Illinois AG Madigan Files Legislation to Reform the Foreclosure Process to Protect Homeowners

Illinois AG Madigan Files Legislation to Reform the Foreclosure Process to Protect Homeowners

Tue, 2010-11-16 17:17 — NationalMortgag… 

Notice of Foreclosure Pic

Illinois Attorney General Lisa Madigan has filed legislation designed to reform the foreclosure process to protect homeowners. Madigan’s legislation is the first of its kind in the country to address revelations that major banks and mortgage giants recklessly “robo-signed” foreclosure fillings across the country. The bill would significantly tighten the requirements for affidavits filed in foreclosure proceedings to ensure their accuracy.

Sponsors of the bill during the General Assembly’s fall veto session are state Sen. Jacqueline Collins, and state Reps. Marlow H. Colvin and Mary Flowers, all of whom have worked closely with Madigan’s office in recent years to increase the protections for Illinois families facing foreclosure.

“Too often, Illinois families are struggling to pay their mortgages because banks put them into risky loans that they did not understand and could never afford. Now, we must make sure that banks are not violating the law as they try to take these families’ homes away,” Attorney General Madigan said. “This legislation is designed to ensure that banks and loan servicers cannot cut corners or ignore homeowners’ rights in the foreclosure process.”

The legislation was prompted after major loan servicers across the country, namely GMAC/Ally, Bank of America and JPMorgan Chase, admitted their employees signed inaccurate foreclosure documents in court. These employees may have approved thousands of foreclosures without personal knowledge of the facts involved and without verifying underlying loan information.

“As Illinoisans lose their homes, we have to continue to fight to put the law on their side so they don’t once again become the victims of fiscal gluttony,” said Sen. Collins.

The bill would ensure the integrity of foreclosure documents filed and that lenders are complying with the requirements of federal loan modification programs. It would also make sure each homeowner knows the amount they owe, who owns their loan, the terms of their original loan and whom they can contact. Specifically, the proposed legislation would:

►Ensure affidavits filed as part of the foreclosure process contain a detailed description of how the person who signed the affidavit has personal knowledge of the facts, including what he or she did to verify that the amount owed is accurate.

►Require that banks verify in writing all efforts they have undertaken to keep the homeowner in the home, including loan modification efforts.

►Require that banks provide a detailed summary of the borrowers’ payments to ensure the borrowers know why the foreclosure is happening and can contest the foreclosure if the banks’ payment history is inaccurate.

►Require that a bank prove that it holds the loan and has the right to foreclose.

“This legislation continues our aggressive work to implement laws that provide homeowners with assistance while holding lenders accountable,” said Rep. Colvin.

The legislation is part of the Attorney General’s response to the recent foreclosure document scandal. Madigan also has asked Washington lawmakers to support the re-introduction of legislation drafted by U.S. Sen. Richard Durbin, D-Ill., to permit bankruptcy court judges to reduce principal amounts on mortgages and thereby save homes.

“If banks and mortgage companies cannot produce the proper paperwork to verify a foreclosure needs to take place, they shouldn’t be kicking Illinois homeowners out of their homes in the first place,” said Rep. Flowers. “It is up to the state, with this legislation, to step in to protect these vulnerable residents.”

Immediately following reports questioning the integrity of foreclosures filed nationwide, the Attorney General issued letters to GMAC/Ally, Bank of America and JPMorgan Chase along with 23 other major loan servicers who work in Illinois demanding a halt to all pending foreclosures in Illinois, including post-foreclosure sales and evictions, unless they were able to demonstrate the filings were accurate.

Attorney General Madigan, along with the 49 other state attorneys general and 37 state bank and mortgage regulators, is also continuing a multi-state probe into the servicers and foreclosures filed in courts across the country. In Illinois, the filing of false court documents could be a violation of the state’s Consumer Fraud Act and other laws.

AG Madigan has been at the forefront of protecting Illinois homeowners during the mortgage foreclosure crisis and holding Wall Street banks accountable. In 2008, she led a nationwide $8.7 billion settlement with Countrywide over its predatory lending practices. The Attorney General has also filed suit against both Wells Fargo and Countrywide alleging widespread discrimination against African American and Latino borrowers, causing them to pay disproportionately more for their mortgages than other borrowers.

In Springfield, Ill., AG Madigan played a principal role in working to pass the High Risk Home Loan Act of 2003 and drafted the Mortgage Rescue Fraud Act of 2006, which was designed to deter scam artists from preying on vulnerable homeowners on the verge of foreclosure. The Attorney General also initiated and drafted the Illinois Homeownership Protection Act, a law that took effect in 2008 to tighten controls on brokers and lenders to prevent consumers from being unwittingly locked into questionable loan terms. In 2008, Madigan also initiated the Illinois Homeowners’ Rights Act.

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9 Responses

  1. Don’t forget about the judges, this could not have been done if the judges read the documents and not rubberstamp the plaintiff (bankers) documents. We need an oversight panel to watch them….. because they on an ongoing bases work outside the law and no one does anything not even the juducial review board, somebody is getting paid and we the are all suffering. MERS knew they didn’t have standing to foreclose, but they did have money to pay these judges off.

    What is the real issue, it seens as if the main concern is the the banks get paid, well that may all be true but what are the punishment for them ? a slap on the wrist. Not fair….

  2. So the states are starting to stick up for the homeowners, and the feds are propping up the banks with everything they (we, the taxpayers) have.

    This is not going to end well.

  3. Sam I Am asks: “Why doesn’t this legislation include what happens if the plaintiff is found to have filed fraudulent documents?”. Well, Sam, you’re in for a rude surprise. Ms. Madigan and her pencil have no intention of holding anyone accountable. She is a 2nd or 3rd generation Chicago Machine politician. If there was bite with the bark, Tom Dart would not have to resume evictions.
    I am holding in my nicotine stained fingers a letter in response to my complaint stating….”Should an inquiry into this matter or subsequent complaints indicate actionable violations of Illinois law, your file will be reviewed again for appropriate action. Thank you for your….”. Thank you for my what? WASTING MY TIME WRITING ABOUT THE WIRE FRAUD AND RACKETEERING CHARGES?

    Listen up, kiddies! Unless somebody hits the RESET button somewhere, no one is going to be allowed to win against money and power. It’s too big. UNLESS we fight on. Stand up for the rule of law. The Constitution. Stand up for your children and your grandchildren. These are brutal times coming for anyone who is not in the RULING CLASS.

    If it would please the Court, Defendants will try not to impart patronization or trivialization to their rebuttal of Plaintiffs recently submitted “Brief in Opposition to Motion to Vacate”, as Plaintiff exudes. From the outset, Defendants XXXXXXXX and YYYYYYXXXX have come before the Court and presented to the best of their ability AN HONEST DEFENSE OF A FRAUDULENT FORECLOSURE LAWSUIT. In their sworn pleading, which was impugned by the Court, Defendants stated that their situation was the result of a fraudulent, predatory loan that was originated by WE’LL FUCKEM Home Mortgage, a subsidiary of We’ll Fuckem Bank, N.A. Defendants set out the facts as related to the origination and closing, supplied numerous documents that illustrated the “lender”, as identified to them at the closing, had committed acts that were unconscionable in the context of a normally underwritten mortgage loan; normal, that is, where the lender would have a financial interest in the borrowers repaying the loan at the terms set out in the note, over thirty years. Defendant/borrowers were led to understand that the transaction they were entering into was a “conventional” (albeit, an adjustable-rate) mortgage loan, wherein the lender, as represented to borrower, We’ll Fuckem Home Mortgage, a division of We’ll Fuckem Bank, N.A., had reasonably assessed Defendant-borrower’s ability to repay said loan. Defendants did not set out to defraud the “lender” with their taking of the loan; Defendants sought to purchase real estate to provide housing. The pending transaction was presented by “lender agents” as a viable loan that the Defendants would be able to fulfill, barring unforeseen circumstances of illness or death, and Defendant-borrowers entered into the contract, with the intent to fulfill it, known as “good faith”, and evidenced by their payment history beginning July1, 2005 and up through and including July, 2008.
    The Court had interpreted Defendant’s pleading that Defendant/borrowers were stating the mortgage loan transaction entered into was void ab initio, or at least voidable, due to lender’s total disregard for the fiduciary responsibility required not only to the Defendants, but also to the investors who supplied their capital (pension funds and other qualified investors). Defendants were unaware that the “lender” We’ll Fuckem Home Mortgage was not a lender at all, but merely a conduit by which investor money flowed to the Sponsor (We’ll Fuckem Asset Securities Corporation) of a securitization trust known as We’ll Fuckem Home Equity Asset Backed Certificates 2005-2, a REMIC trust governed by New York trust law and the Internal Revenue Code, and as such, We’ll Fuckem held no ownership interest in the loan, OTHER THAN SERVICING RIGHTS. “Servicing rights” are not “ownership rights”. They are a form of “gain-on-sale accounting” wherein they retain a percentage on their balance sheet. The Trustee for the Trust, LMFAO Bank, U.S.A., in whose name the instant action is brought, also has NO RECORDED SECURITY INTEREST in the County Recorders office of “Impoverished County”. The “facts”, as Plaintiff contends, are indeed evident.
    In pleading their case, Defendants hoped to provide enough background for the Court to take interest in the counterclaims and require, at the very least, an evidentiary hearing to ascertain the veracity of at least some of the affirmative defenses and counter-claims presented.
    “The facts pleaded and all reasonable inferences from the pleadings are admitted to be true, but only for the purpose of testing the legal sufficiency of the claim, not for the purpose of trial. The pleadings are to be liberally construed with a view to substantial justice to the parties. Schweiger v. Loewi & Co., Inc., 65 Wis.2d 56, 221 N.W.2d 882 (1974).
    The Defendants are in understanding that the Court took the Defendant’s counterclaims into consideration, and errantly deduced that if the Court ruled Defendants transaction void or voidable, Defendants would enjoy an “unjust enrichment”, that is, a windfall, or an unfair transfer of equity; surely NO ONE should get a free house because they were lied to in the course of entering into a loan and mortgage.
    But now the scheme has been exposed. The alchemists can no longer claim their innocence, as “plausible deniability” is escaping like air from a punctured tire. And Plaintiff, Plaintiff’s attorneys, and their law firms, all “hit the road” in the same bus, without a spare tire.
    Today, as the economy teeters on the brink of financial failure, it has become common knowledge that the participants in the secondary mortgage market, the “big five” national banks, We’ll Fuckem Bank, N.A., being one, and their European counterparts, LMFAO Bank, U.S.A., being others, together with large investment banks, had created and sold a large amount (approximately $9.1 trillion U.S.D., estimates vary) of mortgage-backed securities. The securities were initially triple-A rated (based upon false ratings that were obtained) assuming that the “risk” of making bad loans could be offset with the purchase of insurance and escalating collateral values. Furthermore, those ratings were obtained using a business model of SPONSORS of the securitizations PAYING FOR THE RATINGS
    THEY NEEDED TO SELL the deal, instead of INVESTORS PAYING FOR the service of RATING RISK CONCEALED INSIDE. Not too many months after Defendants mortgage was closed and (ALLEGEDLY) securitized, many of those bonds were downgraded to junk, and borrowers around the country began to default in high numbers.
    With the defaults came millions of foreclosures, over 19,100 here in Wisconsin alone in the last two years (as of November 2, 2010). With national foreclosures topping four million, and failures of multitudes of securities, and near-collapse of world financial markets, the losses were suffered by investors and homeowners, and the profits on Wall Street soared.
    It is becoming clear that 40 million borrowers could not have decided, in concert, to default on their mortgage obligations. These Defendant/borrowers did not default by choice, but were forced into default by design. Just ask the “market makers” at Golden Sacks selling 30 year bonds short at three and a half years (LOCHSONG, SALISBURY Deals), and review the servicing records of the XXXXXXX loan 0MYGODU812, obtained in discovery.
    For over 50 years, mortgage-backed securities issued in the United States were known the world over as a safe, secure investment for individual and institutional investors. I would state, purely on belief, that the Court this case is being judged by probably owns, directly or indirectly (through State or County, private or public, retirement and pension funds) some of these same securities.
    The Court is now challenged in equity, but not in law:
    “A meritorious defense is a defense good at law that requires no more and no less than that which is needed to survive a motion for judgment on the pleadings.”
    Perry v. ZURICH INSURANCE, 2010

    “Summary judgment is a drastic remedy and should be used only when there is no substantial issue of fact to be tried. Prime Mfg. Co. v. A. F. Gallun & Sons Corp., 229 Wis. 348, 281 N.W. 697 (1938); Marcos v. Whiting, 244 Wis. 621, 12 N.W.2d 926 (1944); Foryan v. Fireman’s Fund Ins. Co., 27 Wis.2d 133, 133 N.W.2d 724 (1965). When there are substantial issues of fact to be determined or when there are permissible inferences from undisputed facts that would permit a different result, summary judgment should not be granted. Elder v. Sage, 257 Wis. 214, 42 N.W.2d 919 (1950); Voysey v. Labisky, 10 Wis.2d 274, 103 N.W.2d 9 (1960); Fjeseth v. New York Life Ins. Co., 14 Wis.2d 230, 111 N.W.2d 85 (1961); Frew v. Dupons Construction Co., 37 Wis.2d 676, 155 N.W.2d 595 (1968).
    We are at a precipice wherein the Court is prepared to award a windfall to a mortgage servicer (Wells Fargo under any name), evidently masquerading and asserting “standing to foreclose” via the use of another entities’ name where there has been no evidence provided, other than the fraudulent affidavit of an unknown affiant. Plaintiff’s counsel states that this is a “serious allegation”. Defendants agree wholeheartedly, and are left to WONDER WHY:
    1. Plaintiff and their attorneys would proffer a 2nd affidavit from (a) Jennifer L. Robinson, who signed the original “Affidavit in Support” dated July 29, 2009, that has been discredited, and they don’t have the affiant SIGN THE SUPPLEMENTAL AFFIDAVIT WITH HER COMPLETE NAME in the document dated November 17th, 2010? Well, maybe Wells Fargo could send a CHECK STUB AND A DRIVER’S LICENSE COPY, OR A PIECE OF ADDRESSED MAIL, A CELL PHONE BILL, UTILITY BILL IN HER NAME, OR SOMETHING TO AT LEAST SHOW THAT SHE IS STILL ALIVE, DOES INDEED RESIDE IN MARYLAND OR SOMEWHERE CLOSER THAN BATON RUOGE, LOUISIANA, AND STILL IN THEIR EMPLOY?
    2. Plaintiff and their attorneys, under scrutiny of Attorney’s General across the country, WOULD NOT GENERATE A NEW AFFIDAVIT, NOT ONE THAT HAS BEEN ELECTRONICALLY ARCHIVED, MODIFIED, FAXED, COPIED, FAXED, AND COPIED AND FAXED REPEATEDLY, as evidenced by the distortions in the characters of the text and the many “security marks” that show up on the face of the document, evidencing that this is NOT AN ORIGINAL DOCUMENT!
    3. Plaintiff and their attorneys DID NOT AT LEAST TRY TO MAKE THE “SQUIGGLE” SIGNATURE OF THE ALLEGED AFFIANT, JENIFFER L. ROBINSON, LOOK SOMEWHAT LIKE THE INITIALED SIGNATURE OF THE ORIGINAL AFFIDAVIT SUPPLIED TO THE COURT. The two “initialed signatures” look nothing alike, nor do they even represent “letters” that could be construed as initials on a legal document. If these initials came from the same person, one would have to wonder if they were either schizophrenic or a sociopath, as those are usually the only two groups who cannot sign their name the same way twice.
    4. Upon notice from Defendants disclosed in their proof of service, that the Wisconsin Department of Justice Financial Crimes Division has been provided documentation of the case before the Court, THEY WOULD PROCEED TO ANSWER THE ‘MOTION TO VACATE” WITH ANOTHER FRAUDULENTLY CREATED AFFIDAVIT? Do all these guys have “GET OUT OF JAIL FREE” cards?
    As the truth surrounding fraudulent foreclosures was exposed, Attorney General Richard Cordray of Ohio expressed his sentiments in an October, 30, 2010 Wall Street Journal article , detailed below:
    (Begin excerpt)
    “The banks are committing fraud on the court, essentially perjury, and then saying ‘Whoops! You caught me! Here’s some different evidence and use that instead,’ Mr. Cordray said in an interview Friday (October 29, 2010). “I know a lot of judges are not going to take kindly to that.”
    Mr. Cordray continued:
    “It is not acceptable for a party who believes they submitted false court documents to merely replace those documents. We’ll Fuckem and any other banks are not simply allowed a ‘do-over,'” he wrote in the letter to We’ll Fuckem. The other letter was sent to Ohio judges, who were asked to notify Mr. Cordray when banks file substitute affidavits.
    We’ll Fuckem Chief Financial Officer Howard Atkins said in an Oct. 20 television interview that he was “confident with our policies and controls” related to foreclosures and that “the person at We’ll (Fuckem) who signs a foreclosure file is the same person as the person who reviews the file and it is not always done that way in the industry.”
    But on Oct. 28, We’ll Fuckem announced it was resubmitting affidavits for 55,000 pending foreclosures, suggesting that some of the paperwork might be flawed. In March, a We’ll Fuckem employee named Xee Moua said in a sworn deposition in a Florida foreclosure case that she signed between 300 and 500 foreclosure documents a day, without reviewing the numbers on the loan files for accuracy.
    Asked if she verified the appropriate information, she said, “That’s not part of my job description.”
    (End excerpt)
    The Defendants do not claim to be attorneys, and are not mortgage-backed security experts, but have been forced to become BOTH, to the detriment of their personal, vocational, emotional, and financial lives. Defendants do not claim to be handwriting experts; they will let the evidence speak for itself. Furthermore, Defendants do not seek a free home, only freedom from having their Constitutional Rights violated by a couple of too-big-to-fail banks and not-ready-for-prime-time lawyers who, without any proof of agency nor proof of claim, have sought to steal the home of the Defendants and their family BY VIOLATING STATUTE AFTER STATUTE, FROM ORIGINATION TO PREDATION VIA SERVICING AND SUBSEQUENT FRAUDULENT FORECLOSURE ACTIONS.
    “It is elementary that a court should carefully exercise its discretion because default judgments are regarded with disfavor in the eyes of the law since the general policy of the law favors giving litigants their day in court with an opportunity to try the issues.” Johnson v. ROMA II-WATERFORD, LLC, 2009
    And finally, Defendants would like to sincerely apologize to the Court for any burden imposed with improperly supported, somewhat numerous, hopefully illustrative and not ‘too’ wordy motions and pleadings. Defendants will re-affirm and swear as to the truth of any statement made in the course of this proceeding. Defendants do not believe anyone on Plaintiffs’ side of the aisle would care to do the same under oath.
    Defendants also are appreciative for leave granted by the Court to obtain counsel. After numerous consultations, payments of retainers, and other considerations, many practitioners were reluctant to take the case due to the possibility of loss of affirmative and other defenses, either omitted or errantly pleaded. Those conditions precedent precluded their involvement.
    Wherefore, Defendants pray that this Honorable Court will dispense justice in a fair and impartial manner, free of bias and pre-conceived notions by vacating it’s Order of Foreclosure pursuant to the Default Summary Judgment obtained by and with the unlawful acts of Plaintiffs, their law firms of record, and the attorneys who participated in this fraud upon the Court.
    Defendants are now confined to a statutory window with regard to their WOCCA and related fraud claims, and require disposition as soon as the Court can bring the motion to the docket.
    “The expiration of the limitations period extinguishes the cause of action of the potential plaintiff and it also creates a right enjoyed by the would-be defendant to insist on that statutory bar.” Wojtas v. Capital Guardian Trust Co., 2007
    A claim should not be dismissed “unless it appears to a certainty that no relief can be granted under any set of facts that (plaintiff) can prove in support of his allegations.”
    Grams v. Boss, 1980
    Defendants again request to depose the affiant, Jennifer L. Robinson, as soon as is possible.

    I had to do it.

  4. That’s Great! but there has to be a defined plausible means of enforcement, or it will simply be a repeat! The rules and regs.(guildlines and dirrectives) infront of the banks now are not enforcable! Fedural Ruling thus far has been “Homeowner are not beneficiaries of the program, incidental at best. Therefore we have no private right of action!” No right to sue!

  5. Why doesn’t this legislation include what happens if the plaintiff is found to have filed fraudulent documents?

    There is NOTHING in this legislation that addresses the CRIMES that have already been committed and the repercussions of continuing to commit these crimes.

    None of the Securitized Trusts are complying with the Pooling and Servicing Agreements. Are there any experts out there in addition to Lane Houk that will call a crook a crook? Is he the ONLY expert in this country with a backbone/conscience?

    Where are the Securitized Trust Experts???? Why are they in hiding???

    Does this level of intelligence just not exist anywhere else in this country????

    If I was raped, would I be forced to finance the prosecution or let the criminal walk free??

    If I was shot with a gun, would I have to finance the prosecution of the criminal or let him walk free??

    What the hell kind of a country are we living in??

    They are killing us and nobody in power is doing a damn thing about it!!!

    I’m sick of the bullshit.

    It’s time to buy a rifle and share the pain

  6. We are going to need much more regulation of all financial institutions. Bring back the Glass-Steagal Act. It worked well. We could even beef it up a bit. Financial institutions of whatever kind or nature, need to be heavily regulated. You’ve got your “new Congress”, and all they want to do is deregulate which will get us more of the same. Major regulation laws need to be put in place to keep the mega banks from destroying us and the rest of the world. Nobody is going to want to buy a house or real estate with one of these crooks. Move your accounts out of megabanks into local banks. Don’t do business with them.


    And don’t forget the victims of the pre-foreclosure crises. We made extraordinary efforts to work with banks before we even knew about their backroom deals and shoddy paperwork, we asked them to work with us to make our homes affordable, we asked them to validate the alleged debts…and they plainly ignored us.

    Maybe it’s good they ignored us…because it made us mad and as we began to dig deeper, we discovered that their atrocities were endemic.

  8. Creditor-

    Notice of Foreclosure from a Foreclosure firm stated BAC Home Loans, LP is the CREDITOR. They are the servicer, BAC admited in QWR response the loan was sold to Fannie Mae. lawfirm is tryign to foreclose in BAC name. ANYONE have a good FDCPA dispute letter I can send to the lawfirm? Or advice on how to tell them BAC is not the Creditor, without admitting anything as Mr. Garfiled has advised. thanks to all.

  9. Do NOT refinance your home , read the whole page :

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