Firm Sues Bank of America For Wrongfully Charging Attorney’s Fees in a Foreclosure Action

Shuster & Saben, LLC filed suit against Bank Of America (BofA) on behalf of an Orange County, Florida  homeowner.  In 2012, Bank of America filed a foreclosure action against our client.  The client hired a Tampa based lawyer to defend the foreclosure action.  In 2014, the judge of the foreclosure division entered summary judgment in favor of the homeowner and against Bank of America.  Pursuant to Florida Statute 57.105(7) when a bank loses a foreclosure action the bank cannot recover the attorney’s fees it paid its lawyer or the filing fees it paid to the court.  Nonetheless, even after Bank of America lost the foreclosure action it continued to send monthly mortgage statements that lumped in the past attorney’s fees into the total amount due.

Shuster & Saben, filed suit against Bank of America for violation of the Florida Consumer Collection Practices Act (FCCPA) for attempting to collect sums that Bank of America had no right to collect.  The lawsuit also alleged violation of the Fair Debt Collection Practices Act because Bank of America’s statements failed to adequately disclosure the nature of the changes it sought to collect, and failed to adequately explain that the charges included in the statement were attorney’s fees and costs incurred in the prior foreclosure action. Finally, the firm brought RESPA claims for Bank of America’s failure to timely respond to a Qualified Written Request submitted on behalf of the client. To read a redacted copy this lawsuit click here.

About Shuster & Saben:  At Shuster & Saben consumer protection law does not end with defending consumers from foreclosure actions and debt collectors.  We sue banks, loan servicers, junk debt buyers, and debt collectors who violate the Fair Debt Collection Practices Act (FDCPA) or who call the consumers cell phone without permission in violation of the TCPA.  

Firm Sues Fingerhut For TCPA Violations

The lawyers at Shuster & Saben filed suit in Orange County, Florida against Bluestem Brands, Inc. a company that does business as Fingerhut on behalf of a Orlando resident.  The suit alleges that Fingerhut called our client 59 times in a mere 19 days.  The lawsuit was filed under the Telephone Consumer Protection Act, a/k/a the TCPA.  The TCPA prohibits any company from calling a consumer’s cell phone using automated dialing systems unless the consumer has given the company permission to make such calls.

Fingerhut is widely known for its practice of allowing customers to purchase goods on credit and pay for the items on a monthly installment basis over a course of several months.  The firm’s client purchases a grill from Fingerhut after seeing a television advertisement offering the grill for a modest monthly price.  The client made payments on the grill until she lost her job. She was then inundated with calls from Fingerhut and often received three or four calls in a single day.  Fingerhut’s calls became increasingly aggressive and the bill collectors urged the consumer to borrow money from friends, family, or other sources to make a payment on the grill.  The consumer explained that she told Fingerhut to stop calling her but Fingerhut refused.  This lawsuit seeks damages for $1,500.00 per call for at least 59 calls, which equates to $88,500.00.  

Click here to view a redacted copy of the lawsuit complaintfiled against Bluestem d/b/a Fingerhut.

Firm Sues Caliber Home Loans for Dual Track Violation and Wrongful Foreclosure

When a Satellite Beach resident received a loan modification offer from Caliber Home Loans, she thought her foreclosure ordeal was finally over. While Ocwen, the prior servicer of the homeowner’s loan, had commenced a foreclosure action against her years earlier before the scheduled foreclosure sale, Caliber offered the homeowner a trial loan modification. 

 

Sued for Dual Track Violations and Wrongful Foreclosure 

On November 12 , 2015, Caliber offered the Satellite Beach resident a trial loan modification. The homeowner accepted and began making payments on the loan modification.  She made her first trial payment prior to its December 1, 2015 due date and made her second trial payment before a January 1, 2016 due date.  She was then sent an agreement to turn the trial modification into a permanent modification.  She then timely signed the agreement and returned it to Caliber.  Caliber’s lawyers, when the consumer was at the early stages of the loan modification process, rescheduled the foreclosure sale date to January 6, 2016.  The homeowner, who did not have a lawyer at the time, trusted Caliber when they told her that as long as she made her payments she did not need to worry about the foreclosure action. 

On Thursday, December 31, 2015, Caliber’s lawyers filed a motion to re-schedule the sale that was set for just three business days later on Wednesday January 6, 2016.  Unfortunately, after Caliber’s lawyer waited until New Years Eve, just three business days before the scheduled sale, they never obtained a hearing on their motion to cancel the foreclosure sale.  A judicial foreclosure auction was held on January 6, 2016 and the plaintiff in the foreclosure action was the winning bidder. 

When the homeowner called Caliber to make her next loan modification payment, Caliber informed her that they completed the foreclosure on her home and would not be able to modify her loan.  At this point, the homeowner hired Shuster & Saben to vacate the foreclosure sale and sue Caliber violation of a Federal law that prohibits “Dual Tracking” and makes it illegal for a loan servicer to continue to prosecute a foreclosure action while the homeowner in making payments pursuant to a trial loan modification.  This federal law is found at 12 Code of Federal Regulations 1024.41, also referred to as 12 C.F.R 1024.41. .  The firm’s three count complaint against Caliber seeks damages for violation of 12 C.F.R. 1024.41, for breach of the loan modification agreement, and violation of the Fair Debt Collection Practice Act.  To review a redacted copy of the lawsuit failed against Caliber please click here.  In the underlying foreclosure action the firm has stopped Caliber from executing on a writ of possession and moved to vacate the foreclosure sale.    Hopefully, in the near future, a Brevard County jury will be able to award our client appropriate damages against Caliber Home Loans.

Five Year Foreclosure Case Settled with Permanent Loan Modification

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.  

Trial Victory: Firm Defeats HSBC & Clarfield Okon Law Firm

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. 

Firms Wins Foreclosure Trial for Brevard Legal Aid

Yesterday, I went to trial for a client referred to our firm by Brevard Legal Aid.  Since the client came do us from legal aid, he hired our firm on a "pure contingency fee" basis which means if we did not win his case we would not get paid at all and if we won we would seek a court ordered fee to be paid by the losing bank. 

Our client tried valiantly to modify his loan with Bank of America.  When his income began to falter in the great recession, Bank of America put him in a temporary forbearance plan in which he was to make a modified payment of slightly under $500.00 per month.  The plan was supposed to last up to three months.  During this time he was supposed to be evaluated for a permanent loan modification.  The three months of forbearance turned into 24 months in limbo, and during this period the client sent Bank of America a check every month. According to the client he sent Bank of America every document they asked for.  Then in the twenty fifth month, they sent his check back and refused to accept his payments.  At trial, I put the client on the stand, and put copies of all twenty four checks into evidence.   It appeared that Bank of America never said Yes or No and rather than make up their mind they just elected to stop taking his payments.  Bank of America waited years from the time they stopped taking his payments to file a foreclosure action.  Along the way, the original note was lost.

At trial, the new servicer Nationstar alleged that Bank of America lost the note.  In a lost note case, the Plaintiff must show that the entity who lost the note was entitled to enforce the note at the time the note was lost.  While Bank of America was the original lender on the loan, Bank of America sold the loan to a securitized trust shortly after the loan was made.  An assignment of mortgage from Bank of America to the securitized trust was executed in 2012, this showed that Bank of America lost the right to enforce the note and mortgage in 2012.  At trial documents obtained in discovery including a bailee letter, showed that Bank of America was still in possession of the note as late as 2013 at a time when Bank of America did not own the loan and has assigned the right to enforce this mortgage.  After the Plaintiff rested the Court found for the Defendant that the Plaintiff Bank failed to prove an element of their case. 

Our client who was laid off from his job, did battle with three huge financial institutions, each worth billions of dollars, that hired enormous law firms to take his home away.    Bear Bryant once said "It's not the size of the dog in the fight; it's the size of the fight in the dog."  We work our cases very hard, even for our clients who don't pay us.  If we can't get you a great loan modification and if it is in your best interest we will take your case to trial.  If you want a law firm that has your back and will defend your foreclosure with passion, come see us. 

Richard Shuster beats Douglas Zahm, P.A., SunTrust and Seterus at Trial.

Firm attorney Richard Shuster won another trial against Douglas Zahm, P.A., a firm widely regarded as one of the toughest firms that represents banks and loan servicers in Florida foreclosure cases.  The trial was conducted in Brevard County, Florida.  This foreclosure case was originally filed by SunTrust but after two years of litigation Seterus replaced SunTrust as the servicer.  The Zahm firm knew that our firm was not one to surrender.  Since our firm beat the Zahm firm in another trial in late 2014, they took an additional precaution of bringing two witnesses to trial, one from the new servicer Seterus (who traveled from Oregon) and another witness from SunTrust.

Firm attorney Richard Shuster

Our firm won the case on two separate issues:  First because the original note had an endorsement that was not contained on the copy of the note attached to the complaint the Court sustained our objection to the original note being admitted into evidence.  The Court also agreed that the notice of default sent by SunTrust was legally inadequate and did not comply with paragraph 22 of the mortgage.  After the Plaintiff put on their case at trial and rested, firm attorney Shuster moved for involuntary dismissal, which the Court granted. 

Our clients in this matter are a Space Coast family with school age kids that suffered the loss of a good job due to disability.   Our client’s household income after the job loss, is less than half the amount necessary to qualify for loan modification.  Had our firm lost the trial our clients were at risk of being homeless.  As with every trial, our firm was All In.  We conducted extensive discovery, deposed the corporate representative who testified at trial, and searched high and low to find weaknesses in the bank’s case.  The night before the trial, our client got an E-mail, just a few minutes before midnight to let him know his lawyer was finally going home and was ready.  Thankfully our efforts paid off.