Naked Capitalism: Vigilante Foreclosures by Pretender Lenders

Senate, House Hearings on Foreclosure Fraud Cast Doubt on Deadbeat Borrower Meme

On Thursday, the housing subcommittee of the House Financial Services Committee held hearings on robo signing, documentation, and servicing issues. This session wasa companion to the Senate Banking Committee hearings on the same topic earlier in the week.

There were some notable differences between the two forums. The House group overall was less well prepared; I’m told that’s due to the fact that Representatives have far fewer policy staffers than Senators. There was also a higher proportion of participating members predisposed towards banks in the House hearings. Nevertheless, the sessions made a major dent in some key bank talking points, the biggest being their assertion that all of the foreclosures made are warranted, and therefore the foreclosure problems are mere paperwork issues.

Some exchanges were effective. Maxine Waters, who chaired the session, grilled the regulators on whether they had fined or imposed sanctions on any banks. She was forced to become prosecutorial when every single regulator present refused to provide simple a simple yes/no answer as requested. One of the less evasive interactions was with OCC acting chairman John Walsh:

Waters: Has OCC taken any enforcement action?

Walsh: We have certainly issued supervisory requirements on matters requiring….

Waters: Have you levied any fines?

Walsh: I do not believe that we have.

Waters: Have you issued any .. orders?

Walsh: I don’t believe there have been any public actions.

Waters: Have you threatened to revoke any charters?

Walsh: No.

Waters: Do you think the servicers really believe you mean business if they don’t fear consequences?

Walsh: I think the consequences are clear and ….

Waters: But you haven’t done that. You haven’t done any of that. Why should they take you seriously?

The banks did not comport themselves terribly well in either hearing. It’s remarkable to see how they all tell the same lies hew to the same talking points: we do everything we can to avoid foreclosures, we don’t benefit from them (huh?), our second mortgage portfolios have no impact on our decisions (!?!), the only people we foreclose on are people who are delinquent. Chase adds some insulting-to-intelligence bromides about treating customers with respect. When told that there have been all sorts of people who have been foreclosed upon who don’t fit their tidy story (victims of compounding and often erroneous servicer junk fees, or told by the servicer not to pay so as to qualify for a mod), the next line of defense is to characterize them as errors, apologize, and profess that they fix mistakes as soon as they become aware of them.

Sadly, when Waters put up the notorious DocX document fabrication price list, all the bank representatives cheerfully piped up: “We don’t use DocX.” Of course they don’t now; DocX was shut down in early 2010. But she did score one when she asked banks to say which investors objected to mortgage modifications and the Bank of America witness ‘fessed up that it was very few.

It was also remarkable to how tightly the bank representatives had been scripted. They were utterly incapable of responding to unanticipated questions. Georgetown law professor Adam Levitin, who was extremely effective in both hearings, was stunned at how tongue-tied they were when Brad Miller asked about why big banks should be in the servicing business:

Rep. Brad Miller (D-NC) asked a panel with some 5 servicing executives on it why it makes sense for a servicer to be affiliated with either a loan originator, a loan securitizer, or a trustee. He might have been speaking Klingon to these executives. They stared blankly at him like he was asking them something that was far beyond their comprehension. None of them had a real answer for him.

This wasn’t a case of the servicers not wanting to speak an uncomfortable truth. There are perfectly legitimate reasons to bundle origination and servicing, for example–servicing is countercylical to origination (this is hardly news; banks’ 10-Ks state as much). Instead, this was a case of silence from ignorance.

As much as I respect Levitin (he was the standout of both hearings, as FireDogLake underscores), these business heads have clearly presented reams of PowerPoint presentations to senior executives that would from time to time discuss the strategic merits of the servicing operations. It’s more likely that they were put on a short leash by whoever prepped them for these meetings.

The problem with the industry defense that that delinquency = justified foreclosure is that they operate in a system where as far as the charges presented to homeowners are concerned, they are judge, jury, and executioner. Levitin debunked this stance in his written testimony (boldface ours):

A common response from banks about the problems in the securitization and foreclosure process is that it doesn’t matter as the borrower still owes on the loan and has defaulted. This “No Harm, No Foul” argument is that homeowners being foreclosed on are all a bunch of deadbeats, so who really cares about due process? As JPMorganChase’s CEO Jamie Dimon put it “for the most part by the time you get to the end of the process we’re not evicting people who deserve to stay in their house.”

Mr. Dimon’s logic condones vigilante foreclosures: so long as the debtor is delinquent, it does not matter who evicts him or how. (And it doesn’t matter if there are some innocents who lose their homes in wrongful foreclosures as long as “for the most part” the borrowers are in default.) But that is not how the legal system works. A homeowner who defaults on a mortgage doesn’t have a right to stay in the home if the proper mortgagee forecloses, but any old stranger cannot take the law into his own hands and kick a family out of its home. That right is reserved solely for the proven mortgagee….

Ultimately the “No Harm, No Foul,” argument is a claim that rule of law should yield to banks’ convenience. To argue that problems in the foreclosure process are irrelevant because the homeowner owes someone a debt is to declare that the banks are above the law.

Levitn and Julia Gordon of the Center for Responsible Lending both argued, forcefully, that many foreclosures were the result of servicer abuses. Gordon, who has handled many cases in her own practice pointed out what I have heard from borrower attorneys: that it is difficult for counsel to obtain the needed information from the servicer as to how it came up with the charges it claims the borrowers owes. And even then, it it not a trivial analytical task to unravel their accounts.

Other commentators find that the evidence supports the contention that defaults are often servicer generated. As Alan White notes at Credit Slips:

Erroneous foreclosures thus come in two flavors. Foreclosing someone who is not actually behind, or whose default was precipitated by junk fees, unnecessary or overpriced forced-place insurance, or payment application errors (common in bankruptcy cases) is obviously wrong. Equally wrong, however, are foreclosures of homeowners who have sufficient income to fund a modified loan that will produce significantly higher investor returns than a distressed foreclosure sale. Contrary to the pronouncements of servicers and Treasury officials, modification and workout consideration is not happening before foreclosure starts, it runs on a parallel track with foreclosure processes. Frequently, the foreclosure train wins the …
The clearest evidence of widespread errors and poor performance in mortgage servicing comes from data on HAMP and other modification programs…A February 2010 HAMP Call Center report of complaints lists more than 36,000 complaints of lost documents, inability to get a servicer response to an application, inappropriate requests for modification fees, and similar problems. An October 2010 ProPublica survey of HAMP applicants found that the average length of time homeowners had been seeking a HAMP modification was 14 months. Treasury guidelines call for a response within 30 days. Given those delays, it is highly likely there are affidavits of default being filed that allege default while the servicer is considering pending trial modification of mortgage terms. In cases where payments are being made on a temporary modification agreement, there are good contracts-based arguments that there is no default.

The banks apparently believe that their numerous abuses are no big deal, and that they can brazen their way through any real problems with a combination of delaying tactics, prevarication and appeals to authority. But it also appears that we still have enough of a semblance of rule of law in this country so as to throw a wrench in their strategy. The longer they dig in their heels, the more the public will come to recognize that nothing they say should be believed.

41 Responses

  1. It’s not just me that calls it parallel foreclosure. On http://www.parallelforeclosure.com, I have two in writing references, one from Chase Bank as reported by Sarah Buduson (over a year ago), and then the recent quote by Bank of America, at the top of the left side column.

    I think Barack Obama and his administration have crossed a line by luring homeowners towards HAMP when these type of “gotcha’s” existed.

  2. Alessandro Machi

    Interesting about parallel foreclosures – as you call them. Assume this is when borrowers asks for a loan modification and servicer- while it “supposedly” considers the loan mod – is simultaneously preparing for foreclosure.

    This is tied into the fact that servicers will not even consider a loan mod until a borrower is 3 months in default. By this time, the loan collection rights are already in the makes for being sold – foreclosure is already on it’s way. Which is why most loan mods are eventually denied anyway.

    Loan mods that do make it through – are not valid loan mods for many reasons – including that the creditor is not identified. And, these loan mods just add the fees and missed payments onto a longer term structure. Most likely the passed loan mods are on homes that are less than 5-10% underwater. Also, on these loan mods, the interest rate is only temporarily reduced – thus, putting homeowner is dangerous future situation.

  3. I’m not sure why my posts about parallel foreclosure are not being added, but it would make the communication among posters easier to follow if they were aware of parallel foreclosure.

  4. Some Inspiration: Remember why we fight !

  5. PJ,

    Glad you were paying attention to this!! This has been a particular “interest” of mine. No – HAMP did not make that guideline. The servicers do – AND – it is for a reason – as I discuss below. Current administration/congress lost all control – they are controlled by those WHO REALLY CONTROL.

    angry & NOT TAKING IT

    Close – servicer may have purchased the collection rights – OR servicer is servicing for a undisclosed distressed debt buyer (investor – as they like to be called). Most often, it is the latter.

  6. 2 Anonymous you bring up a very interesting issue here, and that is the forced/required default to qualify for a loan modification. Was this an actual “guideline” under HAMP, just where did that stipulation come from and if so what is that saying about the current administration?

  7. Linda,
    I agree, but ‘we’ are part of the problem. So the whining is coming from us, naturally. It was our lack of knowledge that caused this crisis.

    A greater Law, greater than Man’s is at play. Universal Law. We are ignorant of a lot of things and until we turn off the t.v. and really discover the truth (and move from the separation of what ‘happened -to-you’), we will not change this.

    We move about separately, but don’t realize we are connected. Even to the banksters that did this to us, are connected to us. Until we rediscover The Truth, you won’t find your remedy. Your processes don’t work because it is missing some TRUTH.

    The connection of everything is the key, and fighting and anger just keeps it going in the wrong direction. You’d be surprised how important a role your attitude plays in all of this, and you’d sit there and think “Me?!” “I’m just one person! My thoughts don’t matter, my feelings don’t matter.!” I assure you it does, and it’s causing some of the problem right here and right now, and that’s a hard pill to swallow.

    You wonder, Who wants you the way you are? What you think, feel, say, and, believe, is currently benefiting the ones who have done this to you.

    You change that, and you start getting the benefits you want.

    It matters not who you are angry at, just as long as you are angry, for the ones who did this to you…if you aren’t angry at banksters, let it be pretender lenders, or illegals, or the TSA, or anything, just be angry.

    There is a bigger lesson here. It’s not about fighting, its about unconditional love. When we learn the lesson, whether you believe me or not, the problems will go away.

    Until we learn it, we will always deal with what’s happening, and each one has to be part of the change. We all have to remember why we are here. We’ve been asleep and we forgot.

    This is but one catalyst to help us remember, when Mother Nature gives us our big wake up/wind up/snow up/rain up/shake up, we will think this housing crisis was a small issue, and we’ll remember how connected we are, and the MEEK (who remember we are all connected, that we come from the same source, and to love ourselves unconditionally) will inherit the earth.

    Trespass Unwanted, alive, allodial, corporeal, free, freeman, life, live born, born alive, whole blood. (I am not a person, nor a human being, nor a cestui que trust, nor trustee, nor beneficiary, nor an individual, being, agent, guardian, nor representative)

  8. Linda,

    You are now really trying my patience !!!
    What you are reading is from Huffington post.
    I downloaded the article for everyone to read to show the kind of obstacle we the homeowner have to face.

    You are mistaken, I did not write that article.
    I don’t understand you at all.

  9. Ok, Lucy, thanks for the clarification. I guess I misunderstood your intent. You sound ambivalent in your post. You are “torn.” You say that borrowers must accept some “responsibility” and you say “we have to be careful in deciding what renders it truthful,” and “Despite my sympathy for all those who may lose or have lost their homes, I am concerned with the stability of contracts, the rule of law, if they are abandoned at this fragile time in our economy.”

    In your TV example, if there is no contract for the TV there are no payments due. This is done by debt validation. The emphasis here is not if the “debt and default comes from a computer rather than personal knowledge,” it’s if the debt even exists at ALL ! No one can prove ownership.

    Just a few of your comments noted. I thought at first you were a bank attorney, then I wasn’t sure. But in your second post you sound like a real person. lol.

    Anyway, I’m on the side of justice. Sounds like you are doing okay with fending off foreclosure. Good for you.

  10. It is very simple: the foreclosures are not legal because they do not own the debt. Your house was paid for several times by investors, who were bamboozled through the securitization process. That process creates loan smoothies–nobody can figure out which house or what part of a house they purchased or own. It also separates the note and mortgage. You cannot foreclosure with just a mortgage. You must have both halves. MERS splits the note and mortgage the day you sit down at the closing table. The entire process is a horrible Ponzi scheme to enrich a few thousand people at the top of the mega banks and the servicing companies. Sue them! http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  11. Its called “Parallel Foreclosure”. I think eventually the courts may see Parallel Foreclosure as outright fraud since the homeowner was not aprised of it before they attempted to become eligible for HAMP by becoming 3 months late on their mortgage.

    I believe the Federal Hobbs Act, Extortion clause, may be being violated by the banksters, mortgage servicers, and the president of the United States as well.

    http://www.parallelforeclosure.com
    http://www.swarmthebanks.com

  12. Servicing companies which are really debt collection companies are all operating outside the law. Debt collectors throw the Fair Debt Collection Practices Act to the wind. I have heard from a man who had AHMSI as his servicer that he was threatened: We will burn down your house if you do not pay (thousands of dollars). Also, that they would come after his family if he did not pay even more thousands of dollars. They put illegal fees on my loan modification papers after I sent in eight packages. Now, I have sued them. I know that Wilbur Ross, CEO, owner of AHMSI and AHMSI have affiliations with a hedge fund. My fearless forecast is that more hedge funds are part of this foreclosure nightmare. Hedge funds also operate outside the law and without transparency. Why should the world’s economy go to hell for a few Wall Street mega bank thieves? http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  13. ANONYMOUS….. , the reason is after 3 months of default its over- all foreclosure , this is the servicer acting in THEIR OWN SELFISH[lying] interest. 90 days to sale , after 2 payments missed ONLY ALL 3 PAYMENTS will be accepted to cure the default.A lump sum to strangle homeowner &seal the deal. I have played the payment game with them for 30 years!

  14. FOLLOW UP OF MABRY CASE IN CALIFORNIA. CASE REMANDED TO SUPERIOR COURT AND THE FINDING IN THE SUPERIOR COURT ORANGE COUNTY FINDS THAT LENDER DID NOT COMPLY WITH CALIFORNIA CODE 2923.5 AND THAT THE LENDER MUST COMPLY AND START THE PROCESS OVER.

    http://www.scribd.com/doc/43784445/Mabry-Decision-After-Appeals-Court-remanded-Court-finds-that-there-was-non-compliance-with-Califronia-Code-2923-5

  15. Neil – you’re mistaken. It is an article, on the Housing Wire web site.

    And that’s not the final paragraph. In fact, if you read further, that’s just when the debunking starts.

    http://www.housingwire.com/2010/11/22/a-crime-of-omission-the-case-of-the-docx-pricing-sheet

    It goes on:

    “No wonder my sources couldn’t remember seeing it. Who would recall a 10-year-old pricing sheet from a then-much-smaller company in an obscure corner of the mortgage services world?….

    …It’s pretty clear that whomever created the DocX pricing sheet in PDF form posted on Asbury’s blog (I have no idea if Asbury is the original source, of course) stripped it out of an online web site archive. What this means is that this isn’t a secret document, nor is it anything resembling a current one. It was a public document dating back to 1998, and apparently in use through 2002/2003 according to my search of the archives at the Wayback Machine; and it is still a public document, insofar as it’s freely available in the Internet archives for anyone to link to.

    A little additional research shows, too, that the GetNet business line at DocX — the service that spawned the pricing sheet in question — apparently ceased to exist in 2003.

    Let’s leave aside for a moment the interpretation of service line items on this Y2K-era pricing sheet. I wouldn’t claim to truly know what “recreate entire collateral file” ultimately means, for example, although consumer attorneys suggest it means forging documents from whole cloth. (I’ve of course been told otherwise by title industry experts.)

    The real issue here isn’t what’s actually on the pricing sheet. It’s the time frame in which it was actually used.

    How can anyone reasonably suggest that a pricing sheet from a decade ago, for a service line that apparently was discontinued seven years ago, is in any way reflective of recent services? Wouldn’t the fact that the GetNet service line seems to have been discontinued by DocX be just as likely, if anything, to serve as evidence that the service wasn’t broadly adopted?

    Using this same pricing sheet to then attempt to implicate LPS stretches the bounds of the believable, too, given the significant differences in time between when the document originally existed and when DocX was eventually acquired.

    We don’t know for certain what customers DocX had in the 1998-2003 period that used the GetNet service, if any. Nor do we know for certain how a service line that apparently last existed seven years ago has any actual relevance to what is done in document services today — in fact, I’d bet that most borrowers don’t even have the same loan today that they did seven years ago.

    But I can clearly see the effect of omitting such critical information: Consumer groups get in a lather, state attorneys general demand a complete accounting of DocX activities, companies that provide mortgage services get dragged through the mud, and our congressional leaders use the document as evidence to indict the entire servicing industry. That’s quite a coup.

    Foreclosure defense attorneys have been very aggressive in asserting that banks and servicers are routinely lying to consumers; and banks and servicers are now, as a result, subject to intense scrutiny over all of their actions. That’s not necessarily a bad thing, as we’ve seen in the robo-signing scandal and associated fallout.

    But the same level of scrutiny now applied to servicers ought to apply to both sides of this very heated debate, including those making the accusations. That those so aggressively accusing mortgage servicers of lying and fraud may themselves also be guilty of the same is a troubling trend. Because it begs important questions: What other fact patterns have been twisted around? Who can we really trust to tell the truth here?

    Given the political, legislative and judicial leverage that is now at stake in the battle over foreclosures — the outcome of which will largely determine the future of housing finance in this country — doesn’t it make sense for all of us to question what we hear from everyone? Shouldn’t we at least be consistent in the standards we judge by?

    Because in the dispute over foreclosures, as with nearly every other dispute in life, reality ultimately lies somewhere in between two extremes.”

    I’m not being paid for my opinions. I do have some though, and they probably aren’t all that different from a lot of yours. But when I see propaganda – in any form, from any source – that is simply untrue, my blood boils.

  16. Linda,

    I’m with you.

    There is an additional component to this whole mess. Our country does not act in a vacuum without effect on other countries around the world. Our country’s lack of enforcement of any laws on Wall Street has caused harm around the globe.

    As a country, our credibility in business dealings has been shattered.

    The same lack of proper controls and enforcement that has harmed borrowers is also what has harmed the investors. Wall Street and the banksters involved need to be the ones who take the brunt.

  17. Linda,

    I don’t think you understand my point. I wrote that the article made me furious because I’ve been fight foreclosure for almost two years and am still fighting it.

    This retired judge Sarokin is blabbering about nonsense, he should stay retired and keep his mouth shut.

    we have done forensic auditing and fought against unlawful foreclosure but our biggest obstacle is the judge that is presiding our case and doesn’t care about the fact we presented.

    so far our judicial system is very one sided, and even though we have all the proof, what good is it if the judges just don’t care to dig deeper, just like this retired judge Sarokin.

  18. Louis B: “There’s just one problem with all of this: Not one person I’ve spoken to in the industry, including clients of the DocX business unit, say they’ve ever seen such a pricing sheet. Not one. Some even suggested to me that the document might have been fabricated. (LPS, for the record, declined comment.)

    The truth? Can you handle the truth?”

    THE TRUTH? OH, SO WE ARE ALL SUPPOSED TO BELIEVE THAT DOCX DID THIS ALL FOR FREE AND OUT OF THE GOODNESS OF THEIR HEARTS….I SEE…RIGHT…UH-HUH…

    SORRY, LOUIS, WE HERE AREN’T BUYING WHAT YOU ARE SELLING (BS).

  19. trespass unwanted…

    I agree with your premise. We own our homes. But I don’t see how we can fight this beast with Christian values or secured party principles. Those vehicles are simply not in the realm of these bureaucrats… or even the public at large. Perhaps one day, but not now. If they honored these vehicles, they would gladly process our banker’s acceptances that we made out to them for four times the amount of the mortgage. Moreover, so would the IRS.
    Remember. Ethics are only for the ethical.
    I fully understand your anger. I’m angry, too.

    No one cares if the perpetrators have to answer to their Maker after they die. The people need restitution NOW. Right now on this EARTH, “meek” or not.
    ———–

    Another point—
    Some of you come across as being more concerned about the real estate market than your own basic human rights—moreover, you seem more worried about your own paycheck as a real estate professional. Maybe you don’t fully realize what is at stake here.

    The bigger picture here is that our way of life is at stake. All of us are in this thing together. We all live here. So what I do for myself in the name of justice benefits everyone …even if that means I have to sacrifice my own standard of living…which I have.

    Please pull up your bootstraps and stop whining about your commissions. It’s unfortunate, yes. But we are all in the business of survival here, not just you and your occupation.

    We can’t sacrifice justice and the lives of our people to protect a fraudulent system of doing business…or for fear that the housing market will collapse. (As our current administration is wont to do) Who will care about the housing market when they are scavenging for scraps of food and sleeping under a freeway overpass.

  20. Louis B: If it has been debunked, I have not seen the evidence. On the contrary, DOCX, LPS et al are under federal and state criminal investigations for their part in fabricating documents to fraudulently represent that they own an interest in real property, that they own a valid note, and that they are the creditor on an obligation where the borrower was never notified of their actual or possible existence. If the problem didn’t exist, there wouldn’t be people like you trying to poke holes in “theory” when the actual FACTS are being presented in court, in sworn testimony, and other actual evidence. What exactly is your interest here? Are you paid for these false submissions?

    AND BY THE WAY, YOUR LINK IS TO A BLOG. THE END OF THE ARTICLE IS QUOTED BELOW:

    “Here’s the real bombshell about the now-infamous DocX pricing sheet: It is very much real, but it was in use more than a decade ago, and last seen years before LPS actually acquired Docx in late 2005.”

  21. Why isn’t Levitin talking about the fact that even regular defaults (without junk fees) are still caused by the banks themselves and the industry, namely, the inflated appraisals, teaser rates, bait and switch loan origination process, and promises to re-fi in 6-12 months if trouble hits???

  22. Happy Thanksgiving to everyone!

  23. I think the good judge should consider coming out of retirement and going to work for the Mortgage Banker’s Association as a lobbyist.

    Tresspass, good to hear from you.
    ANON: exactly correct!

  24. MAXINE Waters is just getting started. She is from the Hood in Los Angeles. She is gonna get these banksters.

    Good Bye Bank of Amerifraud

    http://www.dailyfinance.com/story/credit/bank-of-america-mortgage-document-errors-trouble-countrywide/19728402/

    HAPPY THANKSGIVING Neil Garfield and company and to all the Bloggers.

    NEVER AGAIN.
    G-D BLESS AMERICA.

  25. OCC RESPONSE AGAINST DEUTSCHE BANK

    THEY LET THE SERVICER RESPOND.

    http://www.scribd.com/doc/40884164/Occ-Office-of-the-Comptroller-of-the-Currency-Response-to-Complaint-10-29-10

  26. Chapter 7 motion for relief opposed by the trustee. motion for relief denied in Missouri Chapter 7

    http://www.scribd.com/doc/43755436/Chapter-7-Motion-Denying-Relief-From-Stay-by-Trustee

    IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF MISSOURI IN RE: ) ) MARTY EUGENE BOX and )Case No. 10-20086 TAMMY JEAN BOX, ) ) Debtors. ) ORDER DENYING MOTION FOR RELIEF FROM STAY BAC Home Loans Servicing LP f/k/a Countrywide Home Loans Servicing (“BAC”) seeks relief from the automatic stay to allow it to exercise its rights under state law as to the Debtors’ real property.The Debtors do not oppose the motion, but the Chapter 7 Trustee has challenged BAC’s standing to seek relief from the stay.The Trustee asserts that the Note and Deed of Trust were not properly assigned to BAC and, because it is not the holder of the Note and Deed of Trust, it lacks standing to seek relief from the stay to enforce those documents.This is a core proceeding under 28 U.S.C. § 157(b)(2) over which the Court has jurisdiction pursuant to 28 U.S.C. §§ 1334(b),157(a),and157(b)(1). Forthereasonsthatfollow,theCourtfindsthatBAC has not proven that it is the holder of the Note.Therefore, it lacks standing, so its motion for relief from stay will be denied

  27. That’s right. And, the longer they dig in their heels, the deeper they dig their own graves.

    Lucy, you are not getting it. Nearly all “loans” made in recent history are UNSECURED. Nearly all have errors. I just found a reconveyance that was filed SIX years after the fact and after a refinance! I can’t find the trust my mortgage was put into to save my life. There is NO evidence of ownership and there are breaks in the chain of title. Yet the SERVICER foreclosed anyway. They don’t own the debt. There were no assignments. If you have a mortgage, perhaps you should have your own paperwork audited.

    I am NOT an isolated case. This is a massive crime wave that has swept and continues to sweep our nation and they are using the courts to endorse it. And you are concerned with the “sanctity of contracts?” WHAT CONTRACTS?
    Show me my “contract” and I’ll pay. But it’s too late for that. I asked repeatedly for documents they failed to provide, I offered them tender of payment and was ignored, I filled out three apps for a loan mod. They blew it. It’s our home now. We paid for 15 years. They can try to throw us out, but they’ll have to kill us first.

    Why not take a stand on the side of JUSTICE instead of waffling the pros and cons of the rules of law? You will be doing a great service to humanity if you utilize the legal system to fight the fraud upon the court that is done by the banks, not Joe citizen taxpayer. Our legal system is not in jeopardy here, it’s our economy, our way of life, and our right to conduct business in commerce in a reliable manner. That is the very foundation, or has been, of this capitalist enterprise.

    Anonymous, that sounds about right. One hand tells you one thing and the other hand denies any knowledge of it. Then they foreclose…just when you wake up to the fact that you’ve been swindled and now you’ve got to find a lawyer or perform a super feat as a pro se litigant.

  28. Thou shalt not steal.

    All of these reasons that it was ‘supposedly’ ‘purportedly’ okay to steal someone’s home is mute.

    You had no right…none…delinquent on a note that you are aware of that was not written out to you? If I don’t owe you, am I delinquent?

    Delinquent on a note that you are aware of, that was scanned into a computer for securitization purposes, in which the original was destroyed so there would not be duplicates? The original, physical, holder-in-due-course (Section 9 UCC – Secured Transactions) is proof of the obligation, not some scanned document in a computer.

    Bifurcate the Note and Deed and somehow you believe that ‘above the law’ you still have a right to enforce them as if it is still a secured transaction and foreclose?

    You know someone is owed money, you don’t know who it is, but you think it’s okay to steal a home and hold it as yours and wait on the day when someone claims to not be paid?

    You are not the ‘Lender of record’, but you think it’s okay to look at a deed, and enforce it because you were the first to show up and want payment and the homeowner refused until you could prove who you were and by what authority you operate, and without an agreement over the real estate (Statute of Frauds) the homeowner wants to be certain the other side of the bargain is kept in that you will release the Deed and Release the Lien upon payment in full?

    You can’t release the Deed and you can’t release the Lien even if the obligation is paid in full, but that’s just tough luck on the homeowner for wanting to buy a home?

    The obligation was satisfied out of our social security trust accounts three days after the transaction, but you still want to hold the homeowner liable for payment so you can pass papers around and gamble on who will pay and who won’t? Another, what we don’t know can hurt us situation?

    You force homeowners into bankruptcy, never telling them what you are liquidating that belongs to them, and so not only have you been paid for the home 10 times over, you have stripped them of their Social Security assets….I bet most of them are ‘unemployed within 6 months to a year of declaring bankruptcy.’ You didn’t tell them they were eliminating their future income from that account, did you? You don’t tell them much of anything…do you?

    You hide behind the bank name, but we know that bank is not ‘alive’ and doesn’t ‘breathe’, and that there is a CEO, CFO, COO, and other chief officers in it that know how to move money from the poor to the rich. You can’t run a company and not know what it’s doing, otherwise the company has to cease operations.

    Congress and the rest are playing on the stupidity of Americans…they know we are still ignorant, because we elect a group of people who are thwarted in making changes and so we move to the party we got out of office because we didn’t like what they had done to get us into this mess…yep…we are ignorant..for sure, and the bankers have preyed on that ignorance, and the elections prove the ignorance.

    In two more years, Americans will be swapping parties again, thinking someone will make a difference. It’s two sides of the same coin…one day they will figure it out.

    Bankers, some judges, and some lawyers, your dirty deeds are marked on the souls for which you’ve affected. Your actions are written in the book.

    You forget the connection. The connection of everyone to each other, and the fact that ‘the Creator within’, knows what you’ve done to me because the same Creator in you is in me…Everything is known..there are no secrets.

    Oh the day will come, will come, will come.

    I worry not about what you’ve done, I rejoice for the day the wheat are separated from the chaff.

    The MEEK shall inherit the Earth. No ifs, and(s) or but(s) about it.

    Trespass Unwanted, alive, life, allodial, free, freeman, live born, born alive, whole blood, alive, corporeal
    (I am not a person, nor a human being, nor a cestui que trust, nor trustee, nor beneficiary, nor an individual, being, agent, guardian, nor representative)

  29. We need foreclosure defense specialists on those panels
    (Neil Garfield) possibly.

  30. Judge H. Lee Sarokin: “… and the injury I see to the rule of rule…” Hear! Hear! Was that a Freudian slip?

    He says in his appeal for “reason”, “On the other hand, the holder of the mortgage must prove ownership, and that information is solely in the hands of the banks and their assignees.” But then goes on to state, “That is not information a borrower would have, and the borrower (defendant) has an absolute right to know that a suit for foreclosure is being conducted by the current holder of the mortgage.”

    Uh, did he write “holder of the mortgage?” What does that mean? Is it the same as “mortgagee?” If not, why not? If “ownership” of mortgage is synonymous with “holder of the mortgage” which is seen by courts as synonymous with “holder of the note,” then the “sanctity of contracts” and the “rule of law” (“rule of rule”?) he says he cherishes so (along with our transparent public records) have already evaporated. Why no concern about that? Discussion?

  31. I think , there at least two different of deadbeats .
    One like walk aways and how about breach of
    HELOC contract by the bank’s and the Owner stop payments.
    HELOC Classaction are still running .
    May be one more Name : CHASE raise Credit Cards payoff from 2 % to 5% , what a lot mortgage payer’s give the rest . You have a contract and pay $ 400 a month and now the want $ 1000 a month.
    That Classaction is in the Supreme Court in February .

  32. This article really got me furious.

    http://www.huffingtonpost.com/judge-h-lee-sarokin/does-the-defense-of-forec_b_787027.html

    Your request is being processed…

    Judge H. Lee Sarokin
    Judge H. Lee Sarokin

    Retired in 1996 after 17 years on the federal bench
    Posted: November 22, 2010 03:18 PM

    I am torn between my sympathy for those who are about to lose their homes through foreclosure and the injury I see to the rule of rule and the economy itself in the way foreclosure proceedings are being challenged and processed. People are angry with the banks and for good reason, but it is important to distinguish the granting of mortgages from what was done with them once granted. The banks may have been complicit in approving bad loans, but the borrowers must accept some responsibility.

    In all fairness, besides discovering that they could not meet the payments, defaults have occurred for a number of other reasons: the value of real estate has dropped; homeowners have lost their jobs or their income has been reduced; balloon payments could not be met; or other unanticipated circumstances have occurred. I watch with some misgivings the army of lawyers lining up to defend foreclosure proceedings, some by taking large fees or second mortgages on the very houses being foreclosed. (NY Times 11/62010 -Taking on a Second Mortgage to Pay the Foreclosure Lawyer)

    The media is full of revelations about the robo-signing of documents supporting foreclosures, and the practice is subject to numerous investigations and hearings. I have watched the video-taped depositions of bank employees admitting to verifying defaults with absolutely no personal knowledge of the facts. Of course, sworn testimony before a court must be truthful, but we have to be careful in deciding what renders it untruthful. It would be virtually impossible in any bank (even in those in which the mortgage remained with the issuing bank) for one person to know how much was loaned and precisely when and how much was paid on account. In this day and age, all of that information comes via computer printouts — not personal knowledge. So verifying that a mortgage is in default and the amount due is never based upon personal knowledge, but rather a search of the records and reliance on those records kept in the ordinary course of business.

    Foreclosure proceedings are not criminal in nature, in which a defendant can sit back, do nothing, and require the government to prove its case. These are civil proceedings and the borrowers and hopefully their lawyers know whether or not the mortgage is in default. To oppose the foreclosure, when both the borrower and lawyer know the mortgage is in substantial default, to my mind borders on the unethical. If indeed there are valid defenses to foreclosure — mortgages not in default, wrong property designated, etc. instances which I suspect are very rare, they should be pursued with diligence.

    On the other hand, the holder of the mortgage must prove ownership, and that information is solely in the hands of the banks and their assignees. That is not information a borrower would have, and the borrower (defendant) has an absolute right to know that a suit for foreclosure is being conducted by the current holder of the mortgage. That is a defense made in good faith and worthy of pursuit. I have reservations about the good faith of challenging the existence of a default with full knowledge that it exists, but none about insisting on proof of current ownership and the right to foreclose.

    Despite my sympathy for all those who may lose or have lost their homes, I am concerned with the stability of contracts, the rule of law, if they are abandoned at this fragile time in our economy. Any and all assistance possible, such as modifications, should be afforded borrowers so that they can remain in their homes, but failing that, our legal system and, in turn, our economy, cannot be jeopardized by excusing persons from performing under their written agreements when they know that they are in default. The person who buys a TV on time, but is aware that she or he is in default, should not be able to keep the TV and not make any further payments just because evidence of the debt and default comes from a computer rather than personal knowledge.

    Even defending foreclosure proceedings for the purpose of delay might seem like a laudable and noble goal, but the reality is that by doing so we are not retaliating against those mean banks that got us into this, but the shareholders, some of whom are homeowners themselves, who invested in these gift-wrapped mortgage packages only to find when opened — that they were worthless junk. Let us do everything we can to aid those in danger of losing their homes through foreclosure, but let us not sacrifice the rule of law and the sanctity of contracts in the process.

  33. I have the original NOTE endorsed in Blank,” Pay To The Order of __________.”with out recourse, signed by the Senior VP of RBMG. I have a sworn affidavit that states a written assignment of the note was never prepared and the SELLER into the securities stated that they WARRANT AND REPRESENT IT HAS NEVER BEEN SOLD TO ANY OTHER ENTITY.EMC(seller) was to sell the note to Bear Stearns which was the depositor into the Bear Stearns Asset Backed Securities,inc. Asset Backed certificate series 2003-2. Bear Stearns was to sell/ assign the Note to JP MORGAN CHASE as trustee of the Trust. There has been a foreclosure started on the mortgage on March, 3 2009 by The Bank OF New York Mellon as successor trustee for JP MORGAN CHASE who claims to be the owner and holder of the note. By way Of an assignment which was recorded at the ROD on March 19, 2009, 16 days after the LIS-PENDENS , and the summons and complaint . I have a letter dated July 13 2002 from Mers that states the loan has been removed from the MERS system and the MIN# deactivated. Mers had no authority to do an assignment and the assignment was done by a known “robo-signor” and in the Corporate name of RBMG that not only deactivated the MIN # but also removed the loan from MERS. RBMG was also defunct and has been since 2005 when it was aquired by NETBANK and subsequently shut down by the FDIC in 2007. The BANK OF NEW YORK MELLON produced in discovery two allonges the first was from RBMG to EMC and the second was an allonge directly to JP MORGAN CHASE from EMC. First thing is the PSA ( pooling and service agreement) the governing document of the securities describes in detail the percise chain of title it also describes who is the seller ,the depositor ,the master servicer and the trust. Even though the sworn affidavit produced by the successor trustee stated no written assignment was ever prepared, so the allonges was a direct attempt to decieve the investors and knowingly a misrepresentation which is fraud. BEAR STEARNS was the depositor into the securities. First let start with the allonges both are undated and one is not even signed: according to the UCC an allonge is only used when there is NO ROOM ON THE ORIGINAL NOTE FOR ENDORSEMENT and must be firmly attached as to become a part of the note. AN ALLONGE cannot be used to transfer interest and is invalid if there is room on the note for endorsements and is invalid it not attached. A lost note was produced from EMC but not anywhere in the document is there a conveyance, it is not a valid assignment. Here is an excerpt from the PSA;BEAR STEARNS ASSET BACKED SECURITIES, INC., Depositor EMC MORTGAGE CORPORATION, Seller and Servicer WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, Master Servicer and Securities Administrator and JPMORGAN CHASE BANK Trustee
    POOLING AND SERVICING AGREEMENT Dated as of June 1, 2003
    BEAR STEARNS ASSET BACKED SECURITIES TRUST 2003-2 ASSET-BACKED CERTIFICATES, SERIES 2003-2
    (DD) The assignment of Mortgage with respect to a Mortgage Loan is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.

    Proper perfected chain of title:
    Originator to seller:RBMG to EMC
    seller to depositor: EMC to Bear STEARNS
    depositor to the trust:Bear Stearns to JP Morgan
    trust to successor trustee: Jp Morgan to The Bank of New York Mellon

  34. How long will this bogus (no pun intended!) story about the “notorious DocX document fabrication price list” keep getting peddled? It’s been thoroughly debunked and yet people keep throwing it out there.

    See this very clear cut investigation of the document that Waters was waving around: http://www.housingwire.com/2010/11/22/a-crime-of-omission-the-case-of-the-docx-pricing-s

  35. There is a particularly egregious article today about an Arizonian trying to save his home.

    This man cooperated with three “trial” modifications with CitiMortgage – but is still slated for sale of his home on Wednesday.

    The real interesting part of this story is that in order to be considered for the first trial loan modification, the man (John) -who was not in default at the time of his loan mod request – was told that he had to be in default for three months in order to be considered for a loan mod.

    After John “cooperated” – and defaulted for 3 months, a trial modification was given and he made the payments. When John requested a permanent modification, Citi claimed to have lost the documents and told John he would have to start all over. John started over – and again made payments on the trial modification. This was repeated a THIRD time. John has no idea where his modification payments went. And, by this time, even though John is paying, he is technically at least six months in default.

    Has anyone considered why servicers will require 3 months of default before a loan modification can be considered? This is standard practice. The answer is that the 3 months actually gives the bank time to dispose of collection rights to a third party – as by prearranged agreements. By 6 months (180 days), the loan receivables are charged off – and collection rights farmed out to an unidentified debt buyer – or “investor” – if you must.

    Assuming mortgage loans were probably securitized – with all documents and procedures in place – (as attorneys falsely love to tell the courts) –
    after 3 months of default a loan works it’s way to the lower tranches of the trust. And, by 6 months – the now non-performing loan collection rights are “swapped” out of the trust.

    Thus, by the time John is asking for his THIRD modification – the creditor (investor – if you must) has changed. And, this new creditor – by purchasing collection rights at a steep discount – can make a nice profit on the foreclosure. No more loan mod considerations for John – he is finished.

  36. Bart, I have set up links to the archived hearings for both the house hearing http://swarmthebanks.blogspot.com/2010/11/watch-cspan3-nov-18-2010-house-meeting.html

    and for the Senate hearing as well. http://swarmthebanks.blogspot.com/2010/11/cspan3s-coverage-of-nov-16-2010-banking.html

    The hearings also feature solid consumer representation and the consumer reps don’t pull their punches. It’s worth watching before assuming that they are shams.

  37. Why is the house holding these hearings? Should not this be with consumer law groups with the public’s best interests in mind? The OCC is “Bank” favored. They protect the “Bank” from the “borrowers”. This is all smoke and mirrors. So all the fraud will be swept under the rug again. Are we all Deer in the headlight’s here?

  38. In terms of keeping track, I set up http://www.swarmthebanks.com so those interested in the entire foreclosure scam can keep track of dozens of foreclosure blogs, (like this one) with update links everytime any of the blogs posts a new article.

  39. Barbara Ann Jackson,

    i could not agree more..
    except NO person alive in the US today that is not asleep,will have any confidence in the our alphabet soup agencies that have enabled this fraud, these agencies are ENEMIES of the state.
    so if we are alone then we have “JUST US” WE should rule Forfeiture
    http://law.jrank.org/pages/6972/Forfeiture.html

  40. HOLY $H1T.. the truth uttered out loud in public .
    so lets see how our complicit /inept /bloated /over paid /utterly parasitic useless gov responds to some truth of the fraudclosure crisis.
    this should be interesting.

    oh yea speaking of “vigilante”
    we need a watch list of “THESE BANKING, SERVICING ,LAW FIRMS..names ,addresses,pic,
    so every john “i got no” doe on the street will know & recognize these vermin for what&who they are.
    we need to let them know 1st hand “JUST HOW WE FEEL” & asking questions like was it- Random Murder Or An Organized Hit?
    http://market-ticker.org/akcs-www?post=173002

  41. Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
    http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#

    “Although increasing numbers of courts are continuing to reject improper and fraudulent foreclosures, the Congressional Foreclosure Panel examination of mortgage services and foreclosure practices did not include foreclosure lawyers.

    Lawyers are officers of the court; knowledge of applicable laws and civil procedure is not required from mortgage lenders. In states that require judicial foreclosures, lawyers are the ones who file lawsuits to seize and sell property; and lawyers are responsible for filing and recording foreclosure property deeds.

    An investigation could prove helpful to sorting out whether improper and illegal foreclosure proceedings are linked to any self-dealing conduct disadvantaging lenders, investors, homeowners, and city governments.

    An investigation could prove helpful to sorting out whether improper and illegal foreclosure proceedings are linked to any self-dealing conduct disadvantaging lenders, investors, homeowners, and city governments.

    Inadequate or questionable foreclosure can lead to useless property deeds that impede real estate sales. Increasing numbers of title insurance companies are refusing to cover foreclosed properties; and certain mortgage default claims, are being denied because of defective foreclosure proceedings.

    Attesting to the need for federal probe of foreclosure lawyers,. . .”

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