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Countrywide Decision: Investor is owner of loan

Countrywide Decision: Investor is owner of loan

Posted on August 20, 2009 by livinglies

BofA’s Countrywide loses court ruling on mortgages — Modifications Not Authorized By Investor May be Invalid

There is lots of significance about this decision. First it shows that if the investor is going to sue it is going to be against the intermediary pretender lenders and not the borrower — because they don’t want to expose themselves to liability for predatory loan tactics, usury, securities violations, TILA, RESPA and HOEPA violations. Second it shows that as we have said all along here, the servicers don’t have the right or authority to actually negotiate and execute a loan modification.  And third it shows that the investor who bought bonds that were mortgage backed securities are the OWNERS OF THE LOAN.

This decision is essentially fatal to ALL foreclosure actions based upon securitized loans. It identifies the investors as the owners of the loan and negates the alleged authority of intermediary pretender lenders to do ANYTHING in the way of enforcement, modification, collection through legal means etc. because they simply have no standing (because the alleged debt is not owed to anyone other than the investor). The foundation is crumbling. These decisions are coming out one after the other because of a simple fact — the tacit deal between Wall Street and loan servicers and loan data administrators (MERS) may exist, but it has no legal effect without the investor and the borrower signing on to these new terms with extra conditions and co-obligors.

August 20, 2009, 7:42 am NEW YORK (Reuters) – A federal judge has ruled that Bank of America Corp (NYSE:BAC – News) cannot have a lawsuit by investors seeking to force it to buy back mortgages heard in federal court, saying he lacks jurisdiction to decide the case. Tuesday’s ruling by Judge Richard Holwell of the U.S. District Court in Manhattan means the case will move to state court. Holwell did not decide the merits of the case. “Congress passed two statutes within a year of each other to address the mortgage crisis,” the judge wrote. “In neither of these statutes did Congress federalize the case.”

The ruling is a win for investors, to the extent that Holwell rejected a claim by the bank’s Countrywide Financial Corp unit that new federal laws to encourage loan modifications to help struggling borrowers stay in their homes govern this case. Countrywide had argued that the laws negated obligations it might have had to buy back modified loans. In 2008, Countrywide agreed with some 11 state attorneys general to modify $8.4 billion of loans made to roughly 400,000 borrowers.Investors who own mortgage securities typically receive interest and principal payments. If servicers modified the underlying loans to reduce borrower obligations, investors would be harmed because they would receive lower payments.

Holwell did rule that investors bear the burden of showing that pooling and servicing agreements for their loans, taken “as a whole,” require Countrywide to buy back the loans.Bank of America could not immediately be reached for comment. A published report said a spokeswoman agreed that the court did not rule on the merits of the plaintiffs’ claims.The current case was brought by two investment funds holding Countrywide mortgages, Greenwich Financial Services Distressed Mortgage Fund 3 LLC and QED LLC. These investors complained they would be harmed if Countrywide shifted the burdens of loan modifications to 374 trusts into which loans had been repackaged and securitized.

These investors would rather Countrywide repurchase modified loans for the full unpaid amounts. Countrywide had been the largest U.S. mortgage lender before Bank of America acquired it last July for $2.5 billion. The case is Greenwich Financial Services Distressed Mortgage Fund 3 LLC and QED LLC v. Countrywide Financial Corp, U.S. District Court, Southern District of New York (Manhattan), No. 08-11343. rule that investors bear the burden of showing that pooling and servicing agreements for their loans, taken “as a whole,” require Countrywide to buy back the loans.Bank of America could not immediately be reached for comment. A published report said a spokeswoman agreed that the court did not rule on the merits of the plaintiffs’ claims.The current case was brought by two investment funds holding Countrywide mortgages, Greenwich Financial Services Distressed Mortgage Fund 3 LLC and QED LLC. These investors complained they would be harmed if Countrywide shifted the burdens of loan modifications to 374 trusts into which loans had been repackaged and securitized.These investors would rather Countrywide repurchase modified loans for the full unpaid amounts. Countrywide had been the largest U.S. mortgage lender before Bank of America acquired it last July for $2.5 billion. The case is Greenwich Financial Services Distressed Mortgage Fund 3 LLC and QED LLC v. Countrywide Financial Corp, U.S. District Court, Southern District of New York (Manhattan), No. 08-11343.

7 Responses

1. 

   Abby in CA, on August 20th, 2009 at 8:37 pm Said:

   Alina
   re your question on why clersk accept assignments…because, if like on my recorded assignment, the pretender lender signed it over to
   U.S. Bank, N.A (so it just appears to be a bank)…it was not until very, very recently that I finally understood that U.S. Bank, N.A. was the ’securitization trustee’..only discovered because I got a copy of the Mortgage Loan Sale and Servicing Agreement and then that led me to the PSA (found on the SEC website). The PSA was made between two Chase entities….so that is where they set up the ’securitization trust’ and named U.S. Bank, N.A. as securitization trustee.

   Much, much later (after foreclosure started)…the pretender lender (in my case HOME123 -part of New Century) then did the assignment over to U.S. Bank, N.A. There never was any recording of Chase having any significant role, other than becoming the new loan servicer.

   The Clerks don’t have a crystal ball. They only record what is given to them. I bet they do not even have a clue about all the securitization that went on.

   I went the last 8 months never being able to figure out how U.S. Bank, N.A. was involved in my foreclosure.

   Also, in the case of the MLSA that I have….there were over 4200 loans sold from New Century to Chase.
   When Chase did the PSA–they then sold the Certificates (ABS) to investors for 100K per pop!!

   That deal between New Century and Chase was close to 1Billion dollars!!
2. 

   angry&not taking it, on August 20th, 2009 at 4:16 pm Said:

   oh yea
   those poor investors… let them chase the banksters for the modified difference of the revenue stream.

   btw this is why loan modifications is all bullshit..smoke&mirrors while the clock runs out to forclosure.
3. 

   angry&not taking it, on August 20th, 2009 at 4:03 pm Said:

   whooo is this author??
   [neil i recognize your usual spot on commentary a [in yellow/shaded "quote"]

   but…
   a -
   what the hell does “cannot have a lawsuit” mean? like no you cannot have a cookie? haha
   i can see how [he/she] was attempting to phrase this.. eyes rolling

   b- the only statement of fact made was – ” Judge Richard Holwell ” ruling on lack of jurisdiction in fed court by way of the latest statutes .

   most of everything else was authors opinion . i luv media hype NOT!

   neil. can there be a partial ruling if lack of jurisdiction prevents FDJ Holwell from rendering a conclusive decision?
4. 

   erlinda, on August 20th, 2009 at 3:32 pm Said:

   alina,

   it is a very good argument and explanation. but some investors have an PSA agreement that in case the SVP is in default they ( investors) has no legal recourse to go after ( bond sellers) who sold them a junk bonds which in this case is a securities back by mortgages. in other word ,buyer (investors) beware. i have the feelings that those investors who has that provisions in PSA ( Pooling Servicing Agreement) without recourse has probably causes the increase of foreclosure in U.S.A. and the loan servicer could just sell the foreclosed properties which are not subject to investors lawsuit against the bond sellers such as banks, Wall ST. and lenders. so my theory, this is another “FRAUD” initiated by loan servicing and lenders and use others means to intimidate the homeowners to foreclosed. the profits they could get it goes to their wallet and who’s the loser we, the HOMEOWNERS AND THE REAL INVESTORS WHO BOUGHT THE TOILET PAPERS CERTIFICATE. there were so many faces in securities mortgages “FRAUD” this is just one of them, and who knows in the years to come , we could find more “Fraud”.
5. 

   Alina, on August 20th, 2009 at 1:33 pm Said:

   erlinda,

   IMHO, I don’t think the investors have thought it out that far ahead maybe because the investors do not realize the extent of the fraud committed.

   Not only that, but it appears they can claim indemnification from the originator, seller, etc. The PSAs have built in protections for the investors against homeowner lawsuits.

   Don’t forget, the investors were lied to also by the seller, originator, pretender lender, etc..

   the way I look at it, this is the way the lies went:

   pretender lender lied to seller and homeowner
   seller lied to originator
   originator lied to investors
   servicers lied to homeowners in order to protect investors bottom line
6. 

   erlinda, on August 20th, 2009 at 1:26 pm Said:

   suppose the investors won in suing bank of america, the investors are also putting themselves into a position that they (investors) are subject to a lawsuit form the homeowners due to TILA and RESPA violations and other violation made by the table funded loans which sold to Wall St. Are they ( willing) to exposed themselves? i think it is cheaper just to accept and allow modification than facing a lawsuit.
7. 

   Alina, on August 20th, 2009 at 11:37 am Said:

   Here is a dumb questions:

   When I worked briefly in Wills, Trusts, and Estates years ago, I remember that in order for a transfer of anything to be valid it had to be to the “Estate of ____”, “Trust of ____”, etc. I mainly worked with family trusts and at the end of year, the gift transfers of shares would be made. The transfers had to read “Trust of _____). The transfers were not made to a third party as trustee of the “trust of ____”

   My question is this: On each and every single one of these foreclosures, the assignments are to the trustee or some other third part such as the servicer. Am I correct in presuming that such assignments would be invalid on their face? And if the answer to this question is yes, then why do the county clerk offices accept these assignments?

Ruling in Tax-Auditing Case Puts Corporations on Edge

Ruling in Tax-Auditing Case Puts Corporations on Edge

By AMIR EFRATI

A little-publicized ruling in a recent case involving the Internal Revenue Service is causing lawyers for big companies some sleepless nights.

Last week, in a widely anticipated ruling, a federal appeals court in Boston said the IRS could gain access to documents created by a defense-contracting firm to determine whether the company's calculation of its tax liabilities would pass muster during a possible IRS audit. The decision in U.S. v. Textron Inc. reversed a January ruling by a smaller panel of judges on the same court.

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Scott Dressel-Martin

Frederick Krebs of the Association of Corporate Counsel fears a troubling precedent in the court ruling.

To some lawyers who represent corporations, the decision signaled an attack by the courts on the "work-product doctrine," the legal rule that shields an individual or business from having to turn over documents created "in anticipation" of litigation. In its ruling, the First Circuit Court of Appeals said the documents at Textron weren't protected under the doctrine because they weren't prepared specifically "for use" in litigation.

The ruling "eviscerates the work-product doctrine," says Frederick Krebs, president of the Association of Corporate Counsel, an organization for in-house corporate lawyers. He says the ruling, which is binding in federal courts in the Northeast where the First Circuit is based but could influence other courts, will embolden the IRS -- as well as plaintiffs' lawyers who bring shareholder lawsuits -- to seek more such documents from public companies. "If the IRS gets access, [it] can immediately figure out where the client thinks it's weak, what it's willing to pay," he says. The IRS praised the ruling in a statement last week but declined further comment.

Thomas Sabatino, general counsel of Schering-Plough Corp., worries the court's decision could transcend the tax arena and make in-house lawyers wary of providing complete assessments of future legal trouble in a variety of areas, from product-liability litigation to patent disputes. "The fear factor for corporate counsel is that...the ruling would say any analysis done by lawyers to ensure the accuracy of financial statements can be exposed," he says. "That makes it much more difficult for lawyers to continue to protect their client."

Some tax experts say the concern is misplaced. Corporate lawyers are "trying to expand the work-product doctrine far beyond its original intent," says Dennis Ventry, a law professor at the University of California, Davis, whose analysis of the Textron case was cited by the court in its opinion. "The IRS operates with significant information deficiencies," he says, "and some companies bury things into a large tax return and try to obscure what they're doing."

The debate is playing out as the IRS in recent years has sought to hunt down illegal tax shelters. As part of that push, the agency increasingly is asking to review documents that show companies' analysis of how much they should set aside in reserves for additional tax payments, should the IRS identify questionable tax accounting. In most instances, the documents, known as tax-accrual papers, include the company lawyers' determination of the likelihood that it will win or lose future tax disputes with the IRS.

Steve Johnson, a law professor at the University of Nevada, Las Vegas, said many companies "were engaged in transactions that pushed the envelope in the tax sense. The game was, 'Could we structure this in a way that the IRS wouldn't be able to figure out what was going on?'"

But corporate lawyers say that because tax law isn't always clear, it isn't fair for the IRS to use a company's evaluations about its own tax decisions against it.

The question at issue in the Textron case was whether tax-accrual documents were protected under the work-product doctrine. The theory, which traces its roots to a 1947 Supreme Court decision, protects material prepared in anticipation of litigation from being revealed to opposing lawyers in a court case. The rationale: seeing those materials gives an opponent the edge by sharing the other side's legal strategy.

The work-product doctrine is different from another rule that also is used to protect sensitive materials, the attorney-client privilege. That privilege is broader, protecting communications between clients and their lawyers, whether or not it deals with anticipated litigation. In this case, Textron, like most other public companies, showed the tax accrual papers to outside accountants, effectively removing attorney-client privilege over these documents.

But Textron said the work-product doctrine applied because the company's lawyers believed there was a chance the IRS would challenge the tax deductions, resulting in litigation. In the end, the court ruled that the documents produced by Textron weren't protected by the doctrine.

Judge Michael Boudin, writing for the majority on the court, said: "Textron apparently thinks it is 'unfair' for the government to have access to its spreadsheets, but tax collection is not a game. Underpaying taxes threatens the essential public interest in revenue collection."

A spokeswoman for Textron, which makes Cessna planes and Bell Helicopters, among other products, said the company is reviewing the decision.

Write to Amir Efrati at amir.efrati@wsj.com

Printed in The Wall Street Journal, page A9

• George Stoya wrote:

The ruling "eviscerates the work-product doctrine," says Frederick Krebs, president of the Association of Corporate Counsel, an organization for in-house corporate lawyers...Really?

As noted by Gary C. Shockley of theTennessee bar, the work-product does not shield underlying facts from discovery, only documents and things prepared in anticipation of litigation. The work-product protection is not absolute. Unlike the attorney-client privilege, the work-product doctrine is a conditional privilege and can be overcome by a showing of substantial need and hardship.

As excerpted from a Shokley news letter addressing a November 2003 decision, In re Grand Jury Subpoena (Mark Torf/Torf Environmental Management), 350 F.3d 1010 (9th Cir. 2003), the U.S. Court of Appeals for the Ninth Circuit addressed these issues in the context of parallel proceedings.

The Ninth Circuit began its discussion with a review of the work product doctrine under Rule 26(b)(3) of the Federal Rules of Civil Procedure, which protects documents and tangible things prepared by a party or a party's representative in anticipation of litigation or for trial from discovery. Such documents are subject to discovery only upon a showing of substantial need by the requesting party and an inability to obtain equivalent materials without undue hardship. Id. at 1015. Under United States v. Nobles, 422 U.S. 225 (1975), the doctrine extends to materials prepared by an investigator working for attorneys and prepared in anticipation of litigation.

Based on these general principles, the Ninth Circuit applied a two-part test: (1) were the materials prepared in anticipation of litigation and (2) by or for a party or a party's representative?

Because the environmental consultant Torf was hired by the attorney McCreedy to help him in assessing the company's potential civil and criminal liability, all documents prepared for this purpose were entitled to protection under the attorney work product doctrine. As to these so-called "single purpose documents," the court had no question that these materials met its two-part work-product test. 350 F.3d at 1015.
Other documents prepared by Torf, however, were prepared both in anticipation of litigation and to assist in the CERCLA cleanup under the EPA consent order.

As to these "dual-purpose documents," the Ninth Circuit found that the appropriate test was whether the documents were prepared "because of the prospect of litigation." Id. at 1015-16 (quoting Charles Alan Wright, Arthur R. Miller, and Richard L. Marcus, 8 Federal Practice & Procedure § 2024 (2d ed. 1994)). Relying on the Second Circuit's decision in United States v. Adlman, 134 F.2d 1194 (2nd Cir. 1998), the court rejected a primary vs. secondary motivation test in favor of an inquiry into whether, under the totality of the circumstances, the document would not have been prepared in the same form but for the prospect of litigation.

Because the threat of litigation drove all of Torf's work, including work done to comply with the EPA information request and consent order, even Torf's dual-purpose documents were entitled to protection under the Adlman "because of" test. 350 F.3d at 1016-17.

Shokely cautions that when considering the factual situation presented here, the compliance and litigation defense motives were so intertwined that work-product protection was required. Because Torf's dual purpose documents were prepared at least in part in anticipation of litigation and under the direction of counsel, they were entitled to protection just as much as the single purpose documents. Id. at 1016-18.

The Ninth Circuit also rejected the government's attempt to come within the need and hardship exception to the work product doctrine. The court found that the information supplied by Ponderosa and Torf in response to the information request, coupled with that otherwise available to government representatives while present at the sites in question, belied the assertion of substantial need and hardship.

My Bad! Woman's House Mistakenly Auctioned by Bank

My Bad! Woman's House Mistakenly Auctioned by Bank

A Homestead woman's home was auctioned to the highest bidder

By TODD WRIGHT

Updated 5:38 PM EDT, Wed, Aug 19, 2009

You know times are tough when people are getting kicked out of their house when it’s not even for sale.

That’s what happened to Anna Ramirez after she found all of her stuff out on the front lawn of her Homestead home last week and a strange man demanding she get out of his newly purchased house.

The eviction came after Ramirez’s home was mistakenly auctioned off to the highest bidder by her bank, Washington Mutual (yes, we know WaMu is now Chase, but we're in denial). Usually, you get a warning before you get the boot. A foreclosure letter. Maybe a sign saying your house is up for sale. Not Ramirez, who found her belongings bashed and battered in the street.

"This came out of nowhere," Ramirez said. "The bank took the house from right under my feet."

The man who bought the house told Ramirez he paid $87,000 for it, which shocked Ramirez, who bought the house for $260,000.

What's worse is her husband, daughter and grand children were also kicked out by Homestead and Miami-Dade police officers, said Martha Taylor, who witnessed the unexpected eviction.

"I have never seen anything like it," Taylor said. "They literally threw all her stuff on the front lawn. I didn't sleep that night and it wasn't even my house."

Ramirez and her family had three hours to get out of the house, police ordered. They had to stash their belongings at multiple locations and shacked up with a friend for the night as cops chained the doors of their home. With Taylor's help, Ramirez appeared before a judge two days later to explain what happened.

"I had all my stuff scattered everywhere," she said. "They did this in front all my neighbors. It was so embarassing."

A mistake in the Miami-Dade Clerk's Office appears to be behind the mishap, which landed Ramirez homeless for more than 24 hours.

The sale was eventually reversed by a Miami-Dade judge, allowing Ramirez to return to her old digs. Ramirez said she wants to sue for the damage to her furniture.

Ramirez has lived in the house for three years and recently refinanced the home with the bank.

"This shouldn't be happening, you know, because we did the right thing," she said. "We went step by step."

First Published: Aug 18, 2009 1:38 PM EDT

Another Resource Corroborating Our Securitization Model

Another Resource Corroborating Our Securitization Model

Posted on August 12, 2009 by livinglies

See Asset Securitization Comptroller’s Handbook

The basic model we have developed tracks the money and with that, the intent behind seemingly irrational decisions.

For example, why would any lender seeking to make a profit grant a loan whose interest payments were greater than the gross income of the borrower? That is not taking a risk. That is betting on a sure thing. The loan will fail. It follows that if the parties creating these loans had a betting vehicle to make money based upon the guaranteed failure of a specific pool of loans, the premiums paid for such a bet would be chump change compared to the payoff.

For example, assume a loan for $250,000 with a 10 (10%) percent interest which means that the Note says the borrower will be paying $25,000 per year in interest, plus principal, taxes and insurance. Further assume that the borrower has a gross income of $20,000. Unless the borrower hits the lottery or an inheritance we know as a certainty that this loan and all others like will fail as soon as the teaser payment of $300 per month is reset to normal amortization.

First the intermediary securitizers go out and sell the $25,000 interest income to a hedge fund or pension fund seeking to get a couple of points over the money market rates. If the Hedge Fund is satisfied with 5% return, rated AAA (investment grade) and “insured” then the Hedge Fund will purchase $500,000 in 5% mortgage backed bonds yielding the same $25,000. Note that funding of the loan is only $250,000 while the Wall Street underwriters have pocketed the balance ($250,000) of the $500,000 invested by the pension fund or hedge fund. That is a $250,000 profit on a $250,000 loan. Get it? Of course the essential strategy here is to make absolutely certain that the hedge fund never meets the borrower and vica versa. Imagine the attitude of a hedge fund manager who finds out that his $500,000 bought a $250,000 mortgage.

Now in order to cover the difference between the amount invested and the amount funded, they must purchase a “bet” on the base loan of $250,000 and then a naked “bet” on the $250,000 that was not funded (except into the underwriter’s pocket). AIG (among many others) was more than happy to accommodate since they couldn’t pay off any of these bets anyway and were just collecting premiums. While there are numerous ways of betting the principal bet of choice was the credit default swap, which was excluded from regulation under a 1998 law passed by congress. The players were planning this a long time before all this mess surfaced.

Now assume that the underwriter is intentionally setting up some pools that are weighted extra heavily with the bad loans. This presents an opportunity they could not pass up. If you knew that a horse was going to break a leg mid way through the race and you had the ability to bet on that how many bets would you place on the that horse losing? ANSWER: as many as you could if you really knew for sure. That is precisely what happened on Wall Street. Certain pools were weighted extra heavily with loans that could not perform. Everyone piled in with the purchase of Credit Default Swaps betting against those pools (at the same time they were selling to hedge funds as investors on one end and homeowners as investors on the other end of the securitization chain). Goldman Sachs reversed position in 2006. They stopped creating the pools and started buying insurance on pools of assets that never involved them. They made a killing because AIG and others were given the money (courtesy of Secretary Paulson, ex CEO of Goldman) to make good on those bets.

The relevance of this to foreclosure defense and offense is that the intermediaries not only knew, they intended the loans to fail — even the good loans that were in bad pools. Those loans HAD to fail in order for them to make a killing. If the loans were somehow saved, then the money spent on premiums would have been a loss and the stock of the investment banks would have plummeted permanently.

Which brings us to loan modifications. If the loans are successfully modified the insurance doesn’t pay off. So the money they expect to make evaporates. Hence they have left the modifications in the hands of servicers who have no right to modify a loan with the idea that the whole modification idea turns out to be a bust for reasons that nobody understood at the time — except now you do.

4 Responses

1. 

   msoliman, on August 13th, 2009 at 5:19 pm Said:

   Gentleman

   I am not quite ready to divulge names but there are more than a few moments and unbelievable things I can recall and still don’t believe heard from 2000 through 2003 from the industry elite.

   As for this topic and references to lower quality, grades of assets. We need to remember that the industry is familiar with liquidating leftover loans kicked from delivery. Many of the loans seem to transfer along a scheduled path. Then a loan will take a different path – from GMAC to SAXON to Sale.

   Insider terms and lingo here include algorithmic, DU fall out, 1st pay defaults, 4th payment default following seller recourse and scratch & dent, further curtailments, stales, roll over’s, hospital lines and warehouse bail out .

   Remember, my firm and discount model employed was so profitable it attracted Carl Icahn, billionare and famed corporate raider. Carl wrote the book on buying assets on the cheap and selling them at a premium.

   Trading “impaired” assets or poorer quality loans can
   be a very lucrative career. I was told it was the most profitable segment of all GMAC businesses…ALL!

   We aquired loans on a flow (one at a time) which were considered stale on a warewhouse line. Stale means the aging exceeds the time (90 days) alloted by the sellers warehouse lender .

   The receivables were rejected by the investors more than once on the secondary.

   Impaired assets purchased at a discount become very attractive the deeper the discount. No hedge needed here -just a willingness to move the loans by the seller.

   Loans that underwrote to a real 50 percent debt to income ratio would calculate at 75% of the principal balance and we would price it 10% below that figure.
   No analytics here or algorithmics used for hedging and coverage.

   What is interesting however is what a CEO for a GIANT told me in a one on one meeting. He liked my business model and thought he had a better way to go than the 10% margins booked as a gain on sale.

   We discussed buying deeply impaired (crap) non performng at a deep discount and then dumping into a performing security …at par. I said your eating up the O/C before the pool is even out of the gate (ramp period) .Unbelievable – not really.

   msoliman
   borrowerhotline.com
2. 

   Foreclosure Fraud, on August 12th, 2009 at 4:42 pm Said:

   In the request for admissions the pretender lender admitted that the original note was securitized.
    
   They also admitted they acquired the original note and mortgage from from the originating lender and are the holder in due course.
    
   Freddie Mac also claims they are the owner of the mortgage.
    
   Can the pretender lender become the holder in due course if the note was securitized by the originating lender (who was paid in full) then later assign the mortgage (mers as nominee) to the pretender lender from the originating lender to process the foreclosure?
    
   Fraud in Florida
3. 

   JL Semidey, on August 12th, 2009 at 3:18 pm Said:

   It is very simple actually. The Pretender Lender “A,” closed the table funded loan, by the time you were at the table the loan had been pre sold, meaning, the Pretender Lender “A”, had a satisfied note, your promissory note was paid in full even before you signed it. Granted not paid by you but by some one you were not even aware of, and the fact that the loan was paid in full and the identity of the true source of the funds was not and has not been disclosed to you yet. The Pretender Lender “A” had you sign a mortgage to their benefit even though the note had been satisfied and the mortgage you signed to their benefit should not be enforceable.

   The flow of money down stream and upstream is very important. You follow the money and you will see the fraud.

   it would be very telling if you look into the initial Bankruptcy filing for First Magnus Financial Corporation from Tucson AZ, in that filing (Chapter 11, Arizona District, case# 4:07-bk-01578). Most of the pretender lenders are either in Bankruptcy or some sort of receivership or reorganization.

   In this BK filing you will be able to read that this particular pretender lender was pre-paid as ma regular part of their lending business all their loans, up to or in excess of 80% of the originations and brokered loans.

   Once again can some one explain logically and in accordance to our federal laws and state laws, how can a “lender: assign a note that has been fully satisfied, or transfer a mortgage that is no longer due.
4. 

   bt, on August 12th, 2009 at 11:39 am Said:

   Confused-IF Bank XYZ closes the loan in its name and now the loan is in ABC Trust XYZ-2005, how can i use this to defend? Quiet tilte action? or a defense to foreclosure saying the loan has been paid in full already? How can Bank XYZ, that remained servicer even declare a default as master servicer if the loan was paid in full already…It would be great to have a detailed HOW TO STEP by STEP to defend a foreclosure with the Securitization scenerio

The Elephant in the Room – Well One of Many…

The Elephant in the Room – Well One of Many…

Posted on August 7, 2009 by livinglies

For those of you who have been to our seminars, (coming to Southern California next month) You have heard me ask about Hank Paulson and Ben Bernanke…”Are they stupid or were they lying when they said everything was OK through out all of 2007 and most of 2008?” You have seen and heard why Neil and I declare we are of the belief that there is simply “not enough money in the world to solve this problem.”

Fannie Mae’s (FNM) 8k has an interesting slide of their questionable assets in the supplement. It can be found below along with the complete 2009 Second Quarter filing. The report describes FNM’s exposure to problematic classes of mortgages on their book. That total comes to almost $1 Trillion. (that’s with a “T”) The total book of business is about $2.7 Trillion, at least 30% and more likely as high as 50% of their book is troubled. The report muddles with the actual holdings, as there are overlaps in the descriptions. The actual numbers they provide include:

• Negative Amortization Loans: $15B
• Interest Only: $196B
• Low Fico: $357B
•  LTV>90%: $265B
• Low Fico AND > 90% LTV: $25B
• Alt-A: $269B
• Sub Prime: $8B

Those numbers add up to $1.13 trillion. They are troubled for multiple reasons. For example, $25 billion are loans that have BOTH  high LTV and a FICO score less than 620. While there are varying degrees of toxicity when it comes to “toxic” assets these would be considered highly toxic.

 What might all this mean? Some trends are emerging. Based on historical private sector experience with these types of troubled loans, particulary those 30 % of Alt A/No doc and Negative Am loans that are non-owner occupied properties, one could expect that 50% of these borrowers will go into default. On the defaulted loans the losses will be conservatively about 50% of the outstanding loan balances. In other words, losses of 25% on the troubled book are reasonable assumptions. That would imply a loss over time on these loans of $275-$300B. And that does not include losses on Prime loans. And that is JUST Fannie. The Obama Administration has an estimate of $250B over four years for the full cost of cleaning up the ALL the GSE Agencies. These numbers suggest it could be double that, triple that or more.

This is ONLY Fannie…not Freddie or Ginnie or Sallie, not Citi, not BoA, not Wells Fargo, not numerous community banks who owned preferred shares in Fannie or Freddie that had their capital severly eroded when those preferred shares were wiped out last fall. How about the dwindling balance of FDIC reserves? Ladies and Gents we have a veritable herd of these elephants lingering in the room.

Gee no wonder Mr. Lockhart decided now would be a good time to step down from running Fannie, Hank Paulson is getting a tan somewhere now that he has saved Goldman Sachs(for the moment)and something tells me Uncle Ben Bernanke would not be heartbroken if he was replaced by Summers or whomever this fall and could simply go back to pontificating at Princeton.

In the interest of full disclosure I hold no position in Fannie or any of the stocks mentioned….I am long 1200 shares of Smith & Wesson.

Fannie 8k August 2009

Double click chart below to enlarge

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8 Responses

1. 

   ALAN BARON, on August 11th, 2009 at 6:35 pm Said:

   The not so Golden State of California !

   FYI – every state has different rules regarding proper foreclosure procedure ,
   quite often the banks screw up somewhere , always try to speak to local lawyer , go online & check the rules on foreclosure in your state. Pull a Title report !

   BE PROACTIVE , NEVER , NEVER GIVE UP !

   A PERSON WHO HAS NOTHING TO LOSE, IS THE MOST DANGEROUS.
2. 

   TA Webster, on August 11th, 2009 at 6:00 pm Said:

   Am presently going through the same on my home – MERS assigned to my servicer and the servicer subsequently “lost” the note… also problems on public record where assignments were not posted.

   I work in a (national) title plant and examine land records in all 50 states. Check your local register of deeds or clerk of courts office and examine all recorded docs pertaining to your property.

   Look for missing and incorrect assignments as well as the appearance of MERS on your mortgage or deed of trust instruments.
3. 

   angry&not taking it, on August 11th, 2009 at 9:35 am Said:

   alan
   great!
   thats news [winning] everyone here needs to hear! thanks.
   btw what state [location] are you in?
4. 

   ALAN BARON, on August 9th, 2009 at 4:34 pm Said:

   When the time is right , meaning once the appeal process is over with I will go public and post everything I did to win my home back postforeclosure. What I can say is even if you have been foreclosed upon you can undo it if the bank does not follow the rules set by the state in which you live. In my case they foreclosed in the name of MERS, then 14 days later tried to change title again into the bank name. To everyone pull a title report on your home , it can be eye opening and give you the silver bullet to kill the bank’s case.

   As Neil loves to say “Assume nothing , challenge everything.”
5. 

   James, on August 8th, 2009 at 10:43 am Said:

   ALAN BARON
   Don’t be bashful with your good news story! We can use all the good news we can get. Write it up and post it here.
6. 

   ALAN BARON, on August 7th, 2009 at 9:00 pm Said:

   That is great news Brad , To everyone I attended the 1st seminar and it was the main reason that gave me hope that I could undo my foreclosure.

   Which did happen ! Folks this stuff works ! Don’t give up or move out !

   I look forward to telling my story at your next So Cal Seminar .
7. 

   daniela mars, on August 7th, 2009 at 8:30 pm Said:

   I would like to register also.
   Please let me know. Thank you
8. 

   Charles Cox, on August 7th, 2009 at 3:52 pm Said:

   Need to know when and how to register for the S. California Seminar. Please send registration form or let me know where I can find it.

   Thanks,
   Charles Cox

5 dumb reasons you can't get mortgage help

5 dumb reasons you can't get mortgage help

The fax machine is first among problems bedeviling the government's modification program.

By Tami Luhby, CNNMoney.com senior writer

Last Updated: August 11, 2009: 5:39 PM ET

NEW YORK (CNNMoney.com) -- What's keeping troubled homeowners from getting mortgage help? Start with the fax machine.

Most loan servicers taking part in the Obama administration's mortgage modification initiative require that borrowers fax in their applications and supporting documents. And because faxes can be problematic, aid can be delayed or denied.

The fax isn't the only source of complications. Borrowers and housing counselors complain of endless waits on hold, lost paperwork and incorrect information from customer service representatives.

Many of the pitfalls stem from how quickly the programs were set up, experts said. Mortgage servicers often have 90 days to set up new programs. In this case, they were only given a few weeks.

"The program has been done somewhat on the fly because it's a crisis situation," said Paul Leonard, vice president for government relations for the Housing Policy Council, which represents mortgage lenders, servicers and insurers.

Only 9% of eligible delinquent borrowers have been put into trial modifications, according to a Treasury Department report released last week. The government is putting increased pressure on servicers to improve their performance as homeowners' complaints mount.

CNNMoney.com looks at five reasons why the loan modification process is so slow.

Reason #1: The fax machine

Having applicants fax their information to servicers has produced a slew of problems. Pages get lost or are cut off at the top or bottom. Servicers provide non-working or incorrect numbers. Applications are routed improperly, leaving files incomplete.

"It seems your stuff goes into a black hole," said Michael van Zalingen, director of homeownership services for Neighborhood Housing Services of Chicago. "It's archaic. Given all the problems we've had with lost faxes, it seems unreasonable to use a fax system."

Servicers acknowledge there is a better way. They'd like to see the government develop a Web portal where borrowers can fill out paperwork and submit documents, Leonard said.

The portal could also enable borrowers and housing counselors to confirm that their applications were received and are complete.

"Homeowners could get a more real-time update on their status and see what else is needed," Leonard said.

Reason #2: Multiple forms

All sides acknowledge that the multitude of forms and documentation requirements is gumming up the works. Servicers have to provide different paperwork depending on whether the borrowers' loan is owned by Freddie Mac (FRE, Fortune 500) or Fannie Mae (FNM, Fortune 500). On top of that, many institutions have also developed their own applications.

The lack of a unified application process makes it tough for distressed borrowers -- and even housing counselors -- to submit everything that's required.

For instance, some servicers want to see the most recent month's bank statements and pay stubs, while others want to see two months' worth. The self-employed may have to send in six months of business records or a year's worth, depending on their servicer.

"It's not understood what needs to be sent in," said Kathy Conley, housing and finance counselor with GreenPath in Farmington Hills, Mich.

Financial institutions would also like to have the process simplified, Leonard said. They are petitioning the administration to create a standard set of documents and requirements for the program.

Reason #3: Outdated documentation

Since it can take weeks for servicers to process applications, documents such as bank statements and pay stubs can become outdated quickly. Servicers then tell applicants to send in more recent proof of income, often sending them back to square one.

"By the time they get back to you, they say it's stale," van Zalingen said.

Conley always tells her clients to keep their pay stubs handy because they'll likely need to update their files.

If the government reduces the amount of documentation that's needed, servicers can process the applications more quickly, said David Sisko, who heads the default management practice at Deloitte & Touche.

"Nothing servicers have is designed to handle this type of volume," he said.

Reason #4: Poorly trained personnel

Servicers are hiring and training staff by the thousands to handle the flood of applications they are receiving. But borrowers and housing counselors complain bitterly that many customer service representatives are not aware of the modification program's details.

"They are not getting the training to be able to give homeowners the right answers," van Zalingen said. "Their ignorance of the program is almost outrageous."

Take Ryan in Minnesota, who wrote to CNNMoney.com. He has been trying to modify his loan for the past several months.

"Initially every time I called in to find out what the lender could do for us, I got a different answer every time except for them constantly telling me they won't do anything if we are not three months behind in payments, which is an absolutely ridiculous suggestion," he said.

Servicers, who are feeling the heat from the Obama administration, have said they are working on improving their customer service operations. They expect to ramp up the review process by the fall.

Reason #5: Unclear modification offers

Some delinquent borrowers are receiving trial modification offers without ever sending in an application. That's because servicers are culling through their portfolios and reaching out to those who likely qualify for help.

The packet, however, is confusing, van Zalingen said. The offer letter doesn't clearly state that it is part of the administration's loan modification program, and the new monthly payment doesn't appear for several pages.

Many homeowners don't know what to make of the offer and simply throw it away, he said.

Leonard said servicers are looking to increase their response rate.

"Companies are experimenting with the best way to reach people and getting them to respond," he said.  

First Published: August 11, 2009: 4:03 AM ET

Looking for the Lenders’ Little Helpers By GRETCHEN MORGENSON NY Times

Looking for the Lenders’ Little Helpers By GRETCHEN MORGENSON NY Times

Posted on July 20, 2009 by livinglies

Looking for the Lenders’ Little Helpers

By GRETCHEN MORGENSON

Published: July 11, 2009

IT is hard not to be dismayed by the fact that two years into our economic crisis so few perpetrators of financial misdeeds have been held accountable for their actions. That so many failed mortgage lenders do not appear to face any legal liability for the role they played in almost blowing up the economy really rankles. They have simply moved on to the next “opportunity.”

And what of the giant institutions that helped finance these monumentally toxic loans, or arranged the securitizations that bundled the loans and sold them to investors? So far they have argued, fairly successfully, that they operated independently of the original lenders. Therefore, they are not responsible for any questionable loans that were made.

This argument is growing tougher to defend. Some legal experts point to a number of cases in which plaintiffs contend that firms involved in the securitization process, like trustees hired to oversee the pools of loans backing securities, worked so closely with the lenders that they should face liability as members of a joint venture. And these experts see a rising receptiveness to this argument by some courts.

“As we are unpeeling what was happening on Wall Street, we may see that Wall Street didn’t find the safety from litigation risk that it hoped to find in securitization,” said Kathleen Engel, a professor at Cleveland-Marshall College of Law at Cleveland State University. “I think there is potential for liability if borrowers can engage in discovery to see exactly how much the sponsors were shaping the practices of the lenders.”

One example is a suit filed in Federal District Court in Atlanta, on behalf of the borrowers, Patricia and Ricardo Jordan. The Jordans are fighting a foreclosure on their home of 25 years that they say was a result of an abusive and predatory loan made by NovaStar Mortgage Inc. A lender that had been cited by the “More articles about Housing and Urban Development Department, U.S.” Department of Housing and Urban Development for improprieties, like widely hiring outside contractors as loan officers, NovaStar ran out of cash in 2007 and is no longer making loans.

Also named as a defendant in the case is the initial trustee of the securitization that contained the Jordans’ loan: “More information about Morgan, J. P., Chase & Company” JPMorgan Chase. In 2006, the bank transferred its trustee business “More information about Bank of New York Company” Bank of New York Mellon, which is also a defendant in the case. The Jordans are asking that all three defendants pay punitive damages.

“We contend that the trustee has direct liability on the theory that even though they were not sitting at the loan closing table, they were involved in the securitization and profited from it,” said Sarah E. Bolling, a lawyer in the Home Defense Program at the Atlanta “More articles about Legal Aid Society” “The prospectus had been written before the loan was closed. If this loan was not going to be assigned to a trust, it would not have been made.”

IN their legal briefs, the trustees have made the traditional argument that their relationship was not a joint venture and that they are not responsible for any problems with the Jordans’ loan.

A JPMorgan spokesman declined to comment on the case but said that because the bank was no longer the trustee, it was not directly involved in the litigation. A spokesman for Bank of New York Mellon also declined to comment.
A lawyer for NovaStar did not return calls seeking comment.

The facts surrounding the Jordans’ case are depressingly familiar. In 2004, interested in refinancing their adjustable-rate mortgage as a fixed-rate loan, they said they were promised by NovaStar that they would receive one. In actuality, their lawsuit says, they received a $124,000 loan with an initial interest rate of 10.45 percent that could rise as high as 17.45 percent over the life of the loan.

Mrs. Jordan, 66, said that she and her husband, who is disabled, provided NovaStar with full documentation of their pension, annuity and “More articles about Social Security.” statements showing that their net monthly income was $2,697. That meant that the initial mortgage payment on the new loan — $1,215 — amounted to 45 percent of the Jordans’ monthly net income.

The Jordans were charged $5,934 when they took on the mortgage, almost 5 percent of the loan amount. The loan proceeds paid off the previous mortgage, $11,000 in debts and provided them with $9,616 in cash.

Neither of the Jordans knew the loan was adjustable until two years after the closing, according to the lawsuit. That was when they began getting notices of an interest-rate increase from Nova- Star. The monthly payment is now $1,385.

“I got duped,” Mrs. Jordan said. “They knew how much money we got each month. Next thing I know I couldn’t buy anything to eat and I couldn’t pay my other bills.”

All the defendants in the case have asked the judge to dismiss it. The Jordans are awaiting his ruling. Perhaps the most famous case that linked a brokerage firm with a predatory lender was the one involving First Alliance, an aggressive lender that declared bankruptcy in 2000, and “More articles about Lehman Brothers.” Lehman Brothers its main financier.

More than 7,500 borrowers had successfully sued First Alliance for fraud, and in 2003 a jury found that Lehman, which had lent First Alliance roughly $500 million over the years to finance its lending, “substantially assisted” it in its fraudulent activities. Lehman was ordered to pay $5.1 million, or 10 percent of damages in the case, for its role.

Another case, from 2004, took up the issue of liability for abusive lending that went beyond a loan’s originator. That case, which involved “More information about Wells Fargo & Co” Wells Fargo and a borrower named Michael L. Short, was settled after the court denied two motions to dismiss it.

That matter turned on the language in the securitization’s pooling and servicing agreement, which provides details not only on the types of loans in a pool but also on the relationships of various parties involved in it.

Diane Thompson, a lawyer with the National Consumer Law Center, said that the meaning of the agreement was that “the trustee was a joint venture with the originator and was therefore responsible for everything that happened in that joint venture.”

Many such agreements, she said, create a joint venture by force of law. “Everybody I know that has tried this argument has had pretty good success. Absolutely we are going to see more of these cases.”

And let us not forget that late in the mortgage mania, Wall Street was no longer content simply to package these loans and sell them to investors. Eager for the profits generated by originating these loans, big firms bought subprime lenders to keep their securitization machinery humming. This could expose the firms to liability.

“I think something that hasn’t been explored much is the extent to which the financial services industry has exposure to litigation risk in securitizations,” Professor Engel said. “As the industry got faster and looser, Wall Street just stopped paying attention. And when you stop paying attention, you get in trouble.”

Loan Modification: Scamming from the Top Down

Loan Modification: Scamming from the Top Down

Posted on July 21, 2009 by livinglies

As the following Press Release for California AG’s office describes, it is the type of scam that happens in medical practice — offering relief, life or forgiveness — in exchange for money. I don’t agree with all the tips that Brown has published because he still has yet to absorb the fact that most foreclosures are a scam worse than the loan mod companies are perpetrating. But there is a lot of good information in here. One of them is the application of the grand theft statute but I would change the target to those pretender lenders (servicers, “lenders”, trustees etc.) who seek to collect on an obligation that is not owed to them, to steal title from a homeowner when the real party in interest has nothing to do with the action, and to evict people from homes they still own and have every right to remain. Key points to remember:

1. It’s good advice not to pay anyone other than your lender or servicer but that assumes you know who the real lender is and that the servicer actually has authority to collect your payments. In a world of securitized mortgages, you should challenge the pretender lender and the pretender servicer to identify and verify your debt and to whom you owe it.

2. It is not a good idea to call your lender or servicer and ask for modification for the same reason expressed in paragraph 1. They will play the game to satisfy government regulators that they are trying to settle these cases but the fact remains that in most cases they don’t own the loan, they don’t have the authority to modify the loan and they are getting sued by the investors who DO own the loan. In the end, after assuring you that they own the loan and that they have the note they will most often tell you that the “investor” did not approve the modification. When you ask for the name and address of the investor Countrywide says “that’s confidential.” Confidential? How can it be confidential who your lender is? If you owe money you have an absolute right under Federal and State law and even common law to know who is the proper recipient of your payments, how much money they have received from insurance or the Federal government in bailouts, what the balance is now, if any, and to whom you should be directing payments.

3. Loan modification is the easy way out for lawyers and businessmen that seek easy profits because people are intimidating by the real process of challenging the legal right of anyone to issue a notice of default, a notice of sale or to sue in foreclosure. It generally leads to nothing but heartbreak. Either they do nothing or they get a “modification” that within 6 months lands you right back where you were before — in foreclosure. A loan modification that does not include a very substantial principal reduction — 40%-60% — along with very favorable terms on FIXED interest rates is in my opinion, worthless.

4. Ethically, lawyers are in a hot spot when a real modification with principal reduction takes place. They know the party making the offer has no right to offer it. They know that when the papers are signed, the title to your property will be clouded and probably unmarketable. BUT it is also true that for the time being your payments will be vastly reduced, usually missed payments are completely eradicated, and the appearance of satisfaction of the old mortgage and the creation of the new mortgage with substitution of parties gives you a leg up on any future litigation with yet another party in the securitization chain who is claiming a right to enforce the obligation, the note or the mortgage. So the ethical obligation of the lawyer is to advise his client of the risks and then propose some factors that might make the title problem less of a problem — like new title policies, or a friendly quiet title action.

News Release

July 15, 2009

For Immediate Release

Contact: (916) 324-5500

Print Version

Attachments

Brown Sues 21 Individuals and 14 Companies Who Ripped Off Homeowners Desperate for Mortgage Relief

Los Angeles – As part of a massive federal-state crackdown on loan modification scams, Attorney General Edmund G. Brown Jr. at a press conference today announced the filing of legal action against 21 individuals and 14 companies who ripped off thousands of homeowners desperately seeking mortgage relief.

Brown is demanding millions in civil penalties, restitution for victims and permanent injunctions to keep the companies and defendants from offering mortgage-relief services.

“The loan modification industry is teeming with confidence men and charlatans, who rip off desperate homeowners facing foreclosure,” Brown said. “Despite firm promises and money-back guarantees, these scam artists pocketed thousands of dollars from each victim and didn’t provide an ounce of relief.”

Brown filed five lawsuits as part of “Operation Loan Lies,” a nationwide sweep of sham loan modification consultants, which he conducted with the Federal Trade Commission, the U.S. Attorney’s office and 22 other federal and state agencies. In total, 189 suits and orders to stop doing business were filed across the country.

Following the housing collapse, hundreds of loan modification and foreclosure-prevention companies have cropped up, charging thousands of dollars in upfront fees and claiming that they can reduce mortgage payments. Yet, loan modifications are rarely, if ever, obtained. Less than 1 percent of homeowners nationwide have received principal reductions of any kind.

Brown has been leading the fight against fraudulent loan modification companies. He has sought court orders to shut down several companies including First Gov and Foreclosure Freedom and has brought criminal charges and obtained lengthy prison sentences for deceptive loan modification consultants.

Brown’s office filed the following lawsuits in Orange County and U.S. District Court for the Central District (Los Angeles):

- U.S. Homeowners Assistance, based in Irvine;
- U.S. Foreclosure Relief Corp and its legal affiliate Adrian Pomery, based in the City of Orange;
- Home Relief Services, LLC, with offices in Irvine, Newport Beach and Anaheim, and its legal affiliate, the Diener Law Firm;
- RMR Group Loss Mitigation, LLC and its legal affiliates Shippey & Associates and Arthur Aldridge. RMR Group has offices in Newport Beach, City of Orange, Huntington Beach, Corona, and Fresno;
- and
- United First, Inc, and its lawyer affiliate Mitchell Roth, based in Los Angeles.

U.S. Homeowners Assistance
Brown on Monday sued U.S. Homeowners Assistance, and its executives — Hakimullah “Sean” Sarpas and Zulmai Nazarzai — for bilking dozens of homeowners out of thousands of dollars each.

U.S. Homeowners Assistance claimed to be a government agency with a 98 percent success rate in aiding homeowners. In reality, the company was not a government agency and was never certified as an approved housing counselor by the U.S. Department of Housing and Urban Development. None of U.S. Homeowners Assistance’s known victims received loan modifications despite paying upfront fees ranging from $1,200 to $3,500.

For example, in January 2008, one victim received a letter from her lender indicating that her monthly mortgage payment would increase from $2,300 to $3,500. Days later, she received an unsolicited phone call from U.S. Homeowners Assistance promising a 40 percent reduction in principal and a $2,000 reduction in her monthly payment. She paid $3500 upfront for U.S. Homeowners Assistance’s services.

At the end of April 2008, her lender informed her that her loan modification request had been denied and sent her the documents that U.S. Homeowners Assistance had filed on her behalf. After reviewing those documents, she discovered that U.S. Homeowners Assistance had forged her signature and falsified her financial information – including fabricating a lease agreement with a fictitious tenant.

When she confronted U.S. Homeowners Assistance, she was immediately disconnected and has not been able to reach the company.

Brown’s suit contends that U.S. Homeowners Assistance violated:
- California Business and Professions Code section 17500 by falsely stating they were a government agency and misleading homeowners by claiming a 98 percent success rate in obtaining loan modifications;

- California Business and Professions Code section 17200 by failing to perform services made in exchange for upfront fees;

- California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

- California Civil Code section 2945.45 for failing to register with the California Attorney General’s Office as foreclosure consultants; and

- California Penal Code section 487 for grand theft.

Brown is seeking $7.5 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

US Homeowners Assistance also did business as Statewide Financial Group, Inc., We Beat All Rates, and US Homeowners Preservation Center.

US Foreclosure Relief Corporation
Brown last week sued US Foreclosure Relief Corporation, H.E. Service Company, their executives — George Escalante and Cesar Lopez — as well as their legal affiliate Adrian Pomery for running a scam promising homeowners reductions in their principal and interest rates as low as 4 percent. Brown was joined in this suit by the Federal Trade Commission and the State of Missouri.

Using aggressive telemarketing tactics, the defendants solicited desperate homeowners and charged an upfront fee ranging from $1,800 to $2,800 for loan modification services. During one nine-month period alone, consumers paid defendants in excess of $4.4 million. Yet, in most instances, defendants failed to provide the mortgage-relief services. Once consumers paid the fee, the defendants avoided responding to consumers’ inquiries.

In response to a large number of consumer complaints, several government agencies directed the defendants to stop their illegal practices. Instead, they changed their business name and continued their operations – using six different business aliases in the past eight months alone.

Brown’s lawsuit alleges the companies and individuals violated:
- The National Do Not Call Registry, 16 C.F.R. section 310.4 and California Business and Professions Code section 17200 by telemarketing their services to persons on the registry;

- The National Do Not Call Registry, 16 C.F.R. section 310.8 and California Business and Professions Code section 17200 by telemarketing their services without paying the mandatory annual fee for access to telephone numbers within the area codes included in the registry;

- California Civil Code section 2945 et seq. and California Business and Professions Code section 17200 by demanding and collecting up-front fees prior to performing any services, failing to include statutory notices in their contracts, and failing to comply with other requirements imposed on mortgage foreclosure consultants;

- California Business and Professions Code sections 17200 and 17500 by representing that they would obtain home loan modifications for consumers but failing to do so in most instances; by representing that consumers must make further payments even though they had not performed any of the promised services; by representing that they have a high success rate and that they can obtain loan modification within no more than 60 days when in fact these representations were false; and by directing consumers to avoid contact with their lenders and to stop making loan payments causing some lenders to initiate foreclosure proceedings and causing damage to consumers’ credit records.

Victims of this scam include a father of four battling cancer, a small business owner, an elderly disabled couple, a sheriff whose income dropped due to city budget cuts and an Iraq-war veteran. None of these victims received the loan modification promised.

Brown is seeking unspecified civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

The defendants also did business under other names including Lighthouse Services and California Foreclosure Specialists.

Home Relief Services, LLC
Brown Monday sued Home Relief Services, LLC., its executives Terence Green Sr. and Stefano Marrero, the Diener Law Firm and its principal attorney Christopher L. Diener for bilking thousands of homeowners out of thousands of dollars each.

Home Relief Services charged homeowners over $4,000 in upfront fees, promised to lower interest rates to 4 percent, convert adjustable-rate mortgages to low fixed-rate loans and reduce principal up to 50 percent within 30 to 60 days. None of the known victims received a modification with the assistance of the defendants.

In some cases, these companies also sought to be the lenders’ agent in the short-sale of their clients’ homes. In doing so, the defendants attempted to use their customers’ personal financial information for their own benefit.

Home Relief Services and the Diener Law Firm directed homeowners to stop contacting their lender because the defendants would act as their sole agent and negotiator.

Brown’s lawsuit contends that the defendants violated:
- California Business and Professions Code section 17500 by claiming a 95 percent success rate and promising consumers significant reductions in the principal balance of their mortgages;

- California Business and Professions Code section 17200 by failing to perform on promises made in exchange for upfront fees;

- California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

- California Business and Professions Code section 2945.3 by failing to include cancellation notices in their contracts;

- California Civil Code section 2945.45 by not registering with the Attorney General’s office as foreclosure consultants; and

- California Penal Code section 487 for grand theft.

Brown is seeking $10 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

Two other companies with the same management were also involved in the effort to deceive homeowners: Payment Relief Services, Inc. and Golden State Funding, Inc.

RMR Group Loss Mitigation Group
Brown Monday sued RMR Group Loss Mitigation and its executives Michael Scott Armendariz of Huntington Beach, Ruben Curiel of Lancaster, and Ricardo Haag of Corona; Living Water Lending, Inc.; and attorney Arthur Steven Aldridge of Westlake Village as well as the law firm of Shippey & Associates and its principal attorney Karla C. Shippey of Yorba Linda – for bilking over 500 victims out of nearly $1 million.

The company solicited homeowners through telephone calls and in-person home visits. Employees claimed a 98 percent success rate and a money-back guarantee. None of the known victims received any refunds or modifications with the assistance of defendants.

For example, in July 2008, a 71-year old victim learned his monthly mortgage payments would increase from $2,470 to $3,295. He paid $2,995, yet received no loan modification and no refund.

Additionally, RMR insisted that homeowners refrain from contacting their lenders because the defendants would act as their agents.

Brown’s suit contends that the defendants violated:

- California Business and Professions Code section 17500 by claiming a 98 percent success rate and promising consumers significant reductions in the principal balance of their mortgages;

- California Business and Professions Code section 17200 by failing to perform on promises made in exchange for upfront fees;

- California Civil Code section 2945.4 for unlawfully collecting upfront fees for loan modification services;

- California Business and Professions Code section 2945.3 by failing to include cancellation notices in their contracts;

- California Civil Code section 2945.45 by not registering with the Attorney General’s office as foreclosure consultants; and

- California Penal Code section 487 for grand theft.

Brown is seeking $7.5 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

United First, Inc.
On July 6, 2009, Brown sued a foreclosure consultant and an attorney — Paul Noe Jr. and Mitchell Roth – who conned 2,000 desperate homeowners into paying exorbitant fees for “phony lawsuits” to forestall foreclosure proceedings.

These lawsuits were filed and abandoned, even though homeowners were charged $1,800 in upfront fees, at least $1,200 per month and contingency fees of up to 80 percent of their home’s value.

Noe convinced more than 2,000 homeowners to sign “joint venture” agreements with his company, United First, and hire Roth to file suits claiming that the borrower’s loan was invalid because the mortgages had been sold so many times on Wall Street that the lender could not demonstrate who owned it. Similar suits in other states have never resulted in the elimination of the borrower’s mortgage debt.

After filing the lawsuits, Roth did virtually nothing to advance the cases. He often failed to make required court filings, respond to legal motions, comply with court deadlines, or appear at court hearings. Instead, Roth’s firm simply tried to extend the lawsuits as long as possible in order to collect additional monthly fees.

United First charged homeowners approximately $1,800 in upfront fees, plus at least $1,200 per month. If the case was settled, homeowners were required to pay 50 percent of the cash value of the settlement. For example, if United First won a $100,000 reduction of the mortgage debt, the homeowner would have to pay United First a fee of $50,000. If United First completely eliminated the homeowner’s debt, the homeowner would be required to pay the company 80 percent of the value of the home.

Brown’s lawsuit contends that Noe, Roth and United First:

- Violated California’s credit counseling and foreclosure consultant laws, Civil Code sections 1789 and 2945

- Inserted unconscionable terms in contracts;

- Engaged in improper running and capping, meaning that Roth improperly partnered with United First, Inc. and Noe, who were not lawyers, to generate business for his law firm violating California Business and Professions Code 6150; and

- Violated 17500 of the California Business and Professions Code.

Brown’s office is seeking $2 million in civil penalties, full restitution for victims, and a permanent injunction to keep the company and the defendants from offering foreclosure consultant services.

Tips for Homeowners
Brown’s office issued these tips for homeowners to avoid becoming a victim:

DON’T pay money to people who promise to work with your lender to modify your loan. It is unlawful for foreclosure consultants to collect money before (1) they give you a written contract describing the services they promise to provide and (2) they actually perform all the services described in the contract, such as negotiating new monthly payments or a new mortgage loan. However, an advance fee may be charged by an attorney, or by a real estate broker who has submitted the advance fee agreement to the Department of Real Estate, for review.

DO call your lender yourself. Your lender wants to hear from you, and will likely be much more willing to work directly with you than with a foreclosure consultant.

DON’T ignore letters from your lender. Consider contacting your lender yourself, many lenders are willing to work with homeowners who are behind on their payments.

DON’T transfer title or sell your house to a “foreclosure rescuer.” Fraudulent foreclosure consultants often promise that if homeowners transfer title, they may stay in the home as renters and buy their home back later. The foreclosure consultants claim that transfer is necessary so that someone with a better credit rating can obtain a new loan to prevent foreclosure. BEWARE! This is a common scheme so-called “rescuers” use to evict homeowners and steal all or most of the home’s equity.

DON’T pay your mortgage payments to someone other than your lender or loan servicer, even if he or she promises to pass the payment on. Fraudulent foreclosure consultants often keep the money for themselves.

DON’T sign any documents without reading them first. Many homeowners think that they are signing documents for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership to the “rescuer.”

DO contact housing counselors approved by the U.S. Department of Housing and Urban Development (HUD), who may be able to help you for free. For a referral to a housing counselor near you, contact HUD at 1-800-569-4287 (TTY: 1-800-877-8339) or www.hud.gov.

If you believe you have been the victim of a mortgage-relief scam in California, please contact the Attorney General’s Public Inquiry Unit at http://ag.ca.gov/consumers/general.php.

11 Responses

1. 

   Steve, on July 22nd, 2009 at 10:30 pm Said:

   That A. mortgage to B and C didn’t record but D did came out the California Real Estate Principals Exam I remember that question. It wasn’t exactly worded like that but yes D recorded the note, made the payments, and paid the property taxes so D had more proof of ownership than B or C for just living there. It was something along those lines. I didn’t care to take the Master Exam after learning I would have to create white lies in order to sell and become sucessful. I have a conscience you know. The guilt just doesn’t allow me to screw people.
2. 

   angry&not taking it, on July 22nd, 2009 at 9:21 pm Said:

   pro se
   please , if you didnt write “that crap” add a link from whence it came so all the fellow “dirters” may reply in kind to the talking head or is that tail of MERS..
   its almost hard to say MERS out load without laughing…
   how pathetic .
3. 

   pro-se, on July 22nd, 2009 at 12:48 pm Said:

   Neil, I didn’t write that crap about Mers. I found it in another blog.
4. 

   JL Semidey, on July 22nd, 2009 at 12:35 pm Said:

   Dear Mr. Bentley,

   in order to understand MERS and all of this mess we have to review several years of lender and securitization lobbying in Washington.

   As well exposed in this blog all of these entities colluded in some fashion either by omission , aggregation or subjugation or their fiduciary duties. MERS is all but a tracking system for servicing agents and foreclosure attorneys. The only document they really track is the deed of trust. If they did track the note and who owns it the securitization process, or in other words, the illegal pyramid scheme these crooks created could not have survived for so long.

   They realized that as soon as they issued those bonds or certificates out of commingled notes, they had no way of tracing the factual and real ownership of the rights to the promissory note. That is why the lenders and foreclosure attorneys lobbied to a great degree of success most state legislatures to change the judicial foreclosure processes in their states for no judicial proceedings.

   The only document that was going to be easily taced was going to be the one that was recorded in the land records, the deed of trust. But they created MERS, to enable them to transfer that document without the proper notice to the local tax collector and the borrower, who sat in the living room , without the actual knowledge of who the real note holder was.

   I am surprised that there are no class actions that I know of against MERS, and all the lenders and servicers who are its stock holders.

   I still have an issue with the judges that are not willing to see beyond the notice of default by the pretender lender, specially in Maryland. These judges do not seem to grasp the chages that occurred in the way the documents were handled and how the public was cheated.
5. 

   livinglies, on July 22nd, 2009 at 7:33 am Said:

   PRO SE: If you are pro se, why is your email at a law office? Nice try at justifying MERS and the use of forged instruments. If that is your best shot go ahead and take it. I’d like to be there when you tell the judge that it doesn’t matter that your client paid nothing, it doesn’t matter that the assignment and transmittal documents were fabricated for the express purpose of litigation, and it doesn’t matter that those documents were forged and notarized by a notary who wasn’t even in the same state. I’d like to hear the response of even the most neo-con judge. I suspect that you would meet the same fate as those in Massachusetts where BOTH the lawyer and the client were bashed with $750,000 in fines.
6. 

   Steve, on July 21st, 2009 at 6:31 pm Said:

   If you lied about your debts, then that’s your problem. But how did you lie about your income? The first requirement to obtaing a loan is to bring in 2 years prior taxes. So now you lied to the IRS for years and inflated your income by three times just to pay more in taxes. And then you went out and bought a home you never could afford.
   CHAPTER 29–HOME MORTGAGE DISCLOSURE
   Sec. 2803. Maintenance of records and public disclosure.

   The loan application register I believe is suppose to be on file three years after the 1st year of closing. I’d love to see where this imaginary income came from after you had my taxes.

   Check this out…

   CHAPTER 49–HOMEOWNERS PROTECTION

   Sec. 4905. Disclosure requirements for lender paid mortgage insurance

   (c) Notices to mortgagor In the case of lender paid mortgage insurance that is required in connection with a residential mortgage transaction– (1) not later than the date on which a loan commitment is made for the residential mortgage transaction, the prospective mortgagee shall provide to the prospective mortgagor a written notice– (A) that lender paid mortgage insurance differs from borrower paid mortgage insurance, in that lender paid mortgage insurance may not be canceled by the mortgagor, while borrower paid mortgage insurance could be cancelable by the mortgagor in accordance with section 4902(a) of this title, and could automatically terminate on the termination date in accordance with section 4902(b) of this title; (B) that lender paid mortgage insurance– (i) usually results in a residential mortgage having a higher interest rate than it would in the case of borrower paid mortgage insurance;

   I put down over 20% so I wouldn’t have to pay the P.M.I. My broker said I couldn’t get a fix since I was using stated income and that I had to go with an Option-Arm. Now behind in payments an insurance company calls to find out if I’m still here. She says my lender has a policy out on me since they decided I was a high risk borrower. Thanks for letting me in on the scam. I don’t think I would have invested everything if you just would have told me I was gambling being such a high risk.
7. 

   MARIO KENNY, on July 21st, 2009 at 11:25 am Said:

   When will the government put a stop to the blood letting, put a stop to all foreclosures and give back the homes, the banksters have stolen. Do you know That Deutsche Bank got 6 billion tax dollars, when the congress intended that no foreign bank get our tax money? AIG gave this money to them.
8. 

   pro-se, on July 21st, 2009 at 11:22 am Said:

   Fellow Dirters,

   Connecticut does not require an assignment of mortgage to be valid
   between the Mortgagor and the holder of the debt evidence (the note).
   We still believe that a mortgage can only secure an obligation, and
   thus there are two instruments with which to be concerned – the
   evidence of the obligation, and the security for it. The mortgage is
   “mere” security. If The Mortgagor wants to pay the Note Holder, he
   may, and most will merely upon a letter from the Note Holder that the
   note has been transferred.

   I think this is what MERS tries to do – track the transfers of the
   note. In Connecticut, only the record holder of the Note is entitled
   to the Judgment of Foreclosure, although the foreclosure action may
   be commenced by another pending the actual recording. Nominees cannot
   foreclose because they don’t own the note.

   All this discussion is fruitful, especially as recording costs soar
   ($53 here for an assignment or release), and states try to tax
   anything imaginable. The best reason to require assignments of
   mortgages is to protect innocent purchasers from buying the note with
   no notice that the mortgage had been assigned. This was the case from
   about 75 years ago:

   A mortgaged property to B. Later, B having fallen on hard times,
   assigned for value the note and mortgage to C, and delivered to C an
   assignment of the mortgage which was the responsibility of C to
   record in the land records. C neglected to do this for some reason,
   but A began making note payments to C. B, still on hard times
   discovered that the mortgage assignment had never been recorded. B
   was leaving town for good reason. He created a forged note, and for
   value assigned it and the mortgage to D, and delivered yet another
   assignment of mortgage. D promptly recorded the assignment, and
   requested A to make future payments to D. A didn’t know to whom
   payments should be paid, and requested the court to decide.
   Eventually, our Supreme Court (our highest court, unlike NY where
   Supreme means the lowest !) decided that D was entitled to the note
   payments. What, the holder of the real note loses? Yup. The holder of
   the forged note wins. In order to protect the sanctity of our
   recording statutes so bona fide purchasers are protected by what is
   shown in the land records, the person (C) who created the problem
   suffers the loss.

   So isn’t this reason enough to record mortgage assignments, and why
   MERS has a proper function in tracking note ownership.

   Dean Montgomery
   Greenwich, Ct
   203-629-2424
   203-629-2545 fax
   d.montgomery@@attysbentley.com
9. 

   MARIO KENNY, on July 21st, 2009 at 11:21 am Said:

   I cannot tolerate the fact that the banksters are getting away I want them on their knees. We must make them pay for what they have done to millions of families,our economy and our lives.
10. 

    MARIO KENNY, on July 21st, 2009 at 11:19 am Said:

    so what about the bloody banksters?
11. 

    Pete, on July 21st, 2009 at 8:48 am Said:

    Are there any solid loan modificators that do deliver?

Send Marcy Kaptur Letters of Support–Just Do it

Send Marcy Kaptur Letters of Support–Just Do it

Posted on July 21, 2009 by livinglies

The congresswoman from Ohio just keeps getting better and better. And the fact that the people with more power than her in Congress are trying to step on her is getting the response they serve — burned. Just listen to this exchange between Congresswoman Kaptur and Former Secretary Paulson 4 days ago, she had him squirming like a kid sitting outside the principals office.

Kaptur v Paulson Congressional hearings

Livinglies devotees we MUST let this woman of Truth know we are behind her whether you are from Ohio or not….

Washington Office 2186 Rayburn Bldg. Washington, DC 20515 Tel: (202) 225-4146 Fax: (202) 225-7711

Ohio Office One Maritime Plaza – Sixth Floor Toledo, Ohio 43604 (800)964-4699|(419) 259-7500 Fax: (419) 255-9623

5 Responses

1. 

   Felix Trejo, on July 23rd, 2009 at 5:43 pm Said:

   I am as glad as anyone to learn that it took a brave congress woman to speak up and stand up for her constituents. I am so proud of you Madam Marcy. You are the voice of America and an angel from the heaven sent to speak for us, the servants of the greedy government, politicians, and the power of the rich. Those well connected to spread their disease with their high ego and greed to keep us ignorant and in the dark for hundreds of years. Now that there is a shade of light to expose all those who had taken advantage of the people in this country.
   I come from corrupted government, dictators, and the worst I ever seen. But to come to America, the land of the free and the home of the brave. Come on! How can Americans do this to Americans? I am talking about the greatest corruption in mankind here. We are facing trillions of dollars in debt for the next three or four generations. You greedy people, did you realized you are not doing it to us, but to our children and their children.
   Haven’t you learn that the greatest empires in the world had come down many times in history? How long can you think that you would be able to get away with this wrong doing?
   If we don’t stop you, karma will. Your days are being counted and there is not scape. For the next few months, there will be an epidemic, people will start listening about this everywhere in the news, the newspapers, the radio, the internet. All of you will fried in hell. You better redeem yourself if you are reading this and you are one of them.
   I will support you and wish I could meet with you to promote your work and teach people in this country that education is more powerful than all the money in the world.
   Learn to fight for your rights.
   Madam Marcy, please keep up the greatest work in the history of America and in the world for what you are doing for all of us. Not just the people of Ohio. Let’s spread the word from California to Florida.
   Thanks & God Bless you!
2. 

   angry&not taking it, on July 23rd, 2009 at 11:30 am Said:

   thank you marcy & company
   why are there not more voices in congress???
   these lone few are a testament to their spirt of service & conviction of principle! .let this be an admonishment to the silent on the side of the $ that a single spark will light the blaze, and yet those rats will scatter to seek refuge among the opposition their true colors will reveal them for what they are..weak & selfish.

   these lone few are patriots.support them!!
3. 

   erlinda, on July 21st, 2009 at 3:08 pm Said:

   last 2 weeks ago, i personally called and left messages to congresswoman marcy kaptur in ohio about her knowledge in securitized mortgages. i almost have tears in my eyes when i watched her on the news about her fighting the foreclosures in behalf of homeowners in her district. she has the courage to speak up against the banksters who got bailed out by our tax money and yet nothing has been done to bailed out the homeowners. this is a woman who understand our plight as a homeowners, lucky constituent of her district, at least one politician stood up to fight against the “banksters”. please call her and leave messages and support her in her quest for toppled the banksters. i am from california. i admired her courage and determination. i don’t know any politician here in our district that cares for the homeowners. i only know so far i think she is from east los angeles , her name is congresswoman waters? pls. correct me if i am wrong.
4. 

   ALAN BARON, on July 21st, 2009 at 2:41 pm Said:

   It’s time for the pitchforks & torches to hit the streets, enough already !

   The big question I asked is why this is not headline news every where ?

   Neil is corrected , write Marcy Kaptur a letter of support and send one to your congress person voicing your outrage ! Emails & phones calls do work .

   We all need to keep up the pressure on both houses of government !
5. 

   pro-se, on July 21st, 2009 at 1:22 pm Said:

   I’m glad someone is stepping up to the plate. What ever happened to the concentration camps known as the BAR. They have not anything to stop these weasel lawyers from lying and making documents.

More on Default Trap Door

More on Default Trap Door

Posted on July 22, 2009 by livinglies

There is a trap door that a lot of people are falling through. In a securitized loan the investor is the lender. In order for there to be a default, it is the investor who has lost money through non-payment. The investor has not lost money through non-payment if a payment was made through the government or insurance or cross collateralization that satisfies the obligation in whole or in part. If in part, then the question becomes whether the payments should be credited or the principal balance. Servicing banks will usually credit an extra payment to the monthly payments due and not to the principal unless specifically instructed to do so.

Now none of this takes away from the fact that it is dubious at best that the “borrower” (who is actually an investor first, an issuer second and then perhaps a borrower) is not a party to the bond transaction or any preceding transactions in the securitization chain which means that the unconditional promise to pay the “borrower” signed was instantly, at the time of closing, converted to a conditional promise to pay. That means because of the addition of terms and parties including co-obligors, that a new contract was created purporting to use the transaction between the named payee on the note and the “borrower” as the base transaction. The problem is that the borrower never agreed and never would agree as a reasonable person to have his identity used for the purpose of securing loans to other people nor to have his payments applied to defaults of other “borrowers.” Nor would the borrower agree as a reasonable person to keep paying after the obligation was paid. Thus we are left with a NEW CONTRACT and a series of NEW CONTRACTS going up the securitization chain as terms, conditions, insurance, parties were added.

The substance of the transaction is that the investor purchased a bond to which the “borrower” was not a party nor an obligor. The borrower signed a note to a party who was paid in full at closing satisfying the note at the same moment (or even before) the borrower’s “loan” closing — a transaction to which the investor was not a party. So we have two transactions in which the real parties in interest were kept separate and the real information regarding the entire single transaction was withheld from both sides. Either the investor transaction and the borrower transaction are linked or they are not. If they are linked as seems to be obviously the case, then the borrower has some liability on part of the obligation owed to the investor, along with all the other people (co-obligors) who fed out of that trough calling their withdrawal “fees,” “profits” etc. If they were not linked then there is nothing to talk about — no collection, no foreclosure —- because the obligation down the securitization chain, regardless of what level you stop at, has been satisfied in full plus exorbitant fees.

It seems stupid to even be required to state something this obvious — you cannot sue and collect on a loss that does not exist. To do so would be to create a windfall to perpetrators of fraud. While a windfall is not the object of this “game”, if it happens it clearly ought to go to the most innocent party — the one with the least access to information and who knew the least amount about the entire securitized chain of events (the “borrower”). However, to repeat my mantra, the investors were defrauded in virtually the same way as the “borrowers”. Thus a remedy that places everyone back in the position they were in before the fraud, would be to get as close as possible by funding a new mortgage that pays off the investor part of his investment, brings the balance of the note down to 80% of true loan to value, with affordable terms and perhaps an equity kicker for the investor. That would include BOTH borrowers and investors. The pretender lenders would be eliminated as they should be because they have no losses from these loans. Some of them may have losses stemming from selling multiple futures contracts on the same loan but that is simply a bad bet, a poor investment decision by a party who should and did know better.

6 Responses

1. 

   Martin Macisso, on July 29th, 2009 at 7:06 am Said:

   I believe it will be a battle to bring forth the John Doe argument as the base of your dispute. The cases being won are the basic black letter law cases, where the Plaintiff lacks standing as a matter of law, is not the injured party…the Defendant needs to raise this argument from the beginning with the Answer and then a good in depth Reply to the Motion for Summary Judgment complete with the Affidavit of denial. In securitized loans, the moving party for foreclosure is almost always the Servicer with no lawful claim, they cannot send NOD, they do not have lawful possession of the Note, did not get mortgage assigned in time. More Foreclosure Complaints are being brought forward by a Pass Through Security, as we’ve discussed these entities cannot hold the Note either as a matter of definitive fact because they are conduits. Move for Discovery, send a notarized QWR from the get go….do everything you can to survive summary judgment ….which should not be impossible as long as you are able to raise at least a genuine issue of material fact. Do not accept any document as Prima Facie evidence and Deny Deny Deny….push the burden of proof on the Plaintiff and get them into a position where they make certifications and affidavits based on lies. This is where the Court may find fraud. Its just my opinion, but once you survive summary judgement hearing and go to a full trial….the moment you can send interogatories, compel discovery and ask for witnesses….the gig would be up for the Pretender.
2. 

   James, on July 26th, 2009 at 9:18 pm Said:

   Well like I said or Icetea & I so much for the investors being innocent

   http://www.boston.com/business/articles/2009/07/07/lenders_avoid_redoing_loans_fed_concludes/
   in which which Federal Reserve Bank of Boston report’s credulity straining conclusion is stated as:
   Quote:
   The study, coauthored by Manuel Adelino and Kristopher Gerardi, also rebuts a widely held suspicion that the holdup in modifying loans is because of investors who control them through mortgage-backed securities. The Fed found no difference in the rate of aid between investor-controlled loans and those that lenders own directly.

   The FRBB report supported notion that securitization is not culpable for lack of mortgage modifications. This report has received far more coverage than it deserves, particularly since its ill conceived conclusions are based on a data set from Lender Processing Servicers f/k/a Fidelity, widely known for fabricating loan data.
   Yes, none other than LPS, subject of DOJ investigation:
   http://thepatriotswar.com/wp-content/uploads/doj-probing-lps-and-fis.pdfas
   and CT AG investigation:

   http://www.law.com/jsp/law/sfb/lawArticleSFB.jsp?id=1202431905187&Elite_Lists_for_Foreclosure_Work_Under_Scrutin y
3. 

   William Groves, on July 24th, 2009 at 9:47 am Said:

   The real challenge -and one with the largest payoff- would be to show:
   1) that my payments to the pretenders were never credited to the Note balance as held by the Note holder
   -AND-
   2) that the Note holder received payments (from AIG and TARP) that they applied against my Note balance that were never credited to me.

   Any help on finding someone who can help prove those things out?
4. 

   Foreclosure after years of denying my payments, on July 24th, 2009 at 3:07 am Said:

   I will hit facts only. July 2001 I closed on a home were my name was not on the note; however the note holder and my namewas on every other document prepared for closing Deed of Trust, Seller contract, itimized financing etc. After making mortage payments to bank myself for a year. The note holder filed a suite staing my name was placed on the title & deed in error. The bank then stopped me from making payments on the loan per their customer instructions the” note holder”. Oct 2004 District court determined the the true intent of the loan was for the benifit of purchasing my home; alone. And the deed of trust and title did not show the intent of the transaction. A Judgement in my favor court orderd reformation of title & deed of trust, effective date of closing to remove note holders name and reflect my name only has the true owner of the home. However i was oredered to continue all obligation & covenants the note holder was responsible for with note. Bank was provide judgement but stated they were obligated to honor judgement and still could not except payments from me per their customers instructions. However 8 months latter I received a certified letter indicating home was in default and scheduled for foreclosure and I had 30 days to come up with $9,000.00 to reinstate the note. I paid the money with belief I was now being acknowledged as a person responsible to pay loan. Bank again did note except my payment nor would te cash my checks per their customers instructions. I filled another lawsuite in court a few years later then FDIC took over the bank ” Indy Mc” Indy mc responded to discovery and a court date was scheduled March 2009. Two days before court FDIC stopped court date stating Indy Mc had not informed them of the pending court date and filled to have case done in Federal court. During the 90 day time frame awaiting a new court date I received a foreclosure notice. I then filled a Lis pendens in the clerks office. Before the required 90 day waiting period FDIC auction my home. The bank bought my home at auction and has transferred it to Fannie Mae. Where do I go from here? Remeber they denied payments I havemany correspondence were I pleaed that they take payments from me and letters stating the could not before the court order and after the judgemnt in my favor. I have certified letter from their attorneys demanding pay loan that I have defaulted addresed to me. P.S. the deed of trust used to foreclose with still had note holders name, despite Court order to reformation Deed of trust & titles.
5. 

   James, on July 23rd, 2009 at 4:08 am Said:

   As I have said before these investors are not innocent, think about it if the securities transaction took place before the loans were secured, then they had plenty of knowledge as to what they were gambling their money on & what the risks were as well as the potential benefit was. Neil you know that the investors were/havebeen hiding behind multiple “Conduits” to avoid negative publicity & litigation. Just look at the closing docs I sentyou a while back the ones with emerald financial. Emerald was on the 3 day ROR but they were the broker, the HUD-1 stated Frank livacich as the lender, & the trust deed had lenders t.d. as trustee & frank as beneficiary as well as him as joint tenent(he/they also violated tila hoepa rico respa & did NOT comply with my extended rescission demand). So how can you say the investors are innocent when they knew this whole gamble was just that from the beginning a “GAMBLE” with the extra doe that they obviously could just throw away vs. the homeowner’s house that he/she/they have spent their life working hard to pay off only to become the subject of immoral greed driven by INVESTORS!
6. 

   icetea, on July 22nd, 2009 at 4:33 pm Said:

   Neil,

   The past few posts you have written are absolutely magnificent !

   However …

   I have to take a bit of an issue on your stance with this particular default trap door analysis.

   While investors may have been defrauded, they did at least have access to a prospectus for the investment. That document does have quite a bit of detail on what will happen with the investment. The investors also qualify as sophisticated investors so that they should have run their own legal due diligence on the investment.

   I would agree that the investors were defrauded to some extent about the investment, but they were notified of most of the steps in the securitization (although not the entire single transaction). The prospectus does show that the claim that the Investors will receive the benefits of loan ownership without the legal liabilities of ownership.

   In contrast, the borrower had zero information about the nature of the transaction and what documents they did see were fraudulent.

   I know you are trying to come up with a fair settlement scenario with 80% etc. for the entire nationwide mess.. However, as you taught us before, the borrowers do have offsetting claims. So at least for me (pro se), I think I can document more claims than a 20% reduction*.

   * I’m in an area without huge drops in housing values.

   Just trying to apply your earlier principles of offsetting claims to the current analysis.

   Thanks for your hard work in this area!

Cuomo Files Civil and Criminal Charges Against Debt Collectors for Fraud on Courts

Cuomo Files Civil and Criminal Charges Against Debt Collectors for Fraud on Courts

Posted on July 23, 2009 by livinglies

Pretender lenders and lawyers for pretender lenders should take warning. The operation described in this article is virtually identical to the operation used by pretender lenders. See also LENDER LIABILITY pdf

July 23, 2009

N.Y. Claims Collectors of Debt Used Fraud

By JONATHAN D. GLATER

Tens of thousands of New York consumers had money seized by creditors using court orders that had been obtained by fraud, the state’s attorney general said Wednesday — and the money should be returned.

According to a lawsuit filed on Tuesday in New York Supreme Court in Buffalo, lawyers and debt collectors obtained more than 101,000 court orders that were improperly issued, allowing them to seize, on average, $5,474 from each consumer.

The lawsuit asserts that consumers were never properly notified and were not given a chance to defend themselves in court; creditors won default judgments. The total amount of money seized exceeded $500 million, according to the attorney general’s office.

“Our legal system is defined by due process and the guarantee that every New Yorker will get the chance to defend him or herself in court,” Andrew M. Cuomo, the attorney general, said in a statement. Not providing notice of legal proceedings, “undermined the foundation of this system.”

The two collections agencies and 35 lawyers and law firms named in the lawsuit, which lawyers for Mr. Cuomo’s office filed on behalf of the state’s chief administrative judge, Ann Pfau, all used one company, American Legal Process, of Lynbrook, N.Y., to notify consumers of debt collection proceedings.

But American Legal Process did not give people proper notice and instead “repeatedly and persistently falsified” statements that it had, according to the attorney general. In thousands of cases, a lawyer for Mr. Cuomo’s office stated in a court filing, individual American Legal Process employees claimed to have delivered notices of collections proceedings to different people in different locations at the same time.

When consumers did not appear in court, lawyers for creditors obtained court orders allowing them to take consumers’ money directly from bank accounts or to garnish wages.

A lawyer for American Legal Process, Corey Winograd, did not immediately return calls.

The attorney general brought criminal charges against American Legal Process and its chief executive, William Singler, in April. Those proceedings are continuing, according to Mr. Cuomo’s office.

6 Responses

1. 

   MARIO KENNY, on July 29th, 2009 at 2:37 pm Said:

   put your comments here when the list is ready I will contact you to put you with a lawyer, if I can
2. 

   Ramona Smith, on July 28th, 2009 at 4:00 pm Said:

   I would like more information on how to get on the list
3. 

   D.GOD,God,god-9, on July 23rd, 2009 at 9:33 pm Said:

   So are lawyers going to be putting lawyers in jail is my question? This seems like the game playing the game to show face. Wow look at what we are doing for you the poor poor consumer. What is it to fine a corporation or to shut one down a corporation? Its just a matter of switching the paperwork around and bam we have another one in its place. I say we have a long way to go and Im with it all the way, but WWE type lawsuits like this wont fool the elect few who are reading this thing close up. Oh by the way, any body ever seen a license to practise law ?
4. 

   JL Semidey, on July 23rd, 2009 at 7:19 pm Said:

   Mario by the way they did get over $6,000,000,000.00 of our tax dollars. I think they do owe us money!!!!!!

   class action any one????
5. 

   Rosetta, on July 23rd, 2009 at 12:03 pm Said:

   Mario, I am glad and elated. Let’s do this!! Deutsche Bank needs to be taught another lesson. I don’t know how or why they are allowed to get away with so much s–t. Count me in, PLEASE. Let’s not forget to include their Attorney Law Firms, Servicers, Brokers, Appraisal
   Company and everyone that has anything and anyoneto do with
   Deutsche Bank; their parents, children, cousins, aunts, uncles, neices, nephews, grandchildren, dogs and cats. (Do you get my drift?)
6. 

   MARIO KENNY, on July 23rd, 2009 at 9:59 am Said:

   Yes, this is truly a wonderful start, I think now is the time to do a Deutsche Bank Class Action. Please contact me if you would like to get on the list.

Class Action Firm Seeks Central Missouri Homeowners

Class Action Firm Seeks Central Missouri Homeowners

Posted on July 24, 2009 by livinglies

 Let’s do some networking here and help the lawyers who are helping us!

The lawyers in MISSOURI are seeking to make contact with homeowners in the central part of the State of Missouri in the following counties:

Howard, Boone, Callaway, Osage, Cole, Miller, Monteau, Camden, Hickory, Benton, Morgan, Pettis, Cooper.

Please send information to ngarfield@msn.com. All information will be kept strictly confidential.

2 Responses

1. 

   George, on July 25th, 2009 at 3:28 am Said:

   My company aggregates class action lawsuits. The URL is http://www.classadvocate.com. Here is a link to pending class actions relating to home loans. If we can be of further assistance, let me know.

   http://www.classadvocate.com/?direct=y&category=product&product_root%5B%5D=110
2. 

   JL Semidey, on July 24th, 2009 at 12:38 pm Said:

   Any other lawyers trying class actions anywhere else start networking now!!!

That’s It: The Gloves Are Off — AZ LEADS EFFORT TO SCREW HOMEOWNERS

That’s It: The Gloves Are Off — AZ LEADS EFFORT TO SCREW HOMEOWNERS

Posted on July 24, 2009 by livinglies

Doesn’t it bother you that you pay your taxes for doing business in the state of Arizona or whatever state you hail from, but the Wall Street players made trillions of dollars in trading securities based solely (deriving value from)upon interests in real property situated within the boundaries of your state and never reported any income, much less paid taxes on it? Don’t you want to know why your representatives in the state capital and the other people you voted into elective office are refusing to pursue or collect taxes that are due and which would eliminate the state’s budget deficit and create a surplus? Don’t you want to live in a state that is financially healthy instead of being sickened by illegal practices in which out-of-state players come into your state, make money, and leave with all the money?

OK I AM ANGRY AND I PROBABLY SHOULD COOL DOWN BUT I DON’T WANT TO COOL DOWN. I SPENT WEEKS OF GIVING THE ARIZONA LEGISLATURE AND THE EXECUTIVE BRANCH HOURS UPON HOURS OF FREE TIME, INFORMATION AND STRATEGIES TO REVIVE THE STATE ECONOMY, PUT HOMEOWNERS BACK IN THE DRIVER’S SEAT, AND COLLECT BILLIONS IN TAXES FROM THE WALL STREET TYCOONS WHO CAUSED THE REAL ESTATE MESS.

Adam Driggs, Republican Chairman of the Arizona House Judiciary Committee (Good Guy) attempted to get the Republicans moving on a track that would show that they did care about the budget, that they did care about the average citizen and that they were the party who could convert from being the party of “No” to the Party of “Yes, and here’s How.” I warned him he would probably meet savage resistance and unfortunately I was right. His effort caved but not for lack of trying.

Governor Brewer just signed a bill directly contrary to interests of the state of Arizona, its citizens and its community banks and credit unions. The bill is obviously bought and paid for by federal taxpayer money speaking at state levels on behalf of the banks that are “too big to fail.” This bill REMOVES the protection that homeowners have against lenders seeking deficiency judgements.

So let’s boil it down to this: you go to a closing where the appraiser says your property is worth $300,000. The so-called lender says it has reviewed the appraisal and it independently verified that it is correct. So you take a mortgage for $270,000. Then you find out that none of what you were told at closing is true and the property is worth $140,000, which is all you can get on a distrssed sale. Soon after your “closing” (in which they failed to disclose key elements of the transaction) you get a notice that your payments are reset to a level higher than your gross income and you wonder how any “lender” would approve a loan that you obviously could not pay. They foreclose abusing the privilege of non-judicial sale instead of a proper foreclosure action circumventing your right to due process.

In Arizona since you owe $270,000, there is a $130,000 deficiency. Your home was sold to some “third party” REO company controlled by one of the parties in the securitization chain. The price was $140,000.

In Arizona, the lender was barred from going after that deficiency precisely because the lender is the the one legally responsible for the sufficiency of the appraisal and all other aspects of the loan.

Now the legislature and Governor Brewer have removed that bar, so in addition to have been defauded by the banks you are now being punished by the government that was set up to protect the rights of its citizens.

Make no mistake about it, this is a Republican contraption to further ruin the State and its finances. There are plenty of ways to correct the state and national economy, housing values and the ability of local banks and credit unions to take up the slack where the Wall Street tycoons have left a void. All of those strategies are not only being ignored they are being trashed in the name of lobbying money and possibly corruption.

Let’s say you are an ultra-conservative reopublican but you have not received any lobbying money and you have not received any of that taxpayer TARP money that Hank Paulson forced on a confused and unwilling congress and public. Let’s say you are concerned not about borrowers who were too stupid or greedy to look at the fine print, but that you are concerned as a citizen of the State and the Country about the mounting deficit. You don’t want taxes increased and you don’t want spending increased. Doesn’t it bother you that the Wall Street people who caused the mess are still calling the shots? What about their personal accountability?

Doesn’t it bother you that you pay your taxes for doing business in the state of Arizona or whatever state you hail from, but the Wall Street players made trillions of dollars in trading securities based solely (deriving value from)upon interests in real property situated within the boundaries of your state and never reported any income, much less paid taxes on it? Don’t you want to know why your representatives in the state capital and the other people you voted into elective office are refusing to pursue or collect taxes that are due and which would eliminate the state’s budget deficit and create a surplus? Don’t you want to live in a state that is financially healthy instead of being sickened by illegal practices in which out-of-state players come into your state, make money, and leave with all the money?

Start asking questions. Be relentless. I’ve been doing this 2 years so far and it is finally getting to critical mass. become part of the movement — if not for political reasons then for moral reasons — and if not for moral reasons then just plain common sense. Its time to rise up America!

42 Responses

1. 

   Robert Morse, on July 29th, 2009 at 2:46 pm Said:

   Press release I just recieved regarding AZ SB1271

   Arizona State Senate
   1700 W. Washington St., Phoenix, AZ 85007

   Sen. Steve Pierce, R-1
   President Pro Tempore
   602-926-5584

   News Release
   -
   June 29, 2009
   FOR IMMEDIATE RELEASE

   Sen. Pierce announces support for the repeal of SB1271

   (STATE CAPITOL, PHOENIX) – State Sen. Steve Pierce, R-Prescott, today announced his support for the repeal of SB1271, an anti-deficiency law that passed the legislature and was signed by the governor on July 10.
   The bill intended to limit the time when housing investors, those who purchased homes with no intention of taking residence, could use Arizona’s anti-deficiency law to shield them from a judgment. This occurs if the investment property goes into foreclosure and the value of the investment is no longer worth what is owed.
   Since the time of the bill’s passage, issues have been raised by the Realtors Association highlighting unintended consequences of the bill that could have far-reaching impacts not limited to speculators or investors. Neither the Realtors nor any other group opposed the bill when it was heard in committee. In recent days however, they have called for it to be repealed
   “Very simply, a bill that was intended to protect community banks, has some serious flaws in it and it should be repealed before it takes effect,” Pierce said. “We need to fix this bill. I have visited with the Governor and numerous parties involved and they will be collaborating on how to correct the issue immediately.”

   ###

   For more information, contact:
   Sarah Dodge, Communication Coordinator
   Arizona State Senate Republican Caucus
   Office: (602) 926-3796, e-mail: sdodge@azleg.gov
2. 

   JL Semidey, on July 29th, 2009 at 11:37 am Said:

   Greetings RAJA,
3. 

   JL Semidey, on July 29th, 2009 at 11:37 am Said:

   Buy 1 stock on any of these firms and start sending them angry stock holder letters and file a lawsuit against them for fraud on their stock holders. I bet that if own stock they should have the obligation to disclose to you the dirt they have done. Let us hit them from the inside.
4. 

   JL Semidey, on July 29th, 2009 at 11:34 am Said:

   We should start writing Op Ed pieces for our local news papers, organize marches on the court houses at the step of the court houses where they are raping our families futures.

   Seminar in our Home owner associations, churches. let everyone know. call your state legislators and tell them you will not vote for them. Let us start changing the political face of America. Let us take back our country from these thieves!

   Call the every day, several times a day. write to them, several times a month, if you skip your Starbuck coffee for one day, you can send six or seven letters.
5. 

   James#, on July 29th, 2009 at 11:08 am Said:

   Any writers out there?
6. 

   John Woodward, on July 28th, 2009 at 2:14 pm Said:

   As far as a march on DC, it’s a good idea but I agree, the folks that would be mad enough to go probably have a higher priority with the few dollars they have than a trip to DC.

   I know that when the National Association of Realtors has an issue, they do what is known as a call to action. In short, it’s a prepared email that we receive along with a look up for our local comgressional representatives so it get’s to the right person. Perhaps some well thought out template could be here for the folks here to send to their elected officials would make a difference….or at least a template section of this web site could have the “e-mail of the week” that we could cut, paste, add/change to our liking and send it off. If enough emails go to enough of those in congress, there could be an effect.

   Just a thought….
7. 

   Rose, on July 27th, 2009 at 6:10 pm Said:

   Raja, I have a friend who is getting screwed over BIG TIME with IndyMac. If you have any info to share, please feel free to contact me at atlhalfjap@msn.com

   Thanks!
8. 

   James#, on July 27th, 2009 at 5:40 pm Said:

   angry&not taking it
   Your bullet points are very powerful! Maybe something that simple could workin an email, and include a request to forward to friends and go to the petition for signing. I would also in the petition demand that everyone in Congress resign. Not that they would but it would scare them enough to act on our behalf..
9. 

   Ella, on July 27th, 2009 at 4:03 pm Said:

   A petition is something that can be done to collect info and send it to Washington.

   One site which could collect data is http://www.thepetitionsite.com It collects name, email and address. It seems to me that the anger should encompass not only foreclosures, principal reduction, Wall Street running the world and Congress, Tim G giving all his buddies love, and on and on.

   I like Abby in CA am too beaten and poor to go to DC, but if we can get everyone to sign up and get email addresses and zip codes, then maybe regional marches could happen. We need to do it when Congress is in recess so they are HOME when this happens. We just need a good strong rant for the petition copy. Anyone up for that?
10. 

    angry&not taking it, on July 27th, 2009 at 3:49 pm Said:

    1st and foremost i can not think of an individual in our government to institute the measures of change needed and would use the momentum we would or could gather.. so a plan will need an intelligent direction to focus or attention & efforts, to make the undeniable statement
    …we are ANGRY & WILL NOT TAKE IT.
    we have been deceived
    we have been robbed
    we are aware of the fraud & lies of those in the position of elected trust that our
    greater good was traded for $.. that we will NEVER be GIVEN back without demanding it!
11. 

    Abby in CA, on July 27th, 2009 at 3:24 pm Said:

    I really tried to organize a march on Washington DC about 6 months ago for a 3 day weekend.
    I made a video for YouTube for Homeowners who are fighting foreclosures and discussed the march.

    I put ads on craigslist to seek volunteers who could get permits etc for the March.

    Just no interest. There are those employed folks..there not going to do it.

    I think most in foreclosure are financially taped out or drained….they can’t travel and are to busy doing this pro se stuff.

    I’m wipped out. Maybe somebody else can try to organize it all.

    It should be in DC–that is where the laws allowing this all started.
12. 

    Andrew, on July 27th, 2009 at 3:19 pm Said:

    How would one successfully organize such a thing?? We need resources. Certainly the consumer orgs out there can assist, such as NACA and even ACORN. Plus the foreclosure bar associations that exist can contribute. Need a website though. One that can collect people’s names, email addresses and locations so we can disseminate information to everyone involved, sync activities, and plan the march, notify the press, etc.
13. 

    angry&not taking it, on July 27th, 2009 at 3:11 pm Said:

    a march could become a logistical problem for many without the $$ to get to everyone to washington… but with ingenuity we could across all 50 states simultaneously ??… suggestion please??
    side note-we may need to move this discussion to a new local should Neil request it.
14. 

    Andrew, on July 27th, 2009 at 2:42 pm Said:

    Lets organize a march on Washington and demand that the homeowner get what they deserve out of all this mess! Principal Reduction! I am sure we could have a million-homeowner-march become successful considering all teh hits to this website!!!

    LETS DO IT!
15. 

    angry&not taking it, on July 27th, 2009 at 2:24 pm Said:

    james
    i agree completely..i have someone that could draft such a petition .
    we truly do need to band together to regain our civic rights sold to the banks
    by the inept greedy self-serving leeches our so called representatives .
16. 

    Raja, on July 27th, 2009 at 2:22 pm Said:

    Hi Martin Macisso

    Please e-mail me or call me on 011-5399-77694 I will give you some information on this. Any one victim of Indy Mac and Deutsche Bank.I have information with the loan # which these bastered have sold many time .Hit the son of bitches hard so that they should not dare to repeat this again and destroy the America.
17. 

    James#, on July 27th, 2009 at 1:36 pm Said:

    James,
    I would suggest a petition that demands that all our elected officals resign. If someone would write it up, I would use my email list to get it started. it would be like the old don’t buy gas from Chevron Campain, which never worked but this time I think there are enough people that are pissed off about what’s going on that it would spread like wildfire. There is a site online where you can create a petition and people can sign it. Use email to push people to the site. I think this would get our elected officials attention and they might get the idea the people are about ready for a revolt. If there is a good writer out there write it up.
18. 

    James, on July 27th, 2009 at 1:11 pm Said:

    MAN SCREW THIS LOOK AT US WHAT ARE WE ALL DOING BEGGING FOR SCRAPS FROM THESE OVER INFLATED CONDOMS WE’RE THEIR BOSS AND IF THEY FEEL SO OVERBURDENED THAT THEY NEED A RAISE THEN BY ALL MEANS I SAY WE RELEAVE THEM OF THIS INCONVENIANCE THAT OVERWHELMS THEM SO MUCH, FIRE ALL OF THEM. THERE IS NO TIME TO WAIT FOR A REALELECTION, WE NEED AFFIRMATIVE ACTION NOT WAITING AROUND FOR “REGULATORY” LEGISLATION TO NEVER PASS( THAT’S THAT OLD CARROT STICK TRICK) ALL THIS GOVERNMENT THAT CAN’T GOVERN THE VULTURES TRASH THE GOVERNMENT MODEL & FORM A VOTERMENT BECAUSE WE ARE ALL SUPPOSED TO BE TREATED EQUAL WE CAN’T HAVE THE BALANCE THROWN OFF BY SOME GROUP TRYING TO GOVERN THE MASSES WHETHER LARGE OR SMALL & DEMOCROCY MEANS BY THE PEOPLE FOR THE PEOPLE NOT OF OR OVER THE PEOPLE. OH YEAH & ONE OTHER THING SEEN AS THE JUDICIARY IS SO KEEN ON THE WHOLE ECF & TECHNOLOGICAL ADVANCEMENTS THAT HAVE MADE THINGS MORE SIMPLE FOR THEM, THEN I THINK IT’S TIME THEY BROADEN THEIR MINDS TO THE AREA OF LOGIC THAT REPLACING THEIR POSITIONS WITH AUTOMATED LAW FACTORING/TOLERANCE SYSTEMS WOULD REMOVE CORRUPTION & CONFLICTING BIASED OPINIONS THEY MAY HAVE & PROVIDE A CHEAPER METHOD TO PROVIDE THIS COUNTRY WITH THE JUSTICE THAT HAS BEEN UNEQUALLY RESTRAINED, & WITH LESS POSITIONS TO OCCUPY & EMPOWER THE LESS POWER THAT CAN BE ABUSED. JUST THINK OF IT LIKE THIS THEY CAN GET AWAY WITH ALL OF THIS..BUT.. ONLY IF WE LET THEM. REMEMBER WE ARE THE ONLY REASON THEY HAVE POWER IN THE FIRST PLACE THEN THE CONSTITUTION, REMEMBER THE PREAMBLE “WE THE PEOPLE” THAT’S “US”
19. 

    Martin Macisso, on July 27th, 2009 at 8:42 am Said:

    How do you search the SEC for relevant info? ie trusts, certificate series relative to your loan? Does anyone know this process?
20. 

    Rose, on July 26th, 2009 at 5:26 pm Said:

    Sadly, this is nothing new in many states. In GA, the pretender lenders have had the ability to sue for a deficiency judgment for quite some time now. GA does limit them to a 30 day window to bring suit and most don’t do it, but that’s just because they’re too busy “foreclosing” on property they don’t own!
21. 

    angry&not taking it, on July 26th, 2009 at 9:03 am Said:

    btw ..i was warned of this.mortage mess years ago- aprox 2001.
    this robbery was no chance event.
22. 

    angry&not taking it, on July 26th, 2009 at 8:58 am Said:

    i believe you must look at this SO CALLED MELTDOWN for what it is.
    1- a well orchestrated hoax.. not – loosened underwriting standards!
    2- biggest banking swindle of all time.
    3- largest robbery by the bansters of american equity & middle class [ha] wealth.
    4- if you search the sec.. you will find 4- 5 banks tops @ the end of the $$ trail.
    most of which will be traced to a foreign country [ non usa ] or off shore .
    the international banking cartel [imf] has plans …
23. 

    erlinda, on July 26th, 2009 at 7:53 am Said:

    see this is another sign that our politician gone crazy. no regards to their constituents right if the law they authored are for the best of everyone.’s interest . senator pierce is not of help at all from the homeowners of arizona. they always blamed the homeowners for the mortgage meltdown when in fact it was the banksters who sabotage our economy. and initiate the so “called fraud” in mortgage business. do you think if banksters did not loosen their underwriting standard and gave us different kind of program such as NINA loan – no income no asset loan as long as you have a higher Fico score you could be approve? now the bankster are blaming the homeowners for the mortgage meltdown, when they are the one who encourage the homeowners to take advantage of the lower rates being offered? why? because of big profits they would received, the demand of wall street for big profits and the homeowners indeed the loser in this mess. ar the homeowners look stupid here ? yes of course? because our intentions to buy a property is in good faith not knowing that the banksters used us for their own interest to reap a big profits from us. now that their “Scam” are to be exposed, they use a powerful lobbyist to blames the homeowners and use corrupt politician to pass a law that favors the banksters.
24. 

    Abby in CA, on July 25th, 2009 at 5:31 pm Said:

    James–I’m not totally certain yet.

    This could be part of that appraisal fraud issue Neil keeps talking about.

    Consult with an attorney.

    However, I’d include the appraiser in any complaint by name and allege appraisal fraud.

    Remember, I am not an attorney. This is just what I would do.
25. 

    James, on July 25th, 2009 at 5:18 pm Said:

    Abby you have my attention what does all that mean for CA? the appraisal they cunducted when I refied my house was $550,000 but the property value notice I got from the county assessor is $170,000 what does all this mean?
26. 

    Bryce Easton, on July 25th, 2009 at 12:36 pm Said:

    Those S.O.B’s
27. 

    Lane Houk, on July 25th, 2009 at 11:28 am Said:

    Neil,
    I agree and have known for some time that the only way to fight this war is with the gloves off. The institutions and the gutless politicians only respond when you take it to them. It’s time for homeowners and the professionals who help them to strap on some brass knuckles and take the fight to them.

    One strategy I’ve been focusing on in our community is the media. The local news stations and newspapers. We are starting to have some success. The local newspaper is now running a series on foreclosure to which I am a contributor.

    I hope more people will take this fight to the media. I don’t like a lot of what the media does but one thing is for sure, they do help to keep these spineless officials in check – at least a little anyway.

    If you’d like to read the coverage we got here in Ft. Myers, FL – I have a full post of it on my blog at http://thepatriotswar.com/index.php/fighting-the-foreclosure-war-get-the-media-involved/featured/
28. 

    Andrew, on July 25th, 2009 at 7:51 am Said:

    Got it. Found the story on it here.
    http://www.phoenixnewtimes.com/2009-07-23/news/housing-crisis-governor-brewer-signed-a-bill-that-has-the-potential-to-bankrupt-homeowners-facing-foreclosure
29. 

    Andrew, on July 25th, 2009 at 7:47 am Said:

    Neil,
    What was the bill number that just became law in AZ?
    Andrew
30. 

    Andrew, on July 25th, 2009 at 7:28 am Said:

    Politicians respond to two things and only two things: Votes and Money. Period.
31. 

    usedkarguy, on July 24th, 2009 at 6:06 pm Said:

    this would be a nice piece for Bill O’Reilly. I think I’ll send him an e-mail.
32. 

    erlinda, on July 24th, 2009 at 5:10 pm Said:

    that is the reasons why i swear to myself i would never exercise my right to vote in the coming election either a local or national election because the baby boomer politician are either corrupt os involved in a sexual misconduct. i think we the homeowners start to boycott and not to exercise our right to vote. lets us not vote. i don’t see any real politician that stand up for the rights of each citizens. except marcy kaptur and congresswoman water in los angeles, ca. all the politician are represented by big lobbyist for their advancement. we need to march in washington, d.c. with our yellow ribbons ties to our right arms and demanded that the government take action on this rising problem of foreclosure so far it reaches 1.5 millions since january till the month of june homeowners who are on foreclosure notice. and, listen to this according to ny times another big stunami is coming next year another 3 millions homeowners will face foreclosure. please read the 74 pages by atty. diane e. thompson , her written testimony before the united states senate committee on banking, housing ,and urban affairs on july16, 2009. she is also representing on behalf of national association of consumer advocate.. according to her testimony the rising of foreclosures are the making of loan servicer who refused to follow obama’s modification plan because of small profits. it is all about business. itis more profitable for the loan services to foreclose because they could get the full commission and whatever padded fees added on its foreclosure property. that is the reason’s why many fraudulent documents were sent out to the homeowners by loan servicer so they could hurriedly foreclose a certain property. if homeowners don’t fight their right for this foreclosure notice, homeowners are the one who are the loser. but these loan servicer who uses sub servicer to foreclose the property did not even check the document that were provided by the loan servicer because the person who process the papers are also did not know what they doing. means incompetency by the workers who initiate the foreclosure. so if are a smart homeowners don’t allow them to foreclosure your property. ask them their standing , if they are indeed the interested party and owned the note. if not then the entity or the loan servicer who initiated the foreclosure has no standing and no right to foreclose. if the loan servicer could produce the original note, then the investor who owned the original note is also subject to counter claims for other violation of non- compliance under tila and respa act or fraud . there are so many causes of action you could file against the lenders and the investor . so very important also is to have your loan document forensic.
33. 

    Alina, on July 24th, 2009 at 2:52 pm Said:

    Everyone:

    check out this website: http://www.givemeliberty.org/
34. 

    Abby in CA, on July 24th, 2009 at 2:15 pm Said:

    In California, the appraisal value could be $850,000 (based on real estate sales comps) and the property tax appraiser value at $359,000 (with 100K of that being lot (dirt)!!

    Big disparity.
35. 

    Alina, on July 24th, 2009 at 2:09 pm Said:

    This is truly the most outrageous thing I have read thus far. There needs to be mass outcry against the banksters.

    WAKE UP AMERICA!!!! We are all sheep being taken to slaughter.
36. 

    Alina, on July 24th, 2009 at 2:07 pm Said:

    Abby,

    When I did eminent domain, the county assessor’s value is 2/3 of the appraised value. In other words, to get an idea of a property’s true appraised value, you would take the county tax assessor’s amount and multiply by 1.3. The county tax assessor does not tax property owners on the full value of their home. At least that’s how it was done (b4 the bubble) in Florida.

    Alina
37. 

    JL Semidey, on July 24th, 2009 at 12:36 pm Said:

    Come on guys, let us be real, these guys will sell out, have sold out to the contributors, they only know the language of how can I be reelected. I hope all the crooks fro New Jersey start talking and giving up names of who pays of for what.

    if we do not take our country back, we are in trouble. You see these people confuse Capitalism with democracy. It is sad.

    Now the citizens of AZ will have to bail out the lenders again, they will get hit by deficiency judgments for homes and mortgages has have most likely been paid off in full several times over.

    I live in Virginia and I am mad as well.
38. 

    James#, on July 24th, 2009 at 11:52 am Said:

    The above is really depressing!
    Neil, I am sorry they took advantage of your good will.

    They are killing us slowly, like the story about boiling a frog, do it slow enough and he never jumps out of the water. We would be better off if they had let Wall Street go down back in September. Money is Power and our Government is giving all the money to Wall Street thus giving them more and more power. I think it is time for drastic measures!
39. 

    Martin Macisso, on July 24th, 2009 at 11:39 am Said:

    The State of Maine has recently passed a law that begins the transfer tax of bank owned properties previously exempt and puts the revenue from the collection into a fund for Mandatory Forelcosure Mediation. the law is LD1418 in the State of Maine a judicial foreclosure state. Highlights are:
    -Plaintiff must certify they are the holders of the note, mortgage with endorsements and assignments prior to filing the lawsuit.
    -Automatic Stay of foreclosure(even if after judgment) if mortagor is in mediation

    At least its a start….I am breifing struggling homeowners on this law as we speak.
40. 

    Abby in CA, on July 24th, 2009 at 11:13 am Said:

    You know, in past days, the appraisal was always linked to the county property appraiser’s dollar amount.
    In California, the property taxes are determined upon the county property tax appraiser’s breakdown–the dirt or lot worth so much, then the structure.

    Somehow, a new crop of appraisers shows up and they only base the appraisal on comps! They don’t even state what the county property tax appraiser has in the official records.

    Sounds like the same for AZ.

    I wonder why nobody pays any attention anymore to the actual county property tax appraisal, upon which individuals pay their property taxes.
41. 

    Abby in CA, on July 24th, 2009 at 11:08 am Said:

    I truly think people are stunned, ‘like deer in headlights!’.

    I don’t see any homeowners out there with any form of pitch forks, torches, candlelights …..
42. 

    ALAN BARON, on July 24th, 2009 at 9:29 am Said:

    That’s my # 1 fear that the bankers will get to the state legislatures and pass laws to screw us all. The US Senate is already controlled by them .

    To all of you reading this , write , email , call everyone to show your mad as hell, tell them I will not vote for anyone who goes along with the banks !

    I’ll say it again ,

    “IT’S TIME FOR THE PITCH FORKS & TORCHES TO HIT THE STREETS” !

    Wake up America , they are foreclosing on our future …today !

Lucrative Fees May Deter Efforts to Alter Loans

Lucrative Fees May Deter Efforts to Alter Loans

Posted on July 30, 2009 by livinglies

It’s not just that servicers get more money by pushing the loan further and further into distress. They certainly have that incentive. When the loan becomes “delinquent”, they get more money, when the loan goes into “default”, they get more money, and when the loan goes into “foreclosure”, they get more money. So of course they are just playing with you on modifications. Not only do they lack authority to modify, they have every reason not to help you. Beyond that and not reported in mainstream media is that they don’t just get the extra money down the road when the house is sold — they get it out of the pool of money from paying “borrowers.”

That means people who are paying have their money diverted to the servicers. And THAT means the real lender who funded the entire securitized transaction is being cheated out of what little money is left and THAT means that the real lender is not being paid becuase the intermediary pretender lenders are keeping it. By the way that is a direct breach of the terms of your original “note.”

And when the house is sold they don’t just get extra fees, they get a share of the house because the investors do not appear to be getting title to homes, nor the proceeds of sale of the homes.

July 30, 2009

Lucrative Fees May Deter Efforts to Alter Loans

By PETER S. GOODMAN

This week, the Obama administration summoned mortgage company executives to Washington to demand they move faster to lower payments for homeowners sliding toward foreclosure. Treasury officials called on the companies to hire and train more people quickly to field applications for relief.

But industry insiders and legal experts say the limited capacity of mortgage companies is not the primary factor impeding the government’s $75 billion program to prevent foreclosures. Instead, it is that many mortgage companies are reluctant to give strapped homeowners a break because the companies collect lucrative fees on delinquent loans.

Even when borrowers stop paying, mortgage companies that service the loans collect fees out of the proceeds when homes are ultimately sold in foreclosure. So the longer borrowers remain delinquent, the greater the opportunities for these mortgage companies to extract revenue — fees for insurance, appraisals, title searches and legal services.

“It frustrates me when I see the government looking to the servicer for the solution, because it will never ever happen,” said Margery Golant, a Florida lawyer who defends homeowners against foreclosure and who worked in the law department of a major mortgage company, Ocwen Financial. “I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want.”

Rich Miller, a governance project manager at Countrywide Financial and Bank of America before he left in January, said Bank of America had been reluctant to modify loans, which hurt the bottom line. The company has been waiting and hoping the economy will improve and delinquent customers will resume making payments, he said.

“That’s the short-term strategy,” said Mr. Miller, who oversaw training programs at Countrywide, which was bought by Bank of America. He now works as an industry consultant.

Bank of America disputed that characterization. “To think that somehow or other we would jeopardize investor relationships and customer relationships for the very small incremental income we would receive by delaying seems ludicrous,” said Robert V. James, the bank’s senior vice president for mortgage operations and insurance. “It’s not the right thing to do.”

Mortgage companies, some of which are affiliated with the nation’s largest banks, are paid to manage pools of loans owned by investors. The companies typically collect a percentage of the value of the loans they service. They extract their share regardless of whether borrowers are current on their payments. Indeed, their percentage often increases on delinquent loans.

Legal experts say the opportunities for additional revenue in delinquency are considerable, confronting mortgage companies with a conflict between their own financial interest in collecting fees and their responsibility to recoup money for investors who own most mortgages.

“The rules by which servicers are reimbursed for expenses may provide a perverse incentive to foreclose rather than modify,” concluded a recent paper published by the Federal Reserve Bank of Boston.

Under the Obama administration’s foreclosure program, a servicer that modifies a loan for a homeowner collects $1,000 from the government, followed by $1,000 a year for each of the next three years. A senior Treasury adviser, Seth Wheeler, said these payments amounted to “meaningful incentives to servicers to help overcome the challenges and competing demands they face in considering and completing loan modifications.” He added that mortgage companies “are contractually obligated to the terms of this program, which require them to offer modifications to qualified borrowers.”

But experts say the administration’s incentives are often outweighed by the benefits of collecting fees from delinquency, and then more fees through the sale of homes in foreclosure.

“If they do a loan modification, they get a few shekels from the government,” said David Dickey, who led a mortgage sales team at Countrywide and Bank of America, leaving in March to start his own mortgage advisory firm, National Home Loan Advocates. By contrast, he said, the road to foreclosure is lined with fees, especially if it is prolonged. “There’s all sorts of things behind the scenes,” he said.

When borrowers fall behind, mortgage companies typically collect late fees reaching 6 percent of the monthly payments.

“For many subprime servicers, late fees alone constitute a significant fraction of their total income and profit,” said Diane E. Thompson, a lawyer for the National Consumer Law Center, in testimony to the Senate Banking Committee this month. “Servicers thus have an incentive to push homeowners into late payments and keep them there: if the loan pays late, the servicer is more likely to profit.”

She cited Ocwen Financial, which reported that nearly 12 percent of its income in 2007 came from fees to borrowers.

Paul A. Koches, Ocwen’s general counsel, said: “We’d prefer that to be zero. The costs associated with our delinquent loans are in every instance in excess of the late fees.”

Data on delinquencies reinforces the notion that servicers are inclined to let problem loans float in purgatory — neither taking control of houses and selling them, nor modifying loans to give homeowners a break.

From June 2008 to June 2009, the number of American mortgages that were 90 days or more delinquent soared from 1.8 million to nearly 3 million, according to the realty research company First American Core Logic. During that period, the number of loans that resulted in the bank taking ownership of the home declined to 245,000, from 333,000.

As a home slides toward foreclosure, mortgage companies pay for many services required to take control of the property and resell it. They typically funnel orders for title searches, insurance policies, appraisals and legal filings to companies they own or share revenue with.

Ocwen established its own title company, Premium Title Services, in part to keep more of the revenue from foreclosures, said Ms. Golant, who helped start it.

“It was hugely profitable,” she said. “Premium Title would charge for the title when it got transferred to Ocwen, then charge again when it got transferred to the new buyer, and then sell title insurance. It was easy money.”

Mortgage companies not only gain this extra business through their subsidiaries, but also collect reimbursement for the payments when the houses are sold.

The investors who own bad mortgages accept whatever is left. Investors typically do not notice how much they give up to the servicers, because fees are embedded in complex sales.

“It’s under the radar,” Ms. Golant said.

Ultimately, the benefits of delinquency erode incentives for mortgage companies to dispose of troubled loans quickly, say experts, allowing distressed houses to decay and fall in value — a fact of little interest to the servicer.

“At the end of the day, it doesn’t matter what the house sells for, because they don’t take that loss,” said Ms. Golant. “Meanwhile, they are collecting all these fees.”

9 Responses

1. 

   angry&not taking it, on August 6th, 2009 at 10:52 am Said:

   http://mandelman.ml-implode.com/2009/08/suits-filed-against-sleazy-servicers-treasury-knew/
2. 

   angry&not taking it, on August 6th, 2009 at 10:47 am Said:

   maybe… just maybe,,,, there is a gravy train… allllllllllllllll aboard!

   http://www.usatoday.com/money/economy/housing/2009-08-05-mortgage-foreclosure-help_N.htm
3. 

   angry&not taking it, on August 4th, 2009 at 12:17 pm Said:

   neil..
   what is your take on ” the banks paying these bonuses as signs of the rats fleeing a sinking ship…ie take everything you can cause its all going in the toilet soon.
   my gut feeling is those closest to the $ their actions must be watched for signs of what is in the near future .. usd devalueization & following collapse , total restructuring of our monetary system [ on or to a new global basis ] imf protocol.
4. 

   Dan Edstrom, on August 1st, 2009 at 7:51 am Said:

   Olga,
   That is my feeling. However, if you do that you will for sure be foreclosed on. Either way you should talk with a competent attorney who can help with the choices.

   See Neil’s list of attorneys who “get it” …

   Thanks,
   Dan Edstrom
   dmedstrom@hotmail.com
5. 

   Olga Kosikova, on July 31st, 2009 at 9:03 pm Said:

   So basically, the answer is no, dont pay those money….because after I do, they won’t lower the payment anyways……
   Thank you
6. 

   Dan Edstrom, on July 31st, 2009 at 8:30 pm Said:

   Olga,
   It sounds like you are talking about a forebearance. Here is what happened to me:

   The servicer said they would do a forebearance – 3 monthly payments at my normal rate with 1 payment of $29,000. Then at the end they would “consider” a loan modification. I told them to hit the highway. I offered them an amount that is larger then the anticipated recovery value (from foreclosure). Their answer? Silence. I don’t believe them – they just want my money and then my house. I have heard about many horror stories of people giving them money and then being foreclosed on anyway.

   But that being said, I don’t have any direct experience doing a forebearance or a loan modification.

   Thanks,
   Dan Edstrom
   dmedstrom@hotmail.com
7. 

   livinglies, on July 31st, 2009 at 9:27 am Said:

   Dan Edstrom: Here is my take: It’s hush money covering up a Ponzi scheme that was 300 times the size of Madoff.
8. 

   Dan Edstrom, on July 31st, 2009 at 9:08 am Said:

   Hmmmm, banks paid more money in bonuses than they had in net income. I wonder where the extra money came from.

   Quote:
   “It said bonuses for Goldman Sachs Group Inc, Morgan Stanley and JPMorgan Chase were “substantially greater” than the banks’ net income. ”

   From:
   Cuomo: Bank Bonuses Exceeding Net Income

   http://moneynews.newsmax.com/financenews/banks/2009/07/30/241963.html?s=al&promo_code=8483-1

   Thanks,
   Dan Edstrom
   dmedstrom@hotmail.com
9. 

   Olga Kosikova, on July 30th, 2009 at 10:37 am Said:

   Hello,
   I was wondering if anyone who did Loan Modification run into the trial period. What happens after you pay that balance for 3 months, do they actually lower your interest? How does it really work.
   Thanks

Fabrication of Documents: MERS GAP Illuminated

Fabrication of Documents: MERS GAP Illuminated

Posted on July 30, 2009 by livinglies

Another example of why a TILA audit is grossly inadequate. A forensic audit is required covering all bases. Although dated, this article picks up on a continuing theme that demonstrates the title defect, the questionable conduct of pretender lenders and the defects in the foreclosure process when you let companies with big brand names bluff the system. The MERS GAP arises whether MERS is actually the nominee on the deed of trust (or mortgage deed) or not. It is an announcement that there will be off record transactions between parties who have no interest in the loan but who will assert such an interest once they have successfullly fabricated documents, had someone without authority sign them, on behalf of an entity with no real beneficial interest or other economic interest in the loan, and then frequently notarized by someone in another state. we have even seen documents notarized in blank and forged signatures of borrowers on loan closing papers.

NYTimes.com
Lender Tells Judge It ‘Recreated’ Letters
Tuesday January 8, 2008 11:38 pm ET
By GRETCHEN MORGENSON

The Countrywide Financial Corporation fabricated documents related to the bankruptcy case of a Pennsylvania homeowner, court records show, raising new questions about the business practices of the giant mortgage lender at the center of the subprime mess.The documents — three letters from Countrywide addressed to the homeowner — claimed that the borrower owed the company $4,700 because of discrepancies in escrow deductions. Countrywide’s local counsel described the letters to the court as “recreated,” raising concern from the federal bankruptcy judge overseeing the case, Thomas P. Agresti.

“These letters are a smoking gun that something is not right in Denmark,” Judge Agresti said in a Dec. 20 hearing in Pittsburgh.

The emergence of the fabricated documents comes as Countrywide confronts a rising tide of complaints from borrowers who claim that the company pushed them into risky loans. The matter in Pittsburgh is one of 300 bankruptcy cases in which Countrywide’s practices have come under scrutiny in western Pennsylvania.

Judge Agresti said that discovery should proceed so that those involved in the case, including the Chapter 13 trustee for the western district of Pennsylvania and the United States trustee, could determine how Countrywide’s systems might generate such documents.

A spokesman for the lender, Rick Simon, said: “It is not Countrywide’s policy to create or ‘fabricate’ any documents as evidence that they were sent if they had not been. We believe it will be shown in further discovery that the Countrywide bankruptcy technician who generated the documents at issue did so as an efficient way to convey the dates the escrow analyses were done and the calculations of the payments as a result of the analyses.”

The documents were generated in a case involving Sharon Diane Hill, a homeowner in Monroeville, Pa. Ms. Hill filed for Chapter 13 bankruptcy protection in March 2001 to try to save her home from foreclosure.

After meeting her mortgage obligations under the 60-month bankruptcy plan, Ms. Hill’s case was discharged and officially closed on March 9, 2007. Countrywide, the servicer on her loan, did not object to the discharge; court records from that date show she was current on her mortgage.

But one month later, Ms. Hill received a notice of intention to foreclose from Countrywide, stating that she was in default and owed the company $4,166.

Court records show that the amount claimed by Countrywide was from the period during which Ms. Hill was making regular payments under the auspices of the bankruptcy court. They included “monthly charges” totaling $3,840 from November 2006 to April 2007, late charges of $128 and other charges of almost $200.

A lawyer representing Ms. Hill in her bankruptcy case, Kenneth Steidl, of Steidl and Steinberg in Pittsburgh, wrote Countrywide a few weeks later stating that Ms. Hill had been deemed current on her mortgage during the period in question. But in May, Countrywide sent Ms. Hill another notice stating that her loan was delinquent and demanding that she pay $4,715.58. Neither Mr. Steidl nor Julia Steidl, who has also represented Ms. Hill, returned phone calls seeking comment.

Justifying Ms. Hill’s arrears, Countrywide sent her lawyer copies of three letters on company letterhead addressed to the homeowner, as well as to Mr. Steidl and Ronda J. Winnecour, the Chapter 13 trustee for the western district of Pennsylvania.

The Countrywide letters were dated September 2003, October 2004 and March 2007 and showed changes in escrow requirements on Ms. Hill’s loan. “This letter is to advise you that the escrow requirement has changed per the escrow analysis completed today,” each letter began.

But Mr. Steidl told the court he had never received the letters. Furthermore, he noticed that his address on the first Countrywide letter was not the location of his office at the time, but an address he moved to later. Neither did the Chapter 13 trustee’s office have any record of receiving the letters, court records show.

When Mr. Steidl discussed this with Leslie E. Puida, Countrywide’s outside counsel on the case, he said Ms. Puida told him that the letters had been “recreated” by Countrywide to reflect the escrow discrepancies, the court transcript shows. During these discussions, Ms. Puida reduced the amount that Countrywide claimed Ms. Hill owed to $1,500 from $4,700.

Under questioning by the judge, Ms. Puida said that “a processor” at Countrywide had generated the letters to show how the escrow discrepancies arose. “They were not offered to prove that they had been sent,” Ms. Puida said. But she also said, under questioning from the court, that the letters did not carry a disclaimer indicating that they were not actual correspondence or that they had never been sent.

A Countrywide spokesman said that in bankruptcy cases, Countrywide’s automated systems are sometimes overridden, with technicians making manual adjustments “to comply with bankruptcy laws and the requirements in the jurisdiction in which a bankruptcy is pending.” Asked by Judge Agresti why Countrywide would go to the trouble of “creating a letter that was never sent,” Ms. Puida, its lawyer, said she did not know.

“I just, I can’t get over what I’m being told here about these recreations,” Judge Agresti said, “and what the purpose is or was and what was intended by them.”

Ms. Hill’s matter is one of 300 bankruptcy cases involving Countrywide that have come under scrutiny by Ms. Winnecour, the Chapter 13 trustee in Pittsburgh. On Oct. 9, she asked the court to sanction Countrywide, contending that the company had lost or destroyed more than $500,000 in checks paid by homeowners in bankruptcy from December 2005 to April 2007.

Ms. Winnecour said in court filings that she was concerned that even as Countrywide had misplaced or destroyed the checks, it levied charges on the borrowers, including late fees and legal costs. A spokesman in her office said she would not comment on the Hill case.

O. Max Gardner III, a lawyer in North Carolina who represents troubled borrowers, says that he routinely sees lenders pursue borrowers for additional money after their bankruptcies have been discharged and the courts have determined that the default has been cured and borrowers are current. Regarding the Hill matter, Mr. Gardner said: “The real problem in my mind when reading the transcript is that Countrywide’s lawyer could not explain how this happened.”

7 Responses

1. 

   Foreclosure Fraud, on August 5th, 2009 at 7:21 am Said:

   MERS

   Basic Corporate Information

   •MERS is incorporated within the State of Delaware.
   •MERS was first incorporated in Delaware in 1999.
   •The total number of shares of common stock authorized by MERS’ articles of incorporation is 1,000.
   •The total number of shares of MERS common stock actually issued is 1,000.
   •MERS is a wholly owned subsidiary of MERSCorp, Inc.
   •MERS’ principal place of business at 1595 Spring Hill Road, Suite 310, Vienna, Virginia 22182
   •MERS’ national data center is located in Plano, Texas.
   •MERS’ serves as a “nominee” of mortgages and deeds of trust recorded in all fifty states.
   •Over 50 million loans have been registered on the MERS system.
   •MERS’ federal tax identification number is “541927784”.

   The Nature of MERS’ Business

   •MERS does not take applications for, underwrite or negotiate mortgage loans.
   •MERS does not make or originate mortgage loans to consumers.
   •MERS does not extend any credit to consumers.
   •MERS has no role in the origination or original funding of the mortgages or deeds of trust for which it serves as “nominee”.
   •MERS does not service mortgage loans.
   •MERS does not sell mortgage loans.
   •MERS is not an investor who acquires mortgage loans on the secondary market.
   •MERS does not ever receive or process mortgage applications.
   •MERS simply holds mortgage liens in a nominee capacity and through its electronic registry, tracks changes in the ownership of mortgage loans and servicing rights related thereto.
   •MERS© System is not a vehicle for creating or transferring beneficial interests in mortgage loans.
   •MERS is not named as a beneficiary of the alleged promissory note.

   Ownership of Promissory Notes or Mortgage Indebtedness

   •MERS is never the owner of the promissory note for which it seeks foreclosure.
   •MERS has no legal or beneficial interest in the promissory note underlying the security instrument for which it serves as “nominee”.
   •MERS has no legal or beneficial interest in the loan instrument underlying the security instrument for which it serves as “nominee”
   •MERS has no legal or beneficial interest in the mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
   •MERS has no interest at all in the promissory note evidencing the mortgage indebtedness.
   •MERS is not a party to the alleged mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
   •MERS has no financial or other interest in whether or not a mortgage loan is repaid.
   •MERS is not the owner of the promissory note secured by the mortgage and has no rights to the payments made by the debtor on such promissory note.
   •MERS does not make or acquire promissory notes or debt instruments of any nature and therefore cannot be said to be acquiring mortgage loans.
   •MERS has no interest in the notes secured by mortgages or the mortgage servicing rights related thereto.
   •MERS does not acquire any interest (legal or beneficial) in the loan instrument (i.e., the promissory note or other debt instrument).
   •MERS has no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans.
   •The note owner appoints MERS to be its agent to only hold the mortgage lien interest, not to hold any interest in the note.
   •MERS does not hold any interest (legal or beneficial) in the promissory notes that are secured by such mortgages or in any servicing rights associated with the mortgage loan.
   •The debtor on the note owes no obligation to MERS and does not pay MERS on the note.

   MERS’ Accounting of Mortgage Indebtedness / MERS Not At Risk

   •MERS is not entitled to receive any of the payments associated with the alleged mortgage indebtedness.
   •MERS is not entitled to receive any of the interest revenue associated with mortgage indebtedness for which it serves as “nominee”.
   •Interest revenue related to the mortgage indebtedness for which MERS serves as “nominee” is never reflected within MERS’ bookkeeping or accounting records nor does such interest influence MERS’ earnings.
   •Mortgage indebtedness for which MERS serves as the serves as “nominee” is not reflected as an asset on MERS’ financial statements.
   •Failure to collect the outstanding balance of a mortgage loan will not result in an accounting loss by MERS.
   •When a foreclosure is completed, MERS never actually retains or enjoys the use of any of the proceeds from a sale of the foreclosed property, but rather would remit such proceeds to the true party at interest.
   •MERS is not actually at risk as to the payment or nonpayment of the mortgages or deeds of trust for which it serves as “nominee”.
   •MERS has no pecuniary interest in the promissory notes or the mortgage indebtedness for which it serves as “nominee”.
   •MERS is not personally aggrieved by any alleged default of a promissory note for which it serves as “nominee”.
   •There exists no real controversy between MERS and any mortgagor alleged to be in default.
   •MERS has never suffered any injury by arising out of any alleged default of a promissory note for which it serves as “nominee”.

   MERS’ Interest in the Mortgage Security Instrument

   •MERS holds the mortgage lien as nominee for the owner of the promissory note.
   •MERS, in a nominee capacity for lenders, merely acquires legal title to the security instrument (i.e., the deed of trust or mortgage that secures the loan).
   •MERS simply holds legal title to mortgages and deeds of trust as a nominee for the owner of the promissory note.
   •MERS immobilizes the mortgage lien while transfers of the promissory notes and servicing rights continue to occur.
   •The investor continues to own and hold the promissory note, but under the MERS® System, the servicing entity only holds contractual servicing rights and MERS holds legal title to the mortgage as nominee for the benefit of the investor (or owner and holder of the note) and not for itself.
   •In effect, the mortgage lien becomes immobilized by MERS continuing to hold the mortgage lien when the note is sold from one investor to another via an endorsement and delivery of the note or the transfer of servicing rights from one MERS member to another MERS member via a purchase and sale agreement which is a non-recordable contract right.
   •Legal title to the mortgage or deed of trust remains in MERS after such transfers and is tracked by MERS in its electronic registry.

   Beneficial Interest in the Mortgage Indebtedness

   •MERS holds legal title to the mortgage for the benefit of the owner of the note.
   •The beneficial interest in the mortgage (or person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note and/or servicing rights thereunder.
   •MERS has no interest at all in the promissory note evidencing the mortgage loan.
   •MERS does not acquire an interest in promissory notes or debt instruments of any nature.
   •The beneficial interest in the mortgage (or the person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note (NOT MERS).

   MERS As Holder

   •MERS is never the holder of a promissory note in the ordinary course of business.
   •MERS is not a custodian of promissory notes underlying the security instrument for which it serves as “nominee”.
   •MERS does not even maintain copies of promissory notes underlying the security instrument for which it serves as “nominee”.
   •Sometimes when an investor or servicer desires to foreclose, the servicer obtains the promissory note from the custodian holding the note on behalf of the mortgage investor and places that note in the hands of a servicer employee who has been appointed as an officer (vice president and assistant secretary) of MERS by corporate resolution.
   •When a promissory note is placed in the hands of a servicer employee who is also an MERS officer, MERS asserts that this transfer of custody into the hands of this nominal officer (without any transfer of ownership or beneficial interest) renders MERS the holder.
   •No consideration or compensation is exchanged between the owner of the promissory note and MERS in consideration of this transfer in custody.
   •Even when the promissory note is physically placed in the hands of the servicer’s employee who is a nominal MERS officer, MERS has no actual authority to control the foreclosure or the legal actions undertaken in its name.
   •MERS will never willingly reveal the identity of the owner of the promissory note unless ordered to do so by the court.
   •MERS will never willingly reveal the identity of the prior holders of the promissory note unless ordered to do so by the court.
   •Since the transfer in custody of the promissory note is not for consideration, this transfer of custody is not reflected in any contemporaneous accounting records.
   •MERS is never a holder in due course when the transfer of custody occurs after default.
   •MERS is never the holder when the promissory note is shown to be lost or stolen.

   MERS’ Role in Mortgage Servicing

   •MERS does not service mortgage loans.
   •MERS is not the owner of the servicing rights relating to the mortgage loan and MERS does not service loans.
   •MERS does not collect mortgage payments.
   •MERS does not hold escrows for taxes and insurance.
   •MERS does not provide any servicing functions on mortgage loans, whatsoever.
   •Those rights are typically held by the servicer of the loan, who may or may not also be the holder of the note.

   MERS’ Rights To Control the Foreclosure

   •MERS must all times comply with the instructions of the holder of the mortgage loan promissory notes.
   •MERS only acts when directed to by its members and for the sole benefit of the owners and holders of the promissory notes secured by the mortgage instruments naming MERS as nominee owner.
   •MERS’ members employ and pay the attorneys bringing foreclosure actions in MERS’ name.

   MERS’ Access To or Control Over Records or Documents

   •MERS has never maintained archival copies of any mortgage application for which it serves as “nominee”.
   •In its regular course of business, MERS as a corporation does not maintain physical possession or custody of promissory notes, deeds of trust or other mortgage security instruments on behalf of its principals.
   •MERS as a corporation has no archive or repository of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
   •MERS as a corporation is not a custodian of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
   •MERS as a corporation has no archive or repository of the deeds of trust or other mortgage security instruments for which it serves as nominee.
   •In its regular course of business, MERS as a corporation does not routinely receive or archive copies of the promissory notes secured by the mortgage security instruments for which it serves as nominee.
   •In its regular course of business, MERS as a corporation does not routinely receive or archive copies of the mortgage security instruments for which it serves as nominee.
   •Copies of the instruments attached to MERS’ petitions or complaints so not come from MERS’ corporate files or archives.
   •In its regular course of business, MERS as a corporation does not input the promissory note or mortgage security instrument ownership registration data for new mortgages for which it serves as nominee, but rather the registration information for such mortgages are entered by the “member” mortgage lenders, investors and/or servicers originating, purchasing, and/or selling such mortgages or mortgage servicing rights.
   •MERS does not maintain a central corporate archive of demands, notices, claims, appointments, releases, assignments, or other files, documents and/or communications relating to collections efforts undertaken by MERS officers appointed by corporate resolution and acting under its authority.

   Management and Supervision

   •In preparing affidavits and certifications, officers of MERS, including Vice Presidents and Assistant Secretaries, making representations under MERS’ authority and on MERS’ behalf, are not primarily relying upon books of account, documents, records or files within MERS’ corporate supervision, custody or control.
   •Officers of MERS preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS’ authority and on MERS’ behalf, do not routinely furnish copies of these affidavits or certifications to MERS for corporate retention or archival.
   •Officers of MERS preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS’ authority and on MERS’ behalf are not working under the supervision or direction of senior MERS officers or employees, but rather are supervised by personnel employed by mortgage investors or mortgage servicers.
2. 

   angry&not taking it, on August 3rd, 2009 at 8:13 pm Said:

   kevin

   if its not an issue can you post the research you did on mers…the more eyes the more minds the better the chances of detecting a vulnerability or possible area of attack,
3. 

   jeff, on August 3rd, 2009 at 5:45 pm Said:

   [*1]
   Mortgage Elec. Registration Sys., Inc. v Holmes
   2009 NY Slip Op 51656(U)
   Decided on July 28, 2009
   Supreme Court, Suffolk County
   Whelan, J.
   Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
   This opinion is uncorrected and will not be published in the printed Official Reports.

   Decided on July 28, 2009

   Supreme Court, Suffolk County

   Mortgage Electronic Registration Systems, Inc., Plaintiff,

   against

   Theodore G. Holmes, Suffolk County Clerk, Defendants.

   08-43815

   ROSICKI, ROSICKI & ASSOC.

   Attys. For Plaintiff

   26 Harvester Ave.

   Batavia, NY 14020

   THEODORE G. HOLMES

   Defendant Pro Se 214 Huntington Dr.

   Mastic Beach, NY 11951

   CHRISTINE MALAFI, ESQ.

   Atty. For Def., County Clerk

   100 Veterans Mem. Hwy.

   Hauppauge, NY 11788

   Thomas F. Whelan, J.

   It is, ORDERED that this motion (#001) by the plaintiff for entry of a default judgment on the complaint served in this action for declaratory relief is considered under RPAPL Article 15 and CPLR 3215 and is denied.

   The plaintiff commenced this action for a judgment setting aside the March 11, 2008 mortgage satisfaction it purportedly issued by mistake, which was recorded in the Office of the County Clerk on April 7, 2008. The plaintiff also demands a judgment declaring the mortgage to be a valid and subsisting lien as of its April 7, 2008 recording date. By the instant motion, the plaintiff seeks a default judgment against the defendants named in the caption, neither of whom appeared by answer in response the plaintiff’s service of its summons and complaint. For the reasons set forth below, the motion is denied.

   It is a well established principle of equity that a lien affecting real property, satisfied through mistake or fraudulent acts of inducement, may be restored to its original status and priority provided that no injury or prejudice is inflicted upon anyone who innocently relied upon the discharge and either purchased the property or made a loan thereon in reliance upon the validity of said satisfaction (see Regions Bank v Campbell, 291 AD2d 437, 737 NYS2d 636 [2d Dept 2002] [satisfaction piece issued by mistake]; Matter of Barclays Bank of New York, 96 AD2d 594, 464 NYS2d 1016 [2d Dept 1983]; Matter of Ditta, 221 NYS2d 34 [Sup.Ct. Kings County 1961]; see also Merritt v Merritt, 47 AD3d 689, 849 NYS2d 888 [2d Dept 2008] [issuance of satisfaction piece fraudulently induced]; Emerson Hills Realty, Inc .v Mirabella, 220 AD2d 717, 633 NYS2d 196 [2d Dept 1995]; Goldstein v Gold, 106 AD2d 100, 483 NYS2d 375 [2d Dept 1984]; aff’d 66 NY2d 624, 495 NYS2d 32 [1985]). A mortgage lien discharged of record by the recording of a satisfaction piece issued by mistake or inadvertence is thus voidable. Accordingly, a mortgagee seeking judicial restoration of a satisfaction piece issued by mistake and/or inadvertence must demonstrate that such restoration “does not interfere or affect the rights of others which may have accrued subsequent to the erroneous discharge” (Matter of Ditta, 221 NYS2d 34, supra ).

   It is equally well established that to be entitled to a default judgment, the movant must establish the existence of facts which constitute cognizable claims for the relief demanded (see CPLR 3215[f]; Resnick v Lebovitz, 28 AD3d 533, 813 NYS2d 480 [2d Dept 2006]; Beaton v Transit Fac. Corp., 14 AD3d 637, 789 NYS2d 314 [2d Dept 2005]). While the proof required [*2]on an application for a default judgment is not as exacting as that required for a successful summary judgment motion, some first hand confirmation of the facts constituting the plaintiff’s claims against one or more defaulting defendants is required to be set forth in a verified complaint or in an affidavit by the plaintiff or other person possessed of personal knowledge of said facts (see Woodson v Mendon Leasing Corp., 100 NY2d 62, 760 NYS2d 727 [2003]; Cohen v Schupler 51 AD3d 706, 856 NYS2d 870 [2d Dept 2008]).

   A review of the plaintiff’s moving papers, including the complaint attached thereto, reveals that the plaintiff failed to meet this standard. The complaint is verified by plaintiff’s counsel and the affidavit of merits attached to the moving papers does not include factual assertions from which this court might ascertain that the plaintiff possesses cognizable claims for the judicial expungement of the subject mortgage satisfaction piece by reason of mistake (see CPLR 3215[f]). In this regard, the court notes that the record reflects that the mortgage satisfied by the subject satisfaction piece was consolidated with a subsequent mortgage and that said consolidated mortgage was recorded prior to the issuance of the subject satisfaction piece. These facts cast substantial doubt upon the plaintiff’s unsubstantiated claim that the satisfaction piece at issue was issued by mistake and/or inadvertence.

   More importantly, however, it is apparent that the plaintiff failed to demonstrate that it has joined, as party defendants to this action, all persons who acquired rights or interests in the subject premises subsequent to the recording of the subject satisfaction piece and prior to the plaintiff’s filing of its notice of pendency. The complaint served and filed herein contains no allegations that all persons possessing rights or interests which may be adversely affected by the granting of the relief demanded, be they known or unknown to the plaintiff, have been joined as party defendants. In addition, there are no allegations that there are no such persons in being. In the absence of such allegations and some first hand confirmation thereof, this court is unable to ascertain whether jurisdiction over all persons whose rights and interests may be adversely affected has been acquired.

   A judgment rendered without personal jurisdiction over all necessary parties affords incomplete relief and may be subject to direct and/or collateral attacks by those not joined whose rights and interests were adversely affected thereby (see Royal Zenith Corporation v Continental Insurance Company, 63 NY2d 975, 483 NYS2d 993[1984]; (”A court is without power to render a judgment against a party as to whom there is no jurisdiction”); Riverside Capital Advisors, Inc., v First Secured Capital Corp., 28 AD3d 457, 814 NYS2d 646 [2d Dept 2006]; (”A court has no power to grant relief against an entity not named as a party and not properly summoned before the court”); see also Hirsch v Syrota’s Auto Wreckers, Inc, 211 AD2d 62, 621 NYS2d 892 [2d Dept 1995]; Berlin v Sordillo, 179 AD2d 717, 578 NYS2d 617 [2d Dept 1992]). This court is disinclined to issue any such judgment particularly, where as here, the property rights and interests of persons not joined as party defendants are protected, not only by traditional notions of due process, but also by our “race-notice” recording acts and such rights and interests are at risk of being adversely affected by said judgment (see RPL Article 9: §290 et. seq.). Under [*3]these circumstances, the court will not confer upon the plaintiff the relief demanded in its complaint as it has not demonstrated that such relief will not adversely affect the statutory rights and interests afforded to bona fide purchasers or encumbrancers that accrued subsequent to the plaintiff’s mistaken issuance of the subject mortgage satisfaction piece and prior to the filing of the notice pendency (see RPL §291 et. seq.).

   In view of the foregoing, this motion is denied. The proposed order submitted by the plaintiff has been marked “Not Signed”.

   DATED: _______________________________________________

   Thomas F. Whelan, J.S.C.
4. 

   Kevin C., on August 3rd, 2009 at 2:00 pm Said:

   Aloha Tracee,
   I have been working hard to get this all exposed as well. If you don’t mind you could email me at kcollma@ hotmail.com. I have done some hard research as well on the whole MERS, assignments etc.

   I will be filing a motion to set aside default judgment this week and any help would be greatly appreciated.
   Thanks
   Kevin
5. 

   Emanuel McCray, on July 31st, 2009 at 12:40 pm Said:

   Keep me posted and up to date!
6. 

   Tracee, on July 30th, 2009 at 2:01 pm Said:

   First of all…a BIG thank you to Neil for all of the wonderful info on this site…it has been such a help to me and so many others.

   I am so happy to report because of this info that we are winning our battle with Deutsche and we were actually supposed to have a hearing this afternoon for their motion to lift our automatic stay which was reviewed by their “Bankruptcy Specialist”, and their only evidence to support their motion was copies of our note and mortgage from our recorder’s office as well as this bogus assignment. But after our attorney blew them out of the water with the forged signatures we discovered on the mortgage assignment they filed a “continuance” at the last minute and we will be receiving a proposal to “settle”. They are in the corner bleeding and I can’t wait to go in for the kill!!

   As we all know, Ameriquest went bye bye in 2007, yet they “assigned” our securitized mortgage via Citi as “limited” POA in March 2009 to Deutsche when the loan was 5+ months “delinquent”. Linda Green and Tywanna Thomas signed as “Vice President” and “Assistant VP” for Ameriquest based out of California and the company DOCX based in Alpharetta Georgia prepared and notarized the assignment with Brittany Snow being the notary, not to mention “backdating” the assignment to cover their own a$%&!! It was rather easy for me to find a TON of assignments with Green, Thomas, and Snow having discrepancies in the signatures as well as being “VP” for multiple companies in a matter of months. This is pretty much self explanatory of the FRAUD they are committing on the Courts and people and taking homes that they have no rights to…and I cannot wait to see what jackasses these “Specialists” will look like standing in front of a Federal Judge!!!

   ANY DOCUMENT PREPARED BY DOCX IN ALPHARETTA GEORGIA IS A FRAUD!!!!

   I wanted to keep this short…does not touch on so many other parts to the equation…feel free to contact me for further info!!!!

   I will keep you posted!!!

   Thanks again!!!
7. 

   JL Semidey, on July 30th, 2009 at 12:10 pm Said:

   This is still happening today, most foreclosure attorney firms will do whatever it takes to make those $2,500.00 per filing. They know that 90% of you will not even call them to askd them a question. and their phone systems are designed not to answer any of your calls.

   I would hope some one could file a class action against all these loans with MERS. Here in VA, we have a foreclosure firm that, tried to evict some one from their home, using three different identities. Let me explain, Wells Fargo and their foreclosure vultures, sued the property owner, who had rescinded the loan and who had an attorney representing him. They ignored all the QWR’s, all the calls and foreclosed without proper notice. They used MERS in all its versions. They sued in three different occasions using three different Wells Fargo Corporate identities. In VA after you sue twice for the same causes of action and then un suit the case, you lose. These crooks, tried to steal this families home faking documents, identities, corporate charters, etc.

   The homeowner will pursue an action to quiet title in the next week or so.

   Bye WELLS FARGO, ETal.

It’s Vindication, Not War

It’s Vindication, Not War

Posted on August 1, 2009 by livinglies

The prevailing view by homeowners and lawyers is that we are at war with Wall Street, the banks and even investors. People are angered by the bailouts of big financial institutions while the homeowners, the backbone of our economy are given nothing. It is easy to be swayed by emotion when your life and everything you have worked for by the rules are put at risk by unscrupulous mortgage lending practices, violations of securities laws and regulations and mortgage servicing fraud (the current “big game” in town). My advice is that although you have every right to be angry, anger can lead to bad decisions, judgments and actions. Keep your eye on the ball.

Your goal is to get justice which in this case means to put everyone back in the position they were in before this massive fraud occurred. There is a branch of government that is devoted to doing nothing but giving you a venue to be heard on your grievances and complaints. That is the judicial branch that maintains an extensive system of courts throughout the country. The laws and rules governing procedure in presenting your claims, counterclaims, affirmative defenses and demands for information are fairly straight-forward and mostly fair. Use them with the same cool detachment that the lawyers for the pretender lenders are using them.

Whether it is non-judicial sale or judicial sale, you have the power to enforce your rights with the full force of the government behind you. The nub of the problem is a form of “servicer fraud” if we expand “servicer” to mean all the intermediaries in the securitization chain. None of them invested in your loan, none of them are at risk, none of them will suffer a loss and yet all of them are scrambling to take title to your home. And they do this using laws and procedures that allow it — IF you don’t do anything to defend yourself.

But your goal should not, as in war, be to destroy the enemy. Your goal should not be to hurt someone else. Your goal is to keep your home and get a fair accounting and adjustment reflecting the fact that your loan was sold to you under false pretenses and the actual lender (the investor in mortgage backed securities) has probably received payment in whole or in part. Procedurally your goal is to get them outside of the smoke and mirrors they are using with intent to take what is yours. So you demand proof of ownership of the loan, demand proof of what money has been received and what has been spent by ALL parties in the securitization chain. The truth either comes out or the other side caves (the most common result).

If the collateral damage from you simply pursuing your unalienable rights under the U.S. Constitution and your state constitution is that pretender lenders are denied the unearned secret profit they were promised, that is not something for you to lose sleep over. And if it gives you pleasure to know that you did it, that is fine. But if you make it your goal to injure the other side you are conceding in your mind that they can be injured — which will come out implicitly or explicitly as an admission against your interest that the pretender lender has something to lose in your legal proceedings. That admission gives them standing to pursue the claims on the note and mortgage. So keep your cool and celebrate later. If you want to pursue revenge, punishment, do it after you have secured your home and family from this completely fraudulent attack on the basic American value of home ownership, fair play and decent business practices.

8 Responses

1. 

   sue, on August 4th, 2009 at 1:45 pm Said:

   It’s war before vindication, in my case. Unscrupulous debt collectors work for this bank, using intimidation tactics that really don’t work at all., traceable too.
   But still don’t work
2. 

   smallz, on August 3rd, 2009 at 10:49 am Said:

   Great article.

   Thanks to Livinglies for posting this info which has been and IS helpfult to my family and I.

   The “cool detachment” is fantastic euphemism for the posture of a succesful fighter. In Asian culture, Samuri warriors cannot fight when angry. “Cool detatchment” comes from confidence in the facts. As a hothead myself, this takes practice and pays off well.

   Again, great article
3. 

   James#, on August 2nd, 2009 at 2:42 pm Said:

   I signed the petition!
4. 

   erlinda, on August 2nd, 2009 at 1:05 pm Said:

   i did signed the petition to abolish the federal reserve act of 1913. hopefully, by reading the petition, the citizens of america will realize that we have been betrayed by our own government believing that the federal reserve system is a government entity. our legislative branches of government elected the president of federal reserve and confirming him as the one who would run the federal reserve system when the fact of the matter this entity is owned by private families. it is about time to abolish this federal reserve system that put us ” we the people” into what we are in now. i wonder when i watched 60 minutes two months ago, bernaski admitted printing out of money without congress approval. meaning that the federal reserve system has all the power over the government. wake up america.
5. 

   angry&not taking it, on August 2nd, 2009 at 11:54 am Said:

   OH rose.. your thorns are showing….& I liiiiiiike IT
   i could not agree more.
   so i found a good place to start ..
   sign here
   Abolish The Federal Reserve Act of 1913

   http://www.PetitionOnline.com/fedres/petition.html
6. 

   maineloanmodifications, on August 2nd, 2009 at 9:48 am Said:

   Neil,

   Are you basically saying, if you have a counterclaim of fraud on a servicer, then dont pursue it untill after the case is dismissed at trial or hearing? I thought a counterclaim had to be introduced in the same case where the act of injury occured?
7. 

   Rose, on August 1st, 2009 at 2:38 pm Said:

   Actually, it IS war.

   Wars are not personal.

   War is, however, all about goals, strategy, and determination. ALL elements needed for every homeowner who is defending their property.

   Just remember not to make it personal. After all, the “pretender lenders” and their minions aren’t taking this PERSONAL, ’cause to them…. you’re just a revenue stream. They don’t care about you, your family or your home.

   So, yes, it IS war… one you should engage in with the cold- hearted, clear eyed and deliberate actions of a well trained solider.

   Do what well trained soldiers do… study the rules of engagement, adhere to them, make sure the enemy can’t flank you and then when the time is right – STRIKE.
8. 

   Dan Edstrom, on August 1st, 2009 at 10:55 am Said:

   Thank you There is so much clatter out there this really helps me refocus on what the real goal is!

   Thank you, thank you, thank you!
   Dan Edstrom
   dmedstrom@hotmail.com

Big Texas bank on verge of failure

Big Texas bank on verge of failure

Guaranty Bank, which counts Carl Icahn as one if its backers, is teetering on the edge of insolvency. But it may not be easy for regulators to find a buyer.

By Colin Barr, senior writer

Last Updated: July 31, 2009: 1:53 PM ET

NEW YORK (Fortune) -- Guaranty Bank is hardly a household name. But the Austin, Texas-based thrift's looming failure is shaping up as a big headache for bank supervisors -- not to mention a black eye for Carl Icahn and others in the smart money set.

Guaranty (GFG) could be soon seized by the government in what would be the biggest bank failure in a year that has already had 64 of them. Last week, the bank warned investors to expect a federal takeover after regulators forced a writedown of its risky mortgage investments and a bid to raise new capital failed.

Guaranty has $13.4 billion in assets and operates 160 branches in Texas and California -- two of the three best banking markets in the nation, thanks to their size and population growth.

But the bank's capital problems and its smallish, scattered network of branches could detract from Guaranty's appeal, making it tough for regulators to find a buyer quickly -- or without substantial federal subsidies.

"This may not be closed as quickly as you think, since it will require bids and rebids," said Miami banking consultant Ken Thomas.

That means resolving Guaranty's failure is likely to be costly to the FDIC's deposit insurance fund, whose balance is at its lowest point in almost two decades.

The Federal Deposit Insurance Corp. isn't the only one taking its lumps. So have some big investors.

Shares of the bank's parent, Guaranty Financial, have dropped 97% since a group led by billionaire Texas hotel mogul Robert Rowling and Icahn, the renowned New York corporate raider, poured $600 million into the company in June 2008.

Other big Guaranty holders whose stakes stand to be wiped out include hedge fund managers David Einhorn, who was among the most persistent skeptics of Lehman Brothers before its collapse, and Dan Loeb.

"Relatively low franchise value and the fact that two big money investors already got burned on this bank may suggest less interest than with BankUnited," said Thomas, referring to the Florida thrift that failed in May and was bought by a group of private equity investors.

BankUnited had half as many branches and operated in only one state, but had a strong competitive position in the most lucrative counties -- something Guaranty lacks.

Despite BankUnited's relative attractiveness, its sale to investors led by vulture investor Wilbur Ross was hardly a walkover for the FDIC. The deal cost the FDIC insurance fund $4.9 billion.

A big tab on Guaranty would be costly to the deposit fund, whose balance was $13 billion at the end of the first quarter. The FDIC has estimated failure costs on cases since then at $11.2 billion.

A spokesman for the FDIC stresses that it has already set aside an additional $22 billion for failure-related costs in 2009, and adds that congressional action this spring gave the agency access to $500 billion in Treasury credit.

Though Guaranty has been around since 1988, it came public less than two years ago. Guaranty was part of the Temple-Inland (TIN) cardboard-box conglomerate until Icahn pressured the company to split up at the end of 2007. Guaranty shares were then distributed to Temple-Inland holders.

Guaranty's chief executive at the time, Ken Dubuque, assured investors that despite the gale force winds sweeping the financial world, the bank would be safe.

"We're keenly aware of the importance of good credit, disciplines and effective risk management, in good times and in difficult times," he said on the bank's first earnings conference call in February 2008.

But Guaranty's risk management soon was found wanting. The bank aimed to expand beyond lending to the builders of office buildings, shopping centers and houses to new areas such as small business and corporate energy lending.

Because its thrift charter obliges Guaranty to keep 70% of its assets in housing-related investments, the bank matched growth in other areas with expanded investments in housing. That, Dubuque said, is how the bank ended up taking on a giant portfolio of mortgage-backed securities, backed largely by option adjustable-rate mortgages in California and Texas.

0:00 /1:58FDIC wants cushion

"We needed to increase the size of the balance sheet, so that was a relatively risk-free way of doing it," Dubuque told investors in 2008. "We also have liked the returns in that business as well."

But securities backed by option ARMs are anything but risk-free, as investors have learned. Among institutions that dealt most heavily in those were Washington Mutual, the Seattle thrift that collapsed in September with $307 billion in assets, and Wachovia, which was sold to Wells Fargo (WFC, Fortune 500) later in 2008. Other big option ARM users included failed California savings banks Downey Financial and PFF.

Losses built at Guaranty over the past year, and Dubuque quit without explanation in November. In April regulators told Guaranty to raise more capital. When that effort failed, they told Guaranty to write down the value of the mortgage-backed securities by more than $1 billion. That move, announced this month, left the bank with negative capital of $748 million, according to filings.

Despite its many problems, Guaranty is -- for now -- operating as usual.

"We are open for business. We continue to work with our regulators," Guaranty said Friday in an emailed statement. "We are focused on providing the best customer service possible and believe we can avoid any disruptions to our customers."