Motion To Show Cause

http://rcxloan.com/Motion_Show_Cause.htm

“A good name is more desirable than great riches; to be esteemed is better than silver or gold.” - Proverb 22:1

Praises & Thanks be unto The Lord My God for the wisdom, knowledge and understanding on legal matter because I received countless feedbacks from folks facing foreclosure and bankruptcy around the United States as follows:

Comments: "I have been inundated with TILA questions. So I went out hunting to see if anyone had already written about it in terms that a lay person might be able to understand. What I found is shown below. I believe it to be generally correct and the citations are good citations of law. See this site for the entire write-up. It should give most lay people an idea on how to handle this and it will be valuable to your lawyer if he/she is not totally familiar with the TILA context at the following link:" http://rcxloan.com/Civil_Action_BK_Motion_14.htm. Statement made by Attorney at Law, Neil F. Garfield, M.B.A., J.D.

A STORY TO THINK ABOUT
“Once upon a time in the Ancient Roman Empire, 27 BC, there were two men living in Jerusalem. One was named Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust, a rich man whose land was worth close to $700 billion in today‘s money; the other, Mr. Augustin, a farmer whose land was worth $300,000. One day, Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust asked Mr. Augustin to give him his land, that he may have it for a vegetable garden. But, Mr. Augustin said to Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust, “The Lord forbid me that I should give to you the inheritance of my fathers”.

When Jezebel, the wife of Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust, heard what Mr. Augustin said to him. She said, don‘t worry love, I will take care of the matter? Arise, eat bread, and let your heart be joyful; I will give you Mr. Augustin‘s land. So, Jezebel wrote letters in Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust’s name and seal them with his seal and sent letters to the elders and to the nobles who were living in Jerusalem. Now she wrote in the letters, saying, proclaim a ‘relief of stay trial’ in the absence of Mr. Augustin. Then, issued a decree that Mr. Augustin’s land is now Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust.

So the men of Jerusalem, the elders and the nobles did as Jezebel had sent word to them, just as it was written in the letters which she had sent them. Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust take possession of Mr. Augustin’s land which he had refused to give. The sad part is that Mr. Augustin was forced off his land illegally and fraudulently. Mr. Augustin left with nothing and forced to seek refuge from Jerusalem to a land called ‘Fairfax, Virginia’ to start from scratch. Whereas, Ameriquest-New Century-Chase Home Finance-Deutsche Bank National Trust became more wealthy with the unwarranted possession of his and hold more than $700 billion of assets as a result.

Questions? Why was Mr. Augustin absent in the relief of stay trial? Why did the elders and the nobles just do as Jezebel asked them? Let us all fast forward in 2008, what do you think the elders and the nobles should have done differently?”

Emergency Request for Help to Stop Chase Home Finance's Mortgage Fraud

United States Court of Appeals - District of Massachusetts

Pierre Richard Augustin, PRO SE )

Appellant, )
)
v. ) 07-1750
)
Chase Home Finance, LLC )
Appellee. )

MOTION TO ‘SHOW CAUSE’ PER THE ORDER OF MAY 15, 2007

On May 11, 2007, Appellant submitted an ‘Emergency Motion for a Stay of the foreclosure set for May 16, 2007 and requested an ‘Expedited Review’. In that request, Appellant was only seeking a review of that part of the Order that denied the Stay on May 9, 2007 (not the Order granting motion to dismiss by the District Court).

Appellant was unaware that final judgment has not been entered since his requested for a default order against those two defendants were denied or not acted upon yet and assumed that he was facing dismissal against all defendants. Given that Appellant had filed a timely notice of appeal on April 26, 2007 to the First Circuit of the Court of Appeals, he wrongly assumed that an other notice of appeal was not needed at all.

Essentially, Appellant is now looking for an Expedited Review of this Emergency Motion For A Stay with the provided ‘Show Cause’ written explanation since the foreclosure date has been moved now for May 23, 2007. Thus, on May 15, 2007, Appellant filed for an Interlocutory Notice of Appeal at the District Court based on the facts pointed out by the Court of Appeals and has submitted a revised Motion and Memorandum of Law.

STATEMENT OF ISSUE FOR THE ‘SHOW OF CAUSE’
Is This Written Show Of Cause As Requested by The First Circuit Court of Appeals Intertwined With The Appellant’s Right To Defend His Property Interest On The Merits of ‘Equal Justice Under Law?

FUNDAMENTAL BASIS OF ARGUMENT (Les Inusta Non Est Lex)
Ronald Dworkin regards law as an interpretive process under which individual rights are paramount. Therefore, let us consider the following two situation by Dworkin:

First Quotation by Dworkin
“An impatient beneficiary under a will murder the testator. Should he be
permitted to inherit?”

Appellant’s Contextual Analogy of First Quotation
Chase Home Finance as an impatient beneficiary strips away Appellant’s property rights despite his timely legal objections and defenses. Should Chase Home Finance be permitted to inherit the profit by selling Appellant’s property now set for May 23, 2007?

Second Quotation by Dworkin
“A chess grand master distracts his opponent by continually smiling at him.
The opponent objects. Is smiling in breach of the rule of chess?

Appellant’s Contextual Analogy of Second Quotation
Chase Home Finance blind folded their eyes and their two hands over their ears by not answering to Appellant’s timely legal objections and defenses by maintaining silence. Appellant objects but no one is looking or listening. Is the silence of Chase Home Finance in breach of the rules of law?

ARGUMENT
Are The Wordings of “Equal Justice Under Law” At The Façade of The U.S. Supreme Court An Abstract Theory Or A Fundamental Right?

The first quotation mentioned above by Dworkin is “drawn from the New York Decision of Riggs v. Palmer in 1899. The will in question was validly executed and was in the murderer’s favour. But whether a murderer could inherit was uncertain: the rules of testamentary succession provided no applicable exception. The murderer should therefore have a right to his inheritance. The New York Court held, however, that the application of the rules was subject to the principle that ‘no person should profit from his own wrong’. Hence, a murderer could not inherit from his victim.”

According to Dworkin, in the second quotation, “the referee is called upon to determine whether smiling is in breach of the rules of chess. The rules are silent. He must therefore consider the nature of chess as a game of intellectual skill; does this include the use of psychological intimidation? He must, in other words, find the answer that best ‘fits’ and explains the practice of chess.”

Appellant is a victim of Predatory Lending (See Motion on ‘Relevant Evidences’) and Mortgage Fraud initiated by New Century Mortgage Company. Appellant’s mortgage was assigned to Chase Home Finance or Deuthsche National Trust Company (Appellee).

As illustrated above in Appellant’s contextual analogy, he has been injured as a result of Appelle’s silence and other creditors wrongdoings. On February 2006, Appellant’s desperately sought to stop the sale of his house by another creditor unsuccessfully. However, ‘relevant new evidences’ have surfaced in the Washington Post (See Motion on Relevant Evidences) that confirm the fact that Appellant is a victim of predatory lending and mortgage fraud.

Also, according to an article entitled Mortgage fraud seen as prolonging U.S. housing slump, by Bob Ivry of Bloomberg News published on April 26, 2007 states that, "Misstatements about employment and income are being made every day," said Robert Russell, counsel to the director of the Office of Thrift Supervision, which oversees savings and loans. "The brokers are just putting down on paper what the underwriters would require.” The above mentioned article substantiate what Appellant’s has been arguing in his pleadings and motions.

The whole purpose of the law is that New Century Mortgage, Chase Home Finance or Deuthsche National Trust Company are responsible for the harm that arise out of their act. It should not fall on the Appellant, the innocent victim of that act who have acted timely to protect his property interests.

Collateral Order Doctrine
Appellant is seeking a review at the First Circuit, Court of Appeals, according to 28 U.S.C. 1291 and 28 U.S.C. 1292, because of the irrefutable facts that Appellee and other creditors failed to respond to his timely TILA notice of rescission and the Mortgage Fraud issue as a defense to foreclosure.

The Supreme Court of the United States delineated the test for the availability of interlocutory appeals, called the collateral order doctrine, for United States federal courts in the case of (Lauro Lines s.r.l. v. Chasser et al., 490 U.S. 495 (1989), (Cohen v. Beneficial Loan Corp., 337 U.S. 541, 546 (1949)), holding that under the relevant statute (28 U.S.C. § 1292) such an appeal would be permitted only if:

1. The outcome of the case would be conclusively determined by the issue
The Order of the District Court of May 9, 2007 conclusively states that it lacks jurisdiction to even consider the requested stay.

2. The matter appealed was collateral to the merits
As Massachusetts is a non-judicial foreclosure jurisdiction, Appellant will lose his rights of due process, if an entry for a stay by this Court is not granted because the sale of his home will be irreversible and render any subsequent and pending legal actions moot.

3. The matter was effectively unreviewable if immediate appeal was not allowed
The right of Appeal will be 'irretrievably lost' if immediate review is not available and granted.

CONCLUSION
Appellant cannot undo the damages that preceded. But, however harsh it may seems, the law provides Appellant with the right of rescission if he catches any technical violation within 3 years of the signing of the loan documents. Thus, Appellant’s TILA rescission notice was timely sent to Appellee and other creditors on September 21, 2006.

In the marble façade of the Supreme Court, the words one sees are “Equal Justice Under Law”.

Therefore, Appellant’s right of rescission has precedence, negated any foreclosure actions and voided the security interest in his property.

For that matter, Chase Home Finance [cannot be allowed]:
1. To profit from the Predatory Lending practices that it inherited from New Century Mortgage.
2. To remain ‘silent’ on the issues of mortgage fraud and TILA rescission.
3. To continuously defying, trampling and usurping Appellant’s rights and the rule of law.

Respectfully Submitted,
Pierre R. Augustin, Pro Se
28 Cedar Street, #2, Lowell, MA 01852,
Tel: 617-202-8069

# # # # # # #

Qualified Written Letter Sent to Chase Home Finance and Deutsche National Trust Company

Pierre R. Augustin, Pro Se
28 Cedar Street
Lowell, MA 01852
Tel: 617-202-8069


April 12, 2007


Attorney Charles Lovell
Attorney for Chase Home Finance
and Deutsche Bank National Trust
Providence, RI 02903

Dear Attorney Charles:

In honoring your request to respond to your letter dated April 4, 2007, I am not waiving any rights under TILA, including the 20-day respond period that had expired since October 10, 2006. I categorically reject all allegations made on that letter since my TILA rescission notice sent to you on September 21, 2006, has precedence, negate your foreclosure actions and voided the security interest in my property.

Please treat this letter as a “qualified written request” under the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605(e). Mr. Pierre R. Augustin, Pro Se disputes this debt and notice of foreclosure since on September 21, 2006, you have received a TILA notice of rescission which voided the security interest and the note on his principal dwelling.

Therefore, I must point out that you are in:

· Violation of the Truth-In-Lending Act (TILA) notice of rescission sent to defendants on September 21, 2006 which automatically void the security interest in my property. (Reg. Z §§ 226.15(a)(2), 226.23(a)(2), Official Staff Commentary § 226.23(a)(2)-1) and 15 U.S.C. § 1635(b).

· Violations of the Federal Fair Debt Collection Practices Act and Massachusetts Debt Collection Laws, Violation of the Fair Credit Reporting ACT and seeking punitive damages per 15 USC 1681 n(a)(2), 15 USC 1681o, 15 USC 1692e(8).

· Violation of Statute of Limitation. If you or any of the defendants disputes the plaintiff’s right to rescind, they should have filed a declaratory judgment action within twenty days after receiving the rescission notice, before the deadline of October 10, 2006 to return the plaintiff’s money or property and record the termination of its security interest according to 15 USC 1635(b).

· On November 15, 2006, you and all the other defendants were on notice that they were in default for TILA violations (see docket # 80, Case #: 06-10368).

· Violation of the statute of limitations and fraudulent assignment of the mortgage. Without a security interest in the plaintiff’s property, New Century Mortgage, Chase Home Finance, Deuthsche Bank National Trust and any other parties do not have the authority to foreclose or to assign neither the mortgage nor the note.

· Violation of the Federal Rule of Civil Procedure 17(a), (East Coast Properties v. Galang, 308 A.D.2d 431, 765 N.Y.S.2d 46 (N.Y. App. Div. 2003). Neither you nor any of the defendants are Real Party in Interest or Holder in Due Course, since the TILA notice of rescission automatically voids the security interest.

· Violation of the rule of law, since neither you nor any of the defendants have Standing to pursue foreclosure action because, once TILA notice of rescission is given, the lien or security interest in plaintiff’s property becomes void ab initio, even if a court has not yet ruled on the validity of the plaintiff’s rescission (Willis v. Friedman, Clearinghouse No. 54,564 (Md. Ct. Spec. App. May 2, 2002)).

In summary, Mr. Augustin states that the mortgage is not valid and in violation of TILA (failure to respond to TILA rescission notice by October 10, 2006) by not complying with required procedures. Without an interest in the debt, you do not have the authority to foreclose since you do not have an enforceable security in the property because the mortgage and note assignment were improper and ineffective.

If you are not the current holder of the note and mortgage relating to Mr. Pierre R. Augustin’s mortgage account, please provide the name and address of said true owner of the obligation (15 USC, 1641(f)(2)) or holder and indicate your relationship to this entity. Therefore, absent of transferring debt precludes action for foreclosures because the assignment of the mortgage alone is a nullity, the note cannot be enforced and in violation of U.C.C. requirement. This is a Fraudulent maneuver.

Mr. Augustin loan account should be zero due to TILA rescission notice. Thus, the Loan account is in error. In invoking the protection of the service act, Mr. Pierre R. Augustin is challenging this notice of foreclosure since the foreclosure proceeding is erroneous (12 USC 2602(1)(a). Do take the necessary action to correct this error in responding to this qualified written request by complying with 12 USC 2605(d), 12 USC 2605(e) and 12 USC 2505(f). Thank you for taking the time to acknowledge and answer this request as required by the Real Estate Settlement Procedures Act (sec. 2605(e)).

Sincerely,
Pierre R. Augustin, MPA, MBA

617-202-8069

# # #

WHAT IS AN ILLEGAL FORECLOSURE?

1. IF YOUR FORECLOSURE DOES NOT FOLLOW ALL OF THE STEPS REQUIRED BY LAW, THEN YOUR FORECLOSURE WILL NOT BE A VALID AND LEGAL FORECLOSURE.

2. IF YOUR FORECLOSURE IS STARTED BY THE WRONG LENDER, THEN YOUR FORECLOSURE IS ILLEGAL. (Make sure the lender on your deed of trust is the same lender foreclosing on your home. If not, then there must be a recorded assignment transferring the loan to the new lender before that lender can start the foreclosure)

3. IF YOUR FORECLOSURE IS STARTED EVEN THOUGH YOU ARE NOT BEHIND ON YOUR PAYMENTS (Yes, this happens!), THEN YOUR FORECLOSURE IS ILLEGAL.

4. IF YOUR FORECLOSURE IS STARTED BASED ON THE PROMISSORY NOTE ONLY, AND NOT THE DEED OF TRUST, THEN YOUR FORECLOSURE IS ILLEGAL (UNLESS THEY HAVE ALREADY SUED YOU ON THE NOTE, OBTAINED A JUDGMENT AND THEN STARTED A FORECLOSURE ACTION).

5. IF THE FORECLOSURE ON YOUR HOME IS THE RESULT OF A PREDATORY LOAN, YOUR FORECLOSURE MAY BE ILLEGAL.

6. IF YOU ARE NOT GIVEN AN OPPORTUNITY TO APPEAR AT YOUR FORECLOSURE HEARING AFTER FILING YOUR RESPONSE AND PAYING YOUR FEE, THEN YOUR FORECLOSURE IS ILLEGAL.

7. IF THE COURT DOES NOT ISSUE AN ORDER AUTHORIZING THE SALE OF YOUR HOME AT LEAST SEVEN DAYS BEFORE THE SALE DATE, THEN YOUR FORECLOSURE SALE IS ILLEGAL UNLESS IT IS RESCHEDULED TO A TIME AT LEAST SEVEN DAYS FROM THE ORDER.

# # #

Predatory Lending
These are some of the abusive practices you will experience from a predatory lender:
Terms, Interest Rate and Fees are Increased at Closing (bait and switch) Excessive Fees - Unnecessary Product - Excessive Kickbacks To Brokers Mandatory Arbitration - Abusive Prepayment Penalties - Loan Flipping Steering & Targeting

NOW FOR THE GOOD NEWS!
Federal Law provides protection against abusive and insensitive lending practices. Furthermore, the law provides for very stiff penalties for lenders who violate such laws.

IF YOU WANT TO KEEP YOUR HOME, ARM YOURSELF WITH AN UNDERSTANDING OF THE PROTECTIONS UNDER THE FOLLOWING:

The Truth in Lending Act (TILA)
The federal Truth In Lending Act was originally enacted by Congress in 1968 as a part of the Consumer Protection Act to protect you, the homeowner. Under TILA a homeowner has a right to rescind a loan secured by his or her primary residence. This includes home equity loans and home improvement loans and refinances, whether a first or second mortgage, so long as the money was not used to purchase the home. Under this Act, the homeowner must be provided with a notice of the right to cancel. The lender must have a notice signed by you notifying you of this right to cancel; otherwise the lender has not complied with this federal law.

THIS CAN BE FOUND ONLINE OR AT THE LIBRARY IN FEDERAL LAW: TITLE 15 U.S.C. SECTION 1601 et. seq READ IT!!!!!!!
You, the homeowner have a right to rescind your loan up to three business days after the transaction and an extended right to rescind the loan for up to three years (that’s right folks, you can cancel your loan up to three years later) if you’re not given a notice of the right to cancel the loan, OR if you did not receive notice with all of the required material disclosures. Oh it’s a stiff penalty, but it’s your right!! TILA also requires lenders to disclose the terms of loans in an understandable manner. The “National Consumer Law Center's Truth in Lending” manual provides detailed information on how TILA can be used to CHALLENGE predatory loans.

Sounds a little like poetic justice to me! Send your lender (by certified mail) your rescission notice pointing out the violations under TILA, HOEPA AND RESPA. This is federal law so take full advantage of it! Get the picture?

Home Ownership and Equity Protection Act (HOEPA)
The Home Ownership and Equity Protection Act, is an amendment to TILA. This section of law covers certain high rate home equity loans. In addition to notice of the right to cancel and other disclosures required by TILA, if a loan is covered under HOEPA, lenders must provide borrowers with additional disclosures of the “annual percentage rate” (APR) and monthly payment three days prior to closing. These disclosures must also include provisions telling the borrower that they are not required to sign the loan agreement simply because they received the disclosure statements, and they may lose their home if they do not meet their obligations under the terms of the loan. In addition to the disclosure requirements, HOEPA prohibits the inclusion of certain terms in the loan contract. A loan covered under HOEPA may not include the following:

1. Terms which increase the interest rate in the event of default. If you fall behind on your mortgage payment, they cannot increase the interest rate.

2. Balloon payments prior to ten years. The lender cannot put a stipulation in your loan that requires the total amount of your loan to be paid off in the first ten years or even a payment that is much larger than your regular monthly payment.

3. Negative amortization. If the amount of your monthly payment is not enough to cover the interest payment on your loan, the “shortage” is added to your loan balance. So with each monthly payment you make, your loan balance goes up instead of down. This type of loan violates federal law.

4. No prepaid payments. At closing, the lender cannot roll any payments into your loan. This would result in additional interest charged on interest itself, which is prohibited by state and federal usury laws.

5. Extending credit to individuals without regard to their ability to repay the loan. This is a big one folks! A lender cannot put you in a loan based on fictitious income information that was grossly exaggerated in order to make it appear that you qualified for the loan. This is an illegal practice prohibited by state and federal law and a very common abuse perpetrated on the elderly.

6. Disbursement of funds payable solely to a home improvement contractor. On a home improvement loan, the lender cannot pay the contractor directly. The check must be made solely to the homeowner or made to the homeowner and the contractor together.

7. Most prepayment penalties are also prohibited.

If you are facing foreclosure and your loan is less than three years old, you are still protected under federal law! Violations of HOEPA's disclosure provisions and inclusion of prohibited contract terms will make your lender liable to you for actual damages, statutory damages and attorney fees and costs. In addition, there are special enhanced damages, of finance charges and fees paid by the consumer, for material violations. HOEPA violations are also subject to TILA's extended right to rescind. Assignees (if your loan is sold to another lender) of loans covered under HOEPA are liable for all claims and defenses with respect to the assigned mortgage that the consumer could assert against the original lender on the loan, except to the extent of certain limitations on damages. These laws are for your protection and can save your home, use them!!!

Real Estate Settlement and Procedures Act (RESPA)
Among other provisions, the Real Estate Settlement and Procedures Act prohibits the payments of unearned fees and kickbacks. A lender kickback to a mortgage broker for making a referral is forbidden. The remedy for violation of this provision is treble (three times the amount) damages and attorney fees.

State Unfair and Deceptive Acts and Practices Laws (UDAP)
Many of the abusive practices and loan terms found in predatory mortgage loans can be challenged under state unfair and deceptive acts and practices (UDAP) laws. If a state's UDAP statute covers the type of transaction or the creditor involved, advocates may bring claims for practices such as repeated and unnecessary refinancing ("flipping") of loans, making unaffordable loans to consumers to acquire the equity in the property, or misrepresenting the loan terms. Excessive fees and costs, and other terms that are disadvantageous to the borrower may be challenged as well.

Other Laws
In addition, warranty law, usury, unconscionability, breach of fiduciary duty, fraud, and contract law have remedies which may prove helpful in challenging abusive loans. Other laws, including the Equal Credit Opportunity Act and the Fair Housing Act, have also been used to challenge these practices.

Introduction to the Mortgage Servicing Scam
• These are not "predatory lenders." These companies do not loan money. They operate in the lending
industry after-the-fact. They take on a function that a lender doesn’t want - the backroom functions of
handling payments, escrow accounts, annual statements, dealing with borrowers, collections, etc. The
perpetrators of the loan servicing scam acquire the servicing rights to loans that other companies have
already made. (Loans that were deliberately constructed by predatory lenders are ideal for processing
through servicers that specialize in aggressive collections or rapid foreclosure processing, but the loan
servicing scam can be operated against any mortgage loan if the servicer acquires the rights from the lender.)

• These scams are designed and deliberately operated. These situations are not errors, mistakes or
situations where a servicer’s managers or employees failed to do their job. Their systems are well-designed
and state-of-the-art in terms of analytical technology that helps them choose and process their victims.
These scams generate enormous profits from a business that is difficult to run, people and litigation
intensive and normally only marginally profitable. Many have failed and been acquired (Fairbanks bought
several).

• You, the borrower are not their customer. Lending companies and investors are their customers. As a borrower being "serviced" in the scam, you are simply one of millions in an ever-growing pool of what the financial services industry deliberately labels as "sub-prime" borrowers waiting to be taken advantage of.

• They have almost unlimited legal resources. If you had the financial resources to have effective legal
representation and the documentation to challenge them, they would turn their attention to easier targets. Of course, because most sub-prime borrowers are not well off and don’t have an attorney, you’re a likely target.

• They have leverage and information and will prey on your fears. The fear of possibly losing your
home is the key that unlocks your bank account for them. They know almost everything about you
financially and even from an employment and income basis. They are made aware of your inquiries into other lenders about refinancing even without a request for a payoff and that shopping may lead them to target you before you can get out of the loan you’re in.

• They are experts with millions of successful cases behind them. The loan servicing industry, including those who founded and are running the servicing scam companies, helped craft the "standard" loan documents in widespread use. They are written entirely for the protection of the lending industry, not the consumer. That situation allows them to manipulate their processes and procedures to push you into a position where they can take funds from you or ultimately take your home, often within the terms and conditions of the loan. Some do go beyond the terms or even break the law and aren’t stopped because the borrower does not actually understand the agreement they signed or the laws and regulations.

- When the servicer decides to manipulate the date the payment is received in order to artificially
create a late payment.

- When the servicer applies part of the payment to something other than principal and interest and
creates a partial late payment or deficiency.

- When the servicer decides to "force place" an insurance policy on the property by claiming the
homeowner has not provided proof of insurance.

- When the servicer pays your property taxes late, then adds their late penalty to your account
without your knowledge.

- Any or all of those processes result in at least one month of the account being past due and a negative note is made in the credit report (which effectively prevents the borrower from refinancing). It also helps the Private Mortgage Insurance carrier keep the policy in effect on the loan, which is why these insurance companies have investments in servicing companies in the first place – a late payment or two allows the lender to keep the insurance in force.

- IF the borrower has anything more than about 10-15% equity in the property, it is to the servicer’s
advantage at this point to not aggressively attempt to collect. In fact, if the borrower makes contact, the servicer will engage in delay tactics to avoid resolving the problem in time to prevent default. If the equity position is considerably less than 10%, the servicer does not have as much leverage, nor is the opportunity as great and they will typically be more aggressive in collection efforts and more willing to keep the loan in force.

- In the case of force-placed insurance, it is to the servicer’s advantage to ignore the borrower and any proofof insurance as long as possible, again to keep the borrower’s credit status in a negative light and to maintain their relationship with the insurer they contract with. These policies are extremely profitable because they provide absolutely no coverage for the homeowner. They protect ONLY the value of the loanif the property is destroyed.

- If the servicer has analyzed the opportunity and marked the property for default and recovery, the next payment received will be rejected as being insufficient. If it is accepted, the application of the funds leaves the loan sixty days past due. Typically, the scam now moves toward formal legal notice of acceleration in order to coerce the borrower into signing a highly-profitable forbearance agreement to somehow "save the home." The servicer rolls thousands of dollars in penalties and an incomprehensible combination of legitimate and illegitimate fees into the agreement and the homeowner is left with no choice but to sign it or lose their home. The amount demanded will be calculated to take as much of the homeowner’s equity as possible.

- If the homeowner decides to sell the property to get out of the situation and take their equity, they will find the payoff amount (which in the last month of the scam will take longer to get than the amount of time left before foreclosure) strips them of their equity. That combined with their artificially-damaged credit rating helps keep the victim trapped.

- If the borrower cannot pay the amounts demanded in the forbearance agreement, the servicer will have one of their network of specialized attorney firms foreclose and the property will be sold, typically at a county auction or through their real-estate network.

- If the borrower signs the agreement, they will soon be recycled through the process with yet more late payments and fees. But in the terms of the forbearance agreement, they may find they have signed away any legal protections they may have already had, including the right to sue the servicer for fraud or misrepresentation.

- In the end, if the homeowner cannot afford competent legal representation to stop this fraud, they lose their equity and in many cases, their home.


I can be reached for a FREE consultation at (cell) 617-202-8069 or (703) 584-5998,



it's FREE, there is no obligation whatsover...! Sincerely, Pierre R. Augustin, MPA, MBA

P.S. - What 3 friends do you know who would benefit from FREE Expert Loan Advice...!
1. Call and Speak with a Consultant, 1-617-202-8069 or (703) 584-5998, it's FREE!