Nationstar Foreclosures Violate Homeowner Law California Class Action

California passed a Homeowner Bill of Rights (HOBOR) after its foreclosure crisis in 2007, “to prohibit the abusive and deceptive loan servicing misconduct” and to give homeowners a chance to retain their homes. The complaint for this class action alleges that Nationstar Mortgage, LLC, doing business as Mr. Cooper, does not follow the law and mishandles applications for loan modifications.

The class for this action is all persons whose owner-occupied California property had a first-lien mortgage held by Nationstar and who were foreclosed on after they had submitted a loan modification application, between October 1, 2017 until the Notice in this case is disseminated to class members.

Plaintiff Pia McAdams owned a home in Vista, California, with a mortgage serviced by Nationstar. McAdams bought the home in 2004. She was a teacher, but a loss of students in her class led to a loss of income and eventually to a bankruptcy and the inability to pay her mortgage.

HOBOR tries to ensure that homeowners “have a meaningful opportunity to negotiate with lenders and servicers of home loans prior to foreclosure, thereby giving them a fair chance to prevent the loss of their homes.”

Nationstar put McAdams’s account in foreclosure in October 2018 and entered a Notice of Default the following month. The Notice of Default said, “The beneficiary, mortgage servicer, or agent of beneficiary or mortgage servicer declares that it has complied with California Civil Code § 2923.5 and/or 2923.55, wherever applicable. The Declaration is attached.”

The Declaration said that “[Nationstar had] contacted the borrower to assess the borrower’s financial situation and explore options for borrower to avoid foreclosure as required by California Civil Code § 2923.5(a)(2). Thirty days have passed since the initial contact was made.”

However, the complaint alleges that Nationstar did not contact McAdams for the purpose of assessing her financial situation. Had it done so, the complaint says, McAdams would have asked for a loan modification at that time. As it was, she did not request one until she received the Notice of Default on November 21, 2018. Her problems with Nationstar continued from there.

Nationstar was to provide her with information on missing documentation or problems with the application. However, it waited a month before doing so, and by then the foreclosure sale date was set for March 22, 2019. Although she submitted the requested documents, Nationstar said one needed to be updated by April 7, 2019. Although she attempted to comply, Nationstar went ahead and sold her home on March 22.

According to the complaint, Nationstar did not comply with the foreclosure procedures set forth under California’s Homeowner Bill of Rights. Its misconduct, it says, “included disregarding notice requirements, misrepresenting deadlines, allowing its employees to sign forclosure documents without prior knowledge or review of the loan documents and loan status, and foreclosing on [McAdams’s] home after having received her loan modification application.”

Article Type: Lawsuit
Topic: Real Estate
Tags: Foreclosure, Mortgage or Loan Modifications, Mortgage-Related Unfair Practices