Our Military Is Protected from Foreclosure under The Servicemen Act (SCRA)


We have been approached by few military families whose home were foreclosed while the owner were performing military services overseas. This is very painful, but unfortunately, it has been done and the homes were foreclosed in clear violation of the SCRA. In one case, our law office helped getting back garnished wages of a police officer back. Two mortgage servicing companies have agreed to settle federal complaints that they wrongfully foreclosed on the homes of at least 178 military service members and to set aside a minimum of $22 million to compensate those victims. This is a great victory for the Justice Department that various lenders had settled such cases. The lenders include, of course the notorious one i.e Countrywide Home Loan Servicing and Saxon Mortgage Services. These companies knowingly and repeatedly violated the Service members Civil Relief Act, a federal law that extends an array of financial and legal protections to military personnel. The former Countrywide unit agreed to pay $20 million to approximately 160 victims of illegal foreclosures from January 2006 to May 2009. It also agreed to reimburse victims of any other illegal military foreclosures found to have occurred from May 2009 to the end of last year.
NY Times has posted one such painful story of Sgt. James B. Hourley who was away on war duties in Iraq. In violation of a law intended to protect active military personnel from creditors, agents of Deutsche Bank foreclosed on his small Michigan house, forcing Sergeant Hurley’s wife, Brandie, and her two young children to move out and find shelter elsewhere.

“When the sergeant returned in December 2005, he drove past the densely wooded riverfront property outside Hartford, Mich. The peaceful little home was still there — winter birds still darted over the gazebo he had built near the water’s edge — but it almost certainly would never be his again. Less than two months before his return from the war, the bank’s agents sold the property to a buyer in Chicago for $76,000. Since then, Sergeant Hurley has been on an odyssey through the legal system, with little hope of a happy ending — indeed, the foreclosure that cost him his home may also cost him his marriage. ”Brandie took this very badly,” said Sergeant Hurley, 45, a plainspoken man who was disabled in Iraq and is now unemployed. ”We’re trying to piece it together.”

“In March 2009, a federal judge ruled that the bank’s foreclosure in 2004 violated federal law but the battle did not end there for Sergeant Hurley. Typically, banks respond quickly to public reports of errors affecting military families. But today, more than six years after the illegal foreclosure, Deutsche Bank Trust Company and its primary co-defendant, a Morgan Stanley subsidiary called Saxon Mortgage Services, are still in court disputing whether Sergeant Hurley is owed significant damages. Exhibits show that at least 100 other military mortgages are being serviced for Deutsche Bank, but it is not clear whether other service members have been affected by the policy that resulted in the Hurley foreclosure.”

In court papers, lawyers for Saxon and the bank assert the sergeant is entitled to recover no more than the fair market value of his lost home. His lawyers argue that the defendants should pay much more than that — including an award of punitive damages to deter big lenders from future violations of the law. The law is called the Service members Civil Relief Act, and it protects service members on active duty from many of the legal consequences of their forced absence.

We suggest as a foreclosure defense attorney, and working in this field for long time, we encourage any military family (living in Nevada) to ask our free legal help in this regard. We would not charge any money upfront from any such familiy AND EVEN ADVANCE COURT COST, if they have meritorious case while their loved one were performing military services overseas. Call us at (702) 270-9100 and even get a free consultation over the phone.

What is gonna happen with trial loan modifications


This is an interesting article and the writer is skeptical about the future of 650,000 or more trial loan modifications. There are some very interesting points raised by the author. The trial loan modification process is slow and cumbersome. However, it builds hope for homeowners. Banks are taking lots of time in completing this process.

http://www.nytimes.com/2009/12/04/business/economy/04norris.html?_r=1&sq=&st=nyt&scp=2&pagewanted=print

Housing Market–Is It Recovering?


Much forecast has been made by pundits of all sorts on the housing market. I wish the statistics could have been otherwise. However, the latest trends and data is proving it otherwise. It was few weeks ago Moody report which said that it would take 10 years for the housing market to fully recover. Following is another news item supporting this doom and gloom scenario.

http://www.lvrj.com/business/housing-recovery-isnt-as-close-to-reality-as-some-statistics-suggest-63955137.html

Details of Obama Plan’s Underwriting Guidelines


July 30, 2009 MORTGAGEE LETTER 2009-23

TO: ALL APPROVED MORTGAGEES
SUBJECT: Making Home Affordable Program:
FHA’s Home Affordable Modification Loss Mitigation Option

On May 20, 2009, the President signed the “Helping Families Save Their Homes Act of 2009.” This new law provides the Federal Housing Administration (FHA) with additional loss mitigation authority to assist FHA mortgagors under the Making Home Affordable Program (MHA). The MHA Program is designed to help homeowners retain their homes and to prevent the destructive impact of foreclosures on families and communities.

One key component of MHA provides homeowners the opportunity to reduce their mortgage payments by the use of a loan modification through the Home Affordable Modification Program. When initially introduced to the public, MHA excluded FHA insured mortgages, stating that FHA would develop its own standalone program. This Mortgagee Letter announces a new FHA Loss Mitigation option, the FHA-Home Affordable Modification Program (FHA-HAMP). FHA-HAMP will provide homeowners in default a greater opportunity to reduce their mortgage payments to a sustainable level. This Mortgagee Letter is effective August 15, 2009.

Basic Program Guidelines
The new FHA-HAMP authority will allow the use of a partial claim up to 30 percent of the unpaid principal balance as of the date of default combined with a loan modification. The objective of FHA-HAMP is to assist FHA mortgagors who are in default to modify their mortgage to an affordable payment. According to Mortgagee Letter 2000-05 and subsequent guidance, disposition options (pre-foreclosure sales and deeds-in lieu of foreclosure) are available immediately upon default, if the cause of the default is incurable, i.e. the borrower has no realistic opportunity to replace the lost income or reduce expenses sufficiently to meet the mortgage obligation.

To confirm if the mortgagor is capable of making the new FHA-HAMP payment, the mortgagor must successfully complete a trial payment plan. The trial payment plan shall be for a three month period and the mortgagor must make each scheduled payment on time. The mortgagor’s monthly payment required during the trial payment plan must be the amount of the future modified mortgage payment. The Mortgagee must service the mortgage during the trial period in the same manner as it would service a mortgage in forbearance. If the mortgagor does not successfully complete the trial payment plan by making the three payments on time, the mortgagor is no longer eligible for FHA-HAMP. Prior to proceeding to foreclosure, the Mortgagee must re-examine and re-evaluate the borrower’s financial condition and confirm that none of FHA’s other Loss Mitigation options could assist the mortgagor.

The attachment to this Mortgage Letter supplements program guidelines for FHA-HAMP, including a requirement that the servicer obtain an executed Hardship Affidavit (available at https://www.hmpadmin.com/portal/docs/mod_docs/hamphardshipaffidavit.pdf) from every mortgagor and co-mortgagor seeking an FHA-HAMP. FHA-HAMP is a permanent addition to HUD’s Loss Mitigation Program as of the date of this Mortgagee Letter.

Debt to Income Ratios
To be eligible under FHA-HAMP, the front end debt to income ratio must be as close as possible, but not less than, 31 percent. This ratio is defined as the total monthly mortgage payment (PITI) for the modified mortgage divided by the mortgagor’s gross monthly income (the “Front End Ratio”). The back end debt to income ratio must not exceed 55 percent and is defined as the total monthly mortgage payment plus all recurring monthly debt divided by the mortgagor’s gross monthly income (the “Back End Ratio”). Please refer to the sections in the Attachment regarding Underwriting – Front End and Back End Debt to Income Ratios.

Calculation of Maximum Partial Claim Amount under FHA-HAMP
The maximum partial claim amount under FHA-HAMP consists of the sum of (i) arrearages, (ii) legal fees and foreclosure costs related to a canceled foreclosure action and (iii) principal reduction. Arrearages that may be included in the partial claim shall not exceed 12 months of PITI. The maximum partial claim amount under FHA-HAMP is 30 percent of the outstanding principal balance as of the date of default. The principal deferment on the modified mortgage is determined by multiplying the outstanding principal balance by 30 percent and then reducing that amount by arrearages advanced to cure the default for up to 12 months PITI, and any foreclosure costs incurred to that point subject to the requirements provided in Mortgagee Letter 2008-21. The principal deferment amount for a specific case shall be limited to such an amount that will bring the mortgagor(s) total monthly mortgage payment to 31 percent of gross monthly income.

Example

Mortgagor had a reduction of income and is delinquent 3 full mortgage payments. The unpaid principal balance on the mortgage on the date of default is $150,000 and the monthly payment is $1,220 (consisting of P&I of $920 and escrows, including MIP, of $300). The financial analysis reveals that the mortgagor’s gross monthly income is $3,500 and the total monthly other recurring debt payments are $800.

In order to fulfill the 31% Front End Ratio requirement, the mortgagor(s) total monthly mortgage payment would have to be reduced to $1,085 ($3,500 x 31%). Therefore, P&I would have to be reduced to $785 ($1,085 total monthly mortgage payment less $300 escrow and MIP). Assuming that the loan modification will have an interest rate of 6% and a P&I of $785, the new mortgage amount would have to be $130,931, resulting in a principal reduction of $19,069 ($150,000 unpaid principal balance less $130,931). In this example, the mortgagor’s Back End ratio is 53.9% ($1,885/$3,500), which satisfies the 55% Back End Ratio limitation.

In this example, the maximum principal deferment is $41,340 (30% of $150,000, less the $3,660 delinquency, or $45,000 – $3,660). However, based on their gross income, mortgagor is eligible only for a principal deferment of $19,069 plus $3,660 arrearages (which would include any foreclosure costs incurred to that point, in accord with Mortgagee Letter 2008-21) for the total Partial Claim of $22,729.

Requirements to Use FHA-HAMP

FHA-HAMP can be utilized only if the mortgagor(s) does not qualify for current loss mitigation home retention options (priority order FHA Special Forbearance, Loan Modification and Partial Claim) under existing guidelines (ML 2008-21, 2003-19, 2002-17, 2000-05). To qualify for the FHA-HAMP program, Mortgagees must evaluate the defaulted mortgage for loss mitigation actions using the aforementioned priority order. According to Mortgagee Letter 2000-05 and subsequent guidance, disposition options (pre-foreclosure sales and deeds-in lieu of foreclosure) are available immediately upon default, if the cause of the default is incurable, i.e. the borrower has no realistic opportunity to replace the lost income or reduce expenses sufficiently to meet the mortgage obligation.

If the mortgagor does not successfully execute the loan modification, the mortgagor is no longer eligible for FHA-HAMP. In such cases, per 24 CFR 203.355, the Mortgagee must re-evaluate the mortgagor’s eligibility for the other appropriate loss mitigation actions prior to commencing or continuing a foreclosure.

Mortgagee Incentives
Mortgagees that utilize FHA-HAMP are eligible to receive incentive payments. Mortgagees utilizing this initiative will be allowed to first file for a partial claim (to bring the loan current and defer principal where appropriate), followed by a loan modification claim (claim type 32). Under FHA-HAMP, the Mortgagee may receive an incentive fee of up to $1,250. This total includes $500 for the partial claim and $750 for the loan modification. Mortgagees may also claim up to $250 for reimbursement for a title search and/or recording fees.

Partial Claim Filing and Document Delivery

Mortgagees must file a claim for insurance benefits for the partial claim within the 60-day timeframe stated in ML 2003-19 to receive incentive fees for the FHA-HAMP loss mitigation action. Any previous outstanding partial claim(s) must be subordinated and the mortgage company must provide HUD’s Secretary-Held servicing contractor (see ‘Remittance’ below) with a subordination agreement to request subordination.

Monitoring
FHA will monitor Mortgagees for compliance with the terms of this Mortgagee Letter and will take administrative actions, including sanctions and penalties, against all parties for non-compliance.

Remittance

Please note that all provisions described in the aforementioned existing guidelines, such as Repayment Terms, Option Failure and Disclosures apply also, except as specifically changed under FHA-HAMP.

Mortgagees must forward all required documentation, including subordination requests, and advise all parties to send any payments for the Partial Claims to HUD’s Secretary-Held Assets Servicing Contractor which is currently located at:

C&L Service Corp. / Morris-Griffin Corp.
2488 East 81st Street, Suite 700
Tulsa, Oklahoma 74137

Toll Free Phone: (866) 377-8667 Toll Free Fax: (866) 249-0626
Local: (918) 551-5300 Local Fax: (918) 551-5399

Current information about the Secretary-Held Assets Servicing Contractor is located at:

http://www.hud.gov/offices/hsg/sfh/nsc/fmaddr.cfm

Information Collection Requirement

The information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control numbers 2502-0060, 2502-0523, 2502-0429, and 1505-0216. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB Control Number.

Any questions regarding this Mortgagee Letter may be directed to HUD’s National Servicing Center (NSC) at 888-297-8685 or hsg-lossmit@hud.gov. Persons with hearing or speech impairments may reach this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).

Sincerely,

David Stevens
Assistant Secretary for Housing – Federal Housing Commissioner

Attachment – Guidelines for FHA-HAMP

Nevada Deceptive Trade Practices


Everyday many homeowners are coming to my office, seeking help from the predators who had made them victims in various ways; by promising them to lower their debts; by promising them to restructure their debts; by promising to lower their interest and principal. I have heard innumerable heart broken stories. In this posting, I would highlight some of the laws which are enforceable in Nevada statute books and can be used to catch these criminals. Again, it is advisable to seek a qualified and licensed attorney in addressing your particular issues.
Most of these deceptive trade laws are contained in NRS 598.741
1. “Buyer” means a natural person who is solicited to purchase or who purchases the services of an organization which provides credit services.
2. “Commissioner” means the Commissioner of Consumer Affairs.
3. “Division” means the Consumer Affairs Division of the Department of Business and Industry.
4. “Extension of credit” means the right to defer payment of debt or to incur debt and defer its payment, offered or granted primarily for personal, family or household purposes.
5. “Organization”:
(a) Means a person who, with respect to the extension of credit by others, sells, provides or performs, or represents that he can or will sell, provide or perform, any of the following services, in return for the payment of money or other valuable consideration:
(1) Improving a buyer’s credit record, history or rating.
(2) Obtaining an extension of credit for a buyer.
(3) Providing counseling or assistance to a person in establishing or effecting a plan for the payment of his indebtedness, unless that counseling or assistance is provided by and is within the scope of the authorized practice of a debt adjuster licensed pursuant to chapter 676 of NRS.
(4) Providing advice or assistance to a buyer with regard to subparagraph (1) or (2).
(b) Does not include: [As you can see, only licensed attorneys should modify, restructure a loan or do any credit advice] (1) A person organized, chartered or holding a license or authorization certificate to make loans or extensions of credit pursuant to the laws of this state or the United States who is subject to regulation and supervision by an officer or agency of this state or the United States.
(2) A bank, credit union or savings and loan institution whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund or a private insurer approved pursuant to NRS 678.755.
(3) A person licensed as a real estate broker by this state where the person is acting within the course and scope of that license, unless the person is rendering those services in the course and scope of employment by or other affiliation with an organization.
(4) A person licensed to practice law in this state where the person renders services within the course and scope of his practice as an attorney at law, unless the person is rendering those services in the course and scope of employment by or other affiliation with an organization.
(5) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission where the broker-dealer is acting within the course and scope of such regulation.
(6) A person licensed as a debt adjuster pursuant to chapter 676 of NRS.
(7) A reporting agency.
6. “Reporting agency” means a person who, for fees, dues or on a cooperative nonprofit basis, regularly engages in whole or in part in the business of assembling or evaluating information regarding the credit of or other information regarding consumers to furnish consumer reports to third parties, regardless of the means or facility of commerce used to prepare or furnish the consumer reports. The term does not include:
(a) A person solely for the reason that he conveys a decision regarding whether to guarantee a check in response to a request by a third party;
(b) A person who obtains or creates a consumer report and provides the report or information contained in it to a subsidiary or affiliate; or
(c) A person licensed pursuant to chapter 463 of NRS.
Section NRS 598.746 deals with Prohibited acts: Receiving money before complete performance; receiving money for referral to provider of credit; misleading statements; other fraudulent or deceptive acts. An organization and its agents, employees and representatives who sell or attempt to sell the services of the organization, shall not:
1. Charge or receive any money or other valuable consideration before full and complete performance of the services the organization has agreed to perform for or on behalf of the buyer.
2. Charge or receive any money or other valuable consideration solely for referral of the buyer to a retail seller who will or may extend credit to the buyer, if the credit which is or will be extended to the buyer is upon substantially the same terms as those available to the general public.
3. Make, counsel or advise any buyer to make, any statement which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, to a consumer credit reporting agency or to any person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit, with respect to a buyer’s creditworthiness, credit standing or credit capacity.
4. Make or use any untrue or misleading representations in the offer or sale of the services of an organization. For the purposes of this subsection, a “misleading representation” includes a guarantee that:
(a) The organization is able to remove information that is adverse to the buyer’s ability to obtain credit from the buyer’s credit record, history or rating.
(b) The organization is able to obtain an extension of credit for the buyer regardless of the buyer’s existing credit record, history or rating.
5. Engage, directly or indirectly, in any act, practice or course of business which operates or would operate as a fraud or deception upon any person in connection with the offer or sale of the services of an organization.
6. Remove, or assist or advise the buyer to remove from the buyer’s credit record, history or rating, information that is adverse to the buyer’s ability to obtain credit if the information is accurate and not obsolete.
7. Create, or assist or advise the buyer to create a new credit record, history or rating by using a different name, address, social security number, employee identification number or other misleading information.
8. Attempt to transfer or assign the organization’s certificate of registration.
9. Submit a buyer’s dispute to a consumer credit reporting agency without the buyer’s knowledge.
10. Call, or authorize any other person who is not the buyer to call a consumer credit reporting agency and portray himself as the buyer.

NRS 598.752 Organization to register and deposit security before advertising services or conducting business in this State; separate security not required from salesperson, agent or representative of organization; regulations.
1. Before advertising its services or conducting business in this State, an organization must register pursuant to NRS 598.721 and deposit security in the amount of $100,000 with the Division pursuant to NRS 598.726. The security must be conditioned on compliance by the organization with the provisions of NRS 598.746 to 598.772, inclusive, and the terms of its contracts with buyers.

2. If an organization has deposited the required security, a salesperson, agent or representative of the organization who sells its services is not required to deposit his own separate security. For the purposes of this subsection, a person is a salesman, agent or representative of an organization if:

(a) He does business under the same name as the organization; or

(b) The organization and the issuer of the security certify in writing that the security covers the salesperson, agent or representative.

3. The Division shall adopt such regulations as it deems necessary to carry out the provisions of this section.

NRS 598.757 Organization to provide buyer certain information in writing.
1. Before the execution of a contract between the buyer and an organization or before the receipt by the organization of any money or other valuable consideration, whichever occurs first, the organization must provide to the buyer, in writing:
(a) A statement:
(1) That the buyer has a right pursuant to 15 U.S.C. §§ 1681g and 1681h to receive disclosure of all information, except medical information, in any file on him maintained by a consumer credit reporting agency;
(2) That 15 U.S.C. § 1681j requires that this disclosure be made free to the buyer if he requests it within 30 days after receipt of notice of a denial of credit;
(3) Of the approximate cost to the buyer of receiving this disclosure when there has not been a denial of credit; and
(4) That the buyer has the right pursuant to 15 U.S.C. § 1681i to dispute the completeness or accuracy of any item contained in any file on him maintained by any consumer credit reporting agency.
(b) A detailed description of the services to be performed by the organization for the buyer and the total amount the buyer will become obligated to pay for the services.
(c) A statement that the buyer has a right to proceed against the security deposited with the Division by the organization under the circumstances and in the manner set forth in NRS 598.731 and 598.736. The statement provided pursuant to this paragraph must include the name and address of the issuer of the security.
(d) A statement that the buyer may cancel a contract for the services of an organization within 5 days after its execution by written notice mailed or delivered to the organization.
(e) A statement identifying the availability of any nonprofit association which provides services similar to those offered by the organization. The statement provided pursuant to this paragraph must include the association’s telephone number, including the association’s national toll-free telephone number, if any.
2. The written information provided pursuant to subsection 1 must be printed in at least 10-point bold type and must include the following statement or a similar statement approved by the Division:
RIGHTS OF CONSUMERS REGARDING CREDIT FILES
PURSUANT TO STATE AND FEDERAL LAW

You have the right to obtain a copy of your credit file from a consumer credit reporting agency. There is no fee if, within the past 30 days, you have been turned down for credit, employment or insurance because of information in your credit report. The consumer credit reporting agency is obligated to provide someone to help you interpret the information in your credit file.

You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit service organization has the right to have accurate, current and verifiable information removed from your credit report. Generally, under the Fair Credit Reporting Act, the consumer credit reporting agency is obligated to remove accurate, negative information from your report only if it is more than 7 years old and bankruptcy information can be reported for 10 years. If you have notified a credit reporting agency that you dispute the accuracy of information in your credit file, the consumer credit reporting agency is obligated to make an investigation and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any relevant information and copies of all documents you have concerning the disputed information should be given to the consumer credit reporting agency. If the investigation does not resolve the dispute to your satisfaction, you may send a brief statement to the consumer credit reporting agency to keep in your credit file, explaining why you think the information in the credit file is inaccurate. The consumer credit reporting agency is obligated to include your statement or a summary of your statement about disputed information in any report it issues about you.

RIGHTS OF CONSUMERS REGARDING
CANCELLATION OF A CONTRACT

You have a right to give written notice of your intent to cancel a contract with a credit service organization for any reason within 5 working days from the date you signed it. If for any reason you do cancel a contract during this time, you do not owe any money. You have a right to sue a credit service organization if it misleads you.
3. The organization shall retain a copy of the written information it provides pursuant to the requirements of subsections 1 and 2 for not less than 2 years.

NRS 598.762 Requirements of contract for purchase of services; copy of contract must be retained by organization.
1. A contract between a buyer and an organization for the purchase of the services of the organization:
(a) Must be in writing;
(b) Must be signed by the buyer;
(c) Must be dated; and
(d) Must clearly indicate above the signature line that the buyer may cancel the contract within 5 days after its execution by giving written notice to the organization of his intent to cancel the contract. If the notice is mailed, it must be postmarked not later than 5 days after the execution of the contract.
2. A copy of each contract executed by a buyer and an organization must be retained by the organization for not less than 2 years.

NRS 598.767 Organization to maintain registered agent for service of legal process. An organization shall file with the Division the information required pursuant to NRS 77.310 and continuously maintain a registered agent for service of legal process.

NRS 598.772 Waiver of statutory rights prohibited; burden of proof upon person claiming exemption or exception from definition.

1. Any waiver by a buyer of the provisions of NRS 598.746 to 598.777, inclusive, is contrary to public policy and is void and unenforceable. Any attempt by an organization to have a buyer waive rights given by NRS 598.746 to 598.777, inclusive, is unlawful.

2. In any proceeding involving NRS 598.741 to 598.787, inclusive, the burden of proving an exemption or an exception from a definition is upon the person claiming it.

(Added to NRS by 1987, 1520; A 1993, 2277)—(Substituted in revision for NRS 598.286)

NRS 598.777 Buyer’s action for recovery of damages or injunctive relief; attorney’s fees; punitive damages. A buyer injured by a violation of NRS 598.746 to 598.772, inclusive, or by a breach by an organization of a contract subject to those sections, may bring an action for recovery of damages, for injunctive relief or for both recovery of damages and injunctive relief. Judgment for damages must be entered for actual damages, but in no case less than the amount paid by the buyer to the organization, plus reasonable attorney’s fees and costs. If the court deems it proper, the court may award punitive damages.

(Added to NRS by 1987, 1520; A 1993, 2277)—(Substituted in revision for NRS 598.287)

NRS 598.782 Criminal penalty.
1. Except as otherwise provided in subsection 2, a person who violates any provision of NRS 598.746 to 598.772, inclusive, is guilty of a misdemeanor.
2. A person who breaches a contract subject to NRS 598.746 to 598.772, inclusive, is not guilty of a misdemeanor solely because of the breach.
NRS 598.787 Provisions and remedies not exclusive; violation constitutes deceptive trade practice.
1. The provisions of NRS 598.746 to 598.777, inclusive, are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with any other applicable provision of law.
2. The remedies provided in NRS 598.772 and 598.777 for violation of any provision of NRS 598.746 to 598.772, inclusive, are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.
3. Any violation of NRS 598.746 to 598.772, inclusive, constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.

NRS 598.900 Untrue or misleading statements by organization prohibited; effect on contract. An organization shall not make any untrue or misleading representations to the buyer or in its advertising. A contract for membership in an organization where any untrue or misleading representation was made to the buyer or the buyer was made aware of the untrue or misleading representation is void and unenforceable by the organization.

NRS 598.905 Correction of violations. If an organization does not comply with the provisions of NRS 598.840 to 598.895, inclusive, or 598.905 to 598.930, inclusive, the buyer may agree in writing, after a full disclosure, to any correction of the defect if the correction is made within 30 days after he signs the contract for membership in the organization. If the buyer does not consent, or if the correction is not made within the 30-day period, the contract is rescinded, and the buyer must be given a full refund.

NRS 598.910 Effect of transfer by organization of its obligation to provide goods or services; circumstances under which buyer may rescind contract.

1. If an organization transfers its obligation to provide goods or services to a buyer to another organization which provides substantially fewer goods or services, the buyer may consent to the transfer in writing after a full disclosure to him of the goods and services to be provided by the new organization. If a buyer does not consent, his contract is rescinded, and he must be given a refund pro rata based on the amount of time he was a member of the organization.

2. The buyer may rescind the contract and the organization shall give him a refund pro rata based on the amount of time he was a member of the organization if any of the following circumstances occur:

(a) Except as otherwise provided in this paragraph, the organization moves its place of business which is geographically closest to the buyer’s residence, as indicated in the contract, more than 20 miles farther from the buyer’s residence than it was when the contract for membership was signed. The provisions of this paragraph do not apply if:

(1) The organization offers the buyer a substantially equivalent at-home ordering service through at least one other generally available channel of communication, including, without limitation, the Internet;

(2) The at-home ordering service offers the same categories of goods and services provided by the organization at the time the organization moves its place of business; and

(3) Any goods ordered by the buyer through the at-home ordering service are shipped, at the election of the buyer, to either the buyer’s residence, as indicated in the contract, or a freight receiver within 20 miles of that residence.

(b) Within 6 months after the contract for membership was signed, the organization stops providing any category of goods or services represented to the buyer to be available when he signed the contract.

NRS 598.915 Waiver of statutory rights is void. Any waiver by the buyer of the provisions of NRS 598.840 to 598.930, inclusive, is contrary to public policy and void.
NRS 598.920 Actions against organization; restitution, treble damages, attorney’s fees and costs may be awarded.
1. A cause of action or a defense of a buyer against the organization is not extinguished by the transfer, assignment or sale of the contract for membership in the organization to a third party.

2. In an action by a buyer against an organization for violation of the provisions of NRS 598.840 to 598.930, inclusive, the court may award restitution, treble damages, reasonable attorney’s fees and costs. If the course of action was based on a violation of NRS 598.900, the court may award the buyer $1,000, reasonable attorney’s fees and costs, or restitution, treble damages, reasonable attorney’s fees and costs, whichever is greater.

NRS 598.930 Remedies not exclusive; violation constitutes deceptive trade practice.
1. The remedies, duties and prohibitions of NRS 598.840 to 598.930, inclusive, are not exclusive and are in addition to any other remedies provided by law.

President of Mortgage Company Pled Guilty in Fraud


President Of Metropolitan Money Store Pleads Guilty In Over $35M Mortgage Fraud Scheme
Joy Jackson, 41, Fort Washington, Maryland, pleaded guilty to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme. The accused promised to help homeowners facing foreclosure to keep their homes and repair their damaged credit.

According to her plea agreement, Jackson was a licensed mortgage broker, but was not licensed to provide credit repair. In May 2005, Jackson and coconspirator Jennifer McCall incorporated Metropolitan Money Store, located in Lanham, Maryland, which offered foreclosure consultation and credit services to financially distressed homeowners. Also at that time, Jackson and other coconspirators incorporated Fordham & Fordham Investment Group, Ltd. (F&F) based in Lanham and Greenbelt, Maryland to assist Metropolitan Money Store in its foreclosure consulting and credit servicing business.

From September 2004 to June 2007, Jackson, McCall and others conspired to fraudulently promise to help homeowners, who had substantial equity in their homes but were facing foreclosure because of their inability to make monthly mortgage payments, avoid foreclosure and repair their damaged credit. The homeowners were directed to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a year, during which time Metropolitan Money Store promised to improve the homeowners’ credit ratings, help them obtain more favorable mortgages, and eventually return title to their homes to them. The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit. The straw buyers were paid up to $10,000 to participate in the scheme and allow the properties to be put in their names. Jackson also served as a straw buyer on several properties in Maryland.

Using the homeowners’ properties, the conspirators applied for mortgages to extract the maximum available equity from the homes, and prepared and submitted fraudulent loan applications to mortgage lenders to obtain inflated loans on the target properties in the straw buyers’ names. At settlements, the conspirators imposed numerous fees and required “seller contributions” which were far in excess of industry standards; they imposed fees for services which were not performed, disclosed or explained to the homeowners; and they transferred the sale proceeds out of the escrow accounts into the conspirators’ business and personal bank accounts and converted a substantial portion of those funds to their personal use.

In order to carry out the fraud scheme, Jackson and others obtained large cashier’s checks in the names of straw buyers and Metropolitan Money Store employees in order to conceal transactions from the lenders. Jackson misappropriated the license and bond numbers of other brokerage and credit repair companies and used them to broker loans and fraudulently improve homeowners’ credit scores by adding fictitious lines of credit to their credit histories.

During the conspiracy, Jackson and McCall provided a co-conspirator acting as a closing agent with more than $100,000 in kickback payments to process real estate closings quickly. Moreover, whenever Jackson requested, the closing agent permitted Metropolitan Money Store employees to close loans without him or any other closing agent being present. She directed others to prepare fraudulent settlement documents that contained false information. Jackson also paid bank employees to provide false income balances for straw buyers to lenders; add straw buyers and others onto accounts for lender verification purposes; transfer money into accounts to show a certain amount of money was in a bank account and thereafter return those funds to the original account; and shift money between Metropolitan Money Store and F&F accounts to facilitate loans in straw buyer’s names.

Finally, Jackson directed others to transfer the equity proceeds of homeowners into the general checking accounts of Metropolitan Money Store and F&F, as well as Jackson’s personal accounts. Jackson withdrew these funds and paid for goods and services for herself, including art, cars, clothing, credit card bills, homes, fur coats, furniture, airline trips, gambling expenses, jewelry, limousine services, student tuition and a luxury wedding for herself and a conspirator.

As a result of this scheme, the total loss attributable to Jackson, including the estimated losses to the mortgage lenders, is $16,880,884.86.

Jackson faces a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy. U.S. District Judge Roger W. Titus scheduled sentencing for November 16, 2009 at 9:00 a.m. As part of her plea, Jackson has agreed to pay restitution for the full amount of the victims’ losses, and forfeit three residential properties in Oxon Hill, Capitol Heights and Laurel, Maryland, and three vehicles.

Jackson is the seventh defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Jennifer McCall, 47, Ft. Washington, Maryland, a chief executive officer of Metropolitan Money Store and owner of JC and JC Investments LLC; Katisha Fordham, 35, Washington, D.C., a loan processor at the Metropolitan Money Store. Richard Allison, 37, Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, 47, Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland; Carlisha Dixon, 31, Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; and Chandra Jones, 31, Lanham, Maryland, the daughter of co-defendants Jennifer and Clifford McCall, each. pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison. Three defendants remain scheduled for trial on July 7, 2009.

United States Attorney for the District of Marylan. Rod J. Rosenstein made the announcement.

“Joy Jackson presided over a ‘money store’ that was in the business of ripping off homeowners and mortgage lenders by submitting fraudulent paperwork to support over $16 million of loans that were never intended to be repaid,” said U.S. Attorney Rod J. Rosenstein. “Instead of helping financially distressed homeowners keep their homes as promised, she secretly used their home equity to buy luxuries for herself, includin. furs, jewelry and over $800,000 on her wedding.”

“These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, and leave lenders burdened with bad loans,” stated C. Andre’ Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge. “IRS-CI is committed to pursuing individuals who create such havoc.”

United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation, U.S. Secret Service, Internal Revenue Service-Criminal Investigation and the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation Investigative Unit for their investigative work. Mr. Rosenstei. commended Assistant United States Attorneys James A. Crowell IV and Christen Sproule, who are prosecuting the case.