The Laundry Man by Kenneth Rijock ( Penguin/Random House UK)

Wednesday, September 1, 2021

VICTIMS ALLEGE THAT FAY SERVICING ATTORNEYS MADE MATERIAL MISSTATEMENTS OF FACT IN FORECLOSURE PROCEEDINGS



The recent US District Court decision of King vs. Whitmer, Case No.: 20-113134 -LPV-RSW (E.D. Mich. 2021), in which attorneys for former President Donald Trump were sanctioned, and may ultimately be disbarred, for deceiving the Court regarding statements of nonexistent voting fraud, might be instructive in reigning in certain California attorneys representing the beleaguered mortgage servicing firm, Fay Servicing LLC. Fay has been in the news in recent years, due to what its detractors assert are illegal foreclosure methods, foreclosing upon residential mortgage while at the same time lading homeowners to believe that their application to modify the terms of their debt are under consideration. 

The Consumer Financial Protection Bureau (CFPB) sanctioned and fined Fay ( $1.15m fine) for its actions, which it held were "illegal foreclosure practices." (https://www.consumerfinance.gov/documents/4820/062017-cfpb_Fay-Servicing-consent-order.pdf).

Homeowners, who have been the subject of what they allege are sharp practices by California attorneys representing Fay, claim that the lawyers in foreclosure cases make material misstatements of fact to the Court. They allege that they are also being deceived by those attorneys, and therefore do not engage an attorney to protect their rights at a critical time.

While we recognize that Fay Servicing's lawyers are obligated to zealously represent their client's interests, that does not extend to making statements to judges in foreclosures cases that are patently untrue, to gain and advantage. Lawyers are Officers of the Court, and are required by their rules of ethics to refrain from making statements of fact that they know to be untrue.

While the victims have not yet publicly named the specific lawyers they have accused of misconduct, They have previously identified attorneys who represent Fay Servicing on this blog. We cannot confirm whether these attorneys are included in the group accused by victims of misconduct, and since proceedings filed in the State of California, for violations of the rules of Professional Conduct, are confidential while under  active investigation, and since we do not know which Fay lawyers, if any, are the subject of any victim complaints, we will have to wait for the results from the State Bar of California to verify their identities. (See www.calbar.ca.gov.) 

The Fay Servicing attorneys that victims have identified thus far are are  ARNOLD L. GRAFF and  KRISTINA M. PELLETIER. Again, we emphasize that the names of the specific attorneys who allegedly committed misconduct have not been publicly disclosed to us, nor have we any information on any flings to date by victims with the State Bar of California.

We shall be closely monitoring this matter, and shall report back to our readers on all developments as they occur.
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