A new federal government program kicked off this week, designed to help Americans who have been victims of Foreclosure Mortgage Fraud, which is great – if you are eligible for it. That’s a Big If.
The federal government hit the ground running in November 2011 by announcing it had opened its doors to a new program, where the Feds will be reviewing foreclosure files for bad acts, and paying victims of those bad acts money as restitution for their harm. You can read the official press release from the Office of the Comptroller of the Currency here.
It’s pretty swanky. They’ve set up a web site (IndependentForeclosureReview). They’ve also got a toll-free number (1-888-952-9105) with federal employees waiting to answer questions anytime Monday through Friday from eight o’clock in the morning to ten o’clock at night, and all day Saturday (well, 8 to 5).
Will All The Florida Foreclosure Mortgage Fraud Victims Will Be Helped? No.
Here in South Florida, where we have been so hard hit with Foreclosure Fraud, it’s exciting to think that victims of all this fraud will be able to get some financial relief. People get excited when they hear about the new federal foreclosure relief program. Which is great, except it may not apply to their situation.
Please be aware that to qualify, Foreclosure Mortgage Fraud victims must jump through lots of hoops:
First, their property has to have been their primary residence – vacation homes aren’t included here.
Second, their foreclosure must occurred sometime between January 1, 2009, and December 31, 2010.
Third, their foreclosure must involve one of the following:
- The property was sold due to a foreclosure judgment.
- The mortgage loan was referred into the foreclosure process but was removed from the process because payments were brought up-to-date or the borrower entered a payment plan or modification program.
- The mortgage loan was referred into the foreclosure process, but the home was sold or the borrower participated in a short sale or chose a deed-in-lieu or other program to avoid foreclosure.
- The mortgage loan was referred into the foreclosure process and remains delinquent but the foreclosure sale has not yet taken place.
Fourth, the mortgage servicer involved in the foreclosure is one of the following:
- America’s Servicing Co.
- Aurora Loan Services
- Bank of America
- Beneficial
- Chase
- Citibank
- CitiFinancial
- CitiMortgage
- Countrywide
- EMC
- EverBank/EverHome Mortgage Company
- GMAC Mortgage
- HFC
- HSBC
- IndyMac Mortgage Services
- MetLife Bank
- National City Mortgage
- PNC Mortgage
- Sovereign Bank
- SunTrust Mortgage
- U.S. Bank
- Wachovia Mortgage
- Washington Mutual (WaMu)
- Wells Fargo Bank, N.A.
Fifth, they must have experienced an allowed type of harm in the foreclosure process, which the Federal Government recognizes as the following (though other types of harm may be recognized):
- The mortgage balance amount at the time of the foreclosure action was more than you actually owed.
- You were doing everything the modification agreement required, but the foreclosure sale still happened.
- The foreclosure action occurred while you were protected by bankruptcy.
- You requested assistance/modification, submitted complete documents on time, and were waiting for a decision when the foreclosure sale occurred.
- Fees charged or mortgage payments were inaccurately calculated, processed, or applied.
- The foreclosure action occurred on a mortgage that was obtained before active duty military service began and while on active duty, or within 9 months after the active duty ended and the service member did not waive his/her rights under the Service-members Civil Relief Act.
Many Florida Foreclosure Fraud Victims Will Still Need to Seek Justice in a Courtroom
Today and every day, there are smaller banks and mortgage servicers that are aggressively going forward under Florida law to foreclose on properties and they aren’t involved in these federal government activities for the most part. They aren’t the Big Banks and they aren’t caught up in the Foreclosure Fraud net. Add to that all the different circumstances involved in this program before someone is eligible, and it’s easy to see that lots of homeowners aren’t being covered here.
It is harsh to consider that innocent families may be reading about all this government action and think that the cavalry is coming — when it’s not.
What happens to them? It’s not like the government doesn’t have a vehicle for them to seek justice. It does. What is happening here is the Executive Branch of government working to help people. However, we’re a system of three separate branches of government, and the Judicial Branch is also in place to help individuals who have been harmed.
Which means, if you are in Florida and are a victim of Foreclosure Fraud, justice can be found in a courtroom. Seek out the guidance of an experienced Florida Foreclosure Defense attorney and fight back.
There are several stages to the foreclosure process. Below is an outline of those stages and information on when and how we help.
1. The client comes to us when they have been served with a Summons. Upon receipt of the lawsuit, the homeowner has 20 days from the receipt of the lawsuit to file an answer. We normally ask for an extension of time to file the answer because the client comes to us a week or so after they are served. We examine the supporting documents to determine what defenses the client has to the lawsuit. This is the time when an attorney is most helpful. We examine the sufficiency of the lawsuit and the supporting documents. We can ask for discovery of certain documents and take depositions of people involved in the lawsuit. These steps take time to complete and are done in order to provide the client with the maximum ability to defend their rights against the foreclosure or to pursue a mortgage modification or short sale.
2. The client comes to us when a motion for summary judgment is pending before the Court. At this point, our focus changes to what can we do to defeat the summary judgment. Our objective is to win that hearing and then go back and follow the procedures in paragraph #1 above and defend our client against the foreclosure lawsuit.
3. The client comes to us after they lose the summary judgment and a sale date has been set. Now, we have to overcome the fact that the client has allowed a Judgment to be entered against them. Our focus is to set-aside the Judgment based, in part, upon faulty documents in the foreclosure case.
4. The client comes to us after the foreclosure sale and during the redemption period. We can still help. We do the same as #3 above, but we must provide strong reasons why the Judgment should be set-aside. Fraud on the Court is one of the reasons we use.
5. The client who comes to us years after they lost their home and the bank has sold their property. We examine the Court file to determine, among other things, if the documents filed in the foreclosure were fraudulent. In most of our cases, we have found fraudulent documents providing us with a starting point to setting-aside the judgment and the wrongful foreclosure. We make various arguments to overcome statute of limitation issues. If the bank has already sold the property, in our estimation, the only way for the bank to correct this wrong is for them to compensate our client.
6. The client comes to us and they have received a letter from a party seeking to collect on a deficiency. We examine the court file and to determine if fraud has occurred. We can use that fact as a beginning negotiating point with the creditor to reduce or eliminate the deficiency judgment altogether.
