Archive for April, 2011
JP Morgan Chase and U.S. Marine Corps Capt. Jonathon Rowles announced that they have agreed to settle a class action lawsuit over financial protections due military customers under the Servicemembers Civil Relief Act (SCRA). “We are sorry and regret the mistakes our firm made on mortgages for members of the military, and we’d like to thank Capt. and Mrs. Rowles for helping us address them,” said Frank Bisignano, Chief Administrative Officer of JP Morgan Chase. “We hold ourselves accountable and responsible for these mistakes.”
Under the terms of the class action settlement, which is pending court approval, Chase will make $27 million in benefits available to Chase’s military customers. The firm will pay $12 million to the class and set aside $15 million for additional damages on a case-by-case basis. Any remaining funds will be used to benefit military members, veterans and their families. Chase will also provide an estimated $6.4 million in additional benefits to borrowers who may have been subjected to wrongful foreclosure practices.
Marine Captain Rowles stated, “It is our hope that this settlement will result in greater attention by the entire financial services industry to the nation’s laws that protect our military families.” As a foreclosure defense attorney, I can assure Captain Rowles that I’m doing my part.
Our servicemen and their families are making tremendous sacrifices so that the rest of us can enjoy our freedoms without worry. Congress rightfully provided protections to our soldiers so that banks couldn’t foreclose on their homes while they’re off in battle overseas. You’d think that banks would want to honor our servicemembers’ sacrifices–or at least uphold the law. Unfortunately, that’s simply not the case. This is nothing more than another example of Chase’s philosophy of “Foreclose first, ask questions later.”
For homeowners behind on their mortgage or facing foreclosure, times are tough. The idea of losing your home hits you in a very personal way. At a minimum, it means scrambling to find that most basic of human needs–shelter. But it also means so much more than just losing a building–it means losing the place where memories were made, questions about your financial future, the potential embarrassment of friends and colleagues knowing the bank took your house, and the impact on your kids. Needless to say, homeowners in this situation face a certain amount of desperation. Which means, unfortunately, they are ripe for exploitation by some unscrupulous businesses.
As a foreclosure defense attorney, I hate to see good people taken advantage of by banks and lenders. But what I hate even more is seeing them being taken advantage of by the very folks who claim to be helping them. There are many good lawyers and services out there genuinely trying to help distressed homeowners work with lenders and fight foreclosure. I consider myself one of them. However, there are also many scammers out there that are taking advantage of desperate homeowners. Many of them promise the world. Watch out for these companies and people, and always keep in mind the old adage–if it sounds too good to be true, it probably is.
The State Bar of Texas, the organization that regulates attorneys in Texas (including your’s truly), recently put out an excellent article about protecting yourself from mortgage loan scams. I highly recommend anyone looking to hire an attorney or modification company to fight foreclosure to read it first. Be on the lookout for these types of scams:
- Lease-back or repurchase scams: a company promises to pay off your mortgage, in exchange for you signing a deed over to them
- Refinance scams: people pose as mortgage brokers trying to get you to refinance your home; in reality, it’s a just deed transfer
- Internet and phone scams: a scammer convinces you to apply for a low-interest mortgage online or over the phone; you provide your personal information, and they steal your identity
- Phantom help scams: companies falsely claim to be affiliated with the government and government housing programs
The other major thing to watch out for is someone “guaranteeing” that they can stop a foreclosure or get your loan modified. The bottom line is that there are no guarantees in life, and foreclosure defense is no exception. Legitimate companies and attorneys will tell you about options and possible outcomes, but no one legitimate will promise you results.
As a personal practice, I am always very clear with potential clients about the risks and rewards of different options, and I make sure my clients are comfortable with a strategy before implementing it. Sometimes, that means I lose a potential client, because I won’t promise them a certain result. I’m ok with that, and so should any legitimate company or lawyer who strives to provide a legitimate service. Homeowners facing foreclosure have enough to worry about–they deserve candor from the folks who are offering to help them.
If you are considering fighting a foreclosure, you’ve probably heard a few snears–maybe not directly, but at least in the news or online, directed towards people in your situation. As a foreclosure defense attorney, I certainly have. I’ve even gotten them from judges who are skeptical that the banks really were as careless (and flat out fraudulent) with paperwork as we allege they were.
A few days ago, I wrote about the changing sentiment in America about foreclosures and the banks’ paperwork. Little did I know, at the time I wrote that article, that one of the country’s most respected news outlets, 60 Minutes, would be doing a major piece on the very thing we at The Foreclosure Defense Blog have been preaching for a while–that the banks have been fraudulently creating documents to foreclose on homes, and that in many cases, they simply cannot find any ownship paperwork on the loans they claim to hold. You can watch the 60 Minutes video here, or read the report here. Both are very well done and worth a few minutes of your time.
The report investigates the back offices that created literally thousands of fraudulent documents–daily!–that were used to support bank foreclosures. In one example, a lady named Linda Green was supposedly a vice president of 20 different banks at the same time and had her name signed (and notarized) by many different people.
60 Minutes identified several of the worst offenders–Wells Fargo, Citibank, U.S. Bank, Bank of America (likely in connection with their acquisition of CountryWide), HSBC, and Deutsche Bank. Not surprisingly, none of the big banks would talk to 60 Minutes.
Of course, none of the news reported by 60 Minutes came as a surprise. We’ve been saying this for quite some time, and we’ve been making these arguments in court too.