Daily News related to the Foreclosure Crisis

The biggest unpunished theft in human history - Max Keiser


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Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Fannie Mae Wraps Up Repurchase Issues with Wells Agreement

Mortgage Servicing News Wells Fargo's agreement to pay Fannie Mae $591 million to resolve repurchase claims marks the end of Fannie's efforts to receive reimbursement on defective loans it bought from private lenders during the height of the housing boom.


Why Did the Justice Department Kill the Madoff Subpoena Against JPMorgan?

The Trustee in charge of recovering funds for Madoff’s victims, Irving Picard, said in a filing to the U.S. Supreme Court this Fall that JPMorgan stood “at the very center of Madoff’s fraud for over 20 years.”  (sounds about right)

Wall Street on Parade It’s a big story when a serial miscreant like JPMorgan – which has promised its regulators to change its jaded ways in exchange for settlements – risks obstruction of justice charges by denying one of its key regulators internal documents. It becomes an explosive story when the Justice Department, the highest law enforcement agency in the land and the regulator’s only source of help in enforcing a subpoena for the documents, sides with the serial miscreant instead of the regulator.

Connecticut Plagued By Soaring Foreclosure Rate

In the U.S. last month, home foreclosures fell to the lowest level since the mortgage crisis began eight years ago. But in Connecticut, and several other states, foreclosures are still rising dramatically.

NPR She sits in front of a stack of papers and has no problem talking about one of the biggest messes of her life.

HOLLY HOUSE: My situation is, I'm trying to save my home. The loan was over $400,000 and the house is only worth $155.

GOETZ: This year, Connecticut is getting hit with 2,000 new foreclosures each month. That's 200 more a month than last year. That's a dramatic difference from much of the country.

Jordan Belfort: I Will Turn Over All 'Wolf Of Wall Street' Profits To Past Victims

TV Web For the record, I am not turning over 50% of the profits of the books and the movie, which was what the government had wanted me to do. Instead, I insisted on turning over 100% of the profits of both books and the movie, which is to say, I am not making a single dime on any of this. This should amount to countless millions of dollars and hopefully be more than enough to pay back anyone who is still out there.


The Ocwen Settlement Numbers Are Wrong

“Ocwen must also refund $125 million to the nearly 185,000 Ocwen, Litton and Homeward borrowers who have already been foreclosed upon…” The problem with this statement is that the number of former homeowners wrongfully foreclosed upon with the assistance of these three servicers far exceeds 185,000.

Approximately 1.875 million homeowners in foreclosure were beaten out of their legal defenses with phony documents – not the 185,000 number used in the settlement. Who decided the adequacy of this relief?

Even at $1,200 per household, as predicted, the compensation for a lost foreclosure case that was prosecuted using fraudulent documents seems grossly inadequate.

THJF In tens of thousands of other cases, the named plaintiff was a bank/trustee acting on behalf of a residential mortgage-backed trust. In those cases, the critical loan documents needed to “prove” the banks’ cases came from Ocwen, Litton and AHMSI. That plain truth is not only ignored by the settlement, but the press release certainly would make a reader wrongly conclude that the damage done by these servicers was far less than the actual damage inflicted on homeowners, neighborhoods and the national economy.

The document mills operated by Ocwen, Litton and AHMSI produced the phony documents that the trusts used to foreclose.

No one from Ocwen, or AHMSI or Litton was arrested. Scott Anderson, a vice-president of Ocwen, who signed tens of thousands of mortgage assignments to trusts with false information about when the trusts acquired certain mortgages, and who also signed thousands of fraudulent note endorsements/allonges, was not charged with any crime. 


AG Coakley Announces $11 Million Payment to State Pension Fund From Settlement with Countrywide Securities Corporation

“We are pleased to return these critical public funds to the state pension system,” AG Coakley said. “It is important to hold Wall Street accountable for its role in the subprime lending crisis. Our office will continue its leading role in this area as we work to help homeowners and others harmed by investment banks.”

New Maryland bill could shorten debt collection after foreclosure

Maryland legislators will consider a bill that would reduce the time from years to days that debt collectors have to take homeowners to court for the leftover debt on their foreclosed homes.

Washington Post In Maryland, debt collectors have up to 12 years to take homeowners to court for outstanding mortgage debt after foreclosure. The process is known as a deficiency judgment. The proposed bill would reduce that time to 180 days.

It smacks of debtors prison and indentured servitude,” said state Sen. Jamie B. Raskin (D-Montgomery), who plans to introduce legislation shortly after the legislature reconvenes Jan. 8. 

Video: A Year of Corporate Fines

Business Behaving Badly: Despite having to paying millions or even billions of dollars in fines, many companies look at the payments as just the cost of doing business.

NY Times Do big fines actually prompt corporations to mend their ways? Many ordinary people certainly want companies to be held accountable. But for corporations, fines sometimes seem like the cost of doing business. That is because the costs often pale next to the profits that companies stand to make by doing the things that get them into trouble in the first place.

The billions that companies are paying belong to their owners — the shareholders — not to executives.


Wells Fargo agrees to $541 million loan settlement

Wells Fargo agreed in September to pay a net $780 million to the smaller Freddie Mac to resolve similar repurchase claims.

Reuters Wells Fargo will pay a net $541 million to Fannie Mae to settle claims over defective home loans, completing the government-controlled mortgage company's efforts to have banks buy back troubled loans made before the financial crisis.

Fannie Mae said on Monday it has reached settlements worth roughly $6.5 billion over loan buybacks with eight banks, including Wells Fargo, the nation's largest mortgage lender and fourth-largest bank by assets.



US Bank, BofA, LaSalle Bank and Other Trustees Slammed the Door on Their Own Toes

Original 11/6/13 post here


Living Lies Upon analysis, research and reflection it appears as though the game could be over in the US Bank cases, the Bank of America cases, and any case in which the foreclosing party is identified as the Trustee. US Bank clearly has no right or even access to the foreclosure process. How do we know? Because US Bank says so on its own website.



Regulators Have New Cases of Frauds and Abuses to Tackle

Goodbye 2013 frauds; welcome 2014 abuses.

The financial crisis may be five years behind us, but there will never be a shortage in the ways in which the financial markets may be manipulated and abused.

DealBook The Securities and Exchange Commission unveiled a new policy in selected cases that required an admission of liability, rather than the old “neither admit nor deny” settlement. JPMorgan was the first company subjected to this policy shift by admitting violations related to reporting the London whale trades, coming shortly after a case in which the hedge fund manager Philip A. Falcone acknowledged wrongdoing in how he managed his firm.


2014: Seize the Moment

As we survey our country at the end of 2013, I don't have to tell you about the crises we face. Many of you are experiencing them every day.

- The middle class continues to decline, with median family income some $5,000 less than in 1999.

- More Americans, 46.5 million, are now living in poverty than at any time in our nation's history. Child poverty, at 22 percent, is the highest of any major country.

Senator Bernie Sanders - Real unemployment is not 7 percent. If one includes those who have given up looking for work and those who want full-time work but are employed part-time, real unemployment is over 13 percent - and youth unemployment is much higher than that.
- Most of the new jobs that are being created are part-time and low wage, but the minimum wage remains at the starvation level of $7.25 per hour.
- Millions of college students are leaving school deeply in debt, while many others have given up on their dream of a higher education because of the cost.
- Meanwhile, as tens of millions of Americans struggle to survive economically, the wealthiest people are doing phenomenally well and corporate profits are at an all-time high. 



11th Circuit Sends Major FDIC Case to Georgia High Court

The Atlanta-based federal appeals court has ruled in part against the Federal Deposit Insurance Corp. in a decision with the potential to affect the FDIC's cases across the country.


Another article

More information on Professional Liability Lawsuits

Daily Report The Dec. 23 decision by the U.S. Court of Appeals for the Eleventh Circuit ruled that—contrary to what the FDIC has reportedly argued in all of its cases—bank directors and officers named as defendants may at least in some instances raise affirmative defenses based on the FDIC's own conduct.

"It's an important victory for officers and directors of banks who now are going to be permitted to inquire into and investigate the manner in which the FDIC handled the assets and contributed to the loan losses for which they now seek recovery against the officers and directors," said Balser.



A Tool Consumers Need

The Consumer Financial Protection Bureau recently issued a report on “pre-dispute” arbitration, also known as forced arbitration. That is the ubiquitous corporate practice of requiring consumers to agree in advance to use arbitration for any dispute that arises from a company’s products or services, rather than go to court.

The report found, for example, that most large banks put forced arbitration clauses in basic contracts and that 90 percent of those clauses bar both individual lawsuits and participation in class actions. This results in a systematic denial of justice.

NY Times Banks and businesses love forced arbitration, because it is a process they control for their own benefit. It shields them from accountability by closing the courthouse door to consumers. But no one should have to forfeit consumer protections and legal rights to use products and services.

To the extent that consumers are aware of their vulnerability, they have learned the hard way. In the past several years, the Supreme Court has repeatedly upheld arbitration clauses, leaving consumers with virtually no meaningful way to challenge corporate wrongdoing. Ideally, Congress would pass a law to remedy that injustice. For now, it is relying on the consumer bureau. To work its way toward an effective ban on forced arbitration, the agency need only follow where the evidence leads.

Salem County

Registry of Deeds


John O'Brien

Register of Deeds





If you are a victim of robosigning, contact our customer service department at 978-542-1704 to ask about receiving an affidavit as proof that a document being used to take your home contains a fraudulent or surrogate signed document


Only 77%?

Judicial Watch-Breitbart Poll: 77% of Americans Concerned about Government Corruption; Majority See it Getting Worse

Corruption only survives in a society that allows it.

Judicial Watch GOVERNMENT’S ABILITY TO SELF-POLICE CORRUPTION: A 52% majority of Americans think the government is actually doing a worse job at policing corruption in Washington DC in the past five years, while just 18% think the government is doing better. An equal number of Democrats say corruption has worsened (33%) as say it has improved (33%) during their party’s control of the White House. (If Americans knew the truth, 100% would be concerned.)


In some cases payments could triple. 

Will UK Scale-Back Of Homeowner Funding Affect US? 

Too much help to buyers will cause the market to overheat and lead to another housing bubble. 



In addition to these fears, a large number of Americans are expected to get a nasty surprise in their pockets soon as the mortgages they took out on their existing homes reach their 10-year anniversaries and they are forced to pay down the principal on the loans as well as the interest they have been paying all along. In some cases payments could triple what people have been paying until now. Across the largest US banks there are around US$221 billion of loans that will reach this stage within the next four years.


BofA's legal costs mount in Countrywide mortgage fiasco

Prosecutors want BofA to pay $864 million over a program called 'The Hustle.' The bank already has shouldered about $50 billion in losses, settlements and other costs related to its Countrywide purchase.

L.A. Times But whatever penalty the bank might pay, it will amount to a mere drop in the bucket of BofA's legal bills — much of it stemming from its ill-fated acquisition of the former Calabasas mortgage lender in 2008.

"It's chump change," said Dick Bove, bank analyst at Rafferty Capital Markets.

WSJ Reveals Where All the Stolen Money From the System Is Sitting

The Banks have literally stolen trillions of dollars from pension funds, municipalities, states, federal agencies, sovereign wealth funds and private investors. Estimates range from $3-$20 Trillion. So where did they put that money? 

Living Lies In natural resources. The fact that they have already been fined for committing violations and crimes with the storage and movement of our natural resources is not stopping them any more than the fines and penalties they paid in the great group of mortgage-related settlements now totaling an estimated $200 Billion. Chump change when you have stolen trillions of dollars.

The foreclosures? That’s just the finishing touch on the last scheme.


Hope Now Servicers Ending Year with 2 Million Delinquent Loans

Mortgage Servicing News After stealing ~ 10 million homes, Hope Now servicers have seen a dramatic decline in foreclosure starts this year, but they are still dealing with a persistently high number of delinquent single-family loans due to crimes the industry committed during the origination and servicing of the toxic loans.


Before You Open Your Mouth Or Write Anything Down, Know What You Are Talking About

It appears to be a case of first impression that the borrower is induced to sign documents in favor of someone who, at the end of the day, does NOT give him the loan. This never was a defect before the era of claims of securitization. Now it is central to the issue of establishing the identity and rights of a creditor and debtor and whether the debt is secured or unsecured.

The burden of pleading and proving the required elements is on the Plaintiff and cannot be shifted to the defendant without violating the constitutional requirements of due process.

Living Lies The massive volume of foreclosures and real estate closings have resulted in a failure of the judicial system --- both Judges and Attorneys to scrutinize the transactions and foreclosures and other enforcement actions for compliance with basic contract law. This starts with whether there is an actual loan at the base of the tree of assignments, endorsements, powers of attorney etc. If the party at the base of the tree did not in fact make any loan and was not possessed of any actual or apparent authority to represent the party who DID make the loan, then the instruments executed in favor of the originator are void, not voidable. This is simply because the loan contract like any contract requires offer, acceptance and consideration. Lacking any meeting of the minds and/or consideration, there was no contract regardless of what one of the parties signed.

Building Code Violations at Deutsche Bank property results in injury.

Deutsche held not liable.

Deutsche Bank and Premiere Asset filed a joint motion for summary
judgment arguing that they owed no duty to Raap because the missing handrail on the stairway was an open and obvious condition and that Raap assumed the risk by climbing the stairs with knowledge of the missing handrail. Deutsche Bank and Premiere Asset also argued that Raap could not establish that the missing handrail was the proximate cause of his injuries because Raap testified that he did not know what caused his fall.


MERS Denied on Appeal 

The trial court entered a judgment in favor of Eric and Sherry West on a counterclaim they filed against Mortgage Electronic
Registration Systems (MERS)
, and the court scheduled a hearing on damages.

MERS filed no response to the Wests' brief on damages. The trial court granted the Wests the damages they sought. 
MERS then filed a motion for reconsideration, raising a new argument concerning the award of damages. The trial court denied the motion for reconsideration.

Christmas Day

It’s A Wonderful Life! — The Lesson Is the Banker Gets to Keep the Money He Stole

Tens of millions of people love this movie because of its uplifting message of good people appreciating the life and people they have. But am I the only one who was disappointed and infuriated that old Banker Potter got to keep the money he stole?

The idealist in me expected that Potter would have returned the money anyway because he wouldn’t want to be thought of as a thief. But this doesn’t bother him, just like the mortgage fraud we have going on now.

Living Lies Potter’s goal is money and he doesn’t care if he turns his community into a pile of crap as long as he makes money doing it. In fact he likes it when things crash so he can buy bargains and in the process ruin the life and dream of thousands of people. Sound familiar?

The amount stolen this time by the likes of Mr. Potter is about $13 trillion, causing hundreds of billions of losses in pension funds alone and yet the government is concerned about the welfare of Mr. Potter instead of George Bailey. Tens of millions of families were displaced from their jobs and homes. I find that unacceptable, don’t you?

Outgoing Regulator Bart Chilton Explains Why Wall Street Always Wins

Tyler Durden "As we long suspected, Wall Street continues to use every trick in its playbook to do whatever it can to eviscerate numerous post-financial- crisis rules. The arsenal includes high-powered lobbyists who outnumber lawmakers 10-to-1; $1,000-an-hour letter-writing lawyers who gain strength from negotiating over arcana; and the occasional hoodwinking of a president whose knowledge of the ways of finance are close to nil."

Wall Street Bankers Urged To Donate Bonuses To The Homeless

Given that the financial system is supposed to efficiently allocate investments so that the economy grows at its maximum rate, the limp recovery is a sign the sector is not performing well, calling the generosity of these bonuses into question.

Huff post An online populist advocacy group, The Other 98%, is instead suggesting bankers donate their bonuses to charity or other housing-related endeavors in an effort to combat the housing crisis caused by the financial collapse.

"This holiday season, we have some free PR advice for the banks: "Help end the homelessness they created. It is quite literally the least they could do," said Alexis Goldstein, a former Wall Street analyst and Occupy Wall Street activist who serves as communications director for The Other 98%.

Fidelity settles with FTC on LPS purchase

The Federal Trade Commission has settled with Fidelity National Financial, Inc. (FNF) on a complaint over the title giant's proposed $2.9 billion acquisition of mortgage technology and services provider Lender Processing Services (LPS).

Housing ire Title plants are databases used by abstractors, title insurers, title insurance agents, and others to determine the title status of real property. Title plant users access this information to establish the chain of title and make other determinations in order to underwrite and issue title insurance policies.

(And if there is a clouded title issue, the title plants criminally forge documents  because they know the criminal prosecutors won't come after them.) 


Housing Recovery May Be Running Out of Steam

DealBook The housing recovery in the United States could run out of steam in 2014. Banks are likely to tighten lending standards once new rules come into place. Rising interest rates may drive down home loan volume, too. Cash purchases by investors could set a floor for house prices, but they may not be enough to prevent a major slowdown.


Deutsche Bank National Trust Company attempts foreclosure using a forged promissory note

Mr. Codio has graciously allowed us to write about his case as a public service to other New York homeowners who are losing their homes to banks and mortgage trusts that submit false, forged and fraudulent documents to courts to prove ownership of mortgage loans that they do not own. To put it bluntly the banks and mortgage trusts are stealing the homes of people who owe them no money — and getting away with it.


Debt Inversion As detailed in Roger Rubin’s report, Mr. Rubin concluded that none of the signatures or initials on the document that Deutsche Bank National Trust Company’s attorney presented to us as the original promissory note had been written by our client Dominic Codio.

We now have undisputed expert proof that all of the signatures and initials on the document presented by plaintiff’s attorney Fincey John, Esq. of Knuckles, Komosinski & Elliott LLP, as the original promissory note are not those of Mr. Codio, which means that Deutsche Bank National Trust Company is trying to foreclose upon Mr. Codio’s home using a forged, fake promissory note.

Beware of Big Mortgage Settlement Numbers

The news release said the Consumer Financial Protection Bureau had ordered Ocwen Financial to pay $125 million in refunds to borrowers who entered foreclosure and write down $2 billion on the mortgages it services. But that’s not the full story.

DealBook Ocwen’s refund payment is actually only $66 million, according to a filing by the company. (The firms that serviced the mortgages before Ocwen are paying the remainder.)

The $2 billion number is easy to misunderstand. Ocwen isn’t going to have to bear any of that $2 billion write-down itself, though the bureau’s news release never makes that clear. 

Verification please.

Fannie and Freddie Still Selling Large Pools of Bad Loans

Why not; they are still guaranteed by the U.S. taxpayers.  Take away the guarantee and see what happens.

(These mods were used to swindle a debt-free homeowner into signing a new loan to replace the destroyed one.)

Mortgage Servicing News The FHFA 3Q Foreclosure Prevention Report points out that the GSEs completed nearly 100,900 loan modifications and other foreclosure prevention actions in 3Q, bringing the total to more than 3 million since the start of conservatorship in September 2008. Approximately 2.5 million of these actions have helped troubled homeowners save their homes including nearly 1.5 million permanent loan modifications.  (Is there ANY verification of this?)

Wall Street Is My Landlord;

Blackstone's Home Rental Bonds Yet Another Sign of Renewed Credit Bubble

Investors chasing this deal for paltry returns are picking up pennies in front of a steamroller. This is the way it is at the peak of every credit bubble.

Mike "Mish" Shedlock Without a doubt, Blackstone picked individual properties carefully, and every property placed in the pool was to maximize value for Blackstone, not investors. That is to be expected, but Blackstone went steps further, nearly to the point of detailing how investors are likely to be gored by this deal. 

The only surprising thing is how quickly investors were willing to repeat their last mistake. 

Was 'It's a Wonderful Life' really communist propaganda? 

FBI investigated classic Christmas film because it portrayed banker Mr. Potter as greedy and evil.

FBI informants claimed the movie was a vessel for communist messages.

Daily Mail 'With regard to "It's a Wonderful Life," [informant names redacted] stated in substance that the files represented a rather obvious attempt to discredit bankers by casting Lionel Barrymore as a "scrooge-type" so that he would be the most hated man in the picture,' according to a 2,000-page FBI report called 'Communist Infiltration in the Motion Picture Industry' that was assembled between 1942 and 1958.


US judge Rakoff defends remarks on financial crisis

"Judges have to be neutral, but they don't have to be eunuchs," Rakoff said.

CNBC "If you prosecute a CEO or other senior executive and send him or her to jail for committing a crime, the deterrent effect in my view vastly outweighs even the best compliance program you can put in place."


Allstate, Deutsche Bank Settle Suit Over Mortgage Bonds

Bloomberg Allstate sued the Frankfurt-based lender in New York state Supreme Court in Manhattan in February 2011 on claims of fraud and negligent misrepresentation, saying the bank knew the securities were “toxic mixes of loans extended to borrowers who could not afford the properties.” The parties have settled the case.


Banks Squealing Over Volcker Rule Exposing Their Dirty Laundry. Will Regulators Capitulate?

naked capitalism Lining the edge of the track are bank-friendly Congresspersons poised to stick their legs into the Agencies’ lane, while the spectators are distracted by the mainstream financial press misdirection.

It’s hard to tell who’s winning.

Banking Group Threatens Lawsuit Over Volcker Rule

Banks have until July 21, 2015, to divest themselves of risky assets under the Volcker Rule, but can get an extension from the Federal Reserve if necessary.

DealBook In a letter Monday, the association said it would file a lawsuit challenging the rule, unless regulators immediately suspended a provision that could force regional and community banks to divest themselves of an investment in collateralized debt obligations backed by trust preferred securities, known as TruPs.


Full post

A Win for the Biggs Family

This past Wednesday, members of the Chicago Anti-Eviction Campaign stood in court with Martha Biggs as Deutsche Bank's attorney moved to have the eviction order against her family dropped. Indeed, not only was the eviction order dropped, but the eviction case as a whole was dismissed!

Chicago Anti-Eviction This might not have been possible without the thousands of supporters who signed this petition, called into the bank, and stood with us in court. This support was particularly important as Deutsche Bank initially refused to acknowledge responsibility for the home, as the transfer of the property from bank to bank over the past several years left Deutsche only as the trustee of the property.

However, this approach changed after we delivered a petition signed by nearly six thousand supporters and hundreds of you called into Deutsche's New York offices prior to Wednesday's hearing.  In response to this effort, Deutsche Bank directed its lawyer to meet our demand to drop the eviction. Once again, we have seen that the combination of grassroots organizing and public pressure have brought about a victory!

Motions to Confirm Foreclosure Sales Denied

The issue is whether the sales were conducted in accordance with the requirements of law. For the reasons stated below, the court concludes that they were not, and the motions are denied.

Vermont Superior Court These four cases came before the court on motions for confirmation of foreclosure sales. 

In each case, the plaintiff was the only bidder at the judicial sale and is seeking confirmation of the sale. All sales were conducted with the same documentation and in the same manner. 


Dernier v. Mortgage Network, Inc., MERS and U.S. Bank 

Vermont Superior Court The trial court denied plaintiffs' motion to amend and dismissed plaintiffs' case for failure to state a claim. Plaintiffs appealed. After careful consideration of the trial court record, the Supreme Court concluded the trial court erred in dismissing Counts 1 and 2 of plaintiffs' amended complaint for lack of standing, to the extent that these counts alleged irregularities in the transfer of the note and mortgage unconnected to the pooling and servicing agreement.

In Soured Investments, Brokers Emerge as Culprits and Victims

Regulators are shifting their focus in their fight against fraud to encompass brokers. The shift comes even as some brokers are casting themselves as victims, saying they were duped by the same complex products that they once happily sold to customers.

DealBook Brokerage firms project a public face of their employees as attentive, diligent and proficient. In television and Internet marketing, they highlight the expertise and sound guidance of their advisers. In contrast to that depiction, brokers are now saying that some products were so complicated that they did not have the knowledge to sell them. Some have sought to have complaints about the products they sold expunged, and others have filed claims against their firms.



MERS was never a Holder

U.S. Bank v. Steinberg

The Labelle Moving Affidavit is, presumably, from the same "Pat Labelle" who executed the MERS Mortgage Assignment as "Assistant Secretary" of MERS, yet conspicuously absent from the Labelle Moving Affidavit is any reference to the MERS Mortgage Assignment.

Supreme Court, Kings County Plaintiff's reliance on the MERS Mortgage Assignment executed by "Pat Labelle" as evidentiary proof of Morgan Stanley Mortgage Trust's standing to foreclose is similarly misplaced, since MERS was merely a "nominee" of the originating lender, Hemisphere National Bank, for purposes of recording the mortgage instrument. MERS was never a "holder" of the Steinberg Note, and thus, could not confer any interest in the Steinberg Note to plaintiff.


US Bank Natl. Assn. v Ciccarelli

Plaintiff failed to establish the validity of the assignment by submitting evidence showing that the note was either physically delivered to MERS or assigned to MERS by MortgageIt 

Supreme Court, Suffolk County Tubens had constructive notice of plaintiff's mortgage lien and was chargeable with the duty to make further inquiry to determine whether the lien had been satisfied or released (see Andy Assoc. v Bankers Trust Co., 49 NY2d 13; see also Real Property Law § 291; Congregation Beth Medrosh of Monsey, Inc. v Rolling Acres Chestnut Ridge, LLC, 101 AD3d 797 [2d Dept 2012]). Under the circumstances, Tubens cannot claim to be a bona fide purchaser for value without notice of plaintiff's prior encumbrance and, therefore, is not entitled to the protection of the recording statutes.

Gonzalez-Blanco v. Bank of America and its attorneys

Plaintiff now claims that as a result of 
defendant's failure to vacate the prior default judgment, her employment opportunities were adversely affected, that 'defendant had defamed her with the credit report agencies and that 
the Bank of America's attorney committed malpractice. 
Even as amplified by the plaintiff's 
affidavit, and according every possible inference favorable to the plaintiff, plaintiff failed to overcome the prima facie showing and as a result, plaintiffs complaint is dismissed in its entirety.

Sup Ct, Bronx County

Judge Hughes

Plaintiff commenced this action to recover for damages allegedly as a result of defendant's failure to vacate a default judgment entered against her in a prior action filed in the Civil Court of the City of New' York, County of Bronx. By decision dated November 10, 2005, the default judgment entered against Maria Gonzalez-Blanco was vacated on the condition that she filed an answer to Bank of America's complaint within twenty days; otherwise the judgment was to continue in full force an effect. Thereafter, on April 24, 2006 the initial civil court action against the plaintiff (defendant in Civil Court action) was discontinued without prejudice.

Poor Pleading = Poor Result

Avila v Ocwen Loan Servicing

Sup Ct, Bronx County

Judge Hughes

To be entitled to an equitable accounting, the demanding party must allege the existence of a fiduciary 
and confidential relationship between themselves and the defendant. PVM Oil Futures v. Banque Paribas, 161 A.D.2d 220 (I'' Dept. ! 990)(intemal citations omitted). Here, Plaintiff does not 
allege and such fiduciary relationship between themselves and the Bank. Accordingly, this cause of action must be dismissed

Judge Denies Bank of America Motion to Dismiss case involving unlawful discriminatory employment practices

Supreme Court, Kings County Particularly in light of the relaxed pleading requirements in employment discrimination cases, Plaintiff's allegations are sufficient to withstand this motion to dismiss. Defendant may well test the legal and factual bases for his liability after appropriate discovery with a motion for summary judgment.

Defendant's motion is denied.

Wane v. U.S. Bank (GreenPoint)


h/t FlaProSe

We reject Wane's contention that U.S. Bank had no standing to seek an assignment of rents without further discussion. But because, as argued by 
Wane, U.S. Bank failed to offer competent evidence to establish (standing) that it was entitled to an assignment of rents, we reverse and remand for further proceedings. ???

The special warranty deed that Fannie Mae received from MERS was also VOID.

Sturdivant v. BAC Home Loan Servicing

Although BAC might have had the assignment at the time it foreclosed, it failed to present evidence in support of that fact in its summary-judgment motion. Thus, BAC failed to present a prima facie case in support of its summary-judgment motion that it had received the December 1, 2009, assignment of Sturdivant's mortgage before it foreclosed on the property on December 1, 2009. Accordingly, we conclude that BAC was not entitled to a summary judgment on the basis of having demonstrated that it had been assigned Sturdivant's mortgage at the time it foreclosed.

FindLaw “The complete absence of any evidence indicating that Flagstar was the owner of the debt, i.e., the holder of the note, before June 5, 2009, when MERS, as nominee for Flagstar, invoked the power of sale in the mortgage means that MERS did not convey legal title to itself by virtue of the foreclosure deed because MERS had no authority to initiate the foreclosure proceedings. 

Consequently, the special warranty deed that Fannie Mae received from MERS two days after the foreclosure sale, which depended on its efficacy upon the validity of the MERS foreclosure deed, see 11 Thompson on Real Property § 94.07(b)(2)(I) at 390 (David A. Thomas 2d ed.2002), was also void.”


The Huge Costs of Being a ‘Faithless Servant’

The government has many avenues of recourse at its disposal when settling cases involving insider trading and investment fraud. Efforts to impose even greater costs on defendants were shown in two cases last week.

SEC v Tourre Memorandum

DealBook Morgan Stanley also filed a lawsuit against Mr. Skowron, accusing him of being a “faithless servant,” meaning that he violated the obligations of loyalty and good faith by putting his own interests ahead of the employer. Under New York State law, which governs in this case, an employee forfeits all compensation received during the time when the person was faithless, regardless of whether the employer suffered any damages from the violation.

The US Imprisons And Tortures Far More People Than Any Other Nation in The World (and foreclosure abuse goes rampant)

What in the world does this have to do with foreclosure or the rights of any of us, the “lucky ones” at all? We are all victims of a political process and fundamentally a judicial system that has failed us all. 

Weidner Law Foreclosures just make it personal. Foreclosures and the gross predisposition to forgive bank crimes in service to the banking and corporate interests represent the civil court analog to the criminal and international rights examples above. And while civil court and the loss of possessions and property rights are no where near as significant as the freedom and individual rights of human beings locked in cages, the systemic problem is the same.




The Pleading Trap in the Foreclosures

The foreclosing party escapes without be required to allege facts that it could never prove! This isn’t just bad pleading that is allowed to pass as stating a cause of action, it is a violation of statute.

Living Lies The complexity of the documentation and movement of money in fraudulent securitization schemes leads lawyers and judges to oversimplify the situation producing anomalous results. It may sound counterintuitive to say that a party may be “holding” the mortgage because if endorsement of the note but not be able to enforce the mortgage without showing and pleading they paid for it. But to say otherwise as the Banks insist, would allow sophisticated criminals to intervene and capture the property without paying a dime for it. The crime here is that the investors who advanced the ONLY consideration in the whole deal are deprived of both the proceeds of collection AND the collateral promised as security for their advance of funds. 

HSBC v. Surrarrers

The court held the Surrarrers lack the ability to challenge the validity of the

[mortgagors] and other similarly situated appellants lack standing to make this argument. Specifically, when a mortgagor * * * is not a party to the
transfer agreement, and his contractual obligations under the mortgage are
not affected in any way by the assignment, the mortgagor lacks standing to challenge the validity of the assignment.


Ohio 8th District Court of Appeals The Rhode Island Court in Cosajay recognized that a mortgagor has a "legally cognizable right" to
ensure that a threatened foreclosure is legally conducted. 

Furthermore, when Defendants argued this absurd position again in Woods, the Circuit shed a brighter spotlight on the absurd effect of Defendants' position:

The First Circuit has determined that, due to the particularities of mortgage foreclosure cases, requiring privity to an assignment "unduly insulate[s]" those assignments to the detriment of mortgagors asserting their legal rights. "There is no principled basis for employing standing doctrine as a sword to deprive mortgagors of legal protection conferred upon them under state law."  (Simple)


In No One We Trust

In America today, we are sometimes made to feel that it is naïve to be preoccupied with trust. Our songs advise against it, our TV shows tell stories showing its futility, and incessant reports of financial scandal remind us we’d be fools to give it to our bankers.

As always, it is the poor and the unconnected who suffer most from this, and who are the most repeatedly deceived. Nowhere was this more evident than in the foreclosure crisis.

As millions lost their homes during and after the crisis, median wealth declined nearly 40 percent in three years. Banks would have done badly, too, were it not for the Bush-Obama mega-bailouts.

Joseph Stiglitz The subprime mortgage hawkers, putting themselves forward as experts in finance, assured unqualified borrowers that repayment would be no problem. Later millions would lose their homes. The banks figured out how to get court affidavits signed by the thousands (in what came to be called robo-signing), certifying that they had examined their records and that these particular individuals owed money — and so should be booted out of their homes. The banks were lying on a grand scale, but they knew that if they didn’t get caught, they would walk off with huge profits, their officials’ pockets stuffed with bonuses. And if they did get caught, their shareholders would be left paying the tab. The ordinary homeowner simply didn’t have the resources to fight them. It was just one example among many in the wake of the crisis where banks were seemingly immune to the rule of law.


Off Limits, but Blessed by the Fed

Documents show how the Fed gave JPMorgan Chase a free hand to expand in businesses like electricity that are typically off limits to big banks.

Gretchen Morgenson

NY Times

Three months later, JPMorgan traders began a scheme to manipulate electricity prices, ultimately forcing consumers in those regions to pay more every time they flicked on a light switch or an air-conditioner, the Federal Energy Regulatory Commission subsequently contended.






Cosajay v. MERS

Foreclosure Defense Nationwide The First Circuit recognized that a mortgagor has a "legally cognizable right" to ensure that a threatened foreclosure is legally conducted, and that there is “no principled basis for employing standing doctrine as a sword to deprive mortgagors of legal protection conferred upon them under state law”, and that the Defendants’ argument as to an alleged lack of standing by the homeowner to challenge the assignment was “extreme and incongruous”.

LPS in Robo-Signing Settlement Talks Said to Exceed $200 Million

Robo-Signing destroyed lives and they are discussing directing some of the money to homeowners? 

Commenting on the loss of revenue, LPS CEO said the company has continued to adjust to “declining criminal  foreclosure activity.” 

Virtually every illegal foreclosure case and county land record office has evidence of forgery.

Why are homeowners litigating Crimes in a civil court?

Bloomberg The Justice Department in February announced a separate $35 million in criminal penalties and forfeiture against LPS, saying in a news release that the company participated in “a six-year scheme to prepare and file more than 1 million fraudulently signed and notarized mortgage-related documents.” Lorraine Brown, former chief executive officer of LPS’s DocX LLC subsidiary, is serving at least 40 months in prison after pleading guilty last year in federal court to conspiracy to commit mail and wire fraud.

How Oklahoma's Criminal Law veiws robo-signing...
Forgery of Deeds or Other Instruments
Every person who, with intent to defraud, forges, counterfeits or falsely alters any endorsement or other instrument transferring or purporting to transfer the right or interest of any holder of any evidence of debt or liability, or of any person entitled to such right or interest; is guilty of forgery in the first degree.
California Penal Code states:
(c) Every person who, with the intent to defraud, alters, corrupts, or falsifies any record of any will, codicil, conveyance, or other instrument, the record of which is by law evidence, or any record of any judgment of a court or the return of any officer to any process of any court, is guilty of forgery.

Group for Homeless Wins Fees After Besting Feds



Courthouse News The government owes $450,000 to the attorneys who forced it to make unused property available to the homeless, a federal judge ruled.
Under the Stewart B. McKinnley Homeless Assistance Act of 1987, government agencies must determine which of their properties are "excess," "surplus," "unutilized" or "underutilized," and then determine if any of them would be "suitable" for use by the homeless.

Deutsche Bank to Pay $1.9 Billion to Settle Mortgage Suit

The agreement with the Federal Housing Finance Agency covering the period 2005 to 2007 resolves Deutsche Bank’s largest mortgage-related litigation case.

Bloomberg “Investors want to see legal problems being dealt with,” Stefan Bongardt, an analyst with Independent Research GmbH in Frankfurt who has a hold recommendation on the stock, said by telephone. “The sum is slightly higher than we expected, but it is better to get these kind of things out of the way rather than spend months haggling over a few hundred million.”

Banks may pay a total $27 billion to settle lawsuits with the Federal Housing Finance Agency, according to data and company filings compiled by Bloomberg last month.


Judge Rakoff is Rattling Wall Street Cages Again

There can be no benefit to the public, the judge said, if serious financial transgressions are swept under the rug via cash settlements and legal jargon that allow charges to disappear as if they never happened.

Fox Business Using the blunt, common-sense approach that infuses many of his rulings, Rakoff points out that virtually every top regulator, prosecutor and investigator who has looked into the crisis has acknowledged the systemic fraud at its center.

But fraud is not some esoteric concept that originates organically and then flows about on its own energy. Hardly. Criminal fraud, the kind that can be prosecuted, is knowingly committed by managers and executives – real people -- who consciously make a decision to lie and mislead, unusually in pursuit of profit.

Rakoff says that kind of fraud was clearly pervasive ahead of the crisis and wonders aloud why real people -- the decision makers who called the shots -- haven’t been held accountable.


Ocwen Will Pay $2.1 Billion Over Mortgage-Servicing Abuses

Ocwen took advantage of borrowers at every stage of the process,” -  Richard Cordray, the consumer bureau’s director, said in a statement

Ocwen Financial Corp., the biggest non-bank in the mortgage-servicing industry, will provide $2.1 billion in relief for homeowners to settle regulators’ claims over abuses in its handling of borrowers’ loans.

Attorney General Kamala D. Harris Announces $2.1 Billion Mortgage Settlement with Ocwen

Washington Post








California Attorney General

Under the agreement with the Consumer Financial Protection Bureau and 49 states, Ocwen will spend $2.1 billion on foreclosure compensation and “principal forgiveness modification programs” for people who are behind on payments or whose homes are worth less than they owe, the company said today in a regulatory filing. The Atlanta-based company will also follow specific guidelines on servicing mortgages and face independent monitoring of that work.

Today’s action sends a clear message that we will be vigilant about making sure that consumers are treated with the respect, dignity and fairness they deserve.” - Cordray

OCWEN: Another Slap on the Wrist for a Company That Abused Homeowners

CFPB v. OCWEN Consent Judgment

David Dayen Ocwen again shows the continued, systemic mistreatment of American homeowners. Ocwen stands accused of “violating consumer financial laws at every stage of the mortgage servicing process,” according to CFPB Director Richard Cordray. But under this settlement, their executives will face no criminal charges, the firm will not actually pay the large majority of the penalties themselves, and they did not even have to admit wrongdoing in the case. Merry Christmas.


“Wall Street is about to give themselves $91.44 Billion – with a B – in holiday bonuses, even as they continue to dodge jail time for their ongoing crime spree!"

other98 Wall Street megabanks forced ten million people out of their homes due to the foreclosure crisis, while spending 2013 dodging the law for the blatant financial fraud that left folks homeless. How insane is our Wall Street bonus situation? Wall Street bankers are running out of ideas of how to spend the money. That’s not a joke: the Financial Times publishes “How To Spend It” magazine to help stumped Wall Street bankers figure out what to do with their fat bonus checks.

Miami Accuses Banks of Reverse Redlining

Miami sued Wells Fargo Bank and Citigroup, claiming their predatory lending, redlining and reverse redlining devastated minority neighborhoods with foreclosures.

Courthouse News The City of Miami sued the two giant banks in separate, similar federal lawsuits. Citations in this article are from the 67-page complaint against Wells Fargo.
The city claims Wells Fargo unjustly enriched itself by violating the Fair Housing Act.
It claims the bank has targeted minorities since 2004 with predatory lending on mortgages.

JP Morgan Sues FDIC for WAMU Cash Over Disputed Mortgage Bonds

The dots are starting to get connected. Here JP Morgan who said they were the successor for everything that was WAMU turns out to be arguing that this didn’t actually happen and that some money is still left in the WAMU “estate.” 

Living Lies The issue that is not raised is what else is in the WAMU estate? I content that there are numerous loans or claims to loans that were never transferred to anyone successfully and I think the FDIC and JPM both know that. 

Chase is trying to limit its exposure for bad bonds while at the same time claiming ownership or servicing rights for the underlying mortgages.



S.E.C. Tension as It Examined Mortgage Cases

Wall Street’s top regulator, sifting through the wreckage of the mortgage crisis, was weighing enforcement actions last year against several large financial companies.

But then the regulator, the Securities and Exchange Commission, decided in some prominent cases to quietly back down.

DealBook The outcome of the cases also echoed the decision not to file charges over the September 2008 collapse of Lehman Brothers because some S.E.C. officials decided it would be legally unjustified to do so. That move perplexed the S.E.C.’s chairwoman at the time, Mary L. Schapiro, who often prodded George Canellos, who succeeded Mr. Reisner and is now the co-head of enforcement, to explain, “Why is there no case?”



It has taken six (6) years and coast-to-coast work to get courts to realize that securitization of a mortgage loan raises issues as to standing, real party in interest, and the alleged authority to foreclose, and that the simplistic mantra of the “banks” and servicers of “we have the note, thus we win” is no longer to be blindly accepted.

Foreclosure Defense Nationwide With the release of the US Bank admissions per our post of November 6, 2013; the issuance of the opinions from the Supreme Courts of Oregon and Montana holding that MERS is not the “beneficiary”; and recent opinions from various jurisdictions which are now, finally, holding that securitization-related issues are relevant in a foreclosure, a host of new legal issues are about to be litigated in the trial and appellate courts throughout the country. 

Your Lender is the Federal Reserve System

This means that the Federal Reserve owns a substantial bulk of the bonds issued during the mortgage meltdown. Questions abound. The Federal Reserve knows the bonds were defective in a number of respects. But they are purchasing those bonds for the express purpose of propping up the financial system and presumably getting those bonds out of circulation. 

Living Lies The question is why did they purchase these bonds from the banks? The banks were merely the intermediaries that created the REMIC trusts that issued the bonds. So are the he trust beneficiaries receiving this money? Nothing in the public domain indicates that the investors were paid by the banks that received this money. Since it was a purchase the bonds still exist which means that the largest investor in many trusts is the Federal Reserve. Is the Fed getting Servicer advances?

Acting Attorney General Announces Lawsuit Against Credit Suisse Arising From Sale of Over $10 Billion in Troubled Mortgage Backed Securities

COMPLAINT: NJ AG v. Credit Suisse

NJ Attorney General Acting Attorney General Hoffman noted that the alleged conduct outlined in the State’s complaint is particularly egregious because investors in the mortgage-backed securities sold by Credit Suisse included charities and educational institutions, as well as public and private pension funds.


Jamie Dimon’s perp walk: Why it could be this year’s Christmas miracle

JPMorgan's CEO just violated a federal statute carrying a prison sentence. But will the punishment fit the crime?

There was CEO Jamie Dimon, accompanied by two FBI agents. His hands were tied behind his back, held together by handcuffs. As flashbulbs popped, the agents guided Dimon into an awaiting vehicle, and drove off to take him into police custody.

David Dayen


Even putting aside the rap sheet of crimes committed by JPMorgan Chase over the past several years for which its CEO can be said to be ultimately responsible, just a week ago, Jamie Dimon explicitly violated a federal statute that carries a prison sentence. That he’s a free man today, with no fear of prosecution, doesn’t only speak to our two-tiered system of justice in America. It should color our perceptions of new rules and regulations that supposedly “get tough” on the financial industry, as we recognize that any law is only as strong as the individuals who enforce them.

The Government Is Quietly Giving Way More Housing Aid To Rich People Than Poor People

Business Insider These problems are only going to get worse as millions of seniors find themselves in need of rental housing in the coming decades. 
Full Post


City Of Richmond Moves Closer To Foreclosure Plan

A Northern California city hit hard by the housing crisis took another step toward using its powers of eminent domain to stave off foreclosures.

CBS local Sacramento The Richmond City Council voted 4-2 on Tuesday to develop rules for the program, which would seize private mortgages in danger of default and then lower the amount homeowners owe. The city hasn’t formally adopted the plan. The council is one vote short of the five votes needed for approval.
On Tuesday, the council agreed to prioritize neighborhoods hardest hit by the foreclosure crisis. It also instructed city staff to ask banks to voluntarily cut the principal on mortgages.


Bank Bigwigs Should Be Prosecuted, Judge Says

Judge Rakoff is very much like millions of other Americans puzzled to watch well-compensated executives face no consequences for running an industry the Financial Crisis Inquiry Commission found to be riddled with fraud.

Fiscal Times How is it possible, Rakoff asks, that in a scandal with such a widespread impact on the economy and huge financial liabilities for the banks involved, no individuals have been held responsible? Justice Department officials, he notes, have never argued with the findings of the Financial Crisis Inquiry Commission or other government officials that the crisis was “the product of intentional fraud.”

This story we posted last week has taken on a life of its own, and the Atlanta Journal makes an indelible observation.

Woman living ‘off the grid’ faces Eviction

Cape Coral needs to be afraid of me. I’m not afraid of them,” said Speronis.  (as it should be. MSF)

AJC The city is trying to evict this woman because she doesn't use city water or electricity. Here is what AJC had to say:
The Declaration of Independence says Americans have certain “unalienable rights,” including “Life, Liberty and the pursuit of Happiness.” Those words were written by a fellow that didn’t have running water or electricity in his home — Thomas Jefferson.


Criminal Charges are causing fainting spells

SAC Trader Found Guilty Of Insider Trading After Fainting In Court

Before the guilty verdict came out, Steinberg fainted in the courtroom.

He faces up to 85 years in federal prison.

Business Insider SAC Capital, the $14 billion Stamford, Conn.-based hedge fund run by Steve Cohen, was criminally indicted this summer on insider trading charges.

Federal prosecutors charged the fund "with criminal responsibility for insider trading offenses committed by numerous employees and made possible by institutional practices that encouraged the widespread solicitation and use of illegal inside information."

Former SAC portfolio manager Matthew Martoma also fainted on his front lawn when the FBI showed up.


Major banks face civil mortgage fraud charges in US

The US Justice Department plans to file civil fraud charges against Citigroup Inc. and Merril Lynch over the sale of botched mortgage securities before the 2008 financial crisis, Reuters reports on Wednesday.

Rapsi News Civil investigators allege that tens of billions of dollars in losses may have been incurred when investors bought securities marketed by Citigroup as safe, when the bank had evidence to the contrary.

Additionally, probes against Credit Suisse and Royal Bank of Scotland are in progress.

Stumbling Toward the Next Crash

Already, we have forgotten the basic lesson of the crash: Global problems need global solutions. And because we failed to learn from the last crisis, the world’s bankers are carrying us toward the next one.

NY Times In early October 2008, three weeks after the Lehman Brothers collapse, I met in Paris with leaders of the countries in the euro zone. Oblivious to the global dimension of the financial crisis, they took the view that if there was fallout for Europe, America would be to blame — so it would be for America to fix. I was unable to convince them that half of the bundled subprime-mortgage securities that were about to blow up had landed in Europe and that euro-area banks were, in fact, more highly leveraged than America’s.

FREDDIE MAC Document Delivery and Processing Procedures

The Note must be original and complete. 
• Verify the chain of endorsements (Note).
• Verify the chain of assignments (security instrument).

Freddie Mac Document Custodians are responsible for verifying certain information contained in the Notes and related documents for the Mortgages sold to Freddie Mac and for certifying that you have performed those verifications and that the original documents are in your possession.

JP Morgan, Not Satisfied with Profitable WaMu Acquisition, Sues FDIC to Extract More

naked capitalism JP Morgan is simply typical of the new ethos of Wall Street, and much of the top wealthy, who seem to have an insatiable appetite for money. The WaMu receivership is a pot of money they can try to exploit; why not have a go? It’s just another manifestation of a predatory mindset.

J.P. Morgan sued for credit-card misconduct

Mississippi v. JPMorgan

Mississippi Attorney General Mississippi Attorney General Jim Hood filed a lawsuit on behalf of the state of Mississippi against J.P. Morgan Chase. The lawsuit alleges that the company conducted fraudulent collections practices in the state.


U.S. preparing civil charges against Citigroup, Merrill Lynch

Reuters Civil investigators have compiled evidence that allegedly shows that investors lost tens of billions of dollars after purchasing securities Citigroup had marketed as safe even though the bank had reason to believe otherwise.

Judge Holds Execs of Failed Banks Personally Liable in FDIC Suit

The ruling is at odds with other U.S. district court decisions on the business judgment rule.

Daily Report Those rulings have held that before a failed bank's corporate executives and directors can be held personally liable for taxpayer losses associated with the bank's collapse, the business judgment rule would require a showing that they demonstrated "gross negligence" by engaging in fraud, acting in bad faith or demonstrating a reckless indifference in performing their duties.
Defense attorneys for the Buckhead bank's former officers and directors in the case before Thrash contend that allegations amounting to "ordinary" or "mere" negligence through carelessness or a "lackadaisical performance" are not sufficient for liability to attach under Georgia's business judgment rule.

LaRouche Demands Selloff of Fed's Toxic Assets

Lyndon LaRouche called for the Federal Reserve to be forced to sell off its mass of toxic assets that have been accumulated since the launching of its quantitative easing bail-out of the trans-Atlantic too-big-to-fail banks.

LaRouche PAC "Since the 2008 blowout and the Federal Reserve's massive bail-out, the Federal Reserve has been turned into a bad bank, accumulating almost-worthless asset-backed securities from the six Wall Street big banks and their European counterparts, as part of the so-called quantitative easing. As the result of this policy, these banks have grown in size by 40 percent, while starving the real economy of any investment capital for real growth and job creation,"
LaRouche declared.


New ruling puts Fannie, Freddie in line for windfall MBS recovery

Judge Cote’s summary judgment ruling Monday – gutting the banks’ defenses against FHFA’s state-law securities claims – is a doozy.


Alison Frankel Has there ever been a more lopsided multibillion-dollar case than the Federal Housing Finance Agency’s fraud litigation against the banks that sold mortgage-backed securities to Fannie Mae and Freddie Mac?

In effect, Cote’s decision will permit FHFA to recover more from MBS issuers than Fannie Mae and Freddie Mac would have made if their MBS investments had paid as promised.

Ex-Deutsche Banker’s Wife Says Tiger Charity Funds Spent on Wine, Meals

A former Deutsche Bank executive’s wife said he used their animal conservation charity to hide assets while she spent the group’s money on furniture and expensive meals.

Bloomberg Li’s evidence suggested she and Bray were defrauding the charity “on a grand and big scale,” Judge Paul Coleridge said to her at the hearing. “It was incredibly dishonest.”

Li said she had tried to ensure donations were spent on charitable projects, and the couple had used trusts to store their own assets.

Evicted for the Holidays?


All her life, Susie Johnson had just two goals she wanted to accomplish- going to college, and owning her own home. She achieved the first goal, and then in 1996 had the opportunity to fulfill the second one, purchasing her home. Ms. Johnson was proud of her home, and paid her mortgage on time every month.

Occupy Our Homes In 2003, Susie received a notice from Washington Mutual Bank, returning her payment for the month, and claiming that her loan was in default.

As instructed, she sent WaMu the receipts for the payments they had mysteriously misplaced, but they filed for foreclosure anyway. Ten years later, Susie is still fighting to stay in her home. Her health has deteriorated from the stress, and as another holiday season approaches, Susie remains afraid to answer the door for fear that it will be the sheriff coming to evict her and take the home she loves so much.

Secret Inside BofA Office of CEO Stymied Needy Homeowners

“Everyone knew that we weren’t helping people,” said Erik Schnackenberg, a customer-service manager who left Urban Lending. “They were giving us all the pressure and none of the power to change anything. It was this absurd, self-contained ecosystem of worthlessness.”

Schnackenberg and other former employees at Urban Lending said they spoke when contacted by Bloomberg News because they’re distressed by what they saw.

Bloomberg The firm also had a warehouse in Broomfield for processing documents from tens of thousands of HAMP applications.

There, unopened mail was stacked to the ceiling, said three people who spent time at the warehouse. Time-sensitive documents such as pay stubs grew stale, and paperwork was scanned into computer systems late or partially, triggering loan modification rejections, the people said.

“People went through years of sending documents in,” said a customer advocate who left Urban Lending. “There were people who did everything right and they would still get screwed over and have to start the modification process all over.


US Bank Antics versus Their Own Website

US Bank is popping up all over the place as the Plaintiff in judicial actions and the initiator of foreclosures in non- judicial states. It is one of the leading parties in the shell game that is mistaken for securitization of loans. But on its own website it admits against the interests that it has advanced in courts across the country, that it has NO POWER TO FORECLOSE or to pursue any other remedies.

Living Lies Both Chase and US Bank are going into bankruptcy courts in Chapter 11 proceedings and demanding adequate protection payments while the bankruptcy is proceeding, knowing and withholding the fact that the creditor is being paid every month and there is no default from the creditor’s point of view. This would be important information for the debtor in possession and the his attorney and the Judge to know. But it is withheld in the hope that the borrower/debtor will never discover the truth — and in most cases they don’t.

Feds probe JPMorgan interference in Madoff case

U.S. authorities are investigating whether JPMorgan Chase tried to impede their investigation of the Bernard Madoff Ponzi scheme, CNBC has learned.

'Late this summer, the Inspector General's office asked the Justice Department to help enforce the subpoena, but the department, by then far along in its own investigation, declined.

CNBC As CNBC first reported Friday, Madoff claimed in an e-mail written from prison that he provided information, which the Inspector General "eagerly accepted from me and is using in his investigation."

Delmar confirmed that Madoff contacted the Inspector General's office, which ultimately subpoenaed the bank "in order to test Madoff's assertions."

CNBC has learned the information included names and dates of meetings and transactions that the bank, to that point, had declined to provide.


The Financial Crisis: Why Have No High-Level Executives Been Prosecuted?

Five years have passed since the onset of what is sometimes called the Great Recession. While the economy has slowly improved, there are still millions of Americans leading lives of quiet desperation: without jobs, without resources, without hope.

The prevailing view of many government officials (as well as others) was that the crisis was in material respects the product of intentional fraud. In a nutshell, the fraud, they argued, was a simple one. Subprime mortgages, i.e., mortgages of dubious creditworthiness, increasingly provided the chief collateral for highly leveraged securities that were marketed as AAA, i.e., securities of very low risk. How could this transformation of a sow’s ear into a silk purse be accomplished unless someone dissembled along the way?

Judge Jed S. Rakoff


The New York Review of Books

As the commission found, the signs of fraud were everywhere to be seen, with the number of reports of suspected mortgage fraud rising twenty-fold between 1996 and 2005 and then doubling again in the next four years. As early as 2004, FBI Assistant Director Chris Swecker was publicly warning of the “pervasive problem” of mortgage fraud, driven by the voracious demand for mortgage-backed securities. Similar warnings, many from within the financial community, were disregarded, not because they were viewed as inaccurate, but because, as one high-level banker put it, “A decision was made that ‘We’re going to have to hold our nose and start buying the stated product if we want to stay in business.’

But what I do find surprising is that the Department of Justice should view the proving of intent as so difficult in this case. Who, for example, was generating the so-called “suspicious activity reports” of mortgage fraud that, as mentioned, increased so hugely in the years leading up to the crisis? Why, the banks themselves.


"The fear of prison concentrates the mind in a way the prospect of writing a check on a corporate account does not."

Stern Words for Wall Street’s Watchdogs, From a Judge

The legal doctrine of “willful blindness” could be put to valuable use, he writes, adding that “the department’s claim that proving intent in the financial crisis is particularly difficult may strike some as doubtful.”

NY Times Judge Rakoff also has no patience with Attorney General Eric H. Holder Jr.’s statement to Congress that some prosecutions should be approached with caution because they may “have a negative impact on the national economy, perhaps even the world economy.”

Judge Rakoff says that “this excuse — sometimes labeled the ‘too big to jail’ excuse — is disturbing, frankly, in what it says about the department’s apparent disregard for equality under the law.”

U.S. May Cut Its Presence in Supporting Mortgages

Reuters The Federal Housing Finance Agency, the regulator for the taxpayer-owned Fannie Mae and Freddie Mac, unveiled a plan in which the two mortgage finance giants would gradually reduce the maximum size of home loans they can buy.

Because the government guarantees the loans bought by the two companies, the move would dial back the heavy support Washington provides the mortgage market.

The Rumored Chase-Madoff Settlement Is Another Bad Joke

There's only one thing to say about this "reluctance" to prosecute (and the "fear" and "concern" for lost jobs that allegedly drives it): It's a joke. 

Matt Taibbi

Rolling Stone

Yes, you might very well lose some jobs if you go around indicting huge companies on criminal charges. You might even want to avoid doing so from time to time, if the company is worth saving. 

But individuals? There's absolutely no reason why the state can't proceed against the actual people who are guilty of crimes.

If anything, the markets might react positively to that kind of news.

Caramadre Gets Six Years for Investment Scheme Involving Terminally Ill

Joseph Caramadre believed he had found the Holy Grail for investors, a risk-free way to speculate in financial securities — all upside with little or no downside. All he needed to make it work were people who would soon be dead.

Caramadre tried to take back the plea, blaming chronic depression and his wife's nervous breakdown.

ProPublica Smith didn't buy the argument and sent Caramadre to jail, where he’s been for seven months. The judge said the attempted plea change was a factor in the sentence he handed down, calling it "an incredibly cynical effort to manipulate the court."

In his heyday, Caramadre operated a successful estate planning business and gave millions to charities and politicians. Now few charities will acknowledge that he was a donor, Caramadre said at the hearing. And his contributions have become political kryptonite.

Business duo sues bank and servicer over Franklin foreclosure

This summer, their attorneys asked a judge in federal court to toss out Lintner and Embree’s lawsuit.
But the case is proceeding, at least for now. In an order issued Dec. 6, the Judge said the bank and Saxon had yet to prove why they were legally justified to back out of the contract. 

Concord Monitor Nearly three years after signing a purchase-and-sale agreement on the property, which was pending foreclosure at the time, the pair has yet to obtain ownership and is instead locked in a legal dispute with its owner, the Bank of New York Mellon, and Saxon Mortgage Services. Lintner and Embree said Mellon and Saxon, unjustly reneged on the contract last year, soon after the foreclosure was finalized, and then went fishing for new buyers.
Off topic


Federal Judge Rules Against N.S.A. Phone Data Program

The Judge called the program’s technology “almost Orwellian” and suggested that James Madison, the author of the Constitution, would be “aghast” to learn that the government was encroaching on liberty in such a way.

NY Times A Federal District Court judge ruled on Monday that the National Security Agency program that is systematically keeping records of all Americans’ phone calls most likely violates the Constitution, and he ordered the government to stop collecting data on two plaintiffs’ personal calls and destroy the records of their calling history.







Judge: "Mr. Banker, did you make this loan?"   "NO."

When the Judge asks "Did you sign the note and mortgage" he or she is only asking half of the essential questions. The other half should be directed to the foreclosing party "did you make the loan"?

Some judges are beginning to loosen up to listen to the realities of securitization — that it was a fraudulent scheme to deprive investors of their money and the promised secured enforceable loans. The investors all sued saying the loans were NOT enforceable even though they had supposedly been transferred into the trust. These are the lawsuits that the banks are settling every week or every other week for hundreds of millions or billions of dollars. 

Living Lies Every contract must have an offer, acceptance and consideration. Every first year law student knows that. In the case of mortgage loans, the loan contract consists of:

The forecloser would be forced to explain why they should collect on a debt that was created outside of their cloud of parties and entities. This is why they don't allege they are the holder in due course because THAT would require them to prove they have the note and mortgage "for value" and that they didn't have actual knowledge of the borrowers claims and defenses. The borrower would only need to deny such an allegation thus forcing the burden of proof onto the forecloser --- a burden that no forecloser these days can meet unless it is a local bank loan.


She got a foreclosure notice – for her late husband

Billions of dollars in foreclosure settlements between big banks and government regulators haven’t helped Laura Biggs. The California woman is scheduled to lose her home nine days before Christmas because Select Portfolio concluded that the house is no longer the primary residence of her husband, who’s been dead since 2003.

Charlotte Observer “It’s just a continuing misalignment of incentives: that a (mortgage) servicer doesn’t get paid for figuring this stuff out, but they get paid for foreclosure,” said Michael Calhoun, the president of the Durham-based Center for Responsible Lending, which has fought to hold servicers accountable. “Even today, the servicers are understaffed and overwhelmed. If this were your local community bank, they of course would be working with you.”


“No power on earth has a right to take our property from us without our consent.”—John Jay, first Chief Justice of the United States

The Blaze “How ‘secure’ do our homes remain if police, armed with no warrant, can pound on doors at will and … forcibly enter?”—Supreme Court Justice Ruth Bader Ginsburg, the lone dissenter in Kentucky v. King (May 16, 2011)

If the government can tell you what you can and cannot do within the privacy of your home, whether it relates to what you eat, what you smoke or whom you love, you no longer have any rights whatsoever within your home.



This woman owns her home free and clear, is current on taxes, but she chooses not to use city water or electricity. Now the city is trying to evict her.

The Blaze Robin Speronis told WFTX-TV that she was given an eviction notice after the station aired a story about how she chooses to live in a home without modern amenities, such as running water and electricity.

“A code enforcement officer came, knocked on the door then posts a placard that says uninhabitable property, do not enter.” 


Wake Up the Banking Police

Volker Rule Final Text

Gretchen Morgenson

NY Times

The Volcker Rule has landed. Will the United States financial system be safer and sounder as a result?

That’s the goal, after all, of the almost 1,000-page document approved by banking, securities and commodities regulators last week. Years in the making, the rule is supposed to reduce the risks that a major bank will have to be rescued by taxpayers if some of its bets go bad.


Settlement tab for big banks passes $85bil.


ABA Banking Journal Download a large timeline of mortgage settlements here

Download a large table of large banks and their settlements here

A tiny fraction of the trillions of dollars of wealth stolen from homeowners.


Homeowners unite against threat of foreclosure

In Newark, the nightmare of losing your home is very real. According to NJ Communities United, almost 1 in 4 mortgage-holders in New Jersey are underwater.

MSNBC “It’s very rare that we have to use eviction blockades, but we win with the threat of them,” Franzen explains. “And we are willing to do them, and we have done them. I’ve gone to jail seven times myself, protecting a house… in the past couple of years.” And when the banks know that a group is willing to set up a blockade, they usually try to stop it from happening entirely by reaching a deal with the homeowner.


Prosecution Deferred, Justice Denied

The use of deferred prosecution and non-prosecution agreements, which began during the George W. Bush administration and has increased under President Obama, allows companies to avoid criminal charges if they pay substantial penalties, improve their compliance programs and cooperate with authorities. The companies do not plead guilty. They are not convicted of any crimes. They do not receive criminal sentences.

NY Times Opinion The failure to prosecute the likes of JPMorgan, HSBC and Massey minimizes their culpability and raises doubts about the government’s commitment to fighting corporate crime. The Justice Department would never allow individuals who committed such serious crimes to escape prosecution. Why is there a double standard for corporate defendants? And why has the Obama administration continued the questionable corporate crime policies of the Bush administration?

We’re not talking about small cases involving technical violations of the law. Prosecutors agreed to a deferred prosecution with HSBC in 2012 even though the bank was involved in nearly a trillion dollars’ worth of money laundering, much of it from drug trafficking. 


  Documents in JPMorgan settlement reveal how every large bank in U.S. has committed mortgage fraud

The United States government, now with the endorsement of the Justice Department, has said that after investigation it found that essentially every large bank involved in the secondary market sales to Fannie and Freddie committed fraud.

In next installment we'll look at what the statement of facts tells you about how the Department of Justice unfortunately remains largely clueless.

Real News

with Prof. Bill Black

Washington Mutual's infamous for the investigations that found that it was one of those places that did have a literal blacklist of honest appraisers who refused to inflate appraisals, in which WAMU refused to send future business to honest appraisers because it wanted to engage in this massive fraud scheme of inflating appraisals.

Why haven't these senior officers controlling JPMorgan, Washington Mutual, and Bear Stearns been prosecuted for the crimes? And if for some reason they don't think they can prosecute the individuals, why don't you prosecute the corporation instead of letting it get off scot-free, apparently, with no criminal case? So that's the big take away at this point.


When Lenders Sue, Quick Cash Can Turn Into a Lifetime of Debt

High-cost lenders, like AmeriCash, exploit laws to sue tens of thousands of Americans every year. The result: A $1,000 loan grows to $40,000

ProPublica ProPublica’s examination shows that the court system is often tipped in lenders’ favor, making lawsuits profitable for them while often dramatically increasing the cost of loans for borrowers.

Since the average borrower who takes out a high-cost loan is already stretched to the limit, with annual income typically below $30,000, losing such a large portion of their pay “starts the whole downward spiral,” said Laura Frossard of Legal Aid Services of Oklahoma.



If you can prove that the current “holder” is part of the fraud you can knock them down from their pedestal of being a holder in due course and thus just a holder or even less a possessor (bailment) holding no rights to enforce under any conditions. This is why the actual transaction documents and methods of payment at each stage of the “assignments”or “endorsements” of the instruments must be carefully examined starting with the origination. By actual transactions I mean — “SHOW ME THE MONEY.” The UCC says “for value” and so if someone claims to have received ownership of the note then in order for them to aspire to holder in due course status they must show they paid for it.

Living Lies It appears as though some cases of mine are being transferred out of the foreclosure docket and into general litigation or even complex litigation where the old rules apply. Judges in the foreclosure docket are commenting about the shell game played where the servicers are suddenly changed right before trial, and where the elements of their cause of action don’t appear to be present. Judgments are being entered in favor of the borrower that are reciting that the Plaintiff failed to meet its burden of proof — still coming up short on the statement that this was part of a fraudulent scheme and that the perpetrators of such a scheme should not be allowed to profit from it.
So now that we are heading back into the territory where the rules of law, the rules of evidence and the rules of procedure apply again,


Last week a judge ruled that Detroit could move forward with its plan to cut pensions for retired city workers. This week Washington is celebrating a budget deal which harms older people economically in several ways.

Wall Street banks were hired to manage Detroit's pension money, and large sums vanished from the fund.

Bankers may be asked to compromise on outstanding fees as part of a pension deal, but they won't be asked to account for the missing money -- and they've already been paid millions.

Huff Post In a December 5 opinion, a U.S. bankruptcy judge ruled that Detroit could go forward with its plans to cut city workers' pensions. He did so despite a state law making such cuts illegal, and despite his observation that Kevyn Orr, Detroit's unelected city manager, "did mislead the public about the status of pensions in bankruptcy."

In the kind of Bizarro-world inversions common to today's corporate-funded politics, Orr and the Republican governor who appointed him argued against the conservative principle of states' rights in order to move forward with their plan. When principles conflict with profits, apparently profits win every time.


Fannie and Freddie's Legal Settlements Are The Tip Of The Iceberg

OpEdNews Investors won't finance underwater mortgages. Just look at the 122 residential mortgage-backed securitizations referenced in the lawsuit filed by the Federal Housing Finance Agency against JPMorgan. Every one of those deals was sold with the claim that the pool had zero mortgages with a loan-to-value in excess of 100%. But the opposite was true. At the time of closing, all 122 deals held a material number of mortgages that exceeded the value of the property.


SEC Issues More Fines Over Magnetar Deals – and Appears to Move on

SEC Cease & Desist: Merrill Lynch to Pay $131 Million




MLPFS failed to inform investors in Octans I and Norma that an undisclosed third party named Magnetar Capital LLC (together with affiliates, “Magnetar”) – a hedge fund firm
that bought the equity in the transactions but whose interests were not necessarily the same as those of the CDOs’ other investors – had rights relating to, and exercised significant influence over, the selection of the CDOs’ collateral.
Full Post




Homeowners Fighting Back, and when the Judicial System actually lets them show their Evidence…Winning

A Judge in Florida, whom I have a tremendous amount of respect for, made quite a ruling in November. For years now homeowners have complained of rising payments on fixed-rate notes that were not explained to them by the banks other than an “escrow shortage” that couldn’t be accounted for. For years now homeowners have claimed they were told to stop paying, by that very bank, to get a modification to fix the “escrow shortage” problem. A modification the bank had no intention on giving, and developed internal controls to prevent. Homeowners who claimed they tried to make the payments they contracted for and had payments sent back, all while the banksters convinced the legislative and judicial branches that those homeowners were just wanting to live “rent free” and not paying anything. They didn’t bother to hold their returned checks in their hands like some of us have had to. 

Danielle Kelley, Esq. When your payment rises over $1,000 a month and there really is no explanation for “mystery fees” or forced place insurance policies that are completely insane price-wise, then it’s time to speak up. I’ve even seen earthquake insurance being force-placed on a North Florida panhandle resident (the USGS disagrees with that possibility however). Finally a Judge who seems to understand that BOA deliberately inflated payments with no explanation and that force placed insurance and “mystery” fees are deliberate. If you are in foreclosure because your payment “mysteriously” grew to where you couldn’t afford it, and then perhaps told to stop paying so a modification that would never happen would “fix” it, maybe it wasn’t a mistake. Maybe it was a scheme to get those overpriced loans off the books that the banks should have never made in the first place and later realized such. It’s a different world when a court of law actually allows you to present your evidence isn’t it? When you, as a homeowner, are actually allowed due process? Wow. I can only imagine how much paperwork the bank threw at the homeowner to fight that in court. Glad to see justice prevailed. 

From Judge Rubin's dissent:  In my view the dismissal of this lawsuit under the circumstances described defeats the substantial ends of justice. 

Instead, it rewards parties who, it would appear, have played a major and unlawful role in the theft of someone’s home

I would reverse the trial court’s judgment in its entirety. 


I acknowledge that some of these “facts” are allegations to be decided after trial. 

We do know that plaintiffs settled with Countrywide for $375,000, of which $200,000 represented lost equity, with the rest designated for noneconomic damages. This suggests that there was some fundamental merit to at least some of plaintiffs’ claims, that this was 
not a sham lawsuit, and this was a lawsuit that demanded the trial court’s exercise of discretion under section 583.340, subdivision (b) to avoid a miscarriage of justice.


Worried about being underwater?  There is now a product for that. It's a new insurance scam and the criminals are selling it:

A Life Vest for Borrowers

Neither product will help the multitude of borrowers now underwater.  These protections are aimed at borrowers who are in a healthy equity position and might be persuaded to pay a little more to keep it that way.

NY Times The subprime mortgage crisis gave rise to a raft of regulations intended to guard against another disastrous market bubble. But beyond that, some financial-services companies are betting that lingering fears among buyers will generate demand for products that would shield them from losses if home values took another dive.

What homeowners truly need is a Hot-Line to a prosecutor who isn't afraid of his own shadow.


JPMorgan May Face Criminal Charges for Blowing the Whistle on Madoff – To the Wrong Country

Washington on Parade While the actual charges may be coming from the Justice Department, it is Picard who has exquisitely presented JPMorgan’s wrongdoing in a manner easily understandable to the public. Last month Picard asked the U.S. Supreme Court to review an appellate court’s ruling that would bar him from suing JPMorgan and other banks for aiding the Madoff fraud in order to recover additional funds for victims. In his petition for review, Picard filed a scorching outline of his case against JPMorgan.


Lurid Subprime Scams Unveiled in Long-Running Fraud Trial

Lost amid the hoopla over JP Morgan Chase's record-setting $13 billion settlement this fall was news of another monster court resolution – a $2.46 billion judgment, the largest ever awarded after trial in a securities fraud class action case, handed down in October against a HSBC acquisition called Household International.

Matt Taibbi

Rolling Stone

It's an old case, with the trial completed way back in 2009 and the fraud in question having all taken place between 1997 and 2002. But it has crucial ramifications for the present, for one key reason:

The evidence uncovered in the Household suit should put to lie once and for all the oft-repeated myth – spread by many of America's most notable dumb people, from Rush Limbaugh to New York City Mayor-unelect Mike Bloomberg – that the financial crisis was caused by the government "forcing" banks to lend to poor people.

Unprecedented Ruling Forces Former Morgan Stanley Banker To Pay Investors $3 Million

Reuters/Singapore The case marks the first time in Hong Kong that the Securities and Futures Commission (SFC) has successfully managed to win a court order forcing an individual insider trader to pay investors money they lost out on as a result of trading with him or her.

It also contrasts with the approach taken by most other regulators, including the United States and Britain, which tend to levy fines for insider trading that go into government coffers rather than returning money to investors.

Bank of America to Pay $131.8 Million Penalty in C.D.O. Deals

The fallout from the bursting of housing bubble continues to plague Wall Street.

NT Times Bank of America agreed on Thursday to pay a $131.8 million penalty to securities regulators to settle an investigation linked to the structuring and sale of two complex mortgage securities that its Merrill Lynch division sold to investors.

Former RBS banker likely to face jail time for £3m mortgage scam

A Royal Bank of Scotland executive has been warned he faces jail after admitting pulling off a £3m mortgage scam.

FT Judge Cooke QC ordered the Crown to indicate within 14 days whether they would seek to have Ratnage tried on the single count of fraud.

The judge warned the banker a custodial sentence was likely. He said: “The quantum of it is such that it seems inevitable to me.”

Ratnage, of Brentwood, Essex, was released on conditional bail, with a residence requirement and a ban from seeking work in the financial sector.


J.P. Morgan to Pay Over $1 Billion to Settle U.S. Criminal Probe Related to Madoff

At a different point, Mr. Krantz asked: "How did it feel to commit perjury before the SEC?"

"It did not feel wonderful," Mr. DiPascali said.

WSJ The deal, which would also include a deferred-prosecution agreement with U.S. Attorney Preet Bharara, could be wrapped up by the end of year. Prosecutors have been looking for whether the bank failed to alert regulators despite numerous red flags. A central component of the case is why the bank didn't provide a formal report raising concerns about Mr. Madoff in the U.S. despite filing such a document with authorities in the U.K.

Resisting the seduction of housing speculation

The notion that long-term transformation should be avoided because a select few in the private sector have placed a bet on Washington’s inability to come together on substantive reform is foolhardy at best.

Washington Times When the government was forced to put the GSEs into government conservatorship in 2008 or face unspeakable global economic meltdown, not many would have expected that five years later we’d still be discussing the preservation of all aspects of the failed GSE model. With nearly 90 percent of newly originated loans backed by either one of the GSEs or by the Federal Housing  Administration (FHA), this current model of government dominance of the mortgage market is ultimately unsustainable.

Lament of the Plutocrats

Why Wall Street is fed up with the White House—and Republicans too.

On a recent afternoon, executives at Goldman Sachs invited a few hundred major investors to the auditorium of the firm’s gleaming headquarters in lower Manhattan. The bankers and their guests filed into the sleek, futuristic room and turned their eyes to Hillary Clinton.

Politico Certainly, Clinton offered the money men—and, yes, they are mostly men—at Goldman’s HQ a bit of a morale boost. “It was like, ‘Here’s someone who doesn’t want to vilify us but wants to get business back in the game,’” said an attendee. “Like, maybe here’s someone who can lead us out of the wilderness.”
Clinton’s remarks were hardly a sweeping absolution for the sins of Wall Street, whose leaders she courted assiduously for financial support over a decade, as a senator and a presidential candidate in 2008.

Sample Quiet Title Lawsuit

SACKRIN & TOLCHINSKY, P.A This is a sample real estate lawsuit related to a specific set of facts and circumstances and should not be used or relied upon in any quiet title lawsuit. It is being provided for illustrative purposes only. We recommend and urge you to consult with an experienced
real estate lawyer for professional advice as each case is unique.

Um. Aren't ALL servicers guilty of this?

MSFraud can prove EMC Mortgage and Bank of America did the same thing.

Former Chief Executive of Mortgage Servicing Company Sentenced for Scheme to Withhold Funds from Wells Fargo Bank

The former President and Chief Executive Officer of U.S. Mortgage, a loan servicing company, was sentenced to serve 18 months in prison for his role in an $8 million scheme to defraud Wells Fargo Bank.

Yuma News According to the indictment, from 2004 to 2009, Mr. Gross and U.S. Mortgage withheld over $8 million in loan payoffs that were due Wells Fargo Bank by submitting to the bank reports stating that numerous borrowers were continuing to make monthly payments when in fact they had paid off the loans in full. Rather than remit the full payoff amount to Wells Fargo Bank, Gross and U.S. Mortgage forwarded only what the borrowers’ monthly payments would have been and retained the difference in U.S. Mortgage’s bank account. To deceive Wells Fargo Bank about the status of paid-off loans, Gross and U.S. Mortgage created fake amortization schedules indicating that borrowers who had sold and paid off homes were continuing to make monthly payments. In addition to withholding loan payoff amounts to which he was not entitled, Gross charged Wells Fargo Bank fees to service mortgage loans that had been paid off.

Hidden disaster in new budget: Demonic plot to raid pensions

What you won't hear about this new deal: Public workers will get eviscerated, to achieve "deficit reduction"

David Dayen According to Sen. Murray, the increase in contributions now equals about $6 billion over 10 years. But negotiators traded some of the cuts to federal employee pensions with different cuts to military pensions, also totaling $6 billion. So whatever the occupation, people who work for the government will bear the brunt of the pain.

Long Island Foreclosures Spur Looters Amid Home Limb

Brenda Clarke, a single mother of three on Long Island, New York, said looters at the foreclosed home next door stoked her deepest fears about getting evicted.

Bloomberg Scavengers grabbed clothing, toys and furniture that were tossed to the curb by the sheriff’s department last month while the neighbors living in the home were at work. Clarke, who’s been fighting to keep her Islip home for the past five years, begged them to stop.

“I felt like I was defending my own house,” she said. “They’re coming here too. It’s just a matter of time.”


The Quiet Title option to eminent domain mortgage seizure and bank foreclosure

Halfway To Concord A Quiet Title Action is a lawsuit to determine who owns a piece of real estate, and so “quiet” any disputes over the title. Only a homeowner can bring Quiet Title Action against unlawful claims, including from banks, on the lien of a property. An action to Quiet Title gives property owners an opportunity to inexpensively defend themselves, to restore order to their chains of titles caused by the mortgage meltdown, and to render their properties marketable once again, free of third-, fourth-, or fifth-party claims.

This Man Went to Prison for Eight Years. Why Don’t Other CEOs?

L. Dennis Kozlowski, former CEO of Tyco International Ltd., is is out of prison after serving an 8 1/3-year sentence. It’s notable for observers of American corporate corruption because Kozlowski’s conviction in 2005 marked a moment in which American prosecutors seemed to have turned serious about white-collar crime.

Bloomberg Still, even if fraud wasn’t behind all the losses of the mortgage boom, billions of dollars of loans made in the mortgage boom were riddled with fraud at every level.

The folks who actually did stuff that was illegal often can’t be distinguished from those smart, lucky, or cynical enough to bet on the new paradigm and get out when the getting was still good. It might seem intuitive that the more fraud there was the easier it would be to find people to prosecute. The reality has been the opposite

Deceptive foreclosures in Virginia

Goodrow v. MacFadyen 

Defendants ran a foreclosure operation where the functioning of the
various interrelated entities masked from homeowners the true manner in
which the foreclosures commenced. 

Bryl Law When conducting foreclosures,
Defendants used a "lost note letter" to speed foreclosure in lieu of obtaining
proper documentation or the original note.  Defendants structured their
business "to artificially inflate their 'Attorney Performance Rating' in the LPS system and thereby continue to get more foreclosure referrals." Defendants
created a Substitution of Trustee document that allowed Defendants to
conduct the sale improperly because the document misidentified loan
servicers as noteholders and the signators signed in the Trustee's name,
but not their own.


New Bank Strategy: There was no securitization — IRS AMNESTY FOR REMICs

The IRS has granted AMNESTY on the REMIC trusts because none of them actually performed as required by law. So we can assume that the money from the lender-investors went through the investment banks acting as conduits instead of through the trusts acting as Real Estate Mortgage Investment Conduits.


Living Lies This leads to some odd results. If you foreclose in the name of the servicer, then the authority of the servicer is derived from the PSA. But if the trust was not used, then the PSA is irrelevant. If you foreclose in the name of the trustee, using a fabricated, robo-signed, forged assignment backdated or non-dated as is the endorsement, you get dangerously close to exposing the fact that the investment banks took a chunk out of the money the investors gave them and booked it as trading profit. One of the big problems here is basic contract law — the lenders and the borrowers were not presented with and therefore could not have agreed to the same terms. Obviously the borrower was agreeing to pay the actual amount of the loan and was not agreeing to pay the overage taken by the investment bank.

No Bedrooms, No Bath, No Condo!

In a perfect real estate fraud, a loan servicer and a bank sold investors a foreclosed condo that did not exist, the buyer claims in court.

Courthouse News The LLC won the condo with a bid of $39,300, and "was led to believe, by the said notice of sale and his successful bid at the public auction that it had purchased a condominium valued at $125,000."
However: "The condominium did not exist and plaintiff was thereby deceived and defrauded by the advertisement of a nonexistent condominium unit."

U.S. Bancorp Settles With Freddie Mac For $53 Million

MortgageOrb U.S. Bancorp has entered into an agreement with government-sponsored enterprise Freddie Mac that resolves substantially all repurchase obligations related to representations and warranties made on loans sold to Freddie Mac between 2000 and 2008.

Disturbing oral argument

Bernardo v. PNC Mortgage    The Defense of Foreclosure is Dangerous

Weidner Law This is a very important video, one that every practitioner and litigant needs to review and consider especially in the context of the aggressive moves to punish homeowners in foreclosure.

Shall Not claim both the mortgage and note have been assigned when, in fact, only the mortgage has been transferred by the assignment.

Nationwide Title Clearing settles 'robo-signing' suit in Illinois

Illinois and Nationwide Title Clearing Inc., have entered into a consent decree that dismisses a lawsuit filed against the company last year, alleging it filed faulty mortgage documents with county recorders.

Chicago Tribune The agreement stipulates that Nationwide will pay the attorney general’s office $350,000 and will not process certain documents without performing detailed review by the person signing them.

Illinois v. Nationwide Title Clearing Consent Decree

Assignments into and out of the Mortgage Electronic Registration Systems, Inc . ("MERS") shall not claim that both the mortgage and note have been assigned when, in fact, only the mortgage has been transferred by the assignment.

BOMBSHELL AFFIDAVIT in Countrywide/Bank of America Case

“I worked at Countrywide and that’s NOT my Signature!”


Weidner Law Wow….a whole new wrinkle on the whole “surrogate signing” and “who cares about fraud…your client isn’t paying his mortgage” argument…

The nation’s banks engaged in widespread and systemic fraud.

And they continue to get away with it…..

There will come a day of reckoning for what destruction has been wrought upon our nation’s legal system. 

Here's the Story Behind the Big Wall Street Reform Rule That Was Just Approved

Wall Street lobbying also played a big part in delaying the unveiling of the final rule. The financial industry pushed like mad to get key loopholes into the regulation. 

Mother Jones "It's relentless, nonstop, day and night lobbying," Dennis Kelleher, the president of the financial reform advocacy group Better Markets, said a year ago. "It is absolute total nuclear war that Wall Street is engaged in here." One loophole Wall Street tried to get written into the regulation would characterize certain forms of risky trading as hedging against risk. (Yes, you read that correctly.)

Volcker Rule Finalized With Wall Street Responsible For Judging Compliance

Huff Post Big Wall Street banks face an uneasy future after U.S. regulators on Tuesday finalized the Volcker Rule, a measure that attempts to curtail big bets on certain financial instruments. But in a potential concession, the banks themselves largely will be responsible for determining whether they're in compliance.

Senate confirms Rep. Mel Watt as Fannie Mae, Freddie Mac regulator

The Senate voted 57-41 on Tuesday to confirm Rep. Mel Watt to head the agency overseeing Fannie Mae and Freddie Mac, ending a long battle by President Obama to install a regulator open to more aggressive action to help struggling homeowners.

L.A. Times "He’s the right person to protect Americans who work hard and play by the rules every day, and he’ll be the right regulator to make sure the kind of crisis we just went through never happens again," Obama said.

Watt takes over the agency as lawmakers in both parties work on reforming the housing finance system and replacing Fannie and Freddie.


The firm that threatened to foreclose on hundreds of struggling D.C. homeowners is a mystery: It lists no owners, no local office, no Web site.

Washington Post The Post spent three months examining Aeon’s corporate history, traveling to Chicago, Cleveland and three counties in Maryland and reviewing hundreds of business and land records, to find out who is behind the company that has affected thousands of homeowners across the country.

The trail begins and ends with a 52-year-old Chicago lawyer named Mark Alan Schwartz.


‘Long and Arduous Process’ to Ban a Single Wall Street Activity

Its chief intention is to prohibit regulated banks from using customer money to trade for their own gain.

DealBook The rule has plenty of potential gray areas that banks may be able to exploit. As a result, regulators will have to remain extremely vigilant, and understand highly complex trading books, if they are to properly enforce the rule.

demand a foreclosure moratorium

In the 1930’s, 25 states enacted moratoriums on foreclosures. The Michigan Moratorium Act meant that anyone facing foreclosure got an automatic 5 year stay on the foreclosure, with a judge ordering a reasonable payment based on the homeowner’s ability to pay. 

Home Defenders League These laws were upheld by the U.S. Supreme Court in the case of Home Building & Loan Building Association v Blaisdell, which held that the people’s right to survive during an economic emergency superseded the contract clause of the U.S. constitution. The moratoriums were not a result of the generosity of the legislatures or the courts, but were a direct result of the actions of workers and communities flooding the streets and preventing the foreclosures that were being carried out. The legislatures and courts essentially ratified the moratoriums that were won in the streets.

N.Y. Governor Opts to Give Second Chance to Underwater Borrowers

(It is unclear what they will do when the bank can't prove ownership and the title is already corrupted.)

Mortgage Servicing News “We will continue to explore new options to reach as many homeowners as possible and deliver relief to struggling families facing foreclosure,” says Benjamin Lawsky, superintendent of financial services, who along with Gov. Andrew Cuomo sees principal reduction as a win-win solution for homeowners “trapped in underwater mortgages” at much greater risk of losing their homes, the surrounding neighborhoods impacted by blight and investors.

Florida’s Hardest Hit Foreclosure Assistance: Who’s Monitoring The Money Going Out The Door?

Treasury Approved Large Decreases in the Estimated Number of Homeowners to be Helped by States Through TARP’s HHF Program

Matt Weidner Law At the start of 2011, Florida estimated that it would provide HHF
unemployment assistance to 53,000 homeowners. As of June 30, 2013, Florida lowered that peak estimate to 45,000 homeowners and has helped 8,760 homeowners with HHF unemployment assistance.

In mid-2013, Florida introduced a new program to modify mortgages for an
estimated 1,500 homeowners. As of June 30, 2013, no homeowners had been helped under this new Hardest Hit Foreclosure program.


Big Banks About to Start Booking Second Mortgage Losses They Can No Longer Extend and Pretend Away

Regulators played a direct hand in this chicanery. If the regulators had forced the banks to write down HELOCs, banks would have much less incentive to try to wring blood out of the turnip of underwater borrowers (particularly if the regulators had made clear they took a dim view of that sort of thing). But the authorities were far more concerned about preserving the appearance of solvency of the TBTF players.

naked capitalism If that isn’t bad enough, the banks went one step further. Banks were engaging in negative amortization, as in not even requiring borrowers to pay all the interest charges, which meant they were adding unpaid interest to principal in order to keep the mortgages looking current so as to avoid writing them down.

The math of payment shock means the Reuters story is the harbinger of more accounts. I only hope some of them focus on how banks and regulators made matters vastly worse for borrowers through their efforts to save their own hides.

Those VA Loans and Ginny Mae Loans Were Also Securitized

None of the GSE’s are lenders. They don’t loan money to anyone. So if the allegation is made that this was a Fannie or Freddie or VA loan from the start, then the originator was not the lender and neither was Fannie or Freddie or any other GSE. These are strictly guarantee agencies who don’t part with a nickel until the loan is foreclosed and the home is sold. THEN they guarantee up a certain amount and pay it out, drawing from the US Treasury as necessary.

Living Lies As you can see from the attached files, if you will read them carefully, you will see that the custom and practice of the GSE was, if it guaranteed the loan, to serve as either the conduit or the Master trustee for an asset backed pool where the trust beneficiaries funded the origination or acquisition of the loan. This is a factor that did not get adequately covered in Shack’s excellent opinion recently in New York where he chastised Chase and others for playing with the ownership of the loan to suit the need for foreclosure instead of presenting facts that would protect the people who are actually taking a loss.

Nationstar Planning RMBS Backed by Seasoned Loans: S&P

Mortgage Servicing News Nationstar bears a rating S&P indicates means it may have financial difficulty in meeting repurchase claims for a representation and warranty breach as the deal’s only R&W provider. S&P increased its loss expectations for tranches with higher ratings to account for this risk.

Jumbos Surge 34% With Record ARMs Belying ’08 Anxiety: Mortgages

A decade ago, jumbo ARMs helped fuel the housing bubble by letting buyers qualify for homes they only could afford at the low rates before they reset. Banks approved mortgages based on the assumption that house prices would keep rising and the loans could be refinanced before higher costs kicked in.

Bloomberg Cash-rich banks, including Wells Fargo and Bank of America, are using ARMs as a hedge: the loans’ longer-term payments will move in tandem with the lenders’ expected increases in borrowing costs as interest rates rise.

When home prices stopped climbing in mid-2006, both jumbo and conventional ARM borrowers began defaulting in higher numbers, contributing to the collapse of the mortgage market that in turn led to the most severe financial crisis in decades.

Class Calls Bank of America Inspection Fees Racketeering

Bank of America charged hundreds of thousands of distressed homeowners millions of dollars for unnecessary house inspections that forced them to default on mortgages, according to a RICO class action.

Courthouse News Servicing companies are less concerned about whether borrowers are keeping up with payments on their loans.

"Financial institutions like defendants see opportunity where investors see failure, because borrowers are captives to companies who service their loans," the lawsuit states. "

BofA $500 Million Countrywide Settlement Wins Approval

“An immediate cash payout that avoids the risks and expenses associated with bankruptcy, protracted litigation, appellate review, and several legal challenges militates in favor of final approval,” Pfaelzer said in her ruling yesterday.

Bloomberg The $500 million deal is separate from an $8.5 billion settlement pending in state court in New York that will resolve claims that Countrywide breached its contractual obligation to replace delinquent mortgages that were pooled for the securities.

Countrywide still faces securities fraud claims by investors who opted out of the class-action case after Pfaelzer excluded claims for securities that weren’t owned by investors who filed the very first cases against Countrywide as early as 2007 in California state court.

Fannie Fraud Case Nets $153 Million Settlement

The settlement approval comes one year after Judge Leon ruled that the class failed to prove that retired Fannie Mae senior executive Franklin Raines was liable for securities fraud.

In Re: Fannie Securities Litigation

Courthouse News The Federal National Mortgage Association and its former accountant, KPMG LLP, will pay a class of the state-sponsored corporation's shareholders $153 million to settle a decade-old securities fraud complaint.
The class sued Fannie Mae in 2004, claiming that it and three executives issued false and misleading financial reports and other statements that artificially inflated the price of Fannie Mae's securities.

City Serves Woman Eviction Notice on Her 100th Birthday 

AOL Mrs. Passione said she would have preferred to celebrate her 100th birthday in Italy, but because of everything that has been going on with her apartment, she was afraid to leave.

Whistleblower Describes How Private Equity Firms Flagrantly Violate SEC Broker-Dealer Requirements

This controversial practice has been going on for decades, and it is no secret. The PE firms collectively have reaped billions of dollars through this ruse.

naked capitalism Dozens, if not hundreds, of articles have been written about it. Typically, these stories depict these transaction fees as an abuse of both the portfolio companies and the private equity fund investors, since portfolio company revenues are diverted into the pockets of private equity managers. For instance, a account about the whistleblower published last week by the usually pro-industry CNBC, where the headline itself described transaction fees as “private equity’s ‘crack cocaine.'”


The Way of a Foreclosure Trial

The plaintiff often lacks admissible evidence or proper witnesses. That does not stop them from trying to use affidavits instead of business records, or failing to fill in the name of a person on a witness list. (The witness list is supposed to be filed prior to the trial with names of actual people who can be questioned and give answers.) 

Rusty Collins  The plaintiff is the party that filed the foreclosure lawsuit against the homeowner. The plaintiff is the lender, or in many cases, the loan servicer (and in some cases the plaintiff is not the proper party and lacks authority to foreclose on the specified property). If there is no legal defense against the foreclosure suit, then generally the foreclosure happens. The majority of Florida foreclosure cases are not defended, so the plaintiff is really surprised if they do encounter a foreclosure defense. 

Florida Foreclosure Courts- Giving Unfair Assistance To Banks (The Dangerous Precedent This Establishes)

The integrity of our entire system of government and in fact our very notions of what it means to be American citizens depends on the ability and willingness of judges and lawyers to stand up and fight. Where is that fight?

Matt Weidner Law I recently had a trial continued THREE TIMES! THREE TIMES! right in the middle of trial only because the plaintiffs attorney was not prepared to go forward with their case….the court directed the plaintiff to go out, collect (or create) the evidence it would need to win and come back better prepared to win. Similarly, I’ve had hearings continued multiple times when the plaintiffs failed to prepare or have the evidence they need to properly respond to the issues in their cases.


Full Post

Foreclosure errors still common at big banks

(The banks don't want to fix them, and this country doesn't have anyone tough enough to force them. MSF)

More than half a decade into the foreclosure crisis and the big banks still haven’t cleaned up their act, according to a new administrator’s report.
In the first half of 2013, three of America’s largest lenders continued to make errors when foreclosing on properties.

Real Deal The ongoing errors came to light in a report released last week by Joseph Smith, the monitor of the $25 billion national mortgage settlement. The report found that Citi had a fail rate of 25 percent on short-sale document collection timeline compliance; Chase failed a pre-foreclosure initiation metric and loan modification timeline; and Bank of America failed three metrics, one of which regards the amount owed to bankrupt homeowners.
It’s appalling,” Liz Ryan Murray, policy director of National People’s Action. “The standards are common-sense customer-service issues, [like] don’t screw up the billing … and they can’t even get these right.” 


Tracking the Volcker Rule

Five regulatory agencies to vote Tuesday.

NY Times In a bid to curb the free-wheeling culture that led to 2008 financial crisis, lawmakers restricted the ability of banks to invest and trade for their own accounts. But first, financial regulators had to agree on the rules.


JPMorgan Linked to China Hiring

Federal authorities have obtained confidential documents that shed new light on JPMorgan Chase’s decision to hire the children of China’s ruling elite.

DealBook The documents, which also include spreadsheets that list the bank’s “track record” for converting hires into business deals, offer the most detailed account yet of JPMorgan’s “Sons and Daughters” hiring program, which has been at the center of a federal bribery investigation for months.

Jury Convicts Two Los Angeles Sheriff’s Deputies of Mortgage Fraud 

FBI Under federal statutes, Nash and Nshanian are each subject to a sentence of up to five years in federal prison without parole for the conspiracy and up to 20 years in prison on each count of wire fraud. 

Ex-Goldman Trader Gets Nine Months for Concealing Loss

(Now can they do it in reverse and imprison the bankster's cartel for stealing trillions from homeowners?)

Bloomberg Goldman's Matthew Taylor was sentenced to nine months in prison for concealing an unauthorized $8.3 billion trading position in 2007 that caused the bank to lose $118 million.

U.S. District Judge William H. Pauley in Manhattan ordered Taylor, 34, to repay the full amount of the loss to Goldman Sachs, concluding the New York-based bank is a victim of his crimes and is therefore entitled to the restitution.

JPMorgan Asks Judge to Keep Draft U.S. Fraud Suit Secret

JPMorgan had a hearing behind closed doors with a Pennsylvania judge in its bid to keep secret a draft of a government lawsuit related to its $13 billion settlement with the U.S. as well as the identity of an employee who cooperated in a federal probe.

Secret Document

Bloomberg Prior to the start of a hearing today, Wettick closed the courtroom to the public. Lawyers on both sides declined to comment after the hearing.

The FHLB lost $2.3 billion on mortgage-backed securities it purchased from JPMorgan. The losses aren’t covered by the record U.S. settlement resolving allegations that the bank misled buyers about the soundness and risks of the investments.


Money May Be Up For Grabs For Families After Foreclosure

What they didn't know before our sister station KPNX approached them, was that their foreclosure might be a source of $90,000. It's something called excess sales proceeds. Here's how it works.

WFMY When a house is foreclosed on, it may go to auction. But if the house sells for more than the amount it was under water, the additional funds are called excess proceeds. Once the lender gets the money that is owed on the house the extra money must be held at the treasurer's office for three years waiting to be claimed.





This is a huge problem. Will law enforcement now investigate judges and bank lawyers?

Small Town Judge – Major Ethics Issues – Plots Against Homeowner with Bank’s Attorney


Deadly Clear In a small Kentucky county, a homeowner just like you encountered the unthinkable – proof that his judge was prejudice and even worse – the judge was assisting the opposing counsel for Deutsche Bank in a plot against him. 

It is one thing for a judge to own stock in the company that you are opposing and fails to recuse himself from your case; but when a judge actually conspires with the opposition to your detriment and eventual loss – well, reprehensible doesn’t quite cover it.

Justice Obscured: State supreme court judges reveal scant financial information

Last December, the California Supreme Court declined to hear an appeal filed by a couple who had accused financial giant Wells Fargo of predatory lending.

One justice, who owned stock in the bank, recused himself from the case. But Justice Kathryn Werdegar, who owned as much as $1 million of Wells Fargo stock, participated — and shouldn’t have.

Center for Public Integrity The Center for Public Integrity learned of Werdegar’s financial stake thanks to California’s relatively strong financial reporting requirements for justices. But California’s law is an exception.

Forty-two states and the District of Columbia received a failing grade in a Center evaluation of disclosure requirements for high court judges. And not a single state earned an A or a B.

After reviewing three years of personal financial disclosures, the Center found judges who authored opinions favoring companies in which they owned stock. The Center found judges who ruled on cases even when family members were receiving income from one of the parties. And it found judges who accepted lavish gifts — like a $50,000 trip from a lawyer.

Book-Cooking Bank Gets to Keep Cooked Books

Just because the SEC says a company's earnings were fraudulent doesn't mean the company will ever be required to correct them.

Bloomberg The funny part: Fifth Third, which is Ohio's largest bank, has never acknowledged to this day that its numbers were in error. The SEC isn't requiring it to do so now. A Fifth Third spokesman, Larry Magnesen, said the company considered whether it needed to do a financial restatement and decided it didn't.

More Welfare for Wall Street: One in Three Bank Tellers Need Public Assistance

A new study finds that we’re also subsidizing BANK profits by keeping their low-wage workforce out of poverty.

Bill Moyers Big banks eating up taxpayer subsidies isn’t a new story. We heard a lot about the hundreds of billions of dollars doled out to Wall Street in the Troubled Asset Relief Program (TARP). And a May analysis by Bloomberg News estimated that the six largest banks alone had scooped up over $100 billion more in subsidies since 2009.

U.S. judge weighs penalties after Bank of America fraud verdict

Reuters A U.S. judge is considering an alternative that could result in Bank of America paying much less than the $863.6 million the government is seeking as a penalty for the sale of defective mortgages before the financial crisis.

At a hearing on Thursday, U.S. District Judge Jed Rakoff in Manhattan asked the bank and the Justice Department to brief him on the alternative, which is based on the gains rather than the losses resulting from the sales.

PNC Reaches $89 Million Accord With Freddie Mac on Bad Loans

Bloomberg The sum, minus credits of $8 million, covers existing and future refunds tied to about 900,000 loans between 2000 and 2008, Pittsburgh-based PNC said today in a statement. The deal also compensates for past and potential losses where mortgage insurance failed to cover the cost, PNC said.


Efforts continue to fight foreclosure rescue scams

Chicago Tribune Foreclosure activity is on the decline, but officials continue to struggle to stop desperate homeowners from being victimized by individuals who make false promises about mortgage loan modifications.

The schemes, according to investigators, are growing more complex and frequently target certain populations of homeowners.

LA Sues Bank Of America Over Wave Of Foreclosures

AP The Los Angeles city attorney is suing Bank of America for mortgage discrimination it claims led to a wave of foreclosures that cost the city a fortune in extra expenses and lost taxes.

LA Sues Wells Fargo, Citigroup Over Foreclosures

The twin lawsuits, filed in federal court, are the latest fallout from the 2008 collapse of the subprime mortgage industry, which sparked a string of actions against various lenders by federal agencies and city governments.

abc News The city attorney's suits allege a "continuing pattern of discriminatory mortgage lending practices" in Los Angeles that violate the federal Fair Housing Act. They claim Wells Fargo  and Citigroup at first refused to grant mortgages in minority neighborhoods — a practice known as redlining — and later targeted black and Hispanic neighborhoods for predatory loans, known as reverse redlining.



Did government agency threaten to move against towns that use eminent domain to help residents avoid foreclosure?

NJ Spotlight As Newark became the second New Jersey city moving tentatively to help embattled homeowners avoid foreclosure, the American Civil Liberties Union of New Jersey made good on its promise to put some legal muscle behind the effort.

The state ACLU on Thursday joined its Northern California counterpart to file a Freedom of Information lawsuit against the Federal Housing Finance Agency on behalf of community groups around the country.



How Risky is Citigroup’s New, Improved Version of a Once-Toxic Type of Synthetic CDO?

We are all still paying the price for the stream of ever more leveraged credit derivatives that fueled the world’s greatest credit bubble. It appears that some of these are attempting a comeback.


Eric Ben-Artzi

The purpose of the first synthetic CDO, created by JPMorgan in the ‘90s, was to relieve the bank of risky debt it actually owned. The riskier LSS deals arrived circa 2005, and were mostly arranged by trading desks which did not own the referenced bond portfolio. Rather, they simply turned around and sold insurance on the full amount of corporate debt, using regular CDS. The profit – the difference between the fees on the insurance sold and the cost of the insurance bought – was then claimed upfront and handed out in bonuses to the traders and salespeople at the end of the year.

More Lawsuits, Still No Real Progress and No Coverage by Media

The number of stories on the illegal Foreclosures, the charges of FRAUD by everyone involved from lenders (investors) to insurers to guarantors to borrowers, the verdicts and judgments decided against the banks, and the analysis that the assets of the banks are fictional, the total is ZERO.

Living Lies The media was scorched with the fact that despite a constant culture of continuing corruption and absurd “transactions” in which paper goes back and forth, and calling that economic activity with "profit,” and stories of the human tragedy of Foreclosures all based on what are now obviously fraudulent schemes, the media is silent.

My question is why the displacement of more than 15 million people - in a single scheme - is not the main question in American discourse, media and politics — especially since the banks have admitted by conduct or expressly their wrongdoing?

Former Chicago Cop Cops Plea in Mortgage Fraud Case

Mortgage Daily A former longtime Chicago police lieutenant pleaded guilty today to participating in a mortgage fraud scheme involving a Northwest Side real estate mogul and a crooked former suburban police chief.

$5 million home foreclosures on rise

In the market for a mansion? There may be some bargains out there - if you don't mind a corrupted title.

Market Watch In the immediate aftermath of the 2008 housing crash, ultra-rich homeowners had the financial means to delay foreclosure, Wachter says, or were able to restructure their mortgages and their payment plans. “Some owners were holding on to them,” she says.

Town Council seeks to buy back blind woman's house

Officials in the small Indiana town of Cedar Lake are taking action to make sure a blind woman can stay in the house she lost in a property dispute with an investor who bought her home of 55 years for $43 at a tax sale.

Chicago Tribune State law would force Pullins to sell the house for a fair market price, determined by third-party appraisals, Niemeyer said. When the sale closes, Cedar Lake officials will offer Pittman a "life estate," a legal arrangement that would allow her to stay in the house for the rest of her days. Afterward the land would become part of the surrounding park, Niemeyer said.

ELIZABETH WARREN TO WALL STREET CEOS: Come Clean About The Think Tanks You're Paying

Business Insider Yesterday Senator Elizabeth Warren (D-MA) sent a letter to every major Wall Street CEO, urging them to disclose their financial contributions to Washington think tanks in an "effort to indirectly influence policymaking."


Big Banks Mortgage Fraud

Despite repeated lawsuits, fines, penalties, outraged public protests, and scathing editorial exposés, the banks’ actions throughout the Justice Department’s crusade against them shows that they are really not afraid and that they really haven’t learned any lessons at all. They are still neglecting their fiduciary obligations to their customers, and they are still defying the DOJ's authority.

Wealth Daily After more than four years, the U.S. Justice Department is finally bringing to justice the banks responsible for the mortgage-backed securities scheme that triggered the 2008 real estate and financial crises.

Or is it simply putting on a show as part of a public relations campaign to placate the people’s demand for justice? The big banks certainly seem to be carrying on as though nothing has happened.

Banks Sending Out Satisfactions of Mortgage to Cover Up Crimes

They took a real Mortgage and ballooned it into 10 mortgages and used them to move elicit funds, thus when you research the accounting part of it you find trustees and investors have been paid even if borrowers paid or not paid their mortgage. 

Living Lies Once the investment banks discover their error on tracking the difference and discovered the originating loans were hanging in the wind and ultimately the FDIC would be enquiring and auditing they had two choices. Send out satisfactory of loans or foreclose.
Multiple individuals I have met with received a satisfactory of loan when in fact they had not paid off their loan and were trying to re-finance. Ironically it made it through the courts and since the satisfactory of loan was sent to the borrower - it stands.

The Downside to F.H.A. Loans

NY Times Mortgages insured by the Federal Housing Administration are the go-to product for borrowers who don’t have much cash for a down payment. But the required mortgage insurance premiums have become so costly that some critics argue that the agency is taking advantage of borrowers who have few other options.

  The Daily Show Goes After A Peculiar Blackstone Deal And Rips Financial Media For Not Covering It

Related: Blackstone Unit Wins in No-Lose Codere Trade: Corporate Finance

Daily Show



Private equity firm Blackstone structured a strange financial maneuver to pay Codere to force it to miss a debt payment, thereby triggering a credit default swap to the tune of $15.6 million.

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Distressed Borrowers Burned in Mortgage Fraud Scheme

Federal agents arrested two Stockton residents Wednesday in connection with a mortgage fraud scheme.

Mortgage Daily The indictment says Marquez and Keatts assisted homeowners who were facing default on their home loans to arrange short sales of their properties, prosecutors said.

The homeowners did not know the defendants had the properties sold to straw buyers.

Marquez and Keatts face a maximum of 30 years in federal prison and a $1 million fine each if convicted.

Elizabeth Warren Attacks Beltway Powerhouse Third Way as Fronting for Wall Street

naked capitalism Wow, the gloves are finally coming off. Elizabeth Warren has been making good use of her Senate bully pulpit in terms of keeping the excessive power of the big banks and the haplessness of regulators in the headlines. 



The documents establishing these requirements constitute impermissible hearsay unless properly authenticated.

4closusre Fraud To establish its entitlement to foreclosure, SunTrust needed to introduce the subject note and mortgage, as well as the acceleration letter sent to the Kelseys. See Ernest v. Carter (holding that foreclosure plaintiffs must show: (1) an agreement, (2) a default, (3) an acceleration of debt to maturity, and (4) the amount due)


Spill it, Wall Street liars!: How to make these crooks finally come clean

Another month, another raft of bank scandals -- with no accountability. Here's a serious way to finally change that

This game, at least the way it’s currently being played, benefits nobody. The victims are not compensated anywhere close to the level of harm: Even the $104 billion still expected to come out of mortgage abuses does not approach the cost of the financial crisis. Individual bankers are by and large not held accountable for the crimes.

David Dayen The first and most important outcome of a financial truth commission would be the acquisition of the complete pattern of abuse that led to Wall Street’s dominance, making it much more difficult for them to dominate again. Only on extremely rare occasions do subjects of a truth and reconciliation commission ever return to lead a country after the release of the findings. Since destruction of evidence is a feature of many current investigations, the commission, global in scope, could ensure the evidence is preserved and never forgotten.

The findings could guide future regulatory responses, essentially opening up Wall Street’s black box for regulators to prod.

Libor Lies Revealed in Rigging of $300 Trillion Benchmark

Did LIBOR rate rigging negatively affect homeowners? Absolutely, stated Eliot Spitzer.

Deadly Clear Now, banks are facing a reckoning, as prosecutors make arrests, regulators impose fines and lawyers around the world file lawsuits claiming the manipulation pushed homeowners into poverty and deprived brokerage firms of profits.

“Here was the market doing something blatantly dishonest. I never imagined that people in the financial markets were saints, but you expect some moral standards.”


Exclusive: U.S. plans new bank fraud cases in early 2014 - attorney general

Reuters In an interview with Reuters, Holder would not say which companies or how many could face lawsuits but said the Justice Department was in contact with them and it was hard to say whether the talks would lead to settlements.

"We have a number of investigations that are coming to a head at the same time," he said. "It is my hope that the next round of these cases will be filed soon after the new year."

Conflicts of Interest Abound in State Supreme Courts

A new investigation by the Center for Public Integrity reveals troubling conflicts of interest in state supreme courts nationwide.


Charts:   How the states scored on judicial financial disclosures

Mother Jones


Center for Public Integrity

CPI combed through the financial disclosure forms of state supreme court justices in all 50 states and reviewed the states' disclosure laws for judges. Their findings on both fronts are discouraging.

CPI discovered several instances of justices writing opinions that favored companies they had financial ties to. An Arkansas justice ruled in favor of a company that had been paying his wife a salary of as much as $12,499 for two years. A high court judge in California ruled in favor of Wells Fargo despite owning up to $1 million of the bank's stock—even as a colleague who owned less stock recused himself. Other justices accepted perks from lawyers —from country club memberships to a $50,000 Italian vacation. 


Economic Corruption: Foreclosure Courtrooms Show Corruption Is The Greatest Threat This Nation Faces

Every day I see homeowners and their attorneys threatened with punishment and sanction for daring to challenge the grossly improper conduct that banks use in their efforts to throw families out into the street, but I can find no examples of real consequence or punishment for those who set these evil schemes in motion.

Matt Weidner, Esq. It is truly frightening to appear in courtrooms, representing families that have not just homes to lose, but also their reputations. Worse by far than all of that is the fact that as these consumers find themselves thrust into a system of gross unfairness, they quite reasonably so lose their faith in what this governing system that is punishing them as become.

Such choice, free will and self determination has been stripped from us. Socially, economically and through legal policy.


The Mystery of Servicer Non Stop Advances

Judges are surprised to learn that the foreclosure case in front of them was filed despite the payments actually received by the alleged creditor through third parties. In other words the case in front of them does not actually present a default from the creditor’s point of view even tough the borrower stopped paying.

Living Lies Worse yet, those third parties have waived subrogation or any right of action against the borrower to prevent multiple parties from suing the same defendant on the same debt. The insurers are mad as hell. But the servicers are curiously silent — possibly because they are not really paying the servicer advances which are instead coming from the pool of funds held by the investment banker from the original investment of the trust beneficiaries and the receipt of insurance, credit default swaps, guarantors and even sales to the Federal Reserve.

Full post

Foreclosure Defense Attorneys Physically Attacked By Plaintiff Attorneys Outside Courtrooms

It actually happened…outside a courtroom. Files and papers and law books strewn all across a parking lot.

Police called…police report prepared.

Matt Weidner, Esq. Wow. We know that things are bad out there for the attorneys and advocates that are fighting for consumer justice and the very foundation of the legal system. Courtrooms can be difficult environments for those that dare to challenge the banks and the organizations that are destroying this country.

And now attorneys that defend homeowners have to worry about being physically attacked outside courtrooms.

PHH, state reach $6.25M consumer fraud settlement

"This settlement provides relief to a large number of individual consumers who were subjected to unacceptable mortgage servicing practices," Hoffman said in a release. "It also ensures appropriate reforms in PHH's mortgage-servicing operations."

NJBiz Mount Laurel-based mortgage outsourcing company PHH Corp. has entered a $6.25 million settlement with the state resolving claims the company “misled financially struggling homeowners who sought loan modifications or other help to avoid mortgage delinquency or foreclosure,” according to an announcement today from acting state Attorney General John Hoffman.

The settlement requires no admission of wrongdoing or liability.


Texas Attorney gets 20 years in federal prison for bribing judge

Valley Central An attorney who once bragged that he "owned a judge" has been sentenced to 20 years in federal prison and ordered to pay more than $12 million dollars in restitution in a "Court For Cash" scandal.

"Thanks to the U.S. Attorney's Office and thanks to the FBI, we are cleaning up the system," Zavaletta said. "We shouldn't throw out the system due to a few bad apples."



Ex parte communication between Judge and Foreclosure-Mill caught on tape


After receiving this motion Carole Schneider withdrew from the case.

Glen Augenstein Judge Conrad: Who is the real party of interest?"
Carole Schneider: (whispered) I don 't know.

Judge Conrad: But there was some issue about when they were assigned the note... ...I think maybe the issue was that they took it within about 3 days after they filed their lawsuit... ...and so I ruled in their favor.

Carole Schneider: And they've remanded it back to you and we just want to get it dismissed. What do we need to do?

Bank Of America And JPMorgan Continue To Fail At Compliance

JPMorgan and Bank of America both failed to fulfill some basic measures of the settlement, including properly informing customers that foreclosure proceedings were beginning.

Seeking Alpha This result is the second time this year that the two banks have been unable or unwilling to fulfill their obligations to comply with the requirements defined under the $25 billion settlement. Citigroup is the third of the trio that has been cited for non-compliance.

Top U.S. banks faulted on correcting foreclosure abuses

Smith said JPMorgan had fixed the problems and compensated harmed borrowers.

Reuters Bank of America failed to file accurate documents in bankruptcy proceedings, and Citi's mortgage unit failed to notify borrowers about missing documents within 30 days of a request for a short sale, the monitor, Joseph Smith Jr., said.

The two banks have submitted plans to fix those problems and are in the process of correcting earlier failures, he said.


PB County Judge Sends Foreclosing Bank Packing

Palm Beach County Circuit Judge Richard Oftedal spells out some of the problems in today’s foreclosures, from law firms’ playing hot potato with cases to just plain shoddy handling. Oftedal dismissed the 2010 case after a hearing where the lender’s attorney, who was new to the file, sputtered through explanations as to why it took the bank six months to meet a two-week deadline to comply to one order and why it never complied to another request to file a new complaint. 


Palm Beach Post "It is against this procedural backdrop that Plaintiff now seeks once again for permission to properly file an Amended Verified Complaint, almost two years from the date leave to amend was initially granted. Any prejudice to the Plaintiff is entirely self-inflicted as a result of years of delay and willful and deliberate inaction and inattention to court orders, as well as the questionable behavior of counsel in failing to ensure timely service of notices and pleading to Defendant's attorney and not the client. Plaintiff's repeated failure to file the cost bond even when put on notice to do so nearly three years ago in and of itself is a sufficient basis for dismissal of this action."

EU Fines Banks $2.3 Billion For Market Rigging

The penalty is the biggest yet to be handed down to banks for rigging the benchmarks used to determine the cost of lending, one of the most brazen violations of conduct since the financial crisis. It is also the highest antitrust penalty ever imposed by the Commission, the EU's competition regulator.

Reuters The other banks penalized are Societe Generale, JPMorgan and brokerage RP Martin.

Deutsche Bank received the biggest fine of 725.36 million euros.

The European Commission said it would continue to investigate Credit Agricole, HSBC, JPMorgan and brokerage ICAP for similar offences.

Rogue trader should pay $118 million to Goldman Sachs

Reuters A former Goldman Sachs trader who pleaded guilty to fraudulently building an unauthorized $8.3 billion futures trade should repay $118 million to his former employer to cover its losses and spend about three years in prison, federal prosecutors said.

Bear Stearns EMC Option Adjustable Rate Mortgage Loan ARM Class Action Settlement of Monaco. v. Bear Stearns Residential Mortgage Corp. Lawsuit Over Negative Amortization


$18 Million? That's all?

Class Action Lawsuits In The News Bear Stearns Residential Mortgage Corporation (BSRMC) has reached a class action lawsuit settlement over claims the company’s Option ARM Loan documents failed to make complete and accurate disclosures. If you have or had an Option Adjustable Rate Mortgage Loan that was purchased by EMC Mortgage Corporation between Aug. 28, 2003 and March 29, 2013, you may be able to receive an estimated payment of between $500 and $5,000 from a class action settlement.

How To Fight Foreclosure

Chattanoogan Having your home foreclosed is an excruciating process. If it hasn’t happened to you, chances are you have a friend or family member who has.

Running on Empty: “What If I Can’t Make My Chapter 13 Payments?”

Bankruptcy Law Network A motion for moratorium of payments is a motion you can file to suspend your plan payments for a period of time.


Ex-WaMu CEO Killinger Said to Be Near Settlement With OCC

Bloomberg Washington Mutual, which was the nation’s largest savings-and-loan and one of the largest subprime lenders, became a public symbol of the excesses of the housing bubble. The thrift and its subprime arm “engaged in a host of shoddy lending practices that contributed to a mortgage time bomb,” the Senate Permanent Subcommittee on Investigations said in a 2011 report.

Housing Group Taps Dubious Data, HUD Ties to Demand Millions from Banks

Mortgage Servicing News "The banks have liability for the harm that they're causing. If you live next door to an REO home, you are being injured and the banks have liability for that," Smith said.

Bank of America and U.S. Bancorp did a terrible job of maintaining homes they'd foreclosed on in predominately black and Hispanic neighborhoods, Smith declared, even as they were fastidious about upkeep in mostly white areas


Fake Mortgages Used for Money Laundering at BOA?

The lack of accountability and prosecutions in the financial sector is paving the way for virtually certain disaster. Since wrongdoers escalate when they get away with the last gambit, and we already know the banks are in the process of gaining control of natural resources (having already cornered the world’s money supply) the largest threat to world peace now comes from the Banks. -Neil

Darlene Spencer Many of loans were not actual loans. The were multiplied to justify elicit funds going through the system. Securities Mortgage fraud was originally intended to move a large amount of money undetected. For example they would take 10 accounts (mortgage accounts) and those would become shell mortgages in order to justify funds being moved. When they noticed this could actually be more lucrative and remove limits on “trading” it grew into a monster they were not able to control and were not able to confirm what was a real mortgage and what was a shell mortgage. This giving you Securities fraud as well as RICO violations and severe tax evasion.


Motion to Dismiss

Defense to Foreclosure

Page 8: “Typically, the same person holds both the note and the deed of trust. In the Event that the note and the deed of trust are split, the note, as a practical matter becomes unsecured. Restatement (Third) of Property (Mortgages) § 5.4.

Cited from Bellistri v. Ocwen

American Law Institute’s Third Restatement of Property Law The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Id. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. Id. The mortgage loan became ineffectual when the note holder did not also hold the deed of trust.” 







Trial Judge Orders Mortgage Wiped Out And Cleared for Allegations of Bank Fraud

(Appellate Court Reverses)

BAC v. Headley


Weidner Law This was a procedural issue defense counsel created by improper pleading. The fraud was not front and center in the appeals court. The appellate panel did not like the homeowner obtained relief they never asked for in the counterclaim. Judge Rothenberg focused on this as a due process issue. She viewed this procedure as the homeowner trying to pull a fast one on the bank and getting a free house. Once again this is an example where the homeowner's attorney, who had a clear path to win on the merits based on the fraud, tried to get there in one fell swoop. Comment by David Acosta
The Headleys, however, did not serve any of the crossclaim defendants and have not otherwise pursued their crossclaims.

Quiet Title? Eliminate a Mortgage? Read This.

Take a look at the Third District’s November 20, 2013 ruling in BAC Home Loans Servicing, Inc. v. Gamarra. In that case, the trial court entered an Order granting the homeowners a quiet title judgment. Free house … right?  Wrong.  

The Third District did not mince words when it overruled the lower court’s decision. As if to give a warning shot to any attorney seeking such a result for homeowners, the court began the opinion with the following:

Stopa Law The Headleys made material misrepresentations in the Headleys’ motion for final judgment, 
resulting in the issuance of a final judgment that granted relief which was not pled. 
Because the due process rights of BAC were violated, and the trial court 
committed fundamental error, we reverse.

This is why I don’t talk about quieting title. I don’t blog about it, and I’m loathe to ever discuss such relief with homeowners, much less seek it. No, I’m not afraid of getting my hand slapped. Quite simply, it’s almost always a complete waste of time and money, and it creates false hope/expectations for homeowners.

Let’s put it this way … don’t you think if there were a realistic way to quiet title for Florida homeowners that I’d be doing it regularly?


Wells Fargo: U.S. targeting executive as defendant may be retaliation

Reuters Wells Fargo said it told the government it would no longer engage in settlement negotiations on October 29 after months of discussions.
Three days later, the government for the first time said it would seek to add an unnamed executive, later revealed to be Lofrano, to its year-old lawsuit accusing the bank of fraud during the lead-up to the financial meltdown.

Foreclosure lawyer Babcock suspended from practicing

U.S. District Court Judge John J. McConnell Jr. has suspended attorney George Babcock from practicing law before his court for one year, and hundreds of Babcock's clients who are challenging their foreclosures in McConnell's court



"No one is knocking me off my heels," he added, despite attempts "to get rid of the guy who has 800 cases on the docket."
Babcock has represented the vast majority of borrowers who have challenged their foreclosures in the 1,100-plus cases that have been part of McConnell's foreclosure mediation docket.


Banks as Payday Lenders

Last month, banking regulators put the finishing touches on rules designed to rein in short-term consumer loans from banks that are as dangerous to consumers as the predatory loans made by so-called payday lenders.

NY Times the industry earns considerable profits from borrowers who cannot afford to repay the original loan as agreed and must renew the loan again and again for an average fee of about $50 each time. These borrowers end up in debt for months, saddled with loans that can carry an interest rate of 400 percent or more.

The banking industry, which cannot resist such easy profits, offers “deposit advance” loans that work the same way. There is no fixed date for repayment, but the bank repays itself from an electronic deposit that comes into the borrower’s account.


US Bank becoming the trustee of all the REMIC Trusts?

In all cases the bank originally filed under an assumed name by renting the name of someone else or by claiming to own the loan themselves. Now they are under the administration and under the coordination of what I believe to be the Chicago law firm that coordinated the first burst of Aurora strawmen when Aurora itself was a strawman for Lehman Brothers. The object I suspect is centralization of all the trustee positions into US Bank.

Living Lies The only thing left for them to do is dilute the liability into virtually nothing. And the only way to do that is package up the income streams and, as you might have guessed, securitize those packages and sell the securitized packages with insurance and indemnification — the same way they layered over the sale of the trustee positions from BOA. The object I can tell you from experience is to make it so complex that they create a grey area in the law or rather the appearance of a gray area just like they are doing successfully with the mortgages and the Foreclosures. They are nothing if not consistent.

The Lies, The Fraud, The Corruption

Service Transfers in The Middle of Foreclosure Litigation… (And Why Are Courts Continuing To Permit it?)


The banks were not just permitted to profit enormously from their crime spree….they continue on with their crime spree!

Matt Weidner, Esq. Right now, all across this country, in courtrooms and in homes, servicing rights of millions of mortgages are being sold, given away or otherwise transferred…many millions of those transfers are being made by banks that were parties to the National Mortgage Settlement or the OCC settlement.

Now why are they transferring the mortgages at all? And why are they transferring the mortgages that were the subject of the National Mortgage Settlement Litigation? Why are they able to transfer mortgages that are subject of current foreclosure litigation?

FORECLOSURE: New York, Inland Southern California can feel your pain

Blog posts and headlines coming out of New York State these days point to a wave of foreclosures that could soon hit out East.

Press-Enterprise Property owners there are being warned the state that seemed to dodge the hailstorm as others around them were in the thicket are now getting point-by-point instructions on what to expect if they are thousands of dollars short and days late from making a house payment.


What judges are being told:

Faster Foreclosure Proceedings Lead to Quicker Housing Rebound


What about forgery and clouded titles?

Federal Savings Bank 

Press Release

According to a November 30th Seattle Times release titled ‘A key to housing recovery? Out-of-court foreclosures’ areas where real estate has been hardest hit such as: Florida, California, and Nevada have experienced a strong rebound in prices due to expedited foreclosure proceedings. The article states "All the fastest-rebounding markets in October — those with strong sales, price increases and low inventories of unsold houses — were located in so-called nonjudicial states, where foreclosures can proceed without the intervention of courts."


Bank of America Announces Agreement with Freddie Mac on Mortgage Repurchase Claims

Neil: So if this covered 716,000 different mortgages and the average is $200,000 per mortgage, that equates to around $143 Billion in mortgages on which there are charges of fraud, breach of underwriting duties, buy backs etc. The settlement of $404 million is a joke. It is only about $500 per mortgage.

Seeking Alpha Under terms of the agreement, Bank of America will pay Freddie Mac a total of $404 million (less credits of $13 million) to resolve all outstanding and potential mortgage repurchase and make-whole claims related to loans sold to Freddie Mac from January 1, 2000 to December 31, 2009, and to compensate Freddie Mac for certain past losses and potential future losses relating to denials, rescissions and cancellations of mortgage insurance. The payments are fully covered by existing reserves as of September 30.

Today's agreement does not cover loan 

servicing obligations, loans contained in private label securitizations or securities and disclosure claims.


Fines, Without Explaining How They Were Calculated

What can be perplexing is figuring out how those penalties were determined, and whether they have much if any direct relationship to either the gains realized from the violations or the harm inflicted.

DealBook When the government agrees to a settlement imposing civil penalties on a company, the amount appears to have been reached through negotiation without any effort to explain how the payment was calculated. Of course, the beneficiary is often the United States Treasury because some penalties, like the $2 billion for the mortgage securities settlement, go straight to the government’s coffers.


Even North Jersey wealthy hit by foreclosures

Nine years after spending millions to build their dream home in Franklin Lakes, Kevin and Cheri Schmidt lost it recently to foreclosure.

North Jersey The Schmidts have sued their bank, saying it’s to blame for their trouble. The Schmidts have sued Lakeland, saying that the bank engaged in "predatory" lending by refusing to modify the loan and by giving the Schmidts the loans in the first place, because the suit says they did not have the "financial capability or income strength to make payments."



Action is needed now. This “sale” of the duties and obligations of the trustee must not and must never be permitted. The unintended or perhaps intended consequence is chaos in the marketplace where the United States won’t even be allowed a seat at the table, except as the military policeman of the world.

Living Lies If the revenue stream from trustee fees can be packaged for sale, then the next logical step will be the securitization of that package. Investors in such securitization vehicles will be laying for their own screwing. The duties of the trustee, already clouded, will be further diluted into thousands of pieces, effectively eliminating any accountability of the Trustee for an asset backed REMIC trust.

Ultimately banking depends upon trust and relationships based on trust. By commoditizing the job of a trustee, the entire system is undermined and will lead most certainly to chaos and collapse. We now know that when a bank says “trust me” they really mean “your trust means nothing to me. I can sell it anytime I want.”


Debt and Taxes

The debacle of the housing bust is not over. In addition to 10 million borrowers who have already lost their homes, nearly nine million still owe some $500 billion more on their mortgages than their homes are worth and, of them, 2.3 million are in or near foreclosure.

NY Times| Making matters worse, help is about to get even harder to come by. Unless Congress acts soon, a debt-relief law — the Mortgage Forgiveness Debt Relief Act, enacted in 2007 — will expire at the end of 2013, leaving homeowners without the legal protection they need to manage their overwhelming mortgage debt.


A Trusting Couple, Now Thrown for Two Loops

In early 2009, Mr. Rose and Ms. Starr started receiving foreclosure notices from institutions claiming to hold mortgages on properties the couple had owned outright. They thought it was some kind of mistake.

These loans, totaling $4.56 million, all contained the forged signature of Daniel Scherrer, then the manager of the Countrywide office in Miami Beach. All four loans went into mortgage securitizations issued that year by Bear Stearns, Goldman Sachs and JPMorgan Chase.

Gretchen Morgenson

NY Times

In addition to the investments that the couple knew about, Mr. Stern was also secretly taking out mortgages on other of the couple’s properties, according to a 2012 federal indictment. Their lawyer said he found that Mr. Stern had forged their signatures or cut and pasted them from other documents. Mr. Rose and Ms. Starr, who never received a nickel from the loans taken out on their properties, the records show, were on the hook for tens of millions of dollars in mortgages they didn’t know existed.

They could lose all their properties and also be on the hook for millions of dollars. This is because Stewart Title, the company that insured the fraudulent mortgage loans — and whose policies require it to cover all the losses on the loans arising from forgeries and other defects — has refused to make a settlement on most of the properties.


Wrongful Foreclosure: Acting Offensively May Short-Circuit the Need for a Defense

Stites & Harbison, PLLC According to the Tennessee Court of Appeals, there is “absolutely no doubt” that allegations of “wrongful foreclosure” can be raised as a defense by the borrowers in the eviction proceeding. This stems from the fact that the rights of a purchaser at foreclosure to evict the borrowers is dependent upon the passage of good title at foreclosure, and allegations of “wrongful foreclosure” will prevent an award of possession to the purchaser.

Springfield anti-foreclosure ordinances, already challenged in federal court, face additional review by Massachusetts Supreme Judicial Court

MassLive Two city ordinances that are aimed at addressing the problems of foreclosed properties in Springfield were recently referred for review by the Massachusetts Supreme Judicial Court while already challenged by a group of banks in a federal lawsuit. 



“[L]and records across the country have been polluted, diluted, laundered and rendered useless by MERS (the Mortgage Electronic Registration System), and Landtegrity.com has posted a petition demanding answers from the White House,” 

Deadly Clear Not only did our land recording offices lose a lot of money, they also lost track of our land. Even if you are not in foreclosure, if you took out a mortgage between 2003-2008, it is likely that your title is clouded. Yes, even folks who think they’ve just lost some equity in their property may never have clear title unless the states and counties AUDIT LAND RECORDS in order to expose the fraud. Only a full audit exposing the fraud and document fabrication will clean up land records and prove to the courts the depth of the damage that has been created by this land scam.


Rental-Backed Securities Fueling the NEXT Housing Crisis

Large media outlets are running regular stories about the increase in housing prices. Some observers believe these stories are part of a "grand deception" to artificially raise prices and consumer confidence.

Next News Network

Laura Gottesdiener

Could the housing crisis which played a significant part in the 2008 economic crash happen again? Some critics believe that Washington is setting up an artificial rise in housing prices that could lead to another crash in values. The rises in prices could mainly benefit realty companies, who would see large increases in the percentages of sale prices they collect. Investors of inexpensive, foreclosed properties, could also profit. The losses would be largely borne by the middle class. 


Trial Court Judgment Vacated for Precluding Discovery

SUSER v. Deutsche Bank, Wachovia, WAMU

Because the trial judge mistakenly precluded discovery into the circumstances surrounding Deutsche's assignment and Deutsche's entitlement to sue on the mortgage, we find it necessary to: Vacate the order denying plaintiff's motion for summary judgment against Deutsche; Vacate the order granting Deutsche's motion for summary judgment; reverse the protective order; and remand for discovery.

Banks Fake Documents Because They Can’t Establish Ownership of Loan

No documentation was ever created or executed to show a valid transfer to the trusts — except for those loans that were in foreclosure and especially those that were in litigation. So they faked it. And the reason they faked it is that they believed they could get away with it. And despite the obvious illegality of this scheme, the banks were right in their assumption that they would get away with it.

Living Lies So if the note and mortgage were unenforceable then what happens when they are “assigned”? The legal answer is nothing happens because the base document being assigned is fabricated. The answer though in the real world of the judiciary is that the assignment eliminates the need to inquire about the original documents. Judges are all too willing to believe that banks would not assign something that was worthless. Since the assignment looks valid on its face, Judges disregard valid defenses because in their experience banks are more credible than borrowers. This is no longer the case. The borrowers are credible and the banks are lying.


white paper

REMIC Tax Enforcement as Financial-Market Regulator

This Article takes issue with the 
IRS’s inaction and presents both the legal and policy grounds for enforcing tax law by challenging the REMIC classification of at least the worst types of RMBS pools. 


Bradley T. Borden & David J. Reiss
Brooklyn Law School

The Article urges the IRS to take action, recognizing that its failure to police these arrangements prior to the Financial Crisis is partly to blame for the economic meltdown in 2008. The IRS’s continued failure to police RMBS arrangements provides latitude to industry participants, which facilitates future economic catastrophes. Even without the IRS taking action, private parties can rely upon the blueprint set forth in the Article to bring qui tam or whistleblower claims to accomplish the purposes of the REMIC rules and obtain the beneficial results that would occur if the IRS enforced the REMIC rules. 

Arson in America: Data shows arsons not reported to federal government, and its links to foreclosure

Denver Channel RealtyTrac was able to link 430,000 of the fires reported to the U.S. Fire Administration from 2006 to 2011 to its mortgage records and found that more than 47,000 of them started the foreclosure process.

Homes that burned during this period experienced more than a 50 percent increase in foreclosure compared to homes that did not burn.

What You Don’t Know About Mortgages

NY Times The new disclosures are weaker than the earlier proposal in other ways. The agency had proposed that lenders be required to give borrowers a three-day review period whenever the loan terms were changed. The aim was to ensure that lenders would not spring new loan terms on borrowers at the last minute. The final rule limits but does not eliminate the lenders’ ability to introduce last-minute changes at the closing table. That’s too lenient. Lenders must be held to their promises.

Blind Indiana woman giving up eviction fight

67-year-old resident loses longtime home in tax-auction mix-up.

Chicago Tribune Dolores Pittman this week will begin packing up her things as she prepares to leave the Cedar Lake, Ind., house she has lived in for nearly six decades. A decades-old series of apparent property transfer errors allowed the land under the two-bedroom house to be sold from underneath her for $43.


  Foreclosure Activists Claim Billions Stolen Using Fraudulent Records

Group alleges bogus real estate documents led to foreclosures

Jones is a former bank executive with 40 years experience. She also spent decades working as an expert for the FDIC and other government agencies uncovering bank fraud.

Members claim billions of dollars have been stolen in Santa Barbara County and those who have the power to stop it are just letting it happen.

Losing your home to foreclosure is devastating beyond belief.

KEYT Read and Jones claim so many fraudulent documents have been filed at the County Recorder's office that they estimate $4.3 billion worth of real estate has been stolen from homeowners through illegal foreclosures.

They point out one title document in particular as a glaring example. It's a deed of trust for a home in Santa Barbara. It was recorded by IndyMac Federal Bank on April 15, 2013. But IndyMac went out of business in July 2008. Why would a bank official file a deed for a bank that no longer exists and five years late?

We showed the document to Kelly Scott who didn't know the answer. But, she said so far no one has filed a complaint with her office.

Jones said they discovered hundreds of questionable recorded documents.

"Out of the 505, we went in and did an audit on, I have to say that all 505 were fraudulent," said Jones.



Stealing Homes from Paying Customers to Hide Fraud

A foreclosure victim's journey to a new home

One day in 2007, without warning Burns received a letter from JPMorgan Chase notifying her that she was six months behind on her mortgage payments and that the bank was taking her house.

Burns said the bank was wrong; she was up to date on her payments. "I sent +them a letter and the details of our payments to them, and they still foreclosed," she said.

MPRNews An attorney who works for a housing non-profit helped Burns sue JPMorgan Chase. She won a $20,000 cash settlement. Still, she lost her home and her family had to move, as have more than 150,000 other Minnesotans.

"Extremely bad and fraudulent practices in the mortgage banking industry did trigger the foreclosure crisis and the financial crisis," she said.

Toxic loans by lenders, the avalanche of loan delinquencies, and the flood of foreclosures created chaos for banks and borrowers. Lenders lost paperwork, falsified documents, didn't return calls from borrowers seeking help or information.


Illegal Foreclosure Defender Suspended for One Year

In a letter to his clients, George Babcock wrote: the United States District Court for the District of 
Rhode Island suspended my right to practice law in Federal Court for a period of one year.

Babcock Law The court is not suspending me for any conduct occurring in the United States District Court for the District of 
Rhode Island. The basis of the suspension is a consent order entered in a bankruptcy case where the U.S. 
Trustee and I agreed that I would not practice in bankruptcy court for a period of one year commencing June 25, 2013 and agreed to a one year revocation of my electronic filing privileges. 


How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme — Again

Wall Street’s foreclosure crisis, which began in late 2007 and forced more than 10 million people from their homes, has created a paradoxical problem. 

Laura Gottesdiener, a journalist and the author of A Dream Foreclosed: Black America and the Fight for a Place to Call Home Millions of evicted Americans need a safe place to live, even as millions of vacant, bank-owned houses are blighting neighborhoods and spurring a rise in crime. Lucky for us, Wall Street has devised a solution: It’s going to rent these foreclosed houses back to us. In the process, it’s devised a new form of securitization that could cause this whole plan to blow up — again.

Deutsche Bank v. Holloway

Mr. Brown’s affidavit fails to establish that Deutsche Bank is currently the holder of the Note or that it held the Note when it filed the complaint.

The Holloways argue that the trial court’s award of summary judgment was
inappropriate because Deutsche Bank failed to demonstrate that it had standing to initiate the foreclosure action. We agree.

Foreclosures Invalid For Failure to Name Mortgage Originator

A series of recent opinions has held that banks who fail to disclose this information have no right to foreclose. These are the cases of Freddie Mac v. Bisnath, No. 11-SP-4131 (Mass. Housing Ct.) and EMC Mortgage v. Rivera, No. 12-SP-0871 (Mass. Housing Ct.).

Culik Law How is it that such a small violation can invalidate a foreclosure? It comes down to the way Massachusetts allows banks to foreclose. Massachusetts is a non-judicial foreclosure state, meaning that the bank does not have to take you to court to foreclose. (In some other states, the bank actually has to file a lawsuit against you to foreclose.) Because the banks don’t have to get court permission, they must strictly comply with each and every requirement of the foreclosure process, no matter how technical or seemingly insignificant. As one time-tested opinion held, if a bank does not comply with every requirement, then “the sale is wholly void.” Moore v. Dick (1905).

Interview with Jeff Thigpen – Guildford County Register of Deeds and Champion of the Public Trust

I typically see people shake their heads in disbelief when they hear the Guilford County case was summarily dismissed by the NC Business Court.

Extract We found 6100 land record documents filed by LPS/Doc X submitted by names like Linda Green with 15 different signature variations representing 10-20 banks and mortgage services. The practice of “robo-signing” in my opinion is the equivalent of fraud, forgery, and the clear violation of notary laws. This practice is unfair and deceptive and creates uncertainty in the legitimacy of the land records. In April 2013, I testified at the sentencing hearing of LPS/DocX President Lorraine Brown in US District Court in Jacksonville, Florida. She’s now in jail.

Title company owners, lawyers among 9 charged in mortgage fraud cases

Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. The identity theft count carries a maximum of 15 years in prison and a $250,000 fine. 

Daily Herald The owners of a Downers Grove title company and two attorneys, one disbarred, are among nine people accused of fraudulently obtaining four home mortgage loans totaling more than $1 million.

According to the indictment, the seven falsified real estate contracts, loan applications, title commitments and other documents. They are accused of recruiting straw buyers to assume the stolen identities and pose as buyers to obtain loan money for their personal use.


The sale is wholly VOID


Stop Foreclosure Fraud The failure of the notice to include the statutorily required information -- information that was readily available from the very face of the Mortgage -- renders the notice, upon which Fannie Mae relies to support the Wells Fargo Bank foreclosure, upon which Fannie Mae relies to support its claim of good title and right to possession, void and ineffectual.







Bank Losses Due to Mortgage Related Claims Increase As More Borrowers, Investors, Insurers Win Claims

Living Lies The Banks left the investors, insurers and others sitting with empty pieces of paper (mortgage bonds etc) with fictional paper that was unenforceable against the borrowers. THINK ABOUT THAT. The lenders are claiming the loan papers are unenforceable. That leaves the intermediaries pushing ahead with foreclosure on unenforceable paper as though the investment banks had done the lending instead of the investors.

So far the FRAUD claims against investment banks (broker-dealers) has come from pension funds and other investors, insurers like AIG and AMBAC, agencies like Fannie, Freddie and NHMA and others at the top levels of the world of finance. THEY ALLEGE FRAUD. The details of the fraud break down into two categories.

Mortgage-related cases may cost US banks up to $105 bln more: S&P

Reuters Banks have faced a new wave of lawsuits as the government investigates their role in the packaging and sale of mortgage-backed securities comprising of bad loans in the run up to the financial crisis.

"Notably, mortgage-related litigation has recently gotten a second wind and has expanded beyond investor claims," S&P credit analysts led by Stuart Plesser wrote in the report.

S&P says banks may have to spend extra $104bn on mortgage cases



Banks originated and then bundled together billions of dollars worth of mortgages in the years leading up to the financial crisis. Investors are claiming that the companies broke the “reps and warranties” that promised certain underwriting standards on some of the deals.

Farkas v. Aurora Loan Servicing


Docket and case documents

Court of Appeals 
Fifth District of Texas at Dallas 
In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED in part and REVERSED in part. 

We REVERSE that portion of the trial court's judgment on appellant Janos Farkas's claims for wrongful foreclosure and suit to quiet title

We REMAND this cause to the trial court for further proceedings as to those claims. In all other respects, the trial court's judgment is AFFIRMED


A new wave of U.S. mortgage trouble threatens

U.S. borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country's biggest banks. For a typical consumer, that shift can translate to their monthly payment more than tripling.

Reuters The number of borrowers missing payments around the 10-year point can double in their eleventh year, data from consumer credit agency Equifax shows. When the loans go bad, banks can lose an eye-popping 90 cents on the dollar, because a home equity line of credit is usually the second mortgage a borrower has. If the bank forecloses, most of the proceeds of the sale pay off the main mortgage, leaving little for the home equity lender.


DOJ seeks to add Wells Fargo exec to fraud suit

MPA In a motion filed Friday, the Justice Department sought to name Kurt Lofrano, a Wells Fargo vice president, to the lawsuit, Reuters reported. The lawsuit accuses Wells Fargo of misleading the Department of Housing and Urban Development into believing that shoddy home loans qualified for insurance through the Federal Housing Administration, precipitating hundreds of millions of dollars in losses



Deutsche Bank Going Down in Flames

Trial set for March 27, 2014.

Ruling on Motion in Limine

In reviewing the docket and the Court’s prior orders, the Court has rarely seen a case so confused and convoluted and poorly presented and prepared for trial.

2008 Judgment by Default and Quiet Title in Favor of McLeod

Ken McLeod That the subject property is hereby awarded to, and title quieted in
favor of Plaintiffs;

That Defendant SABR is permanently enjoined and prohibited from recording any documents affecting or purporting to affect title of the subject property; and, any acts or recordings now or in the future by Defendant SABR relating to the subject property shall be of no force
or effect.



Why Mortgage-Backed Securities Aren't (Backed by Securities): How MERS Toasted the Banks

As I have said before, it is likely that most or even all foreclosures occurring in the US are illegal seizures of property -- home thefts.  

Prof. Randall Wray In a series of pieces I have argued that MERS, a creation of the mortgage banking industry, has effectively destroyed the institution of private property in America. Ironically, MERS was created to facilitate quick and easy and cheap securitization of mortgages -- what are called mortgage-backed securities. In fact, what it did was to eliminate any backing of the securities by mortgages. 


Montana Supreme Court:

MERS is Not a Beneficiary

Pilgeram v. Greenpoint

Reply Brief

Brief of Appellant

Brief of Appellee

Foreclosure Defense Nationwide In concluding that MERS is not the beneficiary under the statute, the Court quoted the homeowners’ argument that “ MERS  was not the lender, did not extend any credit, and is nothing more than an electronic tracking entity”. Thus, the DOT was not and could not have been executed “for the benefit” of MERS . The Court also rejected MERS’ argument that it is a “special agent” of the lender, finding no evidence to support this argument which the Court found that MERS wrongfully attempted for the first time on appeal.

Deny Everything: It’s All a Lie Anyway

It is hard to wrap your brain around the profound tragedy of greed defining a whole generation, of brilliant minds figuring out ways to take control of all the mediums of exchange. Who would have believed it? Who believes it now? But I was there. I attended meetings in the early 1970′s that laid the foundation for what would be one banking crisis after another as the Wall Street titans plotted to take everything from us — what little wealth we had, what dignity we had left, what lower we had through voting by buying the levers of power, and understanding they could control the consequences.

Living Lies Your note and mortgage were part of a fraudulent scheme designed to defraud investors and government agencies, sovereign wealth funds, thousands if community banks and credit unions eliminating even the illusion of a free market place where everyone had a fair opportunity to grow. Your mortgage and note were evidence of fictitious transactions, as were the initial investments of pension funds and other investors. More fictitious transactions hid the reality while ideological rants reminded us that we should pay our debts but failed to remind us that committing fraudulent acts deserve restitution not rewards.

See how the loans were paid in full at the time of origination or acquisition and how MERS was only a necessary tool to hide fictitious trades to account for the money stolen from pension funds, investors, borrowers government guarantors and of course the most vulnerable — the buyers.


When Good People Do Bad Things

At the sentencing hearing for Kareem Serageldin, a former senior executive at Credit Suisse, Judge Alvin K. Hellerstein of the Federal District Court in Manhattan pointedly asked why someone in such a position would engage in misconduct. The judge asked, “Why do so many good people do bad things?”

DealBook That is the conundrum of many white-collar crime cases: successful business people act in ways that put careers and personal fortunes at risk for seemingly modest gains, and sometimes the misconduct benefits their company but themselves only indirectly.

Judge Hellerstein imposed a 30-month prison term, a punishment below the recommended sentence for the violation. In explaining the reason for the reduction, the judge noted that Mr. Serageldin’s conduct “was a small piece of an overall evil climate inside that bank and many other banks.

Conflicting Mortgage Rules Prolong Reign of the GSEs

American Banker A way out of this policy misalignment is for lenders to sell their loans to Fannie Mae and Freddie Mac (which they already do), given the exemption to QM provided for the government-sponsored enterprises under the Dodd-Frank Act. The result, however, is to increase reliance on the GSEs at a time when most agree that reducing their footprint is in the best long-term interest of borrowers and taxpayers.

Why Code is Law

This story is most instructive not on how it happened, but how it was resolved. In the absence of a useful paper trail from mortgage companies, the mortgage companies were found to be retroactively creating a paper trail. Retroactive paper trail is a kind way of saying they forged documents for a court. Sometimes these forgeries were proven in a courtroom to be convenient fictions.

Bob Goodwin They’d just go ahead with their new system and the courts would comply. And the worst is that the courts have largely complied, even though the MERS database was built with an absence of protocols considered basic to database integrity, like audit trails and measures to insure accuracy (like dual keying and management oversight).

Now the supreme irony is that I’ve depicted the origins of MERS as software engineers gone wild. It’s certainly plausible as history, but what actually transpired is worse. Some people at Fannie Mae, Freddie Mac, Ginnie Mae and the Mortgage Bankers Association looked at how the Depositary Trust Corporation, a system which eliminated the physical delivery of securities on Wall Street by creating a central depository, and thought it would be great to create a version for the mortgage industry. But even though real estate is governed by state law, and has important differences state by state, this group decided they could punt reviewing the state law issues.



Brooks, though, said, “This has always been about principal reduction. It has never been about eminent domain and when we talk about eminent domain, we cloud the conversation.” 

PublicCEO The City Council unanimously passed a resolution by Councilmember Rebecca Kaplan admittedly tweaked to avoid causing investors any sleepless nights worrying about Oakland one day joining Richmond and its controversial principal-reduction plans. Councilmember Desley Brooks had also offered another resolution in support of Richmond, but some council members cautioned it might send Wall Street the wrong message with its repeated use of the phrase “eminent domain.”


Police Lieutenant, Frmr Bank CEO Arrested for Mortgage Fraud

Mortgager Daily The owner of Michael Realty and former CEO of Citizens Bank, was indicted on one count each of bank fraud, making false statements to a bank, and money laundering. Police Lt. Erroll Davis, 52, was charged with one count of filing a false federal income tax return.

The brothers were previously sued by the Security and Exchange Commission for malfeasance at their bank, including playing fast and loose with financial regulations, making deals without telling the bank's board of directors and hiding personal interests they had in many of the properties.



N.Y. appeals court to decide time limits on MBS put-back claims

Alison Frankel Billions of dollars of claims for breaches of representations and warranties on mortgage-backed securities hang on what the state appeals court decides about the time limits for these suits. Does the clock start ticking when the securities are issued and representations about underlying mortgage loans take effect? Or does New York’s six-year statute of limitations begin running only when the MBS seller refuses to repurchase loans that breach its contractual assurances? A five-judge appellate panel will confront the issue Wednesday in a case called Ace Securities v. Deutsche Bank Structured Products.

Lawyer Pleads Guilty to Charges Stemming from Real Estate Fraud

Each of the loans for these 13 transactions went into default, and all the properties were sold at foreclosure or through a short sale, resulting in combined losses to the lenders of more than $2.5 million.

Patch Sentencing is scheduled for Feb. 19, 2014. Sammon faces a maximum sentence of 20 years in prison, to be followed by three years of supervised release and a $250,000 fine on each of the mail and wire fraud charges, and 10 years in prison, three years of supervised release and a $250,000 fine on the money laundering charge.


Brian Davies v. Deutsche Bank

Does Appellant have standing to challenge Appellee, Deutsche National Bank Trust Company's ("Deutsche Bank") failure to honor the specific delivery, time sensitive, and transfer requirements for notes and mortgages under the applicable Pooling and Servicing Agreement (“PSA”), the governing document for the trust supposedly holding Appellant’s
note and mortgage?

Brian Davies 2. Does New York law control the enforceability of Appellant’s note and mortgage?

3. Did the delivery and transfer of the Appellant’s note to Appellee, Deutsche Bank, as trustee, after the trust's closing date render this transfer "void" as opposed to "voidable"?

4. Did the assignment of the Appellant’s mortgage over two years after the purported trusts closing and contrary to the mandates of 26 U.S.C. Section 860D, render this assignment "void" as opposed to "voidable"?


Significantly, there is no proof that Citibank held both the Mortgages and the Notes when it commenced this action. 

Citibank N.A. v McCray


Hon. Lizbeth González, JSC

Supreme Court, Bronx County, NY

After careful consideration and review, the defendant's motion is granted for good cause shown. Citibank has not demonstrated right to the debt in the absence of a chain of custody and proof that the Mortgage and Notes were lawfully assigned to and held by Citibank prior to the commencement of this action. This Court accordingly determines that the plaintiff lacks standing to foreclose. The underlying action is dismissed. The defendant shall serve a copy of this Order with Notice of Entry upon the plaintiff within 30 days.

U.S. Bank official pleads guilty to bribery by cigar box

Bank Executive Charged with Receiving Bribes from Oxford Collection Agency 

Washington   Times      _____


An Ohio officer at U.S. Bank pleaded guilty to charges of bribery. Federal attorneys charge that Wilbur Tate III, 49, gave the bank’s debt-collection business to a private company in exchange for bribes that eventually totaled $24,000.

Chase's Motion for default judgment Denied

JPMorgan v. Simmons

Judge: Joseph C. Teresi

Supreme Court, Greene County, NY

Plaintiff failed to demonstrate that it complied with its CPLR §3408(f) 
obligation to "negotiate in good faith."

Plaintiff now moves for a default judgment against all Defendants, the appointment of a referee to compute, and to amend the caption of the action. Simmons opposes the motion. 
Because Plaintiff failed to establish its compliance with CPLR §3408, its motion is denied without prejudice


Fighting back against foreclosure-rescue scam artists

The suit alleges that two affiliated companies, American Hope Group and the Donado law firm of Elmhurst, Queens, and seven of their employees swindled Brardo out of $11,885 while breaking the law and failing to save her home. She is now in foreclosure.

New York Post “People are saying, ‘Oh, the [foreclosure] wave is slowing,’ but this is a new wave taking advantage of vulnerable homeowners,” said Nicole Arrindell of MFY Legal Services, which filed the complaint in Queens County Supreme Court. “They are telling vulnerable homeowners they are experts and can save the home, but are luring them into further debt.”

Full post


Ohio launches $460K study of foreclosure impacts

Look at the judiciary!

Ohio has joined a multi-state study of the social, health and economic effects of recent federal efforts to prevent foreclosure among the unemployed.
The Ohio Housing Finance Agency received one of six grants nationally provided by the John D. and Catherine T. MacArthur Foundation. It will evaluate the effectiveness of federally-funded mortgage payment assistance for jobless homeowners.

NewsNet5 The foundation provided a total of $2.8 million for its How Housing Matters initiative, aimed at assessing housing's impact on children, families and communities. Ohio's grant was $460,000.

The study will mainly focus on the U.S. Department of Treasury's Hardest Hit Fund, which provided financial assistance to families in states most impacted by the downturn of the housing market.

Ohio received $570 million from that fund for its Save the Dream Ohio program.


$13 Billion, Yes, but What Took So Long?

Although it took the Justice Department more than five years to pursue a major bank for its role in the mortgage mania, the investigation seems to have unearthed material that, by and large, could have been dug up with a spoon.

The 10 securities examined by the Justice Department totaled $10.28 billion. That might sound like a lot, but it’s a drop in the $325 billion flood of mortgage securities packaged and sold by Bear Stearns, WaMu and JPMorgan Chase from 2005 to 2007.

Gretchen Morgenson The facts emerged at a commission hearing in Sacramento on Sept. 23, 2010, in testimony by two officials from Clayton Holdings, a major due-diligence firm. D. Keith Johnson, a former president of the firm, was one of them, and his presentation was explosive.

Providing private data from a Clayton report, he showed how over a dozen institutions disregarded the problems identified by the due-diligence firm. The institutions accepted thousands of loans that should have been rejected for use in the securities sold to investors.

It’s hard to analyze whether the $13 billion is a good deal for the government or for JPMorgan. There’s nothing wrong, of course, with the government recycling well-known facts to drag a bank that behaved badly to the negotiating table. Had the Justice Department aggressively investigated the banks’ practices using its full array of powers, who knows how much more it could have generated?

Irvington to use eminent domain to bail out homeowners in foreclosure 

North Jersey Using eminent domain to bail out underwater homeowners won't fix all Irvington's problems, but Mayor Wayne Smith thinks anything that can help some residents of his economically struggling township is worth trying. 


In what appears to be a unique case, Wells Fargo has requested, in its Complaint, that the Court declare that three of the Assignments are void and of no effect.



Cosajay v. MERS


Foreclosure Defense Nationwide A New Jersey Chancery Judge has just denied a Motion to Strike a homeowner’s Contesting Answer and Defenses and dismiss his Counterclaim in a New Jersey case involving five (5) claimed Assignments which involve MERS, EMC, and Wells Fargo

The Judge stated that he has never seen a chain of title to a mortgage loan which is so complex, thus giving rise to issues of material fact and warranting denial of the Motion to Strike and Dismiss.

 Counsel for Wells Fargo attempted to argue the Motion as one for summary judgment although it was not styled as such. Motions for Summary Judgment are decided under a completely different set of rules and case law in New Jersey.


Wells Fargo’s Lofrano Was ‘Critical’ to Fraud, U.S. Says

Wells Fargo Vice President Kurt Lofrano played a “critical role” in helping the bank hide fraudulent home loans that cost the U.S. $189 million, the U.S. government claims.

Bloomberg Lofrano, who was in charge of self-reporting for Wells Fargo, “played a critical role in the bank’s decision not to report to HUD, as required, more than six thousand materially defective loans that Wells Fargo had falsely certified to HUD for FHA insurance,” the government said in the filing.


Judge Rakoff Wants Someone to Pay

At a meeting of New York City securities lawyers this week, Jed Rakoff did what he does best: challenge Establishment Thinking. "While the economy has slowly improved, there are still millions of Americans leading lives of quiet desperation -- without jobs, without resources, without hope." Then he asked: Who is to blame?

Bloomberg Rakoff is the iconoclastic U.S. District Court judge who's been at the heart of some of the most significant trials stemming from the financial crisis. And what he really wanted to know is why more there haven't been more criminal prosecutions of top financial executives (the very ones who, not coincidentally, made many of the people in his audience quite wealthy). To Rakoff the answer, clearly, is gun-shy federal prosecutors.

"The lack of prosecutions of senior financial executives "must be judged one of the more egregious failures of the criminal justice system in many years," he said


A Year Later, Feds Inch Forward on Fair Housing

Tonight’s episode of “This American Life” will feature a story based on ProPublica’s yearlong investigation “Living Apart: How the Government Betrayed a Landmark Civil Rights Law.

ProPublica Our reporting chronicled the U.S. Department of Housing and Urban Development’s repeated failures in enforcing the 1968 Fair Housing Act. This landmark legislation not only barred discrimination in housing sales and rentals – it also required communities to “affirmatively further” residential integration.

Since we published our first stories late last year, there have been several significant developments on matters we reported. Here’s what’s happened.

Foreclosure fraud: The homeowner nightmares continue

Perhaps the banks are suggesting that they could be wrong about precisely how much a borrower owes. If the borrower is in default, they might say, we’re right to foreclose. Does it really matter if our math is precisely correct? Well, yes. For starters, the bad math might mean the borrower shouldn’t be facing foreclosure.

Bring Banks to Justice The Matthews family of Missouri would not be facing foreclosure if JPMorgan Chase hadn’t collected some $3,000 for an insurance policy the Matthews didn’t need — the Matthews already had insurance — and if Chase’s computer system would acknowledge the Matthews’ payment should be $1,216, not the $1,611 Chase started charging to pay for the insurance.

Again, the bottom line: Chase’s computer system had the wrong payment in place and that caused the Matthews to face foreclosure wrongly.


Growing Out of Corruption

“Corruption diverts resources from the poor to the rich, increases the cost of running businesses, distorts public expenditures and deters foreign investors…it is a major barrier to sound and equitable development” (Wolfenson 1996, 51).

Jie Bai, Seema Jayachandran, Edmund J. Malesky, Benjamin Olken Eradicating corruption ranks among the central policy concerns of economic development practitioners around the globe. Then-World Bank President James Wolfenson made the case for combatting corruption in a 1996 speech now known as the “Cancer of Corruption” address. In it, he spelled out a theoretical mechanism connecting corruption and poverty.


Why Not Recuse the Judge for Bias?

The process is simple and frankly most of the orders denying the motion for recusal are probably defective. So you end up facing the same Judge whom you have already accused of being biased. Besides that obvious fact that you won’t get the result you want, there is another more important reason. You are most probably wrong.

Living Lies So except in rare cases, look to yourself and your presentation, look to your own preparation, demonstrative charts and exhibits, and establish that the homeowner is not using the system to obtain a windfall, an unfair result, and start proving that it is the pretender lender is attempting to achieve a windfall — with real evidence and really proves your point in the one case you are litigating — or the consolidated cases you are litigating. If the judge rules against you it might just be that you didn’t make your point persuasively. If he or she rules against you it might just be that you failed to explain your point well enough for the judge to understand. If you lost it might be that you didn’t prepare well enough on the rules of evidence and burden of proof


Florida’s 2014 Foreclosure Purge- Taking Homes From Families and Giving Those Homes To The Federal Government (and…?)

Matt Weidner, Esq. The scary thing about this effort is one of the key foundations of American legal, social and economic policy… private ownership of property… is being destroyed, decimated, obliterated….and no one in public policy circles is examining exactly what is occurring and they clearly are not examining the long term impact of this extraordinary change not just in public policy but this unprecedented change in the key foundation of American social and public policy. 

Think Foreclosure-Mill attorneys

Lawyer Convicted in Insider Trading Scheme Disbarred

Kluger is serving 12 years in jail after pleading guilty to passing along nonpublic information about business deals he gleaned from his job at some of the nation's biggest law firms.

LegalTimes The D.C. Court of Appeals based its decision to disbar Kluger on his conviction for obstruction of justice, finding it was a "crime of moral turpitude" that required immediate disbarment. Kluger also pleaded guilty to securities fraud charges.

In obstructing justice, "the offender knowingly or intentionally disregards the system of law and due process that defines our civilized society," the court said, quoting from a previous opinion.


Lawyer Says High-Stress Career Led Him to Have Sex With Minor

If the felony charge is considered one of moral turpitude, then Borrevik could be disbarred.

Law.com A young corporate attorney sentenced to four months in a county jail for having sex with a minor said his high-stress legal career was partially to blame for the crime.
Prosecutors said Borrevik paid a 16-year-old girl more than $1,000 for sex and tried to persuade her 17-year-old friend to meet for sex by sending explicit photos and offering money.
Borrevik was caught after the 17 year-old talked to police; a female detective posed as the teenager online.

Repost: Mortgage Banking 
Comptroller’s Handbook

Narrative - March 1996, Procedures - March 1998


If one loan in the pool is missing a single document, the entire pool may not receive final certification. 


The Foreclosure Meltdown was Planned – A Whistle blower Speaks Out

Lincoln’s final memorandum at Cadwalader opined, perhaps overestimating general knowledge of the law, “no mortgage note included in the Excel mortgage pool will ever be lawfully collected in the event of borrower/credit-debtor default, because the pooling of identities obliterates individual obligations and rights, and discrete transactions lie at the foundation of our system of contract and debt.

Nolan Chart At the meeting where he finally resigned, the Senior partners, perhaps understanding the American public better than Lincoln, said to him:

“Who is ever going to notice lack of privity of contract besides you? They teach you all those archaic “Elements of Law” at the University of Chicago, we know all about it, but nobody does business that way anymore. The economy of the future is now, nobody cares about endorsements and signatures anymore, it’s all going to be electronic, anyhow.


Scandal Tarnishes a British Bank’s Reputation

Britain’s Co-operative Bank once prided itself on being a beacon of ethical standards in a financial sector blamed for the country’s economic problems.

NY Times The Mail on Sunday published video online of Mr. Flowers, 63, in a car handing over 300 pounds, or about $486, allegedly to buy ketamine, cocaine and crystal methamphetamine. He was suspended on Wednesday from his ministry. 

Following the release of the video, it emerged that Mr. Flowers had resigned in 2011 as a councilor for the opposition Labour Party in Bradford, in Northern England, after adult material was found on his work computer

The scandal has reminded Britons of the failings of bankers who are blamed for plunging the country into economic crisis, suggesting that the coalition government led by the Conservatives has so far failed to repair fully the system of oversight.


Ousted Fannie Mae CFO Tells His Side of the Story

To him, the crisis was caused by a handful of greedy banks and mortgage lenders; Fannie was merely collateral damage in a series of battles.

American Banker "The mortgage wars were fought not over reducing risk to the taxpayers or providing the lowest-cost and safest types of home loans to consumers," he writes. Rather the war was over "ideology, market power and money."

Bank of America says it should not pay penalties in ‘Hustle’ case

If Bank of America honestly believes this, then they would have gone after Angelo Mozilo long ago.  Bank of America knew it was junk, but their greed and arrogance told them they would never get caught.

Charlotte Observer Bank of America told a federal judge that it should not have to pay penalties after a jury found its Countrywide unit guilty of knowingly selling bad home loans to Fannie Mae and Freddie Mac.

Bank of America was an innocent acquirer in this case,” the bank said. “It purchased a financially distressed Countrywide during the worldwide economic crisis after all of the alleged wrongdoing in this case was over.”

Bank of America has been a major criminal player in the crisis since the 1990's - long before the crisis. 


Foreclosure suit against Gottfried dismissed

Real estate agent signs new $9.2 million mortgage on North End home.

Palm Beach Daily A circuit court last week dismissed a foreclosure case against real estate agent Pamela Gottfried involving an $8.1 million mortgage on her lakefront estate on the North End.
The action came after Gottfried refinanced, signing a new $9.2 million mortgage on the property.


Matt Weidner, Esq. My sense of anger at consumers who are just sitting on the sidelines and turning homes over to banks has reached a boiling point. Just this week alone I’ve had to sit in courtrooms silently, trying desperately to restrain myself when I want to stand up and scream.

Legalizing FORGERY.

MERS Wins Dismissal of Two Lawsuits

National Mortgage News Federal judges have ruled no valid claims of fraud exist against MERS in which plaintiffs claimed the company’s role in a deed of trust caused them injury.

The court immediately dismissed the cloud of title and emotional distress claims filed in the first complaint. Allegations were also rejected that the plaintiff was injured by robo-signing acts and were unaware of who was entitled to receive their mortgage payments.


Simpsonwood Property Sale: A Case of Broken Trust?

The news was a shock for Peachtree Corners residents who had believed that Miss Ludie Simpson's gift, would remain as she intended, to be kept in tact. 

Without a fight, the North Georgia Conference and the Simpsonwood Retreat Center was able to get Miss Ludie Simpson's wishes overturned. 

Patch The Simpsonwood Retreat Center, as Plaintiffs, filed a lawsuit in the Superior Court of Gwinnett County requesting the Court to enter a declaratory judgment:

“that the Restrictive Covenants are no longer valid under Georgia law, that any and all restrictions upon Plaintiffs’ use and alienation of the Property have lapsed, . . . and that Plaintiffs may . . . freely use and/or convey the Property.”

The Plaintiffs claimed that the covenant that the property be held “in tact” is “no longer valid.”

  Foreclosure assistance from billion dollar settlement

We're still suffering from economic abuses carried out by big banks now settling for billions of dollars in penalties.

WNTY "There is a misperception that New York is through the worst of the foreclosure crisis but unfortunately, this absolutely is not the case," said Kirsten Keefe of the Empire Justice Center. "Rather, it's predicted that there will be over 44-thousand foreclosure filings in the next year."

Worried about foreclosure? Help is coming to Syracuse

If you are behind on your mortgage payments or are facing foreclosure, help is headed to Syracuse Thursday and Friday.

Syracuse The Mortgage Assistance Unit of the state's Department of Financial Services will be in Syracuse Thursday and in Liverpool Friday to help and answer questions.

The staff will be able to answer questions about homeowner rights during foreclosure and alternatives to foreclosure. They also will have information about several federal programs that can help people save their homes.

Fearing Wall Street Reprisals, Oakland Council Abandons Anti-Foreclosure Plans

East Bay Express Kaplan explained that since “Richmond got hit with threats [of lawsuits and lowered credit ratings] even before they took any action,” her reworded resolution “reduces the risk of reprisals to us.”
Later, in the public comment period, community activist Margaret Rossoff said that approach “leaves Richmond out there to take all the risks and lets Wall Street terrorize us.”


  Man claims Bank of America gave him heart attack, files lawsuit

Stecher went to the branch office to pay his mortgage but the bank lost the payment.

WSOCTV In this lawsuit, Goodson claims his client started getting phone calls from bank employees saying his "credit history would be negatively impacted" and he "was in jeopardy of foreclosure" alleging it caused his client to start feeling ill from what he calls extreme stress.

A few days after the heart attack, the bank admitted it made a mistake and the mortgage payment had been made on time, Goodson said.


SAC's Steinberg sought 'illegal edge,' prosecutor tells jurors

Nine current or former SAC Capital employees have been charged or implicated in wrongful trading while at the hedge fund. Six have pleaded guilty to criminal charges.

Indictment: U.S. v. Steinberg

Reuters The probe of SAC Capital is part of a decade-long crackdown on insider trading by New York federal prosecutors.

Throughout her presentation on Wednesday, Apps peppered her statements with the term "edge," a term that prosecutors have used to describe what Cohen demanded of his subordinates.

In a 2011 deposition in a lawsuit by an insurer, Cohen said, "I hate that word" when a lawyer asked him if it was used at SAC to describe an advantage over other investors.


Homeowner files Notice of Intervention in:


Richard Roman, Esq. Texas Attorney General Greg Abbott should not take actions that essentially and effectively harm otherwise law-abiding, innocent Texas homeowners. Robert and Marie Hossfeld find themselves, counter-intuitively, forced to champion a valid intervener's interest in this litigation because they fear the repercussions suffered upon citizens voicing objections to their state

Rhode Island Legislators Lack the Fortitude to Take Down MERS

Babcock Law Rhode Island responded by introducing "An Act Relating to Property” Bill in February. The Bill would have required that all transfers of a mortgage interest on residential property be recorded so as to provide a clean chain of title for consumers to track the owner of their mortgage loans.

Both the Connecticut and Massachusetts Bills became law to help distressed homeowners. However, the Rhode Island Bill disappeared.




Foreclosure Defense Nationwide A Colorado District Judge has entered an Order enjoining a non-judicial foreclosure sale incident to a foreclosure filed by BONY as the claimed trustee of (another) Bear Stearns securitization. As our readers know, in Colorado, the precipitating procedure for a non-judicial foreclosure is the filing of a request for an Order Authorizing Sale (OAS) in a Rule 120 proceeding. Any ruling from that proceeding which results in a sale date being set may be challenged by the filing of a separate action, and there is no res judicata or collateral estoppel effect of the prior Rule 120 ruling on the subsequent action.

  Man in Foreclosure Kills Himself and Sets Fire  

NBC Miami Authorities spent the day at the home on northwest 7th Street collecting evidence from inside and outside. Firearms and cases after cases of ammunition were brought out hours later. That ammunition also could've fired off in the blaze.

"He could've taken many of us out," Lawson said. "This whole neighborhood. The surrounding houses could've gone."


Murphy v. Bank of New York Mellon



Two weeks later, the court dismissed her case for lack of subject matter jurisdiction.




Murphy v. Bank of New York Mellon

Upon review of Murphy’s submissions, the Court concludes that Murphy has shown that she will suffer immediate and irreparable injury in the absence of the temporary restraining order because the recordation of the Notice of Trustee’s Sale will set a date for the sale of the property, which is her residence and only source of income

(“I will be forced out of my home . . . I could not protect my property rights from the street homeless and penniless, as my only income is the rent from the 2 bedrooms in my home”). Murphy also has demonstrated that she has a reasonable probability of prevailing on the merits by submitting documentation showing that she has title to the property and that Defendants’ attempts to sell the property are unlawful. 


Because complete diversity of citizenship does not exist, this action is DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction. The temporary restraining order issued by the Court on May 31, 2013, and all deadlines and hearings in this case, are VACATED. Murphy may re-file her claims in state court. 


The True Accountability in the JPMorgan Settlement

Attorney General Eric H. Holder Jr. said that “the passage of time is no shield from accountability,” while Tony West, the associate attorney general, stated that “we are demanding accountability” through the settlement. New York’s attorney general, Eric T. Schneiderman, added, “We’ve won a major victory today in the fight to hold those who caused the financial crisis accountable.”


DealBook The question is, accountable to whom, and for what? The case does not involve a criminal charge against JPMorgan that would typically be resolved through a deferred prosecution agreement requiring a company to affirm that its conduct was illegal. Thus, the bank asserted in a presentation to investors that it “did not admit to any violations of the law.”

An acknowledgment is not an admission, the type of legal hairsplitting the bank can use to claim it did not violate the law in other lawsuits related to its conduct in this area.

  Documents in JPMorgan settlement reveal how every large bank in U.S. has committed Fraud

Real News with Prof. Bill Black Bill Black: Justice Dept.'s failure to understand pervasive schemes of fraud in financial industry obstructs meaningful prosecution of banks.

"The Justice Department still doesn't understand the fraud schemes at all."

Pennies Envy

How JPMorgan’s $13 Billion Settlement Stacks Up

PBS Here is a breakdown of how the agreement compares to other major settlements reached in the five years since the meltdown:

Feds: N.J. men rigged tax lien auctions that led to profits, foreclosures

If convicted, the investors each face a maximum penalty of 10 years in prison and a $1 million fine.

NJ They are charged with allegedly divvying up certain municipal tax liens among themselves and agreeing not to compete with one another for their purchase during the bidding process. They allegedly did so in an illegal attempt to suppress competition and buy selected liens at non-competitive interest rates. The bid-rigging allegedly took place from 1998 through early 2009.


‘Post-apocalyptic’ neighborhoods: Thousands foreclosed this year

Dayton Daily News Mere miles from the city’s center, one Dayton neighborhood looks like the setting of a post-apocalyptic horror film.
Windows are boarded up or shattered, yards are overgrown and, on the surface at least, hope seems in short supply









Banks Keep Bleeding Homebuyers 

Ally Bank fka GMAC Bank dupes homebuyers into signing loan modifications and fleeces them of thousands of dollars in fees, 70 plaintiffs claim in court.

The 24-count, 105-page lawsuit maps familiar territory in the fallout from the collapse of the housing market and the resulting financial crisis. The plaintiffs claim the banks deliberately pushed subprime mortgage loans, regardless of the credit risk of individual customers, and pumped up the California market with inflated real estate appraisals.

Complaint in:

Hairston v. Ally/GMAC

Courthouse News Ally et al. continue to prey on struggling homeowners by offering "illusory" loan modification or workout agreements, according to the complaint.

The agreements "purport to offer hope of an opportunity to cure loan default, but in truth and fact are merely a ruse through which the bank defendants dupe homeowners into paying them thousands of dollars immediately before they foreclose," the lawsuit states.

The banks "have reaped illicit profits from these actions exceeding $100 million," the plaintiffs say.

The homeowners claim the banks' scheme is "nothing more than a cash-grab designed to circumvent California's prohibition against deficiency judgments."
Homeowners have the right to receive payments they made to the banks as part of the workout agreements and should not have to pay legal costs or attorney fees, the plaintiffs say.


JPMorgan Will Pay Record $13 Billion Settlement Over Mortgages

“The reckless and irresponsible actions of some of our largest banks helped cause the financial crisis. Their greed did great damage to our state and national economy." - Congressman Higgins 

The settlement resolves a lawsuit filed by Attorney General Schneiderman in October 2012 against J.P. Morgan Securities LLC (formerly known as Bear Stearns & Co. Inc.), JP Morgan Chase Bank, N.A., and EMC Mortgage LLC (formerly known as EMC Mortgage Corporation) alleging fraud under the Martin Act in the packaging and sale of residential mortgage-backed securities by Bear Stearns.

Business Insider “This historic deal, which will bring long-overdue relief to homeowners around the country and across New York, is exactly what our working group was created to do. We refused to allow systemic frauds that harmed so many New York homeowners and investors to simply be forgotten, and as a result we’ve won a major victory today in the fight to hold those who caused the financial crisis accountable.”

"With today’s historic settlement, Attorney General Eric Schneiderman is delivering accountability and real relief for New York homeowners at risk of foreclosure." 

"Families that are currently at risk of foreclosure will instead be able to modify their mortgages and keep their homes as a result of today’s settlement.” - Suffolk County's Steve Bellone

JPMorgan Chase Will Pay $13 Billion In Record Settlement

The plan includes a $4 billion payment for homeowner relief.

NPR Part of the $4 billion for consumers would go toward helping some homeowners whose mortgages are handled by JPMorgan. In a rare step, another share would be used to reduce blight in neighborhoods peppered by rundown and abandoned homes.

"The settlement does not absolve JPMorgan or its employees from facing any possible criminal charges," the Justice Department says.


JPMorgan Settlement Offers Look Into Mortgage Machine

 According to the statement of facts, an analysis for JPMorgan performed from the first quarter of 2006 through the second quarter of 2007 on 23,668 loans found that 27 percent — about 6,238 loans — should have been categorized as “event 3,” meaning they did not meet underwriting standards. Still, JPMorgan ultimately decided to accept the loans anyway or altered their classification to a higher rating.

DealBook At the heart of the civil settlement, which materialized after months of wrangling, is a statement of facts negotiated with the government that provides details into how JPMorgan assembled mortgage securities sold from 2005 through 2008

While the bank did not admit any violations of law, its decision to approve the statement was one of a few critical concessions it made in order to strike the deal.


Watch Out For Those Prepared Orders!!!

It became apparent to everyone that the bank lawyer was not really all that clear about what he was asking for and I kept asking clarifying questions, like “are you going to become the landlord?” No he said he didn’t want that. In fact his own client who did not appear, told my client that they didn’t want the rent — which bring up a whole bunch of other problems. So beware of this rents gimmick.


Living Lies

It looks to me that the so-called new trustee doesn’t want and won’t take the rents, and that the whole rent turnover thing is simply a profit center for the attorneys who represent the banks. By asking for authority to represent and taking discovery as to whether the Bank wants the rents, you will probably uncover a conflict, and an opportunity to apply sanctions against the law firm representing the Bank.

The point is that without carefully going over the proposed order, whether you have won or lost, you are leaving yourself wide open to abuse.

Maine Supreme Judicial Court Holds that a NonHolder in Possession of a Mortgage Can Initiate a Foreclosure Action

Wells Fargo Bank, N.A. v. Burek

REFinBlog The state Supreme Judicial Court of Maine held that Wells Fargo properly initiated a foreclosure action against two homeowners, even though the court found that Wells Fargo was not the actual mortgage holder under Maine real estate law.



Dallas County’s fee dispute with lawyers sinks settlement of federal lawsuit

The county’s sole remaining legal claim will go forward. Under that claim, the county is asking the court to rule that the defendants violated Texas law by failing to record mortgage transfers, assignments and similar actions with the county clerk.

Dallas News Mortgage companies must pay fees to the counties each time they record such documents. Therefore, if Dallas County is successful in court, it would mean future revenue in the form of document recording fees.

Cantrell said that as a result there is conflicting case law at the trial court level, meaning a federal appeals court might have to weigh in. Dallas County still has the option of appealing the dismissal of its claims.


Split-Up Foreclosure Case Has 9th Circuit Puzzled

As a Georgia man's wrongful foreclosure case came before the 9th Circuit in San Francisco, the appellate judges wrestled with where it belongs.


Rollins wants home(s) returned.

Courthouse News Rollins claims that MERS did not have the right to sell his home in a foreclosure sale because it did not own or record a note on Rollins' home prior to foreclosure. His lawsuit also says that MERS falsely identified itself as the secured creditor in its notices of foreclosure and trustee's sale. These deficiencies "violated Georgia's unique foreclosure and corporate fiduciary statutes and constituted wrongful foreclosure under Georgia law," according to his appeal to the 9th Circuit.


Foreclosure Lawyer Will Accept Disbarment

David Stern whose firm was handling tens of thousands of foreclosure cases at the height of the financial crisis is ending his fight to hold onto his law license.

CBS Miami Critics had charged that attorneys have not been punished adequately for their role in falsifying documents through fake signatures and backdating records and through not giving homeowners proper notice that they faced foreclosure.

Mr. Stern has not expressed any remorse in these proceedings. He has taken no responsibility. The mistake or difficulties are the actions of others.
Lastly, Mr. Stern has not presented me with any evidence of mitigation. As such, I have no basis to recede from the Bar’s recommendation of disbarment. It is the appropriate result.
White paper


The Paper Chase is not exactly a short article, but if you're the type that's into reading about UCC Article 3 vs. Article 9 transfer methods for notes and MERS, then this piece is for you. There's a lot of technical stuff in the article, but there's also a discussion of the political economy of mortgage title and transfer law, and some thoughts on how to fix the legal mess we currently have.

The Paper Chase: Securitization, Foreclosure, and the Uncertainty of Mortgage Title

The mortgage foreclosure crisis raises legal questions as important as its economic impact. Questions that were straightforward and uncontroversial a generation ago today threaten the stability of a $13 trillion mortgage market: Who has standing to foreclose? If a foreclosure was done improperly, what is the effect? And what is the proper legal method for transferring mortgages? These questions implicate the clarity of title for property nationwide and pose a too- big-to-fail problem for the courts.

Prof. Levitin  The legal confusion stems from the existence of competing systems for establishing title to mortgages and transferring those rights. Historically, mortgage title was established and transferred through the “public demonstration” regimes of UCC Article 3 and land recordation systems. This arrangement worked satisfactorily when mortgages were rarely transferred. Mortgage finance, however, shifted to securitization, which involves repeated bulk transfers of mortgages.

To facilitate securitization, deal architects developed alternative “contracting” regimes for mortgage title: UCC Article 9 and MERS, a private mortgage registry. These new regimes reduced the cost of securitization by dispensing with demonstrative formalities, but at the expense of reduced clarity of title, which raised the costs of mortgage enforcement. This trade-off benefitted the securitization industry at the expense of securitization investors because it became apparent only subsequently with the rise in mortgage foreclosures. The harm, however, has not been limited to securitization investors. Clouded mortgage title has significant negative externalities on the economy as a whole.


Oh no; not another independent monitor!

Justice Department Poised to Announce Mortgage Deal With JPMorgan

JPMorgan will also be credited $500 million for briefly halting collection of mortgage payments (they we not even entitled to.)

DealBook The announcement, expected as soon as Tuesday, will detail how the government will divvy up the record $13 billion payout, with $4 billion directed to struggling homeowners. Under the settlement, the people briefed on the deal said, JPMorgan will have to hire an independent monitor to oversee the distribution of the $4 billion in relief, a black mark for a bank once considered one of Wall Street’s most trusted institutions.

IRS Confirms that $12 Billion in “Mortgage Relief” in National Mortgage Settlement Completely Worthless

The IRS settles something I noticed a while ago and has now been finally confirmed. In short: big banks who robbed homes from Americans got a penalty that entailed, quite literally, giving homeowners worthless allowances.

David Dayen The servicer didn't “forgive” anything. So the banks got away with paying off their penalty for a series of crimes with completely worthless non-recourse short sales. That’s the implication of the IRS letter.

If you total up all the non-recourse states (I’ve put their raw totals at the end of this piece), you get over $5 billion in short sales coming from states that bar banks from pursuing a deficiency judgment.

This is a handout to the banks.


SAC Capital's Steinberg faces insider trading trial

The case highlights not just the conduct of the individual traders but also the extent SAC Capital's culture and compliance failures encouraged insider trading.

Reuters A trial starting this week will provide a window into what prosecutors have called a decade-long insider trading scheme at Steven A. Cohen's once-powerful SAC Capital Advisors hedge fund.

Michael Steinberg, a top portfolio manager at SAC, faces charges he illegally traded in technology stocks.

Bank of America $8.5 billion settlement a 'win' for investors, lawyer says

Reuters The $8.5 billion was "almost double" what Countrywide could possibly have paid if the case was litigated, said Ingber, of the global law firm Mayer Brown.

BlackRock Set for Final Clash With AIG on BofA Deal

AIG calls the deal a “pennies on the dollar” settlement while investor losses totaled more than $100 billion.

Bloomberg “This settlement -- which resulted from a process that reeks of collusion and is infected with countless disabling conflicts -- could not become the hallmark of conduct for which future trustees strive, but rather the beacon for what should be avoided,” opponents of the accord said in court papers.

Why No Bankers Go to Jail

Prosecutors, he said, want to make a name for themselves. The easiest way to do that is by bringing cases against high-level people, and the prospect of eventually going to work for a Wall Street firm isn't a deterrent.

Bloomberg Here, rather, is where Rakoff believes the real culprits lie:

Theory 3: The federal government's involvement in the mid-2000s bubble -- encouraging more people to buy homes, deregulating the financial industry, keeping interest rates low and giving Fannie Mae and Freddie Mac way too much leeway -- may also have given prosecutors pause.


Pressure Builds to Finish Volcker Rule on Wall St. Oversight

The Obama administration has reached a critical stage in its other signature effort: reining in Wall Street.

DealBook The push to reshape financial oversight hinges on negotiations in the coming weeks over the so-called Volcker Rule, a regulation that strikes at the heart of Wall Street risk-taking. The rule, which bans banks from trading for their own gain, has become synonymous with the Dodd-Frank overhaul law that Congress adopted after the financial crisis.


South Florida homeowners fell prey to mortgage-relief fraud, authorities say

Skepticism took root as homeowners said Outreach Housing only offered promises and excuses and failed to negotiate with lenders on their behalf. The Attorney General's Office said it received more than 200 complaints, including from homeowners who lost their homes or didn't get refunds for services they never got.

Sun Sentinel The $800 to $3,000 in monthly upfront fees that clients were charged — which the company had said would be held in escrow accounts — were supposed to be used by the company to negotiate lower mortgages for clients, authorities said.

The alleged fraud occurred from about 2007 to 2009.

During this time, Wright and Berry told homeowners to stop making mortgage payments while Outreach Housing worked out deals for their clients, the affidavit said. But authorities said many customers later learned those dealings were nonexistent.

Rochester woman WINS Foreclosure Fight

"to get the house back outright … is just historic and precedent-setting."

Democrat & Chronicle A woman who refused to leave her southwest Rochester home despite foreclosure orders, eviction actions and police arrests has been given her home back — with no strings attached. Bank of America, whose foreclosure action set her on a spiral to near-homelessness five years ago, deeded the property back to her last week for a nominal fee of $1. 


The days of living for free in a house awaiting foreclosure may be numbered

“Banks don’t want to take the house back,” Vohwinkel said.

“They’re just stacking them up,” real estate lawyer Benjamin Childs Sr. said.

“Nevada has been on a bit of a roller coaster ride.”

Vegas Inc. However, some believe that banks are avoiding foreclosure to limit the valley’s inventory of homes for sale, which in theory leads to rising home prices and helps bankers collect more money when they do repossess and sell properties.

Two new laws could upend the situation.

Senate Bill 321, dubbed the Homeowner’s Bill of Rights, aims to make it easier for residents to avoid foreclosure and Assembly Bill 300 relaxed the robosigning law to make it easier for banks to foreclose on homes.

Bank Lawyer: “Your honor, this is a simple foreclosure, we’ll need at most an hour”; Me: “Your Honor, I Fight Foreclosures, This Will Take Many Hours”

The judge began, in a most perfunctory way…



The bank lawyer was arrogant. And unprepared. And by repeating that statement, he only made my client…who believed in the justice system….more angry. Worse, the comment showed deep disrespect for the court. He failed to accept that this good judge was going to do his job and follow the laws and the rules.

At first it seemed clear to me that the judge did not appreciate that I was putting up such a defense. But by the end of the day, I think he respected the fact that I prepared and put on a real defense of foreclosure. I certainly had great respect for this judge that did in fact treat this case with neutrality. He didn’t like the fact that the defendant won…but he respected his most sacred position as a neutral enforcer of the law.


The banks always get away with it, why can't we?

Third Conspirator Found Guilty In Mortgage Fraud Scheme

In total, the conspiracy involved the purchase of approximately 36 homes in Ashburn from 2005 through 2007

Leesburg Today They falsified information on the buyers’ loan applications to get the loans approved and the transactions closed. Virtually all the fraudulent loan applications falsely identified Mikail’s Ashburn jewelry store, Opus Jewelry, as the borrower’s employer and the defendants falsely verified that employment information to the lenders.

N.Y. Fed Asks Court to Dismiss Fired Goldman Examiner’s Lawsuit

ProPublica In its motion to dismiss Segarra’s lawsuit, the Fed disputed that she is a whistleblower and characterized what transpired as “a non-actionable disagreement between a supervised employee and more senior colleagues over how to interpret a Federal Reserve policy.”

The Department of Justice’s Willful Blindness to the Willful Blindness of CEOs (Steve Cohen Edition)

Prof. Bill Black The best thing that the Department of Justice (DOJ) could do immediately to restore faith in the criminal justice system is to prosecute Steven Cohen, the head of SAC. The indictment of SAC charges that many SAC officers committed crimes due to: “institutional practices that encouraged the widespread solicitation and use of illegal inside information.” That indictment supports that claim with detailed allegations. For example, paragraph 6 states that “employees were financially incentivized to recommend to [Cohen] ‘high conviction’ trading ideas” that would inherently come from insider information.

Biden announces state housing workshops with lenders to help homeowners facing foreclosure

Delaware.gov Attorney General Beau Biden today announced that free state housing workshops will take place next week to assist homeowners who have fallen behind on their mortgage payments and face foreclosure.

More Cities Consider Eminent Domain to Halt Foreclosures

This summer the similarly working-class city of Richmond, Calif., in a heavily industrial part of the San Francisco Bay Area, became the first to identify homes worth far less than their owners owe, and offer to buy not the houses themselves, but the mortgages.

NY Times  The city intends to reduce the debt on those mortgages, saying that will prevent foreclosure, blight and falling property values. If the owners of the mortgages — mostly banks and investors — balk, the letters said, the city could use eminent domain to condemn and buy them.  Irvington could try to head off legal action and repercussions through what are called “friendly condemnations,” in which incentives are used to persuade the owner to drop any objections, he said. “We figure if this program works it can help anywhere from 500 to 1,000 homes.”

Banks Disappointed Supreme Court Won’t Hear Disparate Impact Case

Paul Hancock of K&L Gates, who has represented the banking industry in fair-lending cases, said: "This issue isn't going to go away."

Mortgage Servicing News For years, bankers have been waiting for the Supreme Court to limit their vulnerability to fair-lending lawsuits. But now, for the second time in less than two years, that hope has been dashed.

At issue in the suit was whether lawsuits can be brought under the Fair Housing Act on the basis of an action's disparate impact on a protected class of people, such as racial minorities. Banks argue that they should only be liable if they intend to discriminate.


Attention attorneys.

Could The Fair Housing Act Keep You in Your Home?

Huff Post Why aren't more attorneys and homeowners taking this route? As previously mentioned it's murky and abstract and there aren't many attorneys who fully understand and appreciate the concept. Those that do however, find a compelling strategy - one that rarely needs to see the inside of a courtroom.


More proof the borrower has always been a party!

OCC's Asset Securitization
Comptroller’s Handbook
November 1997

Office of the Comptroller of Currency Borrower. 

The borrower is responsible for payment on the underlying loans and therefore the ultimate performance of the asset-backed security

Because borrowers often do not realize that their loans have been sold, the originating bank is often able to maintain the customer relationship.

Last witness testifies against $8.5 billion BofA deal

An expert witness testified on Thursday that Bank of America's proposed $8.5 billion settlement with mortgage bond investors is "not reasonable" and rife with conflicts of interest, as opponents made a final push to derail the deal.

Chicago Tribune "My opinion is the settlement was not entered into in good faith," Levitin said in state court in New York.

Testifying for the objectors who resumed their case on Thursday, Levitin said that BNY Mellon had an incentive to "curry favor" with Bank of America because "that's where it's going to get its business from."

Levitin said the settlement, in his opinion "was not reasonable, that it was not prudent, and that it was not consistent with the good practices" of trustees. He also accused BNY Mellon of looking out for its own interests and not those of investors.


Bank of America accused of discriminatory foreclosures

That brings to 25 the total number of cities where B of A is alleged by the group to have violated fair housing laws in marketing and maintaining foreclosed properties.

CBS News The National Fair Housing Alliance is expanding its discrimination lawsuit against Bank of America, which accuses the lender of doing less to look after foreclosed homes in primarily minority neighborhoods than it does in mostly white areas.


Guidelines Help Heirs Assume and Modify Loans

New guidelines from the Consumer Financial Protection Bureau are aimed at preventing mortgage servicers from unnecessarily foreclosing on homes after a borrower dies.

The guidelines, issued last month, come in response to complaints that servicers are failing to work with survivors who want to assume the loan for a property to which they have claim.

There were concerns about servicers refusing to talk to family members, or demanding documents that basically didn’t exist,” said Kelly Cochran, the bureau’s assistant director for the office of regulations.

NY Times Diane Thompson, a lawyer at the National Consumer Law Center, says the matter is “one of the thorniest and most intransigent problems I hear about from attorneys across the country.”

Servicers are making “judgment calls” about the legal requirements without any real knowledge, she said. And lost documents are the norm. Grieving family members are frequently asked to provide the borrower’s death certificate multiple times, for example, before the servicer recognizes the death.

Surviving spouses who want to stay in their home can run into difficulties if they need a loan modification to afford the payments, Ms. Thompson said. Lenders are often unwilling to allow spouses to assume the mortgage unless they are current on their payments, but making these payments may be impossible for a survivor dealing with large medical and funeral bills.

Foreclosures up sharply

Springfield News-Sun The number of foreclosures in Springfield spiked sharply in the past month, a trend also seen statewide as lenders throughout the region saw more demand for homes. 
Lenders occasionally release a large number of homes onto the market throughout the year.

The Wall Street Code: A Thriller About a Genius Algorithm Builder

"If you are on Wall Street, you would just assume you are being ripped off - unless you are the one doing the ripping off."

Deadly Clear If only Judges understood the complexity of algorithms – and how Wall Street trading changes the instrument – they would realize these are not traditional mortgages… they are NTMs (nontraditional mortgages), possibly securities and current state mortgage and foreclosure codes just do not fit! It appears “the sophistication of the market” is beyond SEC comprehension – so, how do we expect the judiciary to understand the complexity?

Basically the people whose money is in the large pension funds and in investment accounts, they do not understand what is happening. If they understood that it is their money that basically the banks are taking from them and report it as profits then they would do something about it. But the problem is it is too complicated for people to understand. 


Judge Rakoff Blasts Breuer, Prosecution of Companies Rather than Individuals in Bar Speech

The third excuse is that prosecution might hurt the economy. Rakoff indicated his discomfort with the “too big to jail” idea, but used that to lambaste the notion of prosecuting institutions as opposed to individuals. No institution would perish if an executive were prosecuted.

naked capitalism But if, by contrast, the Great Recession was in material part the product of intentional fraud, the failure to prosecute those responsible must be judged one of the more egregious failures of the criminal justice system in many years.

Rakoff described why prosecuting companies, rather than targeting individuals, produces lame outcomes.

On the one hand, it’s good to see Rakoff again rattling cages. On the other, it’s disheartening that the comparatively restrained remarks of a Federal judge serve as bold talk. It’s yet another reminder of how candid discussion of fraud and criminal conduct in the crisis has been successfully mislabled by a lapdog media as naive or ill informed.

Mother, son arrested in Capitola homicide were being evicted

Mercury News The property manager was found shot to death Saturday. The Cohens were in the process of being evicted. A Santa Cruz County sheriff's deputy tried to clear out the property Sept. 23, according to court records.

It was not clear whether the Cohens were at the apartment Sept. 23, but the case was dismissed Sept. 27 by the property owner.

Foreclosure Defense For Consumers: Fighting The Banks, Fighting The Government, Fighting The Court System.

It’s far past time that citizens wake up and recognize that they cannot sit on the sidelines and be passive victims of a civil justice system that is stacked against them.

Citizens need to wake up and make sure they fight for their rights….that they fight for the integrity of the judicial system…that they fight for the liberty and freedom and economic justice that far too many of us take for granted.


Judges were supposed to balance the undeniable power of banks and corporations, and the executive and legislative branches….keeping the scales of justice balanced. But this is largely not happening anymore. All across this country in both state and federal courts, on issues both economic and personal, liberty and property, good and evil, we see an entire judicial system that has turned its back on The People and instead serves the interests of corporate masters, cracking their whips, paying their bribes and owning the legislative and executive branches.


Dual Tracking

Woman faced foreclosure even after on-time payments

Mary Wolkomir paid her mortgage on time, yet a foreclosure notice showed up in her mail because of a bank error.

WRAL Bank of America approved her for a trial loan modification, which reduced the payment on her Raleigh home from $1030 to $823 – a monthly savings of nearly $200.

After being approved for a permanent modification in April, she got a foreclosure notice in July. Bank of America said she hadn't been paying her entire mortgage.



For Sale: Stolen sour mortgages with corrupted titles. 

HUD Said to Fail in Bid to Sell $450 Million of Sour Mortgages

Again: HUD Said to Fail in Bid to Sell $450 Million of Sour Mortgages

Bloomberg If you can get someone who’s willing to take these notes and fix the mortgages, or the properties and rent them out or transfer them to a nonprofit, the idea is that you’re not hurting places that have been hit hard by foreclosures,” said Andrew Jakabovics, senior director of policy development at Enterprise Community Partners and a former HUD policy adviser who helped design the note sale program. “It’s about striking that balance but also making sure that they’re not giving properties away far below what the value is.” like our nation's  judges did.

Are foreclosures now VOID in non-judicial States?


Michael Pines Glaski and the “New York Trust” theory held the securitization trust was void. However, I have been wondering if this means the foreclosure itself was void and wanted to fill the gap.

In California, I did, and have prepared a rough draft for allegations to be put into a complaint which should explain that the foreclosure is void under California law, and probably in most non-judicial foreclosure states.


Nonbank Mortgage Servicers’ Rapid Growth Alarms Investors


Bray claims "nonbank servicers have played a vital role in reducing losses for government-sponsored enterprises and keeping delinquent borrowers in their homes. You have to be very prudent, very careful because we're dealing with borrowers' lives."

Kate Berry Concern is mounting among investors and analysts that Nationstar, Ocwen Financial and Walter Investment are getting so big so quickly that they are becoming too difficult to manage.

Shares of Ocwen and Nationstar have plunged in recent days following earnings announcements in which the companies disclosed a range of operational problems, including delays in integrating acquisitions of servicing portfolios. Meanwhile, Walter recently disclosed that it is under investigation by the Consumer Financial Protection Bureau and facing scrutiny from the Department of Housing and Urban Development over management of its reverse mortgage program and other issues.


A Most Important Appellate Case.. My Client Wins At Trial…Then Is Reversed By Appellate Court…I Move For Rehearing

Motion for Rehearing- Bednarek

Answer Brief

Appellant's Brief

Matt Weidner, Esq. The bank appealed, and, in a most unsettling and bizarre opinion….the appellate court reversed. Reversed not just me and my client, but the trial court judge.

Here’s the problem….(full disclosure… it’s just one of many problems)…the appellate opinion ignores so much of what happened at trial…and what the trial court judge found.

The consequences of this opinion have implications that go far beyond mere foreclosure cases.



Beleaguered mortgage firm facing two federal probes

The Times reported that the company is facing separate action from the CFPB over its Green Tree home loan servicing operation. Walter bought Green Tree in 2011, and the CFPB has said its staff is recommending taking action against the services for alleged violation of federal consumer financial laws.

MPA The Tampa-based Walter Investment Management Corp., which owns Reverse Mortgage Solutions, said in a regulatory filing that it had received a subpoena from HUD. The company said the subpoena, delivered on Oct. 2, sought information on curtailed intertest payments on loans serviced or sub-serviced by RMS. 

This isn't the first trouble the group has run into, with a group of investors earlier this year announcing they would sue the company over its acquisition of Reverse Mortgage Holdings. Investors allege Walter did not disclose facts about the company's liabilities, inflated its value and also made misleading financial statements when it acquired the company.


Federal Regulators Unveil Rules on Their Sometime Proxies, Bank Consultants

The consultants racked up about $2 billion in fees and never finished their assignment because the whole process was rigged against the homeowner.

DealBook Consultants like Deloitte, the Promontory Financial Group and PricewaterhouseCoopers are required to offer a neutral assessment of a bank’s problems, but the consultants are handpicked and paid by those same banks. Fueling concerns about consultants, the industry drew fire for its handling of recent bank regulatory problems, including a review of millions of home foreclosures.

Bank Records Sought in Offshore Tax Inquiry

A federal judge gave the government permission to seek data from five Wall Street banks on American clients suspected of hiding assets at an unrelated Caribbean bank.

DealBook The judge’s order came after a similar one was issued on Nov. 7 by Judge Kimba M. Wood, also of the Federal District Court in Manhattan, to Bank of New York Mellon and Citigroup regarding clients with accounts at Zuercher Kantonalbank, or ZKB, a major regional bank in Zurich. ZKB is one of more than a dozen Swiss and Swiss-style banks under criminal investigation by American authorities for enabling tax evasion by American clients.

Fed Official Who Helped Orchestrate QE: 'I'm Sorry, America,' QE Really Was A Huge Wall Street Bailout

The central bank recruited him back in 2009 to manage "what was at the heart of QE’s bond-buying spree–a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months."

Business Insider QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.

Huszar argues that QE, while "dutifully compensating for the rest of Washington's dysfunction," has become Wall Street's new "too big to fail."


Former Bank of the Commonwealth CEO Sentenced

Edward Woodard, former chief executive officer of Bank of the Commonwealth who orchestrated the largest bank failure in Virginia history, has been sentenced to 23 years in prison.

Mortgage Servicing News “Motivated by greed, Woodard lied, cheated and stole,” says Christy Romero, special inspector general for TARP. “TARP is not an opportunity to finance banks failing under the weight of fraud, but Woodard used fraudulent books and records to try to cheat federal taxpayers out of $28 million in TARP bailout funds to fill the holes he caused in the bank’s books.”

Courts Continue to Ratify Theft of Money and Documents by Banks

The banker sells the stolen notes with false assignments, insures them, gets them guaranteed with payment proceeds to himself and then settles with the lender for pennies on the dollar. Then the banker sues to collect on the stolen notes and wins. Except in this case the banker created the sack, created the notes, falsified the payee and inflated the amount due. The Banker has successfully stolen the money from the lender and stolen the notes from the lender. Despite 7 years of active litigation the judiciary has still failed to pick up on this scenario. The reason for this gross failure of the judiciary though is simply because they have never known a scheme like the one perpetrated by the banks.

Living Lies The cases are prejudged not only individually by each judge but also because the judges speak with each other, and feed off of the decisions of other trial judges. Adding to this is the bias shown in Appellate courts.
This amounts to several presumptions against the homeowner, who is at best a pawn and at worst a victim of fraud just like the torrent of lawsuits and settlements have been stated by MBS investors, insurers, CDS counterparties, GSE guarantors, law enforcements and regulatory agencies — all saying the same thing: FRAUD (not breach of contract etc.).

Frustration is rising amongst homeowners and attorneys who represent their clients in a kangaroo court where the rules of pleading and the rules of evidence are turned upside down to give the thief the products of his fraudulent scheme.


On the road to renting

American Residential Properties Continues REO-to-Rent Expansion

Mortgage Servicing News American Residential Properties Inc. invested $204 million to acquire 1,351 single-family homes during the third quarter, increasing the number of REO-to-rent homes by 33%.


Elizabeth Warren’s populist insurgency enters next phase

It's about more than politics or 2016. First comes a new plan to restore the economy and blow up the finance sector.

David Dayen If asked, Americans of all political persuasions will say overwhelmingly that they prefer “tougher rules” for Wall Street. But what does that actually mean?

Released by Americans for Financial Reform and the Roosevelt Institute – and called “An Unfinished Mission: Making Wall Street Work for Us” — the report is a revelation, because it finally invites fundamental discussions about these issues. The report also weaves in a story about how we can reorient finance as a complement to the real economy, rather than its overriding force.


Nomura to Add More Bankers to Its Americas Arm

With more Manhattan office space at its disposal, Nomura of Japan seems intent to keep trying to fill it.

DealBook The Japanese firm announced on Tuesday that it had hired six more executives, filling out a number of high-ranking investment banking roles for its Americas team as it continued an expansion of its business in the Western Hemisphere.

FHFA Will Secure Up to $28 Billion From Banks in Its MBS Lawsuit

It’s hard to say whether this is a “good” haul or a bad haul, i.e. a punishment that fit the crime. That’s mainly because of the way in which Fannie and Freddie purchased MBS from these various banks.

David Dayen Ultimately, these are still just payouts – nobody is going to jail. But it’s what FHFA was designed to do, and they fact that they could respond to Congressional inquiry by actually fulfilling their mission puts them head and shoulders above the rest of the regulatory and law enforcement space on these matters. But they’re headed by history’s greatest monster, Bush appointee Ed DeMarco, so they couldn’t possibly be a model agency in terms of seeking punishment from Wall Street. Except they are. And DeMarco’s still waiting for that apology.

Countless Foreclosure Rulings are NULLITIES!

Courts accepted the contrived confusion from the criminals stealing homes and equity. Duh!


US Bank Brochure

As those of you know who have had Bloomberg reports done on securitized loans, the screens show loans which have been placed into many tranches (we saw one where the same loan was collateralized in 41 separate tranches, each of which corresponded to a different class of MBS), and with each class of MBS having its own insurance, the “trust” could make 41 separate insurance claims AND foreclose on the house as well! Talk about “maximizing return for the investor”! What has happened is that the securitization parties have unilaterally changed the entire nature of the mortgage loan contract without any prior notice to or approval from the borrower.

Foreclosure Defense US Bank's brochure makes certain incredible admissions, several of which squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower “is not a party to” the securitization and is thus not entitled to discovery or challenges to the mortgage loan transfer process.

The first heading of the brochure is styled “Distinct Party Roles”. The first sentence of this heading states: “Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee, each with their own distinct roles, responsibilities and limitations.” 

There is no language in any Note or Mortgage document (DOT, Security Deed, or Mortgage) by which the borrower is put on notice that the entire nature of the mortgage loan contract and the other contracting party may be unilaterally changed from a loan with a regulated mortgage lender to an “investment” contract with a private equity investor. This, in our business, is called “fraud by omission” for purposes of inducing someone to sign a contract, with material nondisclosure of matters which the borrower had to have to make the proper decision as to whether to sign the contract or not.


Show Me the Money!!!

Show me the money is the demand - not show me the note.

The paperwork was there and the money was there, but the money never came from the parties to the paperwork.

Living Lies BASIC PLEADING ERROR: Instead of alleging the loan and financial injury they skip to the signing of the documents. Yes, the homeowner signed many documents, but the bargain was that the homeowner would get a loan from the people with whom he had accepted an offer. The loan was consideration for the contract, and without consideration there is no enforcement of any contract.

The investors could not return the original note because they never received it.


Suit Charges 3 Credit Rating Agencies With Fraud in Bear Stearns Case

It could be structured by cows and we would rate it,” an S.&P. employee said to a co-worker in a text message from 2007.

We sold our soul to the devil for revenue,” a Moody’s employee said in an internal document.

NY Times In a 141-page complaint, the liquidators cite a trove of emails – some of which had already surfaced in earlier cases – which they say show that the agencies knew their high-quality ratings on the mortgage bonds were a sham.

In an email, another S.&P. employee called the firm’s ratings practices a “scam.”

“It is time for these organizations to be accountable for their misdeeds,” said Mr. McCarroll, a partner at Reed Smith.



Ex-Moody’s staff raise alarm over ABS ‘meltdown’

A former senior executive at Moody’s has warned that credit rating agencies are using “deluded” processes to calculate the risks of asset-backed securities. He fears this could trigger another financial meltdown.

FT William Harrington, who spearheaded analysis on derivatives between 1999 and 2010 at Moody’s Investors Services, said rating agencies are “glossing over” risks when assigning ratings to asset-backed securities by failing to take into account adequate counterparty risk.

He said: “It is a situation where you keep putting more untenable assumptions into the system, but little by little that story is unraveling. It might not take a counterparty default to create all the little leaks that cause the boat to sink.”


This will insult your intelligence, but we had to post it.

Foreclosed Homes in El Paso to be Restored with $75,000.00 ?

Are they planning to renovate 75,000 homes with the $75,000.

Mortgage Servicing News “Thanks to Wells Fargo’s generosity, TSAHC and El Paso Collaborative will be able to stabilize communities affected by foreclosure and give deserving families, like veterans in El Paso, the opportunity to own a home of their own,” says David Long, president of the Texas State Affordable Housing Corporation.  HOW?

Clayton Should Give Mortgage Data to U.S., Judge Says

Bloomberg E-mail and other data held by Wall Street’s largest due-diligence firm that may determine how many cases the government brings against banks for actions leading to the financial crisis should be turned over to the Justice Department, a U.S. magistrate judge said.

Wall Street’s nightmare: President Elizabeth Warren

Warren in the Senate has pushed regulators hard both to go after individual bankers and to demand guilty pleas as part of any settlement deals with institutions. 

Politico She also would probably talk about other bread and butter issues that make large amounts of money for banks but outrage average citizens, including interest on student loans, credit card fees and ATM charges.
And she would likely hammer away at the gap between executive pay and average wages and make the case for higher taxes on investment income enjoyed by the wealthiest slice of Americans.


Markets Evolve, as Does Financial Fraud

It is usually the case that there are not new frauds, just new avenues for deception.

DealBook As the financial world has evolved into a high-speed race to trade assets while investment strategies are kept secret, both regulators and investors face the challenge of finding the fine line between permissible trading and manipulation aimed at generating unfair profits.


The TPP, if Passed, Spells the End of Popular Sovereignty for The United States

naked capitalism Making it all the more remarkable, or not, that our political class — Barack Obama, Hillary Clinton, Max Baucus and Orrin Hatch, a bipartisan caucus, the Chamber of Commerce, and the Editorial Board of The New York Times, to name a few of the usual suspects — would pursue an agreement, the Trans Pacific Partnership (TPP) that sells out popular sovereignty to transnational investors, and allows them to rule us. I know your friends think this sounds like nutty black helicopter stuff, but it’s true! It’s true! (Tell them to watch Yves on Bill Moyers, in a really sharp transcript.

Whatever Wall Street Banks Have Put Aside For Lawsuits, 'They'd Better Double It'

There are multiple scandals blowing up right now, including a whole set of ominous legal cases that could result in punishments so extreme that they might significantly alter the long-term future of the financial services sector.

Matt Taibbi Basically, every customer who's ever been sold a rotten swap product by a major financial company might now be able to get up from the table, extend two middle fingers squarely in the direction of Wall Street, and simply walk away from the deals.

There's simply no way to do a damage calculation that won't wipe out the entire finance sector when you're talking about pervasive, ongoing manipulation of $5-trillion-a-day markets. That's the problem – there's no way to do a slap on the wrist in these cases. If they're guilty, they're done.


Still Dangerous

New rules for complex derivatives that continue to threaten the economy need to be aggressively enforced.

NY Times Editorial A strong Volcker Rule and international oversight could go a long way toward dismantling the global casino. That’s why banks have resisted them — and why the public needs them


U.S. seeks $864 million from Bank of America after fraud verdict

Reuters The government said the penalties were necessary to punish the bank and Mairone "and to send a clear and unambiguous message that mortgage fraud for profit will not be tolerated."

Bank of America and Mairone were each found liable for defrauding government-controlled mortgage companies Fannie Mae and Freddie Mac through the sale of shoddy loans purchased from Countrywide in 2007 and 2008.


Bank of America Ripped Off Harp, Faces False Claims Act Suit

Bank of America defrauded the federal government and homebuyers by cheating on the Home Affordable Refinance Program, a homebuyer claims in a False Claims Act complaint in Federal Court.

The United States ex re. John J. Platz, Relator, sued Bank of America in a lawsuit filed under seal a year ago and unsealed on Tuesday.

Courthouse News Bank of America profited at the expense of the taxpayers. By fraudulently inducing the government to implement changes to HARP 2.0 and then refusing to pass along reductions in LLPAs to consumers, Bank of America violated the conditions of payment for HARP 2.0, and submitted thousands of false claims to the GSEs for HARP 2.0 loans."
Platz seeks damages for the government and taxpayers, and his share under the False Claims Act. His lead counsel is Loren Jacobson with Waters & Kraus, of Dallas.

Banks Lose Challenge to Mortgage-Rescue Plan

Bank of New York Mellon v. City of Richmond

Courthouse News It is premature to challenge a city's plan to help homeowners avoid foreclosure by using eminent domain and then refinancing the mortgages, a federal judge ruled.

A Watershed Moment in Foreclosure Battle: 

Judge McConnell Hailed as Savior to Thousands of Downtrodden Homeowners

Cosajay v. MERS

Babcock Law Federal Court Judge John J. McConnell issued a decision in the Cosajay v. MERS case this week. This case provides the plaintiffs with an opportunity to over-turn thousands of home foreclosure cases and will be viewed as a watershed moment in foreclosure law. Judge McConnell's decision in the case puts to bed once and for all the contention that homeowners have no right to challenge fraudulent assignments appearing in their chain of title.
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BAC Not Required to Evidence Holding Note in Texas Fourth Court of Appeals

BAC ceased to exist in July 2011.

The Texas Fourth Court of Appeals affirms summary judgment for BAC Home Loan Servicing, LP dismissing homeowner’s claim that without evidence of holding the note, BAC lacked standing to foreclose.


REFinBlog The homeowner sought an injunction from the nonjudicial foreclosure initiated by BAC in 2011, alleging wrongful foreclosure as the note did not name BAC or MERS, and further alleging that MERS improperly assigned the note to BAC. The court cites the Reinagel holding that the assignment of mortgage presumptively assigns the note as well, and that BAC is not required to show evidence of holding the note. On these grounds, the court found the homeowner produced less than a scintilla of evidence to show BAC lacked authority to foreclose, and further failed to show the signatory at MERS lacked authority.

Wall Street figured out how to securitize your rent. Should you worry?

The housing crash created a lot of problems. Millions of families lost their assets. Neighborhoods emptied out as homes went into foreclosure. The rest of the economy went into a tailspin.

Washington Post "If things are such that homeowners can't buy back their own homes cheaper, or refinance, but strangers can buy them on the cheap and rent them back to their [former] owners, that strikes me as somewhat unfair," Hockett says. "We don't want to become a landlord-tenant culture, a sharecropper society. It's kind of like medieval Europe, where a few large financial institutions own everything, and we just rent from them."

No Car, No FICO Score, No Problem: The NINJAs Have Taken Over The Subprime Lunatic Asylum

Zero Hedge The same NINJA loans, with non-existent zero credit rating requirements that allowed anything with a pulse to buy a McMansion during the peak day of the last credit bubble.

The Frontiers of Mortgage Servicing, Part I

David Stern was named Fannie Mae's lawyer of the year in 1998 and 1999. But in 2002, the Florida Bar disciplined him for misleading affidavits in those prior years. Fannie and Freddie did not stop referring cases to him until October 2010.

Prof. Katy Porter And then there was the litigation- -brought by Stern against F/F to collect fees for his practices--not brought by F/F to recoup fees paid for work that Stern's firm may have done in violation of the rules of professional responsibility, state law, or the servicing guidelines.

Despite all the debate about Fannie and Freddie's role as loan guarantors and the debate over leadership at FHFA, there has been relatively little written on the servicing guidelines and the role of Fannie/Freddie as the largest "consumer" in the servicing market, with the most ability to reshape the business of servicing.


The New Bond That's Supposed To Revolutionize The Housing Market Is Already A Huge Hit

Business Insider REO-to-rental bonds, the new financial product created by private equity giant Blackstone. These securities pay investors with the revenue streams from folks renting out the 150,000-odd previously foreclosed homes the firm has snatched up Stolen.

Congratulations; for all your hard work to break out of renting and in to home-buying, you will now be a renter.


State Foreclosure Regulation ‘Will Hurt Housing Prices’

That's nothing, illegal foreclosure crimes crashed the global economy. - MSF

National Mortgage News Eight of the top ten recovering metro areas in the nation are located in California where foreclosure law did not interfere (in the grand theft.)

“Peak foreclosure activity came and went,” banks were able to move swiftly to cut losses and many markets are now on the rebound, says Tom O’Grady, CEO of Pro Teck Valuation Services.


Bank Of America Hammered By The United State's FHFA

The bank is facing enormous loss of face in the global investment community.

SeekingAlpha BofA is so large and well-established that it probably won't go out of business any time soon but BAC investors should not expect a higher dividend than the one cent they currently receive for the foreseeable future. However, the bank's FHFA problem explicitly demonstrate a stark new reality on Wall Street. After years of harsh political consequences, the government is no longer willing to coddle firms that engage in questionable behavior.


Upstate NY Mortgage Brokerage Accused of Refi Fraud

Falsely inflated income just like Ameriquest, New Century, Countrywide, et al did on a massive nationwide scale.  

National Mortgage Professional The broker was charged by criminal complaint with making false statements on a loan application in order to secure a refinance mortgage. The charges carry a maximum penalty of 30 years in prison, a fine of $1,000,000, or both. Assistant U.S. Attorney Kathleen A. Lynch, who is handling the case, stated that according to the complaint, the defendant falsely inflated the income of a borrower on a loan application


Federal court affirms MERS’ role in chain of title


AG Beat



The plaintiff further claimed that the “the hidden purpose of MERS is to defraud borrowers and the clerks of court by hiding the true owners of secured interests on property in opposition to common law policies and the laws of North Carolina, and that all transfers of the Deed or the Note by MERS are void.”


New York Fed Chief Levels Explosive Charge Against Big Banks

A group of government agencies led by the Department of Justice has been negotiating with the bank to settle related claims that would call for billions more in cash and aid for distressed homeowners.

Huff Post “Collectively, these enhancements to our current regime may not solve another important problem evident within some large financial institutions -- the apparent lack of respect for law, regulation and the public trust," he said.

“Tough enforcement and high penalties will certainly help focus management’s attention on this issue,” he said.


Goldman Discloses Foreign Exchange Inquiry

DealBook Goldman Sachs became the latest big bank to acknowledge that it was the subject of a series of wide-ranging investigations into the potential manipulation of the $5-trillion-a-day foreign exchange market.

ELIZABETH WARREN: Here's What I've Learned Since I Got To Washington

As we know - Everything is RIGGED!

I ran for office because I believe the playing field is rigged. Evidence of that is everywhere. Now I’ve been in the Senate for nearly a year and believe as strongly as ever that the system is rigged for powerful interests and against working families. 

Businessweek I have been fighting shoulder to shoulder with NCLC for a very long time now, and I have seen how hard you work to stand up for consumers and to level the playing field for working and middle class families.

We’ve fought to protect consumers from tricks and traps in the credit industry time and again. We’ve fought together for the new consumer agency. We’ve fought to make sure more families have access to mortgage modifications that can help them stay in their homes. And so I wanted to be here today to thank you for everything you are doing, day in and day out, in Washington and across the country, to fight for people.

Wells Fargo MTD Denied in many parts


Judge Samuel Conti


Plaintiff's wrongful foreclosure, fraudulent instruments, unjust enrichment, UCL fraud claims are undisturbed. 

Plaintiff's constructive fraud and claims under the unfair and unlawful prongs of the UCL are DISMISSED with leave to amend.


Royal Bank of Scotland to Pay $153.7 Million to Settle Mortgage Case

DealBook The Royal Bank of Scotland agreed on Thursday to pay the Securities and Exchange Commission $153.7 million to settle charges it misled investors into buying a risky mortgage-backed security offering.

Ultimately, R.B.S. turned the loans into a $2.2 billion offering. It was paid $4.4 million for its underwriting work.

Couples home sold in foreclosure by mistake 

Realtor: "Erroneous foreclosures seems to happen to almost everyone; it even happened to me."

First Coast News It is clearly a mistake in the filing, the problem is that mistake now clouds a property that doesn't have a mortgage and puts the owners in a state of uncertainty. Foreclosure-Mill McCalla Raymer represents the bank and filed the Certificate of Title.




Payoffs in Refinancing or Sales: Wrong Party and No Return of Note

When the property is refinanced or sold, (even a short-sale), the wrong party is probably being paid or at least they are being overpaid. I have several cases in the pipeline now where the party executing the satisfaction of the prior mortgage has failed to even respond to requests for the canceled note. They probably don’t have it.

Living Lies So there are a number of us who are planning lawsuits to recover the net proceeds of the refinancing or sale proceeds because the wrong party was paid and they are not producing any evidence of passing on the proceeds to the real creditor even when they have admitted the loan was “securitized.”
Practice Hint on Foreclosure Defense: Ask for the instruction sheet prepared by LPS. This is a document that lays out all the possibilities including the fact that more than one party might be foreclosing on the same property. In one of my cases it was accidentally produced in a Wells Fargo case. I don’t think it is subject to privilege because it was prepared by a third party.

Foreclosure-Mill mistake leaves couple without home

Our Realtor, met with us last Friday and told us because Harmon Law (a foreclosure-mill under investigation) had failed to provide proper notification of foreclosure, we'd be unable to obtain title insurance

I-Team Harmon Law is a large firm located in Newton, Mass. It's currently under investigation by state Attorney General Martha Coakley who is looking into unfair and deceptive acts on the part of the firm.

A slew of complaints exist against the firm, known as a "foreclosure mill."

Memo in Opposition to MERS Motion for SJ and Expert Opinion


McDonnell Analytics

A. The Promissory Note And Mortgage Are Inseparable; 
B. An Assignment Of Mortgage Is A Recordable Conveyance Of Title In Land;
C. The MERS System Seeks To Circumvent Public Recording Of Mortgage Assignments;

D. The MERS System Was Created For The Explicit Purpose Of Circumventing
Public Recording Of Mortgage Assignments; 
E. The MERS System Plays Havoc With The Public Records

Force-Placed Rules Expected to Have Minimal Impact

In a news release Tuesday, DeMarco did not promise that the FHFA's new rules would bring down prices, although he said that was the goal.


Mortgage Servicing News In a long-awaited move, the Federal Housing Finance Agency imposed restrictions on the ability of banks that do business with Fannie Mae and Freddie Mac to get paid for sending business to their partner insurance companies.

"This announcement doesn't do anything about the cost."

Flagstar Reaches Settlement with Fannie Mae over Mortgage Repurchase Obligations

Reuters Flagstar has entered into an agreement with Fannie Mae to resolve repurchase requests and obligations associated with loans originated between January 1, 2000 and December 31, 2008, for a total resolution amount of $121.5 million. After paid claim credits and other adjustments, Flagstar will pay $93.5 million to Fannie Mae.


Wall Street slumlords’ outrageous new scheme: How they could wreck the economy again

Remember mortgage-backed securities and the financial crisis they caused? This latest gambit will put you in shock.

The irony is rich: Wall Street created the conditions for millions of foreclosures, then they sweep in to buy up the homes and rent them out, often to the same people they kicked onto the street.

David Dayen These new securities, backed by rental payments, also have real-world implications for millions of renters, who could end up turning in their monthly checks to Wall Street-based absentee slumlords.

In order for this to work, firms need cash to outbid the competition. So Blackstone teamed with Deutsche Bank, Credit Suisse and JPMorgan Chase to put together the first-ever rental revenue bond, named “Invitation Homes 2013-SFR1.” Basically, Blackstone took out mortgages with the banks on 3,207 of its rental properties, in exchange for $479 million in cash, and they will forward rental payments to the bondholders to pay back the loan.


This is a Must Read!

Countless Foreclosure Rulings are NULLITIES!

Courts accepted the contrived confusion told by the criminals stealing homes and equity. Duh!


US Bank Brochure

Jeff Barnes, Esq. wrote: "We have been provided with a copy of U.S. Bank Global Corporate Trust Services’ “Role of the Corporate Trustee” brochure which makes certain incredible admissions, several of which squarely disprove and nullify the holdings of various courts around the country which have taken the position that the borrower “is not a party to” the securitization and is thus not entitled to discovery or challenges to the mortgage loan transfer process." 

Foreclosure Defense Nationwide The second page sets forth that U.S. Bank, as Trustee, “does not have any discretion or authority in the foreclosure process.” If this is true, how can U.S. Bank as Trustee be the Plaintiff in judicial foreclosures or the foreclosing party in non-judicial foreclosures if it has “no authority in the foreclosure process”?

As those of you know who have had Bloomberg reports done on securitized loans, the screens show loans which have been placed into many tranches (we saw one where the same loan was collateralized in 41 separate tranches, each of which corresponded to a different class of MBS), and with each class of MBS having its own insurance, the “trust” could make 41 separate insurance claims AND foreclose on the house as well! Talk about “maximizing return for the investor”! 

What has happened is that the securitization parties have unilaterally changed the entire nature of the mortgage loan contract without any prior notice to or approval from the borrower.


Attorneys awarded more than 600 times damages in Calif. case

“By any reasonable measure that might be used by a non-lawyer, the outcome of the case was an unmitigated disaster for Vittorio Froncillo,” Renick wrote in the petition for review. “After more than two-and-a-half years of litigation, he was awarded just $550, or about $20 a month over the course of the litigation."

Legal Newsline “The outcome was quite different for Mr. Froncillo’s lawyers. Even with the 25 percent self-reduction in their fees, they were paid for their time at the respectable rate of $369.82 per hour. While Mr. Froncillo earned $20 per month for the time he was involved in the case, his attorneys earned $20 every 3 ¼ minutes they spent on it.

Renick is asking the California Supreme Court to remand the case back to state court to reconsider the plaintiff’s motion for attorney fees.

Ohio Court pulls a rabbit to give free house to non-owner bank.

Deutsche Bank v. Fenney

"The attached mortgage named Aames as the mortgagee and the attached note similarly named Aames as the lender to whom appellants were required to make payments." Id. @ ¶ 3

The term "jurisdiction" is also used when referring to a court's exercise of its jurisdiction over a particular case.  'The third category of jurisdiction [i.e., jurisdiction over the particular case] encompasses the trial court's authority to determine a specific case within that class of cases that is within its subject matter jurisdiction. It is only when the trial court lacks subject matter jurisdiction that its judgment is void; lack of jurisdiction over the particular case merely renders the judgment voidable.' "


Chase Isn't the Only Bank in Trouble

Any thought that the potential Chase settlement might begin a period of regulatory healing for it and other Wall Street banks appears to be wildly mistaken. If anything, the scope of potential liability for all the major banks, particularly in these market -rigging furors, appears to be growing in all directions.

Matt Taibbi 

Rolling Stone

JP Morgan Chase disclosed that it is currently the target of no fewer than eight federal investigations, for activities ranging from possible bribery of foreign officials in Asia to allegations of improper mortgage-bond sales to . . . the Libor mess. 

"The scope and breadth of risky practices at JPMorgan are mind-boggling," Mark Williams, a former Federal Reserve bank examiner.


A View of the Bench

How we get through this foreclosure crisis, and for that matter any other subsequent crisis, will be a measure of how we will handle future crises, whether with grace and dignity or simply with an eye to expediency at whatever cost. 

Roy Oppenheim, Esq. History will likely look back at this time period as one of the darkest hours in the annals of Florida jurisprudence. I for one do not believe the ends justify the means at any cost. However, I am clearly in a minority when compared to my esteemed brethren on the bench who may think it’s ok to sometimes throw the baby out with the bath water.


Florida 'Foreclosure King' Faces Disbarment

According to Perez's report Stern "created chaos on the courts of the state of Florida" by providing inadequate supervision of overworked and inexperienced employees. That resulted in his office mishandling foreclosure cases.

What about redress for the people who lost their homes illegally?

American Banker Stern took on more foreclosure cases than his staff could handle as part of a bid to sell his back-office document preparation services-a $58 million deal that was dependent in part on the volume of files his firm processed, according to Perez.

The emphasis on volume resulted in each of his attorneys being responsible for an average of 1,646 foreclosures in 2008. Stern's over-burdened staff missed court appearances, improperly reviewed and notarized files, filed forged affidavits and made numerous other errors, Perez said in her report. In one instance, an associate attorney failed to correct an error that resulted in lenders commencing foreclosure proceedings against the wrong person.

FHFA Directs Fannie Mae and Freddie Mac to Restrict Lender-Placed Insurance Practices 

The Federal Housing Finance Agency (FHFA) announced today that it has 
directed Fannie Mae and Freddie Mac to prohibit servicers from being reimbursed for expenses associated with captive reinsurance arrangements.

FHFA “FHFA remains concerned about the cost of lender-placed insurance for Fannie Mae, Freddie Mac, and consumers,” said FHFA Acting Director Edward J. DeMarco. “One of our primary responsibilities as conservator of Fannie Mae and Freddie Mac is to preserve and conserve their assets on behalf of taxpayers. This directive is intended to reduce their costs as we consider additional measures.” 

Six banks fight Springfield foreclosure rules

Tani Sapirstein of Springfield, lawyer for the banks, told the judges that the ordinances conflict with several state laws and regulations and are unconstitutional.  (So is stealing homes!)

Boston BizJournal Judges on the U.S. Court of Appeals on Monday aired a lawsuit by six banks in Western Massachusetts seeking to invalidate two ordinances in Springfield that aim to control and maintain foreclosed and vacant properties.

The city approved the ordinances after the financial crisis of 2008 helped leave Springfield with nearly 5,000 vacant and abandoned homes that contributed to blight in some neighborhoods.


Recent laws and local rules are getting more and more judges applying laws and rules that require the forecloser to have their ducks in a row. The answer is that they have no ducks, so they can’t get them in a row or any other configuration. They are strangers to the transaction with the homeowner.

Modifications Up, Foreclosures Down, Scams Up

One judge has come to realize that clearing his docket is easier than he thought. Just require the party seeking foreclosure to prove that they or the predecessor actually made a loan to the homeowner. 

Living Lies Add to that a comprehensible chain of documentation that tracks actual transactions, and you end up with nearly zero foreclosures. This is especially true where the foreclosing party has failed to allege the existence of a loan and instead has alleged only that paperwork was signed. Judges who continue to “infer” that the loan was made are skipping a basic premise of pleading. Either it happened or it didn’t. 

The use of inference requires the homeowner to state an affirmative defense and prove it when he should only be required to deny that allegation. Motions to dismiss based on that premise are starting to be granted.

The fact remains that if they can’t make case for foreclosure they don’t have the authority to settle or modify the loan. 


Pension-Fund Looters Get Tax Breaks, Too

Biggs leaves out the fact that pension-reform advocates are not trying to "stop" pensions, they're mainly trying to convert them from a defined-benefit model to a defined-contribution model.

Matt Taibbi

Rolling Stone

 The gravy train they're trying to "stop" is for workers, not money managers, who will actually earn more under reform, as states move more toward alternative investments. In no way is the financial services sector campaigning for an end to its pension gravy train. This is a pretty big thing to forget in this particular argument. It's actually the whole argument, isn't it? 


The U.S. Attorney Who Prosecutes JP Morgan Will Be Its First Witness

If we don’t do them, nobody will,” he said in an interview Friday. “We have the resources, sophisticated equipment, specially trained investigators, and national jurisdiction.

“You can’t look just at the prison time. I personally believe these kinds of cases offer more opportunity for deterrence than other areas, such as street crime,” he added. “Just on a personal level, big, white-collar crime is the most challenging, the most interesting, and the psychology of the defendants is fascinating. It’s very rewarding.”

Prof. Bill Black To ramp up the pressure on JPMorgan to settle, Wagner was prepared to file a civil suit against JPMorgan. Press leaks suggest that the suit focuses on Washington Mutual’s (WaMu) control frauds in sale of fraudulent originated mortgages to the secondary market through fraudulent “reps and warranties.” JPMorgan acquired WaMu. The same leaks claim that Wagner is pursuing that rarest of investigations under the Bush and Obama administration – a criminal investigation of the elite bankers who led the three most financially destructive epidemics of accounting “control fraud” in history – the twin loan origination fraud epidemics (appraisal and liar’s loans) and the epidemic of fraudulent sales to the secondary market.


Despite Eight Ongoing Criminal/Civil Investigations of JPMorgan, the Bank’s a Law Enforcement Partner With the NYPD

The very Wall Street banks that proved they were a far greater threat to the United States than any foreign terrorist, are part of a joint venture with the NYPD to use high-tech spy equipment to monitor the comings and goings of citizens in the streets of Manhattan. 

Wall Street on Parade Nothing reveals the incestuous, one-percent-mindset that New York City Mayor Michael Bloomberg and Police Commissioner Raymond Kelly have with Wall Street than the next to last photo at this link. The photo shows an employee of U.S. Attorney General Eric Holder’s number one target for financial fraud investigations, JPMorgan Chase, working inside a high security spy center in Lower Manhattan to — wait for it — help the New York City Police Department catch crooks.


BofA, MERS Win Bid to Dismiss Most of Dallas County Suit

O’Connor didn’t rule on a final claim, whether mortgage assignments must be recorded (even though the Texas Local Govt. Code says they do.).

Memorandum Opinion:      Dallas County v. MERS

BusinessWeek Bank of America  and Mortgage Electronic Registration Systems Inc. persuaded a federal judge to dismiss most of a lawsuit claiming they shortchanged Texas counties out of uncollected mortgage filing fees.

U.S. District Judge Reed O’Connor in Dallas threw out claims of fraudulent misrepresentation, unjust enrichment and conspiracy in a lawsuit brought by Dallas County.

Foreclosure without closure: Lenders say mediation in R.I. has no limits on expense, time

A new report on a federal court plan set up to mediate Rhode Island’s foreclosure crisis shows that $4 million in fees has been paid by people living in their houses while they fight foreclosures, and $903,000 has been spent on expenses for the program.

Providence Journal Sherman reported collecting close to $4.5 million in “use and occupancy payments” from people remaining in their homes while they challenge their foreclosures. Sherman added that $3.8 million of that money was held as of Oct. 15. “Of the more than $660,000 disbursed, approximately $415,000 has gone to plaintiffs [borrowers] (and been used to fund settlements) and approximately $245,000 to defendants [lenders],” she wrote.

McConnell, in response to an appeals court order, “reluctantly” dissolved an injunction preventing foreclosures and evictions from proceeding in the pending foreclosure cases, and part of the order said the collections would also stop.


5 Things You Must Understand About Filing Bankruptcy

  If you want the benefits of bankruptcy, keep in mind that it’s more than just telling your lawyer, “I’d like to file bankruptcy.” 

Eastern District of California Found That MERS Was Not Required to Register to do Business in California

Bogdan v. Countrywide, MERS, Select Portfolio, Home Sweet Home Realty

REFinBlog The United States District Court, Eastern District of California, found that MERS was not required to register to do business in California.

The Eastern District of California, after considering the plaintiff’s contentions, also dismissed the plaintiff’s fraud and unfair competition claims against MERS.


In Pursuit of a Paperless
Mortgage Process

KOFAX Still, there are significant hurdles to overcome if banks hope to fully capitalize on the new mortgage opportunity.
In this paper, we’ll discuss those challenges and show how a new four-pillared framework we have developed can empower the bank, streamlining operations and greatly
improving not only their chances of success with the mortgage product but also their bottom line profitability.


Washington Mutual

California Northern District Court Dismissed Plaintiff’s Claims Due to Flawed Reliance on Non-California Law

NEWBECK v. WAMU and Plaza Home Mortgage

REFinBlog In reaching this conclusion, the California Northern District Court noted that plaintiff‘s reliance on non-California law was flawed.

The court further noted that the plaintiff, in using non-California law to analyze judicial foreclosures, was erroneous and misplaced. The court noted that the law cited also did not support a claim to set aside a non-judicial foreclosure.

SAC Capital Pleads Guilty to Insider Trading

SAC to pay a record $1.2 billion penalty, becoming the first large Wall Street firm in a generation to confess to criminal conduct. The move caps a decade-long investigation that turned a once mighty hedge fund into a symbol of financial wrongdoing.

NY Times SAC’s case could inspire other aggressive actions against Wall Street, as the Justice Department’s uneven crackdown on financial fraud has gained momentum in recent months. Coming just days before JPMorgan Chase is expected to finalize a $13 billion settlement with the government over the bank’s questionable mortgage practices, the SAC case could stem concerns that financial firms are too big to charge.

In a letter to the court, Preet Bharara, the United States attorney in Manhattan, called the penalty “steep but fair” and “commensurate with the breadth and duration of the charged criminal conduct.” The letter explained that SAC and its subsidiaries agreed to plead guilty to each of the five counts in the indictment.

Jamie Dimon, the Lance Armstrong of Finance

naked capitalism It’s hard to summarize all of the documented instances in this report of JPM has been breaking the law, but here’s my best shot. I try to keep up on these matters, and yet some of these I’m learning about for the first time:


Attorney Fights State of Texas Looting of Foreclosure Victim Funds  

Anyone want to follow his lead?

First, the State of Texas argues the homeowner's "Entry of Appearance" as a party should be struck for various reasons, to wit: He has the ability to file a "standalone cause of action". Yet in the same pleading Texas' counsel describes how: "One of the purposes of the enforcement of the DTPA by the Texas Attorney General is to prevent a multiplicity of suits".... "Similar clams against the common defendants should be consolidated... for the benefit of consumers".

Richard Roman, Esq. Large monetary judgments have recently
been taken against large, federally insured lending institutions in favor of the State of Texas, ostensibly in the best interests of the citizens of the state (see "State of Texas v. Lender Processing Services".  

The "restitution" was nevertheless diverted and deposited into the bank account for the "Texas Judiciary Fund" (see attached Exhibit "A"). No proof exists that any of this "restitution" rightfully flowed to the Texas homeowners, homeowners who actually suffered the indignities, damages and harm at the hands of these large banks.

The terms and conditions of the settlement agreement contained, among other things, details of the damage caused to EI Paso County real property records and certain corrective actions to be performed. Today no evidence exists that the corrective actions have been performed.


Inmates put in DPW positions while crews work on foreclosures

Fox6Now Demolition crews — mainly with Milwaukee’s Department of Public Works will be heading out to help do the job as part of the new budget — just approved, and recently-released inmates are scheduled to help out with garbage pickup and other jobs while the demo crews are out.

If you buy a FORECLOSURE, expect to find problems

Chicago Tribune When you buy a bank owned property, you take risks. The bank has not lived in the home and the bank doesn't have knowledge about the home's history. You, as the buyer, must take extra care when buying a foreclosed home. It seems that you tried to take care but still have found problems with the home.

Bankruptcy Stay Prevents ANY Activity in State Court Foreclosure Cases

This is one instance where bankruptcy can be so valuable – not as a substitute for foreclosure defense, but in addition to it.

Mark Stopa, Esq. The state court judge may think this is innocent, but I’m convinced this is wrong. Even if the judge’s intent is simply to inquire if a bankruptcy stay is still in effect, that Case Management Conference should not take place. Such CMCs happen frequently in state courts throughout Florida, but they shouldn’t. But don’t take my word for it – check out the ruling of this Tampa bankruptcy judge. This language from the Order is particularly interesting:

The automatic stay prohibits the continuation of any judicial proceeding against the debtor that was commenced prior to the bankruptcy filing. The fact that the state court plans to conduct a “Case Management Conference” or a “Status Conference,” as opposed to the adjudication of a substantive motion, does not change this Court’s ruling. When the automatic stay under 11 U.S.C. § 362(a) is in place, even administrative matters cannot take place.


Foreclosures: Increasing cause of blight with no solution

“For national banks, we often can’t get a hold of anyone who can speak (about) the property,” he said. “Some are unaware they even have a say over it. They deal them around like a bad hand of cards.”

Wausau Daily City inspectors first tried sending orders to then-owner Cedar Acres LLC to fix the problem, then turned to Bank of New York Mellon, which owned the property after Cedar Acres. Months later, with no reply from the bank, inspectors discovered the home’s title had been transferred to Wells Fargo, which made no effort to address the violations.

Fannie Mae Sues Banks for $800 Million Over Libor Rigging

Bloomberg Global authorities have been investigating claims that more than a dozen banks altered submissions used to set benchmarks such as Libor to profit from bets on interest-rate derivatives or to make the lenders’ finances appear healthier.

More Bank Investigations

Currency Traders Put on Leave Amid Investigation

DealBook Authorities in Britain, the United States, Switzerland and Hong Kong are investigating whether traders colluded to rig some areas of currency trading, a market that overall generates more than $5 trillion of trades daily.
Jan-Feb 2013  /  March-April  / May-June  / July-August / Sept-Oct  / Nov-Dec

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