As Pomona loan modification lawyers, we were surprised and impressed by a recent article from the Los Angeles Times. The piece, dated August 5, discusses the fight by 23-year-old Zeenat Ali to help her parents avoid foreclosure on their Diamond Bar home. Ali is not an attorney and has no special legal background, but the article says she has won several victories in the family's struggle with Deutsche Bank, the holder of the mortgage. She has won procedural fights on the foreclosure itself, and is also suing the bank, alleging that it marketed the family's refinancing loan deceptively and later reneged on an offer to modify that loan. The Alis may still lose their home, the article said, but Zeenat Ali has successfully delayed the foreclosure and impressed observers with her untrained legal skills.
Her parents, Shahida and Ather Ali, had lived in the home for 24 years and raised three children there. When they came from Pakistan, they were an engineer and a doctor, but in 2005, they decided to open an adult day-care business. To do that, they took out a loan for $800,000 from the Small Business Administration, using the home as collateral. Then they refinanced the house with an option-adjustable-rate mortgage for $250,000. They kept their payments low at first to put money into the business, but that increased the loan balance, just in time for high-interest payments to start. The home was foreclosed in December and they stopped paying the loan four months ago.
In her lawsuit, Zeenat Ali argues that the refinance loan was marketed deceptively. But a large part of the suit deals with how Deutsche Bank handled the foreclosure. She alleges that the Alis' mortgage servicer rejected a $30,000 check from her parents in November, saying they had to apply for a loan modification first. So the Alis filled out the loan modification paperwork within a week and sent it back with the check. In the meantime, she alleges, Deutsche Bank was in the process of foreclosing on the house, without notifying the family as required by law. A bankruptcy attorney told the newspaper that even if the Alis win this claim, they may not collect much money and may still lose their home. Zeenat Ali successfully fought attempts by Deutsche Bank to move the lawsuit into federal court -- impressing legal observers -- but because foreclosure is still a real possibility, she has now hired a lawyer to help.
Our Orange loan modification attorneys wish the Alis well in their lawsuit and foreclosure. If the rejected $30,000 payment -- a substantial number -- was enough to keep them out of foreclosure, Ali may be able to successfully argue that the bank should never have foreclosed to begin with. However, under the Truth in Lending Act or a claim for common-law negligence, the actual damages -- that is, the financial loss to the family -- may be calculated according to the equity they had in their home. In this case, that could be little or nothing, because the home is worth less than their loan debt. "Statutory damages" awarded under the TILA have a maximum of $2,000 -- which is unlikely to make up for the loss of a home of nearly 25 years. This case exposes a flaw in consumer protection laws that gives lenders minimal consequences for abusing their borrowers.
Howard Law PC represents mortgage borrowers who cannot draw on the time and skills of a Zeenat Ali, but who need help fighting an unfair foreclosure. Our Aliso Viejo loan modification lawyers have represented borrowers in loan modification negotiations from the beginning of the financial crisis. We are proud to say we've been able to help many homeowners get the modifications they need to stay in their homes at a realistic monthly payment. That includes swapping out pricey option ARM loans or other subprime loans for standard ones, as well as changes to the loan's interest, repayment period and more. When we find violations of the client's rights -- including the deceptive marketing of a pricey or unfair loan -- we can and will pursue a predatory lending lawsuit in addition or instead. Whenever possible, we want our clients to end up with a sustainable mortgage payment free of exploitation.
If you need a loan modification but your lender won't even communicate clearly, you should call Howard Law. To learn more about your legal options at a free consultation, contact us through our website or call toll-free at 1-800-872-5925.