Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Bar moves to lift license of controversial lawyer

Declaring that he poses a “substantial threat of harm to the public,” the State Bar has filed pleadings in State Bar Court to lift the law license of Michael T. Pines, the Carlsbad attorney who made national headlines by advising clients to break into their foreclosed homes and start living there again.

“To remove a lawyer from active practice on an interim basis before formal charges are filed is a drastic remedy,” said Chief Trial Counsel James Towery. “That remedy is justified by the established misconduct of Michael T. Pines. He has shown complete disrespect for the law, the courts and especially the best interests of his clients. Removing Mr. Pines from active practice is an important step in our mission of public protection.”

The State Bar Court scheduled a hearing April 12 to consider the bar’s petition. Pines remains active until the court acts.

Pines [#77771], 59, who has law offices in Carlsbad but lists his official address as Encinitas, was served notice March 11 that the State Bar seeks to have him enrolled as an inactive member of the bar under a section of the State Bar Act that allows swift action to remove an attorney from practice when he or she is causing substantial harm to clients or the public, when the evidence suggests the harmful behavior is likely to continue and when it is likely the State Bar will prevail on the merits of the case.

Pines said he would file a class action lawsuit against the bar, accusing the agency of helping debt collector attorneys who engage in illegal foreclosure activities. By press time, the bar had not been served with the suit.

Pines has been unapologetic about encouraging – and often physically helping – clients hire a locksmith to get into their foreclosed homes despite warnings from the court and police to stop the illegal activity. He has argued that the foreclosures themselves are illegal, so his clients have a right to repossession since they are still the legal owners of the homes.

In the application for inactive enrollment, Deputy Trial Counsel Brooke Schafer noted that in none of the cases in which Pines advised his clients to re-enter their homes in Carlsbad, Newport Beach and Simi Valley did they have a legal right to do so. Pines “acts with calculated purpose,” Schafer wrote in the petition. “He is harming both his clients and the public by advising clients to take the law into their own hands, and he uses his law license as a weapon. By his behavior, actions and freely offered statements he is a clear – and ongoing – danger both to his clients and to the public.”

The petition, which notes that Pines has been cited for contempt and criminally cited three times in less than a week, refers to three serious incidents involving break-ins and other criminal acts between October 2010 and February 2011.

On Feb. 18, he was arrested for making threats against occupants of a house that used to be owned by one of his clients, cited for trespassing on the property the following day and cited for violating a temporary restraining order at the site four days after that. He told a court his clients may break into the property again.

In October, Pines gave Newport Beach police advance notice that he and a client were going to take possession of a house the client had lost in foreclosure. Pines had claimed the foreclosure was illegal even though his client had not prevailed in court. For five hours, Pines “kept approximately seven police officers and an assistant city attorney wrapped up in his media circus” until Pines and his client were arrested, Schafer wrote in the petition.

Also in October, Schafer wrote, Pines accompanied his clients to their foreclosed Simi Valley home and advised them to break in despite a court ruling forbidding such an action. The family remained in the house for several days until the new owner got another writ of possession. 

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And  TAXPAYER FUNDED Fannie Mae "approved" lawyers that present forged documents on our courts continue to make millions and demand and get millions again in TAXPAYER money when they refuse to hand over corrupted "files" when they are fired... go merry along. Hummm
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Where are the hand-cuff for those Banksters who committed Fraud ?
When will the LawyersBars revokes licenses of those Foreclosure Mills who committed Fraud upon the Court and fabricated fraudulents documents ? David Stern and the band ?
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john

INTRODUCTION
COMES NOW JOHN LYSTAD and KAREN LYSTAD, debtors in the above referenced case (hereinafter "Plaintiff/Debtors"), through their attorney, the Law Office of Timothy C.

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 11 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 25 26 27 28

Springer to seek determination of the amount of the claim by SUNTRUST MORTGAGE, INC. (hereinafter "Defendants" whether one or more)
Plaintiff/Debtors object to Proof of Claim Number 5, filed on July 25, 2010 by Daniel K. Fujimoto for Defendants in the amount of $538,220.09 with arrearages in the amount of $49,540.41.
Plaintiff/Debtors seek damages against Defendants for fraud, fraudulent concealment, negligent misrepresentation, breach of contract, duress, emotional distress, violation of the Truth in Lending Act and regulation Z, violation of the California Predatory Lending Act, and violation of Business and Professions Code § 17200.
Debtors are seeking actual damages in the amount of $76,970.09, compensatory damages in the amount of $100,000.00 and punitive damages of $1,000,000.00 or an amount to be determined by this court.


In support of their complaint, Debtors allege as follows:
PROCEDURAL HISTORY AND JURISDICTION

17 1) On January 7, 2011, Plaintiff/Debtors commenced a voluntary case under Chapter 13 of the Bankruptcy Code, by filing a petition which has been assigned Case No. 11-10201-B-13F in this Court.
2) This adversary proceeding arises out of and relates to the Chapter 13 case of Plaintiff/Debtors Case No. 10-61191-B-13, on the docket of this court, filed September 28, 2010.
24 3) This court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 157 and 1334, and 11 U.S.C. §523 (a) (1) §157 (b) (2) (B) since Plaintiff/Debtors are directly objecting to the claim of Defendants and the amount shown on their proof of claim. This is a core proceeding.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 2
1
4) This may be a non-core proceeding with respect to the violations enumerated which led to the incorrect proof of claim, but which may be determined outside of the bankruptcy law and outside 28 U.S.C. § 157.

PARTIES

8 5) JOHN LYSTAD and KAREN LYSTAD are the debtors in the above referenced Chapter 13 case.
6) Defendant, SUNTRUST MORTGAGE, INC. was named in Schedule D of the Plaintiff/Debtors’ Petition as the holder of the First Deed of Trust on Plaintiff/Debtors’ residence.
14 7) Defendants, DOES 1-10 are persons or entities acting within the course and scope of their employment with SUNTRUST MORTGAGE, INC. and/or agents acting on behalf of SUNTRUST MORTGAGE, INC.
8) SUNTRUST MORTGAGE, INC and DOES 1-10 shall hereinafter be collectively referred to as "Defendants."

STATEMENT OF FACTS
  1. On September 11th 2001, Plaintiff/Debtor John Lystad was on the 61st floor of the World Trade Center South Tower, and using the money that Debtor received from injuries as a down payment Plaintiff/Debtor purchased the underlying real property. See Declaration of John Lystad filed concurrently herewith ("Dec. Lystad").

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 3
1
10) On March 28, 2006, Plaintiff/Debtor John Lystad, solely, executed a Deed of Trust in favor of Defendants in the amount of $461,250. See First Deed of Trust attached to Proof of Claim No. 5.
4 11) Plaintiff/Debtor John Lystad was told by Defendants that the must be in his name alone, although the property documents are in the names of both Plaintiff/Debtors.
7 12) In 2007, Plaintiff/Debtors were having financial difficulties and they sought a mortgage modification from Defendants. Dec. Lystad
9 13) Plaintiff/Debtors were told that they needed to be further behind in their mortgage and were told to stop making payments.
14) After a long period, Defendants verbally agreed to modify Plaintiff/Debtors’ loan. Dec. Lystad.
14 15) According to the verbal agreement the terms would be 5% interest for 30 years with any arrearages to be capitalized. Dec. Lystad.
16 16) On or about January 30, 2008, Defendants sent a letter to Plaintiff describing the terms of the new loan. A true and correct copy of the letter from Defendants dated January 30, 2008 with the loan documents is filed herewith as EXHIBIT A.
20 17) When Plaintiff/Debtors received the loan paperwork, they were confused because the loan payment did not significantly decrease and the interest rate was not lowered.
18) Defendants demanded that Plaintiff/Debtor wife sign the modification, despite the fact that she was not on the original loan, nor did she ever receive any of the original loan disclosures or information.
26 19) In fear for their house and under duress, Plaintiff/Debtor’s signed the loan modification. (hereinafter referred to as the "2008 loan"). Dec. Lystad.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 4
1
20) In EXHIBIT A, Defendants asserted that the principle balance was $451,060.33, and then added $18,099.08, for a new principle balance of $469,159.41. See EXHIBIT A.
3 21) Defendants had Plaintiff/Debtors remit an amount of $4,500 and Plaintiff/Debtors’ loan was modified. See EXHIBIT A.
22) Defendants applied the $4,500 as $500 towards fees $100 for a BPO and $3,900 towards escrow fees and then in the same letter capitalized delinquent escrow in the amount of $7,117.04, thus the total amount to escrow would be $11,017.04. See EXHIBIT A.
9 23) Plaintiff/Debtors assert that they were not $11,017.04 behind in their escrow. Dec. Lystad
10 24) EXHIBIT A states that the principle balance after capitalization was $469,159.41, the loan would be paid by April 2036, the interest rate would be 7.25%, and the payment would be $3,146.54. See EXHIBIT A.
14 25) Debtors made the $3,146.54 modification payment for one year. Dec. Lystad
15 26) About August 2008, Plaintiff/Debtors realized that their principle balance was not being reduced. Dec. Lystad
27) Debtors called the Defendants and objected to their handling of their loan because nothing was being applied to principle. Dec. Lystad
20 28) Plaintiff/Debtors fought with Defendants for several months regarding this issue and after speaking with Amy a loss mitigation supervisor, Defendants agreed to modify Plaintiff/Debtors loan.
29) Defendants agreed that for the payment of accrued fees, Defendants would modify Plaintiff/Debtors loan to the originally agreed 5%. Dec. Lystad
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 5
1
30) On July 20, 2009, Defendants sent a letter to Plaintiff describing the terms of the new loan, hereinafter "2009 loan." A true and correct copy of the letter from Defendants dated July 20, 2009 with the loan documents is filed herewith as EXHIBIT B.
4 31) EXHIBIT B states that the beginning principle balance was $469,159.41.
32) $469,159.41 is the capitalized amounts listed on EXHIBIT A AND the beginning balance on EXHBIT B. Thus Debtors had the exact same principle balance between January 2008 and July 2009. See EXHIBITS A&B
9 33) EXHIBIT B states that Plaintiff/Debtors owe interest in the amount of $17,007, which is exactly 6 months of interest on $469,159.41 calculated at 7.25%. See EXHIBIT B.
34) EXHIBITS A&B together evidence the fact that 12 months of principle payments although made were never allocated. See EXHIBITS A&B
14 35) Plaintiff/Debtors called Defendants and demanded an explanation. Dec. Lystad
15 36) Plaintiff/Debtors explained that they were supposed to have been paying 5% interest with the remainder of the payment going to principle. Dec. Lystad
37) Plaintiff/Debtors explained that Defendants had not been allocating any money towards the principle balance. Dec. Lystad
20 38) Filed herewith as EXHIBIT C is a true and correct copy of Debtors’ August and October 2008 mortgage statements showing year to date principal paid $0.00.
39) Plaintiff/Debtors spoke to several individual agents of Defendants and waited for a resolution. Dec. Lystad
25 40) Defendants admitted to Plaintiff/Debtors that they do not have a 30 year fixed payment, fixed interest, interest only loan. Dec. Lystad
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 6
1
41) Plaintiff/Debtors continued to assert that their payments had been incorrectly applied and stopped making payments in an attempt to force Defendants to live up to their agreement.
3 42) In July 2009, Defendants agreed to modify Plaintiff/Debtors loan to the originally agreed 5%. Dec. Lystad.
43) Plaintiff/Debtors objected that the principle that should have been applied for the prior year was still not correct. Dec. Lystad
8 44) Plaintiff/Debtors were told by Defendants that either they sign the paperwork or Defendants would foreclosure on their house. Dec. Lystad
10 45) Plaintiff/Debtors signed the paperwork under duress as instructed and began making the new payments. Dec. Lystad
13 46) In 2009, Debtor had a heart attack. Dec. Lystad
14 47) Based on information and belief, the stress and strain caused by Defendants was a major contributing factor. Dec. Lystad
16 48) On July 25, 2010, Defendants filed a claim in Debtor/Plaintiffs’ Chapter 13 Bankruptcy in the amount of $538,220.09 with arrearages in the amount of $49,540.41.
19 49) Plaintiff/Debtors original loan was for $461,750.
20 50) Plaintiff/Debtors have already made 3 years worth of payments. Dec. Lystad
21 51) Plaintiff/Debtors allege based on information and belief that Defendants overstated their claim as much as $76,970.09, and based on Defendants own letters, overstated the arrearages as much as $31,452.04. Dec. Lystad
25 52) Proof of Claim Number 5 was filed on July 25, 2010 by Daniel K. Fujimoto for Defendants in the amount of $538,220.09 with arrearages in the amount of $49,540.41.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 7
1
53) Proof of Claim Number 5 filed by Defendants incorrectly asserts missed payments that were actually made by Plaintiff/Debtors. Dec. Lystad.
3 54) Filed herewith as EXHIBIT D is a printout from Defendants’ webpage showing payments made by Plaintiff/Debtors during the period in which the proof of claim asserts that no payments were made.
7 55) Filed herewith as EXHIBIT E is a printout from Defendants’ webpage showing an original loan amount of $483,733, however, that number was not on any of the loan documents for any of the modifications.
10 56) Proof of Claim Number 5 filed by Defendants incorrectly attaches the original note signed by Plaintiff/Debtor in 2006 and not the active modified agreement signed by Plaintiff/Debtors in 2009. Dec. Lystad
14 57) Proof of Claim Number 5 filed by Defendants is incorrect in that the amounts of the Defendants claim are incorrect based on their above failure to properly allocate payments for the prior years. Dec. Lystad.

FIRST CAUSE OF ACTION: OBJECTION TO CLAIM AND REQUST FOR DETERMINATION OF CLAIM AMOUNT UNDER 11 U.S.C. § 502
[As to ALL DEFENDANTS]

21 58) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
23 59) Proof of Claim Number 5 was filed on July 25, 2010 by Daniel K. Fujimoto for Defendants in the amount of $538,220.09 with arrearages in the amount of $49,540.41.
26 60) Plaintiff/Debtors assert that the amount of Proof of Claim No. 5 is incorrect.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 8
1
61) Plaintiff/Debtors assert that the arrearage amount listed on Proof of Claim No. 5 is incorrect.
3 62) Using an amortization table along with EXHIBIT A and EXHIBIT B to Determine the amount of Plaintiff/Debtors claim, demonstrates that the amount of Proof of Claim No. 5 is incorrect.
7 63) Proof of Claim Number 5 is incorrect because Defendants have not correctly applied principle payments nor properly applied the loan payments.
9 64) Proof of Claim Number 5 is incorrect because Defendants arrearage calculation is incorrect.
65) Proof of Claim Number 5 is incorrect because Defendants have attached the original loan documents rather than the second modified loan which is actively in place.
14 66) Proof of Claim Number 5 is incorrect because it lists payments that were not made by Plaintiff/Debtors; however, EXHIBIT D shows some of those payments.
16 67) Plaintiff/Debtors have provided several documents in the form of the exhibits attached hereto, demonstrating that Proof of Claim Number 5 is incorrect.
19 68) Plaintiff/Debtors request an evidentiary hearing.
20 69) Plaintiff/Debtors request a determination by this court of the correct amount due and owing to Defendants.

SECOND CAUSE OF ACTION: BREACH OF CONTRACT
[As to ALL DEFENDANTS]

25 70) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 9
1
71) Plaintiff/Debtors and Defendants signed a loan modification contract on or about January 30, 2008.
3 72) In the contracts Defendants agreed to make and Plaintiff/Debtors agreed to pay a 30-year fixed interest amortized loan.
73) Defendants determined the payment amount and agreed to apply that payment to principle and interest with Plaintiff/Debtors loan to be paid off by April 2036.
8 74) Plaintiff/Debtors made 12 payments under the contract.
9 75) Defendants breached the contract by failing to allocate any of the payment to principle.
10 76) Defendants mailed Plaintiff/Debtors EXHIBIT C, which states that as of October 2008, the year to date principle amount allocated is $0.00.
13 77) After the contract was breached by the Defendants, Plaintiff/Debtors stopped making payments to Defendants
15 78) After six months, Defendants presented Debtor/Plaintiffs with a new contract that included false statements of the debt owed.
79) Debtor/Plaintiffs demanded a correction of the principle balance, but they were told that either they agree or their house would be sold.
20 80) Debtor/Plaintiff signed the new contract under duress.
21 81) Plaintiff/Debtors alleges on information and belief that Defendants willfully and knowingly breached the 2008 loan contract.
82) Plaintiff/Debtors alleges on information and belief that Defendants willfully and knowingly forced Plaintiff/Debtors to sign a new contract under duress.
26 83) As a direct and proximate result of Defendants' actions Plaintiff/Debtors has suffered actual and statutory damages in an amount to be proven at the time of trial.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 10
1
84) Defendants', conduct was done with reckless disregard for the requirements of the law and for the safety, wellbeing, and legal rights of Plaintiff/Debtors. Plaintiff/Debtors therefore request an award of punitive damages pursuant to Civil Code section 3294 as against all Defendants.
85) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

THIRD CAUSE OF ACTION: VIOLATION OF THE TRUTH IN LENDING ACT AND IMPLEMENTARY REGULATION Z
(15 U.S.C. 1601 et sec.)
[As to ALL DEFENDANTS]

86) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
15 87) The pertinent parts of Section 226.18 of Regulation Z regarding the Truth in Lending Act [12 C.F.R. § 226.18] states that for each transaction, the creditor shall disclose the following information as applicable: (g) Payment schedule. Other than for a transaction that is subject to paragraph (s) of this section, the number amounts, and timing of payments scheduled to repay the obligation; (s) Interest rate and payment summary for mortgage transactions. For a closed-end transaction secured by real property or a dwelling, other than a transaction secured by a consumer's interest in a timeshare plan described in 11 U.S.C. 101(53D), the creditor shall disclose the following information about the interest rate and payments: (2) Interest rates—(i) Amortizing loans. (A) For a fixed-rate mortgage, the interest rate at consummation; (B) For an adjustable-rate or step-rate mortgage— (ii) Negative amortization loan; Interest-only payments. (4) Payments
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 111 2 4 5 6 7 8 10 11 12 13 15 17 18 20 22 23 24 25 26 27 28
for negative amortization loans. For negative amortization loans: (6) Special disclosures for loans with negative amortization.
3 88) Defendants violated Section 226.18 of Regulation Z because they did not did not disclose to Plaintiff/Debtors the items listed above, and based on information and belief Plaintiff/Debtors assert that it is likely that after discovery, Plaintiff/Debtors will determine other items improperly disclosed and reserve the right to amend and include such violations.
9 89) Defendants failed to provide Plaintiff/Debtors with any disclosures stating their loan would not be applied to principle.
90) Defendants failed to follow Regulation Z with regard to negative amortization and/or an interest only loan.
14 91) Based on information and belief, Defendants added Plaintiff/Debtor wife to the loan documents without giving her any required disclosures or information.
16 92) Based on information and belief, Defendants demanded that Plaintiff/Debtor wife become liable on the loan or Defendants’ would foreclose on the property.
19 93) Plaintiff/Debtors alleges on information and belief that Defendants violations enumerated above were willful and knowing.
21 94) Plaintiff/Debtors alleges on information and belief that Defendants, and each of their, violations enumerated above were willful and knowing.
95) As a direct and proximate result of Defendants' violations of the Truth in Lending Act, Plaintiff/Debtors have suffered actual and statutory damages in an amount to be proven at the time of trial.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 12
1
96) As a direct and proximate result of Defendants' violations of the Truth in Lending Act Defendants are liable for statutory damages under 15 U.S.C. 1601.
3 97) Defendants', conduct was done with reckless disregard for the requirements of the law and for the safety, wellbeing, and legal rights of Plaintiff/Debtors. Plaintiff/Debtors therefore request an award of punitive damages pursuant to Civil Code section 3294 as against all Defendants.
8 98) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

FOURTH CAUSE OF ACTION: VIOLATION OF CALIFORNIA PREDATORY LENDING ACT
(Cal. Fin. Code §§ 4970 et sec.)


[As to ALL DEFENDANTS]

14 99) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
100) The Defendants made the consumer loan pursuant to the California Predatory Lending Law insofar as they arranged, negotiated or made the consumer loan. (Cal. Fin. Code §4970(b))
20 101) The Defendants violated the Predatory Lending Law. Said violations include, but are not limited to, the following violation of California Financial Code §4973 (c) A covered loan shall not contain a provision for negative amortization such that the payment schedule for regular monthly payments causes the principal balance to increase, unless the covered loan is a first mortgage and the person who originates the loan discloses to the consumer that the loan contains a negative amortization provision that may add principal to the balance of the loan.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 13
1
102) The Defendants, and each of them, failed to discloses to the consumer that the loan contains a negative amortization provision that may add principal to the balance of the loan and The Defendants, and each of them, acted in a manner that constitutes fraud. (Cal. Fin. Code §4973(2)(n)).
103) Plaintiff/Debtors alleges on information and belief that Defendants, and each of their, violations enumerated above were willful and knowing.
8 104) As a direct and proximate result of Defendants' violations of California's Predatory Lending Law, Plaintiff/Debtors has suffered actual and statutory damages in an amount to be proven at the time of trial.
105) Defendants' conduct was done with reckless disregard for the requirements of the law and for the safety, wellbeing, and legal rights of Plaintiff/Debtors. Plaintiff/Debtors therefore request an award of punitive damages pursuant to Civil Code section 3294 as against all Defendants. (Cal. Fin. Code §4978(b)(2)).
16 106) Defendants are jointly and severally liable for their violations of California's Predatory Lending Law pursuant to California Financial Code §4974(b).
19 107) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

/ / /
/ / /
/ / /
/ / /
/ / /

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 141 2 3 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28

FIFTH CAUSE OF ACTION FRAUD, FRAUDULENT CONCEALMENT AND NEGLIGENT MISREPRESENTATION
[As to ALL DEFENDANTS]

4 108) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
6 109) Defendants and/or their agents made the following representations to Plaintiff/Debtors:
a. As to the 2008 loan:

      1. That a portion of Plaintiff/Debtors’ payment would be allocated to principle so that the debt would be repaid in August of 2036.
      2. That Defendants had been allocating a portion of Plaintiff/Debtors’ payments
      3. That the interest rate would be 5%
      4. b. As to the 2009 loan:
      5. That if Plaintiff/Debtors’ wished to avoid foreclosure they must sign the modification.
      6. That the arrearages accurately reflected the actual arrearages with respect to Plaintiff/Debtors’ loan.

22 110) Plaintiff/Debtors allege that at all times herein mentioned, representations made to Plaintiff/Debtors pertaining to their loan were false and fraudulent.
111) The representations made by Defendants were, in fact, false. When Defendants made these representations, they knew them to be false. These representations were made by Defendants with intent to defraud and deceive Plaintiff/Debtors and with intent to induce Plaintiff/Debtors to act in the manner herein alleged.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 15
1
112) Further, at the time Defendants made the promises to Plaintiff/Debtors, Defendants had no intention of truthfully or lawfully performing them.
3 113) Plaintiff/Debtors, at the time these representations were made by Defendants and at the time Plaintiff/Debtors took the actions herein stated, were ignorant of the falsity of Defendants’ representations and believed them to be true.
7 114) Plaintiff/Debtors, at the time promises were made and at the time they took the actions herein stated, were ignorant of Defendants’ secret intention not to perform and Plaintiff/Debtors could not, in the exercise of reasonable diligence, have discovered Defendants’ secret intention.
115) In reliance on these representations, Plaintiff/Debtors were induced to sign the mortgage modification contract and pay Defendants’ the upfront fees and costs.
14 116) Had Plaintiff/Debtors known the actual facts, Plaintiff/Debtors would not have completed the transaction.
16 117) Plaintiff/Debtors’ reliance on Defendants’ representations was further justified because Plaintiff/Debtors are unsophisticated borrowers, ignorant of the financial machinations and instruments being used to complete the transaction and were forced to reasonably rely on the advice and superior knowledge of the Defendants.
21 118) As a proximate result of Defendants’ fraud and deceit and the facts herein alleged, Plaintiff/Debtors were fraudulently induced to enter into a transaction that represented itself to be a fixed term loan, but in fact based on Defendants allocations, had Plaintiff/Debtors continued to make the payment for 30 years their loan would have stayed at the same balance.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 16
1
119) Plaintiff/Debtors were forced to take action in order to compel Defendants to live up to the agreed bargain and ended up requiring bankruptcy to protect their house. Therefore, by reason of Defendants’ fraud, Plaintiff/Debtors have suffered damages.
4 120) In doing the acts herein alleged, Defendants acted with oppression, fraud, and malice, and Plaintiff/Debtors is, therefore, entitled to compensatory and punitive damages in a sum to be determined at trial and such other and further legal and equitable relief as may be deemed just and proper.
9 121) Defendants made these representations for the purpose of enticing Plaintiff/Debtors to make the loan described herein. Plaintiff/Debtors reasonably relied upon these representations.
13 122) Defendants made the following false representations either negligently or intentionally to Plaintiff/Debtors:

    1. Defendants misrepresented the finance charges and annual percentage rate, as defined by applicable federal law that the Plaintiff/Debtors were paying for the loan.
    2. Defendants misrepresented prior to delivering the loan documents that the loan would have an interest rate of 5% percent, but actually gave Plaintiff/Debtors a loan of 7.25%, unbeknownst to Plaintiff/Debtors.

123) By intentionally misrepresenting the terms of Plaintiff/Debtors’ loan and misallocating the payments, Defendants violated California Business and Professions Code §17200 et seq, and their implied "covenant of good faith and fair dealing"
26 124) Based upon the representations of Defendants, Plaintiff/Debtors reposed their trust in the representations of Defendants. Such trust was reasonable. Plaintiff/Debtors
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 171 2 4 5 6 8 9 11 12 13 15 16 17 18 20 21 22 23 24 25 26 27 28
relied on Defendants’ professional statements that the loan would be repaid as stated on the documents.
3 125) Plaintiff/Debtors allege on information and belief that Defendants knew at the time they made these misrepresentations of material facts to Plaintiff/Debtors that were untrue.
7 126) Plaintiff/Debtors alleges on information and belief that Defendants, through their fraudulent scheme, intentionally and fraudulently charged Plaintiff/Debtors over $50,000 that would not have occurred had Defendants’ properly allocated the loan.
10 127) Plaintiff/Debtors allege that the loan was unconscionable in that the repayment terms were unfair and unduly oppressive, because the payments were never applied to the principle.
14 128) Defendants have alleged that Plaintiff/Debtors defaulted on their residential home loan, and that this default was not directly related to the structure of the loan and interest rate. However, Defendants prior fraud during the loan transaction has excused Plaintiff/Debtors from any performance.
19 129) Plaintiff/Debtors alleges that by virtue of their reasonable reliance and the increased interest they were made to pay, that they have been damaged in the loss of good credit and a higher payment and are now being involved in litigation, all to their damage and injury.
130) Plaintiff/Debtors has been made to suffer deep and severe emotional distress, mortification, anxiety, and humiliation all to their damage and injury in an amount which has not yet been fully ascertained, but in no event less than the jurisdictional limitations of this court.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 18
1
131) Defendants’ conduct as set forth above was intentional, oppressive, fraudulent, malicious, and/or in reckless disregard of Plaintiff/Debtors’ statutory rights, so as to justify an award of punitive damages in an amount sufficient that such conduct will not be repeated.
132) As a direct and proximate result of the misrepresentations of Defendants, Plaintiff/Debtors have been injured in an amount to be proven at trial and therefore Plaintiff/Debtors are entitled to recover such damages from Defendants, and each of them, individually and severally.
10 133) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

SIXTH CAUSE OF ACTION: DURESS
[AS TO ALL DEFENDANTS]

16 134) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
18 135) Defendants failed to accurately apply the payments that they were given by Plaintiff/Debtors.
21 136) When Plaintiff/Debtors complained Defendants asserted that they should be taking Debtor’s home and demanded that Plaintiff/Debtors sign a modification contract and return it in 24 hours or that Defendants would take we will take Plaintiff/Debtors’ home.
137) Defendants’ threat was illegal.
27 138) Defendants did not have the right to take Plaintiff/Debtors’ home after illegally misappropriating Plaintiff/Debtors’ payments.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 19
1
139) Plaintiff/Debtors’ signed and returned the modification contract in fear that the Defendants’ would take Plaintiff/Debtors’ home.
3 140) As a direct result of Defendants’ acts, Plaintiff/Debtors have incurred actual damages and injury in fact consisting of lost money and property.
141) By virtue of Defendants’ actions, Plaintiff/Debtors are entitled to recover punitive damages in an amount to deter such wrongful conduct in the future.
8 142) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

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john

INTRODUCTION
COMES NOW JOHN LYSTAD and KAREN LYSTAD, debtors in the above referenced case (hereinafter "Plaintiff/Debtors"), through their attorney, the Law Office of Timothy C.

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 11 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 18 19 20 21 22 23 25 26 27 28

Springer to seek determination of the amount of the claim by SUNTRUST MORTGAGE, INC. (hereinafter "Defendants" whether one or more)
Plaintiff/Debtors object to Proof of Claim Number 5, filed on July 25, 2010 by Daniel K. Fujimoto for Defendants in the amount of $538,220.09 with arrearages in the amount of $49,540.41.
Plaintiff/Debtors seek damages against Defendants for fraud, fraudulent concealment, negligent misrepresentation, breach of contract, duress, emotional distress, violation of the Truth in Lending Act and regulation Z, violation of the California Predatory Lending Act, and violation of Business and Professions Code § 17200.
Debtors are seeking actual damages in the amount of $76,970.09, compensatory damages in the amount of $100,000.00 and punitive damages of $1,000,000.00 or an amount to be determined by this court.


In support of their complaint, Debtors allege as follows:
PROCEDURAL HISTORY AND JURISDICTION

17 1) On January 7, 2011, Plaintiff/Debtors commenced a voluntary case under Chapter 13 of the Bankruptcy Code, by filing a petition which has been assigned Case No. 11-10201-B-13F in this Court.
2) This adversary proceeding arises out of and relates to the Chapter 13 case of Plaintiff/Debtors Case No. 10-61191-B-13, on the docket of this court, filed September 28, 2010.
24 3) This court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 157 and 1334, and 11 U.S.C. §523 (a) (1) §157 (b) (2) (B) since Plaintiff/Debtors are directly objecting to the claim of Defendants and the amount shown on their proof of claim. This is a core proceeding.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 2
1
4) This may be a non-core proceeding with respect to the violations enumerated which led to the incorrect proof of claim, but which may be determined outside of the bankruptcy law and outside 28 U.S.C. § 157.

PARTIES

8 5) JOHN LYSTAD and KAREN LYSTAD are the debtors in the above referenced Chapter 13 case.
6) Defendant, SUNTRUST MORTGAGE, INC. was named in Schedule D of the Plaintiff/Debtors’ Petition as the holder of the First Deed of Trust on Plaintiff/Debtors’ residence.
14 7) Defendants, DOES 1-10 are persons or entities acting within the course and scope of their employment with SUNTRUST MORTGAGE, INC. and/or agents acting on behalf of SUNTRUST MORTGAGE, INC.
8) SUNTRUST MORTGAGE, INC and DOES 1-10 shall hereinafter be collectively referred to as "Defendants."

STATEMENT OF FACTS
  1. On September 11th 2001, Plaintiff/Debtor John Lystad was on the 61st floor of the World Trade Center South Tower, and using the money that Debtor received from injuries as a down payment Plaintiff/Debtor purchased the underlying real property. See Declaration of John Lystad filed concurrently herewith ("Dec. Lystad").

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 3
1
10) On March 28, 2006, Plaintiff/Debtor John Lystad, solely, executed a Deed of Trust in favor of Defendants in the amount of $461,250. See First Deed of Trust attached to Proof of Claim No. 5.
4 11) Plaintiff/Debtor John Lystad was told by Defendants that the must be in his name alone, although the property documents are in the names of both Plaintiff/Debtors.
7 12) In 2007, Plaintiff/Debtors were having financial difficulties and they sought a mortgage modification from Defendants. Dec. Lystad
9 13) Plaintiff/Debtors were told that they needed to be further behind in their mortgage and were told to stop making payments.
14) After a long period, Defendants verbally agreed to modify Plaintiff/Debtors’ loan. Dec. Lystad.
14 15) According to the verbal agreement the terms would be 5% interest for 30 years with any arrearages to be capitalized. Dec. Lystad.
16 16) On or about January 30, 2008, Defendants sent a letter to Plaintiff describing the terms of the new loan. A true and correct copy of the letter from Defendants dated January 30, 2008 with the loan documents is filed herewith as EXHIBIT A.
20 17) When Plaintiff/Debtors received the loan paperwork, they were confused because the loan payment did not significantly decrease and the interest rate was not lowered.
18) Defendants demanded that Plaintiff/Debtor wife sign the modification, despite the fact that she was not on the original loan, nor did she ever receive any of the original loan disclosures or information.
26 19) In fear for their house and under duress, Plaintiff/Debtor’s signed the loan modification. (hereinafter referred to as the "2008 loan"). Dec. Lystad.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 4
1
20) In EXHIBIT A, Defendants asserted that the principle balance was $451,060.33, and then added $18,099.08, for a new principle balance of $469,159.41. See EXHIBIT A.
3 21) Defendants had Plaintiff/Debtors remit an amount of $4,500 and Plaintiff/Debtors’ loan was modified. See EXHIBIT A.
22) Defendants applied the $4,500 as $500 towards fees $100 for a BPO and $3,900 towards escrow fees and then in the same letter capitalized delinquent escrow in the amount of $7,117.04, thus the total amount to escrow would be $11,017.04. See EXHIBIT A.
9 23) Plaintiff/Debtors assert that they were not $11,017.04 behind in their escrow. Dec. Lystad
10 24) EXHIBIT A states that the principle balance after capitalization was $469,159.41, the loan would be paid by April 2036, the interest rate would be 7.25%, and the payment would be $3,146.54. See EXHIBIT A.
14 25) Debtors made the $3,146.54 modification payment for one year. Dec. Lystad
15 26) About August 2008, Plaintiff/Debtors realized that their principle balance was not being reduced. Dec. Lystad
27) Debtors called the Defendants and objected to their handling of their loan because nothing was being applied to principle. Dec. Lystad
20 28) Plaintiff/Debtors fought with Defendants for several months regarding this issue and after speaking with Amy a loss mitigation supervisor, Defendants agreed to modify Plaintiff/Debtors loan.
29) Defendants agreed that for the payment of accrued fees, Defendants would modify Plaintiff/Debtors loan to the originally agreed 5%. Dec. Lystad
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 5
1
30) On July 20, 2009, Defendants sent a letter to Plaintiff describing the terms of the new loan, hereinafter "2009 loan." A true and correct copy of the letter from Defendants dated July 20, 2009 with the loan documents is filed herewith as EXHIBIT B.
4 31) EXHIBIT B states that the beginning principle balance was $469,159.41.
32) $469,159.41 is the capitalized amounts listed on EXHIBIT A AND the beginning balance on EXHBIT B. Thus Debtors had the exact same principle balance between January 2008 and July 2009. See EXHIBITS A&B
9 33) EXHIBIT B states that Plaintiff/Debtors owe interest in the amount of $17,007, which is exactly 6 months of interest on $469,159.41 calculated at 7.25%. See EXHIBIT B.
34) EXHIBITS A&B together evidence the fact that 12 months of principle payments although made were never allocated. See EXHIBITS A&B
14 35) Plaintiff/Debtors called Defendants and demanded an explanation. Dec. Lystad
15 36) Plaintiff/Debtors explained that they were supposed to have been paying 5% interest with the remainder of the payment going to principle. Dec. Lystad
37) Plaintiff/Debtors explained that Defendants had not been allocating any money towards the principle balance. Dec. Lystad
20 38) Filed herewith as EXHIBIT C is a true and correct copy of Debtors’ August and October 2008 mortgage statements showing year to date principal paid $0.00.
39) Plaintiff/Debtors spoke to several individual agents of Defendants and waited for a resolution. Dec. Lystad
25 40) Defendants admitted to Plaintiff/Debtors that they do not have a 30 year fixed payment, fixed interest, interest only loan. Dec. Lystad
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 6
1
41) Plaintiff/Debtors continued to assert that their payments had been incorrectly applied and stopped making payments in an attempt to force Defendants to live up to their agreement.
3 42) In July 2009, Defendants agreed to modify Plaintiff/Debtors loan to the originally agreed 5%. Dec. Lystad.
43) Plaintiff/Debtors objected that the principle that should have been applied for the prior year was still not correct. Dec. Lystad
8 44) Plaintiff/Debtors were told by Defendants that either they sign the paperwork or Defendants would foreclosure on their house. Dec. Lystad
10 45) Plaintiff/Debtors signed the paperwork under duress as instructed and began making the new payments. Dec. Lystad
13 46) In 2009, Debtor had a heart attack. Dec. Lystad
14 47) Based on information and belief, the stress and strain caused by Defendants was a major contributing factor. Dec. Lystad
16 48) On July 25, 2010, Defendants filed a claim in Debtor/Plaintiffs’ Chapter 13 Bankruptcy in the amount of $538,220.09 with arrearages in the amount of $49,540.41.
19 49) Plaintiff/Debtors original loan was for $461,750.
20 50) Plaintiff/Debtors have already made 3 years worth of payments. Dec. Lystad
21 51) Plaintiff/Debtors allege based on information and belief that Defendants overstated their claim as much as $76,970.09, and based on Defendants own letters, overstated the arrearages as much as $31,452.04. Dec. Lystad
25 52) Proof of Claim Number 5 was filed on July 25, 2010 by Daniel K. Fujimoto for Defendants in the amount of $538,220.09 with arrearages in the amount of $49,540.41.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 7
1
53) Proof of Claim Number 5 filed by Defendants incorrectly asserts missed payments that were actually made by Plaintiff/Debtors. Dec. Lystad.
3 54) Filed herewith as EXHIBIT D is a printout from Defendants’ webpage showing payments made by Plaintiff/Debtors during the period in which the proof of claim asserts that no payments were made.
7 55) Filed herewith as EXHIBIT E is a printout from Defendants’ webpage showing an original loan amount of $483,733, however, that number was not on any of the loan documents for any of the modifications.
10 56) Proof of Claim Number 5 filed by Defendants incorrectly attaches the original note signed by Plaintiff/Debtor in 2006 and not the active modified agreement signed by Plaintiff/Debtors in 2009. Dec. Lystad
14 57) Proof of Claim Number 5 filed by Defendants is incorrect in that the amounts of the Defendants claim are incorrect based on their above failure to properly allocate payments for the prior years. Dec. Lystad.

FIRST CAUSE OF ACTION: OBJECTION TO CLAIM AND REQUST FOR DETERMINATION OF CLAIM AMOUNT UNDER 11 U.S.C. § 502
[As to ALL DEFENDANTS]

21 58) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
23 59) Proof of Claim Number 5 was filed on July 25, 2010 by Daniel K. Fujimoto for Defendants in the amount of $538,220.09 with arrearages in the amount of $49,540.41.
26 60) Plaintiff/Debtors assert that the amount of Proof of Claim No. 5 is incorrect.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 8
1
61) Plaintiff/Debtors assert that the arrearage amount listed on Proof of Claim No. 5 is incorrect.
3 62) Using an amortization table along with EXHIBIT A and EXHIBIT B to Determine the amount of Plaintiff/Debtors claim, demonstrates that the amount of Proof of Claim No. 5 is incorrect.
7 63) Proof of Claim Number 5 is incorrect because Defendants have not correctly applied principle payments nor properly applied the loan payments.
9 64) Proof of Claim Number 5 is incorrect because Defendants arrearage calculation is incorrect.
65) Proof of Claim Number 5 is incorrect because Defendants have attached the original loan documents rather than the second modified loan which is actively in place.
14 66) Proof of Claim Number 5 is incorrect because it lists payments that were not made by Plaintiff/Debtors; however, EXHIBIT D shows some of those payments.
16 67) Plaintiff/Debtors have provided several documents in the form of the exhibits attached hereto, demonstrating that Proof of Claim Number 5 is incorrect.
19 68) Plaintiff/Debtors request an evidentiary hearing.
20 69) Plaintiff/Debtors request a determination by this court of the correct amount due and owing to Defendants.

SECOND CAUSE OF ACTION: BREACH OF CONTRACT
[As to ALL DEFENDANTS]

25 70) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 9
1
71) Plaintiff/Debtors and Defendants signed a loan modification contract on or about January 30, 2008.
3 72) In the contracts Defendants agreed to make and Plaintiff/Debtors agreed to pay a 30-year fixed interest amortized loan.
73) Defendants determined the payment amount and agreed to apply that payment to principle and interest with Plaintiff/Debtors loan to be paid off by April 2036.
8 74) Plaintiff/Debtors made 12 payments under the contract.
9 75) Defendants breached the contract by failing to allocate any of the payment to principle.
10 76) Defendants mailed Plaintiff/Debtors EXHIBIT C, which states that as of October 2008, the year to date principle amount allocated is $0.00.
13 77) After the contract was breached by the Defendants, Plaintiff/Debtors stopped making payments to Defendants
15 78) After six months, Defendants presented Debtor/Plaintiffs with a new contract that included false statements of the debt owed.
79) Debtor/Plaintiffs demanded a correction of the principle balance, but they were told that either they agree or their house would be sold.
20 80) Debtor/Plaintiff signed the new contract under duress.
21 81) Plaintiff/Debtors alleges on information and belief that Defendants willfully and knowingly breached the 2008 loan contract.
82) Plaintiff/Debtors alleges on information and belief that Defendants willfully and knowingly forced Plaintiff/Debtors to sign a new contract under duress.
26 83) As a direct and proximate result of Defendants' actions Plaintiff/Debtors has suffered actual and statutory damages in an amount to be proven at the time of trial.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 10
1
84) Defendants', conduct was done with reckless disregard for the requirements of the law and for the safety, wellbeing, and legal rights of Plaintiff/Debtors. Plaintiff/Debtors therefore request an award of punitive damages pursuant to Civil Code section 3294 as against all Defendants.
85) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

THIRD CAUSE OF ACTION: VIOLATION OF THE TRUTH IN LENDING ACT AND IMPLEMENTARY REGULATION Z
(15 U.S.C. 1601 et sec.)
[As to ALL DEFENDANTS]

86) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
15 87) The pertinent parts of Section 226.18 of Regulation Z regarding the Truth in Lending Act [12 C.F.R. § 226.18] states that for each transaction, the creditor shall disclose the following information as applicable: (g) Payment schedule. Other than for a transaction that is subject to paragraph (s) of this section, the number amounts, and timing of payments scheduled to repay the obligation; (s) Interest rate and payment summary for mortgage transactions. For a closed-end transaction secured by real property or a dwelling, other than a transaction secured by a consumer's interest in a timeshare plan described in 11 U.S.C. 101(53D), the creditor shall disclose the following information about the interest rate and payments: (2) Interest rates—(i) Amortizing loans. (A) For a fixed-rate mortgage, the interest rate at consummation; (B) For an adjustable-rate or step-rate mortgage— (ii) Negative amortization loan; Interest-only payments. (4) Payments
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 111 2 4 5 6 7 8 10 11 12 13 15 17 18 20 22 23 24 25 26 27 28
for negative amortization loans. For negative amortization loans: (6) Special disclosures for loans with negative amortization.
3 88) Defendants violated Section 226.18 of Regulation Z because they did not did not disclose to Plaintiff/Debtors the items listed above, and based on information and belief Plaintiff/Debtors assert that it is likely that after discovery, Plaintiff/Debtors will determine other items improperly disclosed and reserve the right to amend and include such violations.
9 89) Defendants failed to provide Plaintiff/Debtors with any disclosures stating their loan would not be applied to principle.
90) Defendants failed to follow Regulation Z with regard to negative amortization and/or an interest only loan.
14 91) Based on information and belief, Defendants added Plaintiff/Debtor wife to the loan documents without giving her any required disclosures or information.
16 92) Based on information and belief, Defendants demanded that Plaintiff/Debtor wife become liable on the loan or Defendants’ would foreclose on the property.
19 93) Plaintiff/Debtors alleges on information and belief that Defendants violations enumerated above were willful and knowing.
21 94) Plaintiff/Debtors alleges on information and belief that Defendants, and each of their, violations enumerated above were willful and knowing.
95) As a direct and proximate result of Defendants' violations of the Truth in Lending Act, Plaintiff/Debtors have suffered actual and statutory damages in an amount to be proven at the time of trial.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 12
1
96) As a direct and proximate result of Defendants' violations of the Truth in Lending Act Defendants are liable for statutory damages under 15 U.S.C. 1601.
3 97) Defendants', conduct was done with reckless disregard for the requirements of the law and for the safety, wellbeing, and legal rights of Plaintiff/Debtors. Plaintiff/Debtors therefore request an award of punitive damages pursuant to Civil Code section 3294 as against all Defendants.
8 98) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

FOURTH CAUSE OF ACTION: VIOLATION OF CALIFORNIA PREDATORY LENDING ACT
(Cal. Fin. Code §§ 4970 et sec.)


[As to ALL DEFENDANTS]

14 99) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
100) The Defendants made the consumer loan pursuant to the California Predatory Lending Law insofar as they arranged, negotiated or made the consumer loan. (Cal. Fin. Code §4970(b))
20 101) The Defendants violated the Predatory Lending Law. Said violations include, but are not limited to, the following violation of California Financial Code §4973 (c) A covered loan shall not contain a provision for negative amortization such that the payment schedule for regular monthly payments causes the principal balance to increase, unless the covered loan is a first mortgage and the person who originates the loan discloses to the consumer that the loan contains a negative amortization provision that may add principal to the balance of the loan.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 13
1
102) The Defendants, and each of them, failed to discloses to the consumer that the loan contains a negative amortization provision that may add principal to the balance of the loan and The Defendants, and each of them, acted in a manner that constitutes fraud. (Cal. Fin. Code §4973(2)(n)).
103) Plaintiff/Debtors alleges on information and belief that Defendants, and each of their, violations enumerated above were willful and knowing.
8 104) As a direct and proximate result of Defendants' violations of California's Predatory Lending Law, Plaintiff/Debtors has suffered actual and statutory damages in an amount to be proven at the time of trial.
105) Defendants' conduct was done with reckless disregard for the requirements of the law and for the safety, wellbeing, and legal rights of Plaintiff/Debtors. Plaintiff/Debtors therefore request an award of punitive damages pursuant to Civil Code section 3294 as against all Defendants. (Cal. Fin. Code §4978(b)(2)).
16 106) Defendants are jointly and severally liable for their violations of California's Predatory Lending Law pursuant to California Financial Code §4974(b).
19 107) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

/ / /
/ / /
/ / /
/ / /
/ / /

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 141 2 3 5 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 24 25 26 27 28

FIFTH CAUSE OF ACTION FRAUD, FRAUDULENT CONCEALMENT AND NEGLIGENT MISREPRESENTATION
[As to ALL DEFENDANTS]

4 108) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
6 109) Defendants and/or their agents made the following representations to Plaintiff/Debtors:
a. As to the 2008 loan:

      1. That a portion of Plaintiff/Debtors’ payment would be allocated to principle so that the debt would be repaid in August of 2036.
      2. That Defendants had been allocating a portion of Plaintiff/Debtors’ payments
      3. That the interest rate would be 5%
      4. b. As to the 2009 loan:
      5. That if Plaintiff/Debtors’ wished to avoid foreclosure they must sign the modification.
      6. That the arrearages accurately reflected the actual arrearages with respect to Plaintiff/Debtors’ loan.

22 110) Plaintiff/Debtors allege that at all times herein mentioned, representations made to Plaintiff/Debtors pertaining to their loan were false and fraudulent.
111) The representations made by Defendants were, in fact, false. When Defendants made these representations, they knew them to be false. These representations were made by Defendants with intent to defraud and deceive Plaintiff/Debtors and with intent to induce Plaintiff/Debtors to act in the manner herein alleged.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 15
1
112) Further, at the time Defendants made the promises to Plaintiff/Debtors, Defendants had no intention of truthfully or lawfully performing them.
3 113) Plaintiff/Debtors, at the time these representations were made by Defendants and at the time Plaintiff/Debtors took the actions herein stated, were ignorant of the falsity of Defendants’ representations and believed them to be true.
7 114) Plaintiff/Debtors, at the time promises were made and at the time they took the actions herein stated, were ignorant of Defendants’ secret intention not to perform and Plaintiff/Debtors could not, in the exercise of reasonable diligence, have discovered Defendants’ secret intention.
115) In reliance on these representations, Plaintiff/Debtors were induced to sign the mortgage modification contract and pay Defendants’ the upfront fees and costs.
14 116) Had Plaintiff/Debtors known the actual facts, Plaintiff/Debtors would not have completed the transaction.
16 117) Plaintiff/Debtors’ reliance on Defendants’ representations was further justified because Plaintiff/Debtors are unsophisticated borrowers, ignorant of the financial machinations and instruments being used to complete the transaction and were forced to reasonably rely on the advice and superior knowledge of the Defendants.
21 118) As a proximate result of Defendants’ fraud and deceit and the facts herein alleged, Plaintiff/Debtors were fraudulently induced to enter into a transaction that represented itself to be a fixed term loan, but in fact based on Defendants allocations, had Plaintiff/Debtors continued to make the payment for 30 years their loan would have stayed at the same balance.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 16
1
119) Plaintiff/Debtors were forced to take action in order to compel Defendants to live up to the agreed bargain and ended up requiring bankruptcy to protect their house. Therefore, by reason of Defendants’ fraud, Plaintiff/Debtors have suffered damages.
4 120) In doing the acts herein alleged, Defendants acted with oppression, fraud, and malice, and Plaintiff/Debtors is, therefore, entitled to compensatory and punitive damages in a sum to be determined at trial and such other and further legal and equitable relief as may be deemed just and proper.
9 121) Defendants made these representations for the purpose of enticing Plaintiff/Debtors to make the loan described herein. Plaintiff/Debtors reasonably relied upon these representations.
13 122) Defendants made the following false representations either negligently or intentionally to Plaintiff/Debtors:

    1. Defendants misrepresented the finance charges and annual percentage rate, as defined by applicable federal law that the Plaintiff/Debtors were paying for the loan.
    2. Defendants misrepresented prior to delivering the loan documents that the loan would have an interest rate of 5% percent, but actually gave Plaintiff/Debtors a loan of 7.25%, unbeknownst to Plaintiff/Debtors.

123) By intentionally misrepresenting the terms of Plaintiff/Debtors’ loan and misallocating the payments, Defendants violated California Business and Professions Code §17200 et seq, and their implied "covenant of good faith and fair dealing"
26 124) Based upon the representations of Defendants, Plaintiff/Debtors reposed their trust in the representations of Defendants. Such trust was reasonable. Plaintiff/Debtors
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 171 2 4 5 6 8 9 11 12 13 15 16 17 18 20 21 22 23 24 25 26 27 28
relied on Defendants’ professional statements that the loan would be repaid as stated on the documents.
3 125) Plaintiff/Debtors allege on information and belief that Defendants knew at the time they made these misrepresentations of material facts to Plaintiff/Debtors that were untrue.
7 126) Plaintiff/Debtors alleges on information and belief that Defendants, through their fraudulent scheme, intentionally and fraudulently charged Plaintiff/Debtors over $50,000 that would not have occurred had Defendants’ properly allocated the loan.
10 127) Plaintiff/Debtors allege that the loan was unconscionable in that the repayment terms were unfair and unduly oppressive, because the payments were never applied to the principle.
14 128) Defendants have alleged that Plaintiff/Debtors defaulted on their residential home loan, and that this default was not directly related to the structure of the loan and interest rate. However, Defendants prior fraud during the loan transaction has excused Plaintiff/Debtors from any performance.
19 129) Plaintiff/Debtors alleges that by virtue of their reasonable reliance and the increased interest they were made to pay, that they have been damaged in the loss of good credit and a higher payment and are now being involved in litigation, all to their damage and injury.
130) Plaintiff/Debtors has been made to suffer deep and severe emotional distress, mortification, anxiety, and humiliation all to their damage and injury in an amount which has not yet been fully ascertained, but in no event less than the jurisdictional limitations of this court.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 18
1
131) Defendants’ conduct as set forth above was intentional, oppressive, fraudulent, malicious, and/or in reckless disregard of Plaintiff/Debtors’ statutory rights, so as to justify an award of punitive damages in an amount sufficient that such conduct will not be repeated.
132) As a direct and proximate result of the misrepresentations of Defendants, Plaintiff/Debtors have been injured in an amount to be proven at trial and therefore Plaintiff/Debtors are entitled to recover such damages from Defendants, and each of them, individually and severally.
10 133) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

SIXTH CAUSE OF ACTION: DURESS
[AS TO ALL DEFENDANTS]

16 134) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
18 135) Defendants failed to accurately apply the payments that they were given by Plaintiff/Debtors.
21 136) When Plaintiff/Debtors complained Defendants asserted that they should be taking Debtor’s home and demanded that Plaintiff/Debtors sign a modification contract and return it in 24 hours or that Defendants would take we will take Plaintiff/Debtors’ home.
137) Defendants’ threat was illegal.
27 138) Defendants did not have the right to take Plaintiff/Debtors’ home after illegally misappropriating Plaintiff/Debtors’ payments.
OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 19
1
139) Plaintiff/Debtors’ signed and returned the modification contract in fear that the Defendants’ would take Plaintiff/Debtors’ home.
3 140) As a direct result of Defendants’ acts, Plaintiff/Debtors have incurred actual damages and injury in fact consisting of lost money and property.
141) By virtue of Defendants’ actions, Plaintiff/Debtors are entitled to recover punitive damages in an amount to deter such wrongful conduct in the future.
8 142) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

Quote 0 0
john

SIXTH CAUSE OF ACTION: DURESS

[AS TO ALL DEFENDANTS]

  1. 34) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.
  2. 35) Defendants failed to accurately apply the payments that they were given by Plaintiff/Debtors.
  3. 36) When Plaintiff/Debtors complained Defendants asserted that they should be taking Debtor’s home and demanded that Plaintiff/Debtors sign a modification contract and return it in 24 hours or that Defendants would take we will take Plaintiff/Debtors’ home.
  4. Defendants’ threat was illegal.
  5. 38) Defendants did not have the right to take Plaintiff/Debtors’ home after illegally misappropriating Plaintiff/Debtors’ payments.

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 19

1 139) Plaintiff/Debtors’ signed and returned the modification contract in fear that the Defendants’ would take Plaintiff/Debtors’ home.

3 140) As a direct result of Defendants’ acts, Plaintiff/Debtors have incurred actual damages and injury in fact consisting of lost money and property.

141) By virtue of Defendants’ actions, Plaintiff/Debtors are entitled to recover punitive damages in an amount to deter such wrongful conduct in the future.

8 142) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

SEVENTH CAUSE OF ACTION: EMOTIONAL DISTRESS

[AS TO ALL DEFENDANTS]

143) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.

16 144) Defendants failed to accurately apply the payments that they were given by Plaintiff/Debtors.

18 145) When Plaintiff/Debtors complained Defendants asserted that they should be taking Debtor’s home and demanded that Plaintiff/Debtors sign a modification contract and return it in 24 hours or that Defendants would take we will take Plaintiff/Debtors’ home.

23 146) Defendants’ threat was illegal.

24 147) Defendants did not have the right to take Plaintiff/Debtors’ home after illegally misappropriating Plaintiff/Debtors’ payments.

27 148) Plaintiff/Debtors’ signed and returned the modification contract in fear that the Defendants’ would take Plaintiff/Debtors’ home.

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 20

1 149) As a direct and proximate result of Defendants’ threats Plaintiff/Debtors now have suffered emotional and mental distress and pain and suffering, including apprehension, anxiety, fear, nervousness, trepidation, uneasiness, concern, worry, dread, tension, all of which have resulted in the disruption of Plaintiff/Debtors’ life and the peace and their mental tranquility.

7 150) Defendants’ actions exacerbated an already difficult situation and as a direct and proximate result of Defendant’s willful and wrongful conduct Plaintiff/Debtor suffered his heart attack in 2009.

10 151) Plaintiff/Debtors believe and assert that the heart attack was at least partially caused by Defendants’ wrongful actions.

13 152) Based on the threats by Defendants’ Plaintiff/Debtors were scared, humiliated and emotionally distraught.

15 153) As a direct result of Defendants’ acts, Plaintiff/Debtors have incurred actual damages and injury and have incurred monetary damages, including but not limited to attorneys’ fees and costs, necessitated by bringing this lawsuit, in an amount to be proven at trial.

20 154) By virtue of Defendants’ actions, Plaintiff/Debtors are entitled to recover punitive damages in an amount to deter such wrongful conduct in the future.

155) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

EIGHTH CAUSE OF ACTION FRAUDULENT AND DECEPTIVE BUSINESS PRACTICES VIOLATION OF BUSINESS AND PROFESSIONS CODE § 17200 Et Seq.

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 211 3 5 6 7 8 9 11 12 13 14 15 16 17 18 19 21 22 23 24 26 27 28

[AS TO ALL DEFENDANTS]

2 156) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.

4 157) Failure to provide accurate disclosures is an unfair and/or deceptive act and practice under California Business and Professions Code, §17200 et seq.; in addition, failure to provide materially accurate disclosure is unconscionable, fraudulent, and constitutes a sufficient basis for alleging undue influence, breach of fiduciary duty, negligence and/or malpractice.

10 158) Defendants violated § 17200, et seq., by engaging in deceptive and or unfair practices, including, but not limited to, the following:

    1. misrepresenting the expected terms of the loan transaction and failing to give accurate disclosures of the terms of the transaction before requiring Plaintiff/Debtors to sign the loan documents.
    2. Failing to accurately allocate payments
    3. Threatening foreclosure in order to induce Plaintiff/Debtors to sign the loan documents

20 159) As a direct result of Defendants’ acts, Plaintiff/Debtors have incurred actual damages and injury in fact consisting of lost money and property.

160) Plaintiff/Debtors incurred out of pocket monetary damages, and will continue to incur monetary damages.

25 161) Each of Defendants’ harassing acts was so willful, vexatious, outrageous, oppressive, and maliciously calculated enough, so as to warrant statutory penalties and punitive damages.

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 22

1 162) Each of the Defendants are individually and severally liable to the Plaintiff/Debtors for the following, which Plaintiff/Debtors demands as relief:

    1. Reduction of the principle and/or arrearages so that they accurately reflect the amount that should have been due and owing;
    2. returning any and all additional money paid by the Plaintiff/Debtors including all payments made in connection with the transaction; and
    3. actual damages in an amount to be determined at trial, including attorney’s fees.

9 163) As a proximate result of Defendants deceptive, unfair, and wrongful practices, Plaintiff/Debtors have incurred monetary damages, including but not limited to attorneys’ fees and costs, necessitated by bringing this lawsuit, in an amount to be proven at trial.

13 164) By virtue of Defendants’ unfair and deceptive business practices, Plaintiff/Debtors are entitled to recover punitive damages in an amount to deter such wrongful conduct in the future.

16 165) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

/ / /

NINTH CAUSE OF ACTION: VIOLATION OF THE FAIR CREDIT REPORTING ACT

[AS TO ALL DEFENDANTS]

25 166) Plaintiff/Debtors incorporate by reference each preceding paragraph as if it were fully set forth herein.

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 23

1 167) Defendants forced Plaintiff/Debtor wife to sign the loan modification and become liable on the debt.

3 168) Defendants negatively reported the debt to the credit bureaus.

4 169) Had Defendants not illegally forced Plaintiff/Debtor wife to sign the modification, her credit would not have been harmed.

7 170) Plaintiff/Debtor wife’s credit was harmed as a direct result of Defendants’ actions.

9 171) Defendants’ actions violated the Fair Credit Reporting Act by engaging in deceptive and or unfair practices, including, but not limited to, the following:

    1. Failure to provide accurate disclosures
    2. misrepresenting the expected terms of the loan transaction and failing to give accurate disclosures of the terms of the transaction before requiring Plaintiff/Debtors to sign the loan documents.
    3. Failing to accurately allocate payments
    4. Threatening foreclosure in order to induce Plaintiff/Debtors to sign the loan documents
    5. 20 172) Each of the Defendants are individually and severally liable to the Plaintiff/Debtors for the following, which Plaintiff/Debtors demands as relief:

    6. Reduction of the principle and/or arrearages so that they accurately reflect the amount that should have been due and owing;
    7. returning any and all additional money paid by the Plaintiff/Debtors including all payments made in connection with the transaction; and
    8. actual damages in an amount to be determined at trial, including attorney’s fees.

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 24

1 173) As a direct result of Defendants’ acts, Plaintiff/Debtors have incurred actual damages and injury in fact consisting of lost money and property.

3 174) Plaintiff/Debtors incurred out of pocket monetary damages, and will continue to incur monetary damages.

175) Each of Defendants’ harassing acts was so willful, vexatious, outrageous, oppressive, and maliciously calculated enough, so as to warrant statutory penalties and punitive damages.

9 176) As a proximate result of Defendants deceptive, unfair, and wrongful practices, Plaintiff/Debtors have incurred monetary damages, including but not limited to attorneys’ fees and costs, necessitated by bringing this lawsuit, in an amount to be proven at trial.

13 177) By virtue of Defendants’ unfair and deceptive business practices, Plaintiff/Debtors are entitled to recover punitive damages in an amount to deter such wrongful conduct in the future.

16 178) As a result of the foregoing, Plaintiff/Debtors are also entitled to costs of suit and attorney’s fees, plus other incidental and consequential damages in an amount to be proven at trial.

/ / /

/ / /

/ / /

/ / /

WHEREFORE, Plaintiff/Debtors having set forth their claims for relief against the Defendants respectfully pray of the Court as follows:

OBJECTION TO CLAIM AND COMPLAINT FOR DAMAGES 25OBJECTION TO CLAIM AND COMPLAINT FOR

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i wont condone breaking the law ...but ...hell its ok for the fraudclosure mills too break the law by fraud/perjury/unjust enrichment , and the other judges that ignore both justice & the law!?
 I applaud an attorney that will make a stand [for a change & NOT FOR HIMSELF] for what he believes is RIGHT & he IS and THEY [homeowners] are right. and the homeowners deserve that support .they were no more breaking the law then the judges & banks , 
DO NOT LEAVE YOU HOME PEROID , I've paid close to 1mill for my home in 20 yrs.& the vampires will NOT REMOVE ME!!!
FIGHT ON
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4JusticeNow
The damn hypocrites say... “That remedy is justified by the established misconduct of Michael T. Pines. He has shown complete disrespect for the law, the courts and especially the best interests of his clients. Removing Mr. Pines from active practice is an important step in our mission of public protection.”

Since, when have these courts shown anything but total contempt for the public, especially those who have been victimized and are unable to obtain so much as an once of justice. The same people who have been totally ignored by the corrupt courts, and the obviously bias media (Banksters propaganda machine) which is controlled by the same 2% who created and executed the largest fraud in American history.

In my opinion the vast majority of politicians, judges, etc are nothing but treasonous, self-serving hypocrites that along with the present day so-called judicial system deserves anything but respect. Just like the banksters and their political whores who sold out this country and it's citizens.

IMHO

4J
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