Obama Will NOT Sign Notary Bill: Good Work Readers!!!

Obama To Reject Controversial Notary Bill
in News > Mortgage Servicing
by MortgageOrb.com on Thursday 07 October 2010

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President Obama will not sign the Interstate Recognition of Notarizations Act OF 2010 (H.R.3808), which would have required state and federal courts to “recognize any notarization made by a notary public” licensed in any state, including electronic signatures.

The bill passed the Senate unanimously on Sept. 27 without any public debate; it previously passed the House of Representatives in a voice vote in April. The Wall Street Journal reports that the president will not formally veto the bill, but instead will send the legislation back to Congress using the “pocket veto” process.

The White House issued a statement that said, “We need to think through the intended and unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors. The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. We will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.”

The bill’s timing created controversy, in light of recent disclosures of “robo-signing” on tens of thousands of foreclosure documents. Critics of the bill claimed that it would make it far more difficult to challenge foreclosures in court.

Reuters quoted Ohio Secretary of State Jennifer Brunner as saying it “seemed odd” for the legislation to reach the president’s desk at a time when foreclosures are being halted in nearly half of the states due to questionable document reviews. Last week, Brunner referred specific instances of notary abuse occurring at Chase Home Mortgage and by the Mortgage Electronic Registration Systems Inc. (MERS) to a federal prosecutor for investigation.

Sources: Reuters, Wall Street Journal, White House

41 Responses

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  2. […] Obama Will NOT Sign Notary Bill: Good Work Readers … Reuters quoted Ohio Secretary of State Jennifer Brunner as saying it “seemed odd” for the legislation to reach the president's desk at a time when foreclosures are being halted in nearly half of the states due to questionable document reviews. Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota Vermont, and Wisconsin . […]

  3. This is in reference to an earlier post where “Obama was fixing the foreclosure mess” or something like that. He didn’t sign this because he’s a good guy. It would be insane to sign it in the current climate. Today his administration shows their true colors with a statement the “They do not support a foreclosure moratorium.”

    This from FedUpUSA:

    In a stunning display of turning The Constitution into toilet paper once again, our Dear President is again fellating the bank executives:

    The Obama administration does not support a nationwide moratorium on foreclosures at this time, Federal Housing Administration Commissioner David Stevens said Sunday in an e-mail response to questions.

    Calling the growing evidence that lenders have used inaccurately prepared and even fraudulent documents to foreclose on homes a “serious problem,” he said it had already “thrown a lot of uncertainty into the housing market that is already fragile.”

    “I’m not sure about a national moratorium, because there are, in fact, valid foreclosures that probably should go forward, and where the documentation and paperwork is proper,” Axelrod said.

    Notice the two immediate problems:

    In this country we are supposed to err on the side of not punishing innocent people. That is, if a particular legal thing would catch five guilty people while at the same time persecuting any meaningful number of innocent ones, our system of justice is supposed to eschew that path.
    The Constitution’s 5th Amendment says, in part:
    No person…… (shall) be deprived of life, liberty, or property, without due process of law.
    Fraudulent paperwork – in any amount – is a clear violation of The Fifth Amendment.

    But again, our Dear President and his officials are attempting to ignore the facts. This is not now and never has been about “simple errors.”

    It is about covering up what was done during the 2003-2007 years – the improper bundling of loans that did not meet standards and the willful and intentional failure to transfer notes.

    Just as Richard Nixon attempted to cover up the Watergate burglarly by destroying the evidence he had proving he knew what was going on, President Obama is attempting to deflect attention from the actual offense and pattern of conduct.

    The issue is not “robo-signed” documents. The issue is that the robo-signed documents are an attempt to cover up for previous failures in the securitization process which have left investors worldwide holding an empty bag, and homeowners with seriously-damaged chains of title.

    Wahsington Post:
    http://www.washingtonpost.com/wp-dyn/content/article/2010/10/10/AR2010101003300.html?hpid=topnews

  4. THIS IS BREAKING ON ALL OVER THE NET …OBAMA POCKET VETO IS NOT GOING TO STOP HR3808 BILL AS THE SENATE IS STILL IN SESSION. I HOPE I AM WRONG ON THIS.

    GO TO AND READ MORE …THOSE SNEAKY BASTARDS IF THIS IS TRUE

    .http://market-ticker.org/?singlepost=2190295

  5. http://4closurefraud.org/2010/10/08/action-alert-is-pres-obamas-pocket-veto-on-h-r-3808-possibly-ineffective/

    Neil, Carole posted this CALL TO ACTION on her site. Please help confirm this! IS there anything to worry about?

  6. the reason foreclosures in nonjudicial states are still going on is because no court is required, thus the robo probo is not an issue if no authority is required to look at the dummie docs.
    I do like the idea that a “satisfaction of mortgage” can be filed by mail to the county recorders office by anyone with a postage stamp & money order
    [ anonymously of course ] , the paperwork & recording records are so messed up already, who would notice?
    so hit em where it hurts, let the banks explain how a satisfaction got filed and by who???it really does not seem to matter ; even if you had paid off the note they foreclose anyway.
    think about it ….someone else “cast the die” so no point in wasting a perfectly good crisis [according to our “GOV”]
    Its kinda like 9/11 was a perfect reason to ramp up the ole war machine,how convenient huh?!

  7. I stated on August 31st … “they will role over on their ‘Upper-Management’ with out hesitation.”
    Again, Neil said it best:
    “It was fraud that got us into this mess and it is prosecution of fraud that will get us out.” … SOMEBODY NEEDS TO GO TO JAIL!!!

  8. pelucheven

    Excellant post !

  9. Arthur Delaney
    Arthur Delaney
    arthur@huffingtonpost.com | HuffPost Reporting
    Become a Fan Get Email Alerts from this Reporter

    Calls Mount For Foreclosure Moratorium, Investigations

    Senate Majority Leader Harry Reid (D-Nev.) joined the growing chorus of elected officials demanding a moratorium on foreclosures this week in response to mounting furor over revelations that banks have used bogus affidavits to take people’s homes away.

    “I write to request that your mortgage-servicing division suspend foreclosures on Nevada home owners until systems are in place to ensure Nevadans are not being improperly directed into foreclosure proceedings,” said Reid in an Oct. 3 letter to Ally Financial, Bank of America, Wells Fargo, Citigroup, and JPMorgan Chase.

    Several of the nation’s largest banks have already halted foreclosures in the 23 states where a court’s approval is required to foreclose. Ally (formerly known as GMAC), Bank of America, and JPMorgan have paused foreclosures after employees admitted in sworn depositions they didn’t verify information in thousands upon thousands of affidavits they signed.

    Nevada is not a “judicial foreclosure” state, but, Reid wrote, “suspending foreclosures on Nevadans is also justified because the reports of shoddy and defective affidavit preparation suggest that servicers might not be reviewing a home owner’s loan documents with the requisite care.”

    The still-unfolding paperwork scandal is reminiscent of the predatory lending and “liar’s loans” that inflated the housing bubble in the first place. Homeowner advocates say servicers are cutting corners by relying on “robo-signers” to produce bogus affidavits after losing paperwork as mortgages have been repackaged into securities and repeatedly sold on Wall Street.

    Sens. Al Franken (D-Minn.) and Bob Menendez (D-N.J.) on Tuesday asked the Government Accountability Office to investigate, and Sen. Jeff Merkley (D-Ore.) sent a similar request to the Treasury Department. Sen. Sheldon Whitehouse (D-R.I.) called for a national moratorium on foreclosure on Thursday, as did groups like the Leadership Conference on Civil and Human Rights, the National Fair Housing Alliance, National Council of La Raza, the NAACP and the Center for Responsible Lending.

    “My state of Rhode Island leads our region in foreclosures, and I have seen firsthand the devastation that losing a home brings a family,” wrote Whitehouse in a letter to Fannie Mae, Freddie Mac, and the Federal Reserve. “Until the major loan servicers demonstrate that they (1) are making every reasonable effort to keep families in their homes through loan modifications and/or forbearance; and (2) have the capacity to properly and respectfully carry out foreclosures, I ask that you impose a moratorium on all foreclosures on homes that secure the mortgages you hold or control.”
    Story continues below
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    House Speaker Nancy Pelosi and other California Democrats asked the Justice Department, the Federal Reserve, and the Office of the Comptroller of the Currency to launch investigations into foreclosure fraud on Monday. “Left to their own devices, [the banks] no sense of community, no sense of what’s right for our country,” Pelosi told HuffPost. “Just get something so we can turn it into a financial instrument so we can short it or long it or whatever, and privatize the gain and nationalize the risk, both to the taxpayer, to the homeowner, to the consumer, it’s stunning. This is a very big deal.”

    Attorneys General in several states, including Texas, Iowa, Delaware, Connecticut, and Colorado, among others, have asked servicers to freeze foreclosures

    The calls for moratoriums and investigations have come mostly from Democrats, but Republicans have piped up as well. Sen. Richard Shelby (R-Ala.) joined the calls for an investigation on Wednesday. A spokesman for House Republican Leader John Boehner (Ohio) told HuffPost, “At a time when economic uncertainty and unemployment are putting great pressure on homeowners and the housing market, it is imperative that we get all of the facts about this situation, and quickly.”

    The uproar over foreclosures led President Obama to effectively veto a bill passed by Congress last week without debate that consumer advocates said would have made it more difficult to fight bogus affidavits. Consumer advocates called the bill’s timing suspicious; Ohio Secretary of State Jennifer Brunner said it was “almost like a trap door” for banks needing an out from the paperwork scandal.
    Get HuffPost Politics On Twitter, Facebook, and Google Buzz! Subscribe to the new HuffPost Hill newsletter! Know something we don’t? E-mail us at huffpolitics@huffingtonpost.com
    .
    Dylan Ratigan

    Dylan Ratigan: Property Rights Gone Wrong
    Banks profited by packaging and selling those toxic home loans. Then they profited again by betting against those same securities. A bet, in essence, that a fraudulent loan wouldn’t be paid back. But why would politicians allow this?
    Michael Moore

    Michael Moore: Dems Come Alive!
    Just four weeks until the midterm elections and I’m starting to feel that maybe, just maybe, Democrats will prevent an All Souls Day Massacre. And if the Dems escape death’s door, they had better not let this nonsense happen again.

  10. Alan, you are correct a “pocket vote”… something that most of the American public was unaware of… kudos to all that brought this matter to the forefront… no mater where you stand at the very least the public now is cognizant of a “voice vote” and a “pocket veto” and the ubdermining legislation that gets passed on to them with no accountability by their elected officials.
    Lets see who votes Yea & Nay on this one when it is held to a floor vote.

  11. And yes most but not all of the cash buyers are from Foreign Countries but they are mostly Naturalized citizens.

  12. Anonymous Your analysis is quite correct. The people who bought properties last year for cash almost all of them are selling them at break even if they are extremely lucky. Most are loosing their shirts. So if last year their were 6 to 8 bidders. This year there are barely 2-3 if any.
    According to my realtor friends in SouthernCalifornia and in Central and Miami area Florida

    Unemployment and underemployment really sucks.

  13. BSE,

    Yes to your comment -” Nearly One Fourth of 2Q Home Sales Were Foreclosures ”

    And, many, many, more (but including those foreclosures) are cash purchases by foreigners. They are scooping up. Nothing against this – but……. WHAT ABOUT AMERICA???? Not good. America is in BIG trouble.

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    Michigan – Conyers and Kilpatrick Demand Lenders Extend Housing Foreclosure Moratorium to Michigan; No More Foreclosures Until Fraudulent Paperwork is Resolved

    Posted by Foreclosure Fraud on October 7, 2010 · Leave a Comment
    Conyers and Kilpatrick Demand Lenders Extend Housing Foreclosure Moratorium to Michigan; No More Foreclosures Until Fraudulent Paperwork is Resolved

    Washington, DC- Today, Congressman John Conyers, Jr. (MI-14) and Congresswoman Carolyn C. Kilpatrick (MI-13) called on lenders to extend their foreclosure moratorium to Michigan and other states and to cease administering foreclosures until the problem of fraudulent paperwork is resolved.

    The revelation that large mortgage lenders may have been evicting families from their homes based on flawed and erroneous documentation is no small matter. These lenders may have presented false affidavits – that is, sworn legal testimony – in thousands of cases fraudulently stating that a homeowner was in default or that the lender had the legal right to foreclose on the property, without the proper verification of the facts asserted in those affidavits. Moreover, the admission by these lenders of inaccurate documentation raises broader questions about whether they are proceeding with foreclosures in non-judicial foreclosure states based on faulty documentation or information. It is crucial that these lenders are held accountable.

    Michigan is among the hardest-hit foreclosure states in the Nation. In August 2010, the state’s foreclosure rate increased 128% over August 2009 and it remains among the top five states in the Nation in foreclosure totals. Michigan’s foreclosure rate rose 29% in the first half of 2010 over the first half of 2009. Metropolitan Detroit showed an increase of 35% during that same time period, rising to the highest level since 2007. In July 2010 alone, 1 in 241 housing units in Michigan received a foreclosure filing. In Wayne County, the number was 1 in every 158.

    In response to numerous recent reports of false foreclosure affidavits and other apparently fraudulent activities by home mortgage lenders, Reps. Conyers and Kilpatrick, today, sought the following actions:

    · Lenders should extend moratoriums on home foreclosures to all states, including Michigan, rather than just those states with judicially supervised foreclosures.
    · Lenders that have initiated moratoriums should insure that they actually prevent foreclosures rather than just evictions subsequent to foreclosures.
    · The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, thereby controlling a major portion of mortgages subject to foreclosure in the U.S., should review its procedures for proper compliance and also consider initiating a foreclosure moratorium

    At the same time, Conyers announced plans to investigate mortgage lenders to learn more about their foreclosure practices, including paperwork violations and false affidavits, and ascertain what can be done to protect homeowners from possible abuses. As part of this effort, Conyers is asking the Federal Housing Finance Agency – the federal agency charged with overseeing Fannie Mae and Freddie Mac – to ensure that they abide by the law, to consider initiating a moratorium, and to conduct an audit of their actions. In addition, Conyers will be calling upon the DOJ’s Executive Office for U.S. Trustees to investigate the extent to which false affidavits have been filed in bankruptcy cases by lenders seeking to foreclose on debtor’s homes.

    Thus far, only three lenders – Ally Financial (parent of GMAC Mortgage), Bank of America, and JP Morgan Chase – have ceased post-foreclosure enforcement actions in 23 states that have court- controlled foreclosure proceedings: Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, and Wisconsin. Even those lenders appear to have only ceased evictions, while they continue to engage in foreclosures, which take title from homeowners.

    At this point Michigan and 26 other states are not on the moratorium list for these lenders, purportedly because they have a non-judicial foreclosure process. However, without judicial oversight, the possibility of abuse can be even greater in these states. As a result, elected state officials in non-judicial foreclosure states such as California, Colorado, Texas, Massachusetts, and Maryland have recently asked lenders to suspend their foreclosures.

    Widespread concern about documentation abuses in the mortgage industry is not limited to state officials. Yesterday, House Speaker Nancy Pelosi and other members of the California congressional delegation called on the Justice Department, the Treasury Department, and the Federal Reserve to investigate large mortgage lenders’ handling of delinquent mortgages, mortgage modifications, and foreclosures. Additionally, Senators Robert Menendez (NJ) and Al Franken (MN) called on the Government Accountability Office to investigate the role of federal government entities charged with overseeing the mortgage lending industry to determine how they allowed lenders’ misconduct to occur without detection for so long. Also, Members of Congress from Maryland and Arizona – two non-judicial foreclosure states – called on large lenders to halt foreclosures in their states.

    “It makes little sense to limit the moratoriums to judicial foreclosure states when many of the same errors and paperwork flaws likely plague non-foreclosure states,” said Conyers. “When the very same lenders that ignored the rules which helped get us into the real estate bubble are placed in charge of the foreclosures that are exacerbating the problem, locking millions of Americans in a financial trap they cannot escape from, we have a situation that is spiraling out of control and cries out for intervention.”

    “Given the depth of the financial calamity in Michigan and other states, the huge number of foreclosures, and the chain reaction of problems involving foreclosures that has impacted communities and individuals, I would urge home mortgage lenders to cease their foreclosure activities,” said Conyers. “Rather than spending their time running mass production foreclosure mills, the lenders should be working with individuals to keep families in their homes and restructure their loans.”

    “Home foreclosures affect individual families and devastate entire communities,” said Congresswoman Kilpatrick. “For home foreclosures to proceed under false pretenses is patently unwarranted and unfair. I am proud to join one of the founders of the CBC and Chairman of the House Judiciary Committee in this clarion call for justice, fairness, and equality to Michiganders and all Americans.”

    SOURCE: http://conyers.house.gov/

    WE ARE STILL WAITING FOR SOME MUMBLING SOUND FROM DC GOVERNMENT OFFICIALS AND VIRGINIA OFFICIALS.

    NOTHING YET FROM OUR STATE SENATOR MR. WEBB, NOTHING FROM MR WOLF,

    NOTHING FROM MR CONNELLI, NOTHING FROM ANY BODY.

    NOTHING FROM MR FENTI, NOTHING FROM THE DC COUNCIL. WHAT A REAL SHAME.

    PUT YOUR LEGISLATORS AND LOCAL OFFICIALS ON NOTICE!

    THERE IS AN ELECTION COMING!!!!!!!

  15. Dear mr. Garfield,

    All these overpaid economists and lawyers should walk down the plank of infamy.

    It took them over three years of relentless foreclosures and frustrations on our part and you relentless efforts to bring this out into the open, along side other great lawyers and contributors.

    they called us nut cases!, Yeah i am one! but for all the right reasons.

    I have been reading over some of your early dissertations in this blog, and even if you had been a fortune teller you were right on the mark, point by point.

  16. ” DC Waking Up to Escalating Foreclosure Train Wreck: Grayson Calls for FSOC to Examine Foreclosure Fraud as Systemic Risk

    Wow, someone in DC has connected the dots: that the banks’ failure to adhere to contractual and legal requirements in the residential mortgage backed securities market are so extensive and widespread as to constitute systemic risk. Alan Grayson, Congressman from Ground Zero of the foreclosure mess, is calling on the Financial Stability Oversight Council to investigate the escalating foreclosure fraud crisis.

    Although the data points we have seen so far could be considered anecdotal, we have evidence that strongly suggests that major RMBS originators, the investment bank packagers, and the bank trustees failed to convey the notes (the borrower IOU, which is critical to having the legal standing to foreclose in 45 states) to the RMBS trusts starting in 2005, perhaps even earlier. And comments from industry insiders suggest this problem is pervasive.

    That puts a cloud over the entire US RMBS market, the biggest asset class in the world. This paper was sold as secured; the ability to offset the cost of borrower defaults by seizing and selling his house is critical to the value of the instruments. And if no assets were conveyed to a particular trust by closing, an even uglier possibility exists: under New York law, which was elected by RMBS as governing law for the trust, it would be considered to be “unfunded”, which means it does not exist.

    Now the rather sick irony is that this monster screw-up probably affects Fannie and Freddie paper only indirectly; presumably, it will a given that this will be treated as if the government guarantee covers this little mess. The Obama Administration is the last bunch of folks that will look into the fine print to see if Fannie and Freddie ought to eat this liability. I’ll admit I have not looked into the Fannie/Freddie procedures on this one, but I’d have trouble believing their rules would include having the government guarantee extend to operational screw ups that prevent losses on guaranteed mortgages being relieved by foreclosures. I’d have to believe they have putback procedures which will not be applied because the consequences would be too devastating to Team Obama’s best friend, the banking industry. So Frannie and Freddie not pushing the losses related to foreclosures back to the banks would be yet another back door bailout.

    Felix Salmon is also on the case and makes some sound observations as to the larger implications:

    ….the mother of all legal messes has already emerged from the foreclosure crisis, and threatens not only a large chunk of the financial system but also venerable civic institutions, like the courts, which have thus far emerged from the crisis largely unscathed….

    Argentina’s sovereign default has been called “the slowest trainwreck in history”, but this one might turn out to be slower, bigger, and much less fair. Millions of people have already lost their houses to lenders who didn’t have the proper paperwork, and it’s unlikely they will ever get any redress. For people who haven’t yet been foreclosed upon, however, it could now be a very long time before they lose their house.

    The big-picture consequences here are by their nature unpredictable, as no one has a clue how this might all play out. But I can think of a few themes:

    1. Bond investors, who have seen the value of their mortgage-backed debt rise impressively over the past 18 months, could find themselves unable to find any kind of bid at all. The paper will still be cashflowing, but those cashflows will be surrounded by enormous uncertainty, and no one’s going to want to buy them except at extremely deep discounts until the mess is cleared up.

    2. Mortgage servicers will go from being assets to being liabilities, and banks which own mortgage servicers could find themselves on the hook for substantial losses.

    3. The time from default to foreclosure will become indefinite, and as a result there will be a significant uptick in strategic defaults, especially in states with judicial foreclosures.

    4. The “shadow inventory” of houses which aren’t on the market but will eventually be sold once the bank gets around to foreclosing will grow substantially from its already-enormous level.

    Yves here. It appears there are four ways this crisis might play out:

    1. Congress intervenes to try to wave a magic statutory wand to make many of these problems go away, invoking its authority over national/interstate banks. To the extent industry incumbents admit there is a problem (Tom Adams reports there was amazing denial at an American Securitization Forum conference earlier this week), they immediately say, “Congress will pass a law.” But any Federal statutory remedy will run roughshod over well settled state real estate law and New York trust law. This is big state/Federal rights matter, potentially one of those rare Constitutional battles that the average citizen will care about.

    2. The Federal government comes up with a mass refi program of sorts. Even though in theory that might also run afoul of various state law issues, the reason the states are fighting is they see the devastation foreclosures are creating in their cities and towns. It would probably take some to-ing and fro-ing, but state legislatures would be far more inclined to play ball with this solution than the one outlined in point 1. But this is so contrary to how Team Obama operates that I see no will to go down that path, and the odds that the incoming Congress will be even more anti-spending is another not-trivial impediment.

    3. Mass deep principal mods. As we indicated, there are programs which are ready to go and only need some tweaking to help servicers make deep mods. With mortgage loss severities at 70% or worse, a 40% principal mod for borrowers, say, is a win for everyone but the servicer. And before readers howl that this is unfair, life isn’t fair. Moreover, lenders restructure loans all the time; it’s normal creditor behavior to rework a loan if the outcome looks to be more profitable than liquidating.

    The critical bit is assessing borrower viability. There is no point trying to save borrowers who are so broke they can’t afford payments even with a reduction in principal to, say, the current market value of the house. The and the NACA program provides a platform for handling what has been the sticking point, collecting evidence of borrower income and preparing a budget so a bank can see how much discretionary cash flow he has.

    While the banking industry will insist this would be a simply horrid outcome, what would turn the tide is private or attorney general suits in a particular state leading to a mass resolution. That would turn the tide regarding perceived viability.

    But mass mods would also leave the servicers with big losses on all the advances of principal and interest they have made to investors, and will force banks to end their phony accounting on second mortgages. It’s entirely plausible this puts some banks back in the TARP, which from my perspective is a good outcome. It would be hard after all the banks’ false claims that all was well and outrageous 2009 bonuses not to seem some pain imposed, at a minimum, the firing of top management for cause (meaning no severance) and the replacement of boards.

    4. Continued gridlock. I expect this to be what we see until the pressure hits the breaking point.

    Below is the text of the Grayson letter, which is addressed to Timothy Geithner, Shiela Bair, Ben Bernanke, Mary Schapiro, John Walsh (Acting Comptroller of the Currency), Gary Gensler, Ed DeMarco (FHA) and Debbie Matz (National Credit Union Administration):

    October 7, 2010

    Dear Secretary Geithner and members of the Financial Stability Oversight Council (FSOC),

    The FSOC is tasked with ensuring the financial stability of the United States, which includes identifying and addressing possible systemic risks. There is a well-documented wave of foreclosure fraud sweeping the country that presents such a risk. Bank of America and JP Morgan Chase have both suspended foreclosures in 23 states where that fraud could be uncovered and stopped by the courts. Connecticut has suspended foreclosures.

    I write to encourage the FSOC to appoint an emergency task force on foreclosure fraud as a potential systemic risk. I am also writing to ask the members of the FSOC to use their regulatory authority to impose a foreclosure moratorium on all mortgages originated and securitized between 2005-2008, until this task force is able to understand and mitigate the systemic risk posed by the foreclosure fraud crisis.

    So far, banks are claiming that the many forged documents uncovered by courts and attorneys represent a simple ‘technical problem’ with foreclosure processes. This is not true. What is happening is fraud to cover up fraud.

    The mortgage lending boom saw the proliferation of predatory lending and mortgage fraud, what the FBI called at the time ‘an epidemic of mortgage fraud.’ Much of this was lender-induced.

    When lenders – many of whom are now out of business – originally lent money to borrowers, they often did so knowing that the terms of the loans could not possibly be honored. They sought fees, not repayment. These lenders put people in predatory loans, they induced massive amounts of fraud, and Wall Street banks misrepresented these loans to investors when they moved through the securitization chain. They were stealing money from investors, and from homeowners.

    Obviously these originators and servicers didn’t keep good records of who owed what to whom because the point was never about getting paid back, it was about moving as much loan volume as possible as quickly and as cheaply as possible. The banks didn’t keep good records, and there is good reason to believe in many if not virtually all cases during this period, failed to transfer the notes, which is the borrower IOUs in accordance with the requirements of their own pooling and servicing agreements. As a result, the notes may be put out of eligibility for the trust under New York law, which governs these securitizations. Potential cures for the note may, according to certain legal experts, be contrary to IRS rules governing REMICs. As a result, loan servicers and trusts simply lack standing to foreclose. The remedy has been foreclosure fraud, including the widespread fabrication of documents.

    There are now trillions of dollars of securitizations of these loans in the hands of investors. The trusts holding these loans are in a legal gray area, as the mortgage titles were never officially transferred to the trusts. The result of this is foreclosure fraud on a massive scale, including foreclosures on people without mortgages or who are on time with their payments.

    The liability here for the major banks is potentially enormous, and can lead to a systemic risk. Fortunately, the Dodd-Frank financial reform legislation includes a resolution process for these banks. More importantly, these foreclosures are devastating neighborhoods, families, and cities all over the country. Each foreclosure costs tens of thousands of dollars to a municipality, lowers property values, and makes bank failures more likely.

    I appreciate your willingness to assess possible systemic risks to the country, and would again encourage you to suspend foreclosures until this problem is understood and its ramifications dealt with.”

    pulled from NAKED CAPITALISM

  17. Folks, remember the line…you can’t fix stupid? Well, you can’t fix fraud either, and that’s exactly what the majority of these politicians and AGs are calling for….modifications. Like FLA’s AG accepted from Wells today. That serves NO purpose whatsoever, except to legitimize their behaviour. I’ll ask again…exactly how does one modify fraud?

    My state’s AG asked me what I’d like for them to do. I asked them what it is that they thought they could do. He said get me a modification.

    The majority of reporters and politicians out there seem to believe that we just need to suck it up and admit that we owe…..and that a mod would be the proper thing to do. Maybe even coerce the banks into a write-down of some sort.

    Isn’t that like asking a burglar if he wouldn’t mind taking the silver set but consider leaving the stereo?

    No reconciliation. No modification. No pandering to these inglorious bastards! They need to eat what they’ve served up. And I truly don’t care if it brings down the entire financial system in it’s wake!

  18. Info Only

    Nearly One Fourth of 2Q Home Sales Were Foreclosures

    Foreclosures made up 24 percent of all home sales in the second quarter at an average discount of more than 26 percent, according to a Sept. 30 RealtyTrac news release. However, the number of foreclosure sales fell from the first quarter when nearly one in three sales was a foreclosed house sold at an average discount of 27 percent.

    So far this year, banks have repossessed over 1.2 million homes, up from roughly 1 million a year ago and 100,000 in 2005, before the housing bust, according to a Sept. 30 article in Reuters.

    In the second quarter, 248,534 properties that were in some stage of foreclosure were sold, up 5 percent from the previous quarter but down 20 percent from a year ago, the news release said. Banks sold more than 151,000 real estate owned properties in the second quarter, up 3 percent from the first quarter but down 28 percent from a year ago. REO sales in the second quarter represented 15 percent of all home purchases, down from 19 percent from the first quarter and roughly 20 percent from a year ago.

    “This is the kind of volume of activity that we need to see for the market to heal,” Rick Sharga, a senior vice president at RealtyTrac, told Reuters. “Our projections have been that we will get through the distressed inventory largely by the end of 2013, and these kinds of numbers are on target to get us there.”

    At 56 percent, Nevada had the highest share of foreclosure sales in the second quarter, followed by Arizona at 47 percent, California at 43 percent and Rhode Island at 37 percent, RealtyTrac data shows. Massachusetts rounded out the top five with foreclosures making up 35 percent of all home sales in the second quarter.

    Foreclosure price discounts were biggest in Ohio with an average discount of 43 percent. Michigan, Tennessee, Pennsylvania, Georgia, Illinois and the District of Columbia followed with average foreclosure discounts of at least 35 percent.

    Meanwhile, the number of distressed homes sold in August for all existing home types increased to 34 percent, up 2 percent from the previous month and up 3 percent from a year ago, Reuters reported.

  19. Wells Fargo Fast-Tracks Short Sales via Expedited Foreclosures

    Wells Fargo is aiming to complete more short sales by expediting some foreclosures, according to an Oct. 4 story in American Banker. The lender’s policy change from granting extensions to struggling homeowners reportedly comes at the behest of investors.

    While counterpart mortgage servicers JPMorgan Chase and Ally Financial Inc. have suspended thousands of foreclosure proceedings in recent weeks in order to review mortgage-lending documentation, Wells Fargo lacks most of the same documentation concerns and is moving forward with short sales. The goal is to recoup a portion of losses investors have taken – despite the fact that in a short sale the lender accepts a discounted payoff on a transaction, as the home is sold for less than the amount owed on the mortgage.

    The lender’s decision to expedite foreclosures follows on the heels of a September letter from Fannie Mae in which the government-sponsored enterprise told its servicers that it would hold servicers responsible for unexplained delays to foreclosures with fines and on-site reviews, American Banker reported.

    It also follows efforts by the White House to encourage short sales for borrowers who do not qualify for loan modifications.

    Fannie is an investor in Wells Fargo, as is Freddie Mac and the Department of Housing and Urban Development, among other private investors, according to American Banker.

  20. OCC Directs Seven Lenders to Examine Foreclosure Procedures

    The Office of the Comptroller of the Currency has directed seven of the nation’s largest banks to examine their internal foreclosure processes, The Washington Post reported Sept. 30. The directive follows widespread reports of lax record-keeping and sloppy paperwork by lenders relating to foreclosure proceedings.

    The banks are J.P. Morgan Chase, Bank of America, Citibank, HSBC, PNC Bank, U.S. Bank and Wells Fargo.

    OCC’s acting director, John Walsh, told lawmakers that some lenders “clearly had deficiencies” in their foreclosure systems. He said the OCC is looking to see that they fix the processing problems as well as whether there is specific harm that has been caused in individual cases, according to the Post.

    The paperwork problems have led JPMorgan Chase to halt foreclosure proceedings on 56,000 properties after finding errors in its system, and Ally Financial, formerly GMAC, to suspend evictions in 23 states.

    Although JPMorgan has reportedly fixed its internal procedures, the full impact on customers remains to be determined. “While we don’t expect our review to find that consumers were harmed, we will take appropriate action if we find any impact,” Tom Kelly, a spokesman for JPMorgan, told the Post.

    Christopher Dodd, D-Conn., chair of the Senate Banking Committee, called the situation “very troubling.” Federal Deposit Insurance Corp. Chair Sheila Bair agreed. “It’s just a further indication of how wrong we went with the mortgage origination process and securitization process,” Bair said.

  21. Here’s the NY Times story online reported a hour ago:

    http://www.nytimes.com/2010/10/08/business/08mortgage.html?_r=1&ref=business

    Folks, this Bill is not coming back. Remember, O is a socialist/progressive/marxist at his core. He aims to bring down the System, and “Fundamentally Change America.” We brought to his attention one of the ways he might be able to do that, and he took the bait. Good for us, not good for the banksters, good for the country, and in the end, won’t do much to advance O’s agenda.

    I’m betting that virtually everybody that voted for this bill had no idea of the nefarious second and third order consequences of the bill becoming law. Looked pretty innocuous to the untrained eye, didn’t it? And it looked like it made a lot of 21st Century sense, too. An easy vote “yes.” But not now.

    Now that Congress knows this is a hot political potatoe, they’re gonna tell the banksters “Sorry, guys, you’re on your own on this one.”

    I feel like celebrating this one.

  22. brian davies,
    Quick compliment … your ‘Relief from Stay motion’ that was posted yesterday … perfect!!!

  23. WOW THIS HUFFINGTON POST IS AWESOME HENRY REID OF NEVADA WANTS TO GET RE-ELECTED. CALLS TO HALT FORECLOSURES

    http://www.huffingtonpost.com/2010/10/07/calls-mount-for-foreclosu_n_754588.html

  24. THANK YOU MR PRESIDENT. AND THANK YOU MR GARFIELD AND COMPANY.

    I AGREE WITH JOSE FIGHTER 70% OR MORE OF THE COMPUTRESR IN THE USA HAVE A FACEBOOK ACOUNT.

    LET US GO VIRAL WITH IT. WE NEED YOUR HELP MR GARFIELD.

  25. ADD THIS TO THE MIX
    The Securities and Exchange Commission (the “SEC”) has proposed rules1 that would require securitizers to disclose, both at issuance and on an ongoing basis, all fulfilled and unfulfilled asset repurchase requests for all of a securitizer’s asset-backed securities (“ABS”) trusts over a five-year period, including repurchase requests made prior to the effectiveness of the new rules. In addition, the SEC has proposed rules requiring nationally recognized statistical rating organizations (“NRSROs”) to include in any rating report a description of the representations, warranties and enforcement mechanisms available to investors, and how they differ from representations, warranties and enforcement mechanisms in issuances of similar securities. These rules are mandated by Section 943 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which was signed into law on July 21, 2010,2 and which requires the SEC to adopt final rules no later than 180 days after enactment of the Act.

    http://www.scribd.com/doc/38914370/Proposed-SEC-Rules-Regarding-Securitization-Representations-and-Warranties-Would-Impose-Extensive-Diligence-back-to-originator-lennar-universal

  26. Glad to see that our power in numbers is starting to add up. Thanks Mr. President. We all know the fight is far from over but I would like to say there may be a dawn coming soon. If only we could find atty help that is not afraid of being chastized by their hmm “peers” ? Let’s break the cycle, this is not a handshake game.

  27. This is not over yet…Remember this becomes a pocket Veto which is a way for Obama to save face. Further those S.O.B’s on Capital Hill ran their campaigns with fraudulent money funded by the banksters but actually the contributions came from the US Homeowners and the investors who were scammed.

    Always think – These cleaver bastards risk nothing and use every body else’s money to enrich their livelihood.

  28. I am thrilled.. I agree with the person that said call and say thanks. and also call reps and senators. two thumbs up for catching this…. one day makes a difference.

  29. WHY CAN’T ANYONE ELSE PUT 2 AND 2 TOGETHER?
    PENSIONS + FORECLOSURES = CONFLICT OF INTEREST!!!

  30. EX POST FACTO!!!! UN-CONSTITUTIONAL!!!! TIME FOR A REVOLUTION, CIVIL WAR OR A NATIONWIDE KILLING SPREE!!!!

  31. If it is going back to Congress…we better be calling them up and telling them to kill the bill!!

  32. FOLKS , THIS WAS A GOOD VICTORY HOWEVER THIS WAS A POCKET VETO . THEY WILL SEND IT BACK TO THE PRESIDENT AT SOME POINT , SO KEEP THE PRESSURE ON ALL FRONTS.

    EMAILS & CALLS DO WORK.

  33. Way to go Mr. Prez… You finally struck a blow to the banksters…….. We thank you

  34. Hey all, don’t forget to send him a thank you. I bet he doesn’t get many of those – just people screaming about this issue or that. Let him know he did the right thing for the little people.

  35. The next round as O figure will be fought on the accounting practices of these middle fudge men.

    That is where is going to get tricky if you do not do a complete mortgage analysis as we must be aware by reading this blog.

    We need to push to follow the money. That is where the real pandora’s box is and where many of us will in reality see the whole dimension and truth.

    we have proven the docs and a fraud, now we need to prove their accounting is also a fraud and get restitution for all of us in whatever shape it may take.

    And Mr. Garfield is right, now more than ever we should not improvise, we cannot ruin it for every one. we need to fight and make sure our cases are strong, carry real evidence and that if we can afford it, have a competent lawyer and that they in turn check their ego at the door and are willing to learn about the real foreclosure defense and offense and stop being push overs selling loan mods that fail 97% of the time.

    The Washington Post had a series of articles today , I will try to post them here in a few minutes

  36. It’s the BLOGGERS! (To quote the new guy at David J. Sterns on their last investor conference call).

    Congrats to everyone who stuck their neck out and spoke up and threw their hat in the “HELL NO” ring. Your vote DOES COUNT.

    AMERICA SPEAKS!!!
    Meanwhile, I gotta get back and watch the LPS drain swirly at the stock exchange… riveting!

  37. Yes, but we MUST remain vigilant. I’m sure this pernicious bill will be revisited in some form. We may have a minor victory here, but the battle to pass it isn’t over. Its so deeply disturbing to me how many (unaminous) of these politicians want to throw us under the bus and at what speed (one day to pass Senate?) they wanted to do it.

  38. Dear Mr. Garfield

    70% of the computer user in the USA have a FACEBOOK account.

    Let us start one and go viral with it!

  39. Yeah !

    Round one for us.
    Let’s get ready for the next round.

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