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Mortgage Underwriting Errors Cost SunTrust

 

Sun Trust BankThe repercussions of the prelude to the 2008 recession continue to be visited on consumers today, especially in the Tampa Bay area where 1 in approximately 400 properties are in foreclosure, according to RealtyTrac.  While it may provide little solace to distressed borrowers, mortgage lenders are also attempting to manage the fallout.

$960 million Settlement

In June, SunTrust Bank agreed to pay over $960 million dollars to the government to settle allegations that it cut corners during its FHA loan approval process.  During an investigation, SunTrust acknowledged it approved FHA loans that did not meet FHA standards.  Even after approving faulty loans, SunTrust then failed to report the loans to FHA and did not even have a system in place to identify whether or not loans complied with FHA guidelines. 

Slightly over half of the settlement funds will be used to assist SunTrust customers who are currently experiencing mortgage difficulty.  A portion of the funds are to be specifically targeted to those who need mortgage modification due to the declining value of their home.   Approximately $468 million of the settlement is a penalty that will be paid directly to the government.  Additionally, under the settlement, SunTrust will be forced to revise its mortgage servicing, foreclosure, and bankruptcy practices.  

Whether you are attempting to obtain a loan modification, seeking a short sale, or being sued for mortgage foreclosure, LeavenLaw can help.  At Leavenlaw, we specialize in helping consumers approach and solve problems.  If you are experiencing mortgage trouble or face losing your home, call LeavenLaw at (727) 327-3328 to setup a free consultation today or visit www.FloridaForeclosureDefense.com

LeavenLaw Sues Debt Buyer in Class Action Lawsuit

Class Action Law SuitPreviously, LeavenLaw wrote about the sheer volume of credit card and debt buyer lawsuits filed in the State of Florida and the problems associated with the documentation that allegedly supports such lawsuits (i.e., bills of sale, assignments, statements, false affidavits, etc.).  In short, companies that buy defaulted credit card accounts in the thousands will then file lawsuits against consumers hoping (and betting) that the vast majority of consumers will never defend the lawsuit.  Instead, a default judgment will be entered against them, allowing the debt buyer to then potentially garnish the consumer's wages or freeze their bank account.  This business practice is knowingly done en masse to obtain these judgments and to ultimately to collect debt.  In the rare circumstances where a consumer hires a lawyer to defend the lawsuit, most of the time, the debt buyer will either dismiss the lawsuit or attempt to settle it pennies on the dollar.  In no circumstance, however, does the debt buyer intend (or have the evidence to) take the case to trial.

Because of these aggressive and unfair practices, LeavevnLaw launched www.FloridaCollectionDefense.com to help consumers fight back against debt buyers.  Apparently, it is working already.  Recently, LeavenLaw filed a consumer class action lawsuit for alleged unlawful debt collection practices against debt buyer CACH, LLC and its attorneys, Federated Law Group, PLLC and its Managing Shareholder, Bryan Manno in the Middle District of Florida, Tampa Division: Yineska Rollin v. CACH, LLC, Federated Law Group, PLLC and Bryan Manno, Case No.: 8:14-cv-1543-EAK-TGW.

Collecting Allegedly Unauthorized Amounts

The Rollin v. CACH, LLC complaint alleges that CACH, LLC and its attorneys attempt to collect debts in an amount that is not authorized by contract or statute, namely a default interest rate after the debt being sued on was written off.  More importantly, CACH, LLC attempts to collect this default, contractual interest rate without bringing an action on the contract.  The consumer's position is that CACH, LLC cannot seek contractual remedies in a Florida debt collection lawsuit without having at least brought an action on the contract.  Ms. Rollin has argued that these communications are made in violation of the FDCPA, 15 U.S.C., Section 1692e(A)(2) and f(1). 

Bad Affidavits

Another typical problem in these debt buyer lawsuits is the affidavits that are relied upon to obtain judgment are facially faulty.  Here is how it goes:  debt buyer's employee (who has never worked for the credit card company) swears under oath that the records of the credit card company are true, accurate and complete and were made in accordance with certain reliable business practices.  How does one do that you ask?  Testify under oath to something that it sounds like they were not a part of let alone witnessed from afar.  Well, that is just it, they can't . . . at least not legitimately: it is hearsay and does not meet the "Business Records" hearsay exception.  Why?  Because in short the person's testimony (i.e., affidavit) is not credible or trustworthy; they have no personal knowledge from which they are testifying, therefore it is irrelevant and not capable of supporting judgment.  There are cases all across the United States that support this principle yet debt buyers continue to file such lawsuits in the thousands.

In Ms. Rollin's case, nothing has changed.  As a result, Ms. Rollin has made the argument that a debt buyer, using an affidavit that they know is incapable of supporting what they say it is in fact supporting, is an unfair or unconscionable method of collecting a debt from a consumer in violation of the FDCPA, 15 U.S.C., Section 1692f.  Ms. Rollin has also argued that CACH, LLC and its attorneys have violated the FDCPA, 15 U.S.C., 1692e by engaging in false and misleading debt collection practices by using the same, allegedly false affidavit. 

LeavenLaw is a law firm dedicated to helping consumers.  If you have been sued by a credit card company or debt buyer and are in need of counsel and assistance, please contact the attorneys at LeavenLaw to schedule a free initial consultation.  The attorneys at LeavenLaw will take the time to sit down with you and go over your challenges.  They will then try to craft a personalized plan to help you get to where you need to be -- and they do all of this either on a reasonable flat fee (with a value-back guarantee) or will do it on a contingency basis.  www.LeavenLaw.com 1-855-Leaven-Law (532-8365).