• Consumer Protection Law and Advocacy — Chicago, IL

Homeowner & Tenant Rights

Do I have rights as a homeowner - Chicago Law - Bardo Law PC

Banks Continue Abusing Homeowners In Foreclosure

Ten years after the foreclosure crisis, banks continue to abuse homeowners in foreclosure.  During foreclosure, homeowners and rightful tenants may legally occupy foreclosed property.  Many times, the homeowner has requested a loan modification or is actively defending a foreclosure proceeding.  In fact, Illinois law requires banks  to tell consumers how much time they have to live in a home before they may have to move.  Back in 2015, the Illinois Attorney General took action (http://www.illinoisattorneygeneral.gov/pressroom/2015_06/20150603.html) but the same violations continue three years later.

Bardo Law continues to receive calls from consumers illegally displaced from their homes.  Using a provision in the mortgage contract, banks claim they have the right to “protect” vacant or abandoned homes.

But often, the banks are prematurely evicting homeowners — changing locks, turning off water, and beginning demolition work.  Some of our clients come home from work to find they can’t enter their homes.  In some cases, their personal belongings are missing or damaged.

The firm has successfully brought multiple cases against several banks and their property contractors for this illegal conduct.

Most recently, Bardo Law secured victory on two separate motions to dismiss filed by defendants in the U.S. District Court for the Northern District of Illinois.  If you have been victimized by wrongful conduct while you are in foreclosure and would like to pursue legal action, call us for an intake appointment.

 

 

Homeowner Rights & Tenants Rights - Bardo Law PC

Home Repair Fraud – How to Avoid It

Home repair fraud lawsuits are often hard to file because the contractor has skipped town.  So what do you do to minimize your chances of falling victim to a home repair scam in the first place?

  • Beware of any contractor that comes to your home unannounced and promises home repair work in a very short time and at a low cost.  If it sounds too good to be true, it usually is.
  • Before signing any home repair contract, do an online search for any complaints against the contractor.  It’s also a good idea to check the Circuit Court of Cook County website to make sure other homeowners haven’t sued that contractor or the company.
  • Be cautious about paying cash.  If the contractor skips town and the work isn’t done, your money is likely gone for good. However, if you pay by credit card, you may be able to dispute the charge with your credit card company.  Check your credit card’s terms and conditions to see how long you have to dispute a charge and follow the instructions for disputing that charge in writing.
  • Do not pay on any home repair or remodeling contract over $1,000 unless the contractor gives you a copy of the “Home Repair: Know Your Consumer Rights” pamphlet.  This pamphlet will explain what every home repair contract must include, namely: (1) the contractor’s full name, address, and telephone number; (2) a description of the work to be performed; (3) starting and estimated completion dates; (4) the total cost of work to be performed; (5) the schedule and method of payment, including down payment, subsequent payments, and final payment; and (6) a provision stating the grounds for termination of the contract by either party.

What are other telltale signs of possible home repair fraud?  A contractor who changes payment terms during the project, demanding “progress” payments that were not originally agreed to.  This can mean the contractor is short on cash and is using your money to pay for materials needed on another project. Also, if you pay for materials, make sure the contractor gives you a release of lien showing the subcontractor or store was paid.  Don’t be stuck paying the contractor for materials that he doesn’t pay for.

Home repair and remodeling projects can be so rewarding if done by the right team of contractors. Make sure to do your homework and don’t be pressured into a job if you have any doubts.

Mortgage Servicing Rules Updates

The Consumer Financial Protection Bureau recently announced mortgage servicing rules updates.  Read the alert at http://www.consumerfinance.gov/about-us/blog/weve-updated-our-mortgage-servicing-rules-provide-greater-protections-mortgage-borrowers-and-other-homeowners/.  Here are some of the important highlights:

  • When a homeowner applies for a modification, deed in lieu, or other alternative to foreclosure (known as “loss mitigation”), the servicer must let the borrower know when their application is complete.  In the past, servicers would fail to keep borrowers informed as to the status of their applications.  This rule seeks to improve servicer accountability.
  • Homeowners may now be eligible to apply for loss mitigation more than once.  For example, if a loan modification is initially rejected, the homeowner may re-apply.
  • Family members, heirs or successors shall have increased rights.  If ownership in a mortgaged home is transferred due to death, divorce or legal separation, servicers are now required to provide information and notices to these successors.
  • Only limited extensions will be given to new servicers on loss mitigation applications.  Now, if servicing transfers, generally, the new servicing entity must evaluate complete applications within 30 days.

In announcing the mortgage servicing rules updates, Bureau Director Richard Cordray stated:

The Consumer Bureau is committed to ensuring that homeowners and struggling borrowers are treated fairly by mortgage servicers and that no one is wrongly foreclosed upon … These updates to the rule will give greater protections to mortgage borrowers, particularly surviving family members and other successors in interest, who often are especially vulnerable.

If you are in foreclosure, or if you are behind in your mortgage payments and have applied for mortgage assistance, speak to an attorney regarding your options.  Keep track of all your correspondence with your servicer, maintain copies of your application paperwork, and don’t ignore important deadlines for submitting information to your servicer.

Property “Preservation” or Unlawful Trespass?

Consumers continue to have their homes invaded while they are away by so-called property “preservation” companies.  If the consumer misses a payment or a foreclosure action has been filed, the mortgage company will hire property “preservation” contractors to inspect the home.  Often times, those contractors will perform lock changes, winterize the property and turn off the water supply, and take pictures of the home’s interior, all in preparation for the mortgage company to sell the home. Unfortunately, in judicial foreclosure states like Illinois, consumer advocates explain that this conduct violates Illinois’ Mortgage Foreclosure Law, which law requires consumers to be able to remain in their homes until after a judgment of foreclosure is entered and sale is confirmed.

Last summer, the Illinois Attorney General announced settlement of a lawsuit against one such company for this type of conduct:  http://illinoisattorneygeneral.gov/pressroom/2015_06/20150603.html.

Under Madigan’s settlement, Safeguard, a Delaware corporation based in Ohio, must pay $1 million, nearly all of which will be paid to Illinois residents who filed complaints over Safeguard’s practices. Safeguard must also follow 40 operating standards in conducting inspections and other services relating to Illinois properties set by Madigan’s office to ensure homeowners’ rights are protected.

Sometimes, these contractors do not enter the home but instead, conduct repeated inspection “drive-bys” and then tag on those fees to the mortgage.  Just last week, the National Consumer Law Center announced litigation relating to the fees being asserted against homeowners for similar conduct, as explained at http://www.nclc.org/media-center/nclc-sues-nationstar-mortgage.html.

If you suspect your home has been entered, or if you have received a bill reflecting multiple inspection fees for property “preservation” services, contact an attorney for assistance.

New Mortgage Disclosures coming to help Americans

Chicago Protects Foreclosed Property Renters

An important Chicago ordinance protects foreclosed property renters.  The Keep Chicago Renting Ordinance (“KCRO”) requires foreclosed property purchasers to:

(1) Provide notice of any change in ownership to all occupants of a foreclosed property within specific time limits;

(2) Give occupants accurate contact information for the new ownership; and

(3) Tell tenants where to pay rent and how to request repairs.

Until this notice is sent, the new landlord cannot collect rent.  Further, any existing leases must generally be honored and the new landlord cannot demand that the tenant renew or relocate until the end of that lease.

Most importantly, the KCRO requires the new owner of a foreclosed rental property to either: (1) offer qualified tenants a renewal or extension of their lease (capping rent increases at 2%); or (2) pay the tenants a $10,600 relocation fee.  As the City of Chicago notes:

The KCRO is designed to address challenges facing renters and the communities where foreclosures take place.  The first goal is to increase protection for renters in Chicago and stabilize rental housing by keeping foreclosed renters in their homes.   It requires banks to either allow renters in good standing and who pay their rent to stay in their homes; or requires that they pay tenants relocation funds of $10,600 to leave the building to enable an easier transition from their housing. The fee also standardizes the “cash for keys” process.

A detailed synopsis of the Ordinance can be found at http://lcbh.org/resources/overview-keep-chicago-renting-ordinance.  It’s important for you to know if the property you are renting is subject to a foreclosure, you have rights and cannot be forced to vacate your home immediately.

Homeowner Rights & Tenants Rights - Bardo Law PC

Wells Fargo Bank, N.A. Settles With DOJ

The Department of Justice’s U.S. Trustee Program reached a national settlement with Wells Fargo over mortgage servicing complaints.  Announced yesterday, Wells Fargo will pay $81.6 million for its repeated failure to provide homeowners in bankruptcy with required payment change notices.  Even though Bankruptcy Rules require mortgage creditors to file and serve a notice before adjusting a Chapter 13 debtor’s monthly mortgage payment, Wells Fargo admits it failed to do so, impacting nearly 68,000 mortgage accounts.  Details of the settlement are available at http://www.justice.gov/opa/pr/us-trustee-program-reaches-816-million-settlement-wells-fargo-bank-na-protect-homeowners.

Homeowners will receive credits on their mortgage accounts, depending upon the mortgage balance, with an average result of $1,254 per homeowner.

Director Cliff White of the U.S. Trustee Program stated:

I am pleased that Wells Fargo has acted responsibly by accepting accountability for its deficient bankruptcy practices, agreed to compensate affected homeowners for those deficiencies and committed to making necessary improvements in its bankruptcy operations…When creditors fail to comply with the bankruptcy laws and rules, they compromise the integrity of the bankruptcy system and must be held accountable.  Transparency in the process is of paramount importance.  Homeowners in bankruptcy have the right to proper and timely notices, particularly when they are being asked to pay more.  The U.S. Trustee Program remains diligent in its effort to hold financial institutions that disregard the law accountable for their actions.

New Mortgage Disclosures coming to help Americans

New Mortgage Disclosure Rules Coming…

For years, consumer advocates have pushed for new, easier to understand disclosures. When you buy a home, the paperwork is overwhelming and, let’s be honest, almost impossible to understand. When you’re presented with papers at a real estate closing, there is never sufficient time to read, review, and process the mountain of documents you’re being asked to sign. The Consumer Financial Protection Bureau understood this problem and has announced new guidelines. Visit http://www.consumerfinance.gov/know-before-you-owe/

“The CFPB’s mortgage initiative is designed to help consumers understand their loan options, shop for the mortgage that’s best for them, and avoid costly surprises at the closing table.”Homeowner Rights and Tenant Rights - Consumer Law at Bardo Law

“Consumers will face less stress when applying for most mortgages after October 3, when our new disclosure rule takes effect. The new rule and disclosures ease the process of taking out a mortgage, help you save money, and ensure you know before you owe.”