Florida Foreclosure Mill King David Stern Shows Crime Sure Did Pay

Florida Foreclosure Mill King David Stern Shows Crime Sure Did Pay

The article suggests that it was the foreclosure mills in response to servicer pressure on fees. And notice the stance of the writer in this extract. Most MSM accounts so far have bent over backwards not to be too critical of banks. By contrast, this article depicts servicers as partners with Stern in what Bill Black would call a criminogenic environment (boldface ours):

The rise and fall of Stern, now 50, provides an inside look at how the foreclosure industry worked in the last decade — and how it fell apart. It also shows how banks, together with their law firms, built a quick-and-dirty foreclosure machine that was designed to take as many houses as fast as possible… Florida authorities characterize the foreclosure process at these law firms as a “virtual morass” of “fake documents” and depicted Stern’s operations as something akin to the TV show “Lost” — only instead of people that went missing, it was paperwork. Stern’s employees churned out bogus mortgage assignments, faked signatures, falsified notarizations and foreclosed on people without verifying their identities, the amounts they owed or who owned their loans, according to employee testimony. The attorney general is also looking at whether Stern paid kickbacks to big banks.…The foreclosure business is a volume game. Banks typically pay law firms like Stern’s about $1,400 for each successful foreclosure. But the banks can pay a lot less if the firm doesn’t successfully foreclose within a certain time frame, usually around six months….


Like so many in the industry, Stern had a strategy to cope with all the volume and velocity: robo-signing. One employee testified that Stern’s chief lieutenant, a one-time file clerk named Cheryl Samons who rose to become the firm’s chief operating officer, signed as many as 1,000 foreclosure affidavits a day without reading a single word. The employee said Samons’ hand got so tired that she told three other employees to forge her signature. Samons also signed numerous mortgage assignments with a notary stamp that didn’t even exist at the time of signing. Notary stamps are only valid for four years. The only way Samons could have signed mortgage assignments at the time they were supposedly notarized was if she had been capable of time travel…

Stern battled to keep the chaos inside his firm a secret. In 2008 and 2009, whenever the Fannie Mae auditors were about to touch down in Miami for their routine monitoring, Stern’s employees sometimes toiled through the night, ripping the stickers and client codes off of Fannie files and replacing them with those of a different lender. Then, as an extra precaution, they hauled the disguised files to a remote back room.

Stern then gave Fannie officials the white-glove treatment, with catered meals and chauffeuring. The incomplete files stayed hidden until the auditors left town.


READ MORE ON THE STORY HERE

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MERS Admits NO Interest in Mortgage and No Loss On Default « Livinglies's Weblog

MERS Admits NO Interest in Mortgage and No Loss On Default « Livinglies's Weblog Make big money in penny stocks today

By Mark Mausert, Nevada mark@markmausertlaw.com


2010/03/07 at 8:24pm

On September 25, 2009, R.K. Arnold, the President and CEO of MERSCORP, Inc. — the parent corporation of Mortgage Electronic Registration Systems, Inc. was deposed in Alabama. Arnold is also an Officer of MERS. Arnold admitted MERS does not have a beneficial interest in any mortgage; does not loan money; does not suffer a default if monies are not paid; etc. etc. On November 11, 2009, William C. Hultman was deposed in Alabama and made the same admissions. And, of course, the internal agreement used by MERS expressly disavows any beneficial interest.



One tactic, if confronted with a foreclosure in Nevada, is to elect mediation. At the mediation, demand the assignments, i.e., the assignments which would cure the problem (according to Judge Riegle’s March 31, 2009, opinion, as affirmed by Judge Dawson on December 4, 2009). MERS and/or the lender has been unable to produce any such assignments — because they almost certainly do not exist.



Request the Mediator to check the appropriate box, i.e., the box which memorializes a failure by the lender to produce all required documents (all assignments must be produced per AB 149 — incorporated into Chapter 107 of the Nevada Revised Statutes). The requisite Certificate will not issue as a result. The Notice of Default is effectively negated. The “lender” must thereupon issue a new Notice and the borrower is again at liberty to elect mediation within 30 days of receipt thereof. The borrower should pay his or her taxes, and insurance, but not the mortgage — especially if upside down. It is an effective stopgap measure.



If the courts continue to follow the reasoning of Judge Riegle and Dawson a borrowr may, if otherwise eligible, declare bankruptcy; bring an adversary proceeding within the bankruptcy; and discharge the “mortgage” debt (which re a MERS mortgage is not really a mortgage but rather an unsecured debt — per Judge Riegle).



Or the borrower may initiate litigation based on causes of action for breach of contract, fraud by omission and racketeering (Chapter 207 of the Nevada Revised Statutes). By conducting systemic predatory lending, and coupling predatory lending with credit default swaps, i.e., bets homes would be foreclosed upon, the lenders breached the implied duty of good faith and fair dealing — the duty to refrain from frustrating the purpose of the contract. Borrowers generally harbored two main purposes — to secure a place to live and to safeguard/create an investment. By engaging in systemic predatory lending the banks frustrated the second purpose. They devalued the collaterized asset and breached the lending contract. Because this information was not disclosed, fraud by omission occurred. A series of fraudulent act constitutes racketeering, which gives rise to a claim for treble damages, plus fees

What Happened to Housing? Sorting out the Vocabulary of a Housing Meltdown

Understanding the Vocabulary of Structured Finance and How It Lead to the Housing Crisis. 

The big players involved in structured finance count on the public being uninformed about securitization in order to allow them to take more and more risks.  It is necessary for everyone who has a mortgage or intends to have a mortgage in the future to learn what really happens to your loan payments.  Wall Street has pillaged the mortgage business in order to leverage the steady payments of home owners up to 9 times.  They take huge risks to generate huge returns off of your mortgage.  They count on all of us claiming finance is too difficult to understand.  Once they know they have a free pass from middle American they proceed line their pockets with millions before expecting a tax payer bailout when the system collapses. 

Here are terms from Wikipedia that will begin to demystify what has happened to your home value and how the housing crisis transferred billions of dollars of wealth from unsuspecting home owners. 



From Wikipedia, the free encyclopedia

Securitization is a structured finance process that distributes risk by aggregating debt instruments in a pool, then issues new securities backed by the pool. The term “Securitisation” is derived from the fact that the form of financial instruments used to obtain funds from the investors are securities. As a portfolio risk backed by amortizing cash flows – and unlike general corporate debt – the credit quality of securitized debt is non-stationary due to changes in volatility that are time- and structure-dependent. If the transaction is properly structured and the pool performs as expected, the credit risk of all tranches of structured debt improves; if improperly structured, the affected tranches will experience dramatic credit deterioration and loss.[1] All assets can be securitized so long as they are associated with cash flow. Hence, the securities which are the outcome of Securitisation processes are termed asset-backed securities (ABS). From this perspective, Securitisation could also be defined as a financial process leading to an issue of an ABS.

Securitisation often utilizes a special purpose vehicle (SPV), alternatively known as a special purpose entity (SPE) or special purpose company (SPC), reducing the risk of bankruptcy and thereby obtaining lower interest rates from potential lenders. A credit derivative is also sometimes used to change the credit quality of the underlying portfolio so that it will be acceptable to the final investors. Securitisation has evolved from its tentative beginnings in the late 1970s to a vital funding source with an estimated outstanding of $10.24 trillion in the United States and $2.25 trillion in Europe as of the 2nd quarter of 2008. In 2007, ABS issuance amounted to $3,455 billion in the US and $652 billion in Europe. [2]

From Wikipedia, the free encyclopedia

A mortgage-backed security (MBS) is an asset-backed security or debt obligation that represents a claim on the cash flows from mortgage loans, most commonly on residential property.

First, mortgage loans are purchased from banks, mortgage companies, and other originators. Then, these loans are assembled into pools. This is done by government agencies, government-sponsored enterprises, and private entities, which may guarantee (securitize) them against risk of default associated with these mortgages. Mortgage-backed securities represent claims on the principal and payments on the loans in the pool, through a process known as Securitization. These securities are usually sold as bonds, but financial innovation has created a variety of securities that derive their ultimate value from mortgage pools.

Most MBS’s are issued by the Government National Mortgage Association (Ginnie Mae), a U.S. government agency, or the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), U.S. government-sponsored enterprises. Ginnie Mae, backed by the full faith and credit of the U.S. government, guarantees that investors receive timely payments. Fannie Mae and Freddie Mac also provide certain guarantees and, while not backed by the full faith and credit of the U.S. government, have special authority to borrow from the U.S. Treasury. Some private institutions, such as brokerage firms, banks, and homebuilders, also securitize mortgages, known as “private-label” mortgage securities.

Residential mortgages in the United States have the option to pay more than the required monthly payment (curtailment) or to pay off the loan in its entirety (prepayment). Because curtailment and prepayment affect the remaining loan principal, the monthly cash flow of an MBS is not known in advance, and therefore presents an additional risk to MBS investors.

Commercial mortgage-backed securities (CMBS) are secured by commercial and multifamily properties (such as apartment buildings, retail or office properties, hotels, schools, industrial properties and other commercial sites). The properties of these loans vary, with longer-term loans (5 years or longer) often being at fixed interest rates and having restrictions on prepayment, while shorter-term loans (1–3 years) are usually at variable rates and freely pre-payable.
From Wikipedia, the free encyclopedia

Collateralized debt obligations (CDOs) are a type of structured asset-backed security (ABS) whose value and payments are derived from a portfolio of fixed-income underlying assets. CDOs securities are split into different risk classes, or tranches, whereby “senior” tranches are considered the safest securities. Interest and principal payments are made in order of seniority, so that junior tranches offer higher coupon payments (and interest rates) or lower prices to compensate for additional default risk.

A few academics, analysts and investors such as Warren Buffett and the IMF‘s former chief economist Raghuram Rajan warned that CDOs, other ABSs and other derivatives spread risk and uncertainty about the value of the underlying assets more widely, rather than reduce risk through diversification. Following the onset of the 2007-2008 credit crunch, this view has gained substantial credibility. Credit rating agencies failed to adequately account for large risks (like a nationwide collapse of housing values) when rating CDOs and other ABSs.

Many CDOs are valued on a mark to market basis and thus have experienced substantial write-downs on the balance sheet as their market value has collapsed.
From Wikipedia, the free encyclopedia
A credit default swap (CDS) is a swap contract in which the buyer of the CDS makes a series of payments to the seller and, in exchange, receives a payoff if a credit instrument (typically a bond or loan) goes into default (fails to pay) [1]. Less commonly, the credit event that triggers the payoff can be a company undergoing restructuring, bankruptcy, or even just having its credit rating downgraded.
CDS contracts have been compared with insurance, because the buyer pays a premium and, in return, receives a sum of money if one of the events specified in the contract occurs. However, there are a number of differences between CDS and insurance, for example:

■The buyer of a CDS does not need to own the underlying security or other form of credit exposure; in fact the buyer does not even have to suffer a loss from the default event.[2][3][4][5] In contrast, to purchase insurance, the insured is generally expected to have an insurable interest such as owning a debt obligation;

■the seller need not be a regulated entity;

■the seller is not required to maintain any reserves to pay off buyers, although major CDS dealers are subject to bank capital requirements;

■insurers manage risk primarily by setting loss reserves based on the Law of large numbers, while dealers in CDS manage risk primarily by means of offsetting CDS (hedging) with other dealers and transactions in underlying bond markets;

■in the United States CDS contracts are generally subject to mark to market accounting, introducing income statement and balance sheet volatility that would not be present in an insurance contract;

■Hedge Accounting may not be available under US Generally Accepted Accounting Principles (GAAP) unless the requirements of FAS 133 are met. In practice this rarely happens.

While often described as insurance, credit default swaps differ from insurance in many significant ways. The cost of insurance is based on actuarial analysis. CDSs are derivatives whose cost is determined by the Black-Scholes option pricing model.

Insurance contracts require the disclosure of all risks involved. CDSs have no such requirement, and, as we have seen in the recent past, many of the risks are unknown or unknowable. Most significantly, unlike insurance companies, sellers of CDSs are not required to maintain any capital reserves to guarantee payment of claims. In that respect, a CDS is insurance that insures nothing.
Securitized mortgages in commercial real estate signal trouble ahead.: An article from: Real Estate Weekly
Defending My Home, from foreclosure. What I did, What I did wrong, What I should have done. The big lie and how they screwed us all !!

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Wells Fargo Guilty of Fraud
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Create Your Own Wealth Here

Main stream media finally beginning to cover bank servicer abuses

Main stream media finally picking up the ball and actually covering some of the egregious actions by the bank servicers. Watch the video here.

For months most of the MSM has been falling in step with the righteous banks due to fear of reprisals. No one has yet to openly speak of how outrageous things have become continually taking the shallow view that there could never be a mistaken foreclosure.
The MSM, like the banks, have been forced to go with a new approach thanks to strong efforts by bloggers such as Yves Smith of Naked Capitalism. The diligence and tenacity of bloggers and lawyers defending home owners has created a challenge to the status quo that banks rule the world and are operating in the best interest of all.

Realtors at summit are dead in water

I think it will be difficult to encourage people to buy based on the value of home ownership unless the system of MbS and CDS is changed. Finance and the leverage banks are able to use versus their capital reserves has helped money flow freely. Those at the top of the financial system abused the fact that most homeowners diligently pay their note. They saw $ signs in their eyes once they realized there was nothing else left to be exploited but the perpetual cash flow created from home loans.  The "smartest" and the "brightest' (this really only applies if you consider them the best and the brightest criminal minds) decide to take up the cause.  The result is what we see today:  Banks circling wagons while committing fraud, glossing over laws designed to protect owner's property rights.  Add the administration's blessing fraudulent activity and we have recipe for a bank owned country.   Don't kid yourself!  The banks are in charge because the people in the governemnt are not smart enough to see how badly the country is being sammed. 


People seem to miss the reality that the trillions of dollars created in interest has been taken out of the economy. The interest and fees directly or indirectly related to housing sales creates hundreds and thousands of jobs.
Government Failure Versus Market Failure

Mortgage

Title

appraisal

construction-labor, plumbers, electricians,

home inspectors

Realtors

Real estate office managers

secretaries for all of these businesses

even government jobs like tax assessors or inspectors

lost fees from deed tax on sales to the state

lost permit fees to the counties and cities

excess of unemployed with specialized skill in real estate and mortgage that do not translate well into other fields

repair, remodel

The devastation that has occurred that is all tied to housing in some way is catasrophic, regardless of what the government is trying to sell.  Follow link for more. 

The biggest mistake was toying with housing in the first place. If anyone would have realized that it was housing that creates so many jobs, drives the economy and eases the burden on Social Security, they would have wise to keep everyone's hands off the golden goose.

It is not fraud:

It is not fraud to default on a loan or to walk away from a loan. It is an option that is legal and falls within the guidelines accepted by the lender. The lender has agreed to take the property as collateral, in the event of a default they can exercise their right to foreclose and take back the property.


I don't understand why so many people want to make contracts unilateral and have everything be in favor of the bank. The bank willingly gave out the loan and willingly accepted the appraisal, and willingly accepted the home as collateral.

It is well within the homeowner's rights to walk away from a losing investment. Businesses and companies do it everyday. They go out of business or they restructure. These things are inherent in an economy where risk has to be taken in order to increase economic activity.

When a home is encumbered by a mortgage worth twice the value of the real estate, it is a losing proposition. The mortgagee and mortgagor both made wrong decisions when they signed the contract. It makes absolutely not logical sense to expect the homeowner to carry that burden and be expected to be the only one to take the loss. I am tired of hearing people just make outlandish statements about the home owner who is just exercising their right to exchange their collateral for release from the note.

The banks have been bailed out and kept afloat by the taxpayer. It is not out of the question to believe that if banks were in an investment that left them upside down, they would be the first to walk away if they weren’t supported by government funds. We are in this situation in part because the banks have never had to truly accept any losses. Even now, when it is clear that they have committed the fraudulent activity, been lax in procedural standards, and are clinging to the notion that a homeowner should be expected to collect the full value of a loan that is 200% of the property value, banks are getting a free pass from the government and the people.

The financial system purposefully created a system that was difficult to understand. They leveraged themselves to the hilt, cashed in billions and accepted payments for CREDIT DEFAULT SWAPS in which they new they could never cover payouts in event of a default.

The homeowner is no committing fraud. Furthermore, the homeowner probably could afford their home 3 years ago when they had a job and expected to keep that job. Not many people can pay a mortgage from their savings for two or three years without a solid income. The unemployment levels even make it difficult for people who keep their jobs or businesses. The wages and profits are less when the economy falters.