Category Archives: Foreclosure

Attorney General Jepsen Announces Mortgage Review Assistance For Bank Of America Customers

One of the great legal problems of our time is the foreclosure crisis.  Wall Street changed the rules when it decided there was a fortune to be made betting against the American dream of owning a home.

Investors stood to make more money from homeowners defaulting on their mortgages than paying them. To make sure this happened investors flooded the mortgage market with cash to encourage riskier and riskier loans to be written.  The system was rigged to crash.

Check out the “Inside Job” podcast from This American Life.

Courts have been left to pick up the pieces.  Fortunately, Connecticut has an Attorney General who understands the practical difficulties of homeowners facing foreclosure – namely the process is confusing and speaking with the right representative from a bank can be impossible.

I was very pleased to find this press release in my inbox. If you are a Bank of America Customer facing foreclosure you need to read the following

MORTGAGE REVIEW ASSISTANCE AVAILABLE JAN. 19-21

FOR BANK OF AMERICA CUSTOMERS

For immediate release                                                                        TUESDAY JAN. 10, 2012

HARTFORD – Attorney General George Jepsen and state Banking Commissioner Howard F. Pitkin announced today that Bank of America is hosting free mortgage assistance reviews in Hartford and Bridgeport for customers who are having trouble paying their mortgage loans.

The free events are 8 a.m. to 8 p.m. Thursday Jan. 19 through Saturday Jan. 21, 2012 at both the Hartford Hilton, 315 Trumbull Street, Hartford and the Bridgeport-Trumbull-Fairfield Holiday Inn, 1070 Main Street, Bridgeport.  Free parking is available at both sites at the Church Street Garage in Hartford and Imperial Parking Garage in Bridgeport, which is adjacent to the hotel.

Bank of America mortgage customers who are experiencing financial hardship will have the opportunity to meet with home loan specialists, who can review their mortgage and discuss available options. Spanish-speaking translators will be available at both locations.

The events are free and registration is encouraged to help ensure customers receive same-day assistance. Registration can be made online at www.bankofamerica.com/homeowerevent, or by calling the toll-free number, 1-855-201-7426. The documents a customer will need to bring for a mortgage review are listed on the website.

Connecticut homeowners who are not Bank of America customers, but having difficulty making mortgage loan payments, should contact the state Department of Banking’s Foreclosure Assistance Hotline at 1-877-472-8313.  The Department assists homeowners who are attempting to achieve loan modifications and prevent foreclosure.  The Department’s website, www.ct.gov/dob, has valuable information about avoiding scams, applying for loan modifications, and navigating the foreclosure process.

Are CT Attorneys Trolling Foreclosure Records For Business?

Lawyers sell hope. In six years of practice (FTR, active practice of law at the bar of the State of CT), I have yet to have an initial consultation with a client who came to me because something awesome happened in his life.  I suspect that day will never come.

I’ve represented clients facing foreclosure. No one searches for hope more than a person about to be homeless.  The stress on a parent about to have no place for their child to sleep is unbearable.  Clients in this situation uniformly break down in tears talking to me.

Recently, I was speaking with a person facing foreclosure. The bank had just filed papers. She told me that within weeks of being served she started receiving mail from attorneys seeking to defend her in the foreclosure action.  A sign of the times, indeed.

A person facing foreclosure should see an attorney. Often a consult or representation can make a difference in the outcome of a case. Even if that outcome is simply more time to move.  The earlier a person facing foreclosure sees a client the better chance an attorney has to do something beneficial for the client.  Those are words written from my chair.

From my clients chair, her thoughts were “how does everyone know” and “I’m so embarrassed”.  Those letters made her feel worse about the situation.

She asked “how do they know?” To which my response was they either got the information from the land records or court records.

Arguably such solicitations are against the rules of professional ethics. Rule 7.3 covers “Personal Contact With Prospective Clients” and the relevant sections read as follows:

(b) A lawyer shall not contact, or send, a written or electronic communication to, a prospective client for the purpose of obtaining professional employment if…..

(1) The lawyer knows or reasonably should know that the physical, emotional or mental state of the person makes it unlikely that the person would exercise reasonable judgment in employing a lawyer…..

(3) The communication involves coercion, duress, fraud, overreaching, harassment, intimidation or undue influence….

The relevant commentary to the rule reads as follows:

[1] Unrestricted solicitation involves definite social harms. Among these are harassment, overreaching, provocation of nuisance litigation and schemes for systematic fabrication of claims, all of which were experienced prior to adoption of restrictions on solicitation.

[3] In determining whether a contact is permissible under Rule 7.3 (b), it is relevant to consider the time and circumstances under which the contact is initiated. For example, a person undergoing active medical treatment for traumatic injury is unlikely to be in an emotional state in which reasonable judgment about employing a lawyer can be exercised.

The rule references the “emotional state” of a prospective client. Few prospective clients are under more duress than those just served with foreclosure papers.

Unfortunately, I did not see the letter or letters sent to the person. She did not have them with her (hence the question mark in the title of this post). The other thing here is that there are all sorts of sketchy companies that promise modifications and representation. They’re happy to collect $3500 fees and do nothing. I have no idea of these companies claim to be law firms or not. I also have no idea how widespread the practice is.

If you’ve received such letters, I’d love to read them. Please send them my way: rmckeen at lttnlaw.com .

What To Do If You Are Facing Foreclosure In Connecticut

For many people, getting behind on a mortgage adds a tremendous amount of stress to their lives.

At one point or another, most people enter a stage of denial. They stop answering the phones or opening the mail. The fear of losing one’s home becomes so overwhelming that the only way many homeowners can deal with it is to ignore it entirely. This is very dangerous.

As a lawyer who has represented homeowners facing foreclosure, the earlier someone meets with me – the more I can do for a person. If a person waits until they receive an ejectment notice to see me – my ability to meaningfully help the person is severely limited.

My very simple advice is to save yourself a lot of stress, spinning your wheels, and perhaps money and see a lawyer when you first fall behind on your mortgage.  What do I mean by spinning one’s wheels? Unfortunately there are a lot of companies offering to help homeowners behind on their mortgages. They promise things like forensic audits. If someone is promising you something too good to be true – it probably is. These companies often ask for money up front.

A reputable lawyer should be able to advise you of your rights and options, refer you to other reputable professionals who may be able to assist you, and protect your rights in court.

You may be thinking “wow, a lawyer’s advice is to see a lawyer!” To which my response is “absolutely”.

There are options for homeowners facing foreclosure. The earlier you start addressing the problem the more options there are available to you.

Jepsen Takes Strong Stance On Bank Of America’s Handling Of Foreclosure Mediation.

Note: Having represented a homeowner trying to deal with Bank of America this is great news. Dealing with them was impossible. The stress the process caused my client was horrific and avoidable. Go George.

Press Release

HARTFORD –Attorney General George Jepsen said Wednesday that Bank of America Corp. needs to devote more resources to help Connecticut borrowers having trouble paying their mortgages or seeking loan modifications.

“I express these concerns on behalf of the thousands of distressed Connecticut borrowers who continue to experience significant difficulties due to Bank of America’s failure to devote adequate resources to loss mitigation,” Jepsen wrote to Brian T. Moynihan, president and chief executive officer of Bank of America. “Bank of America can and should do more.”

“Given that Bank of America is apparently poised to lift its moratorium on Connecticut foreclosures, I do not see that it has any credible plan to deal with the inevitable increase in … requests”  from borrowers seeking loan modifications, Jepsen wrote. The letter followed a recent meeting with bank representatives.

The Office of the Attorney General, the state Department of Banking and the non-profit Connecticut Fair Housing Center continue to receive “numerous complaints” from consumers whose loans are serviced by the bank, Jepsen said. Those complaints include: the bank losing documents repeatedly; lack of communication; conflicting and contradictory instructions from bank employees; receiving foreclosure notices at the same time the borrower is under consideration for a loan modification; failure to honor a loan modification the bank has already agreed to, and lack of any single employee who is familiar with a customer’s file.

“Despite having had  more than two years to ‘right-size’ your staff and establish effective procedures and systems, Bank of American has so far not prevented even the most common consumer complaints,” Jepsen wrote.

Jepsen said he was told the bank plans to establish 40 new customer assistance centers nationwide, including one in Dedham, Mass. to serve New England.  Establishing one center staffed by a dozen people to cover all of New England is simply not enough, Jepsen wrote.  Bank of America is the largest bank in New England.

Nor is it enough for the bank to change its customer service policies, Jepsen said. Bank of America needs to bolster its resources “so that distressed Connecticut borrowers receive fair and honest treatment,” he wrote.

Jepsen is a member of the Executive Committee of the National Association of Attorneys General multistate task force which is seeking to hold major loan servicers, including Bank of America, accountable for the unfair and deceptive default servicing practices they have engaged in across the country.

Joan’s House Has Been Saved!

Some stories reaffirm my faith in humanity. This is one of them.

Two weeks ago, I wrote about a neighbor who was about to lose her home. Once her friends found out about this, they created a website seeking donations. Through charity of Joan’s friends, neighbors, and strangers – enough money was raised to bring Joan current on her mortgage.

Flowers will continue to bloom in front of a house that a month ago was almost certainly heading into foreclosure. It’s one less case on the docket and one more family with a place to live.

Save Joan’s House

Joan’s house sits at the bottom of a big hill. It’s a hill that I’ve ran up and down – hundreds of times.

Joan's House. Save it.

Sometimes, I see Joan. She may be sitting on her porch or gardening. We usually wave and say “hi” to each other.  I continue up the hill. She goes on with her life.

Throughout most of human history, we knew our neighbors well. In today’s walled and disconnected world it’s possible never to meet the people living close to us – let alone get to know them.  People could and did help their neighbors.

On the flipside we have tools like Facebook. Where we can keep in touch with lots of people who we either rarely or ever see.

These worlds collided late last week. Bill Childs, Associate Dean at Western New England School of Law and a fellow alumni board member – posted a link urging his friends to “save Joan’s house. Bill’s a good guy so I clicked on the link. The person who needed help, was Joan, my neighbor.

A few hours later, the Dean of the Hartford Blogosphere, Helder Mira posted the same link on Facebook. Joan has good friends.

It turns out that Joan was out of work for more than a year and fell behind on her mortgage. She has a job now, however, needs help in making up the $6,000 deficit.

Click here to read more about Joan and her situation. If you enjoy this site, and Joan’s cause worthy (which I trust you will), please give something to help her out. Any amount would be greatly appreciated. I’ve got miles to run. I hope to be waving to Joan for year’s to come. I ask you to help my neighbor.

Is It Malpractice To Fail To Challenge Documents In A Foreclosure?

After watching this powerful 60 minutes piece, I think the answer is “yes”.  The bottom line is if you are facing foreclosure don’t put your head in the sand – seek counsel from a lawyer.

The problem with mortgage documents is so bad that the head of the FDIC is proposing the creation of billion dollar insurance fund to deal with the fiasco. Forged and illegal documents are such a problem that they pose a significant threat to the broader economy.

If you’re at all involved in real estate litigation or foreclosure click here to watch an excellent 60 minutes piece.

The 60 minutes piece linked to above is shocking. People need to go to jail for this. I’m not sure that if I represented banks in foreclosure proceedings (which I don’t – I defend person’s facing foreclosure and do committee work on foreclosure sales) that I’d feel comfortable bringing actions anymore.

Patrick Rodgers, The Man Who Foreclosed On A Bank, Is A Legal Superhero

“Disgruntled homeowner forecloses on bank” is a headline worthy of the Onion.

When a Philadelphia man became fed up with his bank for failing to respond to his mortgage questions, he took them to court and won. In a twist that will warm the hearts of millions with underwater loans, he moved to foreclose on Wells Fargo’s local office. ABC News.

Continue reading

Signs of Foreclosure In Connecticut

Connecticut has a foreclosure problem.  Things are bad and getting worse.

The symbol of foreclosure is the lawn sign. The sign publicizes the date of the sale, the committee, and the amount of a deposit check required to be registered to bid.

Why don’t you see more foreclosure signs in Connecticut?

The answer is that Connecticut has two methods of foreclosure: strict foreclosure and foreclosure by sale.

In a strict foreclosure, a judge sets a date by which the homeowner must redeem the mortgage or title vests with the bank. There is no sale in a strict foreclosure action and hence no sign on the front lawn.

A foreclosure by sale happens when a homeowner has equity in the property. I’ve heard judges say that they look for about 20% equity in the property before they will order a foreclosure by sale. The reason being that a foreclosure by sale costs money which ultimately comes from the equity in the property.

Many of the homes presently in foreclosure financed nearly 100% of the value of the property. Property values have decreased in recent years which often results in the amount owed on the note being greater than the value of the house. This results in more homes going into “strict foreclosure.”

The other thing is that people are walking away from their homes.  Sometimes, homeowners for a variety of reasons will deed the property back to the bank to avoid the foreclosure process.

That’s why despite the rising number of foreclosures you don’t see as many ads in the paper or signs on front lawns as you may otherwise expect.