Daily News related to the Foreclosure Crisis

The biggest unpunished heist in human history - Max Keiser


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Jan-Feb 2013  /  March-April  / May-June  / July-August / Sept-Oct  / Nov-Dec
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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Blind woman faces eviction from home of 55 years

A blind Indiana woman is facing eviction after the land under her house of 55 years was purchased for $43 without her knowledge.

Chicago Tribune About three years ago, the land was sold at a tax sale for $43. Pittman said she was never notified by officials.

Petalas, the Lake County treasurer, said the church had conveyed land to the town but not – it turned out – the  property underneath the home. "The land underneath the home was still owned by the church."

Wells Fargo Said to Settle FHFA Claims for Less Than $1 Billion

Bloomberg Wells Fargo agreed to pay less than $1 billion to settle Federal Housing Finance Agency claims it sold faulty mortgage bonds to Fannie Mae and Freddie Mac, according to a person briefed on the deal.
The bank’s accord with the FHFA, which regulates the government-backed mortgage-finance firms, was subject to a confidentiality agreement.

Constitutional Sheriff Acquitted of Charges

Sheriff Finch was charged and arrested and booked into his own jail last June. Sheriff Finch had done something nearly unheard of, yet noble and courageous. He nullified the arrest of a law abiding citizen who had the audacity of carrying a gun in his pocket. Sheriff Finch said "not on my watch." So the State moved in, arrested the Sheriff and re-arrested the citizen, Mr. Parish.

WTV The Sheriff nullified the arrest of an innocent man and the jury nullified the arrest of another innocent man. Liberty won in Liberty County and a tremendous example was laid before us all; do what's right, keep your word, and have the courage to stand for the little guy. As Sheriff Finch testified in court before a badgering prosecutor who demeaned and assailed Sheriff Finch's dedication to his oath and the Constitution, Sheriff Finch calmly and firmly told the prosecutor and the court, "The Constitution has to count for something.


Legal aid saves local homeowner from fraud

Ripped off by two law firms before he found the Northwest Justice Project.

Asian Weekly With the help of NJP, Chao was able to stop the fraudulent law firms from taking money out of his bank account and to recoup a portion of the money he paid the New York firm, but the damage had been done, and Wells Fargo was threatening foreclosure. In the meantime, NJP filed a lawsuit against the Florida law firm for fraud, negligence, negligent misrepresentation, breach of contract and other claims related to Chao’s case.

Fannie Mae sues nine banks for rigging Libor

Reuters Fannie Mae sued nine of the world's largest banks on Thursday, accusing them of colluding to manipulate interest rates and seeking more than $800 million of damages.

Your Guide to the Latest Efforts to Hold Big Banks Accountable

If you’re having a hard time keeping track, here’s a rundown on the latest lawsuits, settlements and ongoing investigations involving big banks.

ProPublica Bank of America, Citigroup and others have also recently agreed to large settlements related to allegations ranging from staying hush about an ongoing Ponzi scheme to levying extra fees from customers. While many are paying up, few are actually admitting guilt. Many banks are able to settle lawsuits for large sums of cash without ever “admitting or denying” wrongdoing. This has long been a major point of contention in the effort to regulate big banks.

And the cases keep coming: Many banks are being investigated by multiple state and federal agencies, meaning they can be sued or investigated multiple times over what might seem like the same allegation.

Why Are We having So Much Trouble Connecting the Dots?

If the creative criminal is a criminal for doing what he did, then the bank or anyone else who engages in the same behavior is also a criminal.

The precedent being set is for anyone who knows about a default to race to the courthouse with a complaint to foreclose after fabricated a notice of default and asserting themselves as the successor to whoever the borrower was paying. 

Living Lies Charges of fraud are announced practically everyday, saying that the banks defrauded investors, defrauded Fannie and Freddie, and defrauded each other, as well as insurance companies and counterparties on credit default swaps. In other words it is pretty well settled that the sale of mortgage bonds was a sweeping fraudulent scheme and that the word PONZI scheme is accurate, not some conspiracy theory as I was treated back in 2007-2010.

The good news is that Marshall Watson and David Stern were disciplined for fabrication and forgery of documents. The bad news is that the inquiry stopped there and nobody ever asked why it was necessary to fabricate or forge documents.

FRAUD! In Foreclosure Court Indymac/Onewest Doesn’t Own Notes and Mortgages, But “They” Continue To Foreclose Anyway

Matt Weinder, Esq. Foreclosure Judgments Entered In The Name of Indymac! 
So…If Indymac doesn’t own servicing rights anymore why are they still in court getting judgments in their name? Clearly, they are sliding through judgments, getting sales set, and throwing citizens out into the street based on testimony that is at the very least grossly improper.

Tell Chase: $13bn fine means stopping foreclosures

Does this Settlement allow Chase to continue committing these same crimes?

Home Defenders League JPMorgan Chase and the Department of Justice are negotiating a record-setting $13 billion settlement for Chase's role in selling the toxic mortgage backed securities they and other Wall Street criminals used to destroy our economy and steal our homes. Chase should take this opportunity to stop all foreclosures and find ways to keep struggling families in their homes.


JPMorgan's $13B Penalty Could Be A Huge Blow to Struggling Homeowners

Homeowners who receive mortgage relief as part of the settlement could get hit with a giant tax bill, making the debt relief benefit irrelevant, if not actively harmful.

They could insert language into the settlement so the mortgage relief is not taxed, but given who participates in such negotiations—bank lawyers, not homeowners—it’s highly unlikely. And it shows once again how utterly tilted the justice system is toward the rich and connected.

David Dayen JPMorgan's $13 billion settlement with the Justice Department is supposed to be punishment for the bank's violations in the sale of mortgage-backed securities. But it could end up far worse for the struggling homeowners some of the money is supposed to assist. 

While JPMorgan could be allowed to write off the penalty as a tax deduction, homeowners who receive mortgage relief as part of the settlement could get hit with a giant tax bill, making the debt relief benefit irrelevant, if not actively harmful. 

This is because Congress, through their sheer inaction, will soon allow this type of mortgage relief to be taxed as income.

Bank of America warns of fresh U.S. lawsuit 

Another day, another potential lawsuit against Bank of America.

CNN Money BofA revealed in a securities filing Wednesday that staff from a U.S. Attorney's office have disclosed plans to recommend that the Department of Justice file a civil lawsuit against the bank related to the packaging and sale of mortgage bonds.


The Justice Department published a “white paper” by Mr. Weidman in May 2010 explaining Firrea’s benefits. He noted that the number of reported mortgage frauds had been growing astronomically, rising more than 272 percent from 2004 to 2008, citing an F.B.I. report.

Department of Justice

NY Times

n Finding the Smoking Gun

n Using Community Outreach to Find and Prosecute Mortgage Fraud 

n Making Choices: Charging and Plea Negotiations 

n Civil Remedies for Mortgage Fraud

n Last But Not Least: Sentencing and Restitution 

Leon W. Weidman’s use of an obscure federal law created in the aftermath of the savings and loan crisis a quarter century ago has underpinned the government’s campaign to punish Wall Street for the financial crisis.


House Votes to Repeal Dodd-Frank Provision

“America’s economy remains stuck in the slowest, weakest non-recovery recovery of all times,” said Representative Jeb Hensarling, Republican of Texas, the chairman of the House Financial Services Committee. “Those who create jobs for America are drowning in a sea of red tape preventing them.”

DealBook The House of Representatives, with bipartisan support, passed legislation on Wednesday that would roll back a major element of the 2010 law intended to strengthen the nation’s financial regulations by allowing big banks like Citigroup and JPMorgan Chase to continue to handle most types of derivatives trades in house.

The bill, which passed by a 292-122 vote, would repeal a requirement in the Dodd-Frank law that big banks “push out” some derivatives trading into separate units that are not backed by the government’s insurance fund.


Mayoral challenger Hughes loses house to foreclosure

Hughes on Tuesday called the move to let his house go a “strategic” one designed, in part, so he does not have to pay two people back to whom he owes money, he said.

Gazette He said he also intends to sue two different judges whom he said inappropriately shackled him with debts based on two loans that someone else should have paid off.

As for the possibility of a bank losing money on his house or his debts, Hughes said, “We don’t feel sorry for the banks. Look at the bailouts they got. … They have insurance for this kind of stuff.”

Owner wants foreclosure to be dismissed

Ann Colborn, representing herself, filed a motion this month claiming the developers, Doug Bradley and Lynn Holmes of Marion Heights LLC, never had grounds to file their foreclosure claim against her.

The Southern Colborn has claimed that Marion Heights is attempting to force her from the property to expand its holdings along Morgan Avenue because of its potential for commercial development.

Bradley and Holmes purchased the bank note from Regions Bank on July 3 last year and two weeks later demanded Colborn pay the roughly $300,000 mortgage in full, claiming she had defaulted on it.

In her motion, however, Colborn maintains she had 15 days to make up a payment of about $3,600, not $300,000.
October 2013

The Schwartzwald Effect

The Impact of the Ohio Supreme Court's Decision in Fed. Home Loan Mtg. Corp v. Schwartzwald on Foreclosures in Ohio.

Bar Journal Feature Questions abound in the wake of Schwartzwald regarding the Court's exact meaning of the word "jurisdiction" and how long a foreclosure decree can remain open for attack. The Supreme Court recently accepted for review the following question:
"When a defendant fails to appeal from
a trial court's judgment in a foreclosure
action , can a lack of standing be raised as part of a motion for relief from judgment?" See Bank of America v. Kuchta,  Hopefully the Court's ruling in this case will provide clarity for practitioner and the appellate courts.




In response to the mortgage foreclosure crisis, the Indiana legislature passed Indiana Code chapter 32-30-10.5 to “avoid unnecessary foreclosures” and facilitate “the modification of residential mortgages in appropriate circumstances.”

COURT OF APPEALS OF INDIANA Trial court found: That [Curatolo] has consistently made timely payments and kept himself current pursuant to the terms of said loan modifications. 
c. That [Nationstar] has consistently imposed additional requisites on [Curatolo] and the Court deems same as bad faith maneuvers designed to thwart [Curatolo] from maintaining his residence and making payments on same. 

Appellate Court found: In sum, the trial court did not have the authority to modify the mortgage agreement without consent of the parties and we reverse its order doing so and remand this case to the trial court with instructions to allow the foreclosure action to proceed

We need you to show a hardship. However, we see you are current on your mortgage, and that shows you do not need a modification

Now in 2013, it is safe to look back and realize that when Bank of America took over Countrywide’s loans (allegedly) that they inherited a mess. We realized that years later when we learned of Countrywide schemes that are now the subject of litigation. Schemes such as the “hustle” would drown homeowners in a matter of years, while the bank made sure enough time had gone by to present a statute of limitations argument against homeowner claims.

Danielle Kelley, Esq. Sickening. We know there was fraud at the inception of these loans, and borrowers were not getting the deal they thought they were, and we know there is clearly fraud at the end, as over and over we see the wrong bank in court. What about in between? Have we stopped to think about what Bank of America did when they realized what they had purchased (allegedly)?

What did they do? They had a systematic plan from the beginning. They knew that adjustable rate mortgages would go up to the point where the homeowner would need help and call to inquire about a modification. They knew Countrywide had given plenty of those type of loans at the height of the market.


Vermont Supreme Court Finds No Principled Basis for Depriving Homeowner of State Law Protection By Allowing Bank to Use Standing as Sword

¶ 53. While plaintiffs’ complaint did not use the terms “lost” or “stolen,” their allegations are consistent with this theory. The complaint alleges that the note was fraudulently acquired by defendant, based on a fraudulent endorsement with a forged endorsement signature, that was created by defendant. These allegations are sufficient to give plaintiffs standing.[10] The court erred in dismissing Counts 1 and 2 of the 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.


Findsen Law The Vermont Supreme Court adopted the rationale of the 1st Cir. in Culhane, that whether or not a homeowner can sue for deficiencies in note transfers under the relevant PSA (depending on whether the homeowner can argue that the assignment was void and not voidable), under state law, the homeowner can argue that the defendant lacks substantive authority to foreclose his loan.

The Court recognizes the common law proviso that a non-party to an assignment can challenge an assignment if the defect would make it void. But then the Court wrongly concludes that New York Trust law would make the assignment voidable and not void, and then implicitly conceding that because the beneficiaries to the trust can ratify the defect, on the pleadings, the homeowner cannot raise a PSA defect, even though it provides evidence of falsity and fraud in the transfers.


U.S. Government to Give $313,000,000 to Muslims for Home Mortgages

What do you think? Why isn’t this money staying in the U.S. where it is needed?

American Overlook According to the GAO, Obama’s administration will be handing over more than $300 million tax dollars to Muslims to help pay their mortgages. $110 million of this money will be used as loans for businesses located in the West Bank.

Tax breaks could ease pain of JPMorgan deal

The silver lining for JPMorgan: The bank will likely be able to write off a good chunk of those funds by calling them business expenses, tax experts said.

It’s possible the deal could be structured so the bank might legally deduct nearly all of the payments.

Politico Section 162(f) of the tax code bars deductions for fines and penalties paid to the government, but JPMorgan might be able to negotiate an agreement to classify the payments as something else. Those payments labeled compensatory or for restitution are more likely to be deductible.

“These are big numbers,” said Alan Feld, a law professor at Boston University. “I’m not sure that I as a taxpayer am so happy about helping JPMorgan to pay.”


Former ‘foreclosure king’ David J. Stern faces disbarment

A referee has recommended that former foreclosure king David J. Stern be disbarred for violations related to “robo-signing” or faking documents in foreclosure cases.

What about the massive loss of wealth he is responsible for?

South Florida Journal In April, two years after the scandal broke, the Bar filed an 80-page complaint that includes 17 counts or charges that Stern violated the Bar’s rules of professional conduct. The Bar alleges that Stern failed to properly supervise lawyers and non-lawyers at his firm and failed to halt regular violations of Bar rules.

Accusations flooded the Florida Bar and local courts about false or inaccurate documents in those cases. Stern’s offices closed, and he laid off thousands of document forgers.


Dutch Rabobank fined $1 billion over Libor scandal

U.S. and European regulators have fined Dutch lender Rabobank $1 billion for rigging benchmark interest rates, making it the fifth bank punished in a scandal that has helped to shred faith in the industry.

Reuters Rabobank said on Tuesday it would pay 774 million euros to U.S., British and Dutch regulators after 30 staff were involved in "inappropriate conduct" in scam to manipulate the London Interbank Offered Rate (Libor) and its Euribor cousin - benchmarks for more than $300 trillion of financial assets

Chief Executive Piet Moerland resigned, saying he was shocked by language revealed in emails exchanged by staff involved over six years to 2011. He acknowledged it would arouse indignation, both within an institution founded as a cooperative and among the public at large.

Ariz. among worst at getting federal aid to homeowners

AZ Central “Homeowners who are struggling don’t have the luxury of time to wait six months, a year, or more while states and the Treasury figure it out,” Romero. “They will lose their house.”



SIGTARP just released its quarterly report to Congress... and it's scathing, suggesting that "the toxic corporate culture that led up to the crisis and TARP has not sufficiently changed." 


SIGTARP There are some real zingers in the 518 page report, including:

n "[F]raudulent bankers. . . sought TARP bailout dollars to have taxpayers fill in the holes on their fraud-riddled books."

n "Some bankers cultivated a culture of self dealing, criminally concealing that the bank was funding their luxury lifestyles, believing they were entitled to the finest money could buy. . ."

n "They were trusted to exercise good judgment and make sound decisions. However, they abused that trust. Many times they abused that trust for their own personal benefit."

Nationstar Mortgage accused of fraud by homeowner

Bank of America refused to accept his loan payment and informed him that Nationstar was servicing the loan. According to the complaint, Hatfield immediately contacted Nationstar about his April payment, and Nationstar refused to accept his payment and did not accept payment until May.

WV Record Hatfield says that on May 25, he submitted a loan modification packet and continued to make payments. According to the complaint, on July 1 he was informed by Nationstar he was in default and that his loan modification had been denied because he was current on his loan and not at risk of default.

The complaint states that on Aug. 30, he was told he needed to pay $1,498.00 immediately and then call to set up a repayment plan. Hatfield says that upon calling, he was told that no repayment plan was available and he would be required to pay Nationstar’s attorneys’ fees in order to have his loan reinstated.

He says that on Sept. 5, Nationstar referred his home for foreclosure.

Modification scam

'One-woman crime wave' sentenced for scamming West Michigan residents facing foreclosure

Fennville woman was sentenced to at least three years in prison for scamming West Michigan residents who were facing foreclosure on their homes.


Homeowners can seek free assistance for foreclosure issues by calling the Michigan State Housing Development Authority at 866-946-7432.

mLive Raisbeck incorporated Mobile Modification, Inc., as a for-profit corporation that allegedly would perform mortgage modifications. Customers were promised lower mortgage payments and foreclosure prevention by paying $795.

Authorities said many victims wound up in worse shape than they started. Some lost homes.

“Raisbeck was a one-woman crime wave, defrauding at least 85 victims struggling to keep their homes during an economic downturn. We will request these victims be made eligible for payment from the newly created Victim Restitution Program, established with funds from the National Mortgage Settlement,” Schuette said.

REPORT: Part Of JP Morgan's $13 Billion Deal With The Justice Department Is At Risk Of Collapse; Shares Down

Business Insider A key sticking point is whether J.P. Morgan or the Federal Deposit Insurance Corp. bears ultimate responsibility for liabilities linked to Washington Mutual which J.P. Morgan acquired during the financial crisis, said people close to the talks. On Sunday night, lawyers for the bank also offered a proposed deal that could give the bank extra legal protection from criminal probes—something the Justice Department leadership isn't willing to accept.

The Beginning of the End of the Financial Crisis

Economix It is hard to imagine, given the subsequent unpopularity of TARP, but the offer of funding initially was hugely popular, with some banks faxing in applications as soon as Treasury posted the form. 


The Beaumont decision is especially interesting because it deals with a rather obvious alteration of documents by Bank of America or its “successors” or lawyers.  I would not be surprised to learn that LPS was involved in this one. They changed the due date and foreclosed. - Neil

Florida Court of Appeals, Second District


Living Lies

"One reasonable inference that may be drawn from these facts, as argued by the Beaumont LLCs below, is that the true original note is the note in which all the pages bear the identifier number NLCIB1 203080.3 and that the note submitted by the Bank as the original note is actually a subsequently created note—one that consists of newly typed pages one through twelve, indicating the March 1, 2011, maturity date, attached to the original signature page."



THE FLORIDA BAR v. DAVID STERN (Foreclosure-mill)

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.

Matt Weidner, Esq. The Florida Bar presented a compelling case of conduct that prejudices the 
administration of justice with the burden of proof being clear and convincing. Conduct prejudicial to the administration of justice is defined as conduct that prejudices our system as a whole.

Mr. Stern wrote to the Chief Judges 
throughout the state announcing his “intention” to take no further action on 
approximately 100,000 pending files due to a lack of financial resources and 
personnel. (The Florida Exhibits 6, 8). That stated intention was an abandonment. Judge Lott testified to a multitude of effects on the limited resources of the judicial system both in time, manpower and funds.

Deal Fails to Ease Pain of Foreclosed Homeowners

YVES SMITH: Well, there—again, this part of the settlement actually doesn’t get to the pain. That was a settlement we had last year. The settlement last year was the part—there was a huge federal-state settlement last year that was supposed to be about the homeowners. 

DemocracyNow But in this case, this—these settlements are all about the investors. And so, you know, to your point, what JPMorgan is going to pay in this settlement is larger than what it paid in the settlement last year to homeowners. I mean, that just intuitively seems extremely unjust, you know, the fact that investors are basically going to get a bigger dollar compensation out of all these banking entities than homeowners got last year. I mean, that’s crazy by anybody’s standards.


Copy-cat crimes of Ameriquest, New Century, Countrywide et al.

Freehold Resident Pleads Guilty in Mortgage Scheme

Each charge against Soto carries a maximum sentence of 30 years in prison and a fine of $1 million. He is scheduled to be sentenced on February 10, 2014.


Patch Soto worked with a group of people including ones who made fake documents, a lawyer, a paralegal and other loan officers in the scheme.

Under the guise of a company called Premier Mortgage Services (PMS) Soto and the others were alleged to have targeted low-income sections of the state. Using “straw buyers,” they used fraudulent documents to make it appear as though the buyers had more income and assets than they did.


DOJ files first civil fraud suit alleging False Claims Act and FIRREA violations in the sale of loans to Fannie Mae and Freddie Mac

These allegations set forth a theory of liability that the government had not previously articulated.

Complaint-In-intervention United States of America






Department of Justice

The complaint alleges that the lender and the financial institution sold these loans to the GSEs but misrepresented that the loans complied with GSE requirements. The GSEs pooled the loans into mortgage backed securities and sold them to investors, subject to guarantees on principal and interest payments. As the allegedly defective loans defaulted, the GSEs suffered over $1 billion in losses through the payment of guarantees to investors.
from 2009

SITES v. Nationstar

Plaintiffs claim defamation, intentional interference with prospective contractual relations, and fraud.

United States District Court, M.D. Pennsylvania This case, in which Plaintiffs claim monetary damages in excess of $537,000 from Defendant Nationstar Mortgage LLC, has its origins in a single mortgage loan payment of $814.36. According to Plaintiffs, Defendant untimely credited the payment to their account and falsely reported the loan as delinquent to major credit bureaus with the sole purpose of frustrating the Sites' efforts to refinance the loan.

"Accepting the allegations in the amended complaint as true, Plaintiffs suffered damages as a result of Defendant's alleged fraud. Such damages may be nominal, but they are damages nonetheless, and, as a matter of law, Plaintiffs are entitled to proceed with their claim."


JPMorgan Still Isn't Sure What It Bought in 2008

"Wait, JPMorgan is really going to sue one part of the government to try to make it repay the settlement it paid to the other part of the government? That seems like a good idea? To whom?" It seems like a good instance of lawyers litigating for the fun of it, to their client's detriment. 

Bloomberg Some people think that this is unfair to JPMorgan, since it wasn't selling the bad mortgages,* WaMu was. Why should JPMorgan pay for the sins of WaMu?
Well, because it bought WaMu, is the reasonable answer. When you buy a company you assume its liabilities. "There are always uncertainties in deals," notorious bank-hater Jamie Dimon once said. “Our eyes are not closed on this one.” This one being WaMu.**

Federal Court Grants Homeowner a Third Try to Cure Pleading Defects

Colton v. US Bank (Ocwen)

Because the court has determined that Plaintiffs’ recordation, failure to produce the original wet ink signature Note, and “split-the-note” theories are not recognized by Texas law, Plaintiffs’ amended complaint must not contain any legal arguments or factual allegations based on these theories.

The court will also permit Plaintiffs to
file an amended complaint to plead facts pertaining to their contention that the assignment to Fannie Mae was invalid, as well as their contention that Defendants or Fannie Mae did not have authority to make assignments or foreclose on the Property because the assignments were made without the
requisite corporate resolutions, conducted in contravention Texas law, or made by MERS after the assignment to a nonMERS member. 

Federal Court allows Homeowner to amend complaint

Preston v. Seterus, Fannie, MERS

Because the court has determined that Plaintiffs’ recordation, failure to produce the original wet ink signature Note, and “split-the-note” theories are not recognized by Texas law, Plaintiffs’ amended complaint must not contain any legal arguments or factual allegations based on these theories.

A $13 Billion Reminder of What’s Wrong

This resistance is difficult, yes. But if taxpayers are to be protected, it is absolutely necessary.

Gretchen Morgenson

NY Times

What about those who think that this settlement is too onerous financially? Sorry, but that’s what comes of resolving problems wrought by outsized and reckless financial players. The rewards were large when the sun was shining; surely the costs of resolving egregious deeds should also be significant. And let’s not forget that this is damage the financial institutions did to themselves. Nobody made them underwrite toxic loans, sell them to unwitting investors and misuse beleaguered borrowers.

Citigroup Selling Servicing Rights as Banks Shrink Role

“We’re reverting to the mean in terms of the volume of housing finance,” Whalen said. “Without levels of credit creation that were excessive and reckless this is what the market looks like.”

Bloomberg Banks are scaling back from the almost $10 trillion market for mortgage servicing rights, or MSRs, amid looming Basel III regulations.

Servicing rights on at least $1 trillion of mortgages will trade in the next two years, Jay Bray, chief executive officer of Nationstar Mortgage Holdings Inc., a servicer majority owned by Fortress Investment Group LLC.


Nobody Should Shed a Tear for JP Morgan Chase

Was Bernie Madoff’s pyramid scheme really so different from what some of the biggest banks have done?

Global Research In fact, this deal is actually quite a gift to Chase. It sounds like a lot of money, but there are myriad deceptions behind the sensational headline.

First of all, the settlement, as the folks at Better Markets have pointed out, may wipe out between $100 billion and $200 billion in potential liability – meaning that the bank might just have settled “for ten cents or so on the dollar.” The Federal Housing Finance Agency alone was suing Chase and its affiliates for $33 billion. The trustee in the ongoing Bernie Madoff Ponzi scandal was suing Chase for upwards of $19 billion.


Is Foreclosure Ever a Good Idea?

Huff Post Over the last few years, since the crash of the housing bubble and in this troubled economy, many homeowners have homes worth significantly less than what they paid, greatly diminished incomes, and other issues. Foreclosing on a home has major ramifications that can last for years, but for some, foreclosure may seem like the only option. Here, we take a look at some of the details and alternatives.


Rebecca Mairone was a top manager at Countrywide.Bank’s Midlevel Executive Becomes a New Face of the Housing Crisis

The episode sheds light on the case that government prosecutors were making, painting Rebecca Mairone — as a near-frantic mortgage executive trying to get the last loans out the door before the market closed down for good.

DealBook one of the government’s main goals in naming Ms. Mairone: linking what she did in the eight or so months she spent overseeing the Hustle program with Mr. Mozilo’s role as founder and guiding force of the Countrywide mortgage -producing machine.

At least in terms of compensation, there was a very big difference between the two. In 2007, Ms. Mairone received a bonus of $1.2 million, according to her deposition. That same year, Mr. Mozilo cashed in $121.5 million via stock sales, on top of the $22 million he was paid in total compensation.

GSE Reform Gets No Support

NuWire The outcry demonstrates the difficulty of making even limited changes to the current U.S. system of housing finance, which five years after the crisis still relies almost entirely on government support. 

(Truth is the mortgage industry has profited enormously from the GSE GOVERNMENT GUARANTEE that keeps their hands in the pockets of all taxpayers when the garbage loans fail. MSF



Reparations From Banks

It is crucial for the government to secure adequate redress for wrongdoing and clear accountability up the chain of command.

Done right, the JPMorgan settlement and others patterned on it may be the last hope for some justice for the fraud and other wrongdoing that fueled the financial crisis.

NY Times These developments have come late in the game, more than five years after the start of the mortgage crisis from which the economy and millions of homeowners have yet to recover. And it may be too late for the government to pursue trials against other banks for similar misconduct, because of statutes of limitations.

Another problem is that the deal appears oddly short on accountability. Negotiators reportedly have not yet decided how much wrongdoing, if any, the bank will admit. If there is no admission of fault, that would imply the claims are meritless, though it is unfathomable that the bank would pay $13 billion if it had done nothing wrong.


JPMorgan to Pay $5.1 Billion to Settle Mortgage Claims

JPMorgan agreed to pay $5.1 billion to settle Federal Housing Finance Agency claims related to home loans and mortgage-backed securities the company sold to Fannie Mae and Freddie Mac, resolving part of a $13 billion accord the firm is negotiating with the government.

Indemnification of WaMu Receivership Not Addressed In JPMorgan's FHFA Settlement







The Street

The FHFA, the conservator of Fannie Mae and Freddie Mac, sued JPMorgan and 17 other banks over faulty mortgage bonds two years ago in an effort to recoup some of the losses taxpayers were forced to cover when the government took control of the failing mortgage finance companies in 2008.

Executives at JPMorgan, Washington Mutual and Bear Stearns, which was also acquired by JPMorgan in 2008, knowingly misrepresented the quality of the loans underlying the bonds, the regulator wrote in the lawsuit in federal court in Manhattan.

ACORN  It's alive!

Obama’s Secret Collaboration with ACORN Bosses

Former officers of the disgraced radical group ACORN are still advising the Obama administration and guiding its catastrophic far-left policies almost three years after the group filed bankruptcy.


Frontpage Mag “How is it, after the scandals of ACORN and its contribution to the housing crash, that this organization’s former leadership is still able to guide federal housing policy?” said Judicial Watch president Tom Fitton. “It goes to show that Barack Obama truly is the president from ACORN.”

The “smoking-gun documents” Judicial Watch obtained “show the continued collusion” of the U.S. Department of Housing and Urban Development (HUD), Consumer Financial Protection Bureau (CFPB), and “ACORN spinoffs – and strongly indicate that Barack Obama is still determined to turn the federal government’s housing policy over to the far left,” Fitton said.





Bay Area Moratorium/BAM, supporters, homeowners in Contra Costa County who have been affected
by the same foreclosure crimes, will be present to witness the disqualification of the commissioner Lowell
Richards, and demand for a presiding judge hear this matter.

Delia For the past 7 years, the filing of unlawful detainer actions have been submitted into court proceedings with fake, false, and forged documents to induce a "WRIT" upon FRAUD, wasting courts valuable time, funds, and resources. 

These documents have been filed in our Contra Costa County Registry of Deeds and used by eviction attorneys. These attorneys should have known or knew, knowingly and willingly chose to induce FRAUD upon the court to steal my real property.

This law firm has filed two actions on same property, and this time used an illegal backdoor to strip me of my lawful title, because of the presumptuous nature that an unlawful detainer is based on a 'valid foreclosure"


Full post

JPM's Madoff entanglement could prompt review of bank charter

Seeking Alpha The Office of the Comptroller of the Currency (OCC) has reportedly told the office of U.S. Attorney Preet Bharara that a criminal money laundering conviction of JPMorgan for turning a blind eye to Bernie Madoff's Ponzi scheme could trigger a review of the bank's charter.  JPMorgan and prosecutors are in talks about a deferred prosecution agreement in which the latter would file charges that would be dismissed after a set period of time if the bank meets certain conditions. JPMorgan could also pay a fine


The New York Times Publishes the Most Ironic Sentence of the Crisis

There are four clues in the sentence I quoted that indicate that the author knows he’s putting us on, but they are subtle. First, the case was a civil case. “The government’s” “aggressive effort to hold banks accountable” has produced – zero convictions of the elite Wall Street officers and banks whose frauds drove the crisis. Thomas, of course, knows this and his use of the word “aggressive” mocks the Department of Justice (DOJ) propaganda.

Prof. Bill Black BoA had fraudulently originated tens of thousands of loans. Because there is no “fraud exorcist,” a fraudulent loan remains a fraudulent loan and infects every step in mortgage chain: loan origination, the sale to the secondary market, and the creation of mortgage products (MBS and CDOs). Any competent investigation therefore would look at the process on an integrated basis. The DOJ, however, has no task force, and no lawsuits or prosecutions, against the twin loan origination fraud epidemics. The task force DOJ created looks only at fraudulent sales of the fraudulently originated mortgages – and ignores the origination fraud. Because “only” about 85% of the fraudulently originated loans were sold through fraudulent reps and warranties to the secondary market, the twin loan origination fraud epidemics represent the most destructive frauds in world history. (One does not have to make fraudulent reps and warranties about loans that were not fraudulently originated.)


Pressure from an unlikely source forces JPMorgan into talks.

JPMorgan's Dimon put in a rough spot

In 2009, Atty. Gen. Eric Holder called on prosecutors across the country to join Washington and New York-based mortgage fraud probes.

As Wall Street awaits final word on the tentative $13-billion settlement, Wagner continues to pursue his criminal investigation of JPMorgan.

L.A. Times The threat of a Sacramento-based criminal prosecution — which could still proceed — played a crucial role in the negotiations for civil penalties. Billionaire investor Warren Buffett sized up the threat to a financial firm earlier this week.

"You have no ability to negotiate," he said Tuesday. "Basically, you've got to be like a wolf that bares its throat, you know, when it gets to the end. You cannot win."

A criminal prosecution would mark a "clear shift in attitude" at the Justice Department, said John Coffee, a securities law expert. Just months ago, the department caught heat for going easy on big Wall Street firms. But if no top executives get charged, the federal government may miss an opportunity to satisfy public outrage and avert future misdeeds, said law professor Arthur Wilmarth Jr.


Petitioner in SCHEIDER v. DEUTSCHE BANK asks New York Court of Appeals if Glaski is on point.

1. Do Appellants have standing to challenge Appellee, Deutsche National Bank Trust Company's (hereinafter referred to as "Deutsche Bank") failure to honor the specific delivery, time sensitive, and transfer requirements for notes and mortgages under the governing document for the trust supposedly holding Appellants' note and mortgage?




2. Does New York law control the enforceability of Appellants' note and mortgage?

3. Did the delivery and transfer of the Appellants' 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 Appellants' mortgage after the commencement of this
action and contrary to the mandates of 26 U.S.C. Section 860D, render this assignment "void" as opposed to "voidable"?


Setting the Record Straight: BofA's Rebecca Mairone Found Liable for Fraud

Prof. Randal Wray Stop the fraudsters. Stop the foreclosures. There should be an immediate 5 year Country-wide moratorium on foreclosures. Investigate the fraud. Jail the fraudsters. Put the biggest banks into receivership. Begin to clean-up the document mess created by the banks and MERS (the banks lost or destroyed all the records of property ownership). Our economy will not recover until this is done.

S.F. family loses fight, evicted after 34 years

Score one for the tech-fueled housing boom in San Francisco, and mark down one more poor family ousted from their home.

SF Gate The eviction of 80-year-old Poon Heung Lee and his family had drawn noisy protests by tenant advocates and sympathy from Mayor Ed Lee and several city supervisors over the past year - but to no avail. The drama may have an afterlife, however, in that it also spurred City Hall and community leaders to craft prospective policy changes to protect others in their predicament.

Misleading Mortgage Claims to Cost EMC Mortgage $1.7M

The "plaintiffs were charged a different, much greater interest rate than promised," the said. "Further, EMC Mortgage disguised from plaintiffs the fact that defendants' Option ARM loan was designed to, and did, cause negative amortization to occur. Further still, once lured into these loans, consumers cannot easily extricate themselves from these loans.

Class Action Complaint

Courthouse News In addition to a $1.7 million fund for the settlement class, the lead plaintiffs will recover up to $2,500 each in incentive payments. Class counsel will seek up to 30 percent in compensation from the fund for services, costs and expenses.
Wilken said there will also be a website containing information about the settlement agreement and how to access claims.
The final hearing for the settlement is set for Jan. 16, 2014.


Greg Hunter of USAWatchdog.com  goes One-on-One with former Senior Counsel for the World Bank, Karen Hudes.

  The U.S. has to come around to the Rule of Law

There is fraud and corruption from top to bottom in the financial system.

"We are serious about resolving our problems in this country and the cover-up to the people."  

USA WatchDog The central bankers have a scam going on. It’s a Ponzi scheme. The citizens of the world are paying interest on their currencies. These currencies are not being issued by the governments; they are being issued by private bankers.” - Karen Hudes

They allowed people to sell liar loans and package them into securities and rate them AAA - when they weren't. They have had forgery and perjury and fraud on the court with the mortgage foreclosure crisis, which is nothing more than forgery and perjury and fraud on the court.

(And the judges rewarded forgery and perjury by giving away free homes to banks that never owned those homes. MSF)

  The cost of doing business

This is part of long painful hangover from the worst period in residential lending in the history of the world.

All In with Chris Hayes Chris Hayes and an expert panel look at whether we are finally turning a corner in holding big Wall Street banks to account.

Don't Negotiate with CHASE - PROSECUTE THEM!

Other98 We’re tired of Big Banks being Above the Law. Tell the Department of Justice that negotiating with criminals on their own punishment is unacceptable. America is tired of Chase paying fines. We need Chase doing Time.


JPMorgan Faces Possible Penalty in Madoff Case

Federal authorities are preparing to take action in a criminal investigation of JPMorgan Chase, suspecting that the bank turned a blind eye to Bernard L. Madoff’s Ponzi scheme.

Underscoring concerns that a guilty plea could destabilize the bank, the people said, prosecutors have discussed the ramifications of criminal charges with one of JPMorgan’s regulators.

DealBook While deferred-prosecution agreements are the Justice Department’s preferred tool for punishing corporate giants — they allow prosecutors to appear tough without imperiling a company’s health — they are typically deployed only when misconduct is severe. For a large American bank, they are nearly unheard-of.

But the government, the people added, has not ruled out a harsher punishment for JPMorgan Chase’s national banking subsidiary. 

The rules matter — CASE DISMISSED, without prejudice

Judges are now getting that the homeowner is in search of the real lender - not a free house.

The colloquy between judge and counsel at this link clearly shows what is happening in a growing number of cases where the Judges have stopped ignoring the rules of civil procedure, stopped ignoring the rules of evidence, and stopped assuming that the borrower is a deadbeat looking for a free house.

Living Lies Practice Hint: Judges always seem inclined to think they have discretion in virtually all matters. The evidence statute is a rule of law that the Judge has sworn to uphold, defend and enforce. Unless there is some ambiguity in the statute no judicial interpretation is allowed. The ambiguity must be raised by the party seeking to state that the statute is ambiguous. 

Without that, the Judge has NO DISCRETION, because it is a law and not a rule of civil procedure.



BofA liable for Countrywide fraud, jury finds

Bank of America Corp. committed fraud when it sold loans to mortgage finance firms Fannie Mae and Freddie Mac in a scheme called the “hustle,” a jury found Wednesday.

MarketWatch The decision marks the first time a bank has been found by a U.S. court to be responsible for wrongdoing tied to its financial-crisis-era dealings, experts say.

The jury also found that Rebecca Mairone, a former Countrywide Financial Corp. executive, was liable for fraud for her role in leading the hustle loan-processing program

DOJ probes nine banks on mortgage-backed securities

Most of the probes are looking for civil violations for allegedly misleading buyers of residential mortgage-backed security, not criminal sanctions.

Reuters Citing people familiar with the matter, the newspaper said the banks include

Bank of America, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Morgan Stanley, Royal Bank of Scotland, UBS, and Wells Fargo.


Elizabeth Warren Presses Federal Agencies For Enforcement Records On Financial Crimes

Sen. Elizabeth Warren (D-Mass.) on Wednesday pressed three financial regulatory agencies for information on their criminal enforcement records since the financial crisis.

Huff Post "According to a recent analysis by the Federal Reserve Bank of Dallas, the crisis cost the United States up to $14 trillion in lost economic productivity," writes Senator Warren. "While we must continue working to create jobs and accelerate our economic recovery, we also must look back to ensure that those who engaged in illegal activity during the crisis and its aftermath are held accountable."


After JP Morgan acquired Washington Mutual, foreclosures involving the Long Beach and WaMu trusts overwhelmingly involved loan documents made by mills within a few months of the foreclosures or bankruptcies.

Lynn Szymoniak Original mortgage assignments were seldom filed. Robo-signed mortgage assignments, made by several document mills, were routinely used in foreclosure and bankruptcy cases. Hundreds of thousands of mortgage assignments were manufactured for court cases. The trusts and their servicers were charged for manufacturing documents that were supposed to have been obtained years earlier and safeguarded. Cases were lost because of missing loan documents and the complexity and cost of foreclosing increased significantly when the original endorsed notes and assigned mortgages could not be produced. 


A few good men and women along with judges, foreclosure defense attorneys and homeowners enjoy lively discussions in court

As homeowners win more dismissals, foreclosure defense attorneys are finding the homes come with a catch — title insurance is virtually impossible to get.

Throughout the discussion, foreclosure attorneys vented their frustration over court procedures. They cited numerous situations where judges bent over backward to accommodate lenders seeking foreclosure.

Daily Business Review “The filings are falling because the banks can’t certify the chain of custody,” Oppenheim said.

Homeowners are getting dismissals based on lenders’ inability to show they have standing and expired statutes of limitation, Oppenheim said. Banks must file lawsuits within five years of the notice of default.

A new law that took effect July 1 requires plaintiffs to acknowledge in foreclosure complaints that all documentation needed to prove a case is in their possession.

An Aug. 28 decision from the Fourth District Court of Appeal put banks on notice that their expert witness must have direct knowledge of the authenticity of records being submitted as evidence.


Only $4 Billion of JPM $13 Billion Settlement Goes for “Consumer Relief”

The unraveling of this mess will depend upon quiet title lawsuits and lawsuits for damages resulting from violations of the Truth in Lending Act — where those gross profit distortions at the broker-dealer level are required to be paid to the homeowner because they were not disclosed at closing.

Living Lies Any presumption in favor of the foreclosing bank should be looked at with intense skepticism. And in discovery remember to ask questions about just how bad the underwriting process was and revealing the absolute fact, now proven beyond any reasonable doubt, the goal was for the first time NOT to minimize risk, but rather to force applications to closing because of giant profits that could be booked as soon as the loan was sold, since at the time of closing the loans were already part of a reported chain of securitization. Investigation at real banks as opposed to “originators” will reveal two sets of underwriting rules and practices — one for their own portfolio loans in compliance with industry standards and the other for the vast majority of loans that were claimed to be part of a fictitious cloud of securitization that did not comply with industry standards.

Tracking the JPMorgan Investigations

NY Times At least seven federal agencies, several state regulators and two foreign countries are investigating JPMorgan Chase. A settlement over mortgage practices presented the greatest test of the multifront campaign.

Making sense of the JP Morgan settlement

Reuters WaMu had shareholders’ equity of some $40 billion, before it was bought, which JP Morgan paid $1.9 billion for. JPM valued that equity at $3.9 billion, so it booked a $2 billion gain the minute that the acquisition closed; it then said that WaMu would contribute about $2.5 billion per year in extra profits going forwards.

The point here is that JPM fully expected that legacy WaMu assets would generate some $36.1 billion in losses. Now that those losses are starting to appear, all that we’re seeing is the arrival of something which was expected and priced in all along.

J.P. Morgan faces $5.75 bln in additional payouts

Investors are seeking at least $5.75 billion from J.P. Morgan Chase & Co. in a bid to recover losses from mortgage-backed securities sold to them before the financial crisis

MarketWatch The discussions are separate from a tentative $13 billion settlement with the Justice Department that would resolve a number of J.P. Morgan’s other mortgage-bond lawsuits and investigations. That larger pact is expected to be completed as early as this week.

Judge Orders Goldman to Pay Programmer’s Legal Bills

The question of who should pay the legal bills of an employee accused of wrongdoing has become an increasingly important topic at banks and inside the white-collar bar.

DealBook “As a result of these two misguided prosecutions, Serge Aleynikov lost his marriage, his home, his job, his life savings, his good name and, for a full year, his freedom,” Kevin Marino, a lawyer for Mr. Aleynikov, said in an e-mail. “That the party which provoked all that misfortune must now begin to underwrite it is good news indeed.”


HSBC Corporate Rep. Says HSBC Does Not Hold Any Notes

... and how many judges gave HSBC free homes?


The trust was misnamed in the complaint – it is actually “MLCC 2006-3.” This corporate rep. states that there are “a couple of different trusts that have the lettering MLCC 2006-3.” (p.13, Lines 11,12) Wouldn’t the SEC be interested in that – since only one such trust is registered?

The Housing Justice Foundation  The most significant statement is on page 18, last line: “HSBC does not hold any notes.” This is especially important as the Trustee of a Mortgage-Backed Security is responsible for holding all notes for properties conveyed to a trust.
According to SEC records, HSBC Bank serves 332 Mortgage-Backed Trusts created between 2004 and 2007, with a total initial offering value of over $282 billion. 

This trial was set for this week – but this morning HSBC voluntarily dismissed.



Should individuals also be held accountable for the 2008 financial meltdown?

Now we consider the government's approach toward accountability in the wake of the financial crisis.

PBS What's most troubling is that not only are they apparently going to extinguish almost all civil liability for innumerable, egregious violations and wrongdoing relating to compliance in mortgages and other things, but not a single individual is being held accountable, yet again, for all this wrongdoing.

And, unfortunately, if we don't hold individuals responsible and accountable, then these things are going to happen again and again and again.


Fighting foreclosure is tough for the little guy

In the vast majority of cases, homeowners fighting foreclosure do not have legal counsel and the cases are decided without any examination of evidence in open court, consumer advocates say.

Oklahomans who find themselves in a similar situation to the Areharts can now apply for vouchers to hire a private attorney or free foreclosure defense assistance through Legal Aid, depending on their income.
The money to hire the attorneys comes from an $18.7 million fund from the nation's five largest mortgage servicers that state Attorney General Scott Pruitt used to design his own program after he decided to opt Oklahoma out of the National Mortgage Settlement.

Tulsa World "The thought of just one Oklahoma family losing their home just because they did not have legal help is very troubling," Figgins said.

Opt-out reasoning

A memo emailed from Pruitt's staff to the Tulsa World elaborates on some of his reasons for opting out: "You need to be clear that there were two groups of people. There were people who lost their homes or were on the verge of losing their homes because of something the banks did. These were the people who were harmed. Then, there were people who were just in a bad financial situation and experienced foreclosure at no fault of the banks. Oklahoma's settlement helped the people who had something happen to them because of the banks. The servicers helped the rest of the people who were just in a bad financial situation with modifications and write-downs. These are NOT the same groups of people."

The banks are committing crimes against BOTH groups. MSF


Facing Foreclosure: Oklahoma's mortgage settlement program benefits attorneys

Oklahomans can apply for free foreclosure defense assistance through Legal Aid, or for vouchers of up to $5,000 to hire an attorney if their income exceeds the threshold for free help from Legal Aid Services of Oklahoma.

Oklahoma City attorney Scott Harris has the most total cases through the voucher program but has only billed for four so far.

Tulsa World Harris said he's been practicing foreclosure defense for nearly three years throughout the state. He could earn as much as $270,000 from the program.

Ben Lepak said he learned the ins and outs of foreclosure defense working on the other side for a large corporation in Texas.
The experience made him passionate about helping homeowners who are having a hard time, and his firm is willing to travel throughout the state to do it, he said. "I've seen how much of a mess the mortgage industry made," he said. "They took this massive taxpayer bailout and then refused to work with homeowners. We're working hard to help people."


Considering the Fairness of JPMorgan’s Deal

As details emerge, Wall Street’s fears of a largely punitive settlement may not add up.

Those cases, the people said, focused almost entirely on either Washington Mutual or Bear Stearns.

DealBook While the overall sum is large, the money will flow to different parties. The largest sum, more than $6 billion, will serve as compensation for investors like pension funds that suffered losses from mortgage securities sold by JPMorgan, Bear Stearns and Washington Mutual, people briefed on the settlement talks said.

Another $4 billion will take the form of relief for struggling homeowners in cities like Detroit. The payout will serve as penance for the bank’s general mortgage practices, and does not stem from any particular mortgage securities or institution, according to one of the people briefed on the talks.

The remaining $2 billion to $3 billion will represent the only fine in the case.


Fannie and Freddie Demand $6 Billion for Sale of “Faulty Mortgage Bonds”

Most people sit back and think that justice is being done. It isn’t. $6 Billion is window dressing on a liability that is at least 100 times that amount. And stock analysts take comfort that the legal problems for the banks has basically been discounted already. It hasn’t.

So what does “defective” or “faulty” mean? Neither the media nor the press releases from the agencies or the banks tell us what was wrong with the bonds. But if you look at the complaints of the agencies, they tell you what they mean.

Living Lies If you look at the investor lawsuits you see that they are alleging that the notes and mortgages were “unenforceable.” Both the agencies and the investors filed complaints alleging that the mortgage bonds were a farce, sham or in other words, a PONZI Scheme.
Why is that important to foreclosure defense? The investors money was not used to fund the REMIC trusts. The unfunded trusts never had the money to buy or fund the origination of bonds. The notes and mortgages were never sold to the Trusts even though “assignments” were executed and shown in court. The assignments themselves were either backdated or violated the 90 day cutoff that under applicable law (the laws of the State of New York) are VOID and not voidable.


So How Big a Deal is the Pending “$13 Billion” JP Morgan Settlement?

While the one criminal case against JP Morgan executives is carved out, don’t hold your breath. But JP Morgan has agreed to cooperate with the Department of Justice in prosecuting former JP Morgan executives. That would include Bear Stearns officers like Tom Morano and Mike Nierenberg accused of double dipping in a suit by mortgage guarantor Ambac against Bear and JP Morgan.

naked capitalism While the media is all agog over the prospect of the “biggest settlement evah” with a single company, concentration has risen greatly in a lot of industries, particularly banking, so bigger companies and even mild inflation means settlements should get larger over time. So size is not a metric of accomplishment. The question is what was the actual liability and is the settlement an adequate remedy? We have the same problem here as with the mortgage settlement: save for a couple of types of bad conduct, it looks as if not enough discovery was done to know the extent of the conduct and hence what an appropriate remedy would be.

Bankruptcy as an Asset Protection Tool – Part 2

Bankruptcy Law Network I have written extensively  how bankruptcy leverage gives homeowners the highest probability of a meaningful mortgage modification.

Under the threat of sanctions, the mortgage servicing industry actually cooperates with the homeowner to rewrite the home loan. As this phenomenal program matures, the judges and the banks are becoming more receptive to the process, and the results continue to outpace non-bankruptcy modification applications.

Robosigning and Forgery Let Two Murders Walk Out of Prison; and They Told Us Forgery Doesn’t Matter In Foreclosure Courts

Matt Weidner For years, those of us who fought the foreclosure battles complained that allowing widespread forgery and fraud in courts was improper because it represented an assault on the very foundation of the integrity of the court system.

But those pleas fell on deaf ears… because after all, these were only foreclosure cases and what does fraud and forgery matter anyway?

JPMorgan in tentative $13 billion deal with U.S. Justice Department

JPMorgan Chase & Co has reached a tentative $13 billion agreement with the U.S. Justice Department to settle government agency investigations into bad mortgage loans the bank sold to investors before the financial crisis.

Reuters The tentative deal does not release the bank from criminal liability for some of the mortgages it packaged into bonds and sold to investors, a factor that had been a major sticking point in the discussions.

JPMorgan disclosed it had stockpiled $23 billion in reserves for settlements and other legal expenses to help cover the myriad investigations into its conduct before and after the financial crisis.


HSBC $2.46 Billion Judgment May Not Be Total Liability

“Judge Guzman also ordered the defendants to pay post-judgment interest which will accrue during the defendant’s appeal,” the lawyers said.

Bloomberg While the trial court jury had determined stockholder losses from March 23, 2001, to Oct. 11, 2002, could be as much as $23.94 a share, it made no lump-sum award, and the lender’s liability remained open pending review of loss claims.


The $11.5 million will be used for payments to affected borrowers, mortgage fraud enforcement, and pay the costs of the State’s investigation.

Assurance of Discontinuance

Nevada Attorney General Catherine Cortez Masto The nearly two year investigation centered upon potential misrepresentations by lenders, including New Century, American Home Mortgage and MortgageIT, to Nevada consumers who took out subprime loans and Alt-A loans that were funded, bought and securitized by DB between 2004 and 2007. These include whether lenders deceived consumers about the actual interest rate and payments on their loans, and the potential payment shock when the initial “teaser” or “interest - only” rates on their mortgages expired.
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Former Fly Creek Cafe owner awarded $2.1 million over eviction

A jury has awarded a former Fairhope restaurant owner $2.1 million nearly a year after the Fly Creek Cafe was forced to close. 

Local 15 TV The owner of the building took restaurant owner Tricia Niemeyer to court, threatening eviction over several alleged violations under the lease. The jury sided with Niemeyer, awarding her $525,000 in compensatory damages, $1.5 million in punitive damages, and a $12,000 penalty for wrongful eviction. The popular Fly Creek Cafe has been closed since last October.


Foreclosure Haunts Next Home Purchase

Affluent home buyers attempting to get back into real estate after defaulting on their home loan are finding that few lenders are willing to work with them.

WSJ Callers include self-employed borrowers whose income dropped during the recession, causing them to fall behind on their mortgages, but who have since financially recovered. Also affected are borrowers who walked away from their homes after their values plummeted and owed more on their mortgage than the house was worth. Now that home values have stopped falling in most housing markets, they want back in.


Even When You Win, Homeowners Must Quiet Title and Clear the Negative Report on Their Credit

The plain truth is that virtually everyone who has a mortgage lien filed against their property which is subject to claims of securitization, sales into the secondary market, assignments, or other transfers have a problem with title.

Living Lies Since the Judgment is only against the party who initiated the foreclosure against you it does not act as a bar to another party coming in claiming that they are the owner, or even the same party coming in and saying NOW they are the owner and they are suing on non-payment after the Judgment was entered. There are several defenses to such an action, but I think we might see the banks test these theories out over the coming months.

HSBC Is Fined $2.46 Billion in Securities Fraud Case

The lawsuit also named as defendants former top executives of Household.

Reuters The judgment by U.S. Judge Ronald Guzman in Chicago was the largest in a securities fraud class action that went to a trial, according to a statement from the Robbins Geller Rudman & Dowd law firm that represented investors. Most securities fraud cases settle.

The suit was filed in 2002 and alleged that Household International had violated securities laws by fraudulently misleading investors about the quality of its loans.

Mortgage executive sentenced to prison over $18M fraud

BisJournal After leaving hundreds of borrowers in a lurch and causing $18.7 million in losses to government-owned Fannie Mae and Freddie Mac, former mortgage company executive Patrick Mansell was sentenced to federal prison.
U.S. District Judge Robin Rosenbaum ordered the Boca Raton resident locked up for five years over wire fraud charges, which Mansell previously pleaded guilty to.

Hearsay Practice Hints: Meeting Intimidation with Facts

Practice Hint: always check the State Statutes (or the Federal Rules) on evidence, especially here say and hearsay exceptions before you open your mouth or file any discovery. There are some juicy morsels in there. Like how you can use business records as an exception to hearsay and how the fundamental issue is the trustworthiness of the records. 

Living Lies Simply stated, if the records are those of a non-party who has no interest in the outcome, then the Court should lean toward allowing the business records into evidence upon the proffer of an appropriate witness and compliance with other rules of procedure requiring notice to the opposing party. Those rules should be carefully reviewed and used against the Bank if they don’t comply. REMEMBER ANY INSTRUMENT IS PROBABLY HEARSAY BECAUSE IT ISN’T A WITNESS. the issue is whether the records qualify for an exception to the hearsay rule. If the records come from a party, then they are inherently suspect because they are self-serving even if they are true or could be true. The rules should be strictly applied and you should preserve the issue not only with motions in limine but also by objecting at trial should the issue come up again even after the Court has entered an order barring the introduction of the business records.

Dimon Said to Have Given Up Role at Bank Unit on OCC Request

Bloomberg The move didn’t affect Dimon’s titles as chairman and CEO of the parent company. Shareholders backed him in a May vote against splitting those roles after U.K. traders in the firm’s chief investment office lost as least $6.2 billion on botched derivatives bets last year

Mortgage borrowers get more foreclosure protection from Mass. bank regulators

Boston Business Journal Having a hard time with the mortgage? Take the advice of local activists: Stop paying and stay put. State bank regulators have your back. 

The state Division of Banks has put its stamp on regulations designed to keep lenders from foreclosing a loan if the borrower has applied for a modification.

SEC loses case against Mark Cuban

The decision in the Cuban case was a blow to the SEC, which was still riding high after it won a blockbuster case against former Goldman Sachs vice president Fabrice Tourre this summer.

Huff Post Flamboyant billionaire Mark Cuban on Wednesday was cleared by a Texas jury of using a private tip to avoid a big loss on his 2004 sale of Internet company shares, in a stinging rebuke for the U.S. government which had accused him of insider trading.

"This case should have never been brought to trial," Cuban's defense lawyer Stephen Best said




This case concerns MERS' interest in a piece of real property purchased at a tax sale and currently owned by Kevron.

SUPERIOR COURT OF THE DISTRICT OF COLUMBIA Broadly, Plaintiff seeks to enforce a 2008 tax sale foreclosure order granting free and clear title to a piece of real property against which Defendants claim a lien. Defendants want the foreclosure order to be deemed unenforceable against MERS because it was not joined in the foreclosure lawsuit. The critical issue before the Court is whether, pursuant to the tax sale foreclosure statute, MERS was a required party to the foreclosure lawsuit. If so, MERS has a valid claim on the property that it can now seek to enforce. If not, MERS has no interest in said property and is precluded from further asserting any claims against the property.

Black Marks Routinely Expunged From Brokers’ Records, Report Finds

Some arbitrators have set up their own rules to evaluate expungement requests rather than wait for guidance from the regulator.

DealBook A report released on Wednesday by an association of lawyers who represent aggrieved investors suggests that Wall Street brokers were almost always successful when they asked to have black marks erased from their records after settling a dispute with a customer.
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Attorney Misses Her Own Mortgage Fraud Sentencing

Attorney Lisa Gerideau-Williams, who was to be sentenced today on wire fraud and tax charges, failed to show up and is now the subject of an arrest warrant, according to court filings.

Ms. Gerideau-Williams' husband, Robert L. Williams, 51, who had been a bankruptcy attorney, was sentenced in November to three years of probation for failing to file income tax returns.

According to the FBI, the law provides for a total sentence of 235 years in prison, a fine of $3,700,000, or both.

Mortgage Daily



Ms. Gerideau-Williams, 47, who was living in New Kensington, Pa., at the time of her 2010 indictment, pleaded guilty in January to 13 counts of wire fraud and three tax counts. U.S. Attorney David Hickton's office had said that she was a real estate closing attorney and a mortgage broker, who from 2005 through 2008 submitted fraudulent mortgage applications that misrepresented borrowers' income, employment and assets.

When the defendant did not appear for her 10 a.m. sentencing, U.S. District Judge Cathy Bissoon granted assistant U.S. attorney Brendan Conway's motion for an arrest warrant.


CFPB report says servicers create roadblocks for student loan borrowers

Plain Dealer The financial industry's business model known as the 'Theft by Deception Scheme', that swindled real property from millions of homeowners, while judges, law enforcement, politicians and regulators all turned a blind-eye - is the identical blueprint used against students. In this article, just replace the word student with home. 

Fewer Homeowners Than Expected Helped by Mortgage Settlement

Under the $25 billion national mortgage settlement intended to help at-risk homeowners, more gave up their homes in short sales than stayed in their homes through debt reduction.

NY Times All told, the banks had earned $15.4 billion in credit toward the $19 billion total they must reach in the consumer relief part of the settlement. The rest of the $25 billion was made up of cash payments to states and individuals who had already lost their homes to foreclosure.


Putting bicycles ahead of people

Pressure groups and government officials are seizing property – with no accountability.

It’s the story of the destruction of private property rights in America. Of injustice and tyranny. Of unaccountable government run amok. We need to take action!

American Policy Center This is a story of raw power, collusion and government corruption. A story that is taking place in countless towns all over America. A story of “reinvented” government, where self-proclaimed private “stakeholders” and pressure groups set the rules, local elected officials rubber stamp them, and non-elected regional governments enforce them, sometimes with an iron fist – all with no input from citizens, and apparently no rights for private citizens and property owners to stop them or even have a say.

from 2011

Jury Awards Homeowner $21 Million In Mortgage Lawsuit

Includes case documents

MSFraud compilation We came across this 2011 case in the MSFraud article archives and noticed the story no longer appears in Military News. We did some research and located the following articles, one attorney's summation of the case, and some of the case documents


News for veterans

Avoiding Foreclosure: VA Has the Tools to Help

Military.com Over the past few years, we have helped almost 300,000 Veterans who became delinquent in their mortgage find a way to avoid foreclosure. On our website, you can see real stories of real Veterans who were in trouble with their homes find solutions. There are many ways we can help you too.


Top Servicers Inch Closer to Completing Foreclosure Settlement

Mortgage Servicing News The $25 billion settlement was designed to encourage servicers to provide relief to underwater borrowers by giving them credits based on the type of relief offered. Each dollar forgiven in a short sale, for example, results in a credit of 45 cents if the bank owns the loan and 20 cents if it is held by investors. Servicers get $1 of credit for every $1 of principal forgiveness. (on loans they don't own.)

Securities Expert to Head New York’s Bureau for Financial Oversight

Mortgage Servicing News New York Attorney General Eric Schneiderman has selected mortgage securities expert Chad Johnson to serve as chief of the AG’s Investor Protection Bureau.

He has “already successfully investigated” various Wall Street related matters including “the conduct that led to the financial crisis in 2008,” Schneiderman said.


JPMorgan to Admit Wrongdoing and Pay $100 Million to Settle ‘London Whale’ Inquiry


DealBook JPMorgan Chase has agreed to pay $100 million and make a groundbreaking admission of wrongdoing to settle an investigation into market manipulation involving the bank’s multibillion-dollar trading loss in London. 

The case, which brings JPMorgan’s tally of fines in the trading loss case to more than $1 billion, was a first for the trading commission. Until now, the commission had never exercised its authority under Dodd-Frank to combat manipulation.


Goldman Must Turn Over Female Employee Complaints in Suit

The order came in a 2010 group lawsuit alleging Goldman Sachs engages in a pattern and practice of sex discrimination against female associates and vice presidents.

Bloomberg U.S. Magistrate Judge James Francis in Manhattan ruled yesterday that all complaints “conceivably related” to discrimination against women in the investment banking, securities, investment management and merchant banking divisions at Goldman Sachs must be shared with the attorneys, including the names of those who complained.


Coakley sues foreclosure assistance organizations that took big deposits

Coakley won an injunction last week keeping the defendants from drumming up any new foreclosure-related business, or charging advance fees.

BizJournal According to Coakley’s office, the Everett-based Alliance for Affordable Housing and Global Advocates Foundation Inc., as well as the Alliance for Hope Network Inc. in Framingham required homeowners seeking foreclosure assistance to make deposits of as much as 25 percent of their gross monthly income.

  Families in Statesville subdivision fight foreclosure

Eighteen families in a Statesville subdivision are fighting foreclosures they didn't cause. 

WSOC-TV In August, the Fogles and more than a dozen other homeowners received a letter that said they would have to pay $4.6 million or face foreclosure. The debt was from an unpaid construction loan nearly 10 years ago. 


As Courts Become Friendlier to Homeowners, Now what? — Quieting Title

Courts are acknowledging that the so-called lenders are evading discovery and not making a prima facie case. The Banks are slowing the filing of the foreclosures because it is obvious they have no basis for collection or foreclosure. 

Living Lies But the homeowners who are winning these cases are being faced with a problem: the mortgage is still on record, they can’t get title insurance, they can’t get a new loan, and their credit is ruined by the wrongful foreclosure that was filed. They also can’t sell their homes because of the unenforceable mortgage that is in the county records.
The answer appears to be a lawsuit to quiet title which really can be met with little opposition. And a second action for slander of credit and identity theft looks promising to clear the negative credit reports and collect damages.

A Push to End Securities Fraud Lawsuits Gains Momentum

DealBook A group of pro-corporate forces has begun a behind-the-scenes fight at the Supreme Court. You may not have heard about it, but it could just end shareholders’ ability to sue companies for securities fraud.

Full article

Law makes St. Louis foreclosure ordinance moot

A Missouri appeals court says a legal dispute over St. Louis County's foreclosure mediation ordinance is moot after a recently enacted state law.

STL Today St. Louis County's 2012 ordinance required that lenders give residential borrowers a chance to mediate before their homes are foreclosed. Missouri lawmakers this year approved legislation making real estate loans subject only to state and federal laws. It was aimed at overturning local foreclosure mediation ordinances. Gov. Jay Nixon allowed the law to take effect on Aug. 28.

The Missouri Bankers Association and Jonesburg State Bank had challenged the county's ordinance in court. The Missouri Court of Appeals' Eastern District said Tuesday in its ruling the county has conceded it will not enforce the foreclosure mediation ordinance. The appellate court dismissed the case as moot.


Foreclosure: Is A National Bank Authorized To Foreclose Non-Judicially In Arkansas?

JPMorgan v. Johnson

Mondaq The 8th Circuit considered the issue of whether a national bank is "authorized to do business" in Arkansas, as required by a state statute in order to proceed with a non-judicial foreclosure, in connection with a consolidation of three bankruptcy cases that were appealed to the district court, another case that was removed from state court to the district court, and a fifth class action case.

Fair housing group amends U.S. Bank complaint

The alliance alleges that the bank is not caring for foreclosures in minority communities as well as it is tending those in primarily white neighborhoods.

Chicago Tribune "The vast majority of the properties originally identified by (the alliance) are properties where we are trustee," Tom Joyce, a U.S. Bancorp senior vice president, said in an email, in response to the allegations. "We have no legal ability to service or maintain these properties."

The alliance disagrees. "No one is immune from liability under the fair housing act,\."


Should Foreclosure Attorneys Like Stern Be Subject to Bar Complaints and Lawsuits?

If the lawyer is party to fabrication of documents, forgery, and subordination of perjury (knowingly proffering a witness whose testimony is known to be false), then the answer is YES

Lawyers who have not researched securitization should neither be giving advice nor representing homeowners. It might seem counter intuitive. But if the homeowner vacated their home or entered into an oppressive modification or settlement agreement as a result of bad advice from an attorney ignorant of the current state of the law on wrongful foreclosure, there are significant damages.

Living Lies You must also realize that it is a violation of the Bar rules and in Florida it is a crime to threaten criminal action or quasi criminal action (bar violation) in order to gain a civil advantage. Thus the making of a threat will put you in a worse position than your adversary even if you are right, so don’t do it. 

In a malpractice action you must of course prove that the lawyer clearly made an error that goes beyond a reasonable judgment call that simply turned out wrong. The hard part is actually proving your damages. In order to do that you must prove that you suffered damages as a result of the lawyers’ malpractice and not as a result of simply a negative ruling and financial damages from the result from that ruling — AND you must prove that the ruling would have been otherwise if the lawyer had not committed the error.


Robert Shiller's Devastating Takedown Of Housing As An Investment Will Have You Renting For The Rest Of Your Life

Yale professor Robert Shiller won the Nobel Prize in Economics this morning.

BusinessWeek Among other things, Shiller correctly predicted the U.S. housing bubble when no one else would.

"So, why was it considered an investment? That was a fad. That was an idea that took hold in the early 2000's. And I don't expect it to come back. Not with the same force. So people might just decide, "Yeah, I'll diversify my portfolio. I'll live in a rental." That is a very sensible thing for many people to do.


Citigroup's Meager Returns

DealBook Citigroup’s new chief executive, Mike Corbat, ends his first year with third-quarter earnings below estimates, and breaks the bank got elsewhere make its overall performance look worse.


United States Court of Appeals, First Circuit, Remands Lower Court’s Decision by Ordering a Hearing With Reasonable Notice on the Whether the Injunction Should be Continued

Fryzel v. MERS

REFinBlog After the decision handed down from Fryzel v. MERS, No. CA 10-352 (D.Ri., 2011) On appeal, the plaintiff-appellees in United States Court of Appeals, First Circuit, [(Fryzel, et. al. v. Mortgage Electronic Registration Systems, Inc., No. 12–1526 (D.Ri., 2013)] brought suit to prevent foreclosure or eviction, on the shared ground that ostensible assignments of their mortgagees’ legal titles are invalid, leaving the assignees without the right to foreclose.


Foreclosure challenge dies quiet death in federal court

Proponents of foreclosure reform had hoped Brumfiel's case would tackle longtime efforts to force lenders to prove their right to foreclosure.

Denver Post Brumfiel claimed the process was flawed in that it allows lenders to foreclosure without having to prove their legal right to do so. Lenders at one time were required to produce the mortgage note that a homeowner signed, but a law passed in 2006 changed that, allowing lawyers to merely claim the banks had the authority.

Implications for Banks as Madoff Litigation Grinds On

The banks have been successful so far in blocking lawsuits seeking to hold them responsible for the extensive losses Mr. Madoff inflicted on his investors. If Mr. Picard is able to switch to a new pair of shoes and pursue them, there is a good chance that he can obtain additional settlements on behalf of investors.

DealBook The banking industry is sure to line up against further review, and will argue vehemently on behalf of the appellate court’s decision that the case should not proceed further. If Mr. Picard is successful in being able to sue the banks, the potential liability of financial firms could be enormous because to succeed, every Ponzi scheme needs a bank account and other accouterments of financial legitimacy.

Lost IQ: The True Cost Of Just Paying The Credit Card Minimum

Bankruptcy Law Network Stress makes you stupid

That’s right: financial stress causes a loss of IQ.

The stress caused by debt reduces your ability to perform intellectually. You make new, bad decisions because of stress.

Constant worry about paying bills intrudes on your thinking, and diminishes the mental resources you have to apply to all of life’s decisions.


From our Legal Lounge:

The Statute of Limitations in Foreclosure Actions

If your mortgage lender waits too long to bring a foreclosure action against you, you might be able to stop the foreclosure using your state statute of limitations.

Nolo If there is a significant time lapse between when you stop making mortgage payments and when the lender initiates a foreclosure, the foreclosure might violate the statute of limitations. If this happens, you can use this as a defense to the foreclosure. Read on to learn what a statute of limitations is and how it can be used to protect you from foreclosure.

Fannie Mae, Freddie Mac to go after more strategic defaulters

Fannie and Freddie can pursue judgments against borrowers who walk away from their loans even though they have the ability to make their payments. That's called a strategic default, and many borrowers are taking that step — typically throwing in the towel because their homes are no longer worth as much as they owe.

L.A. Times But the FHFA says it is going to make the GSEs clean up their acts. And that should serve as fair warning to those who can pay but fail to do so.

As the inspector general's office says time and again in the reports, chasing down strategic defaulters can not only cut the enterprises' losses on bad loans but can also "serve as a deterrent to those who would chose to strategically default on their mortgage obligations."

Going after strategic defaulters is big money.







Fightin’ Words on Consumer Complaints

The report continues, “In spite of fewer complaints closed with relief, consumers have been disputing fewer resolutions. In aggregate, the percentage of resolutions that were disputed fell from a peak of 27.9 percent in January 2012 to 18.6 percent in January 2013.” (5) Deloitte finds that “the data suggests that many complaints may be the result of customer misunderstanding or frustration rather than actual mistakes or operational errors by financial institutions.” (5)

CFPB’s consumer complaint database 
Analysis reveals valuable insights 

REFinBlog This conclusion seems like a big leap from the data that Deloitte has presented. I can imagine many alternative explanations for the decrease in disputes other than customer misunderstanding.

For instance, the consumer does not see a reasonable likelihood of a favorable resolution and abandons the complaint
the financial institution can point to a written policy that supports its position even if the consumer complaint had a valid basis, given the actions of the institution’s employees in a particular case in the case of a mortgage complaint, the consumer is moving toward a favorable or unfavorable resolution of the issue with the financial institution on another track (e.g., HAMP, judicial foreclosure)


Homebuilders speak out on foreclosure

Las Vegas Review The National Association of Home Builders issued a resolution on the foreclosure crisis. The association urges bank regulators to reduce the number of homeowners going into foreclosure by:

J.P. Morgan Swings to 3rd-Quarter Loss on Massive Legal Expense

Nasdaq Authorities have been investigating whether the bank--which acquired Bear Stearns Cos. and Washington Mutual Inc. during the financial crisis- -misled investors about the quality of the underlying mortgages that were tied to mortgage-backed securities issued by Bear and WaMu before the crisis.

UETA, E-Sign & Foreclosure… A Guest Post by Attorney Tom Cox

A negotiable note signed as part of a mortgage loan, remains a negotiable note for so long it remains unpaid and remains in existence. The sale of the loan evidenced by the negotiable note into a securitized trust does not change the character of that document as a negotiable note.

Tom Cox, Esq. When a loan evidenced by the note is sold, it is not “materially altered” due to its being sold into a securitized trust.
A note can only be materially altered if something is written on the note to alter its terms. Nothing is written on a note when it is sold, except, possibly, for an indorsement, and under UCC §3-204, and indorsement is not an alteration. Under UCC § 3-407 an alteration is only an unauthorized change in the note that modifies the obligations of a party to it. A sale of a note to a securitized trust simply does not do that.

The Glaski opinion has made the Wall Street banking industry crazy. 

$High$ Priced Attorneys Don’t Necessarily Buy Truth

Apparently, no one realized that the WaMu Mortgage Pass-­Through Certificates Series 2005-­AR17 Trust was a Delaware trust.


Deadly Clear Whether Glaski was a party or third-party beneficiary to the purported securitized trust agreement or Pooling and Servicing Agreement (“PSA”) is irrelevant. The PSA itself did NOT allow transfer into the purported trust AFTER the closing-date whether the borrower invokes standing to challenge assignment into the trust or not. The same holds true whether or not the borrower was a party or third-party beneficiary of the PSA. The appellate court ruled that such a transfer after the closing-date was not allowed as it would violate the purpose of the securitized trust as a REMIC as further addressed herein.


NY Fed Fired Examiner Who Took on Goldman

Today, Segarra filed a wrongful termination lawsuit against the New York Fed in federal court in Manhattan seeking reinstatement and damages. The case provides a detailed look at a key aspect of the post-2008 financial reforms: The work of Fed bank examiners sent to scrutinize the nation’s “Too Big to Fail” institutions.

ProPublica Before she could formalize her findings, Segarra said, the senior New York Fed official who oversees Goldman pressured her to change them. When she refused, Segarra said she was called to a meeting where her bosses told her they no longer trusted her judgment. Her phone was confiscated, and security officers marched her out of the Fed’s fortress-like building in lower Manhattan, just 7 months after being hired.

They wanted me to falsify my findings,” Segarra said in a recent interview, “and when I wouldn’t, they fired me.”

Big bank fines aren’t working

The penalties are greater than ever, but financial firms keep turning profits -- while the rest of us pay

Salon If somebody broke into your home and stole your belongings, you’d expect to see some serious consequences if they got caught. But when banks and financial firms rob, defraud and mismanage the money of Americans—and even cast them out of their own homes illegally—the worst that usually happens is a fine.

Charles W. Cox Letter to Supreme Court in Opposition to De-publishing Glaski v. Bank of America

The de-publication process should not be used as a forum to re-try the case. Supreme Court review was an available option but no petition filed. 

Published Opinion in:

 Glaski v. Bank of America


Attorney Michael Pines' Opposition:

The Wrongful Conduct of Counsel Seeking Depublish



Gene Johnson

Justice Joseph R. Grodin wrote in 1984 in confirming earlier explanations by the late Chief Justice Donald R. Wright and then Chief Justice Rose Elizabeth Bird, that depublication is only ordered because the majority of the justices consider the opinion to be wrong in some significant way, such that it would mislead the bench and bar if it remained citable as precedent.  Such is not the case here. 
The Appellate Court had no choice but to assume the purported "Trust" was formed under New York Trust Laws because Plaintiff claimed that it was. Defendants never refuted or objected to this stated fact in the instant case. This does not change the general concept the 
Court established that assets are prohibited from entering a trust after it is closed and the restrictive requirements to maintain limited liability for a pass through entity in order to mitigate tax liability or a tax exempt status

The Big-Bank Subsidy

NY Times The debate on very large financial institutions has reached an important moment. At the instigation of Senators Sherrod Brown, Democrat of Ohio, and David Vitter, Republican of Louisiana, the Government Accountability Office is assessing the extent to which big banks and others receive advantages because they have implicit backing from the government.


Homeowners in these "virgin locations" are often untutored in the nuances of property rights and unaware they may be sitting atop oil and gas deposits that could be worth thousands or even millions of dollars.

Special Report: U.S. builders hoard mineral rights under new homes

When the Davidsons paid $255,385 in 2011 for the house on Birdie Drive, they didn't know that they had, in essence, bought only from the ground up, and that their homebuilder, D.R. Horton, had kept everything underneath.

Reuters Janet Damon lives in a Denver community where builder Oakwood Homes leased out the underlying mineral rights to Anadarko Energy. And though drilling has yet to occur, Damon says, the possibility alone "has caused so much anxiety for families living in this radius that people started having health issues, panic attacks, because they're so concerned about their kids and families." Loss of mineral rights isn't the only hit homeowners take. Property-tax assessments don't take into account severed mineral rights. And "lenders may not be willing to extend mortgage loans on property that is subject to intensive gas extraction activities," according to a report last year by the North Carolina Department of Justice.


White paper

Enforcing The Mortgage Note

Elizabeth Renuart has posted Uneasy Intersections: The Right to Foreclose and the UCC to SSRN. 

REFinBlog This is a subject that Brad and I have touched on a bit in the context of the Show Me The Note! defense, but Renuart has done a magisterial fifty state review of how state foreclosure laws interact with the Uniform Commercial Code which has been adopted in all 50 states (NY has an older version it on the books for now). The case law in this area is incredibly confused and confusing. The article helps to chart a path to navigate the intersection between these two areas of law.


OUTRAGEOUS!: States use mortgage (FORECLOSURE) settlement money for everything but helping homeowners

wBanks steal homes, equity and wealth from homeowners; 

wBanks pay $2.5bn to compensate homeowners; 

wBanks send funds to the individual states; 

wState keeps the money; 

wHomeowners get nothing.

Mortgage Professional America This is why you don’t hand state governments a blank check. Rather than using it to help troubled homeowners, several states used at least $1bn of the $2.5bn they received from a settlement with mortgage lenders to pad their budgets or fund pet projects, 

Texas put almost its entire $135 million share into its general fund, then spent it on largely non-housing activities.

On the other hand, Rhode Island, which received about $8.5 million, put the entire amount into the Rhode Island Foreclosure Protection Program.


Wells Fargo to pay $3 million for its outrageous conduct.

Dollens v. Wells Fargo

Beatrice Brickhouse New Mexico District Judge  From the Opinion:

w  Wells Fargo demanded amounts due which were not owed or valid.                w Wells Fargo offered no valid justification for its continuation of the foreclosure action for five months after being paid.
w Wells Fargo's inability, unwillingness, and failure to take action when requested by MLlC is shocking.
w  The evidence of Wells Fargo's misconduct was staggering.



Wells Fargo: Insured Mortgages Still Being Foreclosed After Death Benefit is Paid to Bank

We have discovered something that is over the top even by current standards in the current mortgage mess, to wit: servicers, banks and other entities are receiving complete payoffs of the mortgage upon the death of the insured homeowner and then either (1) getting the heirs to sign a modification agreement as though the debt was still owed or (2) FORECLOSING. (OR BOTH).

This is not an accident.

Living Lies Nobody seems to know just how many homes were foreclosed on mortgages that were paid once by accidental death coverage or other PMI, and paid several times over by mortgage bond insurance and credit default swaps.

The bottom line is that if one of the alleged mortgagors (homeowners) has died, check thoroughly to see if an insurance policy may have been in force and if it is already paid off. 

It is obvious that the banks would rather pay the damages and sanctions IF they get caught - than change their practices. The reason is that only 5% of foreclosures are contested. If they win most of those, which they have been doing, the benefits of taking multiple payments on the same mortgage are far outweighed by the occasional sanction or damage award.
When Judges start being vigilant instead of expedient, the tide will turn.


Complete post

Mortgage investors urge Holder not to settle with JPM

In a letter to the Attorney General, the Association of Mortgage Investors ask him to consider the impacts any of legal settlements with banks over mortgages. 

Seeking Alpha Though not naming JPMorgan (JPM) by name, the group is clearly concerned with the rumored $11B settlement being talked about with the bank - only $7B of which would be in cash, and $4B in consumer relief. 

Last year's $25B settlement over "robo-signing" allowed banks to get credit for settling abuses by writing down loans - yet those loans are often held by third-party investors. There was also this year's $9.3B settlement which was similarly structured. "Parties sued by the government or third-parties should not be able to settle with assets that they do not own, namely other people's money," says the group's Chris Katopis.


Morgan-Lewis Requests PUBLISHED Opinion in Glaski v. Bank of America be DE-PUBLISHED

Glaski v. Bank of America

Morgan-Lewis We represent Deutsche Bank National Trust Company, solely in its capacity as trustee (the "Trustee") of the relevant residential mortgage-backed ("RMBS") trusts.
With all due respect to the Court of Appeal, Fifth District, California, we write to request de-publication of the Court's opinion in Glaski v. Bank of America.

$57B of FHA Loans Big Banks May Have to Eat

Big banks may be hiding losses on delinquent loans because forcing them into foreclosure could prompt the Federal Housing Administration to refuse to cover them.

American Banker The nation's four largest banks are holding $57 billion of seriously delinquent loans that they've been slow to move into foreclosure over concerns that the Federal Housing Administration, the government mortgage insurer, will refuse to cover the losses and hit them with damages

Is Borrower Bashing a Disease or Psychotic Disorder?

One speaker, on in-house counsel panel, suggested that routinely moving for sanctions against attorney’s representing debtors or filing ethics complaints against them would make lawyers think twice before representing debtors.

Scott E Stafne 

Stafne Trumbull, LLC

Except for a token two-person panel representing home owners and a group of judges, most of the speakers seemed to agree that there was little need for meaningful judicial involvement in throwing home owners out of their homes. Indeed, many appeared indignant that families would not simply march out of their homes into the elements because their creditors beckoned them to do so.

One complained our courts made matters worse by not just giving the houses to the banks so that the crisis could be over.

Alabama Supreme Court issues three significant decisions concerning law of foreclosure and ejectment

Lexology On Friday, September 13, the Alabama Supreme Court issued three significant opinions concerning Alabama’s law of foreclosure and ejectment. Although those decisions put to rest some of the uncertainty concerning the jurisdictional nature of defenses to an ejectment action and when a foreclosure actually takes place, they raise new issues concerning standing in general and foreclosures involving Mortgage Electronic Registration Systems, Inc. (MERS).

PONZI SCHEMES: Liability Of Lawyers and Accountants to be Considered

The loans were made from the pocket of investment banks and not the REMIC trusts. They were using investor money as their own, which is why the banks received insurance proceeds and proceeds of credit default swaps, and the proceeds of sale of the bogus mortgage bonds to the Federal Reserve.

Living Lies The question before the Supreme Court is not whether the principals are liable to victims of the fake investment scheme, but whether the professionals and affiliates are liable for their negligence or fraud in helping the Ponzi scheme to progress. To put it in lay terms, the question before the court is whether an accountant or lawyer for the Ponzi scheme can be liable if they negligently or knowingly assisted in the Ponzi scheme.

The very question testifies to the state of our tolerance for misbehavior and why our current foreclosure mess has failed to yield criminal prosecutions on mass fraud. Iceland put their bankers in jail and now enjoys a growing economy and a stable banking environment. In the United States there has been nothing. The FBI has stated that 80% of mortgage fraud is committed by the banks. Yet prosecutions have only been on the other 20%.


Homeowner gets caught in wrongful foreclosure

"It is just too much for me," Molina, a service manager for Avis Rent A Car in Orlando, said earlier this week. "My family asks me all the time what's the matter. I tell them I have proof I own my house, but no one listens."

Orlando Sentinel Those errors stand as a reminder of the problems that shut down the foreclosure system nationwide during parts of 2010 and 2011. Mortgage documents lacked proper signatures and income verifications. Foreclosure mills were accused of "robo-signing" foreclosure paperwork. And some homeowners complained that the courts were so inundated with the actions that they assigned foreclosures to "rocket dockets" that got little attention.

Critics: New Nevada short-sale provision ineffective

Nevada's "Homeowner's Bill of Rights" was pitched as a way to help underwater borrowers short sell their homes to family, friends or investors, then rent or buy them back.

Vegas Inc. But now, some are questioning whether the law really gives homeowners the upper hand on banks, which frown upon such prearranged deals.

Senate Bill 321, which took effect Oct. 1, was intended to ease the rules on "arm's length" agreements, which many financial institutions have required in recent years to ensure that owners retain no interest in their homes once they sell.

Brain-damaged Army vet tries to block eviction

NY Post “I’ve given the bank documents from the VA which predate the foreclosure litigation which indicates parts of his mental capacity are less than 1 percent. They seem to be turning a blind eye to them,” Sanchez said.
A lawyer for Velocity, Steven Rand, said, “No one, including Mrs. Giordano, her husband or Mr. Cupo’s counsel in the foreclosure action ever raised an issue about Mr. Cupo’s competence at any time during the foreclosure action, until after the gavel fell 


Tide Turning as Judges Get Irritated by Bank and Lawyer Behavior

Living Lies Judges are sensing a disconnect between the banks and their alleged lawyers, and they are right to question that. The assignment usually comes from LPS and the Plaintiff bank usually has no direct knowledge of the action because LPS fabricates most of the documents. That is why Judge Young said that if you want to proceed, I want to see a resolution of the Board of Directors of Wells Fargo bank that they ratify and accept the actions taken by the the attorneys supposedly representing them.
You can almost feel the vibrations of a ship groaning as it makes a turn. 

The banks are in for a rude awakening.



Make Debt Collectors Pay for Harassing You

“They’re bullies,” says attorney Ben Stewart of Stewart Law PLLC. “What consumers don’t know is that they may receive financial compensation for turning in nasty bill collectors for violating the federal law.

Lawyers & Settlements “People also don’t know that if they contact an attorney, the law says that bill collectors have to stop contacting you because you are represented by an attorney, and it won’t cost you a thing to do that. “If you hire me because the debt collector is harassing you in violation of a federal statute, then upon success of the case, my fees are paid by the debt collector, and the client who was harassed is entitled to receive money from the debt collector,” explains Stewart.

2013 legislation to speed up mortgage foreclosure

Naples News Limiting Prior Owners’ Claims: The bill limits a prior foreclosed owner’s claim to monetary damages after a foreclosed home has been sold to a third party if the foreclosure process was found to be property served - but possibly otherwise faulty. The purpose of this section is to provide clear title to the new owner who is an unaffiliated purchaser for value.

How the Foreclosure Crisis Made the Rich Even Richer

naked capitalism So investor in the mortgages lose, homeowners lose. The winners are the banks as inefficient looters (the money they skim off the servicing is chump change relative to the damage done by negligent and predatory servicing) and the investors who profit by picking up the pieces. This is isn’t a well-functioning economic system, it’s rentier capitalism. And it’s looking more and more like a doomsday machine for what remains of the middle class.


Forceful mayor's drastic plan to stop foreclosures

Mayor: "The banks CRIMINAL behavior created this crisis."

USA Today The idea is to prevent foreclosures, which cause blight, and help homeowners still stuck with mortgage loans far greater than their home's value, McLaughlin says.

"People were tricked. They were sold these bad loans. This is a question — for me — of a community being victimized," 


Self-deception, rationalization and moral compass

Long ago misbehavior of lenders caused both common law and statutory rules and laws concerning the “just debt.” If the loan was usurious many states made it a crime, wiped out the interest due and in some cases wiped out the principal as well to dissuade others would might be tempted to prey upon people

Living Lies If it was known in 1996 that more than $17 trillion would be taken from investors under false pretenses and that the bankers would create a “shadow banking system” tens times the size of the world’s money supply, the answer would have been “no, you can’t do that.” But because it happened over 15 years instead of 6 months and happened one “loan” at a time, it gradually eroded our outrage and acceptance of corrupt behavior became the norm. If you look at the results, you can easily see that the bankers retained all of their ill-gotten gains and were rewarded with more!


Woman Fined $252,000 in Mortgage ‘Rescue’ Cases

State regulators caution anyone who may be facing foreclosure to beware of those promoting mortgage rescue scams.

Big Iland Now They advise avoiding any business that can promise to stop the foreclosure process regardless of circumstances, instructs you to not contact your lender or recommends you stop making mortgage payments or redirect them to the company, or collects a fee before providing any services.


South Carolina Court Dismisses Foreclosure Based Upon U.S. Supreme Court Decision

The fact that the trial court cited a specific U.S. Supreme Court case from which the Supreme Court has apparently never retreated, means that the trial court was saying that this issue was decided 130 years ago, it is the law of the land and it overrides any state court that would rule otherwise.

Living Lies In the BP litigation, the 5th Circuit Court of Appeals just issued a ruling on the same topic and said “Absent a loss , a claimant has suffered no injury. Unless a claimant can colorably assert a loss, it lacks standing. See Lujan v. Defenders of Wildlife, 504 U.S., 560 (1992) (noting that an injury is a required element of constitutional standing)… if a claimant has suffered a loss, but has no colorable claim that the loss was caused by the spill, it also lacks standing and cannot state a claim.” IN RE DEEP WATER HORIZON
10/4/13 Complete post

Foreclosures spike before new law takes effect

Analysts say the number of initial foreclosure notices in Nevada spiked in the days before a state law adding more steps to the process took effect Oct. 1.

Las Vegas Sun The run-up came just before the implementation of the Homeowner Bill of Rights, which requires lenders give 30 days' advance notice before filing for foreclosure and adds other homeowner protections.

The state's foreclosure count swung dramatically in the past when new foreclosure laws came online.

Fannie Updates DU to Reflect Pre-Foreclosure Sales

Mortgage Servicing News Fannie Mae is updating its automated underwriting system so that lenders can report when troubled borrowers completed a pre-foreclosure sale so they aren’t treated as if they went through foreclosure when they apply for a new mortgage.

Moody’s raises red flag over St. Petersburg foreclosures

Tampa Bay Business Journal Citing a higher than average foreclosure rate, Moody’s Investors Service assigned a negative outlook for the city of St. Petersburg.


Max Gardner, Esq. Max created these charts and graphs for the transfer of a negotiable note and for the sale of a non-negotiable note.

The problem here might be the subject of a federal due process action against the state. Judges who have already decided foreclosure or mortgage litigation cases before they even see them are not fit to hear them. It IS that simple.

Attorney Mark Stopa Shows Guts Confronting Appellate Court Bias

Does the bank need to have a claim before it files it? The question is so absurd that it is difficult to address without a joke. But this is not funny.

The courts have made a choice that is unavailable in our system of law.

Living Lies The appellate court has officially taken the position that we know before we look at a foreclosure case that the bank should win and the homeowner should lose. The entire court should be recused for bias that they have put in writing. What homeowner can bring an action or defend an action where the outcome desired by the courts in that district have already decided that homeowners are deadbeats and their defenses are quite literally a waste of time? Under the rules, the Court should not hear the the motion for rehearing en banc, should vacate that part of the decision that sets up the rube certified question, and the justices who participated must be recused from hearing further appeals on foreclosure cases. (YES!)


Mark Stopa's Motion for Reconsideration

Mark Stopa, Esq. This Court cannot justify certifying “standing at inception” as a question of great public importance – as if it were a bona-fide question – when the legislature already requires facts showing “standing at inception” via a recently enacted bill (consistent with years of established precedent from Florida courts).
Quite simply, there is no “question” to decide – the legislature has already spoken.
January 2014

white paper


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

Professors of Law at 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.


Mortgage Settlement Monitor Lets Servicers Steal From Customers for Two Years Before Stepping In With Toothless Metrics

In particular, servicers have been denying a prompt decision on a loan modification for borrowers, as well as the ban on dual tracking, by never completing any loan modification applications. Banks have exploited these ambiguities for financial gain, and it has led to people losing their homes 

David Dayen California monitor Katy Porter was attuned to these issues about “completed” applications, and had a solution, at the beginning of July. Not only did it take Smith and the Monitoring Committee three months beyond this to come up with a metric, but it won’t even go into compliance testing until APRIL 2014! That’s over two years after the initial servicing standards went into effect. Keep in mind that the settlement is only effective for three years. So that means that Joseph Smith let the banks basically ignore their servicing standards, which were supposed to be a penalty for inappropriate behavior, for over 2/3 of the duration of the settlement. It’s abominable.

Justice’s Deceit on the JPMorgan Settlement, and Why Ed DeMarco Should Get Some Apologies

The moral bankruptcy of the Justice Department’s fake crusade against JPMorgan Chase was always fairly obvious, considering that the Attorney General is holding private meetings with Jamie Dimon, the chief potential suspect in a criminal case (hey, at least those talks were “constructive”). 

David Dayen Just yesterday, Dimon walked into the White House to meet with the President, afforded the respect of an elder statesman. The idea that he’s under “attack” is absurd.

But this has now burst into the open with Justice’s desire to stick the FDIC with half the bill:

JPMorgan Chase & Co’s possible $11 billion settlement of government mortgage probes has been complicated by a dispute with the Federal Deposit Insurance Corp over responsibility for losses at the former Washington Mutual Inc


After a Fraud, Regulators Go After a Canadian Bank

You can’t run a Ponzi scheme without a bank.

In such a scheme, money that is supposed to be invested is really used to line the pockets of the Ponzi promoter or to pay previous investors. A lot of money has to flow through bank accounts, and it flows in ways that differ from what the promoter tells investors is happening. Banks are in a unique position to notice what is going on before the money is all gone.

But it is extremely rare for a bank to face sanctions for not noticing.

That is why a joint regulatory action filed last week by the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network, a part of the Treasury Department, seems so noteworthy. TD Bank, an American subsidiary of Canada’s large Toronto-Dominion Bank, agreed to pay $52.5 million to settle accusations that it had helped a Florida lawyer named Scott W. Rothstein commit one of the more brazen Ponzi schemes of recent years.

NY Times The American Way:  The typical judicial attitude was expressed last year when the United States Court of Appeals for the 11th Circuit upheld the dismissal — before a trial or any discovery of evidence — of a class-action suit against Bank of America by investors who had lost money in a pyramid scheme run by a promoter named Beau Diamond.

Even assuming that the plaintiffs could prove that Mr. Diamond “engaged in atypical business transactions, such as numerous wire transfers unrelated to any legitimate business activity,” the appellate court ruled, that would not be enough. The allegations in the suit were insufficient to render “plausible” a conclusion that the bank had “actual knowledge” of what Mr. Diamond was doing, so there was no need for a trial.

See no evil, face no liability.

How Does Insurance Payee Match Up with Claims of Ownership of the Loan?

Living Lies There have been many admissions by government officials and even parties to the litigation over mortgage Foreclosures to the effect that at this point, the ownership of most loans is in doubt. Even President Obama said it, reflecting the views and advice of the senior advisors at the White House. On appeal, recently in California, BOTH sides admitted they had no way of identifying the true creditor — and that is why we have all this litigation, why we have gridlock on modifications and settlements. So what do we do?


Foreclosure Defense Nationwide Who is Ocwen working for? It does not say. What rights have been conferred upon Ocwen by whoever owns the loan? Ocwen does not say. What amount is the owner claiming is owed and under what facts? Ocwen does not say.

Meet The Monster Of The Housing Market: Presenting "Vampire REOs" Where Half Of Americans Live Mortgage-Free

In a press release overnight, the foreclosure tracking service RealtyTrac, observed that a stunning 47% of bank-owned homes are still occupied by their previous owners who were foreclosed on, creating "vampire REOs."

CBS News We explained this scheme by banks to limit the amount of available for sale inventory as follows: "since the properties not entering the foreclosure pipeline are effectively kept out of inventory, even shadow inventory, and thus the distressed end market, the monthly drop in foreclosures has acted as a form of subsidy to the housing market, as month after month less inventory than otherwise should, enters the market.... What this has resulted in is a logical increase in prices of the properties that are on the market." Today, the mainstream has finally caught on, and courtesy of RealtyTrac has come up with its own name for this subsidy: Vampire REOs.

Foreclosure Timeline in Washington State

Seattle Bubble It seems that there are a lot of misconceptions about how the foreclosure timeline works. Any time we’re talking about foreclosures it’s important that we understand exactly what the various terms mean, so let’s look at the foreclosure timeline in Washington State.


Schneiderman's legal action reminds us what a scam that supposedly groundbreaking settlement was from the get-go.

How the banks' big foreclosure settlement cheated consumers

The foreclosure settlement was always a bank bailout in disguise. Of the headline number, $25 billion, only $5 billion of that was cash coming out of the banks' pockets. The rest was "credits" they received for modifying underwater mortgage loans; since a loan modification that staves off a foreclosure almost always saves the lender money in the long term, the banks were actually getting credit for doing something that was in their interest anyway.

L.A. Times True, homeowners who had been abused in the foreclosure process got compensated -- an average of $2,000 each for a total of 750,000 claimants.  Yves Smith, observed at the time: "We've now set a price for forgeries and fabricating documents. It's $2,000 per loan."

As part of the settlement, federal regulators folded in penalties they were poised to slap on the banks. The Controller of the Currency reduced a $394-million penalty to zero. The Federal Reserve folded in $767 million in penalties.

In return, the banks committed themselves to acting within the law, meaning: no criminal fraud. Apparently that was a new concept in mortgage finance. But now we learn that BofA and Wells allegedly weren't even meeting that standard.

Affirmed in favor of the money-laundering HSBC


Raising a single assignment of error, Sherman asserts that the trial court 
erred in entering summary judgment “when [HSBC] did not have standing to bring the cause of action as it was not the real party in interest.” He asserts that the facts established by HSBC for purposes of summary judgment do not entitle it to judgment as a matter of law.

Court Rejects Aurora's Dismissal Bid in Mortgage Case

Courthouse News A federal judge rejected loan servicer Aurora's motion to dismiss a class action claiming it gives home owners in mortgage trouble false hope, ordering both parties into settlement talks.

They claimed they were actually misled into believing that they could avoid foreclosure and get their mortgage loans modified by adhering to the plan, but the payments under the workout agreements were too small to satisfy the money they owed and left them vulnerable to foreclosure.



Boom, Bust, Flip

Five years after the crash, investors are cashing in on foreclosed homes. For some, the financial crisis never seemed so good.

Of the 87,062 foreclosures in the last five years that were bought by corporate investors and have been flipped, about a quarter were sold for at least $100,000 more than what the investor originally paid, according to Redfin. (Although it’s impossible to know how much investors spent on upgrades or renovations.)

NY Times That includes the Earlls’ house. Last year, AKA flipped it for $290,000, an 87 percent markup. The woman who bought it is a recently retired pharmacy technician named Candace Lee, who searched for a new home for two years before purchasing. And like many buyers these days, she ended up paying cash. Incidentally, she also gave the Earlls a tour of the place a few months ago, when they drove by wistfully and saw her in the front yard. Lee’s purchase price was about what the Earlls paid for the house in the first place. If they had been able to refinance they’d likely be about whole by now. Instead, their credit is scarred for at least seven years.


OCC Assesses $37,500,000 Penalty Against TD Bank, N.A. For Failures to File Suspicious Activity Reports

Consent Order for a Civil Money Penalty

The OCC found that from April 2008 to September 2009, the TD Bank failed to file suspicious activity reports (SARs) on activity in accounts belonging to Rothstein Rosenfeldt Adler, P.A., the Ft. Lauderdale, Florida law firm through which Scott Rothstein ran a $1.2 billion Ponzi scheme, and who is now serving a 50-year prison sentence according to the SEC press release.

> SEC order against TD Bank
SEC complaint against Spinosa

OCC Press Release


SEC Press Release

These failures by the bank resulted in violations of the OCC’s SAR regulation (12 C.F.R. § 21.11(c) and (d)), which requires banks to file SARs in 30 to 60 days, depending on the circumstances. The failures to file SARs were significant and egregious for a number of reasons, including the number of alerts generated by these accounts and the volume and velocity of funds that flowed through them. The Bank ultimately provided more than $600 million (1/2!) in restitution to investors impacted by Rothstein’s Ponzi scheme. The $37,500,000 civil money penalty reflects a number of factors, including the scope and duration of the violations and the financial harm that resulted to the Bank. 

The penalty will be paid to the U.S. Treasury.

Banks Keep Breaking Into Houses, And Homeowners Are Fighting Back

Fed up with what they claim is a serious violation of their property rights -- and sometimes outright theft -- homeowners are fighting back.

Lawyers and other industry experts say growing awareness of the national scope of the problem has pushed more consumer complaints into courts. 

Huff Post Reynolds said he would immediately leave the property in such situations, as the contracting companies require in written guidelines. But others go ahead with these work orders, regardless of what they discover inside, homeowners and other contractors maintain. Indeed, some appear to see a fully stocked home as an opportunity to loot valuables.

In Atlanta, Woldeab Medhin was arrested after he forced his way back into his home after a Safeguard contractor locked him out. The worker, as it turned out, had the address mixed up and was at the wrong house.

More Tempests About Servicer Advances

How does an agreement between investor and investment banker create a new obligation from the borrower? If it does create a new obligation then the old obligation must be extinguished.

Living Lies Remember that the debt was converted from a note that the borrower signed to a bond that the REMIC trust signed and the borrower knew nothing about. If the REMIC trust was properly formed and funded, and if the PSA was followed, and if the REMIC paid for the funding or purchase of the loan, then the closing documents should have reflected that, the disclosures required it under Federal Law. 


Mysterious Study Backs Financial Adviser Thieves Who Want To Keep Bilking Small Investors

David Dayen This is all a function of throwing our retirement security into the hands of financial industry personnel who can’t help but use it as a rent-extraction opportunity. The solution isn’t to try to regulate that process per se, but to expand Social Security and return to defined-benefit pensions rather than to spend hundreds of billions every year in tax preferences for retirement accounts, effectively having the federal government act as an accessory to the thievery. But the absolute least we can do is create standards so that the advice millions of Americans get on their retirement money does not come from anyone looking to rob them.

Mortgage fraud cases hit London courts

FT At the Old Bailey on 30 September, two former Royal Bank of Scotland executives appeared in court, accused of pulling off a £4m mortgage fraud, and face five counts of fraud by abuse of position, money laundering, and obtaining property by deception.



Foreclosure Defense Nationwide It is unfortunate that we are not able to help certain homeowners who present us with a situation where they have tried to defend the foreclosure themselves, and have placed the case in such a bad posture that we are not able to assist. The proper thing to do, as we have said over and over again since 2008, is to retain an attorney early on, at the first sign of a foreclosure threat. The attorney can then structure the defense properly, instead of trying to dig the homeowner out from a litigation grave from which, sometimes, it is impossible to escape.

SEC Awards More Than $14 Million to Whistleblower

For more information about the whistleblower program and how to report a tip, visit www.sec.gov/whistleblower 

SEC The Securities and Exchange Commission today announced an award of more than $14 million to a whistleblower whose information led to an SEC enforcement action that recovered substantial investor funds. Payments to whistleblowers are made from a separate fund previously established by the Dodd-Frank Act and do not come from the agency’s annual appropriations or reduce amounts paid to harmed investors. 

Bill Clinton on deregulation: ‘The Republicans made me do it!’

The ex-president seriously mischaracterizes his record

Columbia Journalism Review Riegle-Neal hasn’t got a tenth of the press that the CMFA and Gramm-Leach-Bliley have, but it was a milestone in the creation of Too Big to Fail, allowing banks to cross state lines, effectively gutting state regulation of banking. The Christian Science Monitor that year quoted a Wall Street analyst saying that, “‘It also didn’t hurt that NationsBank president Hugh McColl has a working relationship with President Clinton or that the comptroller of the currency, Eugene Ludwig, was a successful lawyer at Covington & Burling and NationsBank had been a major client.’” Hugh McColl gave us Bank of America.


New York to sue Wells Fargo over alleged mortgage pact violation

The San Francisco bank allegedly failed to comply with customer-service reforms mandated by last year's $25-billion national mortgage settlement.

L.A. Times The lawsuit follows months of fruitless negotiations between New York Atty. Gen. Eric Schneiderman and Wells Fargo, according to several people briefed on the decision. Schneiderman has threatened since May to file a lawsuit against the San Francisco bank, which is the largest mortgage lender and servicer.

   Here's some Proof...

71-year-old fighting foreclosure amid Wells Fargo loan modification deal

UPDATE: Man to keep his home

WFTV He said the state-federal foreclosure settlement put an end to "dual tracking," which means part of the bank would be processing a loan modification, while at the same time, another section of the bank was filing for foreclosure.

     A.G. Schneiderman To Sue Wells Fargo, Announces Groundbreaking Servicing Agreement With Bank Of America

Schneiderman: Big Banks Face Clear Choice - Comply With Servicing Standards Outlined In National Mortgage Settlement And Treat New Yorkers Fairly, Or Face Real Consequences

Wells Fargo Complaint

Bank of America Agreement

Summary of the Bank of America Agreement

NY AG Press Release Too many homeowners in our state are facing unnecessary challenges as they fight to keep their homes," said Attorney General Schneiderman. "While Bank of America has chosen to work with us to take the steps required to adhere to their commitments, Wells Fargo has taken a different path. Both of these cases should send a strong message that the big banks must comply with the legally binding Servicing Standards negotiated in the National Mortgage Settlement, or face the consequences." 

When implemented, the agreement reached with Bank of America will correct many of the underlying issues that have prevented full compliance with the National Mortgage Settlement. The agreement leaves open the option to resume legal action against Bank of America if it fails to comply with the new terms.

May 2013

Why the whole banking system is a scam

Godfrey Bloom MEP

European Parliament

The truth spoken here in 2 minutes shows you how ridiculous and undeniably CRIMINAL the banking system is.

Why do Conservatives Oppose Prosecuting Elite Corporate Frauds?

Worse, the way they cheat causes terrible harm to the public and, in the case of accounting control fraud (looting), the firm. Control frauds cause immense “destruction” of wealth, but they are the opposite of “creative.”

Second, control fraud harms not only the primary intended victim, e.g., the bank’s creditors and shareholders, but also honest firms by creating a “Gresham’s” dynamic in which bad ethics can drive good ethics out of the markets. George Akerlof was the first modern economist to explain this point in his famous 1970 article on anti-purchaser control frauds (“lemons”) that led to him becoming a Nobel laureate.

Prof. Bill Black Under Becker’s theory of crime our current practices of allowing elite banksters to become wealthy through leading the “sure thing” of accounting control fraud with immunity from the criminal laws will predictably lead to new, larger epidemics of fraud that will continue to cause our recurrent, intensifying financial crises. It is rare, however, to find a prominent conservative who is demanding a priority effort to prosecute the elite bank officers who ran those frauds. I know of no conservative member of Congress publicly making that demand today. Senator Chuck Grassley has previously criticized the Obama administration’s failure to prosecute elite bankers.

“[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence” - Akerlof (1970)

JPMorgan insider helps Justice Department in probe

Reuters An insider at JPMorgan Chase & Co  has supplied a large amount of information related to the sale of mortgage securities to the U.S. Justice Department, which is using the documents to pursue possible criminal charges against the bank, the Wall Street Journal reported citing people familiar with the matter.

Chinese Banker Jailed for Housing Scheme

Official Allegedly Resorted to Forgery to Accumulate Apartments

WSJ The court heard testimony that Ms. Gong paid 300,000 yuan to buy Beijing residency-registration cards for herself and her daughter in 2005. She later forged ID cards with other names, the court said.
Full post


Wells Fargo Agrees To $869 Million Settlement With Freddie Mac

Wells Fargo & Co. has agreed to an $869 million settlement with Freddie Mac over claims on home loans it sold to the government-controlled mortgage finance company.

Huff Post The agreement announced Monday by Wells Fargo involves mortgages sold to Freddie before January 2009. Wells said the amount of the agreement was adjusted to reflect credits for previous claims payments, resulting in a cash payment to Freddie of about $780 million. Freddie and its bigger sibling Fannie Mae demanded that Wells Fargo and other big banks buy back mortgages they sold that later soured in the housing bust.

San Francisco-based Wells Fargo said it reached the agreement with Freddie on Friday. Citigroup Inc. also agreed last week to pay $395 million to Freddie to settle similar claims.

Florida foreclosure king is a scapegoat, attorney says at hearing

Palm Beach Post (Subscription required) The dethroned foreclosure king of Florida sat in a dingy Broward County courtroom Monday as charges of legal misconduct were levied against him and his once massive home repossession machine.
It was the first day of a Florida Bar trial pursuing 17 complaints against attorney David J. Stern, whose Plantation-based company — the largest so-called “foreclosure mill” in the state — was shuttered more than two years ago following allegations of notary fraud, forgery and flawed court documents.

Taking the transactions one payment at a time, the payments by the Servicer converts the obligation from payment on a secured note --- to a liability to the Servicer that is unsecured.

Servicer’s Advance Payments When Borrower Stops

Living Lies The following message and article brings up questions that I have been receiving with increasing frequency as homeowners, their forensic analysts and attorney dig further and further. They are following the money and coming up with the fact that servicers are advancing payments to investors when the borrower stops paying. In fact, they advance those payments to investors after the declaration of default and even after the foreclosure is complete.  Where do they get the money from?


Surviving Spouses With Reverse Mortgages Win Case

Reverse-Mortgage Rule on Surviving Spouse Tossed by Judge

HUD rules make it more likely that a surviving spouse will end up in foreclosure.

Bennett v. Shaun Donovan (HUD)

Bloomberg HUD erred “when it insured the reverse mortgages of plaintiffs’ spouses pursuant to regulation, which permitted their loan obligations to come due upon their death regardless of whether their spouses were still alive,” U.S. District Judge Ellen Huvelle said in an opinion released today.

The widowers who sued HUD cited a federal law that defers an obligation to pay off such loans until the homeowner’s death and defines “homeowner” to include the surviving spouse.


JPMorgan Settlement Complicated By Washington Mutual:

Huff Post The dispute, between the largest U.S. bank and the FDIC, could leave the federal agency on the hook for billions the bank is expected to pay as part of the settlement and substantially reduce the amount of the penalty JPMorgan actually pays to the government. 

JPMorgan is seeking a "global" settlement of federal and state mortgage-related probes that could involve a payment of $7 billion in cash plus $4 billion for consumers.


McCain Pressures Justice to Hold JPMorgan Executives Accountable

Will you seek to hold any top officer, director or key employees within JPMorgan personally accountable for the wrongdoing?” McCain, of Arizona, wrote in a letter today to Attorney General Eric Holder.

Bloomberg McCain asked Holder whether the settlement being discussed will preclude civil or criminal actions against JPMorgan executives and whether the structure of the deal will allow the New York-based bank to receive tax breaks on fines or penalties it may pay.

“Your personal meeting with the CEO of the corporate target of a major criminal investigation, at the request of the CEO, while negotiations on a global settlement agreement are pending, is highly unusual and, under the circumstances that the meeting occurred, gives rise to concern,” McCain said.


Homeowners’ Foreclosure Trauma a Roadblock to Workouts

"Negative emotions can be the biggest roadblock to defending against impending foreclosure."

Mortgage Servicing News “Many years ago, a corporate lawyer told me that in his personal and professional experience, someone who loses his temper is usually very afraid,” Benitez writes.

His advice to borrowers (and by default counselors) is, “before you explode in anger, stop for a moment and consider what is making you afraid. If you can figure out what is making you afraid and you deal with that fear, your anger will go away.”

Fear is defined as “a distressing emotion aroused by impending danger, evil, pain, etc., whether the threat is real or imagined,” he notes, it derives from worrying about their bad financial situation.


Long Island Modification and Foreclosure Update

Ronald D. Weiss, P.C. Homeowners living on Long Island, seeking a loan modification, are being helped by more favorable laws, cases and legislation. The trends are showing that nationally there are more modifications and less foreclosure starts.

The laws that affect a modification effort by a Suffolk County or Nassau County homeowner are both the statutory law and the case law of the State of New York, and the federal HAMP laws and other federal laws and regulations of the United States government and its agencies.



Lack of Standing Defenses in Long Island Foreclosure Cases

In a foreclosure proceeding, the plaintiff must prove standing by showing that they own the mortgage title and the complete chain of assignments (i.e., papers showing all prior owners of the title). If they cannot do this, then the defendant can argue that the plaintiff lacks standing to foreclose. This will spell defeat for the plaintiff, blocking them from seizing the property in question. Even if the plaintiff is able to prove all other relevant elements of the case — e.g., failure of the homeowner to make mortgage payments as agreed — their lack of standing will prove fatal.

Ronald D. Weiss, P.C. But, you ask, why would the plaintiff have trouble producing the title to the mortgage? It would seem to be a routine matter in an industry that depends so heavily on the proper enforcement on contracts. The mortgage industry, however, doesn’t run as smoothly or professionally as you might assume — this is another revelation that was brought to us all by the housing crisis. Numerous stories in the news have demonstrated that lost, mishandled, or improperly assigned paperwork is frighteningly common, largely because a mortgage title can change hands many times before it arrives at the company that attempts to foreclose. This is good news for homeowners who are facing foreclosure proceedings, as the financial entity that intends to drag them into court is often not the original holder of the title, and much of the time the organization is not able to prove that the debt was assigned to them in a proper fashion.

"This problem is nationwide.”

Why Judges Are Scowling at Banks

Maybe the judges are tired of the diet of baloney sandwiches the banks have been feeding them,” said April Charney, a foreclosure defense lawyer.


Cases mentioned:

Henning v. Wachovia, Wells Fargo

In Re: Ramos v. Bank of America


Gretchen Morgenson

NY Times

“The disconnect between Wells Fargo’s publicly advertised face and its actual litigation conduct here could not be more extreme,” the judge wrote. “A quick visit to Wells Fargo’s Web site confirms that it vigorously promotes itself as consumer-friendly,” he continued, “a far cry from the hard-nosed win- at- any-cost stance it has adopted here.”

Robert D. Drain, a federal bankruptcy judge in New York. Judge Drain found Bank of America in contempt of the debt discharge order protecting the Ramoses and required the bank to pay Mr. Schwartz’s legal bills in the case. The judge also ordered the bank to pay $10,000 a month in sanctions to the Ramoses until it stopped making the repayment demands.

Judge Drain acknowledged that it wasn’t a lot of money to Bank of America. But, he said, he hoped that its lawyers would get the message. “This is not just a stupid mistake” by the bank, the judge said. “This is a policy.”


TILA Rescission Returns in 3rd Circuit Opinion


This appeal arises under the Truth in Lending Act  (TILA), 15 U.S.C. § 1601 et seq. Congress enacted TILA in 1968 to promote the ―informed use of credit. 
To achieve this goal, TILA sought ―to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit.‖ Id. A 
consumer who does not receive the requisite disclosures regarding a loan secured by his principal dwelling may 
rescind the loan agreement. 

Living Lies There is a shift toward borrowers in mortgage litigation. The decision points back to the origination of the loan. This decision follows a similar decision in the 4th circuit. It all comes down to what actually happened at closing? And we don’t actually know if the decision to allow rescission indefinitely on second mortgages will extend to the first mortgage if it is all part of the same transaction. The result of rescission is that all payments of every kind must be returned to the borrower plus interest and attorney fees and potentially treble damages. All payments mean closing costs, fees, costs, expenses, principal interest, escrow and anything else. If the “lender” doesn’t do that the mortgage lien is expressly invalidated by operation of law, which is the same as being subject to a recorded satisfaction of mortgage. TILA is back!! — at least until the Supreme Court gets to weigh in on this ongoing dispute.

Countrywide Whistle-Blower Says U.S. Talks Spurred Him to Sue

Bloomberg O’Donnell testified he warned Countrywide officials about the failure rate of the HSSL loans and that scrutiny and audits of the loan specialists should continue. Underwriters who previously processed loans had been let go, he said, and loan processors who replaced them were told to close loans and not worry if they were later defective.

FHFA Offered Unqualified Buyers Foreclosed Homes, Inspector Says

Bloomberg Fannie Mae did not always follow its contractor’s scores and recommendations,” Deputy Inspector Russell A. Rau said in the report. Fannie Mae, “with FHFA’s concurrence, permitted two potential investors to bid on mortgage pools even though both were scored by the contractor as high risk and not recommended to bid.”



Deadly Clear For nearly 20 years, in particularly the last 10 years, the courts, foreclosure defense attorneys, homeowners and politicians have been bamboozled by the blur and use of “MERS – the service mark for the MERS® eRegistry system owned and operated now by MERSCORP Holdings, Inc.

The MERS Blur© gang would like you to think of them all as one big corporation – but they are not. They have bamboozled the courts into making absurd decisions – many of which are based on erroneous information.


Reverse Mortgage Nightmare: Widow Facing Foreclosure

WFMY "As Wells Fargo was telling her that she'll not lose her home, they were having her do something that would cause her to lose her home later," said Freeman's current attorney, Robert Lefkowitz. Now, Barbara is finding out the hard way. Just months after her husband's death, Well Fargo has come back to take the house.

Foreclosure notice? Stay home, Buffalo judge says

Homeowners who receive a foreclosure notice from their bank should stay in the house, and cut off any padlock that is put on their door, Housing Court Judge Patrick M. Carney said Thursday.

People should leave their house only if they get a court order, he said.

Buffalo News Many times, people who are facing bank foreclosure think they must leave because of carefully worded letters they receive from their mortgage lender, he said. But they don’t know they are still responsible for the upkeep of the home, even if the bank starts paying the taxes so it doesn’t face foreclosure from the city.

It’s your house, you own it, you’re responsible for it,” he said.

Even Carney said he can’t get banks on the phone about properties that have fallen into foreclosure, been abandoned by the homeowner and are now becoming blights on the neighborhoods.

D.C. home foreclosures prompts lawsuit

A lawsuit that seeks to stop tax-lien investors from taking homes through foreclosures has been filed in federal court in Washington.

WJLA D.C. tax liens allow investors to target poor areas for foreclosures
The Washington Post reports the lawsuit was filed Tuesday in the name of Bennie Coleman. Coleman, a 78-year-old veteran, became a symbol of the city's often-abusive tax collection system after losing his home over a $134 bill. Attorneys are seeking compensation for Coleman and others whose homes were taken in recent years.

Looting the Pension Funds

(Judges, this means you too.)

All across America, Wall Street is grabbing money meant for public workers.

It's a scam of almost unmatchable balls and cruelty, accomplished with the aid of some singularly spineless politicians. And it hasn't happened overnight. This has been in the works for decades, and the fighting has been dirty all the way.

Matt Taibbi

Rolling Stone

Not only did these middle-class workers already lose huge chunks of retirement money to huckster financiers in the crash, and not only are they now being asked to take the long-term hit for those years of greed and speculative excess, but in many cases they're also being forced to sit by and watch helplessly as Gordon Gekko wanna-be's like Loeb or scorched-earth takeover artists like Bain Capital are put in charge of their retirement savings.

  Matt Taibbi on How Wall Street Hedge Funds Are Looting the Pension Funds of Public Workers

JPMorgan chief meets Holder in bid for deal to end probes, avoid criminal charges

The fine would still represent a sliver of the damage wrought by the bank for selling mortgage securities that it allegedly knew were worthless.

Washington Post Even at $11 billion or more, the bank would be paying just a fraction of the damage it wreaked on mortgage investors, government agencies and homeowners. And a deal might ensure that no senior executives go to jail, which some experts say would let Wall Street avoid full responsibility.

from 4/12


Book Describes Out of Control Mortgage Servicing Industry

FDL One theme of the book is how the servicers simply had no ability to deal with a large crisis, considering their cost-cutting worldview, lack of experienced personnel and motivation toward profit rather than customer service. In this excerpt from the book, Chris Wyatt, a former employee at Litton Loan Servicing, the servicer that was actually part of Goldman Sachs, describes the state of affairs:

JPMorgan Urged to Pay More in Mortgage Deal

Mr. Holder’s nearly hour-long meeting on Thursday with the chief executive, Jamie Dimon, followed days of intense negotiations during which JPMorgan ultimately offered to pay a roughly $7 billion fine and provide $4 billion in relief for struggling homeowners.

DealBook And the size of the fine is not the central negotiating point for the bank: JPMorgan is instead focused on using the wide-ranging pact to resolve many of the mortgage-related investigations it faces. Most important, the bank is asking that prosecutors in California drop a criminal investigation into the bank’s mortgage practices — a request that the Justice Department has yet to meet.

How not to win in Texas


With regard to the breach of contract - the trial court stated that the Castillos did not prove the existence of a valid contract because they did not produce or allege that there is a copy of the contract signed by Ocwen. [Servicers will never give you a signed modification, forbearance, or any other  agreement. The reason is simple - so they can argue in court that the contract is not valid because they did not sign it.]


Alina Ocwen told the Castillos that they will modify the loan if the Castillos dismiss the bankruptcy. The Castillos, believing that Ocwen has come to save the day, dismiss their bankruptcy and sign an agreement with Ocwen on November 26, 2010. 

When the Castillos receive their first account statement from Ocwen in December 2010, they notice that the terms were not those of the Agreement. So the Castillos contact Ocwen. Ocwen tells them not to worry that they it will correct the statement (yeah, right). The Castillos also ask for a signed copy of the Agreement, but Ocwen never gave it to them. So, in May 2011, the Castillos stop making their mortgage payments. Ocwen forecloses in September 2011. 

Loan Mod Fail

Chase Home Finance v. Nolan 

On December 21, 2012, following hearing, the trial court denied Nolan’s pro se motion to vacate confirmation of the sale.

For the reasons that follow, we reverse the trial court’s judgment, vacate the confirmation of sale, and remand for a hearing on Nolan’s motion, where she will have an opportunity to establish, by a preponderance of the evidence, that she submitted an application for a HAMP loan modification and that, in material violation of the loan modification program, Chase did not postpone the judicial sale of the home until after it had resolved the pending application.

Countrywide Settlement Payouts May Not Come until 2015

If the judge ultimately rules against the settlement, analysts note, it will mean new negotiations between B of A and investors, or in a worst case scenario, the megabank can file for Countrywide’s bankruptcy and litigate over “potential for successor liability.”

Mortgage Servicing News Closing arguments on whether Bank of America’s Countrywide unit committed fraud against government-sponsored entities selling roughly $1 billion in questionable mortgage loans will be presented in mid-November after the testimony of Georgetown law professor Adam Levitin suggesting the trial could be completed by Nov. 20 or 21.

Royal Park Sues Credit Suisse Over Mortgage Securities

Bloomberg “The offering documents further failed to disclose that, at the same time defendants were offering the certificates for sale to plaintiff, they were privately betting that similar certificates would soon default at significant rates,” Royal Park said in the suit. “Defendants used these offering documents to defraud plaintiff and its assignors into purchasing supposedly ‘investment grade’ certificates at falsely inflated prices.”

Homeowner files Amicus Brief in Kuchta v. Bank of America

For other briefs in the case click HERE

Attorneys for Amici Curiae Joseph and Lori
Amici Curiae Joseph and Lori LaPierre are like thousands of Ohioans - embroiled in a foreclosure. They are currently appellants in a case pending in the Tenth District Court of Appeals in
which the primary issue is the same as that now presented to this Court. The LaPierres believe that their perspective on the issues presented in the case will assist the Court in understanding not only the precise issue presented in this appeal, but also how the resolution of that issue will impact other areas of law.


Wells Fargo SANCTIONED in class action.


This monetary sanction is based upon an express finding that Wells Fargo’s actions as described above rose to the level of “bad faith or conduct tantamount to bad faith.”

Wells Fargo’s motion to enforce the Settlement Agreement will be DENIED.

Wells Fargo’s failure to comply with its reporting obligations and to provide consistent,  comprehensible data was at least reckless and on this record appears to have been willful. As a result of Wells Fargo’s conduct, Class Counsel has incurred significant expense in bringing the application for TRO and motion for PI, and in trying to make sense of Wells Fargo’s shifting and 
confusing numbers. Resolving the multitude of issues created by this conduct also has been extremely burdensome for the Court and has impeded order administration of a case that at least in  theory had been settled. What should have been a straightforward, transparent process –
determining how many class members applied for loan modification, how many were approved, and how many were denied – has turned into a convoluted nightmare
. Accordingly, the Court will require Wells Fargo to reimburse Class Counsel for their reasonable fees and costs incurred in bringing the application for TRO and motion for PI, and in briefing the matters before the magistrate.


Modification FAIL

Federal Court provides an instructional opinion allowing leave to amend on many of the 20 causes of action.

RockBridge v. Wells Fargo


Welcome to Freddie and Fannie’s Mortgage Shell Game

Deadly Clear Given a mortgage is an interest in land and the requirement under the statute of frauds that such contracts be in writing, the servicer’s standing to foreclose can be challenged absent some proof that the mortgage was specifically assigned by Freddie or Fannie to the servicer. Legally, Freddie and Fannie must assign back the note to the servicer. In fact, Freddie has a specific form 105 to do so.
Full post

Citigroup to Pay $395 Million to Settle Freddie Mac Claims

The agreement, announced on Wednesday, involves 3.7 million mortgages that were sold from 2000 to 2012.

Citigroup said the agreement was an important milestone in resolving its mortgage issues stemming from the 2008 financial crisis.

NY Times Freddie and its bigger sibling, Fannie Mae, pressed Citigroup and other big banks to take back mortgages they had sold that soured in the housing collapse. In July, Citigroup agreed to pay $968 million to settle similar claims from Fannie.

Bank of America paid $2.6 billion in 2011 to settle claims on home loans sold to Fannie and Freddie.

This is America’s worst regulator (and JPMorgan’s best pal)

Want to know how a megabank like JPMorgan gets away with so much garbage? This obscure regulator will infuriate you.

David Dayen Unlike the SEC, the OCC agreed to a settlement without forcing JPMorgan Chase to admit or deny wrongdoing. Worse, they are giving the bank several months to design their own punishment, a fairly common but nonetheless appalling practice. 

It turns out that JPMorgan conducted its credit card, auto and student loan collections in the same illegal fashion as it did its foreclosure operations: using affidavits where low-level employees testified to personal knowledge of the cases without actually knowing anything about them.


JPMorgan Could Pay $11 Billion To Settle Mortgage Probes

Huff Post An $11 billion national settlement is under discussion to resolve claims over JPMorgan's handling of mortgage -backed securities in the run-up to the recession.

The Justice Department is taking the lead on the settlement, which would include $7 billion in cash and $4 billion in consumer relief, though the deal also would include states with claims against the bank.


Mistaken Identity Leads To Mistaken Foreclosure Of Mansfield Man’s Home

Watson says Chase kept demanding payments, but the bank kept refusing to accept them – until three months later, when the bank sent him a letter announcing the intent to foreclose and demanding back payments and late fees

10TV Ohio The man just finished remodeling the house.

“Everything’s stolen – including the kitchen sink,” Watson said. “That’s a long time to be at the same place and then be kicked out for no reason. I didn’t do anything wrong.

In his mind, Chase would rather leave the house for vandals than fix its mistake and let him live there.

Bank of America Hit With Expanded Foreclosure-Upkeep Complaint

NASDAQ Bank of America is facing an expanded complaint that it failed to maintain and market foreclosed homes in minority neighborhoods while putting more effort into upkeep of homes in primarily white areas.


Bank of America Accused of Fraud Regarding Mortgage Services  

The latest round sees it being accused in regard to its mortgages which the government says amounts to fraud. 

Basics Media The bank is accused of having committed a serious crime, to which it says that it claims innocence since these losses were as a result of the economic meltdown which occurred globally in 2008, and whose effects continue to be felt to date. What this means is that the case is likely to remain in court until the presiding judge decides whether there is a case of which BAC is expected to answer or not. It is a case which has serious ramifications for BAC if it is found guilty.


Banks find appalling new way to cheat homeowners

So much for the National Mortgage Settlement. Homeowners are now getting foreclosed on without their knowledge!

As finance writer Barry Ritholtz has explained, home purchases involve a series of precise safeguards, designed to protect property rights and prevent situations where borrowers who are perfect on their payments get evicted. “In a nation of laws, contract and property rights, there is no room for errors,” Ritholtz writes. “The only way these errors could have occurred is if several people involved in the process committed criminal fraud.

Nationstar has racked up an impressively horrible customer service record in its short life, failing to honor prior agreements with borrowers and pursuing illegal foreclosures. The fact that Nationstar  and other corrupt companies like it are beginning to corner the market for mortgage servicing should trouble not only homeowners, but the regulators tasked with looking out for them. It didn’t seem possible that a broken mortgage servicing industry could get worse, but it has.

David Dayen Nationstar  is at the forefront of a massive shift in mortgage servicing. In the past few years, the largest servicers were arms of major banks, like JPMorgan Chase, Wells Fargo, Bank of America, Citi and Ally Bank. Those were the “big five” servicers sanctioned for an array of fraudulent conduct in the National Mortgage Settlement, which mandated specific standards for servicers to follow, like providing a single point of contact for customers and an end to “dual tracking,” when a servicer offers a trial modification to a borrower and pursues foreclosure at the same time.

The banks realized that they could sell the servicing rights and evade these standards, along with the higher labor costs associated with implementing them. What’s more, they would avoid new, higher capital requirements associated with holding servicing assets, allowing them to give bigger dividends to shareholders and bigger bonuses to executives.

So the big banks started selling off their servicing rights, not to other banks, but to specialty financial services firms like Green Tree, Nationstar , Walter Investment Management and Ocwen, all of whom are in kind of an arms race to become the biggest servicer.

Focht v. Wells Fargo

I concur in this decision because existing precedent requires me to do so.

Presumably, our mandate requires the dismissal of this foreclosure action, which in turn will undo the foreclosure sale. Ms. Focht will regain possession of her property and apparently continue her free use of the duplex while the lender continues to make advances to cover the expenses typically paid from escrow. Our certified question of great public importance is dispositive of this appeal and worthy of consideration by the supreme court.

Florida Court of Appeals

h/t 4closureFraud

A requirement that the plaintiff prove that it owned or possessed a promissory note at the commencement of a foreclosure action may have made sense during earlier periods of economic downturn, but in this era of securitization of mortgage debt and computerized banking, it has proven to be a restriction that often provides a windfall to a borrower who can prove no harm by the fact that the plaintiff obtains possession of the note after the filing of the lawsuit but before the entry of judgment. So long as there is no dispute that the borrower received the money and defaulted on the note, the law should not use “standing” to require the dismissal of a lawsuit.

Florida 2d DCA Decision Looks to REALITY not Legal Theory

The investors and the homeowners (i.e., the lenders and the borrowers) need to get together, compare notes and file actions together, taking away the curtain behind which the the banks are dodging bullets and questions about what really happened to the investors’ money and what is really being done to mitigate damages from loans that were not worth the paper they were written on from the very beginning.

Living Lies When BNC is unable to show a wire transfer or canceled check for the origination of the loan, when each assignee is unable to show a wire transfer or canceled check for the “sale” of the loan, the house of cards falls apart. And THAT is why condo and homeowners associations are going to win their priority claims against the alleged 1st and 2nd mortgage holders, and why the cases are going to be dismissed with prejudice or judgment entered for the homeowner — not because the paperwork wasn’t technically correct, but because the loan (unknown to the borrower) never came from the pretender lender and the real lender’s identity was concealed from the borrower. Whether a cause of action exists against the closing agent for applying proceeds received from a stranger to the transaction remains to be seen.

Court: Raid on mortgage settlement fund OK

Legislators did nothing wrong in taking $50 million from the state’s share of a nationwide mortgage fraud settlement to instead balance the budget, the Arizona Supreme Court ruled Tuesday.

AZ Daily Sun There’s still a ton of people that could have benefitted from this money that rightfully should have been spent on people with foreclosure problems instead of going to the general fund,” he said.

And Hogan said the irony of the whole thing is that lawmakers, in demanding the cash last year, insisted they needed it to balance the budget. But by the time the fiscal year ended on June 30, the state had a surplus of nearly $900 million.

Hear Tom Cox Fight Foreclosure in Maine Supreme Court 

– Color Commentary by Max Gardner 

Mandelman Matters This is a rare and very valuable opportunity to listen to both Tom Cox and the attorney for Wells Fargo, take turns presenting their arguments to the State’s Supreme Court Justices.

"There have been 15 appeals that have come before this court during the foreclosure crisis. 80% of them have being reversed against the banks because of sloppy, careless and deceptive presentations like this one. " - attorney Tom Cox



The Government alleges that between May 2001 and October 2005, “Wells Fargo engaged in a regular practice of reckless origination and underwriting of its [FHA-insured] loans and falsely certified to HUD that tens of thousands of those loans were eligible for FHA 

There is no basis to dismiss any of the Government’s federal statutory claims. Wells Fargo’s motion to dismiss is therefore DENIED as to these claims. 

In particular, the Government alleges that beginning in 2000, Wells Fargo significantly increased its origination of FHA-insured mortgages.  To do so, the  Bank relied on inadequately trained employees; impermissibly paid its underwriters a bonus based on the number of loans they approved; “applied heavy pressure on loan officers and underwriters to originate, approve, and close loans”; “required underwriters to make decisions on loans on extremely short turnaround times”; and “employed lax and inconsistent underwriting standards and controls”

JPMorgan May Settle With Group of Agencies

DealBook JPMorgan Chase, seeking to avert a wave of litigation from the government, is negotiating a multibillion-dollar settlement with state and federal agencies over the bank’s sale of troubled mortgage securities to investors in the run-up to the financial crisis.

States step into foreclosure mess

Mortgage servicers still have plenty of incentive to foreclose, and cities and states are looking to protect consumers -- with some results they didn't anticipate.

MSN Money Good old American "can-do" spirit hasn't been much good at righting the wrongs of the housing market in the five years since the crash. Take the problems with mortgage servicers, the bank entities that send your monthly mortgage statement, collect your payments and foreclose if you fall behind.

The foreclosure crisis gave us a backstage look at servicing, and the glimpse wasn't pretty.

Lawsuit alleges mortgage fraud against Somerdale firms

Homeowners contend two Somerdale refinancers left their customers owing on both old, new loans.

Courier Post “While these other entities are engaged in a game of ‘musical chairs’ over who is legally responsible for the missing mortgage monies, these plaintiffs are facing the choice of having to pay back mortgage money everyone admits they never received — or lose their homes,” the homeowners’ lawsuit says.

A funny thing in foreclosure country

Fresh construction and empty houses only a few miles apart in Las Vegas, where new housing makes some nervous.

All this activity still begs the question: What happened to all the empty homes?

Aljazeera This shadow inventory of homes that are vacant, or soon to be, totals anywhere from 40,000 to 80,000 is a conservative estimate.

Yet just a few miles away, backhoes and bulldozers are breaking ground for new homes. Buyers stream into sales offices and model homes.


Housing Smoke and Mirrors – “The Mendacity of HOPE (and HARP and HAMP)”

Global Economic Intersection The dissonance observed in Housing Smoke and Mirrors “Re-tuning the HARP”, “Name That Tune” and “Dude Where’s My Housing Recovery” has started to become the familiar monotone of weakness.

Since the back up in mortgage interest rates, after the “Taper” talk began, only 12% of loans are now “Refinancible”; as many borrowers now have existing mortgages that are at a lower rate of interest than is currently available. The refinancing window is now barely open.


Motion to Exclude Frey Testimony from Article 77 Raises Eyebrows, Questions About Role of BlackRock and PIMCO

Subprime Shakeout The backyard brawl between the AIG-led objecting investors on one hand and Bank of New York Mellon (BNYM) and the investors supporting BofA’s $8.5 billion settlement on the other is about to get even messier. 

Homeowner rights after foreclosure expanded

Arizonans who lose title to their homes in foreclosure actions are legally entitled to stay while they appeal, the state Court of Appeals has ruled.

"The deed of trust is the document that gives the bank the right to foreclose if there’s a default of payment,’’ he explained. “And so if you rescind the deed of trust, there’s no right of foreclosure.’’


Arizona Daily Star In a precedent-setting decision, the judges rejected arguments by a bank that once it gets title to the property it can automatically evict the owners.

Instead, the judges said title to the property and eviction are two separate legal issues, ruling property owners are entitled to the same protections as tenants who appeal an eviction in a landlord-tenant dispute.

The ruling is not a license for those who default on their mortgages to remain indefinitely and without cost. The homeowners seeking to remain have to post a bond.

TD Bank charged by SEC in Rothstein Ponzi scheme

Florida BizJournal Federal agencies on Monday charged TD Bank and its former regional VP Frank Spinosa with violating securities laws in connection with the $1.4 billion Ponzi scheme conducted by disbarred attorney Scott Rothstein, who is now serving a 50-year prison sentence.

Here Is The Highest Profile Prosecution To Come Out Of The Mortgage Crisis

Huff Post The 2008 financial crisis -- which was sparked almost exactly five years ago by banks and mortgage lenders who claimed that toxic loans were in fact AAA-worthy -- wiped out trillions of dollars of wealth and led to demands for accountability. There had been widespread fraud, after all, and somebody had to pay.

Regulator sues Morgan Stanley, eight others over faulty securities

Morgan Stanley and Morgan Stanley Capital I Inc, Barclays, JPMorgan Chase & Co's unit Bear Stearns, Credit Suisse Group, Royal Bank of Scotland Group and UBS sold faulty securities to Southwest and Members United corporate credit unions, the National Credit Union Administration (NCUA) said in its complaint.

Reuters Goldman Sachs Group Inc, Wachovia Corp, a unit of Wells Fargo & Co and Residential Funding Securities LLC, now Ally Securities, also sold faulty securities to Southwest, NCUA said.

"We continue to pursue accountability and recovery in the wake of billions of dollars in sales of faulty securities that led to the collapse of several corporate credit unions and handed the industry the costly bill of paying for the losses," NCUA Board Chairman Debbie Matz said.


Bank of America goes to trial over U.S. mortgage fraud charges

The trial is also a reminder of the billions of dollars in legal liabilities Bank of America has incurred as a result of its 2008 acquisition of Countrywide Financial Corp, which became a poster child of the mortgage meltdown.

Reuters Bank of America heads to trial this week over allegations its Countrywide unit approved deficient home loans in a process called “Hustle,” defrauding Fannie Mae and Freddie Mac, the U.S. government enterprises that underwrite mortgages.

In what would be the government’s first financial crisis case to go to trial against a major bank over defective mortgages, jury selection is set to begin in federal court in New York on Tuesday, barring a last-minute settlement.


For a Better Way to Prosecute Corporations, Look Overseas

DealBook The favored new tool of the corporate prosecutor, the deferred prosecution agreement, is being actively exported to other countries. In these agreements, prosecutors allow large corporations to avoid a criminal prosecution entirely by agreeing to pay a fine and adopt reforms. Five years after the financial crisis, many doubt whether prosecutors have taken business crime seriously enough, and some of the blame is laid on lenient deferred prosecution agreements.

JPMorgan’s Legal Hurdles Expected to Multiply

Its biggest battles with federal authorities may still lie ahead.

That's OK.  Shareholders will pick up the tab...

DealBook The nation’s largest bank is bracing for a lawsuit from federal prosecutors in California who suspect that the bank sold shoddy mortgage securities to investors in the run-up to the financial crisis. The case, expected as soon as Tuesday, could foreshadow other actions stemming from the bank’s crisis-era mortgage business. Federal prosecutors in Philadelphia are also investigating JPMorgan’s sale of mortgage securities.


Other People's Money

As JPMorgan Settles Up, Shareholders Are Hit Anew

DealBook When the S.E.C. says that JPMorgan is “paying” a record fine, where is the money actually coming from?

The answer: shareholders. The same shareholders who were ostensibly the victims of the scandal that already cost them $6 billion. The victims, if you want to call them that, become victimized twice.



Deutsche Bank v. Heinrich

Motion to Dismiss is Granted.

Foreclosure Defense Nationwide Counsel for Deutsche Bank made the familiar argument that it had possession of the original Note endorsed in blank, that the Note was a negotiable instrument under the UCC, that the Mortgage follows the Note, and that thus DB had established its right to foreclose. The Court disagreed, citing precedent from the United States Supreme Court’s decision in Carpenter v. Longan, 83 U.S. 271, 16 Wall. 271, 21 L.Ed. 313 (1872) which the Court found “clearly supports the notion that the Plaintiff must own the Note and the Mortgage to foreclose on the property (emphasis in the opinion).” 
The Court also noted that the Mortgage shows MERS to be the mortgagee but that “MERS is never mentioned in the Note.”


Basic Pleading Defects Reveal Fatal Flaws in Foreclosures

Living Lies In the days before the dust cloud of sham securitizations a Bank had to allege it made a loan to the homeowner or that it had purchased a loan, or acquired it through merger from an entity that made the loan. Why then are Banks skipping this essential allegation? And why are the Banks avoiding any allegation that they suffered financial injury?


JPMorgan’s $300M Forced-Placed Deal Sets Up Domino Effect

In the end, bad press surrounding force-placed practices could push more banks to settle, attorneys said.

“The bottom line is it smelled, and they knew it and everyone else knew it,” Oppenheim said about the Chase case. “They had to get away from the stench.”

Oppenheim Law JPMorgan Chase NA and Assurant Inc.’s $300 million settlement of a class action claiming they profited handsomely from high rates on forced-placed insurance policies will energize plaintiffs to pursue similar blockbuster deals at a time attorneys say force-placed actions are ripe for resolution.

The Chase settlement gives a big boost to plaintiffs’ lawyers who have aggressively pushed lawsuits over force-placed practices under a variety of theories, attorneys say. Plaintiffs’ attorneys have had limited success with claims that focused on the excessive prices charged for policies, but they’ve gained some leverage with allegations of secret kickbacks

Feb. 2013


From our Legal Articles page

Rebalancing Public and Private in the Law of Mortgage Transfer

The law governing the United States’ $13 trillion mortgage market is broken. Courts and legislatures around the country continue to struggle with the fallout from the effort to build a 21st century global market in mortgages on a fragmented, arguably archaic legal foundation. These authorities’ struggles stem in large part from the lack of clarity about the legal requirements for mortgage transfer, the key process for contemporary mortgage finance.

UC Davis Legal Studies Research Paper No. 327  We demonstrate two respects in which American mortgage transfer law is unclear and offer suggestions for fixing it. It is currently unclear whether a recorded mortgage assignment is needed to make sure that a mortgage transferee has a protected interest in the mortgage. It also is unclear whether a recorded assignment is needed to make sure that the transferee can lawfully foreclose on the mortgage. Revisions to the Uniform Commercial Code adopted around the turn of the century may be interpreted as doing away with preexisting laws arguably requiring parties to record their ownership interests to protect them. But the interaction of these revisions and preexisting state recording laws is most unclear, with consequences for borrowers, investors, and securitization arrangers. 




Buy a House, Make Your Payments, Then Discover You've Been Foreclosed On Without Your Knowledge

This should never happen, but it did, thanks to the sordid mortgage servicing industry.

Their mortgage servicer, Nationstar, foreclosed on them without their knowledge, and sold the house to an investment company.

Nationstar has racked up an impressively horrible customer service record in its short life, failing to honor prior agreements with borrowers and pursuing illegal foreclosures. The fact that Nationstar and other corrupt companies like it are beginning to corner the market for mortgage servicing should trouble not only homeowners, but the regulators tasked with looking out for them. It didn’t seem possible that a broken mortgage servicing industry could get worse, but it has.

Mortgage servicing is a sewer, and it needs to be completely overhauled from the ground up. If Nationstar represents the future, then until it faces real penalties or an expulsion from the industry for its conduct, private property rights in America will have to be seen as theoretical. 

David Dayen


If it wasn’t for the Sinclairs going to a local ABC affiliate and describing their horror story, they would have been thrown out on the street, despite never missing a mortgage payment. It’s impossible to know how many homeowners who didn’t get the media to pick up their tale have dealt with a similar catastrophe, and eventually lost their home.

As finance writer Barry Ritholtz has explained, home purchases involve a series of precise safeguards, designed to protect property rights and prevent situations where borrowers who are perfect on their payments get evicted. “In a nation of laws, contract and property rights, there is no room for errors,” Ritholtz writes. “The only way these errors could have occurred is if several people involved in the process committed criminal fraud.

What’s more, this new breed of non-bank servicers scooping up all these servicing rights has proven themselves as a bunch of cheats profiting off their customers. Green Tree Servicing has a terrible record of ripoffs. Ocwen has been sued in state court over its practices, including an innovative scam involving sending homeowners a check for $3.50, and claiming that cashing the check automatically enrolls the customer in an appliance insurance plan, which costs $54.95 a month.


Appeals court says Texas law governs foreclosures in Utah by BofA

In a ruling issued Thursday, the 10th Circuit Court of Appeals upheld an order by U.S. District Judge David Sam, who in 2011 had dismissed the lawsuit of a Utah County resident who’s home had been foreclosed on by ReconTrust, the foreclosure unit of Bank of America.

Salt Lake Tribune But Abraham Bates, an attorney who represented homeowners in other foreclosure lawsuits, said the court was "clearly reserving judgment on the main issues" presented by the appeal because the decision was narrowly tailored and the panel specifically said it was not a guiding legal precedent that could be used in other cases.

"The decision can’t be properly considered as a win on the merits for ReconTrust," Bates said in an email.


The CLOUD: No Name, No Docs, No Terms, No Balance Due: MBS Investors Screwed and Taking Borrowers Down With Them

So Reyes and this newly revealed actor from BONY are saying the same thing. They are Trustees in name only without any duties because no money or assets are in the trust. Which brings us back to the beginning. If the loan was securitized, the Trust would have had a bank account to receive money advanced by investors who were purchasing alleged mortgage bonds that promised that the investor also was an owner of the loans — an undecided percentage interest in the loans.

Living Lies And by the creation of the Cloud judges and lawyers missed the point completely. The result is stripping the investors of value, ownership and right to collect on the loans they advanced. At no time has any Servicer filed a foreclosure in the name of the investors whose money was used to fund the deal. In no case is there any underlying real transaction in which real money was paid and something was received in exchange. The Courts are now the vehicle of public policy and manifest injustice by enforcement of unenforceable mortgages for fabricated notes referring to non existent debts.
The net result is that public policy and government action is contrary to the rule of law.

JPMorgan Chase Pays $18.3M for Misleading Mortgage Info

The lawsuit, filed in 2007, alleged that JPMorgan Chase and lending units of Bear Stearns misled consumers by failing to tell them that their loan’s principal would increase if they made the minimum monthly payment.

Lawyers Blog The class action was filed in 2007, and J.P. Morgan acquired the loans when it took over EMC Mortgage Corp., a lending unit of Bear Stearns in 2008 during the financial meltdown.

It also agreed to pay $10 million to settle a lawsuit over similar loans it acquired when it took over Washington Mutual and $2 million to settle a smaller number of loans it acquired from Lending 1st.



In order to stop this wrongful torrent, someone has to be willing to file an action challenging the constitutionality of the “special” foreclosure procedures as applied, using the equal protection principles recognized in the law. 

Jeff Barnes, Esq. The “bank lobby” has had its effect on certain state governments, which have caused the enactment of the “special” procedures for the sole purpose of making it easier for the “banks” and servicers to line their pockets with money and real property by causing the courts to deny homeowners the same rights as other civil litigants, which is illegal -- as is “robo-signing”, backdating Assignments, forging notary information, and creating fabricated promissory notes through “Photoshop”, etc.


Chavez argues that she alleged a valid claim for breach of the Modification Agreement and she was not required to allege tender. We agree.

Chavez v. IndyMac

Although Chavez has not alleged that Defendants were unjustly enriched, discovery may show unjust enrichment

CALIFORNIA COURT OF APPEAL, FOURTH APPELLATE DISTRICT We conclude the homeowner sufficiently alleged equitable estoppel to preclude the lender's reliance on the statute of frauds defense. We also conclude that the homeowner sufficiently alleged a cause of action for wrongful foreclosure.

Chavez properly alleged a cause of action for breach of the Modification Agreement. Under the terms of the Modification Agreement, all late charges were waived and the modified principal balance included any past due amounts and arrearages.


Finally, JPMorgan Admits The Bank Broke The Law

In the years since the financial crisis, we may not have solved too big to fail, sent any bankers to jail, or done much to prevent another financial crisis, and we certainly haven't changed Wall Street's devotion to money-making at all costs.

But we at least have finally gotten a bank to admit it broke the law.

Huff Post In what amounts to a relatively stirring triumph of justice on Wall Street, the Securities and Exchange Commission has convinced JPMorgan Chase, the biggest U.S. bank by assets, to admit that it broke federal securities laws in its handling of the $6.2 billion "London Whale" trading debacle.

"We have accepted responsibility and acknowledged our mistakes from the start, and we have learned from them and worked to fix them," Jamie Dimon said in a separate statement.

The consensus at the appellate level is that the situation has gone too far

How The Stauffer Case Will Have an Impact on Arizona Foreclosures

The Stauffer case in Arizona is the first novel effort to thwart banks' wrongful foreclosure practices in Arizona, as it raises the issue of wrongful recordation of liens on the Arizona false claims statute.

In the Stauffer case, Karl Stauffer was keeping his mortgage current but after endless solicitations from banks offering help with his mortgage, he decided to pursue it. First, he had to default on his mortgage to receive the relief from a lender. He complied with everything and after several months went by, he noticed a trustee's sale, which did get postponed a few times but ultimately, he got word that the lender couldn't help him and the property was going to be sold. 

Stauffer v. First American Title

UPDATE in Stauffer:
US Bank Appeals to Arizona Supreme Court

Legal Broadcast Network It determined that normal documents filed in the foreclosure process by banks if false are indeed an assertion of interest or an encumbrance against real property. Secondly, that the homeowner has standing to sue for damages under the false claim statute. Lastly, it determined that homeowners have a right to bring a claim to quiet title against false recordations.

Banks have routinely moved cases from the Arizona court system to the federal court system, where they are getting a more receptive hearing, says Warnicke, especially initially. The banks have no financial interest in having made a loan or accountability for what it does, as they're in it for the fees, Warnicke says. They are also not attempting to negotiate any reasonable work out with the homeowners to reduce extremely high interest rates to market rates, which a lender would do if they really wanted a return on their loan. Instead, they are throwing homes into foreclosure, processing it, taking these huge fees and having it sold at a foreclosure sale, adds Warnicke.

Warnicke suspects the banks will file a petition with the Arizona Supreme Court, who doesn't have to take the case. However, the consensus at the appellate level is that the situation has gone too far.


Boston protestors speak out against no-fault eviction

While the fight to confirm Watt is in Washington, D.C., the fight to save foreclosed homeowners still rages in Boston. Earlier this month, City Life/Vida Urbana activists staged a blockade around the Roslindale home of Oliver Hendricks, a union ironworker who lost his job and fell behind on his monthly payments.

Bat State Banner According to Blanco, Hendricks eventually got back to work and tried unsuccessfully to work out a deal with his mortgage company, Fannie Mae, to prevent his eviction.

Hendricks made “a series of offers including paying rent, offering to buy back above the current market value or reinstating his previous home loan,” City Life stated in a release. “But Fannie Mae refused all solutions.”

Full post


Bay Area standoff over foreclosure eviction ends in shooting, arrest

A man has been arrested on suspicion of shooting a bank representative when he and two Contra Costa County sheriff's deputies tried to serve an eviction notice.
The $1.6 million home is in foreclosure. The suspect's name was not released.

AP Sheriff's spokesman Jimmy Lee said the man surrendered Wednesday after a four hour-long standoff in a gated community in San Ramon.

Deputies knocked on the suspect's door around 2 p.m. but no one answered. Lee said that when the bank representative jiggled the doorknob, a shot was fired through the door.

The victim suffered a gunshot wound in the leg.

JPMorgan Chase to Pay $920 Million in Fines Over Trading Loss

Federal prosecutors and the F.B.I. in Manhattan have since brought criminal charges against two of the traders

DealBook Extracting the fines and a rare admission of wrongdoing from JPMorgan Chase, the nation’s largest bank, regulators in Washington and London took aim at a pervasive breakdown in controls and leadership at the bank. The deal resolves investigations from four regulators: the Securities and Exchange Commission, the Office of the Comptroller of the Currency, the Federal Reserve and the Financial Conduct Authority in London.

But the bank has struggled to settle with another regulator, the Commodity Futures Trading Commission, which is investigating whether the bank’s trading manipulated the market for financial contracts known as derivatives.

Can Chapter 13 Still Strip 2nd Mortgages? Yes!

Bankruptcy Law Network You can use Chapter 13 to “strip off” a home equity or other 2nd mortgage on a home, if there is no value (equity) after the main mortgage debt is subtracted. Every significant court dealing with this has said so.

HSBC Whistleblower Speaks, Uncovered Terrorist Financing

We Are Change Luke Rudkowski interviews Everett Stern, a former employee of HSBC that uncovered and blew the whistle on the company knowingly financing criminals, terrorists and drug cartels

Bernie Sanders is Angry, Disgusted, Frustrated

and 99% of Americans should be too

YouTube Census Bureau reports the median income is less than it was 24 years ago.

People are worse off than they were 24 years ago despite being MORE productive.

HSBC still laundering money for terrorist groups 

In this video interview, former HSBC anti-money laundering compliance officer, Everett Stern, frankly describes the criminal methods used by HSBC to launder money for terrorist groups including Hamas and Hezbollah as well as for drug cartels and other criminals.

Ian Fraser Although HSBC paid a $1.9 billion penalty as part of a record-breaking money laundering settlement with the U.S. authorities in December 2012, Stern claims the London-headquartered bank is still laundering money with impunity and that the much vaunted “anti-money laundering compliance team” it put in place to assuage US regulators as part of last year’s settlement is “a sham”.

Threatening Letters Sent to 140 MF Global Vendors

DealBook These struggles were largely overshadowed by the stunning loss of customer money at MF Global — more than $1 billion belonging to farmers and other clients was missing — and a regulatory investigation into the firm’s chief executive, Jon S. Corzine, the former governor and United States senator from New Jersey.

Attorney General's Office sues mortgage services company

The suit names Making All Home Affordable, LLC (MAHA) and Diversified Home Solutions LLC

According to the complaint, Figueroa would obtain a payment from a MAHA client and record a fraudulent Deed of Trust against the client's property for a nonexistent debt that Figueroa claimed was owed to Diversified Home Solutions.

Consumers who believe they are victim of deceptive mortgage practices or any other type of consumer fraud are urged to file a complaint with the state Attorney General's Office.

KPHO The company is accused of misleading Spanish-speaking consumers into believing that the MAHA program would allow them to obtain principal and interest reductions on their home mortgages.

The lawsuit alleges that when consumers met with MAHA, they were informed of their eligibility, and qualified for reduced principal and interest rates despite having no knowledge of whether the consumer's lender would accept the reduction.

Consumers paid approximately $1,700 for the MAHA program but never received any reductions, according to Horne's office.

Case Fixing?

U.S. subpoenas records of five Phila. judges

Philly Two people said the FBI questioned them about what they called possible "fixing cases." A third said agents asked about "pay-to-play," the long-standing practice of campaign donors getting favors from public officials.

The subpoenas are the latest sign of the aggressive bent federal authorities have taken in recent years regarding Philadelphia judges.


The Armageddon Looting Machine: The Looming Mass Destruction from Derivatives

Ellen Brown JD Increased regulation and low interest rates have made lending to homeowners and small businesses less attractive than before 2008. The easy subprime scams of yesteryear are no more. The void is being filled by the shadow banking system. Shadow banking comes in many forms, but the big money today is in repos and derivatives. The notional (or hypothetical) value of the derivatives market has been estimated to be as high as $1.2 quadrillion, or twenty times the GDP of all the countries of the world combined.


Mortgage switch leads to confusion, foreclosure order

After GMAC (allegedly) sold Lisa Encarnacion's mortgage to Green Tree Servicing, things went wrong... because Green Tree is part of the same criminal enterprise.  

Chicago Tribune She was told that her last three mortgage payments were considered partial payments because Green Tree did not have proof that her townhouse was insured. Without proof of insurance, Green Tree began charging an additional $500 per month for a "force-placed policy," an insurance policy set up through Green Tree to make sure the property was protected.

An additional $500 per month!!!


Fannie and Freddie Aim for Mortgages with 'Zero Defects'

(Good Luck)

American Banker

Subscription required

Fannie Mae and Freddie Mac are about to get tougher on banks and other lenders that cut corners when originating mortgages and try to sell them to the government-sponsored enterprises. (Why now and not 20 years ago?)

Wayne Co. officials urge Treasurer to stem home foreclosure proceedings

Detroit News Wayne County commissioners passed a resolution Tuesday urging the Wayne County treasurer to stop foreclosure proceedings on owner-occupied homes and further work with homeowners behind in their property taxes.


Wells Fargo Bank v. Harrop

WISCONSIN COURT OF APPEALS Although we conclude that the circuit court order dismissing the action with prejudice  was valid, we are not persuaded that the appeal was wholly frivolous in light of its unusual 
procedural posture. 
IT IS ORDERED that the order dismissing the foreclosure action with prejudice is summarily affirmed. 

Replay of the 2011 Opinion in: 

Veal v. AHMSI, Wells Fargo

If, however, the maker pays someone other than a “person entitled to enforce” – even if that person physically possesses the note the maker signed – the payment generally has no effect on the obligations under the note. The maker still owes the money to the “person entitled to enforce.”

Extensive UCC discussion.

Wells Fargo (or AHMSI as Wells Fargo’s servicer) must be a “person entitled to enforce” the Note in order to qualify as a creditor (or creditor’s agent) entitled to file a proof of claim.
Otherwise, the estate may pay funds to a stranger to the case; indeed, the primary purpose of the real party in interest
doctrine is to ensure that such mistaken payments do not occur.

The bankruptcy court’s order granting Wells Fargo’s relief from stay motion is REVERSED, and the order overruling the Veals’ claim objection is VACATED.

9/17/13 Too Big Has Failed 5 years after the financial crisis of 2008, Wall Street is still involved in many of the same destructive activities that they were involved with before the crash. What's more, they still have the explicit backing of government officials in Washington D.C.

Here are a few simple solutions each citizen can take to help remedy this problem: 

Another blow to MERS in Washington State



Bryl Law We affirm the dismissal of the quiet title claim. We reverse the remainder of the trial court's order granting OneWest and MERS's CR 12(b)(6) motion to dismiss. We also reverse the order validating the trustee's sale. We remand for further proceedings.

Making Money Off the Poor

Payday loans, the report concludes, “create a debt treadmill that makes struggling families worse off than they were before they received a payday loan.”

NY Times In a state with a $15 [fee] per $100 [loan] rate, an operator … will need a new customer to take out 4 to 5 loans before that customer becomes profitable. Indeed, Dan Feehan, C.E.O. of Cash America, remarked at a Jeffries Financial Services Conference in 2007, “[T]he theory in the business is [that] you’ve got to get that customer in, work to turn him into a repetitive customer, long-term customer, because that’s really where the profitability is.” Lender marketing materials offer incentives to promote frequent loan usage, such as discounts to promote repeat borrowing.

Glaski decision appears to place lenders on notice to verify accuracy and effectiveness of loan assignments

Takeaway for Lenders

Although Glaski is a residential case that was decided at the demurrer stage, it is likely to be used by borrowers in "chain of title" challenges, and it may have opened the door to arguments that the pooling and servicing agreement has a place in a two-party dispute between a borrower and lender.

Duane Morris LLP The Court of Appeal consistently found that the mistake in failing to transfer the loan in question into the Securitized Trust could render the foreclosure void and, in any event, could form the basis for other types of relief such as damages. 160 Cal. Reptr. 3d at 466. As such, the complaint stated a claim for wrongful foreclosure, quiet title, declaratory relief, cancellation of instruments and unfair business practices. The Court of Appeal directed the lower court to vacate the order sustaining the demurrer and to enter a new order overruling the demurrer as to these causes of action.

Ex-JPMorgan Traders Indicted Over 'London Whale' Scandal

Huff Post Javier Martin-Artajo and Julien Grout were accused of hiding hundreds of millions of dollars of losses within JPMorgan's chief investment office in London by marking positions in a credit derivatives portfolio at inflated prices.

25 Fast Facts About The Federal Reserve – Please Share With Everyone You Know

#1 The greatest period of economic growth in U.S. history was when there was no central bank.

Economic Collapse #10 According to an official government report, the Federal Reserve made 16.1 trillion dollars in secret loans to the big banks during the last financial crisis. The following is a list of loan recipients that was taken directly from page 131 of the report…


Most Mortgage Closings Were Sham Closings


If the Judiciary wants to see this bulge of foreclosure cases go away, then enforce the mortgages the same you did when there was no securitization. They will vanish in a flash.

Living Lies Now the Banks are saying that just because they had their own reasons not to write the right parties and terms on the loan in violation of their duties to the investors, that the Bank is entitled to foreclose! AND if you look closely you see all the succession language and powers of attorney, endorsements, and mergers, all of which lack consideration for any transfer of any loan because the loan was funded from the beginning by the investors who were forced out of the room.
In Court when the judge enters a final judgment of foreclosure or allows the sale to proceed the Judge is unintentionally stripping the investors of their security rights and stripping the investors of any claim for payment against the borrower — which was the ONLY reason they advanced money in the first place. This in turn gives the borrower nobody to talk to to find out the real balance of the account receivable, or to address issues of modification.




This white paper is written for mortgage servicers that manage the lien release process as a final step in processing mortgage loan payoffs. This report 
covers best practices for managing third party service providers for the processing of lien release documents, with attention to new OCC, CFPB and 
National Mortgage Settlement requirements.

Joe Stiglitz: The People Who Break the Rules Have Raked in Huge Profits and Wealth and It's Sickening Our Politics

It’s been clear to me that our economy has been sick for a long time. One of the reasons it's been so sick is inequality.

95% of the gains from 2009 to 2012 went to the upper 1%. The rest — the 99% — never really recovered.

Economist Joe Stiglitz We have empty homes and homeless people. We have rich banks that are not lending to our small businesses, but are instead using their wealth and ingenuity to manipulate markets, and exploit working people with predatory lending.

If we have regulators or a Fed chief who protect the bankers’ jobs and bonuses rather than jobs and rights for all Americans, we won’t achieve it.

Rather than a people’s government, we are becoming a government of the 1%.

Rather than justice for all, we are evolving into a system of justice for those who can afford it.


After a Financial Flood, Pipes Are Still Broken

This is a $4.6 trillion arena operating on trust, which can disappear in an instant.

Gretchen Morgenson

NY Times

For all the new regulations governing derivatives, mortgages and bank holding companies, a crucial vulnerability remains. It’s found in our vast and opaque securities financing system, known as the repurchase obligation or repo market. Now $4.6 trillion in size, it is where almost every financial crisis since the 1980s has begun. Little has been done, however, to reduce its risks.

Pro Se

No Proof - No Judgment

Wright-Patt Credit Union v. Byington

On consideration whereof, the court finds that substantial justice has not 
been done the parties complaining and the judgment of the Erie County Court of Common Pleas is reversed

Because appellee failed to present the court with evidentiary quality material in support of its assertion that it was the current holder of the note and mortgage at issue, a genuine issue of material fact remains regarding whether appellee 
has standing in this foreclosure action and the lower court erred in granting appellee summary judgment.

New York investigating consulting firms Promontory and PwC in laundering cases

Washington Post Troubles came to a head last fall when reports surfaced that Pricewaterhouse Coopers, Promontory and other firms were paid nearly $2 billion by banks to examine shoddy mortgage files. The banks were supposed to pay out millions of dollars to borrowers for flawed foreclosure practices. In spite of the consultants’ hefty payday, not a single penny of relief reached the homeowners.

ResCap Judge Approves Bankruptcy Deal With Bond-Insurer FGIC

Bloomberg The judge overseeing Residential Capital LLC’s bankruptcy approved a settlement under which Financial Guaranty Insurance Co. will pay $253.3 million to investors and collect about $206.5 million from the failed mortgage company and its affiliates.

The deal would end FGIC’s attempt to collect as much as $5.5 billion the bond insurer claimed it was owed by ResCap and two related entities.


Deceptive Practices in Foreclosures

In early 2012 when five big banks settled with state and federal officials over widespread foreclosure abuses, flagrant violations — including the seizure of homes without due process — were supposed to end.

Illinois v. SAFEGUARD Properties

NY Times


The Illinois suit accuses the largest company in the industry, Safeguard, of breaking into homes despite evidence of occupancy, damaging and removing personal property, changing locks, cutting off utilities, and bullying occupants into leaving their homes when they have the legal right to stay. In several other states, private lawsuits and complaints to legal aid lawyers have alleged similar abuses.

Study: Nevada repeats as No. 2 for mortgage fraud

“As long as we’re No. 1 in foreclosures and the economy is slower to bounce back, were going to be No. 1 for fraud,” Smith said.

RJ It’s been tougher to stamp out distressed-homeowner fraud, which LexisNexis said has supplanted origination fraud as the industry’s biggest problem. Distressed-homeowner fraud involves scammers who call or mail homeowners in default, take cash upfront to help modify a mortgage and skip out with the money before they ever contact the bank on the owner’s behalf.

That type of misrepresentation is especially devastating to the housing economy because “a family that might have been able to work something out with the bank has no chance now,” Smith said. “They’ve passed much farther down the road into foreclosure.”

Remembering the families at the center of the financial crisis

The plight of the Americans that were hurt most has been largely forgotten in the power politics that have overcome financial reform.

Sheila Bair   In researching a new book I am writing for young adults about the 2008 financial crisis, I have been uncomfortably reminded of the hardship so many families encountered because of the crisis, particularly their kids.



Phoenix Light v. Goldman Sachs

A former First Franklin underwriter, from 2005 to 2007, stated that some of the lending practices at First Franklin were “‘basically criminal,’” and that the company required underwriters to depart from First Franklin’s stated
underwriting guidelines in order to keep their jobs.


Robbins Geller

Defendants used these Offering Documents to defraud plaintiffs and their assignors into purchasing supposedly “investment grade” certificates at falsely inflated prices. Plaintiffs’ certificates are now all rated at junk status or
below, and are essentially worthless investments, while defendants, on the other hand, have profited handsomely – both from their roles in structuring, marketing and selling the certificates, and from their massive “short” bets against the certificates they, themselves, sold to plaintiffs.



Phoenix Light v.Credit Suisse

Investors are only now becoming aware that, while they thought they were purchasing “mortgaged-backed” securities, in fact they were purchasing non-mortgage-backed securities

Robbins Geller “‘Originators were making loans based on quantity rather than quality. . . . They made loans even when they didn’t make sense from an underwriting standpoint.’” The news article further stated: “Mark Duda, a research affiliate at Harvard University’s Joint Center for Housing
Studies, said that because brokers were so intent to quickly sell off loans to investors, they had little incentive to make sure the loans were suitable for borrowers. ‘They were setting people up to fail,’ Duda said.” A news article in the San Diego Union-Tribune on November 16, 2008 echoed these sentiments, stating: “Bankruptcy specialists say part of what led to the housing market collapse was systemic.
Full post

Just Because Bloomberg or ABSNet Shows The Loan In A Trust, Doesn’t Prove The Loan Has Indeed Been Securitized.

There is a common presumption that I often hear and need to explain to clients / attorneys, which is…..”the loan was obviously securitized because it shows up in (Bloomberg / ABSNet.”) The fact is, this evidence doesn’t really prove anything. 

BPIA It’s actually hearsay if anything at all. The data that appears in either Bloomberg or ABSNet is the internal accounting provided by the servicers / master servicers to the trust investors. BUT…are the loans really there or are they just a mirage? The proof that the loans were indeed “securitized” into the trusts requires the proper documentation (assignments / endorsements / Trustee and/or Custodian Receipts, etc.) per the trust agreements (PSA’s.) The only thing the Bloomberg or ABSNet data possibly proves is “intent” to have securitized the loan(s.)

20 YEARS - and this SCAM is still operating with no arrests.

Foreclosure nightmare: Family's home sold, but it wasn't for sale

What would you do if you suddenly found out your mortgage company had sold your house right out from under you even though you always paid on time?

ABC Local The Sinclairs say they've always paid their mortgage on time, in full, and they have the documentation to prove it. But then, in June, after their first payment to Nationstar, the mortgage company sent a check back to them for the full amount.

The Sinclairs say although they hadn't received notice prior to that day, the person at the door told them they had two weeks to leave their house because a company called Sage Equities had bought it in foreclosure. They were expected to pay rent in the meantime.


Wells Fargo Said to Be Selling Mortgage Servicing Rights

Bloomberg Wells Fargo is selling mortgage- servicing rights on $41 billion of loans. The rights are for government-backed home loans. The contracts relate to borrowers Wells Fargo identifies as “non-core” because they have few other products from the bank, the other person said.


Hank Paulson: This Is What It Was Like to Face the Financial Crisis

BusinessWeek People weren’t taking Dick Fuld’s calls the weekend before Sept. 15, because Dick had been in denial for a long time. As the CEO of Lehman Brothers, he had asked the New York Fed and the Treasury weeks earlier to put capital into a pool of nonperforming illiquid mortgages that he wanted to put in a subsidiary he called SpinCo and spin off. We had explained that we had no authority to do that. He thought somehow there was something the government could do to help. How could it be that no one would want to buy his company? He just couldn’t believe it.

Consultants to Banking Industry Come Under Scrutiny

They are known as Wall Street’s shadow regulators. And after years of guiding banks through problems like money laundering and foreclosure abuses, their influence has soared.

DealBook The two firms that received the subpoenas in recent months — Promontory Financial Group and PricewaterhouseCoopers — are among the industry’s biggest names.

The examination of the consultants stems from a concern that the industry’s business model is rife with conflicts of interest. While consultants are supposed to provide an objective assessment of a bank’s problems, they are also handpicked and paid by those same banks.


Regulators Warn Banks Not to Flout $25 Billion Foreclosure Deal

Bank of Americais in compliance with all standards related to dual-tracking,” spokesman Rick Simon said in an e-mailed statement.  REALLY? Read Shinaba below...

Bloomberg The Consumer Financial Protection Bureau and the court-appointed monitor of the 2012 foreclosure settlement are among those moving to tighten oversight of the process known as dual-tracking, when borrowers facing the loss of their homes are simultaneously negotiating changes in their loans. Mortgage servicers who violate the rules or the terms of the deal could face sanctions including fines of $1 million per infraction.


Court finds Bank of America's dilatory, and dishonest, conduct troubling.

U.S. Bank, N.A. v Shinaba

ORDERED that the plaintiff and BOA are directed to re-open Shinaba's file and consider her for a HAMP modification taking into consideration their delay in reaching a decision; and it is further 

ORDERED that plaintiff is barred from collecting any interest incurred from October 22, 2010, to the date that this order is entered; and it is further 

ORDERED that unpaid late fees, if any, from October 22, 2010 until the date that this order is entered are forfeited by the plaintiff.

Supreme Court, Bronx County, NY In this particular case, the plaintiff and BOA's dilatory, and dishonest, conduct is troubling. Shinaba has alleged facts that describe conduct that is not only a violation of HAMP, but is independently unjust. As noted, Shinaba applied for relief under HAMP in 2009, but she was never properly evaluated for that relief even after two years. To be clear, Shinaba was asked to attend 17 settlement conferences, submit multiple applications for HAMP review, timely comply with every request for financial information, and successfully complete two trial periods. Yet as evidenced by the record, BOA, for the most part,
ignored her application and failed to make an accurate NPV calculation as to her HAMP eligibility. More importantly, despite unambiguous rules designed to protect the integrity of
the loan modification process, they egregiously failed to comply with the rules regarding timely review and notice.

And another HAMP FAIL...

Deutsche Bank Natl. Trust Co. v Izraelov

After more than 20 appearances in the Foreclosure Settlement Conference Part from April 15, 2010 to March 21, 2013, on that latter date Special Referee issued a Directive with attached report, referring the matter to this Court "for a bad faith hearing."

"Pay to the order of, without recourse _________." Such an indorsement
appears ineffective to negotiate the instrument
... [i]t is at best unclear
who is entitled to enforce the Note and Mortgage.

Supreme Court, Kings County, NY In short, Plaintiff's refusal to proceed in itself violated its obligation to negotiate in good faith pursuant to CPLR 3408(f). This conclusion obviates the more difficult question of whether a plaintiff can be found to have failed to negotiate in good faith upon plaintiff's refusal to proceed after the "investor" has turned back the plaintiff's good faith efforts to avoid any prohibition or restriction. That question would better be resolved only upon participation of all those who would be affected by the answer.

It is amazing how these courts put up with this game and the toll it must be taking on the homeowner while wasting the resources of the Court.


And another HAMP FAIL...  - with Sanctions

U.S. Bank N.A. v Thomas

Despite the directive, ASC/Wells appeared at the October 26, 2010 by Carol Orozco, who admitted that she lacked personal knowledge of the loan and the long history of the HAMP review. Moreover, the referee noted in her report that ASC/Wells failed to complete its HAMP review in accordance with its representations at the prior conference.

Supreme Court, Kings County, NY The Foreclosing Parties have prolonged and ultimately frustrated the workout process, inflated Defendant's original loan, caused the defense to attend successive conferences during which Servicer ASC/Wells and the Baum Law Firm conducted a protracted modification review, and wasted significant judicial resources. Because the Foreclosing Parties come to this Court of equity with unclean hands, having failed to negotiate an affordable loan modification in good faith, or to comply with HAMP guidelines and this Referee's directives, appropriate sanctions are recommended."


Mortgage Fraud Whistle-Blower Lynn Szymoniak Exposed Robosigning's Sins

I couldn’t believe people were losing their homes to these documents,” Szymoniak says. “I was certain that once it was exposed, it would be dealt with in a swift manner, with criminal charges.”

BusinessWeek The activists pieced together how, in the rush to feed Wall Street’s demand for mortgage securities, banks frequently failed to properly document the transfer of loans between various entities. To catch up, the banks later hired third-party contractors to spit out the documents the banks needed to foreclose.

This July a judge unsealed another whistle-blower suit brought by Szymoniak. She alleges that because banks were sloppy when they first created mortgage securities, they later had to spend extra money to try to clean up the paperwork—billions in expenses they passed on to the government, state pension funds, and other investors.


SEC Enforcement Actions Addressing Misconduct That Led to or Arose From the Financial Crisis

SEC n  Concealed from investors risks, terms, and improper pricing in CDOs and other complex structured products.

n Made misleading disclosures to investors about mortgage-related risks and exposure

n Concealed the extent of risky mortgage-related and other investments
in mutual funds and other financial products.


Bill Black: SEC Flacks Paint Lehman’s Looters as the Victims of a “Political” SEC

The idea that the SEC deemed Lehman’s Repo 105 transaction (which allowed it to hide $50 billion of liabilities, when its total balance sheet was $660 billion) to be not material is such a preposterous notion that, if anything, Black’s treatment is restrained.

Prof. Bill Black Let me be clear that the ultimate responsibility for the SEC fiasco lies with Schapiro. She was appointed to head the SEC by Obama for his traditional reason – she was an abject failure as the leader of securities industry’s self-regulatory body that took no effective action against the epidemics of accounting control fraud that devastated that industry and our Nation. Ultimately, Schapiro deferred to “Canellos’s team, which was closest to the evidence” rather than appoint a competent team and team leader to investigate Lehman’s looters.

The Import & Impact of Glaski v. Bank of America

Now binding on all California trial courts, the opinion has attracted much attention and praise in the foreclosure defense world. This article summarizes the court’s major findings, places the decision into the current legal landscape, and analyzes both its potential impact and its limitations.

California Homeowner Bill of Rights The Glaski court also had to reckon with Nguyen v. Calhoun, 105 Cal. App. 4th 428 (2003), which held that anything outside of the foreclosure sale process cannot be used to challenge a presumably valid and complete sale.[18] Specifically, the court had to consider whether an “ineffective transfer to the WaMu Securitized Trust” was an aspect of the foreclosure sale, or if it fell outside of that sale and was therefore irrelevant.[19] Because the transfer to the trust was fundamental to Bank of America’s authority to foreclose, and would void the sale itself, the court decided that the trust transfer was part of the foreclosure sale and a valid basis for challenging the foreclosure.

Full post

Arizona Court Grants Summary Judgment in Favor of MERS in Show Me the Note Claim

The Arizona court had to consider arguments based on the theory of ‘show me the note.’ Sparlin had appealed the lower court decision to grant summary judgment to MERS. Upon reconsideration, the court affirmed the lower court decision and granted summary judgment.

Sparlin v. BAC  (5/11)

REFinBlog In arguing their ‘show me the note’ claim, the borrowers alleged that MERS was required to actually prove that it was in possession of the original promissory note in order to execute a substitution of trustee appointing Recon-Trust as the substitute trustee and executing an assignment to BAC Home Loans Servicing. These were the documents that allowed the trustee to initiate foreclosure.

The court, in affirming the lower court’s dismissal, found that MERS, as the beneficiary on the deed of trust, had the right to enforce the security instrument. Additionally, the court found that under Arizona law, it was not required of MERS to be the note holder.


Foreclosure Defense Nationwide An audit obtained by the homeowner was performed by a former Director of Loan Administration for Encore Credit Corporation and New Century Mortgage. The auditor conducted an exhaustive investigation and concluded that the MERS assignment was “a valueless and faulty attempt by MERS to assign the mortgage to USBank as Trustee” in part because the claimed assignment was in excess of four years after the Closing Date of the Trust.

This conclusion is bolstered by the recent Glaski case from the California Fifth Appellate District. Pennsylvania does not currently have any appellate law on the alleged authority of MERS to assign a Note to which it was not a party to a securitized mortgage loan trust, or any authority of MERS to assign a loan which is in default to a trust. As such, the Pennsylvania court may, as in most states, look to the law of other jurisdictions which have dealt with the issues for guidance.

Judge: No attorney-client privilege in foreclosure investigation

Denver Post Vaden and his Vaden Law Firm, must turn over the agreement to Suthers’ crew as part of the AG’s investigation into billing practices of foreclosure attorneys. Bronfin reviewed the agreement in camera and said it was akin to a “boiler-plate claims-handling-procedure-manual.” But did agree it was subject to trade-secret protection for Bank of America.

Vaden has until Friday the 13th (hmmm?) to hand it over to Suthers’ office

Exclusive Interview with World Bank Whistleblower Karen Hudes: "The World Will Reject Central Bankers"

ZeroHedge As I’ve told people for nearly a decade now about the necessity of trading in paper currency for the real money of physical gold and physical silver, Ms. Hudes echoes my sentiments about massive global banking criminality and fraud when she states, “Don’t take us for our word. Look at the proof we are going to give you.” 

The jerks got away with it! 5 years after economic collapse, they’re still smiling

Five years ago this week, titans of finance wrecked the American economy. Here's why they're still happy as ever.

The five biggest U.S. banks are now 30 percent bigger than they were at the height of the crisis, nursed back to health by the government. Anyone who tells you TARP worked is looking at a tiny fraction of multi-trillion-dollar government support. And TARP didn’t translate support for the banks into the regular economy. Banks used the TARP program for foreclosure mitigation as a predatory lending system to trap borrowers. Lending for businesses did not increase.

David Dayen When the Real Housewives of New Jersey forge an application to get a mortgage, the Justice Department arrests them; when every mortgage broker in America does it, they get a pass.

Banks, hedge funds and investors borrowed more and more to finance these new products and even make bets on top of bets, buying anything that could yield a higher return. This is called “leverage,” and it got out of control before the crisis; banks were borrowing up to $40 for every dollar they held in assets.

Worst of all, despite a crisis built on fraud, nobody who perpetrated that fraud saw the inside of a jail cell, removing any meaningful deterrent for financial crimes. Most of those criminals walked away with enough money to fund their lavish lifestyles forever. The Justice Department recently had to admit that they inflated their own statistics on financial fraud prosecutions, and they disgracefully tried to re-insert the revised stats into old speeches to cover their tracks. I guess fraud is contagious.


New York Regulator Sees Abuse Increasing Under New Insurance Rules

DealBook Several big life insurers are going to have to set aside a total of at least $4 billion because New York regulators believe they have been manipulating new rules meant to make sure they have adequate reserves to pay out claims.

The development stems from contentions by insurance companies that states’ regulations are forcing them to hold too much money in reserve. Many of them have engaged in secretive transactions to artificially bolster their balance sheets, often through shell companies in other states or countries. 

OneWest Bank pays 7 figures in mortgage fraud case



Rigali v. OneWest Bank

Given that this motion is based, in part, upon the asserted absence of direct proof showing Defendants' intentions, it was a chancy proposition to begin with.

CalCoast News A San Luis Obispo County couple has received a million-dollar-plus settlement and title to two houses in a case that is likely to result in more lawsuits by people who lost property to mortgage lenders after the bursting of the housing bubble.

The Court of Appeal has held that intent and motive are not determinable on paper and are "rarely appropriate" for disposition on summary judgment. Nevertheless, to do justice to this
motion, the Court and its research attorneys have studied the thicket of eight separate issues and 160 alleged undisputed facts, conducted significant legal research, evaluated extensive
evidentiary objections, and issued a comprehensive ruling.
Although Defendants have the right under the existing rules to bring such a motion, it again brings to mind the need for significant amendments to the existing summary judgment procedures, and it begs the question whether the current procedures provide for a wise or reasonable expenditure of litigant and/or judicial resources.


Five Reasons Not to File Bankruptcy

Bankruptcy Law Network Filing a bankruptcy with a good bankruptcy attorney will reduce your stress and anxiety and increase family harmony. Think how wonderful it will be to come home to find no new bills or collection letters in the mail, no more nightly phone calls from debt collectors, and no worries about keeping the house.


'Faster foreclosures' law unintentionally slows Florida filings

The controversial Florida law intended to whisk foreclosures through court has instead led thousands to pile up, prolonging the agony of the state's housing crisis

Tampa Bay Times Attorneys say the law, which was supported by banks and became the state's most prominent foreclosure shift since the housing crisis, has fallen victim to unintended consequences.

The law demands banks prove they own the mortgages and have the right to foreclose in return for a quicker case. But defense lawyers say banks have struggled to abide by the strict new rules, including tracking the ownership of some of the millions of mortgages chopped up and shuffled around amid the financial meltdown.

Wall Street has so far crushed a drastic foreclosure fix.          One California town could change that.

The fate of the housing market, and the banks that profit from it, could come down to a single city council meeting in Richmond, Calif.

Washington Post Tonight, the foreclosure-stricken town will decide whether the city will forcibly take underwater mortgages away from the investors that own them to keep people in their homes.

Cities have the power to simply take over mortgages themselves, through the power of eminent domain — it’s a form of property, just like a house or a piece of prairie. So why not seize them, write down the principal to its fair market value, and keep families in their homes?

Illinois suit: Firm broke into occupied homes in foreclosure, removed belongings

Legal action is 1st to ask for civil penalties, seeks to have Safeguard barred from doing business in state.

Chicago Tribune "This has been going on since the foreclosure crisis began," Madigan said. "It's still going on today, and it's not going on just in the state of Illinois, but across the country."

"Despite these legal protections, Safeguard has ignored and severely curtailed the rights of occupants of at-risk properties, properties in foreclosure and (bank-owned) properties by illegally breaking into homes, removing occupants' personal property, locking out occupants, turning off utilities for legally occupied property, refusing to allow re-entry into these properties, and making coercive and deceptive representations to legal occupants," the lawsuit charges.

Free-sailing MERS/OneWest Run Aground in Washington State


MERS is not a proper beneficiary 

Washington State

Court of Appeals

Here, OneWest and MERS both conceded at oral argument in this appeal
that MERS never had possession of the promissory note that Bavand executed
in favor of IndyMac Bank in 2007. A legal consequence of this failure to establish possession of the promissory note is that MERS was never a "holder" of this instrument. Consequently, as the Bain court expressly held, MERS is not a proper beneficiary of this deed of trust securing Bavand's promissory note to IndyMac Bank because it is not a "holder" of the secured note. Accordingly, MERS also lacked any authority to appoint RTS as the successor trustee.




"no real interest in the subject property was transferred to MERS"


"I believe that the record does not support a finding that Everbank has standing as a holder of the mortgage to bring this action. MERS was merely designated as M/I Financial’s “nominee,” meaning that no real interest in the subject property was transferred to MERS. Accordingly, MERS had no holder interest in the property when it conveyed the mortgage to Everbank. As a result, Everbank, as MERS’s assignee, is likewise deprived of a holder interest in the subject property and cannot bring a foreclosure action as a holder of the mortgage."

You an bet the banking cartel is loving this.

Consumer agency threatens independence of bankruptcy office

Washington Examiner Serious allegations are being raised in the legal community that the Consumer Financial Protection Bureau has recruited the U.S. Trustee Program to collect bankruptcy data on its behalf to aid a controversial data-mining program.

Documents obtained by the Washington Examiner describe efforts by the CFPB to collect a decade's worth of private financial data on the consumer behavior of five million American citizens without their knowledge or consent. The CFPB data-mining campaign has alarmed privacy watchdogs.


Mortgage Fraud Report Reveals Mortgage Fraud Down Overall, However Some States Show Increased Levels of Potential Collusion Activity Over Past Three Years

LexisNexis LexisNexis® Risk Solutions today issued its 15th Annual Mortgage Fraud Report, spotlighting three economic indicators —mortgage fraud and misrepresentation activity involving industry professionals, potential collusion activity, and for the first time, new data showing the volume of properties in default —and their impact on the implosion of the U.S. housing market over the past five years. The LexisNexis Annual Mortgage Fraud Report examines the current composition of residential mortgage fraud and misrepresentation in the U.S. committed by industry professionals


The Embarrassing Double-Dipping Docket:

Bank Foreclosure Complaints Conceal that the PSA Trusts Pay Defaulted Mortgages

Foreclosure complaints routinely allege that because homeowners fail to pay their mortgage then the bank must take to home to recover its losses. However, the banks are never at a loss according to the Pooling and Servicing Agreement ("PSA") trusts terms.  Notably, banks never inform the courts of the PSA terms in their foreclosure complaints.

Susan Chana Lask, Esq. To establish a prima facia case in an action to foreclose a mortgage , the plaintiff bank must establish "the existence of the mortgage and mortgage note, ownership of the mortgage and note and the Defendant's default in payment."

The PSA is the insurance existing specifically to protect the banks from homeowner's default, which by its terms always pays any defaulting mortgage and other fees, including real estate taxes.  Logically, if the bank is paid then there is no default or damage to the bank.  How an a loan be in default if the servicer advanced every payment to cover any alleged default?

To EXPOSE the double dipping docket of baseless foreclosure complaints, ask the court to review an accounting from the plaintiff banks of who got paid what and from whom and how many times the bank got paid on the same mortgage from the PSA, servicers, investors of the MBS' and everywhere else they received payment from that loan.  The court may find that a bank is not the plaintiff, there is no case and some servicers and/or investors out there need to come forth.  "Will the real slim shady please stand up?"


Is the Mortgage Industry Obsolete?

National Mortgage News Globalization and demographic trends are likely to drive even more dramatic changes to the industry in the coming years, according to one controversial industry expert. And she thinks servicing executives should be the ones leading the charge to transform the industry going forward.

Elizabeth Warren's Powerful Speech: Supreme Court Is on the Path to Being a "Wholly Owned Subsidiary of Big Business"

The following is taken from a transcript of Sen. Elizabeth Warren's remarks to the AFL-CIO convention in Los Angeles on September 8.

AterNet When important decisions are made in Washington, too often, working families are ignored. From tax policy to retirement security, the voices of hard-working people get drowned out by powerful industries and well-financed front groups. Those with power fight to take care of themselves and to feed at the trough for themselves, even when it comes at the expense of working families getting a fair shot at a better future.




Zombie Properties: Banks Don’t Want the Money, Don’t Want the Property: They Just Want Foreclosure Sale and Deed

The borrowers are for the most part willing to straighten this mess out if approached with fair terms that reinstate their credit and reinstate or create loans that are free from the myriad of defects in the falsely claimed securitization chains. The intermediate banks don’t want that because they would be facing liability for trillions of dollars they collected through fraud, deceit and identity theft. 

  So if things keep going the way they are going, the ultimate effect is indeed going to be that the “free house” is going to switch from the intermediate banks who have no just or legal claim to the property - to the homeowner whose signature was used in ways he never agreed and would never have agreed.

With 6.6 foreclosures and an equal amount to come, given 2.5 residents per household, more than 33 million people will be displaced— paying the price for the misbehavior of the bank and having been used as innocent, ignorant pawns in a PONZI scheme that has nearly perfected the technique of PONZI schemes.

Sept. 2013


Goliath Versus Goliath in High-Stakes MBS Litigation

This commentary focuses on the state of this upstream litigation. It reviews claims of several complaints and discusses some decisions on motions for summary judgment in several of the cases.

Law Prof. David Reiss The loan-origination and mortgage securitization practices between 2000 and 2007 created the housing and mortgage backed securities bubble that precipitated the 2008 economic crisis and ensuing recession. 
The mess that the loan-origination and 
mortgage-securitization practices caused is now playing out in courts around the world.


Illinois Sues Banksters' Home Invasion Thugs

Safeguard Properties is being sued by the state of Illinois alleging that the company violated the Consumer Fraud Act by illegally dispossessed occupants from their homes without proper jurisdiction.

Invasive Tactic in Foreclosures Draws Scrutiny

“He told me an agent from Safeguard was emptying the contents of the place and changing the locks,” Ms. Haddad said.

Frantic, she contacted the Safeguard agent, who, she said, advised her “to straighten it out” with the bank, which had told Safeguard to cease work on the property. By the time she did, though, Ms. Haddad said Safeguard had done tens of thousands of dollars’ worth of damage to her property.

Banks have defended the firms, which the lenders say are carefully monitored.

DealBook On Monday, Illinois became the first state to take on the property management firms legally, contending in a lawsuit that Safeguard wrongfully dispossessed hundreds of homeowners in the state. In suing Safeguard, Lisa Madigan, the attorney general, contends that the company broke into homes despite stark evidence that homeowners still lived in them, bullied tenants into leaving even though they had no legal obligation to do so and, in some instances, damaged the very homes they were sent to protect, according to the suit.

This is a homeowner’s worst nightmare,” Ms. Madigan said in an interview on Friday, noting that her office had received more than 400 complaints about Safeguard.

In North Carolina, homeowners said that they had returned to find their houses padlocked and their personal property, including family photographs, destroyed. In Bedford Corners, N.Y., Susan Salzberg Rubin said Safeguard broke into her property multiple times and tampered with the alarm system. In Bethel Park, Pa., Alexandra Hlista said she was forced from her home after multiple break-ins.



Bank of America v. Kuchta

B. If a court lacks jurisdiction, then the judgment is void, and a void judgment is a nullity. 

Question Presented
This case comes before the Court on a certified conflict between the Ninth and Tenth Districts on this question: "When a defendant fails to appeal from a trial court's judgment in a foreclosure action, can a lack of standing be raised as part of a motion for relief from judgment?"

Ohio, like much of the nation, has experienced a foreclosure boom over the past decade.
Foreclosure filings more than quintupled between 1995 and 2009. Supreme Court of Ohio, 2009 Ohio Courts Statistical Summary, 53 (2010). By that time, it had become apparent that banks were sometimes suing and foreclosing on notes and mortgages they did not own. See, e.g., Wells Fargo Bank, NA. v. Byrd, 178 Ohio App.3d 285, 2008-0hio-4603, 897 N.E.2d 722, ~ 23 (lst Dist.). This Court addressed that abuse in Fed Home Loan Mtge. Corp. v. Schwartzwald, establishing unequivocally that standing is a constitutionally-mandated jurisdictional
requirement, that a plaintiff suing to foreclose without having an interest in the note or mortgage does not have standing, and that plaintiffs cannot cure that jurisdictional defect with post-filing
corrective measures.


Chase Settles Suit Alleging Kickbacks on Force-Placed Insurance

JPMorgan Chase has agreed to stop accepting commissions from the nation's top provider of force-placed insurance in an agreement that could loom large for other big banks alleged to have overbilled homeowners on insurance premiums.

The payments—equal to 12.5% of the insurance premium each affected homeowner was charged—could total as much as $300 million.   

JPMorgan in $300 mln settlement over force-placed insurance

National Mortgage News








Under a settlement filed Friday in U.S. District Court in Miami, Chase and insurance company Assurant would also make payments to up to 1.3 million mortgage holders nationwide who were allegedly overcharged during the last five years. The agreement would resolve a suit filed on behalf of homeowners that hold Chase mortgages.

JPMorgan Chase has agreed to stop accepting commissions from the nation's top provider of force-placed insurance in an agreement that could loom large for other big banks alleged to have overbilled homeowners on insurance premiums.

When the New York settlement was announced, Empire State officials stated that Chase had made approximately $600 million over the previous seven years by taking 75% of the profits from the business it sent to Assurant.


Altisource Unit to Acquire $922M Nonperforming Portfolio with clouded titles

Mortgage Servicing News It is currently doing due diligence on the portfolio and if everything goes well, Altisource will take possession in two separate closings, one in the current quarter and one in 4Q13.

D.C. Officials Outraged Over Post Report on Tax Liens, Foreclosures

“I'm outraged that this has happened and I'm going to take action immediately,” said D.C. Council Finance Chairman Jack Evans.

NBC Washington D.C. promises quick action to better protect vulnerable homeowners from losing their homes to tax liens and foreclosures amid a Washington Post series detailing how some elderly, infirm and financially stressed homeowners have lost their homes while owing only a few hundred dollars.

The months-long investigation shows that hundreds of homeowners lost their homes to tax lien sales to aggressive lawyers and real estate firms over the past eight years even when the taxes owed were a fragment of the house's worth.



This man owed $134 in property taxes. The District sold the lien to an investor who foreclosed on his $197,000 house and sold it. He and many other homeowners like him were...


The duplex in Northeast Washington that Coleman bought with cash two decades earlier was emptied and shuttered. By sundown, he had nowhere to go.

All because he didn’t pay a $134 property tax bill.

Washington Post HOMES FOR THE TAKING: 

Part 2 — As federal agents investigated a sweeping bid-rigging scheme at Maryland’s tax auctions, some of those same suspects were in the District, engaging in dozens of rounds of unusual bidding.
Part 3 (coming Thursday)— District tax officials have made hundreds of mistakes in recent years by declaring property owners delinquent even after they paid their taxes, forcing them to fight for their homes. The retired Marine sergeant lost his house on that summer day two years ago through a tax lien sale — an obscure program run by D.C. government that enlists private investors to help the city recover unpaid taxes.


Princeton woman sues mortgage servicer

A Princeton woman is suing over claims she was exploited by her mortgage servicer.

Jamie Lane filed a lawsuit on June 25 in the Circuit Court of Mercer County, against Nationstar Mortgage LLC, citing negligence, fraud, breach of contract, unlawful debt collection, equity abhors forfeiture and estoppel.

WV Record Lane says she first applied for a loan modification in July 2012 and Nationstar claimed that it would evaluate her application within 30 days, but did not. Thereafter, Lane contacted Nationstar on multiple occasions in order to attempt to get a loan modification, according to the complaint.

Lane alleges that Nationstar instructed her to stop making payments until her loan modification was reviewed, but instead they ultimately foreclosed on her home.

Nationstar also failed to engage in loss mitigation instead of foreclosure, made misrepresentations, breached terms within the deed of trust and engaged in unlawful debt collection, according to the complaint.

S&P’s Counterattack on the Government

DealBook The Justice Department lawsuit claims that S&P engaged in fraud when it gave high ratings to residential mortgage-backed securities and collateralized debt obligations issued before the financial crisis despite knowing that the housing market was deteriorating. The suit also accuses the company of favoring the interests of investment banks with higher than justified ratings so that it could continue to win business from those banks.


Foreclosure loophole irks lenders

With the high numbers of recent home foreclosures, combined with inexperience and ineptitude, banks have been in increasing conflict with homestead laws across the country.

Hernando Today "We're starting to see that a lot now with all the foreclosures, and a lot of these mistakes are coming out of the woodwork."

Under Florida homestead rights, if only one spouse signs a promissory note for a mortgage, and that signing spouse dies, the surviving husband or wife has life estate to the home, according to Hengesbach.


Why So Few Prosecutions 
Connected to the Financial Crisis?

New York Law Journal First, the financial instruments and 
transactions underlying the recent crisis 
are immensely complex and involve many individuals performing highly technical tasks with large volumes of data.  These circumstances present  substantial challenges to prosecutors not only in understanding the relevant facts, but also in explaining  the transactions to a jury. In fact, labor in many financial transactions is so divided among different individuals that any one 
individual’s guilt can be quite difficult to articulate, much less prove beyond a reasonable doubt.


Inside the End of the U.S. Bid to Punish Lehman Executives

The Securities and Exchange Commission’s eight-member Lehman Brothers team, having hit one dead end after another over the previous two years, concluded that suing the bank’s executives would be legally unjustified. The group, noting that prosecutors and F.B.I. agents had already walked away from a parallel criminal case, reached unanimous agreement to close its most prominent investigation stemming from the financial crisis.

Mary L. Schapiro, the S.E.C. chairwoman, disagreed. She pushed George S. Canellos, to explain how executives who presided over the biggest bankruptcy in United States history could escape without a single civil charge.

DealBook “I don’t get it,” she said during a tense exchange with Mr. Canellos.  “Why is there no case?” she continued, staring at Mr. Canellos, instructing him to continue investigating whether Lehman misled investors. “The world won’t understand.”

She was right. 

The S.E.C.’s decision came in stark contrast to a report by Lehman’s bankruptcy-court examiner, who accused executives of using an accounting gimmick to “manipulate” the balance sheet.

“There were many instances where the S.E.C. had information and didn’t act,” the examiner, Anton R. Valukas, a former federal prosecutor who is now chairman of Jenner & Block, said in an interview.


Barofsky, Watchdog to Government Bank Bailout Program, Joins Law Firm

Mr. Barofsky said that joining Jenner & Block was a natural next step because the firm specialized in helping government agencies and major corporations with in-depth investigations of problematic practices.

Gretchen Morgenson

NY Times

Such investigations, he said, are similar to the work he did at TARP. In addition, unlike many other large law firms, Jenner & Block represents clients bringing suits against large financial institutions.

“I can bring my experience investigating large financial institutions and complex financial transactions to a place that doesn’t just do defense work in this area,” Mr. Barofsky said. “This is an opportunity in private practice to help improve governance and have a truth-seeking role.”

To Recount the Financial Implosion, a Magazine Turns to Film

NY Times The film, which includes extensive interviews with Mr. Paulson’s wife, Wendy, will do little to satisfy Mr. Paulson’s critics, who believe that he propped up Wall Street at the expense of Main Street.


Dubious actors can’t operate without the help of their financiers. Investigators should follow the money.

Find the Loan Behind the Loans

Documents from a 2007 lawsuit show who was providing financing assistance to Cash Call in previous years. The institutions included Deutsche Bank Securities and a unit of Citigroup, known as the CIGPF 1 Corporation.

The funding arrangements used by Western Sky and Cash Call are reminiscent of what occurred in the recent mortgage mania. The most egregious predatory lending wasn’t done, for the most part, by big national banks. It was done by smaller subprime mortgage companies like New Century, NovaStar and Fremont General, which made thousands upon thousands of loans.

Gretchen Morgenson NY Times But these companies wouldn’t have been able to make even 100 loans had they not gotten the money they needed from the big Wall Street banks. The warehouse lines of credit provided by those banks, therefore, enabled the underwriting of billions of dollars in dubious mortgages. Without access to that money, most of the worst loans would not have been written. When Wall Street cut off the credit spigot, these companies folded almost overnight.

Another Wall Street-as-enabler example involved Bear Stearns, which financed boiler-room stockbrokers such as A. R. Baron, Stratton Oakmont and Sterling Foster in the 1990s. A case brought against Bear Stearns by the Securities and Exchange Commission and the Manhattan district attorney in 1996 said the bank helped A. R. Baron commit securities fraud by providing financing. Bear Stearns, which collapsed in the mortgage meltdown, settled the A. R. Baron suit without admitting or denying the accusations. It paid $38.5 million in fines and restitution.


Bank of America to Pay $39 Million in Gender Bias Case

The settlement comes on the heels of a big payout last week for a racial discrimination lawsuit.

DealBook The agreement, filed Friday evening in a federal court in Brooklyn, was the second by the nation’s largest bank over 10 days. Last week, Merrill Lynch told a federal judge in Chicago that it would pay $160 million to settle an eight-year-old racial discrimination suit filed on behalf of 700 black brokers.

With the new agreement, Merrill will have paid out nearly half a billion dollars to settle employee discrimination claims over the last 15 years.


How did pleading requirements evolve such that no loan need be alleged? Really? You can sue to collect on the note without pleading that the loan (i.e. actual advance of money from THAT lender) stated in the note actually happened? How did pleading evolve such that the foreclosing party does not have to plead and prove economic injury? Really? Hasn’t it been well settled for centuries that the court has no advisory role? Isn’t it true that no court has jurisdiction over a controversy in which neither party alleges injury or financial damage?

Living Lies The entire foreclosure season, extending over 7 years and expected to last another 7 years, was manufactured by lies, fraud upon the court by foreclosers. The Banks relied on the fact that the Bench would react by grouping all the foreclosure victims as deadbeats “You didn’t make the payments. What do you expect? A free house?”
Instead of taking each case and requiring compliance with standard rules of pleading and proof, the Courts allow deviant legal practices that have clogged the courts with hundreds of thousands of homeowners who correctly proclaimed they were being victimized but who were blocked by the Judge from obtaining discovery that would have proven their case


Gone are the pension funds! Yes, your Honor – yours has disappeared too.

These smart-asses didn’t take the time to ensure all the pieces to the puzzle fit before they began their filthy rich land grab operation, causing a lot of damage and red ink to America and the rest of the world. Their failures are your insurance to defeat foreclosure once you understand what is missing.

Every judge and foreclosure defense attorney should take special notice: MERSCORP, Inc. is not in the mortgages. Stop being lazy and using the “MERS” acronyms that continue to blur the identities of separate and distinct corporations.

Deadly Clear If the scheme hadn’t been so blatantly deceptive from its inception, lenders would have insisted on a paragraph that specifically stated that the loans would be electronically transferable.

You know why they didn’t? Because traditional mortgages were meant to be returned and burned when they had been paid off… and these “new” defective loan products were not traditional mortgages. These were contracts without mutual understanding, based on deception (and yes, fraud) that were materially altered into securities without authorization.

It’s time to realize there are no explicit agreements to electronically transfer mortgage loan documents (per UETA Sec. 16) as needed in the UCC Article 9 argument because MERSCORP, Inc. is not in the mortgage documents. And for goodness sake – don’t bring up piercing the corporate veil. They do us more good being separate and distinct rather than one in the same.


A Mortgage Market Out of Balance

Recently, interest rates on mortgages for expensive homes have fallen below those for smaller mortgages that the government promises to repay if the borrower defaults.

The fact that jumbos are now cheaper points to dysfunctions in the mortgage market

DealBook On the surface, these moves in rates make little sense. The jumbo mortgages do not have a taxpayer guarantee of repayment. Anyone holding such loans relies solely on the creditworthiness of the borrowers to be repaid. Most of the jumbo borrowers are wealthy and have good credit scores, so they are not that high a risk right now. Still, their credit probably isn’t as strong as that of the federal government, which guarantees the smaller loans. As a result, those loans, often called conforming mortgages, should have lower rates than those on jumbo mortgages. Indeed, as far back as industry participants can remember, that has been the case.


Spectacular News!

Jacqueline Barber Will Stay In Her Home

We must ask: If Jacqueline was dual-tracked and her mortgage documents were forged, why aren't those responsible in prison; and why is Jacqueline required to pay anything on a VOID or non-existent debt?

Housing Justice Foundation After an almost year long fight, we’re elated to announce that Jacqueline Barber has worked out a deal that will keep her and her family in their home for good! Jacqueline, a retired police detective who has been fighting a rare form of bone marrow cancer, was facing eviction when she first reached out to Occupy Our Homes Atlanta last October. Jacqueline was dual tracked and her mortgage documents were filled with forged signatures, and like millions of Americans she was now faced with losing her home. But after fighting for a year, Wall Street backed down and agreed to let Jacqueline and her family keep their home


Banks Won’t Take the Money: Insist on Foreclosure Even When Payment in Full is Tendered

This should and does alert judges that something is amiss and some of their basic assumptions are at least questionable.

Living Lies They don’t want the money, they don’t even want the house — what they desperately need is a foreclosure judgment because that caps the liability on that loan to repay insurers and CDS counterparties, the Federal Reserve and many other parties who paid in full over and over again for the bonds of the REMIC trust that claimed to have ownership of the loan.

To put it simply, if they didn’t pay for it, then it didn’t happen no matter what the instrument or endorsement says.


Lenders Watch Out for GSE Buyback Demands

National Mortgage News Financial institutions are on the lookout and preparing to fight new mortgage repurchase demands from the GSEs (government-sponsored enterprises) now reviewing files from as far back as 2002. (Is the statute of limitations not in play here?)

Life Without Fannie Mae and Freddie Mac

NY Times Fannie and Freddie have been much maligned since their heavy investment in risky loans resulted in a $188-billion taxpayer bailout during the financial crisis. Having since refocused on guaranteeing and securitizing prime mortgages, while also acting as a fill-in for fleeing private capital, the agencies now own or guarantee a majority of the country’s home loans.

Attorney Swings Back at Separation of Note and Mortgage

If the banks lose the application of the UCC, which they should, they are dead in the water because they have no way to prove the transactions upon which they rely in collection and foreclosure.

Plaintiff’s claims are barred in whole or in part because the subject note that the Plaintiff may produce is not a negotiable instrument and therefore the Plaintiff cannot claim enforcement of the note pursuant to Fla. Stat. §673, et seq.

Danielle Kelley, Esq. In order for an instrument to be negotiable it must not, amongst other things, “state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money.” §673.1041(1)(c). While there is no appellate case law in Florida (and precious little in the entire country) which has ever interpreted this portion of the statute to mortgage promissory notes, the Second District has interpreted this section with respect to retail installment sales contracts in GMAC v. Honest Air Conditioning & Heating, Inc., et al.

Court Dismisses HAMP Lawsuit Against Ocwen

Mortgage modification program does not create private right of action


Federal judge refuses to dismiss BofA HAMP case


Housing Wire The decision ultimately holds that borrowers are not third-party beneficiaries of the HAMP program. The private right allows for lawsuits to be brought to claim redress against the implied action. In this case, now denied, homeowners will have less success in suing HAMP providers when mortgage modifications go bad.

Earlier this month, the 9th Circuit ruled that some homeowners arguments against HAMP providers need to be considered in these lawsuits.

More empty Trusts

100% Failure Rate!

The Complaint in:

Phoenix Light v. JPM, EMC Mortgage & Bear Stearns

Excerpts: The need to fabricate or fraudulently alter mortgage assignment documentation provides compelling evidence that, in many cases, title to the mortgages backing the certificates plaintiffs purchased was never properly or timely transferred.

2012 article

Alina Plaintiffs reviewed the transfer history for 274 loans that were supposed to be timely transferred to this trust. Sixty-six (66) of the loans were not and have never been transferred to the trust. In addition, several other loans that were supposed to be transferred to the trust were transferred to entities other than the trust, but not to the trust. The remainder of the loans (approximately 140) were eventually transferred to the trust, but all such transfers occurred between 2008 and the present, well beyond the three-month time period required by the trust documents and far after the three-month period for the trust to maintain its tax-free REMIC status. In other words, none of the reviewed mortgage loans were timely transferred to the trust, a 100% failure rate.

Bank of America Suit Against Two Ex-Bear Stearns Executives Is Dismissed

DealBook A federal judge dismissed a lawsuit brought against Mr. Cioffi and Mr. Tannin by Bank of America. The bank accused the two men of lying about the health of their hedge funds, which had invested heavily in subprime mortgage-backed securities that plummeted in value when the housing market collapsed.

Jack Lew Shows His True Colors By Forcing Deregulation of Derivatives on the CFTC

“The banks are going to be fine,” said Sunil Hirani, chief executive officer of trueEX Group LLC, who helped pioneer electronic trading of derivatives. “They are going to make a ton of money.”

David Dayen What we got was the concept of “substitute compliance,” meaning that any overseas regulator deemed comparable to US rules would oversee derivatives trades made in their own countries. In actuality, that drives a stake through the heart of the regulation; the rule starts from the presumption that foreign rules are equivalent.



Complete post

Eighth Circuit extends recent TILA rescission holding

On August 19, the U.S. Court of Appeals for the Eighth Circuit held that borrowers facing foreclosure were required to file suit prior to the foreclosure sale to complete the exercise of their right to rescind under TILA. Hartman v. Smith, No. 12-1947, 2013 WL 4407058 (8th Cir. Aug. 19, 2013). In this case, the bank moved to foreclose after the borrowers failed to make payments to a real estate financing firm with which the borrowers had placed mortgages on the property.

Hartman v. Smith

BuckleySandler LLP After the property was sold at a sheriff’s sale, the borrowers sued the bank and the financing firm, seeking, among other things, to rescind the loans under TILA on the basis that they provided written notice of rescission prior to the foreclosure sale. Applying its recent holding in Keiran v. Home Capital, Inc., 720 F.3d 721 (8th Cir. Jul. 12, 2013) that a borrower seeking rescission under TILA must file suit within three years to preserve the borrower’s right of rescission, the court again held that providing notice under TILA is a necessary but not sufficient predicate to exercising the right to rescind. Here, where the foreclosure sale occurred within the three-year rescission period, the court held that the borrowers were required to file a rescission action in a court prior to the foreclosure sale. Because they failed to do so, the court held that their rescission claim was barred.

Mark your calendar for September 12th.

CFPB Director Slated to Testify Before House Oversight Panel

Consumer Financial Protection Bureau director Richard Cordray is scheduled to testify before the House Financial Services Committee on Sept. 12, where he will likely be treated as a hostile witness again despite his confirmation by the Senate.

Mortgage Servicing News Back in April, committee chairman Jeb Hensarling, R-Texas, barred Cordray from testifying before his committee, claiming his recess appointment by President Obama was unconstitutional.

However, many committee Republicans continue to view the CFPB as a rogue government agency because it is run by a single director as opposed to a commission or board. In addition, the bureau is funded via the Federal Reserve Board. Congress has no control over the CFPB’s budget.

Following Cordray’s Senate confirmation, Hensarling stressed that the Financial Services Committee needs to “continue its vigorous oversight” of the CFPB.


JPMorgan to pay $18.3 million to settle mortgage lawsuit

Filed in 2007, the lawsuit alleged that JPMorgan and units of Bear Stearns failed to make proper disclosures related to the resetting of introductory interest rates.

The lawsuit alleged the mortgage documents misleadingly failed to disclose that the loan's principal balance would increase if a borrower made the minimum monthly payment.

"All these cases are starting to resolve after six years of litigation," Berns said.

The case is Monaco et al v. The Bear Stearns Companies Inc, et al, U.S. District Court, Central California, No. 09-05438.

  The loans were acquired by EMC Mortgage Corp, the lending unit of Bear Stearns, which JPMorgan took over amid the U.S. economic meltdown in 2008.

Following several years of litigation, U.S. District Judge James Otero certified in September 2012 a class of people who from August 2003 to March 2013 had option adjustable rate mortgages purchased by EMC secured by property in California.

Lawyers for the plaintiffs are in the process of settling two other cases against JPMorgan involving option adjustable rate mortgages.

JPMorgan has agreed to pay $10 million in settle a similar lawsuit involving loans acquired by Washington Mutual, which JPMorgan acquired in 2008 following the lender's failure, court papers filed last month show.



Uneasy Intersections: The Right to Foreclose and the UCC

Historically, the practice of real property and foreclosure law was routine and noncontroversial. This legal landscape significantly altered during the spectacular growth of securitization deals involving trillions of dollars of residential mortgage loans. 

Elizabeth Renuart

Associate Professor Albany Law School

The National Conference of Commissioners on Uniform State Laws (NCCUSL) was a driving force behind one of these changes. It adopted amendments to Article 9 of the Uniform Commercial Code in 1998, at least in part, to facilitate securitization. These modifications included extending coverage to the sale of (not merely to a security interest in) promissory notes, declaring that the sale of the note also constitutes a sale of the mortgage without the need for a written assignment of the mortgage, and providing for automatic perfection of interests in both the note and the accompanying mortgage without the need to file.

S.&P. Calls Federal Fraud Suit Payback for Credit Downgrade

Standard & Poor’s on Tuesday denounced a $5 billion fraud lawsuit by the United States government as retaliation for its 2011 decision to strip the country of its AAA credit rating.

NY Times In a filing on Tuesday in Federal District Court in Santa Ana, Calif., S.& P. said that the lawsuit was an effort to punish it for exercising its First Amendment rights and that the suit seeks “excessive fines” in violation of the Eighth Amendment.

It said the government’s “impermissibly selective, punitive and meritless” lawsuit was brought “in retaliation for defendants’ exercise of their free-speech rights with respect to the creditworthiness of the United States of America.”


Babcock Exposes Federal Special Master's Conflict of Interest

“It appears that MERS runs the mortgage industry in Rhode Island” said Attorney Babcock. 

The exhibits that Attorney Babcock is talking about in the video. 

Babcock Law Attorney Babcock has recently discovered that Special Master Merrill Sherman, the Federal Special Master, appointed with the task of managing the In re: Federal Mortgage Foreclosure docket, has previously sat on, and currently sits on the board of 2 different banks that are MERS members. She likewise served as the Chief Executive Officer of a Bank that was at that time and is currently a MERS member. 

Order lifted, 825 RI foreclosure cases to proceed

U.S. District Judge Jack McConnell said he was reluctantly lifting his injunction because ‘‘his bosses’’ at the 1st Circuit Court of Appeals had ruled in June that he did not follow the proper procedures in his order, which affected all mortgage foreclosure cases in federal court in Rhode Island.

  McConnell wrote on Tuesday that he was bound by the 1st Circuit’s ruling, but still believes it would be best for homeowners and banks to find solutions without homeowners facing the threat of being evicted from their homes. He said he hoped financial institutions would continue to forego their right to foreclose and evict homeowners who are behind on their mortgage payments until after all other avenues are exhausted.



Naked short selling of American mortgages and the counterfeiting that resulted are responsible for the present threat to homeowner rights. Dematerialization (computer scanning of mortgage notes) and shredding of documents have stripped the banks of their security interest in the loans. All foreclosures need to end until the truth is told.


Counterfeit Fortunes for Criminal Fraudsters and the Wicked Switch of Wall Street

Petition Background
The DTCC allows and enables securities (the actual, paper documents) to become digitized to facilitate ease of trading; the process is called dematerialization.

Michael Keane "I personally destroyed thousands of mortgage documents through the same process using a desk-top scanner."

The banks have destroyed their ownership interest (security) in all the mortgages pre-dating the melt-down and beyond; the pink slip no longer exists.

The banks are involved in a systemic criminal theft-by-deception; they don't own the loans they are attempting to mine through foreclosure, refinance, modification, short-sale, deed-in-lieu and reverse mortgage; in each of these processes they are tricking borrowers into returning the signatures they destroyed, in some instances, decades ago.


Ever wonder why WAMU, Chase, EMC et al can't produce the original WAMU Notes? 



MICHIKO STEHRENBERGER Various individuals representing
JPMC, including JPMC phone reps, JPMC banking branch managers, and even a representative from JPMC's executive offices, had told me that all the missing Washington Mutual original paper loan documents, including the original paper Stehrenberger Promissory Note linked to the loan in dispute, had been “shredded,” and that JPMC did not actually have the original paper documents for any of the Washington Mutual loans.

JPMorgan Case Tests U.S. Law on Buying Influence Abroad

DealBook Reports that JPMorgan Chase hired scores of children of powerful government officials throughout Asia have put the bank squarely in the sights of the United States government for violating the Foreign Corrupt Practices Act. An investigation will test how broadly the law applies to almost commonplace conduct by firms seeking any small advantage over rivals to win business from foreign governments.


Federal Agent Misconduct in Favor of BofA and McCarthy Holthus and Levine law firm?

The agents involved — Mike Lum from Homeland Security, Tim Hines, FBI Agent, and Sean Locksa, FBI agent — were either moonlighting (the agents say they were acting in their official capacity) and using their badges inappropriately or they were sent to intimidate litigants with Bank of America represented by McCarthy Holthus and Levine. A few years back, I received reports that the law firm, and in particular attorney Levine, had sent letters to local prosecutors to request action against people who were defending their property from foreclosure

These agents were being used officially or unofficially to intimidate litigants who have been successful at defending their homes in foreclosure for years, and to intimidate them into ceasing their factual and investigative help to other homeowners who are also being wrongfully foreclosed.

Homeowner gets unexpected visit from Terrorism Task Force

Living Lies This is a story about abuse of power or abuse of apparent power. The object is to cover-up crimes that remain largely undetected because of the complex maze created by the “Thirteen Banks.”  The stakes could not be higher. 

Either the current major Banks will be sustained or they will come crashing down with a feeding frenzy on a carcass of a predator that stole tens of trillions of dollars from multiple countries, hundreds of millions of people, and millions of homes across the world that should, by all accounts under the Law, still belong to the owner who was displaced by foreclosure. The banks are willing to do anything and they are paying outsize fees and other legal expenses (topping $100 Billion now).

I now believe I have enough information to connect the dots, and raise the question as to whether members of local, federal and state law enforcement are colluding (or are being wrongfully used by the suggestion of false information) with Bank of America and at least one law firm — McCarthy Holthus and Levine in which litigants and perhaps witnesses are intimidated into submission to wrongful foreclosures.


NCUA Files New Suit Against Morgan Stanley

NCUA filed suit in Federal District Court in Kansas against Morgan Stanley & Co., Inc. and other firms, alleging violations of federal and state securities laws in the sale of more than $566 million in mortgage-backed securities to U.S. Central and WesCorp

  “Firms like Morgan Stanley sold securities that turned out to be faulty, triggering a crisis in the credit union industry that has been extremely expensive to contain and repair, and credit unions are still paying the tab,” said NCUA Board Chairman Debbie Matz in a statement. “All the credit unions we supervise and insure are sharing this burden. The people who are accountable, those who precipitated this crisis, should be required to shoulder that burden, as well.


Foreclosure Court: The Erosion of the Judiciary

Mark Stopa, Esq. In recent months, though, the judiciary in many parts of Florida (not all, but many) has turned into something I don’t recognize. The change has been so sudden and so extreme that it’s altering the face of the judiciary and hindering that which I hold so dear – the right to fair hearings and due process. Yes, what I consider the “core” of a fully-functioning judicial system is eroding.

Chasing JPMorgan Chase

NY Times Not too long ago, JPMorgan Chase and its chief executive, Jamie Dimon, were celebrated for navigating the 2008 financial crisis, which brought other big banks to their knees. Now this one-time darling of federal regulators, long thought to be the best managed of all the big banks, is in trouble or apparently headed there on multiple fronts. 


Family rescued from foreclosure, mortgage predators

Learning of his misfortune, businesses blew up his mailbox with promises of mortgage rescue — for a price.

"I had so many and some stuff sounded true, but there were scams," he said.

NWI Times Indiana Attorney General Greg Zoeller’s office received 692 consumer complaints about foreclosure rescue consultants since 2009. His office has pursed many of them, including two Florida-based foreclosure consultant companies sued in June on allegations they took more than $7,500 from Hoosier homeowners and did not provide services or refunds.


When foreclosed owners walk, 'zombie' homes become nuisance

The nuisance was created because there has been zero prosecutions of the criminals creating the 'zombie' homes.

News Press When the lawn grows too high, along with other signs of neglect, Curtis steps in. But with a zombie, neither party will take responsibility and the city is left to maintain and place liens on the property.

“I do a lot of documentation for the foreclosures,” Curtis said. “The whole foreclosure-mortgage situation is an absolute mess.”

The housing collapse that began several years ago left homeowners [believing they owed] banks much more than their houses were worth and they just walked away from properties in foreclosure, [and gave away their homes to the non-owning banks for free.]

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