Trying to help financially troubled homeowners:
Everyday many homeowners are coming to my office, seeking help from the predators who had made them victims in various ways; by promising them to lower their debts; by promising them to restructure their debts; by promising to lower their interest and principal. I have heard innumerable heart broken stories. In this posting, I would highlight some of the laws which are enforceable in Nevada statute books and can be used to catch these criminals. Again, it is advisable to seek a qualified and licensed attorney in addressing your particular issues.
Most of these deceptive trade laws are contained in NRS 598.741
1. “Buyer” means a natural person who is solicited to purchase or who purchases the services of an organization which provides credit services.
2. “Commissioner” means the Commissioner of Consumer Affairs.
3. “Division” means the Consumer Affairs Division of the Department of Business and Industry.
4. “Extension of credit” means the right to defer payment of debt or to incur debt and defer its payment, offered or granted primarily for personal, family or household purposes.
(a) Means a person who, with respect to the extension of credit by others, sells, provides or performs, or represents that he can or will sell, provide or perform, any of the following services, in return for the payment of money or other valuable consideration:
(1) Improving a buyer’s credit record, history or rating.
(2) Obtaining an extension of credit for a buyer.
(3) Providing counseling or assistance to a person in establishing or effecting a plan for the payment of his indebtedness, unless that counseling or assistance is provided by and is within the scope of the authorized practice of a debt adjuster licensed pursuant to chapter 676 of NRS.
(4) Providing advice or assistance to a buyer with regard to subparagraph (1) or (2).
(b) Does not include: [As you can see, only licensed attorneys should modify, restructure a loan or do any credit advice] (1) A person organized, chartered or holding a license or authorization certificate to make loans or extensions of credit pursuant to the laws of this state or the United States who is subject to regulation and supervision by an officer or agency of this state or the United States.
(2) A bank, credit union or savings and loan institution whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund or a private insurer approved pursuant to NRS 678.755.
(3) A person licensed as a real estate broker by this state where the person is acting within the course and scope of that license, unless the person is rendering those services in the course and scope of employment by or other affiliation with an organization.
(4) A person licensed to practice law in this state where the person renders services within the course and scope of his practice as an attorney at law, unless the person is rendering those services in the course and scope of employment by or other affiliation with an organization.
(5) A broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission where the broker-dealer is acting within the course and scope of such regulation.
(6) A person licensed as a debt adjuster pursuant to chapter 676 of NRS.
(7) A reporting agency.
6. “Reporting agency” means a person who, for fees, dues or on a cooperative nonprofit basis, regularly engages in whole or in part in the business of assembling or evaluating information regarding the credit of or other information regarding consumers to furnish consumer reports to third parties, regardless of the means or facility of commerce used to prepare or furnish the consumer reports. The term does not include:
(a) A person solely for the reason that he conveys a decision regarding whether to guarantee a check in response to a request by a third party;
(b) A person who obtains or creates a consumer report and provides the report or information contained in it to a subsidiary or affiliate; or
(c) A person licensed pursuant to chapter 463 of NRS.
Section NRS 598.746 deals with Prohibited acts: Receiving money before complete performance; receiving money for referral to provider of credit; misleading statements; other fraudulent or deceptive acts. An organization and its agents, employees and representatives who sell or attempt to sell the services of the organization, shall not:
1. Charge or receive any money or other valuable consideration before full and complete performance of the services the organization has agreed to perform for or on behalf of the buyer.
2. Charge or receive any money or other valuable consideration solely for referral of the buyer to a retail seller who will or may extend credit to the buyer, if the credit which is or will be extended to the buyer is upon substantially the same terms as those available to the general public.
3. Make, counsel or advise any buyer to make, any statement which is untrue or misleading and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, to a consumer credit reporting agency or to any person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit, with respect to a buyer’s creditworthiness, credit standing or credit capacity.
4. Make or use any untrue or misleading representations in the offer or sale of the services of an organization. For the purposes of this subsection, a “misleading representation” includes a guarantee that:
(a) The organization is able to remove information that is adverse to the buyer’s ability to obtain credit from the buyer’s credit record, history or rating.
(b) The organization is able to obtain an extension of credit for the buyer regardless of the buyer’s existing credit record, history or rating.
5. Engage, directly or indirectly, in any act, practice or course of business which operates or would operate as a fraud or deception upon any person in connection with the offer or sale of the services of an organization.
6. Remove, or assist or advise the buyer to remove from the buyer’s credit record, history or rating, information that is adverse to the buyer’s ability to obtain credit if the information is accurate and not obsolete.
7. Create, or assist or advise the buyer to create a new credit record, history or rating by using a different name, address, social security number, employee identification number or other misleading information.
8. Attempt to transfer or assign the organization’s certificate of registration.
9. Submit a buyer’s dispute to a consumer credit reporting agency without the buyer’s knowledge.
10. Call, or authorize any other person who is not the buyer to call a consumer credit reporting agency and portray himself as the buyer.
NRS 598.752 Organization to register and deposit security before advertising services or conducting business in this State; separate security not required from salesperson, agent or representative of organization; regulations.
1. Before advertising its services or conducting business in this State, an organization must register pursuant to NRS 598.721 and deposit security in the amount of $100,000 with the Division pursuant to NRS 598.726. The security must be conditioned on compliance by the organization with the provisions of NRS 598.746 to 598.772, inclusive, and the terms of its contracts with buyers.
2. If an organization has deposited the required security, a salesperson, agent or representative of the organization who sells its services is not required to deposit his own separate security. For the purposes of this subsection, a person is a salesman, agent or representative of an organization if:
(a) He does business under the same name as the organization; or
(b) The organization and the issuer of the security certify in writing that the security covers the salesperson, agent or representative.
3. The Division shall adopt such regulations as it deems necessary to carry out the provisions of this section.
NRS 598.757 Organization to provide buyer certain information in writing.
1. Before the execution of a contract between the buyer and an organization or before the receipt by the organization of any money or other valuable consideration, whichever occurs first, the organization must provide to the buyer, in writing:
(a) A statement:
(1) That the buyer has a right pursuant to 15 U.S.C. §§ 1681g and 1681h to receive disclosure of all information, except medical information, in any file on him maintained by a consumer credit reporting agency;
(2) That 15 U.S.C. § 1681j requires that this disclosure be made free to the buyer if he requests it within 30 days after receipt of notice of a denial of credit;
(3) Of the approximate cost to the buyer of receiving this disclosure when there has not been a denial of credit; and
(4) That the buyer has the right pursuant to 15 U.S.C. § 1681i to dispute the completeness or accuracy of any item contained in any file on him maintained by any consumer credit reporting agency.
(b) A detailed description of the services to be performed by the organization for the buyer and the total amount the buyer will become obligated to pay for the services.
(c) A statement that the buyer has a right to proceed against the security deposited with the Division by the organization under the circumstances and in the manner set forth in NRS 598.731 and 598.736. The statement provided pursuant to this paragraph must include the name and address of the issuer of the security.
(d) A statement that the buyer may cancel a contract for the services of an organization within 5 days after its execution by written notice mailed or delivered to the organization.
(e) A statement identifying the availability of any nonprofit association which provides services similar to those offered by the organization. The statement provided pursuant to this paragraph must include the association’s telephone number, including the association’s national toll-free telephone number, if any.
2. The written information provided pursuant to subsection 1 must be printed in at least 10-point bold type and must include the following statement or a similar statement approved by the Division:
RIGHTS OF CONSUMERS REGARDING CREDIT FILES
PURSUANT TO STATE AND FEDERAL LAW
You have the right to obtain a copy of your credit file from a consumer credit reporting agency. There is no fee if, within the past 30 days, you have been turned down for credit, employment or insurance because of information in your credit report. The consumer credit reporting agency is obligated to provide someone to help you interpret the information in your credit file.
You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit service organization has the right to have accurate, current and verifiable information removed from your credit report. Generally, under the Fair Credit Reporting Act, the consumer credit reporting agency is obligated to remove accurate, negative information from your report only if it is more than 7 years old and bankruptcy information can be reported for 10 years. If you have notified a credit reporting agency that you dispute the accuracy of information in your credit file, the consumer credit reporting agency is obligated to make an investigation and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any relevant information and copies of all documents you have concerning the disputed information should be given to the consumer credit reporting agency. If the investigation does not resolve the dispute to your satisfaction, you may send a brief statement to the consumer credit reporting agency to keep in your credit file, explaining why you think the information in the credit file is inaccurate. The consumer credit reporting agency is obligated to include your statement or a summary of your statement about disputed information in any report it issues about you.
RIGHTS OF CONSUMERS REGARDING
CANCELLATION OF A CONTRACT
You have a right to give written notice of your intent to cancel a contract with a credit service organization for any reason within 5 working days from the date you signed it. If for any reason you do cancel a contract during this time, you do not owe any money. You have a right to sue a credit service organization if it misleads you.
3. The organization shall retain a copy of the written information it provides pursuant to the requirements of subsections 1 and 2 for not less than 2 years.
NRS 598.762 Requirements of contract for purchase of services; copy of contract must be retained by organization.
1. A contract between a buyer and an organization for the purchase of the services of the organization:
(a) Must be in writing;
(b) Must be signed by the buyer;
(c) Must be dated; and
(d) Must clearly indicate above the signature line that the buyer may cancel the contract within 5 days after its execution by giving written notice to the organization of his intent to cancel the contract. If the notice is mailed, it must be postmarked not later than 5 days after the execution of the contract.
2. A copy of each contract executed by a buyer and an organization must be retained by the organization for not less than 2 years.
NRS 598.767 Organization to maintain registered agent for service of legal process. An organization shall file with the Division the information required pursuant to NRS 77.310 and continuously maintain a registered agent for service of legal process.
NRS 598.772 Waiver of statutory rights prohibited; burden of proof upon person claiming exemption or exception from definition.
1. Any waiver by a buyer of the provisions of NRS 598.746 to 598.777, inclusive, is contrary to public policy and is void and unenforceable. Any attempt by an organization to have a buyer waive rights given by NRS 598.746 to 598.777, inclusive, is unlawful.
2. In any proceeding involving NRS 598.741 to 598.787, inclusive, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
(Added to NRS by 1987, 1520; A 1993, 2277)—(Substituted in revision for NRS 598.286)
NRS 598.777 Buyer’s action for recovery of damages or injunctive relief; attorney’s fees; punitive damages. A buyer injured by a violation of NRS 598.746 to 598.772, inclusive, or by a breach by an organization of a contract subject to those sections, may bring an action for recovery of damages, for injunctive relief or for both recovery of damages and injunctive relief. Judgment for damages must be entered for actual damages, but in no case less than the amount paid by the buyer to the organization, plus reasonable attorney’s fees and costs. If the court deems it proper, the court may award punitive damages.
(Added to NRS by 1987, 1520; A 1993, 2277)—(Substituted in revision for NRS 598.287)
NRS 598.782 Criminal penalty.
1. Except as otherwise provided in subsection 2, a person who violates any provision of NRS 598.746 to 598.772, inclusive, is guilty of a misdemeanor.
2. A person who breaches a contract subject to NRS 598.746 to 598.772, inclusive, is not guilty of a misdemeanor solely because of the breach.
NRS 598.787 Provisions and remedies not exclusive; violation constitutes deceptive trade practice.
1. The provisions of NRS 598.746 to 598.777, inclusive, are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with any other applicable provision of law.
2. The remedies provided in NRS 598.772 and 598.777 for violation of any provision of NRS 598.746 to 598.772, inclusive, are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.
3. Any violation of NRS 598.746 to 598.772, inclusive, constitutes a deceptive trade practice for the purposes of NRS 598.0903 to 598.0999, inclusive.
NRS 598.900 Untrue or misleading statements by organization prohibited; effect on contract. An organization shall not make any untrue or misleading representations to the buyer or in its advertising. A contract for membership in an organization where any untrue or misleading representation was made to the buyer or the buyer was made aware of the untrue or misleading representation is void and unenforceable by the organization.
NRS 598.905 Correction of violations. If an organization does not comply with the provisions of NRS 598.840 to 598.895, inclusive, or 598.905 to 598.930, inclusive, the buyer may agree in writing, after a full disclosure, to any correction of the defect if the correction is made within 30 days after he signs the contract for membership in the organization. If the buyer does not consent, or if the correction is not made within the 30-day period, the contract is rescinded, and the buyer must be given a full refund.
NRS 598.910 Effect of transfer by organization of its obligation to provide goods or services; circumstances under which buyer may rescind contract.
1. If an organization transfers its obligation to provide goods or services to a buyer to another organization which provides substantially fewer goods or services, the buyer may consent to the transfer in writing after a full disclosure to him of the goods and services to be provided by the new organization. If a buyer does not consent, his contract is rescinded, and he must be given a refund pro rata based on the amount of time he was a member of the organization.
2. The buyer may rescind the contract and the organization shall give him a refund pro rata based on the amount of time he was a member of the organization if any of the following circumstances occur:
(a) Except as otherwise provided in this paragraph, the organization moves its place of business which is geographically closest to the buyer’s residence, as indicated in the contract, more than 20 miles farther from the buyer’s residence than it was when the contract for membership was signed. The provisions of this paragraph do not apply if:
(1) The organization offers the buyer a substantially equivalent at-home ordering service through at least one other generally available channel of communication, including, without limitation, the Internet;
(2) The at-home ordering service offers the same categories of goods and services provided by the organization at the time the organization moves its place of business; and
(3) Any goods ordered by the buyer through the at-home ordering service are shipped, at the election of the buyer, to either the buyer’s residence, as indicated in the contract, or a freight receiver within 20 miles of that residence.
(b) Within 6 months after the contract for membership was signed, the organization stops providing any category of goods or services represented to the buyer to be available when he signed the contract.
NRS 598.915 Waiver of statutory rights is void. Any waiver by the buyer of the provisions of NRS 598.840 to 598.930, inclusive, is contrary to public policy and void.
NRS 598.920 Actions against organization; restitution, treble damages, attorney’s fees and costs may be awarded.
1. A cause of action or a defense of a buyer against the organization is not extinguished by the transfer, assignment or sale of the contract for membership in the organization to a third party.
2. In an action by a buyer against an organization for violation of the provisions of NRS 598.840 to 598.930, inclusive, the court may award restitution, treble damages, reasonable attorney’s fees and costs. If the course of action was based on a violation of NRS 598.900, the court may award the buyer $1,000, reasonable attorney’s fees and costs, or restitution, treble damages, reasonable attorney’s fees and costs, whichever is greater.
NRS 598.930 Remedies not exclusive; violation constitutes deceptive trade practice.
1. The remedies, duties and prohibitions of NRS 598.840 to 598.930, inclusive, are not exclusive and are in addition to any other remedies provided by law.
<em>This is a sample complaint to enjoin your impending foreclosure and it is meant for only education purposes in this foreclosure crisis facing the state of Nevada. Again, and as usual, please consult a Nevada Licensed Attorney for any further questions.
[Names of attorneys]
[Attorneys’ business address]
Clark County, Nevada[Plaintiff’s name],
) Case No.: [Case number]
Plaintiff, complaining of the defendants and in support of her motion for injunctive relief, alleges as follows:
Nature of Action
1. Plaintiff brings this action for damages and to enjoin a foreclosure proceeding instituted against her by the current holder of her mortgage loan, JJJ.P. Morgan Chase Bank. She contends that the originator of the loan in question, R & B Funding Group, Inc. acted unlawfully in connection with the origination of a mortgage loan made to her in April, 2006 by failing to comply with Nevada laws prohibiting the financing of fees in excess of five percent of the loan amount, and by failing to ensure that she was provided with financial counseling prior to consummating this “high cost” loan. Plaintiff further contends that Royal Mortgage & Financial Service Centers, Inc. which served as her mortgage broker, breached its fiduciary duty to her. Plaintiff further alleges that the practices of R & B Funding Group, Inc. as well as New Royal Mortgage & Financial Service Centers, Inc. constituted unfair and deceptive practices.
2. Plaintiff is a citizen and resident of the town of Consumerville in Las Vegas, Nevada.
3. Defendant, R & B Funding Group, Inc., D/B/A National Builders (hereinafter “R & B”) is, upon information and belief, a Nevada Corporation and originated Plaintiff’s mortgage loan together with a mortgage broker, Royal Mortgage & Financial Service Centers, Inc., pursuant to arrangements made by R & B.
4. Defendant, JJJ.P. Morgan Chase Bank (hereinafter “J.P. Morgan”), is, upon information and belief, the creditor and/or the trust administrator of a trust that is assignee of Plaintiff’s loan, or otherwise holds Plaintiff’s loan.
5. Defendant New Royal Mortgage & Financial Service Centers, Inc. (hereinafter “Royal Mortgage”), is, upon information and belief, a corporation organized under the laws of North Carolina and performed mortgage brokerage and/or loan origination services pursuant to arrangements made by R & B at times pertinent to the events referenced in this complaint.
6. Defendants XXXXXXXXXXX and XXXXXXXX are parties to this action only in their capacity as Substitute Trustees of Plaintiff’s Deed of Trust, and the only relief sought against Defendant Weld and/or Smith is injunctive relief enjoining foreclosure of the deed of trust.
7. Plaintiff XXXXXXX is an 76-year-old widow. She is in failing health and has limited understanding of financial transactions, including the instant transaction.
8. Consumer lives in a modest home on Main Road in Consumerville, in North Las Vegas, Nevada. She and her late husband purchased this home almost fifty years ago, and she has lived there ever since.
9. In the spring of 2003, Consumer’s son, Son Consumer contacted a mortgage broker about refinancing Consumer’s existing mortgage. At that time, Consumer’s home was secured by a mortgage with Bank of America, Inc.
10. On information and belief, John Consumer contacted an individual named Steve Smith, who, upon information and belief, was employed by Defendant mortgage broker Royal Mortgage.
11. Sometime in March or April 2003, XXXXXXX Smith contacted Consumer by calling her on the telephone and informed her that he would arrange for the refinancing of Plaintiff’s home loan.
12. Steve Smith took information from Plaintiff over the telephone concerning her finances, and upon information and belief, prepared loan application documents for Plaintiff in order to secure a loan with Defendant R & B.
13. At all times relevant hereto, Steve Smith was an employee and agent of defendant Royal Mortgage.
14. Upon information and belief, all contacts with Steve Smith and/or Royal Mortgage, were transacted over the telephone.
15. On approximately April 18, 2003, a loan closing was conducted in Consumer’s living room. On information and belief, a representative from the law firm of Brock, Scott & Ingersoll went to Consumer’s home and asked her to sign many documents. Upon information and belief, Defendant R & B, and not Consumer, selected this law firm to be the settlement agent in this transaction.
16. At the time that the loan closed, Consumer signed a HUD-1 Settlement Statement dated April 18, 2002, which listed the various loan related expenses.
17. The amount of the loan was $37,000.00.
18. Among the various fees charged in connection with Plaintiff’s loan included a “loan origination fee” of $395, a “mortgage broker fee” of $1424.50, a “settlement fee” of $100, a “title search” fee of $425, a “lender amount” of $35, and a “doc prep” fee of $100.
19. According to the Federal Truth-in-Lending Act Disclosure Statement signed at the closing, Consumer was to pay monthly payments of $298.50 for 30 years. The total of payments as disclosed is $107,460.00.
20. The total of points and fees paid by plaintiffs at or before the loan closing exceeded 5% of the “total loan amount,” as that term is defined by NRSXXXXXX were financed within the loan.
21. The loan was secured against title to plaintiff’s principal dwelling, located at Main Road, Consumerville, North Carolina, by a Deed of Trust which is recorded in Book 00 at Page 00 of the Orange County Registry.
22. The proceeds of the loan were primarily for personal, family, or household purposes.
23. Plaintiff was not advised that the loan was a “high cost-home loan” as defined in NRSXXXXX.
24. Upon information and belief, no party to the transaction received a certification from a counselor approved by the Nevada Housing Finance Agency verifying that plaintiff had been counseled as to the advisability of the loan transaction.
25. Plaintiff was not counseled by a counselor approved by the North Carolina Housing Finance Agency as to the advisability of the loan transaction.
26. Defendant, R & B had a duty to inform plaintiff that the loan transaction was a “high-cost home loan” and, as such, that this loan required the various counseling protections and safeguards embraced by Chapter 24 of the North Carolina General Statutes.
27. Defendant, R & B breached this duty and the plaintiff was directly, proximately and foreseeably damaged by the breach of this duty.
28. Upon information and belief, defendant Royal Mortgage did not provide bona fide or legitimate mortgage broker services to plaintiff, even though plaintiff was charged $1424.50 by defendant, Royal Mortgage, for mortgage broker services.
29. The loan transaction in question was intended to refinance Plaintiff’s then existing first mortgage with Bank of America in the amount of $26,635.37, as indicated by line 1513 on the HUD-1 Settlement Statement. On information and belief, a check was disbursed by the closing agent three days after the loan closing to Bank of America, but said check was neither cashed nor applied to Plaintiff’s mortgage account at Bank of America. Bank of America did not satisfy the deed of trust, but instead continued to withdraw monthly payments from Plaintiff’s checking account and applied them to her old mortgage account. Plaintiff attempted to make payments to the servicer of the mortgage that is the subject of this action, but as money was being withdrawn from her checking account each month by Bank of America, her checks on the new mortgage bounced.
30. On or about October 17, 2002, Defendant J.P. Morgan Chase Bank as Trustee, through its substitute trustee, Defendants Weld and/or Smith, filed a foreclosure action against the plaintiff, alleging that the plaintiff is in default in payments under the terms of the April 2002 loan contract. The foreclosure action is filed as 02 SP 000.
31. Plaintiff, who is unsophisticated, did not realize the bank’s error. After getting several collection calls and letters, she finally sought the help of a social worker from the Orange County Department of Aging, who in turn sought assistance from the North Carolina Attorney General’s Consumer Protection Division. As a result of these inquiries, the closing agent resubmitted a check to Bank of America on October 29, 2002, and upon information and belief, Plaintiff’s prior mortgage was satisfied shortly thereafter.
32. Despite being apprised of the circumstances surrounding the failure of the April 2002 lender to pay off Plaintiff’s prior mortgage, the substitute trustee refused to delay or stop the foreclosure proceedings. The foreclosure hearing before the clerk was scheduled for November 18, 2002.
VIOLATION OF CHAPTER 24 OF THE Nevada (Against Defendant R & B, and against J.P. Morgan Chase Bank as
Trustee in its capacity as assignee or holder of interest in Plaintiff’s loan)
33. All paragraphs of this complaint are incorporated herein as if fully restated.
34. The loan transaction in question was: a “high-cost home loan” which did not exceed the lesser of (i) the conforming loan size limit for a single family dwelling as established by FNMA or (ii) three hundred thousand dollars; and was incurred by natural persons primarily for personal, family, or household purposes; and was secured by a deed of trust against property occupied as the borrower’s principal dwelling as defined in XXXXXXXXXX. With willful and corrupt intent, the lender, Defendant, R & B, and/or its agents, made and/or arranged the loan without the counseling required under Chapter XX of the Nevada General Statutes and specifically under XXXXXXXXXXXXThe loan was made without certification from a counselor approved by the North Carolina Housing Finance Agency that the borrowers received counseling on the advisability of the loan transaction and the appropriate loan for the borrowers. These acts and practices entitle Plaintiff to the remedies set out in XXXXXXXXX. Defendant R & B, together with Defendants J.P. Morgan, as Trustee, are liable as holders of interests in Plaintiff’s loan.
Count TwoUNFAIR AND DECEPTIVE ACTS AND PRACTICES
AS DEFINED IN NRS xxxxxxxxxxxxxxx(Against Defendant R & B, and against J.P. Morgan Chase Bank as Trustee in its capacity as assignee or holder of interest in Plaintiff’s loan)
35. All paragraphs of this complaint are incorporated herein as if fully restated.
36. Defendants’ acts as described above, and particularly those acts specifically set out in Count One, proximately damaged Plaintiff, are in and affecting commerce, violate public policy, have the capacity to deceive an ordinary consumer, are unscrupulous, immoral, and oppressive, and constitute unfair and deceptive trade practices under NRSXXXXXXXXXX1, thereby entitling Plaintiff to three times her actual damages plus a reasonable attorney’s fee pursuant to NRSXXXXX and XXX. The remedy requested pursuant to this count which relates to acts or practices described in Count One is plead in the alternative to the relief requested pursuant to Count One, as prescribed in XXXXXXE(d). Defendant R & B, together with Defendants J.P. Morgan are liable as holders of interests in Plaintiff’s loan.
BREACH OF FIDUCIARY DUTIES(Against Defendant Royal Mortgage)37. All paragraphs of this complaint are incorporated herein as if fully restated.
38. Defendant, Royal Mortgage, upon information and belief, was the employer of and had as its agent Steve Smith, who solicited and intentionally induced the trust, confidence and reliance of Plaintiff as her mortgage loan counselor and guide, and Smith and Royal Mortgage occupied the position of Plaintiff’s mortgage broker. The position of trust, confidence and reliance that Steve Smith and Royal Mortgage occupied with respect to Plaintiff and the position they occupied as Plaintiff’s mortgage broker created fiduciary duties owed by Smith and Royal Mortgage to Plaintiff which were breached by the conduct set forth above, that was done for the sake of self dealing and unjustified profits taken by Smith and Royal Mortgage through the broker fee of $1424.50.
39. Plaintiff is entitled to remedies that include imposition of a constructive trust upon the proceeds of the transaction as were paid to Defendant, Royal Mortgage and Steve Smith, to an order requiring disgorgement of all proceeds paid to Royal Mortgage and Smith and to other legal and equitable remedies to be imposed jointly and severally upon Defendant Royal Mortgage.
UNFAIR AND DECEPTIVE ACTS AND PRACTICES
AS DEFINED IN NRSXXXXXXXXXX1(Against Defendant Royal Mortgage)
40. All paragraphs of this complaint are incorporated herein as if fully restated.
41. The acts of Defendant Royal Mortgage as described above, and particularly those acts specifically set out in Count Three, proximately damaged plaintiff, are in and affecting commerce, violate public policy, have the capacity to deceive an ordinary consumer, are unscrupulous, immoral, and oppressive, and constitute unfair and deceptive trade practices under N.RSXXXX, thereby entitling plaintiff to three times her actual damages plus a reasonable attorney’s fee pursuant to N.RSXXXXXXX§§ 75-16 and 7.
Request for ReliefWHEREFORE, Plaintiff requests:
1. That Plaintiff be awarded, pursuant to Count One, monetary damages in the amount of double recovery of any interest paid on this loan together with a Declaratory Order that the remaining interest due under the loan is forfeited.
2. That Plaintiff be awarded, pursuant to Count Two, three times her actual damages plus a reasonable attorney’s fee pursuant to NRSXXXXXXC.G.S. 75-16 and 75-16.1, upon the condition that the remedy pursuant to Count Two, is in the alternative to the relief requested pursuant to Count One, as may NRSXXXXXXC.G.S. 24-1.1E(d);
3. That Plaintiff be awarded, pursuant to Counts Three, an Order that Defendant Royal Mortgage disgorge and pay to Plaintiff all proceeds paid to it and by any party in connection with the transaction.
4. That Plaintiff be awarded, pursuant to Count Four, three times her actual damages plus a reasonable attorney’s fee to be paid by Defendant Royal Mortgage;
5. That the foreclosure action brought by the substitute trustees on behalf of Defendant JP Morgan Chase Bank against the Plaintiff be temporarily and preliminary enjoined pending a final adjudication of this action;
6. That the Court award such other relief as it deems just and proper;
7. That this case be tried by a jury.
This the ______ day of November, 2009.
Dated this [Date]
Today, we are leaving the omnipresent and of course omnipotent lenders aside, and discussing the role of the servicer. Your servicer is no less omnipotent in any way. He does everything on behalf of much covered lenders. Servicer, as you may know, are not the lenders: they just service your loans. They also do an important job: they hide the real lenders from you. Servicers take out their cut and send the remaining payments to the lenders. This can be clarified better if you know the traditional role of the landlord and property manager. They keep and maintain all the record of the lenders and are accountable to them for this purpose. The property manager just manages the property, takes his cut, and sends the remaining amount along with the property audits and accounting to the landlord who generally is an absentee landlord. Again, your lenders may be in USA, somewhere in Bahamas or in southwest China. Most mortgage loans are pooled and sold to investors in the secondary market. This process is called securitization. Basically, it is little complex topic, and we may leave it for another discussion, but securitization is the root cause of our current financial problems. The loans are packaged, bundled and sold as security to various investors. Again, your servicer collects all the payments, maintain all necessary accounts, including escrow accounts for taxes, insurance, property taxes etc. The servicer receives a percentage of all this collection. The rights to service, mortgage loans can be sold and of course purchased.
Sometimes investors like Freddie Mac and Fannie Mae enters into this game with servicers to administer the mortgages. The servicers do not hold any interests in these loans which they service. You may have noticed that the servicers very intelligently and shrewdly hide the names of the lenders. There is a way to get the name of the lenders which probably only attorneys can do. Our office also can help in this regard. Oh yes, we make them disclose the names of your lenders. That is a specific job and only Nevada licensed attorney should handle it.
The original of any note sold to investors must be endorsed in blank and delivered to the investor’s document custodian. The servicer is assigned the mortgage. However, the servicer is then required to assign the mortgage to the investor, but this assignment is unrecorded. Thereafter the servicer will be the mortgagee of record to ensure all those legal notices which they continuously send to borrowers.
How to Challenge the Servicers Standing to Foreclose?
This is the most crucial question, and we are going to discuss it with little bit more details here. Okay, when a foreclosure action is initiated, the servicers’ standing to bring any action mostly depends on state statues and case laws. Here, comes the tricky part. It is common for servicers to file the foreclosure action through an investor or trust is the actual holder of note and mortgage. A challenge can be very successful from a borrower where state law clearly defines who is the holder of the note, and defines the mortgage as the real party in interest. Let us say in a state for strict foreclosure, the plaintiff must prove by a preponderance of evidence that it is the owners of the note and mortgage and the borrower defaulted on the note.
The servicer has only rights to collect mortgage payments from you. It cannot foreclose on you because this is not included or generally not included in the right of assignment from the lender to servicer. In Nicholson v. Washington Mutual the court, (2001 WL 1992418 (Tex. App. Aug. 32, 2001) (not designated for publication (deed of trust must be strictly construed. There was no authority in the deed of trust for the lender to delegate these tasks to the servicer. Some other courts have also found that the servicer has a pecuniary interest in the mortgage.
What should an Attorney Do?
The attorney (again a Nevada Licensed Attorney, not an attorney-affiliated or attorney-backed, what is this is a joke, we are not biased, we tell the truth) should examine the agreement between the servicers and holder to find out the contractual rights to foreclose, or to release the interest right. However, if the servicer brings an action under its name, without disclosing the true holder of the mortgage, the foreclosure may be delayed by court and it can be asked to identify the real party in interest. (in re Viencek, 273 B.R. 354 (Bankr. N.D.Y. 2002) delay granted by Court for servicer to amend proof of claim to identify actual creditor).
More later. How bout’ some discussion on MERS now? The servicers may have an economic interest, but MERS have none. MERS do not have any active interest and they don’ become holder of the loans. They do not have any beneficial interest in the mortgage. They are not trustee and can be nominee only, holding title to the mortgage and but not the note. Despite these shortcomings, MERS claims that they are the nominee of the lender and has the right to foreclose in their own name. They sometime commence foreclosures and later on will assign the mortgage to a servicer if the problem arises. Several courts have questioned their rights to foreclosue or have denied their right to foreclose.
VIA CERTIFIED MAIL
USA Federal Bank, FSB
Attn: Mortgage Loan Accounting Department
Re: Loan # 99999999
820 La Sconsa Dr.
Las Vegas, Nevada 89138
Dear Sir or Madam:
We have been retained to provide as attorney and to provide legal counsel to Mr. XYZ (authorization letter enclosed) to USA Federal Bank (“FSB”). FSB is the servicer of their mortgage loan at the above address. We dispute the amount that is owed according to the Monthly Billing Statement and request that you send us information about the fees, costs and escrow accounting on our loan. This is a “qualified written request” pursuant to the Real Estate Settlement and Procedures Act (section 2605(e)).
Specifically, we are requesting an itemization of the following:
1. A complete payment history, including but not limited to the dates and amounts of all the payments our client have made on the loan to date;
2. A breakdown of the amount of claimed arrears or delinquencies, including an itemization of all fees charged to the account;
3. An explanation of how the amount due on the Monthly Billing Statement ($1,000) was calculated and an explanation of why this amount was increased to $2,000 on August 1, 2005;
4. The payment dates, purpose of payment and recipient of any and all foreclosure fees and costs that have been charged to our account;
5. The payment dates, purpose of payment and recipient of all escrow items charged to our account since [date USA Federal Bank took over the servicing];
6. A breakdown of the current escrow charge showing how it is calculated and the reasons for any increase within the last 24 months; and
7. A copy of any annual escrow statements and notices of a shortage, deficiency or surplus, sent to us within the last three (3) years.
Thank you for taking the time to acknowledge and answer this request as required by the Real Estate Settlement and Procedures Act (section 2605(e)).
Very truly yours,
[Again, this is part of the education series and of course a dedication to “Fight Back Your Foreclosure”. Come on folks Don’t Just Walk Away From Your Homes. No attorney client relationship is sought and meant. As usual, see a Nevada Licensed Attorney for legal help]
To Whom It May Concern:
I represent the above mentioned clients concerning the loan transaction which they entered into with Aurora Loan Services. I have been authorized by my clients to rescind this transaction and hereby exercise that right pursuant to the Federal Truth in Lending Act, 15 U.S.C. § 1635, Regulation Z § 226.23.
The disclosure statement failed to provide all the required material disclosures correctly, including, but not limited to:
(a) The broker’s fee in this transaction is a prepaid finance charge but was erroneously disclosed as part of the amount financed. Consequently, the amount financed is overstated.
(b) Unless the disclosed prepaid finance charge is the broker’s fee, the prepaid finance charge and finance charge are understated.
(c) The disclosed payments do not equal the total of payments.
The security interest held by Countrywide is void upon our rescission. See 15 U.S.C. § 1635; Regulation Z § 226.23. Pursuant to the Regulation, you have twenty days after receipt of this notice of rescission to return to my clients all monies paid and to take action necessary or appropriate to reflect termination of the security interest.
My clients are hereby making a commitment of limited duration which will allow them to tender an amount due after appropriate credits are made by you to their account. Please be advised that if you do not cancel the security interest and return all consideration paid by our client prior to the expiration of our loan commitment, you will be responsible for actual and statutory damages pursuant to 15 U.S.C. § 1640(a).
We are prepared to discuss a tender obligation, should it arise, and satisfactory ways in which my clients may meet this obligation. Please be advised that if you do not cancel the security interest and return all consideration paid by our client within 20 days of receipt of this letter, you will be responsible for actual and statutory damages pursuant to 15 U.S.C. § 1640(a).
Until the expiry of twenty days, we still like to hear any proposals of loan modification including a reduction in their principal consistent with the current appraised price. Please also send me a copy of the clients’ payment history and other document showing the loan disbursements, loan charges, payments made, and current principal balance due.