Rescission, TILA Violations and I'm fighting back!

[gigi in fla]

It seems like my husband and I were the victims of a corrupt mortgage broker, appraiser, lender, title agent - you name it. Little by little we have unraveled all of their scams and they may have thought they got the better of us, but we are fighting back. I see many people on here sending QWR (qualified written requests) to their lenders re: RESPA. If you refinanced your home and there are TILA violations you are entitled to rescind your loan.

TRUTH IN LENDING ACT

A federal law enacted in 1968 with the intention of protecting consumers in their dealings with lenders and creditors. The Truth in Lending Act was implemented by the Federal Reserve via a series of regulations.

The most important aspects of the Act concern the pieces of information that must be disclosed to a borrower prior to extending credit: annual percentage rate (APR), term of the loan and total costs to the borrower. This information must be conspicuous on documents presented to the consumer before signing, and also possibly on periodic billing statements.

In our case, the lender did not disclose the actuals terms and cost to us prior to closing, because they switched us from a fixed rate mortgage to an ARM. You can't do that, that is exactly why this law was passed in 1968. We sent a rescission letter to our lender, and they did not respond within 20 days, and in doing so, they lose their security (mortgage) on our home. We have filed suit to enforce the rescission and in the meantime, we are not making mortgage payments because by rescinding, we told them take the house, and put us back to where we were before we bought and refinanced. Since we filed suit, the lender cannot report us to the credit bureau due to the Fair Credit Reporting Act so our credit is not affected. There are many violations which were committed by the lender in our transaction, too many to mention but Moe has been kind of enough to help out. We also have a forged mortgage application delivered to the title company by the broker several days after the closing. We have an inflated appraisal, again, the perfect storm.

Unless you save at least 1% in refinancing or modifying your loan, you better think twice. It is a form of predatory lending if you refinance less than 18 months after a purchase or refinance, unless the interest rate is much lower and your payments are substantially lower. Also, you should not have to pay for full title insurance if you refinance within a short amount of time, because the title agent can just re-certify your prior policy and save you a lot of money. If they don't, then fight it.

We are still going through all our documents and keep finding more and more violations. This is the most informative and helpful site I have found, and there are some extremely nice people here and I thank them for their assistance.

I guess my point is to make sure you check all your options, don't settle for something that may not be in your best interests.

[Moe Bedard]

I am really glad that you posted this gigi. TILA and RESPA are very powerful laws and they need to be addressed by EVERYONE that is facing foreclosure or attempting a loan modification. A simple review of all your loan documents and disclosures may reveal that you are in fact the victim of predatory lending or mortgage fraud.

Many people will go into foreclosure and lose their homes, never knowing that they were victims and that they could have fought back, fixed their loan and even recoup a lot of money in the process.

These laws are in place to protect consumers and consumers need to start using these laws to protect themselves or else they are just letting these guys make you victims twice and that isn't right.

So stand up, get educated and fight back to save our homes!

[gigi in fla]

Moe:

Thank you so much for your input. This is a wonderful site and I am very thankful to have found you.

FYI: The Office of Financial Regulation and F.B.I. are investigating the lender for fraud, unfair deceptive trade practices, TILA violations, etc. as we speak. We filed a report with the Sheriff's Office on Saturday re: forged document (mortgage application). Also, the title agent did not witness us sign the documents, in fact, no one did and in Florida that means the mortgage was not valid. We filed a claim with the title company's errors and omissions policy and the title insurance for this as well.

The lawsuit is pending, we are waiting for responses which are due within the next week to ten days. It should be interesting as to what these people file as a response.

I just want everyone to make sure if they are going to refinance or modify the terms of their loan, they do not get ripped off doing that as well and that the new loan is fair, it is in their best interests and they are saving money.

There are many people who were tricked and scammed like we were, but they don't know how to contact the State and have them investigate these different entities for their their illegal acts. So many people already have lost their homes and are about to lose them, and I'm sure in many instances they were victimized as we were.

It is never too late to fight, and with a wonderful site such as this hopefully more people will put the word out and go after the really bad people - brokers, lenders, and appraisers.

[6wolverines]

Gigi.....

I just wanted to take a minute to say your "smarty-pants-ness" is yet another welcome addition to the "battlefront" we are forming on this forum!!! I do so dig people who have their $hit together and aren't afraid to let people know it!!!!

Thanks for "suiting up for battle" with the rest of us!!!!!

Char

[gigi in fla]

Char:

Thanks for the kind words, much appreciated. After surfing the net for what seems like ions I finally found a place where people are determined to get back at these bast***s! Moe and everyone's posts have been very informative and this site is such such an asset. It's good to know there are a bunch of people out there who will not settle for geting hosed over, and they are determined to fight.

Gilda

[elpjohnson]

Gilda.....

I must say I am impressed with your style! You are a fighter and like Char said another welcomed edition to this forum. Keep up the great work and never give up on the fight to save your home! Take care, god bless and you are definitely in my prayers.

[Moe Bedard]

I just want everyone to make sure if they are going to refinance or modify the terms of their loan, they do not get ripped off doing that as well and that the new loan is fair, it is in their best interests and they are saving money.

This is very important advice Gigi. Sometimes people are so excited to obtain a loan modification, that they do not even bother to check the fees and charges that they have incurred to see if they are in fact legit.

Thanks for the accolades and like everyone else had said, nice to have another fighter on board., The more the merrier !

[gigi in fla]

Moe:

I have a question since you are an expert on this. If you are charged with a YSP 9yield spread premium), does it have to be listed in the mortgage broker agreement and/or the GFE (Good Faith Estimate)? If they fail to disclose, is that a TILA violation?

Thank you so much,
Gigi

I do not believe so in Florida...the APR is not inclusive of the YSP in Florida, that is a state specific thing. The Feds do not require the YSP to be used in the computation of the APR. It is state specific, presently New Mexico and Missouri for 2 and I believe that some other states have capped back side and front side financing fees to include back side yields. I have to get my state specific junk out, but I do know that Florida is not one of them. Texas has some unique rules and so does Indiana....just to name a few more.

[Moe Bedard]

Glad to see you again Gigi. Actually, that would fall under RESPA. Here is some info from http://www.hud.gov/offices/hsg/sfh/res/respamor.cfm

RESPA required disclosures:

At the time of loan application

When borrowers apply for a mortgage loan, mortgage brokers and/or lenders must give the borrowers:

• a Special Information Booklet, which contains consumer information regarding various real estate settlement services. (Required for purchase transactions only) and
• a Good Faith Estimate (GFE) of settlement costs, which lists the charges the buyer is likely to pay at settlement. This is only an estimate and the actual charges may differ. If a lender requires the borrower to use a particular settlement provider, then the lender must disclose this requirement on the GFE.
• a Mortgage Servicing Disclosure Statement, which discloses to the borrower whether the lender intends to service the loan or transfer it to another lender. It also provides information about complaint resolution.
  

If the borrowers don't get these documents at the time of application, the lender must mail them within three business days of receiving the loan application.
If the lender turns down the loan within three days, however, then RESPA does not require the lender to provide these documents.

The RESPA statute does not provide an explicit penalty for the failure to provide the Special Information Booklet, Good Faith Estimate or Mortgage Servicing Statement. However, bank regulators may choose to impose penalties on lenders who fail to comply with federal law. Please read the section on RESPA enforcement for more information.

RESPA enforcement

Civil law suits
Individuals have one (1) year to bring a private law suit to enforce violations of Section 8 or 9. A person may bring an action for violations of Section 6 within three years. Lawsuits for violations of Section 6, 8, or 9 may be brought in any federal district court in the district in which the property is located or where the violation is alleged to have occurred.

HUD, a State Attorney General or State insurance commissioner may bring an injunctive action to enforce violations of Section 6, 8 or 9 of RESPA within three (3) years.

Loan servicing complaints
Section 6 provides borrowers with important consumer protections relating to the servicing of their loans. Under Section 6 of RESPA, borrowers who have a problem with the servicing of their loan (including escrow account questions), should contact their loan servicer in writing, outlining the nature of their complaint. The servicer must acknowledge the complaint in writing within 20 business days of receipt of the complaint. Within 60 business days the servicer must resolve the complaint by correcting the account or giving a statement of the reasons for its position. Until the complaint is resolved, borrowers should continue to make the servicer's required payment.

A borrower may bring a private law suit, or a group of borrowers may bring a class action suit, within three years, against a servicer who fails to comply with Section 6's provisions. Borrowers may obtain actual damages, as well as additional damages if there is a pattern of noncompliance.

Other enforcement actions
Under Section 10, HUD has authority to impose a civil penalty on loan servicers who do not submit initial or annual escrow account statements to borrowers. Borrowers should contact HUD's Office of RESPA and Interstate Land Sales to report servicers who fail to provide the required escrow account statements.

Filing a RESPA complaint
Persons who believe a settlement service provider has violated RESPA in an area in which the Department has enforcement authority (primarily sections 6, 8 and 9), may wish to file a complaint. The complaint should outline the violation and identify the violators by name, address and phone number. Complainants should also provide their own name and phone number for follow up questions from HUD. Requests for confidentiality will be honored. Complaints should be sent to:

Director, Office of RESPA and Interstate Land Sales
US Department of Housing and Urban Development
Room 9154
451 7th Street, SW
Washington, DC 20410

[Moe Bedard]

Also, they may have slipped this in at closing and you most likely signed in unknowingly. That happens ALL the time. Do you have all your loan docs?

Tried to edit, but timed out....the YSP is a back side function specific to price and rate, which is already computed into the APR, as such it does not pay on the front side of the loan as a financing fee....really weird, but totally allowed at this time.

[Moe Bedard]

So whats your thoughts and RESPA on this issue Poppy? It happens sooooooooooooooo much and is so often violated. What can one do? What would you do in a U/W environment?

Gotten fired again, they did nothing wrong from the stand point of how RESPA is written, they provided a GFE and it is an estimate......and this is not a true financing fee in this state.....not a capped state. They provided the disclosure as required by law on the Final HUD-1.....so they did what they were supposed to do.

Now what would I have done, first I would have called the pissant Broker and asked him if he was trying to make and entire year's income off the subject borrower and capped him none the less and been fired.

[gigi in fla]

Per the Ofc. of Fin. Regulation’s letter dated May 2, 2005, they found the broker violated Florida Statutes 494.038 and 494.00421. They are re-opening the investigation of the broker since I found out the mortgage application was forged, the inflated appraisal, etc.

494.0038(1)(a)1. states: A person may not receive a mortgage brokerage fee except pursuant to a written mortgage brokerage agreement between the mortgage brokerage business and the borrower which is signed and dated by the business and the borrower.

Additionally, the YSP should have been disclosed in the broker agreement and Good Faith Estimate:

(b)1. If the mortgage brokerage business is to receive any payment of any kind from the lender, the maximum total dollar amount of the payment must be disclosed to the borrower in the written mortgage brokerage agreement as described in paragraph (a). The commission may prescribe by rule an acceptable form for disclosure of brokerage fees received from the lender. The mortgage brokerage agreement must state the nature of the relationship with the lender, describe how compensation is paid by the lender, and describe how the mortgage interest rate affects the compensation paid to the mortgage brokerage business.

(c) A good faith estimate, signed and dated by the borrower, which discloses the total amount of each of the fees which the borrower may reasonably expect to pay if the loan is closed, including, but not limited to, fees earned by the mortgage brokerage business.

Also, the State found she violated 494.00421:

494.00421 Fees earned upon obtaining a bona fide commitment.--Notwithstanding the provisions of ss. 494.001-494.0077, any mortgage brokerage business which contracts to receive from a borrower a mortgage brokerage fee upon obtaining a bona fide commitment shall accurately disclose in the mortgage brokerage agreement:

(1) The gross loan amount.

(2) In the case of a fixed-rate mortgage, the note rate.

(3) In the case of an adjustable rate mortgage:

(a) The initial note rate.

(b) The length of time for which the initial note rate is effective.

(c) The frequency of changes.

(d) The limitation upon such changes including adjustment to adjustment cap and life cap.

(e) Whether the loan has any potential for negative amortization.

(f) Identification of the margin-interest rate differential.

The terms of the adjustable rate loan should have been disclosed in the mortgage broker agreement. There was no agreement and therefore, no disclosure.

FYI: The broker failed to respond timely to the lawsuit. I obtained a Default against her on 2/1/08.

Now she violated Florida Statutes, but as to TILA or RESPA, are you saying no violations? What about the lender? They swithced the terms and rate on us without notifying us prior to closing.

I had an audit f my loan docs done and it showed:

1. Finance Charge was understated by $109,734.93 - The total finance charge cannot be understated by more than $100 in most cases, and not more than $35 if the creditor has initiated foreclosure proceedings. 12 C.F.R. §§ 226.23(g), 226.23(h); and

2. The A.P.R. was understated by 1.76% - It should be 1/8 of 1 percentage point of the actual APR per 12 C.F.R. § 226.22(a)(2).

Are these TILA violations? I hired an attorney but he is not "up" on TILA or even the statutory violations, and I truly need help.

Thank you guys! Glad to be back.......

Gigi

P.S. What do I owe you guys for this info.? Thanks again sooooo much

The kicker in the language regarding YSP is "borrower paid financing fees", these fees are Lender/Investor paid fees and as such build into rate and pricing for the product. So the YSP does not fall into the category of Borrower paid financing fees. Mortgage Brokerage fees are those fees paid up front by the borrower either in conjunction with commitment fees or just plain Broker Fee. The YSP is not in that category, as it is not a borrower paid fee. The feds do not consider the YSP as a portion of the TIL APR.

True your Brokerage agreement with the Broker should have reflected the relationship and the manner in which commission was paid, how they derived it, and how the rate and product drove it. But then it goes on to say Borrower can expect to pay to be disclosed....you did not pay these fees in the actual closing costs, except as to rate and product. So.....they goofed on the relationship issue and how they derived their commission, but not on the overall issue of what you were out of pocket charged (now they may have, but I do not have that in front of me)....they do not know the YSP at the time of initial loan application as they have not placed the loan yet. They have a good idea, but nothing specific. The GFE is not required to show anything except borrower paid obligations in conjunction with the closing of the loan as far as Fed reg is concerned and the state reg that you have is certainly more stringent than Fed reg, but the question is did they know at the time of application what those fees earned would be? Should they have provided a GFE interium to closing after discovering that they would make those kind of fees? The kicker to that language is "estimate", believe me I have seen this argued....with 10 different compliance people the room and had 10 different opinions. If she had showed up in court and pursued this where would it have gone.....who knows.....

Now I did not do the forensic review....and I can not speak to another person's work, but the data integrity in any review is sort of like seriously important. However, the YSP can not be included in that equation for the Federal or State Reg Z to hold. So...the reality here is if your attorney is not up on TIL/Reg Z you need to get one that is, and a qualified doc review in conjuction with that attorney's work, the degree that this is reflected as being out of whack is not often seen. Someone's computer was smoking other than a leafy green substance when that TIL was computed at the time of closing. I have seen them out of whack and doozeys in my day, sometimes >200,000.00 and >2.0% but that was because some dolt hand figured it or the computer was programed for another product and cranked the TIL out on a product that was not the one that the loan was actually closing on. I can think of one case where the lender/investor did that for over 3 months and had to shelve every loan they did that on, could not sell them.....

The real issue is that the Broker did not prepare the TIL or the final closing documents the lender/investor did.....so it is hard from me to understand how far out that data was in left field unless that day their computer was working on XYZ product and yours was ABC product. The Lender/Investor does not want the idiot Broker screwing up the docs at closing and rarely do we see the Broker closing with their docs. AccuBanc and Nat City would allow the broker to close in their name (Broker's name), but even then they prepared the docs, not the Broker. Now if this creep was a mortgage banker then yes they would have closed with their own in house doc draw.

The broker in this case was scum......I would have never allowed that kind of YSP to go forward on anything I underwrote - 9% HOGWASH. So I would have been fired again, but in the sense that if this had carried to a court situation, who knows...I sure don't. They were in violation of some Florida statutes, and oh yes they were naughty, real naughty, and so they should have been whacked by the Florida State Commission ruler real hard to the point of probably loosing their license.

So you got the devil's advocate point of view and my point of view rolled into one. This is a case of compliance pure and simple and they are tough cases and as such I will argue the worst and the best......

[gigi in fla]

There was NO broker agreement, so she was not entitled to the $1,592.00 we paid her at closing and the $3,184.00 the lender paid her. How could the lender pay her a fee when there was no agreement executed by us (the borrower)? That is where she violated Florida Statutes. As to the lender, I sent them and the broker a Qualified Written Request and the lender never responded; the broker sent a B.S. response. Now what can I do against the lender?

Who can I send my docs to for an "audit" so I know what, if any, TILA violations were made? Thank you so much, because it gave me the creeps that the attorney I just paid $300.00 to is asking me to provide him with the appropriate statutes, etc. I sent my docs previously to Bank Fraud Victim Center and they are the ones who did the audit and came up with the figures.

Thank you so much for your help.

Gigi

Who is the lender and servicer of the obligation? First off if you sent a QWR it had to be certified return receipt, so that if they did not respond, then you report them to HUD for RESPA violations and FTC for that matter. But you have to have proof that you sent it and that they received it and did not respond in the prerequisite time frame.

As for your Attorney....he needs to bone up himself/herself....not for not I do not know what model the State of Florida Banking folks used to audit or review, and the review has to be done on the Final TIL, not the interim or initial TIL.

[RefusetobeStressed]

OH MY GOD! Thank you for positing this information. We refinanced our home 6 months after we purchased it and the interest rate was higher. I have been on the computer all day preparing my QWR even though I have been approved for a loan modification and should recieve the documents within three to four weeks. I have pulled all the documents from the initial day of purchase; to closing; to refinance and to now.

This website has made me so strong that I am not going to give up without a fight. I will not let these people take our home...I just won't do it...I just cant. I want to see all the documents that was forward as well as what the house was appraised for.

I JUST WON'T GIVE UP!!!!!

[gigi in fla]

Poppy:

The lender was Primequity, LLC in Tampa. I sent the QWR by fax and regular mail to the broker and lender; the broker responded, the lender did not. I have the fax confirmation for both.

The Final TIL was the one received at closing and that is what Bank Fraud Victim Center used for the audit.

The lender is under investigation by the State & F.B.I. for similar cases as mine. I had the broker investigated by the State and they found violations. We recently found the appraisal used in this transaction was inflated by 228 sq. ft. and approx. $25,000.00 - the State is finalizing their investigation of them. I sued the broker, lender and appraiser for predatory lending practices, unfair and deceptive trade practices, fraud, etc. I just received copies of docs from the title co., and the mortgage app. in their file was forged - had a handwriting analayst confirm it. The broker delivered it to the title co. several days after the closing. The State is re-opening the broker's case (her business shut down and she moved to another county).

RefuseToBeStressed: Way to go!! This is the BEST site on the web for victims like us. Best of luck to you!

Gigi

Primequity was most likely a pass through amalgamizer....fancy word for brokers broker and they may not be in business any longer or at least radically changed. This is a wholesale house with correspondent relationships...so who is the lender now. The problem is Primequity is a pass through shell for the loans to the ultimate investor...Wells, Chase, GMAC, Country Wide, etc....they have certain responsibilities, however, they do not possess the loan any longer. The only way I know to make a QWR stick is to use the old USPS method and send it certified, return receipt requested and if they do not respond within the alloted period of time turn their happy selves into HUD and FTC. The problem with faxes is that.....who really is at the other end of the number.....So, you need to certainly send the QWR to Primequity but your current servicer/lender as well, that file will tell a lot.

The FBI will do what they can, but their investigations are often problematic as they only deal with the really, really big numbers. The Secret Service and the Treasury Boys do the other stuff. Well my experience with the Secret Service was when the Treasury Boys got overwhelmed and they had to call in help. If the numbers warrant it the FBI will go for the throat. Like I said, I do not know the Bank Fraud model for review and analysis, and can not speak to their work and the viability of it. I would suspect that they should know what they are doing, but....I trust my own work, healthy professional skepticism, I have a really bad case of it after all of these years.

Looked the beggers up and yes they still have a web site and yes they still appear to be alive and well and kicking....but they do not have a wholesale channel listed...did your broker work out of that office and under that name? They may have closed that division, as it was full of you guessed it fraud....a lot of them have.

These guys appear to be direct lenders only, who I am sure sell out the backside to the big guys. The ink is not dry on the closing and the loan is sold kind of stuff.

[gigi in fla]

Since suit has already been filed, can I send the QWR anyway? The lender now is HSBC - loan was assigned to them (they are almost as bad -- that's a whole other story). Primequity is still in business. They have threatened me several times (so did the broker and lender), called my office, tried to bully me, etc. but I will not back down.

In my case, the broker and Primequity knew the appraisal was coming in too low, I have a letter from the broker to the State during their investigation confirming it was too low. By the way, appraiser worked out of same office as broker. Then Primequity decided to give me the ARM loan from hell as opposed to the fixed rate applied for and which we qualified for. I was actually upside down at time of closing, I did not know it until recently even though we put $11,000.00 down. Now, I found out the mortgage app. was forged (most likely by the broker) - that was just icing on the cake. I filed a complaint with the Sheriff's office about that. The app. was forged because we NEVER applied for the ARM loan and the docs given to me at closing show different terms than the forged doc. They did it to put in their files to make it look like we applied for this horrendous loan. I think they all conspired to defraud us, they all knew the home was worth way less than even the mortgage amount and I am not going to stop fighting them.

The broker's company is out of business, but she should have her license taken away. The lender is in deep you know what....the State is finishing their final determination of the appraiser (I confirmed through an independent appraisal and the County Appraiser the square footage of the home and value at time of closing).

These are bad people, I am one of thousands they hosed and unless people fight back, they will get away with ripping people off.

[gigi in fla]

Yeah Poppy they are just sitting there waiting to screw people and sell the loans to wonderful lender like, say, HSBC. I only had the loan with them 3 months but the damage was done. No lender in their right mind would fund a loan on a home worth $25,000. less than the mortgage amount, yet these sorry you know whats did that to me.

Primequity's attorney sent a threatening letter to me last weke saying if I did not dismiss my "frivolous" lawsuit they would go after me for their fees. I did not respond. The broker failed to answer the Complaint - what a surprise so I'll end up getting a useless judgment against her. But these evil people are gonna get it, as will the appraiser, for what they did to us.

Unfortunately, there are a lot of lazy attorneys out there (I work for one - he is a transactional atty. and knows nothing about litigation) who are not caable or willing to read up on everything. There's a huge market out there of victims, and it's sad so few attorneys in the country can even comprehend how to go after these folks.

With out reviewing docs, and I know this due to other situations, the problems are most probably a combination of Fraud and Sloppiness, HSBC is a problem. It is no surprise to me that the data on the Appraisal was altered, however, no two appraisers really get exactly the same thing on measurements of other than a rectangle. So when I see < 60 square foot blow from one appraiser to another I do not get real cranky, over that I raise my eyebrows. Anything over 100 I get real testy, order a complete field review. The problem you had was greed, pure and simple greed and due to that I have to question how it was presented to the lender by the Broker, I have seen so much fraud that was very skillfully done that I can not fault the lender for not catching it, some of it so damn obvious that the lender is either blind or a crook too. The lenders were greedy as well, witness my fired comment. I did not get along with the fraud attitude that was so prevalent for so long, so I did not stay at some places to long.... I often fired myself, leaving mid day in total disgust. It is all a matter of how the whole picture presents itself, as I am fond of saying paper, give me the paper and let me touch it so that I can ascertain what is real and what is not real. After some time in the business I can kind of tell what they were up to, and what their little pea sized brains were focusing on. Greed, Fraud or just plain sloppy and ignorant. All of it coexisted in the industry for a long time and still does, sadly.