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Fighting Predatory Capitalism: Occupying and Preventing Illegal Foreclosure
With more than 6 million homes in foreclosure or badly underwater, there are allegations that banks are committing fraud, which is a felony. According to foreclosure victims, banks are promising owners who are having financial trouble that if they are three months behind on their mortgage payment, the bank would negotiate a new interest rate. But doing so only led to the bank foreclosing and selling the homes of the victims to house-flippers and investors, throwing the people out on the streets, and in one case in California, deportation.
But there is a law in several states that may prevent the banks from doing this and it is called Single Party Notification. Single Party Notification deals with recording phone calls. In 12 states, including California, recording phone calls requires a Dual Party Notification or both parties on the line must know that their phone calls is being recorded. Yet a Single Party state needs only one person to know that they are being recorded. The admissibility as evidence in a state where a single party recording is allowed can be used as evidence in both civil and criminal cases, but the evidence must be in accordance with the individual’s state laws. Currently, there may be 38 states that can legally record phone calls without the second party knowing.
In a Single Party Notification, the person recording must know that they are recording. Sounds strange but the federal law explains the legal aspect behind a single party participant. And the law reads:
Federal law requires that at least one party taking part in the call must be notified of the recording (18 U.S.C. §2511(2)(d)). For example, it would be illegal to record the phone calls of people who enters into a place of business, and surreptitiously record their conversation after being allowed to use the phone. That is unless the guest is notified. But so long as one person knows that there is a recording going on, it is legal to record a conversation. So if you walk into a building and use a phone, there is a legal obligation for the company to tell the person they are being recorded. Failure to do so could lead to fines and/or arrest. As for foreclosure, according to an attorney in California, the homeowner in a single party can get a “TRO” (Temporary Restraining Order ) and immediately stop the foreclosure. But the recording must have the who, what, where when, why and how in order to use evidence against the banks.
The states in green currently allows for single party notification, but again the lawyer reiterates, it’s still wise to check with a lawyer before attempting to gather evidence against a bank. Because, only one party has to know they are being recorded and the rules of evidence are very stringent.
In a dual party notification state like California, it is illegal to record a conversation with a bank representative without them knowing that they are being recorded. But there are other protections one can use if there is a negotiation for a foreclosure. According to the attorney, recording a phone call is inadmissible in court and you can end up in prison for wiretapping. But sending certified mail may be helpful. In the certified mail should be a letter which reads:
Dear XXXXX, (name of person you spoke with)It was a pleasure speaking with you on XXX (date) regarding my question of whether XXXX (clearly state the question that was asked).Pursuant to our conversation of XXXX, I understand that my mortgage contract (loan number 12345 serviced by ABC Bank and held by 123 Bank) is hereby amended as of XXXX (date) in that I am now required to (1) XXXX, (2) XXXXX (specifically state what the bank rep told the caller). Accordingly and in reliance of our conversation, I shall perform as directed.If I am mistaken in any aspect of my understanding or that you did not have the authority to amend the mortgage contract, please provide written correspondence outlining my mistakes and correct me as to those mistakes/misunderstanding.Thank you.Sincerely,Homeowner(when sending in a lowered mortgage payment based on an oral representation)Write the following in the memo portion:mortgage for the month of XX/2012 based on oral modification of XX/2012 as incorporated by reference in my letter of XX/XX/2012.The last date should be the date of above letter sent. Send it certified mail after the phone call ends. The certified mail receipt would be proof that they got the mail and read it. This may not always be effective though, nor will it forestall foreclosure but there is a possibility of a civil lawsuit if the check is cashed with the information on the memo. A verbal contract is a binding contract but you need to prove what was said. The receipt from certified mail is proof and cashing the check is further proof. And one must write in the memo portion of the check: mortgage for the month of XX/2012 based on oral modification of XX/2012 as incorporated by reference in my letter of XX/XX/2012.
It would also be wise to get a notary public to certify the letter as authentic if any doubt should arise. Any form of defense would be helpful to protect the homeowner from what talk show host Thom Hartmann calls predatory capitalism. Protection from either a single or dual party state must do a lot of paperwork in order to save their homes and remain out of jail.
This is a preventative measure and there is no guarantee that this would work. But in order to prevent any form of predatory lending practices, this could be a supplement to a bigger lawsuit and that is a class action lawsuit: Rule 23…which is a lot more painful.