Daily Report: Robin Hood lawyer fights foreclosures with a passion

 

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‘Robin Hood’ lawyer fights foreclosures with a passion

Katheryn Hayes Tucker

Daily Report

06-18-2012

For 34 years, Robert Thompson Jr. had been a business and labor lawyer — as was his father before him — defending corporations and financial institutions and even serving on several banks’ boards of directors.

But something happened to him two and half years ago that changed his entire practice. Now, he challenges banks and financial institutions in court, accusing them of wrongful foreclosure and outright fraud on behalf of individuals who are a step away from losing their homes.

The turning point for Thompson came at Christmas time, 2009. His mortgage servicer — with whom he had been embroiled in disputes over what he said were misapplied or lost checks, late fees for payments that had been made on time, unnecessary insurance costs and double billings for taxes — moved to foreclose on his home.

“I was a single father with three young children living with me in that house,” the silver-haired Thompson said during an interview in his Buckhead Thompson Law Group office filled with books about the financial industry and the economic crisis. “It was very upsetting.”

But, he added, “I was the wrong person to pick on about injunctions and bank law.”

On Dec. 28, 2009, he went before Fulton County Superior Court Judge John Goger, asking for an order enjoining the mortgage company from proceeding with the foreclosure. The judge’s first question was, “How much do you owe?” Thompson recalled.

“I told him I didn’t owe anything, that my payments had all been made on time, and that in fact they owed me more than $50,000 in overpayments and mystery fees,” Thompson recalled.

“Can you prove it?” the judge asked.

Thompson recalled he pointed the judge to canceled checks and FedEx receipts, and the judge granted Thompson’s injunction. Thompson filed a lawsuit against his loan servicer for mortgage fraud and abuse, wrongful foreclosure, unjust enrichment, breach of contract, conversion, misrepresentation, defamation, libel and deceit.

“People started talking about it,” Thompson said. “I thought it was just me, but then people started calling saying they had the same problem and wanting to know if I could help them.”

Now, Thompson is a man obsessed. And he said he’s had success halting foreclosures — but acknowledged securing such an injunction for a client is only the first step.

Thompson said he still has new clients coming to his office daily. Most don’t have the exact situation as his, where the payments were current but not applied to the account. The biggest percentage, he said, are struggling because of a loss of income and are seeking loan modifications to make payments more manageable, but were told by their mortgage holder they weren’t eligible either because they weren’t behind or far enough behind.

Thompson said being behind on mortgage payments isn’t a requirement of federally funded modification programs. But, on the assumption that it was, he said, his clients missed payments in hopes of qualifying for modifications, then found themselves in foreclosure with their lender refusing to accept more payments. Thompson calls that being “lured into default.”

Out of hundreds of cases he’s reviewed in the past two and a half years, he said, there wasn’t a single one where he didn’t find fraud or at least errors in the records. So far, he said, he has not yet been able to say to a homeowner, “I can’t help you because the bank did everything right.”

Bank representatives say it’s absurd to suggest banks want to foreclose if there are other options. They admit some paperwork mistakes happen but suggest it’s not right to make those a basis for loan forgiveness.

Meanwhile, Thompson is ordering up forensic audits — at a minimum of $1,000 each — to ferret out problems so that he can go to court to block foreclosures. A forensic auditing company analyzes the loan activity and tracks the transfers of deed and title as the loan has been sold by one financial company to another — and sometimes to several others.

Sometimes, Thompson said, he finds the foreclosing lender has already sold the note and collected the balance, and thus doesn’t have the legal right to foreclose. Often Thompson finds what he calls a “break in the chain of title” because the deed and the note have not been kept together in the transactions, which he said is illegal.

He can’t charge the homeowners the hourly rates he used to bill his corporate clients. Some can hardly pay anything. Occasionally, he said, he just offers free advice on how to fight a foreclosure pro se. Most of the time he negotiates a flat fee varying in amounts according to the work that needs to be done and the client’s ability to pay. “I have to make it affordable or they can’t do it,” he said. “But I can’t do it for free.”

He is especially busy the week before the first Tuesday of every month, when crowds gather on the courthouse steps for the auctioning of foreclosed homes. This month alone, he went to court for 25 injunctions to stop foreclosures.

Asked how many he won, he said, “All of them. But the injunction is only the first step.”

The next step varies, but often includes lawsuits against the lenders or servicers who initiated the foreclosure.

Lender representatives said Thompson’s charges about banks’ motivations don’t make sense.

“Do you really think the lender wants that house back?” asked Mo Thrash, a lobbyist for the Mortgage Bankers Association of Georgia and McCalla Raymer, a law firm with offices in Georgia that represents lenders. “It is absolutely ridiculous to think the lender would want the home back.”

Thrash said the conventional wisdom — that the best outcome for the lender is for the homeowner to make all their payments until the loan is paid in full — is still true, maybe more so now because of falling real estate prices and difficulty in selling homes. “I admit mistakes do happen, but I’d be willing to bet that the majority of these cases are a two-way street,” he said. “It takes two to tango.”

The majority of mortgage banks — 99 percent — are ethical and honest, Thrash added. To suggest otherwise, he said, is “absolutely crazy.”

If the personal foreclosure experiences of Thompson and some of his clients are as they described them, “It was a mistake,” said J.D. Crowe, senior vice president of Southeast Mortgage of Georgia Inc. and a member of the Mortgage Bankers Association of Georgia Board of Governors.

“If that’s the case, that’s why he won an injunction and will probably win his lawsuit. With the number of foreclosures in the last few years, there’s a lot of paper going back and forth,” Crowe said.

But like Thrash, Crowe said it’s “ridiculous” to suggest that a lender would want to foreclose if there were an alternative. “Lenders want to work with borrowers. They don’t want to foreclose,” he said.

Crowe also suggested that when homeowners win their foreclosure fights, they usually win on a technicality — a mistake in the paperwork or the separation of the deed and note in the selling of the loan by one financial institution to another. In such cases, if homeowners win damages or loan forgiveness, allowing them to walk away from their mortgage payments, said Crowe, “I think it is unconscionable.”

Disbelief, said Thompson, is the biggest challenge he faces in fighting foreclosure fraud. “People who have never suffered through it cannot believe it. It challenges the fundamentals of everything you want to believe about the banks being honest and the government protecting you.”

He cited the case of client LaVonda DeWitt, a patent lawyer whose income was reduced because her firm’s revenue dropped. In an interview, she said she contacted her mortgage company to discuss a loan modification so she could lower her payments.

“They said I wasn’t eligible because I still had a job,” she said.

Then she was laid off. She called her lender again about the modification and was told she wasn’t eligible because didn’t have a job. She said she was also told she wasn’t eligible unless she was three months behind. She stopped making payments in December 2010. She also filed a complaint with the U.S. Treasury Department over being denied a loan modification. The lender responded with a document she had never seen saying she had been offered a modification and rejected it, but later admitted that claim was a mistake, according to DeWitt. She still wasn’t offered a modification. She received a foreclosure notice in March of this year.

She met with Thompson, who went to court with her to block the sale on the first Tuesday in April. She won the injunction but still wasn’t able to negotiate a loan modification. So, on Thompson’s advice, she filed a lawsuit in federal court.

DeWitt said Thompson reminds her of the fictional Atticus Finch, taking on jobs that other lawyers don’t want.

Another client of Thompson’s, Patricia Sibley, won an injunction a year ago, then filed a lawsuit against the lender for wrongful foreclosure. The suit is pending in the Northern District of Georgia. Sibley and her husband are still in their home — “because of Bob Thompson,” she said.

As with DeWitt, Sibley’s suit is based on what Thompson calls “luring into default.” When the recession hit and slashed revenue for her advertising company, Sibley said she had to close her business. She and her husband had paid down by half their $950,000 15-year mortgage on their north Atlanta home near the Chattahoochee River, and their payments were current, she said in an interview.

She contacted the lender to ask about changing the terms to lower the payments. Since they still had some income, they felt they could afford the loan if they could spread it back to 30 years. They were told they weren’t eligible for a modification because they weren’t behind. They skipped one payment and called again, but were told they were not far enough behind to be eligible, according to Sibley and the lawsuit. After the third missed payment, they received a foreclosure notice. They tried to talk to the lender’s customer service department many times and offered to pay the loan current and cover fees in return for restructuring, she said, but heard no response.

The house was advertised for foreclosure. The weekend before the first Tuesday in June 2011, cars were driving by the house and stopping to take pictures, Sibley said. It was an experience she said she wouldn’t wish on anyone.

A friend called and said she had a friend who knew someone who might be able to help — Thompson. The friend said, “I have somebody who’s like Robin Hood. He takes from the banks and gives to the poor.”

“Not that we’re the poor,” Sibley added. But, she said, “I never would have dreamed I’d be in this position.”

Sibley’s case is unresolved, but Thompson was able to get an injunction to prevent foreclosure while it’s pending.

McCurdy & Candler, which has offices in Decatur and Atlanta, handled Sibley’s foreclosure for PNC Mortgage, as well as DeWitt’s foreclosure for Chase. Managing partner Sidney Gelernter said the firm couldn’t comment on any pending case or even discuss foreclosures generally. Sibley’s suit is being defended by Ballard Spahr. One of the lawyers working on the case in Atlanta, Christopher Willis, said the firm couldn’t comment on any matter involving any of its clients.

Sibley’s lawsuit is against National City Mortgage Company, National City Bank, PNC Mortgage, Bank of America and unidentified investors. Sibley said she tried repeatedly to find out the identity of the investors who now own the loan — in order to work out payment terms — but PNC, the servicer, wouldn’t tell her.

A spokeswoman for PNC said the company couldn’t comment on any lawsuit. “We do work with customers,” said Amy Vargo, noting modification programs described on the PNC website.

In his own personal case, Thompson sued BAC Home Loans Servicing, which is a subsidiary of Bank of America, and Bank of New York Mellon, formerly known as Bank of New York, successor in interest to JP Morgan Chase Bank. Bank of America acquired Countrywide Mortgage Company, which was Thompson’s loan servicer. Thompson’s lawsuit names four companies that owned his note successively. Thompson’s case — which he has withdrawn for now — was defended by Monica Gilroy of Alpharetta’s Dickenson Gilroy, who said she couldn’t discuss it.

The foreclosing firm in Thompson’s case was Shuping, Morse & Ross, based in Riverdale. Neither the managing partner, Sheltan Andrew Shuping Jr., nor the lawyer who handled the foreclosure, Kevin Duda, could be reached for comment.

Thompson’s lawsuit — moved from Fulton Superior Court to federal district court in Atlanta — seeks damages for overpayments and unauthorized fees, harassment and injury to his credit and reputation, naming a figure of $5 million.

Thompson said he has stopped making mortgage payments, and BAC has stopped trying to foreclose. He moved to withdraw his complaint, while keeping the door open to refiling it later, and the judge agreed. He said he believes the courts are evolving in their understanding of foreclosure fraud, and he plans to reinitiate the suit at a time that will be advantageous. For now, he said, “It’s an armed truce.”

Thompson’s case in federal court is Thompson v. BAC Home Loans, No. 1:10-CV-3205-TCB.

Sibley’s case in federal court is Sibley v. National City Mortgage Co., No. 1:12-cv-00305-SCJ-JFK.

Daily Report: Robin Hood lawyer fights foreclosures with a passion

Courthouse News Service

GEORGIA ON MY MIND..>..

Tuesday, June 12, 2012Last Update: 7:06 AM PT

Squirrely Ethics in Georgia, Former Exec Says

By IULIA FILIP

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ATLANTA (CN) – A former executive claims in court that the Georgia Ethics Commission fired her for trying to investigate a gubernatorial candidate’s violations of campaign finance laws.
     Stacey Kalberman claims the chairman of the state ethics commission board, who was the candidate’s appointee, retaliated against her to deter the investigation and promote his political career.
     Kalberman sued the Georgia Government Transparency and Campaign Finance Commission fka Georgia State Ethics Commission, Executive Secretary Holly LaBerge and Chairman Patrick Millsaps, in Fulton County Superior Court.
     The state ethics commission oversees campaign funding and spending of elected officials and lobbyists.
     Kalberman was executive secretary of the commission from April 2010 until June 2011, when she says she was “forced out of her job”.
     As executive secretary, Kalberman managed the commission’s administrative, legal and investigatory functions, including investigations of complaints under the Georgia Campaign Finance Act, according to her complaint.
     “Between March and May of 2010, Kalberman became aware of three third-party complaints made against a gubernatorial candidate (the ‘candidate’) concerning his campaign’s compliance with the Georgia Campaign Finance Act,” the complaint states.
     “The candidate had reappointed Millsaps to his position on the commission.
     “The commission’s investigation revealed troubling irregularities with the candidate’s campaign financial disclosures.”
     After the candidate’s counsel ignored her request for documents, Kalberman says, she prepared draft subpoenas for the commission’s review.
     Kalberman says she discussed the subpoenas with Millsaps at least four times and told him that “the candidate’s campaign had possibly violated campaign contribution limits on many occasions.” But she says Millsaps asked her to keep the matter in “strict confidence” and refused to sign the subpoenas.
     Kalberman claims that in June 2011, less than 3 weeks after she provided the subpoenas to the commissioners, Millsaps asked her to meet him to discuss the commission’s budget.
     But instead of discussing the budget, Millsaps told her the commission was cutting her salary by 35 percent and eliminating the position of deputy secretary, filled by Kalberman’s chief investigator, according to the complaint.
     “At the June meeting, it was obvious to Kalberman that Millsaps’ sudden ‘budget cut’ was retaliation against her for pursuing the ethics investigation into the candidate,” the complaint states. “Kalberman, exhausted from previous weeks of dealing with her mother’s diagnosis of stage IV metastatic breast cancer, became emotional and stated she could not work for the drastic reduction in salary Millsaps proposed.
     “At no time did Kalberman resign her employment with the commission.”
     Kalberman says that though she denied she had resigned, Millsaps sent her an email saying that the commission had accepted her “resignation.”
     She says Millsaps refused to return her phone calls or further discuss the proposed budget cuts with her.
     “Millsaps then began maliciously spreading false rumors to the press and to the public that Kalberman had resigned from her position during the June meeting,” the complaint states.
     “On June 15, 2011, Kalberman sent a detailed email to Millsaps outlining several alternative plans for restructuring the budget to avoid Millsaps’ proposed cuts.
     “Kalberman also indicated in her email that she felt that Millsaps’ alleged ‘budgetary concerns’ were pretextual to hide his real reason for removing Kalberman from her position: to deter the investigation into the candidate. Kalberman made it clear to Millsaps that she planned to proceed with her job duties, which included the investigation.
     “Millsaps ignored Kalberman’s overtures to discuss the commission’s budget, leaked Kalberman’s email to the press, and told the press that Kalberman had resigned from her position and that she behaved badly by becoming ‘upset’ at the June meeting. In addition, Millsaps misled the press when he reported he could not really remember if he ever received the candidate’s subpoenas.”
     Kalberman says the commission enacted Millsaps’ proposed cuts and forced her to resign, claiming her authority had been compromised.
     The complaint adds: “Kalberman’s resignation as executive secretary amounted to a constructive termination because the commission, and specifically Millsaps, forced her out of her job and made it clear she would be rendered powerless, amounting to nothing more than a figurehead.”
     Kalberman says Millsaps’ statements to the press hurt her reputation and prevented her from getting similar ethics-related jobs.
     She seeks compensatory and punitive damages for retaliation under the Georgia Whistleblower Act and intentional infliction of emotional distress.
     She is represented by Kimberly Worth with Joyce Thrasher Kaiser & Liss.

Courthouse News Service