servicer

Watch Out for the Dotted Line!

Watch Out for the Dotted Line!

This week, the Ohio Sixth District Appellate Court in Toledo dismissed a consumer’s appeal after he claimed he was convinced to sign a consent agreement with the property owner through fraud because he had entered into a contract that barred his case. The lesson to learn from the Sixth District is to be aware of what you sign and how it can affect you into the future.

Charles Hanson was living in a house when Flex Property Management purchased it at a sheriff’s sale. Flex Property gave notice to Mr. Hanson to leave the property, and was directed to vacate by the end of February 2015.  Mr. Hanson, representing himself pro se, entered into settlement agreement with Flex Property outside the courtroom. In exchange for $1000 cash, receiving a pre-approval letter from the bank, and an appraisal on the home, Mr. Hanson was permitted to stay in the house and make an offer to purchase. Mr. Hanson signed a consent judgment in April 2015 that was sent along with a drafted purchase agreement for the property.

However, when the two sides returned to the court, Flex Property filed the consent judgment and, according to Mr. Hanson, this showed that Flex Property had no intention of allowing him to purchase the property. With the consent judgment duly filed, the court informed Mr. Hanson that he would be removed from the house on May 30, 2015. Mr. Hanson appealed the court’s order.

The Sixth District court dismissed Mr. Hanson’s appeal.

The key issue identified by the Appellate Court is that a consented judgment entry or settlement agreement is a binding contract between the parties. Generally, one cannot appeal a contract. Since Mr. Hanson did not expressly reserve the right to appeal in the terms of the consent agreement, he was barred from contesting the judgment in that fashion.

Since the fraud that Mr. Hanson alleged to Flex Property occurred outside the courts, there is no evidence of it on the record. As such, Mr. Hanson could not argue the fraudulent inducement claim in a direct appeal either. Instead, the Sixth District instructed that Mr. Hanson would have to petition the court to set aside the judgment under Ohio Rule of Civil Procedure 60(B) and make that case to the trial court. This is a more difficult process than a direct appeal.

Realize that when you sign something, you are likely forming a contract with the other party. Mr. Hanson represented himself and entered into two contracts with Flex Property: the settlement agreement & the consent judgment. Without realizing it, he had given up some of his rights and limited his options for the future.

A contract does not need to be a formal document that reads “Contract” at the top, or have “Wherefores” and “Therefores” sprinkled throughout. If the essential legal elements of a contract (offer, acceptance, and consideration) are met, the court will likely deem an agreement a legally binding contract.

Before you sign anything, ensure that you understand the consequences of each term and element. If you are across from a bank or property management company, you know they have had their attorneys make sure their rights and options are well protected. The best option is to get an attorney on your side to review everything and protect your interests. Contact Doucet & Associates to help ensure that your rights are protected.

 

Read the decision [Capital Income & Growth Fund, L.L.C. v. Hanson, 2016-Ohio-2973]

 

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National City Mortgage Company v. Richards: A case study in condition precedent as a foreclosure defense

National City Mortgage Company v. Richards: A case study in condition precedent as a foreclosure defense

National City Mortgage Company v. Richards: A case study in condition precedent as a foreclosure defense[1]

Before your mortgage company can initiate foreclosure proceedings and accelerate your debt they must meet any condition precedents required in the original agreement.  Most often these condition precedents come in the form of required prior notice of default and/or acceleration outlined by a provision in your note or mortgage instrument.  So what does this mean for you?  Basically it means that your mortgage company cannot take action against you without properly informing you of their intent to do so.  National City Mortgage Company v. Richards[2] illustrates the scenario well.  In that case, Richards argued that she never received notice of her default through first class mail as was required in her original agreement with the mortgage company.  Because of this oversight on the part of the mortgage company, Richards never had a reasonable opportunity to cure the problem.  The Tenth District sided with Richards and the Mortgage Company’s cause was dismissed.  If you believe you might have an issue with condition precedent or any other mortgage issue please do not hesitate to contact Doucet & Associates.

[1] By: Justin Potter, Of Counsel, Doucet & Associates Co., L.P.A.

[2] Nat’l City Mortgage Co. v. Richards, 2009-Ohio-2556, ¶ 1, 182 Ohio App. 3d 534

 

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Doucet Prevents Default Judgment in Reverse Mortgage Case

Doucet Prevents Default Judgment in Reverse Mortgage Case

Doucet & Associates Co., L.P.A. focuses on foreclosure defense because we firmly believe that the needs of innocent consumers can be eclipsed in court by massive banks. Because of the size of today’s banks, it is easy for banks to cut corners and neglect their duties to their customers under the guise of efficiency, which often contributes to foreclosure. However, this activity can result in illegal behavior, especially when short-term profits outweigh basic human decency. In the case of our client, it likely jeopardized her mother’s estate.

Our client is the executor of her late mother’s estate. The estate included a home subject to a reverse mortgage that came due upon the mother’s passing. Unlike conventional mortgages, a reverse mortgage requires no monthly payments and accrues interest until it comes due after the borrower dies, moves out of the property, or sells the house. Because interest is not paid during the life of the loan, a reverse mortgage can result in a substantial debt when it finally comes due.  If the borrower dies, it usually means that the lender has to go through the borrower’s estate to collect the outstanding debt, which can be troublesome for whoever is tasked with the estate’s management.

OneWest, the bank holding our client’s note, filed a foreclosure lawsuit in an attempt to collect the outstanding reverse mortgage debt. If a foreclosure lawsuit is filed in Ohio, the defendant has twenty-eight days to file an answer. If no answer is filed, the defendant may face a default judgment. As the executor of her mother’s estate, our client was the one tasked with the responsibility of answering the lawsuit. However, our client asserts that OneWest attempted to circumvent the law by foreclosing on her mother’s home without first providing notice to the family. Had the foreclosure lawsuit gone unnoticed, a default judgment would have likely been entered against our client.

OneWest alleged it was unable to find the addresses of the family members to notify them of the outstanding debt and foreclosure, yet our client’s brother lived next door to the mother’s home. Our client was not even made aware of OneWest’s foreclosure lawsuit until the bank servicing on her brother’s home notified her. She hired Doucet & Associates to file a motion for additional time to properly respond to the foreclosure lawsuit, and hopefully save the family’s estate. The court granted the motion and Doucet & Associates is now working to protect the mother’s estate and ensure all debts are properly paid.

Time is always an important factor in a foreclosure lawsuit, and this added time will allow for our law firm to properly analyze the case and create a solution that best suits our client. As a law firm focused on consumer law and foreclosure defense, it is unfortunate to say that we experience this sort of behavior from banks quite often.  We have seen, time and again, that banks would much rather file for foreclosure and attempt to keep other parties in the dark than settle the debt on terms that all parties involved can agree on. If you are currently dealing with a foreclosure lawsuit, or need advice managing an estate, call Doucet & Associates at (614) 944-5219.

 

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Doucet Files Class Action Lawsuit Against Nationstar Mortgage

Doucet Files Class Action Lawsuit Against Nationstar Mortgage

Doucet & Associates filed a class action lawsuit against Nationstar Mortgage alleging a systematic practice of collecting and attempting to collect fees that were discharged following bankruptcy. Our client was forced to take money out of his wife’s 401k to prevent Nationstar from inexplicably foreclosing on his home. He alleges Nationstar made no effort to adequately explain or rectify the charges on his account, and damaged his credit by considering his account delinquent even after receiving a court discharge.

Terry Forson filed for Chapter 13 bankruptcy in 2008 and spent the next five years adhering to the repayment plan approved by the court. At the end of this period, the court issued an order deeming his mortgage current and requiring Nationstar to adjust his loan balances to reflect the amounts paid and discharged. In preparation for resuming responsibility for his mortgage, Mr. Forson sent a letter to Nationstar requesting information regarding his post-bankruptcy loan.

Forson claims Nationstar ignored his request for several months and never told him what his monthly payments would be. He contacted the trustee who managed his finances during bankruptcy and made several monthly payments for the amount he advised. According to the lawsuit, Nationstar accepted all of these payments.

After three months and two more written requests, Forson finally received some of the information he requested. However, the information he received made no mention of his total loan balance or any recent account activity. When Forson called to inquire about this, Nationstar responded by telling him to fax written his request. He obliged, but claims Nationstar never responded.

Forson eventually found a way to access his mortgage through Nationstar’s website. He was shocked to find the site allegedly stated he owed roughly $7,000 in delinquent payments and “Lender Paid Expenses.” Forson maintains Nationstar never adequately explained these charges to him, but spent the next eight months insisting his account was delinquent. Nationstar also allegedly refused to deem his mortgage current because it claimed he was delinquent on two payments. However, he made regular monthly payments every month both during and after bankruptcy, all of which were accepted.

Forson continued to make regular monthly payments until August 2014, when Nationstar rejected Forson’s payment. Forson called Nationstar about this, and it stated the amount was insufficient to cover the $8,100 he owed. Forson removed that money from his wife’s 401k in order to prevent what he felt was an imminent foreclosure. Despite their alleged claims that the $8,100 was required to bring his account current, Forson claims that Nationstar never updated his mortgage status. Forson made regular payments to Nationstar until the following March, when the company barred him access to the website.

Doucet & Associates believes that this is indicative of a broad pattern of incorrectly charging debtors for previously discharged debts, and has filed this class action lawsuit against Nationstar on behalf of Mr. Forson and those similarly situated. We estimate this case could be representative of at least thousands of individuals and encourage anyone who has gone through a similar experience with Nationstar or any other mortgage loan servicer to call us immediately at (614) 944-5219 if they live in Ohio or have been discharged from Chapter 13 bankruptcy.

 

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Loss Mitigation Options for Families Facing Foreclosure

Loss Mitigation Options for Families Facing Foreclosure

Federal law requires mortgage companies to offer loss mitigation options to homeowners who are facing foreclosure. Loss mitigation options include:

  • Loan Modification – The lender and borrower agree to extend the life of the loan for a reduction in interest.
  • Deed in Lieu – The borrower offers collateral in exchange for a release from the mortgage.
  • Pre-foreclosure Sale – The borrower sells the property and uses the money to pay off the mortgage.
  • Short Sale – The lender accepts a payoff less than the mortgage is worth. This only applies if the mortgage is more than the value of the property.
  • Cash for Keys Deal – The lender pays the family to leave in order to avoid the cost of eviction.
  • Forbearance – The lender accepts reduced or no payments for a short time in exchange for a later repayment.
  • Partial Claim – The lender advances the fees necessary to bring the mortgage current to the borrower under the condition that they are paid back at a later date.

 

Which options are available depend on the mortgage servicer and the circumstances surrounding the loss mitigation application. The mortgage servicer will be able to present you with information regarding loss mitigation and what is required to file an application. After submitting an application for loss mitigation:

  • Your servicer must respond to loss mitigation application in five business days with the application status:
    • Either complete or incomplete.
    • If incomplete, the servicer must state what is required to complete the application.
  • Your servicer must provide you with an evaluation or complete list of options within thirty business days of receiving the application.
  • If you are denied, you must be provided with an opportunity to appeal.

 

Once you submit a loss mitigation application, before responding to your request the mortgage servicer cannot:

  • File a foreclosure lawsuit.
  • Move forward with the sale of a property.

 

This is known as dual tracking and it is illegal. Doucet & Associates deals with banks and mortgage servicers on a regular basis. If you are having trouble getting a loan modification processed, or if you would like assistance in filing one calls us at (614)-944-5219.

 

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Firm Wins Major Appellate Decision

Firm Wins Major Appellate Decision

Doucet & Associates is happy to announce it won a major case in the federal court of appeals yesterday, paving the way for consumers to be able to hold their mortgage companies accountable for failing to adequately respond to mortgage inquiries.

The firm’s client, Christine Marais, faced years of trouble trying to get her mortgage company to correctly apply her mortgage payments when she sent in more than the amount due.After trying repeatedly to get Chase Home Finance to correctly apply her overpayments, she retained Doucet & Associates in an attempt to hold it accountable.The law firm sent a formal written request to Chase pursuant to the federal law, the Real Estate Settlement Procedures Act (“RESPA”), demanding that Chase provide certain account information and that it correct her mortgage account.

Rather than making any corrections to Ms. Marais’ account in response to the firm’s formal demand, Chase’s representative testified in a deposition that it used a form letter to respond to the inquiry, and that letter contained no indication that any substantive review was undertaken of her account.

Chase Home Finance filed a motion with the trial court to win the case based on its outrageous claim that Ms. Marais could not show she suffered damages.The federal appeals court disagreed with Chase, and found Ms. Marais had properly alleged damages, and that she stated a claim to recover for Chase’s failures.The case now goes back to the trial court for further litigation.

The decision, Marais v. Chase Home Finance, LLC was decided by the United States Court of Appeals for the Sixth Circuit and was recommended for publication as binding law throughout the federal court system encompassing Ohio, Michigan, Kentucky, and Tennessee.To the firm’s knowledge, this would be the first appellate level published case on this particular RESPA issue, meaning it will be persuasive authority throughout the United States.

 

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