We (borrowers) had a problem with the the servicing of our loan (lender "never
received payment" of a cashier's check). We wrote letters (Qualified Written
Requests under RESPA, Section 6). Lender never responded to written correspondence
from borrowers. Eventually, lender called borrowers and verbally informed them
of a default on the mortgage loan, and threatened foreclosure if all money (including
unwarranted attorney's fees) wasn't immediately paid.
Borrower read loan agreement, which provided for a Notice of Default with a 20-day
Right to Cure to be sent via Certified Mail (with signature confirmation) at least
20 days before accelerating the loan. Borrowers paid the amount needed to cure
the alleged default, except for the illegal attorney's fees. AFTER the alleged
default was cured, lender, in complete disregard of the loan agreement, sent the
loan to foreclosure, demanding sale by the Public Trustee to recover the amount
due.
Simultaneously, lender placed a nearly $50,000 charge-off on borrowers' credit
reports, where it remained on at least one credit report for the next 10 months.
Borrowers' other creditors cancelled their credit cards and put them on default
interest rates. Borrowers couldn't mitigate their damages alone, and wrote to
lender imploring help (remove charge off on credit reports, etc) for the next
15 months. Borrowers also filed complaints with the Colorado Attorney General
and the Department of HUD. Lender fraudulently misrepresented material facts
to both agencies, and based on those misrepresentations, the agencies closed
the file on the borrowers' complaints.
Eventually, borrowers were forced into chapter 7 bankruptcy, as they just could
not recover from the financial damage brought upon them by the illegal foreclosure
proceedings and the credit report damage. Borrowers exempted their home in the
bankruptcy, and are still living there. Borrowers had not heard from the lender,
though the lender still holds a $50,000 lien on their home. Lender has actively
been concealing borrowers' account since spring 2004.
Last fall, borrowers petitioned the bankruptcy court to abandon the asset of
the claim against the lender. (Borrowers unknowingly forfeited their rights
to the claim against lender by filing bankruptcy.) Simultaneously, borrowers
filed a civil case in the federal court against the lender. Because borrowers
have no money for an attorney, and make too much money to qualify for legal
aid, borrowers have had to represent themselves, appearing pro se, in their
court action.
This is definitely a modern day tale of David and Goliath. The mortgage company
is one of the giants in the lending world...and the borrowers are just a middle
class family trying to make ends meet.
Other borrowers need to be aware of the tactics these big companies use to
put them in default. A "missing payment" translates to 30 days delinquent.
If you plan on writing letters citing your RESPA rights, make sure you have
documentation of when your letter is received by the lender. That is when the
20 day and 60 day time period begins for the lender to acknowledge and resolve
your complaint, respectively.
But, be aware of this: lenders will claim that they have "no receipt of
said letters of dispute", even when you can prove that they were signed
for. It's good to keep all your papers together, because you
may be sending them to government agencies, and/or using them in court. Keep
your originals in a safe place.
Next, READ AND BECOME FAMILIAR WITH YOUR LOAN AGREEMENT. You need to know what
your contract says, so that you'll know if the lender is violating it.
Write to your state's
Attorney General (especially if you live in Colorado) if you feel that your
lender has unfairly put your loan into default and/or foreclosure. Colorado
has the highest foreclosure rate in the country. It doesn't help that a huge
lender pays no attention to the written contract, thus breaching it, and causing
irreparable consequential damages.
Lastly, DON'T BE EMBARRASSED TO TALK ABOUT IT. We had a 19
year favorable joint credit history utterly destroyed because we didn't want
to tell anyone what was happening to us. Even still, we don't want to use our
names...though we may soon need to tell our story publicly, in an effort to
call attention to the wrongful acts of these predatory lenders.
Signed,
Pro Se in Colorado
