States Using Settlement Funds for Borrowers as General Funds

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BLAME THE BORROWER, TAKE THEIR MONEY AGAIN

Editor’s Comment: As though it was bad enough that the banks, who suffered no loss, got the bailouts, the federal reserve money, the insurance proceeds and the proceeds of credit default swaps and other credit enhancements — all without credit to the investors who put up the money in the first place which would lower the debt due from borrowers — the States are now taking the settlement money for themselves. Instead of providing some value to borrowers who were obviously injured by these bad loans that are completely or partially paid off, the States are saving their budgets rather than their citizens. With a government like that, who needs it?

Maine Becomes Third State to Divert Foreclosure Settlement Funds Away from Homeowners

Following Scott Walker in Wisconsin and Jay Nixon in Missouri, the state of Maine will be using money from the foreclosure fraud settlement not to help suffering homeowners, but instead to pump up the state’s general fund–patching budget holes blown by those states’ right-wing governors.

Dave Dayen at FireDogLake notes:

There’s nothing illegal about this; the new executive summary posted at the National Mortgage Settlement site says this about payments to the states:

Payments to the States

The remaining settlement funds, approximately $2.5 billion, will be paid to the participating states. The funds may be distributed by the attorneys general to foreclosure relief and housing programs, including housing counseling, legal assistance, foreclosure prevention hotlines, foreclosure mediation, and community blight remediation. A portion of the funds may also be designated as civil penalties for the banks robo-signing misconduct.

That’s essentially a license for states to take the money as a “penalty” and put it into their general funds. Three out of 50 have already done so. We’ll continue to track who else will engage in this, and clearly there will be more. You honestly think Rick Scott or Rick Perry won’t use this money to plug their budget holes?

 Walker was the first one, unsurprisingly, to announce that his budget would be saved by the foreclosure settlement (should we at least be grateful that he’s not trying to slash more out of his state employees’ pockets?) but the speed with which his move was imitated definitely lends credence to Dayen’s point.

The foreclosure settlement isn’t just meant to be a “penalty” for the banks’ criminal behavior–it’s far too small to do justice to that idea. It’s meant to provide support for those struggling with the housing crisis, in danger of losing their homes. As Travis Waldron at ThinkProgress noted, these states have other places they could generate revenue “without taking money from programs meant to help struggling homeowners.”

By Sarah Jaffe | Sourced from AlterNet

57 Responses

  1. @ edgitymom

    There are 5 elements to fraud. Need to check and see if you have them. The Statutes will have them, in your state. I’ll bet you do!

  2. @4edgitymom – as to the “springing back to life” of a refi, i simplified it and cut a corner or two, but look up the doctrine of equitable subrogation. if I pay off another lien, even if there are problems with my lien, I may be able to step into the shoes of the paid off lien to the extent that my funds were used to pay it off. you’re right, it’s not an automatic remedy. but it’s often used in circumstances that we were discussing.

    as for the TARP funds, insurance, and other methods whereby your loan has been paid off 3 times already, TARP funds didn’t pay off your loan and the banks have paid back 99% of them and insurance would be subject to the same subrogation issues (just like in a car accident or work comp case, insurance gets paid back what they paid out if possible).

    there are real issues out there of malfeasance. i don’t dispute that. but there’s an equal amount of malfeasance and nonsense from the homeowner side. and that no one wants to have a meaningful conversation about it without getting pissed off and fighting i think speaks volumes. i can’t tell you how many times i’ve received QWRs from people who cut and pasted them from a website without bothering to read them or understand what they’re doing. these cut and paste jobs include information inapplicable to their loan, even including names of other people entirely. i’ve seen complaints filed cut and pasted from the internet and other places that are absolute nonsense, even ones filed by attys. not every one is full of feces, but a certain percentage of the foreclosure defense side is. so please stop acting so pious about this stuff. there’s fault on both sides. no one forced anyone to sign the mortgage or buy the house. too many posts and comments use the words “fraud” and “void” with no real understanding of the legal definition, elements, and ramifications of them. we may be in need of a modern day fairy tale of the little boy who cried fraud.

  3. Looks like another “bailout” this time for the States.

  4. Lastly, if you guys want a great resource, check out http://afnetwork.org. Consider joining. Strength in numbers.

  5. @KathyCharlotte – This is exactly why you shouldn’t buy a REO property. And this is exactly what is going to screw up the housing market for years to come as a direct result of fraudclosure. I would do as someone else below said – look into Ocwen. I would also look into whether the loan was securitized. Is an Ocwen loan one of those that names MERS on the face of the mortgage? If so, the loan is securitized. In that case they should file a Quiet Title Action. (but I’m not an attorney)

    In terms of your own case, if there are no releases from lender to lender, that’s fraud. I’m not sure what settlement you’re talking about, but in your case, whomever is due your money (every month when you pay your mortgage) isn’t getting it. Quiet Title Action. YOU get your mortgage.

  6. @tnharry said: louise – if that contract is void, then the old mortgage that was paid off by that void refi springs back to life or the purchase of the property with that void loan is undone. you keep using words like fraud and void without thinking all the way through them.

    ————————————–
    No, the old mortgage doesn’t “spring back to life.” You’re forgetting that when a mortgage is satisfied (as in a refi), the bank is “supposed” to send you the original, wet-ink mortgage and note marked “satisfied.” If you notice, the loan number on the first mortgage is different than the loan number on the refi. They are two separate loans.

    Let’s try another example. If a police officer forgets to Mirandize a murderer, what happens? The murderer gets off, and he can’t be prosecuted again – that’s double jeopardy (at least not until he does it again). He gets a free body. Does that suck? Absolutely. But technically, should he be prosecuted? No. It’s the letter of the law. The police officer fucked up. He let a murderer go free. It sucks, but that’s what happens.

    This housing crisis is no different. Does it suck that the 2nd (refi) mortgage is void? Yes. Does it suck that the homeowner can get a free house as a result? Maybe for you it does. But just because the 2nd is void doesn’t mean the first “springs back to life.” That’s double jeopardy. And the banks should pay for their epic fuck up. Just like the police officer will pay for the rest of his life for his epic fuck up.

  7. @tnharry said: and c’mon – get your head out of your colonoscopy entrance. there are still completely valid foreclosures happening everyday

    Yeah, 14 – 16% of all foreclosures. Because those weren’t securitized. But for the other 84 – 86% of people in foreclosure …..

    @tnharry said: for all of the assertions that “we’re not looking for a free house”, a lot of time time that’s exactly what people are looking for. when push comes to shove, the money’s not there, even if we cancel or undo the foreclosure. a few months later we’re all right back on the courthouse steps.

    I think people in foreclosure would disagree with you. The “free house” is a bonus at the end of the day. But that’s not what they’re after. They don’t disagree that they are in default. They just want to pay the RIGHT people.

    The truth of the matter is that the person foreclosing (the plaintiff) in many instances ALREADY GOT PAID … whether through mortgage insurance, investors who paid too much for the loan from the beginning or by simply stealing what they purport to be a valid mortgage and note. If anyone is getting a “free house” in this deal, it’s many of the entities doing the foreclosing.

    The argument isn’t about whether or not people in foreclosure owe money. They will all admit it. It’s to whom they truly owe the money.

    As an example, if I borrowed $100 from you and you wanted me to sign a note saying I’ll pay you back in 3 weeks, I’d do it. Now, let’s say you go and record that note with the county recorder, making it a legal document (i.e. a blank check). When I pay that $100 back to you (maybe with interest), I’m going to demand you hand me back my note I gave you promising to pay you back. If you hand me a photocopy of that note I originally signed and gave to you, what assurance do I have that you or someone else who finds the note isn’t going to come after me for another $100?

    Now let’s take the example one step further. You took my note and decided to sell it to someone else (call him John) because you wanted your money back immediately. You record the assignment of the note and you promise to send John the note. But you don’t. Then you turn around and find Mary, and you sell her the same note and promise to send her the original. Then you turn around to Dave and get his $100 and promise to send him the original, but you don’t. Now John, Mary and Dave are pissed because I owe them $100. So they forge a document (or claim it has been lost or destroyed) and all of them come after me for the $100.

    The first problem is I don’t owe anyone but you $100. Yet I have three people coming after me for $300. Well I only borrowed $100. And I didn’t borrow it from any of them. But they say I owe then and they have a document to prove it (albeit a forged document). So should I be liable to John, Dave and Mary because you were an ass and sold my note (and maybe even assigned it to one or all of them) and didn’t hold up your end of the bargain? No! I owe someone money, that I don’t dispute. And I’d even venture to say I owe it to you (except you’re the crook who already got paid on my note 3 times). And you assigned the note to someone else, which means it’s not legally yours anymore either.

    And furthermore, I don’t owe you because you already got paid … three times. And John can’t produce the original note saying I owe him, so I don’t. Nor can Mary and nor can Dave. I want to pay the money back. But I don’t know who is the rightful owner of my note because no one can produce it.

    Isn’t the logical conclusion that I should just keep the $100?

    The real claim in this (very crude) example is against YOU, the plaintiff in most foreclosure cases. You’ve already been paid numerous times over. You shafted John, Mary & Dave (your investors) when you securitized the note. Besides the fact that you sold the same security three times over.

    You broke the law. And now you’re coming after me because, after all, you are still holding my original note, so I owe you $100!

    I could go on and on, deeper and deeper with this example, but I think I’ll just leave it at that for now. This post is already long enough ….. But I think I made my point.

  8. @John Gault,

    “You do give a nod to lost jobs being the cause of that default. But I think the reality of lost jobs and savings deserves more than a nod.” You betcha!

    I need a few lessons in diplomacy but I do agree that, even if some banks play by the rules, the fact that many people lost their job and fell behind should have been addressed by our government as soon as we were forced to bailout banks. The same kind of assistance given to them should have been given to us… The fact of the matter is, though, that there are more banks that didn’t play fair and square than the other way around. And if we are to believe Tnharry, they must all be in Tennessee…

  9. Speaking of Ocwen, check this out:

    http://www.bloomberg.com/news/2011-06-06/goldman-sachs-agrees-to-sell-litton-unit-to-ocwen-for-264-million-in-cash.html

    “Ocwen is getting a portfolio of loans with about $41.2 billion in unpaid principal balance as of March 31, most of them non-prime home mortgages, the filing said.**Ocwen agreed to finance about $2.47 billion of servicing advances associated with the business, the statement said.

    **Advances include the principal, interest, taxes and insurance remittances that

    servicers must make to securities trusts

    even when homeowners fall behind on those payments.** ”

    Oops for them! Can this be judicially noticed?

  10. @ Kathy Charlotte

    Are you aware Ocwen is a servicer? I am in Fed Court with them as we speak. No authority, improper assignments, forged documents. etc…they are a bad bunch. Do some homework…the truth will be astonishing.

  11. You know, tn harry, there’s some truth in what you say. If it weren’t for foreclosure gate, many people would have no lawful defenses to their
    own default. You do give a nod to lost jobs being the cause of that default. But I think the reality of lost jobs and savings deserves more than a nod.
    And you’re right about (contractual) obligations and provisions. Those are upheld when necessary by the law. It’s the same law which says if you want to enforce this contractual obligation, you must guard that right. The clients you apparently represent didn’t have any trouble doing that, and it’s good to hear there is still some legitimacy left in our world.
    Not guarding that right, no matter the blame, has opened the flood gates to legitimate and lawful foreclosure defense. Is availing one self of that immoral? Let’s not go there.

  12. I suspected that the main reason for the settlement was to bail out the states. AGs capitalizing on the mortgage crisis. Corporations use “crises” to their advantage, just like “terrorism” and all the other bull.

    That makes the settlement no different than any class action wherein the attorneys walk away with over half the funds and the “class” gets the lowly dole outs.

    Moreover, it’s seems like just another form of money laundering. Moving money around through the various corporations, making it tax-free and perfectly legal because it’s been legitimized by the courts.

    All states are CORPORATIONS.

    If these AGs and our administration really cared, they would have simply put a moratorium on ALL foreclosures three years ago. Period. Instead, they drag it out and drag it out, as more and more people are injured by the loss of their homes, their livelihoods, and their health.
    Then after most foreclosures are done, they get out the Band-Aids.

  13. Yes thank you Enraged,that is quite true,it is a human frustration point long since passed(hatred) and lesson learned,a temporary ,fool’s bad attitude from exhaustion,frustration,and this new found impoverishment…but I do,stand reminded&corrected from the truth you wrote.

    I ,being much beyond”radical” perceive that the whole stinking system that we’ve been taught to believe in as the ONLY one(it has it’s merits) has too many flaws,now exploited,to”fix”.I am over “there” with those who”thought” a”free market” could work.It is beyond me now,why anyone would ever”think” that the Earth is to be parceled and SOLD.USED and abused.

    One should not have to”pay” their way to merely live upon the planet they were born upon.I know..what am I some kind of…insert own adjectives here.
    Money?what”money”?the fiat?the Au that is no more?What”rights”…given from…???

    AVERY radical notion,that we all need not the Money Masters and that we could and should get a little E-volution/R-evolution( not the blood and guts sort) going..long past due..that we are all in this together and we kiss up to this”system”…
    Free your mind.

    It can’t be”fixed” it isn’t designed for”fixing”….
    redemption song is the emancipation from the mental slavery that holds the entire world in man made chains of owners/slaves.

    I refuse to condone it all anymore and many many many are also making this decision that there always has been and always shall be,another,more human way to Live on Earth.

    I have no agenda I have however the ability yo imagineer a different reality one without the power over of governments and religions and commerce as we know them to be now..I am not an atheist,I am no anarchist seeking to burn villages,and I don’t want any part of most of”commerce” as it is practiced today.These adhesion contracts do nothing for me…

    I see that it takes so few words to speak the truth.Clear and sweet.

    There is a same hands faction at work,and I see the world set free when the people finally move past believing the lies…if only they could have independent perception….

    NO ONE should have to pay&pay&pay&pay&pay&pay&pay with Au or clam shells to their”owners”.The whole thing is sick,was sick,and will remain,sick.
    That’s what she said!!!
    “Free house” set?

    What ever “gave” ANYONE the”right” to sell these things?
    Thought so.

    of course I may well be completely,daft….
    anyhow,the”majority” has it’s way…right?Quite the opposite perhaps?

    Thanks for considering that indeed,other council fires were here before ours,and still remain….

    If we must resort to”currency” and paper laws,least they ought to be even and honest for all involved.As to selling homes(I said homes not houses) and quality nutrition,and a few more that I could name:uh…no.These things are indeed needed by all.

    I have no desire to shore up what is coming to an end,even if it did”work” for many for some time…sort of…including myself…sort of…if you catch my drift.Hey the bankers aren’t”snow white” either…they drifted….

    We either stop our fools games or we remain fooled and fools.As if nothing could possibly be started anew?

    Suppression of new ideas.VERY dangerous.

    I hope someone understands.It is after all,THEIR game we keep on playing…right?

    No form of tyranny over our minds.Ever.Again.

  14. @Carie,

    Way back then, when I lived in Boston and we had a (republican) governor, and it was long before Romney, the guy had a brilliant idea… An attorney. Bill Weld was his name. One of those ultra rich kids, again.

    He made homeless people’s lives so miserable, by closing the shelters in the midst of winter and other humanistic measures, that… they all fled to the West Coast! Maybe you want to return the favor…?

  15. HOMELESS AND SHELTERLESS GROWING AT ALARMING RATES BECAUSE OF MASSIVE FRAUD—WHERE’S THE GODDA*N COMPASSION???

    READ MORE:

    http://www.huffingtonpost.com/2012/02/16/homeless-shelters-los-angeles-america_n_1280909.html

    Los Angeles Struggles With Homeless Crisis, Lack Of Shelters

    First Posted: 02/16/2012 11:34 am
    Los Angeles may be known for the glamor of Hollywood and the glitz of Beverly Hills, but it’s also the homeless capital of America.

    More than 51,000 homeless people live in Los Angeles County, from Antelope Valley to the South Bay, with double-digit percentage increases in the number of families, seniors and veterans over last year.

    Most alarming is the rise in the ranks of the unsheltered homeless — more than a fifth of homeless families are without shelter, nearly double the proportion found two years ago, according to the latest count conducted by the city.

    This shelter crisis has persisted for decades, yet the county has rarely invoked a 25-year-old California statute that would allow it to open public facilities to shelter the homeless and to alter zoning codes to permit shelters in neighborhoods that are now off-limits to them. The county did authorize year-round shelters in 2004, under pressure from several vocal members of the L.A. City Council, but they currently serve only about 2,000 individuals — 4 percent of the homeless population.

    “It’s really bad. We have more new homeless people than we’ve ever had — people who lost their jobs and lost their homes via foreclosure,” said Brenda Wilson, who runs New Image, the largest emergency shelter in the county, with more than 660 beds…”

  16. @Tnharry,

    And I’ll tell you something else: anyone of those guys (and girls! Your party’s got doozies there too!), more interested in what happens inside my panties than whether or not I can eat everyday, give me a really bad rash…!

  17. @Tnharry,

    Are you enjoying your new-found fame? Would you look at all those people you pissed off? Looks to me like you really know how to talk to people…

    Ever heard of that book by Carnegie: “How to win friends and influence people?” You need to go back and read it some more…

  18. TnHarry…,

    I am greatly disappointed at you. I thought, for a minute, that you used your brain but you just proved me wrong.

    Those people that you happily foreclose on on behalf of those banks, how long ago did they buy the house and with what kind of credit score and documents? Did they put a down payment at the time? I expect your clients had thoroughly checked them out and, indeed, everything checked at the time, right? I mean, those banks would never have sold something to anyone, knowing that that someone wouldn’t be able to pay, right? (You seem to say that your banks are ethical, moral, above board and everything else…) Or… did they? Did they fail to use “due diligence” right off the bat, not unlike all the other players? Let’s be honest here!

    Assuming that they used “due diligence”, and everything was on the up and up at closing time, have you heard of a little something called “when-the-banks-tanked-an-entire-country’s-economy and millions of people lost their job? Tell me again: what makes your foreclosures legit, just and right? Are you sure all your homeowners bought more house than they could swallow or did they lose the ability, after a few years, to pay because… the economy tanked, through no fault of theirs?

    I will hand you the fact that all those names listed in the article appear to belong to the republican party. Is that malfeasance on the writer’s part or the simple observation that, all in all, republicans have really, really acted like greedy morons and everything they seem to be doing nowadays is definitely against the 99%? I’m seeing smoke. And a lot of it! There must definitely be fire somewhere!!!

    Look at those buffoons! Rick Perry? A real prize, if i ever saw one. Walker? Rick Scott? Come on!

    To be fair, I will give you the opportunity to answer with a few dem names, so that we all can compare apples with apples. Name 4 dems who have done as much damage as those four clowns referenced above.

    Fair enough?

  19. tnharry,
    like Ian i also will leave in 24 hours If my loan servicer/default debt collector would put me back in the same position I was in before I bought the house, they would owe me approximately $350,000 in deposits, upgrades and payments. I would like it in hard cash only , otherwise i see no reason why anyone should be made to leave for as long as they want to stay

  20. @nharry,
    5yrs ago my daughter and her husband bought a REO property in IL 2007. I hired an attorney to represent them. haha … the loan closed with multiple liens on title and unrecorded contractor liens were also fled after the sale. They can not sell .. they can not refi ….. they were told by Ocwen (the seller and new lender) to sue their attorney. ??? No title Ins?? When they tried to recend multiple times in the 1st 3-6 months. They were told they would have to tender?? Yep .. to Ocwen the seller and the lender would then be paid 2x?? Any suggestions >>> as if the settlement will clear their title? And my own title has 3 lien holders claiming ownership to the one origional pruchase loan (no releases form lender to lender) We never refinanced. In the settlement what bank gets our mortgage? Thank You in Advance!

  21. @tnharry. It was a purchase. At the time of the purchase, there were two outstanding satisfactions of mortgage that did not come out until abut 6/8 months later. Atty indicted about 2 mos after purchase.

  22. @louise – what was the mortgage for then?

  23. @tnharry:

    Did not have a refi. They tried to make it into a refi. Attorney who did the closing was nailed for wire fraud.

  24. louise – if that contract is void, then the old mortgage that was paid off by that void refi springs back to life or the purchase of the property with that void loan is undone. you keep using words like fraud and void without thinking all the way through them. you don’t get relieved of a contract but get to keep the benefit of the contract. if you’ve been defrauded, would you be satisfied with being put into the mortgage that you thought you were getting? i suspect not.

    your statements are marking you as a card carrying member of the free house gang.

  25. @tnharry: There are lots of other “irregularities besides fraud here. Contracts that are illegal are void. Insurance and cds also pay down the loan. How about payments to the IRS? That should be very interesting in the next couple of years. Also, how about robo-perjury? That is another fun aspect to this FC mess.

  26. laugh all you want tolle – I was quoting his holiness neil garfield

  27. tnharry- thanks for clarification. If you work only on actual, real bank, bank-owned mortgages, then of course you would never see any of this bogus securitization fraud which has decimated the global economy. The last (commercial) mortgage I had with a local 100+ year old bank, I had a question once over the 10 yrs I had the loan, I drove to their office, they got the files out of their vault or file room, we went over everything, we were each off due to a mistake on both our parts, we squared up. When I sold the property, they kept what they were owed, gave me a bank check for the difference through the closing attorney. Simple, quick, couple pages to sign, and that was it. Not so with the securitization nightmare.

  28. “that you in all likelihood owe someone”

    That’s comic genius right there, I don’t care who you are, that’s funny!

    Oh wait….tnharry….you weren’t joking?

  29. http://stopforeclosurefraud.com/2012/02/15/aequitas-report-foreclosure-in-california-a-crisis-of-compliance/

    Finally….every county recorder in CA and America needs to do an audit. Non judicial states should be required to do it. There should be a moratorium until it is done.

    Much is discussed in this report.

    Note: Re my county recorder – the substituion of trustee does not link to the grantor – no way to search for it. At the mercy of “notification” from the “lender”. What’s up with that? Is that how it is everywhere?

  30. ian – you purport to talk about “bank-owned mortgages” at first, but then you go down the assignment and robo-signing rabbit hole. those are two very different things and not what I was referring to. in my example and what I see everyday, there are no assignment, endorsement, mers, remic, trust issues at all. even Neil says that once all the “who wolds the note and has the power to foreclose” issues are worked through, that you in all likelihood owe someone.

  31. I had to laugh…Scott Walker is a Republican in Wisconsi who inherited a huge deficit and has actually brought it down since he took over. The comment about right wing governors is misplaced and not factually correct. It is why people have a hard time believing the left or left leaning bloggers. The story is the taking of the money and diverting away from homeowners, not the politics of the governor or the states deficit.

  32. tnharry- re: fraud- first of all, stop using the word Bank. These entities aren’t even nonbank banks. Using the word Banks, or ‘bank owned propertty’ just prolongs the myopic view of what we are dealing with here.
    If my loan servicer/default debt collector would put me back in the same position I was in before I bought the house, they would owe me approximately $535,000. I can have a moving van here within 24 hrs, sooner if necessary.

  33. Fully identify the party who can declare that a default has occurred to its interest – fully identify the party who is harmed by the “default”. Fully identify the party who purchased the obligation “For Value Received”. Fully identify the amount owed to this party. Fully identify the forecloser and who he represents. That would be a “valid foreclosure”. Anything else is not a “valid foreclosure” and there is no “default” to an interloper.

  34. tnharry- I am glad that you brought up the actual, bricks and mortar, bank owned mortgages, where the bank actually keeps the mortgage and note in their files or vault, they collect their own payments, and will no doubt try to keep a borrower in their home(s).
    However, whether the borrower fell behind for whatever reason, was put into a manufactured default/parallel foreclosure/dual track foreclosure or any of 101 reasons, my indignation and anger is due to the fact(s) that the US has borrowed, and forwarded, over 27trillion dollars (ala Neil Barofsky, former SIGTARP head), and the additional interest alone is over 800 billion per year. This is all due to frauds and imprisonable offenses too numerous to mention yet again.
    This isn’t why my parents fought in WWII, my father having been in, among many conflicts, the battle of the Bulge, where out of 100,000 men on Dec.16th 1944, one month later there were only 27,000 left, almost all wounded. But “my counrty right or wrong” prevailed among US citizenry at that time. If any of these foreclosing entities had any rights besides collection rights to defaulted charge-offs, do you think that they would have to forge,fabricate,or backdate,or invent ANY of their court documents? They are all CREATING, from nothing, entire loan files, chains of assignment, POAs, ‘attestations’, ‘affadavits’.
    As they used to say, “It isn’t illegal to fall behind on your payments. It is illegal, however, to lie to the courts”

  35. fraud is an easy word to say and a hard one to prove. furthermore, a remedy for fraud is to put the parties back where they were before the alleged fraud. Louise – are you willing to move out of the house??

  36. Considering that there was fraud at the very beginning of the so-called transaction, origination fraud and id theft, and that a warehouse lender was used to fund the loan (not in the mortgage contract), that more money was lent than the loan required and that money went into pockets and the Cayman Islands, that insurance and credit default swaps were put in place to “bet” against the debt, that the so-called debt was not retired as it was paid down; that securitization did not actually take place and the loans are not in the trust; that the IRS is owed money because the so-called SPV entities never existed; that the endorsements are all screwed up, because they original entities went bankrupt or merged or changed their name; and that the entity foreclosing does not own the loan and, finally, that the original note does not exist.

    With all that, or course, the homeowner owes the debt. Whattttt?????? Fraud is fraud by any other name.

  37. This money was never part of the settlement for the homeowners and was specifically designated to compensate the state and left it up to the Attorney Generals of each State. HUD is to receive part of that 3.5 Billion which will go to pay for counseling. Any compensation that the State uses is hardly enough to cover the costs associated with the “Servicer” misconduct and illegal acts. At least 1 Billion is going to the Federal Government directly for the various agencies.

    From HUD website.

    “In addition to the $20 billion in financial relief for borrowers, the agreement requires the servicers to pay $5 billion in cash to the federal and state governments. $1.5 billion of this payment will be used to establish a Borrower Payment Fund to provide cash payments to borrowers whose homes were sold or taken in foreclosure between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria. This program is separate from the restitution program currently being administered by federal banking regulators to compensate those who suffered direct financial harm as a result of wrongful servicer conduct. Borrowers will not release any claims in exchange for a payment. The remaining $3.5 billion of the $5 billion payment will go to state and federal governments to be used to repay public funds lost as a result of servicer misconduct and to fund housing counselors, legal aid and other similar public programs determined by the state attorneys general.”

    BTW, the only money going to the State is that money just mentioned above. The rest will be monitored as it is used to help homeowners. There is also an incentive to help borrowers within the first year, but it must be completed within 3 years.

    “Under the terms of the agreement, the servicers are required to collectively dedicate $20 billion toward various forms of financial relief to borrowers. At least $10 billion will go toward reducing the principal on loans for borrowers who, as of the date of the settlement, are either delinquent or at imminent risk of default and owe more on their mortgages than their homes are worth. At least $3 billion will go toward refinancing loans for borrowers who are current on their mortgages but who owe more on their mortgage than their homes are worth. Borrowers who meet basic criteria will be eligible for the refinancing, which will reduce interest rates for borrowers who are currently paying much higher rates or whose adjustable rate mortgages are due to soon rise to much higher rates. Up to $7 billion will go towards other forms of relief, including forbearance of principal for unemployed borrowers, anti-blight programs, short sales and transitional assistance, benefits for service members who are forced to sell their home at a loss as a result of a Permanent Change in Station order, and other programs. Because servicers will receive only partial credit for every dollar spent on some of the required activities, the settlement will provide direct benefits to borrowers in excess of $20 billion.”

    This post was very misleading and tries to imply that the State Governors are trying to swindle the settlement from borrowers when in reality this is not the case. In addition, I would have to agree that the original post was partisan in that it specifically mentioned the Governor of Wisconsin somehow took money from State Employees Benefits. That is not only partisan, but untrue. The Governor of Wisconsin eliminated “Collective Bargaining” for State Employees who should never have been allowed to have such a union to begin with as it takes money from the general population to pay unions and force all of us to pay higher taxes.

    “Even Franklin D. Roosevelt, the champion and godfather of 20th century unionism, famously observed that “[t]he process of collective bargaining, as usually understood, cannot be transplanted into the public service.”

  38. It is not a legitimate debt owed a legitimate creditor. There is no standing to settle or modify. Rich man or pauper – he does not owe a thief and if the debt has been paid in full (not free – it was paid) there is nothing owed.

  39. With origination and servicing fraud has anybody done this.

    http://www.freddiemac.com/singlefamily/preventfraud/

  40. @tolle – I know you love to point fingers at me, but read the post again. he doesn’t have to use the word “republican” when he instead uses the names Scott Walker, Jay Nixon, Rick Perry and Rick Scott. as for dictating what Neil does, I could care less. most days the site’s jumbled with enough misinformation that it really does nothing. but spinning wheels on political debate doesn’t really equate to giving advice does it?

    and c’mon – get your head out of your colonoscopy entrance. there are still completely valid foreclosures happening everyday because……..wait for it…..people are in default. my office is unusual but not alone in that the accounts we work are bank owned. no MERS, no securitization, the lender never sold the note and it’s all in house. easy and clear. no forged assignments, no LPS, no robosigning.

    and that’s the elephant in the corner on this site, isn’t it? most people (i know not all) are facing a sale date or a court date because they fell behind in payments. securitization, appriasal, or origination issues didn’t cause a payment default. if there’s not an ongoing ability to repay, all of this other stuff talked about on this site is really just academic. i can’t tell you how many cases I’ve been involved in where the litigation gets to a settlement stage and it turns out that it’s been nothing but a stall. even if we modified, lowered principal, etc, the people didn’t have the income to do it. it’s not their fault due to loss of job or illness, but the facts were the facts. for all of the assertions that “we’re not looking for a free house”, a lot of time time that’s exactly what people are looking for. when push comes to shove, the money’s not there, even if we cancel or undo the foreclosure. a few months later we’re all right back on the courthouse steps.

    tolle – I know you’ll enjoy ripping this comment up, but it’s my opinion backed up by actual experience.

  41. Collect the evaded back taxes and unjust enrichment from the fake (purposely fraudulent) securitization (not from investors – collect it from the crooks). Penalties and damages. Assess penalties and damages for fraudulent recording. Probably enough to balance the budget and pay for infrastructure and education and social services and more. Too big to fail are not too big to fail anymore. They have already failed. Everyone else is paying the price so that they can continue their sham. Who does that benefit anymore – even if it used to benefit a few who conveniently looked the other way.

  42. @Slayer,

    Get a hold of yourself. Hating is like drinking the poison and hoping the other guy will keel over.

    Not the smartest move, my friend. Try to keep perspective and humour about the whole thing. That’s the only way.

  43. Obama is no better than the rest of the handled/bought/bribed/threatened.Election?WHAT”election”??????
    Live Free or DIEBOLD?!!!

  44. This country is run,entirely,by psychopaths and it ain’t a FUCKING”republican” vs”democrat” crisis;nor”left wing vs.right wing” as they are BOTH attached to the same dirty Byrd/bird!!!!this Vulture’s name is Tom Tyranny and I’m not talkin’ turkey….there is waaaaaaaaay way way more to it than most will EVER have the stomach for.I still find myself unable to”process” the scope of it all.The very WORST are running the asylums.Tension is higher here now,”class warfare” is getting a good deal more attention,hearts are turning hard(er) still we”try” to extend human kindness to those even”worse” off…people are going UNDER and the sense of hopelessness,of powerlessness is escalating.These CRIMINALS make me wanna PUKE and I do apologize to all for my newly resurrected habit of FOUL!!!!!! language…the air gets blue often…me,I’m about to wear black for the Funeral of HumanKIND,may we R.I.P.???????

    Sic Semper Tyrannus? (sp)

    FIRST time in”my” life I’ve ever laid in a bed wishing to God that I’d just not have to continue…then I “try” to reflect on how many blessings I USED to”have”…well,still do,I am sure”compared to”….the EXPLOITED in”third world” countries and that always pissed me off anyhow,ONE Earth we ALL share it

    I now taste hatred on my tongue and please God that I don’t wanna die with
    how to love our murderous handlers?

    Constitutional restraints?HAH!!

    I GIVE UP!!!

    Course….that’s the desired outcome…resignation …defeat.

    NWODOR SUCKS!!!

  45. @Java,

    I was just thinking about that. By now, I believe we all pretty much know that nothing of substance will come out of this government until after November (and even then, I’m not really sure… Obama still appears way too conflicted to be effective)

    So, we all pretty much know that something is coming down the pipe, with or without our government. I think we all think: “Let’s take whatever bone they’re throwing at us right now. It’s going to help until the big clean up and, in the meantime, let’s make sure to educate everyone about why that big clean up is necessary, required, indispensable, etc.”

    Those kinds of actions only serve to identify where and by whom to start the big clean up… and to make sure we don’t forget anyone.

    So, Walker: check. Check. Check. He consistently meets and even exceeds expectations. Good little repub. boy. Hi mom must be soooo proud!

    Nixon: sold out? Did he sign the damn thing? Five days ago, he was the only one standing. When did that happen? Check. And check again, for being sneaky!

    Maine… well, didn’t Maine pull something a little while ago to take away voting rights from blacks (or women? Or black women? Or somebody, anyway…)? Check, check.

    Let’s keep scores for now.

  46. The great cover-up of the great fraud will continue as long as…?

  47. just one last chance to kick the can down the road….but they can not save themselves forever

  48. tnharry- there have always been vacant properties. But now all the vacant properties resultant drop in revenue to cities,towns etc. is due to fraudulent/criminal securitization fraud, origination fraud, insurance fraud, appraisal fraud, accounting fraud, SEC fraud, fraud against the GSEs. These are all felony charges, punishable by imprisonment, and now the US Govt. has borrowed/printed 27trillion dollars to cover the fraud, resulting in increased taxes for the rest of eternity, loss of status globally, and probably loss of reserve currency status in short order. I don’t like to hear discussion of any of the ‘housing crisis’, ‘foreclosure crisis’ , ‘recession’, or similar as if all this just happened by itself, or due to some distant unrelated causes.

  49. Come to realize…

    Anyone knows any Dem AG who’s done the same thing? I just want to make sure that they are all equally rotten to the core. Makes it easier to vote…

  50. Now, for the kicker:

    Milwaukee Mayor (sorry tnharry, some Dem guy) was welcoming Obama on the tarp yesterday, with little-f..cker-Walker. Walker handed out a T-shirt to Obama, saying “Obama No 1”. All very civil and nicey-nicey. No finger in Obama’s face, no yelling at him, none of that. A good republican little boy with manners.

    Later on, Dem guy told Obama about Walker confiscating 26 millions of the settlement money and…

    Are you all sitting down?

    Obama said: “Really? I don’t believe it! Are you absolutely sure? It wasn’t meant to fix state budgets.” Dem-mayor guy said he was going to F/U with Obama’s team but he didn’t sound really convinced something would be done to stop it.

    Ain’t that a great country?

  51. That should nullify the settlement for that state as far as I’m concerned. Could that be used as leverage in court cases?

  52. Not long term! Maybe instead of using homeowner’s money from the settlement, they could go after the banks that did not properly transfer and pay taxes on their “ill-gotten” gains and pay back the taxpayers, then give the settlement money to whom it belongs, US. We have already paid OUR taxes for municipal services, do we pay twice, with homes lost and sold to someone else for pennies on the dollar? And, when do they lower our taxes, based on current market values?

  53. @tnharry, where was the term “republican” used other than in your post?

    Who would be pompous enough to believe that they could dictate to a private website owner that they can’t be both model A and model B if they so choose?

    Your world is collapsing around you….you’d best come to terms with the occupation…when your masters leave you holding the false pleadings you’ll be begging forgiveness.

    It’s in your future, like it or not. Will you argue against your own eviction, or hire outside counsel?

  54. @chris – but using your own logic, wouldn’t this money replace money lost to local gov’t due to sagging home ownership? taxes, utilities, etc all take a hit when there are vacant properties

  55. Another point, this leads me to believe that is in PART, why judges will not listen. If their paychecks are being generated by the municipalities, there is the answer.

    We are back to money and self-interest!

  56. So, the theft continues at the local level now.

    Nice, we get accused of buying more than we can afford, you know the drill, but the government can spend more than they can afford and it’s okay, do I have this right?

    Do they not get this yet? Local taxes go into the general fund for education, police, fire stations, etc…the less housing and tax income generated, the less revenue you have for the local government. Does anyone in government think long-term? Geez!

  57. how can you continue to claim (just like the Occupiers) to be nonpartisan but only point blame at republicans? either this is a political site or a mortgagor help site, but it can’t and shouldn’t try to be both.

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