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Today’s Date

VIA CERTIFIED MAIL (RETURN RECEIPT REQUESTED)

Bank United Federal Savings Bank


P.O. Box 538613
Atlanta, GA 30353

Attn: Loss Mitigation Department

Re: Borrower(s): Lynette Ford Loan Account No.: 000494078-9

Social Security No.: XXX-XX-1340


Property Address: 14901 Arbor Springs Cr

Tampa, FL 33624

NOTICE OF COMPLAINT, PRIVILEGED SETTLEMENT COMMUNICATION AND


PRELIMINARY WRITTEN DEMAND FOR LOAN RESTRUCTURING

Dear Sir or Madam:

As your company is aware, Lynette Ford (the “borrower”) has retained Mitigation Law Group
(“MLG”), a Consumer Advocacy Firm, to represent her interests in connection with the above-
referenced residential property. Please be advised that this correspondence is intended as a
privileged and confidential “settlement communication” protected from disclosure in accordance
with Rule 408 of the Federal Rules of Evidence and analogous state laws regarding non-disclosure
of settlement communications.

Previously, MLG has sent your company a “Qualified Written Request” pursuant to the “Real Estate
Settlement Procedures Act” (“RESPA”), found at 12 U.S.C. 2605(e). The correspondence was
intended not only as a “Complaint, Dispute of Debt, and Validation of Debt Letter” under pertinent
provisions of RESPA and other applicable law, but also as a “Demand for Information” under the
Federal “Truth in Lending Act” (“TILA”)].

Even though there is additional time before a formal written response to the “Qualified Written
Request” is due, our clients have instructed us to make a preliminary written demand for
restructuring the subject loan – in view of issues pertaining to the alleged “assignment” of the
mortgage to its current servicer, and loan origination irregularities our auditors have already
uncovered. It is the hope of the borrowers that the subject loan can be restored to the status of
“performing” without the parties being forced to expend substantial time, money and resources.
AHMS Loan Services
April 2, 2009
Preliminary Demand for Loan Restructuring – Page 2

Please be advised that MLG has utilized the assistance of third-party professionals to research
various issues pertinent to our client’s mortgage, including the “Lendercrime” forensic auditing
firm. Additionally, we have been assisted by the “Platinum Data” Company in researching the
current market value and potential “disposition sale” parameters with respect to the property.

Up to this point, our client and forensic auditing professionals have had access to only a small
portion of the loan origination, closing and servicing documents typically needed for a thorough
analysis of potential mortgage fraud issues. Accordingly, it was our original intent to receive your
company’s response to our aforesaid “Qualified Written Request” (inclusive of the documents
demanded therein) prior to the delivery of this correspondence.

However, in recognition of mortgage assignment and loan origination problems clearly evident with
only a fraction of requested documents at our disposal, we hereby demand immediate modification
of our clients’ loan pursuant to terms detailed on page four (4) below.1 In support of this demand,
we submit the following preliminary findings:

(1) Predatory Lending Practices / Constructive Fraud: The borrower, Lynette Ford, applied
for the subject mortgage in connection with a residential home purchase. The loan for which she
ultimately was approved was a 30-year adjustable rate mortgage [monthly “Neg Am], with the
initial interest rate staying “fixed” for the first one month, and thereafter automatically adjusting
every month. The borrowers’ monthly payment was disclosed on their Adjustable Rate Note as
$491.73, and was not inclusive of property taxes and property insurance.

As your company is well aware, borrowers in loan programs as described above face extraordinary
exposure for financial disaster in view of rapidly declining property values; prepayment penalties
prohibiting the sale or refinance of a property; and the inability to afford the substantially larger,
amortized monthly payments that “kick in” at the end of the “negative” period.

In this particular case, our clients were placed with a product for which she was not an appropriate
candidate, and in which they undeniably were destined to fail. In view of the inherent instability of
a “Option ARM” mortgage, such a program clearly was not the best option for our clients, because
the true cost of monthly payments were never disclosed and after adjustments were beyond the
ability of the borrowers to honor their obligations. Simple quality control procedures and proper
loan program disclosures would have allowed the borrower to better understand the program given,
and also would have raised questions about her ability to afford the payments.

The borrower should have been rejected by the lender, but instead were steered toward an
undesirable exotic mortgage product due to overall risk. The actions of the lender and the agent for

1
the lender as described herein not only constitute “Predatory Lending Practices”, but also
“Constructive Fraud” because numerous material facts (such as the terms of the loan, prepayments
penalties, and other information that a borrower would want to know before accepting a loan) were
not disclosed to the borrowers in an obvious manner.

(3) Breach of Fiduciary Duty: The original lender in this case, Bank United, was contracted
to provide mortgage loan services and a program to Ms. Ford which was not only to be “best suited”
to her given her length of income and expenses, but by which she would also be able to satisfy her
obligations without risk of losing the home. Accordingly, Bank United had a fiduciary duty to the
borrowers, as well as implied obligations of good faith and fair dealing with respect to the
borrowers.

From our review of all pertinent facts and circumstances, it’s clear that Ms. Ford was fraudulently
induced into applying for a mortgage which was contrary to her stated intentions; contrary to her
best interests; and contrary to the preservation of her home. The borrower reasonably relied to their
detriment upon the representations, good faith estimates and the “duty” of the lender and mortgage
broker to act within their duties as fiduciaries of the borrowers in executing a loan that was vastly
different from the loan the borrowers were promised, or reasonably believed to be the case at the
loan closing.

(4) Truth in Lending Violations: Even in the absence of documents reflecting initial TILA
disclosure, APR calculations do not appear to be correct in view of available information. The
disclosed APR is not accurate because it is more than 1/8 of one point above or below the APR as
determined in accordance with the actuarial method (APR as “disclosed” was 9.3864% - actual APR
is 9.649%). Further, we believe Bank United failed to include and disclose certain charges in the
“finance charge” shown on the TIL statements, with such charges ultimately having been imposed
on the borrowers incident to the extension of credit. As a result of improper disclosure of finance
charges, Bank United FSB violated 15 U.S.C. Sec. 1601 et seq., and Regulation Z, Section
226.18(d).

The TILDS supplied to the borrower on the date of closing also reflects a schedule of payments that
indicate the monthly amount to be fixed for a period of one year at a time. This program type is
what was described to Ms. Ford on the day of closing yet the small print of the instruments indicate
a monthly adjustable.

As you are aware, TILA is a remedial statute, thus, consistent with its plain language, it must be
construed liberally in favor of consumers. Rossman v. Fleet Bank, 280 F.3d 384,390 (3d Cir.
2002). A lender must comply with the letter as well as the spirit of TILA. Handy, 464 F.3d at 764.
"'[A] misleading disclosure is as much a violation of TILA as a failure to disclose at all'" Barnes v.
Fleet Nat'l Bank, 370 F.3d 164, 174 (1st Cir. 2004)(quoting Smith v. Chapman, 614 F.2d 968, 977
(5th Cir.1980)). In this instance information concerning the number, amount and periods of
payments must be disclosed clearly and conspicuously. § 1632(a); 12 C.F.R. § 227.17.

(5) Appraisal Issues: It is our understanding that our clients had an appraisal completed for
purposes of their mortgage application; however, the actual written appraisal has not been available
for examination. The valuation of the property for purposes of our initial review is the value
expressed as the sales price (to-wit: $182,017) on the HUD-1 closing statement.
Our research and investigation on this issue is continuing, but it appears that at the behest and
direction of the lender, the property may have been appraised at a much higher amount than what
was warranted by good appraisal practices that conform to industry standards. We have reason to
believe that all parties at the loan closing – other than the borrowers – may have been aware of the
appraisal fraud and directly and intentionally withheld this information from the borrowers.

AHMS Loan Services


April 2, 2009
Preliminary Demand for Loan Restructuring – Page 5

PRELIMINARY LOAN RESTRUCTURING DEMAND

In view of the foregoing, we hereby submit the following proposal for loan restructure. The
purpose of the proposal is twofold:

(1) Keep the borrower – in the home with a modified mortgage that is reasonable and
affordable; and

(2) Keep the underlying asset of the holder intact and without the possibility of continued
erosion due to location, payment history, litigation, loan type and other risk factors.

Current / Unaffordable Structure

Current Loan Amount: $163,800 Sales Price at close: $ 182,017


Current Interest Rate: ARM Current Amortization: 40 yr
Loan Type: Purchase Adjustable Feature: Yes
Pre Payment Penalty: Yes Escrows Established: No

Restructure / Affordability

Modified Principal / Loan Amount: $ 100,000 Current Value: $75,000


Interest Rate: 4.0% Amortization: 50 yr
Loan Type: Modification Adjustable Feature: No
Principal & Interest: $ 385.71 Escrows Established: Yes
Pre Payment Penalty: No

It is widely known that the value of this asset along with its current risk factors are causing
enormous pressure on your institution and/or the holders reserve requirements. This restructure
achieves the two (2) stated goals listed above and is a win – win for both parties.

We will follow up with you within three (3) business days to discuss this restructuring demand, with
the intent of resolving all issues between our client and your company. We reiterate, however, that
for so long as issues between the parties remain unsettled, your company still has obligations to
produce documents and a good faith response to the demands in our previous “Qualified Written
Request”. Further, to the degree the “Qualified Written Request” was not clear, we demand the
following as a supplement to anything already requested and/or provided:

1) Provide the underwriting guidelines used to determine loan program affordability.


2) Provide the income documentation used for this transaction.
3) If determined that disclosures were not provided to the borrowers, properly refund all
broker/lender and 3rd party fees listed in the (800) fee section of the settlement statement
4) Provide the Lenders closing instructions to the settlement agent.
5) Provide the Loan Sale and/or Servicing Agreements for this transaction.
6) Provide a copy of the Broker/Lender Agreement.
7) Provide an executed copy of the mortgage and note.
8) Provide validity and proof of debt and the name of the original creditor.
9) Provide the final HUD-1 Settlement Statement(s) for this transaction.
10) Provide copies of all signed closing and disclosure documents in your possession, including
all residential loan applications signed by the borrowers for this transaction.
11) Provide the completed appraisal for the transactions noted herein.
12) Provide a copy of Borrowers’ Credit Report.
13) Provide proof of mailing for all disclosures on this transaction.
14) Provide copy of Lenders Private Mortgage Insurance Policy, if used for this transaction.
15) Provide copy of Credit Default Swaps (CDS) contract if used for this transaction.
16) Provide the Borrowers with a breakdown of all payments received to date from
Lender since the inception of this loan, detailing amounts applied to principal and/or interest.
17) Provide an accounting detailing all late fees, negative amortization and any/all costs
associated with this transaction.
18) Provide a complete detailed breakdown regarding escrows.
19) Provide a copy of all disbursements (to include all 3rd party invoices) at settlement.

I look forward to speaking with you, and if you have any further questions, please do not hesitate to
contact me.

Sincerely,

MLG

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