About Us

Also see About LivingLies and LendingLies

Neil F. Garfield, M.B.A., J.D., 76, is the winner of many academic awards, a popular speaker, and author of articles and technical treatises on law, finance and economics. He has concentrated his law practice for the last 16 years on issues related to structured finance (securitization in particular). As a former investment banker and real estate investor, he knows mortgage securitization issues from the inside out, who the deciders are, and how they arrived at a catastrophic scheme to defraud, people, agencies, institutions, and governments all over the world. As an expert witness and trial lawyer for 41 years, his efforts to spot evolving trends have helped thousands of homeowners keep their home and receive damages as compensation. Having formerly filed hundreds of foreclosure actions as the attorney for small banks, homeowner associations and mechanics liens, he is well suited to provide assistance to investigators, lawyers and pro se litigants.

Garfield has offices in Jacksonville, Florida and correspondent or co-counsel relationships with attorneys in all 50 states. He is a licensed member of the Florida Bar and appears as special counsel, trial consultant and expert witness across the United States and in 26 countries. His work includes consulting with State legislatures, law enforcement and bank regulators. In the course of his extensive research, analysis and writing on the mortgage meltdown, he has interviewed dozens of insiders to confirm or corroborate his conclusions.

The former consumer advocate, trial attorney, and economist says that he “can’t watch this meltdown without lending a helping hand to those in distress.” Appearing on TV, Radio, multiple blogs, and live appearances, Garfield offers bold and sound advice for dealing with the “largest economic fraud in human history.” The solution he says lies in a collaborative approach in which the investors who advanced money to buy “mortgage bonds” (derivatives) are brought together with borrowers. His conceptual framework requires replacing existing “servicers” who are not legally authorized to represent the investors with servicers whose mission is preservation of investor capital and acting within the bounds of applicable law. “The problem,” he says is that “the alleged servicers are only incentivized to foreclose regardless of the negative consequences to the lenders, the borrowers, government and society.”

Garfield says the servicers can be fired by any credible group of investors that have been identified as trust beneficiaries of any REMIC trust. “Having ignored the terms of the trust,” he says “the servicers cannot now claim the benefits of it.” Garfield says these investors should name new servicers with whom they have a direct contract for servicing the loan in ways that will result in the greatest recovery of invested capital.

His family owned seats on all major securities exchanges as Garfield & Co. from 1945-1983. During that time he performed duties relating to the purchase and sale of securities on the floor of the NYSE and AMEX. As an attorney, he has represented borrowers, homeowners, hundreds of homeowner associations, banks, developers and private lenders.

Neil has come out of retirement with one purpose in mind — to do all he can to counter the effects of the Mortgage Meltdown and save the people and the country from the disaster created by the creation of “free money” using derivative securities that not even experts understood, and targeting the least sophisticated members of society.

Living in Jacksonville, Florida, Garfield comes from a long line of Garfield creators and innovators: His great-grandfather created the first fully automated pharmaceutical plant in the United States 100 years ago, which now stands as an exhibit in the Smithsonian Institution in Washington, D.C. His cousin, Brian Garfield is a prolific and acclaimed author of fiction and movies (Death Wish, Hopscotch, Kolchak’s Gold) and nonfiction (Currently the “War in the Aleutian Islands” is a popular coffee table book). His family funded research in the 1950’s that resulted in the worldwide production of lanolin from cholesterol. The Garfield Foundation is a major contributor to wildlife refuge and environmental causes.

For over 16 years, Neil Garfield has been researching, writing and collecting information about homeowners in distress and teaching lawyers how to litigate foreclosure defense cases. After correctly predicting the housing crash right down to the last dotted “i” and crossed “t” he began writing his blog http://www.livinglies.wordpress.com. Starting with modest results, the blog took on a life of its own and has enjoyed over 13 million visits from readers like you.

His basic premise, set forth in his FAQ and Mission statement is that the foreclosure mess was not a situation where millions of people suddenly appeared needing housing, but where Trillions of dollars appeared and investment banks were in search of vulnerable, unsophisticated, trusting people who could be convinced to sign their names under false pretenses and false representations originating from investment banks and delivered to investors and borrowers. He believes that securitization of debt is a legitimate method of risk diversification but that the investment banks in practice turned it into a PONZI scheme, the full scope of which is not yet fully understood by government, the press or the public.

He was first alerted to the possibility that the investment banks were conducting a fraudulent enterprise when he learned of a study by Katherine Ann Porter at the University of Iowa in 2007 where it was first revealed that 40% of the closing documents, including the promissory notes from “borrowers” had been destroyed or “lost.” Knowing that this percentage was far too high to be dismissed as accidental he quickly concluded that the destruction of notes and other closing documents was intentional. He eventually concluded that the only reason a sophisticated worldwide banking institution would destroy promissory notes (equivalent of cash) was that the notes were created, sold and traded under false pretenses. The banks successfully convinced most people that images from a computer were just as good as the original paper (despite laws to the contrary).

It was better for the banks to be guilty of negligence than to have the evidence readily on hand that they had intentionally created and operated a fraudulent enterprise.”You would only shred a $10 bill if its continued existence would implicate you in civil or criminal liability. So you would shred it because you told someone it was a $100 bill and now they want to see it. “Better to be guilty of negligence than criminal or civil fraud.”

Examining thousands of closings in the context of his research, investigation, interviews and analysis, he found that there were two central problems to the claims of securitization in practice:

(1) the loans were switched at closing with the borrowers meaning that the documented loan signed by borrower under false pretenses referred to a transaction that never existed and the closing proceeded based upon a prior Assignment and Assumption agreement calling for violation of various State and Federal law and was therefore void as were the acts performed pursuant to the illegal agreement and

(2) that the accounts were switched at closing with the lenders (investors) meaning that the money of investors was not placed in the REMIC trust that was shown to them and that the loans were never delivered or transferred to the Trust. The result was that investor money in many cases came indirectly from a dynamic dark pool to the closing table unknown to both the investors and the borrowers.

Third parties claimed the loan as their own. But the loan relationship or contract was actually created between the investors and the borrowers, for which there was no documentation other than wire transfer receipts in the money trail which had to be traced to their funding sources, since various intermediaries were used to conceal the true nature of the transaction. His conclusion is that in many cases neither the trust documents and related securitization instruments nor the note and mortgage are contractual documents that can be enforced and none of them should have been filed or recorded.

Agreeing with the allegations in the lawsuits of investors, insurers, guarantors, and other third party sources of funding, Garfield concludes that both the Pooling and Servicing Agreement and the the note and mortgage are void or unenforceable documents because the main premise of each was ignored as were the central terms. Hence neither the investors nor the borrowers are subject to provisions, terms and restrictions contained in the Pooling and Servicing Agreement, promissory note or mortgage each of which is a nullity. The conduct of the intermediary parties created by the investment banks corroborates both the substance of Garfield’s conclusions and the intent to defraud — this fully explaining the need for forged, fabricated, robo-signed documents that were neither authorized nor true.

Garfield’s final conclusion is that only the intermediaries want foreclosures because they are cutting off the liability to refund multiple disguised sales of the same loan. The value of the loan is continually diminished by each step in the foreclosure process despite a majority of cases in which the preservation of the investors’ capital would be far better served by a workout between investors and borrowers, reserving their rights to bring claims against the intermediaries who essentially stole the identity and rights of both the investors and the borrowers. With the investment banks continuing to “settle” claims for misbehavior by payment of fines — using investor money — they continue to diminish the capacity of the investors to be paid in full and the corresponding rights of the borrowers to a lower balance that is due (thus making the workout, settlement or modification far easier than the the current system in which “servicers” use any means possible to lure people into default and then foreclose, this protecting and enriching the servicer while the investor and the borrower suffer).

His central thesis is that BOTH the investor/Lenders who advanced the cash and the homeowners who mistakenly believed they had encumbered their homes have a legal basis to take the driver’s seat. The deal was always between the investors and the homeowners. Instead the banks diverted the money and paper where they claimed ownership of the bonds and loans, (and even claimed losses that were nonexistent) cheating the investors (government, insurers etc) out of money and security and stealing homes on the basis of loans that had already been paid and should be distributed to investors, this reducing or eliminating the original debt, which in all events is not truly secured.

Do you need help with your foreclosure?

Visit our Services and Products page for information on how the LivingLies team can help you!


432 Responses

  1. Dear Neil: You have taught me more about law than any school, law firm and life of the law; you do not know how much you will be missed – I will stand in federal court one day, and pay homage to you as my ‘mentor’ know you were loved by many, many who you have helped. I/We will miss you. Love, Papergate

  2. Hello. I have a difficult issue and I am trying to find some help. I am a first time home-buyer and do not own property or deeds to any property. I am currently under contract and my real estate agent just notified me that when the title search was being done by the closing attorney, it came back that my name was on a “fraud list” and that every title company here in Georgia is mailed this “fraud list”. NO ONE know what this list is, how my name got there or can retrieve any information as to how to have it removed. But this has cause me to terminate my current contract because I can’t get this house or any other until I figure this out. The only information that was provide is that this list involves companies, entities or individual trying to fraudulently obtaining property under fictitious or dissolved company names. I am scared and unsure of what to do first as the title companies with not provide me with any information. Any help will be appreciated. Thank you.

  3. Can you tell me what this is and how it may affect my pending case? ABC 2005, forged Danielle Sterling endorsement, BOA told me not to pay in 2008, MERS assigned as nominee for ABC in 2013 to resurgent, 2014 to shellpoint then Summons and complaint 2015. New York foreclosure.

    If this document is legit, the lid has been blown off. This can’t possibly be true. Can it?

  4. Neil & team,

    Would it be possible to put something out regarding what happens to mortgages & HELOCS in the event of fires hurricanes etc and how the properties are insured by the banks etc and how insurance proceeds are distributed vis a vis the homeowner borrowers. If there is double dipping triple quadruple up the chain including the RMBS it would very much help me and others assist panicked distraught homeowners who have lost their homes and all possessions and are hearing they have 3 months until FNMA BOFA WFB art al come in and foreclose on the ashes of what remain of their former lives. Thank you so much given the number of catastrophic disasters facing this country it would be very beneficial. Bless you all you helped so much these past several years.

  5. I have a mechanics lien on a property in riverside county ca. I am not a contractor or a tenant. I have taken possession of the property and have a agreement with the husband sho at the time the arrangement was made it was his sole and separate property due to a default judgement against his xwife. Both parties husband and wife joint tennants were given proper notice prior to lien recording. Ki have been in possession of the property for 2 yrs and have had mail coming to residence for over 5 yrs. The city was going to condemn the property but worked with my partner and I to bring the property up to code and neighbor hood standards. The property is now one of the nicest on the block . property was reassessed over 160000 since repairs and rehabilitation was completed. The x wife now o re a yr. Later after notice was given is trying to get a unlawful detainer to get us out and keep from paying debt. Help please

  6. I paid off my mortgage in 2007 My original loan was with New Century Mortgage 02/22/02 which later changed to Litton loan servicing. The deed to my home was never cleared and these two companies have gone bankrupt. I no longer have my proof of payoff statement. I have since moved and lost it. I have a cash offer on my house but the closing has been postponed for over two months because I can’t locate which company has my records

  7. Good Morning, recently I read a post(livinglies website) discussing the process of tendering.It mentioned If enough people pool there funds together this might be a way to fight the pretender lenders.Is there anyway i could have someone contact me and elaborate on this topic?

  8. Try to contact me if you could concerning my land and structures….

    I might be able to receive your assistance.



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  12. I am thrilled to find you! As a 28 year Real Estate veteran on the SW Florida coast, I’ll be making a donation as soon as I’m finished here. I’ve lost my stomach for what used to be my passion because I’ve seen, over and over, the corruption in our system. Although, unlike most people, I have gone to the CFPB and my local Representative and even with bank’s admission of guilt, I see nothing happen. I myself was part of the robo signing, double tracking on my own personal home only to see it sold to the same person who I had it under contract to in a short sale offering, 30 days later. She bought it at far less a price than she was willing to pay. Another inside deal. I have client after client who I need to refer to someone who knows the in’s and out of this system. You may just be my new best friend! Thanks so much for fighting the fight! I’ll be scheduling my own consultation soon! Please let me know how I link you to my websites.

  13. Re Attorney Jeff Barnes out of Boca Raton Florida, If you were a client and verbally attacked and threaten by Jeff Barnes, if you thought he went absolutely crazy with horrible accusations towards you and your family when you challenged his failure to defend you etc, or he abandoned you and your family at the last moment in your case, or over charged you, or lost property to him because he promised to used it for future defense but bailed out and took your property anyway. Please send your info to Ray Shelton at rsheltonr@gmail.com
    Don’t let him get away with it, fight back. There are others and we need to unite and show a pattern of abusive behavior.

  14. I used to be very happy to search out this net-site.I wanted to thanks on your time for this excellent learn!! I undoubtedly enjoying every little little bit of it and I have you bookmarked to check out new stuff you weblog post.

  15. How can we get justice in Louisiana when the lawyer that is commititing the fraud with the banks works for the Attorney General Office and that is where to report fraud.

  16. am trying to help someone find their Pooling and Servicing Agreement. The information is below:

    M ERS #: 100091805003039211 SIS #: 1-888-679-6377
    Date of Assignment: March 6th, 2012

    Date of Mortgage: 12/10/2004 Recorded: 12/20/2004 as Instrument No.: 2004-255773 In the County of Honolulu, State of Hawaii.

    Property Address : 82-6291 MANIN! BEACH ROAD, KEALAKEKUA, HI 96750

    James Smith: jsmith5915@msn.com or 443 677 2799. Thanks

  17. Should Mr Arkley, his board of directors and their main attorney from SN Servicing be put in prison for knowingly using forged deeds and mortgage documents in our federal courts and states courts? Have they violated Rico laws on many issues? Has Mr Arkley and SN Servicing collected billions from fake or forged deeds and mortgage document from unaware homeowners all across the country? Have many banks like US Bank dumped everything into the hands of the pit bull type servicer like SN servicing to avoid culpability and to hold on to whats left of their banks reputation? Do you know for sure that your deed and or mortgage is really what you signed? Go to your county clerk and look over your documents very very closely. The instruments that may have been used to forge your signature on deeds and mortgages are almost perfect. If you are sure they are fake and or forged, Send a letter to SN Servicing put them on notice of what you found, then file a complaint with your states attorney general, and also file an additional complaint with the Florida States Attorney General Pam Bondi ASAP. Also file a complaint with the FBI and your local law enforcement. Every legitimate complaint against Robin P. Arkley made to the right agency helps in the fight against these men who allow what is taking place all across this nation.

  18. Neil, If you get this, I need help finishing my case. This is crazy, but I am in Illinois, my case was initially given to the bank (Lower court granted summary judgement against us without a shred of evidence…..I mean it, not 1 shred. No Original note, no assignment, No prove-up, no consideration…nothing. My case began in Nov 2008. I appealed and the attorney that represented me was great, but he abandoned me because I couldn’t pay him in full. I WON the Appeal, it is now in the lower court going through discovery, but the attorney I have now (6th attorney overall, 2nd since I won the appeal) WILL NOT get aggressive enough to finish this case. It feels like the banks own all the attorneys in this state. Please help!!! I am very knowledgeable and can get you up to speed over the phone, or a Competant attorney.

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  20. This blog was… how do you say it? Relevant!! Finally I have found something that helped me. Many thanks!

  21. Need litigation help in NC..Cannot find even one attorney to help with foreclosure defense litigation. I have had securitization audit performed revealing securitized loan, fannie mae owned according to fannie mae website but NO record of assignments anywhere to be found. Fraudulent and robo signatures, broken trust agreements, violations pertaining to laws governing the trust, federal and state laws .

  22. Nice Thought! Who makes you inspired?

  23. I appreciated you Neil Garfield.

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  35. A plaintiff must allege facts establishing a basis for a claim for damages as additional relief.

    US Bank is not going to be found holding forged documents whereby the documents it holds, forged or other wise are for the amount wired into settlement owed by the lender of record.

    The lender of record is found on the closing statement HUD 1. Therein exists a misjoinder of parties and parties claims whereas the plaintiff is arguing the validity of a commercial lenders Power of Attorney under a security instrument filed in NY for UCC 1 filing for default by plaintiffs lender and mortgages “seller”.

    Herein is a beautiful claim for dual consideration and unlawful washing of assets and liabilities by promissory estopples by lache and undue acceleration.

    Garfield – You should know this as a proclaimed foreclosing attorney. Want something prima facie to this case .and argument for a release of lien ?

    Leave a Reply ….


    Hint HInt – US Bank is not a mortgage lender –
    See local NY UCC-1 filing.

  36. Ray Shelton, on December 19, 2013 at 12:20 am said:

    US Bank and SN Servicing has submitted Forged documents in our federal bankruptcy case too and we will never stop perusing them in court for damages. We are also asking our Federal judge to prosecute their current attorney out of Jacksonville Florida who continued to defend this case knowing that forged document are before a federal court. All the offending parties at SN Servicing and their attorneys are committing a serious crime against our country. We have filed a formal complaint with the FBI and the US attorney general and many great Judges all across this nation are finally stopping them from this kind of fraud on American families. US Bank and SN servicing and their attorneys are also violating a serious consent order that was to protect the people from these crimes but they could care less. Please feel free to have your clients join a class action suit so that we can end their behavior with a multi billion dollar punitive damage suit. Join us, call Ray Shelton in Florida at 352 274 8467

  37. NEVER GIVE UP THE FIGHT NEIL, THE BOARD OF DIRECTORS of banks committing the crimes SHOULD BE jailed for 50 years. I would like to talk with you ASAP

  38. You’re a good man, Neil Garfield.

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  40. […] also links to LivingLies webblog: “Zombie Properties: Banks Don’t Want the Money, Don’t Want the Property: They […]

  41. I need help!! Live in Georgia. Home was foreclosed in 2009. Still in home. Hired attorney – judge ruled on case based on fact Ga is Non-Judicial state. Said foreclosure attorneys (McCalla) followed law. Didn’t bother to explore facts of negotiating take place between homeowner and Wells Fargo as wells as Freddie Mac. Now attorney advised we have until 12th of September 2013 to file appeal. Attorney now advised he doesn’t have needed license to file appeal and doesn’t now what kind of appeal would need to be filed. I have fought for 4-5 years now and at 11th hour I need HELP!! I can not loose my home. We have even even offers to pay off full balance. Would prefer modification attorney seems to have washed his hands kinda like he got his butt chewers up and spit back out.

    Please help!!!

    Thank you,


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  46. Does anyone know of a malpractice attorney in the Kansas City area to use against one of the foreclosure mills? I am fighting a foreclosure by Deutsche and Chase instigated by South and Assoc. South has now hired another attorney to assist them. It appears that is mainly due to their bogus documents and failure to follow FDCPA in the Foreclosure We also have all of the named robo signers etc and back dated docs and so on. My attorney however is reluctant to sue the attorney. My opinion is that had the attorney read and researched the docs correctly and understood that there was a modification working, he would not have started a foreclosure.

    Any names out there??

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  53. MR. Garfield,
    Would you please contact me concerning my home and my situation with One West Bank? I have my original, wet ink and endoresed note. I have own it….yet am having issues with this bank.
    Thank you.


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  60. currently as we see St.Louis , Mo starting Mediation which in truth is nothing more than a sheild for the Banks with the Democrats that claim to be on Obamas side, are perpetrators that set the system up in the first place. Empty Trusts , oushing Mediation only to once again steal form homeowners. The attorneys calin they know nothin about realestate law. They ae know and somehow are all making much profit from the homeowners. The system is rigged with fraud.
    MSD is clearing part of the fradu as well and the debt collectors which fail to submit billing to the homeowners.
    *** Lets take a closer look at Mediation. The state of missourri get to resecuritize your loan although it is being set up for default. Once you default by any means the state makes it profit from the insurance on the bonds. Why wasnt this discussed or disclosed with the Tax payers with the presentation of Mediation. mediation was simply forced upon the homeowners. We currently have laws on the books which regulate the foreclosures although St.Louis is a Non -Judicial State. When challenged the attorneys must produce the Note and the Deed. Proofing they have the right to foreclose. The Courts the Judges do not enforce these laws. Mediation is a method by which the State aid and abett the fraudulent conduct of the banks.
    Bank of America is getting away with abosolute fraud in the State of Missourri , reserving a location Downtown Missourri around the corner from the Attormey Generals office and just a walk away from the federal Courts. They have the full luxury of creating fabricated documents , forging signatures, inflating principles and much more. They also have the luxury of using the Best Attorneys in the State of missourrri to assist with the fraud.
    The advocacy Groups such as Beyond Housing afiliated members, such as many real estate companies in the 63121 area , are clearly stealing homes while claiming to assist the homeowner. They are assisting you right into foreclosure. Absolute fraud !
    This is a conflict of interest and wirefraud. Ths President elect Obama , has many friends here is St.Louis. The very Indiduals committing these criminal acts are claiming to support O’Bama.
    it is most disrespectful of this President and the Attorney Generals Holders seat. They are making a complete mockery of this President. Never has it been in our history you have Mayors and other Government officials acting against the President.
    i hold the original Deeds to my homes. With having Bankrupcy attorneys, to view the documents in disbeleif and amazement , the attorneys failed to state these were unsecured debt. They in turn committed fraud themselves with backdoor deals at my expense.,
    With being in possession the attorneys did not even state this to the Judge. Perjury and fraud was committed against the Courts. The only problem I am having with this is the same people committing this fraud appears to be listed on NANCY GARGULA profile page. Nancy Gargula Prsides over the midwest trustees. This is a real problem. Now wonder the attorneys are corrupt presenting forged documents signed by the foreclosing attorneys Notarizer under a deceased womans name. Forged sigatures of Dominique Johnson , They have all committed wire fraud and perjury as well as theft by deception and unjust enrichment.

    why isn’t the feds doing anything about this ?
    this is blantant fraud with surpressing ” Due process “

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  62. Although I received in writing from The Bank of New York Mellon Mortgage Backed Securities Division stating that they are no the holder or owner of the note but Trustee for the investors, Bank of America sent me another letter which I received today which included documents for me to apply for a loan modification which states the balance I am behind will have to be paid up front and that Bank of America is the Servicer and Bank of New York is the Owner or holder.
    Bank of New York Mellon says they have no say so in Loan Modifications so where to go from here is the question. Everything Bank of America is saying contradicts what The Bank of New York Mellon is saying about Asset Backed Certificates CWABS 2007-2

  63. Powers keep on lyin’
    While your people keep on dyin’
    World keep on turnin’
    Cause it won’t be too long
    I’m so darn glad he let me try it again
    Cause my last time on earth I lived a whole world of sin
    I’m so glad that I know more than I knew then
    Gonna keep on tryin’
    Till I reach the highest ground

  64. Just want to say your article is as astonishing. The clearness for your
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  65. Good article! We will be linking to this particularly great article on our website.
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  66. Hi,

    Great Infomation !

  67. Hi,

    really helpful information there are.

    Thanks a lot for sharing


  68. Livinglies –

    fka The Bank of New York, as Trustee for the Certificate holders of CWABS, Inc., Inc., Asset Backed Certificates, Series 2007-2 which has an address of 101 Barclay Street – 4 W, New York NY 10286 and has a telephone number of (888) 999-0615.

    To the extent you are requesting production of original note,

    Response- The current owner of the note does not exist in a safe & sane economic affair. The presumption is for converted assets and liquidation of the note transferring the asset into a liability.

    The Bank of New York Mellon allowed the promissory note to be liquidated for a compensating balance in the formation of the purported Asset Backed Certificates, Series 2007-2 This balance was delivered to the notes holder, into the Sellers settlement account.

    The trade is from the Transferor to the the Seller. The Trust proceeds are delivered by depositor and pledged to the beneficial interest – the Certificate holders or repository , the Bank of New York Mellon fka a Branch of the Fed Reserve B of NY.

    The now infamous shadow banking scheme NEVER Happened….The off balance sheet non sense is just that – Non sense


  69. correction

    material alterations

  70. If a bank alters a loan or modifies it (loan) without the consent, signature, or any documentation from the alleged borrower, can this contract be voided out and how?

    Response – Voiding out the contract is the last thing you want . You want to pursue enforcement of the obligors terms for equable interest’s your denied by these martial alterations . . Pursue a Due on Sale arguing (1) restraint on alienation (2) Discharges of Guarantors indemnity (3) Default by Principal parties (4) right of exoneration


    This is not legal advice and cannot be construed as legal authority nor provided or used for other purposes. Call your state Bar for an attorney in your area.

  71. Leah Dean TX – I would like to share some information which I received in writing today from The Bank of New York Mellon after writing them to advise them that Bank of America and their attorney’s wrote me numerous letters of the past several months telling me and I quote this response from not 1 letter but many stating the following:
    The current owner of the note is The Bank of New York Mellon fka The Bank of New York, as Trustee for the Certificateholders of CWABS, Inc., Inc., Asset Backed Certificates, Series 2007-2 which has an address of 101 Barclay Street – 4 W, New York NY 10286 and has a telephone number of (888) 999-0615. To the extent you are requesting production of original note, please the the Prior Response which provided a true and correct copy of the Adjustable Rate Note.

    Here is the response I received today from The Bank of New York Mellon via email mbs.property.inquiries@bnymellon.com

    Thank you for your recent correspondence.

    As per our database, you will need to contact the servicer for the address(es) listed in your email. The servicer info is as follows:

    Servicer: Bank of America N.A.
    Phone #: 800.669.6650/ 888.219.7773/ 866.781.0029 (option 3)/ 877.498.7226/ 800.669.2443

    The servicer is the direct and only contact who would have the information you are seeking. BNY Mellon is not an investor but a Trustee and therefore does not physically own the loan or the property. BNY Mellon does not have any say in how the property is disposed, loan modifications, etc. This is the responsibility of the Servicer.

    Thank you for contacting BNY Mellon.

    BNY Mellon Property Inquiries Global Corporate Trust – Mortgage Backed Securities Fax 212-815-8094.

    Let me also advise you that I waited for 5 days to get a response from them which they said I would have the information within 48-72 hours.

    Yesterday was 72 hours and I sent them a email and provided some attachments of Appointment of Trustee Documents and of course one of the documents was mine. These documents showed the many different signatures of Melanie D Cowan who is the Vice President of many different banks with also a robo signature from the notary Leslie Jo Lovell. Melanie D Cowan who supposedly works for Bank of America/ReconTrust, signs as Vice President for New Century Mortgage, She is also the Assistant Secretary of Mortgage Electronic Registration System, Inc signed 2-7-2012, Countrywide Home Loans 10/5/2011,
    Bank of America 4-19-2012, Deutsche Bank National Trust Company FKA Bankers Trust Company of California, National Association as Trustee for the holders of the Bendee Mortgage Trustee 1995-3 By it’s Attorney in Fact, Bank of America, N.A. as Successor by Merger to BAC Home Loans Servicing, LP (FKA Countrywide Home Loans Servicing LP) 6/26/2012, HSBC Bank USA, National Association, as Trustee for ACE Securities Corp Home Equity Loan Trust, Series 2005-HE4, by its Attorney in Fact, Bank of America, N.A. Successor by Merger to BAC Home Loans Servicing, LP (FKA Countrywide Home Loans Servicing, LP) 3/6/2012 and Argent Mortgage Company LLC By its Attorney in Fact, Countrywide Home Loans, Inc signed 8-16-2012 and much more, Nations Bank is another one.

    I would say that Recontrust has Melanie Cowan very busy signing all of these documents as VP for MERs and other Banks, and also making sure all of these properties somehow become the ownership of Bank of America without consulting the trustee to discuss loan modifications, or without actually having the promissory note, with the proper endorsements and assignments.

    I sent the Bank of New York another written email stating that I have been waiting for over 1 year through certified written letters asking The Bank of New York if they had any real interest in the property located at 2616 Mill Creek Dr., Pasadena TX and I finally got my answer. The Bank of New York Mellon has no note, nothing to do with modifications, and no interest in the property. Bank of America are liars and thieves and continued the wrongful practice of Countrywide Mortgage.

    Breaks your heart and makes you totally sick to your stomach doesn’t it. I think our Government better think twice about help the banks anymore. Face it, for every home in the USA that has been foreclosed in the name of The Bank of New York Mellon has actually been stolen from the Homeowner by the Banks.

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  75. Hello Neil,
    Wow, great response from the public.
    MY FORECAST for this year’s mechanism of loss.

    This year will be the most devastating year for economic loss in foreclosure, as the five year ARMS are maturing and will “kick in” with multiple adjustable interest rates, the premise, by which the subprime loans were made. “USUARY!”

    I am writing a pamphlet on Res Judacata for Dummies which will showcase Monday, May 20, 2012 before the judge in opposition of attorney’s exparte (scarcastic). I am still in court to save my home and fighting an unlawful detainer. The lawyer I hired, threw me under the bus in lack of knowledge for res judacata, raised by opposing counsel. I am not an attorney, I am a forensic loan examiner, and I tried to stave off the courts decision, but this decision worked as a bar to prevent the case from litigation.

    I filed a complaint in court during the end of 2011, which included a quiet title action. It was removed to Federal court by reason of mixed federal and state laws, my mistake on jurisdiction. Never the less, the defendant filed an unlawful detainer in superior court in retaliation of my action. So I filed a complaint in superior court strictly on state issues for due process, which was never heard, but removed to federal, as well. THe first case has been remanded, without litigation.

    THe Defendant’s counsel for the UD Case filed February 24, 2012 stated that the two actions filed were subject to res judicata. THe judge accepted his argument. THe counsel knew he had a “fish out of water,” when my attorney had no rebuttal. It was discovered after the fact, that my attorney’s practice is family law, and has never litigated UD Complaints. If the lure of $5,000. to litigate the case is the issue, this man should be disbarred. I am p’ode. Without a contract, he now wants $3,000.00 more!!

    While at the hearing, the issues of res judicata should have argued in dismissal of case. As you know, RJ means “already judged.” Counsel stated that because two actions were filed, the UD and a stipulation was the issue and court gave way to the opposing attorney.

    Res Judacata, “only” applies, if the action has been tried and judged,. PERIOD! It is not the filing of an action under the doctrine, it is the actual case tried in court.The stipulation we were forced to sign, is “cash for keys,” nugatory and ineffective, because it violates the 2012 Bench Guide for Unlawful Detainer.

    Everyone should investigate the Bench Guide of their state, because the affirmative defense in CA, is Section [31.12], which states:
    “Title is at issue. The litigation is between a plaintiff-lender and a defendant-homeowner, rather than between landlord and tenant, and title is at issue. Meir v.Superior Court (1983 139CA 3d 1044, 1049, 189 CR 138 (because of summary nature of unlawful detainer proceedings, it is unsuitable forum to try complicated ownership issues); Acuncion v. Superior Court (1980 108CA 3d 141, 145-146, 166 CR (eviction of homeowners following foreclosure raises due process issues and MUST be heard in superior court)”.

    I have received documents proving MERS is suspended by CA Secretary of State in 2004 and is without registration until 2012. NO foreign business shall conduct business in CA without registration. If anyone is in litigation, I will be glad to assist.

    Pamela Zander/Forensic Documents Research 760) 244-6248

  76. I thought that this was an extremely accurate depiction of the future as MERS is concerned They claim indemnification with their clients but here is what you can expect to come
    ← Some notes on Home Mortgage RobosigningHomeowners on bottom in mortgage noteholder scheme
    Posted on March 9, 2012 by Carl Shaw
    A large contribution to the home mortgage melt down is “SECURITIZATION.” The vehicle by which securitization begins is MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC. (MERS.) MERS is an entity with few assets and few employees.
    MERS sits as a gatekeeper at the DOOR of our nation’s complex mortgage finance industry.
    60 % of the nation’s mortgages name MERS as a nominee in the deed of trust/mortgages rather than the bank or original lender. This represents 4 out of 5 Mortgages and a total market size of 13.7 trillion.
    So just who is MERS?
    To avoid paying county recording fees, in 1993 mortgage bankers formed a plan to create one shell company in Delaware and called it Mortgage Electronic registrations systems Inc.
    The business model is that MERS is an electronic paperless database tracking ownership interests in residential mortgages. The system records the assignments of securitized notes from MERS members. Charter Member include GMAC, Norwest Mortgage, now Wells Fargo, GE credit, FNMA and Freddie. By naming MERS in the deeds and mortgages MERS would pretend to own all the mortgages in the country—that way, the mortgage bankers would never have to record assignments since the same company would always “own” all the mortgages. At the rollout in 1997 Mark Fleming, vice president of strategic partnership development at Freddie Mac and the agency’s representative to MERS. projected savings are at between $77 million to $200 million annually.
    Five major companies that have MERS-registered loans in their securitizations are Lehman Brothers, Bank of America, Norwest,(now Wells Fargo) Residential Funding Corporation [RFC] and Countrywide. The originators of these mortgages, invoke MERS’ name at the beginning of millions of subprime and exotic mortgage loan transactions. MERS is also the name that is used in the attempt to end so many of these same loans through foreclosure.

    Fitch Ratings Recent has recently placed operational risk down grades on various mega-servicers of securitized residential mortgage loans. It is interesting to note that Lehmans is now out of business. There is a rumor that Rescap may be forced out of business by Ally, and Bryan Moynihan has continued to seek a solution to Countrywide; bankruptcy is not ruled out.
    Where there is error there must be truth. Former MERS Chief Executive Officer, R. K. Arnold, has admitted in an article he wrote that appeared in the September/October 2010 issue of Probate and Property that the note was bifurcated (split) from the deed, as it was necessary to securitize it in the mortgage pools. When asked whether MERS expects financial institutions to update the MERS database regarding changes in loan ownership, the company’s CEO replied, “not so much.” Since MERS does not own the actual loan, doing so violates a long line of precedents that bar the separation of the note from the deed of trust

    What implications does this have for 13.7 trillion securitizations? Once a note and deed of trust are split and become unsecured, they cannot be reattached. The only way to reattach them is through a fraud. Again the person at the bottom of the pyramid suffers. The foreclosure sales transfer the note to the purported original lender who may not be the lender at all. There is a total inability to enforce payment in any meaningful way…i.e. the court process is so stalled and flawed that it will never be the stick that makes people pay.

    What seems apparent is that the chain of title in these mortgages is rife with defects. There are some shortcuts taken by the banks to cure the issue have led to the settlements, but the fraud in this area of the securities market is just now coming to light.

    Examples include Attorney General Beau Biden in Delaware has filed suit against MERS for failing to record perfected chain of title. Included in this petition are allegations that MERS has avoided by fraud and deception paying for recordation fees, which is estimated in his state alone to run into 100′s of millions of dollars. Similar suits have been filed in Texas and Ohio. JPMorgan Chase & Co., UBS AG and Deutsche Bank AG are being investigated by New York Attorney General Eric Schneiderman into mortgage securitization. Goldman Sachs Group Inc., Bank of America Corp. and Morgan Stanley and Royal Bank of Scotland have also been served.
    MBIA is suing banks for allegedly breaching representations and warranties on loans that are pooled into those securities.

    One of four of the original MERS private label offerors is bankrupt, with another 2 in some stage of extremis. CLEARLY THERE IS A SERIOUS ISSUE WITH The collateralized Debts, bonds and other securities that have been sold into the market rely on the notes and deeds of trust operating together for a secured interest in the underlying assets. Without such a secured interest it is a violation of the representations and warranty in the offering documents. Man question what is going to be the end result? Eventually there will be massive defaults and these defaults will send shock waves up through the top of the pyramid then reverberate back down….classic ponzi fallout. With the people who are getting burned, the investors homeowners, on the bottom.

    MERS will simply go bankrupt in an attempt to avoid liability
    Also there was an article in numerous newspapers about how many people are underwater which will only drive even more further the proposed settlement is a political farce there is an agreement only in principal and no true drafted terms therefore no agreement If there is to be an agreement the parties involved will simply write down principal amounts stealing from the trust investors Do your due diligence and you will find this to be true – To determine how far people are underwater is a relativelly easy task simply pass legislation that requires three distressed or lowest values REOs Short sales and foreclosures and use three top values that will give all a level playing field a range of values market forces will do the rest expect the Jumbo loan owners to impose their losses on Investors/Banks by walking away further driving down values and causing a downward spiral

  77. The Refinancing are all ABOUT Fixing Their Fuck Ups and Cheating You A Second Time. Tell Them To SHOVE their REFINANCE CONTRACTS Dig In Your Heals and OUT LAW the Bull Shit Foreclosures … HELLO You are being BAITED for a Second Round Of SCREW JOBS … The Original Contracts are TRASH they are BAITING you into FIXED Contracts so they can Continue To SCREW YOU http://www.facebook.com/groups/342722552426562/

  78. My home was foreclosed on April 2011. The sale documents were falsified, signed by people with no authority to sign. The title was in National City Mortgage name, but PNC transacted the sale and my home end up in the hands of Fannie Mac.

    Despite my numerous request for a principal reduction and/or modification, PNC and its underwriters strung me along on a roller-coaster of forbearance and trial-modifications. Finally, I was told to vacate my home by the lower courts in April 2011. I did. However, I know that this transaction was illegal. What can I do about it. I want PNC and Fannie Mac to pay! I am a real estate lawyer, but I become somewhat savvy about my issue. But I do need guidance at this point.

    It CAN be fought and won!! Takes a LOT of persistence and fight, not easy, but it CAN be done. Of my group of about six or so, not one of us has lost a home (average time about 3-5 years) and we have received two without prejudice dismissals, which we’ll take it as a victory! Bottom line – FILE COMPLAINTS, FILE COMPLAINTS, FILE COMPLAINTS – on the notaries, judges, attorneys, clerks, bailiffs, you name it, if they step out of line in the least way, PROPERLY and thoroughly demonstrate and document where they crossed the line, and what law, code, rule, statute, etc., they broke, and be persistent in follow-up. Do NOT just complain about how you feel, be precise in what law, etc they broke. Don’t worry if your complaint is denied KEEP AT IT, as those officials that do not properly act can be held liable for their failure to do their jobs.
    @ SUE
    EDUCATE yourself as thoroughly and as quickly as possible, and if you MUST hire an attorney, do it for as short a period of time as possible while you learn how to defend yourself and assert your rights. YOU have the most vested interest in your case, and YOU have more power in that courtroom than any attorney as you are there by right, they are there by privilege, but you must know how to assert your rights, because if you do not, they will steam roll you very quickly. Sites such as Neil’s, 4closurefraud.org, foreclosurehamlet.org, Matt Weidner, and check out Dylan Ratigan (not as much legal stuff but good to know and understand what is going on) are good for starters. Network with some local attorneys as much as you can, not always easy to do this, if your in Florida, West Palm Beach is a great place to make contacts with, even if you have to drive several hours to get there! OPEN YOUR MOUTH and talk to people, DO NOT be embarrassed, as that help the banksters win, and keeping you intimidated! Find other people close to you that you can learn from and educate yourself. Go to the courtroom as much as possible to educate yourself in what goes on, then look at the rules of court, I’m sure you’ll find they violate all kinds of stuff, but get to know procedures as best you can as well. Keep your chin up and don’t be discouraged!

  80. My husband and I received a Freddie Mac Back up Hamp Loan Mod.after many months of dealing with IndyMac/One West Bank. We sent in our packet in August 2010. When we had it notarized by a Notary of 10 years at the local UPS store. She stated she could not sign the notary form provided because it was illegal for her to sign in Ca. where we live although she signed and Notarized the California All-Purpose Certificate of Acknowledgment. We sent it in on time and paid 2 payments, when we called to pay the 3rd payment we were told we were denied and we received a letter stating we were denied due to the packet not being notarized. Then we had to deal with sale dates and BK 13 filiings. They sold our house of 17 years at a foreclosure auction on May 26 2011. I contacted the Attorney Generals Office and filed a complaint (We also have Robo Signers all over our documents used to sell our house: Brian Burnett, Erica Johnson Seck) because of the complaint IndyMac/One West escalation specialist Joseph Kiaune called and told me the bank had erred and he was going to request a rescission of the sale and give us our loan mod back. Since we cannot trust the bank we retained an attorney she was in contact with Joseph Kiaune he said after an investigation into our case he found strong grounds in our case for a request for a rescission but he was not able to disclose what specific wrongdoing he had found. After a month of stalling our attorney called the investor who bought our home and he said he was never contacted by anyone from the bank and would have been happy to recsind the sale. After that we were evicted from our home after fighting in the Unlawful Detainer Court and lost. We filed a Lawsuit against the bank and Mers. We just found out that a recent precedent which affects our case says that a Loan Modification even if payments were sent and accepted is not valid if not signed by the lender. On the Loan Modification Documents there is no place for a lender to sign. The courts now we are informed are ruling in favor of the banks and our case is not as strong as it was before the precedent. Can anyone give me some information about this type of case? Thank you Marie Doud

  81. My loan was with CW – bought by BOA. My husband passed away in August 2009 at the age of 55. It has taken 2 & 1/2 years to blow through everything we had saved in the past 32 years. I am broke & cannot make my mortgage payments. I have applied for a remodification & it seems to be a big runaround. I am at the end of my rope & don’t know where to turn. I hate the thought of losing everything we worked for – but it seems I am headed that way.
    Any advice?

  82. Anyone find out that their lender title insurance policy was never funded at settlement?

  83. I have to admit, I feel bad when I hear people asking for an attorney. I was in a court room and happened to hear a case about “squatting” the other party, the bank, the ones who brought the case against the person did not even show up, but the judge granted them a continuance because they weren’t there. Where in the heck does that ever happen except for a bank. I honestly believe we are all just sucked up in the self help crap so some of the middle educated class can get a bit ahead of those who are not as educated. There really is no way to keep your home, haven’t heard of anyone really. Blogs that claim, but no, I am beginning to believe after several years of following, there is absolutely NO hope, none what so ever, ever. Never has happened, never will.

  84. Mr. Garfield,

    Could you please advise if you know of an honest attorney so I can either file a quiet title action of if I have to re-open my bankruptcy. Some of my ex’s debts, incurred by him after the disolution of our marriage, were attached to a 2nd mortgage which I am alleging is false. When I refinanced my home, I did so with a predatory lender, and that 2nd mortgage was in there and I did not know about this until years later after he filed chap 7 and I filed chap 13. I’ve paid this debt over and over and over.

    I live in Shreveport, LA

    Bicka Bannon

  85. I am looking for any information on cases that have been filed where the loan remained as an asset in a trust long after the sheriff sale to a tird party purchaser. The servicer foreclosed in their name only..no trust is listed. I have all of the investor reports showing my loan/note as an asset in the trust. The servicer created an allonge and a assignment of mortgage and note (yes both) for a mere $200.00 in order to bolster the look of ownership with the court. Any guidance is more than appreciated.

  86. Hi Neil, your post feed is not showing up today. Is it my computer or yours?

    11/21/11 – 7:00 am Central

    Rob Harrington
    founder/National Wamu Homeowners Support Group
    850 259-6422

    PS, the national wamu group webside has been compromised. Having trouble getting it back online with Ning. Found out a few days ago that Ning is really owned by Glam Media. Glam was funded in part by BoA in a 50M offering. Glam’s ex-executive is Robert Tas, now a JPMorgan Chase digital executive. Wall Street stepping in to disrupt free speech on the internet?

    PSS – the link I set up to livinglies years ago was shut down by another party. I never authorized it. We had a “coup d’tat” as I was unilatterally shut out to the website administration keys… many strange things going on…. Strange days indeed.

  87. We bought a home w/ FHA loan in Oct 1995. My business went south and we fell behind on our payments in 2003. We did not loose our home, but borrowed money from family to completely catch up the loan and get it out of forclosure proceedings. However, that didn’t matter, FHA sold our loan as part of the “single family joint venture loan sale SFJV 2004”. Our loan was changed to conventional, a large amount of fees were added to the balance, and it has had 2 services America’s Choice and Select Portfolio that continue to add fees and retain any payments paid above the minimum for their own use. I now owe more on the loan than when I purchased my home in 1995, even though I’m current on my payments. I can’t get any help from the servicer nor FHA.

  88. Hello,

    I was wondering if you accept guest post for your blog. If you do, I would like to submit a few. I’m a recent college graduate, with an English major, looking to build out my portfolio. I can write on a wide variety of topics and am sure you would be happy with the quality. Please email me back if you are interested. Thank you for your time.

    – Kathleen Hubert

  89. Has there ever been as case whereby a mortgage was deemed an unlawful mortgage?

  90. The United States of America Department of the Treasury Comptroller of The Currancy has signed a consent agreement #AA-EC-11-18 Dated April 13 th 2011 with US BANK . When you read this consent order it will restore some of your lost faith in gov officials. All the US Banks board of directors signed it because many sever charges were about to be leved against them. I think it is the straw that will bring justice to us all with regards to all the fake documents and fraud on the courts. it even covers their third parties including lawyers and servisers like SN Sevicer. Everyone shoud read it then contact Sally G Belshaw deputy controller of Large Bank Supervisor and tell her that US Bank and SN servicer and their attornies are still submitting false documents and commiting fraud on the courts. Get your lawyers to use this consent order to stop all forclosures because the bank is not in complience with the consent agreement. Us Bank is avoiding procecution by agreeing to correcting many of the problems that we are all facing in court. Contact me if you want to join a nation wide class action against US BANK. Our list is growing very fast. Ray Shelton shel3r@aol.com or call me at 352-274-8467

  91. Neil or Admin:
    Please contact jamaclaypod@comcast.net asap!


    I put in password, won’t let me. What do I need to do that I am not doing?

  93. Howdy to all of the wonderful ‘Livinglies’ Readers,

    We just got another WIN for one of our Clients (well, that is what the Client calls it). It was really encouraging for me, personally (because we did some good work but I feel, a tad empty because the Client’s chose to take a negotiated settlement but for the terms they were offered, their feelings of stress and the cash that they have had to exhaust, during this process… I can’t say that I blame them. They got a far better deal than what they had before: 50 percent of the original mtg, 4.75 fixed, 40 years, 12 month payment Holiday). If you think that, I am wrong for feeling the way that I do; please send me your comments. You see; here’s the thing. If a lender offers you a modification or a settlement, more than likely, you have a good case and they stand to lose. That is the ONLY time the lenders will negotiate with you… … … except for BOA… 

    I have a close family member who works for Cole Taylor Bank and I wanted to warn ALL of those people who are, thinking about financing a new home or refinancing that…
    COLE TAYLOR’S MORTGAGE section is being fronted by ABN-Amro (my former employer) and is being ran, ever so stealthily by Willie Newman (former CEO of InterFirst Wholesale and President of ABN-Amro)…
    From me to you; those guys are back to, business as usual. I know FOR A FACT THAT, Cole Taylor is Securitizing and selling ALL of their NEW mortgages/Closings.
    I’ve seen their internal documentation and have been given a pretty reasonable description of, how they are doing it…
    Do you ever stop, some days and wonder if, “I (understood you) am in the wrong line of work”.

    As of late, we have been taking some, very innovative steps, in assisting Home Owners who have chose to FIGHT. We are currently running some pretty interesting and fruitful communications with Bank of America. For some reason; the idiots at Bank of America choose to continue to reply to, some of the most inflammatory statements, affidavits and QWR’s that we are able to concoct. THAT IS VERY GOOD FOR THE HOME OWNER. If you want the banks/lenders to give you their souls; just place the request within, cleverly worded statements… and then it dawned on me, as to why I can’t keep a meaningful relationship… I KNOW THE ANSWERS, BEFORE I ASK THE QUESTIONS and with that said, you must know WHAT to ask and HOW to ask it (nobody is going to give you anything so. Learn how to get it or HIRE PEOPLE who, KNOW HOW TO GET IT… like, lil’ole me:)

    We don’t just “GET IT”… and what is “IT” anyways??? What WE DO GET… are WINS.
    Stop dealing with the rookie paralegals, bogus modification companies and attorneys who have ONLY AS OF LATE, began being retained by clients…

    GIVE US A CALL OR SEND AN EMAIL. I personally have 13 years experience in Residential and Commercial Finance (I know where some of the bodies are hidden, so to speak) and have become familiar with the processes that, the banks have instituted. We don’t look for modifications. We look to save your house. We work to assist you by, gathering evidence for discovery and building your case (before you even get to Court). We work with ONLY qualified, licensed, in good-standing Attorneys… who have multiple WINs.

    May God bless you and yours. Talk to you soon.

    Danny Moss

  94. Neil or your administrator:

    Please contact seniorauthor@yahoo.com – at your convenience.

    I do not know how to reach you. Thank you.

  95. Any one know an attorney in Michigan who is on the same page as Neil about the no money owed on mortgages


  96. Email wrong before. As ling as I’m here;


  97. HERE IS HOW WE STOP THEM – EVERYWHERE! I’ve got a fantastic strategy and I need some help. Shut down the secret trials in Louisiana is step one. Spread the word!!


  98. My Husband and I hired an attorney to consult with us on our business financial situation. He finally advised us to file chapt 11. We own several rental properties that were all in various stages of forclosure. Our attorney advised us to wait until just before the foreclosure sale date to file. During this time we moved to another district about 5 hours away. We discussed with our attorney what district to file in and were assured that we should file in our new district. We concurred and filed chapter 11 in Jan. To begin with, our attorney decided to appear by phone at our first meeting of the creditors. “The phone did not work and we were left to be represented by an attorney from as associate office who knew nothing of the case and was a trust attorney,unfamiliar with bankruptcy law. Next, One of the banks, Suntrust, filed a motion for relief of stay on one of the properties and again our attorney failed to appear and sent an associate to appear on his behalf. The motion was granted even though the property was part of the plan to be submitted. Our attorney contacted us by email that this had happened and assured us that this was highly unusual and he would file a motion for reconsideration. Soon we had learned that the court was threatening to dismiss our case because reports and paperwork had not been filed. We have an accountant who prepared and sent all require reports on time and they just fail to file them with the court. The court filed a motion to dismiss. Needless to say, we were very upset and had even consulted with other attorneys to try to switch. We were told that they would not be able to be paid via the bankruptcy estate.. Our attorney had become more and more inaccessible an after numerous calls and emails, he promised to appear to argue the motion in our district and meet with us to lay our a plan moving forward. This was a large firm who has offices in our district as well (south Florida). We scheduled to meet there at 8 am prior to the hearing at 9:30 am. We arrived and waited for over an hour until the secretary informed us there was a phone call. It was our attorney, who said they had reached an agreement with the court to comply and again, an associate was sent to appear. We since found our that the motion for reconsideration of stay was never filed and the sale was proceeding. We called and emailed as the sale date approached. Finally, 3 days prior to the sale, we were informed that a motion had been filed but probably would not be heard before the sale. This is a short term rental that had guest booked for months in advance. It is rented as a luxury property and thousands of dollars of deposits may have to be returned. We were in a dilemma as to what to do and were advised to move every thing out if “it made us feel better”. Still have not gotten an answer on how much time we have if the buyer takes possession. Still trying to get though to our attorney. Yesterday the house was sold on the courthouse steps for $150,000 less that what we had offered to pay. The buyer came by to see it after the sale and spoke to my husband. We have not move the furnishings out as we have rentals booked and are still hopeful that we can get the bankruptcy court to void the sale. Our plan is scheduled to be heard on September 1st and has already been submitted. Loss of this property would effect this. We are in such a quandry about what to do on all fronts and are so nervous about finishing up with this attorney. It seems we have no choice in that regard. I would appreciate any advice you could offer regarding the sale of the rental property and if we have any chance to keep it at this point. We had wanted to contest validity of mortgages but could not get our attorney to proceed on this.

    Suggestions on how to proceed would be greatly appreciated. Thank you!

  99. To the person who wants BOA to take the house. I’m not an attorney or anything but I do know that if you file Chapter 7 Bankruptcy and in the Intent document……say “surrender house”

    Thank way you avoid the possiblity of a deficientcy judgment if they foreclose and the whole debt will be legally discharged. I myself will be doing it if I get into trouble challenging my servicer if they ever decide to foreclose on me. I too am behind in payments and unemployed. I am not holding my breath believing my servicer is going to file foreclosure on me anytime soon, they know I investigated the broker and entity I refinanced with and that I proved their written statements in letters to me were dishonest….unemployed yes but I used my free time well

  100. Hi Does anyone have any suggestions about how to get BofA to foreclose quick? We haven’t paid since Oct. 2010. We just received a debt validation notice that shows the debt is owed to: CIG HFI 1ST LIEN MORTGAGE. We thought it was Bank of America. What should we so and do you think this has anything to do with MERS? The amount we owe seems correct. Suggestions? We just want them to take the place ASAP. We have avoided all phone calls after we told them in Dec 2010 that our intent was foreclosure(we told that to a telephone customer service agent-we did not discuss options)

  101. Mr Garfield,

    Thanks so much for your support to us the “poor debtors” you are doing an has been doing an incredibly job, helping the most needed class of our society, the ones who have no other way to defend against predatory lenders and an abusive judicial system that with a few honorable exceptions looks like the Judiciary at least in the trial level and some appellate level are and want to be only the rubber stamps of the banks without no other concern of fairness, trust in the Judicial system, etc, please provide to the people of California where most of the injustices are now happening in these stressful time. additional ways to defend their rights, Now the courts in a total lack of sense of equity are just trying to help the predatory banks and defend them passing over the Constitution (a lot of them with Judgements “Not For Publication”), and passing over any other basic principles of justice, totally pre-prejudiced and biased against Home Owners, who knows what else are the motives of their lack of basic common sense of justice and Ethical Principles (not using and not allowing to use the basic evidence rules in court to proof that the predatory lenders BANKS have not the posetion of the Note and that without the note in the hands of the improperly substituted foreclosure trustee in most of the cases, the Foreclosure sale is void not voidable please see: Huckell-v-Matranga-99-Cal-App-3d-471-160-Cal-Rptr-177-Cal-Appeal ). Also the Foreclosures are void with MERS purporting to transfer the rights of the deed of trust only without the promissory Note as the law underlying the decision of Judge Buford -One of the few Honorific Judges in CALIFORNIA (Bankruptcy) – In Re. (Raymond Vargas 396 B. R. 511(2008) ), All the Home owners have to object the foreclosure sale on these basis and with any others they may find, and hold the trustee sale officer liable if he allows the wrongfull foreclosure sale to be concluded, and fight from the bottom of your heart in court, also rescind your loans under TILA before the 3 years of the status of limitations expire and offer tender the money OR PROPERTY.

  102. Here’s a thought of mine for you. Pondered it about 6 months ago, but wondered if it has been touched upon yet. What happens to the property tax obligation once the Auction has been completed. In my research, I noticed a lot of properties were listed as a new sale for $100 to the Trustee. For the state of CA, taxes are based on purchase price. Is no one paying property tax during the period from the auction to the new fraud sale?

  103. Hello,

    I was just working on a finance project for a social community site and while researching on finance topics, I came across your site (http://livinglies.wordpress.com) too. I was impressed with vast array of valuable and unique information. I am associated with many financial sites and communities like ACCION USA, RB international finance LLC, Oak View Law Group as their staff/guest writer and I write articles on various topics of Finances. I am impressed the way you have presented your site.

    Hence, I would like to write a guest post for your site and guess what that also without charging you a penny 🙂

    It would be great to be a part of a wonderful site like yours. I am sure it will add some extra points in my credentials. The article will be 100% unique and will be published only on your site. If you have any topic in mind, please let me know and I will start working on that topic.

    Looking forward for a positive reply 🙂


    Stewart Smith

    (content writer/editor/)

  104. Heres a new twist. I refinanced my home with Challenge Financial Investors Corp on 6/6/06. Shortly after I received a letter of the same date advising of servicing rights to Wells Fargo to commence on 8/1/06. Reviewing my current and past credit reports, Challenge Financial Investors Corp as Lender on Deed and Note, does not show up as a creditor. I found one notation that they pulled my credit report in 5/06.
    Also noted on my credit reports is Wells Fargo Home Mortgage for a mortgage opened 6/06, two months prior to commencement of servicing rights.
    Since Challenge Financial Investors Corp ws never listed as a creditor and through research of US Patent shows them as mortgage broker with trademark and doing business as CFIC Home Mortgage; there was never a debt with them. Both entities committed fraud on me. No debt/creditor….I’ve been paying Wells Fargo for a debt that never existed. To make matters worst Wells Fargo attempted to prove the debt by an allonge with two hole punch marks in the copy but the Deed and Note do not have two hole punch marks. Additionally it is endorsed without recourse by a Matthew Richards VP of Challenge Financial Investors. Through Secretary of States for Florida and Connecticut, never did a VP by that name exist. WHERE DO I OFFICIALLY REPORT THIS FRAUD

  105. Horvath v. Bank of New York Mellon


    When such instruments, such as a mortgage note as in the current case, are endorsed in blank, their free transferability is well established, and although parties are free to contract around these basic provisions, when they do not this principle stands. The Fourth Circuit additionally upheld the well settled principle that interests in deeds of trust accompany the promissory notes that they secure. Although separate and distinct documents, notes and written agreements executed as part of the same contemporaneous transaction will be construed as forming one contract and, thus, the transfer of the note necessarily involves the transfer of the underlying security. Finally, the Fourth Circuit notes that Virginia law allows parties to freely transfer securities, such as a deed of trust. However, recording such transfers in the land records relating to the property at issue is merely voluntary, and failure to do so does not result in a break in the chain of title.

    *** Basically, chain of title in Virginia doesn’t really exist. You don’t have to record anything, you just have to have the document in hand, and its considered legal and they can do whatever they want.

  106. Does anyone know Bank of America address to mail a qwr?

  107. Neil,

    Please read the following, and let me know if I have any hope of getting my Los Angeles back from a third party after a foreclosure by Fannie Mae & Bank of America.

    I’m a female with my California real estate license. I have been trying to save my condominium in Los Angeles from foreclosure via Bank of America’s President, BARBARA J. DESOER.



    Here is one of many recent letters I wrote to Barbara J. Desoer before I losing my Los Angeles condo.:



    A class-action lawsuit against Bank of America alleges that “Bank of America customer service workers regularly tell homeowners that modification documents weren’t received by the bank when in fact they were.”

    That is exactly what happened to me save for documents that Bank of America default specialist PHILLIP OCHOA reportedly chose not to put into the bank system. He stiffed me, closed out my file, and claimed that he couldn’t reach me by phone when I called him repeatedly one afternoon from Bank of America in Beverly Hills at Beverly Drive and Santa Monica Boulevard from 2pm to 3:30pm

    Beyond Phillip Ochoa, who I hope to name in a lawsuit, I faxed all of the requested documents from a Bank of America branch in Los Angeles at Robertson and Wilshire Boulevard via the branch manager, Matthew Turner. Since Phillip Ochoa never put my docs into the bank system, BANK OF AMERICA HAD REPEATEDLY CLAIMED THAT THE DOCUMENTS WEREN’T RECEIVED. THAT’S WRONG! A JOKE! In fact, Bank of America Branch Manager Matthew Turner made a call on my behalf this past Friday to Benjamin Diaz, a mortgage service manager for Bank of America located in Brea, California. Matthew Turner specifically told Benjamin Diaz that the requested documents were faxed every single time from the Bank of America branch at Robertson and Wilshire in Los Angeles. Hopefully that will hold up in court. I have the fax confirmation proof on paper via the Bank of America fax machine printout.

    On Friday I spoke with a woman in Bank of America’s Office of the President. I gave her multiple fax numbers that I have been given by various Bank of Employees since March. WHAT HAPPENS TO ALL THE FAXED DOCUMENTS FROM TROUBLED HOMEOWNERS? THEY GO DOWN A BLACK HOLE? ARE SUMMARILY DISCARDED? NEVER PUT INTO THE SYSTEM? THEN THE BANK SAYS THE DOCS WEREN’T RECEIVED?

    The class-action lawsuit also alleges: “Bank of America also encourages borrowers to default and fails to properly credit payments under trial modifications, treating homeowners as delinquent, according to the plaintiffs. One former Bank of America employee who isn’t named recalled seeing homeowners’ financial records manipulated in the bank’s computer system, according to the complaint. The complaint alleges, “BOA’s general practice and culture is to string homeowners along with no intention of providing actual and permanent modifications.” “Instead, BOA has put processes in place that are designed to foster delay, mislead homeowners and avoid modifying mortgage loans,” according to the complaint.”

    I know that the ultimate decision about foreclosure comes from the investor, but I repeatedly tried through Bank of America to get a loan modification so I could afford my mortgage payments. Bank of America should come clean to the homeowners who futilely make calls and fax documents to the bank, only to fall through the cracks. AGAIN, WHERE DO ALL THE FAXED DOCUMENTS GO THAT HOMEOWNERS FAX TO THE BANK? ARE THE BANK EMPLOYEES TELLING THE TRUTH THAT FAX DOCUMENTS DON’T COME THROUGH? HOW COULD IT BE THAT SO MANY FAXED DOCUMENTS TO BANK OF AMERICA AREN’T RECEIVED?

    My Los Angeles condominium was foreclosed on May 5th — a condo for which I put a down payment with inheritance money from my father. If there is even a remote chance I can reclaim the condo and start making payments I can afford, please let me know.



    Thank you.

    Linda Stuart
    (310) 954-7305

  108. Thank you so much for your website! Thanks to your site, I just received approval from Bank of America on a rescission of sale. I just need approval from the investor and bank-owned owner Fannie Mae which Bank of America claims they will handle. I live in California. Do you have suggestions on how to work with Fannie Mae? Do I follow the same process as I did with BoA? Will this be harder to do than dealing with BoA?

  109. My email is malibumtg@gmail.com

  110. I’m currently in a CH 11 BK . I have a AHMSI Deutsch Bank first on a home and we are litigating the 1yr occ requirement on the deed of trust. This one yr occ is on most of these securitized loans .
    I have one case Roemer out of DC that pertains to this
    Does someone out there know of additional cases.

    I’d appreciate it .

  111. Hi Neil:

    My wife and I were on a conference call with you and Mike M. a week or so ago.

    I had told Mike that we were going to pass on this project but that with the passion you are bringing to it that it has to be successful.

    I am working with an attorney who has a radio show in New York on 970 AM with the topic of the foreclosure crisis and what the government and the banks did and are still doing to screw homeowners.

    First I was wondering if you would be interested in coming on as a guest for 5 minutes or so to talk about the crisis and a little bit about what you do.

    I also wanted to find out how this attorney could get listed in your ‘Find a lawyer who gets it” section.

    You can email me at exetertraining@aol.com.

    Mike Haltman

  112. @Joanne

    Not many people post on this particular thread regularly.

    If your attorney can not find any other way to do SOMETHING to stop that Tuesday auction, then get a skeletal Chapter 13 Bankruptcy filing done in your BK court before the auction occurs. That will give you an automatic stay. You will need to get a BK attorney hired (possibly the one you already have can do it). The attorney may be able to get the basic filing done online for you.

    There is a timeline that you will need to follow of what all has to be filed with the court to keep the stay. Meanwhile, you will want to dispute that mortgage. Instead of just fighting to get a modification, you need to challenge that mortgage. Put it down as a disputed loan in the BK filing. Then start demanding that the opposition show that they have a valid assignment. The foreclosure must also be done by the one with standing.

    If your attorney has not questioned the standing of this new entity that is being used to avoid modification, he does not know what he is doing.

    You need to find an attorney who KNOWS what they are DOING. Any attorney who simply thought he could help you attain a modification is either uninformed or a scam.

    In some states, the BK trustees and judges are taking a look at the proof of claim that has to be filed by the creditors. If your ‘lender’ files a proof of claim, look for a complete chain of title. You will need to have this all checked out and verified by some experts. You may need to file an objection to the proof of claim before you even know for sure if there is fraud.

    I am NOT an attorney. Look for more advice on other posts on this site.

  113. I’m losing my battle on Tuesday and searching for any ammunition to help me. Went to court-appointed mediation on Wednesday and was blind-sided by the plaintiff’s attorney.

    I had requested a HAMP modification. Vantium Capital, my servicer, took TARP funds and as I understand they are obligated to take a look at my situation. I now also see there is a new Principal Reduction Program, which if I qualify, they must offer (which they did not). I hired an attorney to stop the sale (at a cost of $2500), as neither the servicer or their attorney would return our phone calls.

    A judge ordered the sale be stopped and ordered them into mediation with us. We have been paper-gathering since October and finally got to mediation this Wednesday, only to be told that the property had been sold to an investor who did NOT take TARP funds, was NOT participating in HAMP, and under no obligation to modify our loan and thus, the sale will go on this Tuesday. Is this legal to transfer the property in order to circumvent the judge’s ruling? I’m going to lose my home on Tuesday, but do I have grounds for a suit for damages?

    I was a responsible buyer. My business fell apart in this financial crisis. It took my husband two years to get a job. Now, we can afford a mortgage, but no one will give us one. That’s why we wanted a modification. I put $250,000 down on my home, and I will never be able to recover it.

    Today, I checked the county records. I see the original MERS mortgage. I later see an assignment between the original lender and MERS (even though it was a MERS document?). And, I see no further assignments.

    Any thoughts as to what I can do?

  114. Neil — I’m a writer with Harper’s working on a piece about MERS. I’d like to interview you for the article.

    Cheers and thanks,
    Christopher Ketcham

  115. Does anyone here have Joseph J Cariola a MD notary who works for Wells Fargo in Frederick Co MD? If so, please contact Mr Garfield, as I would like to exchange information thanks!!

  116. I am helping a friend fight a Wachovia/wells fargo foreclosure in Maryland. The trustee/plaintiff employee signed the note ownership affidavitt as an agent of Wells Fargo. One of the Trustee/plaintiffs notorized it. Seems like this is illegal. While technically as trustees this notary is not a benificary to the loan, this foreclosure mill law firm makes money both on the foreclosure and from the foreclosure sale as well.

    In any cause most likely Wachovia securitized this note (early 2008) and Wells has no standing. A staffer in the law firm is unlikely to have any reasonible information and belief as to who owns the note.

    Unfortunately, this case is in the final stages and past discovery. I suppose it might be possible for a show cause order to ask the court to have the plaintiff present the actual original “wet ink” note or allow a representive of the defendant to view it.
    I have little faith the our local judges will grant such a motion.

    I am lookin at approaching the grand jury to have them subpeona a few wet ink notes on some of these foreclosure cases.

    I have seached for Wachovia SEC filing to find the trustee who might be the true holder but haven’t had any luck.

    Any help you could provide would help. Would you be interested in testifying before our grand jury?

    I also have foudn the likely owner of two paid off 2003 auto loan note that USAA told us the lost. The fact that some holds two promisary notes that were under UCC supossed to be returned really bothers me. While it is unlikely a judge would allow these to be enforced, I am afraid all these misplaced notes are in someone’s federal Reseve account as an asset and being used to create money out of thin air unlawfully.

  117. Good morning:

    Do you have a way to receive new articles automatically by email? Thanks.


  118. I am looking for an attorney to work on contingency on a foreclosure case that has strong merit. I am a victim of UD in favor of the plaintiff, Fannie Mae (3/24/11). The title is cloudy and needs to enter court immediately as a separate lawsuit. The court is in Southern California. Please refer a great attorney that has a history of success with this type of case. Mike.

  119. I contacted (posted) this website on March 10, 2011. I have not received any responses to that post..could you please inquire regarding same or if anyone reading this can help my situation.

  120. Your site is full of great info. My question is how do I find a lawyer that can help me in the state of Nevada?

  121. Hi, I hope I am the one in Washington you responded to on March 2 thank you. This is kind of hard to understand due to the legal terms. I am making progress. Can you possibly help me complete my pleading? It has been hard to an attorney who knows about this subject. I am running out of time a few weeks left mabey
    my email brendawho@msn.com

  122. Neil hang in there man.

  123. Do you have the ability to assist me in putting together a Quiet Title suit here in Colorado? My original Lender was Option One and they are no longer in business here. No other party has filed anything in my county records claiming an interest in my property.

  124. I am representing a seller in a short sale and he had a countrywide originated loan. Bank of America is now demanding the seller picth in $25,000.00 to the MI company. As I recall the old Countrywide loans did not have mortgage insurance. I have asked Bank of America to produce the policy and they have said nothing back.

    I think they are lying and this loan never had mortgage insurance.

    Please help or advise if this could be true? I belive that is why Countrywide originated all of these loans as they had no MI

  125. I have an approved FHA Short Refinance Loan. I am not late on my payments because I have to be current in order to qualify. My servicer/lender won’t approve because of nondisclosed LPMI. My mortgage loan was sold to the lender on the day of my closing and it is this lender who took ownership of my loan before midnight on my closing date that purchased the LPMI 6 months after my closing. In my opinion, that violated 1998 HPA. I have an Allonge to note with no date that shows the transfer took place. The Assignment of Mortgage shows the date of my closing. I need a lawyer to help shake my loan free of these predators so I can finalize the FHA Short Refinance loan before the program disappears. WHAT CAN I DO? I NEED HELP?

  126. Hi Neil,

    I hope you are doing well, I don’t know if you will see my message but I will do it any way hoping that some body tell me how to communicate with you.
    I need help really bad with my home I already have a Unlawful Detainer and I don’t want to give up. What should I do??? Thanks for your help.

  127. JW-
    Thanks for that information, It is imperative this NOT be missed by all. I will notify whom I need to and let them know I know and I blog.

  128. http://apps.leg.wa.gov/billinfo/summary.aspx?bill=5275#documents

    The Washington State Legislature is currently considering the Orwellian-ly described Substitute SB 5275, “Protecting and Assisting Homeowners from Unnecessary Foreclosure.”

    Along with the meaningless, and completely impossible sections regarding mediation, and the seeking of other alternatives (remedies which no party of interest has any right or legal ability to engage in) is this gem (found on page 4):

    “7 (a) That, for residential real estate property, . . . . . . . . . . . . . A declaration by the beneficiary (bank) made under penalty of perjury stating that the beneficiary (bank) is the actual holder of the promissory note or other obligation secured by the deed of trust shall be sufficient proof as required under this subsection.”

    I don’t understand how substituting an actual record of a transaction, a note, with a declaration by an employee of a bank that may or may not be the holder/owner is going to facilitate protecting the property rights of homeowners in Washington State.



  129. He Neil,

    I own a mortgage information site and I get requests from people all the time looking for ethical foreclosure help. Do you have any resources for locating such companies?

  130. Hi,
    I have been emailing and leaving messages trying to figure out what I need to do after ordering the combo package. My card keep getting chaged and I do not know what to do, or how to go about it. Would you PLEASE reply to me?

  131. It is really REALLY frustrating to even think we have to educate them, judges and who ever else appears to make decisions. For the level of respect their words get, THEY should be doing a lot of research, all over!!

  132. My names are mrs.Anita johson.I am a single parents.I needed an urgent loan for business and clearing of debts.I met a reverend who directed me to givers loan firm who granted me $50,000 without stress.Since then i have decided to publish them all over for those who require loan to see.I have been scammed not ut i met them my story changed you can contact them via tinaloanlenders@gmail.com

  133. You have a great blog – what a great resource! I spent years watching crooked mortgage lenders, real estate brokers, appraisers and title companies just take awful advantage of people – even the ones I worked for were no better! Sadly even in St. Louis, its tough to educate judges, clients and certainly opponents on title chains, clouded title matters, and proper loan documentation etc.

  134. I have a story i want to have posted on your site. It concerns court corruption in scottsdale arizona.
    Cant find your email

  135. Mr. Garfield, I filed my case (Mortgage Fraud) in United States District Court, Central District of California and the Judge refuse to sign Lis Pendens. However, he/she is not following the rules and I would like to know if I can resubmit a Lis Pendens and change judges etc. If you have a telephone number I would like to speak to you for 10 min if you have the time to get some ideal of what action should I take etc.

  136. Keith,

    I just hired a new attorney in the Los Angeles area. Shoot me an email at canceledcwmods (at) gmail (dot) com.

  137. Hello all,

    I am in Southern California the Los Angeles area and I am looking for an attorney who “gets it” and understands Neil’s philosophy and process to the tee. I am currently in court action as Pro Se but like Neil says feeling in over my head. Also, have a friend who is fighting and Unlawful Detainer when company’s tactics he hired proved ineffective. Does anyone know of good attorneys in the area??

  138. Neil, can you write something about home equity lines of credit?
    Do the banks sell these off and do mortgage back securities etc.?
    As a homeowner with a HELOC can we use the same defenses we’d use for the 1st and 2nd purchase money loans?

  139. Thank you for this site and your precious time you are spending on this topic.

  140. Here is a question I have not seen asked. Assuming a large number or perhaps all of the Residential Mortgage Backed Securities and Collateralized Debt Obligations attain a value of zero dollars, for the apparent reasons, what happens to the values of the so-called insurance, the Credit Default Swaps ?

  141. Neil I was denied modification on my home after making trial payments religiously for 15 months.I fear that my home will soon go into forclosure.I have done some recording of UCC, chargeback,bill of exchange ,public notice declarations and lawfull protest. However, I need the help of a lawyer to help me with the rest of needed filings.Please refer a lawyer for arizona.I am desperate.Please help.

  142. BAC as servicer for Bank of New York Mellon trustee, postponed foreclosure sales for 10 days in Utah, but has now proceeding with foreclosure sales.

    BAC’s moratorium on foreclosure sales was just a PR stunt.

  143. I am desperately seeking an aggressive attorney, licensed in Washington state who can help us with foreclosure. We have a clearly predatory loan which was sold off through at least three different companies and the final lender has cheated and snuck to get us to the end of the rope in the hope that we will fail.

    Please help. I need a referral. Urgently.


  144. lance young,
    I too am looking for an attorney in the So Cal area. I have a Loan through ASC (Wells Fargo) originated by BrooksAmerica who went out of business forced by State of Cal. Corp. a year after my loan, but now filed under default for US Bank blbla security 2007-1 . Please find me at usjustice4all on utube to send a message of your details.

  145. I have a Fannie Mae – MERS loan and need to go to court soon. Is it possible to see samples of the below product?


    Thanks you.

  146. Is there an attourney/ expert witness that is in the know with Neil’s process in the Southern California-Inland Empire region, that someone has used in the past???

    I am in need of someone rather quickly while in the midst of a pending court case.

    Lance Young

  147. Can anyone tell me how to respond to posts when no contact information is left? I follow Neil and have connected with a number of you working together on this mess we are in, by leaving my name and number in the post. Thanks Robert Ponte 860-599-5557 robert@the-hudson-group.net

  148. I am looking for an attorney who gets it in Northern California. I have a foreclosure sale scheduled for August 17th.
    Michael Hammer 808 328-9137 iammichaelhammer@hotmail.com

  149. or call my toll free number:

    Call 877-I-ASK-LEGAL (877-427-5534)

    Please ask for Steve Carney/
    Foreclosure Defense Consultant

    and Fight the Banksters!!

  150. Michael Hammer,
    Before considering hiring any attorney, check out their history on the CA state bar site Timothy Mccandless has a record of not filing cases. Also, by I’ve hear a little rumor that he has a serious backlog of cases that have not been filed again. It is heresay but with the prior record he has, you should beware.

    Also, re Michael T Pines: Even when stated in writing that a case would be filed, said case was not filed prior to the auction date, even with months of time to prepare and file the case.

  151. Michael Hammer,
    Go to: http://timothymccandless.wordpress.com/about/

  152. To Michael Hammer and others posting requests for an atty who gets it in their particular state- this is a good time to cite the specifics in your case- who the servicer is, who the originator was, where you stand, what has been filed so far, have you gone to the courthouse and retrieved all pertinent documents, and then the thousands of readers here will give you their best information based on personal experience. Given the facts, we will all help in direct correlation to our knowledge, but collectively can move you along in the fight, DON’t GIVE UP! Best wishes and Godspeed, Ian

  153. Can anyone recommend a good foreclosure attorney to help me with my sale that is scheduled for Audust 17th in Northern California?
    Thankyou, Michael

  154. Phillip Taylor in Oklahoma. Can anyone provide any knowledge of this gentleman? His practice is in the Tulsa Metro Area.

  155. For an Attorney that cares about all families in foreclosure for Rhode island & Massuchusetts. Call the office of George E.Babcock Esquire at 401-274-1905. A attorney that gets it! Free consultation & a budget plan for every family! Call Kim & set up consultation.

  156. For Tricia B:

    What do you know of Michael T Pines? Did he fail to act?

    Was he supposed to send requests for information, but the package of requests was never sent? Did he promise to file suit but nothing happened?

  157. Joanne- Thank you for referring Christine. I met with her yesterday and she was wonderful! I am moving forward and taking action. I really appreciate your response! Once all is said and done, I will let you know how it panned out.

  158. Tara, I believe Christine could help you a lot and you are close, please let me know how it goes.

    Not just watch but email her and she is super nice, professional and concerned.

  159. A forensic audit has been completed on my mortgage. I have the results but I am not sure if it’s anything worth while pursuing. I have defaulted on my mortgage -last payment since Dec 2008. I have been actively trying to modify my mortgage from a pay up front loan modification company (should have known better, they are no longer and they got my money), to working with my lender my self, to NACA. I am fortunately still in my house. Everyday I worry, that they will foreclose. The bank has advised they have postponed the date. The mortgage audit showed violations- Violations of Federal Statutes, Missing Mortgage Broker agreement Disclosures, Notice of Right to Receive copy of Appraisal missing and Booklet on closing costs not provided within 3 days of application. I am also missing from my closing documents Itemization of amount financed, good faith estimate & controlled Business Arrangement Disclosure. There is also only partial of all state required disclosures. I do not know what any of this means. The audit was done through NACA but I have not had any success with anyone explaining anything to me. I was told to contact an attorney- which financially may not be feasible. Is there anyone able to give me any insight. I am in the Phoenix, AZ area. I am trying so hard to keep my home. I have a first and 2nd mortgage. Thank you.

  160. Hi Neil,

    One thing that’s soorly missing from your wonderful site is a “printer-friendly” feature. I found this plug-in for you. It would be great if you could have someone install it.


  161. Jeff,

    The best advice I can give you is run for the hills before you contact Michael T. Pines. He’s a fraud.

  162. Wanted to comment for Jeff Clanton, I am here in Ventura County, just a working homeowner in the same boat, However I have a degree and was taught many of the things going on and now can put them into perspective. Please let me know how I can get ahold of you, only found one of you in Oxnard. use my name above to send me a private message on twitter.
    Hope to hear from you

  163. http://www.huffingtonpost.com/rj-eskow/resident-evil-are-underwa_b_521169.html

    Richard (RJ) EskowConsultant, Writer, Policy Analyst
    Posted: April 1, 2010 02:28 AM
    Resident Evil: Are Struggling Homeowners as Immoral as the Big Banks?
    Do homeowners who are underwater on their mortgages deserve to lose their homes? That’s what finance commentator Barry Ritholtz says, in a post called “More Foreclosures, Please.” Ritholtz must have been channeling his inner Rick Santelli when he wrote that “the boom and bust saw irresponsible and reckless behavior by lenders and home buyers alike,” adding that mortgage relief programs for homeowners reward those who were “reckless, speculative, and foolish” while punishing those who are not.

    It’s not reasonable to put Barry Ritholtz in the same category as Santelli, of course. Ritholtz is a highly informative, widely quoted writer on economic issues. Santelli’s the frat-boy trader turned CNBC host whose rant about “rewarding the losers” got a cheer out of some morons on the Chicago Mercantile Exchange (and started the Tea Party movement). But Ritholtz puts financially beleaguered homeowners in the same “moral hazard” dumping ground as the banks who wrote their mortgages, suggesting that both of them “overused leverage, disregarded risk, (and) ignored history.” Is that really fair?

    After all, what kind of information was available to the average home buyer during the last decade? How would the average reasonable person have decided whether to buy a home or what kind of mortgage to use — in, say, 2004?

    They probably read articles like the one published in February of 2004 in USA Today (“America’s newspaper”) with the headline “Greenspan says ARMs might be better deal.” “Overall, the household sector seems to be in good shape,” said Greenspan, who added that adjustable-rate mortgages might be the right choice for many homeowners. Greenspan enthusiastically promoted the new-style mortgages that later played a big role in the meltdown: “American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage,” he said.

    Greenspan wasn’t just Chairman of the Federal Reserve at the time. He was the man the press kept touting as a genius, the one they called “Maestro.” Were homeowners guilty of a “moral hazard” for listening to him? Should they face foreclosure because they weren’t reading Nouriel Roubini or Paul Krugman or Joseph Stieglitz?

    Ignorance of the law is no defense, but ignorance of contrarian economic thought circa 2005 should be. If Greenspan and Geithner and Paulson and all the talking heads on CNBC and the other networks couldn’t see the bubble, how could the average home buyer?

    The truth is, most people buy homes because they need a place to live — and because for generations they’ve been told that buying a home is preferable to renting. Our tax code is structured to encourage home ownership, and the ownership message is reinforced in everything from news reporting to popular culture. (Think Miracle on 34th Street.)

    And generalizations about irresponsible, speculative borrowing overlook the fact that the nation’s housing problems vary widely by geography. Some areas aren’t having a housing bust:

    Is a homeowner in Glens Falls, NY any more “reckless, speculative, and foolish” than one a couple of hours down the road in Poughkeepsie? Poughkeepsie experienced a boom in prices followed by a bust, while high-performing Glens Falls experienced a boom with no bust. West of Glens Falls, my home town of Utica did pretty well too, as this chart illustrates:

    It probably helps that Utica experienced its financial collapse a long time ago, so housing prices were already unusually low.

    Here’s something interesting: The areas with stable housing prices had a much lower percentage of nonprime loans than the country as a whole. As the report’s authors mention, the explanation for that probably “runs in both directions–an increase in nonprime lending led to more significant home price appreciation, and more rapid home price appreciation led to a rise in nonprime lending.”

    In other words, it was a cycle: Risky loans drove housing prices up, and climbing housing prices led to greater availability (and selling) of risky loans. That’s not a borrower problem — it’s a pattern of lender behavior. It’s a sign of banks driving a speculative frenzy as a “get rich quick” scheme, then leaving the borrowers with the wreckage.

    Ritholtz makes some excellent points about the weakness of HAMP (the Home Affordable Modification Program), and its tendency to reward banks for their very real “moral hazard.” The biggest problem with the revised HAMP program isn’t that it’s too generous to troubled homeowners. It’s that it’s a “pretty please” program that only requires lenders to consider lowering the principal on home loans (or, in the Orwellian language of the program’s Fact Sheet, “servicers will be required to consider an alternative Modification approach” – “required to consider” being one of those self-contradicting phrases George Carlin used to rattle off, like “jumbo shrimp.”)

    But the idea of principal reduction — whether it comes from HAMP or individual lenders like Bank of America — is a reasonable one. Most reductions in principal will still leave homeowners owing more than their house is worth, which should give them their just portion of punishment for any “moral hazard.”

    “More foreclosures, please” is exactly what we don’t want. Ritholtz is understandably concerned about the unfairness of “rewarding” homeowners who got in trouble in a way that keeps prices higher for those who behaved responsibly. But he paints an overly rosy scenario of bad actors being driven from their homes like poltergeists, so that new and vibrant families can move in — families that can afford the mortgage and have money left over to spend in the local economy. The real solution is going to look less like a ghost story and more like Tim Burton’s Beetlejuice, where the ghosts and the living learn to live together happily.

    The millions of homeowners who got in over their heads have already suffered a lot. Let’s get them some help. And let’s keep the focus on the people who caused this problem: The bankers who got rich off these schemes, and the politicians and regulators who let them do it.

    Richard (RJ) Eskow, a consultant and writer, is a Senior Fellow with the Campaign for America’s Future. This post was produced as part of the Curbing Wall Street project. Richard blogs at:

  164. Hi Neil and Friends, I’m in immediate need of an attorney that could take a case Pro-bono. My lender is Wells Fargo. I’m located 60 miles north of Los Angeles in Ventura county CA. I need someone that’s not going to leave me hanging in the middle of procedings. I need a good attorney Thank you much for your Help

  165. Hello, Can anyone help direct me to a good attorney
    that can take a Pro-bono case. I certainly need help ASAP. God Bless
    Doe anyone know anything about Michael T. Pines attorney at law.

    Thank you so much
    Jeff Clanton

  166. Does anyone have any feedback on US Lending Audit in Florida?

    They are the only auditors so far who have said they will look at more than just the closing documents. That’s what we must have.



  167. Hi

    I am in need of competent legal help. I’m in foreclosure. I have had a loan audit performed with a number of TILA violations. A subsequent QWR was sent to the lender. Prior to that I exercised my right to a loan rescission. Copies of all of this have been provided to the OCC and a case number has been opened. Even though the lender has acknowledged receipt of these, they have not responded in any way. The bluntly told me they would not discuss a loan modification. I live in Wa State. Any suggestions you have would be appreciated. Thanks


  168. My home was foreclosed and sold. I filed a complaint on Dec 3, 2009. The bank filed an Unlawful Detainer, today it was ruled against me.. Do I have any legal recourse? They will not even tell me when the Sheriff will serve me. I have been bombarded with so many legal documents, motions to dismiss etc. I know nothing of the laws. Before the trial Wachovia’s Attorney flat out told me that this was a done deal, and there was nothing I could do, but vacate. Is there anything that can be done? And if/when I’m tossed out what happens to the complaint I filed with the district courts. I’m in Stanislaus County in California. Thank You

  169. Hi,
    I really liked your blog! It’s very usefull.

  170. Hi,
    Can you provide more information on this?

  171. Sale date is January 15th and I found out the following information about my case after a paralegal took the time to look through my papers.

    Quality Home Loans, Inc of California never got a license to make mortgage loans in Florida, therefore the mortgage is unenforceable in Fl.
    The assignment from MERS to Citibank was unlawful because MERS had no Power of Attorney to assign the loan in Florida, it is only a Registered Agent in Florida, Also the assignment was done a month after Citibank filed
    Lis Pendens, so Citibank had no standing to file suit. I should have been entitled to a dismissal without prejudice based on that alone.
    Quality Home Loans, Inc was dissolved 9/26/2009 so it no longer exists in Florida, therefore it can no longer assign the unlawful mortgage.
    Decision was made, and now I don’t know what to do to stop the sale. Can anyone help me? Should I go bankrupt, and have the Federal court see what is happening? I’m not a lawyer, and I don’t know what if any options I have at this point.

  172. We bought our home in 2001 through Cendant Mortgage. We refinanced in 2003 through MortgageIT (MERS clause in paperwork), and then once again in 2005 through Ameripath Mortgage (no MERS clause in paperwork). Over the past 8 years, we’ve received multiple notices from different parties taking over the collection of monthly mortgage payments. Unknown to us until this week, sometime between 11/2001 and 02/2003, Lehman Brothers had our mortgage.

    After refinancing through Ameripath Mortgage in November 2005, the Vice President of MERS filed a Satisfaction of Mortgage in January 2006 for MortgageIT, even though MortgageIT never retained or serviced the loan.

    In August 2007, we got behind on payments. At that time our payments were going to Homecomings Financial. In November 2007, we were served with a foreclosure suit (complaint) by “U.S. Bank National As Trustee” (Plaintiff) which was represented by Florida Default Law Group (FDLG) under the “lost/destroyed” Note premise. (I read recently that FDLG is under investigation but have not confirmed this statement.) In the complaint, the Plaintiff in one breath stated it had possession at one time of the Note and Mortgage and then turned around and indicated it never had possession of them. The Note and Mortgage were not filed on the same date as the complaint. We had never even heard of US Bank National As Trustee, and did not possess one single document with that name on it! My wife and I attempted to represent ourselves (big mistake at that time). All our requests for discovery were ignored by the judge and Plaintiff. We argued some of the same things being argued currently in the courts that are actually having success; however, in our case, the judge (R. James Stroker, Osceola County) denied us due process and equal protection, ignoring us at every turn. The case lingered in court for almost one entire year. During the foreclosure case, we were notified that GMAC was the new party to submit payments to.

    All of a sudden, in late 2008 – almost one year after filing the complaint – the Plaintiff filed a motion to dismiss the count to re-establish a lost/destroyed Note, and magically produced the (alleged) original Note and Mortgage to the judge, with no accounting as to how the documents were obtained. We had requested to have access to inspect the originals, as stipulated by Florida law (UCC), but Judge Stroker ignored our repeated requests. Florida law dictates that parties must produce the originals for inspection upon demand of the party of whom payment and performance is being demanded, and the party can refuse to make any further payments “without dishonor” until the other party complies (F.S. 673.5011). Upon receipt of the (alleged) Note and Mortgage, the judge issued summary judgment against us and scheduled the sale of our home. Out of fear of being evicted onto the streets, we reluctantly entered into a modification agreement with GMAC (not US Bank National As Trustee). The name of US Bank National Trustee did not even appear on the FIXED RATE LOAN MODIFICATION AGREEMENT. On that document, and on everything else, we were careful to exercise our right under F.S. 671.207 by making a written reservation of our rights by our signatures, waiving none at any time. After the modification agreement with GMAC, the judge dismissed the suit “Without Prejudice” so that the bank can foreclose on us at anytime in the future (the judge’s words). We filed a timely appeal of the judge’s final order but it was dismissed by the 5DCA because we had entered into the modification agreement in the lower court before filing the appeal. An attorney told us had we not entered into the settlement, we probably would have won on appeal.

    We just learned that the AOM (Assignment of Mortgage) was not filed until months later “after” the foreclosure complaint was filed. The foreclosure suit was filed on November 14, 2007; the AOM was not filed until August 8, 2008. Five days later, on August 13, 2008, the Plaintiff submitted the motion to dismiss the count to re-establish lost/destroyed note, and then shortly thereafter submitted the (alleged) original Note and Mortgage to the judge, who immediately ruled in favor of US Bank. Not one time did US Bank National As Trustee ever reveal or name in its complaint or any other filed motions the party it was allegedly acting as Trustee for. Upon reviewing the AOM filed in 08/08, the assignment was from Ameripath Mortgage to New Century Mortgage. US Bank National As Trustee does not appear on the AOM. Furthermore, though US Bank claimed it submitted the original Note and Mortgage to the court, and court records indicate copies were to be substituted for the originals and the originals returned to Plaintiff, to date the (alleged) copies of the (alleged) originals are not showing in the County records. Plus the bank highly inflated the amount owed in the foreclosure complaint but we didn’t think to challenge the amount at the time.

    We are behind on payments again, and expect to be served with another foreclosure suit anytime after January 1, 2010. We’ve been offered countless advice on what to do, including suing US Bank to getting a certified forensic loan audit to filing a quiet title action. Unfortunately, it seems everyone wants to charge an arm and a leg to help those that are already struggling financially.

    Any worthwhile advice?

  173. How can I find an honest attorney to help me in Chicago, Illinois? Please help! Thank you!!


  174. Hi Neil & Eveybody:

    I am an attorney and I will file a complaint in which Wa Mu committed fraud when its loan officers submitted the Loan Application in 2007. The problem is Wa Mu was acquired by JP Morgan Chase in a hostile take-over. So, If I sue Chase for fraud, the element of “intent” is not there. If I sue Wa Mu, it has been gone! I need a theory that holds Chase for the wrong-doing committed by Wa Mu. Can Neil or any one help?
    Thank you very much.

    Vince N.
    (408) 828-8078

  175. I host several title insurance continuing education courses and would like to expand into other disciplines. Would you consider developing come of your course content for online delivery? It will make you content available 24/7 and once the course is developend and available online, your work is over except for collecting the fees. Please let me know if you are interested.

  176. Hello Mr Garfield,
    I need an answer foer the following question:
    Lis pendens filled, FDIC closed the bank United, Officers can’t assign the aassetts anymore, Assetts are sold to a new bank of the same name, lawsuit wthout changing anything is going forward…..

    How can the assetts being assigned / sold when they are just sized and not legally assigned by authorized officer of the bank ???….

  177. For those of you who have not signed the petition, please take a minute to do so. Please send it to all of your friends, family, colleges, etc. Thanks. There is power in numbers.

    If you are ready to fight for your home, and battle the fraud and injustice served to the American people, send your loansafe.org screen name, state, and email address to: junior.erin@gmail.com or if nothing else please sign these. We need real change!! God bless America, Catherine


    Together we can make the difference to help ourselves, and our fellow members. We are organizing for mass action!

  178. This is an outstanding article about manipulation of the stcok market and CDO and mortgage debt and fraud, fake stocks and “lost notes” affidavit for fake mortgages. (that’s on the last page) i

    “Wall street naked swindle”


  179. EVH please call Robert at 860-599-5557 there was no contact information about your federal case. thx

  180. Hello,

    I was just in the federal court in the Central District of CA. for a hearing on my case regarding Producing the Note and the Judge slammed me and told me that I had no standing. The Judge would not even hear anything regarding the UCC codes and/or told me straight up that I was wasting time, the whole producing the note deal is just internet hype, and to pack up and get out of my house!

    What do I do in a situation like this is there anything that can be done? She granted the motion for relief of Stay, and told the attorney’s for Chase bank that they can Foreclose as soon as the end of the month. October 31st.

    I followed everything to a T and can send anyone who can help the Motions, and Adversarial Complaint I filed.

    Please Help is there anything that can be done in this type of situation?

    Thank You!


  181. Mr Neil,

    [If I could find your email address or contact info to send YOU the following PERSONAL statement, I would do, as some things I am about to say I regret having to do it so publicly. IF POSSIBLE, WILL YOU MODERATE / TRUNCATE this post, and allow public to read what
    might me help toward my getting help. ]

    Thank you for your kind affirmation with regard to my “Open Letter To President Obama.” I took the time to read your site to be acquainted with who you. Also, I was pleased to learn that your seminars are being done by you –for at this time, I do not believe anyone is more qualified than you to teach materials regarding mortgages. I DEEPLY REGRET THAT I LIVE SO FAR AWAY, but I couldn’t afford to come either.

    I am writing you in hopes that you will recommend me to a lawyer, and that you will do what you Louisiana. If you have not read the 2 posts on the my http://www.lawgarce.org website, please click the links on my President Obama letter to see an overview of what Wells Fargo, Freddie Mac and foreclosure fraud inflicted. I don’t have your means, nor your knowledge, but I do okay, although I am not a lawyer. Also, prior to becoming Hurricane-Katrina-displaced, I taught foreclosure defense (one on one) to lawyers in New
    Orleans. Now I am blacklist from Louisiana employment in the legal field; and because of what debt collection fraud cost me, I barely can put food on my table.

    In addition to coaching lawyers, I helped everyone who I could. The real estate extortioners did not like my raising people’s awareness of where to find laws, and various factors possibilities to save their homes; and possibilities of lack of standing. (It is a bittersweet thing at this era that
    those very issues concerning wrongful foreclosures I began advocating against more 5 years ago, are now the recognized mammoth social epidemic. I was crucified for speaking out; no one
    helped me.)

    After, reading what you said about me ‘getting it’, I decided to entreat yours and your audience’s help. Succinctly and res ipsa loquitur, in my absence on May 2005, debt collector attorney Adcock had a simulated auction of my home by means of foreclosure through the identity of GE
    Capital Mortgage Services despite that GE Capital became defunct on October 25, 2002. Because I opposed the fraudulent confiscation of my home, I was subjected to horrific judicial reprisals. To this date, I am not safe to relocate back to New Orleans.

    Some of the REPRISALS:

    My estranged husband’s divorce lawyers was the designated Curator Ad Hoc for the fraudulent foreclosure. I was arrested when I appeared to file my lawsuit for Conversion and TRO; opposing lawyers made me loose 2 different jobs with a law firm and others changed their minds about hiring me; behind my back my former lawyer filed a motion to dismiss the deputy defendant in my Unfair Debt Collection lawsuit, whose false sheriff service cleared the path for the curator assignment. In order to enable the deputy to not file his own Rule 12(b) motion, the deputy’s lawyer devised a motion for my former lawyer to sign and file; he told me the judge gave him no choice. Once a sheriff came to my residence and wrote down license plates and vehicle VIN numbers for a vehicle parked in front my door.

    By the way, I had owned my home 7 years prior to marrying this domestic abuser who ruined me financially. I HAD EXCELLENT CREDIT and NOT A SUBPRIME LOAN –and had never paid my mortgage late, sometimes 2 payments at a time! I mentioned this for people who think all defaults occur because people get loans over their heads, and so that it can be clarified that judicial corruption was the impediment to my earning a living and to justice. When I saw where things were headed, I petitioned the court for spousal support and to make him pay the amassed
    debts, but the same Curator lawyer for the foreclosure repeatedly saw to it that I never got to have the required domestic court hearing on support, debts, etc. The horror to which I was subjected in Family Court, the repeated denials of justice, and multiple pleadings MISSING from the
    record of my divorce case has left me worse off than when I filed to get justice from this domestic abuser whom I found out after marrying him is so dangerous, he pleaded guilty for intentionally running over his 2 wife with a car.

    Not only my case, but people’s documents came up missing from the record after Katrina –even though no flood damage took place on the 4th floor record room. The civil clerk of court who helps steer cases to judges of her personal selection, and aid state tort cases to be removed to federal court is responsible for oversight to court records.

    In other words, where my adversaries try to portray as a deadbeat trying to beat the system, they conceal that they cost me 2 jobs in the legal field, they oppressed me mercilessly, and judicial collusion consumed all of my time and money as I struggled concurrently as pro se litigant in
    family court, bankruptcy court, and federal court! And then I had the matter of the abusive spouse whom the court put me in greater danger in using me to antagonize him. In place of justice, I was (and am yet) tortured for standing up for my rights. The facts and proof is in plain view on my website. Is it hard to connect dots between Louisiana’s ranking as number1 for women murdered by men http://www.ksla.com/Global/story.asp?S=11187069, and corruption?!

    The Bankruptcy Judge granted “lift stays” motions AND informed me that he was not requiring a “proof of claim” in my case; he would not allow me to tender my Chapter 13 payment; and because he told me I would loose my freedom if I protested the foreclosure, I refrain from my
    adversary petition wherein I would have asserted claims such as the note being an “unsecured” debt. On 3 different suits –to ensure no justice for me, rather than random allocation of my new lawsuits to court dockets, the New Orleans clerk of court steered all cases I filed to same selected judge –whose law clerk had me arrested. The clerk signed an affidavit admitting to doing it!

    Additionally, because I filed my Conversion lawsuit days before Katrina arrived, I became exiled from New Orleans. Therefore, I was OBLIVIOUS THAT MY state law TORT lawsuit for Conversion had been forum-shopped and removed to federal court –despite that at various times
    while displaced 6 hours from New Orleans, I sent to the clerk’s office via FedEx various pleadings with filing fees. The clerk kept my $$ and docketed my pleadings to allow me to think my case was still in state court. I discovered the removal when I went to see about my mother.

    Also at a Show Cause hearing (I have the transcript) the Civil Sheriff who, despite awareness of contested bogus foreclosures, fraudulently conveyed deeds to foreclosure attorneys, threatened he would get me for fighting their system. Invasions of the privacy of our home and other
    maffia-like tactics inflicted on us were applauded .

    Throughout my website, I discuss and supply proof for the things I am writing here. My belongings were put on the sidewalk 3 days before Katrina hit. After I learned that Wells Fargo’s actions blocked me from getting Hurricane Katrina rental and various other assistance (furniture,
    clothing) from FEMA, I started my website on judicial corruption and foreclosure frauds. BUT MORE than this happened to me –and it is still happening! I need to clear my name so I can be employed in law, and I would like to recover from damages. Also, as a pro se litigator, my costs
    were between 10 to 30 thousand dollars; and my very frail mother -who with lived with me prior to Katrina, is separated from me and back in New Orleans. But it is too unsafe for me to reside there!

    Please know, I am not only trying to get help for me, I am trying to get the FEDS to investigate what goes on in Louisiana. My heart breaks for the scores of people who contact my website seeking help for wrongful Louisiana foreclosures and various extortion crimes. One of the
    persons for whom I did what I could, was fighting in Iraq while trying to save his parents’ property! THERE ARE NO LAWYERS for us here! Even if a lawyer wanted to help, the judges tell the lawyer how the judges want the case to turn out. (I noticed a comment on your website about our Congresswoman Landrieu receiving 2 million dollars for the real estate lobbyist!)

    What do I want a lawyer for? Inter alia, I want to prosecute, a void ab initio action, to recover all the losses and unconstitutional things that happened, as well as put a damper on Louisiana land grabbing and persecution of people who resist extortion. Moreover, I want to clear my
    name; I want to live safely and not have to worry about invasion or false police report, etc.

    This statement is already too long, but I wanted to provide enough facts so you can conclude how desperately I need help. Would you PLEASE tell my story to law firms, and direct their attention to my website? Would you PLEASE, PLEASE, PLEASE, come to my aid in the way of being
    concerned about what happens to me, and cease not to be on the lookout for a lawyer to represent me? As you can probably tell, I would not be a burden due to the fact that I possess documents and transcript and other proof for every issue I aver, and I am very well-versed in Consumer and Bankruptcy laws. Not only that, I would make any lawyer a worthy employee and / or consultant for Louisiana foreclosures –and I can compile probably hundreds of cases for which can bring in revenue to any firm.

    Mr. Neil, because you commended me, I believe you have an idea how hard it is for me to do what I do; and that you know the courage, sleepless nights, and tenacity I must put forth –ALL BY MYSELF. Please make my story more public to the masses, as well as a law firm. YOU WILL NOT REGRET HELPING ME, and I will not forget others.


  182. Me too; Rapoport Law Group in Ft. Lauderdale. I live in Central Florida – it was very VERY difficult for me to find an attorney who got it. Most atty’s told me that I was only buying time, that I had little or no recourse, that I was fighting a no win battle.

    Thanks to Neil and all of the contributors on the site, many of whom have given me the courage and inspiration to fight to the end… which I will. I have lost almost everything (job, marriage, family) and this pile of blocks and sticks is the only thing I have left to fight for.

    I believe the Rapoport Law Group can help folks in Florida and in other states as well. The attorney and staff members are of high caliber, knowledgeable, responsive and are extremely good at what they do!

  183. Sue,

    I know a great lawyer in FL email me at Malibubooks@gmail.com

  184. oops,
    Sorry, wirting mistake. I mean I studied many foreclosure defenses strategies as I was about to defend myself pro -se . Then I found an excellent lawyer who gets it.

  185. Sue,
    I am in Florida. My house is in foreclosure. I did a lot of foreclosure defense strategies and read this website frequently. I was about to go pro-se as I don’t have much money for lawyer fees. Fortunately I found an excellent lawyer Mr. Graham tel 305-445-9185 who is also a trial and appelate lawyer. He is knowledgeable of Foreclosure Defense strategies and his experience as trial & appelate lawyer is a plus at court hearings . His fee schedule is reasonable and affordable. Please check his website foreclosurelawmiami.com .
    I now feel better as I know I am in good hand.
    I share your worries and I wish you good luck. We are in the same boat.

  186. I’m looking for an attorney in Florida, preferably Jacksonville, that can defend me. I’m in foreclosure and keep trying to work out modifications with IndyMac. Each time I’ll send the payment in “BEFORE THE DUE DATE”. They either tell me I broke the plan or 3 times they said that my certified funds didn’t reach them on time. Now I’m told that since we broke 7 out of 10 plans they won’t help I offered them all the money that they didn’t cash and was told to forget it…. I need help.
    Any advise would be great as well as a name of a good lawyer.

  187. Christopher Dean,
    I am not an attorney. You need to contact an attorney immediately. This is a common tactic used to take all of your money AND your house. They are relying on the fact that you cannot afford an attorney so they take advantage of you.

    Here are the lawyers that get it (4 in Arizona):


    There are attorneys who can help from other states also.

    Dan Edstrom

  188. Mr Garfield,
    I am here in Arizona and only found out about our house going to auction after the fact when the new owner came by the day after the sale to tell us he now owns it and we need to get out. I was in the middle of the modification process and had already paid GMAC over $10,000 because that is what they told me I needed to send them for all the fees and some of the mortgage payments. I kept checking on the modification and kept getting put off to call back the next day.
    Is there any hope of saving my home here in Arizona after the sale date?

  189. How can i get listed on your lawyers who it get page? thank you. CEL

  190. This site has me baffled and I’m not sure this is where to post this question: I have been navigating the craziness of trying to modify my loan for 7 months. I am about to submit a QWR letter. Is there a way I can hire someone to do a forensic loan audit BEFORE I commit to thousands of dollars in attorney retainers?

  191. Hi Garfield,

    I do affordable high-quality wholesale mortgage audits. How can I associate myself with your organization and offer services to the attorneys that get-it?

    My audits start as low as $225 each. And I have a 5 business day turnaround.

    Dwight Maxwell

  192. I have been following this and commend your site informing people of their rights among other valuable foreclosure information. i will link to you on my site and blog. peace Robert

  193. Lisa, Alina, et al. This is all very impressive and helpful. You guys are FUN to keep up with!

    Anybody know how well TACIT PROCURATION works, and more important how judges receive this discovery tool?

    Saw Luis Molina (Ny) use it (TP) down here in Miami, but sensed it had no impact on the judge.


  194. I have a quick procedural question on Requests for Admissions. Can opposing counsel request an extension to respond?

    I believe I know the answer but need confirmation. Thanks.


  195. Don’t let the b**stards grind you done, good luck.

  196. lasalle bank tried to get out answering requests for admissions by filing an emergency motion, and stating i was trying to harass annoy, and increase their costs, and my request was unreasonaqble as there was 175 requests, here in pa one can ask as many requests as one wants- i opposed the motion, showed up in court and the judge did not buy their argument- they now have 20 days to answer.
    gobb@ptd.net if you have any comments or questions.

  197. Opps. Submitted too soon.

    FOR: Ignored requests for Admission in Florida (Fla. R.Civ.Pro 1.370 (a): Motion to Deem Admissions Admissible & quote: “The matter is admitted unless the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter within 30 days after service of the request.”

    FOR: opaque answers &/or dodging objections to admissions request (Fla. R.Civ.Pro 1.370 (a): Motion to Determine Sufficiency of Answers or Objections & quote: “The party who has requested the admissions may move to determine the sufficiency of the answers or objections. Unless the court determines that an objection is justified, it shall order that an answer be served. If the court determines that an answer does not comply with the requirements of this rule, it may order either that the matter is admitted or that an amended answer be served”.

    Sorry for being so long winded! Hey, what can I do? It’s how this legal stuff seems to work.

    Lisa E. (Pro Se, Florida)

  198. Thank you LivingLies for the informative (though quite above my head) Homeowners PodCast last night!

    First of all, to JEFF down-thread: Of course your Plaintiff wants to “re-argue”. They’ve said all they have to say, they lost and now………crying waah-wah-wah! You are a pioneer! Go forth and continue to cut a swath for us all to follow behind!

    Regarding Admissions. (Specific to Florida. Google “Your State Rules of Civil Procedure Admissions” for others).

    1) Feel free to copy and file in your own cases. Please remember to replace my plaintiff’s name with yours & change Plaintiff’s attorney name & address in #13.

    2) Plaintiff has30 days to respond per Florida Rules Civil Procedure 1.370 (a)

    3) If Plaintiff ignored outright: File a Motion to Deem Admissions Admissible (pursuant to

    4) If Plaintiff responded with a litany of mumbo-jumbo objections: File a Motion to Determine the Sufficiency
    of Answers or Objections.

    Admissions Requested
    1. Admit or Deny that U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 is not domestic to the state of Florida.
    2. Admit or deny that U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 has not registered as a business entity with Florida’s Secretary of State or his agent.
    3. Admit or deny that U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 is not charted as a bank in Florida.
    4. Admit or deny that U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 never at any time took possession of the original promissory note obligating Defendant and/or alienable in this instant case.
    5. Admit or deny that the alleged copy of the promissory note submitted and attached to the named plaintiff’s complaint is not a true and correct copy of any promissory note which U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 lost or destroyed.
    6. Admit or deny that the alleged copy of the promissory note submitted and attached to the named plaintiff’s complaint includes no allonge showing any assignment to named plaintiff U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2.
    7. Admit or deny that no paper showing any assignment of the promissory note alienable in this instant case to named plaintiff U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 ever existed.
    8. Admit or deny that U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 is not in possession of the account and general ledger statement, authenticated by a competent fact witness, proving a deficiency owed by Defendant.
    9. Admit or deny that absent possession of the account and general ledger statement, authenticated by a competent fact witness, proving a deficiency owed by Defendant, U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 cannot prove a deficiency owed by Defendant.
    10. Admit or deny that it is the practice of U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 to charge-off and sell notes in arrears after collecting insurance on the outstanding amount of indebtedness.
    11. Admit or deny that after U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 charges off and sells evidence of indebtedness, the commercial paper illustrating the duty between the mortgagor and the mortgagee or assignee becomes legally uncollectible.
    12. Admit or deny that U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 is not the real party in the interest in these proceedings.
    13. Admit of deny that U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 has not contracted with Ashleigh L. Politano, of the Florida Default Law Group, P.L. Attorneys at Law 9119 Corporate Lake Drive, 3rd Floor, Tampa, Florida 33634 to represent U.S. BANK NATIONAL ASSOCIATION, JPMORGAN MORTGAGE TRUST 2007-S2 in these proceedings.

    Good luck all!
    Lisa E. (Pro Se, Florida)

  199. More power to you sir. A timely return

  200. This is the shady NEW practice that lenders are doing to beat produce the note…


  201. I am afraid our mortgage lender pulled a new procedure to beat Produce the Note. We were arguing our case as Pro Se in GA, even got a TRO (non judicial state so we had to start the lawsuit). The bank produced an assignment from MERS as nominee for American Home Mortgage to Deutsche Bank with GMAC as serving agent.
    The assignment was of course produced because our argument was that it would be a violation of GA foreclosure statue laws if the assignment was not recorded and the foreclosure was allowed to proceed.
    We were pushing toward a preliminary and permanent Injunction. Deutsche Bank allegedly produced the original mortgage note in COURT, supposedly they argued in court that MERS was holding the NOTE all the time, LOL!
    The judge accepted the evidence! They introduced a copy of a certified security deed, the original mortgage note (not buying that for one bit), and of course the assignment from out of NOWHERE same as with the note which suddenly appeared also.
    We argued The Uniform Commercial Code 3-305, 3-309, 2-201 20. Pleading that Deutsche Bank with GMAC as servicing agent is NOT the holder in due course. Even introduced a monthly mortgage statement and 1098 mortgage interest statement from IMPAC with Countrywide as the servicing agent showing that Deutsche Bank with GMAC fail to show evidence that they are holders in due course and we would be at risk of owing this same debt twice or more if they are allowed to foreclose.
    No such luck the judge did not accept our argument, we are preparing for an appeal. What would be some strong arguments for an appeal? Working on the appeal process now.
    Additionally, we would like to bring a suit against Deutsche Bank because we qualify for loan workout plans (have a Fannie Mae backed loan), they are NOT the holder in due course to have a legal standing to foreclose.
    We plan to fight for justice! Because our loan is backed by Fannie Mae there are programs to help us but Deutsche Bank is unwillingly.
    God bless you

  202. I need a mortgage audit quick. Can you tell me who does them and how to get a hold of them.
    Thank You

  203. Section 3301 of the California Commercial Code entitles a “holder in due course” of a note (secured instrument) to all the benefits of a note if: they possess the note (seemingly original, though in conflict with Evidence Code S. 1500 – secondary evidence rule) and it is properly indorsed (blanket indorsement o.k.). In a recent case I filed on behalf of a client, U.S. Bank, N.A. produced the original, indorsed note. As a valid holder in due course and assuming an agreement authorizes them to act on behalf of the CSMC Asset Backed Trust investors, what prevents U.S. Bank from remedying all default related defects and proceeding with a duly appointed trustee to actualize the foreclosure process against a defaulted borrower? On appeal, this presents a problem, especially in light of the fact that most borrowers fudged their income statements (unclean hands). Food for thought for yourself and your readers.

    Also, how do I get on your attorney panel? I’m involved with a few of these cases, which by the way, is no simple litigation. I do have a lender or two nervous and on the fence though.

    Kings Regards,

    Patrick Solomonian, Esq.

  204. Hi Neil
    I was once your first student in your seminar in Santa Monica CA. So far all you have said is working. foreclosure is delayed. My bankruptcy is almost over and I’m affraid if the lender will submit a letter of Automatic Stay to the trustee, and my lender is not filling any lawsuit so i can have my assigned judge Bufford to stop my Foreclosure due o lack of Promissory Notes and the case will not be heard. Should i just file file a on Civil Case? or what is the next step to do so i can have Judge Bufford continue handling the case, your imput will and suggestion is highly appreciated. Looking forward to hear from you

  205. Hello Neil, I have been reading your blogs for a long time and I am a big fan of yours. I think it’s terrific how many people you have helped in your retirement (can’t keep a good man down). I also have been going through a foreclosure and didn’t think I would ever need your help but, my “terrific case” has gone off the rails. I may need help and an opinion from you and really wasn’t sure how to aproach you. I have had two very comprehensive mortgage audits done which summerizes my case. My problem is not the case but how it was/wasn’t handled. I am a big believer of “THE RIGHT OF RESCISSION” unlike some homeowners, I am not looking to “get out of paying back money I borrowed” I am looking for a fair fight. Do you have the time to speak? if so I can be reached at (646) 296-1988 I wish you all the best and stay healthy! keep fighting the good fight!
    Dominick-Saint Lucie West Fla.

  206. Mr. Garfield, I help run a Loan Modification company. I have read in your blog that loan modification is not really a good thing. I am wanting to help people stay in their homes. I do realize that in some circumstances or many circumstances the lender screwed the borrower. I also investigated over 150 loan mod companies before I got into the biz.. and of that 150 I could only refer people to about 10 of them with good conscience. Most of them were scams, unethical or uneducated. One thing I have going for us unlike others is tons of successful mods some with principal reduction, some just interest reduction. Our head mitigator has been doing it for about 15 years, so we can show hundreds of successful mods vs. 95% of the others. I would like to talk to you about what you advise, as I think we could refer lots of business to your attny network. Many times we turn down clients, they do not qualify for a loan mod in our eyes, but need to do something to stay in their home. Would like to do some brainstorming with you and maybe we can fight the good fight together to help homeowners. I could not find anywhere on your blog a phone number. My number is 541-844-1830

  207. Dear Lisa E. PLease let us get ahold of you ASAP We can rescue your dashed dreams right away. We have people in very high places. Is Atty. Brianna Finch suing you? Too bad for her …if you let us be on your side! Have you heard of Law Offices Of David J. Stern be glad he is not the one…go on rip-off report.com & see. The Supreme Court declared NO NOTE NO LAWSUIT! Only Honest Attorneys will legally advise you that they will demand the other side PRODUCE All Documents, demand a forensic audit, give the court a motion requesting more time, plus Honest attorneys will tell their client that Since the Note is not enforceable that there can be no attorneys fees that the other side can charge. But we are told that only Honest attorneys that we know are the only ones that do that! We are not attorneys nor do we give legal advice but we do pray for all VICTIMS of Default Law Group preying upon others! God Bless You! Let us reach you! We are glad to listen!

  208. Hello Sir,

    I need help, I live in Florida. I have to appear in court for a motion summary judgment hearing in two weeks, I dont want to keep my home I just want to buy some time say 90 days more in order to be able to move all my stuff out.

    I have heard that after this hearing the home goes up for sale and that I would only have 30-45 days left to move. I wanted to know if I can plead with the judge for allowing me 90 days to move out or what can I file with the florida court that would maybe suspend the hearing or temp make the hearing be resceduled or whatever else could or would bide me more time.
    I have no money for an attorney, and this house is a dump so I dont mind letting it go to the morgage company I even have already rented a home in another state so I have somewhere to go, I just need more time to be able to move. Can you please Email me with an answer if you can help me or give me some ideas as to how I can prolong my stay in this home for a little while longer.
    Thanks so much from Cj

  209. Sarasota Florida Judge Berlin Slams The Foreclosure Door On Wamu!

    By Carmen Dellutri on Mar 7, 2009 in Featured, Foreclosure Defense, Foreclosure Process, Mortgage Issues, Uncategorized

    In Sarasota, Florida, Judge Donna Pader Berlin slammed the foreclosure door on Washington Mutual Bank in a mortgage foreclosure case. As a foreclosure defense attorney, I love reading about cases like this, because Judge Pader Berlin gets it. She was able to see the mortgage company’s game, and she put them on the defensive.

    On March 6, 2009, Judge Donna Pader Berlin issued an Order Canceling Foreclosure Sale and Enjoining Plaintiff From Applying for Sale Date. In this case, it seems that the Plaintiff, WAMU, and the Defendant (who I shall not name to respect privacy) were in conversations to modify the mortgage. At the same time, the attorneys representing WAMU were moving the case forward through the court system.

    The attorney representing WAMU is from the Florida Default Law Group. The Florida Default Law Group is one of the foreclosure mills in the State of Florida. They pursue thousands of foreclosures each month. This is one foreclosure that will not be pursued for a while.

    The Judge entered an Order on February 6, 2009 setting aside a final judgment of foreclosure because of excusable neglect. It seems that the defendant didn’t take actions in the Court to defend herself because of the ongoing mortgage modification negotiations. Despite that the foreclosure judgment was set aside, it appears that the Florida Default Law Group asked to set a sale date and received a sale date of March 30, 2009. Bear in mind that there is no final judgment at this point.

    In the Order dated March 6, 2009, the Judge enjoined the plaintiff, WAMU, from applying for another sale date until they receive a final judgment from the Court. If WAMU chooses to violate the March 6, 2009 Order, the Judge may impose sanctions. I wonder how the attorney from Florida Default Law Group explained that one to WAMU. Yes, we made a big mistake, and we are sorry that the Judge is extremely upset with you.

  210. Beware of Loan Modifications. This is what happened to me when I tried to “modify” the terms of my contract. Please go to: http://www.ireport.com/docs/DOC-228302?ref=email <http://www.ireport.com/docs/DOC-228302?ref=email. It’s a nightmare! But beware, that’s why it is so important to understand how modifications are received and processed. This is why I firmly believe that an effective audit can , and more likely will, turn out to be your most valuable tool. I also believe that the stories we all hear about the victims of illegal foreclosure (ourselves) should be broadcast in an edited video format. Maybe a “youtube” for victims of mortgage fraud. Thank you for actually defining the atmoshpere of what is happening to people all over the country. Some will appreciate it, some won’t, so what! I appreciate it!

  211. Women of Victory: What type of plan or help are you representing? I have neither the funds nor the time to spend on sales pitches that seem to be coming out of the woodwork to assist in reducing my circumstances even further (seemingly impossible)!

  212. H. Skip: See what happens when your mind runs ahead of your mouth or fingers. 🙂 Actually I agree completely with you and I apologize for the error. I meant to say “I don’t agree with them”

  213. Hey Mr. Garfield,
    Your stuff is fantastic – good job and thank you.
    Just one little comment and I will not be to hard on you since you are an attorney and not an economist.

    In your letter “Why The Lenders have a problem……. you state “the free market enthusists see nothing wrong with that. I’m afraid I don’t.” The problem with this quote is that we are not in any way a free market economy. We are a centrally planned highly regulated fascist oligarchy and they know exactly what they are doing. Our money is not even free market derived. The current US dollar was created by legal tender laws under Roosevelt who also stole much of the gold that is the age old free market money, from Citizens in 1933. A central bank is not free market either and is also the 5th Platform of Communism. I could go on and on but understand that those that call us a free market are the very ones pulling the wool over everybody’s eyes. As you will come to understand in the not to distant future, this whole collapse was planned but thanks to guys like you, some of the smarter people out their will be able to protect themselves and fight back against the vultures in very expensive eagles clothing.

    I trully thank you for what you have done and just want to clarify that issue. Understand that something like this could never have happened in a true free market economy. The employees and stockholders would never have allowed it. We have been led to beleive that the regulators were doing a good job and therefore we did not have to worry about such occurences. It is amazing that the free market phrase “caviat emptor” should have been heeded but instead we left it up to government regulators to protect our interest. Doesn’t seem to work does it? The SEC did a great job with Madoff as well? Haven’t you noticed in your life that regulations are more used as manipulation rather than protection.

  214. Dear Lisa E. We want you to know that you are not alone! We are here to listen! There is hope, help & strategy for you as a suggestion from us! You have a bright light waiting for you! Shine ON! How can we get a hold of you A.S.A.P.? We want you to experience the victory others already have! Please respond. May God Bless YOU!

  215. I am not an attorney. I was served with foreclosure papers 19 days ago in Florida. I sent a mail in response “Motion to Dismiss” based on the second claim by Chase’s attorney at Florida Default Group, asking the judge to re-establish the note.

    I wonder if I could file some sort of legal document requiring production of documents as outlined in Peter Shim’s post from Feb 17th. I am going to send that letter to Florida Default Group tomorrow. But the idea came to me that maybe I could ask the court to rule that the requested documentation be produced?

    If that’s possible, could a Florida attorney give me some guidance & wording tips

    I can not afford an attorney at this time as we are being asked to give $3,500+ retainers.

    Thank you very much for this site. It may just save my sanity!

  216. hello.

    i hjave a client that just walked in and Default was enter 8 months ago. OIs there anyway i can overtiern this default? Judge gave us 90 days. we want to request the Promisory note etc. please help.
    i can be reached at 786.207.4441 or email me at jbl@algof.com. Email is best.

    Jon B LIndeman Esq.

  217. Need help with a commercial property foreclosure, we have an offer for a short sale and the bank refuses what are my options they want to get a summary judgment and wipe out the second. i do not want to claim bk, do not want any judgements, do not want any defeciencies on my credit. How can i defend this action to get more time to get better offers? Will tila defense work. Time is running out i have a lawyer but is not getting anywhere. My future depends on this.

    Published: February 28, 2009

    WE are all learning, to our deep distress, how the perpetual pursuit of profits drove so many of the bad decisions that financial institutions made during the mortgage mania.
    Skip to next paragraph
    Times Topics: Gretchen Morgenson

    But while investors tally the losses that were generated by loose lending so far, the impact of another lax practice is only beginning to be seen. That is the big banks’ minimalist approach to meeting legal requirements — bookkeeping matters, really — when pooling thousands of loans into securitization trusts.

    Stated simply, the notes that underlie mortgages placed in securitization trusts must be assigned to those trusts soon after the firms create them. And any transfers of these notes must also be recorded.

    But this seems not to have been a priority with many big banks. The result is that bankruptcy judges are finding that institutions claiming to hold the notes that back specific mortgages often cannot prove it.

    On Feb. 11, a circuit court judge in Miami-Dade County in Florida set aside a judgment against Ana L. Fernandez, a borrower whose home had been foreclosed and repurchased on Jan. 21 by Chevy Chase Bank, the institution claiming to hold the note. But the bank had been unable to produce evidence that the original lender had assigned the note, which was in the amount of $225,000, to Chevy Chase.

    With the sale set aside, Ms. Fernandez remains in the home. “We believe this loan was never assigned,” said Ray Garcia, the lawyer in Miami who represented the borrower. Now, he said, it is up to whoever can produce the underlying note to litigate the case. The statute of limitations on such a matter runs for five years, he said.

    A spokeswoman for Capital One, which is in the process of acquiring Chevy Chase, did not return a phone call on Friday seeking comment.

    Mr. Garcia has another case in which a borrower tried to sell his home but could not because the note underlying a $60,000 second mortgage cannot be found. The statute of limitations on the matter will expire in October, he said, and if the note holder has not come forward by then, the borrower will be free of his obligation on the second mortgage.

    No one knows how many loans went into securitization trusts with defective documentation. But as messes go, this one has, ahem, potential. According to Inside Mortgage Finance, some eight million nonprime mortgages were put into securities pools in 2005 and 2006 and sold to investors. The value of these loans was $797 billion in 2005 and $815 billion in 2006.

    If notes underlying even some of these mortgages were improperly assigned or lost, that will surely complicate pending legislation intended to allow bankruptcy judges to modify mortgage terms for troubled borrowers. A so-called cram-down provision in the law would let judges reduce the size of a loan, forcing whoever holds the security interest in it to take a loss.

    But if the holder of the note is in doubt, how can these loans be modified?

    Bookkeeping is such a bore, especially when there are billions to be made shoveling loans into trusts like coal into the Titanic’s boilers. You can imagine the thought process: Assigning notes takes time and costs money, why bother? Who’s going to ask for proof of ownership of these notes anyhow?

    But as the Fernandez case and others indicate, bankruptcy judges across the country are increasingly asking these pesky questions. Two judges in California — one in state court, another in federal court — issued temporary restraining orders last month stopping foreclosures because proper documentation was not produced by lenders or their representatives. And in another California case, a borrower’s lawyer was awarded $8,800 in attorney’s fees relating to costs spent litigating against a lender that could not prove it had the right to foreclose.

    California cases are especially interesting because foreclosures in that state can be conducted without the oversight of a judge. Borrowers who do not have a lawyer representing them can be turned out of their homes in four months.

    Samuel L. Bufford, a federal bankruptcy judge in Los Angeles since 1985, has overseen some 100,000 bankruptcy cases. He said that in previous years, he rarely asked for documentation in a foreclosure case but that problems encountered in mortgage securitizations have made him become more demanding.

    In a recent case, Judge Bufford said, he asked a lender to produce the original of the note and it turned out to be different from the copy that had been previously submitted to the court. The original had been assigned to a bank that had then transferred it to Freddie Mac, the judge explained. “They had no clue what happened after that,” he said. “Now somebody’s got to go find that note.”

    “My guess is it’s because in the secondary mortgage market they have been sloppy,” Judge Bufford added. “The people who put the deals together get paid for the deals, but they don’t get paid for the paperwork.”

    A small but spirited group of consumer lawyers has argued for years that the process of pooling residential mortgages into securities was so haphazard that proper documentation of the loans was never made in many cases. Leading the brigade is April Charney, a foreclosure lawyer at Jacksonville Legal Aid in Florida; she now trains consumer lawyers around the country to litigate these cases.

    Depending on the documentation defect, lawyers say, investors in the trust could try to force the institution that sold the loan to the trust to buy it back. Many of these institutions would be unable to do so, however, because they are defunct. In the meantime, when judges are not persuaded that the documentation is proper, troubled borrowers can remain in their homes even if they are delinquent.

    THE woes brought on by sloppy bookkeeping in securitizations will be on the agenda at the American Bankruptcy Institute’s annual spring meeting on April 3. An article titled “Where’s the Note, Who’s the Holder,” co-written by Judge Bufford and R. Glen Ayers, a former federal bankruptcy judge in Texas, will be the basis of a discussion at the meeting.

    Mr. Ayers, who is a lawyer at Langley & Banack in San Antonio, said he expects that these documentation problems will halt a lot of foreclosures. That will mean pain for investors who hold the securities. The problem for those who expect to receive the benefit of the note, Mr. Ayers said, is that they “may not be able to show to the judge they have a right to foreclose.”

    “It’s a huge problem,” he added. “It’s going to be expensive, I don’t know how expensive, ultimately to the bondholders.”
    Next Article in Business (33 of 34) » A version of this article appeared in print on March 1, 2009, on page BU1 of the New York edition.


    Mortgage Analysis and Consulting
    “Rescuing the truth in lending”




  219. Fair Game
    Guess What Got Lost in the Loan Pool?

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    Article Tools Sponsored By
    Published: February 28, 2009

    WE are all learning, to our deep distress, how the perpetual pursuit of profits drove so many of the bad decisions that financial institutions made during the mortgage mania.
    Skip to next paragraph
    Times Topics: Gretchen Morgenson

    But while investors tally the losses that were generated by loose lending so far, the impact of another lax practice is only beginning to be seen. That is the big banks’ minimalist approach to meeting legal requirements — bookkeeping matters, really — when pooling thousands of loans into securitization trusts.

    Stated simply, the notes that underlie mortgages placed in securitization trusts must be assigned to those trusts soon after the firms create them. And any transfers of these notes must also be recorded.

    But this seems not to have been a priority with many big banks. The result is that bankruptcy judges are finding that institutions claiming to hold the notes that back specific mortgages often cannot prove it.

    On Feb. 11, a circuit court judge in Miami-Dade County in Florida set aside a judgment against Ana L. Fernandez, a borrower whose home had been foreclosed and repurchased on Jan. 21 by Chevy Chase Bank, the institution claiming to hold the note. But the bank had been unable to produce evidence that the original lender had assigned the note, which was in the amount of $225,000, to Chevy Chase.

    With the sale set aside, Ms. Fernandez remains in the home. “We believe this loan was never assigned,” said Ray Garcia, the lawyer in Miami who represented the borrower. Now, he said, it is up to whoever can produce the underlying note to litigate the case. The statute of limitations on such a matter runs for five years, he said.

    A spokeswoman for Capital One, which is in the process of acquiring Chevy Chase, did not return a phone call on Friday seeking comment.

    Mr. Garcia has another case in which a borrower tried to sell his home but could not because the note underlying a $60,000 second mortgage cannot be found. The statute of limitations on the matter will expire in October, he said, and if the note holder has not come forward by then, the borrower will be free of his obligation on the second mortgage.

    No one knows how many loans went into securitization trusts with defective documentation. But as messes go, this one has, ahem, potential. According to Inside Mortgage Finance, some eight million nonprime mortgages were put into securities pools in 2005 and 2006 and sold to investors. The value of these loans was $797 billion in 2005 and $815 billion in 2006.

    If notes underlying even some of these mortgages were improperly assigned or lost, that will surely complicate pending legislation intended to allow bankruptcy judges to modify mortgage terms for troubled borrowers. A so-called cram-down provision in the law would let judges reduce the size of a loan, forcing whoever holds the security interest in it to take a loss.

    But if the holder of the note is in doubt, how can these loans be modified?

    Bookkeeping is such a bore, especially when there are billions to be made shoveling loans into trusts like coal into the Titanic’s boilers. You can imagine the thought process: Assigning notes takes time and costs money, why bother? Who’s going to ask for proof of ownership of these notes anyhow?

    But as the Fernandez case and others indicate, bankruptcy judges across the country are increasingly asking these pesky questions. Two judges in California — one in state court, another in federal court — issued temporary restraining orders last month stopping foreclosures because proper documentation was not produced by lenders or their representatives. And in another California case, a borrower’s lawyer was awarded $8,800 in attorney’s fees relating to costs spent litigating against a lender that could not prove it had the right to foreclose.

    California cases are especially interesting because foreclosures in that state can be conducted without the oversight of a judge. Borrowers who do not have a lawyer representing them can be turned out of their homes in four months.

    Samuel L. Bufford, a federal bankruptcy judge in Los Angeles since 1985, has overseen some 100,000 bankruptcy cases. He said that in previous years, he rarely asked for documentation in a foreclosure case but that problems encountered in mortgage securitizations have made him become more demanding.

    In a recent case, Judge Bufford said, he asked a lender to produce the original of the note and it turned out to be different from the copy that had been previously submitted to the court. The original had been assigned to a bank that had then transferred it to Freddie Mac, the judge explained. “They had no clue what happened after that,” he said. “Now somebody’s got to go find that note.”

    “My guess is it’s because in the secondary mortgage market they have been sloppy,” Judge Bufford added. “The people who put the deals together get paid for the deals, but they don’t get paid for the paperwork.”

    A small but spirited group of consumer lawyers has argued for years that the process of pooling residential mortgages into securities was so haphazard that proper documentation of the loans was never made in many cases. Leading the brigade is April Charney, a foreclosure lawyer at Jacksonville Legal Aid in Florida; she now trains consumer lawyers around the country to litigate these cases.

    Depending on the documentation defect, lawyers say, investors in the trust could try to force the institution that sold the loan to the trust to buy it back. Many of these institutions would be unable to do so, however, because they are defunct. In the meantime, when judges are not persuaded that the documentation is proper, troubled borrowers can remain in their homes even if they are delinquent.

    THE woes brought on by sloppy bookkeeping in securitizations will be on the agenda at the American Bankruptcy Institute’s annual spring meeting on April 3. An article titled “Where’s the Note, Who’s the Holder,” co-written by Judge Bufford and R. Glen Ayers, a former federal bankruptcy judge in Texas, will be the basis of a discussion at the meeting.

    Mr. Ayers, who is a lawyer at Langley & Banack in San Antonio, said he expects that these documentation problems will halt a lot of foreclosures. That will mean pain for investors who hold the securities. The problem for those who expect to receive the benefit of the note, Mr. Ayers said, is that they “may not be able to show to the judge they have a right to foreclose.”

    “It’s a huge problem,” he added. “It’s going to be expensive, I don’t know how expensive, ultimately to the bondholders.”
    Next Article in Business (33 of 34) » A version of this article appeared in print on March 1, 2009, on page BU1 of the New York edition.


    Mortgage Analysis and Consulting
    “Rescuing the truth in lending”




  220. Troy needs help.

    I think his lawyer was not a good thinker,troy lost his summary judgement to Citi and we know that citi is not the holder in due course.Most likely citi had no benificial interest.

    The lawyer did not move the court to compell discovery and judgement was entered with troy being unable to get evidence to prove his case.

    These are clear bastards.

  221. Bank of America and Citigroup won’t live to see May.

  222. I would like to be on distribution to any of your newsworthy facts/seminars etc.

  223. What happens how? I certified mailed letters of resiscion to all parties January 20th, 2009. Today February 17th is the 20th day after mailing the reciscion and the letter did not comply with it. This in on my primary, refinance before the 3rd year anniversary of the closing.
    $300.00 for a document preparation fee by the title company to prepare settlement documents at closing were not included in the finance charges calculation.

    USC 15 & 1635 (b) reads:

    Within 20 days after receipt of a notice of rescission, the creditor shall return to the boligor any money or property given as earnest money, downpayment, or otherwise, and shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction. If the creditor has delivered any property to the obligor, the obligor may retain possession of it. Upon the performance of the creditor’s obligations under this section, the obligor shall tender the property to the creditor, except that if return of the property in kind would be impracticable or inequitable, the obligor shall tender its reasonable value. Tender shall be made at the location of the property or at the residence of the obligor, at the option of the obligor. If the creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his part to pay for it. The procedures prescribed by this subsection shall apply except when otherwise ordered by a court.

    Do I get to keep the property without any obligations now?


  224. Debt Validation Notice
    Demand Notice
    Notice of intended Money Damages Claim
    Notice of Materials Defects

    Account Number 0095326393
    AHMSI Acct. No 4001196239

    Certified Mail:
    Return Receipt Requested

    Date: February 15th,2009

    American Home Mortgage Servicing.Inc
    P.O.Box 631730
    Irvine, TX 75063-1730


    Subject: Account Number: **********
    AHMSI Acct. No *************


    Notice to Agent is Notice to Principle; Notice to Principle is Notice to Agent

    Dear Sir or Madame,

    I am writing in response to your letter dated January 23rd, 2009 copy attached; and to provide notice and request herein, that you validate the alleged debt of this communication pursuant to the following:

    The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692

    Your principles or the company(s) that alleged ownership or authority to grant you permission to exert demands on me have acted in Violation of many stated laws. I have conclusively and with lawfully proper communication caused them to become aware of these conditions, some of which are in part articulated below and herein.

    I demand that you conform to the following:

    Florida Deceptive Trade Practices Laws
    (§§501.201, et seq.) Florida Deceptive & Unfair Trade Practices Act

    Wire Fraud

    Section 1343. Fraud by wire, radio, or television 18 USC Sec. 1343

    Federal Securities Exchange Act of 1934 15 USC Chapter 2B

    Florida Identity Theft Laws
    Code section:§817.568, .569

    The RICO ACT

    Identity Theft Laws Federal and State

    Failure to adhere to and or conform with stated law could and may have placed you in the position where liability will become a subject of my scrutiny in this matter and thus could cause money damages to be exerted of you, in my behalf. I reserve the right to bring claims as such, to your attention, and the right to exert legal remedy in compensation.

    I am requesting the following documents be provided as proper verification of the alleged debt:
    1. Provide the complete legal name and address of the original creditor and documentation that they are registered to conduct business in the State of Florida.

    2. Provide the complete legal name and address of your company AHMC INC and documentation that you are registered to conduct business in the State of Florida.

    3. Please provide a certified copy of the Promissory Note.

    4. Please provide certified copies of all assignments of mortgage from all parties. Please certify any other original documents in your possession which authorizes you to have interest in a claim purported herein.

    5. Name of alleged owner or the name of a Pooling and servicing agreement.

    6. Please provide the name, address and telephone of the Master Servicer

    7. Please provide any other current or any original agreements, contracts or other original documents, with the bona fide signatures of both parties (myself and an authorized representative of Original “creditor”, including proof of their authority), of the alleged debt in accordance with FDCPA § 808 (1) – Unfair practices [15 USC 1692f],(2) Federal Rules of Evidence – Rule 1002 (and/or Rule 1003) and other applicable Federal and State Laws and Regulations; and state the location(s) of any and all alleged records relative to this matter.
    • 8. Be advised that I am fully aware of my rights under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. For instance, I know that: because I have disputed this debt in writing within 30 days of receipt of your dunning notice, you must obtain verification of the debt or a copy of the judgment against me and mail these items to me at your expense;
    • you cannot add interest or fees except those allowed by the original contract or state law.
    • you do not have to respond to this dispute but if you do, any attempt to collect this debt without validating it, violates the FDCPA.

    9. I have disputed this debt; therefore, until validated you know your information concerning this debt is inaccurate. Thus, if you have already reported this debt to any credit-reporting agency (CRA) or Credit Bureau (CB) then, you must immediately inform them of my dispute with this debt. Reporting information that you know to be inaccurate or failing to report information correctly violates the Fair Credit Reporting Act § 1681s-2. Should you pursue a judgment without validating this debt, I will inform the judge and request the case be dismissed based on your failure to comply with the FDCPA
    10. I demand authenticated with verified accounting of ALL the charges, per the provisions of Florida Consumer Protection Laws,FDCPA § 809 – Validation of Debts. Inclusive of which and I DEMAND that the Original “creditor” must provide a copy of the journal entry that is made when I made or had a charge.

    11. I DEMAND verification that original “creditor”, in the creation of this alleged account lent its own assets (money) by indicating which account this “money” was secured from to provide the funding for this alleged loan, I demand to know the date of purported funding this account, it’s date of origination and I require a certified copy of the form of payment made to the title agent in the above related account.

    12. Please provide the date(s) this alleged debt was assigned (and/or sold) and amount of consideration and all terms and conditions.

    12a. Please identify the basis of this assignment or purchase amount and provide documents of any and all assignments (or purchases) of the alleged debt of the reference cited above and the assignments (or purchases) process undertaken.

    12b. Please provide a lawful and proper disclosure of your alleged right to servicing by providing me with a signed original letter of Transfer of servicing right in accordance of with RESPA(note a photo copy unsigned transfer notice with defects was served to me I have enclosed in this communication a copy of such notice).

    13. Please provide documentation detailing all assignees or holders and debt collectors of this alleged debt including former law firm(s) engaged to collect this alleged debt and transaction dates and any filings in accordance with FCRA § 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2] and FCRA § 611, Procedure in case of disputed accuracy [15 U.S.C. § 1681i (a)5]. Please provide certified documentation of the alleged debt detailing the transactions and accounting and how the alleged debt amounts were calculated.

    14. Please provide documentation that indicates any credit bureaus to which negative marks associated with this alleged debt were reported (Experian, Equifax, TransUnion).

    15. Agreement with your client that grants you the authority to collect on this alleged debt and documentation that nullifies any previous agreements.

    16. Any insurance claims been made by any creditor (holder/assignee) regarding this alleged debt or available at any time to anyone.

    17. If the alleged debt was assigned (or sold) as part of a portfolio, copies of all offerings, counteroffers, and sales documentation and agreements and documentation identifying third party interests, delineating all associated transactions and accounting including tax treatment (such as “write-offs” or “charge-offs).

    18. Detailed documentation of any Credit Derivatives (as Collateralized Debt Obligations (CDOs)) contracts associated with and/or exercised in regard to this alleged debt by any bank or holder or assignee relative to the reference alleged debt cited above.

    19. Identify the status and treatment of this alleged debt as documented and reported for conformance to each holder(s) (or assignee’s) and the original creditor’s banking or successor banks’ regulations and/or regulations (Federal and State Tax) pertaining to debt and interest and particular with debt “charge-offs” or “write offs”. The “charge-off” is evidenced by entries into my Credit Reports.

    20. Please provide copies of documentation that list individuals with direct personal knowledge correlated to each of the documents provided in compliance with these requests delineating their relationship relative to this disputed debt, their current position now, and contact information.

    21. Please provide any and all associated documentation delineating chain of custody, ownership, and control, and, relationships between any banks, assignees or holders, purchasers of alleged or defective debt, and any and all records in relationship to the same.

    22. Please inform your errors and omissions policy holders or any other insurance or underwriting agreements and or any other insurance companies who you may in the future make claim on with respect to the account. I demand that you inform such companies or entities of this claim and include a copy of such letter to me.

    23. The associated parties concerned, with this matter have been informed that this purported dept has been lawfully nullified and cancelled. This dept has been cancelled.

    In addition to the above, I am further requesting that you take the following actions:

    1. Please contact any credit agencies to whom you have reported this alleged debt, and inform them that I am disputing this debt; and, forward a copy of this letter to any creditor who alleges that I owe this alleged debt of the reference cited above, and inform them that I am disputing the allege debt of the reference cited above.

    2. Except as specifically outlined herein, I am requesting that you cease all communication with me about the alleged debt as required by law, in strict conformance with the FDCPA, the Florida Consumer Protection Laws, and other law cited, herein, limited to providing me with the validation and other documentation requested in this letter and/or informing me that you have ceased collection efforts. I demand that you acknowledge my stated demands and agree to its stated or merited liability.

    Any response not meeting the prescribed requirements of the above noted laws and regulations will be deemed a non-response. All responses must contain the full, legal name of the individual responding and contain a sworn statement as prescribed by law attesting to the facts stated therein (authenticated). Per the provisions of the UCC your response is required within 14 days of your receipt of this request.


    You are also being put on NOTICE that if you attempt to take any action against me that you are not legally authorized to take, in violation of the Florida Consumer Protection Laws. and the Fair Debt Collection Practices Act (FDCPA), you agree, by your silence and acquiescence, to pay me, based on the fee schedule below for each violation, and that you authorize a UCC 1 to be filed against American Home Mortgage Servicing Inc. with your local Secretary of State’s Office for violations of my protected rights and harassment.


    1. Harassing Phone calls – After proper notification, as verified by the postal return “green” card, and without providing documentation stated above, $5,000 per occurrence.

    2. Selling of the disputed “debt”, without providing proper validation, to another debt collector, $10,000.

    3. Taking any legal action you are not authorized to take (i.e. ex-parte attachments, improper process of service (notification of any pending court action) to obtain default judgments, etc, $25,000.


    If there is anything in this letter with which you, on behalf of original “creditor”, American Home Mortgage Servicing.Inc.and or any other Party(s) by association to this above Loans, disagree, then rebut or refute, with particularity, that with which you disagree in writing, within the prescribed 14 days of your receipt of this letter, and support your disagreement with fact, evidenced and Constitutionally based law or case law. Your failure to response, as stipulated, is your agreement with and admission to the fact that everything in the letter is true, correct, legal, lawful, that there is no lawful “debt”, and your irrevocable admission attesting to this, fully binding upon you, Original “creditor”, and American Home Mortgage Servicing.Inc in any court in America, without your protest, objection, or that of those who represent you.

    Conduct yourself accordingly.




    Copy of January 15th, 2009 letter

  225. Sponsored Link: “Crash Proof” Your Wealth in 3 Simple Steps

    Tuesday, February 10th, 2009

    The $9.7 Trillion Pledged to Fix the Financial Mess Could Have Paid off 90% of America’s Mortgages, Report Says

    By Don Miller
    Associate Editor
    Money Morning

    As Senate Republicans and Democrats continue to bicker over the details of President Barack Obama’s stimulus plan, Treasury Secretary Timothy Geithner waits in the wings ready to unveil yet another bank bailout bill.

    But almost forgotten in the headlong rush to devise measures to create jobs and save the financial system is the total cost of the government’s commitment to solving the economic crisis.

    Bloomberg News reported yesterday (Monday) that the tally of U.S. government spending could reach as much as $9.7 trillion – enough to pay off more than 90% of the nation’s home mortgages.

    Already, the U.S. Federal Reserve, Treasury Department and Federal Deposit Insurance Corp. (FDIC) have lent or spent almost $3 trillion over the past two years and pledged another $5.7 trillion if needed. That adds up to almost two-thirds of the value of the entire gross domestic product (GDP) for the U.S. economy last year.

    Sign up below…
    and we’ll send you a new investment report for free:

    “Credit Crisis Report.”

    As astonishing as the number itself is a continuing lack of transparency in how and to whom the funds are being distributed.

    “We’ve seen money go out the back door of this government unlike any time in the history of our country,” Sen. Byron Dorgan, D-N.D., said on the Senate floor Feb. 3. “Nobody knows what went out of the Federal Reserve Board, to whom and for what purpose. How much from the FDIC? How much from TARP? When? Why?”

    Notably, only the stimulus package currently on the table – along with the $700 billion Troubled Asset Relief Program (TARP) and last year’s $168 billion tax rebate – have actually been voted on by lawmakers. An additional $8 trillion is in the form of government lending programs and guarantees.

    In fact, Bloomberg filed a federal Freedom of Information Act (FOIA) lawsuit against the Federal Reserve Bank Nov. 7 seeking to force disclosure of borrower banks and their collateral. Arguments in the suit may be heard as soon as this month.

    Meanwhile, the spending goes on.

    The Senate is to vote this week on a stimulus package totaling at least $780 billion that President Obama says is needed to avert a deeper recession. If it passes the Senate, it would have to be reconciled with an $819 billion plan the House approved last month.

    Treasury Secretary Geithner delayed announcing his new plan for addressing the banking crisis, details of which were reported yesterday in Money Morning. The tab for that bailout is widely expected to total near $1 trillion.

    But questions remain as to what effects the stimulus package and bank bailout will actually have on the economy, both near and long term.
    The nonpartisan Congressional Budget Office reported last week that the measure is likely to create between 1.3 million and 3.9 million jobs by the end of 2010, lowering a projected unemployment rate of 8.7% by as much as 2.1 percentage points.

    But the CBO also warned the long-term effect of that much government spending over the next decade could “crowd out” private investment, lowering long-term economic growth forecasts by 0.1% to 0.3% by 2019.

    And simple mathematics calls into question assertions that another bailout will rescue banks teetering on the edge of insolvency.

    Bank losses from the write-offs of bad loans and faulty derivatives add up to $1.5 trillion so far. Additionally, regulators are forcing banks to account for $5 trillion to $10 trillion worth of off-balance-sheet structured investment vehicles.

    Given that banking rules require banks to keep assets on hand equal to 10% of those funds, banks will need as much as $1 trillion in the next year. Adding $1.5 trillion in losses means banks will need as much as $2.5 trillion in new capital to remain solvent under current rules.

    “The banking system simply has no capital. All the money that’s been allocated so far has been like pouring water into a bucket with a hole in the bottom.” Satyajit Das, a credit expert from Johannesburg, South Africa, told MSNBC.

    So is the $9.7 trillion pledged by the government going to be enough to pull the U.S. economy out of the fire? Who knows?

    But here are a few facts:

    * $9.7 trillion would be enough to send a $1,430 check to every man, woman and child alive in the world, Bloomberg reported.
    * It’s 13 times what the U.S. has spent so far on wars in Iraq and Afghanistan.
    * And it’s almost enough to pay off every home mortgage loan in the United States, calculated at $10.5 trillion by the Federal Reserve.

    Although economists have been throwing around words like “trillion” like it’s nothing, $9.7 trillion is still is a lot of money.

    News and Related Story Links:

    * Bloomberg:
    U.S. Taxpayers Risk $9.7 Trillion on Bailout Programs

  226. Half of all CDOs of ABS failed

    By Paul J Davies

    Published: February 10 2009 19:38 | Last updated: February 10 2009 19:38

    Almost half of all the complex credit products ever built out of slices of other securitised bonds have now defaulted, according to analysts, and the proportion rises to more than two-thirds among deals created at the peak of the cycle.

    The defaults have affected more than $300bn worth of these collateralised debt obligations, which were built from bits of other asset backed securities (ABS) such as mortgage bonds, other CDOs and structured bonds, or derivatives of any of these, according to analysts at Wachovia and Morgan Stanley.
    Defaults poised for record high – Feb-10
    Financial groups’ problem assets hit $610bn – Dec-10
    New wave of CDOs at risk of default – Nov-13
    Analysis: CDO values in free-fall – Aug-18
    CLOs ‘well-placed’ to avoid losses – Aug-06
    CLO managers under pressure – Jul-23

    So-called CDOs of ABS caused huge losses to banks such as Merrill Lynch, UBS and Citigroup, which held large amounts of the supposedly safest, top-rated chunks of them. They have since been damned by bodies such as the Bank for International Settlements as being too complex to risk manage effectively.

    CDOs of ABS were used increasingly at the peak of the credit bubble to keep the securitisation machine moving by recycling hard to sell bits of subprime mortgage bonds and other risky tranches into new structures with top-notch credit ratings.

    However, the ratings of these deals proved unsustainable, as evidenced by the fact they have accounted for 92.9 per cent of all 16,587 ratings downgrades globally from all rating agencies since the beginning of last year, according to Morgan Stanley.

    The way these complex and risky transactions were exploited at the peak of the bubble can be seen in data from analysts at Wachovia, who reckon that 47.6 per cent of all CDOs of ABS by volume issued since the market substantively began in 2002 have now hit an event of default.

    By their records, the first three years of the market saw less than 100 deals sold per year and less than 10 per cent of those have defaulted. The number of deals done rose to 133 in 2005, less than 20 per cent of which defaulted, and 89 in just the first half of 2006, about one-third of which have defaulted.

    However, the real peak of the market saw 147 deals done in the second half of 2006 and 172 done in the first half of 2007 – of which 68 per cent and 76.2 per cent, respectively, have now defaulted.

    The way these CDOs have performed has especially hurt the new wave of specialist credit hedge funds, which sprang up in recent years and became heavily dependent from creating and managing such deals. They were drawn to such business by a belief in the sustainability and predictability of the fees it would generate.

    However, about one-third of the CDOs of ABS that have defaulted, or almost $105bn worth, have been or are being liquidated – often ­leading to losses for investors and putting further pressure on market prices of the bits of mortgage bonds and other CDOs they are selling.

    Copyright The Financial Times Limited 2009

  227. If it turns into a disaster, you never heard of me.

  228. Mr. Garfield!!

    NEW STRATEGY I’m using to challenge counsel for the Lender/Servicer/Trust (and perhaps scare the hell out of a judge):

    They argue that the court can find reliable the copies of the note on file in the public record, and that the original is unnecessary. However, the copy of mine on-file wasn’t even SIGNED among other deficiencies.

    “Your Honor, the gentleman cannot obscure one salient fact, the documents upon which they would have us rely are fraudulent on their face. With reckless indifference to the consequences they have injured the public records of Orleans Parish, calling into question the validity of EVERY copy of EVERY mortgage on file. Because of their actions it will now necessitate the presentment of the original Note in ALL cases, as they have called into question the validity of the public record.”

    You could find cases in your various jurisdictions and attack the validity of the entire public record. With faith in that cache shaken, and the persons who injured that cache proven untrustworthy thereby, you can argue that now ONLY the original note can be trusted.

    OF COURSE, since it has been in the care of those proven to be capable of altering documents, EVEN THAT NOTE would come in under a cloud of suspicion.

    Just the threat of destroying the confidence in municipal databases has caused my legal advisers to ask if that’s a good idea.


    If it works I want credit.

    Michael Castrillo
    New Orleans

  229. the thing has 240 pages of small print

    Page 17 of 244

    Case 1:08-cv-03545-RJH Document 15 Filed 07/30/2008 Page 78 of 244

    605252677 Title Policy Unrecorded Copy Stamped True/Commitment
    605263650 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    605263650 Title Policy Unrecorded Copy Stamped True/Commitment
    605304080 Title Policy Unrecorded Copy Stamped True/Commitment
    605304129 Title Policy Unrecorded Copy Stamped True/Commitment
    605315765 Title Policy Unrecorded Copy Stamped True/Commitment
    605315822 Note Document Missing
    605315822 Recorded Mortgage Document Missing
    605315822 Title Policy Unrecorded Copy Stamped True/Commitment
    605316484 Note Document Defective- Document Custody
    606017315 Title Policy Unrecorded Copy Stamped True/Commitment
    606017859 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606017925 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606017925 Title Policy Unrecorded Copy Stamped True/Commitment
    606028861 Title Policy Unrecorded Copy Stamped True/Commitment
    606050178 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606050684 Note Document Defective- Document Custody
    606061060 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606061485 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606061558 Note Document Defective- Document Custody
    606061558 Recorded Mortgage Document Missing
    606061806 Note Document Defective- Document Custody
    606062492 Note Document Defective- Document Custody
    606072782 Note Document Defective- Document Custody
    606072782 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606072782 Title Policy Unrecorded Copy Stamped True/Commitment
    606073138 Note Document Defective- Document Custody
    606073199 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606073199 Title Policy Unrecorded Copy Stamped True/Commitment
    606073532 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606073532 Title Policy Unrecorded Copy Stamped True/Commitment
    606073830 Title Policy Unrecorded Copy Stamped True/Commitment
    606084228 Title Policy Unrecorded Copy Stamped True/Commitment
    606084376 Title Policy Unrecorded Copy Stamped True/Commitment
    606095837 Note Document Defective- Document Custody
    606095837 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606127268 Title Policy Unrecorded Copy Stamped True/Commitment
    606128051 Note Document Defective- Document Custody
    606128289 Title Policy Unrecorded Copy Stamped True/Commitment
    606128520 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606138815 Title Policy Unrecorded Copy Stamped True/Commitment
    606139029 Note Document Not Tracked
    606139029 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606139715 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606139715 Title Policy Unrecorded Copy Stamped True/Commitment
    606140294 Note Document Defective- Document Custody
    606140428 Title Policy Unrecorded Copy Stamped True/Commitment
    606140639 Recorded Mortgage Unrecorded Copy Stamped True/Commitment
    606140639 Title Policy Unrecorded Copy Stamped True/Commitment
    606140832 Note Document Defective- Document Custody
    606140965 Recorded Mortgage Unrecorded Copy Stamped True/Commitment

  230. Case 1:08-cv-03545-RJH Document 15 Filed 07/30/2008 Page 2 of 244

    are related to Defendant’s purposeful activity, business transactions and contracts to supply
    services in this State. By purposefully engaging in business activities within this State,
    Defendant sought to invoke the benefits and protection of New York law.

    4. This Court has personal jurisdiction over Defendant pursuant to Section 302(a)(2)
    of the CPLR because Plaintiff’s causes of action arise from and are related to Defendant’s
    tortious acts within this State.
    5. This Court has personal jurisdiction over Defendant pursuant to Section 302(a)(3)
    of the CPLR because Plaintiff’s causes of action arise from and are related to Defendant’s
    tortious acts without the State causing injury to Plaintiff and Plaintiff’s property within this State,
    and Defendant (1) regularly does and solicits business in this State, (2) derives substantial
    revenue from services rendered in this State and from interstate commerce, and (3) expected or
    should reasonably have expected its tortious acts to have consequences in this State.
    6. This Court has personal jurisdiction over Defendant because, by its Notice of
    Removal, Defendant has voluntarily appeared in this Court and has invoked this Court’s
    jurisdiction in connection with this action.

    7. Plaintiff Citigroup is a New York corporation with its principal place of business
    at 390 Greenwich Street, New York, New York 10013.
    8. Upon information and belief, Defendant Accredited is a California corporation
    with its principal place of business in San Diego, California and is authorized to transact business
    in the State of New York. Upon information and belief, Defendant Accredited has numerous
    offices located within this State for the purpose of transacting business within this State.

    Case 1:08-cv-03545-RJH Document 15 Filed 07/30/2008 Page 3 of 244


    9. The parties have entered into a Mortgage Loan Purchase and Interim Servicing
    Agreement dated as of June 1, 2005, as amended (the “Loan Purchase Agreement”). The Loan

    Purchase Agreement defines Accredited as “Seller” and Citigroup as “Purchaser” and

    memorializes the terms and conditions according to which the parties agreed that Accredited

    would sell pools of mortgage loans to Citigroup.

    Loan Purchase Agreement Representations

    10. The Loan Purchase Agreement contains a number of representations, warranties
    and covenants on the part of Defendant as the Seller, including representations and warranties

    regarding the individual mortgage loans.

    11. The following are among those representations, warranties and covenants
    contained within the Loan Purchase Agreement (capitalized terms in this paragraph not

    otherwise defined herein have the meanings ascribed to them in the Loan Purchase Agreement):

    (a) The information set forth in the related Mortgage Loan Schedule and the
    Mortgage Loan data delivered to the Purchaser in the Electronic Data File is
    complete, true and correct (Section 7.02 (i));
    (b) All payments required to be made within 29 days prior to the close of business
    on the Closing Date for such Mortgage Loan under the terms of the Mortgage
    Note have been made (Section 7.02 (ii));
    (c) The Mortgaged Property is located in the state identified in the related
    Mortgage Loan Schedule and is improved by a Residential Dwelling (Section
    7.02 (iv));
    (d) The Mortgage Note and the Mortgage are not subject to any right of
    rescission, set-off, counterclaim or defense, including the defense of usury, nor
    will the operation of any of the terms of the Mortgage Note and/or the Mortgage,
    or the exercise of any right thereunder, render the Mortgage unenforceable, in
    whole or in part, or subject to any right of rescission, set-off, counterclaim or
    defense, including the defense of usury and no such right of rescission, set-off,
    counterclaim or defense has been asserted with respect thereto (Section 7.02 (vi));

    Case 1:08-cv-03545-RJH Document 15 Filed 07/30/2008 Page 4 of 244

    (e) The Mortgage Loan was underwritten in accordance with the Underwriting
    Guidelines of the Seller in effect at the time the Mortgage Loan was originated
    (Section 7.02 (vii));
    (f) Any and all requirements of any federal, state or local law including, without
    limitation, usury, truth in lending, real estate settlement procedures, consumer
    credit protection, equal credit opportunity, fair housing, disclosure laws and all
    predatory, abusive and fair lending laws applicable to the origination and
    servicing of mortgage loans of a type similar to the Mortgage Loans have been
    complied with and the consummation of the transactions contemplated hereby
    will not involve the violation of any such laws (Section 7.02 (ix));
    (g) The Mortgage has not been satisfied, cancelled, subordinated or rescinded, in
    whole or in part, and the Mortgaged Property has not been released from the lien
    of the Mortgage, in whole or in part, nor has any instrument been executed that
    would effect any such satisfaction, cancellation, subordination, rescission or
    release (Section 7.02 (x));
    (h) The related Mortgage is properly recorded and is a valid, existing and
    enforceable mortgage with either a first lien and first priority security interest with
    respect to each Mortgage Loan which is indicated by the Seller to be a First Lien
    (as reflected on the Mortgage Loan Schedule), or a second lien and second
    priority security interest with respect to each Mortgage Loan which is indicated
    by the Seller to be a Second Lien (as reflected on the Mortgage Loan Schedule),
    in either case, on the Mortgaged Property, including all improvements on the
    Mortgaged Property (Section 7.02 (xi));
    (i) The Mortgage Note and the related Mortgage are genuine and each is the legal,
    valid and binding obligation of the maker thereof, enforceable in accordance with
    its terms (Section 7.02 (xii));
    (j) The origination, servicing and collection practices used by the Seller with
    respect to each Mortgage Note and Mortgage, including without limitation the
    establishment, maintenance and servicing of the Escrow Accounts and Escrow
    Payments, if any, since origination have been in all material respects legal, proper,
    prudent and customary in the mortgage origination and servicing industry. The
    Mortgage Loan has been serviced by the Seller and any predecessor servicer in
    accordance with all applicable laws, rules and regulations and the terms of the
    Mortgage Note and Mortgage (Section 7.02 (xxii));
    (k) The Mortgaged Property is free of damage and waste and is in good repair,
    and there is no proceeding pending or threatened for the total or partial
    condemnation thereof nor is such a proceeding currently occurring (Section 7.02

    Case 1:08-cv-03545-RJH Document 15 Filed 07/30/2008 Page 5 of 244

    (l) No Mortgage Loan was made (a) to finance the construction or rehabilitation
    of a Mortgaged Property or (b) to facilitate the trade-in or exchange of a
    Mortgaged Property (Section 7.02 (xxvii));
    (m) The Mortgaged Property is lawfully occupied under applicable law; all
    inspections, licenses and certificates required to be made or issued with respect to
    all occupied portions of the Mortgaged Property and, with respect to the use and
    occupancy of the same, including but not limited to certificates of occupancy and
    fire underwriting certificates, have been made or obtained from the appropriate
    authorities. No improvement located on or being part of any Mortgaged Property
    is in violation of any applicable zoning and subdivision law, ordinance or
    regulation (Section 7.02 (xxix));
    (n) No error, omission, misrepresentation, negligence, fraud or similar occurrence
    with respect to origination of a Mortgage Loan has taken place on the part of any
    person, including without limitation the Mortgagor, any appraiser, any builder or
    developer, or any other party involved in the origination of the Mortgage Loan or
    in the application of any insurance in relation to such Mortgage Loan (Section
    7.02 (xxx));
    (o) No Mortgage Loan is among other things, a “high cost”, “covered”, “abusive”,
    “predatory”, or “high risk home” mortgage loan (or a similarly designated loan
    using different terminology) under any federal, state or local law (Section 7.02
    (p) The Mortgage Loan is in compliance with all requirements set forth in the
    related Confirmation, and the characteristics of the related Mortgage Loan
    Package as set forth in the related Confirmation are true and correct, subject to
    adjustments agreed to by the Purchaser (Section 7.02 (xliii));
    (q) The Mortgage Note is not and has not been secured by any collateral except
    the lien of the corresponding Mortgage on the Mortgaged Property and the
    security interest of any applicable security agreement or chattel mortgage referred
    to in (xi) above (Section 7.02 (xlvii));
    (r) The Mortgage Loan was not prepaid in full prior to the Closing Date and the
    Seller has not received notification from a Mortgagor that a prepayment in full
    shall be made after the Closing Date (Section 7.02 (lxvi)); and
    (s) The Mortgage Loan Documents and any other documents required to be
    delivered with respect to each Mortgage Loan have been delivered to the
    Purchaser or its nominee all in compliance with the specific requirements of this
    Agreement (Section 7.01 (vii)).

    Case 1:08-cv-03545-RJH Document 15 Filed 07/30/2008 Page 6 of 244

    The Mortgage Loan Pool at Issue and the Confirmation Letter Terms and Details

    12. Subject to the Loan Purchase Agreement described above, the parties entered into
    a Confirmation Letter dated as of March 15, 2007 (the “Confirmation Letter” and, collectively
    with the Loan Purchase Agreement, the “Agreements”). The Confirmation Letter documents the
    parties’ agreement for Defendant to sell to Plaintiff a pool of mortgage loans in the aggregate
    unpaid principal balance of approximately $2,769,000,000 (the “Mortgage Loan Pool”). A
    significant number of the purported mortgage loans that were transferred from Accredited to
    Citigroup pursuant to the Agreements are the subject of this action (the “Subject Assets” or
    “Assets”). The Subject Assets are governed by both of the Agreements, which are in turn
    expressly governed by New York law.
    13. The transaction which was memorialized in the Confirmation Letter was
    proposed, negotiated and finalized in the course of just a few days in March 2007. It began with
    Accredited seeking bidders to purchase a certain pool of loans. The deal was a “rescue”
    transaction whereby Accredited was required to sell the loans quickly in order to raise cash. It
    was therefore understood that there would be no pre-closing due diligence period, and that due
    diligence would necessarily follow the closing of the transaction. The parties further understood
    that there would be a post-closing purchase price adjustment based upon post-closing due
    diligence review of issues related to the market values of the properties securing the loans, or the
    credit risks of their borrowers.
    14. The pool of loans was described by reference to a data file that contained certain
    relevant facts concerning the over 15,000 purported loans which were for sale, each of which
    was shown as having a certain unpaid principal balance, an applicable interest rate and many
    other facts concerning the relevant loans (the “Data File”).

    Case 1:08-cv-03545-RJH Document 15 Filed 07/30/2008 Page 7 of 244

    15. The parties developed the Confirmation Letter terms by email correspondence,
    and a three page memorandum agreement was quickly prepared and became the genesis of the
    Confirmation Letter. In the course of reaching the terms of an agreement for Citigroup to
    purchase the loans from Accredited, Accredited represented the Data File as containing the facts
    which were the essence of the transaction. Specifically, the first paragraph of the Confirmation
    Letter sets forth that the transaction is the sale of the “right, title and interest in the Mortgage
    Loans” listed in the Data File.
    16. The Confirmation Letter contains a specific representation that “[t]he Mortgage
    Loans were originated by the Seller.”
    17. The Confirmation Letter contains a specific representation (at Section 17) that
    “The Mortgage Loans will substantially conform to the pool characteristics as set forth in the
    Data File.” This was a factual representation that the mortgage loans being sold were as set forth
    in the Data File.
    18. As set forth below, this essential factual representation contained within the
    Confirmation Letter was not true.
    19. The Confirmation Letter also contains a specific representation (at Section 18)
    that “No loan substitutions are allowed without the Purchaser’s explicit approval.” Plaintiff has
    never given its approval to any loan substitutions for the Mortgage Loan Pool. This
    representation also was incorrect. As set forth in the Chart at paragraph 83, there were over 200
    substituted Assets, evidencing Defendant’s breach of Section 18 of the Confirmation Letter.
    Plaintiff is entitled to have Defendant repurchase these Assets.
    20. The Data File controlled the price paid by Plaintiff to Defendant. Plaintiff paid to
    Defendant 91.68 percent of the unpaid principal balance for each mortgage loan shown in the

  231. Nice catch Mario. Interesting reading. It is Citigroup Global Markets Realty vs. Accredited Home Lenders (for those non-experts like me trying to figure it out). It looks like it has some great content.

    Dan Edstrom

  232. Mario,
    Please please please provide more info as I am bringing up multiple cases and they do not involve foreclosures. Who are the parties? When was the case initially filed? The case number you gave brings up multiple court cases and it costs money to hunt this down.

    Dan Edstrom

  233. Neil,
    I sent you an email with this news I hope you read it and post the findings
    Case 1:08-cv-03545-RJH

  234. I am breaking this news.Please go to pacer for the download.This is the most important news thus far and should be looked at very carefully.

    I broke this news

    Case 1:08-cv-03545-RJH

    Document 15 Filed 07/30/2008 Page 1 of 244

  235. Speaking of Madoff, if you want to see some interesting pleadings, look at the SEC lawsuit against Madoff. I may be using some of that in my lawsuit against the lender. It sure seems to apply in my case. Of course this is just my opinion and I am not an attorney …


  236. You see they did a Madoff on us, they used others peoples money to pay off the closing after we signed up for the dept.

    They got bailed out,they over priced the said asset made an extra profit and they still lay claim to the home.

    So we should squat the homes we must develop the laws,and look for the common black letter property law to implement and use in our favor.

    I think this is gonna be some fun

  237. This is what I have found as a start of Ideas to find ways to legally squat a home and fight it in court.

    Possession (law)

    From Wikipedia, the free encyclopedia

    Jump to: navigation, search

    Sister project Look up possession (law) in

    Wiktionary, the free dictionary.

    In law, possession is the control a person intentionally exercises toward a thing. In all cases, to possess something, a person must have an intention to possess it. A person may be in possession of some property (although possession does not always imply ownership). Like ownership, the possession of things is commonly regulated by states under property law.

    * 1 Intention to possess
    * 2 Importance of possession
    * 3 Obtaining possession
    o 3.1 Possession acquired by consent
    o 3.2 Possession acquired without consent
    * 4 See also

    Intention to possess

    An intention to possess (sometimes called animus possidendi) is the other component of possession. All that is required is an intention to possess something for the time being. In common law countries, the intention to possess a thing is a fact. Normally, it is proved by the acts of control and surrounding circumstances.

    It is possible to intend to possess something without knowing that it exists. For example, if you intend to possess a suitcase, then you intend to possess its contents, even though you do not know what it contains. It is important to distinguish between the intention sufficient to obtain possession of a thing and the intention required to commit the crime of possessing something illegally, such as banned drugs, firearms or stolen goods. The intention to exclude others from the garage and its contents does not necessarily amount to the guilty mind of intending to possess stolen goods.

    When people possess places to which the public has access, it may be difficult to know whether they intend to possess everything within those places. In such circumstances, some people make it clear that they do not want possession of the things brought there by the public. For example, it is not uncommon to see a sign above the coat rack in a restaurant which disclaims responsibility for items left there.

    [edit] Importance of possession

    Possession is one of the most important concepts in property law. In common law countries, possession is itself a property right. Absent evidence to the contrary, it provides evidence of ownership. Possession of a thing for long enough can become ownership. In the same way, the passage of time can bring to an end the owner’s right to recover possession of a thing.

    There may be varying degrees of rights to possession. For example, if you leave a library book at a cafe and the waiter picks it up, you have lost possession. When you return to recover the book, even though the waiter has possession, you have a better right to possession and the book should be returned.

    [edit] Obtaining possession

    Possession requires both control and intention. It is obtained from the first moment that both those conditions exist simultaneously. Usually, intention precedes control, as when you see a coin on the ground and reach down to pick it up. Nevertheless, it is conceivable that a person might obtain control of a thing before forming the intention to possess it. If someone unknowingly sat on and therefore had control of a $10 note on the seat of a train, he or she could obtain possession by becoming aware of the note and forming the intention to possess it. People can also intend to possess things left, without their knowledge, in spaces they control.

    [edit] Possession acquired by consent

    Most property possessed is obtained with the consent of someone else who possessed it. They may have been purchased, received as gifts, leased, or borrowed. The transfer of possession of goods is called delivery. For land, it is common to speak of granting or giving possession.

    A temporary transfer of possession is called a bailment. Bailment is often regarded as the separation of ownership and possession. For example, the library continues to own the book while you possess it and will have the right to possess it again when your right comes to an end. A common transaction involving bailment is a conditional sale or hire-purchase, in which the seller lets the buyer have possession of the thing before it is paid for. The buyer pays the purchase price in installments and, when it is fully paid, ownership of the thing is transferred from seller to buyer.

    [edit] Possession acquired without consent

    It is possible to obtain possession of a thing without anyone else’s consent. First, you might take possession of something which has never been possessed before. This can occur when you catch a wild animal; or create a new thing, such as a loaf of bread. Secondly, you might find something which someone else has lost. Thirdly, you might take something from another person without their consent. Possession acquired without consent is a property right which the law protects. It gives rise to a right of possession which is enforceable against everyone except those with a better right to possession.

    o Possession of stolen goods
    o Minor In Possession
    * Other special conditions of possession
    o Constructive possession
    o Adverse possession
    o Right of possession
    o Debtor in possession

    * Owner,Lessor,Rentor,Landlord

    * Possessor,Lessee,Renter,Tenant

    * Possession,Lease,Renting,Tenancy

    Retrieved from “http://en.wikipedia.org/wiki/Possession_(law)”
    Category: Property law

    Property law

    From Wikipedia, the free encyclopedia

    Property law is the area of law that governs the various forms of ownership in real property (land as distinct from personal or movable possessions) and in personal property, within the common law legal system. In the civil law system, there is a division between movable and immovable property. Movable property roughly corresponds to personal property, while immovable property corresponds to real estate or real property, and the associated rights and obligations thereon.

    The concept, idea or philosophy of property underlies all property law. In some jurisdictions, historically all property was owned by the monarch and it devolved through feudal land tenure or other feudal systems of loyalty and fealty.

    Though the Napoleonic code was among the first government acts of modern times to introduce the notion of absolute ownership into statute, protection of personal property rights was present in medieval Islamic law and jurisprudence,[1] and in more feudalist forms in the common law courts of medieval and early modern England.

    * 1 Definition of property
    * 2 Theory of property
    o 2.1 Early American theory
    * 3 Property rights and contractual rights
    * 4 Property rights and personal rights
    * 5 Classification
    * 6 Possession
    * 7 Transfer of property
    * 8 Priorities
    * 9 Leases
    * 10 See also
    * 11 References

    [edit] Definition of property

    In Roman law, property was defined as follows: ius utendi et abutendi re sua, quatenus iuris ratio patitur, ‘the right to use and abuse a thing, within the limits of the law’ (Justinian, Code 4, 35, 21; see also, commentary by P.J. Proudhon in ch. 2 of What is Property? [1]).

    One modern textbook on property law states:

    When a layman is asked to define “property,” he is likely to say that “property” is something tangible “owned” by a natural person (or persons), a corporation, or a unit of government. But such a response is inaccurate from a lawyer’s viewpoint for at least two reasons: (1) it confuses “property” with the various subjects of “property,” and (2) it fails to recognize that even the subjects of property may be intangible.

    For a lawyer, “property” is not a “thing” at all, although “things” are the subject of property. Rather, as Jeremy Bentham asserted, property is a legally protected “expectation * * * of being able to draw such or such an advantage from the thing” in question [ . . . .][2]

    Black’s Law Dictionary (5th ed. 1979) states that “[i]n the strict legal sense, [property is] an aggregate of rights which are guaranteed and protected by the government” and that the term property “includes not only ownership and possession but also the right of use and enjoyment for lawful purposes.”

    By contrast, Barron’s Law Dictionary (2d ed. 1984) defines property as “one’s exclusive right to possess, use, and dispose of a thing” [ . . . ] “as well as the object, benefit, or prerogative which constitutes the subject matter of that right.”

    Property law, in systems derived from English common law, is divided into personal and real property. Gray & Gray (199 8) describe the definition of property in the modern sense as oscillating between ‘competing models of property as a fact, property as a right, and property as a responsibility’[3] Declared ownership in and of itself is insufficient to constitute property in a legal sense. Rather, the notion of property arises where one can have his/her right to land or chattels respected and enforced by a court of law. Therefore to possess good title (and thus enforceable rights) on property one must acquire it legitimately, according to the laws of the jurisdiction in which one seeks enforcement.

    [edit] Theory of property

    [edit] Early American theory

    James Wilson, U.S. Supreme Court Justice and professor of law at the University of Pennsylvania, in 1790 and 1791, undertook a survey of the philosophical grounds of American property law. He proceeds from two premises: “Every crime includes an injury: every injury includes a violation of a right.” (Lectures, III, ii.) The government’s role in protecting property depends upon an idea of right. Wilson traces the history of property in his essay On the History of Property. In his lecture, “Of the natural rights of individuals,” (Lectures II, xii) he articulates related contemporary theory.

    That theory was brought to a focus on the question of whether man exists for the sake of government, or government for the sake of man – a distinction which may derive from, or lead to, the question of natural and absolute rights, and whether property is one of them. While he doubts this is so, he nonetheless states: “In his unrelated state, man has a natural right to his property, to his character, to liberty, and to safety.” James Wilson asks whether “the primary and principal object in the institution of government… was… to acquire new rights by human establishment? Or was it, by a human establishment, to acquire a new security for the possession or the recovery of those rights….?” He indicates a preference for the latter.

    In the opening sentence of On the History of Property, he states quite clearly: “Property is the right or lawful power, which a person has to a thing.” He then divides the right into three degrees: possession, the lowest; possession and use; and, possession, use, and disposition – the highest. Further, he states: “Man is intended for action. Useful and skilful industry is the soul of an active life. But industry should have her just reward. That reward is property, for of useful and active industry, property is the natural result.” From this simple reasoning he is able to present the conclusion that exclusive, as opposed to communal property, is to be preferred. Wilson does, however, give a survey of communal property arrangements in history, not only in colonial Virginia but also ancient Sparta.

    [edit] Property rights and contractual rights

    Property rights are rights over things enforceable against other persons. By contrast, contractual rights are rights enforceable against particular persons. Property rights, however, may arise from a contract, so there is an overlap between the two systems of rights. In relation to the sale of land, for example, two sets of legal relationships exist alongside one another: the personal right to sue for damages on the contract, and the proprietary right exercisable over the thing.

    A separate distinction is evident where rights granted are insufficiently substantial to confer on the non-owner a definable interest right in the thing. The clearest example of these rights is the licence. In general, even if licences are created by a binding contract, they do not give rise to proprietary interests.

    [edit] Property rights and personal rights

    Property rights are also distinguished from personal rights. Practically all contemporary societies acknowledge this basic ontological and ethical distinction. In the past, groups lacking political power have often been disqualified from the benefits of property. In an extreme form this has meant that persons have become “objects” of property right, legally “things”, or chattels – see slavery. More commonly, marginalised groups have been denied legal rights to own property. These include Jews in England and married women in Western societies until the late 19th century.

    The dividing line between personal rights and property rights is not always easy to draw. For instance, is one’s reputation property which can be commercially exploited by affording property rights to it? The question of the proprietary character of personal rights is particularly relevant in the case of rights over human tissue, organs and other body parts.

    There have been recent cases of women being subordinated to the fetus, through the imposition of unwanted caesarian sections. English judges have recently made the point that such women lack the right to exclusive control over their own bodies, formerly considered a fundamental common law right. In the United States, a “quasi-property” interest has been explicitly declared in the dead body. Also in the United States, it has been recognised that people have an alienable proprietary “right of publicity” over their “persona”. The patenting of biotechnological processes and products based upon human genetic material may be characterised as creating property in human life.

    [edit] Classification

    Property law is characterised by a great deal of historical continuity and technical terminology. The basic distinction in common law systems is between real property (land) and personal property (chattels).

    Before the mid-19th century, the principles governing the devolution of real property and personal property on an intestacy were quite different. Though this dichotomy does not have the same significance anymore, the distinction is still fundamental because of the essential differences between the two categories. An obvious example is the fact that land is immovable, and thus the rules that govern its use must differ. A further reason for the distinction is that legislation is often drafted employing the traditional terminology.

    The division of land and chattels has been criticised as being not satisfactory as a basis for categorising the principles of property law since it concentrates attention not on the proprietary interests themselves but on the objects of those interests.[4] Moreover, in the case of fixtures, chattels which are affixed to or placed on land may become part of the land.

    Real property is generally sub-classified into:

    1. corporeal hereditaments – tangible real property (land)
    2. incorporeal hereditaments – intangible real property such as an easement of way

    [edit] Possession

    The concept of possession developed from a legal system whose principal concern was to avoid civil disorder. The general principle is that a person in possession of land or goods, even as a wrongdoer, is entitled to take action against anyone interfering with the possession unless the person interfering is able to demonstrate a superior right to do so.

    In the United Kingdom, the Torts (Interference with Goods) Act 1977 has significantly amended the law relating to wrongful interference with goods and abolished some longstanding remedies and doctrines.

    [edit] Transfer of property

    The most usual way of acquiring an interest in property is as the result of a consensual transaction with the previous owner, for example, a sale or a gift. Dispositions by will may also be regarded as consensual transactions, since the effect of a will is to provide for the distribution of the deceased person’s property to nominated beneficiaries. A person may also obtain an interest in property under a trust established for his or her benefit by the owner of the property.

    It is also possible for property to pass from one person to another independently of the consent of the property owner. For example, this occurs when a person dies intestate, goes bankrupt, or has the property taken in execution of a court judgment.

    [edit] Priorities

    Occasionally, as a result of fraud or mistake, several people claim interests in one object, the claims being inconsistent with each other. This may arise where the person purporting to create or transfer the interest has a valid title, but purports to create several interests wholly or partially inconsistent with each other. In this case it is necessary for the courts to resolve the priorities conflict by determining the ranking of these interests. The need to resolve such conflicts suggests that different classes of proprietary interests have different spheres of enforceability depending on their place in the hierarchy.

    [edit] Leases

    Over the centuries, leases have served many purposes and the nature of legal regulation has varied according to those purposes and the social and economic conditions of the times. Leaseholds, for example, were mainly used for agricultural purposes until the late 18th century and early 19th century when the growth of cities in industrialised countries had made the leasehold an important form of landholding in urban areas.

    The modern law of landlord and tenant in common law jurisdictions retains the influence of the common law and, particularly, the laissez-faire philosophy that dominated the law of contract and the law of property in the 19th century. With the growth of consumerism, consumer protection legislation recognised that common law principles that assume equal bargaining power between the contracting parties are acknowledged to work hardship when that assumption is inaccurate. Consequently reformers have emphasised the need to assess residential tenancy laws in terms of protection they provide to tenants. Legislation to protect tenants is now common.

    [edit] See also

    * Claim club

    [edit] References

    1. ^ Makdisi, John (2005), Islamic Property Law: Cases and Materials for Comparative Analysis with the Common Law, Carolina Academic Press, ISBN 1594601100
    2. ^ R.A. Cunningham, W.B. Stoebuck & D.A. Whitman, The Law of Property, p. 1 (West 1984) (footnote reference omitted; italics and quotation marks in the original).

  238. Delia should probably talk to an attorney and sue for wrongful foreclosure, do a quiet title action
    Obviously the servicer did order the foreclosure, the investor got paid in full by the insurance policy, the foreclosure attorney may be chasing someone for their fees.

    some foreclosure attorneys are mad as hell since they cannot collect their fees from SOME LENDERS and SERVICERS and of COURSE UNKNOWN INVESTORS. WHAT GOES AROUND COMES AROUND.

  239. Delia Aguilar,

    I would like to get some help on where the squatters rights Laws could be located.Squatting was never banned in America as far as I know.

    Squatting Laws were enacted in England some time ago.

    Squatting could become a very good defense and a powerful means to occupy your home.I would love to start a discussion on this topic if possible.

  240. Just found out that my whom that foreclosed on 04/2007 is still abondoned by investor. City official cannot pin point or locate owner. City officials sent out a certified letter to US Naitonal Ass, and that was in Sept 2008. Letter is to clear violations on property. No response from them.
    Per city officials find out what my squatter rights are? Its in California

    Thank you, ……………… Squatter

  241. livinglies.wordpress.com – great domain name for blog like this)))

  242. Hi Neil – what would you say if I shared that my home, which is in foreclosure after we defaulted on a previous loan modification, was purchased via a FHA, 30-year, fixed loan without our providing any down payment? The original loan was worked, and re-worked multiple times, to reflect a “gift” which of course was not real. The numbers were inflated to reflect a down payment. Please help me as soon as possible. The Mortgage Mitigation Company is very excited about this but I’m wary of such a company. Why would our mortgage company work with them when they refuse to work with us???

  243. Oops! Got so busy writing that I forgot to post the link. Here it is:


  244. Check out this Texas trial about to get underway. This is an example of the extent to which those in the mortgage business will go. Interestingly, there was not even any default in payment of interest or principal as a basis for foreclosure. Should be interesting to watch as the case unfolds and may provide additional insight into the inner workings of the loan servicer organizations.

  245. I just filed this today in Illinois:


    1. As a result of the Defendants violation of the Truth-In-Lending Act as stated in the complaint, the Plaintiffs Michael R. Linton and Peggy M. Linton hereby exercise their extended right of rescission and therefore demand rescission according to 15 USC §1635(f); Reg Z §§226.15(a)(3), 226.23(a)(3). Liability for violating TILA runs to the lender. Once the loan is sold, the liability, as related to rescission, extends to the assignee as well. 15 USC §1641(c). The regulations set up a three-step process to rescind a loan.
    1.1. First, the borrower must notify the lender, in writing, of the cancellation of the loan. While the notice must be in writing, it can be transmitted by mail, telegram, or other means. Reg Z §§226.15(a)(2), 226.23(a)(2).
    1.2. Once the loan is rescinded, the security interest or lien becomes automatically void, by operation of law. 15 USC §1635(b); Reg Z §§226.15(d)(1), 226.23(d)(1). The note also is voided. The lender’s interest in the property is “automatically negated, regardless of its status and whether or not it was recorded or perfected.” Official Staff Commentary §§226.15(d)(1)–1, 226.23(d)(1)–1.
    1.3. Within 20 days of receipt of the notice of cancellation, the lender must return to the borrower any money or property that has been given to anyone in connection with the loan. 15 USC §1635(b); Reg Z §§226.15(d)(2), 226.23(d)(2). The lender must also take steps to reflect that the security interest has terminated.
    Failure to respond to the rescission notice as spelled out above results in another violation and an addition award of statutory damages. White v. WMC Mortgage, 2001 U.S. Dist. LEXIS 15907, at * 5 (E.D. Pa. July 31, 2001); Mayfield v. Vanguard Savings & Loan, 710 F. Supp. 143, 145 (E.D. Pa. 1989).
    Liability for TILA claims for monetary damages runs against assignees where the violation is apparent on the face of the loan documents. 15 U.S.C. § 1641(a).
    Statute of Limitations
    • 1 year for affirmative claims. 15 U.S.C. § 1640(e);
    • 3 years for rescission. Beach v. Ocwen, 523 U.S. 410 (1998);
    • Unlimited as a defense to foreclosure in the nature of a recoupment or setoff. 735 ILCS 5/13-207. Bank of New York v. Heath, 2001 WL 1771825, at *1 (Ill. Cir. Oct. 26, 2001).
    Prepared and submitted by:
    Michael R. Linton / PRO SE Plaintiff
    Peggy M. Linton / PRO SE Plaintiff

  246. Martin: Yes you can rescind but the servicer will most likely reject your rescission which means you need to make it part of the court proceeding. Check with counsel because there are a number of strategic alternatives to motions etc.

  247. Neil

    Doing a TILA audit I found that my final TILA disclosure statement I signed at closing on my primary home refinance shows “Finance Charge” with an “e” next to it, meaning estimated. I found least 400 of understated finance charges on my final HUD one. Question is can I rescind the loan based on the estimated finance charges on my final TILA statement?
    Yes, my loan is in foreclosure.

    Thanks in advance for all your help.


    Martin Lagares

  248. Neil:

    You can add Equity One to the list of preditory lenders.

    When I was in court today, I saw this 1st hand.

    There was an elderly couple (late 70’s/early 80’s) who were losing there home to foreclosure. The man explained to the judge that he was on Social Security and took out a home equity loan to pay off his medical bills. When his loan doubled, he could no longer afford the payments. They were given an ARM by Equity One.

    Now, why would a loan company do that to an elderly couple living on a fixed income?

    This just made me sick!!!


  249. dny: Only Oregon has a decision that goes along with the “tender obligation” stated in that article. In all other cases, the “lender” is obligated to (a) say they are not the holder of the loan so you need to look elsewhere (b) send a satisfaction of mortgage and satisfaction of the obligation or (c) file a declaratory action. In all other states that I have seen, the rescission by operation of law (unless the “lender” files something in court for declaratory relief cancels the transaction), voids the security instrument and voids the note. The obligation is still outstanding but the note isn’t and neither is the mortgage. THEN the obligation comes up and it is subject to all your claims, defenses, counterclaims. When all is said and done you probably owe little or nothing — but if you DO owe something it is unsecured, because there is no mortgage, deed of trust etc..

  250. Do you all agree with this attorney’s appraisal of TILA rescission ( http://www.mfi-miami.com/tag/respa )? I haven’t read anything about “tender obligation” on this web site.


  251. Amen.

  252. Pro Se whips Marshall Watson ESQ stand in again.

    11 circuit district Court Miami FL.

    He stodd six foot tall,defendant was half the size and pro se.

    The case is a retraction of discovery filed, heard by judge Wilson occurred today the Pro se Litigant performed very well(my opinion).

    Just a small procedural win with little significance caused the Plaintiff to become a wee bit undone mentally and was embarrassed by the Judge.

    These lawyers seem to have little legal talent when faced with a big stick waving Pro Se,they just do not seem to know what to do the Pro Se operative has said that the Promissory note is a fake as usual.

    I was an observer in the court.

  253. If there are images in this attachment, they will not be displayed. Download the original attachment

    Page 1
    1 of 31 DOCUMENTS

    Copyright 2009 SourceMedia, Inc.
    All Rights Reserved

    American Banker

    January 12, 2009 Monday

    SECTION: MARKET MONITOR; Pg. 1 Vol. 174 No. 7

    LENGTH: 794 words

    HEADLINE: Bankruptcy Bill Pact Pits Citi vs. Banks

    BYLINE: Cheyenne Hopkins and Emily Flitter

    WASHINGTON – It turns out the dam is still standing.
    Despite Sen. Charles Schumer’s confident prediction last week that an agreement with Citigroup Inc. on mortgage
    bankruptcy legislation would bring other banking companies on board, industry sources said Friday that they would
    press for a narrower bill.
    For instance, the American Bankers Association is arguing that only nontraditional mortgages should be eligible for
    bankruptcy protection.
    “A key point here is that this focuses on all mortgages,” said Floyd Stoner, the ABA’s head lobbyist. “A lot of the
    mortgages that caused the financial crisis were nontraditional mortgages that most banks in America did not make. We
    believe that is an appropriate focus. … Having nontraditional mortgages subject to cramdown in bankruptcy is an
    effective way to prevent a recurrence of the focus on these nontraditional mortgages.”
    Industry lobbyists are also pressing for a sunset date on the legislation, better protection of Federal Housing
    Administration loans, and a stronger requirement that other modification efforts be pursued before a bankruptcy filing.
    Under the Citi deal, a borrower would have to contact the lender to seek a modification at least 10 days before
    filing for protection from creditors. Several lobbyists said lenders need more time.
    “Citi’s an important player, but we’ve got virtually a unanimous position from the rest of the industry that thinks this
    is the wrong way to go,” said Bill Himpler, executive vice president of federal affairs for the American Financial
    Services Association.
    Citi did persuade lawmakers to limit the bill only to loans originated before the enactment date. Though lenders
    have opposed the bill for two years, several lobbyists conceded that Citi’s agreement weakened their bargaining position
    and gave the bill new momentum. Most say they will need to reach some sort of compromise.
    Democrats, who have strengthened their majorities in Congress and are poised to seize the White House, have
    made allowing judges to modify mortgages in the bankruptcy process a priority.
    “With the Democrats having such large margins in the House and the Senate, it was already going to be an uphill
    battle to stop bankruptcy reform,” said Jaret Seiberg, an analyst with Stanford Group Co. “Citigroup’s endorsement of
    the legislation makes that task infinitely more difficult.”
    Many industry sources argued that Citi was wrong to cut a deal on its own – and that the company should have
    pushed for more concessions. “I understand why Citi negotiated this, but I wish they’d gotten a better deal,” said one
    industry lobbyist.
    Another said Citi had alienated colleagues in the industry. “The words I’ve heard and others describe is livid,
    infuriated, exasperated. There ain’t a whole lot of love out there for Citi.”
    Several sources said Citi is not in a position to lead the industry on the issue.
    “I don’t know what kind of standing Citi has in the industry,” said Ron Ence, vice president of congressional
    relations at the Independent Community Bankers of America. “We have a company, along with others, that has engaged
    in reckless lending in the past … and now they want to cut a deal.”
    A spokesman for Citi did not comment by press time.
    The other large banking companies also stayed quiet. Representatives from Wells Fargo & Co. last week referred
    calls to the Mortgage Bankers Association, which remains adamantly opposed to the bill.
    A spokesman for JPMorgan Chase & Co. would not discuss the Citi deal. A Bank of America Corp. representative
    did not return calls seeking comment.
    The Financial Services Roundtable, whose members include Citi, also remains opposed to the mortgage bankruptcy
    “Every company has to do what it has to do,” said Scott Talbott, executive vice president of the roundtable. “The
    rest of the industry opposes the current bill, so they at this point are alone.”
    Citi did not have much leverage after receiving $45 billion from the Treasury Department’s Troubled Asset Relief
    Program, and the New York company did generate some good will among lawmakers.
    “Citigroup, by agreeing to this, managed to change its perception on Capitol Hill,” said Mr. Seiberg. “They went
    from being an example of what was wrong with the industry to the white knight that is willing to help troubled
    borrowers. That’s a pretty dramatic turnaround.”
    Adam Levitin, an associate professor at Georgetown University Law Center, said opponents of the legislation face
    high hurdles.
    Other lenders “can fight this, but they’re going to have a much more difficult position to argue,” he said. “When
    they say this will hurt the stability of financial institutions, the response is going to be, ‘Well, here’s Citi saying this. If
    Citi really thought that, they wouldn’t be signing on to this.’ ”
    URL: http://www.americanbanker.com/
    LOAD-DATE: January 9, 2009
    Bankruptcy Bill Pact Pits Citi vs. Banks American Banker January 12, 2009 Monday

    Banks Seek More Limits on Bankruptcy Judges’ Authority to Rework Mortgages
    BYLINE: Renae Merle and Binyamin Appelbaum; Washington Post Staff Writers
    Citigroup’s support for a plan to let bankruptcy judges modify the terms of troubled mortgages and help borrowers
    avoid foreclosure left its banking industry counterparts on the defensive yesterday, insisting that the plan would do more
    harm than good.
    After years of failed attempts, congressional supporters of the proposed law are cautiously optimistic about its
    prospects. And privately, banking executives acknowledge that some type of legislation is likely to pass, but they said
    they want to limit the loans eligible to be modified.
    The major banking trade groups held a conference call with members after the Citigroup announcement Thursday,
    and all of the banks affirmed their opposition to the deal, according to a person on the call. Industry groups including
    the Financial Services Roundtable, the American Bankers Association, the Mortgage Bankers Association and the
    American Securitization Forum have all issued statements opposing the deal.
    But, according to a congressional aide, two other large banks are actively negotiating with Sen. Richard J. Durbin
    (D-Ill.) to be included in the agreement.
    This comes as more borrowers are being swept into a deepening foreclosure crisis despite government and industry
    efforts to help. Under the legislation being considered, a bankruptcy judge could change the terms of a loan by reducing
    its interest rate, extending its length, or lowering the principal or loan balance, known as cramdown provisions. The law
    would apply only to existing loans and not to loans made after the law passed. Currently, judges are allowed to modify
    the terms of a mortgage for a second or vacation home but not a primary residence.
    In its agreement with Senate leaders, including Durbin and Sen. Charles E. Schumer (D-N.Y.), Citigroup won some
    concessions. The agreement added a requirement that homeowners contact their lender at least 10 days before filing for
    The industry wants to limit the cramdowns to subprime borrowers or to homeowners driven into bankruptcy by an
    unaffordable mortgage.
    “The fix doesn’t go far enough to address all of the problems. It’s a good first step, but there is a lot more to be done
    to make the bill targeted,” said Scott E. Talbott, senior vice president for government affairs at the Financial Services
    Roundtable. “We are continuing to work to limit the negative effects, to make it the least worst way to do the wrong
    While the agreement limits the impact of the provision to existing mortgages, many investors assume Congress will
    extend it, amplifying the potential losses to lenders, they said. If the borrower sells the home after the modification and
    reaps a profit, lenders should be able to secure a share, they maintain.
    “Anything that is so broad, even if limited in time, is a grave concern,” said Floyd Stoner, executive director of the
    American Bankers Association. “We always believe this economy will recover. As it does, real banks are the engine of
    the recovery. We need to make sure that we don’t do things that make it more difficult for them to participate in that
    Such a change could also cause problems with loans insured by the Federal Housing Administration, an FHA
    official told a congressional panel yesterday. The government does not have legal authority to reimburse lenders for any
    losses caused by a cramdown, creating a disincentive for lenders to do business with the agency, said Phillip Murray,
    who handles all single-family business for the FHA.
    Durbin thinks the current version of the agreement is fair, but he is open to further discussions, said Max
    Gleischman, his spokesman.
    The industry groups “will be the last to come out for this proposal because they work by consensus,” Schumer said
    in an e-mailed statement. “But we expect more individual banks to be for this.”
    Supporters argue that the benefit of the provision, which they estimate could help 600,000 to 800,000 homeowners,
    extends beyond borrowers in bankruptcy. Lenders are more likely to attempt aggressive modifications when they can
    still control the terms, rather than allow a judge to set the limits, they say.
    “We really let industry dictate what the solution would be up until now, and there is a growing recognition that that
    is not working. This [foreclosure] problem exploded under these voluntary programs,” said Maureen Thompson,
    legislative director for the National Association of Consumer Bankruptcy Attorneys, which supports the change.
    The Citigroup deal strengthens the position of cramdown proponents, according to Brian Gardner, a policy analyst
    at the investment bank Keefe, Bruyette & Woods.
    “The deal between Senate Democrats and Citigroup over bankruptcy cramdown legislation probably ensures
    passage of the bill — something that we already thought was highly likely,” he wrote in a note to clients yesterday.
    The deal came as a surprise to many in the industry, though Citigroup, Bank of America and J.P. Morgan Chase
    have spoken with Schumer’s office about the bankruptcy provision, according to sources familiar with the talks. Bank of
    America and J.P. Morgan declined to comment. Schumer’s and Durbin’s aides declined to confirm which other firms
    have discussed the bankruptcy bill.
    Staff writer Dina ElBoghdady contributed to this report.
    Industry Recoils at Citi’s Mortgage Deal; Banks Seek More Limits on Bankruptcy Judges’ Authority to Rework
    Mortgages The Washington Post January 10, 2009 Saturday
    Page 5
    GRAPHIC: IMAGE; Sen. Richard J. Durbin.
    LOAD-DATE: January 10, 2009
    Page 5
    Industry Recoils at Citi’s Mortgage Deal; Banks Seek More Limits on Bankruptcy Judges’ Authority to Rework
    Mortgages The Washington Post January 10, 2009 Saturday
    3 Copyright 2009 MediaNews Group, Inc. and ANG Newspapers
    All Rights Reserved
    Chico Enterprise-Record (California)
    January 9, 2009 Friday
    LENGTH: 628 words

    HEADLINE: Citi reaches deal with lawmakers on home loans
    BYLINE: Chico Enterprise-Record
    WASHINGTON (AP) Democratic lawmakers have reached a deal with Citigroup Inc. on a plan to let bankruptcy
    judges alter home loans in an effort to prevent foreclosures and urged other lenders to follow suit.
    The lawmakers aim to attach the plan to President-elect Barack Obama’s economic stimulus legislation, and said
    Thursday the change in bankruptcy law could ease the foreclosure crisis that has dragged the economy into the worst
    recession in decades.
    The compromise between Citigroup and Sens. Richard Durbin of Illinois, Charles Schumer and Christopher Dodd
    of Connecticut, would be limited to loans made before the bill is signed. Obama has said he backs the concept.
    Schumer said he received calls Thursday from several banks which he did not name indicating their potential
    interest in supporting the idea.
    “This is a breakthrough day,” the senior senator from New York said in a news conference on Capitol Hill. “We’ve
    been stymied because the banking industry opposed this simple provision, which is key to getting a floor to the housing
    In a letter to lawmakers, New York-based Citigroup’s chief executive, Vikram Pandit, said the change to
    bankruptcy law “will serve as an additional tool to the extensive home-retention programs already in place to help
    at-risk borrowers.”
    The so-called “cramdown” proposal has been backed by Democrats over the past year as a potential solution to the
    foreclosure crisis. Consumer advocates and Democrats say it would prod the lending industry to be more aggressive
    about modifying loans because of the looming threat of having a bankruptcy judge involved.
    But the lending industry has battled fiercely against the idea, arguing it would force lenders to hike mortgage rates
    because they would have to charge more for loans that could be altered later by a judge.
    “This would hurt the housing market at the exact time we’re trying to stimulate it,” said Scott Talbott, chief lobbyist
    at the Financial Services Roundtable, which represents large banks and insurance companies.
    To qualify, borrowers would need to demonstrate that they have asked their lender for a loan modification before
    filing for bankruptcy.
    Currently, a 1993 Supreme Court decision bars judges from altering first mortgages on primary homes, though such
    changes are allowed on loans for vacation homes, motorcycles, boats and other kinds of property.
    Consumer advocates say that is unfair, while mortgage lenders contend it benefits the vast majority of borrowers
    who don’t fall into bankruptcy because it keeps mortgage credit for primary residences cheap.
    Other attempts by the government to deal with the surge in foreclosures over the past two years haven’t made much
    of a dent in the problem.
    A federal program, dubbed Hope for Homeowners, was intended to let 400,000 troubled homeowners swap risky
    loans for conventional 30-year fixed-rate loans with lower rates. But the early results have been disappointing, with
    fewer than 400 applications since the program’s launch on Oct. 1.
    In an interview earlier this week, a lobbyist for the mortgage industry vowed to keep the bankruptcy judge plan out
    of the economic recovery bill.
    “We think that’s an unwise move that could delay the stimulus package,” said Francis Creighton, the Mortgage
    Bankers Association’s chief lobbyist.
    In a speech Thursday at George Mason University outside Washington, Obama asked Congress to work with him
    “day and night, on weekends if necessary” to pass an economic revival plan within the next few weeks so that it can be
    ready for his signature shortly after he takes office on Jan. 20
    Obama promised to rewrite financial regulations and pledged to launch “a sweeping effort to address the
    foreclosure crisis so that we can keep responsible families in their homes.”
    LOAD-DATE: January 9, 2009
    Page 7
    Citi reaches deal with lawmakers on home loans Chico Enterprise-Record (California) January 9, 2009 Friday
    Page 8
    4 of 31 DOCUMENTS
    Copyright 2009 ENPublishing
    All Rights Reserved
    Global Banking News
    January 9, 2009 Friday
    LENGTH: 109 words
    HEADLINE: Citi to support loan modification rules
    Citigroup, Inc (NYSE: C) has announced that it is working with
    authorities to create legislation that would modify loan-repayment
    The bank said that it is working with senators to create rules that
    would help bankruptcy judges to modify individual mortgages, which
    would ultimately help customers to avoid foreclosures.
    The financial services industry, which was against the so-called
    ‘cramdown’ rules that forced banks to accept modified mortgages from
    customers who have filed for bankruptcy, is now becoming more open to
    such measures in view of the financial crisis.
    [Editorial queries for this story should be sent to
    LOAD-DATE: January 9, 2009
    Page 8
    Page 9
    5 of 31 DOCUMENTS
    Copyright 2009 MarketWatch.com Inc.
    All Rights Reserved
    January 9, 2009 Friday 5:50 PM EST
    LENGTH: 570 words
    HEADLINE: Citi in talks to sell brokerage business, reports say
    BYLINE: Alistair Barr, MarketWatch mailto:ABarr@marketwatch.com.
    Alistair Barr is a reporter for MarketWatch in San Francisco.
    SAN FRANCISCO (MarketWatch) — Citigroup Inc.’s brokerage business is reportedly for sale as the giant bank
    tries to recover from a near-collapse that’s left it on government life support.
    Citi (C) is in talks to sell its Smith Barney brokerage unit and its asset-management business, according to The
    Wall Street Journal. One option being seriously considered is a joint venture with Morgan Stanley (MS) , the newspaper
    said, citing unidentified people familiar with the situation.
    The joint venture would combine Smith Barney, which employs roughly 11,000 brokers, with Morgan Stanley’s
    8,000-strong brokerage unit. That would make it larger than the brokerage business being formed by Bank of America’s
    (BAC) acquisition of Merrill Lynch, CNBC reported.
    As part of the deal being discussed, Morgan Stanley would make a payment to Citi and end up with a majority
    stake in the joint venture. The firm would also have the right to increase its stake in future years, possible ending up
    with all the business, CNBC said.
    A Citi spokeswoman declined to comment. A spokesman for Morgan Stanley didn’t return a phone call and email
    seeking comment Friday afternoon.
    The news is the latest sign that Citi is falling further under the control of the government. In another indication of a
    potential reorganization of the bank, Robert Rubin, a senior counselor and director at Citi, stepped down on Friday.
    Citi, once the largest bank in the U.S., has been among the hardest hit by the financial crisis. It’s struggled with
    billions of dollars in exposure to collateralized debt obligations and other troubled mortgage-related assets and was one
    of the biggest users of structured investment vehicles, off-balance sheet financing entities that became popular with
    some banks during the credit boom.
    Page 9
    Page 10
    The bank lost $2.8 billion in the third quarter and has announced plans to cut more than 50,000 jobs. It was one of
    the first banks to get a government investment from the Treasury’s Troubled Asset Relief Program, receiving $25
    But Citi shares continued to slump, forcing the government to invest another $20 billion in the bank and guarantee
    most of a $306 billion pool of troubled assets if losses exceed $29 billion.
    The Nov. 24 agreement also gave the government control over executive bonuses and put caps on dividends at Citi.
    In recent days, the government has been tightening its grip on the bank. Citi agreed Thursday to drop its opposition
    to legislation introduced by Senate Democrats that would give bankruptcy judges the authority to eliminate some
    mortgage debt.
    These so-called mortgage cramdowns could help prevent foreclosures by cutting the principal owed by borrowers
    so it’s more in line with the current value of their homes. However, it could also cut into the value of mortgage
    securities, triggering more write-downs by banks. Until now, banks have been very reluctant to lower the principal
    owed on mortgages.
    “Why did Citigroup agree to support this legislation?” Dick Bove, a banking analyst at Ladenburg Thalmann, wrote
    in a note to investors on Friday.
    “When the government buys $52 billion in preferreds and helps guarantee a bank against losses on approximately
    $300 billion in loans it is going to get something in return,” he said. “It is going to get a compliant bank.”
    ©1997-2002 MarketWatch.com, Inc. All rights reserved. See details at
    LOAD-DATE: January 10, 2009
    Page 10
    Citi in talks to sell brokerage business, reports say MarketWatch January 9, 2009 Friday 5:50 PM EST
    Page 11
    6 of 31 DOCUMENTS
    Copyright 2009 The Monterey County Herald
    All Rights Reserved
    Monterey County Herald (California)
    January 9, 2009 Friday
    LENGTH: 614 words
    HEADLINE: Citi, lawmakers make deal on home loans
    BYLINE: The Monterey County Herald
    WASHINGTON (AP) Democratic lawmakers have reached a deal with Citigroup Inc. on a plan to let bankruptcy
    judges alter home loans in an effort to prevent foreclosures and urged other lenders to follow suit.
    Lawmakers aim to attach the plan to President-elect Barack Obama’s economic stimulus legislation, and said
    Thursday the change in bankruptcy law could ease the foreclosure crisis that has dragged the economy into the worst
    recession in decades.
    The compromise between Citigroup and Sens. Richard Durbin of Illinois, Charles Schumer and Christopher Dodd
    of Connecticut, would be limited to loans made before the bill is signed. Obama has said he backs the concept.
    Schumer said he received calls Thursday from several banks which he did not name indicating their potential
    interest in supporting the idea.
    “This is a breakthrough day,” the senior senator from New York said in a news conference on Capitol Hill. “We’ve
    been stymied because the banking industry opposed this simple provision, which is key to getting a floor to the housing
    New York-based Citi did not immediately comment on the announcement.
    The so-called “cramdown” proposal has been backed by Democrats over the past year as a potential solution to the
    foreclosure crisis. Consumer advocates and Democrats say it would prod the lending industry to be more aggressive
    about modifying loans because of the looming threat of having a bankruptcy judge involved.
    But the lending industry has battled fiercely against the idea, arguing it would force lenders to hike mortgage rates
    because they would have to charge more for loans that could be altered later by a judge.
    “This would hurt the housing market at the exact time we’re trying to stimulate it,” said Scott Talbott, chief lobbyist
    at the Financial Services Roundtable, which represents large banks and insurance companies.
    To qualify, borrowers would need to demonstrate that they have asked their lender for a loan modification before
    filing for bankruptcy.
    Page 11
    Page 12
    Currently, a 1993 Supreme Court decision bars judges from altering first mortgages on primary homes, though such
    changes are allowed on loans for vacation homes, motorcycles, boats and other kinds of property.
    Consumer advocates say that is unfair, while mortgage lenders contend it benefits the vast majority of borrowers
    who don’t fall into bankruptcy because it keeps mortgage credit for primary residences cheap.
    Other attempts by the government to deal with the surge in foreclosures over the past two years haven’t made much
    of a dent in the problem.
    A federal program, dubbed Hope for Homeowners, was intended to let 400,000 troubled homeowners swap risky
    loans for conventional 30-year fixed-rate loans with lower rates. But the early results have been disappointing, with
    fewer than 400 applications since the program’s launch on Oct. 1.
    In an interview earlier this week, a lobbyist for the mortgage industry vowed to keep the bankruptcy judge plan out
    of the economic recovery bill.
    “We think that’s an unwise move that could delay the stimulus package,” said Francis Creighton, the Mortgage
    Bankers Association’s chief lobbyist.
    In a speech Thursday at George Mason University outside Washington, Obama asked Congress to work with him
    “day and night, on weekends if necessary” to pass an economic revival plan within the next few weeks so that it can be
    ready for his signature shortly after he takes office on Jan. 20
    Obama promised to rewrite financial regulations and pledged to launch “a sweeping effort to address the
    foreclosure crisis so that we can keep responsible families in their homes.”
    Associated Press Writers Stephen Bernard and Jennifer Loven contributed to this report.
    LOAD-DATE: January 10, 2009
    Page 12
    Citi, lawmakers make deal on home loans Monterey County Herald (California) January 9, 2009 Friday
    Page 13
    7 of 31 DOCUMENTS
    Copyright 2009 National Public Radio (R)
    All Rights Reserved
    National Public Radio (NPR)
    SHOW: Morning Edition 10:00 AM EST NPR
    January 9, 2009 Friday
    LENGTH: 773 words
    HEADLINE: Citigroup Backs Measure to Help Avoid Foreclosures
    ARI SHAPIRO, host:
    This is Morning Edition from NPR News. I’m Ari Shapiro.
    Steve Inskeep is spending the day at member station KJZZ in Phoenix. I’m Renee Montagne. Lawmakers in
    Congress want to give bankruptcy judges the power to make lenders reduce payments for struggling homeowners. And
    news from Citigroup, it’s reached a deal with top Democrats on legislation to prevent home foreclosures. NPR’s Chris
    Arnold reports.
    CHRIS ARNOLD: The deal is a surprising about-face for Citigroup, and such industry support increases the
    chances that the legislation will get passed. Advocates say the proposal could keep more than a million American
    homeowners in their houses and out of foreclosure.
    Senator DICK DURBIN (Democrat, Illinois): We’ve had a breakthrough today.
    ARNOLD: Senator Dick Durbin gathered with other top Democrats in Washington to announce the deal.
    Sen. DURBIN: I want to commend Citigroup. They showed real leadership on this; first major financial institution
    to step forward and to say, we understand this is a crisis in America. The current efforts, as good as they may be, have
    not resulted in a dramatic change or reduction in the number of mortgage foreclosures.
    ARNOLD: Durbin and other Democrats have been pushing to let bankruptcy judges help fix the foreclosure mess.
    These judges intervene all the time for other kinds of loans: car loans, second houses, boats. If you get into financial
    trouble and can’t pay and declare bankruptcy, a judge can restructure your debt, lower your payments, so the amount
    that you owe to what you can realistically pay. That’s called a cramdown, but the law does not allow judges to do that
    for your primary residence. Dick Durbin.
    Sen. DURBIN: So, as a consequence going into this mortgage-foreclosure crisis, many people with their homes at
    stake, facing foreclosure, headed into bankruptcy, had no way to have the mortgage rewritten in the bankruptcy court,
    even if they still had an income and the change in interest rate or principle was all they need to stay in the home. So, I’ve
    been trying for almost two years now to change this.
    Page 13
    Page 14
    ARNOLD: But the industry fought the proposal. It argued that this would violate contract law, increase lenders’
    risks and therefore drive up interest rates for all borrowers. And the measure hasn’t had the votes to pass. But now, with
    Democrats more firmly in control of Washington, the pendulum is swinging towards greater regulation and more help
    for homeowners. Citigroup declined an interview, but in a letter to lawmakers, said it would now support the legislation
    if several changes were made. For example, Citi only wants judges to be able to cramdown existing loans, not new
    loans going forward. Lawmakers agreed to the changes, and many foreclosure-prevention advocates think all this is a
    very big deal.
    Mr. MIKE CALHOUN (President and Chief Operating Officer, Center for Responsible Lending): The Citi
    announcement is a real milestone in starting to take effective action to correct the housing crisis.
    ARNOLD: That’s Mike Calhoun with the Center for Responsible Lending, one of the groups that’s been working to
    pass a bankruptcy-reform bill. These groups stress that bankruptcy judges are not going to help people who don’t
    deserve it; say, people who didn’t have a job and lied on their loan application to buy a house that they totally couldn’t
    afford. Ira Rheingold heads up the National Association of Consumer Advocates.
    Mr. IRA RHEINGOLD (Executive Director, National Association of Consumer Advocates): You’re turning
    yourself over to the hands of a court who will look at it and say, OK, based on your income, and based on the real value
    of your property, can you afford this home? Based on the parameters that’ll get set out with this legislation.
    ARNOLD: Rheingold says a lot of people facing foreclosure have decent jobs; they just stretched too far to buy a
    house at the market’s peak. Some are stuck in high-interest loans, and with prices falling, they can’t refinance. He says
    it’s in the best interests of the lenders to be flexible with those people, so you don’t have all these foreclosures glutting
    the housing market and fouling up the whole economy. But Mike Calhoun says the industry has been paralyzed.
    Mr. CALHOUN: The real problem we have here is that the loans that are facing foreclosures were tangled up in
    these complicated securities that Wall Street created.
    ARNOLD: Calhoun thinks that even if most of the problem loans never end up in bankruptcy court, just the threat
    of a cramdown from a bankruptcy judge could break the logjam and prevent a lot of foreclosures. Chris Arnold, NPR
    LOAD-DATE: January 9, 2009
    Page 14
    Citigroup Backs Measure to Help Avoid Foreclosures National Public Radio (NPR) January 9, 2009 Friday
    Page 15
    8 of 31 DOCUMENTS
    Copyright 2009 The New York Times Company
    The New York Times
    January 9, 2009 Friday
    Late Edition – Final
    SECTION: Section B; Column 0; Business/Financial Desk; Pg. 1
    LENGTH: 850 words
    HEADLINE: Homeowner Relief Bill Wins Backer
    BYLINE: By CARL HULSE; Eric Dash in New York contributed reporting.
    In a move that would help troubled homeowners, Citigroup agreed to support legislation that would let bankruptcy
    judges adjust mortgages for at-risk borrowers, leading Congressional Democrats said on Thursday.
    Financial industry lobbyists, however, said the plan was flawed and vowed to fight legislation aimed at easing up
    on homeowners facing foreclosure.
    Members of the House and Senate said Citigroup had agreed to drop its opposition, providing no future mortgages
    are covered by the law.
    Citigroup, which is receiving more than $300 billion in bailout assistance, says that it is open to measures that
    would help homeowners.
    ”Citi shares this legislation’s goal to help distressed borrowers stay in their homes, and believes it will serve as an
    additional tool to the extensive home retention programs currently in place to help at-risk borrowers,” Vikram S. Pandit,
    the chief executive of Citigroup, wrote in a letter released Thursday night.
    The revised bill that Citigroup endorsed would allow bankruptcy judges to adjust the principal payments or
    interest rates on existing loans.
    Judges could also extend the terms on mortgage loans, according to the language of the bill, which would force
    lenders to take losses without a say in bankruptcy court proceedings.
    Senator Richard J. Durbin of Illinois, the No. 2 Senate Democrat, said he and fellow backers of the plan see it as a
    way to create more voluntary negotiations between struggling homeowners and financial institutions. So far, voluntary
    programs have proved ineffective, Democrats said.
    Citigroup had been part of the Bankruptcy Coalition of the Financial Services Roundtable, an industry group,
    since it aggressively lobbied for changes to the bankruptcy code in 2005.
    The coalition — a group of major trade associations and lenders like Bank of America, JPMorgan Chase and
    Page 15
    Page 16
    Wells Fargo — also fought to block the so-called cramdown legislation last year.
    No other bank has broken ranks with the industry on the proposed bill. Mr. Durbin said he hoped the move by
    Citigroup, should other banks and financial trade associations take the same stance, would lead to backing by enough
    Democrats and moderate Republicans to push the bill through.
    Senator Charles E. Schumer, Democrat of New York, said he had been contacting officials of top financial
    institutions for months, trying to persuade them that it would be to their advantage to back the plan since it could help
    stabilize a housing market that has severely hurt the economy.
    Three changes were made to the legislation sponsored by Mr. Durbin and Representative John Conyers Jr.,
    Democrat of Michigan and chairman of the House Judiciary Committee: only existing mortgages will be eligible;
    homeowners will have to certify they tried to contact their mortgage holder lenders regarding loan modifications before
    filing for bankruptcy; and only major violations of the Truth in Lending Act will cause lenders to forfeit their claims in
    a bankruptcy.
    Backed by bankers and other financial groups, many Congressional Republicans and some Democrats have balked
    at the plan to let bankruptcy judges alter mortgage terms on primary residences, saying that would drive up mortgage
    But officials said financial institutions were coming to the conclusion that it might be better to get a reduced loan
    payment through a bankruptcy or voluntary negotiations than to get no money at all.
    Aides to Senator Richard C. Shelby of Alabama, the senior Republican on the Senate banking committee, said he
    would have no immediate response to the plan.
    Scott E. Talbott, senior vice president for government affairs at the Financial Services Roundtable, said the group
    opposed cramdown legislation because it ”creates huge risks” for the mortgage market.
    He suggested the bill would force banks to further restrict lending and absorb huge losses as the economy
    worsens. He also suggested the bill would create perverse incentives that might encourage more homeowners to seek
    bankruptcy protection.
    Citigroup recently began negotiating with lawmakers, in a move that some observers suggest reflects its desire to
    win favor on Capitol Hill after receiving billions in funds from the bailout program.
    The government has invested $45 billion in Citigroup and agreed to guarantee about $269 billion in highly illiquid
    mortgage investments.
    ”If you’re looking at a way to get to the bottom of the economic problems in our country, this is the cause of our
    economic problems,” said Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking
    committee. ”It is the housing foreclosure problem. We’ve got to address that.”
    The plan has been backed by members of Congress who see it as a way to help distressed homeowners and
    balance federal relief efforts that have been aimed at Wall Street and the automobile industry.
    Mr. Schumer said he had been in contact with other large banks and he expected they would soon announce their
    support or at least drop their opposition to the plan.
    ”Citigroup’s action has broken the dam,” he said.
    URL: http://www.nytimes.com
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    Homeowner Relief Bill Wins Backer The New York Times January 9, 2009 Friday
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    Homeowner Relief Bill Wins Backer The New York Times January 9, 2009 Friday
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    9 of 31 DOCUMENTS
    Copyright 2009 The New York Times Company
    All Rights Reserved
    Information Bank Abstracts
    January 9, 2009 Friday
    SECTION: Section A; Column 6; Pg. 1
    LENGTH: 68 words
    BYLINE: Elizabeth Williamson
    Citigroup drops its opposition to Senate bill aimed at giving strapped homeowners more leverage in renegotiating
    their mortgages in bankruptcy court; measure could help broader efforts to renegotiate millions of underwater
    mortgages weighing on housing market; changes could help as many as 800,000 troubled borrowers remain in their
    homes; Mortgage Bankers Assn continues to oppose such cramdown measures (L)
    LOAD-DATE: January 10, 2009
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    10 of 31 DOCUMENTS
    Copyright 2009 The New York Times Company
    All Rights Reserved
    Information Bank Abstracts
    January 9, 2009 Friday
    SECTION: Section A; Column 6; Pg. 1
    LENGTH: 68 words
    BYLINE: Elizabeth Williamson
    Citigroup drops its opposition to Senate bill aimed at giving strapped homeowners more leverage in renegotiating
    their mortgages in bankruptcy court; measure could help broader efforts to renegotiate millions of underwater
    mortgages weighing on housing market; changes could help as many as 800,000 troubled borrowers remain in their
    homes; Mortgage Bankers Assn continues to oppose such cramdown measures (L)
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    11 of 31 DOCUMENTS
    Copyright 2009 The Washington Post
    All Rights Reserved
    The Washington Post
    January 9, 2009 Friday
    Suburban Edition
    DISTRIBUTION: Maryland
    LENGTH: 986 words
    HEADLINE: Citi Backs Letting Bankruptcy Court Modify Mortgages
    BYLINE: Renae Merle and Lori Montgomery; Washington Post Staff Writers
    Citigroup, one of the nation’s largest lenders, yesterday agreed to abandon its long-standing opposition to a plan to
    let bankruptcy judges modify the terms of mortgages, a move that could help millions of distressed borrowers stay in
    their homes, Senate Democratic leaders said yesterday.
    The startling turnaround reflects the changed political and economic realities of the nation’s deepening recession.
    Citigroup’s approval puts pressure on other lenders, potentially opening a new and more aggressive chapter in the
    government’s foreclosure-prevention effort by giving some of the most troubled borrowers leverage to force lenders to
    forgive debt.
    Democratic lawmakers praised the agreement as a breakthrough and pledged to add the measure to the economic
    stimulus package moving through Congress.
    Although the support of the banking industry would not guarantee passage, they said, it would go a long way
    toward breaking down opposition among Republicans and moderate Democrats who torpedoed the idea in the Senate
    last year. And lawmakers have yet to win the support of the Mortgage Bankers Association, a large lobbying group that
    has previously helped defeat the change.
    “I want to commend Citigroup,” said Sen. Richard J. Durbin (D-Ill.), the No. 2 Senate Democrat. “They showed
    real leadership on this, the first major financial institution to step forward and say, ‘We understand this is a crisis in
    America.’ The current efforts, as good as they may be, have not resulted in a dramatic change or reduction in the number
    of foreclosures.”
    Page 20
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    Since 2007, Durbin has pressed legislation that would allow a bankruptcy judge to change the terms of a loan by
    reducing its interest rate, extending its length, or lowering the principal or loan balance, known as cramdown
    provisions. Currently, judges are allowed to modify the terms of a mortgage for a second or vacation home but not a
    primary residence.
    Industry officials fought off the legislation, but the political calculations have changed. President-elect Barack
    Obama has said he supports the change, Democrats have a larger majority in Congress, and banks that have accepted
    federal aid are facing pressure to do more to help homeowners. Citigroup, for example, received about $45 billion in
    government assistance last year.
    Also, the foreclosure crisis has worsened in the past year, and industry and government efforts to keep people in
    their homes have had little impact. If the legislation passes, it could secure the kind of concessions the government has
    not been able to get from the industry through various voluntary foreclosure-prevention efforts.
    “This legislation would represent an important step forward,” Vikram S. Pandit, Citigroup’s chief executive, said
    yesterday in a letter to lawmakers. “Given today’s exceptional economic environment, we support its swift passage.”
    Citigroup’s involvement in negotiations was reported earlier this week by the Wall Street Journal.
    Sen. Charles E. Schumer (D-N.Y.) said the breakthrough came last week, when Lewis B. Kaden, a Citigroup vice
    chairman, called him.
    Citigroup’s primary request, lawmakers said, was that only existing mortgage-holders would have access to the
    bankruptcy courts, not those who take out loans in the future. The bank also asked for provisions that would require
    homeowners to contact their lender at least 10 days before filing for bankruptcy and that would not permit a judge to
    void the mortgage debt for minor violations of the Truth in Lending Act, a consumer-protection law.
    Durbin called those requests “eminently reasonable.” He said House leaders have also endorsed the changes,
    though some have done so with reluctance.
    “I think it should apply to all mortgages for all time,” said Rep. Brad Miller (D-N.C.), who joined the senators at
    the news conference. But in the face of the mounting foreclosure crisis, Miller said, “we have to do what’s possible.”
    The Mortgage Bankers Association said in a statement that it remains opposed. “We were surprised by the
    suddenness of the announcement and are still evaluating the proposed deal, but we believe there remain a number of
    crucial issues that need to be addressed,” the statement said.
    The legislation should be limited to subprime loans, the group said, and expire after a predetermined period. “This
    legislation would have a significant effect on the mortgage markets, and we believe it ought to be subject to the normal
    legislative process, including hearings.”
    Troubled homeowners not in bankruptcy could benefit more than those in the process, supporters of the measure
    said. Lenders are more likely to attempt aggressive modifications when they can still control the terms, rather than allow
    a judge to set the limits. “Right now, the biggest impediment to meaningful foreclosure prevention is the lack of
    willingness of investors to make significant modifications,” said John Taylor, president of the National Community
    Reinvestment Coalition, a consumer advocacy group. Changing the way bankruptcy judges handle primary residences
    “would force people to the table to hopefully come up with meaningful modifications.”
    The lending industry has argued that allowing bankruptcy judges to change the terms of these mortgages would
    raise costs for all home buyers. But Schumer said yesterday that by limiting the agreement to current mortgages, it
    would not affect future interest rates. And the financial and housing industries began to acquiesce in recent weeks,
    starting with the National Association of Home Builders. Its president, Jerry Howard, said last week that the economic
    Page 21
    Citi Backs Letting Bankruptcy Court Modify Mortgages The Washington Post January 9, 2009 Friday
    Page 22
    crisis is so severe that “every possible solution must be on the table.”
    The group is open to cramdowns but is still reviewing the details of the agreement negotiated by Citigroup, an
    NAHB spokesman said.
    Schumer said Citigroup’s support for the measure has since spurred “most of the major banks” to call his office,
    “wanting to hop on board.”
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    Citi Backs Letting Bankruptcy Court Modify Mortgages The Washington Post January 9, 2009 Friday
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    12 of 31 DOCUMENTS
    Copyright 2009 The Washington Times
    The Washington Times (D.C.)
    Distributed by McClatchy-Tribune Business News
    January 9, 2009 Friday
    ACC-NO: 20090109-WT-CITI-MRTGS-20090109
    LENGTH: 700 words
    HEADLINE: Citigroup to back rewriting mortgages
    BYLINE: David R. Sands, The Washington Times
    Jan. 9–Giant lender Citigroup announced Thursday it would support an effort in Congress to rewrite bankruptcy
    laws to give struggling homeowners the ability to rewrite the terms of their mortgages to avoid foreclosure — the first
    major crack in the banking industry’s opposition to the idea.
    Democratic lawmakers and consumer lobbies hailed the New York-based lender’s switch, saying it gave the drive
    to overhaul bankruptcy laws new political momentum and that the change might even be included in the massive
    economic stimulus package being sought by President-elect Barack Obama.
    “We think what will happen is that other financial institutions will now follow suit,” said Sen. Richard J. Durbin,
    Illinois Democrat. “We think this can be enacted and be part of the stimulus package.”
    “This breaks the dam,” added Sen. Charles E. Schumer, New York Democrat, who said his office had been in
    contact with other major mortgage lenders about the compromise foreclosure provision Citigroup is backing.
    Banks and mortgage lenders have fiercely opposed the process, known as a “cramdown” in the industry’s inelegant
    jargon. The practice allows the homeowner and bankruptcy court judges to impose easier rate terms before foreclosure.
    The industry has said the change would result in higher interest rates and closing costs as banks try to make up the
    The Mortgage Bankers Association said Thursday it was evaluating the Citigroup announcement, but added its
    opposition to the cramdown legislation had not softened.
    “We remain opposed to bankruptcy cramdown legislation because of the destabilizing effect it will have on an
    already turbulent mortgage market,” MBA President John A. Courson and Chairman David G. Kittle said in a joint
    statement. They said any deal should be limited to the riskiest “subprime mortgages” and that there should be a time
    limit on how long bankruptcy courts could have the power to modify them.
    “This legislation would have a significant effect on the mortgage markets and we believe it ought to be subject to
    the normal legislative process, including hearings and markup,” they said.
    Page 23
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    Efforts to pass the bankruptcy overhaul have stalled in the Senate, with an effort in the previous Congress failing to
    garner 40 votes.
    But Democratic lawmakers — and a number of top economic advisers to Mr. Obama — have expressed frustration
    that the government’s efforts to date to shore up Wall Street and the nation’s biggest banks have yet to make a major
    dent in the nation’s housing crisis.
    The Congressional Budget Office in its forecast for fiscal 2009 projected Wednesday that foreclosure rates “are
    likely to remain high while house prices continue to fall and the economy remains in recession” in the coming year.
    Even with the Bush administration moving to spend the $700 billion Wall Street bailout fund, it is estimated that
    more than 8 million U.S. homeowners — more than one in six — are at risk of foreclosure.
    Under a quirk in bankruptcy laws, most forms of personal debt, including vacation homes and other property, can
    be restructured by a bankruptcy court judge. But a mortgage on a primary residence cannot.
    With popular anger against banks rising, it was widely expected that the cramdown legislation will be a priority of
    the new Congress, where Democrats will enjoy expanded majorities in both chambers.
    Mr. Durbin and Mr. Schumer said they were able to win Citigroup’s endorsement by softening some of the
    provisions in the previous bankruptcy overhaul bill.
    Under the compromise, only existing mortgages would be covered by the new foreclosure rules, which would not
    apply to future home loans made by the banks. Homeowners would also be required to show that they had tried to
    contact their lender about reworking their loan before filing for bankruptcy.
    To see more of The Washington Times, or to subscribe to the newspaper, go to http://www.washtimes.com.
    Copyright (c) 2009, The Washington Times Distributed by McClatchy-Tribune Information Services. For reprints,
    email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to
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    Citigroup to back rewriting mortgages The Washington Times (D.C.) January 9, 2009 Friday
    Page 25
    13 of 31 DOCUMENTS
    Copyright 2009 Comtex News Network, Inc.
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    Copyright 2009 Briefing.com, Inc. All rights reserved.
    This content is provided to LexisNexis by Comtex News Network, Inc.
    January 8, 2009 Thursday 4:24 PM EST
    LENGTH: 3533 words
    HEADLINE: Briefing.com: Stock Market Update – 16:20 ET
    Stock Market Update
    Updated: 08-Jan-09
    The market at 16:20 ET
    Dow: -27.24…
    Nasdaq: +17.95… S&P: +3.08…
    NYSE Vol: 1.20 bln.. Adv: 1911.. Dec: 1177
    Nasdaq Vol: 2.01 bln.. Adv: 1666.. Dec: 1047
    Moving the Market
    Sector Watch
    Wal-Mart lowers fourth quarter outlook Majority of retailers report raft of weak December same-store sales results
    Weekly jobless claims decline, results better than expected
    Strong: health care facilities; gold; home entertainment; computer storage and peripherals; homebuilding;
    construction and engineering; coal and consumable fuel; home furnishing; aluminum; IT consersulting and services
    Weak: hypercenters; fertilizers and agricultural chemicals; personal products; apparel retailers; life sciences;
    industrial REITs; specialized finance; publishing and printing; electriconic manuf. services; paper packaging
    Page 25
    Page 26
    16:20 ET
    Dow -27.24 at 8742.46, Nasdaq +17.95 at 1617.01, S&P +3.08 at 909.73
    [BRIEFING.COM] Disappointing news from retail giant Wal-Mart (WMT 51.36, -4.18) helped invoke cautious
    trading ahead of tomorrow’s unemployment report. Still, stocks managed to finish at session highs with modest gains.
    Wal-Mart shaved more than a dime from its fourth quarter earnings outlook, which now ranges from $0.91 to $0.94
    per share. Wall Street was expecting $1.06 per share for the quarter.
    The company also disappointed investors by announcing December same-store sales increased by a
    less-than-expected 1.7%.
    Many other retailers posted same-store sales results that ranged from disappointing to dismal. Several lowered their
    earnings forecasts as well.
    Retailers were able to shake the weakness, though. They finished 0.8% higher.
    Cautious trading led to choppy action in the broader market.
    With December nonfarm payroll data due tomorrow morning, fewer investors were willing to buy on weakness
    stemming from such announcements as Wal-Mart’s, or that of Intel in the prior session. Adding to the apprehension is a
    soon-to-begin earnings season that is full of uncertainty.
    Economists expect December nonfarm payrolls to show a decline of 545,000 jobs. If a worse-than-expected figure
    emerges and investors can shake it off, that suggests an underlying bullish bias in the stock market. A sell-off will
    suggest caution.
    The significance of the report led many to look past the latest weekly jobless claims report. Initial claims for the
    ended Jan. 3 totaled 467,000, down 24,000 from the prior week. Many viewed the report with skepticism given strong
    seasonal factors at play.
    Eight of the 10 economic sectors finished higher.
    Consumer staples stocks (-1.3%) and financials (-0.2%) were the only two sectors to finish lower. Large-cap tech
    stocks, however, helped the Nasdaq outperform its counterparts.
    15:30 ET
    Dow -73.43 at 8696.27, Nasdaq +6.97 at 1606.03, S&P -1.96 at 904.69
    [BRIEFING.COM] Energy (+0.3%) continues to trade with a modest gain even though crude oil and natural gas
    closed lower.
    Natural gas finished 4.3% lower at $5.62 per contract. Crude oil finished its session roughly 3.5% lower at $41.15
    per barrel.
    Crude had been down as much as 4.9%, but up as much as 2.4%. Crude’s gains came early in morning trade.
    Gold had a strong session. It finished roughly 1.7% higher at roughly $856.35 per ounce. The upswing was helped
    by the dollar’s 0.9% decline, as measured by the dollar index.
    The advance in gold prices helped Newmont (NEM 37.42, +2.31) and Yamana (AUY 7.09, +0.32) reap strong
    Page 26
    Briefing.com: Stock Market Update – 16:20 ET Briefing.com January 8, 2009 Thursday 4:24 PM EST
    Page 27
    15:00 ET
    Dow -46.93 at 8723.27, Nasdaq +10.90 at 1609.96, S&P +0.17 at 906.82
    [BRIEFING.COM] The S&P 500 and the Nasdaq recently broke to fresh session highs. That has put the S&P 500
    back in the green.
    The Dow, however, continues to lag; it has been unable to shake its weakness and remains in the red.
    The upward push has come without concerted leadership, but rather a broad-based move. Eight of the 10 economic
    sectors are now in the green.
    14:30 ET
    Dow -80.04 at 8689.66, Nasdaq +0.65 at 1599.71, S&P -4.67 at 901.98
    [BRIEFING.COM] Stocks have climbed off their afternoon lows, but continue to trade with broad losses.
    Large-cap tech names are helping the Nasdaq make its way into the green, though. Large-cap tech’s strength is
    particularly distinguishable by the Nasdaq 100’s 0.1% advance.
    Microsoft (MSFT 19.99, +0.48) is a primary leader in the large-cap tech space.
    14:00 ET
    Dow -89.20 at 8680.50, Nasdaq -4.67 at 1594.39, S&P -6.38 at 900.27
    [BRIEFING.COM] Gold has been a strong performer this session. The commodity is currently up 1.6% to $855.00
    per ounce.
    The bounce in gold prices has Yamana Gold (AUY 7.06, +0.29) and Barrick Gold (ABX 32.67, +1.46) trading with
    handsome gains.
    The S&P 500 Gold Index is currently up nearly 5.5%. It was up as much as 7.6% earlier in the session.
    13:30 ET
    Dow -111.74 at 8657.96, Nasdaq -9.23 at 1589.83, S&P -8.55 at 898.10
    [BRIEFING.COM] Stocks have pulled up a bit after slipping to their lowest levels since this morning. The
    downturn has exacerbated losses in the consumer staples sector (-1.9%), which has been an underperformer for virtually
    the entire session.
    The sector’s weakness is largely attributable to Wal-Mart (WMT 50.69, -4.85). Wal-Mart announced disappointing
    December comparables and lowered its profit outlook. Shares of WMT continue to trade with weakness, but remain
    above the $50 psychological level with support at November lows.
    Procter & Gamble (PG 60.46, -0.62) is also trading as a laggard. The consumer staples giant is down for the second
    straight session.
    13:00 ET
    Dow -63.16 at 8706.54, Nasdaq -0.44 at 1598.62, S&P -2.88 at 903.77
    Page 27
    Briefing.com: Stock Market Update – 16:20 ET Briefing.com January 8, 2009 Thursday 4:24 PM EST
    Page 28
    [BRIEFING.COM] A reduced profit outlook and lower-than-expected December same-store sales results from
    Wal-Mart (WMT 50.98, -4.56) continue to pressure stocks.
    The retail giant and Dow component announced this morning that fourth quarter earnings are likely to range from
    $0.91 to $0.94 per share. That is down from its previous forecast, which called for earnings between $1.03 and $1.07
    per share. The revised outlook is now below Wall Street’s consensus forecast of $1.06 per share.
    Wal-Mart announced its December same-store sales increased by 1.7%. While the increase may sound like positive
    news amid challenging economic headwinds, many analysts were expecting more.
    Other retailers offered uglier announcements. Gap (GPS 12.89, -0.67) reported December comparable sales
    dropped 14%. It also lowered its earnings outlook. American Eagle (AEO 10.35, -0.27) reported a 17% drop in
    comparables. The company also lowered its outlook. Macy’s (M 11.29, +0.02) reported a 4% drop in December
    same-store sales. It will close 11 stores. Macy’s outlook fell short of the consensus estimate.
    Target (TGT 38.11, +1.10) reported a 4.1% drop in same-store sales, which was actually less severe than expected.
    However, the company warned that the markdowns necessary to attract customers will weigh on profitability.
    A better-than-expected initial claims report for the week ended Jan. 3 fell 24,000 to 467,000 from the prior week
    seemed as if it would offer some relief to the broader market’s concerns. Instead, the report was viewed with strong
    skepticism, given the recognition that strong seasonal factors were likely at play. Also, the data have no relevance to the
    government’s highly anticipated nonfarm payrolls report (due tomorrow morning).
    Action in the broader market remains rather choppy as investors seek direction. Stocks are off their session low,
    where they traded with a loss of roughly 1.1%, but losses remain broad-based as seven of the 10 economic sectors
    remain in the red.
    Energy has consistently outperformed the broader market this session. The sector is up 1.1% with help from
    heavyweights in the integrated oil and gas industry (+1.2%).
    Integrated players are catching a bid from investors looking to pick up their shares after they plunged in the prior
    session, when oil dropped 12%. Crude oil futures are currently down 1.4% to trade at $42 per barrel.
    12:30 ET
    Dow -76.46 at 8693.24, Nasdaq -2.70 at 1596.36, S&P -4.34 at 902.31
    [BRIEFING.COM] Trading remains choppy as market participants continue looking for direction.
    Small-cap stocks have emerged to outperform the broader market, though. The Russell 2000 is currently trading
    just above the unchanged mark.
    Shares of Think or Swim (SWIM 8.23, +2.58) are helping support the small-cap index. Shares of SWIM were
    acquired by TD Ameritrade (AMTD 13.19, -0.29) for some $606 million in stock and cash.
    12:00 ET
    Dow -100.19 at 8664.17, Nasdaq -5.41 at 1593.65, S&P -6.93 at 899.72
    [BRIEFING.COM] Stocks continue to trade with broad-based weakness as nine of the 10 economic sectors remain
    in the red.
    Despite the widespread losses, there are a few names performing exceptionally well.
    Page 28
    Briefing.com: Stock Market Update – 16:20 ET Briefing.com January 8, 2009 Thursday 4:24 PM EST
    Page 29
    Financial stocks, as a sector, are down 1.0%. However, mortgage insurers Ambac (ABK 1.66, +0.32) and MBIA
    (MBI 5.35, +0.32) have bounced higher amid renewed investor interest following word from The Wall Street Journal
    that Citigroup (C 7.11, -0.04) is leading mortgage modification talks with legislators.
    Citigroup’s move contrasts previous efforts by financial institutions to resist mortgage cramdowns. Though
    Citigroup’s involvement may suggest a form of concession, it allows Citi to have some influence over the matter’s
    11:30 ET
    Dow -79.41 at 8690.29, Nasdaq -1.73 at 1597.33, S&P -5.09 at 901.56
    [BRIEFING.COM] Oil and gas refiners (+2.6%) are providing the energy sector (+0.4%) with strong support.
    With crude oil futures trading 3.3% lower this session, and down more than 11% for the week, refiners are
    garnering interest as heating crack spreads widen. The spreads refer to the margin between the input crude costs and the
    output prices for the refined product.
    Valero (VLO 24.59, +0.91) is among the stronger performers in the refining industry this session. However, the
    market weight of integrated oil giant Exxon Mobil (XOM 79.35, +1.10) is providing the most positive influence to the
    energy sector.
    11:00 ET
    Dow -36.24 at 8733.46, Nasdaq +3.83 at 1602.89, S&P -0.59 at 906.06
    [BRIEFING.COM] A broad-based advance has taken the major indices to their best levels of the session. The move
    has helped retailers pull up from a 2.3% loss to trade just above the unchanged mark.
    Retailers initially fell under selling pressure after they reported dismal December same-store sales results. Many
    retailers lowered their earnings outlooks in response to the uncertain economic environment.
    Gap (GPS 12.91, -0.65) reported a 14% drop in same-store sales, and lowered its earnings forecast for fiscal 2008.
    Macy’s (M 11.49, +0.18) reported same-store sales fell 4%, and will close 11 stores. The company also guided fourth
    quarter earnings below the consensus estimate. American Eagle (AEO 10.27, -0.35) reported a 17% drop in
    comparables. The company also lowered its outlook for the fourth quarter.
    Retail giant Wal-Mart (WMT 51.74, -3.80) struck the strongest chord when it lowered its outlook for the fourth
    quarter. The company now expects earnings to range from $0.91 to $0.94 per share, which is below the consensus
    forecast of $1.06 per share. Wal-Mart previously forecast earnings between $1.03 and $1.07 per share.
    The company did report a 1.7% increase in same-store sales, but that number was below what many on Wall Street
    were expecting. Briefing.com anticipated Wal-Mart to post a 2.9% increase in December comparables.
    10:30 ET
    Dow -86.97 at 8682.73, Nasdaq -7.23 at 1591.83, S&P -5.44 at 901.21
    [BRIEFING.COM] Quick trading has induced some choppy moves in the stock market. Telecom (+0.4%) is now
    the only economic sector trading with a gain.
    Verizon (VZ 32.24, +0.34) is providing the sector with leadership after trading lower in each of this week’s
    previous sessions. According to an article released yesterday, Verizon expects to achieve growth in 2009, despite
    Page 29
    Briefing.com: Stock Market Update – 16:20 ET Briefing.com January 8, 2009 Thursday 4:24 PM EST
    Page 30
    economic headwinds. Hitting the wires today, Verizon has selected Microsoft (MSFT 19.80, +0.29) to provide portal,
    local, and Internet search as well as mobile advertising services to customers on its devices.
    The five-year agreement will go into effect in the second half of this year.
    10:00 ET
    Dow -100.11 at 8669.59, Nasdaq -12.42 at 1586.64, S&P -8.11 at 898.54
    [BRIEFING.COM] Energy had traded with a gain of as much as 0.9% in the first few minutes of action, but has
    since pared its gains to trade just above the unchanged mark.
    Undermining the sector are oil and gas drillers (-1.5%), which have succumbed to falling crude prices.
    Crude oil futures were recently indicated 0.7% lower at roughly $42.35 per barrel. The downturn comes on the
    back of a 12% slide registered in the prior session. Crude was down to $40.87 per barrel as demand concerns continue
    to weigh on prices.
    Natural gas surrendered earlier gains to trade near $5.83 per contract. That’s down $0.04 per contract. Natural gas
    inventory data is scheduled for 10:30 AM ET this morning.
    Gold is garnering some interest after falling in the prior session. The yellow metal was recently indicated 2% higher
    at $858.20 per ounce. Silver is also trading higher; it has added little more than $0.06 to trade at $11.17 per ounce.
    The mixed trading prices have the CRB Commodity Index trading with a relatively modest 0.2% loss.
    Early movers: Trading up: ANDS +55.5%, SWIM +40.9%, SHLD +17%, MF +14.5%, DMND +12.2%, WOLF
    +11%, TXCO +10.6%, CRXL +7.7%… Trading down: ULTA -23.9%, IO -18.5%, JCG -14.7%, AOB -14.7%, ISRG
    -13.4%, PMTC -12.5%, ARM -11.7%, MTW -11.7%, ZLC -11.3%, TWP -10.7%, EME -10.1%, MSM -10%, JWN
    -9.8%, DBRN -9.7%, SONC -9.7%, TCK -8.7%.
    09:45 ET
    Dow -61.41 at 8708.29, Nasdaq -6.18 at 1592.88, S&P -3.60 at 903.05
    [BRIEFING.COM] Stocks have started the session on relatively weak footing as all three major indices trade in the
    There are some select spots of strength, though; energy (+0.8%) and financials (+0.1%) are the only sectors trading
    09:15 ET
    Market is Closed
    [BRIEFING.COM] S&P futures vs fair value: -6.30. Nasdaq futures vs fair value: -6.00. U.S. stock futures point to
    a lower start for the major indices. However, due to their thinly traded nature, stock futures are imperfect indicators for
    where the stock market will trade throughout the entire session. Still, bullish investors will be challenged to overcome
    the high hurdle set by Wal-Mart’s (WMT) reduced outlook. Several other retailers are lowering their outlooks amid
    slumping same-store sales. The tempered guidance reflects the uncertainty of economic conditions. Initial jobles claims
    for the week ending Jan. 3 came in at a better-than-expected 467,000, but the data are likely influenced by seasonal
    factors associated with the holiday period.
    Page 30
    Briefing.com: Stock Market Update – 16:20 ET Briefing.com January 8, 2009 Thursday 4:24 PM EST
    Page 31
    09:00 ET
    Market is Closed
    [BRIEFING.COM] S&P futures vs fair value: -6.00. Nasdaq futures vs fair value: -6.00. U.S. stock futures have
    improved from earlier levels, but continue to trade below fair value. In overseas action, Japanâ??s Nikkei closed with a
    3.9% loss. The downturn snapped a seven-day winning streak. Tech stocks were hit especially hard. Energy stocks also
    tumbled as crude oil retreated. Traders in Hong Kong sent the Hang Seng 3.8% lower. Following a lowered forecast
    from Intel (INTC), computer maker Lenovo added to techâ??s weakness by warning of a quarterly loss and job cuts.
    Weakness was also seen in bank and energy stocks. In mainland China, the Shanghai Composite closed 2.4% lower.
    Meanwhile, the MSCI Asia-Pacific Index closed 3.2% lower. In India, the Sensex was closed in recognition of
    Moharram. Australiaâ??s S&P/ASX closed 2.3% lower amid weakness in mining companies shares were weak.
    Europeâ??s major indices are trading with weakness as they head into their sessionâ??s close. Germany’s DAX is off by
    1.6%, while Franceâ??s CAC is down 1.8%. Both indices are tradi

  254. Today’s Outrage: Don’t the Banks Get It Yet?

    You’d think that after being the beneficiary of a $700 billion government rescue plan, as well as an ever-expanding list of economic tools invented by the Federal Reserve and Treasury, that bankers would be more contrite about their role in creating the credit crisis.

    If so, you’d be wrong, according to a new survey of 339 bank CEOs and other senior officials compiled by accounting firm Grant Thornton. Coming in at the top of the list of causes, with 54% of the vote, was “lax underwriting standards.”

    OK, mea culpa, the banks’ execs seems to be saying. That, however, was closely followed by “political emphasis on increasing home ownership,” with 46%, and “lack of oversight of the mortgage industry,” with 44%.

    Talk about biting the hand that’s feeding you. After running their businesses so well that the U.S. financial system nearly collapsed and Uncle Sam needed to step in, bankers want to tell Congress how to do its job?

    Without question, the political will to expand home ownership played a role in creating the environment that led to the lax loan underwriting standards that bankers in the survey appropriately rated as the top cause of the credit crisis. But did Washington put a gun to the heads of the banks to force them to lend? The current angst over the Troubled Assets Relief Program’s inability to ignite lending proves that banks lend when they want to, not when the government wants them to.

    Moreover, which was more responsible for the housing bubble? Politicians pushing to expand home ownership, or the historically low interest rates of the early 2000s — which made credit cheap and spurred more people to buy homes? Only 18% of survey respondents named “interest rates were kept low too long” as a reason for our current predicament.

    As far as lack of oversight, few would question now that tighter regulation of the financial industry is in order. But who is to blame for its breakdown? A culture of deregulation — pushed by bank lobbyists and endorsed by Republican and Democratic administrations dating back to Ronald Reagan — weakened the hands of regulators and encouraged the sort of financial chicanery that brought us subprime collateralized mortgage obligations and other credit derivatives dependent on a robust housing market.

    These products became financial weapons of mass destruction in the credit crisis.

    Bankers employed by big institutions like Citigroup (C Quote – Cramer on C – Stock Picks), JPMorgan Chase (JPM Quote – Cramer on JPM – Stock Picks), Bank of America (BAC Quote – Cramer on BAC – Stock Picks) and Wells Fargo (WFC Quote – Cramer on WFC – Stock Picks) are smart people. They wouldn’t have sat idly by as the government pushed to expand home ownership, deregulate the industry or lowered interest rates without a compelling reason.

    Banks loosened loan underwriting standards for one reason: It was profitable. I don’t remember too much whining about cheap credit and deregulation when that was still the case.

  255. It’s funny how everything points to the Demorats, and yet you still keep voting for them. the same people that created this mess are out again to screw you. Let’s hear all the Bush haters blame him instead and that all of these senate members are actually Republicans in disguise. Untill you wake up and smell the coffee, this is going to continue. The pres-elect (the Messiah) it’s going to do a number on us for you to love him even more.

  256. Today’s Outrage: Who Cares What Citi Thinks?

    01/09/09 – 08:16 AM EST

    , C , JPM (Cramer’s Pick) , BAC , GS

    Glenn Hall

    • It’s an outrage that Senate Democrats felt the need to put such emphasis on Citigroup’s (C Quote – Cramer on C – Stock Picks) support for a Today’s Outrage: Don’t the Banks Get It Yet?
    Since when do congressional leaders need Citi’s — or any other company’s — blessing on their legislation?
    If Citi and the rest of the banking industry had any sense, then we wouldn’t need new legislation.
    Our financial institutions simply have no clout left when it comes to cleaning up the mortgage mess that they created. They blew their credibility when their toxic mortgage-related securities forced the U.S. taxpayer to pay for a massive bailout that went to just about every major U.S. financial institution — from JPMorgan Chase (JPM Quote – Cramer on JPM – Stock Picks)to Bank of America (BAC Quote – Cramer on BAC – Stock Picks) to Goldman Sachs (GS Quote – Cramer on GS – Stock Picks) — and yes, Citi, too.
    We tried it their way — we gave self-regulation a chance. And look where it got us. It’s hard to imagine a more dysfunctional marketplace than the credit system we have now.
    Greed got in the way. Corporate leadership failed to keep it in check. So what makes us think those same corporate leaders need to be consulted now? If they had the solution, then we wouldn’t need the trillion-dollar bailout and new regulation to address the fallout of their failures.
    I hate that it’s come to this. I hate that we couldn’t trust our corporate leaders to regulate their industries without government interference.
    No one likes micromanagement, but what choice is there when those who are given the chance to manage themselves fail to live up to that responsibili


    Section by Section Summary

    Section 1. Short Title. Section 1 sets forth the short title of the bill as the “Helping Families Save Their Homes in Bankruptcy Act of 2009.”

    Section 2. Eligibility for Relief. Bankruptcy Code section 109(e) sets forth secured and unsecured debt limits to establish a debtor’s eligibility for relief under chapter 13, currently equal to just over $1 million. Section 2 amends this provision to provide that the computation of debts does not include the secured or unsecured portions of debts secured by the debtor’s principal residence, under certain circumstances. First, the exception applies if the current value of the debtor’s principal residence is less than the secured debt limit. Second, the exception applies if the debtor’s principal residence was sold in foreclosure or the debtor surrendered such residence and the current value of such residence is less than the secured debt limit. Without this provision, many struggling homeowners in high-cost areas such as California would be ineligible for relief.

    In addition, section 2 amends Bankruptcy Code section 109(h) to waive the mandatory requirement that a debtor must receive credit counseling prior to filing for bankruptcy relief, under certain circumstances. The waiver applies in a chapter 13 case where the debtor submits to the court a certification that the debtor has received notice that the holder of a claim secured by the debtor’s principal residence may commence a foreclosure proceeding against such residence.

    Section 3. Prohibiting Claims Arising from Violations of Consumer Protection Laws. Section 3 amends Bankruptcy Code section 502(b) to disallow a claim that is subject to any remedy for damages or rescission as a result of the claimant’s failure to comply with any applicable requirement under the Truth in Lending Act or other applicable state or federal consumer protection law in effect when the noncompliance took place, notwithstanding the prior entry of a foreclosure judgment.

    Section 4. Authority to Modify Certain Mortgages. Section 4 amends Bankruptcy Code section 1322(b) to permit modification of certain mortgages that are secured by the debtor’s principal residence in specified respects. The modification authority applies in a chapter 13 case where the debtor’s principal residence is the subject of a notice that a foreclosure may be commenced. New section 1322(b)(11) allows the court to modify the rights of a mortgagee by: (1) providing for payment of the amount of the allowed secured claim as determined under section 506(a)(1); (2) prohibiting, reducing, or delaying any adjustable interest rates applicable on and after the date the case is filed; (3) extending the repayment period of the mortgage for a period that is no longer than the longer of 40 years (reduced by the period for which the mortgage has been outstanding) or the remaining term of the mortgage beginning on the filing date of the case; and (4) providing for the payment of interest at an annual percentage rate calculated at a fixed annual percentage rate equal to that used for conventional mortgages as published by the Board of Governors of the Federal Reserve System, plus a reasonable premium for risk.

    Section 5. Combating Excessive Fees. Section 5 amends Bankruptcy Code section 1322(c) to provide that the debtor, the debtor’s property, and property of the bankruptcy estate are not liable for a fee, cost, or charge incurred while the chapter 13 case is pending and that arises from a debt secured by the debtor’s principal residence, unless the holder of the claim complies with certain requirements. These requirements consist of the following: (1) the holder files with the court an annual notice of such fee, cost, or charge (or on a more frequent basis as the court determines) before the earlier of one year of when such fee, cost, or charge was incurred or 60 days before the case is closed; (2) the fee, cost, or charge is lawful under applicable nonbankruptcy law, reasonable, and provided for in the applicable security agreement; and (3) the value of the debtor’s principal residence is greater the amount of the claim, including such fee, cost or charge. If the holder fails to give the required notice, such failure is deemed to be a waiver of any claim for fees, costs, or charges (as described in this provision) for all purposes. Any attempt to collect such fees, costs, or charges would constitute a violation of the Bankruptcy Code’s discharge injunction under section 524(a)(2) or the automatic stay under section 362(a).

    Section 5 further provides that a chapter 13 plan may waive any prepayment penalty on a claim secured by the debtor’s principal residence.

    Section 6. Confirmation of Plan. Section 6 amends Bankruptcy Code section 1325(a) to provide certain protections for a creditor whose rights are modified under new section 1322(b)(11). As a condition of confirmation, it requires a plan to provide that such creditor must retain its lien until the later of when the claim (as modified) is paid or the debtor obtains a discharge. In addition, the court must find that the modification is in good faith.

    Section 7. Discharge. Bankruptcy Code section 1328 sets forth the requirements for discharge. Section 7 amends section 1328(a) to clarify that a claim modified under section 1322(b)(11) is not discharged to the extent of the unpaid allowed secured portion of the claim.

    Section 8. Effective Date; Application of Amendments. Section 8(a) provides that the Act and the amendments made by it, except as provided in subsection (b), take effect on the Act’s date of enactment. Section 8(b) provides that the amendments made by the Act apply to cases commenced under title 11 of the United States Code before, on, or after the Act’s date of enactment.


    Submitting this form does not create an attorney-client relationship with any lawyer, nor does it constitute an agreement by any lawyer to perform any service – including consult with you in any way. Some lawyers may charge a fee for a consultation concerning your situation. We will never sell your personal information.


    o Credit Law Network

    o Bankruptcy Law, Obama and McCain
    Over on the Bankruptcy Law Network, I have been writing a series of blogs on Senators Obama and McCain’s positions on bankruptcy. The results may surprise you. The articles may be found by clicking on the links: Obama vs. McCain on Bankruptcy Obama and McCain’s Votes on Bankruptcy Amendments Barack Obama on BAPCPA Barack Obama on Bankruptcy/Credit Reform addthis_url […]
    o Maryland Foreclosure “Moratorium” to Expire Soon
    When Governor O’Malley signed into law changes to Maryland’s foreclosure laws effective on April 4, 2008, new foreclosure filings stopped. Although the new law’s changes were, in most instances, more cosmetic than substance (see my article on the Mortgage Law Network, “Changes to Maryland Foreclosure Law: Steak or Sizzle?“) they contained provisions that resulted in […]
    o Whatever Happened to Usury Laws?
    Usury is defined in Webster’s as, “the lending or practice of lending money at an exorbitant interest.” All states, including Maryland, have laws prohibiting usury—in Maryland, the default rate of interest is 6%, and most loans cannot exceed 24%. So how is it that many credit cards have annual rates of 30% or more? How […]
    o US Trustee Audits to Resume May 12, 2008
    According to an article on the US Trustee website, random debtor audits, which were halted in January 2008 due to budgetary problems, will resume on May 12, 2008. The only change appears to be that instead of randomly auditing one out of each 250 cases filed, the UST will audit one out of each 1,000 […]
    o Brett Weiss Quoted in the “Salisbury Daily Times” Discussing Foreclosures
    Brett Weiss was quoted in an article in the May 1, 2008 Salisbury Daily Times. The article, “Bankruptcy Reform May Have Exacerbated Foreclosure Crisis,” discussed the impact of the 2005 adoption of major pro-creditor changes to the Bankruptcy Code, called BAPCPA. Mr. Weiss’ summary of BAPCPA may be found by clicking on this link. addthis_url […]

    © Copyright Bankruptcy Law Network, LLC 2007-2009. All rights reserved. Powered by WordPress. Blog


    see CITIGROUP scam

    my take:

    “Why do we want to force a consumer into bankruptcy?” asked April Charney, a Jacksonville legal aid attorney who has coached hundreds of attorneys on how to help their loan-strapped clients renegotiate a mortgage.

    While she is in favor of giving federal bankruptcy judges the power to modify first mortgages, Charney said she would be against legislation that essentially pushes loan-strapped consumers in that direction.

    “Why can’t we have a FEMA, an administrative process, or give the power to state courts?” Charney said.
    Loan plan gets nod


    Published: Friday, January 9, 2009 at 1:00 a.m.
    Last Modified: Thursday, January 8, 2009 at 11:17 p.m.

    Democratic lawmakers have reached a deal with Citigroup Inc. on a plan to let bankruptcy judges alter home loans in an effort to prevent foreclosures and urged other lenders to follow suit.

    The lawmakers aim to attach the plan to President-elect Barack Obama’s economic stimulus legislation, and said Thursday the change in bankruptcy law — allowing what are called “cramdowns” — could ease the foreclosure crisis that has dragged the economy into the worst recession in decades.

    The deal is likely the first of several measures being crafted this year that propose to trim the principal owed by homeowners saddled with mortgages larger than the current value of their house.

    It marks a surprising change of direction by the financial-services industry. Banks have consistently fought such legislation, saying cramdowns would raise borrowing costs for all home buyers and jam courts with homeowners who would not otherwise declare bankruptcy.

    Several Southwest Florida experts echoed those concerns, warning that the measure would boost mortgage rates because lenders would have to charge a risk premium and that it would further erode bank capital.

    But some also acknowledged that it might do much to stem foreclosures. One in 10 homeowners — about 4.6 million people — are either delinquent in their mortgage payments or in the process of foreclosure.

    “In the greater sense, anything we can do to reduce the rate of foreclosure activity would be extremely helpful in stabilizing the real estate industry and housing prices and will help us get us through the recession as quickly as possible,” said Budge Huskey, Southeast region executive vice president for Coldwell Banker’s parent NRT LLC, who works out of Sarasota. “At the same time, it would never be my first choice to do this because it is fraught with legal complications and will be challenged by lenders.”

    The reason cramdowns are being considered is that lenders have not been willing to renegotiate loans voluntarily, Huskey said.

    Tramm Hudson, a Sarasota-based banking consultant, worries about the impact on lenders, already struggling in real estate-induced recession.

    “They would have to charge off a portion of that loan to meet what the judge orders,” Hudson said. “It would be, frankly, giving the judiciary control over banks’ capital.” Lending rates could rise because banks would charge more for loans that could later be altered by judges, he said.

    Banking regulators would have to agree to stop criticizing banks for working out new terms with borrowers, which some banks have been doing to assist customers during the recession. “You’ve already got the regulators with their big sticks beating the banks for being lenient with their borrowers,” Hudson said.

    The proposal would be a short-term gain but a bad long-term precedent, said Geoff Allison, president of Sarasota’s Gulf Atlantic Mortgage.

    “How can a mortgage company in the future put together a mortgage term that they have to worry about a judge coming in later on and changing it,” Allison said. “Lenders are going to price in that risk that the contract might be changed, which will cost borrowers more.

    “But these are extraordinary times, and if the lending institutions are going to agree to that, then so be it,” he said.

    Others wondered whether the measure would encourage people to head for the courts.

    “Why do we want to force a consumer into bankruptcy?” asked April Charney, a Jacksonville legal aid attorney who has coached hundreds of attorneys on how to help their loan-strapped clients renegotiate a mortgage.

    While she is in favor of giving federal bankruptcy judges the power to modify first mortgages, Charney said she would be against legislation that essentially pushes loan-strapped consumers in that direction.

    “Why can’t we have a FEMA, an administrative process, or give the power to state courts?” Charney said.

    The number of people filing for Chapter 13 bankruptcy — in which debtors can pay back their debt over three to five years — rose to 263,756 in the nine months of 2008, according to the American Bankruptcy Institute. About two-thirds of those debtors have a mortgage and half are not able to keep paying the mortgage as part of their reorganization and could benefit from the cramdown proposal, experts said.

    Chapter 7 filings, in which companies and individuals attempt to completely liquidate their debts, doubled to 10,607 during the first 10 months of 2008, statistics from the U.S. Bankruptcy Court for the Middle District of Florida show.

    Judges can now reduce auto and student loans, and mortgages on second homes for people in bankruptcy, but they cannot touch the terms of a primary mortgage. The new proposal allows judges to force major reductions in home loans, after homeowners certify that they have attempted to contact their lenders about a mortgage reduction before bankruptcy proceedings begin. They do not have to have engaged in negotiations with their banks.

    The bill would apply to all mortgage loans, including but not limited to subprime loans, written any time prior to the bill’s date of enactment. It allows judges the ability to lower principal or interest rate, extend the term of the loan, or any combination of the three.

    In a concession to lenders, if a lender is found to have violated the Truth in Lending Act during bankruptcy proceedings, the institution would be subject to fines, but would not have to forgive the loan, as is now the case.

    Staff writers Tom Bayles, Michael Braga, John Hielscher and Michael Pollick contributed to this report, which also contains information from Herald-Tribune wire services.

  259. I found this on the email so I am pluggin it here

    BROKERDIRT] it’s good to win: Take Note
    – Pro Se Litigants Still Winning –
    From a blog…but I heard about this from some attys on my Dade listserv…

    April Charney
    It’s good to win: Take Note —
    Pro Se Litigants Still Winning January 8, 2009…

    10:11 PM (6 hours ago)

    April CharneyLoading…

    10:11 PM (6 hours ago)

    April Charney


    Show details 10:11 PM (6 hours ago)

    It’s good to win: Take Note — Pro Se Litigants Still Winning
    January 8, 2009 • 11 Comments
    I needed to comment on the post NY did as seen above.
    I acted as a court observer in the summery judgment of NY the other day at the civil court in Miami. I wanted to make clear that I did not render anything more than to be an observer in his stunning performance.
    He was well dressed and looked like a lawyer stood at the bar in front of Judge Miller to contest his Summary Judgment Case the summary judgment action was dismissed and his motion for Discovery was granted. He claimed further that the Promissory note was a fake the Judge stated that this was not being heard at this stage.
    The argument was a heated discourse which ended with the Judge ripping up the summery Judgment and casting the paperwork it over the back of the bench. The Judge exclaimed that “You won”.
    The courtroom was filled with laughter and clammer,every Lawyer went over to Ny and shook his hand I believe that there was a Legal Aid Lawyer present who asked Ny outside the court where he had gotten his pleadings.”Ny exclaimed I got it at office Depot”.
    This was a show to behold in the whole court session that morning there were two Pro se litigants. The other smelled like a lawyer and also gave a stunning performance he motioned the court to change and update or correct his Answer, the Judge exclaimed that “your client will be happy as I am granting the motion” the Judge said” you have done a great job” the Lawyer for Marshal Watson ESQ (plaintiff) told the Judge that he was a pro se, Honorable Judge Miller was so surprised.
    I was stunned to see these two men deal out these stunning victories that ended in small gains for both litigants.
    AS I said I was just an observer NOTHING MORE but I was so proud to see one of us do this. I felt so hopeful and happy.

    To be removed from this mailing list, please go to <http://listserv.umkc.edu/listserv/wa.exe?SUBED1=BROKERDIRT&AMP;A=1&GT; or send an email message to the address listserv@listserv.umkc.edu, with the text SIGNOFF BROKERDIRT in the body of the message.
    Problems or questions should be directed to manager@listserv.umkc.edu.

    I am the Author of the post above my name is Mario Kenny I am also the self proclaimed “Pro Se Litigant king of the world” and a “at heart Ranter Extraordinaire” at http://www.rapoportlawgroup.wordpress.com. And at http://www.mariokenny.wordpress.com and at http://www.livinglies.wordpress.com and many other places of battle blogs

    Among the plaintiffs I fight (on my loan) are some of the most notorious Like Deutsche Bank and Marshall Watson ESQ it’s been 2 years and I think I have them by the ears and other places.

    I also act as a court observer (hobby) where I collect information on cases for my blogs.I work or toil for Dawn Rapport ESQ, she is doing my cases.

    I am a big fan of April. I follow her work everywhere. I have given her a special blog page on http://www.rapoportlawgroup.wordpress.com and I intend to give her a page on my personal blog at http://www.mariokenny.wordpress.com where I intent to post some of her findings which I incessantly tag.

    Moreover I am also “foreclosure fighter pro heavy hitter” and I love to fight my bankster day or night it’s like my other hobby. I find new Violations almost by the day, I have collected volumes of Violations.Im am pelting the whole law library at them (my Banksters)

    I have been making a living doing it too, so its not just fun anymore, it’s got up close and personal. I live this fight.

    I am hearing that CITIGROUP is in bed with the senate to stop victims from collecting and enforcing on the many TILA and other myriad violations involved in these loans. Most of these violations when bunched together should be able to quiet the title and render relief of treble damages; this is what I am dreaming of in my Miami Slumber. It’s my personal ongoing nightmare.

    Marshal Watson ESQ and Deutsche bank trust came after me with a fake promissory note, fake assignment of Mortgage, SEC violations, Mers mess, RESPA and TILA anomalies, FDCA violations and a slew of other fatal loan busting tools not to mention RICO and Little RICO oh** plus mail fraud, fraud upon the court and other and. “General frauds” which I did not find yet.

    I fell in love with the crooks; they give me perpetual entertainment and made me what I have become (another Violation).

    Now I have found another great reason for living and having fun. From inception I had a gut feeling that this would end when I would get my hands on the necks of the vile banksters (squeeze), oh what a joke such smart men wanted to do us in, well we got their number and its gung hoo from hereafter.

    Dawn Rapoport is a great Lawyer, but I have a special fondness for the Pro SE freeloaders on the court system. I believe that that the pro se element is an indispensable force on the court system that is necessary to shift the scale of LAW in favor of common justice for people who the bankster messed with.

    I am connected to some information where a group of Appraisers, are being sued by AMC mortgage servicers LLC a sister company of ARGENT securities LLC who the CITIGROUP bought in the summer of 2007, but they claim that they do not own the company.

    Well my spook insider probes have uncovered mal doings of the fatal kind. The bankster is living up to its name it’s an incestuous relation going on, in the bedroom vault and the party of interest is not telling me who he is and do not have the permission to go to the Vault to fetch me the Promissory Note and its Mortgage.

    They showed me a photo copy of the Promissory Note so I offered some photocopied money in exchange, million dollar bills piled high all fake, like the Promissory Notes the well dressed Marshall Watson ESQ lawyer lugged into the court, housed in expensive briefcases, shoving same up to the Judges` face. What a joke this was. I love the pro se.

    I have repaired a special Florida UCC cocktail mixed with some vile Florida Banking Laws violations venom (truss Company law), snaked with Identity theft and invasion of my privacy.

    This stuff has a smell to run from.

    I remember sitting at a South Pasadena CA movie house watching a scratch and smell picture from the 1970`s this comes to my mind.

    I believe black letter law 101 is a perfect head remover from the bansksters` body, watch out the class action I envision for Deutsche, mers and the lawyers who shop the fake useless mortgage paper is going to sweep South Florida soon.

    Pat Crowley is going to expose the appraisalIT, back office, mambo jumbo, intrusion of software, where ARGENT fudged up the Value of the Homes` worth before selling them in the pools. I plan a counter going forward with my special APR buster applicator coupled with Floridas`liberal USARY laws recipe portion.

    The aforementioned makes for special statuary ingredients and ads to the relief soup kitchen of this mortgage meltdown.

  260. *****NOW LISTEN UP*****

    *****BREAKING NEWS****

    June Reno took Steve Sisco(GETTING DRUNK AT PRESENT) under her wings WENT TO EVICTION HEARING.

    Judge overturned motion to evict ,granted motion to file answer and motion to amend answer.


    Steve Sisco is getting nackered(DRUNK).

    I advised him to get some sleep,eat well,so he may get up to continue the battle in the MORN.


    786 274 0527

  261. I needed to comment on the post NY did as seen above.

    I acted as a court observer in the summery judgment of NY the other day at the civil court in Miami. I wanted to make clear that I did not render anything more than to be an observer in his stunning performance.

    He was well dressed and looked like a lawyer stood at the bar in front of Judge Miller to contest his Summary Judgment Case the summary judgment action was dismissed and his motion for Discovery was granted. He claimed further that the Promissory note was a fake the Judge stated that this was not being heard at this stage.

    The argument was a heated discourse which ended with the Judge ripping up the summery Judgment and casting the paperwork it over the back of the bench. The Judge exclaimed that “You won”.

    The courtroom was filled with laughter and clammer,every Lawyer went over to Ny and shook his hand I believe that there was a Legal Aid Lawyer present who asked Ny outside the court where he had gotten his pleadings.”Ny exclaimed I got it at office Depot”.

    This was a show to behold in the whole court session that morning there were two Pro se litigants. The other smelled like a lawyer and also gave a stunning performance he motioned the court to change and update or correct his Answer, the Judge exclaimed that “your client will be happy as I am granting the motion” the Judge said” you have done a great job” the Lawyer for Marshal Watson ESQ (plaintiff) told the Judge that he was a pro se, Honorable Judge Miller was so surprised.

    I was stunned to see these two men deal out these stunning victories that ended in small gains for both litigants.

    AS I said I was just an observer NOTHING MORE but I was so proud to see one of us do this. I felt so hopeful and happy.

    I wanted to make clear that I acted as an observer only.

  262. Great job guys!

    You are so right when you say these techniques work.


  263. Well, I went to court this morning with Mario and I am proud to tell you that this site works. I got the judge to deny their Summary Judgment and gave them 30 days to comply with discovery. Mario will be posting the ORDER. Keep hope alive. Thank you Mr. Garfield and now we move on to round 2. God bless.

  264. I am in California and I am in for MERS. They are on my note.

    Dan Edstrom

  265. oh – I almost forgot – I saw this one on the net – CountryLied 🙂

  266. I am up for both a MERS and Douche Bank, NA class actions.

    4 of my properties have MERS – same thing happened on one of my assignments. Document was prepared by an attorney in Florida, signed by a MERS VP in Utah but notarized in Texas …. 6 months after the lis pendens was filed. Things that make you go hmmmm. — oh, they lost the note too. I pointed this out to the court and I haven’t heard from the lender in months. So…. lets bring on the class actions. Anyone know a mass tort lawyer?

    Mario – let us know how we can help


  267. MERS, MERS , MERS,





  268. Dear Mario,

    Deutsche was very active with Aurora Loan services and Lehman Brothers, They also had some sort of a happy marriage with Wells Fargo and HSBC, many forclosures in VA, DC and MD were done through MERS and Deutsche was behind them all as a trustee to the pool of alleged notes. Some Smart attorney should look into this we could help in harvesting those who may be the victims of their antics. I do know that they are rushing to get their foreclosures done and they are one of the least willing to work with people. They should be brought into court ASAP.

  269. I am going to court with Ny in the morning then we plan to meet for talks about the Class Action Rosetta and many others are contacting me to list on the class.
    I am so happy to do this it gives me more to do to keep my days filled with work.I also work for my Lawyer now,she has paid me my first check and I fell so good to work in a field I have come to love.

    I am reading the details of UCC florida,fdca,SEC and Ny suggested I also add Rico and I also have intentions to add the Florida Banking Laws.

    This is a huge task for one simple person but I have nominated myself and I have fun doing this work.

    I will do this as fast as I can and I will keep you all updated.

    I know more or less what the task entails and its huge.I have the support but I need alot of help.

    Take care.

  270. The cat is out the bag..

  271. Mike that is a great idea but you see its personal. I have Deutsche on my loan

  272. Mario,
    I have a loan that involves Deutsche – It’s an Illinois property though.

    What about a class action against MERS? That would be super easy to get the 100

  273. I need 100 people to start a Class action vs Deutsche Bank

    786 274 0527

    I am dead serious.

  274. Ny and I and others are doing a Class Action in Miami VS Deutsche Bank NA.

    We will be needing help from everyone to do this I am meeting with him in the morning to begin the discussion and the plan the moves.

    Our early talks suggest that it will be a Pro Se thing,plus press and other local news people.


  275. Mortgage securitization, default swaps and financial guarantees; who buys, who sells?


    Over the last decade mortgage securitization has migrated from the United States into Europe and the rest of the world, and taken a permanent hold on the fixed-income market. Over the last few years, synthetic mortgage securitization developed in Europe. For many years,

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    probably since the inception of the mortgage market, mortgage insurance has been part of its operations. Credit risk insurance for years has played and currently plays a significant role in the U.S. agency mortgage market. However, it has been only recently that more sophisticated ways of mortgage insurance have been developed, borrowing from techniques used broadly in the securitization markets.
    Securitization is a funding and risk transfer technique where a bank or finance company originator of mortgage loans sells and transfers these loans to a special purpose company in return for cash, which represents a payment consideration of the value of the loans. The special purpose company, independent from the originator, bankruptcy-remote and set up with the sole purpose of the securitization transaction, issues notes to investors and uses the proceeds from the issuance to purchase the mortgage loans from the originator. After the initial exchange, the special purpose company has a liability to investors in the form of notes outstanding and assets in the form of the mortgage loans purchased from the mortgage originator. The proceeds from the mortgage loans, in terms of scheduled interest and principal payments, principal prepayments, prepayment penalties, late payment charges, etc., are used to redeem the notes. Hence, the notes are called mortgage– backed securities.

    Such a transaction can be carried out only once through a special purpose vehicle– that is, a specific amount of mortgage loans is transferred from day one sufficient to redeem the MBS issued. It may involve a partial substitution of mortgage loans utilizing current loan redemptions for a period of time. Or, alternatively, the special purpose vehicle can be used for multiple issuance, i.e. a master trust. Figure 1 presents a typical master trust structure as used in the United Kingdom.
    One of the important features of the master trust is that the entire pool of mortgage loans is jointly backing all the notes issued. Or, put in a different way, the credit quality of all the notes issued is identical and a reflection of the credit quality of the entire mortgage pool. There is another type of a multiple issuance vehicle, sometimes used in France and Italy, which issues different notes from defined individual compartments. In that case, the credit quality of each individual note is tied to the credit quality of the defined individual loan pool transferred to the respective compartment of the issuance vehicle, and there is no cross-collateralization across compartments. So far, we have discussed the predominant. mortgage securitzation structure-one, which involved the sale and transfer of mortgage loans from their originator to the MBS issuing special purpose vehicle. In market parlance, this is known as a “true sale structure” or traditional securitization. If we look from the perspective of a risk transfer by the mortgage loan originator, it is obvious that the transfer of the mortgages away from its balance sheet should lead to the transfer of all risks associated with those mortgages: credit, interest rate, prepayment, currency, operational, etc.
    We believe that this is a key point. Market participants often over-emphasize the credit risk transfer aspect as it is related to the regulatory capital of the respective bank, and neglect the other risk transfers, which can be quite significant albeit varying from country to country, and bank to bank. It is partly due to lack of awareness of the full cost of those other risks to the bank, and partly because it is not linked to regulatory capital requirements. The risk transfer, beyond and above that of credit risk, achieved by securitization should grow in importance in the future when taking into account the New Basel Accord.
    Given the predominant motivation of major banks to achieve credit risk transfer and regulatory capital relief associated with it when undertaking mortgage securitizations, in Figure 2 we illustrate the balance sheet effects of securitization.
    This is a generic case illustration for loans with 100% risk weightings; the cost of capital is not reflected in the calculation. We also assume that the retained piece of the securitization capital structure, usually known as the equity piece, is deducted from capital as has been the practice to-date. One can modify the example to include 50% risk– weighted loans, which include mortgage loans with certain loan-to-value characteristics, the cost of capital, the risk weighting of the retained securitization tranche and other considerations.
    In the future, under the new Basel Accord, one should take into account any other risks that attract regulatory risk capital, e.g,, operational, market, etc., as well as the risk weightings-yet to be announced-of a retail mortgage loan portfolio of certain credit quality grades. We emphasize two additional balance sheet effects-potentially higher funding cost (that depends on the rating of the respective bank originator and existing market conditions) and much higher return on equity following the reduction in regulatory capital

    So, to summarize: through the “true sale” securitization of mortgage loans, the mortgage originator-bank or finance company-achieves:
    * Alternative funding. For highly rated banks it is the alternative aspect of these funding sources that has a bigger attraction, while for low-rated finance companies it is the funding aspect that matters more. Through securitization banks can access additional liquidity by monetizing their assets and can access new funding sources. For the finance companies, securitization is often part of a business model involving a warehousing line of credit to provide a working capital and subsequent securitization as a take-out and repayment source for the warehousing line-all this is done on a revolving basis.
    * Risk transfer of all the risks associated with the mortgage loans originated by the bank or finance company given that the loans are transferred away from their balance sheets. As a result, the banks can reduce their regulatory capital requirement and improve their financial ratios.
    The prevalence of one or the other benefit depends on the originator’s rating, current market conditions, originator’s business model and needs (funding, balance sheet management, regulatory capital considerations, etc.).
    We assume that the key aspects of “true sale” mortgage securitization have been made clear. From the originator’s point of view, though, a few additional questions can be raised:

    * What is of prime importance: funding or risk transfer? For many highly rated banks with high liquidity, funding through securitization is of secondary importance. Rather, risk transfer and regulatory capital considerations take the front seat.
    * Is traditional securitization legally possible and feasible? In some European countries, notably Germany, “true sale” traditional securitization faces several legal and tax hurdles. This is an aspect we have not addressed so far, but it should be sufficient to note the highly legalistic and tax intensive nature of the securitization structures.
    Given a bank’s preference for risk transfer, and legal and tax hurdles to traditional securitization, the traditional securitization route described above is not feasible, particularly for German banks. An alternative route is that of synthetic securitization.
    Synthetic securitization is, in effect, a mechanism for credit risk transfer away from the mortgage loan originator to multiple investors through the capital markets or to a single risk-taker. The mechanism employs credit– linked notes and/or credit default swaps and can be briefly summarized as follows:
    A mortgage loan originator transfers the credit risk associated with a selected mortgage loan portfolio (the reference portfolio) by buying protection from a special purpose vehicle. The special purpose vehicle, in turn, sells notes to the market and uses the proceeds to buy a portfolio of highly rated and liquid obligations (the collateral portfolio). The credit quality of the notes sold by the vehicle reflects the credit quality of the reference portfolio. If the reference portfolio experiences losses, the mortgage loan originator is compensated for those losses using proceeds from the liquidation of the collateral portfolio. The outstanding notes are redeemed at maturity through the liquidation of the residual collateral portfolio, hence the investors in those notes absorb the losses associated with the reference portfolio. Interest payments to noteholders are made from a combination of the interest income from the collateral portfolio and a protection fee payment by the originator to the special purpose vehicle. The mortgage loans, whose risk is transferred, remain in the bank’s balance sheet – the bank is, in effect, buying protection against that risk.
    Synthetic securitizations can be executed as:
    * Fully funded (that is, the amount of notes sold to the market corresponds to the value of the reference portfolio);
    * Partially funded (that is, the amount of the notes sold is significantly less than the value of the reference portfolio, and part of the credit risk of the reference portfolio is off-loaded through a single credit-default swap to a single counter– party, assumed by one risk taker or protection provider); and
    * Fully unfunded (that is, there is no note issuance and the credit risk of the reference portfolio is transferred to one or more counterparties through a single or multiple credit default swaps, and there is no public issuance of notes).
    While the volume of unfunded synthetic securitizations is, we hear, substantial, they remain private in nature. As for public transactions, they are dominated by partially funded synthetic securitizations, whose main features are illustrated in Figure 3.
    A key element of a synthetic mortgage securitization is the definition of risks being transferred through the definition of credit events. Elements of that risk are crystallized in the determination of when a default is deemed to have occurred, how is the loss ensuing from that default calculated, when the mortgage originator is reimbursed for the related loss, etc.
    So, from a mortgage originator’s point of view, there is a substitution of the risk of the credit risk associated with a mortgage loan with the residual credit risk of the same mortgage loan not captured under the definition of credit events (or risk transferred) and the risk of the counterparty providing protection against the defined credit default risk.

    In Figure 4 we illustrate a specific transaction, in which the credit risk of a pool of second lien residential mortgages
    was transferred partially to the market through funded notes and partially to one swap counter– party through a credit default swap. This is, in some respects, a typical German synthetic mortgage securitization transaction. Given that specialized German banks can get a favorably priced financing through the issuance of Pfandbriefe-covered mortgage bonds, their need is not for alternative funding. Rather, their goal is credit risk transfer of the part of the mortgages not eligible for Pfandbriefe financing (e.g., the part of the mortgage loan exceeding 60% LTV) and a related regulatory capital relief. Hence, the application of synthetic securitization to the above 60% LTV portion of the mortgage pool in question, the reference pool.
    Figure 5.
    Atypical securitization analysis is applied to the reference pool and its credit risk is tranched in the usual senior, mezzanine and equity tranches. A large portion of the senior tranche is further tranched into a super-senior and senior tranches: the risk of the super-senior tranche is transferred to a single protection provider through super-senior credit default swap, while the risk of the senior and other remaining tranches is transferred to the market through the issuance of notes or through an individual credit default swap.
    A synthetic securitization has certain balance sheet and regulatory risk capital implications. Similar to the traditional securitization above, we provide a simplified illustration of those implications in Figure 5. Unlike traditional securitization, though, we do not talk about funding cost, but rather about cost of risk transfer and its effects on regulatory capital. A component of the cost of risk transfer is the price of the super-senior credit default swap in the case of partially funded synthetic securitizations. Some national regulators require hedging of the risk of the super-senior tranche through a credit default swap, which requires the bank to pay a fee. In practical terms, we believe that such hedging is not necessary, given the minimal risk associated with the super-senior tranche, also referred to as a “super triple-A” tranche. The New Basel Accord is yet to finalize the need, or lack thereof, for such hedging and related unnecessary expense.
    The use of insurance to protect originators from the credit risk of the mortgage loans they have originated varies from country to country. In the case of Australia, specialized mortgage insurers are still active in providing primary mortgage insurance on an individual mortgage or mortgage pool basis. Many of the already insured mortgages are subsequently securitized.
    In the case of the U.S., the agencies (Fannie Mae, Ginnie Mae, and Freddie Mac) provide liquidity and credit support for the mortgage market. Ginnie Mae MBS are backed by mortgages that benefit from a government guarantee and, furthermore, the MBS themselves are guaranteed by Ginnie Mae (and the U.S. government) regarding timely payment of interest and principal. Fannie Mae and Freddie Mac MBS are backed by mortgages with private insurance (referred to as conventional mortgages), while the originators guarantee the MBS notes. Fannie Mae and Freddie Mac are privately-owned entities, but the market considers their MBS as having “quasi-government” support given the agencies’ status as government-sponsored enterprises. In either case, the agencies’ support of the credit quality of the MBS mitigates the credit concerns associated with the mortgage pools and establish the basis for mortgage securitization and the market for collateralized mortgage obligations (CMOs).
    The primary mortgage insurers were active in the U.K. market in the late 1980s and early 1990s, but their role subsequently waned as they failed to honor claims submitted to them during the real estate crisis of the early 1990s.
    Japanese residential mortgages are also supported by insurance on an individual basis and these are usually provided by mortgage guarantee subsidiaries of the originating banks. A similar situation exists with mortgages extended by the Government Housing Loan Corporation (GHLC). We should also mention that unlike the MBS programs launched by the private sector banks, GHLC MBS program provides additional credit support for the MBS by adopting a scheme where GHLC replaces defaulted loans within the securitized mortgage pools with performing loans. A big question mark hangs over the GHLC MBS program and it is related to the future status of GHLC as a government or private entity.
    Notably, all of the above insurance policies are applied either to an individual mortgage loan or to a pool of mortgage loans, assuming the risk of default and subsequent loss in full or up to a specified amount.
    In fact, from the point of view of the mortgage originator, the credit risk of the mortgage borrower is substituted for the credit risk of the mortgage insurer. Additionally, the mortgage insurer, if covering the net loss in case of a borrower default (that is, loss after recovery from the sale of the property), is also assuming the market risk of housing price volatility. Depending on when the loss is calculated and reimbursed, the mortgage insurer may also be assuming the risk of a prolonged repossession and liquidation process.
    As mentioned above, the mortgage originator substitutes the risk of the mortgage obligor for the risk of the insurance provider, or so does the conventional market wisdom go, In reality, though, the insurer steps in only in case of default of the underlying mortgage obligor. It is reasonable to assume that often it is difficult to establish the credit quality of that obligor as a direct comparable of the credit quality of the mortgage insurer. Furthermore, it is reasonable to assume that the risk exposure of the mortgage originator is now a dual exposure to that of the mortgage insurer contingent upon a default of the mortgage obligor, hence it is lower than that either of the two.
    The insurers’ involvement in the mortgage market has become more sophisticated recently with the application of securitization techniques of determining the risk of a mortgage portfolio and its subsequent tranching. A mortgage insurer could assume any tranche of the risk-usually noted as first, second or third loss. Say the insurer assumes the second tranche of the potential loss and it is sized at Y amount of euros above X amount of euros of first loss. The originator is assuming the first loss to occur in the portfolio up to level X. For any loss exceeding X but less than Y, the mortgage loan originator will be reimbursed by the insurer. Losses above level Y will again be absorbed by the originator. So, the originator is substituting the risk of second loss for the risk of the mortgage insurers.
    A dedicated mortgage insurance provider is usually a credit-worthy company, which in addition is dedicated to this line of business -mortgage insurance is their lifeline and any suspect rejection of claims would be detrimental to their business. Hence the need to differentiate between dedicated mortgage insurance providers and those for whom mortgage insurance is a side business.
    The preceding sections clarified different aspects of credit risk transfers for residential mortgage portfolios. As the following graphs demonstrate, these techniques are widely used in practice:
    * Figure 7 shows the annual European new issuance volume and delineates the cash and synthetic formats of the risk transfer and deal execution. As can be seen, synthetic execution dates back to year 2000 and still presents a relatively small portion of the overall European RMBS market;
    * Figures 8 and 9 show the cumulative issuance by country in Europe and the U.K. (please not
    * Figures 8 and 9 show the cumulative issuance by country in Europe and the U.K. (please note the different scale used) for the period 1997-July 2002. It is noteworthy that synthetic mortgage securitization has been executed so far in Germany
    Figure 7.
    Figure 8.
    * Figure 10 delves into the type of mortgages securitized in the U.K., which so far has demonstrated the widest range of RMBS products. In fact, under the category “non-conforming” we include buy– to-let mortgages, sub-prime mortgages and other mortgage products, excluded from the “prime” category. Shared appreciation mortgages and equity release mortgages are two other sectors of declining (the former) and increasing (the latter) share in the market.
    * Figure 11 shows Japanese RMBS issuance in terms of transactions from GHLC and from other entities such as banks and insurance companies.
    * Figure 12 illustrates the issuance of Australian RMBS, which are backed by mortgages, insured on an individual or pool basis. Issuance of MBS backed by non– insured and sub-prime mortgages has been small and relatively recent.
    * We are not aware of any public data showing the volumes of mortgage insurance related to first and second loss pieces of tranched mortgage pools, although we are aware of the execution of such transactions.
    Behind this substantial traditional and synthetic securitization volume stand a wide range of mortgage originators:
    * Banks, active in the mortgage markets, seek risk transfer, funding or both. For example, using the volume charts above, prime mortgage securitization in the U.K. is associated primarily with large banks, while on the European continent the dominant sponsor of mortgage securitization are the banks. Many banks in Germany use synthetic securitization to dispose of the risk of second line mortgages as explained above.
    Figure 9.
    Figure 10.
    * Finance companies use securitization as part of their model primarily as a funding source. On the chart of U.K. RMBS issuance, non-conforming mortgage securitization is primarily associated with finance companies, also known as specialized lenders.
    * Insurance companies usually use securitization to dispose of mortgage portfolios, which are not their main line of business, but underwriting mortgages is viewed as a key for distributing their main insurance products.
    * A series of other institutions (savings banks, co-operatives, building societies) with a range of interests in mortgage products use securitization for a variety of reasons.
    On the other side of the securitization equation stands a range of investor
    On the other side of the securitization equation stands a range of investors and protection providers. They choose among buying a mortgage exposure in accessible format, buying desirable risk profile, buying exposures in another geography, buying desirable bond profile, buying combined exposure-mortgage loan obligor and mortgage insurer:
    * Banks, who look to diversify their own mortgage exposures geographically or by product type, or take a specific-exposure in terms of maturity or risk profile. In this case, the risk associated with the mortgage pools does not leave the banking system, but is rather redistributed within. Banks can act as investors in mortgage-backed securities or as buyers of mortgage pools or as sellers of protection for mortgage pools. Given the capital structure of traditional and synthetic MBS, a bank investor can choose the desirable level of risk.
    Figure 11.
    Figure 12.
    * Pension funds and financial advisors, usually participate as investors in mortgage-backed securities along the entire risk spectrum of their capital structure. In this case, the credit risk associated with mortgage portfolios leaves the banking system.
    * Conduits and in particular the asset– backed commercial paper conduits who invest in ABS and MBS are active investors in RMBS. These investments are viewed as off-balance-sheet ones.
    Insurance companies act as both investors in MBS and protection providers for synthetic MBS. The risk is leaving the banking system.
    * Monoline insurers may provide credit risk protection for an existing MBS through a monoline wrap or provide protection for super-senior pieces of synthetic securitizations.
    * Specialized mortgage insurers may absorb the risk of individual mortgages or provide protection of a slice of mortgage portfolio risk (first, second or third loss).
    by Alexander Batchvarov, PhD, CFA; Chinatsu Hani; and William Davies
    Alexander Batchvarov, Chinatsu Hani and William Davies are with Merrill Lynch International Structured Credit Research, London.

  276. Banks with Deep Pockets Dodge Foreclosure Damages

    The fight that neighborhoods in Cleveland are launching against banks that dump vacant and vandalized foreclosed homes back onto the real estate market received a bit of a setback, as I noted in my story Monday. A private, non-profit housing advocacy group had filed suit in local housing court to force the banks to clean up their properties before selling them, or to demolish them entirely. But the banks — Deutsche Bank and Wells Fargo — convinced a judge to move the suit to federal court.

    The neighborhood group is still trying to get the case back in housing court, but it’s a difficult battle. Let’s see: A neighborhood nonprofit up against the financial resources of two global banks. Whose pockets do you think are deeper?

    It’s no surprise those banks wanted the case moved to federal court. It will be much more costly for the neighborhood group to argue its case there. Housing court judges, on the hand, can and do handle these cases quickly and efficiently. They bring the hammer down on banks that leave foreclosed properties behind in cities for the taxpayer to clean up. They often don’t buy the argument that servicers are responsible for the upkeep of the properties.

    I remember talking early last year with Cleveland Housing Court Judge Raymond Pianka, who has drawn national attention for holding banks responsible for dumping foreclosed properties. Pianka lives in a Cleveland neighborhood, he told me. There are foreclosed houses on his street. This crisis is part of his everyday life.

    The move to federal court is more than just an arcane legal development. The neighborhood group wants the case heard in housing court because it validates what has become increasingly clear in the foreclosure crisis: Banks are property owners, with all the responsibilities that come with it. As they foreclose on houses and their inventories of bank-owned properties swell, banks try to dodge this reality by blaming servicers and paying lawyers to get them out of housing court. The same thing happened in Cincinnati recently, where the local legal aid agency filed suit in housing court, but the case was moved to a federal court instead.

    Maybe this tactic will work for a while, but eventually, I think banks are going to have to be held accountable for what they’ve done. Entire swaths of neighborhoods in once-great cities are in ruins – that’s not an exaggeration – as banks fail to secure, maintain or demolish foreclosed properties. Neighbors who pay their mortgages feel the pain as their property values plummet. City coffers and services take a hit. It will take decades to recover from this.

    And yet, the banks walk away. The bank argument continues to be that It’s someone else’s responsibility. But banks aren’t just lenders anymore – like it or not, they are property managers. If they didn’t want to be in that position, they shouldn’t have sold high-rate mortgages that they knew people couldn’t pay. So as property managers, they have the same obligation any other landlord would, and they should be subject to housing code violations, just like any other landlord would. It’s too bad policymakers who put together the bailout didn’t put some conditions on it to require banks to do their part.

    Instead, they got a free ride. And homeowners in neighborhoods all around the country are paying for it.


    Saturday, January 3, 2009

    Lenders Accused In Housing Court Of Dumping Blighted Foreclosures Onto Real Estate Market Shop For Friendlier Forum; Move Cases To Federal Court

    In Cleveland, Ohio, The Washington Independent reports:

    * The fight that neighborhoods in Cleveland are launching against banks that dump vacant and vandalized foreclosed homes back onto the real estate market received a bit of a setback, […]. A private, non-profit housing advocacy group had filed suit in local housing court to force the banks to clean up their properties before selling them, or to demolish them entirely. But the banks – Deutsche Bank and Wells Fargo – convinced a judge to move the suit to federal court.


    * The move to federal court is more than just an arcane legal development. The neighborhood group wants the case heard in housing court because it validates what has become increasingly clear in the foreclosure crisis: Banks are property owners, with all the responsibilities that come with it. As they foreclose on houses and their inventories of bank-owned properties swell, banks try to dodge this reality by blaming servicers and paying lawyers to get them out of housing court.

  278. April Charney,Person of the year

    submitted by Mario kenny

    When the rest of the country was sucking the housing
    helium back in 2004, Jacksonville Area Legal
    Aid was already seeing signs of the pending economic
    Hindenburg. They saw it in loans so unaffordable as to
    be predatory, in the number of people on the edge of losing it
    all, in just how tenuous home ownership was for those who’d
    bought in. By the time attorney April Charney joined JALA,
    she says, they were already overwhelmed with foreclosures.
    “Every day I would come into the office, there would be a
    stack of cases on my chair,” she says, “and a little note asking
    me to look at some new cases.”
    While the housing crisis initially affected the poor, many
    of whom had been suckered into buying or refinancing with
    adjustable-rate loans, their stories aren’t that different from
    the stories of thousands of people now facing foreclosure. As
    home values soared, loan offers flooded the mail and banks
    promised easy credit. Some people took out a second mortgage
    with a low teaser rate — a seemingly safe bet until the
    introductory rate reset to unaffordable. Some bought into the
    dream of home ownership, buoyed by the ability to get a
    loan they realistically couldn’t afford. And some who’d been
    able to make big mortgage payments were suddenly thrown
    off track by a lost job or a medical crisis.
    But not everyone who found his or her way to Legal Aid
    was a victim of housing fever. The economic meltdown
    pulled some people into foreclosure who never should have
    been there to begin with. Debra Lou Bridges paid her mortgage
    on time. If she ever was late, .she says, it was never by
    more than 30 days. But four years ago, for reasons that
    remain a mystery to her, she received her first foreclosure
    notice. Bridges still hasn’t been able to determine why she
    received it. Wells Fargo, the bank that serviced the loan for
    Fannie Mae, has never shown Bridges documentation of
    any delinquency. And the cancelled checks from her bank
    show that Wells Fargo deposited all her checks. But she
    hasn’t been able to persuade either Wells Fargo or Fannie
    Mae to discuss the matter or accept her application for
    loan modification.
    “They got to the point where they didn’t want anything
    but full payment, so they wouldn’t accept any payment from
    me,” she says. “It really baffled me. I just didn’t know what to
    say to them.”
    The day she went to her first court appearance, Bridges
    says, the Wells Fargo attorney must have had a stack of 40
    foreclosure cases with him. In each one, he was seeking a
    summary judgment granting foreclosure. Only five people
    showed up to challenge the bank. Bridges, accompanied by
    Charney, was one of them. The judge denied Wells Fargo’s
    foreclosure request, and since then, Bridges has been in
    limbo, waiting for Fannie Mae’s next move. In the meantime,
    she suffered a small stroke.
    For Charney, who sees clients like Donna Bridges every
    day, the global financial crisis is both very personal and
    very cruel.
    “To see a woman my age, to see her having to live
    through this stress and pain, and to know there is only so
    much you can do to protect her, makes me very worried for

    us as people,” says Charney, her anger rising.
    “We are willing to absolutely implode
    another human being’s life because we don’t
    give a shit, because we don’t care enough.”
    In her effort to loosen the financial death
    grip on her clients, Charney has become a
    warrior of foreclosure defense. She’s also
    emerged as one of the nation’s pre-eminent
    lawyers on the subject, training attorneys in
    Florida and lecturing around the country on
    the nuances of foreclosure defense. She’s
    been interviewed by Forbes Magazine, The
    Wall Street Journal, The New York Times,
    The Village Voice and The National Law
    Journal as well as by numerous Florida publications.
    She’s spoken at conferences all over
    the U.S. and was named National Consumer
    Lawyer of the Year in 2007 by the
    National Association of Consumer Advocates.
    With the cooperation of legal aid
    groups and local bar associations around
    Florida, she’s trained attorneys in Jacksonville,
    Miami, Sarasota, Tallahassee, Fort
    Myers, Pensacola and Orlando. As part of
    their training, all the participating lawyers
    must agree to perform legal work pro bono.
    Charney’s expertise in foreclosure matters
    is largely a result of her own initiative and
    investigation. It came well ahead of the
    flood of information on the housing crisis,
    long before words like “subprime mortgage”
    and “securitized trust” entered the vernacular.
    And she’s not only mastered complex
    economic matters, she’s helped reshape the
    foreclosure battlefield. She’s uncovered startling
    legal gaps in the way many mortgages
    were transformed into investments, and
    helped give millions of homeowners a fighting
    chance to save their homestead.
    The work is daunting and sometimes
    maddening, but as the rush to lend money
    has morphed into a rush to foreclose, Charney’s
    message to homeowners and to other
    attorneys is that you can fight back. With
    Jacksonville topping 5,000 foreclosures this
    year and Forbes Magazine predicting the
    city will be the nation’s “foreclosure capital”
    in 2009, Charney is a woman on a mission.
    “We are in such a mess right now that I
    have to focus in every way I can on stopping
    foreclosures in every possible way that can
    be done,” she says. “I have to work to train
    an army of lawyers in the state of Florida,
    where I’ve spent most of my life — for my
    kids, for everybody’s kids, because they have
    to live in this world.”
    Charney is committed to the task ahead
    because she views it as a necessary bulwark
    against economic chaos. “If we have 15 percent
    unemployment in the next six months,
    in the next 12 months, that’s not a world I
    want to live in,” she says. “That’s a very
    unfriendly, unhappy world.”
    April Charney has a work ethic that
    borders on compulsion, but it’s
    nothing new. Raised in Miami,
    Charney graduated from Hialeah-Miami
    Lakes Senior High School at age 16 and
    worked during her high school years as an
    intern at the Public Defender’s Office in
    then-Dade County. Radicalized by the social
    activism of the 1960s and 1970s (Eldridge
    Cleaver’s “Soul on Ice” was a big influence),
    she wanted to change the system from the
    inside. She majored in political science at
    Florida International University and
    attended University of Miami Law School,
    graduating in 1980 at age 22.
    As an attorney, Charney’s focus has been
    poverty law. “I think I was suited to be an
    advocate for people who don’t have much
    of a voice,” she says. “I think it’s a philosophical
    aim of mine to help all that live
    among you. It’s something I think is everybody’s
    As a young attorney working for the poor
    in Fayetteville, Ark., Charney filed lawsuits
    over conditions in the Benton County jail,
    forcing it to recognize inmates’ Constitutional
    right to medical care, exercise, proper
    nutrition and mental health counseling. She
    also filed a class action lawsuit in Arkansas on
    behalf of foster children, demanding adequate
    and timely reunification efforts. In
    Sarasota, Fla., she sued the city over plans to
    shut down a waterfront mobile home park
    and displace the residents. In Jacksonville,
    she’s engaged in a protracted battle with
    Habitat for Humanity over the Fairway
    Oaks subdivision, where construction problems
    and possible soil contamination have
    troubled residents. And over the years, she’s
    Charney assists client Gloria Washington after a recent court appearance. She says she is
    “stopping foreclosures in every way possible.”
    represented numerous tenants in landlord
    /tenant disputes, car repossessions, and bankruptcy
    and domestic violence cases.
    Michael Figgins, executive director of
    Jacksonville Area Legal Aid, says Charney’s
    natural affinity for the dispossessed is part of
    her professional DNA. “April is very
    focused, very determined, and she’s consistent,”
    he says. “She pretty much is always
    going to line herself up on the side of the
    oppressed, the less advantaged, whatever the
    issue or the concern is.”
    Charney has spent most of her career
    working for various legal aid offices, except
    for a time in private practice in Arkansas
    when her children were young. But in 2003,
    after leaving Gulfcoast Legal Services, she
    considered an offer to go into private practice.
    She says she toured the office of her
    potential law partner in Venice, got a whiff
    of the leather chairs, saw the luxe walnut
    paneling. And then she talked to her kids.
    Both Charney’s son, Morgan, and daughter,
    Katherine, were in college at University of
    Florida, and she knew living in Jacksonville
    would bring her in closer proximity to them.
    “That was it,” she says of the decision
    to take the job with Jacksonville Area
    Legal Aid.
    Still, Jacksonville is a little too “big city”
    for Charney’s tastes. While she works until
    at least 9 p.m. every night, and heads to the
    office every Saturday and Sunday to work
    on 30 to 40 front-burner cases (she carries
    more than 100 cases in various stages), her
    fantasy life has her living in a log cabin on a
    mountaintop or working at a friend’s horse
    ranch in Ocala. She dresses like an outdoorswoman
    when not in court and lives in a
    wooded neighborhood on the Northside,
    near Trout Creek. Her modest concreteblock
    house is sparsely furnished; her sole
    vanities are lacquered burgundy fingernails
    and lips, and sparkly earrings. On a recent
    trip to Nevada to visit her son (Legal Aid
    allows attorneys to take a month sabbatical
    after working there for four years), she
    hiked the Black Canyon, Death Valley, the
    Bowl of Fire, the Mosaic Canyon and the
    Valley of Fire. She says her goal was to
    become one with nature.
    Her job is a long way from that. For the
    past two years, at least, Charney has been
    predicting that the country is going to enter
    a second Great Depression. That certainty
    was a common thread running through the
    listserves of consumer lawyers to which she
    subscribes. Her e-mail correspondence offers
    slices of crises — tragedies spawned by the
    toxic mix of predatory lending and soaring
    foreclosure rates. There are stories of the rising
    West Nile Virus threat, due to algae-filled
    swimming pools in neighborhoods decimated
    by foreclosure. There are stories of suicides
    by desperate people who can’t pay their
    mortgages. There are stories of bird-rescue
    groups overrun with exotic birds whose owners
    can no longer afford to care for them.
    “We’re headed for turbulent times,” says
    Charney. “The global economy is all interconnected.
    It’s like trying to turn around the
    Titanic. It’s going to take a lot of effort and a
    lot of time, none of which I’m sure we’re up
    to. But I do have hope, and I hope we don’t
    go back to what we had, because it obviously
    Dressed in a nubby green pullover
    and jeans, with her hair pulled
    away from her face, Charney
    looks more like she’s about to go on a hike
    than step into a courtroom. But on this day,
    she’s standing before a packed conference
    room at the Aetna building on Prudential
    Drive in Jacksonville, ready to lead some 90
    Debra Lou Bridges has been in limbo since foreclosure proceedings began four years ago. She
    has also suffered a small stroke.
    Debra Lou Bridges paid her
    mortgage on time.
    If she ever was late, she
    says, it was never by more
    than 30 days. But four
    years ago, she received her
    first foreclosure notice. She
    still hasn’t been able to
    determine why.
    attorneys in a day-long training session.
    Over the course of the day, she’ll walk the
    audience through the complexities of securitized
    trusts, default loan servicing and the
    issues they present for attorneys defending
    homeowners from foreclosure.
    Charney’s signature defense, one she
    developed with the help of North Carolina
    bankruptcy attorney Max Gardner, is questioning,
    at the most fundamental level,
    whether the plaintiff has the authority to
    foreclose. Many foreclosures are brought not
    by mortgage lenders or banks, but by groups
    of investors. These investors bought shares
    of mortgages packaged together, known as
    securitized trusts, much in the same way
    investors buy stocks in a company.
    What Charney discovered, however, is
    that when the loans were transferred from
    loan originators into the trust, the transactions
    were often riddled with errors. Many
    times, the transactions were conducted via
    bulk e-mail exchanges, and most lack legal
    documentation of the transaction. Without
    proof the transfer occurred, Charney argues,
    there is no evidence that the trust owns the
    loan. And if it doesn’t own the loan, then
    legally it cannot foreclose on that loan.
    Charney first noticed the discrepancy
    when she realized that the trusts didn’t actually
    produce the mortgage note in the foreclosure
    documents filed in court. Instead,
    they filed something called an “affidavit of
    lost note” in place of the actual mortgage.
    The absence of proper paperwork
    prompted Charney to question whether the
    trusts had legal standing to file the foreclosure.
    “I couldn’t figure out why the plaintiff
    had any right to come in and sue for foreclosure,”
    she says.
    This legal defense, now known as “Who
    Owns the Loan?” has become an important
    tool in foreclosure defense nationally. Some
    judges have dismissed foreclosures because a
    trust couldn’t prove it had legal standing.
    Many other cases have been delayed, buying
    time for homeowners until the question of
    standing can be worked out.
    “It’s fair to say I’m one of the leaders,
    pretty much one of the pioneers, as far as
    that goes,” says Charney. “My measure of
    success is that there are so many lawyers
    working these issues now.”
    The defense gives Charney some leverage
    in the fight against foreclosures, but she says
    the deck is still stacked against homeowners.
    In many cases, she says, foreclosure is a
    money-maker for the loan servicer, who
    continues to rack up money on the default
    even while a homeowner remains in the
    house. Companies hired to service loans
    maximize their profits during foreclosure,
    earning money on late fees, drive-by
    monthly appraisals, attorneys’ fees, court
    costs and other charges. Most have no
    incentive to work out a loan modification,
    she says, and when they do, they aim to fold
    all the charges into the loan. Charney calls
    this “predatory servicing.”
    “They earn more on default than when
    the loan is performing,” she says.
    She also notes that many trust members
    aren’t motivated to work out loan modifications
    because they hold default insurance
    on their investments. They still earn money
    when the loans go into default. (For that
    matter, she says, most trusts would be reluctant
    to allow wholesale loan modification of
    mortgages in their portfolios, because it
    would threaten the tax shelter status of
    the trust.)
    When a company can prove ownership,
    Charney’s ultimate aim is a loan workout.
    But before she engages in that process, she
    asks to see a complete history of the loan so
    she can scrutinize all charges. Very often, she
    says, the foreclosure process piles additional
    debt onto homeowners. In one case, she discovered
    that a client’s $22,000 debt had
    been increased by 30 percent because of
    foreclosure-related charges. Other clients
    have had additional insurance costs added to
    the loan, even for homes not required to
    carry it.
    Obtaining a loan history from the servicer
    often proves difficult, but Charney
    won’t negotiate without it. If a loan can be
    restructured, she says, it’s important to do it
    based on current appraisals, not the ofteninflated
    values from when the loan was first
    Charney addresses lawyers at a day-long training session. “My measure of success is that there
    are so many lawyers working on these issues now.”
    obtained. She also demands that payments
    reflect a client’s ability to pay. Her ultimate
    goal is a loan with an equity cushion, one
    that her clients can access at a reasonable
    interest rate to make home repairs. She also
    aims to win credit repair. In many loan
    modifications, the mortgage default remains
    on the credit report, setting the stage for
    future problems with loans and refinancing.
    If a client is only eligible for subprime loans
    because of poor credit, Charney says, the
    problem continues.
    “I want to get a performing loan that my
    client is able to pay. I want to get relief from
    any predatory lending … and I want to
    make my client not come back to see me
    anymore,” says Charney. “I want to set them
    up so that they have a remedy that lasts the
    life of the loan or at least as long as they are
    going to be living in that house.”
    The goal is bigger than helping individual
    clients. Charney says that renegotiating
    bad loans can be a tool to stabilize neighborhoods
    and communities, and can even help
    keep financial institutions solvent. “Everybody
    wins when a homeowner stays in their
    home,” she says.
    Until the question of “Who Owns the
    Loan?” is answered, she questions whether
    any loan workout can be negotiated. Simply
    put, there’s no one to negotiate with. Absent
    proof that someone owns the loan, she says,
    it’s possible that homeowners could run out
    the clock on the five-year statute of limitations
    on the debt, at which time the debt
    could be discharged. This fact has led some
    to claim that Charney’s goal is to get her
    clients a free house. She even says her
    phrase for 2009 is “The Great American
    Land Giveaway.” But, she counters, it’s not
    her doing.
    “I didn’t cook the books. I didn’t create
    this huge monstrosity of a mess. I just see it
    like a lawyer, and it’s hard to deny the obvious.
    There’s no entity there to enforce
    the debt.”
    Jacksonville attorney Chip Parker moved
    into foreclosure defense when he started
    seeing foreclosures were causing new
    bankruptcy cases. “People didn’t have a
    reduction in income because of a job loss or
    an illness, a temporary reduction,” he says.
    “These toxic mortgages with adjustable rate
    loans were resetting at a much higher rate,
    and people weren’t able to make the payments.”
    Filing for bankruptcy didn’t help
    those people, though, because the debt on a
    primary residence can’t be adjusted in a
    bankruptcy filing. Parker knew he had to
    find a solution for his clients, but says he
    didn’t know how to begin. “So I turned to
    April,” he says. “JALA has been instrumental
    in shaping the way I practice.”
    Parker is now handling 125 foreclosure
    cases as a private attorney, along with about
    14 pro bono cases for Jacksonville Area
    Legal Aid. Unlike Charney, Parker represents
    paying clients from middle America.
    But Charney’s expertise has proved invaluable
    to him. He’s also raised the issue of who
    owns loans and says most every loan he sees
    from a trust has the ownership problem.
    “God, it’s so cliché — but April thinks
    outside the box,” he says. “A box is a great
    way to describe the foreclosure mills that
    crank these things out. They turn the crank
    handle and spit out another foreclosure.
    They treat every one of those the same.
    April has forced plaintiff ’s attorneys to
    rethink the ways they were building this
    box. She’s a creative thinker, from a lawyer’s
    perspective. She helps me to open my mind
    to different possibilities.”
    Parker says that lawyers around the
    country “owe a debt of gratitude” to Charney,
    who’s been at the forefront of foreclosure
    defense. Not only is it arguably the
    most consequential legal issue of the next
    few years, but it’s often all that stands
    between the American Dream and a nightmare
    of global proportion.
    Legal Aid attorneys have led the fight,
    Parker says, and “and April has been [at the
    forefront] of leading that charge.”
    Charney works at a new JALA office at Ribault High School, training young lawyers on foreclosure
    “I didn’t create this huge
    monstrosity of a mess.
    I just see it like a lawyer.”

  279. Mario – thanks for doing what you do!

  280. I recieved this message:

    A CA Lawyer,we have so many people in CA needing a lawyer,maybe this one can assist.

    Words from an Opinionated California Lawyer

    In California, the Department of Real Estate website (www.dre.ca.gov) lists the companies that have DRE “permission” to modify loans… add to this list any licensed California attorney, and that is where you should begin your due diligence when you seek help in California. Other states probably have similar laws, so check with your own state DRE.

    My law firm has been getting more and more calls recently from homeowners that were victims of predatory lenders who put them into an unaffordable loan and now fell into the hands of those same people who sold the toxic loans but profess to be saviors… DON’T BE A VICTIM TWICE!

    Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call “home.” These scammers are popping up like dandelions on a freshly mowed lawn. They advertise on the Internet, freeway billboards, radio, television, and print media everywhere. Make no mistake, in many cases, these are the exact same loan officers and mortgage brokers who fleeced homeowners the first time around. After losing their jobs with the crash of the mortgage industry, they have found a new way to make ill-gotten profits from hard-working homeowners through loan modifications.

    In California, with very few exceptions (and attorneys are one exception), it is against the law for anyone to take money up front for helping a homeowner who is in default. Don’t trust a company that begins its relationship with you by breaking the law.

    Of course, this is one lawyer’s biased opinion, but one based on many distressing calls to my office every day. And, yes, my firm does take cases against loan modification companies who have violated laws. This field is quickly becoming one of the fastest growing sections for our mortgage law firm.

    – Paul J. Molinaro, Esq.

  281. I’d like to hear the details of this case and see the pleadings. Sounds good, although the bank could move to set aside the default.

  282. Pro Se Lisa filed affiv defences,motion to amend,claim for money damages,and motion to dismiss.

    Bank defaulted,did not answer in stip days,now she moves the court again, to dismiss and grant quiet title and money damages.this is the first case I know where the homeowner a pro se will in my opinion win.Case was short and sweet.

  283. […] seems, from the Banks themselves.   The Federal government takes worthless paper from the banks (an attorney has a site where he explains why most people DON’T OWE ANYTHING on their mortgage) and gives […]

  284. Neil I am asked to comment to this Write up.Can you please address this letter please?

    Hi Mario,

    I was wondering if you can do me a favor???? I’m still trying to get my head wrapped around my mortgage issue. I have written up a post I would like to put on livinglies but wasn’t sure of the best place to post it.

    I have attached it and was wondering if you could paste it into the appropriate place so someone (hopefully on of the attorneys) might see it and provide some basic insight?????

    How goes the reading????? Did you take a look at the credit card letters?????? Let me know if you have any questions, or there is something else I might be able to help you out on.

    Please let me know if you posted my write up so I can go in an check out any responses.

    Thanks for the help,




    My husband and I took out a construction to end loan with a local bank in 2004. There were several changes and the loan was finally rolled over into the end loan in February 2006.

    Upon review of our documents we discovered that the loan application was a standard lending agreement for MERS and Fannie Mae/Freddie Mac…used in MERS’ MOM agreements….

    Massachusetts – single family – fannie mae/Freddie mac uniform instrument (MERS) form 3022

    In Feb. 2008 we declared bankruptcy as pro se. We listed “contingent” every creditor in our schedules including the bank we originated our mortgage with.

    Using the bankruptcy statutes and rule we filed a motion using rule 3001(d) for all “secured” creditors to provide “proof” of their perfected interest in our real and personal property, including the bank that originated our mortgage.

    The court granted our motion and all creditors need to set up to the plate. The first response from the creditors was photocopies of the security documents. We again filed a motion using the Federal Rules of Evidence, Rule 902 and the Uniform Commercial Code to produce the “original” note and mortgage for inspection. That was also granted by the court. The bank (mortgage) inspection was scheduled through the bank’s attorney for Aug. 25, 2008. At the inspection, the bank produced very nice colored copies. We (myself and the trustee for the house trust) inspected them very carefully and noted that neither of the documents had any markings at all on the back side of the documents indicating any type of endorsements (blank or special) or conveyances, transfers or assignments. Because we were not experts however we filed a motion to have a “forensic” examination made of the documents. (At this point our naive view was only looking at the “signatures” not the accounting). Well this generated a 120 page opposition motion from the bank. We were really puzzled at the fire storm response our “simple” request garnered (at this point we didn’t realize what we now believe to be the bank’s real concern and panic).

    Finally after much back and forth with the court, the bank was ordered to produce the “original” note and mortgage for inspection in open court with a forensic document expert. Much to our surprise the bank actually produced the “original” note and mortgage. Now we were even more confused and puzzled at the extraordinary measures the bank went through to resist this inspection. This made us very curious as to what the bank was so concerned about if they were in possession of the “original” instruments all along.

    Now it gets interesting because what all that digging produced was what we believe to be major breaks in the chain of title and possible fraud (withholding of funds (our payments) from the real investor). This is where we need help, pulling this all together.

    The “mortgage” is recorded in the name of MERS, however upon review of the recorded deed there is no MIN number listed. Also a search of the MERS online system shows that our property is not recorded with them.

    Also, a look at the information regarding MERS and the “beneficial” party, which in this case we believe to be Fannie Mae is not indicated anywhere in the documents. MERS also has a forum that we checked out and there was a post from someone who asked…can someone explain mers in laymans terms which proved to be very revealing.


    In that post is the link to the standard language and forms for fannie mae/Freddie mac.

    The other thing we checked out on MERS was the foreclosure procedure for Massachusetts “even though the services has physical custody of the note, custom in the mortgage industry is that the investor (Fannie Mae, Freddie Mac, Ginnie Mae or private investor) owns the beneficial right of the promissory note.”

    We then looked into Fannie Mae and found links to their information https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/mers/pdf/merspolicy.pdf

    This stipulates the filing requirements for MOM loans created with MERS.

    With all of this research we are now really puzzled by all of this. The bank used the MERS MOM forms, recorded our mortgage in the registry of deeds in MERS name, failed to get or publish the MERS MIN number and from all indication failed to notify Fannie Mae regarding their beneficial interest in the property.

    Again, we had the opportunity to inspect the “original” note and mortgage and there are absolutely no assignments, conveyance etc., and absolutely no endorsements blank, special or otherwise on the back of those documents.

    We are trying to wrap our hands/heads around this because we believe they have numerous problems, but we need to be able to specifically identify them. Any insight as to what might be a good next step would be greatly appreciated.

    Thanks, Lady

  285. We sent our letter of rescission to our loan servicer. They sent back a letter stating ‘we acknowledge receipt of your notice of receission’ however, they state they’re not responsible because they did not originate the original note.

  286. I just glanced at a few posts and have to wonder if folks are aware of the typical loan closing process that was in place in CA the last several years. Usually a mobile notary would be dispatched to a borrower’s location with two stacks of loan documents and a very brief window of time to “sign up” the borrower. Borrowers would be given NO opportunity to read or review loan documents and this is precisely how brokers/lenders managed to obtain signatures on documents with information altered by the broker/lender. I saw this practice first develop in the 1980s when I was a banker and watched it become the standard in the mortgage industry by the time I left banking in 2007. Including a stint at sub-prime lender Aames the very idea that borrowers had ANY meaningful opportunity to read and review their loan documents is so far removed from the truth that it is actually nauseating. I was able to work on or analyze several loan origination systems and am truly amazed that the public has not been educated as to the absolute control exercised by brokers/lenders over the loan closing process. I make allegations about this process in every complaint I file wherein it is appropriately alleged. The world needs to know about this so the true culprits in this meltdown, the brokers and lenders, can be brought to justice.

  287. Ex-Subprime Brokers Help Troubled


    by Chris Arnold

    David McNew

    A foreclosure sign stands in the yard of a house in Southern California. Getty Images

    All Things Considered, April 9, 2008 · Amber Barbosa didn’t graduate college. But she did get an education — by working for the now infamous subprime lender New Century Mortgage Corp.

    Barbosa was a quick study: A few years later, she struck out on her own as a mortgage broker.

    “In 2006, I made close to $500,000,” she says. Not bad for a 28-year-old with no college degree.

    By then Barbosa, who was living outside of San Francisco, had a nice boat, a 27-foot Bayliner. She had several houses, a Mercedes and a Cadillac.

    “I was riding around in my ’07 Escalade,” she says. “God, I had three properties at the time — one right on the water with ocean access, another property worth $800,000.”

    NPR checked the property records, and Barbosa really did own those houses. Since the crash of the housing market, though, she says she has pretty much lost everything.

    But during the height of the housing bubble, brokers like Barbosa were working next to a river of money; all they had to do was reach in and grab some. Basically, the more costly and risky the loans they gave to their customers, the more money they made.

    Wall Street Demand for Subprime Loans

    Before the bottom fell out of the subprime loan market, many big financial firms had an unquenchable thirst for subprime loans. Firms were making a lot of money securitizing these high-interest-rate mortgages, so the demand from Wall Street for new loans was huge. And that created a big opportunity for mortgage brokers. The industry is very thinly regulated, and many brokers made piles of fast, easy money off the lending frenzy.

    Barbosa says she was pretty fair to her clients and got them the best deal she could in the marketplace. But she says there was plenty of incentive not to put the customer first: Lenders would offer her 1 percent or 2 percent of the price of the loan as a kickback if she persuaded her client to take a higher interest rate. That was legal and commonplace.

    Then there were the negative-amortization or “pick-a-payment” loans. Those offered low payment options to begin with but often exploded on the homeowner. As interest rates reset, often at much higher levels, homeowners faced larger payments. That’s because the minimum payment required at the introductory rate didn’t even cover the interest on the loan, let alone the principal.

    “The bottom line is that the lender offered an incentive of 3 percent to the broker if they put [a client] into that particular loan,” Barbosa says.

    On a $500,000 home in California, brokers could make $15,000 to $20,000 or more in kickbacks on every single one of these risky loans.

    “Obviously, tons of people got pushed or thrown in that direction,” Barbosa says.

    From New Century to Nonprofits

    NPR spoke with Barbosa while she attended training at the Neighborhood Assistance Corporation of America, or NACA. Some out-of-work mortgage brokers have now found their way to nonprofits like this one. NACA is working with borrowers facing foreclosure all over the country, refinancing or restructuring their unaffordable subprime loans.

    Bruce Marks heads up NACA and now helps retrain former subprime loan brokers. Who better to untangle these unaffordable loans than the brokers who helped set them up, he says. The former brokers understand the “exploding ARM loans” and the “pick-a-pay loans,” Marks says. “They are the experts, because they were a part of that industry, and they know that business inside and out.”

    An Industry Riddled with Fraud

    Anthony Narag worked as a loan officer for several different mortgage brokerage outfits in Southern California. He says everybody in the industry knew there was fraud all over the place: “It’s almost like baseball with steroids. They knew about it, but they didn’t do anything about it.”

    A case in point was the “stated-income loans.” These were originally designed to help self-employed people with irregular income streams obtain mortgages. But during the housing boom, most people who got them weren’t self-employed. They or their brokers just exaggerated their income to justify a big loan set to adjust to a high interest rate. Narag says to do that, they sometimes needed a supporting letter from a certified public accountant.

    According to Narag, an account executive from the now bankrupt lender New Century told brokers like him not to worry about that letter.

    “He would tell people, ‘I have a CPA in my back pocket if you need one,'” Narag says. Narag says that meant he could get brokers bogus accounting letters so that fraudulent loan applications could get approved. New Century declined to comment for this story.

    Narag says he also observed brokers printing fake bank statements or other income documents, and that there was a black market for these items. Everybody — including the lenders and banks buying these loans — looked the other way, Narang says, because the money was so good.

    Narag got into the business himself after buying his own house: He saw that his loan officer wore shorts, didn’t work that hard and raked in money. So Narag quit his job as a sales manager and was soon making $10,000 to $15,000 a month easily — without gouging his customers, he says. Brokers who did gouge their clients could make much more than that, he says.

    The Hard Sell

    Deceptive sales tactics were also commonplace. Darryl Toney worked in a local mortgage outfit in Chicago that had dozens of brokers selling subprime loans. The office had “that used car salesman feel,” with “ruthless” brokers, he says.

    Toney says he was taught to give homeowners the hard sell to get them into aggressive high-interest loans — even if it meant convincing them to refinance, instead of sticking with a better fixed-rate loan that they could afford. Toney says he wasn’t dishonest, but a lot of other brokers were because they told people that risky adjustable loans had fixed rates.

    After a year of working as a subprime mortgage broker, Toney was getting calls from customers who couldn’t afford their loans. The market was falling, and he couldn’t refinance them or help them. So he quit.

    “I couldn’t go for it … to compromise my integrity — or at least, continue to compromise it, unfortunately,” he says.

    A Gray Zone

    The situation is complicated. Some people were clearly lied to and cheated. Others knowingly borrowed recklessly or bought a house they could not afford. Many people are somewhere in between.

    As an independent broker, Barbosa says she was straightforward with people. But a lot of homeowners just wanted to take cash out of their homes and make a low payment — even if the rate on their loans would eventually adjust much higher.

    She says she explained all the loan terms to them: “They knew about the adjustments and fees.” But she says, “They just wanted their money and they wanted the deal to close. Whatever we would say to them, they would take the loan anyway.”

    Barbosa, Toney and Narag all say they’re happy to be starting their new jobs as mortgage brokers with a nonprofit. Now they’re helping people who can afford a reasonable interest rate to save their homes.

  288. I love this so much


    Cassy’s place is much nicer. Looking at her, you wouldn’t guess she’s a squatter. Until recently, she worked as an instructor at Miami Dade College and as a researcher at Florida International University. Then her husband was deported to the Bahamas this past September, leaving her with the kids and a mortgage. “I don’t mean to cry crocodile tears,” she says. “But we paid our dues.”

    Pat Kinsella
    squatters, Liberty City, Buena Vista, foreclosures, BrownsvilleThe county put a lien on her North Miami home, and police officers eventually kicked her out. She tried to rent an apartment but was broke and had bad credit. “The shelter system is hell,” she adds. “It isn’t made for human beings.” With no place to stay, she was forced to send three of her kids to live with her husband. This prompted “a nervous breakdown” and a trip to the psychiatric ward. After she recovered, a volunteer referred her to Rameau a month ago.

    With his help, she moved into the 1,450-square-foot house, which sold for $430,000 two years ago and is now worth about $263,000, according to county records.

    Standing in her spacious kitchen, as the yellow afternoon light creeps through the window shades, she talks about her new part-time job selling T-shirts. Her plan is to get her kids back and pay the mortgage on the house. “I’m not trying to be a freeloader,” she says. “I just finally feel like I’m home. I am ready to fight these people.”

    Well the squatter can prove that the owner is not the owner of the Note and mortgage then the squatter may as well sue the bank for damages.
    The famous SEC violations can be used to put the banks in Jail.
    I lived in London in the 70`s.We had the best squat money could not buy, on Doors Road in Fulham just outside the Fulham Broadway underground. Centrally located to all markets and the local bar with a cemetery in case someone had to go to a funeral.
    Only dead people lived in that cemetery I never went there.
    The Roman Catholic Priest hated the fact that his fresh milk and bread with the newspaper was never on his patio in the morning. Mark got up early and always passed by the padre first. The Priest had the largest half dozen of fresh eggs in the hood.
    Gosh we were fed up of milk, bread and eggs for breakfast daily. My girlfriend was a pro at fetching mushrooms the fresh edible ones, she sautéed them with oil and salt, delicious when mixed with eggs. By the mid morning when we got to school there was usually no food left for us to eat, crumbs everywhere, its hard to learn with no food especially if you are making costumes and clothes, fashion school was no joke.
    Peter Gummer was no Sir; he had not been knighted yet I worked part time at his PR firm which gave me some pittance and a fresh bottle of red wine daily, life was good.


    Don’t cry. Just move into one of those empty homes around the corner.

    By Natalie O’Neill

    Published on November 19, 2008 at 9:12am
    Her knee-length dreadlocks wrapped in a green cloth, Cassy hoists her two-year-old daughter up on a hip and shuffles in her socks into her big, clean bedroom. “This house is a castle,” says the slender, soft-skinned former university teaching assistant, shaking her head in disbelief. “I’ve never had a walk-in closet … and all this space.”

    Pat Kinsella
    squatters, Liberty City, Buena Vista, foreclosures, BrownsvilleTwo months ago, Cassy (not her real name) was homeless, out in the rain with her four kids. Now she has a three-bedroom, two-bathroom, sky-blue house on a tree-lined street in Miami’s Buena Vista neighborhood. She takes warm showers, cooks vegan dinners, and watches the news on a small, fuzzy TV screen. The only catch: The house isn’t hers. Cassy is a squatter and, at any moment, could be arrested for trespassing, even burglary.

    Not everybody in Miami-Dade County is crying over this year’s 40,342 foreclosed properties. Cassy is part of a small, well-executed movement by activists at Take Back the Land to relocate homeless families into empty houses and abandoned government-owned buildings.

    The 39-year-old Haitian mother recently lost her North Miami house after agreeing to a too-good-to-be-true mortgage loan. She lived in the much less spacious place for years before she was forced to leave. Ironically, the place where she now stays is owned by Lehman Brothers, a major player in the market for subprime mortgages — thought to be a catalyst for the housing crisis.

    Cassy was guided to the home two weeks ago by Take Back the Land, a group with a long record of standing up for the poor and needling authorities who fail them. During the past year, the organization has risked significant legal trouble to aid several people such as Cassy in getting roofs over their heads. It hopes to do much more. “We could virtually empty the streets and shelters simply by filling the vacant houses,” director Max Rameau says. “Homes should go to people, not kept empty so banks can cash in.”

    Take Back the Land, which has 10 volunteers, first gained national media attention two years ago after setting up a contentious shantytown called Umoja Village at NW 17th Avenue and 62nd Street in Liberty City. Asserting the “black community’s right to own land” in its own neighborhood, they erected 21 shanties on public land using wooden pallets and tarps.

    After months of wrangling between city zoning authorities and Rameau, the village burnt down in April 2007. Residents suspected city employees had a hand in the fire. Afterward, the activist leader helped 14 displaced villagers to a warehouse in Liberty City, where they stayed for about three weeks.

    A new crisis exploded around the same time across the county. Empty houses began to pop up in record numbers. Foreclosed properties nearly tripled from 2006 to 2007, swelling from 9,814 to 26,691. And some displaced homeowners — such as Cassy — became temporarily homeless. Indeed, between January and July 2007, the number of homeless on the street increased by nearly one-quarter, according to the Miami-Dade Homeless Trust.

    Then, on October 22, 2007, Take Back the Land moved its first homeless family into a foreclosed house.

    The next day — on the one-year anniversary of the Umoja Village construction — Rameau announced he was cooking up a new strategy. The plan: Move the homeless into the deserted houses, with or without permission. They would carefully choose participants, he told the Miami Herald, to avoid “creat[ing] crack houses in Liberty City.”

    The idea soon faded from the public spotlight. Since then, Take Back the Land has “liberated” six others, Rameau says, aiming to find them a place to stay for at least three months.

    The move-ins work like this: Rameau and four other volunteers screen candidates to measure “urgency of need” — and to ensure they aren’t mentally ill or addicted to drugs. Next the group chooses a house. Repair costs, safety, livability, and proximity to Take Back’s headquarters in Liberty City are considered. Volunteers then “visit the location several times in order to gauge if the place is being watched,” Rameau says.

    Participants are instructed to enter through the front door and to be honest — even to befriend neighbors and put utilities in their own names. So far, it has worked.

    Moreover, independently of Take Back the Land, dozens of other squatters have moved into properties across the city, particularly in Allapattah, Little Havana, and Little Haiti, says city code enforcement director Mariano Loret de Mola. A month ago, the city passed a law giving police and zoning authorities more power to deal with them — but it has yet to go into effect.

    “We’re putting a priority on it because they are places for criminal activity, for drug dealing and drug use,” Loret de Mola says. “It’s a quality-of-life problem.”

    One of the maverick squatters is T-bone, a gray-bearded, slightly spacey 48-year-old teddy bear of a man who once lived in Umoja Village. He borrowed a screwdriver in late October, unlocked the front door of a foreclosed home across from a graveyard in Brownsville, and temporarily moved in. There’s no power or water, and he flicked a lighter to guide New Times through the pitch-black house. Walls were ripped out, glass bottles lay broken, and plastic toys from the previous residents were strewn about. In the back, a bare single mattress lay on the floor. T-bone gave a bashful look. “It’s hard to find work,” he said. “I read the paper. There ain’t no jobs.”

  292. Wonders never cease. If you think you all have problems come to Cleveland Ohio deemed the epicenter of the foreclosure crisis. Nationsbanc Mortgage Corp., nka Bank of America sued me for foreclosure in 1996 claiming to be the “owner and holder” of my mortgage. In support of that allegation they submitted an assignment from Society National Bank to Nationsbanc Mortgage Corp. dated 14 days after the lawsuit was filed. We conducted discovery and learned that they were not the owner and holder as claimed in the complaint, Fannie Mae owned my mortgage and note which they purchase in 1988 from Society National Bank. The Court was then stymied. Fannie Mae THREE YEARS LATER, demanded that Nationsbanc Mortgage Corp. buy my mortgage and note from them. Nationsbanc Mortgage Corp. then hired powerhouse law firm Jones, Day to do their thing. Was the Court stymied by the obvious fraud before the court…no way. So what does the court do? They allow Bank One Cleveland, NA, nka JP Morgan Chase Bank, a second mortgage holder, to amend their original answer and crossclaim which originally denied all of the allegations in the original foreclosure complaint, to ask for foreclosure—bim, bam, boom the foreclosure judgment was granted ……….by a judge not even assigned to the case.
    And you all are wondering why the meltdown!

  293. A friend whom I am helping was fighting his foreclosure and filed chapt 7 as a pro se. The attorney, (assembly line type in the opposite end of the CA where he lives), predicably filed motion to lift stay. He filed an objection noting issues raised here about who is the actually legal holder of the note and the attorneys do not represent that person. The judge then continued the hearing and then it looks like those attorney fearing the worse made som lame ass pleading that knowing this information was work product. The judge dismissed the motion. My guess was to avoid rulling against them as it appear it might go that way and so that decision couldnt be used in a later complaint. However after the discharge was rendered by the BK court, without notice the lender had a sheriff’s sale of the property. It appears illegal that this can be done without notice to the borrow or am I missing something here? the date of teh first sheriff’s sale was posponed by the bk filling. When can a “lender” sale it without notice again? These guys are shady

  294. Judge Has Stern Words (But No Fine) for Associates at Sanctioned Firm
    Posted by Dan Slater
    Last month we posted on some provocative comments made by a bankruptcy judge, who, in deciding not to impose attorney sanctions, suggested that flat-fee pricing in foreclosure proceedings was leading to shoddy, assembly-line legal work. Now we’ve got a decision where a judge did impose sanctions.
    On Friday, two law firms — Buchalter Nemer and Ablitt & Charlton, along with name partner Robert Charlton — got whacked with a combined $150,000 in sanctions. In a decision regarding an order to show cause in the case, called Nosek v. Ameriquest, bankruptcy judge Joel Rosenthal found that, throughout earlier proceedings, lawyers at both firms, in representing Ameriquest, had continually represented that Ameriquest was the holder of Nosek’s mortgage, when in fact it had been assigned to another lender. (Here’s a story from the WSJ’s Amir Efrati.)
    Judge Rosenthal held: “At a time when mortgages and notes are bought and sold at a pace so swiftly that the assignor and assignee cannot keep up with the paperwork, had the attorneys at the Ablitt firm checked the firm’s file, they would have seen that Norwest was perhaps the real party interest. . . . The firm cannot shield itself from institutional knowledge.” Rosenthal fined the firm $25,000, and attorney Robert Charlton another $25,000. (The Buchalter firm was fined the remainder, or $100,000.)
    But how about the two associates who assisted Charlton in the case? The judge took a more generous view toward them, despite the fact that each had signed documents that said Ameriquest was the holder of the mortgage, when in fact it wasn’t. “[T]he Court is mindful that young associates are often not in a position to question the assignments given to them. Because the affidavits are unclear as to what each associate was told when given the assignment, the Court will not impose monetary sanctions on [the two associates] but will let this decision serve as a warning that in the future the Court expects associates will be cognizant of and fulfill their responsibilities . . . .”
    We reached out to both firms, but haven’t heard back. Of course, we’ll let you know if and when we do.
    LB’ers, what say you? Should the two associates get off with only a wrist-slap? Are associates generally “not in a position to question the assignments given to them”?
    Update: On Wednesday afternoon, we got a note from Robert Dato, the assistant general counsel of Buchalter Nemer. He issued the following statement on the firm’s behalf:
    Buchalter Nemer is disappointed in the sanctions order and intends to appeal it. Although some documents that were filed in the case exhibited confusion as to the identity of the mortgage holder (Ameriquest or Norwest), it made no practical difference because Ameriquest’s “attorney-in-fact” agreement with Norwest allowed Ameriquest to prosecute claims in its own name. Buchalter Nemer believes that sanctioning a law firm $100,000 for its alleged role in failing to attach that agreement to a proof of claim form is clearly excessive. And that result is particularly unfair when there was no intent to deceive anyone and where plaintiff and her counsel always knew the identity of the mortgage holder.

    786 274 0527

  295. March 6, 2008, 11:50 am
    Foreclosure Legal Work: A Shoddy, Assembly-Line Practice?
    Posted by Dan Slater
    Does flat-fee pricing foster assembly-line lawyering?
    That’s what U.S. bankruptcy judge Jeff Bohm suggested in a decision, entered yesterday, in a consumer bankruptcy case involving Countrywide and a Texas homeowner. While Judge Bohm declined to enter sanctions against Countrywide and its lawyers from two firms — Barrett Burke and McCalla Raymer — he wrote: “This fixed-fee business model appears to have been an overwhelming financial success. . . . Meanwhile, the profession has suffered from the ever decreasing standards that firms like Barrett Burke and McCalla Raymer have heretofore promoted. This demise must stop.”
    The judge called problems at the firms’ culture “disconcerting” and described what he called the firms lack of care for accuracy and failure to communicate with clients. “[W]hat kind of culture condones its lawyers lying to the court and then retreating to the office hoping that the Court will forget about the whole matter.” While “perfection” he said is “too much to demand, preparedness and candor are not.”
    What’s the legal backstory behind all this? Apparently, in a Chapter 13 bankruptcy – used by homeowners to catch up on their mortgage payments — the lender can seek to foreclose by filing a “motion to lift stay.” If the movant — i.e. the lender — wants to withdraw the motion between the filing of it and the hearing, it can do so. And, in some cases, it can shift the attorneys fees to the borrower if the original reason for filing the motion was due to payment defaults that have since been cured. However, if the reason for withdrawing the motion was due to the lender having inaccurate financial info regarding the borrower’s defaults, then the lender cannot shift fees.
    In this case, Countrywide attempted to shift fees, when in fact the reason for the filing of the motion to lift stay was due to its own inaccurate information. Judge Bohm put part of the blame on Countrwide’s limited contacts with its law firms, who largely hand off the work of analyzing mortgage histories to paralegals, he said. That system, he said, delivered a windfall to the law firms but fostered an assebly-line process, resulting in shoddy legal work that hurts consumers and the courts. He did not go so far as to impose sanctions. Here’s a story from Peg Brickley at Law Blog sister pub the Daily Bankruptcy Review.
    The Law Blog reached out to Barrett Burke and McCalla Raymer but did not immediately hear back. Here’s a statement Countrywide put out yesterday in response to the decision. Here’s part of the judge’s ruling, and here’s the second part.
    These law firms aren’t the only ones that have hit speed bumps in the foreclosure crisis. Law blog colleague Amir Efrati did this story on so-called “foreclosure mills.” He quotes a lawyer who says that while most firms who handle these cases for lenders in general do a good job, in the “gold rush” to get a piece of the growing business, some firms “have cut corners.”
    LB’ers, we imagine that, with the increase in Chapter 13 filings, this issue of how law firms analyze payment histories for the lenders they represent is not going away. Those familiar with this work — is the judge right on? Too soft? Too harsh?

  296. From: April Charney [mailto:April.Charney@jaxlegalaid.org]

    Foreclosure Mess: Two Different Plaintiffs Claim to Own Same Mortgage
    Posted By Amir Efrati On November 14, 2008 @ 1:38 pm In Global | No Comments
    It’s been a while since we revisited the foreclosure crisis, which has obviously gotten worse. Foreclosure numbers are skyrocketing, while numerous states, the federal government and financial institutions are tackling the issue in various ways.
    For the legal beagles at so-called foreclosure “mills,” which do assembly-line lawyering for lenders and other mortgage owners, the crisis has meant lots of work but also woes, including sanctions and stern lectures from judges (examples here, here and here). Why are judges so frustrated? The increased volume is leading to mistakes and irregularities, which we’ve chronicled before.
    Now comes the foreclosure case of Joanne Fredenburg, a widowed homeowner in Lehigh Acres, Fla., where real estate prices have plummeted. Last month Ms. Fredenburg was served with not one but two foreclosure lawsuits from two different plaintiffs that both claimed to own her promissory note and mortgage and said she owed them each more than $276,000. That, of course, is impossible. (Click here and here for the two complaints.)
    One lawsuit seems to make sense. The plaintiff is a unit of Deutsche Bank that acts as a guardian or “trustee” for investors of mortgage-backed securities. Those investors collectively own loans such as Fredenburg’s. But the other lawsuit was filed by a mortgage-servicing company that collects borrower payments on behalf of investors. Surely that is a mistake, as servicers don’t typically own loans.
    Indeed, following an inquiry by the Law Blog, we’re told that the servicer, American Home Mortgage Servicing, will withdraw its lawsuit, which was filed by Miami-based Adorno and Yoss LLP. (We’ve put out calls to both and will let you know if we hear back.)
    But Ms. Fredenburg’s lawyer is none too happy. Even after American Home withdraws its suit, J. Rex Powell of Cape Coral says he will ask for discovery to find out what payments his client made, whether they were paid to the right entity and whether she was given the proper credit. Given that most people don’t defend against foreclosure lawsuits and the plaintiffs are awarded default judgments, Powell says the case raises an interesting question: Are entities wrongly filing foreclosure suits and collecting on notes they don’t own?
    Perhaps Florida Circuit Judges Jay Rosman or Michael McHugh, whose dockets include the Fredenburg foreclosure suits, will be able to shed some light.



    I am in agreement with my longtime colleague Mr. Mulligan (he and I had cases in the last recession and most recently in my stint with Indymac). On the surface, it creates an interesting delay. However, to be most effective, more should be sought. For example, if the transaction has a rescission issue and is within the 3 year statute of limitations on a TILA rescission claim, the complications of who has the note, who has the legal authority to reject or accept a rescission. As articulated in the attached case of Miguel v. Country Funding, this whole concept of how securities work can have a dramatic impact on the consumer remedies counsel is addressing. In that regard, April is really onto something. The lender/servicer/securitizer has created an extremely complicated web . . . that they will use to their advantage, you must also turn it around on them.

    Side Note: I believe that the outcome of Miguel today would be different. The Official Staff Commentary to Regulation Z issued in 2004 renders the Miguel case as most likely moot. Unless the current owner/assignee has notified the consumer of the address for such notices, the OSC allows that, absent the address notification, notice to the servicing agent is effective as to the creditor/assignee.

    Putting that aside, it becomes critical to know who the master servicer is and who holds the note for litigation purposes. No question, the communication between the loan servicer and the master servicer is minimal for fear of litigation based on other discussions on this thread. Knowing who the master servicer is and involving them in communications and litigation forces the servicer and the master servicer to communicate. This new found communication makes resolution easier in my opinion. (Remember the master servicer has nothing to do with the servicing the loan but is the master servicer of the security who has the authority to act for the security as a whole.)

    I cannot stress enough with those you who are going down the litigation path with lenders these days, get to the master servicer. To do so, make a written request pursuant to 15 U.S.C. §1641 (f)(2). As such they are required to give you the name, address and telephone number of the owner/note holder/beneficiary/master servicer of the obligation. Furthermore, to avoid any delays, expand the request by including an explanation of what you are looking for such as:

    · Please note, under 15 U.S.C. §1641 (f)(2), you are required to give the name of the “owner of the obligation or the master servicer of the obligation”, the master servicer is the master servicer and securities administrator of a “Pooling and Servicing Agreement” or similar document.
    · For purposes of rescission, pursuant to the Official Staff Commentary to Regulation Z 226.23, notice to the servicer shall be deemed notice on the assignee/creditor in absence of the assignee/creditor providing the consumer an address for rescission.

    Given two recent trends:

    · The San Francisco Office of the U.S. Attorney has begun prosecuting borrowers who lied on their loan applications
    · Barney Frank, Chairman of the House Committee on Financial Services who has said: “the government should avoid giving a “free ride” to any borrower who could not have afforded a mortgage to begin with. While the foreclosure situation might necessitate legislation, there is, in my judgment, zero likelihood that taxpayer dollars will go to those who should never have had loans in the first place.”

    As attorneys, protecting and preserving the rights of your clients should be first and foremost. With this new direction, you must protect consumers from criminal and civil prosecution. While the lenders created these “liar loans” and in most cases mortgage brokers created the lies and got unsuspecting borrowers to merely sign a completed loan application, the financial institutions and legislature are now trying to shift the blame to consumers. Finally, why contact the lender for a loan modification and supply them credit information for them to have a great reason to not offer assistance and prosecute the consumer.

    So, in conclusion to this tirade of sorts, more litigation against lenders seems to becoming the best solution then picking up the phone and “negotiating” with someone who is trying to get to your prosecuted.

    786 274 0527



    Notice of Rescission
    Via Certified Mail, Return Receipt Requested
    Decision One Mortgage Company, LLC
    3023 HSBC Way
    Fort Mill, SC 29715
    August 9, 2008
    RE: Account#’s: 2200061039421, 2200061039422
    With this letter, I hereby exercise my rights under the Federal Truth in Lending Act, 15 U.S.C. § 1635, Regulation Z § 226.23, to rescind the above referenced mortgage loan(s).
    Pursuant to 15 U.S.C. § 1635(f), my right to rescind this loan extends to three-years as a result of a defective Truth in Lending disclosure statement. This rescission notice has been sent to you within that time period therefore, “I WISH TO CANCEL.”
    If these accounts have been paid off, please complete the attached satisfaction of Deed of Trust forms(one for each, of total 2 accounts), reflecting the original Decision One lien that has been satisfied.
    Pursuant to 15 U.S.C. § 125 (b) “When an obligor exercises his right to rescind under subsection (a), Within 20 days after receipt of a notice of rescission, the creditor shall take any action necessary or appropriate to reflect the termination of any security interest created under the transaction.”
    (g) “In any action in which it is determined that a creditor has violated this section, in addition to rescission the court may award relief under section 130 for violations of this title…”
    Thank you for your immediate attention to this matter.


    Allan Hennessey


  300. Well as you all may see the situation is quite fluid, the concepts and opinion expressed here in the past months since this blog was first posted has and is coming to pass.

    We are at the very start of a huge meltdown. I believe that we may never see anything like this ever in another lifetime, ignorance is at its highest, and something huge is coming down and fast.

    The banks are in a mad rush to get as much property as possible as fast as possible, at any price.

    Watch out your home is next; they have moved to pull every dirty trick in the book to get the homes in any way possible.

    I want to give you some tips. (Mentioned on this blog).

    Go to the county recorders` office; photocopy all the paper on record which relates to your home.

    If your loan is a lost note type demand at foreclosure consider yourself lucky.
    If your loan is in securitization pool visit edgar.com, look for the servicing and pooling agreement. Learn about the SEC, 10k and 8k filings. Read the 500 page paper related to the 10k and other filing.

    Answer your Complaint on time, seek a good lawyer or call me for help with seeking one.

    You must take this process very seriously do not walk away from your home, stop paying the bank, file a lawsuit on them from the onset.

    Fraud, Racketerring, identity theft, botching up of income and overvalue of the homes are crimes.

    Do not let the banks get away with your home. If you still need help call me and I will try my best to get you a lawyer. Stand up and fight you can win this.

    786 274 0527

  301. A Warning to others having Mortgage problems: Re: A family of predatory lenders…Our family was having some problems with our first mortgage we got behind and were facing a potential forclosure. We got a lot of the typical rescue mailers telling us that we had plenty of equity and not to worry. We knew this and we only needed 20 to 30 thousand dollars to bring the loan current. Plus we knew we could sell another property that would pay off part of our loan at any time. That seemed simple enough, Now let the nighmare begin… We were approched by a broker / lender named Jim Marks out of Tamps Florida who said he could rescue us and the rates would be very low because we had so much equity in our waterfront home. He said he could find us plenty of money. We were very clear to him that we did not have the income to do any major loan an we only needed a small amount. Fast foward… He befriended our family, had lunch many time in our home and other places , went snorklinf and diving on our boat with his family, he also wanted to see all the waterfront and residential properties my family had invested in, he also brought out investors to see what we had, later we found out that the investors were his own realtives ( Barry Silber the lawyer lender), They wanted to know if any friends had good deals on waterfront properties, I fell for all of it like a sucker and provide what they needed, Marks assisted by Silber structured a deal putting everthing in to the that we already owned, they created a corpoation for our family, as a JV partner Marks took 50% and gave us 50%, but took complete control of everything, he sold land we had, used the money for other purchases, took out loans without approvel from our family. As we were about to sell three of our waterfront lots and an investment home, he said don’t do it put it in the JV and we would do much better later with him in control. So we trusted him with everything including the check book , we thought he was our friend and would managed and protect us but boy were we wrong. We had no idea that it was all a set up from the very begining to get control of everything we had. It is clear now that we had a big target on our backs called equity. We were steared by Mr Marks right into what I now believe was nothing more than family of Predatory Lenders. They got me and my family by saying that they could rescue us but all we got was high interest rates etc etc. They eventuly forced us into a foclosure, but always stood by with additional high cost loans in order to get them to stop their forclosures. We were trapped. We were forced to meet after hours at their offices to sign more rushed document that we did not really understand. Jim Marks would say don’t worry I got your back and would never let you sign anything that would hurt you or your family. Papers were shuffled around for hours by the lawyer/lender Barry Silber and their title company that they all owned and controlled. We did not want to sign anything but we were up against the wall and the mortgages that they gave us were all due again. They took a years worth of payments up front that night and paid temselve many fees. Now we had a new giant mortage on our home that was due in one year it also had a rider that would take away all our rights to the JV that controlled all our Families properies if we didn’t pay them back withinh that one year. We told Marks that we can’t pay this loan back and he said dont worry we will sell somthing in the JV to pay this off or refinance you again. The lawer involved was Mr Mark’s realative, Barry Silber was also part of the company that gave us one or more of the mortgages. Before that year was up his cousin Barry Silber started forclosure on everything and than said they could not lend any more money. What is astounding is that our Mortgage on our home was now over $ 1 million dollars. How did this happen in just 3 years? How did we allow some one to take all our families properties? First we trusted Jim Marks as a friend and busness partner. But he was clearly working his way into our family and eventually found out every aspect of our assets and liabilities. Second: We were not very smart with our finaces. Third: We don’t have much of an education and trusted him because he said he could handle everything properly.
    Now we see that they were all very smart and we were conned over and over again into trusting a family of hard money lenders who had one motivation and that was to milk us of all our equity by what ever means possible. We all feel very bad because we let this happen to our families holdings. We believe that state and federal laws have been broken and would like others to give their advise or their own story if they have one. So Don’t ever fall for someone trying to rescue you with a hand of friendship.
    I can tell all of you that this web site has help in a great way. Keep it going

  302. In other words, how can we help the banks make more money for the sake of the top flight banking elite.

    WORD of caution, if you are losing your home, this should tell you our government will not do anything for you. You must lift yourself up and fight. do not wait for a hand out set your sights at the solutions and they are all in this blog.

    No one is going to bail you out, you must start your fight and the sooner the better, and by the way share th knowledge you acquire here with as many people as you can, who knows you may help someone save their home.

  303. In other words, how can we help the banks make more money for the sake of the top flight banking elite.

    WORD of caution, if you are losing your home, this should tell you our government will not do anything for you. You must lift yourself up and fight. do not wait for a hand out set your sights at the solutions and they are all in this blog.

    No one is going to bail you out, you must start your fight and the sooner the better, and by the way share th knowledge you acquire here with asa many people as you can, you will make our nation that much, who knows you may help someone save their home.

  304. Paulson: bailout program won’t purchase troubled assets; focus remains on financial markets

    WASHINGTON (AP) — The government has abandoned the original centerpiece of its $700 billion rescue effort for the financial system and will not use the money to purchase troubled bank assets.
    Treasury Secretary Henry Paulson said Wednesday that the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending. He also announced that the administration was looking at a major expansion of the program into the markets that provide support for credit card debt, auto loans and student loans.

    Paulson said 40 percent of U.S. consumer credit is provided through selling securities that are backed by pools of auto loans and other such debt. He said these markets need support.

    “This market, which is vital for lending and growth, has for all practical purposes ground to a halt,” Paulson said.

    On the issue of using the $700 billion bailout package to provide help to ailing auto companies, Paulson said the administration preferred an approach that would accelerate support to that industry from other legislation Congress passed this fall.

    Paulson said the administration is exploring other options, including expanding the program beyond banks to nonbank financial institutions which provide essential credit to both businesses and consumers. He suggested that capital could be provided to institutions on a matching basis in which the government would supply money to those able to raise money on their own.

    Providing an update on the largest government bailout in U.S. history, Paulson said that the effort was showing results but that more efforts were needed given the most severe downturn being faced in housing.

    “Our financial system remains fragile in the face of an economic downturn here and abroad,” Paulson said. “Market turmoil will not abate until the biggest part of the housing correction is behind us. Our primary focus must be recovery and repair.”

    The administration decided that using billions of dollars to buy troubled assets of financial institutions at the current time was “not the most effective way” to use the $700 billion bailout package, he said.

    The announcement marked a major shift for the administration which had talked only about purchasing troubled assets as it lobbied Congress to pass the massive bailout bill.

    The bailout money also should be used to support efforts to keep mortgage borrowers from losing their homes because of soaring default levels, he said.

    A proposal to have part of the bailout funds used to guarantee mortgages that have been reworked to reduce monthly payments for borrowers is an approach the administration continues to discuss, Paulson said, although he indicated it would not be a part of the rescue program. He said it went beyond the intent of the legislation Congress passed on Oct. 3.

    Asked about what he had in mind to expand the rescue effort to support credit card and other types of consumer debt that is backed by selling securities, Paulson said it would probably take weeks to design the new program and then more time to get it implemented, a possible sign that any such proposal would have to be implemented by the incoming administration of President-elect Barack Obama.

    Speaking of the first-ever summit of leaders of the Group of 20 major industrial and developing countries, Paulson said this weekend’s meeting needs to focus first on how to repair the financial system as a way to bolster the global economy.

    Elsewhere, Paulson praised a new set of guidelines issued Wednesday by the Federal Reserve and other bank regulators, saying that they addressed a crucial issue of making sure that banks continue to lend at adequate levels.

    The guidelines urge institutions to continue lending to credit worthy borrowers and to work with mortgage borrowers to avoid defaults. In addition, the guidelines encourage the banks to set dividend payments for shareholders and compensation for executives with the current crisis in mind.

    The guidelines address criticism that banks obtaining funds from the $700 billion rescue plan could simply use the money for their own purposes rather than helping struggling homeowners and the overall economy.

    Critics are concerned that banks, which are getting $250 billion through government purchases of their stock, are not using the money to boost lending to customers, one of the main reasons why the economy is in a crisis.

    “If underwriting standards tighten excessively or banking organizations retreat from making sound credit decisions, the current market conditions may be exacerbated, leading to slower growth and potential damage to the economy,” according to the regulators’ guidance.

    The Fed, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, and Office of Thrift Supervision said all financial institutions were expected to follow the new guidelines, even those not receiving federal assistance.

    The Bush administration already has committed $250 billion of the $700 billion rescue fund for the purchase of bank stock, giving financial institutions an infusion of cash the government hopes they will use to resume more normal lending operations and address the most severe credit crisis in decades. On Monday, the administration announced that it was allocating another $40 billion as an investment in troubled insurance giant American International Group.

    Those decisions leave only $60 billion of the initial $350 billion left to allocate. To access the second $350 billion, this administration or the next will have to make a request to Congress for the money.


    Once there was a little island country. The land of this country was the
    tiny island itself. The total money in circulation was 2 dollar as there
    were only two pieces of 1 dollar coins circulating around.
    1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.

    2) B decided to purchase the land from A for 1 dollar. So, A and C now each own 1 dollar while B owned a piece of land that is worth 1 dollar. The net asset of the country = 3 dollar.

    3) C thought that since there is only one piece of land in the country and
    land is non produceable asset, its value must definitely go up. So, he
    borrowed 1 dollar from A and together with his own 1 dollar, he bought the land from B for 2 dollar. A has a loan to C of 1 dollar, so his net asset is 1 dollar. B sold his land and got 2 dollar, so his net asset is 2 dollar. C owned the piece of land worth 2 dollar but with his 1 dollar debt to A, his net asset is 1 dollar. The net asset of the country = 4 dollar.

    4) A saw that the land he once owned has risen in value. He regretted
    selling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollar
    from B and acquired the land back from C for 3 dollar. The payment is by 2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan to C.
    As a result, A now owned a piece of land that is worth 3 dollar. But since he owed B 2 dollar, his net asset is 1 dollar. B loaned 2 dollar to A. So his net asset is 2 dollar. C now has the 2 coins. His net asset is also 2 dollar. The net asset of the country = 5 dollar. A bubble is building up.

    (5) B saw that the value of land kept rising. He also wanted to own the
    land. So he bought the land from A for 4 dollar. The payment is by borrowing 2 dollar from C and cancellation of his 2 dollar loan to A. As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollar.B owned a piece of land that is worth 4 dollar but since he has a debt of 2 dollar with C, his net Asset is 2 dollar. C loaned 2 dollar to B, so his net asset is 2 dollar. The net asset of the country = 6 dollar. Even though, the country has only one piece of land and 2 Dollar in circulation.

    (6) Everybody has made money and everybody felt happy and prosperous.

    (7) One day an evil wind blowed. An evil thought came to C’s mind. ‘Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollar in circulation, I think after all the land that B owns is worth at most 1 dollar only.’ A also thought the same.

    (8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollar coins, his net asset is 2 dollar. B owed C 2 dollar and the land he owned which he thought worth 4 dollar is now 1 dollar. His net asset becomes -1 dollar. C has a loan of 2 dollar to B. But it is a bad debt. Although his net asset is still 2 dollar, his Heart is palpitating. The net asset of the country = 3 dollar again. Who has stolen the 3 dollar from the country? Of course, before the bubble burst B thought his land worth 4 dollar. Actually, right before the collapse, the net asset
    of the country was 6 dollar in paper. his net asset is still 2 dollar, his
    heart is palpitating. The net asset of the country = 3 dollar again.

    (9) B had no choice but to declare bankruptcy. C as to relinquish his 2
    dollar bad debt to B but in return he acquired the land which is worth 1
    dollar now. A owns the 2 coins, his net asset is 2 dollar. B is bankrupt,
    his net asset is 0 dollar. ( B lost everything ) C got no choice but end up
    with a land worth only 1 dollar (C lost one dollar) The net asset of the
    country = 3 dollar.

    There is however a redistribution of wealth. A is the winner, B is the
    loser, C is lucky that he is spared. A few points worth noting –

    (1) When a bubble is building up, the debt of individual in a country to one another is also building up.

    (2) This story of the island is a close system whereby there is no other
    country and hence no foreign debt. The worth of the asset can only be
    calculated using the island’s own currency. Hence, there is no net loss.

    (3) An overdamped system is assumed when the bubble burst, meaning the did not go down to below 1 dollar.

    (4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the loser. The asset could shrink or in worst case, they go bankrupt.

    (5) If there is another citizen D either holding a dollar or another piece
    of land but refrain to take part in the game. At the end of the day, he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.

    (6) When the bubble was in the growing phase, everybody made money.

    (7) If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A ) and take part in the game. But you must know when you should change everything back to cash.

    (8) Instead of land, the above applies to stocks as well.

    (9) The actual worth of land or stocks depend largely on psychology.

    There seems to be some level of misunderstanding in regard to why the sub-prime securitization scheme is so “sloppy” (to be kind).

    The fact is, for most of this decade, foreclosures were so routine that it became commonplace to not bother with the time and expense of following the dictates of the law. As one blogger notes repeatedly, every foreclosure wound up generating another new loan during the feeding frenzy. It was like the opening day of fishing without limits on a day that never ends. Why bother with the details when no one was bothering to look? Classical legal standing and jurisdiction rules just didn’t apply (and in too many cases still don’t). I mean, these people were all just unqualified deadbeats who couldn’t make their payments, right? Wrong. A lot of them were simply easy targets without access to legal resources who got slammed into toxic loans that the originator knew were going to wind up in foreclosure.

    Until someone actually got the attention of the courts and the ugly mess started being brought into the light of day, it was business as usual and all seemed to be well in the special servicer garbage disposal/REO system.

    Even the IRS couldn’t come to a rule for guidance on forgiven debt in REMIC loans; they simply said there wouldn’t be a penalty for a servicer not filing a 1099 on a securitized loan – mainly because documenting the real value was impossible, despite what was being reported as the debt to the borrower. Some loans were acquired by special servicers at far below their book value for the purpose of foreclosing. The tax implications were overwhelmingly complex and the IRS basically threw their hands in the air and said their latest guidance was all they could come up with. “Figure it out how you want, but if you don’t report it, we won’t penalize you if you don’t.”

    Congress finally came to the rescue and for the time being, declared that forgiven debt (on loans up to $1M) would not be taxable on REMIC loans.

    Now some of those wishing to use the formerly rapid-fire unbridled process are finding there is actual resistance in some courts and they now have procedural precedent. Unfortunately for them, they are finding there are an unknown number of instances in which they can’t find or document the standing issue because the procedure was actually and deliberately fraudulent. Counsel representing foreclosure plaintiffs are now facing judges who may strictly enforce the rules when (and if) defense counsel objects. Very few courts are going to be activist in terms of scrutinizing the cases against un-represented borrowers hence the call to action on the part of legal aid entities.

    There’s an old adage that implies that just speeding up a mess gives you little more than a bigger mess. Welcome to yet another part of the melt

  306. is there anyone out there that has a sample civil complaint for RESPA/TILA and cal. civ code section 1632?

  307. I’m sorry, I should clarify one thing regarding the above entry, that is the elders DID receive a loan mod. notice at the same time they received the default notice. It was the replies the elders had attempted to make in re: to the mod. is when they got no return replies from Saxon.

  308. Mr. Garfield,
    This is a wonderful site and I’ve learned so much from the information provided here. Thank you very much for the help and for your time invested. Our problem is much like many others here, and it’s so sad that as consumers, we are fighting and clawing our way to find help when we are the victims!
    My in-laws are in their mid to late 70’s and have lived in their home for 53 yrs. They have been victims of mortg. fraud and this has been confirmed by the Attorney General’s office after sending a summary with supporting doc’s to, also to dept. of corp. consumer aff. HUD, D.A. and several other agencies. The elders have filed chap 7, chap 13, have continuously requested loan mod’s, no response. At the time of the loan, their income was inflated to $15,000 a month, after they had submitted bank statements as proof of income showing SSI payments of $1,170.00 a month. The loan resulted in monthly paymnts of $6,161. a month! They were instructed to sign blank doc’s and fax back, and the rest would be taken care of for them. The elders took that as a good gesture that the broker was there to help them. I was reading your story re: Mr. Pierre R. Augustin, and noticed one name in particular that hit a nerve for me. That is New Century Mortgage. This was the elders original lender before it was assign. to Saxon M. The concern that I have with N.C. is that they approved the elders loan Feb, 23 o7, March 2, 07 they recorded the note with the county rec. off. However, at or around the time of Feb, 23 N.C. had been confronted by the Mass. Bank Comm. for not filing it’s annual 2006 report, subsequently cutting off N.C. lines of credit causing some loans to go unfunded.
    This was brought to the Comm. attention through an article on Bloombergs. that N.C. planned on filing a loss for the last quarter of 2006 and this is when the Comm. contacted N.C.
    The Commissioner requested that N.C. file it’s report by March 1, 07 (which they did not) yet N.C. on March 2, 07 was in the county recorders office filing the note to my in-laws home! Shows where their priorities are!
    Mr. Garfield, New Century already knew they were going under at the time they signed these elderly’s up for their loan. They then passed it on to Saxon, who then brought Quality loan serv. Morgan Stan. (which I am aware is part of Saxon) and Deutsche Bank into the deal.
    However, the very same day the elders received the default notice, is the same date that was on the loan mod. notice also. (as if to cover their butts) At this point, I’m not sure if I should go with the “Notice of Non-Compliance” “The TILA” “Right of Rescission” although it may be too late for that one. I do know that the B.K. att. did next to nothing to help these people and when asked, “can they re-file chap 13?” att. replied, “they can, but I won’t do it for them”
    No other B.K. att. will touch this since we already have this other one.
    We went to a Real Estate Att. who said he would take the case for Fraud, but before looking at any of the loan doc’s, said, “the house is gone” I was under the impression that an attorney should fight for you? We are picking up the loan doc’s tuesday since tomorrow is a holiday. The question is now, where do we go from here?
    Why does it have to be so hard to protect an elderly couple who have done nothing to harm anyone else in their lifetime, yet were made victims out of pure greed?
    I can’t understand why it’s so difficult to figure out, “after 53 yrs, SUDDENLY these people default? what happened?” obviously something caused them to “go south” with their mortgage payments! No one will take the time to find out what though!
    They have until Nov. 16, 08 so if you can please let me know what our best route is, I can do the foot work, I just need to know what to file.
    Thanks so much for any help you may have.


    Debra Caporale
    San Jose, Ca.

  309. can anyone help? i have a colorado home thats redemption period is ending on monday. we have filed a new lawsuit against the lender and trustee and a resttraining order to prevent the trustee from turning over the title on monday until the court can hear our newly filed suit. the law clerk has asked me if there is any case law where the judge can stop the redemption period in order to hear the companion case. does anyone know of any case law where this has been done? regards, steve


    Published: November 1, 2008

    AS a senior mortgage underwriter, Keysha Cooper was proud of her ability to spot fraud and other problems in a loan application. A decade of vetting mortgage documents had taught her plenty, she says.

    But as a senior mortgage underwriter at Washington Mutual during the late, great mortgage boom, Ms. Cooper says she found herself in a vise. Brokers squeezed her from one side, her superiors from the other, she says, and both pressured her to approve loans, no matter what.

    “At WaMu it wasn’t about the quality of the loans; it was about the numbers,” Ms. Cooper says. “They didn’t care if we were giving loans to people that didn’t qualify. Instead, it was how many loans did you guys close and fund?”

    Ms. Cooper, 35, was laid off a year ago and is still unemployed. She came forward to discuss her experiences at the bank in order to help shareholders recover money from WaMu executives.

    Ms. Cooper is one of 89 employees whose stories fill a voluminous complaint filed against officers of the company by the Ontario Teachers’ Pension Plan board, a big shareholder. Topping the list of defendants is Kerry K. Killinger, the WaMu chief executive who was ousted in mid-September.

    WaMu was seized by federal regulators in late September, the biggest bank failure in the nation’s history. It was sold to JPMorgan Chase for $1.9 billion.

    The shareholder complaint depicts WaMu’s mortgage lending operation as a boiler room where volume was paramount and questionable loans were pushed through because they were more profitable to the company.

    When underwriters refused to approve dubious loans, they were punished, she says.

    MS. COOPER started at WaMu in 2003 and lasted three and a half years. At first, she was allowed to do her job, she says. In February 2007, though, the pressure became intense. WaMu executives told employees they were not making enough loans and had to get their numbers up, she says.

    “They started giving loan officers free trips if they closed so many loans, fly them to Hawaii for a month,” Ms. Cooper recalls. “One of my account reps went to Jamaica for a month because he closed $3.5 million in loans that month.”

    Although Ms. Cooper couldn’t see it, the wheels were already coming off the subprime bus.

    “If a loan came from a top loan officer, they didn’t care what the situation was, you had to make that loan work,” she says. “You were like a bad person if you declined a loan.”

    One loan file was filled with so many discrepancies that she felt certain it involved mortgage fraud. She turned the loan down, she says, only to be scolded by her supervisor.

    “She told me, ‘This broker has closed over $1 million with us and there is no reason you cannot make this loan work,’ ” Ms. Cooper says. “I explained to her the loan was not good at all, but she said I had to sign it.”

    The argument did not end there, however. Ms. Cooper says her immediate boss complained to the team manager about the loan rejection and asked that Ms. Cooper be “written up,” with a formal letter of complaint placed in her personnel file.

    Ms. Cooper said the team manager told her to “restructure” the loan to make it work. “I said, how can you restructure fraud? This is a fraudulent loan,” she recalls.

    Ms. Cooper says that her bosses placed her on probation for 30 days for refusing to approve the loan and that her team manager signed off on the loan.

    Four months later, the loan was in default, she says. The borrower had not made a single payment. “They tried to hang it on me,” Ms. Cooper said, “but I said, ‘No, I put in the system that I am not approving this loan.’ ”

    Brokers often tried to bribe Ms. Cooper to approve loans, she says. One offered to pay $900 to send her son to football summer boot camp if she would approve a loan that had been declined by a host of other lenders. “I told him no and not to disrespect me like that again,” Ms. Cooper says.

    Hidden fees meant brokers could easily make between $20,000 and $40,000 on a $500,000 loan, Ms. Cooper says.

    “WaMu was allowing brokers to get 6 to 8 percent off one loan,” she says. “If I had a loan where the borrower was already tight and then I saw the broker is getting $10,000 or $20,000, I would cut their fees back. They would get so upset with me.”

    Ms. Cooper says that loans she turned down were often approved by her superiors. One in particular came back to haunt WaMu.

    Vetting a loan one day, Ms. Cooper says she became suspicious when a photograph of the house being bought showed one street address while documents deeper in the file showed a different address. She contacted the appraiser, and recalls that he said that he must have erred and that he would send her the correct documents.

    “So then he sent me an appraisal with a picture of the same house but this time with the right number on it,” Ms. Cooper recalls. “I looked the address up in our system and could not find it. I called the appraiser and said, ‘Please investigate.’ ”

    The appraiser came back, reporting that a visit to the California property had found everything in order and in agreement with the original appraisal. “I was so for sure that it was fraud I wanted to get on an airplane,” Ms. Cooper says.

    The $800,000 loan was approved, but not by Ms. Cooper. Six months later, it defaulted, she says. “When they went to foreclose on the house, they found it was an empty lot,” she recalls. “I remember clear as day this manager comes over to me and asks, ‘Do you remember this loan?’ I knew just what she was talking about.”

    Rejecting loan after loan, however, gave her battle fatigue. “The more you fight, the more you get in trouble,” she says. She was written up three or four times at WaMu.

    After WaMu’s mortgage lending unit laid her off, she applied for work in its retail banking division. She was turned down, she suspects, because of the critical letters in her personnel file.

    Ms. Cooper’s biggest regret, she says, is that she did not reject more loans. “I swear 60 percent of the loans I approved I was made to,” she says. “If I could get everyone’s name, I would write them apology letters.”

    CHAD JOHNSON, a partner at Bernstein, Litowitz Berger & Grossmann, is lead counsel for shareholders in the suit. He said: “Killinger pocketed tens of millions of dollars from WaMu, while investors were left with worthless stock.” With WaMu gone, he added, “it is all the more important that Killinger and his co-defendants are held accountable.”

    The lawyer representing WaMu and Mr. Killinger did not return a phone call seeking comment.

    Ms. Cooper hopes to return to the mortgage business soon. “I loved underwriting because it’s about being able to put a person in their dream home,” she says. “But messing these borrowers around was wrong.”

  311. A question for anyone that can answer this.

    If a bank alters a loan or modifies it without the consent, signature, or any documentation from the alleged borrower, can this contract be voided out and how?


  312. http://www.isda.org/
    Basel Committee on Banking Supervision
    Bank for International Settlements
    Centralbahnplatz 2
    CH-4002 Basel
    e-mail to baselcommittee@bis.org. Friday, 24th October 2008
    Re: “Proposed revisions to the Basel II market risk framework” and
    “Guidelines for Computing Capital for Incremental Risk in the Trading
    The International Swaps and Derivatives Association (ISDA), the Institute of
    International Finance (IIF), the London Investment Banking Association (LIBA), and
    the International Banking Federation (IBFed), are pleased to have this opportunity to
    comment on the Basel Committee on Banking Supervision’s Consultative Documents
    entitled “Proposed revisions to the Basel II market risk framework” and “Guidelines
    for Computing Capital for Incremental Risk in the Trading Book”.
    In responding to the consultation papers we have set out our core concerns in our
    letter which prefaces the appendix where we present our more detailed comments and
    answers to the questions from the papers.
    The recent market turmoil has been a catalyst for much regulatory soul-searching, and
    it is clear that the events in the market place have been a significant driver of many of
    the changes put forward in these consultation papers. While this is going on, it is
    important to recognise that our member firms have also gone through extensive
    internal reviews, with many risk departments, risk management procedures, and risk
    modelling processes subjected to wide scale investigation. In many institutions
    extensive change in risk management practices has already been effected, often with
    new leadership at the helm. We hope that many of these developments will result in a
    stronger more prevalent risk culture across the financial services industry.
    While we understand the desire on the part of regulators to raise additional regulatory
    capital against exposures in the trading book, we continue to believe that any double
    counting be avoided so that these risks are only captured in regulatory capital
    calculations once. Equally important, the resulting minimum regulatory capital
    requirement should be commensurate with the risks identified at each individual firm.
    – 2 –
    The first paper proposes changes to the Market Risk framework following the
    decision to capture not only defaults but a wider range of incremental risks in the
    incremental risk capital charge (“IRC”). Many of the changes proposed reflect
    improvements to the VaR framework already embraced by our member firms, and
    therefore we welcome the changes and support their inclusion within the Basel 2
    framework. Specific examples of improvements underway include the capturing of
    non-linearities beyond those inherent in options, as well as the incorporation of more
    correlation and basis risks.
    The second paper identifies perceived shortcomings in the current 99% 10 day VaR
    framework, and proposes a new trading book capital charge covering risks
    incremental to the market risk charge, the “IRC”. We agree with many of the
    weaknesses identified, and once again industry has already looked to strengthen their
    risk management processes to better capture the risks of the trading book in many of
    the areas identified. We also agree with the Basel Committee that the proposed IRC
    goes well beyond the current state of risk modelling at most banks, and we would like
    to highlight this fact in our key messages.
    Key Messages
    Market Risk amendments
    We agree with the proposed changes to the market risk framework. We understand
    and support the additional clarity the amendments to the market risk framework
    provide (BCBS 140). Many of the improvements being put forward have already been
    implemented by our member firms. In particular, we welcome the fact that there is no
    requirement in the Basel Committee paper to bifurcate the trading book, as previously
    proposed under the US NPR. This would be both difficult to implement and costly to
    It is important to note that the contribution of the current market risk capital charge
    based on 3 times 10-day, 99% confidence level VaR to the total capital charge will
    significantly drop (perhaps to less than a third) as a result of introducing the IRC. This
    will almost undoubtedly result in weakening the importance of the short horizon VaR
    risk measures for regulatory capital purposes. This seems to be a concern raised in the
    second paper (BCBS 141) but we continue to believe VaR will play an important role
    in both internal and external risk measurement and management, and that we should
    not be too concerned about its on going status relative to the IRC.
    In the detailed content of the response attached to this letter below, we highlight our
    only concern with regards to these amendments and this relates to the section on
    illiquid positions, where guidance on prudent valuations attempts to align more
    closely with existing accounting guidance.
    IRC framework
    We believe that there are significant weaknesses in the Incremental Risk Charge
    (“IRC”) framework currently being proposed, and that until these are addressed an
    – 3 –
    alternative more plausible approach, both simpler and cheaper to implement, should
    be considered and made available to those firms who wish to adopt it.
    There are several basic issues with the IRC framework as currently proposed. Firstly
    the definitions of the more material incremental risks to be covered are mere
    generalisations of the risks covered in the current market risk framework. This would
    result in both credit spread risk and equity price risks being counted twice for
    regulatory capital purposes. The double counting of risks would undermine how
    useful any IRC model can be for the business, and would almost certainly fail the
    Basel II “use test”. Secondly, simulating either market spread risk or market equity
    risk for a full year completely ignores the liquidity of basic equity and credit index
    products. As a result, the capital charge for the trading book assets subject to IRC will
    not be comparable to banking book assets under Basel II. It is possible the charge will
    be much higher, with more capital set aside for trading assets that can be liquidated
    more easily than for assets with an otherwise similar risk profile held to maturity. This
    could discourage firms from holding risks in a mark-to-market environment, with the
    appropriate level of controls and where the prudent valuation framework would apply.
    Thirdly, the constant level of risk assumption that was considered appropriate for the
    incremental default risk charge, is a more challenging proposition when considering
    the broader scope and wider risks to be captured under the incremental risk charge.
    Under the usual assumption of uncorrelated returns over non-overlapping time
    periods, a shorter liquidity horizon only delivers minor (if any) capital reductions. The
    universal application of a 1-year capital horizon and constant level of risk assumption
    ignores the principal difference in risk management between liquid positions and
    illiquid positions. For liquid positions, risk mitigation measures such as substantially
    reducing your position and/or adopting more stringent hedging strategies are often
    initiated at the onset of a market shock. For illiquid positions, these kinds of risk
    mitigating measures are often not possible or cost-effective. For this reason, the IRC
    definition of a 1-year capital horizon with a constant level of risk assumption is
    unrealistic, especially for equities, and somewhat extreme for liquid products in
    particular. If, as expected, the IRC turns out to be a big component of the total
    regulatory capital charge, an artificially high IRC will prevent convergence between
    regulatory capital and internal capital allocation, which is in itself a goal of the Basel
    II framework.
    We believe these basic flaws in the proposed IRC framework, when considered
    alongside an overly ambitious implementation timeframe, make it imperative that an
    alternative fallback approach, generating the desired amount of additional regulatory
    capital, should be offered to the industry. Currently the framework includes two
    “fallback” positions for firms unable to calculate the IRC through internal modelling:
    (i) the specific risk capital charges under the standardised method (p718(XCiii) of
    BCBS140) and (ii) a charge based on F-IRB or A-IRB banking book comparable
    charges, with conditions, but this is only available for one year. The first option would
    be a step back for many firms who already have aspects of their specific risk
    modelling approved, and the second option could involve a significant amount of
    work for just 12 months regulatory recognition, without providing a firm with the
    suitable IRC platform to build on. The timeframe set out in the paper leaves no time
    for an effective quantitative impact study (QIS), following which a further review of
    the proposed framework would be necessary. Before such a necessary step can be
    – 4 –
    taken, the technical uncertainties need to be addressed, the models need to be
    designed and tested, and an alternative validation framework to back testing would
    need to be devised. We ask you to consider making an alternative fallback approach
    available, consistent with the objectives and principles of the IRC, but more
    accessible to more firms in the immediate future.
    Developing, implementing, validating, and having regulatory approval for a fully
    compliant IRC model by 2011 is, for the majority of our member firms, an extremely
    challenging proposition. Instead we suggest a revised implementation schedule of 1
    Jan 2010 for default risks on non-structured products, and 1 Jan 2011 for default risk
    on structured products, and then 1 Jan 2012 for the other IRC risks.
    The very high degree of model error in estimating trading losses at the 99.9% 1-year
    percentile level has been recognised by many firms, and has led to a search for a more
    tractable alternative approach to computing incremental risk-based trading book
    We consider that appropriate methodologies to calculating the IRC should share the
    following key features: firstly the need to arrive at a higher regulatory capital number
    for the trading book; secondly, avoid creating perverse incentives and therefore
    encourage the right kind of behaviour; thirdly, to ensure an element of looking
    through to the relevant risk factors and; fourth, and finally, to avoid the double
    counting of risks, and in doing so building a risk process that can be of use for internal
    purposes (passes the “use test”).
    There are two areas of current risk management practice and thinking worth
    considering further for possible inclusion in the IRC framework.
    1. VaR plus some form of scaling factor(s)
    For those firms unable to develop, implement, and validate models to compute the
    IRC, we recommend for further consideration a “fallback” position based on a general
    market risk charge and a specific risk charge (both measured using a 10-day VaR at
    99%, subjected to “x3” multiplier) scaled up. This could include a charge for
    migration risks (subject to scaling up), or if not a separate default / migration risk
    charge (1 yr capital horizon, at 99.9%) could be applied. Such an approach could be
    simpler and easier to implement, yielding a similar capital result, and not subject to
    the same weaknesses we identify with the proposed IRC framework. However,
    because of a lack of a strict mathematical and conceptual definition, it is not possible
    to compare the capital impact of the IRC as defined against such an approach on a
    consistent basis – over time and on different exposure types. That is to say, as we do
    not know what the results of full IRC modelling will look like, calibrating an
    appropriate scaling factor to yield a similar result is not currently possible. However,
    we believe there is still some merit in considering further developing this as a more
    useful fallback approach.
    Such an approach has the advantage of building on the progress some firms and
    regulators have already made on modelling default risks. In considering this approach,
    we would anticipate the scaling factor being applied to the newly improved VaR
    framework (BCBS140). This includes all factors that are deemed relevant for pricing,
    – 5 –
    nonlinearities beyond those inherent in options (e.g. mortgage-backed securities,
    tranched exposures or n-th loss positions), as well as correlation risk and basis risk
    (e.g. between credit default swaps and bonds). We argue that allowing some firms to
    fall back on an approach based on a scaled-up VaR number could effectively achieve
    similar results to those provided by a full IRC model. The main reason for this would
    be that many of the drivers of an IRC model are likely to be short term inputs scaled
    up. This approach would also leave market risk VaR intact for internal and reporting
    purposes, and would not therefore present a problem vis a vis the “use test”. Firms
    seeking to embrace more fully an integrated modelling approach would be free to do
    As with many scaling factors, the number is arbitrary, but would achieve the dual
    aims of raising additional capital and charging relatively more capital for illiquid asset
    classes, such as structured credit. The scaling should generate a capital number that
    provides firms with an incentive to implement a full IRC model, but should not result
    in a disproportional capital charge for those not in a position or willing to implement a
    full IRC model. A multiplier/s would need to be specified in advance, and different
    multipliers could be applied to different aspects of the trading book, perhaps
    determined by the liquidity of the position (this would avoid punishing very liquid
    positions). Scaled up VaR is a practical alternative approach to achieving the aims of
    raising additional regulatory capital, and charging realistic overall levels of capital for
    trading book activity, without the profound conceptual and implementation
    difficulties of the full proposals as currently written. Scaled up VaR belongs with a
    range of pragmatic approaches for calculating IRC while avoiding the difficulties of
    the current proposal. It builds usefully on firms’ existing VaR infrastructures, and the
    IDR calculators already being developed, and could be an efficient approach to the
    new calculation. Indeed, in many cases firms’ have implemented VaR calculations
    which already use most of the available market data, and after supplementing that data
    with forward looking adjustments where appropriate, it makes sense for firms to look
    to leverage those calculations for the IRC charge. Potential approaches building on the
    VaR technologies in use at many firms include modified historical simulation
    approaches with long time series, and the use of reval grid technology (suitably
    extended to cope with the larger market moves seen over the longer IRC horizon).
    Evidence that these approaches can be viably applied comes from the fact that firms
    in many cases use their VaR infrastructure and calculation techniques for Economic
    Capital calculations, which are typically performed to a one year time horizon.
    Through pragmatic use of data and calculation methodologies, it is therefore feasible
    to adapt VaR techniques to an IDR setting. Previously developed IDR calculators or
    non-VAR based Economic Capital calculators (possibly based on similar principles
    to IDR calculators) could also be adapted for IRC, perhaps in conjunction with VAR.
    Hence, leveraging existing VaR and / or Economic Capital approaches could be a
    valuable route to implementation of the IRC regime for many banks, and we believe
    this should be considered for inclusion in the final framework.
    2. VaR, stress testing, and scenario analysis
    A further approach worth considering as an appropriate methodology for calculating
    the IRC is partly based on systemic stress tests, and would see firms apply extreme
    scenarios to their trading book portfolios. This approach could be one of the few ways
    – 6 –
    in which banks and regulators ensure that statistical models do not miss some tail risk.
    In order to promote a consistent approach, the focus could be on having only a few, or
    perhaps even just one, stress scenario which is designed to simulate a systemic
    financial crisis of the kind supervisors are most concerned about. This scenario would
    focus on assets which suffer in a “flight to quality” scenario associated with financial
    crises; for example equities, corporate debt, consumer debt, emerging market
    government Eurobonds and FX rates, and derivatives which reference such assets.
    Under this approach output under a stress scenario should become a key output of
    firms’ pricing models, requiring monitoring and benchmarking by supervisors. This
    way firms and supervisors can build confidence in the results of their scenario
    analysis and stress testing.
    We suggest that the scenario(s) could be confined to those that would pose major
    systemic risks to the banking system (e.g., an asset price collapse). The exact
    magnitude of the stresses would need to be worked on together by firms and
    supervisors, but could be based on historical economic crises such as occurred in
    Japan in the late 1990s, 1998 in east Asia and 2008 in the US and western Europe, or
    more forward looking scenarios to be devised.
    We note that using stress testing based on judgemental extreme scenarios to set capital
    requirements creates a number of conceptual and technical challenges for firms and
    regulators. In considering this alternative supervisors would need to work closely
    together in designing scenarios, and in monitoring their application by firms. It would
    be important to ensure that losses on all non linear or complex products (e.g.
    securitisations), are calculated using “full revaluation” given you have stressed the
    underlying exposures. We note that it may be beyond the current capability of many
    firms to perform such a revaluation on securitisations of consumer debt, but that such
    an approach is nevertheless essential to gain an accurate assessment of stress losses.
    Whereas it is clear that stress tests are useful indicators for risk management (and
    mandatory for internal models), a range of views exist about the effectiveness of
    stress testing approaches in calculating capital requirements.
    Other key messages
    Structured products – The draft guidelines require banks to have in place a model for
    “credit default and migration risks for positions subject to credit risk” by 1 January
    2010. It should be feasible for most large banks to implement such a model by that
    date for their corporate credit portfolios, where the concepts of default and migration
    risk are relatively well understood and where banks have been working on IDR
    models for some time. Firms are much less likely to be in a position to implement a
    model for default and migration risks on structured products by that date, as the
    behaviour of such assets over the economic cycle is less well understood. Moreover,
    recent market events have demonstrated that a default-migration-spread risk
    framework may not be the most appropriate for structured products. Prescribing a
    model incorporating “migration risk” would force banks to use credit ratings to model
    the risk on structured finance products. It is unlikely that such an approach would
    have captured the trading losses of 2007 and 2008, and firms may prefer to model the
    risk of such assets on a price basis. Firms should have the flexibility to model such
    assets as they think is appropriate (e.g. on a price risk basis, as for other derivatives),
    – 7 –
    rather than be explicitly or implicitly required to adopt a default-migration-spread
    The interim treatment for re-securitisations – the interim treatment for resecuritisations
    based on the current banking book charge, which we know is under
    review, will require firms to implement successive changes to the regulatory treatment
    for these types of products. This is not a desirable outcome and, in promoting further
    uncertainty about the treatment of re-securitisations, could delay market recovery
    further. Furthermore we do not believe there will be enough time to adapt the
    securitisation banking book approach to specific securitisation trading book positions.
    There are different processes and risk management principles for trading book and
    banking book positions that need to be considered, making any short-term adjustment
    particularly challenging. With many of the details yet to be decided, we suggest that
    the switch of the respective regulations at the beginning of 2009 be re-considered.
    Besides these fundamental time constraints as well as technical concerns the
    significant effort to implement an interim solution is, from our point of view, not
    justifiable. Rather than implementing such a short-term solution banks should be
    allowed to focus on the enhancement of the IRC for these positions. Furthermore we
    encourage the Basel Committee to await the upcoming results of its ongoing
    investigations on risk weightings for securitisation positions. We believe that in order
    to fully assess the quality of the proposals with regards to re-securitisations a
    complete picture on all of the proposed changes is needed, instead of merely
    discussing single pieces of the framework.
    A one year capital horizon – as we have argued in the past, we do not think that the
    reference to the existing Basel II framework justifies the choice of a one year capital
    horizon and 99.9% confidence level. We raised concerns around the regulators’
    choice in capital horizon in previous submissions, including most recently in February
    2008 in our response to the default risk framework (Industry response to BCBS
    Consultative document “Guidelines for Computing Capital for Incremental Default
    Risk in the Trading Book”, Friday 15th February). In this response we explained why
    we felt that although the rule is said to be comparable with standards set for the IRB
    charge for credit risk, we believe it sets a far higher standard (99.9%, 1 year, no
    diversification) than for market risk (99%, 10 days, diversification, 3 multiplier).
    New liquidity horizon requirements – one of our key concerns relates to the
    prescriptive nature of the new liquidity horizon provisions, and floors proposed for
    various transaction types (paragraph 25) which do not take into consideration the
    maturity of the transactions in question. At the very least, for trades whose remaining
    maturity is shorter than the specified minimum liquidity horizon floor, it is
    appropriate to consider the trades’ remaining maturity as being the most relevant
    measure of liquidity horizon: the exposures from such trades will close down at
    maturity, and management can decide whether to re-open such exposures at this time.
    More generally, the horizon should be linked to the liquidity under stress conditions
    of the position being examined: as regent events have shown, one year can be either
    far too long or even too short, depending on the instrument. The additional capital that
    would result from the minimum liquidity horizon floors could be fairly significant,
    given the relatively long 3-month period specified for ‘other IRC covered positions’.
    Imposing floors on broadly defined asset classes may severely distort the proper
    reflection of different markets (e.g. related to highly liquid equity indices or less
    – 8 –
    liquid single stocks). Inappropriate liquidity horizons may also lead to a
    misrepresentation of hedges (e.g. hedges with shorter maturities than the imposed
    liquidity horizon) and consequently lead to a capital charge not commensurate with
    the true risks of the positions. We believe the maturity of the instrument should be
    considered as a factor in determining the appropriate liquidity bucket.
    Validation – It is unclear how the validation of the IRC model for the one year horizon
    at the extreme level of 99.9% should be performed. Defining a validation framework
    for a regulatory capital calculation still to be finalised and for models the industry has
    yet to build and implement is an almost impossible task. We think the guidelines
    should not include any detailed provisions on validating the IRC at this stage.
    We hope the Committee will agree that maintaining an open dialogue on these issues
    will be essential as understanding and modelling techniques develop. We would be
    happy to discuss any of these comments further and or hear your views on our
    response, and to arrange this please contact either Ed Duncan at ISDA, Andrés
    Portilla at the IIF or Katharine Seal at LIBA,
    Yours sincerely,
    Ed Duncan Andres Portilla
    Head of Risk and Reporting Director, Regulatory Affairs
    (ISDA) (IIF)
    Katharine Seal Sally Scutt,
    Director Secretary General,
    (LIBA) (Ibfed)
    – 9 –
    “Proposed revisions to the Basel II market risk framework” (BCBS 140)
    We understand and support the additional clarity the amendments to the market risk
    framework provide (BCBS 140). Many of the improvements being put forward have
    already been implemented by our member firms.
    In the section on illiquid positions, where guidance on prudent valuations is included,
    the Basel committee proposes to include a requirement to use actual prices or
    observable inputs, even when market volumes are down. Banks are expected to adjust
    valuations used for financial reporting (regardless of where they are in the FV
    hierarchy) to reflect the lack of liquidity of certain positions (including in times of
    stress) for market risk capital calculations. This must be reflected in Tier 1 regulatory
    Regulators must be aware that in proposing changes to the “prudent valuation
    framework”, that they are potentially widening further the gap between financial
    reporting based on accounting standards (such as those produced by the International
    Accounting Standards Board IASB) and reporting for regulatory capital purposes.
    The market risk charge, with the 99% confidence interval and 10 day liquidity horizon
    is based on model inputs, such as volatilities, which already do reflect liquidity
    aspects to a certain extent.
    The IAS 39 accounting standards require a prudent valuation of trading book
    positions using mark-to-market or mark-to-model techniques. Based on a going
    concern assumption and an end of day portfolio, prudent valuation will in general not
    reflect the impact of potential trading volumes under periods of market stress or
    assuming certain market concentrations and will not account for the aging of
    positions. Therefore the requirements for valuation adjustments to less liquid positions
    would drive a significant wedge between the valuation for balance sheet accounting
    and for market risk calculation. This would unduly increase the complexity of
    reporting and monitoring processes and complicate communication of evaluation
    results to internal and external parties. Rather than dividing the processes for
    accounting and market risk measurement even more we would welcome a
    convergence of both systems.
    Valuations clearly play a critical part in reporting both for accounting and capital
    purposes, and we strongly advise against further divergence between the two
    frameworks. We recommend Basel accept and recognise fair value measurement as a
    “prudent valuation” framework, without risking the introduction of elements which
    could be perceived as incompatible with IAS 39.
    – 10 –
    “Guidelines for Computing Capital for Incremental Risk in the Trading Book”
    Question 1.
    Under the proposal, the IRC would reflect all price risks except those directly
    attributable to movements in commodity prices, foreign exchange rates, or the
    term structure of default-free interest rates (“non-IRB market factors”).
    (a) Would it be preferable for supervisors to list specific types of events that must
    be captured (eg defaults, migrations, and only certain types of movements in
    credit spreads and equity prices)? What should be the basis for determining which
    types of events would be included, and how could the Committee ensure that the
    framework was not largely backward looking?
    (b) Would it be worthwhile to expand the scope and coverage of the IRC to
    capture price risks associated with commodity prices, foreign exchange rates and
    the term structure of default-free interest rates?
    As we discussed in the cover letter to our response, we believe that there are
    significant weaknesses in the Incremental Risk Charge (“IRC”) framework currently
    being proposed, and that we recommend for further consideration a more plausible
    fallback approach for firms still grappling with these issues. This would be simpler
    and cheaper to implement. Firms more comfortable with the conceptual underpinnings
    of the proposed IRC would be free to develop and implement their own internal
    approach to yield the appropriate capital numbers.
    Many firms believe these basic flaws in the proposed IRC framework, when
    considered alongside an overly ambitious implementation timeframe, make it
    imperative that an appropriate fallback approach, generating the desired amount of
    additional regulatory capital, should be offered to the industry. The timeframe set out
    in the paper leaves no time for an effective quantitative impact study (QIS), following
    which a further review of the proposed framework would be necessary. Before such a
    necessary step can be taken, the technical uncertainties need to be addressed, the
    models need to be designed and tested, and an alternative validation framework to
    back testing would need to be devised.
    We believe the guidelines were intended to incorporate enough flexibility for firms to
    adopt a range of different modelling approaches. It is clear from our discussions that a
    number of firms are keen on pursuing very different approaches to the IRC and we
    therefore encourage consideration of yet more flexibility in the framework to
    accommodate the range of evolving practices. The guidelines could be improved by
    focussing more on the desired outcome, and less on the detailed path and
    methodology to get there. It is possible that these different developing areas of risk
    management could be stifled by prescriptive requirements cast in stone (we note a
    formal process of adoption by the EU Commission has already begun). Further
    flexibility would also allow for those firms wishing to expand the scope and coverage
    of the IRC to capture price risks associated with commodity prices, foreign exchange
    rates and the term structure of default-free interest rates. We therefore see no reason to
    arbitrarily limit the scope of the IRC to just equity and credit markets.
    Question 2
    For covered IRC positions, Pillar 1 charges would depend in various ways on three
    types of risks: general market risks and specific risks, as defined under the
    current MRA, and IRC covered risks. Are the differences among these types of
    risks clear and measurable?
    – 11 –
    The new framework as proposed fails to clearly address the relationship between the
    market risk and incremental risk regulatory charges, with a resulting potential for
    huge overlap and double counting. Risks should only be captured once. We think that
    any double counting built into the framework as currently proposed will undermine
    the credibility of the model for users, and considerably weaken the models’
    conceptual basis. Allowing for adjustments to the models for double counting would
    be theoretically correct, but less desirable than not having the double counting in the
    framework in the first place.
    Furthermore, we believe that there is still some uncertainty around the proposed scope
    of the IRC and that this should be clarified. As currently drafted, the IRC could be
    interpreted to include a very broad range of instruments. For example, the scope
    currently seems to include all option products, and most interest rate and FX
    derivative products, since it would be difficult to argue that swap rates are default-free
    interest rates. Clarity around which “default-free interest rate” risks (local currency
    government bond? foreign currency government bond? interest rate swap/ and cross
    currency swap?) are excluded from IRC would be considered helpful.
    Question 3
    While the capital horizons and confidence levels underlying the IRC and the 10-
    day VaR charge would differ, the risk factors captured by these risk measures
    would overlap to a significant degree. However, any adjustments to offset doublecounting
    would complicate the framework and diminish the Pillar 1 importance of
    the 10-day VaR calculations including incentives to estimate the 10-day VaR as
    accurately as possible. Is it possible to provide double-counting adjustments that
    do not raise such concerns? How?
    While the proposed guidelines embrace the concept of “total price risks”, it is not
    clear which component of these risks should be captured by VaR and which should be
    included in the IRC. For any covered position, its market risk can be decomposed into
    three components: system risk, idiosyncratic variations and “event risk”. To avoid
    double-counting, each of these components should be measured either by VaR or by
    the IRC. If a firm measures any of these components in both VaR and the IRC, it
    should be allowed to calculate and deduct an amount caused by double-counting.
    Our main concern with double counting is that it is likely to result in over counting,
    i.e. charging too much regulatory capital given the risks identified. It is possible that
    the IRC could end up allocating more regulatory capital to a liquid trading book
    position than allocated to a similar position in the less liquid banking book. If the IRC
    can be compared to a banking book charge for a similar position and you then factor
    in adding a VaR charge for the same position, then this would clearly be the case.
    Double counting leading to over counting should therefore be avoided.
    We believe that an alternative fallback approach making use of VaR-based
    techniques, would allow firms to better address any concerns about the possibility for
    double counting between VaR and IRC (for example, by using an IRC model based
    on VaR 99%/10 day parameters, or vice versa). In such cases, there is no legitimate
    argument to double count risks in VaR and IRC. Even if diversification is considered
    undesirable with the default component of IRC (because of concerns about estimating
    the joint behavior of credit and market risks), there is no reason not to allow it for the
    – 12 –
    rest of IRC. Firms should therefore be given the option of either using the multiplier
    and add on approach or using a unified model that captures general, specific and IRC
    risk drivers together and computes a total risk measure.
    Question 4
    The proposal stipulates that an IRC model incorporate a one-year capital horizon,
    a 99.9 percent confidence level, and a liquidity horizon appropriate for each
    trading position.
    The Committee recognises that such an approach could present considerable
    practical challenges, including the need for data to calibrate key parameters.
    (a) What alternative guidelines would achieve the Committee’s objectives, but in
    a manner that would be less costly or difficult to implement?
    (b) Given the current state of risk modelling, is it feasible to estimate the portfolio
    loss distribution (excluding non-IRC market factors) over a one-year capital
    horizon at a 99.9 percent confidence level?
    (c) Would it be worthwhile to allow banks to use a single horizon for all covered
    positions (e.g. three months) and a lower confidence level (e.g. 99 percent),
    together with a supervisory scaling factor that was calibrated to achieve broad
    comparability with the IRB Framework for the banking book? Would such an
    approach be as useful for internal risk management purposes as the proposed
    In the cover letter to this appendix we have outlined our preference for further
    consideration of alternative methodologies, both less costly and easier to implement.
    Such approaches should also provide more time for the regulatory community to
    consider a longer-term more integrated modeling approach, while providing the
    industry with a more realistically achievable objective. Firms seeking to embrace
    more fully an integrated modelling approach would be free to do so.
    As stated in the key messages we do not think that the reference to the existing Basel
    II framework justifies the choice of a one year capital horizon and 99.9% confidence
    level. We raised concerns around the regulator’s choice in capital horizon in previous
    submissions, including most recently in February 2008 in our response to the default
    risk framework (Industry response to BCBS Consultative document “Guidelines for
    Computing Capital for Incremental Default Risk in the Trading Book”, Friday 15th
    The new liquidity horizon provisions, and floors proposed for various transaction
    types (paragraph 25) do not take into consideration the maturity of the transactions in
    question. For trades whose remaining maturity is shorter than the specified minimum
    liquidity horizon floor, it is appropriate to consider the trades’ remaining maturity as
    being the most relevant measure of liquidity horizon: the exposures from such trades
    will close down at maturity, and management can decide whether to re-open such
    exposures at this time. The additional capital that would result from the minimum
    liquidity horizon floors could be fairly significant, given the relatively long 3-month
    period specified for ‘other IRC covered positions’. For most credit products, and for
    single name and index CDS, this would certainly be too long. Many of these types of
    instruments have remained liquid even over the last twelve months. We would
    consider even a one month floor as conservative. Imposing floors on broadly defined
    asset classes may impose severe distortions to a proper reflection of different markets
    (e.g. related to highly liquid equity indices or less liquid single stocks). Inappropriate
    liquidity horizons may also lead to a misrepresentation of hedges (e.g. hedges with
    – 13 –
    shorter maturities than the imposed liquidity horizon) and consequently lead to a
    capital charge not commensurate with the true risks of the positions. We believe the
    maturity of the instrument should be considered as a factor in determining the
    appropriate liquidity bucket.
    We agree with the points that are made with regard to calibrating volatilities, and
    correlations, etc. but we are also concerned about the computational difficulty related
    to covering non-linear positions. The difficulty in accurately pricing derivatives in
    extreme stress scenarios adds to the difficulty of implementing a reliable model of
    market risk at 99.9% confidence and over 1 year.
    Concentration risks (p30)- Given that at this stage the correlation dynamics under
    different market conditions are still not very well understood, for the introduction of
    the IRC model banks should be allowed to use non-stochastic correlations. Research
    on the modelling of correlations under different market conditions as well as their
    stylised facts is still very scarce. At this stage, the introduction of varying correlations
    into the IRC model framework would most probably have a deteriorating effect on the
    statistical soundness of the generated figures. This would not only weaken the
    soundness of the IRC in its function as regulatory risk capital measure but also the
    acceptance for internal risk management purposes. To capture market concentrations
    and critical portfolio behaviour, it might be possible and preferable to calculate the
    IRC charge for distinct stressed market conditions using different market data
    Question 5
    Given the IRC soundness standard of a one year time horizon and 99.9th
    percentile loss, the Committee seeks comment on how the resulting risk measure
    might be validated quantitatively. For example, would it be reasonable to validate
    the underlying model at shorter horizons and/or at lower percentiles? If so, how
    might one ensure that the validation exercise is relevant for the one year 99.9th
    percentile standard? Also, would different aspects of the model likely require
    different validation approaches?
    We do not believe the 99.9% 1 year measure can be validated via back testing. Any
    validation against actual results would necessarily have to be extrapolated from a
    much lower confidence level and shorter horizon. But even at a shorter horizon and
    lower confidence interval empirical validation is challenging for many traded
    financial products.
    The daily VaR calculation now explicitly excludes certain risks which are to be
    included in the IRC. Outliers observed in back testing that can be attributed to IRC
    risks have to be excluded. It is unclear how the validation of the IRC model for the
    one year horizon at the extreme level of 99.9% should be performed. Validating the
    model at shorter time horizons and confidence levels is tantamount to using scaling.
    In common with a number of the points we make, it may be that the proposed 99.9%
    1-year measure is just too ambitious for the trading book.
    Given the challenges of validating the IRC and the scarcity of even related data, banks
    should be allowed to consider other validation frameworks such as the statistical
    validation of the input parameters (e.g., forecasting power of default probabilities) and
    – 14 –
    the theoretical and empirical justification of the model building blocks. A possible
    pragmatic approach to capital modelling could require the various model components
    to be validated separately. However, due to the current uncertainty in how the
    validation of the IRC model could be performed – defining a validation framework for
    a regulatory capital calculation still to be finalised and for models the industry has yet
    to build and implement is an almost impossible task – we think the guidelines should
    not include any detailed provisions on validating the IRC at this stage.
    Question 6
    The flexibility built into the proposed IRC potentially could make Pillar 1 charges
    for trading positions less comparable across banks. How might the framework
    ensure greater comparability without unduly limiting firms modelling choices? In
    particular, would it be productive to require banks to calculate risk measures for
    standardised test decks of trading portfolios, which could be used to compare
    model results across banks
    We are uncertain as to how beneficial a “test deck” exercise would be. However, a
    few of our members consider some form of benchmarking worth exploring. That said,
    each firm is expected to calibrate and adjust its model with respect to their own
    portfolios, and the comparison of model output for a standardised test deck would
    only allow you to analyse the differences in model output, but not to analyse the
    quality and/or correctness of the figures generated for each of the firm’s relevant
    Question 7
    Is the proposed implementation schedule feasible? If not, which IRC guidelines,
    and what specific types of positions or risk factors, are most problematic?
    We believe that the implementation timeframe does not allow for the weaknesses
    identified in the framework to be addressed. When considered alongside the essential
    need to better understand the impact of the final proposals, and the time required to
    conduct a successful Quantitative Impact Study (QIS), this makes a more realistic
    alternative approach / fallback position, generating the desired amount of additional
    regulatory capital, a vital addition to the proposed guidelines.
    The timeframe set out in the paper leaves no time for an effective quantitative impact
    study (QIS), following which a further review of the proposed framework would be
    necessary. Before such a necessary step can be taken, the technical uncertainties need
    to be addressed, the models need to be designed and tested, and an alternative
    validation framework to back testing would need to be devised.
    Instead we suggest a revised implementation schedule of 1 Jan 2010 for default risks
    on non-structured products, and 1 Jan 2011 for default risk on structured products, and
    then 1 Jan 2012 for the other IRC risks.
    Question 8
    What additional Pillar 3 disclosures related to the IRC, or the trading book more
    broadly, would be helpful to market participants and contribute to market
    We support an appropriate level of disclosure and transparency around the regulatory
    capital set aside for the trading book. However, with so many outstanding questions
    – 15 –

  313. lasalle bank under the direction of emc mortgage co filed a foreclosure complaint against me, i was able to prove by statements made in bankruptcy procedings that emc mortagge said they owned the note also violation of pa rules of civil proceedure, lasalle withsew their compalint so i filed a n action to quiet title as well as a motion to amed my response to include moe counterclaims anyone know of a book on quiet titles? lawyers i talked to want 5k just to say hello here’s my counterclaims

    TERM NO 10271-2008


    1.The Plaintiff in filing