Blumenthal Puts Bankers, Lawyers On Notice

First Norberto Torres received an urgent message that’s become commonplace in the foreclosure crisis: He and his family had to leave their apartment ​“shortly.” Then he was told he had to move out ​“within” 90 days or pay damages. Finally he was offered $1,500 to leave. His lawyers say the tactics were illegal; Attorney General Dick Blumenthal is now tackling those issues statewide.

Blumenthal Monday put banks, lawyers and realtors on notice that they’d better not to deal with other tenants the way one lender dealt with Torres.

Torres (pictured) lives on Frank Street with his wife and three children. He may be the latest victim of an illegal practice perpetrated by realtors, banks, and lawyers.

Under a federal law — the Protecting Tenants At Foreclosure Act—passed last May, tenants have 90 days or until the end of their lease to leave their apartment in the event their landlord is foreclosed upon. The bank can offer them money to leave, a so-called ​“cash-for-keys” exchange. But it has to be at least $2,000.

Not everyone is following these requirements, and tenants are being illegally evicted across the state, according to Attorney General Richard Blumenthal. He announced on Monday that his office has sent cease-and-desist letters to 30 banks, realtors, and lawyers, ordering them to stop violating the law.

“We’re warning banks and real estate interests: foreclosure is not excuse for illegal eviction. These cease-and-desist letters send a message to powerful property owners that foreclosure gives them no right to engage in automatic eviction en masse,” Blumenthal said in a release on Monday. Read the release here.

He acted after receiving a report from legal aid lawyers in New Haven and other Connecticut cities documenting the spread of the illegal evictions.

BLumenthal sent one of his letters to U.S. Bank, the financial institution that foreclosed on Torres’ landlord’s apartment building in Oct. 2009. See the full recipient list here.

Lawyers at New Haven Legal Assistance say Torres is living through exactly the situation Blumenthal is working to prevent. Torres and his lawyers, explained the case on Monday at the legal aid offices on State Street.

Shortly after the October foreclosure, Torres received a letter from Press Cuozzo Realtors. At the top it reads, ​“VERY IMPORTANT !!!!!!!! THE BANK NOW OWNS THIS PROPERTY — YOU WILL BE REQUIRED TO VACATE THE PREMISES SHORTLY — THERE MIGHT BE MONEY TO HELP YOU MOVE OUT, BUT YOU WILL NEED TO CONTACT ME WITHIN 48 HOURS AT THE NUMBER LISTED BELOW.”

There are several problems with the letter, said legal aid attorney Amy Marx. The urgent tone of the all-caps message suggests tenants have to leave immediately, she said. Nowhere does it mention tenants have 90 days or until the completion of their lease to move out. (Click here to read about another New Haven case Marx pressed on behalf of tenants of a foreclosed building.)

Reached by phone on Monday, a representative of Press Cuozzo said he had been instructed by U.S. Bank not to talk to press.

Torres’ lease expired last year. He has been paying since then on a month to month lease.

On Nov. 10, Torres received another stress-inducing letter. This one, from Farmington attorney Tom Witherspoon, notified Torres and his family that they had three months to leave. It was written only partly in caps — and entirely in legalese. Nowhere does it inform Torres of his legal rights under the federal law.

It reads in part, ​“You must vacate and surrender possession of the Premises to U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE STRUCTURED ASSET INVESTMENT LOAN TRUST, 2006-BNC3 unless you provide acceptable evidence to the undersigned law firm that you are a bona fide tenant pursuant to Section 702(a)(2)(A) of the Federal ​“Protecting Tenants at Foreclosure Act of 2009.”

It’s not written as if ​“they care about the person understanding it,” Marx said. It’s written, she argued, like a credit card disclosure statement.

Not only is the form of the letter problematic, the content of it is wrong also, Marx said. The letter asks Torres to prove he is a tenant of the building. It’s obvious Witherspoon knows he and his family are tenants, she said. The letter was sent to them at the apartment by certified mail.

The letter uses the phrase ​“within ninety (90) days,” suggesting the Torres family may have less than the full 90 days they are allowed by law, Marx said. The letter further threatens that if the Torres family does not leave, the bank may seek ​“damages caused by your unlawful detention of the Premises.”

“Get out of here immediately or you’re going to be stuck with a big legal bill,” Marx translated. She said such a threat is illegal.

But Torres didn’t know that. Until Monday, when his lawyer explained his rights, he thought he could be evicted at any minute.

Fearing that he was about to be evicted, and in need of money for a deposit on a new apartment, Torres signed a cash-for-keys agreement with American Home Mortgage Servicing, Inc. on Jan. 15. He agreed to move out on Jan. 31 in exchange for $1,500.

That was another illegal action, according to his lawyers. The law states that tenants must receive at least $2,000 under a cash-for-keys agreement, said attorney Amy Eppler-Epstein.

Just days after he signed the agreement, Torres received yet another letter. This one was from legal aid, informing him of the federal law and advising him of his rights. That’s how he ended up in the offices of legal aid, with attorneys working on his case.

Eppler-Epstein said she has not yet been able to reach attorney Witherspoon. He could not be reached for comment on Monday.

Torres’ experience is a case-study of the problem the attorney general is trying to combat, she said. ​“This is exactly what Richard Blumenthal is issuing cease and desist orders on today,” she said.

Eppler-Epstein characterized the communications from the realtor and attorney Witherspoon as ​“intimidating and untruthful action.” What they’re doing is scaring people, she said. ​“It’s just wrong.”

Torres, speaking in Spanish, said the letters from the realtor and the lawyer frightened him. He said he signed the cash-for-keys agreement for fear that he and his family would be evicted and left with nothing.

Torres has been unemployed for several months. He said he was working for a construction company in Branford but got laid off. He’s hoping he’ll get rehired when the warmer weather comes. In the meantime he’s been looking for work and collecting unemployment, he said.

The 47-year-old is originally from Mexico. He’s lived in New Haven for 30 years and his three teenage children were born here.

He said he hopes to move into another apartment on Frank Street. But he needs the cash-for-keys money to pay for a security deposit.

U.S. Bank representatives could not be reached for comment.