Rising Tide of Investor and Homeowner Claims Against Banks

Some homeowners say the banks tried to foreclose on a house that did not even have a mortgage. Others say they believed they were negotiating with the bank in good faith. Still others say that even though they are delinquent on their mortgage payments, they deserve the right to due process before being evicted.

Some consumer lawyers say they are now swamped with homeowners saying they have been wronged by slipshod bank practices and want to fight to keep their homes. Joseph deMello, a Massachusetts lawyer who represents Mr. Rought, said the common denominator in many of the cases was an overwhelmed system of foreclosures in which banks relied on subcontractors to do much of the work.


Editor’s Note: EVERYBODY wants a piece of bank steak. Investors, including the Federal Reserve are demanding their money back in full for the same reason the homeowners want to rescind the loans — the representations made to each were untrue. And the lies were the same — the value of the property, the propriety of the underwriting process, failure to disclose the lender, borrower(s), co-obligors and terms. EVERYBODY says the participants in the securitization chain — the pretender lenders in the foreclosures — failed to comply with Federal Law, State Law, common law and the terms of the securitization documents. Of course these claims must be proven in court — but on the borrower side they often don’t get the chance to prove their claims because Judges are throwing out their cases without hearing the merits. The assumption remains that the borrowers SHOULD lose even if the investors win on the same points that the borrowers are raising. Why?

In other words, if the investors, the Federal Reserve, Fannie Mae and Freddie Mac get all their money back, the general theory is that we should still let the foreclosures proceed regardless of who gets the title to the house or whether the forecloser (pretender lender) made a windfall profit by getting a house for free. In our political and media circus this has been turned on its head, claiming that borrowers are looking to get out of legitimate debts and get their houses for nothing. So instead the pundits and political geniuses think it is a better idea to give the houses to securitization miscreants who never had a dime in the deal. We hate the banks but we still want them to get the money and the houses too.

All of this is being fueled by a powerful banking lobby joined by real estate brokers whose only source of income right now is sale of foreclosure homes. And Treasury Secretary Geithner is sticking to his guns insisting that stopping foreclosures will decrease our GDP and make our economy worse. So his department is putting out dire warning to scare Judges into thinking that even if the borrowers and the investors are right, the foreclosures should still continue because what’s good for Wall Street and real estate brokers is good for the country. For some of you that reasoning might ring a bell. It’s false. see Treasury Wants Foreclosures to Proceed

A complete halt to enforcement and foreclosures on all securitized loans can only help our economy. It would force all parties to the table where the loans would be modified to fit with reality. Approximately one million homes would be sold as people take jobs where they are wanted but can’t get to because they are under “house arrest” (the result of being underwater in homes that were over-appraised in the first place to steal money from investors).That sounds like a lot of commerce to me and a lot of GDP, broker’s fees, and other fees legitimately charged and earned. Real estate brokers are being played for fools by Wall Street and they ought to be smarten up. They are on the wrong side of this issue and it is getting worse day by day. If they really want to see some business then take the high road and watch the pieces fall into place.

Some foreclosures would proceed with caution, providing a true creditor stands up and makes a claim that is supported by real evidence instead of the mere assertion, as Katherine Porter said, that the borrower MUST be liable and therefore the borrower should lose their homes. The unanswered question is lose it to who, based upon what obligation?

Servicers and other players in the middle are clearly going to take a major hit for their role in this fraudulent scheme of mortgage origination and fraudulent foreclosures. The question that remains is, if this is going to be settled in the courts by a Final Judgment entered by a Judge, and if the investors are entitled to get their money back from the underwriters of the bogus MBS bonds, then the obligation is paid in full and there is no debt. Then who gets the house? Obviously, in the absence of any legitimate claim for a debt due to a legitimate creditor, the homeowner gets the title cleared and the obligation is simply extinguished.

That sounds wrong to a lot of people, but who else would you give it to? And without the hammer hanging over the head of these Wall Street mega banks, who is going to drive them to the table to make the deal that should be made? — preserving some of the value of MBS and related investments, and putting borrowers more or less back in the position of where they were before they signed on to the original bogus deal, just like the investors did.

None of us created the false value of the MBS investments. None of us created the false appraisals of the property validated by a mortgage originator that was not, as they said, acting as a lender, but rather as a broker. Neither the investors nor the borrowers created the vacuum resulting from completely fake ratings sand appraisals. Why should either the investors or the borrowers shoulder the total loss? Why shouldn’t they receive the benefit of the bargain they thought they were getting and either make a little or at least not lose too much?


October 27, 2010

Homeowners Facing Foreclosure Demand Recourse


Ricky Rought paid cash to the Deutsche Bank National Trust Company for a four-room cabin in Michigan with the intention of fixing it up for his daughter. Instead, the bank tried to foreclose on the property and the locks were changed, court records show.

Sonya Robison is facing a foreclosure suit in Colorado after the company handling her mortgage encouraged her to skip a payment, she says, to square up for mistakenly changing the locks on her home, too.

Thomas and Charlotte Sexton, of Kentucky, were successfully foreclosed upon by a mortgage trust that, according to court records, does not exist.

As lenders have reviewed tens of thousands of mortgages for errors in recent weeks, more and more homeowners are stepping forward to say that they were victims of bank mistakes — and in many cases, demanding legal recourse.

Some homeowners say the banks tried to foreclose on a house that did not even have a mortgage. Others say they believed they were negotiating with the bank in good faith. Still others say that even though they are delinquent on their mortgage payments, they deserve the right to due process before being evicted.

Some consumer lawyers say they are now swamped with homeowners saying they have been wronged by slipshod bank practices and want to fight to keep their homes. Joseph deMello, a Massachusetts lawyer who represents Mr. Rought, said the common denominator in many of the cases was an overwhelmed system of foreclosures in which banks relied on subcontractors to do much of the work.

“No one double-checks anything,” he said. “It’s completely high volume and that’s unfortunately what leads to this.”

It may never be known how many homeowners have legitimate claims against the banks, real estate and banking experts say, because lenders do not release such data and because the vast majority of cases never make it to court.

For the last month or so, some of the nation’s largest banks have temporarily halted foreclosures in some states amid accusations that the paperwork used as evidence to oust homeowners was incomplete or signed off by so-called robo-signers who did little to check its veracity.

Even if the paperwork was faulty, the fact remains that most homeowners in foreclosure have not paid their bills, often because they bought more house than they could afford or because they lost their jobs. As a result, they will most likely lose their homes eventually, once the banks clean up their paperwork and resolve any outstanding legal issues.

“We believe that the overwhelming majority of the cases will be that the loan was seriously delinquent and needed to go to foreclosure,” said Paul Leonard, vice president for government affairs of the housing policy council at the Financial Services Roundtable, an advocacy group for the nation’s largest financial institutions.

Consumer lawyers and housing experts acknowledge that it is relatively rare that a bank initiates foreclosure on a homeowner who is current on the mortgage or has no mortgage at all. More common, they say, are instances where homeowners have applied for mortgage modifications but get foreclosed upon anyway.

In a report to Congress released this week, a federal inspector general described the government-sponsored modification program, known as the Home Affordability Modification Program, as deeply flawed.

While about 467,000 mortgages had received permanent modifications under the program, an estimated 3.5 million homes will receive foreclosure notices this year, an increase of 26 percent over 2009, the report says.

“You have this promise of relief for borrowers but actually getting that relief is like a zigzag line from point A to point B,” said Jose Vasquez, a lawyer for Colorado Legal Services.

Ms. Robison’s case is a variation on the theme. When she returned home to Yoder, Colo., outside Colorado Springs, from a holiday trip in December 2008, she found the locks changed and her electricity, gas and water heater shut off. A sign on the door advised her to contact Safeguard Properties, a company hired by the mortgage servicer, Litton Loan Servicing.

The notice came as a shock to Ms. Robison, a single mother of three who is now 36. She had renegotiated her mortgage just months before and was current on her payments. When she finally got back into her house, the food in the refrigerator was rotten and her lawn mower and air compressor had been taken.

When she called Litton, an employee admitted that the company had made a mistake in changing the locks, according to court documents. In order to reimburse her for her losses, Ms. Robison said, the employee told her he would “work something out” regarding her January mortgage payment, so she did not make it, court records show.

But when Ms. Robison paid her February and March mortgage payments, they were returned. And in March, Deutsche Bank initiated foreclosure proceedings. “I’ve been wanting to pay them the whole time, but they basically stopped taking my payments,” she said.

Deutsche has asserted its right to Ms. Robison’s house under a document that is meant to assign ownership of a mortgage note, known as an allonge. But Ms. Robison’s lawyer, Stephen Brunette, says Deutsche Bank is not named in the allonge that the bank submitted during court proceedings and does not appear on any other documents relating to her home.

Both Deutsche Bank and Litton Loan Servicing declined to comment about the case. A Deutsche Bank spokesman noted that the mortgage servicer, not the trustee, is usually responsible for handling foreclosures.

In Michigan, Mr. Rought says that the bank went after the wrong person.

Mr. Rought bought the cabin from Deutsche Bank on Jan. 27, 2009, paying in cash. He spent the next seven months fixing it up in anticipation that his daughter, Hannah, “would live in the house and be away from her parents for the first time in her young life,” court records show.

But in August of that year, when the Roughts pulled into the driveway, they noticed that something was wrong. The American flag was missing, the house had been broken into and the locks had been changed.

The Roughts’ belongings were gone too, including an heirloom dining room table, pots and pans, a pile of firewood — even the bracket used to hang the American flag. A contractor for Deutsche Bank, Field Asset Services, left a sign tacked to the front door, so the Roughts contacted them and said a mistake had been made.

A month later, however, Deutsche Bank’s representatives came to winterize the house, pouring antifreeze in the sinks and toilets and disconnecting the water pump. “We had expected an answer by now and quite frankly am appalled by the total lack of respect and professionalism of your company,” Mr. Rought wrote in a Dec. 1, 2009, letter to Field Asset Services. “We are trying to be patient and settle this peaceably. What would you do?”

Eventually, Mr. Rought hired a lawyer. Deutsche Bank declined to comment, and Field Asset Services did not return calls seeking comment.

Charlotte and Thomas Sexton, of Carlisle, Ky., fell behind on their mortgage payments because the payments on their adjustable-rate mortgage spiked upwards and Ms. Sexton lost her job.

They tried unsuccessfully to sell the home, to refinance it and to modify their mortgage payment. When the Bank of New York Mellon filed a foreclosure notice last summer, they went to a local lawyer, Brian Canupp, who, with the help of a forensic accountant, found a problem in the foreclosure filing.

Last month, a judge tossed out a foreclosure judgment after Mr. Canupp argued that the mortgage trust that claimed to own the Sextons’ promissory note —Mortgage Pass-Through Certificates Series 2002-HE2 — did not exist.

Instead, another trust, called IXIS Real Estate Capital Trust, Series 2005-HE2, claimed to own the Sextons’ note, court records show.

Ms. Sexton said that regardless of who owns her promissory note, she just wants to stay in her home and hopes that the bank will eventually agree to a loan modification.

“We found a mistake,” she said, “that gave us a light at the end of the tunnel.”

37 Responses

  1. GEORGIA RESIDENTS: Getting together a Class Action Lawsuit in Georgia for residents who are having
    problems with Bank of America. We want to hear your case. sonya36767@yahoo.com dfg@guldenschuhlaw.com 706-295-0333

  2. Clear Title May Not Derive From A Fraud (including a bona fide purchaser for value).

    In the case of a fraudulent transaction California law is settled. The Court in Trout v. Trout, (1934), 220 Cal. 652 at 656 made as much plain:

    “Numerous authorities have established the rule that an instrument wholly void, such as an undelivered deed, a forged instrument, or a deed in blank, cannot be made the foundation of a good title, even under the equitable doctrine of bona fide purchase. Consequently, the fact that defendant Archer acted in good faith in dealing with persons who apparently held legal title, is not in itself sufficient basis for relief.” (Emphasis added, internal citations omitted).

    This sentiment was clearly echoed in 6 Angels, Inc. v. Stuart-Wright Mortgage, Inc. (2001) 85 Cal.App.4th 1279 at 1286 where the Court stated:

    “It is the general rule that courts have power to vacate a foreclosure sale where there has been fraud in the procurement of the foreclosure decree or where the sale has been improperly, unfairly or unlawfully conducted, or is tainted by fraud, or where there has been such a mistake that to allow it to stand would be inequitable to purchaser and parties.” (Emphasis added).

    Hence, if forged Robo Signed signatures are used to obtain the foreclosure, it CERTAINLY makes a difference in California and other non-judicial foreclosure states.

  3. This is a snappy comeback for the media or other homeowners who think we are deadbeats. I don’t know about the rest of you, but I lost a $15,000 down payment and $2,500 in bogus closing fees to an attorney who went to the Fed Pen for 3 years for wire fraud in an illegal house flipping scam. I also lost about another $12,000 in payments on my house. I paid over $8,000 in remodeling my kitchen and bath. I had to sue AHMSI in Federal court to get them to do a loan mod. The loan mod is still not done yet, but they want to settle. http://www.challengingforeclosure.com, Burmese8@yahoo.com, 864-241-8602

  4. Donna,

    Bankruptcy…how can you liquidate an empty account? You are missing the big picture..you may have an inheritance from the kingdom of heaven, and you trust an attorney, an officer of the court, to think about you and liquidate an ’empty’ account so you can keep a home?

    If your inheritance from the Creator was worth 10 times your house, wouldn’t the attorney be glad to liquidate it so you can keep your home? Don’t you guys read the bible? or some other religious doctrine? I’m sure all of them have the story where the brother gave his inheritance to his other brother for some porridge.

    I’m not belittling bankruptcy people, you have a right to get rid of anything you don’t value, but if you find out later that your brother has all your stuff and didn’t tell you what he’d taken from you….do not be mad.

    You went to the bankruptcy attorney and said, liquidate me so I can have this home, that attorney did not come to you and trick you into giving it up.

    Oh well, I know I can’t get everyone to see the big picture, but the devil is running out of time, and he has as much a role in this as Judas had with Christ. Sometimes people have a role to play so that certain things can come to pass, and if the divine plan is to see where your heart is, or where you place your wealth, then I guess it’s getting easier to separate the wheat from the chaff.

    I love you and don’t mean to harm anyone with my statements, but you will wake up…you will, and I hope you like what you see, based on the decisions you made.

    To answer Zoe, on October 28, 2010 at 3:23 pm, a modification is an entirely ‘new’ contract, that’s how one without standing to foreclose can offer a modification.

    frankielee, on October 28, 2010 at 7:29 pm, I love you and I’m sorry to hear what happened, but I see many fighting to have what you have.

    I make this comment with the utmost respect for all of you.
    If you bargain with the ‘devil’ do you really expect to get treated with respect and to have a positive outcome? A modification takes away so much of your rights, it’s like selling your soul to have a home.

    Many of you are mad because the devil won’t make a deal.

    When it does, you don’t like what you get.

    Bankruptcy protects for that bankruptcy period…no other, so if another creditor tries to take your home, within a certain time frame, you can’t declare bankruptcy again to keep it again.

    If you have an estate in the kingdom of heaven, you threw it away to keep a house on earth by declaring yourself bankrupt (and telling someone to liquidate your inheritance, since you figure there is more value in your home than in your inheritance).

    Why do you think the creditors go away when you liquidate what you don’t even know you have?

    You should be asking more questions, than anything.

    Like why is septuplets 7 kids, but September the 9th month?

    Why is Octopus and Octet indicative of the number 8 but October is the 10th month and

    why is Decimal a base 10 number, but December called the 12th month.

    Why does the bible say ‘the evening and the morning’ was the first day, but our days are morning and evening?

    There’s more deception than just a mortgage document created in fraud.

    I love you all,
    Light and Love
    Trespass Unwanted, alive, allodial, life, free, freeman, live born, born alive, whole blood, corporeal, with a spiritual affinity within the first degree with all mankind and creatures of every kind.

  5. Bill, on October 28, 2010 at 9:20 pm Said:
    to use cash.

    You must know what cash is, and it’s not FRN’s.
    They keep cash in their vaults…and if you ask for it, they have to ‘replenish’ it from another bank branch, or from the Federal Reserve via armored truck.

    Dollar bills are worth the paper printed on, and if you are not part of the solution, you are part of the problem. I live in a city where we go through the extra task of carrying cash. It’s as if we were back in the days when our ancestors spent gold and silver. Sure it wasn’t cute or handsome or savoir faire to carry a bag that had gold coins or silver coins, and so someone introduced paper backed by gold or silver and we let them keep the gold coins or silver coins in a vault, and then over time they took over the gold and silver and kept it, and told us the value of the paper would be backed by the gold and silver they kept, and then they removed that and left us with paper.

    Well, that’s what we get, as descendants of our ancestors for thinking we are important as we spend worthless paper on goods and services and watch more worthless paper get printed.

    We are part of the problem…it’s not an us and them..we have a role to play in this too. When we ‘face’ the truth and make some changes in ourselves, we will see changes everywhere else.

    Those that have made changes here, are affecting the positive growth of our communities and the control of the prices of goods and services, because we spend ‘cash’ and not paper.

    If the bank doesn’t have enough ‘cash’ to allow us to withdraw, we make a request for the ‘cash’ to be delivered.

    You will have to ultimately wake up and find out what is important I’ve been dispossessed. Since I’ve been ‘moved’ I’ve met more people, and been blessed beyond anything I thought possible. I kept my heart, I learned ‘how I played a role in the conflict’, I loved my brother unconditionally, which is what religion teaches…I’m not a member of any church and I have no religious affiliation because of the us and them mentality of religion, but I can tell advice you to keep your heart and remember the original message, and sometimes you can fight the devil to stay in hell, and wonder why you haven’t gotten to heaven. Or you can love the devil, who ‘suffered your feet to be moved’ and if you moved while you still had money and credit to do so, it may open up other doors in the universe you did not know where there. The kingdom is not there for those that don’t love, otherwise the kingdom will have to deal with this too, and it kicked out angels that had already tried to bring this mess in there.

    I love you all, but Bill is right, you will have to do something different, and if you don’t like what the drug dealer is doing in your community, stop pushing his drugs.

    Paper dollars come from Federal Reserve, a group of private bankers who can print it at will.

    coins come from US Mint and there is a ‘dollar’ version, but not a 10 dollar and not a 20 dollar version, but if you get a roll, it comes in 25 dollars. It is profit for a business, but they can’t ask for them, and it helps keep people employed, and if business is good, it helps them hire more people so they can be employed.

    You are who you are waiting for to make a difference and change this from what you don’t like to what you can live with.

    It starts with you. I love you guys.

    Light and Love,

    Light and Love,

  6. I don’t mean to say give them the home, or not go to court to try to keep the home, I’m just saying there’s more to this than what you see in front of you. The negative energy generated from the conflict is just as useful to those that created this as solar or wind energy. Energy can be harnessed. I’m just asking that you have a higher level of awareness of where your heart is as you deal with this stress and crisis and that you are attentive to the words used to get you to use them, and the energy expended that can be harnessed in ways you won’t understand, and if your soul can go with it, in how you feel, hate or love for the ones who caused it, well, depending on what you do, they may be happier with what they are getting or getting you to give up; even if you get to keep the house.

    Light and Love,

  7. Stated above:
    “As lenders have reviewed tens of thousands of mortgages for errors in recent weeks, more and more homeowners are stepping forward to say that they were victims of bank mistakes — and in many cases, demanding legal recourse.”

    There’s a legal definition difference between a mistake and an error. Whoever makes a mistake is allowed to go back and fix it. If an error is discovered, it can reverse the entire agreement or judgment.

    The Main Stream Media is at it again, and they are feeding words to the people hoping we will jump on them and utilize them in their favor.

    I can imagine a pro se or sui juris plaintiff using the word mistake as in the bank made a mistake and then not understand the ruling when it is against them.

    It’s errors, people! Errors, errors, errors…not mistakes.

    Let the chips fall where they may. Keep your heart about this..it’s only a home. The Creator has greater things for you if you believe. We are brothers and sisters in spirits in bodies. Someone has to take the high ground and maintain peace and help their oppressive brothers understand unconditional love.

    Light and Love,
    Trespass Unwanted, alive, allodial, life, free, freeman, live born, born alive, whole blood, corporeal

  8. Bernanke – Another criminal employed by the US government.

  9. Neil

    Do you know the best 5 examples of quality Fraud suits against bank employees, foreclosure mills, and the banks themselves? A .pdf or so to look at would help us all.

    Thanks for your website!!!!!!!

  10. Boycott the foreclosing banks….

    Stop using ‘Visa’ cards, checks, deposit, unsafe-deposit boxes. Use cash. No more payments to them either, while they steal our neighbor family’s home.

    They want to bankrupt us. NO Boycott them instead for their frauds. They’ll fall over first from their internal corruption and Ponzis.

    Cash & silver everyday, like great-grandpa in ’29.

    Get a floor safe.



    “And we’re always trying to find that sweet spot to use as much of the money that we have available to us to help those who can be helped, without wasting that money on folks who don’t deserve help,” he continued. “And that’s a tough balance to strike.”

  12. I spent the majority of 2008 trying to get a modification with the great Satan Countrywide. After 6 months of comic relief with CW’s service department in Mumbai, I called in my AG. Countrywide wasn’t the least bit threatened by this development. “Bring it on,” they seemed to say. Finally, after nine months and with the threats from my AG, I got a mod. They modified me upwards, as they did a lot back then. My monthly payment went up….my total amount due, thanks to fees and such, soared back to a decade earlier, so that I hadn’t made any headway in paying on my house for 10 years.

    Then I found Neil Garfield’s site. I read his preposterous claims….rampant systemic fraud, investor fraud, borrower fraud, fatal defects, assignment defects, and on and on. At first, I thought he was a madman in search of website hits.

    Nearly three years later….everything he’s been saying has come to pass as if it was etched in stone. Hat’s off Mr. Garfield. You are a seer, and one of a kind. Many thanks, from an admirer. I haven’t won the battle quite yet, but you’ve filled my quiver.

  13. Neil

    How true. You write – “Investors, including the Federal Reserve are demanding their money back in full for the same reason the homeowners want to rescind the loans — the representations made to each were untrue. And the lies were the same.”

    How does the Fed – even look anyone in the eye with a straight face? But, they have – Mr. Ben Bernanke – has looked Congress in the eye – and said that there is a “moral hazard” in helping home owners.

    And, we have to assume from Mr. Ben Bernanke’s statement that there is no “moral hazard” in helping “investors”- meaning themselves and the banks – because they purchased the “junk” from the banks.

    Not everyone is in foreclosure – not everyone needs help – this is not a moral hazard issue – THIS IS FRAUD – Mr. Bernanke. – and the fraud must be rectified – HOME OWNER VICTIMS FIRST. Had you done this in the first place – we would probably NOT be having the problems we have today – economy included..

    Look the people in the eye again – Mr. Ben Bernanke..

  14. http://www.huffingtonpost.com/rj-eskow/getting-medieval-on-your_b_775482.html

    Here’s another DEFINITELY worth the read. Forgive me if already posted elsewhere.

  15. Foreclosuregate = Watergate Impeach Obama Now.

  16. Leapfrong thanx for the huffinton article

    To Quote from the article. Obama Said the following:

    “The biggest challenge is how do you make sure that you are helping those who really deserve help and if they get some temporary help can get back on their feet, make their payments and move forward and stay in their home versus either people who are speculators, own second homes that they really couldn’t afford because they’d gotten a subprime loan, and people who through no fault of their own just can’t afford their house anymore because of the change in housing values or their incomes don’t support it,” Obama said during a roundtable discussion with a handful of progressive bloggers at the White House.

    Answer: You follow the Law Mr President. Plain and Simple.

    Now he is making the speculators of Real Estate who put their hard earned money and time into houses the bad guys? Did the speculators break any Laws? The Banksters are breaking the laws with forgery perjury and back dating. If the speculators broke the law then prosecute them. so that the Banksters who already profited who knows how many times are the good guys.

    It might be time to go Richard Nixon on Obama.

  17. As to Katherine Porter, she very succinctly describes many of the problems inherent in the financial system in just the abstract of a paper on her website entitled, “Misbehavour and Mistakes In Bankruptcy Mortgage Claims.” As I said in my previous post, it’s a complete sham. She writes:

    This Article examines the actual behavior of mortgage companies in consumer bankruptcy cases. Using original data from 1700 recent Chapter 13 bankruptcy cases, I conclude that mortgage servicers frequently do not comply with bankruptcy law. A majority of mortgage claims are missing one or more of the required pieces of documentation for a bankruptcy claims. Fees and charges on claims often are poorly identified and do not appear to be reasonable. The bankruptcy data reinforce concerns about the overall reliability of the mortgage service industry to charge homeowners only the correct and legal amount of the debt and to comply with applicable consumer protection laws. Mistakes or misbehavior by mortgage servicers can have grave consequences. Bloated claims can jeopardize a family’s ability to save their home in bankruptcy. On a system level, mistakes or misbehavior by mortgage servicers undermine America’s homeownership policies for all families trying to buy a home.

    The data also reinforce concerns about whether consumers can trust financial institutions to adhere to applicable laws. The findings are a chilling reminder of the limits of formal law to protect consumers. Imposing unambiguous legal rules does not ensure that a system will actually function to safeguard the rights of parties. Observing the reality that laws can underperform or even misfire has crucial implications for designing legal systems that produce acceptable and just behavior.

  18. If you listen to the bankers spin, and unfortunately, it’s the belief of the past and present administration’s views as well, you get the feeling that they really do believe it, that, their way of life and of doing business is a viable model that should be envied and applauded.

    Anyone looking from the outside in sees a complete sham, a system so foul and corrupt as to warrant a total dismantling before it can do any more harm. It’s dangerous, it’s a disgrace, and it’s truly embarrassing to be connected in any way with this farce. Any government and industry that would together excel at breaking the laws of the land and be proud of their caper shouldn’t continue, it’s time is done. Stick a fork in it.

    I see no way in hell that these two completely divergent views can continue to clash without revolution, and all that that entails. The elite will resist any change to their pampered lifestyles and over-rewarded risk taking, and the many of us wearing blue jeans, myself included, have had enough of their criminality and all that it represents. It’s pitchfork time in America.

  19. I have been asking this question and Katherine Porter (I think that is her name, the professor from Iowa) said it yesterday as well: How can a party modify a loan if it has no standing to foreclose?

  20. http://www.huffingtonpost.com/2010/10/28/obama-foreclosure-program-_n_775553.html

    We’re on our own. Of course, we already knew that, right?

  21. To the A-Man. You have a very good point. We pay these judges’ salaries. They are supposed to be protecting the public, ha, ha. Our government has started eating the middle class alive so the big corporate powers can get even richer and more powerful. This must be done county by county and state by state. We have a Master in Equity judge in each county in South Carolina for foreclosures. Other states have different arrangements. If you are in a nonjudicial state, you need to sue the pretender/lender with a Quiet Title action. http://www.challengingforeclosure.com Burmese8@yahoo.com 864-241-8602

  22. The Judges we need to make a list of judges and either impeach or vote them out.





  23. I told the Federal Reserve Board way before this ever went public.. I questioned them after the FDIC told me that the BONYM
    was under the jurisdiction of the FDR…

  24. The Bankers are so full of it!, they have people testifying under oath that their originating practices were a total fraud, that their paper work is a total fraud, that their securitization process were a total fraud, and their payments to our politician is bordering on criminal.

    They destroyed the country. They got ton of money from us, they will get an additional 4 trillion gift from the Federal Reserve and they still claim all we want is a free house.

    Come on guys, you for the most part got a good education, but we do not need to be patronized.

    Your institutions either by collusion or omission created a pyramid scheme.

  25. Wells Fargo Foreclosure on Bankrupt Bronx, N.Y., Homeowner Halted by Judge
    By Tiffany Kary and Thom Weidlich – Oct 28, 2010 3:10 PM ET

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    Tandala Mims was allowed to keep her two-family brick home in Bronx, New York, after Wells Fargo Bank N.A.’s bid for foreclosure was rejected by a bankruptcy judge who said the bank’s paperwork was “questionable.”

    To contact the reporter on this story: Tiffany Kary in New York at tkary@bloomberg.net

    To contact the editor responsible for this story: Peter Blumberg at pblumberg1@bloomberg.net

  26. Wilbur Ross’s American Home Mortgage Faces Servicing Lawsuits
    By David McLaughlin – Oct 28, 2010 8:59 AM ET

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    W.L. Ross & Co. CEO Wilbur Ross

    Wilbur L. Ross Jr., chairman and chief executive officer of W.L. Ross & Co. LLC. Photographer: Ramin Talaie/Bloomberg

    Billionaire Wilbur Ross’s American Home Mortgage Servicing Inc., facing lawsuits by attorneys general in two states, was sued by a homeowner who accused the firm of using tactics that lead to improper foreclosures.

    The lawsuit, filed Oct. 25 in federal court in Dallas, seeks class-action status on behalf of homeowners with mortgages serviced by American Home going back to 2006. American Home’s “illegal, unfair and deceptive business practices victimize borrowers” across the U.S., according to the complaint.

    American Home “routinely and systematically assesses unwarranted fees against consumers, resulting in premature default that often gives rise to unfair and improper foreclosure proceedings,” according to the complaint.

    Banks and loan servicers are under scrutiny for their foreclosure practices following accusations they relied on faulty documentation to foreclose on people’s homes. Attorneys general in all 50 states have launched a coordinated investigation into the issue.

    The complaint in Dallas, filed by Kay VanHauen of Sanger, Texas, follows lawsuits by Greg Abbott, the state’s attorney general, and Ohio Attorney General Richard Cordray. They separately sued American Home, based in Coppell, Texas, for alleged violations of consumer protection laws.

    Tim Metz, a spokesman for Wilbur Ross, said yesterday Ross wasn’t available to comment. Metz didn’t return a call for comment today.

    Ross, 72, is chief executive officer of WL Ross & Co., a company that specializes in reorganizing distressed companies. He founded the New York-based company in 2000 after overseeing the bankruptcy practice at Rothschild Inc.

    Ross Acquisition

    WL Ross bought American Home from its bankrupt lender parent in 2008, and later added operations and servicing contracts from H&R Block Inc., Citigroup Inc. and Taylor, Bean & Whitaker Mortgage Corp. Servicers collect payments from homeowners, negotiate loan modifications and foreclose on properties when borrowers default.

    In an Oct. 23, 2008, interview with Bloomberg Radio, Ross said American Home was the second-largest servicer of subprime mortgages in the U.S. and was “eager” to continue expanding. The company has servicing operations in Irvine, California, Jacksonville, Florida, and Pune, India, according to its website.

    In his lawsuit, the Ohio Attorney General said American Home required borrowers to sign loan modifications, forbearance agreements and security-retention agreements that contain “illegal and unfair provisions and are unconscionably one- sided” in the company’s favor. American Home also provided “incompetent, inadequate and inefficient customer service,” lost documents and failed to respond to requests by borrowers for assistance, according to the complaint.

    ‘Predatory’ Practices

    “The acts of some mortgage servicers have gone beyond the point of being negligent — they have become predatory financial practices and in Ohio, they won’t be tolerated,” Cordray said in a statement on Nov. 5, when the lawsuit was filed.

    The Texas Attorney General said in his lawsuit that American Home fails to properly credit homeowners for payments made on their mortgages; falsely claims borrowers didn’t make payments in order to justify late fees; and refuses to accept payments allegedly because a borrower is in default, thereby adding more late charges. The result, Abbott said, is to render homeowners in default on their mortgages.

    “The cumulative effect of the foregoing acts and practices was to place more homes into foreclosure than there should have been,” Abbott said in the Aug. 30 lawsuit.

    American Home is among 30 banks and mortgage companies that Abbott wrote to on Oct. 4, demanding they halt foreclosures in the state until they ensure that foreclosures that relied on faulty documents “will be rectified” and that future foreclosures are done with “legally correct documentation.”

    ‘Tighter Controls’

    American Home has been reviewing its procedures and is placing “tighter controls” on document signing and notarization, according to the attorney general’s office. The company found “a very limited number of cases” in which a person signing a document may not have done so in the presence of a notary, according to the attorney general.

    The lawsuit by VanHauen, the Texas homeowner, mirrors allegations made by the attorney general. American Home, she said, misapplied mortgage payments on two loans in September 2008 and improperly assessed fees and other charges. After notifying American Home about the problem, the company refused to correctly apply the payments. It treated the loan as being in default and initiated foreclosure proceedings, according to the complaint.

    Insurance Charge

    American Home also charged her for a homeowner insurance policy she didn’t need and charged her for property taxes she was paying to the county, according to the complaint. VanHauen proposed that her lawsuit cover homeowners who have similar complaints against American Home.

    American Home is facing similar allegations in other lawsuits. In an April lawsuit filed in federal court in Baltimore, Michael and Ingrid Landi of Frederick, Maryland, accused American Home of falsely claiming in October 2009 that they had not made mortgage payments. American Home has asked the court to dismiss the complaint.

    In a complaint filed in May in federal court in San Diego, American Home was accused of foreclosing on a home while it was discussing a loan modification with the owner, Kenneth Coplin. Coplin said in his complaint that American Home assured him it didn’t intend to foreclose or sell the property “in an effort to conceal” its intention to “mislead” him and “steal” the property.

    The cases are Kay VanHauen v. American Home Mortgage Servicing Inc., 10-02146, U.S. District Court, Northern District of Texas (Dallas); State of Texas v. American Home Mortgage Servicing Inc., 2010-3307, District Court of El Paso County, Texas; State of Ohio v. American Home Mortgage Servicing Inc., 09-708888, Court of Common Pleas, Cuyahoga County, Ohio; Michael Landi v. American Home Mortgage Servicing Inc., 10-00921, U.S. District Court, District of Maryland (Baltimore); Kenneth Coplin v. American Home Mortgage Servicing Inc., 3:10-cv-01096, U.S. District Court, Southern District of California (San Diego).

    To contact the reporter on this story: David McLaughlin in New York at dmclaughlin9@bloomberg.net.

    To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

  27. Banksters:

    “Nothings wrong! Nothings wrong!
    There SEE, I said IT, so NOTHINGS WRONG.”

    “Besides, it’s not US. It’s the Lawyers who advised
    us. Besides it’s Aunt Fannie and Uncle FREDDIE
    who created MERS, so it’s THEIR problem, not ours!
    Stick the taxpayers why don’t ya?”

    ~~ Denial Is The Refuge Of The Arrogant And The Ignorant ~~


    Mortgage Industry Bristles at ‘Robin Hood’ Foreclosure Theories

    Oct. 27 (Bloomberg) — The mortgage industry is casting aside concern that its foreclosure practices are rife with unfixable errors, even as executives acknowledge inappropriate practices such as robo-signing, officials said at a conference.

    The “number of attorneys that signed off on” the policies used when Wall Street firms packaged mortgages into bonds means it’s likely that the trusts used to hold the debt will be able to prove they own the loans in almost all cases, said Philip Seares, a managing director at Citigroup Inc. who run its trading of whole loans.

    The industry also has faith that loan assignments handled by the Mortgage Electronic Registration System, or MERS, can’t be broadly contested, Seares and Mortgage Bankers Association President John Courson said at the group’s annual conference. They were countering claims from homeowner lawyers and academics such as Katherine Porter, a visiting professor at Harvard Law School, who say large numbers of borrowers that haven’t paid their mortgages may be able to avoid ever being foreclosed on.

    “Everybody wants to believe in this Robin Hood scenario, where everyone is going to get a free house,” Seares said yesterday during a panel discussion at the mortgage group’s conference in Atlanta. “That’s not really plausible.”

    Scrutiny of foreclosure practices intensified last month when a memo showed Ally Financial Inc.’s GMAC Mortgage unit halted evictions in 23 states to review its policies. An employee said in sworn testimony that he and his team signed 10,000 affidavits and other documents each month without checking the accuracy of files.

    Loan Servicers

    Additional loan servicers including Bank of America Corp. then began reviewing their practices, also acknowledging notaries may not have always been present during signings. Attorneys generals in all 50 states started an investigation. This month, Ally and Bank of America resumed processing defaults, saying they had fixed improper policies, would redo incorrect filings and were otherwise confident in their foreclosure work.

    They shouldn’t be, according to Porter, whose 2007 research examined practices of lenders and servicers foreclosing on bankrupt borrowers.

    “The robo-signing simply brought to light a whole array of impermissible practices,” she said in a telephone interview earlier this month. The “hardest problem” to solve, she said, stems from mortgage-bond trusts needing to have possession of both so-called promissory notes and mortgages, with full records of transfers of their ownership, to “be on solid ground when they foreclose.”

    Typical Practices

    Joshua Rosner, an analyst at New York-based Graham Fisher & Co., has also questioned whether mortgage-bond trusts did enough to take ownership of loans. Typical practices, such as filling in the names of trusts on notes and completing missing links in assignment chains only after foreclosure work has started, may encourage investors to challenge whether the debt met the requirements for delivery under bond contracts, he said.

    Ginnie Mae President Ted Tozer said he’s been given “no reason to believe” that securitizations didn’t include proper transfers of the ownership of home loans, though he plans to monitor how courts respond amid heightened scrutiny.

    “Securitizations were fine,” Tozer, whose U.S. agency guarantees securities backed by federally insured mortgages, said during a panel.

    The American Securitization Forum trade group, JPMorgan Chase & Co. bond analysts and law firm SNR Denton have also dismissed such talk. In a commentary posted on its website, SNR Denton says that most attempts to question the validity of practices can be trumped by items such as the fact that all parties involved “clearly intended” for the trusts to take ownership.

    Legal Challenges

    Legal ownership of the homeowners’ debt by the trusts is needed for foreclosures in their names, and for the trusts’ investors to qualify for tax benefits.

    MERS, which was created to limit the costs and paperwork involved in assigning mortgages to new owners by serving throughout as the party named in government records, has withstood numerous legal challenges, said Courson of the Mortgage Bankers Association.

    “Frankly, I’ve seen questions about the model but I haven’t seen anything that points me to there actually being anything wrong with it,” he said.

    Seares, who handles New York-based Citigroup’s brokering of pools of soured mortgages, said trading of the debt has remained robust amid the questioning of foreclosure policies, partly because sellers promise the paperwork will be accurate.

    Debt Demand

    While a lengthening of the time needed to complete foreclosures amid greater legal challenges by borrowers and the need to fix some items should in theory reduce prices for bad mortgages, there’s so much demand for the debt that values may be little affected, he said.

    It’s ironic that Fannie Mae and Freddie Mac, the government-supported mortgage companies that have drawn almost $150 billion of U.S. aid since being seized in 2008, would be among those the most hurt if MERS were ruled invalid, he added.

    “Fannie and Freddie were the ones who pushed MERS; pretty much everything they own is in MERS,” he said “So it’s the taxpayers that own pretty much all of the loans that are in MERS” and would pay if legal efforts challenging its validity ever succeed.

    “I have too much to do to worry about” foreclosure-document speculation being dismissed by the industry, Fannie Mae Chief Executive Officer Michael J. Williams said in an interview at the conference.

    –With assistance from Dakin Campbell in San Francisco, David Mildenberg in Charlotte, North Carolina and Lorraine Woellert in Washington. Editors: Pierre Paulden, Alan Goldstein

  28. It’s about time that the media was taking notice of this. However, we still have not entered the world of “origination fraud, forgery, felonies, illegal foreclosure, unjust enrichment, RICO”, etc. We need all of that to take the big banks down. They need to go, and it must appear that jail time is at the end of the tunnel. If we do not prosecute these criminalities, it will be back in a year or two.
    If you have problems with your pretender/lender/servicer, pls contact us. 864-241-8602 http://www.ChallengingForeclosure.com Burmese8@yahoo.com We want to help you at a reasonable price.

  29. […] This post was mentioned on Twitter by Mario, Financial Wellness. Financial Wellness said: Some homeowners say the banks tried to foreclose on a house that did not even have a mortgage. Others say they b… http://bit.ly/c56gxI […]

  30. Boycott all banks..

  31. I agree, do not bank with the banksters!!!!!!!



    BECOME VIRAL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1

  32. Another posting with clear comments by Neil Garfield.
    it could not have been said any better:

    None of us created the false value of the MBS investments. None of us created the false appraisals of the property validated by a mortgage originator that was not, as they said, acting as a lender, but rather as a broker. Neither the investors nor the borrowers created the vacuum resulting from completely fake ratings sand appraisals. Why should either the investors or the borrowers shoulder the total loss?

  33. Geithner belongs in jail. Another criminal employed in the government.

  34. New Political party

    Stop your Mortgage Payment Now

    I am with you BSE.

    There is a political party now

    The rent is to damn high


    Cehck it out

  35. I think they even infiltrated the community banks Wescom is a credit union and they are foreclosing on my friends just like the big banksters.

    Wow Bank of America is all over the news huffingtonpost.com and cnn/money is starting to finally get it.


  36. Another easy fix. Use the credit uinions and anything but the Big Named Banks. Pay cash, do not allow them to use your savings or checking account for short term investments. Shut these S.O.Bs off.


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