LPS: So We Fabricated and Forged Documents… So what? Here’s what!!

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IT’S ALL ABOUT THE MONEY, STUPID!

Editor’s Analysis: This is the moment I have been waiting for. After years of saying the documents were real, they admit, in the face of a mountain of irrefutable evidence, that the documents were not real, but that as a convenience they should still be allowed to use them. Besides the obvious criminality and slander of tile and all sorts of other things that are attendant to these practices, there is a certain internal logic to their assertion and you should not dismiss it without thinking about it. Otherwise you will be left with your jaw hanging open wondering how an admitted criminal gets to keep the spoils of illegal activities.

I have been pounding on this subject for weeks because I could see in the motions being filed by banks and servicers that they had changed course and were now pursuing a new strategy that plays on the simple logic that you took a loan, you signed a note, you didn’t make the payments as stated in the note — everything else is window dressing and for the various parties in securitization to sort amongst themselves.

All foreclosure actions are actually, when they boil them down, just collection actions. It is about money owed. So far, the arguments that have worked have been those occasions where the conduct of the Bank has been so egregious that the Judge wasn’t going to let them have the money or the house even if they stood on their heads.

But to coordinate an attack on these foreclosures, you need to defeat the presumption that the collection effort is simple, that the homeowner didn’t pay a debt that was due, and that the arguments concerning the forged, fabricated, fraudulent documents are paperwork issues that can be taken up with law enforcement or civil suits between the various undefined participants in the non-existent securitization chain.

Now we have LPS admitting false assignments. The question that must be both asked and answered by you because you have enough data and expert opinions to raise the material fact that there was a reason why the false paperwork was fabricated and forged and it wasn’t because of volume. Start with the fact that they didn’t have any problem getting the paperwork signed they wanted in the more than 100 million mortgage transactions “closed” during this mortgage meltdown period. Volume doesn’t explain it.

Your first assertion should be payment and waiver because the creditor who loaned the money got paid and waived any remainder. You use the Securitization and title report from a credible expert who can back up what you are saying. That gets you past the motions to dismiss and into discovery, where these cases are won.

Your assertion should be that the paperwork was fabricated because there was no transaction to support the contents of any of the assignments. And from that you launch the basic attack on the loan closing itself. First, following the above line of reasoning, they used the same tactics to create false paperwork at closing that identified neither the lender (contrary to the requirements of TILA and state lending statutes), nor ALL of the terms of the transaction, as contained in the prospectus and PSA given to investors.

But let us be clear. There are only two ways you can get out of a debt: (1) payment and (2) waiver. There isn’t any other way so stop imagining that some forgery in the documents is going to give you the house. It won’t. But if you can show payment or waiver or both, then you have a material issue of fact that completely or at least partially depletes the presumption of the Judge that you simply don’t want to pay a legitimate debt from a loan you now regret.

Why are the terms of the securitization documentation important?

  1. Because it was the investor who came up with the money and it was the borrower who took it. The money transaction was between the investors and the homeowners, with everyone else an intermediary or conduit.
  2. It is ONLY the securitization documents that provide power or authority for the servicer or trustee to act as servicer or trustee of the mortgage backed security pool.
  3. If the deal was between the investor who put up the money and the homeowner who took it, where are the documents between the investor and the homeowner? They can only exist if we connect the closing documents with the homeowner with the closing documents with the investor. 
  4. But if the transfer or assignment documents were defective, faulty, forged and fabricated, as well as fraudulent attempts to transfer bad loans into pools that investors said they would only accept good loans, then the there is nothing in the REMIC, there is no trust, there is no trustee of the pool and the servicer has authority to service nothing. 
  5. That breaks the connection between the so-called closing documents with the homeowner and the so-called closing documents with the investor. No connection means no nexus. No nexus means the investors have a claim arising from the fact that they loaned money but they don’t get the benefit of a secured loan and they especially don’t get anything unless THEY make the claim.
  6. If the investors choose not to make the claim for collection or foreclosure, there is nothing anywhere in any law that allows an interloper to insert himself into the process and say that if the investor doesn’t want it, I’ll take it.
  7. Your position should address the reality: appraisal fraud, deceptive lending practices, violations of TILA all contributed to the acceptance of a faulty loan product. But that isn’t why your client doesn’t owe the money. Your client does owe the money, but it has been paid to the creditor and the balance has been waived in the insurance and credit default swap contracts as well as the the Federal bailouts.
  8. The source of funding has been paid in whole or in part, they received the monthly payments even while they declared a default against your client homeowner, and they waived any right to pursue the rest from homeowners because they wish to avoid the exposure to defenses and affirmative defenses that the homeowner will  bring in the mortgage origination process.
  9. The failure to identify the true creditor contrary to the requirements of law and the failure to describe in the note and mortgage the full terms of the loans creates a fatal defect when applied to THIS case on its facts, which you will be able to prove if you are allowed to proceed in discovery.
  10. Allowing interlopers into the process to pretend as though they were the mortgage lenders or successors leaves the homeowner with nobody to sue for offset, and no defenses to raise against a party who had nothing to do with either the investor or the homeowner in the closing with the investor wherein mortgage bonds were purchased, and the closing with the homeowner in which a portion of the funds collected were used to fund a loan to the homeowner.

LPS Uses Bogus Florida IG Report on Firing of Foreclosure Fraud Investigators in Motion to Dismiss Nevada Lawsuit

By: David Dayen http://news.firedoglake.com/2012/01/31/lps-uses-bogus-florida-ig-report-on-firing-of-foreclosure-fraud-investigators-in-motion-to-dismiss-nevada-lawsuit/

We’re at T-minus four days for sign-ons to the foreclosure fraud settlement, and we know that Florida’s Pam Bondi is on board, despite pushback from advocates in her state, ground zero for the foreclosure crisis. There’s an interesting nugget buried in this article, though.

Bondi spokeswoman Jennifer Meale said in an email that their concerns are “misguided” because the settlement would provide a historic level of monetary relief and will overhaul the mortgage industry.

“Rather than engaging in political grandstanding, Attorney General Bondi is working hard to reach an agreement that gets Floridians substantial relief now and holds banks accountable for their misconduct,” Meale wrote.

The settlement is expected to provide $1,800 each for about 750,000 families across the country. It is a response to such practices as “robo-signing” by bank employees who often knew little or nothing about the mortgage documents they were hired to sign.

Nevada, New York, Delaware, New Hampshire and Massachusetts contend the deal isn’t strong enough because it would protect banks from future civil liability.

It will not, though, fully release them from future state criminal lawsuits.

Put aside Bondi’s dissembling for a second, and the idea that an $1,800 for the theft of your home represents “historic” relief. This lawyer in Utah called it what it is: “An arbitrary system of modifications administered by the same banks that knowingly perpetrated the fraud on the homeowner in the first place, and allowed to get off by paying $1800 for an illegal foreclosed home. That’s outrageous.”

But New Hampshire? That’s a new one. I know that Attorney General Michael Delaney has done some preliminary investigations of foreclosure practices in his state, and I know he was present at that meeting of 15 AGs looking for an alternative to the settlement. But Delaney has been pretty quiet overall. Since when is he listed among the holdouts?

That could just be bad information. And to be clear, liability isn’t the central issue anymore. But I don’t know how states like Massachusetts and Nevada, with active legislation against banks and document processors over the same conduct that would be released here, could possibly sign on to this deal.

There’s some news on that front. Lender Processing Services, which has been sued by Nevada for deceptive practices in generating false documents, sought to dismiss the complaint today in a filing with a state court.

The complaint by Nevada Attorney General Catherine Cortez Masto fails to allege any document executed by subsidiaries was incorrect or caused any borrower financial harm, Lender Processing Services said in a statement today.

The state’s claims “are a collection of suppositions, legal conclusions and inflammatory labels,” the company said in the court filing. The document couldn’t be immediately verified in court records […]

Nevada sued the company in December, claiming that it engaged in a pattern of “falsifying, forging and/or fraudulently executing” foreclosure documents, requiring employees to execute or notarize as many as 4,000 foreclosure- related documents a day, according to a statement from the attorney general. Lender Processing Services also demanded kickbacks from foreclosure firms, the office said.

Two interesting things here. First, LPS leans hard on the idea that borrowers weren’t harmed by the use of false documents. The implication here is that the borrower was delinquent anyway, so there’s no abuse going on. But the more important part of the motion to dismiss (copy at the link) comes when LPS makes the claim that robo-signing isn’t really a crime. It’s merely “signing of documents by an authorized agent,” says LPS, and that is permitted under Nevada law. Here’s one way they justify that (DocX is a subsidiary of LPS):

The State of Florida has reached an identical conclusion regarding DocX’s surrogate signed documents. Two assistant attorneys general involved in that state’s investigation of the mortgage crisis, including DocX, prepared an information power point presentation in which surrogate signing was characterized as “forgery.” The two attorneys were subsequently terminated for alleged fraud, deficient and improper investigatory practices which triggered a formal review by the Inspector General of Florida. In a recently issued official report, the propriety of the termination of the attorneys was confirmed, and specifically, the power point characterization of surrogate signing as “forgery” was determined to be unsupported by the legal definition of forgery.

Wow. So LPS used the whitewash IG report from Florida to justify the dismissal of their lawsuit in Nevada. And remember, LPS lobbyists more recently urged the Florida AG’s office to intervene on their behalf in a criminal case in Michigan. The connections between the Florida AG’s office and LPS just continue to grow.

This also happens to be BS. Pam Bondi made a recent motion in a Florida appeals court, as part of a case against the foreclosure mill David J. Stern, which stated, among other things, this:

The Attorney General’s motion asks the Fourth DCA to certify that its decision in Stern passes upon the following question of great public importance: whether the creation of invalid assignments of mortgages by a law firm and subsequent use of such documents by the firm in foreclosure litigation on behalf of the purported assignee is an unfair and deceptive trade practice which may be the subject of an investigation by the Office of the Attorney General.

This is a tacit acknowledgement of illegal assignments, which is functionally the opposite of what the IG report said. So of course LPS uses the latter in their Nevada case.

It’s completely insidious. And if the foreclosure fraud settlement goes through, LPS will surely point to that as another reason why they should be held harmless for their illegal conduct.

30 Responses

  1. Ron Paul is the only HONEST candidate whoe doesn’t take a penny of his congressman’s pay. As a Doctor he will treat patients but not take a penny of Medicare. Has been consistant. He has spouted 20 years ago what he does now. Does he know everything, no, but he has one heck of a platform-HONESTY.
    Stan
    WI.

  2. If they had already placed bets that the loan would default to modify would defeat the whole purpose to collect once the default occurred. This was only one of the schemes they had going. All aimed at making sure the loans failed.

  3. @Enraged,

    I listened to that interview several times, and I come to a different conclusion about Ron Paul’s stance on the housing crisis. In several places he calls the “banksters” out as responsible for the meltdown. I don’t think his remark about no one taking advantage of the programs like Hamp, Making Home Affordable, and Hope were meant to be derogatory to homeowners, and I am certain he knows the banks failed to modify loans even though the homeowners tried repeatedly to get help under these programs, to no avail.

    They created equity with inflated appraisals that they later stole, and then stole the homes outright by pursuing foreclosure rather than complying with the modification programs as agreed after they took bailout money to do just that. I read his book End The Fed, and in my view he has a very good grasp on the root problem, which is the fed’s manipulation of the money supply and interest rates resulting in the contraction of the economy to produce crises.

    Paul has also said that the banks should have been allowed to fail, when hardly anyone else is saying that. He seems to be for the right things, and against the wrong things for the most part. Not a single candidate has ever been so firmly in favor of constitutional rights. While he may not have every fact straight in the foreclosure crises, his analysis of how to solve it is spot on; End The Fed and you end all future financial trip wires and restore free markets and prosperity.

  4. Um, nabdulla…Enraged is a lady! A very sensible one, too.

  5. @ Enraged

    I couldn’t either Dude. Not now.

    B-U-U-U-T…there was time. About 45 years ago in Guyana….

    Remind me to tell you about it sometime 🙂

  6. I would love to be one of those dismissed Florida foreclosure investigative attorneys, because I’d be make a libel and slander case that included Pam Bondi, and I’d get all of their case work and evaluations into evidence, throwing it back on the perpetrators (the banks and their minions in government and media) to prove by a preponderance of the evidence that they DIDN’T misrepresent what those dedicated attorneys were doing in furtherance of executing the duties of their office. The Florida foreclosure defense lawyers and foreclosure victims should be getting behind these scapegoat dedicated professionals, who have now become the whipping boys/girls of slime like LPS.

  7. @Carie,

    I’ve long decided that Bonehead is a jackass. Don’t know who voted for that crying wuss but I sure as hell didn’t!

  8. @Nora

    Well said…and NO, “investors” absolutely DID NOT “fund” ANY “loans”.

    @enraged

    Boehner said today: “Let the foreclosures go through…it makes good economic sense…stop helping the homeowners…”
    What a guy…

  9. Watching Ron Paul… I don’t agree with what he said: “Government offered all those programs but NOBODY TOOK ADVANTAGE OF THEM”.

    That is so untrue! How many people ended up foreclosed JUST BECAUSE they were trying to take advantage of those half-assed programs? Those HAMP, HARP and what not should never have been offered at the discretion of the banks and while allowing them to pick and choose the incentives they prefered. Once taxpayers had bailled out the banks, any program to restore those same taxpayers into some resemblance of financial stability should have been made mandatory. Further, not one of those programs made sense without a nationwide moratorium.

    It is unconscionable that people ended up being modified upwards, banks pocketed incentive money and were still able to pocket foreclosure fees and expenses, most of them grossly inflated. People played by the rules. People sent their documents sometimes 9 times, banks led them along, lied, cheated and were able to… steal, with government’s blessing.

    Why isn’t anyone looking at that? Why hasn’t 60 Minutes done a piece on the abject failure of all those programs and how easy they made it for banks to enrich themselves even more? Why isn’t anyone looking at how much throwing free, no-strings-attached money at the problem only served to compound it?

    Ron Paul is no different from the other candidates: it was homeowners’ fault from the beginning, with the help of banks. A little too easy!

    My Bible clearly tells me one thing: the temptor is ALWAYS guiltier than the temptee. For Pete’s sake, put the blame where it belongs! That’s the only way we can ever solve the greatest financial scandal ever visited upon this country!!!

  10. I just can’t accept that the investors funded the transactions. My Note was endorsed and sold for Federal Reserve Notes which were deposited in a secret bank account in my name, and that money was used to write a bad check to the previous owner of the property. It says right in my closing documents that WaMu paid Deutsche Bank ten whole dollars for the property, which I got a “loan” supposedly for $88,500.00 and paid on for seven years. Unless you understand how banks create money, and how they constantly expand the supply of money by making “loans”, and how they create even more money off of those loans through fractional reserve lending, you are going to run aground in this line of thinking that any REAL MONEY changed hands between the “borrowers” and these criminal banks. There was no real money exchanged, the money the investors put up was largely siphoned off through fees and trumped up charges, and you can find publications like Modern Money Mechanics written by the Chicago branch of the federal reserve and read this stuff for yourself if you doubt what I’m saying. These banks form a network where all money is simply a credit/debit transaction shuffled from subscriber to subscriber with a little interest margin added, it never leaves the system.
    Add in all the profit from credit enhancements and pool insurance proceeds, private mortgage insurance, hedge funds, yield spread premiums, and total it up. You will see exactly how they created more profit for themselves than there are peas in the green valley. The deck was stacked against everyone else, the risk was passed to the next guy in the pyramid, and they dealt from the bottom of the deck. The banks tapped the investors first, insurance company next, then the “borrower”, then the borrower’s heirs through bailouts subsidized by future generations of “debtors” who got nothing, lost everything. It was slick, well planned, probably took them years to get all the blocks in place like putting their guys in the regulatory agencies and getting rid of all real public servants with integrity, changing the laws. Until we stop thinking that we need these banks, we’re going to continue to suffer at their hands. It’s time to get rid of the federal reserve and all member banks. There are plenty of community banks and credit unions to serve capital needs. We also need to get rid of the traders. All they do is sit like vultures waiting to profit from gambling, buying and selling the ephemeral. They labor not, neither do they sow.

  11. @Nabdulla,

    Great movie, huh?

    Good question. That’s what makes that movie so relevant and almost poignant. It put me right in front of myself: what would I have done?

    At 35 or 40, I probably would have jumped on the opportunity, despite that nagging feeling that something wasn’t right. I have actually obeyed orders in different jobs I’ve held in the past knowing that it was fundamentally wrong but fearful that refusing or arguing would lead me right to the door.

    Nowadays, that nagging feeling is the first thing I yield to. Know why? Because it’s taken me that long to understand that whatever I do knowing that it is wrong sticks with me for the rest of my life, whether someone else saw me or not. Kevin Spacey deals with that nagging feeling, all the way to the end. I don’t want to look back and see that all I’ve left behind is misery and destruction. And I can’t do that to my kid. If i don’t show the example, who will?

    Jeremy Irons? Not a chance! Same for the other guy (who, incidentaly, looks awfully close to Dimon… Blue suit and tie and all. Coincidence?) So, in my opinion, the people who must be prosecuted are the Jeremy Irons and Dimon-looking guys of this world. Those are dangerous psychopaths: they have not one iota of conscience!

    Think about it: knowing full well that your company created and keeps creating havok in the entire world and that people die and kill themselves and their families as a result, could you pocket a $10 million bonus?

    I couldn’t.

  12. @chris

    Exactly. Fraud at the beginning means you have keep creating more fraud to keep the fraud going…yes, it IS simple…

  13. To me and it is just my thoughts:

    Who would need to forge documents to take possession of and sell, something/property that they have a “legal”, legitimate interest/ownership in?

    The question is a simple one!

  14. Synovus Ousts Senior V.P. of Asset Management; Shady Foreclosure Deals to Blame?

    Posted on February 1st, 2012 by Mark Stopa
    http://www.stayinmyhome.com/blog/2012/02/synovus-ousts-v-p-shady-foreclosure-deals-to-blame/

    Have you ever wondered what happens to houses when the banks foreclose? The Fort Myers News Press recently wondered just that, and its findings may have prompted the termination of a high-ranking bank officer.

    To those in the foreclosure industry in the Tampa area, Michael E. Johnson was fairly well-known. He was the Senior Vice President of Asset Management for Synovus Bank. This was no phony title, like the “Assistant Secretary” designations we see given to robo-signers; Mike Johnson was the decision-maker on foreclosure cases for Synovus in the Tampa area. To illustrate, here was the signature on his emails (copied and pasted from an email he sent me):

    Michael E. Johnson

    Senior Vice President

    Asset Management

    12450 Roosevelt Boulevard

    St. Petersburg, FL 33716

    727.568.6521 – Direct

    727.568.6532 – Fax

    I personally dealt with Mike Johnson on several occasions in recent years, and it was clear to me that if a settlement agreement was going to be reached in a case involving Synovus, he would be the one approving it. This dynamic was both good and bad. It was good because, unlike many foreclosure cases, at least there was a person at the bank with settlement authority with whom communication was possible. It was bad because, frankly, he and I butted heads frequently and, in my view, he was rather stubborn in negotiating. (Of course, I’m confident he thought the same things about me.) That was his reputation, at least as I knew it – difficult to deal with, but Synovus liked him because he got a lot of deals done for the bank.

    Anyway, with that backdrop in place, I find this article from the Fort Myers News Press particularly interesting. Essentially, this journalist studied the Public Records in Lee County to investigate what happened to properties after being foreclosed, or after they went to the bank. According to the article, there was a disturbing trend of properties being sold by Synovus to third-party investment companies, then flipped soon thereafter for a significant profit.

    In my view, the information contained in the article forces some tough questions:

    1. Why would Synovus sell a house for $53,000 to an investment company when said company was able to sell the house two months later for $78,000? Or a duplex in Lehigh Acres for $30,000 that was re-sold 15 days later for $79,000? Seriously, think about those numbers for a minute. More than doubling the sale price? Merely by doing a flip? 15 days later? For a bank that was so stubborn in negotiating with homeowners, why not insist on a higher sale price (to the investor)?

    I suppose it’s possible the investment company did significant repairs to improve the value of the property. However, as the article notes, how much work can really be done when no building permits were obtained?

    2. Doesn’t this have the feel of a shady, back-room deal? After all, why would a bank sell a house for $30,000 if it was possible to sell it 15 days later for $79,000? We may never know for sure, but it sure is interesting that Synovus had numerous deals like this with the same investor, and Mike Johnson was the one approving most of these deals.

    Think about that for a minute. One man approving multiple sales of properties to the same investor, which investor was flipping those properties for a profit.

    When you put it like that, it’s not hard to wonder whether this banker had a had a personal stake in these transactions. To be clear, I don’t know this to be the case, and I’m not saying that was the case, but when the same bank is selling multiple properties to the same investor, at prices like this, it’s not hard to wonder whether that banker was getting a kickback on the re-sale. It sure wouldn’t have been difficult – investor simply tells banker “sell this to me for $30,000, and I’ll give you $5,000 on the re-sale.”

    You may think I’m reaching or just plain wrong, and maybe so. However, it sure is interesting that Mike Johnson no longer works for Synovus, having been let go (after what had apparently been a distinguished career with the bank) shortly after this article came out. In fact, according to my sources, he now works with investment companies who buy houses from banks!

    The point here isn’t to talk about this one banker, of course. My point is that it’s terribly, indescribably sad to know that Florida homeowners are being foreclosed and this is what’s happening with their homes. Even if there was nothing shady going on with Synovus, it’s awful to know that banks are so willing to foreclose on homeowners yet so willing to sell properties for a fraction of their actual value. Anything shady, of course, only increases the level of misery.

    3. I’m also troubled at what may be attempts to increase the extent of the homeowner’s liability. Using the example from the article, should the prior homeowner be liable to Synovus for $275,000, i.e. $328,000 (the judgment amount) minus $53,000 (the alleged value of the house)? Apparently, by my read of the article, that’s what the court ruled, as that $53,000 sale price is how the fair market value was determined. The fact that the house sold for $78,000 sale price two months later (and that the deficiency amount probably should have been $23,000 lower? The court may not even have known about that re-sale. Heck, the homeowner may not even have known.

    This prompts a serious question … Are banks selling properties at reduced values to increase the amounts of their deficiency judgments against homeowners?

    You might think that makes no sense. After all, why would a bank sell a house for less than its maximum sale price? That said, do we really know what, if any, back-room deals are going on here? For instance, is this deal an arms-length transaction when Synovus is selling many such properties to the same investor? Who’s to say there weren’t other, under-the table monies changing hands?

    It’s not hard to envision ways Synovus could artificially increase the liability of homeowners … ”you give me a better deal on this one; I’ll give you a better deal on that one,” or “give me a deal for $30,000 on this one, and I’ll give you half of the profits on the resale.”

    I don’t think I’m the type of person who espouses conspiracy theories. However, I just can’t help but wonder, given what I’ve read, seen, and know, if homeowners are getting screwed on a routine and systematic basis by bankers who aren’t looking out for anyone except themselves. And when a high-ranking banker is suddenly ousted after an article like this, it really raises some difficult questions.
    Mark Stopa

    http://www.stayinmyhome.com

  15. @nabdulla

    That IS the bottom line, isn’t it? Just take the money and sell your soul to the devil…and here we are. It all comes down to the sociopathic materialists, devoid of any sense of spirituality, or belief in a higher purpose, or the meaning of life itself…or belief in God…or even the fear of God. What is a good character? Why does it matter? Our life on this planet is a blink… Well, these people will find out…when they pass to the next world…talk about a rude awakening…

  16. Ron Paul interview on “Face to Face with Jon Ralston” – Local Nevada News (February 1, 2012)

  17. @ Neil & ALL

    If you haven’t already, this is a MUST READ.

    From carie, on February 1, 2012 at 12:53 pm said:
    NEIL—STOP SAYING INVESTOR/LENDER.
    INVESTOR IS NEVER LENDER—NEVER THE CREDITOR—STOP SAYING THAT LIE.
    WHY DO YOU CONTINUE THE LIES?

    http://online.wsj.com/public/resources/documents/crisisqa0210.pdf

    @ Enraged….

    I remember one of your posts the other day where you were trying to convince some wimp, weak-kneed _ussy to tell us how he “sold fraud” and you told him (her?) to watch the movie “Margin Call”. I watched the movie. Question: When Spacey was preping everybody up to unload the MBS’s and told them that each of them would get $1,600,000 for the day’s work – if YOU were in the room, would you have went to work or walked out and went home?? Send me a glass while you ponder that – 2/1, Jack Daniels/Sprite, hold the ice.

  18. @jg,

    Hillarious! It reads like Kafka…

  19. One day we’ll see June and Theresa in a “made for TV” movie that lays this all out … it may be 10 years down the road but someone smart should buy their story rights TODAY…

    Proud to say they’re my legal team.

  20. “source of funding has been paid in whole or in part”

    jg: how? why something like that might be done is not enough (you say the investors funded the loan so okay, how were they paid in whole or in part? guarantee? “they” didn’t get the benefit of any insurance, is that not so, so how?

    “they received the monthly payments ”

    jg: who’s they?

    “even while they declared a default”

    jg: who’s they?

    “against your client homeowner, and they waived any right to pursue the rest from homeowners”

    jg: who’s they? and how / where did “they” waive this right?

    “because they wish to avoid the exposure to defenses and affirmative defenses that the homeowner will bring in the mortgage origination process”

    jg: who’s they? the investors you contend funded the loans?

    About a year ago, someone here commented that these deals had to be “true sales”. Why?

  21. Obama’s speech is posted at 4closurefraud. There is no hope in this administration. Not surprised and yet there is huge sadness enough to make me cry if I wasn’t mad enough to be sick. There is no hope in a Republican administration either. Check out Boehner’s remarks on CNN. Don’t forget where Republicans are coming from either. I will abstain before I vote for Obama again. This wouldn’t be so hard to take if the courts and AG’s were standing up for the law even if the law is only for the rich who can afford it.

    Define “responsible” Mr. President. We have heard that word used over and over again by all of the members of your administration since day one. Every rare comment about housing includes that word. Shaun Donovan could have written this. Go ahead and blame the homeowners. We have stopped blaming ourselves. Was it “responsible” to pay toxic mortgages and fuel a fraud for over a decade or not? I think not.

    http://4closurefraud.org/2012/02/01/president-obama-speech-we-were-hurt-badly-by-the-irresponsible-actions-of-buyers-who-knew-they-couldnt-afford-them/

  22. @Anonymous,

    No. 5 banks only: Wells Fargo, Countrywide, Chase, BofA and Ally Financial. Apparently, PNC and a few other banks recently asked to be included but LPS has never been mentioned.

    http://www.housingwire.com/2011/11/01/ag-settlement-targets-5-largest-mortgage-servicers

  23. @Ann,

    Thank you for posting this. It does give hope that justice will be rendered. That’s why I refuse to suscribe to the “all doom and gloom”.

    @bc,

    If I remember correctly, there is no penalty on early 401K and IRA withdrawal if it is used to purchase a home used as your principal residence.

    Also, there is no capital gain on sale of private home if said private home is your principal residence, up to a certain amount, which, as I recall, was around $300k in 1999.

    Speaking from experience and memory… In fact, when I realized that I could have used my 401k as a down payment without any penalty, I regretted not having done it. Eventually, I used it years later to live and pay the damn mortgage and I kicked myself because, for that purpose, I did have to pay a penalty!

  24. Well is LPS included in the AG settlement?? Thirty days in default — servicer sends to default processing servicer. SO — is LPS included in the AG settlement???

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    Story Discussion Image (4) Suits challenge way foreclosures are performed in Missouri
    BY JIM GALLAGHER • jimgallagher@post-dispatch.com > 314-340-8390 STLtoday.com | Posted: Sunday, January 29, 2012 9:30 am | (23) Comments

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    David Carson
    Lisa Kennedy, 48, and her husband, John Kevin Kennedy, 52, prepare to hang drywall in the family’s new home they are building in New Haven on Wednesday, Jan. 25, 2012. Photo by David Carson, dcarson@post-dispatch.com

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    John Kevin Kennedy was an engineer at Anheuser Busch for 30 years. Then came the sale to InBev, and the big downsizing at the brewery left Kennedy out on the street along with much of his department.

    With no job, he asked his mortgage lender for a lower payment on his home in Barnhart.

    What happened next set in motion a lawsuit challenging the way foreclosures are done in Missouri. By raising questions about which lender actually owns the mortgages, the suit claims certain foreclosures weren’t properly done and it asks the courts to give “hundreds, even thousands” of Missourians their foreclosed homes back.

    Kennedy’s is part of a broader legal movement nationwide challenging the foreclosure process, which debtors say is slanted against them.

    “We’ll put an end to this,” vowed lawyer Stanley Wallach of the Wallach Law Firm in Creve Coeur. “The capes-and-crusaders mode . . . is to put this back on a level playing field.

    Kennedy says Bank of America agreed to reduce his mortgage payment to $624 from $823, and that he made the lower payments through 2009 and 2010. Such modifications are often done on a trial basis pending a permanent decision.

    So, he was shocked when the sheriff arrived with a notice that the bank was starting the foreclosure process.

    Kennedy called the bank. “I kept getting the runaround. I probably logged 100 to 150 hours on this cellphone,” he said.

    In Missouri, lenders can foreclose without a judge’s order. Unless the homeowner files suit to stop it, the house can be sold at a foreclosure sale on the mortgage holder’s word alone. People who can’t pay their mortgages usually can’t afford lawyers, so foreclosures almost always go unchallenged. In Illinois, court approval is required before a foreclosure.

    But Kennedy, 62, had something that most troubled homeowners don’t – money in a 401(k) retirement plan. He used it to hire lawyer Greg White, who specializes in fighting foreclosures.

    White teamed up with three other law firms to file a lawsuit challenging the state’s foreclosure system. They hope to convert the case into a class-action suit.

    A Bank of America spokeswoman said the bank hasn’t yet seen the suit and wouldn’t comment. An attorney at Kozeny & McCubbin, a creditors’ law firm also named a defendant, also declined to comment.

    At the heart of the challenge is MERS, the Mortgage Electronic Registration System. It is the mortgage industry’s system for tracking ownership of perhaps 60 million mortgages.

    These days, lenders that make mortgages sell them off to Fannie Mae, Freddie Mac or other large operators. There, many mortgages from many states are packaged into securities. Shares in those securities are sold to multiple investors. In the process, the ownership of a particular mortgage can change several times.

    For example, Kennedy’s $86,500 mortgage was made by Quick Loans. But he ended up making payments to Bank of America.

    Across the country, however, homeowners lawyers claim MERS muddies the legal ownership of loans.

    As a result, the lawyers say, lenders trying to foreclose on homeowners often can’t prove that they own the mortgage in question.

    “They were pretty sloppy on the way they did it,” said White, Kennedy’s lawyer. MERS is “an end run around the records requirements,” he says.

    WHO OWNS THE MORTGAGE?

    With millions of mortgages being mixed into thousands of securities, the industry faced a problem in keeping track of who owned what loan, who had the job of collecting payments, and who had the right to foreclose.

    The industry’s solution was MERS, formed in 1995. Not only did it ease record keeping, but it was supposed to simplify legal requirements that changes in mortgage ownership be recorded at local courthouses.

    The idea was that MERS would represent all its member lenders. The “deeds of trust,” mortgage ownership documents that let the holder foreclose, would all be recorded just once in MERS name, no matter how often the loans changed hands. As a result, MERS shows up in public records as the holder of claims on property, although it doesn’t really own the loans.

    The system held up well, until the Great Recession brought on a landslide of foreclosures.

    Wilson Freyermuth, law professor at the University of Missouri and an authority on real estate law, says the MERS system in theory seems compatible with the law.

    “There’s not necessarily a legal problem with the structure of MERS,” says the professor, who is not involved in the case. “All MERS was originally intended to do was to serve as an agent for the actual owner of the loan.”

    Lenders could trade mortgages among themselves without filing papers at the courthouse, as long as they were members of MERS. Or that was the idea.

    But MERS produced a field day for homeowners’ lawyers around the country.

    Challenges are underway in several states, and judges have gone both ways on the issue. For instance, the California Supreme Court upheld the MERS system, and the U.S. Supreme Court declined to review it. But last August, a judge in Massachusetts let a woman keep her home, after Deutsche Bank tried to foreclose. MERS, not Deutsche Bank, actually held the mortgage, he ruled.

    The law on real estate ownership is quite technical, opening the door to technical challenges. In some Missouri suits, homeowners lawyers claim that legal paperwork needed to transfer loans was never actually done within the MERS system, so lenders claim to own loans they actually don’t.

    The MERS system is also entangled in the so-called “robo-signing” scandal, in which employees of mortgage servicing operations and law firms swore to the accuracy of loan ownership records that they hadn’t checked.

    Kennedy’s challenge claims that Bank of America can’t foreclose because MERS is recorded as the owner of the mortgage. The Kozeny & McCubbin law firm is a defendant because it handled the foreclosure.

    Though the bank foreclosed on his home, Kennedy still lives at the house while the two sides face off in court.

    “Hundreds, even thousands,” of Missouri families may have lost homes under similar circumstances, the suit says. The suit asks the court to give them the houses back. The law suit, filed in November, is in its beginning stages.

    Read more: http://www.stltoday.com/business/local/suits-challenge-missouri-foreclosure-law/article_e2cb9724-4784-11e1-8c48-0019bb30f31a.html#ixzz1lBhK0V00

  26. The Paul Plan to Restore the Housing Market

    Nevada is one of the states hit hardest by the collapse of the housing bubble. Currently, 62 percent of homes in Nevada that carry a mortgage are upside down.

    The Federal Reserve’s inflationary policies, combined with the distortions in the housing market brought about by institutions like Fannie Mae and Freddie Mac, sent the wrong signal to many Americans regarding the wisdom of purchasing expensive homes. It is clear that four years of bailouts and continued taxpayer-funded housing programs have failed to stabilize the housing market.

    As President, Ron Paul will work to end taxpayer support for institutions like Fannie Mae and Freddie Mac and to stop all government distortion of the housing market, allowing the market to adjust and recover from the damage inflicted by the federal government.

    Congressman Paul will also work to help distressed homeowners by:

    * Extending the first-time homebuyer tax credit to help Americans use their own resources to purchase their first home.
    * Providing tax credits to those who have suffered foreclosure that would make the path to new, more affordable housing much easier.
    * Allowing individuals to make penalty-free withdrawals from their IRAs and 401(k)s to purchase a home.
    * Preserving the mortgage interest deduction for the first year of his presidency and never signing any legislation to repeal this deduction unless it is part of a broader tax reform measure of equal or greater value to America’s families.
    * Restoring the property tax deduction for those who do not itemize deductions on their tax returns.
    * Repealing capital gains on sales of private homes and commercial properties.
    * Ending all taxes on savings to allow people to save for a home and buy a new home, as well as make it easier for businesses to save to develop new commercial properties and create new jobs.
    * Allowing homeowners to take a capital loss deduction if they sell a home for less than they paid for it.

    http://www.ronpaul2012.com/ron-pauls-plan-to-restore-america-%E2%80%A6and-how-it-will-help-nevadans/

  27. |
    Eric Schneiderman: This Millennium’s Elliot Ness?

    New York Attorney General Eric Schneiderman

    We here at the South Florida Law Blog decided to clock in a few hours this weekend, because if we didn’t we’d probably fall behind President Obama’s new man-in-the trenches Eric Schneiderman.

    The New York Attorney General, only days into his appointment as the head of the newly-formed Residential Mortgage-Backed Securities Working Group has already issued subpoenas to 11 financial companies.

    President Obama only announced this new investigative unit during Tuesday’s State of the Union, yet the “check”, or in this case the subpoena, is already in the mail.

    If you were skeptical that Obama was still interested in the status-quo when it comes to the banks and doing business, may we present Exhibit A.

    Eric Schneiderman is turning himself into a modern-day Elliot Ness.

    You remember Ness don’t you?

    The federal agent whose team of “Untouchables” couldn’t be bought off and helped bring down Al Capone?

    Schneiderman too has the era of a man who will not be co-opted. If anyone can stay above the fray and not be reeled in by the banks and their money, he can.

    Investigation Going After Cause of Housing Crisis
    Read more at
    http://southfloridalawblog.com/2012/01/29/eric-schneiderman-this-millenniums-elliot-ness/

  28. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, Florida, foreclosure, foreclosure defense, foreclosure fraud, foreclosure offense, foreclosures, fraud, global settlement, LOAN MODIFICATION, LPS, modification, Nevada, New Hampshire, Pam Bondi, quiet title, rescission, RESPA, Robo-Signing, securitization, state AG investigation, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

  29. @ Neil

    LPS is still doing this … same game, differant stratigies.
    They are using previous notary closing docs and attatching them to undated docs weeks later The notary appears for the 1st signing and after that LPS uses this information and attatches it to another set of documents. Cost-Cutting or Fraud?
    I have reported this to our Sec of State and our Attorney General recently.
    If anyone signs anything PLEASE …. make sure the pages are numbered (number them yourself) and initial and date every page.

  30. So, let me understand this:

    $1800 is a fair and equitable satisfaction of theft, forgery and fraud, (obtaining goods under false pretenses) a Felony in most states.

    Where homes valued at between $50,000-$,1000,000. were sold for pennies on the dollar and the servicers kept the money, while defrauding investors and rendering people homeless with poor credit ratings, by which they cannot find work, an apartment or further educate or retrain themselves and this will improve the the real estate free-fall and make these people whole.

    Do I have this right?

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