How to Use Loan Modification to Stop Foreclosure in Nevada?

How Loan Modification Can Be Used To Stop Foreclosure?

Foreclosure is on the rise in Nevada, and everyday scores of homes are foreclosed in Nevada through non-judicial foreclosure process. Remember, there are two kinds of foreclosure: Judicial and Non-judicial and Nevada is a non judicial foreclosure state. In this article, we like to discuss how to avoid an impending foreclosure by starting a loan modification request.

Rule No. 1: Open channels of communication with your bank. Call the Loss Mitigation, or Loan Modification number of your bank right away. Do not hesitate on this issue under any condition.

Rule No. 2: Find and give your financial information right away. Make sure you ask the bank if they have a package for financial information needed to be send to them. Download from their website and sent it to them on the given fax number. Make sure you get the right fax number from Loss Mitigation Department.

Rule No. 3. Tell your lender that you are a primary home owners and have no intention to let this property go to foreclosure.

Rule No. 4: Tell your lender that you have a great payment history.

Rule No. 5: Tell your lender your story, either on phone or via letter. Send a strong hardship letter to them.

Rule No. 6: Ask them again and again if they have received your documentation. If not, send them again.

Rule No. 6: No need to argue, or indulge in heated discussion. Talk on the same level as your representative. Most of these folks are hard working and eager to help. Their education level is slightly above the high school levels, and some of them have this job as the starter job in their career.

Rule No. 7: Do not lose temper under any condition.

Rule No. 8: Write a diary in a systematic way, and write down the name of the representative, name of the supervisors, and date and time.

Rule No. 9: It is hard for your lender to foreclose as well. They will lose half of the value of the home, and they are also trying their best to stop it.

Rule No. 10: Ask them again and again, if they want short sale if loan modification is not possible. A yes answer means more time, and meanwhile you can chalk out other strategy.

More Rules:

1. Make a diary of all the phone calls.

2. Write down the number and name of the person you spoke.

3. Make sure you ask them again, if they are from collection department. Basically, these collectors would give you the impression that they are from loan modification or workout department. They will waste your time by asking you idiotic questions which has no direct link with loss mitigation. At the end, they would try to collect money from you. Because they have no impact, on the overall scheme, and you probably have no money to pay them, so be polite and firm with them, and tell them if they can connect you to loss mitigation. Remember, again Countrywide, they have too many layers to trick you and too many phone number with recording devices.

4. This one bank, or servicer EMC. It is deceptive. Each time you call them, their recording device is full of none sense. Even the recording device tell you the waiting time is 9 minutes. If you call them in the middle of the night, the waiting time is still 9 minutes. Once I waited for about 25 minutes. This is the most crooked customer service. I wonder if someone would take notice of their deception.

5. Oh yeah, City–the mother of all deceptive trade practices. Citi had eaten up close to 70 billion dollar of bailout money, and has one of the horrible customer service. They once gave me a fax number which was busy, and I got at least 30 busy printout from my fax. They are hesitant to talk to attorneys for reasons well known to them. I wish and pray this bank is either nationalized or go bankrupt. I have no compassion for them and of course Countrywide.WaMU is still not a bad bank. Even though they were the most generous people in giving money to every undeserving person but at least their customer service is better than both City and Countrywide.

6. Lots of lenders has their website full of information, and there are some changes coming in their attitude. It is public pressure, and some Congress pressure collectively. Also, they have seen the writing on the wall. Basically, it is the crooked old leadership who was awash with bonuses and big paychecks, who was reluctant to bring any major changes. I say get rid of all these fossils of the past, and start with younger people in major decision making.

More later

Complete List of Your Loss Mitigations Lenders

It is difficult to reach your lender. They have built a Chinese wall around them, and at times they were successful. However, we are publishing the following list of your lenders which can be reached. Some telephone numbers may still be inaccessible. Please let us know so we can change them. Of course, the Law Office of Malik Ahmad continuously change these numbers, and update new numbers. Basically, numbers are the game. Let us give them back some.

Lender/Servicer Loss Mitigation Phone Numbers & Contact InformationABM AMRO Mortgage (800) 783-8900
Accredited Home Lenders(877) 683-4466AMC Mortgage Services (Also handles loans originated by Ameriquest and Argent) (800) 211-6926
1600 McConnor Parkway
Schaumburg, IL 60173
Web: Home Mortgage Corp.(877) 304-3100*Ameriquest Mortgage (Debt collection — see AMC Mortgage Services) (800) 211-6926Aurora Loan Services (Debt collection) (800) 550-0508
By Overnight Mail:
601 5th Avenue
Scottsbluff, NE 69361
Attn: Customer Service
By Regular Mail:
P.O. Box 1706
Scottsbluff, NE 69363
Web: icing%2fDefault.aspx

Avelo Mortgage LLC (866) 992-8356*Bank of America(800) 846-2222BB&T Mortgage (800) 827-3722*

AmTrust Bank (fka Ohio Savings Bank) (888) 696-4444

Beneficial (800) 333-5848

Central Pacific Bank (800) 342-8422*

Charter One (800) 234-6002

Chase (800) 446-8939
Chase Home Finance (800) 848-9136 (customer service) (858) 605-2181 (delinquency customer service)
Chase Home Finance-New Jersey(800) 446-8939*Chevy Chase Bank(800) 933-9100*

Chase Manhattan Mortgage
(800) 446-8939 (Ohio Servicing Center)
(800) 526-0072 (Florida Servicing Center)
(800) 527-3040 x533 (Florida Servicing Center) Chevy Chase Bank (800) 933-9100
Web: (Payment Addresses)Citi Financial Mortgage (800) 753-3673Citimortgage (800) 283-7918

Countrywide (800) 262-4218…t_login254.asp

Ditech (800) 852-0656 (800) 449-8582Downey Financial Corp.(800) 824-6902, ext. 6696Deutsche Bank National Call Number on Mortgage Statement

EMC 800-723-3004
P.O. Box 141358
Irving, TX 75014-1358
Web: (800) 669-7724 ext. 4730Equity One (Debt collection) (866) 361-3460

First Horizon Home Loans (800) 489-2966*

Fifth Third Bank (800) 375-1745 Option 3

First Merit Bank (888) 728-9931

Flagstar Bank (800) 968-7700, ext. 9780

Fremont Investment & Loan (866) 484-0291

GMAC Mortgage (800) 850-4622

GreenPoint Mortgage Funding (800) 784-5566, ext. 5383*

Green Tree (877) 816-9125

Homecomings Financial (800) 850-4622*

HomeEq Mortgage Servicing ( Debt collection) (866) 822-1471

Household Finance (A HSBC Co.) (800) 333-5848

Household Mortgage (800) 333-4489
Household Mortgage -(Is now called HSBC Mortgage Services) (800) 365-6730

HSBC Mortgage Corp.(there is a difference between Mortgage Services and Corp. placed new number) (800) 338-6441
Default Resolution Team (if long term problem)
2929 Walden Avenue
Depew, NY 14043
(888) 648-3124 Loss Mit
(732) 352-7519 Fax
Web: HSBC Mortgage (800) 338-6441
Default Resolution Team (if long term problem)
2929 Walden Avenue
Depew, NY 14043
(888) 648-3124 Loss Mit
(732) 352-7519 Fax
Web: National Bank (800) 323-4695 Indymac Bank (877) 736-5556
C/O Loan Resolution Department
P.O Box 7014
Pasadena, CA 91107
(Monday – Friday 6:15am-7:15pm. (Pacific Time))

Irwin Mortgage (888) 218-1988
P.O Box 7014
Pasadena, CA 91107
Web:!ut/p/cxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLN4g3sdAvyHZUBAAqwx 9c

James B. Nutter & Company (800) 315-7334

Key Bank (800) 422-2442

LaSalle National Bank (800) 783-8900

Litton Loan Servicing (800) 999-8501 or (800) 548-8665
Fax (713) 966-8820
4828 Loop Central Drive
Houston, Texas 77081-2226

Loss Mitigation Department Hours:
Monday Eastern: 9 a.m. – 7 p.m. Central:8 a.m. – 6 p.m. Mountain:7 a.m. – 5 p.m. Pacific:6 a.m. – 4 p.m.
Tuesday-Thursday Eastern:9 a.m. – 9 p.m. Central:8 a.m. – 8 p.m. Mountain:7 a.m. – 7 p.m. Pacific:6 a.m. – 6 p.m.
Friday Eastern:10 a.m. – 6 p.m. Central:9 a.m. – 5 p.m. Mountain:8 a.m. – 4 p.m. Pacific:7 a.m. – 3 p.m.
Default Counseling Department representatives are also available most weekends on Saturday from 8 a.m. to 12 p.m. and Sunday from 10 a.m. to 2 p.m. (CST).Midland Mortgage (800) 552-3000 or (800) 654-4566

Mortgage Lenders Network (800) 691-0129

Mortgage Electronic Registration Systems (888) 679-6377National City (800) 367-9305, Ext. 53221 or (800) 523-8654
Attention: Homeowner’s Assistance
3232 Newmark Dr.
Miamisburg, Ohio 45342
(8AM-10:30PM ET, Monday – Thursday)
(8AM-5PM ET, Friday)
(8AM-Noon, Saturday)
Web: Advantage Mortgage Company (800) 356-3442, ext. 6002*NationStar Mortgage (888) 850-9398* Press 0 for operator

New Century Financial Now Carrington Mortgage Services (800) 790-9502 or (877) 206-9904
(6:00 a.m. to 7:00 p.m. Pacific Time, Monday – Thursday)
(6:00 a.m. to 6:00 p.m. Pacific Time, Friday)

NovaStar Mortgage Loan Resolution Department (888) 743-0774 Non-English: (888) 743-0774, ext. 4523Ocwen Federal Bank (800) 746-2936 or (877) 596-8560

Attention: Financial Information
12650 Ingenuity Drive
Orlando, Florida 32826
Ocwen Financial Corporation
1661 Worthington Rd., Suite 100
West Palm Beach, Florida 33409
Phone: 877-226-2936For serving Ocwen with legal process, please send to their registered agent:
Corporation Service Company
2711 Centerville Road, Suite 400
Wilmington, DE 19808
Phone: 561-682-8000, x8386Option One (866) 711-1962 or (888) 275-2648
Web: Mortgage (Formerly Cendant) (800) 257-0460
For borrowers facing possible delinquency: (800) 330-0423*
For borrowers in the foreclosure process: (800) 750-2518
Web: NTNAME=phhmort-stb&TARGET=$SM$https%3a%2f%2fwww%2ephhmortgage%2ec om%2fhome%2flandscape%3fjpid%3dLogIn%26loginmode%3 dregistered&SMSESSION=NO

ResMae Mortgage Corp.(877) 473-7623, ext. 5944Saxon (800) 665-7367Select Portfolio Servicing (888) 818-6032
Fax: (801) 293-3936
Loan Resolution Department
P.O. Box 65250
Salt Lake City, UT 84165-0250
(Monday – Thursday 10:00 a.m. – 10:00 p.m. EST)
(Friday 10:00 a.m. – 7:00 p.m. EST)
(Saturday 9:00 a.m. – 1:00 p.m. EST)

SkyBank (800) 290-3359Sun Trust Mortgage (800) 634-7928
PO Box 26149
Richmond, VA 23260-6149
Mail Code RVW 3003Web:

Third Federal Savings (888) 844-7333

US Bank (800) 365-7900

Wachovia Bank of Delaware (866) 642-8608

Washington Mutual (866) 926-8937 or (888) 453-3102 or (800) 478-0036 or (800) 254-3677

Waterfirld Mortgage (800) 957-7245
Fax: (260) 459-5390
c/o Loss Mitigation Dept.
7500 W. Jefferson Blvd.
Fort Wayne, IN 46804
(7 am – 10 pm EST Monday – Thursday)
(7 am – 9 pm EST Fridays)
(8 am – 2 pm EST Saturdays)

Wells Fargo (877) 216-8448 or (866) 261-5642 or (800)766-0987 or (800) 678-7986 for payment assistance
Borrower Counseling Services
Monday – Friday 8:00 a.m. – 9:00 p.m., CT
Saturday 9:00 a.m. – 2:00 p.m., CT

Wendover Financial Services Corporation (800) 934-1081 or (800) 436-1022

Wilshire Credit Corporation (888) 502-0100
P.O. Box 8517
Portland, OR 97207-8517
From 6 a.m. to 5 p.m. (Pacific time) Monday through Friday

*No direct line to the loss mitigation or loan modification department. But I am working on it Loan Modification & Loan Workout ApplicationsChase Loan Modification Application

Option One Loan Modification Application

HSBC Online Loan Modification Application

Private Contacts Wendy Knafelc at Washington Mutual Loss Mitigation: (904) 732-8425 —

How to Defend Foreclosures in Nevada?

Defending Wrongful Foreclosure Actions in Nevada

Foreclosures in Nevada are on the rise, and our law office is contacted everyday by people from all walks of life inquiring about how to stop foreclosure and other foreclosure related questions. It is a complex area of laws, and we do not suggest to go alone or hire an unlicensed attorney or an out of state attorney or their production firm. A Nevada licensed attorney would be an ideal agency to handle such complex legal cases.

Nevada, as we know is a non-judicial foreclosure state. It simply means that your lender does not have to go to court to get a foreclosure status against you. A simple non judicial procedure is enough to foreclose on your property.

In Nevada, a notice of intent to foreclose is followed by a notice of default which is followed by a notice of trustee’s sale. The last step, the actual non-judicial foreclosure sale, usually occurs within approximately 90 days (and in some cases longer from the filing of the notice of default. For the vast majority of loans, the Nevada non-judicial foreclosure process is an effective and relatively inexpensive method for a servicer to obtain its security. In most non-judicial foreclosures, the only court time and court costs involved are those for the usually uncontested municipal court unlawful detainer which is initiated by the servicer in order to obtain possession from former borrowers who refuse to vacate their former homes.

For a small but seemingly growing number of loans, the non-judicial foreclosure process has has almost become judicial. Increasingly, this war has been taken to courts and even in Nevada, a large number of these cases had been filed in court. This war of attrition ranges from bankruptcy, to District Courts Nevada, and to US District Court. It is not a war to stop eviction in municipal courts of Nevada. They are only mean to stop illegal detainer.
Before we go any farther, we like to outline once more the steps taken by your lender in foreclosing your property in Nevada.
Foreclosure Process in General in Nevada:
Most of the loans are premised upon continuous payments to the lenders. If these payments are not timely paid, or not continuously paid, the borrowers can start the foreclosure process. The lender reviews the loan documents and determines about the occurrence of a default. Failure to make loan payments triggers this default process. Also, it is contingent upon events which have not been corrected by payments or failure of a workout package.

A trustee under a deed of trust may exercise its statutory power of sale without the judicial intervention. In Nevada, the foreclosure is mostly a statutory foreclosure. (NRS 107.080(1)). Judicial foreclosures are also permitted under Nevada law (NRS 40.430-40.450) but judicial foreclosures are not the preferred choice in Nevada for most of the lenders because of the looming danger of the right of redemption. Upon default, the initial step is for either the beneficiary or the trustee to execute a notice of breach and election to sell, which is usually accompanied by an unrecorded Declaration of Default. (NRS 107.080(2)(b)). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to see must be recorded in the county in which the property encumbered by the trust deed is situated. This notice must also be mailed (notice of breach and election to sell) by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3)

Notice of Default and Election to Sell?
1. Must describe the property
2. Must describe the deficiency in performance of payment.
3. May contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligations so permit (NRS 107.080(3).
4. Within 10 days of recording and mailing the notice of default to the trustor, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who has either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by register3ed or certified mail, return receipt requested. (NRS 107.090.)
5. Nevada laws make it immaterial whether the notice is actually received by the trustor. The notice is effective nonetheless. (Turner v. Dewco Services, Inc., 87 Nev. 14, 479 P. Wd 462 (1971)
6. NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (referred to below as “trustor or interested person”) has, for a period of 35 days, “failed to make good the deficiency in performance or payment….” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. (NRS 108.080(3). If the trustor other interested persons “make good” the deficiency in payment or performance within the 35-day period, the trustee’s power of sale may not be exercised, and the obligation may not be accelerated. NRS 107.080(2)(a), (3). The 35-day period in the statute exists independently of any notice or cure periods contained the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incidents to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment (NRS 107.080(3).

What is the Procedure for Trustee’s Sale?
When three months have elapsed from the date of the recordation of the notice of breach and election to sell, the trustee may give notice of the time and place of the trustee’s sale, which notice must be given in accordance with the statutory provisions for execution sales of real property – posted notice in three public places for 20 successive days and published once a week for three consecutive weeks. (NRS 107.080(4);231.130(1)©. The trustee’s sale may be held at the office of the trustee anywhere in Nevada, even if it is not in the county where the property being sold is located. (NRS 107.080(4).
If the power of sale is exercised in compliance with the Nevada statute, the purchaser is vested with the title of the trustor, without equity or right of redemption NRS 107.080(5).
What are the Guarantor’s Rights to Notice and Subrogation?
The notice of breach and election to sell must be mailed by certified mail, postage prepaid, to each guarantor or surety of the debt at the address of each if known, or at the address of the trust property. The notice must also be mailed to any other obligor who has filed a request for a copy of the notice under NRS107.090. Failure to provide such notice would release that guarantor, surety or obligor from liability on the obligation. (NRS 107.095(1).

Under NRs 107.095(3) a guaranty, surety or other obligor is not released if the required notice is give at least fifteen (15) days before the later of the expiration of the 35-day period described in NRs 107.080 or any extension of that period by the beneficiary, or if the notice of default is rescinded before the sale id advertised.

Upon full satisfaction by the guarantor, surety or other obligor, other than the trustor, of the indebtedness secured by a mortgage or lien, the paying guarantor or obligor is entitled to enforce every remedy which the beneficiary has against the trustor, and is entitled to an assignment from the beneficiary of all of the rights the beneficiary then has by way of security for the payment or performance of the trustor. NRS 40-475 (1989). Such an obligor is also entitled to subrogation, junior only to the secured lender’s rights, in the case of partial satisfaction of the indebtedness. (NRS 40.485 (1989). These rights may only be waived by the guarantor, surety or other obligor after default. NRs 40.495(1)(1989).
What are the rights under One Action Rule?
In Nevada, a deficiency judgment can be filed under non statutory foreclosure provisions without having filed a judicial foreclosure.

What is a deed of Trust in Nevada?
The most common type of security interest in real property in Nevada is a Deed of Trust. A DOT has three parties.
Lender: It is the first party who is referred to as “Beneficiary.”
Borrower: It is the second party who is referred to as the “Maker”, or “Grantor”, or “Trustor” who conveys legal title to the property to the Trustee.
Trustee: This is the third party who holds legal title to the property.
Process: A DOT can be foreclosed in a simple process and cheaper as well. A Trustee sells the property encumbered by the DOT. All the lender needs to do in order to foreclose on a DOT is to determine that an even of default has occurred under the DOT and have the trustee conduct non-judicial foreclosure proceedings. Here, in Nevada, the trustee sale does not entail redemption. The borrower, in Nevada, does not have the statutory rights of redemption unlike the judicial foreclosure where the right of redemption lasts one year. Compare NRs 107.080(5) (no right of redemption in a foreclosure on a DOT ) with NRs 21.210 (one year period of redemption).

Determination of Default.
Your default notice also consists of a determination of default. It can be monetary or non monetary. Monetary is when it is linked to borrowers failure to pay, failure to pay property taxes, failure to pay homeowners association assessments and failure to pay special improvements and other assessments against the property. The non monetary events of default are spelled out in the notice of default and Deed of Trust as well as related loan documents. They can be failure to insure property, the failure to maintain debt service coverage ratios and waste.

Acceleration of Obligation:
A trustee under a deed of trust may exercise its statutory power of sale (commencement of foreclosure process) without judicial intervention in Nevada. NRs 107.080(1). Judicial foreclosure is also permitted under Nevada laws though seldom exercised. (NRs 40.430-40-450). They carry with them a one year right of redemption which lenders does not like it as they like to close this chapter once for all.

Steps in Foreclosure in Nevada?
1. The beneficiary or the trustee to execute a notice of breach and election to sell which is usually accompanied by an unrecorded Declaration of Default. (NRS 107.080(2)(b). The beneficiary executes the notice, but the trustee records it. The notice of breach and election to sell must be recorded in the county in which the property encumbered by the trust deed is situated. The notice of breach and election to sell must also be mailed by registered or certified mail, return receipt requested with postage prepaid, to the address of the trustor and to the person who holds the title of record, if known, otherwise to the address of the property. (NRS 1076.080(3).
2. The notice and election must describe the deficiency in performance or payment, and may contain a notice of intent to accelerate the entire unpaid balance if the terms of the obligation so permit. (NRS 107.080(3).
3. Within ten days of recording and mailing to the trustor the notice of default, copies of the notice must also be sent by registered or certified mail, return receipt requested, to each person who had either (1) filed a request for a copy of the notice; or (2) holds a record interest in the property subordinate to the deed of trust being foreclosed. Additionally, 20 or more days before the sale, the trustee must mail a copy of the notice of the time and place of the sale to the same parties by registered or certified mail, return receipt requested. (NRS 107.90)
4. Under Nevada law, it is immaterial whether the notice is actually received by the trustor. Turner v. Dewco Services, Inc., 87 Nev 14. 479 P.2d 462 (1971).
5. NRS 107.080(2)(a) provides that no power of sale may be exercised unless the trustor or his successor in interest, a beneficiary under a subordinate deed of trust or any other person with a subordinate lien or encumbrance of record (trustor or interested persons) has, for a period of 35 days, “failed to make good the deficiency in performance or payment….” The 35-day period commences on the first day following the day upon which the notice and election is recorded and mailed to the grantor and to the record owner of the property in the manner specified above. NRS 107.080(3). If the trustor or other interested person “make good” the deficiency in payment or performance within 35-day period, the trustee’s power of sale may not be exercised, and the obligation may not be accelerated. NRs 107.80(2)(a), (3). The 35-day period in the statue exists independently of any notice or cure periods contained in the applicable notes or deeds of trust. If the notice of breach contains a permitted election to accelerate and the breach is not cured within the 35-day period, the trustor or other interested persons can thereafter only prevent the sale by tendering the entire unpaid balance of the obligation, as well as any costs, fees and expenses incident to the preparation or recordation of the notice and incident to the making good of the deficiency in performance or payment. NRS 107.080(3).
6. Nevada Revised Statutes Chapter 107 governs Deeds of Trusts. The transfer of real property may be made in trust to secure loans and other obligations. See NRs 107.020. In the event a transfer is made in trust to secure payment, the Trustee is granted a power of sale which may be exercised if an event of default has occurred. See generally NRS 107.080.

How a Foreclosure Process in Nevada is Commenced?

1. The lender must first determine that an event of default has taken place.
2. The lender employs the Trustee or a successor.
3. The Trustee will prepare and record in the Office of the County of Records of the County in which the property is located a Notice of Default and Election To Sell. (NRS 107.080).
4. The Notice of Default and Election to Sell must be mailed by registered or certified mail, return receipt requested Election to Sell must be mailed by registered or certified mail, return receipt requested and postage prepaid, to the grantor of the Deed of Trust, the person who holds title of record on the date of the Notice of Default and Election to Sell, each guarantor or surety of the debt, NRS 107.095(1), and any person who recorded a request for a Notice of Default and Election to Sell. (NRS 107.090.
5. On the first day after the Notice of Default and Election to Sell is recorded and sent by mail to all interested parties, the borrower and the other obligors are then given 35 days to make good the deficiency in payment or performance. NRs 107.080(2)(a)(2). This essentially allows the borrower or other obligors to de-accelerate the default under the Deed of Trust and terminate the foreclosure proceedings.
6. In the event the borrower or other party in interest fails to cure the deficiency in payment or performance, the Trustee must wait until the expiration of three months following the recording of the Notice of Default and Election to Sell (55 days after the 35 day reinstatement period expires) before giving notice of the time and the place for the sale of the real property (NRS 107.080). The notice of the time and place for the sale of the real property must be published in accordance with Nevada’s execution statutes.

Requirements of Publication for the Notice Under Nevada Laws

Nevada statute requires the following publication of the notice of the date, time and place of the sale:
(1) Personal service or service by registered mail to the last known address of each person entitled to Notice of Default and Election to Sell;
(2) The posting of a similar notice particularly describing the property , for twenty days successively, in three public places of the township or city where the property is situated in or where the property is to be sold; and
(3) Publishing a copy of the Notice three times, once each week for three successive weeks, in a newspaper, if there is one the county. (NRS 21.130(c).
(4) In addition to the notice required by Nevada’s execution statutes, the Trustee is required to, at least twenty days before the date of the sale, deposit in the United States mail and envelope, registered or certified, return receipt requested and with postage prepaid, containing a copy of the Notice of time and place of sale, addressed to each person who has recorded a Request for Notice of Default and Sale. See NRS 107.090(4).
(5) If the Trustee fails to give any person liable to the beneficiary or any other person who has requested a Notice of Default and Sale the required notices, that person may be released of its obligation to the lender. NRs 107.095.
(6) NRs 107.080(4) allows the Trustee to conduct the sale at the Trustee’s office.
(7) At the foreclosure sale, the Trustee may sell the real property by public auction. Generally, the lender will provide the trustee with a minimum credit bid before the foreclosure sale. The amount of the credit bid may be for the full amount of the debt owed to the beneficiary or only a portion of what is owed to the beneficiary. Any person or entity may attend the foreclosure sale and bid for the real property.

What is Nevada’s “One Action Rule”?

Nevada has adopted a one-action rule. It provides that there may be only one action to collect a debt secured by a mortgage or other lien. The Nevada One Action rules provides: (NRs 40.430(1)-(3).
1. There may be but one action for the recovery of any debt, or for the enforcement of any right secured by a mortgage or other lien upon real estate. That action must be in accordance with the provision of this section and NRS 40.433 to 40.459, inclusive. In that action, the judgment must be rendered for the amount found due the plaintiff, and the court, by its decree or judgment, may direct a sale or the encumbered property, or such part thereof as is necessary, and apply the proceeds of the sale as provided in NRs 40.462.
2. This section must be construed to permit a secured creditor to realize upon the collateral for a debt or other obligation agreed upon by the debtor and creditor when the debt or other obligation was incurred.
3. A sale directed by the court pursuant to subsection 1 must be conducted in the same manner as the sale of real property upon execution, by the sheriff of the county in which the encumbered land is situated, and if the encumbered land is situated in two or more counties, the court shall direct the sheriff of one of the counties to conduct the sale with like proceedings and effect as if the whole of the encumbered land were situated in that county.

What is a Wrongful Foreclosure Action?

A wrongful foreclosure action is an action filed in superior court by the borrower against the servicer, the holder of the note, and usually the foreclosing trustee. The complaint usually alleges that there was an “illegal, fraudulent or willfully oppressive sale of property under a power of sale contained in a mortgage or deed of trust.” Munger v. Moore (1970) 11 Cal.App.3d. 1. The wrongful foreclosure action is often brought prior to the non-judicial foreclosure sale in order to delay the sale, but the action may also be brought after the non-judicial foreclosure sale.

A borrower in a wrongful foreclosure can allege that the amount stated as due and owing in the notice of default is incorrect for one or more of the following reasons:
– an incorrect interest rate adjustment,
– incorrect tax impound accounts,
– misapplied payments,
– a forbearance agreement which was not adhered to by the servicer, unnecessary forced place insurance,
– improper accounting for a confirmed chapter 11 or chapter 13 bankruptcy plan.
– Wrongful foreclosure actions are also brought when the servicers accept partial payments after initiation of the wrongful foreclosure process, then continue with the foreclosure.
– Companion allegations for emotional distress and punitive damages usually accompany any wrongful foreclosure action.
– Also, a loan modification process was initiated, but stopped in bad faith by your lender.
– Deceptive trade practice under Nevada Laws.
– Violations of TILA
– Violations of RESPA
– Violations of HOEPA.
– Contractual Breach
– Intentional infliction of emotional distress
– Negligent infliction of emotional distress
– Wrongful foreclosure
– Promissory Estoppel.
Damages available to a borrower in a wrongful foreclosure action are an amount sufficient to compensate for all detriment proximately caused by the servicer or trustee’s wrongful conduct. Damages are usually measured by value of the property at the time of the sale in excess of the mortgage and lien against the property. Munger v. Moore (1970) 11 Cal.App.3d. 1. Additionally, the borrower may also obtain damages for emotional distress in a wrongful foreclosure action. Young v. Bank of America (1983) 141 Cal.App.3d 108; Anderson v. Heart Federal Savings & Loan Assn. (1989) 208 Cal.App.3d. 202. Further, if the borrower can prove by clear and convincing evidence that the servicer or trustee was guilty of fraud, oppression or malice in its wrongful conduct, punitive damages may be awarded.

How Can a Wrongful Foreclosure Action Delay Recovery of the Security?

A wrongful foreclosure suit filed in District court will not necessarily delay a servicer’s recovery of its security. The companion filings to such a suit (notice of pending action, injunction and/or motion to consolidate) however can delay a servicer’s ultimate recovery. Delay caused by a wrongful foreclosure action can be anywhere from forty-five days to two years.

A notice of pending action (“lis pendens”) is the most common companion to a wrongful foreclosure action. A lis pendens is recorded in the county in which the real property security is located at the time the wrongful foreclosure action is filed. The only requirement for a lis pendens to be recorded is an attorney’s signature that the action which is being noticed actually involves a real property claim. The purpose of the lis pendens is to put all third parties on notice that the borrower and the servicer are litigating over the real property security. Once a lis pendens is recorded, no title insurance company will issue a title insurance policy unless and until the lis pendens is removed. Although the servicer may “bond around” the lis pendens without title insurance, the real property security is virtually inalienable.

While a lis pendens can be filed at any time in the foreclosure process, a borrower applies for an injunction prior to the foreclosure sale with the intent of keeping the foreclosure sale at bay until issues in the lawsuit are resolved. The lawsuit can take anywhere from ten to twenty-four months. Generally, an injunction will only be issued if it appears to the court that: (1) the borrower is entitled to the injunction; and (2) that if the injunction is not granted, the borrower will be subject to irreparable harm. Like an action to expunge a lis pendens, a borrower’s application for an injunction is essentially a “mini-trial” on the merits.

There are important issues which are considered in nearly all injunctive relief action applications is the amount due and owing on the note and deed of trust. Again, it is imperative in any injunctive hearing that the servicer provide a detailed analysis of the amount it contends is due and owing on the note and deed of trust at issue. Sometime it is not possible for your servicer and they are unable to provide a breakdown of the amounts due and owing on the note and deed of trust at issue. Again, sometime they only can provide insufficient information to refute the borrower’s allegations, it is likely the injunction will be issued. Now comes the question of producing a bond from the borrowers, and making timely payments. In many cases, judges make their own laws when they experience heart wrenching stories from the borrowers, and their sorrowful tales have a deeper impact upon the judges, the issue injunctions. Of course tough standards are required by Nevada judicial system in issuing these injunctions but sometime the judges issue minimal bonds and little or no debt service requirements. This worst case scenario translates into a servicer being unable to sell the security and receiving no payments on the underlying debt during the life of the lawsuit. In reality, judges are loath to modify an injunction after it is issued and prior to a decision on the merits. Once an injunction with little or no debt service or bond is in place, the wrongful foreclosure suit will be a long and expensive process because the borrower has lost all incentive for a quick resolution of the action.

Another way borrowers delay a servicer’s recovery of its security through a wrongful foreclosure action is by consolidating their wrongful foreclosure action with their unlawful detainer action. Asuncion v. Superior Court (1980) 108 Cal. App. 3d 141. The Asuncion case which is usually relied upon by borrowers for consolidation contains an egregious fact scenario including clear fraud in the inducement of the loan. Judges however, do not limit the application of Asuncion to cases where fraud is alleged by the borrower. In applying Asuncion, a court can allow the unlawful detainer suit to be consolidated with the wrongful foreclosure action if there is a mere similarity of issues in the cases.
If the borrowers plays all the cards tactfully the final disposition of the case can be delayed anywhere from ten months to two years.

Nevada law provides many unique procedural remedies which may be employed in battling a wrongful foreclosure action. Judicious use of these procedures by counsel and close coordination between counsel and client can lessen the pain of defending a wrongful foreclosure action.

Short Sale vs. Foreclosure

Of course both short sale and foreclosure are not appealing to my senses and I detest equally both of them, but here my likings are not in discussion: I have to make distinction between these two often quoted and touted remedies in this national crisis. It is actually a selection between the two lesser evils.

Short-Sale versus Foreclosure.

A short sale is just the opposite of a full sale. Let us say your home has an appraised value of $400,000, and you had placed your house on sale for quite some, and no offer comes, and endlessly waiting you get tired. You can tell the bank that heck with it, I want to just get out of it. The bank would plan along with your knowledgeable broker a sale which should be quick, non cumbersome and in which you would not see a penny coming to your pockets. Altogether it is called a Short Sale. It is not as damaging on your credit report as let us say a foreclosure is. Closely related to short sale, of course, a surrender of deed which I will discuss in another time. The lasting impact of a short sale would stay few years on your credit. You may have to report to IRS which is a tax question and need to be addressed to your tax consultants.

Few things you have to remember.

1. Banks would not allow a short sale if there is a second lien attached with it. A short sale is a compromise between you and the bank who is the lien holder of your first principal. A short sale would wipe out the junior interests and that means second lien holder or HELOC. They would not get anything, and they would not agree to short sale unless they get something out of it. Now there would be a fight between the first lien holder and the second lien holder. This fight of course is detrimental to your interest and can cause delay in the process. Also, there are many layers of approvals on various levels in the banks’ hierarchy and oligarchy.

2. You can compromise with the bank how it should be reported to you credit bureaus. Use it to your advantage.

3. A negotiated short sale would stop the bank for a deficiency judgement against you.

4. One problem, if there is a short sale and you declare bankruptcy right after it, it can be treated as a collusive transaction between you and the lender, and your other creditors can contest it and may invalidate it.

5. Of course the solution again lies with your knowledgeable attorney handling your issue.

6. The IRS has very complex tax consequences in a debt renegotiation, such as a short sale, or foreclosure, that are more detrimental for solvent taxpayers than those who are insolvent or bankrupt as each generates Cancellation of Debt Income.

7. A borrower who refinanced their home to take the cash out to buy another home, then let the first home go to foreclosure thinking they are getting off debt and obligation free, are living in a fools paradise. This practice can be stopped by the lender.

The first thing to establish is what the home’s basis is. The IRS definition for basis is your investment in the home for tax purposes. It usually starts with the cost to acquire the house. Adjusted basis is the increase or decrease in the original basis according to certain events. Increases to basis include but are not limited to improvements having a useful life of more than a year, assessments for local improvements, sales tax, the cost of extending utility lines to the home, legal fees such as the cost of defending or perfecting title, and zoning costs. Decreases to basis include but are not limited to depreciation, nontaxable corporate distributions, casualty and theft losses, easements, and rebates from the seller.

IRS Pub 551 Basis of Assets is a handy reference. Taxable gain or loss on a house is determined by the difference of the selling price/amount realized and its adjusted basis.

IRC 61(a)(12) CODI, Cancellation of Debt Income other than as a gift, creates taxable income to the debtor unless an exception applies. In a Short Sale, the lender issues a 1099-C to the IRS. In a Short Sale example of a home, whether it be primary, second home, or third home, A bought his home in Reno in November 2004 for $290,000. In November 2005, A refinanced to a new loan for $380,000. Unfortunately, today its Fair Market Value is $260,000. A can no longer make the payments due to his legal split with B, his spousal equivalent. In 2007 A sells the property through a Realtor who successfully negotiated a Short Sale of $120,000 loan reduction with A’s lender, so A walked away with no immediate out-of pocket loss. A has a $120,000 nondeductible loss (adjustment to basis) on his home. The $120,000 principal reduction is taxable income in 2007 to A. (rev. Rul. 82-202) It is reported as “Other Income” on Line 21 of the 1040. If A had bought with seller-financing, there is special rule IRC 108 (e) (5). If three conditions are met, the borrower reduces the property’s basis and does not recognize CODI.

The IRS treats a foreclosure as a sale or exchange from which the borrower may realize gain or loss. In a foreclosure, the lender issues a 1099-A to the IRS. In a recourse state such as Nevada, the lender checks Box 5 as “Yes.” The borrower is personally liable to pay any amount of the debt not covered by the property’s value. The amount realized for borrower’s Federal gain or loss on the transaction is the smaller of debt cancelled or FMV of the transferred property. The borrower’s CODI is ordinary income if the loan balance exceeds the property’s FMV. If A had gone to foreclosure, his adjusted basis is $290,000, the recourse debt cancelled is $380,000 and the FMV of the property is $260,000. Here he realizes $260,000. The cancelled debt ($380,000) up to the property’s FMV ($260,000). Compare amount ($260,000) realized with adjusted basis ($290,000). A has a $30,000 non-deductible loss. He also recognizes ordinary income equal to the CODI of $120,000 ($380,000 debt cancelled less $260,000 FMV). This $120,000 is the part of the cancelled debt not included in the amount realized.

In a short sale example of a rental house, if A had bought and used the house as a rental, if A is not insolvent or bankrupt, if A can meet the required extent of his involvement, A can elect on Form 982 to exclude from gross income any income from the discharge of QRPBD (Qualified Real Property Business Debt). IRC 108(c)(3) QRPBD includes debt 1) that was incurred or assumed in connection with real property used in trade or business and that is secured by such real property, 2) debt incurred or assumed to acquire, construct, reconstruct, or substantially improve real property used in a trade or business. IRC 108(c)(1) Income excluded for the discharge of QRPBD reduces the basis of the taxpayers depreciable real property, first to the property with the discharged debt, then to the taxpayer’s other depreciable real property proportionally, on each property’s relative adjusted basis

NY Man Convicted in Mortgage Fraud

New York Developer Pleads Guilty To Mortgage Investment Scheme
Michael Hershkowitz, 52, New York, New York, a Manhattan real estate developer, pleaded guilty in Manhattan federal court to participating in a $27 million mail and wire fraud conspiracy.
Hershkowitz, working through Manhattan real estate development company, The Kingsland Group, Inc., and related entities, fraudulently induced approximately 70 individuals to lend the Kingsland Group over $27 million, purportedly to fund the renovation of approximately sixteen multi-family apartment buildings located in upper Manhattan.

Hershkowitz and a co-conspirator, Ivy Woolf-Turk, 52, Port Washington, New York, falsely represented that the lenders would hold, as collateral for the loans, interests in bona fide first mortgages in the various properties in which they thought they were investing. In fact, the lenders did not hold recorded, first mortgages in the properties. Instead, the lenders were provided with forged documents falsely reflecting that the mortgages had been properly recorded with the City of New York. Interest was paid on the loans for some years after they were first made, but ultimately the principal on the loans was not repaid when due and it was determined that the lenders did not have valid first mortgages on the properties in question.

Hershkowitz pleaded guilty before United States District Judge P. Kevin Castel to a one count Information charging conspiracy to commit mail and wire fraud — a charge which carries a maximum term of 20 years in prison. The Information also contains a forfeiture allegation for over $27 million, representing the funds obtained through the fraud. Hershkowitz is scheduled to be sentenced on September 9, 2009.

Lev L. Dassin, Acting United States Attorney for the Southern District of New York, made the announcement.

Mr. Dassin praised the investigative work of the Federal Bureau of Investigation in this case.

This investigation is being handled by the Major Crimes Unit of the United States Attorney’s Office. Assistant United States Attorneys Harry A. Chernoff and Marcus A. Asner are in charge of the prosecution.

More Mortgage Fraud News

William A. McDowell, 30, Charlotte, North Carolina, was sentenced in U.S. District Court in Charlotte on Wednesday, March 18, 2009, for crimes in connection with a mortgage fraud scheme that involved numerous mortgage loans and houses in Charlotte, North Carolina, communities.

Convicted by a federal jury at trial in June 2008, McDowell received a term of nine years imprisonment to be followed by a three-year term of supervised release. McDowell was also ordered to pay restitution in the amount of $2.7 million to the affected lending institutions.

The charges against McDowell arose out of a conspiracy which took place from December 2002 through March 2005 in the Western District of North Carolina. The defendants include two promoters and an underwriter for Countrywide Homes Loans. The superseding bill of indictment identifies an attorney, three other promoters and a real estate investor as unindicted co-conspirators in the scheme. Those individuals all pled guilty and cooperated with the prosecution. As part of the scheme the defendants agreed to defraud home mortgage lenders, including federally insured financial institutions across the country. The scheme centered on the submission of false and fraudulent mortgage loan applications in the names of individual straw borrowers solicited to purchase real property through real estate purchase offers. The coconspirators obtained mortgage loans secured by properties throughout North Carolina with inflated values.

Defendant McDowell’s role, generally, was that of recruiter and as part of that activity, he caused prospective buyers (“straw buyers”) to apply for home mortgage loans, typically by promising that (1) the buyers would not be required to provide down payments on the property, (2) the promoter would pay the buyers at or near the time of closing for participating in the scheme, and (3) the promoters would assist the buyers in renting the property bought with the loan proceeds and later selling it at a profit. As part of the scheme, it was further arranged for loans to be approved on the basis of statements the conspirators knew to be false. They misrepresented or concealed, among other things, each of the following during the course of their scheme: (1) the buyers’ income; (2) available funds in buyers’ bank accounts; (3) buyers’ resources; (4) the buyers’ then-current employment and employment histories; (5) the buyers’ intent to occupy the home as their primary residence; and (6) the source or nature of the buyers’ down-payment for the properties.

Trial testimony and court filings show that McDowell recruited straw buyers and brought them to his co-conspirators in order to facilitate the fraudulent transactions. Profits ultimately realized by the group, represented by the difference between appraisal amounts and loan amounts, were shared among the group and the various straw buyers. McDowell and his coconspirators utilized the personal information of the straw buyers to engage in the fraudulent real estate transactions. Generally the transactions involved preparing and submitting fraudulent loan applications and false supporting documents such as bogus employment information and account statements for fictitious bank and brokerage accounts. Trial evidence showed that in one instance, McDowell himself began residing in one of the homes fraudulently purchased by using the personal information of one of the buyers he had recruited. That home was located in Charlotte, North Carolina’s Piper Glen community. McDowell received thousands of dollars in kickbacks from his participation in the scheme. These illegal kickback payments were concealed by falsely classifying the payment as an “assignment fee” on the HUD-1 statement. Trial evidence showed that most of the homes involved in the mortgage fraud scheme went into foreclosure.

McDowell, charged in the indictment with a total of 4 counts, including mortgage fraud conspiracy, mail fraud, and money laundering conspiracy, was placed in federal custody at the time of his conviction on all counts on June 3, 2008. McDowell’s three co-defendants (listed below), all of whom have pled guilty, currently await sentencing. McDowell’s additional named co-conspirators, Gordon George and Duane Montgomery, have been charged, convicted and sentenced in U.S. District Court in Charlotte. On September 14, 2005, George pled guilty to conspiracy, mail fraud, and money laundering charges set forth in a separate Bill of Information (Western District of North Carolina Docket No. 3:05CR326) against him. On August 16, 2005, Montgomery pled guilty to mail fraud conspiracy set forth in a separate Bill of Information (Western District of North Carolina Docket No. 3:05CR292) against him.

The announcement is made by Acting U.S. Attorney Edward R. Ryan for the Western District of North Carolina, joined by Kenneth Moore, Acting Special Agent in Charge of the Federal Bureau of Investigation (FBI) in North Carolina. The sentence was handed down by U.S. District Judge Frank D. Whitney.

“William McDowell sought to corrupt and exploit the American dream of home ownership by engaging in this complex mortgage fraud scheme,” said Acting U.S. Attorney Ryan. “These types of mortgage fraud schemes have devastating effects on our communities, and as most of us have learned, have a profoundly negative impact on our broader economy. This nine-year sentence sends an unequivocal message that those who participate in mortgage fraud will be severely punished for their conduct,” he added.

Acting U.S. Attorney Edward Ryan said, “This result also highlights the long standing commitment of Charlotte’s Mortgage Fraud Task Force to identify, investigate, and bring to justice those individuals engaged in mortgage fraud schemes.”

This conviction and sentence is part of Operation “Clean Deed,” an undercover investigation initiated by the FBI’s Charlotte Division in 2002. Operation “Clean Deed” has
resulted in over 30 convictions and has identified over $70 million in fraudulent mortgages.

Those convicted include many licensed real estate professionals, including mortgage brokers, attorneys, appraisers, underwriters, and loan brokers, as well as other participants such as home builders and straw buyers.

In addition, Acting U.S. Attorney Ryan announced today that the United States recently turned over more than $400,000 to the clerk of court for distribution to mortgage lenders victimized due to the crimes committed within this mortgage fraud scheme. As set forth in the indictment against William A. McDowell and his co-defendants, Gordon George was a coconspirator of McDowell and the others in their scheme to obtain inflated loans on overvalued Charlotte properties.

As indicated in the bill of information against George, approximately $7 million in proceeds of fraudulent loan applications were diverted to George and his co-conspirators. While white collar criminals often dissipate much of the proceeds of their crimes, in this case the United States was ultimately able to locate and forfeit the roughly $400,000 from George’s accounts.

Forfeiture is the process whereby a criminal defendant is divested of his interest in property and the United States obtains title to the property. Federal statutes authorize forfeiture of assets that are the proceeds of crime, that facilitate crime, and that are involved in crime. The Department of Justice prioritizes the use forfeited assets to provide recompense to all victims, including businesses, government agencies, and individuals. Accordingly, in the case against George, the United States has requested that the clerk of court distribute the forfeited funds to mortgage companies defrauded due to the actions of George and identified as victims due $1,202,961.42 restitution in the Judgment against George.

The convictions of Young, McDowell, Johnson, Griffin, Montgomery, and George, and the subsequent forfeiture of George’s assets and return of the assets to victims resulted from efforts by the United States Attorney’s Office, the Federal Bureau of Investigation, and the United States Marshals Service. Assistant United States Attorney Craig Randall prosecuted George, Assistant United States Attorney Mark T. Odulio prosecuted Young, McDowell, Johnson, and Griffin, and Assistant United States Attorney William Brafford oversaw the forfeiture action.

Anthony Young, 54, Huntersville, NC, Awaiting sentencing;
William A. McDowell, 30, Charlotte, NC, Sentenced Wednesday, March 18, 2009;
Oliver W. Johnson, Jr., 46, Okolona, MS, Awaiting sentencing;
Carla Griffin, 40, Charlotte, NC, Awaiting sentencing.

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.

Another Loan Modification Company Busted for Advanced Fees

Another “Loan Modification” Company Busted For Advanced Fee

New Hope Property LLC d/b/a New Hope Modifications was charged in a four count complaint, filed in New Jersey Superior Court, in Camden County, with violating the Consumer Fraud Act, state advertising regulations and the Debt Adjustment and Credit Counseling Act. In addition to New Hope, Donna Fisher and Brian Mammoccio, Mullica Hill, Gloucester County, New Jersey, identified as registered agents of the business in New Jersey, are named as individual defendants.

According to the Attorney General’s lawsuit, New Hope has engaged since 2007 in unlicensed debt adjustment in New Jersey, including mortgage loan modification services, and has falsely represented that it has affiliations with government programs including the Hope Now Alliance. The state charges that, through its Web site, and through agreements with other businesses that provide leads, the unlicensed New Hope has sold loan modification help to distressed homeowners, failed to deliver on its promises of mortgage loan assistance, and failed to provide refunds once consumers realized they were getting nothing for their money. In one case
a Linden, Union County, woman facing foreclosure had a total of $1,500 electronically drawn from her bank account to cover the “fee” she owed New Hope, but received no loan modification help in return.

Scam Loan Artists From California: Some Nabbed There

Scam Artists Arrested For Committing Loan Modification Fraud

Mary Alice Yraceburu, 45, Riverdale, California, and Marianne Curtis, 67, Costa Mesa, California, who “coldly and heartlessly” conned over one hundred and sixty victims out of thousands of dollars for non-existent loan modification services, were arrested March 19, 2009.

California Attorney General Brown filed 49 felony charges in Orange County Superior Court against Yraceburu and Curtis.

Yraceburu was arrested in Fresno County and Curtis was arrested in Orange County on the following charges:

– 24-counts of grand theft;
– 25-counts of violations of California’s foreclosure consultant statutes;
– One special allegation that the total value of theft was over $65,000;
– One special allegation that the total value of theft was over $100,000;

Both women are convicted felons who have served time in state and federal prisons.

The two women operated a company called Foreclosure Freedom, which sent hundreds of fliers to Californians promising help in stopping the foreclosure of their homes. The fliers read: “FINAL NOTICE – Respond only to this notice immediately.” This is similar to First Gov scam, which the Attorney General stopped late last year.

When homeowners called the number on the flyer, they were told their mortgages could be renegotiated to a lower monthly payment. Victims, however, were required to pay thousands of dollars in up-front fees and were instructed not to contact their lenders.

Victims were assured the company had “private lenders and specialists exclusive to their company who are very experienced in the options and methods used to renegotiate home loans,” yet neither of the women who operated the company had real estate licenses, legal training, or any experience in the home mortgage market.

Investigators found no evidence of any successful loan modifications and most of the victims were either forced into bankruptcy or lost their homes to foreclosure.

Assets seized through search warrants served at Foreclosure Freedom and the bank accounts held by Mary Alice Yraceburu and Marianne Curtis totaled over $10,000.

If convicted of all charges, Yraceburu and Curtis face 21 years in prison.

Attorney General Edmund G. Brown Jr. made the announcement.

“These scam artists coldly and heartlessly preyed on Californians desperate for help in saving their homes,” Attorney General Brown said. “Homeowners in financial trouble have to be on guard against loan modification fraud, so they don’t make a bad situation worse.”

Three Utah Men Charged in Loan Fraud

Three Utah men charged in mortgage fraud scheme
By Dawn House

The Salt Lake Tribune

Updated: 03/18/2009 08:09:56 PM MDT

Three Utah men have been charged in a $2.9 million mortgage scheme that allegedly took advantage of sloppy lending practices. Federal officials say the fraud is similar to other swindles that helped bring about the nation’s financial crisis.

The 38-count indictment, returned by a grand jury on Wednesday, is the first of 50 other mortgage frauds under investigation involving $150 million in losses, said U.S. Attorney for Utah Brett Tolman.

“Prosecutions can be a great deterrence,” said Tolman, who promised to target mortgage fraud “so we can start rebuilding.”

Defendants named in the federal indictment are Ronald W. Haycock, Sr., 61, Bountiful; Lyle Smith, 43, Roy; and disbarred attorney Jamis Melwood Johnson, 57, Salt Lake City.

The three face 15 counts of money laundering, 12 counts of wire fraud, 10 counts of mail fraud and one conspiracy count. The money laundering counts carry a prison sentence of up to 20 years; the wire and mail fraud up to another 20 years, and the conspiracy charge also has a penalty of up to 20 years.

Haycock said he was shocked by the indictment and must talk to his attorney before making a comment. Smith could not be reached for comment. Johnson said he was not involved in any of the business entities or transactions outlined in the indictment. Johnson was disbarred in 2001 on an unrelated case.

Prosecutors say Haycock and Smith recruited “straw buyers” and used the purchasers’ favorable credit ratings to take out loans on 12 homes in Davis, Salt Lake and Utah counties from 2005 through August 2007. The three men are charged with closing loans by using false information that inflated the straw buyers’ income and assets. Cash from the loans were allegedly paid out to joint ventures controlled by the defendants and purportedly deposited into an account to fund other straw-buyer loans.

The defendants also took out loan proceeds from an account they referred to as the “slush fund,” according to the indictment. Tolman said the men “siphoned off” assets totaling nearly $2.9 million while leaving the straw buyers with mortgage payments they could not afford.

Haycock allegedly formed four companies, referred to as Haycock Properties. Prosecutors say the straw buyers were told that the companies would be making loan payments for them, buyers would not have to make a down payment and the homes, whose appraisals had been rigged for more than they were worth, would be quickly sold. Buyers were allegedly paid from $7,000 to $20,000 to sign purchase and loan documents.

The companies stopped making loan payments, leaving mortgage lenders with non-performing loans secured by properties worth far less than the outstanding loan balances, prosecutors said.

Mortgage companies that purportedly lost money in the scheme included the Utah offices of Countrywide Bank and Countrywide Home Loans, names that became synonymous with the mortgage industry meltdown, America’s Wholesale Lender, Argent Mortgage, Paragon Home Lending, Shoreline Lending and Mountain States Mortgage.

Attorney Sentenced for Loan Fraud

Attorney Sentenced For Assisting In $5M Mortgage Fraud Scheme

Howard Gaines, Deerfield Beach, Florida, has been sentenced for his role in a complex mortgage fraud scheme. Gaines, an attorney and a licensed title agent with Your Title Choice, Inc., in Deerfield Beach, Florida, was sentenced by U.S. District Judge William Dimitrouleas to 8 years in prison, to be followed by 3 years of supervised release. In addition, Gaines was ordered to pay restitution in the amount of $422,465 to three lenders.

A jury convicted Gaines in December 2008 on one count of conspiracy to commit mail and wire fraud and two counts of mail fraud.

This is the sixth conviction in this case, following five earlier guilty pleas by other conspirators. According to the evidence presented at trial, Gaines, as a title agent, aided co-conspirator Anthony Dehaney and others to close on fraudulent loans. Among the fraudulent documents presented at closings were HUD 1 Settlement Forms, which falsely represented that buyers were using their own money to close on the purchases. The evidence showed that Gaines helped Dehaney close more than $10,000,000 in loans during 2004, 2005, and 2006, including $5,000,000 in fraudulent mortgages.

R. Alexander Acosta, United States Attorney for the Southern District of Florida, Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service, and Alex Hager, Acting Commissioner, Florida Department of Financial Regulation, made the announcement.

Mr. Acosta commended the investigative efforts of the FBI, U.S. Postal Inspection Service, and the State of Florida Office of Financial Regulation for their work on this case. The case is being prosecuted by Assistant United States Attorneys Jeffrey Kay and Jennifer Keene of the Fort Lauderdale Office.

How Federal Laws Can Stop Wrongful Foreclosures?

What happens if a lender fails to comply with the TILA rules?

The borrowers are allowed to RESCIND THE LOANS AND THIS WOULD VOID THE MORTGAGES ON THEIR HOMES. OF COURSE, THIS IS THE EXCELLENT REMEDY. BUT IT HAS A SHORTER STATUTORY TIME PERIOD. The mortgage lender becomes just another unsecured creditor, who must get in line behind everyone else who may have filed a lien on the property. Who ever files first (Credit card, auto finance, doctors, etc.) has first priority.

That makes the mortgage loan itself unsecuritized — and worth a lot less — due to the increased risk of loss of collateral:

A growing number are suing lenders over inaccurate disclosure papers, and if they win they get to rescind the loans. Rescission is a powerful remedy provided under the federal laws. While that’s good news for individuals, it’s a potential problem for investors exposed to subprime mortgages.

The subprime market has been known for its lax standards in documentation and the proliferation of these loans in recent years is now fueling significantly more complaints. The subprime share of first mortgages rose to 13.4% in the first quarter of 2007 from 10.9% in the first quarter of 2004.”
Let us see how the various federal laws helps stopping predatory lending and cures many of its ills. Of course, it is never too late to hire an attorney. The Law Office of Malik Ahmad is very knowledgeable in helping homeowerns against such predatory lending practices:

The Act Requires:

(1) SPECIFIC DISCLOSURES.–In addition to other disclosures required under this title, for each mortgage referred to in section 103(aa), the creditor shall provide the following disclosures in conspicuous type size:
(2) ANNUAL PERCENTAGE RATE.–In addition to the disclosures required under paragraph (1), the creditor shall disclose
(A) in the case of a credit transaction with a fixed rate of interest, the annual percentage rate and the amount of the regular monthly payment; or
(B) in the case of any other credit transaction, the annual percentage rate of the loan, the amount of the regular monthly payment, a statement that the interest rate and monthly payment may increase, and the amount of the maximum monthly payment, based on the maximum interest rate allowed pursuant to section 1204 of the Competitive Equality Banking Act of 1987.

This seems to be where many of the subprime 2/28 ARMs ran afoul: They failed to meet the disclosure laws regarding actual interest amounts and payments.

Who has gotten tagged with these cases so far? Subprime lender NovaStar Financial Inc. (NFI) in Kansas City settled a class action suit for $5.1 million. And, consumers in Wisconsin recently won a class-action TILA suit (its under appeal). Between 1998 and 2006, approximately 2.2 million (nominal) home owners with subprime loans are expected to lose their homes, according to the Center for Responsible Lending. The consumers in this group who a) could not afford those loans and b) did not receive the proper disclosures are “talking with lawyers in an effort to prevent foreclosures.”

Overview of Truth in Lending Act (TILA)

The purpose of the Truth In Lending Act is to require a meaningful disclosure of credit terms so that the borrower will be able to compare the terms of different loans available to him and to protect the consumer against unfair lending practices.
Sources of Law
• 15 U.S.C. § 1601, et seq.
• Regulation Z (12 C.F.R. 226).
• The Federal Reserve Board’s Official Staff Commentary on Regulation Z (12 C.F.R. 226.36, Supplement I). Ford Motor Credit v. Milhollin, 444 U.S. 555, 565 (1980) (“Unless demonstrably irrational, Federal Reserve Board staff opinions construing the Act or Regulation should be dispositive”).

Substantive Requirements
There must be clear, conspicuous, and accurate disclosures of loan terms as set forth in 12 C.F.R. 226.18 (“Content of Disclosures”).
Every loan charge must be properly disclosed as either part of the “amount financed,” which represents “the amount of credit provided to you or on your behalf,” 12 C.F.R. 226.18(b), or as part of the “finance charge,” which represents “the dollar amount the credit will cost you,” 12 C.F.R. 226.18(d). The “annual percentage rate” (APR) combines the interest rate and additional up-front (prepaid) finance charges to yield the total “cost of your credit as a yearly rate.” 12 C.F.R. 226.18(e).
The finance charge is computed according to the rules set forth in 12 C.F.R. 226.4 (“Finance Charge”). The finance charge includes “any charge payable directly or indirectly by the creditor as an incident to or a condition of the extension of credit,” 12 C.F.R. 226.4(a), unless a charge is specifically excluded. The most pertinent exclusions in the context of real-estate loan transactions are as follows:
Some real-estate related fees are excluded from the finance charge “if the fees are bona fide and reasonable in amount” (e.g., title, document preparation, credit report, appraisal, and escrow fees). 12 C.F.R 226.4(c)(7).

Tip: This is where most TILA violations occur. If there is a misdisclosure, it is usually because of an understated finance charge, i.e., there was a charge which should have counted as a prepaid finance charge and was not (most common: an arbitrarily inflated appraisal fee [e.g., over $500] or a title insurance charge [e.g., over $600] which was therefore not “bona fide and reasonable.”)
• In deciding whether a title insurance charge is reasonable, the court should look to the fair market rate, and a refi rate should be cheaper than a purchase-money mortgage rate. Johnson v. Know Fin. Group, 2004 WL 1170335 (E.D. Pa. May 26, 2004);
• Where information as to reasonability of the rate is more likely to be in the control of the lender, the lender has the burden of proof on that issue.
• Where a fee is not bona fide or reasonable, the portion which is not bona fide or reasonable (i.e., the “upcharge”) is a finance charge, Credit insurance premiums are excluded from the finance charge if they are voluntary, if this fact and other specified information is disclosed to the borrower, and if the borrower signs that, having been given these disclosures, s/he still wants the insurance. 12 C.F.R. 226.4(d). In re Duffy, 32 B.R. 497 (D.R.I. 1983);
• Taxes and fees “prescribed by law that are or will be paid to public officials,” such as for a release of lien. 12 C.F.R. 226.4(e).

There must be delivery to each borrower of two copies of a 3-day notice of right to rescind the loan transaction (non-purchase money mortgages only). The notice must meet all the requirements specified in 12 C.F.R. 226.23(b)(1), including setting forth the date the rescission period expires, how to exercise the right, how to contact the creditor, and the effects of rescission. The three-day right to rescind is absolute; unless the borrower waives the right as set forth in 12 C.F.R. 226.23(e), the creditor cannot take any action to undermine that right. 12 C.F.R. 226.23(c). Rodash v. AIB Mort. Co., 16 F.3d 1142 (11th Cir. 1994); Jenkins v. Landmark Mortgage Co., 696 F. Supp. 1089 (W.D.Va. 1988).

The creditor must deliver TILA disclosures to each person whose ownership interest in a dwelling is subject to the security interest, and each such person has the right to rescind. 12 C.F.R. 226.2(a)(11), 226.15(a) and (b), 226.17(d), 226.23(a)(1). Westbank v. Maurer, 658 N.E.2d 1381 (Ill.App. 2nd Dist. 1995).

–Failure to deliver a proper 3-day notice of right to rescind triggers an extended right of rescission. 12 C.F.R. 226.23(a)(3). Westbank v. Maurer, 658 N.E.2d 1381 (Ill.App. 2nd Dist. 1995).

–Failure to make clear, conspicuous, and accurate material disclosures also triggers an extended right of rescission. 12 C.F.R. 226.23(a)(3). Material disclosures include the: (1) annual percentage rate, (2) finance charge, (3) amount financed, (4) total payments, (5) or payment schedule. 12 C.F.R. 226.23(a)(3) n.48.

–There are statutory “tolerances” for the APR and the amount financed and finance charge. Violations are deemed non-material if they fall within these tolerances.
The APR tolerance is .125% for regular loans and .25% for irregular (variable-rate) loans. 12 C.F.R. 226.22(a);

–The finance charge tolerance for defendants in foreclosure actions is $35 (for rescission), 12 C.F.R. 226.23(h), and $100 (for monetary damages), 12 C.F.R. 226.18(d)(1)

–The extended right of rescission lasts 3 years from the date of the closing of the loan. 12 C.F.R. 226.23(a)(3). Semar v. Platte Valley Fed. S&L. Assn., 791 F.2d 699 (9th Cir. 1986)
The rescission remedy runs against any assignee: “Any consumer who has the right to rescind a transaction under section 1635 of this title may rescind the transaction as against any subsequent holder of the mortgage.

–Tip: It is crucial to comply with the technical TILA rescission procedures in full. First, the notice of rescission must be sent within 3 years of the loan closing–no exceptions. Second, you should send the notice of rescission all parties.

–Upon rescission, “the security interest giving rise to the right of rescission becomes void and the consumer shall not be liable for any amount, including any finance charge” (step one). 12 C.F.R. 226.23(d)(1). Within 20 days the creditor must take any action required to cancel the security interest and must return any money paid on the loan (step two). 12 C.F.R. 226.23(d)(2). If and when the creditor does so, the consumer must tender to the creditor the value of the money or property received (step three). 12 C.F.R. 226.23(d)(3). The tender amount is reduced by any amount paid on the loan (unless previously returned). White v. WMC Mortgage, 2001 U.S. Dist. LEXIS 15907, at * 5 (E.D. Pa. July 31, 2001); Williams v. Gelt, 237 B.R. 590, 598-99 (E.D. Pa. 1999). Courts can modify steps two and three of the above rescission process. 12 C.F.R. 226.23(d)(4).

–Tip: Once the right to rescind is affirmed by the court and amount owed (the “tender”) is determined, borrower must pay tender within time frame set by court. All loan payments previously made by the borrower will reduce the tender amount–so, the more payments made, the better the case. Because tender is inevitable (the borrower doesn’t just get to “walk away from the loan”), you have to start working on your proposed tender strategy from the very beginning of the case. This may be a good use of “Hard Money” lenders. The principle of the mortgage will be much less then the original mortgage and may make up for the increased rate. This is used as a bridge to a “real” loan after the credit is cleared from the offending bank.
Creditors are also liable for actual damages, statutory damages in the amount of twice the finance charge, up to $2,000, and attorney’s fees and costs. 15 U.S.C. § 1640(a). Failure to respond to the rescission notice as spelled out above results in another violation and an addition award of statutory damages. White v. WMC Mortgage, 2001 U.S. Dist. LEXIS 15907, at * 5 (E.D. Pa. July 31, 2001); Mayfield v. Vanguard Savings & Loan, 710 F. Supp. 143, 145 (E.D. Pa. 1989).

–Liability for TILA claims for monetary damages runs against assignees where the violation is apparent on the face of the loan documents. 15 U.S.C. § 1641(a).
To fulfill the congressional purpose of TILA, material violations, as set forth above, are to be “strictly construed”: there is no such thing as a mere “technical” violation which does not give rise to liability: “[T]he Seventh Circuit, like most courts interpreting TILA, maintains that disclosures made pursuant to the statute should be viewed from the vantage point of an ordinary consumer as opposed to that of a skilled or informed business person. TILA is aimed at deceptive practices by lenders, not the subjective beliefs or actions of borrowers. Moreover, a plaintiff need not show actual harm to recover from technical violations of TILA, as they are strict liability offenses.” Adams v. Nationscredit Financial Services Corp., 351 F. Supp.2d 829 (N.D. Ill. 2004) (citations omitted).
Statute of Limitations
• 1 year for affirmative claims. 15 U.S.C. § 1640(e);
• 3 years for rescission. Beach v. Ocwen, 523 U.S. 410 (1998);
Unlimited as a defense to foreclosure in the nature of a recoupment or setoff.

Avoid Foreclosure
Mortgage Litigation Under the Federal Truth In Lending Act

In many cases, it is possible for a borrower in foreclosure to keep possession of their property without making mortgage payments for a period of time due to violations of Federal Law by the mortgage company.

The Truth In Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”) are violated daily by lenders and mortgage companies. These loss mitigation laws are in place to protect you, the homeowner, but they are often completely disregarded. Your loan is probably unlawful, and you may be entitled to substantial damages whether or not you’re currently in foreclosure.

Not only can the Truth In Lending Act be used to immediately stop the foreclosure process (if you currently are in foreclosure), but it also lets you avoid bankruptcy and it puts money in your pocket. Once TILA and/or RESPA violations are discovered in your loan documents, your lender will be eager to discontinue the unlawful foreclosure process and settle the dispute.

The Federal Truth in Lending Act is a very specialized area of law, and only a few attorneys in the country are able to take on mortgage companies in this regard.
Most loans (especially those in foreclosure) will qualify for our program, but time is critical. We need time to fully analyze and evaluate your mortgage documents and then prepare the lawsuit. Here is an overview of how our program works:

The Law Office of Malik Ahmad likes to see your mortgage documents you received upon the closing of your loans(s) and look for TILA, RESPA and/or HOEPA violations by your lender. Nearly every loan has at least some violations.

We immediately file a Federal lawsuit on your behalf, and place a Lis Pendens on the property to stop foreclosure (if applicable) and begin litigating your causes of action against the lender(s).

We reach a settlement agreement with the lender (most cases) or continue on to trial (rare situations) and demonstrate to a judge or jury how the lender has willfully failed to comply with Federal Law.

It is NOT necessary for you to make mortgage payments while the lawsuit is pending.
It is also unlawful for the lender to report negative information about you to the Credit Reporting Agencies while the lawsuit is pending under the Fair Credit Reporting Act.
Our program is also affordable, we represent you on a hybrid contingency arrangement to keep out-of-pocket costs low.

Predatory Lending: How to Stop It? (Acid test: Is too good to be true?)

Predatory Lending
Predatory lending occurs when a mortgage loan with unwarranted high interest rates and fees is set up to primarily benefit the lender or broker. The loan is not made in the best interest of the borrower, often locks the borrower into unfair terms, and tends to cause severe financial hardship or default. To determine if a loan is predatory in nature, ask yourself these questions:

Does your past credit history justify the high rate and fees charged?

– Is the loan being made on the basis of your ability to repay the loan and not solely on the value of the property?
– Have the loan’s terms been fairly represented and explained to you?
Does the type of loan and the loan services provided meet your need and interests?
– If you answered “NO” to any of these questions, there is a possibility the loan is predatory in nature. In order to avoid falling prey to these abusive practices, you must be a smart and informed shopper.

What is Predatory Lending?
In communities across America, people are losing their homes and their investments because of predatory lenders, appraisers, mortgage brokers and home improvement contractors who:

–Use false appraisals to sell properties for much more than they are worth.
–Encourage borrowers to lie about their income, expenses, or cash available for down payments in order to get a loan.
–Knowingly lend more money than a borrower can afford to repay.
–Charge high interest rates to borrowers based on their race or national origin and not on their credit history.
–Charge fees for unnecessary or nonexistent products and services.
–Pressure borrowers to accept higher-risk loans such as balloon loans, interest-only payments, and steep pre-payment penalties.
–Target vulnerable borrowers to cash-out refinance offers when they know borrowers are in need of cash due to medical, unemployment, or debt problems.
–“Strip” homeowners’ equity from their homes by convincing them to refinance again and again when there is no benefit to the borrower.
–Use high-pressure sales tactics to sell home improvements and then finance them at high interest rates.

What Tactics Do Predators Use?

–A lender or investor tells you that he or she is your only chance of getting a loan or owning a home. You should be able to take your time to shop around and compare prices and houses.
–The house you are buying costs a lot more than other homes in the neighborhood but isn’t any bigger or better.
–You are asked to sign a sales contract or loan documents that are blank or that contain information that is not true.
–You are told that the Federal Housing Administration insurance protects you against property defects or loan fraud. It does not.
–The cost or loan terms at closing are not what you agreed to.
–You are told that refinancing can solve your credit or money problems.
–You are told that the only way you can obtain a good deal on a home improvement loan is if you finance or refinance with a particular lender.

Tips to Avoid Predatory Lending

–Only deal with licensed mortgage lenders, mortgage brokers and loan officers operating under and subject to federal and/or state regulators. To determine if your broker of lender is licensed by the State of Nevada, contact the Nevada Division of Mortgage Lending (MLD). Read my total blog to get more information.

–Read and get copies of everything you sign in connection with your mortgage.
–Beware of “bait & switch” tactics where the lender or broker makes an offer with one set of terms and then pressures you to sign a loan with more expensive rates and hidden costs.
–DO NOT sign blank forms. Forms should be completely filled out with no blank boxes or spaces.
–Make sure your monthly payments are affordable, and that you are NOT comparing apples with oranges when looking at the old vs. the new payment. Be sure that if the escrow of taxes and insurance has been part of your old payment, it is included in your new payment when comparing price savings.
–Make sure the rate and terms quoted by your lender and/or broker are given to you in writing and do not vary significantly from those presented at closing.
–DO NOT shop based solely on lower monthly payments. Payments may be lower if the loan has a balloon payment or a variable rate. Unless you expect falling mortgage rates, a higher income, or a better credit rating in the future, these loans eventually cost you more.
–Beware of door-to-door home improvement offers where the contractor offers to find you the necessary financing to make the improvements.
–DO NOT fall for scams from out-of-state businesses claiming to arrange mortgage loans for an advanced fee or with the advanced purchase of special loan insurance. Sending them a money order to a post office box or mail drop will likely be the last time you see your money.
–Never falsely state or allow others to falsely state your income. You won’t have your dream home very long if you can’t afford to make the payments.
–Borrow only what you need and can afford to pay back. If you need $5,000 to pay for a home improvement, there is usually little sense refinancing your existing mortgage and paying $6,000 in closing fees to arrange the loan.
–Remain current on your present mortgage obligations until closing and disbursement of new loan proceeds. If you are paying other debts off as part of the loan, remain current on them as well. Falling behind on your current debt while waiting to get your new loan will hurt you in the long run.
–Understand that if you consolidate your credit card debt and other consumer debt into your mortgage or home equity line of credit to have one lower overall monthly payment, nonpayment of the loan could cause you to lose your home. Also, any monthly savings will disappear if you accumulate credit card debt again.
–Know your credit rating and qualify for the loan you deserve. There is no reason to pay high rates and fees if you can qualify for better terms.

If a deal to buy, repair or refinance a house sounds too good to be true, it usually is!

Latest Foreclsoure Numbers of Nevada

Nevada Foreclosures: Impact & Opportunities
Without aggressive action, foreclosures will continue to be a major problem for the state
Projected Foreclosures
Projected new foreclosures in 2009 a
Projected homes lost through foreclosure over next four years b
Housing Market Decline to Date
Change in state homeownership rate (2004-3Q 2008) c
Change in home prices (3Q 2008 vs. 3Q 2007) d
Las Vegas- Paradise: -28.4%
Reno-Sparks: -20.1%
Change in home sales (3Q 2008 compared to 3Q 2007) e
Decline in housing contribution to state economy (gross state product) 2005-2008 f
-$5.1 billion
Loans With Two or More Payments Past Due in Nevada010,00020,00030,00040,00050,00060,00070,0003Q 20043Q 20053Q 20063Q 20073Q 2008(Source: MBA Delinquency Survey)# of Loans
However, one proposed solution offers some remedy Nevada Conservative estimate of homes saved through court-supervised modifications g17,700 fewer homes lost
(see note below)
Based on a national savings of 800,000 homes projected by Moody’s in early January 2009. Credit Suisse has since estimated that court-supervised modifications could reduce foreclosures by 20%.h On a base of 8.1 MM foreclosures, this would be 1.6 million homes saved—twice the Moody’s projection– so the number of saved homes shown above is very conservative.

Sources & Notes
a Estimated as annualized run rate of foreclosure starts reported in 3Q 2008 MBA National Delinquency Survey, grossed up to reflect entire mortgage market (MBA National Delinquency Survey covers 80% of market).
b Based on Credit Suisse projected national foreclosures of 8.1MM over next four years, and state proportion of 3Q2008 foreclosure starts as reported in 3Q 2008 MBA National Delinquency Survey. See Rod Dubitsky, Larry Yang, Stevan Stevanovic and Thomas Suehr, Foreclosure Update: over 8 million foreclosures expected, Credit Suisse (December 4, 2008)
c Housing Vacancies and Homeownership Data, U.S. Census Bureau available at
d Metropolitan Area Prices, National Association of Realtors available at
e State Existing-Home Sales, National Association of Realtors available at
f Natalia Siniavskaia, The Effect of Home Building Contraction on State Economies, National Association of Home Builders (August 1, 2008) available at
g Based on Moody’s estimate of 800,000 borrowers benefitting from court-supervised modifications and state proportion of 3Q 2008 seriously delinquent loans as reported in 3Q 2008 MBA National Delinquency Survey; See Elizabeth Williamson and Ruth Simon, Plan to Cut Foreclosure Rate Clears Key Hurdle, The Wall Street Journal (January 9, 2009) available at
h Rod Dubitsky, Larry Yang, Stevan Stevanovic and Thomas Suehr, Bankruptcy Law Reform: A New Tool for Foreclosure Avoidance, Credit Suisse (January 26, 2009).

How to Get Rid of Second Loan?

You Can Modify Or Lien Strip Your Wholly Unsecured Second Mortgage In Chapter 13 Under The Current Law

There is a powerful tool in Chater 13 that is not widely reported. A second mortgage that is completely unsecured can be stripped in Chapter 13.

Let me give you an example: if your home is worth $500,000 and your fiirst mortgage payoff balance is $525,000, you have no equity. If you have a second mortgage loan balance of $50,000, this second loan is a wholly unsecured mortgage. You can commence proceedings within a Chapter 13 case to strip or remove the lien. If, however, the home is worth $530,000 in this scenario, you cannot strip off the second lien because it is merely undersecured, not wholly unsecured. In other words, if the second lien is partially secured you cannot remove it. The current law (Bankruptcy Code 1322) also prohibits modification or stipping of first mortgages on residential property.

This may help homeowners with 80/20 loans or HELOCs where the 2d lien is completely underwater. If such a lien is stripped, it can be treated as an unsecured debt in the plan and paid a fraction over 5 years, just like credit cards. The actual percentage paid will depend on several factors, including the value of unencumbered assets and disposable income. The best person to handle it again would be your bankruptcy attorney. Always, consult a licensed Nevada attorney in this regard.