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Support Brews in Worcester for Big Bank Battle







Wednesday, May 30, 2012

One city councilor’s quest to wean the city off its dependence on big banks has some supporters, and his colleagues aren’t writing off the notion, although they do want more information.  The City Council voted to have a report done to see if the banks are meeting the foreclosure laws and ordered the city manager to research what would be involved in order to move the money to smaller banks.

“I thought it was awesome,” District 4 City Councilor Sarai Rivera said of District 3 Councilor George Russell calling for the city to stop doing business with big banks, most notably Bank of America, through which municipal paychecks are issued. “He’s raising some important questions.”

Stop Using Big Banks

GoLocalWorcester first reported Russell’s suggestion last week that the city cut ties with big banks as long as they continue to ‘decimate’ the city’s neighborhoods with bungled foreclosures. He specifically mentioned Bank of America, through whom the city payroll is administered.

“I’m encouraging the city and businesses, but primarily the city, to stop doing business with these big banks,” Russell said. “Maybe they’ll wake up and realize they should start handling things differently.”

The City Council discussed issue during its meeting Tuesday night.  Russell had an order on the agenda requesting City Manager Michael O’Brien and Chief Financial Officer Tom Zidelis “review the listing of institutions into which they direct municipal deposits to ensure that these same institutions are in full compliance with the City of Worcester protocols for bonding, securing and maintaining foreclosed properties.”

Both Russell and District 1 Councilor Tony Economou attached their names to a similar order on the same agenda, requesting a report on the city’s plan to deal with vacant lots and foreclosed homes.

City in Good Position

Among those in Russell’s court is GoLocalWorcester MINDSETTER™ Grace Ross, a local advocate and former gubernatorial candidate. Like Russell, she said the city should take its business elsewhere, preferably to smaller banks.

“The city’s assets should be moved,” said Ross. “There are some logistics, but they should be moved.”

A supporter of the Worcester Anti-Foreclosure Team and a staff member of the Massachusetts Alliance Against Predatory Lending, Ross said while Russell’s proposal lacked specifics it has its roots in previous efforts.

“Some of us have been floating the idea for awhile,” Ross said. “We believe the city is in a good position to move its money out of the big banks.”

Where O’Brien stands on the issue wasn’t immediately clear. Attempts to reach him for comment were unsuccessful.

Rules Not Obeyed

Ross said there are plenty of reasons to be wary of big banks – and more than enough evidence that the city should turn a cold shoulder to them. She accused them of not properly signing and executing legal documents and not following state foreclosure laws.

“They’ve made it clear if they think they can get away with something, they’re going to,” Ross said.

In extreme cases, she said, area banks have “foreclosed on people while they’re in the middle of negotiations with them.” In other cases, she said, people have been forced out of their homes in the dead of winter by banks that have ordered the removal of heating pipes.

That Russell singled out the Bank of America was not surprising, according to Ross, who said, “BOA has a horrendous track record at all levels, federal and state.”

No Comment from Bank

A woman identifying herself as the branch manager at Bank of America at 365 Main Street in Worcester smiled when told of Russell’s suggestion that the city cut ties with the bank. She said she did not have the time to answer any questions. She declined to provide the name of someone else who might be able to respond to inquiries and said they would not answer any questions.

Ross also mentioned Wells Fargo, an institution about which many people have complained.

“People want to frame this as being one bad player or two,” said Ross. “The problems are spread across all the large banks.”

Councilors Weigh In

District 2 City Councilor Philip Palmieri stopped short of endorsing a move away from doing business with Bank of America and other large lending institutions, saying he’d want to hear “a little more about what (Russell’s) plan is.”

Palmieri said the city already has a plan on dealing with area banks on foreclosures and said he’d like to see a report and see “whether the rubber meets the road.”

At-Large Councilor Konstantina Lukes also didn’t throw cold water on Russell’s proposal, but like Palmieri said she’d want more information before casting a vote. She also questioned the feasibility of divesting all city funds from large banks.

“I always support investing in local banks,” said Lukes. “We have millions of dollars we’re dealing with. I have to know how much we’re investing in what banks. Those decisions are not made lightly. The real issue is can the smaller banks handle what the city has? We all prefer to deal with local banks, but we have to make sure safeguards are in place to protect our investments. We’re talking a lot of money here.”

Ross called Russell’s agenda item a first step, saying, “We want more than a first step. Let’s refine the criteria for what it means to be a responsible financial player in our community.”

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Article source: http://www.golocalworcester.com/news/support-brews-for-big-bank-battle/

Clock running on foreclosure reviews

Last year, 14 large residential mortgage servicers were required by the Federal Reserve, the Office of the Comptroller of the Currency and the Office of Thrift Supervision to retain independent consultants to review their foreclosure actions. This was the result of widespread complaints by consumer advocates and borrowers about deceitful and improper foreclosure practices by some mortgage servicers.

If consultants find fault during the review, then borrowers who suffered financial injury because of errors, misrepresentations or other problems in the foreclosure process may get money or some other remedy.

At the end of last year, a consulting firm acting on behalf of federal bank regulators sent 4.3 million letters to individuals who might be eligible to have their foreclosures reviewed. Through May 17, more than 194,000 people responded, asking for a review. Another 142,000 people have been selected for review because their foreclosures were related to a bankruptcy or the foreclosure might have violated the Servicemembers Civil Relief Act, which provides certain rights to members of the military.

“If people believe they were wrongfully injured by a foreclosure error in 2009 and 2010, they should request a review,” said Bryan Hubbard, a spokesman for the OCC. “They give up no rights by requesting a review.”

To also qualify, the foreclosure had to be on the person’s primary residence and the mortgage servicer had to come from one of 14 participating companies.

If you received a letter, you might have thought, “Why bother?” You might be skeptical that anything will come of it. But don’t lose out on the chance to get some redemption if it turns out that your mortgage servicer did something wrong.

“The review can take several months, and they are very detailed,” Hubbard said.

There’s another bonus to finding out whether you qualify for a review. Requests from eligible borrowers in which a foreclosure sale is imminent will receive priority attention, the OCC has said. But don’t expect too much. You still need to work with your mortgage servicer to determine whether the foreclosure can be prevented. Although asking for a review won’t automatically postpone or stop a foreclosure, at least the extra attention might help.

The review isn’t just for folks whose homes were sold through foreclosure. Consultants will be looking at cases in which homes were slated for foreclosure but the process stopped because payments were brought up to date, the borrower entered a payment plan or modification program, or the home was sold in a short sale or given back to the lender.

But you have to act soon. The deadline for requests to get a review by an independent consultant is July 31.

Additional letters will be sent out early in June, Hubbard said. And to increase awareness of eligibility, the Federal Reserve has put together a short video that can be found on YouTube by searching for “Independent Foreclosure Review PSA.”

Here are some additional things that might have gone wrong in your foreclosure that consultants will examine:

●The mortgage balance was listed incorrectly.

●The foreclosure occurred while someone was waiting for a modification although the person submitted all of the paperwork on time.

●A borrower thinks the mortgage payment and/or the fees that the servicer charged were inaccurate.

The review is free, and there is just one review process. Go to the Web site www.
independentforeclosurereview.
com
for a list of the 14 mortgage servicers and for information about the review and claim process. You can mail your request form or submit it online. To get the form online, you have to click on the link for your servicer. The company you sent your monthly mortgage payments to is your mortgage servicer. If you need help completing the form or if you have questions, call 888-952-9105.

Put your request in. You really have nothing to lose and possibly something to gain.

Readers can write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071, or singletarym@
washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. For previous Color of Money columns, go to postbusiness.com.

Article source: http://www.washingtonpost.com/business/economy/clock-running-on-foreclosure-reviews/2012/05/29/gJQAqzZ5zU_story.html

Massachusetts Attorney General Establishes Program to Assist Veterans Avoid …

Foreclose_Signage

Responding to an increase in the number of calls from veterans having problems with their mortgages, Massachusetts Attorney General Martha Coakley has announced an initiative designed to help military families prevent foreclosure through the Attorney General’s HomeCorps program. In collaboration with the Massachusetts Department of Veterans Services, the AG’s HomeCorps program will work with Veterans Service Officers (VSO) throughout the Commonwealth to assist veterans and service members in danger of foreclosure. The AG has established a HomeCorps loan modification specialist to serve as a direct line of referral from the VSOs and to work directly with veterans looking to sustain their mortgages.

“Memorial Day is a reminder of the ultimate sacrifice that our military men and women made to preserve our freedom,” AG Coakley said. “We are pleased to expand our existing Veterans’ Services program to incorporate an initiative to help military families avoid foreclosure and stay in their homes.”

HomeCorps currently has more than 120 active cases involving veterans or service members seeking help with home mortgages, either to obtain loan modifications from loan servicers and banks or with foreclosure avoidance strategies. HomeCorps recommends that anyone in trouble with their mortgage seek help as soon as possible, and that former or current military service members may be able to benefit from additional federal resources that are specifically designed to help them avoid foreclosure.

Additionally, last October the AG’s Office created a task force to ensure coordination amongst its wide-ranging veterans support effort from the consumer hotline to health care and civil rights. Since then, the AG’s Office has updated its Veterans’ Resource Guide, a comprehensive resource that highlights the many special protections and benefits that are available to veterans. The AG’s guide offers comprehensive information regarding healthcare, education, employment and housing benefits.

View the discussion thread.

Article source: http://nationalmortgageprofessional.com/news29808/massachusetts-attorney-general-established-program-assist-veterans-avoid-foreclosure

New Solution From ConsumerEducationOnline.com Helps Homeowners Avoid … – SYS


TAMPA, FL — (Marketwire) — 05/30/12 — ConsumerEducationOnline.com announces they will be offering their software, Mortgage Reduction, for $1 during the month of June in honor of “National Homeowner Appreciation Month.” The company’s aim is to create a national outreach effort to assist struggling homeowners in saving their homes. The software, which normally retails for $197.00, helps homeowners avoid foreclosure by giving them an automated way to apply for a loan modification without going through an expensive middleman.

“The biggest problem people face when trying to apply for a loan modification is not understanding the process from the lender’s side,” says Stephfan Nurse, CEO of ConsumerEducationOnline.com. “Banks are receiving thousands of incomplete or inaccurate modification application packages. These incomplete applications are causing lenders to deny thousands of homeowners that would otherwise be approved for a loan modification. Mortgage Reduction brings the homeowner and the lender to the same table, finally, speaking the same language,” says Nurse.

Nurse believes that the HAMP and Traditional modification programs are effective and can save millions of homes from foreclosure if the homeowner is provided with the right education on how to take advantage of them. “No one has taken the time to provide the proper tools and education for the homeowner so they can properly help themselves. Instead, most tools, software and education have been geared toward helping train bank representatives and third parties. This has left the homeowner in a dependent situation,” says Nurse.

Homeowners can download and use the software for free by going to www.ConsumerEducationOnline.com. Then, they can unlock the software for $1 to submit their completed package to their lender. The software will also provide them access to the Journey System, a daily guide that lets the homeowner know where their package is in the process. “Loan modifications are very complex for even someone who has been in the industry for years. Lenders and third parties use software to simplify the process for themselves and even they still make errors. How could a homeowner be expected to do this successfully without some type of software, as well?” says Nurse.

About Stephfan Nurse:

Stephfan Nurse is an expert in loan modifications and has been in the modification industry since 2009. He has been a frequent invited guest speaker on radio and television networks discussing loan modifcations. In 2010, he founded ConsumerEducationOnline.com which has helped thousands of struggling homeowners by offering free resources and education. Mortgage Reduction was launched nationally in May 2012, following a successful run in a local test market in 2010.

Embedded Video Available

Embedded Video Available: http://www2.marketwire.com/mw/frame_mw?attachid=1996734

Add to Digg Bookmark with del.icio.us Add to Newsvine

Media Contact:

Stephfan Nurse
Email Contact
(813) 964-7826

Article source: http://www.sys-con.com/node/2286714

New Solution From ConsumerEducationOnline.com Helps Homeowners Avoid …


TAMPA, FL, May 30, 2012 (MARKETWIRE via COMTEX) –
ConsumerEducationOnline.com announces they will be offering their
software, Mortgage Reduction, for $1 during the month of June in
honor of “National Homeowner Appreciation Month.” The company’s aim
is to create a national outreach effort to assist struggling
homeowners in saving their homes. The software, which normally
retails for $197.00, helps homeowners avoid foreclosure by giving
them an automated way to apply for a loan modification without going
through an expensive middleman.

“The biggest problem people face when trying to apply for a loan
modification is not understanding the process from the lender’s
side,” says Stephfan Nurse, CEO of ConsumerEducationOnline.com.
“Banks are receiving thousands of incomplete or inaccurate
modification application packages. These incomplete applications are
causing lenders to deny thousands of homeowners that would otherwise
be approved for a loan modification. Mortgage Reduction brings the
homeowner and the lender to the same table, finally, speaking the
same language,” says Nurse.

Nurse believes that the HAMP and Traditional modification programs
are effective and can save millions of homes from foreclosure if the
homeowner is provided with the right education on how to take
advantage of them. “No one has taken the time to provide the proper
tools and education for the homeowner so they can properly help
themselves. Instead, most tools, software and education have been
geared toward helping train bank representatives and third parties.
This has left the homeowner in a dependent situation,” says Nurse.

Homeowners can download and use the software for free by going to

www.ConsumerEducationOnline.com . Then, they can unlock the software
for $1 to submit their completed package to their lender. The
software will also provide them access to the Journey System, a daily
guide that lets the homeowner know where their package is in the
process. “Loan modifications are very complex for even someone who
has been in the industry for years. Lenders and third parties use
software to simplify the process for themselves and even they still
make errors. How could a homeowner be expected to do this
successfully without some type of software, as well?” says Nurse.

About Stephfan Nurse:

Stephfan Nurse is an expert in loan modifications and has been in the
modification industry since 2009. He has been a frequent invited
guest speaker on radio and television networks discussing loan
modifcations. In 2010, he founded ConsumerEducationOnline.com which
has helped thousands of struggling homeowners by offering free
resources and education. Mortgage Reduction was launched nationally
in May 2012, following a successful run in a local test market in
2010.

Embedded Video Available:

http://www2.marketwire.com/mw/frame_mw?attachid=1996734


        Media Contact:

        Stephfan Nurse
        Email Contact
        (813) 964-7826

SOURCE: ConsumerEducationOnline.com


http://www2.marketwire.com/mw/emailprcntct?id=C9882FAC06EC4186

Copyright 2012 Marketwire, Inc., All rights reserved.

Article source: http://www.marketwatch.com/story/new-solution-from-consumereducationonlinecom-helps-homeowners-avoid-foreclosure-during-national-homeownership-month-2012-05-30

Woodland family facing eviction had notice upheld by courts

Local, state and federal courts upheld eviction notices for an east Woodland family prior to a bankruptcy stay filed by the homeowners last week.

The Ponce family was set to be evicted from their foreclosed home at 1543 Paradise Valley Drive Tuesday. Heriberto and Alma Ponce have four children, ages 4 to 17.

Court documents — around five inches thick — reveal that three levels of courts upheld the property’s new owner, Residential Investments, LLC, unlawful detainee claims.

The most recent, filed April 11, said the U.S. Bankruptcy Court in the Eastern District (Sacramento region) granted Residential Investments “relief from the automatic stay of the bankruptcy code pursuant to Alma Delia Ponce’s bankruptcy case and vacated all automatic stays with respect to the property at 1543 Paradise Valley Drive.”

The 14-day waiting period under the bankruptcy rule was also waived.

The bankruptcy filed May 21, allowing for the present stay, was for Heriberto.

“It’s not going to stop here,” Alma said Friday. “I have to make everyone aware of what happened and I don’t want any other families to go through what I went through.”

To that end, Alma spoke at the state capitol Thursday. She told her story to the California Foreclosure Crisis Loan Modification Program and Dual Tracking Committee.

A “Homeowner’s Bill of Rights” is currently working its way through legislation.

Alma said she also plans on filing a cease and desist order.

Prior to

the latest eviction notice, the Ponces and co-signers, Antonio and Imelda Aranda, filed a writ of mandamus, or an order to a lower court, on March 5. The statement declared, “what is mine is mine, and what is yours is yours, and it is my wish to have all that is mine now. We leave the paperwork to you.”

In the writ, the homeowners, legally representing themselves, claim they are answerable only to God.

They also state that any claim now open is void on its face and shall be immediately discharged.

“Lawful officers are commanded to protect us and our property as one of the creator’s people, a woman created in his image,” the document reads. “Your promissory oath has bound your soul to eternal damnation if you should ever break God Creator’s laws.”

Another excerpt from the writ of mandamus reads: “Failure to immediately carry out any verbal or written lawful orders from this day forward is your acknowledgment of breaking creator God’s law/s, and an indication you are incompetent and not worthy for holding your office. In which case we mandate the ordinary power as necessary to see our lawful orders are followed.”

The Ponces contend that a loan modification paperwork snafu is to blame for Wells Fargo allegedly unlawfully foreclosing on their property last January.

Alma told The Democrat she and her husband were under the impression they were negotiating a mortgage modification through the federal Home Affordable Modification Program, when a missing signature from Heriberto led to Wells Fargo foreclosing on their home instead.

This is known as “dual tracking,” wherein a bank starts the modification process and the foreclosure at the same time.

Heriberto Ponce, along with co-signers Antonio Aranda and Imelda Aranda, bought the property at 1543 Paradise Valley Drive on Feb. 11, 2008. Wells Fargo transferred the deed to Consumer Solutions, LLC, on Nov. 19, 2010.

The foreclosure deed was subsequently sold to Residential Investments, on March 8, 2011 for $168,000. The unpaid debt on the home at that time was $318,693.08.

Attorneys for Residential Investments served Heriberto Ponce, who is listed as “an unmarried man” on official documents, and the co-signers a notice to vacate the property on March 22, 2011. By April 1, 2011 they filed a complaint in the unlawful detainee case.

According to Alma, she and her husband had made three modified loan payments of around $1,500, in the first cycle of the HAMP contract, prior to Wells Fargo transferring the deed.

Wells Fargo told them to stop making payments, Alma said, as they would have to re-apply for HAMP because Heriberto’s signature was not on the second cycle of paperwork. Alma said the next time they tried to make a payment, it was rejected because Wells Fargo no longer owned the loan.

Calls to Wells Fargo representatives and Yolo County Sheriff’s deputies for a comment were not returned by print deadline Friday.

A notice of stay proceedings was filed Monday, May 21, citing bankruptcy, allowing the Ponces to stay in their home. The stay is valid until a motion is filed in court by Residential Investments to lift the stay.

Follow Elizabeth Kalfsbeek at twitter.com/woodlandbeat

Article source: http://www.dailydemocrat.com/news/ci_20731269/woodland-family-facing-eviction-had-notice-upheld-by

Rating Obama’s response to the foreclosure crisis

By Molly Moorhead
Published on Monday, May 28th, 2012 at 12:21 p.m.

Related rulings:

Mostly True

Says Obama broke his promise to help homeowners facing foreclosure.

Crossroads GPS, Wednesday, May 16th, 2012.

Ruling: Mostly True | Details

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As the economic collapse began to threaten homeowners, presidential candidate Barack Obama vowed to come to their aid.

“We must help the millions of homeowners facing foreclosure,” he said on the campaign trail in June 2008. His plan called for changes in bankruptcy laws, a crackdown on predatory and fraudulent lenders and a $10 billion fund to help homeowners avoid foreclosure.

With Obama seeking re-election in 2012, his record on the foreclosure crisis is under attack. The Republican group Crossroads GPS said in a recent television ad that Obama broke his promise to help struggling homeowners. The ad shows Obama saying he would help them and then stamps “BROKEN” on the screen.

PolitiFact examined the Crossroads claim and found that, indeed, Obama has had limited success with his plans to ease the mortgage crisis.

Read our full report here.

Article source: http://www.politifact.com/truth-o-meter/article/2012/may/28/rating-obamas-response-foreclosure-crisis/

One United and Local Community Fight for Historic Boston Church

Protest outside OneUnited Bank branch in Grove Hall*The historic Charles Street AME Church’s lender argued in court today that the Roxbury congregation can’t avoid foreclosure by filing bankruptcy because it’s just an arm of the cash-rich African Methodist Episcopal movement, says the Boston Herald.

“Whose property is it anyway?” lawyer Lawrence Edelman, who represents Boston-based OneUnited Bank, asked in a hearing before U.S. Bankruptcy Court Judge Frank Bailey. “Very clearly, the beneficial interest in held by the greater church — the African Methodist Episcopal Church.”

The 194-year-old Charles Street congregation filed Chapter 11 in March to prevent OneUnited from seizing the church through a foreclosure auction.

Charles Street missed a $1.1 million “balloon” mortgage payment on the building in December, but has been locked in legal disputes with the bank over loans for years.

The church has proposed repaying the $1.1 million over the next three decades as part of a bankruptcy restructuring.

But OneUnited has asked Bailey to throw out the case because it believes the church is just a unit of the AME movement’s First District, which the bank claims has millions in assets.

Read more here.

 

Article source: http://www.eurweb.com/2012/05/one-united-and-local-community-fight-for-historic-boston-church/

Arizona Wants to Take the Money and Run

     PHOENIX (CN) – Homeowners asked a Superior Court judge to stop the Arizona Legislature from dumping more than half of the state’s $97 million foreclosure settlement into the state’s General Fund, rather than using it to help distressed homeowners, as intended.
     The Legislature on May 1 passed a general appropriations bill, Senate Bill 1523, directing Attorney General Tom Horne “to place $50 million of the settlement funds, more than half of the funds that are to be deposited into court ordered trust fund, into the state’s general fund,” plaintiffs Joseph Morones and Elvira Hernandez say in Maricopa County Court.
     Morones and Hernandez – both at risk of losing their homes to foreclosure – say that if “this transfer occurs, the settlement funds in the court-ordered trust fund will not be used for the designated purposes and distressed Arizona homeowners will not receive the assistance they need to be able to stay in their homes and avoid foreclosure.”
     In March, “Arizona joined 48 other states and the federal government to sue five major loan servicers and financial institutions for misconduct related to their origination and servicing of single family residential mortgages,” according to the complaint. Horne was to “deposit the settlement funds into a court-ordered trust fund and the principal and interest from that fund can only be used for designated purposes,” the plaintiffs say.
     SB 1523 states that the $50 million is to be used to “compensate the state for costs resulting from the alleged unlawful conduct” of Ally/GMAC Mortgage, Bank of America, CitiMortgage, JPMorgan Chase Bank, and Wells Fargo Bank – the five banks named in the federal lawsuit.
     The plaintiffs seek declaratory and injunctive relief to stop Horne and Treasurer Doug Ducey “from taking any action to transfer the settlement funds from the court ordered trust fund into the state’s general fund and from using the court ordered trust funds for purposes not designated in the consent judgments.”
     They are represented by Timothy Hogan of the Arizona Center for Law in the Public Interest. 

Article source: http://www.courthousenews.com/2012/05/29/46879.htm

Texas Company Sues Homeowners With Foreclosed Second Mortgages

Texas Company Sues Homeowners With Foreclosed Second Mortgages

iStockphoto/Thinkstock(SUNNYVALE, Calif.) — Ahmed Abdelfatta, a car salesman in Sunnyvale, Calif., bought a 1,170-square-foot home for $675,000 in 2005. His mortgage was about $540,000, and he took out a second mortgage of $135,000 to cover the down payment.

Two years later, Abdelfattah, now 52, was laid off and could no longer make his house payments. The bank foreclosed on his home.

After a house has been sold in foreclosure, according to California law, owners with loans like Abdelfattah’s are protected from being pursued for any other debts on the same property. But Abdelfattah started receiving letters from Heritage Pacific Financial, a debt-collection and consolidation agency in Plano, Texas, that he’d never heard of. The company demanded he pay back the second mortgage.

“They said, ‘You owe us this money.’ I said, ‘You know that must be a joke because the house went in foreclosure,’” Abdelfattah told ABC affiliate KGO in San Francisco. “When I didn’t respond to them, they started calling me and calling me. They say, ‘You have to pay us.’ And they got my wife’s cellphone. They start calling everybody. They called my neighbor.”

Although a judge has since dismissed Abdelfattah’s case, he is still unsettled by the experience. “I couldn’t sleep at night, being accused of fraud,” he told KGO.

And his credit rating is still negatively affected by Heritage Pacific’s claim.

Heritage Pacific is run by Chris and Ben Ganter, identical twin brothers who starred in “PayDirt,” a reality-TV show about making money in the Dallas-Fort Worth real estate market.

When the market tanked, they started their company in 2009. Since then, they have purchased about 40,000 second-lien mortgage notes across the country, including California.

“Heritage Pacific Financial buys mixed mortgage pools from other secondary-market participants,” said Ben Ganter, who runs Heritage’s legal department. “The mix consists of mortgage loans prior to foreclosure and post-foreclosure.”

A large portion of their business involves suing homeowners who have failed to repay their second mortgage loans, even after the bank has foreclosed on their homes. Abdelfattah was one such case: In May 2010, Heritage Pacific named him in a lawsuit that claimed he had used fraud to obtain a second mortgage, California Watch.org reported.

Ganter says California law allows Heritage Pacific to collect on second mortgages where they can prove borrowers committed fraud. “We are suing people for mortgage fraud,” he said. “They lied about how much money they made, they bought multiple properties and when they failed to make money, they walked away from the property.”

He added, “For all the homeowners who honestly obtained their mortgages and honestly lost their homes, how do you think they would feel knowing that people can buy houses, as investments or personal residences, lie about their income, their intention to live in the house as a primary residence, their employment and-or savings, their intention to pay back the loan, and they can walk away from that house without being held financially responsible to anyone?”

Attorneys for people who are counter-suing argue otherwise. “They must have a business model in which they believe they can make a profit from pursuing people on debts that they’ve probably purchased for pennies on the dollar,” said Gary Neustadter, a Santa Clara University law professor representing three people being sued by Heritage Pacific in bankruptcy court.

“Their objective is to collect money, and they’re trying to collect as much as they can as fast as they can,” said Will Kennedy, a consumer law attorney in Santa Clara, Calif., who is representing Abdelfattah and parties involved in a class-action lawsuit against Heritage Pacific. “They only sue on second mortgages, which range from $70,000 to $150,000. Twenty percent of that is a lot of money. They get these loans very cheap, so they only have to collect a little bit to make money.”

Kennedy argues that most of the mortgage applications were legitimate, and that the only reason homeowners stopped paying their debts was because they lost their jobs and had no income. He also maintains that the bulk of the original mortgage applications were signed by brokers who lied.

And he argues that Heritage Pacific’s lawsuits against people with second-rate mortgage debts of less than $150,000 are illegal under California law. “Legally, you can only sue for fraud if the amount is more than $300,000,” Kennedy said.

(A Santa Clara County Superior Court judge threw out Heritage Pacific’s claim against Abdelfattah in March because the alleged fraud involved a loan for less than $150,000.)

Heritage Pacific does send letters to borrowers, offering to stop pestering them if they pay back a portion of the original loan. But it has also filed more than 220 bankruptcy cases in federal courts in California, including a claim against Oscar Trejo, a San Jose resident who invested in properties and later lost them all in foreclosures.

Shortly before he expected to exit bankruptcy in November 2011, Trejo received a letter from Heritage Pacific saying it had asked a bankruptcy judge not to erase its $88,800 claim against him. The company alleged that he had overstated his monthly income. A judge later ruled that that while Trejo didn’t make the $9,500 a month he said he did, the lender had “ignored obvious problems” with Trejo’s loan application and couldn’t block the discharge of his $88,800 debt, CaliforniaWatch.org reported.

Heritage Pacific has appealed that ruling to a Bankruptcy Appellate Panel, arguing that the lender’s reliance on Trejo’s undocumented assertions reflected “the custom and habit of the mortgage industry at the time.”

Trejo’s countersuit against Heritage Pacific is scheduled for a jury trial in July.

Copyright 2012 ABC News Radio

Article source: http://www.kvor.com/rssItem.asp?feedid=114&itemid=29855046