vettegirl

Has anyone sued their lender for fraud?

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In Arizona, as an example, proving up all 9 elements of fraud would likely be almost impossible. The slight of hand and misdirection and plausible denial available to your "lender", if they can even reliably be identified, would make the task very expensive with low odds. IMHO

 

Personally I don't like the odds and the very limited leverage I perceive in that cause of action. Especially in the wild and crazy world of securitization with scant rule of law being applied for homeowners seeking justice.

 

If one was really set on such an approach my suggestion would be to try to locate an attorney that has filed and settled (fraud against deep pocket fraudsters isn't going to trial IMO) on such a cause of action in your jurisdiction and give them a call.

 

I believe other causes of action are likely to prove more successful. Just started reading a interesting attorney book title, "Overcoming Foreclosure" by Norman L. Sirak. It seems to present a good understanding of how the pieces of the mortgage scam puzzle fit together. Another good read on the subject is titled "Fighting the Foreclosure Machine" by Robert M. Janes, B.B.A., M.P.A., J.D.

 

Regardless, it might makes sense to search out some good books to assist in understanding the industry and the fraud angle and whether it could be successfully pursued or should be avoided.

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Yes. I sued Bank of America for violating the Illinois Consumer Fraud Act. Don't ask me about the outcome--its ongoing.

State consumer fraud acts often have fewer and easier to prove elements. The Illinois Consumer Fraud and Deceptive Business Practices Act ("Act"), 815 ILCS 505/1, et seq., for example, has 4 elements: http://www.querrey.com/assets/attachments/176.pdf

Versus the 5 elements for their common law fraud according to: http://www.oflaherty-law.com/blog/consumer-fraud-in-illinois/

 

I imagine the consumer fraud acts vary a lot as to their private right of actions as well as relief available depending on the particular state.

 

Best of success prevailing against BoA. Couldn't happen to a nicer party. ;-)

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In Arizona, as an example, proving up all 9 elements of fraud would likely be almost impossible. 

 

Those wacky 9th circuit states. 

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In Arizona, as an example, proving up all 9 elements of fraud would likely be almost impossible. The slight of hand and misdirection and plausible denial available to your "lender", if they can even reliably be identified, would make the task very expensive with low odds. IMHO

 

 

For someone who does not know what are ALL these NINE Elements about:

 

(1) a representation;

(2) its falsity;

(3) its materiality;

(4) the speaker’s knowledge of its falsity or ignorance of its truth;

(5) the speaker’s intent that it be acted upon by the recipient in a manner reasonably contemplated;

(6) the hearer’s ignorance of its falsity;

(7) the hearer’s reliance on its truth;

(8) the right to rely on it;

(9) the plaintiff’s consequent and proximate injury.

 

Wagner v. Casteel, 136 Ariz. 29, 663 P.2d 1020, 1022 (Ariz.Ct.App.1983).

 

This means that ALL NINE of these elements generally must be present in the facts and plead with specificity 

 

http://www.foreclosureindustrynews.com/2011/11/17/9-elements-of-fraud-in-arizona/

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specificity being the key word.

 

On this date ant this time __________ a representative told me "blah blah blay yacketity shmack" vs. Defendant has engaged in fraudulent account practices.

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For someone who does not know what are ALL these NINE Elements about:

 

(1) a representation;

(2) its falsity;

(3) its materiality;

(4) the speaker’s knowledge of its falsity or ignorance of its truth;

(5) the speaker’s intent that it be acted upon by the recipient in a manner reasonably contemplated;

(6) the hearer’s ignorance of its falsity;

(7) the hearer’s reliance on its truth;

(8) the right to rely on it;

(9) the plaintiff’s consequent and proximate injury.

@GDayMateAZ - Thanks.  I was just going to ask what the 9 elements were.  

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.

I'm going to be the devil's advocate - nationwide work almost daily with people that are deep in financial trouble, looking to grasp anything to help them.

A person can seek out information by reading books and studying cases easily found on the internet. There are many people reporting misunderstand or are misrepresenting the key points of a mortgage. Either by their lack of knowledge or trying to sell something. You'll never be able to predict 100% of the outcome if the mortgage payment isn't made, other than being foreclosed upon.

My point is every situation is different. When the individual is in default and facing foreclosure, the key principles are the investor/bank, the borrower and the closing documents signed accepting the terms of the loan. On refinances there is a three day rescind period, on purchases once you leave the closing table the terms of the loan are in affect. Because the mortgage is secured against the home, this gives the bank the right to foreclosure if payments are not made.

I'm working case right now on a property in Georgia involving CW/BOA and BONYM. In the short term future the mortgage is scheduled to balloon to include both interest and principle. Being a former loan officer, there is no way this loan should of been approved.  A mature borrower on a fixed income (social security) entered into a no-document, no income check 5/25 adjustable Interest-Only mortgage at 95% financing to purchase an investment property.

Countrywide ignored conventional underwriting guidelines regarding the borrower's debt to income ratio. Guidelines state if a borrower is obligated to pay 55% of his monthly income to principal, interest, and property taxes and another 20% to installment loans, medical, or other expenses, they are destined to fail. The type of underwriting process Countrywide initially used placed the borrower in a precarious financial situation where the ability to repay this loan would be very low if the interest rate increases.

Specifically the borrowers loan is part of trust series CWALT 2007-HY2, which does not allow any modifications. Pursuant to HUD No. 12-026 agreement dated February 9, 2012, United States Attorney Eastern District of New York, involving settlement of mortgage fraud, Bank of America agreed to resolve a loan modification program for Countrywide borrowers. Under the terms of the program, Bank of America is to solicit all potentially eligible borrowers and provide a loan modification to anyone with an eligible mortgage who accepts the offer.
 

My question and case - is it fraud when Countrywide deceived borrowers by misrepresenting loan terms. Borrowers accepted unfair loan terms, usually through aggressive sales tactics. They were taken advantage of because of their lack of understanding of terms and involvement in complicated transactions.

Months ago sent Bank of America an appeal to have this loan modified, and it was denied.  It is a common practice of servicing banks to purchasing loans from the investors when there are no-change clauses on a loan. My next step is filing a motion for Bank of America to purchase directly the loan from Bank of New York Mellon. 

My $00.02

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Just wondering if anyone has, or has thought about it......

 

I'm preparing my Counterclaim against SLM - forgery - my employment status "Self-Employed" instead of actual "Unemployed".

 

It was crafted together with Techskills for-profit school (2001).

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I'm going to be the devil's advocate - nationwide work almost daily with people that are deep in financial trouble, looking to grasp anything to help them.

A person can seek out information by reading books and studying cases easily found on the internet. There are many people reporting misunderstand or are misrepresenting the key points of a mortgage. Either by their lack of knowledge or trying to sell something. You'll never be able to predict 100% of the outcome if the mortgage payment isn't made, other than being foreclosed upon.

...

My question and case - is it fraud when Countrywide deceived borrowers by misrepresenting loan terms. Borrowers accepted unfair loan terms, usually through aggressive sales tactics. They were taken advantage of because of their lack of understanding of terms and involvement in complicated transactions.

...

Confusion on points of law were intentional in the design of MERS and securitization. You need to have a believable cover story/distraction when running the crime of the century.

 

There does not appear to be an attorney out there winning with 100% predictability against the servicers/debt collectors that are illegally foreclosing by merely alleging to the court that a homeowner is not making a mortgage payment.

 

Technically an attorney is also trying to "sell you something" and of course lack of knowledge happens in that profession just like any other.

 

From what I have seen there is a mile wide gap between being an actual victim of fraud and proving that fraud in a court of law. So, the question of "is it fraud" is only a very preliminary question FAIK. After looking for easier CoAs (than fraud) and failing to find them I might proceed cautiously on fraud if I already had my provable evidence for all my state's underlying elements of fraud and my discovery would be used to mostly to beef up my fraud claim.

 

The only thing100% predictable is that in the cases where MERS or securitization is involved the foreclosure will be unlawful under the state's UCC statute. Like fraud, proving that in a court of law is not likely to be an easy task or attorneys would be rapidly racking up wins/favorable settlements.

 

The presumption in court is that the judge pays his mortgage and you should pay yours (even if to the wrong party) or lose your home regardless of what the state law says. The fact that it is the debt collector/thief that is getting a free home should cause untold sleepless nights for an ethical judge. But I would not bet on rampant insomnia.

 

My presumption in court is that the judge should follow the law and it is up to me or my competent counsel to enforce the enforcement of the law. Such enforcement efforts should either happen at the trial court level or upon appeal.

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My question and case - is it fraud when Countrywide deceived borrowers by misrepresenting loan terms. Borrowers accepted unfair loan terms, usually through aggressive sales tactics. They were taken advantage of because of their lack of understanding of terms and involvement in complicated transactions.

 

Parties are free to enter into contracts, even bad ones. And, when one enters into a contract, it is presumed they've read, understand and accept the terms. While I do not disagree that folks are taken advantage of every day, the truth of the matter is that that most care more about just getting into the house than they do about understanding what they're getting into.

 

People are more concerned with reading the fine print on their book-of-the-month club subscription than they are with mortgage documents. Who isn't guilty of mindlessly signing one document after another (at a closing) without so much as a cursory glance at the document? If it became a commonplace occurrence for homebuyers to be represented by counsel throughout the largest financial transaction of their lives, the balance of power between seller, lender and buyer would be more evenly distributed, resulting in a lot fewer homebuyers getting screwed.

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Parties are free to enter into contracts, even bad ones. And, when one enters into a contract, it is presumed they've read, understand and accept the terms. While I do not disagree that folks are taken advantage of every day, the truth of the matter is that that most care more about just getting into the house than they do about understanding what they're getting into.

 

People are more concerned with reading the fine print on their book-of-the-month club subscription than they are with mortgage documents. Who isn't guilty of mindlessly signing one document after another (at a closing) without so much as a cursory glance at the document? If it became a commonplace occurrence for homebuyers to be represented by counsel throughout the largest financial transaction of their lives, the balance of power between seller, lender and buyer would be more evenly distributed, resulting in a lot fewer homebuyers getting screwed.

It is true that people don't read their mortgage documents (and really, really should). Having read my deed of trust multiple times it is not trivial to understand precisely what is means and the implication of all of its clauses. I am skeptical of a professional, that did not specialize in winning real estate litigation, claiming to thoroughly understand mortgage documents. Reading through some of the foreclosure defense cases with homeowner attorneys convinces me that there is some serious lack of understanding going on (*). That said, the online video of arguments made before the Washington Supreme Court between MERS and a homeowner (as I recall) were made by attorneys well versed in the applicable law and spinning it to the benefit of their clients (as they should do).

 

Here is some common verbiage from a DOT: BORROWER COVENANTS that Borrower is lawfully seised of the estate hereby conveyed and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record.

 

The same verbiage appears in a MERS DOTS also. This standard paragraph ( example at http://www.freddiemac.com/uniform/doc/3003-ArizonaDeedofTrust.doc ) plainly reads, on page 3, as requiring the homeowner to defend the title. It would seem that a homeowner with a standard DOT should be able to routinely resist any challenge on standing while defending their title. The homeowner promised to defend the title against all claims and demands in their security agreement.

 

(Don't recall if I first saw that in attorney Norman Sirak's "Overcoming Foreclosure" or elsewhere. Lacking an index I cannot easily locate the explanation in Sirak's book.)

 

I don't believe it would balance the power between the seller, lender, and buyer to have representation but it would seem a start down the path to having fewer "homebuyers getting screwed". Mainly, because the homeowner attorney would probably have to strongly recommend that the homeowner "don't sign that !@#$%^&".

 

Mortgage documents, as they exist, are wholly unfit for consumers IMHO.

 

Interestingly "the largest financial transaction of their lives" is most often done via real estate agents reeking of UPL.

 

* I recall reading an AZ case a couple of years back where the homeowner's counsel used the "show me the note" defense (that he had already lost with in another case) in their case promoting a threat of sanctions the next time he filed that DOA defense.

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Just wondering if anyone has, or has thought about it......

 

As others have stated, a cause of action under your state's Consumer Fraud Statute is far easier than suing under Common Law Fraud.  I would not hesitate to bring the action, especially in a defensive action, and especially if you're pro se.  Hiring counsel might be another story as the cost could be prohibitive.  The only thing you have to lose is nothing, basically.  Just be certain to follow the rules of the court and the pleading requirements.  Too often, people lose NOT because they lacked a valid claim, but because they failed to plead it properly.  Fraud requires the pleading to be specific - who, what, when, where, how.

 

NO way I would not plead the claim if I thought I had one.

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