Wim for the little guy against DCs

http://finance.yahoo.com/news/debt-collectors ... -160703389.html

Debt collectors beware: Judge's ruling could change the game
A case in New Jersey could affect how debt collection services and their attorneys operate

By David Porter, Associated Press 2 hours ago

HAWTHORNE, N.J. (AP) -- Ever had a debt collector on your back for money you knew you didn't owe? Listen to the story of Steven Psaros and take heart.
The Great Recession forced Psaros into foreclosure on the house he had bought in this northern New Jersey town in 1999.
Then, another blow. A debt collector demanded about $11,000 in homeowners' insurance, money Psaros claimed he didn't owe under terms of a mortgage refinance signed several years earlier.
He fought back in court and, in a ruling that could change how law firms handle debt collection, a federal judge held last month that the firm representing the debt collector could be liable for damages even if it didn't know its client was relying on incorrect information.
Some experts see the ruling as a game-changer in foreclosure actions, which by their nature target people who are under emotional and financial stress.
"Think of the psychological state of people going through foreclosure," said Seton Hall law school professor Charles Sullivan, who specializes in contracts and employment law. "They can't pay their mortgage and they think they're going to be in foreclosure. They're not looking at the papers, and if they are, whether it's $360,000 or $370,000, neither is a sum they can pay. They may not even seek an attorney. But attorneys in the past didn't have the tools this this decision now gives them."
The debt collection industry is a top source of complaints from consumers, according to the federal Consumer Financial Protection Bureau. Formed in 2011, the bureau began collecting complaints in its system in mid-2013; by the end of that year, it had received more than 30,000 complaints about debt collectors.
The most frequent complaints were about debt collectors attempting to gather money that wasn't owed. And according to Psaros' lawsuit, his case falls under that category.
In an email, he said he suffered economic losses during the recession in 2009. According to his suit, BAC Home Loans Servicing, through the law firm Stern, Lavinthal and Frankenberg, filed a debt collection foreclosure action in September 2010. Servicing for the mortgage was later taken over by St. Paul, Minnesota-based Green Tree Servicing.
Through a deal he negotiated when he refinanced his mortgage in 2008, Psaros was paying property insurance and real estate taxes directly, rather than through an escrow account managed by the lender. Last April, however, Green Tree allegedly sent him a letter telling him he owed $10,974.37 for insurance premiums.
Psaros sued Green Tree and Stern Lavinthal in federal court last June, and in the fall the law firm asked U.S. District Judge Jose Linares to dismiss Psaros' claim because it hadn't demonstrated "any false or misleading representation by Stern Lavinthal that might give rise to liability" under the federal Fair Debt Collection Practices Act.
The judge disagreed, writing last month that the firm "cannot evade its responsibilities as a debt collector by blaming its client for providing it with factually inaccurate information used in the process of collecting a debt."
Sullivan predicted the ruling will lead to fewer mistakes as law firms become more vigilant in checking their clients' claims when seeking to collect debts.
Adam Deutsch, an attorney representing Psaros for the Westwood-based Denbeaux and Denbeaux law firm, said the ruling "sends a message to people on the collection side that you can't just assume the information you're being provided by your client is accurate."
An attorney representing Stern Lavinthal declined to comment, and an attorney for Green Tree didn't respond to a request for comment

I hope to God this ruling stands because the debt collection industry is going to appeal this one all the way to the Supreme Court.   The ruling demands a level of care and accuracy on the part of debt collectors, their lawyers and assigns that will make a lot of third-party zombie debt that has nothing supporting it beyond the demand for payment virtually uncollectible, because pleading ignorance on defective debt isn't going to be enough anymore.     A lot of "law firms" that have specialized in electronically dumping thousands of law suits into the courts with no more care than  most of us would throw out a bag of trash, and with very questionable service on the defendant to boot, may be thinking twice about their conduct if any one of those suits could be a potential land mine blowing up in their faces.

Green Tree has such a wonderful track record.  They have to pay $63 Million to settle a Federal Lawsuit.

http://www.consumeraffairs.com/news/green-tre ... ges-042115.html

"Green Tree mortgage servicing company will pay $63 million to settle federal charges that it harmed homeowners with illegal loan servicing and debt collection practices.

The Federal Trade Commission and Consumer Financial Protection Bureau allege that Green Tree Servicing LLC made illegal and abusive debt collection calls to consumers, misrepresented the amounts people owed, and failed to honor loan modification agreements between consumers and their prior servicers, among other charges.

Under the proposed settlement, Green Tree will pay $48 million to affected consumers and a $15 million civil penalty. The company also will create a home preservation plan for some distressed homeowners.

“It’s against the law for a loan servicer to lie about the debts people owe, or threaten and harass people about their debts,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Working together, the FTC and CFPB are holding Green Tree responsible for mistreating homeowners, including people in financial distress.”

Green Tree has become the servicer for a substantial number of consumers who were behind on their mortgage payments at the time their loans were transferred to Green Tree. Because homeowners cannot choose their servicer, they are locked into a relationship with the company for as long as it services their loans.
Illegal debt collection practices
Greentree Finance April 21, 2015, 5:39 p.m.
Consumers rate Greentree Finance

According to the FTC and the CFPB, Green Tree’s collectors called consumers who were late on mortgage payments many times per day, including at 5 a.m. or 11 p.m., or at their workplace, every day, week after week, and left many voicemails on the same day.

They also unlawfully threatened consumers with arrest or imprisonment, seizure of property, garnishment of wages, and foreclosure, and used loud and abusive language, including calling consumers “deadbeats,” mocking their illnesses and other struggles, and yelling and cursing at them.

The company also allegedly revealed debts to consumers’ employers, co-workers, neighbors, and family members, and encouraged them to tell the consumers to pay the debt or help them pay it. The complaint also alleges that Green Tree took payments from some consumers’ bank accounts without their consent.

The agencies also allege that Green Tree pressured consumers to make payments via Speedpay, a third-party service that charges a $12 “convenience” fee per transaction, claiming it was the only way to pay, or that consumers had to use the service to avoid a late fee.
Mishandled Modifications, Delayed Short Sales

According to the complaint, in many instances, Green Tree failed to honor loan modifications that were in the process of being finalized when consumers’ loans were transferred from other servicers to Green Tree. This resulted in consumers making higher monthly payments, receiving collection calls, and even losing their homes to foreclosure.

Green Tree also allegedly misled consumers about their loss mitigation options. The company told some consumers who were behind on their mortgages that they needed to make a payment to be considered for a loan modification, even for programs that prohibited the company from requiring up-front payments.

In addition, Green Tree took up to six months to respond to consumers’ short sale requests despite telling them it would respond much more quickly. These delays caused consumers to lose potential buyers, miss other loss mitigation options, and face foreclosures they could have avoided.
Misrepresented account status

According to the complaint, Green Tree misrepresented the amounts consumers owed or the terms of their loans. This included telling consumers they owed fees they did not owe, or that they had to make higher monthly payments than their mortgage contracts required. The company often knew or had reason to believe that specific portfolios of loans it acquired from other servicers contained unreliable or missing information.

In many instances, it should have known that consumers had loan modifications from prior servicers and therefore owed lower amounts. And when consumers disputed the amounts owed or terms of their loans, Green Tree failed to investigate the disputes before continuing collections.

Green Tree also allegedly furnished consumers’ credit information to consumer reporting agencies when it knew, or had reasonable cause to believe, that the information was inaccurate, and failed to correct the information after determining that it was incomplete or inaccurate – often when consumers told Green Tree about it."

Judge Linares made the right call. The FDCPA bars false and misleading representations. It does not say that ignorance is an excuse. Lawyers are supposed to have their facts straight before trying to extract relief for their clients. The CFPB is raising hell right now against debt collection attorneys who lack "meaningful involvement" and fly their cases on auto-pilot.

Seeing BAC and Green Tree in this mix is less than surprising. They have each been spanked through federal enforcement actions for chronic bungling and hostile treatment of borrowers. BAC was formerly Countrywide, already known as a ham-and-egg operation before Bank of America's eager purchase of the troubled firm. At the time they made a fitting pair, given BoA's own callous disregard for the rights and wallets of its customers.

Bank of America Subsidiary Reversing or Refunding $36 Million in Fees to Resolve FTC Allegations That it Overcharged Struggling Homeowners
Excessive Default-Related Fees Allegedly Violated Earlier Countrywide Settlement
https://www.ftc.gov/news-events/press-release ... 36-million-fees

National Mortgage Servicing Company Will Pay $63 Million to Settle FTC, CFPB Charges
Green Tree Servicing Allegedly Deceived Homeowners, Many of Whom Were Already in Financial Distress
https://www.ftc.gov/news-events/press-release ... -million-settle

Greentree is a frequent flier in these pages and so is Countrywide.  I really like the idea that these cretins need to start being sure of what they do before they go after nonexistent debt.  At least we know that we have one government agency doing its job.

It's industry wide with abuse and exploitation with all the major financial players trying to get their piece of the American pie!
"Dec 19 2013 CFPB, State Authorities Order Ocwen to Provide $2 Billion in Relief to Homeowners for Servicing Wrongs"
http://www.consumerfinance.gov/newsroom/cfpb- ... rvicing-wrongs/

One of the great miscarriages of justice during the subprime mortgage meltdown in 2008, was the fact that Countrywide CEO Angelo Mozilo didn't end up doing a long stretch in a federal prison, as he so richly deserved.

from the comment section :

=====  The case is PSAROS v. GREEN TREE SERVICING, LLC. et al, No. 2:2015cv04277

===== "mulling" said :
When a person speaks with a lawyer about suing someone on an individual basis, the lawyer normally looks at the facts as presented and advises to sue or not based on the extent to which facts support suit. If the firm files the suit and later determines that some of those facts are wrong and the suit is not a good bet, they normally advised the client and withdraw. Going ahead with bad facts should make the lawyer liable. He advised in favor of an pressed the suit. He is the so-called expert in the matter. Hurray for this judgment.