Indiana AG Urges Lawmakers Not to Eliminate Foreclosure ‘Settlement Conferences’

Makes me proud to have Hoosier roots!

Justice League

Indiana Attorney General Greg Zoeller is trying to stop legislation that would eliminate a consumer protection known as the “settlement conference,” which is a homeowner’s final recourse before their home goes to foreclosure, according to anannouncement on Zoeller’s website.

So far, the proposal has not received sufficient discussion or debate in committee or floor sessions, according to Zoeller. He urged Indiana lawmakers to stop the proposal before it gets any further in order to keep the settlement conference intact as a consumer option to avoid foreclosure and help them stay in their homes.

“After the foreclosure crisis exposed the unethical practices of major mortgage servicers, my office worked extremely hard in our multistate investigation against five major banks to create new consumer protections for distressed homeowners,” Zoeller said. “The right created by law to a court-supervised settlement conference and face-to-face meeting between borrowers and lenders has helped thousands of…

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  1. March 12, 2015

    On January 20, 2015 my wife won a Judgment against an Indiana Debt Collector in a Southern Indiana Federal Court. The Debt collector was unanimously found guilty on all counts by a Jury of six. The decision was unanimous in that Feiwell and Hannoy P.C. intentionally violated the rules of the FDCPA.
    Synopsis of the complaint:
    Feiwell & Hannoy, P.C. (“F&H”), was retained by the Bank of America Corporation (“BAC”, BANA) to collect upon a mortgage debt and institute a foreclosure action against me and my wife, (Luda Christine Hayward/LeForge and David LeForge). Although this would seem routine, there was just one problem: the debt had already been satisfied in a sale on January 10, 2010.
    I. Background:
    My wife and I purchased/refinanced a condominium in Indianapolis, Indiana in November 2007 with a mortgage in the amount of $89,320 from Huntington National Bank. The refinanced mortgage was with Countrywide Mortgage and later assumed by (BAC), BANA, Bank of America via a buyout transaction from Countrywide Mortgage.
    In June 2009, BAC notified us that we were delinquent on the payments. Despite maintaining that we were never delinquent, we agreed to a short sale of the property, in return, BAC agreed to accept the proceeds of the short sale in satisfaction of the Mortgage. On January 6, 2010, the short sale occurred, which resulted in BAC receiving $55,533 plus an additional unidentified 40 some thousand dollars.
    On January 28, 2010, BAC retained F&H, a Debt Collection Attorney Firm in Indianapolis, Indiana. BAC informed F&H that the loan went into default on March 1, 2009, and to begin a foreclosure action and seek a personal judgment against us. F&H said they requested updated payoff figures from BAC twice, who responded with an amount in excess of $89,000, however F&H failed to personally conduct the basic search of the title/deed as required instead, on April 22, 2010 F&H sent dunning letters to each of us, indicating the non-itemized amount owed was in excess of $100,549.87 and then filed a complaint for foreclosure the very same day. See: CAUSE NO. 49-D14-10-04-MF-018380 excluding the new rule LR 49-TR 85 231 Mandatory Settlement Conferences in Mortgage Foreclosure Cases.
    We received the dunning letters on April 26, 2010, we immediately called the automated phone number listed on the dunning letters and left a message indicating the lawsuit was invalid. Immediately following the phone call we sent an email through a portal of lawyers.com demanding a call back, whereas there was no email address for F&H listed on its website or in the dunning letters F&H sent.
    We received no response from F&H whatsoever. We then contacted as many public officials as we could to help us stop F&H’s pursuit against us. We faxed a Request for Validation to F&H on May 19, 2010 at, which F&H said they received two days later.
    A week later on May 26, 2010, F&H said they requested a validation of the debt from BAC. F&H said the next day; BAC responded stating that the property had been sold in a short sale and furthermore advised F&H to immediately close the file. In the meantime F&H received communication from the new owner of the home stating as such. F&H still ignored us. F&H stated that on June 1, they prepared a motion to dismiss the foreclosure litigation. After almost a month they eventually filed a one page motion on June 25, 2010 stating; they had communicated with us and agreed to dismiss the complaint against us With Prejudice, however none of this was true and in fact F&H never contacted us whatsoever throughout this fiasco. We later discovered that F&H intentions were to file another foreclosure lawsuit against us in the future. (Thus the “With Prejudice” request) The complaint was dismissed by a lower court Judge the next business day based on a complete fabrication of the truth and the Judge was none the wiser. F&H never bothered to contact us at any time before or after, they simply ignored us altogether.
    On April 19, 2011 my wife filed suit against F&H for violations of the FDCPA. She specifically alleged that F&H violated sections 1692d, 1692e, and 1692f. See: CAUSE NO. 1:11-cv-0526 RLY-TAB/DKL

    II. Discussion:
    A. Did F&H violate the FDCPA?
    F&H asserted that they did not violate the FDCPA, for several reasons.
    1. F&H stated they were allowed to rely on information provided to them by the creditor.
    In answering a motion for Summary Judgment F&H filed on November 27, 2013 the Honorable Judge Young stated; that F&H missed the mark in that Section 1692e
    Prohibits a debt collector from using “any false, deceptive, or misleading representation
    or means in connection with the collection of any debt.” 15 U.S.C § 1692e. This section
    is construed as a strict liability statute. See Wahl v. Midland Credit Management, Inc.,
    556 F.3d 643, 646 (7th Cir. 2009). The information that F&H sent to the LeForges in the
    initial letter to collect the debt was false; F&H does not dispute this fact. Therefore, F&H violated the FDCPA by sending a false representation of the debt. F&H’s claim that it was allowed to rely on the information provided by the BAC,
    2. F&H also stated that they were entitled to the “bona fide error defense in that it was a minor mistake and should not be held liable under its defense.

    On January 20, 2015 a jury of six unanimously agreed that F&H intentionally violated the rules of the FDCPA.

    B. Is F&H entitled to the “bona fide error” defense?
    As stated by the Honorable Judge Young: In order to utilize the bona fide error defense, the collector must show that its Violation of the FDCPA was (1) unintentional, (2) resulted from a bona fide error, and (3) that the collector had maintained reasonable procedures to avoid any violation of the Act.
    The Honorable Judge Young went further to respond to F&H’s bona fide error defense theory by stating; the court cannot determine that, as a matter of law, F&H followed their procedure requiring an immediate cessation of the debt collection because the parties dispute when F&H first learned that the debt was invalid. LeForge indicates that F&H was told on April 26, 2010, and F&H maintains that it did not receive notice until May 21, 2010.
    Applying F&H’s policy of ceasing activity upon receipt of a request for validation, F&H
    took at a minimum five (5) days before seeking to verify the debt and nearly a month
    after verification before ceasing the foreclosure action. Reading the facts in the light
    most favorable to the Plaintiff, F&H took approximately one month before it sought
    verification of the debt and two months before it moved to dismiss the foreclosure action.
    A question of fact exists as to when F&H learned the debt was invalid and whether, under either of these time frames, it followed its policy of “immediately” ceasing collection activity.

    On January 20, 2015 a jury of six unanimously agreed that F&H had no defense whatsoever for a “bona fide error” The Jury collectively agreed that F&H intentionally violated the rules of the FDCPA by not having any processes or procedures in place to avoid errors.

    3. F&H declared they were not liable for violating the FDCPA simply because they were not debt collectors, merely a law firm acting in accordance to their client’s wishes.

    On January 20, 2015 a jury of six disagreed with F&H’s theory of not being liable because they were merely lawyers.

    4. F&H noted and theorized during a Teleconference with a Magistrate Judge that they were not liable for violating the FDCPA because as they stated: the plaintiff (Mrs. LeForge) did not send the May 19, 2010 Request for Validation Letter in that Mr. LeForge sent the letter requesting a validation of the debt and should not be held liable.

    On January 20, 2015 a jury of six disagreed with F&H’s theory and held that the validation request was an crucial part in complying with rules set forth by the FDCPA, furthermore F&H had an obligation to immediately cease all collection efforts once they received the validation request and chose not to.

    5. On numerous occasions F&H noted that they were not required by law to validate the debt they said we owed therefore if we wanted the debt validated we had to go to Bank of America to retrieve it.
    III. Conclusion
    After several years (around 5 yrs.) of delay tactics from F&H and their attorneys we were finally permitted to have our day in court and tell our story in front of a Jury of six. Although we were not permitted to present our evidence of damages i.e. (medical records, professional witnesses etc.) to the court we were however permitted to present evidence to show the jury that F&H had intentionally violated sections 1692d, 1692e, and 1692f of the FDCPA. We were also able to show that F&H was not altogether truthful throughout the proceedings. F&H desperately tried to convince the jury of six that they had procedures in place to justify the bona fide error defense, but when asked to present their procedures they were unable to. F&H knew from the onset that it had no processes in place but continued forward anyway. F&H even went as far as telling the Chief Judge of the Indiana Federal Court system and numerous other public officials including an investigator of the Indiana Attorney General’s Office they had procedures in place to warrant a “bona fide error” defense. On numerous occasions my wife and I asked F&H for their processes and procedure documents and on numerous occasions they said they had none, yet F&H led everyone other than my wife and I to believe they had procedures in place to warrant a “bona fide error” defense.

    After the trial’s completion I began researching venues and platforms in which to tell our story. Upon doing so I discovered that the State of Indiana has strict guidelines and rules in place to regulate how debt collectors conduct business involving consumers. After researching further I discovered that The Indiana Secretary of State requires all Debt Collectors conducting business in the State of Indiana be licensed and adhere to the guidelines and laws set forth. I then conducted a search for F&H’s license and discovered there were no records of F&H being licensed in the State of Indiana as Debt Collector. I immediately contacted our Attorney and he conducted a search for F&H’s license and came up with the same results as I did. Our Attorney suggested we contact the Indiana’s Secretary of State’s office directly. I immediately placed a call to their office and left a detailed message outlining what I was looking for. Within a short period of time I received a call back from a staff member of the Secretary of State’s Office informing me that they had no record of F&H whatsoever and that I needed to speak with the Indiana’s Attorney General’s office, and that she would transfer me there, unfortunately the call was dropped through the transfer process.

    Our attorney submitted the costs associated with bringing the case to trial (i.e. Damages, reasonable Attorney fees, travel costs, postal services, etc.) but F&H continues to play their games by boldly trying to negotiate the costs with our attorney. We are still awaiting our compensation.

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