Thursday, March 28, 2013

Wells Fargo Creates Fake Foreclosure Sale Date for NC Property

Wells Fargo Creates Fake Foreclosure Sale Date for NC Property

As an attorney who represents many homeowners and other mortgage loan borrowers in mortgage relief, mortgage dispute, and foreclosure cases, I deal with some fairly unusual situations. This current case with Wells Fargo, in which I had a foreclosure hearing this week, well let’s just say that if we were hosting a tournament of outrageous cases, WF would get at least a #2 seed for this case (since March Madness is going on right now). The fact that it might not get a top rated seed just shows how stiff the competition is as far as bad acts by these mortgage lenders and loan  servicers. 

We asked for a deed in lieu of foreclosure (DIL), and the facts match up pretty nicely for that outcome; the property value is bit higher than the unpaid balance of the loan (UPB), and the property value is approximately equal to the UPB plus the late fees, costs, etc. which have accumulated. These clients – a married couple in Charlotte – suffered downturns in their small businesses and one of them suffered major medical problems, requiring surgery and a lengthy recovery.

Some mortgage loan holders, or the investors which control these loans behind the scenes, have a 60 day cutoff for applying for a deed in lieu; in other words, if there is a foreclosure sale date already scheduled within 60 days, the loan servicer (on behalf of the loan note holder) will not even consider the DIL request. In this case, there was no foreclosure sale date set, but WF had put a sale date in its computer, a date less than 60 days away. The local law firm handling the case confirmed that there was no sale date, but Wells Fargo responded by basically saying “Because we entered a sale date into our computers, we can’t/won’t process the DIL request.”

Foreclosure Hearing

 Just a year ago we had the National Mortgage Settlement, requiring WF to pay over $5 billion due to illegal mortgage and foreclosure activities, and yet it still acts in this manner. I mean, when a $5 billion penalty isn’t enough to get you to change your ways, something is really wrong.

Let us think about this – there literally was no foreclosure sale date – but because some muttonhead at WF had entered one into the computer, Wells Fargo pretended as if the property was scheduled for sale and refused to help these homeowners. What the hell is going on in our world, when a random computer entry – creating a false, pretend foreclosure sale date – is the dominant factor when even the substitute trustee law firm hired by WF itself confirms there is no sale date?! This is mind-boggling, dismaying, pathetic, shameful, baffling, bewildering, discouraging, perplexing, troubling, and every other synonym which comes to mind. Of course, Wells Fargo is no stranger to fraudulent activities.

Home Fraud

The result of this? Well, now there is a foreclosure sale date, since WF refused to consider a DIL due to the fake foreclosure sale date and related 60 day deadline. (The sale date is not the fake date WF put into its system.) Ironically, since the actual, real sale date is more than 60 days away, maybe now Wells will at least consider the request? I mean, the only reason for the refusal was the fake sale date being within 60 days of the DIL request, so now that that obstacle has been removed . . . ? We shall see what happens.

Unfortunately, this is not the only case I have with Wells Fargo right now where it is just making stuff up. More to follow, as always. 

Wednesday, March 20, 2013

Principal Balance Reduction Hope for Fannie, Freddie Mortgage Loans?

Principal Balance Reduction Hope for Fannie, Freddie Mortgage Loans?


Many of us have been waiting to see if a new Federal Housing Finance Agency Director would amend the Interim Director's decisions with regard to not allowing principal balance reductions on Fannie Mae and Freddie Mac loans. Of course, first a new Director would have to be nominated, confirmed, and sworn into office. President Obama nominated Congressman Mel Watt (a Democrat from NC whose district oddly includes parts of Charlotte, Winston Salem, and Greensboro) back in May. It took almost 6 full months for this nomination to come to a confirmation vote in the Senate.

The United States Senate has voted 56-42 to block further progress toward Representative Watt becoming the FHFA Director. Senator Harry Reid, a Democrat, entered a motion to reconsider this vote at a later time.

What does this mean for borrowers seeking relief whose loans are owned by Fannie Mae or Freddie Mac? While mortgage loan modifications are still available for qualified borrowers and qualified loans, for the indefinite future those modifications are not going to include a reduction of principal balance. Of course, principal balance reductions are also comparatively rare for distressed mortgage loans which are privately owned, especially if the loan was not originally a Countrywide loan.

Don't give up hope if your loan is owned by Fredie or Fannie and you need help, just don't expect any possible relief to include principal balance reduction. Also keep in mind that many borrowers think that Bank of America, Wells Fargo, Chase, Citi, Nationstar, Bayview, SunTrust, Aurora, or some other outfit owns their loan, when in fact those entities may just be the loan servicer, with said loan(s) owned by Freddie or Fannie.  Obtaining mortgage relief can be incredibly challenging, but it is not impossible. Some borrowers achieve it on their own, and some hire attorneys or non-law firm companies. We recommend that you carefully investigate any one you are considering hiring to assist you, as there are many out there who will gladly accept your money but not perform the work you pay them to. Good luck!

~~~Original Post ~~~

As an attorney who represents many homeowners and other mortgage loan borrowers in mortgage relief, mortgage dispute, and foreclosure cases, I am well aware of the frustration that many feel with regard to the position that the acting director of the Federal Housing Finance Agency (FHFA) has taken – he will not allow Fannie Mae or Freddie Mac to participate in mortgage relief programs which include possible reduction of principal loan balance. The FHFA was created in 2008 as part of the Housing and Economic Recovery Act.


A typical mortgage loan which does not involve Fannie Mae or Freddie Mac may be eligible for reduction of the loans balance. This is especially true for situations which the loan balance is greater than the property’s value; this is what the term “underwater” refers to.

There has been an ongoing dispute between Edward DeMarco, the Acting Director of FHFA and many other government leaders regarding the refusal of Mr. DeMarco to allow Fannie and Freddie loans to be eligible for principal balance reduction.

This infighting at the federal level has been going on since at least 2011 (when Mr. DeMarco refused to cooperate with a President Obama plan), and was increased by Mr. DeMarco’s refusal to allow principal balance reductions for Fannie and Freddie loans under the $25 billion dollar National Mortgage Settlement of 2012. Well, this dispute is heating up rapidly. In fact, in February, 2013 45 members of the United States House of Representatives sent a letter to President Obama, demanding that Mr. DeMarco be replaced as leader of FHFA.

The latest development is that Attorneys General from nine different states sent a request to President Obama, the United States Senate Majority Leader, and the United States Senate Minority Leader last week also asking for Mr. DeMarco to be replaced. One of the Attorneys General involved, Eric Schneiderman of New York, stated that FHFA needs a leader which will allow it to be “a partner, not an impediment, in the national effort to comprehensively address the foreclosure crisis.”

The rest of the Attorneys General who joined in this letter are from California, Delaware, Illinois, Maryland, Massachusetts, Nevada, Oregon, and Washington. No, unfortunately the Attorneys General for Florida, Georgia, North Carolina, Ohio, South Carolina, and Tennessee (states in which this Firm practices) did not participate in this request, at least not formally. The letter, which represents a very direct and serious challenge to Mr. DeMarco’s “Interim Leadership” of FHFA, closes by stating “We believe until new, permanent leadership is named to FHFA [it] will continue to stand as a roadblock to comprehensively addressing the foreclosure crisis.”

One of the points made by these Attorneys General is that having more healthy and performing loans (by allowing principal balance reductions which would give those borrowers a fighting chance) is wiser and makes more financial sense for everyone as compared to refusing to offer this type of assistance and having these borrowers continue to struggle, to be foreclosed upon, etc. One huge advantage of principal loan balance forgiveness is that it can create a short-cut through the otherwise very lengthy mortgage loan modification process. Modifying more loans more quickly is extremely important, as lenders often refuse to halt the foreclosure process even when a modification application is pending.

Things appear to be reaching another boiling point in Washington, D.C. Mr. DeMarco may be out of work soon, and distressed mortgage loan borrowers may be better off for it.

McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.


Tuesday, March 12, 2013

SunTrust, its Attorney, Trustee Continue Illegal Foreclosure

SunTrust, its Attorneys, Trustee Continue Illegal Foreclosure in North Carolina

McGrath & Spielberger works with borrowers to save their homes.


As an attorney who represents mortgage loan borrowers and homeowners, I have encountered all sorts of bizarre and even illegal actions by banks, mortgage loan holders, mortgage loan servicers, and their representatives and agents. In this instance, it's SunTrust and its "neutral" substitute trustee who are illegally continuing to prosecute a foreclosure that they know is not supported by law or fact.

SunTrust is attempting to foreclose on a primary residence near Charlotte, North Carolina. The family who owns the property includes a local pharmacist and two college students - very nice and intelligent people. We are attempting a mortgage loan modification while trying to avoid foreclosure. At one hearing in this case, the SunTrust substitute trustee / attorney for didn't even bother to show up; the rest of us spent our time and money to attend, only to have the hearing not occur. 

 In North Carolina, the foreclosing party (SunTrust) must prove that it has the legal right to foreclose, which of course includes being the legal holder of the loan note. SunTrust, its trustee, and its law firm (an out of state law firm based in Atlanta) have now admitted that SunTrust has no connection with this loan but have refused to drop the foreclosure case. SunTrust is not the owner of the loan. It is not the holder of the loan. It is not the "person entitled to enforce" ("PETE") the loan. It is not the loan servicer. It admits all of this but still continues the foreclosure case!                                

Of course we are taking appropriate actions, but think about how stressful it is to have a lawsuit against you which seeks to take your home away. Now think about how upsetting it would be to know that the bank and the *neutral* trustee refuse to halt the foreclosure case despite essentially admitting that the bank has zero right to foreclose. Then think about the fact that the dollars paying to defend against this nonsense are coming out of your pocket, and could otherwise being toward a mortgage payment or to support your family.

It's not like this is the first time SunTrust has done this. In fact, it wasn't that long ago that SunTrust even warned its own investors that it was expecting formal charges by the Federal government for foreclosure fraud and abuse, and that this may make foreclosures take longer and be more expensive (i.e., cost the investors money): SunTrust Warns Investors of Foreclosure Abuse Investigations by Government.

Lest we think that SunTrust has only rarely wandered off of the path of the straight and narrow, let's remember that the Federal Government has also accused SunTrust of participating in illegal kickback schemes worth $6 billion.


Wednesday, March 6, 2013

Banks and Lenders to Foreclose on more Homes in 2013?

Banks and Lenders to Foreclose on more Homes in 2013?

According to an article posted on, a website which states it is dedicated to delivering information “impacting the mortgage default servicing industry”, foreclosures declined in 2012 but are expected to increase in 2013. According to the article, foreclosures dipped in 2012 to 1.84 million nationwide, 3% lower than in 2011 and 36% lower than in 2010, when there were approximately 2.9 million foreclosures. In fact, in December 2012 foreclosures appear to have dropped to a 68-month low! However,

Foreclosures in “judicial” foreclosure states (states where the foreclosure process must go through the court system before being finalized – such as Florida and Ohio) are expected to increase in early 2013. This is because although foreclosure numbers were down in 2012, foreclosure “activity” was up in 2012 in the majority of these states. This likely means that many foreclosure actions initiated in 2012 will make their way through the court systems and be finalized sometime in 2013, perhaps many in early 2013.

Additionally, for different reasons, foreclosures are likely to increase later in 2013 in many states, including “non-judicial” foreclosure states (such as Tennessee and Georgia) and “quasi-judicial” foreclosure states (such as North Carolina) - states where the foreclosure process is less formal and, thus, often “easier” for the lenders to foreclose. This late-year rise in foreclosures is expected in those states in which recent legislation was passed that will have the likely result of slowing down the foreclosure process – at least initially. Predictions are that, as lenders comply with and/or adjust to these new laws, foreclosures will start to increase again, but perhaps not until later in 2013. This may also be the case in some judicial foreclosure states that pass new legislation, such as South Carolina.

So, what does all this mean for the real estate market?  Well, it likely means that it will slowly transition from a seller’s market (while foreclosure inventories are down) to a buyer’s market (as the foreclosure inventories increase). In fact, the article states that sellers received 99% of their asking price on average in 2012, which was undoubtedly due to it being one of the lowest years in foreclosure numbers and, thus, foreclosure inventory, in recent history. If the article and RealtyTrac are correct, as we believe they will be, this is going to change over the course of 2013 and into 2014.

McGrath & Spielberger, PLLC provides assistance to those involved in mortgage disputes, including borrowers in need of mortgage relief services such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.

Friday, March 1, 2013

BOA Mortgage Modification Processing - Errors Involving BOA's Hope Loan Port System?

BOA Mortgage Modification Processing -  Errors Involving BOA's Hope Loan Port System?

McGrath & Spielberger works with borrowers to save their homes.

I've been dealing with Bank of America for years in mortgage loan relief and loss mitigation cases, some in foreclosure already by the time the case gets to me, some not. I have always prided myself on being objective and non-emotional where it comes to professional situations, and I generally don't believe in conspiracy theories. However, as time goes on and as the "mistakes" pile up to form a mountain, I have become more and more convinced that these mistakes may be, on some level, intentional. Here is the latest example.

In 2012, BOA forced us to begin using a third party, "independent" online platform (called Hope Loan Port) to provide mortgage relief documents in many cases. Despite the system's obvious major flaw (ridiculously, BOA controls when and if you can upload documents in this *independent* system), it does create a record of if and when documents are uploaded (assuming BOA "allows" you to upload). You merely open the computer account/file and there is a record of what has been provided and what hasn't. 

One of our Charlotte-area clients is facing a foreclosure hearing in just over a month. We've been working on her case for quite a while, which involves an FHA loan. We had been waiting to hear back from Bank of America regarding the mortgage loan modification application, which had been completed. The foreclosure hearing was approaching, and we were hoping for an answer from BOA.

Much to our surprise, BOA came back and insisted that we had not provided a Hardship Letter (among other incorrect assertions).

[caption id="attachment_6908" align="alignnone"]Incorrect BOA email regarding mortgage modification documents Incorrect BOA email regarding mortgage modification documents[/caption]

 In fact, the very online platform which BOA forces us to use had logged that Hardship Letter in ten (10) days earlier. 

[caption id="attachment_6909" align="alignnone"]Proof the Hardship Letter had been uploaded to BOA Proof the Hardship Letter Had Been Uploaded to BOA[/caption]

We proved that the Hardship Letter was there. We literally proved it to BOA.

[caption id="attachment_6910" align="alignnone"]An excerpt of the Hardship Affidavit which had been provided to BOA An excerpt of the Hardship Affidavit which had been provided to BOA[/caption]

BOA still insisted that we had not provided a Hardship Letter, so (and I realize this will come as a *shock* to those of you who have dealt with BOA on mortgage loan matters) we were forced to upload it again.

To anyone who may think "So what, big deal, you had to upload a document again" - this odd *error* on Bank of America's part (or error by Hope Loan Port that BOA refused to acknowledge) delayed the loss mitigation process by weeks, as it usually takes BOA weeks to respond and alert you if it thinks something is missing. Each day that goes by, the borrower falls further behind (BOA won't accept payments at this point) and the same bank making these mistakes and delaying loss mitigation pushes the foreclosure lawsuit forward.

We'll keep working on behalf of our clients, and BOA will keep making mistakes. Nothing less than families' homes are at stake.



Foreclosure Hearing BOA Alamance County North Carolina February 28 2013

The following is a summary of a foreclosure hearing that McGrath & Spielberger assisted a borrower with, and is provided for informational purposes only.

Mortgage Loan Servicer / Foreclosing Bank: Bank of America

Distressed Property Address (City): Haw River, North Carolina

Type of Distressed Property: Primary residence

Date of Foreclosure Hearing: February 28, 2013        

Location of Foreclosure Hearing: Graham, NC (Alamance County)

Bank’s Trustee: Trustee Services of Carolina, LLC This is a company created by the Brock and Scott law firm to serve as bank’s substitute trustee in foreclosure cases; this company then hires Brock and Scott to serve as the lawyers for the substitute trustee; this allows them to potentially capture trustee fees AND attorney fees in the same case.

Law Firm for Bank’s Trustee: Brock and Scott, PLLC

Borrower’s Attorney: Jason A. McGrath

Actions Taken by McGrath & Spielberger on Behalf of Borrower (Specifically in Relation to the Foreclosure Hearing): Motion to Continue Foreclosure Hearing filed, Mr. McGrath attended hearing with client.

Foreclosure Hearing Outcome: Borrower’s Motion to Continue Foreclosure Hearing granted, Order of Foreclosure not entered.