Time to Write to Obama, Senators and Congressman

Many Thanks to Ron Ryan, Esq. representing the Tucson Bankruptcy Bar for the submission below:

Editor’s Note: Obama wasn’t kidding when he he said the thing that humbled or frustrated him the most was how slow Washington is to “get on board.” Dick Durbin had the class and guts to say it outright. The banks own the city — and we the taxpayers gave them the money. WHERE IS YOUR OUTRAGE AND WHY ARE YOU NOT EXPRESSING IT?

The Troubled Asset Relief Program money went to bank holding companies that were (a) not holding any troubled assets and (b) not lenders.  While we can and should cut Obama some slack because this was Bush-Paulson policy, to quote his own words back to him “We Can’t Wait!” The vote on amending the bankruptcy showed just how much of a strangleghold the banks have on Washington. The oligopoly that controls our government is driving us into another ditch, this time worse than the one we just visited at the end of the Bush term.

The code was amended by Republican majority with the aid of Democrats to basically say that you can reduce the principal on,loans on 2nd, third, fourth, fifth and sixth residences but not on your first and only residence.  So the wealthy, the speculators and other people who essentially DON’T need the relief have it while 20 million homeowners are eating crow. This crisis was spawned and promoted by appraisal fraud at both ends of the spectrum — lying to the borrower about the value of the house and lying to the investor about the value of his investment. We are helping the liars.The recipients of taxpayer lenders are neither lenders nor holders of toxic assets.

Federal Policy and Federal Money should be first aimed at stabilizing the free fall of people who have lost all their wealth in the middle and lower “classes” and second at making some sort of restitution to the investors who lost all their money. (MBS securities are said to be trading thinly at 3 cents on the dollar). Current policy and programs continue the MYTH that the intermediaries who are foreclosing, collecting, or modifying loans have any legal right to do so. They don’t. And if the reality doesn’t sink in, then  the eventual remedy is going to be that 20 million homeowners are going to be sitting in homes that have no mortgage or note and the investors are left eating crow. It is inevitable that the judicial outcome is the elimination of virtually all securitized mortgages and the reversal of virtually all foreclosures of securitized debt.

From Ron Ryan and Tucson BKR Bar:

Log on to the National Association of Consumer Bankruptcy Lawyer to read more and with one click send a letter to your Senators and the President. NACBA has been a major lobbyist in favor of this amendment for over two years. When you write Obama, you might want to add a little bit about how he needs to use his muscle and insist on the Senators passing measures he is in favor of. It doesn’t seem that he has done much arm twisting, and it will be necessary if he wants to get anything done. http://www.nacba.com/. Also, here is the mailing address and fax number for the President:

President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
via fax 202-456-2461

11 Responses

  1. MARIO KENNEY: Can you send me an email with this info? dnd1190@gmail.com

    The moral of the story: TILA Rescission is the most powerful remedy to foreclosure if/when the borrower has this remedy afforded to them. The key is to obtain a loan audit by a real expert. Call/email me if this is something you want to do.

    This applies to my situation here.



  2. Giethner is going to try to get granted “new tools” so he can wipe out existing consumer protection, constitutional rights, take our money homes & enslave us all! man I wish Thomas Jefferson were here to Lead the Revolution that needs to take place, even he saw this coming, so it’s hard to believe Greenspan did not

  3. Time cannot be wasted it simply does not exist.

  4. Great Post Kenny, however if we consider the fact that in most of these toxic mortgages, the lenders, investors and brokers never disclosed their over rides, additional fees and commissions earned at the time of closing and that since that information is not received until an attorney compels these parties in discovery to provide this information, these settlement in fact have not ended yet, they have not been consummated.

    The material disclosures required under the truth in lending act are defective and incomplete, in fact they were manipulated and based in fraud. We have a case in Virginia in which the lender at the time they prepared the TILA disclosure manipulated the itemization of the amount financed to make the loan “compliant “. This is fraud and if you add the other fees and commissions that were not disclosed in most refinanced loans would make them HOEPA disclosure non-compliant. The penalties for lender, servicers and investors involved in these transactions are severe and may include the total derogation of the loan amount.

    That is why loan modification schemes are not the way to get these loan into compliance and to give the borrowers proper justice. TILA audits are only a snapshot in time, but they are only a partial print of a major crime scene investigation that should be completed and complemented through the discovery process.

    The lenders, servicers, foreclosure attorneys fold very quickly when they have to come to court and present witnesses and records they do not have. To reconstruct transactions they were never a party of from the beginning.

    TILA case law if full of flawed legal representation for the consumers and poor interpretation by the courts. The new information being brought forth by people like yourself, Mr. Garfield and Mr. Kaiser and all the other people that freely contribute to this and other blogs is truly invaluable.

    The money purchase deals are another story but I will write about those tomorrow. The borrowers can win as long as their lawyers understand that the other party has only few options and one of those options is to lie, cheat and forge signatures and paper work.

    Some lawyers believe that loan modifications are cost effective when compared to litigation. I beg to differ. If you sue and compel proper discovery, require your client to audit his loan and push them forward you will win and most likely big.

    Victory is in the eye of the beholder. But as Mr. Garfield so eloquently said in his Santa Monica, California seminar indicated. Win at the beginning or lose at the end. He has put this very complicated ponzi scheme in a very easy to understand seminar for everyone to learn and to advance in the war for America. Do not be misled and do not despair. No one is saying this will be easy. But no one told the pilgrims that their New World experiment was going to be free of peril and struggle. Fight on.

    See you in Orlando, MAY 18th, 2009, require for your lawyer to be there.

  5. TILA Rescission Case – Bankruptcy Judge Finds in Favor of Borrower
    May 5, 2009 · No Comments

    The Little Guy (David) vs. the Big Guy (Goliath). These classic battles are being waged in the “War on the Home Front” every single day. The subject of this post is a case that goes to the win column for the Little Guy. We are fighting for our freedom, our country, democracy… we are fighting against corporate and political corruption. I hope you are fighting too. This is a war for our rights and our homes and our American way of life. It’s all under siege folks. Don’t be fooled into complacency.

    This is one of the most powerful cases I have read in a long time. CLICK HERE to read the actual case order from the Judge in the Adversary Proceeding. The borrower in this case rescinded the loan transaction because an audit of their closing documents revealed a “material disclosure” violation as is defined in 15 U.S.C. §§ 1601 et seq. (“TILA”) and its implementing regulations at 12 C.F.R. § 226 et seq. (“Reg. Z”).

    Once the Consumer rescinds, the security interest arising by operation of law becomes void automatically. The promissory note is also voided since it is part of the same “transaction.”

    The borrower in this case had foreclosure filed against them. After retaining an attorney for the foreclosure, the attorney advised them to have an audit of their loan closing file which revealed a material disclosure violation. It is important to note that a loan can ONLY be rescinded when:

    1. The loan is a refinance transaction;
    2. Funded in the last three years
    3. On the borrower’s primary residence;
    4. When a “material disclosure violation” is found

    The term “material disclosure violation” is a very important component. Many people (including self-proclaimed experts in loan auditing) think that “any” violation of the Truth in Lending Act gives someone the right to rescind. That is patently wrong. The four conditions above must be true in order for the borrower to have the possible “extended right to rescind” the loan transaction. There are only 4 potential “material disclosure violations.”

    The borrower in this case was given an insufficient amount of the Notice of Right to Cancel. A borrower should receive two (2) copies of the Notice.

    If a married couple is identifiable on a Universal Residential Application, then each consumer is entitled to rescind and must be given a copy of the TILA Disclosure Statement with all material information accurately and correctly disclosed, 15 U.S.C. § 1602(u); Reg. Z § 226.23(a)(3) n.48, and two (2) copies each of the rescission notice, 15 U.S.C. § 1635(a); Reg. Z § 226.23(b), irrespective of whether both are obligated on the note (or either, for that matter).

    In this case, the borrowers were married and received only 2 copies total. Material disclosure violation. Thus they rescinded. The lender Option One obviously contested the matter.

    Once the Consumer rescinds, the security interest arising by operation of law becomes void automatically. The promissory note is also voided since it is part of the same “transaction,” see i.e., 15 U.S.C. § 1635(b) and Reg. Z § 226.23(d)(1).]

    This is powerful folks. This is a complete remedy to foreclosure. The mortgage is the security interest and it is the mortgage (and the mortgage only) that gives the lender the right to foreclose. In a rescission, the lender must void the mortgage within 20 days. If it does not, it is another violation of TILA.

    After rescinding the loan the borrowers also filed a Chapter 13 bankruptcy. The lender refused to rescind the loan. The borrowers filed an Adversary Proceeding in the Bankruptcy Court. Bottom line: The judge heard all arguments from both Plaintiff (borrower) and the Defendant (Option One). The judge found in favor of the borrower/plaintiff and determined that they had the right to rescind. Victory number one.

    But a BIG ruling in this case was that since they had rescinded the loan, the loan became an “unsecured” debt since the mortgage was automatically voided as per TILA. Since the debt became “unsecured” it was able to be discharged through bankruptcy like any other type of unsecured debt such as a credit card debt.

    The moral of the story: TILA Rescission is the most powerful remedy to foreclosure if/when the borrower has this remedy afforded to them. The key is to obtain a loan audit by a real expert. Call/email me if this is something you want to do. I encourage you to read the Adversary Proceeding Case. It is highly enlightening.
    Court Cases, Truth in Lending
    Loan Rescission and TILA Violations
    Posted by admin On January – 10 – 2009

    I recently started a blog post about TILA Violations and what these violations can mean for the financial institutions. This is a BIG can of worms for them because a large percentage of home loans were funded in violation of the federal TILA statute and its implementing regulations found in Regulation Z.

    In short, if a TILA violation is found within 3 years of closing on a refinance transaction of the borrower’s primary residence, the debtor/borrower can “rescind the loan.” By serving notice to the lender of the debtor’s action to rescind the loan, the lender has “20 days to return all finance charges, downpayment monies, etc.” to the borrower and must also “remove all security interests on the property” in 20 days.

    If the lender fails to do so, it is in violation of TILA requirements, mainly 15 USC §1635 and, according to paragraph “b” of this section, there are some huge implications for both debtor and creditor if the creditor does not comply with these requirements.

    Here’s a sample case that you can read as evidence of how powerful this remedy can be: Belini v. WAMU


    Categories: TILA Rescission Case – Bankruptcy Judge Finds in Favor of Borrower
    Tagged: TILA Rescission Case – Bankruptcy Judge Finds in Favor of Borrower

  6. I agree that one person is powerless but endless emails and phones do wake up our “so call leaders” , to do nothing but complain is just as bad. If you are not pro active to help yourself then who is going to care ! When you speak up people do listen , time for every who cares to start writing & calling your Senators & President now.

  7. I have a question, and for lack of a better place to put it, will go ahead and ask it here:

    Does the recent transition of IndyMac held/serviced loans to OneWest change anything in defending against the foreclosure actions?

    I remember some FTC opinion about FCRA or FDCPA law that stated that there were differences between how a servicer is treated that had the loan prior to default, and one that acquired the loan after default.

  8. I sent my email already, let us keep the pressure.
    I is amazing these guys are going to pay the servicers for loan modifications they have no legal authority to perform.

    This USA is definitely up side down.

    Let us pressure our local legislators as well.

    Lawyers that believe that these lenders will negotiate are totally wrong, that is why loan modifications are a total fallacy. If you take these lenders or pretend lenders to court, they usually fold in the discovery area, they have no witnesses, they have no paper track, all they have is fraud, fraud and more fraud in the hands. That is why they they are desperate foreclosing as quickly as they can.

    The more cases they see in court the more they will be willing to negotiate. I will fight until the bitter end.

    We need to vitiate those alleged promissory notes
    we need to place lis pendis, on all these homes and titles, we need to cloud the hell out of those title transfers and make it impossible to have the title insurance agents make those transfers insurable.

    If they wont stop the foreclosures then they should spend money like crazy in court trying to clear up those titles.

  9. Who are you going to write to, the ones that put us in this mess or the ones that avoided paying taxes?

  10. It would not be a wast of time if everyone with a mortgage in trouble were to write Obama and the senators.

  11. waste of time……………..

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