Lauren Rode Lecture at the LA Law Library: Foreclosure Litigation

Wednesday, August 6, 2014
12:15 p.m. — 1:15 p.m.

As part of the LA Law Library’s Consumer Law MCLE series, this class will cover the most common causes of action in foreclosure litigation, including breach of contract, negligence, §17200 (California’s Unfair Competition Law), and HBOR (Homeowner’s Bill of Rights). It will focus on issues face by homeowners, such as denial of permanent modifications after completing trial modification; two- to three-year delays and modification reviews which impact alternative options available to homeowners, such as chapter 13 Bankruptcy or sale of the property; and, “dual tracking” where the lender schedules foreclosure when the borrower is in modification review.

Presented by Lauren Rode
Lauren Rode is an attorney at the Consumer Action Law Group in Los Angeles, California. She concentrates her practice on Chapter 7, 11, and 13 bankruptcies, business law, and financial planning and analysis. Prior to becoming a member of the California Bar, Lauren headed a bankruptcy clinic that provided pro bono assistance to debtors, reaching out into the community and representing indigent individuals in their Chapter 7 bankruptcy cases. She graduated from Cornell University with a B.A. in Applied Economics and Management, and earned her J.D. from the University of Minnesota Law School, with an emphasis in business law.

One hour general MCLE credit

Fee: $35 for the class (non refund)

For more information visit www.lalawlibrary.org

Lauren Rode Will Cover the Following During the Event

Foreclosure litigation PDF can be view Here

  •  PRACTICAL PRACTICE TIPS FOR REPRESENTING HOMEOWNERS IN FORECLOSURE WHEN SEEKING LOAN MODIFICATION
  • ASSESSING A POTENTIAL CASE:
    • RESPONDING TO MODIFICATION DENIALS BY LENDERS
    • DEALING WITH LONG DELAYS IN MODIFICATION REVIEW
    • RESPONDING TO LOAN MODIFICATION AND FORECLOSURE “DUAL TRACKING” BY LENDERS
  • TEMPER CLIENT EXPECATIONS FROM DAY 1
  • CASE SCENARIOS: CAUSES OF ACTION BROUGHT BEHALF OF HOMEOWNERS

PRACTICAL PRACTICE TIPS

  • WHAT JUDGES’ DON’T LIKE:
    • “SHOW ME THE NOTE” ARGUMENT
      • NO “PROPER LENDER” THEREFORE THE BORROWER DOESN’T OWE PAYMENTS TO ANYONE
    • “LENDER HAS A DUTY TO MODIFY” ARGUMENT – NO SUCH LAW EXISTS
      • THE BETTER ARGUMENT: BORROWER WAS IN MODIFICATION REVIEW FOR TWO YEARS WITH NO RESOLUTION
  • GET PAST DEMURRER AND MAKE THE LENDER SPEND SOME MONEY
    • PRESENT A SYMPATHETIC LEGAL STORY – LENDER WILL DEMURRER (A COUPLE TIMES)
    • SEND LOTS OF DISCOVERY
    • TALK TO OPPOSING COUNSEL

RESPONDING TO MODIFICATION DENIALS DEALING WITH DELAYS

  • LENDERS ARE WITHIN THEIR LEGAL RIGHTS TO DENY MODIFICATIONS
    • COMMON WRONGFUL DENIALS
    • IF DENIAL IS GENUINE, MAY NEED TO DISCUSS ALTERNATIVES WITH BORROWER
  • NO LAW FORCES A LENDER TO RUSH A REVIEW
    • FILING A LAWSUIT MAY SPEED UP PROCESS, BUT THERE MUST BE A LEGAL CLAIM; REMEMBER, THIS IS NOT A MODIFICATION, THIS IS LITIGATION!
      • LENDER TOOK SO LONG TO REVIEW, KICKED BORROWER OUT OF PROGRAMS
      • LENDER TOOK SO LONG TO REVIEW, BORROWER’S EQUITY EATEN UP

DUAL TRACKING

  • CALIFORNIA LAW – SB 900 – ENACTED JANUARY 1, 2013
    •  PRIMARY RESIDENCE
    • IF BORROWER IS IN MODIFICATION REVIEW, LENDER MUST HALT FORECLOSURE PROCESS UNTIL THEY RENDER A DENIAL IN WRITING:
      • NOD
      • NTS
      • FORECLOSUE SALE
  • EX PARTE APPLICATION FOR TEMPORARY RESTRAINING ORDER – VERY SUCCESSFUL WITH CA JUDGES

TEMPER CLIENT EXPECTATIONS FROM DAY 1

  • CLIENT MUST UNDERSTAND:
    • JUDGE CANNOT AND WILL NOT ORDER THE LENDER TO MODIFY
      • EXCEPTION: BREACH OF PERMANENT MOD CONTRACT – SPECIFIC PERFORMANCE
    • JUDGE WILL NOT PUSH THE LENDER TO APPROVE A MODIFICATION, NO MATTER HOW HARD THE HARDSHIP
    • LAWSUIT ITSELF WILL NOT STOP FORECLOSURE
      • TRO -> PRELIMINARY INJUNCTION
      • INFORMAL AGREEMENT WITH OPPOSING COUNSEL
    • LITIGATION PROCESS:
      • LONG
      • PROPOUNDING AND RESPONDING TO DISCOVERY IS NECESSARY
      • CONSEQUENCES OF REFUSING TO SUBMIT DOCUMENTS
      • MAY NOT RECEIVE ANYTHING AT THE END

CASE SCENARIOS – CAUSES OF ACTION BROUGHT ON BEHALF OF HOMEOWNERS

  • FIVE MAIN CATEGORIES:
    • ACCOUNTING ERRORS AND MISHAPS BY LENDER
    • DELAY IN MODIFICATION PROCESS CAUSED MODIFICATION DISQUALIFICATION OR ATE UP EQUITY
    • LENDER FAILED TO IMPLEMENT PERMANENT MODIFICATION
    • CA SENATE BILL 900 – HOMEOWNER’S BILL OF RIGHTS
    • LENDER TOLD BORROWER TO FALL BEHIND ON MORTGAGE PAYMENTS
    • OUTLIERS

ACCOUNTING

  • LENDER WENT AHEAD AND PAID SOMETHING (INSURANCE, PROPERTY TAXES) THEN MISAPPLIED BORROWER’S PAYMENTS, CAUSING BORROWER TO BE IN “DEFAULT”
    • BREACH OF CONTRACT
    • NEGLIGENCE
    • BUSINESS AND PROFESSIONS CODE 17200
    • FRAUD AND DECEIT
    • ELDER ABUSE
    • ACCOUNTING
    • CA CIVIL CODE SECTION 1785.25 – CALIFORNIA CONSUMER CREDIT REPORTING AGENCIES ACT (REPORTING IN DEFAULT WHEN REALLY NOT)
  • BORROWERS FIND IT IMPOSSIBLE TO GET THE LENDER TO CORRECT MISTAKE ON WITHOUT LEGAL INTERVENTION

DELAY IN MODIFICATION REVIEW CAUSED DAMAGE

  • START OF MOD REVIEW BELOW HAMP LIMIT; TOOK SO LONG LOAN BALANCE WENT ABOVE HAMP LIMIT
    • NEGLIGENCE
    • FDCPA (FAIR DEBT COLLECTION PRACTICES ACT)
    • ROSENTHAL FAIR DEBT COLLECTION PRACTICES ACT
  • DELAY CAUSED LOAN MODIFICATION DENIAL (DENIED BASED ON NPV, I.E. TOO FAR BEHIND)
    • NEGLIGENCE
    • PROMISSORY ESTOPPEL
    • BUSINESS AND PROFESSIONS CODE 17200
    • INTENTIONAL MISREPRESENTATION / NEGLIGENT MISREPRESENTATION
    • FDCPA
    • ROSENTHAL
  • DELAY KILLED EQUITY
    • NEGLIGENCE, 17200, FRAUD

FAILURE TO IMPLEMENT PERMANENT H.A.M.P. MODIFICATION OR PERMANENT MODIFICATION

  • BORROWER APPROVED FOR A TRIAL MODIFICATION, ASKED TO REMIT PAYMENT UNDER THAT T.P.P., MADE PAYMENTS, NEVER PROVIDED PERMANENT MODIFICATION (USUALLY ACCOUNT TRANSFER TO NEW SERVICER)
    • BREACH OF CONTRACT
    • PROMISSORY ESTOPPEL
    • NEGLIGENCE
    • BUSINESS AND PROFESSIONS CODE 17200
    • FRAUD AND DECEIT
  • H.A.M.P. CONTAINS GUIDELINES THAT SAY IF A BORROWER COMPLETES T.P.P., THEN MUST BE PROVIDED WITH PERMANENT MODIFICATION
  • IF NOT A SIGNED, CONTRACT, MAY HAVE TOUGHER TIME, STRONG CASE IF BORROWER MADE PAYMENTS AND LENDER CASHED/ACCEPTED

SB 900 – Homeowner’s Bill of Rights

  • Notice of Trustee Sale was issued while borrower was in loan modification review; no written denial = dual tracking
    • SB 900
  • In review, NTS issued, lender sold
    • SB 900
    • PROMISSORY ESTOPPEL
    • NEGLIGENT MISREP / INTENTIONAL MISREP
    • 17200
    • ROSENTHAL; CCRA
    • NEGLIGENCE

TOLD TO FALL BEHIND IN ORDER TO QUALIFY FOR ASSISTANCE

  • TOLD TO FALL BEHIND
    • FRAUD
    • NEGLIGENT MISREP / INTENTIONAL MISREP
    • PROMISSORY ESTOPPEL
    • 17200
    • ROSENTHAL; CCRA
  • PLACED IN FOREBEARANCE AGREEMENT – PAY US A LOWER AMOUNT WHILE WE FIGURE OUT IF YOU QUALIFY FOR FURTHER ASSISTANCE + PENALTIES + FEES = ARREARS ACCRUE
    • NEGLIGENCE
    • 17200
    • BREACH OF CONTRACT
    • BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING

OUTLIERS

  • BORROWER DIES; SURVIVING CHILDREN WANT TO SAVE HOME, LOAN USUALLY IN DEFAULT ASSUME LOAN? CAN’T MODIFY WITHOUT ASSUMING, CAN’T
    • ASSUME WITHOUT MODIFYING (NEED TO BE CURRENT) – DELAY = DAMAGES
  • LOAN STEMMED FROM AN ILLEGAL TRANSACTION – SCAM TO GET ELDERLY TO “REFINANCE” THEIR LOAN WHEN THEY REALLY QUIT CLAIMED TITLE TO THEIR HOME; MORTGAGE TAKEN OUT; FORECLOSURE COMMENCING
    • VOIDABLE DEED LAW – MORTGAGE STEMING FROM A VOIDABLE DEED CAN BE CANCELLED
  • CHASE FORECLOSED ON HOME IN 2008; BORROWER NOT TOLD UNTIL 2013 – 5 YEARS LATER!
    • WRONGFUL EVICTION, TRESPASSING, FRAUD, WRONGFUL FORECLOSURE, 17200
  • WHO OWNS THE LOAN?
    • TRANSFERS FROM ORIGINAL LENDERS TO SUBSEQUENT SERVICES WERE DONE INCORRECTLY
    • CHARTING NEW TERRITORY – QUIET TITLE, VOID OR CANCEL DEED OF TRUST
Lauren Rode Lecture at the LA Law Library: Foreclosure Litigation
Rate this post
Back to Top