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.

Why you can’t get a Loan Modification from Flagstar

If you couldn’t get a loan modification from Flagstar you are not alone.  Flagstar is a big bank.  Their website and filing with the Securities Exchange Commission, says that that have nearly 10 Billion dollars of assets and are one of the top ten savings banks in the United States.

In September the Consumer Financial Protection Bureau (CFPB) fined Flagstar Ten Million Dollars for failing to property modify home mortgages serviced by Flagstar.  How bad were things at Flagstar.  At Flagstar they had 13,000 files in which a homeowner had applied for loan modification.  Those 13,000 files were assigned to just 25 staff members.  That is more than 500 files per staffer. 

Flagstar was also cited for:

• 25 Minute Average Hold Time
• 50% Call Abandonment.   ( Call where Flagstar hung up on the borrower, the borrower got lost in a maze of voice prompts, or the borrower just gave up trying to reach a human).
• Failure to Alert Borrowers of Incomplete Applications.
• Failure to timely convert trial modifications to permanent modifications.

Flagstar has agreed to not only pay a ten million dollar fine they will pay twenty-seven million dollars of restitution to loan modification victims.  For complete details from the CFPB website click here.

 
If you live in Florida and Flagstar failed to respond to your loss mitigation package submitted after January 1, 2014, Shuster & Saben, LLC is available to file suit on your behalf against Flagstar on a pure contingence fee basis.  Our firm not only defends homeowners in foreclosure, we regularly sue banks, loan servicers, and bill collectors for violating consumer protection laws.