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The Sword in the Stone

In the shadows of the rising sun, which would later become the revelation of the most powerful tool in the arsenal against "dual tracking [1]," a small number of lawyers were pining away over the final draft of the proposed legislation that was, in early December 2013, still only a glimmer of hope for consumers. Thank G-D, my colleagues and I were strategizing as to how the regulations under the Consumer Financial Regulations (CFR), would play out in state courts throughout Florida. We knew the overarching legal principles, which commands a separation between state law and Federal law, would be a challenge, however with a little know-how and battle-seasoned attorneys from the front lines in the "war" against Lender impropriety, the hurdle appeared to be crossed at last. The Federal Consumer Financial Protection Bureau's (CFPB) regulation(s) under 1024.41, effective as of January 10, 2014, would in fact be applicable not only to the States and their respective rulings over State law matters (property), but the State courts by in large, would be powerless to rule outside of the provisions.

Yehezkel Rodal, a/k/a "Chezky" (my mentor), and I, spent hours arguing back and forth as to the applicability of what would be commonly known as the CFPB. We went through case after case, until we found, that the very cases the Federal Savings Banks and Nation Banks have been using for years to by-pass their State requirements of filing a cost bond, would now bind them to the requirements and regulation of the Federal Government, thus eviscerating State power to allow them to do otherwise. The CFPB left the Lenders no way out of their responsibility to adhere to the new regulations and finally honor borrowers' good faith efforts to modify, or mitigate the losses on their loans. The question then still remains, what is the efficacy of the CFPB "sword?" Does the CFPB strike broadly, or is it a precision tool to be utilized strategically? I think the answer to these questions is that the CFPB, while a "sword," is sheathed in a "stone." The "stone" here refers to the burden Plaintiff may choose to undertake, or not.

While a Plaintiff is fully susceptible to legal remedies and civil penalties for violating the CFPB, the first goal is to have it accepted, albeit begrudgingly by the Circuit Court where so many of these cases progress. While the court CANNOT force a Plaintiff to violate the law and expose themselves to the ramifications of going against the CFPB ( See. RESPA), the Plaintiff can elect to disregard their supervisory regulatory body and foolishly proceed on dispositive motions, trial, and/or sales, despite complete (or facially complete) modification packages being submitted, in derogation of the rules and any sense of decency. For more information on CFPB and helping Borrowers fight back, let's make an appointment to meet at the Loan Lawyers office, and see how we can help you use this tool to defend your home once and for all.


[1] "Dual-tracking" is the term used to identify the once common practice of Financial Institutions (Banks) to fly under two flags simultaneously. The first (1) is the flag of helping the borrowers 'right' themselves when they have defaulted, by offering them and assisting them through the process of modifying delinquent loans, and/or assisting the borrower(s) just prior to defaulting, to get a better rate on their current loan(s). The second (2) is whilst under the guise of modifying your loan, the banks instituting, or proceeding with, a foreclosure cause of action to take the borrower's home, claiming they have simply been delinquent and should not be permitted under the law to keep their homes.

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  • Florida Trend's - Florida Legal Elite 2014
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