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Read the Businessweek article about the lapsed VA program that put thousands of veterans at risk of losing their homes

In the News

November 24, 2023 By Marc Dann

US Veterans Got a Mortgage Break. Now They’re Losing Their Homes

A Covid-era program gave borrowers a year without mortgage payments. Some are finding their lenders would rather foreclose than let them pick up where they left off.

By Caleb Melby, Polly Mosendz, and Ann Choi

November 9, 2023 at 12:01 AM EST

Sharelle Rosado didn’t give a lot of thought to the legal solicitations piling up at her front door earlier this year. She’d recently gotten a speeding ticket and figured lawyers were offering their services. It wasn’t until she began opening the letters that she realized the mail was much more serious: Her house was in foreclosure.

Rosado is savvy about homeownership. She’s a licensed real estate agent and the one-time star of the Netflix show Selling Tampa, which tracked the staff of her all-female, all-Black brokerage. Her clients count on her expertise. Yet she was bewildered that her lender was moving to take her four-bedroom house outside Tampa.

It turned out to have everything to do with a Covid-era mortgage program that allowed borrowers with federally backed loans to postpone payments for a year or longer and then, at the end of this forbearance period, apply to pay the arrears over time. About 8.5 million homeowners availed themselves of the program, including about 445,000 military veterans such as Rosado, a former Army paratrooper whose loan was backed by the US Department of Veterans Affairs.

In March 2022, after her 12-month forbearance ended, Rosado filled out what’s known as a loss-mitigation application—essentially a report on her financial status, used to determine her eligibility for a repayment plan—and sent it to her lender, United Wholesale Mortgage. UWM approved her application and sent her a loan-modification agreement, under which she would resume her monthly payments and the payments she’d skipped would be due when the mortgage was paid off.

Rosado and her home outside Tampa. Photographer: Mike Adno for Bloomberg Businessweek

There was one problem: Rosado was recently divorced, and UWM wanted her ex-husband to sign the document, too. She and UWM came to an agreement, she says, that her ex didn’t need to co-sign the modification if he would instead sign a quitclaim deed, a document confirming he no longer had an ownership stake in the house. After some delay, he signed, and in August of that year, Rosado sent her signed agreement along with the quitclaim. The next month her mortgage payment of $1,282.77 was posted to her account, which she took as proof that the matter had been resolved. Not so: She was told there were still paperwork problems with her modification. She says she sent the quitclaim again.

Rosado says she had no idea the company intended to seize her home until the legal solicitations arrived on her doorstep in March. After a final failed attempt to get her loan modification approved, she faced two unappealing choices: immediately pay more than $45,000 in arrears and fees or lose her house. “I was pissed,” Rosado says. “This is embarrassing. I’m not about to lose my house.” She paid.

In a written statement, a UWM spokeswoman said the company “works hard to assist borrowers, even distressed borrowers, in servicing their loans,” but that Rosado’s account was incomplete. She said the signed agreement Rosado sent in August 2022 was an old version, and under the VA’s requirements she needed to submit a divorce decree in addition to the quitclaim. The company said it had “attempted telephone contact” with her 35 times last year and 43 times this year. Rosado says that UWM didn’t ask her for a divorce decree prior to foreclosing and that she didn’t receive any voicemails saying her file was incomplete.

At first, it looked as if the entire episode was an expensive fluke. But Rosado began hearing from friends she’d met while serving at Fort Bragg (now Fort Liberty) in North Carolina who were having their own troubles getting their loans modified. They had some things in common, including signs of financial vulnerability, such as disability, unemployment or divorce. The lenders had things in common, too: Most were nonbank companies, which issued more than 80% of the 746,000 VA loans written last year. Over the past decade, as traditional banks have retreated from the $12 trillion US mortgage market, these lenders, which mostly operate online and outside the scrutiny of bank regulators, have stepped into the void.

The mortgage forbearance program was a feature of the 2020 Coronavirus Aid, Relief and Economic Security Act, known as the Cares Act. It covered a large majority of the mortgages in the US, because most mortgages are backed by federal programs. Loan-modification agreements typically offered one of two options: The arrears would be added to the mortgage, extending the repayment period while keeping the monthly cost affordable; or, as in Rosado’s case, the arrears would be lumped into a balloon payment due when the mortgage was paid off. But the government didn’t require lenders and servicers (companies that buy and manage loans) to approve those agreements. Or to make the process straightforward and easy.

Across the US, about 4,000 veterans whose mortgages had been in the forbearance program had lost their homes as of mid-October, according to ICE Mortgage Technology Inc. Some 6,000 more are in foreclosure; 34,000 others are marked delinquent. Not all the foreclosure actions were the result of loan-modification denials. But the figures don’t include thousands of borrowers, like Rosado, who paid a lump sum, sometimes under duress.

The problem isn’t limited to veterans. Other homeowners who took part in the forbearance program have faced similar difficulties. About a half-million of them are delinquent or facing foreclosure, and an additional 87,000 have lost their homes. But the actions against veterans are notable given the lengths policymakers and regulators have gone to get them into homes and keep them there.

“If I didn’t have that money, I’d be with some of those other people, losing everything”

The Cares Act, a $2.2 trillion economic stimulus bill, was rolled out within weeks of the pandemic’s onset. The mortgage forbearance element in the act was broad and homeowner-friendly: Borrowers didn’t have to prove they were hard up, and mortgage companies couldn’t say no. So lenders and servicers lost a huge chunk of their primary revenue stream, and the legislation contained no bailout for them. Many were unhappy. “It’s frankly frustrating and ridiculous that we do not have a solution in place,” Jay Bray, chief executive officer of the lender Mr. Cooper Group Inc., formerly Nationstar Mortgage, told CNBC in April 2020. “There is going to be complete chaos.” His company had a strong balance sheet, Bray said, but others in the industry would “start seeing problems soon.” (Instead, interest rates fell, millions of people refinanced their mortgages, and lenders made a lot of money.)

As borrowers began to exit forbearance, in early 2021, the mortgage companies needed to help them craft repayment plans, which involved more people, more paperwork and more cost. The rollout of those plans was rocky at best. Some borrowers encountered insurmountable roadblocks, with their homes on the line. Conventional wisdom has long held that lenders prefer what are called workouts, such as loan modifications, rather than foreclosing on homeowners, which can be time-consuming and expensive. But home prices were skyrocketing, the product of a Covid-inspired desire for more space, historically low interest rates and a flood of government money. “Right now, because of the property values, they don’t mind foreclosing,” Safora Nowrouzi, a lawyer in California who handles foreclosure cases, says of lenders. “And that’s why denials are much higher.”

Borrowers, lawyers and advocates describe a rudimentary playbook: requests for documents that have already been submitted, assurances that an application is complete only for it suddenly to be reopened, envelopes that don’t contain promised documents, loans transferred to different lenders and other paper-shuffling moves that force borrowers into delinquency, increase the size of their arrears and narrow their options. Borrowers are “lulled into inaction, because they’re led to believe that the lender is working something out,” Nowrouzi says.

The Consumer Financial Protection Bureau, which monitors lending practices, says it’s unable to track how many loss-mitigation and loan-modification applications go awry, or how many are denied. But complaints from service members prompted the agency and the US Department of Justice to issue a warning in December 2021 to lenders and mortgage servicers citing borrowers who had “suffered negative impacts.” The letter described “incorrect or confusing communications” and mandatory lump sum payments as things that could run afoul of protections in the Cares Act. Borrowers with government-backed loans, the warning letter said, “generally cannot be required to repay their forbearance amount in a lump sum payment if they indicate that they cannot afford to do so when exiting forbearance.”

The letter doesn’t appear to have had the desired effect. In a report that covered transactions through March 2023, the agency again made clear that something was amiss. It said it had identified lenders that delayed homeowners’ applications and that “borrowers could not reasonably avoid injury because servicers controlled the processing of applications, and borrowers reasonably expected servicers to enroll them in the options they applied for.” The report didn’t identify any lenders by name, and no enforcement actions were taken. But the agency said the unnamed companies had “ceased the practice and developed improved policies and procedures.”

That hasn’t been the experience of veterans and advocates who spoke to Bloomberg Businessweek. “Instead of bringing attention to the damage inflicted, it conceals it,” Roberto Rivera, a consultant in New Jersey who works with attorneys whose clients are going through the loan-modification process, says of the agency’s reports. A spokesperson for the CFPB says it doesn’t make supervisory interactions with companies public.

Even after everything, Rosado considers herself lucky. Her circumstances had changed since she bought her home in 2020—the Netflix show plus a recent engagement to former Cincinnati Bengals wide receiver Chad “Ochocinco” Johnson—and she could afford the one-time payment. “If I didn’t have that money, I’d be with some of those other people, losing everything,” she says.

One of those other people is Monica Rosario, a retired Army captain. When it came time to modify the loan on her three-bedroom townhouse in Fayetteville, North Carolina, she was going through a divorce and between jobs. The divorce proceedings put her taxes in disarray, so Rosario, a colon cancer survivor, sent bank statements to her lender, Freedom Mortgage Corp., showing that she was still receiving disability benefits from the Army and was able to make monthly payments. She says the documentation never seemed to stay in her file. Freedom denied her loan-modification application and told her earlier this year that she had to pay $15,000 or lose her home, she says. She didn’t have that much money on hand and forfeited the house in a short sale in July.

Her home was listed for sale at 53% more than the price she paid. Rosario, who now rents across town, says she’s so wracked with depression that she’ll go days without stepping outside. “I still don’t understand how I was expected to pay that money so suddenly and continue on with my life,” she says. “It doesn’t make any sense.” A spokesperson for Freedom, one of the largest originators of VA loans last year, declined to comment.

“The risk of being sued and the risk of being dinged by the CFPB is baked into their business model”

Someone who last bought a home a decade ago would scarcely recognize the mortgage market today. The changes began with the 2008 global financial crisis, which was triggered by risky mortgage lending practices. In the aftermath, down payments once again became standard for most conventional mortgages, variable-interest-rate loans fell out of favor with both lenders and borrowers and income-verification standards were tightened.

Those reforms also made the business of writing mortgages less profitable for banks, which at the time underwrote the majority of home loans. Borrowers with higher credit scores and larger down payments can still count on bank loans; they’re desirable customers who, in addition to being unlikely to default, can be sold on more lucrative services, such as wealth management. For other clients, a new generation of companies sprouted up. Nonbanks, sometimes called shadow banks, don’t take deposits and are subject to much less regulation. They figured out they could make a profit lending to not-quite-prime homebuyers. Of course, the nonbanks need money to run their businesses. They often get it in the form of credit lines from many of the same banks that pulled back from the messy business of underwriting.

Last year, nonbanks accounted for 60% of all US home loans. The two biggest, Rocket Cos. and United Wholesale Mortgage, originated more than $255 billion of mortgage debt—more than Wells Fargo, JPMorgan Chase and US Bancorp, the top three bank lenders in 2022, combined.

John Bell, who manages the VA’s home-loan program, praises the role nonbank lenders have played in the VA mortgage business. “Thank goodness we had some of these nonbanks that raised their hand and were wanting to get into the business when banks backed out,” he says.

Many mortgage companies love VA loans. They’re backed by the government, the VA doesn’t set minimum credit score requirements, and down payments often aren’t necessary. Even closing costs can be borrowed, sending loan-to-value ratios as high as 103.3%. The result: VA borrowers often begin homeownership owing more than their home is worth, creating a long earnings runway for lenders.

Nonetheless, veterans who’d been waved through when they applied for their mortgage found their lenders weren’t going to make things easy when it came time to modify their agreements. Lawyers and housing advocates say that, depending on the state, trying to beat lenders in a he-said, she-said battle over who dropped the ball in a loan modification can be almost impossible. Those who succeed say borrowers must rigorously document their cases if they have any hope of winning. And there’s a growing sense that federal agencies, far from preventing abuses, may be making things worse with complex rules that befuddle lenders as well as borrowers. “The misinformation they’re giving on those phone calls is so sickening,” says Rivera, the consultant, of calls that customers have with their lenders. “There’s nobody there who has read the guidelines. It’s absurd.”

Absurd could describe Rosie Bennett’s situation. She got forbearance for the mortgage on her home in Coeur d’Alene, Idaho, in July 2020, the month before the death of her husband, who served as a Navy medic in the 1950s. The reprieve gave Bennett, who’s 79 and has multiple sclerosis, time to settle her affairs.

In January 2022 her mortgage servicer, Dovenmuehle Mortgage Inc., mailed her an envelope that she expected to contain her loan-modification agreement. But the envelope was empty, according to a lawsuit she filed against Dovenmuehle in federal court in Idaho. Bennett says she contacted the company several times to ask for the agreement and was told it would be sent. She continued making monthly payments, but the paperwork never came. In May 2022 the company sent a notice saying Bennett would be foreclosed on if she didn’t pay $33,529 within a month.

Rosie Bennett and her Coeur d’Alene home. Photographer: Amy Osborne for Bloomberg Businessweek

Dovenmuehle started foreclosure proceedings in June. In October the company transferred Bennett’s loan to PHH Mortgage Corp. She says she reached a modification agreement with PHH, only to have it rescinded this January. She was told she “needed to have her deceased husband execute and record” a document transferring his ownership in the house to her and was again threatened with foreclosure, according to the lawsuit, which also names PHH as a defendant.

Spokespeople for Dovenmuehle and PHH say they complied with all applicable laws and guidelines. The PHH spokesperson says, however, that the company no longer intends to foreclose. Bennett is pursuing her lawsuit anyway. The two-year saga has rattled her. “I’m just such a nervous wreck right now,” she says. “My whole body is just shaking all the time.”

One possible takeaway: Choose your lender carefully. But Bennett hadn’t contracted with Dovenmuehle or PHH. She and her husband had gotten their mortgage from Federal Savings Bank, based in New York. There are no rules preventing banks from selling mortgages or hiring nonbanks to service them. “This is the one consumer contract where you don’t get to pick who you do business with,” says Marc Dann, Bennett’s lawyer and a former Ohio attorney general, who now specializes in consumer lending cases. “She can’t say ‘Oh, I don’t like Dovenmuehle. I’m going to go down the street to Wells Fargo.’ She can’t do that.”

Settlements from cases such as Bennett’s tend to be small, and there’s little disincentive to avoid abusing borrowers, Dann says. “The risk of being sued and the risk of getting dinged by the CFPB is baked into their business model,” he says. “We could really use another 1,000 law firms doing the work that I do. At that point, maybe we would have an impact on the behavior of these companies.”

Lewis Rutherford’s maddening journey to a foreclosure notice began more than a year ago. A 63-year-old truck driver who played keyboards in bands at US Army bases across Europe in the 1980s, Rutherford hadn’t always paid his mortgage on time. After exiting forbearance, he thought he could avoid future problems by sending money in advance to his lender, Caliber Home Loans Inc. But when he sent $3,333 in August 2022 to cover three months of payments for his home in New Castle, Delaware, about $2,500 appeared to go missing.

Rutherford was irate and refused to make additional payments until the matter was resolved. In March, before he could get to the bottom of it, Caliber sold his loan to Shellpoint Mortgage Servicing. Rutherford says a Shellpoint representative told him the company had no record of his advance payments. With his money still missing, Rutherford insisted he wasn’t going to make any additional payments until the matter was straightened out. That’s a risky strategy for any borrower in a fight with a lender. In May, Shellpoint moved to foreclose.

What Rutherford didn’t know was that Caliber and Shellpoint were owned by the same company, Rithm Capital Corp. The paperwork Shellpoint said it couldn’t find existed within the same corporate family. As he fought to keep his home, “Rithm had one of its best quarters ever,” its CEO told investors in August. The company, which has been rolling up finance businesses for years, is now closing in on an acquisition of Sculptor Capital Management, a $33 billion hedge fund.

“Something ain’t right with these people,” Rutherford says. “If they see an opportunity to snatch a house, they will.”

He says that in June, after he told Shellpoint he’d spoken to Businessweek, the company said it didn’t need to foreclose on him after all. Court records show the company withdrew its foreclosure case a week later. A spokesman for Rithm’s mortgage division says the company made an error in how it applied Rutherford’s advance payments. “We have since corrected this error and are actively addressing any potential credit reporting impact caused by this issue,” the spokesman said. “In addition, we are ensuring that no other borrowers were negatively affected by this issue.”

In Charlotte, Makeda Young, a major in the National Guard who’s studying to be a physician assistant, took matters into her own hands. She says she paid more than $19,000 to clear her forbearance arrears after delays by her lender, Mr. Cooper, pushed her into default. Records show her application for a modification was accepted three times, followed by demands for documentation that Young says she’d already provided, ultimately leading to a foreclosure warning and her credit score dropping by 111 points.

Makeda Young and her Charlotte home. Photographer: Mike Adno for Bloomberg Businessweek

Not all borrowers are meticulous record keepers, but Young is. She compiled a dossier of all documents and emails and pulled her phone records to show how many hours she’d spent dealing with the company. In June she took her case to the consumer protection unit of the North Carolina Department of Justice, which contacted Mr. Cooper. In a letter, the company told the agency it had tried to reach Young on several occasions and that she hadn’t responded. But Young sent her phone logs to state officials in an email describing Mr. Cooper’s description of events as “misleading and inaccurate.”

It worked. In a new letter, Mr. Cooper described Young’s efforts to get her loan modified and erased its claims that she’d been delinquent, which restored her credit score. A spokeswoman for Mr. Cooper says Young’s application ultimately was denied after all documentation had been received. The company “is committed to finding solutions to keep our customers in their homes” the spokeswoman said.

“I’m going to make sure they investigate every single case,” Young says. She’s been documenting her efforts on Facebook. One post highlights the portions of Mr. Cooper’s letter that portrayed her as a nonresponsive customer and an amended letter showing she had in fact been in frequent contact with them. And there’s a tearful video after Mr. Cooper relented.

The replies show how common the problem has become. “Dealing with this RIGHT NOW!!!” wrote one borrower. “This just HAPPENED TO ME!!!!” posted another. “My folks in NC whom are Veterans are going thru the almost same scenario real time. Thank you Sista! ARMY STRONG!”

Filed Under: Attorneys, CFPB, Foreclosure, In the News, Mortgage Fraud, VA home loans Tagged With: Consumer Fraud, deceptive practices, Foreclosure Defense, Loan Modification, Marc Dann, Mortgage Fraud, VA home loans

September 26, 2023 By Marc Dann

Dann Law

The DannLaw legal team has been incredibly busy this summer. We have opened more than 100 new class action cases and Brian Flick, I and the members of our Class Action Litigation Practice Group have been appointed to leadership roles in a number of very significant cases including a mortgage discrimination case against Wells Fargo and actions seeking compensation for consumers impacted by data breaches that occurred at Snap Finance, Last Pass, Carrington Mortgage, Key Bank, Overby-Seawell, payday lender Advance America, Bet MGM, and others.

We also want to welcome two outstanding attorneys, Kurt Jones and Alisa Adams, to DannLaw. Their addition to our stellar lineup of legal talent will enable us to represent thousands of people involved in consumer arbitration cases. We invite anyone who is facing arbitration with a bank, credit card company, lender, or other entity to contact our office today. Kurty, Alissa, and our highly talented and experienced team ready, willing, and more than able to fight for you.  

We’ve moved and expanded! Our Columbus-area office has moved to 25 North Street in Dublin, Ohio. The phone number is 877-475-8100.  The new location features ample  parking and is more accessible access for our clients and DL attorneys from around the state. We have also opened an office in California at 26100 Towne Centre Drive, in Foothill Ranch. The phone number is 213-320-5706

Our offices in Cleveland, Cincinnati, New York and New Jersey have not moved and are located at:

  • Cleveland: 15000 Madison Avenue, Lakewood, OH. Phone: 216-373-0539 
  • Cincinnati: 220 Mill Street, Milford, OH. Phone:  513-951-7124
  • NJ/NY: 1520 US Highway 130, Suite 101 North Brunswick, NJ. Phone 201-355-3440

Firm Practice Area Update:

Loss Mitigation and Foreclosure Defense: 

We continue to assist homeowners who are transitioning from Covid-era mortgage Forbearance programs to permanent loan modifications that make mortgage payments more affordable. If you are currently attempting to negotiate a loan mod and need assistance, please contact us right away. Our knowledgeable and experienced Foreclosure Defense team, which includes Whitney Kaster, Andy Engel, Javier Merino, Karen Ortiz, Amanda Severt and Roberto Rivera, are here to help homeowners in Ohio, New Jersey, and New York. 

In Ohio and New Jersey, two states with extremely high foreclosure rates, our team is fighting hard every day to enable our clients to stay in their homes. If a foreclosure action has been filed against you or someone you know, please remember that involving us early substantially increases our prospects for success. So don’t delay, let us begin securing your financial future today.

We’ve also encountered instances in which mortgage servicers are slow-walking responses to or are refusing to accept money made available to homeowners under the federal government’s Covid-era “Save the Dream” program. If you applied for these funds and were rejected because of something your servicer did or did not do, please contact us right away so we can work to rectify the situation and help secure the funds you need and deserve. 

Litigation against Mortgage Servicers: 

Dan Solar, Mike Smith, Javier Merino, Saher Chaudhary, and Kimberly White from our Mortgage Litigation Team continue to bring groundbreaking individual and class action cases against mortgage loan servicers that mistreat, mislead, and abuse borrowers and homeowners. Contact DannLaw right away if you have encountered any of the following issues: 

  1. Mistakes in calculating escrow payments. We have sued servicers that failed to pay taxes for homeowners even though they have collected the funds needed to make the payments from homeowners, Paid taxes on the wrong property, or placed insurance on homeowners who were already insured. 
  2. Failure to properly apply payments or adding charges that are not warranted under the note.
  3. Failure to follow investor or government rules, failure to work diligently to resolve issues, or failure to properly process paperwork when evaluating loan modification applications. applications.
  4. Mistakes made by servicers in transitioning borrowers from Covid forbearance to performing loans. 

Consumer Class Actions:

Wells FargoBringing class action lawsuits on behalf of consumers and other parties damaged by corporations, banks, lenders, and other entities is the fastest growing part of our practice. If you believe a company, no matter how large or small, is systematically cheating you and other customers, please give us the opportunity to investigate and determine if class action claims exist. Our Class Action Practice Group which includes Javier Merino, Brian Flick, Andrew Wolf, Jeff Crossman, Saher Chaudhary, Marita Ramirez, Kim White and Liza Marigliano has filed significant cases against these and other companies:

  1. PHH Mortgage for charging “pay-to-play” fees
  2. Wells Fargo for discriminating against people of color seeking mortgages
  3. Failure to disclose itemize documentation fees in car sales contracts.
  4. Bank of America for opening fake accounts in customers’ names 
  5. Walmart for violating its own refund policy. 
  6. Dollar General for charging more at the register than the price indicated on the shelf 

Data Breach and Identity Theft: 

Far too many companies have failed to adequately protect their customers’ and/or employees’ confidential personal information. As a result, cyberthieves have been able to access and utilize victims’ social security numbers, medical records, bank account information, and other sensitive data at an alarming rate. 

DannLaw attorneys Brian Flick, Marita Ramirez, Javier Merino, and the other members of the firm’s data privacy team are leading the effort to hold companies accountable by bringing class actions cases that force them to compensate people whose data has been stolen and sold.   If you receive a notice that your information has been part of a data breach, please reach out to us right away so that we can take steps to protect you and your family. 

 

Consumer Arbitrations: 

While we are involved in dozens of large cases, DannLaw also specializes in helping individual consumers seek and secure justice and just compensation. Our Consumer Arbitration Practice Goup led by attorneys Alisa Adams and Kurt Jones and paralegals Madellyn Brown, Ivona Gates and Maureen Dial has developed an effective and efficient process for arbitrating consumer claims against companies whose contracts prevent customers from suing in court or bringing class action cases. If you or someone you know is involved in a dispute with companies like Paypal, Chime, Cash App, American Home Shield, Choice Home Warranty, and others that force consumers to resolve claims via arbitration, our experts are here to help.

And, remember this: we don’t get paid unless we win your arbitration case.

Significant Developments in Ongoing Cases

Unemployment PUA supplement case:  We are still waiting for the judge to rule on the Governor’s Motion to Dismiss.

Driver’s License Lamination Case: Is set for trial later this year and notices have been mailed to over 3,000,000 class members. 

Mill Creek Park Deer: We have filed a motion for a preliminary injunction to stop the scheduled hunt in the park.

Current Class Actions with Claim in Periods

If Nationstar Mortgage wrongly withdrew money from your account, we invite you to make a claim here: https://achloanpaymentlitigation.com/

Thanks for taking the time to read our most recent update and as always, DannLaw is here to serve you.

Filed Under: In the News

February 24, 2023 By Brian Flick

On February 21, the State filed its Combined Brief in Response to the Court’s January 30, 2023, Entry, Response to our Motion for Leave to File the Consolidated Class Action Complaint, and Motion to Dismiss the Consolidated Class Action Complaint. You may review it here: Bowling MTD FINAL (1)

The next step is the filing of our combined Brief in Response to the Court’s January 30, 2023, Entry, Reply in Support of our Motion for Leave, and Memorandum in Opposition to the Defendants’ Motion to Dismiss the First Consolidated Class Action Complaint. Our brief is due by March 21 and we look forward to sharing it with all of you.

We cannot thank each of you enough for all of thoughts, support, comments, and patience as we continue along with you on this journey. We will keep you updated once our brief is filed.

Filed Under: In the News, PUA case, Supplemental unemployment benefits Tagged With: Bowling v. DeWine, PUA case

December 21, 2022 By Marc Dann

DannLaw founder Marc DannWhile the $3.7 billion settlement between Wells Fargo and the Consumer Financial Protection Bureau is welcome news, it doesn’t resolve all the issues surrounding the bank’s bad behavior–a point made by CFPB Director Rohit Chopra who noted that Wells’ rinse-repeat cycle of violating the law has harmed millions of American families.” He also said the company is a serial offender that puts one third of American households at risk of harm and that finding permanent resolution to this bank’s pattern of unlawful behavior is a top priority.
As most of you know, holding Wells accountable is also a top priority for DannLaw. We successfully represented clients in a class action suit related to the same issues outlined in the CFPB order and we are currently pursuing cases in California and New Jersey.
In addition, we continue to recieve calls and emails from homeowners who are involved in home mortgage disputes with Wells. If Wells is your lender or servicer and you believe you are being abused by the bank please contact DannLaw today by calling Lisa at 216-250-4012, emailing intake@dannlaw.com, or visiting https://dannlaw.com/contact/ to schedule a no-cost consultation that will enable us to determine if you are entitled to financial compensation.
Under the terms of the agreement with the CFPB Wells will provide $2 billion in compensation to consumers for engaging in the following activities:
• Unlawfully repossessing vehicles and bungling borrower accounts: Wells Fargo had systematic failures in its servicing of automobile loans that resulted in $1.3 billion in harm across more than 11 million accounts.
• Improperly denying mortgage modifications: During at least a seven-year period, the bank improperly denied thousands of mortgage loan modifications, which in some cases led to Wells Fargo customers losing their homes to wrongful foreclosures.
• Illegally charging surprise overdraft fees: For years, Wells Fargo unfairly charged surprise overdraft fees – fees charged even though consumers had enough money in their account to cover the transaction at the time the bank authorized it.
• Unlawfully freezing consumer accounts and mispresenting fee waivers: Customers affected by these account freezes were unable to access any of their money in accounts at the bank for an average of at least two weeks.
The terms of the agreement require Wells to contact its victims. Eligible consumers don’t have to take any action.
We wish we could say we believe Wells will now clean up its act. But we don’t. We know the bank is taking advantage of homeowner and consumers every day. If you are one of them, please contact DannLaw today wo we can protect your rights, your family and fight for the compensation you deserve.
You can learn more about the settlement here: https://www.cnn.com/…/wells-fargo-cfpb…/index.html and here: https://www.consumerfinance.gov/…/cfpb-orders-wells…/

Filed Under: CFPB, Class Action Lawsuit, Consumer Fraud, In the News Tagged With: Consumer Fraud, deceptive practices, Marc Dann, Mortgage Fraud, Wells Fargo

November 4, 2022 By Marc Dann

DannLaw founder Marc DannAs the November 8 General Election approaches, I wanted to take a moment to share some thoughts and recommendations with DannLaw’s clients and the thousands of people who follow us on social media. I’m taking this unusual step because, as the events of the past year have clearly demonstrated, elections absolutely do have consequences for consumers, homeowners, and working families.

I know we live in a highly charged political environment. I’m basing these recommendations soley on the the importance of the office and the positive impact that I believe these candidates will make on consumers and consumer protection laws. It is not my intent to incite partisan bickering—you’ll notice there are both Republicans and Democrats on my list.

I’m planning on splitting my ticket this election and voting for the best candidate regardless of party. We simply must stop treating politics like a team sport. You can root for the Browns or Bengals even if you think they aren’t the best team. But in politics it’s time for everyone to stop putting party above country. I hope you’ll consider approaching Tuesday’s election the same way.

Our ongoing fight to restore federally funded supplemental unemployment insurance benefits desperately needed by tens of thousands of Ohioans heavily influenced my recommendations in statewide races. As most of you know, Governor Mike DeWine unilaterally, callously, and we believe illegally, cut off the payments in May of 2021. Attorney General David Yost has carried on the battle against us despite repeatedly losing in court and the outcome of the case will ultimately be determined by the Ohio Supreme Court.

DeWine, Yost, and three Supreme Court justices who were openly hostile to our arguments are on the ballot this year which gives you and every Ohioan the opportunity to send them a clear message about the way they have dealt with this and many other important issues.

At the federal level the Consumer Finance Protection Bureau (CFPB) which had become a toothless tiger under the previous administration, is once again protecting consumers and homeowners and other regulators are once again fighting fraud and abuse by big banks, credit card companies, and debt collectors, and judges who will interpret the law fairly are being appointed to the bench.

The contrast could not be clearer or the stakes higher. We need to vote for leaders who will fundamentally change Ohio while supporting the candidates who will continue the progress that is being made in D.C. I believe the following candidates will help us achieve those goals:

Brian Flick for 62nd District, Ohio House of Representatives

I would eagerly and enthusiastically endorse Brian even if he were not the managing partner of DannLaw’s Cincinnati office. He is a fierce and effective advocate for consumers, has helped hundreds of families save their homes from foreclosure, fought for people who have been victimized by debt collectors, banks, and payday lenders, and played an instrumental role in the unemployment benefit case.

I know Brian will be an outstanding state representative who will tirelessly advocate for women’s, human, civil, and worker’s rights, battle corruption, and work to improve public education. He has earned and deserves your support.

Tim Ryan for U.S. Senate

My relationship with Tim stretches back decades—to the time he defeated me in Democratic primary for the 32nd District seat in the Ohio State Senate. I know and trust him, and I admire the tireless battle he has waged on behalf of working families, organized labor, and consumers in both the state legislature and Congress. We can count on Tim to be a strong advocate for Consumers and a member of the Senate who has the courage to stand up to Wall Street Banks and other financial predators.

Most importantly Tim has based his campaign on his determination to put country above party. I know him well enough to tell you that I believe him.

 

Jeff Crossman for Ohio Attorney General

I know as well as anyone how important the office of Attorney General is to protecting Consumers in Ohio. Jeff Crossman grew up working class and he is passionately committed to standing up for Ohio Consumers and taxpayers without being restrained by his allegiance to corporate lobbyists like the current Attorney General David Yost.

 

 

Jennifer Brunner for Chief Justice and Teri Jamison and Marilyn Zayas for Associate Justice, Ohio Supreme Court

Anyone who reads the opinions written and rulings made by the six jurists who are vying for three seats on the Ohio Supreme Court will conclude that Jennifer Brunner, Teri Jamison, and Marilyn Zayas are clearly the best choice for these important posts. Both Justice Brunner and Judge Jamison, who serves on the Tenth District Court of Appeals, have made favorable rulings in the UI case and they, along with Judge Zayas have established a long record of ensuring that “equal justice under law” is more than a slogan. Consumers will be better served by Brunner, Jamison and Zayas.

Joan Synenberg, Judge, Cuyahoga County Common Pleas Court

In its endorsement editorial of Republican Judge Joan Synenberg, Cleveland.com noted the following:

“Should you ever be unlucky enough to find yourself in a Cuyahoga County Common Pleas courtroom as a defendant, the judge you would want before you is Joan Synenberg, who is standing for re-election Nov. 8 with 16 years on the bench behind her.

Not because she is a pushover when it comes to sentencing, but because the quality that has marked her career is a longstanding and passionate concern about what comes afterward for the people whose future she often holds in her hands.”

I absolutely and totally concur and urge the residents of Cuyahoga County to support her.

State Representatives Scott Oelslager and Brett Hillyer

Representatives Oelslager and Hillyer are both Republicans who have opposed anti-consumer legislation in the Ohio General Assembly and both supported expanding the Residential Mortgage Loan Act to include mortgage loan servicers.

I also ask residents of Lakewood and Cleveland to vote for State Senator Nickie Antonio and Representative Mike Skindell who have always championed consumer and working class families.

Those are my recommendations. Here is some useful information about the voting process:

November 8 is election day. The polls will open at 6:30 AM to 7:30 PM. If you are in line to vote at or before 7:30 you will be permitted to cast your ballot.

If you do not know the location of your polling place you may look it up here: www.sos.state.oh.us/elections/voters/toolkit/polling-location/

If you want to take a look at and study the ballot for your precinct in advance—something I always do—you may access it here: www.sos.state.oh.us/elections/voters/toolkit/sample-ballot/

Don’t want to wait until the 8th to cast your ballot? You may vote early in person at your local Board of Elections (BOE) at these times:

Friday, November 4 from 8:00 AM to 7:00 PM

Saturday, November 5 from 8:00 AM to 4:00 PM

Sunday, November 6 from 1:00 PM to 5:00 PM

Monday, November 7 from 8:00 AM to 2:00 PM.

Follow this link to locate the BOE office in your county: https://www.ohiosos.gov/elections/voters/toolkit/early-voting/

If you have an absentee ballot but did not return it, it must be postmarked no later than Monday, November 7. If not returned by mail, ballots must be received by the BOE by 7:30 PM on Tuesday, November 8. You may deposit your ballot in the drop box located outside the BOE or bring it into the office.

Under Ohio law you must have a valid form for identification to vote. Acceptable forms include photo IDs issued by the federal or state government, bank statements, and utility bills. A complete list is available here: www.sos.state.oh.us/elections/voters/id-requirements/

Now that you know who to vote for and how to cast your ballot, I will leave you with this:

Decision are made by those who show up.

So please, show up.

Thanks,

Marc

 

Filed Under: In the News

April 6, 2022 By Marc Dann

Wells FargoClaiming that Wells Fargo has engaged in a “…pervasive pattern and practice of placing Black Americans at a disadvantage in comparison to White Americans with respect to their applications for mortgage loans,” attorneys from DannLaw and the Zimmerman Law Offices filed a class action lawsuit against the giant bank in the United States District Court for the Eastern District of New York on Tuesday, April 6, 2022. The pleading in the case may be viewed here: Ifemoa Ebo v Wells Fargo.

Wells Fargo’s disturbing discriminatory behavior was documented in an extensive story published by Bloomberg in March. According to the report only 47% of Black homeowners who completed a refinance application with Wells Fargo in 2020 were approved, compared with 72% of White homeowners. By comparison other lenders had much smaller disparities in approval rates ranging from 7% to 12%. Bloomberg also noted that “Wells Fargo approved a greater share of applications from low-income White homeowners than all but the highest-income Black applicants, who had an approval rate about the same as White borrowers in the lowest-income bracket.”

Wells also discriminated against Blacks who applied for new mortgage loans. A review of publicly available data collected by the CFPB reveals that the bank approved applications submitted by Blacks at a rate 21% lower than those submitted by Whites. The disparity in approval rates at other lenders, including Chase, Quicken, United Wholesale Mortgage was approximately 10%.

Ms. Ebo’s case puts a face to Bloomberg’s reporting. In late 2021 she began searching for and found a new home in Brooklyn’s East Flatbush neighborhood. After signing a purchase agreement for $900,000 she submitted a mortgage loan application to Wells. At the time her credit score was approximately 800, her annual salary was $178,000, and she had no significant debt.

On November 1, 2021, Wells preapproved her for a loan of $883,698. The preapproval was set to expire on February 24, 2022. Ms. Ebo then immediately began working with the bank to secure final approval of the loan. She submitted all documentation requested by Wells, including W-2 forms, paystubs, and bank account statements in a timely fashion. On December 29, 2021, she received a “Commitment Letter” notifying her the application had been approved and advising her that she only needed to submit some additional documentation “in order to complete the final underwriting and funding of” the loan.

Things immediately went off the rails. In January and February Wells again asked for additional information much of which she had already submitted. She was also asked to provide items that were, according to the lawsuit, unnecessary, unduly burdensome, and irrelevant. For example, she was asked to explain why she made a monthly credit card payment of $290 to her own account and for a bank statement for a bank account that did not exist.

As Wells’ unnecessary and duplicative information requests continued into late February and March Ms. Ebo told the bank she was concerned her preapproval would expire before she received her loan even she was highly qualified and had supplied all documentation they had requested.

Her concern was justified. On March 22, 2022, the seller of the property cancelled the purchase contract with Ms. Ebo because Wells had not approved her financing and it was unclear if they ever would. She informed Wells of the seller’s decision that same day and accordingly, did not and never will receive the loan.

This is not the first time the lender has been accused of engaging discriminatory behavior. In 2012, the bank entered into a consent decree with the U.S. Justice Department to resolve claims it had unfairly steered Black and Hispanic borrowers into subprime mortgages and charged higher fees and interest rates than they did whites. At the time Wells paid $184 million to thousands of borrowers and agreed to adopt new compliance policies.

“Wells’ treatment of Ms. Ebo is unconscionable, illegal, but not surprising in light of the company’s history, Bloomberg’s reporting and the conversations we’ve had with others who were subjected to the bank’s outrageous practices,” DannLaw’s Javier Merino said. “Clearly, Wells has not been deterred by the laws that prohibit discrimination. Perhaps being held accountable in court will motivate them to change their ways and treat all applicants, regardless of race, equally and fairly in the future.”

The lawsuit seeks actual damages, statutory, and punitive damages, attorney fees and costs. For more information please contact Marc Dann at 330-651-3131.

Filed Under: Class Action Lawsuit, Founding Partner, In the News, Managing Partner, Mortgage Fraud Tagged With: Consumer Fraud, deceptive practices, Loan Modification, Marc Dann, Mortgage Fraud, Wells Fargo

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