| If you are a practicing attorney: Are you using | | | | Lending laws (TILA) and Real Estate Settlement |
| Defense by Recoupment under 15 U.S.C. 1640(e) | | | | Procedures Act (RESPA); |
| as a strong affirmative defense for your clients? | | | | 2. Especially when there was a mortgage broker |
| If you are a consumer: Have you had your loan | | | | or interim lender involved |
| (from day of application to current) audited by a | | | | 3. The actual "lender" in the transaction was under |
| forensic consumer debt analyst? | | | | same timeframe obligations to make specific |
| I get a fair amount of "conspiracy theory " calls | | | | disclosures to client from the day they received |
| or emails people who would swear that the CIA | | | | application |
| was covertly involved in the loan they signed for | | | | 4. The many servicing abuses which could have |
| and that all measures of fraud occurred against | | | | taken place from day of closing to current |
| them by everyone involved and... you get the | | | | 5. Insufficient amount of certain disclosure |
| point. My first question to this person is always: | | | | violations |
| "Great, so are you prepared for the $15,000+ | | | | 6. Escrow mishandling abuses (I've seen people |
| retainer a good attorney is going to want to | | | | nearly lose their house to a bona fide mistake the |
| spend their time investigating, quantifying, pleading | | | | bank made but wouldn't budge until a good |
| and trying a case like that? Well, you know the | | | | attorney got involved) |
| answer... | | | | 7. The list goes on... |
| Others have read (or have heard) that a loan | | | | Under the TILA civil liability section [15 U.S.C. |
| audit and violations of the TILA can only help you | | | | 1640(e)] regarding violations it says that any |
| if it's a refinance loan on a primary residence in | | | | action under that section may be brought in any |
| the last three (3) years. To have the EXTENDED | | | | United States district court, or in any other court |
| RIGHT TO RESCIND, these conditions must be in | | | | of competent jurisdiction, within one year from |
| place but rescission isn't the only thing that can | | | | the date of the occurrence of the violation. But, |
| help someone in (or in danger of) foreclosure. | | | | that subsection does not bar a person from |
| When it comes to defending yourself against | | | | asserting a violation of this subchapter in an action |
| foreclosure the first order of business is to | | | | to collect the debt which was brought more than |
| establish clear and genuine issues of material fact | | | | one year from the date of the occurrence of the |
| in the case. In a Florida foreclosure defense | | | | violation as a matter of defense by recoupment... |
| strategy, the client wants to quantify these | | | | A consumer can only bring an action for damages |
| genuine issues of material fact in the foreclosure | | | | within one year from the date of closing. |
| case because no judge should ever grant a | | | | However, the consumer is not barred from |
| motion for summary judgment. Why? | | | | bringing a claim as a "matter of defense by |
| In the state of Florida, there is extensive | | | | recoupment" in a foreclosure action because a |
| established law that prevents summary judgment | | | | foreclosure action is an action to collect the debt. |
| from being granted when there are outstanding | | | | (ie. almost all foreclosure complaints are served |
| issues of material fact. Johnson v. Boca Raton | | | | with some level of disclosure that "this is an action |
| Community Hosp., Inc., 985 So.2d 141, Murphy v. | | | | to collect on a debt") however NOT disclosing that |
| Young Men's Christian Association of Lake Wales, | | | | does not necessarily preclude that any such action |
| Inc., 974 So.2d 565. A "material fact," for | | | | is NOT an attempt to collect on the debt.) |
| summary judgment purposes, is a fact that is | | | | Any such quantified claim of a violation of the |
| essential to the resolution of the legal questions | | | | TILA (Truth in Lending Act) from an expert audit |
| raised in the case, Continental Concrete, Inc. v. | | | | report should be brought as an affirmative |
| Lakes at La Paz III Ltd. Partnership, 758 So.2d | | | | defense by the attorney. This is a rock solid issue |
| 1214. | | | | of material fact. No summary judgment. The |
| Successfully defeating summary judgment is a big | | | | lender will have to bring the action all the way |
| score in favor of the consumer and can greatly | | | | through to trial. This should give you much greater |
| improve the chances of obtaining a viable and fair | | | | leverage to obtain a workout. At the very least, |
| workout and thus ultimately, avoiding foreclosure. | | | | this give you/your client much greater time in the |
| So, one area of practice Lane Houk and his team | | | | house and time to try to work something out |
| help consumer attorneys with is by completing a | | | | that works for both parties; something that is |
| forensic loan audit on the client's loan documents | | | | much needed these days because I still see a |
| from the day they applied for that loan through | | | | great deal of servicer abuse/misprepresenations |
| to current day. Why would a foreclosure client | | | | happening every single day. |
| want this done? Let's think about it... | | | | I hope this little insight gives you some ideas on |
| | | | how you can help yourself in a foreclosure case. |
| 1. Often times, the client did not receive proper | | | | If you want more information on forensic loan |
| "pre-closing disclosures" under both Truth in | | | | audit, please call me at (800) 985-4685 ext. |