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By Neil Garfield
February 13, 2012
Even if the Payment was on the Debt owned by Another
There have been dozens of deals with law enforcement and regulatory agencies. There have been thousands of settlements with individual homeowners sealed under confidentiality. Why do they not work for everyone?
The answer is obvious — borrowers don’t count. And the reason they don’t count is the uninformed view that borrowers took the loans and should repay them — even if the loans are NOT in default, are paid off in full to creditors, and the claimants who keep getting money from all sides and from all directions without any demand for accounting.
It is the policy of this country that the full brunt of the cost of the mortgage crisis should be borne by borrowers. We are imposing an ideology over the facts, ignoring the absurdity of the consequences, and compounding both past evil and greasing the tracks for the banks to serve as the collection point for payments covering losses that never occurred (to the banks).
These payments include taxpayer direct bailouts (Bush’s TARP), indirect bailouts (Bush-Obama public-private Maiden Lane deals), direct private payments from servicers (while declaring non-payment from the borrower), direct private payments from insurers who were bailed out using taxpayer dollars, direct private payments from credit default swap counter parties who were funded by Taxpayer bailouts from the U.S. treasury and foreign treasuries, and indirect credits from other exotic credit enhancements.
THAT MAKES 6 distinct sources of payment received by the banks In addition to the direct payments from borrowers and indirect payments from borrowers who gave up title and posssession to homes on which the creditor was paid in full and there was no default.
Editors Note: I would like to add one more point to this great advise. I should note that I am not a lawyer and I'm not giving legal advice here. Just telling you what I did.
In my case, after my original lender went bankrupt, IndyMac Bank, a new bank took over, OneWest Bank, claiming they had purchased my loan. According the UCC (Universal Commercial Code) 3-501 on "Presentment," when you are presented with a bill, a demand for payment, you have the right to demand that the party claiming you owe them money prove it, to validate the debt. If they refuse, you have the right to withhold payment "without dishonoring the instrument" until they do comply.
I did this before I stopped making payments. It is important to make such a request in writing, certified mail, return receipt to prove you have done this. If they fail to comply with real hard proof, then you can withhold payment without being in default. A judge will try to get you to admit you are in arrears on the note or some such thing but do not admit you're in default, ever. If you get tricked into saying you're in arrears, make sure you blurt in that this does not necessarily constitute a default according to UCC 3-501. Look up the version of it in your state when you quote it because that is the version actuallyy codified in your state. In Colorado it's UCC statute 4-3-501.
* * * * * * *
By Mark Stopa Esq.
January 28, 2012
I get all sorts of comments on this blog, not to mention inquiries from prospective clients via email. This one, which I’ll paraphrase, really caught my attention, as it presents a situation I suspect a lot of Florida homeowners are facing. Here’s the question, and my response:
Question: My wife and I have always paid our mortgage, but with the economy as it is we’ve struggled to do so recently. Our house is about $150,000 underwater, and for the past year or so, we’ve borrowed money from my parents to make the mortgage payments. Unfortunately, my parents can no longer afford to lend us any more money, so we’re trying to decide what to do.
I’ve been asking the bank for a loan modification for many months. They keep telling me “we’ll get back to you,” but then I never hear anything. Most recently, the bank began insisting that my wife disclose her financial information as well. I argued with them about this, since my wife wasn’t a borrower and did not sign the Note, but they insisted that the only way I would be considered for a loan modification was if my wife submitted her financial information as well.
This woman is extremely lucky. It is rare for a district attorney much less an attorney general to get involved in any way to help homeowners fight these predatory banks.
This sort of thing is happening to homeowners all over the country, day in and day out. These banks are predators, pure and simple. They have made off with TRILLIONS in public money that would have paid off every single mortgage in the country and still they claim they are owed more and more and if we don't pay, they will take our property on top of it all.
Many cases are just like this woman who wasn't even late on her mortgage payments. The banks can just say whatever they want, do whatever they want and they have plenty of "public money" to hire all the attorneys they need to commit this kind of extortion.
* * * * * * *
By RANDY FURST
December 30, 2011
St. Louis Park woman has mortgage reinstated, but CitiMortgage still wants fees for its attorneys and foreclosure costs.
In a last-minute move, Citi- Mortgage called off the foreclosure sale of a St. Louis Park house whose owner battled to stay in her home with the support of the Minnesota attorney general.
Nancy Gosselin was scheduled to lose her house in a sheriff's auction scheduled for Tuesday, even though an investigation by the attorney general determined that at most, she had missed one payment of $584 more than two years ago.
After Gosselin was featured in a Whistleblower column on Nov. 13, CitiMortgage postponed the foreclosure for a month. Then, this week, Gosselin got the good news.
"It was canceled," Mark Rodgers, director of Citi public affairs, said in an e-mail to the Star Tribune on Thursday. "This matter has been resolved."
Lenders must identify homeowners
wrongly foreclosed upon.
Banks still negotiating with DOJ, state AGs
U.S. homeowners who believe they were wrongly foreclosed upon will soon be able to request that their cases be reviewed as part of a government settlement with large lenders, a top bank regulator said on Monday.
As part of a settlement announced in April, 14 large mortgage servicers, including Bank of America Corp (BAC.N) and JPMorgan Chase & Co JPM.N, are required to hire independent consultants to review any foreclosures initiated in 2009 and 2010.
The goal is to identify foreclosures that were not properly handled by the banks so that these homeowners can be compensated for any financial harm.
Bank regulators have ordered the lenders to set up a single system where borrowers can request that their specific case be reviewed to ensure anyone with a grievance is not missed.
NEW YORK — In a sweeping move, the government on Friday sued 17 financial firms, including the largest U.S. banks, for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed.
Among the 17 targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs.
The lawsuits were filed Friday by the Federal Housing Finance Agency which oversees Fannie and Freddie, the two agencies that buy mortgages loans and mortgage securities issued by the lenders.
The total price tag for the securities bought by Fannie and Freddie affected by the lawsuits: $196 billion.
The government didn't provide a dollar amount of how much it seeks in damages. It said that it wants to have the purchases of the securities canceled, be compensated for lost principal and interest payments as well as attorney fees and costs. The lawsuits allege the financial firms broke federal and state laws with the sales.
Home mortgage-backed securities were risky investments that collapsed after the real-estate bust and helped fuel the financial crisis in late 2008.
In the lawsuits that were filed in federal or state court in New York and the federal court in Connecticut, the government said the securities were sold with registration statements and prospectuses that "contained materially false or misleading statements and omissions."
The Federal agency said the banks and mortgage lenders also falsely represented that the mortgage loans in the securities complied with underwriting guidelines and standards. They also included representations "that significantly overstated the ability of the borrower to repay their mortgage loans."
The 17 institutions are Ally Financial Inc., formerly known GMAC LLC, Bank of America Corp., Barclays Bank PLC, Citigroup Inc., Countrywide Financial Corp., Credit Suisse Holdings Inc., Deutsche Bank AG, First Horizon National Corp., General Electric Co., Goldman Sachs & Co., HSBC North America Holdings Inc., JPMorgan Chase & Co., Merrill Lynch & Co. and its unit First Franklin Financial Corp., Morgan Stanley, Nomura Holding America Inc., The Royal Bank of Scotland Group PLC, and Societe Generale.
Read more on Newsmax.com: Feds Sue Biggest US Banks Over Risky Mortgages
One Final Question
It now becomes incumbent upon me to ask one final question. The Shared-Loss Agreement states the following:
2.1 Shared-Loss Arrangement.Such agreements are usually considered to be interpreted to the benefit of the homeowner, as with HAMP and other programs. In legalese, it is called “Intent”.
(a) Loss Mitigation and Consideration of Alternatives. For each Shared-Loss Loan in default or for which a default is reasonably foreseeable, the Purchaser shall undertake, or shall use reasonable best efforts to cause third-party servicers to undertake, reasonable and customary loss mitigation efforts in compliance with the Guidelines and Customary Servicing Procedures. The Purchaser shall document its consideration of foreclosure, loan restructuring (if available), charge-off and short-sale (if a short-sale is a viable option and is proposed to the Purchaser) alternatives and shall select the alternative that is reasonably estimated by the Purchaser to result in the least Loss. The Purchaser shall retain all analyses of the considered alternatives and servicing records and allow the Receiver to inspect them upon reasonable notice.
What was the “Intent” of the Shared-Loss Agreement? Was the intent to provide OneWest Bank solely with a profitable incentive to take over Indymac Bank? If so, then OneWest has been truly successful in every manner.
By Patrick Pulatie
Several times per week, I get phone calls from attorneys. These calls all start out the same. “I am unable to get loan modifications done through a lender. What can I do?” The first question I ask is if the lender is Indymac/One West. Invariably, it is.
I also field the same type of calls from homeowners and from loan modification companies. Everyone is having the problem of Indymac not cooperating with regard to doing loan modifications. Furthermore, if I google the issue or check out loan modification forums, the same is true on the internet.
What is going on with Indymac/One West? Why aren’t they doing loan modifications? This article will try and bring together the known facts for a better understanding of the situation, and discuss what the Indymac situation means for foreclosures in general — and the government’s response to the crisis. First, to understand the situation today, one must have an understanding of the recent history of Indymac.
Indymac was a national bank in the U.S. It was insured by the FDIC. On July 11, 2008, Indymac failed and was taken over by the FDIC.
Indymac offered mortgage loans to homeowners. A large number of these loans were Option ARM mortgages using stated income programs. The loans were offered by Indymac retail, and also through Mortgage Bankers would fund the loans and then Indymac would buy them and reimburse the Mortgage Banker. Mortgage Brokers were also invited to the party to sell these loans.
During the height of the Housing Boom, Indymac gave these loans out like a homeowner gives out candy at Halloween. The loans were sold to homeowners by brokers who desired the large rebates that Indymac offered for the loans. The rebates were usually about three points. What is not commonly known is that when the Option ARM was sold to Wall Street, the lender would realize from four to six points, and the three point rebate to the broker was paid from these proceeds. So the lender “pocketed” three points themselves for each loan.
When the loans were sold to Wall Street, they were securitized through a Pooling and Servicing Agreement. This Agreement covered what could happen with the loans, and detailed how all parts of the loan process occurred.
Even though Indymac sold off most loans, they still held a large number of Option ARMs and other loans in their portfolio. As the Housing Crisis developed and deepened, the number of these loans going into default or being foreclosed upon increased dramatically. This reduced cash and reserves available to Indymac for operations.
In July, 2008, the FDIC came in and took over Indymac. The FDIC looked for someone to buy Indymac and after negotiations, sold Indymac to One West Bank.
(Reuters) - State attorneys general are negotiating to give major banks wide immunity over irregularities in handling foreclosures, even as evidence has emerged that banks are continuing to file questionable documents.
A coalition of all 50 states' attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks.
State and federal officials declined to say if any form of immunity from criminal prosecution also is under discussion. The banks involved in the talks are Bank of America, Wells Fargo, CitiGroup, JPMorgan Chase and Ally Financial.
REUTERS REPORT PROMPTS LETTER
Reuters reported Monday that major banks and other loan servicers have continued to file questionable documents in foreclosure cases. These include false mortgage assignments, and promissory notes with suspect or missing "endorsements," which prove ownership. The Reuters report also showed continued "robo-signing," in which lenders' employees or outside contractors churn out reams of documents without fully understanding their content. The report turned up several cases involving individuals who were publicly identified as robo-signers months ago.
Reuters found that such activity has continued even after 14 major mortgage lenders signed settlements with federal bank regulators promising to halt such practices and give remediation to some homeowners who were harmed.
In response to these disclosures, Sen. Robert Menendez (D-NJ), chairman of the Senate Subcommittee on Housing, Transportation and Community Development, and nine other senators sent a letter to federal bank regulators, asking them to disclose information gathered about banks' foreclosure practices.
Wall Street's predatory lending practices are responsible for the mess we're now in. Why make severe cuts to state budgets even as Wall Street keeps making bank?
By Peter Dreier
Nowhere is this more true than in California, where one in five U.S. foreclosures has taken place. Since 2008, more than 1.2 million Californians have lost their homes, and the number is expected to exceed 2 million by the end of next year. More than a third of California homeowners with a mortgage already owe more on their mortgages than their homes are worth.
As a result, home values in the state are estimated to plummet by $632 billion. That translates into a loss of more than $3.8 billion in property taxes. One foreclosed home in a neighborhood can reduce property values for the rest of the houses in the neighborhood, and a cluster of foreclosed houses compounds the physical, economic, and social devastation.
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