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


I know we are all tied of waiting and the wheels of justice grind slowly. But here is a short video showing that there are people in government that completely “get it.” The tide has turned. But the battle is far from over.



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


EDITOR’S NOTE: The committees should be interviewing title agents, closing agents, title examiners and independent experts in real property law (Professors of Law with no ties to banking industry) with three basic questions to start the correct path of inquiry — stating as a premise that the context of the questions are strictly within the scope of loan receivables that were purportedly securitized:

  1. Were the mortgages valid encumbrances when they were originated and are they valid encumbrances now?

  2. Did the obligation of the borrower originate from acceptance of the loan benefits or the execution of the note and mortgage?

  3. What is the description of a party who could be called the mortgagee under a mortgage deed or beneficiary under a deed of trust?

As far as the banks are concerned, if you want to ask meaningful questions that would, if answered, provide Congress with real facts and information, these are the questions that should be asked:

  1. Provide us with some real life examples with a letter of opinion from a qualified real estate attorney or law professor, in which you trace the chain of title of a securitized mortgage transaction beginning with the original execution of the closing documents, the parties and terms on those documents and ending with a party possessing the power to execute a satisfaction of mortgage, a reconveyance, the submission of a credit bid at a foreclosure auction, or the full power of modification of any or all terms of a mortgage.

  2. What is the financial incentive for any servicer, if it had the power, to modify mortgages?

  3. Is there a conflict of interest between the servicer and the bank that owns the servicer in connection with the potential modification of mortgages?

  4. If the mortgage of record is void or unenforceable, what do you expect Congress to do about it?

  • I make no bones about it. I believe that the originating documents were fatally defective and that those defects were supplemented and compounded by the behavior of the so-called securitization intermediaries who were so busy splitting up the money they had no interest in covering their tracks with the proper paperwork. The result is that, in my opinion, there is no mortgage or deed of trust that can be enforced and it should be expunged from the title records.

  • However, that does not relieve the borrower from an obligation to repay money. That obligation is presently unsecured.

  • The question that must actually be answered is the one that the banks are avoiding at all costs: the identity of  party who can be called a creditor under terms and conditions that any 5 year old would understand. And then the second question is what is left of the obligation from the borrower and what claims do the investors have against the investment banks.

  • The two are related because it is entirely possible that the investment banks made more money than the investors advanced in a fraudulent, potentially criminal scheme.

  • If the investors are made whole by their claims against the banks what is left of the obligation? If there is some obligation left, how should that be computed and should the newly found “creditor” be allowed to impose an equitable lien for the obligation?

  • Is that a possible solution to principal correction, appraisal fraud, failure to perfect the lien (intentionally) and the deception of the homeowners and investors?


The question is whether it will be a meaningful resolution that will make a real difference or a missed opportunity. It’s not entirely clear at this point.” – AG Cordray

The banks hope to buy off the attorneys general with money, perhaps to establish a compensation fund for victims, Mr. Levitin said. That, he said, would prevent attorneys general from “digging deeper and uncovering more rot in the mortgage system. My fear is that the banks’ calculus is correct.”
November 17, 2010

Changing the face of foreclosure in America will take some time, several state attorneys general said Wednesday, cautioning that an agreement with major lenders over revamped foreclosure practices was not imminent.

“We want to move as quickly as possibly but it has to be done right,” said Roy Cooper, the attorney general of North Carolina. “We have plowed this ground before.”

Ever since the law enforcement officials from all 50 states signed on last month to a highly publicized investigation of big mortgage lenders, there has been a public tug of war.

The banks, who have been subjected to bad publicity, have played down the investigation and want to see it end as quickly as possible. The state attorneys general, however, say that there is an opportunity to fundamentally change the way banks deal with defaulting borrowers so that more people can stay in their homes by modifying their mortgages, and that they will take the time needed.

“The large banks say they are doing everything they can to avoid foreclosure, but that is not the reality on the ground,” said Patrick Madigan, an assistant attorney general in Iowa who is a lead figure in the investigation. “The question is, Why?”

Mr. Madigan mentioned some theories, saying any or all could be true: “Is it the fact that the current servicing system was not designed to do large numbers of loan modifications, is it being understaffed, incompetence or the servicers having the wrong financial incentives?”

The major lenders are scheduled to appear on Capitol Hill on Thursday for the second hearing this week on their foreclosure procedures. The pressure to reach a settlement with the attorneys general will likely intensify after the hearing, which will be led by Representative Maxine Waters, a Democrat from California and outspoken critic of the mortgage lending industry.

But quick fixes are not likely, the attorneys general said. Richard Cordray, the Ohio attorney general who lost his bid for re-election this month, was hesitant to predict a significant outcome.

“Something will come of this, no question,” Mr. Cordray said of the inquiry. “The question is whether it will be a meaningful resolution that will make a real difference or a missed opportunity. It’s not entirely clear at this point.”

Some experts were willing to go even further, saying the lenders were impervious to change. For 18 months, the Obama administration has promoted modifications that would keep families in their homes over foreclosures that would kick them out. The programs have had some success but ultimately have done little to stem the tide.

“The banks’ act was to put their tail between their legs, act contrite before Congress and change nothing,” said Adam Levitin, an associate profesor of law at Georgetown University who testified before Congress on Tuesday and will testify again on Thursday.

The banks hope to buy off the attorneys general with money, perhaps to establish a compensation fund for victims, Mr. Levitin said. That, he said, would prevent attorneys general from “digging deeper and uncovering more rot in the mortgage system. My fear is that the banks’ calculus is correct.”

There were fresh reports on Wednesday that the foreclosure situation was deteriorating. Another 35,000 households entered foreclosure in October, the data company Lender Processing Service said, despite freezes instituted by lenders as they reviewed their practices. About 4.3 million households are either in serious default or in foreclosure.

The housing market also showed fresh signs of trouble. CoreLogic, a data company, said Wednesday that home prices fell 2.8 percent in the last year. Earlier this week, another information company, DataQuick, said sales in the Southern California market had dropped 24 percent in October from last year.

“We agree with the attorneys general that a housing market recovery is vital to restoring economic growth, and the sooner we resolve the outstanding issues, the better,” said Lawrence Di Rita, a Bank of America spokesman.

For the banks, the immediate cost of halting foreclosure is not significant. Brian Moynihan, the chief executive of Bank of America, said it totaled $10 million to $20 million a month. Bank of America has frozen foreclosures in 27 states.

A far greater threat to the broader financial system is the possibility that investors will force financial institutions to buy back hundreds of billions of dollars in soured mortgages, according to a Congressional Research Service report prepared for Thursday’s hearing and obtained by The New York Times.

Loan buybacks could shift $425 billion in losses on mortgage-backed securities from the investors that owned them to the banks that helped originate or assemble the securities, according to the report, far more than most estimates floated on Wall Street.

“Loan buybacks have the potential to cause the banking system to become undercapitalized once again or to cause individual large banks to fail,” the report says, “even if that outcome is unlikely.”

While bank officials agree that a settlement with the attorneys general is not in the making anytime soon, they remain eager to put the controversy behind them. Bank of America’s reputation, in particular, was hammered last month as the uproar grew over claims that the industry had pursued foreclosures in cases where documents were lost, missing or barely reviewed before they were signed by bank officials, a practice known as robo-signing.

What is more, as the nation’s largest mortgage servicer — it handles roughly 14 million home loans, or one in five American mortgages — it has more to lose as the investigation drags on. The majority of its troubled portfolio was picked up in 2008 when it bought Countrywide, whose aggressive subprime lending practices made it a symbol of industry excess.

“What makes it a little more pressing for Bank of America is their level of exposure,” said Guy Cecala, publisher of Inside Mortgage Finance. “Whatever the issue is, Bank of America seems to have a target on its back from people looking to be compensated for losses.”

As the beneficiary of two government bailouts, both repaid, it has been eager to maintain good relations with regulators.

Representatives from Bank of America and the other main players in the mortgage servicing industry — Ally Financial, JPMorgan Chase, Wells Fargo and Citigroup — will testify at Thursday’s hearing. A top mortgage executive at Citi plans to testify that the company identified 14,000 foreclosure cases where errors may have been made, including 4,000 where a notary may have been absent when they were signed. The bank, which until now has defended its processes, still insists that in each case the original decision to foreclose was correct and that the paperwork will be refiled.

Mr. Levitin, the Georgetown professor, will argue in Thursday’s testimony that the business model at servicing giants like Bank of America and Wells Fargo “encourages them to cut cut costs wherever possible, even if this involves cutting corners on legal requirements, and to lard on junk fees and in-sourced expenses at inflated prices.” That results in foreclosure, rather than modification, being a better bet for servicers.

In removing such incentives, the attorneys general have the task of encouraging a new system that changes behavior. “We are trying to create a paradigm shift in the way foreclosures are handled,” said Mr. Madigan, the assistant Iowa attorney general.


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


EDITOR’S NOTE: In the first real step toward reality, the megabanks have entered talks with the attorneys general of all 50 states to establish the fund. The primary focus at this point appears to be victims of fraudulent foreclosure. There is no precedent for this in banking history anywhere. It is similar to BP’s payments to spill victims or Germany’s payment to survivors of the holocaust. Apparently for all their bravado, the megabanks are getting the picture and the states are getting a taste for the lifeblood they need pumped back into the economy. —- Neil Garfield

States, mortgage lenders in talks over fund for borrowers in foreclosure mess

Nov. 16 (Bloomberg) — New York City Comptroller John Liu discusses his request, on behalf of the city’s Pension Funds, to directors at Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. to conduct independent audits of their banks’ mortgage and foreclosure practices. Liu speaks with Carol Massar on Bloomberg Television’s “In the Loop With Betty Liu.” (Source: Bloomberg)

Washington Post Staff Writers
Wednesday, November 17, 2010; 12:03 AM

State attorneys general and the country’s biggest lenders are negotiating to create a nationwide fund to compensate borrowers who can prove they lost their home in an improper foreclosure, state and industry officials said.

States, mortgage lenders in talks over fund for borrowers in foreclosure mess
  • Liu Calls for Independent Audit of Foreclosure Practices
  • Don’t underestimate foreclosure crisis, watchdog warns
  • Foreclosure Nation
  • Full coverage: Foreclosure system in chaos
  • Q and A: Head of probe says victims of wrongful foreclosure should get compensation
  • View All Items in This Story
    View Only Top Items in This Story

    The fund would present a solution for both sides, helping banks avoid lengthy and costly court challenges from homeowners and aiding state investigators in their efforts to seek relief for homeowners who were wronged, the officials said.

    Discussions are continuing over the size of the fund, who would administer it and what kind of proof homeowners would have to present to get access to the money. But there is a consensus between the lenders and state officials that some sort of financial remedy is necessary to avoid the turmoil that could result from homeowner challenges.

    Any settlement between the banks and attorneys general almost certainly would force lenders to put more resources into modifying the loans of homeowners who missed their payments, rather than rushing toward foreclosures, state officials said. The banks could also be barred from foreclosing on homeowners while simultaneously negotiating mortgage modifications.

    The fund, the first of its kind in the mortgage industry, would mirror victim-compensation efforts set up in recent years in response to the BP oil spill in the Gulf of Mexico, the shootings at Virginia Tech and the terrorist attacks of Sept. 11, 2001. Those were all administered by a specially appointed czar, Kenneth Feinberg, who had the tough task of figuring out what each victim should receive.

    Iowa Attorney General Tom Miller, who is leading a joint, 50-state investigation, declined to comment Tuesday on the specifics of the group’s negotiations with the banks but said that hammering out details could delay a final agreement for a few months.

    Miller said that’s because the remedies being discussed go far beyond the problem of “robo-signing” and into deeper problems facing the mortgage servicing industry.

    “We want to be more creative and figure out a way to make the system better,” Miller said in an interview. “For instance, rather than having them pay a huge amount of fines, much of that money [could instead] go to adequate resources to make this work.”

    A quick settlement may be the best solution for the industry, homeowners and state and federal investigators, given the uncertainty the foreclosure mess has cast on the health of the banks and, more broadly, the housing market, officials said.

    “It is in everyone’s best interest to get this settled and behind us,” Bank of America chief executive Brian Moynihan said Tuesday at a financial services conference in New York.

    Biggest firms targeted

    The attorneys general have been negotiating with each bank separately but pressing for similar terms. The state officials have been focusing on the three largest servicers – Bank of America, J.P. Morgan Chase and Wells Fargo – hoping agreements with those companies will serve as a model for others.

    Each side sees a fund for distressed homeowners working differently. Among the most contentious issues, besides how much each lender would contribute, are the time period to be included and who would decide which homeowners deserved access to the fund.

    Another unresolved issue is whether banks will reduce the principal for borrowers whose homes have dropped dramatically in value over the past few years. The financial industry last year fought against legislation that would allow bankruptcy judges to order such modifications.

    Even as they acknowledged some problems in their foreclosure processes, executives from the biggest banks have argued that they are properly seizing homes from borrowers who missed payments. But the courts are still grappling with whether the sloppy or forged paperwork in many foreclosures amounted to fraud and whether those cases should be thrown out.

    At a hearing of the Senate banking committee Tuesday, Chairman Christopher J. Dodd (D-Conn.) took banks to the task.

    “Many in the industry were too quick to call these problems ‘technical’ and to insist that nobody is losing a home to foreclosure without cause,” Dodd said.

    He called all parties involved to work together to “finally put an end to the housing crisis.”

    “Even the industry now acknowledges that the current mortgage-servicing business model is broken and is simply not equipped to deal with the current crisis,” Dodd said.

    Added Sen. Jon Tester (D-Mont.): “I’m going to remain very concerned about the scope of this problem, the impact it could have on our financial system and on the housing market. . . . It strikes me that some of the biggest servicers have been a little bit glib about [the] potential magnitude of these risks.”

    Frustration at hearing

    The frustration wasn’t confined to the dais. As David Lowman, chief executive of Chase Home Lending, delivered prepared remarks saying how serious his company is taking the foreclosure issues, how executives “regret the errors in our affidavit process” and have “worked hard to correct these issues,” a protestor in the audience rose and shouted, “That’s a lie! That’s a lie!”

    Another unfurled a banner reading “Dave Lowman lies.”

    One senator after another recounted tales of homeowners expressing their frustration with the mortgage-modification process. Many have been confused by the fact that even as they try to negotiate modifications with servicers, the foreclosure cases pending against them continue unabated.

    Miller, the Iowa attorney general, said Tuesday that the multi-state probe would seek to end such practices. He added that he and his staff in Des Moines had met twice with officials from Bank of America and that such negotiations would continue with that firm and others, such as J.P. Morgan Chase and Ally Financial, that have admitted serious foreclosure paperwork problems.

    “There’s still a long ways to go, and still a lot of things to find out and a lot of discussions to have,” Miller said. “But as I’ve said just about every time I’ve talked about this, the goal once we got in this mess is: How can we come out of this mess better off than when we started?”



    Let’s get down to brass tacks. These “limited” powers of attorney and “limited signing officers” and “vice-presidents” have now been shown to meet the following description. Their depositions and court testimony reveals the same thing no matter who the witness or what court it is in. It is a clerical person who is given instruction to sign papers with no knowledge as to the content of those instruments or why they are signing other than getting a paycheck.

    None of these documents would ever have been considered valid until the BIG LIE was told. If a borrower came into court contesting a foreclosure in 1970 with some paper bearing the signature of a “limited signing officer” the Judge would have thrown it out of court. That is what is wrong with these foreclosures, that is what is wrong with the mortgages, that is what is wrong with the deeds of trust, that is what is wrong with the notice,s of default and notices of sale. They are all fatally defective.


    submitted by Brian Davies, thank you


    Deutsch Bank Discovery and Expert Affidavit

    Editor’s Comment: The rules concerning qualifying an “expert” to testify have been liberalized to the extent that nearly anyone claiming superior knowledge can be qualified. But Judges are impressed with credentials AND a powerful performance on paper, in live testimony, with the ability to defend against cross examination. Lane Houk here is the expert and has done a really good job for what he was aiming for. But I would caution people who want to present themselves as experts and those who would use such people and pay them a lot of money: the goal is to have the Judge believe the expert. The expert’s conclusions must resonate with the Judge. The acceptance of the testimony is based upon rapport established in court, credibility apart from credentials, and a good application of facts to justify the opinion. I think Houk did that pretty well here. This isn’t a poke at him. But I know from personal experience having been an expert witness since the 1970’s that there are about a hundred ways to discredit an expert even if they are right. So make sure you use someone who has experience on the witness stand.

    MUST READ! *cross-posting*

    Deposition of Expert Witness in a Securitized Trust/Trustee Foreclosure Case: Deutsche Bank v. Dennis




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