Realtors Complaining About Lack of Financing on REO Resales

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Truth triumphs in the Marketplace:                                         Buyers and bankers have no confidence that prices are not going lower, and Title Corruption Taints the Deals

Editor’s Comment:

Realtors are on the wrong side of this issue. THEY should have led the way to correcting the problems and defects in the foundation of the housing market — pricing and title. Instead they put blinders on and pushed through whatever sales they could — REO sales, short sales, anything to make a buck. Now it is coming back and hitting them on the back of the head.

Sales are slowing because financing is getting harder and the message is out. The values of the homes are lower than the prices and the title chain is often corrupted leaving a prospective buyer or lender in a position of accepting a risk that didn’t exist before securitization. This isn’t the fault of realtors so don’t go blaming them for creating the securitization PONZI scheme. But they are at fault for not looking for a way to fix it. After all, it is THEIR industry.

Financing Needed to Boost REO Sales

by Carla Hill

Buyer, sellers, and real estate professionals alike are finding that today’s market is still experiencing a glut of distressed properties.

These properties hit the market each day in the form of REOs. This steady influx of properties is in addtion to the high number of short sales seen across the nation.

According to the National Association of Realtors (NAR) there are certain steps that lenders and the government need to take in order for this oversupply to reduce and for the market to return to a more normal balance.

The current market sees around one third of all sales coming from distressed properties. These housing units carry a smaller price tag than the competition, but a steeper price in terms of the value of the overall market. Distressed properties sell at steep discounts, sometimes at almost half of what a non-distressed property is listed. This causes the overall market value of a neighborhood or community to drop, ending up with more and more sellers finding themselves upside down in their loans.

NAR President Ron Phipps has said that a lack of mortgage financing is hurting REO sales and the entire housing market. They report that “the lack of private capital in the mortgage market, unduly tight underwriting standards, and increasing fees have discouraged many potential home buyers from applying for mortgages. NAR believes ensuring mortgage availability for qualified home buyers and investors will help absorb the excess REO inventory.”

“We believe the government has an opportunity to minimize the impact of distressed properties on local markets by expanding financing opportunities, bolstering loan modifications and short sales efforts, and enhancing the efficient disposition of REO properties. This will help stabilize home prices and neighborhoods and help support the broader economic recovery.”

NAR has also said in a letter to the U.S. Department of Housing and Urban Development, the Federal Housing Finance Agency, and the U.S. Department of the Treasury that steps must be taken in order to stop the steady stream of new REO properties that is currently hitting the market. Homeowners need help to either stay in their homes or to make short sales before their home is put into foreclosure, something that helps their credit scores and the market.

“Loan modifications keep families in their home and reduce defaults, while short sales keep homes occupied, helping stabilize neighborhoods and home values,” Phipps said. “Expanding resources and ensuring the use of already allocated funds for pre-foreclosure efforts is the best opportunity to reduce taxpayer costs and creates more positive outcomes for homeowners and their communities.”

As the election year heats up we expect to hear more about what candidates propose to do about the continued struggle the housing market faces as well as how to keep American homeowners in their homes





62 Responses

  1. […] Read more… Posted in Banks, MERS, News Around The Country, States « FHA Loan Sales Good News and Bad News Through a Glass Darkly – The State Bar’s Lack of Transparency On Loan Mod Lawyers » You can leave a response, or trackback from your own site. […]

  2. Ok Im working on those boring discovery items again this AM, video deposition in a can to preserve testimony; you do this by taking a video affidavit –then giving it to opposition with notice of deposition to give them their shot–or let em waive cross but as I search for new cases and govt action i find your comment interesting

    —If one reviews circumstances in the 1920’s they parallel US_Europe–particularly UK—-that existed up to 2007—drunken speculation. As a result banks failed—govts tried to pay debts and preserve domestic tranquility with printed money. Aggravated by German remunerations of war debt—so Germany was in shoes of Greece today. Along with the Southern Euro countries. Ok?

    So unemployment goes up –costs rise, currencies devalue—-another way to look at it is the macro-temporal view—-this has happened repeatedly in Europe over centuries. Over the long haul the Europeans–especially English viewed these problems as driven by overpopulation. Thus they removed large populations of 1st Welsh and Scots–then Irish. Move em or kill em–same result from Brit perspective. Populations that dont fit the new order Out of the way.

    In the 1930s the same thought processes took over on the continent.
    1st Spain–unemployment –too much demand too much population= civil war. Pilot project for rest of europe to see how the rewsource vs population issue would play out under the right circumstances–ie 4 horsemen—

    So there followed in quick succession Italy and then the German-speaking peoples agitated for consolidation of fiscal and political policy–is for themselves, ie Austria, sudenland east prussia—then to include Netherlands, Finland, and france. Now lay the ruler beside them today. Marie La Penn pulled close to 50% of the vote in her province—-germans are talking about consolidation again–only this time it appears the dutch and fins are more like austria 1937–welcoming—-french??????

    Italy spain and greece just want handouts without payback–albeit they were cheated by the london and NYC investment bankers and overborrowed —greased by bribes etc—-but the germanics as in 1550 will be destabilized if taxes are levied to support the souther half of the continent

    I wonder when germany and austria will start talking about Italy handing back the Piedmont—–eastern europeans handing back Sudetenland and East prussia—-maybe take the greek islands—-is there anything that could be annexed in spain–the old fashioned way–territories in exchange for money

  3. @DCB,

    “Moody’s said it recognised, “the clear intent of governments around the world to reduce support for creditors”, but added that they had not yet put the frameworks in place that would allow them to let banks fail. BBC.”

    That’s what I liked in that article. The ideas of letting bank collapse is music to my ear. And the implication of a worldwide investigation into fraud and corruption. That confirms me into my own beliefs… I migtht be delusional but I like the idea of justice. Keeps me going.

    I really believe that we are getting to a clean-up stage. A new monetary system, probably global (although not right away), the basis of which won’t be gold but something else. Maybe water…? Something real, that people need to survive. And rather than accaparate all of it (which is impossible), we’ll see coastal countries working toward creating water treatment plants and installing large mains worldwide to redirect it inland to places like Mali and Burkina Fasso. A cooperative effort to grow trees everywhere we decimated them. Something like that will give work to everyone. Especially people willing to expatriate themselves.

  4. NAR is just a nationally organized crime, a MAFIA, nothing more…

  5. @ ENRAGED can we get chinese insurance of those deposits to cover the deposits if FDIC doesnt provide liquidity? Im wondering what portion of that $600 trillion in derivative investment “exposure” gets triggered if greece spain etc go into receivorship—–probably no payout unless 2 of three go bad —with 10 times odds if its a trifecta

  6. re 25 pages tied to note–of course the mortgage also contained a select portion of the note and the note incorporated the loan application prepared by the broker over the phone with its twists and turns —about 6 other waivers and consents——-so maybe ENRAGED is correct –the note per se might only be 16-18 pages. But of course–id never seen a consumer note that was 16 pages–much less the rest. Ill tell you this —I would never consider closing on documents without a week examination again. And Im afraid to engage in any transaction with a mortgage lender–it appears to be issuing a license for a servicer to engage in a process which in his view is intended to result in default–so you are engaging in a transaction with somebody intent on bad faith dealing from the 1st instant.

    I dont suppose any potential borrowers out there might have noticed what happened to so many people they know. Anybody who ever had a credit card longer than 12 months in the last three years knows what banks’ ugly side is. No wonder Cit is bottom —-citi-India collection.

  7. Coming soon in a theater near you: “How to open a bank account in your newly open, local Chinese bank.” 🙂

    Moody’s downgrades 15 major banks
    by cmaukonen 6/21/2012 – 8:21 pm Well we can’t say anyone didn’t see this coming. But I still find it interesting, especially the timing.

    Right on the heels of a fairly large corruption case that could…I repeat could, blow the lid off a lot of other fraudulent practices. And the Euro Zone on a ledge.

    In the US, Bank of America, Citigroup, Goldman Sachs and JP Morgan are among those marked down.

    BBC business editor Robert Peston reported on Tuesday that the downgrades were coming and said that banks were concerned as it may make it harder for them to borrow money commercially.

    “All of the banks affected by today’s actions have significant exposure to the volatility and risk of outsized losses inherent to capital markets activities,” Moody’s global banking managing director Greg Bauer said in the agency’s statement.

    The other institutions that have been downgraded are Credit Suisse, UBS, BNP Paribas, Credit Agricole, Societe Generale, Deutsche Bank, Royal Bank of Canada and Morgan Stanley.

    Moody’s said it recognised, “the clear intent of governments around the world to reduce support for creditors”, but added that they had not yet put the frameworks in place that would allow them to let banks fail. BBC

    The last sentence is key to me. Do they mean to imply that these banks could and in fact should be allowed to fail ?

    We know they are up to their eyeballs in derivative exposure. To the tune of billions of dollars or more.

    Interesting comment from a ratings agency.

  8. @carie; One important factor that iv not noticed mentioned is that as a plaintiff under tort there is often a short statute of limitations–like a year absent fraud—fraud means particularity ——and you bear the burden of proof heavily. I am not familiar with this california thing about being a plaintiff in stopping your sale—who bears the burden there? of lack of note etc? this is probably where the wheel falls off–in the end its this view that a copy of a note is pretty much adequate to prove ownership

  9. At this point I don’t give a damn that I’m not in the house—it was a mess anyway—I do give a damn that criminals stole the house…theft by deception—or whatever it is termed…and if I have information to that effect—then why not sue? I have nothing to lose at this point—and it will make me feel better that I at least tried…I mean, if somebody learned about all this AFTER their house was foreclosed—there should be some action they can take—win or lose—most likely lose, but we are in unprecedented times, so let’s give them hell wherever and however we can!!

  10. @ TH—-this is common enough when observing a criminal conspiracy over several years—–it shouldnt be but you have to plead your facts and relief—try restitutionary disgorgement too

  11. @DCB,

    Carie is in CA. No attorney there would take her case on a contingency basis. And she would still have to decide what value she gives her damages either way.

    I think it would have made a lot more sense to get her case before a judge before being thrown out. Tn and many others advised it because, at least, she would have had possession. We even told her to do anything, anything at all that would get her before a judge, including file for BK. After the fact is always much, much more difficult, especially given the fact that judges rely on the AG’s settlement to right all the wrongs.

  12. The federal reserve december report said that private enforcement was all that was available but for the OCC reviews—no govt enforcement–thus caries attitude is all that deters continuing patterns of abuse–sad but true—–hardly a workable thing carrie vs goliath bank—but that is the way the law is set up tday

  13. “before I settle my own case ”

    they do not settle, they do not negotiate, you either sign a dil on their terms or you continue on as a profit center—if they settle the fees shut off–so they want the fights to continue –if possible they wll breach the settlement agreement to keep the action going–best of all worlds –them in possession-mayb sale and you still generating fees for them–thats the difference between carie and you–you havent given them possession yet—but the lawyers could care less who is in possession as long as they get paid–now itappears that they must accrue fees until the house is seized in some instances at least–because they will go to great lengths to get possession—-but on caries side they are in no hurry if you are the plaintiff and out of the house–keep it going until hell freezes over–fess continue to get paid monthly it appears–no waiting for payment

  14. @Carie,

    I didn’t say anywhere that you want the house back. i asked you what value you would base your damages on.

    Treble WHAT damages? Based on what? Based on what value? The house you lost? If yes, the house had one value before bubble, when you purchased it. It had another value when you lost it and it will have a different one when you settle (if you do sue).

    And what i asked is: who would be paying if everyone does sue? Because the way i see it, banks are going down. Once it happens (and I pray that it doesn’t happen before I settle my own case but, at least, I’m in the house. The banks go down: I am not going anywhere and i can quiet title).

    Carie, I’m not trying to give you a hard time but you need to be clear in your own mind. because with the uncertainty, now would be the time to sue. And yet, judges may not want to listen to your arguments. If you wait, judges might be more inclined to hear you but… where will the money come from? that’s why Marcy Kaptur harangued people to “stay in your home”. At least, you had something to leverage with.

  15. @all a judgment rendered on a fraudulent basis is void ab initio—-the bona fide purchaser of a property may set up that defense–for value etc—but if it was bought at a price which suggested below market–then the pesumtion of bona fide for value without notice of bad stuff is shot—buyers of discount housing beware——as far back as the chain was affected by fraud

  16. @carie—-if they seized your home using deception then you can unravel the judgment or seek damages–trick there is what are your damages? if you are not in fact discharged from the debt–then the value of the note —or extraordinary emotional distresss —-are you off the note for sure?

    Tenna Harry is right re the note being owed to somebody–but if somebody bambozzled you into abandoning your house—then you still might owe the actual note holder—who knows what will turn up after election from those warehouses–ten harry is only correct to the extent you are actually discharged–or else your house was stolen and you still owe the debt–the banks would like to perpetuate the myth that if you pay one of these claimants that all claims are satified –but just ask one to provide an iron clad surety and you will see they will not

  17. and, enraged—you missed where I said I don’t necessarily want the house back—I just want them to pay for their crimes perpetrated against me…

  18. Oh come on—you can’t say too bad so sad for every single person illegally kicked out of their home…I think everyone should start suing the servicers for treble damages based on the value of the stolen property (the value they put on it at the time of foreclosure)…why not?

  19. @Carie,

    I’m afraid Tn is right. Once you’ve left the house and it was sold (whatever the order), I really don’t believe you will be able to do much. Just looking at it from a common sense standpoint, imagine if everyone was to attack after the fact. We are 6 or 7 years into the foreclosures. How far do you go back? What about the houses that have been sold and moved in? Do you throw out the new owners just to accommodate the previous ones?

    Also if the banks collapse, go bankrupt or get bought out, who then would compensate you? Taxpayers?

    Lastly, what value do you give to your damages? The value of the house before collapse, before foreclosure or before bubble? How do you calculate it?

  20. The ship for suing the servicer has NOT sailed…

  21. I mean as far as a lawsuit aimed at the servicers…proving that they had no right to sell my property…I don’t necessarily want the house back, but I do want to sue them for illegal foreclosure and theft, etc.

  22. @carie – “what recourse would I have at this point?” you need a wayback machine, not answers from me at this point. that ship has sailed.

    if it didn’t get transferred to the trust, then the original Lender should still have the power to enforce. having not seen your documents, I don’t know what they look like or say. the loan not making it into the trust isn’t your fight. the security investors were screwed by that move, not you.

    you might have been able to fight the foreclosure before it happened based on the standing/right to enforce issues, but you chose not to, and that might very well result in you not being able to assert those claims after the fact. try it though. i though you had said you were done fighting and had found a better house close to the beach.

    i’m sorry, I don’t remember a question about Lan Pham.


    “While we are confident that even more contract laws will be terminally bent and broken simply to avoid some more balance sheet impairments for America’s already insolvent financial system, the message here is clear: the CBO, and arguably other “impartial” policy advisors, will only focus on the established institutional opinion, preferably that set by Wall Street itself, and retaliate (in some cases with physical force) over anyone who provides a dissenting opinion.

    Such as Ms. Pham.”

  24. Also, tnharry—I told you I have a signed document from the servicer saying that my loan was “securitized” and that they were foreclosing “on behalf of the securitization”…
    If I have proof that it (the “alleged” loan) was NOT “securitized”—what recourse would I have at this point?

  25. hey tn—how come you never answered my question about Dr. Lan Pham?

  26. correct enraged. and your check for $14 is in the mail for misdeeds, both past and future. enjoy your movie and popcorn. at that price, you’ll have to go to a matinee and sneak in a coke.

  27. @Tnharry,

    Sure took you a while to fess up! God will rewrad you for your honesty. 🙂

  28. @tnharry,

    Wait a minute… That AGs’ complaint was covering a lot of that ground, wasn’t it?

  29. you’re exactly right tolle – i’ve fallen way behind my colleagues today in photoshopping signatures onto faked endorsements and assignments. and my LPS inbox is overflowing. it’ll be quitting time soon, so i guess I’ll just throw all those HAMP applications in the trash and tell the borrowers we never got them so I’m not late for my afternoon golf game with the judge where i pay him off for ruling my way.

  30. i can’t wait to read the complaint that pleads comparative negligence, intentional torts, breach of fiduciary duty, quiet title and breach of contract all at once. throw in some constitutional law and maritime/admiralty discussion and you’d have every law school class included in one pleading.

  31. @Tnharry,

    OK. Then it goes toward comparative negligence and assumption of risk. Whatever way i look at it, homwoner’s negligence can not exceed 25%. Which means that homeoner is owed money regardless of the state he lives in (you know… pure comparative, modified, etc…) because homeowner/taxpayer has already paid hand over fist. Hey, I’ll take it, even if they deduct 25% for my own negligence. Because that’s still a hell of a lot more than what I’m getting right now!

  32. @ Enraged, “My feeling is that you are just trying to rile up people”.

    Yeah, I have visions of tnharry in a cubicle in Nashville giggling, saying to his fellow banker minions, “I just told them it was all their fault!” And the whole room breaks out into laughter.

    I mean, it has to be something like that, as nothing he says makes any sense otherwise.

  33. wow – so all common sense is out the window. if I clear $2000/month and someone offers me a loan with payments of $1700/mo, I’m free to take that loan with no personal responsibility for my own actions? oh please. i’m at least saying that homeowners are only partially to blame, while you’re all throwing the FULL blame on the banks. the gov’t was somewhere in the mix too though wasn’t it?

  34. @tnharry,

    “i’ve never seen a 25 page note for a consumer transaction and i’d be very interested in seeing one.” Would 16 pages be more palatable to you? that’s the length of mine…

    My feeling is that you are just trying to rile up people. A tad immature, aren’t we?

  35. @DCB,

    Thank you. Let him have it!!!

  36. @tnharry,

    With all due respect, the expert financers are the banks. Not the borrower, not government but… the lenders, the banks, those who handle money every single day. Those Jamie Dimon who take risks in order to cash at any cost to anyone else.

    I am really irritated when everyone and anyone attempts to shift the blame on homeowners for having “bought more house than they could afford”. They bought those houses ONLY because someone with an agenda assured them they could. NO is a FULL SENTENCE. Not only did lenders refuse to use that word but they pushed and pushed and pushed people whose area of expertise is something completely different to buy those house and to contract those loans, knowing that those poor peons (who might be very qualified in something else, mind you) had absolutely no clue what was sold to them and, worse yet, knowing that they were being set up to fail!!!

    Homeowners did NOT cause the economic scandal of the century. Banks and lawyers did.

    Holding them after the fact to a level of expertise they never had, never pretended to have and were willing to pay someone for (and did, by the way: all those fees on closing were to pay for that damn “expertise”!), be it in finance, law, or whatever else is simply blatant bad faith. Then again, you are an attorney, right? Bad faith tends to come with the territory…

  37. @carie – what part of “show me a case” are you not understanding?

  38. @carie – i guess i missed that case cite you posted. Weidner has a lot of stuff to say, much of it great, but he’s just one guy with a briefcase and a blog.

    @dbc – i don’t recall saying any homeowner was guilty of anything, just that some bit off more than they could chew. i’ve never seen a 25 page note for a consumer transaction and i’d be very interested in seeing one. my point was merely that realtors complaining about stricter underwriting guidelines isn’t helping anything and that relaxing lending standards had some contribution in how we got to where we are. mind you, not the sole contributing factor, but a factor nonetheless.

  39. They were “predatory NON-loans”…non funding with only assignment of collection rights to debt that was already put into false default and only receivables securitized….not “loans” securitized…junk debt buyers stealing homes from unwitting families…after they create fraudulent fabricated LYING documents…

    What part of that is legal, tnharry?

  40. Tnharry, maybe you should take a break from filling in LPS docs and take some time to read something scholarly on the true causes of the housing collapse, you know, something outside of your usual read; American Banker.

    There was, contrary to your belief, one single cause of the collapse: Financial Institutions. Oh, and followed up close behind by the grafted congress who sets FI’s table and pours their Champagne.

    It’s indisputable that the financial crisis and the resulting housing collapse were both due to unbridled greed on the part of Wall Street, but as it relates to this conversation, to a complete lack of underwriting and the issuance of unsustainable mortgages for one reason and one reason only; to skim as much loot off of each and every transaction as was inhumanely possible.

    The most amazing thing to me is that you’re not ashamed of what you do.

  41. tn, you know I’m talking about the subprime.


    Because…? Uh huh.

  42. @TNHARRY

    Lets assume that the homeowner was induced into entering into a predatory loan for 50% more than the pre-pumped house value. I assume you will also agree that the complexty of the loan documentation suggests an attorney’s attention in the face of a 25 page note. Yes

    so what are these homeowners guilty of? Not getting a wall street atty to review the predatory loan that itself was feeding the frenzy?

    Where is the concept of good faith dealing and an equally useful contract—why should a homeowner be caught off guard and blamed because some investment bankers dreamed up a clever scheme to impose economic pealties on everybody that touched the transaction except the core perps?

    There is no doubt there was a scheme then. But those investment bankers had spreadsheets that projected the whole life of pool and associated liquidations. how can the front end be conceived and carried out in a fraudulent manner—but not the backend? Most attorneys that I have come into contact with that service this industry should at minimum be sanctioned for repeated misreprentayions to the court. many deserve to be booted from the now sullied bar. Making your own docs–come on–there is a limit to client service. beyond that limit its criminal conspiracy–just like the new york mafia lawyers

  43. i don’t know that all the contracts were fraudulent carie. is that your new motto instead of “there were no loans”? show me a few cases that agree with that statement.

    i never said that it was the cause of the problem. in fact, i don’t think there was one single cause. but it was certainly a contributing factor. or do you dispute that there were in fact defaults? plenty of people default every day, and not all of them are victims of the vast Dimon-Mozilo conspiracy

  44. Continuing the diatribe about “homeowners buying too much house” is so yesterday, tnharry. The original contracts were fraudulent, and you know it. Just because we were all “marks” who fell for the grift doesn’t make us guilty.

  45. I get that we’re on opposite side on most debates on this site. But do you really believe that people buying houses they couldn’t afford DIDN’T contribute to the current situation. I’m not saying it’s the only cause, but you really can’t deny that it was a factor.

    It’s well documented history that Fannie and Freddie made adjustments saying that they wouldn’t buy loans unless a certain percentage of them were to people at and below median income levels. government was promoting diversity in home ownership over realistic lending requirements.

    And a link to an actual newspaper rather than a liberal website :

  46. “A Republic is representative government ruled by law.”

    Bwahaha Bwahahahah Bwahahahahahaha

    Sorry tnharry, I couldn’t help myself. Of course you’re right. Your banks are represented by our government and we are ruled by their laws.

    Got it.

  47. @e tolle – so looser lending standards are the solution? that just doesn’t make sense either.

    i started to read the link you posted, but decided not to bother when there were two blatant errors in the first sentence of the first paragraph : “How, in a democracy supposedly based on one person one vote, could the 1 percent could have been so victorious in shaping policies in its interests?”. we live in a Republic, not a democracy. and the electoral college, for better or worse, rather undermines the one person per vote issue.

  48. @ tnharry wrote, “unduly tight underwriting standards” or just proper, non-forced by Schumer/Frank underwriting standards?

    Pass the meme tnharry, and don’t bother with the facts. You’ve heard of facts, those little things that tend to shoot down every banker-backing statement you come up with. Your ceaseless rationalization as to why all of this has happened, and how borrowers should simply educate themselves on rules of procedure and sue the trillion dollar taxpayer funded white shoe law firms behind the scenes to save their homes is ludicrous. I call bullshit.

    “Members of the Right tried to blame the seeming market failures on government; in their mind the government effort to push people with low incomes into homeownership was the source of the problem. Widespread as this belief has become in conservative circles, virtually all serious attempts to evaluate the evidence have concluded that there is little merit in this view.”

    – Joseph Stiglitz

  49. “unduly tight underwriting standards” or just proper, non-forced by Schumer/Frank underwriting standards?

  50. @enraged @J.G.

    No gold at Fort Knox ,, if any still is in the US it is in the NY Fed’s vault (and owned by foreign countries),, we sold off all our gold during the 1960’s when foreign governments demanded redemption for their treasury bonds in gold… We tried to save Vietnam for the French … the French bought our short term 1 and 3 year bonds to “help the war effort” and got gold at the unrealistically low set valuation price when they matured.

  51. @J.G.,

    Someone posted an interview about the American gold allegedly in Fort Knox but… not really there, a couple of articles ago. It’s short but enlightening. If you get a chance, listen to it.

    And try to cheer up. Something is in the works somewhere. And it’s not bad. It will simply be different.

  52. @Boots,

    Good for you. It may take a long time but it’s worth doing it.

  53. i did file my proof of claims against GMAC in BK court in NY because i have a pending case against them GMAC and Executive Trust Services dba ETS. my claims is secured for more a million. i received a call from someone confirming my proof of claim that they received it.
    i urged all homeowners to file the proof of claim even though you don’t have a pending case yet. we homeowners should be vigilant about this pretenders beneficiary / owners of our mortgage or loans.

  54. Or inject $1.9 trillion increased capital into the banks’ to goose speculation in the markets. Its in the playbook. Too late to change now—$600 trillion in derivatives in US banks. Cant let them get triggered.

    Posted by 4closureFraud on June 19, 2012 · 3 Comments

    In re: U.S. Bankruptcy Court Southern District of New York (Manhattan)
    Bankruptcy Petition #: 12-12020-mg

    Debtor-Residential Capital, LLC aka Residential Capital Corporation
    Subsidiary List – See Attached Exhibit A

    1177 Avenue of the Americas
    New York, NY 10036
    Tax ID / EIN: 20-1770738

    Robert Brown, a consumer attorney based in New York will bring the motion for an Official Borrower Committee in the Residential Capital, LLC bankruptcy case. He has experience in lender liability litigation and bankruptcy practice.

    Robert E. Brown, Esq.
    Law Offices of Robert E. Brown, PC
    44 Wall Street
    12th Floor

    New York, NY 10005
    18 Mott Street
    2nd Floor

    New York, NY 10013
    2409 Richmond Road
    Staten Island, NY 10306
    Wall Street (212) 766-9779
    Mott Street
    /Chinatown (347) 488-6969

    Staten Island (718) 979-9779
    Facsimile (718) 979-9784
    All homeowners who believe they have claims against one of the entities listed on EXHIBIT “A” qualify to participate in the motion to appoint a Borrower Committee. There is no cost to any participant (homeowner) and if the committee motion is granted the debtor in this case, Residential Capital and subsidiaries will pay for the committee expenses pursuant to 11 U.S.C. § 503(b)(4).

    Claimants that have lawsuits pending have standing to participate in this motion. Furthermore, homeowners who believe that they have claims, including illegal foreclosure, but do not have a lawsuit pending may still qualify.

    Time is of the essence as events are already unfolding which may affect borrower rights. Those events include an $8.7 billion settlement couched as a claim, wherein ResCap and Ally will agree not to challenge repurchase claims with large institutional creditors. Another important issue is the bankruptcy may release Residential Capital, LLC and Ally Financial Inc. from the nationwide loan-servicing and foreclosure settlement.

    Bankruptcy law allows for formation of Official Committees in a chapter 11 bankruptcy cases to represent various classes of claimants. In lender bankruptcies it is typical that Indenture Trustees, insurers and large bank claims dominate the committee for the unsecured creditors. The borrowers are included under this committee. Understandably this creates conflicts of interest if the borrower claim is directly against not only the bankrupt entity, but may also be against a Trustee, insurer or bank seated on the committee.

    In the American Home Mortgage bankruptcy case, the judge determined that inherent conflicts of interest existed and appointed a separate committee to represent only borrowers. This was the only lender bankruptcy case to date where this occurred. Paula Rush was the driving force behind that committee, served as Chairperson of that Committee, and she will be assisting Robert Brown in the formation of a committee in this case. You may reach Paula to answer any questions you may have at 443-676-3509.

    To begin, you only agree to have your client’s name included on the motion for appointment of the committee and prepare a paragraph of background relating to the violations asserted resulting in a claim to be included in the motion. A hearing will be scheduled for the motion and you may attend the hearing, but you do not have to attend. The attorney bringing the motion will argue it before the court on behalf of all participants on the motion.

    After the committee motion is granted, the U.S. Trustee will send out questionnaires to ask if you would like to serve on the committee. You do not have to serve on the committee as it is voluntary. Anyone can serve on the committee regardless of what state you are in. Meetings are held via conference calls to discuss what actions the committee will take as the bankruptcy progresses.

    For more information, you may contact:

    Robert Brown 212-766-9779
    Paula Rush 443-676-3509
    5/14/2012 0001 Voluntary Petition for ditech, LLC 0 119 k
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    5/14/2012 0001 Voluntary Petition for EPRE LLC 0 131 k
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  56. Wednesday, June 20, 2012 | By Lily Rothman | @lilyrothman | 1 Comment
    ‘No Place Like Home: Foreclosures in America’ by Bruce Gilden

    Watch the short movie. Terrible.

    Read more:

  57. Colorado is turning back toward the light…

    Foreclosure: Initiative 84 passes latest hurdle with Supreme Court’s okayBy Kelsey Whipple Wed., Jun. 20 2012 at 2:54 PM Categories: Follow That Story, Politics

    Opponents huffed and puffed, but the Colorado Supreme Court did not allow the Colorado Bankers Association and the Independent Bankers of Colorado to blow the house down on Initiative 84’s official language. In a ruling made public yesterday, the court decided to allow the proposed foreclosure amendment to move ahead as currently written, despite objections from opposition groups that call it vague and say it doesn’t focus on one subject, as state law dictates.

    The court dismissed both concerns, making this the second time a state body has done so. In April, the Colorado Title Board reviewed the amendment’s original language, which changed slightly before earning final approval. So in May, Initiative 84’s detractors took the issue to the Supreme Court, arguing that the title board made a mistake by not stopping its language — and the entire effort.

    Organizers at the Colorado Progressive Coalition, the main group behind Initiative 84, drafted the proposed amendment after House Bill 1156, a similar foreclosure measure, died in committee before making it to the floor. Instead of moving forward on a second bill, they changed direction, continuing their role in the Campaign to End Unjust Foreclosure with an amendment that would allow citizens to vote on the measure, rather than only legislators.

    Initiative 84’s primary purpose is to reverse 2006 legislation that altered the legal standards for processing foreclosures. With the shift in 2006, it became legal for lawyers to sign a statement indicating that the financial entities they represent have the ability to foreclose on a property. Initiative 84 seeks to require documentation of ownership before any proceedings begin.

    Now that the Colorado Supreme Court has pushed the measure past its latest hurdle, Initiative 84 is heading toward the election in November. The last step depends entirely upon numbers: Supporters must raise a minimum of 87,000 signatures by August 8 to guarantee that the initiative makes it onto a statewide ballot. Right now, at least 50,000 are in circulation.

    Last week, supporters of the Campaign to End Unjust Foreclosure met at the Aurora home of Marla Sneed, a property owner who says she narrowly missed being foreclosed upon. Accompanied by by her neighbors and state representative Joe Miklosi, Sneed spoke out about her experience with the state’s current foreclosure laws to raise awareness for Initiative 84.

    “We need to insure that the financial industry has credibility and accountability to the American people,” CPC economic justice director Corrine Fowler told the crowd gathered on Sneed’s front lawn. “We have found that fraudulent foreclosures are a real problem in Colorado. This issue does not discriminate.”

    More from our Politics archive: “Foreclosure: Coalition gathers signatures, stories for Initiative 84.”

    June 20, 2012

    June 20, 2012

    A Key West, Florida Circuit Judge has vacated a final judgment of foreclosure entered after a trial where the homeowner was not present and could not be present for the trial due to his religious beliefs and practices. The homeowner had filed a motion to continue the trial, supported by an affidavit, based on the fact that the trial was scheduled during one of the highest holy days in his religion (a shabbos day during Passover). The court denied the motion and conducted the trial without the homeowner being present.

    The homeowner filed a Motion to Vacate the final judgment on the grounds that holding the trial on a high religious holiday where the homeowner could not be present for the trial, and where the court had express notice of this before the trial, violated Florida’s Religious Freedom Restoration Act of 1998, Fla. Stat. sec. 761.03. The statute expressly provides that the government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, and that the “exercise of religion” is an act or refusal to act that is substantially motivated by a religious belief whether or not the religious exercise is compulsory or central to a larger system of religious belief.

    The Motion argued that the court is an arm of the government, and that the rule of general applicability (setting cases for trial) was applied in a manner which burdened the homeowner’s exerecise of his religion (being forced to attend a trial on a high religious holiday). The court granted the homeowner’s Motion, vacated the Final Judgment, and the sale is in the process of being voided. The homeowner is represented by Jeff Barnes, Esq.

    Foreclosures in Florida are on the rise both in number and in stages of progress now that several law Firms have taken over many of the cases left in the lurch as a result of the David J. Stern debacle, which left over 100,000 Florida foreclosures “up in the air” when the Stern Firm ceased operations. Mr. Barnes’ Firm has been recently retained in more than a dozen new Florida foreclosure cases, and we are receiving inquiries from Florida homeowners daily.

    Jeff Barnes, Esq.,

  59. “…there are certain steps that lenders and the government need to take in order for this oversupply to reduce and for the market to return to a more normal balance”.

    Stupidest thing I’ve ever read. We already know what happens when lenders and government work hand in hand.

    Either government gets completely out of the lending business and leaves it to the market to fix itself in a capitalistic fashion ( i.e. banks crak and we can start anew) OR government takes over and nationalizes the banks. That insane status quo and protectionism toward banks is what created the damn situation in the first place, for Pete’s sake!

    Its capacity to act as an entity represented by an immune [absent fraud], or judgment proof “trustee” is removed. The failed trust documents still contractually regulate operation at some level.
    “[A contractual organization is] “created under the common law of contracts and does not depend upon any statute for its existence.”” 156 American Law Review 28
    The documentation creates a type of partnership.
    “A joint venture is a legal organization that takes the form of a short term partnership in which the persons jointly undertake a transaction for mutual profit. Generally each person contributes assets and share risks. Like a partnership, joint ventures can involve any type of business transaction and the “persons” involved can be individuals, groups of individuals, companies, or corporations”
    “It is important to know and understand that an organization (such as a common law trust), which has not been created under State authority, generally cannot be regulated, and most State laws (written to effect corporations) have no legal force upon such an organization. [See the Sales Tax page within this website for a revealing discussion on the term “person”, and corporations.] We say that such a trust cannot “generally” be regulated, because we wish the reader to understand that there are certain activities that are inherently subject to State regulatory control [e.g. hauling toxic waste on the highway] and if a common law trust were to engage in such an activity, then it would be subject to State regulatory control.”
    The foregoing describes why the trust form was claimed by the bank-operators. Nearly absolute immunity. But it must act as and be a trust to claim these protections.
    Even a conservative view as set out above weakens in the face of active business activity such as real estate management.
    See a Wisconsin “declared common law trust”–
    The “business activity” is managed by co-operators: of a joint venture pool of passive investors. If any of these investors undertakes a material role in management of the business, then that person becomes a party also. The split of revenue is usually designed to reflect the roles played by the operators. They have a duty of fair dealing with their investors—but most often not the great specifity of entities described by statute: partnerships, LLC, Corporations. Joint investment mineral extraction often involves this form of ownership—there is law. State law will often fall back on a catch all entities engaged in business activities that generate cash flow in the state. Business receipts and franchise and local fees are involved with the entity. The operator is not exempt as a trustee might be. The joint venture is not exempt either. The managing operator—aka common law general partner owes taxes on income, franchises, licensing fees in ever jurisdiction where it possesses real estate. Possession of real assets by a joint venture triggers tax jurisdiction for trust income. Every state, county, municipality, school district and unincorporated township fire department has a shot at the “failed trust”. The situs for determining where taxable services are allocated for purposes of payment of servicing fees for the operator involves whether the service performed occurred at the location of the real estate. Service fees tacked onto a preserver [see for example: ] or realtor should be deemed allocable to the location the service was performed by agency. If the agent is there then so is the principal that engages the agent—especially negligent agents negligently selected. Splits with attorneys working at law firms by the joint venture pool and its managing operators would have a situs in that jurisdiction for state and local income taxation and license fees. The purported trustee, the servicer, the preservers, each has liability to local tax authorities. Joint Venture investment pools are common offshore. The banks just brought the form home and foreign investors understood the concept.

    There are various means by which a trust’s “existence” may rise or fall under common law. Typical failure to: maintain the legal and administrative-operational trappings. Typically this would likely entail poor or no records. Bad record-keeping is a certain sign of aberrant behavior. Another failure might be to have failed to file mortgage loan schedules with Delaware or NY Secretary of State UCC Division and/or in accordance with SEC filings for the trust. A trustee’s fiduciary duties require regulatory compliance. These filings detail the trust’s assigned mortgage-notes. The trust must be able to identify its initial or altered corpus with reasonable verification. Other failures to follow its own formalities—more defects. This could include everything from failing to keep notes of decision-making, to commingling or misstating accounts and/or REO. Another important consideration was the physical preservation of original homeowner promissory notes. Such a note indorsed in blank is saleable. Delivery of such notes to the trust in timely fashion—then to remain static. One subgroup is the degree to which a “trustee” publishes its declaimers to its MBS investors on the bank-trustee’s website. If the disclaimers are reflective of an abandonment of fiduciary responsibility for the accuracy of its numbers—then its merely making an “admission” that it is not a “trustee”. Another violation of trustee duty would be acquiescence in systematic diversion of investor monies. Examples would be negligent oversight of fee distributions—failure to negotiate contracts in the best interests of the trust beneficiaries
    The common law trust rules in respect of identification of trust assets as of a snapshot in time are engrained in the boilerplate of the securitization documents to meet IRS REMIC requirements.
    Per IRC 7701, 301 CFR 7701 “(a) Business entities. For purposes of this section and § 301.7701-3, a business entity is any entity recognized for federal tax purposes … that is not properly classified as a trust under § 301.7701-4 or otherwise subject to special treatment under the Internal Revenue Code. A business entity with two or more members is classified for federal tax purposes as either a corporation or a partnership….
    Generally its not a trust if;
    “(c) Certain investment trusts— (1) An “investment” trust will not be classified as a trust if there is a power under the trust agreement to vary the investment of the certificate holders. See Commissioner v. North American Bond Trust, 122 F. 2d 545 (2d Cir. 1941), cert. denied, 314 U.S. 701 (1942). An investment trust with a single class of ownership interests, representing undivided beneficial interests in the assets of the trust, will be classified as a trust if there is no power under the trust agreement to vary the investment of the certificate holders. An investment trust with multiple classes of ownership interests ordinarily will be classified as a business entity under § 301.7701-2;”

    Per IRC 7701: “(6) Fiduciary
    The term “fiduciary” means a guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person.”
    If a “trustee” wants the trustee status—he must act like one.
    The IRS confirmed to Reuters that the review comes in response to mounting evidence that banks violated tax requirements by mishandling the transfer of mortgages to REMICs, short for Real Estate Mortgage Conduits.


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