ORDER+HSBC+v+ANTONIO+DEFREITAS

I cannot count the number of times I’ve shown up for hearings only to have the foreclosure mill either cancel the hearing or just not show up.  Often times they fail to notice me at all, but I’ve addressed most of that by requiring that all hearings be set and confirmed with me in writing.  The thing about this Order is, if more judges would issue Orders like this, the whole practice of foreclosure would change overnight!

The most frustrating thing is the unfair treatment between the mills and those of us defending.  If I miss a Summary Judgment hearing, that judgment is granted with no question.  On the other hand, if my Motion to Dismiss is properly noticed and they don’t show up, the hearing is continued.  One more thing, I’m tired of the mills setting Summary Judgment hearings when the case is not ripe for SJ and I have objected based upon that…….oh well, add that to the list.

One more thing….this judge was tough and fair and detailed.  In the courtroom were dozens of defense attorneys as well.  We got the message loud and clear and I immediately went back to my office and pulled EVERY SINGLE ONE OF MY FILES TO MAKE SURE I WAS ON TOP OF MY CASELOAD AND PRACTICE.

One more thing….most local rules of practice require that attorneys confer with one another before setting any hearings to try to resolve the matters.  I try to demand this, but this doesn’t seem to work with the foreclosure mills.  Before we take the court’s time and money, I would require that every hearing notice state prominently:

ATTORNEYS FOR BOTH SIDES IN THIS SCHEDULED HEARING CONFERRED TO TRY AND RESOLVE THE MATTERS TO BE HEARD, BUT WERE UNABLE TO AFTER GOOD FAITH ATTEMPTS.

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He finally came to me just before the hearing and I was scrambling to put together my defense when local Foreclosure Fraud Fighter Mark Stopa sent me an email reminding me that these foreclosure mills cannot rely upon affidavits of attorneys fees to establish those fees, the expert testifying to those fees must be in court in person.  I attach the case law on both that issue and the other issues I was prepared to argue below:

Attorney’s Fees

Thankfully we didn’t even get that far in this hearing because in this circuit, the judges are very serious about devoting adequate time to argue summary judment when the issues are contested.  I hear these horror stories about Rocket Dockets elsewhere and it just blows my mind because I have only had one Summary Judgment hearing where I felt like I was not being given adequate time or my arguments not being seriously considered.  I reported that defeat, but I am most pleased to report that I had that reversed on rehearing.  The care taken by the judges in this circuit shows that highest level of judicial discretion that we should expect in every hearing, in every courtroom across the state.

Anyway, much thanks to Mark Stopa for sharing his good work.  Mark is a tenacious and very good attorney who is not at all willing to back down from a big fight...I encourage you to visit his website here.

Finally, let me again encourage each of you to visit Dan Gelber’s campaign page, and particularly look here at his issues section for detailed information about mortgage fraud and fights.

We can make a difference in this race, but every single one of you needs to sign up, sign on and make your voice heard in this campaign.  When you are frustrated, overwhelmed and feel helpless, channel that energy into something that might actually be useful, like volunteering for his campaign or at least sharing your concerns on his Facebook page here.

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For those of you, especially those in the press, that have been asking what a Rocket Docket is and what the problems with the Rocket Docket are, I want you to read the attached transcript which was just released from a “hearing” held in Palm Beach County.

The transcript lays out the problem- a huge foreclosure backlog that has clogged the docket.  Note the near panic in the judge’s voice and the comments about courtroom overcrowding and the fire marshal.  The judge acknowledges that most who are there, and especially the defense attorneys, seek to have the Summary Judgment denied.  The first case out of the box illustrates about a clear an example of when Summary Judgment should be granted, but then the court just goes ahead and grants Summary Judgment anyway.

This is all just a tremendous miscarriage of justice all in the name of expediency on behalf of failed lenders and their foreclosure mills….this should never, ever happen, but apparently it happens every day, all over the state and especially in Palm Beach County.

palmbeachoutrage

WHERE IN GOD’S NAME IS THE PRESS ON THESE ISSUES?

How about our federal and appellate courts and Attorney General examining not just the technical issues in each one of the cases, but examining the fundamental violations of substantive Constitutional rights because Rocket Dockets do not provide important Due Process protections?

See related press Story Here

Many thanks to 4closureFraud.com for posting this first.

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One of the key principles of our entire system of government is that it is open for full inspection at all times and that the rowdy mob that is the American people are not just able to participate in the government….they are absolutely required to participate in their government.  Most importantly, all courtrooms must be free, open and accessible to the people. This is so whether the court is hearing small claims cases, death penalty cases or even foreclosure cases.  The fact that judges now feel emboldened to ignore the Constitution so that they can rush along doing the important job of serving the banks and foreclosure mills (Yes, even the mills that are investigation by the Florida Attorney General) is a terrifying testament to a fundamental breakdown in our system of government.

This cannot be allowed to continue.  Read the excerpts below and understand that once major violations of Constitutional rights like the right to open access are permitted, judges will not just wake up of their own volition and honoring those rights again…..they will get comfortable in closed courtrooms and that’s the way it will stay…..

Monday Aug 23, 2010. Court room 4A Palm Beach County Courthouse. I was with a friend who had a hearing at 9am. We were greeted by the Floor Receptionist and told we had to wait for our team……Now they are calling them teams…….the Plaintiff and the Defendant……..my friend was Pro Se. We still had to wait for the Plaintiff to arrive……She was 20 minutes late………there was an armed guard outside the door of Court room 4A. As we approached to enter, with our team, I was asked if I was party to the hearing I said I was with my friend, the next best friend, and observing , the guard told me I could not go in. I asked why, she said because I was not a party to the case, I said I have never been refused entrance before, and the guard said I could not go in. I asked if she was denying the public the right to enter the courtroom and she told me I would have to wait outside…….that there was not enough room…….I waited outside for 10-15 minutes made a couple of phone calls and then she said I could go in…….There were plenty of seats when I went in…….So I was rather concerned that I was denied access to our public court rooms. But you feel helpless up against them….I felt like my rights were being violated……

“On 8/30, I had a Summary Judgment Foreclosure hearing on Palm Beach County’s “Rocket Docket”. The judge spoke for 14 minutes to the crowd, of mostly pro se defendants, about how they should just agree to the summary judgment and the plaintiffs, (whose attorneys (Shapiro & Fishman had a dedicated courtroom and to whom he referred to as “my attorneys”) would be gracious (Ha!) enough to allow them to stay in their homes for 120 days if needed (even though the statute says he only has to give them 30). When it came to hearing arguments which were fully briefed and provided to the court (pursuant to the instructions of the Divisions head judge) he only allowed 30-60 seconds for argument, failed to read any of the papers, failed to review the plaintiff’s foreclosure package,flatly ignored the Affidavit filed in Opposition, ignored my plea for a trial, signed the judgment and dismissed me. I never was permitted to even read the proposed judgment or to examine the “newly discovered” allonge which Shapiro’s counsel said I had no right to see. Thank God I had a court reporter!”

I want to know why attorneys who practice in these courtrooms are allowing this to occur.  I want to know why the press (national and regional) are not covering this issue.  Shame on both groups for allowing this unprecedented attack on our fundamental rights to continue.  Why are defense attorneys allowing this to occur?  Why are you not taking these pro se and observers by your side and demanding that they be permitted into THE COURTROOMS THAT THEY PAID FOR, THAT THEY OWN, THAT OUR FOREFATHERS SHED BLOOD TO KEEP OPEN? That Sheriff only has a gun and that judge has no authority when he seeks to exercise it in a manner so repugnant to the Constitution.

WHY ARE ATTORNEYS AND PRESS NOT STANDING UP TO FIGHT THIS TYRANNY?

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Please read the document carefully that is attached below:

Fannie Mae Mediation

While the terms contained within the document seem innocuous enough, please understand exactly what this is all about.  The mediation order issued by the Supreme Court required that all homeowners be given the opportunity to have their case heard by an impartial mediator in a court-supervised program.  The Order included an important loophole to that requirement and that is if the borrower already participated in a mediation that fulfilled most of the terms of court supervised mediation, then the lender could deny the homeowner the right to participate in court-supervised mediation.

The real problem here is that the guidelines published above, put all the control over the mediation process in the hands of the lender….a classic case of the fox guarding the hen house.  It’s absurd to think that the very foreclosure mills that are under investigation by the attorney general and who are engaging in fraud and abuses in courtrooms all across the state (conduct that is theoretically at least) supervised by judges could be trusted to engage any sort of fair play in a process that is not supervised by anyone.

Fannie Mae Announcement SVC-2010-13, Mandatory Pre-Filing Mediation is nothing more than a front end assault against homeowners and exploits a loophole in the Florida Supreme Court’s Foreclosure Mediation Order

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The motions posted below could be an important tool to help our judges fulfill the ill-advised mandate of the Supreme Court to CLEAR THAT FORECLOSURE DOCKET!

The problem with many of our judges is they think the only way to fulfill that objective is to grant summary judgment.  The problem with this singular focus on Summary Judgment is it has created the environment where fraud, mistakes and unchallenged abuses are occurring in courtrooms across the state.  Now that these abuses are being investigated, the key perpetrators of the abuses are looking to shift the blame and guess who they are blaming for the abuses they’ve heaped upon our courts….THE JUDGES ARE RESPONSIBLE FOR THE ABUSES!

That’s right, a key part of the defense presented by Roy Diaz in Monday’s contempt hearing in Manatee was, “Your honor I’ve got a volume practice and my fee structure won’t allow me to be sure fundamental rights aren’t violated.”  As part of his defense of his practice, please review the following quote from David J. Stern’s attorney:

“Everything done is done by the judge who is there to protect the rights of the borrower and lender,” he (Jeffrey Tew) said. “David Stern didn’t create that problem; he is representing banks who are entitled to foreclose. Since he is the visible person, he will get a lot of bad publicity. There’s been a huge train wreck and David is like the surgeon in the ER: He is part of the process.”

CHARNESKI – Doc-1

CHARNESKI – MTD for Unverified Supplement

very important

That was a trick, but please visit that page.  The next motion and memo is very significant because it potentially impacts thousands, perhaps tens of thousands of foreclosure cases that are clogging our dockets and which courts may be moving forward on their own initiative or when one of the foreclosure mills tries to push it forward.  A key point to take from this appeal that has not yet been filed is that when a court enters a Final Order dismissing a case, the court loses jurisdiction to take any further action on that case and any judgment entered thereafter is VOID. Have a look at the case law contained in this Memo and see how it can be applied to other Orders of Dismissal that have been entered in your case.  Be prepared in your cases to make sure a judge understands that when he enters a judgment on a stale or dismissed case, he risks entering a VOID judgment and causing title problems for decades to come….

CHISHOLM – Appeal

And yet another motion that should be filed and considered.  The problem with this one, and other time-mandated dismissals is the courts seem far too reluctant to grant them.  The fact is there are thousands of these notices pending out there across the state and rather than probing the firm about why they have not moved the case, the court seems obliged to keep the cases open.  I want our courts to understand that the net affect of tens of thousands of stalled, no activity cases is the major source of backlog on their dockets.  The filing fee paid in 2008 should not be permitted to keep a case open in perpetuity because the costs associated with those cases are used by the courts in that first year.  The message should be clear…when you file a case, be prepared to proceed with it or it will be dismissed.  Here’s the motion:

Motion to Dismiss For Lack of Prosecution(2)

And here one of my personal favorites

dismissalfinal

And now the most important thing:

Most Important

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Okay, who wants to feel stupid, weak, and helpless?  (Oh, I do… I do!  Pick me!  Pick me!)

Well, good boys and girls, because you will in just a minute.

Let’s start here: The federal government requires banks participating in HAMP not to foreclose on homeowners while they’re being considered for a loan modification.

Now, why that would even need to be a rule is beyond me.  What’s next?  How about this one: A new law prohibits car mechanics from selling someone’s car while they’re repairing it.  Whatever.

Banks, however, could give a rat’s petute about what the federal government wants them to do because the rule is voluntary and has no enforcement mechanism.  A voluntary rule with no enforcement mechanism?  Wow.  I don’t think I can remember seeing one of those before.  Actually, it makes total sense that there’d be no enforcement mechanism… since it’s a voluntary rule.  See, I’m starting to think like them.
Well, apparently banks aren’t much for volunteering, so they foreclose on homeowners while they’re being considered for a loan modification all the time.  Hell, half the time they sell someone’s house while considering them for a loan modification, so comparatively just foreclosing should seem like a day at the beach.  It’s one of those basically unsolvable problems servicers are having an impossible time fixing: selling homes while under consideration for a loan modification.  It’s like losing file folders full of paperwork over and over again.  Oh, dear me.  What to do, what to do?

And that seems like… if your car dealership blew up your car while they were repairing it… and then claimed it was a mistake.  Oh, my.  Did we do that again?  Sir, I’m so sorry… I had no idea… Larry… damn it… it was a break job.  You threw your cigarette into the gas tank again, didn’t you?  Look, we’ve talked about this before… Sir, I’m sorry, it looks like you’ll have to buy a new one.

So, California Senator Mark Leno came up with SB 1275, a bill that would have required lenders to provide homeowners with a fully considered loan modification decision prior to foreclosing.  And guess what else… it also would have given homeowners the right to sue their lenders if the bill’s process wasn’t followed.

It was looking good for a while. The California Senate and three Assembly committees approved SB 1275.  Yeah, baby.  It’s all downhill from here, right?  Well sort of…

I wrote an article about the bill some months ago and said, among other things, the following:

So, mail the notice of rights… so homeowners know their rights.  Seems like that would be a good thing.  Mail the homeowner an application for some alternative to foreclosure, such as a loan modification.  Yes, that doesn’t sound like it could hurt anything.  Actually check to see if the homeowner qualifies for a loan modification or some alternative to foreclosure.  How can that be a bad thing?  And when a homeowner is denied a loan modification, mail out a letter telling that homeowner why they were denied.  Seems like the only decent thing to do, doesn’t it?

The Center for Responsible Lending issued the following statement:

“The confusion and errors that cost Californians their homes, are devastating to the state’s housing market, but are avoidable and we need this measure to stop further deterioration of the California housing market.”

And in New York this year, the legislature approved a new law that gives the state attorney general permission to sue lenders for repeatedly failing to consider loan modifications in a timely manner and for foreclosing during the modification process.

So we can do this, right?  After all, we’re practically ground zero for the foreclosure crisis, right?  Please tell me I’m right… someone… anyone?

No, I’m wrong.  Even though the bill was supported by EVERYONE but the banking lobby, it was rejected 36-30 in the Assembly.  Even after it was approved by the state Senate and three Assembly committees.  This time… no… but thank you for playing.

All of the Republicans voted against it, but that’s no surprise… they’re supposed to be in Wall Street’s pocket.  All Assembly members who voted yes were Democrats, the other white meat… and NINE DEMOCRATS, all of whom were obviously threatened… I mean lobbied… by bankers, also voted no.  Nice job, you spineless, worthless, glad-handing, sycophants.  Way to throw your constituents under the bus.

Senator Mark Leno, D-San Francisco, told the San Francisco Examiner that he would continue to pursue a solution to the state’s mortgage crisis in the new legislative session, which will begin in January.

“We think we had a very wise compromise (in the bill), unless your philosophy is that the lenders should not be held accountable and not have repercussions for their actions,” Leno said.

Well, now that you mention it that does have a certain ring to it.  Not held accountable and no repercussions… where have I heard that before?  Hmmm… I swear I was just reading something that sounded a lot like that… what was it?

Oh yeah… I remember… voluntary and no enforcement mechanism!  That’s it!  No accountability and no repercussions.  I’m starting to feel a song coming on…

Seems to me I’ve heard that song before… Click it, and sing along…

Click here to read the complete story at Mandelman Matters.

Come on people…please do not disappoint me.

Please take a moment to reach out and make a difference.

I made a personal appeal in the blog post below and that personal appeal was responded to by only TWO PEOPLE.

READ THE POST BELOW AND TAKE THE ACTION REQUESTED.

I am collecting good information to post that all of you will benefit from, but first…read the post below and

PLEASE TAKE THE REQUESTED ACTION!

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This site averages several thousand unique hits every single day.  I constantly review the site stats and the geographic reach of those who are following the page in order to monitor the reach and impact.

My sole purpose in creating this blog is to spread the word, assist consumers and protect our courts from the unprecedented attacks that the foreclosure crisis represents.  I appreciate all of the positive feedback I receive from each of you and know that the pleadings, Orders and other detailed and technical information has proven very valuable to each of you.  Now I want each one of you to give something back.

I IMPLORE EACH AND EVERY ONE OF THE THOUSANDS OF YOU TO VISIT DAN GELBER’S CAMPAIGN FOR ATTORNEY GENERAL PAGE BY CLICKING THE LINK BELOW

Dan Gelber for Attorney General

Please spend time on his page and pay particular attention to the “Issues” tab.  You will note that Gelber already indicates issues relating to mortgages are some of his key concerns.  Please also note Gelber’s strong focus on rooting out public corruption.  I believe we have a real opportunity to make an impact in this election, so I want each and every one of you to log onto his site and register as a supporter.  Also, go onto Facebook and become a supporter there.

PLEASE DO THIS TODAY, RIGHT NOW, IMMEDIATELY

Gelber’s Facebook fan page lists only 1,539 members.  If only a small portion of those of you that follow this blog will log on and become a fan of his campaign, this number can increase dramatically.  I want each of you to log onto his page and send his campaign a message about foreclosure fraud and abuse.  Share your stories on his wall.  Ask that he continue to make this a high priority in his campaign.  Ask that he take a keen interest in the failures that are occurring in our circuit courtrooms.  Ask him why these Fat Cat Wall Street bankers are being allowed to run roughshod over our state.

I’m going to monitor Dan Gelber’s Facebook page carefully.  I would consider it a personal favor if each of you would respond to this request and make a post on his wall.

LOG ONTO DAN GELBER’S FACEBOOK PAGE BY CLICKING HERE

OR SEARCH FACEBOOK UNDER “DAN GELBER FOR ATTORNEY GENERAL”

If the pleadings and information shared on this page have provided any assistance with your case and for you attorneys out there, if the information has been valuable to you, please click on and importantly

DONATE TO THE CAMPAIGN!

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More than anything, it’s good to see a judge finally taking notice of the abusive conduct of these foreclosure mills…the abuse effects us all, judges, attorneys, staff…but most importantly taxpayers as a whole.  This lack of respect for the courts is causing a great rot in our court system and it’s costing taxpayers hundreds of thousands of dollars.  The foreclosure mills have abused our courts, our judges and their staff for so long and so dramatically….the most amazing thing is that judges have put up with it for so long.

Judge Dunnigan’s order and the transcript detailed all the conduct that she was fed up with…scheduling hearings then canceling or not showing up, failing to show respect and consideration for other attorneys and defendants, wasting the court’s time and resources.  The Order and the transcript will detail all the abuses.

I felt some sympathy for Roy Diaz as he stood up to take his public flogging, but this newspaper article reminds me that the tone of his testimony was all about excuses and that he failed to recognize the costs his firm had visited upon the court and all the associated players.  Then, one of his young attorneys got snippy afterward, excusing the conduct away with an arrogant, “We have 20,0000 cases” dismissal.  I particularly wanted to have sympathy for the young attorneys whose careers will forever be slighted by the very serious penalty of a finding of contempt.  The fact of the matter is the elder attorneys are walking these young attorneys into trouble and Diaz’ only explaination was that he had to run a volume practice in order to be successful.  The judge left open the possibility of holding the attorneys liable for criminal contempt…this may not be the end of this case.

It really isn’t fair to pick out just Smith Hiatt & Diaz for this kind of public sanction…the reality is every single firm should be subject to similar hearings in every circuit.  Our courts have spent hundreds of thousands of dollars of our taxpayer dollars due to the improper conduct of all the mills.  It’s high time taxpayers demanded that our judges seek to recoup some of these funds by taking the kind of judicial action that this judge has  If every judge took similar action just once, the foreclosure courts would unclog, their attorneys would be far more responsive and some sanity might begin to prevail in the foreclosure courtroom.

The Full Article Can Be Found Here.

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SMITHHYATTCONTEMPT

Later, I will post the judge’s actual order and a transcript of the proceedings.  Importantly, the judge in this case has acknowledged what a tremendous drain on taxpayer resources the current foreclosure mill operations represent.  She reserved jurisdiction on this case to pursue in direct criminal contempt charges and held open an Order imposing fines of $7,000 per day against the firm for failing to take immediate corrective action.

Perhaps the most important point to take from all of this is that judges are not obliged to simply enter Summary Judgment in every case.  There are additional options.  Our judges and our courts have powers and steps they can take to insure cases either proceed or are dismissed by the court.

I’m going back to reviewing my files….much more on this later!

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Pay particular attention to the findings of fact contained within the police report and the facts the Sheriff’s office uncovers during their investigation.  What is most troubling about this phenomena is the fact that the Charlotte County Sheriff’s Office has declined to do anything about this case.  What is even more troubling than that is the fact that my calls to the Sheriff’s Office have gone completely ignored.  I’ve made my way up the chain of command but have received no action on this issue at all.

In addition to being a serious breach of our fundamental rights, someone is going to get seriously hurt or killed here and no one in power seems concerned enough to do anything about this.

complaintfiledtotal

This police report is truly very, very disturbing because it details how the lenders broke in and changed the locks on three different properties….

READ THE REPORT CAREFULLY, BECAUSE IT NOTES THAT THE BREAK IN OCCURRED BEFORE A FORECLOSURE WAS EVEN FILED!

policereport

INCIDENT NUMBER THREE- TERRORIZED IN HER OWN HOME AND EXAMPLE OF LENDER/SERVICER INSURANCE FRAUD?

The reports below are also very disturbing because again, we get law enforcement making findings of fact but declining to do anything at all about the obvious abuses that are being committed by these lenders on this homeowner.  This homeowner is terrified of returning to her own home, afraid that these thugs will have rooted through her home again.

Look at the pictures in the report….just think of how violated you would feel if someone came into your home and took pictures at will, throwing your possessions about about and stealing whatever they thought they wanted.

Most disturbing, what if law enforcement denied your requests to do anything about it and told you they would do nothing to protect you?

policereport

police report 2nd_00001

diciente

The fact that lenders are breaking down doors and changing locks and law enforcement is not even doing anything really is very, very disturbing.  I can only hope that our press will begin to pick up on this as an issue.

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I talk to a lot of homeowners from all over the country every single day, and it’s been like that for almost two years now.  Each day, I’ve try to do whatever I can to help those struggling to hold on both financially and emotionally.  They reach out to me looking for answers, and I don’t know what else I could do but help in whatever way I can.

I hear a lot of anger, a lot of fear, and a lot of resignation at America lost.  I write about injustice, rant about intolerance, and fight to stop ignorance.  I try to speak out for people that can’t find their voice at the moment.  A friend called me the other day.  When I answered he said, “Still trying to save the world one homeowner at a time?”  We both laughed.

Yes, I suppose I am, I thought to myself.  It’s what I can do… write and try to help where I can.  I started by writing a few articles in the fall of 2007, and I took my act online in December of 2008 when I started blogging on MSNBC’s Newsvine.  In April of 2009, Mandelman Matters was born and since then I’ve worked seven days a week, and so many hours a day that I’d rather not say.  I’ve written 350 in-depth articles on the political, social, economic and legal aspects of the financial and foreclosure crisis since then.

I figure I’ve probably written at least as many articles as anyone in the country on the foreclosure crisis, HAMP, and loan modifications… and it’s quite possible that I’ve written more than anyone else on those subjects.  I don’t sell advertising or make money on my blog, for the last couple of years its been enough that several thousand homeowners have written to me, saying that I’ve made a significant positive difference.

But, it’s not enough anymore.  And I want those that read my column to know why.

It all started this past August 16^th and 18^th, when the Treasury Department invited some bloggers to come hear what Tim Geithner and other nameless Treasury officials had to say on a range of topics, including the foreclosure crisis and the Home Affordable Modification Program, HAMP.  The first article I wrote about HAMP was on the night of President Obama’s speech introducing his Making Home Affordable plan to save the housing market, which at the time was already in a free fall.  My headline read: “I’m sorry Mr. President.  That’s just not enough.”

I knew right away that HAMP wasn’t going to work as advertised.  There were a lot of reasons why, but the simple truth is I only needed to hear one phrase to know the program would fail: responsible homeowners.

You see, there’s no such thing as irresponsible homeowners and responsible homeowners.  It wasn’t irresponsible sub-prime borrowers that caused this crisis; it was irresponsible Wall Street bankers that did it.  That’s not to say that there weren’t some number of people who bought a home they couldn’t afford, it’s just to say that those people, a tiny fraction of the whole, didn’t have anything to do with the crisis we seem unable to address, let alone solve.

Yet, just about every single week, I end up having to listen to someone tell me about some 24 year-old with a paper route, who bought a $12 million home on the water with a stated income loan.  I’m sure there are a few of those, but they don’t have anything to do with the crisis.

No, borrowers didn’t cause the crisis that the entire world is struggling through today, bankers did that… Wall Street’s bankers to be specific, but lots of other flavors of banker had a hand in it as well.

Millions of people have lost their homes already, and we’ve only just begun to feel the pain that’s sure to come if we stay on our current course.  Why some people don’t see that is beyond me.  But one thing I know for sure, is that the crisis is being allowed to continue because homeowners have no voice in Washington D.C.

Bankers, on the other hand have thousands of lobbyists and hundreds of millions of dollars in campaign cash to hand out.  So, last year, according to Special Inspector General of TARP, Neil Barofsky’s report, we gave the banks $3.7 TRILLION, while spending something way, way under one percent of that amount on stopping the foreclosure crisis.

The people have no voice because they are ashamed.  They think it’s their fault that they are in a difficult financial position today, and when someone is at risk of losing their home to foreclosure, they tell no one.  Should they hire an attorney and somehow save their home from foreclosure, neither they, nor their lawyer tells anyone.  The banks certainly don’t tell anyone anything. And the crisis goes on, worsening every day.  And the media just keeps writing stories about how economists were surprised at how bad things have become.  But, I can’t help but wonder… are they really surprised?  Or did they know all along how bad things would get?

I also can’t help but wonder why everyone’s so quiet about a crisis that’s far worse than any in my lifetime.  In California, for example, when gay marriage didn’t receive enough votes in the last election, there were people marching in the streets.  But millions lose homes to foreclosure, and not a peep.  Banks pay out hundreds of billions in bonuses after being rescued from insolvency by the U.S. taxpayer, and the most you hear is, something akin to “I don’t think I like that” coming from a distant source.

I was able to get through all of this until last week when I learned of what was said at the meetings between various bloggers and Treasury Department officials.  My friend, Richard Zombeck of Huffington Post and shamethebanks.org told me about the meetings and sent me a link so I could see for myself what went on.  Then others sent me links to what others had written about what was said during the meetings.  And that was it for me… I stopped writing… for about a week, and maybe a little longer.  What was the point, was all I could say to myself.

It made me sad to know what Treasury Department officials had said about the foreclosure crisis and HAMP… very, very sad.  In fact, I can’t think of another time in history when my government acted as these guys have acted, or are continuing to act today.  They truly do not care about people at all.  They are so shockingly devoid of compassion or empathy that they offend me so deeply that I don’t like thinking of this government as representing my country or I can’t help but feel that my country is lost.

Treasury Department officials said, in no uncertain terms that they knew HAMP wouldn’t save homeowners from foreclosure.  Here’s what was written in Huffington Post’s Shahien Nasiripour’s detailed article on the meeting

The administration knew they’d only reach a fraction of those needing help, the official claimed, and that millions of homeowners would ultimately lose their homes to foreclosures that the administration chose not to prevent. Taxpayer money was on the line, and the administration couldn’t justify spending the amount of money it thought would be necessary to save those homes, the official said.

Nevertheless, HAMP remains the best option — even though it’s reaching fewer borrowers than forecast. Other programs, the official noted, would have been either too expensive or unfair. Homeowners who consciously bought more homes than they could afford shouldn’t be bailed out.

Here’s what Steve Waldman of Interfluidity.com had to say about the meetings:

Officials pointed out that what may have been an agonizing process for individuals was a useful palliative for the system as a whole. Even if most HAMP applicants ultimately default, the program prevented an outbreak of foreclosures exactly when the system could have handled it least.

There were murmurs among the bloggers of “extend and pretend”, but I don’t think that’s quite right. This was extend-and-don’t-even-bother-to-pretend. The program was successful in the sense that it kept the patient alive until it had begun to heal.  And the patient of this metaphor was not a struggling homeowner, but the financial system, a.k.a. the banks.

Policymakers openly judged HAMP to be a qualified success because it helped banks muddle through what might have been a fatal shock. I believe these policymakers conflate, in full sincerity, incumbent financial institutions with “the system”, “the economy”, and “ordinary Americans”.

Treasury officials are not cruel people. I’m sure they would have preferred if the program had worked out better for homeowners as well.  But they have larger concerns, and from their perspective, HAMP has helped to address those.

This led to blogger Atrios of Eschatonblog.com to write the following:

Conning homeowners by announcing a government program designed to help them when in fact it was designed to help the banksters is, in my world, “cruel.”

Felix Salmon, blogging on Reuters, said the following:

HAMP is now coming into focus as a serious failure and cruel one at that.  The problem is that it’s not helping people stay in homes, but merely delays foreclosures. This helped banks weather a foreclosure crush, but raised false hopes among a substantial number of applicants, hundreds of thousands of whom were disqualified, as Felix points out, even though they made their payments on time.

HAMP might well have been a success in the ways that Treasury enumerates — helping out banks on the solvency front, reducing the rate of foreclosures, that sort of thing. It was almost certainly a good idea politically, as well: you don’t hear much about the plight of homeowners being foreclosed upon, these days, certainly compared to the huge amount of noise on the subject around the time that Obama was elected president. The government is perceived to have Done Something, and the circus has moved on.

But it’s still a tragedy that hundreds of thousands of people who signed up for loan modifications — and who made all of their modified loan payments in full and on time — have had their modifications cancelled. Many of those people blame the servicers; Treasury, meanwhile, is more prone to blaming the borrowers themselves, claiming they’re incapable of verifying their income.

My feeling is that even if income hasn’t been verified, servicers shouldn’t simply cancel the loan mods if they’re performing well. And that if that’s what the servicers are doing, the incentives within HAMP have been designed very badly. That’s a Treasury failure, and it’s impossible to credibly spin it as any kind of success.

And, incredibly, they are sticking by HAMP.  Only now Treasury is saying that the benefit is found in spacing out foreclosures, as opposed to stopping unnecessary foreclosures.  Tens of billions to spread out foreclosures in order to help banks take losses… on the backs of ordinary people… American citizens… taxpayers.  Because I suppose the $3.7 TRILLION we gave the banks in 2009 alone wasn’t enough.

Here’s Huffington Post Nasipour once again:

The official touted the ever-growing pipeline of homes likely to enter foreclosure as a success in the administration’s fight to stem the rising tide of home foreclosures. It’s taking longer for homes to enter foreclosure, and it’s taking longer to evict homeowners once they enter foreclosure.

The so-called “shadow inventory” of homes — those with severely delinquent mortgages, in foreclosure or already repossessed that have not yet been put on the market — has significantly grown since the administration took office and is estimated to range from 5 to 7 million homes.  Through June, borrowers in foreclosure have been delinquent for an average of 461 days before being evicted from their homes, according to Jacksonville, Fla.-based data provider Lender Processing Services.

That’s a good thing, the official said, because it gives the market time to absorb these homes gradually — without leading to a dramatic drop in home prices.

Richard Zombeck, writing for Huffington Post and shamethebanks.org, among many other things said the following:  (And I strongly suggest you read Richard’s entire article, click his name and it will take you to it.)

When President Obama delivered his speech in Arizona in February, 2009, nowhere in the speech did he come close to implying that this plan was intended to help the banks and servicers get more money out of homeowners before taking their homes. What he said was, “This will enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure.” It wasn’t followed by, “…for a couple of months.”

Richard also included this paragraph, also from Nasipour’s article, describing it as “one of the more egregious statements to come out of this discussion”.

One of the reasons why HAMP has been effective ties back to the foreclosure pipeline. The official said that because some 1.2 million homeowners entered the program and immediately benefited from a trial period of lower monthly payments, not only were their foreclosures delayed but they also received what was essentially a tax cut of more than $500 a month — all without cost to the taxpayer, the official boasted. Even though nearly half of those borrowers have been booted from the program, they still benefited from lower monthly payments courtesy of the Treasury Department with the cost borne by lenders and investors of those mortgages. Plus, at the very least, those homeowners got a chance at a permanent modification, the official said.

And finally, Dean Starkman wrote:

“So, a debate over a complicated matter is sharpened, for me, anyway.  Not to overstate anything: the world didn’t change because of the meetings.  There’s no evidence the bloggers—via the meeting or their blogs—had any influence whatever, for instance, on HAMP policy.”

Oh, well good then.

So, before I say anything about all of that, there are a few facts I pulled from various sources that I want to lay before you.

1. President Obama appointed Timothy Geithner to be Treasury Secretary. As president of the Federal Reserve Bank of New York, Geithner served under a board of directors headed by JP Morgan Chase CEO Jamie Dimon.  Geithner had been partly responsible for the decision to let Lehman Brothers go under, for the tarp program, and for American International Group (AIG) paying its creditors with taxpayer money.  As his chief of staff, Geithner chose a former lobbyist for Goldman Sachs.

2. President Obama: “The recession was caused by a perfect storm of irresponsibility and poor decision-making that stretched from Wall Street to Washington to Main Street.”

3. On February 10, 2010 Obama said that he didn’t “begrudge” the $17 million bonus awarded to Dimon and the $9 million to Goldman Sachs CEO Lloyd Blankfein. “I know both guys. They are very savvy businessmen.”

4. A group within the White House that began calling themselves the “pitchfork gang,” said their attempts to persuade Obama take a tougher stance on Wall Street were undermined by Geithner and by National Economic Council head Larry Summers.  Geithner and Summers were apparently worried about upsetting business confidence.

5. In the stimulus’s first year, the administration spent only $17 billion of the $139 billion allocated for infrastructure spending.

6. Geithner and Summers repeatedly blocked attempts to get tough on Wall Street on the grounds that doing so would threaten the recovery itself by upsetting the bankers.

7. Organizing for America, the administration’s campaign organization, which is supposed to be focusing on the 2010 elections, recently devoted its resources to organizing parties across the country to celebrate Obama’s forty-ninth birthday.

Sorry, but I’m about done with the Oblabla Administration.  Waiter, check please.

Look, I’m not making a political statement.  I don’t see the Republicans doing anything to help the situation either.  I fact, to the contrary, the Republicans have offered nothing constructive since Obama took office in 2009.  They vote as a block as if they were elected to represent a party as opposed to individual constituents, and personally, I think if they’re going to vote like that, I think they should have to wear matching sweaters and sing their chorus of “Nooooooo” in harmony.

Just on one day I’d like to see Obama come out in favor of cream in coffee, just so I could watch some knucklehead Republican oppose it on Face the Nation.  “No, I say there should not be cream in coffee.”  Oh, sit back down you intellectual midget.

None of that excuses what the Obama Administration has allowed to happen as related to the foreclosure crisis.  Treasury officials now say they knew and it was okay with them.  In fact, it was a good thing.

Officials pointed out that what may have been an agonizing process for individuals was a useful palliative for the system as a whole.

No, I’m sorry but no, damn it.  I don’t even know what a palliative is, but it doesn’t matter.  Geithner, you elitist piece of garbage, you do not get to torture American citizens because you find benefit for the banks in doing so.  Who the hell do you think you are?  Did my president know about this?  Because you imply that he did, and if that’s the case then he should be impeached.  No American president would ever condone what you are describing and if this one did, he is not fit to lead our country.

Mr. Geithner… people have taken their own lives over what you’ve allowed to happen.  Children have gone to bed night after night scared to death, not knowing why their parents are so afraid… or so angry.  Marriages have ended.  Fathers have sat up at night wondering if their life insurance policies will pay off after suicide.  And all of this and more continues to this day and yet there is no plan to change a thing.  Because you’re happy that Wells Fargo is suffering too terribly much.

And why?  Because Citibank or Bank of America would have gone under if the foreclosures would have come at a faster pace?  Bullshit.  You think that it’s because of HAMP that it’s taking banks a long time to foreclose?  You’re a moron, Tim.

If banks were going to go under by foreclosing too quickly they would have slowed the pace themselves.  We didn’t need you to invent a fake loan modification program and lie to the American people about it in order to slow down the pace of foreclosures.  Besides they could have MODIFIED THE LOANS, Timmy.  There was always that alternative, lest you forget.

Before you showed up with HAMP banks were modifying loans much more frequently.  Is that what you wanted to do, STOP MODIFICATIONS?  So you invented a program that would do just that by promising to modify 3-4 million loans?  Did Obama know of your plan?  Did the President of the United States know that this outcome would be considered a success?  Is that what your cohorts at Treasury are saying… off the record, of course.  Cowards.

Mr. Geithner, you should be incarcerated for the rape of the American people.  You know what caused this crisis and you know damn well that it wasn’t some guy in Stockton, California not making a mortgage payment.  How do you sleep?  Do you even know what you’ve done to thousands of people’s lives so the banks wouldn’t have to foreclose too quickly?  If that made sense to you, you need help.

To my readers…

That’s it.  I can’t do it the same way I have been for the last two years.  The rules of the game have changed.  I suppose I could give up and walk away, but I won’t do that now no matter what.  This is a whole new ball game and we need to be much more aggressive, much louder, much more intolerant of the abuse by financial institutions.  We need the consumer attorneys to file more lawsuits, and we homeowners have to save our money to pay for them to do so.  We can’t sit back and watch 14 million more homeowners lose their homes to foreclosure, because if that’s the way it goes, then our country truly will be lost for decades… perhaps forever.

Do you feel what it’s like out there?  Not where Tim Geithner lives, but where you and I live.  Imagine what it will feel like a year from now, when it’s that much worse.  And then two years from now when it’s worse still.  And then worse still.  What will we all say then?  What will we tell our children about the country we have left for them?

Gee, it really was our fault.  We all took an irresponsibility pill in 2005 and went out and bought homes we couldn’t afford and that’s why your world looks like this?  Sorry about that?.

We gave the banks $3.7 TRILLION last year alone.  That’s $3.7 TRILLION.  And Goldman Sachs alone handed out $120 BILLION in bonuses last year?  We bailed out GMAC three times to the tune of almost $20 billion?  GMAC?  Why, were they too big to fail, too?  GM itself went bankrupt, that was okay… but GMAC was too big to fail?  Really?  Really?

Is someone going to make an argument as to why it made sense to hand $3.7 TRILLION to bankers who ran their banks into the ground while doing essentially NOTHING for millions of homeowners whose foreclosures only caused their neighbors to sink further underwater.

We need to do things differently.

I know that some people need to get their loans modified, so for those that do, use the REST Report and push like hell.  I see loans get modified every single day.  And there are a lot of dedicated people out there helping homeowners every day.  Oh, I know…  guess who wants you to believe they’re all scammers… that you don’t need a lawyer… that you should just call your bank directly.  Others may want to strategically default, and for those folks, let’s see just how long we can keep people in homes without paying for them.  And if you can afford to file a legitimate lawsuit, for God’s sake file it.  And I’ll help anyone who asks me to in any way I can.  I’ll organize more attorneys so they’re better prepared to represent homeowners.  I’ll help educate more people so they know that it’s not their fault, so that they can find their voice once again.

But this is going to take more than passion.  It’s going to take money…

From the very beginning of my journey into this crisis, I’ve wanted to produce documentary style programming… broadcast quality video… footage of homeowners telling their stories, sharing the horror of their experiences dealing with banks that don’t care about anything this country has given them.  Interviews with real people that didn’t do anything wrong or irresponsible in order to find themselves at risk of losing their homes.  And I’ve collected such interview footage over the last two years… and it’s powerful… like, kick you in the gut type powerful.

I wanted to produce such a documentary and have it delivered to every member of congress and every member of the senate… every state governor’s desk and every major media outlet… I wanted to see it on television and on YouTube… I wanted it delivered to the White House… and all on the same day.  I called the initiative, A Hundred Thousand Homeowners, and the idea was to get 100,000 people to each kick in a dollar.  After PayPal, it would produce a budget of $67,000, and with that money we’d get our message heard.

But it’s taking far too long.  The problem is that it doesn’t spread.  Someone sends in their dollar, but that’s where it stops.  They don’t tell anyone else, because they don’t want anyone else to know of their situation.

Two weeks ago, I was interviewing a homeowner who had struggled for 14 months to get his loan modified.  He finally did in a few short weeks after sending in a REST Report, so I wanted to hear his story.  I interviewed him on camera for 20 minutes and it was emotional.  He had a tear in his eye through most of the interview.  It was hell for him, and everyone there could feel his pain.  At the end I asked him if he had anyone to talk to through the experience and he explained that he didn’t.  Not the sort of thing you talk about, he explained.

Then I asked him if his wife had anyone to talk to through the nightmarish process of getting his loan modified, and he looked down at the floor and then back at me.  He said: “I never told her.”

Through 14 months of being put through hell by his bank, through 13 SCHEDULED SALE DATES THAT WERE EACH POSTPONED AT THE LAST MINUTE… and he never told his wife until it was over and his got his modification.  And that said everything to me.

So, here’s the deal.  We need to do more.  And I will do more.  It’s all a question of how fast we can move.  Last week I was invited to Washington D.C. to speak at a rally, and I said I probably couldn’t make it because I wouldn’t be able to afford it.  I’m sure it will go just fine without me, there are lots of others who can deliver the message, but the thing is… I really don’t believe that.  I think I’m uniquely positioned and prepared to deliver the message for homeowners.  I think I  would make a difference if I could be there.

I also know that I could produce documentary programming that would change minds… shatter paradigms… and force politicians to take action.  I’ve been successful in print.  I’ve written 350 articles on this topic… and readers say they’ve made a difference.  This is still our country.  It’s still a democracy.  Let’s not fail our children because we failed to act.

I’ll be putting a new tab on Mandelman Matters in the next few days.  It will be labeled “MY MISSION” and it will describe in greater detail what I want to do… what I will do… and it will ask for your support.  And if it comes, then we’ll move quickly, and if it doesn’t, it will take longer.  But I’m going to do it one way or the other.  Because I know now that I have no choice.  Treasury’s officials have made that much all too clear.

I’ve spoken with others around the country and they will come along… but we have to start somewhere.  We have to show that we can make our voices heard.

If you’re a business owner, consider supporting the effort by sending in a substantial donation and I’ll make sure your company is recognized and promoted online to thousands of people.  If you’re an individual homeowner, do what you can.  If you can’t send money, perhaps you can help in other ways.  Organizing meetings of homeowners, sending out emails, posting links to your Facebook page, calling your representatives and encouraging others to do the same.  There’s a role for everyone in this fight, and we’ll need all the help we can get.

And if you don’t want to be a part of this drive for American homeowners… write in and tell me I should quit… that it’s a waste of time… that we cannot win… that we won’t even be heard.

I won’t listen, of course, but I want to know how you feel one way or the other.  For God’s sake do something… even if it’s writing me an email telling me I’m nuts.  At least I’ll know you’re alive.

350 articles.  A lot to read… let alone to write.  I’ve gotten to know hundreds of lawyers around the country that are fighting for the rights of homeowners.  I’ve spoken with and helped thousands of homeowners and heard their stories first hand.  I’ve built alliances with others on-line.  ML-Implode will help.  Shamethebanks.org will help.  Danny Schechter, the producer/director of the documentary, Plunder, will help.  Steve Dibert of MFI-Miami will help.  Short Sale Power Hour will help.  ThinkBigWorkSmall will help.  And I know lots of others that will help too.

Let’s start somewhere.  Help me and I’ll fire the first shot.  After all, how do you eat an elephant?  Simple.  One bite at a time.

Mandelman out.

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Bankers Told Recovery May Be Slow

By SEWELL CHAN

Click here to read the complete story at Livinglies's Weblog.

The abusive conduct that is being engaged in by a whole host of players is being ignored by judges, the Florida Bar and just about anyone else in a position of power who could be standing up to fight for Floridians, but at least Florida’s Attorney General is showing some concern about this incredible abuse of the legal system. After last week’s primary races, there are two candidates for Attorney General and one of these candidates will be elected come November.  The two candidates are:

Pam Bondi

and

Dan Gelber

I want each of you to visit the websites above and carefully review each candidate’s profile and position statements.  In reviewing the websites, I am most encouraged by Gelber’s attention to the mortgage crisis because it at least shows this is on his radar screen.

Here is what I want all of you to do…..write to each of the candidates and express your concern about the foreclosure process.  Tell your personal stories and ask the candidate to express strong positions on the abuses of the foreclosure mills.  We need to get them locked into positions now so that they cannot be influenced by the foreclosure mills and their cash later down the road.

JOIN EACH ONE OF THE CANDIDATE’S FACEBOOK PAGES AND AGGRESSIVELY REACH OUT TO THEM.  IF YOU HAVE CASH TO SPARE, PLEASE CONSIDER MAKING A SMALL CONTRIBUTION TO THE CAMPAIGN.

SPEND A FEW MOMENTS OUT OF YOUR TIME TO GET ON THE RADAR SCREEN OF THESE CANDIDATES.

GETTING INVOLVED IN THESE RACES IS THE MOST IMPORTANT THING WE CAN DO TO INFLUENCE THE FORECLOSURE PROCESS.  PLEASE POINT TO THIS THIS WEBSITE  AS GENERATING INTEREST IN THIS CAMPAIGN AND BE PREPARED TO GET AGGRESSIVELY INVOLVED!

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Click here to read the complete story at Matt Weidner Blog.

In Hard Times, One New Bank (Double-Wide)

By ANDREW MARTIN

Click here to read the complete story at Livinglies's Weblog.

NOTE: This article ran for about 11 hours without the qualifier “NEW” in the headline.  The Website, Global Economic Analysis, which published the answer to the headline question was not clear as to this distinction, and Hat Tip to reader John Cannon, for correcting it.  However, my points in the article, including those based on data from Fannie Mae, remain the unchanged.

Mandelman

Guess how many.  Come on, this will be fun.

The media, and it would seem the government, are somehow surprised that the real estate market is not at all well.  They apparently had thought that things were on the upswing, although why they thought that way, I cannot even imagine.  Perhaps they posses marijuana of such exceptional quality that it alters their reality to such a degree that they actually believe they are living in a place where business is great, life is wonderful and people are terrific.  The Big Rock Candy Mountain, perhaps?

Well, it must just be that I don’t live in the same country they do.  My house in Southern California has gone from being appraised at $925,000 to being eight doors down from an REO recently sold for $360,000.  When I first heard the news of that sales price I grabbed my chest as said, “Wow, did you feel that?  I was like being an elevator that went down real fast.”

We bought our home in 1990 for $340,000, so I shouldn’t be too upset if it’s now going to be worth $360,000 because that means we’ve made a $20,000 profit.  You may not think that’s a whole lot, but I’m pretty sure that it’s more than I’ve made netted from the stock market in the last twenty years.  I’m not sure about that, but I’m not going to check it by doing the math… because I do not want to know.  Besides I stopped opening the statements that come from Merrill Lynch every month like two years ago, and I’m certainly not going to start opening them up again now.  Probably just send me over the edge.

So, you want to take a guess at how many new homes over $750,000 sold in this country in June and July?  Do you have your guess in mind?  Need a little more time to think about it?  Well, okay… I’ll come back and ask you again in a few minutes.

The biggest question I have about the real estate market is… why are we all pretending that there’s a real estate market at all.  There’s no real estate market in this country, hasn’t been one since July 10, 2007, when the Wall Street banks destroyed then bond market.  July 10, 2007 was the day that Standard and Poors and Moody’s downgraded about a thousand bond issues that were backed by sub-prime mortgages, and investors like pension plans dumped the bonds the next day, along with any others that they feared might be downgraded soon.

After that, the mortgage market was doomed.  If pension plans won’t buy mortgage-backed securities, well then banks can’t originate loans because they can’t sell them to Wall Street bankers to package into bonds… called mortgage-backed securities.

So, last year, the Federal Reserve stepped up and said it would be purchasing $1.5 trillion in mortgage-backed securities, and I said… well, cool.  I don’t know if it’s the right thing to do, but it does seem better than not doing anything, which is what we’re all used to seeing them do.  It’s not that they don’t so anything, mind you, it’s just that we don’t get to see much of what they do.  I’m sure it’s all above board though… I just don’t know why people don’t trust the Federal Reserve.

The point is that without any investors buying mortgage-backed securities, there’s really not much in the way of mortgages available.  There’s Fannie Mae and Freddie Mac… and FHA, of course. They’re all bankrupt, but the government is funding them on an unlimited basis.  Yes, the government’s bankrupt too, I realize, but that doesn’t stop them from essentially unrestricted spending on things like mortgages or loans for the unemployed.

Still, there aren’t many loans going on.  How do I know?   Well, the average credit score for a Fannie Mae loan this year is 758,, with an average loan-to-value (“LTV”) of 69%… that’s the average score and the average LTV.  And that’s according to Fannie Mae’s own numbers released by Fannie Mae on May 10, 2010.  In 2009, the average credit score for a Fannie Mae loan was 761, and the average LTV was 67%

For the skeptics out there, you can click on the link just above, ot read the folloiwing paragraph taken from Fannie Mae’s  own reporting:

For single-family loan acquisitions in the first quarter of 2010, the weighted average original loan-to-value ratio was 69 percent and the weighted average FICO credit score was 758. That was consistent with our 2009 single-family loan acquisitions, which had a weighted average original loan-to-value ratio of 67 percent and a weighted average FICO credit score of 761. The ultimate performance of these and all our loans will be affected by macroeconomic trends, including unemployment, the economy, and home prices.

Just how many people do you suppose there are with credit scores of 760 and 30% down payments?  Hmmm… let’s see… minus, 212… plus 11… carry the 3, and… I have no idea but I’m here to say there aren’t that many.  And how many are there that want to buy a house right now, is an even better question.  I mean… many of the people who bought last year… when it was the BEST TIME TO BUY, according to the National Association of Realtors and other disingenuous cheerleaders for he housing market are probably getting pretty close to being underwater by now, or they will be by the end of this calendar year.

So, when the Fed stopped buying mortgage-backed securities in April, didn’t anyone realize that it would make loans pretty darn scarce this year?  I guess not.  I even called around to various “experts” and couldn’t get an answer to the question of where the loans would be coming from… and I asked real experts.

I’m sorry to have to say this, but I’ve come to understand that the numbers that come out of the real estate industry are complete fabrications in many instances.  They certainly were after the bubble popped so I don’t know its take so long for me to come right out and say it… the numbers are often and largely lies.

You might remember my article last month in which I pointed out that, which the press was looking for something positive to report, new home sales in June were the worst June numbers ever.  And that was after May sales were the worst May ever.  And by “ever” I mean since 1963 when they started keeping track… that’s 40+ years ago, if I have my math right.  So, why July sales were even worse, why did everyone act surprised?

Here’s a consolidated statement form what the Washington Post reported:

“… new homes sold in July plummeted 32.4 percent from a year earlier. That’s the lowest level since 1963 and far worse than what analysts expected.  Sales were down 27.2 percent from June, the largest monthly drop since 1968.”

Which analysts were surprised?  I want to know.  I need names.

Then the Post explained that some industry experts, blame the numbers on the expired tax credits, that expired in April, by the way, and have only been extended for deals already in the works.  And whoever it is that thinks that’s the case is absolutely either an idiot or on crack.

Check this out from the Post:

But many economists say the reports show that the weakness in the real estate market cannot be explained solely by the skewed sales generated by the tax-credit program. Deep-rooted fears about the job market and the direction of the broader economy may now be making prospective home buyers more reluctant to pull the trigger on a major purchase.

“There’s clearly something more at play here,” said Mark Vitner, a senior economist at Wells Fargo Securities. “The economy is backsliding a little bit. . . . It seems clear that consumers are holding back on committing to major purchases, such as buying a home.”

See what I mean?  What is going on?  Does Wells Fargo think people are stupid?  “There’s clearly something more at play here?”  Is that what Wells Fargo’s trained monkey had to say?  I’ll say there’s something going on here… the bank that provides him with bananas won’t stop foreclosing on people’s homes after jerking them around for a year or so.  Now he’s studying what’s holding consumers back?

Mark Vitner, Monkey

Hey Marky… over here… you nefarious boob.  I’ll fill you in on what’s holding people back.

Well, let’s see… first there’s the people who don’t believe a word you say, and then there’s the rest… and they hate you for other rock solid reasons.  Wells Fargo Bank has already made so many enemies that if you parked that stagecoach on the street, someone would strip it by morning for sure. I can’t believe you still have depositors.  Backsliding a little bit?  Is that what you think, you economist, you?

Marky… the economy is in a deflationary spiral, that was temporarily abated by outrageous amounts of nonproductive government spending, which went mostly into banks… while the foreclosure crisis was allowed to continue… and all because of banks like yours!  That’s right you pompous pudgy putz… how much was your bonus last year?

You know what, Mr. Vitner… you and others like you are the problem.  You lie constantly, confuse people, and cause them to make bad decisions… and you clearly don’t care, which is the worst aspect of your personality of all.  Your bank is one of the worst offenders, and if there’s a God, and I do believe there is, then FASB will soon require your bank to bring the hundreds of billions of off-balance sheet garbage it owns onto its balance sheet.   Then you’ll be out of work and the worthless, poorly run, crock-of-crap bank you work for will be in receivership as well.

Okay, I can’t even bring myself to say anything more to that guy.  The point is, we’re in the same deflationary spiral that started July 10, 2010.  The only double dip around here is Marky.

There’s only one more thing I want to say about the real estate non-market.  If you’re already at risk of foreclosure, you already know what I’m about to say, but if you’re not then listen up…

You’re going down with the rest of us on this sinking ship.  We can’t fix the problem because you still haven’t figured out that it wasn’t the borrowers who caused this nightmare, and while you’re against helping homeowners in trouble, you’re driving around looking to steal a foreclosure because you’re a greedy piece of garbage.  Keep it up, Mr. and Mrs. Real Estate Market.  You’re on your way to becoming the next wave of foreclosures, and we’ll see you in the soup lines soon enough.

So, do you know the answer?  How many NEW homes sold over $750,000 in June and July nationwide?  Michael “Mish” Shedlock of Global Economic Analysis does, and I love him for knowing:

None.  That’s right boys and girls… none.  Nary a one.

Ooooh boy… things are really looking up, aren’t they?  I say we keep the foreclosure crisis going as long as possible.  It’s working out fabulously… just frigging fabulously.  Anyone want to venture a guess now as to what August home sales numbers are going to look like?

Not me.  I like surprises.

Mandelman out.

Click here to read the complete story at Mandelman Matters.

Editor’s Comment: Without inventing anything, an increasing number of Judges are coming to the same conclusion. If they apply the rules and deny the pretender lender the benefit of presumptions to which they were not entitled in the first place, the case can be heard on the merits. They don’t need to decide who is right or who is wrong. They need to call balls and strikes.

In this submission from 4closurefraud.com the Judge simply states the obvious — an affidavit from some stranger who says that he looked at some papers and arrived at some conclusions in his or her own mind is not evidence or even a proffer of evidence. It is nonsense. Summary Judgment denied. Motion to lift stay should similarly be denied. Any motion based upon such an affidavit from EITHER side should be denied. AND NOW THEY ARE…..

I SHOULD ADD THAT THE NAME “ICE” ESQ. IS COMING UP MORE FREQUENTLY. I’D LIKE TO SEE MORE FROM THIS LAWYER. He seems to be talking the same tack as Gator Bradshaw in Central Florida (Ocala et al) , Jon Lindemen (S. Fla and Orlando), George Gingo (Northern Florida) and others, to wit: we are out to win these cases not just “mix it up” to justify the fees. Very gratifying to me. 3 years ago, nobody would listen. Now they are taking the ideas developed here, by Max Gardner and April Charney and taking it to the next level. I hope they leave us in the dust.

Full Hearing Transcript attached . Courtesy of T. Ice Esq. Palm Beach Florida

Florida – June 2010 – MSJ denied. Affidavits Hearsay Insufficient

What we are starting to see here is a pattern of Judges not excepting these affidavits from these robo-signers.

I can tell you that, if properly challenged, they will pull the affidavits across the board.

Don,t let that stop you from deposing these people, because once you do it will clearly show that they DO NOT have the authority to produce them. It will also show you they know absolutely nothing about the documents that they are signing even though they state it is of their personal knowledge.

Below is a transcript of how one Judge, in Palm Beach County, DENIED a motion for summary judgment on pending issues, including the insufficient affidavit.

Another key issue was an affidavit presented by the defense from Expert Witness Lynn Szymoniak regarding the fraudulent assignment presented in the case.

Lynn’s expert testimony has stopped many foreclosures in its tracks.

If you are interested in talking to Lynn about her services she can be reached at szymoniak@mac.com and just tell her 4closureFraud sent ya…

Some excerpts from the transcript…

THE BANK OF NEW YORK TRUST
COMPANY, N.A., AS TRUSTEE FOR
CHASEFLEX TRUST SERIES 2007-3,
Plaintiff,
-vs-
DAVID J. MOSQUERA; ELIZABETH

~

THE COURT: Okay. Without going into
anything else, I’m not about to enter a motion –
granting a motion for summary judgement based onan affidavit of Mr. Reardon.
~
MR. CHANE: Your Honor, there is simply no — there’s no basis to –
~
THE COURT: I’m sorry. It’s just — it
basically just says he looked at some records. I
don’t know what he looked at and he plugged some
numbers in.
~
MR. CHANE: Your Honor, it’s based on his
personal knowledge. That’s all he needs to do
according to the Rule.
~
THE COURT: Well, motion denied.
~
MR CHANE: On what basis, Judge?
~
THE COURT: On the basis that the Court
fears that there are many issues of fact to be
determined. This is not a matter in which
everything is undisputed.
~
MR. CHANE: What issues of fact?
~
THE DEPUTY: Sir, the Judge ruled. The
hearing is over.

http://www.scribd.com/doc/36551048/Full-Transcript-M-S-J-denied-Hearsay-Affidavit-not-Valid

4closureFraud.org

THE BANK OF NEW YORK TRUST COMPANY, N.A., AS TRUSTEE FOR CHASEFLEX TRUST SERIES 2007-13 PLAINTIF VS. DAVID MOSQUERA

CASE NUMBER 50 2008 CA 04969 XXXX MB PALM BEACH COUNTY FLORIDA

Click here to read the complete story at Livinglies's Weblog.

Click here to read the complete story at Livinglies's Weblog.

The package was prepared by my friend and Fellow Foreclosure Fighter Ryan Curtis.  For those of  you fighting to keep your homes and defend this country in the Middle and Northern parts of Florida, I encourage you to contact my friend Ryan using the contact information below.

That really is one of the things that makes this fight so rewarding is the level of professionalism and selfless sharing that occurs among the many dedicated attorneys that are fighting to protect homeowners and defend our courts all across the state.  Unlike so many other areas of the law where attorneys jealously protect their work so that other attorneys cannot benefit from the very real investment of time that is spent in researching and preparing the work, the attorneys that draft these motions and share the research that is posted on here share it generously so that the larger community benefits.

We’re all in this together and if we somehow manage to make it through this mess we will have many good people (attorneys and layperson included) to thank for contributing to the fight!

foreclosuredefense101

Ryan C. Curtis, Esq.
175 NW 138th Ter., Suite 100
Jonesville, Florida 32669
(352) 333-7207 Tel.
(352) 333-7208 Fax

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Click here to read the complete story at Matt Weidner Blog.

With the left hand in the right pocket and the left foot in the left pocket and the right foot in the back pocket. Read the whole thing through and give me comments.

Click here to read the complete story at Livinglies's Weblog.

My people perish for lack of knowledge.

Book of Hosea, Chapter 4, Verse 6

The idea of turning worthless metal into gold has fascinated man for thousands of years.  The word itself, alchemy, is derived from the Greek meaning, “The Egyptian Art”. And Lapis philosophorum, referred to as the philosophers’ stone, is the legendary alchemical substance, that was said to be capable of turning base metals, especially lead, into gold. Sir Isaac Newton, the guy who I was taught, needed an apple to fall on his head to figure out the whole gravity thing, was also a famous alchemist.

Legend has it that a 13th-century scientist and philosopher named Albertus Magnus discovered the philosopher’s stone, passing it on to his student, who is considered to be the Catholic Church’s greatest theologian and philosopher, Thomas Aquinas, just before he died circa 1280.  In his writings, Magnus reported that he witnessed the creation of gold by “transmutation”.

I didn’t know any of that, but now I understand J.K. Rowling’s “Harry Potter and the Philosopher’s Stone” a little better… well, sort of, anyway.  And thank the good Lord for Wikipedia, that’s what I always say.

I imagine that the whole idea of lead being turned into gold was probably involved in the world’s first securities fraud case brought by an investor, like maybe Sir Issac Newton was really just an 18^th century version of Bernie Madoff, and all that gravity stuff was just the work of a public relations firm putting the right spin his image.  “Let’s go with the gravity pitch, and I’m gaga over the whole Apple thing… package it up, I want to see some sketches on my desk by Old Hallowed Eve… it’s positively brilliant.”

Anyway, it’s easy to see how the idea of turning something of little value into gold would capture man’s attention. It’s the winning Powerball ticket.  It’s like Jack getting the goose that lays golden eggs after his magic beans turned into a giant beanstalk.

It’s impossible, of course.  You can’t turn lead or anything else for that matter into gold.  Or can you?

Securitization… We’re Forever in Your Debt

I think you have to be at least in your forties to remember life before securitization took hold of out society.  Prior to that, people used to say that the only way a bank would give you a loan was if you could prove you didn’t need one.  Once securitization was driving our national pride, banks made as many loans as fast as they could, in the form of credit cards, auto loans, and every other flavor of debt imaginable.

Before securitization children were raised receiving fewer presents for their birthdays and holidays and I don’t need a source for that statistic.  Water is wet, the sky is blue, and that’s a fact.  Hotel rooms never cost $600 a night, even if you adjust the amount for inflation, in fact, there were simply far fewer so called “luxury goods” before we were all being constantly sold on the idea that taking on debt was the hip hop happening thing to do.

Just look at cars.  Before securitization I wanted a used Bronco.  After securitization, I wanted a Range Rover.  The Bronco was way better, by the way, but it cost me $792.40 a month for three years to find that out.  I’m not sure when it happened, but sometime in the last decade, the price of cars went completely around the corner and up the hill.  One day, a really expensive car cost $40,000.  I went away for the weekend, came home and a really expensive car cost $65,000.  Three months later, top of the line was $80,000.  And at the peak, there were ultra-luxo-window stickers reading $115,000 and more.  I don’t know how you feel about this issue, but for $115,000, I need bedrooms.  Thank you securitization!

A few years ago, my daughter, then maybe 12 years old, just had to have True Religion jeans.  All the kids were wearing them, and I’m a father who understands and accommodates the forces of peer pressure, so to the mall we went.  Nordstrom’s, an entire department store that stands as a testament to securitization, carried the ultra-desirable jeans.  How much could they be, I wondered as I reached for the price tag.

Do you know the answer to this one?  If you don’t, then you better sit down… $300 and up!  When I first saw the price tag I thought they must sell them as a three pak, but no.  Three hundred bucks for one pair of True Religion jeans.  Jeans!  They’re jeans.  Like Levis with heavy, pronounced stitching so they look like someone made them in a high school sewing class.  And God forbid they have an over sized piece of glass on the pockets, and you’re closing in on four bills with tax and tip.

The girl at the check out counter asked me how I’d like to pay for them.  I replied, “How about a little bit each month for a couple of years,” and I handed over my plastic debtor card.  In one fell swoop, I made my daughter happy beyond words, and at the same time, I did my part for Wall Street’s bond builders.  Little did I know that those bond builders would soon cause the credit markets to freeze solid, and lead to an ice age in the financial markets that would turn the United States government into the lender of first, last and middle resort.

Sidebar: By the way, in this story the stock market is largely irrelevant.  Here’s what David Einhorn of Greenlight Capital, one of the insiders to today’s crisis, said about what has happened:

“What most people don’t realize is that the fixed-income (read: bond) world dwarfs the equity (read: stock) world.  The equity world is like a f#@king zit compared with the bond market.”

But then, we don’t make movies about the bond market, now do we?

What is Securitization?

Securitization is a process that takes certain assets (think: loans) and “pools” them so they can be packaged into interest-backed securities, which are a type of bond.  The interest and principal payments that come from the borrower making payments on a loan are paid to those that invest in the securities/bonds.  Basically, when you take a mortgage or other type of loan, and you turn it into a “security,” which is called a bond… you’ve “securitized” it.

Let’s start here: Lending money to anyone is risky.  You just never know if the person will repay the loan.  He or she may mean to repay it, but can’t due to a life event that could not have been foreseen. Maybe he or she became unemployed unexpectedly.  Or, I don’t know… like, maybe he or she got hit by a bus.  I absolutely detest it when that happens.

It’s probably a little safer to lend money to someone with a good credit score than a bad one, but no matter what FICO says, lending money to any human being is still a risk of substantial heft.  Securitization changed all that… it made lending money to anyone a lot safer.

Lending money to people, however, can also be quite profitable, so when the risk of doing so was reduced significantly, a whole lot more investors wanted to do it.  After all, stocks can go up and down with the tide, but bonds are IOUs from corporations or the government.  If they’re rated triple A by the bond market’s credit rating agencies, Moody’s, Fitch and Standard & Poors, they’re almost like money in the bank, the kind of investment that’s appropriate for a pension fund.

Securitization got its start in the 1970s, when home mortgages were pooled by U.S. government-backed agencies, Fannie Mae, Freddie Mac, Ginnie Mae, and Sallie Mae.

Once again… when you securitize the mortgages you spread the risk of lending money to any one individual by creating a pool of loans and then selling debt securities, called bonds, that entitle the holder to a percentage of the payment streams, (made up of the principal and interest payments made by the borrowers as they make payments on their mortgages).  Because the mortgages are all pooled, if one person doesn’t make their mortgage payment, the impact to any one of the investors in the bonds is minimal.

The securitization process involves two steps:

Step One: A company that originated loans identifies which loans it wants to remove from its balance sheet.  It creates a pool of these loans, referred to as the “reference portfolio”.  It then sells this reference portfolio to an entity referred to as an “issuer,” which is set up by a financial institution to purchase the assets in the pool.  Issuers are “special purpose vehicles,” commonly called “Structured Investment Vehicles” or SIVs and they are off a company’s balance sheet for accounting and legal purposes.

Step Two: The issuer finances the purchases of the assets in the pool by issuing and selling mortgage-backed securities… bonds… tradable, interest-bearing securities to investors. The reference portfolio, or pool of assets, generates cash flows that fund a trustee account that pays investors fixed or floating rate payments.  The originator of the loans services the loans in the reference portfolio, in most cases anyway, and collects payments from the borrowers who took out the loans.  The servicer deducts its fee from the payments collected and then passes the balance on to the SPV or trustee.

Okay, how are we doing?  Hanging in there?  If you’re feeling overwhelmed, you can always go back and read those last two paragraphs again slowly.  It’s not complicated.  It just takes a little getting used to.  Here’s an even simpler explanation of the two steps above:

Step One, Take Two: We originate some loans that we don’t want on our books anymore.  We want to sell them to someone else, but the someone else probably doesn’t want them either… for the same reasons that we don’t.  So, we make a list of these loans and we call it our “reference portfolio”. Then we set up a separate company with a “special purpose,” that’s not found on our financial statements, called an SIV, whose purpose is to buy the loans that we want off our books.

Step Two, Take Two: Now, the SIV we set up needs to buy the loans we want off our books, but it needs money to buy them.  So, the SIV finances the purchase of the loans by selling mortgage-backed securities to investors.  As the borrowers make their payments, they are placed into a trustee account, which pays the investors either a fixed or variable rate of interest, which is the investor’s return on their investment in the mortgage-backed securities.  Since we originated the loans, we want to keep servicing them… we just didn’t want them on our books anymore… we don’t mind earning a fee for sending out the monthly statements and collecting the payments.  We take our fee off the top of what we collect , and send the rest to the trustee account.

Better?  I hope so.   Can you see how it would be less risky for an investor to buy a mortgage-backed security… which is a share of a pool of loans that have been securitized… then it would be to loan someone $500,000 for a single mortgage?   Way less risk, right?  Okay, let’s move on…

More recently, like in the last ten years, Wall Street started dividing the reference portfolio into sections called “tranches”.  Each tranche has a different amount of risk to the investor.  The least risky tranche is the senior tranche, or super senior tranche, and it receives its share of the cash flows generated by the loans before any of the more junior tranches.  Once the most senior tranche has received all that it’s supposed to, then the middle tranche starts filling up.  And once the middle tranche is full with the amounts it was supposed to receive, then the bottom tranche starts to fill with cash flows from the payments borrowers are making.

(In a previous article on Mandelman Matters, I described these tranches as drawers in a dresser, in case you don’t recall.  You can find that article here: Mandelman U.)

In our latest financial meltdown, the most senior tranche was rated triple A, so the mortgage-backed securities that came from the most senior tranche were triple A rated bonds.  The middle tranche was rated triple B, so the bonds sold from that tranche were rated triple B, which is the lowest rating that’s considered “investment grade”.  And the bottom tranche was rated below triple B, so we can think of the bottom tranche as being akin to junk bonds.

Securitization provided a way for banks and financial institutions to find new sources of funds either by moving assets (loans) off of their balance sheets, or by borrowing against them, which replenishes the cash needed to originate more loans.  You see… it’s the circle of life, Simba.

Securitization made a bank’s cost of borrowing go way down because assets being securitized are removed from the bank’s balance sheet, which means that issuers can raise funds to finance the purchase of assets more cheaply than would be possible on the strength of the originator’s balance sheet alone.   And unlike conventional debt, securitization does not inflate a company’s liabilities. It produces funds for future investment without balance sheet growth.

The system of originating loans, securitizing them, and selling the securities cut from the pool or the tranche seemed to work just fine and dandy for a long time, bringing huge economic benefits to this country.  Let’s face it, it’s an attractive proposition… all the advantages of lending without the risk of not being repaid.  The marketing of debt was on the move, and soon we became a country jammed packed with consumers anxious to borrow and spend, borrow and spend.  Money from overseas became jealous, and figuratively speaking, booked passage to the USA’s spectacular spending grounds, where the streets were said to be paved with gold and platinum plastic.

The 1980s… If you can borrow it, they can securitize it.

Beginning in the 1980s, Wall Street started securitizing other forms of debt, considered an “income producing asset” because the payments made by the borrower provide an income stream to the investor.  Car loans, credit cards, student loans, computer loans, aircraft loans… if we could borrow it, Wall Street found a way to securitize it.  When mortgages are used as the backing for the bonds, we call them mortgage-backed securities (MBSs), and when other types of income producing assets are behind the cash flows, we call the bonds “asset-backed securities (ABSs).

In theory, securitization reduces the risks of lending and increases liquidity…  and this may be true… for loan originators.  For society as a whole, however, securitization is a double-edged sword.

Securitization transforms an illiquid asset… a loan… into a publicly issued tradable debt security.  It also can take loans on your balance sheet made to people with relatively low credit scores and turns them into triple A rated bonds… very much like alchemy… the “science” of turning lead into gold.  And since you can turn lead (sub-prime loans) into gold (triple A rated bonds) there’s a strong incentive to make more sub-prime loans.

You see, there’s virtually unlimited global demand for triple A rated bonds because they’re by definition as safe as bonds issued by the U.S. Treasury.  But there’s NOT an unlimited supply of sub-prime loans.  To use our alchemy analogy, a few years into the housing bubble, Wall Street found there was a shortage of lead, so they started doing everything possible to get more lead… they started predatory lead gathering, if you get my meaning.

Over the past three decades, the number of securitized residential mortgages in this country has increased steadily and dramatically… roughly 45% at the end of 2004, roughly 51% at the end 2007.  Some private securitizations, as opposed to the U.S. government-backed variety, grew by 102% between the years 2004 and 2007, accounting for almost 40% of total mortgage securitizations by the end 2007.  The vast majority of the loans placed into private securitization pools during this period were sub-prime or Alt-A.

Securitization is what drives all of those credit card and mortgage advertisements… it’s what has fueled the campaigns to convince us to embrace debt as being a good thing, a status symbol, something to be desired.  Our country’s economy grew, as we all went further in debt.  And credit was made available to more people than ever before, even those with relatively low credit scores.  That’s why a gardener with a low income was given a $700,000 mortgage during the bubble.

But, is that what caused the economic crisis we’re now in?  Was it the sub-prime borrowers not making their mortgage payments that drove our economy off of the proverbial cliff?

No, it was not.

Securitization is why we all started living with debt without thinking about it as a burden.  It’s why, when going to the mall armed with our credit cards, we say we’re “going shopping,” instead of describing what we’re really doing, which is “going borrowing”.

Try this the next time you pull out your Visa or MasterCard to “buy” something.  Say to yourself… “I’m now borrowing money at a high interest rate.”  Chances are that product, or whatever it is, won’t look nearly as good as it did a few minutes ago.  Whatever you see in the window… ask yourself if you want to borrow money at 20% interest to get it.

Securitization did many good things too.  It made mortgages available to more people, so more people could own their own home.  Home ownership is a good thing for a nation’s economy for obvious and well-known reasons.  People invest in homes.  They raise families in homes.  As home prices rise, wealth is accumulated in the form of home equity.

Historically, sub-prime loans performed quite well.  People, in general, tend to pay their mortgages, a fact that should come as little surprise to anyone.  People with less than stellar credit scores pay their mortgages before they pay other bills because they value having a home a whole lot.  Understandably, they don’t want to move back to that apartment in which the kitchen smelled like old socks.  In fact, one of the reasons the bond credit rating agencies rated the bonds backed by sub-prime mortgages as triple A, besides the impact of securitization into tranches, was the historical performance of sub-prime loans.

And, just for the record, sub-prime borrowers don’t intentionally go out and buy homes that they know they won’t be able to afford next year.  You want to know why?  Because no one likes moving their refrigerator that much.  Because they have to find a friend who has a truck, like me, who will come over on a Saturday and help carry the fridge to their new apartment, which is invariably on the second floor and the elevator’s broken or not big enough.

No, what happened to cause the economic crisis that’s dragging us closer to an outright depression every day, had little to do with sub-prime borrowers, it had a lot to do with securitization… and it had everything to do with derivatives, incentives, and the bond market, or rather the shattering of the bond and credit markets.

When Goldman Sachs CEO, Lord Blankcheck… I mean Lloyd Blankfein, testified a few months ago about his firm’s role in a scandal du jour, in which Goldman was accused of betting against the bonds they sold to investors by buying credit default swaps that paid off when the bonds failed, he referred to the investors as being “sophisticated”.  But, bond investors are not, generally speaking, sophisticated.  They buy using a credit rating system that uses letters of the alphabet to signify the amount of risk involved.  I mean, you might as well color code the damn things… I’m buying yellow bonds today!  I like purple bonds!
A recent S&P document states:

“Our ratings represent a uniform measure of credit quality globally and across all types of debt instruments. In other words, an ‘AAA’ rated corporate bond should exhibit the same degree of credit quality as an ‘AAA’ rated securitized issue.”

What happened to create this mess wasn’t the result of borrowers borrowing too much, although some certainly did.

It wasn’t the housing bubble, although we did have one and it popped.

It wasn’t predatory lending, stated income or Option ARM loans, although some of these caused problems for some people.

It wasn’t homeowners believing that real estate prices would go up forever, or using their homes like ATMs, although I’m sure there were some that were guilty of both to whatever degree.

It was Wall Street’s bankers abusing the system in every conceivable way… because they could do so for profit… and an enormous profit, at that.  It was Wall Street’s investment banks that irresponsibly borrowed too much, Lehman was leveraged at 30:1.  It was Wall Street’s banks that seemed to think that home prices would go up forever.  And it was absolutely Wall Street’s bankers that used their banks like giant ATMs, pumping cash out of them until there was no more as reward for short term gains that turned out to be illusory.

Wall Street’s bankers abused the securitization process, creating mortgage-backed securities and collateralized debt obligations (“CDOs”), which are really towers of BBB rated mortgage-backed securities, that were unquestionably destined to default.  They did this because, starting in 2003, someone at Goldman Sachs convinced someone at AIG to issue credit default swaps on triple A rated mortgage-backed securities.  Make no mistake about it… they knew what they were doing.

From In Understanding the Securitization of Sub-prime Mortgage Credit, referenced below:

The rating agencies differ about what exactly is assessed. Whereas Fitch and S&P evaluate an obligor’s overall capacity to meet its financial obligation, and hence is best through of as an estimate of probability of default, Moody’s assessment incorporates some judgment of recovery in the event of loss. In the argot of credit risk management, S&P measures PD (probability of default) while Moody’s measure is somewhat closer to EL (expected loss).

In 1998, there weren’t enough credit default swaps in existence to make any difference to anyone.  By 2007 there were… it’s hard to say, but estimates seem to hover around $60 trillion.  Today, those same estimates say the number has been reduced to $30-$40 trillion.  That’s trillion, with a capital “TRILLION”.

Perverse Incentives…

Credit default swaps are like bond insurance… they pay off when a bond defaults.  Because triple A rated bonds hardly ever default, buying insurance that pays off when they do default was cheap.  For example, for $200,000 a year for 10 years… you could buy a credit default swap insurance policy on $100 million in bonds backed by sub-prime mortgages.  If the $100 million bond defaulted, the credit default swap would pay you the $100 million.

In Understanding the Securitization of Sub-prime Mortgage Credit, a white paper written Adam B. Ashcraft and Til Schuermann of the New York Federal Reserve Bank in March of 2008, they described the infrequency of highly rated bonds defaulting as follows:

Highly rated firms default quite rarely. For example, Moody’s reports that the one-year investment grade default rate over the period 1983-2006 was 0.073% or 7.3 basis points. This is an average over four letter grade ratings: Aaa through Baa.

So, buying a credit default swap on a mortgage-backed security that was backed by sub-prime loans became a way for institutional investors… they weren’t available to you or me… to short the sub-prime market.  And you didn’t even have to own the mortgage-backed security to insure, or rather, bet… against its default.

Nothing was right about what was happening on Wall Street, but it wasn’t easy to see, in large part because it only went on for a few years, but also because Wall Street obfuscates what it doesn’t want others to see… in fact, Wall Street guys are legendary in that regard.

What could be seen were the houses.  Bigger, newer, nicer and nicer, and lots of them… everywhere you looked.  I felt like I had spent much of 2006 feeling like I was either a wimp in the risk taking department, or that I’d fallen behind in the race to the top of the hill.  Where were all these houses coming from?

So, when things changed the country experienced the changes through the real estate market.  The bubble had popped and everything that would happen after that would be blamed on those houses, those inside them, and those who sold them and the loans that financed them.  The bankers of Wall Street were insolvent and their insolvency threatened the global financial system, their behaviors had squandered untold trillions, but it was blamed on “irresponsible sub-prime borrowers”.

I ran the following paragraph by several people and they all thought that it was about right… so… conventional wisdom goes something like this:

Sub-prime, and other borrowers, irresponsibly got in over their heads and bought houses they couldn’t afford, or took out home equity loans in amounts they couldn’t afford to repay, and then at some point couldn’t make their payments.  When they didn’t pay for the houses and loans, it caused the bonds to default and Wall Street banks and other investors around the world lost so much money that some went under and the government had to bail them out to save the banking system.  Then, AIG had to pay out $170 billion because of credit default swaps that were triggered when the bonds defaulted, which the U.S. government had to bail out so investors wouldn’t lose all that money.

What a crock of crap that is.  The only part of that paragraph that resembles truth is that the U.S. government did in fact bail out AIG.  The rest is unadulterated hooey that was started by the banking industry’s PR machine, and something like half the country still believes to be true.  And because they do, the people trapped by our deteriorating economy in one way or another, are alone, ashamed and afraid.  It’s dividing our country along imaginary lines.  And while we blame each other for what securitization started, the bankers get richer and more powerful.

That’s not at all what happened here.  What we’re experiencing today in our economy isn’t the result of a real estate bubble popping.  Wall Street’s investment banks didn’t come crashing down because some previously hidden class of irresponsible Americans with sub-par credit bought houses they couldn’t afford.

What caused our economy to collapse happened on July 10, 2007, because that was the day that something happened that had never happened before, and what it destroyed remains destroyed to this day.  Because of what happened on that day in July of 2007, the U.S. government is the only investor in mortgages in this country, the only lender in the mortgage market, through Fannie and Freddie, now both essentially government agencies.

More than three years later and private securitizations of mortgages are little more than an historical footnote… they’re no more.  Pension plans don’t invest.  And even Goldman Sachs’ bonds… they’re debt… is still guaranteed by the U;.S. government.  The banks aren’t healthy, no matter what Tim “Transparency” Geithner wants us to believe.  And the toxic assets we were all told were clogging up the balance sheets of our nation’s largest financial institutions are right where they were in the fall of 2008.  All because of what happened on July 10, 2007…

The day that Standard & Poors and Moody’s downgraded the ratings on 1,011 bond issues… some were downgraded by several letters of the alphabet.  It was LESS THAN ONE PERCENT of the bonds secured by sub-prime mortgages.

Less than one percent of the bonds secured by sub-prime mortgages were downgraded that day.  You probably didn’t even notice it, but it started a series of dominoes falling that had been set up to spell out disaster.

Pension fund managers were furious.  Their funds had bylaws that prohibited them from investing in anything but triple A rated bonds.  If Standard & Poors and Moody’s hand screwed up the ratings on these bonds, what about the trillions of other mortgage-backed securities that institutional investors were holding?  What about the bond insurers?  Who was vulnerable?  Fund managers dumped their bond holdings in the morning, and at fire sale prices.  Investors ran for the exit on financial stocks.

Money for sub-prime and Alt-A mortgages evaporated literally overnight.  Within weeks, money for all types of mortgages was scarce and fading fast.   Then money for all sorts of credit had left the building, even for debts that had nothing to do with mortgages.  Banks began hoarding cash.  Within two or three weeks, banks didn’t trust each other enough to lend to each other.

The SIVs that the banks had set up off of their balance sheets had to be refinanced every three to six months, but suddenly no one wanted to invest in them.  Banks like Citibank were forced to buy them back, or force their investors to take unthinkable losses.

On August 7^th, the Federal Reserve had refused to lower rates.  But on August 17^th, the Fed hit the panic button and announced a huge expansion of its emergency lending program for banks.  Here’s what the Federal Reserve had to say on that August 17^th…

Press Release

Release Date: August 17, 2007

For immediate release

Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the Federal Open Market Committee judges that the downside risks to growth have increased appreciably. The Committee is monitoring the situation and is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.

Did you see anything in there about irresponsible sub-prime borrowers buying houses that were too expensive, or even anything about the housing market at all?  No, I guess you didn’t, now did you?  And why not read that last line one more time…

(The Federal Reserve) is prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.)

The world’s biggest bailouts were about to begin.

With no way to get a mortgage, housing prices started to fall, but they didn’t just come down gradually as they would in a normal market correction… they fell of a damn cliff, like in the last scene of the movie Thelma & Louise.  With no way to refinance, those that had been sold loans that needed refinancing were doomed.  The credit markets were frozen solid.  Consumer spending would soon slow, transforming a torrent into a trickle, and unemployment had nowhere to go but up.

The U.S. government might have stepped in to stabilize the financial markets that fall, but by the end of the year, the country had only one question on its mind… which candidate would be the country’s next president.  Everything else, including the beginnings of an economic meltdown that would come to resemble that of the 1930s, would have to wait.

What had started growing as a result of securitization, now was a growing feeling of insecuritization.  But it wasn’t the borrowers that flipped the switch and turned on the financial chaos channel, it was Wall Street’s bankers.  No one told them to create loans than needed to be refinanced every two or three years, no one forced them to securitize loans into pools with more risk of default than was present in the individual loans themselves.  No one got out of bed one morning and said… hey, why not break the bond market so only the government will make loans from now on.  And no one said leverage your assets 30 or 40:1.  Bankers did all that, baby…  not borrowers.

Let my people go… it’s long past time to come together…

Don’t you get it?  We’re not going to have any sort of recovery until we stop the foreclosure crisis.  And we can’t stop the foreclosure crisis without helping people avoid foreclosure.  And we won’t help people avoid foreclosure until politicians know that they won’t get clobbered by their constituents for having done so.  And meanwhile, the water just keeps rising higher… and higher.

Life events happen.  Illness.  Job loss.  Divorce.  Any of those things happens today and chances are better than excellent that it’s a foreclosure to boot.  And those things don’t just happen to other people, they happen to everyone.

The foreclosure crisis is entirely unnecessary at this point.  It can be stopped.  It’s being allowed to continue and the people are too ashamed to speak out and demand that it be stopped.  There are millions of homes sitting vacant… and for what?

The scars are already deep.  The water is higher every single day.  Do you feel it… yet?  You will.  We all will.  Soon enough.

And then we’ll all wish we’d done something sooner.  And it will be too late.

Mandelman out.

Click here to read the complete story at Mandelman Matters.

The national media is now picking up on a major issue in foreclosure cases that we’ve been raising in this office for months now….the fact that most foreclosure judgments entered in this state are entered with no admissible evidence whatsoever.  Think about that.  The Florida Supreme Court estimates that there are over 500,000 foreclosure cases pending in Florida and I’m suggesting that most judgments should not be entered because they Plaintiff has not met its threshold burden of introducing the evidence it needs to prevail in its case.

Legal Analysis-  Something is Very Wrong In Foreclosure Court

The issue first came to my attention when a law student came to work for me and started questioning the basics of foreclosure law.  This young lawyer, Michael Fuino drafted a memo then questioned how judges accepted the affidavits stuck in all my foreclosure files.  Now most times, when you get memos or pleadings from a law student, they’re all over the place…citing the Constitution and the Magna Carta and all sorts of law and rules that have no place in a fast-paced law office.  But this memo was different.  It was concise and dead on point.  I attach it right here for all the world to read:

AFFIDAVIT Memo

We continued fleshing this issue out and from that small beginning, the memo was crafted into the motion that appears below:

affidavitMONTGOMERY

That memo and then that Motion helped develop the legal analysis that made it’s way into a courtroom transcript which appears below:

wasyliktranscript

And then finally, the national legal news media picks up the story, found here:

Law.com – New Strategy in Foreclosure

I sat in a courtroom yesterday and I watched foreclosure file after foreclosure file get churned through and judgment entered.  It pained me to watch this process.  I remain and will remain very much bothered by the physical sight of seeing those files, one right after another signed, foreclosure judgment granted.  There wasn’t even an attorney for the Plaintiff present.  No attorney to confirm the facts in the file or whether the Plaintiff still wanted judgment.  Granted there was no attorney or defendant there to oppose the garbage in the files, but what about the fact that there wasn’t even a Plaintiff’s attorney to support the file going forward.  The collective value of these judgments was millions of dollars and the law firms that filed these cases cannot even send a flunkie lawyer to push the file through?  Were the homeowners in a workout plan?  Were they in modification?  Were the assignments fraudulent?  Were there really original notes in the file?  Did the defendants receive service of process?  Who was the lender getting all these properties?  Who was really owed the money?

NONE OF THOSE QUESTIONS MATTERED IN THE SLIGHTEST BIT…..JUST KEEP CHURNING THOSE FORECLOSURES THROUGH.

I hope that all this will can be righted someday.  I hope that we will all take a deep breath and think about what we’re doing here.

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Click here to read the complete story at Matt Weidner Blog.

On Monday, August 30, 2010 in Manatee County, the Honorable Jannette Dunnigan will hold a hearing to determine whether to hold a foreclosure mill attorney guilty of contempt for the court.

I encourage everyone to read the Motion for Contempt Memo attached here . Anyone outside the foreclosure alternative universe would not believe the conduct detailed in the memo would be allowed to occur and what’s most disturbing is that it happens over and over and over and over again every single day in courtrooms all across the state.  I just don’t get it….I mean we’re all going to make errors from time to time, but the amount of taxpayer dollars that our clerks and judges spend waiting on phones for the foreclosure mill attorneys just makes me furious.  In fact,

The conduct demonstrates utter disregard and disrespect for the court, causes time and money for the other parties who have appeared in this case

The foreclosure mill attorneys have been invited to a little hearing to explain themselves and just to make sure they get the importance of attendance at this event…..the judge writes..

FAILURE TO ATTEND MAY RESULT IN SANCTIONS….INCLUDING INCARCERATION AS DEEMED APPROPRIATE

Theoretically at least, the court is open to the public.  I say theoretically because even though the Florida Constitution and Federal Constitution demand that courts be open to the public, courts across the state are ignoring such pesky little details and forbidding taxpayers and citizens from observing these proceedings.

I imagine this judge respects those little things called the Constitutions and I think it would be a powerful statement for normal people and the press to show up for this hearing.

I’ll be there…hope to see all of you!

And just for kicks here’s a recent Order from a judge who has apparently had it with the nonsense from the mills.

Enjoy the Order

silverorderfees

And again, the most striking thing about the Order is the same order could entered tens of thousands of times across this state……

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Click here to read the complete story at Matt Weidner Blog.

We all need to do our jobs and continue to fight these abuses, continue to educate our elected and senior judges and work with the press to make sure the tragic story that is foreclosure is reported across this country.  As attorneys we have a solemn ethical obligation to continue this fight.  Likewise, the unrepresented and pro se patriots have an important role to stand in courtrooms and remind our judges that normal, everyday non-lawyer citizens have just as much right to stand in courtrooms and make arguments. 

Our courtrooms are consecrated by the Constitution, we cannot allow these attacks to go unchecked.

In most media markets we have gotten beyond debates over homeowner’s inability to pay mortgages or lender’s unwillingness to modify the mortgage or to even properly staff phone banks so they can talk with their borrowers.  Sophisticated media and now the public at large are examining the flawed legal processes that have infected our courtrooms statewide.  The judgments entered and the foreclosure sales that occur during this period will long stand as testaments to the systemic failures of our judicial system that is bending to the howling cacophony of the legislature that is demanding that our courts do the bidding of corrupt businesses that brought this country to the brink of economic Armageddon.

I have faith that our judges will eventually stand up and oppose this systemic tyranny.

Until that time, we’ve got to rely upon the press to issue the clarion call!

Daily Business Review

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Click here to read the complete story at Matt Weidner Blog.

The foreclosure mills are more than happy to fulfill these ill-conceived judicial objectives so they concoct the paper that, to the casual observer, would suggest the Plaintiff in a courtroom has the right to foreclose.  In the State of Florida, most of the major foreclosure mills are under a variety of investigations, most significantly from the Florida Attorney General’s Office who is examining the whole panoply of bad conduct engaged in by the firms.

At some point in time, society and observers will look back at this period of insanity and wonder why our judiciary allowed this conduct to play out in their courtrooms.  The false affidavits, the faulty assignments, the shifty plaintiffs, the foreclosure mill attorneys appearing by telephone, rocket dockets with no time or concern for all these issues.  These are dark days indeed for our court systems and for the judges who we elected and who took an oath to protect and defend us and the Constitution and laws that used to mean something in this country.  The foreclosure problem is not going away.  The bad loans and bad documentation and bad accounting systems won’t just fix themselves.  Judges can either send these criminals and their attorneys back to their dens of sin and force them to resolve these issues with borrowers or they can continue to reward the evil conduct that brought us to this place.

Until that happens, and perhaps because it is not happening with any sense of urgency, some advocate a more business savvy approach to the crisis…..

READ THE STORY AND WATCH THE VIDEO HERE.

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Click here to read the complete story at Matt Weidner Blog.

U.S. Judges Sound Off on Bank Settlements

By BINYAMIN APPELBAUM

Click here to read the complete story at Livinglies's Weblog.

Not so long ago in this country breaking into another person’s home would clearly have been a crime.

When law enforcement cared.  When those we elected to protect us cared. When Judges cared.

But that was long ago.  Before the banks, foreclosure mills and Wall Street criminals took over this country and trampled on the rights of any soul who dared cross them or get in their way.  Today we live in a much different world.  The banks and their agents are emboldened.  They fear no government official.  They fear no judge.  They are restrained by no law.

I have begun collecting terrifying examples of bank terror and will continue to publish the examples.  For starters, I want each of you to read the lawsuit I’ve just filed.  Read carefully the allegations made in the lawsuit, but most importantly read the report from the Charlotte County Sheriff’s Department.  Read the findings of fact.  Two thugs broke into a home, moved property around, helped themselves to a beer.  The thugs returned and boldly told their victims they would return to terrorize again.  Two visitors to our country were terrified.  Thousands of dollars in property was stolen.  But the Sheriff’s office can seem to find a crime here.

The thing that terrifies me most about the incidents described in this lawsuit is the fact that I have logged dozens of phone calls to various levels of authority within the Charlotte County Sheriff’s Office.  I have spoken with street officers, detectives, supervisors, even internal affairs.  My calls have been ignored.  I’m not sure if I’ve gotten high enough up the chain of command, but I’m going to keep working, keep calling and keep filing lawsuits until this issue gets the attention that it deserves.

Pay attention to the facts in this case and be appalled, but sit tight and stay tuned because as bad as the facts in this case are, I’ve got worse cases and am preparing to file additional cases with even more grotesque facts. If law enforcement, particularly our elected Sheriff will no longer protect us in our homes, who can we count on to protect our families?  When one of these lender break ins results in physical harm either in Charlotte County or in some other county across this country, law enforcement cannot stand by and say they were unaware of this phenomena.

complaintfiledtotal

Please share your examples with me.  We cannot stand by and allow these fundamental violations of rights to occur.  I hope that press picks up on these stories and that our elected officials and judges will wake up serve those they took an oath to protect.

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Scridb filter

Click here to read the complete story at Matt Weidner Blog.

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REQUEST FOR LEGAL SERVICE IN CALIFORNIA:

We have a customer who has gone through the title search, securitization search and who has filled out the GTC Registration form on the right hand side of the Blog. Reference #5198002. California Property. Any attorney wishing to offer to provide services to this customer should write to neilfgarfield@hotmail.com. You will receive the completed registration form. No referral fee or co-counsel fee is expected and none will be accepted. Arrangements with client are your own. Expert declarations and other forensic help are available through the blog, the blog store and through anyone else of your choosing. The customer may supply you with title report, securitization report and commentaries if they so wish.

“I am looking for an attorney who will help with a simple and effective quiet title action. No assignments are done at the courthouse, only the original deed of trust. B of A sent me a copy of their note after I requested it. This is a copy with NO ENDORSEMENTS OR ALLONGES, only a scanned copy they received before they went out of business. They totally blew off my QWR I got from this site. A QTA should be pretty straight forward and require very little in regards to representation, I am sure the biggest part will be to use the word ‘objection’ repeatedly when they show their freshly created bogus documents. Please help Obi Wan Kenobi! You’re my only hope!! “