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USA vs. Bank of America Judgment

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USA vs. Bank of America Judgment in Foreclosure Defense

Attorney Eric Lanigan of Lanigan and Lanigan, discusses the lawsuit by the United States against banks in several states for mortgage misconduct.

I’m Eric Lanigan an attorney with Lanigan and Lanigan in Winter Park which is part of the greater Orlando area. I want to talk for a minute about how to use the case of the United States of America versus Bank of America in foreclosure actions.

A brief explanation of United States versus Bank of America. This is a lawsuit that was brought by the United States and many of the individual states including Florida against Bank of America, Wells Fargo, Citi Mortgage and a few other of the major mortgage lenders and it all revolves around misconduct by these banks. The Robo Signing that you’ve heard about and a lot of other things that were going on in the mortgage foreclosure proce

To watch a video explaining details of this foreclosure defense, visit the the channel,

Judgment Restricts Dual Tracking

Foreclosure or Modification, Not Both

The consent judgment which was signed by all the defendants, in essence they’re agreeing to this judgment and what they’re required to do. Now it’s about a hundred plus pages long and it can be difficult reading. I want to talk about one part of that consent judgment which restricts dual tracking. Dual tracking is something that’s been going on and it’s caught a lot of people and that is where you have two different trains moving down the track at the same time and one is the foreclosure train and the other is the loan modification train.

And we’d have many people that would be in the loan modification activity thinking and assuming that because I’m doing all of this the foreclosure train is not going forward. And then they would find out suddenly that their house was sold. And I had people come in my offices and saying, “well how, how can this happen? I’ve been working on this modification for six months?!”

Banks Not Allowed to Hit Homeowners Twice

Well, the problem is you weren’t working on the foreclosure case and it continued to move down the track. So there were a number of restrictions that were put in this consent order that all of these banks agreed to. And they get somewhat technical depending upon where you are in the case and when you applied for the modification. But in a nutshell what they boil down to is if somebody is actively pursuing a loan modification then the foreclosure activity is supposed to stop. If it hasn’t gone to judgment, it’s not supposed to go to judgment. If it has gone to judgment, it’s not supposed to go to sale. And that’s probably the critical point that it doesn’t go to sale.

We found and I’ve talked to some other lawyers and people in the industry and they have told me the same thing; that there seems to be almost one hundred percent total disregard by the banks of the dual tracking restrictions. It’s something that the homeowner has to affirmatively raise.

Let me give you an example. I was just a couple weeks ago in a pre-trial conference which is where we call it a cattle call. The court brings in maybe 20, 30 or more cases all the lawyers come in at one time, the judge basically goes case by case, “what’s going on?” Sets a trial date. So we came onto one of my cases and right when we started, I commented to the court that the plaintiff in this case was Wells Fargo, my client had applied for a loan modification which was still pending and as soon as I said, “United States versus…” she cut me off and said “I’m not a party to that lawsuit.”

And I paused for a moment and I said, “Well, Judge, I think we’re all parties to that lawsuit. The state of Florida is a plaintiff. You, me, my client, we’re all citizens of the state of Florida. And you remember the judiciary, you work for the state of Florida. So I think we’re all participating in that lawsuit.”

Consent Judgment Used to Disallow Non-Compliance by Banks

Now the consent judgment does say enforcement is restricted to the one federal court in which the action took place. And I commented to the court I said, “I know that enforcement of the judgment is restricted to the Federal court in which the litigation took place. However I’m not asking the court to enforce the judgment in terms of imposing any type of penalty on the bank for its obvious and blatant non-compliance. But what I am going to ask the court to do is to not allow itself to be used as a tool to accomplish that non-compliance.

“And as a judiciary and a part of the government of the state of Florida representing the people of the state of Florida. This court should not be allowed, the court should not allow itself to be used by the bank to blatantly disregard for the consent judgment that was entered into.”

And there was sort of a pause and the judge was trying to think of what to say. And the room was really dead quiet because I think that everybody in the room was thinking, “Ok, what’s the judge going to say about that?”

And after what seemed like an interminable pause which was probably no more than 35 second, 45 seconds, to a minute, the judge said, “OK, I’m going to rollover this pre-trial in this case for 60 days then you can come back and report to me on the status is of the modification.”

So in essence what the judge said is, “You’re right I’m not going to allow my courtroom to be used to blatantly disregard the terms of the consent judgment.

Double Attack on Homeowners No Longer Allowed: Be Aware

Another circumstance where that can come into play is I had another case where the individual, the homeowner came to me and the judgment had already been entered. And the sale was going to take place in maybe another three to four weeks. So what I told the homeowner because her lender was one of the defendants in that case, I said, I gave her the loan modification sort of generic application. I told her I said, go home, fill this out, get this all filled in and bring it back to me tomorrow and we’re going to mail it out certified mail to the lender tomorrow morning. 

So we got that done, we sent it out, I waited about another week and I filed a motion to cancel the sale on the basis that the homeowner had applied for a loan modification and pursuant to the consent judgment, and I quoted the language out of the consent judgment, that the sale should be cancelled.

We went to that hearing and interestingly enough, not only did the judge cancel the sale, he told the bank not to come back to reschedule the sale for at least six months. And the attorney said, “well judge, you could schedule this for 60 days.”

And the judge said, “Well yes, I could, but I’m not going to because you all take forever to do these modifications and I don’t want this case to keep coming back and back and back.” 

Banks’ Consent Judgment Used to Stop Sale of Home 

So the sale was cancelled and put in the order that you’re not to move to reschedule the sale for six months. And so again, the consent judgment was used to stop the sale and force the bank to consider the modification process and hopefully some good will come of that and they’ll never get the sale.

Again, I’m Eric Lanigan, an attorney with Lanigan and Lanigan in Winter Park, Florida. If you have questions about a foreclosure that you’re defending, a Florida foreclosure that you need to defend, or if you are trying to complete a loan modification, consult with an experienced Florida foreclosure attorney. 

Not a Defense to Try Without an Experienced Lawyer

Foreclosure is handled in a Federal Court. This is a complex and difficult defense explained for lawyers and cannot and should not be tried as a layperson. The challenges you face defending a foreclosure without an attorney begin with a judge who gives no special treatment. Consult with Eric Lanigan or Roddy Lanigan to defend your home from foreclosure or to attempt and find out if you qualify for a mortgage workout known as a loan modification. 

Call the office at 407-740-7379. 

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