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PJC and Civil Justice Attack Foreclosure Scams

The Public Justice Center, acting as co-counsel with Civil Justice, Inc., represents Harriette Julian, a homeowner who was deceived into entering a fraudulent foreclosure “rescue” scam that ended in the theft of her home. The outcome of this case will impact numerous of other Maryland homeowners who have been tricked into entering similar transactions in desperate attempts to save their homes.
The foreclosure “consultants” had told Ms. Julian that they would help her to stay in her home while they refinanced her mortgage and used the equity in her home to pay a new mortgage, with an eventual transfer back to Ms. Julian. The consultants deeded Ms. Julian’s home to a third-party with a new mortgage to Wells Fargo Bank, but instead of paying the new mortgage with Ms. Julian’s equity, the scam artists absconded with the funds. Ms. Julian contacted Civil Justice and learned about her right to rescind the deed under a relatively new Maryland consumer protection law called the Protection of Homeowners in Foreclosure Act (PHIFA). Ms. Julian rescinded the deed, but Wells Fargo still initiated foreclosure proceedings. Ms. Julian intervened in the foreclosure, but the circuit court denied her objections and ratified the foreclosure sale. The Court of Special Appeals affirmed the lower court’s decision. Julian v. Buonassissi, No. 07-2740, (Md. Ct. Spec. App. filed Jan. 5, 2009).
On February 19, 2009, Murnaghan Appellate Advocacy Fellow Matthew Hill, acting as co-counsel with Phillip Robinson of Civil Justice, filed a petition for certiorari with the Maryland Court of Appeals, asking the Court to review the decision by the court below. The petition argued that the transaction granting an interest in the property to Wells Fargo was illegal under PHIFA, and therefore the deed of trust to Wells Fargo was void. The petition also argued that Wells Fargo cannot ignore signs that the deed was the subject of a foreclosure consulting contract and subsequently turn a blind eye to whether or not the transaction complied with PHIFA. Such reckless underwriting standards have fueled the current housing crisis, and unless the Court of Appeals holds Wells Fargo to account here, hundreds if not thousands of other deceived homeowners will lose their homes in these fraudulent “rescue” transactions. A decision on whether the Court of Appeals will agree to hear the case is expected within a couple of months.

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