California Homeowners Bill of Rights | Predatory Lenders
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California Homeowners Bill of Rights | Predatory Lenders

October 24, 2019

I’m Susan Murphy, lead attorney at Advocate Legal. Some of you already know me from our free consultations on Saturday. Most of you that come to us have subprime loans. Most of you are looking for a loan modification. You show us boxes of letter, emails. You tell us horror stories about hundreds of phone calls. They lost your documents. You never talk to the same person twice. They told you you were in review. They told you don’t worry. And at the same time they sold your property. These days we’re also seeing servicers refuse payments. This may happen in the middle of a trial payment plan or after a permanent modification. It may happen after they switch your servicing rights to a new servicer and a new servicer refuses your payments. It may happen for no reason at all. So, why do they do this? Do they want to foreclose? Short answer is yes, because they make more money. This is because the business of your servicer is the business of foreclosure. Used to be that the bank lent you money and the bank cared if you paid it back. Now with securitization the bank lends you money but the bank doesn’t really care if you can pay it back, because the banks sells your loan to a trust and the bank only retains a servicing rights. And the biggest of all the servicing rights is the right to foreclose. So now the investor cares if you pay back but the servicer benefits if you don’t. And that’s why we’re seeing what we call servicer tricks. And some of these tricks are things we thought were unimaginable a few years ago. For instance we’ve seen a servicer refuse loan payments from a widower because his spouse had died. We’ve seen a servicer violate the automatic stay and so a property at foreclosure sale when the borrower was in bankruptcy. Calling in a promissory note against a widower not on a deed of trust is a violation of federal law. Ignoring the automatic stay and selling a property while a borrower is in foreclosure is also a violation of federal law. And you are entitled to rescind your sale and also get statutory penalties. This is all part of the foreclosure business model. Most of you already know that the homeowners’ bill of rights which passed in California in 2013. You know you’re entitled to a single point of contact. You know about dual tracking which means a servicer can’t foreclose on you while you’re in review for a loan modification. But there are loopholes to these statues that you might not know about. For instance the fact that dual tracking only protects you if it’s your first time applying for a loan modification. And the foreclosure case law is also tricky. A lot like threading a needle. If you have any of these servicer issues come to a free consultation on Saturday. If you wait, if you trust the promises of the servicer, if you try to handle it yourself such as suing in pro per, you’re likely to lose the rights you have and the right to litigate in the future. Don’t wait. Call us now. There’s nothing to lose.

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