Please explain the Mortgage Audit and Analysis
process?
When you borrow money,
there are laws that require the lenders to give you specific disclosures
about the loan. The disclosures are supposed to be on certain forms and
presented in clearly defined ways. These and other consumer protection laws
are designed to protect you, the consumer, from predatory lending practices,
including non-disclosure, fraud, deceit, and usury (undisclosed retention
of money).
We examine (audit) your
loan documents to be sure the lender followed the law. If they didn't, we
help you obtain just compensation for the broken laws.
Is the use of Consumer Protection statutes another form of
mortgage elimination?
Yes. The difference is the
emphasis and focus. We want to make sure that the consumer is not the
victim of predatory lending practices. If the lender did engage in
predatory lending, and the loan is a refinance, home repair, and home equity
loan, the consumer can often cause the lender to rescind (or cancel) the
loan entirely. If lenders break specific consumer protection laws, the
lender must stop collecting payments, and re-convey the deed to the
borrower. Often the lender must also pay money to the borrower (monetary
damages)
Mortgage elimination
programs try to get rid of the mortgage using some device. Each program
attempts to do this differently. Many attack the fraud of how the loan
originated while others utilize some sort of “redemption” or “discharge”
process to redeem the note and ask for re-conveyance of the deed. Our focus
is to make sure that lenders follow the laws that apply to every loan.
A primary difference
between TILA and other programs is, we use “black letter law” and to bring
the lenders into compliance and courts honor that law. Black Letter law is
law that is generally accepted by the legal system. The courts have a long
history of ruling in favor of consumers when predatory lending is involved.
What are the possible outcomes to doing the TILA
process?
The best outcome is
cancellation of the loan and re-conveyance of title to the borrower. The
paperwork from most loans fitting our parameters contains violations for
which the lenders must rescind the loan contract.
In addition, the law
carries a statutory monetary award somewhere between $200 and $2000. The
exact amount is decided by the court.
The borrower can also ask
for additional monetary damages. In most cases, the borrower lost money
from predatory lending practices and can ask to be repaid. The amount of
damages is decided by the court. In certain situations punitive damages are
awarded. In other words, the court orders the lender to pay “extra” money
as a punishment. This can be in seven figures in some instances
What happens if you can't find any errors in our mortgage
papers? Can I get my money back?
To date, we have not seen
one set of loan documents that were without any violations. Many have
multiple violations and other causes of action, with several of them being
bad enough to put the possibility of free and clear title on the table.
We audit your documents free of charge.
If there is
not sufficient cause of action to warrant using our process, we will inform
you of that before you pay anything.
Why are you looking for violations in the mortgage
contracts? Are you suggesting that the "lenders" are not telling us
everything?
Yes. Lenders have
developed a notorious reputation for NOT telling borrowers the truth about
their loans. This is why consumer protection laws were passed in the first
place. These laws are only effective, however, when consumers understand
the laws well enough to know whether they're being followed or not.
Going through the TILA
process will help you become much better informed, starting with your own
paperwork.
What is Truth-in-Lending and how does it affect my loan?
The Truth-in-Lending Act (TILA)
is part of the larger Consumer Protection Act which includes laws aimed at
specific lending practices. The Truth-in-Lending Act is actually found in
Title 15 of the United States Code, starting at section 1601. TILA is
implemented by Regulation Z (Title 12, Section 276 of the Code of Federal
Regulations).
The purpose of the
Truth-in-Lending Act is implied by its name. The goal, is for the loan
information to be presented in such a way that the borrower can clearly
understand all of the costs BEFORE signing for a loan. This is to protect
the borrower from deceptive lending practices.
Is Truth-in-Lending the only legal tool that you use?
Other Consumer Protection laws include:
Unfair and Deceptive Trade Practice Acts
Real Estate Procedures Settlement Act (RESPA)
Home Ownership and Equity Protection Act (HOEPA)
Lender Liability
Statute of Frauds
We've been researching many of the programs that are
available. A lot of them require a great deal of education, and
participation on our part. How much will we be required to do if we select
your program?
There are two parts to
TILA: the audit and the defense. We do the audit and inform you of the
violations and causes of action that we identify. We also play a key role
in the defense by preparing the settlement letters and if necessary, the
lawsuit paperwork. If you must initiate the court process, you do not need
to have an in-depth understanding of the laws. The paperwork is very strong
and has stood up in court numerous times.
What guarantees are offered?
This is a best efforts
contract arrangement.
There are no silver bullets, as other programs would like you to think. The
possibility of free and clear title depends on several variables. Our
accuracy in identifying the violations and other causes of action is
important.
Our paperwork (the
letters, and the lawsuit and accompanying documents), are also a critical
component to your success. And then there is YOU. How far are you willing
to take the process? The severe violations and other causes of action will
get you clear title if the lender comes to the settlement table or you go to
court and win. We give you the paperwork to accomplish these goals.
If I use your service, will I ever be able to get another
mortgage?
Using TILA should have no negative effect on your ability to obtain other
mortgages, if that is what you desire. YOU have done nothing illegal, the
lender has.
Could I get another loan on my home with the same lender and
put it through the TILA process again?
If YOU were a lender and
you had just had a customer who took you to court and got their mortgage
cleared and their loan cancelled because you had not followed the law, would
you be happy to see that customer walk through your doors and ask you to
repeat the process?
Having said that, what
makes you want to go back to the same lender? Why not go to a different
lender? Besides, your place is free and clear. Why go back into debt?
Will it affect my credit rating and credit bureau reports if
I use the TILA process?
When you win the case
against the lender, the order specifies that the lender cannot damage your
credit rating and must remove all bad marks associated with any foreclosure
actions, etc.
The lender is responsible
for canceling the loan. This is very different from you not making the
payments. If payments were in fact not made, and the court finds that the
lender is involved in predatory lending and cancels the loan, then no
payments are owed. In the end, the credit rating must be cleared.
Can the bank put a mark on my name to damage my future ability to obtain
loans?
That would be an illegal act and can result in more judgments
against the lender.
What would be a worst case scenario if I use the TILA
process?
The worst thing would be
that you could lose the case
and continue as you are now. If you are willing to
continue pressing forward, there is a likelihood that you will win. Most
cases are lost simply because the person quit. It is somewhat like tennis:
you can lose a round, but that is not the whole match. If you walk off the
court after one round lost, then that is the end of the game. We have a
good track record in winning because we press forward and serve another
round. Our paperwork is strong and the laws are on your side, so why should
you quit?
What can I expect from you when I send you my paperwork?
What happens next?
When the paperwork arrives
at our office, we call and let you know that we received it. We also ask
you some preliminary questions about your situation and the loan.
Then, we do the audit and
analysis on your paperwork. Please figure 30 days for this part of the
process. When the audit and analysis is complete, we call you and go over
the violations and other causes of action, we found.
Next, your loan case goes
to one of our paralegals. That paralegal will work with you throughout the
remainder of your process.
If you are not in
foreclosure, you are given a letter to send to your lender.
They have 20 days to perform and comply with the law. Sometimes, the lender
will ask to negotiate a settlement after receiving this letter. Sometimes,
the lender will make a senseless or “fluff” response, and other times they
will ignore the letter altogether.
If the lender does not
agree to settle the loan after 20 days, then you send them a Notice of
Default and give them an opportunity to cure their default. After the
Default letter, if they still don’t respond, we have an attorney send them a
final Demand Letter in an attempt to get them to settle without going to
court.
Some lenders cancel the
loan during this preliminary period. However, it is unlikely that they will
agree to monetary awards or damages. It is often necessary to move forward
with a law suit in order to compel them to follow the law.
Finally, if no settlement
is offered, or you are not happy with the terms of their offer, then our
attorneys will file a lawsuit against the lender. The lawsuit includes
several documents that are filed in the court and served on the lender. Many
times THIS will bring the lender to negotiate a settlement. The filing of
the lawsuit concludes Phase One of the TILA process.
If continuing court action
is necessary, our attorneys will carry this into court. At that point you
have entered into Phase Two. There is no way of knowing how quickly or how
many documents it will take to cause the lender or the court to act in your
favor. It is in the lenders best interest to settle quickly.
For those in foreclosure,
some lenders have withdrawn the foreclosure voluntarily after the customer
filed the lawsuit. Some lenders have cancelled the loan without further
action. Every lender is a surprise - there is no way to predict how your
lender will respond. It is wise to plan on pressing forward to a victory.
Remember, when you win, they may have to pay your legal fees.
Court
Will signing a contract with your company require a court
appearance?
It depends entirely on the
lender. Some lenders move quickly to get things resolved. Others take more
time. If the lender does not rescind the loan when they receive the letter,
and they don't respond to the Notice of Default, and the following demand
letter, then you have to file a lawsuit to go forward.
One of the reasons lenders
have become so careless is because people don't like to go to court. The
lenders know this. And, one of the reasons that people don't like to go to
court is because up until now, they have not had support to help them win.
We are changing all that. We are on your team and we have been very
successful in this work.
What do you think the chances are of our case having to go to
court?
That depends upon several
factors. The primary factor is what you want. If you want the loan to be
rescinded, there is a fairly high likelihood that you will have to go to
court to get that. (although some lenders rescind the loan without court)
The first two cases have already been
awarded their homes free and clear by each of the judges. Next the jury must
decide on the monetary award. That will average around one million dollars.
Other cases are moving forward on the court dockets and we will have still
more to report in the coming months.
Each case is unique. It
is wise to PLAN as if you will have to go to court. If that becomes
necessary, then you are prepared.
If there is court action required, will/can you represent me
in court?
We have attorneys that
will go to court for you.
If I go to court, do I have to travel to where the lender
is? Or, can I bring the lawsuit in my local area?
The lawsuit is filed where the property is located.
The Documents
What documents do I need to provide for the TILA process?
We need TWO sets of
your complete loan documents. We want every scrap of paper that was given
to you during the entire loan process. The loan, the Good Faith Estimate
application, and all other documents from the mortgage broker, the
Settlement Statement, as well as the Note and Mortgage or Deed of Trust are
all important. Additionally, each loan usually has many disclosures. The
audit involves all these papers. The law says that certain disclosures are
supposed to be made, on certain forms, and grouped with other documents.
The more documents you provide, the more violations and causes of action we
will be able to identify. There are other documents that will help us.
They are outlined in an attachment to the contract.
If I do not have these documents in my possession, how may I
obtain them?
You can ask the title
company, or the closing office for these documents. DO NOT ASK THE
LENDER for the documents, it defeats the purpose. It is better not to
reveal what you will be doing with the documents, because it is possible for
them to alter documents before giving you a copy.
Do not mix up the
documents you have with the ones you obtain. Do not mix documents from one
source with documents from another source.
You ask for my paperwork from closing. I have a refinance.
So, do you want my paperwork from the refinance or the previous refinance,
or the original loan?
We need the paperwork from
the current refinance, home repair, or home equity loan.
If you are in foreclosure,
we need the Acceleration papers, or the Notice of Default papers, and any
court papers. If the foreclosure is in court and you don't have the papers,
you need to go to the court and obtain these papers. If you are in
bankruptcy, we need those papers.
Who qualifies for the TILA process?
My husband lost his job
and has not been able to find a new position. We've gotten behind in our
payments. Our "lender" is threatening to foreclose. Can you help us?
Yes, we can help. But,
the more time you have to slow down the lenders, the better off you are. If
you are behind on your payments, that constitutes an “Emergency,” and there
is an additional cost involved. If you are close to foreclosure or headed
for a Sheriff's (or Trustee's) sale, that also constitutes an
Emergency. Talk with your consultant and she or he will explain the
pricing.
Is there any customer that cannot be helped by this process?
There are a few
exceptions, but the parameters we are looking for are: A loan, less then
three (3) years old, and either a refinance, home repair, or home equity
loan.
Someone who has commercial
or agricultural real estate or a commercial loan that is not collateralized
by personal assets would be outside the scope of the TILA process.
Another very rare person
(we have not seen that yet) would be that person whose loan papers conform
completely to the laws. If the bank has followed all the regulations
carefully, then our audit will not discover any violations. This borrower
was fully informed according to the law. There is no need for any defense
against this mortgage contract.
Does this process cover second homes, cottages, vacation
condos, rental properties, etc?
Yes, but this is on a case
by case basis. We would have to analyze the loan documents to determine if
there are sufficient causes of action to make it worthwhile. That analysis
is free.
My husband and I are divorced, so is there a general rule
that applies when both are signors on the mortgage papers?
The rule is that the first
signer is generally recognized as the primary borrower. However, there
could be exceptions and we will consider your paperwork on its own merits.
If two people's names
appear on a loan, only the primary borrower needs to do the TILA process
(both people do not need to do it).
Can you help people in Canada?
We can help people who
have loans from a USA lender.
If someone rents out their residence and all the loan
paperwork is in their name, can they still put that property through the
TILA process?
Yes, if it was originally
intended to be their primary residence as indicated on the loan
application.
We just don't have the funds to start your program. Is there
any way that you can help us?
We do have an associate
referral program that could provide you sufficient commissions to get you
into the program
Must the mortgage be current?
No. We can help people at
almost any stage of foreclosure, as well as those who are current in their
payments. However, if you are behind on your payments, that is the
definition of an emergency. Please discuss the requirements for an
emergency case with your consultant.
If you are able to keep
making your payments, we strongly suggest that you do so throughout this
process. If, you do end up in court, you have what is known as “clean
hands.” That puts you in a little stronger position.
How does TILA help someone who IS NOT current in the
payments?
The key differences
between a borrower who is current in their mortgage payment and someone who
is not current, is the urgency of the situation and the amount of work
involved.
Our approach is the same:
we audit the loan paperwork and we work with you to communicate to the
lender that there are violations.
If you are in an urgent
situation, it may require that you skip the letter writing portion of the
communication and jump straight into an existing foreclosure lawsuit or
bankruptcy action. However, everything you do rests upon the audit of the
paperwork and the violations of the consumer protection laws.
What if I'm in foreclosure, or the bank has already sold my
home?
We can still help. If the
bank has sold your home, the buyer must still go through a court action
called an "Unlawful Detainer" or "Forcible Entry and Detainer" (it goes by
different names in various states). The buyer must notify you of this court
action. If we have a spot on our emergency calendar, AND you get us two
complete sets of your loan documents immediately, we can prepare court
documents for you to stop the Unlawful Detainer and repossession of your
home. You must act immediately.
If the sale has not
occurred yet, take action right away so you can prevent this from
happening.
Does it matter how old my loan is?
Yes. Any loan older then
three (3) years old, must be refinanced before applying the TILA process to
it.
What if I’m in foreclosure?
We are really good at
stopping foreclosures. However, we suggest that in that situation you
should prepare for the worst. You might even have to move out. If that
happens, it only means that you have lost a battle but, not the war.
That being said, we have
stopped foreclosures even after the Sheriff’s sale. If you are in this
situation give us a call to see how we can help you.
General Questions
Even if a bank makes "mistakes" in its loan paperwork, is it
ethical to not make the payments that I promised to make?
This is an excellent
question. It is one that everyone needs to thoroughly understand. A full
discussion of the principles of how loans are made is beyond the scope of
this brief paper. We recommend books such as "The Creature From Jekyll
Island" and "Debt Virus" for a deeper understanding of the monetary system
as it exists today. See
