On Sutphin Blvd., in Jamaica, Queens in a small office across the street from and in the shadows of the Queens County Civil Supreme Court there is a law firm who fights for consumers against the big banks and the attorneys who represent them. Brian McCaffrey Attorney at Law, P.C. is a small firm with 3 attorneys and a full staff of legal assistants who work with lenders and their attorneys in the monumental task of helping homeowners to defend themselves in foreclosure and applying for loss mitigation in settlement conferences.
This week Ocwen Loan Servicing and their attorneys Hinshaw & Culbertson backed down at the last minute in the face of a motion for bad faith and sanctions filed by Law Office of Brian McCaffrey in Queens.
In an interview on Saturday June 14, 2014 attorney McCaffrey explained the case to me by saying ‘ Ocwen was represented by Marka Belinfanti of Hinshaw & Culbertson who took it upon herself to withhold the 1st loan modification payment because my client refused to sign an agreement to waive any future claims against Ocwen – where Ocwen was offering nothing in return for the waiver”.
McCaffrey’s office obtained a loan modification for their client Ramona Marrero as a result of the review of financial documents by Ocwen. After the terms of the modification were agreed upon, Marka Belinfanti an associate at Hinshaw & Culbertson sent a settlement agreement to McCaffrey and demanded that it be signed.
In an email a few days after the modification agreement and the payment were received by her, Belinfanti said “Please have your client review and sign asap as the modification cannot be finalized without an executed Settlement and Release”. When this demand was met with a stern rebuke by McCaffrey, Belinfanti sent an email raising so called title issues, but refused to provide a title report to substantiate her claims.
This demand by Belinfante started a war of words and emails and resulted in an Order to Show Cause for damages and sanctions against Ocwen and Hinshaw & Culbertson. McCaffrey said “In a world where attorneys are governed by professional rules of conduct and have an obligation to treat each other with civility, I truly hesitate to ask a court to sanction another firm, but in this case Ms. Belinfante gave us no choice”.
The Order to Show Cause accused associate attorney Marka Belinfante and the firm that employs her Hinshaw & Culbertson of Bad Faith for interjecting themselves into the middle of the case by withholding the check from their client Ocwen Loan Servicing.
The Order to Show cause also raised issues regarding bad faith under New York’s CPLR 3408 which has become known as the “Settlement Conference Statute”, by attempting to coerce the homeowner into an agreement waiving any future claims against the lender.
McCaffrey said that “many attorney’s not familiar with this area of the law aren’t aware of the fact that New York banking law prohibits a bank from demanding a waiver of future claims in return for a loan modification” and “In addition to that, the servicer in this case Ocwen, has a standing Consent Order that specifically prohibits them from demanding a waiver of claims.
McCaffrey’s Order to Show Cause stated “It is well settled that “a servicer shall not require a homeowner to waive legal claims and defenses as a condition of a loan modification, forbearance or repayment plan.” NYCRR § 419.11(h).” and that the Ocwen Consent Order provided - “Servicer shall not, in the ordinary course, require a borrower to waive or release claims and defenses as a condition of approval for a loan modification program or other loss mitigation relief….”
Apparently McCaffrey’s Order to Show cause hit home because the “title issues” disappeared on Friday June 13, 2014, one business day before the hearing on the Order to Show Cause, and in an email from Belinfante she said “please find attached the fully executed Loan Modification Agreement. Additionally, we received the second payment and have forwarded that to Ocwen as well. We would like to discontinue this matter promptly.”
In a conversation with McCaffrey he said “I have been told by homeowners struggling to make their payments that negotiating your way through a loan modification application with Ocwen is time consuming and takes an emotional toll on them and their families.”
In the case of Ocwen v Marrero if the homeowner didn’t have McCaffrey’s firm as her attorney, the case would have taken a very different turn.