Bank of America and Bank of New York Mellon offered loan modification with principal reduction of $35,000 to Texas Homeowners

At Duke Seth, PLLC, clients are not just the file numbers or loan numbers. We care about our clients. Mr. & Mrs. G from Amarillo, Texas engaged Duke Seth, PLLC to stop the threatened foreclosure on their house and to obtain a loan modification. A lawsuit was filed against Bank of America and Bank of New York, challenging their right to foreclose on Mr. & Mrs. G’s property, as a “Lender” by attorney Meenu Seth. Defendants removed the lawsuit from the State District Court to the Federal District Court and filed motion to dismiss, which was denied by U.S. District Court. Defendants then filed the Motion for Summary Judgment, which was also denied by the Court, which forced Bank of America and Bank of New York to consider the loan modification option seriously. Along with the ongoing litigation, attorney Meenu Seth also started the loan modification negotiations with the counsel of Bank of America and Bank of New York. After weeks of intense negotiations, Mr. & Mrs. G were offered a loan modification with a principal reduction of $35,000.00 and an interest rate of 2.5%.

Mr. & Mrs. G are now enjoying their home for three months now. Attorneys at Duke Seth, PLLC work hard for these happy endings.

Remembering the Origins of the Financial Crisis

It’s hard to believe that we’re now six years removed from the onset of the financial crisis.  Lehman Brothers filed for Chapter 11 bankruptcy protection on September 15, 2008, in what is the largest bankruptcy filing in U.S. history.  Unfortunately, that was just the beginning.

CNBC put out a very interesting piece revisiting the Lehman debacle and looking at the bailout that never materialized for this bank.  It takes a look back at some of the decision-making and some of the input that went into those decisions.

The Great Recession is an event that fascinates me both professionally as a lawyer and personally.  It still amazes me, 6 years later, at how the U.S. economy, and much of the world’s economy, was almost done in large part by investors betting on bad loans that never should have been made and that were mishandled once they were made.

The economy is much better than it was six years ago in September 2008.  Some parts of it are booming now.  But many other parts are still feeling the effects of the Great Recession.  Unemployment and underemployment rates are still higher than they should be.  Lending standards have eased some since the years immediately following the collapse, but they are still hard to come by.  And in what scares me the most, real estate prices are skyrocketing again creating a potentially new housing bubble.

On this sixth anniversary at what will probably be the worst economic event of my lifetime, it is interesting to take a look back and wonder “what if.”  It’s at least a more productive activity than taking another Facebook quiz to figure out “what soup am I.”

Attorneys at Duke Seth, PLLC (foreclosure defense law firm) forced Citi Mortgage to rescind the foreclosure and offer homeowner a loan modification.

A homeowner in Dallas County approached foreclosure defense attorney Meenu Seth at Duke Seth, PLLC, after Citi Mortgage foreclosed on her property. While reviewing her case some interesting facts surfaced. Few days before the scheduled foreclosure sale, the homeowner was advised by the loss mitigation department of Citi Mortgage via phone as well via email that they have received her loan modification packet and are reviewing her for the same. She was assured that Citi Mortgage will not proceed with the scheduled foreclosure. Homeowner also received correspondence from Citi Mortgage, after the foreclosure sale took place that she is under review for loan modification. Homeowner was beyond shock when she was served with the notice to vacate. It was a clear case of negligent misrepresentation by Citi Mortgage, due to which the homeowner could not seek legal counsel to stop the foreclosure.

Attorney Meenu Seth sued Citi Mortgage for promissory estoppel and negligent misrepresentation. She obtained a Temporary Restraining Order (“TRO”) and stopped the eviction. Attorney Seth demanded Citi Mortgage to rescind the foreclosure and offer loan modification to the homeowner. After two months of rigorous negotiations, Citi Mortgage finally agreed to rescind the foreclosure and offered a loan modification to the homeowner.

Attorneys at Duke Seth, PLLC strive for such happy endings for their client

Lender’s Foreclosure Attempt Thwarted, Owner Takes Property Free and Clear

It was a good day for a Dallas/Fort Worth-area property owner.  The Lender originally made a short term interest-only type loan with a balloon payment due at the maturity date.  Recently, the lender filed a notice of trustee’s sale giving its notice of its intent to foreclose.  The only problem was that the lender had failed to act on the loan for many years.  Foreclosure defense lawyer Walker M. Duke represented the property owner in the defense of the foreclosure.  After digging into the loan documents, plus several years worth of communications and transactions between the owner and the lender, Walker noticed that the lender was time-barred from bringing a foreclosure.

“It was a black and white case–the lender did not attempt to foreclose within the 4 years limitations period.  As a result, the lender is forever barred from foreclosing on this piece of property,” said attorney Duke.  Because the 4 year statute of limitations period (the time in which a party must take action or lose their rights) had expired, any lien on the property relating to the original loan is essentially void, and the owners have the property virtually free and clear of any mortgage lien.

The owner did not realize that a statute of limitations defense was available, but that defense single-handedly prevented the scheduled foreclosure.  This is just one of many reasons that homeowners facing foreclosure or difficulty with their lender should strongly consider professional legal counsel, as there may be many defenses or options available to them that only a foreclosure defense attorney might know.

Ocwen Does It Again (Being Ridiculous, That Is)

As a foreclosure defense attorney, I get to see the mortgage companies on their worst behavior on a regular basis.  If I’m not seeing it first hand, I’m hearing about it from my clients.  And every time I think I’ve seen and heard it all, something new comes along and blows my mind.  Today was one of those occasions.

Ocwen was the offender this time.  My conversation with one of their representatives began as it always does–with them dutifully informing me that the call “may be monitored or recorded for quality and training purposes.”  I always like this fact, as it–in theory–creates a paper trail of our conversations.

After Ocwen’s representative was less than receptive to my instruction to stop calling my client since he was now represented by counsel (a fact Ocwen knew due to the very fact they were talking with me), I decided to record the rest of the conversation.  So I told Ocwen’s representative that I was recording the conversation from that point forward.

What happened next blew my mind.

“I’m sorry Mr. Duke, if you are recording this call then I will have to terminate our conversation.”  Wait a minute, you began this whole conversation with the disclaimer that the call was being recorded or monitored–I’m not doing something you’re not already doing!  “I’m sorry, I will have to terminate the call if you continue to record it.”

I’m sure this gentleman was just following the orders that he was given at some training session, and I fully expected him to favor keeping his job over appeasing a lawyer half a world away.  But in my years of doing foreclosure defense, I think this takes the prize as the most idiotic and absurd thing I’ve heard come out of a mortgage company’s mouth.

Is this one conversation going to make a difference in the big picture of my client’s case?  Probably not.  However, it was a needed reminder of just exactly what and who it is homeowners (and myself as their attorney) are dealing with on a regular basis.

Are We Laying the Foundation for Another Foreclosure Crisis?

“Those who fail to learn from history are doomed to repeat it.”  It’s a well-known axiom and its wisdom is both simple and powerful.  If we don’t learn from our mistakes, we will make them again, and again, and again.  As I’m watching the real estate landscape these days, I’m wondering if we are setting ourselves up for another foreclosure and mortgage crisis.

I will begin with the disclaimer that I am not a realtor and I’m not an economist.  However, I am observant and I hope I have at least an average amount of common sense.  As I flip through the TV channels at night, my choices are starting to look eerily similar to those from 2006 and 2007.  We have Flipping Boston, Flipping Vegas, Flipping San Diego, Flip This House, Sell This House, Sell This House:  Extreme, Love It or List It, Property Brothers, Selling New York, Million Dollar Listing: New York, and Million Dollar Listing: Los Angeles, among others.  My commute to work is peppered with radio ads to refinance, cash out, or consolidate loans.  Our national obsession with buying and selling real estate is back and stronger than ever.

While real estate prices plummeted during the Great Recession, they have made a strong comeback in the last few years.  Every month I read about double-digit increases in home values.  Anecdotally, my next door neighbor just sold her house within a week of listing it and received about 20 percent more than she bought it for a year earlier.

Now don’t get me wrong, I don’t think that we are where we were in 2007.  But are we headed there?  As home prices skyrocket, they move out of reach for more and more Americans.  Or at least they do under conventional finance.  But no one makes money off of not selling houses or not making loans.  So the loans start to get tricked up a little bit at a time so that people who probably can’t really afford that dream house can now get it.  The process doesn’t happen overnight, and it didn’t happen overnight in the 2000s.  But little by little, we start to creep back to the irrational exuberance that pre-dated the Great Recession.  Where there is seemingly fast, easy money to be made, there will always be someone willing to ignore the long term consequences.

I hope that we have, in fact, learned a lesson from the mortgage crisis.  Have the big banks and the brokers and everyone else who stands to make a buck?  Probably not.  But I hope that on an individual level, people have learned.  I hope they have learned that if it sounds too good to be true (i.e. “I can really buy this dream house on my salary?!?!?!”), it probably is.  I hope that people have learned that the future is uncertain–so matter how sincere and intelligent-sounding someone may be about it (i.e. don’t assume that your job will go great and you’ll get raises and be able to afford the new mortgage payment that goes up by 20% when the adjustable interest rate re-sets in 3 years).  And I hope people have learned that keeping up with the Joneses is both overrated and probably impossible (i.e. your reality will never compare with the carefully crafted but probably fake lifestyle image you see other people put on Facebook).

If people don’t learn from their mistakes, then I expect that my business as a foreclosure defense lawyer will be good.

Banks Say Fixed Mortgages Scrapped

I recently read a very interesting article in Dallas Morning News entitled “Fixed Mortgages Scrapped.”  The front page story reads, in part, “In an action seen as the wave of the future by some industry analysts…one of the largest Dallas-based thrift institutions announced Monday it will no longer write fixed-rate home mortgage loans….The action was lauded by building industry officials, who fear that without the action there would be virtually no home loan money available…The announcement prompted an observer at a competing savings and loan to predict the end of fixed-rate loans in the Dallas area.”

Most people probably overlooked this story, even though it was front page and “above-the-fold.”  How could someone miss a story this big?  Well, it was because there was a slightly bigger news story on the front page that day:  “Madman Kills John Lennon in New York.”  Yes, the story I mentioned appeared in the December 9, 1980 edition of the Dallas Morning News.

Only a foreclosure defense nerd such as myself would overlook the article on the assassination of the former Beatle great to read an old article on mortgages!

I thought the article was interesting for a couple of reasons.  The first is that it is evidence that banks have been bemoaning their financial position for literally decades.  Thirty years ago they were complaining that they didn’t have enough money.  Sound familiar?

The second reason I thought the article was significant is that it is evidence that no one can predict with certainty what is going to happen in the future in the banking and lending industry.  Over thirty years ago, the so-called experts were predicting the end of the fixed-rate mortgage.  But the fixed-rate mortgage is still here.  Remember this article when you hear about some new financial product or some tricked-up loan that allows homeowners to borrow more money than they should.  Remember the article when a banker is trying to sell a loan that may look good now, but may not look so attractive in 5-10 years, and he’s telling you if you don’t like it then you can just refinance (a common sales pitch from the mid-2000s).  I hope out Congressmen and state legislators will remember this when the banking lobby is trying to push through legislation that stacks the deck in favor of the big banks and against homeowners.

Bank of America, Wells Fargo, Chase, and Citi Satisfy National Mortgage Settlement Obligations

According to Joseph Smith, the monitor of the National Mortgage Settlement, Bank of America, Wells Fargo, Chase, Citi, and ResCap have all met the consumer relief goals and refinancing obligation laid out by the settlement agreement.  Smith confirmed this in a report filed with the U.S. District Court for the District of Columbia.

The National Mortgage Settlement is a multibillion-dollar deal between the nation’s five largest banks and 49 state attorneys general to resolve portions of the national foreclosure crisis. The deal called for the banks to provide loan modifications, refinance mortgages to lower rates, and look for short sales and other steps to prevent foreclosures.  The settlement also calls for banks to modify how they service loans and foreclosure cases. Those requirements have not all been achieved yet. Smith will release an updated report on those efforts later this year.

What does this mean for homeowners?

In my opinion, it means that things are about to get much harder for folks having difficulty with their mortgage or facing foreclosure.  Joseph Smith touted the extensive oversight of the implementation of the National Mortgage Settlement, and that he was confident the banks actually did what they were supposed to do.  If that is the case, I applaud both Mr. Smith and the banks for satisfying their obligations.  However, now that they’ve gotten their slaps on the wrist and paid their penance, I suspect things are going to be back to business as usual at the big banks.

For the banks that were a part of this settlement–Bank of America, Wells Fargo, Chase, and Citi in particular–I expect getting relief from your mortgage is going to be more difficult than ever because much of their incentive to work with homeowners has been removed.  This is why it is imperative to get out in front of any mortgage problem you may be having.  In mortgage disputes, time is typically your greatest asset; the more time you have, the more work out options you typically have.  Unfortunately for many homeowners, time is also a quickly evaporating asset.  I see too many instances when homeowners come to me just days before a scheduled foreclosure sale looking for help.  While we have certainly helped many homeowners at the last minute, the sooner you take action, the easier it is to get relief (and usually with less stress).

In light of what I believe are going to me more stringent loan modification and work-out standards from the settlement banks, it is more important than ever to go on the offensive with the bank and not simply sit back and wait until you’re just days–or even weeks–away from a foreclosure.  The sooner you act the better.

Attorney Meenu Seth gets Another Post-Foreclosure Eviction Abated in Denton County

Denton County Court abated an eviction of a homeowner who was facing a lock-out after an alleged wrongful foreclosure on his house. Foreclosure Defense Attorney Meenu Seth filed the lawsuit in State District Court against Deutsche Bank, American Home Mortgage Servicing, Inc., (AHMSI), Homeward Residential, Inc., and American Home 4 Rent, challenging the authority of Deutsche Bank, AHMSI and Homeward to foreclose on the homeowner. Attorney Meenu Seth then filed the Motion to Abate in the eviction proceeding, pending in Denton County Court. Attorney Seth argued that the issues of title are pending in the State District Court and these title issues are crucial to be adjudicated before the County Court decides the issue of possession. After hearing Attorney Meenu Seth’s arguments and arguments of the opposing counsel, Denton County Court decided in homeowner’s favor and stopped the eviction, during the pendency of the lawsuit filed by Attorney Meenu Seth, on behalf of homeowner in State District Court.

The goal of Attorney Meenu Seth and other attorneys at Duke Seth, PLLC is to help the homeowners know their rights and to educate them about their options, either before foreclosure or post-foreclosure.

Attorney Walker Duke Stops Ocwen from Conducting Dallas-Area Foreclosure

Ocwen has been stopped again from foreclosing on a Dallas-area homeowner.  Foreclosure defense attorney Walker M. Duke obtained a temporary restraining order/TRO from a Texas district court judge, halting Ocwen’s attempts to sell the house.  The TRO came on the heels of a lawsuit against Ocwen and a securitization or asset-backed trust that claimed to hold the homeowner’s note.

The homeowner had repeatedly tried to work with Ocwen over an extended period of time to avoid the foreclosure, but Ocwen would not budge.  As a result, the homeowner had no choice but to seek relief through the courts.

“The supposed holder of the homeowner’s note made one representation to the U.S. Securities and Exchange Commission, and an entirely different representation in the county property records.  Both were under oath.  Both can’t be right,” said Duke.

Attorney Walker Duke works with homeowners all over North Texas who are fighting with their lender to keep their home, and he has filed numerous lawsuits on behalf of homeowners to protect their rights.  On behalf of homeowners, Duke has sued many of the lending industry’s biggest companies, including Bank of America, Wells Fargo, Citibank/CitiMortgage, Chase, U.S. Bank, Ocwen, Nationstar, Deutsche Bank, AHMSI/Homeward, Fannie Mae, Freddie Mac, and Goldman Sachs.  He has obtained TROs and injunctions preventing foreclosures and evictions.  He has also obtained loan modifications that have kept homeowners in their homes long term and in some instances, obtained dramatic principal reductions.