Eric Mains: #MeToo- Is Social Justice a Viable Alternative to a Flawed and Compromised Judicial System?

La Revolucion

# MeToo and #MineToo revolución!

By Eric Mains, J.D, Former Federal Bank Regulator

In the last few months we have seen a literal wave of the wealthy and influential falling from grace, losing their positions of power and ducking for cover as their conduct becomes scrutinized in media and social media. They have become keenly aware if they have something to hide in their past or present that maybe, just maybe, the specter of justice, fate, retribution… call it what you will, but a reckoning of some sort may finally be coming for them.

The key difference from what we have experienced in the recent past is this is not just a few token individuals who are intentionally being sacrificed by other peers just to placate the masses, to give us a sense that there is justice out there, while a majority of the remaining transgressors remain free to go about business as usual. Until recently perpetrators of sexual harassment could expect their violations to either go unreported, or if reported by a victim to a typically “helpful” HR representative at a major corporation, would likely result in that persons termination shortly afterwards or a hushed payout and dismissal from employment. So, what’s changed? Why this sudden firestorm in the specific areas of sexual harassment & civil rights?

Well for one, the rise of social media giving voice to those who were previously either too intimidated or too ashamed to go through the regular channels of our justice system or report incidents to mainstream media. The lessening of any stigma attached with coming forward over allegations of sexual misconduct or workplace harassment to be sure; but perhaps more overlooked has been the slowly building tension from all corners of America with a justice system that over the past few decades has become ever more inaccessible and ever more compromised for certain victims.

The courts in America have slowly devolved (or evolved, depending on your perspective) into a long, drawn-out, pay-for-play system which favors those with the most money and connections. They can hire consultants to figure out how to pick and influence juries, and to try and maneuver into the most favorable venues with the most sympathetic judges. Whether the offense is sexual misconduct, civil rights violations, foreclosure fraud, etc., in many cases if the transgressors have enough resources, they are likely to see a deminimus sentence and little punishment handed out. This disparity in a lack of justice for victims, as compared with other areas of the law, has long existed due to the perceptions surrounding the victims by those in the public and in the system as well.

The above may sound cynical to some, or simply a self-evident statement of the way things are to others.  Those in the former category, who are true believers in our current justice system, may think that movements like #MeToo are just mob justice, devoid of the kind of impartial and logical dissemination of fact based justice they believe our current system provides.  To them, it represents chaos, it threatens the foundational platitude that, “We are a nation of laws”, with a system that meets out justice in a generally fair and impartial manner while ensuring the innocent aren’t wrongly accused or convicted.  That would be a valid sentiment-IF backed factually by a system that did function as such a majority of the time. Most would simply point out to the supporters of our current system that unless they have had blinders on for the past 200 years, they would notice our system has done a pretty haphazard job at providing for such an idealized form of justice in practice.

Don’t get me wrong, having a law degree and having worked as a government regulator I want to be able to have more faith in our justice system and the rule of law, faith that we do have mostly impartial and fair judges, and a court system accessible and open for equal justice to all. I still remember from my law school days something that particularly offended me at the time, when one of my professors stated matter-of-factly to our property law class the futility of assuming case law or precedent was necessarily going to ensure victory in the court room, “Unfortunately, most of the time the law is what the judge says it is, heh, heh, haauurrgh”. In hindsight, Professor Rooney was right, and the reality of our justice system keeps smacking I & my former classmates in the face daily just to drive home that point. Looking at a crosscut of some recent data and analysis of our nations various court systems shows the general problems petitioners/consumers/victims run into once inside it.

Consider access to the judicial system: In a Propublica study of bankruptcy filings, it found for those residing in majority black zip codes who file for bankruptcy, the odds of having their cases dismissed (and failing to attain lasting relief) were more than twice as high as those of debtors living in mostly white zip codes. Why? In general, it was driven by money. Impoverished filers could not afford to file for the costlier Chapter 7 cases as opposed to Chapter 13’s, resulting in less of their unaffordable debt loads being relieved. They, ironically, could not afford to get lasting relief from the bankruptcy system because of immediate financial distress. See https://projects.propublica.org/graphics/bankruptcy-data-analysis . A facial review of our justice system shows one in which only those with income below stated poverty lines can access free legal help in general, and that help is generally outgunned and outmanned. Got $200-$350 to file your court case and pay for your attorney fees/retainer in a civil matter otherwise? Not likely, and a pretty good chunk of those between the $20K-50K range really can’t afford the cost of entry in civil litigation, and are quickly priced out of the game when litigating against corporations. Why not take advantage of some impartial arbitration if you can’t sue?….don’t make me laugh.

How about impartiality in judicial decisionmaking? In a recent paper, Judging the Judiciary by the Numbers: Empirical Research on Judges, by Jeffrey Rachlinski (Cornell) & Andrew Wistrich (CA Central Dist. Ct.), the authors found that just like most humans, judges succumb to various “mental shortcuts” that can lead them to mistakes. The paper’s abstract reads “Do judges make decisions that are truly impartial? A wide range of experimental and field studies reveal that several extra-legal factors influence judicial decision making. Demographic characteristics of judges and litigants affect judges’ decisions.

Judges also rely heavily on intuitive reasoning in deciding cases, making them vulnerable to the use of mental shortcuts that can lead to mistakes. Furthermore, judges sometimes rely on facts outside the record and rule more favorably towards litigants who are more sympathetic or with whom they share demographic characteristics. On the whole, judges are excellent decision makers, and sometimes resist common errors of judgment that influence ordinary adults. The weight of the evidence, however, suggests that judges are vulnerable to systematic deviations from the ideal of judicial impartiality.” See Cornell Legal Studies Research Paper No. 17-32, July 2017 at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2979342

Racial and gender discrimination in decisionmaking? In Examining Empathy: Discrimination, Experience, and Judicial Decisionmaking, by Laura Beth Nielsen & Jill Weinberg of Northwestern University, a 2012 paper at http://www.americanbarfoundation.org/uploads/cms/documents/weinberg_nielsen_-_examining_empathy.pdf , the researchers reported that white federal judges are about four times more likely to dismiss race discrimination cases outright, and are half as likely as black federal judges to rule in favor of people alleging racial harassment in the workplace.

The authors argue this is because African American judges have likely experienced discrimination themselves, and therefore they can recognize more complex and subtle forms of racial harassment. How about gender bias in sexual assault cases? “A Baltimore detective said 90% of sexual-assault cases are ‘bulls—,’ but that’s just the start of the department’s problems” from  http://www.businessinsider.com/justice-department-slams-baltimore-police-department-gender-bias-2016-8  …and here https://www.justice.gov/opa/pr/justice-department-finds-substantial-evidence-gender-bias-missoula-county-attorney-s-office .

A DOJ investigation in Missoula in 2014 noted the following “Despite their prevalence in the community, sexual assaults of adult women are given low priority in the County Attorney’s Office; The County Attorney does not provide Deputy County Attorneys with the basic knowledge and training about sexual assault necessary to effectively and impartially investigate and prosecute these cases; The County Attorney’s Office generally does not develop evidence in support of sexual assault prosecutions, either on its own or in cooperation with other law enforcement agencies; Adult women victims, particularly victims of non-stranger sexual assault and rape, are often treated with disrespect, not informed of the status of their case and revictimized by the process;  and The County Attorney’s Office routinely fails to engage in the most basic communication about its cases of sexual assault with law enforcement and advocacy partners.” This is a 2014 report of just one city…ever wonder why women from the 1970’s, 80’s & 90’s often never bothered/dared reporting any assaults until now? Enough said.

Racial discrimination in sentencing? In a first of its kind report from 2014-2015 found here http://projects.heraldtribune.com/bias/sentencing/ The Herald-Tribune in Florida spent a year reviewing tens of millions of records in two state databases. Among the stated findings: “Florida’s sentencing system is broken. When defendants score the same points in the formula used to set criminal punishments — indicating they should receive equal sentences — blacks spend far longer behind bars. There is no consistency between judges in Tallahassee and those in Sarasota. • There’s little oversight of judges in FL. The courts keep a wealth of data on criminal defendants. So does the prison system. But no one uses the data to review racial disparities in sentencing. Judges themselves don’t know their own tendencies. Across FL, when a white and black defendant score the same points for the same offense, judges give the black defendant a longer prison stay in 60% of felony cases. For the most serious first-degree crimes, judges sentence blacks to 68% more time than whites with identical points. For burglary, it’s 45% more. For battery, it’s 30%.”

Consistency in decision making and opinions based on case precedent?  In a Nevada Law Journal paper entitled Stare Decisis In The Inferior Courts Of The United States, by Joseph W. Mead, his abstract notes “While circuit courts are bound to follow circuit precedent under “law of the circuit” the practice among federal district courts is more varied and uncertain, routinely involving little or no deference to their own precedent”  While I simply don’t have room for his full analysis here, I will note he concludes his paper in part as follows “But we are now left with a puzzle. If district courts indeed possess the power to either adopt the law of the district or require some other level of deference to precedent, and there are good reasons to do so, why have so few followed this path? I think the answer is not that district courts are choosing not to, but that they have not yet given the matter consideration.”

Foreclosure Bias? That’s an entire book, just ask David Dayen who wrote Chain of Title, or Abigail Field who accurately noted back in 2011 http://fortune.com/2011/04/18/fighting-a-foreclosure-suit-hope-for-the-right-judge/ “Not all judges are confronting the issues in the same way. Many are adopting procedures to stop any fraudulent behavior by the banks and are investigating questionable documents submitted in their cases. Other judges are turning a blind eye, at best.”

While I will save that aspect for a near future article, I will simply note that some judges going beyond turning a blind eye; they are straying into obstruction of justice, using a “selectively creative” doctoring of fact patterns from homeowner complaints to suit their narratives when issuing rulings, or just outright failing to address motions to correct error or address black letter law when challenged by attorneys. Par for the course, especially in the federal court system, which took a shamefully compromised former AG Eric Holder’s call to consider his TBTF/sympathy for the devil ideology in favor of Wall Street banks, and the fed courts ran like Usain Bolt with it (All while Holder’s temporarily vacant office was being kept warm at Covington & Burling, and Fannie Mae & Freddie Mac were being systemically looted by the Obama administration). A recent article discusses how the black community and consumers suffered in the name of this flawed ideology  http://peoplespolicyproject.org/2017/12/07/destruction-of-black-wealth-during-the-obama-presidency/ by Ryan Cooper and Matt Bruenig)

I know what many are thinking at this point: “So What? What are you telling us we don’t already know? The justice system is not perfect, it never will be, but it’s functional, and it’s the best we have to work with!” It would be the last part of that sentence that I would wholeheartedly disagree with, and why a platform like #MeToo is now becoming an important, and I think very valid, social justice alternative. Our system is not the best it can be in part because we have come to accept the fallacy that judges, politicians, prosecutors, police, CEO’s, talk news hosts, etc., those who help to shape, influence, or enforce our justice system in different ways, should be held to a different level of accountability, job performance, and social review than the rest of society.

You screw up on your job, make a bad decision that costs the company, hurts clients/constituents, and choose to allow an illegal or immoral activity to take place?-FIRED! Those in the aforementioned categories? Insider trading based on stock tips you get in office, OK! Screw over constituents/rear end a petitioner because his mother dresses him funny? That’s valid! Harass your office assistant or underling? You gave them a job, and they knew the game, grin and bear it! I could go on, but need not. Not only do those with access and who benefit from the system not want change, but those who work within it often don’t recognize the need for change (See Mead & FL Herald Tribune report, supra). Those within it don’t tend to question the biases that have been ingrained in them when they do make decisions (See Rachlinski, Nielsen, etc., supra). They are subject to undue influence by those with access and money who know how to “work” the justice system.

I routinely quote, and will continue to quote Frederick Douglass, because 150 years later the reality he highlighted has not changed one iota, “Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress.” Church Frederick! If we must accept that our system is biased, broken, and not soon to change, how the hell can we expect to wrangle justice out of it when all avenues for influencing seem out of our control? That’s where Douglass recognized the simplicity of the truth, and so does #MeToo-It’s demand! It’s fear of a collective and sizeable retribution for ignoring social justice & common morality. It’s creating consequences outside of a non-functional system that ultimately can lead to change in that system. Social media has given a voice to those who have not had a simple, affordable, accessible platform to demand justice denied them. Technology has now made that possible, and another old adage has proven itself to be as true as ever-“Cockroaches scurry under the light”

Can the wrong perpetrators of alleged crimes be identified or wrongly harassed by a # MeToo movement? Yes, but that risk is also true in the current system. Laws are in place to protect or compensate the innocent or wrongly accused, as well as punish those who knowingly make false statements. If the law and our justice system is a search for truth and justice, then maybe # MeToo will help expedite the administration of this in a system where it has been delayed and denied those without money and a voice. Maybe it’s time for a few more platforms like it from civil rights violations to fraudulent foreclosure….Maybe it’s time to remind those in our system who they are there to work for, and demand they do a better job of it… to demand a change from them and our system instead of quietly submitting…. Viva la # MeToo revolución!

Editor’s note:  Perhaps the wronged homeowner’s call to arms simply starts with a simple hashtag called #MineToo.  If you have been victimized by a loan servicer or foreclosed on fraudulently tweet #MineToo!!!

 

 

 

The Neil Garfield Show: Foreclosure Q & A. Have a Question? Neil Garfield wants to hear from you!

Q & A with Neil Garfield

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

 

Co-hosted with attorney Charles Marshall.

Do you have a perplexing question about foreclosure, securitization or chain-of-title issues?

Neil Garfield will answer questions from callers.  Please keep your question brief and limit yourself to one question so other guests may have an opportunity to speak with Neil.  Information provided is for educational purposes only and is NOT intended as legal advice.  Neil recommends you meet with an experienced attorney in your jurisdiction for guidance.

The Neil Garfield blog at www.livinglies.wordpress.com is the nation’s premiere website for information on fighfting wrongful foreclosure, identifying predatory bank practices, securitization issues and .chain-of-title issues.

www.lendinglies.com

MAIN NUMBER: 202-838-NEIL (6345).

Get a Consult!

https://www.vcita.com/v/lendinglies to schedule, leave message or make payments.

Our Services:  https://livinglies.me/2016/04/11/what-can-you-do-for-me-an-overview-of-services-offered-by-neil-garfield/

Register for Consultation here: https://live.vcita.com/site/lendinglies

Investigator Bill Paatalo: Nationstar Conducts “Bulk Note Sales” Without The “Notes?”

In 2013, investors in six “RALI Series” Trusts filed a complaint in New York against their Master Servicer (Nationstar Mortgage, LLC) for conducting “Bulk Note Sales” of non-performing loans owned by the trusts for its own benefit; specifically to recoup upwards of a billion-dollars worth of servicing advance receivables. The Plaintiff / Investors accused Nationstar of conducting these “Bulk Note Sales” without having any ownership or requisite authority to do so. (See: KIRP LLC V Nationstar Mortgage LLC).

Per the complaint:

“INTRODUCTION
1. KIRP is a significant investor in certificates issued by six residential mortgage backed security trusts sponsored by Residential Accredit Loans, Inc. (the “RALI Trusts”).  KIRP brings this action against Nationstar, the Master Servicer for the RALI Trusts, for its liquidating loans owned by the trusts through on-line auctions at fire sale prices without authorization and in  blatant abdication of its servicing duties under the governing contracts.
2. As the Master Servicer, the RALI Trusts pay Nationstar to “service” the mortgage loans owned by the trusts in the best interests of the trusts and their certificateholders.  This includes working to maximize the recoveries on each of the mortgage loans through enumerated actions detailed in Pooling and Servicing Agreements (the “Servicing Agreements”), which set forth the Master Servicer’s duties.  However, rather than fulfilling its responsibilities to maximize recoveries, Nationstar has recently embarked on a campaign to benefit its own interests at the expense of the RALI Trusts and their certificateholders, through auctioning off the trusts’ mortgage loans in bulk (“Bulk Note Sales”) for amounts that are a fraction of the loans’ unpaid balances or the value of the properties securing the loans.  While these Bulk Note Sales injure KIRP and the RALI Trusts’ other certificateholders by dissipating the assets of the RALI Trusts, they provide multiple benefits to Nationstar, including through allowing them to more quickly recoup certain advances they made on the mortgage loans as part of their servicing duties.  KIRP seeks to enjoin Nationstar from engaging in any further Bulk Note Sales in breach of its duties and to recover damages for the Bulk Note Sales that have already occurred.”
      When I read this complaint, a couple questions immediately jumped out at me regarding the so-called “notes” being auctioned off by a party that doesn’t own said notes. What did Nationstar disclose to the “purchasers” at auction as to their rights to sell the notes? And, were the “original notes” actually delivered to the bulk-sale purchasers by Nationstar as a non-owner of the notes?
 I went to the SEC and located the 424(B)(5) Prospectus filing for one of the named trusts in the lawsuit (RALI 2006-QO1). (See: http://www.secinfo.com/dsvRa.vC1.htm#7fll).
Here’s what the Trust disclosed as to the custody of the loan files on P.S-108:

Custodial Arrangements                                                          

      The trustee will appoint Wells Fargo Bank,  N.A., to 
serve as custodian of the mortgage  loans.  The  custodian is 
not an affiliate of the  depositor,  the master servicer or the 
sponsor. No servicer will have custodial  responsibility for 
the mortgage loans.  The custodian  will maintain mortgage 
loan files that contain  originals of the notes,  mortgages,  
assignments and allonges in vaults located at the sponsor's 
premises in Minnesota. Only the custodian has access to these 
vaults. A shelving and filing system segregates the files 
relating to the mortgage loans from other assets serviced 
by the master servicer.

 

 

      If Nationstar had no authority per the trust instruments to sell, liquidate, and convert the notes for its own personal gain, it’s hard to believe that Wells Fargo would release the “original” notes in bulk to Nationstar for these purposes. The likely scenario is that the bulk purchasers were delivered copies of the notes from Nationstar’s servicing system that were pawned off as “originals.”
     This goes to the heart of what I have suspected for years now in regards to these “bulk non-performing loan purchases” by debt buyers. The “Sellers” often have no rights to sell these loans, and the “Buyers” are purchasing bogus collateral files with no “original notes” and no verifiable chains of title.
 Judge Mosman Quote - Re-Default and Authentic Note
Contact Investigator Bill Paatalo at www.bpinvestigationagency.com
Private Investigator
BP Investigative Agency, LLC
bill.bpia@gmail.com

How You Can Easily Research State Records For Evidence Of Unremediated LPS Robo-Signing Fraud

How You Can Easily Research State Records For Evidence Of Unremediated LPS Robo-Signing Fraud*[1] 

By Eric Mains, Former FDIC Team Leader

Introduction

Many of the banks conducting foreclosures 2008-2013 relied on a few large foreclosure mills to litigate cases for them, and still do. For large banks, it made sense–consolidate your cases with specialized firms employing dozens of attorneys/paralegals, one-stop shop the process. Most of these firms from 2008-2013 used a version of Lender Processing Services (“LPS”) Desktop software program to create needed assignments for claimed holders of loans (Extra stress on the “claimed” part!). Some estimates put LPS’s dominance of the foreclosure software marketplace at 80% of the market during that period. LPS helped banks retain attorneys for foreclosures, and not surprisingly often chose large foreclosure mills to partner with- mills that often times had much in common with the infamous David Stern firm in Florida.

Stern’s firm became infamous for performing foreclosures using robo-signed/ forged documents when parties claiming holder in due course status lacked one inconvenient little thing–proper chain of title backing up their alleged home loans. The Stern law firm was ultimately brought down by its malfeasance after being investigated by the Florida AG’s office and sued successfully in multiple class actions. See http://www.palmbeachpost.com/business/judge-class-action-status-for-homeowner-lawsuit-against-florida-law-firm/cQbMHYSVMFUCZOILofW10K/.

The robo-signing scandal was also brought front and center in modern pop culture when CBS’s 60 Minutes newsmagazine aired an episode on the infamous use of “Linda Green” by an LPS unit as a pseudonym to endorse thousands of invalid note assignments. The episode told the story of Lynn Szymoniak’s successful investigation and qui tam lawsuit exposing the rampant use of robo-signing/forgery by banks and foreclosure mills to pursue illegal foreclosure actions. See https://www.cbsnews.com/news/whistleblower-facing-foreclosure-wins-18-million/ .

 

In 2013 a widely touted Consent Judgment (CJ) by the various State AG’s offices claimed to have resolved LPS’s robo-signing practices, see  http://www.mass.gov/ago/news-and-updates/press-releases/2013/2013-01-31-lps-settlement.html . The problem became however, if there were 1000’s of these robo-signed documents out there, how exactly did the AG’s offices follow up to confirm the documents were in fact remediated? How did they confirm the robo-signing/forgery by LPS had stopped? This was what the CJ required, and the State AG’s offices were to get quarterly reports from LPS confirming their compliance through January 2018. So why are the State AG’s offices refusing to release copies of these compliance reports to this day?

Why have they never published a list of the names of known robo-signers to be distributed to homeowners or their attorneys? Or released data on how many homeowners received required remediation under the settlement? Strange behavior from the office(s) of AG’s who collected millions under the settlement with LPS, and claimed a “Win” for consumers…or maybe not so strange if they simply failed to do anything TO follow up on the CJ. So what can the average person, or potentially a class action attorney, do to see if LPS actually complied with the CJ and remediated documents BEFORE foreclosing on homeowners, as the CJ required? Below is a basic guide one can use to get started.

 

STEP #1- Identify the Foreclosure Mill Attorney

 

Attorneys in every state are identified by a unique Attorney number (see ex. below). This makes it very easy to track the cases they have handled if your state has an online database. Unfortunately for large foreclosure mills, this also makes it extremely easy to track the specific foreclosure cases their attorney’s have handled because that’s basically the only kind of cases they handled. Alternately, you can do a search by name of bank, name of trust, etc., in most state databases, but the attorney ID number seems to work best when concentrating on one firm. The example I use below is from the State of Indiana, and uses the IN public roll of attorney database, as well as its Odyssey case management system which allows the user to search non-confidential cases. Most states do provide similar such free database systems to the public. The case lists usually go back up to a decade or more.

 

(Example from Indiana website at https://courtapps.in.gov/rollofattorneys )

Indiana Roll of Attorneys

The Roll of Attorneys is the listing of all attorneys licensed to practice law in Indiana. Search for attorneys by name or attorney number. Each attorney’s record includes license status, disciplinary history, contact information, and any other names the attorney has practiced under.

Top of Form

Search for an Indiana attorney:

By Name :

Last Name (required)

First Name

Attorney Number:

  1. 99999-99

Bottom of Form

Results

Kemper , Lawrence Joseph 18029-29 Carmel IN 10-31-1994 Active In Good Standing

 

STEP #1a- Search For Cases the Firm/Attorney Handled.

 

The mortgage foreclosure cases will be marked as such, with all litigation information available when you click on the details. Once you do that, you have party names, filings, home address of the house being foreclosed, etc. So, say you are looking for all foreclosures handled by a foreclosure mill attorney from 2008-2010, or end of 2012 through 2014? Easy to sort out using a database like above, just refine your search fields.

Prepare a list of foreclosure cases filed by your subject attorney/firm. You will want to narrow it down by the relevant dates LPS & its attorneys were required to remediate documents (2008-2010), as well as looking at foreclosures instigated and completed between early to mid-2012 through end of 2013 (or in some cases later). Why? If you later find evidence of robo-signing and backdating post January 2013, this helps establish the foreclosure mill attorneys and LPS directly violated the CJ by moving ahead with a foreclosure using documents they knew violated its terms. With your list of cases, names, etc., you’re ready for Step #3.

https://public.courts.in.gov/mycase/#/vw/Search

Search Results

Attorney Search
Attorney Search
First:
Middle:
Last:
Sounds-like:
Business:
Attorney#:  18029-29
DOB:
Court:
Limit To: Civil
File Date:
Status:
  • List
  • Hide List Details Show List Details
  • Table

1 to 20 of 2449

by File Date, Descending

1 2 3 4 5

JPMorgan Chase Bank, National Association v. Glen David Johnson, Glen David Johnson, Any Unknown Occupants et al

49D07-1709-MF-034571

Court

Marion Superior Court, Civil Division 7

Case Type

MF – Mortgage Foreclosure

Filed

09/11/2017

Status

09/11/2017, Pending

Charges

Parties

JPMorgan Chase Bank, National Association, Johnson, Occupants, Flanagan DDS, IMC Credit Services, LLC, MSW Capital LLC, Unifund CCR Partners Assignee of Palisades Ac…

Attorneys

Tekulve, Kemper, Flatt, Lawrence, Matheis

STEP #2- Locate the Land Record of Interest and Assignments.

Once you have this information, it is a simple matter to locate any recorded assignments in the county recorder’s office. Luckily, this is also available online & automated for your convenience in most states……and cheaply at that!! Using the State of Indiana as an example again, they use a commercial service called Doxpop (FYI, Doxpop handles MI too). Through these services, ANYONE can search for recorded land title records (See below). Average cost to search for, pull up, and print an assignment from home or office? $1-3 per assignment, depending on if you buy a bulk search package or just do single search. You are going to be scanning for any assignment performed just prior to, or during, a foreclosure action. In some cases a corrective assignment may exist, and if so the signature should be that of the actual person authorized to sign for a bank….good to have for later.

https://www.doxpop.com/prod/in/recorder/

 

Wells County Recorded Documents are now available through Doxpop! Details here.

Welcome to Doxpop Recorded Documents

NEW! Looking for full-size preview images of documents? Try our new Unlimited Viewing service, available in participating counties. Watch a demo to learn more.

Doxpop provides access to over 16,804,357 recorded documents from 42 counties in the Doxpop Network. Our information is updated every ten minutes and is accessible 24 hours a day, 7 days a week. We are working every day to bring new counties to our Recorded Document Service.

Learn about our advanced searching options, enhanced results, document details, and document images.

You can use our recorded document search features to find documents by name, details about the document such as the date, and information about the property to which the document refers. These documents include documents deeds, mortgages, and liens. (See a more complete list of document types.) By subscribing to any Doxpop search plan you can access these features, view all details about a document, and purchase, view, and print pages directly from our website.

STEP #3- Time to Start Comparing Sig’s, Date(s), & Notary Cards Against Your Claimed Notary.

Time to start playing “Which signature(s) don’t match?” (both Attorney-in-Fact and Notary), and “Which recording dates don’t make sense?”. You will be comparing signatures of known LPS robo-signers, whose names are easily found on the web… Google “robo-signers & LPS” as a search and you will find a trove of websites listing names. In the alternative, you will find many of them listed in Lynn Szymoniak’s original qui tam lawsuit, also available on the web in PDF.

So what are you looking for?

-Signatures by “Attorneys-in-Fact” on assignments used in a foreclosure case should match one another if made by one person. They shouldn’t be unrecognizable scribble marks in one case, legible in another, non-matching in multiple instances, etc., …common-sense stuff.

-Look at the signatures of the “Notary” on the assignment. Ditto with the above- BUT FURTHER– If they are a registered notary, does their signature match the signature card on file at the registered State agency? (Available by going down in person or requesting such from that county by mail usually).

-If the notary dated the assignment on “XX-XX-XXXX” date, then the assignment would have been sent directly to the county recorder’s office to be recorded afterwards, usually 30 days to protect priority of lien. If there is an unexplained lapse in time from notary signing to recording.. 9 months..years..Why??

Question(s) for attorney’s in a FC case if they performed discovery-

a.) Did the foreclosure mill attorney ever disclose that the documents used and material parties involved in your case included LPS, or the use of the Desktop software platform?

b.) The CJ directly affected the FC mill attorneys because of LPS conduct of interfering in the relationship between FC mill attorneys & their “real” clients (banks, servicers). LPS was found to have virtually taken over the foreclosure process in retaining and directing attorneys as to what to do from 2008-2013. Query- was the attorney effectively able to relay any requests for discovery/production of documents, arbitrate loan modification meetings (required in many states), etc., with the “real”/ supposed note holder, or did LPS interfere with these activities so pervasively as to render them a nullity?

b.) Did the foreclosure mill attorney disclose to you the fact a Consent Judgment had been issued and the documents in your case might be covered by it? Did they point out a toll free number was available for you to contact and request information/lodge complaints?

Remember- it was just such evidence of forgery and backdating, attorney/client interference, etc., that landed Lynn Szymoniak $18M when she filed her qui tam lawsuit…..her suit ultimately leading to the 2013 $125M Multistate Consent Judgment with LPS. What could a good class action attorney do with mass evidence LPS & FC mill attorney’s NEVER remediated robo-signing as required or disclosed material evidence/parties in discovery?….. Love to find out!

The Terms of the 2013 Consent Judgment in Relevant Part

Definitions, section 2.2: “Covered Conduct” shall mean LPS’ practices related to mortgage default servicing, including document creation, preparation, execution, recordation, and notarization practices as they relate to Mortgage Loan Documents as well as LPS’ relationships with attorneys representing the servicers and other third parties through the Effective Date of this Judgment.

Release, section 2.7: “Nothing herein shall be construed as a waiver or release of any private rights, causes of action, or remedies of any person against the Defendants with respect to the Covered Conduct.”  (See above!)

** Important- The Below Was Required of LPS under the CJ

“LPS will undertake a review of documents executed during the period of Jan. 1, 2008 to Dec. 31, 2010 to determine what documents, if any, need to be re-executed or corrected. If LPS is authorized to make the corrections, it will do so and will make periodic reports to the AG’s Office of the status of its review and/or modification of documents.” See, http://www.mass.gov/ago/news-and-updates/press-releases/2013/2013-01-31-lps-settlement.html

Per section 3.2 of the Consent Judgment, the 48 State AG’s offices are responsible for monitoring LPS compliance with the consent judgment through January 31, 2018. LPS is required to be in compliance with not only the terms of the Consent Judgment, but other mortgage servicing agreements and judgments in force, such as the widely touted National Mortgage Settlement, and is in compliance with the servicing standards of those settlements and other applicable state or federal laws.

Through January 31, 2018, LPS will allow the 48 state AG’s access to non-privileged documents without need for a subpoena or other compulsory process.

Section 6.1 allows the 48 State AG’s the right to reopen investigations into LPS for noncompliance with the CJ.

Section 7.1 allows for the State AG’s to take action for other violations of law, and take any actions necessary to protect the health and safety of the public.

What’s in it for you?

A search of 100 assignments looking for evidence that foreclosures were completed in violation of the CJ using robo-signed or backdated documents may cost as little as $100-$200. Cost to benefit ratio wise, if you are a large class action law firm, and if you have just a 10% hit ratio of questionable documents after searching 500 documents, that’s $500-$1000 spent to get 50 potential clients. Not bad when you look at what happened with David Stern’s firm, and look at the millions of dollars collected it in class actions.

The State AG’s are in a bit of a quandry as noted above, because if mass evidence is unearthed showing a failure to remediate and correct before foreclosing on innocent homeowner in direct violation of the CJ, they will be forced to take action. This would further open up the possibility that mass actions against large foreclosure mills will be settled quickly, unless such firms want to risk being faced with the fate of the late David Stern firm. Not bad for a minimal investment, and a little legwork.

So in closing, and to reiterate, developing a large database of signatures by name, FC mill involved, and date(s) in critical to be able to demonstrate that what the AG’s were supposed to insure happened, unfortunately, did not. The proof required is no different than it was for Lynn Szymoniak back in 2011, and just as basic and generally cheap to find….The only question is whether enough defrauded homeowners, their attorneys, or a class action firm cares to dig…..

[1] *The contents of this paper are not meant as legal advice, but merely a tool to be used by those who may wish to research foreclosure cases, and potentially seek legal advice from a licensed attorney.

Listen now to the recorded The Neil Garfield Show: Setting your case up for Litigation, Modification or Settlement.

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

Log-in to listen to archived show.

This episode will discuss setting up your case for litigation, modification or settlement.  California attorney Charles Marshall will discuss settlement framework (writ large and small), and the numerous misunderstandings regarding how settlement should or even can work.

The overwhelming majority of civil cases will settle well before reaching the trial stage of a lawsuit, nationwide. Whether we’re talking about a divorce, a car accident lawsuit, or foreclosure case parties often choose to settle their case rather than leave their respective fates in the hands of an unpredictable jury. But is settlement always more beneficial?

Settlement Basics

“Settlement” is a term for formal resolution of a legal dispute without the matter being decided by a court judgment (jury verdict or judge’s ruling). Usually it means the defendant offers a certain sum of money to the plaintiff in exchange for the plaintiff’s signing a release of the defendant’s liability in connection with the underlying incident or transaction. This can happen at any point in a civil lawsuit. It can even occur before the plaintiff files a lawsuit at all, if the parties can come together a reach a fair agreement soon after the dispute arises, and both sides are motivated to do so.

Benefits of Settling a Case:

  • Expense.
  • Stress.
  • Privacy.
  • Predictability.
  • Finality.

With foreclosure lawsuits a homeowner often has a personal or profound sense of right and wrong, and decides to make an important point that impacts more than the parties in the case. For cases challenging the constitutionality of a law or some other perceived fundamental unfairness, settling also doesn’t create precedent and won’t affect public policy.

If one or both parties aren’t motivated to settle, or aren’t coming to the negotiating table with a remotely realistic offer, then resolution of the lawsuit before trial may not be possible.  This is often the case in foreclosure disputes- by the time the lender is prepared to settle, the homeowner wants vengence for the harm they have sustained (justifiably).

Please contact Attorney Charles Marshall at:

California Attorney Charles Marshall, Esq.

cmarshall@marshallestatelaw.com

Phone 619.807.2628

This program is for informational purposes only and is not legal advice.

https://www.vcita.com/v/lendinglies to schedule, leave message or make payments.

Register for Consultation here: https://live.vcita.com/site/lendinglies

“Resecuritization”

the basic thrust of the defense is to point out what is absent rather than attack what is not absent.

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.
—————-
As predicted on my blog back in 2008, we are seeing new names of Trusts emerge in foreclosure cases — involving old loans that were declared in default years ago by parties asserting they represent the alleged servicer of either a named bank or servicer or an old trust. What happened? As our sources had revealed, the alleged trusts had nothing in them and were the source of extreme liability of the Master Servicer acting as underwriter to the investors and third parties who traded in securities based upon the representation that the Trust actually owned the debts of millions of homeowners.
 *
We have not seen the agreements, but we are told, and our analysis confirms, that the old trusts were “retired” and that new trusts, also empty, are now being used wherein the paperwork for the new “Trusts” is far more complete than what we have previously seen.
 *
As far as we have determined thus far the mechanics of the change of trust name are along the following lines:
 *
  1. There is probably a purchase and sale agreement between the old trust and the new trust. Like previous documentation there are no warranties of ownership but ownership of the debts is implied.
  2. Like the old Trusts, foreclosures are brought in the name of the new trusts, using US Bank or other major institution as the “Trustee.”
  3. Investors in the old trusts are given certificates in the new trust as settlement of claims brought by investors for malfeasance in the handling of their money — namely the origination of loans instead of the acquisition of loans and the granting of loans that were far lower in quality than agreed and far higher risks than allowed for stable managed funds.
  4. This “resecuritization” process is a sham just like the original old trust. But it follows the playbook the banks have been using for over a decade. By adding another level of paper to fabricated documents based upon nonexistent transactions, it promotes the illusion of valid transactions and valid documents.
  5. Like all other trusts and hybrid situations in which trusts were involved but not named, the entire scheme is based upon a simple premise. The banks have managed information and data such that there remains a false sense of security that they are still credible sources of information — despite all evidence to the contrary. The additional layer of documents then adds to the illusion because it is counterintuitive to believe that these high level complex documents represent transactions in the real world that don’t exist.
 *
Defense strategies remain the same, however. The issues in evidence laws and rules are foundation, and hearsay.The basic defects in the bank’s credibility must be revealed even if it does not get to the point where everything is revealed. The rent-a-name practice for appointment of trustees that have no obligations or duties continues. The “apparent authority” of the servicers is based upon a trust document of an entity in which there is no asset. But the website of US Bank and others suggest that they have business records — which in actuality do not exist. Hence, the basic thrust of the defense is to point out what is absent rather than attack what is not absent.
 *
This takes strict logical analysis by the attorney representing the homeowner — an exercise that in most cases cannot be accomplished by a pro se litigant. It may be beyond the confidence of the lawyer too, but there are many people in the country who provide services that assist with the logical analysis and factual analysis — including but not limited to the team at LivingLies and LendingLies. The analyst should be well-steeped in the three classes of securitization — concept, written documents and actual practice in order to come to conclusions that are not only correct but are likely to give traction in court.
 *
While tempting, attacking the existing documentation on the basis of authenticity or validity is a rabbit hole. The only parties that actually have the proof as to the fabrication of any one particular transaction are the parties with whom you are in litigation and the parties who created them and use them as sham conduits. They resist by all means available any attempt to provide access tot he real information and the real monetary transactions which look very different from the ones portrayed in court.
 *
By making an allegation you are now required to prove what you have said by evidence that the other side simply will not give up. This is not to say that there is no value in sending a QWR (Qualified Written Request), (DVL) Debt Validation Letter, or a complaint to the state AG or the CFPB. Much of the inconsistent statements come from those responses and can be used in court. And there is also considerable value in seeking discovery even if we know that in most cases, while it should be allowed, the judge will issue protective orders or sustain objections to requests seeking the identity of the owner of the debt.
 *
The value of those apparently futile endeavors can be that at trial the foreclosing party will almost certainly rely on legal presumptions that depend upon information contained in your discovery request.
 *
OBJECTIONS AT TRIAL: This requires research and analysis of potential objections and how they should be used. While a motion in limine before trial would seem to be the better practice, the real traction seems to come at trial when the homeowner raises objections and moves to exclude evidence that relies upon data contained in discovery they refused to answer and which the court ruled was irrelevant. It is of utmost importance, however, that in order to use the discovery exchanges, you must file a motion to compel and set it for hearing and get it heard. The risk of a motion in limine is that the court is more likely to deny it and then when raised at trial in an objection will regard your objection as a second bite an apple that has already been the subject of a dispositive ruling.
 *
Cross examination of the robo-witness should be aggressive and relentless pointing to the actual lack of knowledge of the witness about anything other than the script from which he was trained to testify.

Foreclosure Action 101: What to do first when you know nothing about Foreclosure Defense

So you just received that dreaded letter in the mail announcing that a loan servicer who likely never loaned you a dime is going to foreclose on your home.  Your adrenaline rockets through your veins, you go into Fight or Flight mode and at some point you say, “Holy sh*t- what do I do now?”

Hopefully by the time you get the letter you have already done some research starting with a trip to the county record’s office (or online) and examined and purchased certified copies of the documents filed in the county records.  Typically you will find a copy of your Mortgage or Deed of Trust, followed by subsequent filings called Assignments.  The Assignments show a transfer of ownership.  There may be Notices of Default filed in the records as well as Quit Claim deeds or Probate documents.

Once you have these documents you should examine every bit of information contained on those documents or hire a company specializing Chain of Title assessments.  The Lending Lies team can conduct an affordable Chain of Title assessment to determine any breaks in title, robosigning or ownership issues that cloud title.   To date, the Lending Lies team has not found one Chain of Title without significant issues clouding title and evidence that ownership is in question.

We also highly recommend investigator Bill Paatalo of the BP Investigative Agency if the homeowner requires a more in-depth report on securitization and trust issues in addition to Chain of Title issues. For more information about Bill Paatalo please go to: www.bpinvestigativeagency.com.  He also has an excellent blog on his site with information about fraudulent foreclosures.

Please be careful who you hire to conduct a Chain of Title assessment.  There are companies out there professing to be affiliated with Neil Garfield who may attempt to lure unsuspecting homeowners into Chain of Title assessments and Quiet Title packages that are not proven.

If you decide to do the assessment yourself you will need to google every entity claiming ownership, alleged dates assigned, and evidence of robosigning.  You are looking for evidence of fraud.  Was the company in business when the assignment was made?  Are Fannie, Freddie or MERS involved?  Is the signor a known robosigner who did not work for the company they signed for?  Could the notary have actually been present when the assignment was done?  Is there evidence of the document being photoshopped?  We recommend that every homeowner facing foreclosure conduct a thorough Chain of Title assessment so that they can identify possible issues early on and be better prepared to present their case to an attorney.

In the past many homeowners would file a lawsuit hoping their attorney would find the breaks in the Chain of Title or other issues affecting ownership somewhere down the line.  The attorney and homeowner would hope to get this information in discovery- but were often stonewalled.  However, waiting until years to obtain information in discovery is not a pro-active method of attack.

For example, it is much better to know that the entity that transferred your loan was not in business, that the assignment was signed by a known robosigner, and that the trust had already been dissolved years before the assignment- or some other issue early on before filing suit.  The bank already knows what they did fraudulently and how to cover their tracks before they set foot in court.  Shouldn’t you have some idea of where the fraud exists in regards to your own loan?  By knowing information about the entities claiming ownership of your loan and their weaknesses you have more leverage from the onset.

The next thing you should do, if you haven’t already, is to send a Qualified Written Request and a Debt Validation letter to your servicer.  Examples can be found on Livinglies or if you prefer, a Lending Lies paralegal can help customize a targeted letter for mailing.  Instead of a general Qualified Written Request, the Lending Lies team will request specific information- that the servicer can’t likely provide. The benefit of this service is having Neil Garfield and his paralegal tailor the letters specifically to the findings in your Chain of Title assessment so the servicer is accountable and must answer the questions in your request.

The more information you can receive from your loan servicer, the more apt they are to make errors and provide conflicting information that can help you demonstrate the servicer’s lack of standing.  Typically the left hand doesn’t know what the right hand is doing at most servicer’s organizations.  Many homeowners who send Qualified Written requests and Debt Validation letters will often not receive the information requested but on occasion receive information that raises further issues.  The servicer’s failure to properly respond sets up the servicer for fines and damages under the Fair Debt Collection laws.

Armed with a Chain of Title Assessment, a Qualified Written Request, and Debt Validation information, a homeowner facing foreclosure will have a better understanding of what occurred over the course of their loan.  Armed with this information, it is much easier to get an attorney interested opposed to calling an attorney and stating, “my servicer is foreclosing on me illegally” without any evidence to support your claims.

At Lending Lies we routinely speak to people who have been litigating a foreclosure issue for years and still don’t know the basic facts of their case.  Before contacting an attorney to defend against foreclosure you should have the following items before proceeding:

  1. One-page Overview of Case with 3 to 5 primary issues you have targeted as wrongful
  2. Brief Timeline
  3. Targeted Qualifed Written Request results
  4. Targeted Debt Validation letter results
  5. Chain of Title results
  6. Forensic Audit if issues with Chain of Title are identified (we recommend that homeowners contact: Bill Paatalo at www.bpinvestigativeagency.com)

On average, an attorney will assess the merits of your case in less than two minutes.  If you can get his or her attention immediately you have a much better chance of the attorney agreeing to represent you.  The attorney, like the court, wants hard evidence that substantiates your claims.  The attorney will also appreciate a client who is focused, organized and doesn’t go off on tangents that waste valuable time.

In conclusion, don’t wait to start building your case after you retain an attorney.  Conduct your due-diligence on the entities claiming they own your loan, research who and when they obtained the rights, investigate the parties on your documents and all entities including the signers, trust and if those parties are licensed to conduct business in your state.  If you keep digging- you are more likely than not to find issues that support that the servicer attempting to foreclose has no standing to do so.

For consultations with Neil Garfield or paralegal assistance, please contact Lending Lies at:

(202) 838-6345 or info@lendinglies.com.

Investigator Bill Paatalo can be contacted at:   (406) 328-4075 or www.bpinvestigativeagency.com

This article is not legal advice and does not represent an attorney/client relationship but is strictly for informational purposes.

 

 

 

 

 

The Neil Garfield Show Tonight at 6pm Eastern: The Illusion of Ownership: JPMC cannot prove ownership of WaMu Loans

 

The JPMorgan Paper Chase Live at 6 pm

         The WaMu-JPMorgan Illusion Live at 6 pm

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

 

Mortgage Fraud Investigator Bill Paatalo and Southern California Attorney Charles Marshall join Attorney Neil Garfield to discuss Loan Modification Fraud, and recent foreclosure trends.

Bill Paatalo, a dogged investigator of the WaMu transfer of “loans” to JPMC has discovered recently that WaMu loans claimed to be owned by JPMorgan Chase, through the “Purchase & Assumption Agreement” with the FDIC, were in fact sold by WaMu to “Private Investor – AO1” prior to the FDIC’s Receivership.

JPMC claims to own these WaMu loans to which there is also no record of the sales and transfer histories of the loans-even within their servicing platform.  It is likely that WaMu sold and securitized the loan(s) prior to September 25, 2008.

If no schedule or inventory of WaMu loans has ever been produced, and there are no servicing records in existence from WaMu showing whether or not the loan was ever sold or securitized, could it be possible the loan(s) were sold by WaMu prior to September 25, 2008?

Paatalo states that Chase’s own witness testified that “Ao1” is a private investor, and this code does not mean “bank owned.”  Paatalo continues, “It is almost too much to believe that one of the largest banking institutions in the world, would not have tracked the loans it originated and sold into the secondary market within its servicing systems.”

Homeowners and Attorneys may want to ask Chase, who is “Private Investor AO1?”

If you have a WaMu/Chase loan or foreclosure issue, and need answers about your loan- we recommend that you contact Bill Paatalo and order a report so that you will have a better understanding of your situation.

To read the rest of Bill Paatalo’s article please go to: http://bpinvestigativeagency.com/who-is-private-investor-ao1-jpmorgan-chase-refuses-to-reveal-the-identity-of-this-investor/

 

Bill Paatalo- Oregon Private Investigator

Office: (406) 328-4075
www.bpinvestigativeagency.com

Attorney Charles T. Marshall- Serving all of California

cmarshall@marshallestatelaw.com

Phone 619.807.2628

FHFA Loan Reduction, Reduction: What’s Your Function?

PRM_Map

The Fair Housing Financing Agency has announced the details on the principle reduction program. The program is severely limited and requires that reductions be made only to owner-occupied borrowers who are 90 days or more delinquent as of March 1, 2016. The program will only apply to borrowers whose mortgage have an outstanding unpaid balance of $250k or less, and whose market-to-market loan-to-value rations exceed 115%.

Thus, the program is likely targeted towards the lower and middle class borrower who are upside down. This program clearly discriminates against the middle class borrower who purchased homes in the $250,001.00 to $417,000 loan limit range insured by the FHFA. Where is their relief? Many of these borrowers were offered homes based on inflated appraisal values.

Under the proposed rules, the FHFA said that approximately 33,000 borrowers are potentially eligible for the “final crisis-era modification program.”  The reality is that the number of eligible borrowers is actually less than that.
A new report, published Monday by the FHFA, states that the FHFA now estimates that more than 30,000 borrowers will be eligible nationwide – the number is 30,761 to be exact.  The FHFA report, states that the reduced number of eligible loans can be attributed to “the fact that the housing market is continuously evolving and may have improved in some areas.” Great excuse FHFA- by the time the program is done, Lending Lies team members predict that less than 12,000 homes will receive principle reductions based on prior results of the FSHA and GSEs.

 
Even more worrisome is attempting to predict how the FHFA and the loan servicers will use this program to ensure a default and foreclosure occurs. We predict that applications will be lost, eligible people will be foreclosed on during negotiations or turned away- and the program will end as soon as the intended public relations blitz creates the illusion that your government genuinely wants to help. We’ve seen how this type of program plays out when you get servicers administering assistance programs- the programs become a tool to engineer a default.

 
Since the program already requires homeowners to be at least 90 days past due on your loan, how many homeowners will be told to simply skip three months of mortgage payments to become eligible? All of a sudden the borrower’s options diminish quickly and the unsuspecting homeowner loses their home.
Don’t be fooled, we’ve been down this road before. Why must a homeowner fall behind 3 months on their mortgage payments? Because it will likely make it almost impossible for most families who have no savings to come up with a lump sum to cure the arrearage to stop a foreclosure sale. This is but another tactic to strip lower-middle class families of their homes and the end result will be a nation of renters who can never build any true wealth.

 
Back to the story. Where will these eligible borrowers be located? According to the FHFA report, eligible borrowers “tend to be concentrated in communities across the country that have not yet fully recovered from the foreclosure crisis, especially in states with long foreclosure timelines.”
The latest FHFA report actually sheds more light on that, showing the top ten states where the eligible borrowers are.

 
According to the FHFA report, the top ten states with the most potentially eligible borrowers are located in:
Florida – 6,260 potentially eligible borrowers
New Jersey – 6,257 potentially eligible borrowers
New York – 2,823 potentially eligible borrowers
Illinois – 2,434 potentially eligible borrowers
Ohio – 1,214 potentially eligible borrowers
Pennsylvania – 1,109 potentially eligible borrowers
Nevada – 1,032 potentially eligible borrowers
Maryland – 726 potentially eligible borrowers
Connecticut – 703 potentially eligible borrowers
Massachusetts – 682 potentially eligible borrowers

 
The FHFA report also provides more detail on the delinquency status, loan balances, and loan-to-value ratios of the eligible borrowers.

 
In Florida, for example, the 6,260 potentially eligible borrowers have an average loan balance of $156,719, an average LTV of 158%, and are an average of 1,590 days delinquent, which is nearly 4.5 years.

 
In New Jersey, the 6,257 potentially eligible borrowers have an average loan balance of $171,403, an average LTV of 163%, and are an average of 1,791 days delinquent, which is almost 5 years.
According to the FHFA, the principal reduction modification terms include capitalization of outstanding arrearages, an interest rate reduction down to the current market rate, an extension of the loan term to 40 years, and forbearance of principal and/or arrearages up to a certain amount to be converted later to forgiveness. This sounds like a pretty good option for those borrowers who are likely to lose their home.

 
However, when the government offers a plan that appears too good to be true- it usually is. Most modifications we have examined in the last year are not a good deal for the homeowner, and in the majority of cases the homeowner would be better off letting the home go back to the servicer. Typically, the homeowner will end up paying all arrearages, their payment will go up, and at the end of the 40 year term there will be a balloon payment required.

 
The process of capitalizing outstanding arrearages typically makes it impossible to modify the principal value of the home. The FHA admits that the average home in Florida is 4.5 years delinquent. The arrearage on a 200k home would be around $48,000 and with late penalties probably another $10k or more. The program doesn’t make sense because the homeowner is still going to end up in a loan where the own more than the property is worth.
This may be the reason behind the program for the FHFA. If they can get borrowers to sign new loan documents (even if they can’t afford the payments), they can “fix” all of the loans that have major title issues including robosigned and fabricated documents. This program could create the illusion that the homes that were in the home reduction program convey clear title (when they don’t and never can).

 
In theory, the federal government benefits in these ways from the home reduction program:

 
1. They create more defaults by telling people to fall behind 90 days or lost their applications. Thus creating larger arrearages that can’t be cured (or even forcing a homeowner over the $250k limit by delaying if the numbers are close).
2. They can use the program to create new loan documents to ‘fix’ title issues.
3. They can collect some of the payments before the home once again falls into default (which is likely since the borrower will have larger payments and balances amortized over 40 years).
4. With the continuing cooling real estate market, the homeowner will be underwater.
I won’t get into how the FHFA and servicers will issue reduction programs on loans they don’t own- but apparently the federal government housing agencies create the rules as they go.
At Lending Lies, we are gearing up for more calls from homeowner who lost their home while being considered for a loan reduction plan. Next year we will field calls for homeowners who accepted reduction programs that were unaffordable and resulted in the loss of their home. We hate to be skeptics, but the HAMP program actually caused more suffering and resulted in more home losses than it saved. This program, just like HAMP, sounds great on paper- but the numbers and strategy only work in a land of make-believe.

 
Eligible borrowers should expect a letter from their mortgage servicer about a principal reduction no later than Oct. 15, 2016, the FHFA said.  Caveat Emptor.

Mortgages: Weapons of Middle-Class Mass Destruction

PITCHFORK AND HOUSE

By the Lending Lies Team

http://www.zillow.com/research/foreclosures-and-wealth-inequality-12523/

Losing your home by foreclosure to a bank that used fabricated documents to foreclose is a tragedy that has tainted the American dream for millions of Americans. The process is unjust, unlawful and dehumanizing. But even years after the former homeowner has moved forward with their lives they sustain another injury they are probably not even aware of- and that is the loss of rebound gains in the market.

Oddly, homes that are foreclosed on tend to gain value back at a higher rate than properties that have not been previously foreclosed according to real estate website Zillow who conducted research on the matter.  Former owners missed out on potential profits generated by the “recovery” and therefore sustained even more financial harm. Instead, the profits went to governmental agencies, GSEs (Fannie/Freddie), hedge funds, investors and flippers who bought these properties for pennies on the dollar.

In the Miami-Dade, Broward and Palm Beach, homes that were foreclosed had a 79 percent increase in price from the market’s lowest point. The research also shows that the homes that were foreclosed upon were the homes of lower-income people and young families.

These families who were illegally foreclosed upon were thrust into an inflated renters market where they likely secured accommodations that were inferior to the living conditions of the home they lost and even less affordable. The prior owner lost their down payment, any equity and any appreciation in home value. Many of these families may never recover from the financial slaughter they suffered.

“You had a ton of appreciation for these foreclosed homes, but the [prior] homeowners weren’t getting the benefits,” said Svenja Gudell, Zillow’s chief economist. “Lower-end and foreclosed homes were bought up by investors who would transform those homes into rental properties. … Had they held onto their home in many markets, homeowners would’ve made back their original investment plus much more.” The foreclosure crisis has contributed to the massive wealth gap that has evolved since the 2008 market crash.

Even more concerning are the actions of the Veteran’s Association that guarantees the loans of United States service members who obtain VA-guaranteed mortgages. The VA is not assisting veterans who served their country to retain their homes when default threatens. In fact, the VA is known to foreclose on the homes of veterans for pennies on the dollar, evict the veteran, hold the property and then sell the property at a large profit.

Recently the Lending Lies team learned of a veteran with health issues caused by Agent Orange exposure. The VA foreclosed on his home that had a remaining balance of 7k. The VA held the property for a year and then sold the home for over 100k. The displaced veteran who had paid on his home for decades did not share in the profits the VA made from the sale of his home.

Homeowners have the potential to be damaged at three different junctions during  their loan: at closing, during default, and post-default. The homeowner is damaged at closing when they receive a table funded loan, there is no disclosure regarding WHO the true creditor is, and they are not told that they are signing a Note that is actually a security and not a mortgage. The homeowner does not receive disclosure that investors will make millions of dollars from the homeowner’s signature and is not told that he/she will carry all of the risk when the game of securitization is put into play.

A homeowner may be damaged during the term of their loan by the loan servicer who is looking for an opportunity to create a default so they can foreclose on the home. The homeowner may be given erroneous information by the servicer or may not receive service to resolve an issue that may occur during the life of the loan. The servicer may create a default by misapplying payments, inflating the balance by applying illegal fees, and other tactics to engineer a default. When a homeowner facing default contacts their loan servicer looking for assistance, the homeowner is not engaging with a servicer who is looking to find a solution.  Instead, the homeowner is dealing with an agent who is trained to find the homeowner’s Achilles heel in which to exploit and create a default.

At this point the homeowner in default will experience the Foreclosure Machine where documents disappear into ether or magically transform, bank presidents have G.E.D’s, and due process means you had your three minutes in front of a judge. The majority of homeowners caught up in this stage of foreclosure will gladly do anything to end their misery. Despite their knowledge that the servicer foreclosing has no standing- the wounded homeowner may prefer to chew off their own arm to escape the clutches of attorneys, motions, and bank intimidation.  This is the stage where the homeowner should refuse to back down and dig in their heels, but the majority flee.

After the homeowner has lost their home to an entity who had no standing to foreclose, the homeowner will suffer further economic decimation. The vultures who made millions off of the economic destruction of the American middle and lower-middle class will become their landlord. While the tenant works to make his monthly rental payment and is not building any equity, the landlord will sit back and collect the passive income while the foreclosed property appreciates at 18% plus a year.

Can there be any doubt that taking out a home mortgage from a mega-bank is not a method of middle-class mass destruction?  Caveat Emptor.

 

“Prejudice” Element of Wrongful Foreclosure

http://www.jdsupra.com/legalnews/court-of-appeal-addresses-prejudice-48045/

By Kevin Brodehl

If a property owner loses their property through a foreclosure sale initiated by someone who did not validly own the debt, has the property owner automatically suffered enough “prejudice” to pursue a claim for wrongful foreclosure?  Or does the property owner also need to show that it would have been able to avoid foreclosure by paying the debt to the true lender?

The California Supreme Court’s recent Yvanova decision (reviewed on Money and Dirt here: California Supreme Court:  Borrowers Have Standing to Allege Wrongful Foreclosure Based on Void Assignment of Note) only partially addressed the “prejudice” issue.  In Yvanova, the Supreme Court discussed prejudice, but only “in the sense of an injury sufficiently concrete and personal to provide standing,” not “as a possible element of the wrongful foreclosure tort.”  The Court held that the plaintiff in that case demonstrated sufficient prejudice — lost ownership of property in an allegedly illegal foreclosure sale — to confer standing to pursue a wrongful foreclosure claim.

A recent opinion by the California Court of Appeal (Fourth District, Division One, in San Diego) — Sciarratta v. U.S. Bank National Association — picks up the “prejudice” analysis where Yvanova left off, and addresses prejudice as an element of a wrongful foreclosure claim.

The facts: a twisted tale of note assignments

In 2005, the property owner obtained a $620,000 loan secured by real property in Riverside County.  The note and deed of trust identified the lender as Washington Mutual (WaMu).

In April 2009, JPMorgan Chase Bank (Chase), as successor in interest to WaMu, assigned the note and deed of trust to Deutsche Bank.  The trustee promptly recorded a Notice of Default, followed by a Notice of Sale.

In November 2009, Chase recorded a document assigning the note and deed of trust to Bank of America (even thought just months earlier, Chase had already assigned the note and deed of trust to Deutsche Bank — oops!).  On the same date as the assignment, Bank of America recorded a Trustee’s Deed, reflecting that Bank of America had acquired the property at a trustee’s sale in exchange for a credit bid.

In December 2009, Chase recorded a “corrective” assignment of the note and deed of trust, suggesting that the April 2009 assignment to Deutsche Bank was a mistake, and was really intended to be an assignment to Bank of America.

The property owner sued the banks and the trustee for wrongful foreclosure.

The trial court’s ruling: no prejudice; case dismissed

The banks filed a demurrer, arguing that the property owner could not allege “prejudice,” which is an essential element of a wrongful foreclosure claim.

The trial court sustained the banks’ demurrer and dismissed the case.

The property owner appealed.

The court of appeal’s opinion

The Court of Appeal reversed, holding that a property owner who loses property to a foreclosure sale initiated by someone purporting to exercise rights under a void assignment suffers enough prejudice to state a claim for wrongful foreclosure.

The court first relied on the Supreme Court’s holding in Yvanova that “only the entity currently entitled to enforce a debt may foreclose on the mortgage or deed of trust securing that debt.”  In this case, based on the clear paper trail of assignments, the entity entitled to enforce the debt was Deutsche Bank, but the entity that foreclosed was Bank of America.

Based on the complaint’s allegations, the court noted, the assignment was not merely voidable but void.  The court observed, “Chase, having assigned ‘all beneficial interest’ in [the property owner’s] notes and deed of trust to Deutsche Bank in April 2009, could not assign again the same interests to Bank of America in November 2009.”

The court concluded that a property owner “who has been foreclosed on by one with no right to do so — by those facts alone — sustains prejudice or harm sufficient to constitute a cause of action for wrongful foreclosure.”  The court added:

The critical issue is not the plaintiff’s ability to pay, but rather whether defendant’s conduct resulted in the plaintiff’s harm; i.e., a foreclosure that was wrongful because it was initiated by a person or entity having no legal right to do so; i.e. holding void title.

The court also offered policy grounds supporting its decision.  The court’s ruling would encourage “lending institutions to employ due diligence to properly document assignments and confirm who currently holds a loan.”  A contrary ruling, on the other hand, would subject property owners to unfairly losing their property in foreclosure to someone who does not even own the underlying debt, with no court oversight.

Lesson

The Sciarratta decision will make it easier for property owners to assert wrongful foreclosure claims…….

To read more please visit:

http://www.jdsupra.com/legalnews/court-of-appeal-addresses-prejudice-48045/

%d bloggers like this: