“Substantial Compliance” in the Paragraph 22 Context


“Substantial Compliance” in the Paragraph 22 Context

By Mark Stopa

I have been fortunate enough to win a lot of foreclosure cases where the plaintiffs failed to comply with the conditions precedent set forth in paragraph 22 of the mortgages upon which they’re suing … but I certainly haven’t won them all.  On those occasions where I did not win, it was typically because a judge ruled that Florida law required only the bank “substantially comply” with the conditions precedent in paragraph 22, and the letter which was sent comported with that standard.  Most judges before whom I’ve appeared have not employed this principle of law, but a few have.

Recently, a judge denied one of my motions for summary judgment, asserting “substantial compliance” as the legal standard, without a single case cite being submitted.  This really troubled me, and it prompted me to do a LOT of research and write this 14-page Memorandum of Law.

Please read the memo.  Understand the issues.  Realize there’s more to complying with the conditions precedent in paragraph 22 than the bank sending a letter – the letter must contain certain, specified information.  Be sure and argue that “substantial compliance” is not the legal standard in Florida, but, even if it were, that the mere sending of a letter is not “substantial compliance.”

More here…

Copy of the memorandum below…





One Response to ““Substantial Compliance” in the Paragraph 22 Context”
  1. robert tatge says:

    Robert L. Tatge Feb 13, 2013

    (Prior) 13100 Skyline Drive
    P.O. Box 363
    Spicer, MN 56288

    Fifth Third Bank
    Fifth Third Center
    Cincinnati, OH 45263

    Paul-Allen Bixler, fax: 513-358-3493
    Regulatory Support Specialist
    Office of the President, To whom this may concern;
    This letter is further concern on issue# 20130122.103, dated January 24, 2013.
    Mr. Bixler, you’re very good at covering up a lot of wrong doing by Fifth Third Bank.
    I would like my home back FREE AND CLEAR, with an estimated(real) value of $140,000 (appraisal dated 2011). I’ve seen your workings and know you can do this because of the wrongful foreclosure you’ve done on me so far. Dated 11/16/11
    I challenge you to do right by correcting the wrong.
    1. I believe Fifth Third Bank bought questionable loans from Country-wide Home Loans and received a kick-back from them through a PMI fund set-up for such a transaction with many investors for the propose of bottom line profits?
    2. The belief that Fifth Third Bank, or Country-wide hired Brokers, using them when questionable loans asking for a modification or refinancing, I believe this wasn’t out of the question, because of the doubting up of the Appraisals and kick-back of $350.00
    3. My credit report cleaning. I have that report.
    4. I filled out Fifth Third Bank loan application, completed all requirements including insurance on the property and was approved. Then after the first month the payment amounts began to change, from $2841.25 to $2397.00 and continue to increase the first year.
    5. Then after 5/3 Bank paid my Home-owners Insurance out of my Escrow Account. Fifth Third Bank without a follow-up to the Insurance Policy they had on account, they charged or Forced Placed Insurance on me on 7/01/2008 for $2575.32 from American Security Insurance Company. P.O. Box 50355, Atlanta, GA 30302
    Exhibit A1, 2008 form 1098 mortgage interest statement.
    Note: Fifth Third Bank Sued over Alleged Kickbacks of Mortgage Insurance, by Alex Ferreras on April 9, 2012 in Real Estate
    6. Then TODAY, FEBRUARY 13, 2013. I looked back over Fifth Third Bank papers, and I founded out they had charge me again in June 2009 for Force Placed Insurance at $2575.32 You owe me!
    Exhibit A2, Annual Escrow Account Disclosure Statement
    Without prejudice,
    Robert L. Tatge, RE: Mortgage Loan 404876203

    Office of Minnesota Attorney General, Lori Swanson
    % Honorable Bill Gosiger fax: 651-282-2155
    File: 439011
    Feb 6, 2013
    From: Robert L. Tatge, 320-796-2314
    P.O. Box 363
    Spicer, MN. 56288

    Hello Bill Gosiger,
    Hope your doing well!
    Our last phone conversation, you said to get back to you.
    I have not given up getting my home back!
    February 1, 2013, the same representative from Fifth Third Bank that covered up the Forced Placed Insurance sent me a letter? Enclosed Please follow-up. Thank you! Robert

    Have I been left out of any recourse with Fifth Third Bank? I believe they committed FRAUD to no end… Maybe Country-wide, now Bank of America, started my wrongful foreclosure with the PMI they’re charging me and paid Fifth Third Bank to take over questionable loans…. WITHOUT PREJUDICE… My findings below…
    EXHIBIT “1”, Countrywide monthly loan statement- 4 pages.

    ADDENDUM written to report findings by association of FRAUD and KICKBACKS
    Alleged by Fifth Third Bank Mortgage and Country-wide home loans.
    1. THIS ADDENDUM hereby supplements the attached Publication concerning the following
    Article: Fifth Third Bank sued over alleged kickbacks of mortgage insurance
    April 7, 2012 12:00 am http://www.post-gazette.com/stories/busi….
    By Rich Lord / Pittsburgh Post Gazette (manuscript title) Key Quote:
    “Unknown to the borrowers, Fifth Third had arrangements with the insurers under which they bought “reinsurance” from a subsidiary of the bank called Fifth Third RE, according to the complaint. The reinsurance, it said, was written in a way that the bank assumed little or no risk.
    The insurers “had no choice but to enter into virtually identical reinsurance contracts with Fifth Third RE or risk losing business,” the complaint said.”
    A Cincinnati-based bank is accused in a lawsuit filed Thursday of taking “disguised, unlawful referral fees” or “kickbacks” from mortgage insurers.

    The lawsuit against Fifth Third Bank, several related companies and six mortgage insurers by three borrowers seeks to become a nationwide class action. It appears to be one of several similar suits against banks following a 2009 ruling by the 3rd U.S. Circuit Court of Appeals, in a case by some of the same attorneys who are now suing Fifth Third, that opened the door for such litigation.

    The plaintiffs, Christopher Manners of Latrobe and Jamie and Aimee Young of Carbon Cliff, Ill., got mortgages from Fifth Third in 2007, according to the complaint in U.S. District Court.

    When homebuyers are unable to make down payments of 20 percent of the home’s purchase price, banks typically require private mortgage insurance on the loan. The bank picks the insurer and arranges for the coverage, against which it makes a claim if the borrower defaults. The borrower pays the premium as part of their mortgage payment.

    Fifth Third arranged insurance for Mr. Manners at a cost of $166.80 per month, and for the Young’s for $33.35 per month, according to the complaint.

    Unknown to the borrowers, Fifth Third had arrangements with the insurers under which they bought “reinsurance” from a subsidiary of the bank called Fifth Third RE, according to the complaint. The reinsurance, it said, was written in a way that the bank assumed little or no risk.

    The insurers “had no choice but to enter into virtually identical reinsurance contracts with Fifth Third RE or risk losing business,” the complaint said.
    Fifth Third from 2004 through 2011 got $54 million in reinsurance premium payments from the insurers, and only paid out $4.9 million in claims, according to the complaint. It said that this amounted to “a sham” and a violation of the Real Estate Settlement Procedures Act. RESPA bars lenders from taking referral fees from other parties involved in the loan, the complaint said.

    Fifth Third spokeswoman Barbara Grimsley said the bank doesn’t comment on litigation.

    Pittsburgh attorney Stephen J. O’Brien and several other lawyers filed the complaint. They could not be reached for comment Friday.

    Some of those attorneys — though not Mr. O’Brien — represented plaintiffs in an Eastern Pennsylvania lawsuit against lender Countrywide Financial Corp. and its reinsurance subsidiary that was resolved last year.

    That lawsuit was initially dismissed when Countrywide argued that the contracts between its subsidiary and the private mortgage insurers didn’t result in any overcharges to consumers. But the 3rd Circuit found that RESPA could be violated even if there were no overcharges.

    That lawsuit was settled with the creation of a $34 million settlement fund to cover payments to Countrywide borrowers and the attorneys.
    Rich Lord: rlord@post-gazette.com or 412-263-1542.
    First Published 2012-04-07 04:08:47

    2. Other parties, alleged Publications supplemented to this Addendum are:(corresponding author) Parties alleged guilt by Association:
    The several denials for modifications by Country-wide, than Fifth Third Bank approval and all the exaggerated documents like Appraisal, Credit, and later Forced Placed insurance, than covering it up as it was never on record. Now because of the OCC dispute. I received a Letter from the very person at FITH THIRD BANK that covered up the “Forced Placed Insurance, Fraud they did to me”. They need to give my home back to me with comp! Without prejudice!
    Robert Tatge Feb 6, 2013
    (Date) August 22, 2008 Hassan Nagi Indicted in $1.9 Million Michigan Mortgage Fraud Scheme A federal grand jury in Michigan has indicted four men–including a mortgage broker and an appraiser–for allegedly running a $1.9 million real estate/mortgage fraud scheme. Hassan Nagi, 30, of Dearborn Heights, Michigan; Ali Haidous, 24, of Dearborn; Safi Bzeih, 35, of Dearborn; and Hussein Aoun, 23, of Dearborn Heights reportedly conspired to secure fraudulent mortgages from Countrywide Bank, Washington Mutual, Fifth Third Bank, Indy Mac Federal Bank, Net Bank, and Sun Trust for more than 15 properties between April 2005 and April 2008.
    The indictment alleges that Hassan Nagi worked as a mortgage broker and was responsible for submitting false and fraudulent applications to obtain the mortgages. Ali Haidous was a real estate appraiser who provided fraudulent appraisals for the properties. Bzeih and Aoun recruited sellers and straw buyers for the properties.
    According to the indictment, after the Nagi and Haidous identified a willing seller of a property, Nagi secured financing for a straw buyer. False income and employment information was provided to the lender using fraudulent W-2 forms. In support of each loan, Nagi also submitted an inflated appraisal, created by Haidous.
    After the inflated mortgage was funded at closing, the seller received sufficient funds to pay off any existing mortgage as well as a bonus for participating in the real estate fraud scheme. The remainder of the proceeds from the inflated mortgage were shared between Hassan Nagi, Ali Haidous and one of the straw buyers.
    Nagi, Haidous, and Bzeih were expected to appear in federal court before Magistrate Judge Virginia Morgan yesterday afternoon, for their initial appearances and arraignment on the indictment. Hussein Aoun is a fugitive in Lebanon. The case is being prosecuted by Assistant U.S. Attorney Leonid Feller.
    Posted By: Ralph Roberts @ 9:07 pm | | Comments (0) | Trackback |
    Filed under: Countrywide, Fifth Third Bank, Indy Mac, Michigan, Mortgage Fraud, Net Bank, Real Estate Fraud, Sun Trust, Washington Mutual

    3. ASSOICATION GUILT: February 14, 2010
    Kurt Heintz Broker and Appraiser Sentenced for Multi-Million Dollar Mortgage Fraud Scheme Former Flint Area Real Estate Broker and Appraiser Sentenced for Multi-Million Dollar Mortgage Fraud Scheme
    Kurt Warren Heintz, age 39, of Grand Blanc, Michigan, formerly the owner of Great Lakes Broker Funding in Grand Blanc, Michigan, was sentenced on Wednesday, February 10, 2010, to 65 months in the custody of the Bureau of Prisons on one count of Financial Institution Fraud in violation of Section 1344 of Title 18 of the United States Code. Sentenced at the same time was James Fish, age 41, of Royal Oak, Michigan, formerly a licensed real estate broker in the State of Michigan, who was sentenced to serve 30 months in the custody of the Bureau of Prisons on one count of Financial Institution Fraud in violation of Section 1344 of Title 18 of the United States Code.
    The sentences were announced today by United States Attorney Barbara L. McQuade. Ms. McQuade was joined in the announcement by Andrew G. Arena, Special Agent in Charge, Federal Bureau of Investigation, Detroit Field Office. The sentences were imposed by the Honorable Sean F. Cox, United States District Judge sitting in Detroit.
    On February 6, 2009 and February 4, 2009, respectively, Mr. Heintz and Mr. Fish pleaded guilty to a one-count Information charging that they had devised and executed a scheme to defraud Indy Mac Bank though the use of a fraudulent mortgage loan application based on a false and inflated property appraisal. Although Mr. Heintz and Mr. Fish pleaded guilty to one count of Financial Institution Fraud, they agreed to be held responsible for the full extent of their scheme to defraud financial institutions in the Flint metropolitan area. This scheme to defraud began in May of 2005 and continued through 2007. In addition to Indy Mac Bank the victim financial institutions included, Fifth Third Bank, Bank of America, Independent Bank, Mercantile Bank, and Union Federal Bank. The Federal Bureau of Investigation conducted of a review of the mortgages obtained in the course of this scheme to defraud and calculated the loss to these and other lending institutions at more than $14.4 million.
    In sentencing Heintz and Fish, Judge Cox carefully reviewed and summarized the facts of the case, as well as the background and circumstances of each defendant. Judge Cox expressed his “shock” that Mr. Heintz had chosen to devise and commit such a serious and devastating crime. In sentencing Mr. Fish, Judge Cox said his sentenced had been heavily influenced by the fact that Fish had stolen the identity of other appraisers and used them on fraudulent appraisals. In addition to the millions of dollars lost by lending institutions, Judge Cox noted the devastation caused to entire neighborhoods, the financial cost to unsuspecting purchasers and the damaged and destroyed careers of innocent appraisers.
    In addition to their custodial sentences, Mr. Heintz was ordered to pay, jointly and severally with Mr. Fish, $14,467,546.50 in restitution to various financial institutions, and Mr. Fish was ordered to pay, jointly and severally with Mr. Heintz, $4,992,400. Each was ordered to pay a $100 special assessment and must serve three years of supervised release upon the completion of their custodial terms.
    FBI Special Agent in Charge Arena said that, “These charges and sentences underscore the seriousness with which the United States Attorney’s Office, the Federal Bureau of Investigation, area financial institutions, as well as other local, state and federal law enforcement agencies and regulators, view allegations of mortgage fraud. Mortgage fraud continues to have significant and devastating consequences for the Michigan economy. It is important that investors, consumers and real estate professionals, as well as the public in general, recognize that schemes to defraud involving mortgages and real estate transactions will result in the incarceration of the offenders.”
    Posted By: Ralph Roberts @ 9:22 pm | | Comments (0) | Trackback |
    Filed under: Uncategorized

    Bill Gosiger, if you have any questions, please feel you can call 320-796-2314. I work-out from 1:30 till 3:00 every day.
    With respect,
    Robert L. Tatge

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