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socrateaser
socrateaser, Lawyer
Category: Real Estate Law
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Experience:  Attorney and Real Estate broker -- Retired (mostly)
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When it was time to renew my totally used $550,000 personal

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When it was time to renew my totally used $550,000 personal home equity line of credit, the bank switched it to a business line of credit and paid off the old line with it rather than renewing it as a consumer home equity line of credit, because he could not get it approved by the residential division, in lue of my nearly zero income by then. The house is in my name and my wife's as well. We both signed the new home secured loan as a business line of credit, even though there was nothing left in it to use for anything.

I had another business loan from the bank exclusively in my name with the balance of nearly $500,000 on which I defaulted. The business was shut down two years ago. My wife had nothing to do with the second loan. And when I defaulted on the second loan, which I personally guaranteed the bank declared the loan secured by the house in default as well even though I was making the intrest payments as required and the bank proceeded with foreclosure on the house combining both loans.

In view of the fact that , None of the loan secured by my home was used for any business purpose. And as far as I know , in illinois a consumer loan can not be considered a business loan if it was not taken for an intended business uses nor was it used for business. I discover later that the bank did that in order expedite the foreclosure in the near future.

My attorney rebutlled claiming that the loan secured by my house was in fact a personal loan in view of the fact that the lender failed to give us certain documents as required by federal truth in lending act 15USC&1640. But my attorney never mentioned any violation of the state law in his rebutlle. The plaintiff attorney is now claiming that since this is a business loan such documents are not required. Please let me know:
1) What is the chance that my attorney rebutlle will succeed in court?
2) Am I right about my claim that the loan secured by my house could not be considered a business loan under illinois law, for reason mentioned above, despite the fact that my wife and I signed it as such?
3) If you agree with me on number two and If the judge is not presuded by my attorney rebutle, is it possible to use number two as an added argument or would it be too late to do so?
Submitted: 10 months ago.
Category: Real Estate Law
Expert:  socrateaser replied 10 months ago.
Hello,

You asked:

1) What is the chance that my attorney rebuttal will succeed in court?

A: You state that you and your wife signed for the new business loan despite it being secured by your home. This weighs heavily against you, because on its face you accepted the loan based upon its being for a business purpose. Conversely, the loan wasn't actually used for a business purpose, i.e., it was used to refinance a home loan. So, it could be argued that this was a sham by the bank to avoid its obligations under the Truth in Lending Act and Real Estate Settlement Procedures Act. But, by loaning money for the refinance of a residential property, the bank subjects itself to RESPA (12 U.S.C. 2602), and therefore the bank is also subject to provide a GFE -- Truth in Lending Disclosure (12 U.S.C. 2603). And, since the failure to disclose operates to impose civil liability under 15 U.S.C. 1640, therefore, your attorney's argument, assuming it follows what I describe above, should succeed.

2) Am I right about my claim that the loan secured by my house could not be considered a business loan under illinois law, for reason mentioned above, despite the fact that my wife and I signed it as such?

A: I don't think that it's necessary to implicate Illinois law in this scenario. Federal law is sufficient to make a case against the bank.

3) If you agree with me on number two and If the judge is not persuaded by my attorney rebuttal, is it possible to use number two as an added argument or would it be too late to do so?

A: As previously stated, I see no reason to argue #2, because #1 is sufficient.

Hope this helps.
Customer: replied 10 months ago.

My attorney is asking for a credit that is twice the interest changes for a penalty plus all attorney fees.


1) If we win what possibilities does this open for us?


2) Can my wife buy the house if she has the funds to do so, in order to keep the house if we win? Since she had nothing to do with my other business loan.


3) What other civil liabilities can be pursued and by whom , my wife or my self or both? If we win.

Expert:  socrateaser replied 10 months ago.
My attorney is asking for a credit that is twice the interest changes for a penalty plus all attorney fees.

1) If we win what possibilities does this open for us?


A: You seem to be asking what you can do with your winnings. That's not a legal question. You can do whatever you want with your money -- because it's your money.

2) Can my wife buy the house if she has the funds to do so, in order to keep the house if we win? Since she had nothing to do with my other business loan.

 

A: If your house was foreclosed, and the court does not void the foreclosure, then your spouse would be in the same position with respect to the house as would any other prospective buyer. She would have to try to buy the property from the bank. Maybe you can negotiate this as part of a settlement. If not, then you'll have to take your chances in the open market, because the bank will have no obligation to sell to you or your spouse.

 

3) What other civil liabilities can be pursued and by who , my wife or my self or both? If we win.

A: You only get one "bite at the apple" in court. You must plead all related causes of action in the same case, or you forever waive any that are not pleaded, under the doctrine of collateral estoppel. Thus, the answer here is that you will have no further recourse once the current case ends.

Hope this helps.
Customer: replied 10 months ago.

1) What I mean, if we win, does the bank have to start the foreclosure all over again, since his case was built out on the basis of default on a business loan rather that a personal loan, at least as far as the house secured loan was concerned?


2) If we win would not that mean that the bank can not foreclose based on his petition as it stands now, as a business loan default at least as far as the house secured loan is concerned?


 


 


Also, I really did not understand what you meant by the following answer?


You only get one "bite at the apple" in court. You must plead all related causes of action in the same case, or you forever waive any that are not pleaded, under the doctrine of collateral estoppel. Thus, the answer here is that you will have no further recourse once the current case ends.


 

Customer: replied 10 months ago.

Our house has not been foreclosed on as of yet. No ruling as of yet.

Customer: replied 10 months ago.

alsoI if we win, and since the house has not been foreclosed upon as of yet, can my wife simply buy my share and pay off the home secured loan?

Expert:  socrateaser replied 10 months ago.

1) What I mean, if we win, does the bank have to start the foreclosure all over again, since his case was built out on the basis of default on a business loan rather that a personal loan, at least as far as the house secured loan was concerned?

 

A: The answer depends on the pleadings of your attorney. The complaint contains a prayer for relief ("Wherefore, plaintiff prays for...."). If that prayer includes a request that the court set aside/void the transfer of title in the foreclosure sale, and the court agrees, then the bank would have to begin again. Otherwise, your remedy would only be money damages -- not title to the property.

 

2) If we win would not that mean that the bank can not foreclose based on his petition as it stands now, as a business loan default at least as far as the house secured loan is concerned?

 

A: Again, it depends on what your attorney has pleaded in the complaint as relief for your claim. You'll have to review the complaint, and see if your attorney has requested that the foreclosure sale be set aside/voided.

 

Also, I really did not understand what you meant by the following answer?
You only get one "bite at the apple" in court. You must plead all related causes of action in the same case, or you forever waive any that are not pleaded, under the doctrine of collateral estoppel. Thus, the answer here is that you will have no further recourse once the current case ends.

A: I'll try to explain by creating an example. Suppose that you are in a traffic accident. Your car is damaged in the amount of $10,000; you have $5,000 in medical costs; $1,000 in rental car costs; and $100,000 in pain and suffering.You sue the other driver and you plead everything except for the rental car cost.

You win your case, and then you realize that you forgot the rental car costs. You file a new lawsuit for the $1,000. The court will dismiss your lawsuit, because under the doctrine of collateral estoppel, a plaintiff must plead every cause of action related to a certain transaction or occurrence in court -- only once. After the court rules on the case, the plaintiff cannot relitigate the same issue again. The rental car costs are barred -- you will never recover them.

Your attorney knows how this works. He/she has pleaded everything that he/she thinks can be won. Even if something else exists, once your case is over, you cannot return to court and try to recover for something else related to this loan or the property foreclosure. It is forever barred under the doctrine of collateral estoppel.

Edits: You asked: Our house has not been foreclosed on as of yet. No ruling as of yet.

A: Then, the bank would have to start over, because the amount that you owe is not what was originally claimed in the default and foreclosure sale notice.

also if we win, and since the house has not been foreclosed upon as of yet, can my wife simply buy my share and pay off the home secured loan?

A: I don't know any reason why she could not do this. She would be buying it from you, though, since you state that the bank hasn't foreclosed, the property is still yours.

Hope this helps.
Customer: replied 10 months ago.

My attorney is also asking for the case to be dismissed based on his rebutlle that this is a personal loan. If we win and the case is dismissed as a result what can the bank do then?

Expert:  socrateaser replied 10 months ago.
If you mean that the bank is suing you and you are suing the bank, then a dismissal of the bank's case would mean that it would be barred from suing you again on the loan default -- and that would mean your ownership would be free and clear -- you would no longer owe anything.

I don't see the rationale for declaring the entire loan unenforceable against you. But apparently your lawyer does, so you'll have to ask your attorney for an explanation of that rationale.

Hope this helps.
Customer: replied 10 months ago.

In view of your first answer below, does that mean my attorney can up his request for financial damages to include emotional and mental anguish in his up coming rebutlle to the claim and instance


That it is a personal loan?


 


Conversely, the loan wasn't actually used for a business purpose, i.e., it was used to refinance a home loan. So, it could be argued that this was a sham by the bank to avoid its obligations under the Truth in Lending Act and Real Estate Settlement Procedures Act. But, by loaning money for the refinance of a residential property, the bank subjects itself to RESPA (12 U.S.C. 2602), and therefore the bank is also subject to provide a GFE -- Truth in Lending Disclosure (12 U.S.C. 2603). And, since the failure to disclose operates to impose civil liability under 15 U.S.C. 1640, therefore, your attorney's argument, assuming it follows what I describe above, should succeed

Expert:  socrateaser replied 10 months ago.
In view of your first answer below, does that mean my attorney can up his request for financial damages to include emotional and mental anguish in his up coming rebuttal to the claim and instance.

A: I would have to research of case law precedent to determine if any court has allowed such damages as part of this type of case. This exceeds the scope of your original question. If you want these factors investigated, you will have to open a new Q&A session.

Hope this helps.
socrateaser, Lawyer
Category: Real Estate Law
Satisfied Customers: 33559
Experience: Attorney and Real Estate broker -- Retired (mostly)
socrateaser and 13 other Real Estate Law Specialists are ready to help you
Customer: replied 10 months ago.

You have been a great help and I want to continues but How do I make sure I continue with you if I pay again?

Expert:  socrateaser replied 10 months ago.
Put my userid in the first sentence of your new question (e.g., "To socrateaser, only.").

The system will send me an alert, so that I can pick up the new question.

Hope this helps.
Customer: replied 10 months ago.

, "To socrateaser, only." I sent you earlier question, if it is possible for you to do case research precedent and if you can when and how will I get your result and if that would involve any additional cost?

Customer: replied 10 months ago.

In regards to my pending foreclosure case:


Yesterday I had told you that my attorney is also asking for the case to be dismissed based on his rebutlle that this is a personal loan. If we win and the case is dismissed as a result what can the bank do then?


 


And you replied with:


If you mean that the bank is suing you and you are suing the bank, then a dismissal of the bank's case would mean that it would be barred from suing you again on the loan default -- and that would mean your ownership would be free and clear -- you would no longer owe anything.

My follow up question,

Whether we win or loose, can the loosing party appeal the judge ruling?

Can the bank appeal the ruling if they loose? And yes, what would their next move is most likely to be in this case?

And if we loose, can we appeal, what what would this entail?

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