Foreclosure Prevention 1.1

Nobody ever thought that returning a lady’s purse to her after a purse snatcher ran away with it was a gift. So why is anyone contesting returning the purse to homeowners who had their lives snatched from them?

The baby steps of the Obama administration are frustrating. Larry Summers, Tim Geithner and those who walk with Wall Street are using ideology and assumptions instead of reality and facts.

First they started with the idea of modifications. That would do it. Just change the terms a little, have the homeowner release rights and defenses to what was a completely fraudulent and deceptive loan transaction (and a violation of securities regulations) and the foreclosure mess would end. No, it doesn’t work that way.

The reality is that these homeowners are being drained every day and displaced from their lives and homes by the consequences of a scheme that depended upon fooling people into signing mortgages under the false assumption that the appraisal had been verified and that the loan product was viable. All sorts of tricks were used to make borrowers think that an underwriting process was under way when in fact, it was only a checklist, they were even doing title checks (using credit reports instead), and the viability of the loan was antithetical to their goals, to wit: to have the loans fail, collect on the insurance and get the house too without ever reporting a loss.

Then it went to modification through interest rate reduction and adding the unpaid monthly payments to the end of the mortgage. Brilliant idea. The experts decided that an interest rate reduction was the equivalent of a principal reduction and that everything would even out over time.

Adding ANYTHING to principal due on the note only put these people further under water and reduced any incentive they had to maintain their payments or the property. Reducing the interest was only the equivalent of principal reduction when you looked at the monthly payments; the homeowner was still buried forever, without hope of recovery, under a mountain of debt based upon a false value associated with the property and a false rating of the loan product.

Adding insult to injury, the Obama administration gave $10 billion to servicing companies to do modifications — not even realizing that servicers have no authority to modify and might not even have the authority to service. Anyone who received such a modification (a) got a temporary modification called a “trial” (b) ended up back in foreclosure anyway (c) was used once again for unworthy unauthorized companies to collect even more illegal fees and (d) was part of a gift to servicers who were getting a house on which they had invested nothing, while the real source of funds was already paid in whole or in part by insurance, credit default swaps or federal bailout.

Now the Obama administration is “encouraging” modifications with reductions in principal of perhaps 30%. But the industry is pushing back because they don’t want to report the loss that would appear on their books now, if a modification occurred, when they could delay reporting the “loss” indefinitely by continuing the foreclosure process. The “loss” is fictitious and the push-back is an illusion. There is no loss from non-performance of these mortgages on the part of lending banks because they never lent any money other than the money of investors who purchased mortgage-backed bonds.

You want to stop the foreclosures. It really is very simple. Stop lying to the American people whether it is intentional or not. Admit that the homes they bought were not worth the amount set forth in the appraisal and not worth what the “lender” (who was no lender) “verified.” Through criminal, civil and/or administrative proceedings, get the facts and change the deals like any other fraud case. Nobody ever thought that returning a lady’s purse to her after a purse snatcher ran away with it was a gift. So why is anyone contesting returning the purse to homeowners who had their lives snatched from them?

9 Responses

  1. Loan modifications are a joke! There are far too many other methods to engineer a positive outcome for the homeowner.

  2. […] garfield, predatory lending, Racketeering, securities fraud, securitized, theft Neil Garfield LivingLies Nobody ever thought that returning a lady’s purse to her after a purse snatcher ran away with it […]

  3. Neil, I wanted to make one more comment about this article.

    With these modifications that are just a temporary fix months or a couple of years as one of my friends received. I think for cases that don’t have documents original and other major issues, if someone signs a modification they are validating the Lender, No?

    Also, re HERS I had wanted to apply for the position but tried working on things first, I got to busy to finish in time, something came up with my case. I have a map and don’t know if it would benefit, if you’d like to see it, where can I send it?

  4. Neil, This is EXACTLY HOW I FEEL!!!

    This is the very reason I am breaking my bum and going ahead with my case. I have no attorney, have run out of funds. It is
    nearly 4 years time now. It is really hard, but I have spent most of my waking hours working on the case. It just gets crazier by the
    day.

    When you look at my case it is essentially the same scenario as the Goldman Sachs in the news. I believe they and JP Morgan are part of the beginning and maybe middle and end of my story. I am just discovering these as new information. There are so many others involved. I had suspicions of these parties for a long time. Since March 09 Equity One inc has been pursuing a foreclosure on me, I happen to know they were not in standing, however the Judge did not want to hear of Jurisdiction or Standing either. They are a subsidiary of Popular, supposedly a former subsidiary

    This Mortgage has moved a few times since this foreclosure action has begun, none of course recorded as assignment or sold. I have also found out that a company that supposedly had bought the loan in October and returned the loan in November Now I find out they didn’t really return it. They had it until a few days after my forecloser filed WITH MERS a foreclosure and then an assignment, in that order. After they filed foreclosure the loan got passed to another company. Meanwhile in my civil suit against the Mortgage company, Title company, and Broker, the Judge a different Judge, orders Mortgage co to show me, finally, the original documents. I had been asking for 3 years and the attorney with this order had written in response to interrogatories 13 months earlier that he would supply original documents, that they were still looking for them. Well, I never heard again.
    So the Judge asked me what I wanted of them in preparation for trial in July. On my list was Original docs.

    Time was up yesterday and I received a document certification written by Popular employee saying the mortgage was sold in October but it came back in November. They say they loan in Oct 08 and it included the paperwork. paraphrase ‘Because the transer was and error when it was sent in Oct to Litton, so Litton sent it back to them Popular in November that is why it has a new number. ‘ She goes on to say in her statement, June it was sold to Fulcrum with a new number, this was persuant to a loan sale agreement between Equity One Inc and Fulcrum Chicago Corp. She pretty much concluded with ‘if litton sent the original docs back then to her knowledge and belief Popular would have sent it to Acqura, the servicer for Fulcrum… Thus they do not have the Original Documents, or don’t bother to explain why if they did have them all the time prior to them being who knows where, why did the not show them. Hmmm

    Then the attorney for the Chicago Title Insurance Company sent a letter saying that they have tracked originals down to the NEW owner Bank One and Verde’ OK now she says they, Verde, are going to send them to NJ to Chicago Title co Handwriting analysis. I requested the information because I would like to see the documents myself, she really tried to get out of answering me on how to contact VERDE, she gave me enough info to find them and the woman she spoke with who is handling the transport to NJ. The Attorney for Chicago Title observed it might be good for me to take a ride down there to Arizona. Because she said I will have to wait until they are finished. I have tried to call the woman there at VERDE, she is unavailable. Today the woman I spoke with said she would look into it and call me in the morning.

    I am guessing that if I don’t see them (THE original docs) when they see them, they will be unable to locate again. Now the thing is which company is this loan with? I do not believe they have any original docs See they made 7 sets of HUD 1, have record of reporting they were changing credit file, that held 2 different dates and2 different SSN. HMM,very suspicious.

    MY POINT IS
    Why should the taxpayers support this kind of insanity. As I am pretty sure most who read your blog know that the Goldman Sachs is not a phoenomina. For what other reason would “Investment Brokerages” want to provide pools with distressed loans??? Fulcrum described their special type of investments. Oh PLEASE PLEASE, PUT ME DOWN FOR 100 SHARES OF DISTRESSED MORTGAGE

    Why is this so new to the White House and to the SEC this is the basis for the Sub Prime set up. because they are posturing when it suits them. We will be completely dependant on the Government, and a good business sence they do not have.

    Imagine, how many times have we seen in the news opinions on how we ended up with such bad mortgages, why would we have signed them?
    The SEC cannot see what is right under their nose, and we are suppose to be securites experts, not having seen the documents they have seen.
    A better idea…
    We could have an agreement with the Banking Industry, If you do the crime you’ll do the time. Oh OH and they can be honest…
    and not sell junk loans. How can this be legal? One more thing, if they decide to do the crime, we don’t throw a party for them, give them a raise and PAY THEM AGAIN FOR WHAT THEY HAVE ALREADY MADE IN EXCESS OF THE MORTGAGE.
    Seriously why can’t that work. Fire anyone who does this, and be honest.

    The Government hopefully will stay out of the Banking world. The Govt after all took a part in this, they encouraged Banks to lend

    even to people who could not afford it. Even after they knew better, they approached Banks and told them to still lend. If they

    take this over, I am afraid home ownership is on the list. That would not be good. I don’t believe the Govt should pay off our

    fraudulent loans, especially since it is the taxpayers who pay. The way to do ths is for the courts to make it more open to the

    Consumer, find some way for the average American who has been stripped of funds, to be able to defend their home, without

    going crazy and having their life to go into ruin, as they see their children suffer. And they DO suffer, that is the hardest part. I am

    not as available as I always was and should be. I lost 4 years of my children’s lives and it shows. It’s really hard.

    To David: In my case there was a rescission, which POPULAR inc ignored until they thought it was in their best interest to

    answer, that was roughly 11 weeks later they decided to accept the Rescission, and not that by that time it mattered.

    Later when I had received the ledger and history on mortgage, one recorded comment was I will paraphrase. ‘FYI this rescission was here on my desk on my June 22, then it went to legal/compliance’ We received the response to rescission sent the 1, june, received letter 23, Aug.

    The other thing is when I mentioned this in court on the first court meeting (14 months, so far,) the Judge just brushed it off as
    meaningless. Well you signed it didn’t you? and You owe someone the money”. So far the opposing council doesn’t have to say much, the Judge is doing it all for him. He does not even want to hear about it. All in all, I am still glad I did it.

    If anyone knows a good lawyer in NJ would you pass it on?

  5. When the so-called Federal Reserve and Treasury are reportedly buying at least ½ of all R.M.B.S. (Residential ‘Mortgage-backed’ Securities), it makes perfect sense that Federal Government efforts are ‘weak’ in modifying them.

    The adding of phony ‘principle’ to the end of the term, excuses the real purpose… to create an entirely new, non-Toxic, enforceable Note and Deed of Trust. An active loan mod worker advised me of that yesterday. The real value of the home never mattered and never will.

    Secretly, the Feds desperately demand guaranteed 40-yr income streams they can get from new now-enforceable D.O.T.s, credit-ruined renters and lots of new taxes – inflation adjusted of course. Then they can finally cover up all of those $24.5 Trillion of pretender ‘Bailouts’, with interest for their political cronies: Goldman Sachs, J.P. Morgan, AIG, & company!

    Super inflation is coming, and endless streams of inflation-adjusting, real-worked-for income must flow by force, or they are all bankrupt and more importantly – then powerless to hire swarms of meddlers to control every minutia of our lives. Heaven forbid!

    It will take three jobs for both spouses until our new retirement age of 87 to pay for all of this. They know it, and finally so should we.

    Quo Bono! Their behavior makes complete sense then! Then it not so frustrating to fight this seeming insanity everyday.

    Work, lots of it, will indeed make us free!

  6. Dave,
    I like that, now who wants to be up first, and I don’t
    want to know who’s on second.

  7. Thanks for summing it up Neil, now what about the rest of America that is out of work or under employed by this Ponzi Scheme… they now are finding it difficult to make ends meet… how will the POTUS and his crew help those people..
    there are plenty of innocent people out there that do not have sub prime, liar loans that have been sucked into this vortex.

    Many of these loans were used to sweeten the pot of “sub-prime” MBS deals and look to be the next tier of homes to be taken in foreclosure… now that is “unjust enrichment”…. using unsuspecting peoples collateral, their homes without consent, to rig the system for their financial benefit… that is the Class Action that needs to happen.

    Just an opinion.

  8. Hi Neil,

    Here’s a thought to ponder….

    Suppose a borrower is facing foreclosure – so then the lender discusses a Loan Modification. If you’ve been following the mods – it is a freaking nightmare!

    So, what happens if the homeowners decide to RESCIND (just in case)- they mail the rescission via certified etc and don’t make any further payments. Typical of lenders during the loan mods – they take their time and allow the fees and interest pile up on the homeowners – so they finally call the homeowners 5-6 months later to begin the modification – and obviously explaining the additional fees because the borrowers haven’t paid during this time…

    The borrower doesn’t say anything about rescission – but politely listens and allows them to send out the forms. After several sets of forms are sent and 11 months later – the lender decides to foreclose.

    What happens when the homeowner shows the judge their rescission – with certified return receipt attached – then simply says – the mortgage we “used to have” was voided last year. Then Counter-Claims against the lender for trying to steal their property – wrongful conveyance – etc…

    If the loan was rescinded and the lender ignored it – then there no-longer is a loan to modify, right? Then because the lender failed to respond within 20-days – they also waived their right for repayment…

    That would be an interesting twist… it would get the lender’s shorts pulled up in a bunch and could be interesting to see how a judge would handle it…

    The rescission VOIDED the mortgage – thus there is nothing to modify, right?

    Just something to think about…

  9. Well said

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