Bagels at a Bar Mitzvah

moretrouble

LoanSafe Member
Off to Federal Court I go. I received from the FHA today some of the info on my note and mortgage to confirm that yes on the 60 month of delinquency my note was sent to DASP while still in loss mitigation.
I am proud of myself though. I have been in foreclosure for 10 years with 3 different banks, and I paid down only about $20K of the $200K loan.
Its funny how there are periods of like 5 months where the servicer is reviewing the financial reviews and then it states in the 6th month that I was ineligible because I never responded.
But since I am suing for breach of contract over $75K I have to go to Federal Court. Learn all new rules, etc. And damn, they are expensive...$450 just to file a suit.
So I am in state court waiting to file my appeal.
And now Federal Court to sue the first servicer.
Oh and that stupid storm is coming my way.
I would exhaust all remedies available in the state courts first. Motion for reconsideration, then hearing,, relief of judgement, then hearing, appeal, motion to correct transcript, reconsideration, petition to state SC, ... would buy you at least another two years. Save the Federal for later. I am still waiting for Bank of America to enforce the foreclosure judgement (file a writ of execution to kick me out). :) I fought 5 law firms, a bunch of crooks ( I mean attorneys), and still here.
 

moretrouble

LoanSafe Member
Off to Federal Court I go. I received from the FHA today some of the info on my note and mortgage to confirm that yes on the 60 month of delinquency my note was sent to DASP while still in loss mitigation.
I am proud of myself though. I have been in foreclosure for 10 years with 3 different banks, and I paid down only about $20K of the $200K loan.
Its funny how there are periods of like 5 months where the servicer is reviewing the financial reviews and then it states in the 6th month that I was ineligible because I never responded.
But since I am suing for breach of contract over $75K I have to go to Federal Court. Learn all new rules, etc. And damn, they are expensive...$450 just to file a suit.
So I am in state court waiting to file my appeal.
And now Federal Court to sue the first servicer.
Oh and that stupid storm is coming my way.
Take all the allowable time for filing motions , responses, appeal. If a motion is due in 30 days, file on the 29th day, etc..
 

isisis

LoanSafe Member
I didn't even bother going to my motion to reconsider hearing the other day, I knew what the outcome would be, I just wanted to get it on record and preserve as much as I can for my appeal, which I am filing next week. I really don't expect much out of the appeal anyway either, but I will give it a shot. Worse comes to worse, if I still want my house during or after appeal, I can file Chapter 13, since I have saved up enough money to make the plan workable.

I am going to file a tort action for breach of contract against Wells, my first mortgage owner, and the law firm that represented them, as a result of them sending my home to the DASP program while telling me and the court that they were working on a modification. This is exactly like double tracking. Even though you can't sue for damages on FHA violations, the violations can amount to a breach of contract, according to the case law I read. The issue is of damages as a result. At the least, HUD paid out the full price of the home to Wells, Wells never properly accelerated the loan which means all the interest charges, legal fees, etc. plus any other statutory damages I can think of. My state has a SOL of 20 years on mortgage contracts. I will also file an ethics complaint on the law firm for trying to certify to the court something it new was patently false. Now I have to do research on how to sue someone.
Arggy, you can't file a tort action for breach, the action has to be in contract. You can have some tort claims in the complaint. Alternately you could file an action in tort with a contract claim. Main difference between contract and tort, remedies for breach not intented to punish because breach is not a wrong in fact it's an option, if you're willing to pay for damages.
 

arrgy

LoanSafe Member
Arggy, you can't file a tort action for breach, the action has to be in contract. You can have some tort claims in the complaint. Alternately you could file an action in tort with a contract claim. Main difference between contract and tort, remedies for breach not intented to punish because breach is not a wrong in fact it's an option, if you're willing to pay for damages.
I definitely have a breach of contract, that is obvious, loss mitigation was not performed which means the debt should have never been accelerated, on top of that sending the loan to the DASP program while in loss mitigation violated the terms of the contract. The issue with the breach of contract is the restitution. I definitely have monetary damages in the wrongfully placed fees and fines and interest, my cost to legally defend, and anything else compensatory. Then there is the issue of the note and mortgage. Should it go back to the FHA, should it go back to Wells, should there be a recession, what special performance should be done?

Then there is the possible independent tort actions by Wells in carrying out the actual foreclosure and sale of the note to DASP. There was willful fraud and deceit by Wells to the court (several times) which I relied upon. Creating a situation of extrinsic fraud, and denying me an opportunity to be heard in court (by selling the note in the middle of the foreclosure to get out of defending it).
 

arrgy

LoanSafe Member
I also have to think about bringing the FHA into this suit. They were the one who actually relied on the information given to them by Wells and sent the note to DASP without ever checking it out. They ultimately signed off on the sale and sent the note. However, bringing them into it brings a world of headaches.

In addition I am considering bringing in the law firm that represented Wells. They helped to induce the fraud by telling the court and myself that they were ready and proceeding with trial, when in fact, the note was already sold. Unethical behavior probably doesn't begin to describe what they did. They had an obligation through a South Carolina Supreme Court order to keep me and the court informed of what was happening. They also helped to delay the case by months so that Wells could hit that magic 60 month mark and receive 100% of the value of the house paid out by HUD.

Finally, if I have a recession of the contract, what happens to my current foreclosure case with a new servicer, which is heading to an appeal?

This is a mess.
 

Survivor_IN

LoanSafe Member
In general, what I have seen with a rescission is covered under State law and involves offsets. For example, you borrowed 200k and paid 40K per year for 2 years in P&I, plus 10k to the lender as closing costs and fees. This leaves the loan without ability to collect interest but you are still on the hook for the money received and must pay back the principal. The alleged loan is now reduced. 200k-90k=110k. You now have a debt of 110K. (It would simply be "unjust and unfair" for a party to expect foreclosure when they cannot inflate their loan amount to 100 percent equity.) Is this now something they can legally foreclose? Likely not. With this, you can take that offset further and demand damages of "whatever" in court. I want to know more about damages on those breaches. Mine are stylized as lack of good faith and fair dealing, in that all those breaches were a means to seize property and not the purpose of the mortgage. IE, there was no consideration, they didn't want a "performing loan" and avoided the opportunity when they had it by properly processing HAMP and without adding in certain forced choices and fraud fees on balances, etc. Yes, "we don't want your money we want your house!" Explains why they keep rolling fees into principal, doesn't it.
 

Survivor_IN

LoanSafe Member
Also, I saw someone that the 3 yr recission is not in stone. You can rescind a contract as part of a defense to a contract independent of TILA.
 

isisis

LoanSafe Member
I definitely have a breach of contract, that is obvious, loss mitigation was not performed which means the debt should have never been accelerated, on top of that sending the loan to the DASP program while in loss mitigation violated the terms of the contract. The issue with the breach of contract is the restitution. I definitely have monetary damages in the wrongfully placed fees and fines and interest, my cost to legally defend, and anything else compensatory. Then there is the issue of the note and mortgage. Should it go back to the FHA, should it go back to Wells, should there be a recession, what special performance should be done?

Then there is the possible independent tort actions by Wells in carrying out the actual foreclosure and sale of the note to DASP. There was willful fraud and deceit by Wells to the court (several times) which I relied upon. Creating a situation of extrinsic fraud, and denying me an opportunity to be heard in court (by selling the note in the middle of the foreclosure to get out of defending it).
A breach of the loan contract itself means the loan papers you signed. Unless your mortgage papers mention loss mitigation then failing to provide it isn't specifically a breach but your loan is FHA? If they are required by law to consider you for loss mitigation and failed to then you could claim it breached the section in your mortgage that states that it's governed by Applicable Law.

If you have a claim for breach include your loan papers with your complaint and reference the Section of the contract that creates the obligation.

Mortgages and deeds of trust were written by the banks and they hardly refer to our rights; they're there but you have to look for them. Some are express such as overcharging or referenced procedure requirements though they may not be sufficiently material as to have much force.

However, often when a mortgage gives the lender a right it implicitly provides a corresponding right to us. The right to attorneys fees is a good example but my favorite is Section One, the one that requires making monthly payments. It sounds like it only refers to our obligation but it implicitly requires their acceptance and non-hindrance of payments, it's called a constructive condition. Then if the lender does something to hinder payments - as they are wont to do - the
condition requiring payments doesn't come due until the hindrance is cured. Technicality, that is. This is well settled contract law, I just haven't seen it applied in foreclosure. No, it's been used (effectively) in breach of the covenant and promissory estoppel, just haven't seen it applied in breach of the DOT but I expect to find out.

Restitution is a complicated and often misunderstood term, even scholars can't agree on its definition and application. It's associated with contract law but kind of its own animal as well and sometimes synonymous with unjust enrichment. In what context are you using it?
 

arrgy

LoanSafe Member
Interesting idea on the hinderance of payments. I have to think about it.

I have a 35 page complaint, a good friend of mine is a lawyer in another state who looked it over and offered some advice.
First advice He suggested that I try to keep it in state court, cases have a tendency to disappear in Federal Court. My state allows for tort claims in breach of contract issues and allows for punitive damages as well, which is not something you would really find in a contract case.
20 pages lay out the facts. 2 pages deal with the DASP program. He suggested and I wrote 2 pages dealing with the end goal of Wells Fargo, and my interpretation of what Wells did..to delay foreclosure in order to collect the insurance premium at my expense.

I have 3 defendants: Wells, the law firm that represented Wells, and the FHA. About 10 pages dealing with causes of action most of which are against Wells: Breach of Contract, Breach accompanied by a Fraudulent Act, Extrinsic Fraud (which normally is a defense but in my state can be a tort action), negligent misrepresentation, fraud upon the court (against the law firm, this is normally a defense, but can be used in a tort action), unjust enrichment, fraudulent concealment, negligence (FHA), and violation of my state's unfair trade practices act. It would be hard to bring in statutory stuff since I am not so sure about the SOL.

One problem I will run into my lawyer friend stated was the FHA's stubborn stance that they aren't a party to any of the contracts, since I never signed anything with the FHA, just with the Lender. This has been constantly upheld in other cases, it was even upheld in a class action DASP lawsuit. Lawyers were arguing that since borrowers were paying into the insurance system there is an unwritten agreement with the FHA, judges have found ways of shooting this down. The other argument made by HUD is that they have no interest in these mortgages, we all know that is a lie.

Going over all of my closing documents I found HUD form 92900-A which I needed to complete and sign before even getting the loan. A section of the form reads " The Mortgagee in this transaction, its agents and assigns, as well as the Federal Government, its agencies, agents and assigns are authorized to take any and all of the following actions in the event loan payments become delinquent on the mortgage loan... All of these actions may be used to recover any debts owed when it is determined to be in the interest of the Mortgagee or Federal Government, or both. " My lawyer friend said he never heard of anyone using this, but if it is part of the documents you signed for closing, it could legally and expressly bind the Federal Government as a third party in a contract, AND it establishes that the FHA has an interest in the loan.

You are right the relief aspect of this is difficult and I am not good at it. Actual and/or compensatory damages are a given. Punitive damages are a given. I could request relief based on damages incurred from a broken chain of assignments and clouded title. There is definitely emotional stress of dealing with this for 11 years. But what else?

And then what about non monetary relief with regards to the note and mortgage? The note and debt is now owned by a completely new entity, and the new entity already got a judgment against me. I don't think, even if I wanted to, that I can request that court declare the DASP sale void, and the new entity return the note to the FHA or even Wells. But now I have an issue of a clouded title and an obvious broken chain of assignments. Keep in mind I already have a judgment against me on this debt, could you imagine if this same court or a Federal court declared the DASP sale void, what would that do to the foreclosure case that is going to appeal?
 

isisis

LoanSafe Member
Contract damages are supposed to put you on the position you would have been in if it had been performed by both parties. The formula used in the first Restatement of Contracts § 329

Damages are measured as "the net amount of the losses caused and gains prevented by the defendant's breach, in excess of savings made possible."

Losses caused

Foreclosure charges and fees with the interest earned.
Legal fees and court costs (not allowed in contract but in the mortgage itself)
Credit damage based on refinancing the balance at the current interest rate compared to the applicable interest rate with the my abysmal credit due to foreclosure.
Pain and suffering due to unfair and abusive debt collection practices under the FDCPA.

Gains prevented

Lost earnings due to the time consuming effort required to prevent a wrongful foreclosure.

High interest payments because I was prevented from exercising my right to refinance into affordable terms, calculated by the difference in total payments using the interest rate at the time they initiate foreclosure.

Totaled all of those except foreclosure charges because that's prospective damage.

Then for savings made possible I totaled the intervening payments.

The figure I ended up with was nearly double the missed payments and what was left more than paid off the remaining loan balance. And all the figures I used were either actual or lowball.

I expect don't expect that to happen but it felt good.
 

Survivor_IN

LoanSafe Member
Weird how when you run they numbers, they owe you more than you owe them! If you ask me, that's a claim for punitive. I'm leaving that figure open and filing it under "any other relief the court deems just." This also includes equitable relief of an injunction (against foreclosure/sale) or an outright dismissal. At this point, in my case, any dismissal is permanent due to SOL.
 

isisis

LoanSafe Member
No darlin, I don't want to break my heart again.

You know all those videos I used to send of Jack & the bubble wrap. Lost em all.......
You know a broken heart just means you're alive. We're meant to love and have our hearts broken over and over again.
Let me see if I can find the videos.
 

ellaroot

LoanSafe Member
Dogs are another way God lets us know he's watching over us. After all, dog is god spelled backwards.
 

arrgy

LoanSafe Member
My case gets weirder and weirder. My claim against Wells is basically that they delayed my foreclosure and sold my loan in the DASP program while I was still in loss mitigation. I of course was never informed, the court was never informed, I acted on the belief I was getting an FHA mod, I still had FHA insurance, etc. Had I known the truth, I would have never signed a mod agreement, never accepted the order of the court and insisted my defenses be heard, etc. So I have a complaint against Wells for breach of contract (improperly accelerating the note before we even got to foreclosure) and then all the tort complaints as a result once the note was accelerated.
I also brought the FHA in this, and sued them for negligence. They should have some system in place to check that the info WF gave them was correct. WF kept telling HUD that I refused to participate in loss mitigation, which I can prove isn't true. My local court even stated that I was still in loss mitigation.

Now for my twist...A lawyer family member told me to drop the negligence and anything I have against the FHA, it will never work. I will never prove that the FHA has a responsibility to me to make sure what WF stated was true, I would definitely lose on appeal.

However, I can sue WF in Qui Tam or under the Federal False Claim act as an agent for the FHA. WF got paid almost $200K for my home, based on all of the false information they provided (mainly all the times they told the FHA that I refused loss mitigation.) If WF told the FHA the truth, that I was still in loss mitigation when my loan was sent to DASP, then my loan would have never have been assigned to HUD or to the 601 program. I don't even need to show that I was harmed, and relief is automatic, all that has to be shown is the fraud and the payment made by the government. The government gives the whistle blower up to 30% of triple what the claim was.
The other part is, I can also continue my action against WF in state court, since that action is separate. My causes of action in state court is that I was harmed as a result of the lie they told during the judicial proceeding. I can use the evidence that WF lied to the FHA for the fraudulent misrepresentation, but I could never successfully state a claim on it.
 

moretrouble

LoanSafe Member
I think your family atty is on the right track. You would not want the Fed against you, on the contrary, you want the Fed to be on your side. That is my strategy. You want to show how the crooked banks/debt collectors (so-called investors) defrauded the government, the taxpayers using our loans, they themselves not only have not suffered any damage but made out like bandits. The problem with Qui Tam and False Claim act is to find a competent attorney willing to go against the banks/ the big money and their judges. Forget about state court, these judges collecting salaries from their constituents but letting the crooks steal your homes, based on my experience.
 
Top