Arizona, Nevada and Massachusetts Giving Away the Store?


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by David Dayen, report-massachusetts-nevada-would-have-to-give-up-foreclosure-fraud-suits-to-join-deal

We learned on Friday that Eric Schneiderman’s suit against MERS and three banks using MERS represented a carve-out on the final foreclosure fraud settlement. There was speculation, stoked by HUD Secretary Shaun Donovan, that other states might have carve-outs or grandfathered suits, so they would be able to pursue those investigations and prosecutions and still join the settlement. But Bloomberg reports today that some states with active lawsuits would have to settle them as part of the deal.

The accord, which must be approved by a federal judge, will allow banks to take steps toward resolving mortgage liability stemming from the housing bust. The releases protect them from legal claims tied to foreclosures, mortgage-servicing and origination of loans, said another person familiar with the deal […]

The settlement, meanwhile, would also require Massachusetts, Nevada and Arizona, which have sued banks involved in the talks, to settle those cases, one of the people said. Nevada and Arizona each sued Charlotte, North Carolina-based Bank of America over mortgage-servicing practices, accusing it of misleading consumers, while Massachusetts sued all five banks that are part of the proposed deal.

Arizona joined the Nevada suit against BofA over their deceptions after the Countrywide deal. I don’t think the state’s Attorney General, Republican Thomas Horne, will have much of a problem settling those claims. But for Catherine Cortez Masto and Martha Coakley, this would be huge.

Remember what we’re talking about in these suits. Masto sued BofA over a wide range of deceptive practices in servicing. This doesn’t say anything about Masto’s case against LPS, a document processor, which includes criminal indictments for robo-signing. But that case was a classic effort to go up the chain to get back to the banks who authorized the abuses. Coakley’s suit is more straightforward, essentially suing the banks for, under Massachusetts law, stealing homes. These suits would have to basically be voided, folded into the settlement, under the terms of the deal. That’s a tall order.

Masto and Coakley have not said whether they would join the settlement. Beau Biden of Delaware thus far looks to be the only AG who is definitely out.

Meanwhile, here’s what activists are saying:

The agreement is “beyond fixing,” said George Goehl, executive director of National People’s Action, a network of community organizations which advocates for fair lending and affordable housing.

“People are very disappointed in what this is going to be both in terms of dollars and release of claims,” Goehl said in a telephone interview. “We’re giving away the store.”

26 Responses

  1. Ostbob,

    Yes. AND, correct all records so that we might continue our individual lawsuits. CORRECT THE RECORDS.

  2. NO agreement should be approved without a guarantee that the lenders will immediately remove any and all derogatory remarks on homeowners credit reports. To give us $2000 is a joke and to then not require fixing our credit is a crime.

  3. @enraged I get your point and agree that our ignorance is what allows it to continue to occur, but that cannot be a basis for certain parties to exploit it for personal gain.

    These folks are calculated. For example: they expect that the American people will first judge your husband by his skin color and his accent. To be completely honest, in my younger days I share guilt of doing that as well, only because of the environment in which I was raised; and not to sound too cliche, but in many cases we are the proverbial product of such. Maturity and perception, and finally be opened to other cultures quickly erased what i had been taught, hell, for the entire 70’s and 80’s I believed that every woman in Russia was fat, had grey hair and they all wore black robe-like garment. That is what the media showed me.

    Which now leads me back to the my original thought, take a gander at the banks and insurance companies interests in every major media outlet.

    These folks do not create the divide, they simply exploit it and that is probably what I meant to say in the original post. I do not believe that; we are routinely exposed on accident to the same film clip of the black guy robbing the old lady purse. Why don’t we see the same clip of the pasty-faced white banker robbing the equivalent of a million purses every day from the old spanish lady who lost her second job cleaning house and fell behind.

    Control starts at a very young age, I can always remember my parents teaching me, make sure you make that mortgage payment, why, because that is what they were taught, and so on, until you arrive at the event that had a banker on TV telling everyone make that mortgage payment.

    The only cause, which for the most part appears to unite all Americans; being under attack by some foreign regime.

    Reaching across the aisle to the homeowners that are current on the mortgage, and showing them that we are all under attack by the banks is our last hope. I mean… the N.A.s are foreign entities anyway, go ask the any state department. They are just killing us at a slow moving calculated rate so that we hardly notice the guy next to us falling. Just my eight cents…

  4. So that low level employee in nevada died for nothing—–no public benefitted—–she either was killed or committed suicide for nothing.?

    Ill bet the whisteblowers will just line up now—

  5. Sorry I am like a broken record here but when I get something in my mind I like to think it through.

    The note says that we promise to pay lender or subsequent note holder.

    If originator Lender A (or even B or C) remains note holder but note is pledged (along with cashflows) to FM (or private trust) NOT TRUE SALE and FM or private trust authorizes Servicer to collect said cashflows, I believe we have a disconnect. Bec it should be only the note holder who can authorize Servicer to collect on note. The FM master agreement may say how they collect for FM certificate holders but my note says I pay Lender or subsequent note holder (via servicer). My note does not say anything about paying some FM certificate holders via some contract I am not a party to!!!!

    Judges don’t want us to be part of the private PSA agreements or FM agreement ( and FM says they dont have to disclose trust repeatedly) so fine. If we prove that pledging splits the authority to collect payments then they have a problem. I think I can see now clearly why they have a problem unwinding the deal and foreclosing.

    Local judges (especially in FL) seem like they really focus on the note holder. I would really love to show them that for the past 6 yrs Servicer has collected on note yet was never directly authorized to do so.

    I think this is why in 2009/2010 FM was forced to bring back all MBS trusts back onto its balance sheet and consolodate all MBS.

    Man my head is spinning.

  6. @NPV,

    “Divide and conquer! The banks and insurance companies have intentionally created a nation of individuals and they separate us by party lines, class grade, color, language, religion, environment, food, weight, gender, age, fashion, ancestry, haves and have-nots”

    The banks didn’t invent anything. They’re simply using what is already there. We’ve been big enough all along to divide ourselves along those lines. Can’t blame the banks for using against us what we’re already using oursleves.

    My husband is black as charcoal. I can always see how people’s reactions toward me instantaneously change, the minute he walks in the door. He has his own business and I can see how people try to screw him every chance they get because they assume his strong accent is an indication that, somewhere, he must be dumb. He isn’t. he is extremely well educated and he plays by the rules. When he drags them to court and wins, they’re all surprised and bent out of shape. They never would treat me that way: I’m not black.

    Banks don’t use color to discriminate and screw us: they use our lack of wealth (perceived as a weakness on which to capitalize), our lack of education in all-things-mortages and our own twisted beliefs that “God” wants us to endure crap from everyone and anyone. And people continue flocking to banks to open accounts and give them their cash. So long as people position themselves as victioms, that’s all they will ever be: victims. That’s the American way. The real American way. Not the “pretend for the rest of the world” but what really is going on here.

    Our own fault.

  7. @ anonymous

    We need to reach past homeowners who are distressed and secure the folks that are current on their mortgages to get aboard. Fraud does not care who is current or late on the mortgage, black or white, rich or poor, democrat or republican, etc..

    I think it is more important to understand where the banks are heading prior to determining where we should be going as a people.

    The banks understand that; if the extent of the fraud hits the mainstream, many people who are current on payments, but under-water on the mortgage will throw in the towel and go to litigation because they were defrauded at inception, and know they can negotiate a better deal in the courts

    That is why they are introducing HARP II. The “We don’t care what the house is worth program, because taxpayers are eating the losses” If the banks can carve out another 3 million folks who are current on their mortgage-it will be 3 million less folks on the side of the distressed.

    Divide and conquer! The banks and insurance companies have intentionally created a nation of individuals and they separate us by party lines, class grade, color, language, religion, environment, food, weight, gender, age, fashion, ancestry, haves and have-nots.

    The only force seeking to unite the people again are folks that are not untied themselves. You can’t Occupy everything! The banks know this group is confused and disorganized, and they give them the simple battles to win, because they are focused on the war. We the people think in the terms of simple chess moves; but in the end, what good comes about by seizing 3 pawns, while the bank has set a queen trap. We need a group put together that shares the bank thought pattern, can analyze the true intention behind their motive.

    The people need to organize behind generals that can lead us to individual monetary battles with the financial enemy, while always staying focused and calculated on the events that will win the war. This current battle; as it evolves, will soon become a test on our sovereign rights, and if we lose that war – our homes and other personal rights will be the spoils.

  8. iwantmynpv,

    Question is — where do we go from here. As I see it, nothing in the settlement stops the banks from continued foreclosure and document fraud. In fact, even fraud in modification documents will proceed.

  9. from article I just posted:

    “If they are nullities, than these documents are no more significant than a child drawing on construction paper with crayon,” Koster said.

    Thank you—they sold my property and millions of others based on that….


    from huffington post:

    In DocX Case, Robo-Signing Forgery Charge Hits Top Executive

    First Posted: 02/ 7/2012 9:53 pm Updated: 02/ 8/2012 8:13 am

    For the first time since the start of the robo-signing crisis, a senior executive has been indicted on criminal charges of forgery and faces jail. The forgery charges against a mortgage processing executive come as the nation’s largest banks attempt to close the books on a civil investigation into widespread document fraud and could spark further federal criminal cases.

    A grand jury in Missouri handed up the 136-count indictment late last week charging Georgia-based DocX — a subsidiary of the massive mortgage processor Lender Processing Services — and its founder and former president Lorraine O. Brown, with forgery. The indictment alleges that DocX employees fabricated signatures on hundreds of real estate documents, some used in foreclosures.

    “This is the first time any grand jury in the country has indicted a corporation or a high-level executive at a corporation for ‘robo-signing,'” Missouri Attorney General Chris Koster told The Huffington Post. “The grand jury is alleging that the documents have false signatures on them, that the notarizations are fraudulent and that it was all done with an intent to deceive. If that’s true, it makes the [foreclosure] documents forgeries.”

    A lawyer for DocX did not immediately return a call seeking comment. A lawyer for Brown told The New York Times she intended to plead not guilty and had no criminal intent.

    The indictment stands in sharp contrast to the settlement shaking out over so-called “robo-signing” allegations between the state attorneys general and five of the nation’s largest banks. So far, more than 40 states have agreed to what could amount to a $25 billion settlement with Citigroup, Bank of America, Wells Fargo, JPMorgan Chase and Ally Financial over allegations they forged documents and incorrectly foreclosed on homeowners.

    As those settlement negotiations turn to questions of whether banks should receive immunity from future charges of fraud, in Missouri Brown faces up to seven years in prison as well as fines if convicted, according to Koster. “The broader question is, ‘Did the banking system begin to move so fast that they lapsed into criminality? And if that occurred, do we as Americans care?’ I believe the unquestionable answer to that is yes absolutely we care.”

    “You’re beginning to see criminal prosecution here of outright fraud,” said Ira Rheingold, executive director and general counsel of the National Association of Consumer Advocates, which lobbies against deceptive business practices. “I think it may foreshadow some other cases and I wouldn’t be surprised if you see some federal indictments.”

    The Missouri indictment may have implications for homeowners whose housing documents are found to be tainted by fraudulent signatures, since it would effectively render those documents void, according to Attorney General Koster.

    “If they are nullities, than these documents are no more significant than a child drawing on construction paper with crayon,” Koster said.

    The indictment isn’t the first time that DocX has come under scrutiny for its mortgage processing practices. In December, Nevada’s attorney general filed a civil suit against DocX and its parent Lender Processing Services alleging consumer fraud, accusing the companies of engaging in “a pattern and practice of falsifying, forging and/or fraudulently executing foreclosure related documents, resulting in countless foreclosures,” according to an announcement of the suit that month.

    Lender Processing Services closed DocX in 2010.

    Though terms of the state robo-signing settlement haven’t yet been announced, some banking executives have recently expressed concern that the final agreement may leave them exposed to criminal prosecutions.

    The Missouri indictment comes after “60 Minutes” aired a segment in August in which it alleged that Doc X had been forging bank documents for client financial institutions. Some of the documents mentioned in the “60 Minutes” piece are at issue in the indictment.

    But for those hoping that Missouri’s indictment might spark criminal actions against executives at financial institutions, some caution that the ramifications could be limited. If the state attorneys general or the federal government “use this for more prosecutions up the chain [to executives at DocX parent Lender Processing Services] and top mortgage servicing entities,” then this is significant, according to David Angle, a former assistant attorney general in Missouri now in private practice. “But if it’s a one-off, this indictment is meaningless.”

  11. Somewhere in my closing docs as instructions for title agent it says something about marking note as ‘pledged’ but i think it is ‘if pledged’ etc. Not sure if that is proof.

    But it sounds like there is no ABCD just title agent passing on probably to main servicer. Not like private securitization with Lehman’s in between although maybe ABCD then pledged.

    We need to work on this. It is dead clear as Neil stated in FM agreement that FM sells FM certificates and guarantees them to investors whether I pay or not. Even if judge tries to say well borrower not party to FM agreement with investor (like some say per the other PSAs) we can say fine but we should be able to show disconnect between my loan pledged to offset their FM debt. This FM document says some loans may be pledged and be determined by some courts not to be owned by Issuer (issuer is FM). I think that that doubt alone causes all kinds of problems.

    What further makes this problematic is the US govt has stepped in and further guarranteed the FM certificates which leads to further disconnect.

    Need to get my head around this. In a non-legal way we know investors in 2005 wanted FM certificates paying 5% and they knew they were backed by FM (and possibly the US Fed govt). Investors did not care much about the MBS. Investors figured USA would back FM if the world went to crap and indeed the USA did so far. So why bother with details of true sale/purchase etc?

    This seems more clear to me. FM never never owned my loan. When I called them to press them on ‘investor’ status and what does that mean they clam up.

    Thinking out loud sorry!

  12. chas, npv,

    if only pledged, then sure seems like that doesn’t satisfy IRS REMIC requirements, nor comply with the claims made in the offering certificates…

  13. (c) the Guarantor agrees to make Guaranty payments in accordance with the
    terms of the related Trust Documents.
    2.1(3) Security Interest. The Issuer intends that the conveyance, transfer and setting
    aside of the Mortgage Loans by the Issuer to the Trustee pursuant to the Trust Documents be a
    true, absolute and unconditional sale of the Mortgage Loans by the Issuer to the Trust, and not a
    pledge of the Mortgage Loans to secure a debt or other obligation of the Issuer.
    Notwithstanding this express intention, however, if the Mortgage Loans are determined by a
    court to be the property of the Issuer, then the Issuer intends that:
    (a) the conveyance of the Mortgage Loans be deemed a pledge of the
    Mortgage Loans by the Issuer to the Trustee to secure a debt or other obligation of the Issuer;

    CHAS comments: NPV… Sure looks like to me that Originator just pledge the loan to secure the debt to FM. FM does not own the loan at any point. Interesting.

  14. NPV,
    so what do you suggest……do we start making deals with the servicers (or GSES or whoever it is now) or keep fighting for what is right……you kind of lost me tonight what you believe

  15. npv

    does the new master trust look back via amendments? meaning 2005 trust but trust agreement amended for 2011?

    I was just reading about their 2010 consolidated accounting how they brought all the stuff back onto book.

    maybe somehow lines up with what u are saying. I read FM agreement but i did it randomly a while ago.

    will reread recent one. thanks

  16. Fannie acts as trustee in their agency capacity and Donor in their corporate capacity. Look at the most recent master trust.


    More than 40 signed, so what’s that 41?

    A teacher once told me a tale of a horse race between the US and another country, I’ll make up a name and call them Countrovia. Countrovia’s media was controlled such that the flow of information and always slanted it to their favor no matter what the outcome was. She said there was a horse race and only two horses were racing, United States and Countrovia. The United States horse won.
    She said the Countrovia’s newspaper carried the headline, “Racing Results: Countrovia won Second Place, and the United States came in next to last”.

    When I see that quote about more than 40 and I know how many states there are, and they only mention 5 hold outs, there is something you just ain’t saying and it makes me wonder who and why?

    California, New York, Nevada, Florida and Massachusetts **are among the handful** of states that haven’t signed a deal with banks over foreclosure abuses, according to state officials and two people familiar with the talks.

    Who are the others? How many more? Why aren’t they named? What are the issues they won’t settle for in this accord?

    “From the standpoint of the banks, what matters to them is not the number of states but the percentage of potential claims that are being settled,”

    It appears ‘to settle’ means just that. What power does a bank or servicer corporation have that they can destroy the state in the name of ‘profit’ or false prophets (profits), and an AG honors their Will to not suffer the laws of the state, over the suffering of the people who ARE the State.

    The state provides a charter or license to do business within it’s territorial boundaries. If the corporation exercises economic terrorism or economic coercion against the people of the state and the AG accepts less that what is equitable for the people, that may be considered treason or at war with the People and the State according to their own state constitutional documents and the contract/accord should be void at it’s inception and the AG have a competency hearing on their qualifications to represent the people and the State and it’s interests.

    Misprision of felony.
    The offense of concealing a felony committed by another, but without such previous concert with or subsequent assistance to the felon as would make the party concealing an accessory before or after the fact. United States v. Perlstein, C.C.A. N.J. 126 F.2d 789, 798.
    Whoever, having knowledge of the actual commission of a felony congnizable by a court of the United States, conceals and does not as soon as possible make known the same to some judge or other person in civil or military authority under the United States is guilty of he federal crime of misprision of felony. 18 U.S.C.A. section 4

    (18 U.S.C.A section 4 is now 18 USC 4 )

    There are some highly concentrated population and personal wealth states listed as holding out and not accepting the ‘accord’, which means a settlement that is different or less than what was sought to remedy the injury caused(in layman’s terms), but according to Black’s Law 5th Edition an Accord is:

    Accord, n.
    A satisfaction agreed upon between the party injuring and the party injured which, when performed, is a bar to all actions upon this account. An accord being a contract, the requirements of mutual assent and consideration must be met. Buob v. Feenaughty Machinery Co., 191 Wash. 477, 71 P.2d 559, 564. An agreement to accept, in extinction of an obligation, something different from or less than that to which the person agreeing to accept is entitled. Whepley Oil Co. V. Associated Oil Co., 6 Cal.App.2d 94, 44 P.2d, 670, 677. It may arise both where the demand itself is unliquidated or in dispute, and where the amount and nature of the demand is undisputed, and it is agreed to give and take less than the demand.
    See Accord and satisfaction; Compromise and settlement; Executory accord.

    Accord and satisfaction.
    A method of discharging a claim whereby the parties agree to give and accept something in settlement of the claim and perform the agreement, the “accord” being the agreement and the “satisfaction” its execution or performance, and it is a new contract substituted for an old contract which is thereby discharged, or for an obligation or cause of action which is settled, and must have all of the elements of a valid contract. Holm v. Hansen, Iowa 248 N.W.2d 503, 506. An executory bilateral contract of “accord” is an agreement embodying a promise, expressed or implied, to accept at some future time a stipulated performance in satisfaction or discharge in whole or in part of any present claim, cause of action or obligation, and a promise expressed or implied to render such performance. An “accord and satisfaction” arises where parties, by a subsequent agreement, have satisfied the former one, and the latter agreement has been executed. The execution of a new agreement my itself amount to a satisfaction, where it is so expressly agreed by the parties; and without such agreement, if the new promise is founded on a new consideration, in which case the taking of the new consideration amounts to the satisfaction of the former contract.
    In some jurisdictions, novation is a species of accord and satisfaction.

    Compromise and settlement.
    An agreement arrived at, either in court or out of court, for settling a dispute upon what appears to the parties to be equitable terms, having regard to the uncertainty they are in regarding the facts, or the law and the facts together. An agreement or arrangement by which, in consideration of mutual concessions, a controversy is terminated. Putman v. Otsego Mut. Fire Ins. Co, 41 A.D.2d 981, 343 N.Y.S.2d 736, 738.

  18. They own them and the lender on the modification is Chase Bank,N.A., they all make the homeowner indemnify stating the mortgage and notes are now one and the same. They are also giving MERS the right to foreclose if you miss payments in the future.

    In the end, they are getting to where they intended to be despite a couple of pesky judges and a few pro se headaches.

    They are merely taking a longer road,albeit, still a very low road,but a longer road to the same expected destination all the same.

  19. Albert Einstein … quote …” The world will not be destroyed by those who do Evil, but by those who watch them without doing Anything” .————–

  20. so npv tell us…

    the NA servicers own or held the notes all along never passed/sold to Fannie and onto the trusts???

    FM says the servicer may hold as custodian.

    i believe it. they were saving money shooting the notes downstream.

    FM only guarantees cashflows anyhow to MBS investors.

    Starts to make sense. needed TARP to cover banks bec they held the notes. needed $160 billion to backstop the Fannie fraud.

    Hope you are right. I will be laughing in my scotch.

  21. @ iwantmynpv

    We thought we were doing the right thing helping victims and exposing the fraud. Albert Einstien said …. Evil will not be the destruction of the world …… that will be caused by those who sat by and did nothing about it. God Bless You!

  22. @ Anonymous… sure, go right ahead, call your congressperson to let them know you are unhappy with the settlement and you want criminal indictments. Someone always posts a list of phone numbers, I am sure you can always dig one up.

    Tell them i am also opposed and that we are starting a hunger strike until these people are brought to justice…

  23. It is a done deal, homeowners can still sue individual, what they are looking to avoid with this outcome is criminal prosecution at the N.A.s, which I have further confirmed today, own all the Notes on every mortgage securitized through Fannie and Freddie.

    Our products and methods have helped over 2,600 homeowners achieve a HAMP modification. Looking back now at several today, I realize that I may have unsuspectingly been part of the problem.

    I feel like a modern day Woodrow Wilson. Yes, each modification reads the same, the lender is the National Association and not Fannie Mae. They have the Notes, the Swaps, the executive and legislative branch, and tomorrow the judicial branch, all tucked neatly into their pockets. They have pawns like me scrambling to help others, when truly I am part of the scheme.

    What a dupe…

  24. Approval by a federal judge? Do we have any say? May we contest?

  25. It would appear, according to undisclosed source which shall remain unnamed, that it might potentially be an outcome, although unlikey and not yet confirmed.

    Give us actual information or do away with speculation, will you? Speculation is what got us in this mess in the firt place!!!

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