation or an ECOA
violation, there will most likely be a State violation. Military
Status and Ancestry added protected classes but only one year
statute of limitations. Actual damages, attorney fees, and punitive
damages R.C. 4112.051 NOTE: Senate Bill No. 349 proposed to limit
damages, exempt certain landlords, and to award attorney fees to
respondents in some instances. Session held on April 15th.
Slide 21
Detrimental lies that are reasonably relied upon. Lies in terms
and appraised value Must be fact specific and fact heavyallege with
specificity actual damages and if prove actual malice, can be
awarded punitive damages and if show bad faith, can be awarded
attorney fees.
Slide 22
1. What type of loanservicing regulations and guidelines a.FHA
b.VA c.Rural Housing Loan d. Conventionalinvestor guidelines or
underwriting standards or trust agreements
Slide 23
1. TARP Recipient=HAMP participant 2. Fannie Mae or Freddie Mac
servicing guidelines 3. A Trustpooling and servicing agreement 4.
Do they have their own guidelines you can find out about?
Slide 24
Need to have a legal trigger! 1.Included in terms of
contractnote, mortgage, loan modification, etc. 2.Sent Notice of
Error under RESPA and failed to comply.
Slide 25
Notice of Error can be used to contest allegation of default if
entered into loan modification, to contest denial if not permitted
by guidelines, and to get information about loan payments. Under
the Real Estate Settlement Procedures Act (RESPA) 12 U.S.C.
2601-2617, the QWR is split into two categories: Notice of Error
(Federal Regulations 1024.35) and Request for Information (Federal
Regulations 1024.36). Servicer has 5 business days to acknowledge
request or notice of error and 30 business days to respond.
Servicers can request a 15 day extension if notifies borrower of
the extension and the reasons. Failure to comply provides
individuals with actual damages as a result of the failure and any
additional damages, as the court may allow, in the case of a
pattern or practice of noncompliance, in an amount not to exceed
$2000. Reasonable attorney fees may be awarded as well.
Slide 26
Slide 27
1. Complaint: who is Plaintiff; what is being alleged; what is
attached to show have right to foreclose; 2. If no Note, but
Plaintiff alleges that it is entitled to enforce Note or is Note
Holder, but unavailable file Motion for Definite Statement
requesting Note to be filed (can do with Mortgage Assignment as
well if alleging been assigned Mortgage but unavailable). 3. Past
Foreclosure filings?
Slide 28
Slide 29
1. Is this a refinance or purchase? 2. Is this a government
backed loan?
Slide 30
Slide 31
1. What are the terms? Interest Rate-Fixed or Variable Income
(inflated? Fixed income with Variable) Expenses (accurately
listed?) Monthly Payments (paying more-any benefit?) When was it
dated? Handwritten/Typed versions, different? Signed?
Slide 32
Estimates every charge associated with the loan (an associated
booklet provided explains charges). *Estimates must bear a
reasonable relationship to borrowers ultimate costs. RESPA requires
this to be provided to borrower within 3 business days after the
lender receives the application. (12 U.S.C. 2603) Signed? If more
than one provided, are they different? Are the figures
substantially different than HUD-1? Did Client receive within 3
days of application? *Although no private right of action, does
provide support for UDAP claims (per se violations)
Slide 33
Must clearly, conspicuously and accurately disclose APR,
finance charge, amount finance, total loan amount, and payment
schedule (15 U.S.C. 1638) Are finance charges less than your
calculation 12 CFR Part 226.4 and HUD-1 to calculate.12 CFR Part
226.4 Are payments listed as Monthly? Could do an analysis of APR
using listed terms in document Calculate your own determination of
amount financed using HUD-1 figures and Reg. Z determine APR. 12
CFR Part 226.12 CFR Part 226 Actual APR less stated APR is a
violation if outside statutory tolerance (i.e., one-quarter of one
percent for irregular loans, one-eighth of one percent for all
other closed-end loans-your loan will be a closed ended if total
available payments paid out at closing) APR calculations can be
somewhat complex, particularly if they involve a variable interest
rate based on treasury notes or LIBOR-may want to seek assistance
in such an evaluation from Legal Aid or Miami Valley Fair Housing
or refer to the National Consumer Law Center Stop Predatory Lending
manual.
Slide 34
Lists all closing costs and payouts at closing. Follow the
money, were the funds actually paid? Verify with client whether
other listed debts actually paid? Credit Cards, Sellers mortgage,
etc. Listed Down payment/Earnest money? Actually paid or fabricated
to make client eligible for loan? Charges listed reasonable?
(Particularly amounts paid to broker!) Were there more than one
conflicting HUD-1? When was it signed (at closing, at application,
never?)
Slide 35
Is this a refinance? Was the closing within the last three
years? If yes, then: Were two copies provided for each borrower?
(Client should have been provided all copies in closing documents)
Proper form? (one for new lender, one for same lender) Was the
listed cancellation date 3 days after closing? (including
Saturday-excluding Sunday and Holidays)
Slide 36
If either of the above two apply your client has a right to
rescind the loan provided written notice is given within 3 years.
--Security interest in property is voided and clients obligation t
o pay finance and other charges eliminated. --Creditor or Assignee
has 20 days to refund or credit the amounts paid(including any
money given to 3 rd party) and to take steps to void the security
interest. --Then client must tender back money or property --Can be
a complete defense to foreclosure --Statutory damages of $2,000 to
$4,000 for failure to respond *****Rebuttable presumption even if
client signed receipt*******
Slide 37
1. Represents the Debt; 2. Usually considered a Negotiable
Instrument under the U.C.C.; 3. If not a negotiable instrument, is
a contract subject to contract principles( Note defines itself as
not being a negotiable instrument); 4. Typically has a waiver of
Notice; 5. Is what allows for personal money damage suit;
Slide 38
1.Does client have a copy, does the lender? 2.Who signed it?
3.Did client understand terms? 4.Significantly different than
application? 5.Balloon payment? 6.Pre-payment penalties during
first rate adjustment?
Slide 39
1. Generally Contains Notice and Opportunity to Cure as a
condition precedent to filing a foreclosure. This is usually in
Paragraph 22; and Right to Reinstate after Acceleration (usually
Paragraph 19) 2. Represents an Interest in Land, which triggers
Statute of Frauds and Notary Requirements (but Court really doesnt
care if transferred in writing equitable assignment of mortgagePHH
Mortgage Corp. v. Unknown Heirs of Cox, 2013- Ohio-4614 (2 nd
Dist.); 3. Provides the Foreclosure remedy
Slide 40
1. IS THERE ONE?? 2. Who is it from? MERS? 2. Is it Notarized?
3. Who signed the Assignment and the Notary? 4. Are they
robo-signers?
Slide 41
Slide 42
1) Here you dont need password or I.D. to access images 2) Dont
rely upon lenders title check a) Client who had only 50% interest
b) Client whose $175,000 mortgage was released 3) Evaluate all
current mortgages associated with property. 1) Were they released?
2) Current mortgage assignments? 3) Property in name of Clientother
owners? 4) Check for flipping scheme.
Slide 43
1) Get the clients story a) Review details of loan (and if
purchase, how found home), what was told to client, was the closing
at their home, late at night, what documents were provided ? b) Get
the details of the closing, who was there, when did it occur, and
where, was anything explained, were any representations made (dont
worry about the interest rate increasing, well refinance you in two
years). c) Review the application and the HUD-1 with client. Are
the figures correct? Was there a down payment listed when none was
paid? d) Did the client think they were mislead and why?
Slide 44
e) Suggest client start paying into IOLTA-good graces with the
judge f) Has the client attempted any resolution with lender?
(Modification, forbearance, etc.?) g) Is there a pending
modification application, and if not should there be? (HAMP?? If so
pending application should have stayed filing of foreclosure ) h)
Has client filed bankruptcy, what type and when? Discharge or
dismissed? i) Have client contact lender title company and mortgage
broker for copies of closing and compare.
Slide 45
1. What are the Homeowners goals? >Keep Home? >Stay as
long as possible? >Leave as soon as possible? 2. What is the
Clients opinion about the Fair Market Value of their home? 3. What
is the condition of their home? 4. What is the condition of their
neighborhood? 5. Has any homes sold recently on their street?
Slide 46
1. Knowing this can help form the homeowners goals. 2. Can help
determine what options the homeowner may have. 3. Determines what
consequences a homeowner may face if a foreclosure judgment is
entered.
Slide 47
1. Client; 2. Internet searches for values: www.zillow.com;
www.realtor.com; www.realistate.yahoo.com/homevalues;
www.trulia.com www.zillow.comwww.realtor.com
www.realistate.yahoo.com/homevalues; www.trulia.com 3. Google Map
of area 4. Tax Assessed Value
Slide 48
Slide 49
1) Provides 10 year history of tax assessed value, providing
rough idea of value at time of loan. 2) Provides information as to
parcel number to focus recorder search 3) Provides photo of
house-verify this is the property with client. 4) Are taxes being
paid if escrowed? 5) How to contest tax assessed value.
Slide 50
Slide 51
Slide 52
1) Does the Plaintiff have a right to foreclose?-Note A. Is
there an attached note? B. Did Plaintiff have physical possession
of note when the complaint was filed? (HSBC Bank/HSBC Mortgage) C.
Was the note negotiated ? i.Is the negotiation suspicious?
a.Negotiation done by an agent for a defunct company *Check with
secretary of state b.Done by an employee of foreclosing attorneys
law firm *or by attorney c.Several negotiations all signed by same
party d.A later discovered/fabricated allonge even though
sufficient space on note. D. Was the Plaintiff a non-holder in
possession-prove possession at filing with right to collect? E. Be
suspicious of all documents miraculously appearing after this issue
is raised.
Slide 53
2) Mortgage a) Was the Plaintiff on the mortgage or was it ever
assigned to the plaintiff? b) The magic of equitable
assignment-statute of frauds and title issues but not an issue for
court. c) Was assignment from MERS and included reference to note?
i. MERS cannot hold note so cant be acquired from MERS ii. Anyone
can claim to be V.P. of MERS (form can be downloaded). If truly
employee, can request proof of employment and proof of specific
authority to act. Particularly if acting as nominee for future
assignee.
Slide 54
3. If the Plaintiff is a securitized trust.. a) Mortgage and
note must be acquired pursuant to purchase agreement and Pooling
and Servicing Agreement-PSA
(www.sec.gov/archives/edgar)www.sec.gov/archives/edgar b) Above
agreements usually require note to be negotiated from Originator,
to Buyer, to Seller/Depositor to Trustee, with warranties and
guarantees accompanied by certifications occurring at each
transfer. Mortgage must be included in PSA schedule of Mortgages.
c) Only a negotiated note would be acquired by the trust- shouldnt
ever have an un-negotiated note. d) Rarely a qualified mortgage can
be accepted after closing date, but must be within two years-if
assignment is more than two years after trust closing date, or if
mortgage in default.violates trust and REMIC and should be
challenged.
Slide 55
d) Demand to see original note (might have been destroyed after
electronic version created.) e) Challenge any affidavit alleging
possession of note by keeper of records/mail clerk. f) Also with
most trusts we Fair Debt Collection Practices Act (FDCPA), 15
U.S.C. 1692, et sequi based upon non-ownership of note. Note that
the Third District recently discussed Trusts, Trustees and Pooling
and Servicing Agreements in Wells Fargo Bank, N.A. v. Freed, 2012-
Ohio-5941(3 rd Dist.). The Court in Freed found that the Trustee
Plaintiffs power to enforce the note derived from the terms of the
Pooling and Servicing Agreement. Id. at 28- 30. Also, it can be
argued that Trustee has a duty under the law to comply with PSA
under trust principles generally. Schafer v. RMS Realty, 138 Ohio
App.3 rd 244 (2 nd Dist. 2000)(A trustee is held to something
stricter that the morals of the market place. Not honest alone but
the punctilio of an honor the most sensitive, is then standard
behavior.), quoting Judge Cadozo in Labovitz v. Dolan (1989), 189
Ill.App.3d 403, 545 N.E.2d 780.
Slide 56
1. Plaintiffs act of designating itself as successor in
interest is not enough to prove standing. H&S Financial, Inc.
v. Davidson, 2011-Ohio-4290 (2 Dist.); 2. Scrutinize documents in
support of standing, such as merger documents. Attaching copies of
Merger Documents are not self- authenticating. Bank of America N.
A., v. Miller, 194 Ohio App. 3d 207 (2 Dist. ).
Slide 57
Federal Home Loan Mortgage Corporation v. Schwartzwald, 134
Ohio St.3d 13, 2012 Ohio 5017. Question now is: Does the Plaintiff
need to have an interest in both the Note and Mortgage or in just
one of them to invoke the jurisdiction of the court? Many appellate
cases are interpreting Schwartzwald as requiring either rather than
both. The Ohio Supreme Court will decide this soon in SRMOF 2009-1
Trust v. Shari Lewis et al. SRMOF 2009-1 Trust v. Shari Lewis et
al. Interesting First District Case that bases standing on
answering the question: Is the Plaintiff the party who suffered the
injury? 2013-Ohio-4220 As an aside, with this question, can the
Plaintiff show that they suffered the injury by means other than
the note and mortgage? Suspect Ohio S.Crt will say yes to
this.
Slide 58
may be raised at any time during the pendency of the
proceedings as used in Schwartzwald when citing to another case is
being interpreted as providing a limit to when standing can be
raised. If case over, cannot raise since the pendency of the
proceeding is over. Bank of Am., N.A. v. Kuchta, 141 Ohio St.3d 75,
2014-Ohio-4275: standing cannot be raised collaterally.
Slide 59
FAIR DEBT COLLECTION PRACTICES ACT
Slide 60
15 U.S.C. 1692 Glazer v. Chase Home Finance, 704 F.3d 453, 461
(6 th Cir. 2013) (Foreclosure is debt collection) If cannot show
have right to collect note debt and to request foreclosure, allege:
At all times material, Plaintiff is a debt collector as the term is
defined under 15 U.S.C. 1692a(6 ); And at all material times, the
Note debt is a debt as defined under 15 U.S.C. 1692a(5); Plaintiff
violated the Fair Debt Collection Practices Act when it filed a
Complaint in Foreclosure against the [homeowner] because it is
threatening to take a legal action that it cannot legally take. 15
U.S.C. 1692(e)(5). Plaintiff does not have the legal right to
collect on the Note debt and to Foreclose; Put facts in, example of
facts:
Slide 61
In order to collect on the Note debt and to bring a foreclosure
action, the Plaintiff must be entitled to enforce the Note and have
an interest in the Mortgage; Here, Plaintiff is not entitled to
enforce the Note and does not have an interest in the Mortgage;
Plaintiff is not the Note holder and is not the Mortgagee as it
alleges; To be a Note holder, the Plaintiff must have possession of
the original Note, along with an endorsement; [Homeowner] has never
executed a Note in favor of Plaintiff and the Note has never been
endorsed in blank or specifically to Plaintiff; Also, Plaintiff is
not the Mortgagee; [Homeowner] has never executed a Mortgage in
favor of the Plaintiff and Plaintiff has never received an interest
in the Mortgage;
Slide 62
The chain of Mortgage Assignments was not signed by an
authorized party and contains a defective acknowledgment; The
Statute of Frauds requires that an interest in land be transferred
in writing and signed by an authorized party; A Mortgage is an
interest in land; Any attempted transfer of land that violates the
Statute of Frauds is void; Ohio and Florida law require that any
granting of a mortgage interest be acknowledged by a Notary Public.
Here, the Notary Publics acknowledgement was not valid. The Notary
Public did not actually witness Crystal Moore sign. Therefore,
Plaintiff violated the Fair Debt Collection Practices Act when it
filed a Complaint in Foreclosure. As such, the [Home Owner] is
entitled to an award of actual damages plus up to $1,000, to an
award of costs, attorney fees, and punitive. 15 U.S.C. 1692(k);
McCollough v. Johnson, Rodenburg, & Lauinger, L.L.C., 637 F.3d
939 (9 Cir. 2011). Ohio Rev. Stat. 5301.01 (2008); Fla. Stat.
117.107(9)(2009).
Slide 63
EMOTIONAL DISTRESS IS ACTUAL DAMAGES: RECENT 9 TH CIRCUIT CASE
JURY AWARDED PLAINTIFF $250,000 Here: McCollough testified as to
the adverse impact of being sued by JRL, including the anxiety,
stress, and anger that he felt and the "down time" and severe
headaches that he suffered as a result. McCollough testified that
the lawsuit JRL prosecuted against him "definitely" caused him
anxiety, increasing his temper, pain, adrenaline, and conflict with
his wife. McCollough acknowledged his disabling pre-existing
condition but characterized the impact of JRL's lawsuit on him as
"the straw that broke the camel's back." He thought that the
lawsuit was "frivolous" and "an insult," and that he was "being
shoved around." We thus must conclude that the award was not based
on speculation and guesswork, but rather on the jury's valuation of
McCollough's emotional distress. Think how would show this damage
to juryhave to have client start documenting and may have to hire
expert to show emotional damages(this costs $)
Slide 64
1. Failure to provide notice of default and opportunity to cure
(if in mortgage terms) (condition precedent) 2.Statute of Frauds
bars Plaintiff from attempting to enforce Mortgage it does not have
an interest in writing and signed by an authorized party(not a
winner). 3. If married couple and one spouse is not on the Note,
did both sign the Mortgage? If did not, then spouse who did not
sign would not have a lien on their dower right/legal right(if both
on deed) 4.Dont just go along with Plaintiffs request to Reform
Mortgage. Look at case law and facts of situation first. 5. Right
to Reinstate (if in terms) (Contract Violation)
Slide 65
1. Who is entitled to enforce contract? 2. Read the Note and
Mortgage terms. 3. Did Plaintiff Mitigate its Damages?
Slide 66
Principles of Equity bar foreclosure action Foreclosure two
step process: 1) default on obligation; and 2) consider equity of
the situation in order to decide of foreclosure is appropriate. PHH
Mortgage Corporation v. Barker, 190 Ohio App.3d 71 (Ohio App. 3
Dist. 2010) Court upheld trial courts use of equitable principles
to reinstatement of homeowners loan, because the homeowner made a
good faith effort to reinstate, but Plaintiff obfuscated the
situation making it impossible for the homeowners to do so.
*Others: Contract violations, Estoppel, and Unjust Enrichment
Slide 67
1. National Fair Housing Goals, 42 U.S.C. 1441 the realization
as soon as feasible of the goal of a decent home and a suitable
living environment for every American family... 2.Federal Housing
Administration, Rural Housing Service, and Veterans Administration
loans all have loss mitigation regulations that must be followed.
Failure to follow these results in the plaintiff failing to comply
with a condition precedent and the case must be dismissed. Example
is FHAs face to face requirement. But note that regulations that
are incorporated into the Note and Mortgage are the only one the
Court will recognize and enforce. Would need to use a Notice of
Error letter for the others.
Slide 68
1. Is Plaintiff or Servicer a TARP recipient? 2. If yes, under
HAMP regulations. 3. HAMP regulations prevent a foreclosure from
being filed if homeowner is in the process of being reviewed for a
HAMP loan modification and prevents Plaintiff from going forward on
Sheriffs Sale if under HAMP review. 4. Can use contract principles
and equitable claims if fail to comply: breach of contract;
promissory estoppel; intentional infliction of emotional distress.
5. Corvello v. Wells Fargo Bank, N.A., 9 th Circuit Federal case
(August 8, 2013): If homeowner completes trial period plan, bank
must offer permanent loan modification. ***Ohio courts really do
not follow this though! It is all based on contract law.
Slide 69
If Plaintiff has filed a foreclosure action two times before
and the Plaintiff dismissed the past two foreclosures under Rule
41(A)(1), the second dismissal is considered to be dismissed with
prejudice and the third action is not allowed. Exception: If
homeowner cured the default or had the loan reinstated before the
third foreclosure action. U.S. Bank v. Gullotta, 899 Ohio St.3d 399
(Ohio 2008 ); Note: Plaintiffs are attempting to get around this
rule by moving the Court to dismiss the foreclosure under Rule
41(A)(2). Under (A)(2), the Court is suppose to only dismiss upon
such terms and conditions as the court deems proper. Proper means
Plaintiff asked, I would think.
Slide 70
Plaintiffs claims are barred by the Defendants Constitutional
right to Due Process. The Courts facilitation of a process that
allows for property to be taken away by an entity that has failed
to show that it has legal right to do so, violates the homeowners
United States Constitutional due process rights and their Ohio
Constitutional Inalienable Rights. U.S. Const. am.14; Section 1.01,
Art. I, Ohio Constitution.
Slide 71
1. Appraiser licensed in Ohio (after 1/07)?* 2. Real Estate
Agent licensed in Ohio?* 3. Mortgage Broker licensed in Ohio?* 4.
Seller? 5. Lender? 6. Assignee?(hopefully not a holder in due
course if assignment occurred after default) 7. MERS? Question
often comes down to who has money? Also issue of too many parties
makes settlement and discovery difficult and expensive. (or
possible) *Commerce Department has database in Real Estate
Division. (Includes disciplinary actions) Can call Financial
Institutions Division to check for expired or terminated
registrations, and bond information.
Slide 72
1. Truth in Lending Act (TILA) 15. U.S.C. 1601 et seq. 12
C.F.R. 226 (Reg Z) -Creditor(usually original lender) and assignee
if not holder in due course or if violation apparent on face of
documents -Failure to disclose credit information or cancellation
rights. Material Violations (grounds for rescission): *Amount
financed *Finance Charge *Annual Percentage Rate *Total of Payments
*Payment Schedule *Failure to give proper notice of right to cancel
*Certain HOEPA violations
Slide 73
2. Home Ownership Equity Protection Act (HOEPA) 3. Real Estate
Settlement Protection Act (RESPA) 4. Fair Housing Act (FHA) Home
Mortgage Disclose Act Data (HMDA) for loan application by lender
and applicants race, income and geographical location. 5. Equal
Credit Opportunity Act (ECOA) 6. Fair Credit Reporting Act (FCRA)
7. Racketeer Influenced and Corrupt Organizations Act (RICO) 8.Fair
Debt Collection Practices Act
Slide 74
1. Consumer Sales Practice Act (CSPA) (RC 1345) (2 yr. S.L.) 2.
Mortgage Broker Act 3. State RICO 4. Ohio Fair Housing Act 5. Ohio
Constitutional Claims 6. Statute of limitations after acceleration
(6 years) (but could decelerate)
Slide 75
1. Breach of Fiduciary Duty 2. Fraud/Appraisal Fraud 3. Aiding
and Abetting 4. Fruits of the Fraud 5.
Unconscionability/Improvident Lending-lending well beyond borrowers
repayment ability. 6. Unjust Enrichment-reasonable tangible net
benefit to borrower? 7. Negligent Misrepresentation-failure to
disclose loan carries no reasonable tangible net benefit 8.
Intentional Misrepresentation 9. Breach of Contract 10. Civil
Conspiracy-Joint Venture-Agency 11. Negligent Infliction of
Emotional Distress 12. Breach of Duty of Good Faith and Dealings
13. Recoupment (claims in defense that would be barred if brought
affirmatively) 14. Equitable claims (it just isnt fair).
Slide 76
We have client save a monthly amount that they can afford for
the duration of the foreclosure. Can use this money to show court
paying mortgage, to negotiate a settlement, for alternative
housing, to file bankruptcy, or for emergencies. Can save enough to
be able to offer a short payoff or to buy another house.