Wednesday, September 24, 2014

Twisting Bank of America’s Arm to Modify Client’s Mortgage

Bank of America turned down our Satellite Beach client for loan modification at least thee times between 2010 and 2014.  The client was turned down when he first applied for loan modification before a foreclosure action was filed against him.  We obtained dismissal of the first foreclosure lawsuit filed against the client by Bank of America and collected a substantial amount of attorney’s fees from Bank of America following the dismissal of the first case.  From the attorney fee recovery we were able to refund to the client a substantial portion of the attorney’s fees he previously paid our firm.
In 2012 Bank of America (BofA) filed a second foreclosure case against our client and he once again retained our firm to defend the case.   We helped the client submit a second loan modification package and again the request for modification was denied.  In 2014 we received a letter from Bank of America indicating that our client might be eligible for loan modification of the mortgage on his family’s Space Coast home.  Once again the client gathered and I reviewed and personally submitted a complete loss mitigation packing include a Uniform Borrower Assistance Form (Form 710), pay-stubs, bank statements, profit and loss statements for the client’s self-employment income, tax returns, utility bills and other documents requested by Bank of America.  The client was once again turned down.  The client had now been turned down for just about every reason imaginable including an incomplete package (from before he retained counsel), to little income, to much income and to many missed payments.

The client’s second case was eventually set for trial.  I prepared his case for trial hoping to beat Bank of America a second time but the on the date of trial there were over 40 cases before the client’s on the docket and the case did not get reached.  In June of 2014, I won a trial against Bank of America for another Brevard County foreclosure client.  In that case the Court found that Bank of America’s notice of default did not comply with paragraph 22 of the mortgage.

In August of 2014, I took the deposition of Bank of America’s corporate representative at our Satellite Beach office.  After the deposition I showed the corporate representative the final judgment from the case we won against BofA in June and showed the representative that in both this case and the case we won in June BofA used nearly identical language on the notice of default.

I explained to the corporate representative and BofA’s attorney that what our client wanted was not to obtain a second dismissal only to be sued by Bank of America a third time.  What our client wanted was a great loan modification that would allow them to keep the only home their children has ever known. 

Since the loan was serviced by Bank of America but owned by Freddie Mac, U.S. Treasury rules that prohibit Freddic Mac from reducing principal limited the range of options available for loan modification.

I explained to Bank of America that what our client wanted was a Streamlined HAMP.  I requested that Bank of America put the underwater portion of the client’s loan in a non-interest bearing balloon so that our client would only have to pay interest on the actual value of the home. 

Without the submission of any additional documents, Bank of America agreed to modify the loan.  Apparently they did so using the very same paystubs and bank statements from the previously rejected loss mitigation package.

On August 30, 2014, Bank of America gave us what we asked for.  The client was offered and accepted a loan modification offer that put $176,000 of the client’s loan balance into a non-interest bearing balloon.  The client would now pay interest on the remaining $195,413 of his loan balance.  This brought the client’s payment for principal and interest down to $816.72 and with escrows of $746.54 the client’s total monthly payment will be $1,563.26.  The client’s new mortgage payment is at or below the cost to rent a similar home. Most importantly the new payment is a one that our client can afford for the long term and will keep the family in their home. 

About Shuster & Saben, LLC:  At Shuster & Saben, our files and clients get individualized attention.  Bank lawyers know that our firm is ready, willing and able to take foreclosure cases to trial.  Most Florida foreclosure firms that represent banks have lost a few cases to our firm.  If our client’s objective is loan modification or deed in lieu of foreclosure we let opposing counsel know this early and often and stay focused on our clients achieving our objectives. 

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