This decision must be viewed as a major victory for Calif. homeowners as it empowers homeowners with the knowledge that anyone suffering from modification violations by their servicer can take legal action," explained Stephen Foondos, Founder of ULC.
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Sacramento, CA (PRWEB) October 30, 2014
In July 2014, according to court records, a Northern Calif. jury found for the Plaintiff, Mr. Linza, awarding $513,000 in damages and $15.7 million in punitive damages against the Defendant bank, PHH Mortgage, for proceeding with the intention to harm Mr. Linza and send him into foreclosure despite a mortgage modification that had been in place since 2010. Monday, the Honorable Steven W. Berrier, Yuba County Superior Court judge, issued his decision in favor of Plaintiff awarding $158,000 against PHH Mortgage for its misconduct during the modification process. The award, while dramatically less than the jury award, was still justice for the Plaintiff, and California homeowners, in his suit against PHH Mortgage for wrongful conduct and breach of contract. United Law Center began representing Mr. Linza in 2012 when he reached out in desperation to save his home from foreclosure after fighting with PHH Mortgage for more than two years on his mortgage modification agreement when PHH Mortgage continued to violate the terms of their agreement causing injury to Mr. Linza. Linza v. PHH Mortgage Corporation et al. (Yuba County Superior Ct. No. 12-0000714)
“We were perplexed by the judge’s ruling given the jury’s award of $15.7 million in punitive damages and the judge’s own $5 million bond to secure the award during the post-trial period. Regardless, this decision must be viewed as a major victory for California homeowners as it empowers homeowners with the knowledge that anyone suffering from modification violations by their servicer can take legal action. No one can argue that $158,000 isn’t a significant sum,” explained Stephen Foondos, founder and sr. managing attorney of United Law Center, attorneys for the Plaintiff. This court’s ruling merely emboldens the nationwide movement toward holding servicers accountable for mistreating its customers in the servicing of their loan. In overturning the jury, the judge ruled that PHH Mortgage’s conduct and subsequent attempts to foreclose on Mr. Linza were merely, “an ‘insensitive’ breach of contract”.
As for Mr. Linza, his case continues. “We were not surprised by the court’s ruling as it is yet another example of a lower court not being informed on what’s really happening in this industry. Every day there is a report of another nonbank mortgage servicer coming under scrutiny by regulators for various abuses against mortgage holders. We intend to get back the millions of dollars the jury unanimously awarded Mr. Linza, on appeal. Given the nature of this decision, Plaintiff now has the opportunity to establish new law and strengthen existing case law relating to homeowner abuse by servicers. We are used to having to win on appeal,” added Foondos.
This month, the mortgage servicing industry has increasingly come under fire by regulators due to their alleged inability to properly service their customers. According to Ben Lane of HousingWire.com, Congressmember Elizabeth Warren sent a letter to the U.S. Government Accountability Office on Oct. 20, 2014 requesting a study of the risks posed to consumers by the “unprecedented” growth in nonbank mortgage servicing. On Oct. 28, 2014, the Consumer Financial Protection Bureau (CFPB) released a report on the little amount of compliance happening among nonbank servicers with the CFPB’s mortgage servicing rules that took effect in Jan. 2014. Most violations were described as “unfairly delaying permanent loan modifications” and “deceiving consumers about status of permanent loan modifications”; two of the biggest issues in the Linza case.
“This decision illustrates the glaring problem with the explosive growth of the servicing industry and the alleged oligopoly they’ve created,” added Foondos. “Mortgage holders are assigned to servicers when a lender sells its servicing rights to a nonbank servicer. The new servicer is forced upon the mortgage holder who has no ability to select a different servicer. When a servicer performs poorly, making mistakes that create havoc in a mortgage holder’s life, the person has no remedy other than to take legal action. Regulators must help open up the industry to competition so customers are better served.”
United Law Center intends to appeal the court’s ruling given that stipulations of fact agreed to during the trial with opposing counsel were not recognized in the final ruling and the court’s decision to give its own interpretation of “severe”, something the jury overwhelmingly recognized in the jury’s award. “This is fundamentally more than a breach of contract case. We will validate the jury’s decision at the California Court of Appeals,” added Foondos.
About United Law Center
United Law Center is the consumer law firm leading the litigation charge in homeowner defense for foreclosure and other mortgage violations. With four published cases in California, United Law Center is securing case law in favor of homeowners fighting banks to keep their homes. United Law Center protects homeowners against consumer law violations. To determine if a homeowner has a valid case, they are encouraged to visit http://www.unitedlawcenter.com or call 916-367-0630 to schedule a free, no-time-limit consultation.