Compliance issues are stopping foreclosures

Homeowners that are delinquent on their property mortgages are attempting to stop mortgage servicers from foreclosing on them by citing compliance mistakes, lost documentation and predatory lending.

An attorney in California has boosted about his success in halting mortgage lenders from foreclosing on homeowners. The Federal government at the same time is boosting about using litigation to prevent a Florida rescue firm from promising it can stop foreclosure.

Homeowner Mountag Bah filed a suit in the United States District Court in December of 2008. Mr. Bah want the District of Maryland Southern District to halt Wells Fargo Bank N.A from foreclosing on him. Mr. Bah claims he is not a fluent English speaker and that he obtained a mortgage from Norwest Mortgage Inc in June of 1999 for approximately One hundred and forty thousand dollars.  Norwest Mortgage Inc was merged with Wells Fargo Bank N.A. and now operates as Wells Fargo Home Mortgage.

Mr. Bah claims he was never given or received a loan application or Truth in Lending Act disclosure after or before he was approved for a thirty thousand dollars second mortgage from the giant lender nor did the lender attempt to qualify him for the second mortgage.

Junior Lend Holders or lenders are not required to keep copies of documentation used to qualify borrower in a file. It is common practice to rely on the first mortgage approval as a basis to qualify for a second mortgage. Mr. Bah is using suitability issues and predatory lending issues as his basis for his lawsuit.

Mr. Bah voluntarily dismissed the government last month from his lawsuit according to a notice that highlighted by the United States Department of Housing and Urban Development and the United States Department of Treasury in regards to Wells Fargo Home Mortgage’s handling of foreclosures on it line of second mortgages.

United State Bankruptcy Judge Randolph J. Haines recently order Wells Fargo Home Mortgage Senior Vice President Joseph Ohayon to appear in the bankruptcy case for Bobbi Giguere. The borrower claimed she never received a foreclosure notice. She was under the understanding that she was being qualified for a loan modification. Ohayon while on the stand stated that there is a flaw in the company’s communication process.

A representative for Wells Fargo Home Mortgage released a statement shortly after saying that it thanks the court for allowing them the opportunity to share their servicing practices; which includes working with all customers facing hardships even when they are facing bankruptcy. We want to make sure every reasonable option has been exhausted before foreclosure happens.

Ocwen Loan Servicing and the law firm of Brown and Shapiro have had a lawsuit filed against them in Texas by Christina Melinder. The suit file on July 27^th accuses Ocwen Loan Servicing for not applying her eight two thousand five hundred dollar mortgage payment in 2002. The suit in addition claims that the company continued to charge her interest at the higher amount as well as unrealistic fees. She is seeking a reversal of the foreclosure on her home and monetary damages.

Douglas j. Pettibone, an Irvine California lawyer claimed in a July press release that he halted Abex Mortgage Company from foreclosing on Shirley Jobe’s home base on the company’s violation of lending practices. Originators for Abex used churning in regard to Ms. Jobe’s mortgage. Churning is the practice of repeatedly approving loans to the same borrower on the same property for the sole purpose of generating new origination fees. Mr. Pettibone has tried over eighty cases in this matter.

The Associated Press provided a study in regard to the Troubled Asset Recovery Program of that showed thirty eight servicers have used the program. The thirty eight servicers who used the only thirty including Bank of America Corporation, JPMorgan Chase, Wells Fargo Home Mortgage and Citigroup Inc have all been accused of harassing mortgage borrowers by imposing illegal fees and charging insurance that is not necessary. The litigation that has taken place has resulted in premature foreclosures and some have simply settled.

Supreme Court Judge Arthur M. Schack of New York isn’t taking lender sloppiness and mistakes in his courtroom anymore when it comes to foreclosures on delinquent borrowers. Judge Schack has halted forty six of the one hundred and two foreclosure cases on this desk. He has halted foreclosures due to lender mistakes like presenting an affidavit signed in one state but notarized in another. He has also stop foreclosures on home even when the borrower has not been present for the actual proceedings or responded to foreclosure notices.

The Federal Trade Commission recently obtained a stipulated permanent injunction  and final judgment against Stephaine Dietschy , Darin Dietschy and their business United Home Savers LLC. The case against them was filed in United States District Court for the Middle District of Florida and alleged that the Dietschy’s charged distressed home owners to stop foreclosures from happening. No foreclosures where ever stopped or loan modification ever taken place. The Dietschy’s never refunded the distress borrowers’; which is a violation of the Federal Trade Commission Act. A Judgment for over four million will be suspended when the transfer of twenty one thousand six hundred ninety four dollars has been frozen by the court. The Dietschy’s agreed to stop all illegal behavior.

It seems a lot of litigation is going on in this mortgage crisis battle. Who will come out on top is yet to be seen.