TILA/RESPA violations

[frankielee]

Hi everyone. Only my second post so I’d like to first thank Moe, the mods, and everyone here for this extremely topical and important site. If this site helps only one person fight the fight of a lifetime with a better advantage against well funded corporate legal teams it’s done a great service no doubt.

I posted a question on another thread that was old and received no replies so I decided to start this thread to see if anyone could answer the question burning a hole in my pocket. I was following Cowgirls plight in the thread entitled broker fraud, inflated income.......in that thread she stated that after hiring a law firm and doing a loan audit, the firm declared that they had never before seen as many TILA and RESPA violations.

Understandably, Cowgirl got her hopes up after hearing this, believing that she could fight the fight well armored. Suddenly the mood changed in the thread, and she was left writing that after the so called "good news" about finding so much fraud and negligence in her loan documents, she went on to say that the law firm was suggesting that she and her husband would simply be shredded by a judge who would look upon them as nare-do-wells (my term) who were just trying to get out of paying their mortgage. Hello! What’s wrong here? Did I simply misunderstand her post about her lawyers stance?

At that point her thread abruptly ended, and I was left sitting there popcorn in hand wondering what was left on the editing room floor. Is this the sad end of the story?

Can someone smarter than me please explain this line of thought? If this is so, why would anyone spend a grand on an audit to begin with? If easily proven contractual fraud or even just blatant deficiencies/errors contained in a legal document can’t prove more damaging to a mortgage company then what good are any legal documents to begin with? I must be missing something here.

I’m in the same exact position as Cowgirl wrote about, except instead of five acres, I have four, and instead of six dogs I have six cats, other than that I have the exact same issue as she and her husband had. Countrywide et al inflated my income on the loan application by ten times my income. They put $8,900 per month, when I told them and supplied two years worth of tax returns proving that I made $8,900 per year. And before anyone starts to rant that it was up to me to read the document and be aware of what exactly I was signing, I’ll point out that in the flurry of paper shuffling and signing it’s very easy to miss the fact that it was pointing out a monthly figure, not a yearly sum. So, after reading Cowgirls story, am I to walk away from this thinking that all Countrywide’s legal eagles have to do is build up a "deadbeat client" defense, way too easily proven seeing as how I’ve had my credit trashed, not to mention my dignity destroyed, by the very same corporate entity ready to trash my reputation in court?

Don’t get me wrong, I’m not asking for legal advice here. Just a little hinting and nodding in some direction will suffice. I’m suddenly feeling like I’m not in Kansas anymore, and that maybe the witch isn’t really dead, just preparing her next offensive move. Thanks in advance for any and all help.

[Moe Bedard]

Hi frankielee,


Welcome to the forum and thank you for joining..............


What is it that you want to achieve based on the violations that you are noticing in your docs?
most use the violations to have leverage when negotiating a modification from the lender...........
if a modification is what you would want...........and if this is your only property.............you can also go through a non profit such as NACA to help you negotiate a low fixed rate modification...............


You may want to begin by writing a QWR (Qualified Written Request) to get copies of what you signed at the closing from CW..........so you can see exactly what was on the docs that you did sign...............

here is the link to the QWR...........send it certified mail return receipt requested to............

400 COUNTRYWIDE WAY
MS SV-314
SIMI VALLEY, CA 93065


Qualified Written Request | Home Mortgage | Protect Your Home & Mortgage With Loan Safe

[frankielee]

Hi ***,

Thank you, it's a pleasure to be here. Yes, modification leverage is what I seek. Like many others, I played CW's modification game last year only to have revealed to me their dirty little secret....that what I had to sign and return the very same day as receiving it was a modification that not only raised my monthly payment, but also raised the principal to a higher amount than before I took out the loan 8 years prior. This after threading needles in the dark with the Mumbai customer service department for nine months. Very much akin to kicking someone while they're lying on the ground if you ask me. Not only was the original loan doomed to failure, so was the modification.

Can I reasonably expect to receive a decent mod with proof of blatent fraud? Is there a track record?

I'm working with a non-profit community action counselor but would like to be armed with more ammo if at all possible. My aim would be to see not only an interest rate reduction, but a relatively small principal reduction as well. Sort of like the one Chris Dodd got from his friend Angelo. Not even that high. And yes, I'll be doing a QWR right away. Thanks for the suggestion.

[snapple candy]

frankielee,
I dont recall the thread about these violations but my first impression is that the lawyer didnt see enough money in it to pursue it (took what he could get for now out of them ie: audit)and maybe he did point out the possible downside to filing lawsuit. Personally, I always seek out 2nd and third opinions. I saw an attorney yesterday and was told I have a case against my lender for breech of a verbal agreement to modify to certain terms. It would require me of course give him a hefty retainer and then 10-20K to take it to trial. I would probably win but the cost to litigate and win far outweighs what I might achieve by starting over the modification process.Additionally, the lenders know I have no money to take this to trial. However, it was suggested I at least enlist him to send a demand letter ($300) to the lender outlining the violations to achieve some modification leverage.
I think some of these cases with massive violations need to be handled by a consumer advocacy group that has a backbone or find a pro-bono attorney to take it on (almost impossible). I filed a complaint with the FTC and the Comptrollers office against my lender. My experience with these govt. regulators holding anyone accountable is less than 1%.

[frankielee]

Hi Snapple, thanks for the remarks. I agree with your every point. I do have an appt. next week with a real estate attorney and expect to end up doing exactly what you're doing i.e. paying him for a demand letter. They say money can't bring happiness but it would fetch a whole lot of sweet vindication right about now by being able to proceed wholeheartedly against this overly stacked deck of cards.

I also agree with your dire assessement of the regulators. More often than not, they're industry folks themselves or don't have the staffing to be effective. I'm even reluctent to get my state's AG dept. involved. For one thing, they supposedly helped me with my modification in 2008 and hung me out to dry big time. Secondly, I've seen some of the state AG's settlements with Great Satan Mortgage Company, and while they may be talking in the tens of millions of dollars, which is nothing to these mortgage companies, when it's sliced down to each person who has been harmed it usually ends up being a few thousand dollars at most. Not enough to even dent principal reduction, which is IMHO what is going to have to take place with any and all of the fraudulent mortgages that were written. It's the least that CW can do. I take that back, they're already doing the least that they can do.

Thanks again for your advice.

[gray517]

when you get a modification the lender takes the past due interest and rolls it into the loan, they aren't going to forgive the past due $; if you are not behind when you get a modification they may roll a couple of payments into the loan balance to give you breathing room, that is the way modifcations are done.

Unfortunately none of then lenders including countrywide are offering principal reductions in any of their modifications, regardless of whether you go it alone, use an attorney or a non-profit. They are lowering rates and extending terms and with alot of that the rates are reduced for 5 years or are interest only for 10 , with the new plan the payment target is piti of 31% of gross monthly income, it comes with a 5 year lowered rate and then step up to the current market rate in effect at the time of the modification, We got a fixed for the life of the loan rate by using the free services of Naca.

[frankielee]

Hi Gray,

I understand that the lender will not forgive the past due amount, but I would argue that many of the modifications that are being written are either not helpful to the homeowner, or will create another bust cycle in a few years.

"A study showed that 68% of the modifications written last November wrapped missed payments and other charges into the principal adding $11,000 to the average $210,000 mortgage and led to higher monthly payments in 45% of cases."


This math, to me, is totally unnacceptable, and I believe it proves that the banking industry pays a lot more attention to TARP funds and lip service then they do trying to truly rectify the situation they have put us all in. That's why I seek leverage.

Does anyone here know of anyone who was successful in principal write down with leveraging or is this a pipe dream?

[Moe Bedard]

On the forum alone, we have seen a couple of principal forbearance which takes the principal off of the front end and places it in a balloon payment on the backend that would be due if the property were refinanced or sold.
But we have not seen any principal reduction/forgiveness on the forum to speak of.


Here is what the attorney, Paul Molinaro Esq., had to say about what they are seeing.........

On FIRST mortgages we see very very few balance reductions, but have been seeing lower and lower rates (thus bringing the monthly payment down substantially). On SECOND mortgages, where the property is so upside down that the second has ZERO value (that is, the property value does not even cover the amount of the FIRST mortgage), we see very generous balance reductions. This is because a second with zero equity value is worth nothing, so cents on the dollar is better than zilch.

This is why I try to focus my clients on the monthly payment as a measure of how valuable the home is to them... Focusing on the balance compared to value is what investors do. Focusing on monthly affordability is what a person who loves the home does.

[frankielee]

Thanks for that info ***. That's my plan, to get the monthly amount affordable, I'm just concerned knowing what I know about CW that it's a pipedream without leverage of some sort.

I just spoke with my state's AG office (MN), they've put forth a Homeowner-Lender Mediation act, that would cause a sit down between lender and homeowner before foreclosure could occur, and in their words:

"the parties to the mediation would be required to negotiate in good faith and could agree to a range of remedies, from adjusting the interest rate, adjusting the principal, extending the repayment period, modifying the loan terms, and the like."

That would be a great idea except the person I spoke with had no idea what happened to the legislation that they proposed. My guess would be that once it hit the floor of the legislature it died a quiet death at the hands of lobbyists, much as I fear cramdown will do in the Senate.

More often than not, great legislation like that goes to the vault room in the last scene from Indiana Jones...the one that's a few miles long and filled to the brim with good intentions. Yes, you may call me Major Cynic.

[snapple candy]

Good info from the attorney ***.
If you look beyond an acceptable payment and are underwater a great deal, it does not pencil out financially to stay in many homes. A reduction in the 2nd at least makes it more palletable and at least a compromise of sorts as well as give the borrower incentive to swallow the loss that still exists and shall not likely improve for many years to come. I think that is the very best scenario I can achieve in my situation although I am not holding my breath the lender will agree. Many will not be afforded this opportunity to even negotiate this.

franklee, I think you are just a realist and see things how they really are. Many do not educate themselves about the process or experience the direct consequences of watered down legislation.

[raejean]

frankielee,
Long story short....I have a similar situation and have been fighting this battle for over a year now. One path I took (of many) was hiring a forensic loan auditor and he found multiple truth and lending violations in my loan docs. I thought great, this is it. Wrong. I then spent months first just finding a lawyer in Colorado who "got it" and would take my case. I then spent several more months trying to get info from the lawyer who eventually quit the case and refunded my retainer becuase he could no longer handle CW's antics and he gave up.
I am upside down on the mortgage, probably by 40k right now, the broker who did the loan went bankrupt and then they sent him to jail, and I got nowhere with it. Trust me when I say I am very determined. However I have found what everyone is telling you is pretty much the bottom line. I was fully prepared to walk away from my home if I didnt get a principal reduction.....but I am having a change of heart. Unfortunately I dont believe I will ever get anywhere with my principal reduction (not to say it cant be done, but my patience and health are wearing out) so I went to NACA last month, and I just got an email (along with several others on this forum that I have read this evening) and it tells me they just negotiated a 5% rate for the life of the loan. This is not the end result I was hoping for, and the email says I will be receiving loan mod docs within 2 weeks -so we'll see how good it all is when I see it all laid out on paper. However this is the first good piece of news I have had in the last 4 years of dealing with this house and I am very greatful to NACA for doing in 2 months what I have been trying to do for over a year. Its not the perfect deal with a principal reduction, but it is a good rate that I think I can live with and finally put this nightmare to rest. So thats my 2 cents worth. If you get a principal reduction please let me know how, but I think I am finally going to give up on that and take the good fortune I have been offered just an hour ago in the NACA email. It may take several years for the value to go back up but at least I will have a home over my family's head
Good luck ...trust me, I understand your dilemma and hope you are more successful than I

[frankielee]

Once again I'd like to thank everyone here for their input, it really does help to hear how others in the same boat have been rowing. This struggle is, if nothing else, the biggest financial/emotional roller coaster ride of a lifetime.

raejean, I hear you loud and clear. I too have been going at this nearly full time for over a year now. Some days I start to think I see light at the end of the tunnel and get hopeful, other days I'm convinced it's the 5:05 coming at me full speed. Take this morning for instance. If you search this morning's (3/19/09) Today show, NBC's Kerry Miller did a report from Florida about how the foreclosure tide is turning, due to the jumping on board the TILA bandwagon. Lawyers were starting to "get it", and were getting these things settled fairly, which I truly believe is all that any of us want i.e. simple fairness. One of the attorneys interviewed said straight out and I'm paraphrasing.... 'All I have to do is find a mistake in TILA of $35.00, that's it! And armed with that I can get results that are paying off for the homeowner.' They even interviewed a lady who's mortgage was cancelled free and clear because of TILA violations. You have to hand it to Florida...I'm not sure who organized this event, but there were several dozen real estate attorneys lined up at desk after desk helping these people who I'm sure could recite a story just like ours. Tip of the hat whoever you are.

But back to our reality. I spent hours yesterday on the phone trying to find, like you said raejean, a lawyer who "gets it". I found several who said...'They have you down on the app at TEN TIMES YOUR SALARY? Yes, of course you have a case, and I'd be happy to take it on if in fact you had $20K in liquid assets. Ah, how I hate the truth sometimes.

Has the tide really turned? I don't know and as I said before, I'm very cynical. But there may just be an eventual backlash against the crimes committed by these mortgage giants and predatory lending that equals the AIG debacle, at least in consumer sentiment and outrage. Let's hope so. And my AG hasn't signed on yet, and they're giving me some signs of hope that they'll help. We'll see. If I could speak one line that I think every single person on this forum could agree with, it's that TALK IS CHEAP! Except when it comes to attorneys I might add. :-)

I'm not ready to give up the fight, not yet. Although I'm battle-scarred to say the least, for now I'm lock-jawed around CW's ankle and I'm not letting go until I'm completely spent. Unfortunately to use this ankle analogy also puts me squarely in CW's trickle down zone if you catch my drift, and that's exactly what they've been doing to me and you for quite some time now.

If I'm successful of course I'll post when and how. If not, I'll still post the morbid tale. I'm hoping it's a success story. Thanks again.

[raejean]

Frankielee-
I just found the information you were talking about from the Today Show. (fyi -its Kerry Sanders, not Miller, in case anyone is having trouble finding it) I completely agree and think I should be able to pursue this option but its a matter of finding someone competent to carry it through. If you find a way to do it please let me know. However I would have to find someone quick as my NACA offer is in the works and paperwork is supposed to be on its way. I would prefer to rescind the loan due to the tila violations but that hope is fading even though I know that it is what should really happen and is possible. Just dont know how to make it happen.
I was just looking at it and found a thread about a group of lawyers (which ironically is also called naca- for national association of consumer advocates) and they have a website at naca.net which lists a bunch of different lawyers in different states that deal with these issues. I just dont think I have the time or patience to go through and try another attorney.
I'll see what offer NACA (the other NACA-Neighborhood Assistance Corp of America) got me when I get the paperwork but will be curious and interested in knowing if you find a way to do it.
BTW- your ankle analogy was very amusing -you should write for a living as you have a great way with words
Reminded me of a meeting I was in last week when the speaker was talking about an issue and the end result after the "defecation hits the centrifugal force"! -had never heard that put quite that way either...sorry had to share that since it was along the same lines...just trying to keep some sort of sense of humor through it all!
Another thought of mine was along the lines of some sort of class action suit against CW. Seems there are enough users just on this site alone that some attorney could do something. Oh well. I too am battle scarred and a bit winded at the moment. Losing my fight so I'll probably just take the NACA deal. We'll see if I get a second wind in the next few days since you've got me thinking along these lines again. Up until now I really hadnt heard anyone else mention it but me.
Thanks for sharing and listening. Thats the great thing about this site. It has helped me keep my sanity through the whole ordeal thats for sure!

[frankielee]

raejean, by complete and spooky coincidence, I already have an appointment with a NACA (to use your words, the other NACA) attorney set for this weekend. I'm not holding out hope for much in a thirty minute talk, unless we both break the sound barrier. He claims he's got a suit going against CW right now, I'd love to press him for all the juicy details but there goes 1/2 my time.

Sorry about the Kerry Sanders flub, went off my uh.....uh...memory. That piece can't help but give you hope, even if the hope is for other folks going through this. One of my concerns about settling cheap with CW is that we all know how Machiavellian that entire establishment is. I'm convinced they would be the ruination of us all for a tidy sum, and I'm not just talking about me and you, I mean our entire way of life.

So those who settled for 5% fixed just a short time ago, although granted better than a soon to adjust ARM, have seen just in the last 24 hours, rates drop 1/2 percent to 4 3/4 on the broader market, and there's every reason to believe they'll go even lower, as will all of our property values at the same time. IMO, CW deserves a much bigger kick in the balance sheet than modifying a few thousand or even tens of thousands of loans down to a slightly lower rate. My local community foreclosure contact whom I was talking with recently pointed out to me rather forcefully that CW had never, as far as they know, EVER knocked as much off of a mortgage as I was asking for. I corrected her. Sen. Dodd of Connecticut and Sen. Conrad of North Dakota as well as many other high cabinet officials got very nice lowerings without doing anything that we know of. Please note: there's a heavy emphasis placed on "that we know of."

raejean, thanks for the kind words, actually I'm 50,000 words into my first novel but haven't been able to push forward for six months...head just not in the right place, I have the feeling you can relate.

Hold off as long as you can. Things do seem to be shifting. I can feel it. Then again, it could just be something I ate :')

[raejean]

Let us know when the novel ends up being published. I am already a fan
Also, I will be interested in hearing if you come out of your appointment with any good information.
Best of luck and keep us posted.