Wednesday, February 11, 2015

Virginia Homeowner gets $60,000 in cash for keys as a result of the BOA's improper attempted foreclosure

While robo-signing has not had much traction in Virginia (most of the time, the judges view such practice as causing no damage to the debtor who remains liable for the debt and who is not facing more than one bank trying to collect the same debt), a Virginia homeowner was recently able to settle a foreclosure-related litigation for some $60,000 in cash.

The homeowner came to us for help after he suspected foul play on behalf of Bank of America attempting to foreclose on a CountryWide loan.  The homeowner had done lots of "homework" on his own was able to pick up on quite a few subtleties in his paperwork.

After reviewing the case, we were able to file certain pleadings exposing BOA's foul play.  We had built a record showing that the Bank was artificially strengthening its position with, at a minimum, improper documents and, at a maximum, outright fraud.  We will never know how the court would have resolved the issue, but the bank certainly did not want to take any chances, even though most robo-signing cases go nowhere in Virginia.  What can I say...  even robo-signing cases are different and it's all about each individual case.

As part of the settlement, the bank also had to correct errors on the homeowner's credit report and remove reporting of the property loan to the credit agencies as a default.  This is because, upon the resolution of the case, not only did the homeowner NOT owe any amount of money to the bank. -- The bank ended up paying money to the homeowner to atone for its earlier conduct.

At the end, all parties were able to move on, and our client was able to get out from under a bad loan with a hefty sum of cash in his pocket.  Not a bad way to have a fresh start, and way better than a straight bankruptcy in this particular case.

Wells Forgeo (aka Wells Fargo) Loses a String of Foreclosure Cases

Wells Forgeo (aka Wells Fargo) has been in the news lately after two judges recently ruled that its forgery of documents in foreclosure cases has reached such  epic proportions that turning a blind eye to it by the judges is kinda becoming difficult...
Incidentally, one of the opinions covered below addresses the burden of proof with respect to matters that enjoy a certain "presumption" of validity.  I blogged about that burden of proof a long time ago (expressing a view contrary to that of some major foreclosure defense commentators -- see here), now only to have that viewpoint validated.
Big banks hold great sway in Washington these days, far more than troubled
homeowners do. But outside the Beltway, many people remain caught in the
maw of the financial giants, which is why it is heartening when some judges
step into the fray.
Consider two opinions involving Wells Fargo, a bank that enjoys a
somewhat better reputation than many of its peers. On Monday, a judge in a
state court in Missouri ordered Wells to pay over $3 million in punitive
damages and other costs for abusing a borrower. Then, on Thursday, a judge
in Federal Bankruptcy Court in suburban New York ruled on behalf of another
borrower, concluding that there was substantial evidence Wells Fargo forged
documents when it foreclosed on a property.
It was not a good week on the litigation front for Wells Fargo.
The award in Missouri went to David and Crystal Holm of Holt, Mo., a
town northeast of Kansas City with a population of 450. For the last six and ahalf years, the Holms have battled Wells Fargo over a foreclosure sale of their
$142,000 property. As they fought against what they considered a wrongful
taking of their property, they remained in the home, which they built
themselves in 1997 and where they were married.
According to court filings, the Holms fell behind on their mortgage in
spring 2008 after a storm damaged the property. They quickly put together
the roughly $10,000 needed to bring the loan current, and Wells agreed to
reinstate the mortgage one day before a scheduled foreclosure sale.
The couple, who have a 12­year­old daughter, scrambled to do what Wells
required: fax a copy of a certified check to one office and send it by overnight
mail to another. The next day, the bank foreclosed anyway. Freddie Mac
bought the Holms’ 5.5­acre property.
Lawyers in the Missouri case and the New York matter contended that
Wells had moved to foreclose on both properties even though the bank had no
proof that it possessed the notes underlying the mortgages. This is a common
and often persuasive argument, given the documentation failures that were
rife in the mortgage industry.
Another common element in such cases — conflicts of interest in
mortgage loan servicing — also seemed to disturb the judge overseeing the
Holm matter. An employee of Freddie Mac testified that it would have
welcomed a reinstatement of the Holms’ mortgage. But Wells stood to make
more money foreclosing on the couple’s home, an expert witness in the case
“Defendant Wells Fargo’s deceptive and intentional conduct displayed a
complete and total disregard for the rights of David and Crystal Holm,” wrote
R. Brent Elliott, a circuit judge in Missouri’s 43rd Judicial District, in a Jan. 26
opinion. “Wells Fargo took its money and moved on, with complete disregard
to the human damage left in its wake.”
In addition to $2.9 million in punitive damages awarded to the Holms, . . .