Rescind My Loan

FORECLOSURE INSIGHTS – SOMETIMES A SIMPLE TILA RESCISSION LAWSUIT CAN TURN INTO A CIRCUS…

by Rescind My Loan by Foreclosure Defense Attorney Steve Vondran on 08/05/10 at 10:11 am

PREDATORY LAWYERING?  Here is another insider view of the types of things that go on when trying to saving your home from foreclosure……TALES FROM THE FORECLOSURE DEFENSE PIT.  Attorney defending One West Bank and Wells Fargo in a TILA and Predatory lending lawsuit filed by our firm lies about postponing foreclosure.

Statement of Facts

My Client had rescinded their loan under Truth in Lending Law, and sent in a rescission letter to their lenders to this effect (due to material truth in lending violations).  Under TILA, such rescission election applies to each and every loan assignee including in this case, Wells Fargo and One West Bank (you know the guys that bought up the failed Indymac’s loans in a sweetheart deal from the FDIC).  Anyway, our firm was hired to file a lawsuit to assert our Clients rescission rights because, as is normally the case in TILA rescission, the “lender” denied my Client’s rescission rights forcing us into Court to rescind the loan, and seek our attorney fees.

As we have discussed in previous posts, the lenders typically and routinely deny your rescission request.  Why?  because they can, and because they like to force you into court where they try to raise the “tender” issue (one of their favorite ploys) even though the literal reading of TILA requires them to pay you back all the monies they received from you, and to remove the security instrument leaving no rights to foreclose on your property.  At any rate, you can view other blogs for the tender issue.

At any rate, our lawsuit named One West Bank (supposedly the loan servicer) and Wells Fargo (supposedly the investor).  We say supposedly, because when you are dealing with securitized loans, it can often be difficult to ascertain who in fact is the real lender and who has the note and deed of trust and the proper rights to collect money on your loan, and to foreclose on you.  We talk about these types of “produce the note” and “prove you are a creditor in bankruptcy” issues on other blog posts.

So back to our story, so we file a TILA lawsuit, and seek to rescind the loan.  We have a tender strategy in place and my Client wants their money back that they paid on the loan.  This is their right.  We are prepared to seek the TRO and then the Preliminary Injunction and prove up our case in a court of law.

Now remember, after you file a lawsuit, the Defendants only have a limited amount of time to answer the complaint or file a motion, etc. – typically 30 days in California and 20 days in Arizona.  Defendants One West Bank and Wells Fargo (company that purchased Wachovia and World Savings) failed to file any responsive pleading in this time frame.  YEAH, I SUPPOSE THEY WERE TOO BUSY DENYING LOAN MODIFICATIONS TO RESPOND TO A CIVIL LAWSUIT FILED UNDER TRUTH IN LENDING LAW.  We know its not a money issue, because they got their nice big fat juicy bailout, so that couldn’t be the issue right?

So after the case is filed, and no answer or responsive pleading is made to the TILA lawsuit, we filed for a entry of DEFAULT and were preparing to prove up our case to the judge.  That’s when the nonsense begins.  First thing that happens is a lawyer for Wells/OneWest (yes, nowadays these companies typically hire one lawyer to represent both of their interests if you can believe it) calls and says he represents Wells/OneWest and that he wants back in the case even though he failed to respond in a timely manner.  This attorney and firm shall remain nameless out of professional courtesy even though such is not really deserved.

So this attorney literally begs my Client to let them back into the case and agrees to postpone the sale date (that was already scheduled) but not yet enjoined by the TRO or preliminary injunction.  The attorney even sends us an email to that effect.  Since we realized in many cases the Courts are going to simply let the defendant back into the case anyway, we agreed to stipulate to allow them back into the case and to refrain from filing the TRO as we agreed to work on early settlement negotiations in good faith.

Good faith?  Too good to be true.  Next thing that happens is we start getting calls from another firm stating they represent Wells Fargo / OneWest Bank on the same case? Huh?  One law firm is not enough so they hire two different firms to defend the TILA case and neither knows about the other.  Laughable, but only somewhat surprising given some of the things we have seen in loss mitigation.

Thereafter, Attorney#1 goes on and has his Client conduct a foreclosure sale even though he later claimed (“this was against my advice”) and after also claiming (“I knew nothing about this”).  Hmm.  Long story short, we send a scathing letter to Wells One West demanding that they rescind the foreclosure sale because under TILA they had no security interest to foreclose on.  Attorney #1 says he is no longer on the case, but that they have agreed to rescind the foreclosure sale.  Then Attorney#2 calls and says he is on the case now but he will not answer any of our questions about rescinding the sale, but he begins to beg us for a stipulation to allow them back into the case and set-aside the default.  At this point we tell them to pound sand unless they rescind the sale as they said they would do.  Of course, this never happens.  Instead, we moved froward with our TRO (restraining order) and eventually get our preliminary injunction granted even over the object of the Attorney#2 who was on the phone (courtcall) making  some silly argument about tender.  He really had nothing else to say.  Keep in mind, Attorney#2 had not even appeared in the case, or filed any motions to get back into the case or rescinded the wrongful sale or anything.  This is life in foreclosure land.  Alot of chaos, confusion, and lack of good faith.

We are now going back in to prove up the default and seek to rescind the loan and get our attorney fees.  This is just an example of how even relatively simple tasks (such as responding to a civil predatory lending lawsuit) are getting completely fouled up by these fortune 500 bankers and their attorneys who either care less about you, or worse, are predatory themselves.

This story only reinforces our vigor on why we need to hold these callous financial institutions accountable, and demand that they own up for the predatory loans they profit off, and the truth in lending rescission claims they think they can completely ignore (even after a lawsuit has been filed), and move to foreclose on a California homeowners primary residence even when their attorney states they wont.  These types of callous and indifferent acts by major lenders and their foreclosure counsel only adds gas to the foreclosure defense fire by interjecting questionable conduct that seeks to deprive a California homeowner of their home.

MORAL OF THE STORY: Folks, when you are dealing with big lenders such as Wells Fargo and One West bank, be advised to look out only for yourself.  This is not the first example of tricks, lies, and false statements in the foreclosure defense and bankruptcy context which stories abound (at least as far as the calls our office is concerned).  At the end of the day these bully lenders and financial institutions and their hired guns have an arsenal of laws (and taxpayer bailout money) created especially for them (by their powerful lobbies and special interests) – such as (1) the tender rule following a foreclosure sale, (2) alleged federal preemption of state law predatory lending claims, (3) holder in due course doctrine, and the; (4) no duty owed by a bank to a borrower rule etc. (these are the big defenses the big boys typically pull out when sued and called to answer for their roles in mortgage meltdown).

We are all lead to believe (or should I say the banks argue) that the bailed out banks have done absolutely nothing wrong and played no role whatsover in this current financial crisis and that they deserved the bailout President Obama and Congress gave them, and that they hold all the cards in regard to loss mitigation, and that it was  the borrowers created this mess, and that you are essentially powerless to challenge any of their acts of wrongdoing.  In California, SB94 was passed to essentially deprive you of legal representation when seeking reasonable loss mitigation options.  I suppose that is too much to ask for to allow Californians the “freedom to contract” with who they see fit to help them.  It seems unconstitutional to simply impinge on your “freedom to contract” but again, I suppose your freedoms are subject to forces more powerful than you, namely fortune 500 financial institutions who literally write the laws.  At the end of the day, they get their well-paid lawyers to fight their battles for them, while you are told YOU HAVE NO RIGHT TO PAY ANYONE IN ADVANCE TO REPRESENT YOUR INTERESTS.  Welcome to the jungle!

Folks, you also need to ask yourself what types of banks and financial institutions you want to do business with in the future? Are there any banks that   have your best interests at heart?  Does anyone care about your legal rights or is it just about getting their hands on your money?  You should think honestly about who you are going to bank with and deal with going forward.  The lesson to be learned here, is that so-called “lenders” and “investors” are basically only out for one thing – money and profits, and if you and your home and your dreams stand in the way, they will do whatever it takes to steamroll over your opposition to their asserted authority.  Should anyone really be surprised at anything these bailed-out dinosaur financial institutions pull?  California and Arizona homeowners you must remain vigilant in this war against foreclosure, trust no-one and seek to identify, assert, and stand up for your rights.

PS.  If you have a refinance loan within the last three years, make sure to have a TILA audit / forensic loan audit of your file undertaken by a foreclosure defense lawyer or other qualified professional.  If you have a right to rescind your loan you should review this strategy with your foreclosure defense attorney.  TILA creates some powerful rights that could wind up being the difference between facing a deficiency judgment and walking out of court with a check in hand following a bona fide rescission claim.  The lenders would prefer you not examine this avenue of potential defense.  TILA rescission also gets real muddy for them when dealing with securitized loans and trying to identify who got paid on the loan.