More shoes are dropping on the foreclosure improprieties front. Let’s not forget the throughline: the parties in the securitization pipeline were so keen to rip out fees and maximize profits that they allotted too little in the way of expense dollars to executing tasks required both by statue and contractual agreements. The result was that they cut corners to such a degree (explained longer form here) that the trusts (the securitization entity) appear not to have been properly conveyed the notes (the borrower IOUs) on a widespread, if not pervasive basis. In 45 states is necessary for the party foreclosing to have the note to be able to foreclose. I’ve had attorneys tell me that when they have uncovered serious document shortcoming, the trustee’s response to the judge has been, “You can’t expect us to do that. We aren’t paid enough.” Funny, they apparently didn’t raise this issue when they signed up for the job.
The failure to transfer ownership properly creates fundamental problems under securitization processes. Bottom line is we’ve spoken to a lot of people, there seems to be no simple or even not so simple fix. Put it another way: why would law firms and servicers be engaging in widespread document fabrication and other improprieties if there were a straightforward remedy?
The latest reports: first, the Florida Bar News reports that a sampling of foreclosures in Florida’s kangaroo foreclosure courts found 20% “or more” had serious shortcomings:
As Florida courts struggle to whittle down a backlog of property foreclosure cases, some judges and lawyers involved in the process say shoddy paperwork filed on behalf of lenders is handicapping the effort….
But the 12th Circuit compiled some numbers from three weeks of its “rocket docket” for foreclosures in Manatee and Sarasota counties and found that 20 percent or more of the cases set for summary judgment had some procedural or paperwork problems.
Yves here. Note this remark appears to address merely the documentation filed by the trustee/servicer. It appears NOT to address judge rubber stamping foreclosures when the borrower may have other legitimate issues. For instance, we gave several examples of cases where the borrower was in the HAMP mod process, but somehow had gotten erroneously kicked into the foreclosure process. and neither the mills nor the judge were willing to halt the process. In addition, the Legislature is pushing the courts to speed up their bogus procedures:
“What’s irritating to me is frankly that the impression is from the Legislature is that the courts are not processing these quickly. Well, the courts can only process them as people comply with the rules,” said 12th Circuit Chief Judge Lee Haworth.
Alan Grayson’s office provided a particularly troubling example, that of a counterfeited court summons. It’s bad enough that servicers and foreclosure mills are making up securitization-related paperwork out of whole cloth, but now court documents to seize someone’s home? This is lawlessness. (View on ScribD)
Separately, CNBC today got word to JP Morgan admitting to problems similar to GMAC with “robo signers” providing improper affidavits. Note that so far, JPM is asserting contra GMAC, which notably was silent on this point, that the underlying facts that the robo signers affirmed were correct, but it is nevertheless delaying foreclosures as a result of this problem. Hat tip 4closurefraud:
If you don’t see the screen image (WordPress can be funny about embeds), view the video here.
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Bottom line is we’ve spoken to a lot of people, there seems to be no simple or even not so simple fix. Yves
What if the delinquent borrowers could somehow (magically) resume their payments? Wouldn’t that at least buy time to sort through this mess? So, are banks and others drug to the practical necessity of a debtor bailout if for no other reason than to buy time for themselves?
Well, anyway this is great fun to watch for someone who loathes the current banking model. Thanks Yves.
It is really lets make the title insurance companies do some work for their money. If you bought the property with owners title insurance, it will be the title insurance companies problem. It will solve the unemployment problem in the legal profession to boot, and allow a lot of retired judges to make some extra money.
This is ramping up nicely.
Gonna really get interesting when those who have already been foreclosed on start lawyering up.
“Put it another way: why would law firms and servicers be engaging in widespread document fabrication and other improprieties if there were a straightforward remedy?”
Money. Lots of money.
So the defrauded owners of the asset-backed securities don’t go out and get
Guns. Lots of guns.
http://www.youtube.com/watch?v=Y70vcs3oV14
Hmm! You think it could get down to that?
http://www.youtube.com/watch?v=cF-WeswkqXc&NR=1
:-)
It looks like it may, at least metaphorically, with the ratings agencies taking the first shots . . .
Fitch Considering Downgrading Servicers Over Affidavits
http://www.nakedcapitalism.com/2010/09/fitch-considering-downgrading-servicers-over-affidatits.html
Let’s get the word out on this one folks…
We are holding a fundraiser next month for this man.
Not only was he illegally evicted from the property he RENTED, (disabled vet)the stormtroopers that threw his belongings into the street STOLE the only valuables he had…
You can check out the details here…
http://4closurefraud.org/2010/09/19/now-i-am-pissed-disabled-vet-evicted-home-trashed-out-property-stolen-by-jack-booted-thugs/
I just pulled the entire file from the clerk of court and it gets even more disturbing than what I have already posted…
What stops them from doing it to you next?
So far, NOTHING.
Michael Redman
4closureFraud.org
Go down, Moses.
“Note that so far, JPM is asserting contra GMAC, which notably was silent on this point, that the underlying facts that the robo signers affirmed were correct, but it is nevertheless delaying foreclosures as a result of this problem.”
A little bit perjured. I don’t think the courts can give any ground on this. I’m even willing to concede provisionally that it’s “innocent” perjury – that the “underlying facts … were [overwhelmingly] correct.” But it’s still material to the cases processed by the courts. The affidavits falsely claim personal first-hand knowledge.
Back-end processing is an expensive [nuisance] aspect of the business, and a lot of corners can get cut (believe me, the large players excel at this). But not this one.
There’s no such thing as “innocent perjury.”
Lawyers have a separate obligation under the rules of professional responsibility to protect the integrity of their profession from evan an appearance of impropriety. If a client puts a lawyer in the position of engaging in conduct that would violate those rules, the lawyer should withdraw from representation. In this light, there’s no excuse for what the Florida lawyers have done. Every single perjuring lawyer should be disbarred.
You can find a couple of the more relevant Florida Rules of Professional Conduct here (4-3.1, 4-3.3, 4-8.4):
http://www.law.cornell.edu/ethics/fl/code/FL_CODE.HTM#Rule_4-3.1
http://www.law.cornell.edu/ethics/fl/code/FL_CODE.HTM#Rule_4-8.4
http://financialservices.house.gov/hearings/hearingDetails.aspx?newsid=1362
Mr. Michael J. Heid, Co-President of Wells Fargo Home Mortgage and Chairman of the Housing Policy Council of The Financial Services Roundtable
See his solution, the elimination of freddie and fannie, GSE being replaced by private lender owned entities and private secondary markets buying up the originated mortgages but on page 16 of his carefully crafted and thoroughly reasonable proposal to eliminate the role of government from banking, he requires a limited but necessary Federal Guarantee. Privatize the profits, socialize the risks. They act like nothing just happen, that people are still being foreclosed on is not an issue, the government is the problem, and the banks that had to bailed out get to run even more of the credit system, but with a taxpayer funded backstop.
Counterfeited court summons is a criminal act, corporate shield or not, correct?
Someone’s gotta go to jail here.
I’m not an American so maybe it is not my place to say, but America is looking more and more like a banana republic. Super rich bankers make billions tricking people into signing mortgages they can never pay back, pretty much buy up the government and then ignore the law when it comes to throwing people out of their houses. The article about the veteran who was thrown on the street and had his coin collection stolen by lawyers who had lied about who was occupying the house is pretty incredible if you think about it.
I really think America is pretty much doomed. These things don’t happen over night – although I think they will happen quicker than they used to on a historical scale – but America will be like India now with a handful of super-rich, a totally corrupt government, and the rest living in poverty. That is clearly the trend right now and once these trends are moving it is awfully difficult to stop them, especially when no one with any power or wealth wants them stopped.
“I’m not an American so maybe it is not my place to say, but America is looking more and more like a banana republic.”
Well I am an American, and unfortunately I have to say you’re right. Sometimes distance brings perspective.
A. Yes, you are right in that America more and more resembles a banana republic.
B. No, you are wrong in that it is not just America.
One solution (to get the banks and their legal representatives to behave): get the word out to potential buyers that for homes foreclosed upon in these circumstances, title will be suspect.
Actually if you buy an owners title policy, and it does not contain a restriction on the title re the foreclosure, then its the title insurance companies problem. They will hire the lawyers and see folks in court. At most they will pay the previous owner off, or give you your money back for the house. Either will take several years, but you are out no money in the process its why you paid the title policy in the first place.
Until the title insurers start going belly up. Minimum statutory capital seems to be $1 million in many states. For example, North American Title Insurance (California), sub of Lennar and one of the bigger companies in the sector, had total assets of $48 million at 12/31/05, the latest data I could find. Wouldn’t take long to blow through that sum.
“Until the title insurers start going belly up.”
Exactly. Then we’ll have yet another taxpayer bailout.
Yeah, I live in South Florida. This foreclosure stuff is the worst. My family prefers renting and the downside to this is of course that we have to move every year or two because of the owners of our houses going into foreclosure. It’s crazy.
the parties in the securitization pipeline were so keen to rip out fees and maximize profits that they allotted too little in the way of expense dollars to executing tasks required both by statue and contractual requirements. The result was that they cut corners to such a degree
One can always resort to outsourcing and off-shoring to lower costs.
http://www.floridabar.org/DIVCOM/JN/jnnews01.nsf/8c9f13012b96736985256aa900624829/99820fa6cbbdcacf852577a40066b13b!OpenDocument
“The Attorney General’s Office is also investigating whether the law firms have created affiliated companies outside the United States where the allegedly false documents are being prepared and then submitted to the law firms for use.”
According to news stories, problems have included backdated documents done with notary stamps that didn’t exist at the time the document was supposedly created.
This is clear counterfeiting, perjury and fraud.
“According to news stories, problems have included backdated documents done with notary stamps that didn’t exist at the time the document was supposedly created.”
How can this be anything but fraud?
Well evidently we’re going to see the infamous ‘Rotten Apple’ defense; that these guys were running short on time with all the foreclosures they patriotically took upon themselves to process and therefore couldn’t keep tract of all those people making up things to ease the process along.
The defense is one step removed from: “these are all dead-beats anyway, so it doesn’t matter what we say or do to relieve them of their ill-gotten gains”.
please keep in mind that virtually all of the FC’d debtors in these cases actually are in default on their notes. FC shenanigans by noteholders do not change that. while it is important for the noteholder to follow statute and the deed of trust in conducting the FC, in cases where they have not, i believe all that happens (at least in TX) is the FC is simply re-conducted. the debtor might thus get a little more time to cure the default, but i think that would be all. they are not going to be saved from FC.
I’m not all that sympathetic to many of the homeowners who are actually in default—not too much noise is made when people don’t make rent and get kicked to the curb, so why should we have peculiar sympathy for homeowners?—but if the banks can’t show the note, I don’t see why their liens shouldn’t be vacated.
After all, WTF are we paying the banksters for if they can’t even do basic goddamn paperwork?
Furthermore, lawyers complicit in these shenanigans should be disbarred for life. Though given the kid gloves treatment of professional folks like lawyers and doctors, that’s not likely.
I couldn’t agree more. This is the fact that never gets reported in the media. Let’s re-start every supposed “illegal” foreclosure and we will find that all we did was prolong the same end result. The majority of foreclosure actions are valid, legal, etc. Unfortunately, the general public has never been informed on the process within their own state and of course, is now being lead to believe by the media that they are all illegal. Sadly, the same loans in question are still “delinquent”, will most likely never be brought current, and will end up as a bank-owned property on the market. But now it’s being prolonged because of these allegations. Find the lenders who truly are in violation, but don’t damage the entire housing market more by making sweeping, dramatic charges.
I’ve been following this story, but I just don’t get it. I must be thick, but I don’t undertsand the financial incentives for the people pursuing these foreclosures.
Sure, I guess the laywers and the system skim off their fees, but what drives the desire to speed up the system and circumvent legal requirements? Is there some sense that the lender can recoup losses by kicking out the occupants and selling these properties? Don’t the lenders have a backlog of properties they can’t sell at depressed prices already? Why pile it on?
Is it that someone who doesn’t have the real title to the property can foreclose, sell, and pocket the “profit” before the real owner of the title figures it out?
Doesn’t the fact that the industry is sitting on a lot of distressed assets act as a counter-incentive to acquiring more by way of foreclosure? How does speeding up the whole process help any of the parties?
Anyone needing some investigative information regarding the following lenders, brokers, servicers, notaries …
Goldman Sachs
Litton Loan Servicing
HSBC
Fremont Investment and Loan
Marti Noriega
John Crandall
Brenda Mckinzy
Leigh Blackwell
Go to the link below
https://fdaaccount.box.net/shared/a1pjz9sz5c