Green Tree Mortgage $48 million Settlement

Green Tree mortgage servicing company will pay $63 million to settle federal charges that it harmed homeowners with illegal loan servicing and debt collection practices.

The Federal Trade Commission and Consumer Financial Protection Bureau allege that Green Tree Servicing LLC made illegal and abusive debt collection calls to consumers, misrepresented the amounts people owed, and failed to honor loan modification agreements between consumers and their prior servicers, among other charges.

Under the proposed settlement, Green Tree will pay $48 million to affected consumers and a $15 million civil penalty. The company also will create a home preservation plan for some distressed homeowners.

“It’s against the law for a loan servicer to lie about the debts people owe, or threaten and harass people about their debts,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Working together, the FTC and CFPB are holding Green Tree responsible for mistreating homeowners, including people in financial distress.”

Green Tree has become the servicer for a substantial number of consumers who were behind on their mortgage payments at the time their loans were transferred to Green Tree. Because homeowners cannot choose their servicer, they are locked into a relationship with the company for as long as it services their loans.

Illegal debt collection practices

According to the FTC and the CFPB, Green Tree’s collectors called consumers who were late on mortgage payments many times per day, including at 5 a.m. or 11 p.m., or at their workplace, every day, week after week, and left many voicemails on the same day.

They also unlawfully threatened consumers with arrest or imprisonment, seizure of property, garnishment of wages, and foreclosure, and used loud and abusive language, including calling consumers “deadbeats,” mocking their illnesses and other struggles, and yelling and cursing at them.

The company also allegedly revealed debts to consumers’ employers, co-workers, neighbors, and family members, and encouraged them to tell the consumers to pay the debt or help them pay it. The complaint also alleges that Green Tree took payments from some consumers’ bank accounts without their consent.

The agencies also allege that Green Tree pressured consumers to make payments via Speedpay, a third-party service that charges a $12 “convenience” fee per transaction, claiming it was the only way to pay, or that consumers had to use the service to avoid a late fee. 

Mishandled Modifications, Delayed Short Sales

According to the complaint, in many instances, Green Tree failed to honor loan modifications that were in the process of being finalized when consumers’ loans were transferred from other servicers to Green Tree. This resulted in consumers making higher monthly payments, receiving collection calls, and even losing their homes to foreclosure. 

Green Tree also allegedly misled consumers about their loss mitigation options. The company told some consumers who were behind on their mortgages that they needed to make a payment to be considered for a loan modification, even for programs that prohibited the company from requiring up-front payments.
In addition, Green Tree took up to six months to respond to consumers’ short sale requests despite telling them it would respond much more quickly. These delays caused consumers to lose potential buyers, miss other loss mitigation options, and face foreclosures they could have avoided.

Misrepresented account status

According to the complaint, Green Tree misrepresented the amounts consumers owed or the terms of their loans. This included telling consumers they owed fees they did not owe, or that they had to make higher monthly payments than their mortgage contracts required. The company often knew or had reason to believe that specific portfolios of loans it acquired from other servicers contained unreliable or missing information.

In many instances, it should have known that consumers had loan modifications from prior servicers and therefore owed lower amounts. And when consumers disputed the amounts owed or terms of their loans, Green Tree failed to investigate the disputes before continuing collections.

Green Tree also allegedly furnished consumers’ credit information to consumer reporting agencies when it knew, or had reasonable cause to believe, that the information was inaccurate, and failed to correct the information after determining that it was incomplete or inaccurate – often when consumers told Green Tree about it.

Bank Law Firm Butler & Hosch Suddenly Closes and 700 Employees Let Go With No Notice Friday

Mortgage banking industry law firm Butler & Hosch, P.A. filed an Assignment for the Benefit of Creditors to Florida law firm Michael E. Moecker & Associates, an action analogous to Chapter 7 bankruptcy.

Butler & Hosch closed their doors this week and laid off the entire staff. It will not open on Monday.

No one at Butler & Hosch could be reached for comment, but HousingWire obtained a copy of the May 14 memo emailed to employees and vendors from Bob Hosch, CEO and Senior Partner at Butler & Hosch confirming the story:

“It is with great sadness that I report to all of you regarding the difficult financial status of Butler & Hosch and its affiliates[1] (“BH”) which has resulted in the filing of the state court Assignments for the Benefit of Creditors (“ABC”). I have voluntarily stepped down as CEO and Senior Partner of BH. The control of the BH companies has been voluntarily placed in the hands of an experienced third-party fiduciary, Mr. Michael Moecker.”

Significantly, the bankruptcy-style filing and events leading up to it seem to have been sudden – the memo cites the company’s aggressive growth over the past two years and how now there is not sufficient cash on hand to even meet payroll, according to the memo:

“How does the filing of these ABC’s cases impact you? Though Mr. Moecker has complete access to our assets, he will not have sufficient cash on hand to fund payroll at the end of this week. Without BH employees and attorneys there is no ongoing operation. BH cannot continue to function. To be clear, while I continue to hold out hope that our existing lender and/or strategic partners may provide an infusion of cash today, without it, BH will have no choice but to close its doors immediately.”

Butler & Hosch had been quickly expanding its presence across the country over the last few years, buying up default assets in a number of markets.

Most recently, HousingWire reported that the Atlanta-based law firm of Morris Schneider Wittstadt agreed to sell its default assets to Butler & Hosch. The transfer of default assets between Morris Schneider Wittstadt and Butler & Hosch was complete in late January. Financial terms of the deal were not disclosed.

A slew of acquisitions occurred of both default assets and smaller firms as it looked to grow its presence on the West Coast. In February 2014, the firm acquired Seattle, Wash.-based Regional Trustee Services Corporation.

Before that in 2013 the firm also acquired Cal-Western Reconveyance LLC, once one of the largest trustee companies in the nation, after the trustee company’s then-parent Prommis Solutions had filed for Chapter 11 bankruptcy protection earlier in the year.

A full list of HousingWire’s coverage of the firm’s history can be found here.

Assignment for Benefit of Creditors under Florida law is analogous to Chapter 7 bankruptcy, but doesn’t automatically start liquidation of assets. Under the Florida filing protection, the assignee, Moecker & Associates serve as the effective executor, and can seek alternatives to immediate liquidiation.

“Significantly, one of the powers of the court is to allow the assignee to operate the business of the assignor for limited periods, if it is in the best interest of the estate to do so,” according to the Florida Bar. “This enables the assignee the opportunity to sell the business as a going concern, in order to obtain more value for the creditors, as there is generally a substantial incremental ‘going concern value’ component to an ongoing business, even if it is insolvent.”

Michael Moecker & Associates is a Florida firm specializing in providing investors, bank officers, shareholders, creditors and attorneys with the successful resolution of insolvency, bankruptcy and liquidation matters.

Foreclosure Court Funding Over June 30, 2015

Attorneys who practice in Florida courts across the state are starting to get notices that the foreclosure divisions of circuit courts are being shut down due to the end of funding by the State of Florida on June 30, 2015.

Cases are being reassigned back to “regular” circuit judges and all are expecting a huge slow-down in case progress as these judges must now handle their normal civil case docket, plus a portion of the foreclosure cases distributed to each.

Today, Palm Beach County announced their procedures below for redistributing their cases, in the most convoluted manner possible.  Time will tell how slowly these cases move in the near future and what will exactly happen come July 1, 2015.

Failure to Pay Rent into Court Registry in a Florida Eviction is an Absolute Waiver of Defenses Other Then Payment

In an eviction action out of Miami-Dade County, Judge King denied a defendant’s motion to dismiss and request for hearing as defendant/tenant has failed to pay rent monies alleged as owed into the court registry, and had not asserted the only available defense of payment of rent.  The court determined that the landlord was entitled to an immediate default final judgment for possession pursuant to Florida Statutes section 83.60(2).  As a note, the amount of damages/rent will be determined at a later date/hearing, such a default only grants landlord possession of the property and to get the tenant out.

THR Florida, L.P. vs. Jared Pickrell, et al. County Court, 11th Judicial Circuit in and for Miami-Dade County, Civil Division. Case No. 14-535 CC 26 (04). March 12, 2014. 
THIS MATTER came before the Court on March 12, 2014 for consideration of Defendant, Pickerell’s Motion to Dismiss filed February 14, 2014. The Court has reviewed all pending motions and responses filed by the parties to this action, the statutory enactments cited by the Plaintiff and Defendant therein, reviewed the pleadings contained in the Clerk’s file, and being otherwise apprised in the premises hereby issues the following ruling.
IT IS ORDERED AND ADJUDGED that Defendant, Pickrell’s Motion to Dismiss and hearing thereon is DENIED.

Plaintiff, THR Florida, L.P. is entitled to seek residential eviction relief pursuant to the summary procedure statute for removal of a tenant who fails to pay monthly rent Section 83.60, Fla. Stat. (2013). The Complaint alleges that Defendant owes $ 9,430.00 through January 2014 for unpaid rent. Further, Defendant has failed to timely pay any disputed rent monies into the Court Registry as otherwise required pursuant to Section 83.60(2), Fla. Stat. (2013), which results by operation of statutory enactment as an absolute waiver of all defenses, other than payment. See Stanley v. Quest International Investment, Inc., 50 So. 3d 672 (Fla. 4th DCA 2010) [35 Fla. L. Weekly D2636a]; Hanover v. Vasquez, 848 So. 2d 1188 (Fla. 3d DCA 2003) [28 Fla. L. Weekly D1319b]; K.D. Lewis Enterprises, Corp. v. Smith, 445 So. 2d 1032 (Fla. 5th DCA 1984).

The Court finds that Defendant has not raised payment as a defense in this action, nor has Defendant filed any supporting evidence of payment to the Landlord of the disputed rent more specifically set forth in the Complaint. Therefore, Plaintiff is entitled to an immediate default final judgment for removal of the tenant with writ of possession to issue without further notice or hearing thereon. Section 83.60(2), Fla. Stat. (2013). Defendant’s Motion to Dismiss filed February 14, 2014 sets forth contentions of Plaintiff’s failure to comply with the requirements of service of a proper statutory 3-day notice, demanding the outstanding rent.
To afford the Defendant, Pickrell a hearing regarding any relief sought by way of his Motion to Dismiss, or in any Answer and Affirmative Defenses (other than payment), which might be filed by Defendant, the tenant must first place the full amount of the unpaid rent set forth in the complaint into the Court Registry, Section 83.60(2), Fla. Stat. (2012). Karsteter v. Graham Companies, 521 So. 2d 298 (Fla. 3d DCA 1988) rev. denied 529 So. 2d 694 (Fla. 1988).
Respectfully, the Court finds all other relief sought by Defendant, Pickrell regarding the Federal Fair Debt Collection Practices Act contained in the Motion to Dismiss to be without merit
IT IS FURTHER ORDERED that all other relief including attorney fees and costs sought by Defendant, Pickrell in his Motion to Dismiss is DENIED.

Landlord Who Towed Vehicles Not Liable

Landlord  towed  two cars and a SeaDoo belonging to the tenant from the leased premises.  At trial the court found that this violated 83.67 “Prohibited practices.”   The landlord appealed, arguing that the  language in the statute states “dwelling unit”, which is different from “premises,” and thus, no violation under the statute could have occurred.

Section 83.67, Florida Statutes, states, in relevant part, that

(5) A landlord of any dwelling unit governed by this part shall not remove the outside doors, locks, roof, walls, or windows of the unit except for purposes of maintenance, repair, or replacement; and the landlord shall not remove the tenant’s personal property from the dwelling unit unless such action is taken after surrender, abandonment, recovery of possession of the dwelling unit due to the death of the last remaining tenant in accordance with s. 83.59(3)(d), or a lawful eviction.

The appellate court found that as the Tenant’s property was not located inside the dwelling unit,  but outside,  the landlord did not violate 83.67 by removing it.

CHUNG v.  HURLEY,. Circuit Court, 17th Judicial Circuit (Appellate) in and for Broward County. Case No. CACE12-019203 (AP). L.T. Case No. CONO11-014015. October 24, 2014.. 22 Fla. L. Weekly Supp. 533d

Another Example How Failure to Deposit Rent by Tenant Into The Court Registry Gets a Case Dismissed, This Time on Appeal

On appeal the Circuit Court in Pinellas County, the appellate court upheld a default final judgment of eviction by the lower court when tenant failed to dispute the amount of rent alleged in the landlord’s complaint was in error or that the amount alleged had been paid pursuant to Florida Statutes section 83.60(2).  No rent was placed into the court registry, or  defense of payment as the only available defense when rent is not deposited, which authorized the court to enter a default final judgment against the tenant pursuant to statute.  

Toni Seitz vs. Anka Rudman. Circuit Court, 6th Judicial Circuit (Appellate) in and for Pinellas County. Case No. 14-000058AP-88A. UCN 522014AP000058XXXXCI. December 19, 2014. Appeal from Final Judgment Pinellas County Court.
(PER CURIAM.) Toni Seitz, the Tenant, appeals the “Final Judgment — Eviction” entered by the trial court on July 18, 2014, in favor of Anka Rudman, the Landlord. Affirmed.
07/02/2014       Two-count complaint filed by Landlord to recover possession of the apartment and for damages for failure to pay rent. (R. 1-2)
07/02/2014       Tenant served by substituted service on July 2, 2014. (Ex. A)
07/07/2014       Tenant filed Motion to Determine Amount of Rent to Deposit Into Registry of Court and filed Answer. (R. 5, 6-41).
07/14/2014       Landlord filed Motion for Court Default for failure to place rent money into the registry of the court. (R. 42)
07/14/2014       Landlord filed Motion for Default Final Judgment — Residential Eviction. (R. 44)
07/18/2014       Default entered against Tenant for failure to place money in registry of the court. (R. 46)
07/18/2014       Order Denying Defendant’s Motion to Determine Rent “for failure to deposit into the registry of the court any rent as alleged in the complaint and required by section 83.60(2) of the Florida Statutes.” (R. 47)
07/18/2014       Default entered against Tenant for failure to place money in registry of the court. (R. 46)
07/18/2014       Final Judgment — Eviction entered by Court. (R. 45)
In the Complaint for Eviction and Damages, the Landlord asserts that the Tenant has possession of the property at issue under an oral agreement to pay $700.00 monthly. The Complaint alleges the Tenant owes the Landlord $1,400.00 in past due rental payments.
In the Motion to Determine Amount of Rent to Deposit Into Registry of Court, the Tenant states that Landlord “has in her possession $1,135.00 cash of mine, plus theft of my electricity over several months.” The Tenant does not state in the Motion that that the rent as alleged in the complaint is in error. Further, the Tenant does not claim in her Answer that she paid the rental payments alleged to be due for the apartment that is the subject of the eviction action. The Tenant did not deposit any funds into the registry of the court.
Section 83.60(2), Florida Statutes (2014), states in part:
In an action by the landlord for possession of a dwelling unit, if the tenant interposes any defense other than payment, including, but not limited to, the defense of a defective 3-day notice, the tenant shall pay into the registry of the court the accrued rent as alleged in the complaint or as determined by the court and the rent that accrues during the pendency of the proceeding, when due. The clerk shall notify the tenant of such requirement in the summons. Failure of the tenant to pay the rent into the registry of the court or to file a motion to determine the amount of rent to be paid into the registry within 5 days, excluding Saturdays, Sundays, and legal holidays, after the date of service of process constitutes an absolute waiver of the tenant’s defenses other than payment, and the landlord is entitled to an immediate default judgment for removal of the tenant with a writ of possession to issue without further notice or hearing thereon. If a motion to determine rent is filed, documentation in support of the allegation that the rent as alleged in the complaint is in error is required.
The trial court denied the motion to determine rent and the Final Judgment for eviction was entered because the Tenant failed to deposit any funds into the registry of the court. The trial court did not err in entering the Final Judgment based on the requirements of section 83.60(2).
Affirmed. (ALLAN, SCHAEFER, and ST. ARNOLD, JJ.)

Requirements to Impose Claim on Security Deposit by Tenant

While still in possession of a rental property, tenant filed a complaint to recover their security deposit.  The court in Volusia County dismissed the complaint for failure to allow the landlord time to comply with Florida Statutes Section 83.49, specifically its notice provisions.  In essence, the tenant did not wait the statutory period to request return of her deposit and the lawsuit was dismissed as premature; the worst being that landlord was entitled to her attorney’s fees and costs from tenant for this mistake.

Sharon Nesbitt vs. Mary Ann John. County Court, 7th Judicial Circuit in and for Volusia County. Case No. 2014 21087 CONS, Division 78. May 28, 2014. 
THIS MATTER came before the Court for consideration of Defendant, Mary Ann John’s Motion to Dismiss filed May 11, 2014. The Court has reviewed the substance of the motion, the initial pleading filed by the Plaintiff, the statutory guideline cited in the Motion to Dismiss, and being otherwise apprised in the premises hereby issues the following ruling.
IT IS FOUND, ORDERED AND ADJUDGED that Defendant’s Motion to Dismiss is hereby GRANTED.

Plaintiff, Sharon Nesbitt, was before this Court on an eviction action filed by Defendant (see John v. Nesbitt, 2014 21015 CONS (Volusia Cty. Ct., 2014)) on April 10, 2014. Six (6) days later on April 16, 2014, Plaintiff filed the complaint that commenced this action. The prior eviction action resolved in favor of the Defendant and a Writ of Possession was issued and returned executed on May 2, 2014.
This action arises because the Plaintiff desires that her security deposit be returned to her. Fla. Stat. §83.49 of the Florida Residential Landlord and Tenant Act governs the relationship between the two parties with regard to the security deposit, and gives a landlord fifteen (15) days from the time property is vacated to return a security deposit or otherwise give notice of any intention to impose a claim upon it within thirty (30) days.
A statutory cause of action cannot be commenced until the claimant has complied with all the conditions precedent. Inv. & Income Realty, Inc. v. Bentley, 480 So.2d 219 (Fla. 5th DCA, 1985), citing Ferry-Morse Seed Co. v. Hitchcock, 426 So.2d 958 (Fla. 1983). In a case seeking the return of a security deposit, the condition precedent is obviously giving the landlord enough time to comply with Fla. Stat. §83.49.
The Plaintiff here initiated this lawsuit prior to the Defendant having the property turned over to her with the assistance of the Volusia County Sheriff’s Department. It is obvious to the Court from examing the dockets that the Defendant was not afforded the statutory opportunity to determine whether any damages would or could be assessed, nor the opportunity to issue proper notice of her intent (if any) to impose a claim on Plaintiff’s security deposit.
Because the Plaintiff filed this lawsuit prior to possession of the property being returned to the Defendant, it is clear that the conditions precedent to filing this suit has not been met. This Court’s jurisdiction over this matter has not been perfected, and therefore the Plaintiff’s case is DISMISSED without prejudice.
Defendant is the prevailing party, and pursuant to Fla. Stat. §§83.49(3)(c) and 83.48 is entitled to recover her attorney’s fees and costs. This Court reserves jurisdiction to determine the amount of attorney’s fees and costs at a later date.

Florida Landlord Prevented from Evicting Tenant Due to Acceptance of Late Rent

Landlords be aware that your acceptance of rent after issuance of a 3 Day Notice in Florida may create a waiver of your ability to pursue eviction.  In Alachua County, a trial court court entered a final judgment for defendant/tenant when it was determined that the landlord had accepted late rent after issuing a 3 Day Notice.  
If you accept rent after the 3 Day Notice as landlord you may be prevented from filing an eviction action against your tenant.

Tiger Bay of Gainesville LTR vs. Felcia Ownes. County Court, 8th Judicial Circuit in and for Alachua County. Case No. 01-2013-CC-002434, Division IV. November 18, 2013. 
This action was heard upon a Final Hearing on Possession, attorneys on behalf of both Plaintiff and Defendant were present, and the Court after hearing testimony and evidence from counsel for each party respectively, finds as follows:
1. This action was premised on failure to pay rent. A Three Day Notice to Pay Rent or Deliver Property was posted at Defendant’s unit on or about June 6, 2013.
2. The final hearing was held on October 31, 2013. At the hearing, Defendant asserted a position that the landlord had accepted numerous late payments and therefore was estopped from evicting the tenant without giving an additional notice that late payment would not be accepted.
3. Testimony revealed that the Defendant consistently made late payments for years throughout the course of her tenancy. The majority of the Defendant’s tenancy took place while Plaintiff was under a different management company then the management company, Dominium Management Services (hereinafter, “Dominion”), which was in place at the time of this action.
4. Courts have held that if the landlord has a pattern of constantly accepting late payments after giving the tenant notice that late payments would no longer be accepted, then the landlord may be estopped from evicting the tenant without additional notice that late payments will not be accepted. Heggs v. Haines City Community Dev., 2 Fla. L. Weekly Supp. 137a (10th Cir. App. 1994)
5. Defendant testified that she had received Three Day Notices in the past for failing to pay rent on time but has never been evicted. Defendant presented evidence in the form of handwritten and MoneyGram receipts demonstrating that payments were tendered late both before and after Dominium took over management for Plaintiff.
7. The evidence also demonstrated that it was Dominium’s policy to send out Three Day Notices immediately upon a payment being considered late pursuant to the lease.
8. It appears that both pre and post Dominium, late payments were accepted by management on numerous occasions, including accepting payments after the service of three day notices.
9. Although Defendant believed that she tendered payments within the three day window after receipt of the three day notices, the un-refuted receipts demonstrate otherwise and reveal that payments were tendered beyond the three day period.
10. At issue is whether Plaintiff conducted itself in such a manner as to cause Defendant, in reliance of Plaintiff’s conduct, to act in such a way that put her tenancy in jeopardy.
11. Plaintiff repeatedly accepted Defendant’s late payments during the course of her tenancy, including accepting late payments even when tendered beyond the three day window provided for after the service of a three day notice.
12. Plaintiff did not provide Defendant with additional notice that late payments would no longer be accepted.
13. Plaintiff’s actions would cause a reasonable lessee to believe that the lessor did not intend to enforce the default. Vines v. Emerald Equipment Company, 342 So.2d 137 (Fla. 1st DCA 1977).
IT IS THEREFORE considered by the Court that Judgment for the Defendant is entered as sufficient evidence was presented to support the applicability of the doctrine of equitable estoppel to the case at hand.