Hat tip to Susie for sending in this latimes.com article:
For example, Jean C. Wilcox of Irvine has sued EMC Mortgage Corp., accusing it of stringing her along for three years while making several offers to modify her nearly $800,000 loan, losing documents repeatedly and never intending to permanently change the terms of the mortgage. An EMC spokesman declined to comment.
“It was just ‘extend and pretend,’ ” said Wilcox’s lawyer, Anthony Lanza of Irvine. “And it was like they had the fax machine hooked up to a shredder.”
Anaheim lawyer Damian Nassiri said his firm had filed about 100 lawsuits against mortgage lenders since 2007. Earlier suits alleged that lenders misrepresented terms of mortgages or engaged in other shady practices to foist abusive loans on borrowers. Most of his firm’s suits now accuse lenders of dealing in bad faith with borrowers who have become delinquent on loans.
Worse, Nassiri said, in cases where foreclosure was inevitable, banks misled borrowers into accepting trial loan modifications. The intent, he claimed, was “to get some kind of money out of them” while stalling actions to seize the homes.
“There are too many bad loans for the banks to handle, and they can’t dump all these properties out on the market all at once because we would have another Depression,” Nassiri said.
Similar allegations of breaches of contract and acting in bad faith have cropped up in lawsuits around the nation, said Anthony Laura, a Washington lawyer who represents lenders accused of wrongdoing and tracks litigation trends.
Some suits allege that the problem is so widespread that courts should certify the plaintiffs as representing an entire class of aggrieved borrowers. Wilcox’s suit, for example, seeks class-action status on behalf of other California borrowers with similar complaints about EMC.
Boston consumer lawyer Gary Klein, a longtime antagonist of mortgage lenders, has filed suits seeking class-action status against the top three loan servicers — Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. — and others.
A multidistrict panel of federal judges on Oct. 8 consolidated eight such suits, including two from California, for pretrial proceedings in federal court in Boston.
The suits allege that trial loan modifications extended by Bank of America under the Obama administration’s anti-foreclosure plan were contracts that the bank violated by denying permanent modifications to borrowers who fulfilled their obligations.
In court documents filed in one of the cases, Bank of America said the plaintiffs mistakenly believed they were guaranteed loan modifications if they made three trial payments under the government’s program.
“A borrower must actually qualify, including income verification, an analysis of the modified loan’s affordability and other factors,” the bank said in the filings.
Wilcox said she had about $250,000 in equity in her home when EMC first offered to modify her loan and would have sold the house had she not relied on the company’s promises for a permanent modification. Now it’s not clear whether any equity remains.
“You’re paying out all this money,” she said, “and all the time the value of your house keeps going down.”
This will be interesting. From talking to people who have tried to modify their loans the servicers were either shockingly incompetent or acting in bad faith. There were financial incentives both to initiate a loan Mod and to have it fail for the servicers. Considering the total lack of regulatory oversight and enforcement we may never know.
sue the hell out of all the banks…take back all the banks money…aaahhh wait…the banks dont have any money. all these people will get paid off in tax payer money…..yeh sue the tax payer sue the tax payer…..!!!!
She and Pines should team up . They can create a new franchise and sell to other dead beat laywers… now they all have works and can pay their mortages.
Banks don’t have money? Really? Have Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. been taken over by the FDIC? Funny that they seem to have billions to pay out in bonuses.
With the suspension of mark to market, the banks have no incentive to take back the homes. Doing so they will then have to book at current value and I don’t think that would help their bottom line.
“Wilcox, a lawyer with expertise in real estate transactions, said she began having trouble paying the high-interest mortgage when her earnings as a sole practitioner slipped in 2007, leading her to seek a loan modification. She took a job at a law firm where her earnings are steady but lower.”
So, she expected the bank to modify her loan because she took a salary hit?
The banks are in no obligation to modify a loan. People need to realize that once they stop paying their full payment, the bank can start foreclosure proceedings any time, even if there is a trial mod in process. If you don’t want to lose your house, pay your mortgage in full, on time, every month. Simple as that.
Were there really lenders offering to modify loans for people who still had equity?
…paying out billions in bonus…? paying bonuses doesnt mean the banks are profitable. it just means we have changed the acccounting rules so that they can hide the debt and then flip treasuries and pocket the difference.
I,too, have been dealing with EMC for 2 1/2 years to modify my first and second mortgage. We bought in 2006 as a first tome home buyer and were taken advantage of by out real estate agent and broker. We realized after we moved on that we were given an option arm first (negative Am). 4 years later our valance has grown from 535k to nearly 600k all the while we have remained current on the loan and proactive in securing a fixed mortgage to retain the property. EMC has repeatedly lost paperwork with highly volatile personal info, canceled mod proceedings due to paperwork being more than 90 days old w no notice for us to submit updated docs,gave mixed contradictory info during several phone calls,gave us a negotiator I am convinced never existed etc. I could keep going on for days. I am trying to be the responsible homeowner to protect my families home and keep the banks best interest in mind only to be shut down and still living this nightmare nearly 36 months later with a mortgage due to reset in 9 months. I attended their workshop that chase sponsored,not for myself but for every other person who doesn’t understand their rights and to show chase and emc that I will not go away even if my situation doesn’t work out.
I,too, have been dealing with EMC for 2 1/2 years to modify my first and second mortgage. We bought in 2006 as a first tome home buyer and were taken advantage of by out real estate agent and broker. We realized after we moved on that we were given an option arm first (negative Am). 4 years later our valance has grown from 535k to nearly 600k all the while we have remained current on the loan and proactive in securing a fixed mortgage to retain the property. EMC has repeatedly lost paperwork with highly volatile personal info, canceled mod proceedings due to paperwork being more than 90 days old w no notice for us to submit updated docs,gave mixed contradictory info during several phone calls,gave us a negotiator I am convinced never existed etc. I could keep going on for days. I am trying to be the responsible homeowner to protect my families home and keep the banks best interest in mind only to be shut down and still living this nightmare nearly 36 months later with a mortgage due to reset in 9 months. I attended their workshop that chase sponsored,not for myself but for every other person who doesn’t understand their rights and to show chase and emc that I will not go away even if my situation doesn’t work out.