VICTIM OR VICTORIOUS

Victim or Victorious?

You may be the victim of “predatory lending” and not be aware of the fact this could be utilized as a defense to foreclosure.  Predatory lendingis a term used in lending contracts. Lenders following predatory lending practices, target vulnerable consumers like women or those who do not qualify for conventional loans. Predatory lending has one of the following characteristics:

1. The target group will be mainly the elderly or those with very low income.

2. The cost or loan terms at closing are not what you initially agreed to.

3. Aggressive sales tactics.

4. Repeated refinancing options over short periods of time enabling the lender to collect additional/penalty fees. This strips the homeowners’ equity from their homes.

5. The lending will not be in tune with the borrower’s ability to repay. The lender’s focus will be foreclosure.

6. The borrower is blind to many underlying truths.

7. There may be a lot of misrepresentations on the nature of loan, the amount of payment.

8. The transaction will be packed with high fees which will be hidden from the borrower’s eyes.

The aggressive sales tactics trick borrowers, mostly the uninformed groups, into accepting unfair loan terms. The federal remedies available to victims of predatory lending are: the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), the Home Ownership and Equity Protection Act (HOEPA), which is a 1994 addition to TILA, the Equal Credit Opportunity Act (ECOA), the Fair Housing Act, and the Federal Trade Commission Act. State remedies can be found in State Unfair and Deceptive Trade Practices Acts, common law fraud and unconscionability, and Special State Anti-predatory Lending Statutes.

Wherever there is a pool of low-income homeowners or other groups of individuals who are financially vulnerable, the potential for greedy mortgage companies or con-artists to step in looms large. While the actions of these companies may not always be illegal, the result can be the same: the homeowners may lose their home and the professionals who supposedly ‘helped them’ end up profiting. These helpers are predators – seeking their prey from the elderly, the sick, and the poor. Predatory lending practices can leave victims homeless and defeated, stripped of self-respect and hope, their credit ruined.

The definition of predatory lending involves who really benefits in the mortgage transaction. The fact that the homeowner does NOT benefit is what turns a legal mortgage into a predatory lending practice which can and should be reported. There are many resources where one can report mortgage fraud and predatory lending. If uncertain whether a mortgage action is legal, or actually fraud or a form of predatory lending, then one should still report it and find out for sure. In many cases only a fine line divides actual fraud from an ethical and legal transaction. (http://www.foreclosureself-defense.com/the-library/linksresources/)

INDICATORS AND METHODS OF PREDATORY LENDING

Steering & Coercing
Predatory Lenders use quite a number of different abusive practices when putting together a subprime loan. The possible targets for these practices are the elderly, low-income, or minority homeowners who, in many cases, would actually qualify for a regular prime loan. Fannie Mae estimates that possibly up to 50% of the subprime refinanced loans could have been prime loans – saving the borrowers thousands of dollars in fees and interest rates. The abuse of subprime loans in minority neighborhoods is evidenced by a government study in an African-American neighborhood showing over 51% of the refinanced mortgages being subprime, compared to only 9% in predominantly white neighborhoods. Borrowers are often subjected to very aggressive sales tactics to steer them or coerce them into refinancing when it isn’t in their best interest. Many states are attempting to set up predatory lending laws to avert this type of activity.

Excessive Fees
A refinanced mortgage can be packed with excessive fees and/or unnecessary fees. A regular mortgage usually will have loan fees below 1% of the total loan amount. A predatory mortgage can have loan fees in excess of 5%. These excessive costs are tucked into the loan amount so the lender can easily disguise them, and these fees can put thousands of the homeowner’s dollars into the predator’s pockets. This practice falls within the definition of predatory lending.

Insurance and Other Unnecessary Products
Predators often add insurance and other unnecessary products to the loan amount. The insurance they either insist on or intimidate the borrower into buying can include regular mortgage insurance, fire and hazard insurance, life insurance, disability insurance, homeowner’s insurance, and health insurance. The insurance can be extended to include all family members, not just the borrowers themselves. The premium for these items is also added onto the loan amount where the cost is not easily spotted by the borrower. And, of course, the predator earns large commissions every year on the premiums paid. A variation of this happens when three or five years of premium are paid in advance.

Abusive and Abnormal Prepayment Penalties
Only about 2% of normal conventional mortgages have a prepayment penalty that might be difficult to meet. Up to 80% of subprime mortgage have an abusive prepayment penalty. Why? This is one more way the predators can gouge an unsuspecting homeowner. The prepayment penalty is a fee the lender requires the borrower to pay if the borrower should pay off the mortgage loan early. The subprime borrower usually has less-than-perfect credit when originally taking out the mortgage, and the prepayment penalty is hidden in the fine print. Over the next few years the borrowers may manage to improve their credit and want to obtain a new mortgage that has lower interest and lower payments. However, the prepayment penalty on the original mortgage (which often equals 5% of the original loan) is so high that it eats up any equity the homeowners have built up and can even leave them owing more money. Homeowners often are trapped into keeping the original, high-interest mortgage. This is also another case where the lender gives a kickback to the mortgage broker for helping to include the high prepayment penalty in the mortgage. In the future, when the homeowner has to pay the prepayment penalty, the mortgage broker pockets more money.

Because the predators using high prepayment penalties channel the borrowers into subprime loans, the honest conventional lenders lose a great deal of prime loan business. This indirectly affects the fees they need to charge their regular prime borrowers. Everyone loses when predatory lenders have their way.

Loan Flipping
Another form of predatory lending practices occurs when Con-Artists find a homeowner whom they can talk or coerce into refinancing their mortgage, even though the homeowner gains nothing from the transaction. The process is called loan flipping. While the transaction might put a few thousand dollars into the homeowner’s bank account, this amount is easily eaten up by the excessive fees, higher interest rate, and prepayment penalties of the new mortgage. A serious danger with loan flipping occurs when a balloon payment is inserted into the fine print. While the homeowners originally may have had twenty or thirty years to pay on the mortgage, under the loan flipping they might be signing for a two, three, or five year balloon payment. At the end of that time they need to find a way to refinance the house again or lose it completely. Of course, the ‘expert Con-Artists’ will be only to glad to do another loan flip and refinance it for them – once again pocketing thousands of dollars in the process and leaving the homeowner with even less equity in the property than before.

Mandatory Arbitration
Another practice that falls within the definition of predatory lending happens when a lender hides words in the fine print that make it illegal for the homeowner to take legal action against the lender. The borrowers sign away their rights to sue the lender for any fraud, predatory actions or illegal actions. The only right the borrowers have is to take their grievances to arbitration. The arbitration process is totally in the hands of the lenders, usually conducted in secret without the borrowers having adequate representation. Although the borrowers can usually have legal counsel, they find it difficult to find anyone who will represent them because the lawyers are not guaranteed payment of their fees in arbitration like they are in court. Many arbitration cases are handled over the phone and when a small individual is pitted against a large corporation and the proceedings are confidential with no stenographic or written record of the facts, the borrower is at a true disadvantage. Most arbitration decisions are binding and the borrowers cannot appeal them.

More than 50% of the lenders are now including mandatory arbitration in their loan documents, and the borrowers remain unaware of the implications. Lenders favor arbitration because it eliminates a borrower’s rights to do a class-action suit against the lender. The Fair Credit Reporting Act and the Truth in Lending Act have no bearing in an arbitration situation, only if one can go to court. And, some lenders keep their right to go to court but prohibit the borrower from doing so. The fees for arbitration can also be more expensive than filing a small claims court suit. Overall, the borrowers who sign a mandatory arbitration contract are bound to a very lopsided arrangement that rarely is in their best interest.

The major arbitration administrators that a borrower can utilize are the National Arbitration Forum, the American Arbitration Association (ADR), and Jams Endispute.

Predatory Lending Laws
Predatory lending laws are slowly being integrated into the legal systems of the federal government and the individual states. More than 35 states have already placed a legal limit on the maximum prepayment penalty that a homeowner should have to pay, and over half of the states have taken steps to limit predatory lending practices during the last five years. While the definition of predatory lending varies in each state, the awareness that individual citizens need to be protected by predatory lending laws is growing.

As more and more homeowners become aware that they have the right to report mortgage fraud and predatory lending, and policy makers, consumer advocates and civil rights leaders take stronger action against the Con-Artists specializing in predatory lending practices, then the elderly, minorities and those with less income are less likely to be prey for predators. Politicians on every level are becoming more aware of the need for predatory lending laws as the Con-Artists multiply, ultimately costing citizens billions of dollars. Organizations like the Center for Responsible Lending, the National Association of Mortgage Brokers, the Mortgage Bankers Association (MBA), and the American Bar Association actively work to promote predatory lending laws. They also know that educating the public is one of the strongest deterrents to mortgage fraud and predatory lending practices. These organizations are committed to providing this education. IN ADDITION, YOU MAY CONTACT YOUR LOCAL ATTORNEY GENERAL, FOR CONTACT INFORMATION CLICK HERE:  http://www.foreclosureself-defense.com/the-library/linksresources/

YOU MAY HAVE BEEN OF FORECLOSURE FRAUD ALSO THRU ROBO-SIGNING

What is a robo-signer?

Robo-signers are mortgage lending company employees who prepared and signed off on foreclosures without reviewing them, as the law requires. Jeffrey Stephan, the GMAC employee who was the first identified as a robo-signer, has acknowledged in sworn deposition that he prepared 400 such foreclosures a day. The discovery of robo-signers could simply be the tip of the iceberg. If so, more revelations could only increase the pressure on large banks. Their potential exposure to losses could skyrocket. For a complete list of robo-signers, locations, employers, depositons, varying signatures, false notaries and co-conspirators click on this: http://takeyourhomeback.com/?p=75and follow the instructions for ease of use.

What’s the significance?

The “robo-signing of affidavits and Assignments of Mortgage and all other mortgage foreclosure documents served to cover up the fact that loan servicers cannot demonstrate the facts required to conduct a lawful foreclosure. If it turns out that robo-signers did indeed sign off on loans without review, they committed fraud by claiming knowledge of a financial matter of which they had no personal knowledge. It could also mean that some people are wrongly being evicted from their houses.

From underwriting fraudulent mortgages; to shuffling it through the mortgage securitizationchain without following proper legal procedures like the simple act of passing along paperwork; to concealing or doctoring basic facts when securitizing the mortgages and selling them to investors, large lenders and their partners on Wall Streetcould face hundreds of billions of dollars in losses by being forced to buy back faulty mortgages, some of which have already defaulted, from misled investors.

Investors bought mortgage-linked securitieswith the promise that the underlying mortgages conformed to basic underwriting standards, and that proper procedures were followed in the chain of securitization and a tax-exempt status. Steep losses on those investments and the discovery of potentially fraudulent activity are pushing investors to force banks to buy them back.

With all of the press robo-signing has gotten, it is a bit surprising that everyone is having such a hard time concluding whether these practices effect non-judicial foreclosures.
The topic has not gotten the treatment it deserves, I will try to help. The following are by no means a complete list, but are the most clear LEGAL reasons (setting aside pure moral questions and the U.S. Constitution) that the Robo-Signer Controversy will entitle hundreds of thousands of homeowners wrongfully foreclosed and evicted to sue in non-judicial foreclosure states.

Briefly, Robo Signers are illegal because fraud cannot be the basis of clear title, trustee’s deedsfollowing Robo Signed sales are void as a matter of law, notarization is a recording requirement for many of the documents, which we also know was often botched, and most importantly because robo signed falsifications ARE meant for use in court, including unlawful detainers and bankruptcy matters.

Clear Title May Not Derive From A Fraud(including a bona fide purchaser for value).
In the case of a fraudulent transaction the law is well settled.

Numerous authorities have established the rule that an instrument wholly void, such as an undelivered deed, a forged instrument, or a deed in blank, cannot be made the foundation of a good title, even under the equitable doctrine of bona fide purchase. Consequently, the fact that purchaser acted in good faith in dealing with persons who apparently held legal title, is not in itself sufficient basis for relief.

It is the general rule that courts have power to vacate a foreclosure sale where there has been fraud in the procurement of the foreclosure decree or where the sale has been improperly, unfairly or unlawfully conducted, or is tainted by fraud, or where there has been such a mistake that to allow it to stand would be inequitable to purchaser and parties.

Hence, if forged Robo Signed signatures are used to obtain the foreclosure, it CERTAINLY makes a difference in non-judicial foreclosure states as well as judicial states.

In turn, the law requires that the beneficiary execute and notarize and record a substitution for a valid substitution of trustee to take effect. Thus, if the Assignment of Deed of Trust/ Mortgageis robo-signed, the sale is void. If the substitution of trustee is robo-signed, the sale is void. If the Notice of Default is Robo-Signed, the sale is void.

These documents are not recordable without good notarization. The reason these documents are notarized in the first place is because otherwise they will not be accepted by the County recorder. Moreover, a notary who helps commit real estate fraud is liable.

Once the document is recorded, however, it is entitled to a “presumption of validity”, which is what spurned the falsification trend in the first place. Therefore, the notarization of a false signature not only constitutes fraud, but is every bit intended as part of a larger conspiracy to commit fraud on the court.

The documents are intended for court proceedings. A necessary purpose for these documents, AFTER the non judicial foreclosure, is the eviction of the rightful owners afterward. While the foreclosures are non-judicial, evictions afterwards still are conducted in court, although the process moves quickly and is mostly a “rubber stamping” by skeptical judges. However, as demonstrated below, once these documents make it into court, the bank officers and lawyers become guilty of FELONIES:

The Doctrine of Unclean Handsprovides: plaintiff’s misconduct in the matter before the court makes his hands “unclean” and he may not hold with them the pristine remedy of injunctive relief. The unclean hands rule requires that the Plaintiff not cheat, and behave fairly. The plaintiff must come into court with clean hands, and keep them clean, or he or she will be denied relief, regardless of the merits of the claim. Whether the doctrine applies is a question of fact.

Robo Signed Documents Are Intended for Use in Bankruptcy Court Matters. One majorly overlooked facet is the extremely active bankruptcy court proceedings, where, just as in judicial foreclosure states, the banks must prove “standing” to proceed with a foreclosure. If they are not signed by persons with the requisite knowledge, affidavits submitted in bankruptcy court proceedings such as objections to a plan and Relief from Stays are perjured. The documents in support are often falsified evidence. Conclusion

Verified eviction complaints, perjured motions for summary judgment, and all other eviction paperwork after robo signed non judicial foreclosures are illegal and void. The paperwork itself is void. The sale is void. But the only way to clean up the hundreds of thousands of effected titles is through litigation, because even now the banks will simply not do the right thing. And that’s why robo signers count in non-judicial foreclosure states. Victims of robosigners in may seek declaratory relief and damages, an injunction and attorney’s fees for Unfair Business practices, as well as claims for slander of title; abuse of process, civil theft, and variety of other civil remedies.

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