Posted on May 06, 2012 in Foreclosure

Attorneys General from over ten states including Illinois have penned a letter to theFederal Housing Finance Agency to encourage loan giants Freddie Mac and Fannie Mae to reduce loan principals for homeowners who are struggling to avoid foreclosure on their homes.

The letter states that by using principle forgiveness, the cost to investors and banks would be minimal. Despite a statement in January by Federal Housing Finance Agency head Edward DeMarco that principal forgiveness would result in a burden to tax payers, the coalition of Attorneys General argue that forgiveness could result in savings of almost $1.7 billion.

As Freddie Mac and Fannie Mae own the majority of home loans in the United States, the letter urges them to act as a leader in principal forgiveness, rather than a hindrance in restarting the economy.

The attorneys further argue in the letter that increasing incentive payments to investors under the Home Affordable Modification Program (HAMP) would help ally concerns that forgiveness would negatively impact Freddie Mac and Fannie Mae. While many lenders have complained that participating in in forgiveness would involve costly changes to existing computer programs, the recent Foreclosure Settlement proves that lenders are capable of handling any resulting changes in their existing programs and procedures when dealing with home mortgages.

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 Posted on May 04, 2012 in Foreclosure

If you have been served with foreclosure documents, attached to the complaint is a document called a note. Also included may be various other documents and affidavits executed by banks. These documents, which claim to be executed by banks, must bear a signature from an authorized employee at that bank.

We have recently found that Margaret Dalton has executed different documents on behalf of at least ten different lenders, usually in her capacity as Vice President. This means that some of these documents may not be valid.

Please look over your foreclosure documents. If any of them were allegedly executed by Ms. Dalton, please contact an attorney.

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 Posted on April 21, 2012 in Foreclosure

A recent report from RealtyTrac indicates that March foreclosure filings in the Chicago metropolitan area rose by 18.5% from March, 2011, and by 1.8% from February, 2012. There were a total of 12,818 foreclosure filings in March, which is equal to one in every 296 homes.

Unfortunately, the foreclosure rate in the Chicago area and in Illinois as a whole was higher than the rest of the nation. In the first quarter of 2012, Illinois had the third highest foreclosure total in the United States, while the number of homes with new foreclosure filings nationwide actually dropped over last year.

Another recently released report shows that new foreclosure filings in the Chicago metropolitan area were based on a growing number of conventional mortgages, as opposed to government-backed fixed rate loans and adjustable rate or balloon mortgages. Additionally, almost 25% of new foreclosure filings concerned loans that originated before 2005. This information reveals that while homeowners have managed to maintain their monthly mortgage payments for six years or more, the deepening economic crisis has finally forced them into foreclosure. Moreover, even homeowners who took on conventional mortgages, as opposed to riskier adjustable rate mortgages, have fallen prey to the nation's wave of foreclosures in recent years.

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 Posted on March 30, 2012 in Foreclosure

In Illinois, if a homeowner misses a mortgage payment, their loan then goes into default. Although just one missed payment violates the mortgage contract. most lenders won't start foreclosure proceedings until a borrower is at least three payments behind. However, a Chicago foreclosure doesn't mean that the homeowner must immediately move out. In Illinois, the borrower is considered the lawful occupant of the property and is allowed to live in the property until a judgment of possession is entered, which takes a minimum of 9 months.

Illinois' Homeowner's Rights Act, requires that lenders take certain steps before filing for foreclosure proceedings. When a homeowner is at least 30 days behind on a mortgage payment, the lender must notify them that they have 30 days to seek assistance. Obtaining that assistance allows the borrower another 30 days to work out a payment plan.

If the borrower fails to do either of these things, the lender may begin foreclosure proceedings. The lender will send the borrower notification of its intention to foreclose and then file a lawsuit, detailing the reasons for the foreclosure request.

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 Posted on March 16, 2012 in Foreclosure

As it is now mid-march, it is time for the Final Four…affirmative defenses that can be raised in a Mortgage Foreclosure Defense

1. Unclean hands: Foreclosure actions in Illinois are filed with the Chancery Division of the Court in the County in which the property is located. In order to initiate a legal action in the Chancery, the parties must “be before the court with clean hands.” This essentially means that the lender cannot have engaged in any actions that have contributed to the borrower being in default.

2. Standing: a party must have standing for the Courts in Illinois to have jurisdiction over a matter involving that party. All indispensable parties must be included in the action and the Plaintiff must be in possession of the debt. If a party lacks standing, it cannot being a law suit in the Illinois courts.

3. Fraud: lenders have been known to commit fraud, in fact, in some cases homeowners have been induced to sign loan documents because of lender fraud. There are several different elements that must be examined to determine if the lender engaged in fraudulent actions. Two examples: a) was the appraisal over-inflated? b) were any fiduciary obligations violated?

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 Posted on February 27, 2012 in Foreclosure

Here are three more affirmative defense that may arise out of violation of the Unfair and Deceptive Trade Practices Act:

1. If your lender did not provide you with statements of the escrow account associated with your loan transaction, then an affirmative defense may exist.

2. If your lender failed to pay property taxes or insurance premiums for the subject property, there may be an affirmative defense.

3. The third is sort of a catchall catergory for actions or behavior that does not fit into the other affirmative defenses under the Unfair and Deceptive Trade Practices Act. If the actions of the lender were misleading or deceiving to the consumer in a way that could be construed as unfair or deceptive, there may be an affirmative defense.

If you believe that your lender has engaged in the above, please contact an attorney (especially for the third defense listed above).

(e) Otherwise misleading or deceiving the consumer in a way in which the practice can be construed as unfair or deceptive.

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 Posted on February 18, 2012 in Foreclosure

The third Act that can give rise to affirmative defenses in a mortgage foreclosure is the Unfair and Deceptive Trade Practices Act. Courts can hold lenders accountable under the Unfair and Deceptive Trade Practices Act and can also be made to pay punitive damages and attorneys' fees.

Some examples of violations include:

1. If the lender obtained a yield spread premium (YSP) that was excessive or not properly disclosed.

2. If the lender charged excessive fees or required the payment of fees to parties not entitled to receive any fees.

As always, please contact an attorney if you believe one of the above may apply to your mortgage or loan situation.

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 Posted on February 15, 2012 in Foreclosure

Here are two (2) more affirmative defenses that come from violations of the Real Estate Settlement & Procedures Act, or RESPA for short:

1. If a lender accepted fees, kickbacks or other items of value in exchange for settlement services and or split fees and received unearned fees for services that the lender did not actually perform, there may be an affirmative defense for a RESPA violation.

2. If the lender did not provide annual escrow disclosure statements for each year of the mortgage since its inception, an affirmative defense may exist for a RESPA violation.

Please contact an attorney if you believe your lender engaged in the above actions.

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 Posted on February 10, 2012 in Foreclosure

The Real Estate Settlement & Procedures Act, or RESPA for short, is another possible source of affirmative defenses. RESPA is part of the U.S. Code and can be found at 12 U.S.C. Section 2601.

To begin:

1. An affirmative defense exists if a lender, at the time of the loan closing, charged a fee for the preparation of the truth in lending uniform settlement and escrow account statements.

2. An affirmative defense may also exist if the lender, at the time of the loan or within three (3) days after, failed to provide a special information booklet about the loan, a mortgage servicing and disclosure statement or a good faith estimate of settlement and closing costs to the defendant.

If you believe that one of the above may apply to your loan situation please contact an attorney. More RESPA defenses to follow.

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 Posted on January 23, 2012 in Foreclosure

There are several affirmative defense that can be raised against a foreclosure action. One such affirmative defense that can be raised is for a violation of the Truth in Lending Act or TILA. The Truth in Lending Act is part of the United States Code: 15 U.S.C. Section 1601 et seq. as well as Regulation Z of 226 etseq.

Three of the numerous possible affirmative defenses for violations of TILA are:

1. The amount financed by the lender needs to be clearly stated and itemized in a real estate closing. Further, for consumer residential closings, banks are required to follow TILA when a consumer credit transaction involves a lien or security interest being placed in a principal dwelling or primary residence. If these requirements are not followed, the homeowner may be entitled to rescind the transaction.

2. There is an affirmative defense based on TILA if the lender fails to clearly and accurately state and disclose the number, amounts and timing of the payments scheduled to repay the loan or obligation.

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