Monday, May 24, 2010

Loan Aid Leaves Some Worse Off

In a May 18, 2010, article the Wall Street Journal reports how many homeowners who participated in HAMP “Obama Plan” loan modifications are worse off after the experience. The story reports that one in four participants in the program gets dropped.
Back on January 24, 2010 in the blog post titled “Is HAMP one big Scam?” this blog explained that while HAMP was conceived by the government with good intentions many banks are tricking homeowners into making additional payments under HAMP trial plans and then denying permanent modifications.

The Wall Street Journal told the story of how Mia Parry bought a home in Phoenix in 2005 for $535,000 which would sell for around $250,000. Parry first requested a modification from a unit of Citigroup Inc., the servicer of her two mortgage loans, in June 2008.

Ms. Parry's application was turned down in late 2008, but President Obama's announcement of HAMP in February 2009 rekindled her hopes. Ms. Parry decided to keep making payments on her loans because she expected to qualify for this new program.

According to the Journal Citigroup started Parry on a HAMP trial in June 2009, and she made three payments. Then Citigroup told her there had been a mistake and she would need to go through another three-month trial.

At the end of that second trial, Ms. Parry said, Citigroup told her the investor that owned her first mortgage wasn't participating in HAMP, so she couldn't get a modification under that plan. During her trial period, Citigroup charged her more than $1,300 of "late charges" and "delinquency expenses," she said.”

Clearly, Citi knew or should have known whether the “investor’ was participating in HAMP. It is just too convenient that Ms. Parry apparently does not know who the “investor” is and Citi apparently is telling her the investor apparently without naming names so that she could confirm whether the statement in accurate. An argument can be made that since Citi participates in HAMP and received billions of TARP money and emergency aid from the government to keep it afloat, Citi must participate in HAMP on those loans it services.

Any homeowner who contemplates starting a trial modification should get the first and last name of the person they communicate with and confirm their oral communications by E-mail. If a homeowner is going to make three trial payments the bank should agree that if all three payments are made on a timely basis then the modification will be made permanent. If the bank makes an oral promise to this effect the homeowner should confirm the promise by E-mail or fax. If the bank will not make this promise the homeowner should refuse to send the trial payment and obtain legal representation.

The foreclosure attorneys in the Dade, Broward, and Brevard offices of Shuster & Saben are defending many homeowners in foreclosure where lenders are servicers broke their promises of giving permanent loan modification. We have also sued banks that promised modifications, took our client's money, and broke their promises. If you have a HAMP horror story we want to hear about it. If you are a Florida homeowner that is not in a county we serve we (currently we defend foreclosures in Dade, Broward, Palm Beach, Martin, St. Lucie, Indian River, Brevard, Orange, Collier and Lee Counties) we will be happy to refer you to a talented attorney in your area.

Thursday, May 20, 2010

Three Rules For Defeating the Bank's Motion For Summary Judgment in Foreclosure Cases

One of the attorneys in our Miami office watched a sole practitioner foreclosure defense attorney ( at attorney who is NOT associated with this firm) go down in flames on a summary judgment hearing before a Miami judge. As a civil litigation firm that successfully handled well over one thousand summary judgment hearings in general civil and insurance cases, I wanted to explain for other foreclosure lawyers and for homeowners some important pointers for successfully defending a lender’s motion for summary judgment in a foreclosure case.

Rule One: Always Bring a Court Reporter: In most (but by no means all) foreclosure cases if the bank wins their summary judgment motion then the bank wins their case and the Court will set a sale date in 30 to 90 days. A foreclosure defense lawyer should consider the bank’s motion for summary judgment to be equivalent of a trial. If the motion is lost, the homeowner is unlikely to get a second chance. Since the summary judgment is a critical part of the case it is ESSENTIAL that the homeowner’s attorney bring a court reporter to the hearing. By having a court reporter there is a record of the proceedings. If the judge makes an erroneous ruling either by disregarding applicable case law (controlling legal precedent) or disregarding evidence or lack of evidence then the homeowner will need a record of what happened in order to appeal the judge’s ruling.

Some judges do not like presiding over foreclosure cases. Some judges feel that if the homeowner did not pay the mortgage then the bank should win. One judge in Southwest Florida even commented to the press that the rapid processing of foreclosure cases was necessary so that real estate prices would stabilize. If there is no court reporter at the hearing the judge can rule against the homeowner and know that the homeowner will be unable to appeal. If a court reporter is present the judge knows that if he or she does not follow the law the judge may be reversed on appeal by a higher appellate Court. Most judges hate being reversed on an appeal. For a judge, being reversed means a higher Court writes an appellate order saying the judge made a mistake. Rulings of Florida’s appellate Courts are published in the Florida Law Weekly and Florida Law Weekly Supplement which is mailed to every Court in the state and sent by subscription to most Florida law firms.

Rule Two: Prepare: A lawyer can’t wing a summary judgment hearing. Meticulous preparation is required. The attorney should review the lender’s motion for summary judgment, analyze the case law cited in the motion, prepare a counter argument, anticipate the bank’s lawyer’s counter-attacks, and bring to Court three copies of each case they cite in opposition to the lender’s motion.

Rule Three: Do not waive objections: In the hearing where a Miami sole practitioner lost the case, the lawyer asked the Court to continue the summary judgment hearing because the bank had not provided discovery responses. Florida appellate courts have consistently held that summary judgment motions should not be heard until discovery is complete. The Court refused the continue the summary judgment. The judge rejected the last minute oral request for a continuance and explained the homeowners lawyer that if the bank did not provide discovery responses then the homeowner’s lawyer should have filed a motion to compel. The judge also felt that a motion for continuance should have been in writing and served long before the summary judgment hearing. If the homeowners lawyer was counting on a continuance perhaps he did not prepare as hard for the hearing. The solo should have reviewed their file when they received the motion for summary judgment and prepared a motion to compel if discovery was still outstanding.

I often wonder whether the foreclosure lawyers who change a “one time fixed fee” are able to spend adequate time to prepare and argue motions to compel. When clients go to the cheapest foreclosure lawyer, does that lawyer plan to bring a court reporter to the summary judgment hearing or even attend the hearing themselves. When homeowners interview prospective lawyers for foreclosure defense the homeowner should inquire about how the firm defends summary judgments and whether the price they are paying will include having a court reporter at the hearing.

The foreclosure lawyers in the Miami, Fort Lauderdale, and Melbourne offices of Shuster & Saben, begin preparing for summary judgment the moment we open the file. Our discovery is planned and drafted for the purpose of defeating the lender’s motion for summary judgment and winning cases for our clients. When lender’s do not provide the discovery we ask for we follow through with motion to compel. Most homeowners cannot successfully defeat summary judgment without an attorney. When hiring counsel the homeowner should act as soon as possible so that their lawyer has time to conduct discovery prior to the summary judgment hearing.

Tuesday, May 11, 2010

Firm Saves Another Homeowner

Shuster & Saben has saved yet another Miami Homeowner from Foreclosure. On July 31, 2009, our firm appeared on behalf of a South Florida homeowner who had failed to serve an answer to the lender Deutche Banks’ complaint for foreclosure. Prior to our firm being retained the lender obtained a default against our client and an order granting the lender’s motion for summary judgment. By the time our firm was retained the Court had already entered a final judgment of foreclosure and set a sale date.

Our client advised that she was unaware of the foreclosure action against her until she consulted a Realtor about a short sale of the property only to find out from the Realtor that the Court had entered an final judgment of foreclosure and had set a judicial sale date for mid August. Immediately after our firm was hired we prepared a verified (notarized) affidavit to quash service of process. The affidavit set forth the testimony of the homeowner that she was never served. After the lender’s counsel, David Stern, P.A. failed to refute our client’s affidavit with record evidence., the Court granted our motion to quash service, vacated the summary judgment and canceled the judicial sale. The lender will now have to start the case over again from the beginning by properly serving the homeowner. This time our client will have an aggressive legal defense. As of the today, our client has still yet to be served.

Monday, May 10, 2010

Shuster & Saben help Lee County client resolve foreclosure with successful short sale

After listing their Lee County property for short sale, our Bonita Spring clients received an rather unpleasant surprise from their lender, Chase Home Finance. The surprise came after a knock on the door when a process server shoved a summons and foreclosure lawsuit in their hands. The clients thought that since they were communicating with the bank the bank would not begin foreclosure proceedings. After the client spoke to their Realtor and financial adviser, they knew learned that banks often file foreclosure actions against homes listed for short sale. Banks take such actions to speed up the closing of their files. The bank’s strategy is to pursue the option (foreclosure or short sale) that will minimize their losses and close their file the quickest. The client, their Realtor and their adviser understood that by hiring a foreclosure lawyer to defend the foreclosure case they would have far more time to complete the short sale because they would avoid being defaulted by the lender’s attorney. They also understood that when a foreclosure cases is defended the costs for the bank increases greatly which makes the foreclosure option much less attractive to the bank than the short sale option.

Within thee days of being hired, the foreclosure lawyers at Shuster & Saben filed and answer and affirmative defenses on behalf of the client and sent out some twenty pages of discovery requests. Our firm also let the bank’s lawyer know that the client was attempting to sell the house in a short sale. The bank’s lawyer was also advised when the client received an offer. The client appreciated that while our firm handles many Lee County cases from our West Broward office, the firm is available to meet prospective Collier and Lee County clients in Naples or at our Bonita Srings consultation location at 28089 Vanderbilt Drive, Bonita Springs.

Less than three months from the date our firm was hired our client completed the short sale. The client had the benefit of having all of their short sale documents reviewed by the firm. Our client’s cost for defense of the case was under $1,500.00. Had the client ignored the foreclosure lawsuit and been defaulted the client would have been at risk for a deficiency judgment. Due to our client’s foresight the short sale was completed and the lawsuit filed against our client has been dismissed. Click the link below to review a copy of the Notice of Dismissal and Discharge of Lis Pendens.

Lee County Foreclosure Notice of Dismissal.

Thursday, May 6, 2010

Firm asks Court to thow out Bank of America suit after bank contacts firm client

Shuster & Saben Moves for Dismissal and Sanctions after BAC Home Loans (also known as Bank of America) makes direct contact with client:

One of the things almost every lawyer holds sacred is that if a person is represented by an attorney and the lawyer for the other side or the other side itself wants to talk to the represented person about the legal matter the lawyer or party must speak to the represented party’s attorney and not directly to represented party. In car accident cases when an insurance adjuster hears that an accident victim has retained counsel the conversation usually stops in mid sentence because a Florida insurance adjuster can be disciplined or even lose their license for speaking to a person who the adjuster knows is represented by counsel.

Perhaps BAC Home Loans thought it was above the law when it contacted a client of this firm after the Brevard County client retained Shuster & Saben Foreclosure Attorneys to defend the foreclosure action filed against their Space Coast home.

When our firm was retained we filed a notice of appearance and served a copy on Kass, Shuler, Solomon, Spector, Foyle and Singer, the law firm representing BAC Home Loans. The notice of appearance set forth that this firm objected to any exparte communication with our client and instructed BAC to “cease and desist all communications with this firm’s client.” Since some lawyers do not bother to carefully read notices of appearances we also wrote a letter Bank of America’s lawyer, Edward Pritchard telling him to “instruct the servicer to cease all communication with the Defendant.”

To see our notice of appearance click here.

To see our letter to Bank of America’s lawyer click here.

To make absolutely certain that our client would not be bothered by the lender we even sent a copy of the letter we sent to Bank of America’s lawyer directly to the loan servicer.

To our surprise six months later our client called us to advise that he received a settlement offer (loan modification offer) directly from Bank of America. The offer included a tiny reduction of the monthly loan payment but required our client to waive valuable legal rights and defenses he had to the foreclosure action. In our opinion putting such waivers into a loan modification is a violation of HAMP loan servicing guidelines.

Our firm has filed a motion with the Court requesting that the Court dismiss BAC Home Loans lawsuit with prejudice as a punishment for Bank of America’s underhanded and unethical action. A hearing will be held on this motion in late May.

To See a Copy of our motion click here.