Wednesday, October 21, 2015
In 2010, a Palm Bay homeowner in the building and construction trade hired Shuster & Saben, to defend the foreclosure J.P. Morgan Chase filed against his home. At the time, things did not look good for our client. After new construction came to a stand still, his small business was nearly wiped out and his income was cut by more than half. He owed more than double the value of home and had no way of catching up the year of payments he missed before the foreclosure was filed. Further, since J.P. Morgan, the original lender, was servicing the loan for Freddie Mac, the loan servicer was prohibited by U.S. Treasury regulations from reducing the principal balance.
We defended the case through the rest of 2010, and all of 2011, 2012, and in 2013 we defeated JP Morgan’s motion for summary judgment. While we defended the case, we also submitted several loan modification packages to JP Morgan Chase but each time our client was turned down. Our client was turned down for insufficient income, too many missed payments, and with each successive package there was a new reason why our client did not qualify. In 2014, Freddie Mac transferred servicing of the loan from JP Morgan Chase to Seterus. By 2014, Freddie Mac had also expanded the number of different loan modification options available on Freddie Mac loans and decreased the number of requirements and the amount of paperwork required to qualify for a new type of loan modification known as a Streamlined HAMP.
When Seterus, the new servicer requested that we submit a new loss mitigation package in 2015, our client was quite a bit skeptical. Our client asked, “Why should I submit another package? I have already been turned down at least four times.” I responded that “the worst thing Seterus could do was say no. Perhaps after five years without receiving one mortgage payment Freddie Mac and Seterus will be ready to make a deal rather than come duke it out at trial in Brevard County, Florida. "
Our client collected the documents we requested and I went over the submission carefully to make sure it was complete and that the client's expense ratios were in line with program guidelines. By 2015 our client’s income was moderately higher than it was 2010 which also improved his chance at getting a loan modification. After submission of the package our client was approved for a trial modification. Once we mailed in the first trial payment, we called the lender’s counsel who agreed to continue the trial that was already set in this case. In October of 2015, after making four trial payments, our client was approved for a permanent loan modification. The permanent loan modification will cut our client's principal and interest payment nearly in half. Our client's new principal and interest payment is $943.23, and his new interest rate is 4%. While our client still owes a little more than his home is worth, his total monthly payment with taxes and insurance included is $1,547.77, which is far less than the cost of renting a similar 3,000 square-foot premium newer home in Palm Bay. To review the redactedfinal loan modification agreement click here.
About Shuster & Saben: For most foreclosure clients if the firm does not win their case outright we settle the file with a loan modification. Bank lawyers who know our work and track record understand why we get so many great loan modifications. We study how loan modifications are underwritten including Fannie Mae's most recent and often changing servicing guidelines. We help clients avoid mistakes which can ruin a loan modification and follow-up with banks and their lawyers until the loss mitigation package is complete. Bank lawyers know that if there is no loan modification our firm will not hesitate to take a case to trial and they know we will walk away from "crappy" loan modification offers. Bank representatives know that without a loan modification they will have to fly (or drive) in for both a deposition and eventually a trial.
Monday, October 19, 2015
On September 21, 2015, I went to trial against HSBC Bank at the Brevard County Courthouse. Representing HSBC Bank was the Christopher Pennington of the law firm Clarfield, Okon, Solomone and Pincus, P.L. When the trial began, counsel for the bank was quick to point out that our client had not made a mortgage payment since September of 2008. The bank’s lawyers commented in opening statement to the effect “it has been over SEVEN YEARS since Mr. Shuster’s client has made a mortgage payment.”
Not being one to be pushed around by bank counsel, I responded, that the reason our clients had gone seven years without a mortgage payment was the prior servicer never offered a loan modification and the first foreclosure action filed against our client was dismissed. I countered that the evidence would show that loan servicer failed to send a proper notice of default and the plaintiff would be unable to prove standing at the inception of the case. Today, HSBC will lose its second foreclosure case against our client.
In this trial the notice of default was sent out in 2008 by the prior servicer, IndyMac. The servicer who appeared at the trial for HSBC was the current loan servicer, Ocwen. Our clients’ mortgage, like just about every mortgage, required the lender to send any notices to the borrower to the property address unless the borrower notifies the lender in writing to send all notices to some other address. At trial, Ocwen presented the IndyMac notice of default sent in 2008 to an address other than the property address. Ocwen did not provide the Court with a copy of any written notice from the borrower to change the notice address to an address other than the property address. It appeared to me that Ocwen and their lawyer did not realize that the prior loan servicer sent the notice to an address that was different than the property address. After the plaintiff rested I pointed out the plaintiff’s failure to come forward with any proof that the notice address was ever changed. The plaintiff (HSBC) and their lawyers never knew what hit them. They had failed to prove their case. All they had show the court was that a notice was mailed to an address other than the address of the mortgaged property without even showing who lived at the address where the notice was sent. While they alleged that the notice was sent certified mail they further lacked a “Green Card” to show who, if anyone, signed for the notice.
At trial the court reserved ruling. In early October we received the attached ruling in our favor from Judge Rhoda Babb. To read the entire judgment with our client's name redacted click here.
About Shuster & Saben, LLC: Foreclosure is a problem. Feet dragging is not a solution. If our client wants to keep their home then the our goal is to get them a great loan modification or win their case. It has been our experience that banks make the best loan modification offers when their lawyers know that the homeowner’s counsel is ready, willing, able and PREPARED to take the case to trial. Bank lawyers remember the small handful of foreclosure defense firms like ours the regularly beat them at trial.