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PRINCIPAL CORRECTION IS THE ONLY WAY OUT FOR BOTH INVESTORS AND HOMEOWNERS

EDITOR’S NOTE: First let me remind you that this is not a reduction in principal, it is a correction — because the original figures were wrong and everyone but the borrower knew it. The values used in most loans were so far above anything sustainable that it was like driving a new car off the showroom floor — only worse.

Real estate supposedly doesn’t work that way — but it did, which should tell us that something fraudulent was going on. And what bank would allow such valuations if it did proper underwriting, risk analysis, confirmation of values, and confirmation of income of the borrowers? None, unless it didn’t matter to them because they weren’t taking any risk because they were not just getting a guarantee, they were actually getting the money from an undisclosed third party.

Now for plain realism: don’t expect homeowners to stay in homes where they are so far underwater they have no hope of ever getting out. They won’t take it and American ingenuity is already kicking in with entrepreneurs using the same practices as the pretender lenders — only consensually with the homeowners to beat the system just as the banks are beating the system to get free houses without one dime in the deal.

So reality tells us that if we want to stop the foreclosures there must be a correction in the amount due for the so-called loans (which I believe were part of the issuance of unregistered securities and thus not loan transactions even though they looked like loans). Homeowners must have an incentive to stay and pay instead of flee and free. In fact, the figures show that homeowners are in fact willing to accept a debt higher than the value of their home — just not as high as it is now, because it isn’t going to work at these levels. It was not right when they signed the papers and asking them to accept the same fraudulent deal now when things are obviously far worse is ridiculous. They won’t do it.

Therefore without principal reduction foreclosures will grow, housing inventories of places dumped on the market or knocked down back into the dirt are going to continue to grow. The housing industry will continue to drag the entire economy down along with the hopes and dreams of Americans (which is the fuel behind consumer spending, the main thrust of our economy).

Let’s take an example like the article below. In Arizona, the State has said it would actually pay for half the reduction (correction) if the banks would do it. Of course they are addressing the question to the wrong person.  The servicers and pretender lenders have every reason NOT to modify any loan because once it goes into foreclosure they will get the entire house or the proceeds to cover fees that are never reported or disclosed.

So let’s look at a home whose appraised value was $320,000 in 2007. At that time false (made as instructed) appraisals were regularly coming in at exactly $20,000 over the contract amount. So the purchase price was $300,000. The Buyer puts down 20% which is $60,000 and takes out a loan of $240,000. The buyer thinks this is a safe bet because after all the lending bank confirmed the appraisal (which we of course know they did not). Now the house is worth at most $140,000.

In our example, the homeowner has submitted a modification proposal in which the principal would be reduced to $150,000, meaning he is willing to lose another $10,000 on top of the $60,000 he used as a down payment. Arizona would pay $45,000 and the “lender” would only have to eat $45,000. Thus the lender walks away with $45,000 now plus a $150,000 mortgage without any litigation defenses, for a total of $195,000.

If they foreclose, the proceeds will be under $100,000. If they modify they get $195,000. The answer is obvious.

The proposal is virtually always rejected. Why does Fannie Mae and Freddie Mac reject them even though they probably have (a) no right to do so and (b) every reason to allow it as part of the government and (c) every reason to do so because the “investor” (creditor obviously comes out at least 100% better by accepting modification than by going through foreclosure. So obviously someone else is getting a benefit by forcing the investor (creditor” to take less money in the foreclosure than they get could get in the Modification.

This has become a ripe area of litigation. The numbers are so clear that many judges have completely changed their minds about the intent of the borrowers and the intent of the “banks”.

Freddie and Fannie Reject Debt Relief

By

Home values have fallen so much in Arizona that almost half the people with mortgages there owe more than their homes are worth. So when federal money became available to help stem the tide of foreclosures, the state flagged that group for help.

If banks would forgive some of a homeowners’ mortgage debt, the state said it would pay half, up to $50,000 of a $100,000 loan reduction. Despite the generous terms, most banks balked.

Only three homeowners have been approved for debt reduction since the program began in September 2010. A major obstacle has been that the two largest mortgage guarantors, Fannie Mae and Freddie Mac, will not participate — in Arizona or elsewhere. No loans are eligible for the state’s program if they were bought and held or securitized by the two companies, which are now under government control and guarantee more than 70 percent of the country’s home loans.

“It is extremely difficult for the principal reduction program to be successful” when Fannie and Freddie opt out, said Shaun Rieve, a spokesman for the Arizona Department of Housing.

The companies’ policy against debt forgiveness, or principal reduction, has blocked widespread use of what many have come to believe is an indispensable tool for fixing the housing problem. The state attorneys general have been insisting that debt forgiveness be a part of the multibillion-dollar settlement they are negotiating with big banks over faulty mortgage practices.

Smaller investors and companies that service home loans have stepped up debt forgiveness as well.

Not so Edward J. DeMarco, who as acting director of the Federal Housing Finance Agency oversees Fannie and Freddie. Even though he recently signaled that he might make it easier for homeowners to refinance into more favorable loans, he has held his ground on debt relief. Fannie and Freddie say reducing the principal is bad for business, and as a result bad for taxpayers.

Critics counter that banks and investors have benefited from the government response to the housing collapse while borrowers have largely been left to sink. Last week the inspector general of the Federal Housing Finance Agency said that Freddie Mac had not pursued Bank of America aggressively for compensation for bad loans, despite warnings from a senior staff member.

“It’s sinful, is the word I would use, that they won’t do this,” said John Taylor, president of the National Community Reinvestment Corporation, referring to debt forgiveness. “And the only reason they won’t is they don’t want to realize the red ink that’s already on their books.” They are delaying taking inevitable losses on shaky loans.

White House officials say that although taxpayers essentially own Fannie and Freddie, the administration lacks authority to require Mr. DeMarco to comply with its policies, which encourage principal reduction through a handful of programs. The Federal Housing Administration and the Veterans Administration do not allow principal reduction on their loans either.

Large lenders have long resisted debt forgiveness because of fears that it creates a moral hazard, meaning it could encourage borrowers to take out risky loans in the future because the consequences would not be so bad, or to default to qualify for principal reduction. They argue that other types of loan modifications achieve the same goal.

Proponents of debt forgiveness argue that the failure to reduce debt is hurting the economy, postponing inevitable losses and costing more in the long run. While 28 percent of all loans that are modified go into default again within a year, loan modifications involving principal reduction are more successful. In the latest sign that debt forgiveness might make financial sense to some on the lender side, the nation’s second-largest mortgage insurance company, PMI Group, has found a way around Fannie and Freddie’s policy. PMI, which shares the credit risk in many Fannie and Freddie loans, will pay some underwater homeowners, those who owe more than their home is worth, if they make prompt payments for several years, a de facto principal reduction.

While the company would not disclose what percentage of the principal was covered, a spokesman for the Loan Value Group, which administers the program for PMI, said that on average it was 5 to 7 percent of the loan amount but could be as much as 30 percent.

Fannie and Freddie’s rejection of principal reduction may simply be postponing losses that will occur anyway. Sharon Wells, a retired real estate agent who lives on Social Security, said the modification by Chase Bank of her Fannie Mae mortgage led to an increase in the principal rather than a reduction, even though she already owed about 30 percent more than her home, near Phoenix, was worth.

Ms. Wells, 66, said she had heart trouble and had outlived her doctor’s prognosis, so there was virtually no chance that she would live to pay off the new 40-year term, or that the house would regain its previous value before her death, meaning the lenders would ultimately take the loss anyway. She had been preparing to sell her home and downsize when the market crashed.

“The logical, pragmatic thing, the thing that would have helped this country the most, would have been to write this loan down to a realistic number so we could have the normal buying and selling of homes,” she said.

But Fannie and Freddie maintain that deciding who merits principal reduction raises concerns about fairness. They argue that if future lenders believe there is a chance that borrowers will not have to repay the entire amount, they will price that risk into their loans, raising costs for everyone. The companies say making monthly payments affordable is achieved equally well by forbearance, which allows part of the principal to be subtracted from the calculation of payments and instead tacked on to the end of the mortgage. “We’re not sure what is gained by giving up the right to collect that principal after the forbearance period ends and the borrower has regained financial footing,” said Brad German, a spokesman for Freddie Mac.

But proponents of debt forgiveness say that forbearance does little to increase a borrower’s willingness to pay.

“The banks are trying to shoehorn an affordability fix into a negative equity problem,” said Frank Pallotta, a managing partner of the Loan Value Group, which runs the homeowner incentive program used by PMI. “About 35 percent of all defaults are at least in part strategic,” he said, meaning that even if a financial mishap like job loss is behind a homeowner’s decision to stop paying, being underwater is a factor.

About one in five homeowners with a mortgage is underwater, and the total amount of negative equity is estimated at $700 billion to $800 billion. While many of those borrowers are coping with self-inflicted wounds, the problem is not limited to subprime loans.

Among mortgages backed by Fannie and Freddie, a vast majority of which are prime, the percentage of underwater homeowners is virtually the same as the percentage among all mortgages. The scope of the problem has led to calls for an across-the-board write-down, a solution that is expensive, impractical and unnecessary, says Mark Zandi, an economist at Moody’s Analytics.

“I don’t think the problem is as deep as people think,” Mr. Zandi said. Just enough principal reduction is needed to shrink the share of foreclosed homes on the market, which would allow prices to rise, he said. Homeowners would be less likely to default if prices were increasing, he added. Servicers providing principal reduction have devised ways to limit moral hazard. In Arizona, the program was restricted to homeowners with moderate incomes who had resisted taking out equity loans in the boom. Ocwen Loan Servicing, whose loan modifications top the national average, intensively evaluates the homeowner’s budget before determining if principal reduction would result in a net gain for the investor, who otherwise might face a steeper loss in foreclosure.

After a successful trial program, Ocwen, based in Atlanta, has also begun offering shared appreciation plans, in which part of a borrower’s principal is forgiven, but if the home is eventually sold at a profit, the owner must share that profit with the lender.

As for moral hazard, Steve Bailey, chief servicing officer at PennyMac, a California company that bought shaky loans, said that failure to cut principal was to blame, not the other way around.

“A loan that is modified and left at 200 percent loan-to-value invites the moral hazard,” he said. “You’re telling a person that they need to live in this house that’s severely underwater, paying more for housing than they need to, and looking around their neighborhood at homes that have gone through foreclosure and are available for much less.”

53 Responses

  1. The scope of the problem has led to calls for an across-the-board write-down, a solution that is expensive, impractical and unnecessary, says Mark Zandi, an economist at Moody’s Analytics.

    ——————–

    a solution that is expensive, impractical and unnecessary

    ____________

    for WHO? Mr. Mark Zandi

    EXPENSIVE————-what the hell does that mean

    whee is TNHARRY on all this? Mr. Law.

  2. We trust that the way forward will be a fruitful and happy experience.

    Americans screwing Americans——————-

    OWL

  3. Zandi’s analysis of the impact of an economic stimulus package on the United States economy was cited by Christina Romer and Jared Bernstein in their report on President Barack Obama’s proposed American Recovery and Reinvestment Plan.[4] Zandi uses old-style Keynesian models in the spirit of Nobel Prize winner Lawrence Klein. The utility of such models to gauge the impact of fiscal stimulus has been questioned by Harvard economist Robert J. Barro.

  4. and unnecessary, says Mark Zandi

  5. The scope of the problem has led to calls for an across-the-board write-down, a solution that is expensive, impractical and unnecessary, says Mark Zandi, an economist at Moody’s Analytics.

    http://en.wikipedia.org/wiki/Mark_Zandi

    ——————————-

    as from above article. connect the dots.

  6. M Soliman:

    tell me the specific code number in calif or federal code number or statue.

    thank you.

  7. M Soliman or foreclosureinfosearch:

    tell me more about this:

    “Fifth – The debt collectors have no standing to enforce a deed on a charged off asset.”

    Thanks.

    Pete

  8. The Banks will refuse to write down the principle on the loans for the same reason they refuse to accept an offer of a short sale, especially if the loan carries private mortgage insurance.
    They are going to collect on the insurance, and carry that insurance policy (that you pay for) for as long as they like. Even after they have resold the property at market rate, regardless that it is less than what the original mortgage was, they will continue to collect, claiming it as “loss”.
    In the two years dealing with BofA to short sale a rental property, I was informed that in the case of short sale (or principle reduction), the PMI company is the middleman between the lender and the investor. All deals must come through them. Funny that not one of three offers was ever presented to MGIC. We ended up with them taking “Deed in Lieu”.
    After it was all over I called MGIC to file a claim of mortgage insurance fraud against BofA and was told “Well, we can’t do that. We insure them”.
    I pointed out they are being ripped off.
    She sighed and giggled.
    When I asked her what she would do were she in my situation she told me to “let it go”.
    O.K.??
    Not o.k
    A private investigator knocked on my door one night out of the blue to discuss this situation. She left after two hours with more information than she learned over the last year. I was prepared to give them everything I had discovered. Finally, I thought. I’d get somewhere with this.
    What I wouldn’t give them was the authorization to pull my tax returns back to 2003. All contact ceased. They weren’t interested in me any longer.
    The investigator was legitimately representing the PMI companies, but
    beware allowing yourself to become the target.

  9. …and thank YOU—M.Soliman.

  10. Thanks, tony!

  11. People I will say it again DO NOT SUE. A good offense is a good defense. Let them come to you and then beat them on jurisdictional grounds.

    You must understand bank don’t win because of the facts, they get you dismissed for failure to state a claim. You need to beat them on jurisdiction. Don’t even let them come in the court room with they owe us. Don’t let the judge even get to look at any facts outside of jurisdiction.

    The reason why people are winning is because of standing and real party in interest. Which means jurisdiction, use it I swear it will knock the socks off of them. Then when you beat them on these grounds it will be hard for them to ever come back at you because they lost on even entering the court to state a claim.

    Lawyers know this, stop getting beat because of twombly. Start winning because you wont allow then to get access to lie in the courts. Before any case can be heard the court must be shown it has jurisdiction, and if you dont question it, then it looks like you agreed they had it by consent.

  12. MY ADVICE IS TO HIRE THE RIGHT PEOPLE AND GIVE THEM TILL DECEMBER TO GET BACK THE HOME – OR BE GONE.

    Nine out of ten would honestly, tell me to go to hell. You however get it. Lets do this. Okay! Clean the slate, forget what you read on the internet and start from scratch.

    First premise – MERS is a nominee for a warehouse line of credit unrelated to the loan. Therefore they are immaterial to a foreclosure defense.

    Second- the parties foreclosing are alien to the parties of interest. Defend title.

    Third – If you believe they sold the loan six or more times (which they did under a securities split fee interest arrangement through a not for profit and corpus) then capitation requires them to reverse to consideration to qualify the foreclosure.

    Fourth – if the don’t capitate then they charged off the assets. If they charge the assets – then hello debt collectors.

    Fifth – The debt collectors have no standing to enforce a deed on a charged off asset.

    To borrower my work is to open yourself up to 25 years of experience and analysis. Most cannot and that is why they audit RESPA TILA and Pooling and Servicing analysis.

    Do what it takes to win and careful when you provide service that deal with the public. The state knows who each of us are and what we represent to know. Encouraging demonstrations and rioting is not at all very smart. Calling government officials crooks is insane. If your arguments lack substance your views are strictly for causing civil unrest.

    M.Soliman
    expert.witness@live.com

  13. Here is the Steven Baum , NJ,Foreclosure Attorney , Settlement :

    http://www.courthousenews.com/2011/10/07/MortLaw.pdf

  14. E.Tolle—

    Also, the only “documentation” was my credit report saying “charge off”. Of course, some other entity will probably try to collect, but then I just send them a cease and desist…etc.

  15. E.Tolle—I have a dog-eared copy of Ben Dover’s book “Back Off” re. collection agencies.

    http://www.alibris.com/search/books/qwork/541984/used/Back%20Off%3A%20The%20Definitive%20Guide%20to%20Stopping%20Collection%20Agency%20Harassment

    I can’t find a more recent edition, so it is slightly dated in some areas, obviously.

    I’ve been getting good pointers from it—seems to work so far…the chapter where he talks about “secured” creditors, ie. “the house”—I just take with a BIG grain of salt, because obviously the book was written before all the mortgage/securitization ponzi schemes….

    Per the HELOC, I simply told them (Chase), to “back off”—that I had no equity to cover the bill—that I would soon be filing bankruptcy—that I intend to deal with original creditor—and that it is unsecured debt—and that they are in violation of FDCPA by threatening foreclosure. Send it certified return receipt requested.

    Good luck!

  16. carie, what did you get in the way of documentation?

    BTW, a great video with Michael Hudson over at Yves Smith’s site:

    http://www.nakedcapitalism.com/2011/10/michael-hudson-on-occupywallstreet-and-the-need-to-treat-banks-as-utilities.html

  17. carie, that’s good news on your heloc. I’ve been wondering if I should do the same thing. It’s worthless and they know it, but they’re still trying just the same. Any other pointers? Or did you just state it like you said?

  18. The Fannie Mae/Freddie Mac situation is really irksome. Fannie Mae and Freddie Mac keep getting bailed out by the Government – the tax payers. They aren’t even quasi public/private anymore. I lost money in my retirement on their stock selling it at 40 cents a share. They are in the Government hospital. They are owned and controlled by the government. Why cant the administration pressure them to modify loans, forgive debt – do what they need to do to keep people in their homes. The “joke” here is that foreclosures are a political embarrassment for the White House. People losing their homes doesn’t look good for the administration. So the Govt. props up these entities and all the employees of FNMA and Freddie Mac keep their jobs and what do these entities do? They continue foreclosing and bite the hand that feeds them by embarrassing the administration by foreclosing and foreclosing and making people homeless. What a mess.

  19. Thank you for posting that, b davies.

    In case anyone here cares, I was successful in getting my HELOC “charged off”.
    Originally taken out with WAMU…who “became” Chase. The monthly statements said “Chase is a debt collector”.
    I wrote a cease and desist/dispute of debt—saying I wanted to deal with original creditor, and that since the equity was gone, this was unsecured debt. I also told them they were in violation of FDCPA laws when they threatened foreclosure in writing.

    I did the same thing with my servicer of my fake “mortgage”.
    They are now ignoring me…because they don’t know what to do. The point is they are legally out of gas…and their time is up. There have been millions of ILLEGAL—not just “wrongful”—foreclosures by these entities…I can’t wait until everyone starts suing them for damages…come on all you lawyers out there—that’s your next big paycheck! It would behoove you to figure it out…

    The point is, people need to know what their rights are with regards to debt collectors.
    Which I believe is what the servicers of the FAKE mortgages truly are.
    Just debt collectors trying to collect on unsecured debt—since there were no actual “mortgages” to begin with…unprecedented fraud.

    The AG’s will eventually find this out, when the servicers start getting sued…bring it on, is all I can say.

  20. Massachusetts Preparing to Sue Servicers Over Foreclosures
    Friday, October 7, 2011
    By Jackie Stewart
    Fearing that the megabanks might get off too easy in the multi-state mortgage settlement talks, Massachusetts Attorney General Martha Coakley is preparing to file lawsuits against the nation’s largest servicers for wrongfully foreclosing on customers.

    In a statement released this week, Coakley said that she has “lost confidence” that the banks — Ally Financial, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo & Co. — “will bring to the table an agreement that properly holds them accountable for wrongful foreclosures. Because our office for some time has anticipated that result, we have begun preparing for litigation.”

    At this time Coakley is not formally withdrawing from the multi-state discussions. Other state attorneys general have previously signaled their displeasure in the negotiations with the nation’s top mortgage servicers. The issue of future lawsuits and whether banks will be released from liability for past servicer-related misconduct has proven a sticking point in the discussions.

    Last week California Attorney General Kamala D. Harris withdrew from the negotiations and said in a letter to Iowa Attorney General Tom Miller, who is leading the talks, that the deal being discussed was “inadequate for California homeowners.” In August, New York Attorney General Eric Schneiderman was accused of trying to undermine the negotiations and removed from the coalition’s executive committee.

    Industry observers said that without California and New York onboard, a multi-state settlement would be hard to finalize. If a settlement is reached, the terms will be provided to all 50 states and each attorney general can decide whether to join.

  21. ANONYMOUS “Moral Hazard??””” — It has been an excuse to continue the fraud.Obama not helping by stating that no criminal behavior occurred —- in his words — only “poor judgment” — “creative profit making.” No wonder we have protests.

    Mr. President — who is telling you what to say???

    TRUE …JOHN MITCHELL U.S. Attorney GENERAL WAS NOT ABOVE THE LAW . . .NEITHER IS THE HEAD OF THE DEPT OF TREASURY.

  22. I have testified and won these cases with competent counsel. – I say that only for having done so . I told many a homeowner the same thing I say today.

    Fraud gets you know where FAST! The best jurisdiction for these matters is a US Fed BK court and adversary attorney. I shared with you how to approach a the trustee.

    As the Plaintiffs you allege gross misconduct by the lender by actions of a FDIC member Bank operating behind the scenes. They Lender and Sponsor engaged by the FDIC member Bank took advantage of accounting rules – as long as it could last. And the counter party Bank was left standing with a bad bill of goods. Get it?

    A Plaintiff purports claims for breach of contract, negligent breach of contract, and breach of the covenant of good faith and fair dealing. Real Good Never allege that the Bank has a duty …..

    ** Read what a Judge said – –

    ” . . .duty to cure or modify under the mortgage to “permit [plaintiff] every opportunity available to salvage the Mortgage” (Docket # 1 Ex. A at ¶¶ 82, 90, 97) through reinstatement, loan modification, and refinancing, among other things. According to the courts “No such duty exists, either at common law5 or by the terms of the loan or mortgage” (Docket # 9 Ex. A and B).

    Problematic to the court position is the fact the Lender is removed from the transaction by contribution of assets and not anything to do with a lawful assignment. Bank is the lender by concealment and the combination companies are then sheltered from redress and concealed by MERS Corp. MERS Corp is a platform electronically controlled by the parties for Gods sake!There officers are IT developers. Please Stop!

    Lawful assignment is due consideration and lawful intent, not perfection.

    But I know. It is the AGONY AND THRILL OF THE DRAMA and sheer excitement of a ROBO “POA” signature, Blow up Doll and MERS Crap. argument . Good Luck It will do your estate no good in court. IT WILL DO YOU NO GOOD!

    Understand? Its late in the game and few can even answer the basic questions as follows:

    Who is the lender?
    Who is the seller?
    Who is the issuing registration?
    Where are the loans?
    What s on deposit with a FDIC Member Bank?
    What is the recourse in the deal?
    Who is foreclosing (not a debt collector) .
    Why are there no early assignments?
    Why does MERS have standing?
    What is the basis in assets at time of sale?
    Why did you receive a 1099 after foreclosure (not forgiveness of debt – I assure you )
    Why is the FDIC the hidden key to prevailing?

    Attack my approach if you want. But I was a lender and do know how to foreclose …I never lost a home Bubba

    Before you …Just ask these questions.

    M.Soliman
    Expert.Witness@live.com

  23. As proof they did have your supposed loan.

  24. Enraged –

    Homeowners go to Fannie Mae site and use the lookup tool or are told they have a Fannie Mae loan but that does not make it true. I was told I had a Fannie Mae loan and I even spoke to Mr. Brewster, Fraud Dept. and they could not find my loan. Then they sent me a letter from OFHEO (the old regulator) and told me they made BOA repurchase it. Demand Fannie Mae send you the Underwriting Findings as proof they did have your loqan.

  25. Amen and thank you Anonymous.

  26. The A Man — same to you.

    The problem with principal “corrections” — and why they have not been done to date — is because it would require an entire new contract with disclosure of the fake pretend lender — and an examination of title flaws from start to completion. And “start” begins before the last refinance.

    “Moral Hazard??””” — It has been an excuse to continue the fraud.
    Obama not helping by stating that no criminal behavior occurred —- in his words — only “poor judgment” — “creative profit making.” No wonder we have protests. Mr. President — who is telling you what to say???

    Have feeling Mr. Obama is going to shortly introduce program available for under-water homeowners to refinance —- ONLY IF NOT IN ANY DEFAULT —- What good does that do to help all those that have been defrauded??? What good does that do to expose title flaws??? The reason he will want not in default — is because the “loan” has not left the “stated” GSE lender — YET — so do not need to cover-up with false lender on the new contract.

    This will not help anyone who is a victim of fraud — it will only help victims of a failed mortgage market — and economy — all related — but not the same fraud.

    Want investigations Mr. President — from A to Z. .

  27. […] Livinglies’s Weblog Filed Under: Foreclosure Law News, Foreclosure News Tagged With: crisis, foreclosure, […]

  28. To Neil Garfield Friends and Associates

    Have a meaningful Yom Kippur (Day of Atonement)

    May G-d give you strength (health) and Courage.

    May G-d give us strength and Courage to defeat the evil in this World.

    G-d Bless to all of the people on this Blog.

    NEVER AGAIN.

  29. Dont miss your $8 settlement on CHASE Credit Card Check loans :

    https://www.milgramsettlement.com/Home/CaseDocs

  30. Carrie how right you are.

  31. IT’S SO SIMPLE:

    SHOW ME THE LEDGER—

    SHOW ME THE BALANCE SHEET—

    SHOW ME CONVEYANCE OF MY PAYMENTS TO AN ACTUAL “MORTGAGE”—

    SHOW IT OR SHOVE IT!!!!!

  32. This is what you can expect from state or federal investigations into fraudulent practices in foreclosure. Steven J. Baum’s law firm, probably the largest firm in NY state, has to pay a $2 million dollar fee, with no admission of wrongdoing. This is the firm that Supreme Court Judge Shack slammed in court.

    “There are no excuses for sloppy practices that could lead to someone mistakenly losing their home,” Bharara said in the statement. “Homeowners facing foreclosure cannot afford to have faulty paperwork or inadequate evidence submitted, and today’s agreement will help minimize that risk.”

    In my mind, victims of foreclosure can’t afford investigations that don’t result in prosecutions for fraud upon the court, and that don’t produce real time results for victims past, present and future by these well dressed criminals. Is there anything about this finding of law that will give restitution to those affected? NOTHING!

    Not only does Baum get to claim total innocence, they said, “We will continue to adhere to the highest ethical standards.” What a slam against the justice system. Does anyone recall the homeowner that admitted to fraudulently inflating his income on his mtge app who is serving 6 years for what should also be considered a high ethical standard, if the knife cuts both ways?

    The only good coming out of this is that Baum’s minions can no longer sign for MERS, without jumping through hurdles. The agreement calls for the firm’s employees to halt their practice of assigning mortgages as supposed employees of MERS.

    “Until recently, employees of Baum, with the consent of MERS, had been assigning mortgages on behalf of MERS, even though they had no connection to MERS whatsoever,” according to Bharara’s statement.
    “The agreement calls for the Baum firm to obtain affidavits from clients attesting that they have the original promissory notes or have searched for them….”

    That last line says it all. We looked…couldn’t find it….trust us……the deadbeats owe…..

    http://www.washingtonpost.com/business/baum-law-firm-to-pay-2-million-over-foreclosure-practices/2011/10/06/gIQAJj9aSL_story.html

  33. @enraged

    Here is your answer,,,,,,,,,,,,,,you are a slave……………..unfortunately no know can told what the matrix is, what Fannie Mae or Freddie Mac are……………

  34. Wouldn’t it be considered a “partial charge off”? BUT BY WHO?
    The problem is, who can take or make the discount? Would it be the certificate holders (investors) that bought the stock in the “future cash flow” of each promissory note, or the investors who bought stock in the original lenders’ warehouse line of credit debt that was converted to stock and derecognized by the original lender who has most likely subsequently declared bankruptcy or been seized by the FDIC, or would it be the investors that bought stock in the bonds created by FNMAE and FREDDIE and sold to overseas investors?

    I think that a government edict should be declared that ALL mortgages are going to a 1% interest rate, the principal will be reduced to 80% of Zillow value, whether the mortgage is current, in default or whatever, as long as you can make 12 consecutive pmts you get the 1% rate for a 30 year term. Give folks a 30 day period to “accept” the new rate and value. or stick with their old terms.

  35. IS this a big deal and GOTCHA moment.

    Big Bank Servicer stated in a letter to us that our loan has been sold and we have an investor XYZ 2005-AB-5 for example.

    Big Bank Servicer was also Big Bank lender and sold my loan. Big Bank stayed our Servicer….and stated in a letter that BIg Bank servicer has the orginal note in there possesion, custody, and control.

    DOESN’T THIS VIOLATE THE PSA, I thought the NOTE had to be forward to the Trust per the PSA, by a certain date?

  36. “Barack Obama slept through his securities law class at Harvard. That’s the only explanation I can offer for his answer to Jake Tapper’s question at a press conference Thursday. Tapper asked him about the failure of his administration to prosecute a single Wall Street executive. From the transcript.

    Well, first on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehmans and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless….

    By “a lot of stuff”, the President means everything that happened, from fraudulent sales of real estate mortgage-backed securities, to Repo 105, to filing false affidavits in foreclosure proceedings. He knows this even though there have been no criminal investigations, no FBI inquiries, no Grand Jury subpoenas, and apparently no review of independent investigations. For him, this isn’t about law. He just knows that the immoral and inappropriate and reckless behavior that caused the Great Crash and the Lesser Depression wasn’t a crime.”

    http://firedoglake.com/2011/10/07/president-clears-wall-street-of-crimes/

  37. “Because the American people ultimately own or guarantee the majority of the country’s home loans through taxpayer-owned Fannie Mae or Freddie Mac, a government-approved program of principal reduction could have an enormous impact [24], even without buy-in from other mortgage servicers.

    But the federal regulator who oversees Fannie Mae and Freddie Mac has refused to consider principal reduction, because it would be bad for Fannie and Freddie’s bottom line. (They are still $141 billion in the red after a taxpayer bailout [28].) Proponents of principal reduction argue that Fannie Mae and Freddie Mac will have to deal with the decline in home values eventually [29]—and by keeping losses off their books at the moment, Americans are losing their homes.”

    http://www.propublica.org/article/our-guide-to-obamas-floundering-foreclosure-programs

  38. Niel,

    Do you have a private blog or a place to post comments to that they are not available to the plaintiffs?

  39. Come on, Neil, really??? “Principle reduction” on fraudulent false default debt that’s also involved in criminal insurance fraud??? We need you to help reveal the WHOLE truth…not drive us crazy…

    Check out this Dylan Ratigan clip:

    http://www.msnbc.msn.com/id/31510813/#44791981

    from video:

    “…you hear though money going to state judicial campaigns, and you start to think about auctioning judges…”

    “…justice for hire, and what you have now in approximately 40 states where judges can run for election or re-election, they can raise money from the interests that can appear before them…”

    “…you’re making it up…”

    “…it’s actually worse I think in the Federal campaign system…”

    “…don’t tell them down in Zucati square…”

    SO THAT’S WHY THE JUDGES ALWAYS SIDE WITH THE BANKS EVEN WHEN IT’S OBVIOUSLY AGAINST THE LAW.

    You can throw up now…

    getmoneyout.com

  40. and another,,,,,,,,,,

    http://www.huffingtonpost.com/2011/10/04/new-york-state-sues-bank-_n_994997.html

    HOW MANY MORE STATES SHOULD SUE THESE GUYS?

  41. Neil ,

    You once again referred back to private individuals stepping into the pretender role and consensually acquiring the property ..

    http://livinglies.wordpress.com/2011/09/28/entrepreneurs-if-the-banks-can-do-it-why-cant-i/

    I am unclear about one aspect only ,,, how is the “assignment of litigation rights” transferred? I haven’t seen any such document..

    A fabulous house in my neighborhood just went to auction and the pretender was VERY vulnerable from the docs I reviewed, it would have benefitted both me and the homeowner to hand them $10k to start over .. I’m looking for that last (and most important) piece to the puzzle ,, can you point us to any cases where we can pull the docs from (preferably Florida) ??

  42. North Dakota has a state bank that services the local banks. They are not involved with the mortgage mess. and all profits from the state bank go to fund the state.

    Wall St does not want state banks, why?

    So they can do things like this:

    http://www.tampabay.com/blogs/the-buzz-florida-politics/content/ag-bondi-sues-bank-new-york-mellon-overcharging-state-retirement-fund

  43. Wall Street, it’s a toll booth, there to take little bits of money from the masses, where your pension and 401k’s and IRA’s are stored for safekeeping, but underneath the surface we have grown men taking little bits of fees which add up to billions and great big bonus’s……….

    all on the back of your hard work…………..

    THIS IS A COMMENT FROM HERE:

    http://www.selectsmart.com/DISCUSS/read.php?16,860484,860484#msg-860484

    I am glad he is exposing this fraud. At least now because of his nailing of Madoff he has some public credibility so the media has to pay attention now. But sad to say that it is nothing new under the sun. Back in the 1960s and 70s I worked for the firm of Hayden Stone which at the time was the 4th biggest firm on Wall Street. Well it seems as if our Board of Directors loaned pension and profit sharing money to an outfit we had brought public, namely King Resources. Not only was it a conflict of interest but illegal as hell and King Resources went “belly up” at about the time we were being bought out by CBWL ( Cogen Berlind Weil and Levitt) A condition of purchase was that all of us who got screwed by the illegal loaned had to sign a waiver. It was extortion of a type because if we did not hold the purchaser harmless then they would not do the deal and Hayden Stone would go bankrupt and we would get zip. I was a minor partner I think I eventually got around $30,000 which was around 10%. You might recognize a couple of the names; Sandy Weill who turned Hayden Stone into Smith Barney and was head of Citi Group during the economic crisis. Arthur Levitt was one of the infamous people who torpedoed Brooksley Borne when she advocated regulation of the derivative market. He was also a former head of the American Stock Exchange.
    Now you know why when the Communists took over a country they would execute all the bankers.

    The thing that still astounds me about the economic meltdown is that the people involved knew or should have known that it was smoke and mirrors. In the Madoff case anyone who looked at one of his statements could instantly tell that it was not on the up and up. The meltdown was precipitated by the derivative markets. The catalyst for expansion of the derivative markets was a pricing mathematical model called the Black–Scholes Model. Scholes won the Nobel prize for the model. It took me exactly 15 minutes to find the flaw in the model and anyone could do it. In my time on Wall Street I was a commodity trader and I charted every day an “open high low close graph of several commodities. And by charting I mean pencil in hand and chart paper, no computer etc. Looking at a chart is no substitute. What was the fault of the model? Well it was utopian (like GOP economics) and discounted the extreme event. It was not a real world model. And if that is not enough Scholes was co-founder of Long Term Capital Management a hedge fund that went buts to the tune of $5 billion in 1998.
    The amazing thing is that no one other than Madoff is in jail.

    And it is not a matter of “being smart” these people all qualified as “the brightest guys in the room” and I do not qualify. But I am passably bright and well read with certain applicable experience. The answer lies elsewhere. Ego? Greed?
    You think you live in a democracy? That is a fvcking joke

    ——————————————

    THIS IS THE ORIGINAL ARTICLE:

    http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/6_Madoff_Whistleblower_Tells_KWN_Banks_Stealing_From_Pensions.html

  44. I have a huge problem with Fannie and Freddie: both contributed over the years to create the shambles we are in. Both were heavily bailed out, if I understand well, and are owned in majority (if not in totality) by us, tax payers. Why are they still in existence? And why do they have any say into modifications v. liquidations? Why are we consulting them and asking them for their opinion?

    What seems to be killing our country is that it has become some kind of hybrid system with private entities still acting as such while having become “nationalized” to a certain extent. So, they are taxpayers responsibility when they need money but they are not accountable to those same taxpayers. Fannie and Freddie depend on us for their survival but do everything in their power to keep catering to the banks.
    To me, it is the worst possible case of biting the hand that feeds them.
    Well, i don’t like being bitten. And I sure as hell won’t accept it from someone I keep feeding extremely well, at the expense of my own meals.

    It blows my mind! Isn’t it time we, taxpaers, decided whether we believe that they still have a role to play and in what capacity? Our country has become “socialized” to help banks but still refuses to grant taxpayers any of the amenities true socialism would give them: universal health insurance, solid regulations to protect them against hard core deregulated capitalism, social services worthy of that name. Fannie and Freddit seem to keep the best of both worlds while we keep getting screwed under both same worlds.

    What am I missing? Why aren’t true capitalists up in arms, demanding their dismantlement? What are they actually accomplishing and for whom? If the banks benefit from that situation, let them reimburse everything thrown into Fannie and Freddie and take responsibility for them. If we do, then i don’t see why we should give them any power over anything.

  45. The madness in all of this alleged possibility of “moral hazard” is that it ignores the other party of these deals. Why would a financial institution deliberately hand out a so-called loan that they know won’t be repaid? Why doesn’t the press ever ask this question?
    It is always the alleged borrower who is responsible according to many in our media – what kind of craziness is this?!

  46. What about title issues you constantly warn about. Do these go out the window?

    What about the millions whose homes were stolen. Do you forget about them. What’s their solution

    What about the next round if defaults after the solution fails to solve the financial crises of unemployment, health issues and of course the overweening greed of servicers.

    I thought your position was that this was a systemic land grab. How does this solution remove the underlying scheme

    Or did I misunderstand even having followed this blog for months

  47. Eventually this issue of bank credit vs bank money is going to be on the forefront as many besides me are questioning what went wrong with our rights under the US Constitution .

    Fannie and Freddie certainally have a legal department that knows what our Constitution says and when this nation realizes that what the Constitution says is the paramount law of the land, the victims will have again been cheated. Now is the time to get it right, not look for quick fixes.

  48. Modification or restructuring the loan is not the issue .The issue is the Banks are doing something illegal from day one when they tell you they are lending you their money when all they are doing is lending you their credit, which is prohibited by our US Constitution.
    (Art 1 Para10 Cl 1.)

  49. good morning, scanning email this am but need to leave. i read the 1st few sentences and needed to comment and will read rest later. when i pulled all my mortgage paper work out the file in 2009 after i was being railroaded by wells fargo losing every piece of paper work i sent. i new something was up. in my appraisal. it ha straw bought house adding 20k to value remember it started low to see what they could get away with from 20k in boom fook florida became millions in miami and california. i also had a home sold with in 6 months profiting over 50k. these 2 comparatives in normal market standards would have been discarded but the appraisers had to come at or aboce contract price and this was the only way. i was questipned on 2009 to prove appraisal fraud hmmmmmm

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