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Even a "consumer" is entitled to due process

July 24, 2015

by Carl

Consumer definition; an “affiliate” of a bank

15 U.S. Code § 1639c - Minimum standards for residential mortgage loans

(e) Arbitration
(1) In general

No residential mortgage loan and no extension of credit under an open end consumer credit plan secured by the principal dwelling of the *consumer may include terms which require arbitration or any other non-judicial procedure as the method for resolving any controversy or settling any claims arising out of the transaction.

(2) Post-controversy agreements

Subject to paragraph (3), paragraph (1) shall not be construed as limiting the right of the consumer and the creditor or any assignee to agree to arbitration or any other nonjudicial procedure as the method for resolving any controversy at any time after a dispute or claim under the transaction arises.

(3) No waiver of statutory cause of action

No provision of any residential mortgage loan or of any extension of credit under an open end consumer credit plan secured by the principal dwelling of the consumer, and no other agreement between the consumer and the creditor relating to the residential mortgage loan or extension of credit referred to in paragraph (1), shall be applied or interpreted so as to bar a consumer from bringing an action in an appropriate district court of the United States, or any other court of competent jurisdiction, pursuant to section 1640 of this title or any other provision of law, for damages or other relief in connection with any alleged violation of this section, any other provision of this subchapter, or any other Federal law.

Regulations

16 CFR 444.2 - Unfair credit practices.

§ 444.2 Unfair credit practices.

(a) In connection with the extension of credit to consumers in or affecting commerce, as commerce is defined in the Federal Trade Commission Act, it is an unfair act or practice within the meaning of Section 5 of that Act for a lender or retail installment seller directly or indirectly to take or receive from a consumer an obligation that:

(1) Constitutes or contains a cognovit or confession of judgment (for purposes other than executory process in the State of Louisiana), warrant of attorney, or other waiver of the right to notice and the opportunity to be heard in the event of suit or process thereon.

(2) Constitutes or contains an executory waiver or a limitation of exemption from attachment, execution, or other process on real or personal property held, owned by, or due to the consumer, unless the waiver applies *solely to property subject to a *security interest executed in connection with the obligation.

(note) the term “property subject to a security interest”, is by definition is “pledged property”, the creditor has actual and constructive possession, i.e. stocks or bonds pledged to secure an extension of credit to an affiliate.

The provisions of the Seventh Amendment to the Constitution, and Title 16 C.F.R. section 444.2 is restated in the California Code

The one action rule for real property Code of Civil Procedure section 726.
§ 726. Form of action; procedure Form of action; judgment.

There can be but one form of action for the recovery of any debt, or the enforcement of any right secured by mortgage upon real property, which action must be in accordance with the provisions of this chapter. In such action the *court may, by its judgment, direct the *sale of the encumbered property (or so much thereof as may be necessary), and the application of the proceeds of the sale to the payment of the costs of court, ….

An act to add a new section to be numbered 2953 to the Civil Code, relating to debts secured by mortgages, trust deeds or other hypothecation of real property.

[Approved by the Governor June 26, 1937. In effect August 27, 1937.]

The people of the State of California do enact as follows:

SECTION 1. A new section to be numbered 2953 is hereby. added to the
Civil Code to read as follows:

2953. Any agreement exacted from a borrower as a condition to the making or renewing of any loan secured by a deed of trust, mortgage or other lien on real property whereby the borrower agrees to waive, any rights or privileges existing under sections 2924, 2924b, 2924c of the Civil Code or under sections 580a or *726 of the Code of Civil Procedure, and any agreement exacted from a borrower as a condition to the making of any such loan whereby the borrower in general terms agrees to waive any rights or privileges which may be conferred upon him by legislation thereafter enacted are hereby declared to be void and unenforceable.

1. The debtor protections for the most part are non- waive able at the time of the loan. See Cornelison v. Kornbluth, 15 Cal. 3d 590, 125 Cal. Rptr. 557 (1975); Freedland v. Greco, 45 Cal. 2d 462, 289 P.2d 463 (1955); Salter v. Ulrich, 22 Cal. 2d 263, 138 P.2d 7 (1943); Russell v. Roberts, 39 Cal. App. 3d 390, 114 Cal. Rptr. 305 (1974); CAL. CIV. CODE §§ 2953, 2889 (West 1974). The only permissible election belongs to the debtor, who may choose to waive his protections by agreement made *after the loan or by failure to assert his protection as an affirmative defense. Id.; Walker v. Community Bank, 10 Cal. 3d 729, 518 P.2d 329, 111 Cal. Rptr. 897 (1974).

 

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Nancy Duffy McCarron, CBN 164780
Attorney, Real Estate Broker, BBB Arbitrator, CA Notary Public
Certified Forensic Loan Auditor, Property Manager

 

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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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