was successfully added to your cart.

Uncategorized

LM Funding Advocates for Community Associations

By February 17, 2016 No Comments

TAMPA – LM Funding regularly goes up against many of the country’s leading financial institutions. It’s a daunting challenge, but this company is winning these battles on behalf of its clients – struggling condominium and homeowners associations.

This Tampa-based specialty finance company offers unique funding solutions to community associations and in recent years has taken on several of the largest financial institutions and loan servicers as an advocate for these clients. The result has been financial gain for community associations which are realizing that LM Funding (NASDAQ: LMFA) (NASDAQ:LMFAW) can fight their battles with virtually no risk.

At the heart of these legal proceedings is Florida’s Safe Harbor Law, which stipulates that first mortgagees which foreclose on units only have to pay 12 months or 1 percent – whichever is less – of past due assessments to associations.

“The problem is that this law has been abused with loan servicers claiming Safe Harbor protection when they are not entitled to it,” said Bruce Rodgers CEO and Chairman of LM Funding. “As a result, associations are leaving significant amounts of money on the table by not challenging this.”

LM Funding recently secured an important ruling in the 4th District Court of Appeals (Palm Beach County) which could result in its association client receiving significant funds. Associations have access to a variety of programs that provide financial relief. LM Funding assumes the risk by retaining law firms to represent associations in these cases.

In this case – Meadows on the Green Condominium Association (appellant) vs. Nationstar Mortgage LLC (appellee) – the court overturned the trial verdict on January 6, reversing the original decision that Nationstar, the loan servicer, was entitled to Safe Harbor protection.

“We’re finding that there is virtually no case law,” said Jake Brainard, an associate with Business Law Group, which was retained by LM Funding on this case. “We are pretty much creating it and are having significant success through our legal advocacy work on behalf of associations. At some point, we decided that enough was enough and started appealing rulings that just weren’t right and having trial decisions overturned.”

According to Brainard, Meadows on the Green could be able to collect as much as $40,000 as opposed to the $6,000 that was provided through Safe Harbor.

“Our position is that only the owner of the loan is entitled to Safe Harbor protection,” said Rodgers. “In this case, the appellate court clearly understood that Nationstar was simply the loan servicer and, consequently, upon remand, Meadows on the Green will likely be entitled to a much larger share of the past due assessments.”

The next step is a new trial which will involve LM Funding and its legal team suing for the full amount of past due assessments, legal expenses, late fees and interest on behalf of Meadows on the Green, located in Boynton Beach.

“It’s important to understand that we’re not against Safe Harbor protection,” added Rodgers. “Safe Harbor exists to protect the owner of the loan. Lenders take the risk so they should have this protection. The law is in place to encourage lending and homeownership.

“Servicers like Nationstar are not taking the risk. So they shouldn’t benefit from Safe Harbor.”

LM Funding has had similar results in other jurisdictions throughout Florida, from Pensacola to Miami. It has won cases against Bank of America, U.S. Bank, and Citibank to name a few.

“Through these and future cases, we are building case law and setting precedent,” added Brainard. “The next big battle for associations is fighting servicers who try to claim that Safe Harbor applies to them, even though they never owned the loan or took an ounce of risk. We are the only ones fighting that fight. In the verdicts we choose to challenge, we’re finding that associations stand to gain significant financial relief.”

Rodgers urges associations to think long term by taking an activist position.

“Associations can’t keep rolling over and settling for much less than they’re entitled to,” he said. “Too many simply want to take the Safe Harbor settlements now rather than wait with the very real possibility that they will get significantly more if they can wait.

“With our many programs there is virtually no risk for the association since we cover legal expenses.”

About LM Funding America

LM Funding America, Inc. is a specialty finance company that provides funding to nonprofit community associations in Florida, Washington and Colorado. The company offers funding solutions to associations by purchasing a delinquent unpaid homeowner and condo owner assessments including the New Neighbor Guaranty™ program which is designed to guaranty future association budgets. The company was founded in 2008 and is based in Tampa, Florida. The company’s common shares and warrants trade on the NASDAQ Capital Market under the symbols “LMFA” and “LMFAW.”

 

Forward-Looking Statements

This press release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” and “project” and other similar words and expressions are intended to signify forward-looking statements.  Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the company’s filings with the SEC.  The occurrence of any of these risks and uncertainties could have a material adverse effect on the company’s business, financial condition, and results of operations.