California Attorney General Kamala D. Harris has subpoenaed Citigroup Inc. and its banking subsidiary, Citibank, ordering the two entities to answer questions regarding the selling and marketing of mortgage-backed securities in the Golden State, a person familiar with the investigation said.
The person, who was not authorized to speak publicly about the matter and spoke on condition of anonymity, would not further characterize the nature of the investigation. Spokespeople for the attorney general's office and Citi declined to comment.
California subpoenas Citigroup about mortgage-backed securities">
for more...
Friday, August 5, 2011
Thursday, August 4, 2011
CCN Game Changers - Mortgage Meltdown: Criminal Banks? - Part 3
Joe Vera of www.joeveraseminars.com says bank executives committed crimes and attorneys general are investigating... Are you a home owner that thinks you may have been a victim of these unlawful practices by the Banks? Visit Joe Vera Seminars
CCN Game Changers - Mortgage Meltdown: Criminal Banks? - Part 2
If you are a homeowner who thinks you may be a victim of the Lenders who holds your note and their practices visit JoeVeraSemiars for more information...
CCN Game Changers - Mortgage Meltdown: Criminal Banks?
I was able to be guest on Game Changers and discuss the Criminal practices of many Banks...
What does this mean to homeowners like you and me? To learn what this means to you as a homeowner visit JoeVeraSeminars
What does this mean to homeowners like you and me? To learn what this means to you as a homeowner visit JoeVeraSeminars
Wednesday, August 3, 2011
Joe Vera on Pre Paid Legal
Joe Vera Seminars and Joesph Daniel Real Estate Consultants never have been nor intend to endorse, support or promote PPL. Let it be publicly known and go on record that I do not have any association with PPL. Any suggestion that I Joe Vera and my Companies endorse, support, sponsor, or an affiliate of / to PPL or its multi-level-marketing ventures is untrue and will be recognized as false and misleading. Anything other then what I have stated will be deemed as misuse of my name and business entities misleading my business following, peers, affiliates, and the public for personal gain to increase business. Any and all necessary actions will be taken to maintain the integrity of Joe Vera Seminars and all entities related to my name.
Tuesday, July 5, 2011
Legal Case Delaying Home Sales in Jackson
American Title and Liberty Title said “There is a lot of stuff in limbo right now.” and having MERS in the chain of title “is a fatal defect.”
American Title said that if banks want title companies to insure home sales that have connections to MERS, they will have to find a way to show they have proper title. “Somebody’s going to pay for this … This isn’t just going to go away. Somebody’s going to pay money.”
Legal case delaying home sales in Jackson
Published: Saturday, July 02, 2011, 9:49 PM Updated: Saturday, July 02, 2011, 9:57 PM
By Chris Gautz | Jackson Citizen Patriot
A family was expecting to close on a house on a Friday. On Thursday night, the sale had to be scuttled.
Fifteen to 20 pending home sales fell apart that one Jackson title company was preparing to handle. Banks started pulling homes for sale off the market.
First, Jackson County’s real estate market suffered from the foreclosure crisis. Lately, it has been going through another convulsion due to a little-known company that has its name all over mortgage documents in Jackson and around the state.
Hundreds of foreclosures that involved the Mortgage Electronic Registration System, or MERS, now are holding up home sales in Jackson and around the state. A legal case over the company that originated in Jackson County may be headed to the state Supreme Court.
“I think it’s just going to be a stalemate for anyone who has MERS in their title,” said Laura Schlecte, broker and owner of Prudential Premier Properties, 761 W. Michigan Ave.
Illegal foreclosures?
MERS, based in Virginia, was created in 1993 by the lending and title insurance industries as a way for banks to quickly buy and sell mortgages without having to physically record the transfers with local register of deeds offices.
In the last decade banks commonly packaged mortages as securities and sold them back and forth. Handling the paperwork electronically sped up the process.
When Summit Township resident Corey Messner defaulted on the mortgage on his home on E. Walmont Road in 2008, MERS acted on behalf of the bank that held the mortgage and began foreclosure.
But when the eviction proceedings began, Messner filed his lawsuit, saying MERS did not have the authority to foreclose because it did not hold the note on his mortgage.
Michigan law states that whoever forecloses on a property must own the debt, and MERS did not. It was simply acting on behalf of the bank that did.
Efforts to reach Messner through his attorney, retired District Court Judge Lysle Hall, now with Jackson Legal, 300 W. Washington Ave., were unsuccessful. A representative at Jackson Legal said Messner did not want to speak publicly.
Jackson’s district and circuit courts ruled against Messner. The case in Jackson was combined with a similar one in Kent County and then taken up by the state Court of Appeals.
In April, the appeals court ruled for the homeowners, finding that MERS did not in fact have the authority under law to execute the foreclosure proceeding.
‘A screeching halt’
Almost immediately after the court’s ruling, nearly every home for sale that had been foreclosed on by MERS became toxic in the eyes of the title insurance industry.
“We’re not insuring any of those,” said Paul Anast, president of Midstate Title Co., 100 S. Jackson St. “We wouldn’t touch one of those with a 10-foot pole.”
In a statement after the appeals ruling, MERS wrote, “Title companies should not have any concerns about closing loans with MERS as the mortgagee.”
But no title company in this area sees it that way.
“I don’t think anyone is going to agree with them on that,” Anast said. “It’s really caused a lot of that stuff to come to a screeching halt. Everyone is taking the ultra-conservative road.”
Thomas Richardson, owner and general counsel of Liberty Title, 110 First St., said having MERS in the chain of title “is a fatal defect.”
He said his office saw 15 to 20 deals fall apart after the appeals ruling, and it will take time before those homes can be sold. “It’s going to gum up the real estate market,” he said.
In the weeks that followed, banks began pulling all of their properties off the market they were attempting to sell that had been foreclosed on by MERS.
“There’s a lot of stuff in limbo right now,” said Ron Ellison, president of American Title Co., 280 W. Cortland St.
Karmela Lejarde, spokeswoman for MERS, said most of the banks her company works with no longer have MERS foreclose for them, and they are in the midst of a rule change at the company to not allow the practice anymore.
While there likely won’t be any new MERS foreclosures, many potential homebuyers and homeowners looking to sell have had their deals stalled.
Jackson County Register of Deeds Mindy Reilly said MERS initiated 744 foreclosure proceedings in the past five years, including 91 last year.
It is not clear how many of those homes have been or still are on the market. Some may have been redeemed by the owner.
What’s next
Ellison said that if banks want title companies to insure home sales that have connections to MERS, they will have to find a way to show they have proper title.
“We don’t want to buy lawsuits,” Ellison said.
The lender will have to either go back and do a new foreclosure, which can take about seven months, or track down the people who were evicted from their homes and get them to sign over their interest in the property.
The latter can be quite difficult because many of those people have left the area.
No one expects those who were evicted after a MERS-initiated foreclosure would get their home back, especially if a new family is living in it after buying it from the bank.
“You can’t undo all these foreclosure sales that went to qualified purchasers,” Ellison said.
Any resolution will be about financial damages, he said.
“Somebody’s going to pay for this,” Ellison said. “This isn’t just going to go away. Somebody’s going to pay money.”
American Title said that if banks want title companies to insure home sales that have connections to MERS, they will have to find a way to show they have proper title. “Somebody’s going to pay for this … This isn’t just going to go away. Somebody’s going to pay money.”
Legal case delaying home sales in Jackson
Published: Saturday, July 02, 2011, 9:49 PM Updated: Saturday, July 02, 2011, 9:57 PM
By Chris Gautz | Jackson Citizen Patriot
A family was expecting to close on a house on a Friday. On Thursday night, the sale had to be scuttled.
Fifteen to 20 pending home sales fell apart that one Jackson title company was preparing to handle. Banks started pulling homes for sale off the market.
First, Jackson County’s real estate market suffered from the foreclosure crisis. Lately, it has been going through another convulsion due to a little-known company that has its name all over mortgage documents in Jackson and around the state.
Hundreds of foreclosures that involved the Mortgage Electronic Registration System, or MERS, now are holding up home sales in Jackson and around the state. A legal case over the company that originated in Jackson County may be headed to the state Supreme Court.
“I think it’s just going to be a stalemate for anyone who has MERS in their title,” said Laura Schlecte, broker and owner of Prudential Premier Properties, 761 W. Michigan Ave.
Illegal foreclosures?
MERS, based in Virginia, was created in 1993 by the lending and title insurance industries as a way for banks to quickly buy and sell mortgages without having to physically record the transfers with local register of deeds offices.
In the last decade banks commonly packaged mortages as securities and sold them back and forth. Handling the paperwork electronically sped up the process.
When Summit Township resident Corey Messner defaulted on the mortgage on his home on E. Walmont Road in 2008, MERS acted on behalf of the bank that held the mortgage and began foreclosure.
But when the eviction proceedings began, Messner filed his lawsuit, saying MERS did not have the authority to foreclose because it did not hold the note on his mortgage.
Michigan law states that whoever forecloses on a property must own the debt, and MERS did not. It was simply acting on behalf of the bank that did.
Efforts to reach Messner through his attorney, retired District Court Judge Lysle Hall, now with Jackson Legal, 300 W. Washington Ave., were unsuccessful. A representative at Jackson Legal said Messner did not want to speak publicly.
Jackson’s district and circuit courts ruled against Messner. The case in Jackson was combined with a similar one in Kent County and then taken up by the state Court of Appeals.
In April, the appeals court ruled for the homeowners, finding that MERS did not in fact have the authority under law to execute the foreclosure proceeding.
‘A screeching halt’
Almost immediately after the court’s ruling, nearly every home for sale that had been foreclosed on by MERS became toxic in the eyes of the title insurance industry.
“We’re not insuring any of those,” said Paul Anast, president of Midstate Title Co., 100 S. Jackson St. “We wouldn’t touch one of those with a 10-foot pole.”
In a statement after the appeals ruling, MERS wrote, “Title companies should not have any concerns about closing loans with MERS as the mortgagee.”
But no title company in this area sees it that way.
“I don’t think anyone is going to agree with them on that,” Anast said. “It’s really caused a lot of that stuff to come to a screeching halt. Everyone is taking the ultra-conservative road.”
Thomas Richardson, owner and general counsel of Liberty Title, 110 First St., said having MERS in the chain of title “is a fatal defect.”
He said his office saw 15 to 20 deals fall apart after the appeals ruling, and it will take time before those homes can be sold. “It’s going to gum up the real estate market,” he said.
In the weeks that followed, banks began pulling all of their properties off the market they were attempting to sell that had been foreclosed on by MERS.
“There’s a lot of stuff in limbo right now,” said Ron Ellison, president of American Title Co., 280 W. Cortland St.
Karmela Lejarde, spokeswoman for MERS, said most of the banks her company works with no longer have MERS foreclose for them, and they are in the midst of a rule change at the company to not allow the practice anymore.
While there likely won’t be any new MERS foreclosures, many potential homebuyers and homeowners looking to sell have had their deals stalled.
Jackson County Register of Deeds Mindy Reilly said MERS initiated 744 foreclosure proceedings in the past five years, including 91 last year.
It is not clear how many of those homes have been or still are on the market. Some may have been redeemed by the owner.
What’s next
Ellison said that if banks want title companies to insure home sales that have connections to MERS, they will have to find a way to show they have proper title.
“We don’t want to buy lawsuits,” Ellison said.
The lender will have to either go back and do a new foreclosure, which can take about seven months, or track down the people who were evicted from their homes and get them to sign over their interest in the property.
The latter can be quite difficult because many of those people have left the area.
No one expects those who were evicted after a MERS-initiated foreclosure would get their home back, especially if a new family is living in it after buying it from the bank.
“You can’t undo all these foreclosure sales that went to qualified purchasers,” Ellison said.
Any resolution will be about financial damages, he said.
“Somebody’s going to pay for this,” Ellison said. “This isn’t just going to go away. Somebody’s going to pay money.”
The Financial Crimes Enforcement Network Reported…
The increase in loan fraud is forcing Banks to repurchase loans. I predict the number of uncovered fraudulently packaged loans is about to grow exponentially. (by Joe Vera)
VIENNA, Va. – The Financial Crimes Enforcement Network (FinCEN) today, in its First Quarter 2011 Mortgage Loan Fraud (MLF) analysis, reported that the number of MLF suspicious activity reports (SARs) rose to 25,485 up 31 percent from 19,420 in the first quarter of 2010. FinCEN attributes the increase to large mortgage lenders conducting additional reviews after receiving demands to repurchase poorly performing mortgage loans. In the first quarter of 2011, 86 percent of MLF SARs reported activities which occurred more than two years prior to the filing of the SARs.
The analysis also found that California dominated the top mortgage fraud rankings.
Saturday, July 2, 2011
“I can assure you that this type of criminal fraud is rampant across the nation.” John O’Brien, Essex S. Dist. Registrar.
Chicago Title’s attorney said if MERS is involved, lenders must ensure mortgage’s chain of ownership is properly recorded before a non-judicial foreclosure. (by Joe Vera)
July 1, 2011
http://www.oregonlive.com/finance/index.ssf/2011/07/what_oregons_foreclosure_mess_means_and_when_itll.html
“I can assure you that this type of criminal fraud is rampant across the nation.” John O’Brien, Essex S. Dist. Registrar.
Martha Flynn, the Vernonia woman who persuaded a judge to block her eviction and void a bank’s foreclosure sale, looms a hero in many distressed homeowners’ minds today.
This even as she’s not sure where she’ll be living next month.
The same uncertainty also applies to Oregon’s housing market. With the status of potentially thousands of foreclosures and past sales up in the air, it’s unclear how long the housing crisis will drag on the broader market.
And there’s not much immediately we can do about it.
“It’s hard to predict where things are going to go,” said Cleve Abbe, state underwriting counsel for Fidelity National Title Group in Portland.
Since 2007, lenders have launched about 100,000 foreclosure actions in Oregon, according to RealtyTrac, one foreclosure data service. That’s resulted in just fewer than 35,000 sales. But sales have slowed this year. Through May, they’re on pace to total just more than 9,000 in 2011, down from 15,500 foreclosure sales last year, RealtyTrac data show.
Signs of life in the broader housing market are sporadic. Portland-area prices were down 9 percent over the past year through May, hovering at levels last seen in the winter of 2004, according to last week’s S&P/Case-Shiller Home Price Index report.
Yet backlogs are dropping. Lane County’s 12-month inventory in January has fallen to a 5.2-month inventory in June, said Cory T. Neu, a broker with Neu Real Estate in Marcola.
Realtors in Portland report hot micromarkets, with homes going in one day in inner Southeast Portland neighborhoods.
But sales activity around the larger metropolitan Portland has fallen in the first five months of the year, compared with the same period a year ago. New listings, in fact, have fallen 26 percent.
“I always caution people when they ask about ‘What’s the market doing?’” Neu said “Well, which market are we talking about?”
The foreclosure problem in Oregon
For now, we’re focusing on the foreclosure market — and the heart of its legal turmoil in Oregon.
Brian Feulner/ The OregonianA Columbia County judge blocked U.S. Bank from evicting Martha Flynn from her Vernonia home after it was bought by the bank in foreclosure.
For years, lenders have sold and resold mortgages to investors to broaden the market for home loans and make a boatload of money upfront on fees.
Along the way, they tried to avoid the traditional process of recording those transactions in local county recorders offices. But as the housing market collapsed and servicers had to foreclose on delinquent borrowers, the mortgage industry discovered a certain inconvenient truth.
The Mortgage Electronic Registration System — set up to avoid the cost and logistics of recording all of these sales — didn’t jibe with Oregon law.
For a foreclosure to proceed quickly and outside the auspices of a judge, the state requires that the loan’s ownership be properly and clearly documented. But the electronic recording system set up by banks, servicers and title companies took enough shortcuts to compel a number of federal judges to halt foreclosures. Oregon law, they ruled, demanded that all loan sales be recorded to ensure the appropriate party was actually foreclosing.
It’s gotten to the point, in Flynn’s case, that a judge has blocked an eviction and nullified a sale after the fact.
It’s not hard to imagine other homeowners trying the same tack. It’s also not hard to imagine ousted homeowners, unhappy with how their servicer handled their modification request, asking a court to rescind the foreclosure sale of a home where a new family already is living.
You can see where this is going, and it’s not good. Title insurance companies are warning lenders they might not be able to guarantee clean title to a property if a sale is nullified because of missing recordings. Chicago Title Insurance Co. attorney Greg Nelson said it’s telling lenders that if MERS is involved in a mortgage, the lender must ensure the mortgage’s chain of ownership is properly recorded before it can launch a foreclosure outside a courtroom.
“Hopefully the lenders will be as motivated to do things right as we are,” Nelson said.
In court
The one clear route around this mess is one nobody wants to take: judicial foreclosure.
Lenders have the option of getting a judge’s ruling on a foreclosure.
Few do so because it normally takes much longer and costs more, too. Loan servicers or trustees undoubtedly will have to defend the ownership history. It’s not always clear they can.
Even after a judgment and sheriff’s sale, state law gives borrowers six months to come up with enough cash to reclaim the property. This is called the borrower’s right of redemption. So, in reality, lenders are looking at a year or more before a foreclosure process actually finishes cleanly.
Borrowers, on the other hand, can be pursued by lenders for deficiency if they leave the house before the foreclosure sale is completed, Abbe notes. The deficiency is the difference between the amount owed on a mortgage and the amount it was sold for in foreclosure. In nonjudicial foreclosure, the lender eats that difference.
“It’s potentially immobilizing for borrowers who may want to move out and move to some other state and try to find a job somewhere else,” Abbe said.
What else could happen next to resolve all this?
High court ruling: A couple judges have gone against the majority of opinions on the legal standing of MERS. Attorneys and judges alike are trying to agree on a case that can be sent to the Oregon Supreme Court so the matter can be resolved once and for all. Best-case scenario, we’re probably talking a decision that’s six months away. More likely it’ll take at least a year.
New law: An end-run effort by the mortgage industry to get the Legislature to change the law fell flat amid public outcry against the broad-scale move. Now it’ll probably be February before a fix can be obtained this way.
Rerecording: Lenders could go back and try to rerecord mortgage documents. But many lenders have gone out of business, so it’s unlikely trustees could get the appropriate signatures in all cases.
Good faith negotiations: An even cleaner way out would be for banks to negotiate settlements with homeowners. The banks could pay them to give them clean title to the home. They could reduce principal, something servicers and investors have so far been reluctant to do.
“There are common-sense ways of resolving this, and the banks are deer in the headlights right now,” said Phil Querin, a real estate attorney in Portland.
Lawyers will tell you the Columbia County judge’s decision sets no legal precedent. It’s just one judge sitting in St. Helens and her interpretation of events.
But to homeowners asked time and again to resubmit their paperwork for modifications they never receive, or those being foreclosed upon while they await modification, it’s sweet justice.
“Most of these homeowners aren’t looking for a free handout,” said Nancie Koerber, co-founder of Good Grief America, a nonprofit near Central Point that helps homeowners fight foreclosure. “They’re just looking for someone to work with them. Most of the banks are not, unless you hold their feet to the fire.”
For the rest of us, it’s affirmation that Oregon’s housing market is nowhere near recovery.
Might as well find a good seat around the house and get used to it.
July 1, 2011
http://www.oregonlive.com/finance/index.ssf/2011/07/what_oregons_foreclosure_mess_means_and_when_itll.html
“I can assure you that this type of criminal fraud is rampant across the nation.” John O’Brien, Essex S. Dist. Registrar.
Martha Flynn, the Vernonia woman who persuaded a judge to block her eviction and void a bank’s foreclosure sale, looms a hero in many distressed homeowners’ minds today.
This even as she’s not sure where she’ll be living next month.
The same uncertainty also applies to Oregon’s housing market. With the status of potentially thousands of foreclosures and past sales up in the air, it’s unclear how long the housing crisis will drag on the broader market.
And there’s not much immediately we can do about it.
“It’s hard to predict where things are going to go,” said Cleve Abbe, state underwriting counsel for Fidelity National Title Group in Portland.
Since 2007, lenders have launched about 100,000 foreclosure actions in Oregon, according to RealtyTrac, one foreclosure data service. That’s resulted in just fewer than 35,000 sales. But sales have slowed this year. Through May, they’re on pace to total just more than 9,000 in 2011, down from 15,500 foreclosure sales last year, RealtyTrac data show.
Signs of life in the broader housing market are sporadic. Portland-area prices were down 9 percent over the past year through May, hovering at levels last seen in the winter of 2004, according to last week’s S&P/Case-Shiller Home Price Index report.
Yet backlogs are dropping. Lane County’s 12-month inventory in January has fallen to a 5.2-month inventory in June, said Cory T. Neu, a broker with Neu Real Estate in Marcola.
Realtors in Portland report hot micromarkets, with homes going in one day in inner Southeast Portland neighborhoods.
But sales activity around the larger metropolitan Portland has fallen in the first five months of the year, compared with the same period a year ago. New listings, in fact, have fallen 26 percent.
“I always caution people when they ask about ‘What’s the market doing?’” Neu said “Well, which market are we talking about?”
The foreclosure problem in Oregon
For now, we’re focusing on the foreclosure market — and the heart of its legal turmoil in Oregon.
Brian Feulner/ The OregonianA Columbia County judge blocked U.S. Bank from evicting Martha Flynn from her Vernonia home after it was bought by the bank in foreclosure.
For years, lenders have sold and resold mortgages to investors to broaden the market for home loans and make a boatload of money upfront on fees.
Along the way, they tried to avoid the traditional process of recording those transactions in local county recorders offices. But as the housing market collapsed and servicers had to foreclose on delinquent borrowers, the mortgage industry discovered a certain inconvenient truth.
The Mortgage Electronic Registration System — set up to avoid the cost and logistics of recording all of these sales — didn’t jibe with Oregon law.
For a foreclosure to proceed quickly and outside the auspices of a judge, the state requires that the loan’s ownership be properly and clearly documented. But the electronic recording system set up by banks, servicers and title companies took enough shortcuts to compel a number of federal judges to halt foreclosures. Oregon law, they ruled, demanded that all loan sales be recorded to ensure the appropriate party was actually foreclosing.
It’s gotten to the point, in Flynn’s case, that a judge has blocked an eviction and nullified a sale after the fact.
It’s not hard to imagine other homeowners trying the same tack. It’s also not hard to imagine ousted homeowners, unhappy with how their servicer handled their modification request, asking a court to rescind the foreclosure sale of a home where a new family already is living.
You can see where this is going, and it’s not good. Title insurance companies are warning lenders they might not be able to guarantee clean title to a property if a sale is nullified because of missing recordings. Chicago Title Insurance Co. attorney Greg Nelson said it’s telling lenders that if MERS is involved in a mortgage, the lender must ensure the mortgage’s chain of ownership is properly recorded before it can launch a foreclosure outside a courtroom.
“Hopefully the lenders will be as motivated to do things right as we are,” Nelson said.
In court
The one clear route around this mess is one nobody wants to take: judicial foreclosure.
Lenders have the option of getting a judge’s ruling on a foreclosure.
Few do so because it normally takes much longer and costs more, too. Loan servicers or trustees undoubtedly will have to defend the ownership history. It’s not always clear they can.
Even after a judgment and sheriff’s sale, state law gives borrowers six months to come up with enough cash to reclaim the property. This is called the borrower’s right of redemption. So, in reality, lenders are looking at a year or more before a foreclosure process actually finishes cleanly.
Borrowers, on the other hand, can be pursued by lenders for deficiency if they leave the house before the foreclosure sale is completed, Abbe notes. The deficiency is the difference between the amount owed on a mortgage and the amount it was sold for in foreclosure. In nonjudicial foreclosure, the lender eats that difference.
“It’s potentially immobilizing for borrowers who may want to move out and move to some other state and try to find a job somewhere else,” Abbe said.
What else could happen next to resolve all this?
High court ruling: A couple judges have gone against the majority of opinions on the legal standing of MERS. Attorneys and judges alike are trying to agree on a case that can be sent to the Oregon Supreme Court so the matter can be resolved once and for all. Best-case scenario, we’re probably talking a decision that’s six months away. More likely it’ll take at least a year.
New law: An end-run effort by the mortgage industry to get the Legislature to change the law fell flat amid public outcry against the broad-scale move. Now it’ll probably be February before a fix can be obtained this way.
Rerecording: Lenders could go back and try to rerecord mortgage documents. But many lenders have gone out of business, so it’s unlikely trustees could get the appropriate signatures in all cases.
Good faith negotiations: An even cleaner way out would be for banks to negotiate settlements with homeowners. The banks could pay them to give them clean title to the home. They could reduce principal, something servicers and investors have so far been reluctant to do.
“There are common-sense ways of resolving this, and the banks are deer in the headlights right now,” said Phil Querin, a real estate attorney in Portland.
Lawyers will tell you the Columbia County judge’s decision sets no legal precedent. It’s just one judge sitting in St. Helens and her interpretation of events.
But to homeowners asked time and again to resubmit their paperwork for modifications they never receive, or those being foreclosed upon while they await modification, it’s sweet justice.
“Most of these homeowners aren’t looking for a free handout,” said Nancie Koerber, co-founder of Good Grief America, a nonprofit near Central Point that helps homeowners fight foreclosure. “They’re just looking for someone to work with them. Most of the banks are not, unless you hold their feet to the fire.”
For the rest of us, it’s affirmation that Oregon’s housing market is nowhere near recovery.
Might as well find a good seat around the house and get used to it.
Are You Ready? 6 – 7 Million More Foreclosures. Politicians criticize Fannie Mae & Freddie Mac out of one side of their mouths. Read: Who got the most money from FNMA.
Are You Ready? 6 – 7 Million More Foreclosures. Politicians criticize Fannie Mae & Freddie Mac out of one side of their mouths. Read: Who got the most money from FNMA. (by Joe /vera)
Scott Simon, a managing director and head of global asset-giant Pimco’s mortgage- and asset-backed securities teams, helped his firm avoid losses that hit Wall Street. is credited with foreseeing the housing crash and helping his firm dodge losses that plagued Wall Street.
He was recently asked if more foreclosures are expected to hit the market? He responded that over the next three years it could be as many as 6 -7 million more foreclosures.
Pulled the following from an old report. It was called shot in the Fannie Mae.
1997
Fannie Mae is a GSE (Govt. Sponsored Entity) regulated by Congress.
Fannie Mae buys mortgages from other companies.
It is backed by the taxpayers for all losses, but keeps all profits.
1998
Banks begin making thousands of bad loans,0 down, no documentation, for 120%! (1998 – 2008).
Executives at Fannie receive huge bonuses if loan targets are met.
Franklin Raines and Jamie Garelick from the Clinton Administration are appointed to run Fannie Mae.
2003
President Bush proposes a new oversight committee to clean up Fannie Mae, but Democrats derail the effort.
1999-2004
Raines earns $100 million in bonuses.
Garelick earns $75 million in bonuses.
In 2004, Enron collapses, congress investigates, Executives Skilling & Lay go to jail, for fraudulent bookkeeping.
Congress responds with the Sorbanes-Oxley Act, more heavy regulation of corporations.
2004
An OMB investigation finds massive fraudulent bookkeeping at Fannie Mae.
False numbers triggered executive bonuses every year.
Congress holds no hearings, no one goes to jail, or is punished.
WHY NOT?
1999-2005
Fannie Mae gives millions to Democratic causes, examples: Jesse Jackson & ACORN.
Fannie Mae pays millions to 354 congressmen and senators, from both parties.
Who got the most money?
#1 Sen. Christopher Dodd , (D-CT) Chairman of the Banking, Housing, & Urban Affairs Committee
#2 Sen. Barack Obama , (D-IL) Federal Financial Management Committee
#3 Sen. Chuck Schumer, (D-NY) Chairman of the Finance Committee
#4 Rep. Barney Frank, (D-MA) Chairman of the House Financial Services Committe
2005
Franklin Raines & top execs are forced to resign from Fannie Mae.
They do not go to jail.
There is no media “perp. walk.”
They keeps all of their bonuses
They finally pay $31.4 million in civil fines.
2005
The Federal Housing Enterprise Regulatory Reform Act is sponsored by: Sen. John McCain, (R-AZ) Armed Services, & Commerce, Science, & Transportation, “If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”
None of the top 4 recipients support the legislation.
The reform act is blocked by Democrats, never even making it out of committee.
None of the politicians return any of the money, tainted by fraud.
2008
Fannie Mae & Freddie Mac go bankrupt and the govt. takes them over completely.
Lehman Brothers, goes bankrupt from investing in bad mortgages.
AIG get $85 million in loan guarantees, after insuring bad loans & projects.
Taxpayers will ultimately pay BILLIONS.
2008
Franklin Raines is now an advisor to the Obama Campaign which wants the govt. to take over more of the economy.
Did government involvement in the mortgage market work out?
How will even MORE government involvement make it better? Do you want to be Sweden?
McCain favors revising regulations & loan standards, selling off Fannie & Freddie.
Sources
Congressional Record, 5/25/06
“Hannity & Colmes,” Fox News, 9/16-9/17/08
Herald Tribune, 4/18/08
New York Times, 9/13/03
www. govtrack.com, 9/17/08
This was produced as a Power Point presentation by an Adjunct Instructor a Dennis Jantz in 2008.
Scott Simon, a managing director and head of global asset-giant Pimco’s mortgage- and asset-backed securities teams, helped his firm avoid losses that hit Wall Street. is credited with foreseeing the housing crash and helping his firm dodge losses that plagued Wall Street.
He was recently asked if more foreclosures are expected to hit the market? He responded that over the next three years it could be as many as 6 -7 million more foreclosures.
Pulled the following from an old report. It was called shot in the Fannie Mae.
1997
Fannie Mae is a GSE (Govt. Sponsored Entity) regulated by Congress.
Fannie Mae buys mortgages from other companies.
It is backed by the taxpayers for all losses, but keeps all profits.
1998
Banks begin making thousands of bad loans,0 down, no documentation, for 120%! (1998 – 2008).
Executives at Fannie receive huge bonuses if loan targets are met.
Franklin Raines and Jamie Garelick from the Clinton Administration are appointed to run Fannie Mae.
2003
President Bush proposes a new oversight committee to clean up Fannie Mae, but Democrats derail the effort.
1999-2004
Raines earns $100 million in bonuses.
Garelick earns $75 million in bonuses.
In 2004, Enron collapses, congress investigates, Executives Skilling & Lay go to jail, for fraudulent bookkeeping.
Congress responds with the Sorbanes-Oxley Act, more heavy regulation of corporations.
2004
An OMB investigation finds massive fraudulent bookkeeping at Fannie Mae.
False numbers triggered executive bonuses every year.
Congress holds no hearings, no one goes to jail, or is punished.
WHY NOT?
1999-2005
Fannie Mae gives millions to Democratic causes, examples: Jesse Jackson & ACORN.
Fannie Mae pays millions to 354 congressmen and senators, from both parties.
Who got the most money?
#1 Sen. Christopher Dodd , (D-CT) Chairman of the Banking, Housing, & Urban Affairs Committee
#2 Sen. Barack Obama , (D-IL) Federal Financial Management Committee
#3 Sen. Chuck Schumer, (D-NY) Chairman of the Finance Committee
#4 Rep. Barney Frank, (D-MA) Chairman of the House Financial Services Committe
2005
Franklin Raines & top execs are forced to resign from Fannie Mae.
They do not go to jail.
There is no media “perp. walk.”
They keeps all of their bonuses
They finally pay $31.4 million in civil fines.
2005
The Federal Housing Enterprise Regulatory Reform Act is sponsored by: Sen. John McCain, (R-AZ) Armed Services, & Commerce, Science, & Transportation, “If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”
None of the top 4 recipients support the legislation.
The reform act is blocked by Democrats, never even making it out of committee.
None of the politicians return any of the money, tainted by fraud.
2008
Fannie Mae & Freddie Mac go bankrupt and the govt. takes them over completely.
Lehman Brothers, goes bankrupt from investing in bad mortgages.
AIG get $85 million in loan guarantees, after insuring bad loans & projects.
Taxpayers will ultimately pay BILLIONS.
2008
Franklin Raines is now an advisor to the Obama Campaign which wants the govt. to take over more of the economy.
Did government involvement in the mortgage market work out?
How will even MORE government involvement make it better? Do you want to be Sweden?
McCain favors revising regulations & loan standards, selling off Fannie & Freddie.
Sources
Congressional Record, 5/25/06
“Hannity & Colmes,” Fox News, 9/16-9/17/08
Herald Tribune, 4/18/08
New York Times, 9/13/03
www. govtrack.com, 9/17/08
This was produced as a Power Point presentation by an Adjunct Instructor a Dennis Jantz in 2008.
Friday, July 1, 2011
Pimco’s Simon: There Was Never a Housing Recovery
Are You Ready For 6 to 7 Million More Foreclosures. Politicians criticize Fannie Mar & Freddie Mac out of one side of their mouths. (by Joe Vera)
Pimco’s Simon: There Was Never a Housing Recovery
By Dawn Wotapka
Bearish outlooks on housing aren’t hard to find these days, but one stands out even for this market.
Scott Simon, a managing director and head of global asset-giant Pimco’s mortgage- and asset-backed securities teams, is credited with foreseeing the housing crash and helping his firm dodge losses that plagued Wall Street.
In a lengthy Q&A posted on Pimco’s website today, Mr. Simon discusses everything from foreclosures to Fannie Mae and Freddie Mac. Calling his outlook “dour” would be generous—home prices could fall more and the pain could drag on for a decade or more.
Excerpts are below. (Both the questions and answers are from Pimco.)
Q: Could you begin by framing the current state of the housing market? Do you see a double dip market?
A: We are seeing signs of what we have long suspected: There never was a housing recovery. In fact, I argue the market is in a fragile state that is far easier to break than to fix. If policy makers alter the government’s current approach to housing and unwittingly break the market, they may not be able to repair the damage within the foreseeable future. … We anticipate an average decline from here of about 6% to 8% in prices across the country.
Q: Are more foreclosures expected to hit the market?
A: We see potential for a substantial number of foreclosures over the next three years – as many as 6 million to 7 million additional foreclosures, on top of the roughly 2 million we estimate have already occurred. Foreclosures may peak in about two years, but the numbers could still be high for a few years after that and then likely taper off.
Q: Let’s switch gears to discuss housing finance. Is the home-loan market still reliant on government support?
A: Yes, government is essentially considered the mortgage market today, but this needs to be put in context. Government has been involved in housing for some 70 years with pro-housing subsidies of all sorts, from homebuyer tax credits to guaranteeing loans to mortgage interest tax deductions. … If we ended government support in all forms, mortgage rates could rise significantly, because home loan investors would need to be compensated for greater credit risk, and loan availability could decline. Higher rates and less mortgage availability would put downward pressure on home values, with potentially negative consequences for the market and also for the economy as a result of wealth destruction and consumer confidence declining.
Q: What are politicians and policy makers proposing to do about Fannie Mae and Freddie Mac? Are there serious alternatives being discussed to provide liquidity to the market?
A: From what I have observed in visits to D.C., when the conversation comes around to Fannie and Freddie it is very easy for people to get irrational. Fannie and Freddie seem to draw negativity like giant lightning rods because they lost so much money. But what is often overlooked is that the majority of losses have not come from their core business: 20% down-payment, prime mortgages. They got in trouble because they expanded beyond their core business to maintain market share. …But politicians from both parties look at the losses of Fannie and Freddie and think, “I’d better say Fannie and Freddie stink and we should shut them down and that they are evil.” But the market still relies heavily on Fannie and Freddie. If policymakers err in tinkering with that support while the market is so fragile, the unintended consequences could be extreme.
Q: And when do you expect action on this issue?
A: Despite the heated rhetoric, there appears to be no rush to kill Fannie and Freddie, from what I have observed. Initially, we heard talk of getting the government out of housing in two years, and lately the talk is five to seven years. I think in Washington-speak, five-to-seven years more likely means 10-to-15 years, which is actually a more realistic timeframe in my opinion – by then the housing market should hopefully be on firmer ground.
Pimco’s Simon: There Was Never a Housing Recovery
By Dawn Wotapka
Bearish outlooks on housing aren’t hard to find these days, but one stands out even for this market.
Scott Simon, a managing director and head of global asset-giant Pimco’s mortgage- and asset-backed securities teams, is credited with foreseeing the housing crash and helping his firm dodge losses that plagued Wall Street.
In a lengthy Q&A posted on Pimco’s website today, Mr. Simon discusses everything from foreclosures to Fannie Mae and Freddie Mac. Calling his outlook “dour” would be generous—home prices could fall more and the pain could drag on for a decade or more.
Excerpts are below. (Both the questions and answers are from Pimco.)
Q: Could you begin by framing the current state of the housing market? Do you see a double dip market?
A: We are seeing signs of what we have long suspected: There never was a housing recovery. In fact, I argue the market is in a fragile state that is far easier to break than to fix. If policy makers alter the government’s current approach to housing and unwittingly break the market, they may not be able to repair the damage within the foreseeable future. … We anticipate an average decline from here of about 6% to 8% in prices across the country.
Q: Are more foreclosures expected to hit the market?
A: We see potential for a substantial number of foreclosures over the next three years – as many as 6 million to 7 million additional foreclosures, on top of the roughly 2 million we estimate have already occurred. Foreclosures may peak in about two years, but the numbers could still be high for a few years after that and then likely taper off.
Q: Let’s switch gears to discuss housing finance. Is the home-loan market still reliant on government support?
A: Yes, government is essentially considered the mortgage market today, but this needs to be put in context. Government has been involved in housing for some 70 years with pro-housing subsidies of all sorts, from homebuyer tax credits to guaranteeing loans to mortgage interest tax deductions. … If we ended government support in all forms, mortgage rates could rise significantly, because home loan investors would need to be compensated for greater credit risk, and loan availability could decline. Higher rates and less mortgage availability would put downward pressure on home values, with potentially negative consequences for the market and also for the economy as a result of wealth destruction and consumer confidence declining.
Q: What are politicians and policy makers proposing to do about Fannie Mae and Freddie Mac? Are there serious alternatives being discussed to provide liquidity to the market?
A: From what I have observed in visits to D.C., when the conversation comes around to Fannie and Freddie it is very easy for people to get irrational. Fannie and Freddie seem to draw negativity like giant lightning rods because they lost so much money. But what is often overlooked is that the majority of losses have not come from their core business: 20% down-payment, prime mortgages. They got in trouble because they expanded beyond their core business to maintain market share. …But politicians from both parties look at the losses of Fannie and Freddie and think, “I’d better say Fannie and Freddie stink and we should shut them down and that they are evil.” But the market still relies heavily on Fannie and Freddie. If policymakers err in tinkering with that support while the market is so fragile, the unintended consequences could be extreme.
Q: And when do you expect action on this issue?
A: Despite the heated rhetoric, there appears to be no rush to kill Fannie and Freddie, from what I have observed. Initially, we heard talk of getting the government out of housing in two years, and lately the talk is five to seven years. I think in Washington-speak, five-to-seven years more likely means 10-to-15 years, which is actually a more realistic timeframe in my opinion – by then the housing market should hopefully be on firmer ground.
URGENT NOTICE TO ALL AGENTS AND PROPERTY OWNERS
URGENT NOTICE TO ALL AGENTS AND PROPERTY OWNERS
If found guilty of breaching your fiduciary duties and exemplary damages are awarded, the plaintiff can come at you personally, your insurance company cannot pay for you and you may not be able discharge the judgement in bankruptcy.
A contractor builds a home and it to John Doe who gets a loan from a major Bank. The Bank bundles the loan with other loans and sells it to an investment pool (a process called securitization). The Bank does not endorse the note for securitization. The note is assigned several times from within the investment pool. John Does’ property is foreclosed. The property is “sold” as an REO. John Doe then demands return of his property from the occupant. The foreclosing entity, trustee, and agents did not have legal capacity to foreclose. The occupant who thinks he is the owner is in possession of property wrongfully taken, “stolen” property. Both John Doe and the occupant of John Does’ property sue the loan originator, bank, investment pool, title, escrow, real estate agent, etc.
THIS STORY IS TAKEN FROM ACTUAL FACTS NOW OCCURING.
Go to www.joeveraseminars.com. Click on Course Descriptions and then on Real Estate Pro L1.
Joe Vera
Read this carefully and to the end if you value your license — or get sued and lose it.
On June 29, 2011, at the Annual Conference of The International Association of Clerks, Recorders, Election Officials and Treasurers (IACREOT), Register John O’Brien released a legal affidavit, an audit that examined assignments of mortgages recorded in Essex Southern District Registry of Deeds issued to and from JPMorgan Chase Bank, Wells Fargo Bank, and Bank of America during 2010. In total, 565 assignments related to 473 unique mortgages were analyzed.
Only 16% of assignments of mortgage are valid
75% of assignments of mortgage are invalid.
9% of assignments of mortgage are questionable
27% of the invalid assignments are fraudulent, 35% are “robo-signed” and 10% violate the Massachusetts Mortgage Fraud Statute.
The identity of financial institutions that are current owners of the mortgages could only be determined for 287 out of 473 (60%)
“,,, [the] standards of commerce by which the banks originated, sold and securitized mortgages are so fatally flawed that the institutions, including many pension funds, that purchased these mortgages don’t actually own them because the assignments of mortgage were never prepared, executed and delivered to them in the normal course of business at the time of the transaction. In a blatant attempt to engineer a ‘fix’ to the problem, the banks set up in-house document execution teams, or outsourced the preparation of their assignments to third parties who manufactured them out of thin air without researching who really owns the mortgage.
… and I can tell you that every single assignment of mortgage that was recorded for the purpose of foreclosing the homeowner is invalid, overtly fraudulent, or criminally fraudulent. My findings … (those) who are not in foreclosure, and have never been delinquent in their payments also have clouds on title due to the recording of defective and invalid discharges and assignments of mortgage.” said the auditor Marie McDonnell.
[If you say this won't happen in CA, consider that I have already been asked to speak to several cities in CA. It will happen. I am involved with such a case at this very moment. Joe Vera]
“… The Audit makes the finding that this was not only a MERS problem, but a scheme also perpetuated by MERS shareholder banks such Bank of America, Wells Fargo, JP Morgan and others. I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset – their homes. This is disgusting, and this is criminal,” said O’Brien.
O’Brien continued “Once again I am asking … state Attorney’s General to follow the lead of New York Attorney General Eric Schneiderman and stop any settlement talks with the banks. … I can assure you that this type of criminal fraud is rampant across the nation. This leaves me to question why anyone would consider settling with these banks until we know the full extent of the damage that they have caused to the homeowners chain of title across this country and the amount of money they have bilked the taxpayers for their failure to pay recording fees.”
If found guilty of breaching your fiduciary duties and exemplary damages are awarded, the plaintiff can come at you personally, your insurance company cannot pay for you and you may not be able discharge the judgement in bankruptcy.
A contractor builds a home and it to John Doe who gets a loan from a major Bank. The Bank bundles the loan with other loans and sells it to an investment pool (a process called securitization). The Bank does not endorse the note for securitization. The note is assigned several times from within the investment pool. John Does’ property is foreclosed. The property is “sold” as an REO. John Doe then demands return of his property from the occupant. The foreclosing entity, trustee, and agents did not have legal capacity to foreclose. The occupant who thinks he is the owner is in possession of property wrongfully taken, “stolen” property. Both John Doe and the occupant of John Does’ property sue the loan originator, bank, investment pool, title, escrow, real estate agent, etc.
THIS STORY IS TAKEN FROM ACTUAL FACTS NOW OCCURING.
Go to www.joeveraseminars.com. Click on Course Descriptions and then on Real Estate Pro L1.
Joe Vera
Read this carefully and to the end if you value your license — or get sued and lose it.
On June 29, 2011, at the Annual Conference of The International Association of Clerks, Recorders, Election Officials and Treasurers (IACREOT), Register John O’Brien released a legal affidavit, an audit that examined assignments of mortgages recorded in Essex Southern District Registry of Deeds issued to and from JPMorgan Chase Bank, Wells Fargo Bank, and Bank of America during 2010. In total, 565 assignments related to 473 unique mortgages were analyzed.
Only 16% of assignments of mortgage are valid
75% of assignments of mortgage are invalid.
9% of assignments of mortgage are questionable
27% of the invalid assignments are fraudulent, 35% are “robo-signed” and 10% violate the Massachusetts Mortgage Fraud Statute.
The identity of financial institutions that are current owners of the mortgages could only be determined for 287 out of 473 (60%)
“,,, [the] standards of commerce by which the banks originated, sold and securitized mortgages are so fatally flawed that the institutions, including many pension funds, that purchased these mortgages don’t actually own them because the assignments of mortgage were never prepared, executed and delivered to them in the normal course of business at the time of the transaction. In a blatant attempt to engineer a ‘fix’ to the problem, the banks set up in-house document execution teams, or outsourced the preparation of their assignments to third parties who manufactured them out of thin air without researching who really owns the mortgage.
… and I can tell you that every single assignment of mortgage that was recorded for the purpose of foreclosing the homeowner is invalid, overtly fraudulent, or criminally fraudulent. My findings … (those) who are not in foreclosure, and have never been delinquent in their payments also have clouds on title due to the recording of defective and invalid discharges and assignments of mortgage.” said the auditor Marie McDonnell.
[If you say this won't happen in CA, consider that I have already been asked to speak to several cities in CA. It will happen. I am involved with such a case at this very moment. Joe Vera]
“… The Audit makes the finding that this was not only a MERS problem, but a scheme also perpetuated by MERS shareholder banks such Bank of America, Wells Fargo, JP Morgan and others. I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset – their homes. This is disgusting, and this is criminal,” said O’Brien.
O’Brien continued “Once again I am asking … state Attorney’s General to follow the lead of New York Attorney General Eric Schneiderman and stop any settlement talks with the banks. … I can assure you that this type of criminal fraud is rampant across the nation. This leaves me to question why anyone would consider settling with these banks until we know the full extent of the damage that they have caused to the homeowners chain of title across this country and the amount of money they have bilked the taxpayers for their failure to pay recording fees.”
75% of Massachusetts County Mortgage Assignments in are Invalid
http://thelogosproject.com/?p=417
75% of Massachusetts County mortgage assignments in are invalid. This is a crime. Attorneys General need to investigate a crime not negotiate with criminals.
Three-quarters of mortgage assignments issued to and from JPMorgan Chase (JPM: 40.21 +1.69%), Wells Fargo (WFC: 27.72 +0.84%) and Bank of America (BAC: 11.05 +2.13%) during 2010 in the Southern Essex Registry of Deeds in Massachusetts are invalid, according to an independent review of documents.
An audit revealed 75% of mortgage assignments are invalid, 16% of mortgage assignments in the Southern Essex Registry are valid and 9% of assignments are questionable. About 27% of invalid assignments are fraudulent while 35% are robo-signed and 10% violate the Massachusetts Mortgage Fraud Statue.
“What this means is that the degradation in standards of commerce by which the banks originated, sold and securitized these mortgages are so fatally flawed that the institutions, including many pension funds, that purchased these mortgages don’t actually own them,” “The assignments of mortgage were never prepared, executed and delivered to them in the normal course of business at the time of the transaction.” according to the analysts.
What could make anyone think that the results would be any different in other counties? Why are state and federal governments and policing agencies negotiating with Banks for a miserable settlement?
75% of Massachusetts County mortgage assignments in are invalid. This is a crime. Attorneys General need to investigate a crime not negotiate with criminals.
Three-quarters of mortgage assignments issued to and from JPMorgan Chase (JPM: 40.21 +1.69%), Wells Fargo (WFC: 27.72 +0.84%) and Bank of America (BAC: 11.05 +2.13%) during 2010 in the Southern Essex Registry of Deeds in Massachusetts are invalid, according to an independent review of documents.
An audit revealed 75% of mortgage assignments are invalid, 16% of mortgage assignments in the Southern Essex Registry are valid and 9% of assignments are questionable. About 27% of invalid assignments are fraudulent while 35% are robo-signed and 10% violate the Massachusetts Mortgage Fraud Statue.
“What this means is that the degradation in standards of commerce by which the banks originated, sold and securitized these mortgages are so fatally flawed that the institutions, including many pension funds, that purchased these mortgages don’t actually own them,” “The assignments of mortgage were never prepared, executed and delivered to them in the normal course of business at the time of the transaction.” according to the analysts.
What could make anyone think that the results would be any different in other counties? Why are state and federal governments and policing agencies negotiating with Banks for a miserable settlement?
Oregon Judge Voids Foreclosure Sale, casting Doubt on Others
Judge Jenefer Grant, “I am concluding the recording never occurred, MERS does not become the beneficiary, irrespective of what is stated in the deed of trust.”
Oregon judge voids foreclosure sale, casting doubt on others
Published: Wednesday, June 29, 2011, 7:48 PM Updated: Thursday, June 30, 2011, 11:39 AM
By Brent Hunsberger, The Oregonian
Brian Feulner/The OregonianU.S. Bank says it will cease eviction action against Martha Flynn while it determines its next step. That could include demanding the loan’s previous servicer, a unit of Wells Fargo, take the mortgage back, legal experts say.
A Columbia County judge has blocked U.S. Bank from evicting a Vernonia woman whose home it purchased in foreclosure, concluding in a case with far-reaching implications that her lenders had not properly recorded mortgage documents.
Last week’s action appears to be the first in which an Oregon judge has halted an eviction and declared a foreclosure sale void after the fact. The ruling, if it stands, raises questions about the validity of other recent foreclosures in the state and could create serious problems for lenders and title companies, as well as for buyers of such properties.
“It’s a victory for a lot of people,” said Martha Flynn, 62, who challenged the eviction and whose ability to stay in her home remains in doubt. “I was fighting for the principle of the thing.”
A U.S. Bank spokeswoman said the bank would cease further eviction action and assess its “appropriate next steps.”
Nearly all foreclosures in the state occur without a judge’s involvement under so-called nonjudicial proceedings. But this ruling, legal observers say, could potentially divert more foreclosure actions into courtrooms, a more time-consuming and costly proposition that could exacerbate the state’s housing slump.
“This will certainly be problematic for lenders,” said David Ambrose, a Portland real-estate attorney.
It also casts doubt on the validity of already completed foreclosure sales in which lenders resold mortgages without recording the sales in county recorder offices. Many of those questionable transactions, including Flynn’s, involve the Mortgage Electronic Recording System.
MERS was created by the mortgage industry to rapidly securitize loans without recording them. Federal judges in Oregon have ruled that MERS-involved foreclosure actions violated state recording law. MERS also has been tied to so-called robo-signing scandals that prompted a 50-state investigation of the nation’s largest loan servicers and banks.
“Our hope is the banks will take a much more sincere effort at resolving matters directly with homeowners,” said Thomas H. Cutler, an attorney with Harris Berne Chirstensen in Lake Oswego, who represented Flynn.
A Wells Fargo & Co. unit foreclosed on Flynn after she fell behind in her payments. Wells Fargo sold the mortgage to U.S. Bank, the second lienholder, in December 2010, Cutler said.
Columbia County records show U.S. Bank paid $54,000 for the home, which had been valued at $134,000. Flynn hired Cutler a few months later to try to stop the foreclosure.
U.S. Bank tried to evict Flynn from her Vernonia home during a May 24 court hearing. But on June 23, Columbia County Circuit Judge Jenefer Grant ruled against the bank and awarded legal costs to Flynn.
Grant found that the original lender, Eagle Home Mortgage, held beneficial interest in the property. But while Eagle Home eventually sold the mortgage to other parties, the exchanges were never recorded, or assigned, in the county’s recorder office.
“I am concluding the recording never occurred,” she wrote in a two-page ruling. “MERS does not become the beneficiary, irrespective of what is stated in the deed of trust.”
Flynn discovered on Freddie Mac’s website that the quasi-government loan insurer owned her loan on the date of the foreclosure sale, Cutler said. But Freddie Mac’s ownership had not been recorded in county records, as required by state recording law, Grant ruled. Cutler obtained the services of an expert witness to track the ownership trail of her mortgage.
“We were able to show that Wells Fargo didn’t have the right to bring foreclosure because there were unrecorded assignments of the deed of trust,” said Tim Stephenson of MSA Associates, which audits mortgage loan histories for homeowners and attorneys.
A spokesman for Wells Fargo Home Loans said it was reviewing the judge’s decision to better understand it.
“We work hard to keep our customers in their homes when they encounter difficulties and view foreclosure as a measure of last resort,” spokesman Jim Hines said.
In an interview, Flynn said she’s owned her three-bedroom house for 20 years and had built up significant equity. She fell behind making payments after quitting her job answering customer service calls for credit card companies at her home.
Since then, she’s lived off unemployment, social security and a small business incubating and selling quail eggs. She sought a modification but could not get Wells Fargo to agree, despite repeatedly submitting documents.
“Even though I couldn’t afford an attorney, I thought, ‘What’s the harm?’” Flynn said. “Most people just give up.”
It’s unclear what this all means for Flynn. She says she’s prepared to move out despite the victory, given the uncertainty of who actually owns title to her home and what must be done to foreclose legally.
“Even though this is a great legal win for her, it still leaves her in limbo,” Cutler said. “There’s no clear choice for her. And there’s no big money at the end of this rainbow, either.”
Meanwhile U.S. Bank, which spokesperson Teri Charest noted “played no role in the title documentation process” is currently trying to ascertain its next steps.
That could include demanding her previous loan servicer, a Wells Fargo Bank unit, take the mortgage back, legal experts say.
The path will remain muddled for the mortgage industry until a definitive case reaches the Oregon Supreme Court or lenders decide to take a different strategy and negotiate settlements with distressed homeowners, real estate attorneys say.
“This is significant,” Ambrose said.
Countrywide Must Still Face MBIA Fraud Claim, New York Appeals Court Rules
Another Fraud claim against BoA. This time by “ … a sophisticated counter- party that cannot sustain a fraud claim.” according to BoA. Why, just why not? (by Joe Vera)
Countrywide Must Still Face MBIA Fraud Claim, New York Appeals Court Rules
By Karen Freifeld – Jun 30, 2011
11:42 AM PT
Bank of America Corp. (BAC) and its Countrywide Financial Corp. unit must face a fraud claim brought by bond insurer MBIA Insurance Corp., an appeals court ruled.
The New York court today upheld an April 2010 trial-court denial of Countrywide’s motion to dismiss the claim against it in the 2008 suit. MBIA alleges that Countrywide fraudulently obtained insurance on billions of dollars of mortgage-backed securities.
MBIA claims the lender falsely represented loan-to-value ratios, debt-to-income ratios and borrowers’ FICO scores; provided prospectuses that falsely represented loans were made in compliance with Countrywide’s underwriting standards; and offered false, misleading or inflated ratings for the loans, according to the decision.
“Because MBIA alleges misrepresentations of present fact, and not future intent, made with the intent to induce MBIA to insure the securitizations, the fraud claim survives,” Associate Justice Rosalyn H. Richter wrote.
MBIA contends that if it had known the representations were false, it would never have guaranteed the notes and suffered losses. As a result of defaults, MBIA alleges, it has been forced to make billions of dollars in claims payments on the insurance agreements, according to the decision.
The appeals court also upheld the dismissal of a negligent- misrepresentation claim in the case. It dismissed entirely a claim for breach of implied duty of good faith and fair dealing, which the lower court narrowed.
Bank Statement
“We continue to believe MBIA is a sophisticated counter- party that cannot sustain a fraud claim, and we continue to have the ability to raise that point with the court at the summary- judgment phase,” Shirley Norton, a spokeswoman for Bank of America, said in an e-mailed statement.
Norton added the bank is pleased the appeals court confirmed the dismissal of the negligent-misrepresentation claim and dismissed the good-faith and fair-dealing claim.
MBIA spokesman Kevin Brown said in an e-mailed statement that the insurer was pleased the appeals court “upheld MBIA’s right to pursue fraud claims against Countrywide, particularly in light of the growing public recognition of fraud and misrepresentations perpetrated by Countrywide and other industry participants.”
The MBIA-Countrywide case isn’t part of the $8.5 billion proposed settlement by Charlotte, North Carolina-based Bank of America with investors in Countrywide Financial mortgage debt, according to Kevin Heine, a spokesman for Bank of New York Mellon, the trustee for securities in the proposed deal.
The appeal is MBIA Insurance Corp. v. Countrywide Home Loans Inc., New York State Supreme Court, Appellate Division, First Department (Manhattan). The lower-court case is MBIA Insurance v. Countrywide, 6028245/2008, New York state Supreme Court (Manhattan).
Wednesday, June 29, 2011
Ally gets Subpoenas from U.S. Investigators on Mortgage Loans
Ally, previously GMAC, got $17.2 Billion in bailouts. They packaged loans sold to pools/trusts that posted a 2Nd quarter loss of $100 million. (by Joe Vera)
Ally gets subpoenas from U.S. investigators on mortgage loansBradley Keoun and Donal Griffin/ Bloomberg News
Ally Financial Inc., the auto and home lender that got a $17.2 billion bailout, said it received subpoenas from the U.S. Department of Justice and the Securities and Exchange Commission relating to how it handled home loans.
——————————————————————————–
The Justice Department is seeking information for an investigation of potential fraud related to “the origination and/or underwriting of mortgage loans,” Ally said today in a filing. The SEC subpoena is in connection with mortgages placed in securitization trusts, the Detroit-based lender said. The subpoenas were received this month, the company said.
Ally, 74 percent owned by the U.S. Treasury Department also said it will record a second-quarter cost of about $100 million to cover losses suffered by trusts that bought its mortgages. A separate April settlement with federal regulators investigating shoddy mortgage practices will also cost between $30 million and $40 million each year through 2013, according to the filing.
Ally, run by former Citigroup Inc. executive Michael Carpenter, is among the five largest U.S. mortgage originators and servicers.
“We are working closely with the Department of Justice and the SEC to deliver the requested information within the required timeframes,” Gina Proia, a spokeswoman for Ally, said in an e- mailed statement.
The disclosures were in an update to the prospectus, initially filed in March, for the company’s planned public share offering. The share sale has been delayed until equity markets improve, a person familiar with the plans said earlier this month.
——————————————————————————–
The $100 million cost will help cover losses on insured mortgages where guarantors later canceled the policies because “they believe certain loan underwriting requirements have not been met,” according to the filing. The mortgages had been sold to trusts, which packaged them into securities to sell to bond investors.
——————————————————————————–
“These payments resulted from a review of securitized mortgages as to which mortgage insurance was rescinded, although no claims have been made against us to date with respect to these mortgages,” Ally said in the filing. Proia said the firm doesn’t expect further charges related to the matter.
The majority of costs linked to Ally’s settlement with federal regulators in April are for “additional servicing, vendor management, legal, compliance, and internal audit personnel,” the firm said in the filing.
State attorneys-general are conducting a nationwide probe into allegations that the largest U.S. loan servicers used sloppy documentation during home seizures.
“We continue to cooperate with the ongoing investigations of various regulators,” Ally said. “Any additional results of these investigations are uncertain, but we expect that Ally or its subsidiaries will become subject to additional penalties, sanctions, or other adverse actions, including monetary fines, that could be substantial and have a material adverse impact on us.”
From The Detroit News: http://detnews.com/article/20110629/BIZ/106290392/Ally-gets-subpoenas-from-U.S.-investigators-on-mortgage-loans#ixzz1QgQzRDWZ
Ally gets subpoenas from U.S. investigators on mortgage loansBradley Keoun and Donal Griffin/ Bloomberg News
Ally Financial Inc., the auto and home lender that got a $17.2 billion bailout, said it received subpoenas from the U.S. Department of Justice and the Securities and Exchange Commission relating to how it handled home loans.
——————————————————————————–
The Justice Department is seeking information for an investigation of potential fraud related to “the origination and/or underwriting of mortgage loans,” Ally said today in a filing. The SEC subpoena is in connection with mortgages placed in securitization trusts, the Detroit-based lender said. The subpoenas were received this month, the company said.
Ally, 74 percent owned by the U.S. Treasury Department also said it will record a second-quarter cost of about $100 million to cover losses suffered by trusts that bought its mortgages. A separate April settlement with federal regulators investigating shoddy mortgage practices will also cost between $30 million and $40 million each year through 2013, according to the filing.
Ally, run by former Citigroup Inc. executive Michael Carpenter, is among the five largest U.S. mortgage originators and servicers.
“We are working closely with the Department of Justice and the SEC to deliver the requested information within the required timeframes,” Gina Proia, a spokeswoman for Ally, said in an e- mailed statement.
The disclosures were in an update to the prospectus, initially filed in March, for the company’s planned public share offering. The share sale has been delayed until equity markets improve, a person familiar with the plans said earlier this month.
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The $100 million cost will help cover losses on insured mortgages where guarantors later canceled the policies because “they believe certain loan underwriting requirements have not been met,” according to the filing. The mortgages had been sold to trusts, which packaged them into securities to sell to bond investors.
——————————————————————————–
“These payments resulted from a review of securitized mortgages as to which mortgage insurance was rescinded, although no claims have been made against us to date with respect to these mortgages,” Ally said in the filing. Proia said the firm doesn’t expect further charges related to the matter.
The majority of costs linked to Ally’s settlement with federal regulators in April are for “additional servicing, vendor management, legal, compliance, and internal audit personnel,” the firm said in the filing.
State attorneys-general are conducting a nationwide probe into allegations that the largest U.S. loan servicers used sloppy documentation during home seizures.
“We continue to cooperate with the ongoing investigations of various regulators,” Ally said. “Any additional results of these investigations are uncertain, but we expect that Ally or its subsidiaries will become subject to additional penalties, sanctions, or other adverse actions, including monetary fines, that could be substantial and have a material adverse impact on us.”
From The Detroit News: http://detnews.com/article/20110629/BIZ/106290392/Ally-gets-subpoenas-from-U.S.-investigators-on-mortgage-loans#ixzz1QgQzRDWZ
Tuesday, June 28, 2011
High School kids were Hired at $10/hr to sign Fraudulent Foreclosure Documents
One company, DocX, alone created at least 2 million mortgage documents nationwide. High School kids were hired at $10/hr to sign fraudulent foreclosure documents.
Sunday, Jun. 19, 2011
Mortgage papers raise Myrtle Beach real estate fraud claims
Signatures on documents used in foreclosure cases under review
By David Wren – dwren@thesunnews.com
Anthony Wise has been selling real estate in the Myrtle Beach area for nearly three decades, but he had never heard of Linda Green until after his home went into foreclosure.
Now, just like hundreds of thousands of people nationwide, Wise is finding that the biggest investment he will ever make – his home – is closely tied to Green … or someone pretending to be her.
Green was a shipping clerk for an automobile parts company before taking a job in the signature room at a mortgage document company called DocX in Alpharetta, Ga., according to news reports.
Myrtle Beach real estate agent Anthony Wise hopes to cancel his home loan based on what he considers a fraudulent document and improper securitization of his mortgage. His home on Haskell Circle in Myrtle Beach is in danger of foreclosure.
DocX helped banks create documents – such as mortgage assignments, which transfer ownership of a home loan from one entity to another – in cases where the documents were missing from the original loan file or never existed in the first place. Those documents then were used in foreclosure proceedings all across the country.
In Horry County, DocX documents have been used in at least 46 foreclosures since 2008.
There are nearly 100 DocX mortgage assignments filed at Horry County’s register of deeds office for homes with loans totaling more than $17 million.
Green’s purported signature is on many of those documents.
And many of those documents are suspected of being fraudulent, according to government regulators.
Questionable signatures
The Federal Reserve Board and a trio of banking oversight groups issued a consent order in April against DocX and its parent company, Lender Processing Services Inc. of Jacksonville, Fla.
Although no fine was issued and the regulators said more study is needed to determine what wrongdoing – if any – occurred, the order has sparked investigations of DocX, which shut down last year, in at least four states and more attorneys general are expected to join the probe.
The regulators’ action took place after a “60 Minutes” television news broadcast on April 3 that showed DocX hired high school students and others for $10 an hour to sit in a sweatshop-like setting and sign thousands of mortgage documents every day, without checking to see if the documents were accurate.
DocX workers signed the documents as if they were vice presidents of national banks. Green, for example, claimed to be the vice president of 20 banks at the same time.
And when the real Linda Green wasn’t signing the mortgage documents, other DocX workers were signing them in her name, according to the report. DocX documents, including those filed in Horry County, show numerous variations of Green’s purported signature.
DocX workers told “60 Minutes” that Linda Green’s name was chosen as the one they all would sign because it is short and easy to spell.
DocX also had public notaries sign the documents, attesting that Linda Green was the vice president of various banks and that they saw her sign the paperwork. Jasmin Bennett, the notary who signed Wise’s document, did not return a telephone call seeking comment.
Green, however, was not the vice president of 20 banks and the documents she and other DocX workers signed as if they were bank executives are coming under fire in legal proceedings – including Wise’s foreclosure.
Linda Green could not be reached for comment. A spokeswoman for Lender Processing Services did not respond to a request for comments.
“From what I can tell, everything DocX did was fraudulent,” Wise, the owner of Exit Elite Realty in Myrtle Beach, told The Sun News last week. “They were just robo-signing these documents, in my opinion, and Linda Green was the one who did that.”
Wise has hired a Myrtle Beach company called New South Financial to help him fight the foreclosure. He says the allegedly fraudulent mortgage assignment Green signed – in this case, pretending to be the vice president of American Home Mortgage Servicing Inc., the successor to Option One Mortgage – means the lender that is trying to take his home doesn’t really have clear title or rights to the property.
“At this point, with what we’ve discovered so far, I want my loan negated,” Wise said. “That’s what I’m going for.”
Game of cat and mouse
The allegations aren’t limited to DocX.
“If you look through your local land documents, they’re full of trash,” said Lynn Szymoniak, a Palm Beach Gardens, Fla., lawyer who made it her mission to raise courts’ awareness of fraudulent mortgage documents after her own home went into foreclosure. “It is incredibly widespread.”
Bob and Christine Dorrie moved to Myrtle Beach from the Bronx in New York in 1998. Like many people during the economic boom, the Dorries used their credit cards to finance a lifestyle beyond their means. So, in September 2007, they decided to refinance their home in the Island Green East neighborhood to pay off some of their bills.
“When we went to closing, the woman handling it said, ‘Well, we couldn’t get as much money as we thought’,” Bob Dorrie said, adding that none of the credit card bills wound up getting paid in full. “We ended up with all the charge cards still open with money still on them and a new home loan at a much higher price.”
The Dorries’ mortgage payment, which had been $987 a month, soared to $1,340 a month after the refinance.
As the economy grew worse, the Dorries quickly fell behind on their house payment.
Wells Fargo Bank, the new owner of the Dorries’ loan, filed a foreclosure lawsuit against the couple on Sept. 2, 2009. Bob Dorrie’s emergency bankruptcy filing three days before the house was to be sold at auction has put everything in limbo.
The Dorries now are questioning how Wells Fargo came to own their loan.
Ace Funding – the company that gave the Dorries their loan in 2007 – filed for bankruptcy protection and went out of business the following year, never officially assigning the Dorries’ loan over to Wells Fargo.
Wells Fargo didn’t file the assignment on behalf of the defunct Ace Funding until more than three weeks after the foreclosure lawsuit was filed. A lawyer representing Wells Fargo in the foreclosure lawsuit signed the document for Ace Funding, even though he “really has no authority to assign this mortgage,” according to Terry Walden, an audit originator and attorney liaison for New South Financial.
When Dorrie pushed Wells Fargo for more information about the ownership of his mortgage, the bank told him in November that Fannie Mae owned the mortgage and that Wells Fargo was only the loan servicer.
Then, in April, Wells Fargo told Dorrie that the real owner of his mortgage is Freddie Mac.
“Given this information, only Freddie Mac has the authority to enforce this note and foreclose on this property,” Walden said.
Wells Fargo spokesman Jim Hines disagrees, saying the Dorries’ loan documents were handled appropriately and that the bank’s contract as a loan servicer gives it “the authority to take action on the loan to protect the investor’s interests, including foreclosure.”
Hines said Wells Fargo is working with the Dorries and hopes to “reach a solution that would help them keep their home.”
Linda Green’s signature appears on DocX paperwork used with thousands of Wells Fargo mortgages – although not in the Dorries’ case – since the real estate boom.
Even so, Hines said Wells Fargo has reviewed mortgage documentation for all of its loans and “has not found any foreclosure that should not have taken place.”
Wells Fargo sees foreclosure as a last resort, Hines said, and has worked with 673,000 borrowers to modify their loans since January 2009.
Bob Dorrie said Wells Fargo has repeatedly thrown up road blocks while he has tried to modify his loan. He hopes the perceived chain of title issues will give him some additional leverage in court proceedings and force his lender to modify his loan on terms he and his wife can live with.
“This is supposed to help force the bank’s hand, instead of them playing this game of cat and mouse with me,” Bob Dorrie said. “I’m still in the home, and I’d like to keep it.”
Who is at fault?
Ballery Skipper, the director of Horry County’s Register of Deeds office, said her staff is not responsible for investigating whether or not a document is legitimate. As long as fraud is not suspected, Skipper said, she is legally required to file the documents.
In the few cases where Skipper or her staff suspects fraud, the case is referred to the state attorney general’s office. Skipper said she has not referred any of the DocX filings to law enforcement.
Register of Deeds offices in other states, however, are starting to do their own investigations. A review of filings in Guilford County, N.C., for example, found 1,920 DocX loan documents for property worth $255 million and 15 variations of Linda Green’s signature.
Some mortgage executives say the documentation problems are overblown, and that homeowners are looking for any reason to stop a foreclosure.
“The homeowners have defaulted on their loans, and a flaw in the documentation does not mean the foreclosure was a wrongful foreclosure,” said Janis Smith, vice president of Mortgage Electronic Registration Systems, or MERS, the nation’s largest mortgage loan registration service.
“Foreclosure is a very emotional situation, and people will try all angles in an attempt to stop the process,” Smith said. “At the end of the day, though, you still have a situation where the borrower didn’t make their payments.”
Walden, however, says that kind of response is disingenuous. While the courts are set up to determine whether a homeowner has defaulted on a loan, he said, they are also responsible for ensuring the banks’ paperwork is legitimate and that due process is followed.
“The banks just made up the paperwork they needed to get the deal done,” Walden said. “We want to hold the banks accountable for that.”
Where it all began
To better understand how this mortgage mess occurred, one has to look back to the home-buying frenzy that took place between 2005 and 2007.
During the real estate boom, some of the nation’s largest banks bought home loans from all over the country and packaged them together in mortgage-backed securities that were sold to investors – including many 401(k) programs and pension funds.
Each security that was issued included thousands of mortgage loans worth a combined $1 billion to $1.5 billion – and the Wall Street banks sold hundreds of those securities to investors who believed the rise in home values would never end.
As the hunger for mortgage-backed investments grew, banks had to find more and more people to take on new loans that could be packaged into new securities. Before long, home loans were being given to nearly everyone that applied – regardless of income or credit score.
Many banks didn’t even require documentation of a person’s income or employment before giving them a loan. And some bankers looked the other way when an obviously fraudulent application crossed their desks, recent investigations show.
“If you had a heartbeat, you could get a loan,” said Walden, a former mortgage broker.
When the millions of people who never should have been given credit in the first place started to default on their home loans, the mortgage-backed securities house of cards imploded and the real estate bust began.
Those securities also are at the root of today’s mortgage documentation debacle.
The trust companies that issued those securities – usually a large bank such as Bank of New York or Deutsche Bank – were required by law to have a copy of the mortgage note and every mortgage assignment showing a clear chain of title for each of the thousands of loans included in each investment offering.
The trust companies were required to obtain those documents no later than 90 days after the security was issued.
There were so many securities being issued so quickly, however, that the trust companies were not able – or didn’t bother – to collect all the required documents.
That didn’t cause problems as long as the mortgages were being paid. But when a homeowner stopped paying and a bank decided to foreclose, the needed documentation wasn’t there.
That is why many banks turned to “document mills,” which charged a small fee to create the documentation banks needed to proceed with foreclosure. It is estimated DocX alone created at least 2 million mortgage documents nationwide, many of them allegedly forged and fraudulent, over a two-year period.
“Instead of doing things the right way, the banks chose to go into court and lie,” Szymoniak said.
Foreclosure lawsuit
Anthony Wise refinanced his Myrtle Beach home in February 2006 and he thinks his lender started to recreate his mortgage paperwork after he missed a payment in late 2008.
For example, a mortgage assignment transferring the loan from Option One to Deutsche Bank National Trust – the company that oversaw the mortgage-backed security that purportedly includes Wise’s loan – was recorded Jan. 23, 2009, in Horry County. That document was prepared by DocX and includes Green’s signature.
“They were trying to get all of their paperwork in a row just in case,” Wise said.
A Deutsche Bank spokesman did not respond to a request for comments.
Deutsche Bank filed a foreclosure lawsuit against Wise in April 2010, and that case is still pending.
In addition to allegations that the DocX mortgage assignment is fraudulent, Wise says Deutsche Bank missed the deadline for documenting his loan and has no right to foreclose on his home.
Wise’s mortgage was placed into a security called Soundview Home Loan Trust 2006-OPT2, which had a closing date of April 7, 2006. That means all of the documents for all of the loans in that security had to be obtained by Deutsche Bank within 90 days of that closing or, by law, they could not be included.
Wise’s mortgage assignments – including the one giving the loan to Deutsche Bank – weren’t filed until more than two years after the Soundview security closed, according to county property records.
Help for homeowners
There are dozens of instances in Horry County where DocX hastily created mortgage assignments to help banks foreclose on residents’ homes. In most cases, those documents were not created until after a foreclosure lawsuit had been filed. And in some cases, DocX back-dated the documents to make it appear as if they took effect just days before the foreclosure filing.
Most of the DocX paperwork filed in Horry County bears the signature of Linda Green.
Richard Lovelace, a Conway lawyer who specializes in real estate and banking law, said the banks who used DocX – or similar document mills – have put themselves at risk if homeowners can prove the paperwork is fraudulent.
That is true even if a home has already been lost to foreclosure.
“Any flaw that is discovered post-hearing, if it’s brought to the court’s attention in a timely manner, the judge will set aside the judgment and reopen the hearing,” said Lovelace, who is not involved in any of the foreclosure cases where DocX documents were used.
If the court proceedings – and the paperwork those proceedings were based on – are proven to be defective, Lovelace said, the bank can’t take the property.
“The court would declare the loan void,” he said. “The judgment would have to be set aside and the homeowner would be restored as the owner of the property. That’s the only remedy in such a case.”
Szymoniak, the Florida lawyer, envisions another solution.
“A fund should be set up, kind of like the BP oil spill fund, that will reimburse people who’ve lost their homes because of these fraudulent loan documents,” she said.
The banks who contributed to the problem would contribute money to the fund, and an independent third party would determine which homeowners qualify for reimbursement.
That is an idea that is being discussed by federal regulators and the attorneys general in all 50 states, who have initiated a widespread investigation into shoddy mortgage documentation by banks and document mills.
Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., has estimated that such a fund would need billions of dollars.
Mark Plowden, a spokesman for S.C. Attorney General Alan Wilson, said his office is active in the national investigation but is not targeting any specific company, such as DocX.
He said the multi-state group is “reviewing the larger issue, which includes these entities and their actions.”
Owners fight back
Some homeowners aren’t waiting for a federal investigation to be completed – they are fighting back by taking the banks to court. And in some recent cases, the homeowners are winning.
In Russell County, Ala., for example, Phyllis Horace obtained a summary judgment in March against LaSalle Bank National Association after alleging the bank did not have the proper paperwork needed to foreclose on her home.
Judge Albert Johnson, in ordering LaSalle to stop foreclosure proceedings against Horace, said he was “surprised to the point of astonishment” that the bank did not comply with its own regulations regarding documentation of loans.
The Dorries say they also plan to file a counterclaim in their foreclosure lawsuit based on information they have discovered in recent months.
New South Financial is helping Myrtle Beach area residents review mortgage documents to determine whether flaws or fraud exist that could help force banks into negotiating new loan terms.
The company also has agreements with area lawyers who will file complaints on behalf of New South clients. The service isn’t cheap – an audit of documents costs $3,000 and lawyer fees total $500 a month – but Walden said it is less expensive than hiring a law firm to defend a foreclosure action.
Experts say such services can be useful, but homeowners can do much of the needed investigation on their own for free by visiting the local register of deeds office or searching securities filings on the Internet.
Homeowners also can take advantage of an S.C. Supreme Court order that halted all foreclosures as of May 9 until after banks and borrowers have a chance to try and negotiate a modified loan. That order was not directly related to mortgage documentation issues, and if negotiations fail the banks can proceed with foreclosure.
Szymoniak, whose foreclosure is based in part on DocX paperwork signed by Linda Green, said she understands the resentment some people feel against those who haven’t been able to pay their mortgages yet are fighting foreclosure based on what some might consider a technicality.
In many cases, though, that’s the only way to get banks to work with borrowers, she said.
“We have a wholesale deterioration of neighborhoods across the country because of these foreclosures,” she said. “And that’s doing nothing but making the housing crisis even worse.”
Sunday, Jun. 19, 2011
Mortgage papers raise Myrtle Beach real estate fraud claims
Signatures on documents used in foreclosure cases under review
By David Wren – dwren@thesunnews.com
Anthony Wise has been selling real estate in the Myrtle Beach area for nearly three decades, but he had never heard of Linda Green until after his home went into foreclosure.
Now, just like hundreds of thousands of people nationwide, Wise is finding that the biggest investment he will ever make – his home – is closely tied to Green … or someone pretending to be her.
Green was a shipping clerk for an automobile parts company before taking a job in the signature room at a mortgage document company called DocX in Alpharetta, Ga., according to news reports.
Myrtle Beach real estate agent Anthony Wise hopes to cancel his home loan based on what he considers a fraudulent document and improper securitization of his mortgage. His home on Haskell Circle in Myrtle Beach is in danger of foreclosure.
DocX helped banks create documents – such as mortgage assignments, which transfer ownership of a home loan from one entity to another – in cases where the documents were missing from the original loan file or never existed in the first place. Those documents then were used in foreclosure proceedings all across the country.
In Horry County, DocX documents have been used in at least 46 foreclosures since 2008.
There are nearly 100 DocX mortgage assignments filed at Horry County’s register of deeds office for homes with loans totaling more than $17 million.
Green’s purported signature is on many of those documents.
And many of those documents are suspected of being fraudulent, according to government regulators.
Questionable signatures
The Federal Reserve Board and a trio of banking oversight groups issued a consent order in April against DocX and its parent company, Lender Processing Services Inc. of Jacksonville, Fla.
Although no fine was issued and the regulators said more study is needed to determine what wrongdoing – if any – occurred, the order has sparked investigations of DocX, which shut down last year, in at least four states and more attorneys general are expected to join the probe.
The regulators’ action took place after a “60 Minutes” television news broadcast on April 3 that showed DocX hired high school students and others for $10 an hour to sit in a sweatshop-like setting and sign thousands of mortgage documents every day, without checking to see if the documents were accurate.
DocX workers signed the documents as if they were vice presidents of national banks. Green, for example, claimed to be the vice president of 20 banks at the same time.
And when the real Linda Green wasn’t signing the mortgage documents, other DocX workers were signing them in her name, according to the report. DocX documents, including those filed in Horry County, show numerous variations of Green’s purported signature.
DocX workers told “60 Minutes” that Linda Green’s name was chosen as the one they all would sign because it is short and easy to spell.
DocX also had public notaries sign the documents, attesting that Linda Green was the vice president of various banks and that they saw her sign the paperwork. Jasmin Bennett, the notary who signed Wise’s document, did not return a telephone call seeking comment.
Green, however, was not the vice president of 20 banks and the documents she and other DocX workers signed as if they were bank executives are coming under fire in legal proceedings – including Wise’s foreclosure.
Linda Green could not be reached for comment. A spokeswoman for Lender Processing Services did not respond to a request for comments.
“From what I can tell, everything DocX did was fraudulent,” Wise, the owner of Exit Elite Realty in Myrtle Beach, told The Sun News last week. “They were just robo-signing these documents, in my opinion, and Linda Green was the one who did that.”
Wise has hired a Myrtle Beach company called New South Financial to help him fight the foreclosure. He says the allegedly fraudulent mortgage assignment Green signed – in this case, pretending to be the vice president of American Home Mortgage Servicing Inc., the successor to Option One Mortgage – means the lender that is trying to take his home doesn’t really have clear title or rights to the property.
“At this point, with what we’ve discovered so far, I want my loan negated,” Wise said. “That’s what I’m going for.”
Game of cat and mouse
The allegations aren’t limited to DocX.
“If you look through your local land documents, they’re full of trash,” said Lynn Szymoniak, a Palm Beach Gardens, Fla., lawyer who made it her mission to raise courts’ awareness of fraudulent mortgage documents after her own home went into foreclosure. “It is incredibly widespread.”
Bob and Christine Dorrie moved to Myrtle Beach from the Bronx in New York in 1998. Like many people during the economic boom, the Dorries used their credit cards to finance a lifestyle beyond their means. So, in September 2007, they decided to refinance their home in the Island Green East neighborhood to pay off some of their bills.
“When we went to closing, the woman handling it said, ‘Well, we couldn’t get as much money as we thought’,” Bob Dorrie said, adding that none of the credit card bills wound up getting paid in full. “We ended up with all the charge cards still open with money still on them and a new home loan at a much higher price.”
The Dorries’ mortgage payment, which had been $987 a month, soared to $1,340 a month after the refinance.
As the economy grew worse, the Dorries quickly fell behind on their house payment.
Wells Fargo Bank, the new owner of the Dorries’ loan, filed a foreclosure lawsuit against the couple on Sept. 2, 2009. Bob Dorrie’s emergency bankruptcy filing three days before the house was to be sold at auction has put everything in limbo.
The Dorries now are questioning how Wells Fargo came to own their loan.
Ace Funding – the company that gave the Dorries their loan in 2007 – filed for bankruptcy protection and went out of business the following year, never officially assigning the Dorries’ loan over to Wells Fargo.
Wells Fargo didn’t file the assignment on behalf of the defunct Ace Funding until more than three weeks after the foreclosure lawsuit was filed. A lawyer representing Wells Fargo in the foreclosure lawsuit signed the document for Ace Funding, even though he “really has no authority to assign this mortgage,” according to Terry Walden, an audit originator and attorney liaison for New South Financial.
When Dorrie pushed Wells Fargo for more information about the ownership of his mortgage, the bank told him in November that Fannie Mae owned the mortgage and that Wells Fargo was only the loan servicer.
Then, in April, Wells Fargo told Dorrie that the real owner of his mortgage is Freddie Mac.
“Given this information, only Freddie Mac has the authority to enforce this note and foreclose on this property,” Walden said.
Wells Fargo spokesman Jim Hines disagrees, saying the Dorries’ loan documents were handled appropriately and that the bank’s contract as a loan servicer gives it “the authority to take action on the loan to protect the investor’s interests, including foreclosure.”
Hines said Wells Fargo is working with the Dorries and hopes to “reach a solution that would help them keep their home.”
Linda Green’s signature appears on DocX paperwork used with thousands of Wells Fargo mortgages – although not in the Dorries’ case – since the real estate boom.
Even so, Hines said Wells Fargo has reviewed mortgage documentation for all of its loans and “has not found any foreclosure that should not have taken place.”
Wells Fargo sees foreclosure as a last resort, Hines said, and has worked with 673,000 borrowers to modify their loans since January 2009.
Bob Dorrie said Wells Fargo has repeatedly thrown up road blocks while he has tried to modify his loan. He hopes the perceived chain of title issues will give him some additional leverage in court proceedings and force his lender to modify his loan on terms he and his wife can live with.
“This is supposed to help force the bank’s hand, instead of them playing this game of cat and mouse with me,” Bob Dorrie said. “I’m still in the home, and I’d like to keep it.”
Who is at fault?
Ballery Skipper, the director of Horry County’s Register of Deeds office, said her staff is not responsible for investigating whether or not a document is legitimate. As long as fraud is not suspected, Skipper said, she is legally required to file the documents.
In the few cases where Skipper or her staff suspects fraud, the case is referred to the state attorney general’s office. Skipper said she has not referred any of the DocX filings to law enforcement.
Register of Deeds offices in other states, however, are starting to do their own investigations. A review of filings in Guilford County, N.C., for example, found 1,920 DocX loan documents for property worth $255 million and 15 variations of Linda Green’s signature.
Some mortgage executives say the documentation problems are overblown, and that homeowners are looking for any reason to stop a foreclosure.
“The homeowners have defaulted on their loans, and a flaw in the documentation does not mean the foreclosure was a wrongful foreclosure,” said Janis Smith, vice president of Mortgage Electronic Registration Systems, or MERS, the nation’s largest mortgage loan registration service.
“Foreclosure is a very emotional situation, and people will try all angles in an attempt to stop the process,” Smith said. “At the end of the day, though, you still have a situation where the borrower didn’t make their payments.”
Walden, however, says that kind of response is disingenuous. While the courts are set up to determine whether a homeowner has defaulted on a loan, he said, they are also responsible for ensuring the banks’ paperwork is legitimate and that due process is followed.
“The banks just made up the paperwork they needed to get the deal done,” Walden said. “We want to hold the banks accountable for that.”
Where it all began
To better understand how this mortgage mess occurred, one has to look back to the home-buying frenzy that took place between 2005 and 2007.
During the real estate boom, some of the nation’s largest banks bought home loans from all over the country and packaged them together in mortgage-backed securities that were sold to investors – including many 401(k) programs and pension funds.
Each security that was issued included thousands of mortgage loans worth a combined $1 billion to $1.5 billion – and the Wall Street banks sold hundreds of those securities to investors who believed the rise in home values would never end.
As the hunger for mortgage-backed investments grew, banks had to find more and more people to take on new loans that could be packaged into new securities. Before long, home loans were being given to nearly everyone that applied – regardless of income or credit score.
Many banks didn’t even require documentation of a person’s income or employment before giving them a loan. And some bankers looked the other way when an obviously fraudulent application crossed their desks, recent investigations show.
“If you had a heartbeat, you could get a loan,” said Walden, a former mortgage broker.
When the millions of people who never should have been given credit in the first place started to default on their home loans, the mortgage-backed securities house of cards imploded and the real estate bust began.
Those securities also are at the root of today’s mortgage documentation debacle.
The trust companies that issued those securities – usually a large bank such as Bank of New York or Deutsche Bank – were required by law to have a copy of the mortgage note and every mortgage assignment showing a clear chain of title for each of the thousands of loans included in each investment offering.
The trust companies were required to obtain those documents no later than 90 days after the security was issued.
There were so many securities being issued so quickly, however, that the trust companies were not able – or didn’t bother – to collect all the required documents.
That didn’t cause problems as long as the mortgages were being paid. But when a homeowner stopped paying and a bank decided to foreclose, the needed documentation wasn’t there.
That is why many banks turned to “document mills,” which charged a small fee to create the documentation banks needed to proceed with foreclosure. It is estimated DocX alone created at least 2 million mortgage documents nationwide, many of them allegedly forged and fraudulent, over a two-year period.
“Instead of doing things the right way, the banks chose to go into court and lie,” Szymoniak said.
Foreclosure lawsuit
Anthony Wise refinanced his Myrtle Beach home in February 2006 and he thinks his lender started to recreate his mortgage paperwork after he missed a payment in late 2008.
For example, a mortgage assignment transferring the loan from Option One to Deutsche Bank National Trust – the company that oversaw the mortgage-backed security that purportedly includes Wise’s loan – was recorded Jan. 23, 2009, in Horry County. That document was prepared by DocX and includes Green’s signature.
“They were trying to get all of their paperwork in a row just in case,” Wise said.
A Deutsche Bank spokesman did not respond to a request for comments.
Deutsche Bank filed a foreclosure lawsuit against Wise in April 2010, and that case is still pending.
In addition to allegations that the DocX mortgage assignment is fraudulent, Wise says Deutsche Bank missed the deadline for documenting his loan and has no right to foreclose on his home.
Wise’s mortgage was placed into a security called Soundview Home Loan Trust 2006-OPT2, which had a closing date of April 7, 2006. That means all of the documents for all of the loans in that security had to be obtained by Deutsche Bank within 90 days of that closing or, by law, they could not be included.
Wise’s mortgage assignments – including the one giving the loan to Deutsche Bank – weren’t filed until more than two years after the Soundview security closed, according to county property records.
Help for homeowners
There are dozens of instances in Horry County where DocX hastily created mortgage assignments to help banks foreclose on residents’ homes. In most cases, those documents were not created until after a foreclosure lawsuit had been filed. And in some cases, DocX back-dated the documents to make it appear as if they took effect just days before the foreclosure filing.
Most of the DocX paperwork filed in Horry County bears the signature of Linda Green.
Richard Lovelace, a Conway lawyer who specializes in real estate and banking law, said the banks who used DocX – or similar document mills – have put themselves at risk if homeowners can prove the paperwork is fraudulent.
That is true even if a home has already been lost to foreclosure.
“Any flaw that is discovered post-hearing, if it’s brought to the court’s attention in a timely manner, the judge will set aside the judgment and reopen the hearing,” said Lovelace, who is not involved in any of the foreclosure cases where DocX documents were used.
If the court proceedings – and the paperwork those proceedings were based on – are proven to be defective, Lovelace said, the bank can’t take the property.
“The court would declare the loan void,” he said. “The judgment would have to be set aside and the homeowner would be restored as the owner of the property. That’s the only remedy in such a case.”
Szymoniak, the Florida lawyer, envisions another solution.
“A fund should be set up, kind of like the BP oil spill fund, that will reimburse people who’ve lost their homes because of these fraudulent loan documents,” she said.
The banks who contributed to the problem would contribute money to the fund, and an independent third party would determine which homeowners qualify for reimbursement.
That is an idea that is being discussed by federal regulators and the attorneys general in all 50 states, who have initiated a widespread investigation into shoddy mortgage documentation by banks and document mills.
Sheila Bair, chairwoman of the Federal Deposit Insurance Corp., has estimated that such a fund would need billions of dollars.
Mark Plowden, a spokesman for S.C. Attorney General Alan Wilson, said his office is active in the national investigation but is not targeting any specific company, such as DocX.
He said the multi-state group is “reviewing the larger issue, which includes these entities and their actions.”
Owners fight back
Some homeowners aren’t waiting for a federal investigation to be completed – they are fighting back by taking the banks to court. And in some recent cases, the homeowners are winning.
In Russell County, Ala., for example, Phyllis Horace obtained a summary judgment in March against LaSalle Bank National Association after alleging the bank did not have the proper paperwork needed to foreclose on her home.
Judge Albert Johnson, in ordering LaSalle to stop foreclosure proceedings against Horace, said he was “surprised to the point of astonishment” that the bank did not comply with its own regulations regarding documentation of loans.
The Dorries say they also plan to file a counterclaim in their foreclosure lawsuit based on information they have discovered in recent months.
New South Financial is helping Myrtle Beach area residents review mortgage documents to determine whether flaws or fraud exist that could help force banks into negotiating new loan terms.
The company also has agreements with area lawyers who will file complaints on behalf of New South clients. The service isn’t cheap – an audit of documents costs $3,000 and lawyer fees total $500 a month – but Walden said it is less expensive than hiring a law firm to defend a foreclosure action.
Experts say such services can be useful, but homeowners can do much of the needed investigation on their own for free by visiting the local register of deeds office or searching securities filings on the Internet.
Homeowners also can take advantage of an S.C. Supreme Court order that halted all foreclosures as of May 9 until after banks and borrowers have a chance to try and negotiate a modified loan. That order was not directly related to mortgage documentation issues, and if negotiations fail the banks can proceed with foreclosure.
Szymoniak, whose foreclosure is based in part on DocX paperwork signed by Linda Green, said she understands the resentment some people feel against those who haven’t been able to pay their mortgages yet are fighting foreclosure based on what some might consider a technicality.
In many cases, though, that’s the only way to get banks to work with borrowers, she said.
“We have a wholesale deterioration of neighborhoods across the country because of these foreclosures,” she said. “And that’s doing nothing but making the housing crisis even worse.”
After ruling halted N.J. foreclosures, experts fear deluge of filings
We just have to remember that behind the Banks’ crimes, numbers, and paperwork are humans who are at risk of unjustly losing their homes. (by Joe Vera)
After ruling halted N.J. foreclosures, experts fear deluge of filings
Published: Monday, June 27, 2011, 7:30 AM
By Sarah Portlock / The Star-Ledger
Experts are concerned that a current logjam of foreclosures in New Jersey could forecast a storm when major mortgage lenders are able to resume filing notices.
In the past six months, an eerie feeling has settled in the offices of housing counselors and attorneys who confront the foreclosure crisis head-on and help distressed homeowners in New Jersey. The phone hasn’t been ringing any less than it did at the height of the storm, but what is about to hit may be greater than anything the group has seen so far.
Foreclosure filings are down 86 percent so far this year from last, owing in part to a December crackdown by the state’s chief justice that effectively halted proceedings by the country’s biggest mortgage lenders and service companies, according to court data. But lenders are waiting to file an estimated 28,500 foreclosures, and another 55,000 mortgage loans are currently more than 90 days delinquent, according to LPS Applied Analytics, a real estate data firm that tracks mortgage performance. At the current rate, it would take 49 years for banks to clear the logjam of mortgage loans that are currently in the foreclosure process or are more than 90 days delinquent, LPS found.
Those figures are a sign of what is to come when lenders are able to begin filing again, and the pipeline speeds up.
“It’s what keeps me awake at night,” said Peggy Jurow, who leads Legal Service of New Jersey’s Foreclosure Defense Initiative. “It’s what keeps my colleagues and me strategizing all the time.”
“What are we going to do,” she asked, when these cases get filed?
The work is taking its toll on those trying to help homeowners. Last week, housing counselors, attorneys, community leaders and county officials gathered at the Bloustein School of Planning and Public Policy at Rutgers University to share what they have learned battling the foreclosure crisis. The goal was to let the stakeholders discuss what has worked and what hasn’t, said Kathe Newman, an urban planning professor who studies the foreclosure issue and hosted the conference.
During one of the discussions, the question posed to the group was straight and to the point. What do you do to stay motivated in the face of this daunting and challenging problem? The consensus came quickly: We just have to remember that behind the numbers and paperwork are humans who are at risk of losing their homes.
A SUDDEN HALT
The foreclosure process came to a halt on Dec. 20, when Chief Justice Stuart Rabner announced an initiative to address fears homeowners were unnecessarily put into foreclosure and judges had inadvertently “rubber-stamped” files that had inaccurate or inadequate paperwork.
In March, six of the country’s biggest financial institutions — Bank of America, JP Morgan Chase, GMAC Mortgage, Citibank, OneWest Bank and Wells Fargo — agreed to submit extensive documentation of their foreclosure processes and outline any revisions they have made. A court-appointed special master, retired Superior Court Judge Richard Williams, is reviewing the material and will report on whether the banks have satisfied a number of changes.
Rabner’s order also addressed the concern that employees of the lender or servicer had signed thousands of foreclosure claims without any personal knowledge of their contents, a process known as “robo-signing.” As of June 9, foreclosure paperwork for pending and future cases is required to include an affidavit certifying that either an employee of the lender or an employee of the lender’s servicer has personally reviewed the case and confirmed its accuracy.
The court’s actions have slowed foreclosures in the state. And because there is no deadline for Williams to submit his findings, the storm can start at any point, advocates fear. There is one heartening fact, they said. Williams will issue his report regarding each bank as he finishes it rather than waiting, said court spokeswoman Winnie Comfort.
Bankers in New Jersey have told John McWeeney Jr., president and CEO of the New Jersey Bankers Association, that the time it now takes to complete a foreclosure has stretched to nearly three years.
“The reaction of the Supreme Court certainly delayed a large volume of foreclosures that otherwise would have been put in process, so I would expect that that will eventually hit and increase the number of foreclosure filings,” McWeeney said.
BRACING FOR ONSLAUGHT
When the foreclosure filings start winding their way through courts again, the influx will affect everyone in the industry.
“There are going to be very substantial numbers of foreclosures that are going to hit the market, all of which is problematic and obviously has a negative impact on housing values,” said Robert Levy, executive director of the Mortgage Bankers Association of New Jersey.
Asked what the financial institutions are doing now, representatives of Wells Fargo and GMAC said their attorneys are working closely with the court and documenting their improved and enhanced foreclosure procedures. The other financial institutions declined to comment.
In the interim, there is no shortage of homeowners seeking mortgage assistance. There is a three-month waiting list at some of the offices of New Jersey Citizen Action, said Executive Director Phyllis Salowe-Kaye. Some clients are coming in later in the foreclosure process, claiming they had not received earlier notification from their lenders. Others are borrowers who can’t afford to pay their mortgages because someone lost a job or as a result of another financial change. Activity could also pick up in mid-2012, Salowe-Kaye said, when homeowners with predatory loans begin facing ballooning payments.
The delays have done nothing to relieve homeowners’ stress. The process of finding a workable resolution can take longer, and it is difficult to try to sell or refinance a home that is worth less than its mortgage, said Jurow, the Legal Services foreclosure point person.
What homeowners who are either in foreclosure or late on payments should be doing now is organizing their finances and preparing for when activity picks back up again, Salowe-Kaye advised. That goes for homeowners who may have just lost their job and could face problems with their mortgage down the road.
When the wave hits, advocates said, they will have a plan. For its part, attorneys at Legal Services are studying defenses they can use to promote their clients’ abilities to get a loan modification, and, Jurow said, plan to reach out within the legal community for help.
“We’re happy that the court took the action that it took,” she said. “But, coupled with what we know is coming, it’s like bus-bunching — there hasn’t been a bus for an hour, but now five are going to come at once.”
Monday, June 27, 2011
Illinois Fines First Company in Foreclosure Document Probe
IL found docs with “… the same PHH employee’s name in “no less than five distinctly different signatures …” … IL levied fines & the judge stopped the foreclosures.
Illinois fines first company in foreclosure document probe
Department of Financial and Professional Regulation finds evidence of ‘negligence or incompetence’ by New Jersey-based PHH Mortgage
By Mary Ellen Podmolik, Tribune reporter
8:03 p.m. CDT, June 22, 2011
The state of Illinois said it found evidence of “negligence or incompetence” in PHH Mortgage Corp.’s foreclosure procedures and levied a fine of $290,000.
The order, issued late Wednesday, comes eight months after the state’s Department of Financial and Professional Regulation began investigating 20 state-licensed mortgage companies. It is the first disciplinary action taken.
Mount Laurel, N.J.-based PHH, along with 16 other companies, remains under investigation by the department. PHH did not return phone calls seeking comment.
The state, which asked PHH for 10 complete foreclosure case files, also looked at 20 cases that foreclosure law firm Fisher & Shapiro LLC admitted in Cook County Circuit Court may contain faulty foreclosure documents. In 19 of those cases, state investigators found evidence that PHH had submitted signed but incomplete paperwork to Fisher and Shapiro, with notations that other relevant facts would later be added.
The state also found that 16 of the 19 cases contained prove-up affidavits, used to verify the amount owed by the borrower, that contained the same PHH employee’s name in “no less than five distinctly different signatures, leading the department to conclude that at least four affiants used a person’s name other than their own to sign the affidavits.”
“We’re not at the point of calling it forgery, because forgery is a crime, and we’re not a law enforcement agency,” Brent Adams, head of the state agency, said Wednesday. “We do allege that there was something illegal here. It is not a safe and sound mortgage practice for different people to be signing someone’s name in an prove-up” affidavit.
In March, following Fisher and Shapiro’s admission of altered documents, Cook County Circuit Court Presiding Judge Moshe Jacobius temporarily halted more than 1,700 foreclosure cases. Jacobius said Tuesday that the number had grown to 2,127 on hold.
In its order, the state said PHH’s conduct “at the very least rises to the level of negligence or incompetence.”
A maximum fine of $25,000 can be levied for each violation of the Residential Mortgage License Act. The state fined PHH $10,000 for each of the 19 files with faulty paperwork and $25,000 for four instances in which an employee used a name other than his or her own to sign the documents. PHH, which was served with the order Wednesday, has 10 days to request a hearing on the action.
The state’s actions are separate from a national probe by state attorneys general into faulty foreclosure procedures and allegations that foreclosures were processed without being reviewed, an activity that has come to be known as robo-signing.
Adams said the state continues to review its own cases for those potential problems.
“As the glut of foreclosures became more intense, that is the backlog became more intense, there were more fill-in-the-blanks,” he said. “We have not completed our investigation into any company.”
Illinois fines first company in foreclosure document probe
Department of Financial and Professional Regulation finds evidence of ‘negligence or incompetence’ by New Jersey-based PHH Mortgage
By Mary Ellen Podmolik, Tribune reporter
8:03 p.m. CDT, June 22, 2011
The state of Illinois said it found evidence of “negligence or incompetence” in PHH Mortgage Corp.’s foreclosure procedures and levied a fine of $290,000.
The order, issued late Wednesday, comes eight months after the state’s Department of Financial and Professional Regulation began investigating 20 state-licensed mortgage companies. It is the first disciplinary action taken.
Mount Laurel, N.J.-based PHH, along with 16 other companies, remains under investigation by the department. PHH did not return phone calls seeking comment.
The state, which asked PHH for 10 complete foreclosure case files, also looked at 20 cases that foreclosure law firm Fisher & Shapiro LLC admitted in Cook County Circuit Court may contain faulty foreclosure documents. In 19 of those cases, state investigators found evidence that PHH had submitted signed but incomplete paperwork to Fisher and Shapiro, with notations that other relevant facts would later be added.
The state also found that 16 of the 19 cases contained prove-up affidavits, used to verify the amount owed by the borrower, that contained the same PHH employee’s name in “no less than five distinctly different signatures, leading the department to conclude that at least four affiants used a person’s name other than their own to sign the affidavits.”
“We’re not at the point of calling it forgery, because forgery is a crime, and we’re not a law enforcement agency,” Brent Adams, head of the state agency, said Wednesday. “We do allege that there was something illegal here. It is not a safe and sound mortgage practice for different people to be signing someone’s name in an prove-up” affidavit.
In March, following Fisher and Shapiro’s admission of altered documents, Cook County Circuit Court Presiding Judge Moshe Jacobius temporarily halted more than 1,700 foreclosure cases. Jacobius said Tuesday that the number had grown to 2,127 on hold.
In its order, the state said PHH’s conduct “at the very least rises to the level of negligence or incompetence.”
A maximum fine of $25,000 can be levied for each violation of the Residential Mortgage License Act. The state fined PHH $10,000 for each of the 19 files with faulty paperwork and $25,000 for four instances in which an employee used a name other than his or her own to sign the documents. PHH, which was served with the order Wednesday, has 10 days to request a hearing on the action.
The state’s actions are separate from a national probe by state attorneys general into faulty foreclosure procedures and allegations that foreclosures were processed without being reviewed, an activity that has come to be known as robo-signing.
Adams said the state continues to review its own cases for those potential problems.
“As the glut of foreclosures became more intense, that is the backlog became more intense, there were more fill-in-the-blanks,” he said. “We have not completed our investigation into any company.”
Sunday, June 26, 2011
Government guarantee preserves 30-year mortgage
Look closely & see a weird COMMUNISM. Democrat or Republican, sell outs to the Banks are just plain sell outs. (by Joe Vera)
Lawmakers: Government guarantee preserves 30-year mortgage
by JACOB GAFFNEY
Tuesday, June 21st, 2011, 5:39 pm
The prevalence of the 30-year mortgage in the housing market will rapidly diminish and eventually disappear without a government guarantee for related mortgage-backed securities.
Two members of the House Financial Services Committee, Reps. Gary Peters (D-Mich.) and John Campbell (R-Calif.) told attendees at the American Securitization Forum’s annual meeting in Washington that this is precisely what will happen if legislation they plan to introduce is not passed into law.
“How many of you are going to be excited to buy a package of 30-year, mortgage-backed securities in the TBA market that’s not government guaranteed?” Campbell asked the crowd of secondary market issuers and investors. “Let the record show, the hands showing up are zero.”
Campbell said the insurance program will be on bonds and not on institutions. It’s an idea that holds bipartisan support and is supported by the Federal Insurance Deposit Corp., as well, he added.
“Thirty-year mortgages will need to be securitized. The FDIC will not allow banks to hold them. And the banks want to do it privately,” Campbell said. “We don’t like to call it a GSE bill, because we aren’t going to have GSEs. If we are going to have housing recover, we need housing finance to recover.”
In May, Campbell told HousingWire the proposed bill had already garnered support from around the industry.
Campbell and Peters are pushing to create guarantee associations. These will be private entities, which hold 5% risk retention on mortgage bonds, and regulated by FHFA.
“We are not doing (Fannie and Freddie) all over again. Fannie Mae and Freddie Mac are guaranteed entities. This will guarantee the performance of the loans, not the entities itself,” he said.
Campbell said the legislation will create five such associations, at least as a start. In the future, he hopes these associations will increase in number and specialize in different operations. This way an entity can fail, but the mortgage markets will be diverse enough to absorb the blow.
“Americans don’t want hedging strategies based on changing mortgage rates,” added Peters. “They want 30-year, fixed-rate mortgages with no surprises.”
During the question and answer portion of the panel, one observer wondered why the GSEs shouldn’t become the first two such guarantee firms. It would be easier, he posited, to wind down GSE issuance and transform the firms into insurers. This would save an enormous amount of taxpayer money, he said.
Campbell countered that Fannie and Freddie are now too political for such a solution.
Peters quickly added: “The system of private gains and socialized loss is a moral hazard and needs to end.”
Lawmakers: Government guarantee preserves 30-year mortgage
by JACOB GAFFNEY
Tuesday, June 21st, 2011, 5:39 pm
The prevalence of the 30-year mortgage in the housing market will rapidly diminish and eventually disappear without a government guarantee for related mortgage-backed securities.
Two members of the House Financial Services Committee, Reps. Gary Peters (D-Mich.) and John Campbell (R-Calif.) told attendees at the American Securitization Forum’s annual meeting in Washington that this is precisely what will happen if legislation they plan to introduce is not passed into law.
“How many of you are going to be excited to buy a package of 30-year, mortgage-backed securities in the TBA market that’s not government guaranteed?” Campbell asked the crowd of secondary market issuers and investors. “Let the record show, the hands showing up are zero.”
Campbell said the insurance program will be on bonds and not on institutions. It’s an idea that holds bipartisan support and is supported by the Federal Insurance Deposit Corp., as well, he added.
“Thirty-year mortgages will need to be securitized. The FDIC will not allow banks to hold them. And the banks want to do it privately,” Campbell said. “We don’t like to call it a GSE bill, because we aren’t going to have GSEs. If we are going to have housing recover, we need housing finance to recover.”
In May, Campbell told HousingWire the proposed bill had already garnered support from around the industry.
Campbell and Peters are pushing to create guarantee associations. These will be private entities, which hold 5% risk retention on mortgage bonds, and regulated by FHFA.
“We are not doing (Fannie and Freddie) all over again. Fannie Mae and Freddie Mac are guaranteed entities. This will guarantee the performance of the loans, not the entities itself,” he said.
Campbell said the legislation will create five such associations, at least as a start. In the future, he hopes these associations will increase in number and specialize in different operations. This way an entity can fail, but the mortgage markets will be diverse enough to absorb the blow.
“Americans don’t want hedging strategies based on changing mortgage rates,” added Peters. “They want 30-year, fixed-rate mortgages with no surprises.”
During the question and answer portion of the panel, one observer wondered why the GSEs shouldn’t become the first two such guarantee firms. It would be easier, he posited, to wind down GSE issuance and transform the firms into insurers. This would save an enormous amount of taxpayer money, he said.
Campbell countered that Fannie and Freddie are now too political for such a solution.
Peters quickly added: “The system of private gains and socialized loss is a moral hazard and needs to end.”
Saturday, June 25, 2011
New York Courts Still At It
Justice John M. Leventhal, “the law must not yield to expediency and the convenience of lending institutions.” “Proper procedures … ensure … chain of ownership.” (by Joe Vera)
More on MERS: New York Courts Still At It
Posted by Carole VanSickle on Wednesday, June 22nd 2011
A New York appeals court has thrown out another MERS foreclosure proceeding, this one on a delinquent $479,000 mortgage with no note in evidence not just in MERS, but anywhere. “They’ve had three years to find it [the note],” said the homeowner’s lawyer, “and they haven’t.” The trustee for the trust allegedly containing the mortgage, the Bank of New York (BONY), could not produce the note and, according to the courts, since MERS “couldn’t give BONY the authority to foreclose because it didn’t possess the underlying note,” the homeowners will not face foreclosure. “A transfer of the mortgage without the debt is a nullity, and no interest is acquired by it,” the court ruled[1].
While this might appear at first to be a big deal, even the homeowners’ lawyer believes that the situation may be unusual enough that it will not impact most homeowners because BONY actually admitted that it did not have the note. However, other analysts are not willing to say that the judges making rulings like this one are not opening up the door to potentially massive lawsuits if the MERS model is ultimately deemed invalid. “We know that MERS is a problem; we don’t know exactly what that’s going to mean,” explained Adam Levitin, a professor of law at Georgetown University[2]. However, judges ruling against MERS are standing firm, saying that “the law must not yield to expediency and the convenience of lending institutions,” in the words of Justice John M. Leventhal. “Proper procedures must be followed to ensure the reliability of the chain of ownership,” he added.
More on MERS: New York Courts Still At It
Posted by Carole VanSickle on Wednesday, June 22nd 2011
A New York appeals court has thrown out another MERS foreclosure proceeding, this one on a delinquent $479,000 mortgage with no note in evidence not just in MERS, but anywhere. “They’ve had three years to find it [the note],” said the homeowner’s lawyer, “and they haven’t.” The trustee for the trust allegedly containing the mortgage, the Bank of New York (BONY), could not produce the note and, according to the courts, since MERS “couldn’t give BONY the authority to foreclose because it didn’t possess the underlying note,” the homeowners will not face foreclosure. “A transfer of the mortgage without the debt is a nullity, and no interest is acquired by it,” the court ruled[1].
While this might appear at first to be a big deal, even the homeowners’ lawyer believes that the situation may be unusual enough that it will not impact most homeowners because BONY actually admitted that it did not have the note. However, other analysts are not willing to say that the judges making rulings like this one are not opening up the door to potentially massive lawsuits if the MERS model is ultimately deemed invalid. “We know that MERS is a problem; we don’t know exactly what that’s going to mean,” explained Adam Levitin, a professor of law at Georgetown University[2]. However, judges ruling against MERS are standing firm, saying that “the law must not yield to expediency and the convenience of lending institutions,” in the words of Justice John M. Leventhal. “Proper procedures must be followed to ensure the reliability of the chain of ownership,” he added.
Friday, June 24, 2011
Get Ready for the Great MERS Whitewash Bill
Congress may pardon MERS retroactively. Don’t say it won’t happen. Doesn’t any politician care about the rule of law. (by Joe Vera)
Get Ready for the Great MERS Whitewash Bill
By: John Carney Senior Editor, CNBC.com
Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.
The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.
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.
If courts rule against MERS, the damage could be catastrophic. Here’s how the AP tallies up the potential damage:
Assuming each mortgage it tracks had been resold, and re-recorded, just once, MERS would have saved the industry $2.4 billion in recording costs, R.K. Arnold, the firm’s chief executive officer, testified in 2009. It’s not unusual for a mortgage to be resold a dozen times or more.
The California suit alone could cost MERS $60 billion to $120 billion in damages and penalties from unpaid recording fees.
The liabilities are astronomical because, according to laws in California and many other states, penalties between $5,000 and $10,000 can be imposed each time a recording fee went unpaid. Because the suits are filed as false claims, the law stipulates that the penalties can then be tripled.
Perhaps even more devastatingly, some critics say that sloppiness at MERS—which has just 40 full-time employees—may have botched chain of title for many mortgages. They say that MERS lacks standing to bring foreclosure actions, and the botched chain of title may cast doubts on whether anyone has clear enough ownership of some mortgages to foreclose on a defaulting borrower. The problems with MERS system led JPMorgan Chase CEO Jamie Dimon to stop using MERS for foreclosures in 2008.
Now it appears that Congress may attempt to prevent any MERS meltdown from occurring. MERS is owned by all the biggest banks, and th the value of their bonds sink because of doubts about the ownership of the underlying mortgages.
So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimate mortgage transfers conducted through MERS private database.
Self-styled consumer advocate Neil Garfield says the legislation is already being drafted:
After years of negative judicial decisions about the use of a straw-man on mortgages, MERS was about to lose its existence as well as its credibility. But now all of that is set to change as Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen.
Garfield is overstating things a bit. In truth, the results of the legal challenges to MERS have been mixed. But it is very plausible that the banks might want to put to rest any ongoing uncertainty about the legality of MERS. I wouldn’t be at all surprised if Congress manages to pass a bill that bails MERS out of its legal issues.
Get Ready for the Great MERS Whitewash Bill
By: John Carney Senior Editor, CNBC.com
Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.
The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.
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.
If courts rule against MERS, the damage could be catastrophic. Here’s how the AP tallies up the potential damage:
Assuming each mortgage it tracks had been resold, and re-recorded, just once, MERS would have saved the industry $2.4 billion in recording costs, R.K. Arnold, the firm’s chief executive officer, testified in 2009. It’s not unusual for a mortgage to be resold a dozen times or more.
The California suit alone could cost MERS $60 billion to $120 billion in damages and penalties from unpaid recording fees.
The liabilities are astronomical because, according to laws in California and many other states, penalties between $5,000 and $10,000 can be imposed each time a recording fee went unpaid. Because the suits are filed as false claims, the law stipulates that the penalties can then be tripled.
Perhaps even more devastatingly, some critics say that sloppiness at MERS—which has just 40 full-time employees—may have botched chain of title for many mortgages. They say that MERS lacks standing to bring foreclosure actions, and the botched chain of title may cast doubts on whether anyone has clear enough ownership of some mortgages to foreclose on a defaulting borrower. The problems with MERS system led JPMorgan Chase CEO Jamie Dimon to stop using MERS for foreclosures in 2008.
Now it appears that Congress may attempt to prevent any MERS meltdown from occurring. MERS is owned by all the biggest banks, and th the value of their bonds sink because of doubts about the ownership of the underlying mortgages.
So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimate mortgage transfers conducted through MERS private database.
Self-styled consumer advocate Neil Garfield says the legislation is already being drafted:
After years of negative judicial decisions about the use of a straw-man on mortgages, MERS was about to lose its existence as well as its credibility. But now all of that is set to change as Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen.
Garfield is overstating things a bit. In truth, the results of the legal challenges to MERS have been mixed. But it is very plausible that the banks might want to put to rest any ongoing uncertainty about the legality of MERS. I wouldn’t be at all surprised if Congress manages to pass a bill that bails MERS out of its legal issues.
Wednesday, June 15, 2011
Viewpoint: Five Key Tasks to Make FDIC Loss-Sharing Work
Why? Every day a court in the USA stops a bank from wrongfully foreclosing. Failed Bank executives walk away keeping bonuses based on bad loans. Then …
Why? Every day a court in the USA stops a bank from wrongfully foreclosing. Failed Bank executives walk away keeping bonuses based on bad loans. “After all, there is a reason why these banks failed. Oftentimes, financial statements are old,
appraisals are out of date, and file memos chronicling the loan’s current status are missing.” Then the government insures the buyer of a failed Bank against losses. The thinking seems to be if the government keeps hiding theft and charging it to our children and their children, maybe they (the bankers and the politicians that received “contributions) can continue to get away with skimming.
This article is written by an expert recommending that expert investors who intend to acquire a failed bank with an guarantee against loss should get more experts to counsel on the loss sharing agreement.
So, if the experts have to get experts, how are decent Americans, whether a cook, fireman, truck driver, doctor, or Ph.D. going to understand what is taking place behind closed doors. Yes, closed doors.
A county recorder in Utah said of MERS, “… if looked like a scam from hell.” You will be hearing more about Loss Sharing Agreements. What you won’t hear or read is how by starting a new bank, it might be possible to actually end up with profit by foreclosure on a American. This looks like another “scam from hell” to me.
Viewpoint: Five Key Tasks to Make FDIC Loss-Sharing Work
American Banker | Tuesday, January 12, 2010
By Charles B. Wendel
Entering into shared-loss transactions appears to be the Federal Deposit Insurance Corp.’s preferred approach for
dealing with failed banks. More than 60% of last year’s 140 bank failures were resolved using this approach.
Shared-loss transactions let banks build market share or move into new markets with minimal risk. They also let
private-equity players (led by a team of bankers) take advantage of current industry discontinuities.
Much of the attractiveness of these transactions centers on the “guarantee” the FDIC offers buyers. Typically, the
agency remits 80% of “dollar one” loan losses to buyers and increases its payments to 95% for losses beyond an
agreed upon threshold. In turn, the FDIC benefits from recoveries during the 10-year life of these deals.
Though these deals are attractive strategically and economically, they are also complex.
My company’s work with banks and private-equity players points to five key elements that should be addressed in
order to structure and manage a transaction appropriately.
Conducting a focused due diligence process and negotiating the FDIC shared-loss deal. Though many players
are experienced in due diligence, the FDIC window is short, with no more than two weeks between reviewing an offer
package to bidding. Time with the target is also limited (two to three days), requiring a focused approach. Buyers
should assemble a team of internal and external resources and set clear priorities for their review process.
As for negotiating an agreement, the FDIC has standardized the general structure of its purchase-and-assumption
and shared-loss agreements. However, no two agreements are alike, given evolving requirements by the FDIC (for
example, a “true-up” provision added in the fourth quarter) and buyer-negotiated amendments. Management should
view these agreements as a bible that will be revisited many times. Bank buyers should consult the handful of legal,
valuation and related advisers with expertise in the shared-loss world, leveraging their knowledge rather than relying
solely on internal controllers, general counsels or other internal resources.
Addressing key accounting-related priorities. Accounting regulations to be addressed include FAS 141R, SOP
03-3 and IRC Section 593. Many tax and accounting issues stem from the need to determine the tax basis of assets
subject to the shared-loss agreement and the rules related to deferred tax gains. A bank’s auditor is conflicted out
from offering these services, since it would be reviewing and passing judgment on its own work. This requires bank
buyers to obtain the services of an independent firm with appropriate accounting and valuation capabilities.
Ensuring strong portfolio support. The FDIC expects buyers to make regular claim submissions related to loan
losses, usually monthly for residential loans and quarterly for commercial and consumer loans.
Residential submissions are relatively straightforward because of the objective loss criteria outlined by the FDIC,
namely, “actual losses incurred due to modifications, foreclosures, short sales, deeds-in-lieu or bulk sales.” However,
commercial submissions are more subjective and require greater evaluation.
The state of commercial loan files in failed banks is often inadequate for portfolio management or for making “audit-
proof” submissions. (After all, there is a reason why these banks failed.) Oftentimes, financial statements are old,
appraisals are out of date, and file memos chronicling the loan’s current status are missing.
Owners should select a team of internal and/or external resources to triage, in effect, the portfolio, uncovering the
low-hanging fruit that can be submitted earliest while establishing a process to assess the entire portfolio. Every loan
in the portfolio must be reviewed against the acquirer’s risk rating system and managed within policy guidelines.
Commercial bankers at the acquired bank should undergo a sea change in how they look at their loans. Before
failure, many banks avoided taking losses because their reserves could not support a realistic view of a borrower’s
position. Under shared-loss agreements, management wants bankers to accurately assess transaction risk as quickly
as possible in order to identify loans subject to FDIC claims.
Making accurate and complete certificate submissions. The FDIC has developed a three-page certificate that
requires buyers to tap multiple internal databases and in some cases provide manual inputs as well. Systematizing
this process is crucial to increased accuracy and productivity.
Using technology to track and monitor loan submissions and recoveries during the life of the FDIC agreement.
While residential mortgage loans usually involve one submission, both CRE and C&I loans may require multiple
submissions based upon declining values and continuing expenses related to asset preservation, legal and appraisal
costs.
In addition, recoveries occur across the portfolio. Buyers need to develop an inclusive information management
system or “portal” to track these ins-and-outs. Tying the portal to the bank’s core systems allows for the “automatic”
generation of certificates, eliminating much of the manual activity that dominates bank staffers’ time in the early
stages of integrating an acquisition.
Shared-loss transactions can be very attractive and beneficial to all stakeholders, including the customer and the
FDIC. However, making them work requires senior management focus, clear priorities, and a bankwide
understanding of the unique opportunity these transactions offer.
Charles B. Wendel is the president of Financial Institutions Consulting Inc.
Why? Every day a court in the USA stops a bank from wrongfully foreclosing. Failed Bank executives walk away keeping bonuses based on bad loans. “After all, there is a reason why these banks failed. Oftentimes, financial statements are old,
appraisals are out of date, and file memos chronicling the loan’s current status are missing.” Then the government insures the buyer of a failed Bank against losses. The thinking seems to be if the government keeps hiding theft and charging it to our children and their children, maybe they (the bankers and the politicians that received “contributions) can continue to get away with skimming.
This article is written by an expert recommending that expert investors who intend to acquire a failed bank with an guarantee against loss should get more experts to counsel on the loss sharing agreement.
So, if the experts have to get experts, how are decent Americans, whether a cook, fireman, truck driver, doctor, or Ph.D. going to understand what is taking place behind closed doors. Yes, closed doors.
A county recorder in Utah said of MERS, “… if looked like a scam from hell.” You will be hearing more about Loss Sharing Agreements. What you won’t hear or read is how by starting a new bank, it might be possible to actually end up with profit by foreclosure on a American. This looks like another “scam from hell” to me.
Viewpoint: Five Key Tasks to Make FDIC Loss-Sharing Work
American Banker | Tuesday, January 12, 2010
By Charles B. Wendel
Entering into shared-loss transactions appears to be the Federal Deposit Insurance Corp.’s preferred approach for
dealing with failed banks. More than 60% of last year’s 140 bank failures were resolved using this approach.
Shared-loss transactions let banks build market share or move into new markets with minimal risk. They also let
private-equity players (led by a team of bankers) take advantage of current industry discontinuities.
Much of the attractiveness of these transactions centers on the “guarantee” the FDIC offers buyers. Typically, the
agency remits 80% of “dollar one” loan losses to buyers and increases its payments to 95% for losses beyond an
agreed upon threshold. In turn, the FDIC benefits from recoveries during the 10-year life of these deals.
Though these deals are attractive strategically and economically, they are also complex.
My company’s work with banks and private-equity players points to five key elements that should be addressed in
order to structure and manage a transaction appropriately.
Conducting a focused due diligence process and negotiating the FDIC shared-loss deal. Though many players
are experienced in due diligence, the FDIC window is short, with no more than two weeks between reviewing an offer
package to bidding. Time with the target is also limited (two to three days), requiring a focused approach. Buyers
should assemble a team of internal and external resources and set clear priorities for their review process.
As for negotiating an agreement, the FDIC has standardized the general structure of its purchase-and-assumption
and shared-loss agreements. However, no two agreements are alike, given evolving requirements by the FDIC (for
example, a “true-up” provision added in the fourth quarter) and buyer-negotiated amendments. Management should
view these agreements as a bible that will be revisited many times. Bank buyers should consult the handful of legal,
valuation and related advisers with expertise in the shared-loss world, leveraging their knowledge rather than relying
solely on internal controllers, general counsels or other internal resources.
Addressing key accounting-related priorities. Accounting regulations to be addressed include FAS 141R, SOP
03-3 and IRC Section 593. Many tax and accounting issues stem from the need to determine the tax basis of assets
subject to the shared-loss agreement and the rules related to deferred tax gains. A bank’s auditor is conflicted out
from offering these services, since it would be reviewing and passing judgment on its own work. This requires bank
buyers to obtain the services of an independent firm with appropriate accounting and valuation capabilities.
Ensuring strong portfolio support. The FDIC expects buyers to make regular claim submissions related to loan
losses, usually monthly for residential loans and quarterly for commercial and consumer loans.
Residential submissions are relatively straightforward because of the objective loss criteria outlined by the FDIC,
namely, “actual losses incurred due to modifications, foreclosures, short sales, deeds-in-lieu or bulk sales.” However,
commercial submissions are more subjective and require greater evaluation.
The state of commercial loan files in failed banks is often inadequate for portfolio management or for making “audit-
proof” submissions. (After all, there is a reason why these banks failed.) Oftentimes, financial statements are old,
appraisals are out of date, and file memos chronicling the loan’s current status are missing.
Owners should select a team of internal and/or external resources to triage, in effect, the portfolio, uncovering the
low-hanging fruit that can be submitted earliest while establishing a process to assess the entire portfolio. Every loan
in the portfolio must be reviewed against the acquirer’s risk rating system and managed within policy guidelines.
Commercial bankers at the acquired bank should undergo a sea change in how they look at their loans. Before
failure, many banks avoided taking losses because their reserves could not support a realistic view of a borrower’s
position. Under shared-loss agreements, management wants bankers to accurately assess transaction risk as quickly
as possible in order to identify loans subject to FDIC claims.
Making accurate and complete certificate submissions. The FDIC has developed a three-page certificate that
requires buyers to tap multiple internal databases and in some cases provide manual inputs as well. Systematizing
this process is crucial to increased accuracy and productivity.
Using technology to track and monitor loan submissions and recoveries during the life of the FDIC agreement.
While residential mortgage loans usually involve one submission, both CRE and C&I loans may require multiple
submissions based upon declining values and continuing expenses related to asset preservation, legal and appraisal
costs.
In addition, recoveries occur across the portfolio. Buyers need to develop an inclusive information management
system or “portal” to track these ins-and-outs. Tying the portal to the bank’s core systems allows for the “automatic”
generation of certificates, eliminating much of the manual activity that dominates bank staffers’ time in the early
stages of integrating an acquisition.
Shared-loss transactions can be very attractive and beneficial to all stakeholders, including the customer and the
FDIC. However, making them work requires senior management focus, clear priorities, and a bankwide
understanding of the unique opportunity these transactions offer.
Charles B. Wendel is the president of Financial Institutions Consulting Inc.
Tuesday, June 14, 2011
Oregon Foreclosure Filings up 236 percent in April
BoA file 236 new foreclosures. Attorney Phil Querin , “They’re doing the same thing they were before. “They’ve not recorded successive assignments.”
Oregon foreclosure filings up 236 percent in April
The Associated Press, Published Monday, June 6, 2011
PORTLAND, Ore. — PORTLAND, Ore. (AP) – Oregon is bucking a declining national trend in new foreclosure filings with a big increase in April, all of it from one loan servicer, The Oregonian reported.
The surge in “notices of default” by Bank of America Corp.’s foreclosure arm, ReconTrust Co., boosted the number of notices in Oregon by 236 percent, to 3,700 from 1,100, according to figures from ForeclosureRadar.com.
Another foreclosure data tracker, Realty Trac Inc., showed 3,200 notices in Oregon. Nationally, Realty Trac said the number declined by 14 percent in April.
The increase in April filings follows a jump in cancelled foreclosures filed by ReconTrust in late February and March. Those came after rulings by federal judges halting out-of-court foreclosures in Oregon, saying lenders failed to follow state recording law.
The judges said documents showing the successive chain of mortgage ownership had not been publicly filed in county recorders’ offices.
Bank of America spokesperson Jumana Bauwens said the withdrawals and new filings resulted from a review late last year of its foreclosure process when it halted sales in all 50 states.
“We wanted to provide our customers with every opportunity for home retention as well as ensure all foreclosure filing were completed with our improved process,” Bauwens said in an email to The Oregonian last week.
“As we entered April, we began initiating filings with that improved process. The filings in April may or may not be those held back in February and/or March,” Bauwens said.
But real-estate experts say little changed with the new filings.
Phil Querin, a real-estate attorney and critic of the finance industry’s handling of foreclosures, say ReconTrust’s new foreclosure starts are no different.
“They’re doing the same thing they were before,” Querin said. “They’ve not recorded successive assignments.”
The bank also might have been running up against a legal deadline that limits postponed foreclosures to six months, he said.
“We don’t really know too much because the banks aren’t talking,” Querin said.
Last month, the rate of new foreclosure starts slowed but remained higher than in February, according to recorders’ offices in two Portland metro area counties.
In Clackamas County, new foreclosure filings totaled 151 in March, with only 17 from ReconTrust. In April, filings spiked to 560, with 432 filed by ReconTrust. The trend was similar in Washington County, where new foreclosure starts jumped from 208 in March to 656 in April.
Attorneys say it’s not clear when Oregon judges will rule definitively on the legality of mortgage recordings, many of which involve the Mortgage Electronic Registration System, or MERS.
Title insurance attorneys have suggested that lenders might start foreclosing in court, but other real estate attorneys say lenders don’t want to spend that much money and will face a formidable fight from borrowers.
Oregon foreclosure filings up 236 percent in April
The Associated Press, Published Monday, June 6, 2011
PORTLAND, Ore. — PORTLAND, Ore. (AP) – Oregon is bucking a declining national trend in new foreclosure filings with a big increase in April, all of it from one loan servicer, The Oregonian reported.
The surge in “notices of default” by Bank of America Corp.’s foreclosure arm, ReconTrust Co., boosted the number of notices in Oregon by 236 percent, to 3,700 from 1,100, according to figures from ForeclosureRadar.com.
Another foreclosure data tracker, Realty Trac Inc., showed 3,200 notices in Oregon. Nationally, Realty Trac said the number declined by 14 percent in April.
The increase in April filings follows a jump in cancelled foreclosures filed by ReconTrust in late February and March. Those came after rulings by federal judges halting out-of-court foreclosures in Oregon, saying lenders failed to follow state recording law.
The judges said documents showing the successive chain of mortgage ownership had not been publicly filed in county recorders’ offices.
Bank of America spokesperson Jumana Bauwens said the withdrawals and new filings resulted from a review late last year of its foreclosure process when it halted sales in all 50 states.
“We wanted to provide our customers with every opportunity for home retention as well as ensure all foreclosure filing were completed with our improved process,” Bauwens said in an email to The Oregonian last week.
“As we entered April, we began initiating filings with that improved process. The filings in April may or may not be those held back in February and/or March,” Bauwens said.
But real-estate experts say little changed with the new filings.
Phil Querin, a real-estate attorney and critic of the finance industry’s handling of foreclosures, say ReconTrust’s new foreclosure starts are no different.
“They’re doing the same thing they were before,” Querin said. “They’ve not recorded successive assignments.”
The bank also might have been running up against a legal deadline that limits postponed foreclosures to six months, he said.
“We don’t really know too much because the banks aren’t talking,” Querin said.
Last month, the rate of new foreclosure starts slowed but remained higher than in February, according to recorders’ offices in two Portland metro area counties.
In Clackamas County, new foreclosure filings totaled 151 in March, with only 17 from ReconTrust. In April, filings spiked to 560, with 432 filed by ReconTrust. The trend was similar in Washington County, where new foreclosure starts jumped from 208 in March to 656 in April.
Attorneys say it’s not clear when Oregon judges will rule definitively on the legality of mortgage recordings, many of which involve the Mortgage Electronic Registration System, or MERS.
Title insurance attorneys have suggested that lenders might start foreclosing in court, but other real estate attorneys say lenders don’t want to spend that much money and will face a formidable fight from borrowers.
Michigan County approves Funding to Help Homeowners fight MERS, DocX cases
Michigan county approves funding to help homeowners fight MERS, DocX cases
by JON PRIOR
Wednesday, June 8th, 2011, 5:42 pm
A committee for the Ingham County Board of Commissioners in Michigan approved up to $60,000 in Legal Aid funding to represent borrowers affected by allegedly improper foreclosures and possible documentation fraud.
The full board is scheduled to approve the resolution June 14.
The county’s Register of Deeds Curtis Hertel Jr. uncovered potential fraudulent documents in his office calling into question hundreds of foreclosures. Hertel told HousingWire Wednesday he found 400 cases with possible fraudulent documentation involving Mortgage Electronic Registration Systems and another 100 involving DocX, a division of Lender Processing Services (LPS: 24.54 +0.41%).
According to the resolution adopted by Ingham County, the alleged wrongful foreclosures by MERS resulted in more than 400 people losing their homes over the last two years.
The legal assistance provided to affected homeowners will be made available between July 1, 2011, and June 30, 2012.
Both MERS and LPS signed consent orders with federal regulators in April as a result of a robo-signing scandal that engulfed multiple mortgage industry firms. Regulators required the two companies to “address significant weaknesses in, among other things, oversight, management supervision and corporate governance.”
MERS declined to comment on the Michigan subsidies. LPS did not immediately reply to requests for comment.
The Michigan Attorney General launched his own investigation into legacy DocX affidavits after Bill Bullard, the Register of Deeds in Oakland County uncovered questionable signatures and improper documentation as well.
The Michigan Court of Appeals required MERS in April to pursue foreclosures through the courts, even when the state normally uses a nonjudicial process.
Consumer advocates lobbied Washington for a federal funding program to help homeowners in these cases. Thad Bartholow, a foreclosure defense attorney for Armstrong Kellett Bartholow in Dallas, said such a program sounds like a good idea but could cause more harm in the long run.
“In particular, I would have concerns about creating a parallel to the already horrible problem with ‘foreclosure rescue’ scams by incentivizing shoddy or unscrupulous attorneys with little experience in this highly technical area of the law to take these cases, perhaps even on a volume basis, and absorbing the settlement funds without adequately serving their clients,” Bartholow said.
Hertel said other patterns cropped up in his investigation, which the courts are looking into. Bartholow said the issues arising out of these and federal probes seems unending in scope.
“Calling the problem of robosigning ‘epidemic” is a gross understatement,” Bartholow said. “Virtually industry-wide, it was the norm, with very few exceptions.”
by JON PRIOR
Wednesday, June 8th, 2011, 5:42 pm
A committee for the Ingham County Board of Commissioners in Michigan approved up to $60,000 in Legal Aid funding to represent borrowers affected by allegedly improper foreclosures and possible documentation fraud.
The full board is scheduled to approve the resolution June 14.
The county’s Register of Deeds Curtis Hertel Jr. uncovered potential fraudulent documents in his office calling into question hundreds of foreclosures. Hertel told HousingWire Wednesday he found 400 cases with possible fraudulent documentation involving Mortgage Electronic Registration Systems and another 100 involving DocX, a division of Lender Processing Services (LPS: 24.54 +0.41%).
According to the resolution adopted by Ingham County, the alleged wrongful foreclosures by MERS resulted in more than 400 people losing their homes over the last two years.
The legal assistance provided to affected homeowners will be made available between July 1, 2011, and June 30, 2012.
Both MERS and LPS signed consent orders with federal regulators in April as a result of a robo-signing scandal that engulfed multiple mortgage industry firms. Regulators required the two companies to “address significant weaknesses in, among other things, oversight, management supervision and corporate governance.”
MERS declined to comment on the Michigan subsidies. LPS did not immediately reply to requests for comment.
The Michigan Attorney General launched his own investigation into legacy DocX affidavits after Bill Bullard, the Register of Deeds in Oakland County uncovered questionable signatures and improper documentation as well.
The Michigan Court of Appeals required MERS in April to pursue foreclosures through the courts, even when the state normally uses a nonjudicial process.
Consumer advocates lobbied Washington for a federal funding program to help homeowners in these cases. Thad Bartholow, a foreclosure defense attorney for Armstrong Kellett Bartholow in Dallas, said such a program sounds like a good idea but could cause more harm in the long run.
“In particular, I would have concerns about creating a parallel to the already horrible problem with ‘foreclosure rescue’ scams by incentivizing shoddy or unscrupulous attorneys with little experience in this highly technical area of the law to take these cases, perhaps even on a volume basis, and absorbing the settlement funds without adequately serving their clients,” Bartholow said.
Hertel said other patterns cropped up in his investigation, which the courts are looking into. Bartholow said the issues arising out of these and federal probes seems unending in scope.
“Calling the problem of robosigning ‘epidemic” is a gross understatement,” Bartholow said. “Virtually industry-wide, it was the norm, with very few exceptions.”
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