The Price of Justice

Why do we do what we do?

Foreclosure defense is a challenging area of the law. We almost always find ourselves standing in opposition to large lenders with deep pockets who retain large law firms with deep pockets. Many of our clients, in turn, are individual homeowners of limited means. The task is often daunting; difficult.

So why do we do it?

We must make one thing perfectly clear. We are not on a crusade. This is not like Don Quixote tilting at windmills. We do what we do for one principal reason—we believe that the law should be evenly and fairly applied to all irrespective of size, wealth or status. We believe in justice, not “just-us.” Unfairness, inequity and unlawful conduct deserve redress. We give the little guy a chance, a voice, and a day in court.

Consider for a moment the recent settlement agreement reached by the Consumer Financial Protection Bureau against the country’s largest non-bank mortgage loan servicer, Ocwen Financial Corporation. Ocwen was found to have engaged in “significant and systemic” misconduct at every stage of the mortgage servicing process. Under the terms of the agreement, Ocwen must provide $2 billion in principal reduction to underwater borrowers. Ocwen must also refund $125 million to the nearly 185,000 borrowers serviced by Ocwen or its subsidiaries whose homes have already been foreclosed. Finally, Ocwen will be subject to greater regulatory scrutiny going forward.

Sounds great, right? Justice was served, right?

We’re not so sure.

Let’s recap for a moment.

Over the past 3 years, a number of banks including Citibank, Chase, and Bank of America were found to have engaged in a systemic pattern of mortgage servicing abuse which resulted in millions of homeowners being unfairly treated. During the financial crash that began in 2008, most of these banks were supported with economic stimulus funds through the TARP program. Even those who didn’t receive direct TARP funds were supported with easy credit from the federal reserve system.  The least they could do is work in good faith with struggling homeowners (the taxpayers) on reasonable loan modifications. But did the big banks do even that? In many cases, no. They took the money, regrouped financially and are now swimming in profits while many homeowners were left to twist in the wind waiting on loan modification programs.

So let’s move on to Chapter 2.  The same banks that agreed to a $25 Billion National Mortgage Settlement as a result of serial and systemic mortgage servicing abuses are now trying to pass the buck.  Recently we have observed several of the largest banks divesting themselves of much of their mortgage servicing portfolios to companies like Ocwen.  So what does Ocwen do? As explained in Part I of this entry, the same thing that the big banks were accused of doing!

Ocwen was found to have charged unauthorized fees, forced homeowners to buy unnecessary insurance policies; lied in response to borrower complaints about excessive and unauthorized fees; lied about loan modification services when borrowers requested them; misplaced documents, ignored loan modification applications and illegally denied eligible borrowers a loan modification.  Here’s the proof.

Pretty wicked stuff. And caught in the middle? The real victim? You. The consumer. And traditional notions of justice.

As a part of the Ocwen settlement, (which looks good on paper), Ocwen was not required to admit any wrongdoing—thereby insulating Ocwen and Ocwen executives from legal exposure. The settlement calls for payments of $125 Million as compensation for approximately 185,000 borrowers who were affected by the misconduct; some of whom have already lost their homes. How much is the loss of your home worth?

Far more than they are being asked to pay.

As young law students we are taught that justice is blind. No....we are not crusaders, but we do believe in the law. Laws have been broken. The aggrieved deserve their day in court.

That is why we do what we do.

Because it is the right thing to do.

But time is of the essence, and you should contact us immediately before your legal claims are barred by time.  The law that limits your right to bring a legal action is called the statute of limitations, and there are many different limitations statutes with different time limits.  The most common legal claims that we litigate in foreclosure and loan servicing problems are breach of contract, trespass, negligence, bad faith, fraud, and unfair trade practices.  Breach of contract and trespass actions have a 6 year statute of limitations.  Negligence, fraud, and bad faith have a 2 year statute of limitations, and unfair trade practices have a 1 year statute of limitations.

Determining when the statute of limitations begins ticking down on your claims is not easy to do, even for experienced attorneys, so do not delay.  Please call one of our attorneys at (503) 846-0707 for a consultation. The help you need, and deserve, is just a telephone call away.

Bankruptcy 101: The Difference Between Chapter 7 and Chapter 13

Hundreds of thousands of Americans file for bankruptcy each year. But filing for bankruptcy does not mean that your debts are simply wiped away in one easy step. You must first be eligible to file a bankruptcy, and the duration and outcome of your bankruptcy case will depend on the type of bankruptcy filing for which you qualify.

And so this is where we will begin.

The two most common types of bankruptcy filings for consumers (as opposed to bankruptcies for businesses which work a little differently) are a Chapter 7 and a Chapter 13 bankruptcy. Under Chapter 7, consumers may have some of their assets sold, but are able to escape liability for most of their debts. The process usually takes just a few months. Under Chapter 13, consumers pay part or all of their debts under a tightly controlled budget plan overseen by a court-appointed bankruptcy trustee. The Chapter 13 process, also called reorganization bankruptcy, generally takes three to five years.

If you're considering filing for bankruptcy, your first step is to attend a credit counseling session run by a government-approved organization. Then you'll receive a certification confirming that you completed the course and then can file your case. During the session you'll be asked about your financial situation -- income, expenses, assets, debts and goals, and the counselor will help you figure out how to proceed.

If you make more than the median income for your state, you must complete a means test, which compares your monthly income and expenses to certain baseline costs set by a formula. If the means test shows that you have enough money left at the end of the month to pay at least part of your unsecured debts, such as credit cards, you must generally file under Chapter 13.

Many clients, at least initially, would prefer to file a Chapter 7 because they do not want to be in bankruptcy for years. That is understandable. However, there are some distinct advantages to a Chapter 13. First and foremost, Chapter 13 only requires you to pay back as much as you can afford.  It gives you a chance to stop any foreclosure proceedings, catch up on your mortgage payments, and possibly strip off unsecured second and third mortgages.

If you are considering a bankruptcy and have questions about how to proceed, please call our new associate attorney James Edmunds, at Garland Griffiths Knaupp, Attorneys, (503) 846-0707.

The help you need, and deserve, might be a telephone call away.

CONSUMER FINANCIAL PROTECTION BUREAU ORDERS OCWEN FINANCIAL CORPORATION TO PROVIDE $2 BILLION IN RELIEF TO HOMEOWNERS FOR SERVICING VIOLATIONS

The Consumer Financial Protection Bureau (CFPB), together with authorities in 49 states and the District of Columbia recently reached a $2.1 billion settlement agreement with the country’s largest non-bank mortgage loan servicer, Ocwen Financial Corporation.  The settlement is the result of the investigation of numerous complaints arising out of Ocwen’s alleged “significant and systemic” misconduct at every stage of the mortgage servicing process. Under the terms of the agreement, Ocwen must provide $2 billion in principal reduction to underwater borrowers. Ocwen must also refund $125 million to the nearly 185,000 borrowers serviced by Ocwen (or its subsidiaries Homeward Residential Holdings and Litton Loan Servicing) whose homes have already been foreclosed. Finally, Ocwen will be subject to greater regulatory scrutiny going forward.

“Deceptions and shortcuts in mortgage servicing will not be tolerated,” said CFPB Director Richard Cordray. “Ocwen took advantage of borrowers at every stage of the process. Today’s action sends a clear message that we will be vigilant about making sure that consumers are treated with the respect, dignity, and fairness they deserve.”

What does this settlement mean for you?

If you had or have a loan serviced by Ocwen, Homeward Residential Holdings (formerly American Home Mortgage Servicing) or Litton Servicing, you may be entitled to a refund or other legal action which could include a lawsuit against these servicers for wrongful foreclose. Garland Griffiths Knaupp Attorneys have represented clients in successful actions against American Home Mortgage (now Homeward Residential) in the past two years. We would like to help you if you suffered the loss of your home due to these predatory lending practices.

But time is of the essence, and you should contact us immediately before your legal claims are barred by law.  The body of laws which puts a time limit on your right to bring a legal action is called the statute of limitations, and there are many different limitations statutes with different time limits.  The most common legal claims that we litigate in foreclosure and loan servicing problems are breach of contract, trespass, negligence, bad faith, fraud, and unfair trade practices.  Breach of contract and trespass actions have a 6 year statute of limitations.  Negligence, fraud, and bad faith have a 2 year statute of limitations, and unfair trade practices have a 1 year statute of limitations.

Determining when a statute of limitations starts and other exceptions is not easy to do, even for experienced attorneys, so do not delay.  Please call one of our attorneys at (503) 846-0707 for a consultation. The help you need, and deserve, is just a telephone call away.