BREACH OF CONTRACT TO CURE THE DEFAULT MAY REQUIRE AN INJUNCTION.  DO NOT WAIT UNTIL THE HOUSE IS SOLD

We have talked about these HAMP scams, HAMP fraud and breach of contract on this site for several years now.  We have discussed some of the types of problems California homeowners run into when dealing with the lender and loan servicer when trying to seek a permanent and final loan modification.  Some of the issues that people face are:

• Being told not to make their regular mortgage payments (forced defaults)
• Being told that based upon their financials, a permanent modification is approved and all they have to do is make their three trial plan payments. (then once the payments are made, they are denied mysteriously)
• Borrowers making not only the three trial plan payments, but being asked to make more than 3 without reasonable explanation (and then the promised final modification never arises)
• Borrowers being foreclosed on while in the middle of a HAMP trial plan program
• Borrowers not even getting a chance at a good faith loan modification review (lender or loan servicer lying about not receiving requested documents).  No contact by lender or loan servicer.
• Lender or loan servicer refusing to honor the written modification agreement.
• Promises not to foreclose being breached.

These are some of the things we see.  In some cases, there may be grounds to file for a TRO (temporary restraining order) or injunction.  Recently, we have launched our foreclosure warrior website which provides valuable information on the TRO and injunction process, including video education for consumers and sample pleadings, checklists, and other tools for California foreclosure lawyers.

In fact, we have a foreclosure kit that can assist a lawyer in taking the TRO case.  Listen to our Foreclosure Radio show that deals with California TRO and Injunction process.

More great information can be found on our Foreclosure Defense Resource Center.

“Nearly half of homeowners who enrolled in the Obama administration’s program to get lower mortgage payments found themselves canceled out by July.

Forty-eight percent of the 1.3 million homeowners who began three-month trial modifications through the Making Home Affordable Program (HAMP) have been canceled out, the Treasury Department said Friday. About 41% had been canceled out as of June.”

Sounds like some clever folks (or not so clever I guess you would say) are perpetrating short sale fraud on Fannie and Freddie.  Apparently, their fraud investigation unit is up in arms over people not fully disclosing every aspect of a short sale to them so they can make their best decision possible.  They are even fashioning definitions for illegal activity.  Here is their definition of short payoff fraud:

Any misrepresentation or deliberate omission of fact that would induce the lender, investor or insurer to agree to the terms of a short payoff that it would not approve had all facts been known.” Misrepresentations in these schemes may include the buyer of the short payoff property, a subsequent transaction at a higher price, and/or the selling borrower’s hardship reason used to qualify for the short payoff. In many instances, the short payoff fraud will involve a “facilitator,” engaged by either the listing agent or the selling borrower, to assist with negotiating the transaction.

Here is the link to the story on their site:

http://www.freddiemac.com/singlefamily/news/2010/0412_payoff_fraud.html

I would propose a truce.  Lenders, Loan Servicers and Investors play fair in loan mods, (no misrepresentations or concealments) and everyone plays fair in short sales.  Seems like a fair truce.

Seriously, this goes out to brokers and homeowners and highlights the need to fully disclose all material aspects of your short sales transactions.  If you are falsely charged with short sales fraud or mortgage fraud (their other main beef with homeowners who have the audicty to try to save thier own financial hide) and need to hire an attorney, feel free to contact me to discuss.  I imagine they are going to try to make an example out of somebody to send a message to everyone.  Other than that good luck in carrying out your short sale!

CAN SOCIAL MEDIA SAVE US? FOR ONE THING IT CAN EDUCATE US.  OPEN YOUR EYES PEOPLE AND SEE WHAT IS GOING ON.

Is this FRAUD?  Is it BREACH OF CONTRACT?  Is it UNFAIR AND DECEPTIVE BUSINESS PRACTICES?  Is it HEARTLESS?  What exactly is going on here?  Why can’t the lenders and loan servicers play fair when it comes to HAMP modifications, and even as to internal (non-HAMP) modifications.

We have identified several different types of scenarios on our website www.TrialPlanFraud.com.

People often ask us, “what can we do about this kind of shenanigans perpetrated by the lenders and loan servicers” (and if these entities are acting as “agents” for the so-called “investors” of the securitized loans aren’t the investors (principal) also liable for these deceptive acts?

Here’s some insight on these trial plan issues:

(1) The lenders are not obligated to give you anything, but if they do, they should play fair and honor what they say they are willing to give you.  For example, if you tell a 70 year old homeowner that they qualify for a trial plan modification (leading them to believe badly needed relief is at bay) shouldn’t the lender play fair, review the financials in good faith, and if nothing changes in a material manner from the time the trial plan was given until the time the final review takes place, shouldn’t this mandate that the lender/servicer/investor provide the modification?  After all, we are not asking you to give something you were not already willing to give, we are simply asking you to honor your trial plan that you used to suck additional payments out of people.  In this case, you would also be avoiding potential liability for elder abuse (financial elder abuse under California law).  Why not play fair and do the honorable thing?

(2) If the lender/servicer/investor refuses to honor the modification, consider sending in a “TRIAL PLAN FRAUD / BREACH OF CONTRACT LETTER” outlining the relevant facts, payments made, and citing potential causes of action.  You should consider putting the lender on notice of potential claims you may raise against them in a future civil lawsuit.  Our law-firm can write these letters on your behalf which also includes a qualified written request and demand to identify the holder of the loan amongst other things.

(3) If all else fails you may want to discuss with legal counsel the potential for filing a civil lawsuit and seeking money damages, specific performance of the contract and/or an injunction to stop foreclosure.  Some fact patters are better than others when it comes to deciding whether or not a civil lawsuit is in your best interest.

(4) When dealing with your lenders/investors/loan servicers, please make sure to make written notes of everything, document everything, take down names, dates, badge numbers, etc.  You will need this for our trial plan breach letters and if you wind up filing a civil lawsuit.  In this business you have to document everything, and trust no one.  The lenders are only out to protect their own interests.  They do not care about you or saving your home.  Right now it is all about their cleaning up their books.

THESE ARE JUST A FEW THINGS TO KEEP IN MIND WHEN TRYING TO SAVE YOUR HOME FROM FORECLOSURE.  FOR MORE INFORMATION VISITWWW.FORECLOSUREDEFENSERESOURCECENTER.COM OR TO BOOK AN ATTORNEY CONSULTATION CALL (877) 276-5084.

There is a new wave of happenings in the loss mitigation marketplace.  When a loan servicer or lender fails to modify a loan (especially loans that are upside down and in need of principal reduction) some buyers are deciding to blow off the lender and just walk away from the property.

Well of course the lenders are up in arms about this financial preservation strategy (as I learned in contract law many years ago, this is the concept of “efficient breach” wherein sometimes it is simply in ones best interest to breach a contract).  Of course the rules change when the efficient breach is perpetrated on the mighty banks.  To them this is “mortgage fraud” or “buy and bail” or “unethical” or “immoral.”

What banks fail to realize is that if they would provide MEANINGFUL MODIFICATIONS WITH ALL THE TAXPAYER FUNDED BAILOUT MONEY THEY RECEIVED PERHAPS PEOPLE WOULD NOT BE BAILING OUT ON THE LENDERS.

IF THE LENDERS (AND THEIR INVESTORS WHO INVESTED IN THE SECURITIZED LOANS) DO NOT WANT TO PROVIDE MEANINGFUL LOAN MODIFICATIONS BECAUSE THEY ARE SEEKING TO DO WHAT’S IN THEIR BEST INTEREST, SHOULD THEY REALLY BE SURPRISED THAT BORROWERS AND HOMEOWNERS ARE PROTECTING THEIR INTERESTS BY PURSUING WHAT SOME WOULD CALL A “STRATEGIC DEFAULT” STRATEGY.

Now, before you exercise these types of strategies, it would be wise to consult with a foreclosure defense lawyer to discuss your options, review your situation, and to analyze whether or not there is any liability in this regard.  Whether or not something is immoral or unethical is a different question than whether or not something is illegal and can result in civil liability.  Have your case reviewed.

IN THIS MARKETPLACE IT SEEMS THE TIDE IS SHIFTING TO AN EVERY MAN AND EVERY COMPANY FOR THEMSELVES APPROACH REGARDLESS OF THE IMPACT THAT MAY RESULT TO LOCAL NEIGHBORHOODS AND PEOPLE THAT ARE NOT IN DEFUAULT.  WHO IS TO BLAME IS A QUESTION OF WHICH CAME FIRST, THE CHICKEN OR THE EGG.

STEVE VONDRAN, ESQ.
FORECLSURE DEFENSE / BANKRUPTCY
CALIFORNIA / ARIZONA
PHONE (877) 276-5084

Here is a copy of a letter we received on one of our Clients with a Wells Fargo Loan.  Originally denied the HAMP modification after making the rquired payments, we submitted a breach of contract letter (normally a beefy 5-10 page letter) to Wells Fargo, who recently responded with this letter agreeing to the loan modification.  According to our Client “the best money I’ve ever spent.”

Kudos to Wells Fargo for playing fairly and keeping its word on the HAMP trial plan modification.

Well, as we have been saying all along, the lenders (who got their happy meal bailout – BofA got 25 billion dollars – go red, white and blue) have been a bit too chintzy with loan modifications even where it pretends to be committed to applying federal bailout out funds to help homeowners.  In Washington state, homeowners have had enough of the runaround.  The class action lawsuit filed claims Bank of America is intentionally withholding funds provided under TARP and failing to modify loans.  Apparently there are about 1 million loan that qualify for help under BofA, but only about 12,000 permanent modifications have been provided.  It will be interesting to see what Bank of America does in regard to the lawsuit.  In my experience, I am sure they will give the usual lip service: “we are doing everything possible to help Washington homeowners and this lawsuit has no merit.”  That is typical of what you can expect to see.