Bank of America Admits it Found Errors

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

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Editor’s Comment: Oops. I thought they said they had reviewed hundreds of thousands of foreclosures in about 6 minutes and discovered that everything was in order. I thought they said the procedure was wrong (perjury and fraud on the court) but the facts were true. Now they say the facts are not true either. And when the wash cycle is complete, and the clothes go into the dryer, check the lint filter. You’ll probably find that they never owned the mortgages in the first place, that the mortgages were void and could not be “owned”, that the notes were made out in  favor of the wrong people, and that the obligations to the investors are paid off entirely or in part — all in accordance with securitization documents under which they claim they have the right to foreclose.

I know this is all very complicated and intimidating. But how hard is it to question a “review” procedure completed in days where they admit to robo-signing the documents, a process that took years to complete the foreclosures? If it took years to robo-sign, how it could take a small fraction of that time to review the records for accuracy?

Bank of America IS a public company, unlike MERS. If I was trading securities, which I am not, I would be, as many readers have told me they are doing already, buying puts, and selling short. Much as the government apparatus does not want BOA to collapse, the patient is far too sick to survive in its current form. Of course, that’s just my opinion, I could be wrong.

October 25, 2010

Foreclosures Had Errors, Bank Finds


Even as Bank of America begins to restart foreclosure proceedings in 23 states on Monday, the bank confirmed that it had discovered errors, including incorrect data and misspelled names, in the paperwork it has reviewed.

For weeks, Bank of America has insisted its review had not turned up any serious errors, and emphasized that it had not found a single case where a homeowner was facing foreclosure in error.

But on Sunday, the bank revised its fairly combative public stance. Bank of America had found errors, but only in a tiny number of cases, Dan Frahm, a spokesman for the bank, said late Sunday.

“These are examples of exceptions that were caught early in the process through control steps,” Mr. Frahm said. “They do not reflect exceptions in final documents that are being resubmitted to the courts.”

Bank of America and several other institutions, including JPMorgan Chase and GMAC Mortgage, halted foreclosures in late September and early October amid a growing controversy over problematic documents, including so-called robo-signers — bank employees who say they signed foreclosure affidavits without reviewing the documents. Other foreclosure cases were initiated with missing documents or incorrect information.

As a result of its review, Bank of America has combined signing and notarization into one step, unlike in the past, when they were separate tasks. “We felt there was greater risk for error before,” Mr. Frahm said.

On Sunday, Bank of America maintained that no homes were foreclosed in error. [Editor’s Note: In my opinion this isn’t simply wrong. It is a lie and they know it is a lie, which means they are lying to their shareholders, their creditors, and the public, not to speak of the consequences of filing any statement to that effect with regulatory authorities including the SEC. In my opinion, nearly ALL foreclosures by ALL of the mega securitization players were foreclosed improperly AND WITHOUT CAUSE.]

“The basis for our foreclosure decisions has been accurate,” he said, and he added that the bank would work to correct any problems.

Initially, Bank of America imposed the freeze in 23 states where judicial approval is required before a foreclosure can go ahead, and the bank extended it nationwide on Oct. 8. But on Oct. 18, the bank confirmed foreclosures would resume in the initial 23 states and declared it was confident in the procedures it had in place.

“We did a thorough review of the process, and we found the facts underlying the decision to foreclose have been accurate,” Barbara J. Desoer, president of Bank of America Home Loans, said at the time. “We paused while we were doing that, and now we’re moving forward.”

Since the controversy began, Bank of America shares have been pummeled and the company has repeatedly sought to reassure investors that it does not a deeper financial threat from the controversy.

What’s more, it is facing pressure from large institutional owners of troubled mortgages, including the Federal Reserve Bank of New York, Pimco and BlackRock, to buy tens of billions in bad loans back from them.

That has forced analysts to rethink earnings expectations, with some warning that the mortgage mess represents a long-term drain on an industry that only recently has gotten back on its feet.

As the nation’s largest bank and the servicer of roughly one in five American mortgages, Bank of America is closely watched by the rest of the industry, and its decision to resume foreclosures was seen as an attempt by the big banks to put the growing furor behind them.

Still, it is far from certain that banks will be able to calm the public controversy easily or quickly. Aside from the robo-signers, lawyers for homeowners have found evidence that documents were lost or even thrown out. Armed with this information, lawyers are gearing up for protracted court battles.

Bank of America’s troubled mortgage portfolio is a legacy of its July 2008 acquisition of Countrywide, a subprime mortgage specialist that was among the financial institutions with the most troubled loans, as well as its January 2009 merger with Merrill Lynch, which was a major player in the business of taking mortgages and transforming them into securities to be sold to investors.

In addition, as the beneficiary of two capital infusions by Washington under the federal bailout, Bank of America was among the banks most dependent on Washington to help survive the financial crisis, receiving $45 billion from taxpayers. Of that, $20 billion came in emergency aid after Merrill’s losses were revealed.

That money has been paid back, but the bank remains eager to maintain good relations with the government, and has emphasized that restoring its public image was a crucial factor throughout the foreclosure controversy.

Last Wednesday, Bank of America reported that operating earnings in the third quarter hit $3.1 billion, in contrast to a loss a year ago.

14 Responses

  1. I have a foreclosure sale scheduled for 11/5 with bofa.

  2. Denial of self, denial of reality
    BOA can say their “truth”
    and wish it was reality
    but the intelligent and wise know better
    saying it is what is don’t make it so.

  3. We are marching on the Senator office of McCain and Kyle on wed. we have had enough of the stuff from BAC and WF and CHASE etc….. they lie saying there is no fraud, little fraud, some fraud. then they say they’ll fix it… how do your fix deceit in mortgages, lying in appraisals, targeting minorities or targeting any low credit score. How do you fix planning to have failure in mortgages… check out my blogpost if you live in AZ and want to join in. amazing!

    Every state should protest to the congress, governor, AG or sheriff offices.

  4. frankielee

    You are so right. And, Sheila Bair: started off on the right track – but she was quickly silenced. Now – just another puppet.

  5. More trouble from the fools on the hill, this time it’s Sheila Bair:

    ~~”At a housing finance conference sponsored by the FDIC and the Federal Reserve, Bair suggested that a “safe harbor” be provided to lenders permitting foreclosure if some minimum standards are met.”

    Do you folks get to just decide amongst yourselves at the FED and the FDIC exactly how low the fraud bar should be hung?

    ~~”Bair recommended foreclosures go ahead “if the property is vacant or if the lender/servicer offered a meaningful payment reduction — say a minimum of 25% — and the borrower could still not perform on the loan.”

    Free passes here….get your free fraud passes here!

    ~~“Ultimately this problem will require some kind of global solution,” she added.

    W T F ? How can she say in one breath that we should all pretend that nothing distasteful took place, you know, like somewhere around 10 million fraudulent foreclosures, with doubled that coming, and then say we’ll at some point in time need to find an ultimate solution…that is, after the largest crime in human history has occurred, and we’re all sipping cognac reminescing about it all.

  6. “60% of the time, it works everytime”
    ~Ron Burgundy ‘Anchorman’

  7. great read on Mandelman matters: The signing

  8. What we to do now? Id foreclosures in non-judicial process still continue regardless of the fraud? How long do we have to stay in the house? All we know with the 25% down payment adding to all the payments made on timefor 5 years total to more than the house is woth now. The value will continue to depreciate more???? What to do? The HAMP is not working for anyone.

  9. Those aren’t stuttering sounds coming from BAC, that’s a death gurgle, and the prey turned predators are circling in to rip them to shreds. Like watching crocs slide into the murkey waters of the Amazon…and it couldn’t possibly happen to a more untrustworthy foe.

  10. Thank you Bank of America!

    Wow! Bank of America just published a statement that their acknowledgement process violated the notary laws of every state I know of. The process of acknowledging the signature on a document has never been a two step process. I cannot document an acknowledgement process that allows two separate and distinct steps.

    Therefore, Bank of America must cancel the Foreclosure / Trustee’s Sale process of every Foreclosure / Trustee’s Sale action it is currently processing in states that do not allow for a defective document to be “fixed / amended” without the need to reinitiate the process. This is because the documents that led up to or the document that initiated the sale process has, by Bank of America’s own admission, been improperly acknowledged.

    For example; Arizona does not allow the re-recording of the Notice of Trustee’s Sale. The defective document (or documents that led to this document) cannot be fixed / amended. Any correction in the Notice of Trustee’s Sale document would require that the sale be cancelled by the recording of a Cancellation of Notice of Trustee’s Sale document and a subsequent recording of a NEW Notice of Trustee’s Sale document. This new Notice of Trustee’s Sale document would start the Trustee’s Sale process all over. In Arizona this would give the homeowner an additional 91 statutory days plus any other time required for contractual provision notices until their new sale date.

    The statement by Mr. Dan Frahm published in the New York Times is court-admissible evidence in every action to oppose the foreclosure / Trustee’s Sale process because it is published in a newspaper or periodical. This meets Arizona (and most states) Rules of Evidence Rule 902(6) for Self-Authentication.


  11. What it the status of the Title insurance companies Are they insuring?

  12. Why arent the Judges being investigated?

  13. Gee, did they look at any of the loans they supposedly sold servicing rights to others when the loans were already in default?

    Why does Litton buy servicing rights to the mortgages that CW/BofA breaks permanent modification agreements on?

  14. Sounds like BofA is “stuttering” Sounds like a song that goes, ‘first you say you do and then you don’t, then you say you will and then you won’t, you’re undecided now, so what are you gonna do?

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