US Bank bankruptcy crisis gets worse as customer lawsuits pile up
Today we filed suit against US Bank in Oregon bankruptcy court. This is our second complaint in two months against the bank for violating the bankruptcy rules. Last month the bank was slapped with a $15 million fine for bankruptcy violations.
Listen to our client’s recording of this illegal collection call during bankruptcy:
US Bank Harasses Borrowers During Bankruptcy
Our client says the bank threatened and harassed her after it learned she filed bankruptcy. In March we filed a similar lawsuit against the bank for a Portland man alleging similar misconduct.
The automatic stay protects bank customers from collector harassment during bankruptcy. But not all banks follow the rules.
Rather than do the right thing, US Bank tried to remove our call recording from YouTube. The takedown notice we received is below:
As of the date of this post, our video of the call recording remains online.
US Bank Fined $15 Million for Bankruptcy Violations
US Bank is no stranger to bankruptcy violations. Last month, Housing Wire announced the bank had systematically failed to comply with the bankruptcy rules in cases across the country.
Click to read the Housing Wire article
The bank was fined $15 million for systematic bankruptcy violations occurring from 2009 to 2014.
Click to read the $15 million penalty order
Both of our lawsuits ask the Oregon bankruptcy court for fair compensation and punitive damages. In 2014, the bank was sanctioned for similar collection misconduct by New York Bankruptcy Judge Louis Scarcella.
Here’s a copy of the complaint we filed today:
Click here to read our complaint
Bank statements show the bank seized money from our client after it learned she filed bankruptcy. Our complaint says the bank wrongfully threatened to harm our client’s credit if she did not pay its debt during bankruptcy. Our client says she complained to the bank in person several times and it continues to refuse to do the right thing.
New Wells Fargo forgery scandal raises familiar questions
A newly uncovered Wells Fargo email suggests the bank fabricated an Oregon mortgage note.
Wells Fargo Forgery Exposed
Click to view full forgery image
This newly discovered forgery raises familiar questions about the bank’s mortgage practices.
Wells Fargo’s Internal Email About Missing Documents
In a 2015 Oregon whistleblower lawsuit, a former employee claimed the bank told him to lie to customers about missing mortgage documents.
Texas Judge Examines Forgery Practices
Click to read the judge’s entire opinion
Wells Fargo’s Internal Forgery Manual
This new Oregon forgery case is unique because the homeowner seemingly caught the bank red-handed. The so-called “original note” turned out to contain 4 separate image layers. The note text and signature layers were allegedly fabricated to foreclose on a Lane County home in 2013. The bank has been hit with various scandals involving dishonesty in recent months. See related articles:
5,300 Wells Fargo employees fired over 2 million phony accounts
CNN
Senators Investigate Reports Bank Punished Workers
NPR
Bank Tells Employees to Lie to Customers
Reuters
This Oregon forgery is not the first time the bank has been accused of fabricating documents. A 2014 lawsuit claimed the bank fired an employee for refusing to lie to customers. Click here to read more about the 1.4 billion whistleblower lawsuit.
In 2015, New York bankruptcy judge Robert Drain described the bank’s forgery process in detail. Read the judge’s memorandum. The 30 page court opinion ultimately granted a homeowner’s objection to the bank’s proof of mortgage claim. Click here to read the bank’s internal manual. The manual seemingly tells the bank’s legal team how to forge missing foreclosure documents.
See related articles:
NY Judge Slams Bank For Forging Documents…
Zero Hedge
Family Gets $5M For Robosigned Foreclosure Docs
Foreclosure Defense and Loan Modification Blog
For more information email michael@underdoglawyer.com.
Oregon mortgage lawsuit: Portland homeowner wins round one
An Oregon mortgage lawsuit largely survived a motion to dismiss, based on a recent ruling by judge Anna Brown.
The Oregon mortgage lawsuit claims that loan servicer Madison Management Services failed to respond to various requests for information sent by Portland consumer Anna Nguyen.
Read the complaint and full court opinion.
Oregon Mortgage Lawsuit under the RESPA
Federal law requires mortgage companies to respond to requests for information and notices of servicing errors. The Real Estate Settlement Procedures Act requires mortgage servicers to acknowledge receipt of consumer requests within 5 days, and respond within certain time frames.
In Nguyen’s case, Oregon federal judge Anna Brown decided that new regulations passed after the subprime mortgage crisis give borrowers the right to sue mortgage companies for failing to comply.
Judge Brown also allowed Nguyen to sue Madison Management Services for failing to comply with the Truth in Lending Act. Nguyen’s TILA claims are based on the mortgage company’s failure to send her mortgage statements and interest disclosures. Regulation Z requires servicers of adjustable-rate mortgages “to provide borrowers with disclosures in connection with the adjustment of interest rates–.”
Oregon Mortgage Lawsuit under the FDCPA
Nguyen’s claim under the Fair Debt Collection Practices Act also survived dismissal. Her FDCPA claim is based on the mortgage company’s failure to take certain actions required under federal law. The FDCPA prohibits any conduct that would harass, oppress, or abuse any person in connection with the collection of a debt.
Nguyen’s claims under the Oregon UTPA were dismissed because her loan was obtained before 2010. The court is expected to set the case for a rule 16 conference in the coming weeks.
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Michael Fuller is a partner at Olsen Daines and an adjunct professor of consumer law at Lewis & Clark Law School in Portland, Oregon.
