Our office is about to file a lawsuit in the Buffalo Bankruptcy Court seeking to have a mortgage held by PHH Mortgage declared void and unenforceable. The mortgage in question was written in 2006 by a company called Century 21 Mortgage. Although PHH claims this is an “alias” for its mortgage business, our office can find no evidence on the NYS Banking Department website that PHH Mortgage was licensed to use that trade name in 2006. As a result, we believe the mortgage cannot be enforced at all against the homeowner.
We are also seeking to have the mortgage declared invalid based upon the questionable PMI insurance policy associated with the mortgage. In this case, the bank is charging the homeowner $486 per month for PMI coverage on a mortgage amount of $130,000. The lawsuit will allege that the policy cost is nearly five times the amount that should have been charged and, further, that PHH may have received unlawful compensation from the PMI premiums. Under Banking Law 6-l and 6-m, the courts have the ability to invalidate high-cost and sub-prime mortgages for actions such as that alleged by the homeowner in this case.
The lawsuit will also seek to prove that “robo-signed” documents may have been presented to the Bankruptcy Court already. Specifically, it appears that a mortgage assignment attached to filed court documents may contain forged signatures on behalf of the prior mortgage holder. The lawsuit will seek to hold the lender in civil contempt.
Other claims under state and federal law will be included in the lawsuit. Fannie Mae will be named as a defendant, as will the issuers of the mortgage insurance policies.
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