Massachusetts: Deadline To Preserve Right To Challenge Foreclosures Approaches

http://www.bankerandtradesman.com/2016/12/deadline-preserve-right-challenge-foreclosures-approaches/

By Jim Morrison

Last Friday, Antonio Ibañez – yes, that Ibañez – spoke out publicly for the first time urging homeowners who have been foreclosed-upon prior to 2014 to file paperwork at their registry to preserve their right to challenge that foreclosure for 20 years by Friday, or lose that right forever.

The bill Gov. Charlie Baker signed into law last November cures “Ibañez-like” title defects on foreclosed upon properties, so they can be legally resold and is sometimes referred to as the Ibañez Repair Law.

“This bill hasn’t fixed anything for me,” Ibañez said. “The bill is not a fix and certainly should not have my name on it.”

Grace Ross, of the Massachusetts Alliance Against Predatory Lending, said her organization is offering people who have been foreclosed on the counseling and paperwork they need to file paperwork with their registry, but they have to act quickly. Ross said filing the paperwork is simple and doesn’t mean they have to file suit, it just preserves the right to do so.

“There are 74,000 families just like Antonio’s in Massachusetts who need to know about this and their government is not telling them,” Ross said. “During the worst years of the foreclosure crisis, we had two or three years from when homeowners received notice before things really got rolling. Now they take you to court right away.”

Homeowners foreclosed-upon after 2014 are also encouraged to file the appropriate paperwork with their local registry to preserve their right to challenge the foreclosure, though they have three years from the date of the foreclosure to do so.

For more information, visit http://www.maapl.info/.

Why do we need to force the banks to accept more money in modification?

Selecting a forensic analyst or a lawyer to represent you in a mortgage dispute. You need to look at their credentials rather than listen to their sales pitch. And you need people who really believe that you can and SHOULD win. For our services and products call our customers service numbers at 520-405-1688 on the West Coast, and 954-495-9867. Or visit www.livingliesstore.com. Don’t waste your money if the people lack the credentials and experience and commitment to make things work out the way you want it. Everyone promises the world. We promise expertise and guidance on how to use it in court.

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It seems obvious. And if you are a lawyer practicing in real estate, you have probably attending CLE seminars about mortgage lending requirements and what to do when the borrower is in default or claimed to be in default. The answer is always a “workout” wherever possible. And the reason is that you get more from a workout than the proceeds from a foreclosure and all the financial requirements of ownership like maintenance, taxes, insurance and the expenses of selling, repairs etc. It really is that simple.

But Banks don’t want workouts or modifications. They only want to use the illusory promise of modification to get the borrower in so deep he sees no way out when the application is eventually denied. Why are so many trial modifications now in court because the bank denied the permanent modification after the trial modification as approved and the borrower met all the requirements including payments? why are the banks pursuing a strategy where they are guaranteed far less money than ramping up the “workout” programs. Maybe because if they did, they would be admitting that the loan was defective in the first place, the appraisal was inflated, the viability of the loan was zero, and the borrower had been tricked.

So why do the Banks need to be forced to take more money and less responsibility for the property? It seems obvious that they would want a workout rather than a foreclosure because it will end up with more money in their pockets and the whole mortgage mess behind them with a nice clean note and mortgage.

The answer can only be that the Banks oppose such efforts because the rational strategy of a true lender won’t end up with more money in THEIR pockets. And THAT can only be true if they are working off some different business model than a lender. It means by definition in a rational world, as Greenspan likes to say, that they could not possibly be the lender or working for the lender.

It can only be true if they are protecting the fees they are earning on nonperforming loans and justifying their stubborn resistance to modification and principal reduction by showing that the foreclosure was the only way out even though it wasn’t. The destruction of tens of thousands of homes in various cities shows that the net value of the foreclosure was zero even while the homeowners were applying for modifications that, if approved, would have not only saved individual homes, but entire neighborhoods.

The other reason of course is that the banks don’t own the loans and they did receive multiple payments on the loans from multiple sources. A foreclosure hides these payments.

So the practice hint is to be persistent and insistent on following the money trail. What the San Francisco study revealed as well as other similar studies and are own study here at livinglies is that the courts are rubber stamping foreclosures that are in favor of complete strangers tot he transaction. They don’t have a dime in the deal. But they are being given judicial nod that they are the creditor even though they are clearly not the creditor. This false creditor now has authority to claim the status of creditor and to buy property worth millions of dollars with a non-monetary credit bid in the amount of their claim, thus “out bidding” any conceivable competition and guaranteeing their ownership of the property, or allowing someone else to outbid them and taking the money from the sale even though everything they had done up to that point was false.

So you have these people and companies in a cloud of false claims of securitization selling the loan multiple times through insurance and other gimmicks making a ton of money assuming the identity of the investors and assuming ownership over the borrower’s identity and trading on that all for the purpose of ill-gotten gains. It is fraud, identity theft, RICO and Ponzi Schemes all rolled into the fog that comprises the false claims of securitization.

PRACTICE HINT: Test each transaction claimed to see if money exchanged hands and if so between what parties. You will find that the money transactions — that is the reality of what was going on bears no resemblance to the paper trail. The paper trail is meant to lead you down the rabbit hole. First establish what is in the paper trail, then establish what transactions actually occurred and then compare the two and show that the paper trail is a trail of lies.

THE KEY TO THIS MESS IS TO REPLACE OR SUBSTITUTE THE CURRENT SYSTEMS OF SERVICERS WITH AN ENTIRELY DIFFERENT SYSTEM OF SERVICING AND A DIFFERENT SET OF SERVICERS TO REPLACE THOSE WHO ARE BLOCKING THE DIALOGUE BETWEEN LENDERS AND BORROWERS.

Mortgage borrowers get more foreclosure protection from Mass. bank regulators
http://www.bizjournals.com/boston/news/2013/10/17/mortgage-borrowers-get-more.html

The Very Worst Thing About Foreclosures Today Is Watching Consumers That You Know Could be Helped Standing in Court Without An Attorney
http://ireport.cnn.com/docs/DOC-1050081/

 

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

Local Governments on Rampage Against Banks’ Manipulation of Credit Markets

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“When both government and the citizens start acting together, things are likely to change in a big way. There appears to be a unity of interests — the investors who thought they were buying bonds from a REMIC pool, the homeowners who thought they were buying a properly verified and underwritten loan from a pretender lender, and the local governments who were tricked into believing that their loans were viable and trustworthy based upon the gold standard of rate indexes. In many cases, the only reason for the municipal loan, was the illusion of growing demographics requiring greater infrastructure, instead of repairing the existing the infrastructure. As a result, the cities ended up with loans on unneeded products just like homeowners ended up with loans on houses that were always worth far less than the appraisal used.” — Neil F Garfield, www.livinglies.me

Editors Note: Hundreds of government agencies and local governments are on the rampage realizing that they were duped by Wall Street into buying into defective loan products. This puts them in the same class as homeowners who bought such loan products, investors who believed they were buying Mortgage Bonds to fund the loans, and dozens of other institutions who relied upon the lies told by the banks who were having a merry old time creating “trading profits” that were the direct result of stealing money and homes, and misleading the financial world on the status of the interest rates in the financial world. All loans tied to Libor (London Interbank Offered Rate), which was the gold standard,  are now in question as to whether the reset on those loans was true, correct or simply faked.

The repercussions of this will grow as the realization hits the victims of this gigantic fraud broadens into a general inquiry about most of the major practices in use — especially those in which claims of securitization were offered. It is now obvious that the deal proposed to pension funds and other investors was simply ignored by the banks who used the money to create faked trading profits, removing from the pool of investments money intended for funding loans that were properly originated and dutifully underwritten.

Cities, Counties, Homeowners and Investors are all victims of being tricked into loans that were simply unsustainable and were being manipulated to the advantage of the banks they trusted to act responsibly and who instead acted reprehensibly.

The ramifications for the mortgage and foreclosure markets could not be larger. If the banks were lying about the basics of the rate and the terms then what else did they do? As the Governor or of the Bank of England said, the business model of the banks appears to have been “lie More” rather than living up to the trust reposed in them by those who dealt with them as “customers.” Specifically, the evidence suggests that while the funding of the loan and the closing documents were coincidentally related in time, they specifically excluded any reference to each other, which means that the financial transaction as it actually occurred is undocumented and the document trail refers to financial transactions that did not involve money exchanging hands.

The natural conclusion created by the coincidence of the funding and the documents was to conclude that the two were related. But the actual instructions and wire transfers tell another story. This debunks the myth of securitization and more particularly the mortgage lien. How can the mortgage apply to a transaction described in the note that never took place and where the terms of the loan were different than what was expected by the creditors (investors, like pension and other managed funds) in the mortgage bond. The parties are different too. The wires funding the transaction are devoid of any reference to the supposed lender in the closing documents presented to borrowers. Thus you have different parties and different terms — one in the money trail, which was undocumented, and the other in the document trail which refers to transactions in which no money exchanged hands.

When the municipalities like Baltimore start digging they are going to find that manipulation of Libor was only one of several issues about which the Banks lied.

Rate Scandal Stirs Scramble for Damages

BY NATHANIEL POPPER

As unemployment climbed and tax revenue fell, the city of Baltimore laid off employees and cut services in the midst of the financial crisis. Its leaders now say the city’s troubles were aggravated by bankers’ manipulation of a key interest rate linked to hundreds of millions of dollars the city had borrowed.

Baltimore has been leading a battle in Manhattan federal court against the banks that determine the interest rate, the London interbank offered rate, or Libor, which serves as a benchmark for global borrowing and stands at the center of the latest banking scandal. Now cities, states and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California’s public pension system, are looking at whether they suffered similar losses and are weighing legal action.

Dozens of lawsuits filed by municipalities, pension funds and hedge funds have been consolidated into a few related cases against more than a dozen banks that are involved in setting Libor each day, including Bank of America, JPMorgan Chase, Deutsche Bank and Barclays. Last month, Barclays admitted to regulators that it tried to manipulate Libor before and during the financial crisis in 2008, and paid $450 million to settle the charges. It said other banks were doing the same, but none of them have been accused of wrongdoing. Libor, a measure of how much banks must pay to borrow money from one another in the short term, is set through a daily poll of the banks.

The rate influences what consumers, businesses and investors pay on a wide range of financial contracts, as varied as mortgages and interest rate swaps. Barclays has said it and other banks understated the rate during the financial crisis to make themselves look healthier to the public, rather than to make more money from clients. As regulators and lawmakers in Washington and Europe assess the depth of the Libor abuse and the failure to address it, economists and analysts are already predicting it could be one of the most expensive scandals to hit Wall Street since the financial crisis.

Governments and other investors may face many hurdles in proving damages. But Darrell Duffie, a professor of finance at Stanford, said he expected that their lawsuits alone could lead to the banks’ paying out tens of billions of dollars, echoing numbers from a recent report by analysts at Nomura Equity Research.

American municipalities have been among the first to claim losses from the supposed rate-rigging, because many of them borrow money through investment vehicles that directly derive their value from Libor. Peter Shapiro, who advises Baltimore and other cities on their use of these investments, said that “about 75 percent of major cities have contracts linked to this.”

If the banks submitted artificially low Libor rates during the financial crisis in 2008, as Barclays has admitted, it would have led cities and states to receive smaller payments from financial contracts they had entered with their banks, Mr. Shapiro said.

“Unambiguously, state and local government agencies lost money because of the manipulation of Libor,” said Mr. Shapiro, who is managing director of the Swap Financial Group and is not involved in any of the lawsuits. “The number is likely to be very, very big.”

The banks have declined to comment on the lawsuits, but their lawyers have asked for the cases to be dismissed in court filings, pointing to the many unusual factors that influenced Libor during the crisis.

The efforts to calculate potential losses are complicated by the fact that Libor is used to determine the cost of thousands of financial products around the globe each day. If Libor was artificially pushed down on a particular day, it would help people involved in some types of contracts and hurt people involved in others.

Securities lawyers say the lawsuits will not be easy to win because the investors will first have to prove that the banks successfully pushed down Libor for an extended period during the crisis, and then will have to demonstrate that it was down on the day when the bank calculated particular payments. In addition, investors may have to prove that the specific bank from which they were receiving their payment was involved in the manipulation. Before it even reaches the point of proving such subtleties, however, the banks could be compelled to settle the cases.

One of the major complaints was filed by several traders and hedge funds that entered into futures contracts that are traded through the Chicago Mercantile Exchange and that pay out based on Libor. These contracts were a popular way to protect against spikes in interest rates, but they would not have paid off as expected if Libor had been artificially lowered.

A 2010 study cited in the suit — conducted by professors at the University of California, Los Angeles and the University of Minnesota — indicated that Libor was significantly lower than it should have been throughout 2008 and was particularly skewed around the bankruptcy of Lehman Brothers.

A separate complaint filed in 2010 by the investment firm Charles Schwab asserts that some of its mutual funds, including popular ones like the Schwab Total Bond Market Fund, lost money on similar investments.

The complaints being voiced by municipalities are mostly related to their use of a popular financial contract known as an interest rate swap. States and cities generally enter into these swaps with specific banks so that they can borrow money in the bond market. They pay bondholders based on a floating interest rate — like an adjustable-rate mortgage — but end up paying their bankers a fixed rate through a swap. If Libor is artificially lowered, the municipality is stuck paying the same fixed rate, but it receives a smaller variable payment from its bank.

Even before the current controversy, some municipal activists have said that banks took advantage of the financial inexperience of municipal officials to sell them billions of dollars of interest rate swaps. Experts in municipal finance say that because of the particular way that cities and states borrow money, they are especially liable to lose out on their swaps if Libor drops.

Mr. Shapiro, who helps cities, states and companies negotiate these contracts, said that if a city had interest rate swaps on bonds worth $1 billion and Libor was artificially pushed down by 0.30 percent, which is what the lawsuits contend, that city would have lost $3 million a year. The lawsuit claims the manipulation occurred over three years. Barclays’ settlement with regulators did not specify how much the banks’ actions may have moved Libor.

In Nassau County, the comptroller, George Maragos, said in a statement that according to his own calculations, Libor manipulation may have cost the county $13 million on swaps related to $600 million of outstanding bonds.

A Massachusetts state official who spoke on the condition of anonymity because of potential future legal actions, said the state was calculating its potential losses.

“We are deeply concerned and we are carefully analyzing all of our options,” the official said.

Anne Simpson, a portfolio manager at the California Public Employees’ Retirement System — the nation’s largest pension fund — said that the fund’s officials “are sifting through the impact, but there certainly is an impact.”

In Baltimore, the city had Libor-based interest rate swaps on about $550 million of bonds, according to the city’s financial report from 2008, the central year discussed in the lawsuit. The city’s lawyers have declined to specify what they think Baltimore’s losses were.

The city solicitor, George Nilson, said that the rate manipulation claims meant that the city lost out on money when it needed it the most.

“The injury we suffered during the time we suffered it hurt more because we were challenged budgetarily,” Mr. Nilson said. “Every dollar we lost due to illegal conduct was a dollar we couldn’t pay to keep open recreation centers or to pay police officers.”


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Cities, Counties Realize They Have Common Interests With Homeowners

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One More Windfall for the Banks

Editor’s Comment:  

If it is any comfort, the chief financial officers and treasury management officers of cities and counties are starting to realize that they are victims of the banks and that most of these bankruptcies (Stockton CA for example) or near bankruptcy were completely avoidable. Their complaints are sounding more and more like the complaints of homeowners. And they are both right. Those debts should not be paid at all until the amount of the debt can be ascertained in real dollars and the identity of the actual losing party — whether they are defined as creditor or not —- can be ascertained. I don’t think any of the cities, counties or the homeowners and businesses whose debts were subject to false claims of securitization should pay anything to anyone until the governments and law enforcement figures it out. 

The federal government is the only one with the resources to go through all the data  and come up with at least an approximation of the truth of the path of the money. The Courts, Judges and Lawyers are woefully under-resourced to take this mess apart. The only reason that Too Big to Fail is believed by anyone is that nobody fully understands the consequences and actual money impact of the false cloud of derivatives created by the banks exceeding all the money in the word by a wide margin. We have let the Banks minimize the actual currency in favor of looking at a cloud of illusions created by the banks which they and only they want treated as real. We will find the same things operating on student loans where the intermediated banks actually never funded the loans but claim a guarantee from the Federal government. 

These debts should fall squarely on the banks, whether they fail or not, until we get a real accounting of the real transactions in which real money exchanged hands. And that is the mantra of my seminars for lawyers, paralegals, homeowners, city and county officials coming up at the end of this month as I travel through Phoenix, Stockton,  Anaheim etc. 

There is no possibility that  actual debt is $800 Trillion because all the money we have in the world amounts to only $70 trillion. So the loans were part of a chaotic, complex series of dots on a scatter diagram wherein all the data was an illusion except perhaps one of the hundreds of dots on each loan, bond or mortgage. And they certainly were not secured because the terms of repayment and the amount of the loan were off from the beginning as was the index from which they took data to change the so-called payments dude on loans that perhaps never existed but certainly do not exist now. 

The door that opened just a crack has been the Libor rate scandal in which the banks, led by Barclay’s, set interest rates based upon actual and perceived movement of interest rates in the markets. As in other things, these rates were as bogus, since 2008 as the Triple AAA ratings offered to investors in Mortgage-Backed Bonds and the appraisals offered to homeowners. 

City and County officials, once completely blind to the realities of the situation and skeptical of homeowner claims that the mortgages, foreclosures and auctions were rigged, are now realizing that their loans, interest rates, and terms were rigged just like homeowners’ were and that the trap they supposedly are in is an illusion just like the premises upon which Wall Street convinced them (city and County officials) that these loan products were viable and correct implementation of sound fiscal policy.

It wasn’t sound fiscal policy, they weren’t good loans and had the officials actually understood what Wall Street was doing —- creating false demands for services and infrastructure as well as complex financial products that were doomed from the start, they would never have gone ahead with these bonds or loans. Now the whole municipal market is as screwed up as the mortgage and housing markets and we know the banks are to blame because they have already admitted everything necessary to blame them. 

Besides prosecuting claims against the banks for civil and criminal penalties, everyone needs to contemplate the consequences of the status quo and whether they want to change it. One such game changer is eminent domain takeovers of  those toxic mortgages that “seemed right at the time.” But more than that, the cities and counties must look to experts who understand the derivative market (as well as anyone can) and realize that their debt, like everyone else’s debt is an illusion created in the cloud of credit derivatives now estimated at $800 trillion while the total amount of real credit and currency is only $70 trillion. 

Like Homeowners, they must realize that while they borrowed the money, the loan or liability created by the loan or bond was an illusion already paid in full at the time they incurred the obligation. That seems impossible but so does the news on these subjects as one digs deeper and deeper. The banks collected up all the money made under these circumstances and gave their people bonuses amounting to 50% of the profit of each financial institution. Inside that “profit”were trading profits claims by trading fake paper claimed to be owned by the banks while the paper was in the cloud of derivatives that is 10-12 times all the money in the world. 

That debt has long since been paid in full. The only question remaining is whether we can identify the actual people who have lost actual money and what we are going to do for them. But paying the banks on the loan or bonds is certainly not one of the alternatives that should be considered because, like the bailout, it just gives them one more windfall.

Rate Scandal Stirs Scramble for Damages

As unemployment climbed and tax revenue fell, the city of Baltimore laid off employees and cut services in the midst of the financial crisis. Its leaders now say the city’s troubles were aggravated by bankers’ manipulation of a key interest rate linked to hundreds of millions of dollars the city had borrowed.

Baltimore has been leading a battle in Manhattan federal court against the banks that determine the interest rate, the London interbank offered rate, or Libor, which serves as a benchmark for global borrowing and stands at the center of the latest banking scandal. Now cities, states and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California’s public pension system, are looking at whether they suffered similar losses and are weighing legal action.

Dozens of lawsuits filed by municipalities, pension funds and hedge funds have been consolidated into a few related cases against more than a dozen banks that are involved in setting Libor each day, including Bank of America, JPMorgan Chase, Deutsche Bank and Barclays. Last month, Barclays admitted to regulators that it tried to manipulate Libor before and during the financial crisis in 2008, and paid $450 million to settle the charges. It said other banks were doing the same, but none of them have been accused of wrongdoing.

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Mass Supremes Declare Note and Mortgage Must Be Owned by Same Party

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We disagree that § 14 is unambiguous. The section is one in a set of provisions governing mortgage foreclosures by sale, and that set in turn is one component of a chapter of the General Laws devoted generally to the topic of foreclosure and redemption of mortgages. The term “mortgagee” appears in several of these statutes, and its use reflects a legislative understanding or assumption that the “mortgagee” referred to also is the holder of the mortgage note.

Editor’s Analysis:  Hat tip to stopforeclosurefraud.com. And a special hat tip to Fr. Emmanuel Lemelson, who is a Greek orthodox Priest, and author of the article below. I add the editorial comments of the blog site because they are exactly on point.

First, let’s note that the Court tried to limit the effect of its ruling to future foreclosure actions and possibly those already in process. But the attempt fails because of their acknowledgment that foreclosure is not a single event but rather a process in which several elements must be present to conclude the matter. That process includes:

  1. Declaring a default and demanding a payment that is plainly wrong after taking into account the financial transactions of the Master Servicer and thus the one true creditor. As a fraud upon the court, this opens the door to going back retroactively and attacking the notice.
  2. Commencing foreclosure proceedings. Just because you are allowed to initiate a foreclosure by court order (Motion to Lift Stay) or appellate decision, doesn’t make you a creditor who can submit a credit bid at auction.his is the Achilles heal of the 5 million preceding foreclosures and all of the ones planned for the future.
  3. The court clearly states that the statutes and case law allowing the initiation of foreclosure proceedings are restricted by other statutes and legislative assumptions. The requirement of holding both the note and mortgage as owner is phrased in terms of redemption; but the logic also applies to the credit bid submitted in lieu of a cash bid at the sham auction of the property.
  4. A credit bid by definition can only be submitted and accepted if it comes from the secured creditor in the transaction that originated the paperwork giving rise to all the false claims of securitization and assignments. Thus a bid received by a party other than the secured creditor listed on the paperwork is no bid at all. We call that lack of consideration. hence the auctioneer had no choice but to ignore the “credit bid” and move on to cash bids, which is why I tell people to go to their auctions and make a bid. They should also register an objection in writing that the auction is unauthorized and fraudulent, and deny the debt, obligation, note, mortgage, default etc. If there was no cash bid, then the property is still owned by the homeowner, the deed in foreclosure should be set aside, and this new decision might apply to renewal of foreclosure proceedings.
  5. In Bankruptcy the Motion to Lift stay need only be supported by some colorable right to proceed in foreclosure. From now on unless the party can establish that it has possession and ownership of the note, they have no right to get relief from automatic stay because they have no right to submit a credit bid.
  6. The reference to redemption raises interesting issues. While the court waffled and more or less came down on the side of the banks as to prior completed foreclosures, there is still an attack left standing under the old law and the new law. How can you redeem, modify mediate or even litigate where the true creditor’s identity is being intentionally withheld from the borrower and the court? The right of redemption thus becomes a doorway to reopen the title question. If accompanied by valid causes of action for fraudulent and predatory lending, slander of title etc. the redemption price cold be reduced to zero or less — giving the homeowner both the title and possession of his home plus a monetary award.
  7. If the auction was conducted improperly and the deed issued without consideration then it follows that the eviction must be overturned as well.
  8. Hence, CAVEAT EMPTOR to those looking for bargain homes where the home is alleged to be owned as REO property or the property is being subjected to a short sale where the “prior” fraudulent mortgage is paid off to a stranger to the transaction who issues an invalid release and satisfaction.
  9. The main point is that Massachusetts foreclosures are now likely to come to a dead stop, which will have rippling effect throughout the world of mortgages, foreclosure and finance. This in turn will reveal that the assets carried on the books of the mega banks are fictitious. As those facts are revealed, BOA and Citi, as well as other banks are going to take another brutal hit on their credit ratings — enough to finish off BOA and Citi and maybe one or two others.

Watch later for our article on warnings to those purchasing US properties investment or retirement. You might well be the victim of another scam perpetrated by Wall Street.

Henrietta Eaton and the Boston Foreclosure Party

By Fr. Emmanuel Lemelson

To read entire article go to:

Henrietta Eaton and the Boston Foreclosure Party


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MASSACHUSETTS ESSEX RECORDER SAYS IT IS IMPOSSIBLE TO DETERMINE WHO OWNS THE LOAN

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“They are Filing Fraudulent Documents to Take the Homes across the U.S.”

26,000 DEFECTIVE TITLE CHAINS ASSOCIATED WITH FORECLOSURES IN ONE COUNTY

see ESSEX COUNTY RECORDER ON MSNBC

Watch this short video to get the whole problem in a nutshell. Title has been corrupted throughout the country, homes have been taken with fraudulent documents (not my words, but official statements from recorder offices around the country), fraud was committed against investors, homeowners and the taxpayers.

Homeowners, knowing they had not made a payment that was “required” under the promissory note they signed, have walked from their homes without a fight or have lost the fight despite the fact that unknown to them, the payment was not due and there was no default. Lawyers who concede the default may be committing malpractice.

This is not just about the paperwork. It’s about the money and the lie we are living about who is losing money and who is making money at whose expense. This should not be fought out on the internet — it should be fought in the courtroom with real evidence and the Judges need to start hearing that evidence and judging it objectively without any assumptions arising from the “default” of the borrower.

Wherever you look there is fraud and the Banks are about to give large bonuses to their executives. Why not? They certainly did well by the bank didn’t they? Well, no, not really. despite Federal Law making it a crime for the top executives to sign a statement that they have adequate internal control and that the controls were working and therefore the statements are true, those statements are NOT true and they knew it.

So the executives are getting bonuses for committing fraud on their own shareholders too. When will someone actually pick up the ball and run with it?

“This is disgraceful. Somebody has to stand up for the little guy”

So here is a little primer on why this is all happening like this. The fact is that the mortgages are probably invalid in most instances in the sense that they do not perfect a lien against the property. This is because of the way the securitization was set up and because of the way securitization was practiced (two different things, which is why you need the COMBO, Loan level accounting, etc.). At the nub of this crisis is the fact that third parties who are not on the mortgage, not on the note and had nothing to do with the funding of the loan are  foreclosing on these invalid mortgages and even if the mortgages were valid, these third parties have no right to enforce them. The reason is that there has been no sale of the loan. Even if the the third party has a potential cause of action against the homeowner for money, they still have no right to foreclose because the debt is either unsecured or not secured to the third party bringing the foreclosure.

What does all that legalese mean? It means that people without a lien are taking homes without benefit of due process, a money judgment where the actual money is counted — all of it — and normal enforcement procedures of a money judgment. The people doing this have no chance of success if they are required to prove the case that they lost money. But they are succeeding because they are not being required to show it in most foreclosure proceedings. They are gaming the system with presumptions instead of facts.

MA Fed Judge: Non-Payment Doesn’t Make Homeowner an Outlaw Without RIghts

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EDITOR’S NOTE: A STEP FORWARD AND A STEP BACKWARD. THE JUDGE ALLOWED THE FORECLOSURE TO PROCEED DESPITE NUMEROUS SHORTCOMINGS IN THE PROCESS. Bu the Court’s analysis and conclusions on the issues leading up to its ruling are educational, to say the least and contain valuable pieces of information that can be used in other jurisdictions.

“It is clear … that Culhane is substantially behind in paying her mortgage [EDITOR”S NOTE: The assumption that there is a mortgage to pay and that the balance is what is claimed is not challenged by the homeowner] and appears unable to remediate her default. This, however does not render her an outlaw, subject to having her home seized by whatever bank or loan servicer may first claim to it.”

“Without a claim to the underlying debt, MERS …cannot exercise the power of sale regardless of the language in the mortgage contract giving it this power. That the mortgagor consented to this contractual language does not operate as a waiver of the law’s protection against foreclosure by the wrong entity.”

“an effort to foreclose by an entity lacking ‘jurisdiction and authority’ to carry out a foreclosure — i.e., not holding the mortgage at the time of notice and sale — is void.”

“MERS does not input any of the information in its registry and makes no representations or warranties regarding its accuracy or reliability.”

“MERS’s position that it can be both mortgagee and an agent of the mortgagee is absurd, at best…. MERS readily concedes that it doels not own mortgage loans and “has no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage terms” [Editor’s note: This will come as a surprise to those Judges who allowed mortgages to be foreclosed in the name of MERS and to those holding ‘Naked title” to such property which still is vested in the homeowner who was foreclosed.]

SEE CULHANE MA CASE DECISION AGAINST MERS

Culhane v Aurora Loan Services of Nebraska

ARTICLE FROM LEGALBISCUIT.WORDPRESS.COM

Massachusetts District Court Judge Young issued an order ruling in favor of Aurora Loan Services when Aurora filed for Summary Judgment.

A copy of the 59 page order can be found at this link.  The decision is full of commentary about Mortgage Electronic Registration System (MERS).

If you do not want to read the 59 page order, then Bloomberg Business Week wrote a quick synopsis of the decision.  I have included an excerpt from Bloomberg Business Week article below.  The full write up can be found on this page.

MERS Foreclosures Held Valid under Massachusetts Law

“The Mortgage Electronic Registration System, known as MERS, complies with Massachusetts law and allows mortgages to be foreclosed assuming several simple conditions are met, U.S. District Judge William G. Young in Boston ruled on Nov. 28 by handing down a 59-page opinion. Young characterized MERS as the “Wikipedia of land registration systems.”

Near the end of the opinion, Young wrote a six-page, single-spaced footnote saying that the result may have been different were the case in state court where the judges have greater ability to modify state judge-made law in response to novel factual issues.

Before foreclosure was initiated, the mortgage note was assigned to a bank serving as trustee holding securitized mortgages. The mortgage had been assigned by MERS to the servicer for the bank, as trustee.

Young interpreted Massachusetts law as requiring the party foreclosing to be the holder of the mortgage and also to own the mortgage note or be the servicer for the noteholder.

In the case before him, the servicer was wearing both hats and thus was entitled to foreclose, Young ruled. Young declined to follow several Massachusetts cases holding that the holder of the mortgage and note need not be the same.

Young described in detail how individuals not associated with MERS can be deputized as officers of MERS authorized to assign mortgages and mortgage notes. Young said he was “deeply troubled that, with little or no oversight, individuals without any tie to or knowledge of the company on whose behalf they are acting may assign mortgages – that is, they may transfer legal title to someone else’s home.”

Young’s decision may not hold in states with different real estate laws.

In a case earlier this year called Veal v. American Home Mortgage Servicing Inc., the Bankruptcy Appellate Panel for the 9th Circuit denied foreclosure when the holder of the mortgage couldn’t prove it was also the owner of the mortgage note. To read about the Veal case, click here for the June 14 Bloomberg bankruptcy report.

The Massachusetts case is Culhane v. Aurora Loan Services of Nebraska, 11-11098, U.S. District Court, District of Massachusetts (Boston).”

 

DELAWARE TO MERS: NOT IN OUR STATE!

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Delaware sues MERS, claims mortgage deception

Posted on Stop Foreclosure Fraud

Posted on27 October 2011.

Delaware sues MERS, claims mortgage deceptionSome saw this coming in the last few weeks. Now all HELL is about to Break Loose.

This is one of the States I mentioned MERS has to watch…why? Because the “Co.” originated here & under Laws of Delaware…following? [see below].

Also look at the date this TM patent below was signed 3-4 years after MERS’ 1999 date via VP W. Hultman’s secretary Kathy McKnight [PDF link to depo pages 29-39].

New York…next!

Delaware Online-

Delaware joined what is becoming a growing legal battle against the mortgage industry today, charging in a Chancery Court suit that consumers facing foreclosure were purposely misled and deceived by the company that supposedly kept track of their loans’ ownership.

By operating a shadowy and frequently inaccurate private database that obscured the mortgages’ true owners, Merscorp made it difficult for hundreds of Delaware homeowners to fight foreclosure actions in court or negotiate new terms on their loans, the suit filed by the Attorney General’s Office said.

[DELAWARE ONLINE]

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ELIZABETH WARREN: DRIVING TOWARD U.S. SENATE

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EDITOR’S NOTE: Republicans may soon wish for the days when Warren was going to run the new agency to police financial institutions in their dealings with consumers. They now have a powerful, well-liked and respected candidate who is most likely going to be the next senator from Massachusetts with impeccable credentials for the job. She will enter the Senate like Hillary did — a junior senator but one with more political clout than any 10 senior members combined.

But the fact that she is willing to enter the toxic arena of political campaigning is testament to a new era in American politics. We have all felt for a long time that anyone who would want to run for office is probably someone we don’t want to win. And we have all felt the nagging feeling that the real people who would really represent the people won’t do it because they don’t feel they could make it, and more importantly, don’t feel they will make a difference if they do make it.

Elizabeth Warren is not just running for Senator. She is making a statement that all Americans should hear. She is saying that if you want to make a difference, now is the time to put your time and effort where your mouth is. She is saying she doesn’t need the job, but she wants it because of her desire to serve the public and the nation. Remember when that was true for most candidates, once upon a time?

The Occupy Wall Street movement touches the same nerve. And it is my hope that it spawns a political movement that actually turns the tide. People who are at those rallies and protests should be asking themselves whether they could make a go of it in running for public office on local, state or federal levels. They should be asking themselves and people they know to run for office and beat the establishment hacks. Utopia is not just around the corner or even the next millennium. But we can change the course of this ship we call America and restore the ideals as goals, call upon the better nature of our neighbors to do what is right, and energize the public into a coherent whole that is unified back on point — America the Beautiful.

Elizabeth Warren’s Appeal

For a few years now, politicians straining against all of the antigovernment demagogy have been searching for a way to energize public interest and remind voters of the essential government services and protections they rely on and all too often take for granted.

President Obama has struggled to find that language, only recently beginning to draw a clear contrast between his goal to revive the economy and put Americans back to work and the stagnation that is the inevitable result of the Republicans’ antitax, antispending policies.

While most other Democrats are afraid to talk about the need for higher taxes and are running away from the problem, Elizabeth Warren, the leading Democratic candidate for a Senate seat in Massachusetts, has engaged the fight and is beginning to rally supporters.

Ms. Warren talks about the nation’s growing income inequality in a way that channels the force of the Occupy Wall Street movement but makes it palatable and understandable to a far wider swath of voters. She is provocative and assertive in her critique of corporate power and the well-paid lobbyists who protect it in Washington, and eloquent in her defense of an eroding middle class.

It is an informed and measured populism, and it helps explain why she immediately became the leading Democratic contender in the race to challenge Senator Scott Brown, the Republican who is up for re-election next year.

Ms. Warren, a law professor at Harvard, helped to design the new Consumer Financial Protection Bureau. Because of her fierce advocacy on behalf of consumers, Senate Republicans and the financial industry made clear they would never allow her to run it.

She is a remarkably eloquent and appealing Senate candidate. “Washington is well wired for big corporations that can hire armies of lobbyists,” she said last month, soon after joining the race. “But it’s not working very well for middle-class families, and that’s what I care about.”

She is both knowledgeable and accessible when she explains the destructive credit-swap and subprime mortgage games that created the financial crisis. She draws a detailed map back to the early deregulation of the 1980s that began to rip the nation’s economic fabric — the same deregulatory fervor the Republicans are preaching today.

Her larger appeal, though, comes from her ability to shred Republican arguments that rebalancing the tax burden constitutes class warfare. In a living-room speech that went viral on YouTube last month, she pointed out that people in this country don’t get rich entirely by themselves — everyone benefits from roads, public safety agencies and an education system paid for by taxes. And those who have benefited the most, she says, need to give back more.

“You built a factory and it turned into something terrific or a great idea — God bless!” she said. “Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

Democrats should not be cowed by conservative taunts that the speech advocated “collectivism,” and use this argument to push back against the Republicans’ refusal to raise the taxes of people who make more than a million dollars a year — sometimes far more. Senate Democratic leaders say they plan to employ poll-tested phrases like “Tea Party economics” and “Tea Party gridlock” in their campaign for a jobs bill and beyond. They would be better off listening to Elizabeth Warren.

CAL. AG DROPS OUT OF TALKS WITH BANKS: AMNESTY OFF THE TABLE

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EDITOR’S NOTE: California has approximately a 1/3 share of all foreclosures. So Harris’ decision to drop out of the talks is a huge blow to the mega banks who were banking (pardon the pun) on using it to get immunity from prosecution. The answer is no, you will be held accountable for what you did, just like anyone else. As I have stated before when the other AG’s dropped out of the talks (Arizona, Nevada et al), this growing trend is getting real traction as those in politics have discovered an important nuance in the minds of voters: they may have differing opinions on what should be done about foreclosures but they all hate these monolithic banks who are siphoning off the lifeblood of our society. And there is nothing like hate to drive voting.

This is a process, not an event. We are at the end of the 4th inning in a 9-inning game that may go into overtime. The effects of the mortgage mess created by the banks are being felt at the dinner table of just about every citizen in the country. The politics here is creating a huge paradox and irony — the largest source of campaign donations has turned into a pariah with whom association will be as deadly at the polls as organized crime.

The fact that so many attorneys general of so many states are putting distance between themselves and the banks means a lot. It means that the banks are in serious danger of indictment and conviction on criminal charges for fraud, forgery, perjury and potentially many other crimes.

IDENTITY THEFT: One crime that is being investigated, which I have long felt was a major element of the securitization scam for the “securitization that never happened” is the theft of identities. By signing onto what appeared to be mortgage documents, borrowers were in fact becoming issuers or pawns in the issuance of fraudulent securities to investors. Those with high credit scores were especially valued for the “cover” they provided in the upper tranches of the CDO’s that were “sold” to investors. An 800 credit score could be used to get a AAA  rating from the rating agencies who were themselves paid off to provide additional cover.

But it all comes down to the use of people’s identities as “borrowers” when in fact there was no “Lending” going on. What was going on was “pretend lending” that had all the outward manifestations of a loan but none of the substance. Yes money exchanged hands, but the real parties never met and never signed papers with each other. In my opinion, the proof of identity theft will put the borrowers in a superior position to that of the investors in suits against the investment bankers.

NO UNDERWRITING=NO LOAN: There was no underwriting committee, there was no underwriting, there was no review of the appraisal, there was no confirmation of the borrower’s income and there was no decision about the risk and viability of the so-called loan, because it wasn’t about that. The risk was already eliminated when they sold the bogus mortgage bonds to investors and thus saddled pension funds with the entire risk of loss on empty “mortgage backed pools.” So if the loan wasn’t paid, the players at ground level had no risk. Their only incentive was to get the signature of the borrower. That is what they were paid for — not to produce quality loans, but to produce signatures.

Little did we know, the more loans that defaulted, the more money the banks made — but they were able to mask the gains with apparent losses as an excuse to extract emergency money from the US Treasury using taxpayer dollars without accounting for the “loss” or what they did with the money. Meanwhile the gains were safely parked off shore in “off-balance sheet” transaction accounts.

The question that has not yet been asked, but will be asked as prosecutors and civil litigators drill down into these deals is who controls that off-shore money? My math is telling me that some $2.6 trillion was siphoned off (second level — hidden — yield spread premium) the investors money before the balance was used to fund “loans.”

When all is said and done, those loans will be seen for what they really were — part of the issuance of unregistered fraudulent securities. And you’ll see that the investors didn’t get any more paperwork than the borrowers did as to what was really going on. The banks want us to focus on the the paperwork when in fact it is the actual transactions involving money that we should be following. The paperwork is a ruse. It is faked.

NOTE TO LAW ENFORCEMENT: FOLLOW THE MONEY. IT WILL LEAD YOU TO THE TRUTH AND THE PERPETRATORS. YOUR EFFORTS WILL BE REWARDED.

California AG Harris Exits Multistate Talks
in News > Mortgage Servicing
by MortgageOrb.com on Monday 03 October 2011
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The multistate attorneys general group working toward a foreclosure settlement with the nation’s biggest banks suffered a blow Friday, when California’s Kamala Harris announced her departure from negotiations.

Harris notified Iowa Attorney General Tom Miller and U.S. Associate Attorney General Thomas Perrelli of her decision in a letter that was obtained and published by the New York Times Friday. According to the letter, Harris is exiting the talks because she opposes the broad scope of the settlement terms under discussion.

“Last week, I went to Washington, D.C., in hopes of moving our discussions forward,” Harris wrote. “But it became clear to me that California was being asked for a broader release of claims than we can accept and to excuse conduct that has not been adequately investigated.”

“[T]his not the deal California homeowners have been waiting for,” Harris adds one line later.

Harris, who earlier this year launched a mortgage fraud task force, says she will continue investigating mortgage practices – including banks’ bubble-era securitization activities – independent of the multistate group.

“I am committed to doing as thorough an investigation as is needed – and to taking the time that is necessary – to set the stage for achieving appropriate accountability for misconduct,” she wrote.

Harris also told Miller and Perrelli that she intends to advocate for legislation and regulations that increase transparency in the mortgage markets and “eliminate incentives to disregard borrowers’ rights in foreclosure.”

Harris’ departure is considered significant given the high number of distressed loans in California. In August, approximately one in every 226 housing units in the state had a foreclosure filing of some kind, according to RealtyTrac data.

Richard Zombeck: Mass Register John O’Brien’s Presentation Draws Crowd of Recorders in Atlantic City

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“I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset — their homes. This is disgusting, and this is criminal,” O’Brien said.

Mass Register John O’Brien’s Presentation Draws Crowd of Recorders in Atlantic City

07/ 5/11 05:06 PM ET

Registers, registrars and recorders from across the country gathered in Atlantic City on Tuesday for the Annual Conference of The International Association of Clerks, Recorders, Election Officials and Treasurers (IACREOT).

Several of those attending made the trip specifically to see Massachusetts Register John O’Brien’s presentation on his findings of massive fraud he and Marie McDonnell of McDonnell Property Analytics, uncovered at the Massachusetts Southern Essex County Registry of Deeds

According to O’Brien, McDonnell discovered that 75 percent of the assignments in the registry are fraudulent.

The audit examined assignments of mortgage recorded in the Essex Southern District Registry of Deeds issued to and from JPMorgan Chase Bank, Wells Fargo Bank, and Bank of America during 2010. In total, 565 assignments related to 473 unique mortgages were analyzed.

McDonnell’s Report includes the following key findings:

  • Only 16% of assignments of mortgage are valid
  • 75% of assignments of mortgage are invalid.
  • 9% of assignments of mortgage are questionable
  • 27% of the invalid assignments are fraudulent, 35% are “robo-signed” and 10% violate the Massachusetts Mortgage Fraud Statute.
  • The identity of financial institutions that are current owners of the mortgages could only be determined for 287 out of 473 (60%)
  • There are 683 missing assignments for the 287 traced mortgages, representing approximately180,000 in lost recording fees per 1,000 mortgages whose current ownership can be traced.

You can Download the PDF of the report at http://www.homepreservationnetwork.com/cat_view/132-press-releases-and-memos or request a copy at www.mcdonnellanalytics.com

“My registry is a crime scene as evidenced by this forensic examination,” O’Brien said. “This evidence has made it clear to me that the only way we can ever determine the total economic loss and the amount damage done to the taxpayers is by conducting a full forensic audit of all registry of deeds in Massachusetts. I suspect that at the end of the day we are going to find that the taxpayers have been bilked in this state alone of over 400 million dollars not including the accrued interest plus costs and penalties. ”

After the presentation O’Brien was inundated by nearly 150 recorders asking questions and wanting to conduct investigations of their own.

“I’m a hard person to please,” said Kevin Harvey, O’Brien’s first Assistant. “This was nothing short of extraordinary.”

Jeff Thigpen, the register of deeds for Guilford County, North Carolina is another early trail blazer in this effort. While he did not attend the conference, I spoke with him on Wednesday.

“What [O’Brien] is pointing out in a fundamental way is that the assignments are fraudulent and people need to look at the findings. It goes to the heart of where we are in all this, Thigpen said, “These institutions were once transparent and trusted, we now have a system that stacks the deck in favor of the financial services industry.”

The report, along with the overwhelming response to it, comes in the midst of settlement talks with banks by the 50 attorney’s general. A settlement that to many homeowner advocates is unacceptable and premature based on how little is actually known about the overall depth and impact of the fraud.

New York Attorney General Eric Schneiderman is expected to lead opposition to what he called a “quick, cheap settlement” of the 50-state investigation into foreclosure practices.

Schneiderman launched his own investigation in April and has found the problem is much deeper. He said he was “stunned” to find the multi-state probe so lacking that no documents or witness depositions had been obtained.

“We have no leverage,” Schneiderman said in an interview with the Democrat and Chronicle.

O’Brien’s report could represent the catalyst to gaining that leverage.

Earlier this month O’Brien vowed not to record fraudulent documents, so the banks started submitting replacement documents, including five from Bank of America, all with new signature and notaries. An obvious and sloppy whitewash of the documents O’Brien initially refused.

“These lenders chose not to sign my affidavit, but rather to submit completely new documents,” O’Brien said. “I believe the Bank’s actions speak louder than words and show their consciousness of guilt.”

O’Brien also told homeowners in his district to check the records at his website to see if their home mortgage documentation has been robo-signed. He’s facilitating consumer protection complaints through the Massachusetts AG. He has provided letters that homeowners can print out and send to their servicers, demanding their full chain of title pursuant to federal law.

In an article today in the Boston Herald Edward Bloom of the Massachusetts Real Estate Bar Association said it’s not clear that robo-signed documents are invalid — or that O’Brien can legally reject them.

“Mr. O’Brien is grinding the real estate business to a halt and he doesn’t have any right to do that,” Bloom said.

But according to Nantucket attorney Jamie Ranney, who points out in a 15 page memo citing Massachusetts law, O’Brien not only has every right to refuse fraudulent assignments, he has a duty to his constituents to do so.

It is without question that a Register of Deeds has an important and fiduciary relationship and responsibility — especially in the Commonwealth where his position is elected — to all of his constituents, as well as to the public at large, all of whom rely and who should be able to rely on the Register’s efforts, supervision, and oversight in assuring, maintaining and promoting the integrity, transparency, accuracy, and consistency of a County’s land records.The Register’s work and supervision of his registry most often revolves around tasks and responsibilities that are generally ministerial in nature. The Register is typically concerned with the daily task of recording of legal document(s) and/or instrument(s) affecting real property where such document(s) and/or instrument(s) are properly presented to the registry for recording on the public land records.

However, the Register’s fiduciary duty goes well beyond these usual ministerial acts in circumstances where the Register has actual knowledge or a subjective good-faith belief/basis for believing that document(s) and/or instrument(s) being presented for recording or registration in the registry for which he has responsibility are fraudulent or otherwise not executed or acknowledged under applicable law. In such cases the Register may lawfully refuse to record such document(s) and/or instrument(s).

O’Brien is calling on the Massachusetts Attorney General to look into his finding and many of the attendees at last weeks conference are planning to do the same.

In a press release Wednesday, O’Brien said:

Once again I am asking Attorney General Martha Coakley and the other state Attorney’s General to follow the lead of New York Attorney General Eric Schneiderman and stop any settlement talks with the banks. The results of this report are only for my registry, but I can assure you that this type of criminal fraud is rampant across the nation. This leaves me to question why anyone would consider settling with these banks until we know the full extent of the damage that they have caused to the homeowners chain of title across this country and the amount of money they have bilked the taxpayers for their failure to pay recording fees.

Fortunately, as Georgetown Law Professor Adam Levetin points out in a recent piece at Credit Slips Massachusetts AG Martha Coakley has no problem going after banks and mortgage servicers. In fact Levetin says, “These settlements have received very little notice in the press, but I think they provide a real template for future AG settlements and are worth examining.”

As with any settlement, one has to be a bit a skeptical when multi-billion dollar industries are willing to part with substantial chunks of change. And since the settlement with the AGs looks like it would release lenders from future claims and hinder law suits on the part of the individual states, O’ Brien’s and Thigpen’s efforts in raising the awareness of this to the other recorders across the country couldn’t come at a better time.

Much like the $8.5 billion settlement with investors Bank of America is willing to part with that doesn’t really settle anything, whatever amount they’re willing to pay the AGs doesn’t look like it’s going to come near what’s really owed to the counties, states, and certainly not to the American people.

“I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset — their homes. This is disgusting, and this is criminal,” O’Brien said.

Join us at www.homepreservationnetwork.com – Homeowners, attorneys, advocates and foreclosure experts working together

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EPIDEMIC OF FRAUD: 75% OF ALL ASSIGNMENTS ARE INVALID

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 3 MILLION FORECLOSURES VOID

Southern Essex Registry of Deeds Audit Reveals That 75% of Assignments of Mortgage Are Invalid; O’Brien Says Banks Responsible for an Epidemic of Fraud. Once again urges Attorney’s General to stop Bank settlement talks

Posted on29 June 2011.

Southern Essex Registry of Deeds Audit Reveals That 75% of Assignments of Mortgage Are Invalid; O’Brien Says Banks Responsible for an Epidemic of Fraud.  Once again urges Attorney’s General to stop Bank settlement talks

Commonwealth of Massachusetts

Southern Essex District Registry of Deeds
Shetland Park
45 Congress Street
Suite 4100
Salem, Massachusetts 01970

JOHN L. O’BRIEN, JR.
Register of Deeds
Phone:
978-542-1704
Fax:
978-542-1706
website:
www.salemdeeds.com

NEWS FOR IMMEDIATE RELEASE
Salem, MA
June 29th, 2011

Contact:
Kevin Harvey, 1st Assistant Register
978-542-1724
kevin.harvey@sec.state.ma.us

Marie McDonnell, President, McDonnell Property Analytics, Inc.
508-694-6866
marie@mcdonnellanalytics.com

Yesterday at the Annual Conference of The International Association of Clerks, Recorders, Election Officials and Treasurers (IACREOT), Register John O’Brien revealed the results of an independent audit of his registry.  The audit, which is released as a legal affidavit was performed by McDonnell Property Analytics, examined assignments of mortgage recorded in the Essex Southern District Registry of Deeds issued to and from JPMorgan Chase Bank, Wells Fargo Bank, and Bank of America during 2010.  In total, 565 assignments related to 473 unique mortgages were analyzed.

McDonnell’s Report includes the following key findings:

–          Only 16% of assignments of mortgage are valid

–          75% of assignments of mortgage are invalid.

–          9% of assignments of mortgage are questionable

–          27% of the invalid assignments are fraudulent, 35% are “robo-signed” and 10% violate the Massachusetts Mortgage Fraud Statute.

–          The identity of financial institutions that are current owners of the mortgages could only be determined for 287 out of 473 (60%)

–          There are 683 missing assignments for the 287 traced mortgages, representing approximately $180,000 in lost recording fees per 1,000 mortgages whose current ownership can be traced.

McDonnell told O’Brien, “I have been auditing residential mortgage loans for the past twenty years on a one-by-one basis.  In the process, I have been cataloging the ramp up in predatory lending and mortgage fraud for all of those years, but I was not prepared for the shocking results of my audit.  What this means is that the degradation in standards of commerce by which the banks originated, sold and securitized these mortgages are so fatally flawed that the institutions, including many pension funds, that purchased these mortgages don’t actually own them because the assignments of mortgage were never prepared, executed and delivered to them in the normal course of business at the time of the transaction.  In a blatant attempt to engineer a ‘fix’ to the problem, the banks set up in-house document execution teams, or outsourced the preparation of their assignments to third parties who manufactured them out of thin air without researching who really owns the mortgage.”

O’Brien asked McDonnell what this means for his constituents.  “It is vitally important for your constituents to know that if they are in foreclosure now or if their homes have been foreclosed upon, they can stop the foreclosure from proceeding, or institute a court action to vacate a completed foreclosure. The Massachusetts Supreme Judicial Court has established the law of the land in its decisions U.S. Bank, N.A. v. Ibanez and Wells Fargo Bank, N.A. v. LaRace and I can tell you that every single assignment of mortgage that was recorded for the purpose of foreclosing the homeowner is invalid, overtly fraudulent, or criminally fraudulent. My findings also show that your constituents who are not in foreclosure, and have never been delinquent in their payments also have clouds on title due to the recording of defective and invalid discharges and assignments of mortgage.”

“My registry is a crime scene as evidenced by this forensic examination,” stated John O’Brien. “This crime that has affected thousands of homeowners in Essex County who, through no fault of their own, have had their property rights trampled on and their chain of title compromised. This evidence has made it clear to me that the only way we can ever determine the total economic loss and the amount damage done to the taxpayers is by conducting a full forensic audit of all registry of deeds in Massachusetts. I suspect that at the end of the day we are going to find that the taxpayers have been bilked in this state alone of over 400 million dollars not including the accrued interest plus costs and penalties. The Audit makes the finding that this was not only a MERS problem, but a scheme also perpetuated by MERS shareholder banks such Bank of America, Wells Fargo, JP Morgan and others. I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset – their homes.  This is disgusting, and this is criminal,” said O’Brien.

O’Brien continued “Once again I am asking Attorney General Martha Coakley and the other state Attorney’s General to follow the lead of New York Attorney General Eric Schneiderman and stop any settlement talks with the banks. The results of this report are only for my registry, but I can assure you that this type of criminal fraud is rampant across the nation. This leaves me to question why anyone would consider settling with these banks until we know the full extent of the damage that they have caused to the homeowners chain of title across this country and the amount of money they have bilked the taxpayers for their failure to pay recording fees.”

The Full Report is included with this release and may also be requested at www.mcdonnellanalytics.com.

IBANEZ: HUGE WIN FOR BORROWERS IN MASSACHUSETTS (NON-JUDICIAL STATE) HIGH COURT

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

READ FULL DECISION HERE—-> MA S Ct 1-7-11 usbank

see ibanez-decision-analyzed

see CNN Report and Video

NOTABLE QUOTES:

“Where, as here, mortgage loans are pooled together in a trust and converted into mortgage-backed securities, the underlying promissory notes serve as financial instruments generating a potential income stream for investors, but the mortgages securing these notes are still legal title to someone’s home or farm and must be treated as such.” (e.s.)

“The executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder,” Gants wrote. “However, there must be proof that the assignment was made by a party that itself held the mortgage.

The PPM, however, described the trust agreement as an agreement to be executed in the future, so it only furnished evidence of an intent to assign mortgages to U.S. Bank, not proof of their actual assignment. Even if there were an executed trust agreement with language of present assignment, U.S. Bank did not produce the schedule of loans and mortgages that was an exhibit to that agreement, so it failed to show that the Ibanez mortgage was among the mortgages to be assigned by that agreement. Finally, even if there were an executed trust agreement with the required schedule, U.S. Bank failed to furnish any evidence that the entity assigning the mortgage–Structured Asset Securities Corporation–ever held the mortgage to be assigned.”

Courts in other U.S. states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly.

Friday’s decision may also threaten banks’ ability to package mortgages into securities, including whether loans that were transferred improperly might need to be bought back.

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EDITOR’S COMMENT: I TOLD YOU SO!!!! This decision was inevitable. The Banks believed their political clout would outweigh the third branch of government — the judiciary — and it just doesn’t work that way. Not here in the USA.

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Top Massachusetts court rules against foreclosing banks

By Jonathan Stempel and Dena Aubin

NEW YORK | Fri Jan 7, 2011 1:10pm EST

NEW YORK (Reuters) – In a ruling that may affect foreclosures nationwide, Massachusetts’ highest court voided the seizure of two homes by Wells Fargo & Co and US Bancorp after the banks failed to show they held the mortgages at the time they foreclosed.

Bank shares fell, dragging down the broader U.S. stock market, after the Supreme Judicial Court of Massachusetts on Friday issued its decision, which upheld a lower court ruling.

The decision is among the earliest to address the validity of foreclosures conducted without full documentation. That issue last year prompted an uproar that led lenders such as Bank of America Corp, JPMorgan Chase & Co and Ally Financial Inc to temporarily stop seizing homes.

Courts in other U.S. states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly.

Friday’s decision may also threaten banks’ ability to package mortgages into securities, including whether loans that were transferred improperly might need to be bought back.

Wells Fargo and U.S. Bancorp lacked authority to foreclose after having “failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph Gants wrote for a unanimous court.

Wells Fargo was not immediately available for comment. U.S. Bancorp spokesman Steve Dale said the ruling has no financial impact on the bank, which has “no responsibility for the terms of the underlying mortgage or the procedure by which they were transferred” into a mortgage trust.

“What they were doing was peddling these mortgages and leaving the paperwork behind,” said Michael Pill, a partner at Green, Miles, Lipton & Fitz-Gibbon LLP in Northampton, Massachusetts, who represents homeowners and is not involved in the case.

In early afternoon trading, Wells Fargo shares were down nearly 4 percent at $30.92, while U.S. Bancorp was down 1.4 percent at $25.93.

Bank of America stock was down 2.8 percent, JPMorgan fell 3.7 percent, and the KBW Bank Index, which includes all four lenders, was down 2.3 percent. Major U.S. stock indexes were down 0.6 percent to 0.8 percent.

‘UTTER CARELESSNESS’

In the Massachusetts case, U.S. Bancorp and Wells Fargo had said they controlled through different trusts the respective mortgages of Antonio Ibanez as well as Mark and Tammy LaRace, who lost their homes to foreclosure in 2007.

The banks bought the homes in foreclosure, and sought court orders confirming they had title. A lower court judge ruled against them, and Friday’s decision upheld this ruling.

In a concurring opinion, Justice Robert Cordy lambasted “the utter carelessness” that Wells Fargo and US Bancorp demonstrated in documenting their right to own the properties.

Massachusetts is one of 27 U.S. states that do not require court approval to foreclose.

Gants did suggest in his opinion how banks might properly transfer mortgages via securitization trusts.

“The executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder,” Gants wrote. “However, there must be proof that the assignment was made by a party that itself held the mortgage.”

The cases are U.S. Bank N.A. v. Ibanez and Wells Fargo Bank NA v. LaRace et al, Massachusetts Supreme Judicial Court, No. SJC-10694.

(Reporting by Jonathan Stempel and Dena Aubin; Editing by Lisa Von Ahn and Matthew Lewis)

Principal Reduction: A Step Forward by BofA, Wells Fargo

Editor’s Note: Better late than never. It is a step in the right direction, but 30% reduction is not likely to do the job, and waiting for mortgages to become delinquent is simply kicking the can down the road.

The political argument of a “gift” to these homeowners is bogus. They are legally entitled to the reduction because they were defrauded by false appraisals and predatory loan practices — fueled by the simple fact that the worse the loan the more money Wall Street made. For every $1,000,000 Wall Street took from investors/creditors they only funded around $650,000 in mortgages. If the borrowers performed — i.e., made their payments, Wall Street would have had to explain why they only had 2/3 of the investment to give back to the creditor in principal. If it failed, they made no explanation and made extra money on credit default swap bets against the mortgage.

For every loan that is subject to principal reduction, there is an investor who is absorbing the loss. Yet the new mortgage is in favor of the the same parties owning and operating investment banks that created the original fraud on investors and homeowners. THIS IS NO GIFT. IT IS JUSTICE.

—-EXCERPTS FROM ARTICLE (FULL ARTICLE BELOW)—–

New York Times

Policy makers have been hoping the housing market would improve before any significant principal reduction program was needed. But with the market faltering again, those wishes seem to have been in vain.

Substantial pressure came from Massachusetts, which won a significant suit last year against Fremont Investment and Loan, a subprime lender. The Supreme Judicial Court ruled that some of Fremont’s loans were “presumptively unfair.” That gave the state a legal precedent to pursue Countrywide.
The threat of a stick may be helping banks to realize that principal write-downs are in their ultimate self-interest. The Bank of America program was announced simultaneously with the news that the lender had reached a settlement with the state of Massachusetts over claims of predatory lending.

The percentage of modifications that included some type of principal reduction more than quadrupled in the first nine months of last year, to 13.2 percent from 3.1 percent, according to regulators.

Wells Fargo, for instance, said it had cut $2.6 billion off the amount owed on 50,000 severely troubled loans it acquired when it bought Wachovia.

March 24, 2010

Bank of America to Reduce Mortgage Balances

By DAVID STREITFELD and LOUISE STORY

Bank of America said on Wednesday that it would begin forgiving some mortgage debt in an effort to keep distressed borrowers from losing their homes.

The program, while limited in scope and available by invitation only, signals a significant shift in efforts to deal with the millions of homeowners who are facing foreclosure. It comes as banks are being urged by the White House, members of Congress and community groups to do more to stem the tide.

The Obama administration is also studying whether to provide more help to people who owe more on their mortgages than their homes are worth.

Bank of America’s program may increase the pressure on other big banks to offer more help for delinquent borrowers, while potentially angering homeowners who have kept up their payments and are not getting such aid.

As the housing market shows signs of possibly entering another downturn, worries about foreclosure are growing. With the volume of sales falling, prices are sliding again. When the gap increases between the size of a mortgage and the value that the home could fetch in a sale, owners tend to give up.

Cutting the size of the debt over a period of years, however, might encourage people to stick around. That could save homes from foreclosure and stabilize neighborhoods.

“Banks are willing to take some losses now to avoid much greater losses later if the housing market continues to spiral, and that’s a sea change from where they were a year ago,” said Howard Glaser, a housing consultant in Washington and former government regulator.

The threat of a stick may be helping banks to realize that principal write-downs are in their ultimate self-interest. The Bank of America program was announced simultaneously with the news that the lender had reached a settlement with the state of Massachusetts over claims of predatory lending.

The program is aimed at borrowers who received subprime or other high-risk loans from Countrywide Financial, the biggest and one of the most aggressive lenders during the housing boom. Bank of America bought Countrywide in 2008.

Bank of America officials said the maximum reduction would be 30 percent of the value of the loan. They said the program would work this way: A borrower might owe, say, $250,000 on a house whose value has fallen to $200,000. Fifty thousand dollars of that balance would be moved into a special interest-free account.

As long as the owner continued to make payments on the $200,000, $10,000 in the special account would be forgiven each year until either the balance was zero or the housing market had recovered and the borrower once again had positive equity.

“Modifications are better than foreclosure,” Jack Schakett, a Bank of America executive, said in a media briefing. “The time has come to test this kind of program.”

That was the original notion behind the government’s own modification program, which was intended to help millions of borrowers. It has actually resulted in permanently modified loans for fewer than 200,000 homeowners.

The government program, which emphasizes reductions in interest rates but not in principal owed, was strongly criticized on Wednesday by the inspector general of the Troubled Asset Relief Program for overpromising and underdelivering.

“The program will not be a long-term success if large amounts of borrowers simply redefault and end up facing foreclosure anyway,” the inspector general, Neil M. Barofsky, wrote in his report. One possible reason is that even if they get mortgage help, many borrowers are still loaded down by other kinds of debt like credit cards.

Bank of America said its new program would initially help about 45,000 Countrywide borrowers — a fraction of the 1.2 million Bank of America homeowners who are in default. The total amount of principal reduced, it estimated, would be $3 billion.

The bank said it would reach out to delinquent borrowers whose mortgage balance was at least 20 percent greater than the value of the house. These people would then have to demonstrate a hardship like a loss of income.

These requirements will, the bank hopes, restrain any notion that it is offering easy bailouts to those who might otherwise be able to pay. “The customers who will get this offer really can’t afford their mortgage,” Mr. Schakett said.

Early reaction to the program was mixed.

“It is certainly a step in the right direction,” said Alan M. White, an assistant professor at Valparaiso University School of Law who has studied the government’s modification program.

But Steve Walsh, a mortgage broker in Scottsdale, Ariz., who said he had just abandoned his house and several rental properties, called the program “another Band-Aid. It probably would not have prevented me from walking away.”

Even before Bank of America’s announcement, reducing loan balances was growing in favor as a strategy to deal with the housing mess. The percentage of modifications that included some type of principal reduction more than quadrupled in the first nine months of last year, to 13.2 percent from 3.1 percent, according to regulators.

Few of these mortgages were owned by the government or private investors, however. Banks tended to cut principal only on mortgages they owned directly. Wells Fargo, for instance, said it had cut $2.6 billion off the amount owed on 50,000 severely troubled loans it acquired when it bought Wachovia.

Bank of America said it would be offering principal reduction for several types of exotic loans. Some of the eligible loans are held in the bank’s portfolio, but the program will also apply to some loans owned by investors for which Bank of America is merely the manager.

The bank developed the program partly because of “pressure from everyone,” Mr. Schakett said. Even the investors who owned the loans were saying “maybe we should be doing more,” he said.

Substantial pressure came from Massachusetts, which won a significant suit last year against Fremont Investment and Loan, a subprime lender. The Supreme Judicial Court ruled that some of Fremont’s loans were “presumptively unfair.” That gave the state a legal precedent to pursue Countrywide.

“We were prepared to bring suit against Bank of America if we had not been able to reach this remedy today, which we have been looking for for a long time,” said the Massachusetts attorney general, Martha Coakley.

Bank of America agreed to a settlement on Wednesday with Ms. Coakley that included a $4.1 million payment to the state.

Reducing principal is widely endorsed, in theory, as a cure for foreclosures. The trouble is, no one wants to absorb the costs.

When the administration announced a housing assistance program in the five hardest-hit states last month, officials explicitly opened the door to principal forgiveness. Despite reservations expressed by the Treasury, the White House and Housing and Urban Development officials have continued to study debt forgiveness in areas with lots of so-called underwater homes, according to two people with knowledge of the matter.

On a national scale, such a program risks a political firestorm if the banks are unable to finance all the losses themselves. Regulators like the comptroller of the currency and the Federal Reserve have been focused on maintaining the banks’ capital levels, which could be hurt by large-scale debt forgiveness.

“You have to be very careful not to design a program that would change people’s fundamental behavior across the country in a destabilizing way or would be widely perceived as unfair to people who are continuing to pay,” Michael S. Barr, an assistant secretary of the Treasury, said early this year.

Policy makers have been hoping the housing market would improve before any significant principal reduction program was needed. But with the market faltering again, those wishes seem to have been in vain.

Bank of America’s announcement came within hours of a fresh report that underscored the renewed weakness. Sales and prices are dropping, leaving even more homeowners underwater.

Sales of new homes fell in February to their lowest point since the figures were first collected in 1963, the Commerce Department said. Sales are about a quarter of what they were in 2003, before the housing boom began in earnest.

“It’s shocking,” said Brad Hunter, an analyst with the market researcher Metrostudy. “No one would ever have imagined it would go this low.”

RULES OF ENGAGEMENT FOR FORECLOSURE DEFENSE LAWYERS

See Judge Long’s Decision – Make sure you shepardize 384283_Ibanez Larace motion to vacate memorandum Oct2009Misc 384283 and Misc 3867551

when a foreclosure is noticed and conducted for one party
by another, the name of the principal must be disclosed in the notice.

the plaintiffs themselves recognized that they needed assignments in recordable form explicitly to them (not in blank) prior to their initiation of the mortgage foreclosure process, that the plaintiffs’ “authorized agent” argument fails both on its facts and as a matter of law

Editor’s Note: We’ve reported on this case before. And as a caution, there is report that the case was overturned on appeal but I don’t see it. Either way, the reasoning of the case is extremely persuasive and the only basis for reversal would be on procedural grounds, not substance.

Here is the essence of the pretender lender tactic. Their argument is basically that they have the right to foreclose whether or not they are the real party in interest, whether or not they are the holder in due course and especially whether or not they are the creditor in the “loan” transaction with the homeowner(s).

RULES OF ENGAGEMENT FOR FORECLOSURE DEFENSE LAWYERS: If you engage the “enemy” on their terms you will most likely lose. After all they created a narration that they think they can win. So YOUR strategy should be to change the narrative to YOUR points that can win.

In this case, it was simple. The Judge simply saw that the creditor was not involved in the foreclosure process and that the sale was therefore invalid. Implicitly the Judge was protecting both the real creditor and the homeowner from financial double (or multiple jeopardy).

So the Judge helped out the homeowner here by giving the homeowner the correct narrative. to wit: even if the party seeking to initiate the collection on the note or the foreclosure of the mortgage is an authorized agent (by virtue of possession or holding the note, etc.) the principal MUST BE DISCLOSED. How else can the court or the homeowner or the principal know the matter is subject to disposition through sale or judgment?

In a recent case in Arizona a pro se litigant finally penetrated the fog of Chauncery (see Dickens, BLEAK HOUSE), and the Judge who denied all homeowner motions before the weekend, finally got it and asked the attorney for the pretender lender what was going on (in another case in Ohio the Judge said “what are you trying to pull here?”).

Those cases are now proceeding through discovery (which we all know will never be completed) in which the identity of the creditor and a full accounting of ALL money transacted in connection with the subject loan is fully disclosed.

While there are cases we are tracking in which the homeowner is being bounced on his/her rear end, the tide is turning. The fact that there was federal bailout money and insurance proceeds paid in connection with these loans, is extremely relevant to the amount due and the identity of the current creditor.

This in turn is extremely relevant to the homeowner and the “lender” complying with federal mandate for modifications or state mandate for mediation. If the creditor is unknown how can the court or anyone else know that the “agent” is authorized?

At first the Judge’s knee jerk reaction is “What are you talking about, who else would make payments on this loan.?” But upon hearing the answer that the U.S. Treasury (TARP, TALF etc.), Federal reserve, and counter-parties in credit default swap insurance have made billions of dollars in payments and have not thus far accounted for their use of the money, the Judge may not believe you will succeed in your case but he will agree that you have a right to inquire. And THAT is all you need. because once you make the inquiry, the pretender lender will be on the defensive from that point on, disclosing itself as an impostor and a fabricator.


MERS AND COUNTRYWIDE V AGIN: THE DEVIL IS IN THE DETAILS

NOW AVAILABLE ON AMAZON KINDLE!

MERS and Countrywide v Agin Trustee D Ct Mass Aff’d B Ct on Avoidance Mtg 20091117

NOTE FROM EDITOR SEEKING HELP: Rumor has it San Diego has stopped all foreclosures. I need this corroborated or debunked quickly. Can I get a little help here?

The case in this POST comes out of Massachusetts where the cases are not quite stopped, but almost so — AND where property title insurance companies are NOT underwriting ANY policy that covers a home whose mortgage was securitized.

Many thanks to MAX GARDNER for this case and best wishes for his speedy recovery. He’s one of the titans of this movement. we want him around!

The primary point that needs emphasis here is that as you read this case you will see that if you give the Court something SOLID to hang its hat on, you can get the results you want.

The mistake being made repeatedly out there is simple: either the homeowner or the lawyer goes in with a legal argument addressing the conclusions of the case instead of directing the Judge’s attention to the beginning of the case — discovery, motions to compel, TRO etc. based upon discovery requirements.

The obvious requirement that you need to know in your mind what you are talking about it so you know the significance of the issue legally seems to  have escaped all but a few lawyers. Many lawyers are taking half baked “audits” going to court and making legal arguments about a report they have not read, do not understand and which does not contains all the elements needed anyway.

You must educate the Judge not lecture him. You must NOT rely on securitization in your preliminary arguments because it sounds like legal maneuvering to get out of a legitimate debt.

Unfortunately these mistakes are being made even by people who have attended our survey courses. So we are expanding our offering by adding DVDs, Boot Camps and home study.

Our own efforts at providing forensic review and expert support to lawyers has been challenged by the growing demand vs manpower limitations. Consequently, we will embark on efforts to increase the bandwith or resources in terms of people through educational programs. We will then start to refer cases to forensic analysts and lawyers.

We  are starting courses to train, and certify forensic analysts who pick up even the most minute flaw in a document — like a document you you know in your heart is fabricated and forged but feel intimidated by the process of proving it.

In conjunction with specific courses on training forensic analysts we will also offer addtional courses on how to be expert witnesses, how to prepare expert declarations and affidavits and how to defend your expert declarations in deposition or in an evidentiary hearing. The course is also for lawyers who feel they could use a little support on direct and cross examination of experts.


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