Federal Judge Slams Bayview and Attorneys on Illegal “Modification” Maneuvering
Originally posted by Neil Garfield
The Lesson here is that the denial of modification presents and important opportunity to challenge the practices, authority and viability of claims by parties who seek to collect, enforce or administer loans.
[This decision is dated 11/15/17. Check any future litigation or comparable decisions before using. ]
The goal is foreclosure. There can be no doubt that the modification process over the last 20 years has been largely an exercise in futility. That’s because the parties who are asserting the right to collect, enforce or administer residential loans actually have no interest in making the loan a performing loan.
And that is because they do not have any of the loans as an asset on their balance sheets. Allowing a nonperforming loan to be modified would merely preserve a stream of revenue consisting of principal, interest, insurance and taxes together with fees is attached to that revenue stream.
But a foreclosure results in the sale of the property. This produces a windfall equivalent to the sales proceeds. This windfall is distributed as revenue to all of the players who participated in the foreclosure, including at least one undisclosed player – the investment bank (or the successor investment bank) that started the scheme.
Government laws and regulators, together with public opinion, expects that modifications should be allowed in order to reflect economic realities and enable homeowners to retain home ownership. And when the performance of a loan affected the balance sheet of a lender or bank, workouts were the rule rather than the exception. Frequently the workout was a modification.
So the game plan is to create the appearance of a procedure in which homeowners can apply for settlement, workouts or modification while at the same time setting up the homeowner for failure to comply with the procedure. Failing that, the game plan calls for proceeding with the foreclosure regardless of any pending modification activity.
Attorneys are usually excused under the twisted concept of litigation immunity, which says that an attorney cannot be sued for advocating the position of his client even if the position is based on a line. In this case, the federal judge blasted both the attorney and Bayview servicing, and in the process exposed the pernicious plan that is devoted to achieving foreclosure rather than preserving the rights of a true creditor or preserving the rights of a homeowner.
Hat tip to “summer chic”
Maryland homeowner Sherry L. Weisheit handed Bayview Loan Servicing an embarrassing defeat in her foreclosure case.
She filed suit against Bayview Loan Servicing and their law firm Rosenberg and Associates for violating RESPA and FDCPA. Weisheit’s suit revolves around Bayview Loan Servicing’s failure to give her a loan modification.
Bayview Loan Servicing denied the loan modification while proceeding with foreclosure.
However, Weisheit qualified for a HAMP modification. Bayview Loan Servicing just didn’t want to give her one and used a debunked excuse typical of a mortgage servicer.
Bayview Loan servicing explained that it denied Weinsheit’s request for a HAMP Modification because the modified monthly payment was outside the required range of 10-55% of Weisheit’s monthly gross income.
RESPA allows homeowners to appeal their modification denials. HAMP also did when it was in effect. Sherry Weisheit did exactly that. She appealed the decision with Bayview Loan Servicing.
Weisheit sent her appeal to Bayview on November 29, 2016. She notified Bayview that her monthly debt payment, in fact, would be within 10-55% of her income. In other words, Bayview had done the math wrong.
Bayview claimed their unnamed “investor” prevented them from extending the term of the loan. The Response Letter also did not name the investor nor did it describe the nature of the investor restriction.
Bayview’s Response Letter it stated that “[w]e have enclosed all supporting documentation used to complete the review on your account.”
However, the letter did not contain any such documents. Weisheit responded to Bayview stating that she would be appealing the second denial once she had received the supporting documentation.
- So let us stop right there. Bayview is lying about everything.
- First, if forced to do so, it could never produce any evidence that in fact it is authorized to administer the loan by any owner of the debt who paid for it.
- Second, Bayview describes a relationship with an investor that does not exist.
- Third, Bayview implies communication with the “investor” or instructions from the “investor” which does not exist.
- Fourth, Bayview employs a tactical strategy of falsely stating that it is enclosing documentation supporting its representations concerning communication and instructions from the investor.
In this case the federal judge was able to see through the charade. The important thing is that in this decision he characterized the attorney has a tax collector who obviously was not covered by litigation privilege.
A key element of the judge’s decision was that Bayview did not dispute the accuracy of plaintiff’s calculations, “but instead of reversing course and approving plaintiff’s lost mitigation application, Bayview asserted it was bound by an open ‘investor restriction’ that prevented it from extending the term of the loan.”
The judge’s ruling specifically states that “the response letter did not name the investor nor did it describe the nature of the investor restriction, other than to say that a prevented extension of the loan term. Towards the end of Bayview’s response letter it stated that ‘we have enclosed all supporting documentation used to complete the review on your account.’ The letter however did not contain any such documents.”
Even while the plaintiff had initiated the appeals process to Bayview and the attorney had acknowledged that the appeals process was underway, the foreclosure sale was scheduled. Among other things this violated the dual tracking restriction in which “servicers” may not pursue foreclosure while modification procedures are underway.
In his opinion, the judge points out that “a denial ostensibly based on an investor restriction that does not name the investor or explain the restriction has been held to be insufficient. See Nash, 2017 WL 1424317.
Conclusion: plaintiff has alleged sufficient facts to state a claim for relief against Bayview for violation of respirators dual tracking provision, 12 CFR section 1024.41 (g) and notice of error provisions, 12 CFR section 1024.35, and for violations of the FDCPA, 15 U.S.C. sections 1692E – 1692 have. Plaintiff has alleged sufficient facts to state a claim against Rosenberg for violations of the FDCPA, 15 U.S.C. sections 1692E – 1692F. Therefore, Bayview’s and Rosenberg’s motions to dismiss will be denied by accompanying order.
For information on foreclosure defense call us at 800-459-1215. We offer litigation support, admissible evidence, expert witness testimony, education, training, and support in all 50 states to attorneys and pro se homeowners.
If you or anyone you know is facing foreclosure, or has already lost a property to foreclosure, and want to sue for mortgage fraud, foreclosure fraud, wrongful foreclosure, or quiet title to your home FRAUD STOPPERS PMA can help you save time and money and increase your odds of success getting the legal remedy that you deserve. If you have received a Notice of Default (NOD) or a Foreclosure Notice (Foreclosure Complaint) and you want to know how to respond to the Notice of Default (NOD) or a Foreclosure Notice (Foreclosure Complaint) join FRAUD STOPPERS PMA today because FRAUD STOPPERS has a proven system to help you fight to save your home from foreclosure and sue for mortgage fraud. FRAUD STOPPERS turnkey Quiet Title Lawsuit package or Wrongful Foreclosure Lawsuit package includes a court ready complaint (petition for damages), Bloomberg Securitization Audit, Expert Witness Affidavit, Application for Temporary Restraining Order (to stop a foreclosure sale or stop an eviction), Lis Pendens (to cloud the marketability of the title to the real property), and Pro Se legal education material that can show you how to win a Quiet Title Lawsuit or win a Wrongful Foreclosure Lawsuit. This entire court ready Quiet Title Lawsuit Package or Wrongful Foreclosure Lawsuit Package can help you save money in legal fees and help you increase your odds of success. Join FRAUD STOPPERS PMA today and get mortgage fraud analysis and the facts and evidence you need to get the legal remedy you deserve at www.fraudstopper.org/pma
FRAUD STOPPERS PMA
Feel free to connect with us . . .
Address: Birch Tree MO 65438
DISCLOSURE: NOTICE OF Copyright © 2019 FRAUD STOPPERS, FRAUD STOPPERS PMA. Disclaimer: Any information or answers are provided for informational purposes only, does not constitute legal advice, and does not create PMA-Member relationship. THIS SITE IS NOT INTENDED TO BE MISCONSTRUED AS LEGAL ADVICE. Legal Information is NOT Legal Advice: This site provides “information” that is only designed to help users safely cope with their own general legal needs. Legal information is NOT the same as legal advice — the application of law to an individual’s specific circumstances. FRAUD STOPPERS is a National Private Members Association (PMA). PLEASE TAKE NOTICE OF THE FOLLOWING MARS Disclosure[s] 12 C.F.R. 1015.: (1) FRAUD STOPPERS PMA is NOT Affiliated with any Government Agency or Any Bank Lender; (2) Even if YOU Accept any of FRAUD STOPPERS PMA Products or Services Your Lender May Choose to NOT Change Your Loan. FRAUD STOPPERS products and services are only available to Active Members of the FRAUD STOPPERS PRIVATE MEMBERS ASSOCIATION. To join FRAUD STOPPERS PMA click here: https://fraudstoppers.org/members-only/