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But she also revealed in some instances, they would be final. In some cases, a borrower would not be able to bring future claims against the servicer if he or she takes the payout.”

I don’t think the American people are going to continue to endure these hardships when they realize that the banks are getting paid over and over again for the same non-existent mortgages securing the same defective promissory notes evidencing the same fraudulently induced obligations. Neil Garfield,

EDITOR’S COMMENT: Whether it is through the deal with the attorney generals, or through the modification process or now, through the OCC review process, the Banks are hell-bent on getting amnesty for their infuriating behavior. They will try to slip in language to almost anything you sign to get you to waive rights against them or to have them deemed waived, creating one more layer to penetrate when you go to court. It’s a good strategy for the Banks and a really bad idea.

No matter how you cut it, we are still dealing with a process in which the assumption is that the problem was just a “paperwork” issue. It was not. The main problem is well known to the banks involved in the securitization scam. And now they are trying to get it solved in the settlement with the attorney generals — leaving the rest of the country to deal with the Great Title Crisis in the years to come.

The main problem is the loan origination. It broke all the rules and everyone knows it. They used straw-men without disclosing even the possibility that there was a principal much less identifying the principal. They cooked the applications and gave loans out knowing and hoping they would fail so they wouldn’t have to account for how much money they stole from investors before the loan failed.

Under existing law there is a high probability that the mortgages were never perfected into liens, and so the loans are unsecured obligations that can be discharged in bankruptcy, with the homeowner keeping the property if homestead laws permit it. There is an equally high probability that the loan has already been converted into unsecured obligation by virtue of rescission that many homeowners sent to servicers and “lenders” which were routinely ignored.

What they are trying to do is to give value to figures on their balance sheets which right now are made out of smoke and mirrors. And in their process, the transfer of wealth from the middle class and now some new “poor” people has been catastrophic to the nation and the world. The truth is that they used other people’s money to fund the mortgages and pocketed a substantial portion of the money advanced by investors instead of using it to fund mortgages. They had no losses but they got insurance and federal bailouts.

Everything that is happening in the courts, in regulatory actions, and in politics and the press is essentially missing the point. They are based upon false premises. And maybe it will indeed work out for them in the end. But I don’t think the American people are going to continue to endure these hardships when they realize that the banks are getting paid over and over again for the same non-existent mortgages securing the same defective promissory notes evidencing the same fraudulently induced obligations.


A mortgage servicer may be granted a waiver from future claims depending on what sort of remediation a borrower gets from the foreclosure reviews conducted under federal consent orders.

Independent consultants, approved by the Office of the Comptroller of the Currency and the Federal Reserve, will review nearly 4.5 million foreclosure files over the next several months. They will be looking for any harm caused by improper practices uncovered last year.

The OCC, Federal Reserve and the 14 largest servicers are working out how to pay for any borrower claims for which consultants find the banks culpable. OCC Chief Counsel Julie Williams faced down skeptical lawmakers in a Senate subcommittee hearing Tuesday, pledging the consultants were independent and that the reviews would be thorough.

But she also revealed in some instances, they would be final. In some cases, a borrower would not be able to bring future claims against the servicer if he or she takes the payout.

“There could be situations where it may be sensible where a servicer gets a waiver. If the borrower gets the home back, expenses paid, maybe a lump sum payment on top of that, for a package of remediation like that, a waiver would be appropriate,” Williams said, adding that borrowers would be able to make that decision before agreeing to the deal.

A mailing campaign began Nov. 1. Borrowers who went through the foreclosure process at some point in 2009 or 2010 are eligible to apply by April.

It’s still unknown how any borrowers affected by the problems will be paid. The OCC provided 22 examples for what would constitute a “financial injury” (found on page 13 of Williams’ testimony).

But on the form filled out during the claims process, borrowers will have other options.

“The way the form is designed is it clusters some specific questions around the injury guidance,” Williams said. “But there is a portion of the form where the borrower can tell their story. What we want is the borrower to tell their story for how they were injured, and we will certainly try to get the message out about those.”

Anthony Sanders, a professor of finance at George Mason University, was concerned about the cost and time spent during the reviews, which may not net very many actual claims. He estimates the reviews will cost more than $11 billion if costs $2,500 per loan file. He said he expects less than 100 instances of wrongful foreclosures on military members and less than 50,000 modification errors would be found.

“In terms of technical errors (such as robo-signing), it is difficult forecast how many there will be, but technical errors like robo-signing should not result in any financial harm to borrowers since they would be foreclosed upon after the documentation error is corrected,” Sanders said in testimony.

It is still up in the air how borrowers would be compensated for robo-signing, the term used to describe how servicers and their third-party firms signed foreclosure affidavits en masse without review of the loan documentation.

According to Williams’ testimony, one of the examples of financial harm would be when “the servicer was not the proper party, or authorized to act on behalf of the proper party, under the applicable state law to foreclose on the borrower’s home, and this resulted in or may result in multiple foreclosure actions or proceedings.”

Konrad Alt is the managing director for Promontory Financial Group, which is conducting the reviews for Wells Fargo (WFC: 25.94 +0.58%) and Bank of America (BAC: 5.2311 -1.67%). He said they are still waiting on direction from the OCC on whether robo-signing would result in a pay out to the borrower.

“Many things can go wrong with a mortgage or a foreclosure, and reviewing a particular file to ascertain what if anything did go wrong can be both difficult and time consuming,” Alt said.

The OCC did not disclose any past history between the consultants and the servicers but Williams did assure the subcommittee it caught any conflicts of interest. The Fed has not released engagement letters, yet.

Chief Counsel Scott Alvarez said in written testimony he expects the Fed “to disclose significant portions of the final engagement letters, consistent with the need to protect proprietary financial information and personal privacy.”

“We believe we are independent,” Alt said. “Our entire business model is based on independence not only in this instance but in all instances. If we fall short in this manner it would be fundamentally detrimental to our long-term success.”

Lawmakers on the subcommittee were not convinced the reviews will be transparent nor fair enough. Foreclosures will continue for those borrowers still in the process while being considered for remediation, and some senators were concerned the servicers were given too much room when choosing the consultants.

“The last thing homeowners need after so many challenges is one more process where there’s not full and accurate disclosure. The failure to stop the foreclosure process while saying there may be a remedy is a continuation of this,” said Sen. Jeff Merkley, D-Ore. “It’s disturbing.”

Write to Jon Prior.

Follow him on Twitter @JonAPrior.


21 Responses




  2. 12-15-11 California Congressmen write letter to Obama in support of AG Kamala Harris for not joining multi state settlement (foreclosure) with big banks

  3. trespass unwanted said:

    “Many people now have entered into new agreements for modifications. Those replace the earlier contracts that were with servicers that could have been in fraud. Last in first out. New deal wipes clean previous deal and creates new liabilities.”

    I’m not clear what you are saying here. What earlier contract with servicer, for instance? “New deal wipes clean previous deal”…..?

  4. @pendinglawsuit – I haven’t been able to find the actual complaint
    and have trouble with those scribd links fwiw. I’d like to read the
    complaint (I note the docs which are there may not be downloaded)

  5. Just say NO to bank amnesty, whether it’s a form they try to get a signature on, an act passed by congress or a deal cut with the state AG’s. Bank amnesty is the wrong thing to do! Look at what they’ve done to the world economy. Look at what they’ve done to decent, hardworking people! A lot of senators and representatives are going to be out of work next year, if they approve bankster amnesty. Beat back any support through emails, phone calls and letters.

  6. @carie
    Many people now have entered into new agreements for modifications. Those replace the earlier contracts that were with servicers that could have been in fraud. Last in first out. New deal wipes clean previous deal and creates new liabilities.

    Foreclosures between 2009 and 2010 were without form. They were cookie cutter and most likely violated state laws. Now they take their time taking the homes. They offer mods, let the homeowner pay a while, reduce the money supply, let businesses lay off, let the homeowner not be able to pay and foreclose, or they talk the homeowner into a refi – new contract – and foreclose on issues that arise in it.

    I saw the OCC letter sent. Automatically, I knew it was done by an attorney. There was a lot of ‘boxing in’ of things. Notice all the boxes. Legally they are separators of specific items. If you ever got a traffic ticket, you’d notice how certain things are in the ‘box’ on the ticket.

    Anyway, the application is targeted to box the homeowner into disclosing how much they were harmed, and (tries to get you to provide receipts to prove the injury). Well I don’t have receipts for the emotional distress, or the money spent renting the truck, or the time spent packing and cleaning that took from my life. I don’t have the receipts for the times I could have fallen ill from stress and missed life experiences with my family and friends as I tried to provide an answer within 7 days of a court case. I don’t have receipts for the sentimental gifts I had donated because there was no place to put them when I moved to a smaller space, or for the deposits to establish another residence. The servicer knows how much they got off the promissory note, how much insurance, and bailout was paid for their pretending my promissory note was a liability. I want that money too, the money that would have come to me if they weren’t the third party intervener. There were so many Fair Debt Collection Practices violated, a state Constitution article about protection of property, Statute of Frauds, Deceptive Trade Practices, Contract Law, Trust Law, Business Code, Deprivation of Rights, Undue Influence, corruption of property title, slander, filing false reports claiming a loss of a right or injury, placing our identities in the public records, identity theft since they didn’t own any obligations they claimed used our identities to push their agenda, corrupting credit records, penalties for all the refused car loans or refused home purchase or for having to pay penalty interest rates for fraudulent credit reporting (more undue influence), loss bonus pay or promotion for failing to perform while working to keep our home, or lost wages for losing a job for not having the focus required to keep the home, relative damages that family members experienced and more.

    Seems to me, they need to do the review, realize they are liable for damages and then offer up a remedy instead of trying to box me into an amount so they can feel good about the situation. After seeing that link about a $500,000 home making a back $9 million dollars, plus figuring out what they got in insurance and bailouts, well, there is no amount i could give that would hurt them. Maybe settling for last year’s bonus the CEO received would be a start.

    They don’t need to ask me if I was injured. I didn’t do a pro se nor pro per, I just responded to the suit and fully documented the damages by violation of so many laws already in place, and there are the damages incurred because while someone is in my home and I am somewhere else, i could be receiving what the ‘replacement family in my home’ is paying as income.

    April 2012 is the postmark date, eh? Seems they have to do the review anyway, because they obviously know I fall in the category, and they obviously know there was a court case and an eviction.

    Maxim of Law: (paraphrasing) One cannot convey a right they do not have.

    How can a servicer convey a right to a law firm to remove a homeowner from their home when they had no right to claim the property as their own?.
    End Opinion

    at arm’s length
    Trespass Unwanted, life, corporeal, free, jure divino, in jure proprio

  7. ANONYMOUS—is there ANYONE out there who knows exactly what to do with this law (below), to keep people in their homes? I mean, if it’s a Federal Law—why aren’t more lawyers understanding what to do with it?

    you said:

    “…Under TILA— the Truth and Lending Act (Amendment), 15 U.S.C. 1641 (g), it is required that the CURRENT Lender/Creditor, with contact information, be provided. Further, the Federal Reserve Opinion to the TILA Amendment is available to review as to definition of LENDER/CREDITOR. See 74 Federal Register 60143 (November 20, 2009) Final Rule 75 Federal Register 58489 (September 24, 2010)…”

  8. Enraged,

    Fraud upon the court — has no statute of limitations.

  9. TILA violations apparent — to start — by the TILA Amendment, which must be used in conjunction with Fed Reserve Opinion (now Rule to the law).

    No one knows their creditor, no one knows how their creditor came to be, no one knows how their “loan” came to be, everyone can show that “loan” is not in stated trust by tearing apart PSA, security investors are not the creditor/lender, and servicers are not the creditor/lender. Servicer acts on someone’s behalf – and that could be anyone. Servicer will not disclose.

    Not criticizing you. Everyone here is in this together. And, I know battles in court are extremely difficult. There is no easy solution. But, we are learning what could work and what does not work. Does not work if anyone tries to claim that debt was already paid by someone else. This will NOT work. Most important, debt was never a mortgage. And, that is my point here – banks want amnesty for so-called “mortgage originations.” But. these “loans” were not mortgages — and the banks know it. They are demanding amnesty for their most liable offense — the origination itself.

  10. @Anonymous,

    Possibly. I’m not an expert. I’m a fighter who sued the servicer in federal court before anything bad happened to me… If you have a better answer for Carie, please be my guest.

  11. TILA

  12. Enraged,

    Big mistake you make as to any borrower that was in a refinance. You need to go back PRIOR to the refinance. Unless you do that, you are operating in the dark.

  13. Neil — forget the getting “paid-over” — it does not work. Debt collection is hard core and will not allow anyone to get away with this. If someone else pays for you, you owe that party.

    The problem is that party will NEVER disclose itself because the “loan” was fraudulent to being with. And, by failing to disclose themselves in collecting process, they have caused significant damages and harm – never mind violation of federal law.

    You need to rethink agenda. But AGs may do that before you have that opportunity. We have had the opportunity to expose to AGs, and claiming “paid-out” — has been worthless. .

  14. @Carie,

    Have you studied all your statements and found any Tila, Respa violations? I would suggest you go through each one, one by one, and look at how much was applied to your interests, how much to your principal, whether fees not listed on the statements were added, whether you see something titled “suspense account” (money not applied to anything and simply kept by the bank), discrepancies between the date you sent the check and the date the bank actually posted the payment (they did that to be able to claim late payment and add fees), etc.

    If you can asnwer yes to any or all of that, I can send you a copy of my complaint. Now, other than BK, filing a complaint is the only way to get to federal court, as far as I know.

  15. Does anyone have a good idea of how to get the banksters/servicers into federal court where I can have the judge get them dismissed on subject matter jurisdiction—based on the fact that they are not real party in interest—don’t own the note—and have no standing?
    Would filing a complaint be the ONLY way? What would the complaint be?

  16. @johngault,

    I’m right there with you. I would rather go it alone and take the risk of losing whil;e keeping the satisfaction of having fought long and hard than knowingly and willingly accet to be thrown under the bus by my own government too coward (corrupted?) to do the right thing and prosecute proven and long-lasting fraud.

    That OCC review is another half-assed measure that doesn’t restore our economy, doesn’t return our houses to us, doesn’t compensate us for the hell we went through, doesn’t indemnify us against future hell, doesn’t create jobs, doesn’t return our pension plans, doesn’t do… jack for any of us. People who are afraid might jump on it. I won’t.

    No. No way. No how.

  17. A tort, in common law jurisdictions, is a wrong
    that involves a breach of a civil duty (other
    than a contractual duty) owed to someone else.
    It is differentiated from a crime, which
    involves a breach of a duty owed to society in
    general. Though many acts are both torts and
    crimes, prosecutions for crime are mostly made
    by the state, private prosecutions being rarely
    used; whereas a person who has been injured may
    bring a lawsuit for tort. It is also differentiated from equity, in which a petitioner complains of a violation of some right. One who commits a tortious act is called a tortfeasor. The equivalent of tort in civil law jurisdictions is delict.

    Tort may be defined as a personal injury; or as “a civil action OTHER than a breach of contract.”
    A person who suffers a tortious injury is entitled to receive “damages”, usually monetary
    compensation, from the person or people responsible — or liable — for those injuries.
    Tort law defines what is a legal injury and, therefore, whether a person may be held liable for an injury they have caused. Legal injuries are not limited to physical injuries. They may also include emotional, economic, or reputational injuries as well as violations of
    privacy, property, or constitutional rights.
    In much of the common law world, the most prominent tort liability is negligence. If the injured party can prove that the person believed
    to have caused the injury acted negligently –
    that is, without taking reasonable care to avoid injuring others – tort law will allow compensation.
    However, tort law also recognizes intentional torts, where a person has intentionally acted in a way that harms another, and “strict liability” or quasi-tort, which allows recovery under certain circumstances without the need to demonstrate negligence.

    Categories of torts
    Torts may be categorized in several ways: one such way is to divide them into Negligence, Intentional Torts, and Quasi-Torts.
    Negligence is a tort which depends on the existence of a breaking of the duty of care owed by one person to another….. Negligence (think deed of trust trustee – sic) is a breach of legal duty to take care resulting in damage to the plaintiff. This definition of negligence can be divided into four component parts that the
    plaintiff must prove to establish negligence.

    The legal burden of proving these elements falls upon the plaintiff. The elements in determining the liability for negligence are:
    The plaintiff was owed a Duty of care
    There was a Dereliction or breach of that duty
    The tortfeasor directly caused the injury [but for the plaintiff’s actions, the defendant suffered an injury].
    The plaintiff suffered Damage as a result of that breach
    The damage was not too remote; there was proximate cause.

    Duty of Care The first element of negligence is the legal duty of care. This concerns the relationship between the defendant and the plaintiff, which must be such that there is an obligation upon the defendant to take proper care to avoid causing injury to the plaintiff in all the circumstances of the case. There are two ways in which a duty of care may be established:
    the defendant and plaintiff are within one of the ‘special relationship’; or outside of these relationships, according to the
    principles developed by case law.
    There are a number of situations in which the courts recognize the existence of a duty of care. These usually arise as a result of some
    sort of special relationship between the parties. Examples include one road-user to another, employer to employee, manufacturer to
    consumer, doctor to patient and solicitor to client.

    Dereliction or Breach of that duty
    Dereliction of duty generally refers to a failure to conform to rules of one’s job, which will vary by tasks involved. It is a failure or
    refusal to perform assigned duties in a satisfactory manner….It may refer to a failure by an organization member to abide by the
    standing rules of its constitution or by-laws or perform the duties of the position appointed to…

    Statutory torts
    A statutory tort is like any other, in that it imposes duties on private or public parties; however, they are created by the legislature,
    not the courts.
    Intentional torts
    Intentional torts are any intentional acts that are reasonably foreseeable to cause harm to an individual, and that do so. Intentional torts have several subcategories, including torts
    against the person, including …intentional infliction of emotional distress and fraud.
    Property torts involve any intentional interference with one’s property rights. Those commonly recognized include trespass to land, trespass to chattels (personal property), and CONVERSION.

    Vicarious Liability
    The word ‘vicarious’…in tort law refers to the idea of one person being liable for the harm caused by another, because of some legally relevant relationship. An example might be …an
    employer and an employee. You can sue an employer for the damage to you by their employee (think MERS’ member employee executing a self-assignment to his employer – sic or bs
    lying affidavit / declaration) which was caused “within the scope of employment.” This is called respondeat superior. …The law replies
    “since your employee harmed the claimant in the course of his employment, you bear responsibility for it, because you have the
    control to hire and fire him, and reduce the risk of it happening again.” (This is probably one of the reasons the attorney would not sign the statement Judge Schack (NY courts) wanted – that and the attorney’s license to practice law)

    The main remedy against tortious loss is compensation in ‘damages’ or money.
    Overlap with criminal law
    There is some overlap between criminal law and tort, since tort, a private action, used to be used more than criminal laws in the past. For example, in English law an assault is both a crime and a tort (a form of trespass to the person). A tort allows a person, usually the victim, to obtain a remedy that serves their own purposes
    (for example by the payment of damages to a person injured in a car accident, or the obtaining of injunctive relief to stop a person
    interfering with their business). Criminal actions on the other hand are pursued not to obtain remedies to assist a person (victim –
    sic) although often criminal courts do have power to grant such remedies – but to remove their liberty on the state’s behalf. That
    explains why incarceration is usually available as a penalty for serious crimes, but not usually for torts.” Doesn’t explain it for me.

    The more severe penalties available in criminal law also means that it requires a higher burden of proof to be discharged than the related tort…
    Many jurisdictions, especially the US, retain punitive elements in tort damages, for example in anti-trust and consumer-related torts, making TORT BLUR THE LINE WITH CRIMINAL ACTS. Also
    there are situations where, particularly if the defendant ignores the orders of the court, a plaintiff can obtain a punitive remedy against
    the defendant, including imprisonment. Some torts may have a public element – for example, public nuisance – and sometimes actions in tort will be brought by a public body. Also, while criminal law is primarily punitive*, many jurisdictions have developed forms of monetary compensation or restitution which criminal
    courts can directly order the defendant to pay to the victim.”

    *We got their punitive. We want and demand ‘punitive’ in the form of jail time for perpetrators of these ongoing crimes, starting with calling them what they are.
    This information was condensed from material written by Basil Soufi.

  18. That’s all most unfortunate if for no other reason than when a borrower signs a new agreement with a servicer for, say HAMP, and the note is still outstanding out there in the ether somewhere, that note may yet be subject to the claims against the maker of a true holder in due course. The borrower does not even receive an indemnification from the servicer (which is one reason I believe
    title companies are receiving mol under the table indemnifications from foreclosers).
    But it all seems crazy to me in the first place – an allegation that any third party settles my interests or tort claims. No government agency may contract or settle away all my statutory or tort claims and they certainly may not settle my private contractual rights. The only thing a government agency or any party not a party to MY contractual or tort claims may do is settle any criminal charges I couldn’t otherwise bring myself ( although it appears there may be exceptions as to some torts). I can’t be represented without my permission in an action based on my contract or common law tort claims imo. But as pointed out here, it may be that that changes if I accept my two dollars and forty nine cent portion of a settlement.

  19. Fraud voids the contract…yet people are evicted every minute of every day…

    When will it stop?

  20. This is more BS. They are still trying to go around the end zone on FRAUD, the big F word. The fraud starts right at the beginning with predatory lending, ID theft, warehouse lending (not the supposed lender in the contract/mortgage), fraudulent documents, selling the Note BEFORE it goes into a Trust, more fraudulent documents which allegedly put the Note in the Trust after the Trust closed or never put the Note in the Trust at all. Unbelievably, some of the Trusts do not contain anything and are empty shells.

    Many, many different insurance contracts and bail outs which give the lender/servicer payment for the Note multiple times. Fraud voids a contract!

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