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.  

Firm defeats JP Morgan Chase in Brevard Foreclosure Case

Shuster & Saben was not the first law firm hired by a Viera, Florida homeowner to defend their foreclosure case.  Their first lawyer handled their bankruptcy case but when JP Morgan’s counsel began to aggressively move the case toward trial their bankruptcy counsel suggested they consult with our firm to obtain counsel that would fight their case through trial.

While the firm prepared for war by serving discovery requests and conducting a thorough investigation of the case we also tried to make peace by extending settlement offers.  Our position was that since the client discharged the debt in bankruptcy, JP Morgan could still take the house but could not take the client’s money.  The client owned nearly twice what their house was worth.  Before the client hired our firm JP Morgan put the client in a terrible loan medication that locked the client into a fixed rate of nearly 7% and removed the variable interest rate feature of the mortgage less than a year before it would have adjusted to a lower rate.  We reasoned that if getting the house was the best JP Morgan could ever do, a principal reduction loan modification that would give JP Morgan a mortgage balance substantially above the current value of the home but substantially lower than the current loan balance would be a reasonable compromise and a win-win settlement.  JP Morgan rebuffed our efforts to settle by making only one take-it or leave-it offer with a tiny interest rate reduction and no principal reduction.  JP Morgan told us it was their way or the highway.  It was time to prepare for battle.

On September 11, 2013, after JP Morgan’s attorney’s Choice Legal Group failed to respond to requests for admission, our firm filed a motion for summary judgment in favor of the Defendant homeowner.  The motion for summary judgment was scheduled for October 17, 2013.  Choice Legal, even after getting the motion for summary judgment failed to respond to the requests for admission.  When the motion was set for hearing they continued to do nothing.  On October 17, 2013, the Court adjudicated our motion for summary judgment.  Since JP Morgan Chase never responded to our requests for admissions the Court deemed that it was admitted that JP Morgan did not own or hold the note.  The Court entered summary judgment and final judgment based on the admissions.  Our client has won the case and has proven that JP Morgan does not own or hold the note.  The Court’s order provides that JP Morgan shall take nothing from this action meaning they will not get our client’s home or one thin dime of our client’s money.  Our client as the prevailing party will recover attorney’s fees from JP Morgan.  To read the entire order click here.

About Shuster & Saben,LLC… Shuster & Saben aggressively litigates foreclosure cases.  Our active counter-attacks on banks and loan servicers give foreclosure mill attorneys plenty of chances to drop the ball.  Lawyers whose goal is delay might be content to wait for the bank’s lawyers to pick up the ball.  Not us.  We play to win.  We know its our job to recover the fumble and head for the end zone. That is how we win cases like this one.