3 Million Foreclosures Forecast THIS YEAR

Editor’s Note: Reality has a nasty way of getting in the way of solutions, especially when the solutions are theoretical, and even worse when the theories are wrong. These are the wrong assumptions:

  1. The Worst is over. In fact, we have the probability of at least 7 million MORE homes that will be foreclosed, causing massive dislocation from available housing to unavailable housing. The additional pressure on housing prices will be relentless.
  2. Modifications by Servicers: You might as well ask the robber of a convenience store to negotiate the restitution. The intermediaries have nothing to gain and everything to lose by modifications.
  3. The Financial Crisis is Over: In fact, we have a whole new wave of bad news coming. Finance is trust. There is no trust without truth. The truth is that the paper, the houses and the policies are all based upon false values and the marketplace knows it. Owning up to the truth will be painful for some and windfall for others — but it is the only path of restoring confidence in our institutions. With confidence we can again build trust. With trust, our financial system can recover. There is no current scenario in play that is likely to restore trust. Hence, there is no reason to believe that our crisis is over or that it won’t get worse.
  4. The current recovery model is working: Take a look next door at Canada. No crisis, no crash, no currency devaluation, no problem. Why? Because their policies are focused on protection of the consumer instead of advancement of big business. Their banks are all too big to fail (see Krugman today in New York times) but they didn’t fail because they operated in an environment that mandated acting in a “boring” manner. It is obvious that 80% of American citizens understand all this, why don’t our leaders?
  5. Millions, perhaps tens of millions of homeowners owe more than their houses are worth: In fact, those obligations have been dispersed into cyberspace and a  fair reckoning must (a) face the reality of real fair market values and (b) spreading the losses out amongst all the players. Instead our policies are aimed at preserving the appearance of transfer of wealth to a select few on Wall Street — parties who don’t own, never owned and never will own the “troubled assets” for which they received “bailout” money. The money that was taken out of the securitization chain without the knowledge or consent of the investors and the homeowners is a third party payment of the original obligation. The truth is that if normal legal and accounting principles are followed, those people have substantial equity in their homes but they are being convinced everyday that they don’t.
  6. The Crisis was Caused by Bad Decisions: In fact, the crisis was caused by deliberate decisions that worked perfectly for those who made them. The plan was to create loans that were too bad to succeed. The plan worked and the money flowed to Wall Street which in turn admits to having the best year ever, and which is hiding the rest of its profits with perfect confidence that they can report higher and higher earnings for years to come as they repatriate dollars they secreted off shore in unreported financial transactions.
  7. What is Good for Wall Street is Good for the Country: In fact, this is no more true than when it was said about General Motors. A strong financial center is important — but not a financial center that becomes 40% of our economy. This is nothing more than a parlor trick of moving paper back and forth between the players and claiming a profit. The truth, as ANY economist will tell you is that what is good for the middle class is good for the country. Any other policy leads to social chaos and financial ruin.
  8. Eventually, this will all even out and everything will go back to normal: Sorry. In fact as long as the government is regulated by big business instead of the other way around, no correction is possible and the country continues down the path to ruin. Picture a basketball game where the players were able to tell the referees how they may rule and what they should look at. No, this cannot fix itself without the people breaking the power grip of big banks and big business. There is currently no scenario in play that points in this direction. So it is wrong to think that it will all work out in the end as things now stand.
  9. The Crisis Caused a Deficit in Government Finance: Actually, no, it didn’t. Just as the homeowners actually have equity in their homes, the government is owed more in taxes, fees, fines and penalties than all the deficits —Federal and State — put together. But they won’t collect those taxes from their bosses — Wall Street big business.

Jan. 29 (Bloomberg) — President Barack Obama’s efforts to bolster the U.S. housing market, the trigger of the worst recession since the 1930s, may be undone by record unemployment and repossessions by lenders.

Foreclosures probably will reach 3 million this year, surpassing the record of 2.82 million in 2009, according to Irvine, California-based RealtyTrac Inc. That would more than offset an estimated 448,000-unit rise in home sales, based on the average forecast of the National Association of Realtors, the Mortgage Bankers Association and Fannie Mae.

The housing industry remains a challenge for Obama as he enters his second year of office and government assistance programs near expiration. Data this week showed home sales tumbled after the expected end of an $8,000 tax credit for first-time buyers boosted transactions the prior month.

“The housing market is still on life support, and if government measures are withdrawn too quickly it could sink it, taking the economy down with it,” said Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania. “Households have such high debt loads, in addition to their mortgages, that any reduction in income, including a job loss, could trigger a foreclosure.”

Employers have cut more than 7 million jobs in the last two years, the biggest employment loss since the Great Depression. The U.S. jobless rate probably will average 10 percent in 2010, according to the median estimate of 59 economists surveyed by Bloomberg. That would be the highest yearly rate in government records dating to 1948. Unemployment was 9.3 percent in 2009, the most in 26 years.

Mortgage Modifications

The Obama administration’s primary anti-foreclosure plan, the Home Affordable Modification Program, or HAMP, resulted in 66,465 permanent modifications by the end of December, compared with goal of up to 4 million by 2012. In total, 1.16 million offers were extended to borrowers and the terms of about 900,000 mortgages were changed on either a trial or permanent basis, the Treasury Department said in a Jan. 15 report.

“We’re working to lift the value of a family’s single largest investment — their home,” Obama said in his Jan. 27 State of the Union speech to Congress.

For HAMP to succeed, the program will have to be changed to include principal reductions on mortgages to offset value declines, according to Karen Weaver, global head of securitization research at Deutsche Bank AG in New York, and Laurie Goodman, the New York-based senior managing director at Amherst Securities Group.

Principal Reductions

In its current version, HAMP lowers mortgage payments to about a third of borrowers’ income by reducing interest, lengthening repayment terms and deferring principal repayments.

“If the other measures in HAMP aren’t working, the government will have to look at principal reductions,” said Brian Bethune, chief financial economist at IHS Global Insight in Lexington, Massachusetts.

In addition to modifications, the government’s Making Home Affordable program was responsible for refinancing 3.8 million loans in the portfolios of government-run Fannie Mae and Freddie Mac. The program, known among mortgage brokers as Obama refis, allows borrows who have balances higher than their home’s value to renew their loans at lower rates.

One in Four

One in four U.S. homeowners holds a mortgage with a balance higher than the property’s value. The number of borrowers with so-called negative equity reached 10.7 million, or 23 percent, at the end of the third quarter, according to a Nov. 24 report by First American CoreLogic, a Santa Ana, California-based real estate research firm. Government programs to help underwater borrowers exclude jumbo mortgages that aren’t eligible to be purchased by Washington-based Fannie Mae and Freddie Mac of McLean, Virginia.

The government spent $230 billion to support HAMP and other housing programs in the 12 months ended Sept. 30, according to the Congressional Budget Office in Washington. The Federal Reserve has pledged to spend $1.25 trillion buying mortgage- backed securities in an effort to reduce fixed-mortgage rates. That program is set to end this quarter.

The 30-year mortgage rate dropped to an all-time low of 4.71 percent during the first week of December, according to Freddie Mac. It was at 4.98 percent in the week ended yesterday.

The Federal Reserve said Jan. 27 it will keep the target rate for overnight bank lending near zero to help nurture the recovery.

“Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit,” the Federal Open Market Committee said this week in a statement.

Dropped Reference

The statement dropped the previous reference to real estate that said housing “has shown some signs of improvement.”

National home prices rose 1.5 percent last month from a year earlier, the first annual gain since August 2007, the Chicago-based National Association of Realtors said Jan. 25. The median price fell 12 percent in 2009 to $173,500, compared with a 9.5 percent drop in 2008, NAR data show.

While the tax credit spurred a 4.9 percent rise in home resales last year, the first annual gain since 2005, sales of existing homes in December slumped 17 percent, the biggest drop on record. The tax benefit originally scheduled to expire Nov. 30 was extended into 2010 and expanded to all buyers by a bill Obama signed on Nov. 6. The extension gives buyers until April 30 to have a signed contract on a home, and until July 1 to close on it.

New-Home Sales

Purchases of new homes fell 7.6 percent to an annual pace of 342,000 in December, the fourth drop in the past five months, the Commerce Department said Jan. 27 in Washington. Sales declined 23 percent to 374,000 in 2009, the lowest level since records began in 1963.

The median price of a new house fell 3.6 percent from the year-earlier month to $221,300, the agency said.

Currently, 6.5 million households are either in default or at least one payment behind on their mortgages, according to the Center for Responsible Lending based in Durham, North Carolina.

If enough of those are seized by lenders, it could lead to a “double-dip recession or at least to a slower recovery,” said Julia Gordon, senior public policy counsel for the research and policy group, in testimony before the House of Representatives Committee on Financial Services last month.

“Housing is going to have a bumpy ride this year because of foreclosures,” said Bethune, of IHS Global Insight.

To contact the reporter on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net.

Last Updated: January 29, 2010 00:00 EST

13 Responses

  1. Florida Investigate-and-Verify Rule Adopted


    Justices adopt Fla. foreclosure mediation rules

    TALLAHASSEE, Fla. — Lenders will be required to pick up the tab for investigating and verifying ownership and then try mediation before foreclosing Florida home mortgages under new rules approved Thursday by the Florida Supreme Court.
    The rules are designed to help Florida’s judicial system better cope with a flood of foreclosures. They follow a December administrative order by Chief Justice Peggy telling local judges to adopt a uniform mediation program.
    Florida has the nation’s fourth-highest foreclosure rate. Almost 400,000 cases were filed in Florida’s courts last year.
    The rules and corresponding legal forms were proposed by a pair of Florida Bar panels.
    “They found that many cases were being filed by plaintiffs that didn’t’ own the mortgages any more,” said Miami lawyer Mark Romance, who chairs the Civil Procedures Rules Committee.
    Romance said other cases were being filed against people who no longer owned the homes.
    “I don’t think there was any ill will or intent to harm someone,” Romance said.
    The investigate-and-verify rule should help prevent those kinds of errors and give judges greater authority to sanction lenders who do make false allegations, the justices wrote.
    “It’s just going to be another hoop to jump through,” said Anthony DiMarco, executive vice president for public Affairs for the Florida Bankers Association, which opposed that provision. “It’s making us find a document we’re already supposed to find.”
    The decision was unanimous except for a rule that will require prior approval of a judge before a foreclosure sale can be canceled. Justices Charles Canady and Ricky Polston dissented.
    Last-minute cancelations have needlessly delayed other sales, again clogging the system, Romance said.
    The Bankers Association did not object to that provision, but DiMarco said borrowers and lenders often cannot reach a settlement until just before the sale date.
    “It’s the last chance and people get more serious at the last chance,” he said.

    “JOHN DOE #1” through “JOHN DOE #10” the
    last ten names being fictitious and unknown to the
    plaintiff, the person or parties, if any, having or
    claiming an interest in or a lien upon the Mortgage
    premises described in the Complaint,
    INDEX NO. 09-797
    RJI NO. 19-09-4360
    Supreme Court Greene County All Purpose Term, January 25,2010
    Assigned to Justice Joseph C. Teresi
    Frenkel, Lambert, Weiss, Weissman & Gordon, LLP
    Nicole E. Schiavo, Esq.
    Attorneys for Plaintiff
    20 West Main Street
    Bay Shore, New York 11706
    Greg Lubow, Esq.
    Attorney for Defendant Robert Kallman
    6026 Main Street
    P.O. Box 839
    Tannersville, New York 12485
    TERESI, J.:
    IndyMac Federal Bank, FSB (hereinafter “Plaintiff’) commenced this action to foreclose
    the mortgage it holds on property owned by defendant Robert Kallman (hereinafter
    “Defendant”), located in Greene County, New York. Issue was joined by the Defendant and
    [* 1]
    Plaintiff now moves for summary judgment, for the appointment of a referee and to amend the
    caption of the action. Because plaintiff failed to establish its entitlement to judgment as a matter
    of law, its motions for summary judgment and for the appointment of a referee are denied.
    Additionally, because plaintiff did not set forth sufficient evidence to amend the caption of the
    action for all of the amendments sought, that portion of its motion is denied in part.
    Where a mortgagee moves for summary judgment in a foreclosure action “[e]ntitlement
    to a judgment of foreclosure may be established, as a matter of law, where a mortgagee produces
    both the mortgage and unpaid note, together with evidence of the mortgagor’s default, thereby
    shifting the burden to the mortgagor to demonstrate, through both competent and admissible
    evidence, any defense which could raise a question of fact.” (HSBC Bank USA v. Merrill, 37
    AD3d 899 [3d Dept. 2007]).
    On this record, plaintiff failed to meet its initial burden. Plaintiff supports its motion by
    attaching a copy of the Mortgage, with its riders. However, it failed to submit a copy ofthe note
    with its initial moving papers. Such failure of proof requires denial of Plaintiff’s summary
    judgment motion. The note was “submitted for the first time in [Plaintiff’s] reply papers, and
    therefore cannot be considered in determining whether or not Plaintiff demonstrated its prima
    facie entitlement to judgment as a matter of law” (Morales v. Coram Materials Corp., 51 AD3d
    86,95 [2d Dept. 2008], see also Crawmer v. Mills, 239 AD2d 844-845 [3d Dept.1997]; see also
    Roanoke Sand & Gravel Corp. v. Town of Brookhaven, 24 AD3d 783 [2d Dept.2005], Albany
    County Dept. of Social Services v. Rossi, 62 AD3d 1049 [3d Dept. 2009], Supreme Co2 North
    Street Corp. v. Getty Saugerties Corp., 68 AD3d 1392 [3d Dept. 2009]).
    Accordingly, plaintiff’s motion for summary judgment is denied.
    [* 2]
    Plaintiff s motion for the appointment of a referee is likewise denied. RPAPL §1321
    provides that “if the defendant fails to answer within the time allowed or the right of the plaintiff
    is admitted by the answer, upon motion of the plaintiff, the court shall ascertain and determine
    the amount due, or direct a referee to compute the amount due to the plaintiff.” Here, Defendant
    timely answered the complaint and denied its allegations relative to Plaintiffs right to foreclose
    this mortgage. Moreover, as set forth above, Plaintiff has not demonstrated its entitlement to
    summary judgment and an order striking the answer. As such, Plaintiff failed to demonstrate its
    entitlement to the appointment of a referee to compute, pursuant to RPAPL §1321, and this
    portion of its motion is also denied.
    Plaintiff also moves to amend the caption of the action by 1) deleting Plaintiff and
    substituting One West Bank, FSB (hereinafter “One West”) in its place, 2) deleting “John Doe
    #2” through “John Doe #10”, and 3) substituting Kallman Realty, Inc. in place of “John Doe #1”.
    A motion to “amend pleadings is generally freely given.” (Gersten-Hillman Agency, Inc. v.
    Heyman, 68 AD3d 1284 [3 Dept. 2009]). However, the proponent of a motion to amend “is
    required to make an evidentiary showing sufficient to support the proposed claim.” (D’Orazio v.
    Mainetti, 39 AD3d 981, 982 [3d Dept. 2007], CPLR §3025).
    First, Plaintiff demonstrated its entitlement to delete itself and substitute One West as the
    plaintiff herein. Plaintiff submits the duly executed and filed Assignment of Mortgage,
    transferring the mortgage “together with the indebtedness or obligation described in [the
    mortgage]” to One West. Additionally, a Vice President of One West states, by affidavit, that the
    note and mortgage have been assigned to it. In light of the fact that amendments are freely given,
    the foregoing constitutes a sufficient evidentiary showing to support this amendment. While
    [* 3]
    Defendant’s opposition papers correctly note ambiguities in Plaintiff s moving papers, he did not
    rebut Plaintiffs showing nor demonstrate prejudice. (Pritzakis v. Sbarra, 201 AD2d 797 [3d
    Dept. 1994]). Accordingly, IndyMac Federal Bank, FSB is deleted from the caption of the action
    and One West Bank, FSB is substituted in its place.
    Likewise, Plaintiff demonstrated its entitlement to delete “John Doe #2” through “John
    Doe #10”. Plaintiff’s attorney’s affirmation establishes that such proposed defendants were not
    served with the summons and complaint, and are not necessary parties to the action. Defendant
    does not oppose this portion of the motion, nor is he prejudiced. Accordingly, “John Doe #2”
    through “John Doe #10” are deleted from the caption of the action.
    Plaintiff failed to demonstrate, however, its entitlement to substitute Kallman Realty, Inc.
    for “John Doe # 1” in the caption of the action. Plaintiff submits no affidavit, affirmation or
    documentary evidence to support this portion of its motion. As Plaintiff made no evidentiary
    showing supporting this portion of its motion, it is denied.
    This Decision and Order is being returned to the attorney for the Defendant. A copy of
    this Decision and Order and all other original papers submitted on this motion are being
    delivered to the Greene County Clerk for filing. The signing of this Decision and Order shall
    not constitute entry or filing under CPLR §2220. Counsel is not relieved from the applicable
    provision of that section respecting filing, entry and notice of entry.
    So Ordered.
    Dated: February / ,2010
    Albany, New York
    [* 4]
    1. Notice of Motion, dated December 21,2009, Attorney Affirmation of Nicole Schiavo,
    dated December 21,2009, Affidavit of Erica Johnson-Seck, dated December 11,2009,
    with attached Exhibits A-H.
    2. Affirmation in Opposition of Greg Lubow, dated January 14,2010.
    3. Reply of Nicole Schiavo, dated January 22, 2010, with attached Exhibit A.

  3. Hitler and Stalin would be proud

  4. The whole damn system is broken.

  5. ny,
    Let us say that there are ALMOST no lawyers in this world with balls, recognizing that Neil is a lawyer and has balls enough to have made this site the premier foreclosure defense tool on the Internet.

    Having said that, it certainly is true that lesser attorneys do not seem to have the will to fight. They don’t want to rankle the system that keeps them in BMWs and country clubs. My attorney did get me a TRO that stopped the foreclosure sale, but the whole time kept saying that what I needed was a modification. And no matter how many examples of fraud and malfeasance regarding my loan I showed him, he just couldn’t get past the idea that what we really wanted and needed was a modification.

    It was as if we were in a murder case and I showed him proof of how the gun was used to commit the murder and how the murderer pulled it off and who the murderer was, but he thought that the best we could hope for in court was an apology from the murderer. Having had this experience, I am amazed that ANY case ever gets to trial considering that in order to take a case and believe in it, these lawyers seem to basically want signed confessions of wrongdoing from all the parties involved in order to be sure that the case will be decided in their favor.

  6. “Repurchases” – glad someone has brought that up. This goes back to “scratch and dent” argument. No one even knows if their loan was a repurchase – and never sold to any stated trust, therefore, it was a “scratch and dent” – as known in the industry – and sold to debt buyers. Thus, not only did loans sometimes never make it into earmarked trusts, but also default loans are removed from designated trusts. Right, only “cash flows” from mortgage payments were securitized. “Scratch and Dent” tried to securitize – but they could not be because could never be rated high enough for a “pass through” security according to SEC regulations.

  7. With regards to Freddie and Fannie “repurchases” in the WSJ article referenced below:

    First, the GSE’s don’t “own” the loans, the certificate holders of the “trusts” are supposed to own them, though it seems only the income from the notes was pledged.

    Second, “Without Recourse” was/is supposed to mean “without recourse” unless perhaps if there was fraud involved.

    Finally, if a loan was forced to be “repurchased” by an originating “lender,” wouldn’t that be evidence that the loan had faulty underwriting and perhaps be grounds for borrower rescission? Seems a borrower would need to know if this happened for myriad reasons.

    Any thoughts?

  8. Obama is a fraud, the whole damn US government is a fraud … all bought and paid for by the banks and Wall Street. Time to look into moving out of the country before it implodes.


  9. Looks like F&F are doing their own audits for fraud!!!

    Fannie & Freddie get tough on Banks
    WSJ 1/30/2010
    It is payback time for Fannie Mae and Freddie Mac on some mortgages sold to the finance companies by lenders.

    Stuck with about $300 billion in loans to borrowers at least 90 days behind on payments, Fannie and Freddie have unleashed armies of auditors and other employees to sift through mortgage files for proof of underwriting flaws. The two mortgage-finance companies are flexing their muscles to force banks to repurchase loans found to contain improper documentation about a borrower’s income or outright lies.

    The result: Freddie Mac required lenders to buy back $2.7 billion of loans in the first nine months of 2009, a 125% jump from $1.2 billion a year earlier. Fannie Mae won’t disclose its figure, but trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009.

    “Because taxpayers are involved, we’re being very vigilant,” said Maria Brewster, who oversees Fannie’s repurchase team. “No taxpayer should have to pay for a business decision that caused a bad loan to be sold to Fannie Mae.”

    The get-tough stance comes amid pressure on Fannie and Freddie to make the most out of more than $100 billion in taxpayer funds they got to stay afloat. The U.S. government took them over in September 2008.

    The biggest losers are likely to be Bank of America Corp., J.P. Morgan Chase & Co. and other mortgage lenders when the housing bubble burst. Such lenders also are being deluged with loans kicked back to them by holders of mortgage-backed securities who uncover deficiencies with loans bundled into the pools. One common example: a borrower who said the loan was for an owner-occupied home but used it for a second house.

    Overall, banks repurchased about $14.2 billion in loans from holders of mortgage-backed securities in the first nine months of last year, up from $3.6 billion a year earlier, according to Barclays Capital. The figures are based on data reported to regulators by federally insured banks and savings institutions.

    Forced loan buybacks threaten to “wipe out a significant portion of the [loan] origination profits…made in the last year,” said Nicholas Strand, a Barclays analyst.

    Strong-arming lenders to swallow loans that were guaranteed by Fannie Mae and Freddie Mac helps cushion the mortgage-finance companies from defaults, though repurchases represent a sliver of all defaulted loans.

    Fannie reported Thursday that borrowers of 5.29% of the loans it guarantees were at least 90 days behind as of November, up from 2.13% a year earlier. Fannie guarantees $2.9 trillion in loans.

    At Freddie, such delinquencies reached 3.87% at the end of December, up from 1.72% a year earlier.

    While growth in subprime defaults is slowing, defaults on prime loans are accelerating. Such loans account for 90% of all mortgages guaranteed by Fannie and Freddie.

    “Delinquency rates are up, so it’s not surprising” that buyback demands are up, said Brad German, a Freddie Mac spokesman. “Consequently, the number of loan put-backs will reflect that.”

    Keefe, Bruyette & Woods analysts warned this week that repurchases would “contribute to further weakness in mortgage banking profitability in 2010, which is difficult for an industry that will already have to cope with materially lower production volume.”

    The Federal Housing Administration, which has seen its market share rise and its capital reserves decline during the past two years, has indicated it is considering more aggressive steps to force banks to pick up the tab on certain loans that default.

    The FHA doesn’t lend money to home buyers, but insures lenders against default on loans that meet the agency’s criteria.

    To spurn a mortgage, Fannie and Freddie must conduct a forensic analysis to find misrepresentations, as they now are doing for millions of delinquent loans. Employees zero in on loan pools with the steepest losses and highest likelihood of faulty underwriting.

    In response, lenders are being much more careful about new loans. Average credit scores for loans backed by Fannie and Freddie have climbed to about 760 from 720 two years ago.

    “If you’re being hit with a lot of repurchases very suddenly, the easiest thing to do is to tighten your standards rapidly,” said Glenn Boyd, a Barclays analyst.

    As banks improve their quality controls, they might become more flexible with some borrowers.

    Many of the loans bounced back to lenders were made in late 2007 and early 2008, before underwriting standards were toughened by Fannie, Freddie and most banks, said Guy Cecala, publisher of Inside Mortgage Finance.

    In 2003, Fannie Mae and Freddie Mac bought or guaranteed $2.2 trillion of mortgages. Their combined market share fell to about 40% during the peak of the housing boom as Wall Street and other private issuers ramped up business.

    Since the market’s collapse in 2007, Fannie and Freddie’s market share has swelled to about 70%.

    Bank of America repurchased nearly $4.5 billion of loans during the first nine months of 2009, according to data compiled by Barclays. That was triple the $1.5 billion repurchased in all of 2008. Some of the bad mortgages were made by Countrywide Financial Corp., which was acquired by the Charlotte, N.C., bank in 2008. A bank spokeswoman declined to comment.

    At J.P. Morgan, total buyback demands surged to $5.3 billion in 2009 from $4 billion in 2008, according to Barclays. The New York company, which bought the failed banking operations of Washington Mutual Inc. in 2008, reported higher reserves for loan repurchases in the fourth quarter.

    “It’s early on that score,” J.P. Morgan Chief Financial Officer Michael Cavanagh said when asked earlier this month about the outlook for loan buybacks. A bank spokesman declined to comment.

    J.P. Morgan and Bank of America don’t disclose how many loans they repurchased from Fannie and Freddie.

    Write to Nick Timiraos at nick.timiraos@wsj.com

  10. Mike,

    Thank you for acknowledging this so clearly. It’s so true. “Almost every mortgage issued since 2000 involved mortgage fraud.” This is what the government will not address, fix or give remedy to the victims.

    Most of Middle Class cannot afford lawyers and the few that can afford it, experience incompetence.

  11. http://www.irs.gov/individuals/article/0,,id=179414,00.html

    What about the What is the Mortgage Forgiveness Debt Relief Act of 2007?

    The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007

    Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.

    The Mortgage Forgiveness Debt Relief Act allows taxpayers to eliminate up to $2 million of mortgage debt on their principal residence in 2007, 2008 or 2009.

    Mortgage forgiveness is a familiar term in the real estate market. When a lender will accept less than the full amount of the debt, in full payment of a mortgage, the difference between the amount payable and the amount accepted is “forgiven”.


  12. There are no lawyers in this world with balls. They do not share your same interests. They’ve all become paper pushers. All the motions a pro se litigant can make will be the same thing these so called experts will do for you and they will not enforce anything. Mean while they will tell you that “this judge this” and “this judge that”. One told a friend of mine, after 6 months of taking his money and not fighting a Summary Judgment, even though, there were 2 HUD statements, 2 separate assignments, (which were by the way, fabricated by the law firm) that they must have made a mistake… “the bank will do alright”.. Who are these people working for? It’s really sad that the justice system we all thought was great, turned out to be the biggest scam…. Our leaders are NOT leaders but followers…….

  13. Almost every mortgage issued since 2000 involved
    mortgage fraud. It was in the appraisal, the income statement, the yield spread premium, the margin spread, the kickbacks from the correspondent lender to the warehouse lender, TILa and Respa violations
    All an attorney has to do is prove these violations.
    The remedy is a zero interest mortgage for the life of the loan. That would take a bite out of the foreclosure
    mess and be a big boost to the economy if enough lawyers would just do their job and help these people
    instead of trying to squeeze them for all they are worth
    and do nothing.

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