Livinglies's Weblog

AG Brown Issues Warnings Re: Short Sales

8 Responses

1. 

   MSoliman, on June 23, 2010 at 12:21 pm said:

   May I also thank the person who was kind enough to post this article. She also cost me and clinets under counsel a year or more of lost time and horrific grief repairing my reputation.

   Hot topics like these are historical landmark decisons yet to unfold. Its something resolved over time.

   And therein is where the slightest foolish moves towards defamation can turnyour efforts into a witch hunt.

   A witness in this market is a difficult and at times unsettling propsition. Its a long journey that just starting

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2. 

   MSoliman, on June 23, 2010 at 11:58 am said:

   June 23, 2010

   Mr. Attorney General
   The State of California

   This correspondence is written with the utmost respect for your office. I am confused as to the priory to concentrate efforts.

   There are no short sales. There are no modifications.

   Why are you not telling the public somthing meaningful? The lender who sold the loan is lost to the asset forever. The fraud is a misjoinder of unknown parties acting as agents seeking feign and play upon the part of a true beneficiary.

   That Holder is a charge off having written down these toxic assets to zero basis. Remember, the President brought back the NOL carry forward and that means….dual consideration.

   Herein the actions of a debt collector, like credit cards that are UNSECURED! It triggers adverse claim judicially lacking merit against the “fee title” rights to the real property owned by the homeowner.

   Alienation of tile is a joke and these collection firms will seek to misconstrue the rights to title in favor of another party or person. Who is that person or parties? I’ll guess. My favorite Uncle?

   Or how about “Play it again Sam?” This one piece I do not know. I do agree a review of UCC article 9 is sufficient for one to be considered fool hearty to bring a claim for a lost note, no assignment (Good job Florida…move it to the District Courts.) or to move on public recorded information.

   Remember however that the UCC rules cover a debt offering and that will trigger derecognition and adding some $3 plus trillion in liabilities to the major four (banks) who got us here.

   Securities set off provisions are also a weak but more than likely affirmative defense for the lender benders. It provides if debtor is unable to meet an obligation to his or her bank, the bank can seize the customer’s current deposit.

   Arguments brought in defense of the unlawful sales are subject to opposition from a set-off provisions claim in a delisted registration.

   The setoff may in fact be applicable to loans between banks and their customers; it is more widely used in other industries, such as construction. Default means the failure to promptly pay interest or principal when due. But the set off provisions for revenue reporting and mitigating risk are colliding with California Real Property laws and the non transparent acts of parties in direct violation of Sarbanes Oxley.

   Offers to provide short sale and modifications are curious and can be shown as a material breach of conduct and subject to claims of tortuous interference with the borrower’s right to protect title and for full disclosure under DRE rules.

   Plaintiffs in a possession matter bring to court claims against families based on a mere presumption of a right to a beneficial interest.

   The judicial conflict stems from the abuses in a power of sale and should move each foreclosure into a civil matter versus a small claims hearing. This short sale is conceptually impossible barring, again barring the deal methodology and Real Property disclosure to a Seller and buyer in a bone fide sale.

   It’s all a judicial nightmare crossing several jurisdictions and highly diverse, beyond the jurisdiction of the State to grant a Power of sale.
   Another conflict with the California civil code 2921.4 and Bus Code of Procedures are these unlawful estoppels. Estoppels are brought by misjoinder of parties and condition for claims of laches during this long work out sessions.

   Homeowners buy into this modification offer which is deceptive under GAAP and it lends false hope over a period of time. Therein the parties liable reduce their recourse to coincide with the prepayment speed issue and waiting out the mandatory “Put” or repurchase requirements prior to CPR term.

   Recognize the “Obligors” (ex lender) desperation to make it to the finish line causing the lenders to drag out the time required to correctly foreclose. If done by servicing agents the offers of assistance are violations of the securities and indenture.

   The efforts are nothing more than a cut and paste job trying to back into a conforming recovery. And done so with a lack of any disclosure and under a veil of color and badge (FDIC) by collections firms, its accounting violations under an SEC delisted registration. (Anything more need be said).

   Parties are acting fraudulent in seeking to alienate title every time a sale occurs. Then compel the courts into a status quo transfer real property rights. Whose interest do you represent here? With the utmost respect you’re your office, these trustee sales are coinciding with a brokered sale “pro tanto” (what the hell is that – an archaic securities term for a debt of a cosigner?)

   The sales of cash strapped hard working people are concluded for “at then” consideration. The original beneficiary and Title Company considered a fiduciary and licensed by the State commissioner is withdrawn and substituted without merit. A beneficiary entitled to the collateral is indiscernible and must Bid” or should I say “never lose” by entering the “highest Bid”.

   A credit bid can only be conducted in an up market where the beneficiary set its opening bid to low and seek to out bid the difference. There and only then is bid permissible in power of sale state.

   Why are the Beneficiary and the transferee and the same?

   I have alleged in the courts and in deposition that the credit the “foreign parties use as a bid is for general ledger purposes. You cannot repossess “anything” if it is charged to zero. That’s basic accrual cost accounting.

   The parties to the beneficial interest are adversely filing “Notices” disclosures and seeking to alienate the fee title rights of the owner.

   Offering modifications for something parties do not show on their balance sheet is a fraud and violation of accounting good practices.

   The States concerns are dwarfed by the SEC jurisdiction over the matter with respect to 1122AB and deceptive servicing acts for which an “agent of the lender who is a seller CANNOT OFFER ANYTHING IN FOREBEARANCE.

   These attorneys are fighting the fraud and their efforts are evidential and at least can be brought into an action seeking class consideration.

   Accounting rules for gain on Sale treatment of assts delivered into a securities offering assume one asset is comingled into one “Pooled” asset and sealed in a closed end Fund.
   Assets gathered to form one lump sum payment like a dividend paid by a bank that used depositor’s funds to create new business entities. Fastow and Enron and Charlie Keating, Director and Chairman for Continental could not pull it off.

   Parties to adverse possession claims are woefully wrong to think you can establish an implied inherent interest for which worthless certificates tendered for a right to compel a borrower to deed back their homes equity for what is nothing more than a moral obligation.

   The Director for the SEC forewarned the registrant long ago, in 2002, to be judicially mindful of the accounting rules and inability to reestablish lost basis.
   These facts are evidentiary from the cut and paste and forged instruments being recorded in your State various Counties.

   It’s an embarrassment every time I contact the FDIC and speak to the top person in member bank compliance.
   These collections company sale with a broker in tow must be concluded as a bonefide sale with verifiable currency and it’s not.

   But a sale none the less requires a transfer tax and the rouge parties to the sham right of a foreclosure are not paying so much as one cent towards the transfer tax.

   Something is wrong here Sir and your gong after who? You need to have counsel with the SEC and US AG for targeting a fraud and States inability to conversely comprehend something is wrong, very wrong.

   Rouge means and methods are being applied to reacquire and purchase collateral that cannot be support in GAAP or any sane General Ledger. Your focus is contradicting the homeowner’s rights and administrations efforts to keep people in their home.

   Defunct and bankrupt lenders are assigning assets to healthy lenders and going after the homes in default. Those assets that were transferred to the Good guys from the bad guys are WORTHLESS STOCK CERTIFICATES. It’s so bad One West Bank won’t even acknowledge the toxicity of Indy Mac till the deal is signed sealed and levered.
   So given what I’m hearing, again, if the bank or “beneficiary” and transferee are the same parties, upon which another home is likely lost as we speak , and that transfer is conducted as a sale as the highest “Bidder” …Then who is bringing the foreclosure and can demonstrate standing as a true holder in due course? It is absurd and continues to go on with no end in sight.

   It’s the lenders or whoever these alien parties and rouge attorneys acting like a debt collector and who are assuming the right to recover and foreclose conditioned to applying a borrowers unencumbered full value as equitable consideration for an unlawful transferring of assets lost to a sale and all due to a botched securities offering.

   I think I know what I am talking about. Out of the cases I testify in , I have two cases I will testify as an expert that are before the California Appellate court. One of the cases is cleared to go to trial.

   We do need to stop the fraud but yikes! We are still on this subject after how long?

   expert.witness@live.com

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3. 

   topguncrdtadvsr, on June 23, 2010 at 8:53 am said:

   I think although all they will do is remove it ….Why not file sanctions and bar grievances w/ the supreme court of their state for everyone that lies that holds that LICENSE TO STEAL?

   Don’t be a victim! Now who knows how to do them well? I’ve got a dousy…definitely find out who the foreclosure company is representing! how involved are they with the mortgage company. They are pretenders and are unwanted. What is wanted is judges that do their jobs ADEQUATELY! That don’t LIE, CHEAT AND STEAL…When their found their priceless!

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4. 

   Ann, on June 22, 2010 at 1:14 pm said:

   THE SHORT SALE – MAKE SURE TO HAVE WAIVER OF DEFICIENCY JUDGMENT SIGNED BY LENDER
   ———————————————————————-
   http://www.gingolaw.com
   RE: Short Sale Deficiency Issues – translation: broker and client liability.
   Brokers & Agents

   Each lender addresses the deficiency judgment issue differently. Once the short sale has
   been approved, the lender will send a letter listing all the requirements of the approved
   transaction. This document most likely will not describe how your client is protected from a
   deficiency judgment. In this letter, some lenders will reserve the right to proceed in the future to
   recover the deficiency amount, some will not address the deficiency at all and some will require
   that the seller sign a “No Release” agreement to obligate continued payment on the note once the
   satisfaction of the mortgage has been recorded. Each of these three lender positions carry
   potential liability for a deficiency judgment to your client, and consequently to you if not
   addressed properly. There are only two courses of action to avoid liability to you – either the
   client’s interests are protected from a deficiency judgment or you put your client on written
   notice of the fact that a deficiency judgment is a real possibility.

   Absent any language otherwise, the lender is generally entitled to a deficiency judgment
   as a matter of right to the extent that the fair market value of the property at the time of sale was
   less than the sale price. Ideally the deficiency should be addressed in the short sale agreement.
   There should be language that the lender accepts a short sale in exchange for a waiver of the
   deficiency judgment. If one is not able to directly address the waiver of a deficiency, there may
   be other options that give some measure of defense against a potential deficiency claim– albeit,
   these may not ultimately be sufficient to protect your client – and you – from liability. Such as,
   modifying line 504 and/or 505 (if there is a 2nd mortgage) of the HUD. To do that, change the
   standard language from “Payoff Lender Loan/Mortgage” to “Payoff Lender Note and Mortgage”.
   Additionally, on all transmittal letters leading up to the deal, you should indicate that the
   proposed short sale is contingent upon the lender accepting the net proceeds in full satisfaction of
   both the note and the mortgage. Between the transmittal letter setting forth the terms of the
   “offer” and the lender’s acceptance of a HUD that clearly states net funds are to payoff both the
   note and the mortgage, one has a good position in equity to defend a subsequent effort to defeat a
   deficiency claim. The short sale authorization letter should reference a “satisfaction” (and not
   just a “release”) of the note and mortgage and also should not specifically reserve the bank’s right
   as to a deficiency. As there may be a tax liability too, the selling owner in a bank approved “short
   sale” can try to close the sale as a compromise and an accord and satisfaction in which the bank
   that approved the short sale has agreed that not only will no deficiency be sought, but that an IRS
   form 1099-C will be sent by the bank to document the forgiveness of the debt. There is a sample
   letter to document the accord and satisfaction which is attached.

   There are a few equitable defenses that may be available to your client. The judge’s
   equitable discretion is not unlimited or arbitrary – rather, it must be exercised along established
   legal guidelines. If short sales approved by the banks in the absence of a waiver of the
   deficiency become a regular business practice, logic suggests that there will be an increasing
   equitable trend to deny deficiencies for debt collection.

   Neither the Florida Association of Realtor’s Short Sale Addendum nor the FLA/BAR
   Short Sale Addendum specifically address a complete discharge scenario. It is expected that
   these will be modified to add “additional remarks” language which essentially states that the
   short sale contract is contingent upon the bank’s approval of all pertinent contract terms,
   including a complete and total discharge of any and all deficiency amounts owed. Even this may
   not be sufficient to avoid all potential liability by the client.

   There are some specific facts to be answered regarding the the taxable nature of the short
   sale Form 1099C. The first fact issue is whether the seller was using the home as a primary
   residence. If yes, then IRC Sec. 121 protects the first $250,000 of gain on the sale, if any exists.
   If not, then there is no exemption. Recent IRS actions have created some additional protection
   for the homeowner if the property was the primary residence of the seller. Usually there is zero
   tax effect to seller if it is the seller’s primary residence. The second fact issue is what is the
   seller’s adjusted basis in the property sold? You cannot determine gain or loss on a sale if you
   cannot determine the adjusted basis (purchase price + cost of improvements + costs of sale
   transactions – depreciation, if any). The third fact issue is what is the deemed sales price?
   Generally, the sales price in a short sale equals the amount of mortgage debt forgiven when the
   property is sold. Usually the seller’s sales price on the HUD-1 is the starting point for a sales
   price determination, then you add the amount of the debt forgiven in the short sale to get the
   combined reportable sales price. Last, you compare the sales price (HUD plus forgiven debt) to
   the adjusted basis to determine whether gain or loss is the result. It’s that simple.
   Clearly, the client must be placed on written notice that there is no guarantee as to
   whether the bank will proceed on the deficiency. If liability issues arise, bankruptcy may be an
   option. When confronted with a post-short sale deficiency judgment in the absence of written
   notice to your client of the deficiency issue, your client may question the propriety of the short
   sale at all since the only financial beneficiary thereof was the broker.

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5. 

   trespass unwanted, on June 22, 2010 at 10:54 am said:

   I know nothing and if I think I know something, I admit, I know nothing. I’m not an attorney and I don’t act like one.

   I read somewhere (this is hearsay since I can’t quote a source) that by the time someone sign the loan modification docs, you’ve given up so many rights you would normally have that it makes it easy for them to renege on the agreement and foreclose.

   You must learn to protect yourself from this point forward in all these unconscionable acts of ‘trust’. The short sale fraud can happen if you ‘trust’ the wrong individual during the process.

   Forget what you done in the past. It’s already happened.
   Do something different from now on.
   Don’t be the poster child for insanity, doing the same thing the same way over and over and expect different results.

   Do not affix your seal (your signature) without indicating you do not trust the contract you have entered into. Evidence presented in courts show agreement to terms. By setting the terms of your agreement you are providing yourself some protection from the unknown, and maybe a way out from the consequences of your lack of knowledge.

   No matter what is happening, these people still need your seal in some instances to seal the deal. Protect your self with how you sign any document. At the doctor’s office, at your child’s school, any document, any document. Did I say any document?. Every single one from now on, squeeze it in there, take your own blue pen so it can be noticed on their black ink pages, whatever you have to do. Keep a blue pen on your person for whenever you are requested to sign documents so you can mark what you need to, if you ever see that document again, it had better be in color, or show a true blue wet-ink marking indicating it is the original document.

   I don’t care if this is ‘bankruptcy court’, traffic court, traffic cop with a traffic citation, etc.. protect your rights and THEN affix your seal.

   If anyone wonders why you are writing so much, just say, this is how I sign, and you asked for my signature.

   Put above your signature, ‘at arm’s length’, and where ever they have your name, if you know what ‘litigant’, or ‘defendant’ or ‘plaintiff’ is and agree to that label, then keep it. If that’s not who you are, then strike through those terms you don’t agree with and initial. Do not bear false witness against yourself and expect someone else to defend you, against your own actions. Do not sign away your protections and expect someone to protect you.

   The moment you get a traffic citation it’s written on there you are a Defendent…Defendant’s name, Defendant’s address, Defendant’s signature. If you agree with that term, keep it, if not strike through it. You go to court already labeled. Something about being ‘pro se’ has removed or detached them from certain unknown labels for some, and it’s on the strict way they handle their court business that they succeed or fail.

   at arm’s length …….write this first
   a_signature …..write this after striking through labels
   all rights reserved ………write this second

   Bankruptcy people, do not speak to another creditor when you leave that sesson. You are debt free. Unless you sign a new agreement, there is no such thing as a creditor when you walk out of there. There are so many people who open their mouth and get right back into the credit agreement verbally and then wonder why the bankruptcy didn’t work.
   It’s you…you opened your mouth and got into a verbal contract with a ‘former’ creditor and now you have to pay when the judged had locked them out when the bankruptcy was approved.

   Know what you are doing. So many follow so many others to the same slaughter house and don’t know how they got there. You were following the wrong person’s lead or you didn’t know where you were going when you followed whoever you were following.

   I never give legal advice, because I don’t know legal things.

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6. 

   Christine Springer, on June 22, 2010 at 10:38 am said:

   All AG Brown has done for Californians lately is make sure they have no access to legal representation with loan mods and now he’s railing on short sales? News flash: short sale scams have been around for months now. The scammer is the BANK, not the people who are trying to help homeowners get rid of the house. (Not that scammers don’t exist.) And how does he think people expect to get paid? He and the California Bar Association have gone off the deep end in the name of “protecting consumers” when they should really be investigating the banks. If he wins the Governor’s race, I will be surprised, as I think Meg Whitman is going to trounce him in the elections.

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7. 

   THE A MAN, on June 22, 2010 at 9:00 am said:

   AGAIN THAT IS NICE, AND IMPORTANT. BUT THE COMPANIES THAT CREATED THE SHORT SALE LOAN MODIFICATION ETC…. MARKET OR BUSINESS BANK OF AMERIFRAUD, US BANK WELLS FARGO ETC….. ARE BEING REWARDED, ON BOTH ENDS. OUR TAX MONEY AND OUR HOMES AND BUSINESS AND OF COURSE BUYING THE SMALLER BANKS, PENNIES ON THE DOLLAR.

   GOD BLESS AMERICA

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8. 

   Kickboxer, on June 22, 2010 at 3:59 am said:

   Everyone is trying to “get over” on distressed homeowners. The lenders did it. Then came the loan modification scams, forensic audit scams, and now short sale scams. When will they stop scamming us? How does anyone’s conscience allow them to victimize a victim?

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