In the News

March 26, 2021 By Marc Dann

Important notice for current and former customers of Flagstar Bank: You may be a victim of a serious data breach! Don’t delay. Protect yourself and your family. Contact DannLaw TODAY!

Flagstar Bank recently announced that it allowed hackers to steal the social security numbers, first and last names, phone numbers, and home addresses of current and former customers. The victims include people whose mortgages were sold to Flagstar without their consent or knowledge. There are also reports that customers who closed their accounts more than ten years ago are impacted by the breach.

As a result of Flagstar’s failure to protect this sensitive personal information, you are now at high risk for identity theft, tax fraud, and tax refund diversion. In addition, cybercriminals can use this data to file fraudulent unemployment claims and open new accounts in your name.

If you received a letter from Flagstar about the breach you should immediately take advantage of the free identity monitoring service the bank is offering.

You should also contact DannLaw today. We are now investigating this devastating data breach and believe you and other victims may be entitled to substantial financial compensation.

To arrange a no-cost no-obligation consultation about this important matter call 216-373-0539, complete the contact form found at dannlaw.brmcstaging.com/contact, or send us a direct message via our Facebook page. We are here to protect you.

March 7, 2021 By Marc Dann

A lot has changed since we posted our last update. A new president is in the White House, mortgage forbearance programs and foreclosure moratoriums have been extended by the federal government, a $1.9 trillion stimulus package is working its way through Congress, millions of Americans have been vaccinated against the coronavirus and the entire U.S. population may be inoculated by early summer.

For the first time in a very long time, there is light at the end of the COVID tunnel.

Unfortunately, that light could become an oncoming train for homeowners who make unwise or incorrect decisions when forbearance and foreclosure relief programs sunset in the months ahead. To help ensure that the end of the pandemic doesn’t mark the beginning of a nightmare for people pummeled by the virus, I’ll discuss the aid programs that are now available, how to take advantage of them, and then outline steps families should take now to secure their financial future.

FORECLOSURE MORATORIUMS

Let’s start by taking a look at the foreclosure landscape.

I’m pleased to report that there is some good news for borrowers whose mortgages are backed or owned by the federal government. The moratorium on foreclosures imposed by the Federal Housing Administration (FHA), Veterans Administration, the U.S. Department of Agriculture (USDA), Fannie Mae, and Freddie Mac will remain in effect until June 30, 2021.

While the extensions provide much-needed breathing space for homeowners who were in or were about to be in foreclosure when the pandemic struck, I must emphasize that the bans are temporary reprieves, not pardons. Mortgage servicers will begin processing judicial and non-judicial foreclosures the minute the moratoriums are lifted.

The news isn’t anywhere near as good for homeowners with loans that are not government-backed. While some states have enacted eviction and/or foreclosure moratoriums that protect borrowers whose mortgages are held by private lenders, many, including Ohio, have not. That means foreclosure is a very real and imminent threat—especially as courts in more and more jurisdictions resume normal operations.

Whether you are now protected by a federal or state moratorium or are involved in an active foreclosure proceeding, now is the time to contact experienced legal counsel like the attorneys at DannLaw for advice.

We have helped thousands of families save their homes by negotiating affordable loan modifications and utilizing groundbreaking legal strategies that stop or soften the impact of foreclosure.

We also perform a thorough review of every client’s mortgage history and case file to determine if their servicer or lender made mistakes or committed violations of federal or state consumer protection laws. Those errors and violations often enable us to defeat the foreclosure claim and recover substantial monetary damages from lenders that can put families on the path to financial security.

To learn more about our innovative and highly effective foreclosure defense strategies schedule a free consultation by completing our contact form or sending us a direct message on Facebook. But don’t delay, every day you wait could bring you one day closer to losing your home.

Forbearance

Before I dig into the details about the current state of forbearance relief, please keep this oft-repeated phrase in mind:

Forbearance is NOT forgiveness.

As I have noted in every one of our COVID updates, borrowers will be required to make the principal, interest, and escrow payments that have been deferred when their forbearance period ends. No one, not President Biden, members of Congress, nor the CEOs of major lenders and servicers has ever so much as hinted that these costs will be forgiven. That means homeowners will, at some point, be on the hook for thousands of dollars in arrearages.

That said, here is an overview of the relief programs that are available and applicable deadlines.

Borrowers with FHA, VA, or USDA loans have the right to request up to 12 months of forbearance in two six-month increments. The deadline to apply for an initial 180-day forbearance period has been moved from March 31, 2021 to June 30, 2021.

In addition, the agencies are also providing two extensions of up to three months each for homeowners who paused payments on or before June 30, 2020. The extensions will give homeowners nearing the end of their maximum 12-month forbearance period extra time to recover from financial hardships caused by the pandemic. Borrowers who qualify must apply for the additional time no later than June 30, 2021.

Homeowners with Fannie Mae/Freddie Mac loans are eligible for up to 12 months of forbearance. At this point, the agencies have not set a deadline to apply for an initial 180-day forbearance period.

Like the FHA, VA, and USDA, Fannie and Freddie are also giving borrowers approaching the end of their maximum forbearance period more time to resume making payments. Homeowners who entered forbearance on or before February 28, 2021 may now request an additional three months of relief.

With due apologies to Shakespeare, we’ve arrived at the point in the update where I must say: To forbear or not to forbear, that is the question. Although every situation is different, here are some broad guidelines that will help borrowers with government-backed loans determine if they should enter, remain in, or avoid forbearance:

While forbearance is not a perfect solution, it is far better than foreclosure. That is why struggling homeowners should take advantage of the available relief programs. If you are in forbearance and are unable to resume making your mortgage payments stay in until you are back on your feet. If you are not in forbearance but need to be, contact your lender, and apply ASAP.
If you are in forbearance but can now afford to make your mortgage payments, it’s time to plan and execute an exit strategy. Staying in longer than necessary will needlessly increase the amount of deferred principal, interest, and escrow you owe moving forward.
Borrowers who have been and can continue to make their mortgage payments should avoid forbearance like the plague.

Deciding how to settle the balances accrued during forbearance is just as important as choosing whether to enter the program and when or if to leave. While the specific plans offered by each agency differ, in general, the following four options are available. It is important to note that FHA, VA, USDA, Fannie and Freddie are prohibited from requiring borrowers to make lump sum payments of the amounts due.

Repayment plan. This option enables borrowers to pay the balance due by increasing their mortgage payment for a few months.

Deferral or partial claim. This option allows homeowners who can resume making their regular payments but can’t afford more to move missed payments to the end of their loan or put them in a subordinate lien repayable only when they refinance or sell their home or terminate their mortgage.

Loan modification. Borrowers who can no longer afford their pre-pandemic mortgage payment can negotiate a loan modification. The amount owed in deferred principal, interest, and escrow will be rolled into the loan. The monthly payment will probably drop, but the term or the principal balance of the mortgage may increase.

Lump-sum reinstatement. An option to consider for borrowers who have the financial wherewithal to pay back missed payments all at once.

Your mortgage servicer should reach out to you 30 days before your forbearance period ends to discuss your options. Here are two important points to ponder:

First, remember, you cannot be forced to make a lump sum payment. If that is the only option offered by the servicer, ask them about the other plans they offer.

Second, each repayment option is complicated and carries risk. Don’t think for a minute that your servicer is looking out for your best interests. In many cases the opposite is true. That is why you should consult with DannLaw before leaving forbearance. We will work with you to devise an exit strategy that protects you and your family and helps secure your financial future.

Things are even more complicated and risky for homeowners whose mortgages are held by private lenders. If you are in forbearance, please stay in regular contact with your servicer because they have the ability to change the terms of your plan at any time. They can also require you to make a lump sum payment if you choose to leave or they decide to end your forbearance period. In addition, it is highly likely that any repayment options they offer will be designed to maximize their profit at your expense.

DannLaw’s experienced legal team knows how to deal with and hold private lenders accountable. If you have a private mortgage, don’t hesitate to contact us to arrange a free consultation so we can assess your situation and help ensure that your home and your finances don’t become victims of the pandemic.

Finally, I want to remind everyone that forbearance is not automatic. You must always contact your lender or servicer and ask to defer your payments and you must make the request no later than the deadlines I’ve listed in this update.

If you have any questions about forbearance, foreclosure, or other consumer credit or lending issues, do not hesitate to contact us. We are here to help.

Thank you for taking the time to read this update. Be well, and take heart, we’ve come a long way together and I’m confident better days are just ahead.

December 30, 2020 By Marc Dann

Hello, happy holidays, and welcome to DannLaw COVID-19 update 12. In this edition, I’ll unwrap the details of the long-overdue stimulus package that was just passed by Congress and signed by the President.

While the 5,600-page bill doesn’t contain anything that would set 12 lords to leaping or qualify as tidings of great joy, it does provide some much-needed financial relief and protection for consumers, workers, and homeowners impacted by the ongoing pandemic.

Direct Payments

Like the CARES Act, the new bill funds direct payments to individuals and families. Single adults with adjusted gross incomes of up to $75,000 in 2019 will receive $600. Couples earning up to $150,000 will receive $1,200. People who earn up to $112,500 and file as “head of household” will also receive $600. The payment will increase by $600 for each child under the age of 17 in a family. People with incomes above these levels will receive a partial payment that declines by $5 for every $100 in income.

If you earned less in 2020 than 2019 and would be eligible for a payment as a result, you will be able to claim the money as a refundable credit when you file your tax return for 2020. Be on the lookout for instructions on how to request the payment when your tax forms arrive—if you don’t ask for it you won’t get it.

According to Treasury Secretary Steve Mnuchin, payments via direct deposit should start showing up in bank accounts within two weeks. If yours is being delivered via the USPS it may take much longer to arrive.

Extended Unemployment Benefits

The bill extends unemployment benefits until at least March 14, 2021, for people receiving state-level benefits as well as those who are receiving checks from the Pandemic Unemployment Assistance (PUA) program which covers the self-employed, gig workers, part-timers, and others who are typically ineligible for regular unemployment payments. Everyone who qualifies for unemployment checks will also get an additional weekly payment of $300 through March 14.

Although it is half the amount provided by the CARES Act, the extra $300 per week will be critically important for families struggling to keep their heads above water as the third wave of the pandemic washes over the U.S. and the wait for vaccines to become widely available continues.

If your benefits have run out, log onto your state’s unemployment website to see if you must do anything to receive the extended aid. According to experts, most states should automatically restart your payments, but I strongly urge you to be proactive and check for yourself.

And I know this will come as a surprise, but you will probably have to wait a few weeks for new payments to arrive.

Mortgage Forbearance

As we’ve noted in previous updates, the CARES Act provides for up to 12 months of payment suspension/forbearance for borrowers with federally-backed loans owned by Fannie Mae, Freddie Mac or insured by the FHA, VA, or the Department of Agriculture. While forbearance is a valuable tool that is helping many families remain in their homes, there are some important things to keep in mind about forbearance:

First, forbearance is not automatic—you must apply. Fannie and Freddie have not set a deadline for accepting applications but if your loan is insured by the FHA, VA, or USDA you must contact your servicer and request an initial Covid-19 forbearance on or before February 28. Click here to learn more about the Fannie/Freddie forbearance process and here for info if your mortgage is backed by the FHA, VA, or the U.S. Department of Agriculture.

Second, and I know I’ve said this numerous times, FORBEARANCE IS NOT FORGIVENESS. At some point, you will be required to make the principal, interest, and escrow payments that have been deferred. Whether you have been in forbearance for some time or intend to apply, you should consult with an experienced mortgage attorney to discuss the financial challenges you will face when forbearance ends. I invite you to contact DannLaw to arrange a free consultation so we can evaluate your situation and begin planning an exit strategy that will enable you to preserve your equity and keep your home.

Third, if you are in forbearance look closely at your monthly statement to make sure it is correct. You should also check your credit report. If your servicer is entering negative information or you notice discrepancies contact us so we can help protect you and determine if you have legal claims that may entitle you to financial compensation.

Fourth, If you haven’t been able to make payments because you lost your job or were laid-off when the COVID-19 crisis cratered the economy but are now back to work you should consider taking your loan out of forbearance before the amount of delayed interest, principal, and escrow you owe becomes unmanageable.

Foreclosure Moratoriums Extended

I’m pleased to report that Fannie Mae, Freddie Mac, the VA, FHA, and USDA have extended the moratoriums on foreclosures enacted earlier this year. Single-family homeowners with loans backed by Fannie, Freddie, or the VA are now protected from foreclosure through at least Jan. 31. The FHA moratorium will remain in effect until February 28.

In addition to the CARES Act moratorium, the governor of New Jersey issued an executive order in March that prohibits foreclosure-related evictions. Under the order, homeowners cannot be removed from a residence even if a final judgment of foreclosure has been entered and a sheriff’s sale of the property has taken place. The order will remain in effect until two months after the governor declares the COVID-19 crisis has ended. In addition, more than 150 private lenders in the state have agreed to offer relief to homeowners impacted by COVID-19. You can learn more about the programs being offered in New Jersey here.

You can find a complete list of states that have imposed foreclosure/eviction moratoriums here. Ohio is conspicuous by its absence–the state has done nothing to assist homeowners.

Unfortunately, the CARES Act forbearance and foreclosure programs do not apply to borrowers whose loans are not “government-backed.” That means unless you live in a state that has enacted protections that apply to private lenders foreclosure remains a very real threat. If you are being threatened with or are already in foreclosure, I urge you to contact DannLaw today to arrange a free consultation. We may be able to take steps to slow down the process and help you save your home.

Eviction Relief

The bill extends the CDC-ordered moratorium on evictions until January 31 and provides $25 billion that will be distributed by state and local governments to people who have fallen behind in their rent.

To receive assistance a renter’s household income for 2020 may not exceed more than 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals must qualify for unemployment benefits or have experienced financial hardship — directly or indirectly — because of the pandemic.

We will provide details on how to apply for this critically important aid as they become available.

Student Loans

The Department of Education has extended the federal student loan relief included in the CARES Act, including zero-interest-rate forbearance and a moratorium on collection activity, until January 31. Here’s an important tip: make your payments if you can because every dollar will be used to reduce the principal on your loan. Follow my advice and you will owe considerably less when the relief programs end.

I do have bad news for people with private student loans: you don’t qualify for the relief programs. That means debt collectors can continue to pursue and torment you during the pandemic.

Renewal of Paycheck Protection Program

Most of the funding in the new stimulus package is devoted to renewing and strengthening the Paycheck Protection Program (PPP) created by the CARES Act. Unlike the original version of the PPP, the revised edition focuses on small businesses, including those with ten or fewer employees, minority-owned firms, and companies located in low-income areas. You can find more info about the restructured program here.

We will provide details of how and where to apply for the new, improved version of the PPP in the coming weeks, but I urge any and every business owner who may be eligible to explore and participate in the program.

Thanks for taking a few minutes to read DannLaw Covid-19 Update 12. As always, we are here to help homeowners and consumers so please feel free to contact us if you need help or advice.

Happy New Year to you and yours and best wishes for a great 2021.

December 15, 2020 By Marc Dann

Brian Flick - Managing Partner Dann Law Brian Flick Superlawyer badge One of America’s most prestigious attorney rating services has just confirmed what his colleagues at DannLaw and the thousands of clients he has represented have long known: Brian Flick is a “SuperLawyer” in the field of consumer law. Super Lawyers selects attorneys using a patented multi-phase process that combines peer nominations and evaluations with independent research. Each candidate is evaluated on 12 indicators of professional achievement. Those who score highest then undergo a “blue ribbon” peer review by practice area. Only the highest-rated attorneys make the Super Lawyer list for each state and the designation is reserved for attorneys who excel in their field, contribute to their community, and abide by the highest professional and ethical standards. We are extremely proud that Brian is listed among them.

You can learn more about the SuperLawyer selection process here.

Brian was previously named to the “SuperLawyers Rising Star” list of outstanding attorneys practicing in the fields of consumer and consumer bankruptcy law.

If you are having difficulty making your mortgage payment, are in or are about to be in foreclosure, are being harassed by debt collectors, or believe you have been cheated or abused by a bank, mortgage servicer, lender, or debt collector, contact DannLaw’s very own SuperLawyer, Brian Flick to arrange a free consultation today. You can reach Brian by calling 513-951-7124 or by using our contact form.

Superlawyer selection process

November 2, 2020 By Marc Dann

Elliot Feltner lost $80,000 in equity when the Cuyahoga County Board of Review seized his property. DannLaw has asked the U.S. Supreme Court to decide if the foreclosure violates the Fifth and Fourteenth Amendments to the U.S. Constitution.

Three years ago, Elliot Feltner of Cleveland, Ohio, lost a building he inherited from his late wife’s father along with nearly $80,000 in equity when the Cuyahoga County Board of Revision (BOR) used an obscure Ohio law to seize the property in order to satisfy a tax delinquency. A team of attorneys representing Mr. Feltner has now asked the U.S. Supreme Court to rule on the constitutionality of the administrative foreclosure process that has had a devastating impact on residents of Ohio and more than a dozen other states.

In a Petition for Certiorari filed with the Court, former Ohio Attorney General Marc Dann of DannLaw, Lawrence G. Salzman, Joshua W. Polk, and Christina M. Martin of the Pacific Legal Foundation, and Andrew Engel assert that the BOR foreclosure process violates the Fifth Amendment’s Takings Clause, provisions of the Fourteenth Amendment, and sections of the U.S. Code because it does not give property owners the opportunity to seek and receive the equity that remains after a property is sold and the taxes, interest, and penalties due are paid.

“It’s well established that governmental entities have the power to take properties via public domain,” Dann said. “But government was never permitted to do so without compensating the owner for its value until states implemented administrative foreclosure procedures like the one used to confiscate Mr. Feltner’s property.”

“Under long-standing Ohio law, property foreclosed due to delinquent taxes is sold to the highest bidder at a public auction. The property owner is given notice of the impending sale, has time to pay the debt if they can, and receives any funds that remain after the amount owed is paid,” Dann noted. “The process the BOR uses to acquire properties for the county land bank eliminates the auction, significantly shortens the time afforded owners to resolve the delinquency and allows the land bank to keep any excess value. That’s both patently unfair and, as we are prepared to argue, blatantly unconstitutional.”

Dann and Engel first raised the constitutional issues when they petitioned the Ohio Supreme Court to order Cuyahoga County to compensate Mr. Feltner for the equity he lost in the sale. The Court denied the petition on procedural grounds, but Chief Justice Maureen O’Connor and Justices Patrick Fischer and R. Patrick DeWine all stated in concurring opinions that the Court should have addressed the constitutionality of the BOR foreclosure process. Justice Fischer called the situation “disconcerting” and said “the whole scheme is unsettling and just seems wrong.”

While disappointed with the Ohio Supreme Court decision, the comments made by the justices spurred Attorneys Dann and Engel as well as the Pacific Legal Foundation to ask the U.S. Supreme Court to intervene. “The principle that citizens should receive just compensation when government takes their property stretches all the way back to the American Revolution,” Dann explained. “And the Supreme Court has ruled on numerous occasions that withholding surplus proceeds from a property owner is a violation of the Fifth Amendment’s Taking Clause. We believe that historic principle and those rulings clearly make the BOR process unconstitutional.”

He noted that the High Court has allowed governments to keep excess proceeds from tax sales if mechanisms were in place that enabled property owners to contest the sale or seek compensation. But the Court has never ruled on whether a foreclosure process that does not offer people like Mr. Feltner a way to recover their equity passes constitutional muster. In addition, Supreme Courts and federal district courts in five states have held that governmental entities must distribute excess proceeds to property owners while federal and state courts in six others have ruled government can keep the money.

“This case gives the Court a perfect opportunity to determine if governmental entities violate the Takings Clause when they seize property worth far more than what is owed in tax debt and refuse to remit excess funds to property owners after the debt is paid,” Dann said. “Given the importance of the issue and the conflicts between state and federal courts we’re cautiously optimistic that the Justices will agree to accept the case and bring clarity to this extremely murky and contentious area of the law.”

For more information please contact Atty. Marc Dann at 216-373-0539 or via email: [email protected]

BACKGROUND

Mr. Feltner’s case shines a distressing spotlight on the BOR foreclosure process. In 2017 after enduring years of personal tragedy and severe health issues, he began the arduous work of putting his affairs in order. That is when he learned the body shop he had inherited from his late father-in-law was encumbered by more than $65,000 in delinquent property taxes, penalties, interests, and costs he could not afford to pay. Fortunately, the property was worth more than he owed. So, he put it on the market and found a buyer willing to pay an amount that would enable him to satisfy the tax debt and earn a profit on the sale.

As he prepared to close, however, the deal fell apart because the BOR had, without his knowledge, foreclosed on and seized the property, which was valued at $144,000. The BOR handed it over to the land bank which then gave it to a private company for nothing. Mr. Feltner never had the opportunity to stop the foreclosure or recover the nearly $80,000 in equity that remained after the tax debt was paid. But, as his attorneys note, Mr. Feltner was not the only loser. The BOR seizure also wipes out the property tax debt so schools and other local governmental entities did not receive one penny of the $65,000 they were owed.

The Petition, media reports, as well as a number of academic studies reveal that what happened to Mr. Feltner is not an isolated incident. Research conducted by the Ohio Center for Journalism found that more than $11.25 million in taxes and $77 million in equity were erased by administrative foreclosures in Ohio in 2019 alone. That figure is dwarfed in the state of Massachusetts where, according to U Mass law professor Ralph Clifford, approximately $56,000,000 is unconstitutionally appropriated from taxpayers each year. The situation is similar in the other states that permit administrative foreclosures.

July 27, 2020 By Marc Dann

I was Ohio’s Attorney General when the fraud-driven collapse of the housing market documented in “The Con” began. I’m proud to say that my office was at the forefront of the effort to hold the big banks, predatory lenders, rating agencies, mortgage brokers, stock and bond speculators, brokerage firms, real estate appraisers and others who ignited the near-collapse of the global economy accountable for their actions.

The things I learned as we investigated the mortgage industry were extremely disturbing and distressing. We discovered the home mortgage, which had for decades been the very foundation of the American dream, had become the cornerstone of a multi-trillion dollar racket run by charlatans, scam artists, and cheaters who gleefully used deceit and trickery to prey upon and ruin working and middle-class families.

While their behavior was deplorable, I was even more outraged by the fact that the regulators responsible for protecting the American people had turned a blind eye to the scam that was taking place under their noses and then refused to prosecute any of the criminals once it blew up.

I founded DannLaw in response to the government’s utter failure to protect and seek justice for homeowners and consumers. For more than a decade, DannLaw has filled the void left by regulators and prosecutors who refuse to do their jobs. We have used the law and the civil justice system to help thousands of families save their homes and to force banks, mortgage servicers, and other cheaters to play by the rules and compensate our clients.

I urge you to watch “The Con” which is fascinating and infuriating and to remember that we at DannLaw are here to do the job the regulators won’t.

You can register for the August 5 free Virtual live premiere of The Con here: https://www.thecon.tv/event

I hope you will join me for this important event.