Stupid Law

Hat tip to Bill Paatalo who wrote the main article. See link below.

I would like to say that this could have happened only in Arkansas, but that isn’t true. Watch how the Court twisted itself into a pretzel in its determines effort to make Wells Fargo win despite admitting to unlawfully altering the note by a forged endorsement.

I note also how the court steadfastly avoids the subject of ownership of the debt and clings to the notion that ownership of the note — i.e., the piece of paper that is EVIDENCE OF THE LOAN — is as deep as the court is willing to go.

see https://bpinvestigativeagency.com/wells-fargo-admits-to-executing-wamu-note-endorsement-in-2013-and-gets-away-with-it/

Register Now- 2 CLEs: Death of a Salesman — when the party who “originated” an apparent loan transaction is dead or bankrupt.

 

 

Mnuchin Lies Tip of the Iceberg

Mnuchin’s lies to the U.S. Senate are only symptomatic of the continuous stream of lies producing a new normal of bank arrogance and the continuing push to foreclose on homeowners as a means to gain illicit profits. Perhaps the flagrancy of his lies will awaken lawmakers to the fact that the entire financial system has a growing cancer caused by indifference to the crimes of the banks and resulting damage to tens of millions of Americans.

see http://www.latimes.com/business/la-fi-mnuchin-treasury-onewest-20170130-story.html

The Columbus Dispatch reported Sunday that Mnuchin denied in written responses to questions from the Senate Finance Committee that OneWest engaged in so-called robo-signing of mortgage documents.

The paper said its analysis of nearly four dozen foreclosure cases in Ohio’s Franklin County in 2010 showed that the bank “frequently used robo-signers.”

The practice, prevalent throughout the mortgage industry in the aftermath of the financial crisis, involved employees at financial firms signing foreclosure documents en masse without properly reviewing them.

Democrats sharply criticized Mnuchin during his Jan. 19 confirmation hearing concerning OneWest’s foreclosures while he ran the Pasadena bank from 2009 to 2015. They called the institution, which formerly had been troubled subprime lender IndyMac Bank, “a foreclosure machine.”

“Mnuchin ran a bank that was notorious for aggressively foreclosing on homeowners, and now he’s lying about his bank’s dismal track record in his official responses to the Finance Committee,” Sen. Elizabeth Warren (D-Mass.) said Monday. “Working families simply cannot trust him to be the country’s top economic official.”

CHECKLIST — FDCPA Damages and Recovery: Revisiting the Montana S Ct Decision in Jacobson v Bayview

What is unique and instructive about this decision from the Montana Supreme Court is that it gives details of each and every fraudulent, wrongful and otherwise illegal acts that were committed by a self-proclaimed servicer and the “defective” trustee on the deed of trust.

You need to read the case to see how many different times the same court in the same case awarded damages, attorney fees and sanctions against Bayview who persisted in their behavior even after the judgment was entered.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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*

This case overall stands for the proposition that the violations of federal law by self proclaimed servicers, trusts, trustees, substituted trustees, etc. are NOT insignificant or irrelevant. The consequences of merely applying the law in a fair and balanced way could and should be devastating to the TBTF banks, once the veil is pierced from servicers like Bayview, Ocwen et al and the real players are revealed.

I offer the following for legal practitioners as a checklist of issues that are usually present, in one form or another, in virtually all foreclosure cases and the consequences to the bad actors when the law is actually applied. The interesting thing is that this checklist does not just represent my perspective. It comes directly from the Jacobson decision by the high court in Montana. That decision should be read, studied and analyzed several times. You need to read the case to see how many different times the same court in the same case awarded damages, attorney fees and sanctions against Bayview who persisted in their behavior even after the judgment was entered.

One additional note: If you think about it, you can easily see how this case represents the overall infrastructure employed by the super banks. It is obvious that all of Bayview’s actions were at the behest of Citi, who like any other organized crime figure, sought to avoid getting their hands dirty. The self proclamations inevitably employ the name of US Bank whose involvement is shown in this case to be zero. Nonetheless the attorneys for Bayview and Peterson sought to pile up paper documents to create the illusion that they were acting properly.

  1. FDCPA —abusive debt collection practices by debt collectors
  2. FDCPA who is a debt collector — anyone other than the creditor
  3. FDCPA Strict Liability 
  4. FDCPA for LEAST SOPHISTICATED CONSUMER
  5. FDCPA STATUTORY DAMAGES
  6. FDCPA COMPENSATORY DAMAGES
  7. FDCPA PUNITIVE DAMAGES
  8. FDCPA INHERENT COURT AUTHORITY TO LEVY SANCTIONS
  9. CUMULATIVE BAD ACTS TEST — PATTERN OF CONDUCT
  10. HAMP Modifications Scam — initial and incentive payments
  11. Estopped and fraud: 90 day delinquency disinformation — fraud and UPL
  12. Rejected Payment
  13. Default Letter: Not authorized because sender is neither servicer nor interested party.
  14. Default letter naming creditor
  15. Default letter declaring amount due — usually wrong
  16. Default letter with deadline date for reinstatement: CURE DATE
  17. Late charges improper
  18. Extra interest improper
  19. Fees even after they lose added to balance “due.”
  20. Notice of acceleration based upon default letter which contains inaccurate information. [Not authorized because sender is neither servicer nor interested party.]
  21. Damages: Negative credit rating — [How would bank feel if their investment rating dropped? Would their stock drop? would thousands of stockholders lose money as a result?]
  22. damages: emotional stress
  23. Damages: Lost opportunities to save home
  24. Damages: Lost ability to receive incentive payments for modification
  25. FDCPA etc: Use of nonexistent or inactive entities
  26. FDCPA Illegal notarizations
  27. Illegal notarizations on behalf of nonexistent or uninvolved entities.
  28. FDCPA naming self proclaimed servicer as beneficiary (creditor/mortgagee)
  29. Assignments following self proclamation of beneficiary (creditor/mortgagee)
  30. Falsely Informing homeowner they cannot reinstate
  31. Wrongful appointment of Trustee under deed of trust
  32. Wrongful and non existent Power of Attorney
  33. False promises to modify
  34. False representations to the Court
  35. Musical entities
  36. False and fraudulent utterance of a document
  37. False and fraudulent recording of a false document
  38. False representations concerning “US Bank, Trustee” — a whole category unto itself. (the BOA deal and others who “sold” trustee position of REMICs to US Bank.) 

Expired, Forged, Robo-Signed Notary: How to use it.

THE GOAL IS TO SHOW THAT THE ABSENCE OF A TRANSACTION, NOTWITHSTANDING THE REFERENCE IN A DOCUMENT.

While the defective notarization does not itself invalidate the document, it certainly suggests questions about how that happened and then to question whether the same thing happened with other documents or endorsements. If you can cast sufficient doubt as to the trustworthiness of documents (and the party proffering it to the Court) of then the laws of evidence require that the proffering party actually prove the transaction instead of having the Court presume that the transaction referenced in a document actually existed.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Whether an instrument is notarized or not it is still valid between the parties to the instrument. So a mortgage for instance is required to be notarized only to get it recorded, which is for the protection of the lender and not for the protection of the debtor. Whether it was recorded or not the mortgage becomes enforceable when it is signed.

So the problem is this: if the notary’s commission expired, then the instrument was not properly “RECORDED”. Theoretically there is an academic argument to challenge the procedural legitimacy of a foreclosure if the notary was forged or expired. But as a practical matter nothing changes in the end. However, if some judge is convinced that not having recorded it in county records means that the lien was not perfected, it could cause substantial delays in the process.

BUT all that said, the use of a notary that has expired suggests that the notary was robosigned. AND robosigning could be evidence that other documents are robosigning, which is a form of forgery. And robosigning itself suggests the possibility or even likelihood of fabrication of documents including the note, assignments, endorsements etc. CAUTION: You cant just say it. You most prove the possibility or even probability of forgery, fabrication and robo-signing.

Establishing relevant and sincere doubt is easier than proving the “defense” of defective instruments etc.

If the robo-signing and fabrication issue are properly highlighted at trial or in motions THEN you have cast doubt on the trustworthiness of all the documents (or at least the ones where robo-signing and forgery are put into question). THAT in turn suggests that legal presumptions arising from the apparent facial validity of an instrument would not apply. Check the laws of your state.

In Florida once sufficient doubt is cast upon the trustworthiness of the documents, the documents are no longer sufficient to prove the truth of the matter asserted — i.e., in a note that money was loaned to the homeowner, in an assignment that the debt was sold (not just a sale of the paper instrument). This would require the the party proffering said documents to go in reverse, which we are very confident they cannot do — i.e., they must first establish the transaction and then prove that the instrument is an accurate reflection of the actual financial transaction.

There is no “prejudice” to a foreclosing party if they must prove up the transactions, since they are asserting that those transactions occurred anyway. What has changed is that instead of presuming and assuming the transactions shown on the documents were real, they must simply prove that the transaction occurred by showing delivery of money in exchange for the note, or money in exchange for the assignment or money in exchange for the endorsement.

Pennymac Forgeries Produce Some New Law

Pennymac tried to outwit the court system, succeeding at the trial level and then failing on appeal. The simple fact is that it is a rare instance where a party can lose a lawsuit based upon a forged instrument. The court will (and should) always find a way to deny such relief.

see sanabria-v-pennymac-mortgage-investment-trust-holdings-i-llc

Simple case. Closing attorney still had copy of the note — 5 pages. Pennymac sued on a 6 page note. Defendants denied that the note was real and denied they signed the document upon which Pennymac was relying. Pennymac said that Florida statutes required Defendants to file a cause of action to get rid of a forged document. The trial court agreed. The appellate court said no, the authenticity of the document and the signature is put in play once it is apparent to all that this the gravamen of the defense.

Florida Statutes 673.308.1 reads in relevant part: [Note §673 is UCC Article 3]

In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature.

Pennymac Trust likens the statute’s passing reference to “specifically” denying a signature’s authenticity to the specificity required to plead a cause of action for fraud under Florida Rule of Civil Procedure 1.120(b): “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with such particularity as the circumstances may permit.”

So as long as you don’t contest the signature specifically there is an iron clad presumption that you signed it. If the facts fit, then deny or set forth an answer or affirmative defense that specifically denies you signed it. But the word of caution here is that denying it doesn’t do you any good if you don’t have some pretty hard evidence, like this case, that shows that the document and/or the signature is not authentic. In this case the proof was straightforward.

BUT notice that the obvious nature of the forgery, fraud upon the court still somehow managed to escape the Plaintiff Pennymac and the attorneys for Pennymac. I wonder when someone important will look at that and say that is not the way to practice law.

 

 

Banks Struggle to “FIND” Nonexistent Documents

So for the people who are unemployed due to a recession that won’t really quit until the money stolen from the system is somehow replaced or clawed back, you have a job waiting for you if you can sleep at night knowing that if your activities are exposed, the bank will disavow your “irresponsible” actions, leaving you exposed to jail or prison.

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

—————-

see http://4closurefraud.org/2016/06/17/mortgage-companies-seek-time-travelers-to-find-missing-documents/

Every Bubble Bursts. The banks are now struggling to find people who will “find” nonexistent documents without expressly telling their superiors at the bank that the “found” documents were fabricated. The evidence is all over the internet as banks troll for prospective employees who will get their hands dirty and be prepared to get thrown under the bus should the malfeasance be discovered.

The documents are not merely missing. They do not exist. And without the critical documents required in every foreclosure, there can be no foreclosure. The documents must be fabricated because they don’t exist. The documents don’t exist because they were actually intentionally destroyed and because the banks have no interest in the property, the alleged loan, the “original” note (“missing” in most cases), the mortgage or the debt itself. Many documents existed but were destroyed by the banks.

If pushed to open their books we would find a complete absence of any financial transaction in which the banks or their pet trusts were involved. Up until recently the banks were able to get their employees to execute documents that were fabricated for the purposes of presentation in court. But the number of people who are willing to do that is diminishing. Bank employees sense the impending disaster for the banks and they don’t want to take the blame even if it costs them their job.

The entire bank scheme, as I previously reported, is based upon the ability to use legal presumptions. These presumptions create an opportunity for epic fraud and theft. If a document is facially valid, the burden shifts to the homeowner to rebut the presumption that it is indeed a valid, authentic document. But now homeowners are hiring forensic document examiners who are showing that the document presented is not the original even if it looks that way. More and more homeowners, when presented with a “blue ink” document will say they don’t know if that particular signature is their own signature because they know that the documents and signatures are being fabricated. The bank’s witness in court is treading the fine line between ignorance and perjury when they say that the note is the original. The same holds true to bogus assignments, indorsements (“endorsements”), powers of attorney and other documents the banks use to avoid being required to prove their case without the presumptions.

So the banks, without using their own names, are posting job openings for what 4closurefraud.com calls “time travelers.” People get hired for their willingness to create documents that appear to have been prepared and executed years ago. This is required because if there was no transaction years ago, then the sham is exposed — the “loan contract” between the homeowner and the originator never existed. And so when the originator endorses or assigns the note or mortgage to an undisclosed third party, the assignment is completely and irrevocably void as coming from an entity that never owned the loan but was merely named as the Payee or Mortgagee.

BUT if the original loan documents look valid, and the alleged transfers of the loan look valid, then the burden shifts to the homeowner to rebut the presumption that a real transaction took place between the homeowner and the originator and between the originator and the next party in the false chain of possession and ownership of the loan. This is why I have been relentless in insisting that discovery take place and be pursued aggressively. I have already seen many cases in which an order was entered requiring the banks to respond to discovery requests; in virtually all cases someone steps forward and settles with the homeowner. The only exceptions are where it is clear that the judge is going to rule for the banks anyway and will deny subsequent motions to compel the discovery that was previously ordered.

Of course the problem with the settlement is that the homeowner is being coerced into accepting a settlement that acknowledges some bank, servicer or trustee as actually having rights to collect or enforce the loan; since these parties are merely intermediaries who issue self-serving paper designating themselves as real parties in interest, such settlements could result in the homeowner being presented with claims later from the real source of funding in their loan. This is unlikely, but nonetheless possible. The only reason it is unlikely is that the real parties in interest are investors whose money was commingled with thousands of other investors in hundreds of trusts that never received any proceeds from their offering of mortgage backed securities that were neither mortgage backed or securities. The investors need a way to trace their money into the loans or, if they elect not to do so, to settle with the bank that cheated them in the first place with bogus mortgage bonds. There have been many such settlements, most of them unreported.

The fact remains that the “lender” is never part of any documented transaction. Hence the “lender” (the investors) enjoy none of the protections of a holder of a note nor the security of a mortgage. Fabricating documents and forging them is the only way of breathing life into the false loan contract that was documented, even if it never happened. And borrowers and their attorneys should take note that the entire loan infrastructure is an illusion that has been awarded judgments that pretend the illusion is real. we are either a nation of laws or a nation of men. Our Constitution makes us a nation of laws. This is our challenge. Do we allow bankers and politicians to turn back time on paper and treat them as though they are doing something right because NOW it is right because they declared it right, or do we reject that and apply rules of law that have existed for centuries for this very reason.

So for the people who are unemployed due to a recession that won’t really quit until the money stolen from the system is somehow replaced or clawed back, you have a job waiting for you if you can sleep at night knowing that if your activities are exposed, the bank will disavow your “irresponsible” actions, leaving you exposed to jail or prison.

Schedule A Consult Now!

 

Reminder: President of DOCX Pled Guilty to Fabricating and Forging Documents

WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation. In order to make it easier to serve you and get better results please take a moment to fill out our FREE registration form https://fs20.formsite.com/ngarfield/form271773666/index.html?1453992450583 
Our services consist mainly of the following:
  1. 30 minute Consult — expert for lay people, legal for attorneys
  2. 60 minute Consult — expert for lay people, legal for attorneys
  3. Case review and analysis
  4. Rescission review and drafting of documents for notice and recording
  5. COMBO Title and Securitization Review
  6. Expert witness declarations and testimony
  7. Consultant to attorneys representing homeowners
  8. Books and Manuals authored by Neil Garfield are also available, plus video seminars on DVD.
For further information please call 954-495-9867 or 520-405-1688. You also may fill out our Registration form which, upon submission, will automatically be sent to us. That form can be found at https://fs20.formsite.com/ngarfield/form271773666/index.html?1452614114632. By filling out this form you will be allowing us to see your current status. If you call or email us at neilfgarfield@hotmail.com your question or request for service can then be answered more easily.
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

—————-
see http://thjf.org/2012/12/12/mortgage-backed-trusts-using-mortgage-assignments-from-docx-llc/
Article by Lynn Symoniak

On November 20, 2012, Lorraine O’Reilly Brown, the former president of mortgage-document mill, DocX, LLC, a subsidiary of Lender Processing Services, pleaded guilty in federal court in Jacksonville, Florida to conspiracy to commit mail fraud and wire fraud.  DocX produced over one million mortgage assignments.  These assignments were used in foreclosures across the country. Brown admitted that she knew that these assignments were being prepared to use in foreclosures.

In tens of thousands of cases, these fraudulent documents were used by mortgage-backed trusts to show that the trust acquired a mortgage.  The information on these assignments was false – the trusts did not acquire the mortgages on the date set forth on these DocX Assignments.

Signatures were forged, notarizations were wrongly added to create an appearance of authenticity.  Job titles were falsely claimed.

Which trusts used these phony DocX-prepared mortgage assignments?  The trusts that used these Mortgage Assignments to foreclose include those listed below, with the name of the trustee following the name of the trust.

ABFC TRUSTS & TRUSTEES

ABFC 2004-OPT4 (Wells Fargo Bank)

ABFC 2005-OPT1 (Wells Fargo Bank)

ABFC 2005-HE1 (Wells Fargo Bank)

ABFC 2006-HE1 (U.S. Bank)

ABFC 2006-OPT1 (Wells Fargo Bank)

ABFC 2006-OPT2 (Wells Fargo Bank)

ABFC 2006-OPT3 (Wells Fargo Bank)

 

ACE SECURITIES CORP. HOME EQUITY LOAN TRUST & TRUSTEES

Ace Securities Corp. Home Equity Loan Trust Series 2004-OP1 (HSBC Bank)

Ace Securities Corp. Home Equity Loan Trust Series 2006-NC1 (HSBC Bank)

Ace Securities Corp. Home Equity Loan Trust Series 2006-OP1 (HSBC Bank)

Ace Securities Corp. Home Equity Loan Trust Series 2006-OP2 (HSBC Bank)

Ace Securities Corp. Home Equity Loan Trust Series 2007-HE5 (HSBC Bank)

 

AMERICAN HOME MORTGAGE ASSETS TRUSTS & TRUSTEES

AHM Assets Trust, 2005-1 (Deutsche Bank)

AHM Assets Trust, 2005-2 (Deutsche Bank)

AHM Assets Trust, 2006-1 (Deutsche Bank)

AHM Assets Trust, 2006-2 (Deutsche Bank)

AHM Assets Trust, 2006-3 (Citibank Bank)

AHM Assets Trust, 2006-4 (Citibank Bank)

AHM Assets Trust, 2006-5 (Deutsche Bank)

AHM Assets Trust, 2006-6 (Deutsche Bank)

AHM Assets Trust, 2007-1 (Deutsche Bank)

AHM Assets Trust, 2007-2 (Deutsche Bank)

AHM Assets Trust, 2007-3 (Deutsche Bank)

AHM Assets Trust, 2007-4 (Deutsche Bank)

AHM Assets Trust, 2007-5 (Deutsche Bank)

AHM Assets Trust, 2007-6 (Deutsche Bank)

 

AMERICAN HOME MORTGAGE INVESTMENT TRUSTS & TRUSTEES

AHM Investment Trust, 2004-2 (Wells Fargo Bank)

AHM Investment Trust, 2004-3 (Citibank)

AHM Investment Trust, 2004-4 (Bank of NY)

AHM Investment Trust, 2005-1 (Deutsche Bank)

AHM Investment Trust, 2005-2 (Deutsche Bank)

AHM Investment Trust, 2005-3 (Deutsche Bank)

AHM Investment Trust, 2005-4 (U.S. Bank)

AHM Investment Trust, 2006-1 (Deutsche Bank)

AHM Investment Trust, 2006-2 (Deutsche Bank)

AHM Investment Trust, 2006-3 (Deutsche Bank)

AHM Investment Trust, 2007-1 (Deutsche Bank)

AHM Investment Trust, 2007-2 (Deutsche Bank)

AHM Investment Trust, 2007-SD1 (Deutsche Bank)

 

AMERIQUEST MORTGAGE SECURITIES TRUSTS & TRUSTEES

Ameriquest Mortgage Securities Trust 2003-5 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2003-8 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2003-AR1 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2004-R3 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2004-R7 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2004-R9 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R1 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R2 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R3 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R4 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R5 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R6 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R7 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R8 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R9 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R10 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2005-R11 (Deutsche Bank)

Ameriquest Mortgage Securities Trust ARSI 2006-M3 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2006-R1 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2006-R2 (Deutsche Bank)

Ameriquest Mortgage Securities Trust 2006-R7 (Deutsche Bank)

 

ARGENT SECURITIES INC. TRUSTS & TRUSTEES

Argent Securities, Inc. 2003-W3 (Deutsche Bank)

Argent Securities, Inc. 2003-W6 (Deutsche Bank)

Argent Securities, Inc. 2004-W10 (Deutsche Bank)

Argent Securities, Inc. 2004-W11 (Deutsche Bank)

Argent Securities, Inc. 2005-W1 (Deutsche Bank)

Argent Securities, Inc. 2005-W2 (Deutsche Bank)

Argent Securities, Inc. 2005-W3 (Deutsche Bank)

Argent Securities, Inc. 2005-W4 (Deutsche Bank)

Argent Securities, Inc. 2005-W5 (Deutsche Bank)

Argent Securities, Inc. 2006-M1 (Deutsche Bank)

Argent Securities, Inc. 2006-M2 (Deutsche Bank)

Argent Securities, Inc. 2006-W1 (Deutsche Bank)

Argent Securities, Inc. 2006-W2 (Deutsche Bank)

Argent Securities, Inc. 2006-W3 (Deutsche Bank)

Argent Securities, Inc. 2006-W4 (Deutsche Bank)

Argent Securities, Inc. 2006-W5 (Deutsche Bank)

 

ASSET-BACKED SECURITIES CORP. TRUSTS & TRUSTEES

AB Securities Corp. Home Equity Loan Trust, Series 2003-HE6 (Wells Fargo Bank)

AB Securities Corp. Home Equity Loan Trust, Series 2004-HE3 (Wells Fargo Bank)

AB Securities Corp. Home Equity Loan Trust, Series 2005-HE5 (U.S. Bank)

AB Securities Corp. Home Equity Loan Trust, Series OOMC 2005-HE6 (Wells Fargo Bank)

AB Securities Corp. Home Equity Loan Trust, Series OOMC 2006-HE3 (U.S. Bank)

AB Securities Corp. Home Equity Loan Trust, Series OOMC 2006-HE5 (U.S. Bank)

 

BANC OF AMERICA FUNDING CORP. TRUSTS & TRUSTEES

Banc of America Funding Corp. Mort. PT Certs., 2008-1 (U.S. Bank)

 

BEAR STEARNS AB SECURITIES I TRUSTS & TRUSTEES

Bear Stearns AB Securities I Trust 2006-AC3 (U.S. Bank)

 

CARRINGTON MORTGAGE LOAN TRUSTS & TRUSTEES

Carrington Mortgage Loan Trust, Series 2005-OPT2 (Deutsche Bank)

Carrington Mortgage Loan Trust, Series 2006-OPT1 (Wells Fargo Bank)

 

CITIGROUP MORTGAGE LOAN TRUSTS & TRUSTEES

Citigroup Mortgage Loan Trust, Series 2004-OPT1 (Wells Fargo)

Citigroup Mortgage Loan Trust, Series 2005-OPT3 (Deutsche Bank)

Citigroup Mortgage Loan Trust, Series 2005-OPT4 (Wells Fargo Bank)

Citigroup Mortgage Loan Trust, Series 2006-AMC1 (Deutsche Bank)

Citigroup Mortgage Loan Trust, Series 2006-HE2 (U.S. Bank)

Citigroup Mortgage Loan Trust, Series 2007-SHL1 (HSBC Bank)

 

DEUTSCHE ALT-A SECURITIES MORT. LOAN TRUSTS & TRUSTEES

Deutsche Alt-A Securities Mort. Loan Trust, 2006-AR6 (HSBC Bank)

Deutsche Alt-A Securities Mort. Loan Trust, 2007-1(HSBC Bank)

 

DEUTSCHE ALT-B SECURITIES MORT. LOAN TRUSTS & TRUSTEES

Deutsche Alt-B Securities Mort. Loan Trust, 2006-AB2 (HSBC Bank)

Deutsche Alt-B Securities Mort. Loan Trust, 2006-AB3 (HSBC Bank)

Deutsche Alt-B Securities Mort. Loan Trust, 2006-AB4 (HSBC Bank)

Deutsche Alt-B Securities Mort. Loan Trust, 2007-AB1 (HSBC Bank)

 

GSAA HOME EQUITY TRUST & TRUSTEES

GSAA Home Equity Trust 2006-6 (U.S. Bank)

GSAA Home Equity Trust 2006-9 (U.S. Bank)

GSAA Home Equity Trust 2006-10 (Deutsche Bank)

GSAA Home Equity Trust 2006-11 (Deutsche Bank)

 

GSAMP TRUSTS & TRUSTEES

GSAMP 2004-OPT (Deutsche Bank)

 

GSR NORTGAGE LOAN TRUSTS & TRUSTEES

GSR Mortgage Loan Trust 2006-AR1 (U.S. Bank)

GSR Mortgage Loan Trust 2006-OA1 (Deutsche Bank)

 

HARBORVIEW MORTGAGE LOAN TRUSTS & TRUSTEES

Harborview Mortgage Loan Trust 2006-7 (Deutsche Bank)

Harborview Mortgage Loan Trust 2006-14 (Deutsche Bank)

Harborview Mortgage Loan Trust 2007-2 (Deutsche Bank)

Harborview Mortgage Loan Trust 2007-5 (Deutsche Bank)

 

HSI ASSET SECURITIZATION CORP. “OPT” TRUSTS AND TRUSTEES

HSI Asset Securitization Corp., 2005-OPT1 (Deutsche Bank)

HSI Asset Securitization Corp., 2006-OPT1 (Deutsche Bank)

HSI Asset Securitization Corp., 2006-OPT2 (Deutsche Bank)

HSI Asset Securitization Corp., 2006-OPT3 (Deutsche Bank)

HSI Asset Securitization Corp., 2006-OPT4 (Deutsche Bank)

HSI Asset Securitization Corp., 2007-HE1 (Deutsche Bank)

HSI Asset Securitization Corp., 2007-OPT1 (Deutsche Bank)

HSI Asset Loan Obligation Trust, 2007-AR1 (Deutsche Bank)

 

IXIS TRUSTS & TRUSTEES

IXIS Real Estate Capital Trust 2006-HE1 (Deutsche Bank)

 

JP MORGAN ACQUISITION CORP. TRUSTS & TRUSTEES

JP Morgan Acquisition Corp. 2005-OPT1 (U.S. Bank)

JP Morgan Acquisition Corp. 2005-OPT2 (U.S. Bank)

 

LUMINENT MORTGAGE TRUSTS & TRUSTEES

Luminent Mortgage Trust 2006-7 (HSBC Bank)

 

MASTR ADJUSTABLE RATE MORTGAGES TRUSTS & TRUSTEES

MASTR Adjustable Rate Mortgages Trust 2006-OA1 (U.S. Bank)

MASTR Adjustable Rate Mortgages Trust 2007-1 (U.S. Bank)

 

MASTR ALTERNATIVE LOAN TRUSTS & TRUSTEES

MASTR Alternative Loan Trust 2006-2 (Bank of New York)

 

MASTR ASSET-BACKED SECURITIES TRUSTS & TRUSTEES

MASTR Asset-Backed Securities Trust 2003-OPT2 (Wells Fargo)

MASTR Asset-Backed Securities Trust 2004-OPT2 (Wells Fargo)

MASTR Asset-Backed Securities Trust 2005-OPT1 (Wells Fargo)

 

MERRILL LYNCH MORT. INVESTORS TRUSTS & TRUSTEES

Merrill Lynch Mort. Investors Trust, 2004-OPT1 (Wells Fargo Bank)

Merrill Lynch Mort. Investors Trust, 2006-OPT1 (U.S. Bank)

 

MORGAN STANLEY ABS CAPITAL I, INC. TRUSTS & TRUSTEES

Morgan Stanley ABC Capital I, Inc. Trust 2004-OP1 (Deutsche Bank)

Morgan Stanley ABC Capital I, Inc. Trust 2005-HE1 (Deutsche Bank)

Morgan Stanley ABC Capital I, Inc. Trust 2005-HE2 (Deutsche Bank)

Morgan Stanley ABC Capital I, Inc. Trust 2007-NC3 (Deutsche Bank)

 

NOMURA HOME EQUITY TRUSTS & TRUSTEES

Nomura Home Equity Loan 2005-HE1 (HSBC Bank)

 

NOVASTAR MORTGAGE FUNDING TRUSTS & TRUSTEES

Novastar Mortgage Funding Trust 2007-2 (Deutsche Bank)

 

OPTION ONE MORTGAGE LOAN TRUSTS AND TRUSTEES

Option One Mortgage Loan Trust, 2003-1 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2003-2 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2003-3 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2003-4 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2004-1 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2004-2 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2004-3 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2005-1 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2005-2 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2005-3 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2005-4 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2006-1 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2006-2 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2006-3 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-1 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-2 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-3 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-4 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-5 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-6 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-CP1 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-FXD1 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-FXD2 (Wells Fargo Bank)

Option One Mortgage Loan Trust, 2007-HL1 (HSBC Bank)

 

QUEST TRUSTS & TRUSTEES

Quest Trust 2006-X1 (Deutsche Bank)

 

SAXON ASSET TRUSTS & TRUSTEES

Saxon Asset Securities Trust 2005-2 (Deutsche Bank Americas)

 

SECURITIZED ASSET-BACKED RECEIVABLES, LLC TRUSTS AND TRUSTEES

Securitized AB Receivables, LLC 2004-OP1 (Wells Fargo)

Securitized AB Receivables, LLC 2004-OP2 (Wells Fargo)

Securitized AB Receivables, LLC 2005-OP2 (Wells Fargo)

Securitized AB Receivables, LLC 2006-OP1 (Wells Fargo)

 

SECURITIZED ASSET INVESTMENT LOAN TRUSTS & TRUSTEES

Securitized Asset Investment Loan Trust 2004-4

 

SG MORTGAGE SECURITIES TRUSTS & TRUSTEES

SG Mortgage Securities Trust 2005-OPT1 (HSBC Bank)

SG Mortgage Securities Trust 2005-OPT2 (HSBC Bank)

SG Mortgage Securities Trust 2006-OPT2 (HSBC Bank)

 

SOUNDVIEW HOME LOAN “OPT” TRUSTS AND TRUSTEES

Soundview Home Loan Trust, 2005-OPT1 (Deutsche Bank)

Soundview Home Loan Trust, 2005-OPT2 (Deutsche Bank)

Soundview Home Loan Trust, 2005-OPT3 (Deutsche Bank)

Soundview Home Loan Trust, 2005-OPT4 (Deutsche Bank)

Soundview Home Loan Trust, 2006-OPT1 (Deutsche Bank)

Soundview Home Loan Trust, 2006-OPT2 (Deutsche Bank)

Soundview Home Loan Trust, 2006-OPT3 (Deutsche Bank)

Soundview Home Loan Trust, 2006-OPT4 (Deutsche Bank)

Soundview Home Loan Trust, 2006-OPT5 (Deutsche Bank)

Soundview Home Loan Trust, 2007-OPT1 (Wells Fargo Bank)

Soundview Home Loan Trust, 2007-OPT2 (Wells Fargo Bank)

Soundview Home Loan Trust, 2007-OPT3 (Wells Fargo Bank)

Soundview Home Loan Trust, 2007-OPT4 (Wells Fargo Bank)

Soundview Home Loan Trust, 2007-OPT5 (Wells Fargo Bank)

 

STRUCTURED ASSET INVESTMENT LOAN TRUSTS & TRUSTEES

Structured Asset Investment Loan Trust 2003-BC9 (Bank of America)

Structured Asset Investment Loan Trust 2004-11 (Bank of America)

Structured Asset Investment Loan Trust 2005-3 (U.S. Bank)

 

STRUCTURED ASSET MORTGAGE INVESTMENTS II , INC. TRUSTS & TRUSTEES

Structured Asset Mort. Investments II, Inc. 2006-AR5 (JP Morgan Chase)

 

STRUCTURED ASSET SECURITIES CORP. TRUSTS & TRUSTEES

Structured Asset Securities Corp. 2003-BC10 (U.S. Bank)

Structured Asset Securities Corp. 2003-BC11 (U.S. Bank)

Structured Asset Securities Corp. 2004-3 (U.S. Bank)

Structured Asset Securities Corp. 2005-OPT1 (U.S. Bank)

Structured Asset Securities Corp. 2005-SC1 (U.S. Bank)

Structured Asset Securities Corp. 2006-BC2 (U.S. Bank)

Structured Asset Securities Corp. 2006-BC6 (U.S. Bank)

Structured Asset Securities Corp. 2006-OPT1 (Wells Fargo Bank)

 

Monday Livinglies Magazine: Crime and Punishment

Steal this Massachusetts Town’s Toughest New Foreclosure Prevention Ideas
http://www.keystonepolitics.com/2013/06/steal-this-massachusetts-towns-toughest-new-foreclosure-prevention-ideas/

Florida leads nation in vacated foreclosures — and it’s not even close http://www.thefloridacurrent.com/article.cfm?id=33330748

Editor’s Note:  it is only common sense. There are several things that are known with complete certainty in connection with the mortgage mess.

  • We know that the banks found it necessary to forge, fabricate and alter legal documents illegally in order to create the illusion that foreclosure was proper.
  • We know that the banks manipulated the published rates on which adjustable mortgages changed their payments.
  • We know that the banks typically abandon any property that the bank has deemed to be undesirable (then why did they foreclose, when they had a perfectly good homeowner who was willing to pay something including the maintenance and insurance of the house?).
  • And we can conclude that it is far more important to the banks that they be able to foreclose and have the deed issued then to actually take possession of the property for sale or rental.
  • And so we know that the mortgage and foreclosure markets have been turned on their heads. Lynn, Massachusetts has adopted a series of regulations which appeared to be constitutional and which make it very difficult for the banks to turn neighborhoods that were thriving into blight.  The actions of this city and others who are taking similar actions will continue to reveal the true nature of the mortgage encumbrances (the lanes were never perfected because the loan was never made by the party that is claiming to be secured) and the true nature of foreclosures (the cover-up to a Ponzi scheme and an illegal securities scam that does not and never did fall within the exemptions of the 1998 law claimed by the banks).

The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over
http://www.zerohedge.com/news/2013-06-23/bank-international-settlements-warns-monetary-kool-aid-party-over

Wells Fargo Sells Woman’s House In Foreclosure After She Reinstates Loan for $141,441.81
http://4closurefraud.org/2013/06/20/wells-fargo-sells-womans-house-in-foreclosure-after-she-reinstates-loan-for-141441-81/

Editor’s Note: In all of these cases you need to start with the premise that the bank has a gargantuan liability in the event that it took insurance, credit default swap proceeds, federal bailouts, or the proceeds of sales of mortgage bonds to the Federal Reserve. Most experts in finance and economics agree that if the Federal Reserve stops making payments on the “purchase” of mortgage bonds the entire housing market will collapse. I don’t agree.

It is the banks that will collapse in the housing market will finally recover bringing the economy back up with it. The problem for the Federal Reserve and the economy is that most likely they are buying worthless paper issued by a trust that was never funded and that therefore could never have purchased any loan. Thus the income and the collateral of the mortgage bond is nonexistent.

Many people in the financial world completely understand this and are terrified at the prospect of the largest banks being required to mark down their reserve capital;  if this happens, and it should, these banks will lack the capital to continue functioning as a mega-bank.

So why would a bank foreclose on house on which there was no mortgage and/or no default? The answer lies in the fact that they have accepted money from third parties on the premise that they lost money on these mortgages. If that turns out not to be true (which it isn’t) then they most probably owe a lot of money back to those third parties.

My estimate is that in the average case they owe anywhere from 7 to 40 times the amount of the mortgage loan.  It is simply cheaper to settle with the aggrieved homeowner even if they pay damages for emotional distress (which is permitted in California and perhaps some other states); it is even cheaper and far more effective for the bank to give the house back without any encumbrance to the homeowner. Without the foreclosure becoming final or worse yet, as the recent revelations from Bank of America clearly show, if the loan is modified and becomes a performing loan all of that money is due back to all of those third parties.

“Deed-In-Lieu” of Foreclosure and Other Things
http://www.fxstreet.com/education/related-markets/lessons-from-the-pros-real-estate/2013/06/20/

Editor’s Note: This has come up many times in  questions and discussions regarding dealing with the Wall Street banks. It seems that the banks have borrowers thinking that in order to file a deed in lieu of foreclosure they need the permission of the bank. I know of no such provision in the law of any state preventing the owner of the property from deeding the property to anyone.  Several lawyers are seeing an opportunity, to wit: once the homeowner deeds the properties to the party pretending to foreclose on the property, the foreclosure action against the homeowner must be dismissed. That leaves the question of a deficiency judgment.

The advantages to the homeowner appears to be that any lawsuit seeking to recover a deficiency judgment would be strictly about money and would require the allegation of a monetary loss and proof of the monetary loss which would enable the homeowner, for the first time, to pursue discovery on the money trail because there is no other issue in dispute.

In the course of that litigation the discovery may reveal the fact that the party who filed the foreclosure and misrepresented their right to the collateral would be subject to various causes of action for damages as a counterclaim; but the counterclaim would not be filed until after discovery revealed the problem for the “lender.” Therefore several lawyers are advising their clients to simply file the deed in favor of the party seeking foreclosure based upon the representation that they are in fact the right party to obtain a sale of the property.

The lawyers who are using this tactic obviously caution their clients against using it unless they are already out of the house or are planning to move. Homeowners who are looking to employ this tactic should check with a licensed attorney in the jurisdiction in which their property is located.

Must See Video: Arizona Homeowners Losing their Homes to Foreclosure Through Forged Documents
http://4closurefraud.org/2013/06/21/must-see-video-arizona-homeowners-losing-their-homes-to-foreclosure-through-forged-documents/

Monitor Finds Mortgage Lenders Still Falling Short of Settlement’s Terms

By SHAILA DEWAN

The biggest mortgage lenders in the United States have not met all of the terms of the $25 billion settlement over abuses, an independent monitor found.

British Commission Calls for New Laws to Prosecute Bankers for Fraud

By MARK SCOTT

As part of a 600-page report, the British parliamentary commission on banking standards is urging new laws that would make it a criminal offense to recklessly mismanage local financial institutions.

A Fit of Pique on Wall Street

By PETER EAVIS

Perhaps more than at any time since the financial crisis, Wall Street knows it must prepare for a world without the Federal Reserve’s largess.

S.E.C. Has a Message for Firms Not Used to Admitting Guilt

By JAMES B. STEWART

By requiring an admission of guilt in some cases, the S.E.C.’s new chairwoman is pressing for more accountability at financial firms.

Bank of America’s Foreclosure Frenzy
http://ml-implode.com/staticnews/2013-06-24_BankofAmericasForeclosureFrenzy.html

Fake Notaries: The Weak Link of Each State

If you are seeking legal representation or other services call our Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.
The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Note: All across the country we are discovering that robo-signing and forgery of notarizations have enabled the pretender lenders to assure the court that they own the debt, note and mortgage or deed of trust. Complaints to the state agencies regulating notaries have resulted in a net loss to borrowers. In Arizona, several notaries were suspended or had their licenses revoked only to have them reinstated a short time later. Lending your notary stamp or stealing a notary stamp without the consent of the notary are both subject to administrative and criminal prosecution.

The reason why the notarizations are going nowhere is, I think, purely political. But there is a misconception about finding a fake notarization without finding that the signature that was notarized was also without authorization or was also forged.

The failure to get a proper notarization (like where the signatory signed in Florida and the notary was in Texas), does NOT invalidate the document itself. In most states where I have read the law it only effects the ability to record the document. So if you know about the document and it wasn’t properly notarized so it couldn’t be recorded, you can still be held to have notice of it and it may well be binding on your client even if it was forged. without more, the attack on the notary seems like a technicality to get out of a legitimate debt.

It is at best an add-on to other claims in which you pray the court will enter an order that removes the nullifies the recording of the offending document from the public records. That won’t get you very far since you obviously have notice of the document’s existence. So you need to attack the document itself and even there, Judges are very reluctant to enter orders granting relief where the borrower has essentially admitted the debt, note, mortgage and the default. How would you like it if you loaned money to someone for real and then were prevented from collection because of some minor technicality? It’s a windfall for the borrower.

This is why I encourage people to start with the money trail instead of the documentary trail. The documentary trail tells a story ABOUT a transaction which is presumed to be true especially if your client’s signature is on it. But the money trail reveals what SHOULD be on the documentary trail and it is by reference to transactions that were real, where money exchanged hands, that you can say that the documents upon which the other side places reliance are wrong.

Tactically the pretenders lenders are relying on the documentary trail. Don’t go there. It’s a trap. Go for the real transactions in which money is supposed to have changed hands. Then you can ask in discovery two alternative lines of questioning: explain why the documentary trail does not reflect the actual money trial and where are the receipts and disbursements (cancelled checks and wire transfer receipts) to support your documentary trail?

The last items that closes the book on them is to show that there was no privity or authorization for them to take the consideration from an independent third party transaction and apply it to their documents.

I can’t take my neighbor’s auto loan and say that proves he owes me money. I have to actually loan him the money and if his documents say that he borrowed money from a finance company, then THEY have to show the same thing I do — that they really loaned the money or really bought the loan with cash. If neither of us can prove we paid anything then the fact that he got money as a coincidence with our paperwork is not going to help either the finance company or me. It must be presumed that the money came from someone else, resulting in voiding the purported transactions and allowing for whoever actually parted with money to come forward and stake his claim.

So fake notarizations are indeed a bad thing and that should be cause for concern in the property records of each county where title is supposed to be recorded. But wasting your time on that attack is not likely to produce much in the way of results in the form of real relief for your client.

Forgery! Now You’ve Got Them, Or Do You?

CHECK OUT OUR EXTENDED DECEMBER SPECIAL!

What’s the Next Step? Consult with Neil Garfield

For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, Tennessee, Georgia, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Analysis: First of all hats off to April Charney, www.nakedcapitalism.com and Yves Smith for the article on Forgery (see link below) James M. Kelley as a forensic document examiner — outstanding work!

This is one of the places where the rubber meets the road, but before you start celebrating take a deep breath: proof of forgery will NOT necessarily stop delay or alter the foreclosure. That is why I start with questioning the monetary transactions before I introduce the document deficiencies, fabrications and forgeries.

You have to put yourself in the Judge’s seat (or more properly, bench). A simple example will suffice to make my point. Suppose I loaned you $100 and you didn’t pay it back the way we agreed. Later I sue you and produce a promissory note you know you never signed but it looks like your signature, but you’ve admitted you owe the $100 and you admit you defaulted. Under those circumstances your evidence of forgery might be excluded from evidence –— because it is already established you owe the money and defaulted. In fact it should be excluded because it is no longer relevant to the proceedings. The debt is not the not — and vica versa.

The note is only evidence of the debt and taking that out of the equation still leaves the admissions, presumptions and witnesses by which the authenticity of the debt and default have already been taken as agreed and irrefutable. Some people look askance as Judges who apply the rules of evidence and accuse them of stupidity or dishonesty. But the truth is the forged fabricated note is at most corroborative evidence of something that is no longer a material issue of fact in dispute. The Judge has little choice but to rule in favor of the forecloser at that point. Hence, we keep pounding on DENY AND DISCOVER.

If you are filing the lawsuit you should, along with the initial summons and and complaint, file whatever discovery requests you have at the same time which all amount to “who are you, what are you doing here, why are you seeking collection of this debt, and by what authority.

Admitting the debt, note, mortgage etc can be either direct (“I admit that”) or indirect/tacit (“I understand what you are saying Judge but there is ample evidence of skullduggery here”). In most cases, either one is enough, especially with a Judge who is already assuming that the bank wouldn’t be there if there was no debt, note and mortgage and the presence of a default.

The borrower, who knows they did get money on loan, knows they did sign papers and knows they didn’t pay, naturally assumes that it is pointless to deny the basic elements of the foreclosure — the debt between the borrower and the forecloser, the note, which is evidence of the debt, and the mortgage, assignments and other instruments used by the banks to get you pointed in the wrong direction. AND THAT is where the defense goes off the deep end every time there is a “bad” decision.

The Judge is going to be looking for admissions by the borrower (not the forecloser) because of a very natural presumption that at one time was a perfectly reasonable assumption — that the bank would not waste time and money enforcing a debt that didn’t exist and a note that was never valid, nor a mortgage that was never perfected.

And the Judge is going to see any avoidance of enforcement on the basis of paperwork as a tacit admission that the debt is real, the default is real, and the note and mortgage were properly executed under proper circumstances —- because that is what banks do! Maybe it isn’t “fair” but it is perfectly understandable why we encountered a mindset that treated borrowers as lunatics when they first came up with the notion that the paperwork was missing, lost, fabricated, forged, robo-signed etc.

The study by Katherine Ann Porter, the San Francisco study and the studies in Massachusetts and Maryland and Massachusetts all point to a credit bid being submitted at foreclosure auction by a party who wasn’t a creditor at all. The San Francisco study said 65% of the credit bidders were strangers to the transaction and strange is the word to use in court. Did it change anything? No!

So where does that leave you? In order to be able to show the relevance of the forgery or fabrication you must attack the debt itself. Where would I be if I sued you on the $100 loan, produced a fabricated, forged note and you DIDN’T admit the debt or the default. The burden falls back on me to prove I gave you the $100.

What if I didn’t give you the $100 but I know someone else did. That doesn’t give me standing to sue you because I am not injured party. Can any of you state with certainty that the loan money you received came from the originator disclosed on the TILA, settlement and closing documents? Probably not because the ONLY way you would know that is if you had seen the actual wire transfer receipt and the wire transfer instructions.

Thus if you don’t know that to be true — that the originator in your mortgage loan was funded by the originator and was not a table-funded loan (which accounts for about 95%-96% of all loans during the mortgage meltdown), why would you admit it, tacitly, directly or any other way?

As a defense posture the first rule is to deny that which you know is untrue and to deny based upon lack of information or deny based upon facts and theory that are contrary to the assertions of the forecloser. Deny the debt. THAT automatically means the note can’t be evidence of anything real, because the note refers to a loan between the originator and the borrower where the borrower unknowingly received the money from a third or fourth party (table funded loan, branded “predatory” by TILA and reg Z).

Your defense is simply “we don’t know these people and we don’t know the debt they are claiming. We were induced to sign papers that withheld vital information about the party with whom I was doing business and left me with corrupt title. The transaction referred to in the note, mortgage, assignments, allonges etc. was never completed. The fact that we received a loan from someone else does not empower this forecloser to enforce the debt of a third party with whom they have had no contact or privity.”

THEN HAMMER THEM WITH THE FORGERY BUT USE SOMEONE AS GOOD AS KELLEY TO DO IT. WATCH OUT FOR CHARLATANS WHO CAN CONVINCE YOU BUT NOT THE COURT. THUS THE DEFICIENT DOCUMENTS CORROBORATE YOUR MAIN DEFENSE RATHER THAN SERVE AS THE CORE OF IT.

Practice Pointer: At this point either opposing counsel or the Judge will ask some questions like who DID give the loan or what proof do you have. If you are at the stage of a motion to dismiss or motion for summary judgment, your answer should be, if you set up case correctly and you have outstanding discovery, that those are evidential questions that require production of witnesses, testimony, documents and cross examination. Since the present hearing is not a trial or evidential hearing and was not noticed as such you are unprepared to present the entire case.

The issues on a motion to dismiss are solely that of the pleadings. At a Motion for Summary Judgment, it is the pleadings plus an affidavit. Submit several affidavits and the Judge will have little choice but to deny the forecloser’s motion for summary judgment.

Attack their affidavit as not being on personal knowledge (voir dire) and if you are successful all that is left is YOUR motion for summary judgment and affidavits which leaves the Judge with little choice but to enter Summary Final Judgment in favor of the homeowner as to this forecloser.

http://www.nakedcapitalism.com/2013/02/expert-witnesses-starting-to-take-on-forgeries-in-foreclosures.html

OK LAWYERS, STEP UP TO THIS ONE — It is literally a no- brainer

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Editor’s Comment: The very same people who so ardently want us to remain strong and fight wars of dubious foundation are the ones who vote against those who serve our country. Here is a story of a guy who was being shot at and foreclosed at the same time — a blatant violation of Federal Law and good sense. When I practiced in Florida, it was standard procedure if we filed suit to state that the defendant is not a member of the armed forces of the United States. Why? Because we don’t sue people that are protecting our country with their life and limb.

It IS that simple, and if the banks are still doing this after having been caught several times, fined a number of times and sanctioned and number of times, then it is time to take the Bank’s charter away. Nothing could undermine the defense and sovereignty of our country more than to have soldiers on the battlefield worrying about their families being thrown out onto the street.

One woman’s story:

My husband was on active duty predeployment training orders from 29 May 2011 to 28 August 2011 and again 15 October 2011 to 22 November 2011. He was pulled off the actual deployment roster for the deployment date of 6 December 2011 due to the suspension of his security clearance because of the servicer reporting derogatory to his credit bureau (after stating they would make the correction). We spoke with the JAG and they stated those periods of service are protected as well as nine months after per the SCRA 50 USC section 533.

We have been advised that a foreclosure proceeding initiated within that 9 month period is not valid per the SCRA. I have informed the servicer via phone and they stated their legal department is saying they are permitted to foreclose. They sent a letter stating the same. I am currently working on an Emergency Ex Parte Application for TRO and Preliminary Injunction to file in federal court within the next week. It is a complicated process.

The servicer has never reported this VA loan in default and the VA has no information. That is in Violation of VA guidelines and title 38. They have additionally violated Ca Civil Code 2323.5. They NEVER sent a single written document prior to filing NOD 2/3/2012. They never made a phone call. They ignored all our previous calls and letter. All contact with the servicer has been initiated by us, never by them. This was a brokered deal. We dealt with Golden Empire Mortgage. They offered the CalHFA down payment assistance program in conjunction with their “loan” (and I use that term loosely). What we did not know was that on the backside of the deal they were fishing for an investor.

Over the past two years CalHFA has stated on numerous occasions they do not own the 1st trust deed. Guild (the servicer) says they do. I have a letter dated two weeks after closing of the loan saying the “servicing” was sold to CalHFA. Then a week later another letter stating the “servicing” was sold to Guild. Two conflicting letters saying two different things. The DOT and Note are filed with the county listing Golden Empire Mortgage as the Lender, North American Title as the Trustee and good old MERS as the Nominee beneficiary.

There is no endorsement or alonge anywhere in the filing of the county records. We signed documents 5/8/2008 and filings were made 5/13/2008. After two years of circles with Guild and CalHFA two RESPA requests were denied and I was constantly being told “the investor, the VA and our legal department” are reviewing the file to see how to apply the deferrment as allowed by California law and to compute taxes and impound we would need to pay during that period. Months of communications back in forth in 2009 and they never did a thing. Many calls to CalHFA with the same result. We don;t own it, call Guild, we only have interest in the silent 2nd.

All of a sudden in December 2011 an Assignment of DOT was filed by Guild from Golden Empire to CalHFA signed by Phona Kaninau, Asst Secretary MERS, filed 12/13/2011. om 2/3/2012 Guild filed a Cancellation of NOD from the filing they made in 2009 signed by Rhona Kaninau, Sr. VP of Guild. on the same date Guild filed a substitution of trustee naming Guild Admin Corp as the new trustee and Golden Empire as the old trustee, but on out DOT filed 5/13/2008 it lists North American Title as the Trustee. First off how can Rhona work for two different companies.

Essentially there is no fair dealing in any of this. Guild is acting on behalf of MERS, the servicing side of their company, and now as the trustee. How is that allowed? Doesn;t a trustee exist to ensure all parties interests are looked out for? It makes no sense to me how that can be happening. On the assignment I believe there is a HUGE flaw… it states ….assigns, and transfers to: CalHFA all beneficial interest…..executed by Joshua as Trustor, to Golden Empire as Trustee, and Recordeed….. how can you have two “to’s” .. shouldn’t after Trustor it say FROM???? Is that a fatal flaw???

And then looking at the Substitution it states “Whereas the undersigned present Beneficiary under said Deed of Trust” (which on the DOT at that time would show MERS but on the flawed assignment says Golden Empire was the trustee), it then goes on the say “Therefore the undersigned hereby substitutes GUILD ADMIN CORP” and it is signed “Guild Mortgage Company, as agent for CalHFA”, signed by Rhona Kaninau (same person who signed the assignment as a MERS Asst Secretary). I mean is this seriously legal??? Would a federal judge look at this and see how convoluted it all is?

I appreciate the offer of the securitization discount but in out current economic situation and having to pay $350 to file a federal case we just can’t afford it right now. I hope you will keep that offer open. Will this report cover tracking down a mortgage allegedly backed by CalHFA bonds? This is their claim.

Thank you so much for your assistance. This is overwhelming. Do you have any attorneys here in Southern California you world with I might be able to talk to about what they would charge us for a case like this?

Now They See the Light — 40% of Homes Underwater

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Editor’s Comment:

They were using figures like 12% or 18% but I kept saying that when you take all the figures together and just add them up, the number is much higher than that. So as it turns out, it is even higher than I thought because they are still not taking into consideration ALL the factors and expenses involved in selling a home, not the least of which is the vast discount one must endure from the intentionally inflated appraisals.

With this number of people whose homes are worth far less than the loans that were underwritten and supposedly approved using industry standards by “lenders” who weren’t lenders but who the FCPB now says will be treated as lenders, the biggest problem facing the marketplace is how are we going to keep these people in their homes — not how do we do a short-sale. And the seconcd biggest problem, which dovetails with Brown’s push for legislation to break up the large banks, is how can we permit these banks to maintain figures on the balance sheet that shows assets based upon completely unrealistic figures on homes where they do not even own the loan?

Or to put it another way. How crazy is this going to get before someone hits the reset the button and says OK from now on we are going to deal with truth, justice and the American way?

With no demographic challenges driving up prices or demand for new housing, and with no demand from homeowners seeking refinancing, why were there so many loans? The answer is easy if you look at the facts. Wall Street had come up with a way to get trillions of dollars in investment capital from the biggest managed funds in the world — the mortgage bond and all the derivatives and exotic baggage that went with it. 

So they put the money in Superfund accounts and funded loans taking care of that pesky paperwork later. They funded loans and approved loans from non-existent borrowers who had not even applied yet. As soon as the application was filled out, the wire transfer to the closing agent occurred (ever wonder why they were so reluctant to change closing agents for the convenience of the parties?).

The instructions were clear — get the signature on some paperwork even if it is faked, fraudulent, forged and completely outside industry standards but make it look right. I have this information from insiders who were directly involved in the structuring and handling of the money and the false securitization chain that was used to cover up illegal lending and the huge fees that were taken out of the superfund before any lending took place. THAT explains how these banks are bigger than ever while the world’s economies are shrinking.

The money came straight down from the investor pool that included ALL the investors over a period of time that were later broker up into groups and the  issued digital or paper certificates of mortgage bonds. So the money came from a trust-type account for the investors, making the investors the actual lenders and the investors collectively part of a huge partnership dwarfing the size of any “trust” or “REMIC”. At one point there was over $2 trillion in unallocated funds looking for a loan to be attached to the money. They couldn’t do it legally or practically.

The only way this could be accomplished is if the borrowers thought the deal was so cheap that they were giving the money away and that the value of their home had so increased in value that it was safe to use some of the equity for investment purposes of other expenses. So they invented more than 400 loans products successfully misrepresenting and obscuring the fact that the resets on loans went to monthly payments that exceeded the gross income of the household based upon a loan that was funded based upon a false and inflated appraisal that could not and did not sustain itself even for a period of weeks in many cases. The banks were supposedly too big to fail. The loans were realistically too big to succeed.

Now Wall Street is threatening to foreclose on anyone who walks from this deal. I say that anyone who doesn’t walk from that deal is putting their future at risk. So the big shadow inventory that will keep prices below home values and drive them still further into the abyss is from those private owners who will either walk away, do a short-sale or fight it out with the pretender lenders. When these people realize that there are ways to reacquire their property in foreclosure with cash bids that are valid while the credit bid of the pretender lender is invlaid, they will have achieved the only logical answer to the nation’s problems — principal correction and the benefit of the bargain they were promised, with the banks — not the taxpayers — taking the loss.

The easiest way to move these tremendous sums of money was to make it look like it was cheap and at the same time make certain that they had an arguable claim to enforce the debt when the fake payments turned into real payments. SO they created false and frauduelnt paperwork at closing stating that the payee on teh note was the lender and that the secured party was somehow invovled in the transaction when there was no transaction with the payee at all and the security instrumente was securing the faithful performance of a false document — the note. Meanwhile the investor lenders were left without any documentation with the borrowers leaving them with only common law claims that were unsecured. That is when the robosigning and forgery and fraudulent declarations with false attestations from notaries came into play. They had to make it look like there was a real deal, knowing that if everything “looked” in order most judges would let it pass and it worked.

Now we have (courtesy of the cloak of MERS and robosigning, forgery etc.) a completely corrupted and suspect chain of title on over 20 million homes half of which are underwater — meaning that unless the owner expects the market to rise substantially within a reasonable period of time, they will walk. And we all know how much effort the banks and realtors are putting into telling us that the market has bottomed out and is now headed up. It’s a lie. It’s a damned living lie.

One in Three Mortgage Holders Still Underwater

By John W. Schoen, Senior Producer

Got that sinking feeling? Amid signs that the U.S. housing market is finally rising from a long slumber, real estate Web site Zillow reports that homeowners are still under water.

Nearly 16 million homeowners owed more on their mortgages than their home was worth in the first quarter, or nearly one-third of U.S. homeowners with mortgages. That’s a $1.2 trillion hole in the collective home equity of American households.

Despite the temptation to just walk away and mail back the keys, nine of 10 underwater borrowers are making their mortgage and home loan payments on time. Only 10 percent are more than 90 days delinquent.

Still, “negative equity” will continue to weigh on the housing market – and the broader economy – because it sidelines so many potential home buyers. It also puts millions of owners at greater risk of losing their home if the economic recovery stalls, according to Zillow’s chief economist, Stan Humphries.

“If economic growth slows and unemployment rises, more homeowners will be unable to make timely mortgage payments, increasing delinquency rates and eventually foreclosures,” he said.

For now, the recent bottoming out in home prices seems to be stabilizing the impact of negative equity; the number of underwater homeowners held steady from the fourth quarter of last year and fell slightly from a year ago.

Real estate market conditions vary widely across the country, as does the depth of trouble homeowners find themselves in. Nearly 40 percent of homeowners with a mortgage owe between 1 and 20 percent more than their home is worth. But 15 percent – approximately 2.4 million – owe more than double their home’s market value.

Nevada homeowners have been hardest hit, where two-thirds of all homeowners with a mortgage are underwater. Arizona, with 52 percent, Georgia (46.8 percent), Florida (46.3 percent) and Michigan (41.7 percent) also have high percentages of homeowners with negative equity.

Turnabout is Fair Play:

The Depressing Rise of People Robbing Banks to Pay the Bills

Despite inflation decreasing their value, bank robberies are on the rise in the United States. According to the FBI, in the third quarter of 2010, banks reported 1,325 bank robberies, burglaries, or other larcenies, an increase of more than 200 crimes from the same quarter in 2009. America isn’t the easiest place to succeed financially these days, a predicament that’s finding more and more people doing desperate things to obtain money. Robbing banks is nothing new, of course; it’s been a popular crime for anyone looking to get quick cash practically since America began. But the face and nature of robbers is changing. These days, the once glamorous sheen of bank robberies is wearing away, exposing a far sadder and ugly reality: Today’s bank robbers are just trying to keep their heads above water.

Bonnie and Clyde, Pretty Boy Floyd, Baby Face Nelson—time was that bank robbers had cool names and widespread celebrity. Butch Cassidy and the Sundance Kid, Jesse James, and John Dillinger were even the subjects of big, fawning Hollywood films glorifying their thievery. But times have changed.

In Mississippi this week, a man walked into a bank and handed a teller a note demanding money, according to broadcast news reporter Brittany Weiss. The man got away with a paltry $1,600 before proceeding to run errands around town to pay his bills and write checks to people to whom he owed money. He was hanging out with his mom when police finally found him. Three weeks before the Mississippi fiasco, a woman named Gwendolyn Cunningham robbed a bank in Fresno and fled in her car. Minutes later, police spotted Cunningham’s car in front of downtown Fresno’s Pacific Gas and Electric Building. Inside, she was trying to pay her gas bill.

The list goes on: In October 2011, a Phoenix-area man stole $2,300 to pay bills and make his alimony payments. In early 2010, an elderly man on Social Security started robbing banks in an effort to avoid foreclosure on the house he and his wife had lived in for two decades. In January 2011, a 46-year-old Ohio woman robbed a bank to pay past-due bills. And in February of this year, a  Pennsylvania woman with no teeth confessed to robbing a bank to pay for dentures. “I’m very sorry for what I did and I know God is going to punish me for it,” she said at her arraignment. Yet perhaps none of this compares to the man who, in June 2011, robbed a bank of $1 just so he could be taken to prison and get medical care he couldn’t afford.

None of this is to say that a life of crime is admirable or courageous, and though there is no way to accurately quantify it, there are probably still many bank robbers who steal just because they like the thrill of money for nothing. But there’s quite a dichotomy between the bank robbers of early America, with their romantic escapades and exciting lifestyles, and the people following in their footsteps today: broke citizens with no jobs, no savings, no teeth, and few options.

The stealing rebel types we all came to love after reading the Robin Hood story are gone. Today the robbers are just trying to pay their gas bills. There will be no movies for them.

Foreclosure Strategists: Phx. Meet tonight: Make the record in your case

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Editor’s Comment:

Contact: Darrell Blomberg  Darrell@ForeclosureStrategists.com  602-686-7355

Meeting: Tuesday, May 15th, 2012, 7pm to 9pm

Make the Record

It appears the most rulings against homeowners are predicated on some arcane and minute failure of the homeowner to make the record.  We’ll be discussing how to make sure you cover all of those points by Making the Record as your case moves along.  We’ll also look at how the process of Making the Record starts long before you even think of going to court

We meet every week!

Every Tuesday: 7:00pm to 9:00pm. Come early for dinner and socialization. (Food service is also available during meeting.)
Macayo’s Restaurant, 602-264-6141, 4001 N Central Ave, Phoenix, AZ 85012. (east side of Central Ave just south of Indian School Rd.)
COST: $10… and whatever you want to spend on yourself for dinner, helpings are generous so bring an appetite.
Please Bring a Guest!
(NOTE: There is a $2.49 charge for the Happy Hour Buffet unless you at least order a soft drink.)

FACEBOOK PAGE FOR “FORECLOSURE STRATEGIST”

I have set up a Facebook page. (I can’t believe it but it is necessary.) The page can be viewed at www.Facebook.com, look for and “friend” “Foreclosure Strategist.”

I’ll do my best to keep it updated with all of our events.

Please get the word out and send your friends and other homeowners the link.

MEETUP PAGE FOR FORECLOSURE STRATEGISTS:

I have set up a MeetUp page. The page can be viewed at www.MeetUp.com/ForeclosureStrategists. Please get the word out and send your friends and other homeowners the link.

May your opportunities be bountiful and your possibilities unlimited.

“Emissary of Observation”

Darrell Blomberg

602-686-7355

Darrell@ForeclosureStrategists.com

CFPB Issues Bulletin Removing the Corporate Veils

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Editor’s Comment:

In a recent bulletin, the Consumer Financial Protection Board issued a bulletin that obliterated the “layering” of corporate veils to pierce through and allow homeowner borrowers to press their claims for wrongful foreclosure, slander of title, fraud and other claims against EVERYONE that is a “service provider” within the broad definition contained in the  Dodd-Frank Act. It makes everyone liable. Hat Tip to Darrell Blomberg. Instead of projecting dozens of hours as to discovery, depositions, and other forms of investigation, the CFPB has essentially created a presumption by an administrative finding. This finding, being merely a codification of existing law and doctrine is in my opinion completely retroactive.

The mere fact that a supervised bank or nonbank enters into a business relationship with a service provider does not absolve the supervised bank or nonbank of responsibility for complying with Federal consumer financial law to avoid consumer harm. A service provider that is unfamiliar with the legal requirements applicable to the products or services being offered, or that does not make efforts to implement those requirements carefully and effectively, or that exhibits weak internal controls, can harm consumers and create potential liabilities for both the service provider and the entity with which it has a business relationship. Depending on the circumstances, legal responsibility may lie with the supervised bank or nonbank as well as with the supervised service provider.

B.    The CFPB’s Supervisory Authority Over Service Providers

Title X authorizes the CFPB to examine and obtain reports from supervised banks and nonbanks for compliance with Federal consumer financial law and for other related purposes and also to exercise its enforcement authority when violations of the law are identified. Title X also grants the CFPB supervisory and enforcement authority over supervised service providers, which includes the authority to examine the operations of service providers on site.1 The CFPB will exercise the full extent of its supervision authority over supervised service providers, including its authority to examine for compliance with Title X’s prohibition on unfair, deceptive, or abusive acts or practices. The CFPB will also exercise its enforcement authority against supervised service providers as appropriate.2

C.    The CFPB’s Expectations

The CFPB expects supervised banks and nonbanks to have an effective process for managing the risks of service provider relationships. The CFPB will apply these expectations consistently, regardless of whether it is a supervised bank or nonbank that has the relationship with a service provider.

To limit the potential for statutory or regulatory violations and related consumer harm, supervised banks and nonbanks should take steps to ensure that their business arrangements with service providers do not present unwarranted risks to consumers. These steps should include, but are not limited to:

    Conducting thorough due diligence to verify that the service provider understands and is capable of complying with Federal consumer financial law;

See full article 2012-03 at http://www.consumerfinance.gov/guidance/

The Reporter Who Saw it Coming

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Editor’s Comment:

By Dean Starkman

Mike Hudson thought he was merely exposing injustice, but he also was unearthing the roots of a global financial meltdown.

Mike Hudson began reporting on the subprime mortgage business in the early 1990s when it was still a marginal, if ethically challenged, business. His work on the “poverty industry” (pawnshops, rent-to-own operators, check-cashing operations) led him to what were then known as “second-lien” mortgages. From his street-level perspective, he could see the abuses and asymmetries of the market in a way that the conventional business press could not. But because it ran mostly in small publications, his reporting was largely ignored. Hudson pursued the story nationally, via a muckraking book, Merchants of Misery (Common Courage Press, 1996); in a 10,000-word expose on Citigroup-as-subprime-factory, which won a Polk award in 2004 for the small alternative magazine Southern Exposure; and in a series on the subprime leader, Ameriquest, co-written as a freelancer, for the Los Angeles Times in 2005. He continued to pursue the subject as it metastasized into the trillion-dollar center of the Financial Crisis of 2008—briefly at The Wall Street Journal and now at the Center for Public Integrity. Hudson, 52, is the son of an ex-Marine and legendary local basketball coach. He started out on rural weeklies, covering championship tomatoes and large fish and such, even produced a cooking column. But as a reporter for The Roanoke Times he turned to muckraking and never looked back. CJR’s Dean Starkman interviewed Hudson in the spring of 2011.

Follow the ex-employees

The great thing about The Roanoke Times was that there was an emphasis on investigation but there was also an emphasis on storytelling and writing. And they would bring in lots of people like Roy Peter Clark and William Zinsser, the On Writing Well guy. The Providence Journal book, the How I Wrote the Story, was a bit of a Bible for me.

As I was doing a series on poverty in Roanoke, one of the local legal aid attorneys was like, “It’s not just the lack of money—it’s also what happens when they try to get out of poverty.” He said basically there are three ways out: they bought a house, so they got some equity; they bought a car so they could get some mobility; or they went back to school to get a better job. And in every case, he had example after example of folks, who because they were doing just that, had actually gotten deeper in poverty, trapped in unbelievable debt.

His clients often dealt with for-profit trade schools, truck driving schools that would close down; medical assistant’s schools that no one hired from; and again and again they’d be three, four, five, eight thousand dollars in debt, and unable to repay it, and then of course prevented from ever again going back to school because they couldn’t get another a student loan. So that got me thinking about what I came to know as the poverty industry.

I applied for an Alicia Patterson Fellowship and proposed doing stories on check-cashing outlets, pawn shops, second-mortgage lenders (they didn’t call themselves subprime in those days). This was ’91. We didn’t have access to the Internet, but I came across a wire story about something called the Boston “second-mortgage scandal,” and got somebody to send me a thick stack of clips. It was really impressive. The Boston Globe and other news organizations were taking on the lenders and the mortgage brokers, and the closing attorneys, and on and on.

I was trying to make the story not just local but national. I had some local cases involving Associates [First Capital Corp., then a unit of Ford Motor Corp.]. Basically, it turned out that Ford Motor Company, the old-line carmaker, was the biggest subprime lender in the country. The evidence was pretty clear that they were doing many of the same kinds of bait-and-switch salesmanship and, in some cases, pure fraud, that we later saw take over the mortgage market. I felt like this was a big story; this is the one! Later, investigations and Congressional hearings corroborated what I was finding in ’94, ’95, and ’96. And it seems so self-evident now, but I learned that finding ex-employees often gives you a window into what’s really going on with a company. The problem has always been finding them and getting them to talk.

I spent the better part of the ‘90s writing about the poverty industry and about predatory lending. As a reporter you don’t want to be defined by one subject. So I was actually working on a book about the history of racial integration in sports, interviewing old Negro-league baseball players. I was really trying to change a little bit of how I was moving forward career-wise. But it’s like the old mafia-movie line: every time I think I’m out, they pull me back in.

Subprime goes mainstream

In the fall of 2002, the Federal Trade Commission announced a big settlement with Citigroup, which had bought Associates, and at first I saw it as a positive development, like they had nailed the big bad actor. I’m doing a 1,000-word freelance thing, but of course as I started to report I started hearing from people who were saying that this settlement is basically giving them absolution, and allowed them to move forward with what was, by Citi standards, a pretty modest settlement. And the other thing that struck me was the media was treating this as though Citigroup was cleaning up this legacy problem, when Citi itself had its own problems. There had been a big magazine story about [Citigroup Chief Sanford I.] “Sandy” Weill. It was like “Sandy’s Comeback.” I saw this and said, ‘Whoa, this is an example of the mainstreaming of subprime.’

I pitched a story about how these settlements weren’t what they seemed, and got turned down a lot of places. Eventually I went to Southern Exposure and called the editor there, Gary Ashwill, and he said, “That’s a great story, we’ll put it on the cover.” And I said, “Well how much space can we have?” and he said, “How much do we need?” That was not something you heard in journalism in those days.

I interviewed 150 people, mostly borrowers, attorneys, experts, industry people, but the stuff that really moves the story are the former employees. Many of them had just gotten fired for complaining internally. They were upset about what had gone on—to some degree about how the company treated them, but usually very upset about how the company had pressured them and their co-workers to mistreat their customers.

As a result of the Citigroup stuff, I got a call from a filmmaker [James Scurlock] who was working on what eventually became Maxed Out, about credit cards and student loans and all that kind of stuff. And he asked if I could go visit, and in some cases revisit, some of the people I had interviewed and he would follow me with a camera. So I did sessions in rural Mississippi, Brooklyn and Queens, and Pittsburg. Again and again you would hear people talk about these bad loans they got. But also about stress. I remember a guy in Brooklyn, not too far from where I live now, who paused and said something along the lines of: ‘You know I’m not proud of this, but I have to say I really considered killing myself.’ Again and again people talked about how bad they felt about having gotten into these situations. It was powerful and eye-opening. They didn’t understand, in many cases, that they’d been taken in by very skillful salesmen who manipulated them into taking out loans that were bad for them.

If one person tells you that story, you say okay, well maybe it’s true, but you don’t know. But you’ve got a woman in San Francisco saying, “I was lied to and here’s how they lied to me,” and then you’ve got a loan officer for the same company in suburban Kansas saying, “This is what we did to people.” And then you have another loan officer in Florida and another borrower in another state. You start to see the pattern.

People always want some great statistic [proving systemic fraud], but it’s really, really hard to do that. And statistics data doesn’t always tell us what happened. If you looked at some of the big numbers during the mortgage boom, it would look like everything was fine because of the fact that they refinanced people over and over again. So essentially a lot of what was happening was very Ponzi-like—pushing down the road the problems and hiding what was going on. But I was not talking to analysts. I was not talking to high-level corporate executives. I was not talking to experts. I was talking to the lowest level people in the industry— loan officers, branch managers. I was talking to borrowers. And I was doing it across the country and doing it in large numbers. And when you actually did the shoe-leather reporting, you came up with a very different picture than the PR spin you were getting at the high level.

One day Rich Lord [who had just published the muckraking book, American Nightmare: Predatory Lending and the Foreclosure of the American Dream, Common Courage Press, 2004) and I went to his house. We were sitting in his study. Rich had spent a lot of time writing about Household [International, parent of Household Finance], and I had spent a lot of time writing about Citigroup. Household had been number one in subprime, and then CitiFinancial/Citigroup was number one. This was in the fall of 2004. We asked, well, who’s next? Rich suggested Ameriquest.

I went back home to Roanoke and got on the PACER—computerized court records—system and started looking up Ameriquest cases, and found lots of borrower suits and ex-employee suits. There was one in particular, which basically said that the guy had been fired because he had complained that Ameriquest business ethics were terrible. I just found the guy in the Kansas City phone book and called him up, and he told me a really compelling story. One of the things that really stuck out is, he said to me, “Have you ever seen the movie Boiler Room [2000, about an unethical pump-and-dump brokerage firm]?”

By the time I had roughly ten former employees, most of them willing to be on the record, I thought: this is a really good story, this is important. In a sense I feel like I helped them become whistleblowers because they had no idea how to blow the whistle or what to do. And Ameriquest at that point was on its way to being the largest subprime lender. So, I started trying to pitch the story. While I had a full-time gig at the Roanoke Times, for me the most important thing was finding the right place to place it.

The Los Angeles Times liked the story and teamed me with Scott Reckard, and we worked through much of the fall of 2004 and early 2005. We had thirty or so former employees, almost all of them basically saying that they had seen improper, illegal, fraudulent practices, some of whom acknowledged that they’d done it themselves: bait-and-switch salesmanship, inflating people’s incomes on their loan applications, and inflating appraisals. Or they were cutting and pasting W2s or faking a tax return. It was called the “art department”—blatant forgery, doctoring the documents. You know, it was pretty eye-opening stuff. One of the best details was that many people said they showed Boiler Room—as a training tape! And the other important thing about the story was that Ameriquest was being held up by politicians, and even by the media, as the gold standard—the company cleaning up the industry, reversing age-old bad practices in this market. To me, theirs was partly a story of the triumph of public relations.

Leaving Roanoke

I’d been in Roanoke almost 20 years as a reporter, and so, what’s the next step? I resigned from the Roanoke Times and for most of 2005 I was freelancing fulltime. I made virtually no money that year, but by working on the Ameriquest story, it helped me move to the next thing. I interviewed with The Wall Street Journal [and was hired to cover the bond market]. Of course I came in pitching mortgage-backed securities as a great story. I could have said it with more urgency in the proposal, but I didn’t want to come off as like an advocate, or half-cocked.

Daily bond market coverage is their bread-and-butter, and it’s something that needs to be done. And I tried to do the best I could on it. But I definitely felt a little bit like a point guard playing small forward. I was doing what I could for the team but I was not playing in a position where my talents and my skills were being used to the highest.

I wanted to do a documentary. I wanted to do a book [which would become The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America—and Spawned a Global Crisis, Times Books, 2010]. I felt like I had a lot of information, a lot of stuff that needed to be told, and an understanding that many other reporters didn’t have. And I could see a lot of the writing focused on deadbeat borrowers lying about their income, rather than how things were really happening.

Through my reporting I knew two things: I knew that there were a lot of predatory and fraudulent practices throughout the subprime industry. It wasn’t isolated pockets, it wasn’t rogue lenders, it wasn’t rogue employees. It was really endemic. And I also knew that Wall Street played a big role in this, and that Wall Street was driving or condoning and/or profiting from a lot of these practices. I understood that, basically, the subprime lenders, like Ameriquest and even like Countrywide, were really just creatures of Wall Street. Wall Street loaned these companies money; they then made loans; they off-loaded the loans to Wall Street; Wall Street then sold them [as securities to investors]. And it was just this magic circle of cash flowing. The one thing I didn’t understand was all the fancy financial alchemy—the derivatives, the swaps, that were added on to put them on steroids.

It’s clear that people inside a company, one or two or three people, could commit fraud and get away with it, on occasion, despite the best efforts of a company. But I don’t think it can happen in a widespread way when a company has basic compliance systems in place. The best way to connect the dots from the sleazy practices on the ground to people at high levels was to say, okay, they did have these compliance people in place; they had fraud investigators, loan underwriters, and compliance officers. Did they do their jobs? And if they did, what happened to them?

In late 2010, at the Center for Public Integrity, I got a tip about a whistleblower case involving someone who worked at a high level at Countrywide. This is Eileen Foster, who had been an executive vice president, the top fraud investigator at Countrywide. She was claiming before OSHA that she was fired for reporting widespread fraud, but also for trying to protect other whistleblowers within the company who were also reporting fraud at the branch level and at the regional level, all over the country. The interesting thing is that no one in the government had ever contacted her! [This became “Countrywide Protected Fraudsters by Silencing Whistleblowers, say Former Employees,” September 22 and 23, 2011, one of CPI’s best-read stories of the year; 60 Minutes followed with its own interview of Foster, in a segment called, “Prosecuting Wall Street,” December 14, 2011.] It was very exciting. We worked really hard to do follow-up stories. I did about eight stories afterward, many about General Electric, a big player in the subprime world. We found eight former mortgage unit employees who had tried to warn about abuses and whom management had shunted aside.

I just feel like there needs to be more investigative reporting in the mix, and especially more investigative reporting—of problems that are going on now, rather than post-mortems or tick-tocks about financial disasters or crashes or bankruptcies that have already happened.

And that’s hard to do. It takes a real commitment from a news organization, and it can be a high-wire thing because you’re working on these stories for a long time, and market players you’re writing about yell and scream and do some real pushback. But there needs to be more of the sort of early warning journalism. It’s part of the big tent, what a newspaper is.

Foreclosure Strategists: Phx. Meet tomorrow with AZ AG Tom Horne

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For Customer Service call 1-520-405-1688

Want to read more? Download entire introduction for the Attorney Workbook, Treatise & Practice Manual 2012 Ed – Sample

Pre-Order the new workbook today for up to a $150 savings, visit our store for more details. Act now, offer ends soon!

Editor’s Comment:

Contact: Darrell Blomberg  Darrell@ForeclosureStrategists.com  602-686-7355

Meeting: Tuesday, May 8th, 2012, 7pm to 9pm

Special guest speaker:  Arizona Attorney General Tom Horne

We will be discussing among other things:

Brief bio / history

Arizona v Countrywide / Bank of America lawsuit settlement

National Attorneys’ General Mortgage Settlement

Appropriation of National Mortgage Settlement Funds

Attorney General’s Legislative Efforts pertaining to foreclosures

Submitted and submitting complaints to the Attorney General’s office

Joint efforts between the Attorney General’s office and other agencies

Adding effectiveness to homeowner’s OCC Complaints

Please send me your thoughts and questions you’d like to ask Tom Horne.

We meet every week!

Every Tuesday: 7:00pm to 9:00pm. Come early for dinner and socialization. (Food service is also available during meeting.)
Macayo’s Restaurant, 602-264-6141, 4001 N Central Ave, Phoenix, AZ 85012. (east side of Central Ave just south of Indian School Rd.)
COST: $10… and whatever you want to spend on yourself for dinner, helpings are generous so bring an appetite.
Please Bring a Guest!
(NOTE: There is a $2.49 charge for the Happy Hour Buffet unless you at least order a soft drink.)

FACEBOOK PAGE FOR “FORECLOSURE STRATEGIST”

I have set up a Facebook page. (I can’t believe it but it is necessary.) The page can be viewed at www.Facebook.com, look for and “friend” “Foreclosure Strategist.”

I’ll do my best to keep it updated with all of our events.

Please get the word out and send your friends and other homeowners the link.

MEETUP PAGE FOR FORECLOSURE STRATEGISTS:

I have set up a MeetUp page. The page can be viewed at www.MeetUp.com/ForeclosureStrategists. Please get the word out and send your friends and other homeowners the link.

May your opportunities be bountiful and your possibilities unlimited.

“Emissary of Observation”

Darrell Blomberg

602-686-7355

Darrell@ForeclosureStrategists.com

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Editor’s Comment:

It appears as though Bloomberg has joined the media club tacit agreement to ignore housing and more particularly Investment Banking or relegate them to just another statistic. The possibilities of a deep, long recession created by the Banks using consumer debt are avoiđed and ignored regardless of the writer or projection based upon reliable indexes.

Why is it that Bloomberg News refuses to tell us the news? The facts are that median income has been flat for more than 30 years. The financial sector convinced the government to allow banks to replace income with consumer debt. The crescendo was reached in the housing market where the Case/Schiller index shows a flash spike in prices of homes while the values of homes remained constant. The culprit is always the same — the lure of lower payments with the result being the oppressive amount of debt burden that can no longer be avoided or ignored. The median consumer has neither the cash nor credit to buy.

Each year we hear predictions of a recovery in the housing market, or that green shoots are appearing. We congratulate ourselves on avoiding the abyss. But the predictions and the congratulations are either premature or they will forever be wrong.

The financial sector is allowed to play in our economy for only one reason— to provide capital to satisfy the needs of business for innovation, growth and operations. Instead, we find ourselves with bloated TBTF myths, the capital drained from our middle and lower classes that would be spent supporting an economy of production and service. That money has been acquired and maintained by the financal sector giants, notwithstanding the reports of layoffs.

From any perspective other than one driven by ideology one must admit that the economy has undergone a change in its foundation — and that these changes are ephemeral and cannot be sustained. With GDP now reliant on figures from the financial sector which for the longest time hovered around 16%, our “economy” would be 50% LESS without the financial sector reporting bloated revenues and profits just as they contributed to the false spike in prices of homes. Bloated incomes inflated the stampede of workers to Wall Street.

Investigative reporting shows that the tier 2 yield spread premium imposed by the investment bankers — taking huge amounts of investment capital and converting the capital into service “income” — forced a structure that could not work, was guaranteed not to work and which ultimately did fail with the TBTF banks reaping profits while the rest of the economy suffered.

The current economic structure is equally unsustainable with income and wealth inequality reaching disturbing levels. What happens when you wake up and realize that the real economy of production of goods and service is actually, according to your own figures, worth 1/3 less than what we are reporting as GDP. How will we explain increasing profits reported by the TBTF banks? where did that money come from? Is it real or is it just what we want to hear want to believe and are afraid to face?


Hiding Behind Advice of Counsel No Better Than Ratings

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Editor’s Comment:

In an article entitled “Legal Beagles in Cross Hairs” WSJ reports that the SEC and many others in law enforcement have on-going investigations into the role of attorneys not misconduct of their clients. For the most part it is an attorney’s solemn duty to represent and advocate the position of his or her client to the utmost of their ability without violating the law. Everyone is entitled to a lawyer no matter how reprehensible their conduct might have been when they committed the act.

But the SEC seems to be leading the way, starting with indictments and convictions of attorneys that kicks aside the clients’ defense of “I did it on advice of counsel.” in wide ranging probes law enforcement agencies are after the attorneys who said it was OK — upon receiving lavish payments, that what the Banks did in setting the securitization structure for the cash trail and setting up the securitization procedure for the document trail and then setting up the contents of the documents that would provide coverage for intentional acts of theft, forgery, fabrication and a variety of other acts.

The attorneys who gave letters of opinion to the investment banks blessing securitization of home and commercial mortgages as they were presented and launched are in deep hot water. This is especially true since the law firms that engaged in these “blessings” had lawyers quitting their jobs leaving behind memorandums to the partners that the law firm itself was committing crimes. The similarity between the blessing of the law firm and the ratings of Moody’s, S&P, Fitch is surprising to some people.

And the attorneys who suggested severance settlements conditioned on employed lawyers or other witnesses on a sudden onset of amnesia are also in the cross-hairs, getting stiff long-term sentences. These are all potential witnesses in what could be come nationwide probes that were blocked by “advice of counsel” claims and brings to mind those many cases where the lawyer for Wells, US Bank, or BOA was fined and sanctioned for lying to the court about facts which they most certainly knew or should have known — like the name of their client.

As these probes continue it may be seen as scapegoating the attorneys or as chilling the confidentiality of the relationship between lawyer and client. But that rule of confidentiality and the defines of advice of counsel vanishes when the conduct of the attorney or indeed a whole law firm is that of a co-conspirator. It is especially unavailable when you have a foreclosure mill that is forging, fabricating and filing documents on behalf of extremely well paying clients.

It would therefore seem to be an appropriate time to file complaints with law enforcement including police and regulatory authorities that are well-written, honed down to a sharp point and which attach at least some evidence beyond the mere allegation of wrong-doing on the part of the attorney or law firm. If appropriate lay people can file the same complaints as grievances with the state Bar Association that is required to regulate and discipline the behavior of lawyers. And attorneys for homeowners and judges who hear these cases are under an obligation to report evidence of wrongdoing or else face disciplinary charges of their own resulting in suspension or disbarment.

Legal Eagles in Cross Hairs

By JEAN EAGLESHAM

The Securities and Exchange Commission is intensifying its scrutiny of lawyers who gave a green light to certain mortgage-bond deals before the financial crisis or have tried to thwart investigations by the agency, according to people familiar with the matter.

The move is at an early stage and might not result in any enforcement action by the SEC because of the difficulty proving lawyers went beyond their legal duty to clients, these people cautioned. In the past, SEC officials generally have gone after lawyers only when accusing them of active involvement in securities fraud or serious misconduct, such as faking documents in a probe.

In recent months, though, some SEC officials have grown frustrated by what they claim is direct obstruction of a few investigations and a larger number of probes where lawyers coach clients in the art of resisting and rebuffing. The tactics include witnesses “forgetting” what happened and companies conducting internal investigations that scapegoat junior employees and let senior managers off the hook, agency officials say. “The problem of less-than-candid testimony … is a serious one,” Robert Khuzami, the SEC’s director of enforcement, said at a conference last month. The stepped-up scrutiny is aimed at both internal and outside lawyers.

Claudius Modesti, enforcement chief at the Public Company Accounting Oversight Board, an accounting watchdog created by the Sarbanes-Oxley Act, said at the same event: “We’re encountering lawyers who frankly should know better.”

The SEC enforcement staff has recently reported more lawyers to the agency’s general counsel, who can take administrative action against lawyers for alleged professional misconduct.

The SEC hasn’t disclosed the number of referrals. Only one lawyer has ever been banned for life from representing clients before the agency because of professional misconduct.

Earlier this year, Kenneth Lench, head of the SEC’s structured-products enforcement unit, said the agency needed to “seriously consider” charges against lawyers in “appropriate cases.” Mr. Lench said he saw “some factual situations where I seriously question whether the advice that was given was done in good faith.”

In July, the Commodity Futures Trading Commission gained the new power to take civil action against anyone, including lawyers, who makes “any false or misleading statement of a material fact.”

The agency, which oversees the futures and options market, hasn’t taken any action yet under the expanded power, according to a person familiar with the matter. A CFTC spokesman declined to comment.

“Frankly, I wish we had the power the CFTC has,” Mr. Khuzami said.

The SEC’s focus on advice provided by lawyers in mortgage-bond deals is part of the wider push by officials to punish alleged wrongdoing tied to the financial crisis. So far, the SEC has filed crisis-related civil suits against 102 firms and individuals, and more cases are coming, according to people familiar with matter.

Some former government officials say stepping up regulatory scrutiny of lawyers for their work on cases snared in investigations by the SEC could send a chilling message. “The government needs to be careful not to deter lawyers from being zealous advocates for their clients,” says John Wood, a former U.S. Attorney for the Western District of Missouri.

The only lawyer hit with a lifetime ban by the SEC for his work on behalf of a client is Steven Altman of New York. The client was a witness in an SEC investigation, and the agency alleged that Mr. Altman suggested in a recorded phone conversation that the client’s recollection of certain events might “fade” if she got a year of severance pay.

Last year, an appeals court rejected Mr. Altman’s bid to overturn the 2010 ban. Jeffrey Hoffman, a lawyer for Mr. Altman, couldn’t be reached for comment.

In December, a federal grand jury in Los Angeles indicted lawyer David Tamman on 10 criminal counts related to helping a former client cover up an alleged $20 million fraud. Prosecutors claim Mr. Tamman changed and backdating documents, removed incriminating documents from investor files and lied to SEC investigators in sworn testimony.

“The truth is that my client was set up and made a scapegoat,” says Stanley Stone, a lawyer for Mr. Tamman, adding that his client acted under the advice and guidance of senior lawyers at his former law firm, Nixon Peabody LLP. “We’re going to prove at trial that what was done was not criminal,” Mr. Stone says.

A Nixon Peabody spokeswoman says Mr. Tamman was fired in 2009 “as soon as we learned that he was under SEC investigation and he failed to explain his actions to us.” The law firm has asked a judge to throw out a wrongful-termination suit filed by Mr. Tamman.

A criminal trial last year shows how the SEC could face daunting hurdles in bringing enforcement actions against lawyers for providing bad advice.

“A lawyer should never fear prosecution because of advice that he or she has given to a client who consults him or her,” U.S. District Judge Roger Titus in Maryland ruled when dismissing all six charges against Lauren Stevens, a former lawyer at drug maker GlaxoSmithKline PLC. GSK +0.19%

Ms. Stevens was accused by prosecutors of lying to the FDA and concealing and falsifying documents related to an investigation by the U.S. agency. The federal judge refused to let a jury decide the case, saying that would risk a miscarriage of justice.

Reid Weingarten, a lawyer for Ms. Stevens, couldn’t be reached. A spokeswoman for the Justice Department declined to comment.

Despite the government’s defeat, “the mere fact she was charged sends a strong signal to other lawyers about the risks of being seen as less than forthcoming in their representation s to the government,” says Mr. Wood, the former federal prosecutor in Missouri. He now is a partner at law firm Hughes Hubbard & Reed LLP.


People Have Answers, Will Anyone Listen?

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Editor’s Comment: 

Thanks to Home Preservation Network for alerting us to John Griffith’s Statement before the Congressional Progressive Caucus U.S. House of Representatives.  See his statement below.  

People who know the systemic flaws caused by Wall Street are getting closer to the microphone. The Banks are hoping it is too late — but I don’t think we are even close to the point where the blame shifts solidly to their illegal activities. The testimony is clear, well-balanced, and based on facts. 

On the high costs of foreclosure John Griffith proves the point that there is an “invisible hand” pushing homes into foreclosure when they should be settled modified under HAMP. There can be no doubt nor any need for interpretation — even the smiliest analysis shows that investors would be better off accepting modification proposals to a huge degree. Yet most people, especially those that fail to add tacit procuration language in their proposal and who fail to include an economic analysis, submit proposals that provide proceeds to investors that are at least 50% higher than the projected return from foreclosure. And that is the most liberal estimate. Think about all those tens of thousands of homes being bull-dozed. What return did the investor get on those?

That is why we now include a HAMP analysis in support of proposals as part of our forensic analysis. We were given the idea by Martin Andelman (Mandelman Matters). When we performed the analysis the results were startling and clearly showed, as some judges around the country have pointed out, that the HAMP loan modification proposals were NOT considered. In those cases where the burden if proof was placed on the pretender lender, it was clear that they never had any intention other than foreclosure. Upon findings like that, the cases settled just like every case where the pretender loses the battle on discovery.

Despite clear predictions of increased strategic defaults based upon data that shows that strategic defaults are increasing at an exponential level, the Bank narrative is that if they let homeowners modify mortgages, it will hurt the Market and encourage more deadbeats to do the same. The risk of strategic defaults comes not from people delinquent in their payments but from businesspeople who look at the principal due, see no hope that the value of the home will rise substantially for decades, and see that the home is worth less than half the mortgage claimed. No reasonable business person would maintain the status quo. 

The case for principal reductions (corrections) is made clear by the one simple fact that the homes are not worth and never were worth the value of the used in true loans. The failure of the financial industry to perform simple, long-standing underwriting duties — like verifying the value of the collateral created a risk for the “lenders” (whoever they are) that did not exist and was present without any input from the borrower who was relying on the same appraisals that the Banks intentionally cooked up so they could move the money and earn their fees.

Many people are suggesting paths forward. Those that are serious and not just positioning in an election year, recognize that the station becomes more muddled each day, the false foreclosures on fatally defective documents must stop, but that the buying and selling and refinancing of properties presents still more problems and risks. In the end the solution must hold the perpetrators to account and deliver relief to homeowners who have an opportunity to maintain possession and ownership of their homes and who may have the right to recapture fraudulently foreclosed homes with illegal evictions. The homes have been stolen. It is time to catch the thief, return the purse and seize the property of the thief to recapture ill-gotten gains.

Statement of John Griffith Policy Analyst Center for American Progress Action Fund

Before

The Congressional Progressive Caucus U.S. House of Representatives

Hearing On

Turning the Tide: Preventing More Foreclosures and Holding Wrong-Doers Accountable

Good afternoon Co-Chairman Grijalva, Co-Chairman Ellison, and members of the caucus. I am John Griffith, an Economic Policy Analyst at the Center for American Progress Action Fund, where my work focuses on housing policy.

It is an honor to be here today to discuss ways to soften the blow of the ongoing foreclosure crisis. It’s clear that lenders, investors, and policymakers—particularly the government-controlled mortgage giants Fannie Mae and Freddie Mac—must do all they can to avoid another wave of costly and economy-crushing foreclosures. Today I will discuss why principal reduction—lowering the amount the borrower actually owes on a loan in exchange for a higher likelihood of repayment—is a critical tool in that effort.

Specifically, I will discuss the following:

1      First, the high cost of foreclosure. Foreclosure is typically the worst outcome for every party involved, since it results in extraordinarily high costs to borrowers, lenders, and investors, not to mention the carry-on effects for the surrounding community.

2      Second, the economic case for principal reduction. Research shows that equity is an important predictor of default. Since principal reduction is the only way to permanently improve a struggling borrower’s equity position, it is often the most effective way to help a deeply underwater borrower avoid foreclosure.

3      Third, the business case for Fannie and Freddie to embrace principal reduction. By refusing to offer write-downs on the loans they own or guarantee, Fannie, Freddie, and their regulator, the Federal Housing Finance Agency, or FHFA, are significantly lagging behind the private sector. And FHFA’s own analysis shows that it can be a money-saver: Principal reductions would save the enterprises about $10 billion compared to doing nothing, and $1.7 billion compared to alternative foreclosure mitigation tools, according to data released earlier this month.

4      Fourth, a possible path forward. In a recent report my former colleague Jordan Eizenga and I propose a principal-reduction pilot at Fannie and Freddie that focuses on deeply underwater borrowers facing long-term economic hardships. The pilot would include special rules to maximize returns to Fannie, Freddie, and the taxpayers supporting them without creating skewed incentives for borrowers.

Fifth, a bit of perspective. To adequately meet the challenge before us, any principal-reduction initiative must be part of a multipronged

To read John Griffith’s entire testimony go to: www.americanprogressaction.org/issues/2012/04/pdf/griffith_testimony.pdf


Guest Writer Shares Info on Fraud in CA Foreclosure Cases

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Editor’s Comment: The following information was submitted to the blog by a law firm.  We do not know this law firm.  We are simply passing along information that may be of interest to Californians.  As always, please do your research.

From counsel for Consumer Rights Defenders for our loyal followers, you may be interested in this California information which is not meant to be legal advise, just some information that is public knowledge. Call if you need foreclosure help at 818.453.3585 ask for Steve or Sara.   Ms. Stephens Esq7777@aol.com

___________

Elements of fraud cause of action: A plaintiff seeking a remedy based upon fraud must allege and prove all of the following basic elements:

· Defendant’s false representation or concealment of a ‘material’ fact (see Rest.2d Torts | 538(2)(a); Engalla v. Permanente Med. Group, Inc. (1997) 15 Cal.4th 951, 977, 64 Cal.Rptr.2d 843, 859–misrepresentation deemed ‘material’ if ‘a reasonable (person) would attach importance to its existence or nonexistence in determining his choice of action in the transaction’);

· Defendant made the representation with knowledge of its falsity or without sufficient knowledge of the subject to warrant a representation;

· The representation was made with the intent to induce plaintiff (or a class to which plaintiff belonged) to act upon it (see Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 869, 76 Cal.Rptr.3d 325, 333–fraud by false representations means intent to induce ‘reliance’; fraud by concealment involves intent to induce ‘conduct’);

· Plaintiff entered into the contract in ‘justifiable reliance’ upon the representation (see Ostayan v. Serrano Reconveyance Co. (2000) 77 Cal.App.4th 1411, 1419, 92 Cal.Rptr.2d 577, 583–P’s admission of no reliance on a representation made by D precludes cause of action for intentional or negligent misrepresentation); and

· As a result of reliance upon the false representation, plaintiff has suffered damages. [Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239, 44 Cal.Rptr.2d 352, 359; see Manderville v. PCG & S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498, 55 Cal.Rptr.3d 59, 68; and Auerbach v. Great Western Bank (1999) 74 Cal.App.4th 1172, 1184, 88 Cal.Rptr.2d 718, 727–‘Deception without resulting loss is not actionable fraud’ (¶ 11:357.1)]

(1) [11:354.1] Particularized pleading required: A fraud cause of action must be pleaded with particularity; i.e., every element of the cause of action must be alleged factually and specifically in full. [Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216, 197 Cal.Rptr. 783, 795; see Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73, 269 Cal.Rptr. 337, 345–complaint must plead facts showing ‘how, when, where, to whom, and by what means the representations were tendered’; Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268-1269, 258 Cal.Rptr. 787, 790–fraud complaint deficient if it neither shows cause and effect relationship between alleged fraud and damages sought nor alleges definite amount of damages suffered]

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