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Judge Summons Mortgage Lending Executive to Answer Under Oath to Homeowner in Bankruptcy

September 10, 2009

As Irvine bankruptcy attorneys who work closely with homeowners struggling to get responses from their banks, we were delighted to see one lender's executive questioned under oath about his company's practices. The New York Times reported Sept. 3 that Bobbi Giguere, a suburban Phoenix homeowner, was allowed to question the senior vice president of Wells Fargo Home Mortgage Servicing in court. U.S. Bankruptcy Court judge Randolph J. Haines summoned Joseph Ohayon to explain under oath why the company never responded to her multiple requests for a loan modification.

Giguere, 41, is divorcing a husband who no longer pays any part of the mortgage. She has also lost her job and now subsists on unemployment and other state aid. She submitted loan modification paperwork months ago, only to be told that the bank had lost it -- twice. Altogether, she submitted the paperwork three times and never got a response. At trial, Ohayon, the Wells Fargo executive, testified that Giguere had never sent a financial worksheet the bank required. But on cross-examination, Giguere pulled out a letter from Wells Fargo proving that it had never requested any such worksheet, which Ohayon conceded. He testified that the bank had decided in March that Giguere did not qualify for a loan modification under the federal Making Home Affordable plan, but didn't tell her until this hearing.

According to the Times, Haines and other bankruptcy judges are increasingly frustrated by mortgage servicers' apparent incompetence at communication and record-keeping, which eventually drives some mortgage holders into bankruptcy court. Our Pomona bankruptcy lawyers are pleased to see that judges are just as frustrated as attorneys and clients by this situation. Like bankruptcy attorneys, judges are on the front lines of the foreclosure crisis; they have a firsthand view of how this bad behavior by banks can devastate ordinary families' finances. Without a clear answer, homeowners may get deep into credit card debt, waste money on a fraudulent loan modification company or declare bankruptcy and ruin their credit for years. All companies should practice clear communication and other good business practices, but banks owe those to customers whose financial futures are at stake.

Anaheim-based Howard Law LLP represents people throughout California who are exploring bankruptcy as a way to regain control of debts that have become uncontrollable. If you're a homeowner trying to avoid foreclosure through bankruptcy, we can guide you through the complicated process of a Chapter 13 bankruptcy, the most common kind for homeowners. Our Riverside County bankruptcy attorneys can tell you whether you meet the requirements; help you through the years-long payment plan; and advise you on any tax or other financial consequences. If bankruptcy is not the right option for you, we can also help you resolve your mortgage problems through our loan modification practice.

If you feel like you're drowning in debt, you don't have to face it alone. Howard Law offers confidential and completely free case evaluations where you can learn more about your financial options and your rights. To set one up, please call us toll-free at 1-800-872-5925 or contact us through the Internet.