News related to the Foreclosure Crisis

The biggest unpunished theft in human history

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Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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12/31/10 Dead Soul Is a Debt Collector  

Deceased Woman's Name Was Robo-Signed on Thousands of Affidavits 

Alternate site: Market Ticker

JESSICA SILVER-GREENBERG

WSJ

Martha Kunkle has come back to life. She died in 1995. Yet her signature later appeared on thousands of affidavits submitted by one of the nation's largest debt collectors, Portfolio Recovery Associates Inc., in lawsuits filed against borrowers.
12/30/10

Bank Of America’s Christmas present: Foreclose Even Though Not A Payment Missed

Yet another nightmare story has emerged involving a mistaken foreclosure. Bank of America reportedly put a Connecticut family's home in foreclosure despite the fact that the couple never missed a payment -- and was actually in the process of refinancing their mortgage with the bank.

Alternate site: Huff Post

CT WatchDog In one of the more bizarre foreclosure cases, Bank of America is threatening to throw a West Hartford family out of their home even though the couple never missed a mortgage payment. 

“I have never seen a case like this,” said Manchester attorney Wendell Davis, whose office handles many foreclosures.

Before taking the case, Davis said he thoroughly checked Baitch’s records and found that all his and his wife’s allegations were accurate.

“They have never even been late on a mortgage payment,” said Davis this morning in an interview.

12/30/10

Why Mortgage-Backed Securities Aren't (Backed by Securities):

 

 How MERS Toasted the Banks

 

It is likely that most or even all foreclosures occurring in the US are illegal seizures of property -- home thefts

 

We are talking about 100,000 completed home thefts per month, with another 250,000 new foreclosures started to steal homes every month. Projections are that 13 million homes will have been "foreclosed" (read: stolen) by 2012.

L. Randal Wray 

Huffington Post

MERS, a creation of the mortgage banking industry, has effectively destroyed the institution of private property in America.  Ironically, MERS was created to facilitate quick and easy and cheap securitization of mortgages -- what are called mortgage-backed securities.  In fact, what it did was to eliminate any backing of the securities by mortgages. Of the total securitized asset universe, something like $7 trillion are (supposedly) backed by residential mortgages. However, MERS helped to delink the securities from the mortgages.  At best, they are unsecured debt -- there is no property backing the securities. 

What this means is that foreclosure is not legally permitted.

12/30/10

How the mortgage clearinghouse MERS became a villain in the foreclosure mess

On March 4, 1994, the MBA unveiled its plan to county recorders who were charged with keeping track of titles signifying the ownership of land. Not everyone was sold on the idea.

Washington Post Critics say promises to increase transparency and iron out wrinkles in recordkeeping haven't panned out. The firm, which tracks more than 60 percent of the country's residential mortgages but whose parent company employs just 45 people in a Reston office building, is now on the firing line.
12/30/10

FORECLOSURES JUMP, MODIFICATIONS PLUMMET

Suzanne Kapner 

with comments by 

Neil Garfield

Cases that don’t settle are composed of at least one party that has determined they either have an incredibly strong position or that they have nothing to lose by shooting for the moon. In mortgage cases there is an actual disincentive to settle because (1) the lenders are not involved and (2) their “agents” are making money hand over fist by NOT settling. But the main reason is that the wrong parties are at the table. The agents lack both power and any incentive to settle. As a result BOTH the lenders (investors) and the borrowers (also investors under securities laws) are the ones to suffer.
12/30/10 Noncompliance with HAMP Guidelines as an Affirmative Foreclosure Defense?

Can a servicer's failure to comply with HAMP guidelines provide an affirmative defense to foreclosure? 

Law Professor 

Alan Levitin 

Credit Slips

The Indiana Court of Appeals held (citing a number of precedent rulings) that a compliance with servicing guidelines is a condition precedent to a foreclosure that can be raised as an affirmative defense. (Includes case)
5/6/09 "TAKE YOUR PROPERTY BACK FREE & CLEAR" California Chronicle So, you can move to stop the foreclosure, and fight for your home by acquiring a "Forensic Loan Audit" that will identify any possible lender fraud, or Federal violations of the Truth and Lending Act (TILA), or the Real Estate Settlement Procedures Act (RESPA). 

Expose the fraud, stop the foreclosure, and take your home back by fighting your foreclosure!

12/29/10 GOOD HANDS (ALLSTATE) SLAP COUNTRYWIDE (BOA) FOR $700 MILLION FRAUD CHAD HEMENWAY 

Property & Casualty Magazine 

with comments by 

Neil Garfield

Hence the conclusion that the trustees are not acting in the interests of the the investors because either there isn’t or never was any trust or because the real show isn’t being run by the trustees at all. The defendants in both the investor and the borrower lawsuits should be the the underwriters from Wall Street and the aggregators like Countrywide. Investors got the message. Now it’s time for the borrowers.
12/29/10

GOP Shifts on Fannie, Freddie Overhaul

Republicans Say Quickly Privatizing Mortgage Giants Would Squeeze Access to Home Loans and Depress Sales, Prices

Alan Zibel

WSJ

"Of all the dumb regulation that caused our economic crisis, none was dumber than that which created the (Fannie and Freddie) monopolies," Mr. Hensarling said in March.

Democrats tend to favor a more active role for the government in housing to ensure that underserved communities have access to mortgages.

12/28/10 2011 Will Bring More de Facto Decriminalization of Elite Financial Fraud

 

What has gone so catastrophically wrong with DOJ, and why has it continued so long? The fundamental flaw is that DOJ's senior leadership cannot conceive of elite bankers as criminals.

The longer that delinquencies and defaults can be delayed - the more the CEO can loot the bank.

William F. Black Our best bet is to continue to win the scholarly disputes and to continue to push media representatives to take fraud seriously. If the media demands for prosecution of the elite banking frauds expand there is a chance to create a bipartisan coalition in Congress and the administration supporting prosecutions. In the S&L debacle, Representative Annunzio was one of the leading opponents of reregulation and leading supporters of Charles Keating. After we brought several hundred successful prosecutions he began wearing a huge button: "Jail the S&L Crooks!"
12/28/10
Ohio Attorney General Cordray

 Re: Fraudulent Foreclosure Affidavit

Ohio Attorney General 

Richard Cordray

As I stated in my October 29 letter, “it is improper for the plaintiff to ask the court to ratify a foreclosure judgment based on a false affidavit after the fact by simply substituting or supplementing what plaintiff now claims is a proper affidavit.” Rather, I believe vacating the judgment is the proper way to handle these cases, as it removes a judgment based on a false affidavit and gives the homeowner an opportunity to contest a new motion for default or summary judgment. 
12/28/10

New California AG could sue banks on foreclosures

Reuters But while Brown scored an early settlement against banks as home foreclosures mushroomed in California, other states have been more aggressive of late. Borrower activists are hoping Harris will make the most populous U.S. state a more powerful ally against the banks.
12/28/10 Banks Found Guilty Of Foreclosure Fraud As a result of the recent investigation launched by the Florida Attorney General’s office, Bank Of America, JP Morgan Chase, and others, have all been found guilty of foreclosure fraud. stock markets review Depositions by the banks employees revealed that the banks have been forging, falsifying, and fabricating documents in order to foreclose on millions of homes owned by unsuspecting American homeowners.

These are essentially mortgages that the banks knew they did not own, but were willing to break the law in order to put homeowners out on the streets to satisfy their insatiable greed for even more money.

12/27/10 Where Things Stand: Foreclosure Paperwork Scandal Marian Wang

ProPublica

Iowa's Attorney General Tom Miller, the point man on a 50-state joint investigation of the foreclosure scandal and mortgage servicing industry, has said that a quick settlement with banks and loan servicers is unlikely and that settlements would be worked out "one bank at a time." He's also said that criminal charges are a possibility. "We will put people in jail," Miller told homeowners and advocates in Des Moines earlier this month. The states' joint investigation remains ongoing, and some states have separately sued banks for deceiving homeowners fighting foreclosure.
12/27/10 KC woman lives home foreclosure nightmare MICHAEL MANSUR 

Kansas City Star

Kansas Secured Title, which reviewed the deal for title insurance, declined to insure it because Willens had raised questions about whether the mortgage company was the legal holder of the note, said John Conaghan, the title company’s general counsel.
12/26/10

Novice Florida lawyers draw suspicion in foreclosure mess

Some may face Florida Bar investigations that could end their careers, while homeowner advocates wonder whether the foreclosure crisis would have reached its state of disorder if it weren't for legions of novice lawyers doing the legwork.

CHRISTINE STAPLETON

 KIMBERLY MILLER

 Palm Beach Post

And as the state's overwhelmed court system sorts through the foreclosure chaos, many of the attorneys who worked for the now deposed Stern law firm have been hired at other large companies doing foreclosure work.

12/26/10

No Mortgage with Bank of America? We Foreclosure Anyway!

Erin 

Africana Online

More and more people are suffering through a foreclosure process on a home that they never bought. False foreclosure complaints are on the rise. These are homeowners that paid their mortgage on time or have even paid off their loans. Now because of careless errors, they are in the midst of an impossible false foreclosure, one that is not so easy to resolve.
12/26/10 Financial institution fraud investigations increasing, says expert Jim Kouri 

Examiner

Tomko says that in these investigations, there is tremendous risk for decision makers at banks.  In bank fraud cases, there is often little or no controversy as to the acts and who performed them.  The key issue is usually whether the target individuals possessed criminal intent at the time.  Further, when criminal conduct is proven, the federal sentencing regime provides for lengthy prison sentences.
12/25/10 A Mortgage Nightmare's Happy Ending Gretchen Morgenson 

New York Times

This disaster has been accompanied by a still-unsettled debate about how best to stem the foreclosure crisis. When the federal government first stepped in to shore up the economy in 2008, it chose to buttress Wall Street and the banking system with hundreds of billions of dollars in taxpayer bailouts while largely leaving homeowners on their own.
12/24/10

Virginia puts homeowners on fast track to foreclosure

"There's no question that people are losing their homes when they should not be," said James W. "Jay" Speer, executive director of the Virginia Poverty Law Center

David S. Hilzenrath 

Washington Post

Since the meltdown in the housing market began more than three years ago, Maryland and the District have changed their foreclosure laws to give borrowers greater protection. Virginia has moved in the opposite direction.
12/24/10 Florida expands probe into alleged foreclosure misconduct by law firms KIMBERLY MILLER 

Palm Beach Post

The Florida Attorney General's Office has expanded its investigation of alleged foreclosure misconduct by law firms, adding companies to its initial list of four, according to an attorney for one of the original firms.
12/24/10 Bank Of America’s Christmas present: Foreclose Even Though Not A Payment Missed George Gombossy

ctwatchdog

In one of the more bizarre foreclosure cases, Bank of America is threatening to throw a West Hartford family out of their home even though the couple never missed a mortgage payment. The largest bank in the United States earlier this month notified Shock Baitch and his wife Lisa (Friedman) Baitch that foreclosure action will start today – Christmas eve – unless the couple agrees to put their home up for a forced sale.
12/23/10 Bank of America Loses Key Battle In Mortgage Fraud Fight

Several links to mortgage put-backs

John Carney 

CNBC

A New York court ruled yesterday that a bond insurer claiming Bank of America’s Countrywide unit fraudulently induced it to insure $21 billion of mortgage-backed securities can use statistical sampling to prove its case.
12/23/10 Rush to foreclose by  Fannie, Freddie helped feed problems with legal paperwork Zachary A. Goldfarb

 Ariana Eunjung Cha

 Washington Post

As the housing market came crashing down in 2008, the giant mortgage company Fannie Mae took an unprecedented step to help tackle the rising tide of foreclosures. It named an exclusive group of law firms that would help rapidly carry out the unsavory task of filing legal paperwork to remove homeowners from their homes.
12/23/10 The Home Foreclosure Chain of Fraud  Time to Audit the Real Estate Mortgage Investment Conduit (REMIC) Theft of one’s house today is certainly equivalent to theft of a horse 150 years ago. And, yet, we are not hanging the thieves who are stealing millions of homes from Americans. L. Randall Wray When we peel back the layers of the real estate “onion” what we find is layer after layer of fraud. From the mortgage brokers to the appraisers and lenders, from the securitizers to the ratings agencies and accountants, from the trustees to the servicers, and from MERS (Mortgage Electronic Registry System) through to the foreclosures, what we find is a massive criminal conspiracy—probably the worst in human history. I realize that is a harsh claim but I cannot find any other words that fit. In the old days, we used to hang horse thieves. The justification was that a man’s horse was necessary to his way of life, and in some cases, to his very survival. There can be little doubt that a home is equally important to maintenance of a middle class living standard today for most Americans. There is almost no calamity worse than loss of one’s home
12/22/10**

Deutsche Punished On Bogus Shelters

Deutsche Bank AG agreed Tuesday to pay $553.6 million and admitted criminal wrongdoing to settle a long-running probe over fraudulent tax shelters that allowed clients to avoid paying billions of dollars in U.S. taxes.

Chad Bray

WSJ

Under a nonprosecution agreement with the U.S. Attorney's office in Manhattan and the Internal Revenue Service, the German bank won't be prosecuted for its participation in about 15 tax shelters involving more than 2,100 customers between 1996 and 2002, including shelters marketed by accounting firm KPMG LLP and defunct law firm Jenkens & Gilchrist PC. Customers used the transactions to generate more than $29 billion in bogus tax benefits, mainly losses," according to the agreement.
12/22/10** Defense lawyers raise new issue: 'Robo-verifiers' Polyana da Costa

Daily Finance

The attorneys for homeowners claim that so-called robo-signers, who signed off on foreclosure paperwork en masse, have been replaced by "robo-verifiers" in the wake of the new Supreme Court rules
12/22/10** Bank Of America Accused Of Breaking Into Woman's Home, Taking Husband's Ashes The reports of banks improperly entering homes have been gathering in recent months.

A growing set of a Americans believe they have been mistakenly foreclosed upon.

Ryan McCarthy

Huffington Post

Bank of America is the subject of a federal racketeering lawsuit, one of many high profile lawsuits involving its foreclosure practices. Now, Bank of America has been accused of breaking into a woman's home and taking her possessions, including her late husband's ashes.
12/21/10 Fighting foreclosure and fraud, supporting criminal justice are Zoeller’s priorities kokomo perspective The Attorney General's Office serves in a dual role not only as the lawyer for state government but also as the state's consumer protection agency. Hoosiers can rest assured that my office is serving them by defending against unscrupulous companies and individuals who want to deprive them of their money and security," Zoeller said.
12/21/10 In a Sign of Foreclosure Flaws, Suits Claim Break-Ins by Banks  

According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand.

Andrew Martin 

New York Times

In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing. And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed.
12/20/10

UPDATE ON BAC LITIGATION … LOOKING GOOD

Living Lies So now we come to demonstrating that it is impossible for both Fannie and BAC to own the same note and mortgage at the same time. (BTW, this note was actually an original holding of BAC, not in trust.) And this brings us to NYUCC 3-603, that states that the obligation is satisfied or discharged if payment is made by a third party even if that party is a stranger to the transaction.
12/20/10 Six Mortgage lenders ordered to appear in NJ court David Porter

 AP

Six lenders who have combined to file nearly 30,000 foreclosure actions in New Jersey this year face the possible suspension of their operations next month under a court order announced Monday by state Supreme Court Chief Justice Stuart Rabner.

The action follows a report submitted to the Supreme Court that, citing depositions and court filings in other states, paints a picture of systemic abuses in the filing of foreclosures that include so-called "robo-signing," in which employees signed hundreds of documents without checking them for accuracy.

12/20/10**

Bank of America, Lenders Face Possible N.J. Foreclosure Freeze David Voreacos

 Bloomberg

Bank of America Corp., JPMorgan Chase & Co. and four other mortgage lenders and service providers face a possible suspension of foreclosures in New Jersey by Jan. 19, under a judge’s order.
12/20/10

PAYBACK TIME: $5.1 IN PUNITIVE DAMAGES AGAINST SERVICER ON A $79K CASE

LivingLies NEIL’S ANALYSIS: For those slow learners out there practicing law, this might get your attention. The compensatory damages were $79,000. Punitive damages: $5,100,000. If the lawyers were on contingency, they just made over $2 million.
12/20/10 Why New York Foreclosures Are Grinding to a Halt

Attorneys in the state told me that they expected foreclosure filings by the big banks to halt, or nearly so, for up to several months.

Abigail Field

Daily Finance

Murphy explains the purpose of that mini-resume is to make sure these employees understand what they're looking at and that any "person claiming he is the vice president of the bank is in fact a vice president of the bank." While that sounds silly -- why would someone sign a document with an inaccurate title -- the robo-signing scandal has exposed the practice of people signing as a vice president who have no link to the financial institution except for a resolution authorizing them to sign.
12/20/10 Officials in Iowa announce mortgage fraud group  

"Mortgage fraud is a very serious crime," said Weysan Dun, Special Agent in Charge of the FBI. "It is an attack on the economic system of the United States".

Mike Glover 

AP

Miller said much of the focus to date has been on civil enforcement of the mortgage industry, but that the new partnership will bring into play the potential of criminal charges.
12/20/10

Fannie, Freddie repurchase demands reveal fraud

3 of 4 mortgage fraud reports involve pre-2008 activity

Homes by Hyatt Demands by Fannie Mae and Freddie Mac that lenders repurchase loans made during the housing boom are driving an increase in reports of suspected mortgage fraud, although short-sale “flopping” and fraud associated with loan modifications appear to be a continuing problem on newer loans.

Includes Top 20 counties for mortgage fraud, but completely misses Dallas, Texas. 

12/20/10

Ernst & Young Said to Face Fraud Lawsuit Over Lehman AuditsErnst & Young LLP may be sued for fraud by New York Attorney General Andrew Cuomo for allegedly helping Lehman Brothers Holdings Inc. mislead investors.

Karen Freifeld 

Linda Sandle 

Bloomberg

Ernst & Young could be accused of “professional malpractice” for its role as auditor. Repo 105 transactions are a form of short-term financing that Valukas said Lehman used to move as much as $50 billion off its balance sheet temporarily to show investors it wasn’t carrying too much debt. The Repo 105 transactions were sale and repurchase agreements, so that Lehman was obligated to buy them back, swelling its leverage again.
12/19/10

THE POOLS ARE EMPTY AND THE SEC IS COMING

LivingLies The pools were empty, the mortgages invalid, the title chain is corrupted, the foreclosure sales were fraudulent, the declarations of default were fraudulent, and the homes — millions of them — are still legally owned by people who had given up the fight. 
12/19/10

JPMorgan Chase Fraudclosure Whistleblower Emerges

 

*Includes the Almonte whistleblower complaint

Tyler Durden

 Zero Hedge

 It is reasonable to expect that now that the first whistleblower has emerged from the crowd, many other former employees will soon follow, making the legal headache for JPM's general counsel only comparable to the fees about to be charged by the firm's outside counsel. Furthermore, should this case come to court, it will become a public spectacle that will likely make JPMorgan be perceived in the same utterly fraudulent light in which Brian Moynihan's bank is currently basking: the preliminary evidence, if proven to exist, is very damning.
12/18/10 Opening the Bag of Mortgage Tricks  

A servicer might, for example, deny a loan modification to a borrower because it also owns a second mortgage on the same property and doesn’t want to write down that asset, as required in a modification.

Gretchen Morgenson 

New York Times

“No one really knows what is in the black box known as loan servicing, and most investors don’t even think of their servicer taking advantage of them,” Mr. Bickel said in an interview. “There’s not a lot of transparency, and I think this case is going to bring to the forefront the potential for abuse.”

Borrower difficulties also open the door to improprieties.

In short, loan servicing is a perfect setup for administrators who want to take advantage of both borrowers and lenders.

12/18/10

DISMISSING CASES FOR FRAUD ON THE COURT…IT IS HAPPENING

 

5th DCA Fraud on The Court

Attorney Matt Weidner There is a growing awareness, a sickening realization out there that fraud is being committed in our courtrooms…just how pervasive the fraud is remains an open question….but I predict the real truth is not going to be pretty.  Some judges are taking the initiative and dismissing cases when they uncover the fraud.  So what kind of fraud rises to the level that a case should be dismissed?
12/17/10 Big Banks Get More Subpoenas in Mortgage Probe Money News The sources said the SEC is asking for information about the role of so-called master servicers — specialized firms that oversee the selection and maintenance of the large pool of home loans that go into every mortgage-backed bond. 

In many cases, Wall Street banks that underwrite mortgage-backed securities either own their own master servicing firms or are closely aligned with on
e.
 
12/17/10

Chase Hit With SEC Whistleblower Complaint Over Credit Card Practices Abigail Field

Daily Finance

The core allegations add context to her lawsuit, and they charge Chase with grotesque and illegal practices involving its credit card debt processes, including robo-signing.

Chase Bank sold to third party debt buyers hundreds of millions of dollars worth of credit card accounts. . .when in fact Chase Bank executives  knew  that many of those accounts had incorrect and overstated balances.

12/17/10 FORECLOSURES FROM HELL — WILD DEEDS

A WILD DEED is one which is executed and recorded after having been signed by or on behalf of a party who has no interest in the property or any transaction relating to the property, and whose name does not otherwise appear in the chain of title. 

Living Lies The mortgage or deed of trust is, under the laws of most states (actually all of them as far as I know) only an incident to the NOTE because it says in black and white that it is intended to create security for the “Lender” as stated on the note. But since the “lender” was never disclosed to the borrower at all, much less on the note or mortgage, and in fact was misrepresented in the closing documents, the execution of the mortgage or deed of trust was also procured by fraud in the execution and probably qualifies as a WILD DEED or, at the very least, to be treated as a WILD DEED.
12/17/10

Two States Sue Bank of America Over Mortgages

Bank of America’s callous disregard for providing timely, correct information to people in their time of need is truly egregious,” Catherine Cortez Masto, the attorney general of Nevada said in a statement.

ANDREW MARTIN 

MICHAEL POWELL

 New York Times

In withering complaints filed in state courts in both states, the attorneys general accused Bank of America of assuring customers that they would not be foreclosed upon while they were seeking loan modifications, only to proceed with foreclosures anyway; of falsely telling customers that they must be in default to obtain a modification; of promising that the modifications would be made permanent if they completed a trial period, only to renege on the deal; and of conjuring up bogus reasons for denying modifications. 
12/17/10 Oops! Bank of America Sends Loan-Mod Letter in Error to WSJ Reporter Nick Timiraos

 WSJ Blog

But there was one problem: the letter was addressed to the couple that sold the Brooklyn apartment in 1998. It arrived in the mailbox of a Wall Street Journal reporter who bought that apartment and has never had a mortgage on it. 

It’s no secret that banks’ paperwork problems have plagued the Obama administration’s Home Affordable Modification Program, or HAMP, and the letter offers a glimmer into potential miscues.

12/17/10

Arizona sues Bank of America over mortgage servicing

The state of Arizona has sued Bank of America, alleging that the bank has consistently misled consumers about its home loan modification process.

Reuters (Entire article) The lawsuit, filed on Friday by Arizona Attorney General Terry Goddard, accuses Bank of America of violating the state's consumer fraud act. The state also says Bank of America violated a consent judgment over its loan servicing, and is seeking a $25,000 penalty per violation, according to the lawsuit.
12/16/10

In Foreclosure Limbo

A Florida couple is caught in a tangle of paperwork as their mortgage makes the rounds of lenders, databases, and debt-service agencies

Devin Leonard

Bloomberg

Yet Matthew Weidner, the Hassells' lawyer, is still fighting the claim. "This is a microcosm of the financial crisis," he says. Meanwhile, the Hassells' debt is again on the move. In November, AHMS passed the debt to Residential Credit Solutions, a Texas operation that buys busted home loans. For now, the Hassells aren't budging. "We own this home," Ernie says. "Even if they say we don't.
12/16/10** Anatomy of Mortgage Fraud, Part III:   

MERS'S Role in Facilitating the Mother of All Frauds

L. Randall Wray 

Huffington Post

And MERS helped banksters to defraud securities holders. Banks not only separated the mortgages from the notes, but they even destroyed the notes as they entered the mortgages into MERS's electronic data base. MERS told servicers that it is "customary" practice to retain notes, not to endorse them over to REMIC trustees as required both by federal tax law and by the PSAs that govern the trusts. This made the securities a "nullity" -- as the Supreme Court ruled over a hundred years ago -- because a mortgage without a note is unenforceable in foreclosure. At best, the securities are unsecured debt, with no real property behind them.
12/16/10**

NY JUDGE DENIES 127 ROBO-SIGNED FORECLOSURES BY VARIOUS BANKS  PER ORDER FROM CHIEF JUDGE

Includes all 127 orders

4closurefraud The plaintiff bears the burden of proof in a summary judgment proceeding and judgment will only be awarded when all doubt is removed as to the existence of any triable issue of fact. Under the present circumstances, where there have been numerous instances alleged as to “robo” signing of documents and a failure to attest to the accuracy of documents in mortgage foreclosure proceedings, the plaintiff must prove its entitlement to foreclose on a mortgage as a matter of law by establishing the regularity and accuracy of the financial documentary evidence submitted and the Court will be scrutinizing all documents for accuracy.
12/16/10

Goldman Sachs pay out $111 million in Bonuses despite taking billions in Bailout money

Goldman Sachs bosses are to pick up $111 million in bonuses in an 'outrageous' pay deal that flies in the face of the worst recession for 80 years.

Daniel Bates 

Daily Mail UK

Goldman has already been bullish about it's bonuses and has set out $13billion to cover compensation and benefits this year alone, the equivalent of paying each of its 35,400 employees $370,706 each.

'The public will be outraged.'

12/15/10

Lien Stripping in Chapter 13 Bankruptcy Alive and Well in the 4th Circuit

Dan Press 

Virginia and D.C. Bankruptcy Attorney

This should come as a great relief to debtors in the 4th Circuit (Maryland, Virginia, West Virginia, and North and South Carolina) with homes with underwater mortgages.  It is now clear that the ability to strip off junior mortgages in Chapter 13 is secure in cases where the value of the property is less than the amount of the first mortgage.  The second mortgage is simply treated as unsecured debt in the Chapter 13 case, and upon completion of the plan it is removed from the ti
12/15/10

Bank of America in Settlement Talks Over Mortgages

DAN FITZPATRICK 

WSJ

Bank of America, after vowing to fight requests that it repurchase certain loans, has begun potential settlement discussions with some of its largest mortgage investors. 

The 17-member group now in talks with the nation's largest bank as measured by assets includes the Federal Reserve Bank of New York, government-owned mortgage company Freddie Mac, BlackRock and Allianz SE's, Pacific Investment Management Co., or Pimco.

12/15/10

U.S. Financial Crisis Panel Rift on Blaming `Wall Street' May Blunt Impact

(GET A BIGGER PANEL - THEY ARE LESS THAN 1/2 RIGHT!)

Phil Mattingly 

Robert Schmidt 

Bloomberg

The four Republicans on the 10-member panel today made their views public in a nine-page document, saying they place much of the blame for the 2008 crisis on the government and mortgage firms Fannie Mae and Freddie Mac rather than banks.
12/15/10

HEARING

Foreclosed Justice: Causes and Effects of the Foreclosure Crisis — Part II Committee on the Judiciary Written Testimony:
Statement of Senator Sheldon Whitehouse U.S. Senate D-RI

Attorney James A. Kowalski Jr. Law Offices of James A. Kowalski, Jr., PL Jacksonville, FL

Attorney Vanessa G. Fluker

Thomas A. Cox Retired lawyer and Volunteer Program Coordinator Main Attorneys Saving Homes Project
Portland, ME

Tom Deutsch Executive Director American Securitization Forum New York, NY

Sandra Hines Former Homeowner Detroit, MI

Christopher L. Peterson Associate Dean for Academic Affairs/Professor of Law S.J. Quinney College of Law University of Utah

12/15/10 MERS may skirt millions in property fees

Attorney general, others probe system created by lenders

Jenifer B. McKim

Boston Globe

O’Brien estimated that in Essex County alone, $10 million was lost over the past decade because MERS failed to pay a $75 fee each time a mortgage was transferred between lenders.

MERS created their own registry of deeds,’’ he said. “MERS have to record these assignments. The taxpayers deserve these fees.’’

Critics of MERS say that in addition to skirting fees, MERS has illegally foreclosed upon some homeowners and helped to obscure the identities of mortgage holders.

12/15/10 Banks Push Fed to Curb Borrowers' Right to Rescind Mortgages Carter Dougherty 

Bloomberg

Mortgage firms are pressing the Federal Reserve to curb homeowners’ right to invalidate loans based on flawed documents -- a right consumer groups say is one of the few weapons borrowers have to battle unfair lending.

Consumer groups and industry lawyers say a rule under consideration by the central bank would make it harder for borrowers to exercise their right of “rescission,” which forces a lender to relinquish a lien on a mortgaged property. 

12/14/10

Geithner Blocking Legal Help For Foreclosure Victims Zach Carter 

Huffington Post

Treasury Secretary Timothy Geithner has authorized big payouts to banks in an effort to encourage mortgage modifications, but is preventing borrowers in danger of losing their homes from accessing legal assistance under the Obama administration's foreclosure relief plan -- even when banks are wrongfully or fraudulently attempting evictions.
12/14/10 Foreclosure Investigator Meets With Distressed Homeowners

With no end in sight to the massive foreclosure scandal, furious homeowners are taking matters into their own hands.

Siddhartha Mahanta 

Mother Jones

"Foreclosures at the scale we are currently experiencing, and unfortunately will continue to experience for some time, are a public policy issue," 

According to a new report from the SEIU, restoring equity to underwater homeowners would cost $73 billion per year—approximately one-half this year’s bonus & compensation pool.

12/14/10**

 

"We Will Put People in Jail" - Iowa's AG Tom Miller during Tuesday's meeting.

 

Miller also agreed that principal reductions, loan modifications, and compensation for defrauded homeowners are necessary to clean up the mortgage mess created by the big banks.

showdowninamerica This is the first of a series of similar meetings with the state ttorneys General who are on the investigation’s executive committee. 

Participants in the meeting included borrowers who have lost their homes unjustly, other homeowners in danger of foreclosure, clergy and community advocates from 15 states – including Iowa, California, Illinois, Washington, New York, Colorado, Ohio, North Carolina, Florida, Missouri, Massachusetts, Kansas, Michigan, Montana and Oregon. The participants presented a stack of homeowner testimonies to Mr. Miller and made it clear that this investigation is their best hope for resetting the housing market and helping millions avoid foreclosure.

12/13/10** False Attorney Signatures Cast New Doubts on Foreclosures

Lawyers who are found to have authorized fake signatures could face sanctions, such as reprimands, or suspensions of license, said Dianne Coscarelli, a partner at the firm Thompson Hine and the vice-chair of the American Bar Association's Real Estate Finance Group.

Sasha Chavkin 

ProPublica

Many foreclosures have been thrown into question because of flawed documentation such as inaccurate affidavits describing a mortgage's history. But three recent court cases point to another type of flaw in foreclosure filings that could place thousands more cases in doubt: false attorney signatures n court documents.
12/13/10 Foreclosure affidavit do-overs face challenges, auction canceled

Also read comments

Kim Miller 

Palm Beach Post

Foreclosure defense attorneys have been watching this case to see how the judge would react to the claim that the affidavit submission was not fraud and considering that there are possibly thousands of such resubmissions occurring statewide.

It’s likely the banks’ attorneys trying to figure out the right legal way to file these things to move the foreclosure to the finish line as quickly as possible.

12/13/10

Government Files Lawsuit Against New York Sellers, Lenders and Appraisers Alleging Broad Consumer Mortgage Fraud Conspiracy United States Attorney
Southern District of New York
The United States has filed a civil fraud lawsuit against 14 defendants  – including sellers, lenders and appraisers - alleged to have engaged in an elaborate conspiracy to commit mortgage fraud in New York that caused at least 17 home buyers to default on their mortgages and face foreclosure.  The complaint also requests the court to bar what the government alleges to be an on-going mortgage fraud by a number of the defendants.
12/13/10**

Anatomy of Mortgage Fraud, Part II: The Mother of All Frauds  

No one can manufacture a note, claim to be a creditor, and then take a homeowner's property. (But they do and the courts allow it. MSF)

L. Randall Wray 

Huffington Post

But, in fact, the notes were never transferred, there is no clear chain of paperwork, and in many cases the notes have "disappeared" so that when the servicers or MERS tries to foreclose, they must file "lost note affidavits" claiming rightful ownership even though they do not have evidence. They have also been caught using "robo-signers" to forge documents -- and sometimes they have foreclosed on the wrong properties and even seized homes on which there was no mortgage. That is precisely why the law requires proper transfers of the note. Without that, the mortgage is a fraud and foreclosure is fraudulent.
12/13/10

Toxic CEO Pay Story

For a new generation of Angelo Mozilo wannabes, the sky is still the limit.

Sarah Anderson

Common Dreams

While any petty shoplifter or check-bouncer would have to face the prospect of jail time, Mozilo thus far has managed to escape criminal charges. He's free to spend his remaining ill-gotten loot any way and anywhere he pleases.

Countrywide's recklessness also continues to be a drag on federal agencies that purchased or guaranteed their trashy mortgages. Fannie Mae, Freddie Mac, and the Federal Reserve Bank of New York are among the investors who are demanding that Bank of America repurchase mortgage packages that were based on sloppy paperwork.

12/13/10**

Woman's Foreclosure Nightmare: 'Like A Black Hole'

But when she tries to explain that she was the victim of fraud, she says, "They don't want to hear it. They don't believe me. They don't want to hear it."

Chris Arnold

NPR

The banks say they do not seize people's houses without justification. But NPR has uncovered a case that might suggest otherwise. In fact, the homeowner in this case was actually the victim of a scam run by one of the Countrywide's very own employees. 

But despite that, Bank of America moved to foreclose anyway.

12/12/10

Removal of videos a dangerous ruling

St. Petersburg Times A Sarasota judge in a foreclosure action who ordered the removal of video depositions from YouTube is violating the First Amendment and preventing the public from seeing how alleged "robo-signers" churned out mortgage-related paperwork without verifying the information.
12/12/10

AG Miller says foreclosure investigation is broad-based 

"servicers have had three and a half years to get this right, and they haven't. "

Des Moines Register Q: There have been reports about your group requiring some kind of compensation fund. Is that an option?

A: That's an option - to
compensate homeowners who were foreclosed upon that shouldn't have been. And I think that's something that should be in a resolution.
12/12/10** Law Professor Katherine Porter says Financial Crisis is a wakeup call

We have a system in this country where people have to follow rules, big or small. And if a small consumer has to follow the rules, like if they don't pay their mortgage they get foreclosed on, then a big bank has to follow the rules when they take a person's house.

Des Moines Register One of the real black holes about this is that we don't know how bad or good the processes might be in states where foreclosures happen outside the judicial system.

We have a lot of families whose biggest contact with the legal system is going to be this foreclosure event. It's important that they feel like it was fair and honest. If they can't pay and they lose their house, that will be hard for them. But it shouldn't be an occasion to lose confidence in our justice system and system of laws and lawyers in country.

12/11/10** Not having a mortgage won't free you from foreclosure mess

"In virtually every case, I believe the homeowner was not in default when you looked at the surrounding facts. It is a widespread problem throughout the country."

Michelle Conlin 

AP

Homeowners in Florida, Nevada, Texas and Pennsylvania have filed lawsuits alleging that they were victims of mistaken foreclosure. In many of those cases, the bank went so far as to haul away belongings and change the locks on the wrong homes.
12/11/10 Batting Cleanup at Bank of America Nelson Schwartz  

NY Times

Bank of America is staggering under the weight of his predecessors’ decisions, and each day seems to bring more bad news. More than 1.3 million of the bank’s customers are behind on their home loans, all 50 state attorneys general are investigating the industry’s foreclosure practices and Bank of America has become a leading symbol of the mortgage mess.
12/11/10

Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals

Home Equity Theft Reporter This post is an attempt to organize the links for some of the posts appearing on this blog on criminal prosecutions of alleged sale leaseback, equity stripping scams by the various law enforcement authorities throughout the country, which I expect to update occasionally, as time permits.
12/11/10

Criminal Prosecutions Of Sale Leaseback Peddlers In Equity Stripping Foreclosure Rescue Deals Home Equity Theft Reporter This post is an attempt to organize the links for some of the posts appearing on this blog on criminal prosecutions of alleged sale leaseback, equity stripping scams by the various law enforcement authorities throughout the country
12/11/10 GMAC Can Sell Foreclosed Homes in Maine After Court Ruling David McLaughlin 

Bloomberg

The Maine case, filed in state court in October and moved to federal court by GMAC in November, involves five homeowners who are suing GMAC, claiming the company relied on defective court documents in seizing homes. The plaintiffs are seeking to represent Maine homeowners who are facing foreclosure by GMAC or who lost their homes in a GMAC foreclosure during the past six years and whose case relied on false documents, according to court documents.
12/10/10

Who is protecting the predatory lending victims from the predatory lawyers?

Rebecca Sharp

Examiner

It has finally come to the forefront that not only Homeowners who have fallen on bad times and could not pay their mortgage payments, but Homeowners paying on time without fail, are also being foreclosed upon.  It is these folks who can afford an attorney to fight this fraud, but only for so long.
12/10/10 Watching A House of Cards, Part 1 Jennifer Barry 

Market Oracle

JB: Wow. So why do you think that Bear Stearns spent that much money fighting over a property not worth nearly that much?

 

NL: They didn't own the note, they churned these properties, they double-pledged their notes sometimes. They had no right to the note, they had no right to foreclose, and they were cooking the books, all those things.

12/10/10 Home Prices Falling Fast, Eroding  American Wealth And Threatening Recovery  

Plunging home prices hammered household finances in the third quarter, eroding homeowners' wealth and making them more vulnerable to foreclosure

William Alden

Shahien Nasiripour 

Huffington Post

Millions of homeowners saw their most valuable asset decay between July and September, according to recently released data from the Federal Reserve, as they lost a portion of the stake they can claim in their homes. A series of new reports reflects home prices are continuing to decline, increasing the pressure on America's tepid housing market. Until the market finds a bottom, the foreclosure epidemic will feed upon itself, analysts say, as foreclosed properties drive home values down.
12/9/10** Anatomy of Mortgage Fraud: MERS's Smoking Gun, Part I

MERS planned from the get-go to defraud the counties, and the IRS, and the homeowners, and the buyers of the mortgage-backed securities.

Professor 

L. Randal Wray

The real mystery is why these trustees cannot produce the notes. I think we have finally found the smoking gun. An interested reader alerted me to MERS's instruction manual, "MERS Recommended Foreclosure Procedures -- State by State", originally written in 1999, updated in 2002 and available on MERS's website (accessed by clicking on: Recommended Foreclosure Procedures).

The first thing to note is the date. Folks, this strategy was formulated in 1999. The second thing to note is these documents demonstrate that failure to properly endorse the notes and transfer them to the REMIC trustee was not an occasional mistake, but rather was MERS's business model. 

11/22/10 Homeowners sue over alleged foreclosure fraud, seek state help

Homeowners allege the banks have not proven under Georgia law the banks' right to foreclose on their homes.

J. Scott Trubey 

The Atlanta Journal-Constitution

A Marietta couple locked in a federal lawsuit over their claims of wrongful foreclosure are asking the state to investigate allegations of fraud.

The couple along with a Columbus homeowner allege fraud and racketeering in a federal suit against nearly two dozen defendants, including Roswell-based real estate law firm McCalla Raymer and a metro area foreclosure document processor.

12/9/10 Wells FargoMortgage 'Modification' Called RICO Fraud Lisa Coston 

Courthouse News Service

A homeowner claims Wells Fargo instructed her to stop making her monthly mortgage payments to qualify for its loan modification program, then foreclosed after she followed the bank's instructions. The class action seeks damages for RICO fraud, in Cobb County Court.
12/9/10 Treasury Blocks Legal Aid for Homeowners Facing Foreclosure Katrina vanden Heuvel

The Nation

Some of those states, including Ohio, let Treasury Secretary Tim Geithner know as far back as this past spring that they wanted to use some of those funds to assist legal aid groups that help individual homeowners. Seems like a reasonable request--unlike the absurdity of handing over trillions of dollars to robo-signing, foreclosure-mad banks, no questions asked.
12/9/10 Wall Street Sees New Profits In Homeowner Distress The Huffington Post 

Investigative Fund

Barely more than a year after a taxpayer bailout of major financial institutions, Bank of America and the hedge fund, Fortress Investment Group, spotted a fresh money-making opportunity - collecting the tax debts of tens of thousands of people like Walker. The bank and hedge fund can add interest charges and fees, and they bundled the debts as securities for investors.

The anticipated return - estimated at between 7 to 10 percent - is possible because buyers of tax debts can assess a panoply of interest charges and other fees. When the debt goes unpaid long enough, the liens buyer can seize properties through foreclosure.

12/9/10 U.S. Home Values To Fall By 1.7 TRILLION This Year: Zillow Hui-yong Yu 

John Gittelsohn 

Bloomberg

This year’s estimated decline, more than the $1.05 trillion drop in 2009, brings the loss since the June 2006 home-price peak to $9 trillion, the Seattle-based company said today in a statement.
12/8/10** Homeowners Wrongfully Foreclosed Upon Go Through Legal Wringer    

Former employees at banks and foreclosure law firms have testified that they also knowingly pushed through foreclosures on the wrong people.

MICHELLE CONLIN 

Huffington Post

The minute Marconi ripped the foreclosure notice from the door of his house in Garrison, N.Y., on Oct. 20, he saw he was named as a defendant along with a woman who had run a red light and smashed into Marconi's car four years earlier.

 Marconi had received a payment from her insurance company. It was her house, in Rye, N.Y., that Wells Fargo was foreclosing on. 

Marconi explained the bizarre mix-up to Wells Fargo's customer service department, its ethics complaint department, its law firm and the office of the chief executive officer, John Stumpf. Marconi says they all told him that they could not help him and that he needed to get a lawyer.

12/8/10 Fannie, Freddie Pressed to Reduce Loan Balances on Mortgages 

A deal would deepen losses at Fannie Mae and Freddie Mac, which already have cost taxpayers about $134 billion.

NICK TIMIRAOS

 ALAN ZIBEL 

WSJ

Participation by Fannie Mae and Freddie Mac would put additional pressure on the nation's biggest banks to follow suit. Banks have shown little enthusiasm for the programs without the two mortgage giants.
12/8/10**

(Powerpoint)

Janet Tavakoli Explains How Banks Converted US Housing Into "Fraud As A Business Model"   Tyler Durden

 Zero Hedge

Securitization professionals at several financial institutions knowingly bundled fraud-riddled loans into RMBS. New investors needed to pay-off old investors. To delay being busted, they escalated and sped up the fraud.  This required more "complexity" and the involvement of more cronies.   

Many CDOs and virtually every CDO-Squared were more fraud to cover-up fraud.

12/7/10

BANK OF AMERICA ATTEMPTS ANOTHER THEFT OF AN AMERICAN HOME WITH PAID OFF MORTGAGE!

Includes complaint

4closurefraud.org This action seeks to determine that Defendants have no present right to foreclose on Plaintiffs’ home and to quiet title, remove encumbrances and obtain damages arising from Defendants’ wrongful efforts to collect a previously paid note and deed of trust covering Plaintiffs’ home,
12/7/10** Some Lenders Sell Foreclosed Homes Without Holding Title

A funny thing happened to DeBary resident Russ Vas Dais as he was about to buy a foreclosed home: He learned the bank selling him the house didn't actually own it.

Mary Shanklin 

Orlando Sentinel

Fannie Mae had foreclosed on the property but, in an apparent paperwork problem, never took ownership.


Christopher Hunt, senior attorney with the Orlando law firm
KEL, said the firm has beefed up its appeals staff and plans to start filing 20 foreclosure appeals a week. The firm In July persuaded the 5th District Court of Appeal to overturn state Circuit Judge William Law's foreclosure against Stephanie and John Crown of Lake County.  

 

Buyers of foreclosed properties could find themselves caught up in such litigation if the foreclosure is overturned in the courts, Hunt said.

12/6/10**

 

OUTRAGEOUS is right! 

You must read it to believe it.

Foreclosure Judge Rules Bank is NOT required to comply with the LAW.

4closurefraud.org This Order is a tacit admission that the Rules of Civil Procedure are not being followed in Foreclosure cases in the same manner as these same rules have been followed in other areas of the law or judicial divisions in the court system.  This is the travesty to which – www.4closureFraud.org – has dedicated itself to eliminate.

Great work Michael!

12/6/10**

Pennsylvania Case Shows More Problems for Lenders in Containing Foreclosure Fraud Damage

David Dayen

FDL

This would not only stop the foreclosure process for thousands of homes, but nullify existing actions where the homeowner was evicted. That could potentially cause a huge mess.

Adam Levitin adds that GMM had a very good reason to use non-lawyers on these cases. The cases themselves were faulty. “Every Pennsylvania foreclosure filing that I’ve looked at by Goldbeck, McCafferty, & McKeever appears to be facially defective because of a failure to include the note with the complaint,” he says. This violates Pennsylvania law.

12/6/10 Special report: Legal woes mount for a foreclosure kingpin

Fidelity National Financial, LPS's former parent, had bought DocX in 2005. The unit soon became a high-speed mill, churning out mortgage assignments -- many of which are now known to be of doubtful validity -- 

Scot J.Paltrow

Reuters

But a Reuters investigation shows that LPS's legal woes are more serious than he let on. Public records reveal that the company's LPS Default Solutions unit produced documents of dubious authenticity in far larger quantities than it has disclosed, and over a much longer timespan.
TRUSTS

ARE EMPTY

12/6/10**

Bank of America, the MBS unwind, and the other side of the coin

Levitin also asserted that these allegedly fraudulent securitizations could bring down the biggest banks, arguing that “there is not the capital in the financial system to pay for the rescission claims; the rescission claims would be in the trillions of dollars, making the major banking institutions in the United States … insolvent.”

Paul Jackson

Housing Wire

The newest fight in the mess that is now the U.S. foreclosure process is a real doozy. It's the idea that securitization trusts may not actually own their own mortgages, and therefore have no standing to foreclose.

A recent case involving Bank of America  in a New Jersey bankruptcy lit the most recent fire, after reporter Kate Berry at American Banker first reported on a ruling in the case on Nov. 22.

12/6/10**

LENDER PROCESSING SERVICES Produced More Bogus Foreclosure Documents Than It ‘Fessed' To

Yves Smith

nakedcapitalism

Housing Wire’s Paul Jackson attacked critics of LPS, including this blogger, of going off half-baked in accusing the company of engaging in document fabrication. A Reuters investigation published today supports the critic’s case, revealing that document creation was far more extensive that the company has suggested.
12/6/10

Press Release

Financial Fraud Enforcement Task Force Announces Results of Largest-Ever Nationwide Operation Targeting Investment Fraud... not Mortgage Fraud

(Homeowners are investors too!)

Department of Justice “Fraud by well-known companies or high-profile executives gets the biggest headlines, but other scams are equally devastating to hard working families and retirees,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Victims want justice and don’t much care who the fraudster is or how unique the fraud. Today’s actions underscore that law enforcement agrees and will pursue fraud in whatever form.

(Fraud by well-known companies or high-profile executives gets bigger headlines because it involves more money, affects everyone (including investors) and is devastating entire  communities. MSF)

12/6/10 Reuters investigation shows LPS's legal woes are more serious than what investors were told

The lawsuit also charges that LPS illegally practices law and routinely misleads homeowners and federal bankruptcy judges

Reuters The criminal investigation in Jacksonville by federal prosecutors and the Federal Bureau of Investigation is intensifying. The same goes for a separate inquiry by the Florida attorney general's office. Individuals with direct knowledge of the federal inquiry said that prosecutors have impaneled a grand jury, begun calling witnesses and subpoenaed records from LPS.
12/6/10 Bank of America Promises to Meet Bailout Requirement, But Challenges Remain William Alden 

Huffington Post

Bank of America, mired in scandal and facing potential losses over its alleged mishandling of mortgages, now says it will be able to fully leave its taxpayer bailout behind. Whether the nation will soon escape its own bad experiences with Bank of America -- not least, a spate of allegedly unfair and improper foreclosures -- remains an open question.
12/5/10

Foreclosure fees has local judge steaming mad Alan Cohn

abc Action  News

Five local lawyers have their own date in court later this month.

A Pasco County judge is demanding to know why, in many cases, law firms are serving families who are being foreclosed on over and over again with the same paperwork.

12/5/10

Jamie Dimon Profile Misses The Point:

Trusting Bankers Is Too Stupid To Try Again

Peter S. Goodman

Huffington Post

The recent meltdown laid bare the sharp divergence between the interests of Wall Street and those of everyone else. Ordinary people need a stable, transparent banking system that allows businesses to borrow and households to finance the purchase of homes, cars and education. But the chiefs running banks can cash in spectacularly as individuals even as they lead the rest of us off a cliff.
12/5/10

No, The Big Banks Have Not "Paid Back" Government Bailouts and Subsidies  

The big banks claim that they have paid back all of the bailout money they received, and that the taxpayers have actually made money on the bailouts.

Washington's Blog Mortgages and Housing  

PhD economists John Hussman and Dean Baker (and fund manager and financial writer Barry Ritholtz) say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks. Many also accuse Obama's foreclosure relief programs as being backdoor bailouts for the banks. (See this, this and this).

The fact that the giant banks are "too big to fail" encourages them to take huge, risky gambles that they would not otherwise take. If they win, they make big bucks. If they lose, they know the government taxpayer will just bail them out. 

This is a gambling subsidy.

12/3/10

Former manager for Ocwen Loan Servicing faces fraud charge 

Faces up to 20 years in prison and a $250,000 fine

South Florida Business Journal Graves was a residential sales manager at Ocwen Loan Servicing, which managed foreclosure properties under contract with the VA.

(He should have limited his crimes to the frauds of Ocwen since they appear to have immunity from wire fraud prosecution. MSF)

12/3/10 Woman Nearly Loses Hoe Over Bank Error  

What bank?  Bank of America... again.

Joe Nocera

NY Times

Was life any better with the mighty Bank of America now servicing her mortgage? Not a chance. Bank of America took her money in May and June. But in July and again in August, a bank employee told her not to send a payment because the bank was close to offering her a new repayment plan. Instead, in late August, the bank foreclosed and turned the property over to Fannie Mae.
12/3/10

Fulton Class Action Challenges Foreclosures involving MERS

Up until a few years ago, people used to be able to go down to the county and trace the title of a property, but today it is nearly impossible to trace the title because of MERS.

SHERYL ROSENBLUM

MATTHEW CARDINALE 

Political Affairs

MERS shareholders, board of directors, and members are some of the very entities that received bailouts, and contributed to the current US economic crisis.  

Many of these same companies made billions by packaging risky mortgages, giving them AAA ratings, selling them for a profit, and then betting that the loans would default. 

The
MERS system was created to avoid recording fees, while they transferred these loans over and over, causing the current economic crisis.
  
12/3/10

Important Commentary on Changes to UCC and Impact on Foreclosures– Ignored by Almost Everyone.

Attorney Matt Weidner But while filing is useful to a creditor who takes a security interest in a note, it does not provide the creditor with the full protection it might wish. The creditor remains subject to the risk that, if its debtor retains possession of the promissory note in question, the debtor will “double pledge” it, giving a second security interest to another creditor, and this time transferring possession of the notes to the new creditor.
12/3/10

FORECLOSURE FRAUD BOMBSHELL :

THOUSANDS OF PENNSYLVANIA FORECLOSURES COULD BE VOID

 

 

4closurefraud.org As long as a lawyer supervises foreclosure filings, and at least reads them before they’re submitted to the court, that is acceptable. But Loughren is suing because all three named partners of GMM, have admitted under oath — during depositions last September and in a separate case in December 2009 — that no attorney ever read the filings. The partners made clear that the practice has gone on for the past several years.
12/2/10

Real Issues in Foreclosure Fraud Laid Out at 

House Judiciary Hearing

Mortgage lenders and their servicers, by flooding courts with falsified foreclosure documents, have created chaos in the judicial system, housing lawyers told lawmakers.

David Dayen

FDL

Julie Williams, the chief counsel of the Office of the Comptroller of the Currency (OCC), said in the hearing that banks could face “civil money penalties, removals from banking and criminal referrals, if warranted” from the documentation problems.
12/2/10

CRAZY!  Bank of ScAmerica Modifies Mortgage and then Forecloses 12 News Bank of America's response? "Ma'am, we are so sorry, we sold your home by mistake".  (Or was the mistake that they got caught? MSF)
12/2/10

and AGAIN!...

Chicago family refuses to leave home after foreclosure fraud

Hadn't missed a payment since their loan modification was granted. What they hadn't realized was that the bank had already started the foreclosure process.

Megan Cottrell 

Chicago Now

Today, the Tellez family is standing up, with help from the Chicago Anti-Eviction Campaign, and saying they won't go, even if the sheriff comes to evict them, because they were victims of the sub-prime loan craze and foreclosure fraud.
12/2/10

Fed Trying to Make It Harder for Homeowners to Fight Mortgage Fraud by Gutting Truth In Lending Laws

 

 

 

You can submit a comment opposing the Fed's proposed change to the Truth In Lending Act by clicking here.

Zero Hedge

After Alan Greenspan changed his mind and admitted that financial players commit fraud unless  laws are enforced (see this and this), many hoped that the Fed would start cracking down on fraud a little bit.

Unfortunately, the Bernanke Fed is continuing to try to sweep fraud under the rug. As just one example, the Fed has been consistently trying to downplay the significance of mortgage fraud, claiming it's not widespread and that nothing much really has to be done about it.

Now, the Fed is proposing a change to the Truth in Lending laws which would make it harder for homeowners to fight mortgage fraud.

Action Alert

12/2/10 Wall Street Banks In Talks To Settle SEC Lawsuit Over CDOs Ryan Grim 

Huffington Post

The SEC is looking at banks such as Citigroup, JPMorgan Chase and Morgan Stanley, to determine whether they knew crucial information that they didn't tell investors, when they sold complicated mortgage-based securities. But those banks and their regulators have begun talks that could lead to out-of-court settlements, agreements that would relieve the banks of an enormous legal headache, the Wall Street Journal reports.
12/2/10** American Securitization Forum Tells Monstrous Whoppers in Senate Testimony on Mortgage Mess

 

 

 

 

 

 

 

Affidavit of Thomas Adams for US Bank v. Congress

Affidavit of Professor Ira Bloom for US Bank v. Congress

Yves Smith

nakedcapitalism

The problem is that the pooling and servicing agreements, which governs the formation and operation of securitization trusts, have very specific provisions for how the notes were to be conveyed to the trust. The notes were to be conveyed through multiple entities, which each transfer being a “true sale” before getting to the trust (this was to create “bankruptcy remoteness” so that if the originator failed, its creditors would not be able to take notes back from the trust to satisfy their debts).

A mere week after the ASF launched its pot-holed battleship, news broke of Kemp v. Countrywide, in which a seasoned Bank of America employee testified that it was not the practice of Countrywide to transfer the notes to the trustee, but to retain them until the trustee needed them to foreclose. Whoops! Suddenly the ASF’s white paper argument looks irrelevant.

Affidavits
12/2/10**

Congressional hearing: Do banks lack the legal standing to foreclose?

A state judge, law professor and consumer attorneys are testifying before Congress that in many cases the banks trying to foreclose on borrowers do not have the legal standing to do so.

Washington Post Cox refuted claims by banks that they are foreclosing only on borrowers who are hopelessly behind in their payments.

"I hear and see reports of wrongful foreclosure actions on virtually a daily basis," Cox said in his written testimony.

12/2/10

A Real Jaw Dropper at the Federal Reserve

Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks -- Deutsche Bank and Credit Suisse -- which were the largest beneficiaries of the Fed's purchase of mortgage-backed securities.

Also see:

Fed Lifts Veil of Secrecy

"Almost two years ago I asked Chairman Bernanke to tell the American people which financial institutions and corporations received trillions of dollars as part of the Wall Street bailout. He refused. Today, as a result of an audit-the-Fed provision I put into the financial reform bill, we finally learn the truth - and it is astounding."
— Sen. Bernie Sanders (I-Vt.), author of Fed disclosure provision

Senator Bernie Saunders

In addition to stealing homes & equity from millions of homeowners...

 

We have learned that the 

"$700 billion Wall Street bailout"

signed into law by President George W. Bush turned out to be pocket change compared to the trillions and trillions of dollars in near-zero interest loans and other financial arrangements the Federal Reserve doled out to every major financial institution in this country. Among those are:

 

Goldman Sachs, received nearly $600 billion; Morgan Stanley, received nearly $2 trillion; Citigroup, received $1.8 trillion;   

Bear Stearns, received nearly $1 trillion;   

Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed.

12/2/10

Lapses in Foreclosure Documents Said to Cause `Chaos' in Courts

There is a persistent refusal in the servicing industry to be honest about its conduct,” Cox said

 

Lorraine Woellert  

Bloomberg

“As we allow the mortgage loan industry to circumvent the rule of law, we show that corporate interests can get away with such massive dishonesty,” said Thomas A. Cox, a foreclosure- defense lawyer. “We thereby encourage more of it.”

Mortgage lenders and their servicers, by flooding courts with falsified foreclosure documents, have created chaos in the judicial system, housing lawyers told lawmakers. 

Action

Alert

Fed wants to strip a key protection for homeowners

Letter to Federal Reserve opposing the rescission proposal

Federal Register notice explaining its proposed changes on rescission (begins on pg. 58541)

To submit a comment to the Federal Reserve

Tony Pugh

McClatchy Newspapers

As Americans continue to lose their homes in record numbers, the Federal Reserve is considering making it much harder for homeowners to stop foreclosures and escape predatory home loans with onerous terms.
12/1/10
12/1/10

AG Olens wants authority to launch criminal investigations of improper foreclosures.

The Bankers Criminals say involving the courts in foreclosure cases is unnecessary and would slow the process.

J. Scott Trubey 

Atlanta Journal-Constitution

The attorney general has the power to prosecute mortgage fraud, but apparently not foreclosure fraud. Olens said he wants to change that, and he also said he might ask the State Bar of Georgia, which licenses lawyers, to look into allegations of misconduct by real estate attorneys in the mortgage origination as well as foreclosure process.
12/1/10 Are The Banks Insolvent? Fair Question, Given This Chart Karl Denniger  

Market Ticker

There's a problem of course - BAC never reported that sort of loss any time during this "crisis."  That leaves me with the question as to where these so-called "assets" are now, what they're marked at, and whether we're still dealing with massive and outrageously bogus "marks" - that is, claims of value - in these securities!
12/1/10

Deposition

BANK OF AMERICA DEPOSITION RENE HERTZLER- I SIGN DOCUMENTS BUT DON’T READ THEM  

 Renee-Hertzler-deposition Countrywide_08_11 09DiMartini

Attorney Matt Weidner Blog

You mad yet?  Why don't we just turn over all the homes in America to the banks?  

Why don't we all just  dispense with the charade of courts or legal process and turn it all over to the banks... WAIT, WE ALREADY HAVE.

12/1/10

Bankers Win: No Capitol Hill Action on Mortgage Foreclosure Protection for Two Years

Marcy Kaptur's bill would require lenders to show they have title to a loan before they can foreclose -- a requirement which is supposed to already be part of every foreclosure claim.

Peter G. Miller  

Huffington Post

Stashed away in a draw somewhere on Capitol Hill is a simple piece of legislation that would have done much to stop the mortgage mess, robo-signing, unfair foreclosures, and the growing claims against lenders. But Congress has not touched the Produce the Note Act since it was first introduced in February 2009 -- nearly two years ago.  Now, with this session of Congress drawing to an end, the chance of a hearing, consideration or a vote has dropped to just about ZERO.
  Subprime Shakeout  

Lenders that Have Closed Shop, Been Acquired, or Stopped Loans

Here's a table of the damage so far.

Compiled by 

Worth Civils 

Mark Gongloff

More than 80 mostly subprime mortgage lenders -- those that make home loans to the riskiest borrowers with questionable credit -- have closed shop since the end of last year as clients defaulted on payments and banks cut off the funding required to make the loans. The trend accelerated early this year, and by the spring it seemed companies both large and small were stopping new loan activity, closing shop, declaring bankruptcy or being sold off every other day or two. Though California suffered most of the casualties, with some 25 lenders going under, no region of the country was untouched. 
11/30/10 Servicer-Driven Foreclosures: The Perfect Crime?

One thing foreclosure defense attorneys stress is that a significant number of their clients facing foreclosure has made every single mortgage payment. . Read that again.

Yves Smith 

nakedcapitalism

Now the servicer starts playing the sort of tricks practiced elsewhere in retail banking. Under the terms of the loan and Federal law, monthly payments are to be applied to principal and interest first, fees second. But the bank applies it to fees first. This makes his second month come up short. He gets charged a fee for insufficiency, and perhaps a late fee too.
11/30/10

Regulators Weren’t Looking at Foreclosure Practices, Says GAO

David Dayden 

FDL

The foreclosure fraud issue has exposed the criminal practices of the big bank loan servicers, who have resisted calls for modifications because they have a financial incentive to foreclose. This has also led to an epidemic of servicer-driven defaults,
11/29/10 Foreclosures Are the Mortal Enemy to Economic Recovery Lori Ann LaRocco 

CNBC

Taylor would like to see widespread mortgage modifications that would allow homeowners in danger of defaulting to keep their homes. Taylor is on the board of directors of the Rainbow/PUSH Coalition and the Leadership Conference for Civil Rights. He has also served on the Consumer Advisory Council of the Federal Reserve Bank Board, The Fannie Mae Housing Impact Division as well as The Freddie Mac Housing Advisory Board

He is extremely passionate on why his idea is the right choice to help turn around the real estate market.

11/29/10

Forged Comment Letters Sent to U.S. Regulators Writing Derivative Rules Silla Brush 

Clea Benson

 Bloomberg

Some of the letters to the agency, which is writing rules for derivatives trading, contain identical passages criticizing banks for their “cartel-like control” of the $583 trillion swaps market. They include signatures from a circuit court judge, a county sheriff and a mental health counselor. All were forgeries, according to interviews conducted by Bloomberg News.
11/29/10

???

 

 

Criminal Probe Of Wall Street Currently Underway, Holder Confirms

Attorney General Eric Holder has confirmed that the U.S. attorney's office in the southern district of New York is conducting a criminal investigation of Wall Street.

Huffington Post (Entire article) At a news conference, Holder declined to say whether the investigation involves hedge funds and allegations of insider trading – as news reports have suggested. Holder would say only the probe by the U.S. attorney's office is very serious and is ongoing.  

A week ago, the FBI searched the offices of three hedge funds in New York, Connecticut and Massachusetts as part of what outside experts say could turn out to be one of the largest probes in Wall Street history. Last Tuesday, mutual fund company Janus Capital Group said it was cooperating with an inquiry on insider trading.

11/29/10** Why Access to Lawyers Matters for the Working Class A recent study reveals that 63% of homeowners who had the gumption to reach out to the court in response to a foreclosure complaint and were participating in the pre-judgment foreclosure conferences established in that state continued to be unrepresented by counsel.

Marc Dann is a community affiliate of the Center for Working-Class Studies and a Cleveland lawyer specializing in labor and working-class issues.

The inability of many working-class families to afford legal services is making the protections of the due process clause of the constitution elusive to a growing segment of American citizens . This is not an abstract theory.  It has  become the vivid reality in the recent foreclosure crisis. Thousands of families may have been removed from their homes based on the negligent behavior and fraudulent representations of  mortgage servicers and some lawyers who represent them.  U.S. Trustees are beginning to hold banks accountable to prove their right to collect and foreclose.
11/29/10 Bank of America Mortgage Morass Deepens on Promissory Notes Issues “If this is correct, many, many, many foreclosures already occurred in which this plaintiff didn’t have the note,”  “This could affect thousands or hundreds of thousands of loans.” Prashant Gopal   

Jody Shenn   

Bloomberg

Testimony by a Bank of America Corp. employee in a New Jersey personal bankruptcy case may give more ammunition to homeowners and investors in their legal battles over defaulted mortgages. “If they do an end run and directly deliver it to the trust, that would violate all the documents they filed with the SEC under oath as to what they did,” Gardner said.
11/29/10

Bank of America Stock Declines on WikiLeaks Anticipation

 

Bank of America Corp.'s stock dropped more than 3% Tuesday on speculation that website WikiLeaks would soon release internal documents.

Dan Fitzpatrick

WSJ

Few financial institutions have been under more public scrutiny than Bank of America, with thousands of pages of emails, notes and sensitive regulatory conversations aired via congressional hearings and investigations.
11/29/10

County Register of Deeds Picks Fight with MERS

 

The recording fees Essex County has missed out on as a result of MERS purportedly bypassing normal recording channels was O'Brien's primary concern. These fees, in many cases by the way, are used to fund the county offices and in most cases contribute to county and state revenue. Some counties use real property recording fees to fund their courts, police departments, legal aid offices, and schools - the apparent lower operating expenses.

Richard Zombeck  

Huffington Post

Another gigantic potential issue is that roughly 90 percent of all residential mortgage loans originated over the last decade have been sold to either Fannie Mae, Freddie Mac, or to private securitization trusts, few of whom prepared, and none of whom actually recorded a complete unbroken chain of assignments of the mortgage together with the notes, so the mortgages (borrower IOU) have been separated from the note (proof of ownership, i.e. collateral).

This separation, known as bifurcation, means that the entity that purchased and allegedly holds the note does not have the legal rights contained in the mortgage. The consequence of this bifurcation is that the debt has become unsecured. Unsecured debt is when a lender loans money without the security of an underlying asset - like a house.
11/28/10

Bankruptcy Courts: 

Foreclosing? Prove It . . .

Barry Ritholtz

The Big Picture

The foreclosure mess has now entered a new phase, courtesy of the US Bankruptcy courts. The Trustees are forcing institutions to prove “they even have the right to foreclose at all.”

If Courts had always forced banks to prove its right to foreclose, we wouldn't be in this mess. MSF

11/28/10 Original article Justice for Some

  A Homeowners' Chapter 11  In today's America, the proud claim of "justice for all" is being replaced by the more modest claim of "justice for those who can afford it." And the number of people who can afford it is rapidly diminishing.

Joseph E. Stiglitz, 

Nobel laureate in economics  Professor at Columbia University

The mortgage debacle in the United States has raised deep questions about the "rule of law" the universally accepted hallmark of an advanced, civilized society. The rule of law is supposed to protect the weak against the strong, and ensure that everyone is treated fairly. In America in the wake of the subprime mortgage crisis, it has done neither. Americans have seen several instances in which individuals have been dispossessed of their houses even when they have no debts.
11/28/10**

Shortcuts on the FORECLOSURE paper trail

To get a sense of the lawlessness in Florida's court-run foreclosure process, look no further than public records at the Sarasota and Manatee county courthouses.

 "Every one of them is suspect. Some of them are clearly criminal. All of them need to be investigated by law enforcement." -- Michael Belle, Sarasota real estate attorney  

Todd Ruger  

Herald Tribune

An orderly real estate market depends on the legal transfer of property. Someone who bought a home from a bank that used questionable paperwork might have trouble selling the property. In addition, previous owners may be able to sue to get their house back. Two real estate attorneys and two longtime notaries consulted by the Herald-Tribune said the documents clearly constituted a crime.
11/27/10

‘Bank Run 2010′ aims to end ‘criminal, corrupt’ financial system  

The Raw Story The organizers of "Bank Run 2010" have chosen December 7 as the day when protesters are meant to withdraw their money from the banks, which they hope will cause a run on the banks that could collapse financial institutions.

But critics of the move say it's futile: If the protest is successful, they say, it will only result in another taxpayer bailout of the banks. (But Congress said there will be no more bank bailouts. MSF)

11/27/10** Don’t Just Tell Us. Show Us That You Can Foreclose.  

“Until now, what we had was homeowners complaining about a lack of due process,” Mr. Rothbloom said. “Now you have the federal government complaining about the abuse of the judicial process. That’s really what was missing before.”

Gretchen Morgenson 

New York Times

While banks may have booted a few robo-signers and tightened up some lax procedures, one question at the heart of the foreclosure mess refuses to go away: whether institutions trying to take back a property can prove they even have the right to foreclose at all. The United States trustee for the region, has intervened, filing motions contending that the banks trying to foreclose have not shown they have the right to do so.
11/26/10**

The Give and Take of Liar Loans

Did you hear the one about Countrywide Financial demanding that mortgage originators buy back many of the so-called stated-income loans that it had purchased from them during the late great housing bubble? 

Joe Nocera

NY Times

This same company is now insisting that other lenders that made stated-income loans — loans that Countrywide eagerly bought to fatten its balance sheet — must repurchase them on the grounds that, golly, the loans turned out to be fraudulent. The hypocrisy is breathtaking.
11/26/10 CITIMORTGAGE – FAMILY W/ AUTISTIC DAUGHTER, FATHER WITH ALZHEIMERS, HOMELESS DESPITE MAKING PAYMENTS 4closureFraud They made 11 trial payments on time, sent in paperwork as requested and stayed in close touch with Citi.

Citibank gave them a HAMP loan modification and took it away from them – because the house is worth more than the loan, so Citi will financially benefit from foreclosure”
11/24/10 The Defense of Homeowners In Foreclosure is Our Profession’s Highest Calling  

It is not only ethical for attorneys to defend homeowners in foreclosure, it’s a lawyers highest ethical calling because the issues extend far beyond the homeowner in foreclosure and touch the cornerstone of our American experience…. The United States Constitution.

Attorney Matt Weidner Where have the billions of dollars in federal money paid to servicers and banks gone?  How much have the banks, the servicers, the foreclosure mills, the document mills made while everyday Americans wallow in the pit of despair, uncertainly and misery that is foreclosure.  The banks and institutions that are driving this crisis made billions when they originated these loans (often under fraudulent circumstances). They took billions in the 2008 bailout orgy.  They took additional billions in HAMP money that was supposed to provide relief to homeowners.  But what relief do homeowners have to show for all these billions of dollars sloshing around?  Precious little but generations of additional debt.
11/24/10
Lender Processing Services Sued by Shareholders for Fraud The lawsuit
Daily Finance Lender Processing Services (LPS) which claims to be "the country's number one provider of ... default solutions" -- that is, foreclosure services for creditors -- is being sued by a pension fund shareholder for securities fraud. The suit, which is dated November 23 and seeks class action status, charges that LPS falsely inflated its stock price by making false and misleading statements in multiple places, including press releases, on analyst conference calls, and in SEC filings.
11/24/10 Bank of America official: Countrywide mortgage documents were not transferred properly to trusts

Chief Judge Judith H. Wizmur said that because the debt note was not transferred correctly it was not enforceable.

Ariana Eunjung Cha 

Washington Post

Testimony by a Bank of America executive in a bankruptcy case in New Jersey seems to indicate that Countrywide Financial wasn't passing along some crucial mortgage documents during the securitization process for residential mortgages.
11/24/10** A KeyBank Foreclosure Draws Fire  

Mr. Cox says that he plans to showcase Ms. Vaughan’s case before national lawmakers at a December 2 congressional hearing on foreclosure abuse, and he has sent a letter to the lender asking them to sell the house back to Ms. Vaughan, with more “rational” loan terms.

WSJ Blog In Mr. Cox’s account, Ms. Vaughan, who was current on her $50,000 first mortgage, had lost her job at a paper mill, but found a new job that paid less, and was seeking to restructure her second loan to make lower monthly payments. KeyBank declined the offer, and instead foreclosed on the home, bought out the first mortgage holder and listed the property for sale.  KeyBank earlier this year valued the house at $110,000, a number which Mr. Cox says is outrageously high
11/24/10 Home Buyers “Boycotting” Distressed Properties BEREL News Team Thanks to rumors that some lenders might be pulling all their REO properties off the market and accusations of foreclosure “malpractice” horror stories flooding the media, home buyers remained spooked even after major lenders called an end to their moratoria on foreclosures.
11/24/10 Sheriff Meister Letter to the Courts Sheriff Meister "It would behoove you as the chief judge of the five-county circuits to stop all mortgage foreclosure proceedings in all cases involving Mortgage Electronic Registration Systems ("MERS") and in all cases involving the absence of an original note because of the fraud involved, including, but not limited to, the backdating of MERS mortgage assignments.
11/23/10**

Banks Lobby to Make Stealing Your Home *Legal* 

A "Plan" to cover up Fraudclosure and convince Congress to make it legal.

This is a story the banks would prefer you didn't know.

MSNBC's 

Dylan Ratigan Show 

with Marcy Kaptur

The industry is pouring money and lobbying hours into protecting its interest - at the expense of ours.  Right now, lobbyists on Capital Hill pushing for legislation that would not only legalize this process but affirm MERS as the standard.  The industry could get rid of all the fraudclosure lawsuits and destroy the property rights of all Americans.
11/23/10

Obama Administration faults firms in foreclosures

Barr said the goal of the foreclosure task force was to hold banks accountable for fixing the problems that have been found and making sure that individuals who have been harmed are given a way to seek redress.

Associated Press Assistant Treasury Secretary Michael Barr said Tuesday that a foreclosure task force composed of 11 federal agencies had found serious problems in the way home foreclosures were being handled.
11/23/10 Review of foreclosure paperwork process finds 'widespread' and 'inexcusable' breakdowns, Goldman Sachs' Treasury official says "These problems must be fixed," said Michael Barr, assistant secretary for financial institutions. Link to Financial Stability Oversight Council (FSOC) Jim Puzzanghera 

L.A.Times

An ongoing review by government regulators of foreclosure paperwork problems has found "widespread and, in our judgment, inexcusable breakdowns" in the process for seizing homes of delinquent borrowers, a top Treasury Department official said Tuesday.

(What about the inexcusable breakdowns in the process of seizing homes of borrowers who are current, or when the loan was intentionally destroyed to cover up fraud??? MSF)

 

11/23/10**

 

Banks Burned by their own Fraud

another interview with Matt Taibbi

Once the banks completed  the fraud, they stopped doing their paperwork. Why bother doing the paperwork - you've already committed the crime.

MSNBC

with Matt Taibbi

The foreclosure mess didn't  become this dangerous because people missed their payments. The problem isn't with the borrowers, it's with the lenders and servicers.  

A growing number of lawyers, activists and journalists who are now digging into this say, it's beginning to seem possible - that literally hundreds of  billions and maybe even trillions of dollars in securities at the heart of financial crisis were never properly created.

8/17/10 COURTS AND SELF-REPRESENTED  (PRO SE) LITIGANTS   1 hour, 42 min.  

"Courts have an affirmative obligation to ensure that all litigants have meaningful access to the courts regardless of representation status". 

 - 2002 Conference of State Chief Justices

Laurnce Tribe

  Justice Department  

Senior Counselor for   

Access to Justice

Participants talked about self-represented (pro se) litigants and the challenges they present to the justice system. Among the topics they addressed were the number of pro se litigants engaged in civil litigation, providing free (pro bono) representation, case management, and programs set up by courts to provide legal advice. Videotaped testimony from several people familiar with self-representation were shown.
11/23/10**

Foreclosure Hearings Show Homeowners Who in Washington Cares   

with links and excerpts from the hearings "There's a good reason why homeowners are being blamed for this: It's easy and the banks tell us to blame them".

Richard Zombeck   

Huffington Post

 Servicers do not believe that the rules that apply to everyone else apply to them. This lawless attitude, supported by financial incentives and too-often tolerated by regulators, is the root cause of the robo-signing scandal, the failure of HAMP, and the wrongful foreclosure of countless American families.
Fall 2009 White paper A Glance at the Impact of the Subprime Mortgage Crisis on the Title Insurance Industry PDF  This essay will discuss these issues and how they have changed the way title insurance companies currently do business, particularly in the New York market.

Suzanne M. Garcia 

Westcor Land Title Insurance Company

The pressure to reduce losses has caused

massive layoffs, brought about the closing of many title insurance offices, and triggered underwriters to terminate hundreds of title agency agreements. The combination of layoffs and terminated agency relationships has cost the title industry hundreds of years of historical knowledge and expertise as these title experts search for new employment.

11/22/10** Foreclosure Detectives Hunt for Lies  

In two squat, suburban office-park buildings here, Richard Barrent is digging through loan files that could help decide who pays for the mortgage-paperwork debacle.

Ruth Simon 

WSJ

The former Wells Fargo & Co. quality-assurance manager's two-year-old company is part of a cottage industry of loan detectives obsessed with detecting fraud, misrepresentations and violations of underwriting guidelines. Such discoveries can be used as ammunition to force banks and other lenders to buy back loans from bond insurers, holders of mortgage-backed securities and other customers of forensic loan-review firms.

"There is a growing interest across the board" for such reviews, says Charles Cacici, managing member of Risk Management Group, a Brooklyn, N.Y., company that also scours mortgage files for problems. Competitors include Digital Risk, Clayton Holdings and Allonhill.

11/22/10

Acting Comptroller Testifies; CFO of Lender Processing Services Buys

Dr. Duru

Seeking Alpha

Where we (OCC) find errors or deficiencies, we are directing banks to take immediate corrective action, and we have an array of enforcement actions and penalties that we will not hesitate to impose if warranted. These can include civil money penalties, removals from banking, and criminal referrals. We expect to complete our examinations by mid to late December. By the end of January, we hope to have our analysis of the exams completed to determine what additional supervisory or enforcement actions may be needed.
11/22/10 Countrywide's Mortgage Document Errors May Doom Bank of America ABIGAIL FIELD 

Daily Finance

Testimony in a New Jersey foreclosure case decided last week may spell big trouble for Bank of America (BAC). If what one bank employee said on the stand proves to be accurate, paperwork problems it acquired when it purchased the failing mortgage provider Countrywide in 2008 could leave BofA on the hook for billions of dollars.
11/22/10

Banks Face Another Mortgage Crisis

Jonathan R. Laing

Barrons

The argument hinges on the arcane contract principle of representations and warranties, known as reps and warranties in legal jargon. Namely, did the mortgages go bad because of the unanticipated nationwide collapse in home prices (a so-called exogenous factor) or are the banks responsible for the mess because they "misrepresented" to the mortgage purchasers the shoddy quality of the mortgages they put in securities and pools?
11/22/10

Foreclosure takes toll on increasing number of children

Dina ElBoghdady 

Washington Post

Children who are forcibly uprooted from their homes and schools tend to suffer emotionally, socially and academically, studies preceding the mortgage meltdown show. Researchers suspect the same might be happening with children who have been dragged through foreclosures and they are urgently exploring the consequences.
11/22/10 One dead, two wounded in shooting involving South Beach eviction case JENNIFER LEBOVICH

 UISA YANEZ CRLINE

 Miami Herald

A man being evicted from a South Beach condominium complex apparently opened fire Monday morning.
11/21/10

The United States Constitution Has Been Suspended Until Further Notice

Attorney Matt Weidner Because the federal government owns or backs the majority of the loans that are being foreclosed on, the Fourth Amendment which should protect against unreasonable seizures must be suspended.
11/21/10 Think you've read the worst about foreclosures? Read this

This is tragic.  The court is ignoring the fraud in this case so it can give the banks another free house.  COURTS MUST BE INVESTIGATED.

MISPRISON OF FELONY sounds about right.

Toluse Olorunnipa 

Miami Herald

"These cases are handled in large volume -- and the majority of them are pro forma -- but many of the files are tinged with fraud and irregularities,'' he said. 

"The court simply does not have the time to hear the grievances of a homeowner raising fraud issues, which are fairly prevalent.''

11/21/10 N.C. AG questions Wells Fargo foreclosure practices Letter asks why N.C. isn't among states where bank's methods are being reviewed. Rick Rothacker 

Charlotte Observer

The use of unverified affidavits could be considered a fraud upon the court, he wrote.  

In particular, he said, Wells could be asserting that it attempted to modify loans for struggling borrowers without having a valid basis for those assertions.

11/20/10 Prominent South Florida foreclosure lawyer faces losing his own home DIANE C. LADE 

SUN SENTINEL

He said he's confident he and his attorney, Jamie Sasson, can defend against the action. ``[Deutsche Bank] doesn't have the paperwork,'' Ticktin said.
11/19/10

A COLLECTION OF BOGUS ASSIGNMENTS

Bogus+Assignments+#3

Bogus+Assignments+of+Mortgage

Attorney Matt Weidner Look carefully at these assignments (actually you don’t need to look too carefully), these are the types of “technical” issues that are at the heart of Fraudclosuregate.
11/19/10

FTC Press Release

FTC Issues Final Rule to Protect Struggling Homeowners from Mortgage Relief Scams

Rule Outlaws Advance Fees and False Claims, Requires Clear Disclosures

 
Federal Trade Commission Homeowners will be protected by a new Federal Trade Commission rule that bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable.
11/19/10 Distressed homeowners get mixed results from meeting TOLUSE OLORUNNIPA 

Miami Herald

"I'm done negotiating,'' he said. ``It's so compartmentalized that no one has the authority to make the decision.''

He walked out of the one-on-one session determined to stop paying the mortgage, and also strategically default on two investment properties that are severely underwater with Bank of America mortgages.

11/19/10 Citigroup Sued in N.Y. for ‘Accelerated’ Foreclosures Patricia Hurtado 

Bloomberg

Citigroup Inc. was accused of using fraudulent paperwork to process “accelerated” mortgage foreclosures in a lawsuit filed in federal court in New York. “Motivated by speed and profits rather than obligatory attention to detail, Citi failed to record necessary documents to legally foreclose,”
11/19/10

Gasparino on FCIC Delaying Report to Investigate Foreclosure Fraud

A lot of the republican members of the commission didn’t even know that they were going to go this route until they read it in the paper, until Fox Business Network was the first to report they were going this way.”

Wall Street Pit FBN’s Charlie Gasparino reports that Financial Crisis Inquiry Commission (FCIC) Chairman Phil Angelides has delayed the report “due out in December until the next year” so that the bipartisan commission can take a closer look “at this new issue of mortgage foreclosure fraud. 

(This was a "new" issue in the early 1990's. MSF) MSF)

11/19/10

Robo-Judges In Foreclosure Court

Two Florida Robo-judges interviewed

Consumer Warning Network First it was the missing “note“, then blind “rubber stamping” of foreclosure documents and now Florida Judges are brought out of retirement to fast track foreclosures in the system.  Is what they are doing fair?
11/19/10 Fraudulent Foreclosure Documents Threatens Investors Looking to Buy Foreclosed Homes Adriana Barnes   

Daily News Pulse

The decision to buy foreclosed homes does not make sense for many people. 

Given the state of the economy in general it is unlikely that many young people will want to invest in the housing market soon. 

Many of the banks and financial institutions that foreclosed on mortgages are now waiting to see what the government is going to do regarding the flawed foreclosure paperwork.

11/19/10

Foreclosure Fraud - MSNBC w/ Cenk & Matt Taibbi MSNBC  
11/19/10

Under Fire, Foreclosure King Resigns

Andy Kroll

Mother Jones

Beyond the backdated assignments, David J. Stern law firm routinely doctored legal filings. Case chronologies—the timeline of important events in a foreclosure—were changed "all day long" to create the appearance of propriety. Internal documents show that the firm attempted to push cases through the courts even when key documents like the assignment of mortgage—or the mortgage contract itself—were missing from the file.
11/19/10

Report

CRS Report Details Dangers of Foreclosure Fraud David Dayen

 FDL

More than anything else, I think this is why Treasury and other federal entities are taking a see no evil, hear no evil, speak no evil approach to this situation. Trustees are simply not meeting their clients’ expectations by actually performing due diligence over the securitization process, and this is true for when government is the trustee as well. Too many people have a stake in keeping the fiction of bank solvency alive.

Nevertheless, this isn’t going to end by closing your eyes and ears and shouting “la-la-la.”

11/18/10

Rep. Frank: Homeowners should not have 'false hopes' in foreclosure mess

Ariana Eunjung Cha 

Washington Post

Rep. Barney Frank (D-Mass.) on Thursday called for bipartisan support for legislation that will make sure another foreclosure "mess" does not happen again, but said that homeowners who are delinquent should not have "false hopes" that a substantial number will get their homes back due to the paperwork problems.

What about the homeowners who made ALL their timely payments?

11/18/10 False Statements -R.K. ARNOLD (MERS

Until courts require Trusts to come forward with actual proof that they acquired the mortgages in question, specifying whom they paid and how much they paid for each such trust-owned mortgage, the actual owner of these mortgages will never be known.

Lynn Szymoniak   

Fraud Digest

The titles were false, the signatures were forged, the “witnessing” was a lie, as was the notarization.

 Despite all of these false statements, the BIGGEST LIE on these documents is that the trust acquired the mortgage on the date stated plainly on the Mortgage Assignment. In truth, no such transfers ever took place as represented by these MERS certifying officers (or their stand-in forgers).

11/18/10 Foreclosure Fraud Hearings Update: Just 21 Second-Lien Mods in HAMP  

The banks have only allowed 21 second lien modifications out of 495,000 permanent HAMP modifications. That’s absolutely crazy.

David Dayen

 FDL

 

Waters got not only the Treasury Department to admit that they’ve levied no penalties on servicers who violate HAMP guidelines, but got the Office of the Comptroller of the Currency to admit they’ve levied no fines, made no cease and desist orders, and threatened no charters of any banks and servicers who have violated the law. 

In their defense, the acting director of OCC, John Walsh, said that he’s set up a consumer complaint center. “How would anyone know that?” asked Waters.

11/18/10

Letter

and

 response

Register of Deeds to Mass. AG Coakley

Re: MERS

John L. O'Brien 

Mass. Register of Deeds

MERS may have wrongfully bypassed Massachusetts recording requirements, thereby frustrating the borrower's right to know the true identity of the holder of their mortgage.  As this practice has been going on for ten years, this could amount to hundreds of thousands of dollars in loss revenue to the Commonwealth.  If these allegations are proven true, then I would request that a lawsuit immediately be filed against MERS to recoup any and all fees penalties and interest.
MERS Response to Request from Register of Deeds to Mass. AG Martha Coakley to Investigate MERS MERS Fees are paid for a service performed, and if a document is eliminated because it is no longer necessary, no fee is due because there is nothing to record. In fact, MERS greatly reduces the workload of county recorders, resulting in lower operating expenses for the county recorder’s office. Moreover, it would be the borrower, and not the lender, who ultimately pays the costs of recording assignments, either directly or indirectly.
11/18/10**

Levitin Addresses Elephant in the Room: Regulators Don’t Want to Fix the Foreclosure Crisis

Nothing gets fixed, despite all kinds of documented evidence that the banks and servicers have committed fraud. 

David Dayen

 FDL

But this was the key moment. Levitin said that we don’t have the full data sets from the servicers, or any comprehensive data to see whether there is a full-on crisis of unclear title and improper mortgage assignment. In other words, we don’t quite know the full extent of the problem. Levitin said, essentially, “The federal regulators don’t want to get info from servicers, because then they’d have to do something about it.” They don’t want to recognize the scope of the problem because it would require them to act.
11/18/10

 

 

 

Judge wants answers to foreclosure document fees

 

Judge Gardner said: 

" I don't want to throw anybody in jail, but I'm getting really angry, and I'm not going to tolerate it anymore," Gardner said. "I want some answers. This stuff isn't getting through on my watch."

 

Video: Judge wants answers

 

SHANNON BEHNKEN 

The Tampa Tribune

"Routinely, routinely, I'm seeing charges of $1,600, $1,800, $1,000, $800, any of those are ridiculous, and there had better be a good reason for it," Gardner said, noting that these fees should typically be $45 to a couple hundred bucks.

The judge chose 12 random files and said she found 11 of them had what she says appear to be inflated charges to serve homeowners with lawsuits. Some of the lawyers who submitted affidavits to the court saying the fees are "reasonable" often sign their names and bar numbers in an illegible scribble, court records show.

"I used to think this was just sloppy work, but I truly have begun to wonder if it's not concealment," Gardner said.

11/18/10

Judge: Remember, foreclosure proceedings are open to public SHANNON BEHNKEN 

The Tampa Tribune

The Florida Supreme Court's top judge issued a memorandum Wednesday directing state judges to make sure foreclosure proceedings are open to the public.

 

11/18/10

Aggressive lobbying defends MERS mortgage-trading system Ariana Eunjung Cha 

Brady Dennis 

Washington Post

The financial services industry has launched an aggressive campaign on Capitol Hill to bolster the legality of the way companies have turned mortgages into securities and traded them across the globe in recent years.
11/18/10 US banks warned on cost of foreclosure mess

Banks could face fines or criminal referrals if widespread problems are found in foreclosure documents used to evict hundreds of thousands of homeowners

Reuters Lenders are accused of having used "robo-signers" to sign hundreds of foreclosure documents a day without proper legal reviews, a fiasco that has reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.

"These range from informal memoranda of understanding to civil money penalties, removals from banking, and criminal referrals," OCC's Mr. Walsh said.

11/18/10 SHAREHOLDERS DEMAND: WHERE ARE BANKS' DIRECTORS IN FORECLOSURE MESS?   

Liu: “Their Silence is Deafening”

New York City Comptroller 

John C. Liu

Since July, we have warned that flawed bank procedures are forcing New Yorkers from their homes and hurting our economy. It is now clear that foreclosure and mortgage irregularities expose shareholders to substantial liabilities and loss. This would hurt our retirees and taxpayers.”
11/18/10

Gulfport man kills himself as bank forecloses on his home

(MSFraud believes a cursory investigation would prove the bank did not legally own the home.)

Jamal Thalji 

St Pete Times

"When the foreclosure started a couple of years ago, he told us that he was not giving up his house for anything," his daughter said. "They would have to take him out or he'd kill himself.
11/18/10

HEARING on ROBO-Signing, CHAIN OF TITLE, LOSS MITIGATION and the FAILURE of the SERVICERS, etc.   This hearing is about the failure of the mortgage servicing industry to uphold due process, to obey the law, and to live up to its all-stated goal of preventing foreclosures. It is also about the aftermath of what happens when an industry is essentially broken and what happens when our regulators do nothing to pick up the pieces. 
11/18/10 Why a Foreclosure Compensation Fund Is a Bad Idea Ethan Cohen-Cole 

CREDIT SLIPS

(Judge Bean's comment to the article): 

Why is it error-prone? Because it can be. There is no penalty for error because in the vast majority of cases, the victim of the error can accomplish nothing without costly legal assistance.

The collateral damage has been acceptable for almost a decade and now, suddenly, everyone is somehow exorcised and carrying torches and pitchforks.

If there is a fund established for this kind of thing, the money should come from the foreclosure mill firms and their malpractice insurance carriers with a major contribution from Bar Association professional oversight entities.

Imagine where we'd be today if a servicer couldn't find local counsel to file a bogus foreclosure?

11/18/10

Erroneous Foreclosures

Alan White

CREDIT SLIPS

Erroneous foreclosures thus come in two flavors.  Foreclosing someone who is not actually behind, or whose default was precipitated by junk fees, unnecessary or overpriced forced-place insurance, or payment application errors (common in bankruptcy cases) is obviously wrong.  Equally wrong, however, are foreclosures of homeowners who have sufficient income to fund a modified loan that will produce significantly higher investor returns than a distressed foreclosure sale.  Contrary to the pronouncements of servicers and Treasury officials, modification and workout consideration is not happening before foreclosure starts, it runs on a parallel track with foreclosure processes.  Frequently, the foreclosure train wins the race.
11/18/10

Federal Agencies Examining Loan Servicers, MERS, and LPS Jann Swanson 

Mortgage News Daily

Mortgage Electronic Registration Systems (MERS) and Lender Processing Services (LPS) will be joining eight mortgage servicers as the subjects of "examinations" by federal regulatory agencies according to testimony prepared for presentation today at a House Financial Services hearing on Robo-Signing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing
11/18/10 CitiMortgage admits to foreclosure paperwork problems Ariana Eunjung Cha   

Washington Post

Citigroup, which for almost two months has claimed its process for preparing foreclosure affidavits was sound, is reviewing about 14,000 documents, including 4,000 that may have been notarized improperly

Citi expects that affidavits executed prior to the fall of 2009 will need to be refiled," Lewis said. 

(This could represent hundreds of thousands of homes that were taken unlawfully. MSF)

11/17/10**

The Foreclosure Mess's Potentially Devastating Consequences

A related problem is that the loan servicers that are doing mortgage modifications with homeowners may not have the right to do modifications. Similarly, an entity without the right to foreclose also doesn't have the right to modify a loan.

 
Abigail Field

Daily Finance

To understand how likely the worst-case scenario is, take a look at what would have to go wrong with documentation during the securitization process, and consider it in light of robo-signing and all the other paperwork problems. The basic issue is this: to get the notes and mortgages into the trust in a way that kept them there -- even if the mortgage originator or the sponsor went bankrupt (as many originators did) -- they had to be transferred at least twice before entering the trust.
11/17/10

Foreclosure class actions pile up against banks  

Foreclosure-fraud class action lawsuits are starting to pile up against major banks across the country, threatening a besieged industry with billions more in potential losses.

MICHELLE CONLIN 

 CURT ANDERSON

 ASSOCIATED PRESS

Bank executives are swarming Capitol Hill this week to defend themselves against multiple foreclosure-related investigations, including one by all 50 state attorneys general. Talks are under way in that probe in hopes of reaching a settlement, but that wouldn't extinguish the mounting threat of an avalanche of class actions.
11/17/10 Foreclosure Fix Is Seen as Distant  

“The large banks say they are doing everything they can to avoid foreclosure, but that is not the reality on the ground,” said Patrick Madigan, an assistant attorney general in Iowa who is a lead figure in the investigation.

DAVID STREITFELD 

NELSON D. SCHWARTZ

 New York Times

The banks, who have been subjected to bad publicity, have played down the investigation and want to see it end as quickly as possible. The state attorneys general, however, say that there is an opportunity to fundamentally change the way banks deal with defaulting borrowers so that more people can stay in their homes by modifying their mortgages, and that they will take the time needed.
11/17/10

Recapping Yesterday’s Senate Banking Hearing on Foreclosure Fraud FDL This problem becomes worse when you realize that the major third-party servicers… are also owned by the same big banks that own the second liens!! Don’t tell me there’s no collusion there. The failure to modify and the rush to foreclose is a giant protection scheme for the big banks.
11/17/10

Fla. chief justice says foreclosures must be open

Chief Justice letter to the Florida Courts

BILL KACZOR 

MSN

The courts of Florida belong to the people of Florida. The people of Florida are entitled to know what takes place in the courts of this state. No crisis justifies the administrative suspension of the strong legal presumption that state court proceedings are open to the public.
11/17/10 Bank Regulators Launch Examination of MERS Alan Zibel 

WSJ

Federal bank regulators are conducting examinations of two companies (MERS & LPS) that banks use to process foreclosures, amid concerns that banks cut corners on thousands of foreclosure documents.
11/17/10

VICTORY!- YOUR COURTS HAVE LISTENED TO YOU- Lisa Epstein!

Attorney Matt Weidner There is one other critical piece of information that the entire world needs to be aware of  when the history on the entire  Fraudclosuregate saga is written. 
11/17/10

"Some Heads Have to Roll" Senate  Hearing

STOP THE LOOTING 

AND 

START PROSECUTING!

11/17/10

States, mortgage lenders in talks over fund for borrowers in foreclosure mess

Ariana Eunjung 

Cha Brady Dennis 

Washington Post

State attorneys general and the country's biggest lenders are negotiating to create a nationwide fund to compensate borrowers who can prove they lost their home in an improper foreclosure.
11/17/10 U.S. Sets 50 Bank Probes  (but the wrong banks)

FDIC Steps Up Investigations at Failed Lenders; 'These Numbers Will Increase'

Jean Eaglesham

WSJ

The agency responsible for dealing with bank failures is stepping up its effort to punish alleged recklessness, fraud and other criminal behavior, as U.S. officials did in the wake of the savings-and-loan crisis a generation ago. More than 300 banks and savings institutions have failed since the start of 2008, but just a few have led to criminal charges being filed against bank officials.
11/17/10 Foreclosure class actions pile up against banks CURT ANDERSON 

MICHELLE CONLIN 

AP

Perhaps an even bigger threat are the lawsuits that contend the banks' foreclosure machinery amounted to a racketeering enterprise. One such case, an Indiana lawsuit against Bank of America, was filed under civil Racketeering Influenced and Corrupt Organizations or RICO laws, which allow damages to be tripled.
11/17/10** Foreclosuregate: The Buck Stops Nowhere

  Will Congress force accountability for the rapacious companies who forced Americans out of their homes? Don't count on it.

Andy Kroll

Mother Jones

Most startling of all, though, was the nagging feeling of déjà vu that hung over the hearing: that we've been here before, asked the same questions, and heard the same answers from the banks. 

Worse yet, the answers offered by two of the housing industry's representatives at Tuesday's hearing—Barbara Desoer, president of Bank of America Home Loans, and Chase Home Lending CEO David Lowman—offered little assurance that the dual track problem was being fixed. 

MERKLEY: Have you changed your practices to suspend the foreclosure proceedings, not the final step but the whole stream of events?

LOWMAN: We have not.

11/17/10

Pressure Builds Over Loan Modifying VANESSA O'CONNELL 

VICTORIA MCGRANE 

WSJ

The attorneys general are scrutinizing whether home-loan servicers violated state laws against deceptive practices by using "robo signers" to submit affidavits and foreclosure documents without confirming the paperwork's accuracy. But the states' investigation, which could lead to civil charges, already has expanded to include other issues, such as the fees charged by servicers.
11/16/10

 

 

Senator Ted Kaufman Introduces Congressional Oversight Panel's November Report Senator Kaufman A MUST SEE VIDEO
11/16/10

CNBC: Three Large Banks May Settle With Improperly Foreclosed Homeowners

The Ledger (Entire article) Three big U.S. banks are nearing a settlement in which they would compensate borrowers whose homes were improperly foreclosed upon, according to a CNBC report. Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. would also agree not to start foreclosure proceedings until they have exhausted all efforts to modify a borrower's mortgage, CNBC reported Tuesday. Many borrowers have complained of receiving foreclosure notices while they're negotiating to lower their loan payments.
11/16/10 CNBC BREAKING NEWS FROM CNBC'S DIANA OLICK: 

TOP MORTGAGE EXECUTIVES FROM BANK OF AMERICA AND JP MORGAN AND IOWA ATTORNEY GENERAL TOM MILLER NEAR DEAL

AN INDEPENDENT, THIRD PARTY MEDIATOR WILL REVIEW THE CASES SEEKING PAYMENT FROM THE FUND.

CNBC

Diana Olick

BANKS WOULD PAY INTO A FUND USED TO COMPENSATE BORROWERS WHO HAVE CLAIMS AFTER THEIR HOME HAS BEEN SOLD IN FORECLOSURE. THE FUND WOULD BE ADMINISTERED BY THE STATE AG'S, NOT THE BANKS. 

BORROWERS WOULD HAVE TO PROVE THEY WERE WRONGED IN THE FORECLOSURE PROCESS. SO FAR NO DOLLAR FIGURE HAS BEEN PUT ON THAT, AND EACH BANK COULD SETTLE ON ITS OWN NUMBER.

11/16/10

Dodd: Robo-signing the tip of the iceberg

The head of the Senate Banking Committee said Tuesday the foreclosure “robo-signing” crisis is the tip of the iceberg of mortgage documentation problems as he called for federal regulators to step up their efforts

MarketWatch Attorney Matt Weidner wrote in his blog: For years we’ve been screaming in the wilderness about the systemic problems that exist in foreclosures and the mortgage servicing industry. 

For years, many of our arguments and legal pleadings have been rejected or disregarded. (Surely these banks cannot be lying in the pleadings, not in this courtroom, not in this state!?) And still, the system continues. 

Well, the allegations of fraud, widespread abuse, lies and systematic violations are no longer just conjecture, speculation or opinion of advocates and defense attorneys.  After the testimony and admissions before the United States Senate, the allegations take on a whole other level of legitimacy.

11/16/10

PDF

Press Release

AMI Supports Long Term, Effective, Sustainable Solutions to Avert Foreclosure; 

Invites Bank Servicers to Join 

"All too often, homeowners are being victimized by the servicers’ past and ongoing actions. The time is now for a permanent solution to America’s housing crisis," continued Katopis.

Association of Mortgage Investors Again, everyone agrees that helping all willing homeowners find sustainable solutions should be the primary goal. Further, AMI also urges all servicers to no longer place their own conflicted interest ahead of homeowners. 

"We urge all the major bank servicers to invest the time and resources necessary to allow for borrowers to find sustainable solutions in a timely manner and customary fashion," remarked Katopis.

11/16/10

BROOKLYN BEATDOWN!

 

JUDGE SHACK SLAMS CITI:

4closurefraud "The Court does not work for CITI and cannot wait for CITI to get its 'act' together."
11/16/10

Faulty Foreclosures Blamed on Fla. Courts

Josie Gulliksen 

Housing Watch

Getting $6 million to clean up faulty foreclosures as quickly as possible is probably the worst thing that could have happened to Florida's court system. The American Civil Liberties Union of Florida, the First Amendment Foundationand several press entities have joined forces in an effort to put a stop to the rampant "rocket docket" mentality that has arisen after state lawmakers allotted those funds.
11/16/10 Foreclosure Fraud Assault - A Cry For Help Alan Gray 

NewsBlaze

The victim has no option other than to cry out for help in this urgent appeal, and hope that people who read this story will be prompted to outrage, as well as motivated to circulate this story so that change can come, to target judicial systems that facilitate social harm.
11/16/10 Man Makes Ridiculously Complicated Chart To Find Out Who Owns His Mortgage William Alden 

Huffington Post

But just how complicated? This chart from Zero Hedge shows the convoluted journey a mortgage takes as it morphs into a security. Dan Edstrom, of DTC Systems, who performs securitization audits, and who is giving a seminar in California next month, spent a year putting together a diagram that traces the path of his own house's mortgage. "Just When You Thought You Knew Something About Mortgage Securitizations," says Zero Hedge, you are presented with this almost hilariously complicated chart
11/16/10

David J. Stern's Florida Foreclosure Firm May Default On Loan

Reuters DJSP Enterprises Inc, run by the lawyer David Stern, on Monday said its DAL Group LLC unit defaulted on a credit line and an equipment note after failing to repay money advanced by Bank of America Corp. It also said DAL has missed November office rent payments
11/16/10

Mortgage industry problems broad, Iowa AG says MARCY GORDON 

The Associated Press

CNBC reported that Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. are nearing a settlement with the 50 attorneys general in which they would compensate borrowers whose homes were improperly foreclosed upon
11/16/10

Watchdog Warns of 'Potential Crisis' From Foreclosure Fraud

MATTHEW JAFFE  ABC News Foreclosure fraud problems could cause the U.S. housing market to collapse, push the "precarious" financial system into disarray and shatter the economy's fragile recovery, a government watchdog warned in a new report due out today.
11/16/10**

The Fed’s New Foreclosure Predator Bailout

Banks are once again mobilizing to screw borrowers in the pursuit of epic bonuses.

A bank is barred from engaging in predatory lending, but if it does it anyway, it faces no serious punishment.

Zach Carter 

AlterNet

Despite escalating outrage over rampant foreclosure fraud, the Federal Reserve now appears ready to eviscerate a key mortgage regulation in an effort to spare banks the losses from their own wrongdoing. Even as bank executives preposterously claim to have wronged nobody in the foreclosure process, they’re pushing hard to unwind the only serious federal rule that protects borrowers from predatory loans and improper foreclosures. 
11/16/10** Hearing on MORTGAGE SERVICES and FORECLOSURE FRAUD C-SPAN
11/16/10

REPORT

NOVEMBER OVERSIGHT REPORT

Examining the Consequences of Mortgage
Irregularities for Financial Stability and Foreclosure
Mitigation

This Report should be read by all judges and cited in your briefs.

Congressional Oversight Panel In the fall of 2010, reports began to surface alleging that companies servicing $6.4 trillion in American mortgages may have bypassed legally required steps to foreclose on a home.
Employees or contractors of Bank of America, GMAC Mortgage, and other major loan servicers
testified that they signed, and in some cases backdated, thousands of documents claiming
personal knowledge of facts about mortgages that they did not actually know to be true.
11/16/10

Mortgage Transfers Are Valid, Group Argues as Foreclosure Hearings Begin Jody Shenn 

 Prashant Gopal 

Bloomberg

The oversight panel’s report said that if the procedures called for in so-called pooling and servicing agreements, or PSA, weren’t followed, New York law related to the formation of trusts would consider the transfer of debt “void.”
11/16/10

White paper

Transfer and Assignment of Residential Mortgage Loans in the Secondary Mortgage Market American Securitization Forum The White paper provides a detailed overview of the legal principles and processes by which mortgage loans are typically held, assigned, transferred and enforced in the secondary mortgage market and in
the creation of mortgage-backed securities (“mbS”). These principles and processes have centuries-old origins,and they have continued to be sound and validated since the advent of MBS over forty years ago.
11/16/10

Bank of America Home Loan Head Says No Homes Improperly Seized

Clea Benson 

Lorraine Woellert 

Bloomberg

“This will be the chance for Congress on both sides of the Capitol to get their oar in the water relative to what’s happened since the news broke,” said Bill Killmer, senior vice president of legislative and political affairs at the Mortgage Bankers Association. “It’s also an opportunity for those who have been called forward to separate myth from reality.”
11/16/10

Suits Over Foreclosure 'Robo-Signing' Are Piling Up Sheri Qualters 

The National Law Journal

"Courts are realizing that this has infected the integrity of the judicial system and are more sympathetic to homeowners who are challenging the foreclosure proceedings," Mason said.
11/16/10

Voices of Foreclosure Speak Daily About Desperation and Misery

Sensing the public mood, Ms. Desoer also plans to apologize for shortcomings in the foreclosure process, while reiterating her defense that no foreclosure or eviction was pursued by mistake.  

(The TRUTH: Hundreds of thousands of foreclosures and evictions were pursued by unlawful and illegal means. MSF)

NELSON D. SCHWARTZ

Herald Tribune

David Lowman, chief executive of Chase Home Lending, is also scheduled to testify and adopt an apologetic stance. 

“Our process was not what it should have been,” he is expected to tell the committee, according to prepared testimony. “Quite simply, it did not live up to our standards.”

(It lived up to your standards while you were stealing billions of dollars in ill-gotten gains. MSF)

11/16/10

Report: Foreclosure Mess May Threaten Banks

AP In legal moves by mortgage investors against banks, one action alone could seek to force Bank of America to buy back and take partial losses on as much as $47 billion in soured loans, the report notes.

Borrowers may not be able to ascertain if they're sending their mortgage payments to the right party. Judges may block all foreclosures. Prospective buyers and sellers could be in left in limbo.

11/15/10**

ACLU Calls On Florida Judges To Ensure State Foreclosure Court Proceedings Are Open To Public ACLU Press Release The American Civil Liberties Union, the ACLU of Florida and a coalition of journalistic and First Amendment organizations today delivered letters to two top judicial officials in Florida urging them to ensure that foreclosure court proceedings in the state are open to the public.

The letters highlight a number of reports from around that state that, taken together, point to a troubling pattern of foreclosure courts operating behind closed doors rather than openly as mandated by Florida law.
11/15/10

Taking knocks in court, foreclosure lawyers facing Florida Bar investigations, too  

Let the 1,000's of Disbarments Begin

Steve Patterson 

The Florida Times Union

"In principle, foreclosure fraud can end a lawyer’s career. 

 

Knowingly giving false documents to a court or lying to a judge can lead to disbarment. 

 

Just knowing another lawyer did that and not saying anything can be grounds for suspension."

11/15/10

More Evidence That Mortgage Loans Were Not Properly Conveyed to Securitization Trusts

The evidence that the deal creators violated these stipulation is widespread. Borrowers fighting foreclosures often find the trustee can’t locate the note, which should be impossible if the certifications the trustee made were accurate. Another proof of the failure to adhere to these requirements is that the note are often conveyed to the trust right before the foreclosure. This fix is impermissible for three reasons: it is far too late (years after the cutoff).

naked capitalism Wells Fargo Bank was the bank that filed the most foreclosure actions in five South Florida counties in October, 2010….. The majority of these cases were filed by Wells Fargo as Trustee for mortgage backed trusts. In every case involving a trust, the original mortgage assignment to the trust was missing. Wells Fargo used Assignments prepared years later – most often within a few months of the foreclosure – and often prepared AFTER the foreclosure was filed. In many cases, JP Morgan Chase transferred non-performing loans originated by Washington Mutual Bank into these trusts.
11/15/10

Miami: The Capital Of Foreclosure Fraud

 

Attorney Dustin Zachs interviewed

Fox  
11/15/10 Thousands of CRC "Notice of Trustee's Sale" with forged Deborah Brignac "signatures" recorded in the Office of the San Diego County County Recorder Bjorn 

San Diego

I have collected hundreds of examples of forged signatures of alleged robo forger "VP Deborah Brignac" appearing on California Reconveyance Company's (CRC) "Notice of Trustee's Sale (NoTS)" recorded not only in SD County, but in Ventura, Madera, Santa Clara, Santa Barbara, Riverside and Monterey Counties at least.  CRC is the alleged "Trustee" (actually what I suspect is a foreclosure chopshop) for WaMu, FDIC and JPMorgan Chase
11/15/10 More Evidence That Mortgage Loans Were Not Properly Conveyed to Securitization Trusts

All the assets conveyed to the trust had to be “performing”, meaning the borrower was current on his payments.

naked capitalism The evidence that the deal creators violated these stipulation is widespread. Borrowers fighting foreclosures often find the trustee can’t locate the note, which should be impossible if the certifications the trustee made were accurate. Another proof of the failure to adhere to these requirements is that the note are often conveyed to the trust right before the foreclosure. This fix is impermissible for three reasons: it is far too late (years after the cutoff), it is typically directly from the originator to the trust (in violation of the requirement that it go through all the intermediary parties) and it occurs after they have defaulted (contrary to the stipulation that the loan be performing).
11/14/10** Fraud-closure biz fizzles out

Bank lawyers prosecuting the 80,000 foreclosure cases in New York are all but admitting that the cases they have filed over the past number of years have been riddled with fraud.

Josh Kosman 

New York Post

In the three weeks-plus since New York State Chief Judge Jonathan Lippman put the foreclosure lawyers on notice that any fraud in foreclosure paperwork would be met with severe penalties -- he is making lawyers sign affirmations promising they took "reasonable" steps to make sure the legal papers are true -- practically no new foreclosure cases have been filed.
11/14/10 Dodging fees could cost banks more Michelle Conlin 

Curt Anderson 

The Associated Press

Counties complained about the lost revenue after MERS was implemented, but they rarely tried to challenge the new way of doing business. 

Now, three years after the housing crash and two months after allegations that some banks submitted fraudulent documents to foreclosure courts, every aspect of the nation's mortgage machine is under scrutiny.

11/14/10 He sounded the Housing Alarm, but to no avail  

"When fraud becomes the competition, anybody who has any ethics is driven out of business," he said. "As a fiduciary, I felt I couldn't do my job.

Greg Gordon 

Washington Post

Former Treasury secretary Henry M. Paulson Jr., Federal Reserve Chairman Ben S. Bernanke and other top government officials have said they did not notice the dangers that Michael Blomquist saw in the runaway California housing market until five years after he did.
11/14/10

No Breaks for Robo-signing Computer Stamping Mortgage Documents

Prashant Gopal 

Bloomberg

The foreclosure crisis opened up the process to scrutiny, as banks claimed to have lost thousands of promissory notes and were instead showing judges copies, White said.

Virginia B. Townes, general counsel of the Florida Bankers Association in Tallahassee, said some banks intentionally destroyed notes after scanning. Townes declined to name specific companies.

“The problems were lurking in the files,” White said. “As long as people were paying and values went up nobody cared. Fraud that happens during boom times comes to light in the bust.”

11/14/10

Putting Money on Lawsuits, Investors Share in the Payouts

BINYAMIN APPELBAUM 

NY Times

Large banks, hedge funds and private investors hungry for new and lucrative opportunities are bankrolling other people’s lawsuits, pumping hundreds of millions of dollars into medical malpractice claims, divorce battles and class actions against corporations — all in the hope of sharing in the potential winnings.
11/14/10 Foreclosure paperwork miscues piling up Aldo Svaldi 

The Denver Post

Brent and Wendy Diers of Fruita thought their foreclosure nightmare would end in April when they sent a check to pay off their mortgage.

 

But more than six months later, CitiMortgage hasn't followed through on repeated assurances it would release the lien and give them title.

 

And despite a judge's ruling that they are not in default, the lender's law firm, Castle Meinhold & Stawiarski, continues to pursue a foreclosure sale.

11/14/10

Florida Court Case Finds Robo Signing Not Enough to Stop Foreclosure naked capitalism Insightful instruction on how to LOSE your robosigning case if you are not careful.
11/13/10**

Foreclosure Buyers Beware.  This is the Next Real Estate Time Bomb: 

 "A Lack of Clear Title"

Garrett Sutton Esq.

When I spoke to the Seller's broker I asked why there was no representation or warranty as to clear title. The broker minimized this concern, as they do, by saying Wells Fargo's title company would cover everything. There was nothing to worry about.  Oh really?

A break in the chain of ownership rights means the foreclosing bank is selling something it does not technically own.

11/13/10** Extend and Pretend: A 40 Year, 2% Loan Mod

Bank of ScAmerica's Loan Mod

naked capitalism This is one hell of a mod. I wonder if this was cooked up as this loan has a Doc problem behind it. The mod would eliminate all the paperwork issues. I also wonder how this new loan will be accounted for. I can’t tell if this is in a pool or actually owned by BAC. But if it is going on someone’s books at par then the whole thing is just a scam. This is not a loan. It is a patch to gloss over accounting and regulatory problems.
11/13/10

United States Supreme Court Will Soon Issue a Landmark Decision on the Validity of the Constitution PR Newswire Windsor says: "I have discovered that, at least in Atlanta, Georgia, the federal courts operate like a police state in which the judges are all-powerful, committing criminal acts from their benches and violating the Constitutional rights of parties who have the misfortune of appearing in their courts."
11/13/10

Kangaroo Courts and Retroactive Legality RON BEASLEY 

Moderate Voice

What if you robbed a bank and got caught?  You then used some of your ill gotten gains to buy enough lawmakers and they passed a law to make your crime legal.  That’s exactly what the banks themselves are doing in an attempt to save their hides from mortgage/foreclosure fraud.
11/13/10

The Nine Most "Inconvenient" RoboSigning Admissions BofA Would Love To Disappear

 

Contains several Robo-signor videos and includes some of the most damaging admissions

Tyler Durden   

Zero Hedge

A sampling of some of the choicest admissions by robo-signers, which will continue to serve as the basis for thousands of lawsuits (both RICO and otherwise) to come. While we know that BofA's Reps & Warrantees reserve is woefully underfunded (with everyone and their grandmother now seeking to putback RMBS toBofA, anything less than 'infinity' is underfunded), we hope Bank of America has set up a sufficiently large legal expenses reserve. It will need it.
11/13/10

Bank of America: Robosigner suit should be moved to federal court Kelly Metz 

Morning Journal

McGookey has said he believes he can prove Weston is a robosigner and did not follow the law making the affidavit null and void and therefore the foreclosure as well.

The process of robosigning is done in businesses to increase production, which makes sense from a business standpoint, but is illegal, McGookey said.

11/12/10**

Legal twist forces foreclosure redos

Creates second chance for former owners

Jenifer B. McKim

Boston Globe

“The problem is that so many of the homeowners already moved out and didn’t know the foreclosures were unlawful,’’ said Nadine Cohen, managing attorney for the consumer rights unit at Greater Boston Legal Services. “Those are the people who have really been harmed in all of this.’’
11/12/10**

Janet Tavakoli on Bank Foreclosure Fraud from David Fry Foreclosure Fraud is just the tail end of frauds that began when a lot of these loans were originated.
11/12/10

Prosecutors Probe Counterfeit Notary Seal wsbtv Check your paperwork and VERIFY Notary Seals to make sure they are not counterfeit or expired.
11/12/10

Get Ready for the Great MERS Whitewash Bill

If courts rule against MERS, the damage could be catastrophic. 

John Carney 

CNBC

The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS.

11/11/10

Bank of America Reveals Its Fraudclosure RICO Defense Strategy

Bank of America's Memorandum in Support of Motion to Dismiss in:

Davis v. Bank of America, BAC, Countrywide

Tyler Durden

Zero Hedge

The main thing BofA does not defend against is the underlying allegation that fraudulent affidavits were used to evict the Davis family, nor, more importantly, does it present a verifiable case that it does in fact own the underlying mortgage note. As such, once the technicalities are all resolved in the next RICO lawsuit, all the holes presented by BofA's attorneys will be filled, making a technicality-based defense that much more difficult, since if BofA/CFC indeed does not own the mortgage note, there is little it can do to defend itself against an onslaught of comparable legal claims.
11/11/10

Foreclosure Law Firm Accused Of Fraud, Racketeering wsbtv Class Action filed against law firm, robosignors, Prommis Solutions, forged notary stamps.
11/11/10**

Deposition

Deposition of Expert Witness Lane Houk) in a Securitized Trust/Trustee Foreclosure Case

62-Page Deposition taken by DBNTC

Affidavit filed in the instant case

Affidavit of Expert Opinion with all Exhibits

Lane Houk It took an Act of Congress to finally get a copy of my own deposition. Go figure… I was retained by an attorney and client in a New Jersey case to conduct a securitization analysis and investigation on this case and then quantify my opinion in an Affidavit.

The Affidavit was filed in the instant case and the judge relied on my Affidavit in his ruling on the Plaintiff’s Motion for Summary Judgment – which he denied after carefully considering my opinion in the Affidavit.
11/11/10 Bank of America Allegedly Foreclosing Fraudulently in Kentucky

This means the odds are awfully high that Bank of America committed multiple frauds on the court, first on the state court in the foreclosures process, and now on the Federal bankruptcy court.

Bank of America Proof of Claim on Scribd

naked capitalism Here is the juicy part. A Proof of Claim is filed later that day. It shows a series of assignments that were executed after the judgment (meaning after the house was taken by BofA) and after the borrower’s attorney filed the bankruptcy petition. The assignment is from MERS to Bank of America executed on September 29. The second assignment is from Bank of America to trust CWABS 2003-B6(CountryWide trust). This assignment has not been recorded in the land office as of November 10. And even more fun, the allonges look odd.
11/11/10 With Kickbacks on Force Placed Insurance, the U.S. Mortgagegate Scandal Just Gets Deeper

I call these "fees" what they really are – kickbacks.

SHAH GILANI 

Money Morning

Servicers, meaning the big banks, have found a very lucrative niche in forcing very expensive insurance on homeowners. They get very large kickbacks from the insurance companies whose policies they buy on behalf of the homeowner. 
11/10/10**

Ties to Insurers Could Land Mortgage Servicers in More Trouble

 

Court documents show that a subsidiary of the country's largest specialty insurer paid undisclosed "commissions" for the rights to a servicer's force-placed business.

American Banker

Evidence of abuses and self-dealing in the force-placed insurance industry suggests that there may be far larger problems in how servicers are handling distressed loans than the sloppy document recording that has been the recent focus of industry woes.

Behind banks' servicing insurance practices lie conflicts of interest that align servicers and their insurer partners against borrowers and investors. Bank of America Corp. owns a force-placed insurance subsidiary, and most other major servicers receive commissions or reinsurance fees on the very same policies they purchase on investors' and borrowers' behalf.

"There's no arm's-length transaction here, and that creates all sorts of incentives for the servicer to force-place excessive insurance and overcharge consumers for policies that provide minimal benefit," said Diane Thompson, of counsel for the National Consumer Law Center. "Servicers and insurers have turned this into a gravy train."

11/10/10**

MUST 

READ

Matt Taibbi: Courts Helping Banks Screw Over Homeowners  

Matt Taibbi on how foreclosure courts are helping big banks screw over homeowners

The judges, in fact, openly admit that their primary mission is not justice but speed.

Matt Taibbi

Rolling Stone

This "rocket docket," is presided over by retired judges who seem to have no clue about the insanely complex financial instruments they are ruling on.

Their stated mission isn't to decide right and wrong, but to clear cases and blast human beings out of their homes with ultimate velocity. 

11/10/10

Obama – The Foreclosure Presidency

 Eleven million homes will be foreclosed between today and 2015. Forty-four million men, women and children, more people than reside in most states will lose their homes. Obama has Sided with the Banks and the Republicans on this Issue. In Other Words, the Problem Worsens

capcodtoday At the present time,  nearly 10,000 people lose their homes every day, and Obama has done little to help them out. He instituted the Home Affordable Modification Program, otherwise known as HAMP, but it has been a dismal failure according to most participants, many who feel the banks were allowed to steal their homes right from under the government's nose. Many attorneys general also believe the program isn't working and at least one federal inspector general is investigating the way it is run.

Many families have complained to attorneys general across the nation that HAMP is just a way for the banks to "string  them along"  for months, getting every last dollar out of them, before denying their participation.

11/10/10

Ties to Insurers Could Land Mortgage Servicers in More Trouble

 

Force-placed policies impose costs on both homeowner, investor

 

"Servicers and insurers have turned this into a gravy train." said Thompson

Jeff Horwitz 

American Banker

Evidence of abuses and self-dealing in the force-placed insurance industry suggests that there may be far larger problems in how servicers are handling distressed loans than the sloppy document recording that has been the recent focus of industry woes. 

Behind banks' servicing insurance practices lie conflicts of interest that align servicers and their insurer partners against borrowers and investors. Bank of America Corp. owns a force-placed insurance subsidiary, and most other major servicers receive commissions or reinsurance fees on the very same policies they purchase on investors' and borrowers' behalf. There's no arm's-length transaction here, and that creates all sorts of incentives for the servicer to force-place excessive insurance and overcharge consumers for policies that provide minimal benefit," said Diane Thompson, of counsel for the National Consumer Law Center.

11/10/10 As Foreclosure Crisis Deepens, Another Servicer Scam Exposed David Dayen 

FDL

 I’m beginning to think that the mortgage servicing industry is just an arm of the Mafia at this point. They certainly know how to run every criminal enterprise known to man to make money. The Dodd-Frank act reportedly prohibits this little scam, but there doesn’t seem to be any federal entity charged with enforcing that on the servicers
11/10/10

Former Loan Officer and Document Forger Plead Guilty to Roles in Mortgage Fraud Scheme

United States Attorney's Office
District of New Jersey
Edivaldo dos Santos and Rosa Damasceno each pleaded guilty today to conspiring to commit mortgage fraud, admitting that they attempted to use false documents to secure a fraudulent mortgage loan

Each face up to 30 years in prison and a fine of $1 million, or twice the gross gain or loss from the conspiracy.

11/10/10 Question: What Do Wells Fargo Bank and Class Action Lawyers Have in Common? Lawrence W. Schonbrun Huffington Post

Wells Fargo is not the only business that engages in scams to increase their bottom line. Class action lawyers regularly engage in similar schemes to take advantage of their clients in order to boost law firm profits. You be the judge: 

Class action plaintiffs' law firms get away with charging $300 an hour for work actually done by "contract attorneys" paid $50 an hour -- an enormous per hour mark-up.

11/10/10 Wells Fargo quits the Law Offices of David J. Stern Kim Miller 

The Palm Beach Post

Wells Fargo confirmed today that it is transferring its Florida foreclosure files from David J. Stern’s law firm. Wells gave no reason for the transfers, but they come one week after Fannie Mae and Freddie Mac took its cases from Stern. 
11/10/10

William T. Robinson III | Congress and the need to protect legal services for poor

William T. Robinson

Courier-Journal

 Providing pro bono legal services expands our system of equal justice. I commend Kentucky lawyers who participated in a pro bono program during the past week and respectfully remind those who couldn't do so, that pro bono work is our privilege and obligation.
11/10/10

The FBI Presents: Everything You Wanted To Know About Mortgage Fraud But Were Afraid To Ask

Gregory White 

Cluster Stock

Slide show that indicates the FBI is NOT investigating the fraud committed by the criminal banks and its criminal lawyers.

This needs to change soon!

11/10/10 Inside a Florida Robo-Signing Document Assembly Line Abigail Field

Daily Finance

Contrary to the banks' blanket denials that they've never tried to wrongfully foreclose on anyone, in cases that Forrest has defended he has encountered two banks trying to foreclose on the same mortgage; two foreclosure law firms filing suit to foreclose on the same mortgage; and banks trying to foreclose on properties sold for cash at a short sale.
11/10/10

IMPACT: Bypassing county fees may cost banks

MICHELLE CONLIN and CURT ANDERSON 

The Associated Press

In 1997, when the banks' burgeoning business in mortgage securities was clashing with the unwieldy nature of written forms, the industry created its own alternative, an electronic system that would track the ever-changing ownership of home loans.
11/10/10

FDIC prepares to crack down on officials of failed banks

Dozens of former officers and directors are advised to work out settlements or face legal action for their alleged misdeeds during the financial crisis.

E. Scott Reckard 

Los Angeles Times

"We are investigating [criminal] bank fraud and related cases in many different parts of the country, including in California," said Fred Gibson, deputy inspector general at the agency.
11/10/10 Bank of America sues its insurance provider over foreclosure claims  Christina Rexrode charlotteobserver.com "This is just the next phase of the crisis," said Keith Gumbinger, vice president of HSH Associates, a mortgage analysis firm. He said he hadn't heard of any similar lawsuits but expects more to appear, especially as banks try to offset their losses on mortgages, which could spiral as they're forced to buy back soured loans from Fannie Mae and Freddie Mac. "With all the losses in the past couple of years, everybody's trying to recover their money any way they can."
11/10/10

Mortgage Lenders Meet Resistance

in Courts  

The push by mortgage companies to accelerate the snarled foreclosure process is running into resistance from judges who are cracking down on sloppy paperwork.

Ruth Simon, 

Robin Sidel 

Nick Timiraos  

WSJ

In Florida, a state-court judge has begun forcing lawyers to defend fees charged to borrowers by law firms. Maryland's state appeals court told judges that they can hire experts to scrutinize paperwork filed in foreclosure proceedings—and make lawyers swear that the documents are accurate.  Since last month, New York has threatened to use "penalties of perjury" against lawyers caught filing bad documents, even if they didn't know about the problems when the foreclosure process began.
11/9/10** Is Your Foreclosure Final Judgment Void or Voidable?

Rally Saturday November 20, TAMPA

Attorney Matt Weidner “Even when judgments have been entered and sales have happened, they may say, ‘Whoa, that may have been sold improperly” McGrady said. 

“We’re going to have title issues and all those things."

11/9/10**

Some judges chastise banks over foreclosure paperwork

Ariana Eunjung Cha 

Washington Post

Spinner and some of colleagues in the New York City area estimate they are dismissing 20 to 50 percent of foreclosure cases on the basis of sloppy or fraudulent paperwork filed by lenders. "People thought people who didn't pay their mortgages were automatically deadbeats," he said. "People are educated now. They are realizing all of a sudden how many hundreds of thousands of these homes that were foreclosed may have been done so with fraudulent documents.
11/9/10 The force-placed insurance scandal Felix Salmon 

Reuters

$7,100 is an insanely enormous amount of money for a loan servicer to make on a single property: the average loan servicer makes just $51 per loan per year. And of course it’s not the servicer paying that $33,000 insurance premium — that money 

is paid by the investors who bought the loan.

11/9/10

Ties to Insurers Could Land Mortgage Servicers in More Trouble

When banks buy insurance on the homes of borrowers whose policies have lapsed, they get a great deal. Just not for the homeowners and investors who have to pay for it.

American Banker State court filings show alleged abuse in which banks charged borrowers for unnecessary insurance and backdated policies providing coverage retroactively. Often the insurance was acquired only after banks stopped advancing the premiums of delinquent borrowers' escrowed policies, causing those cheaper and more comprehensive policies to expire. In response to questions from American Banker, federal and state officials said that some practices that industry trade groups defend may not be legal.
11/9/10 Securitization Trustees in the Crosshairs in Mortgage Mess naked capitalism The Financial Crisis Inquiry Commission is also investigating trustees’ role in the foreclosure mess, according to several people with knowledge of the body’s work. The commission, which was created last year and has held a number of hearings, has no real teeth, but it plans to issue a report Dec. 15 on its findings about the causes of the financial crisis. The report is expected to include some discussion of trustees in securitizations, the people said.
11/9/10**

Ruling might further complicate loan crisis

Jack McCabe, a Deerfield Beach-based housing analyst said: "The emotional and physiological stress that people have gone though makes this a powder keg."

 

4th District Court of Appeals Opinion

Tom Bayles

Herald Tribune

What happens next could have widespread implications for the more than 200,000 Floridians who have lost their homes to foreclosure since January 2007, including the more than 12,000 in Manatee, Sarasota and Charlotte counties.

Margery Golant, a member of the Florida Bar's Consumer Protection Law Committee, said that no one knows what the legal remedy would be for former homeowners who want their occupied houses back.

11/9/10

whitepaper

The Trustee’s Role in Asset-Backed Securities American Bankers Association, Corporate Trust Committee In this position paper, the Corporate Trust Committee is responding to current assertions that the obligations of trustees in asset-backed securities (ABS) are greater than the duties contractually undertaken by those trustees.
11/9/10

State needs a five-year moratorium on home foreclosures

Two days after the American people threw out the Democrats for their complicity in the trillion-dollar bailout of the fraudulent financial sector, the Federal Reserve adds insult to injury by announcing another $600 billion dollar gift that will give banks more free money for financial speculation.

Dan Leahy 

The News Tribune

A moratorium would allow for the judicious investigation of foreclosure fraud by the state’s attorney general so that those people who have purchased or want to purchase a foreclosed home can know with some assurance that the sale won’t be challenged in court.

Finally, a moratorium would give the citizens of Washington state time to reassess their economic position without having to worry about losing their homes.

The foreclosure crisis is deepening, and it’s not going away.

11/9/10

AG gets $1.7 million grant to fight mortgage fraud

Las Vegas Sun “Nevada’s standing as number one in home foreclosures in the nation has made us a ripe target for mortgage fraud scammers,” Attorney General Catherine Cortez Masto said today. “This grant money will assist my Mortgage Fraud Unit in investigating and prosecuting the more than 200 companies for which we’ve received complaints from Nevadans. These complaints average 50 per company and in some cases, they number into the hundreds.”
11/9/10

JPMorgan Faces Foreclosure Fraud Suits: Filing

 

Reuters The suits allege "common law fraud and misrepresentation, as well as violations of state consumer fraud statutes," JPMorgan said, adding to the chorus of major banks facing legal action after underwriting and securitizing mortgages.
11/9/10 Goldman Suspends Foreclosures in Some States: Filing 

The firm said it has not found evidence of any foreclosures that were unwarranted.  

(Then you aren't looking! MSF)

Reuters

Goldman also has been reviewing the practices of its Litton Loan Servicing unit after regulators and state attorneys general asked for information about its practices as part of an industry-wide probe into banks' foreclosure practices, the firm said.

 

Its mortgage servicing unit has "temporarily suspended evictions and foreclosure and real estate owned sales in a number of states, including those with judicial foreclosure procedures," Goldman said in the filing.

11/9/10

 

Some judges chastise banks over foreclosure paperwork

A year ago, Long Island Judge Jeffrey Spinner concluded that a mortgage company's paperwork in a foreclosure case was so flawed and its behavior in negotiations with the borrower so "repugnant" that he erased the family's $292,500 debt and gave the house back for free.

Ariana E unjung Cha
Washington Post
The judgment in favor of the homeowner, Diane Yano-Horoski, which is being appealed, has alarmed the nation's biggest lenders, who say it could establish a dramatic new legal precedent and roil the nation's foreclosure system.

It is not the only case that has big banks worried. Spinner and some of colleagues in the New York City area estimate they are dismissing 20 to 50 percent of foreclosure cases on the basis of sloppy or fraudulent paperwork filed by lenders.

11/8/10

Ohio GMAC Foreclosure Case May Set Anti-Wall Street Precedent Michael Riley

Bloomberg

Bucha and other Cuyahoga County judges said they fear document foreclosure defects may give former homeowners a claim on the title that will affect future sales. That scenario fuels Judge Russo’s sense of urgency to sort out problems now, she said.

“If courts around the country do not handle this on an individual case basis and there are later problems with the title, the courts will have participated with the clouding of the title,” Russo said. “The potential for harm is so immense at so many levels.”
11/8/10

Judge Upholds Award Against Goldman

If upheld, the award could raise the standard among banks for clearing trades.

SUSANNE CRAIG

New York Times

Goldman was ordered in June to pay $20.6 million to unsecured creditors of the failed hedge fund manager Bayou Group to settle claims that the bank had ignored signs of fraud at the fund.

Bayou collapsed in 2005, and the firm’s former chief executive, Samuel Israel III, is serving 20 years in prison for fraud. Mr. Israel pleaded guilty to misrepresenting the value of Bayou’s funds and defrauding clients out of more than $400 million.

11/8/10 Lenders Put the Lies in Liar's Loans, Part 1 William K. Black The nonprime lenders and brokers encouraged the mortgage fraud because they profited from it. The fraud produced more loans that they could sell at a profit to Fannie and Freddie. The officers controlling the nonprime lenders and brokers knew that a strategy of endemic fraud would make them wealthy and transfer the losses to the taxpayers.
11/8/10**

Legal depositions beginning around the country on foreclosure fraud

Includes links to the deposition from Crystal Moore of Nationwide Title Clearing. 

Kenneth Schortgen Jr

 Finance Examiner

As more and more banks, title companies, and financial institutions become exposed to the foreclosure fraud that has clogged our courts and put more than 19 million people out of their homes, insiders are coming out and providing information that shows how deep the rabbit hole goes in Foreclosuregate.

For anyone with a mortgage in trouble, or even a mortgage period, it is vital you understand the ramifications of how the banks have fraudulently used your contract to separate notes from titles as it will affect your ownership of property even when you pay off fully your debt obligation to a bank.  If they don't have legal ownership of the note, then it would be extremely difficult for you to receive title free and clear.

11/8/10**

Bair: Regulators Need More Data to Break Foreclosure Logjam

“This is a serious problem,” Bair said. “I see some serious issues with documentation.”

Meera Louis and Phil Mattingly Bloomberg The Dodd-Frank financial regulation law gave the FDIC new authority to create a mechanism for unwinding failed firms whose collapse might undermine the economy.

The evidence that banks gouged their own customers in multiple ways was obvious then and remains obvious now.

11/8/10**

Federal Regulators Asleep at the Switch on Foreclosure Fraud

As foreclosures began to mount across the country three years ago, a group of state bank regulators suspected that some borrowers might be losing their homes unnecessarily. 

So the state officials asked the biggest national banks for details about their foreclosure operations. J.P. Morgan Chase and Wells Fargo – declined to cooperate.

David Dayen nbsp;

FDL

But even as it closed the door on state oversight, the OCC chose itself not to scrutinize the foreclosure operations of the largest national banks, forgoing any examination of their procedures and paperwork. 

Instead, the agency relied on the banks’ in-house assessments. These provided no hint of the problems to come until they had tripped the nation’s housing market, agency officials later acknowledged.

11/8/10**

Ohio GMAC Foreclosure Case May Set Anti-Wall Street Precedent Michael Riley 

Bloomberg

Future Sales

Chief Magistrate Bucha and other Cuyahoga County judges said they fear document foreclosure defects may give former homeowners a claim on the title that will affect future sales. 

That scenario fuels Judge Russo’s sense of urgency to sort out problems now, she said. “If courts around the country do not handle this on an individual case basis and there are later problems with the title, the courts will have participated with the clouding of the title,” Russo said. “The potential for harm is so immense at so many levels.”

11/8/10 Ohio County Takes a Stance Against Robo-Signed Foreclosures Abigail Field

Daily Finance

Last month, the New York court system acted to protect its integrity by requiring banks filing foreclosure cases to submit special sworn statements aimed at eliminating robo-signing, the fraudulent practice of pretending to have reviewed and verified hundreds of legal documents a day. Now the judges in Cuyahoga County, Ohio, which includes Cleveland, are following suit.
11/8/10 BACK-OFFICE BLUES 

Why Banks Have Cut Corners On Foreclosures?

In the weeks since the scandal first erupted, other issues have appeared, calling into question the legitimacy of the way mortgages were packaged and sold, and raising the possibility that the banks might have to buy back piles of bad mortgages. Forecasts of “catastrophe,” “Armageddon,” and “apocalypse” have now become routine.

 James Surowiecki

The New Yorker

Up to now, it’s often been easier and cheaper for banks to foreclose, and mortgage servicers commonly make more in foreclosure than in modification. But being forced to follow the law before foreclosing, and having the threat of criminal investigation over their heads, may change that calculus. (More government pressure wouldn’t hurt, either.) The back-office crisis of the nineteen-sixties compelled Wall Street to do a better job of protecting and serving investors. It’d be fitting if Foreclosuregate ended up doing the same for homeowners.
11/7/10

Morgan Stanley Sued for Foreclosure Fraud

Jessica Pieklo Lawyer for the plaintiffs, Lawrence Friscia said of the financial services firm "Morgan Stanley suffers from a fundamental institutional breakdown uniformly harming its mortgage borrowers."  In its rush to acquire and repackage mortgages for sale Morgan Stanley completely ignored the potential for significant damage or its carelessness,  including wrongly ousting homeowners from their homes.
11/7/10**

FraudclosureGate- First Thing We Do, Kill All The Foreclosure Defense Lawyers (Then Throw The Deadbeats Into The Streets)

Attorney Matt Weidner "Has your client made his mortgage payment counselor? That’s all I’m concerned with.  If he hasn’t made his mortgage payment then I’m going to grant this Plaintiff summary judgment and the home will be sold."  

That’s the attitude of a great many judges in courtrooms across this state and probably the country.  The problem with this very simplistic view of the current foreclosure crisis is it completely ignores the much larger social, economic and legal aspects of the crisis and this, combined with ignoring long standing rules of procedure, evidence and case law, has created a dangerous environment where the very parties that created this crisis are being rewarded improperly (yet again) while normal everyday Americans are paying the price for their reckless and criminal behavior (yet again).

11/6/10 Mortgage giants Fannie & Freddie could cost U.S. plenty Ariana Eunjung Cha 

Washington Post

Fannie Mae and Freddie Mac, the mortgage firms operating under federal conservatorship, may cost taxpayers as much as $685 billion as the United States covers losses and overhauls the housing-finance system, Standard & Poor's said Thursday.

The government may spend another $405 billion to capitalize a replacement for the two companies, which own or insure more than half of the U.S. mortgage market.

11/6/10

Judge: Foreclosure cases starting to clog the system

"I'm very concerned about activity by some I read about that do go to the integrity of the system," said Judge J. Thomas McGrady, who heads the Pinellas-Pasco court system.


(The LACK of integrity is what clogged the system. MSF)

 

Kris Hundley 

TimesBay.com

Bank won't buy bad mortgages

Bank of America on Friday said it will not buy back bad mortgages from a series of high-profile investors who complained defaults are being handled improperly and homes not being foreclosed upon fast enough. The complaining investors include the Federal Reserve Bank of New York, Freddie Mac, Pimco Investment Management and Blackrock Financial Management. The Fed is involved because it took over assets held by AIG, which faltered under the weight of bad home loans. The New York Times reported that the mortgages pooled in the securities total about $47 billion. It is unclear what portion of those loans is in default.

11/6/10 Foreclosure Crisis, Part 2: Modifications JESSICA SILVER-GREENBERG

 WSJ

After J.P. Morgan Chase & Co. agreed in January to her trial loan modification under the Home Affordable Modification Program, Stephanie Lulko made six $767-a-month mortgage payments, even though the bank said it had no record of her loan and then warned in a letter that she would be foreclosed on unless she paid $4,091.94.
11/5/10

A KEY PLAYER IN THE FORECLOSURE FRAUD MORTGAGE CRISIS  (Meet Jo Ann Caudle) Absentcapacity This is reported per certified court report transcript., and by the way, this was a Bank of America foreclosure, and the original Note was SUBPOENAED - but not produced.
11/5/10

Financial Fraud in Germany, Deutsche Bank and the US Mortgage Scam

Assured Guaranty is asking a judge to force Deutsche Bank to repurchase the loans

marketoracle.co.uk The earlier filing of fraud charges against Wall Street banking titan Goldman Sachs by the US Government Securities and Exchange Commission (SEC) was only the tip of a huge fraud iceberg. Now a US mortgage insurer has charged one of the most aggressive banks involved in the US subprime mortgage scam of fraud. The bank is none other than Deutsche Bank. This case is also likely to be just the “tip of a very big iceberg.”
11/5/10 FORECLOSUREGATE COULD FORCE BANK NATIONALIZATION Ellen Brown, J.D.

Web of Debt

Players all down the line were able to game the system, suggesting there is something radically wrong not just with the players but with the system itself.  Would it be sufficient just to throw the culprits in jail?  And which culprits?  One reason there have been so few arrests to date is that “everyone was doing it.”  Virtually the whole securitized mortgage industry might have to be put behind bars.
11/5/10 NO WONDER SO FEW LOAN MODS BECOME PERMANENT.  THE SERVICER GETS 25% OF THE FORECLOSURE PROCEEDS. Reggie Middleton 

BoomBustBlog

The servicer gets to go after the mortgagor in a delinquency action. Please let it be known that this in know way alters the conflicting dynamic that allows for the servicer to push certain mortgagors into foreclosure vs. a mod work out. If you are self-employed and judgment proof, you are more likely to get a mod than if you are high income with a steady job with garnishable wages. The profits could very well keep rolling in.
11/5/10 Bank Of America: We Face Repurchase Lawsuits On $375 Billion Worth Of Mortgage Securities Joe Weisenthal 

Business Insider

Although the allegations vary by lawsuit, these cases generally allege that the offering documents for more than $375 billion of securities issued by hundreds of securitization trusts contained material misrepresentations and omissions.
11/5/10

Underwater mortgages drowning homeowners and the economy

Tampa Bay.com For almost two years, home foreclosures have swept the nation, spreading misery among once-buoyant families, spattering lenders with red ink and undermining efforts to restart the economy.
Part 1

11/4/10**

Let's Set the Record Straight on Bank of America: Open the Books!

- We argued that the FDIC should place Bank of America in receivership and the federal banking agencies should impose a moratorium on foreclosures until the mortgage servicers correct their systems, which currently often rely on massive fraud and perjury.

- We showed that outside studies by a wide range of parties showed massive fraud by the bank.

- Phyllis Caldwell, Treasury's housing rescue chief has testified, there is no proof that these banks have any legal title to the loans they are modifying and foreclosing

- Bank of America has admitted that HAMP's "implicit" purpose is to help the banks that made the fraudulent loans -- not the borrowers.

William Black, Randal Wrey Huffington Post

Bank of America says it is beset by deadbeat borrowers and it is distressed that it is criticized when it forecloses on their homes. Bank of America portrays itself as the victim of an ungrateful public.

REALLY?  Stealing homes you never owned?

 

 There can be no assurance that foreclosures are lawful until the banks actually find the mortgage "wet ink" notes signed by debtors to prove they are the true beneficial owner of the mortgage debts, which is required to seize property.

 

Dishonorable accounting fiction created perverse incentives for banks to do exactly what Bank of America has done -- let bad assets waste away and make already severe losses catastrophic.

Part 2

11/5/10**

Let's Set the Record Straight on Bank of America, Part 2: Eliminating Foreclosure Fraud

 

We will devote a future post to our proposals for dealing with the millions of homes that the fraudulent lenders induced borrowers to purchase even though they could not afford to repay the loans.

William Black, Randal Wrey Huffington Post Bank of America's response admits how massive its contribution to the shadow inventory has been. Mairone implies that the bank delays its foreclosures for years out of a desire to help homeowners, but common sense, and their own data show that the explanation that makes most sense is that the bank is hiding losses and maximizing the senior officers' bonuses by postponing the day that the bank is finally put into receivership.
11/4/10 America's Alarm Clock Has Rung: Time's Up Karl Denninger 

Market Ticker

If you, America, do not rise and stop this NOW, you're all going to be effectively dead economically. Your assets will be stripped. All of them. Your homes. Your businesses. Your savings - as if having the earnings you can receive on a safe CD cut from 5% to 0.5% isn't bad enough. And, when the inevitable margin collapse comes in the corporate sector, your stock portfolio will detonate again and your pension funds, Medicare, Medicaid and Social Security will be gone. 

Either you rise and stop Bernanke and The Fed, or he - and they - win - and we all lose.

11/4/10

Raleigh homeowner sues mortgage companies over eviction

Clerk of Superior Court Lorrin Freeman said that it became clear the companies did not notify Joy and misreported information to the clerk's office, so the court issued an immediate order to give Joy back his home.

WRAL Joy and his attorneys have filed a federal lawsuit, saying they have proof that employees of Nationwide Trustee Services and Litton Loan Servicing knew about the mistakes early and intentionally pushed forward with foreclosure anyway.
11/4/10 FANNIE MAE/FREDDIE MAC DISASTER WILL COST BAJILLIONS  

Keep in mind, the original BAIL-OUT was "originally" $250 Billion.

From a big picture perspective, it is totally irrelevant if a homeowner did not defend or file a pleading in a foreclosure case in which fraud was committed.  Our courts have a duty under the United States Constitution to prevent the kind of systemic abuses that have occurred from occurring and our courts have utterly failed in this regard.

Attorney Matt Weidner Lets just think about the Law Offices of David J. Stern for a moment.  The putrid mess of concocted and fabricated documents that have been spewing out of this office for years have now so thoroughly polluted record title ownership in Florida that it might literally be impossible to clear the titles that emanated from this firm.  What shall we do with all the foreclosure judgments and titles that are now of record in counties all across Florida?

What should homeowners do who are currently being foreclosed on by the once mighty? The mess that is DJSP is a mess that was a creation of Fannie and Freddie and it occurred under their watch and supervision.

In Re: The Wilson Case submitted by 

William A. Roper Jr.

The important thing to note about this transcript is Dory GOEBEL came into Federal Bankruptcy Court and perjured herself AGAIN in direct testimony before the Judge! 

That is what the ongoing perjury and sanction investigations are all about!

11/4/10

Fitch: Outlook Negative for U.S. RMBS Servicer Sector Based on Foreclosure Issues

BusinessWire Fitch Ratings has assigned a Negative Outlook for the entire U.S. Residential Mortgage Servicer ratings sector on increased concerns surrounding alleged procedural defects in the judicial foreclosure process.
11/4/10 

Lawsuit Claims Suspicious Signatures on Foreclosure Documents wsbtv Video Lawyer's signature was forged on foreclosure documents and notarized by a notary who was not a notary at the time. This story can be played out all across the country.
11/4/10

50-state foreclosure probe loses several influential voices after midterm elections

 

Also read posted comments

Ariana Eunjung Cha 

Washington Post

In Ohio, Attorney General Richard Cordray -- a Democrat who was the first to sue a major lender over the foreclosure problems -- lost to Republican Mike DeWine. "A campaign website for Mr. DeWine lists job creation and opposing the health-care plan as his top priorities and makes no obvious mention of the foreclosure scandal,
11/3/10 Florida foreclosures fraught with peril

“It’s a scary situation,” said Toronto realtor Wayne Levy. “I worry for people that have bought foreclosures.”

Joseph Loiero 

Terry Reith 

CBC News

"I'm here to tell you that absolutely 100 per cent there are going to be cases where people have purchased property and that title is no good."  - Florida real estate attorney Matt Weidner.
11/3/10

Being victim of fraud no reason to be ashamed

Yuma Sun The U.S. Attorney was in Yuma recently trying to get the message out that his office and the FBI — which has a mortgage fraud division — are interested in punishing the scammers, not their victims. The only way they can stop this scam and punish those who commit it is with the cooperation of victims willing to step forward
11/3/10

Bank of America Edges Closer to Tipping Point

Jonathan Weil 

Bloomberg

Bank of America’s management, led by Chief Executive Officer Brian Moynihan, has lost so much credibility with investors that the stock’s decline might start feeding on itself. The problem for anyone trying to analyze Bank of America’s $2.3 trillion balance sheet is that it’s largely impenetrable. Some portions, though, are so delusional that they invite laughter.
11/3/10 Three years after losing home, fraud victim waits for payment Cathy Locke 

Sacramento Bee

When he walked out of the Sacramento County courthouse nearly a year ago, Telesfor Lucero Jr. thought he'd won the battle. Three years after Lucero lost his North Highlands home through mortgage fraud, the man who defrauded him was ordered to pay restitution through the court'. Locero is still waiting.
11/3/10

Look-up

Mortgage Banking Licensee List - Servicers Only http://www.obre.state.il.us  
11/2/10

What we still don't know on Bank of America's foreclosures

Bank of America emphasizes that borrowers who are current on their loans aren't getting thrown out on their ear.  THAT IS A BLATANT LIE! MSF

Colin Barr 

Fortune

But there is a lot that Bank of America has not disclosed: It hasn't explained what changes it made. It has been vague about how many foreclosure files it has actually checked, how many and what sorts of mistakes it has found, and how long it might take to complete the process. It hasn't even addressed whether foreclosures thus far have been valid under the law. A letter last month from Ohio Attorney General Richard Cordray asserts that Bank of America cut corners in what "would appear to amount to a fraud upon our courts." Skeptics say the banks' apparent failure to heed state property law could become an albatross for Bank of America and its big rivals in the sagging U.S. mortgage market,
11/2/10** The Weekly Walk of Shame: Blaming "Deadbeat" Homeowners for Foreclosure Fraud  

This doesn't appear to be a mere "paperwork issue" – we seem to be dealing with bullying and lawbreaking.

Ilan Moscovitz 

Motley Fool

It's galling when Wall Street institutions that were bailed out by the public in 2008 feel they can rip off consumers and investors because they're above the law.

But sometimes we need laws, regulators, and courts to enforce contracts and protect individuals from corporate bullying. Illegally seizing property or seizing the wrong property, failing to live up to contractual obligations to investors, and lying in court is, yes, illegal -- even when Wall Street does it.

As the facts come out, they are painting a picture of institutional stupidity and greed by Wall Street. Again.

11/2/10 Freddie Mac Takes Loan Files From Florida Law Firm NICK TIMIRAOS 

WSJ

Freddie Mac has terminated its relationship with a top Florida foreclosure law firm and began taking possession of loan files on Monday afternoon from the firm, which processes evictions on behalf of the mortgage-finance giant. 

Freddie and its larger sibling, Fannie Mae, had previously suspended all foreclosures that had been referred to the law offices of David J. Stern.

11/1/10

Mo Attorney General gives   homeowners “tool kit” to fight foreclosure Missouri AG  Chris Koster's     Mortgage Foreclosure Toolbox Kevin Kileen

KMOX.com

Koster has compiled a “tool kit” of information on his website — including a form letter consumers can send to their bank demanding proof of proper paperwork for the foreclosure to proceed.

“I’m very interested to see how the banking community deals with this written request,” Koster said, “because it is not an insubstantial document.  It is making some serious requests for them to prove up what has become the central question of this mortgage crisis, as to who owns the mortgages that have been subdivided and sold at a pell mell pace through the bubble of the last decade.”

11/1/10 Mortgage "Modification" Failures Push Borrowers Into Foreclosure  

You can't modify something you do not own!  

The "Modification Program" was a scam that paid the mortgage industry more money on top of the bailout.  Many are finding the modification was actually a new loan.

Kathleen M. Howley, Dakin Campbell and Danielle Kucera Bloomberg Gray’s experience, in which homeowners get evicted while participating in programs designed to avert foreclosures, is being repeated thousands of times at the biggest mortgage firms, according to groups that aid borrowers. 

The government’s  Home Affordable Modification Program came under fire at hearings last week for “trial” arrangements that allow late fees and debts to stack up and documents to disappear, triggering seizures. 

“Many homeowners end up facing foreclosure solely on the basis of the arrears accumulated during a trial modification,” said Julia Gordon, senior policy counsel at the Center for Responsible Lending, in Oct. 27 Congressional testimony. “One incomplete payment or one accounting mistake can land you on an apparently unstoppable conveyor belt to eviction.
11/1/10 Dimon Beset by $75 Billion in Bad WaMu Loans as JPMorgan Pushes Overseas Dawn Kopecki 

  Bloomberg

A lot has gone wrong for Dimon since those halcyon days. Both the WaMu mortgages and JPMorgan’s own home-equity loans are spilling red ink. Dimon’s commodities-trading team, led by Blythe Masters, has suffered a big setback. Dimon complains that hundreds of millions of dollars in profits will be lost to the Obama administration’s new financial regulations, which he fought unsuccessfully to derail.
11/1/10 Lawmaker Questions Power to Foreclose

Mr. Ates said he is seeking to have all Georgia foreclosures by the company "be declared invalid and the title be returned to the debtor."

Robbie Whelan

WSJ

Christopher L. Peterson, a law professor at the University of Utah who has criticized the record-keeping company's business model in scholarly articles, says the foreclosure furor is a serious challenge to MERS because the documentation problems show the company is doing an end run around hundreds of years of American property law.
11/1/10

Attorneys ask courts to toss out foreclosure cases

Jamie Smith Hopkins 

The Baltimore Sun

The motions contend that failing to dismiss the cases "would further harm our housing recovery by allowing years and years of litigation concerning the title to properties."

"We have a huge title problem that needs to be solved," Robinson said. "The only way to clear title is to dismiss cases and make [mortgage servicers] do it the right way."

11/1/10 Sizing Up Foreclosures in D.C.   

Nickles takes notice, but stops short of taking action

Kriston Capps 

NBC Washington

With the rules enforcement -- which prevents banks from foreclosing on homes when their record-keeping is improper -- he has given homeowners who know to check their notices a powerful tool to defend themselves. The Service Employees International Union has launched a tool, www.wheresthenote.com, to help homeowners track down who in fact owns the note to their home.
11/1/10 Is Fraudclosure About To Claim Its First Victim:First Horizon Plunges After Subpoena Disclosed As FHFA Announces No Reserve Established Tyler Durden

 Zero Hedge

Investors in FHN are not very happy after it was just announced that the the bank has been subpoenaed by the FHFA, conservator for the GSE, in connection to ongoing probe; and further allegations that it may be unable to determine probable loss, and that no reserve was established. 
11/1/10

Bank of America Tries to Untangle Files

Includes Davet's exchange with Lewis during Bank of America's 2005 Shareholder meeting.

RUTH SIMON

DAN FITZPATRICK 

WSJ

Moynihan's statement that investors are complaining that "I bought a Vega but I want it to be a Mercedes" is patently false.  Investors thought they bought a Mercedes and later found it was a worthless rusty Vega. MSF
10/31/10** THOUSANDS OF LAWSUITS FILED SEEKING QUIET TITLE ON WRONGFULLY FORECLOSED HOMES

Alternate link

attorney Neil Garfield

LivingLies

Reports are streaming in from all over the country that some offices are filing volumes of wrongful foreclosure or quiet title actions on homes that were previously “sold” at auction on a “credit bid” that was as fraudulent as the foreclosure action that preceded the sale. 

The absence of responsive pleadings and defaults entered in favor of the homeowners (restoring them to their homes) indicates that the banks know their problems run far deeper than the perjury and robo-signing.

10/31/10** MORTGAGE MAYHEM AND MERS, HOT TUBS, AND THE FBI

Disgusting disclosures that our financial services industry and our foreclosure courts are corrupt and have perpetrated fraud on the American populace are everywhere.

Additional links included

Marilyn M. Barnewall WARNING: If you are thinking of buying a home that was financed between 2004 and the current time, BE VERY CAREFUL. It may be a home whose legal ownership is yet to be determined by the Courts. 

If the word MERS appears on the property lien… well, I don’t give investment advice – but I’d walk away from it. It wouldn’t be fun to buy a new home and be evicted six months later because the Courts decide that the MERS securitization process is illegal and the original owners (two owners ago, maybe) still own the property.

10/31/10 Interview of Attorney Dustin A. Zacks – Foreclosure Fraud Up at an All Time High    
10/31/10 One judge to hear all MERS-related cases in the state

This could be a disaster.

Christine Dunn

Journal Staff Writer
Judge Silverstein ruled that Rhode Island law “does not prohibit MERS from invoking the Statutory Power of Sale [foreclosure]” because “statutes should not be construed to reach an absurd result.” (And the absurd result would be allowing a non-party to foreclose. MSF)
10/31/10**

Must Read

Logical Fallacies And Foreclosuregate Karl Denninger

Market-Ticker

That we are still arguing over "everyone giving a bit" is an outrage.  This was quite-clearly intentional conduct since it continued beyond where these warnings were issued.  Since when do you get to rob people and say "oh, well, we'll share the loss"?
10/31/10

 

Lenders skirt foreclosure rules   

Local homes going on sheriff’s auction block despite problems!!!

At least 55 Franklin County homeowners will lose their houses at an auction Friday despite the fact that their foreclosure cases appear to contain mistakes, omissions of critical evidence or questionable affidavits, The Dispatch found in a review of court documents.

JILL RIEPENHOFF

 THE COLUMBUS DISPATCH

“The judge has a duty to make sure that everything’s in order,” he said. “Are these judges being diligent?” Issuing a default judgment without reviewing the original note is a clear-cut error, said Douglas Whaley, an Ohio State University law professor and expert on the Uniform Commercial Code, the law that governs promissory notes. “You cannot foreclose unless you have the original promissory note,” he said. “The law is clear.” For at least a dozen foreclosed homeowners whose lenders did not produce the note, it’s too late. On Friday, they will be former homeowners.
10/31/10 Debt Collectors Face a Hazard: Writer’s Cramp  

With a half-hour for lunch and two brief breaks, that’s roughly one affidavit every 13 seconds.

David Segal

NY Times

“I’ve lost four and I’ve taken about 5,000 cases,” said Jerry Jarzombek, a consumer lawyer in Fort Worth. “If the case goes to trial, I say to the judge, ‘Your honor, imagine if someone came in here to give eyewitness testimony in a traffic accident case and they didn’t actually see the crash. They just read about it somewhere. Well, this is the same thing.’ The debt buyers don’t know anything about the debt. They just read about it.
10/30/10** Kentucky Judge Chucks Foreclosure Judgment After Review Reveals That Named Mortgage Note Holder Does Not Exist Home Equity Theft Reporter (entire article) 

Charlotte and Thomas Sexton, of Carlisle, Ky., fell behind on their mortgage payments because the payments on their adjustable-rate mortgage spiked upward and Charlotte Sexton lost her job. They tried unsuccessfully to sell the home, to refinance it and to modify their mortgage payment.

When the Bank of New York Mellon filed a foreclosure notice last summer, they went to a local lawyer, Brian Canupp, who, with the help of a forensic accountant, found a problem in the foreclosure filing.

Last month, a judge tossed out a foreclosure judgment after Canupp argued that the mortgage trust that claimed to own the Sextons’ promissory note did not exist.

10/30/10** Foreclosure Fraud: Tough Issues With Which to Grapple

  Max says this one is not going away… it’s just too big to stuff back in any size bottle.

Mandelman Matters

What happens to the homeowner and the mortgage even if the mortgage was a total sham in numerous ways, and the bank didn’t handle important paperwork properly?

And more specifically, if the note was not assigned to the trust, can that trust foreclose on the property?  It would seem the answer to be clearly no.  But, then who should be allowed to foreclose, if not the trust?  The bank?  No, the bank has already been paid.  The originator has been long-since paid, as well.  So, if the note hasn’t been assigned the trust, and if the trust doesn’t allow late transfers, what happens next?

10/30/10** Ohio: No foreclosure 'do-over' for banks "Wells Fargo and any other banks are not simply allowed a 'do-over.'" UPI  Ohio Attorney General Richard Cordray said resubmitting affidavits on foreclosures would not help banks dodge responsibility on fraudulent paperwork.
10/30/10** Foreclosures Slow as Document Flaws Emerge  

If completed foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners.

“The way the plaintiffs’ lawyers have handled this has corrupted our legal system,” 

DAVID STREITFELD 

NY Times

Apparently alarmed about such a possibility, one of the major title insurance companies, Old Republic National Title, has sent a bulletin to agents saying that “until further notice” it would not insure title to properties foreclosed upon by GMAC Mortgage.
10/30/10** How the Banks Put the Economy Underwater  

The banks and other players in the securitization industry now seem to be looking to Congress to snap its fingers to make the whole problem go away, preferably with a law that relieves them of liability for their bad behavior. But any such legislative fiat would bulldoze regions of state laws on real estate and trusts, not to mention the Uniform Commercial Code.

Yves Smith  

NY Times

To assist foreclosure law firms in its network, a subsidiary of the company offered a menu of services. The list showed prices for “creating” — that is, conjuring from thin air — various documents that the trust owning the loan should already have on hand.

The firm even offered to create a “collateral file,” which contained all the documents needed to establish ownership of a particular real estate loan.

Equipped with a collateral file, you could likely persuade a court that you were entitled to foreclose on a house even if you had never owned the loan.

That there was even a market for such fabricated documents among the law firms involved in foreclosures shows just how hard it is going to be to fix the problems caused by the lapses of the mortgage boom.

No one would resort to such dubious behavior if there were an easier remedy.

10/30/10 Big Banks Told Not To 'Fix' A Fraud ROBBIE WHELAN 

WSJ

Mr. Cordray said the banks are trying to paper over fraud committed in foreclosures with temporary fixes that don't address underlying problems in the banks' practices. 

It is not acceptable for a party who believes they submitted false court documents to merely replace those documents. Wells Fargo and any other banks are not simply allowed a 'do-over,'" he wrote in the letter to Wells. 

The other letter was sent to Ohio judges, who were asked to notify Mr. Cordray when banks file substitute affidavits. He demanded that the banks vacate any court order or motion that was based on an improper paperwork

10/29/10

Interview of Attorney Dustin A. Zacks – Foreclosure Fraud Up at an All Time High

Great interview.

Prison Planet.TV We are all in very dire straits, it impacts not just the mortgage and real estate markets, but our entire economy.  How was it allowed to get this bad?  Where were all the smart people? 

(They were busy profiting from this scam. MSF)

10/29/10

Homeowners Get The Boot For Bad Paperwork While Banks Get Millions For Same

Caldwell's revelation about the possible wrongful disbursement of taxpayer money comes on the heels of multiple nationwide criminal and civil investigations emanating from mortgage companies' use of fraudulent paperwork to foreclose on homeowners.

"Evidence has mounted that there are substantive problems with the liens that support significant numbers of securitized mortgages," said Damon Silvers, 

Shahien Nasiripour

Huffington Post

During an oversight hearing, Phyllis Caldwell, Treasury's housing rescue chief, acknowledged during questioning that Treasury doesn't know whether mortgage companies and the owners of mortgages are receiving public money under "false pretenses." Treasury is investigating, she said.

(They are receiving public money under false pretenses and have been during the life of the program. It is disturbing to read Washington still doesn't have a clue how easily the mortgage industry again gamed the system to receive free money. MSF)

10/29/10 The Foreclosure Mess: It's Even Worse in 'Nonjudicial' States

 

ABIGAIL FIELD

 Daily Finance

An Addison, Texas, foreclosure attorney appears to be a major robo-signer in Dallas County, executing assignments of deeds of trust and substitutions of trustees for myriad entities he doesn't work for. According to the Dallas County Records

"Stephen Porter" from the firm Barrett, Daffin, Frappier, Turner and Engle...

has signed several thousand such assignments in that county alone. A New York judge has held that under New York law, assigning the right to foreclose to your clients -- -something you can presumably do only if the other entity is also your client -- -is a conflict of interest unless both clients sign off.

10/29/10

Is Foreclosure Scandal Overblown? Joe Nocera,

Andrew Ross Sorkin 

NY Times

The New York Times’s Joe Nocera and Andrew Ross Sorkin discuss the role of banks in foreclosures in this DealBook Debate video. Document problems in the foreclosure process have raised questions about the culpability of banks. Aside from legal concerns raised by this issue, there also may be a wider impact on the economy.
10/29/10 The States Take on Foreclosures  

Yeah, yeah, a handful of federal investigations have also been announced, but we all know that they’re not going to amount to a hill of beans

JOE NOCERA 

NY Times

The Treasury Department and the Federal Reserve have made it clear that they are more concerned about keeping the foreclosure mill going full speed than they are about determining whether the banks broke the law. Somehow throwing people out of their homes quickly is supposed to help the economy. Or so they keep telling us. 

Ah, but the states. They’re a different story. Soon after tales of robo-signing began making headlines, the state attorneys general mobilized their forces. Practically overnight, all 50 of them agreed to conduct a joint investigation into the bank practices that led to the scandal.

10/29/10

Child's death mired in nation's foreclosure crisis

Many claimed a pecuniary interest in the property until a tragedy occurred.  Then they scattered like roaches, just like they did when an Ohio boy died a few years ago. MSF

Tony Pugh

McClatchy Newspapers

The Dieudonnes' lawsuit hinges on a simple, but painful, question: Who is most liable for the boy's accident? 

Some of the 20 defendants, such as
American Home Mortgage Servicing Inc. and the property management firm Field Asset Services Inc., are claiming parental negligence in the case. Others, including JPMorgan Chase, say they had no ownership stake in the property when the accident occurred.
10/29/10 Wanted: More RoboSigners for LPS The Big Picture Primary Characteristics:
Provide temporary relief to the Document Execution team. Access various systems and print out supporting documentation necessary for the signing officer to review. Thus enabling them to attest to personal knowledge of loan status as specified within the documents related to Foreclosure and Bankruptcy process
10/29/10 Insurers Ease on Amnesty NICK TIMIRAOS 

WSJ

Title insurers have decided not to require lenders to provide a blanket shield from claims caused by flawed foreclosures after discussions around crafting an industry-wide agreement fell apart
10/28/10

I was a robo-signer "

I had no idea what I was signing," said Doan. Includes video of "the foreclosure that started it all."

Tami Luhby 

CNN Money

Doan said Bank of America's foreclosure operations were chaotic and stressful. There weren't enough people to do the job and they didn't receive the training needed to do it properly.

"With the volume coming in, we were getting inundated," he said, noting his workday often lasted from 7 a.m. to 8 p.m. "We were signing documents right and left."

10/28/10 Getting Medieval On Your Assets: Four Reasons Foreclosure Fraud Really, Really Matters Richard (RJ) Eskow

 Industry-News

The current debate over foreclosure fraud has been a revelation, even for those of us who have become familiar with the power of moneyed interests to influence the national dialog. Despite overwhelming evidence of widespread lawbreaking and deception, there’s still a popular point of view that says that fraudulent foreclosures are “just a technicality” and that what we’re seeing is neither a systemic problem nor a crime wave of epidemic proportions. Actually, it’s both
10/28/10**

Ohio's Cordray Interview on Wells Fargo, Foreclosures Bloomberg

Cordray: Wells Fargo and others have defrauded our courts.

10/28/10** Foreclosures: More Evidence of Bogus Paperwork  

State and Federal Regulators Focus on Company That Provided Paperwork for More Than 50 Lenders

 

For those like Beth Mackay who have lost their homes during the paperwork mess, questions of fairness and due process remain. 

John Blackstone 

CBS News

Instead the words "bogus assignee" fill the space where the lender's name should be. In foreclosure after foreclosure, the lender's address is listed only as x's, such as xxxxxxx. In some cases the documents identify the lender as "bad bene." 

"They have foreclosed in the name of 'bad bene,' for bad beneficiary," says attorney Robert Hager. 

Hager, who represents homeowners fighting foreclosure, says the paperwork also appears to bear bogus signatures. 

"This is how arrogant they are with regard to taking homes," he says. 
10/28/10

Obama: More Aggressive Anti-Foreclosure Efforts Would Help People Who Don't Deserve It

Huffington Post On Monday, a federal bailout watchdog reported that HAMP sometimes actually causes the foreclosures it's designed to prevent, as applicants "end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines." It's an allegation that had already been made by homeowner advocates.
10/28/10**

Flawed foreclosures 

Congressional Testimony on Foreclosure Mitigation and Mortgage Fraud

Just because the homeowner hasn’t paid his mortgage doesn’t mean anybody in the world can kick him out,” said Katherine Porter, a visiting law professor at Harvard. “The bank has to have the standing to do that.” She added that the bank’s argument was a little like saying that someone who committed a crime shouldn’t receive a trial because he’s so obviously guilty. …

The banks and servicing industry designed and implemented the practices that allow inaccurate and unfair foreclosure procedures to flourish, and it is entirely right that they should have to shoulder the cost, in both time and money, of designing and implementing improved procedures.

Mike Shedlock

FavStocks

The implications of problems with transfer are serious. If the trust does not have the loan, homeowners may have been making payments to the wrong party. If the trust does not have the note or mortgage, it may not have standing to foreclose or legal authority to negotiate a loan modification. To the extent that these transfers are being completed retroactively, it raises issues about honesty in creating and dating the assignments/transfers and about what parties can do, if anything, if an entity in the securitization chain, such as Lehman Brothers or New Century, is no longer in existence. Moreover, retroactive transfers may violate the terms of the trust, which often prohibit the addition of new assets, or may cause the trust to lose its REMIC status, a favorable treatment under the Internal Revenue Code. Chain of title problems have the potential to expose the banks to investor lawsuits and to hinder their legal authority to foreclose or even to do loss mitigation.
10/28/10

Foreclosure Frauds, Wells Fargo - the Fox in Charge, and Victimization

Barbara Ann Jackson

News Blaze

Thus, it is further understandable how thousands of Louisianans' homes have been illegally taken as judges signed orders allowing foreclosure mills to auction (sometimes simulated) peoples' homes - even when the mortgage lender (the PLAINTIFF) does not exist. Or, the mortgage "plaintiff" named in the foreclosure petition has no ownership whatsoever of the secured interest in the mortgage note - even when the homeowners dispute that's not their lender. To be specific, the foreclosure petition consists of a mortgage plaintiff that has NO STANDING. Such is an element of Louisiana's way. Such is what Wells Fargo and the above-listed miscreants have done in Louisiana for a long time - and such, as the facts show, goes unreported.
10/28/10** Who wants to watch 'Bank Bailout 2'?  

First, the documentation problems affect the rights of real people. Errors can lead to people being evicted from their homes when they aren’t behind on payments. Or foreclosure proceeds might be paid to the wrong bank — and then the bank that was actually owed the money hounds the dispossessed homeowner to pay again.

JONATHAN MACEY 

Politico

But this time, the bailout will be more subtle because the regulators don’t have to come up with cash. They just have to persuade a few judges to bend the rules a little bit while the banks foreclose on people’s homes. 

In the crisis this time, regulators have a stark choice. They must decide whether to bend — and sometimes break — a few laws so banks can cover their loan losses by foreclosing on mortgages with faulty or nonexistent documentation or to enforce centuries-old real estate laws and force banks to live by the rules.

10/28/10**

American Home Mortgage Faces Servicing Lawsuits

David McLaughlin

Bloomberg

The lawsuit, filed Oct. 25 in federal court in Dallas, seeks class-action status on behalf of homeowners with mortgages serviced by American Home going back to 2006. American Home’sillegal, unfair and deceptive business practices victimize borrowers” across the U.S., according to the complaint.
10/28/10**

News Release

Ohio AG Cordray Outlines Fraud in Cleveland Foreclosure Case

 

The Attorney General's Brief  

GMAC’s motion to withdraw and Judge Russo’s ruling.

Ohio Attorney General

News Release

“Judges rely upon the accuracy of affidavits to grant judgments and ensure that the integrity of the judicial system can be trusted,” said Cordray. “False affidavits throw the entire system into question. Foreclosures should not move forward when the basis of evidence is perjured statements.”

This foreclosure case, U.S. Bank National Association v. James W. Renfro, was one of a handful of cases in which GMAC willingly filed a motion to withdraw. However, on October 25, Judge Nancy Margaret Russo denied the motion and ordered GMAC to provide the court with “proof of integrity of all documents submitted” at a pretrial set for November 8.  To inform the court of evidence of affidavit tampering, Cordray filed an amicus brief.

10/27/10** Banks `Want to Sit Down' With States to Discuss Foreclosures to find out how they can continue getting away with stealing homes they do not own.  

Foreclosures done improperly have to be corrected. It’s not permissible to violate state law to expedite a foreclosure.” said Washington State AG

Cordray yesterday filed a friend-of-the-court brief in another case arguing that an Ohio court can vacate a foreclosure because of affidavit irregularities. Start with the Davet case!

Margaret Cronin Fisk  

Bloomberg

Some homeowners who sought modifications weren’t offered revised payments, ended with the same or higher payments, or were foreclosed on during the process, according to these complaints. 

(You can't modify loans you do not own. MSF) “

Litton Loan Servicing has been and continues to be responsive to the requests by the state attorneys general,” Donna Marie Jendritza, spokeswoman for the Houston-based company said- after Litton has been stealing homes for more than a decade. 

10/27/10

 

Hearing on the TARP Foreclosure Mitigation Program

I have been conducting research on problems with mortgage servicing practices since 2005. 
My testimony focuses on how the allegations of legal errors in the foreclosure process may impact the housing markets, the soundness of banks, and the overall financial markets. I describe the legal and economic issues involved in impermissible or flawed foreclosures and then set out the possible responses to such wrongdoing.

It is very likely that there are thousands, and possibly hundreds of thousands, of families who already have lost their homes were deprived of procedural or substantive rights.

Senate Testimony of Professor Katherine Porter Specifically, I consider the ways in which systemic foreclosure problems may set off extensive and complex litigation, destabilize the housing market, and result in regulatory interventions. I believe that the foreclosure process lacks integrity in an unacceptable number of ways and instances and that these problems undermine foreclosure mitigation efforts. 

Despite the proclamation of James Dimon, President of JP Morgan 
Chase
that no one has been “evicted out a home who shouldn’t have been,” there seems to be near universal agreement that at least some homeowners have lost their homes without adherence to legal procedures, that the validity of many pending foreclosures is in question, 
and that servicers may face much more extensive examination of their grounds for future foreclosures. 

10/27/10** Investigators find negligence, fraud in foreclosure fiasco.

Judges have pledged they will not approve eviction notices unless documents include the original note.

Nowt News The most serious criminal charges will arise from questions about “the notes” in at least 60,000 foreclosure files. The note is the simplest and by far the most important document in a mortgage package, because it pledges the property as collateral for the mortgage, and it authorizes the note-holder to take possession of the property in the event of default. 

In these sixty-thousand or more cases, the original note either is missing or an affidavit of its digitized existence substitutes for it.

 

10/27/10

MERS Fraud Impact On CMBS: Up To $280 Billion Per Barclays

Two weeks ago we first touched upon a key tangential topic of the whole mortgage mess, namely the implication of what potential MERS fraud means for Commercial Mortgage Backed Securities. Well, the topic which has so far avoided broad media attention to the benefit of all CMBS holders may be about to go mainstream. 

Tyler Durden As part of our initial inquiry, we asked: "If residential mortgage foreclosures are being halted and if the very fabric of the MBS securitization architecture is put into question, when will someone ask whether MERS® Commercial allowed such pervasive title fraud as is now apparently ubiquitous in the residential space, to take the CMBS space by storm, and how many billions in dollars will Banc of America Securities, Bear Stearns (d/b/a JP Morgan), GE Capital Real Estate, GMAC Commercial, John Hancock and Wells Fargo be forced to buy back loans that were fraudulently certified."

10/27/10**

Homeowners Facing Foreclosure Demand Recourse

When she called Litton, an employee admitted that the company had made a mistake in changing the locks, according to court documents. In order to reimburse her for her losses, Ms. Robison said, the employee told her he would “work something out” regarding her January mortgage payment, so she did not make it, court records show.  

But when Ms. Robison paid her February and March mortgage payments, they were returned.

ANDREW MARTIN 

 MOTOKO RICH 

NY Times

And in March, Deutsche Bank initiated foreclosure proceedings. “I’ve been wanting to pay them the whole time, but they basically stopped taking my payments,” she said. Deutsche has asserted its right to Ms. Robison’s house under a document that is meant to assign ownership of a mortgage note, known as an allonge

But Ms. Robison’s lawyer, Stephen Brunette, says Deutsche Bank is not named in the allonge that the bank submitted during court proceedings and does not appear on any other documents relating to her home.

10/27/10 Lifestyles of the Rich & Famous: 

FauxClosure Edition  

“We’re pretty disturbed about this trend,” he said. “We can do something here.”

Robbie Whelan

WSJ

Few people paid attention to such breaches when the economy was good and home prices were rising. Now that defaults are rampant and bondholders are feeling the pain of steep losses, sloppy loan originations are a smart way for investors to assert their rights, Mr. Grais said
10/27/10 Litigious mortgage owners face big fight: lawyer Reuters Some 45 percent of the mortgages in securities from 2005 to 2007 likely breached the assurances of loan attributes or quality. (Try 90%. MSF)
10/27/10

Treasury: Foreclosure woes not systemic threat

David Lawder 

Reuters

The U.S. Treasury does not see a systemic financial threat from the risk that banks will be forced to buy back mortgage securities due to faulty foreclosure documents, a senior Treasury official said on Wednesday. (Then FIRE THEM!)
10/27/10 TAXPAYERS WIN BIG IF FORECLOSURES ARE HALTED  

The ONLY reason why the people would not voluntarily resign the paperwork, or be forced to comply in a court of law, is that the deal was a fraud. There is no other reason. If there was fraud, the government guarantees areinvalid and the government is entitled to money back (As the Federal Reserve and the MBS investors have figured out after consulting with hundreds of lawyers).  

LivingLies

They want us to believe that taxpayers would be the big losers if foreclosures stopped. Not true. (Foreclosures would ONLY be stopped if there were fatal legal flaws in the mortgages. )If that were true, then proceeding with foreclosures would create a title catastrophe for this country further pushing us into the category of a banana republic. If the flaws are in fact there, and if they are fatal because they cannot be corrected, it can only be the result of fraud. Because if the deal were real, you could get all the people involved back in the room and get the paperwork right by signing new documents if there was not fraud.

10/27/10 Georgia's no-trial foreclosures mask problems, critics say

“Every homeowner is entitled to due process,” Rothbloom said. “If (accused) criminals are guilty, why do we need to try them?”

J. Scott Trubey
The Atlanta Journal-Constitution
Attorney David Ates last week sued the Mortgage Electronic Registration Systems, or MERS, a bank-owned mortgage database, saying foreclosures it has conducted are invalid under Georgia law. The suit seeks class-action status.
10/27/10

U.S. lawyer forms foreclosure resistance movement

Joe Rauch 

Reuters

Once lawyers exit his training program, they stay on his expanding e-mail list, and are allowed access to an online document repository to share information. They work together to come up with new ways to slow down foreclosures and share strategies on other bankruptcy issues, communicating at a rate of 350 messages a day.
10/27/10

Wells Fargo Will File More Foreclosure Affidavits After Lapses

Donal Griffin 

Dakin Campbell 

Bloomberg

The bank, which has proceeded with home seizures while rivals including Bank of America Corp. and JPMorgan Chase & Co. delayed theirs, said yesterday in a statement that it found some lapses during a review of its processes. The lender will begin filings immediately in 23 states and aims to complete them by mid-November, subject to local laws, according to the statement.
10/27/10 Wells Fargo to amend some foreclosures Reuters Wells Fargo & Co said on Wednesday it planned to submit additional affidavits on 55,000 on-going foreclosures in 23 states, after finding instances where the company's foreclosure documents did not adhere to its established procedures... (in the event we get caught. MSF)
10/26/10

Why The Banks MUST NOT Get Away With This

Karl Denninger There’s only one way to prevent this from happening, and that is for the law to be actually enforced against these jackals.  You filed 102,000 perjured documents?  Right over here into the dock you go – you’re going to prison – after a public and fair trial, of course (if the jury is full of people who got foreclosed on due to your “errors”, well that’s just gonna suck, isn’t it?)  You intentionally concealed fraud in the inducement in the loan?  Over here with that other guy.  You sold an “empty box” MBS to investors, or those that ridiculously violated the claims you made for loan quality?  Over there…. “

Heh Jack; we’re gonna need a bigger holding cell!”.. (Yes Karl, we will. MSF)/font>

10/26/10

Bill Black On Foreclosuregate: Calls For The Immediate Termination Of Bernanke, Geithner And Holder

This stems from the underlying fraud by the lenders in mortgage loans to the tune of well over a million cases a year by 2005.

Tyler Durden 

Zero Hedge

Black points out the glaringly obvious, that the Fed should not be in charge of any investigation into mortgage fraud, due to its “massive” conflict of interest, to the tune of $1.5 trillion in MBS/agencies held on the Fed’s books, which would be immediately null and voided if rampant MBS fraud is indeed uncovered.

America has proven it has failed as a society in which checks and balances work when Wall Street dangles billion dollar bribes to corrupt and greedy individuals

10/26/10

AG seeks data on evictions Harmon Law Offices faces investigation over rules protecting tenants.  This is the law firm that victimized the  Fairbanks /b> homeowners many years ago. Jennifer McKim

Boston Globe

Coakley said her office also is looking into allegations that Harmon Law disregarded a court order requiring it to notify the state before foreclosing on homes with mortgages originated by subprime lender Fremont Investment & Loan.
10/26/10

Surprise! Congress Sides With Banks and Robo-Signers

When Will Congress Speak For the People and Not the Special Interests?

Terry Smiljanich 

Consumer Warning Network

Then, when major news outlets began publicizing the “robo-signers’ issue and banks were “shocked, truly shocked” to discover that their foreclosure procedures were less than optimal, the new law became suddenly homeless. President Obama decided to veto the Act (through pocket veto procedures, i.e., he simply failed to sign the Act within the mandatory period), and Senator Leahy suddenly decided that the President had done the right thing.  (Forget all that other stuff Leahy did earlier, at least he’d like you to.)
10/26/10

Investigators find negligence, fraud in foreclosure fiasco.

Nowt News The most serious criminal charges will arise from questions about “the notes” in at least 60,000 foreclosure files. The note is the simplest and by far the most important document in a mortgage package, because it pledges the property as collateral for the mortgage, and it authorizes the note-holder to take possession of the property in the event of default. In these sixty-thousand or more cases, the original note either is missing or an affidavit of its digitized existence substitutes for it
10/26/10

Lawsuits accuse lenders of sabotaging mortgage modifications E. Scott Reckard, 

Los Angeles Times

Jean C. Wilcox of Irvine has sued EMC Mortgage Corp., accusing it of stringing her along for three years while making several offers to modify her nearly $800,000 loan, losing documents repeatedly and never intending to permanently change the terms of the mortgage. An EMC spokesman declined to comment.
10/26/10

5-Part Series:

ForeclosureGate: Not just bungled paperwork, it is FRAUD 

blogforarizona All 50 states are investigating foreclosure paperwork, evicted homeowners are hiring lawyers and buyers of foreclosed homes are fretting over the legality of their purchases. 

Last week, New York's top judge, Jonathan Lippman, began requiring all bank lawyers to sign a form vouching for the accuracy of their foreclosure paperwork.

10/26/10 Texas AG asks lenders and servicers to halt all sales of properties previously foreclosed upon and stop all evictions. Margaret Cronin Fisk

 Bloomberg

Bank of America Corp., JPMorgan Chase & Co. and seven other banks or loan servicers were subpoenaed by Texas Attorney General Greg Abbott for information about their foreclosure practices, a spokesman said.
10/26/10 Title problems – the media is catching on

This is all coming crashing down, folks.  

Stopa Law Firm Meanwhile, Fidelity National is denying problems with title policies.  But what do you expect them to say?  “Yes, we have hundreds of thousands of title policies out there for which we have exposure – come sue us.  And those of you who own our stock – sell it because the value is going to plummet.”  When Fidelity is denying the problem, you know there’s a problem.
10/26/10

Economist Joseph Stiglitz: 

Put Corporate Criminals in Jail

Sam Gustin

Daily Finance

An institutionalized system of skewed incentives allowed Wall Street bankers and other corporate executives to gamble with America's wealth and then get away largely scot-free after the house of cards came tumbling down, plunging the U.S. into the worst economic crisis in decades and destroying trillions of dollars of wealth worldwide.
10/26/10

Warning signs of foreclosure crisis were ignored, says FDIC Chairman Sheila Bair

Zachary A. Goldfarb 

 Washington Post

Sheila C. Bair, chairman of the Federal Deposit Insurance Corp., said Monday that federal officials should have recognized "warning signs" in recent years that the mortgage industry was cutting corners in the foreclosure process.
10/26/10

Fannie Mae Halts Law Firm's Foreclosure Work

NICK TIMIRAOS 

WSJ

The law firm of David J. Stern has been at the center of allegations by the Florida attorney general's office, which has released depositions of former law-firm employees who have alleged that the firm forged notarized documents and that employees signed files without reviewing them in a bid to speed through foreclosure filings
10/26/10

How Did the Banks Get Away With Pledging Mortgages to Multiple Buyers?

nakedcapitalism

Professor Black told me:

Double pledges (as they’re typically called, though one could pledge multiple times) are a well known fraud device. It is correct that one of the key purposes of adopting Article 9 of the Uniform Commercial Code (UCC) was to reduce the risk and frequency of this form of fraud. So, double pledges in the modern era require both (A) fraud (on the part of the borrower or purchaser) and incompetence, indifference, or corruption on the part of the original secured lender or their agents if the borrower is the fraudster or the purchasers if they are the fraudsters.

10/26/10   The Mortgage Morass

The mortgage mess just keeps getting messier.

NY Times The immediate issue is robo-signing, in which employees at Bank of America, JPMorgan Chase and other banks falsely attested to having verified the facts in what may turn out to be hundreds of thousands, or more, court foreclosure filings. That has brought to light other problems, including crucial documents that have been lost or improperly transferred — raising questions about the banks’ legal standing to foreclose as well as the value of securities backed by these mortgages.
10/26/10

Indiana Couple File Federal Robosigner Suit Seeking Class Action Status; Allege Violations Of RICO, Debt Collection Statutes homeequitytheftreporter The case comes as the smoldering foreclosure issue threatens to erupt into a national crisis for the mortgage industry.
10/26/10

Bank of America, JPMorgan Get Texas Subpoenas on Foreclosures

Abbott asked lenders and servicers to halt all sales of properties previously foreclosed upon and stop all evictions.

Margaret Cronin Fisk 

Dakin Campbell 

Bloomberg

The Texas subpoenas followed letters sent by Abbott’s office to 30 loan servicers on Oct. 4, asking them to halt foreclosures in the state pending a review of their practices.
10/25/10

Capacity- A Simple Question At The Heart of Every Foreclosure Suit Attorney Matt Weidner

Bank of America is reported as saying they’ve reviewed all their files and they have not found any significant problems at all….that’s a statement so absurd it defies commentary.  Apparently all my clients and every Realtor who will tell you that Bank of America is the absolute worst to deal with are totally wrong.

Denial is a very, very dangerous defense mechanism.

10/25/10

Bernanke Looking at Foreclosure Processes' Role in Housing Market Meltdown

Bernanke said "We take violation of proper procedures seriously,

AP Bernanke's remarks come as attorneys general in all 50 states plus the District of Columbia are jointly investigating whether mortgage companies improperly evicted people from their homes. They are looking into whether paperwork and legal procedures were handled properly.
10/25/10 Bank of America Faces More Foreclosure Headwinds Dave Kansas

WSJ

Bank of America will be among the stocks to watch this morning after it admitted to some document errors in the mortgage foreclosure crisis. As Dan Fitzpatrick points out in his Journal story, “the bank uncovered these mistakes while preparing less than 1% of the first foreclosure files that it intends to resubmit to the courts in 23 states.” In other words, could just be tip o’ the iceberg.

Wells Fargo could also be in some hot water.

10/25/10

Keynote Address by FDIC Chairman Sheila C. Bair to the "Mortgages and the Future of Housing Finance" Sheila Bair 

FDIC

The financial reforms that grew out of the Great Depression created government institutions that supported financial stability and the availability of mortgage credit for decades after they were established. But the recent crisis in mortgage finance has revealed critical flaws in our system that compel us to make far-reaching institutional changes that will determine the shape of our financial sector for decades to come.
10/25/10

A European Lynch Mob Is Coming For Bank of America

MATT SCHIFRIN The latest ugly news for Bank of America is actually coming from Europe, where big institutional money managers and other mortgage securities buyers are now beginning to organize for an assault. 
10/25/10

Sarbanes-Oxley May Lead to "Robo-Signing" Suits

The housing crisis may now get as personal for bank executives as it has for individual homeowners.

"There might have been a breakdown in procedures, but there was not an intent to proceed or to foreclose on borrowers," Platt of K&L Gates said. (That is a flat out lie!!!)

Insurance News Net As the foreclosure document scandal reaches the "material weakness" level for the largest banks, attorneys representing foreclosed borrowers want to hold servicing executives personally liable for overseeing processes such as robo-signing, in which some employees rubber-stamped foreclosure affidavits without verifying the information.

The agreements make it a federal crime to provide false or misleading information to Fannie Mae or Freddie Mac.

Some mortgage experts and lawyers say servicers now face the risk of lawsuits brought under the False Claims Act if they certified that their own internal servicing processes were in compliance with applicable law.

10/25/10

U.S. probing foreclosure processing firms Ariana Eunjung Cha 

Washington Post

Law enforcement authorities on both state and federal levels are probing whether individuals at these foreclosure companies and at the banks that hired them committed an array of possible crimes - mail and wire fraud, money laundering, conspiracy and racketeering. No charges have been filed.
10/25/10

Assured Guaranty Sues Deutsche Bank Over Mortgages

Shannon D. Harrington  

Karen Freifeld 

Bloomberg

A unit of Assured Guaranty Ltd. sued affiliates of Deutsche Bank AG over $312 million of mortgage- backed securities that the bond insurer guaranteed and says were “plagued by rampant fraud and misrepresentations.”
10/25/10 What's the New York State of Mind for Foreclosures Now?

ABIGAIL FIELD

 Daily Finance

Linda Tirelli, a consumer bankruptcy lawyer, praised Judge Lippman's rule:

"I am very proud that New York is taking the lead in recognizing that the integrity of our court system must be maintained. Property rights are held in high regard in our country and not to be fooled with. Holding attorneys responsible for what they submit as officers of the court is one step in the right direction towards sanitizing the foreclosure "business" currently overwrought with fraud and to restoring the nobility of our profession."

10/25/10

Mortgage Lenders Say `Enough Is Enough' as Buybacks Spur Tighter Standards

Jody Shenn 

Bloomberg

Home lenders are making it tougher to get loans as investors step up demands for refunds on defective mortgages, damaging the housing market, executives said today at an industry conference.
10/24/10 Foreclosures in Texas – Options and Answers for Homeowners Robert Doggett

Texas Rio Grande Legal Aide

10/24/10

Blinded by Greed:

Goldman's mortgage bets bite back hard

Purchase of Litton Loan one of several missteps now haunting firm.

Aaron Elstein

CrainsNewYork

In late 2007, as the nation's subprime crisis began evolving into something much worse, Goldman Sachs saw an opportunity to make money. For $428 million, it snapped up Litton Loan Servicing, one of the largest companies handling monthly mortgage payments from consumers with poor credit histories—and foreclosing on them if necessary.

Today, Litton is probably one acquisition that Goldman wishes it hadn't made.

“It was a fur-lined trap,” says Sanford C. Bernstein & Co. analyst Brad Hintz. “It looked comfortable going in, but you can't easily get out.”

10/24/10

Bank of America finds foreclosure mistakes: report

The bank has not found any evidence of wrongful foreclosures.  YOU ARE NOT LOOKING!!!

Reuters All 50 U.S. states have started a joint investigation of the mortgage industry, focusing on allegations that, for years, banks have not reviewed documents properly or have submitted false statements to evict delinquent borrowers.

The problems included improper paperwork, lack of signatures and missing files, as well as cases in which information about the property and payment history being unmatched.

10/24/10**

Foreclose on the Foreclosure Fraudsters, Part 2: Spurious Arguments Against Holding the Fraudsters Accountable

It was quite convenient to "misplace" mortgage payments, so even homeowners who were never delinquent could get hit with fees and higher rates.

We suggest an immediate moratorium on foreclosures and a requirement that all notes be produced by purported holders of mortgages within a reasonable length of time. If they cannot be found, the mortgages -- as well as the securities that pool them -- are no longer valid. That means that the homeowners are not indebted, and that the homes are owned free and clear. And that, dear bankers, is a big, big problem. It is also the law -- without evidence of debt, there is no debtor and no creditor.

William Black, Randal Wrey Huffington Post Next, a few judges began to question the foreclosures, as they saw case after case in which the banks claimed to have lost the paperwork or submitted amateurishly forged documents. Or, several banks would go after the same homeowner, each claiming to hold the same mortgage (Bear Stearns sold the same mortgage over and over). Insiders began to offer depositions exposing fraud and perjury. It became apparent that in many and perhaps most cases, the trusts responsible for the securities (often these are "special purpose" subsidiaries of the banks) never received the "notes" signed by the borrowers -- as required by both IRS tax code and by 45 of the US states. Without the notes, billions of dollars of back taxes could be due, and the foreclosures violate state law

These entities committed tens of thousands and even millions of frauds each.

10/24/10 Foreclosure-gate’ adds uncertainty 

The Thomases are challenging all the foreclosures in court, even in cases in which the properties have been sold to someone else.

Christine Dunn

 Journal Staff Writer

Babcock said even though Rhode Island is a “nonjudicial” foreclosure state, the law requires lenders to file affidavits when they record foreclosure deeds to assert that they followed state law.
10/24/10

Bank of America Sued in Class Action Over Flouting of Foreclosure Rules

the Complaint

Law.com "Many thousands of foreclosures are plainly void under statute and settled New Jersey case law. Many borrowers never obtain statutorily required notices, and many foreclosure suits are filed entirely based in inaccurate recitations concerning ownership of the mortgage, the note, or the assignment," the suit says.
Conti-Financial, Fairbanks Capital/SPS

CFN LIQUIDATING TRUST

NOTICE TO PARTIES NEEDING ASSIGNMENTS AND SATISFACTIONS OF MORTGAGE

INFORMATION FOR HOLDERS OF A BENEFICIAL INTEREST IN THE CFN LIQUIDATING TRUST

sfntrust

The link is to the SFN liquidating trust that discloses 40,000 boxes were destroyed with permission from the bankruptcy judge. 

In there, SPS buys the servicing from the court on a dead company! The loans were paid off! 

Are you still paying?

10/24/10 Foreclosures spawn new attitude to ownership Financial Times Whether more of the millions of homeowners now facing “negative equity” decide to follow the path of Jeff and Shasta is making plenty of banks, regulators and investors very nervous. More defaults, especially by people still making monthly interest payments, increases losses for banks and the investors owning billions of dollars of securities backed by mortgage payments.
10/23/10 One Mess That Can’t Be Papered Over 

“The whole essence of this crisis is fraud and unless we restore the rule of law and transparency of disclosure, we are not going to fix this,” said Laurence J. Kotlikoff, economics professor at Boston University.

Gretchen Morgenson 

NY Times

For example, according to a court filing last year by the Florida Bankers Association:

[ i]t was routine practice among its members to destroy the original note underlying a property when it was converted to an electronic file. This was done “to avoid confusion,” the association said.

But because most securitizations state that a complete loan file must contain the original note, some trust experts wonder whether an electronic image would satisfy that requirement.

10/23/10 ProcessServiceFraudGate: The Next Chapter in ForeclosureFraudGate.

 

JUDGMENTS BASED ON FRAUDULENT SERVICE ARE VOID

Attorney Matt Weidner

The requirements  to become a process server are defined in Florida Statutes, but here’s the bombshell.

THERE IS SO MUCH BAD SERVICE OF PROCESS FLOATING ACROSS THIS STATE THAT IT’S GOING TO MAKE THE ROBOSIGNER CONTROVERSY SEEM SMALL

10/23/10

GEORGIA CLASS ACTION | ROLLINS v. MERS, MERSCORP

 

Includes Complaint

STOPForeclosureFraud The Plaintiff shows herein that MERS’ foreclosure on Plaintiff’s property was not valid and was wrongful, as are those foreclosures by MERS on the property in the State of Georgia of all similarly situated persons to the Plaintiff wherein MERS sent the notice of foreclosure to the debtor and wherein MERS purports to have exercised the power of sale and auctioned the property. MERS does not have the authorized power to send a valid notice of foreclosure within the State of Georgia for those deeds where it is “solely a nominee” and does not have the authority or power under Georgia law to foreclose on a property or engage in an auction of sale on such property where is is “solely a nominee” on such deeds.

10/23/10

Foreclosure crisis will cost $10 trillion

All I can say is that we're dealing with crooks at the FBI and crooks at the MBA.

You can see why there were thousands of criminal referrals in the savings and loan crisis, but ZERO criminal referrals in the current crisis, as Black says.

 Generational
Dynamics
As I've been saying for years, the circumstantial evidence indicates that there must have been massive fraud by banks. The banksters who created structured securities that became "toxic assets" are claiming that they didn't know that real estate prices would ever fall. Well, that excuse may be valid for the years 2002-2005, and part of 2006, but by then it was clear that the real estate bubble was bursting, and there was at least reasonable doubt that the computerized models were wrong. But instead of warning investors of these doubts, the banksters redoubled their efforts in 2007 to sell as much as possible before the game was up.
10/23/10

Explaining Judge Rondolino’s Order – a case study on the issues we face

 

 Order of Dismissal

Mark Stopa, Esq. If you’ve ever wondered what “foreclosure fraud” is all about or how a homeowner could possibly have legitimate defenses to a foreclosure lawsuit, take a close look at the Order of Dismissal from Judge Rondolino. 

The Plaintiff in this case is Deutsche Bank National Trust Company, as Trustee Under the Pooling and Servicing Agreement Dated as of May 1, 2001.  However, the Note and Mortgage attached to the Complaint are in the name of Maxwell Mortgage, Inc.

10/23/10 Homeowner who was foreclosed on after never missing a single payment…how can that happen?

People are losing their homes when they never miss a single payment.

Law Offices of 

Rusty K. Reinoehl

A month later, he was served with an Unlawful Detainer action. This is an action for eviction filed by whoever purchased the home at the foreclosure sale, in this case, Fannie Mae. Shortly after being served with the Summons to appear by the Sheriff, in fact, on the same day, he receives in the mail a Motion to Voluntarily Dismiss the Unlawful Detainer without prejudice. The lender had just all of a sudden decided to dismiss, but he did not know why.
10/22/10

Kentucky County Court Order Impacts Foreclosure Complaint Filings

You have to actually prove ownership now.  What a novel idea. 

DSnews

Kenton County, Kentucky, which has the third highest volume of foreclosures in the state, has enacted a general order impacting the filing of all foreclosure complaints in its courts.

Recent foreclosure paperwork errors at several major servicers nationwide prompted the move.

10/22/10 Homeowners Win Fights Over Mistaken Foreclosures Dawn Wotapka 

WSJ

In August of last year, they applied for and were granted a loan modification from J.P. Morgan Chase, which services the mortgage. Since then, Ms. Cervantes says they never missed the $659.30 payment. Then, last Saturday, the couple received a letter saying Chase foreclosed and the condo was sold online.
10/22/10

Economist Joseph Stiglitz:

Put Corporate Criminals in Jail

Sam Gustin

Daily Finance

Taken together, Stigliz said, this system of widespread fraud, lax regulation and non-deterrent enforcement, created a system of skewed incentives that rewarded criminality, gambling and other bad behavior, and left American workers, investors and homeowners holding the bill.
10/22/10** Fraud in foreclosure Fraud in foreclosure summons a disturbing trend in Duval County Summonses are being misplaced or forged by servers; critics say sloppiness and fraud leading to sudden spike. Roger Bull, Steve Patterson 

Florida TImes Union

Instances where summonses entrusted to servers have been reported as lost, once fairly rare, have skyrocketed, making it harder to document the fate of important paperwork. From barely more than 100 annually six years ago, more than 2,000 summonses have been lost in Duval County in each of the last two years. Critics attribute the problems to both sloppiness and fraud.
10/22/10

Ohio AG: foreclosure probe won't stop post-election

Dan Levine

Reuters

Cordray said he his office has received "hundreds" of calls and e-mails about GMAC since he announced the lawsuit earlier this month.

"Some of it will turn into evidence," he said
10/22/10*

The Watch List: The foreclosure scandal

Need to know on PBS

interviews

 Michael Hudson

Like so much else related to the housing crisis, is something that goes far deeper and could have serious ramifications for the economy as a whole.

Need to Know’s Jon Meacham discusses the latest revelations in the home foreclosure fraud scandal with Michael Hudson, author of “The Monster How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America and Spawned a Global Crisis.”
10/22/10

Big Problem for Banks: 

Due Process

JOE NOCERA Neil says: it simply does not follow that the bank therefore has an absolute right to take back the home. Under the law, it has to prove it has that right — by filing documents that show that the owner of the mortgage has conveyed that right to it. That’s why this affidavit scandal isn’t some legal nicety. It’s about the single most important value of American jurisprudence: due process.
10/22/10 Foreclose on the Foreclosure Fraudsters, Part 1: Put Bank of America in Receivership William K. Black

  L. Randall Wray  

Huffington Post

The fraudulent CEOs looted with impunity, were left in power, and were granted their fondest wish when Congress, at the behest of the Chamber of Commerce, Chairman Bernanke, and the bankers' trade associations, successfully extorted the professional Financial Accounting Standards Board (FASB) to turn the accounting rules into a farce. The FASB's new rules allowed the banks (and the Fed, which has taken over a trillion dollars in toxic mortgages as wholly inadequate collateral) to refuse to recognize hundreds of billions of dollars of losses. This accounting scam produces enormous fictional "income" and "capital" at the banks. The fictional income produces real bonuses to the CEOs that make them even wealthier.
10/22/10

A Foreclosure Defense Lawyer Goes To War

TranscriptMiamiDade

Attorney Matt Weidner Fraudclosuregate is the civil rights movement of our generation because it exposes profound faults within our justice system. Our justice system has been systematically hijacked by corrupt and out of control business interests with a long established track record of abuse.
10/22/10 HERE WE GO: PROOF POSITIVE THAT THOSE SECURITIZING CERTAIN MORTGAGE LOANS KNEW THAT CERTAIN OF THE LOANS WOULD DEFAULT, WHEN THEY WOULD DEFAULT, AND COVERED THE REALIZED LOSS AHEAD OF TIME Jeff Barnes, Esq., ForeclosureDefenseNationwide Now we can go to the courts and show why the securitization discovery, which many courts in several states have already ordered produced, is not only relevant in securitization cases, but is also material to both defenses and damage claims (e.g. known predatory lending claims).
10/22/10

America- Just Who Is Getting Bajillions of Dollars in Mortgage Money

 

memofiled

NotaryExamples

Assignments

Attorney Matt Weidner And just to drive the point home and make the issues real crystal clear, have a look at the sampling of assignments of mortgage below.  Mind you these are only samples, the troubling component is that they are representative of the much larger problems we face in trying to unravel this mess.  Look carefully at the dates on the assignments.  Compare the names on the assignments, the dates on the assignments, the dates on the notary stamps.  Ask your own questions and draw your own conclusions.
10/22/10 Foreclosures Jam the Court System

One Florida judge called it a "robo-review."

(This is what happens when fraud is allowed to permeate throughout the judiciary.  If you don't fix the problem it only makes things worse. MSF)

ROBIN SIDEL and DAWN WOTAPKA 

WSJ

Court clerks are struggling to keep up with fast-changing dockets where banks have canceled hundreds of hearings in recent weeks. Judges are trying to figure out if they should dismiss cases that rely on affidavits prepared by so-called robo-signers who raced through paperwork without reviewing it. The shoddy foreclosure procedures, and the subsequent suspensions, have also frozen cases in court. The moratorium "means these cases will be sitting there in la la land," says one judge.

Amir Efrati of the WSJ said it best in 2007 when referring to a foreclosure battle ” Is this all about a legal system at work... or not working?

Wells Fargo Admits No Lender After Securitization

 

Wait, what? Isn’t this what we have been saying?

Here’s the full document  Conduit_Loan_Servicing Wells Fargo No Lender

Findsen Law Excerpt

The thing most borrowers fail to realize about conduit loans is that once a loan has been securitized, they are not working with a "lender" anymore. The loans are pooled into a securitization called a Real Estate Mortgage Investment Conduit (REMIC). The REMIC is a trust and it has no lenders, only fiduciaries of the "certificate holders."

The “friendly banker” you knew five years ago may not be the party you will be dealing with tomorrow.

Well, yeah, we’ve figured that out. Also, the banker was never that friendly. He also wasn’t even a banker

10/21/10** Give Victims of Foreclosure a Voice in Court. 

"The resulting inequity is galling. Lawyers for mortgage lenders and banks rely on a full arsenal of legal tools to pursue homeowners, while homeowners on the receiving end of foreclosure proceedings often have no choice but to go it alone".

Melanca Clark, 

Op-Ed in NY Daily News

In New York State, 84% of Queens defendants who faced foreclosure proceedings on subprime mortgages did so without a lawyer. In Staten Island, the number was 91%. In Nassau, 92%. 

The economic collapse didn't cause this shortage, but it has exacerbated it. Even before the recession, more than 80% of the legal needs of the poor went unmet. That's part of the reason lots of families got duped into bad mortgages in the first place.

10/21/10** Sandusky woman sues to get home back AFTER foreclosure

McGookey said he believes in this particular case, he can prove Weston is a robosigner and because she did not follow the law when signing legal documents, the affidavit is null and void and therefore the foreclosure is as well.

BANK OF AMERICA is also involved in this case.

KELLY METZ 

The Morning Journal

“What makes (a robosigner) abhorrent to the legal system is when anyone signs an affidavit — and this is required throughout the country — they must sign the affidavit based upon their own knowledge. If people aren’t held to that standard, if anyone can sign an affidavit saying ‘here are the facts’ without any knowledge, that’s a huge step against our whole legal system. ”The suit states Fannie Mae should give up all rights to the home because the foreclosure is moot.
10/21/10 Lawyers mining foreclosure cases UPI "There is a movement afoot by (state attorneys general) and private lawyers to use technical problems to avoid foreclosures where the borrower is in default and the foreclosure is in all respects substantively appropriate. These are lawyers where the best job they can do for their clients is to keep them in their houses without paying the mortgage," Andrew L. Sandler, a Washington securities lawyer who represents banks and firms that service mortgages, the newspaper said.

(What about the cases where the homeowner isn't in default? MSF)

10/21/10

MERS Registry Comes Under Fire in Foreclosure Crisis Megan Hughes

Bloomberg

Bloomberg's Megan Hughes reports on Mortgage Electronic Registration Systems Inc. (MERS), a database that tracks the servicing rights and ownership interests in mortgage loans. MERS, whose parent company is Merscorp Inc., was created by industry leaders in 1995 to improve servicing after county offices couldn't deal with the flood of mortgage assignments
10/21/10

Mortgage database's murky legal status adds another wrinkle to foreclosure mess

"MERS is just one more boulder in the gears," said independent banking analyst Bert Ely.

Jim Puzzanghera

 Los Angeles Times

Major banks and mortgage lenders are coming down with another legal headache in their efforts to seize properties from homeowners in default.

A little-known electronic database formed by them 15 years ago to track ownership changes on millions of mortgages is being challenged in court by desperate borrowers alleging it wrongly filed foreclosure actions against them.

The cases against
Mortgage Electronic Registration Systems Inc., known in the industry as MERS, highlight the shortcuts taken by the financial industry during the housing bubble.
10/21/10**

Will Someone Go To Jail Fox News Interview with the Florida Attorney General
10/21/10**

FBI investigating foreclosures myFoxTampaBay

The foreclosure freeze has grabbed the attention of the FBI, who is now looking into whether banks and lending institutions broke any criminal laws during the crisis.

The FBI says the investigation is only in the beginning stages, but that leads to a lot of questions. Attorney Matt Englett joined Good Day to help sort out what it all means and what could happen if criminal activity is discovered.

10/21/10 MERS Enters Self-Preservation Mode, Issues Press Release To "Clarify" Its Role In Foreclosure Fraud Tyler Durden

As more people realize that the fake title transfer aspect of foreclosure fraud is just the tip of the iceberg which runs, via MERS (Mortgage Electronic Registration Systems) conduits all the way to the core of the securitization system, and thus $10 trillion in first level debt (and who knows how much in 3rd and 4th level layering of debt on top of this: think CDO-(squared and cubed), we expect an increasing number of denials from the enablers in the explosion of securitization over the past ten years.

10/21/10 Regulator for Fannie Set to Get Litigious Nick Timiraos

WSJ

The federal regulator overseeing Fannie Mae and Freddie Mac hired a law firm specializing in litigation as the agency considers how to move forward with efforts to recoup billions of dollars on soured mortgage-backed securities purchased from banks and Wall Street firms. The Federal Housing Finance Agency, which in July issued 64 subpoenas to issuers of mortgage securities, bank servicing companies and other entities, is working with Quinn Emanuel Urquhart & Sullivan LLP.
10/21/10

Stern Foreclosure Factory: $260 Million in 2009 Revenues

Barry Ritholtz 

bullfax.com

The goal here was not to pursue prosecute foreclosures on behalf of a banking client; rather it was to crank out the assembly line factory to grab 100s of millions of dollars, legally or illegally, consequences be damned.
10/21/10

Loan Buyback Requests Seldom Successful Without Blatant Fraud

 

Adam Quinones 

Mortgage News Daily

The investors say that many of the loans they bought should never have been sold to them in the first place, because they fell short of bondholders’ stated standards. They want the bank to buy back bad loans.

The bank said it is not responsible for the poor performance of the loans, and outside experts agree.

(The outside experts will be proven wrong. MSF)

10/21/10**

Niche Lawyers Spawned Housing Fracas

 

ROBBIE WHELAN - WSJ GMAC tried to sanction the lawyer on grounds he had embarrassed its employees, a maneuver that could have kept him from using the Stephan deposition as evidence. The motion was denied by Maine's Ninth District state court, which also ruled, late last month, that GMAC had submitted the Stephan affidavits "in bad faith." The court ordered GMAC to pay Mr. Cox $27,000, a sum it said he might have earned for his legal work if he hadn't been working pro bono.
10/20/10**

LOAN MODIFICATIONS – HOW BANKS DUPE HOMEOWNERS

Banks aren’t offering modifications to help homeowners – they’re offering modifications to help themselves!

Stopa Law Blog This article illustrates, banks often want homeowners to enter a modification just so a subsequent foreclosure will be easier for them! 

 If the Bank you’re entering a loan modification with does not represent, in writing, that it owns and holds your Note and Mortgage, then what’s to stop another bank from emerging, months down the road, and suing you for foreclosure on that same Note and Mortgage?  Unfortunately, absolutely nothing.

10/20/10

US Courts Established Policy Excluding Papers Pertaining to Judicial Corruption from First Amendment

Joseph Zernik 

LA Business Headlines Examiner

Moreover, to accomplish such policy, the records showed US judges and court personnel colluding in Fraud on the Court, and tight linkage was demonstrated between such conduct, abuse of Human Rights, and failing banking regulation in the United States.
10/20/10** Full Text of Letter to BofA from NY Fed (Maiden Lane), Freddie Mac, Pimco, Western Asset Mgmt, Neuberger Berman, Kore Advisors Barry Ritholtz 

The Big Picture

“Although it has been specifically notified by MBIA, Ambac, FGIC, Assured Guaranty, and other mortgage and mono-line insurers of specific loans that violated the required representations and warranties, the Master Servicer has not notified any other parties of these breaches of representations and warranties;”
10/20/10

Bank of America Accused of Racketeering in Foreclosure Lawsuit Bloomberg Bank of America Corp. and its Countrywide Home Loans unit were accused of racketeering in a lawsuit filed by two Indiana residents claiming that perjured affidavits were used to foreclose on their home.
10/20/10** Next Stop in Foreclosure Fight May Be Courtroom GRETCHEN MORGENSON and ANDREW MARTIN 

NY Times

Banks “have essentially sidestepped 400 years of property law in the United States,” said Rebel A. Cole, a professor of finance and real estate at DePaul University. “There are so many questionable aspects to this thing it’s scary.”
10/20/10 Mortgage Fraud 

Bethany Hood is a clerical employee of Lender Processing Services who works in the Mendota Heights, MN office and who signs thousands of mortgage documents monthly using at least 20 different job titles.
Fraud Digest On September 30, 2010, U.S. Bankruptcy Judge Harry C. Dees, Jr., Northern District of Indiana, South Bend Division, confronted head-on the widespread practice of employees of mortgage servicing companies signing Mortgage Assignments with false job titles, in Koontz v. EverHome Mortgage and Mortgage Electronic Registration Systems, Inc., Case No. 09-30024, Proc. No. 10-3005.
10/20/10 Major title insurer insists lenders vouch for foreclosure paperwork

There has been a certain cloud put on [lender-seized] properties going forward, and we want to make sure that cloud is lifted," Sadowski said.

Zachary A. Goldfarb and Jia Lynn Yang

 Washington Post

Recent reports of flawed paperwork have particularly worried title insurance companies, which are critical in the home-buying process. Lenders require buyers to buy coverage in case there is a dispute over who owns a home.

If there proves to be any problem with the accuracy of a title because of shoddy paperwork, the lenders would be responsible for losses under Fidelity National's new policy.

10/20/10

How "Headline Risk" Could Force Bank of America, Wall Street to Their Knees

Alain Sherter 

BNET

Individually, the mounting legal threats facing  Bank of America and other big banks over their mishandling of mortgage documents may not amount to much. Together, however, they amount to a potentially explosive — and largely political — problem for these companies.
10/20/10

'Deadbeat' fights back against foreclosure process

Kimberly Miller 

Palm Beach Post

"We used to be the wacko fringe; now we're cutting-edge," Epstein said. "Finally, my questions are being asked by reporters and attorney generals nationwide."
10/20/10

  UPDATED:  NY to Hold Lawyers Accountable on Foreclosures

 If this "common-sense" move was implemented 20 years ago, we wouldn't be in this mess.

Many lawyers may end up with long prison sentences.

AP

The chief judge of New York's courts has implemented a new rule requiring every lawyer handling a foreclosure to sign a form verifying that all paperwork in the case is accurate.

The move comes amid an uproar over revelations that mortgage lenders nationwide cut corners on paperwork and legal procedure as they moved to seize millions of homes.

New York Chief Judge Jonathan Lippman said Wednesday the rule is intended to put lawyers on notice that they have an obligation to ensure that the documents they present to the court are valid.

The rule will require attorneys handling the nearly 78,000 foreclosure actions pending in New York courts to go back to their clients and verify that all proper procedures were followed. 

"You are talking about tremendous consequences. You are talking about taking people's homes," he said. "Those papers have to be accurate. They have to be credible."

10/20/10

Fla 4th DCA: Original Note Must Be Sequestered with Court

 

Cases mentioned Perry v. Fairbanks Opinion

  Johnson v. Hudlett

 

LivingLies If the original note must be sequestered with the Court to prevent further negotiation of the note, it locks in the other side pretty early. If you can convince the court that tendering the original note to the court is a condition precedent to getting judgment, then they must come up with it immediately. It also underscores the issue of the burden of proof in a “lost note” situation, which is to prove the entire path that the note took, how it came to be lost, and what assurance you can give to the court that it is not in the hands of someone who could negotiate it. Neil
10/20/10 How MoJo Exposed David J. Stern and Launched a National Investigation  Michael Mechanic

  Mother Jones

Taken together, the stories they told seemed unbelievable. Falsified evidence? Contests to see which employee could push a foreclosure case through the courts fastest? Court documents rubber stamped by rookie attorneys who hadn't even read them? Judges so swamped that they overlooked missing court filings? Foreclosures initiated on homeowners who had paid their mortgage bills on time? Lewd shenanigans by the boss? Each person Kroll contacted "gave me some new awful detail I hadn't heard yet," he says. "It just got worse and worse.
10/20/10 Everything that Americans should ask about home mortgages CHRISTOPHER WHALEN Americans are discovering the concept of foreclosure and the loss of a home in a very real and disturbing way.  Despite the rhetoric from Washington and sensationalist media, the process of resolving defaulted mortgages is moving ahead, one reason why the U.S. will not be Japan.  But we have all forgotten the experiences of the 1930s when it comes to home foreclosure.
10/20/10

New York's New Rule: Lawyers Must Truly Certify Foreclosure Documents

(We truly mean it this time. MSF)

New York State Chief Judge Johnathan Lippman tells Daily Finance: "We're aware of what's going on, we don't live in a vacuum, and with all the revelations coming from the lenders themselves of systemic problems, the flawed notarizations, the robo-signing, we feel we can't close our eyes to this.

ABIGAIL FIELD

  Daily Finance

The New York Law Journal reports that New York state has a new rule for foreclosures that will force a complete overhaul of the now-standard practices of the foreclosure business: Attorneys will have to certify under penalty of perjury that they have personally reviewed all the key documents -- in all pending and new cases -- and that they have spoken directly with their clients, the foreclosing financial institutions.
10/19/10** Charges And Specifications: An Open Question Stephanie - FedUpUSA The banks created “No Doc” and “Option ARM” loans, along with 2/28 and 3/27 “Teaser” subprime lending. Borrowers didn’t ask for this, they were fed it by the financial industry.  The industry lied to consumers about their ability to afford what they were purchasing by qualifying borrowers at these teaser rates, not to mention further abuse when, once they had the mortgage, selling them car loans and such but only counting their current “teaser” payment in their debt service requirements. I have long argued that these programs were fraudulent from the start as none were intended to result in payments for 30 years ending in the ownership of a house without a note; their intent was to strip fees by forcing serial refinancing.
10/19/10

AG's office reprimands its attorney for "foreclosure mill" work SHANNON BEHNKEN 

The Tampa Tribune

The Florida Attorney General's Office has reprimanded one its attorneys for notarizing documents for one of the "foreclosure mills" the office is investigating. Erin Cullaro, an assistant attorney general for the office's Economic Crimes Division in Tampa, is a former employee of Florida Default Law Group.
10/19/10

Foreclosure Crisis Triggers Debate on Role of Mortgage Registry

Thom Weidlich 

Bloomberg

“The problem with MERS is it takes a public function and puts it into a private entity that doesn’t seem to have any clear accountability,” said Alan White, a law professor at Valparaiso University in Indiana. “And it does it on legal grounds that seem tenuous.”
10/19/10

radio transcript

Addressing the Foreclosure Crisis The Diane Rehm Show Kathleen Day of the Center for Responsible Lending, Greg Ip of The Economist, and Tom Deutsch of the American Securitization Forum discuss the mortgage foreclosure crisis.
10/19/10

ROBOCLOSURE-GATE: Getting Down to the Nitty Gritty

Mortgage News Daily Banks have been expecting this to happen though, they've been storing reserves for this day.  Well, they're gonna need 'em, because we're really getting down to the nitty gritty of the issue...
10/19/10

Mortgages Were Pledged to Multiple Buyers at the Same Time nakedcapitalism Chris Whalen told CNBC’s Larry Kudlow that Bear Stearns will be exposed as having sold the same loan to different investors on numerous occasions (see 6:45 into video).
10/19/10

Md. woman pleads guilty to mortgage fraud

(Normally, we do not post any of these cases)

UPI.com The reason we post this case is because this woman pleaded guilty to conspiracy to commit wire fraud and making false statements to get three home mortgages and faces 20 years in prison and a $1 million fine.

We can prove the banks and their lawyers committed mail/wire fraud and made false statements to obtain property on a MASSIVE, MASSIVE nationwide scale.

WHERE IS THE DEPARTMENT OF JUSTICE?

10/19/10

Connecticut Residents Charge EMC & Law Offices Of David J. Stern With Fraud

LivingLies

Neil found interesting material in this pleading, with some good citations and argument, but awkwardly worded in spots.

10/19/10**

Chicago sheriff says NO to enforcing foreclosures

"I can't in good conscience keep carrying out evictions involving these banks,"

Reuters Two of the largest U.S. mortgage servicers have said they will resume home foreclosures, but a big-city sheriff has news for them: he won't enforce their foreclosure evictions.

He will not enforce foreclosure evictions for Bank of America Corp, JPMorgan Chase and Co. and GMAC Mortgage/Ally Financial until they prove those foreclosures were handled "properly and legally."

10/19/10 ACLU Seeks Public Records To Determine Constitutionality Of Foreclosure Proceedings In Florida ACLU The American Civil Liberties Union and the ACLU of Florida today filed public records requests with judicial officials in Florida to determine whether homeowners are having their constitutional rights violated during foreclosure proceedings and being unlawfully removed from their homes. 
10/19/10

IT’S MAINSTREAM NOW — MORTGAGES CAN BE UNSECURED

Neil Garfield 

LivingLies

NEIL’S NOTE: For the first time, the FACT that there is an issue — a legal issue as to whether the loans are secured — is now in the mainstream media. It is my opinion and the opinions of dozens of other lawyers and Judges, as well as title examiners whose only work is thinking about these things, that the end result in Court will be that the obligations are “decoupled” (split in legal circles) from the notes that did NOT set forth the terms and parties of the transaction and that the obligation and note have been decoupled from the mortgage or deed of trust. In fact, it is my opinion that this was true the moment that the transaction closed. When it was recorded in the county records, a cloud on title was immediately created because the named beneficiary of the security instrument was not owed any money.

10/19/10

Task force probing whether banks broke federal laws during home seizures

(The Task Force will not have to look any further than what is already on their desks. MSF)

Zachary A. Goldfarb 

Washington Post

The Obama administration's Financial Fraud Enforcement Task Force is in the early stages of an investigation into whether banks and other companies that submitted flawed paperwork in state foreclosure proceedings may also have misled federal housing agencies, which now own or insure a majority of home loans, according to these sources.

The task force, which includes investigators from the Justice Department, Department of Housing and Urban Development and other agencies, is also looking into whether the submission of flawed paperwork during the foreclosure process violated mail or wire fraud laws. Financial fraud cases often involve these statutes.

10/19/10

Ohio Attorney General Richard Cordray outraged that Bank of America is resuming foreclosures

Teresa Dixon Murray 

The Plain Dealer

Cordray and others questioned how well the nation's largest bank could have reviewed its documents in such a short time. He also said the bank should favor modifying people's loans instead of foreclosing on them.
10/19/10

Pimco, NY Fed Said to Seek Bank of America Repurchase of MortgagesInvestors are stepping up efforts to recoup losses on mortgage bonds, which plummeted in value amid the worst slump in home prices since the 1930s.

Jody Shenn 

Bloomberg

A group of bondholders wrote a letter to Bank of America and Bank of New York Mellon Corp., the debt’s trustee, citing alleged failures by Countrywide to service loans properly, their lawyer said yesterday in a statement that didn’t name the firms. The New York Fed acquired mortgage debt through its 2008 rescues of Bear Stearns Cos. and American International Group Inc.

Last month, BNY Mellon declined to investigate mortgage files in response to a demand from the bondholder group, which has since expanded.

10/18/10

Palm Beach County judges want more evidence in uncontested foreclosures

Kimberly Miller 

Palm Beach Post

Thousands of Palm Beach County homes have been repossessed by lenders that failed to follow a court rule requiring evidence be attached to foreclosure affidavits, something judges often allowed to happen when no one contested the case. After revelations in recent weeks that sworn affidavits from several major banks and home loan servicers may be flawed, Palm Beach County Chief Judge Peter Blanc said banks will increasingly have to prove their foreclosure claims with sworn or certified supporting paperwork.
10/18/10 Timeline: Foreclosure debacle Washington Post Timeline from Sept. 20 - Oct. 18, 2010
10/18/10

The Homeowner Wins, Without a Lawyer

That date is more than six months after the last payment on the mortgage. Mortgage Lenders Network had halted operations 15 months earlier, yet still was able to have someone act as its nominee.

NY Times

Judge Garr M. King issued an injunction in United States District Court blocking the foreclosure of Ms. Rinegard-Guirma’s home, saying she was likely to prevail in her argument that the basic structure of MERS violates Oregon law and renders the mortgage invalid.
10/18/10**

Some Sand in the Gears of Securitizing

Was the great securitization machine that made hundreds of billions of dollars in mortgage loans based on a legal foundation of sand?

That possibility, raised by two law school professors, has begun to scare many jittery investors, causing bank stocks to plummet, although they recovered a little Monday.

NY Times If they are correct, the best outcome for lenders would be a prolonged delay in completing foreclosures, raising costs still further and paralyzing an already depressed housing market.

The worst outcome would be a conclusion that errors by financial institutions had decoupled the payment promises made by borrowers from the mortgages they signed. In that case, the mortgages would be invalid. Homes could be sold without paying off lenders. There also could be heavy tax consequences for lenders, both in terms of federal income taxes and in payment of back fees for mortgage registrations to local governments across the country.
9/18/10**

out of sequence

Latest Real Estate Time Bomb: Title of Foreclosed Properties Clouded; Wells Fargo Dumping Risk on Hapless Buyers

Wells' Buyer Beware Seller's Addendum

naked capitalism Even if the foreclosure has long since passed, a loophole in the way mortgages are recorded can create a serious title defect for future owners. Title analysis performed this month by AFX Title has detected this error to be common in random samples of properties it reviewed. “This could affect the property ownership of millions of homes nationwide” said David Pelligrinelli, of AFX Title. “The mortgage recording method which created this title flaw did not exist until recently. As title abstractors are just seeing this problem emerge now but a wave of title claims is coming over the next year or so.”….
10/18/10

Victims of robo-signing scandal. Will they get their homes back?

Charles Riley - CNN If a title reverts to the original homeowner, title insurance should cover any financial loss incurred if the new owner is ordered to vacate the house. 

Of course, that might not be the end of it -- there will probably be a flood of lawsuits bouncing between victims, title insurers and lenders that will further jam up a system that's already backlogged.

10/18/10 Foreclosure fiasco frustrates homeowners Thousands are legally challenging their home foreclosures Kevin Gray

Reuters

But his lawyers say records in MERS, the electronic mortgage tracking system, show his loan actually belongs to the government-owned finance giant Fannie Mae and argue the case is not valid.
10/18/10

News Release

Attorney General Releases Additional Sworn Statements in the Investigations Involving David Stern and Marshall Watson

Includes sworn statements of Kelly Scott, Mary Cordova and Jessica Cabrerea.

Florida Attorney General 

Bill McCollum

The release of three additional sworn statements in the ongoing investigations into The Law Offices of Marshall C. Watson, P.A. and the Law Offices of David J. Stern, P.A. for their alleged involvement in presenting fabricated documents to the courts in foreclosure actions to obtain final judgments against homeowners. The office will continue to release statements as we receive them.
10/18/10

“Former secretary says signatures were faked at law firm being investigated over foreclosures”

AP Cheryl Salmons, office manager for the foreclosure department at the law offices of David Stern, would sign 500 files in the morning and another 500 files in the afternoon without reviewing them and with no witnesses, said former assistant Kelly Scott in a deposition released by the Florida attorney general’s office.
10/18/10

'Foreclosure Mill' Employees Got Gifts For Altering Documents, Witness Says

Ryan McCarthy 

Huffington Post

"As a perk of Samons' [sic.] job, Stern's office would routinely pay her personal mortgage, a car payment, her electric bills and her cell phone bill, according to Scott, who told investigators Stern also bought Samons [sic.] a new BMW sport utility vehicle every year and gave her and other employees jewelry. Additionally, Stern purchased employee David Vargas a house, a car and a cell phone, Scott claims in her statement."

Is Mr. Vagas' house another stolen property?

10/18/10

Foreclosure Crisis Triggers Debate on Role of Mortgage Registry

Thom Weidlich 

Bloomberg

The case highlights a debate raging in courts on the role MERS has, if any, in home foreclosures. How it’s resolved will determine whether MERS’s involvement produced a defective process and clouded millions of property titles. A definitive ruling against MERS might slow any future bundling of mortgages into securities since the company played a role in that process.
10/18/10

Foreclosures and Guilt: The "Home Loan Moral Hazard Scorecard"

Richard (RJ) Eskow 

Huffington Post

Jamie Dimon and the other mega-bankers who derailed the economy have a new PR campaign to sell you. They're saying that families who can't pay their mortgages must bear the blame -- all the blame -- for the foreclosure crisis. That means the public should just ignore banks' widespread lawbreaking in the registering and transfer of property titles. For the bankers who would appoint themselves the nation's moral arbiters, It's always somebody else's fault.
10/18/10

Citigroup Says It Didn't Use 'Robo-Signers,' Still Faces Increased Risk Due to Sour Mortgages

Shahien Nasiripour 

Huffington Post

Top Citigroup executives sought to assure investors and the public Monday by proclaiming that the firm's foreclosure process and its handling of key documents in securitizing home mortgages was "sound," despite growing concerns over how lenders like Citi may have skirted the law when bundling home mortgages and selling them, and again when kicking delinquent borrowers out of their home.
10/18/10

Bank of America to resume some foreclosures

Alan Zibel - AP Bank of America Corp. says it's confident of its foreclosure decisions in a majority of its questionable cases. The bank is still delaying foreclosures in the 27 other states, which don't require a judge's approval.

(Let's see what the courts say.) MSF

10/18/10

Law Expert: MERS Mess Could Have “a Massive Effect on the Economy.”

David Dayen 

interview with Prof. Peterson

Which brings us to the important question of where this all goes. If you have 60% of the mortgage market where nobody has standing to foreclose, these “MERS-infected assets,” as Peterson calls them, what happens to these millions of homes?

As I said, nobody really knows. “In the short-term it’ll be much more difficult for foreclosures, especially in judicial states,” Peterson said. “The potential fallout can get much worse if several different legal problems that the mortgage finance industry is facing starts to shake out in ways unfavorable to them in different states.”

10/18/10

The Morality of Requesting a Note

rortybomb Let’s use a quick example. Say I lend you $8, and you have to pay me back $10 tomorrow. When tomorrow comes, I say you owe me $12. Do you have a moral claim to dispute this? Of course you do. You especially have a moral claim to dispute this if I sold your mortgage to a different person who shows up wanting $12, and you really especially have a moral claim to dispute this if I say that you owe me $12 because of a special late collection fee that I’m claiming that you didn’t realize you signed up for.  The only proper way to dispute this is to consult the document we both signed that lays out the terms of the debt, which in a mortgage is called the “note”, and that’s the idea behind the campaign “Where’s the Note?”
10/18/10**

Mortgage Mess Means Trillions in Losses for Wall Street Banks

Attorney Avery B. Goodman Seeking Alpha

We will also need to enact new laws to facilitate shareholder lawsuits and clawbacks from the incompetent executives like Henry Paulson, Lloyd Blankfein, and others, who ran their institutions into the ground, while they collected hundreds of millions of dollars worth of unjustifiable salary and bonuses.

Given that shareholders will now be impoverished as a result of the actions or inaction of incompetent bank executives, it is time to take ill-gotten gains away from them. 

10/18/10

Bankers New Tactic: Blame the Victim

Richard Zombeck 

Huffington Post

The Wall Street frat boys, in a propaganda blitz that would make Tokyo Rose and Joseph Goebbels envious, have come out in droves to blame the victims.
10/18/10

HUNDREDS OF BILLIONS (TRILLIONS?): NO WAY OUT for BANK FRAUD LIABILITY

LivingLies

It must be emphasized that what the banks are being forced to “buy back” is not the loans, it’s the mortgage bonds at face value because there were no loans in the pools. The banks may try to maintain the illusion by announcing that they are buying back the loans but that is exactly the opposite of the truth. If the loans were in the pool there would be no liability to buy back the mortgage bonds and certainly not at face value.

The Genie that is out of the bottle is not the creation of the mega-banks, as the White house spokesperson says, but that the entire affair was a charade. The money given to the banks was never based on “bad loans”. It was to cover liability for defrauding investors. The fraud is the same against the borrowers, which is why the banks will at best be left with some sort of free-floating claim to dubious obligations that are both unsecured and subject to set-off for violations of dozens of laws, State and Federal. 

10/18/10

Don’t Spook the Banks?

Let’s even assume that the magic of the wand extends back for 5 years. Does that fix the problem?

Unfortunately not. Here are the problems that would still remain:

LivingLies The truth is that when fraud is committed, regardless of the scale of the fraud, there is no way out. When forgery is committed, there is no way out. When documents are counterfeited, there is no way out. These illegal things were and are being done because the fundamentals of the assets were defective in addition to the procedural aspects of processing them. It’s painful. But unless you are going down the rabbit hole, you can’t start saying lead is now gold, or that nothing is something. The capital structure of the mega banks is fatally flawed by the inclusion of illusory assets and like the emperor’s new clothes, everyone seems to know it but few are willing to say anything about it for fear of sparking a panic. I hold no illusion of the chaotic implications of accepting the truth here, but we have made it through such periods before and we can do it again.
10/18/10 Who’s Who in the Foreclosure Scandal: A Primer on the Players Marian Wang  ProPublica The unfolding foreclosure scandal just keeps expanding. Scrutiny first fell on the “robo-signers” who rubber-stamped banks’ foreclosure paperwork, but they’re one of the many players who may have contributed to the mess.
10/18/10

The Lawyer Who Reined In the Rubber Stampers and Robo-Signers

David Bario 

The American Lawyer

That combination of factors led me to a real strong suspicion that he really didn't know anything, that he was just a paper signer. And it also led me to have a high level of doubt about whether the lawyer preparing that affidavit had done any due diligence or verified that the guy he was getting the affidavit back from was a competent witness to present admissible evidence on a summary judgment motion.
10/17/10

Foreclosure Mess Draws in the Lawyers Who Handled Them

BARRY MEIER

 NY Times

With the rash of foreclosures across the country in recent years, many lawyers have specialized in the lucrative business of handling cases for banks and loan servicers. And now that flaws are being acknowledged by big lenders in the processing of foreclosures, some of these lawyers are finding themselves in the cross hairs of investigators — and scorned by their former clients.
10/17/10

Avoid Foreclosure Market Until the Dust Settles

Several days later, however, they realized that what they had really bought was a second mortgage from Wachovia on a house that still had an enormous, unpaid primary loan. In other words, they did not own the home free and clear, and the auction company wouldn’t give back their $137,000 check.

LivingLies

Read this carefully and you start to understand that the paperwork is no trivial matter as the Wall Street Journal editors want to say on behalf of the financial services industry. Priority of liens and the foreclosure procedure contains multiple features that can be used by borrowers Stay alert. Show up ON TIME at the auction, you  might be surprised by what happens.

And remember that “credit bid” is not from a creditor. It is a fake credit bid and thus all things that flow from it are void.

10/17/10

MIRANDA RIGHTS FOR BORROWERS

THERE ARE NO MIRANDA RIGHTS IN THIS BATTLE SO LET ME SAY THAT ANYTHING YOU SAY OR DO MIGHT BE USED AGAINST YOU.
LivingLies EVERYONE in the securitization chain has a legal problem, a liability problem and is subject to potential fines, penalties, damage awards to borrowers, punitive damages or treble damages. It’s just not the way they say it is. The problem is that the presumptions of the banks keep seeping into the consciousness of borrowers, their lawyers and the judges that hear the cases. The presumptions are all wrong. 
10/17/10 The Newest Fraudclosure Scam Attorney Matt Weidner  There are criminals who are now contacting the folks in foreclosure posing as the bank, gathering their personal information and then contacting the
bank and posing as the consumer to negotiate a short sale.
10/17/10 Florida FraudclosureGate is a Constitutional Crisis!  

If our courts do not challenge and question documents and if our judges do not challenge and question a system that has gone wild and out of control…the system will go wild and out of control.

Attorney Matt Weidner  Have a seat people, it’s going to be a rough ride.  Things are going to get tough, but the genie cannot be put back in the bottle.  Pandora’s box cannot be closed, no multi state settlement agreement will settle things.  Class actions will not make things right.  When this all plays we’re going to be looking not to our modern financial system or current court decisions, we’re going to have to look quite a bit further back.  Let’s start here….
10/17/10

AND SO IT BEGINS:

GMAC, JEFFREY STEPHAN SUED BY VINDICTIVE HOMEOWNER

4closurefraud In his complaint, filed in Common Pleas Court, Fox seeks at least $25,000 in compensatory damages and $25,000 in a civil penalty, plus undetermined punitive damages that his attorney said will be 2 percent of GMAC’s 2009 gross revenue.
10/17/10 A Foreclosure Sitcom Al Lewis - WSJ First we learned America's biggest banks couldn't properly lend. 

Then we learned they couldn't keep themselves solvent without taxpayer assistance. 

Then we learned they couldn't effectively work with troubled borrowers in a bursting housing bubble. 

And now we've learned they don't even know how to foreclose.

10/17/10**

OMG: Report From The Florida Epicenter of Fraudclosures, Why Is Obama Silent? Danny Schechter 

Author of The Crime Of Our Time

Here in Floriduh, one epicenter of the housing catastrophe, homeowners. were shell-shocked by the latest fraudclosure crime wave. Denise Richardson writes in the Sun Sentinel, “Last I knew, knowingly signing documents fraudulently and using them in a court of law is frowned on, right? It’s criminal, isn’t it? Or is it only criminal if you are a homeowner and not a bank? Seems we’ve gone to great lengths to create and then accept a double standard here.
10/17/10 Homeowner Activists and Attorneys Vindicated after Years of Being Ignored Richard Zombeck 

FDL

There’s a huge buzz out there among homeowner activists who are feeling vindicated for the hard work they’ve done over the past couple of years and in many cases even longer. The recent news inundating the headlines of blatant fraud on the part of lenders and servicers has offered proof that their actions and fight have not been in vain.
10/17/10 Mortgage foreclosure uproar sweeps up Northeast Ohioans

The Negreas have battled GMAC for most of the past decade over two payments that weren't credited to them properly years ago. They have been foreclosed on three times, even though they've never been late with a payment.

Teresa Dixon Murray 

The Plain Dealer

And Michael Rendes had his mortgage sold last year to Bank of America. The bank foreclosed on him in November, after insisting for months that it didn't hold his loan and wouldn't accept his payments.

Martin and Kirsten Davis, meanwhile, lost their home in Cleveland to foreclosure two years ago. The reason: a mess that started when they accidentally paid 14 cents too little on their monthly payment.

10/17/10

THE MARKET TICKER – 

HOUSE STEALING:

 TICKERGUY’S PERSPECTIVE

We have had two sequential administrations – Bush and now Obama – that have intentionally refused to prosecute any of this lawless behavior.

Market Ticker This is where lawlessness leads us – to more lawlessness.  Once you commit a lawless act against someone and are not punished for it you have invited them to retaliate with complete disregard for the law in their response. You are only required to deal ethically and morally with an ethical and moral entity across the table – one who ignores the law loses their right to demand that respect in return.
10/14/10**

One nation, under fraud

Joseph Tauke

 The Daily Caller

Tomorrow, a bank—not your bank, but any bank—could evict you from your home. Even if you didn’t know the bank was foreclosing. Even if your mortgage is paid off. Even if you never had a mortgage to begin with. Even if the bank doesn’t hold a single piece of paper that you signed. And major banks not only know this fact, but have spent millions of dollars to defend it in court. Why? The answer starts with a Jacksonville homeowner named Patrick Jeffs
10/16/10

Once More into the Breach . . .

James Kwak 

The Baseline Scenario

The scary possibility is that what they’re really afraid of is systemic risk: the possibility that, as Konczal and others have pointed out, the mortgage securitization trusts (the entities that bought mortgages and issued mortgage-backed securities) could sue the investment banks, forcing them to buy back the underlying mortgages at the original cost. Since those mortgages are now worth far less than before, this would impose huge losses on the Big Six banks.
10/16/10 For foreclosure processors hired by mortgage lenders, speed equaled money

"Mortgages would get placed in different files. They would get thrown out. There was just no real organization when it came to the original documents."

Ariana Eunjung Cha 

Zachary A. Goldfarb 

Washington Post

The financial incentives show that the problems plaguing the foreclosure process extend well beyond a few, low-ranking document processors who forged documents or failed to review foreclosure files even as they signed off on them. In fact, virtually everyone involved - loan servicers, law firms, document processing companies and others - made more money as they evicted more borrowers from their homes, creating a system that was vulnerable to error and difficult for homeowners to challenge.

"This was a systemic problem. It's not like a few renegade employees made mistakes," said lawyer Peter Ticktin, who defends Florida homeowners facing foreclosure. "It was industry-wide and pervasive, and everyone knew about it."

10/16/10

  How Countrywide Covered the Cracks

GRETCHEN MORGENSON 

NY Times

“Mozilo is agreeing to a permanent ban on serving as an officer or director of a public company,” said James A. Fanto, a professor at Brooklyn Law School and a specialist in corporate and securities law. “That is a significant punishment and does not look good for his legacy.” (but he keeps most of the money he stole. MSF)
10/16/10 So you bought a foreclosed home. Now what?

Thousands of foreclosures around the country may be invalid because of bank paperwork problems.

AP Many states provide protections for those who bought in good faith, but the point is, the foreclosed party also bought in good faith and are entitled to those protections.  Some states are First in Time - First in Line states. MSF
10/16/10 Doubts over foreclosures embolden some to move back in SHANNON BEHNKEN 

The Tampa Tribune

Homeowners with grievances need to go back to court, he said, and prove their case. "Yes, there is a category of judgments out there that are so flawed that the homeowner is still legally entitled to the property, regardless of what the judgment says," Weidner said
10/16/10

Why Robo Signatures Are Illegal in California and Other Non Judicial Foreclosure States Michael Patrick Rooney, Esq. Clear Title May Not Derive From A Fraud (including a bona fide purchaser for value). 

In the case of a fraudulent transaction California law is settled. The Court in Trout v. Trout, (1934), 220 Cal. 652 at 656 made as much plain:

"Numerous authorities have established the rule that an instrument wholly void, such as an undelivered deed, a forged instrument, or a deed in blank, cannot be made the foundation of a good title, even under the equitable doctrine of bona fide purchase. Consequently, the fact that defendant Archer acted in good faith in dealing with persons who apparently held legal title, is not in itself sufficient basis for relief."?
(Emphasis added, internal citations omitted)
10/12/10 Why Foreclosure Fraud Is So Dangerous to Property Rights Barry Ritholtz I want to explain exactly why this RE fraud is so dangerous, and explain the significance of the rights that are currently being trampled. I also want to demonstrate that the only way the nation could have the quantity and magnitude of errors we see is by willful, systemic fraud.

10/11/10

Is MERS Commercial About To Break The CMBS Market?

The irresponsible actions by MERS are rapidly becoming the stuff of folklore: from their direct and indirect involvement in every fraudclosure, to the president himself falling for what appears to be a MERS agent with a split signature personality, to MERS just-released refutation of it ever having done something wrong, the hammer on MERS seems to be preparing to fall with a resounding thud. Yet with everyone focusing on MERS' involvement in the residential mortgage space, pundits have ignored that "other" space where MERS made the possibility of outright robosigning fraud a distinct possibility - commercial real estate.

 

Tyler Durden

For specifics one has to go back 7 years in time, to July 28, 2003, and read the following press release from the company titled: "MERS Liberates Commercial Marketplace From Assignments" in which we read that "MERS announces the release of its latest product, MERS® Commercial, designed to eliminate the repurchase risk and costs associated with preparing, recording and tracking assignments for the commercial mortgage-backed securities (CMBS) marketplace." Ah yes, how convenient for MERS to come to the CMBS market with a "time saving" yet fraud facilitating product, at precisely the time when various CMBS issues would start propagating and flooding the market with hundreds of billions of commercial real estate securitizations.

10/8/10**

Mortgage-Title Fraud: A National Catastrophe

Jeff Neilson

SeekingAlpha

A party which has defective title to a property (i.e. the Wall Street banks) can never pass "good title” to any buyer. From the time that defect is created, no subsequent buyer can ever own that home, legally. Should that defect be discovered – several years later – by the original owner, that owner then has several more years in which to file a claim (based upon our limitations statutes).

10/1/10

Bank Of America Joins JPMorgan And Ally In Admitting It Never Validated Foreclosures Docs

Tyler Durden

The third major bank joins JPM and Ally, which have already halted foreclosures, in admitting that one of its officials "signed up to 8000 foreclosure documents a month and typically didn't read them." Which means Bank of America is about to halt its foreclosure process. Which leaves us with the last big mortgage lender: Wells Fargo, which is quietly doing the opposite. As American Banker reports, Wells is actually curtailing extensions on residential short sales, in a last ditch attempt to accelerate the foreclosure process before it also falls under the spotlight of fraudulent foreclosure disclosure.
Oct 15-August/2010       July-January 2010