PHILADELPHIA, June 14, 2011 — Shaffer & Gaier, LLC announced today that its client has agreed to a $30,000 cash settlement with Deutsche Bank in an action filed by the banking giant to foreclosure on a New Jersey investment property worth approximately $65,000.00. As part of the terms of the settlement, the homeowner is entitled to retain the property and collect rental income for an expected period of 15-18 months, free of mortgage payment obligations, after which time he will walk away from the underwater property. The bank has also agreed to issue a letter to correct credit to the defendant, which will be distributed to the three credit bureaus to repair any credit blemishes caused by the suit.

Deutsche Bank, the plaintiff in this case, was acting as the trustee on behalf of Morgan Stanley ABS Capital Inc., Trust 2006-NC5, Mortgage-Pass Through Certificates, Series 2006-NC5, the mortgage pool that claimed to own the defendants loan. While the bank was able to produce an assignment dated and recorded prior to the filing of the foreclosure complaint, one of the most commonly raised foreclosure defenses, defense counsel was able to challenge the bank on several other issues of standing, but ultimately it was the counterclaims of fraud and predatory lending that drove the settlement.

Although predatory lending and fraud claims are common allegations in the foreclosure defense arena, foreclosing banks are usually successful at overcoming the charges with a “holder in due course” defense, hiding behind a securitization process that serves as smoke and mirrors for the true parties to a mortgage transaction. Michael Gaier, partner at the Philadelphia-based law firm of Shaffer & Gaier, LLC, with the help of his partner Michael Shaffer, and a team of mortgage experts, paralegals and associates, has dedicated the last two years of his life to crafting a legal argument that has survived summary judgment motions, overcome protective orders to depose high-level banking executives and gained nine dismissals or settlements in the last 10 weeks alone. “I’m especially pleased with the outcome of this case,” said Mr. Gaier. “This was not the most compelling story of our cases. It was an investment property that was purchased with a limited down payment and has been earning income for the last two years. The issue is that my client never should have been approved for this loan in the first place. The lenders grossly inflated his income on the application, and then hid that from him, and disclosed a rate and payment vastly different from what he ended up with at the closing table and pressured him to close with the threat of forfeiting a deposit. Bottom line is fraud is fraud. I anticipate there will be many more settlements going forward.”