A separate report from the Congressional Oversight Panel, also being released Tuesday, raises questions about whether improper document transfers could create additional liabilities for the biggest U.S. banks. The consequences could be “severe,” the report said, “if documentation problems prove to be pervasive and, more importantly, throw into doubt the ownership of not only foreclosed properties but also pooled mortgages.”



Bair has some concerns about recent foreclosure process problems and reviews due to some loss-sharing arrangements the FDIC is in, even though the agency is not the primary regulator in the matter.

She told the Securities Industry and Financial Markets Association meeting in New York that the matter is a “serious problem” that may go beyond the initial affidavit-related concerns.

Bair, who said she plans to step down from her post when her term ends, said while not all information is in from the file-level reviews major servicers are doing yet, it currently looks like there could be title transfer concerns.

In addition, she said there could be problems with mortgage modifications being consistent with the rules in cases where servicers that participate in the Home Affordable Modification Program are involved.

While the FDIC is not the primary regulator in the matter, Bair said she is suggesting to those that are that the issue be handled in a matter that does not slow the foreclosure process down too much.

“The market does at some point have to clear,” she said.


The securitization-industry defense doesn’t address the problem of “robo-signing,” in which employees falsely asserted that they had personally reviewed the details of foreclosure cases.

Still, the report is aimed at countering claims made by critics that the rush to feed demand for securities led banks to cut corners in assigning and tracking ownership of mortgages, just as they did, critics claim, when buying and making mortgage loans.

29 Responses

  1. Usedcarguy would you do me the honor of chatting with me a bit via email? I have my 2nd trustee sale scheduled for dec 15 and I am trying to develop some strategy. Thanks a lot. Intelligentmedia at gmail dot com

  2. Mr. Bryl,
    Bravo for posting this .As a homeowner going through foreclosure I love your posting . Thanks

  3. usedkarguy,
    Kudos, We’re all proud of you. May God watch over you.

  4. Gwen,

    SOME state courts are more favorable to borrowers than to the banks. In those states, the banks try to force things to federal courts all the time.

    Then there is my state. CA state courts are VERY pro-banker.

    That is the only reasoning that I know of that fits.

  5. BOA/BAC removed my quiet title and state law claims to fed court based upon a claim of diversity. I did not have any federal claims which would have been a basis for removal sticking to state claims. When they did not remove within the 30 day time period I thought I was safe–WRONG. BOA removed after 30 day time period on the grounds they did not know there was “diversity” within the 30 day time period. The problem with that position was that the note on the house was 300,000 which is enough to claim diversity. Also, they flat out lied that they received a demand letter to settle outside the 30 day time period. I had a cetified receipt showing they had the demand letter 5 days pror to their answer. Despite bringing these matters to the federal judge’s attention, he granted their removal! Now I have filed an amended complaint dropping one claim (hamp) with prejudice as I don’t think it is viable based upon developing case law –at least in Mo and I don’t want a bad decision on this issue–and one claim –fraud without prejudice to join it with the other state law claims that I raised in state court where i now have claims involved one defendant who defeats diversity (the mo trustee). MERS actually agreed with me that amendment was appropriate as well as dismissal and inferntially inferred that once the case is amended, it is only an “in rem”action and should be remanded. BOA is furious and is yelling and screaming. It will be interesting to see what the trial court does in federal court. BOA specifically told me that they wantd to avoid state court “at all costs” and that’s BOA position. Why does anyone think that BOA is wanting to avoid state court???? I’ve tossed this around and can’t come up with a rational explanation–but then again BOA is not rational!

  6. Here is the latest masterpiece of Judge Schack on robo-signing:


  7. @ Usedkarguy,

    Awesome!!! I’m glad to hear it. Keep up the good fight. Your efforts are not in vain.

    My family just offered me some funds to help me fight so I got good news today too.

  8. Thanks, A-MAN. Yes, stopping HB3808 is quite an accomplishment when you think about who is lined up against us. We really are fighting “MONEY AND POWER”. The rich and powerful are pulling out all the stops to further this fraud. They will not win.

    It’s days like this that make it great to be AN AMERICAN! The power IS with the people. Don’t forget it!

  9. I am happy for you usedkarguy. what state are you in?


    Remember the Used Kars are stronger than the new plastic cars

    made my evening the vote today was another victory.

  10. Hey! Kickboxer! They stopped my sheriff’s sale, AGAIN! Court clerk called to cancel my motion hearing on my MOTION TO VACATE since there was no sale pending. “Keep it on the docket!”
    But, sir, plaintiffs stated you have “reached an accord” and a sale would not occur.
    “NO, ma’am, I SELL Accords. I have not spoken with the plaintiff nor their attorney, so I don’t know who they settled with, but it wasn’t ME! Keep it on the docket, please. And I’ll see you on the date we’ve set.”

    And another interesting turn; State AG called me this morning on my request for the names of some Superior Court judges I could approach for a TRO or Writ of Mandamus (desperation makes you ask people things you would never otherwise dream of). She mentioned that, because “people like you are submitting these docs and affidavits, we are accumulating evidence that we otherwise would not have. And by the way, your motion was quite good!”
    “Thanks!” I replied. “You made my day!”


  11. http://foreclosureblues.wordpress.com/2010/11/17/great-real-estate-data-from-socal-and-its-not-pretty/

    At Hearing, Lawmakers Ask Experts for Foreclosure Crisis Solutions
    Posted on November 17, 2010 by Foreclosureblues
    At Hearing, Lawmakers Ask Experts for Foreclosure Crisis Solutions
    Today, November 17, 2010, 3 hours agoGo to full article

    by Marian Wang

    At yesterday’s Senate Banking Committee hearing, three experts in the law—a state attorney general, a legal services attorney, and a law professor—agreed on this about the mortgage servicing industry: The problems aren’t just technical, and they aren’t just with robo-signing.

    For the banks to characterize the situation in such simplified terms “shows a certain type of arrogance,” said Iowa Attorney General Tom Miller, the point man for a 50-state investigation into flawed foreclosure practices.

    Diane Thompson, a legal services attorney with the National Consumer Law Center, told the panel that errors in foreclosures are “a widespread problem throughout the country.” She estimated that, in the cases she’s seen, about half of the defaults were caused by fees that banks themselves stacked on struggling homeowners. A smaller percentage, she estimated, were cases in which homeowners were not in default at all.

    We’ve tracked the problems with banks’ servicing of mortgage loans, both in the foreclosure process and in the loan-modification process. Banks—confronted with employee depositions that show proper processing procedures were not followed—have said that they believe no wrongful foreclosures have occurred because regardless of the procedural errors, the underlying facts in the documents were accurate. Some have stated in calls with investors that they hope for a quick resolution to the controversy and are refiling the questionable documents.

    But when Senate Banking Committee lawmakers asked the three experts about the best possible solutions to the problems, they suggested some that went much further:

    1) Fund quality foreclosure-mediation programs and legal services for homeowners facing foreclosure. The Dodd-Frank financial reform bill authorized $35 million for programs providing legal assistance to homeowners fighting foreclosure. According to Thompson, “we urgently need that funding,” but it has not yet been appropriated. She also noted that foreclosure-mediation programs like the ones in Philadelphia and New York—which she said are reducing foreclosures by about 50 percent—have produced positive results and should also receive better funding.

    2) Regulate the fees banks are heaping on homeowners. “There’s been a huge abuse” with forced place insurance, Miller told the committee. American Banker, in a piece this week, noted that “astronomically priced” insurance policies—purchased to protect investors—impose costs on investors and add to homeowners’ debts. Bank of America and JPMorgan Chase executives at the hearing denied that their companies were trying to maximize fee revenue and stated that it was in their best interest to keep homeowners in their homes and paying off their loans.

    3) Solve the dual track of concurrent foreclosure and loan modification proceedings. We’ve noted that under the government’s loan modification program, servicers are forbidden from foreclosing while loan modifications are pending, but many homeowners have found the practice is still occurring. On this point, Bank of America’s top mortgage official, Barbara Desoer, told the panel her company is “very open to discussing changes for the existing pipeline that’s going through the dual track.” However, David Lowman, JPMorgan Chase’s top mortgage official, expressed some hesitation about such changes. “I think we have to be careful with that,” he told the panel.

    4) Take servicers out of the loan modification process altogether. “Servicers were never in the loan modification business,” argued Georgetown University Law Center associate law professor Adam Levitin. “They’re in the transaction processing business.” Levitin suggested creating a federally administered loan modification program with a system of triage, much like in bankruptcy court: Homeowners who absolutely can’t pay would get an expedited foreclosure proceeding; homeowners who can pay would be given “a cookie cutter mod” with principal reduction, he said. As we’ve noted, the government’s loan modification program has resulted in few permanent modifications, but data suggest banks’ in-house programs are even worse.

    Bank of America CEO Brian Moynihan has called for a quick settlement of the 50-state attorney general probe. CNBC reported yesterday, citing anonymous sources, that banks and state attorneys general were “nearing a settlement,” but when asked by lawmakers, Iowa Attorney General Miller said a settlement is still months away.

  12. http://www.propublica.org/blog/item/govt-watchdog-says-treasurys-dismissal-of-foreclosure-scandal-is-premature

    The ProPublica Blog
    Gov’t Watchdog Says Treasury’s Dismissal of Foreclosure Scandal Is ‘Premature’

    by Marian Wang
    ProPublica, Nov. 17, 2010, 4:04 p.m.

    * Republish
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    In late October, Treasury official Phyllis Caldwell appeared before the government’s bailout watchdog panel and stated that the foreclosure scandal posed no “systemic risk” to the broader financial system

    In its own report released on Tuesday, however, the Congressional Oversight Panel challenged Treasury’s position, asking the department to “explain why it sees no danger.” From the report [1]:

    Treasury has claimed that based on evidence to date, mortgage-related problems currently pose no danger to the financial system, but in light of the extensive uncertainties in the market today, Treasury’s assertions appear premature.

    For its part, the Congressional Oversight Panel isn’t convinced that the risks are as small as the Treasury Department and the banks say it is. Here’s how it lays out the best-case, worst-case scenarios:

    In the best-case scenario, concerns about mortgage documentation irregularities may prove overblown. In this view, which has been embraced by the financial industry, a handful of employees failed to follow procedures in signing foreclosure-related affidavits, but the facts underlying the affidavits are demonstrably accurate. Foreclosures could proceed as soon as the invalid affidavits are replaced with properly executed paperwork.

    The worst-case scenario is considerably grimmer. In this view, which has been articulated by academics and homeowner advocates, the “robo-signing” of affidavits served to cover up the fact that loan servicers cannot demonstrate the facts required to conduct a lawful foreclosure. In essence, banks may be unable to prove that they own the mortgage loans they claim to own. The risk stems from the possibility that the rapid growth of mortgage securitization outpaced the ability of the legal and financial system to track mortgage loan ownership.

    Adam Levitin, an associate law professor at Georgetown University Law Center, expressed similar concerns to lawmakers, noting that questions about whether banks properly documented transfers of mortgage ownership could have “dire systemic consequences.”

    As we’ve noted, establishing who owns the mortgage loan is key to figuring out who has the right to foreclose [2]. And if this chart [3] is any indication, figuring that out is not a simple task. The blog ZeroHedge, which posted the chart, noted that it took the homeowner more than a year to sort out—and he performs securitization audits for a living. (The American Securitization Forum, an industry trade group, issued a paper this week defending its practices [4].)

    Caldwell, the Treasury’s housing rescue chief, is scheduled to testify tomorrow [5] before House lawmakers in a hearing on robo-signing and issues of mortgage loan ownership.

    In a statement to the Associated Press, the Treasury Department said it continues to “monitor the situation closely” and believes that “the reported behavior within the mortgage servicer industry is simply unacceptable [6].”

    1. http://www.propublica.org/documents/item/congressional-oversight-panel-report-on-mortgage-irregularities
    2. http://www.propublica.org/blog/item/ahead-of-congressional-hearings-robo-signer-scrutiny-spreads
    3. http://www.zerohedge.com/article/just-when-you-thought-you-knew-something-about-mortgage-securitizations
    4. http://www.americansecuritization.com/story.aspx?id=4492
    5. http://financialservices.house.gov/hearings/hearingDetails.aspx?newsid=1376
    6. http://www.google.com/hostednews/ap/article/ALeqM5hXTW0Jc6PzC6JDS4lJxz02_R7KUg?docId=30ca87a69e0c47348ddd7e1f25b9411f

  13. http://market-ticker.org/akcs-www?singlepost=2269589

    HR 3808 Dies

    Veto upheld.

    The link will be here:


    Most Democrats voted to uphold the Veto.

    Nearly all Republicans voted to override.


  14. • Bank of America wants the case moved to federal court because McLaughlin and her attorney, Daniel McGookey, are claiming the bank violated the Fair Debt Collections Practices Act, the Ohio Consumer Sales Practices Act, Ohio’s RICO Act and Ohio common law, which are all federal offenses. Bank of America also states because the judgment of the suit is more than $75,000, the action should be shifted to federal court. McGookey said [] he believed the case should remain in Erie County Common Pleas Court.(1)


  15. people making their payments should send in a QWR. and continue making payments

  16. That’s the part I don’t understand, how can you get a modification if you don’t know WHO has the right to give you a modification?
    Does this mean that people signed up, paid good money every month according to the agreement, and were then turned down for the modification BECAUSE THEY WERE NOT PAYING THE RIGHT COMPANY?
    Was this just another scam to rip off more money from desperate people? What guarantee is given when starting HAMP OR HARP or whatever, that this is the true owner of your note?
    That’s a crying shame! People are willing to pay, trying to play by the rules and be fair, but in the end still throwing more hard earned money down another bottomless pit!
    The galling part is that even President Obama still believes that most of us are “deadbeats” and not worth helping or being treated fairly!
    Do you think Washington and Jefferson would have sat quietly by if this had happened to them?

  17. Dying Truth: Thank you for posting that. I just sent her a comment thanking her for speaking out on the foreclosure fraud & let her know we could use political allies like her to help us fight this fraud.

  18. NEIL!!,
    Interesting ordeal in your neck of the woods with that AZ State Lawmaker Reagan, she asked who exactly owned her note and the Bank sued her in U.S. District Court stating to the judge she was trying to rescind her loan. >


  19. Trust Is At An All-Time Low

    Unfortunately, the public’s trust in government as a whole, the justice system, bankers, and the corporate media are at all-time lows.


    Partly because the government has been repeatedly caught lying.

    The government repeatedly said about the subprime crisis, banking crisis, debt crisis, mortgage crisis, and other economic crises:

    “It’s contained”

    “We’ve got it under control”

    “We’re going to fix it”.

    It wasn’t, and they didn’t … and so people have lost trust in the government.

    But it’s not just the economy. The government also got caught making false claims that:

    Iraq had weapons of mass destruction, had a hand in 9/11 (and see this) and carried out the the anthrax attacks

    9/11 wasn’t foreseeable

    That the government doesn’t spy on Americans (it did even before 9/11), Americans don’t torture, etc.

    But there’s another important reason for Americans’ lack of trust in our government and our economy: the failure to prosecute the criminals.

    Prosecuting the Criminals and Launching REAL Investigations Is Necessary to Restore Trust

    One of the leading business schools in America – the Wharton School of Business – has written an essay on the psychological causes and solutions to the economic crisis. Wharton points out that restoring trust is the key to recovery, and that trust cannot be restored until wrongdoers are held accountable:

    According to David M. Sachs, a training and supervision analyst at the Psychoanalytic Center of Philadelphia, the crisis today is not one of confidence, but one of trust. “Abusive financial practices were unchecked by personal moral controls that prohibit individual criminal behavior, as in the case of [Bernard] Madoff, and by complex financial manipulations, as in the case of AIG.” The public, expecting to be protected from such abuse, has suffered a trauma of loss similar to that after 9/11. “Normal expectations of what is safe and dependable were abruptly shattered,” Sachs noted. “As is typical of post-traumatic states, planning for the future could not be based on old assumptions about what is safe and what is dangerous. A radical reversal of how to be gratified occurred.”

    People now feel more gratified saving money than spending it, Sachs suggested. They have trouble trusting promises from the government because they feel the government has let them down.

    He framed his argument with a fictional patient named Betty Q. Public, a librarian with two teenage children and a husband, John, who had recently lost his job. “She felt betrayed because she and her husband had invested conservatively and were double-crossed by dishonest, greedy businessmen, and now she distrusted the government that had failed to protect them from corporate dishonesty. Not only that, but she had little trust in things turning around soon enough to enable her and her husband to accomplish their previous goals.

    “By no means a sophisticated economist, she knew … that some people had become fantastically wealthy by misusing other people’s money — hers included,” Sachs said.

    “In short, John and Betty had done everything right and were being punished, while the dishonest people were going unpunished.”

    Helping an individual recover from a traumatic experience provides a useful analogy for understanding how to help the economy recover from its own traumatic experience, Sachs pointed out. The public will need to “hold the perpetrators of the economic disaster responsible and take what actions they can to prevent them from harming the economy again.” In addition, the public will have to see proof that government and business leaders can behave responsibly before they will trust them again, he argued.

    Note that Sachs urges “hold[ing] the perpetrators of the economic disaster responsible.” In other words, just “looking forward” and promising to do things differently isn’t enough.

    Many high-level economists agree.

    Economists such as William Black and James Galbraith have repeatedly said that we cannot solve the economic crisis unless we throw the criminals who committed fraud in jail.

    Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future.

    Nobel prize winning economists Joseph Stiglitz and George Akerlof agree.

    Indeed, polls show that:

    Americans want investigations into torture and wireless wiretapping

    Most Americans believe that the Iraq war was a mistake. At least half of all Americans wanted Congress to impeach President Bush if he lied about the Iraq war

    Hundreds of millions of Americans think that there was a cover up about 9/11, and want a thorough investigation

    Americans want those who committed financial fraud to be prosecuted

    Remember, distrust in the political actions of those in Washington D.C. undermines the economy. Therefore, the economy will not recover until the economic criminals are prosecuted, and there are real investigations into 9/11 (even the 9/11 Commissioners themselves think there should be more investigation, the Iraq war, torture, spying on Americans and other government failures.

    More here:


  20. what about the problem of servicers like gmac duping borrowers into signing loan mods that name gmac as the lender when gmac cant produce a shred of evidence they were a lender in any sense of the word? they take advantage of borrowers situations by claiming to help them, as the servicer of the loan, with a loan mod on behalf of the lender, and the borrower unknowingly gives a new mortgage and note to someone who was never their lender….GMAC. now that gmac and mers have fresh paperwork through the mod they assign the note and mortgage to a trust (in my case a trust that closed years ago) giving the trust paperwork to lay claim to the mortgage when none existed before. the trust then crawls out of the woodwork, in my case the day after the assignment, and starts foreclosure. its such an unbelievable scam they have going. gmac was never my lender, refuses to prove how they came to be my lender and denies duping me into giving them lender status in the mod. unbeknownst to me my real lender went belly up in bankruptcy 4 years ago and apparently forgot to assign my mortgage to anyone. theres nothing on record showing they ever assigned it. i have to laugh or else i’d cry. its disgusting. living in a non-judicial state(mass) they are getting away with this day after day. they can steal from everyone and no one is watching the cookie jar.

  21. Separation of the Note from the Deed of Trust = Null = Quiet Title!

    Tell the Governor!

  22. My “luke-warmness” on Bruce Marks/NACA just heated up a notch:


    Would have LOVED to have been a fly on that wall.

  23. “report is aimed at countering claims made by critics that the rush to feed demand for securities led banks to cut corners ”

    the same talking head syndrome … cutting corners is NOT intentionally killing the document trail to obfuscate the robbery that the secondary market enabled ,by the conflict of interest , each downstream party ‘needed or had to rely ” on the previous party, this all fails at the onset . IT WAS A SCHEME,

    scheme |skēm|
    a large-scale systematic plan or arrangement for attaining some particular object or putting a particular idea into effect : a clever marketing scheme.
    • a secret or underhanded plan; a plot : police uncovered a scheme to steal paintings worth more than $250,000.
    • a particular ordered system or arrangement : a classical rhyme scheme.
    verb [ intrans. ]
    make plans, esp. in a devious way or with intent to do something illegal or wrong : [with infinitive ] he schemed to bring about the collapse of the government.

    a scheme to steal equity of the middle-class & collective country thru & with the knowing help of OUR OLD GOV! “OLD “BEING OR PREVIOUS ” THE OPERATIVE WORD.

  24. George Babcock–like the quote. My motto is “I got 99 problems–bein’ a bitch ain’t one.” That or “if you want blood, you got it!” Figurative blood, of course.

  25. Look to the fnma “guidelines” for the answer to this question. Every “player” in the GSE Business Model must must warrant and represent following the guides (designed to protect the saftey and soundness issues of the mbss).

  26. This post deals with an issue I have been concerned with ever since I started looking at this blog last December and looking into quiet title and declaratory judgment actions as a former trial attorney. My own education started when I started to have problems with a loan mod I thought I had worked out with Wilshire, who turned out to be the servicer for old countrywide loans. In Feb 2010 after I expected my loan mod paperwork to be forwarded “any day” having completed the terms of the mod, I got a letter from BOA/BAC saying basically “you are starting over”. I started to investigate the whole situation and was put in touch w/Dave Krieger who got me very interested. I realized that neither Wilshire nor BOA/BAC had any authority whatsoever under the paperwork on file at the recorder’s office on my loa to modify anything whatsoever. When I started to raise this issue with BOA/BAC I got “nada”. No response whatsoever which increasingly worried me. When I started to get contradictory information on the telephone and in writing, and no responses to numerous inquuiries sent certified mail, I sued. Suddenly they wanted (thru their attorneys) to modify. However, when I started to raise the issues of modification and their right to do so–they refused to answer and still refuse to answer even though I have raised the issue in settlement negotiations that this has to be resolved as well as the breach of title found by Chicago title. Still “nada”. No settlement with these banks or MER or the trustees should ever be considered without “quieting the title” and getting a declartory judgment. To do so means your title will never be correct. We can’t just “axe” 300 years of property law by waiving a wand. We can’t ignore the problem by some all encompassing piece of legislation This has to be done case by case. Its tiresome, time consuming but absolutely necessary and it should be at the cost of the banks, MERS, the trustees . By the way one of the trustees I sued just answered and said unless the Deed of Trust lets me sue them, I can’t sue them for anything! Anyone got any theories on this? I find that incredulous. “Im in Missouri”. So, we have to hold these folks feet to the fire and get these titles straightened out. But most of all doing any loan mod, or reduction of principle, with someon we don’t even know owns the note or has authorty to modify the note is insane. It just makes the situation worse.

  27. damn the torpedos, full speed ahead

  28. Sorry about the statement. In a case we are working on the originator endorsed the note to the trustee and then tried to assign the note and D/T or mortgage to the trustee. The Mortgage purchase agreement seems to say: That the originator (seller) is assigning the mortgage documents to the Depositor (Purchaser) so why is the note and mortgge assigned directly from the originator to the Trustee. Can anyone answer that one?

  29. This is confusing is it not? The pooling agreements, which contain the Mortgage Purchase Agreements, seem to me to reveal that the originator endorsed the note over to the Trustee, when in fact the Note and the Deed of trust or mortgage should have been assigned by the Depositor to the trustee. Are they talking about a possible error in not assigning the note and mortgage to the Depositor and then from the depositor to the trustee, on behalf of the certificate holders? Yes this could be a huge problem for the banks, etc.

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