Timeline Stretching for Actual Written Multi-State Settlement

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Editor’s Comment: The bottom line is that the real negotiations are just beginning. While it is not likely, there is a distinct possibility that the settlement will fall apart because of (a) what the Banks want as wording in the settlements and (b) the knowledge on the part of the AG’s that people are actually watching. The method behind their madness was simply to announce the settlement, let it die down after the settlement gets milked for all is political value, and then write down and file in court whatever they wanted.

The Banks think they can dictate the terms and wording of the settlement agreement. The AG’s don’t want to look like fools or be called out for missing obvious glaring amnesty language for the Banks and immunity from lawsuits involving the looming the national title collapse we will be seeing shortly.

With each passing week, more information emerges revealing the and probing the depths of the base acts committed by the banks against taxpayers who paid, homeowners who supposedly are being required to pay the banks instead of the taxpayer fund which already paid the banks, and the pension funds whose money was lost to begin with.

What all of this means for homeowners, past, present and future, is that they need to be very careful about the accounting for their loan. It isn’t just between them and the lender if the loan is claimed as securitized — and if Fannie or Freddie is involved then it is securitized behind the curtain of the GSE guarantee. Get your own information about (1) the title chain, (2) the securitization chain, (3) the money trial and (4) whatever is being represented in or out of court. The odds are none of those four will match up.

ags-weeks-filing-foreclosure-settlement-documents

by Jon Prior, Housing Wire

The state attorneys general and federal prosecutors will likely file the actual $25 billion foreclosure settlement documents in court by the end of the month, according to a source familiar with the deal.

The top five servicers agreed to general terms in the settlement last week, which would include billions in principal reduction, refinances, and even pay outs to homeowners affected by missteps in the process.

Questions arose recently over whether the finalization of the deal would its change the scope.

Rich Andreano, who co-leads the mortgage banking group at law firm Ballard Spahr, said while it will be difficult for analysts and officials to anticipate precisely how much aid each state will get from the deal until the documents are filed, results should not vary too significantly from the announcement made last week.

“I got the sense last week that they weren’t really ready. They weren’t done. It was one of those things where they were moving so fast that they had to announce it because it was getting leaked out,” Andreano said in an interview.

But the wait is centering around the complexity of the deal.

“We just reached a very large and complicated joint state-federal settlement,” said a spokesman for Iowa AG Tom Miller, who led the investigation and talks. “We are now preparing the materials we must file in court to formalize this agreement.”

For every dollar a servicer writes off, it will get around 50 cents of the $17 billion in settlement “credits.”

So, officials were quick to point out last week that the settlement would result in roughly $34 billion in total principal forgiveness, maybe as high as $40 billion in eventual assistance. When the documents are finalized, Andreano expects the impact to be between $30 billion and $35 billion.

“I don’t think there would be any dramatic changes in the numbers,” Andreano said.

Servicers and AGs are working out exactly how much credit will be distributed and for what loans. Department of Housing and Urban Development Secretary Shaun Donovan said last week under the loose agreement struck, servicers would get fewer credits for write downs performed on mortgages backing private-label bonds, sparing investors from the brunt of the settlement.

Also part of the deal includes payouts to borrowers who were either foreclosed on during a modification or were wrongfully foreclosed upon all together. Under the agreement, an estimated 750,000 of these borrowers could get up to $2,000 in reimbursements.

New York and California were a part of a group last to sign onto the deal. California AG Kamala Harris said she expects roughly 250,000 homeowners in the state to get a write down over the next three years because of the deal. Another 140,000 could get the $2,000 restitution.

“This outcome is the result of an insistence that California receive a fair deal commensurate with the harm done here,” Harris said at the time.

With so many borrowers there and in other states applying for the long awaited write downs, servicers will be spending the better part of the year increasing employees and training staff.

“They’re going to need more people to handle this,” Andreano said. “And they are going to need a certain level of expertise and competency. This could take years.”

jprior@housingwire.com

Follow on Twitter @JonAPrior

22 Responses

  1. I work for a lender and dont know what exactly all the fees are for but they are so common accross the industry that everyone seems to charge the same fees.

  2. Enraged,

    You give a VERY good rendition of the fraud we are up against. I am concerned that the settlement allows that fraud to continue. While we may, individually, be lucky enough to find a court and judge that understands the depth of the fraud, many will never have access to that court. It was up to the AGs to protect us, to investigate, and to demand accountability with the law.

    I think this settlement is a violation of our rights, and ask any attorney here to weigh in on this.

    Interesting article written in October 2011. Cannot provide the link because this site will post “awaiting moderation.” It may have been posted here before, but I do not recall.

    Search for “Complexity, Complicity, and Liability up the Securitization Food Chain: Investor and Arranger Exposure to Consumer Claims”, by Kathleen C. Engel and Thomas J. Fitzpatrick iV.

    Focus on acquiring legal title with knowledge of default. And, indemnification, by PSA, of security investors, trust, trustees.

    We are dealing with very new and not yet addressed law. Settlement may very well be in violation.

  3. This whole thing is a joke. Even if the two grand actually went to the homeowners, it wouldn’t even cover the cost of relocating. As far as losses go, it’s not even a drop in the bucket, and as usual it’s intended to put a positive spin on things and garner votes for Obama despite the egregious behavior of these crooked “lenders” who are able to orchestrate this kind of crap because they are still holding onto his strings, just above the hem of the curtain. The wool is still pulled over the eyes of everyone who isn’t in foreclosure, and the “deadbeat borrower” label remains firmly in place. The AG’s need to get the boot and look for a job. Even Kamala Harris who seemed to really be working for the people of California has been completely boondoggled by banker rhetoric, falsehoods and artful dodging.

  4. @Anon:

    I reversed the names by mistake. New trustee is BNY. New servicer is WF. Makes no difference. Stawmen from A to Z.

  5. @Anonymous,

    For a minute there, I didn’t kow where you were trying to go with that TILA question…

    I will let you in on something, though: as you recall, I had 2 loans. A small 40K one, serving as a downpayment (which allowed me not to pay any PMI. Go figure…) and the large one. I stopped paying the small one long, long ago. It was sent to collection where it stayed for 3 years, completely ignored by me. I didn’t have the money. I forgot all about it.

    Out of the blue and within 2 weeks of each other, two years ago, I got 4 letters. The JDB, who told me that he owned that debt and wanted his money and… the previous bank wrote to me that it had transfered/assigned/sold my loan to a new trustee and a new servicer. I got the notification from the “new trustee” (let’s say WF)and the the “new servicer” (lets say BNY) as well… I thought that was odd: how could a JDB, a trust and a servicer ask for the same money at the same time?

    Of course, I couldn’t resist. I had to QWR the hell out of everybody. JDB, WF, BNY and previous servicer. “Trustee” BNY said: can’t talk to you without a POA. Send us a POA (I did. I sent my qualified POA so they would talk to me and I resent my QWR). BNY then said: you have a POA. We can’t talk to you if you have a POA. We can only talk to the POA (I swear I’m not making that up!).
    New servicer said: I think it’s a mistake. We can’t find you anywhere. You’re not ours.

    JDB said… just about nothing. Ignored the QWR.

    Old servicer said: “Remember that letter we sent you? The one about that transfer to BNY? We made a mistake. Sorry about that. Not theirs. Won’t tell you whose but definitely not theirs.” MERS did confirm new servicer and new trustee, though. Go figure.

    In any event, I ended up resending QWR’s to everyone with very, very specific threats. Actually, I clearly told JDB: since you allege that you own a real-estate related debt, it is my understanding that Tila and Respa apply to you. I tell you what: buzz off right away or I’m going after you so hard that you won’t get up for a long time. My attorney did confirm, after the fact (and we’re still waiting to hear from JDB. But come to realize, they do not file suit. They just pester people…) that, as soon as it is real-estate related, Tila and Respa can be invoked.

    So, under those conditions, I’m sure that you could go after anyone allegedly involved in a real estate-related transaction with Tila and Respa.

    Would it be worth it tough?

    So, to answer your question: my attorney believes Tila and respa do apply, even to JDB. He believes that FDCPA does apply to any “trustee” and “servicer” and he really believes that UCC is the one thing to tie it all neatly together. Inother words: doesn’t hurt, as soon as it has to do with real estate, to claim everything and then some, just in case something might stick. So far, it’s working. It’s sticking pretty well.

  6. chris

    I have only been trying to make point.

    Thanks to everyone for your response.

  7. Thanks, Enraged

    I suspect that you are correct. Needs to be filed against the servicer — and not the security investors. This is what I wanted to hear.

    And, who is really foreclosing? The servicer.

    And, who wants to make this process easy for the servicer? The US Government by the settlement.

    And, why do have a servicer as the creditor for TILA purposes? When the TILA says the servicer is not the creditor? Because subprime were never loans to begin with, they are collection rights to false default debt, by which only servicing rights survive. In effect, TILA does not apply to debt collection “loans.”

    Again, Thank you!!!

  8. @ ANONYMOUS

    Sure, why not? Might be expensive and time consuming though. I have a few attorney friends and they say “every case has money in it”. In other words the cost and time to litigate. How much do you want?

  9. If you read my ‘new agency’ deal, you’ll see it doesn’t speak to
    properties where the borrower is not underwater but nonetheless has a messed-up title. A homeowner who only ‘owes’ 240k on a home valued at 300k, doesn’t want a ‘market value’ loan; he just wants his stinking title cleared. And what about things like TILA rescission?
    No reason one can’t pursue that. I haven’t been able to put my own head to TILA and sub-prime loans, for what that might be worth, altho I have posted some links to what I thought would be instructive cases and info. I did study TILA in 2008 somewhat and that’s why I have a file of cases I will gladly share. Somewhere out there or to be adjudicated based on FACTS are finite answers -hopefully they’re out there already – about who can get ‘nailed’ for TILA violations and the sol on rescission. I know there are some rather large dangling participles, just kidding, ‘loose ends’, but that agency system would provide relief, I think, for more people than it wouldn’t. I personally like it that they’d have to accept the reduced payoffs and that’s how we get the billions out of them and out of their control.

  10. Forgot, probably not the only thing, all assignments of dots or mortgages must be executed and recorded concurrently with the sale of the note. Strict compliance with penalty. This language is also added to the newly reformatted dot.
    If none of this ever happens, that dot needs to be reformatted yesterday to include what is mentioned here and to EXCLUDE MERS.

  11. Create a new agency. Put an office or five in each state per population. Have that agency handle “refinances” – NO Mers in the new dots. Borrower gets new loan from agency, treated as refinance, in the amt of the market value of his home in return for settling any disputes, and title is quieted. Interest rate is fixed at market rate, whatever is ‘par’, not to exceed 5 %. The way in which the banksters fork over the billions is that the amt stated as necessary to pay off the (alleged) existing debt in the ‘pay-off statement’ they issue is the amt of the market value of the home, which mechanics for determination will be agreed upon. Very liberal (if any?) guidelines to qualify for these refinances, if that can be accomplished.
    Buyer has settled claims, gotten meaningful relief and that has come from the bankster by way of the market-value payoff statement, (and thus the amt of the new loan) banksters got some money – the market value as payoff amt, title is quieted, MERS is gone. All interests returned to recorder’s offices. The payoff statement comes with a standard indemnification against subsequent claimants, which is good for the agency, its successors and or assigns, the borrower, his heirs, and subsequent purchasers.
    Buyer pays limited closing costs (which may be borrowed – no source of funds required but no second on home at closing) and reasonable administrative fee to new agency, not to exceed 1% of new loan amt (the admin fee).
    Agency approved, licensed trustees. Dot REFORMATTED to state that if the trustee is substituted, it may only be after the recordation of an assgt of the deed of trust from the last ben if not apptd by original beneficiary shown in dot, and the sub trustee may not act until his substitution is a matter of public record. Anyone purporting to act for anyone must have their authority recorded for public record prior to
    acting on that authority. The dot trustee must be given X to initiate foreclosure and sign a verification to go out with the NOD that he is in receipt of X and will cc the borrower on request within a time certain.
    Expressed, strict compliance and expressed penalties for failure to comply with all “times certain” and dot requirements.
    Only thing left to ponder is servicing ? and whether or not these refinances should be portfolio’d. There might be a requirement of seasoning of a matter of six months to a year before they may come out of portfolio, which means either the agency sets up servicing arms -or- ‘special’ existing servicers are designated and these loans must be segregated at least for (another) time certain. Won’t kill anyone. It means the gov will be out the money – the amt of the new loan – for that amt of time, but it will also be earning the interest on the notes for that period. The agency is commissioned for five years with a review after that and continuance is subject to expressed x,y, z.
    This plan takes the bankster contribution out of their control, while
    still not making them write a check for billions and billions at once.
    Nothing about the new agency may be kept secret. Everything must be posted at their website. Banksters must provide the reduced
    payoff statement (at market value) within a time certain from receipt of a request for that reduced payoff statement. Reconveyances of
    existing deeds of trust must be done in, you guessed it, another time certain with strict compliance.
    Now to me this makes sense. The banksters won’t like it because as I said, their billions in contributions are out of their hands, essentially (must accept reduced payoff at market value with indemnification).
    We won’t like it because it will likely involve some dreaded ‘passes’.
    But we have to move forward. One of the foreseeable roadblocks would be the impact to Godknowswho on accepting a reduced payoff instead of putting in some claim for insurance. I can’t formulate a plan of any kind for that deal since I am not privy to the real way it works, but I could at least try if I knew.
    Other considerations would be how to handle properties with existing seconds on them, especially if that second is allegedly held by a party who is not the party who allegedly holds the first. And of course, this does not speak to resolution for those who already had their homes taken by the boogie man, especially when a bona fide purchaser has purchased that home. It’s my opinion that an assignment from or foreclosure by “MERS” is notice of an irregularity, even the dot itself for that matter, but that’s quite a battle, and that’s not movement toward the goal, much as it kills me.
    The goal is to take control of the billions intended as debt reduction to American homeowners, return our land records to their proper homes, quiet titles, and have a shot at some resolution and healing.
    PS – the payoff statement can be shorted by 100.00 ? contribution to the county recorder’s office and heck, while we’re at it, let’s throw in a contribution of 100.00 ? to state coffers.

  12. CLARIFYING THE MYTH ABOUT THE “BANK SETTLEMENTS” WITH ATTORNEYS GENERAL: MONEY WILL NOT BE USED FOR HOMEOWNERS, AND IN SOME INSTANCES WILL BE DIVERTED BY STATE GOVERNMENTS TO PLUG HOLES IN STATE BUDGETS
    February 13, 2012

    February 13, 2012

    We have been receiving literally dozens of e-mails from homeowners inquiring as to what effect the bank settlements with various attorneys general will have on their foreclosure cases. Answer: NONE, for several reasons.

    First, the Attorney General claims were just that: claims by attorneys general against the banks. Private litigants were not parties to the litigation, so they are not parties to any settlement. In fact, it has already been reported that the settlements have no effect on and do not preclude an individual pursuing legal relief against a lender.

    Second, the settlements are not even finalized yet. They have to be filed in court, and once they are, the states which filed the lawsuits will be free to enact whatever procedures, processes, requirements, etc. they wish as to whether a homeowner “qualifies” for any settlement proceeds. As we all know from the loan mod scam, this process can take months or even years, and there are a million ways that a homeowner can be found to ultimately not “qualify”.

    Third, and perhaps most revolting and insidious, is that several of the states have ALREADY announced that portions of the settlements will be diverted to state budgets. Specific instances include Wisconsin’s announcement that it plans to use $25.6 million of the settlement money to “plug holes in the state’s budget”, while Missouri has announced that it plans to put $40 million of the settlement money into the state’s “general fund”.

    So, once again, the homeowners get nothing. In fact, it has been separately announced that because the attorney general lawsuits have been resolved that the banks will be ramping up individual foreclosures, obviously now because they will not have state governments and attorneys general examining what they do. Sad, but unfortunately true.

    Jeff Barnes, Esq., http://www.ForeclosureDefenseNationwide.com

    Read that again: Missouri apparently decided to sign after all…

  13. @Anonymous,

    As JG would say, FWIW, successful TILA actions are those that have been filed against the servicer, from what I have seen so far. Don’t have specific cases in mind (there are quite a few) but I do know that servicers have walked away from TILA/Respa actions in countersuit (defense to foreclosure) or direct TILA/Respa attacks by either agreeing to recission or by dismissing cases and not refiling them, leaving the filed open for quiet title. I realize that quiet title is not the panacea but it’s better than nothing and you get to stay put, without the threat of another foreclosure action. Plus, you can sell the house and move on and I would venture to say that, once the title is quieted, you have a real leg up over anyone else currently trying to sell a house. A quiet title would seem to be a definite selling point, in my views.

    My question to you would be: knowing that you have the greater chance prevailing in such an action directly against the servicer, why would you want to go after bigger but much more elusive fish? Unless, of course, you’re asking for a future how-to teaching manual, which is an honorable endeavor.

    As we say where I come from: you don’t change a winning team…

  14. Oh, and they said a “payoff” check for the full amount of the “loan”should be made out to OneWest Bank, FSB—who is only a DEBT COLLECTOR…why would a payoff check be made out to them? Why not to the “investor” that they just told me (lied), “owns” my loan?

  15. Here is the actual letter (full of lies), written to me from the foreclosure mill (Aztec) when I disputed the debt and asked for name of real creditor, and cited FDCPA violations…

    “…Under the Fair Debt practices please be advised the original lender (creditor) was Mortgage Electronic Registration Systems Inc., solely as nominee for IndyMac Bank, F.S.B…Your current lender (creditor) is Deutsche Bank National Trust Company, as Trustee of the INDX Mortgage Loan Trust 2006 AR19…under PSA,…etc…The current servicer for your lender is OneWest Bank, F.S.B….payoff should be paid to this office via certified funds…The matter of the Fair Debt is now considered closed…the foreclosure action will proceed…”

    See how they manipulate everything? MERS was never my lender/creditor. A Deutsche “Trustee” is never a lender/creditor. Yet these lies are what they use to foreclose.

    Then here is the lie that the servicer wrote to me when I cited FDCPA and TILA amendment—he wrote:

    “The Truth In Lending Act entitles you to information concerning the investor who owns your loan and we have provided that. However, neither TILA nor the Fair Debt Collection Practices Act gives you the power to pay the investor directly or to refuse to pay the loan servicer retained by the investor.”

    So, they ultimately just kept saying (the lie) that some “investor” owns my “loan”…investors NEVER own any loans.
    They said it was “pooled into the MBS Trust”, and “we service it”…That was their answer to who is the real creditor…

    How many lies can YOU count?

    Yet they steal my house…

  16. Enraged

    Need a creditor. Where is the Waldo world is my creditor?? In order to assert TILA/rescission, I need a creditor. I need SOMEONE. If security investors “funded” my loan, ie direct by security investors, then they must be my creditor. Foreclosures are largely done in the name of trustee (who “owns” nothing), on behalf of the trust (which is only a pass-through and has no assets/liabilities), all on behalf of the security investors (the only beneficiary). Thus, the security investors are foreclosing, at least that is the way it is represented in courts. Well, then, they are also subject to TILA violations as assignee. I have to sue them, and they can sue the security underwriters (which is who they always will sue). If one accepts the security investors as the “funder/lender” and assignee, then those security investors have to also take liability for violation of the law — especially under the TILA.

    Who else is responsible for TILA damages??

  17. @Anonymous,

    On what theory? Aren’t they alleged to have been screwed as much as anyone else, save the banks?

  18. Does the recent 26 billion settlement agreement help or hurt those in a chapter 13 bankruptcy plan?

  19. Can I sue security investors???

  20. FORECLOSURE REVIEW DEADLINE EXTENDED To 7-31-12

    Those seeking a review of foreclosure actions on their homes in 2009 and 2010 have received a 90-day extension on requesting the so-called Independent Foreclosure Review ordered by bank regulators.

    The new deadline for returning “Request for Review” forms is July 31, 2012. The deadline was formerly April 30.

    For what it is worth ,,this came was announced today!
    2-15-12.

  21. So let me get this right, “up to” $2,000 per homeowner and they need to hire and train a large staff to administer the program??? Sounds like they are going to spend 5k to give out 2k…Really, does 2,000 solve anything in real estate?

  22. The odds are none of those four will match up.

    Ok…i am willing to pay your service to get my proof that mine doesnt add up….but what do we with do with this when its confirmed…

    it looks to me if everyone is willing to stay put in the houses they are living in now for the next 50 years, there is nothing that should make them leave and/or pay the fraudulent servicers

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