NO Reason to Modify: Banks Foreclosed to Collect 100 cents on the Dollar from the Government

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Editor’s Comment:

The math is simple which is why we are now offering as part of a forensic loan specific analysis, a HAMP analysis and proposal along with the worksheets that back it up. If they foreclose, then they get all the money due on the mortgage even if they would only get 30% of that (see previous article) in foreclosure. This is really simple folks. If you had two “buyers” who would you sell to — the one offering $300,000 or the one offering $100,000?

The servicers and master servicers have only one major incentive in play because our elected officials have let it stay in play — the paper representing mortgage bonds and loans which undoubtedly are riddled with misrepresentations and bad data, is worth 100% if the government gets it but only 30% if anyone else gets it. This is welfare for the largest banks that stole from the citizens and are being allowed to keep the money and gamble more with our future. This isn’t about deficits or budgets. This is about fraud and restitution.

The victims of fraud — all of them including financial institutions (if they are innocent, which is another story) should receive full restitution and if the net balance due on any one loan is proportionately reduced by receipts of payments from the servicer, the proceeds of insurance, credit default swaps and credit enhancements (and of course restructuring into even more exotic pools that are never reported, thus rendering even the “trust” to be non-existent), a fair deal can be reached because the principal will have been reduced.

Foreclosure Fraud 101 – How (not) to Fraudclose on a Default When There is No Default in Order to Steal $$$ from the Govt (FDIC)

By ZeroHedge.com

This little gem comes over from Mark Stopa…

Take a look at this Final Judgment, where a borrower prevailed over BB&T at trial. Yes, the bank was sleazier than the skuz on the bottom of my shoes, declaring this borrower in default when there was no default. But take a close look at WHY the bank did so. As the Final Judgment reflects, the bank was financially motivated to declare a default because it knew the government was going to pay the mortgage in the event of default.

As if that’s not disgusting enough, what makes it even worse was that BB&T did not even loan the money – a prior bank did. Yet as a result of a deal with the FDIC, BB&T was in the position of pocketing millions of dollars from our government merely by declaring this borrower in default. This should piss off everybody in America – a bank that didn’t loan money wrongly declares a default so it can collect millions from our government. Where is the outrage?

Don’t believe me? Don’t take my word for it – read the findings of Judge Levens in this Final Judgment.

From the judgment…

The evidence adduced at trial and considered by the court demonstrated that Plaintiff breached it duties of good faith and fair dealing in its contractual relationship with Defendants. The evidence also demonstrated that Plaintiff was motivated to behave in such as manner as a direct result of the PSA; that is, Plaintiff stood to profit by declaring a fraudulent default under the subject loan, collecting from the FDIC under the PSA for such default, and then enforcing the subject loan against Defendants, and retaining the property until such time as a real estate turnaround occurred in hopes to dispose of the property at the peak of the market. In fact, Mr. Bruni testified that Plaintiff may have already applied to the FDIC for a loss share payment on this loan. And Defendants’ expert, Jim Howard, explained that it was possible Plaintiff could have already applied for and received a payment from the FDIC on this loan, perhaps in an amount as high as $1,800,000.00. Notably, Plaintiff nowhere credited such potential payment from the FDIC against the amounts sought in the instant litigation; thereby giving the impression that Plaintiff might be “double dipping”, and possibly “triple dipping” if market conditions favorably change and the property likewise increases in value.

DISCUSSION

The evidence was clear that there was a long and unblemished record of good faith timely monthly payments by Defendants. The evidence is also clear that, both on legal and equitable grounds, a bona fide default never occurred, and the resulting loan acceleration and lawsuit were improvidently initiated by Plaintiff for purposes of trying to maximize collection simultaneously from the future sale of the property after favorable stabilization occurred. The evidence is clear that Plaintiff committed significant wrongdoing and breached the implied duty of good faith and fair dealing of a financial institution, such that the instant cause of action should be denied in its entirety.

Sounds like the plaintiff committed much more than “significant wrongdoing” but I guess when you’re the bank it isn’t a crime.

Now do you understand why there are so many “DEADBEATS” that do not pay their bills?


38 Responses

  1. This case is an example of what I just posted. The investor had at leasty 15 properties and was experienced with stealing houses for profit and just got caught and stopped by the homeowners and the U.S. Supreme Court judges. He had bidded on 45 properties. If you check the county records, most of the houses are unlawfully purchased as a credit bid for ten dollars or zero dollars with ten dollars claimed on the county records. When only the true lender can credit bid. A debt collector that never lent a dime by law can not credit bid. they are getting caught at this very crime. Not even doing public auctions but computer email auctions over the internet and own the property by credit bid ten minutes after the sale begins as they did on a friend of mine in Florida. Sale at auction starts at ten am and is sold over the email to the debt collector forecloser by ten after ten I beleive something rediculious like that. For zero dollars on a credit bid.

  2. You will find most of the buyers are the forecloser debt collectors or a friend in the investment business of stealing cheap houses. They bid and get the house on credit, no money at all, or in some cases like friends that make it a business to steal for cheap, and they are a part of the crime. They dont care how illegal it is, if they can make money, and they dont get caught.

  3. I have been noticing this more and more for a year now. Huge progress in the last six months. There are cases that dont make it ot the public also.

  4. Guys,

    Have you noticed that, lately, every other case is a home run? More and more homeowners get the money or the house and more and more judges appear to get it. Pretty soon, the word will come out and homeowners will start filing everywhere.

    Progress.

  5. This is the real war – Global Currency- Since the paper is no good they have to grab assets. Land and Resources.

    http://www.guardian.co.uk/business/2011/feb/10/imf-boss-calls-for-world-currency

  6. In this supreme court case the court ruled a sophisticated investor should have known trustee sale was invalid and gave the homeowner quiet title:

    http://dtc-systems.net/2012/05/washington-supreme-court-affirms-bonafide-purchaser-exists-failure-comply-statutory-requirements-non-judicial-foreclosure-sale/

    “Equity cannot support waiver given these procedural defects and the purchaser’s status as a sophisticated real estate investor or buyer who had constructive knowledge of the defects in the sale. We conclude the trustee sale was invalid. We affirm the Court of Appeals and remand to the trial court to enter an order declaring the sale invalid and quieting title in Tecca as against Dickinson.”

  7. enraged

    You are misunderstanding me as usual. Have a litte faith. There was a fraudulent conveyance that effects both the homeowner and the buyer. No reason the buyer can’t sue the trustee and the “lender” too. In their own interest they prove the case of the homeowner too.

    Those kinds of lawsuits may start up soon. Consider Bevilacqua – the supreme court judge said his recouse was against US Bank because they sold him nothing.

    They we have investors starting to say in no uncertain terms there was no m in the mbs.

    Next the title companies will enter the picture (as they already did back at the end of 2010 when the robo signing came to light and for awhile Old Republic wouln’t write policies for certain lenders for instance.

    Pretty soon from all sides – who owns the home and who owes who? It will get sorted out but it won’t be a pretender.

  8. @JoAnn,

    Two wrongs don’t make a right. That too would be fraud. And it would discredit every single homeowner with a legitimate title action. Haven’t we been blamed enough as it is? Don’t go there.

  9. @JoAnn,

    Most third-party buyers with cash are people like you and me (except not so broke), either trying to find a cheap house to live in or trying to flip houses as quickly as possible. They don’t give a hoot about title, previous owner, previous fraud or what not.

    They won’t shoot themselves in the foot. BUT if you know a few people with that kind of cash, by all means run your idea by them. You never know…! Right now, judges have a heck of a time understanding what is going on. Adding one more nebulous layer to this insanity ain’t gona restore sense into it.

  10. @enraged

    “Where are we going to find such crusaders, though?”

    Any thrid party buyer at auction past present and future could do it and there are plenty of them. They don’t have to be homeowner friendly to sue for fraud and damages in their own interest. Not hard to see the fraud in the stuff recorded if anyone bothers to look. The fraud transfers in the ADOT….he trust named and accessed on public website with all files available for all to see. Pretty much file the same claims as homeowners minus the predatory and modification issues.

  11. Unaware homeowners who did purchase mortgages that are clouded and wind up loosing them to the homeowner the house was stolen from will eventually start lawsuits for fraud and non disclosure of the clouded titles.

  12. Dee, you are absolutely correct. The government has the oath of office and fudiciary duty to protect its citizens. Our government betrayed us. Regulations were removed, that protected the majority of the citizens. Removing the very regulations and regulators, that protected us is telling. Our government officials prove to be protecting the very banks they are aware of and have documented proof are corrupt and have committed horrible unlawful crimes against the 99%. Yet make cases to forgive this outrageous atrocity with no restitution or help for the victimes. Then allow what little bread crumbs the AG laughinglyh sought for us to be spent on prisons and their own mis conducted budgets. Our officials are in breach of their oath of office and breach of their fudiciary duty to us.

  13. @JoAnn,

    “Maybe some people with cash should just do it for the heck of it.” I too think it would be a great idea. Where are we going to find such crusaders, though? Those who don’t have a pot left to piss in can’t (obviously) purchase anything and those who do are too afraid of losing it to risk it…

  14. Wiki how PNC bought nat city out

  15. Wools- amongst

  16. Etolle
    ” the people will end up fighting amounts themselves”
    I believe someone from Goldman said that.

  17. Joann
    Like your thinking

  18. @joann

    “Honestly cannot comprehend why there has not been a moratorium on these foreclosures in CA. And similar in other states.”

    Because they would have to admit that 7 Trillion in fake “mortgages” was total B.S.
    They have 2 choices: Admit or cover up. We know which one they are doing.

  19. Hypothetical question not related to anything in particular….

    Could someone who purchased a property at auction with good cash money…..”after the fact” discover fraudulent conveyance in the title and discover seller “bank” had nothing to sell and therefore make the point that the purchase is void and title is not clear and sue for fraud and damages? Maybe some people with cash should just do it for the heck of it. They are in a position to either get the house or get the damages. Or perhaps it is buyer beware (buyer needed the chain of title and chain of sale scrutiny just as much as the homeowner who may not have realized it – only it is buyer’s tough luck – or is he supposed to know better?).

    Thinking these issues are going to come up more and more. Remember BEVILACQUA. And we are still waiting on Eaton (“why it should not be retroactive”).

  20. From supreme court ruling in Albice v. Dickinson:

    http://dtc-systems.net/2012/05/washington-supreme-court-affirms-bonafide-purchaser-exists-failure-comply-statutory-requirements-non-judicial-foreclosure-sale/

    “The financial institution acting as the lender also appeared to be acting as the trustee under a different name;”

    WAMU/Chase/California Reconveyance Company anyone?

    Honestly cannot comprehend why there has not been a moratorium on these foreclosures in CA. And similar in other states.

    “acting” as the lender”…… “acting” as the trustee” Good for that supreme court – “acting” being the keyword.

  21. … “im not talking civil disobedience, im talking pressure officials to do their job…”

    What do any of you have against civil disobedience? It’s not only a right, it’s a moral duty. TPTB that are routinely abusing their (perceived) power need to be shown the error of their ways, through equal force if need be. MLK said:

    “We should never forget that everything Adolf Hitler did in Germany was “legal” and everything the Hungarian freedom fighters did in Hungary was “illegal.”

    So, what’s to be gained by talk, when we know they own the stage, the mic, the podium, and the press? The following is going on in Minneapolis at this very moment, and it sounds all too much like the Hungary of old referenced above:

    Platoons of sheriffs descended on the Cruz family home in a 4 am raid today, arresting five nonviolent supporters in the second failed eviction attempt in 48 hours. Fifty protesters mobilized to defend the home and outflanked the sheriffs by marching through the alley into backyard, causing the sheriffs to retreat without fully securing the home. Members of Occupy Homes MN remain inside the home as of 7 am this morning.

    “An army of sheriffs marched in military-style and busted down the door in the dead of night,” said Ben Egerman, an organizer with Occupy Homes MN. “It’s unconscionable that Sheriff Stanek ordered the violent eviction of this home a second time, especially when he is fully aware of active negotiations between the family and the bank to resolve the situation peacefully.”

    Several protesters, who had locked themselves to structures in and around the home, sustained minor injuries as sheriffs forcibly removed them from the balcony and roof with jackhammers and electric saws. The condition of arrested persons remains unknown.

    Occupy Homes MN has been defending the home in a round-the-clock eviction blockade since April 30 to demand PNC Bank negotiate with the Cruz family, who fell into foreclosure when the bank failed to withdraw their online payment.

    The second eviction attempt came hours after Occupy Pittsburgh delivered a giant letter to PNC Bank Executive Vice President Dan Taylor, who committed to working with the family to modify their loan.
    “It’s clear that Sheriff Stanek would rather kick families out of their homes than work with our communities,” said Martha Ockenfels-Martinez of Occupy Homes. “We’re still here and we will not be moved from this home until we see a good faith negotiation.”

    There are way too many references that could be made to pre-war Germany, North Korea, banana republics etc….I won’t bother with the obvious. But keep in mind that freedoms lost are exceedingly hard to regain…..and if it can happen to your neighbor, it can happen to you.

  22. By the time it is signed and attorneys have taken their (lion’s) share, the poor schlemiels will receive a check for $11.53 (give or take a few cents…) Added to their whooping $1,800 for wongful foreclosure, they should feel whole and ready to take on the world!!!

    Judge OKs JPMorgan overdraft fee settlement
    5/25/2012 COMMENTS (0)

    May 25 (Reuters) – JPMorgan Chase & Co won preliminary court approval of its agreement to pay $110 million to settle nationwide litigation accusing it of charging excessive overdraft fees.

    The settlement would resolve lawsuits brought on behalf of more than 1 million people over the fees, which are assessed when customers overdraw their checking accounts by using their debit cards.

    Consumers accused more than 30 lenders of trying to boost overdraft fees, which are typically $25 to $35, by reordering transactions from largest to smallest rather than processing them in chronological order.

  23. Pisses me off. I really, really hope this is the true beginning of the end. Because so far, we’ve seen all kinds of beginning but still no end in sight…

    http://www.advfn.com/news_J-P-Morgan-Had-101-3-Billion-One-Sided-Exposure-Fed-Data-Show_52559657.html

    UPDATE: J.P. Morgan Had $101.3 Billion One-Sided Exposure, Fed Data Show
    Share this article Print
    JP Morgan Chase (NYSE:JPM)
    Intraday Stock Chart
    Today : Friday 25 May 2012

    J.P. Morgan Chase & Co. (JPM) sold $101.3 billion more long-dated derivatives insuring against defaults by investment-grade companies as of March 31 than it had bought back, according to quarterly data from the Federal Reserve.

    The amount of insurance-like credit-default swaps the bank sold was double its $50.2 billion net position at the end of December and more than four times its $23.6 billion net position as of Sept. 30, 2011.
    The Federal Reserve data, first reported Wednesday by Reuters, validate earlier reports by The Wall Street Journal that positions by traders at the bank, including one dubbed “the London whale,” had reached a face value of $100 billion or more.

    Those trades were part of a complicated three-step strategy, previously reported by Dow Jones Newswires and The Wall Street Journal, that have raised questions about whether the bank was hedging its risks or making big bets on the direction of CDS prices.

    The bank is a member of a CDS clearinghouse run by IntercontinentalExchange Inc. (ICE), which it pays to guarantee such trades. That offers some hope the risks of the bank’s losses to broader markets will be contained. While it couldn’t be determined how many CDS trades J.P. Morgan had cleared, ICE had $914 billion of open CDS in its U.S. clearinghouse as of May 18.

  24. @Carie,

    It’s a labor of love. Can’t be done with one sentence. They didn’t commit those atrocities with just one stroke of the pen. Took millions of them, from millionds of diffrerent people. Took a concerted effort to get where we are. it will take a concerted effort to get out of it.

  25. I think it’s very comforting when public figures who previously defended the banks no longer do… It’s even more comforting when they go as far as describe them for the blood-suckers they really are. Took a wahile but it keeps hope alive.

    http://finance.fortune.cnn.com/2012/05/25/jp-morgan-chase-breakup/

    Breaking up Chase: Good for shareholders and taxpayers
    May 25, 2012: 5:00 AM ET

    Jamie Dimon needs to take a cue from J.P. Morgan’s trading debacle and divide the banking giant into manageable pieces.
    By Sheila Bair, contributor

    FORTUNE – When I was a child, my sister and I loved watching the goings-on at a chicken farm near my grandmother’s house in rural Kansas. Chickens are interesting social animals, resembling, somewhat, the way we in Washington interact with one another. They were always on the lookout for one vulnerable bird that they would corner in the coop and then peck relentlessly on its head.

  26. @Deborah

    “…a young police officer was in fact clued in but what I got was a sense of powerlessness and defeat because most of these professionals can’t quite grasp it…”

    You reminded me of the conversation I had with a detective from the “Real Estate Fraud Task Force”…he knew what was going on—and also felt powerless…and he was basically just shaking his head with no answers. You’re right—we need a SIMPLE explanation of the blatant fraud that can be grasped quickly by the average layman…like—as simple as what would you write on a protest sign? It has to be that simple…You can’t just say ‘Banks are criminals!’ or something vague like that…how do we explain the fraud in one sentence—I think that’s what we need to do…not easy.

  27. @Dee
    the united states government foreclosed a long time ago
    its up to the people to figure out where our power lies
    im not talking civil disobedience, im talking pressure officials to do their job, the judiciary and our atty g,s
    as i journey along this rocky road and being in my particular profession particular groups of working class were targetted, groups that are the backbone of the economy as far as taxes go. have job , can pay, good morality with high credit score= jack up the appraisaI- fudge a bit = loan to value “LOOKS GOOD”= underwritten. i know i over simplify but i have to do this for my patients, – thats how they understand and make good choices- so how can we simplify this great crime against humanity so the people get it, in time – its an election year.
    tried to file a police report last night- a young police officer was in fact clued in but what i got was a sense of powerlessness and defeat because most of these professionals cant quiet grasp it, the ignorance is what makes us impotant, getting the word out is the problem here with the media controlled gotta think of something else. im doing my bit here but cant get an attorney and AZ court just keeps kicking me to the curb. just blew up my docket though with case law.

  28. @ enraged

    “enraged, on May 23, 2012 at 8:01 pm said:
    @Nabdulla,….Makes sense?”

    Got it. Thanks Lady. 🙂

  29. LEGAL FICTION with which courts & gov. & banks have been stealing from 99%, as defined by lawyers: http://www.youtube.com/watch?v=kEueO7STGPc

  30. Awesome Neil! What inning are we in now? Is this our turn at bat?

  31. How do you steal money from someone who does not have any ?

    Just give it to them !

  32. Link works for me ,, goes to a 5 page .pdf ,,, Still having fallout from Colonial Bank fraud…

    http://pubrec3.hillsclerk.com/oncore/showdetails.aspx?id=16972127&rn=1&pi=0&ref=search

    Document Type: (JUD) JUDGMENT
    Modified Date:
    Date : 5/22/2012 9:44:07 AM
    Event Date : Not Available
    Grantor: BRANCH BANKING & TRUST CO (5/24/2012 9:51:49 AM)
    FDIC REC (5/24/2012 9:51:49 AM)
    COLONIAL BANK ()

    Grantee: KRAZ LLC (5/24/2012 9:51:49 AM)
    KEARNEY BING CHARLES JR (5/24/2012 9:51:49 AM)
    HARRIS TRACY J JR (5/24/2012 9:51:49 AM)

    Book Type: O
    Book / Page: 21136 / 381
    # of Pages: 5
    Consideration: 0.00
    Legal Description
    Legal:
    Address:
    Case Number: 10-CA-000304

  33. could someone post the actual judgment, cannot open it.

  34. LOL I could not help myself, I almost died with laughter OMG, did this surprise anyone? we been saying this for the past five years, almost every day.

  35. http://pubrec3.hillsclerk.com/oncore /showdetails.aspx?id=16972127&rn=1&pi=0&ref=search

    try this link….

    Does anyone know if this similar to the deal when Indymac was taken over by FDIC then to Onewest?

  36. Blame the Banks? Or the Government? Or Both?

    Posted on May 22nd, 2012 by Mark Stopa

    It is thoroughly appalling to me how nobody – and I mean NOBODY – has blamed the U.S. government for the housing crisis, if not the entire Great Recession. Sure, the banks are dirtbags, but we all know that. Why is nobody placing appropriate blame on our government?

    If you don’t know what I mean, take a look at this Final Judgment, where a homeowner prevailed over BB&T at trial. Yes, the bank was sleazier than the skuz on the bottom of my shoes, declaring this homeowner in default when there was no default. But take a close look at WHY the bank did so. As the Final Judgment reflects, the bank was financially motivated to declare a default because it knew the government was going to pay the mortgage in the event of default.

    As if that’s not disgusting enough, what makes it even worse was that BB&T did not even loan the money – a prior bank did. Yet as a result of a deal with the FDIC, BB&T was in the position of pocketing millions of dollars from our government merely by declaring this homeowner in default. This should piss off everybody in America – a bank that didn’t loan money wrongly declares a default so it can collect millions from our government. Where is the outrage?

    These perverse financial incentives permeate foreclosure-world to a degree that is impossible for the typical person to fathom. Personally, I’m convinced the government’s involvement (coupled, of course, with the lack of ethics on Wall Street) is the reason for the housing crisis.

    If that doesn’t make sense, think about it like this. Suppose you were a bank. Suppose you could make a loan and either get paid monthly, with interest (if the homeowner paid) or get the entire mortgage paid in full by the government (if the homeowner stopped paying). What would you do? You’d loan as much money as possible, right? You’d loan to every Tom, Dick, and Harry, regardless of his/her creditworthiness. You’d loan more and more money on each loan because there’d be no downside – either the homeowner paid according to the terms of the loan, with interest, or, if the homeowner didn’t pay, the government would pay in full.

    This is the dynamic that has existed over the past several years throughout our country. Many, many mortgages are fully guaranteed by the U.S. government. This is why home prices were inflated during the boom. Banks jacked up appraised values because there was no downside – they wanted to loan more, knowing the loans were guaranteed by the U.S. government. And this is why banks won’t settle cases now – why settle with homeowners when they can get a judgment and get paid in full by the government?

    Don’t believe me? Don’t take my word for it – read the findings of Judge Levens in this Final Judgment.

  37. I can’t read the entire judgment using the link. Is it just me?

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