Thursday, March 31, 2011

Banks to AGs on Servicing Fraud: Drop Dead - Credit Slips

from Credit Slips
There are lots of other points to criticize with this counterproposal, but it's hardly worthwhile doing so--it's such an obvious in-your-face document that it's really not worthwhile engaging with serious. This isn't the basis for a good faith discussion of mortgage servicing reform. It's simply another part of the banks' strategy to run the clock and thereby avoid doing principal reductions--that's what will cost them the big bucks, not a $20B fine.

read the full story here

Banks to AGs on Servicing Fraud: Drop Dead - Credit Slips Make big money in penny stocks today

ThinkProgress » After Congressional Progressives Ask ‘Where Are The Jobs?,’ GOP Rep. Biggert Says ‘Stop Talking About Jobs’

ThinkProgress » After Congressional Progressives Ask ‘Where Are The Jobs?,’ GOP Rep. Biggert Says ‘Stop Talking About Jobs’ Make big money in penny stocks today

GOPers Demand Sean Duffy Salary Tape Be Pulled From The Internet (VIDEO) | TPMDC

GOPers Demand Sean Duffy Salary Tape Be Pulled From The Internet (VIDEO) TPMDC what a fool !......any wonder he was on MTV real world. this guy is perfect for being a politician becuase he is so dam stupid. Make big money in penny stocks today

Nightly News stays mum on GE’s $0 tax bill - Yahoo! News

Nightly News stays mum on GE’s $0 tax bill - Yahoo! News Make big money in penny stocks today

The Subprime Shakeout: Federal Regulators Pick Fight with Banks Over Collapsed Credit Unions

The Subprime Shakeout: Federal Regulators Pick Fight with Banks Over Collapsed Credit Unions

The most interesting thing about the NCUA's efforts is their focus on misrepresentation. As I've noted, we're seeing a trend away from putback lawsuits and towards claims based on misrepresentations by issuing banks, such as Securities Act, Blue Sky and tort claims. Though plaintiffs originally shied away from alleging fraud or misrepresentation because they had little hard evidence to support such claims, significant revelations from discovery in ongoing litigation and testimony in federal investigations have exposed shenanigans in the loan buying and packaging business during the boom years of 2005-2008. In addition, as the recent holding in the FHLB of Pittsburgh case against JPM (analysis here and full order here) makes clear, less evidence is needed than previously thought to ensure the survival of misrepresentation claims.

In the NCUA's case, sources indicate that the reason the agency is banging the drum of misrepresentation rather than breach of rep and warranty is that it may not be able to overcome the significant procedural hurdles required to obtain standing. The NCUA, on its own, does not appear to hold at least 25% of the voting rights in many MBS trusts, meaning it would have to band together with other investors to pursue these claims. This is still a possibility, but until then, the NCUA is wise to pursue the more accessible Securities Act and Blue Sky claims.
Turning to the big picture, the WSJ article quotes Quinn Emanuel lawyer Jonathan Pickhardt as saying, "[t]here's plenty more litigation yet to come," and I tend to agree. The statute of limitations ("SOL") for federal securities claims is five years, while the SOL for rep and warranty contract claims under New York law is six years, meaning that claims on securities backed by 2005- and 2006-vintage loans will expire en masse by the end of this year. Should institutional investors fail to take action on these assets, despite the emergence of substantial evidence that these assets were misrepresented or defective, they could be exposed to breach of fiduciary duty claims by the pensioners, retirees and ordinary Americans whose funds they oversee.
Thus, I expect to see a significant number of MBS-related lawsuits hit the courts this year, including action by the Investor Syndicate, which has been ominously silent over the last few months. When that 800-lb gorilla finally begins beating its chest, Wall Street and institutional investors alike will be forced to sit up and take notice.
read the full article at the Subprime Shake out

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Matt Stoller: Comptroller of the Currency Orders National Banks to Cover Up Foreclosure Scandal « naked capitalism

Matt Stoller: Comptroller of the Currency Orders National Banks to Cover Up Foreclosure Scandal « naked capitalism

Friday, March 25, 2011

BofA to try again on dividend increase -

BofA to try again on dividend increase - Wow the Fed actually did something smart. After letting nearly all the TBTF banks increase their dividend eventhough they have been using smoke and mirrors accounting, they deny Bank of America. It is hard to believe the other banks have gotten to squander tax payer bailout money and then increase dividends before they have really proven they are even solvent. It is another government scam as they coddle the banks continually. Make big money in penny stocks today

Study: Young adults firm in faith, more likely fat by 50 - Faith & Reason

Interesting story here. Correlation between religion and obesity. Study: Young adults firm in faith, more likely fat by 50 - Faith & Reason

Wednesday, March 23, 2011

Breaking: Sen. Claire McCaskill, D-Mo., Failed to Pay $287,000 in Property Taxes on Aircraft | The Weekly Standard

Breaking: Sen. Claire McCaskill, D-Mo., Failed to Pay $287,000 in Property Taxes on Aircraft The Weekly Standard Make big money in penny stocks today

Attorney's scam the mediation system ripping off clients repeatedly

Attorney's seem to think they are smarter than everyone. I have not hired an attorney that lived up to their BS. This real estate meltdown is just another way for incompetent lawyers to take advantage of people who come to them expecting them to do something. It is a major scam because the lawyers from the banks come to mediation with no intention of doing anything and the majority of client lawyers just show up and do nothing more than mail a few documents.

Instead of doing their job, by looking at files and finding out if they can help a client during the consultation they gladly take 2500 and never speak to the client again until 5 minutes before their appearance and they then start lowering expectations by telling the client there is no chance at a modification.

There are thousands of cases exactly like this and the only reason lawyers get away with it it because they pretend being a lawyer is so difficult and that it takes some special genius to pass the bar exam.  This is complete propaganda and lawyers love it because they can charge ridiculous fees for simple cases that involve little or no law.  Often times a pro se defendant knows the case way better than their lawyer and cares a lot more too.  We have seen Nevada create a money farm for lawyers representing people in modification as they score thousands of dollars and most have never ever gotten a loan modification for their client.

How can I say this?  Well look at the numbers of loan modifications and then look at the number of people who have forked over 2500 to a lawyer who knows they will never do what it takes to get the job done.  It is a scam and the banks are in on it too. 
I have lost respect for 90% of the lawyers involved in real estate because they are taking advantage of a state mandated mediation process. They are doing mediation and they are representing clients, getting paid to do both and they lie from both sides of their mouth.
Lawyers are a lot like bankers and stock traders. They have created some mystic that they use to try and keep the people from realizing they are criminals and that being a lawyers takes no more brains that being a school teacher and in a lot of cases probably less.
We can see that our current president is a perfect example that law school is not a predictor of intelligence. From the looks of Washington it is a better predictor of narcissism and arrogance.
If you are ethical, and if you are doing your job, more power to you. The reality is that attorney's charge way too much for way to little with absolutely no accountability. they can totally suck and lose a case but they still get paid.
Does that sound Familiar? Bankers had the same freedom to totally suck and still get paid, still get bailed out by the taxpayer and still get million dollar bonuses after screwing the entire country.

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97% of All U.S. Mortgages are Backed by the Government → Washington's Blog

97% of All U.S. Mortgages are Backed by the Government → Washington's Blog Make big money in penny stocks today

Fannie and Freddie Hiding Over $100 Billion of Losses?

Fannie and Freddie Hiding Over $100 Billion of Losses?

Given the prevalence of PMI insurance, their thin capitalization, and the big wipeout in home values, they should be as dead as the monolines. But they aren’t. That’s because they are engaging in insurance fraud, namely, refusing to pay out legitimate claims.

And perversely, as Whalen tells us, they are getting quite a bit of help from Fannie and Freddie not making claim at all. Why not? Well, if the GSEs did put in claims, the PMIs would quickly go bust and Fannie and Freddie would report losses. So the failure to put in claims is yet another variant of “extend and pretend”. But in this case, there’s good reason to believe the numbers are very large:

Tuesday, March 22, 2011

Banks Blamed for Ills at Credit Unions

Banks Blamed for Ills at Credit Unions Make big money in penny stocks today

Costco drops Coke products in showdown over prices -

Costco drops Coke products in showdown over prices - Make big money in penny stocks today

US government turning into corruption machine

We are seeing it more and more everyday.  The government is becoming a virtual cesspool for criminal activity.  The current adminstration is behaving more like an organized crime ring that a government for the people by the people and of the people.  The Adminstration, along with banksters, seem unconcerned about any shady or underhanded activity.  It is as if they know they have immunity for anything they do to stick it to the American Middle class. 

Everyday they get more and more brazen.  Evidently they are lost in their own elitist world and beleive they can get a way with anything these days.  America voted in change they could believe in with the smooth talker who has never been a leader, never been challenged and extremely inexperienced.  We have seen lack of leadership and lack of direction since day one.  As we were suffering catastrophic job loss Obama pushed hard on health care instead of getting jobs for suffering people.  Whether you are for or against health care reform, it has to be a back seat to growing the economy and giving people jobs. 

Both the Republicans and democrats succeeding in destroying the American Dream of millions of Americans.  But that was not enough because now they are working on destroying the American dream for future generations and quite possibly for good. 

Here is a blurb from the full story at Naked Capitalism.  See below for link to the site. 
"Sleaze Watch:
NY Fed Official Responsible for AIG Loans Joins AIG As AIG Pushes Sweetheart Repurchase to NY Fed

The corruption in high places is getting more and more brazen with every passing day. The only thing that separates the US from conventional banana republic status is that no one leaves keys to new luxury cars on the desks of officials to secure their cooperation. It’s just not enough of an inducement to get anyone to take action.
Masaccio at FireDogLake was suitably outraged at this spectacle of a regulator getting a job with the biggest lobbying group in the industry he regulates…..and staying in his current oversight role:"
READ More on the Government Sleeze Factor Here at Naked Capitalism

find the scanner that can be your office assistant

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Monday, March 21, 2011

Wow Obama true to his words. War Monger. oh wait he didn't say that did he?

The Obama lies.  How he fooled so many voters. 

The country has become so shallow, What in the world would have led anyone to think Obama was qualified to be President? This is why we have so many liars and swindlers in Washington. Americans are tone deaf to criminals in three piece suits. The same reason people think it is ok for the banksters to still be running their companies, spending bailout funds on complete BS and ending up in the Administration as their next stop.

Neither party is better than the other, they are all self serving hacks. Being in Congress is a good GIG......I am sure not one of them ever cracks their wallet to pay for as much as a cup of coffee during their term.

We are seeing it so clearly now. First Obama schmoozed he way into the white house with absolutely no credentials, no business knowledge and a very limited if not down right stupid view on foreign policy.

And the joke that was the midterm elections that were again another call for change and now they all swim in the same cesspool.

If people don't wake up and snap out of their enjoyment of being screwed there is no chance for the little guy because the free market or even something close to a free market has been wiped out. It is a shame.

We see the biggest banks getting bigger, bitch slapping congress and Obama into submission.  We are a bank state with a more similarities with a dictatorial government than a true free market. 

I am all for free markets, however, if the American people are the only ones expected to pay the cost of the failings of the elites then I am not on that train.  We have seen Americans devastated, demoralized and left to support the bank bailout as they lose their jobs and take pay cuts.  It is disgusting.  

Sunday, March 20, 2011

Minnesota GOPers Want to Criminalize Poor People Carrying Money | AlterNet

What a phony headline! I read this and thought it might be something earth shattering that was being done so Minnesota government could have more control of the lower middle class but the title is just spin. The phrase about poor people is so misleading one would think it was another whiny Minnesota liberal considering standing up for the little guy. However, it is more spin politics because the story only refers to those people on assistance. The proposal says that people getting certain assistance from the government would not be allowed to have free use of any cash that they are given each month. The proposal included several ways the money could be used at special terminals that could be used to pay utility bills and other necessities.

How about a straw pole? How many people think people getting assistant from the government should be able to cash in the check and spend it exactly as they wish? Should it be used for cigarettes or alcohol, hair salon, video games, movies etc...........or should those in need be given assistance primarily for utilities, housing expense, food -not including cigarettes and alcohol? Any who thinks it is a crazy idea should volunteer to pay higher taxes that will directly go to those on public assistance in the form of spending money. I do believe no one should have to go hungry or without a roof over their head in this day and age. I think we can find whys to provide for those in need but I don't think it means giving them cash to spend if the system can be set up to directly fun utility bills, food, clothing, and housing. Most people know they must budget their checks and pay bills but it is not easy. But there is rampant abuse of public assistance that comes in the form of cash and it should be monitored more closely. The freedom to spend money as you wish is a privilege begotten by those who have generated income through some type of "work" or "value creation" that is valuable to others. It is not a right to have free access to cash when it is coming in the from of assistance.

 I am not disparaging those in need and I understand that things are very tough out there. It is a fact that people genuinely need help for their families. I just think there are ways to make sure people don't equate their assistance check with earning income and that they have a right to spend it however they choose.

We are fortunate to have a safety net in place for people that hit hard times and everyone certainly should be able to get help the need. But there has to be certain strings attached or we will be wasting millions of dollars on any number of things that we have no way to even track. It is important for the government to be able to make some assessment as to the efficacy of the money they pay out in assistance. The Minnesota proposal seems like it would be a great way to eliminate a lot of waste. If the funds can only be used at certain places and for certain things it will go a long way ensuring the money gets used to keep children and parents from going hungry.
Read the Minnesota story at the link below. 

Minnesota GOPers Want to Criminalize Poor People Carrying Money AlterNet

Saturday, March 19, 2011

Beware if your buying a short sale or Bank of American Foreclosure

This is an incredible story but considering what Bank of America has gotten away with lately it is par for the course. The government continues to fail the people and they continue to believe the banks are doing nothing wrong even though the banks are the owners of these servicing arms that are trampling on people's rights. The Banks will soon be parents to millions of illegitimate off spring because they are screwing everyone in the entire country.

Be careful buying a foreclosed home or short sale from the large banks or you might get a rude awakening.

naked capitalism Make big money in penny stocks today

The 1677 Statute of Frauds: History We Neglect at Our Peril

The 1677 Statute of Frauds: History We Neglect at Our Peril Make big money in penny stocks today

Government is failing the people by ignoring property law

It won't be title insurers because they will cave in if the banks are given a free pass. If the government twists their arm they will fold and insure everything just like they always have for a fee and then try to fight against any claims that happen later. They will have a huge fund set up to use to fight claims and a fund set up to pay claims. Just like a regular insurance company, they will delay and fight to not pay and when they get in over their heads they will come to the congress for a bailout. Congress will again fold and hand over billions thinking that they can't risk upsetting banks and mistakenly thinking they are saving the financial system as they kick home owners and property rights law one more time.

The government has failed the people horribly. It is not the America our fore fathers fought to establish. We are being dictated to by big money, big government, corporate lobby and a president so enamored with himself that he is afraid to do the right thing because his elitist lifestyle has made him unable to defy big money. They are his peeps. He has no idea what the real world is like and it is obvious by his behavior. I have seen no politician from either party really step up and stand up for the little guy or middle class Americans.

The transgressions can not be downplayed and for anyone in government to allow banking institutions to put the sacred rights of home ownerships and title chain has completely lost their sense of direction. We are once again powerless over large government as it runs out of control with the banks. If the system is so screwed up that no one will be able to prove they have ownership of property unless the current laws are thrown out the window---as they have done in Minnesota------we are no longer pretending to be a democratic republic and the lies will not hold. It is government for the government and banks, by the government and banks. We are people with no voice to be abused by the powers that be as they create huge gaps between rich and poor. They are killing any chance at the American dream not be getting involved but by standing back and stamping approvals on criminal and fraudulent activity.

I am getting more sick of it every day.

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Mers and Title Mess is an issue that likely will not go away

See the full Story here at Naked Capitalism Friday March 18, 2011

A few months ago, the Massachusetts Supreme Judicial Court issued its Ibanez decision, which made it clear that the banks’ foreclosure practices — and indeed, the standard securitization deal — violated longstanding basic Massachusetts real estate law, and thus, many completed Massachusetts foreclosures were invalid. The foreclosing banks, which had either since sold the properties or still “owned” them, had no right to foreclose, and therefore had never owned those properties. So who owns them now? Well, the fact that it’s a question is the very definition of “clouded title.”

Since it has been a couple of months since the Ibanez decision, I called a couple of large title insurance companies in the Boston area to see how title insurance for improperly foreclosed properties is being handled….

One agent called improperly foreclosed homes in Massachusetts “uninsurable.” Another explained that the problem underscored in the Ibanez case has been around for years, and that any title company would need to look at foreclosures dating at least until the late 1970s, when securitization became more common, to make sure no improper foreclosure had happened in all those years. And some properties, she noted, had been foreclosed on multiple times.

That agent did note that the problem was worst for properties improperly foreclosed on in recent years that were still bank-owned. Those properties were truly uninsurable. That’s because the bank couldn’t make a claim on the title insurance policy it had purchased when making the original loan, since it was the entity that clouded the title. Indeed, honoring that policy would be like letting a arsonist collect on fire insurance. Thus much of the current bank-owned inventory in Massachusetts is largely uninsurable and thus unsellable.

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Thursday, March 17, 2011

Mirabile Dictu! FDIC Suing Former WaMu CEO, Two Execs, for $900 Million

Mirabile Dictu! FDIC Suing Former WaMu CEO, Two Execs, for $900 Million Make big money in penny stocks today

Double Dip in Action? Banksters and Politicians collude to wipe out Middle class American Dream

 Read this comment on Naked Capitalism from Yesterday
Says a lot about what is actually going on in the country.  We have lost control of the country and it is no longer for the people.  We have created a new state that is for and by the banksters.  There is no way around it when you see the banks fictionalizing accounting and refusing to market their assets to market as the continue to throw homeowners under the bus. 

Terrible thing is no thinking individual now expects either the Democrat or Republican politicians to provide any feasible solutions to the economic problems since they’re all seem to be in thrall to the bankers who know diddly squat. It’s like you’re best option is to turn into Rip Van Winkle and take a 100 year nap and hope people will come to their senses during that period! Zzzzzzzz…….

I agree 100%.  What I find hard to believe is how many people actually think the politicians are going to help them or that the wall street elites are not trying this very moment to create another ponzi scheme so they can pillage and exploit the American people again and then as the tax payer for another bailout just as they have always done in the past.  I am so sick of seeing the general population be bitched slapped by the banksters and the congress who is sleeping with them.  We have allowed the American Dream to be destroyed as everyone has become hypnotized by wealth and fame.  Everyone thinks instant fame is better than anything and don't really care that working hard and doing the right things are no longer the way to wealth in America.   Crime certainly has paid well for banksters and politicians and now lawyers who have gotten in on the act pretending to be loan modification experts  so they can take advantage of un suspection home owners  with ridiculous fees and lies about their success ratios.  All this is being done with government blessing and the powers that be have even created a system that allows banksters and lawyers to conclude to rape the public.  The Nevada mediation system is rampant with lawyer and bankster abuse that all comes back to costing the homeowners thousands of dollars with no viable work out plans to stay in their homes. 

We are seeing the complete rape of the middle class in a America and the annihilation of the American Dream and the destruction of hundreds of years of precedent regarding home ownership and chain of title recording. 


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Wednesday, March 16, 2011

Levitin Addresses possible settlement with banksters

This article can been read in full at
Requiring servicers maximize NPV is just making explicit what is stated in most PSAs--that the servicer will manage the loan as if for its own account. That means maximizing NPV. Any corporation that isn't maximizing the NPV of its assets is committing waste. Business judgment rule means that there's a lot of leeway in determining what maximizes the value of a firm's assets, but the principle is inherent
If anything, we should be pushing much harder for principal reductions. At this point, it seems that every financial-related market has cleared except for housing.

Reality is that banksters are being allowed to hold back the recovery while they feed at the trough of the federal reserve.  It is a total scam by the banks and the government. 
Levitin goes on:
At this point if a buyer and seller can agree on a sale for $150,000 the transaction isn't going to happen because the bank won't take $150,000 on a $200,000 mortgage, even if the bank will only get $100,000 in foreclosure. By my estimates, banks denied around 200,000 short sales last year. The real impact was much greater, however, because realtors are refusing to handle short sales. Realtors only get paid if the sale closes, and they rightly see no point in putting in the effort to do a sale only to have it collapse because the bank refuses to sign off. Widespread denial of short-sales is chilling the entire short sale market.
So how is this market going to clear? It will clear via foreclosure sales, but that is the slowest, worst way we can do it, and robosigning and chain of title problems only make it a slower and less effective market clearing mechanism. Congress unfortunately took a pass on bankruptcy cramdown as a method for clearing the market, so that really only leaves voluntary principal reduction mods. (And remember, if the banks agree to buy peace with a settlement, any mods that occur thereunder would be voluntary). If Congressional Republicans and pundits have a better idea, I'm all ears. But I really can't believe that foreclosure sales are the best way for the market to clear. No one thinks that they are an efficient market mechanism.

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Tuesday, March 15, 2011

Dylan Ratigan: Rescue Choppers or Corporate Jets?

Dylan Ratigan: Rescue Choppers or Corporate Jets? Great story on just how much the banks have sucked out of our economy so they could pay billions in bonuses and travel around the world in their multi million dollar jets. All thanks to the American Tax Payer Make big money in penny stocks today

Where is the American Dream Now?

 I think there is no such thing as Main stream media, that actually covers the views of the main stream or main street anymore.  Everything is beholden to big money. I saw only one thing left for the little guy create some nice wealth starting from real estate, and now the tbtf banks and the government has managed to screw the American dream into the dirt.  But for some reason only a few people seem to give rip or even comprehend how much of a cash grab this entire meltdown has been......I am 44 and never thought I would see such blatant elitism and such great efforts to un level the already un level playing field.  They have to leave something for the middle class.  Something were people can have faith that hard work and persistence can get you the American Dream.  Anyone who has seen their real estate investments crushed-especially in vegas- by 60 % or more will have a hard time seeing any free market opportunity left.  Where does the little guy go?  Certainly not the stock market that is being manipulated more and more every year by the big money.  the one golden goose that was good for everyone is now gone, pillaged by Wall Street and TBTF banks.  Where is there a Field left where someone can start with nothing and get wealthy with very little cash out of pocket?  Real Estate was it, now buying a rental will be like getting your teeth pulled in your kitchen with a pair of won't easy and it probably will get messy.

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Monday, March 14, 2011

Bill Maher Tells Poor People: Stop Thinking the Rich are On Your Side « naked capitalism

Bill Maher Tells Poor People: Stop Thinking the Rich are On Your Side « naked capitalism Make big money in penny stocks today

“Anonymous” Whistleblower Charges BofA With Large Scale Force Placed Insurance Scheme With Cooperation of Servicers « naked capitalism

Ooh, this is ugly.

The charge made in this Anonymous release (via BankofAmericaSuck) is that Bank of America, through its wholly-owned subsidiary Balboa Insurance and the help of cooperating servicers, engaged in a mortgage borrower abuse called “force placed insurance”. This is absolutely 100% not kosher. Famed subprime servicer miscreant Fairbanks in 2003 signed a consent decree with the FTC and HUD over abuses that included forced placed insurance. The industry is well aware that this sort of thing is not permissible. (Note Balboa is due to be sold to QBE of Australia; I see that the definitive agreement was entered into on February 3 but do not see a press release saying that the sale has closed)

While the focus of ire may be Bank of America, let me stress that this sort of insurance really amounts to a scheme to fatten servicer margins. If this leak is accurate, the servicers at a minimum cooperated. If they got kickbacks, um, commissions, they are culpable and thus liable.

As we have stated repeatedly, servicers lose tons of money on portfolios with a high level of delinquencies and defaults. The example of Fairbanks, a standalone servicer who subprime portfolio got in trouble in 2002, is that servicers who are losing money start abusing customers and investors to restore profits. Fairbanks charged customers for force placed insurance and as part of its consent decree, paid large fines and fired its CEO (who was also fined).
full story here
“Anonymous” Whistleblower Charges BofA With Large Scale Force Placed Insurance Scheme With Cooperation of Servicers « naked capitalism Make big money in penny stocks today

BofA Offers to Help Fix Mortgages...If You're a State Legislator - DailyFinance

BofA offers to help fix mortgages for legislators...If You're a State Legislator  you are in the clear- DailyFinance

This is a great story that tells us a lot about just how the system works.  The banks have bought the politicians and have gone on a campaign to convince congress they are doing something by giving special treatment to congress members and their families.  I have to say it is a good move by the banks because they are working the system that loves to be worked.  However, it is a perfect example as to why all the homeowner complaints fall on deaf ears in Washington.  The people in congress want the special treatment because most of them are egotistical self absorbed power hungry people that easily justify the special treatment.  It is just another way to slap taxpayers in the face. 

Sunday, March 13, 2011

A Reason to Stop Banking with Wells Fargo « naked capitalism

A Reason to Stop Banking with Wells Fargo « naked capitalism

This is a great story and certainly lays out a great case for not banking with Well or with anyone TBTF bank. All the TBTF banks are full of hypocrites and liars who never get questioned by the media or the government. The scam that was called a bailout of AIG was a complete fleecing of the taxpayer to benefit all large banks including JP Morgan , BOFA, Wells, Goldman Sacs and on down the line. We bailed out the banks once and then lined their pockets with more cash when we bailed out AIG so they could pay all the CDS they over sold to the TBTF banks. Now the banksters won't even work with homeowners that want to stay in their homes and they say it wouldn't be fair. EXCUSE me! What was fair about the bailouts that every single major bank took, even the ones that said the "didn't need it" of course. The allowance of accounting trickery to let the banks survive and dump all the burden of capital losses on to the homeowners. Congress failed to stand up to the banks and now it looks like the AGs are going to let the banksters off the hook too.

Check out the Flip Pal Here

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Gretchen Morgenson Confirms Lack of Attorney General Investigations into Foreclosure Fraud « naked capitalism

Gretchen Morgenson Confirms Lack of Attorney General Investigations into Foreclosure Fraud « naked capitalism

Sunday, March 13, 2011

Gretchen Morgenson Confirms Lack of Attorney General Investigations into Foreclosure Fraud

This is the key snippet from Gretchen Morgenson’s New York Times column today, which inveighs against Iowa attorney general Tom Miller’s unseemly and peculiar haste to get a deal with miscreant banks inked:
Two people who have been briefed on the discussions, but who asked for anonymity because the deal was not final, told me last week that no witnesses had been interviewed and that the coalition had sent out just one request for documents — and it has not yet been answered.

And the official denial amounts to a confirmation:

Mr. Miller declined to be interviewed about the proposal. But Geoff Greenwood, his spokesman, disputed the notion that the attorneys general have done no investigation. “We have dealt with this issue for some three and a half years on a day-to-day, front-line basis with consumers,” he said. “We know what the problems are, and we know what needs to change.
Really? All you have is complaints to various AG offices, which I sincerely doubt have been investigated in a systematic manner. If they had been, we would have seen more wideranging action in more states by now. But all they have is accounts from irate homeowners, along with court cases and horror stories reported in the media. That’s self-reported sample, regularly dismissed by the banks as anecdotal and not consequential.

Read the full story Here

Wednesday, March 9, 2011

Banks Beef About Fraudclosure Settlement As Stocks Rise on the News « naked capitalism

Even though the banks are complaining like spoiled brats the government and the AG's have failed the people once again.  Most of the items in the new settlement proposal is merely clarification of what the servicers were supposed to do on there own.  I suppose we couldn't expect them to follow the law since there is no one or no entity willing to stand up to the banks and their underhanded and criminal tactics.

The administration is working hard to push the Ag's toward and easy and quick settlement that will releease the banks from any further penalties for the fraudclosure scandal.  It is really weak. 


Read the full story here.
Banks Beef About Fraudclosure Settlement As Stocks Rise on the News « naked capitalism

Tuesday, March 8, 2011

Privatization of Housing Finance System Creates Risk - Room for Debate -

Privatization of Housing Finance System Creates Risk - Room for Debate -

from article written by Adam levitin
Shielding consumers from housing finance risks is critical to economic stability. Consumer spending drives the economy, and home purchases are a large, undiversified investment for which there is no effective hedging strategy. A homeowner cannot hedge against home price decline on his home, and consumers, unlike financial institutions, cannot easily hedge interest rate risk.
Some members of Congress and the Treasury Department are contemplating privatizing the housing finance system. This is unfortunate because the private securitization market has never provided transparency of credit risk to investors and will not do so on its own.
As we examined in a study, the housing bubble and financial crisis stemmed from the private market’s oversupply of risky mortgage products through private securitization.

Read the full story here
Privatization of Housing Finance System Creates Risk - Room for Debate -

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“The 25 Best Financial Blogs” « naked capitalism

"The 25 Best Financial Blogs”
Time Magazine has come out with a list of Best Financial Blogs.  I am partial to Naked Capitalism.  Yves is excellent and extremely bright.  She knows the reality of Washington DC and Wall Street.  I think Naked Capitalism sets the standard for financial blogs.  
I also read Deal Breaker but not daily.  Naked Capitalism is a staple for anyone wanting to get excellent financial analysis that pulls no punches. 

Business Insider

Grasping Reality with a Sharp Beak




Paul Kedrosky

The Wealth Report


Naked Capitalism

Real Time Economics

Megan McArdle


Street Sweep

Free Exchange


The Big Picture

Zero Hedge

Planet Money

Ezra Klein

The Consumerist


Calculated Risk

Marginal Revolution

Felix Salmon

The Conscience of a Liberal


Monday, March 7, 2011

Many Foreclosures in Oregon Halted Due to Decisions Against MERS « naked capitalism

MERS was flawed at conception, those critics say. The bankers who midwifed its birth hired Covington & Burling, a prominent Washington law firm, to research their proposal. Covington produced a memo that offered assurances that MERS could operate legally nationwide. No one, however, conducted a state-by-state study of real estate laws.

“They didn’t do the deep homework,” said an official involved in those discussions who spoke on condition of anonymity because he has clients involved with MERS. “So as far as anyone can tell their real theory was: ‘If we can get everyone on board, no judge will want to upend something that is reasonable and sensible and would screw up 70 percent of loans.’ ”
Sales of hundreds of foreclosed homes in Oregon have been halted or withdrawn in recent weeks after federal judges repeatedly questioned their legality, according to a number of real estate attorneys in the state.

Lenders have withdrawn more than 300 foreclosure sales since February in Deschutes County alone, one of the Oregon area’s hardest hit by the housing collapse. About 130 of those notices were filed in the past week, attorneys say.

Dozens of foreclosure listings by ReconTrust Co., the foreclosure arm of Bank of America Corp., have disappeared from its website, attorneys say…

Since October, federal judges in five separate Oregon cases have halted foreclosures involving MERS, saying its participation caused lenders to violate the state’s recording law. Three of those decisions came last month, the key one in U.S. Bankruptcy Court in Eugene.

Attorneys say it’s not clear whether lenders in Oregon will simply start over or head to court to foreclose, steps that could prolong the crisis for months and drive up costs, attorneys say. Some suggest lenders might not have access to the documents they need to comply with state law.

“A lot of us are questioning whether there is a solution,” said David Ambrose, a Portland attorney who represents lenders in mortgage transactions. “It’s pretty amazing. There are a lot of unanswered questions.” ….
In Oregon, lenders can foreclose without going to court. But state law also requires that the loan’s ownership history, or assignments, be recorded with local county governments before proceeding with a nonjudicial foreclosure.

Many Foreclosures in Oregon Halted Due to Decisions Against MERS « naked capitalism

Sunday, March 6, 2011

A Liberal Is a Villager Who’s Been Screwed By a Mortgage Servicer | FDL News Desk

The past week has seen a pronounced evolution in the writing of Dana Milbank. Earlier in the week he severely criticized the incestuous relationship between the political and media culture in Washington – including engaging in a healthy dose of self-criticism – revealed by the Kurt Bardella email scandal. Where did this newfound self-awareness come from? Perhaps that can be explained by his latest piece. See, Milbank discovered that, regardless of his prominence in the DC journalism community or access to power, to the banks he was still nothing but a mark.
A Washington insider has a bank horror story .
Full story here
A Liberal Is a Villager Who’s Been Screwed By a Mortgage Servicer FDL News Desk

Saturday, March 5, 2011

MERS Must Read for all Home owners or those soon to be homeowners

Mortgage brokers hip deep in profits handed out no-doc mortgages to people with fictional incomes. Wall Street shopped bundles of those loans to investors, no matter how unappetizing the details. And federal regulators gave sleepy nods. That world largely collapsed under the weight of its improbabilities in 2008. But a piece of that world survives on Library Street in Reston, Va., where an obscure business, the MERS Corporation, claims to hold title to roughly half of all the home mortgages in the nation — an astonishing 60 million loans. Never heard of MERS? That’s fine with the mortgage banking industry—as MERS is starting to overheat and sputter. If its many detractors are correct, this private corporation, with a full-time staff of fewer than 50 employees, could turn out to be a very public problem for the mortgage industry. Judges, lawmakers, lawyers and housing experts are raising piercing questions about MERS, which stands for Mortgage Electronic Registration Systems, whose private mortgage registry has all but replaced the nation’s public land ownership records. Most questions boil down to this: How can MERS claim title to those mortgages, and foreclose on homeowners, when it has not invested a dollar in a single loan? And, more fundamentally: Given the evidence that many banks have cut corners and made colossal foreclosure mistakes, does anyone know who owns what or owes what to whom anymore? The answers have implications for all American homeowners, but particularly the millions struggling to save their homes from foreclosure. How the MERS story plays out could deal another blow to an ailing real estate market, even as the spring buying season gets under way. MERS has distanced itself from the dubious behavior of some of its members, and the company itself has not been accused of wrongdoing. But the legal challenges to MERS, its practices and its records are mounting. The Arkansas Supreme Court ruled last year that MERS could no longer file foreclosure proceedings there, because it does not actually make or service any loans. Last month in Utah, a local judge made the no-less-striking decision to let a homeowner rip up his mortgage and walk away debt-free. MERS had claimed ownership of the mortgage, but the judge did not recognize its legal standing. “The state court is attracted like a moth to the flame to the legal owner, and that isn’t MERS,” says Walter T. Keane, the Salt Lake City lawyer who represented the homeowner in that case. And, on Long Island, a federal bankruptcy judge ruled in February that MERS could no longer act as an “agent” for the owners of mortgage notes. He acknowledged that his decision could erode the foundation of the mortgage business. But this, Judge Robert E Grossman said, was not his fault. “This court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country,” he wrote, “that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law.” With MERS under scrutiny, its chief executive, R. K. Arnold, who had been with the company since its founding in 1995, resigned earlier this year. A BIRTH certificate, a marriage license, a death certificate: these public documents note many life milestones. For generations of Americans, public mortgage documents, often logged in longhand down at the county records office, provided a clear indication of home ownership. But by the 1990s, the centuries-old system of land records was showing its age. Many county clerk’s offices looked like something out of Dickens, with mortgage papers stacked high. Some clerks had fallen two years behind in recording mortgages. For a mortgage banking industry in a hurry, this represented money lost. Most banks no longer hold onto mortgages until loans are paid off. Instead, they sell the loans to Wall Street, which bundles them into investments through a process known as securitization.
Finally a Main Stream Media outlet uncovering the issues with MERS that is not trying to justify all the wrong doing by the Banks and the mortgage industry.  MERS is a sham and the bank servicers have been acting like loose cannons.  The Banks took it upon themselves to speed up the title recording process so they never had to pay billions in fees to record record ownership with the county clerks.  It was as if they just decided to throw a few hundred years of land, title and real estate law out the window because they wanted to make more money.  They did this without any concern for homeowners, the economy or the real estate market.  It was done out of greed and the banks incredibly stupid behavior that smacks of hubris and an above the law mentality. 

Read the Full Story Here.  MERS, the Mortgage Holder You Might Not Know -

Friday, March 4, 2011

Democracy, Free Market? Not Here thank you congress

I don't think there is any question that free markets and democracy are more fantasy than reality. There is no free market even in "democracy" when the representatives of the people are criminals themselves. The lust for power and money drives politicians and they have no concept of the real world. Our economy is no more a free market than was the Soviet Union in the 1970's.  Our congress sits back and watches banksters collapse our economy and then hand them a key to the federal reserve, leaving homeowners the only party to to take major losses.  The politicians and banksters thought it was convenient to make the middle class suffer the losses so they all could live high off the hog. Examples:  Jamie Dimon ridiculous multi million dollar salary, V Pandit still in charge of city, the revolving door at Wells.....the Country Wide BOA scham ....etc

We have been dooped by the politicians again. what ever HAPPENED TO THE NEW BLOOD coming

 into congress that would clean up the system and hold the banks accountable?
Oh sorry forgot we can never believe a bit of dither coming out of the mouth's of those on the hill.

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Head of World's Largest Asset Manager: "Markets Like Totalitarian Governments" → Washington's Blog

Blackrock is the world's largest investment manager.
As Wikipedia notes:
BlackRock is the largest global investment management firm headquartered in New York City. It is one of the most prominent financial institutions in the US. The company acquired Barclays Global Investors in December 2009 under the BlackRock name, making it the largest money manager in the world.
But BlackRock isn't just the largest money manager ... it is also the larges asset manager in the world.
As Wikipeda notes:
As of December 31, 2010, BlackRock’s assets under management total $3.56 trillion across equity, fixed income, alternative investments, real estate, risk management, and advisory strategies. Through BlackRock Solutions, it offers risk management, strategic advisory, and enterprise investment system services to a broad base of clients with portfolios totaling approximately $9 trillion.
And see this and this.
So it is stunning that Blackrock's Chairman and CEO - Larry Fink - said on Bloomberg TV
Markets like totalitarian governments.

Read full story here:  Head of World's Largest Asset Manager: "Markets Like Totalitarian Governments" → Washington's Blog Make big money in penny stocks today


The Bizarre Mortgage “Settlement” Negotiations

Full Story here: The Bizarre Mortgage “Settlement” Negotiations 1. There has not been anything even remotely resembling an investigation. As we have said earlier, the eight week Federal exam was a joke. As Adam Levitin noted: …we don’t actually have a tally of servicer malfeasance. Neither the AGs nor the federal regulators have done the sort of investigation necessary to really know the full extent of servicer wrong-doings. Servicers might downplay the harms, but we just don’t know. This isn’t just robosigning. The banks forfeited their ability to make the “trust me” argument some point in fall of 2008. How can you possibly settle when you don’t know the extent of the abuses? Yes, I know this is intended to be a whitewash, but in the stress tests, the Administration engaged in a lot of persuasive-looking theatrics to somewhat disguise the fact that the end result was pre-determined. This time, they aren’t even bothering to make the cover-up look credible. This is yet another sign of how the banks are effectively beyond the reach of the law. 2. The fact that the AGs and the Federal regulators have joined forces is another sign that no one has the guts to administer anything more than a slap on the wrist relative to the damage done. I should have realized Tom Miller, the Iowa AG who is acting as the leader of the AG effort, when he spoke warmly of the cooperation he was getting from Treasury in Congressional hearing last November. The state and Federal issues are very different. It is one thing to coordinate, another to combine forces. The reason a joint effort is less powerful is that each group has the ability independently to do considerable damage to the banks. An effort with participants this disparate (the 50 AGs already have divisions within the group as to how tough to be on the banks, as do the Federal regulators) almost assures lowest common denominator, meaning less ambitious, demands. 3. The latest sign of the weak stance being taken by the supposed enforcers is that they have offered an outline of standards separate from an economic deal. Make big money in penny stocks today

GSE 2.0 Scare Tactics: False Claim That No Government Guarantee = No Thirty-Year Mortgage

The propaganda strategy for selling the public on the creation of supposedly new improved GSEs is becoming more apparent. Recall that we had an initial skirmish a month ago, when the Center for American Progress published a plan to reform Fannie/Freddie and the housing finance system. It would create an FDIC-like insurance fund to stand behind private Fannie/Freddie like entities that will offer reinsurance with an explicit Federal guarantee on mortgage-backed securities. These new firms can also be controlled by banks. This plan, which was very similar to ones presented by the Mortgage Bankers Association, the Federal Reserve and the New York Fed, t was clearly an Administration trial balloon; the CAP is the mainstream Democrat think-tank, with close ties to Team Obama. But after the CAP proposal got some resistance, the Treasury’s report, which came later in the month, went the route of presenting three alternatives rather than a specific plan. But we argued at the time that this seeming change was merely a tactical move, to present the Administration as fair brokers in a politically fraught process, and that it still favored what we called the GSE 2.0 plan. We think the idea of reconstituting the GSEs in somewhat improved form a terrible idea because it preserves the bad incentives of a public/private system and launders housing market subsidies in an inefficient and unaccountable way through the banking industry (see here and here for more detailed discussions).
read the full article
GSE 2.0 Scare Tactics: False Claim That No Government Guarantee = No Thirty-Year Mortgage

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Is the Foreclosure Fraud Settlement Overbroad? - Credit Slips

There are a lot of problems with this line of argumentation. First, we don't actually have a tally of servicer malfeasance. Neither the AGs nor the federal regulators have done the sort of investigation necessary to really know the full extent of servicer wrong-doings. Servicers might downplay the harms, but we just don't know. This isn't just robosigning. The banks forfeited their ability to make the "trust me" argument some point in fall of 2008. Second, even if few homeowners themselves were actually harmed, mortgage servicer malfeasance, such as robosigning has done tremendous harm to the legal system and to the housing finance system. Banks shoddy mortgage underwriting and then complete inability to handle the resulting foreclosure tsunami has already deeply eroded confidence in our financial system, which has forstalled economic recovery. That's a harm to everyone in America. Finding out that our largest financial institutions have been at best cavalier about the law and at worst criminal in their handling of foreclosures can hardly be helping the economy recover. Full story here Is the Foreclosure Fraud Settlement Overbroad? - Credit Slips Make big money in penny stocks today

Former Goldman Sachs Board Member Accused Of Insider Trading

Former Goldman Sachs Board Member Accused Of Insider Trading Make big money in penny stocks today

Poll Results Show 75% Of Wall Street Lies At Least Half The Time

Surprise Surprise!! Poll Results Show 75% Of Wall Street Lies At Least Half The Time

Thursday, March 3, 2011

Another County Seeking to Collect Unpaid Recording Fees From MERS

Another county seeking recording fees from MERS, from Naked Capitialism

I must confess I get a perverse sense of satisfaction from watching MERS suffering pushback on a variety of fronts. The latest, as we mentioned a few weeks ago, is the prospect of litigation by various local governments asserting the right to the recording fees that the MERS system bypassed. The press release below is from the Guilford County Register of Deeds in North Carolina. As you can see, he is exploring the county’s options for recouping recording fees he believes that MERS owe to Guilford County, to the tune of $1.3 million (hat tip Lisa Epstein via ForeclosureFraud). I particularly like this sentence: “Do we want land records in America to be governed by major banking conglomerates on Wall Street or the people and laws of the United States of America?” As we have indicated, MERS is far from a deep pockets target. And no one has yet filed a lawsuit; litigation is an expensive proposition for both parties. You could easily see the county spending more that it could possibly collect in legal costs. The real question is whether a clever lawyer can find a legal theory that would allow the local governments to sue not just MERS but one of the parties that benefitted from the MERS process, presumably the sponsors. And then you’d need to file it on a class action basis so that the legal cost divided over a large number of plaintiffs would still allow for reasonable recoveries.
 Another County Seeking to Collect Unpaid Recording Fees From MERS

ADF Scanner that organizes as it scans. 

Wednesday, March 2, 2011

Judges accused of 'predetermining' foreclosure cases - News -

Judges accused of 'predetermining' foreclosure cases - News -
 "The threshold is minimal," he said. Lenders must follow two rules: Bring all required loan documents to the mediation; have someone available who can approve loan adjustments. Hafter argues failure to follow either rule is sufficient for such a finding. While the mediator found the lender failed to comply with the law, Mosley did not make a bad faith finding. UNLV's McAffee believes the judge might have engaged in judicial activism in making that determination. 'So much power' "It's bad policy to give a judge so much power," McAffee said of loan modifications. "But to just say you're not going to because it would be too big a hassle is certainly not at all deferential to the Legislature. I think it's judicial activism when a judge says, 'I don't like it. So I'm just not going to do it.' "
I wonder what the legislature will do when they hear of a judge being so biased.  The judge is actually perpetuating the problem that mediation was meant to fix. 
Lawmakers created the Nevada Foreclosure Mediation Program in 2009 and tasked the Supreme Court with implementing and managing the program, which continues to evolve.

The high court has tweaked the rules several times. The latest changes were announced Wednesday following a recent public hearing.
The new rules expand the time allowed to file for a judicial review of a failed mediation from 15 to 30 days. They give homeowners more control over their mediator and allow them to hire attorneys to represent them at mediations
The endgame is to keep people in their homes -- and able to pay the mortgage.
Sounds like a great plan but the banks and lawyers are abusing the system to take even greater advantage of homeowners.  The Lawyers are running over the mediators and pushing them around at will.  The proper documents are not being shown to the home owner or the mediator and the lawyers for the home owner collect 2500 for an hour of work regardless of the conclusion. 

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BAC, Countrywide v Stenz Motion to Dismiss Granted – “A thief who steals a check payable to bearer becomes the holder of the check… but does not become the owner of it.” « Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge

BAC, Countrywide v Stenz Motion to Dismiss Granted – “A thief who steals a check payable to bearer becomes the holder of the check… but does not become the owner of it.” « Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge

Banks need to reduce loan balances


The majority of loans have been picked up for pennies on the dollar with government and tax payer funds being used….the funds that were to remove toxic assets from balance sheets so we could avoid the additional drop in real estate.

IF you want free market then take back all the bailout money and then talk about not forcing banks to do anything. When taxpayers rescue the banks the banks should be given a few guidelines and requirements. I am sick of the free market BS that also is for the banks and traders to pillage every part of the economy with no recourse. We don’t have a free market and the government has failed us in its duty to at least protect the citizens against repeated rape by the financial institutions.

The banks are above the law and until someone lays down the law on them they will forever be taking our money whenever they create some new crap system that makes them billions and ruins the economy for 10 years. Once again congress will cave and the banks will laugh all the way to vault. So the banks need direction and if you want to see it as forced so be it but they have ruined many a retirement fund and college funds while making obscene profits.

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How this $83 fountain pen helped save a family home from foreclosure — The Florida Foreclosure Fraud Weblog

How this $83 fountain pen helped save a family home from foreclosure — The Florida Foreclosure Fraud Weblog Make big money in penny stocks today


MERS IS BEING HAD BY ITS MEMBERS Make big money in penny stocks today

Megan McArdle Uses Straw Men to Argue Against Principal Mods

Megan McArdle Uses Straw Men to Argue Against Principal Mods
Megan McArdle has a post up discussing why she thinks the benefits of principal mods would be “at best small and mixed”. The problem with her lengthy discussion is that it is rife with straw men. Before we get to the nitty gritty, I want address two bits of framing at the top which I found troubling. The first was the title, “Principal Write-Downs Still Popular With Wonks”. The “still” suggests that wonks like it even though some, presumably most, yet to be named others don’t. And singling out “wonks” further implies that (aside from homeowners) they may be its only fans. That is very misleading. Who is in favor of mods? The only people who under normal circumstances ought to have a vote on this matter, namely, the borrowers and the lenders. First mortgage lenders overwhelmingly favor mods to borrowers with who still have a viable income. Why? Do the math: Foreclosures are now running loss severities of 70% or higher. “Loss severity” means “loss as a percent of principal balance”, and it almost always is stated in terms of the original principal balance. So foreclosures result in really big losses. And this is only going to get worse: –More borrowers are challenging foreclosures based on standing – More judges are sympathetic to borrower arguments, so cases go more rounds and incur more costs – Housing values are still falling in most localities; the overhang of foreclosure inventory only makes it worse – Banks are destroying value of REO with failure to secure and maintain properties (a lot of reports on this, with very large falls in value) Investors would take 30-50% writedowns for borrowers with adequate income all day. This is a complete no brainer. The only investors who’d be against it are the ones holding tranches that are effectively interest only, the bottom tranche still getting payments. These are generally a small percent of value of the deal and often bought by speculators. The prototype of this sort of investor is Carrington Mortgage. It was affiliated with New Century and is now servicing many of their loans. They have been making out like thieves by as owners of the residual or low rated tranches by buying the for pennies on the dollar, and then delaying foreclosures and the recognition of principal loss, allowing them to collect much more in interest payments. The reason policy bottom fishers can have undue influence is that mortgage securitizations are what Anna Gelpern and Adam Levitin have called “Frankenstein contracts.” They are effectively “immutable contracts” and the authors make clear why this is a disastrous development. Tom Adams elaborates as to why these rigid contracts aren’t working now: Regarding securitizations being contractually flawed: one reason this is so, under the current environment: securitization relied in part on issuers having skin in the game either through an investment in the residual (while retaining the servicing rights) or through the desire for continued access to the capital markets. Since most of these issuers/lenders have blown up and the residuals have long since been written down to zero, these incentives no longer work to keep servicers honest. In addition, servicing is now light years more expensive than anyone ever thought it could be, so the servicers now have a huge, new incentive to recoup costs or pass the costs along to another party, such as the investors or homeowners. This is exactly the same set of circumstances that got Fairbanks to engage in widespread abuses that got it into trouble with the FTC – since they were a stand alone servicer of distressed loans and were unable to cover the costs of running their business from their fees. This takes us to the second bit of framing in the piece, which again occurs at the top. McArdle quotes Tyler Cowen (a designated wonk, we presume) as making the best case for principal mods. Huh? It’s not much of a “pro” case: it starts with a rant about how principal mods are “WRONG” and “terrible for the long run rule of law” and “EVIL” and “UNFAIR” (in fairness, McArdle says she does not think principal mods are “particularly evil”). Gee, Mrs. Lincoln, and aside from that, how was the play? Now I must confess I do not read McArdle and Cowen often enough to be certain, so readers should correct me if I am wrong, but I strongly suspect their concerns about the rule of law were and are notably absent when the idea of modifying other types of contracts, like union pension agreements, comes up. Or when banks fabricate documents when they have trouble proving standing (one of numerous examples: a bank produced two different purported “wet ink” signature, meaning original, borrower notes, hat tip Lisa Epstein). Now if those who raise the rule of law question were consistent about it, they’d also be up in arms about foreclosure fraud, bogus servicer charges (as we’ve indicated repeatedly, a much bigger culprit than is widely acknowledged), the lack of meaningful punishments for Wall Street executives and key profit center managers (or more generally, that banking has now become institutionalized looting as described by Akerlof and Romer). The societal fish tends to rot from the head, and worrying about a prospective breakdown of morality among little people seems awfully misplaced when we have numerous actual and likely examples among their betters. The fact is that modifying contracts is normal. Period. Before the era of securitization, when banks were lenders, they would routinely modify a mortgage if the borrower still had a predictable income that was not insanely below his former income level (or if he’d had a crisis, like a medical emergency, and they needed to figure out how to accommodate a new level of expenses). And they were even modifying them in the era of securitization. At the 2008 Milken conference, Lew Ranieri, the father of mortgage backed securities, was stunned to learn that servicers were not doing mods and using the contracts as excuses. He said they always did mods in his day. When a loan goes bad, the first thing a creditor looks into is a debt restructuring. Half a loan is always better than none. It’s funny that a non-wonk like Wilbur Ross, who is the antithesis of a charity or a borrower advocate, is a fan of deep principal mods. And we are told that banking turnaround expert and investors Chris Flowers in IndyMac has developed an effective template for principal mods. Now let us get to the straw men. The first is the argument that the mods in the past haven’t done well. Again, what mods is she looking at? HAMP is not a valid sample, for a whole bunch of reasons: borrowers told they’d were getting a mod, then hit with all sort of late and payment make-up fees; repeated loss of documentation by the bank, which was often instead described as the borrower not meeting program standards; borrowers incorrectly told to default to qualify; bad incentives in program design (the formula favored borrowers who were deeply underwater, yet offered only five year payment reduction mods). You can only look to examples of deep principal mods to reach conclusions about the success of deep principal mods. And the admittedly limited number of current practitioners, plus the historical record, suggest that actually the results ain’t so bad. The second straw man is the idea that mods will reduce the availability of mortgages. In case she hasn’t noticed, the non-government-guaranteed mortgage market is just about dead. And one big reason in many areas of the country is the overhang of foreclosures, both ones in process but not completed, and anticipated foreclosures. Foreclosures continued to drive prices down, hurting both delinquent and current borrowers. No lender wants to risk catching the safe of falling real estate values. In addition, all sorts of other credit products are routinely written down, from car loans to commercial real estates to credit cards. Another straw man is her assumed 20% reduction assumption, which she estimates will have too small an impact on household budgets to make a difference. As I indicated earlier, a figure double that level will still leave investors considerably better off than foreclosures. Moreover, the mod levels discussed are usually of first mortgages. A second lien on a deeply underwater house should be written off (they would be wiped out in a foreclosure). But instead, because the second lien holder often blocks a mod on the first. So a regime that forced seconds to recognize economic losses would also result in greater payment reductions for some borrowers than just the level of the mod of the first. She finally assumes a Chapter 13 bankruptcy regime as the only way to push this sort of program through. Why? Adam Levitin was involved in presenting an idea to the officialdom called Chapter M, which would provide for principal write-downs as part of a streamlined, mortgage-only bankruptcy process. The key points: Create a special prepackaged, streamlined mortgage bankruptcy chapter that does not affect non-mortgage debt. All foreclosure actions are automatically removed from state court to federal bankruptcy court. The foreclosure is adjudicated in federal bankruptcy court under standardized, streamlined procedures. Homeowner and lender both required to make evidentiary showings: homeowner must document ability to pay; lender must document title to note and mortgage, but with validity of securitization transfers conclusively presumed. Limited rights of appeal. If homeowner is willing and able to pay, then homeowner keeps the house. Fresh appraisal done by court-appointed appraiser. Lender chooses between an FHA short-refi with principal reduced to [90]% of LTV or a standardized loan modification with principal reduced to 100% LTV and loan restructured to 30-year fixed-rate, full amortization, market interest rate adjusted to ensure maximum [31]% DTI ratio), with 50% risk-weighting for modified loans. Court validates lenders’ title to mortgage. Junior liens exceeding LTV cut-offs are eliminated If the homeowner redefaults, an expedited, standardized federal foreclosure procedure is used ([45] days to sale), with limited defenses and clear title imparted by sale by bankruptcy trustee. If homeowner does not qualify, lender gets same fast-tracked federal foreclosure and quiet title coming out of the foreclosure sale. If lender cannot show title, homeowner gets quiet title to property. In all situations, the homeowner’s non-mortgage debts “ride-thru” the Chapter M bankruptcy, unaffected, but the homeowner could also file for a traditional Chapter 7 or 13 bankruptcy to address those debts. The last reason her Chapter 13 issues are a straw man is that the existence of a regime that could impose principal writedowns will force servicers to the negotiating table. You see analogous behavior on credit cards. If a borrower gets an attorney or accountant involved in the conversation with the bank (so that a professional is effectively vouching for the borrower representations regarding his income and assets), the bank gets the message that the customer can and just might file for Chapter 7 or 13; and the bank won’t get much, plus it will be faced with court costs and delays. The thread of bankruptcy makes the bank much more willing to negotiate. In the HAMP program, the Treasury tried to promote mods by offering carrots to the banks; the result was horseshit. It seems clear that a few sticks are now required.

Tuesday, March 1, 2011

Does MERS Registration and Mortgage Fractionalization Extinguish Mortgage Rights?

Does MERS Registration and Mortgage Fractionalization Extinguish Mortgage Rights? Make big money in penny stocks today


FDN’S JEFF BARNES, ESQ. ADMITTED PRO HAC VICE IN MICHIGAN; CONGRESSIONAL OVERSIGHT REPORT HIGHLIGHTS ILLEGALITY OF ASSIGNMENTS OF MORTGAGE LOANS TO TRUSTS WITHOUT COMPLIANCE WITH POOLING & SERVICING AGREEMENTS FDN’s Jeff Barnes, Esq. has been admitted to the Washetnaw County, Michigan Circuit Court pro hac vice in connection with defense of a foreclosure involving a securitization. He is assisted by local Michigan counsel James Fraser, Esq. On the subject of securitization, we have obtained a copy of the November 16, 2010 Congressional Oversight Panel’s Report examining the consequences of mortgage irregularities.

The 127 page report discusses assignments, MERS, the problems with “robo-signers” and other document infirmities. We find very significant the matters on page 19 of the Report, which state as follows regarding assignment of mortgage loans to a securitized mortgage loan trust: “As described above, in order to convey good title into the trust and provide the trust with both good title to the collateral and the income from the mortgages, each transfer in this process required particular steps. Most PSAs [Pooling and Servicing Agreements] are governed by New York law and create trusts governed by New York law. New York trust law requires strict compliance with the trust documents; any transaction by the trust that is in contravention to the trust documents is void, meaning that the transfer cannot actually take place as a matter of law [citing relevant provision of NY Estate Powers and Trust Law section]. Therefore, if the transfer of the notes and mortgages did not comply with the PSA, the transfer would be void, and the assets would not have been transferred to the trust. PSAs generally require that the loans transferred to the trust not be in default, which would prevent the transfer of any non-performing loans to the trust now. Furthermore, PSAs frequently have timeliness requirements regarding the transfer in order to ensure that the trusts qualify for favored tax treatment.” This is what we have been arguing for years: that purported transfers of toxic, non-performing mortgage loans into a trust beyond the trust closing date and without strictly complying with the mortgage loan conveyance proviions of the PSA are void and of no force and effect, regardless of who attempts to make the transfer (e.g. MERS, who cannot make the transfer in any event for other reasons). The United States Congress has confirmed this. Perhaps more members of the Judiciary will ultimately come to the same conclusion.

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HSBC Bank USA and HSBC Finance Corp. have halted all foreclosures until further notice, and may be faced with regulatory actions, fines, and penalties arising out of “certain deficiencies” in foreclosure procedures and mortgage loan servicing. The information was buried deep within HSBC’s 10-K report filed with the Securities and Exchange Commission. HSBC said it will be substantially addressing noted deficiencies in its foreclosure processes and will “correct documentation and refile affidavits where necessary” in the wake of issues involving robo-signing and other irregularities.

Here is the main point of the argrument against the banks.  It is been ignored by the main stream media and the Washington. 
The issue here, obviously, is not HSBC “correcting” anything: it is that HSBC, like others such as Wells Fargo, Bank of America, and JPMorgan Chase, have finally been caught filing false and fraudulent documents in foreclosure proceedings resulting in frauds upon the various courts for which they should be appropriately sanctioned. Borrowers should zealously seek sanctions against such conduct including dismissal of a judicial foreclosure with prejudice or cancellation of a non-judicial foreclosure for fraud. Simply permitting the banks to “correct” what are outright fraudulent actions cannot be tolerated by any court, as there is no procedural rule or substantive law which permits a party to “correct” a fraud upon the court, especially a fraud in the form of a sworn affidavit such as an Affidavit of Indebtedness or Affidavit in Support of Summary Judgment. That is called perjury, and perjury cannot be “fixed”