Jul

I am just going to go out on a limb here and predict that we are at the very beginning of this scandal and that Pam Bondi is in a heap of deep doo, at least politically speaking. This has bad news written all over it for the new Atty General of Florida and I support all efforts in getting to the real truth of what’s happening here in Florida.

It really is wrong to see what amazing crimes the banks and their robo-employees are getting away with. If I didn’t see it everyday with my own eyes and see no one going to jail for this stuff, I’d say you were a quack and that there was no way that any white collar criminal could get away with this stuff so often in such massive quantity. Especially when you marry these crimes to the confiscation and illegal seizure of people’s homes! Frickin amazing….

Jul

GOING UP… The Rising Bar of Homeowner Rage

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Loan Modification, Weidner

28228Leave a Comment2011-07-20+12%3A08%3A10Mandelman

It all started last Friday morning when a Broward County sheriff went to a townhouse to serve its owner with an eviction notice. It ended when Pembroke Pines police shot the homeowner several times as he set his foreclosed townhome on fire.

According to News4Jax.com, the 52 year-old Florida homeowner lost his home to foreclosure as a result of owing $10,000 in homeowner’s association dues.

Police said that the homeowner soaked the inside of his residence in gasoline, set it ablaze and then walked out of the burning townhome immediately getting into a fight with multiple officers. He must have presented quite a threat because they shot him several times.

He ended up at Memorial Regional Hospital with injuries described by the fire and rescue people as serious and life threatening. No police or firefighters we injured, and the fire was put out before it could cause damage to the connecting townhomes… this time… and thank God for that.

I’ve said it before… not more than a couple of hundred times and beginning almost three years ago… but, as a country we are playing with fire on a national scale, and there is no question but that this event should be viewed as foreboding. No one besides the homeowner was hurt this time and that’s the result of… PURE LUCK. I sure hope we’re that lucky next time, because there will most assuredly be a next time, and a next beyond that, and a next beyond that.

What this country’s mortgage servicers have been allowed to do to homeowners… and continue to be allowed to do to homeowners is surely criminal, but beyond that is so entirely unconscionable as to shock, disgust and repel all who come to understand it.

Routinely, homeowners struggling financially (and there are more and more every month in what remains the worst economic downturn this country has experienced in 70 years), are flagrantly, repeatedly and intentionally deceived, maligned and wholly abused. And for their trouble… they are told nothing and therefore walk away from their homes having no idea why their lives have been so freely torn asunder, while clearly no one cared or cares about what they’ve been forced to endure… not even in the least.

It’s not an isolated incident, as the banking industry would have us believe, it’s commonplace… the norm… it happens to essentially everyone who gets involved with their mortgage servicer… every single day. No one has even a reasonably unpleasant experience dealing with their servicer when trying to get their loan modified. The simple fact is that servicers only come in only three flavors: Terribly Annoying, Unbearably Annoying, and Make-You-Want-to-Burn-Your-House-to-the-Ground Annoying.

To be sure, millions of homeowners have succeeded in getting their loans modified, but there’s no joy in the process, regardless of the outcome.

President Bush signed a bill at the end of July inn 2008, thus creating the Hope-4-Homeowners program, perhaps the most ill thought out and predictably least effective federal program in the history of the country. It made government cheese look like Medicare.

Then we waited for Barack Obama to come to the rescue. In late February of 2009 our new president announced his flagship Making Home Affordable program, which ultimately gave birth to HAMP, and we all know how underwhelming that has been.

Every single other program, federal or state, that has been allegedly made available to distressed homeowners as related to the foreclosure crisis… has been a dazzling failure. And no one even debates that fact.

All this… and “DISDAIN” too?

Sheila Bair, just retired from her position at the FDIC, in her interview with Joe Nocera of The New York Times, shared her honest thoughts on the travesty… and here’s what the article in the Times said, among other things:

Bair, however, has always thought there were other reasons behind the general resistance to modifying mortgages. The government, she said, “thought maybe I was overstating the problem and that it wasn’t going to be that big a deal.” As for those in the industry, she added: “I think some of it was that they didn’t think borrowers were worth helping. There was some disdain for borrowers.”

Some disdain? I’d say the evidence makes it abundantly clear that there’s disdain for borrowers. I mean, there certainly isn’t love and respect… borrowers are a long way from being cherished by the banksters, I’ll tell you that for sure. No, its damn obvious there’s a great deal of disdain in the banker-borrower equation, there would have to be for servicers to treat borrowers the way they have.

The bankers just didn’t think it was worth helping borrowers… that’s fascinating though, don’t you think? Could have helped, but you’re just not worth helping. Worthless… helping borrowers… a worthless endeavor as far as the bankers are concerned.

Hey banksters… Wow… that’s almost… well, its… hmm… umm… I’m not entirely sure what to… well, how about… maybe I should say… I mean… F#@K YOU!

It’s all very odd, because although loan modifications are not even mentioned on any of the major bank Websites, each one of the banks does have a special site dedicated to loan modifications and other foreclosure avoidance products and programs… and I read them all and it sure sounds like they care and they’re here to help.

For example, here’s what it says on the front page of Bank of America’s Website dedicated to Home Loan Help:

Let’s work together

Help is available for homeowners experiencing payment difficulties. We’ll do everything possible to come up with a solution to help you. No matter what your situation is, we’re here to help.

And here’s what it says on the Website of JPMorgan Chase:

If you have concerns about your ability to pay your Chase mortgage, we’re ready to help.

Over the past three years, we’ve helped prevent almost half a million foreclosures by helping homeowners with home loan modifications – and by helping them understand and access government-based homeowners assistance programs. Our goal is to keep homeowners under financial stress in their homes.

Chase also offers this little gem sure to help a homeowner get his or her loan modification approved by Chase:

This review process may take up to 30 days. During this time, it’s in your best interest to continue making your home loan payments.

And how about Wells Fargo Bank’s site…

Count on us to work with you

If you’re facing financial challenges, we’ll do everything we can to help you stay in your home. Keeping up with payments can be difficult, especially with circumstances like job loss, decreasing home values, or overextended credit. By reaching out to us when challenges first arise, you keep more options open.

So, in case you’re confused as to who to believe… former FDIC Chair Sheila Bair speaking on the record with Joe Nocera of The New York Times… or the bankster Websites, let me clear it up for you. She’s speaking out now that she’s finally able to tell the truth about what’s been going on in Washington D.C. related to the housing crisis and the administration’s apparent ambivalence to the most important economic issue we face in this country.

The bankster Websites, on the other hand, merely offer further proof that the banks are liars.

In the same article, Joe Nocera mentions that there are “certainly arguments against modifying mortgages.” And then he offers what some of those might be.

A. Moral Hazard – This is the one about how even those that can afford their mortgages will intentionally stop paying them so that they too can get a lower payment too… just like those lucky people in financial distress.

This, my dear Watson is sheer idiocy in motion. For one thing, loan modifications are not like stated income loans. They require documentation of income and all sorts of other things, so it would be very difficult to cheat the system and obtain a modification if a person didn’t need one. Besides, it’s hard enough for a person who desperately needs one to get one, so I really don’t think we need worry about modifying too many loans at this point no matter what.

Also, people don’t ruin their credit to reduce their mortgage payment, and that’s what would be required were someone who can afford their payment want to get their loan modified. From everyone I’ve talked to, you have to be at least 90 days late to get your loan modified, and on top of that, making a modified payment, as opposed to your full payment is reported to the credit bureaus as not making your full payment as agreed. Presto change-o, if you get your loan modified, you’ll be saying so long to your 700+ FICO score at the same time.

B. The Horrors of Re-Default – Here’s how this one goes… Many people end up re-defaulting on a modified mortgage, and therefore… I’m not really sure. The only reason “many” would re-default on a modified mortgage is that the modifications are not done corrently. In some cases, like roughly 60% in 2008, loan modifications resulted in higher mortgage payments than before they were “modified.”

And wouldn’t you know it, there was a survey out that said that in 2008, 60% of modifications re-defaulted a little under a year later… I believe it was ten months later.

I argued with someone at HUD once about this, saying that a loan modification is not when the payment goes up… I said that was preposterous and no one should be including those increasing payment in their counts of modified moans. The guy I was talking to was insistent that even if the payment goes up it was still a loan “modification.”

“What would you like us to call it when the modification results in a higher payment,” he asked me, exasperated.

I thought for a moment, wanting to be thoughtful in my response to HUD… “How about a ‘payment increase,” I said.

The bottom-line is that if the modification is done properly there’s no re-default threat that exists, the whole issue is merely another dodge in the continuing series of lies told by bankers who don’t want to modify loans.

C. We NEED Foreclosures – This intellectually deficient line of thinking says that we actually NEED foreclosures if the housing market is to recover, just like we need forest fires so that forests may grow, or something like that. Do I even have to answer this one… I think not.

D. It’s Impossible to Design a Program – As Nocera has been told by Treasury, “designing a mortgage-modification plan that works for a large number of people is excruciatingly difficult, maybe even impossible.”

Isn’t that funny, HAMP modified 600,000 loans so far, and Treasury claims that there have been several million loans modified outside of HAMP, last time I checked. So… impossible? Several million doesn’t sound “impossible.” Neither does 600,000. If you can modify 600,000, surely you can modify six million.

And if that’s really an issue at Treasury, might I suggest you issue an RFP to private companies requesting bids to administer such a program and I assure you there will be a flood of private companies that will fix this modification-is-impossible nonsense in a damn hurry.

It’s all just one big steaming pile of freshness. The banks have been telling the same tall tales for almost three years. And as a country, with housing prices in a literal free fall for the last 60 consecutive month, our failure to stop foreclosures has already sealed our fate economically speaking for decades to come as over $10 trillion in wealth has already been lost by America’s middle class… and it’s a simple fact that at best it will take decades before that lost wealth has been rebuilt.

How long? Well, consider this… I just turned 50 years old and it is extremely unlikely that the lost wealth resulting from this economic meltdown will be reconstituted in my lifetime. So, for me… it’s a permanent change in how the remainder of my life will be lived. And it’s mostly because both the Obama Administration, and Bush Administration were too stupid to see what was happening… and too taken with themselves to heed the warnings of dozens of economists and other experts who warned them that their course of action was misguided.

It’s because of their mishandling of the foreclosure crisis, that they let it go and pumped money into banks that remain insolvent and will ultimately fail anyway.

And would you like to know what we’re going to see happen in the next chapter in this bungled game of economic destruction dominoes? Next, we’ll get to watch as thousands of homes are bulldozed to the ground. That’s right… we’re not going to have any choice. All of this will have been for nothing as the homes that once provided shelter and housed memories are reduced to rubble. And then in time, someone else will come along and build another house there.

So, now in Florida… remember… this article is about the man shot by police in Florida as he set his home on fire… what a story, huh? He doused it in gasoline, set it ablaze, and came walking out to ready to fight multiple police officers with guns. Haven’t I seen this movie before… wasn’t it starring Denzel Washington?

The fact is that the path we’re on can only end badly, and although I quite proud of how this nation has managed to hold it together until this point at least, as the man said, it’s all downhill from here.

But today we can be happy that no one besides the homeowner was hurt… that only one home was damaged… that no one was killed… that we were very, very lucky.

How long are you figuring our luck is going to hold out, Mr. President? Because you’re certainly doing nothing to alter our path, so we’re going to hit the iceberg that’s dead ahead for sure. Is it like Sheila said about why you didn’t react sooner to loan modifications… do you think I’m over-stating the risk? Is that it?

I’m not, sir.

And since you’ve been wrong about… well, everything having to do with the housing crisis, my advice would be to seek outside help… preferably someone who has no friends in banking, like… oh wow, do you even know anyone who fits that description?

Last year I wrote an article, “We’re on the Brink of A New Age of Rage.” And after last Friday’s tragic shooting of a homeowner, the bar has just been raised.

We should consider ourselves warned.

Mandelman out.

Jul

HAMP, HARP, HOP, HOOP… Like Watching Someone Spend $10 Trying to Fly to the Moon

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Loan Modification, Weidner

28229Leave a Comment2011-07-19+10%3A06%3A56Mandelman

The Washington Post, with Bloomberg, just did what I had been thinking about doing for quite some time, but frankly was just plain afraid to do.

They contacted the Treasury Department, the Department of Housing and Urban Development and the Federal Housing Finance Agency to ascertain just how the Obama Administration’s housing rescue programs were doing to-date… in terms of their impact and cost.

I thought about doing the same thing about three months ago, but since it had about the same appeal as scheduling a colonoscopy, I somehow managed to stay just a little too busy to get to it. Once I got close to having time, but luckily my sock drawer needed rearranging, so that took care of that.

The Post’s post didn’t even have an attributed author at the top, which made total sense to me… I wouldn’t have wanted to attach my name to it either. And check out how the story kicked off…

The Obama administration has taken several stabs at stemming foreclosures and reviving the housing market. Here is a look at some of the administration’s largest programs:

You know, that sentence alone explained a lot to me, actually. And I’m not quite as disappointed in the president as I was before I read it. He only “took a stab” or maybe a couple of three stabs at “stemming foreclosures and reviving the housing market.” So, okay then… he wasn’t really trying… it wasn’t a major effort on which he was concentrating… he just took a stab… like maybe he came up with stuff to try during a commercial break while watching American Idol with his girls, or something like that.

Boy, that sure is a relief, wouldn’t you say? Because, see… I had been under the impression that he had actually been trying to do something big and important and was putting his best foot forward, as it were. And if that were the case, well… then he’d be an incompetent loser with the vision of a Star-nosed Mole. But since he wasn’t really trying… rather he was merely “taking a stab,” well, that just makes him a careless moron for fiddling while Rome burned.

See, I like him a lot more now that I know that, don’t you?

His bien-pensance, it should go without saying, is HAMP, the Home Affordable Modification Program, and we all know what a rousing success that has been. Sheer-joy-on-a-stick is how I hear most homeowners referring to it.

It was originally slated to help up to 7 million, but according to the Post, has come up just a tad short at right around 600,000. I’ve seen some say that number is 700,000, but I don’t want to split hairs… after all, what difference does 100,000 homeowners make anyway? It’s an insignificant number, really.

The Post puts the budgeted price tag for the entire Making Home Affordable program at $30 billion, with the money coming out of the TARP funds, and HAMP was to be the lion’s share of that amount.

Now, I’m not trying to be a stickler here, but if you remember back to 2009… I know it’s hard, but try… you might recall budgets for HAMP that were closer to $80 billion, but obviously the administration is counting on no one remembering that far back, so put it out of your mind and move along… there’s nothing to see here.

To-date, the program has cost roughly $1.42 billion. And to put that number in perspective, I looked it up and the government spends $20 billion a year to air condition tents in Iraq and Afghanistan. So, if that same math holds up… that means that instead of helping only 600,000 homeowners in this country, we would have had the money to help roughly 8.5 million homeowners avoid foreclosure had we simply invaded cooler countries.

Are you with me on that calculation? If not, see me after class.

Next up is HARP, the Home Affordable Refinance Program that rhymes with TARP, but that stands for FOOL (and if you remember Robert Preston in The Music Man, that was funny.)

HARP allowed homeowners with Fannie or Freddie loans underwater at first by 115%, and later as we chased the housing market down the drain, by 125%, to refinance into lower interest rate mortgages. Roughly 800,000 homeowners refinanced under the program so far, but again the program was originally forecasted to help millions. It doesn’t really matter, however, as these were the 800,000 homeowners that didn’t need help, and had nothing to do with the foreclosure crisis.

Here’s what the Post’s article had to say about HARP’s cost:

“The Federal Housing Finance Agency, which regulates Fannie and Freddie, does not assign a specific cost to the program and agency officials say the program likely saves the firms money by keeping some borrowers out of delinquency.”

Alrighty then… what else do we have here…

Next there was the Emergency Homeowners Loan Program… or, EHLP. This is that brilliantly conceived homeowner assistance program that seeks to help unemployed homeowners by loaning them up to $50,000 over a two-year period, and then if the homeowner stays current on their mortgage payments for five years, the loan is forgiven.

Should you have the unfortunate experience of losing your job twice in five years, however, the program socks you with the $50k debt and probably repossesses your car when you fall behind on your loan.

Congress allocated $1 billion to this stunning piece of thinking, saying that the program could help up to 30,000 borrowers. Help them what, I wonder? Help them get closer to bankruptcy, perhaps, but I wonder if the government loan can be discharged or whether it’s like one of them student loans that never goes away. It’s a lot like the gift that keeps on giving… emotional baggage.

The Post failed to mention just how many borrowers the program had helped to-date… probably just an oversight, I’m sure. I’ll take a guess though… you know, in an effort to fill in the blanks… I’m going to say the program has helped… hmmm… let’s see… umm… NONE.

But, don’t worry… today is July 19^th and according to the Post, borrowers have until July 22^nd to apply… so with three days to go, I’d say it’s too early to call this one a complete failure… maybe there’ll be a last minute rush to get in. What? It could happen.

And last up in the Post piece was the Hardest Hit Fund, which provided at first the five… then the nine… and then I believe, ultimately the 33 states hardest hit by the foreclosure crisis with a grand total of $7.6 billion. Each state’s housing finance agency was charged with designing its own solution to the fast spreading and deepening housing meltdown.

Now, the states have until 2017 to use the funds, so the Post points out that “it’s early,” presumably, to judge the program. Apparently, about70% of the state programs established assistance programs for unemployed workers, while 20% designed programs that would supposedly reduce the principal balance of underwater homeowners.

To-date, only $480 million has been spent, and other than providing hand-outs to the unemployed for a while… I can pretty much assure you that the rest of the money is safe, as I haven’t been able to find a single state program that’s helping anyone to ay degree.

When Arizona launched it’s homeowner assistance program last year, I made fun of it, and said that it wouldn’t help a single Arizona homeowner, so wasn’t I surprised when a year later, the Arizona housing authority announced quietly that the program had in fact helped one homeowner all year.

I didn’t hide from it though… I came right out and admitted that I had been wrong… and then apologized. I still don’t know how I could have missed it by that much.

So, that’s it and that’s all… that’s Obama taking a stab… yeah… man. You go Mr. president… keep on stabbing… you’re a stabbin’ fool, sir.

Well, like I said… at least he wasn’t really trying.

I feel like I’ve been watching someone spend the better part of ten bucks… trying to get to the moon.

Nice work, sir.

We’ll let you go back to bed now, sir.

Mandelman out.

Jul

Well, Now Isn’t That Interesting… All the News That Fits, We Print

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Loan Modification, Weidner

28232Leave a Comment2011-07-09+12%3A44%3A10Mandelman

1. If IndyMac’s Former CEO Can be Credibly Sued by FDIC for Negligence Resulting in Monetary Damages, Why Can’t Homeowners Do the Same?

The former CEO of IndyMac, Michael Perry is being sued by the FDIC for… and if you’re wearing a hat, please hold onto it… $600,000,000… or in the English, that’s six hundred million dollars.

The suit cites damages related to the bank’s sale of what are being referred to as “toxic mortgages.” The complaint alleges negligence on Perry’s part for allowing IndyMac to originate and purchase roughly $10 billion in mortgages that were to be sold in the secondary mortgage marketplace, but darn the luck, it didn’t work out. Well, that’s what happens when the global credit markets freeze up abruptly, I suppose.

The lawsuit contends that Perry knew of the secondary market’s instability, presumably because he did so much to cause it, and that therefore should not have been trying to get that one more fraudulent deal through his pipeline. I imagine that the FDIC feels that he’d stolen enough from investors by mid-’07 anyway, so the one final score attempt was just bad form. Even bankers have to draw the line somewhere… or not.

So, when IndyMac got stuck with the loans on its balance sheet as a result of not being able to sell them, the result was $600 million in losses… so far… and for which he could be held responsible. I would imagine that the actual losses are much higher but they just can’t be tied to Perry… we probably took those losses when we bailed out AIG… I really don’t know, except that it would seem that everything done during the bubble had a derivative somewhere.

I tried downloading the actual complaint but was unable to… it may have been too early to get it on Pacer… I’ll try again tomorrow. It’s called: FDIC v. Perry, U.S. District Court, Central District of California, No. CV11-5561, and it was filed in federal court in Los Angeles.

So, why is this so interesting? Well, because aren’t there lawsuits out there where homeowners are trying to sue on a similar basis… identical even, it seems to me… but everyone is questioning how the homeowners will be able to show they were damaged by the banker’s, at best, reckless behavior.

A question for the lawyers…

I can’t help but wonder how the FDIC could be so clearly damaged by the origination of these “toxic loans,” without the homeowners connected to these loans being damaged as well.

I mean, if Perry were found negligent by the court in this matter, and therefore the loans in question should not have been originated or purchased… as Perry knew at the time that the secondary market might meltdown and freeze up any day… then why wasn’t I, the homeowner, similarly damaged by Perry’s withholding of information and allowing my loan to be originated? I’ve suffered monetary damages as a result of Perry’s crackerjack work as well, have I not?

Is not what’s good for the goose, also good for the gander? Or, in other words… no, I think those words should do it, actually.

Also, I think it’s worth noting that last year the FDIC sued other IndyMac executives for roughly $300 million, so now we’re closing in on a billion that could be recovered from the guys who robbed IndyMac. I covered the FDIC’s announcement that they’d be doing this in my article titled: For Failed Financial Institutions, the Pain is Not Over Yet, and in that article I said, among other things…

“I can’t believe I’m saying this, but now I’m kind of happy that FDIC is broke, because they’re obviously motivated to recoup funds where possible, and that means no free passes for bankers who captained their ships directly into the rocks, but failed to go down with them. For example, on July 2nd, the FDIC filed a $300 million lawsuit in Federal Court against four former executives from IndyMac’s homebuilding division, and that’s got to put a spring in someone’s step all by itself.

And, I didn’t know this, but the FDIC apparently has a three-year statute of limitations from the date of a bank’s failure to sue management and board members, so that could certainly explain why these sorts of actions have seemed slow in coming.”

And yes… in case you’re wondering… quoting one’s self does feel a little strange, but also oddly satisfying.

Now let’s just hope the FDIC’s lawyers are as effective as the banking lawyers have thus far been against the claims of homeowners.

Mandelman out.

2. Obama Finally Admits Failure to Stop Foreclosure Crisis… If that was even his goal.

First, I just have to say that this crap is getting hard for me to watch. Okay, ready? Here goes…

We haven’t heard President Obama say word one about his plan to mitigate the damages caused by the foreclosure crisis since he announced the Making Home Affordable program back in late February of 2009. And for the record, I find that inexcusable regardless of whether it was ignorance, arrogance, petulance or flatulence that was the cause.

So, wasn’t I surprised to find out that this past Wednesday, during the President’s Twitter Townhall… and I’m not even going to say anything about that… President Obama finally… and I’m talking two and a half years after he announced his plans related to the foreclosure crisis… finally admitted that he and his administration blew it and had no idea what they were doing.

Yes… that is what he said… and here are his words taken directly from his Twittering speech. He is responding to one of the first questions sent in via Twitter, and asked by William Smith of New Hampshire:

“What mistakes have you made in handling this recession and what would you do differently?”

(By the way, Obama starts out by saying, “That’s a terrific question,” to which I can only say, “Go to hell, Mr. President.” I’m sorry to feel that way, but I don’t need that sort of equivocating… it’s a damn lousy question to have to ask in the first place. This administration’s mishandling of the economy has caused exponentially more pain than 9-11, Hurricane Katrina and American Idol combined.)

Here’s what Obama says after patting himself on the back for bailing out the auto industry and whatever else with which he’s pleased, and about which no one else gives a damn.

THE PRESIDENT: I think that — probably two things that I would do differently. One would have been to explain to the American people that it was going to take a while for us to get out of this. I think even I did not realize the magnitude, because most economists didn’t realize the magnitude, of the recession until fairly far into it, maybe two or three months into my presidency where we started realizing that we had lost 4 million jobs before I was even sworn in.

THE MANDELMAN: Even YOU didn’t realize the magnitude, Mr. President… even YOU? I think you mean ONLY YOU ignored the growing magnitude of the economic crisis as it has steadily worsened over the past 30 months. Maybe it’s because you were too busy dicking around with a health care bill that no one really cares about, except the Republicans who want it repealed.

And EVERY credible economist one the planet knew of the magnitude but you chose to surrounded yourself with bank-loving sycophants who have, not surprisingly, led us down a path to an ever worsening disaster… and you’re still today doing nothing about it.

THE PRESIDENT: And so I think people may not have been prepared for how long this was going to take and why we were going to have to make some very difficult decisions and choices. And I take responsibility for that, because setting people’s expectations is part of how you end up being able to respond well.

THE MANDELMAN: What difficult choices have been made, Mr. President? I mean specifically… which choices were difficult in your mind, Sir. I mean, handing almost $13 trillion to the Wall Street bankers who caused the crisis? Was that difficult, Mr. President? Was it a difficult choice to do that while deciding to ignore America’s middle class in its entirety?

And EVERYONE with a brain knew this was going to take a long time before anything got better, the only people who didn’t know that were the people who listened to YOU, Mr. President. The rest of us aren’t surprised in the least with what’s happened and is still happening.

THE PRESIDENT: The other area is in the area of housing. I think that the continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected. And so that’s continued to be a big drag on the economy.

We’ve had to revamp our housing program several times to try to help people stay in their homes and try to start lifting home values up. But of all the things we’ve done, that’s probably been the area that’s been most stubborn to us trying to solve the problem.

THE MANDELMAN: The housing market hasn’t “bottomed out” as quickly as you EXPECTED, Mr. President? Is that what you were trying to do, Sir… to cause the housing market to sink to its bottom as quickly as possible?

Well, honestly I didn’t know that was the goal, so now I’ll have to rethink my position on… well, everything. You see, I’ve been working under the assumption that we were trying to save the housing market, not sink it. In fact, I’ve written almost 500 articles related to saving the housing market, and here you’ve been TRYING to sink it as quickly as possible all along… don’t I feel silly.

Well, Sir… if you want to sink it as quickly as possible, stop Bernanke from buying trillions of dollars in mortgage-backed securities with money he’s just printing anyhow… that would have helped sink home values faster. And what was that whole “first time buyer,” and later expanded to second or third time buyer tax credit nonsense you allowed in 2009, Sir? Tax credits like that don’t sink markets quickly, they prolong their decline, Mr. President. Didn’t Larry Summers tell you that, Sir. He knows that for sure, Mr. President.

But, Mr. President… I’m confused… you then say that you’ve been “revamping” your housing program in an attempt to help people remain in their homes, which you seem to think would lift values up. Which is it Mr. President… are you trying to make the housing market go up or down, because I find your apparent confusion on this topic to be quite alarming, while illuminating.

Have you ever taken Econ 101, Mr. President? Econ 102? Intermediate Theory? Home Economics, Mr. President? Anything close, Sir?

I mean, at this point you made such a mess of the housing market that its certain to start falling through the floor faster than ever before, but from your statement I can’t tell whether you think that’s good or bad.

And, Sir… it’s not a fair depiction to say that foreclosures are the area that been most stubborn to your trying to solve the problem. To begin with, I’m no longer even sure you know what problem you’re trying to solve… but if it’s to stop foreclosures, it’s not the “area” that’s being stubborn… IT’S YOU, MR. PRESIDENT.

Mandelman out

3. The True Cost of Bailing Out Wall Street… And No… it wasn’t the $700 Billion in TARP Funds

The $700 billion TARP fund that was a total sham, was nowhere the total price tag of what we’ve done to try to save our insolvent banks at the expense of everything else. Regular readers of Mandelman Matters know all this quite well.

However, finally PBS is covering the story, so who knows… maybe soon we’ll see a major broadcaster take the chance and tell the truth of what gone on these last two years and what is continuing to go on going forward. Maybe… some day…

Until then, here’s PBS on The True Cost of Bailing Out Wall Street.

Mandelman out.

Jul

Mandelman SHOCKS Online Community, Says: “I don’t care about my readers anymore.”

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Loan Modification, Weidner

28233Leave a Comment2011-07-09+05%3A54%3A39Mandelman

If you’re a regular or even occasional reader of Mandelman Matters, you’re reading this now… and waiting for the twist or the punch line, right? You’re thinking… “Oh yeah right… I know him… what’s he saying by saying he doesn’t care about his readers? Okay, you hooked me in… now tell me what you’re talking about.”

But, it’s not like that… sorry to disappoint you… I’ve recently realized that I actually don’t care about my readers. You read me all the time? So what? It’s not like I get a nickel a reader, or anything like that… so read me… read something else, I could care less.

I used to care about my readers but, truth be told, this past week leading up to today, something happened that changed me… and I think you all have the right to know what it was that has caused me to think this way.

You see… today, Dina and Robert Giangregorio of Huntington Beach, California received their permanent loan modification from Ocwen Loan Servicing. Do you remember them? I wrote about them last week… three kids… Robert has “Primary Progressive Multiple Sclerosis, one of the worst types of MS one can have. He only has use of one of his arms and he’s in a wheelchair. The headline to the story I wrote about them was: “Ocwen Loan Servicing Takes Home from Handicapped Because There’s Equity.”

Now do you remember? If not, you’d better click that link and read the article before going on or the rest of this article won’t make nearly as much sense. Like missing “Part One” of something and then trying to just dive in at “Part Two.” It’s never the same as if you had seen the first one.

So, yes… Ocwen sent the Giangregorio’s the documents for their permanent loan modification today, and as you might imagine… they were way beyond pleased… in fact, it’s safe to say that they were overwhelmed. Dina sent me an email right after she heard… all it said was:

“Martin!! I am crying. Words cannot express…”

I understood. I felt the same way, but not for the same reason.

I emailed her back maybe 15 minutes after they learned of the great news and asked her to call me. I wanted to ask if they would be interviewed on camera for a documentary on the foreclosure crisis that I’m filming this summer.

Dina emailed me back right away… she said she needed time to compose herself… calm down a bit… before she could call me. Like I said, they were quite happy that after living through a sale date for their home last Monday, they would not be moving any time soon after all. Quite a relief, I’d imagine.

So, a few minutes later she and Robert called… I was on the speakerphone and as one might expect, they were both thanking me for helping them save their home. Dina told me that she felt as if a cloud had been lifted… I said I understood, even though for me… that cloud was still there.

I said they were welcome and not to give it another thought. Besides, as I told them… I was only a part of it… there were lots of others involved, and those others were really the ones who deserve the credit for making this happen. First of all, CDA Law in Mission Viejo, who are true stars of the loan modification world, jumped in against all odds to represent Dina and Robert and really were the technical experts here, and Julie Greenfield, who is the absolute top of the food chain when it comes to loan modifications, also volunteered to help push the ball over the line. (Both CDA and Julie can be found on my Trusted Attorney list.)

All I did was write about it… it was the others who took action and made Ocwen take notice… they weren’t just “my readers”… they were my “DOERS,” and how I feel about them… well, I think Dina said it best when she said… “Words cannot express…”

It had all started a little over a week ago… my wife had just picked me up from the airport. I had just flown in from Hawaii after meeting with members of the state legislature on issues related to the foreclosure crisis. I wrote their story the following day, I believe. It was hard to write, because it made me angry and sad.

And then, after wiping away a few tears and swearing like a drunk pissed off sailor… down at the very bottom of their article, after I typed “Mandelman out,” I gave out the email address and phone number of Ocwen’s Executive Chairman, and said:

“Want to send Mr. Erbey a note to share your thoughts on the Giangregorio’s situation… Well, by all means… be my guest…”

It wasn’t even 15 minutes later that I received an email… I was being cc’d on an email sent to Ocwen’s Executive Chairman by someone who I had thought was just a “reader,” but now I saw was a “DOER.” I wrote back to her right away, thanking her for doing what she had done.

Minutes later another email… same thing… another DOER was cc’ing me on another email to Ocwen’s Executive Chairman. And then another came in before I could even send another thank you note in response… and then another… and another… and yet another. Some of my readers were DOERS and they had read my article and done something about it.

That went on for a few days.

Then I received an email from a senior executive at Ocwen’s Washington D.C. office. He was responding to an email that I had sent him before I posted the Giangregorio’s story, telling him that I was about to run the story and giving him a chance to comment. I wasn’t expecting to hear back from anyone… I do it all the time before I go after a banker or servicer or government boob… it seems like the journalist-sort-of-thing to do, right? But no one ever responds.

Here’s what Ocwen’s senior exec said in his email to me:

Martin,

Your email was forwarded to me but I have been traveling and didn’t see it until yesterday. I apologize for not getting back sooner.

I understand the Giangregorious story has been posted, but would like to discuss the situation with you if possible. We’ve actually worked very hard on this case, are saddened by it and will continue to do what we can. We have not foreclosed and will continue to try to assist the family within our legal constraints. I can assure you that our commitment to helping distressed homeowners keep their homes with sustainable payment plans is genuine — it is also very much consistent with our own business interests. Since the outset of the mortgage crisis, we’ve worked out solutions for over 100,000 families to avoid foreclosure and are recognized as the industry’s loan modification leader.

But, again, I think it would be worthwhile to talk…would there be a time say later this afternoon or anytime this week for a call?

Thank you…

And then he signed it.

I emailed him back and within an hour or so we were talking on the phone. It was later in the afternoon on the Friday before July 4^th weekend, and with him being in D.C. I didn’t expect the call to last very long… but it did… at least a couple of hours… it was after 7:00 PM East Coast time when we hung up, resolving to talk again after the holiday.

I had expected him to be a nice guy… and he was… but, he was also very smart and we talked about the financial and foreclosure crises in the big picture sense, going back to examine all of the many different factors that led to the meltdown. He knew some “insider” sort of things that I hadn’t known, and I knew some stuff that he was interested to hear about.

I liked him, and I had not expected that to be the case. As he phrased it… we were in “violent agreement” on just about every single issue we discussed. He said he’d send me an article he’d written a couple of years back on loan modifications and the foreclosure crisis, and I said I’d send him links to a couple of hundred articles that I’d written on the subject.

After we hung up, I had two thoughts come immediately to mind:

Wow… maybe he and I can make something happen here… start something that other servicers would see as a success, and then follow. I felt the same way about what had happened in Hawaii… maybe, just maybe… I was gaining on it. And…
OMG… If April Charney and Max Gardner find out that I liked the guy, and that I could possibly work with him on something… they’ll kill me. To say nothing of what my “readers” would think if I said something positive about Ocwen. Someone could have a heart attack.

Well, I’m going to be talking with Ocwen some more… I did genuinely like the guy, so why not? Someone has got to show those on the other side what’s going on from the homeowner’s perspective, and after writing 500 articles on the subject and talking to thousands of homeowners over the last couple of years… it might as well be me.

Also, just as I had posited to myself while sitting in a meeting in Rep. Herkes office in the Hawaii State Capitol building… if I wasn’t here, who would be… to which I answered what was the obvious truth of the matter… NO ONE. There simply wasn’t anyone else, which made me wonder if perhaps I was insane, for a couple of seconds anyway.

So, now it looks like I might be visiting with members of other state legislatures as well. I might even go to Florida and Atlanta to visit Ocwen and see what they’re doing down there…. maybe make a stop in D.C. too. And I decided I would do whatever I needed to in order to finish the documentary I’d been working on for over a year… I wasn’t sure how exactly, without my wife choking me to death in my sleep, but I decided that I had to figure out some way to get it done.

Because that’s what DOERS do… they DO THINGS… they get things DONE… important things.

So, you see… it’s been quite a learning experience this past week or two… although I think I worked 120 hours and missed two nights of sleep, which I can’t keep doing if I expect to be able to DO anything for very long.

As far as my “readers” go, however, well… they can keep reading me if they want… or not… I don’t really care because from now on, I’m going to be concentrating on my “DOERS.” Together, we’re going to DO IMPORTANT THINGS and we’re going to finally bring this unconscionable travesty of justice they call the foreclosure crisis to an end.

And after that, we’re going to start to rebuild America’s working middle class, brick by brick. And one day… perhaps sooner than you might think… this country will once again be a place in which I can know that my daughter’s life will be as wonderful as mine has been… before all this happened… before Wall Street took over and broke the world.

People have asked me numerous times over the last two or three years, why I do what I do… and how I can possibly hope to beat the bankers… and I’ve always replied the exact same way: Because I’m going to win, I assure them. Some also ask me why I’m so passionate about this? And I always reply: Why aren’t you?

You see, when Dina said that she felt that a cloud had been lifted, I understood but I didn’t feel that way at all, because I knew when I hung up with Ocwen that first time that they would modify the Giangregorio’s loan. But, although that would be great for the Giangregorio family, what about the thousands of others all over this country that I didn’t write about? No one should lose a home if there’s a way for them to keep it. Not one person… ever.

Dina and Robert sent me another email shortly after we spoke… it read:

“We cannot express our gratitude for taking such an interest and huge involvement in our situation. We are in awe that we are actually finally being ‘heard’.”

They sent it to me, but it’s a message to all of my readers who are also DOERS. You really did something here… and what you did is a big deal… huge. I’m so proud of you… and thankful… you should be proud of yourselves too. You made a real difference in the lives of many.

And the best part of the whole thing is that even if you’re weren’t a DOER this time around… even if until now you’ve just been a “reader,” it doesn’t matter… ANYONE CAN BECOME A DOER AT ANY MOMENT.

That’s right… even right now… this moment… you can transform yourself from being a useless “reader” to being a DOER of important things. Just say to yourself… assuming no one is around because you don’t want to appear as if you’re talking to yourself…

Starting today… I’m a DOER!

What are we DOERS going to DO? Well, we’re going to figure that out as we go. Every week, I’m going to try to post an article under the heading: “THINGS TO DO… THAT MATTER.” So, when you read that line, you’ll know that after you’ve read the article, there will be work that needs to be DONE… send an email… make a phone call… whatever it is… so, JUST DO IT. (LOL, I just couldn’t help that.)

This is a game of inches… there are no magic bullets or big sweeping solutions, of that I am quite sure. We need to hit singles, not home runs… and sure as shootin’ we’ll win this battle one day… little by little, step-by-step… one day at a time, as they say… (OMG, I think I just mixed enough metaphors and exploited enough clichés to cause myself physical harm.)

Warren Buffet told Bloomberg today that he predicts “Job Growth When Housing Rebounds.” Genius… that man really is a genius… who would have ever thought that solving the foreclosure crisis was so important. Hmmm… maybe I should write something about that point. I’ll have to give it some thought. Thanks for weighing in, Warren… we’ll let you go back to bed now.

Housing doesn’t “rebound” as long as the foreclosures continue unabated, in fact nothing “rebounds” unless someone first throws a ball. We have to DO something to STOP the foreclosure crisis. It’s a forest fire and it will continue to burn until it runs out of forest.

Every time housing prices fall, more people go underwater on their loans. And every time a homeowner goes underwater, they are removed from the real estate market because most of the people that buy homes are not first time buyers, they have to sell their old home before buying their new one. But once underwater, they can’t, so demand for housing falls as more people find that they owe more than their home is worth. And as demand falls, so does price… and that means even more people go underwater.

Once you’re underwater, any of life’s events can lead to foreclosure. An illness… an accident… a divorce… the loss of a job… any of those can lead to a foreclosure when the homeowner is underwater. The Giangregorio’s only fell two months behind and that almost led to them losing their home.

Foreclosures breed foreclosures… period. In Hawaii, Rep. Herkes repeated the phrase several times to others, and I’m sure he’s said it quite a few more times since I was there. He’s a DOER, by the way.

Okay, so that’s all for now… I just thought I’d let my readers know how I feel and why… and I had to give my DOERS the great news about the Giangregorios. Again… thank you from the bottom of my heart.

Oh, and Dina and Robert both agreed to be filmed next week, and I’m really looking forward to that.

But, now I’m off to Palm Desert where my daughter is dancing in a national dance competition this weekend. She goes every year. It’ll be 125 degrees outside, which is miserable, but inside there’ll be 5,000 girls from 5-16 years old all screaming their heads off at the same time, as the Moms try to get them ready for their next number. So, when you think about it… 125 degrees really isn’t even that hot… LOL.

Mandelman out.

Jun

Ohio’s Former AG Marc Dann Talks Hawaii & Fighting Banks – A Mandelman Matters Podcast

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Loan Modification, Weidner

27962Leave a Comment2011-06-30+09%3A06%3A33Mandelman

Paraphrasing from Wikipedia… Marc Dann was born March 12, 1962, in Evanston, Illinois. He earned a bachelor of arts degree in 1984 from the University of Michigan and a law degree in 1987 from Case Western Reserve University. He practiced law in Youngstown, Ohio.

Dann ran for the Ohio State Senate in 2000, but lost to Tim Ryan. From 2001 to 2002, Dann served as a member of the Liberty School District board of education. After Tim Ryan won election to Congress in 2002, Dann convinced the state Senate’s Democratic caucus to appoint him to fill the balance of Ryan’s term, and he won election to a full term in 2004.

Dann then announced his candidacy for Attorney General of Ohio on November 14, 2005, and won 71% of the vote in the 2006 Democratic primary against former Cleveland Law Director Subodh Chandra. He won the general election in November 2006 by defeating Ohio’s State Auditor Betty Montgomery, a former attorney general. Marc was sworn in as the 47th Ohio Attorney General on January 8, 2007.

Marc Dann is no friend of the banks. As Ohio’s top law enforcer, he took on the nation’s largest insurance brokerage, the mortgage lending industry, student loan providers, and the big three credit rating agencies, among numerous others. His investigations into Wall Street’s malfeasance led many to compare his work as Ohio’s AG to that of New York’s AG, Eliot Spitzer.

And yes, Dann left office after a scandal having to do with three of his aides who were fired after an investigation found evidence of sexual harassment. According to Dann…

“I did not create an atmosphere in my public and personal life that is consistent with the important mission of the Office of Attorney General. I am heartbroken by my failure to recognize the problems being created and by my failure to stop them.”

Subsequently, Dann also admitted an extramarital affair with an employee, publicly apologizing to his wife and his supporters, and telling reporters:

“I’m embarrassed. I have taken responsibility for what I’ve done.”

Dann said the affair was consensual and that the relationship occurred during a difficult time in his marriage, but that it “was wrong and I deeply regret it.”

As far as I’m concerned, that’s more than enough about that. And just so there are no questions as to where I stand on such things… I don’t care about these sort of personal matters in the least. As far as I’m concerned, marriage is damn hard… and stuff happens… and it’s none of my business. I don’t think it necessarily reflects on the individual’s ability to do his or her job. Enough said, right?

While Marc was in office he was a very vocal opponent of Wall Street, and the mortgage servicers who were… and still are… destroying his state with unnecessary and even illegal foreclosures. And since he’s left office, he’s defended Ohio homeowners at risk of foreclosure, sued foreclosure mill attorneys, and even filed a couple of class action lawsuits… from his DannLaw blog:

“On February 7, 2011, attorneys Marc Dann and James Douglass filed two similar class action lawsuits – one against US Bank Home Mortgage and the other against Bank of America and BAC Home Loan Servicing, LP. Both banks have failed to offer permanent loan modifications to eligible homeowners participating in good faith in the Home Affordable Modification Program (HAMP) despite entering into agreements with these homeowners and accepting Federal funds to participate the program.”

~~~

“Banks Like Bank of America and US Bank are not negotiating in good faith. In both of these cases the bank made written promises to the borrowers that the bank subsequently broke.,” said Dann. “In breaking their promises to these homeowners, Bank of America and US Bank are also breaking their promise to the US government and to the taxpayers. The net result for the Hlavsas and the client in the US Bank case is that there is no resolution to the ongoing stress and uncertainty of foreclosure. This is exactly the type of problem the HAMP program was designed to solve. ”

I’ve gotten to know Marc Dann fairly well over the last several months. We met as guests on a conference call sponsored by an Ohio title insurance company. While on that call, Marc told me that as Ohio’s AG, he had read my blog every day, which was very nice to hear, and following that call he contacted me to say that he would soon be coming to San Diego for a conference and wanted to meet me for dinner.

So, of course, I went. We had a wonderful dinner and talked non-stop for maybe four or five hours. Obviously, we discovered that we had a great deal in common, and I think both of us came away having learned a lot from the other. He also introduced me to Elizabeth Warren the following morning, and for that I could never thank him enough.

So… here he is… Marc Dann, Ohio’s former Attorney General talking about the foreclosure crisis and specifically about what’s happened in Hawaii since the legislature passed SB 651, the toughest foreclosure law in the country… and since Fannie Mae announced that they would not participate in the state’s non-judicial foreclosure process as a result of the new mandatory mediation component. Marc explains what he thinks drove Fannie’s controversial decision… and a whole lot more.

Marc Dann is on the front lines of the ballte against the banksters and you’ll want to hear what he has to say about where we’ve been, where we are today… and where we’re headed from here.

Mandelman out.

Click play… it’s a Mandelman Matters podcast with former Ohio AG, Marc Dann.

Jun

Ocwen Loan Servicing Takes Home from Handicapped Because There’s Equity

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27809Leave a Comment2011-06-27+10%3A44%3A27Mandelman

Well, that’s a fairly inflammatory headline, wouldn’t you say? I certainly meant it to inflame, or perhaps even enrage… because I believe it to be the truth. So, how about we make a deal: I’ll give you the facts of the case and let you decide from there. If you agree with my assessment, then you send this article to everyone you know on the planet and let’s see if we can’t stop this horrific injustice from taking place.

Do we have a deal? I sure hope we do.

This is the story of Dina and Robert Giangregorio of Huntington Beach, California. That’s them, just above. They have three beautiful children who they’ve raised in their home for the last 17 years. Robert has “Primary Progressive Multiple Sclerosis, one of the worst types of MS one can have. Today, only one arm works, he is in a wheelchair… has a colostomy bag.

They pay someone to come and shower him several times a week. Dina says that it wouldn’t be safe for her and the kids try to lift him, which to me is the least of all reasons to have someone come in to help him shower.

They had to have the home “handicapped,” which thank God they were finally able to do with some financial assistance from the MS Society. Last year they transformed a small bathroom into a roll-in shower, for example. It has not been an easy path they’ve been on, and there but for the grace of God go us all.

Their 17 year-old son just graduated from high school, their 15 year-old son will be a junior next year, and then there’s their 10 year-old daughter.

Last year, Robert had to have some medical procedures that didn’t go all that smoothly. He ended up having a pump inserted into his stomach… it’s about the size of a hockey puck… and it releases medicine. It was a difficult time, Dina had to provide almost full-time care for a few months there, and couldn’t get to work much; she owns her own successful photography business, by the way.

Robert was a General Manager for Clark Drugs/Savon. He had worked his way up and would have soon been some type of regional manager, had he not been afflicted with MS.

They didn’t own their home at first… they rented it for six years as they saved up a down payment, but even still, they had to use money from his 401(k) plan to get it done. They were high school sweethearts who married and wanted more than anything to own the home in which they would raise their family. Pretty responsible sorts, if you ask me.

Robert had checked the box at work for disability coverage when he went to work for his employer… and thank God once again… for that. Social Security approved him as being disabled, but it was still a big fight with Prudential to get his disability checks going. Apparently, Prudential thought Robert could keep working in his condition, I mean… why not?

They finally did approve him, of course… Dina’s back to work too, so that’s all behind them now.

Last year, with Dina providing full-time care for Robert, along with being a super-mom, they fell a couple of months behind on their mortgage payments. But, in month three… when they tried to start catching up by making a single payment, Ocwen said they had to pay all three… one payment would not be accepted.

The couple told Ocwen of their tragic situation and Ocwen told them they should apply for a loan modification… and so they did… roughly a year ago… maybe a little more than a year ago.

After applying for the Obama plan, or HAMP, they were told they did not qualify… they apparently made too much money. But, Ocwen said… no to worry… they’d try again… only to get the same result the second time. Then it was try applying for an in-house modification, which they did, only to be turned down once again… and this time because they didn’t make enough money.

And the loan modification fun was just getting started.

Ocwen was maintaining that they should not worry, as their file was always in review or underwriting… or perhaps it was in review or in underwriting. And then there were times when it was in review or in underwriting. Ocwen’s representatives continually assured them that everything looked good and that they were not going to sell their home out from under them. Relax, Ocwen essentially said… have a little false hope.

Then last January 30^th the Giangregorios received a 3-page letter from Ocwen via regular mail. It said that they had been approved for a “streamlined modification,” that would have lowered their monthly payment by about $400, but tacked on a fairly large balloon payment in 17 years. Not a great thing, they thought, but it would save their home so why not?

Here’s what it said on the 3-page letter the Giangregorios received from Ocwen last January 30th:

“You have been selected to receive a special streamlined loan modification. ACT NOW! Because this I If this great offer does not meet your financial situation, call us at number, there are other options that are part of this initiative program, but the key is to ACT NOW, because all of the options are tied to this initiative program and it ends on January 31, 2011.”

The couple did have a few questions, however, and since the letter said the offer would expire THE NEXT DAY, they didn’t have much time to ask them.

They called Ocwen and the first person they spoke with had no idea what they were talking about, but that’s to be expected because that person was in India, so it’s easy to see how they might have missed it. The next person they spoke with at Ocwen did know of the offer, but couldn’t answer any questions… they were given another number to call… Ocwen’s research department, and that department did their best to answer the questions they had.

Just to make sure they weren’t about to do anything incredibly stupid, they decided to check with a local financial planner they knew, and all told, they decided to accept Ocwen’s offer. They went to get the certified funds that accepting the offer required… $2,078.66… and the next morning they called Ocwen to tell them the good news and arrange to transfer the funds.

Ocwen, however, had some less than good news for the Giangregorios… turns out, the offer had already expired. Too late… you just missed it. A few hours difference and you might have saved your home from foreclosure. Darn the luck, you missed the deadline. Too bad. That’ll teach you to have questions. You should have signed without questions… but no… now you’re nothing but an irresponsible borrower once again.

See, isn’t this getting more and more fun? I told you it would. Well, just wait… because the real fun is yet to come.

Once again, Ocwen said the couple shouldn’t worry, there was no foreclosure and no sale date scheduled, and they would be reconsidered for a modification. But soon they started receiving scarier and scarier letters now from a company by the name of Western Progressive about the threat of foreclosure and the sale of their home. Each time another letter would arrive in the mail, Dina Giangregorio would call Ocwen and each time she was told not to worry they were still under review for their modification and that the servicer would not foreclose as long as they were being considered for a loan modification… so, there was nothing to worry about. Then they’d ask her to re-send some paperwork or documentation she had already sent in multiple times.

On May 19^th they received a notice from Western Progressive saying that their home would be sold on June 6, 2011. Dina called Ocwen immediately and spoke with Ocwen’s representative, Amrit Oswal. She told Amrit that she had contacted Western Progressive and they had told her that to them it appeared to be a “seamless foreclosure,” and that their home would be sold on June 6^th at noon, just as the notice had shown. But Amrit told Dina that this was not the case.

According to Amrit there was NO SALE DATE scheduled, and he told Dina to have Western Progressive contact Ocwen.

She called Western Progressive to ask that they contact Amril Oswal at Ocwen, and was told that they would update Ocwen’s system. When she called Ocwen back roughly 30 minutes later, although Amrit was not available to take her call at that time, she was told that in fact there was a sale date scheduled… June 6, 2011 at noon.

Dina was now understandably upset. She had made countless calls to Ocwen throughout the past year and was repeatedly told that everything was fine and that she was under consideration for a modification. Now, all of a sudden, with absolutely no explanation, her home was to be sold at a trustee sale. Again she explained why they had fallen behind in the first place, that things had stabilized since then, that Ocwen had not allowed them to try to make up the payments they had missed, but rather had advised them to apply for a loan modification.

OCWEN made appointment with her and her husband for the coming Friday evening at 7:00 PM. It was very important, they told her, that she be available for a call at that time because an OCWEN “loan specialist” would be calling to discuss options and review their paperwork. They said it was very important that she have all of her paperwork ready for that call.

At 7:00 PM, Dina and Robert Giangregorio were sitting with their paperwork at the ready… staring at their telephone. No call ever came. At 7:30 PM Dina tried calling Ocwen… they were closed, but on a positive note, she was invited by Ocwen’s recorded voice to call back during normal business hours.

Early Saturday morning the Giangregorio’s phone rang. It was OCWEN calling to inform them that their loan was past due. The caller knew nothing of their situation. Dina thanked them for calling and hung up the phone.

She glanced down at one of the letters she had received from Ocwen over the last several months. On the letter was printed the following phrase:

Helping Homeowners is What We Do.

Ocwen Loan Servicing

Epilogue…

Dina called me to tell me her story this past week, and I’ve done my best to re-tell it to you in detail. However, you should also know that in the interest relative brevity, I’ve left out countless phone calls and the re-submitting of documents, but rather focused only on the lowlights of the couple’s experiences dealing with Ocwen Loan Servicing.

Now, I’ve heard stories like Dina’s… oh, I don’t know anymore… maybe a few thousand times, and not just about Ocwen, but also about EVERY SINGLE OTHER MORTGAGE SERVICER IN THE COUNTRY. How often do I hear a story like Dina’s, you might wonder. Not more than EVERY SINGLE DAY, SEVEN DAYS A WEEK AND 365 DAYS A YEAR.

There are a couple of key facts about Dina’s story that I think bear repeating for additional emphasis.

The couple fell behind for a reason that defines the word “hardship.” Being afflicted with MS can happen to anyone of us at any time. That this family has remained together and positive about their future is a testament to their love for each other.
They weren’t even asking for a modification, they were only trying to make up a couple of back payments when this saga began, but Ocwen wouldn’t take fewer than the three payments they owed at that time. All they needed was a second chance to get current now that their lives had stabilized, Robert’s disability income was coming in and Dina was back at her job. It was Ocwen that suggested that they apply for a loan modification.
If Ocwen had been honest with Dina from the day they had refused her one payment and told her they would move to foreclose, then per California law, the Giangregorio’s would have had 90 days from the date they received their Notice of Default, plus a couple of weeks after that, to make up the back payments and save their home. And I’d bet money they would have done it.
Instead Ocwen behaved just like a servicer. They deceived her into believing that they would modify her loan because of the hardship her family had endured, and then proceeded to torture her for over a year with empty promises and false hope… right up until May 19^th, when they finally verified that her home was to be sold on June 6^th. And even then, they told her to prepare for a phone call from one of Ocwen’s “loan specialists” that never came.
Ocwen could have lowered the couple’s interest rate from 6% to 5%, offered them a repayment plan for the handful of back payments and everything would have been fine. At the very least, Ocwen could have offered them a simple repayment plan for the back payments… that could have worked too.

Of course, there is one more thing of which the reader should be aware: The Giangregorios have equity in home; they are not “underwater.” The amount of equity is less than $100,000… but still… there’s equity. All other factors support a loan modification or repayment plan except that one: equity.

I don’t know what to say to them now, except that I guess they should have borrowed more… then they might have saved their home? I guess I should tell them that they were too responsible to save.

I called a very experienced attorney who helps homeowners get loan modifications and that I know quite well to see if she could make a call to Ocwen and she said she would try. She also said the following:

“Well, Martin… this is awful, but it’s also no surprise, it’s nothing new. They all do this. They want to foreclose. And how is it that they all have the same dysfunctions. They always blame the borrower. It’s the same crap over and over again. I just don’t understand how they can keep getting away with it. This is awful, just awful.”

She did try but got no return calls, so keeping in mind that the Giangregorio’s home was scheduled to be sold on Monday… which is tomorrow by the way… I personally tried reaching Ocwen at every phone number and via every email address I could find on their site and elsewhere. I left voice messages with the Ocwen Ombudsman and sent the Ombudsmen emails numerous times… nothing… not a single call or email in reply. I tried the same with Ocwen’s senior management… nothing… nary a peep in response.

Had the Giangregorios won the lottery on Thursday or Friday… just days before their home was to be sold at the Trustee Sale, they couldn’t have reached Ocwen to pay off the home… and the sale would proceed. Fannie Mae would walk into the sale, sign a credit bid and their home would go into the vast inventory of homes that sit vacant for no reason on the books of the failed, corrupt mortgage behemoth, now funded by the taxpayers of this country.

All while our government says they want loans to be modified… that they want foreclosures to be prevented if possible… that they want to help the “responsible homeowners.” As long as they don’t have equity, that is. And the really good news is that Ocwen just bought up Litton Loan Servicing and Home EQ servicing, so they obviously feel they are profitable enough to expand their operations.

And that’s just what this crisis situation needs, don’t you think… more like Ocwen?

I’ve paid a few bucks in taxes in my lifetime… and I don’t want to see the Giangregorios lose their home. Does anyone anywhere? I mean, besides the severely autistic chimpanzees that are running Ocwen.

On Ocwen’s website it says that they are a founding sponsor of the NeighborWorks^® America- Ad Council campaign for foreclosure prevention. What the hell does that mean?

Ocwen’s Website also has a page titled: Ocwen’s 15 Point Loan Servicing Customer Commitment Plan, where it says such things as, “We promise you our total commitment to provide the highest quality in customer service.” And point #3 of fifteen says the following:

“If your loan becomes delinquent, Ocwen will assist you in a professional and consultative manner to work out a fair and reasonable resolution, such as a repayment plan, to avoid a foreclosure.”

A Message for Ocwen’s Senior Management Team…

As my regular readers would no doubt attest, I’ve been quite restrained in my writing of this expose about Ocwen. Frankly, I have meetings in the morning, and I didn’t want to get myself any more upset than this story has already made me.

Also, call me naïve, but I have to believe that this is all some sort of gigantic oversight, and you’re going to learn of it… correct it immediately… and the Giangregorios are going to live in their home… happily ever after, as the saying goes.

But let me assure Ocwen’s President, Ronald M. Faris, and Mr. William C. Erbey, the company’s Executive Chairman of something… if that’s not the case, then I am nowhere near done with you.

And if you want to know just what I mean by that, I would only suggest that you Google me. Don’t worry, I’ll be real easy to find. In fact, I’ll come up right at the top of your Google search… just like when I write about you.

Mandelman out.

Want to send Mr. Erbey a note to share your thoughts on the Giangregorio’s situation…

Well, by all means… be my guest:

Ocwen Financial Corporation

William C. Erbey, Executive Chairman

Phone: (561) 682-8520

Email: William.Erbey@Ocwen.com

Jun

Ocwen Loan Servicing Takes Home from Handicapped Because There’s Equity

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27808Leave a Comment2011-06-27+10%3A44%3A27Mandelman

Do we have a deal? I sure hope we do.

Their 17 year-old son just graduated from high school, their 15 year-old son will be a junior next year, and then there’s their 10 year-old daughter.

Robert was a General Manager for Clark Drugs/Savon. He had worked his way up and would have soon been some type of regional manager, had he not been afflicted with MS.

They finally did approve him, of course… Dina’s back to work too, so that’s all behind them now.

The couple told Ocwen of their tragic situation and Ocwen told them they should apply for a loan modification… and so they did… roughly a year ago… maybe a little more than a year ago.

And the loan modification fun was just getting started.

Here’s what it said on the 3-page letter the Giangregorios received from Ocwen last January 30th:

“You have been selected to receive a special streamlined loan modification. ACT NOW! Because this I If this great offer does not meet your financial situation, call us at number, there are other options that are part of this initiative program, but the key is to ACT NOW, because all of the options are tied to this initiative program and it ends on January 31, 2011.”

The couple did have a few questions, however, and since the letter said the offer would expire THE NEXT DAY, they didn’t have much time to ask them.

See, isn’t this getting more and more fun? I told you it would. Well, just wait… because the real fun is yet to come.

According to Amrit there was NO SALE DATE scheduled, and he told Dina to have Western Progressive contact Ocwen.

She glanced down at one of the letters she had received from Ocwen over the last several months. On the letter was printed the following phrase:

Helping Homeowners is What We Do.

Ocwen Loan Servicing

Epilogue…

There are a couple of key facts about Dina’s story that I think bear repeating for additional emphasis.

The couple fell behind for a reason that defines the word “hardship.” Being afflicted with MS can happen to anyone of us at any time. That this family has remained together and positive about their future is a testament to their love for each other.
They weren’t even asking for a modification, they were only trying to make up a couple of back payments when this saga began, but Ocwen wouldn’t take fewer than the three payments they owed at that time. All they needed was a second chance to get current now that their lives had stabilized, Robert’s disability income was coming in and Dina was back at her job. It was Ocwen that suggested that they apply for a loan modification.
If Ocwen had been honest with Dina from the day they had refused her one payment and told her they would move to foreclose, then per California law, the Giangregorio’s would have had 90 days from the date they received their Notice of Default, plus a couple of weeks after that, to make up the back payments and save their home. And I’d bet money they would have done it.
Instead Ocwen behaved just like a servicer. They deceived her into believing that they would modify her loan because of the hardship her family had endured, and then proceeded to torture her for over a year with empty promises and false hope… right up until May 19^th, when they finally verified that her home was to be sold on June 6^th. And even then, they told her to prepare for a phone call from one of Ocwen’s “loan specialists” that never came.
Ocwen could have lowered the couple’s interest rate from 6% to 5%, offered them a repayment plan for the handful of back payments and everything would have been fine. At the very least, Ocwen could have offered them a simple repayment plan for the back payments… that could have worked too.

I don’t know what to say to them now, except that I guess they should have borrowed more… then they might have saved their home? I guess I should tell them that they were too responsible to save.

“Well, Martin… this is awful, but it’s also no surprise, it’s nothing new. They all do this. They want to foreclose. And how is it that they all have the same dysfunctions. They always blame the borrower. It’s the same crap over and over again. I just don’t understand how they can keep getting away with it. This is awful, just awful.”

And that’s just what this crisis situation needs, don’t you think… more like Ocwen?

On Ocwen’s website it says that they are a founding sponsor of the NeighborWorks^® America- Ad Council campaign for foreclosure prevention. What the hell does that mean?

“If your loan becomes delinquent, Ocwen will assist you in a professional and consultative manner to work out a fair and reasonable resolution, such as a repayment plan, to avoid a foreclosure.”

A Message for Ocwen’s Senior Management Team…

But let me assure Ocwen’s President, Ronald M. Faris, and Mr. William C. Erbey, the company’s Executive Chairman of something… if that’s not the case, then I am nowhere near done with you.

Mandelman out.

Want to send Mr. Erbey a note to share your thoughts on the Giangregorio’s situation…

Well, by all means… be my guest:

Ocwen Financial Corporation

William C. Erbey, Executive Chairman

Phone: (561) 682-8520

Email: William.Erbey@Ocwen.com

Jun

Fannie Mae Chickens Out of Phone Conference with Hawaii’s Homeowners

By Mandelman | Foreclosure Blog News, Housing & Economic Research, Weidner

27819Leave a Comment2011-06-26+10%3A16%3A37Mandelman

As my readers likely know, I’ve spent this past week in Hawaii, not on vacation unfortunately, but meeting with members of the Hawaii state legislature, several community leaders, and various attorneys who represent homeowners at risk of foreclosure and fighting to stay in their homes.

It all started a couple of months ago when Hawaii passed what I referred to as “the toughest foreclosure bill in the nation,” which among other things, required servicers pursuing a non-judicial foreclosure, to provide the chain of title documents, including a properly endorsed note, any assignments, applicable allonges, and the rest, 14 days prior to scheduling a mandatory mediation in advance of foreclosure.

The fact that it passed was astounding, the banking lobby hated the bill and did whatever they could to stop its passage, but Hawaii’s legislature wasn’t buying what they were selling and Governor Abercrombie signed SB 651 into law a couple of days after its passage.

The question on everyone’s mind, or at least on the minds of those involved in the foreclosure crisis and the battle against the bankers and servicers, was… what would the bankers do in response to the new law. Would they participate as designed, or would they find some way to circumvent the whole thing, while appearing totally reasonable to most of the population?

Well, two weeks ago on a Sunday we got the answer when Fannie Mae announced that they wouldn’t be using the nonjudicial foreclosure process now requiring mediation, going forward they would only foreclose using the state’s judicial foreclosure process.

I wrote about Fannie’s announcement and fired off a few emails to members of the state legislature and a week later, I was landing in Honolulu and the following morning I was on my way to my first meeting at the state Capitol building to meet with Rep. Herkes and maybe a dozen staffers from various offices.

The meeting went very well, I talked to the group about what I’ve seen on the mainland in every state over the last three years, as far as foreclosures and loan modifications were concerned, and what I felt were important components to improving things in Hawaii going forward.

I found the people in Hawaii’s government and community organizations to be genuinely caring, concerned, empathetic individuals… you know, all the things the bankers are not. For example, in response to Fannie’s announcement, there was talk of circulating a petition asking, I suppose, that Fannie reconsider its position and agree to participate in the state’s new mediation program.

A petition? To get Fannie Mae to change its mind about something? Well, that just struck me as down right adorable.

Fannie Mae is a bankrupt mortgage behemoth whose culture has been shaped by corruption, accounting improprieties, and good old fashioned croneyism. In the book about the financial meltdown, “All the Devils are Here,” which was written last year by Bethany McClean and Joe Nocera, Fannie Mae is discussed at some length.

Having interviewed numerous informed sources, the authors explain that in the 1990s, Fannie ramped up its “cut them off at the knees” strategy against its political enemies. The tactics employed in this strategy, according to Wikipedia, included massive lobbying efforts, neutering of the OFHEO (its 1992-created regulator), creating a “partnership office” network to court the politically powerful with pork, giving high level employment to the well connected, making large campaign contributions, and threatening those critical of the organization, like FM Watch, with retaliation.

In fact one of McLean’s and Nocera’s sources compared Fannie Mae to Tammany Hall, which, in case its been a few years since you took American History 101, was the poster child for graft and political corruption in the mid-19th century and into the 20th century, most infamously under the leadership of William M. “Boss” Tweed. And you can go ahead and call me a cynic, but I just don’t see Boss Tweed changing his mind because of a petition being signed.

So, while I was meeting at the Capitol last Tuesday, I learned from one of the staffers that there was to be a conference call on Thursday of this past week with Fannie Mae and representatives from FACE, along with staffers from Rep. Herkes and Sen. Baker’s offices.

One staffer asked me what I thought should be asked of Fannie Mae and I suggested that they ask very directly what had driven their decision to only use the state’s judicial foreclosure process and not to participate in the non-judicial process’s new mediation program.

So, a contact I have at the Capitol said she would call me and let me know how the call went, but when she called me today… she told me that the call never went. Apparently, Fannie Mae backed out at the last minute.

Honolulu’s Civil Beat reporter, Robert Brown covered the Fannie conference call, saying in his article:

“Staff for state Sen. Roz Baker as well as staff for Rep. Bob Herkes, both co-introducers of the bill, were invited to join in the call. So were representatives from Hawaiian Community Assets and Catholic Charities. A Maui homeowner going through the foreclosure process would also be listening in.

But FACE policy director Kim Harmon said the presence of two reporters on the call — Civil Beat and Honolulu Star-Advertiser’s Andrew Gomes — was too much for the government controlled mortgage finance company.”

It seems that FACE received an email 45 minutes before the call was scheduled to take place, from a Vice President at Fannie Mae by the name of Terri Davis, who is Fannie’s VP for Single Family Business in Washington D.C. The email message said that the fact that two reporters were to be on the call came as a surprise to the folks at Fannie Mae, and was cause for concern on their part.

Kim Harmon, being the consummate professional that she is, had sent Fannie a list of who would be on the call. I understand the impulse, and maybe it was even the right thing to do, but it’s no way to ambush Fannie Mae people, and unless Fannie is ambushed, wrestled to the ground and hog-tied, they’re not talking to anyone who might repeat whatever they say.

Just after 10:00 AM, FACE notified everyone that was to be on the call that Fannie had cancelled it.

Civil Beat’s Robert Brown says he could not reach a representative of Fannie for an explanation. His article quoted from an email sent by FACE’s Kim Harman explaining why Terri Davis at Fannie canceled the call, as follows:

When some of the Fannie Mae people found out that there would be a homeowner on the call, “that really changes the discussion and we did not feel ready for that”.

Perfectly understandable. How can we possibly expect Fannie Mae to be ready to talk to a homeowner?

Hawaii’s congressional delegation met with FNMA this morning about this same issue and “that meeting was longer that we expected, and we did not feel like we had the right people scheduled on our end for the discussion that you probably wanted to have”.

It all sounds very complicated. I thought we just wanted to know why Fannie was opposed to mediation.

Because of the attention that FNMA’s announcement has gotten from Hawaii, FNMA claims they have now posted more information about their June 10 announcement to servicers in Hawaii. Here is the link they gave me, see what you think: https://www.efanniemae.com/sf/servicing/delmgt/index.jsp

What the heck are they talking about? This answer is entirely non-responsive. I clicked the link and I don’t get it.

Kim went on to say that she had received an update from our congressional delegation via Jun Yang (FACE organizer) who is in DC this week, and apparently Hawaii’s delegation was less than satisfied with Fannie’s responses and that “FNMA does not understand the foreclosure situation ‘on the ground’ in Hawaii.”

Yeah, well let me assure you that Fannie Mae understands just fine. It’s just that they don’t care one way or the other… that’s the problem there. They understand… they simply do not care.

Anyone feel like starting a pool on when Bank of America will announce that its following suit and going all judicial as well? Because they’re the only organization I can think of that may just care even less than Fannie Mae.

Mandelman out.

P.S. I’ve had to extend my trip until next Tuesday in order to meet another assembly representative, but I’ll be back at my desk on Wednesday and will fill you in on more of what’s happening in Hawaii then. Aloha!

Jun

Bringing Up the REAR – Jamie Dimon, Chairman & CEO, JPMorgan Chase & Co.

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Loan Modification, Weidner

27603Leave a Comment2011-06-19+21%3A47%3A57Mandelman

When it comes to homeowners applying for loan modifications, mortgage servicers come in three types: Terribly Annoying, Unbearably Annoying, and Make-You-Want-to-Burn-Your-House-to-the-Ground Annoying.

Some people laugh at that description, and I might have laughed at it too, before I came to realize that it was such a dramatic understatement.

Not only are all mortgage servicers absolutely God-awful to deal with all the time and in every conceivable way, but they haven’t changed even one iota in three years. They were entirely incompetent when they started modifying loans and they are every bit as incompetent today. It’s really quite stunning… the only thing they do consistently is perform poorly.

A couple of years ago, with homeowners all saying how difficult it was to reach their servicers, I asked some Bank of America management types why the bank was having such a hard time answering the phone. Was it all those buttons? Because I would understand that… I hate all those buttons.

As I told them, I was asking because I happened to be one of the 44 million people carrying a Bank of America Visa card around, and I had discovered that I could call the toll-free number on the back 24 hours a day, 7 days a week and within a couple of minutes talk to a live person that could tell me where I bought gas last Thursday and how much interest I paid in 2005. But apparently, were I to have a question about a loan modification… oh no… Bank of America couldn’t seem to answer the phone? Is that what BofA was expecting me to believe?

Chase is no better… might even be worse, although in a race to the bottom it does get murky towards the finish line. For the longest time Chase maintained that they simply weren’t able to hire enough people to handle the volume of calls they were receiving related to loan modifications, as if the whole foreclosure-modification thing had caught them entirely off guard. So, wherever it was that Chase was, the financial sector was apparently running at full employment.

But then I met Jared, an ex-employee of Chase’s servicing company. He had worked in the foreclosure department for 18 months, left on very good terms, and agreed to an interview.

Jared explained that it was his responsibility to make sure foreclosures were being completed in compliance with Fannie’s guidelines, and to document everything that went on with each file. “Everything the homeowner sends in has to be scanned, copied and attached to their file,” he said.

So, how come servicers are always losing paperwork submitted by borrowers, I asked? He said that didn’t happen at Chase. “We never lost anything, it’s was a big part of how you’d be awarded the maximum bonus of $12,000 a year.”

I must be thinking about Wells Fargo, I replied under my breath.

“Half of the bonus was tied to documenting your files in case investors wanted to audit them,” and the other half was based on how fast you’d foreclosure… at Chase they say that the ‘perfect foreclosure’ is 120 days,” he said.

Well, that must have been something to aspire to, I replied. I mean, not every foreclosure can hope to be “perfect,” right? He nodded in agreement, not quite sure of my meaning.

Jared recalled what his boss had told him during his first week on the job: “We’re in the foreclosure business, not the modification business.”

“Foreclosures are a no lose proposition for servicers,” Jared explained. “The servicer gets paid more to service a delinquent loan, and they get to tack on extra charges. If the borrower reinstates, which is rare, then the borrower pays the extra fees. If the borrower loses the house, then the investor pays them. Either way, the servicer gets their money.”

What about modifications, I wanted to know.

“Their whole focus is to foreclose, not to modify. They make borrowers jump through every hoop so that when something fails to get done on time, they can deny it and foreclose. That’s what it seemed like to me, anyway,” explained Jared.

I told him that it seemed like that to me, too.

It was all starting to make sense to me. They weren’t trying to figure out how to modify… they were trying to find a reason to foreclose.

That had to be why so many of the stories about modifications sounded like they came straight from the reality television show: “The Amazing Race”.

“You have exactly 11 hours to sign and notarize this form. Then deliver three copies to one of three addresses in your home city between 3:00 PM and 4:30 PM on Thursday. The catch is that you must arrive by elephant. When you arrive at your destination a small Asian man wearing one red shoe will give you your next clue. You have exactly $3.95 to complete this leg of THE AMAZING CHASE!”

It’s easy to laugh about… unless you’re the one trying to hail an elephant in Stockton, California.

But, what about modifying loans to avoid foreclosures whenever possible? How could the servicers get away with this sort of institutional behavior? Were they trying to torture people and destroy all of the equity in the country? Why?

Each night, I prayed for the answer to come… Dear Lord, I would say quietly to myself so my wife wouldn’t slap me for praying about HAMP… help me to understand… send me a sign…

And, sure enough HE did… on CNBC. It was during an interview with JPMorgan Chase’s CEO, Jamie Dimon when the light began to shine through the darkness…

“Giving debt relief to people that really need it, that’s what foreclosure is,” Dimon said. They (Homeowners) are probably better off going somewhere else, because they get relieved almost 100% of the debt through foreclosure.”

Oh, no he didn’t. Did he just say what I thought he said? He has got to be the most astonishingly arrogant, out-of-touch, uncaring jackass I have ever come across. I don’t even think The Donald would say something like that.

Foreclosures weren’t bad for people… they were more like a gift… a way of providing much needed relief from the burdens of having a home in which to live. Foreclosures weren’t debt collection… they were debt forgiveness.

Rejoice, people, rejoice! Rejoice and revel in the fact that you’ve got thirty days to pack your crap and move out of your house!

At that very moment I knew two truths to be self-evident:

I had found the source of the problems with mortgage servicers… bankers. I don’t know why I hadn’t seen it clearly before.
I would feature that obnoxious, hardhearted and seriously twisted man in my column because without a doubt he is one of the biggest REAR ENDS mankind would ever come to know.

Mandelman out.

Jun

FOR THE FATHERS

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

9385Leave a CommentFOR+THE+FATHERS2011-06-19+10%3A48%3A04Mandelman

Re-posted from last year by special request, and because it’s Fathers’ Day!

I’m a father and there’s no father in the whole world happier than I am about being a father. I love my daughter more than words could ever express, and if I had one wish, without hesitation it would be to be able to relive my life with my daughter over and over for eternity. Every second I spend with her is the best moment of my life, and I hope we are together forever.

There’s nothing to compare to fatherhood. In fact, someone once asked me to recount one of my life’s most embarrassing moments, and for a moment I considered telling them about the time…

… It was just after a big rain storm, and I was driving my car with the window open, waiting to turn left at the light, staring out the window, just daydreaming for a moment, head leaning to my left, supported by my hand, and apparently with my mouth open just a bit, when a car turning in the oncoming lane passed through a six or eight inch deep puddle of water that was exactly 90 degrees to the side of the car, soaking me from head to toe, as if standing under a waterfall, but more importantly, filling my mouth with puddle so entirely, so unexpectedly that I believe I lost all composure for several moments.

… Or, there was the time, back in second grade, when I was running extra fast to impress Susie Mulvahill, while playing tag in the playground during recess, when I failed to notice one of the eight inch wide, vertical iron girders that rose from the cement to support the four story tall fire escapes that stood on either side of the old red brick school building that was Wightman School… girders that had been painted black, but should have probably been “Alert Yellow,” and I was running at full speed when I slammed straight into the unforgiving iron and knocked myself out, only to remember being awaken by a teacher and gaggle of classmates all yelling, “wake up!”.

… Or, there was the time when I was eleven and, against the advice and strong objections of my parents, I went swimming far too soon after eating a large Italian Hoagie and… well, maybe we don’t need to talek about that one. I don’t think we know each other well enough for that one.

Anyway… I decided instead to say that my most embarrassing moments were all of those in which, before my wife and I had a child, someone who did have children invited me into a discussion about raising children… and I participated. Wooooo-boy… I would not want to learn that any of those discussions had been taped, and I was about to be a guest on “This is Your Life”. That’s the sort of thing that makes me want to run screaming from the room… even now, as I’m writing this.

There is nothing that compares with having a child. Nothing even close. I really don’t believe you know joy, fear or sadness until you have a child… at least I did not.

So, for that… I am happy today. Very, very happy because I’m a father.

But, it’s hard for me to be happy without thinking about the hundreds of thousands or perhaps millions of fathers who while they smile through their day, are also worrying about what will happen tomorrow because they know that, despite their best efforts, they may lose their homes. And I know that most of them blame themselves for decisions they made during a very different time that now seem so irresponsible or foolish but that then seemed entirely reasonable. And that makes me sick because I understand that it’s not their fault that things have changed so dramatically. They could not have known what was to come. They didn’t do anything wrong, yet they blame themselves.

It’s also not a natural disaster. It’s the fault of a very small, specific and definable group of Wall Street bankers and related financial types… criminals, in my mind, if not in the eyes of the law… that literally plotted to abuse the system to such a degree that what they did for profit has essentially bankrupted millions. They’re not bankrupt, however, they made tens of millions, and sometimes hundreds of millions of dollars off of their scheme.

Then when it started to unravel… when Alan Greenspan raised rates 17 times in a row by the summer of 2006 in an effort to cool off an overheated housing market… at the same time something else was about to break… something else that was much harder to see than the houses that would soon start going into foreclosure: the bond market, and specifically the market for mortgage backed securities.

You could say that one triggered the other on top of a mountain of loans designed to be refinanced every couple of years. You see, the bankers designed loans that needed to be refinanced every 2-3 years. That way, they could make more money refinancing loans. They didn’t have to make loans that needed to be refinanced so frequently, they could have made them sustainable loans that someone could keep for 30 years, but that wouldn’t have been nearly as profitable so they made them so they would blow up if not refinanced.

When rates went up, some went into default, and then when the pension plans that had bought Wall Street’s securitized and re-securitized bonds and derivatives realized that the bonds were improperly rated triple A, they dumped them immediately and at fire sale prices. No one trusted the ratings, so no one would buy the bonds, so the banks couldn’t sell their mortgages, so they stopped lending. It was like a 10th Avenue Freeze Out, as The Boss, Bruce Springsteen sings.

So, people were defaulting because rates had risen, and because they had loans that had been designed to need to be refinanced, but there was no refinancing because Wall Street had sold improperly rated bonds and now no one trusted the ratings, so the banks wouldn’t lend because they couldn’t sell the loans to Wall Street because no one wanted the bonds… and the winners were the people who bought credit default swaps… and then there was the leverage… whew! Hold it right there.

Do you see why I’m saying that it wasn’t any father’s fault? Because it wasn’t, and anyone who would like to argue that is welcome to come my way because I’m gunning for the next one who wants to go down.

It wasn’t the borrowers, it was the God damn bankers. And don’t write to me about saying God damn in this situation because I mean specifically that God should damn them. So, if that makes you uncomfortable then read someone else, because you are not welcome here.

When it all happened, the media started blaming the thing they could see, and the bankers pushed the point of view… it was the borrowers who were causing their own plight. It was a lie then and it’s still a lie.

And it’s caused so much pain, and it caused more today, a day when fathers should feel nothing but joy. So, instead of my feeling only joy today, I cried for the fathers who felt guilt and shame and fear inside, while they smiled through their special day. Because they shouldn’t have had to feel any of those things because they didn’t do anything wrong… they didn’t put their family’s home at risk of foreclosure… the Wall Street bankers and catatonic government regulators did that.

Because fathers do anything and everything for their families they love, and one of my readers reminded me of that today by sending me the video below to remind me that I’m fighting for my family and for fathers everywhere. I’ve seen the video before, but the reader who sent it to me reminded me that I am fighting for my family and families everywhere.

Watch it… and then scroll down… there’s more and it matters…

Someone else sent me something today. Danny Schechter, the writer, producer and director of the new movie PLUNDER, contacted me by email today. He had just found Mandelman Matters and he wanted me to watch his film and talk to him about how I could help get the message out about the film.

So, I did. I watched the whole thing and was glued to it the whole time. I stumbled over a couple of things in the beginning, but I stayed with it, and found those things didn’t matter at all.

PLUNDER is the first and only movie that explains what I’ve written hundreds of pages about in a movie that’s 1 hour and 40 minutes long. It’s way better than Michael Moore’s Capitalism – Love Story, if you happened to see that.

And you need to see it. All of you, but especially the fathers out there that are feeling that they let themselves and their families down. If you’re a father… BUY IT!!! If you know a father… BUY IT!!!! If you’re a mother BUY IT!!!! EVERYONE PLEASE BUY IT!!!!

HAVE PARTIES… PLUNDER PARTIES!

INVITE EVERYONE YOU KNOW OVER TO WATCH IT WITH YOU!

LET THE FATHERS AND MOTHERS OF THIS COUNTRY OFF THE HOOK. IT WASN’T THEY WHO CAUSED THIS, IT WAS THE BANKERS. PERIOD. THE END.

HERE’S A TRAILER, AND A LINK TO AMAZON WHERE YOU CAN BUY IT RIGHT NOW FOR LIKE $16. BUY IT. BUY IT. BUY IT FOR YOUR FRIENDS. BUY IT FOR EVERYONE YOU KNOW.

Jun

GUEST POST: President Obama, please don’t let them take Grandma’s house!

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Loan Modification, Weidner

27520Leave a Comment2011-06-18+02%3A00%3A02Mandelman

The Senior Citizen Solution… RMO HAMP

By Rick Rogers, JD/MBA

Too many of those devastated by the foreclosure crisis in this country are older Americans, who are often on a fixed income or are otherwise disadvantaged in the battle against unexpected financial trauma. This proposal seeks to protect mature homeowners and their families by arming them with a powerful new weapon against the on-going foreclosure onslaught.

This article is a plea to President Obama for a supplemental HAMP initiative which would provide superior benefits to as many as a quarter of distressed American households, while generating the enthusiastic lending industry support necessary to make any modification program successful; all at no additional cost to taxpayers.

The foundation of this proposal is a reverse mortgage “RM”, a powerful and underutilized foreclosure defense tool. It is particularly valuable to financially distressed homeowners because bad credit is not a disqualifier, income requirements are minimal, and no principal or interest payments are due for the life of the loan. Although reverse mortgages are not new, a leveraged combination of reverse mortgages, HAMP, and a subordination program will bring amazing benefits to homeowners, the mortgage lending industry, and our real estate market.

Below is a description of the proposed Reverse Mortgage Option HAMP “RMO HAMP”:

I. Homeowners, age 62 and older, if in default or imminent default, shall be allowed to obtain a reverse mortgage for their primary residence. All proceeds of the RM shall be applied to the homeowner’s current mortgage. Unfortunately, that will probably not be enough to completely pay-off the mortgage. Proceeds from a typical RM are usually about 60% of the market value of the home, far less than the amount distressed homeowners usually owe on their mortgage. That problem leads to step II of this proposal.

II. The original first mortgage will be subordinated to the RM (meaning it will become a junior mortgage behind the reverse mortgage) and will be modified as follows:

a. The interest rate on the junior mortgage (which was formerly the first mortgage) shall be fixed at 5% and the term shall be adjusted to 30 years.

b. If necessary, there will be a principal reduction of the junior mortgage so that the combined balances of the junior and reverse mortgages (less the closing costs of the RM) do not exceed the fair market value of the property.

III. In order to provide appropriate incentives and compensation for the additional work required of mortgage servicers (the bank or company to which you make your mortgage payments), the HAMP financial incentives normally directed to borrowers and lenders shall be re-directed to servicers, along with standard HAMP benefits previously payable to servicers. Those benefits shall be calculated and payable on the same schedule as if a standard HAMP modification had been granted. Many, including this author, believe insufficient servicer compensation has resulted in minimal and begrudged HAMP participation. This defect may be the primary reason HAMP has produced such dismal results. The redirection of incentives is intended to eliminate that debilitating flaw for RMO HAMP. Due to the far superior benefits of RMO HAMP to borrowers and lenders, they have no cause to object to the necessary redistribution of HAMP incentives to make this program possible. This redirection also eliminates necessity for additional taxpayer funding.

IV. Junior mortgages that were already in place prior to the RMO HAMP transaction, (initially a HELOC or 2nd mortgage), would be required to modify their terms in a manner consistent with the requirements, if any, under standard HAMP. All junior mortgage holders would necessarily be required to subordinate their position to RMO HAMP mortgages. Although the legal seniority of those junior mortgages would, technically, be reduced, default risk of those mortgages would be significantly improved as a result of the far greater affordability of total mortgage payments, and the principal reduction of superior mortgages when warranted. That provides the financial justification for the mandatory subordination of junior liens.

In order to gain a better sense of the potential benefits of the proposed program, it is helpful to look at the following typical example of a home with an 8% mortgage currently in default, with a principal balance of $220,000, and a market value of $200,000. The retired homeowners have pension income totaling $3,780 per month.

No Modification Standard HAMP RMO HAMP

Home Market Value – $200,000

Current Mortgage Balance $220,000 $220,000 $ 80,000

Reverse Mortgage Balance $130,000

Monthly P&I Payments $1,468 $950 (for 5 yrs) $429 (fixed)

Principal Reduction $ 0 $ 0 $10,000

Approximate NPV to Lender $ 73,787 $ 162,207 $200,000 (assumes foreclosure)

HAMP Fees to Servicer $ 0 $ 1,500 $ 19,553

Results of the above RMO HAMP example:

1. From the borrower perspective: RMO HAMP modification would be a bit like winning the lottery. The foreclosure threat would be permanently ended with the easily sustainable modification. The principal and interest payments under RMO HAMP, only $429 per month, would be less than 1/3 of the current payments, and less than 1/2 of standard HAMP payments. RMO HAMP payments, unlike standard HAMP, would remain fixed, an important feature for those on a fixed income and not intending to die within the next 5 years. A principal reduction of $10,000 would top off the RMO HAMP benefits in this example.

2. From the lender perspective: The lender would immediately receive more cash, 60% of market value, than it ever expected to receive from foreclosure. It would also have a much better chance of receiving another 40% of market value through its new, more affordable junior mortgage, because no payments would ever be due on the first mortgage. Lender NPV would be almost triple that of foreclosure, and 23% more than from standard HAMP. On a national basis, the program would create new lender demand for hundreds of thousands, if not millions, of Reverse Mortgages. These are exceptional results for lenders.

3. From the servicer perspective: Fees payable to the servicer, almost $20,000 in this case, would be about 13 times higher than under standard HAMP. The servicer may be able to further increase fees by seeking servicing rights on the reverse mortgage. These fees should be sufficient to award, rather than punish, the servicer for doing the right thing… modification. When compared to the paltry incentives typically available, this is a superlative result for servicers.

4. From the taxpayer perspective: Same cost per modification as standard HAMP. Many more modifications completed, as originally projected. Faster recovery of the real estate market and economy. It doesn’t get much better than that.

All parties under RMO HAMP would benefit far more than from standard HAMP or current proprietary modification programs.

Note it may be necessary to amend or waive HUD regulations governing subordinate liens for RMO HAMP. Those regulations were designed during better times to protect senior homeowners, but are now rendering many of them defenseless against foreclosure. Certainly, there is ample justification to change those restrictions for purposes of avoiding foreclosure.

RMO HAMP could be utilized immediately by a sizable portion of American households. By providing the necessary incentives to all parties of interest, it might put HAMP back on track to avoid foreclosure for the originally intended four million homeowners. Imagine how many people affected by the housing crisis would be back to work if 3 – 4 million homeowners were able to keep their homes and were suddenly motivated to maintain and improve them, and could afford to do so. With the snowball effect, many of those re-employed people would be enabled to modify or otherwise keep their homes.

All would agree, foreclosing and throwing a family out of their home is a horrific action. Can we stop doing this to Grandma and Grandpa, and then see if we can progress from there?

~~~

About the Author: Rick Rogers, JD/MBA is Executive Director of the Rogers Law Group, a Chicago area Law Firm dedicated exclusively to Home Preservation. For over 20 years, he has composed and utilized NPV Tests for the purpose of comparing real estate alternatives nationally and internationally. For the last 10 years, his practice has been devoted to foreclosure, mortgage default, and related matters.

Contact him at rrogers@therogerslawgroup.com or here: The Rogers Law Group.

Jun

Civil Beat Reporter in Hawaii Interviews Mandelman on Fannie Mae Decision to Foreclose Judicially

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27434Leave a Comment2011-06-15+23%3A28%3A18Mandelman

Civil Beat’s Robert Brown interviews Sen. Baker, Rep. Herkes, FACE’s Kim Harmon… AND ME!

Fannie Mae Skirts Landmark Hawaii Foreclosure Law

By Robert Brown

6/15/2011

Mortgage giant Fannie Mae has found a way around what some consider the nation’s strongest foreclosure law.

Fannie, a government controlled mortgage finance company, which operates in the secondary mortgage market, announced this week the company will convert all of its new and pending non-judicial foreclosures in Hawaii to judicial foreclosures effective immediately — essentially allowing them to skirt Hawaii’s new law.

“Our announcement is consistent with Hawaii law and was made in response to recent Hawaii legislation,” Andrew Wilson, a Fannie spokesman told Civil Beat in an email. “The judicial foreclosure process allows homeowners to raise any challenges to the foreclosure in court. Fannie continues to encourage homeowners to reach out as early as possible to their servicers to pursue modifications and other foreclosure prevention solutions.”

In May, Gov. Neil Abercrombie signed Act 48, a measure requiring lenders to meet face-to-face with homeowners for mediation before foreclosing on a property. Additionally, the bill places a moratorium on all new non-judicial foreclosure actions until July 1, 2012, for foreclosures covered under Part 1 of the state statute governing foreclosures, and requires lenders to prove they actually have the authority to foreclose on a property.

“It doesn’t seem like (Fannie) really cares much about our homeowners or assisting homeowners stay in their homes,” Sen. Rosalyn Baker, who co-introduced the mortgage bill, said in an email.

Intended to reform Hawaii’s foreclosure process, Act 48 has the potential to impact thousands. But the law only applies to non-judicial foreclosures.

Fannie Change Skirts Proof Requirement

One reason supporters of Act 48 were so pleased with its passing was the requirement that lenders prove they have authority to foreclose on a home.

Kim Harman, policy director for Faith Action for Community Equity (FACE), told Civil Beat in May that lenders processed too many mortgages too quickly, resulting in Hawaii residents being foreclosed on by lenders who don’t have legal standing.

Act 48 was based on a 2009 Nevada law, with the exception of the proof of authority to foreclose requirement. Because Fannie hasn’t adopted the same stance in Nevada, Harmon says, it indicates that Fannie is attempting to avoid having to prove that it has the right to foreclose.

“There are thousands more foreclosures in Nevada than in Hawaii and our foreclosure mediation laws are so similar, Fannie Mae must be reacting to Hawaii’s higher standard for lenders and mortgage servicers to prove their legal standing to pursue foreclosures in our state,” Harmon said in a FACE press release. “If Fannie Mae is worried that there are flaws in their legal standing to foreclosure, they should not be foreclosing at all, they should be addressing problems with their mortgages.”

Baker said Fannie will be disappointed if it is, in fact, trying to avoid the proof requirement.

“If Fannie Mae thinks somehow they’re going to get a better deal going through the courts and that they won’t have to present the same documentation demonstrating their legal ability to foreclose, I believe they will be sadly mistaken,” Baker wrote Civil Beat via email. “I expect the courts to look with great scrutiny on any foreclosure matter that comes before them, especially now.

Wilson, the Fannie spokesman, declined to comment on the issue.

Baker told Civil Beat Fannie’s decision will likely lengthen the foreclosure process and possibly pass on more costs to homeowners, who might feel the need to be represented by counsel. She said lawmakers will keep a close eye on Fannie and will work with the Department of Commerce and Consumer Affairs, as well as the judiciary, “to explore options and how best to keep from overwhelming the resources of the Judiciary.”

Baker said getting a judicial foreclosure hearing in Hawaii can take 12-14 months.

“We intend to continue to stand up for the beleaguered homeowners of Hawaii,” Baker said. “We will also enlist the assistance and support of our Congressional delegation.”

Mortgage Expert: Expect Protests

While Fannie isn’t doing anything illegal with the conversions, at least one mortgage expert thinks Hawaii homeowners will not tolerate the decision.

“In Hawaii, this is not going to fly,” Martin Andelman, operator of the mortgage blog “Mandelman Matters”, told Civil Beat. “If you treated your spouse the way the servicers treat people, you’d get arrested. It’s abuse. It’s awful. We treat people in the criminal justice system better than servicers treat homeowners.”

“I just know Hawaii,” Andelman said. “Hawaii is not a place where you get away with that stuff. I mean, mainland banks are going to treat people rudely and think everyone is just going to do nothing?”

Andelman said that Fannie’s move essentially renders the intent of Act 48 moot, though Baker disagrees.

“The people of Hawaii today are very proud of their Legislature for (Act 48),” Andleman said. “It was a grassroots movement, they felt like they had a real success on a national scale. I mean it was a big deal. They won and they did something good. And then Fannie just went, ‘(expletive) you.’”

READ THE REST HERE… (It’s worth reading… Rep. Herkes is quoted as saying: “Oh my. Now we have to prove we’re the lender. How rude.”

DISCUSSION: What do you think of Fannie Mae’s decision to convert its foreclosures? Share your thoughts in Civil Beat’s Hawaii Politics discussion.

~~~

I don’t usually post what appears in other publications, but I thought my readers would enjoy this. I’m headed to Hawaii next week to meet with Rep. Herkes, Sen. Baker and Kim Harman of FACE… along with many others involved in the battle.

I’m determined to help make a difference here, because if we can show the country an effective program to mitigate foreclosures, I think others will follow.

Wish me luck… pray for us all.

Mandelman out.

Jun

The Definition of Dichotomy

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27402Leave a CommentThe+Definition+of+Dichotomy2011-06-15+08%3A25%3A52Mandelman

There have been times in my life when certain words gained meaning all of a sudden. Like, I knew the word before and even its definition, but then I reached a point in my life where I really knew what a certain word meant. I’ll give you an example… and I’ve said this before… I never really understood anger, joy, fear or sadness until I had my daughter. I mean, I knew what the words meant before she was born, of course, but I then again I didn’t really.

Well, yesterday I had another one of those types of experiences… no… my wife and I didn’t have another baby… actually I think the experience had been building inside and around me and yesterday it all came colliding together… and all over a sudden I understood the definition of the word, “dichotomy.”

It’s a big word… dichotomy… it means… oh, I don’t know, the word “contrast” comes to mind. It’s sort of the separation of irreconcilable things. A contradiction is perhaps the better way to define it.

I’ll tell you this though… when you run into a true dichotomy you’ll know it, that’s for darn sure. It sort of leaves you sitting there staring at the wall unsure of what to do next. The idea of screaming from the top of the tallest hill in town seems potentially gratifying at such a moment.

I’ll share my experience with you now, and see what you think about the whole… well… the dichotomy, I suppose. Here goes… just as it happened to me.

PART 1

“We are now well into the fourth year of the foreclosure crisis, and there is no end in sight. Since mid-2007 around eight million homes entered foreclosure, and over three million borrowers lost their homes in foreclosure. As of June 30, 2010, the Mortgage Bankers Association reported that 4.57% of 1-4 family residential mortgage loans (roughly 2.5 million loans) were currently in the foreclosure, process a rate more than quadruple historical averages. Additionally, 9.85% of mortgages (roughly 5 million loans) were at least a month delinquent.”

Who the heck said that? He sounds like me, don’t you think? I feel like I might be quoting myself, which is weird.

Actually, I’m flattering myself because those are the words found in Georgetown Law Professor Adam Levitin’s written testimony in provided to House Financial Services Committee, Subcommittee on Housing and Community Opportunity on November 18, 2010. The topics being covered by his testimony:

“Robo-Singing, Chain of Title, Loss Mitigation, and Other Issues in Mortgage Servicing”

“To this sad state of affairs, there now come a variety of additional problems: faulty foreclosures due to irregularities ranging from procedural defects (including, but not limited to robo-signing) to outright counterfeiting of documents; predatory servicing practices that precipitate borrower defaults and then overcharge for foreclosure services that are ultimately paid for by investors; and questions about the validity of transfers in private-label mortgage securitizations.”

The chain of title problems are highly technical, but they pose a potential systemic risk to the US economy. If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever.

The chain of title concerns stem from transactions that make assumptions about the resolution of unsettled law. If those legal issues are resolved differently, then there would be a failure of the transfer of mortgages into securitization trusts, which would cloud title to nearly every property in the United States and would create contract rescission/put-back liabilities in the trillions of dollars, greatly exceeding the capital of the US’s major financial institutions.

These problems are very serious. At best they present problems of fraud on the court, clouded title to properties coming out of foreclosure, and delay in foreclosures that will increase the shadow housing inventory and drive down home prices. At worst, they represent a systemic risk that would bring the US financial system back to the dark days of the fall of 2008.

Okay, so you know what Professor Levitin is talking about there, right? He’s saying that we are in deep Kim chi, that’s what he’s saying. He’s saying that the loans were not properly transferred into the trusts that are now trying to foreclose on homes… and apparently, they can’t seem to come up with anything that says they own the loan… but they want to foreclose anyway.

He’s also saying that when the banksters figured out that they could come up the proper documents to conduct the foreclosure legally, they decided that the path to take… the best way to solve the problem… the optimal answer to this dilemma was… to commit forgery and fraud.

Yes, it’s true. The banksters, unable to establish that they complied with just about ANY of the laws governing the transfer of property, much less the requirements as set for in a Pooling and Servicing Agreement, came up with a plan. Let’s forge them and see if we can’t defraud the court. Yeah, great idea… run with it.

From there it’s almost like they were barely trying, as if “we” are so stupid that you can fool us just as you might a three year-old. Just pick a short name and have everybody sign it. Yeah, Linda Green’s fine, I was thinking, Don Ho, but you’re right, Linda Green is better. Yep, just sign it over and over, they’ll never notice… silly humans.

I’ve said it before and I’ll say it again… nobody chooses “robo-signing” hundreds of thousands of affidavits and various other documents off of a list of other viable alternative solutions to your problem. When you find yourself checking “YES” on robo-signing… when you’re a bank that chooses to open a fraud and forgery department… well, something has left the building, let’s say that.

So, a lot of people have been talking about this for some time now, so what’s new?

Well, both The New York Times and the Huffington Post are reporting on state investigations into the practices surrounding the packaging of mortgage-backed securities and their brethren. And even though the bank’s response has been basically flowers in springtime, the New York and Delaware Attorneys General say they’re quite serious.

He’s saying that this could be a game changer depending on how this is handled. We could explode… or maybe implode. I’m not entirely sure. But it’s bad. The kind of thing you wouldn’t want to have to live through twice.

So, clicking around yesterday, at Huff-Po it was Shahien Nasiripour with the story… still can’t pronounce it and for that I am deeply ashamed, but it is to be expected. He wrote about the New York Attorney General “launching” an “investigation into mortgage securitization.” Heady stuff, I’m sure you’d agree.

“New York Attorney General Eric Schneiderman has targeted Bank of America, the biggest U.S. bank by assets, in a new probe that questions the validity of potentially thousands of mortgage securities and their associated foreclosures, two people familiar with the matter said.

The investigation, which began quietly in recent weeks, is part of a larger inquiry that is scrutinizing whether mortgage companies and Wall Street firms took the necessary steps under New York state law when creating mortgage-backed securities, these people said, who requested anonymity because they weren’t authorized to speak publicly about the probe.

Court testimony and independent studies have raised questions over whether banks and other financial firms passed along the required documents to trusts, the independent entities that oversee securities for investors. In some cases where trusts moved to seize borrowers’ homes, judges have determined the trusts lacked legal standing due to faulty documentation.

The inquiry could prove explosive: Wall Street’s great mortgage securitization machine took millions of home loans and bundled them into securities for sale to investors. If the legal steps that guide securitization — like taking mortgage documents from one party to another, a critical step under New York law — were not undertaken, then the investors who bought the bundled loans could force the companies to buy them back, compelling them to eat enormous losses.

New York state investigators could also find that those securities aren’t valid financial instruments at all and take action under state law.

But an investigation into whether the securities these companies created are even valid represents a new front in his ongoing probe and raises fresh questions into the potential liability sellers of these mortgage instruments face.

“If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever,” says Adam J. Levitin.

Levitin also said that the problem could “cloud title to nearly every property in the United States” and could lead to trillions of dollars in losses.”

Shahien’s “exclusive” soon had company, Gretchen Morgenson of The New York Times also ran a story saying that both the Attorneys General from New York and Delaware were conducting such an investigation into the practices surrounding and involved in mortgage-backed securities. And if you’re wondering what’s the big deal about New York and Delaware, well… I’ll tell you…

“The trusts were governed by the laws of the states in which they were set up. Roughly 80 percent of the trusts are governed by New York law with the rest by Delaware law.”

See… I told you. So, here’s how the Times described the same topic…

The investigation is being led by Eric T. Schneiderman, the attorney general of New York, who has teamed with Joseph R. Biden III, his counterpart from Delaware. Their effort centers on the back end of the mortgage assembly lines — where big banks serve as trustees overseeing the securities for investors — according to two people briefed on the inquiry but who were not authorized to speak publicly about it.

The attorneys general have requested information from Bank of New York Mellon and Deutsche Bank, the two largest firms acting as trustees. Trustee banks have not been a focus of other investigations because they are administrators of the securities and did not originate the loans or service them. But as administrators they were required to ensure that the documentation was proper and complete.

“A complex process that produced hundreds of billions of dollars in securities during the lending boom, the issuance of mortgage securities began with home loans, which were then bundled into investments and sold to pension funds, mutual funds, big banks and other investors. The bundles were created as trusts overseen by institutions such as Bank of New York and Deutsche Bank; they were supposed to make sure the complete mortgage files for each loan were delivered within a specified time and with the proper documentation.”

“The stakes are potentially high. If the trustees did not follow the rules set out in the prospectus, they may be liable for breaching their duties to investors who bought the securities. That could expose the banks to costly civil litigation.”

“Spokesmen from Bank of New York and Deutsche Bank declined to comment about the investigation, as did representatives from the offices of both attorneys general.”

Okay, so Gretchen and Shahien seem to be in a race. It seems to me that they’ve both found a bush and they want to see who can be the first to beat around it. In fairness to them, it may be their editors that hold them back, but the point is, what they’re talking about is the 800 pound gorilla in the room.

Or, another way of putting it… in the contest to see whether mortgage-backed securities either “taste great” or are “less filling,” it’s seems that “less filling” has taken the lead.

We’re talking about mortgage-backed securities without the “mortgage-backed” part. Empty securities. Like a Twinkie without the creamy filling inside. Securities fraud. Bad, very bad. The sort of thing for which one gets sued… or possibly even charged.

Once again, Professor Adam Levitin’s testimony tells it best…

“Many of the issues relating to foreclosure fraud by mortgage servicers, ranging from more minor procedural defects up to outright counterfeiting relate to the need to show standing. Thus problems like false affidavits of indebtedness, false lost note affidavits, and false lost summons affidavits, as well as backdated mortgage assignments, and wholly counterfeited notes, mortgages, and assignments all relate to the evidentiary need to show that the entity bringing the foreclosure action has standing to foreclose.

Concerns about securitization chain of title also go to the standing question; if the mortgages were not properly transferred in the securitization process (including through the use of MERS to record the mortgages), then the party bringing the foreclosure does not in fact own the mortgage and therefore lacks standing to foreclose. If the mortgage was not properly transferred, there are profound implications too for investors, as the mortgage-backed securities they believed they had purchased would, in fact be non-mortgage-backed securities, which would almost assuredly lead investors to demand that their investment contracts be rescinded, thereby exacerbating the scale of mortgage put-back claims.

Many of the problems in the mortgage securitization market (and thus this testimony) are highly technical, but they are extremely serious. At best they present problems of fraud on the court and questionable title to property. At worst, they represent a systemic risk of liabilities in the trillions of dollars, greatly exceeding the capital of the US’s major financial institutions. While understanding the securitization market’s problems involves following a good deal of technical issues, it is critical to understand from the get-go that securitization is all about technicalities.

Securitization is the legal apotheosis of form over substance, and if securitization is to work it must adhere to its proper, prescribed form punctiliously. The rules of the game with securitization, as with real property law and secured credit are, and always have been, that dotting “i’s” and crossing “t’s” matter, in part to ensure the fairness of the system and avoid confusions about conflicting claims to property.

Close enough doesn’t do it in securitization; if you don’t do it right, you cannot ensure that securitized assets are bankruptcy remote and thus you cannot get the ratings and opinion letters necessary for securitization to work.

Thus, it is important not to dismiss securitization problems as merely “technical;” these issues are no more technicalities than the borrower’s signature on a mortgage. Cutting corners may improve securitization’s economic efficiency, but it undermines its legal viability.”

So… any questions about that? It’s a big deal. A really big deal. The banking industry associations say it’s not, but it quite obviously is. You know, there are reasons we have the laws we do governing the transfer of property rights, it’s not like such laws were created on a whim. And the pooling and service agreements, or PSAs, govern how loans are to be transferred into the REMIC trusts are some 500+ pages long, in most cases, and call me crazy, but compliance with such a document doesn’t sound like a trivial matter either.

So, now the Attorneys General from New York and Delaware are investigating in order to find out whether trillions of dollars in loans were seriously mishandled and therefore are not in the trusts, as the banksters said they were. The IRS is investigating too. And at least two large investors have already filed lawsuits alleging that they were sold “empty trusts.”

Here’s an excerpt from a real lawsuit lawsuit filed this past April 21^st by the Federal Home Loan Bank of Boston, an investor in mortgage-backed securities, against just about everyone you’ve ever heard of in the financial, services industry, from Aurora to Wells Fargo… you’ll find it on page 28 of the complaint, item ‘f’.

“In order for a mortgage to be enforced, basic steps need to be taken to validly assign the mortgage and mortgage loan to the trust and ensure that the trustee has the proper papers. These basic steps, and the representations made about these steps, were critical to investors because if a mortgage cannot be enforced, then the mortgage loans and the certificates dependent on these loans, are worthless. The Offering Documents failed to disclose that in fact basic steps regarding the transfer of mortgages and mortgage loans were not followed – mortgage loans were not validly assigned, and papers necessary to ensure enforceability of the mortgage were never transferred to the trustee.”

Have I made my case yet? It’s important stuff, right? The New York Times and the Huffington Post write about state Attorneys General investigating trustees about the issue, Professor Adam Levitin testifies in Congress about the issue, and the Federal Home Loan Bank of Boston files a lawsuit that incorporates the issue into its 575-page complaint.

So, you agree, right? It’s a serious issue, how loans are transferred into trusts as part of the securitization process. Right? Right.

Okay, so here’s PHASE TWO of yesterday’s news:

FADE IN: We’re in the United States Bankruptcy Court, Northern District of California, in front of The Honorable Edward D. Jellen, a United States Bankruptcy Judge. We’re watching an Evidentiary Hearing on Debtor’s Objection to Proof of Claim, which is another way of saying that the homeowner is saying there’s something wrong with what the bank is claiming he owes.

The homeowner’s name is Felipe Zulueta, Jr. and he’s representing himself in these proceedings… pro per, or pro se… I can never figure out which is which or why to use one over the other. The point is that he doesn’t have a lawyer… he’s representing himself.

It is 9:35 AM on November 3, 2010 when the Clerk says…

The Clerk: All rise.

This is the United States Bankruptcy Court for the Northern District of California, The Honorable Edward Jellen presiding.

Be seated.

Mr. Chun: Thank you, Your Honor.

Mr. Zulueta: Thank you, Your Honor.

The Court: This is the matter of Zulueta. May I have the appearances, please?

Mr. Zulueta: Felipe Zulueta, Jr. Your Honor, Debtor.

The Court: Okay.

Mr. Chun: Joseph Chun representing the secured creditor.

The Court: All right. Mr. Zulueta, are you going to be presenting any evidence to show that they don’t have standing?

Mr. Zulueta: Actually, Your Honor, I was going to address the exhibits that they’re going to present today.

The Court: Yeah. My question was, do you have an evidence of your own…

Mr. Zulueta: No.

The Court: … that shows…

Mr. Zulueta: No.

The Court: All right. Mr. Chun, according to your trial brief, you have exhibits, is that correct?

Mr. Chun: That’s correct, Your Honor.

Mr. Zulueta: Your Honor?

The Court: Yes.

Mr. Zulueta: I just wanted to clarify, Your Honor, if counsel is representing One West Bank or Deutsche Bank National Trust Company as trustee for the mortgage loan trust.

Mr. Chun: We’re representing One West Bank, the servicing agent – who’s the servicing agent for Deutsche.

Mr. Zulueta: Okay, so I just wanted to find out, Your Honor, if One West Bank has the proper authorization from Deutsche Bank to authorize them, because I don’t see any power of attorney presented.

The Court: All right. Well, you know, the bottom line is you’re not getting a free house.

Mr. Zulueta: I’m not asking for a free house, Your Honor. I just want to make sure that the proper paperwork is in place so I can pay the right creditor.

LATER THAT SAME MORNING…

Mr. Zulueta: Okay, so the first thing I want to point out, Your Honor, is, number one, on the bottom of the page of the recorded document, there’s a handwritten scribble on the bottom after the signature of the notary that says, a notary on the basis within capacity under – which means that this is not a true and correct copy.

The Court: What difference does it make?

Mr. Zulueta: Well, it does make a difference, Your Honor, because I’m trying to establish a pattern here of the fact that this document appears fraudulent.

The Court: Do you have any evidence that it’s fraudulent? I mean, whether it’s recorded or not doesn’t make any difference.

Mr. Zulueta: Well, it does, Your Honor, because all of the exhibits that counsel is presenting today, there is a system of how my loan is supposedly deposited into the trust, and since they’re representing the trust, I want to make sure that they’re the proper creditor for my loan.

The Court: All right. Who do you think is the proper creditor?

Mr. Zulueta: Right now, Your Honor, it’s a mystery. I mean, after my research…

The Court: All right. But you don’t get a free house.

Mr. Zulueta: I understand, Your Honor.

So, how about that? And I’m not making any of that up, by the way… in fact, I didn’t even change a single word from the court transcript. And you don’t even have to take my word for it, because the link to the court transcript can be found at the bottom of this post.

According to April Charney, of Jacksonville Legal Aid, this case goes before the 9^th Circuit Court of Appeals next week. Any guesses as to what will happen? I don’t really care whether the documents are all fraudulent. I don’t really care how many laws were broken, or whether the REMIC trust is as empty as my wallet on December 26^th… I only want to know one thing…

Will Mr. Zulueta get a “free house?”

Are you getting what I’m trying to say here? Because we have here is a true “dichotomy,” wouldn’t you say? It’s dichotomous, if you’re an adjective person.

That’s only two of the contrasting stories I had to work with that day. At the same time, Fannie Mae announced that it would not participate in Hawaii’s new mediation program. Why? Because they don’t want to have to prove standing… that the servicer is foreclosing on behalf of the trust that actually owns the note… as is required by Hawaii’s new mediation program.

And this afternoon, a lawyer in Hawaii told me that he has learned that title insurance companies are refusing to write title insurance on non-judicial foreclosures in Hawaii. And why in the world would that be, do you suppose?

Meanwhile, in Utah, a judge apparently granted Quiet Title to Scott Harvey, a homeowner, who promptly sells his now free and clear house after no one shows up to contest the matter. Someone want to explain that one to me?

Harvey v Garbett, Quiet Title Case in Draper Utah

Oh, and Bank of America’s being accused of obstructing a federal investigation by HUD investigators in Arizona and now that fact has been added to the lawsuit filed by the State of Arizona against Bank of America less than a year ago, I believe. So, go figure.

My Conclusion…

This is a mess. A real mess. And I see only one way out… follow the laws of our land.

Ours is a country built on laws, and forged by lawyers. It is our laws that have held us together for over 200 years, and only adherence to our laws will get us through this mess.

Did Wall Street’s bankers screw up the securitization of millions of loans? Well, obviously the answer is yes. Does that mean that the REMIC trusts are going to collapse? Yes it probably does at that. Will that be the end of the world? No, I don’t think it will. Answers will be found… equitable answers. And we will go on.

Want to know what won’t work… what will ultimately destroy us? What we’re doing now. The path we’ve been on for the last two years has been disastrous for tens of millions of Americans and we cannot stay on that path much longer. The cost will simply be too great.

Whatever the answer the answer is, I’ll tell you what it is not… it’s not fraud and forgery… it’s not turning our country into a class society where the mega-rich live behind gates and the rest of us… well, eat cake… and it’s not free houses either.

We are only here because the bankers have proven themselves untrustworthy and abusive. That’s right… that’s why we’re here, no other reason. The anger is rising and palpable. The banks continue to lie to homeowners every day. They have already gone too far and will pay a huge price for years to come, but that price is going up every day, and someone has to find a more equitable path.

I think I can help. I leave for Hawaii this coming Monday. I’m meeting with members of the legislature and numerous others. Wish me luck. Pray for us all.

Mandelman out.

ZULUETA Initial Brief

ZULUETA Answer Brief Deutsche Bank

ZULUETA Bankruptcy Court Transcript

1-Federal Home Loan Bank of Boston v. IMH Assets Corp

Jun

Mandelman’s Monthly Museletter – Version 13.0

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27245Leave a Comment2011-06-12+08%3A11%3A32Mandelman

MANDELMAN’S MONTHLY MUSELETTER – VERSION 13.0

Well, it’s almost officially summertime and that means… well, it means… it could mean… what I mean is… it might mean…

Nothing. I’ve got nothing.

So, fine then… let’s just jump right into this month’s Museletter…

~~~

1. Bankster-Speak…

It’s a whole new language, Bankster-Speak, but if you’re going to try to understand what’s going on these days in this country, you’re going to have to learn at least some of it. Frankly, it makes my hair hurt, but I thought I’d get you started on the road to understanding a bankster.

Common English Bankster-Speak

Illegal Questionable

Criminal Shoddy

Crimes Irregularities

Laws Technicalities

Fraud Sloppiness

Commonplace Isolated

Frequently Rarely

Enraged Pleased

Ongoing Stopped

Ignored Investigated

Current Delinquent

Taxpayer dollars Bonuses

Insolvent Profitable

Modify Foreclose

Transparency NA

We’ll take a fresh look… Uh oh, the media got a hold of this one.

Okay, so that’s a start anyway. Send your suggestions to mandelman@mac.com.

~~~

2. On which list would you find Massachusetts, New Hampshire, Missouri, Maryland, Alabama, Mississippi and Tennessee?

Can you guess? What would you say if I told you they all made the list of states with sub-prime adjustable-rate mortgage delinquency rates of OVER 30%… in Q1, 2011?

Well, say it… ‘cause I’m telling you precisely that right now.

Massachusetts, New Hampshire, Missouri, Maryland, Alabama, Mississippi and Tennessee all had delinquency rates over 30% as of the first quarter of this year, according to the Mortgage Bankers Association’s latest report. And two of the three states with over 50% seriously delinquent sub-prime ARMs…. Drum roll please…

New York and New Jersey.

(Do me a favor though… don’t tell Las Vegas, Phoenix or Florida, okay?)

So… that’s good news, right?. At least we know the foreclosure crisis isn’t spreading, it’s just that we’ve got irresponsible people everywhere. Oh yeah, and we only have a foreclosure problem in places where there was a big run-up in property values during the bubble. You know, places like Missouri, Mississippi and Tennessee.

~~~

3. Lessons from History… How did we deal with the foreclosure crisis of The Great Depression?

Fascinating stuff…

“The first attempts to reduce foreclosures during the Great Depression focused on encouraging lenders and borrowers to renegotiate loan terms through mediation boards and other voluntary arrangements. However, the clamor for compulsory foreclosure moratoria grew louder as the Depression worsened and the number of foreclosures rose. On February 8, 1933, Iowa became the first state to enact a moratorium on mortgage foreclosures. Over the subsequent 18 months, a total of 27 states enacted legislation to limit or halt foreclosures.” (Skilton, 1944, p. 78).

Want to know a lot more about how we as a nation dealt with the foreclosures during the 1930s, here’s a report from the St. Louis Federal Reserve… they don’t make this stuff easy to find.

State Moratoria 1930s

~~~

4. I wanted to like NACA and Bruce Marks, I really did. But every time I try, something like this happens.

I wanted to like NACA and Bruce Marks, how could I not? But every time I bump into the organization something like this happens. It’s weird… well, of course the whole thing is weird, but this is… well, weird. I mean, Bruce Marks seems like the kind of guy I would like… what’s up with NACA? And why do they seem to consistently let people down.

Here’s the email my friend Richard Zombeck of Shamethebanks.org just received from the nice folks at NACA:

Dear Richard Zombeck,

Our records show that your file has not been submitted to your lender/servicer. For you to achieve an affordable solution, a NACA Counselor must submit your file. You need to make a counseling appointment as soon as possible.   You must prepare for and have a counseling session immediately by going to www.naca.com.

To have the most effective counseling session you should complete the items identified on your Web file. If you cannot access your Web-file or cannot access items due to a software issue, click here so that NACA IT staff can address it.

Requirements Prior to Counseling Appointment: Prior to your counseling session we must have the below income documents and authorizations that are required by your lender/servicer. If you have not submitted or completed the below, your session will need to be rescheduled for a later date (this is not required for face-to-face counseling appointment).

Okay, so the letter goes on to list the stuff that Richard is supposed to bring with him to his NACA counseling session. And that’s it.

The thing is, that here’s the response that my friend Richard sent back to NACA after getting their very helpful email message:

Wow thanks so much for getting back to me. We filled out the form over two years ago when we really needed help. You must be really busy. Unfortunately as is the case in most foreclosures you deal with you were of no help. In fact I have yet to hear a success story out of your organization.

You may not be aware of this, but when we called you and filled out all of your ludicrous paperwork in 2009 we really needed help and had no idea where to turn. I can only thank you for not having offered your help when we needed it, but have to wonder how many other people you’ve blown off and how many lost their homes because of your retarded response.

Truth is… I haven’t heard a success story about NACA either.

~~~

5. Servicers Respond to Treasury Stopping Payment of Incentives.

So, I’m sure you’ve heard, the Treasury Department announced that would be suspending incentive payments provided to the three largest mortgage hampsters under HAMP until they get their acts together… Bank of America, Chase and Wells Fargo will not be receiving checks that add up to millions of dollars each month, until they can show that they’re much better at handling loan modifications.

Here’s the funny part… the top three hampsters responded to Treasury with a little righteous indignation.

Wella Fargo issued the following statement, according to DSNews.com, saying that the bank is “formally disputing the findings.”

“It paints an unfairly negative picture of our modification efforts and contradicts previous written assessments shared with us by the Treasury,” Wells Fargo said.

“We are willing to accept fair and accurate criticism,” Wells Fargo said. “We realize that continued improvements are needed, but this report does not fairly reflect our leading role in making loan modifications… We want our customers to know we are here to help them.”

Wow… is that what Wells Fargo wants customers to know? I would never have guessed that, would you? Based on my experience with Wells-the-hampster, I would have said that they want customers to know that they should either pay their mortgage as agreed or go jump in a lake.

JPMorgan Chase’s statement said:

“The bank respectfully disagrees with the assessment,” said a JPMorgan spokesman. “We have made significant improvements since the modifications that Treasury reviewed and continue to work hard to keep improving our processes and controls.”

Chase has made improvements? Why am I always the last to know these things? What have they improved… their time from NOD to trustee sale? Maybe they’ve reduced the number of times they have to lose someone’s paperwork before they give up and move out of their home from four to three, or something like that.

And Bank of America said the following:

“We are committed to continually improving our processes to assist distressed homeowners…. We acknowledge improvements must be made in key areas, particularly those affecting the customer experience.”

“We believe future reviews will confirm [our] progress,” Bank of America said. “We meet regularly with [Treasury] officials to review performance and address any concerns, and will continue that process.”

Don’t you just love BofA? Read their statement again… I did… three times. They are the absolute best at using words while saying nothing. Most people have to shut their mouths completely to say as little as they do. It’s got to be something the organization learned from Kenny Lewis over the years.

I wish I could help Treasury write the response to these whining hampsters who feel they’re being treated unfairly. It might say something like:

“We’re sorry, but there is no appeals process at this time. You failed the secret hampster test and we can’t tell you anything more about it… only that you failed. You’re certainly welcome to send you paperwork in again and we’ll give it a cursory review before we lose it… probably. Look, you’re just another irresponsible hampster… no one forced you to sign the HAMP contract, so now you’ll just have to learn to live up to your agreements.

And then if one of the hampsters called in, I’d say, “please hold …” and then I’d go to lunch… come back hours later and just hang up the phone.

Hahahahahahahahaha! Hey, a girl can dream… can’t she?

~~~

That’s all for now, folks…

Mandelman out.

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Jun

Fannie Responds to Hawaii’s New Foreclosure Law – Says… WE’RE OUT!

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27236Leave a Comment2011-06-12+05%3A35%3A19Mandelman

If you’ve been following the goings on in Hawaii as related to SB 651, the state’s new foreclosure law that requires servicers foreclosing non-judicially to produce chain of title documents, including assignments and endorsements prior to scheduling mandatory dispute resolution in front of a mediator, here’s a piece of news you’ll want to hear.

And, even if you haven’t been following the situation pertaining to foreclosures in Hawaii, but you’ve often wondered what the banks would do if they were forced to prove they actually own a home, or represent a trust that holds the actual note, BEFORE foreclosing… you’ll want to hear this too.

First of all, in case you don’t know any of the background here, you might want to click on this article: Governor Abercrombie Signs SB 651 – Toughest Foreclosure Bill in Nation, NOW LAW!

But for everyone else, those who know that recently Hawaii’s state legislature became the first in the nation to stand up to the banking lobby, passing the toughest foreclosure protection bill in the country, haven’t you been wondering what the banksters were going to do in response?

Well, I sure have… in fact, I’ve even been working on a document to send over there that analyzed the different potential bankster responses, and even after analyzing things and trying to find something out about their plans, I still really wasn’t at all sure. I just could not imagine the servicers or lenders actually being able to conform to the new law’s requirements under any circumstances.

But, you see… a lot of people, when I say that, say things like… “well, I’m sure they have the proper documentation on SOME of the loans… they can’t ALL be gone.” And I say, no they don’t.

And they say, “now how do you know that?” And I say, because of robo-signing… robo-signing does not appear on a list of alternative actions. If you chose robo-signing, it’s because you couldn’t think of anything else. And because they never have the properly endorsed note in any of the high profile cases.

If they had some, we’d have seen them by now… heard about them… instead all the banksters say is that it’s an isolated incident whenever they don’t seem to have one, or the law firm didn’t produce the proper documents… stuff like that. In the Ibanez decision in Massachusetts, they didn’t even show up with a schedule of loans…nothing.

At this point it’s at least statistically improbable that they have them… unless they have them and they’re blank on the back, as in never endorsed to anyone, in which case the are in a vault somewhere and they’ll never show them to anyone.

And even after all that and more, some people, especially journalists, still say… “well, we’ll see.” Many of them aren’t even bothered by the fact that pretty much all the banks were robo-signing… all of them… competitors… and they all seem to have the same problem and they all came up with the same idiotic solutions… and all at the same time… all of them… competitors… fascinating.

Well, I’d say that what I’m about to show you puts a proverbial nail in the benefit-of-the-doubt-coffin.

Here’s how I analyzed the situation in Hawaii… it seemed to me there were four options for the banksters:

Conform to the new non-judicial foreclosure process.
Go with the state’s judicial foreclosure process.
Do nothing, stop foreclosing and hope to get the law changed next legislative session.
Bring some sort of preemptory challenge to the new law in federal court.

That’s it, right? What else could the banks do, in light of the new law?

I figured, that if I was right, they couldn’t chose #1. They just don’t have the chain of title documents unless they forge them. They could go with judicial foreclosure, #2, but it sure could be Florida Part Two, and that’s a real mess. Besides, Hawaii courts could adopt the same standard the new law outlined for mediation, in which case there’d be little advantaged gained. #3 seemed unlikely, but was a possibility nonetheless. And #4… well, it seemed to me that banks challenging the state’s new law could be WW III.

So, I really didn’t know what the banking industry was going to do… I only knew one thing with certainty, even if everyone didn’t agree… no way would they conform to the new law governing non-judicial foreclosures. Mediation sounded nice but if you can’t prove you own the property, you can’t satisfy the requirements of the new state law in Hawaii.

That’s what’s funny, in a way… Hawaii’s new law is only demanding that the bank follow the existing laws… nothing more. SB 651 doesn’t impose some new law or new requirement on bankers related to foreclosure, it merely requires bankers to do what they should have done all along under the existing laws governing the transfer of real property.

And if they can’t do that because they didn’t follow the existing laws governing the transfer of real property, well… then that’s what needs to be addressed, right? The answer isn’t to forge documents, right? That cannot be the answer. Covering a crime with another crime cannot be the answer, right?

Let’s say I lost my pink slip to my car and I want to sell it to you. I can’t. I’m going to have to go down to the DMV and follow some sort of process to get anew pink slip. Period. The answer isn’t for me to get on my computer and make a fake new pink slip. If I do that, now I’m guilty of a crime. And no judge is going to care that I was in a hurry to sell my car and say it was okay, therefore, to forge a pink slip. I’m not a lawyer, but I’m pretty sure that what I just said is correct.

So, what’s the NEWS? Is that what you’re wondering at this point… I’m torturing you? Okay, sorry, I just wanted you to have the same foundation I did when I heard the NEWS.

Fannie Mae has announced that it will ONLY pursue JUDICIAL FORECLOSURES in the State of Hawaii. They will not even attempt to comply with the new law. And why? I know why and you should too… because they can’t… because they don’t have the properly endorsed notes and can’t produce the proper chain of title… ever.

It’s like a game of chess… they did things… Hawaii did something in response… then they make a another move… and now it’s Hawaii turn again. And I’ll be on the phone to Hawaii in the morning… because I have an idea or two about what their next move might be.

And one more thing… let us not forget that this whole thing isn’t about the borrowers. All anyone has wanted was for the banks to modify loans in order to PREVENT PREVENTABLE FORECLOSURES, as the federal government asked them to do… as they contracted with the federal government to do… as is the right thing to do after being bailed out by the American taxpayers… and after being the people that caused the economic meltdown in the first place.

Why is it perfectly okay in the mind of the banking industry that they continue to be bailed out in various forms, but it’s not reasonable to extend the same courtesy to the American taxpayers who did the bailing. Did the homeowners of this country cause housing prices to fall off a cliff in the course of a year? Or did that happen because of a global credit crisis? Because I don’t think it was the homeowners who caused the global credit crisis, was it homeowners? Did we do that?

No… we did not.

Mandelman out.

~~~

Here’s the Fannie Mae Press Release, dated today… June 10th, 2011.

Fannie Mae on Hawaii’s New Law

Jun

NBC/MSNBC.com Try to Cover the Foreclosures Crisis

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Loan Modification, Weidner

27137Leave a Comment2011-06-10+11%3A34%3A58Mandelman

Lisa Myers, Rich Gardella and John W. Schoen, all of NBC News and msnbc.com came together to produce the article that follows in part, and the series of televised reports covering the foreclosure crisis embedded at the bottom of this page. The title is:

No end in sight to foreclosure quagmire

A special Nightly News/msnbc.com report on the mortgage mess

Now, I don’t want to post their content… let me be very clear about that. Mandelman Matters is about original content, points of view you won’t find anywhere else. But, I think it’s important that you see what I have to say about what they have to say, because it’s I think it will show you the disconnect that exists between the world we live in and theirs.

I’m going to try not to be overly critical of the three journalists that worked on this story. I think they did the best they could with what they’ve got… what they could learn… and where they work… at NBC. I won’t re-post their article in its entirety, to read the whole thing you’ll need to click on the link above.

The good news is that their story shows that the main stream media, I suppose since 60 Minutes aired the episodes about robo-signing and the like a couple of months ago, is finally starting to pay attention and acknowledge that there is a foreclosure crisis and that it’s dragging down our economy and negatively impacting the lives of some number of Americans.

The less-than-good news is that they still do not have any sense of the magnitude of the problem or the degree to which it has already torn apart and inalterably changed the lives of millions of American families. They still do not fully appreciate the fact that the only thing that mortgage servicers do consistently is deceive and abuse those that contact them for help with their mortgages.

And some of what they say, shows me that they truly are out of touch… because to my mind it is unquestionable that this story should have run on NBC by summer’s end… 2009.

Here’s how their article begins…

Four years after a wave of rogue mortgage lending sent the U.S. housing market into the worst collapse since the Great Depression, the devastating flood of resulting foreclosures shows no sign of abating. In some ways, the problem is getting worse.

Okay, I’m not going to stop you at paragraph #1, but it nothing about the first part of this sentence is technically correct. It wasn’t the loans, it was the securities… it wasn’t the loans, it was the securities, not the loans… the securities. Say it over and over and maybe it will start to stick. Ask some experts… they’ll tell you the same thing. No, not banking experts, real experts.

Other than that, it’s fine.

And then they went this way…

House prices are falling again, forcing more homeowners “underwater” — owing more than their house is worth. Lenders’ shoddy document practices have brought widespread court challenges, slowing the process and leaving millions of homeowners in limbo.

And the foreclosure crisis continues to weigh heavily on the fragile economy.

As inadequate opening paragraphs go, I’m sorry, but this is an award winner. The first sentence, while certainly true, almost makes it sound as if fall has arrived. ”The leaves are falling again, causing many homeowners to put on their sweaters and bring their rakes out of their garages.”

This isn’t any sort of natural, cyclical or unavoidable event. As a nation, we are in the fourth year of an economic catastrophe that began during the summer of 2007, and yet at both the state and federal levels, even though tens of billions of dollars have been allocated to programs ostensibly designed to mitigate the damage to the housing market being caused by our deepening recession, our leaders have failed at every single attempt to stem the tide of foreclosures, or in any way stop the free fall in housing prices.

And to refer to the tsunami of fraudulent and forged documents lenders have produced in order to foreclose as quickly as possible as “shoddy document practices,” is to condone widespread criminal behavior by our nation’s largest financial institutions. At the very least, they could have acknowledged what the Office of the Comptroller of the Currency, the federal regulator for our national banks, has said very clearly in the consent orders issued at the end of its investigation, that the banks have engaged in unsafe and unsound practices.

Let us not forget for a moment that these banks rushed to foreclose using fraudulent and forged documents, while at the same time signing contracts with the federal government to participate in the Home Affordable Modification Program, HAMP, for which to-date they have been paid over half a billion taxpayer dollars.

Based on the evidence uncovered to-date, they have foreclosed illegally countless times, denied modifications to those who qualified under the federal program, and most recently JPMorgan Chase, Bank of America and others were even forced to admit that they violated the Servicemember Civil Relief Act by foreclosing on our soldiers while they are overseas fighting our wars.

And it is not “widespread court challenges” that are responsible for “slowing the process,” it’s the criminal acts… the “unsafe and unsound practices” that have caused our nation so much pain. The court challenges are nothing more than homeowners trying to protect their rights under the law… and conversely it is the bankers that are breaking the law.

Homeowners may be in limbo, as they struggle to keep their homes and avoid foreclosure, but it’s not the court challenges that keep people in limbo. Once again it’s the banks that do that. According to HousingWire, as of last November it took an average of almost 500 days to complete a foreclosure in this country… because I suppose banks need about that long to make decisions on loan modifications?

The banks approved the original loan in under 24 hours, but to approve its modification, by reducing the interest rate a few points, requires 500 days? Well, I’ll believe it if you will.

And yes, the foreclosure crisis certainly does, at the very least, “weigh heavily on the fragile economy.” Good for you guys at NBC to have gotten that part right, even if you did chose to phrase the concept in as benign a manner as could have been conceived.

Then it goes on to quote Mark Zandi of Moody’s Analytics, who has no idea what’s going on as far as the foreclosure crisis is concerned. If you’re wondering why I would say such a thing, click here to read my commentary on him being interviewed recently by Gwen Ifill. (Scroll down to Item #4.)

“Right now, it’s (the foreclosure crisis) the second-biggest drag on the economy after the surge in oil prices,” said Moody’s Analytics chief economist Mark Zandi.

Already some 5 million homes have been lost to foreclosure; estimates of future foreclosures range widely. Zandi, who has followed the mortgage mess since the housing market began to crack in 2006, figures foreclosures will strike another three million homes in the next three or four years.

Congress and the White House have run out of ideas to save those homes, he said.

“There’s no political appetite to do anything,” he said. “So we’re on our own.”

See what I mean? The second biggest drag, Mr. Zandi, behind oil prices? Where would the economic policy decisions made by the Obama Administration go on that list… I’m just wondering.

So, Zandi “figures” that foreclosures will “strike” another three million homes in the next three or four years? Okay, tell you what… since you say he “figures” it… could we please see his scratch paper so we could check out the calculations behind that incredibly scientific forecast? And what happens after the 3-4 years? Do foreclosures stop then… magically? Does someone ring a bell? Will we be notified when it happens?

I bet the last month’s worth of foreclosure victims are going to be all kinds of pissed off when they find out that if they could have held on another month, the whole foreclosure thing would have been over.

And Congress and the White House have run out of ideas that might save those 3 million homes that are going to be lost over the next 3-4 years? Already? This soon? They’ve “run out?” Kind of a shallow well they’re working with, Mr. Zandi, wouldn’t you say?

He is dead on right about there being no political appetite to do anything… so far anyway. So, yes… we are on our own in this fight against the banking class in this country. Gentlemen… and Ladies… start your lawyers. And I will go ahead and say this in no uncertain terms, if we’re still talking this same way in 3-4 years, no one will recognize this country… in fact, it’ll be hard to recognize anything… as a result of the tear gas.

Their article continued…

There were many causes of the foreclosure crisis — and plenty of blame to go around among mortgage lenders, regulators and, in some cases, the borrowers themselves. But as the crisis has accelerated it also has swept up families who, through no fault of their own, have lost or are in danger of losing their homes.

Alright NBC people… I’ll give you a C- on that paragraph. At least you’ve progressed from where you were a year or more back, but you have to get your arms around the cause of this crisis… and it wasn’t borrowers that caused it… it was bankers… Wall Street bankers, to be specific. It wasn’t the loans defaulting that caused the global credit markets to freeze solid in a matter of a few weeks during the summer of 2007… it was the securities that failed and were being downgraded in terms of their ratings that kicked off this fun-filled fiasco.

No matter, at least you’re understanding that today the people falling into foreclosure did nothing to cause their fate. It’s now happening at every socio-economic level of our society, and you may be assured that it will spread and deepen from here.

A few paragraphs later we’re treated to our new friend, Tim Massad, the acting assistant secretary for financial stability at Treasury. Massad is no genius, as you can come to understand by clicking HERE. Here’s what Tim had to say…

“This is an industry that was simply not prepared for this crisis, hasn’t had the procedures in place, hasn’t had the people to deal with it. And we’ve seen that over and over again. I think they’re better, but they’re not nearly where they need to be.”

Oh my God, what year is this? Oh… I checked my iPhone and it says 2011, whew… that’s what I thought. It was just that for a split second, after listening to Tim’s statement, I wasn’t at all sure.

So, I’m not going to drag you through the entire article, I want you to watch the video segments below so you can see how close, yet far away NBC’s cutting edge journalists are to understanding the truth about this tragedy.

I do have to recognize Mark Zandi’s contribution a few paragraphs down the page from here, because it’s the first time I’ve heard him say something smart in quite some time… he says:

Each new foreclosure brings another distressed property on the market, pushing prices lower. The greatest risk, said Zandi, is a downward spiral that becomes difficult to unwind.

“Prices decline, that pushes people underwater,” he said. “There’s 14 million people now underwater. Half of those are underwater by more than 30 percent. That’s the fodder for (more) default.”

Okay, Zandi… you did good there… that was very economist of you and I appreciate it, I really do. One thing though… is it necessary to refer to underwater homeowners as fodder? I’m thinking it is not. No one likes to be called “fodder,” Mark…

Mandelman out.

~~~

NBC NIGHTLY NEWS with Lisa Myers at the anchor desk, looks at the foreclosure crisis.

Jun

Treasury Official: “HAMP’s Incentives Meaningless” – SO, PROGRAM WASTED $560 MILLION?

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27120Leave a Comment2011-06-10+02%3A59%3A38Mandelman

Okay, that’s not the headline you’re going to see elsewhere on top of this story, chances are it’ll be more like, “Federal Payments Halted to 3 Mortgage Servicers.” You may have already seen it.

Here’s what it’s about, as told by The Washington Post/Bloomberg: (There will be links at bottom.)

“Three of the nation’s largest mortgage servicers will no longer receive payments tied to their participation in the Obama administration’s main foreclosure prevention initiative until they improve their performance in that program, senior housing officials announced Thursday.

Bank of America, J.P. Morgan Chase and Wells Fargo need to make “substantial improvements” to collect fees through the Making Home Affordable Program…”

So, that’s a good thing, I suppose. I mean, after more than two years, it’s nice to see Treasury doing something to punish the mortgage servicers who’ve been ignoring rules, abusing homeowners, and foreclosing on homes they should not be foreclosing on for… oh, let’s see… I don’t know… June, July, August… plus seven… carry the three… oh yeah… OVER TWO YEARS!

Personally, I would have liked to see something a tad stronger, but since up until now all the servicers have received is a stern talking to, I suppose I’m happy about this step being in the right direction anyway.

Treasury says that they can’t do anything more to punish the mortgage servicers, they don’t regulate them apparently… all Treasury is allowed to do is shower them in billions of taxpayer dollars, and withhold a few million here and there.

If that’s the case, and I have no reason to believe that it isn’t, then I would only like to suggest that perhaps some of the millions eligible for withholding could have been withheld prior to paying them the $560 MILLION we’ve already paid them. I know… water under the bridge… spilt milk… all those things, but I just had to say something… okay, enough said.

According to the Washington Post/Bloomberg article…

Tim Massad, the Treasury Department’s assistant secretary for financial stability, defended the decision to take action now even though the program has been criticized for years. In late 2009, there were only 30,000 permanent modifications done, Massad said. “That’s not very much money to withhold,” he said. At that time, the administration was more concerned about making sure that the servicers had procedures in place to handle the volume of loans coming their way, Massad said.

Well, okay then… since hardly any time has passed between “late in 2009 when there were only 30,000 permanent modifications,” and today when there are roughly 700,000 permanent modifications, I’m going to go ahead and take his side on this issue. Fair enough, Tim Massad, assistant secretary for financial stability… you tell ‘em.

(Look, I expect everyone be nice to Tim, okay? It’s obvious that he has special needs. Like my mother used to say when discussing someone like Tim… bless his heart.)

So, I bet you’re wondering why my headline is so different from the other headlines that reported this story. Well, I’ll tell you. In one version of the Washington Post/Bloomberg article I found the following sentence:

“Doing so is not likely to discourage lenders from modifying loans, the (Treasury) official said. “

It’s not? Withholding the incentive payments is not likely to be a disincentive? Withholding the incentives won’t be a disincentive?

Why not?

Are they sure?

Because I think that makes no sense whatsoever.

In fact, it’s really bothering me that they think that, because that would seem to me to mean that the incentives were never providing much of an incentive in the first place, and that means Treasury has taken $560 MILLION of tax-payer money and set it on fire… no, even worse… they set it on fire AND let the mortgage servicers torture homeowners for more than two years!

Here’s another sentence from that article that caught my attention:

“Instead, the strategy and the in-depth analysis of each lender should shame servicers into shaping up.”

The shame thing again. Didn’t we already try the shame thing… like, more than once? The jury is in on this one, the servicers are not capable of feeling shame. Anyone not see that yet?

BUT THAT’S NOTHING… HERE’S WHERE IT GETS WEIRD…

I read the articles about this withholding thing, and I was checking others to make sure I hadn’t missed anything, and I discovered something really strange. There are TWO VERSIONS of this story on the Washing Post/Bloomberg site. While I was writing this very article, they changed the article, I swear to God…. Check this out for yourself:

Here’s the first version that I’ve been quoting:

Federal payments halted to 3 mortgage servicers

And here’s the “new” version that just popped up out of nowhere:

Federal payments halted to 3 mortgage servicers

The difference is that the first version has this sentence in it, the one from above:

“Doing so is not likely to discourage lenders from modifying loans, the (Treasury) official said. “

But in the “new” version… THAT LINE IS GONE! Vanished… disappeared. Shazam!

What the heck happened here, did someone at Treasury see the story and realize that someone… like maybe even Mandelman Matters… was going to jump all over that sentence on a blog today?

How spooky is that?

Or wait… I suppose there is another explanation. Maybe the anonymous Treasury official who said that sentence was Tim Massad.

See… that would explain the whole thing and now I feel really badly for bringing it up in the first place. Never mind.

And bless his heart.

Mandelman out.

Jun

Please Call the White House Today for Elizabeth Warren… Here’s the Number and a Script. Please Call.

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27103Leave a Comment2011-06-09+19%3A06%3A29Mandelman

I’ve asked you to email or place calls to voice your support for Elizabeth Warren to head up the Consumer Financial Protection Bureau before… thousands of you have done so in the past… and it has made a real difference because she’s still there even though there are many powerful bankers that want her gone.

Now, I need to implore you to make one more call to the White House to voice your support for Elizabeth Warren. President Obama must make his appointment by July 21st, and the banking lobby… and those in the senate that are bought and paid for by the banking lobby… will do everything possible to oppose her nomination.

You want to stand up against the bankers in this country? Do you really? Then make this call to the White House. If you don’t, then why in the world are you reading me?

Here’s who opposes Elizabeth Warren:

House Republicans, led by Representative Spencer Bachus, who is chairman of the House Financial Services Committee recently said the following:

“In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to SERVE the banks.”

Personally, I think we’ve SERVED up ENOUGH to our bankers, and I’m done serving. I think it’s time Bachus and his Bankers Buddies serve the middle class in this country (and vote him the hell out of office in 2012. Who is this guy, OMG?)

I had the privilege of meeting Elizabeth Warren about a month ago when she was in San Diego and here are a few of the things she said to me… I wrote them down at the time so I’d have them word for word:

The number one retirement plan in this country was to pay off the house and live on one’s Social Security and presumably whatever additional savings one had accumulated over one’s working years.

That has been robbed from the American people by the financial sector.

The CFPB is the opportunity to begin to change that. It won’t solve everything and there is much work to be done, but it represents our only hope.

I don’t believe that the OCC is going to be capable of helping the families that are headed towards the cliff and lose their homes to foreclosure.

I thought we had the fight last year and we won and we got the agency that would have the mission of protecting consumers. But we now see that the fight is not over. There are bills in the legislature today that threaten the agency’s very existence by proposing to defund or defang the new agency.

When they go after me, the best they can do is to say that I’m too confrontational with the bankers. Since when do we ask the bank robbers what they think of the new laws punishing bank robbers?

Here’s a link to Elizabeth Warren’s recent testimony to the Committee on Financial Services in the House of Representatives. If you’re not sure, please read what she has to say… it really matters a lot.

Testimony to Financial Services Committee – March 16, 2011

Here’s a link to her speech delivered at the Credit Union National Association conference:

Elizabeth Warren’s Remarks at Credit Union Conference

And here’s a link to the Consumer Financial Protection Bureau:

KNOW BEFORE YOU OWE $

~~~

President Barack Obama

202-456-1111

AND HERE’S ALL YOU HAVE TO SAY WHEN YOU CALL:

Hi, my name is [YOUR NAME] and I live in [YOUR TOWN], [YOUR STATE].

I’m calling to urge President Obama to appoint Elizabeth Warren to lead the Consumer Financial Protection Bureau, even if it means using his constitutional authority to make a recess appointment.

There is simply no better person President Obama can find for the job than Professor Warren.

Thank you for your time.

~~~

Click her to go to CREDO ACTION, a site organized to count the calls placed on behalf of Elizabeth Warren… please take the time right now to make the call…

CLICK HERE TO CALL

AND BE COUNTED!

Mandelman out.

Jun

Please Call the White House Today for Elizabeth Warren… Here’s the Number and a Script. Please Call.

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27102Leave a Comment2011-06-09+19%3A06%3A29Mandelman

You want to stand up against the bankers in this country? Do you really? Then make this call to the White House. If you don’t, then why in the world are you reading me?

Here’s who opposes Elizabeth Warren:

House Republicans, led by Representative Spencer Bachus, who is chairman of the House Financial Services Committee recently said the following:

“In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to SERVE the banks.”

The number one retirement plan in this country was to pay off the house and live on one’s Social Security and presumably whatever additional savings one had accumulated over one’s working years.

That has been robbed from the American people by the financial sector.

The CFPB is the opportunity to begin to change that. It won’t solve everything and there is much work to be done, but it represents our only hope.

I don’t believe that the OCC is going to be capable of helping the families that are headed towards the cliff and lose their homes to foreclosure.

I thought we had the fight last year and we won and we got the agency that would have the mission of protecting consumers. But we now see that the fight is not over. There are bills in the legislature today that threaten the agency’s very existence by proposing to defund or defang the new agency.

When they go after me, the best they can do is to say that I’m too confrontational with the bankers. Since when do we ask the bank robbers what they think of the new laws punishing bank robbers?

Testimony to Financial Services Committee – March 16, 2011

Here’s a link to her speech delivered at the Credit Union National Association conference:

Elizabeth Warren’s Remarks at Credit Union Conference

And here’s a link to the Consumer Financial Protection Bureau:

KNOW BEFORE YOU OWE $

~~~

President Barack Obama

202-456-1111

AND HERE’S ALL YOU HAVE TO SAY WHEN YOU CALL:

Hi, my name is [YOUR NAME] and I live in [YOUR TOWN], [YOUR STATE].

I’m calling to urge President Obama to appoint Elizabeth Warren to lead the Consumer Financial Protection Bureau, even if it means using his constitutional authority to make a recess appointment.

There is simply no better person President Obama can find for the job than Professor Warren.

Thank you for your time.

~~~

Click her to go to CREDO ACTION, a site organized to count the calls placed on behalf of Elizabeth Warren… please take the time right now to make the call…

CLICK HERE TO CALL

AND BE COUNTED!

Mandelman out.

Jun

Bank of America forecloses on un-mortgaged Florida home… that’s hardly news. Is EVERYONE missing the point here?

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

27069Leave a Comment2011-06-08+23%3A50%3A40Mandelman

Bank of America foreclosed on a home in Collier County, Florida. That’s certainly not news. The home’s owners, Warren and Maureen Nyerges, had paid cash for the property, so there was no mortgage on which to foreclose, but Bank of America foreclosed anyway… and that’s not news either. It may sound crazy, but it doesn’t even make the top 10 list of crazy where BofA or any other of the mortgage servicers are concerned.

I mean, as far as headlines go, “Bank of America Does Something Stupid,” is about as newsworthy as, “Cat Chases Mouse in Kentucky.”

The home’s actual owners hired a lawyer, Todd Allen, and a judge finally told Bank of America to give back the house they stole. Okay, that’s sort of news, I suppose, because all too often that doesn’t happen and the bank gets away with it.

And in this case, the judge even ordered BofA to pay the homeowner’s legal fees of $2,534. News? I don’t know… not to me.

Five months passed since the judge’s order and Bank of America still hadn’t paid the homeowners their twenty-five hundred and change… well… yawn and double yawn. Bank of America didn’t pay their bill yet. Yeah, like I’m shocked to hear that. Countrywide was supposed to pay homeowners something like $8 billion like two years ago and I haven’t heard anything about those checks going out either. So… big deal.

Now, don’t get me wrong, the homeowner’s lawyer showing up with the local Sheriff to repossess the bank’s desk and computers in order to satisfy the judgment entered against BofA… okay, that’s somewhat funny… hysterical even. Here’s how WINK News reported it:

The couple took their case to court and after a year and a half nightmare the foreclosure was dropped. A Collier County judge said Bank of America has to pay the couple’s $2,534 legal fees for the error. After more than five months the bank still hadn’t paid up. So, the homeowners’ attorney did just what the bank would do to get their money, legally seize their assets.

“I instructed the deputy to go in and take desks, computers, copiers, filing cabinets, including cash in the drawers,” Attorney Todd Allen told WINK News.

Outside the Bank of America on Davis Boulevard, several deputies stood by with movers ready to start hauling out the bank’s office supplies and furniture.

Inside, the homeowners’ attorney was locked out of the bank manager’s office by deputies while the bank manger tried to figure out what to do.

WINK News was quite proud of their reporting of this story, calling it: “A WINK News exclusive,” and crap like that. And, if course, the Internet lit up like Rockefeller Center’s Christmas tree at the news of a homeowner supposedly “foreclosing on Bank of America.”

Here’s WINK’s headline:

Tables Turn: Deputies and movers show up at bank to seize property for homeowner.

Tables turned? Which tables turned? I missed the tables turning, damn it.

Okay… look… I’m in this fight too and I know we can all use some good news… and just about anything might pass for being good news, at times. We’re up against the largest and most politically influential financial institutions the world has ever known. Oh, and don’t forget corrupt, disingenuous, heartless, morally bankrupt… you know… the words that go right along side “largest and most politically influential” when describing the to-big-to-fail banks of today.

So, it hasn’t been an easy fight to fight, and it won’t be an easy to one to win. There will be many setbacks and may times we who are fighting the banksters will feel like giving up. So, I get it that this story was one that everyone wanted to read and pass around to others… going viral, I think they call it. I must have received 200 emails containing a link to this story, for example. People went out of their way to pass it along… so… I don’t know… I guess that’s fine.

But was anything accomplished by passing THIS story around? No, not a damn thing. And it’s because EVERYONE MISSED THE POINT… the point that mattered, to coin a phrase.

Here’s how the WINK News story ended, by the way:

After about an hour the bank finally cut a check to satisfy the debt, and no furniture was taken. A representative for Bank of America issued a statement saying they are sorry for the delay in issuing funds. They claim the original request went to an outside attorney who is no longer in business.

Awww, golly… see… the bank wasn’t trying to hurt anybody… it was just an error and they fixed it once it was brought to their attention. Why did that homeowner have to be such a bully… bringing the Sheriff and all that… probably scared some of the nice folks that were there to do their banking… probably some women and children there at the time too. Bad homeowner. Bad homeowner.

What the heck is going on around here? We’re now passing around a story about a stupid PR stunt by a lawyer that ended up making Bank of America look REASONABLE? Oh my God, people… listen to me here… this is pure insanity.

Say the following sentence out loud and slowly to a child or anyone under the age of 30, or someone from another country regardless of age:

BANK OF AMERICA STOLE SOMEONE’S HOUSE. THEY FORECLOSED ON A FREE AND CLEAR HOME… THEY TOOK IT FROM THE PEOPLE THAT OWN IT.

If you really tried saying that to someone as I suggested… how did the person react? Did he or she even believe you? What did his or her face look like, assuming he or she did believe you? What questions did they ask you after they heard the incredibly shocking and disturbing news?

Now try telling them that it took 18 MONTHS for the home’s owners to get the home back. EIGHTEEN MONTHS. A week would have been outrageous. Eighteen months is unconscionable, unless perhaps we’re talking about Russia-under-Stalin, or something like that.

And need I remind you that Florida is a judicial foreclosure state? So, that means that a judge allowed Bank of America to steal this home. And… what? Is the judge sorry? Does he get fired for that? Is he even aware of what his incompetence facilitated? Why wasn’t he quoted by WINK?

And about WINK News being so proud of their “exclusive.” Where were they during the last 18 months, while this family was living in absolute hell on earth? Did they lift a finger to publicize their plight? Did they even care?

And can we just talk for a minute about the penalty for stealing a home in this country? Because, come to find out… it’s just a fine… on the scale of maybe a parking ticket to a bank. Let’s see… stole a home… okay, that’ll be $2534. No problem let me make a call and I’ll get you a check.

That’s quite a deterrent, wouldn’t you say? For $2534, there might be some at banks capable of stealing someone’s home on purpose… you know, just for fun… because they’re pissed at them, or whatever… in order to watch the home’s owner twist in the wind helplessly for a year and a half.

“Come her… this is funny stuff… watch them move into a motel with their kids… Hahahahahaha… watch what happens next… the Dad shoots himself in the head, or has a heart attack… it’s priceless.”

Cheap entertainment, right? Where is the outrage at this having happened in this country? Has it just become the norm that people occasionally have their homes stolen from them, for a year or two from time to time? Cars have always been stolen on occasion, so now it’s homes too? Seriously?

Here’s an idea for the homeowner’s attorney Todd Allen. If you want to try a PR stunt… go get $2534 in one dollar bills, call up WINK NEWS… and the judge who allowed this to happen and levied the paltry fine… and set the money on fire in the middle of the down square.

Now, that might get someone’s attention… or maybe not.

NOW, ABOUT MISH SHEDLOCK…

Even Mike “Mish” Shedlock, who writes the blog Global Economic Analysis, which is one that I happen to like a great deal, doesn’t have a clue what’s going on in this country, in fact he spends most of his column covering this sensationalistic piece of garbage story talking about homeowners squatting while not paying mortgages.

He did get some of it right. He thought the $2534 fine was absurd, and that it took 18 months to correct… well, preposterous. So, that’s the Mish I know and love… one of the only sites out there to have gotten something right here. Here’s how he started…

Sensational cases like this make all the headlines, but are statistically meaningless, with a bordering on zero percentage.

That said, I side with the couple. Indeed I think suing for expenses only is a travesty of justice. Something like $100,000 would be more appropriate.

It is preposterous that it would take 18 months to determine there was never a mortgage. Unfortunately, that is how fooked the system is. Alternatively, that is how fooked Bank of America is. Most likely, it’s both.

But after that, Mish showed me that’s he’s been a little too busy reading up on the EU, because he knows nothing about what’s happening on the street where he lives. He said:

“… I do not object to huge fines for complete blatant stupidity as depicted by Bank of America in the above article. If there are more cases than I think, so be it.

First we need to start with a realistic assessment of errors and a breakdown of how serious those errors are. In the above instance, it is clear there was a severe error, and an errors that should have been rectified in 2 days, not 18 months. I do not object to punitive fines in such instances.”

IF THERE ARE MORE ERRORS, Mish? IF? Gee, well… maybe there are? Do you think? Could be? Might be? Gosh, I’m not sure? Should we do a study on this to see if we can’t find out? You know… get to the bottom of things?

This is proof positive for me that our government has no idea what to do because they have no idea what’s going on. Because if Mish doesn’t know, then no one does.

Then Mish goes on… and on… on a subject about which he clearly knows almost nothing. It’s really very unlike him, shockingly so… so I figure someone should say something.

“I see cases like the above trumped up as if they are common, and I see people clamoring to give homes to people free and clear because of a messed up MERS and “show me the note” objections.”

Do you really see all that, Mish? Where? Where exactly are the cases like this being “trumped up” as being common? They ARE common, and I’d love to see who’s doing the trumping. I’m not saying there are thousands of cases EXACTLY like this, but I’m sure as hell saying that there are tens of thousands… and maybe hundreds of thousands of cases where the abuse by the mortgage servicer would shock any thinking and caring person’s sensibilities… and where the laws of this country have unquestionably been broken.

Not that you’ll find them in many mainstream media outlets going back two years, but I think you can probably figure out what that might be, can’t you, Mish? And lately, I believe 60 Minutes has exposed quite a bit on the topic… unless of course you don’t consider banks committing fraud and forgery anything to get all worked up about.

Mish, for the record there are thousands that have been turned into virtual shut-ins as a result of the bank’s illegal behavior and tactics. Some have taken their own lives. Are they all, in your mind, just a bunch of deadbeats that bought homes they can’t afford… shame on them? I’ve read your column for two straight years… and you’re much smarter than that, so I can only assume you’ve spent no time on this issue… and if that’s the case, why start now when the only possibility is that you’ll either preach to the choir or embarrass yourself?

Unfortunately, he went on…

“The current focus is not on justice, but rather maximum punishment.

Those who want the courts to conclude that MERS has clouded every title, better be careful of what they wish. Should that be the ultimate ruling, no one who owns a home that went through the MERS system will currently have a valid title.

Want to sell your home? Sorry you can’t. Want to buy a home? Sorry, you better not because the title will be clouded. This is serious stuff. If the MERS opponents get their way, Housing in the US would literally shut down.

In their desire to punish banks and let people live in their houses for free, few have bothered to figure out the severe consequences on innocent parties who simply want to sell or buy a home.

Punishing the banks to the maximum extent possible to slay the evil MERS dragon, consequences be damned, should not be the focus. Instead, we need to determine actual damages before sensible fines can be levied. Meanwhile, and far more importantly, we need to determine what we need to do to fix this mess, determine how to fix or scrap MERS, and do everything we can to get the foreclosure backlog behind us.”

There’s just so much wrong with his take on this, I hardly know where to begin.

First of all, this is not all about MERS, in fact, very little of it is about MERS. Have you read the OCC’s Consent orders? MERS itself has said it will not be foreclosing going forward. Forget about MERS, Mish… there are much weightier issues with which to grapple here.

(At the bottom, I’ve provided links to ALL of the OCC’s COnsent Orders, by the way.)

And the current focus is neither on justice nor maximum punishment, as far as the foreclosure crisis is concerned. In fact, to-date I’d say the focus is on looking the other way and pretending we’ve just got a few million irresponsible deadbeats who need to be thrown out of their homes for the betterment of our economic society. So far, Mish, the focus has been moronic and uneducated, and since you’re neither of those things, it’s time to look closely for yourself.

We don’t need you fear mongering about how no one will be able to buy or sell a house in this country, because for one thing… that’s already the case, for the most part. And for another, if we don’t get some smart people like you looking at this crisis and making intelligent suggestions as to what might be done to fix it, no one will want to buy or sell a house in this country for 50 years, any more than they want to in other dual economies… as is the case in… let’s say the Philippines.

And no one with any credibility is advocating that the solution be that people should get to live in homes for free in order to punish banks. The banks have broken very serious laws… many of them and repeatedly, and they should face whatever punishment is deemed appropriate under the law. We’re still a country of laws, aren’t we Mish? How about we just stay with the whole law thing and let whatever the law says handle the punishing part? Sound fair?

And three are lots of innocent people that have either already been run over by this crisis or who will be very soon, and for years to come, if our current stance on this issue doesn’t change. Lots and lots… as in millions upon millions. And we need people like you to help stop that process, because it benefits no one. The foreclosure crisis today can NOT be accurately characterized as as bunch of people borrowing too much or an emerging inability to handle debt.

The crisis we are facing today is the fault of many things, as you know, and most notably the utter failure of our government to handle anything effectively… properly… with the use of a brain.

You don’t hear me coming out saying that you’re wrong about Greece, China, markets, debt ceilings, and the like… do you? No you don’t. Because I respect your views on those global economics issues. But on this, Mish… you’re just plain wrong.

I know, you want to work through the foreclosure backlog… we all want things to improve in the housing markets. But not at the expense you’re advocating. Not by allowing the economic and psychological slaughter of millions of working class Americans who’ve done nothing wrong and yet are being inappropriately vilified by those who don’t understand the situation in the least.

We’ve already got enough people doing that… we call them “BANKERS”. And they’re the people that coopt the courts in order to steal homes in an attempt to cover up the biggest case of fraud in the history of the world.

That’s all I have to say about that… for now. I wonder if this article will even reach 10 percent of the one about the homeowner foreclosing on Bank of America.

No, actually I don’t.

Mandelman out.

CONSENT ORDERS ISSUED BY THE OCC AFTER CONCLUDING THEIR INVESTIGATION:

Jun

Dear Banking & Government People Who Are Reading This…

By Mandelman | Foreclosure Blog News, Housing & Economic Research, Weidner

8618Leave a Comment2011-06-08+10%3A47%3A20Mandelman

This was originally posted on May 30th, 2010, and I plan to repost it every year in the hopes that it matters.

Okay, so there’s this online thing called Google Analytics. And it shows someone who has a blog or website from where traffic to his or her site is coming. Now, it’s not always easy to tell where someone is from because some of the domains just say “verizon.net,” or whatever.

But other times I can tell where my readers are, because their domain says “freddiemac.com,” or “wellsfargo.com,” stuff like that. So, if it was just once or twice, then I would just figure that someone bumped into my blog by accident, but just between April 28th and May 29th, for example, people at FreddieMac.com came onto my blog 172 times.

Wellsfargo.com folks showed up 170 times. JPmchase.com 94 times. Bank of America’s 64 times. usbank.com 26 times. IndyMac Bank 26 times, fanniemae.com 20 times. wachovia 19 times. fdic.gov 17 times. ca.gov 16 times. hud.gov 14 times. va.gov 14 times. mellon.com 12 times. You get the idea.

I also know that many of you spend a whole lot of time on Mandelman Matters. Like, quite a few of you have visited hundreds of pages, give or take, on my site, so obviously you’re reading it pretty carefully.

So, banking and government people… what’s up? How are you? Are you reading me because you hate what I’m saying? Or, because you hate what you’re doing? Something in the middle?

I have heard from a few of you. How come not more? Do you feel I’m being unfair about anything? Or, am I pretty much nailing it? I’m not talking about my facts, I know my facts are right. But what about my opinions? Am I out of line? You can tell me if you think so, you know. I don’t get upset because someone has a different view than my own, but it should be a well thought out view. I don’t really do stupid.

Here’s the real question: Can I do more to help homeowners in some way that you know about, but I don’t. I mean, maybe your bank or government agency is actually trying to do good, but somehow struggling for legitimate reasons and maybe I could help in some way.

I don’t really know what I’m thinking about when I say that, but I’m certainly open to the possibilities. And I wanted you all to know that I’m very easy to reach and very easy to talk to.

If you want your identity kept secret, no problem. I won’t say a word about who you are. You can reach out to me and know that I’m only interested in helping homeowners get through this mess, and I’m only trying to do that because few others seem to be.

This crisis is complex and difficult to understand for most people and I’m kind of good at explaining complicated things in a simple way, and people say I’m funny, so I think I have to try to help. Because when the people of this country catch up with what’s gone on here, and then realize that it’s going to be going on for a long time, well… a number of them are going to be quite upset.

I know that a number of banking and government people think that the way home is through our banking system, and that the average homeowner is somehow at fault and therefore somehow undeserving of help, but it’s not true. Without addressing the needs of American citizens, something we have not done well thus far, we are all in trouble.

You guys started it when you came out blaming “irresponsible sub-prime borrowers” as being the cause of the crisis. That was pretty stupid, you must admit, and I wrote to a bunch of you back then telling you it was a mistake. Now you’re having trouble getting the political support you need to change what needs to be changed because you told everybody it was something that it wasn’t.

You guys all now know that this thing had about as much to do with sub-prime borrowers as World War II. Unless you can point out a sub-prime borrower who was selling synthetic CDOs in Iceland, I think we’re done with that conversation, don’t you?

And how comfortable are you with what Bernanke’s got going at the Fed, with the help of Treasury, of course? I mean, you do agree that we’re blatantly circumventing the legislative process in order to pump trillions into banks without that messy congressional thing, right?

Okay, so fine. I’m willing to look the other way on all of that, but we have to meet somewhere in the middle. At this point, homeowners don’t believe anyone on your side of the table cares at all. They all think you’re evil and willing to see millions thrown out of their homes without blinking an eye. And if that’s the case, then there’s no reason for us to talk.

But that can’t be right, right? I can’t believe that either political party thinks they can possibly get reelected by continuing down that path, do they? It’s a bad idea. So far, the foreclosure crisis is affecting roughly 15% of American homeowners, but that number will exceed 20% in a year, or perhaps 18 months. And then all bets are off. There’ll be no going back then.

I guess that’s it. I just wanted to let you know that I’m here and I’m open to doing whatever might be productive and helpful. You don’t have to worry about me being in this for the money because if that were the case, I’d have some.

So… feel free to get in touch of you have anything to say. My email is mandelman@mac.com and I promise to be a lot more reasonable than I probably come across in many of my articles. Truth be told, I’ve learned that subtlety does little to advance my cause.

If not, not. Feel free to continue reading me without reaching out. At least I feel better for inviting you into the discussion. And I do hope some of you will take me up on it.

Mandelman out.

Jun

Earth to Bankers, Earth to Bankers… Your Planet is Dying, You Must Evacuate, It’s Time to Come Home.

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

26985Leave a Comment2011-06-07+12%3A39%3A58Mandelman

Okay, this is becoming positively surreal. Yves Smith at Naked Capitalism calls it “Banker Derangement Syndrome,” (actually, she calls it Banker Derangement “Sydrome,” but I’m pretty sure that’s just a typo), but whatever it is there’s no question that it’s absolutely some of the fruit loopiest sort of thinking I’ve ever seen.

The bankers… yes, the very same bankers who leveraged up on garbage CDOs as if housing prices would never ever go anywhere but up are now supposedly shocked and dismayed that mortgage lending volumes don’t seem to be “coming back,” and that EVEN with some of the lowest interest rates in years, the only thing that seems to be happening is refinancing.

Really, Scooby-Doo? Why Velma and I can’t imagine why that would be. Hurry, let’s get to the Mystery Machine and see what Shaggy knows.

The article below comes from American Banker by way of Naked Capitalism, and I don’t usually write about what Yves Smith is writing about, at least not on the same day like this… partially because she’s smarter than me and I figure she’ll do a better job, but also becausde I just think it’s icky. Today, however, I just couldn’t help it.

So, with mortgage lending activity now apparently not coming back… wait a minute… why would that be the case? Could it be that the bankers have been the proximate and even SOLE CAUSE of this economic calamity the Obama administration continues to call a “recovery?” Wells Fargo and BofA both say they’re laying off people? Yeah, great… because they’re so darn over staffed in their loan modification departments, I suppose.

Listen people, I’ve said this before but there’s no real estate market. We don’t have one. It’s gone. The bankers blew it up. The only reason we didn’t sink straight through the floor two years ago was that Timmy, Benjamin and Sheila have all been blowing air into our economic tires to keep things looking like they’re running smoothly, but make no mistake about it… we’ve done run out of Fix-A-Flat, there’s not a service station for miles, and that giant railroad spike we ran over back in the summer of 2007 is sure-as-shootin’ going to bring our journey to an abrupt halt starting this summer.

Hey banker-people… people aren’t buying homes because you broke the bond market… that’s right… no one buys your mortgage-backed… and I use that term very loosely… IN-securities anymore because of the bang-up job you did defrauding them only a few years back. I don’t know when investors around the world will be ready to try them again, but my guess would be that they’ll give you another shot with RMBSs and the like, about the same time I’m ready to take a flyer on a dot-com IPO with no profits or customers who’s heralding the dawn of a “new economy.”

Are you feeling me here?

For the most part, all you’ve been doing is refinancing the same people annually since 2009, courtesy of theObama administration’s fabulous housing rescue program, and if you didn’t know that, then you really do need serious help.

Oh, I know… you also turned FHA into the “new sub-prime” and conned a few people into believing that “now was a good time to buy” over the last two years (it is fun to profit off of the misfortunes of others, isn’t it.), but trustee sales just aren’t what they used to be, now are they? What fun is just another credit bid and then it’s Hi-Ho-Hi-Ho… it’s REO we go… (insert your own whistling here).

And as far as blaming the slowdown on the proposed onerous capital requirements of Basel III, or compliance with Dodd-Frank, or whatever else isn’t your fault… oh, I don’t know… let’s see… what would be appropriate here? Oh wait, I’ve got it… how about… SHUT UP, SHUT UP, SHUT UP.

No one’s buying houses because you made it impossible for anyone to even think about doing so. People in this country are either so far underwater that they’re thinking more about walking away from their current mortgage than they are burying themselves in a new one, or they couldn’t qualify for a loan that requires an 850 FICO and 50% down. You see the only people left in America that can qualify under those terms are… hmmm… let’s see… um… oh yeah… BANKERS! And why do you suppose that would be?

Come on… let’s not always see the same hands… who can spell TAXPAYER BAILOUTS? That’s T-A-X-P-A-Y… what in the Sam Hill are these people thinking… what planet are they living on?

But golly… interest rates are so low… and the stock market is so high… and everything’s just getting positively swell around here… banks are just fine… that little insignificant scare we had during the fall of ‘08… don’t fret over that… that was mostly just Hank Paulson getting panicky. We didn’t even need the TARP funds… that’s why we paid them back so fast, it had nothing to do with the restrictions on executive pay… and taxpayers made a profit… our books are right as rain…

FOR THE LOVE OF GOD, THE ONLY PEOPLE WHO BELIEVE ANY OF THAT DRIVEL AREN’T YET OLD ENOUGH TO READ… (or they could be a certain group of Republicans, I suppose, but I have no explanation for that.)

JPMorgan Chase is planning on opening 4500 branches in and around California? You must be kidding. Anyone care to bet on how many of those new branches end of being rented out to small businesses like dry cleaners or perhaps being replaced by a Taco Bell within 24 months of opening?

I do have one idea… it’s kind of out-there, I realize… what about… no, you’ll think it’s silly… well okay, I’ll say it anyway… promise you won’t laugh? Well, you could consider modifying loans? That might… just maybe… slow down the foreclosures that are sweeping the nation’s housing market right into the trash can. And fewer foreclosures could tend to stop the free fall in housing prices, which would mean fewer people going further underwater, which in turn might cause someone to want to fix something in their house, and won’t Home Depot be happy about that. And… well… why that could lead to… I don’t know what to call it… umm… prosperity? See, I knew you’d laugh.

Banker-people… you are the ones who’ve made… and continue to make our collective bed, and now you’re surprised that you too are going to be laying in it? Well, get used to it because it’s only just begun to suck around here. You didn’t need the middle class, remember? Let them eat cake?

Well, don’t ask for whom the bell now tolls… ’cause it tolls for thee.

Mandelman out.

FROM AMERICAN BANKER:

A drop in mortgage lending volumes to the lowest level in over a decade is forcing lenders to consider new cost cuts and staff reductions. The lack of activity comes despite a boost from low interest rates that has sparked a wave of refinancings, and is prompting lenders to face the prospect that refis and home purchases may remain moribund for an extended period.

“This is the bleakest I’ve seen the forecast in 26 years,” said Mick Rizzo, vice president and operations manager in Marshall & Ilsley Bank’s mortgage unit.

Mortgage origination volume fell 35% in the first quarter, to $325 billion, according to the Mortgage Bankers Association. For the entire year, the figure is expected top out at around $1 trillion and to remain at that level in 2012, the MBA predicts. That would be the lowest level of originations since 2000.

During past downturns, low interest rates helped pull mortgage lending out of the doldrums. This time around, however, lenders appear resigned to the notion that refinancings have run their course. With housing starts and permit issuances flat, there simply are not enough purchases of new and existing homes to offset declines in refinancings.

“If anyone is depending on the market to rescue them, I’m not sure that’s a sound strategy,” said Willie Newman, head of residential mortgage originations at the $4.6 billion-asset Cole Taylor Bank, a unit of Taylor Capital Group Inc. of Chicago.

Bankers are responding to the slump by reducing head counts, expanding into new markets and reducing costs.

Wells Fargo & Co. in April said it planned to cut 4,500 employees from its mortgage division. Bank of America Corp. eliminated 3,500 employees and closed 100 small fulfillment centers.

JPMorgan Chase & Co. has avoided staff cuts and instead is focusing on opening 1,500 to 2,000 retail branches in the next five years, mostly in California and Florida.

More cuts and further consolidation appear likely in the coming quarters, as well as a reduction in the ranks of small and midsize lenders and brokers.

Lenders have long been bracing for a drop in mortgage volume, despite previous reprieves from falling interest rates, said Cameron Findlay, chief economist at LendingTree, a unit of Tree.com Inc….

Some lenders also say the largest banks are propping up their own margins and refusing to lower prices for borrowers because of capital restrictions that have been proposed as part of Basel III liquidity requirements.

The expected drop in originations this year would result in a 10% to 20% drop in profits from mortgage originations, largely as a result of lower loan spreads and fees, Moody’s said in a report released in May. A 30% drop in origination volume would mean a 45% decline in net income from mortgage sales, according to the rating agency.

This appears to have the mortgage industry in a Catch-22. Lenders need new borrowers to sop up the shadow inventory of foreclosed homes. They are scarce, however, because the traditional crop of “move-up” homebuyers is unable to sell existing homes…

Tightened underwriting guidelines have increased the risk that a loan will not make it all the way through the pipeline, further increasing costs….

Concerns about buybacks from the government-sponsored enterprises and indemnifications of Federal Housing Administration loans also have forced many lenders to adopt new technologies to catch compliance problems.

“Reviews from investors are very detailed and post-closing scrutiny is high,” Newman said. “Lenders have to be adept at learning quickly what the issues are with investors on the closing side, because there has been significantly more focus placed on closing documents relative to two years ago.”

With a P.S. by Yves Smith over at Naked Capitalism who writes…

The new found religion on documentation at the time of origination is encouraging, but it is hard to tell whether the banks have gotten religion or are simply responding to outside pressure. It sounds like the latter, which suggests the industry has not abandoned its posture doing everything it can get away with. And with that attitude well entrenched, investors and borrowers are right to continue to be leery.

Jun

MAX GARDNER from the Front Lines of the Battle… A Mandelman Matters PODCAST!

By Mandelman | Foreclosure Blog News, Housing & Economic Research, Loan Modification, Weidner

26921Leave a Comment2011-06-05+21%3A43%3A28Mandelman

If the the foreclosure crisis and battle against the banksters was an actual conventional war, you know, like the kind of thing we usually refer to as a “police action,” or “peacekeeping mission,” (white phosphorus, after all is just “Freedom Powder,” right?) then O. Max Gardner III, or Max, when not reading his name off of his business card, would unquestionably be a 5-Star General… I picture a cross between General Patton and Adlai Stevenson… with a voice that sounds like it might have just walked out of Floyd’s barbershop on Mayberry R.F.D.

As most of my readers know, I didn’t come to this battleground from the real estate or mortgage industries, so I’ve had to learn a whole heck of a lot to really understand things, keep up with the latest insanity, and write articles that… well, that matter. There are so many people that have helped me along the way that I couldn’t possibly thank them all, but one stands out above the rest… MAX.

The very first time we spoke on the phone the call lasted over three hours… and this is a lawyer who’s busy beyond belief. During Max’s career, he has tried 102 lawsuits in front of a jury… all but two he won. And one of those two he re-tried and won the second time out. That’s not luck… he’s just that good at what he does… and more than anything else, what he does is what he knows.

Webbley, more commonly known today as the O. Max Gardner House, was the home of a key figure in the State’s famous “Shelby Dynasty,” O. Max Gardner (1882-1947), Max’s grandfather, who was a State Senator, the State’s youngest Lieutenant Governor, and later as Governor – 1929 to 1933.

~~~

Since 2006, over 800 attorneys from all over the country have graduated from Max’s Bankruptcy Boot Camp, ready, willing and able to take on the banksters and other creditors and servicers like few others could. They pay thousands of dollars and make the pilgrimage to Shelby, North Carolina to spend over 4 days learning from the best of the best.

I was honored that Max invited me to attend… and although I’m not a lawyer… I can tell any attorney reading this that it’s worth ten-fold what it costs… in fact when you combine the knowledge, the contacts and relationships, and the tangible tools and ongoing support one receives, it’s the definition of priceless. I can’t imagine another way to get what you do in ;ess than a week at Max’s Boot Camp.

And it’s not just about bankruptcy, so don’t let that term fool you. Max is a consumer attorney who finds advantages in bankruptcy court, but I’m quite sure could handle any courtroom in the country. It’s all about the battle against the banksters, the creditors, the servicers, and all; the rest who profit from illegal and unethical practices, and egregious and undisclosed fees and charges.

Okay… I’ll shut up now… click the button below… and you’ll hear a Mandelman Matters PODCAST… A PODCAST THAT MATTERS, if you will. From start to finish, it’s unquestionably MAX GARDNER at his candid best.

You’ll hear Max talk about the causes of the financial meltdown and foreclosure crisis. About the robo-sogners and what it means to homeowners and attorneys. About the banksters themselves and how they profited immensely from their fraudulent abuse of the the securitization process.

You’ll hear him talk about what’s ahead too. And what lawyers and homeowners should be thinking about today and tomorrow. I don’t think there’s anyone has been doing this as long or as successfully as Max, and therefore no one has his unique perspective on the crisis that is breaking the back of the American working class, and preventing our nation from recovering economically. I hope you enjoy listening to it, even half as much as I enjoyed doing it.

Here he is… my good friend… and yours… Max Gardner!

Jun

MAX GARDNER from the Front Lines of the Battle… A Mandelman Matters PODCAST!

By Mandelman | Foreclosure Blog News, Housing & Economic Research, Loan Modification, Weidner

26920Leave a Comment2011-06-05+21%3A43%3A28Mandelman

~~~

And it’s not just about bankruptcy, so don’t let that term fool you. Max is a consumer attorney who finds advantages in bankruptcy court, but I’m quite sure could try cases in any court in the country were there reason to do so. It’s all about the battle against the banksters, the creditors, the servicers, and all the rest who profit from illegal and unethical practices, and egregious and undisclosed fees and charges.

You’ll hear Max talk about the causes of the financial meltdown and foreclosure crisis… about the robo-signers and what they mean to homeowners and foreclosure defense attorneys… and about the banksters themselves and how they profited immensely from their fraudulent abuse of the the securitization process.

You’ll hear him talk about what’s ahead too… what he thinks lawyers and homeowners should be thinking about today and tomorrow. I don’t think there’s anyone has been doing this as long or as successfully as Max, and therefore no one has his unique perspective on the crisis that is breaking the back of the American working class, and preventing our nation from recovering economically. I hope you enjoy listening to it, even half as much as I enjoyed doing it.

Here he is… my good friend… and yours… Max Gardner!

Mandelman out.

CLICK HERE TO PLAY THE MP3 VERSION OF THE PODCAST: MOST COMPUTERS

CLICK BELOW TO PLAY AN ENHANCED VERSION OF THE PODCAST: FOR MAC USERS

Jun

Mandelman’s Overview of Economic News That Matters

By Mandelman | Foreclosure Blog News, Housing & Economic Research, Weidner

26781Leave a Comment2011-06-03+11%3A03%3A48Mandelman

I don’t usually post this type of post, mostly because I think there are lots of other sites that do. But I also know that yesterday there was so much economic data coming out… much of it seemingly boring… that I fear that many readers won’t catch it all. I mean, I know my readers know what’s happening in the housing markets, but there are other things melting down in this country.

For example, I’m posting the video below because I figure that some people didn’t see it yesterday. And that simply shouldn’t be allowed. (Hat tip to Yves Smith on Naked Capitalism.)

On the video clip from CNBC, Peter Yastrow, a market strategist for Yastrow Origer, told the pre-paid cheerleaders at CNBC that there is near panic on Wall Street today, because money managers cannot find acceptable yields… meaning that they can’t come up with a place to invest the funds for which they are responsible.

You’ll see that Peter is in a near panicked state. He REALLY doesn’t want anyone to sell stocks no matter what. He says if we start selling, it will be a disaster. Personally, me thinks he doth protest too much, and not that I have any money in the stock market at this point, but if I did, this video would be a red EXIT sign for me. Here’s some of what he says:

“What we’ve got right now is almost near panic going on with money managers and people who are responsible for money. They can not find a yield and you just don’t want to be putting your money into commodities or things that are punts that might work out or they might not depending on what happens with the economy.”

“We need to find real yield and real returns on these assets. You see bad data, you see Treasurys rally, you see all bonds and all fixed-income rally and then the people who are betting against the U.S. economy start getting bearish on stocks. That’s a huge mistake.”

The news of the day also showed manufacturing numbers came in “below expectations,” although I have to say that this country obviously has some overly optimistic forecasters, because they’re consistently expecting an awful lot. They also don’t seem to understand inventory cycles, which would seem to account for our first quarter manufacturing numbers. But, hey… what do I know…

The other bad news was that private sector employers, according to ADP, added just 38,000 jobs, which was just a smidgeon below the expected 175,000. Now, ADP’s numbers have come in under the government’s estimates in 12 out of the last 14 months, so if you want a larger number, just stand by and I’m sure the government will come through once again.

Of course, if you look around to see how others in the mainstream media are interpreting the data, you’ll see more of the same optimists that continue to be disappointed and they will say it’s just a blip and certainly not the beginning of another leg downward for our economy. The thing is… they’re not just wrong, more than likely they’re lying… and it’s easy to see what’s really going on here.

The stimulus spending is done. The tax credits for buying a home are done. QE-2, which stands for the second round of quantitative easing by the Federal Reserve… printing money, if you’d prefer, is also at it’s end. The Fed’s not buy mortgage-backed securities anymore. And meanwhile, housing prices are continuing to fall, and at this point in the crisis, they’ve fallen faster and farther than they did during the 1930s. And that’s according to… well, everyone except maybe the National Association of Realtors.

And I don’t even want to get into what’s soon to be defaulting in Europe, except to say that Greece is the word. After that is finally allowed to happen, the spanakopita is going to hit the fan, and then it’s anyone’s guess as to which way the Euro-dominoes will fall. It’s become clear, if it wasn’t already, that this is really not an “if,” situation, it’s a “when.”

The simple fact is that the world’s economies have been resting on multi-trillion dollar bed of stimulus money that has provided us with a soft landing perhaps, but it’s run out, as all stimulus must, and we have little else to show for it. Now the downward spiral that never stopped but sort of paused, can proceed with pulling us down.

And we know it too.

The Conference Board, the industry group that publishes the “consumer confidence” numbers, reported that its index of consumer attitudes fell to 60.8 from an already revised 66.0 in April. And once again, the numbers disappointed the unnamed “economists,” who supposedly were looking for 66.5, based on… oh please… based on nothing. (If this number falls below 55, I don’t know… maybe put on a sweater.)

But even though I think most people in this country are starting to sense the truth of what’s happening, even if many don’t know the details, Wall Street, according to the headlines is “baffled.” Wall Street is Baffled by Slowing Economy.

Mike Riddell, a fund manager at M&G Investments in London, in a note to CNBC published yesterday, says that all of the economic data in the U.S. has “fallen off a cliff.” Here’s an excerpt from his article, Horror for US Economy as Data Falls off Cliff:

“US house prices have fallen by more than 5 percent year on year, pending home sales have collapsed and existing home sales disappointed, the trend of improving jobless claims has arrested, first quarter GDP wasn’t revised upwards by the 0.4 percent forecast, durables goods orders shrank, manufacturing surveys from Philadelphia Fed, Richmond Fed and Chicago Fed were all very disappointing.”

And check this out… Moody’s Warns of Rising Risk on U.S. Credit Rating. We got this same type of warning from Standard & Poors a few months back, but Moody’s is taking it up a notch.

In a statement, Moody’s said it would put the Aaa U.S. rating on review for a possible downgrade if lawmakers in Washington do not make substantive progress in budget talks by the middle of July. Since the risk of continuing stalemate has grown, if progress in negotiations is not evident by the middle of July, such a rating action is likely,” Moody’s said.

These are the same ratings agencies that had no trouble stamping triple A on anything and everything in order to get us solidly into this crisis that are now threatening us with a downgrade, and I think they call that “irony.”

And the beat goes on… US Factory Orders Decline Broadly, Led by Transportation

According to the Commerce Department’s report yesterday, U.S. factory orders dropped in April, including a very sharp drop in the demand for transportation goods, which fell by 9.3% in April, almost erasing an increase in orders of 10.6% in March.

And such declines in orders were found across the board in April, with categories like primary metals, machinery, computers and electrical equipment, all taking significant hits.

And then you have people like that analysts at Danske Bank in Copenhagen who blame the lousy reports “on a confluence of factors hitting all at once,” but they don’t see the data as evidence of a prolonged downturn. Here’s their thinking on what has caused our downturn, if you can call it thinking:

“Higher oil prices and the Japanese earthquake are the main explanations” said Allan von Mehren, chief analyst at Danske, in a research note.

Allan also said: “The faster the decline now, the faster the recovery will be,” thus proving beyond any doubt in my mind anyway, that he is a dolt, because nothing this guy says makes any sense at all.

But all in all, the Yastrow you’ll see on the video below is not feeling good at all. He said:

“Interest rates are amazingly low and that, thanks to Ben Bernanke, is driving everything. We’re on the verge of a great, great depression. The [Federal Reserve] knows it.”

So, there you have it… a veritable cornucopia of crummy news… and all of it from CNBC, a cable news channel that normally broadcasts nothing but bull… markets. Bull markets… that’s what I meant. But, it’s getting impossible to ignore reality, and I think everyone should know it.

It’s going to get worse… no matter what we do… and I think all we can do now is know as much as possible about what’s happening in our world. Knowledge is power, right?

And by the way, the part that you don’t want to miss starts 6 mins and 30 seconds in… the rest won’t kill you, but you want to see Yastrow… for sure.

Mandelman out.

Jun

The Luckiest Bankers the World Has Ever Seen! And They’re Ours! Yay!

By Mandelman | Foreclosure Blog News, Housing & Economic Research, Weidner

26783Leave a Comment2011-06-03+08%3A35%3A52Mandelman

Okay, I wrote this on May 21st of last year. But, the banksters have done it again… they never have a bad day on their trading desks… they made money everyday… again. My comments still apply.

Goldman Sachs, JPMorgan Chase, Citigroup, and Bank of America have all reported that their trading desks made money every day of the first quarter of 2010. I heard this news for the first time while watching John Stewart on The Daily Show, which is pretty much the only way I can take in news about the banks these days without putting my health at risk.

To tell everyone the truth, I’ve become so desensitized to the lies and amount of unadulterated fraud involved in our banking system, combined with our government and our bankers, who have obviously come to believe that it’s perfectly okay, when it comes to our financial system, not to tell us whatever the hell they don’t want to tell us, although when this attitude became standard operating procedure I am unclear, that I am unable to hear or otherwise absorb most of the “happy horse pucky news” about the banks that the obtuse talking heads on CNBC like to blather on about most days.

If I do allow myself to actually listen to news of the astoundingly miraculous recoveries being reported by our bankers these days, I become physically ill… and so angry that I prefer to just stop loving my country, which, although a terrible loss to my psyche, is better than the alternative. I’m certainly not saying that I would ever agree with someone who blew up Goldman’s headquarters, for example, but if it happened, and God forbid it ever does, I’d understand. I might even consider buying a tee shirt with the likeness of the man who did it emblazoned on it. See why I can’t talk about this? Time to move on.

So, when I heard on The Daily Show that Goldman, JPMorgan Chase, Citigroup, and Bank of America all had trading desks that made money every single trading day during the first quarter of 2010, I just laughed, partly because Stewart is funny, which is why I have to get my television news almost exclusively from him these days, and also because I just said to myself… so what? Even a trained monkey can borrow limitless amounts of money at 0% and then loan it back to the Treasury through the purchase of long-term bonds. There’s no trick to that.

It does, however, take inconceivable hubris to brag about it by sending out a press release. When you consider the colossal amount of crap the banks conceal from us on a routine basis nowadays, why in the world would they possibly rush to tell us something like that?

According to a Bloomberg story on May 13^th, written by Jonathan Weil, who is my new hero by the way…

“Goldman said its daily net trading revenue topped $100 million 35 times last quarter out of 63 trading days. JPMorgan and Bank of America disclosed similar eye-popping stats. Citigroup, too, recorded a profit on each trading day, Bloomberg News reported, citing unnamed people who knew the results.”

Now, as Weil points out in his story, no one really knows exactly what the banks are being allowed to do to bring home these completely impossible profits because trying to glean anything meaningful from reading their financial statements is simply not possible, I don’t care who you are. And since none of the accounting regulations really apply to banks anymore, thank you Tim Geithner. it’s hardly worth even trying to figure out. But, Weil also points out something that’s absolutely worth pointing out…

Assuming you were such an adept trader of securities that you had a 70% probability of making money on any given trading day, which would, by the way, pretty much make you a God of Wall Street…

… the odds that you would make money trading securities 63 days in a row are roughly one in 5.7 billion!

To give you an idea of what that really means, I looked it up and the odds of being dealt a Royal Straight Flush in FIVE cards are about one in 650,000. That’s ONE in six hundred and fifty thousand.

Well, shave my head and call me baldy… these are some extraordinarily blessed bankers, wouldn’t you say? I’m sorry to have to say this, but it occurs to me that if you’re a person of the Christian faith, you either believe in Jesus… or these guys… because I don’t see how anyone could resolve the conflict required to believe in both. Now consider what the Honorable Mr. Weil points out next:

“Now consider that four of the biggest U.S. banks just pulled off a quarter-long win streak — all in the same quarter. Why would any of them even want to? Do they think the public doesn’t despise them enough? Surely it would have been easy to tweak the values of some illiquid “Level 3” assets lower for a day if they had been so inclined, just enough to avoid looking perfect. Yet none of them did.”

No, none of them did that, now did they? Nope, they didn’t at that. No, they damn well did not. They just didn’t. Not one of them did, in point of fact. Nary a single one gave it a thought, now did they? No. They obviously chose not to.

That’s enough. I’m out. Nobody talk to me about this, don’t send in comments. I’m going to bed where I will devote all of my energies to pretending we never had this little chat.

But first I have to go wash my mouth out and then take a shower, because I don’t know what it is, but all of a sudden it feels like someone just tossed a shovel full of dirt in my face, and then peed in my hair.

Jun

Hey Everybody… It’s “Pretend You’re Surprised About the Economy Day!”

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

26686Leave a Comment2011-06-01+14%3A51%3A18Mandelman

You know, some people like Christmas, others Thanksgiving… still others are partial to The 4^th of July, I suppose. But my favorite special days of the year are fast becoming the “Pretend Your Surprised About the Economy Days!” which I suppose are sponsored by the Obama Administration in conjunction with the United States Treasury Department, underwritten by the Federal Reserve.

Here’s how it works… I give you the headline straight out of the news of the day, and when you’re done reading it, you say out loud… “Oh my God, I can’t believe that!” Or something to that effect. Got it? Ready to play? Here we go…

1. U.S. Home Prices Falling Through Floor – Dip-dip-doo-wap-dip-dip-doo-wap-dip-dip!

March’s S&P/Case Shiller Home Price Indices show we’re having a “double dip” in U.S. home prices. In the first quarter of this year, the U.S. National Home Price Index dropped by 4.2% and that’s after it fell 3.6% in the fourth quarter of last year, while the declining National Index fell by 5.1% in this year’s first quarter as compared with the first quarter of 2010.

They’re saying that we’re back to 2002 housing price levels. Here’s what David M. Blitzer, Chairman of the Index Committee at S&P Indices had to say:

“This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation. The National Index, the 20-City Composite and 12 MSAs all hit new lows with data reported through March 2011.”

“Since December 2010, we have found an increasing number of markets posting new lows. In March 2011, 12 cities – Atlanta, Charlotte, Chicago, Cleveland, Detroit, Las Vegas, Miami, Minneapolis, New York, Phoenix, Portland, and Tampa – fell to their lowest levels as measured by the current housing cycle.”

“The rebound in prices seen in 2009 and 2010 was largely due to the first-time home buyers tax credit. Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession. Further, while last year saw signs of an economic recovery, the most recent data do not point to renewed gains.”

NOW YOU SAY: “Oh my God, I can’t believe that!”

See… isn’t this fun? Try another one…

2. Buckle Your Seatbelts, ‘Cause We’re Going Around Again…

The executive chairman of Templeton Asset Management’s emerging markets group, Mark Mobius, who oversees more than $50 billion, has said publicly that yet another financial crisis is INEVITABLE because we haven’t addressed the real causes of the last financial crisis.

Mobius was in Tokyo attending the Foreign Correspondents’ Club of Japan when he told the group:

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis. Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”

Mobius also explained that the total value of derivatives in the world today exceeds total global gross domestic product by a factor of 10. “With that volume of bets in different directions, volatility and equity market crises will occur,” he said.

The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in write-downs and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008.

Mobius also explained that the freezing of global credit markets caused governments to pump TRILLIONS into the financial system to shore up the global economy.

OKAY, AND HIT IT: “Oh my God, I can’t believe that!”

See… it’s more fun than fireworks, don’t you think?

3. Turns Out… Homeowners Who Default on Mortgages Aren’t Deadbeats? Go figure.

TransUnion’s latest study revealed that those who only default on their mortgage are much better credit risks than those who are delinquent on multiple credit accounts. And this held true across all credit scores.

Not only that, but the study failed to find evidence in support of the widely accepted “excess liquidity theory,” which says that those that stopped paying a mortgage during the recession had increased cash flow, and could repay other debts. And guess what else… homeowners in foreclosure performed similarly, IF NOT BETTER, on accounts opened further in the process.

Steve Chaouki, group vice president in TransUnion’s financial services business unit said:

“There appears to be a pocket of opportunity among mortgage-only defaulters that is NOT the result of excess liquidity, but rather the unique circumstances of the recent recession. This new market segment that the recession created is an important one for lenders to understand. They have the potential, today, to be stronger and more reliable customers.”

And, Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit said it best of all, when he said:

“This recession was unique in that certain consumers who defaulted on mortgages would otherwise be good credit risks. It appears their actions were driven by difficult economic circumstances than by any inherent inability to manage debt.”

NICE AND LOUD THIS TIME: “Oh my goodness, I cannot believe that!”

Okay… I’ll drive from here if that’s okay with you…

4. It Depends on Your Definition of a Double-Dip… and these two guys fit mine perfectly.

GWEN IFILL: A new report out today shows the state of the housing market has grown even more bleak. But what is driving this stubborn downward pressure?

(I couldn’t even guess.)

For that, Gwen turns to Rick Sharga, senior vice president of RealtyTrac, a website that publishes data on real estate and foreclosure trends, and Mark Zandi, chief economist at Moody’s Analytics. If they can’t tell us, no one can.

GWEN: Rick Sharga, are these numbers proof of a double-dip recession, that term we have all feared?

(Very scary term.)

RICK SHARGA: Well, certainly not a double-dip recession in the overall economy. But you can make an argument about the double-dip in the housing market. It just depends on your definition of a double-dip.

(Oh, well thank the good Lord for that. It’s not in the overall economy, just the one I live in.)

RICK SHARGA: Is a 5 percent drop compared to a 20 percent drop a couple of years ago really a double-dip, or is it just a continuation of a downward trend that the market is trying to correct?

(Hey, who’s asking the questions around here? And, which is worse: a double dip, or a continuation of a downward trend? I’m freaking out over here. Which one, Rick, which one?)

GWEN: Mark Zandi, in your opinion, what are the driving factors, to say the two or three big driving factors here?

(The suspense is KILLING me.)

MARK ZANDI: Well, obviously, a 9 percent unemployment rate is a problem. A tough job market makes it hard for people to go out and buy homes.

(Don’t you hate it when economists get all technical like that? What’s he trying to say?)

MARK ZANDI: I think the foreclosure crisis is a very serious weight on the housing market. We have millions of loans in the foreclosure process that are going to go through and are going through to a distressed sale. And those homes get sold at a big discount, a big price cut. And that’s driving prices down as well.

(He thinks the foreclosure crisis is a very serious weight on the housing market. I suppose it could be… never really thought about it.)

MARK ZANDI: And confidence — if you look at the consumer confidence numbers, people are still very nervous and scared. And, of course, nothing takes a higher level of confidence than signing on the dotted line to buy a home. So, if people aren’t feeling really good about their financial situation, that’s going to be hard on the housing market.

(Damn it, people… we’ve talked about this before. You’re screwing up our economy with your lack of confidence again. Come on… buck up… get confident.)

GWEN: Rick Sharga, what — would you agree with that, and what would you identify as the major driving factors in this?

(Here’s your moment, Rick. Hit one out of the park, show Zandi what you’re made of…)

RICK SHARGA: I think Mark is dead on. I think he’s probably hit the major identifying factors.

(Oh, well… there you have it then. A swing and a miss… Thanks fellas.)

RICK SHARGA: I think one of the exacerbating factors is that it continues to be stubbornly difficult for the average homebuyer to qualify for a loan. We have historically low interest rates, and relatively few people who qualify to get these loans.

(Really? Now why would that be?)

RICK SHARGA: And I don’t think the foreclosure problem can be overestimated.

(Oh, sure it can, Rick… I’m quite sure you can overestimate anything.)

GWEN: Mark Zandi, you talked about confidence. I wonder if that’s not affected when we talk about these foreclosure numbers. People look at how badly this all went after the bubble, and they think to themselves, you know, I don’t really need to own a home anymore. How much of that is playing a part in this?

(Yeah… Bubble, bubble, toil and trouble… I got burned and I won’t down double. With apologies to Billy Shakespeare.)

MARK ZANDI: Well, I think that is certainly playing a role. I mean, I think nobody wants to catch the proverbial falling knife. So when prices are weak and falling, you don’t want to take the plunge, buy a home, and then, of course, lose value six, 12 months down the road. So, it’s a bit of a chicken-and-egg kind of problem.

(Oooohhhh nooooo, a chicken and egg type problem? That’s not good. I think that means it’s unsolvable, right?)

MARK ZANDI: People are very nervous that if they buy today, that the value of their home will be worth less in the future. And it’s probably a deeper longer-term issue as well. Many people are viewing housing very differently than they did in the past.

(Yeah, like in the past, people viewed a home as a place they would live for a long time. Now they view it as a place they’ll get evicted from over the summer.)

GWEN: Mark — Mark — Rick Sharga, is there another vicious cycle here, which is, if you worry that you cannot get a home, if you worry that you can’t get a loan, if you’re worried that you cannot keep a job, that all of that drives lessened demand as well for all these homes clogging up the market?

(I’m not sure. What’s the answer, what’s the answer, damn it…)

RICK SHARGA: You know we recently surveyed potential homebuyers across the country. And the number that jumped off the page at me was that 40 percent of the renters we surveyed said they have decided never to buy a house.

(Must be surveying renters that went to college.)

RICK SHARGA: That number just — just hit me right in the face, because we’re coming only a few years off historically high levels of homeownership, I think almost 69 percent. And the next generation of homeowners, to Mark’s point, 40 percent of them have already opted not to participate in the housing market. So, it’s a frightening number. The only reassurance I can give is that we do know that consumer sentiment has a way of swinging wildly back and forth.

(It does? I swing wildly back and forth? I didn’t know that about me. Live and learn, I suppose.)

RICK SHARGA: So, if we do begin to see job creation, if we do begin to see a return of consumer confidence, if the housing market begins to stabilize, hopefully, that consumer sentiment can swing back toward where we have a more active buying market.

(Is that all we need? Jobs, confident consumers, and a stabilized housing market? Oh, thank heaven. For a minute there, I thought we might be in real trouble.)

GWEN: Mark Zandi… Is this a regional problem that we’re talking about now, or are we talking about a true national overhang, a hangover from the boom years here?

(It could be regional I guess… it’s pretty much contained to the planet Earth region.)

MARK ZANDI: Well, it’s a national problem.

(If you’re in the EU, don’t be insulted by that… it’s not his fault. A lot of Americans don’t really know there are other countries.)

MARK ZANDI: And every corner of the country has been impacted. Prices are down almost everywhere. There are some bright spots, you know, Texas, for example, parts of the Farm Belt. But outside of that, we have seen foreclosures increase, house prices decline.

(I can’t decide… Texas or the Farm Belt… Texas or the Farm Belt… I think I’ll… EAT A GUN.)

MARK ZANDI: So, yes, I think you could — you would consider this a national house price decline. And, in fact, it’s — it’s unprecedented. The — you would have to go back to the Great Depression in the ’30s to find a time when so many markets have suffered such large price declines. So, it is a national phenomena.

(I kind of like that terminology… we could start calling it “The Great Phenomena.”)

GWEN: Well, let me stay with you for a moment because you mentioned the Depression. That was obviously the biggest economic shock that any of us have — had experienced or perhaps our parents experienced. How much of this slowdown in the housing market is going to end up driving the entire economy’s recovery off-track?

(Oooooo… Oooooo… I know this one… Ooooo… Oooooo… she never calls on me when I have my hand up.)

MARK ZANDI: Well, that’s a good question. You know, I think the economy, it is growing. And it can continue to grow without housing, but it certainly cannot flourish. I don’t think this economy really can engage, it can’t create the kind of jobs we need to bring down unemployment in a substantive way, unless housing is headed north.

(I’ll tell you who needs to flourish and head north.)

MARK ZANDI: And in every economic recovery that we have experienced since the Great Depression, housing has led the way. So we need housing. And we need it to come back. I think there are some good things that are coming together. But the longer we have to wait, the more nervous I get about the recovery and the economic expansion.

(Good things are coming together? Which good things are those? Tell us now. And how much more waiting will make him more nervous? I need specifics, I can’t plan my life around his degree of nervousness.)

GWEN IFILL: Rick Sharga, do you see any good things that are coming together? And should they be given by the federal government or by the private sector or the — even state governments?

(Yeah, ’cause the state governments are flush with all that extra cash…)

RICK SHARGA: You know, neither of the government initiatives that we saw last year, either HAMP to suspend foreclosure activity, or the homebuyer tax credit, really had the intended effect.

(How does he know that? What the hell was the intended effect? If I knew the answer to that question, I’d die a happy man.)

RICK SHARGA: In fact, after the second tax credit, sales volume drove — went so far down, that it pulled home prices down perhaps even further than they would have gone otherwise. I think, unfortunately, the remedy to the housing market right now is probably time. We need time to create more jobs. We need time for consumer confidence to come back.

(If I could save time in a bottle… the first thing that I’d like to do… Hey, wait a doggone minute here… the second tax credit pulled down housing prices further than they would have gone without it? The tax credit pulled the prices down… this guy is no economist, I’ll say that for him.)

RICK SHARGA: We need time for lenders to actually feel comfortable enough to start making loans on properties that have values that are stabilizing. And then the market will start to recover on its own. But I don’t see government intervention as being a part of the solution right now.

(No, don’t be ridiculous… absolutely no government intervention… there’s no way that would help. Government intervention only helps banks, and auto manufacturers, and the stock market and big businesses. It doesn’t work anywhere else, everyone knows that. Anywhere else and government intervention just drags prices down… I think I’ve got it now. We just need to give it more time, simple as that. Like in Japan… they’re giving it lots of time… like 21 years… so maybe figure we give it 30-35… would that be enough time Rick?)

GWEN: Is this a way to — is there any way to know whether this is an anomaly for now or it’s a long-term problem?

(For some people, I think yes, but not for Gwen.)

RICK SHARGA: The continuing falling of home prices?

(Do you believe this exchange? He lost his train of thought? No, Rick… she was asking you how long you might remain stupid.)

GWEN: Yes.

(I’m going to chew on glass in a minute.)

RICK SHARGA: I think there’s probably a little bit more to go. I would be interested to hear what Mark said.

(Arrrggghhhhhh… a little bit more? Probably? Rick, you are such a jackass. You don’t really have the foggiest idea how you got here, do you Rick? Did your Mom get you the job?)

RICK SHARGA: But I think we’re very close to the bottom. And, unfortunately, we will probably bump along that bottom for a couple of years while we go through this inventory of distressed properties.

(I think you’re already bumping along the bottom, and you’ve hit your head and now have the IQ of a summer squash.)

GWEN: Do you agree with that, Mr. Zandi?

(Yeah Zandi… does rick have the IQ of a summer squash?)

MARK ZANDI: Yes. You know, I think the key statistic for house prices are the homes for sale that are distressed that are foreclosure and short.

(Was that even a sentence? Oh Lord, he’s going to start babbling… waiter, check please?)

MARK ZANDI: And as that share rises, prices will fall. Almost the arithmetic of it is that prices will fall. And I do expect the share of sales that are distressed to continue to rise through the end of the year. And so prices probably will bottom out at the end of this year.

(LMAO… what did I tell you? He has no clue what he just said… and, of course, neither do we. “Almost the arithmetic of it is that prices will fall.” He’s a babbling brook. And then he wraps it up with we’ll hit bottom at the end of THIS YEAR? Right after he said that, he was thinking, “Why the f#@k did I just say that, oh well… too late to do anything about it now, maybe no one noticed.”)

MARK ZANDI: And then by this time next year, I think we will start to see some true price stability, some price gains. So, I think we have to get through this last mountain of foreclosed property. And on the other side of it, I think we will be in measurably better shape.

(So, I guess, based on what he said earlier, by this time next year good things will be coming together. We’ll have jobs coming out of our ears… oodles of confidence everywhere, and a stabilized housing market, is that about right, Mr. Zandi… you spineless sycophant?)

GWEN: Mark Zandi at Moody’s Analytics, and Rick Sharga at RealtyTrac, thank you both very much.

MARK ZANDI: Thank you.

RICK SHARGA: Thank you.

(Okay, Clown #1 and Clown #2… back to your padded cells, or wherever the attendant lets you play during the daytime. Orange soda and crackers at 11, so listen for the cuckoo clock… cuckoo, cuckoo, cuckoo.)

So, how is it that Gwen Ifill is interviewing these two potted plants on PBS and I’m donating to PBS during the pledge drive?

5. Today’s FHA Bulletin: MERS Has Impacted Foreclosures in Michigan.

According to Clifford J. Treese on BROKERDIRT’S Real Estate Brokers Discussion Group…

“On April 21, 2011, the Michigan Court of Appeals determined that MERS is not eligible to take advantage of the non-judicial statutory foreclosure process in Michigan because MERS does not own or have an interest in the indebtedness secured by the mortgage, nor is MERS the servicer agent of the mortgage, as required by the statute. Most of the major title insurance company underwriters have ceased issuing title insurance for any properties where MERS foreclosed by advertisement.”

But… according to April Charney…

Bill Hultman, representing MERS, just testified this week that there was NO PROBLEM at all with title insurance as a result of MERS’ involvement in foreclosures. And, this ignores the essential underlying problem that MERS cannot produce evidence of corporate authority delegated to Hultman to appoint the first signer, much less the 20,000 signers that Hultman testified about. (Hultman’s testimony is available online at: http://4closurefraud.org/2011/05/26/)

April also says we should take note that once again, Mr. Hultman promised evidence of the signers’ authority. He said he’d produce the “resolution” authorizing a single signer, but failed to offer to produce evidence of authority to issue that resolution or any other resolution “appointing” a MERS’ signer. In a previous deposition in another case, Hultman agreed to produce the documents showing that MERS gave him authority to issue the signer resolutions, but to-date, it would appear that he couldn’t produce he has failed to produce any such documentation.

April says she would think that if MERS had the docs, they’d be showing them all over town.

“Look, honey… isn’t the Emperor wearing a fine suit of clothes?”

(Don’t worry though because I think Congress may be making the Emperor an invisibility cloak yea as we speak. Isn’t that right, banker-people? And won’t we be surprised… is that what you’re thinking?)

Mandelman out.

Jun

Dylan Ratigan on “Fraudclosure” Still Seems to be “Lite” on Servicers

By Mandelman | Foreclosure Blog News, HAMP, Housing & Economic Research, Weidner

26673Leave a Comment2011-06-01+09%3A59%3A14Mandelman

On television, Dylan Ratigan seems to be the leading source of news on the foreclosure crisis and in reality, the Fraudclosure crisis in its entirety. In the video clip from Dylan’s show below, you can see what a couple of industry insiders have to say about the servicing industry. (Hat tip to The Daily Bail for bringing it to my attention.)

Now, I’m not saying that it’s bad… because it’s not… and I’m not saying that it’s in any way dishonest… because it isn’t. What I am saying is that it seems to me to be “lite” on the abominable servicer behavior that is nothing short of commonplace… the norm… the rule, as opposed to the exception.

And I can’t help but wonder why servicers aren’t being treated by the media as the abusive and despicable organizations that they unquestionably are. Not a week goes by that I don’t hear from homeowners who tell me about servicers who have berated them, lied to them, threatened them, and flat abused them for months upon months, only to find that they’re losing their home to a trustee sale about which they were never told. It happens so often that it’s practically something that is to be expected.

I’m not kidding about this… every morning I wake up, get my coffee, turn on some cable news show, look over at my wife and say: “Look at that, honey… BofA didn’t blow up again today! Will wonders never cease?” And then I eat my bagel.

On the day I can’t say that, are you going to act surprised? Not me. On that day, I think I’ll just sit down wherever I happen to be… and cry.

May

FLORIDA- #1 IN THE COUNTRY FOR OFFICIAL CORRUPTION!

By Matthew D. Weidner, Esq. | Foreclosure Blog News, Weidner

26610Leave a Comment2011-05-30+12%3A53%3A19Matthew+D.+Weidner%2C+Esq.

Hey these are tough times and we all need something to cheer for right? Well, there’s not much to cheer for in this country or in this state…in fact, things are worse than ever and getting worser. (yeah i know, bad grammar, but hey, it’s early)

As Americans were always looking for comparisons, to see where we stack up to everyone else. Now I know Florida is corrupt, hell, we all know. I mean, we’ve got a role model for corruption sitting in the governor’s mansion, and like the press has talked about ad nasueum, he’s running our state like a criminal enterprise, ignoring public records requests and keeping the press and the voters in the dark about just about everything. Who knows what dirty deals this guy is creating while flying around in his private jet like Lex Luther….but then, you elected him.

And then there’s the President of the Senate, Haridopolus, that world renowned author who wrote a best selling book on Good Government and got paid boatloads of cash….actually the book wasn’t nearly best selling, but he did get paid boatloads of cash. The next powerful cat in the state is Dean Cannon, Speaker of the House. He’s not a straight shooter either, but then….you elected him.

So the allegations of fraud and corruption run rampant in this state and it’s hard to keep them all straight, and we wonder….is Florida as bad as famously corrupt Illinois, New Jersey, Louisiana? How do we stack up? Well, it’s hard to know exactly, but I think Florida with all of it’s drunken, heat stroked voters makes a pretty good case for being the MOST CORRUPT STATE ON THE PLANET….

Why the Sarasota Tribune did a whole neato article on it and found…

More than 800 public officials were convicted in Florida on various charges between 1997 and 2007, making Florida the top state for government corruption, according to the grand jury.

It stretches from coast to coast and muddles everywhere in between…..

Sarasota Tribune