Saturday, January 08, 2011
A lawsuit that debt collectors should be worried about
Written by Biloxi
A New York judge has individuals another method to sue debt collection company that debt collectors should worry about as this could spread nationwide. From an opinion in a consumer class action case, Federal Circuit Court Judge Denny Chin, allow plantiffs in that case to sue debt collectors as being a criminal enterprise under Racketeer Influenced Corrupt Organization (RICO) and allow claims under the Fair Debt Collection Practices Act. The key for an individual to sue debt collectors under RICO is to have concrete information on the debt collectors and their business models as in the case of Monique Sykes, plaintiff. Here is the story from Daily Finance:
Well, Monique Sykes and the other plaintiffs claim that the defendants’ business model is as follows:
• Buy debt with little documentation that the debt is accurate.
• File lawsuits claiming personal knowledge of the debt but using robo-signed affidavits instead.
• Deliberately fail to tell the “debtor” that the lawsuit is pending (a practice called "sewer service").
• Get a “default” judgment against the debtor when she fails to show up in court to defend herself.
• Enforce the judgment, including by freezing the debtor’s bank account.
And why should the debt collectors be nervous from Judge Chin's decision? It is because this would affect law firms, a process-serving company and a debt-buying company that use debt collectors. Let's not forget whistleblower Linda Almonte's lawsuit against JP Morgan Chase for illegal credit card practices. The former JP Morgan Chase employee filed a whistleblower lawsuit with SEC that alleged Chase's records on customers' debts were false and the executives at the company knew customers' records were false and routinely robo-signed debt-related documents. In Ms. Almonte's case, like Ms. Sykes' case with debt collectors, banks, too, better worry that they don't get sued as a criminal enterprise.
A New York judge has individuals another method to sue debt collection company that debt collectors should worry about as this could spread nationwide. From an opinion in a consumer class action case, Federal Circuit Court Judge Denny Chin, allow plantiffs in that case to sue debt collectors as being a criminal enterprise under Racketeer Influenced Corrupt Organization (RICO) and allow claims under the Fair Debt Collection Practices Act. The key for an individual to sue debt collectors under RICO is to have concrete information on the debt collectors and their business models as in the case of Monique Sykes, plaintiff. Here is the story from Daily Finance:
Well, Monique Sykes and the other plaintiffs claim that the defendants’ business model is as follows:
• Buy debt with little documentation that the debt is accurate.
• File lawsuits claiming personal knowledge of the debt but using robo-signed affidavits instead.
• Deliberately fail to tell the “debtor” that the lawsuit is pending (a practice called "sewer service").
• Get a “default” judgment against the debtor when she fails to show up in court to defend herself.
• Enforce the judgment, including by freezing the debtor’s bank account.
And why should the debt collectors be nervous from Judge Chin's decision? It is because this would affect law firms, a process-serving company and a debt-buying company that use debt collectors. Let's not forget whistleblower Linda Almonte's lawsuit against JP Morgan Chase for illegal credit card practices. The former JP Morgan Chase employee filed a whistleblower lawsuit with SEC that alleged Chase's records on customers' debts were false and the executives at the company knew customers' records were false and routinely robo-signed debt-related documents. In Ms. Almonte's case, like Ms. Sykes' case with debt collectors, banks, too, better worry that they don't get sued as a criminal enterprise.
US Trustee Sides With Borrowers in Foreclosures With Questionable Assignments, MERS
As we’ve suggested, a not-well-recognized effect of the widespread publicity on robo-siging abuses and more recently, the widespread failure of securitization industry participants to adhere to their own agreements is more pushback in the courts. It takes a while for new information to trickle into courtroom strategies, but as the abuses get more press, it isn’t just attorneys for borrowers that are taking a new stance, but also some judges and other official watchdogs.
An example today comes via the US trustee, which is a Department of Justice overseer of bankruptcy courts, in two cases in Albany, New York (hat tip April Charney). In both, the US trustee has filed responses which are effectively in support of the debtor (the bankrupt borrower) and in opposition to creditors, which in this case are servicers claiming to act on behalf of securitization trusts. The issue? The parties trying to foreclose haven’t presented a document trail that the bankruptcy trustee finds persuasive.
Both cases, one with GMAC, the other with BAC as the servicer, both involve a foreclosure mill, the Baum Law Firm, which had been sanctioned and fined for submitting pleadings with documentation defects. As the first pleading, the one with BAC as plaintiff, noted “The state court judge called the Baum Firm’s actions ‘reprehensible.’”
The underlying issue is pretty simple, a failure to prove standing.
Check out the rest here…
US Trustee Response to Debtor's Motion Objecting to BAC Home Loans Proof of Claim[1]
US Trustee Response in Support of Debtor's Objection to GMAC Proof of Claim[1]
An example today comes via the US trustee, which is a Department of Justice overseer of bankruptcy courts, in two cases in Albany, New York (hat tip April Charney). In both, the US trustee has filed responses which are effectively in support of the debtor (the bankrupt borrower) and in opposition to creditors, which in this case are servicers claiming to act on behalf of securitization trusts. The issue? The parties trying to foreclose haven’t presented a document trail that the bankruptcy trustee finds persuasive.
Both cases, one with GMAC, the other with BAC as the servicer, both involve a foreclosure mill, the Baum Law Firm, which had been sanctioned and fined for submitting pleadings with documentation defects. As the first pleading, the one with BAC as plaintiff, noted “The state court judge called the Baum Firm’s actions ‘reprehensible.’”
The underlying issue is pretty simple, a failure to prove standing.
Check out the rest here…
US Trustee Response to Debtor's Motion Objecting to BAC Home Loans Proof of Claim[1]
US Trustee Response in Support of Debtor's Objection to GMAC Proof of Claim[1]
Biloxi Buzz for Saturday
- Senator claims HUD help for unemployed has not reached homeowners
- Statement by the President on H.R. 6523 — Today I have signed into law H.R. 6523, the “Ike Skelton National Defense Authorization Act for Fiscal Year 2011.” The Act authorizes funding for the defense of the United States and its interests abroad, for military construction, and for national security-related energy programs.
- Rudy gearing up for DC run — Confident that he'd have a chance to win, Rudy Giuliani is rounding up his top political advisers for a possible 2012 presidential run, sources tell Page Six. — Sources say the tough-talking former mayor “thinks the Republican race will be populated …GOP representatives regret skipped oath
- EXCLUSIVE: Sonny Bono's Widow - Rep. Mary Bono - In Lurid Photo Scandal With Woman Investigated By FBI — Congresswoman Mary Bono Mack has been caught on camera in a lurid scandal where another woman is apparently licking her breast. — RadarOnline.com has exclusively obtained the photo …
Mass. Supreme Court rules against US Bancorp, Wells Fargo in foreclosure case
Written by Biloxi
A case in Massachusetts could put a wrench into many major banks' arguments in court with homeowners to whether the banks are the actual mortgage holders. Massachusetts Supreme Court judge ruled that U.S. Bancorp and Wells Fargo were not the mortgage holders when they foreclosed on two separate homes in the Antonio Ibanez and Mark and Tammy LaRace case. According to Judge Ralph Gant's opinion on page 18:
"We agree with the judge that the plaintiffs, who were not the original mortgagees, failed to make the required showing that they were the holders of the mortgages at the time of foreclosure..." "As a result, they did not demonstrate that the foreclosure sales were valid to convey title to the subject properties, and their requests for a declaration of clear title were properly denied."
According to the court opinion, U.S. Bank foreclosed on Antonio Ibanez and purchased his home in a foreclosure sale on July 5, 2007. On that same day, Wells Fargo foreclosed on Mark and Tammy LaRace and sequentially purchased their home at a sale. Both banks filed in the lower court in 2008 to affirm the right, title, and interest of the mortgagor of the property.
U.S. Bancorp claims that it has no ownership interest in the underlying mortgages and the bank's role in this case is solely as the trustee. And here is Wells Fargo's comment on the Massachusetts Superior Court ruling:
“The loans at issue in the court’s ruling were not originated, owned, serviced or foreclosed upon by Wells Fargo. As trustee of a securitized pool of loans, Wells Fargo expects the entities who service these loans to abide by all applicable state laws, including those laws that govern foreclosure sales.
Wells Fargo believes the court’s ruling does not prevent foreclosures on loans in securitizations. The court simply set forth a standard legal process that mortgage servicers must follow in Massachusetts.”
It is interesting that Wells Fargo claims the loan at issue in the court ruling wasn't owned or foreclosed by Wells Fargo. If Wells Fargo didn’t foreclose on the defendants, then who did? And who put Wells Fargo's name on it? And notice that both Wells Fargo and U.S. Bancorp claim that they are just the trustees. Keep in mind that only the lender or mortgage holder can foreclose on a property and not a trustee or investor. Remember of the chain of title? It requires the note (the borrower IOU) to be endorsed (like signed by one party over to the next), showing the full chain of title. The chain of title looks like this:
A (originator) =& B (sponsor) =& C (depositor) =& D (trust).
All eyes will focus on whether New Jersey Superior Court will adopt the Massachusetts case. Wells Fargo should be afraid. Six mortgage lenders, including Wells Fargo, in New Jersey had been ordered by the State Supreme Court to appear on January 19th to demonstrate why the state should not suspend their foreclosure actions. The lenders have filed in New Jersey court requesting them not to halt foreclosures.
A case in Massachusetts could put a wrench into many major banks' arguments in court with homeowners to whether the banks are the actual mortgage holders. Massachusetts Supreme Court judge ruled that U.S. Bancorp and Wells Fargo were not the mortgage holders when they foreclosed on two separate homes in the Antonio Ibanez and Mark and Tammy LaRace case. According to Judge Ralph Gant's opinion on page 18:
"We agree with the judge that the plaintiffs, who were not the original mortgagees, failed to make the required showing that they were the holders of the mortgages at the time of foreclosure..." "As a result, they did not demonstrate that the foreclosure sales were valid to convey title to the subject properties, and their requests for a declaration of clear title were properly denied."
According to the court opinion, U.S. Bank foreclosed on Antonio Ibanez and purchased his home in a foreclosure sale on July 5, 2007. On that same day, Wells Fargo foreclosed on Mark and Tammy LaRace and sequentially purchased their home at a sale. Both banks filed in the lower court in 2008 to affirm the right, title, and interest of the mortgagor of the property.
U.S. Bancorp claims that it has no ownership interest in the underlying mortgages and the bank's role in this case is solely as the trustee. And here is Wells Fargo's comment on the Massachusetts Superior Court ruling:
“The loans at issue in the court’s ruling were not originated, owned, serviced or foreclosed upon by Wells Fargo. As trustee of a securitized pool of loans, Wells Fargo expects the entities who service these loans to abide by all applicable state laws, including those laws that govern foreclosure sales.
Wells Fargo believes the court’s ruling does not prevent foreclosures on loans in securitizations. The court simply set forth a standard legal process that mortgage servicers must follow in Massachusetts.”
It is interesting that Wells Fargo claims the loan at issue in the court ruling wasn't owned or foreclosed by Wells Fargo. If Wells Fargo didn’t foreclose on the defendants, then who did? And who put Wells Fargo's name on it? And notice that both Wells Fargo and U.S. Bancorp claim that they are just the trustees. Keep in mind that only the lender or mortgage holder can foreclose on a property and not a trustee or investor. Remember of the chain of title? It requires the note (the borrower IOU) to be endorsed (like signed by one party over to the next), showing the full chain of title. The chain of title looks like this:
A (originator) =& B (sponsor) =& C (depositor) =& D (trust).
All eyes will focus on whether New Jersey Superior Court will adopt the Massachusetts case. Wells Fargo should be afraid. Six mortgage lenders, including Wells Fargo, in New Jersey had been ordered by the State Supreme Court to appear on January 19th to demonstrate why the state should not suspend their foreclosure actions. The lenders have filed in New Jersey court requesting them not to halt foreclosures.
Friday, January 07, 2011
Commercial mortgage modifications become huge trend in just two years
From 2000 to 2008, commercial mortgage modifications were relatively unheard of. It was a different story in 2009 and 2010.
Of all loan modifications in the commercial mortgage industry over the past decade, 96% occurred in the last years, according to Standard & Poor's.
The rating agency said 354 commercial real estate loans with a principal balance $15.6 billion were modified from January through November, up significantly from 216 loans valued at $7.06 billion for all of 2009. Analysts said extending maturities on commercial mortgages has been the most common loan modification in the space since 1998.
"Our view is that extending maturities for loans with stable cash flows has helped keep trust expenses down and has prevented higher losses typically associated with property liquidations at distressed prices," Standard & Poor's credit analyst Larry Kay said.
The agency said loan modifications in commercial real estate possibly helped keep mortgage delinquencies down last year. Analysts expect modifications to remain high in 2011, although liquidations are projected "to increase as a percentage of total resolutions as market conditions improve," according to S&P credit analyst Louis Cicerchia. Modifications to prevent liquidations in the commercial mortgage market is know as the "extend and pretend" strategy.
The rating agency said mortgage modifications help limit defaults by giving borrowers options, "especially those that have struggled to secure refinancing for upcoming loan maturities."
Read on.
Of all loan modifications in the commercial mortgage industry over the past decade, 96% occurred in the last years, according to Standard & Poor's.
The rating agency said 354 commercial real estate loans with a principal balance $15.6 billion were modified from January through November, up significantly from 216 loans valued at $7.06 billion for all of 2009. Analysts said extending maturities on commercial mortgages has been the most common loan modification in the space since 1998.
"Our view is that extending maturities for loans with stable cash flows has helped keep trust expenses down and has prevented higher losses typically associated with property liquidations at distressed prices," Standard & Poor's credit analyst Larry Kay said.
The agency said loan modifications in commercial real estate possibly helped keep mortgage delinquencies down last year. Analysts expect modifications to remain high in 2011, although liquidations are projected "to increase as a percentage of total resolutions as market conditions improve," according to S&P credit analyst Louis Cicerchia. Modifications to prevent liquidations in the commercial mortgage market is know as the "extend and pretend" strategy.
The rating agency said mortgage modifications help limit defaults by giving borrowers options, "especially those that have struggled to secure refinancing for upcoming loan maturities."
Read on.
Biloxi Buzz for Friday
Birther Arrested After Interrupting
CBO: GOP Health Care Repeal Would Spike Deficit By $230 Billion
Obama Grants Bill O'Reilly Super Bowl Interview
Pentagon To Cut Spending For First Time Since 9/11
Diane Sawyer To Interview Donald Rumsfeld
WATCH: Boehner Fumbles Budget Question In First Interview As Speaker
JPMorgan, GMAC Urge New Jersey Court Not to Suspend Home Foreclosures
Bank of America Corp., JPMorgan Chase & Co. and other U.S. banks told a New Jersey court that defects in their processes for seizing homes in the state can be remedied without halting foreclosures.
The banks have taken steps to improve their procedures, making a suspension unnecessary, they said in documents filed yesterday in state court in Trenton, New Jersey, and made public today. The filings came in response to a proposal to freeze foreclosures in the state by six U.S. banks while their procedures are reviewed.
The banks’ practices came under scrutiny after bank employees signed court documents in foreclosure cases without reviewing their accuracy, according to court papers.
“Bank of America fully appreciates the court’s concerns and looks forward to working with the court to address them,” the Charlotte, North Carolina-based company said. “The court should not take the steps outlined in the order because they are unnecessary and will cause a wholesale delay in administering foreclosure cases that is not in the public interest.”
The banks have taken steps to improve their procedures, making a suspension unnecessary, they said in documents filed yesterday in state court in Trenton, New Jersey, and made public today. The filings came in response to a proposal to freeze foreclosures in the state by six U.S. banks while their procedures are reviewed.
The banks’ practices came under scrutiny after bank employees signed court documents in foreclosure cases without reviewing their accuracy, according to court papers.
“Bank of America fully appreciates the court’s concerns and looks forward to working with the court to address them,” the Charlotte, North Carolina-based company said. “The court should not take the steps outlined in the order because they are unnecessary and will cause a wholesale delay in administering foreclosure cases that is not in the public interest.”
You can check out the rest here…
Links to documents filed…
Thursday, January 06, 2011
Leaked document shows Lee Co. judges tried to fix foreclosure error
A 4 In Your Corner investigation reigning in Lee County foreclosure judges? Judges not requiring banks to show how much homeowners owe…even though they’re supposed to.
Now, a leaked document has surfaced…showing Lee judges trying to fix their error.
Judge Thompson's Second Order
Now, a leaked document has surfaced…showing Lee judges trying to fix their error.
Judge Thompson's Second Order
FDIC goes after former execs of failed banks to recover losses
The Federal Deposit Insurance Corp. may sue as many as 109 former executives of failed banks in an effort to recover federal losses. According to data, which the agency began releasing Tuesday, the FDIC authorized lawsuits to recover approximately $2.5 billion.
The FDIC can sue former bank officials after a bank failure in what it calls a "personal liability lawsuit," because the federal agency absorbs all the losses from the failure. Before seeking recoveries from former officials, the FDIC investigates the cause of each bank's failure.
Executives including officers, directors, accountants, appraisers and brokers are eligible to be sued for either "gross or simple negligence" in overseeing the bank and its funds.
Between 1985 and 1992, the FDIC brought claims against directors and officers in 24% of bank failures. In 2010, two lawsuits were filed with 107 others authorized.
The FDIC sued IndyMac Bank in July after the bank's homebuilder lending endeavor essentially failed. According to the complaint, IndyMac's homebuilding division grew its outstanding portfolio from $1.1 billion in 2003 to $2 billion in 2006. The bank was seized in July 2008. At that time, the homebuilder's portfolio had an outstanding balance of about $898.3 million.
The FDIC said bank losses from the operation of the homebuilder lending venture stemmed from two things: a disregard for credit policy by lending to individuals who were not credit worthy and a high loan-volume strategy coming off one of the longest appreciating housing markets in more than four decades.
The second lawsuit was brought against Illinois-based Heritage Community Bank in November. The FDIC claimed 11 of the bank's former directors "failed to properly manage and supervise Heritage and its commercial real estate lending program." The agency is seeking to recovery $20 million from those executives.
The FDIC noted on a new website devoted to tracking personal liability lawsuits that not all bank failure investigations lead to a lawsuit. In 2010, there were 157 bank failures. There were 140 in 2009.
http://www.housingwire.com/2011/01/05/fdic-goes-after-former-bank-execs-to-recover-losses
The FDIC can sue former bank officials after a bank failure in what it calls a "personal liability lawsuit," because the federal agency absorbs all the losses from the failure. Before seeking recoveries from former officials, the FDIC investigates the cause of each bank's failure.
Executives including officers, directors, accountants, appraisers and brokers are eligible to be sued for either "gross or simple negligence" in overseeing the bank and its funds.
Between 1985 and 1992, the FDIC brought claims against directors and officers in 24% of bank failures. In 2010, two lawsuits were filed with 107 others authorized.
The FDIC sued IndyMac Bank in July after the bank's homebuilder lending endeavor essentially failed. According to the complaint, IndyMac's homebuilding division grew its outstanding portfolio from $1.1 billion in 2003 to $2 billion in 2006. The bank was seized in July 2008. At that time, the homebuilder's portfolio had an outstanding balance of about $898.3 million.
The FDIC said bank losses from the operation of the homebuilder lending venture stemmed from two things: a disregard for credit policy by lending to individuals who were not credit worthy and a high loan-volume strategy coming off one of the longest appreciating housing markets in more than four decades.
The second lawsuit was brought against Illinois-based Heritage Community Bank in November. The FDIC claimed 11 of the bank's former directors "failed to properly manage and supervise Heritage and its commercial real estate lending program." The agency is seeking to recovery $20 million from those executives.
The FDIC noted on a new website devoted to tracking personal liability lawsuits that not all bank failure investigations lead to a lawsuit. In 2010, there were 157 bank failures. There were 140 in 2009.
http://www.housingwire.com/2011/01/05/fdic-goes-after-former-bank-execs-to-recover-losses
Biloxi Buzz for Thursday
Boehner elected House speaker
GOP Rep. John Boehner becomes the third-ranking US elected official.
Michele Bachmann considering 2012 bid
Minnesota Republican traveling to Iowa later this month for fundraiser.
Rep. King: NYT should be indicted
Republican lawmaker has 'nothing but contempt' for the newspaper.
Feingold to teach at Marquette University
Robert Gibbs Leaving White House
Big Health Insurer Wants Up To 59 Percent Hike In Individual Premiums
GOP Rep. John Boehner becomes the third-ranking US elected official.
Michele Bachmann considering 2012 bid
Minnesota Republican traveling to Iowa later this month for fundraiser.
Rep. King: NYT should be indicted
Republican lawmaker has 'nothing but contempt' for the newspaper.
Feingold to teach at Marquette University
Robert Gibbs Leaving White House
Big Health Insurer Wants Up To 59 Percent Hike In Individual Premiums
Glenn Beck In Trouble? Dropped From NY Radio Station, TV Ratings Fall
Wednesday, January 05, 2011
Homeowner sues Bank of America for alleged fraud in small claim court and wins
Written by Biloxi
Here is an unusual and clever lawsuit filed by a Calfornia homeowner to Bank of America. The homeowner sues Bank of America in small claims court for alleged fraud and wins. I am not going to be surprised if other homeowners follows suit and sues their mortgage lender in small claims court rather than in a civil court.
Dave Graham, a homeowner from Big Bear City, California, sued Bank of America for fraud because the bank put Mr. Graham into a loan modification when the bank knew from the start Mr. Graham did not qualify.
Here is the story:
The length of the [loan modification] agreement was supposed to be 90 days, but Graham was not told he was turned down for the program until May 21, 2010, 18 months after entering into the agreement. He was then told he would have to pay the delinquent amount of around $7,000, which resulted from the $400 reduction to his monthly payment, or his home would be foreclosed on.
And how did Mr. Graham prove and win his case? Mr. Graham simply use the calculation outlined in the loan modification program whether someone qualified for the program. In this case, Mr. Graham participated in the goverment program, Making Home Affordable Program. Under the Making Home Affordable Program, the homeowner must make three month trial partial payments on time. And the lender has 90 days to tell the client whether the loan modification is approved for a permenant loan modification. Mr. Graham brought to small claim court an expert witness, Alan Sims of the Center for Litigation and Consumer Real Estate Education. Bank of America brought its representative to the court. However, the bank representative's testimony went into the favor of Mr. Graham:
Bank of America’s representative, mortgage service specialist Anthony Lopez, admitted in court that the lender continued to accept modified payments for many months after the bank determined Graham was not approved for the modification.
Lopez told the judge there were attempts to contact Graham to notify him, but the phone number on file was incorrect and the notice sent was mailed to Graham’s physical address instead of the mailing address. The mailing address is a P.O. Box because Big Bear City is a rural area and does not have home postal delivery in most areas. The P.O. Box address was on file with Bank of America as the mailing address.
[Judge John] Pacheco asked Lopez why when Graham called each month to check on his status and pay his monthly modified loan amount that he was not told that he had been turned down for the loan modification. 'People that do take these calls aren’t, let’s say, experienced or certified negotiators,' Lopez stated in court. 'They are collectors. ... They have minimal training in the modification process.'
Judge John Pacheco had ruled that "Bank of America was in violation of California Civil Code 1565-1590, particularly 1572, suppression of facts and 1575, undue influence." The judge awarded Mr. Graham $7,595.00 and won his case on December 17. Bank of America is expected to appealed. This is a first known case by a homeowner to take a bank to small claims court where a bank has been found guilty by reason of fraud. I am sure that other homeowners from other states will follow suit to sue banks in small claims court. After all, there are no jurors and no defense attorney and no prosecutor. The decision maker is just the judge.
Here is an unusual and clever lawsuit filed by a Calfornia homeowner to Bank of America. The homeowner sues Bank of America in small claims court for alleged fraud and wins. I am not going to be surprised if other homeowners follows suit and sues their mortgage lender in small claims court rather than in a civil court.
Dave Graham, a homeowner from Big Bear City, California, sued Bank of America for fraud because the bank put Mr. Graham into a loan modification when the bank knew from the start Mr. Graham did not qualify.
Here is the story:
The length of the [loan modification] agreement was supposed to be 90 days, but Graham was not told he was turned down for the program until May 21, 2010, 18 months after entering into the agreement. He was then told he would have to pay the delinquent amount of around $7,000, which resulted from the $400 reduction to his monthly payment, or his home would be foreclosed on.
And how did Mr. Graham prove and win his case? Mr. Graham simply use the calculation outlined in the loan modification program whether someone qualified for the program. In this case, Mr. Graham participated in the goverment program, Making Home Affordable Program. Under the Making Home Affordable Program, the homeowner must make three month trial partial payments on time. And the lender has 90 days to tell the client whether the loan modification is approved for a permenant loan modification. Mr. Graham brought to small claim court an expert witness, Alan Sims of the Center for Litigation and Consumer Real Estate Education. Bank of America brought its representative to the court. However, the bank representative's testimony went into the favor of Mr. Graham:
Bank of America’s representative, mortgage service specialist Anthony Lopez, admitted in court that the lender continued to accept modified payments for many months after the bank determined Graham was not approved for the modification.
Lopez told the judge there were attempts to contact Graham to notify him, but the phone number on file was incorrect and the notice sent was mailed to Graham’s physical address instead of the mailing address. The mailing address is a P.O. Box because Big Bear City is a rural area and does not have home postal delivery in most areas. The P.O. Box address was on file with Bank of America as the mailing address.
[Judge John] Pacheco asked Lopez why when Graham called each month to check on his status and pay his monthly modified loan amount that he was not told that he had been turned down for the loan modification. 'People that do take these calls aren’t, let’s say, experienced or certified negotiators,' Lopez stated in court. 'They are collectors. ... They have minimal training in the modification process.'
Judge John Pacheco had ruled that "Bank of America was in violation of California Civil Code 1565-1590, particularly 1572, suppression of facts and 1575, undue influence." The judge awarded Mr. Graham $7,595.00 and won his case on December 17. Bank of America is expected to appealed. This is a first known case by a homeowner to take a bank to small claims court where a bank has been found guilty by reason of fraud. I am sure that other homeowners from other states will follow suit to sue banks in small claims court. After all, there are no jurors and no defense attorney and no prosecutor. The decision maker is just the judge.
FL AG Economic Crime Division: UNFAIR, DECEPTIVE AND UNCONSCIONABLE ACTS IN FORECLOSURE CASES
OFFICE OF ATTORNEY GENERAL
Economic Crimes Division
UNFAIR, DECEPTIVE AND UNCONSCIONABLE ACTS IN FORECLOSURE CASES
By: June M. Clarkson, Theresa B. Edwards
and Rene D. Harrod
FL AG PPT
Economic Crimes Division
UNFAIR, DECEPTIVE AND UNCONSCIONABLE ACTS IN FORECLOSURE CASES
By: June M. Clarkson, Theresa B. Edwards
and Rene D. Harrod
FL AG PPT
Fed Moves To Gut Predatory Lending Regulation
The Federal Reserve is pushing a new mortgage regulation that would effectively eliminate the most powerful federal remedy for predatory lending.
The regulation would severely limit a practice called "rescission," used to strike down demonstrably-illegal or fraudulent loan contracts and void a bank's ill-gotten gains from such predatory lending practices. When a mortgage borrower wins a rescission case in court, the bank loses the right to foreclose, and has to give up all profits from interest and fees on the loan. The borrower still has to repay the principal -- the original amount of money extended by the bank -- but can't be kicked out of the house.
Under the Fed's new proposal, however, borrowers would be required to pay off the balance of the loan before the bank loses its right to foreclose -- that means borrowers could still lose their homes, even in cases where banks have broken the law.
Unsurprisingly, banks support the move, but consumer advocates say this would essentially make rescission worthless to borrowers.
"The ... proposal would eviscerate the single most effective tool that homeowners have to stop foreclosures and avoid predatory loans," reads a letter penned by Margot Saunders of the National Consumer Law Center and signed by 16 national public interest groups, along with 33 state housing and legal aid groups and 144 individual attorneys. "Passage of the proposed rule will considerably exacerbate foreclosure statistics in this nation."
http://www.huffingtonpost.com/2011/01/04/federal-reserve-rescission-regulation_n_804334.html
The regulation would severely limit a practice called "rescission," used to strike down demonstrably-illegal or fraudulent loan contracts and void a bank's ill-gotten gains from such predatory lending practices. When a mortgage borrower wins a rescission case in court, the bank loses the right to foreclose, and has to give up all profits from interest and fees on the loan. The borrower still has to repay the principal -- the original amount of money extended by the bank -- but can't be kicked out of the house.
Under the Fed's new proposal, however, borrowers would be required to pay off the balance of the loan before the bank loses its right to foreclose -- that means borrowers could still lose their homes, even in cases where banks have broken the law.
Unsurprisingly, banks support the move, but consumer advocates say this would essentially make rescission worthless to borrowers.
"The ... proposal would eviscerate the single most effective tool that homeowners have to stop foreclosures and avoid predatory loans," reads a letter penned by Margot Saunders of the National Consumer Law Center and signed by 16 national public interest groups, along with 33 state housing and legal aid groups and 144 individual attorneys. "Passage of the proposed rule will considerably exacerbate foreclosure statistics in this nation."
http://www.huffingtonpost.com/2011/01/04/federal-reserve-rescission-regulation_n_804334.html
Biloxi Buzz for Wednesday
GOP’s New Oversight Chair Asks Businesses Which Regulations Burden Them
IRS says taxpayers will have until April 18, 2011 to file their 2010 returns.
Prop 8 Case Sent To California Supreme Court
Deadline for taxes extended to April 18
INDIANA AG petitions Indiana Supreme Court to set new requirements for lenders
Best Practices sought to thwart foreclosure violations
Zoeller petitions Indiana Supreme Court to set new requirements for lenders
INDIANAPOLIS – As the 50-state investigation continues into improper “robo-signing” foreclosure practices, Indiana Attorney General Greg Zoeller today filed a petition asking the Indiana Supreme Court to impose new procedures to ensure that borrowers’ legal rights are fully protected and mortgage lenders follow the law.
“When some mortgage lenders try to foreclose on distressed homeowners by filing foreclosure documents that are unverified, unauthenticated or riddled with errors, it not only violates the rights of the homeowners but it is also a fraud upon the court,” Zoeller said. “In Indiana, we are not going to wait for federal government action; we will forge ahead to craft our own solution.”
A foreclosure-prevention task force established by the Indiana Supreme Court developed a list of guidelines to provide assurances to lenders, servicers, courts and borrowers that state and federal laws are being followed for the protection of homeowners.
The Indiana Supreme Court’s task force included the Attorney General’s Office, judges, Supreme Court staff, legal services attorneys and private-practice attorneys for mortgage lenders. Zoeller’s office today filed in the Supreme Court a petition — called “Mortgage Foreclosure Best Practices” — that included all the task force proposed guidelines and added some wording to strengthen them.
The Supreme Court is likely to take the proposals under advisement and decide at a later date whether to adopt them as requirements that lenders and services would have to follow.
The proposed best practices developed by the task force would do the following:
• Require a mortgage lender seeking to foreclose to produce the original signed mortgage note when asked by the court – or other legal proof if the original cannot be located — and the chain of title proving that the lender has the right to enforce the note.
• Require that the court send a notice to the borrower of their legal right to a settlement conference with the lender; and require that the judge not take final action until the settlement-conference report has been filed with the court.
• Prohibit the mortgage lender from asking the borrower to waive his or her legal right to a settlement conference.
• Allow courts to impose monetary sanctions on lenders who fail to comply with the Best Practices. The petition notes that judges in Allen and St. Joseph counties have ordered sanctions of between $150 to $2,500 for similar violations.
Petition SC MortgageForeclosureBestPractices.fileSTAMPED.1.3.11
Zoeller petitions Indiana Supreme Court to set new requirements for lenders
INDIANAPOLIS – As the 50-state investigation continues into improper “robo-signing” foreclosure practices, Indiana Attorney General Greg Zoeller today filed a petition asking the Indiana Supreme Court to impose new procedures to ensure that borrowers’ legal rights are fully protected and mortgage lenders follow the law.
“When some mortgage lenders try to foreclose on distressed homeowners by filing foreclosure documents that are unverified, unauthenticated or riddled with errors, it not only violates the rights of the homeowners but it is also a fraud upon the court,” Zoeller said. “In Indiana, we are not going to wait for federal government action; we will forge ahead to craft our own solution.”
A foreclosure-prevention task force established by the Indiana Supreme Court developed a list of guidelines to provide assurances to lenders, servicers, courts and borrowers that state and federal laws are being followed for the protection of homeowners.
The Indiana Supreme Court’s task force included the Attorney General’s Office, judges, Supreme Court staff, legal services attorneys and private-practice attorneys for mortgage lenders. Zoeller’s office today filed in the Supreme Court a petition — called “Mortgage Foreclosure Best Practices” — that included all the task force proposed guidelines and added some wording to strengthen them.
The Supreme Court is likely to take the proposals under advisement and decide at a later date whether to adopt them as requirements that lenders and services would have to follow.
The proposed best practices developed by the task force would do the following:
• Require a mortgage lender seeking to foreclose to produce the original signed mortgage note when asked by the court – or other legal proof if the original cannot be located — and the chain of title proving that the lender has the right to enforce the note.
• Require that the court send a notice to the borrower of their legal right to a settlement conference with the lender; and require that the judge not take final action until the settlement-conference report has been filed with the court.
• Prohibit the mortgage lender from asking the borrower to waive his or her legal right to a settlement conference.
• Allow courts to impose monetary sanctions on lenders who fail to comply with the Best Practices. The petition notes that judges in Allen and St. Joseph counties have ordered sanctions of between $150 to $2,500 for similar violations.
Petition SC MortgageForeclosureBestPractices.fileSTAMPED.1.3.11
India Police File Case Against Citigroup's Pandit, Other Executives
MUMBAI—The Indian police Tuesday registered a case against top Citigroup Inc. officials, including Chief Executive Vikram Pandit, in connection with a estimated three-billion-rupee ($67.2 million) alleged fraud at a Citibank branch in a New Delhi suburb.
The move follows a complaint by bank customer Sanjeev Agarwal, who was allegedly duped in an investment fraud orchestrated by an employee of the Gurgaon branch of the U.S. bank.
The case begins the investigations into the charges leveled by Mr. Agarwal against Citigroup and the executives.
"We have registered a case of fraud on the basis of the complaint received from Agarwal," Dalbir Singh, assistant commissioner of police of Gurgaon, a satellite city of New Delhi, told Dow Jones Newswires.
In addition to Mr. Pandit, Mr. Agarwal's complaint names William R. Rhodes, who retired as senior vice chairman of Citigroup on April 30; Chief Operating Officer Douglas Peterson; Chief Financial Officer John Gerspach; and three others, including Shivraj Puri, the branch employee accused in the investment fraud.
Citigroup in a statement said the Mr. Agarwal's claims against senior executives "are completely without basis and we intend to contest them vigorously."
The bank said it identified the fraud and immediately reported the matter to the regulators and law-enforcement agencies.
"It was on Citi complaint that the Gurgaon police lodged an FIR [first information report] and are currently investigating the matter. Citi will continue to work with the authorities on this investigation," Citigroup said.
http://online.wsj.com/article/SB10001424052748704723104576061703168369300.html
The move follows a complaint by bank customer Sanjeev Agarwal, who was allegedly duped in an investment fraud orchestrated by an employee of the Gurgaon branch of the U.S. bank.
The case begins the investigations into the charges leveled by Mr. Agarwal against Citigroup and the executives.
"We have registered a case of fraud on the basis of the complaint received from Agarwal," Dalbir Singh, assistant commissioner of police of Gurgaon, a satellite city of New Delhi, told Dow Jones Newswires.
In addition to Mr. Pandit, Mr. Agarwal's complaint names William R. Rhodes, who retired as senior vice chairman of Citigroup on April 30; Chief Operating Officer Douglas Peterson; Chief Financial Officer John Gerspach; and three others, including Shivraj Puri, the branch employee accused in the investment fraud.
Citigroup in a statement said the Mr. Agarwal's claims against senior executives "are completely without basis and we intend to contest them vigorously."
The bank said it identified the fraud and immediately reported the matter to the regulators and law-enforcement agencies.
"It was on Citi complaint that the Gurgaon police lodged an FIR [first information report] and are currently investigating the matter. Citi will continue to work with the authorities on this investigation," Citigroup said.
http://online.wsj.com/article/SB10001424052748704723104576061703168369300.html
Elizabeth Warren forges alliance between CFPB, regulators
Housingwire:
A team of Treasury Department officials building the Consumer Financial Protection Bureau signed a "memorandum of understanding" Tuesday pledging that the bureau, state and federal regulators will cooperate in the supervision of financial products.
The CFPB, which was originated under Dodd-Frank, will launch in July and become the de facto supervisor of the mortgage industry. Officials said state regulators and the bureau are dedicated to keeping examination procedures consistent while trying to minimize the regulatory burden on lenders.
State regulators and the bureau said they would consult with each other to establish these standards. Officials said after July, consumers will benefit from the partnership between the regulators and the bureau, whether they're signing a mortgage or looking to finance their children's education.
Elizabeth Warren, the special adviser to the Treasury Secretary Timothy Geithner on the CFPB and whom many believed would eventually would become director of the bureau, said the new alliance was forged to protect families. No director of the CFPB has been named.
"This agreement allows us to bring thousands of financial service providers out of the shadows and to begin the process of ensuring that all lenders comply with the same basic rules," Warren said.
A team of Treasury Department officials building the Consumer Financial Protection Bureau signed a "memorandum of understanding" Tuesday pledging that the bureau, state and federal regulators will cooperate in the supervision of financial products.
The CFPB, which was originated under Dodd-Frank, will launch in July and become the de facto supervisor of the mortgage industry. Officials said state regulators and the bureau are dedicated to keeping examination procedures consistent while trying to minimize the regulatory burden on lenders.
State regulators and the bureau said they would consult with each other to establish these standards. Officials said after July, consumers will benefit from the partnership between the regulators and the bureau, whether they're signing a mortgage or looking to finance their children's education.
Elizabeth Warren, the special adviser to the Treasury Secretary Timothy Geithner on the CFPB and whom many believed would eventually would become director of the bureau, said the new alliance was forged to protect families. No director of the CFPB has been named.
"This agreement allows us to bring thousands of financial service providers out of the shadows and to begin the process of ensuring that all lenders comply with the same basic rules," Warren said.
Tuesday, January 04, 2011
Biloxi Buzz for Tuesday
Issa Announces Hearings, Will Probe Fannie, Freddie, FDA, WikiLeaks
Bank of America writes off $5bn on Countrywide Financial
Bank of America writes off $5bn on Countrywide Financial
Rove protege now on Judiciary Committee
Administration Prepares to Defy Efforts to Limit Obama's Options for Guantanamo — This story has been updated to reflect our latest reporting with the addition of a third sentence in the second paragraph. — Obama administration officials say they plan
National Debt Tops $14 Trillion — The latest posting today of the National Debt shows it has topped $14 trillion for the first time. — The U.S. Treasury website today reported that as of last Friday, the last day of 2010, the National Debt stood at $14,025,215,218,708.52.
John Roberts To Join Fox News Channel — Former CNN “American Morning” anchor John Roberts is expected to join FOX News Channel as a senior national correspondent, based in Atlanta. — He will be reporting on major domestic and international stories for the network. — Update: FNC has made it official.
Foreclosure Deals to Start With Big Lenders, Iowa AG Says
The 50 state attorneys general probing U.S. foreclosure practices will first settle with the five largest loan servicers, including Bank of America Corp. and JPMorgan Chase & Co., Iowa Attorney General Tom Miller said.
No settlements have been reached yet, Miller said in a telephone interview today. The other three are Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc., said Miller, the leader of the 50-state investigation. The five have 59 percent of the market, Miller said.
“What we’re looking at is five separate agreements with the five largest servicers,” Miller said. “We’re still a ways away” from reaching agreements, he said. “We’re working very hard to figure out what should be in the settlement.”
All 50 U.S. states are investigating whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe, announced Oct. 13, came after JPMorgan and Ally Financial’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures, and Bank of America, the largest U.S. lender, froze foreclosures nationwide.
http://www.bloomberg.com/news/2011-01-03/state-foreclosure-settlements-to-start-with-biggest-banks-iowa-ag-says.html
No settlements have been reached yet, Miller said in a telephone interview today. The other three are Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc., said Miller, the leader of the 50-state investigation. The five have 59 percent of the market, Miller said.
“What we’re looking at is five separate agreements with the five largest servicers,” Miller said. “We’re still a ways away” from reaching agreements, he said. “We’re working very hard to figure out what should be in the settlement.”
All 50 U.S. states are investigating whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. The probe, announced Oct. 13, came after JPMorgan and Ally Financial’s GMAC mortgage unit said they would stop repossessions in 23 states where courts supervise home seizures, and Bank of America, the largest U.S. lender, froze foreclosures nationwide.
http://www.bloomberg.com/news/2011-01-03/state-foreclosure-settlements-to-start-with-biggest-banks-iowa-ag-says.html
Monday, January 03, 2011
What will be the reform of Fannie, Freddie in 2011?
Written by Biloxi
The Obama Administration is committed to reform the broken system of housing finance including Fannie Mae and Freddie Mac. Tthe Obama Administration will develop a reform proposal for delivery to Congress by January 2011 according to the White House website. While we wait for the Obama Administration to reveal their new reform proposal of Fannie and Freddie, a new report, however, indicates that Republican Party might not be so eager to tear down Fannie and Freddie after all and they have changed their tune on getting rid of the two largest U.S.mortgage market.
From WSJ:
Now, as Republicans prepare to assume control of the House next week, they aren't in as big a rush, cautioning that withdrawing government support in the housing market should be gradual.
Yet, Rep. Jeb Hensarling (R., Texas) submitted a bill that was backed by Republicans to start cutting the government's ties to Fannie and Freddie or begin winding them down in two years. Why the change of heart for Fannie and Freddie? Well, for one thing, the Republicans will find it differcult to compromise with Democrats with simply abolishing Fannie and Freddie even in a controlled Republican Congress in 2011. More importantly, Republicans are now in a tough position that they will have to live with the consequences of every decision of all bills including their decision on dealing with the two mortgage giants under the new Congress. Republicans know that they don't have a chance to get rid of Fannie and Freddie under the Democratic controlled Senate and President Obama.
In addition, Republicans don't know what President Obama's reform for the two mortgage giants. And what if President Obama's reform plan is to restore Fannie and Freddie under the original guidelines of the New Deal? In 1938, Fannie Mae provided "local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing." However, Congress set up Fannie as stockholder owned corporation in 1968 as government-sponsored enterprise (GSE) that would expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS). Freddie Mac was created in 1970 to expand the secondary market in mortgages.This was the beginning of mortgage-backed securities more than 40 years ago that is one of the major causes in the current housing crisis.
The Obama Administration is committed to reform the broken system of housing finance including Fannie Mae and Freddie Mac. Tthe Obama Administration will develop a reform proposal for delivery to Congress by January 2011 according to the White House website. While we wait for the Obama Administration to reveal their new reform proposal of Fannie and Freddie, a new report, however, indicates that Republican Party might not be so eager to tear down Fannie and Freddie after all and they have changed their tune on getting rid of the two largest U.S.mortgage market.
From WSJ:
Now, as Republicans prepare to assume control of the House next week, they aren't in as big a rush, cautioning that withdrawing government support in the housing market should be gradual.
Yet, Rep. Jeb Hensarling (R., Texas) submitted a bill that was backed by Republicans to start cutting the government's ties to Fannie and Freddie or begin winding them down in two years. Why the change of heart for Fannie and Freddie? Well, for one thing, the Republicans will find it differcult to compromise with Democrats with simply abolishing Fannie and Freddie even in a controlled Republican Congress in 2011. More importantly, Republicans are now in a tough position that they will have to live with the consequences of every decision of all bills including their decision on dealing with the two mortgage giants under the new Congress. Republicans know that they don't have a chance to get rid of Fannie and Freddie under the Democratic controlled Senate and President Obama.
In addition, Republicans don't know what President Obama's reform for the two mortgage giants. And what if President Obama's reform plan is to restore Fannie and Freddie under the original guidelines of the New Deal? In 1938, Fannie Mae provided "local banks with federal money to finance home mortgages in an attempt to raise levels of home ownership and the availability of affordable housing." However, Congress set up Fannie as stockholder owned corporation in 1968 as government-sponsored enterprise (GSE) that would expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities (MBS). Freddie Mac was created in 1970 to expand the secondary market in mortgages.This was the beginning of mortgage-backed securities more than 40 years ago that is one of the major causes in the current housing crisis.
According to the White House website, Obama Administration addressed the profit driven system by the mortgage giants was not a benefit to the taxpapers:
"For decades, Fannie Mae and Freddie Mac privatized their profits while ultimately putting taxpayers at risk for losses. This type of 'heads private shareholders win, tails taxpayers lose' system of misaligned incentives makes no sense for the nation."
The big question is President Obama going to get rid of the stockholder owned corporation system in Fannie and Freddie and restore both two mortgage giants to the blueprint under the FDR's New Deal? That would be interesting to see.
Another possible reason for the Republicans to backing away from axing Fannie and Freddie is because the Financial Crisis Inquiry Commission Commissioner (FCIC) misled the Republicans about Fannie and Freddie's downfall. From OpEd News:
How was Peter Wallison able to give the impression that the majority of loans originated by Fannie Mae fit into high-risk categories? By cleverly distorting the data. One of the more vocal members of the Financial Crisis Inquiry Commission seems masterful at placing numbers out of context.
More than two years ago, Wallison collaborated with another purported expert on Fannie and Freddie,Charles Calomiris of Columbia University, to produce a report for the American Enterprise Institute titled, "The Last Trillion-Dollar Commitment: The Destruction of Fannie Mae and Freddie Mac." Its thesis seems to have been lifted in the GOP version of the FCIC report, which was published two weeks ago.
Released within days of the Federal takeover of the government-sponsored enterprises, "The Last Trillion-Dollar Commitment" has gone viral. It has been repeatedly cited by others, such as FreedomWorks and by House Republicans, About.com, Wikipedia and the St. Louis Federal Reserve. Wallison's numbers, which form the core of his analysis, could be debunked with a five-minute Internet search. Yet his falsehoods have gone unchallenged for more than two years.
According to Shahien Nasiripour, Republicans on the FCIC panel are going to write their own report. If that happens, the bipartisan consensus is out the window. Therefore, the FCIC that was created by Congress as an independent panel to examine the financial crisis for the past year would be a sham and another Washington whitewash. The FCIC final report due date was changed to January 2011.
All eyes will be focus on the President Obama's revealing of the Fannie and Freddie reform and the debates on different views by Republicans and Democrats on the housing policy under the two mortgage giants.
Another possible reason for the Republicans to backing away from axing Fannie and Freddie is because the Financial Crisis Inquiry Commission Commissioner (FCIC) misled the Republicans about Fannie and Freddie's downfall. From OpEd News:
How was Peter Wallison able to give the impression that the majority of loans originated by Fannie Mae fit into high-risk categories? By cleverly distorting the data. One of the more vocal members of the Financial Crisis Inquiry Commission seems masterful at placing numbers out of context.
More than two years ago, Wallison collaborated with another purported expert on Fannie and Freddie,Charles Calomiris of Columbia University, to produce a report for the American Enterprise Institute titled, "The Last Trillion-Dollar Commitment: The Destruction of Fannie Mae and Freddie Mac." Its thesis seems to have been lifted in the GOP version of the FCIC report, which was published two weeks ago.
Released within days of the Federal takeover of the government-sponsored enterprises, "The Last Trillion-Dollar Commitment" has gone viral. It has been repeatedly cited by others, such as FreedomWorks and by House Republicans, About.com, Wikipedia and the St. Louis Federal Reserve. Wallison's numbers, which form the core of his analysis, could be debunked with a five-minute Internet search. Yet his falsehoods have gone unchallenged for more than two years.
According to Shahien Nasiripour, Republicans on the FCIC panel are going to write their own report. If that happens, the bipartisan consensus is out the window. Therefore, the FCIC that was created by Congress as an independent panel to examine the financial crisis for the past year would be a sham and another Washington whitewash. The FCIC final report due date was changed to January 2011.
All eyes will be focus on the President Obama's revealing of the Fannie and Freddie reform and the debates on different views by Republicans and Democrats on the housing policy under the two mortgage giants.
New Ohio Affidavit Rules Blows the Fraudsters Out of the Water
Below is a copy of the revised affidavit rules, an order from a specific case, and sample attorney affidavit forms…
Check out the language that should be applied in every court nationwide. This is all we ever asked for, the rule of law, that is already in place, be followed
From the Rules…
(Emphasis added by 4F)
Revised Residential Mortgage Foreclosure Affidavit Policy of the Cuyahoga County Court of Common Pleas The Magistrates Department has received numerous motions of lenders requesting continuances to “ensure their paperwork is proper”. The affidavits in question have been filed in many guises such as affidavits of payment history, variable interest rate affidavits, real party in interest affidavits, affidavits in support of motions for summary judgment, etc.
The Foreclosure Committee has considered the seriousness of these recent disclosures and recommends the following in all residential mortgage foreclosure cases:
• In prejudgment cases where a lender has requested a delay in the proceedings to examine evidence it has submitted or otherwise calls into question the validity of the evidence its has submitted, the Committee recommends the entry of an order requiring plaintiff within thirty days to show cause why the case should not be dismissed without prejudice.
• In post judgment cases where the lender has requested a delay in the proceedings to examine evidence it has submitted in support of its judgment or otherwise calls into question the validity of the evidence its has submitted, the Committee recommends the entry of an order requiring plaintiff within thirty days to show cause why the case should not be dismissed and the judgment vacated.
• In any case where the lender seeks to remove the case from the active docket to examine evidence it has submitted, the Committee recommends that the motion be denied as improper under the rules of Civil Procedure and Superintendence. Following denial of the motion, an order as described above should be entered.
• The Committee further recommends the entry of the following as a standing order in all residential mortgage foreclosure cases:
All affidavits filed in residential mortgage foreclosure cases must indicate that the affiant has actual personal knowledge of the file and loan history in question and has personally reviewed the documents, records, or other data relied upon to make the statements contained in the affidavit. Failure to provide appropriate affidavits may result in mandatory personal attendance of an affiant for a hearing, the imposition of sanctions and penalties for perjury or contempt, and dismissal of the case. Before judgment is entered on any claim for foreclosure and/or money judgment in a residential mortgage foreclosure case, counsel for plaintiff and any other party that asserts a claim for foreclosure or money judgment must file an Affidavit. This Affidavit must:
1. Identify the counsel of record and his or her law firm.
2. Provide that the counsel of record has reviewed the file.
3. Provide that the counsel of record has communicated with a representative of the party seeking foreclosure and/or money judgment and that this representative has affirmed that he or she has personally reviewed the documents, records, or other data related to the case; has reviewed the pleadings and other court filings in the case; and has confirmed both the factual accuracy of the pleadings and court filings and the accuracy of the notarizations contained therein.
4. Provide the full name of the representative described in Item 3 and the date or dates of the communication.
5. Certify that, to the best of the counsel of record’s knowledge, the pleadings and other court filings in support of the claims for foreclosure are complete and accurate in all relevant respects.
6. Acknowledge that counsel of record has a continuing obligation to amend and supplement the Affidavit in light of newly discovered facts following its filing.
7. Be signed and dated by counsel of record. Failure to submit an appropriate Affidavit on or before the date of trial, the date that a motion for summary judgment is ripe for ruling, or the date of default hearing, whichever is applicable, will result in dismissal of the case and may result in further sanctions. Standardized Affidavit Forms are posted on the County website [link to forms]. All affidavits submitted pursuant to this order must be in the format of these Standardized Affidavit Forms.
Revised Residential Mortgage Foreclosure Affidavit Policy of the Cuyahoga County Court of Common Pleas
Cuyahoga County Ohio Attorney Affidavit Forms
Check out the language that should be applied in every court nationwide. This is all we ever asked for, the rule of law, that is already in place, be followed
From the Rules…
(Emphasis added by 4F)
Revised Residential Mortgage Foreclosure Affidavit Policy of the Cuyahoga County Court of Common Pleas The Magistrates Department has received numerous motions of lenders requesting continuances to “ensure their paperwork is proper”. The affidavits in question have been filed in many guises such as affidavits of payment history, variable interest rate affidavits, real party in interest affidavits, affidavits in support of motions for summary judgment, etc.
The Foreclosure Committee has considered the seriousness of these recent disclosures and recommends the following in all residential mortgage foreclosure cases:
• In prejudgment cases where a lender has requested a delay in the proceedings to examine evidence it has submitted or otherwise calls into question the validity of the evidence its has submitted, the Committee recommends the entry of an order requiring plaintiff within thirty days to show cause why the case should not be dismissed without prejudice.
• In post judgment cases where the lender has requested a delay in the proceedings to examine evidence it has submitted in support of its judgment or otherwise calls into question the validity of the evidence its has submitted, the Committee recommends the entry of an order requiring plaintiff within thirty days to show cause why the case should not be dismissed and the judgment vacated.
• In any case where the lender seeks to remove the case from the active docket to examine evidence it has submitted, the Committee recommends that the motion be denied as improper under the rules of Civil Procedure and Superintendence. Following denial of the motion, an order as described above should be entered.
• The Committee further recommends the entry of the following as a standing order in all residential mortgage foreclosure cases:
All affidavits filed in residential mortgage foreclosure cases must indicate that the affiant has actual personal knowledge of the file and loan history in question and has personally reviewed the documents, records, or other data relied upon to make the statements contained in the affidavit. Failure to provide appropriate affidavits may result in mandatory personal attendance of an affiant for a hearing, the imposition of sanctions and penalties for perjury or contempt, and dismissal of the case. Before judgment is entered on any claim for foreclosure and/or money judgment in a residential mortgage foreclosure case, counsel for plaintiff and any other party that asserts a claim for foreclosure or money judgment must file an Affidavit. This Affidavit must:
1. Identify the counsel of record and his or her law firm.
2. Provide that the counsel of record has reviewed the file.
3. Provide that the counsel of record has communicated with a representative of the party seeking foreclosure and/or money judgment and that this representative has affirmed that he or she has personally reviewed the documents, records, or other data related to the case; has reviewed the pleadings and other court filings in the case; and has confirmed both the factual accuracy of the pleadings and court filings and the accuracy of the notarizations contained therein.
4. Provide the full name of the representative described in Item 3 and the date or dates of the communication.
5. Certify that, to the best of the counsel of record’s knowledge, the pleadings and other court filings in support of the claims for foreclosure are complete and accurate in all relevant respects.
6. Acknowledge that counsel of record has a continuing obligation to amend and supplement the Affidavit in light of newly discovered facts following its filing.
7. Be signed and dated by counsel of record. Failure to submit an appropriate Affidavit on or before the date of trial, the date that a motion for summary judgment is ripe for ruling, or the date of default hearing, whichever is applicable, will result in dismissal of the case and may result in further sanctions. Standardized Affidavit Forms are posted on the County website [link to forms]. All affidavits submitted pursuant to this order must be in the format of these Standardized Affidavit Forms.
Revised Residential Mortgage Foreclosure Affidavit Policy of the Cuyahoga County Court of Common Pleas
Cuyahoga County Ohio Attorney Affidavit Forms
Ruling a setback for Bank of America in mortgage suit
Bank of America's hangover from the housing bubble could be harder to shake in the new year as a result of a recent court decision.
The bank lost a major procedural ruling in a lawsuit over its liability for allegedly toxic mortgages. The ruling will make it harder for the bank to defend itself in that case, and it could set a standard for similar disputes.
Bank of America had tried to set a high bar for plaintiff MBIA Insurance by requiring that the files for each of 368,000 or more disputed loans be evaluated individually. That process would have cost MBIA $75 million, and it would have taken a team of 24 people more than four years, MBIA estimated.
For the bank, it was "the next best thing to avoiding trial altogether," MBIA argued.
Instead, the New York State Supreme Court in late December declared that MBIA can pursue its case by focusing on a statistical sample of 6,000 disputed loans. That could pave the way for a trial to proceed as scheduled in 2011.
"It's a big setback" for Bank of America's "scorched-earth strategy," said David J. Grais, a lawyer involved in other suits against the bank.
MBIA still must prove its case, and "this we believe it cannot do," Bank of America spokesman Jerome F. Dubrowski said in a statement.
The MBIA case is at the forefront of a widening battle over troubled mortgages.
Read on.
The bank lost a major procedural ruling in a lawsuit over its liability for allegedly toxic mortgages. The ruling will make it harder for the bank to defend itself in that case, and it could set a standard for similar disputes.
Bank of America had tried to set a high bar for plaintiff MBIA Insurance by requiring that the files for each of 368,000 or more disputed loans be evaluated individually. That process would have cost MBIA $75 million, and it would have taken a team of 24 people more than four years, MBIA estimated.
For the bank, it was "the next best thing to avoiding trial altogether," MBIA argued.
Instead, the New York State Supreme Court in late December declared that MBIA can pursue its case by focusing on a statistical sample of 6,000 disputed loans. That could pave the way for a trial to proceed as scheduled in 2011.
"It's a big setback" for Bank of America's "scorched-earth strategy," said David J. Grais, a lawyer involved in other suits against the bank.
MBIA still must prove its case, and "this we believe it cannot do," Bank of America spokesman Jerome F. Dubrowski said in a statement.
The MBIA case is at the forefront of a widening battle over troubled mortgages.
Read on.
Biloxi Buzz for Monday
Nearly 1 Million White House Visitor Records Online
As part of his commitment to transparency, President Obama ordered that White House visitor records be released. This White House has released more than 950,000 records to date.
Cuomo sworn in as NY governor, faces huge crises
Brazil's First Female President Sworn In
Sailors In Drag, Women Showering: Creator Of Raunchy Videos Made On U.S. Carrier Revealed
Martinez becomes NM gov as new year starts
Warren promotes Consumer Protection Bureau in Florida foreclosure hotspot
Last week's poll had asked:
The treaty requires the US and Russia to cut their deployed nuclear warheads by some 30%. Do you think the treaty goes far enough? There was a tie on answers: No and maybe. This week's poll is now up.
Cuomo sworn in as NY governor, faces huge crises
Brazil's First Female President Sworn In
Sailors In Drag, Women Showering: Creator Of Raunchy Videos Made On U.S. Carrier Revealed
Martinez becomes NM gov as new year startsWarren promotes Consumer Protection Bureau in Florida foreclosure hotspot
Last week's poll had asked:
The treaty requires the US and Russia to cut their deployed nuclear warheads by some 30%. Do you think the treaty goes far enough? There was a tie on answers: No and maybe. This week's poll is now up.
Why robo-signing are illegal in California and other non-judicial foreclosure states
Written by Biloxi
As banks are using the method of robo-signers to sign foreclosure affidavits in judicial foreclosure states like Florida to foreclosed on homes with a judge's nod in courts, less has been focused on whether robo-signing are legal in non-judicial foreclosure states. Michael Patrick Rooney, a lawyer in San Francisco, California, examines legal rights in California of robo-signing foreclosure affidavits and how robo-signing is illegal in the state of California. Mr. Rooney wrote:
Robo Signers are illegal in California because good title cannot be based on fraud, robo signed non judicial foreclosure sales are void as a matter of law, the documents are not able to be recorded in California if they are not notarized, which we know was often not done properly, and finally, because they robo signed forgeries ARE intended for judicial proceedings, including evictions and bankruptcy relief from stay motions.
Mr. Rooney cites a law case of a fraudulent transaction California law is settled. The Court in Trout v. Trout, (1934), 220 Cal. 652 at 656 where good title can't be based on fraud :
As banks are using the method of robo-signers to sign foreclosure affidavits in judicial foreclosure states like Florida to foreclosed on homes with a judge's nod in courts, less has been focused on whether robo-signing are legal in non-judicial foreclosure states. Michael Patrick Rooney, a lawyer in San Francisco, California, examines legal rights in California of robo-signing foreclosure affidavits and how robo-signing is illegal in the state of California. Mr. Rooney wrote:
Robo Signers are illegal in California because good title cannot be based on fraud, robo signed non judicial foreclosure sales are void as a matter of law, the documents are not able to be recorded in California if they are not notarized, which we know was often not done properly, and finally, because they robo signed forgeries ARE intended for judicial proceedings, including evictions and bankruptcy relief from stay motions.
Mr. Rooney cites a law case of a fraudulent transaction California law is settled. The Court in Trout v. Trout, (1934), 220 Cal. 652 at 656 where good title can't be based on fraud :
“Numerous authorities have established the rule that an instrument wholly void, such as an undelivered deed, a forged instrument, or a deed in blank, cannot be made the foundation of a good title, even under the equitable doctrine of bona fide purchase. Consequently, the fact that defendant Archer acted in good faith in dealing with persons who apparently held legal title, is not in itself sufficient basis for relief.” (Emphasis added, internal citations omitted).
In California Civil Code 2934a, requires that the beneficiary execute and notarize and record a substitution for a valid substitution of trustee to take effect. If the Assignment of Deed of Trust, the substitution of trustee, or the Notice of Default is robo-signed, the sale is void.
And here is an interesting nugget by Mr. Rooney on notarization of false signature:
In California, the reason these documents are notarized in the first place is because otherwise they will not be accepted by the County recorder. Moreover, a notary who helps commit real estate fraud is liable for $25,000 per offense.
Once the document is recorded, however, it is entitled to a "presumption of validity", which is what spurned the falsification trend in the first place. Civil Code section 2924.
Therefore, the notarization of a false signature not only constitutes fraud, but is every bit intended as part of a larger conspiracy to commit fraud on the court.
Finally, Mr. Rooney addresses that the necessary purpose of foreclosure affidavits are intended for court eviction proceedings. Mr. Rooney says "once these documents make it into court, the bank officers and lawyers become guilty of felonies." According to California Penal Code section 118:
(a) Every person who, having taken an oath that he or she will testify, declare, depose, or certify truly before any competent tribunal, officer, or person, in any of the cases in which the oath may by law of the State of California be administered, willfully and contrary to the oath, states as true any material matter which he or she knows to be false, and every person who testifies, declares, deposes, or certifies under penalty of perjury in any of the cases in which the testimony, declarations, depositions, or certification is permitted by law of the State of California under penalty of perjury and willfully states as true any material matter which he or she knows to be false, is guilty of perjury. This subdivision is applicable whether the statement, or the testimony, declaration, deposition, or certification is made or subscribed within or without the State of California.
The major banks should worry about how much they will have to pay in settlements of foreclosure fraud in the state of California because the incoming California Attorney General Kamala Harris may seek to sue banks on foreclosures.
And here is an interesting nugget by Mr. Rooney on notarization of false signature:
In California, the reason these documents are notarized in the first place is because otherwise they will not be accepted by the County recorder. Moreover, a notary who helps commit real estate fraud is liable for $25,000 per offense.
Once the document is recorded, however, it is entitled to a "presumption of validity", which is what spurned the falsification trend in the first place. Civil Code section 2924.
Therefore, the notarization of a false signature not only constitutes fraud, but is every bit intended as part of a larger conspiracy to commit fraud on the court.
Finally, Mr. Rooney addresses that the necessary purpose of foreclosure affidavits are intended for court eviction proceedings. Mr. Rooney says "once these documents make it into court, the bank officers and lawyers become guilty of felonies." According to California Penal Code section 118:
(a) Every person who, having taken an oath that he or she will testify, declare, depose, or certify truly before any competent tribunal, officer, or person, in any of the cases in which the oath may by law of the State of California be administered, willfully and contrary to the oath, states as true any material matter which he or she knows to be false, and every person who testifies, declares, deposes, or certifies under penalty of perjury in any of the cases in which the testimony, declarations, depositions, or certification is permitted by law of the State of California under penalty of perjury and willfully states as true any material matter which he or she knows to be false, is guilty of perjury. This subdivision is applicable whether the statement, or the testimony, declaration, deposition, or certification is made or subscribed within or without the State of California.
The major banks should worry about how much they will have to pay in settlements of foreclosure fraud in the state of California because the incoming California Attorney General Kamala Harris may seek to sue banks on foreclosures.
Deceased woman's name was robo-signed on thousands of affidavits
Written by Biloxi
When it rains, it pours for the banks. We are now learning that robo-signing was not just on foreclosure documents but also on debt collection in the credit card industry. But, this latest method of robo-signing is pretty low: Robo-signing a deceased individual's name. A credit card company, Providian (acquired by Washington Mutual in 2005 and now owned by JP Morgan Chase), had employees signing affidavits to delinquent borrowers in a deceased woman's name for over a decade. Here is the story.
Her name is Martha Kunkle. She had died in 1995. Ms. Kunkle's name was used by employees who worked with her daughter, Lorraine Kunkle, at the credit card company. Ms. Kunkle's signature later appeared on thousands of affidavits submitted by Portfolio Recovery Associates Inc. in lawsuits filed against borrowers.
In 2008, Judy Montoya, an employee at Portfolio Recovery Associates, testified in a debt-collection suit filed by the company that its “legal specialists” sign as many as 200 affidavits a day. The company’s spokeswoman said such employees sign an average of 100 affidavits a day and are guided by “a very rigorous set of policies and procedures.” Ms. Montoya couldn’t be reached to comment.
Questions about Martha Kunkle first popped up in 2008 after her name appeared in thousands of affidavits generated by a unit of Providian National Corp. The credit-card issuer sold an undisclosed number of delinquent account balances to Portfolio Recovery Associates and other debt collectors, which then sued the borrowers to collect the debt…..
Concerns about Ms. Kunkle’s affidavits were raised in 2008 by lawyers for Jeanie Cole, one of thousands of Montana residents sued by Portfolio Recovery Associates to collect debts. After failing to locate Ms. Kunkle, lawyers for Ms. Cole interviewed her daughter, who worked at Providian in a document-processing division.
The daughter testified in a deposition that other Providian employees used the name Martha Kunkle when signing affidavits. Along with other employees, the daughter was responsible for signing affidavits. After countersuing Portfolio Recovery Associates for alleged violations of the Fair Debt Collection Practices Act, Ms. Cole was the lead plaintiff in a 2008 federal-court suit in Montana alleging the company targeted 16,000 borrowers using “false and misleading” affidavits.
Minnesota's attorney general is investigating numerous buyers and collectors of consumer debt for falsifying affidavits. So the robo-signers allow financial firms such as banks and now credit card companies to skip a step that also served as a quality control on their procedures. How much of robo-signing at credit card companies have not even come to light?
From Wall Street Journal:
In 2008, Judy Montoya, an employee at Portfolio Recovery Associates, testified in a debt-collection suit filed by the company that its “legal specialists” sign as many as 200 affidavits a day. The company’s spokeswoman said such employees sign an average of 100 affidavits a day and are guided by “a very rigorous set of policies and procedures.” Ms. Montoya couldn’t be reached to comment.
Questions about Martha Kunkle first popped up in 2008 after her name appeared in thousands of affidavits generated by a unit of Providian National Corp. The credit-card issuer sold an undisclosed number of delinquent account balances to Portfolio Recovery Associates and other debt collectors, which then sued the borrowers to collect the debt…..
Concerns about Ms. Kunkle’s affidavits were raised in 2008 by lawyers for Jeanie Cole, one of thousands of Montana residents sued by Portfolio Recovery Associates to collect debts. After failing to locate Ms. Kunkle, lawyers for Ms. Cole interviewed her daughter, who worked at Providian in a document-processing division.
The daughter testified in a deposition that other Providian employees used the name Martha Kunkle when signing affidavits. Along with other employees, the daughter was responsible for signing affidavits. After countersuing Portfolio Recovery Associates for alleged violations of the Fair Debt Collection Practices Act, Ms. Cole was the lead plaintiff in a 2008 federal-court suit in Montana alleging the company targeted 16,000 borrowers using “false and misleading” affidavits.
Minnesota's attorney general is investigating numerous buyers and collectors of consumer debt for falsifying affidavits. So the robo-signers allow financial firms such as banks and credit card companies to skip a step that also served as a quality control on their procedures. How much of this sort of illegal practices of robo-signing at credit card companies has not even come to light? Well, there is one case to watch: Linda Almonte. Linda Almonte, a former JP Morgan Chase employee at Chase's credit card litigation department. Ms. Almonte filed a whistleblower complaint with the Securities and Exchange Commission against JP Morgan Chase of illegal practices involving its credit card debt processes including robo-signing. Ms. Almonte's lawyer, George Pressly wrote:
In 2008, Judy Montoya, an employee at Portfolio Recovery Associates, testified in a debt-collection suit filed by the company that its “legal specialists” sign as many as 200 affidavits a day. The company’s spokeswoman said such employees sign an average of 100 affidavits a day and are guided by “a very rigorous set of policies and procedures.” Ms. Montoya couldn’t be reached to comment.
Questions about Martha Kunkle first popped up in 2008 after her name appeared in thousands of affidavits generated by a unit of Providian National Corp. The credit-card issuer sold an undisclosed number of delinquent account balances to Portfolio Recovery Associates and other debt collectors, which then sued the borrowers to collect the debt…..
Concerns about Ms. Kunkle’s affidavits were raised in 2008 by lawyers for Jeanie Cole, one of thousands of Montana residents sued by Portfolio Recovery Associates to collect debts. After failing to locate Ms. Kunkle, lawyers for Ms. Cole interviewed her daughter, who worked at Providian in a document-processing division.
The daughter testified in a deposition that other Providian employees used the name Martha Kunkle when signing affidavits. Along with other employees, the daughter was responsible for signing affidavits. After countersuing Portfolio Recovery Associates for alleged violations of the Fair Debt Collection Practices Act, Ms. Cole was the lead plaintiff in a 2008 federal-court suit in Montana alleging the company targeted 16,000 borrowers using “false and misleading” affidavits.
Minnesota's attorney general is investigating numerous buyers and collectors of consumer debt for falsifying affidavits. So the robo-signers allow financial firms such as banks and credit card companies to skip a step that also served as a quality control on their procedures. How much of this sort of illegal practices of robo-signing at credit card companies has not even come to light? Well, there is one case to watch: Linda Almonte. Linda Almonte, a former JP Morgan Chase employee at Chase's credit card litigation department. Ms. Almonte filed a whistleblower complaint with the Securities and Exchange Commission against JP Morgan Chase of illegal practices involving its credit card debt processes including robo-signing. Ms. Almonte's lawyer, George Pressly wrote:
"On numerous occasions, Ms. Almonte witnessed these Affidavit Signers work through at times 3-feet tall stacks of Judgment Affidavits at once during weekly multi-hour long, non-related company meetings. The notaries were not present at these meetings. The Affidavit Signers simply relied on hourly workers to reconcile amounts owed and then treated the actual execution of the affidavits as busy work to be performed while the Affidavit Signers could focus on other matters."
It makes you wonder if any of the robo-signing affidavits in Ms. Almonte's lawsuit bares Martha Kunkle's signature.
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