CA Court Site Info on Foreclosure

Saturday, July 26, 2014

Northern California Yuba County Jury Awards Homeowner $16 Million in Foreclosure Case

JULY 2014

Published: Friday, Jul. 18, 2014 - 2:43 pm

Yuba County Jury Awards $16,000,000 on Foreclosure Case-- Punitives were $15,000,000 of Total

It started out as a simple loan modification for a troubled homeowner. It turned into a $16.2 million jury verdict against a nationwide loan-servicing company.
A Yuba Superior Court jury this week awarded $16.2 million in damages to a homeowner who nearly lost his home to foreclosure after the loan servicer botched his mortgage modification, the homeowner’s lawyers said Friday.
Phillip Linza, a homeowner in Plumas Lake, was awarded the damages after a three-year battle against PHH Mortgage Services, a loan servicer based in Mount Laurel, N.J.
Linza’s attorneys, Andre Chernay and Jon Oldenburg of the United Law Center in Roseville, said the award included $514,000 in compensatory damages and $15.7 million in punitive damages.
They said it ranked among the biggest jury awards they’ve encountered in years of representing homeowners in foreclosure and other mortgage-related cases.
“This is really the highest we’ve seen,” Oldenburg said. “It’s a huge figure.”
PHH said it plans to “seek further judicial review of the case and verdict,” which it said wasn’t supported by the facts. It called the jury’s award “grossly disproportionate to any alleged damages” and added, “We take our responsibilities to borrowers seriously and remain commited to meeting all of our obligations as a servicer.”
Chernay said the case began when Linza, a salesman, fell on hard times after buying a home in 2006 for approximately $280,000. Court records show Linza filed for personal bankruptcy protection in October 2009.
According to the lawsuit, PHH agreed in late 2010 to a loan modification that was supposed to reduce Linza’s monthly payments to $1,543 from $2,100. The new loan was supposed to take effect in January 2011, Chernay said.
After Linza made three monthly payments under the new terms, PHH began sending him letters demanding different amounts. First it said his new payment was $2,350 a month – slightly higher than before the modification. Later it sent him a notice saying he owed PHH $7,056. The company also told him it wasn’t applying his monthly payments to his loan balance because he wasn’t paying the proper amount, according to Chernay.
“It was their mistake as of January 1 (2011) that created this whole scenario,” Chernay said.
Despite numerous phone calls and letters, Chernay said Linza wasn’t able to resolve the problem. After learning that his payments weren’t being used to reduce his balance, he stopped sending money to PHH, the lawyer said.
In 2012, the loan-servicing company initiated foreclosure proceedings. The proceedings halted when the Roseville law firm stepped in and filed suit on Linza’s behalf, Chernay said.
Even with the foreclosure stopped, Linza’s credit rating suffered and he endured emotional stress, Chernay said.
“If the Yuba County jury hadn’t saved him, the house would have been gone and he would have had to move in with his daughter in Colorado,” Chernay said.

AND ANOTHER STORY ON SAME CASE............................

PHH Mortgage Solutions hit with $16.2M jury award

POSTED: July 22, 2014
A Superior Court jury in California has awarded $16.2 million in damages to a Sacramento-area homeowner who said that PHH Mortgage Solutions, based in Mount Laurel, botched his loan modification and nearly cost him his house.
Lawyers for Phillip Linza said the award included $514,000 in compensatory damages and $15.7 million in punitive damages.

PHH is the sixth-largest originator of residential mortgages and the eighth-largest mortgage servicer, as well as South Jersey's fifth-largest employer.
Dico Akseraylian, the firm's vice president, said Monday that the servicer believed the verdict was not supported by the facts presented in the case or by applicable law, and that the jury award "is grossly disproportionate to any alleged damages."
PHH "has taken steps to seek further judicial review of the case and verdict," he said, adding that "we take our responsibilities to borrowers seriously and remain committed to meeting all of our obligations as a servicer."
Philadelphia bankruptcy lawyer Stephen M. Dunne said he considered the award "a wee bit excessive, but the point of punitive damages is to end rampant behavior that fails to go unchecked."
A typical jury award would be $15,000 to $100,000, assuming the borrower could prove fraud on the part of the lender, Dunne said.
Colmar-based bankruptcy lawyer William D. Schroeder Jr. said the size of the award was likely an expression of "the jury's anger" against the system.
One of Linza's lawyers, Jon Lee Oldenburg of the United Law Center in Roseville, Calif., said PHH's "arrogance was something the jury focused on."
Despite improvements in the modification process in the last two years, "servicers botch it up all the time," Schroeder said, citing one client's recent experience of having a modification approved, then withdrawn three months later.
Stephanie Butler, director of housing counseling at Mount Airy USA, said servicers keep changing the rules for mortgage modifications, closing some loopholes and finding other ones.
"A word is missing, a calculation is off, and they make the borrower start over again," Butler said.
Patricia Hasson, president of Clarifi, a credit-counseling agency, said the process has improved but still "has too many nuances" for the typical borrower to navigate.
Schroeder wasn't surprised that PHH will be challenging the award.
"Lenders are not willing to pay hard dollars," he said. "A jury award that requires them writing a check would create a precedent."

-----------Note by Legal Research:  NO lender will willingly pay any amount which is large. In Yuba County, which is basically fairly poor and has a high unemployment rate nearly all the time, this individual lived in an enclave which is all new housing. It is outside of Marysville CA, about 45 min from Sacramento.
HBOR was not in effect until January 2013....yet the proceedings to "halt" the foreclosure according to the news, took place in 2012 or thereafter (the actual lawsuit filing date was not given, but the bankruptcy year was supposedly 2009) IF the home owner had been in bankruptcy, the foreclosure likely could not have been filed, so it would be assumed that owner was likely not in bankruptcy at the time. We could check PACER to find out if we really wanted to know, but in any event, it is great to find that a jury would award punitive damages that high.  This would mean it is indicative that the public wants financial entities to pay the price for wrongdoing.

Unfortunately, the financial entities are not usually willing to throw down money at any homeowners, but would rather outspend the homeowner so owner will give up.

The first cases filed in California were just the beginning of the testing ground and various jurisdictions in California cases would issue rulings that would occasionally be helpful. However, many of the cases were thrown out for lack of standing, statute of limitations expired, there was no duty of care, and more. Now that foreclosures have slowed down (7 years later) most of the cases filed will tend to have legal representation, and there are likely over 200 cases that have been used for guidance as to how the courts may rule, or have already ruled.

It is our opinion that while Federal Courts may not like foreclosure cases, the Federal Bankruptcy Courts are used to complex issues and usually are more tolerant with pro se filers. You can go to the Justia site and type in a bank's name for a certain jurisdiction just to see how many lawsuits have been filed against them. Even where not securitized, much of what banks have done is not proper. And since the government and the banks obviously have worked in a conflict of interest (in our opinion) it is not surprising that courts do not want to really help owners. But a jury would love to help a homeowner in many cases.

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