37. Specifically, the relevant nineteen representations and warranties were breached
through a variety of loan, lien and collateral deficiencies, as follows:
(2) twenty-one of the loans were actually “high cost” or otherwise in
violation of predatory lending laws (the “High Cost Loans”);
(4) several of the loans either were or were about to become the subject of
litigation because they are or were subject to undisclosed infirmities
including Truth in Lending Act violations, unreleased mortgages,
fraudulent origination, and/or violations of local laws;
(c) Section 7.02 (iv), which requires the property to be improved by a residential
dwelling, was breached by the transfer of AHL Loan #13460126 (the “Tobacco
Loan”), which was secured by a property that did not have a residential dwelling
at the time of sale.
(d) Section 7.02 (vi), which requires that the loan is not subject to any right of
rescission, was breached by the sale of AHL Loan #408278660 (the “Bouwman
Loan”), AHL Loan #602219937 (the “Luft Loan”), AHL Loan #8883207271 (the
“Dodd Loan”), and AHL Loan #s 701300029, 701300030 (the “Collinge Loan”),
which are subject to borrowers’ claims seeking rescission of the loans.
(f) Section 7.02 (ix), which requires compliance with, among other things, all
federal, state or local law including usury, truth in lending and all predatory and
abusive lending laws, has been breached by the Bouwman Loan; the Luft Loan;
AHL Loan #609146047 (the “Donnelly Loan”); AHL Loan #8889555358 (the
“Phillips Loan”); AHL Loan #508257891 (the “McDevitt Loan”); the Dodd Loan;
AHL Loan #510170527 (the “Craft Loan”); and the Collinge Loan. The
borrowers of these loans have asserted a variety of claims including violations of
the Truth in Lending Act, closing practices and fees that violate applicable state
law, and fraudulent loan origination. In addition, each of the High Cost Loans is
in breach of this provision as well.
(j) Section 7.02 (xxii), which requires that the origination, servicing and
collection practices used by Accredited have been legal, proper, prudent and
customary in the mortgage origination and servicing industry, has been breached
by the Bouwman Loan, the Donnelly Loan, the Phillips Loan, the Luft Loan, the
McDevitt Loan, the Dodd Loan, the Craft Loan, and the Collinge Loan, in which
the borrowers have alleged improper origination and/or disclosures at closing.
(n) Section 7.02 (xxx), which requires that there has been no error, omission,
misrepresentation, negligence, fraud or similar occurrence with respect to
origination of a Mortgage Loan, has been breached by the Bouwman Loan, the
Donnelly Loan, the Phillips Loan, the Luft Loan, the McDevitt Loan, the Dodd
Loan, the Craft Loan, and the Collinge Loan, which all include allegations of
Truth in Lending Act violations, state law violations and otherwise fraudulent
and/or improper origination.
(p) Section 7.02 (xliii), which requires that the Mortgage Loan is in compliance
with all requirements set forth in the related Confirmation, and the characteristics
of the related Mortgage Loan Package as set forth in the related Confirmation are
true and correct, has been breached by the REO Properties, the Sixteen
Extinguished Liens, the High Cost Loans, the Substituted Loans, the Bouwman
Loan, the Donnelly Loan, the Phillips Loan, the Luft Loan, the McDevitt Loan,
the Dodd Loan, the Craft Loan, the Collinge Loan and AHL Loan #s 111076102,
8884798153, and 511011395, because they all fail to meet the mortgage loan pool
characteristics for the reasons detailed herein, in violation of Paragraph 17 of the
Confirmation Letter, which requires that the loans will substantially conform to
the mortgage loan pool characteristics as set forth in the Data File, and Paragraph
18 of the Confirmation Letter, which expressly states that “[n]o loan substitutions
are allowed without the Purchaser’s explicit approval.”
Missing and Materially Deficient Document Transfer
39. Citigroup’s efforts to determine which of the Assets in the Mortgage Loan Pool
violate the Agreements is complicated by missing and materially deficient documentation which
accompanied Accredited’s transfer of a great many of the Assets in the Mortgage Loan Pool. A
list of such documents is annexed to this First Amended Complaint as Exhibit 1 and
demonstrates that many of the documents – 9,286 in all – included in the Asset files transferred
with the Assets to Citigroup are missing or defective, placing Accredited in breach of
representations and warranties found in Section 7.01 (vii) and 7.02 of the Loan Purchase
Agreement. Among the types of important documents that are completely missing are title
policies, mortgage notes and recorded mortgages. Additionally, many notes have missing and
incorrect information. A total of 6,733 Assets are impaired by missing, incorrect, or defective
documentation, as more particularly described on the attached Exhibit 1.
BANKRUPTCY BOOT CAMP TRAINED ATTORNEYS FAILED TO
PRESENT AFFIRMATIVE OR DEFENSIVE CLAIMS DURING
BORROWER BANKRUPTCY. AFTER LOAN AUDIT AND SECURITIZATION AUDIT OCWEN OFFERED A LOAN MOD BUT BORROWER CHOSE TO SUE.
In a caution filled tale filled with caution and one borrower’s woes, even when attorneys who are supposed to be trained by the experts are handed a full loan audit and securitization audit, they may refuse to present it and the borrower suffers. After an last minute intervention, OCWEN does offer the borrower a loan mod, but the borrower found a new attorney and pursued litigation instead. The case is still pending.
NATIONAL FORECLOSURE DEFENSE ATTORNEY “QUITS” WHEN FORECLOSURE NOTICE ARRIVES AFTER TAKING MONEY TO DEFEND, NEVER CONDUCTING A LOAN AUDIT, AND NEVER BRINGING BORROWER AFFIRMATIVE CLAIMS. I AM CALLED UPON TO DO AN EMERGENCY LOAN AUDIT, AND FILED AN AFFIDAVIT OF MY FINDINGS. BORROWER IS STRUGGLING TO FIGHT BACK PRO SE AFTER LAWYER ABANDONED THEM.
Early on in this case I was asked to perform a securitization audit by the attorney to prove insurances existed which resulted in the homeowners not having to make payments into the registry of the Court while the case was pending. That was successful and no payments were required. But the attorney never did any loan audit or asked for one, and only pursued the produce the note action. This strategy is not working in many states, and I feel it is indefensible that an attorney would not do a loan audit and only seek that strategy. It is even worse when the borrower has claims but statute of limitations is running. This is another cautionary tale. Beware of an attorney who asks for monthly fees( and sometimes tells you not to make your payments at the same time) or otherwise pretends to be defending a foreclosure, but by the time the foreclosure notice arrives, you are out of money and they quit.
In an even more bizarre twist to this story, the Judge in this case was Judge CAMP who was arrested by the FBI on drug and firearm charges while using the services of a prostitute.
CHECK BACK AS I WILL CONTINUE TO POST CASES I FIND INTERESTING AND INFORMATIVE.