Maria L. Hutkin and Jude J. Basile
Maria L. Hutkin and Jude J. BasileThe homeowners won flat out at a trial — something that should have happened in most of the 6.6 million Foreclosures conducted thus far. U.S. Bank showed its ugly head again as the alleged Trustee of a trust that was most probably nonexistent, unfunded and without any assets at all much less the homeowners alleged loan. Still the settlement shows how far Wall Street will go to pay damages rather than admit their liability to investors, insurers, counterparties in credit default swaps, and the Federal Reserve.
When you think of the hundreds of millions of wrongful foreclosures that were the subject of tens of billions of dollars in “settlements” that preserved homeowners rights to pursue further damages and do the math, it is obvious why even the total of all the “settlements” and fines were a tiny fraction of the total liability owed to pension funds and other investors, insurers, CDS parties, the Federal Government and of course the borrowers who never received a single loan from the banks in the first place. If 5 million foreclosures were wrongful, as is widely suspected at a minimum, using this case and some others I know about the damages could well exceed $5 Trillion. Simple math. Maybe that will wake up the good trial lawyers who think there is no case!
Maria L. Hutkin and Jude J. BasileA fitting announcement on the 5th anniversary of the Lehman Brothers collapse. the economy is still struggling as more than 15 million American PEOPLE were displaced, lost equity and forced into bankruptcy by imperfect mortgages that were a sham, and thus imperfect foreclosures that were also a sham. Another 15 million PEOPLE will be displaced if these wrongful, illegal and morally corrupt sham foreclosures are allowed to continue.
This case, like the recent case won by Danielle Kelley (partner of GGKW) was based upon dual tracking. In Kelley’s case the homeowners had completed the process of getting an approved modification, which meant that underwriting, review, confirmation of data, and approval from the investor had been obtained. In Kelley’s case the homeowner had made the trial payments in full and paid the taxes, insurance, utilities and maintenance of the property.
The Bank argued they were under no obligation to fulfill the final step — permanent modification. Kelley argued that a new contract was formed — offer, acceptance and the consideration of payment that the Bank received, kept and credited to the homeowner’s account. But the bank as Servicer was still accruing the payments due on the unmodified mortgage, which is why I have been harping on the topic of discovery on the money trail at origination, processing, and third party payments.
The accounting records of the subservicer and the Master Servicer should lead you to all actual transactions in which money exchanged hands, although getting to insurance payments and proceeds of credit default swaps might require discovery from the investment banker. So in Kelley’s case, the Judge essentially said that if an agreement was reached and the homeowner met the requirements of a trial period, the deal was done and entered a final order in favor of the homeowner eliminating the the foreclosure with prejudice.
In this One West case the court went a little further. The homeowners were lured into negotiations, expenses and augments under the promise of modification and then summarily without notice to the homeowner sold the property at a Trustee sale under the provisions of the deed of trust. The Judge agreed with counsel for the homeowners that this was dual tracking at its worst, and that the bank did not have the option of proceeding with the sale.
The homeowners were forced to vacate the property and make other housing arrangements and these particular homeowners were enraged and had the resources to do what most homeowners are too fearful to do — go to the mat (go to trial.)
One West made several offers of settlement once the Judge made it clear that the homeowners had stated a cause of action for wrongful foreclosure. Bravely the attorneys and the homeowners rejected settlement and insisted on a complete airing of their grievances so that everyone would know what happened to them. After multiple offers, with trial drawing near, OneWest finally agreed to give clear title back to the homeowners and pay $1 million+ in damages on what was a six figure loan.
We now have cases in both judicial and non-judicial jurisdictions in which the homeowner was awarded the house without encumbrance of a mortgage and even receiving monetary damages in which the attorneys achieved substantial rewards on 7 figure settlements that probably would be much higher if they ever went to trial — particularly in front of a jury. This is only one of the paths to successful foreclosure defense. I hope attorneys and homeowners take note. Your anger can be channeled into a constructive path if the lawyers know how to understand these loans, and how to litigate them.
“There’s hope. I feel their pain.” — Danielle Kelley, Esq. , partner in Garfield, Gwaltney, Kelley and White.http://calcoastnews.com/2013/09/onewest-bank-pays-7-figures-mortgage-fraud-case/