Daily Archives: July 23, 2014

Statute of Limitations Issues in Foreclosure Actions

An important issue that arises for lenders when pursuing foreclosure actions is determining when the statute of limitations begins to run. Florida Statutes provide that a party has five years to foreclose a mortgage, but determining when the five years begins to run has proven to be a topic of legal debate. Lenders who find themselves potentially beyond the statute of limitations after an unsuccessful first attempt to foreclose may find hope in the recent decision by the Florida Fifth District Court of Appeals in U.S. Bank National Association v. Bartram.

In Bartram, the bank initially brought a foreclosure action in 2006, accelerating the debt.  However, the bank did not actively participate in the action, resulting in an involuntary dismissal in 2011. In the meantime, the borrower and his wife divorced, and the borrower was required in the divorce to execute a note and mortgage in favor of his ex-wife. In 2011, the ex-wife filed her own foreclosure action, naming the bank. In her foreclosure, the borrower filed a counterclaim seeking a declaratory judgment against the bank, arguing that the statute of limitations now barred the bank from enforcing its rights under the loan documents. The trial court entered summary judgment for the borrower, rejecting the bank’s argument that it was not barred from bringing a subsequent foreclosure action, and that the five-year statute of limitations did not bar the payments that were missed within the five-year period.

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California foreclosure law: a defaulting borrower cannot enjoin a foreclosure sale by asserting that the lender lacks standing Miller Starr Regalia

Under California’s non-judicial foreclosure statutes, a defaulting borrower cannot enjoin a lender’s initiation of foreclosure proceedings by asserting that the lender lacks standing.  (Keshtgar v. U.S. Bank, N.A. (2014) 192 Cal.App.4th 1149 (Second Dist., June 9, 2014) (“Keshtgar”).)

Relying principally on:  (1) California’s non-judicial foreclosure statutes (Civ.Code, §§ 2924–2924k) and (2) the prior decision of Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149 (“Gomes”), the Second District Court of Appeal affirmed the lower court’s decision to sustain the foreclosing lender’s demurrer without leave to amend and enter judgment against the borrower.  The court held that a defaulting borrower could not preemptively enjoin a non-judicial foreclosure sale even if the wrong entity was foreclosing on the property.

Keshtgar represents the “bookend” to the Fourth District’s 2011 Gomes decision, in which the court held that a defaulting borrower could not preemptively enjoin a non-judicial foreclosure sale by claiming that the lender (or its agent) lacked standing.  In between Gomes and Keshtgar, the Fifth District’s decision in Glaski v. Bank of America, N.A. (2013) 218 Cal.App.4th 1079 (“Glaski”) distinguished Gomes in a post-foreclosure action for damages.  Keshtgar’s disagreement withGlaski arguably creates a conflict between the districts that California Supreme Court may elect to address.

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Cuomo’s Office Hobbled Ethics Inquiries by Moreland Commission

With Albany rocked by a seemingly endless barrage of scandals and arrests, Gov. Andrew M. Cuomo set up a high-powered commission last summer to root out corruption in state politics. It was barely two months old when its investigators, hunting for violations of campaign-finance laws, issued a subpoena to a media-buying firm that had placed millions of dollars’ worth of advertisements for the New York State Democratic Party.

The investigators did not realize that the firm, Buying Time, also counted Mr. Cuomo among its clients, having bought the airtime for his campaign when he ran for governor in 2010.

Word that the subpoena had been served quickly reached Mr. Cuomo’s most senior aide,Lawrence S. Schwartz. He called one of the commission’s three co-chairs, William J. Fitzpatrick, the district attorney in Syracuse.

“Pull it back.”

The subpoena was swiftly withdrawn. The panel’s chief investigator explained why in an email to the two other co-chairs later that afternoon.

“They apparently produced ads for the governor,” she wrote.

The pulled-back subpoena was the most flagrant example of how the commission, established with great ceremony by Mr. Cuomo in July 2013, was hobbled almost from the outset by demands from the governor’s office.

While the governor now maintains he had every right to monitor and direct the work of a commission he had created, many commissioners and investigators saw the demands as politically motivated interference that hamstrung an undertaking that the governor had publicly vowed would be independent.

The commission developed a list of promising targets, including a lawmaker suspected of using campaign funds to support a girlfriend in another state and pay tanning-salon bills. The panel also highlighted activities that it saw as politically odious but perfectly legal, like exploiting a loophole to bundle enormous campaign contributions.

But a three-month examination by The New York Times found that the governor’s office deeply compromised the panel’s work, objecting whenever the commission focused on groups with ties to Mr. Cuomo or on issues that might reflect poorly on him.

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The Revolving Door: CFTC’s O’Malia To Leave Agency For Wall Street Group

Law360, New York (July 23, 2014, 12:13 PM ET) — The U.S. Commodity Futures and Trading Commission’s Scott O’Malia will soon take the top position at the International Swaps and Derivatives Association, a Wall Street lobbying group that is currently suing the CFTC.

O’Malia will become the chief executive officer of the ISDA on Aug. 18, after he leaves the CFTC on Aug. 8, the group said Wednesday. He’ll also be a director. O’Malia succeeds Robert Pickel in the head chair.

The ISDA was not immediately available for comment. O’Malia’s office declined to comment.

Source: Law 360

UBS : France investigates UBS for suspected tax avoidance offence

Swiss bank UBS was placed under formal investigation in France on Wednesday on suspicion that it helped wealthy French customers avoid tax authorities, a spokesman at the bank’s French subsidiary said.

Three former and current executives with UBS’ French subsidiary were also individually placed under investigation, the spokesman said.

Last year, a French prosecutor put the UBS head office and its subsidiary in France under formal investigation on related charges of illegal sales practices and complicity in illegal sales practices, respectively.

The alleged sales practices in question involved seeking out wealthy customers in France who would be interested in opening bank accounts inaccessible to French tax authorities.


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CFPB, FTC file 3 lawsuits against deceptive foreclosure firms

The Consumer Financial Protection Bureau, the Federal Trade Commission and 15 states are filing three lawsuits against companies and individuals that collected more than $25 million in illegal advance fees with false promises to prevent foreclosures.

This giant sweep against foreclosure relief scammers is an effort to seek compensation for victims, civil fines, and injunctions against the scammers.

In addition, the FTC is filing six lawsuits, and the states are taking 32 actions.

“We are taking on schemes that prey on consumers who are struggling to pay their mortgages or facing foreclosure,” said CFPB Director Richard Cordray.

“These companies pocketed illegal fees — taking millions of hard-earned dollars from distressed consumers, and then left those consumers worse off than they began. These practices are not only illegal, they are reprehensible,” Cordray added.

There were three lawsuits filed:

1. The first lawsuit names Clausen & Cobb Management Company and owners Alfred Clausen and Joshua Cobb, as well as Stephen Siringoringo and his Siringoringo Law Firm.

2. The second lawsuit is against The Mortgage Law Group, LLP, the Consumer First Legal Group, LLC, and attorneys Thomas Macey, Jeffrey Aleman, Jason Searns, and Harold Stafford.

3. The third lawsuit is against the Hoffman Law Group, its operators, Michael Harper, Benn Wilcox, and attorney Marc Hoffman, and its affiliated companies, Nationwide Management Solutions, Legal Intake Solutions, File Intake Solutions, and BM Marketing Group.


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Ginnie Mae ditches paper and goes eMortgage

Ginnie Mae is getting greener.

The only issuer of government-backed mortgage bonds, announced today it is moving away from paper-based issuer applications to an all-electronic system.

As of September 1, all applicants will be required to file electronically, via the Application Connection.

Ginnie Mae will not accept paper-based (hard copy) applications after July 31, 2014.

“We want to do everything that we can to ensure that our process is smooth, efficient and responsive for all parties,” said Ginnie Mae President Ted Tozer in a statement. “This includes creating a more efficient application process, becoming more responsive to applicant concerns and helping prospective Issuers clearly understand our issuer eligibility criteria and what it means to become a participant in our program.”

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Delaware Judge Faults Ocwen for Pushing Homeowners to Bankruptcy

It’s not one of the multibillion-dollar settlements or multimillion-dollar jury awards designed to spur reform of such allegedly abusive mortgage-servicing practices as falsified court documents, improper fees and other misconduct. But a recent ruling from a Delaware judge is a step forward for people making a last stand in bankruptcy to hang on to their homes, one attorney says.

Judge Brendan Shannon of the U.S. Bankruptcy Court in Wilmington, Del., on Friday ordered Ocwen Loan Servicing LLC to pay the fees and costs of a Delaware couple’s bankruptcy on the grounds that Ocwen’s “unfounded and incorrect assertion” that they had defaulted on their mortgage loan was what drove them to seek court protection.

Richard J. and Mary Ann Williams were never materially behind on their mortgage payments, the judge said, but they were pushed into bankruptcy to keep Ocwen from taking their home in foreclosure.

“Basically, they were kicking two older people out of their home for no reason whatsoever other than they think they can get away with it,” was attorney Peter K. Schaeffer Jr.’s take on his clients’ plight. It still happens, even after a series of reforms designed to rein in abuses by mortgage lenders and loan services, he said.


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Wells Fargo seeks foreclosure on home of recently deceased woman

Wells Fargo has asked a Jefferson County District Court judge to allow the foreclosure of a home that previously belonged to a deceased woman.

Wells Fargo Bank filed an application for an expedited order permitting the foreclosure of a lien July 10 in the Jefferson County District Court against Doris Willis.

Wells Fargo claims the owners of a home previously belonging to Willis at 3030 Major Drive in Beaumont have failed to make seven monthly payments since her death Aug. 11, 2009.

The amount required to cure the default is $4,376.76, the suit states. The total amount to pay off the loan agreement, contract or lien is $24,530.02.


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DOJ Trains AUSAs to Chase Mice While Lions Roam the Campsite

By William K. Black

In researching my series of articles on the critical omissions in Attorney General Eric Holder’s press release about the settlement with Citi I realized that I need to write multiple articles about the destructive role played by Benjamin Wagner. Holder made Wagner DOJ’s leader on mortgage fraud because Wagner was so willing to propagate the single most absurd, destructive, but so very useful (to the administration and the banksters) lie about mortgage fraud.

“Benjamin Wagner, a U.S. Attorney who is actively prosecuting mortgage fraud cases in Sacramento, Calif., points out that banks lose money when a loan turns out to be fraudulent. ‘It doesn’t make any sense to me that they would be deliberately defrauding themselves,’ Wagner said.”

This column addresses a single article Wagner’s shop published in a journal volume entitled “Mortgage Fraud” to train Assistant U.S. Attorneys (AUSAs) on how to investigate and prosecute mortgage fraud. 32 UNITED STATES ATTORNEYS’ BULLETIN MAY 2010. The title of the article is “Finding the Smoking Gun,” and the author is Barbara E. Nelan, Assistant United States Attorney, Northern District of Georgia.

This article exemplifies three decisive DOJ failures led by Wagner. AUSAs were trained by Wagner to believe three lies:

  1. The “bank,” by which he really meant the bank CEO, was always the victim of mortgage fraud and never the leader of those frauds
  2. Banking regulatory agencies had no meaningful role to play in detecting, investigating, and aiding the prosecution of frauds that was worth mentioning in the training, and
  3. Whistleblowers had no meaningful role to play in detecting and aiding the prosecution of frauds that was worth mentioning in the training

Those three lies guaranteed de facto immunity for the senior bank officers who led the three most destructive financial fraud epidemics in history. Wagner has defined out of existence the three financial fraud epidemics that drove our crisis, trivialized the critical need to restore the criminal referral process at the banking regulatory agencies, and failed to train AUSAs to understand the critical need to have whistleblowers come forward – particularly given the destruction of the criminal referral process at the banking regulatory agencies.

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