AP: FORECLOSURE CLASS ACTIONS PILING UP AGAINST BANKS ACROSS THE COUNTRY

Foreclosure class actions pile up against banks

(AP) – 1 day ago

NEW YORK (AP) — Foreclosure-fraud class action lawsuits are starting to pile up against major banks across the country, threatening a besieged industry with billions more in potential losses.

Bank executives are swarming Capitol Hill this week to defend themselves against multiple foreclosure-related investigations, including one by all 50 state attorneys general. Talks are under way in that probe in hopes of reaching a settlement, but that wouldn’t extinguish the mounting threat of an avalanche of class actions.

A congressional watchdog said in a report issued Tuesday that the foreclosure document debacle could threaten major banks with billions of dollars in losses, further prolong the housing depression and damage the government’s effort to keep people in their homes.

The class actions, which could be expanded nationally, seek damages for homeowners whose properties were illegally foreclosed upon by banks using fraudulent documents. Suits have been filed in Maryland, New Jersey and Massachusetts that target Bank of America Corp., Wells Fargo & Co., HSBC PLC and JPMorgan Chase & Co. In Florida and Maine, Ally Financial, formerly known as GMAC Mortgage, is also being targeted.

Perhaps an even bigger threat are the lawsuits that contend the banks’ foreclosure machinery amounted to a racketeering enterprise. One such case, an Indiana lawsuit against Bank of America, was filed under civil Racketeering Influenced and Corrupt Organizations or RICO laws, which allow damages to be tripled.

The race is on for the banks to keep the scandal from metastasizing. Crisis management specialists are working around the clock to help banking executives stem the financial and public relations disaster. Shares of Bank of America, the nation’s biggest lender, are already down 21 percent for the year, making it the biggest laggard in the 30 stocks that make up the Dow Jones industrial average.

Even if a settlement materializes with the state attorneys general, it won’t necessarily stop all the class actions, although it could slow their momentum and limit their scale. A settlement would also help assuage public distrust and outrage that is fueling a consumer backlash against banks.

The probe by the state prosecutors amounts to far more than an effort to root out the “robo-signers,” whose back-office antics of signing thousands of foreclosure affidavits a day helped trigger the scandal. Lawmakers are also pressuring the banks to re-engineer their entire mortgage and foreclosure process to rid it of what they say is systemic dysfunction.

For now, much of the talk in the banks’ negotiations with the state prosecutors involves a possible compensation fund, modeled on the one created for victims of the BP oil spill, for people who went through foreclosure proceedings based on faulty documents. Details are still hazy, but a consensus seems to be building that some kind of financial remedy is needed.

“It’s a preliminary discussion and it’s part of several options being considered by this group,” said Geoff Greenwood, a spokesman for Tom Miller, the Iowa attorney general whose office is leading the investigation against the banks by the state AGs.

Greenwood said the attorneys general have had several meetings by phone and in person with officials of some banks in recent weeks, and they plan to meet with others. However, “We’re not close to a deal,” Greenwood said.

Among other topics being discussed in the talks, prosecutors also want banks to do more home loan modifications and to end something called the “dual-track” process. Under that system, which was put in place at the insistence of investors in mortgage-backed securities, banks put homeowners who are in loan modification programs into foreclosure proceedings at the same time.

Associated Press Writers Marcy Gordon and Pallavi Gogoi contributed reporting.

23 Responses

  1. Bart,

    All of us are checking for case law to use, and innovative arguments.That is the whole chess game with the legal system.Whether you can feed off another case that is a class action while not becoming joined to it is not something I can answer for sure.

    With a class action that I know of that is multi-state, other cases that were filed were getting joined to the class action case by the court system.

    The judges involved were picking which cases were to be joined and, in some cases, they were sending cases back to the courts they came in from because they differed on a key component that was being argued.

    That case is likely to establish new case law. It is not a ‘damages’ class action.

    I would tend to believe that iif you have more issues than are present in the class action, that the most that could happen with the issue(s) in common would be for those issues to possibly become joined to the class action. The other issues would remain in your separate case.

    I have not had a chance to ask an attorney about this question and I’m NOT giving legal advise, just stating my own opinion as a lay person.

  2. Concerned, If my case is already in the “system” and a class action suit comes in. Can we use the case law in the class action with our case?And visa vera if it is applicable? I do want to keep out of class actions as they are usually in persuit of a single part of the pitcher. In other words can the two cases “feed” off each other. Or is this what you mean by hearings so they are not intertwined?It seems to me if a class action is won on a part that your case has this is good case law for your case too.

  3. This Sherriff gets it
    http://www.huffingtonpost.com/2010/11/19/tom-dart-resumes-foreclosure-evictions_n_786325.html

    NEVER AGAIN

    THE JUDGES ARE GONNA GO DOWN AS CRIMINALS UNBELIEVABLE AMERICA HAS BECOME A CLINT EASTWOOD SPAGHETTI WESTERN.

  4. If Warren Buffett wants to tarnish his golden years emitting the gushing drivel that appears in today’s New York Times, he has undoubtedly earned the privilege. But even ex cathedra pronouncements by the Oracle of Omaha are not exempt from the test of factual accuracy. Specifically, his claim that “many of our largest industrial companies, dependent upon commercial paper financing that had disappeared, were weeks away from exhausting their cash resources” is unadulterated urban legend. Nothing remotely close to this ever happened….

    Indeed, even a cursory review of the composition of the $2 trillion CP market as of September 2008 shows that the “blowup” was actually about losses on reckless bets by a few thousand money managers, not the availability of ready cash to millions of Main Street businesses.

    Yes, you read that right. A few thousand people thrust our entire planet into a financial and economic death spiral, all because they could. They were having so much fun! Risk is cool! Who gives a shit about housing, employment, global stability? We’re in the money! It’s greed baby! And it rules!

  5. I need a lawyer that is courtroom saavy and deals in contract law IMMEDIATELY , in Orlando FL … it has to do with the contract your bid represents at an open outcry auction and the legal repurcussions of a bid retraction. contact Brian_Tracy at cfl.rr.com ,, perhaps I just need an hour or two of schooling..

    Thanks

  6. Bart,

    What I have always seen with Class Actions, was that at the stage where a settlement is proposed, IF you do NOT want to be in the ‘CLASS’ you need to opt-out, assuming you had NOT already filed your own case.

    If you file your own case in the same court system that is already hearing a class action that is similar, you may face hearings to keep it from being joined to the other cases.

    I’m no attorney. I’m sure there are more angles to this.

  7. If we do not pay close attention to this, the banks will get away with it. We must continue to send messages to our Congressmen about what we know. Part of the scam here is that the populace is uneducated and does not know they have rights. We need to take care of this now, because the USofA is going down the tubes. The rest of the world is looking at our financial system as systemized theft. They are not going to do business with us. Our mega banks sold them bogus products, and they are disgusted. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com.

  8. It’s to my understanding that if you partake in a class action suit you cannot persue a case on your own with or without legal help? Maybe I am misinformed.

  9. ANYONE INTERESTED TO SEE WHAT THE DEATH TOLL IS FROM THE FORECLOSURE CRISIS GO HERE > http://greenspansbodycount.blogspot.com

    THERE IS SOME SAD STORIES ABOUT WHAT OUR GOVERNMENT HAS ALLOWED AND EVEN ENCOURAGE TO HAPPEN

  10. MY LENDER BUILDER LENNAR (UNIVERSAL AMERCIAN MORTGAGE COMPANY OF CALIFORNIA PREFERRED LENDER SUBSIDIARY) MADE $25,000 ON THE LOAN, GOT REBATES OF $12,000 FOR A MELLO ROOS TAX THAT THEY VOTED ON, AND THUS EFFECTIVELY HAD OVER 100% FINANCING OF THE VALUE OF THE PROPERTY.
    LOOK AT THIS 2004 MARKETING BROCHURE.
    THE TRACK FOR MY HOME IS 31601-4 LOT #75.

    http://www.scribd.com/doc/43381753/Terra-Lago-Brochure-11-10-04-AREA-1

    LENNAR MAKES BUYER TO USE THEIR LENDER TO GET DISCOUNTS

    LENNAR PURCHASE ADDENDUM

    This Addendum it hereby made a part of that certain Purchase Agreement and Deposit Receipt and Escrow Instructions (“Purchase Agreement”) dated November 03.2006 , by and between LENNAR IIOMES OF CALIFORNIA, INC. (“Builder”) and BRIAN DAVIES (“Buyer”).The terms and conditions of said Purchase Agreement shall remain in full force and effect with the exception of the following;

    SELLER TO PAY UP TO BUT NOT TO EXCEED $14,799 TOWARDS BUYERS RECURRING AND NON-RECURRING CLOSING COSTS, LOAN ORIGINATION, DISCOUNT POINT AND OR RATE BUY DOWN AS ALLOWED BY BUYERS LOAN PROGRAM/LENDERS INSTRUCTIONS.

    BUYER MUST OBTAIN FINANCING THROUGH BUILDER/SELLERS PREFERRED LENDER UNIVERSAL AMERICAN MORTGAGE COMPANY AND CLOSE ESCROW ON OR BEFORE NOVEMBER 28, 2006.

    BUYER MAY USE ANY UNUSED PORTION OF CLOSING COSTS TOWARDS FLOORING AT LEONARDS CARPET CARE AFTER THE CLOSE OF ESCROW. ANY FLOORING ORDER!) AFTER THE CLOSE OF ESCROW WILL NOT BE MANAGED BY LENNAR.

    SELLER TO PAY UP ’11) SI4.000 TOWARDS WINDOW COVERINGS AT LEONARDS CARPET CARE PROVIDING ESCROW CLOSES ON OR BEFORE NOVEMBER 28.2006.

    HOW DOES THE OTS, OCC, STATE OF CALIFORNIA CORP DIVISION OF FINANCE OR DEPT OF REAL ESTATE ALLOW THIS TO HAPPEN. THEY DO NOT CARE NOR DO THEY WANT TO REVIEW THIS INFORMATION.

  11. “prosecutors also want banks to do more home loan modifications”

    so they want banks to modify loams they don’t legally own?

  12. http://foreclosureblues.wordpress.com/2010/11/19/where-is-my-note-and-who-really-is-the-creditor/

    WHERE IS MY NOTE AND WHO REALLY IS THE CREDITOR?
    Posted on November 19, 2010 by Foreclosureblues

    It is widely known that a significant percentage of the notes were shredded and the “loan tape” / spreadsheet electronic file became the trustee’s and the insurer’s permanent file of record.

    The sworn statement of a member of the Florida Banker’s Association to the Florida Supreme Court last year stated such.

    In keeping with the model of cost effective foreclosure, totally ignoring the detail of law (because they can) and (always have), the path of least resistance to counter the “Produce the Note” defense is to…Produce the Note.

    But I think you will see from my declaration why that is not as simple as it may seem.

    If the notes had been conveyed properly as prescribed by the PSA, it really would not be that difficult to go down to the document custodian and pull it out.

    The real reason this is resisted so is because loans were often pledged as collateral for multiple securitizations, repos, and other arrangements in the heat of the financial crisis. Once this becomes confirmed you can imagine the fallout. All of the players to some extent did the Taylor Bean 2 step, where do you think Taylor learned it?

    So now the servicers have the “tape” and not much else. It should be also noted that the TALF from the fed to the servicers collateralized many of the stated “loans”. Also, ultimately, the Fed is the true creditor on vast numbers of these loans, through Maiden Lane Etc. The Fed, Fannie, and Freddie. They know exactly what is going on. They simply cannot afford to stiff every major government and bank in the world who are the owners of the MBS that we sold them. And they do not want to break the back of the investment banks that provide the govt. funds to pay their own bills. The reason the Fed is printing now is because the govt. needs it now just to pay bills, or they wouldn’t do it.

  13. Brian,

    I’m trying to understand bank “losses.”
    I understand investors incurred losses.
    Homeowners are suffering.

    I don’t see it for banks.

    If someone uses your identity and good credit to create an obligation, then borrows multiple times against it, then securitizes it, then forecloses and claims insurance, then resells your home, then cuts the investors out of the picture…and on and on and on. It seems to me they’ve gained many many times. So, to pay back the investors and/or the homeowners would represent only a fraction of their profits.
    (By the way, it seems that banks are just parroting what the government does by means of our BC’s and SS numbers.)

    Let’s say I’m a store who robs a customer of her/his purse. I am forced to give the customer his/her purse back. Is that a loss ?

    It appears that “losses” would be only what the store owners put on their books. Thus, banks can dream up any numbers they wish and call them whatever they want. They cry about potential losses when they are, in fact, only “cutting their losses”…in other words, giving back a fraction of their original profits.
    What good is an audit, then?
    I would imagine they’d file BK before they would pay back a penny.
    I’ll bet they would rather file BK than do a loan mod !

    Further, if banks have already spent their loot, it’s not our fault. How do we know they haven’t hidden their assets overseas. B of A paid back the bailout money, right? How did they do THAT if they didn’t have profits ?

    They make zillions on credit cards and other loans. They pay themselves millions in salaries and bonuses.

    I’m just wondering here where all these bank profits go.
    If push came to shove, would they not just be returning stolen money ?

  14. How banks ended up repackaging and buying their own securities during the housing boom :

    http://www.huffingtonpost.com/2010/11/19/how-banks-bought-their-ow_n_786073.html

  15. Carrie,

    You could try this lawyer:

    Steven Siebig 818 285-0383

  16. Speaking of lawsuits, Vondran won’t take my mortgage/robofraud case. We are based in Los Angeles and we have a UD hearing on November 29. I’m looking for a lawyer to represent us in bringing a civil suit in state court. Notary fraud is involved too.

  17. MERS lobbyists descend…

    http://market-ticker.org/akcs-www?post=172782

  18. feds look at putbacks

    Put-backs of defective mortgages are accelerating and the Federal Reserve Board is growing more concerned about the potential risks to the banking system.

    “The Federal Reserve has been conducting a detailed evaluation of put-back risk to financial institutions,” Fed governor Elizabeth Duke told a congressional panel on Thursday.

    She noted in her testimony that put-backs usually involved cases where investors want the originators to buy back defaulted mortgages due to breaches of the representations and warranties.

    But new claims that underwriters and sponsors of securitizations failed to comply with federal securities laws are cropping up.

    “Most of the lawsuits are in the early stages,” Duke testified, “and it is difficult to ascertain the probably that investors will be able to shift a substantial portion of the losses” to the sponsors of the mortgage-backed securities.

    She also noted that financial institutions are “vigorously” defending against these claims.

    “We are gathering information to ensure that institutions we supervise have adequately assessed these risks and have accounted for them properly,” Duke said.

  19. DAMAGE the government’s effort to keep people in their homes?

    What effort ?

    No effort = No damage

    Did the Congressional watchdog mean to say: Damage the government’s efforts to kick people out of their homes?

    So the housing crises could bottom out ?

    What is that guy’s name now that is against a nationwide moratorium on foreclosures ?

  20. Dear President Obama,

    Today I went to the local coffee shop to have get my daily legal shot of caffeine, picked up the Washington Post and browsed leisurely over the classified section to see if from an unofficial perspective how our booming local Washington DC Metropolitan area is doing.

    What I saw made me think, Do we really need all those economists at the Federal reserve?

    Do we really need to bail out the Banks?

    Do we really need to fight against fraud and everything else?

    After going through over 12 pages of trustee sales and only one posting for a Boom Box truck operator, I realized that we are really screwed!

    if our recovery in simply based on stealing homes and helping the thieves, I do not want that recovery.

  21. “Greenwood said the attorneys general have had several meetings by phone and in person with officials of some banks in recent weeks, and they plan to meet with others. However, “We’re not close to a deal,” Greenwood said.”

    I’m glad they aren’t close to a deal. That dirtbag Moynihan a few days ago arrogantly expressed it was all but in the bag.

  22. BRUCE MCDONALD’S COLORADO FIGHT WITH FOIA. NOW A SECOND PERSON NEXT DOOR WITH SAME.

    http://www.scribd.com/doc/43336839/Foreclosure-Crisis-Hits-Home-in-Colorado-BRUCE-MC-DONALD.

    Twice bitten? Second Crestone resident claims fraud
    By Jefferson Dodge

    Another Crestone resident, Wooddora Eisenhauer, says that she, like her neighbor Bruce McDonald, has been victimized by banks’ predatory foreclosure practices.

    Eisenhauer, who was in the real estate business for more than 16 years as a broker and owner, says she has seen firsthand how corrupt the foreclosure business is. Beginning at the end of 2006, she says, she had a growing number of second-home owners grappling with whether they should foreclose or declare bankruptcy, and the rise of foreclosures forced her to shutter her own real estate business at the end of 2009.
    “I’m one of the ones that lost the game,” she says. “The mortgage and banking industry is so corrupt, and has specifically, strategically and systematically been put into place by laws that keep the individual from having any control over the powers that be.”
    Eisenhauer, who has had two of her own personal properties foreclosed on and is in the middle of her third, says the system is rigged.
    “The legalities of them being able to foreclose are totally tainted,” she says.
    “The courts look at banks as being those who render the truth and get the benefit of the doubt.”
    The first of her foreclosures was done appropriately by a small, local bank, Eisenhauer says.
    But her second property was foreclosed on by a big national bank, which “supposedly” had bought it from Countrywide, she says. “Any time a note changes from one bank to another, I’m going to be suspicious.”
    The third and current foreclosure involves her primary residence, a 650-square-foot, one-bedroom, one-bath home that Wells Fargo is attempting to foreclose on after buying the loan from Washington Mutual, Eisenhauer says. At her March 1 Rule 120 hearing, the administrative procedure held to determine whether a house can be foreclosed on and sold, she claims that Wells Fargo “showed up with a forged document.”
    She and her attorney, Erich Schwiesow of the law firm Lester, Sigmond, Rooney and Schwiesow in Alamosa, argue that the first page of the promissory note clearly did not match the rest of the document, in part because it didn’t have the same fax stamp. In addition, they claim, the initials and signature on the document do not match Eisenhauer’s handwriting.
    “It was clear it was manufactured,” Schwiesow says, adding that a local judge agreed and denied authorizing the sale of the property. Wells Fargo initially filed a motion asking the judge to reconsider the decision, but dropped that motion this week.
    “I will do everything humanly possible to stop this foreclosure process on my primary home,” Eisenhauer says.
    Like Bruce McDonald, Eisenhauer argues that banks have a financial incentive to foreclose.
    “They make more money foreclosing,” she says.
    “They don’t give a shit. They pile on penalties and fees, sell it at a discount to Fannie May for $10, and they go to the FDIC and get [80 percent] for what their claimed losses are. I’m saying, by God, give that to me. I’m livid. I’m mad as hell, and I’m not taking it anymore.”
    Eisenhauer, 70, claims that the whole mortgage/ foreclosure system was put into place over time, creatively, to undermine the majority of the public.
    “If we haven’t felt like slaves already, we are going to find out what true slavery is,” she says. “Don’t ask what your government can do for you, ask what you can do to stop your government from doing this to you. … The banks have been operating as if none of the rules apply to them.”
    Eisenhauer says that despite the unsettled status of her foreclosure, Wells Fargo sent people to her home to change her locks and mow her lawn, even though she doesn’t have a lawn.
    “The bank doesn’t own the property yet,” she points out. “Something is desperately wrong about this.”
    Tom Goyda, vice president for communications for Wells Fargo, acknowledged that the bank has agreed to file supplemental affidavits for about 55,000 foreclosure cases nationally in which “appropriate procedures weren’t followed.” But he told Boulder Weekly that all of those cases are in 23 “judicial” states, not Colorado (which, as a “nonjudicial” state, has the administrative Rule 120 hearing to approve foreclosures).
    Goyda also acknowledges that, in the case of Eisenhauer’s property, Wells Fargo did send an inspector to “maintain and secure” the property, as it does with all of its properties where payments are more than 60 days past due, but when the inspector learned that the residence was still occupied, he and the bank backed off.
    He denied claims that such efforts are a tactic intended to intimidate a homeowner into abandoning the property and any efforts to challenge the foreclosure, as has been alleged by some (see http://www.illegalforeclosures.com, a site that claims the foreclosure rate in Colorado is double the national average).
    Goyda says banks like Wells Fargo must step in to maintain and secure properties to ensure that vacated homes aren’t vandalized or left in disarray, devaluing its property value and those of adjacent homes.
    “Nobody in the neighborhood wants vacant property with an overgrown lawn, or people breaking in and taking copper, or whatever they might do,” Goyda told Boulder Weekly.
    He says he is not aware of the details surrounding Eisenhauer’s claims of forged documents, and knows of no cases in Colorado where Wells Fargo did not follow procedures.
    When asked about the sister case in Crestone, the Bruce McDonald lawsuit (see story above), Eisenhauer attorney Schwiesow says similar illegal foreclosures are probably going on all over the state.
    “It’s just that Bruce McDonald is not rolling over for them,” he says.
    Respond: letters@boulderweekly.com

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