Protection From Foreclosure Fraud

Foreclosure, Residential , , , , , , ,

California’s Homeowner Bill of Rights and Foreclosure Fraud

Foreclosure fraud in California has increased due to the number of homeowners who were talked into buying more property than they could afford. Predatory lending practices became commonplace as brokers used any means possible to qualify marginal borrowers. Mortgages with affordable initial rates that quickly adjusted to much higher rates put many in an untenable financial position. Extreme types of adjustable rate mortgages reset periodically throughout the life of the mortgage, continuously going higher. Mortgages with inconspicuous balloon payments that required borrowers to produce enormous sums of money were included in many contracts.

The increasing number of unaffordable mortgages led to an endemic number of foreclosures and with them followed foreclosure fraud. Foreclosure fraud utilized faulty documents and/or procedures, which resulted in homeowners wrongfully losing their homes. State and local government agencies are now investigating allegations of improper foreclosures by banks and other lending institutions. Meanwhile, homeowners have also filed foreclosure lawsuits, alleging banks used an unethical foreclosure process to force them out of their homes.

Between 2008 and 2011, more than one million homes in California were foreclosed. In many cases, lenders did not provide homeowners with a significant opportunity to obtain loss mitigation options to avoid foreclosure and also engaged in extensive mortgage servicing misconduct

A law, California’s Homeowner Bill of Rights, that reformed some aspects California’s foreclosure process went into effect on January 1, 2013. It was formulated in order to better protect homeowners in foreclosure. The Homeowner Bill of Rights makes the nonjudicial foreclosure process in California more fair and transparent. The law’s protections for homeowners and now the Homeowner Bill of Rights can aid homeowners facing foreclosure in California.

The Service members’ Civil Relief Act and Foreclosure Fraud

A federal law that provides foreclosure benefits to those on active military is called the Service members’ Civil Relief Act (SCRA). If you took out a mortgage before you went on active duty, you are entitled to a variety of protections against foreclosure.

Under the Service members’ Civil Relief Act (SCRA), all states are required to have judicial review of foreclosures and a judge is required to authorize foreclosures on homes of military members. Foreclosure authorization can only be given after a hearing at which military members are properly represented. The SCRA was enacted to protect active military members, some of them on duty overseas and with no ability to make mortgage payments. It has been reported that some service members have returned from active duty to discover that their home was in active foreclosure.

DiJulio Law Group
https://www.dijuliolawgroup.com

Evictions from Two Perspectives

Adverse Possesion, Easements, Foreclosure, Residential , , , , , ,

Unlawful detainer actions and evictions

Evictions are also referred to as unlawful detainer actions. These actions are the process through which a tenant can be removed from either residential or commercial property for non-payment of rent or other specific reasons defined under California landlord/tenant laws. Whether you are a property owner or a renter, the law provides procedures that guide resolution of eviction cases and protect both tenant’s and client’s rights.

Following Landlord Procedures in Evictions

A landlord can’t begin an eviction lawsuit without first legally terminating the tenancy. This means giving the tenant written notice, as specified in the state’s termination statute. If the tenant doesn’t move (or “reform” in some manner, such as paying the rent or removing the pet from the premises), landlords can then file a lawsuit to evict. Legally, these termination notices are called an unlawful detainer, or UD, lawsuit. Although terminology varies somewhat from state to state, there are typically three types of termination notices used by landlords to terminate a tenancy due to some type of tenant misbehavior. They are: pay rent or quit notices, cure or quit notices, unconditional quit notices.

If the tenant has not done anything wrong, landlords may usually use a 30-Day or 60-Day Notice to Vacate to end a month-to-month tenancy. Cities with rent control may not allow this. They require the landlord to prove a legally recognized reason for eviction (“just cause”) of tenants.

Tenants Rights in Evictions

If the tenant doesn’t voluntarily move out after the landlord has properly given the required notice to the tenant, the landlord can evict the tenant. In order to evict the tenant, the landlord must file an unlawful detainer lawsuit in superior court.

The court-administered eviction process assures the tenant of the right to a court hearing if the tenant believes that the landlord has no right to evict the tenant. The landlord must use this court process to evict the tenant; the landlord cannot use physical measures to force the tenant to move. For example, the landlord cannot remove or change door locks, cut off utilities such as water or electricity, block access to the property, remove the tenant’s property in order to carry out the eviction. The landlord must use the court procedures.

If the landlord uses unlawful methods to evict a tenant, the landlord may be subject to liability for the tenant’s damages, as well as penalties of up to $100 per day for the time that the landlord used the unlawful methods.

DiJulio Law Group
https://www.dijuliolawgroup.com

Reverse Mortgages: The Potential For Elder Financial Abuse

Adverse Possesion, Foreclosure, Residential , , , , ,

…the worst possible product for an elder

Reverse mortgages are becoming a high profile example of the many ways in which financial elder abuse can occur. Older spokesmen picked for their trustworthy demeanor appear in endless television commercials that attempt to sell a trusting senior a product that would benefit the mortgage broker greatly, but amounts to the worst possible product for the senior in the later stages in of life.

These reverse mortgage marketers are very adept and skilled in the methods of successful selling to seniors. For example, one well organized group of marketing advisors is telling the sellers of reverse mortgages , “These [senior] consumers understand that simply having a reverse mortgage offer mentioned on the AARP website and through most senior web links is an excellent way to gain trust from your [mortgage] candidates as most of the seniors that would respond to this ad have had some contact or consideration with the AARP”

By associating trustworthy sources with their products, these marketers are pushing their products with a pervasive intensity that is designed to create a need for a reverse mortgage and to break down whatever resistances the seniors may have.

…an elder without a place to live

Incurring the debt of a reverse mortgage may be acceptable as long as the senior can live in that home. If the senior finds that they have to move out of the home into assisted living or a nursing home, the mortgage becomes due. Now, there is the expense of paying the reverse mortgage off, as well incurring the high cost of the assisted living or nursing home care. A situation like this can leave an elder without a place to live.

In 2006, the California state legislature passed SB 1609 which protects seniors from elder financial abuse associated with reverse mortgages. First, it requires that seniors receive financial counseling from a HUD approved counselor before applying for a reverse mortgage. Second, it requires lenders to prepare loan documents in the language in which the reverse mortgage was negotiated. Finally, it prohibits lenders from requiring a borrower to purchase an annuity as a condition of the loan.

DiJulio Law Group
https://www.dijuliolawgroup.com

FORECLOSURE DELAYED UNTIL THE “BANKS” GIVE RIGHTS TO HOMEONWERS

Foreclosure , , , , , , ,

Under the New California Homeowners Bill of Rights the State of California has found that it is essential to mitigate the negative effects on the economy and the housing by modifying the foreclosure process to ensure that borrowers who may qualify for a foreclosure alternative are considered for, and have a meaningful opportunity to obtain, available loss mitigation options. And that avoiding foreclosure, where possible, will help stabilize the state’s housing market and avoid the substantial, corresponding negative effects of foreclosures on families, communities, and the state and local economy.

The California Homeowners Bill of Rights prohibits notice of default (the first step in a foreclosure ) until 30 days after the mortgage servicer has:

Sent a first-class letter to the homeowner that includes the toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.

Attempt to contact the borrower by telephone at least three times at different hours and on different days.

Sent a certified letter, within two weeks after the telephone call requirements

Provided a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.

Posted a prominent link on the homepage of its Internet Web site containing the

following information:

Options that may be available to borrowers who are unable to afford their mortgage payments and who wish to avoid foreclosure, and

instructions to borrowers advising them on steps to take to explore those options,

A list of financial documents borrowers should collect and be prepared to present to the mortgage servicer when discussing options for avoiding foreclosure,

A toll-free telephone number for borrowers who wish to discuss options for avoiding foreclosure with their mortgage servicer, and

The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.

This means the “bank” must give the homeowner a single point of contact with a live person, notice of the options to refi, and a list of documents needed to apply for a refi.

The new Bill of Rights also gives the homeowner the right to designate a lawyer or other representative to help in the loan modification and the foreclosure prevention process. My estimate is that this process will extend the time for a foreclosure to 9- 12 months from the date the “bank” decides to start the foreclosure process and give a fair opportunity for borrowers to refi or otherwise avoid foreclosure.

By David DiJulio:

For more informantion contact : DiJulioLawGroup.com

Consumer Financial Protection Bureau New Rules for Mortgage Servicers

Foreclosure , , , ,

The Consumer Financial Protection Bureau has proposed new rules for the mortgage servicing industry, which include a requirement that servicers must make a decision on any mortgage relief applicant within 30 days, and must not begin foreclosure proceedings until completing that process.

Under the Consumer Financial Protection Bureau’s proposal, loan servicers would be required to evaluate homeowners’ applications for loan-assistance within 30 days of receiving an application and would be barred from going ahead with a foreclosure until a final decision has been reached on a borrower’s application for help […]

The consumer bureau’s proposal, along with new bank-capital standards and other regulations, could push some large banks to accelerate sales of poorly performing loans to smaller companies that specialize in managing distressed loans, said Issac Boltansky, a Washington analyst with Compass Point Research & Trading.

“We expect the big bank servicers to offload a sizable portion of their servicing assets,” to smaller companies known as special servicers, he wrote in a note to clients. Some of those companies include Ocwen Financial Corp., Nationstar, and Walter Investment Management Corp.

Large banks are “simply not going to make as much money,” on servicing and are likely to hire other companies to perform many servicing functions, said Ed Delgado, a former Wells Fargo executive and chief operating officer of Wingspan Portfolio Advisors, which performs those functions.

Under the proposed rules, banks and other financial institutions that manage home loans – the servicers – must provide “direct, ongoing access” to staff members to help borrowers fighting to save their homes from foreclosure. Servicers must also halt foreclosure proceedings while borrowers apply for a loan modification and tell homeowners in danger of foreclosure about their options.

David DiJulio

For more information contact David DiJuliomailto:rdj@dijuliolaw.com.

DiJulio Law Group: Los Angeles real estate attorneys with more than 35 years of experience. Call 888-519-1613 or emal rdj@dijuliolaw.com.

DiJulio Law Group

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