Follow the rules, forfeit your home
October 3, 2012
By DANIEL BLACKBURN
Campbell (Cam) Carroll came very close to losing his home to foreclosure earlier this month to people he’d never heard of, the forced sale auction halted only by a last-minute restraining order issued by a San Luis Obispo County Superior Court judge.
Campbell thought he’d take advantage of a mortgage modification offer from his bank after his construction work dried up last year. At that time, he was simply trying to reduce his monthly payments. Now, Campbell’s desperate focus is to save the Paso Robles home he’s owned for 20 years, and he’s locked in a legal battle with banking giant J.P. Morgan Chase (JPMC).
Unfortunately for Campbell, he’s now joined the ranks of literally thousands of homeowners nationwide accusing the same bank of fraudulent and predatory mortgage lending practices. Fortunately, however, Campbell has something most of those other dissatisfied mortgagees don’t have: proof that his home’s original title no longer exists. And that may well be the key to successful litigation, he said.
Campbell fell into his fiscal morass in much the same way many other Americans have — by applying for the “Home Affordable Mortgage Program (HAMP),” a federal program designed to help homeowners facing default of their home loans.
Campbell religiously followed his bank’s refinancing instructions and made his required payments promptly. But in what appears to be a well-established policy pattern with J.P. Morgan Chase, none of that apparently mattered.
In a lawsuit filed Sept. 18 in Paso Robles court, Campbell alleges a laundry list of complaints against JPMC including fraud, RICO violations, conspiracy, breach of fiduciary trust, unfair debt collection practices, and slander of title. He seeks protection of his domicile and unspecified damages.
An attorney for the bank, Michael J. Agoglia of San Francisco, did not respond to email and telephone queries from CalCoastNews.
Campbell’s story has a familiar ring: the tactics he experienced are the same as those being encountered by countless homeowners all over the country. And his litigation parallels numerous other lawsuits, lodged by individuals and government agencies, against JPMC.
He “applied in good faith for a loan modification,” said Campbell. “My mortgagee, Chase Home Finance, LLC, provided a uniform loan document package which I completed and submitted… over and over again, as [bank officials] continually claimed to be missing a document, or required more information. Over a period of six months, my local bank manager assisted me with the task of providing the never-ending stream of demands.
“During this lengthy process, Chase Home Finance told me that I could begin remitting one-half monthly mortgage payments, which I did faithfully. I had never missed a mortgage payment, and was a customer in good standing until I applied for a modification and began following their instructions.”
After nine months, Campbell said he received a denial of his application from the bank, officials of which claimed he had “failed to submit documents in a timely manner.”
He rebutted this effectively after his local Chase bank manager contacted the lending entity and informed them that she had submitted the documents in question herself, and she had retained time stamped copies. As a result, Chase Bank told Campbell to ignore the denial letter.
A week later, he said, he received yet another denial letter, citing his unemployment as a reason for that action.
“I had disclosed that fact in countless documents right from the start,” he said. “I was told that I was a good customer, that it (employment status) would make no difference.”
Along with the denial came a demand to “immediately remit all past outstanding balances, late fees, and interest on amortized interest,” or face foreclosure.
“During this process, they also reported me to credit agencies as delinquent, thus damaging my credit score beyond repair. I was unable to remit all of the funds they were now demanding, and I was told to offer my property up for a ‘short sale’ or they would foreclose.”
Campbell said that was when he decided “to fight J.P. Morgan Chase Bank for my rights and my home.”
He retained Atascadero attorney Curtis Clark just in time to win that restraining order, even as his home was about to be auctioned on the steps of the county courthouse building.
The missing title calls into question the actual ownership of Campbell’s mortgage.
“J.P. Morgan Chase has no standing to collect mortgage payments from me as they don’t possess my note,” said Campbell. “In fact, the note has been fraudulently securitized without my consent.”
Attorney Clark said the case “arises out of the defendants’ egregious, ongoing, and far- reaching schemes” to defraud his client.
“It’s like trying to sue a ghost,” Clark said. Campbell’s loan was “pooled and packaged” into something called a “mortgage backed security.”
This resulted, Clark said in the lawsuit, in the property’s “note and deed of trust being separated, with the note being thereafter ‘fractionalized’ into separate accounting entries and substitute ‘certificates,’ which were then sold to investors.”
Campbell has tried on numerous occasions to induce JPMC to produce the original note and deed of trust, without success, Clark said.
Campbell has a word of warning for other homeowners: “Many of you may not be aware of this, but if you have financed your property in any fashion during the last decade, your loan, like mine, has probably been securitized. What this means is that your note is currently, permanently and illegally separated from your deed of trust. In short, you’re probably remitting mortgage payments to an institution that has no legal grounds to collect those funds; hence, that institution cannot reconvey your clear deed of trust back to you even after you have fully satisfied the terms of your now securitized note.”
The issues faced by Campbell reflect a widespread circumstance. In one major case, a federal judge in New York two months ago rejected a bid by JPMC to dismiss a class-action lawsuit accusing the lender of defrauding thousands of homeowners who attempted to modify mortgages under the HAMP system.
That will allow litigants to pursue claims that America’s largest bank failed to act in a lawful manner in the loan process. U.S. District Judge Richard Stearns, according to a July 30 article by Reuters, “also let stand claims that Morgan’s Chase unit drove homeowners deeper into debt by prolonging the modification process through ‘gross ineptitude,’ sometimes adding fees to loans already in default and starting foreclosures while modifications were being negotiated.”
Cam vs Jpm