Az Repr. Giffords Calls For Moratorium on Foreclosures

Although she is adding to the chorus of objections and revelations about fraudulent foreclosures, notably adding her voice to Marcy Kaptur of Ohio, it is unlikely that any such moratorium will occur in Arizona. The Banks are hell-bent on foreclosing as many homes as possible before the law catches up with them, after which they will probably settle for pennies on the dollar in class actions, politically motivated AG actions and regulatory actions.

I received the letter shown below which was was sent to Gov. Brewer from a homeowner in distress. Like most homeowners he assumes that he is behind in his mortgage payments. The truth is more complicated than that. His loan is probably not in default, not secured, not subject to foreclosure, and paid off.

My personal experience with the Arizona government is that it at best highly responsive to the desires of the financial services industry, and at worst completely corrupt. There are many people in the Arizona legislature and in the executive branch of government who have been aware in every detail of the scheme that is stealing homes from innocent homeowners, whose loans have been either completely paid off by mitigation payments to the creditors or have been nearly paid off — not to speak of those homeowners who are owed damages and treble damages for wrongful foreclosure.

These courageous politicians tried very hard about 18 months ago to stop the chaos and cure the state budget deficit by pursuing the enforcement of taxes that are due from MERS, investment bankers, their affiliates and subsidiaries.  For a while it looked like we were going to accomplish something. Suddenly everything went dark and I was persona non Grata as were the facts that the pretender lenders were committing fraud using the the non-judicial process and a court system that was ignorant of the changes in mortgages and foreclosures over the past 10 years.

Maybe Repr. John Boehner doesn’t hand out money on the floor of the house of Representatives anymore because now it is illegal. But the money is getting to where it needs to go just the same. The forces behind Boehner and all politicians from both sides of the aisle are very strong and very arrogant in their willingness to exercise powers that are illegal, immoral and an outrage to anyone concerned with the political health of our system of government.

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Dear Governor Brewer,

I am a distressed homeowner.  I am currently 32 months behind in my note payments.  I am still in my home but I am facing my third Trustee’s Sale late this month.

I appeal to you to give Arizonans a 90-day break from the calculation of all Foreclosure / Trustee’s Sale time periods.  Here is the reason.

I am still in my home because I have been holding my loan servicer’s and my trustee’s feet to the fire.  I have demanded that they strictly comply with statutory notice provisions and contractual requirements.  This has resulted in my securing two prior trustee’s sale cancellations.  However, I think I will be mowed over on this go-around in favor of the statutory provision that essentially absolves all statutory and contractual requirement errors and oversights.  That is statutes A.R.S. § 33-811(B) & (C) which essentially allow the presumption of contractual and statutory compliance once the gavel drops on the sale.

I’ve been watching carefully what is happening in other states.  It seems readily apparent that the foreclosing entities are partaking in a fraud of magnanimous proportions!  First we had the cancellations of select foreclosures by GMAC, then JPMorgan – Chase quickly followed by Bank of America and Marshall & Ilsley.  I did notice that those moratoriums were in states that foreclose judicially.  This is important because those are states where a foreclosing party is likely to have to show documents in a court of law.  Lenders have realized that their documents are insufficient and the exposure of further problems may result in sanctions and an accurate disclosure to the public of their fundamental abuse of power.  I surmise that no lender moratoriums were issued in trustee’s sale states because it is unlikely that a lender would ever have to present any documentation to exercise the power of sale against a distressed homeowner.  In fact, it is almost impossible for a distressed homeowner to get any validation from their loan servicer.

I doubt that it was the intent of the legislators of Arizona (1971) to adopt Title 33 Chapter 6.1 Deeds of Trust and deny the body politic ofArizona the right to defend themselves against a foreclosing party.  As it turns out, that is exactly what has happened.  A homeowner can’t even find sanctuary in court.  Why are Arizonan’s that are trying to defend themselves against egregious acts of lenders, not afforded, at a minimum, to have a judge support their request to compel the aggressors to prove they have standing and the authority to proceed?  It seems the body politic of Arizona is having homes stolen from them every day by multi-billion dollar foreign corporations.  Why are our elected officials and judges not watching out for us?

I believe I have probably helped at least 80 friends, associates and referrals review the documentation associated with their trustee’s sale process.  I have not seen one set of documentation that meets the “strict compliance” standard as ruled on by the Arizona Supreme Court.  I will boldly step up and state with a high degree of confidence that the Trustee’s Sale process has never been meet by a foreclosing party in the state of Arizona.

I beseech you to put a 90-day delay into the Trustee’s Sale process in Arizona immediately.  We do not need a moratorium; we need for everybody to have their Trustee’s Sale process delayed by 90 days.  If we put in a 90-day moratorium thousands of homes would foreclose right after the holidays.  The trustee’s would run down the clock on distressed homeowners while the moratorium was in place.  A 90-day delay would freeze the calculation of the 91 days necessary to wait after the Notice of Trustee’s Sale has been filed.  This would result in a true 90-day benefit for your constituents.

If you would like to assemble a few (random) distressed homeowners with their Trustee’s Sale documentation; I would be happy to show you the flaws in the trustee’s sale process being executed against each of them.

May your possibilities be unlimited and your opportunities bountiful.

Darrell Blomberg

States Ignore Obvious Remedy to Fiscal Meltdown

without raising taxes one cent, many states could recover much or all of their deficit and perhaps some states could be looking at a surplus.
The money is sitting on Wall Street waiting to be claimed through existing tax laws, regulatory fees, and even damage claims much like the Tobacco litigation.
Editor’s Note: Bob Herbert of the New York Times correctly depicts the tragedy of the cuts to education, health care for children, and other essential services that we expect from government. And any economist would agree with him that budget cuts are the last thing a state or any government ought to do in a recession. But his story, and that of dozens of other reporters and opinion writers misses the simple fact that this crash, which is depression (not a recession) for many states need not be so painful.

The money is sitting on Wall Street waiting to be claimed through existing tax laws, regulatory fees, and even damage claims much like the Tobacco litigation. As I have repeatedly stated to Arizona’s Republican State Treasurer Dean Martin and Andre Cherney, the Democrat who wants to replace him, along with legislative committees and other government departments of many states, including Florida, they are owed taxes, fees, penalties and damages from the investment bankers who brought us the great financial meltdown.

It’s really simple, but the bank lobby is so strong and the misconceptions are so great, that they just don’t want to get it. In the securitization of mortgages, there were numerous transfers on and off record (mostly off-record).

Each of those transfers resulted in fees or profits made by the parties involved. All of that was ordinary income, taxable transfers, subject to recording and registration fees,and regulation by state agencies with whom the parties never bothered to register.

Each transaction that should have been recorded would produce revenue for counties in their recording offices if they simply enforced it. Each profit or fee earned was related to a transfer of real property interests in the state that were NOT subject to any exemption. The income tax applies. Arizona calculated what the income would be if they enforced tax collection against these fees and came up with $3 billion. I think it is three times that, but even accepting their estimate, that would completely eliminate their deficit and allow them to continue covering the 47,000  children they just cut from health care.

So without raising taxes one cent, many states could recover much or all of their deficit and perhaps some states could be looking at a surplus.
There are many ways to actually collect this money as I have explained to legislators, agency heads and aides. The ONLY reason communities are closing down police and fire departments, closing schools and cutting medical care for children is because the people in power are too beholden to the banking lobby and too fearful of angering the real powers on both the national and state levels — Wall Street.
March 20, 2010
Op-Ed Columnist, NY Times

A Ruinous Meltdown

A story that is not getting nearly enough attention is the ruinous fiscal meltdown occurring in state after state, all across the country.

Taxes are being raised. Draconian cuts in services are being made. Public employees are being fired. The tissue-thin national economic recovery is being undermined. And in many cases, the most vulnerable populations — the sick, the elderly, the young and the poor — are getting badly hurt.

Arizona, struggling with a projected $2.6 billion budget shortfall, took the drastic step of scrapping its Children’s Health Insurance Program. That left nearly 47,000 low-income children with no coverage at all. Gov. Jan Brewer is also calling for an increase in the sales tax. She said, “Arizona is navigating its way through the largest state budget deficit in its long history.”

In New Jersey, the newly elected governor, Chris Christie, has proposed a series of budget cuts that, among other things, would result in public schools receiving $820 million less in state aid than they had received in the prior school year. Some well-off districts would have their direct school aid cut off altogether. Poorer districts that rely almost entirely on state aid would absorb the biggest losses in terms of dollars. They’re bracing for a terrible hit.

For all the happy talk about “no child left behind,” the truth is that in Arizona and New Jersey and dozens of other states trying to cope with the fiscal disaster brought on by the Great Recession, millions of children are being left far behind, and many millions of adults as well.

“We’ve talked in the past about revenue declines in a recession,” said Jon Shure of the Center on Budget and Policy Priorities, “but I think you have to call this one a revenue collapse. In proportional terms, there has never been a drop in state revenues like we’re seeing now since people started to keep track of state revenues. We’re in unchartered territory when it comes to the magnitude of the impact.”

Massachusetts, which has made a series of painful cuts over the past two years, is gearing up for more. Michael Widmer, president of the Massachusetts Taxpayers Foundation, told The Boston Globe: “There’s no end to the bad news here. The state fiscal situation is already so dire that any additional bad news is magnified.”

California has cut billions of dollars from its education system, including its renowned network of public colleges and universities. Many thousands of teachers have been let go. Budget officials travel the state with a glazed look in their eyes, having tried everything they can think of to balance the state budget. And still the deficits persist.

In the first two months of this year, state and local governments across the U.S. cut 45,000 jobs. Additional layoffs are expected as states move ahead with their budgets for fiscal 2011. Increasingly these budgets, instead of helping people, are hurting them, undermining the quality of their lives, depriving them of educational opportunities, preventing them from accessing desperately needed medical care, and so on.

The federal government has tried to help, but much more assistance is needed.

These are especially tough times for young people. “What we’re seeing now in Arizona and potentially in New Jersey and other states spells long-term trouble for the nation’s children,” said Dr. Irwin Redlener, a pediatrician who is president of the Children’s Health Fund in New York and a professor at Columbia University’s Mailman School of Public Health.

“We’re looking at all these cuts in human services — in health care, in education, in after-school programs, in juvenile justice. This all points to a very grim future for these children who seem to be taking the brunt of this financial crisis.”

Dr. Redlener issued a warning nearly a year ago about the “frightening” toll the recession was taking on children. He told me last April, “We are seeing the emergence of what amounts to a ‘recession generation.’ ”

The impact of the recession on everyone, of whatever age, is only made worse when states trying to balance their budgets focus too intently on cutting services as opposed to a mix of service cuts and revenue-raising measures.

As Mr. Shure of the Center on Budget noted, “The cruel irony is that in a recession like this, the people’s needs go up at the same time that the states’ ability to meet those needs goes down.”

Budget cuts also tend to weaken rather than strengthen a state’s economy, especially when they entail furloughs or layoffs. Government spending stimulates an economy in recession. And wise spending is an investment in everyone’s quality of life.

All states have been rocked by the Great Recession. And most have tried to cope with a reasonable mix of budget cuts and tax increases, or other revenue-raising measures. Those that rely too heavily on cuts are making guaranteed investments in human misery.

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