A Chapter 13 bankruptcy is a chance to start over. After falling behind on financial commitments, this type of bankruptcy can be used to save your home after being hit with unexpected expenses or a loss of income. At the end of a Chapter 13 Bankruptcy, the participant exits current on their home loan, confirmed by their lender and the court.
In December 2012, Ms. May of Missouri successfully completed her bankruptcy plan. But this fresh start would not last long. Within weeks of telling the bankruptcy court that she was current at the end of her bankruptcy plan, Nationstar Mortgage began claiming Ms. May was months behind immediately after her bankruptcy discharge. She continued making her agreed payments while Nationstar continued treating her account as further and further past due and eventually, in default. Ms. May sought legal assistance to stop Nationstar’s illegal and fraudulent campaign of debt collection harassment and threats of wrongful foreclosure. She brought a lawsuit against Nationstar, which ultimately led to a jury trial in the United States District Court, in November of 2015. David Humphreys and Luke Wallace of Humphreys Wallace Humphreys, Consumer Advocates and Trial Lawyers, located in Tulsa Oklahoma, represented Ms. May at trial.
Nationstar explained to the jury in its opening statement that it made errors. Nationstar went on to admit that they made numerous mistakes and that Ms. May should have always been considered current. She should not have been threatened with foreclosure. She should not have been continually called at work after requests to only call her personal phone. She should not have had to fight Nationstar for over a year, dealing with all the hardship that entailed. They claimed these mistakes were made in “good faith.” Labeling her loan account “complex,” Nationstar claimed to have fixed her account in a timely manner and implied that since her account was fixed, she suffered no harm.
Among the exhibits used at trial to rebut Nationstar’s claim of an honest error were mortgage statements, foreclosure notices, and intrusive home inspection photos. The errors were numerous and often. No one at Nationstar was willing to listen. Called as witnesses, company employees that interacted with Ms. May were presented to the jury. The front line employees contacting Ms. May lacked the knowledge and resources to examine the account and identify the error. As they had been trained, the “solution” to Ms. May’s patient explanation of Nationstar’s errors was to read the erroneous information in Nationstar’s system notes to her, repeatedly telling her that her loan was in default. In recordings made by Nationstar of the calls, Ms. May asked how she could receive statements from Nationstar declaring her months past due shortly after receiving statements declaring her current. The employees asked her to send proof to their various departments numerous times, yet no one returned answers. She became frustrated as this cycle continued, but she did not take it out on the employees, as she soon realized that they did not possess answers themselves.
Nationstar attempted to illustrate that Ms. May simply “fell through the cracks” due to the complex nature of her case. When attempting to take funds from an account under a similar name, Nationstar mistakenly drew thousands of dollars from Ms. May’s account, causing her default. Nationstar’s corporate witness, a company executive, finally discovered their error after an extended period of research. He testified that this issue needed to be escalated to a supervisor or vice president in order for the problem to be discovered and addressed. Nationstar employees who actually interact with borrowers aren’t trained to be able to solve borrower problems.
Nationstar may not have intended to drag Ms. May into this situation. But after doing so, they missed numerous opportunities for resolution. In the process they damaged much more than her mortgage account and her credit. Now facing a foreclosure that she had no hand in causing, she was on the verge of giving up and letting Nationstar get away with a wrongful foreclosure.
Counsel for both sides gave their closing statements before the jury retired to deliberate. The jury returned after several hours with a verdict granting Ms. May actual and punitive damages. The jury found Nationstar acted deliberately, with malice, or in reckless disregard of Ms. May’s legal rights. The jury found Nationstar intentionally invaded Ms. May’s right to privacy and made false reports about her payment history to at least one credit reporting agency. After trial the Court entered a judgment for Ms. May and against Nationstar, with attorney fees and court costs, of more than $880,000.00. For questions or if you seek additional information please call Humphreys Wallace Humphreys at 918-747-5300.