An article was recently posted on 1/16/14 in the Sacramento Business Journal after an interview by Ben van der Meer with Managing Partner, Stephen Foondos, about wrongful foreclosures.

You can find the original article here.

Roseville attorney disputes most California foreclosures

Thursday, January 16, 2014, 5:42am PST

Ben van der Meer

Sacramento Business Journal

Though the days of peak foreclosures are long gone, a Roseville attorney who has in recent years specialized in helping foreclosed homeowners said he thinks thousands of such cases could be getting a new life, after a ruling last year in a Court of Appeal of California.

Stephen Foondos of the United Law Center said the case, Glaski v. Bank of America, suggests banks servicing home loans and trusts in which those loans were bundled erred in the timing of transferring a deed of trust connected to a home.

When the deed is filed is critical, he said, because it’s connected to beginning a foreclosure action.

“The banks kept the loans on the books to make their bottom lines look better,” said Foondos, who began taking foreclosure cases pro bono after running into hassles when he tried to renegotiate his own mortgage. “And now the banks recognize the potential here for people to come back and sue for wrongful foreclosure.”

In the Glaski case, Fresno County resident Thomas Glaski bought a home in Fresno for $812,000 in July 2005, including an adjustable-rate loan from Washington Mutual.

After an unsuccessful attempt to renegotiate the mortgage in 2008, according to court records, Glaski filed a civil suit and discovered the deed of trust for the home wasn’t transferred until that year. Also in 2008, JPMorgan Chase was named as a receiver for Washington Mutual during the severe economic downturn in the second half of the year.

According to the ruling, the assignment of the deed of trust fell outside a 90-day window when it had to be assigned to a specific trust after the loan was created three years earlier.

The house ultimately was foreclosed on, and Bank of America was named in the suit because it ultimately came to own the home.

Foondos said based on the number of mortgages rolled into trusts during the housing boom of the last decade, he believes as many as 1.2 million of the 1.7 million subsequent foreclosures in the state could be affected.

Representatives for both Bank of America and JPMorgan Chase said they had no comment on the case. Foondos said defendants haven’t appealed in the Glaski case because they’re afraid of the ruling being upheld and drawing more attention to the case.

However, those familiar with the case noted other courts haven’t agreed with it.

In Apostol v. Citimortgage Inc., a case in U.S. District Court, Northern District of California, a judge ruled despite the plaintiff’s attempt to cite Glaski, it represents a minority view.

“Even assuming that the subsequent transfers of the note were invalid, the court nonetheless concluded that plaintiff is not the victim of such invalid transfers because her obligations under the note remained unchanged,” U.S. District Judge William Orrick wrote in his ruling, over a foreclosure suit in Gilroy. “Instead, the true victim may be an entity or individual who believes it has a present beneficial interest in the promissory note and may suffer the unauthorized loss of their interest in the note.”

Rulings from other federal cases similarly suggested the Glaski ruling was out of bounds, though Foondos said he’s concentrated on cases in state courts and hopes to eventually get laws changed at both levels to give a homeowner more leverage.

Foondos, who said he continues to take new clients and often wins settlements, said he understands many clients would rather leave the foreclosure meltdown and its trying emotional nature behind them.

“The fact is that people have an obligation as citizens, when a civil wrong is committed, to enforce the punishment of that wrong,” he said. “I feel there was a civil wrong here. If we set a precedent, we can change that.”

You can find the original release HERE.

United Law Center Leading Charge to Fight Mortgage Banks for Wrongful Foreclosure, Averaging Six Figure Settlements

Thursday, February 13, 2014

PR Web

The foreclosure crisis has cost California government and homeowners $625 billion since 2008. Since 2008, United Law Center, PLC (“ULC”), the law firm leading the charge against wrongful foreclosure and title fraud litigation in California, has been fighting for homeowners forced into bad modifications or wrongfully foreclosed upon by their lender. Thanks to a new groundbreaking case, Glaski v. Bank of America (5th Dist. Ct. App. No. F064556), ULC is able to use this powerful case law to help thousands of Calif. homeowners fight back against their mortgage lender, and win. Since Glaski was published in August 2013, ULC has seen the rate and value of case settlements increase dramatically. Cases wherein “Glaski” is alleged may include principal reductions between 30-70%, interest rates fixed at 2-3% for 30 years and a cash award upwards of six figures. The total value of such a settlement is well into the millions over the life of the loan.

According to the Obama Administration January Housing Scorecard, “Payment reduction is a strong driver of permanent modification sustainability,” so getting a principal reduction is critical. Yet most homeowners are finding lenders rarely provide legitimate modifications, offering no principal reductions or even terms designed for long term ownership. California homeowners who suspect that they may have been wrongfully foreclosed upon or are currently facing foreclosure are urged to review their original loan papers to determine if they might have a case against their lender and/or servicer.

“This is one of the most significant cases in California real estate law in the last fifty years,” explains Stephen J. Foondos, managing partner of United Law Center. “Unlike the myriad weak modification programs that gave little or nothing to a relatively small number of homeowners, the Glaski decision offers the potential for real financial relief through litigation to all who were wrongfully foreclosed upon or stuck in a perpetual black hole of modification madness.”

The Glaski decision stands for the simple proposition that if an entity wants to collect on a debt in California (or foreclose on a mortgage), that entity must own the debt. Further, if such an entity is claiming ownership by way of an assignment, that assignment must be valid. A bank’s assignment of a promissory note to a Mortgage-Backed Security Trust (a “Securitized Trust”) is generally referred to as “securitization.” Pursuant to the New York law under which the Securitized Trust was created and Federal Securities Law, the transfer of Mr. Glaski’s note was required to occur within 90 days of the closing date of the Securitized Trust commonly referred to as the “90 day Rule.” If this securitization occurs beyond the 90-days, it is considered void at its inception.

Therefore, because the Securitized Trust did not own Mr. Glaski’s note, it could not legally foreclose, and hence, the foreclosure was wrongful. The California Court of Appeals agreed. And while Glaski is viewed as an outlier in Federal Courts, “It is the law in California, and we have been granted the right to sue in California Superior Court,” says Foondos. “Moreover, if the trust never owned the note, then it never had the right to collect any of his mortgage payments,” explains Attorney Foondos, “and we have also been granted the right to recover those past payments under a claim for conversion. Now is the time for the real victims of the Mortgage Scandal of the 2000s — homeowners — to be made whole,” says Foondos.

It is estimated that 70-80% of all California homeowners who financed a home between 2003 and 2008 had their note securitized. “Accordingly, in light of the Glaski decision, approximately 1.3 million homes may have been wrongfully foreclosed upon and have grounds to sue their original lender for damages,” explained Foondos.

It’s clear these wrongful foreclosures have had an impact on California’s economy. In a 2013 joint report by The Alliance of Californians for Community Empowerment, The Center for Popular Democracy and The Home Defenders League, upwards of 1.7 million homes were foreclosed upon since 2008. These foreclosures are estimated to have cost the State about $27 billion between lost tax revenue and services necessary to foreclose upon or maintain these properties. Including loss of wealth, the figure is estimated in total at $625 billion. According to a January 14th Harvard research report entitled “The Effect of Mortgage Securitization on Foreclosure and Modification”, “…over 500,000 of the 4.4 million foreclosures experienced since the start of the financial crisis were caused by securitization.”

CBS News Reports On One of ULC’s Victories:

RANCHO CORDOVA (CBS13) — A Rancho Cordova couple is staying in their home after it was nearly sold out from underneath them by their bank.

Cheryl Alimena and her husband Charles say their home was full of life and celebrations.

“We planned on being here for the rest of our lives,” he said.

It was also filled with grief after their son died in a car accident just two years ago.

“This house, it has a lot of memories for us, and it meant a lot to us before, but it means a lot more now,” Cheryl said.

The family nearly lost that home, but they won it back from a pending foreclosure after suing their lender.

“It was like a bad dream,” Charles said.

They’re one of a growing group of foreclosed California owners taking their lenders to court following the foreclosure crisis.

Loans from the housing bubble were repackaged as securities and sold on Wall Street. That put the true holders of the mortgage debt in question.

“The entity that’s trying to foreclose on them has no legal standing to do so,” said attorney Stephen Foondos.

“This is of course something the banks want no one to know about, because otherwise you would have everyone running to the court trying to file a claim.

The legal ruling turned into a reversal of fortune for the Alimenas. The nightmare they’d lose their dream home is over.

“For the little person to actually be able to win, I think that’s what people need to know,” Cheryl said, “is that there is hope out there for them.”

As part of the settlement, the couple also reduced their monthly mortgage payment by $800 a month.

View the article on the CBS 13 website