April 2, 2008
Foreclosure Practices in North Georgia Come Under Scrutiny
The New York Times published an investigative report on March 30, 2007 entitled Foreclosure Machine Thrives on Woes. The article addresses what has become a growing problem in bankruptcy cases:
- out of control fees and costs added to mortgage loan balances
- failure of mortgage companies to properly account for payments
- refusal or failure of mortgage companies and their counsel to resolve disputes amicably
The Times tells the story of a Georgia couple - the Atchleys - who filed Chapter 13 and paid their mortgage but found themselves on the receiving end of multiple motions for relief asserting that mortgage payments had been made. In addition to the stress and cost of dealing with these inaccurate motions (which would be withdrawn at the last minute), the Atchley's discovered that their payoff balance was being adjusted higher and higher with questionably fees and costs. The Atchleys eventually sold their house but now the United States Trustee has sued Countrywide claiming that its pattern of conduct was an abuse of the bankruptcy system.
The Atchleys decided to sell their home, and contend that they lost over $20,000 in equity. I have seen similar cases in my own practice. One case in particular comes to mind. My client filed bankruptcy to stop a property tax sale, and subsequently fell behind in her ongoing mortgage payments. She then decided to sell her condo (there was significant equity), the closing attorney gave her a payoff figure that seemed extremely high. I looked at the payment ledger and I saw overcharges and double billing. One item showed a charge of $650 as attorney's fees arising from a Motion for Relief. However the Order on the Motion for Relief provided for only $550 in attorney's fees and my client had already paid that fee directly when she cured her post petition arrearage. There was also a $2,500 "analysis charge" that no one could explain.
While Chapter 13 remains the only option to stop a foreclosure, you should realize that there is a good likelihood that if you file, your payoff balance will go up and that you may have limited recourse to challenge these charges.
Thanks to my colleagues at Clark and Washington for bringing the New York Times article to my attention.
Filed under Foreclosure issues, Georgia Bankruptcy by Jonathan
Comments on Foreclosure Practices in North Georgia Come Under Scrutiny »
I am a realtor in Sacramento whose income has gone down to 0 as a result of the massive predatory lending which all of the lenders have participated. There unwillingness to deal with the owners in the subprime market when the loans were to reset and the spread to Alt A which led to massive foreclosures and a chilling effect on the housing market, massive layoff in related businesses, massive writedowns in the value of houses has done financial injury to me and has affected my ability to repay my mortgage. My lender, Wachovia Bank, participated in the subprime and Alt A market with there Stated Income, Stated Asset products. They wilfully blinded themselves to the risk. They are now at my door ready to foreclose on my home most likely through a non judicial foreclosure which is most likely unconstitutional since it does not afford me procedural due process. The California foreclosure law does state that this proceeding is without any court involvement. There is a federal remedy 42 US 1983 that affects any person who uses a state law, ordinance, etc to deprive a citizen of any right protected such as property would be liable in an action at law, suit in equity from such a deprivation. Moreover, could I claim that the wrongdoing of Wachovia sufficient to invoke the affirmative defense of "unclean hands" in a judicial foreclosure proceeding? Also, there is a class action lawsuit against Wachovia, MANDRIGUES V WORLD SAVINGS, INC., AND wACHOVIA MORTGAGE CORPORATION, C07 04497 in which I am an un-named plaintiff involving violations of TILA. If you email me I will send you a copy of the lawsuit.
Yours truly,
Reuben Nieves
916 247 6260.