U.S. Judges Sound Off on Bank Settlements

By BINYAMIN APPELBAUM

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EDITOR’S NOTE: The shell game continues. While the media picks up stories about “settlements” giving rise to the presumption that Countrywide Home Loans and Bank of America and the rest of the securitization players committed various violations of statutes, duties, rules and regulations, the main point gets lost. Where is this money going and WHY? What is the tacit or express admission in paying that money and what effect does it have on the average homeowner sitting with a loan whose obligation is being paid in these settlements?

The simple question that needs to be posed to anyone who looks at the borrower as anything other than a victim is which is more likely? Did the owners of 20 million homes enter into a conspiracy to defraud the financial system, half society and our taxpayers? Did these people have the sophistication, education, knowledge, experience or training to pull off such a caper? Or is it more likely that the Wall Street titans stepped over the line and instead of increasing liquidity for the benefit of consumers and small businesses, used their position to deplete the resources of unsuspecting citizens, pension funds, financial institutions and governmental units from the top federal levels down to the smallest local geographical areas?

By ALAN ZIBEL (AP) – Aug 3, 2010

WASHINGTON — Former shareholders of fallen mortgage giant Countrywide Financial Corp. are in line to recoup a fraction of their investments now that a Los Angeles judge has approved a settlement worth more than $600 million settlement.

The payoff doesn’t come close to compensating for the money lost by investors. But it could prompt more lenders to settle legal disputes at the center of the housing bust.

Bank of America, which bought Countrywide two years ago, agreed to pay $600 million to end a class-action case filed against the company. KPMG, Countrywide’s accounting firm, will pay $24 million.

Several New York pension funds who served as lead plaintiffs alleged that Countrywide hid how risky its business had become during the housing market’s boom years. Calabasas, Calif.-based Countrywide was once the nation’s largest mortgage lender.

The agreement stands to return about 40 cents per share of Countrywide’s common stock, before legal fees and expenses. Consider that the stock peaked at $45 a share in February 2007, before the financial crisis. So an investor who held 100 shares could bank on receiving $40 for an investment that was once worth $4,500.

Shareholders did receive 0.1822 shares of Bank of America’s stock for each share of Countrywide they owned when Bank of America acquired Countrywide. That worked out to about one share for every 5.5 shares of Countrywide stock. Shares of Bank of America closed at $14.34 on Tuesday. So that same 100 shares of Countrywide would be worth about $261 today in Bank of America stock.

Add the $40 from the settlement and those shares are now worth little more than $300.

Lawyers for the pension funds are requesting $56 million, or 4 cents per share, for fees and other costs.

Investors “will be compensated for a significant portion of the legal damages that they suffered as a result of what we believe was a violation of the securities laws,” said Joel Bernstein, a lawyer for the pension funds. “They won’t be compensated for every penny of that.”

Bank of America has been trying to put Countrywide’s legal problems behind it. In June, the Charlotte, N.C.-based company agreed to pay $108 million to settle the Federal Trade Commission’s charges that Countrywide collected outsized fees from about 200,000 borrowers facing foreclosure.

It reached a settlement Monday primarily to keep legal fees from escalating, a bank spokeswoman said.

“Countrywide denies all allegations of wrongdoing and any liability under the federal securities laws,” said Shirley Norton, a spokeswoman for Bank of America. “We agreed to the settlement to avoid the additional expense and uncertainty associated with continued litigation.”

Plaintiffs attorneys have pursed lawsuits against numerous lenders and investment banks in the wake of the housing market’s devastating downturn, and the Countrywide settlement could encourage even more such cases, said Paul Hodgson, a senior research associate at The Corporate Library, an independent corporate governance research firm.

“There are a lot of suits out there waiting to get launched,” Hodgson said. “I think this is the opening of the floodgates.”

Former Countrywide CEO Angelo Mozilo, former President David Sambol, former CFO Eric Sieracki and former board members were named in the litigation but are not contributing to the settlement.

But it does not end their legal problems. More than a year ago the Securities and Exchange Commission brought civil fraud charges against Mozilo and the two other former executives. Mozilo, the most high-profile individual to face charges from the government in the aftermath of the financial crisis, has denied any wrongdoing.

For Countrywide, “This is only a chapter and not the end of the book,” said John Coffee, a securities law professor at Columbia University.

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

False and Misleading Offering Documents Detailed in Class Action Lawsuit Against Countrywide Financial

Cohen Milstein Files Amended Consolidated Complaint in Case Involving $350 Billion of Mortgage-Backed Securities

WASHINGTON, July 15 /PRNewswire/ — Cohen Milstein Sellers & Toll PLLC filed an Amended Consolidated Class Action Complaint this week in its landmark litigation against Countrywide Financial Corporation and other underwriter defendants who were prominently involved in the failure of mortgage-backed securities over the last several years.

Countrywide, since acquired by Bank of America, was one of the largest and most controversial institutions involved in mortgage-backed securities. Other defendants in the case, aside from Countrywide, several of its former top executives, and Bank of America, include 16 underwriters of more than $350 billion in Countrywide securities, among them J.P. Morgan, Deutsche Bank, Bear Stearns, UBS, Morgan Stanley, Edward Jones, Citigroup, Goldman Sachs and Credit Suisse.

Cohen Milstein is Lead Counsel for the Class and Counsel for the Lead Plaintiff, the Iowa Public Employees’ Retirement System, as well as the Oregon Public Employees’ Retirement System and Orange County Employees’ Retirement System. The General Board of Pension and Health Benefits of the United Methodist Church is also named as a plaintiff in the litigation.

“Amidst all this high finance, it’s too easy to lose sight of the fact that pension funds invested heavily in these mortgage-backed securities and so retirees are the real victims here,” commented Steve Toll, Managing Partner at Cohen Milstein and co-chair of its Securities Fraud/Investor Protection practice group.

In the amended complaint, the Plaintiffs further buttress their allegation that the defendants published false and misleading offering documents, including registration statements, prospectuses, and prospectus supplements. Specifically, these documents misrepresented or failed to disclose that underwriting guidelines for the mortgages backing the securities had been systematically disregarded.

According to the lawsuit, from 2005 through 2007 Countrywide was the nation’s largest residential mortgage lender, originating in excess of $850 billion in home loans throughout the United States in 2005 and 2006 alone. Countrywide’s ability to originate residential mortgages on such a massive scale was facilitated, in large part, by its ability to rapidly package or securitize those loans and then, through the activities of the underwriter defendants, sell them to investors as purportedly investment grade mortgage-backed securities.

In order to generate a steady flow of mortgage loans to sustain this mass production of mortgage-backed securities, Countrywide routinely issued loans to borrowers who otherwise would never have qualified for them – and indeed, did not qualify for the loans they received — through, for example, “low doc” and “no doc” loan programs, often with adjustable interest rates that had been designed for borrowers with higher incomes and better credit.

Upon pooling these mortgages and issuing them as MBS certificates, over 92% received the very highest, investment-grade ratings from rating agencies; ultimately, however, 87% were downgraded to junk. Tellingly, one year after the date of the certificate offerings, delinquency and default rates on the underlying mortgages had increased 2,525% from issuance. In explaining such an unprecedented collapse in ratings on these certificates  in 2008 and 2009, the rating agencies noted that they were forced to change their models because of previously undisclosed and systematic “aggressive underwriting” practices used to originate the mortgage loan collateral. Along with the exponential increases in delinquency and default rates of the underlying mortgages and the collapse of the certificates’ ratings, the value of the certificates plummeted.

Plaintiffs’ complaint alleges that the Defendants’ actions violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, legislation, still on the books, originally enacted in response to similar abuses that led to the Great Depression.

The Countrywide case is pending before Judge Mariana R. Pfaelzer in the U.S. District Court for the Central District of California.

Cohen Milstein has been named lead or co-lead counsel by courts in eight of the most significant mortgage-backed securities cases currently being litigated, including Lehman Brothers, Bear Stearns and Washington Mutual as well as Countrywide.

Docket No. 2:10-CV-00302

SOURCE Cohen Milstein Sellers & Toll PLLC

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Chris Lehman | July 14, 2010 | Salem, OR

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Oregon is joining a class action lawsuit against mortgage lender, Countrywide. The suit alleges Countrywide duped investors into buying securities backed by on home loans that were riskier than Countrywide represented.

The investors included the Oregon Public Employees Retirement System.

Oregon Attorney General John Kroger says it’s time for Countrywide to pay up.

John Kroger: “We bought products from Countrywide based on their false misstatements. And because of those false misstatements weíve lost $30 million. And the goal of our lawsuit it to get that money back for Oregon retirees.”

Countrywide was acquired by Bank of America in 2008. The suit names Bank of America along with nearly three dozen other financial institutions and individual executives.

The lead plaintiff in the suit is the Iowa Public Employees’ Retirement System.

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

It is gratifying to see state officials taking a proactive stance. As comptroller, Mr. Liu should consider the details, however. The fact remains that modifications are largely a sham. The only lender of record is the usually the originating lender. The parties charged with modification have little or nothing to say or do about modifications.

What is necessary is for Mr. Liu and other officials to study this issue and perhaps read the Big Short by Lewis. Until they realize that this can never be as simple as they want it to be, and that the mortgage mess is a train wreck still in process, it will be impossible to have meaningful modifications of mortgage in which the investors are protected to the maximum possible extent and the homeowners are protected as well. Principal reduction is only a bad thing from the prospective of the intermediaries who actually have been receiving all the money but actually have no financial interest in these mortgages.

From the prospective of those who actually have money at risk that was advanced for the funding of loans principal reduction is the answer for them as well as the borrowers. It is only when the investors step in directly and settle these mortgages that they will get anywhere near what is needed to mitigate their losses. Leaving it to the intermediaries who cheated them in the first place, is only allowing the the diversion of funds and the distracting misapplication of funds and documents to the detriment of the investor-lenders.

New York Presses Banks on Foreclosures

By STEVEN GREENHOUSE

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Bank of America had disclosed in a March 31 financial filing that “certain sales of agency mortgage-backed securities should have been recorded as secured borrowings rather than sales,” bank spokesman Jerry Dubrowski said. “The handful of transactions did not have a material impact on the company’s balance sheet or earnings. They need to be viewed in the context of our $2.3 trillion balance sheet.”

It sounds so benign, doesn’t it? What this means is that BofA was, as we all have been saying for years now, trading interests in mortgage backed securities (i.e., indirect or derived interests in the actual loans) for other mortgage backed securities. The real intent was to distance themselves from the original transactions. Who were they trading with? In all probability one of the other banks that wanted to do the same thing. Bottom Line: You can ONLY state with certainty that a pool exists that CLAIMS ownership of the loan and that the owners were at that point in time the investors who created the pool of money that was used to fund mortgages, along with enormous profits and fees that were both unearned and unreported. The current owners of the actual receivables from the loan payments, the receivables from insurance, credit defaults swaps etc., cannot be known without discovery or compliance with the QWR. These trades are not on any exchange where you can go look them up. They are secret.

And that is why the note, assignment and indorsements don’t show up until moments before a hearing. It is because they never existed up until that moment. And often the note is a color printout rather than the original. Look at the other side of the paper to see if there are any indentations. In plain language they said they were transferring the loan but never did. So if you have a performing loan, you’ll wait forever to see an assignment because they don’t want to create it, until some final resting place is required. They are keeping their options open until they MUST show the chain of ownership.

Bank of America Says $10.7 Billion of Trades Wrongly Classified

By David Mildenberg and Dakin Campbell – Jul 10, 2010

Bank of America Corp., the largest U.S. bank by assets, said it wrongly classified as much as $10.7 billion of short-term repurchase and lending transactions as sales from 2007 to 2009 to reduce its end-of-quarter assets.

Bank of America said the inaccuracies aren’t material and “don’t stem from any intentional misstatement of the Corporation’s financial statements and was not related to any fraud or deliberate error,” according to a May 13 letter released yesterday from the U.S. Securities and Exchange Commission.

“A $10.7 billion accounting error would be a material event for about 99.9 percent” of U.S. banks, said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University School of Law. “It’s hard to see how the SEC can accept BofA’s rejoinder as being sufficient.”

SEC spokesman John Nester declined to comment.

The SEC sent letters to finance chiefs at about two dozen firms in March asking whether they employed accounting strategies like those at Lehman Brothers Holdings Inc. The bankrupt securities firm was accused of using repurchase agreements called Repo 105s to move assets off its balance sheet to hide leverage, thereby improving its capital ratios.

$2.3 Trillion

Bank of America had disclosed in a March 31 financial filing that “certain sales of agency mortgage-backed securities should have been recorded as secured borrowings rather than sales,” bank spokesman Jerry Dubrowski said. “The handful of transactions did not have a material impact on the company’s balance sheet or earnings. They need to be viewed in the context of our $2.3 trillion balance sheet.”

In April, the SEC asked Bank of America to disclose whether its transactions were intentionally mislabeled, and to prove that the trades were immaterial. The Charlotte, North Carolina- based bank said in an April 13 letter that it stopped the transactions after the first quarter of 2009, the SEC said.

The Bank of America transactions involved six so-called dollar-roll trades completed during 2007, 2008 and 2009. The amount of the trades represented 0.1 percent of total assets in the December 2008 quarter and improved the company’s Tier 1 capital leverage ratio by one basis point, or one-hundredth of a percentage point, during the September 2008 quarter, the bank said.

Bank Review

The bank said in its May 13 letter it did an “extensive review” of repurchase agreements and similar transactions and didn’t find more errors. The mistakes didn’t affect credit ratings or management compensation, hide any failure to meet analysts’ consensus estimates, “mask” other trends or put the bank out of compliance with loan and capital requirements, the bank said.

Bank of America was led by Chief Executive Officer Kenneth D. Lewis from 2001 through the end of 2009, when he retired and was succeeded by Brian Moynihan. In January, Moynihan moved Joe Price, the chief financial officer since January 2007, to run the company’s consumer banking unit. In May, the bank hired former Northrup Grumman Corp. executive Charles Noski as CFO.

The bank transferred mortgage-backed securities to a trading partner with the idea of receiving different securities later and classifying the deals as sales, the Wall Street Journal reported yesterday. The securities the bank received were similar to those it got rid of, meaning the transactions can’t be considered sales, the newspaper said.

To contact the reporters on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net David Mildenberg in Charlotte at dmildenberg@bloomberg.net

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

I’ll tell you what… there are times in life when you’ve just got to love Texas. People in Texas just don’t like getting misled, lied to, pushed around, and generally abused, so it’s not a great place for banks to do what banks do.  But apparently, Bank of America is just as abusive to the homeowners in Texas as they are to the homeowners in the other 49 states, and they’re being treated to a little Texas hospitality as a result.

The Texas Housing Justice League and 15 Texas homeowners have filed suit against Bank of America N.A. and its subsidiary, BAC Home Loans Servicing, alleging abusive servicing practices.  I’m not saying that homeowners in other states aren’t just as upset about being abused by the banks, but it’s the homeowners in Texas that aren’t just complaining, they’ve banded together to file the suit, and I’m guessing that not only is this going to be interesting, but it’s probably only the beginning of these types of actions.

I’ve said it before, I’ve even told bankers before… the banks may have taken an early lead against homeowners in this crisis, and they may think they’re winning, but in this country, if you push people far enough, they’re going to fight back.  And in the long run, Americans have a long history of coming out on top, as in… would you like a torch or a pitchfork?

The lawsuit, filed in US District Court, Southern District of Texas, Victoria Division, describes:

“… a systematic home loan servicing scheme that includes hours of telephone runaround, misleading and inconsistent information, lost correspondence, verbal abuse, and extensive delay, all of which have documented costs not only in terms of money, but in health. The facts in this case reveal the harsh reality that underlies the loan servicer’s press statements about loan modifications and forbearance agreements following collapse of the U.S. housing market.”

Yeah, that sounds about right.  I’d recognize Bank of America anywhere.

I’m no lawyer, but is Bank of America going to dispute these allegations, or just stipulate to them and go from there?  Because I would think even the judge would have to suppress the urge to snicker if the Bank of America lawyer started out by saying the bank didn’t do what the homeowners are alleging.

As in: “It’s not true, your honor.”  HAHAHAHAHAHAHAHA… “Order in the court, this court will come to order.”  Isn’t that about how that would go?

Here are some of the highlights from the complaint:

“Many of the Plaintiffs were told that they were eligible for loan modifications or other workout assistance, only to spend months being shuffled through Defendant BAC’s “Home Retention,” “HOPE”, “Foreclosure,” “Bankruptcy” and “Collections” departments with no resolution.”

Okay, so that’s standard operating procedure at Bank of America, right?  I mean, they probably have a manual that describes that runaround, wouldn’t you think?

“Others simply wanted to know that they had been reviewed accurately for eligibility in any available programs, that a denial of assistance was final, and that their arrearage had been correctly calculated. Instead of providing Plaintiffs with basic information about the servicing of their loans and providing timely screenings for workout assistance, however, Defendant BAC misrepresented material information to the Plaintiffs about their loans, and forced them into a scheme of operation so dysfunctional that the constant barrage of misinformation, misdirection, and deliberate inactivity amounted to abuse and harassment.”

“Plaintiffs describe feeling “harassed,” “like a yo-yo,” and “blocked at every turn.”

Are you loving this as much as I am?  A yo-yo, huh?  I like it… I might have used a different metaphor, but I suppose in court you can’t just say what you’d want to say.

“When Plaintiffs called Defendant BAC the information they received over the telephone often conflicted with written statements or prior telephone conversations. In many of the telephone calls Defendant BAC spun Plaintiffs in a labyrinth of transfers from one department to another and back again. Plaintiffs spent hundreds of hours on the telephone, explaining their stories to a different person each time they called; often they were transferred between departments, knowing they would never speak to the same person again, and wondering if the information being provided would be contradicted by the next person they spoke with. Often, it was.”

Oh my God, I wish I made money at this, because I’d love to be able to go to Texas and watch this case proceed in person.  It’s going to be one for the books, that’s for sure.  I’m thinking there would have to be some stand up and cheer moments.  And I wonder how much trouble I’d get in for throwing rotten tomatoes at Bank of America’s lawyer in the parking lot.  I know, so immature, but guess what?  I know you are, but what am I?

What’s interesting about this case is that they’re using RESPA, the Real Estate Settlement and Procedures Act, as the basis for the complaint.  As in…

RESPA Count: Part A

Plaintiffs each sent Defendant BAC written applications for a loan modification, including a hardship affidavit, and written submissions of financial information that were “qualified written requests” within the meaning of RESPA, in that Plaintiffs sought information about their eligibility for a loan modification or other methods to minimize their losses.

The complaint also describes how special it is to call Bank of America on the phone.

“Requests to speak with supervisors or managers were met with resistance. During the course of telephone calls to Defendant BAC, Plaintiffs often found themselves disconnected after waiting on hold to speak to a supervisor, or were told that no supervisors were available. Some Plaintiffs sought out face-to-face interviews by contacting Bank of America branch offices, but simply found themselves on speakerphones with the same unaccountable departments that had previously been providing them with misinformation by telephone.”

Well, wait a minute… maybe they should have tried communicating with Bank of America in writing, instead of just by phone.  Could be… right?  Maybe they just don’t have good phone skills.

“Written communications did not fare better. Plaintiffs’ written submissions were often lost or misplaced.  Plaintiffs were asked to sign the same documents three, four or even five times, and were asked to provide the same information repeatedly. Many of the Plaintiffs were assigned multiple “negotiators” who would not return telephone calls, or provide timely information to Plaintiffs.”

Oh well, I guess not.  So, maybe Bank of America is hoping that the judge will think that it’s all just an isolated incident, and that it’s not something that happens to everyone.

“Plaintiffs’ experiences are not isolated incidents, but instead reveal a pattern and practice by Defendant BAC of deliberately misinforming borrowers in default or at risk of default, and refusing to respond to Plaintiffs’ legitimate, written and oral requests for information.”

Whoops… I guess that’s not going to be an easy case to make either.  So, what about the damages?

Damages

Plaintiffs suffered damages including, but not limited to loss of credit, foreclosure, emotional harm, embarrassment and humiliation.  Plaintiffs’ damages were proximately caused by Defendant BAC’s noncompliance with the requirements of the mortgage servicer provisions of RESPA.

Defendant BAC has engaged in a pattern and practice of non-compliance with the requirements of the mortgage servicer provisions of RESPA, and Plaintiffs seek $1,000 in statutory damages per violation.

Plaintiffs seek attorney fees under 12 U.S.C. § 2605(f)(3).

So, anyway… there’s of course a lot more involved and I’m not going to include it all in this article, or it will be longer than my usual articles, and that would make it REALLY LONG, I realize.  Here are the other Counts listed in the complaint, but I’ll provide a link at the bottom to the actual complaint, so the attorneys reading this can dive right in to the details.  But here’s the overview:

Count Two: Breach of Contract – Loan Modification Agreement

Count Three: Breach of Contract – Forbearance Agreement

Count Four: Breach of Contract-Promissory Note and Deed of Trust

Count Five: Violation of the Texas Property Code

Count Six: Breach of Oral Contract-HAMP Trial Modification

Count Seven: Unreasonable Collection Efforts

Count Eight: Intentional Misrepresentation

Count Nine: Texas Debt Collection Act

Here’s how the complaint wraps up, with that wonderful Request for Relief section that always asks for the order, as they say in the sales biz.  And this one’s a good read.

REQUEST FOR RELIEF

A home is uniquely valuable. It is the largest investment many low income Texans will make in their lifetimes, and provides one of the few opportunities for low income Texans to build wealth. But a home is also where many of the Plaintiffs and other low income Texans raise their children and accumulate their memories. Misrepresentations that jeopardize a borrower’s home are unconscionable and the damage is irreparable. Defendant BAC’s misrepresentations to borrowers are systemic in nature and widespread in practice. Plaintiffs therefore ask that this court:

(1) Enter a temporary and permanent injunction that Defendant BAC, including its agents employees and contractors, refrain from practices, policies, and plans that result in or increase Defendants’ misrepresentations, errors, falsehoods, barriers to timely, accurate communication with Plaintiffs which are identified by the Court through the course of this litigation;

(2) Award each individual Plaintiff their actual, statutory, and exemplary damages;

(3) Award Plaintiffs their costs and attorney fees; and

(4) Grant such other relief as Court finds necessary and just.

Here’s a link to the actual complaint: 15 Texas Homeowners v. Bank of America.

Although for lawyers, I’m sure I’m stating the obvious, but for others… RESPA is a federal statute so I would think that this sort of thing could be happening all over the place… like in all 50 states.  And it’s also worth mentioning that what Bank of America is accused of here, is every bit as true for Chase, Wells, One West, US Bank, Aurora, Saxon… are you feeling me here?  Come on, multiply the number of banks and servicers times fifty states, and before you know it we could be having a national block party… I’ll bring the beer.

So, let’s all keep an eye on this, okay?  And not throw in the towel just yet.  There’s a lot going on around this country related to the foreclosure crisis.  We’re in a river, not a lake… the water we’re standing in today, won’t be the same water we’ll stand in tomorrow.

We have to win this eventually, we just have to.  We cannot just let this country deteriorate into a depressed land of inequality, lacking in opportunity, rife with corruption, besieged by poverty and dominated by a small oligarchy of immensely wealthy bankers and corporate executives who drive our elected officials like slaves.  Think that’s too dramatic?  Do you?  Which part, specifically?

We cannot lose this.  I have a daughter.

Click here to read the complete story at Mandelman Matters.

On Thursday, June 21, 2010, the House Committee on Oversight and Government Reform held a hearing they called: “Foreclosure Prevention, Part II: Are Loan Servicers Honoring Their Commitments to Help Preserve Homeownership?” The committee was supposed to be investigating the overall effectiveness of the processes put in place by loan servicers as related to the implementation of the administration’s Home Affordable Modification Program (“HAMP”) and any other loan modification programs designed to help homeowners avoid foreclosures.

Here is the list of people the committee brought in to testify:

Mr. Sanjiv Das, Chief Executive Officer, CitiMortgage, Inc.

Ms. Barbara J. Desoer, President, Bank of America Home Loans

Mr. David Friedman, President and CEO, American Home Mortgage Servicing, Inc.

Mr. Michael Heid, Co-President, Wells Fargo Home Mortgage, Wells Fargo & Co.

Mr. David Lowman, Chief Executive Officer, Chase Home Finance, Inc.

Mr. Edward J. Pinto, Consultant

Okay, so if you click that link above, where the type is blue, it will take you to the House Committee’s Website, and you can read everyone’s testimony there, however, because I both know and like my readers very much for the most part, I want to be clear that I don’t recommend it.  I read all of them, and I’m pretty sure I’m going to have gastro-intestinal problems for the rest of the week as a result.  Yeah, I know, you found that funny, but you’re not the one who just washed down a Zantac 150 with a tall glass of straight bourbon.

Want me to cut to the chase, no pun intended?  Go straight to the bottom-line?  Okay, I will.

Everything’s going just fine.  There are no real problems with HAMP or with the servicers who are implementing HAMP.  Oh sure, there have been a few challenges, but most of them have been caused by the borrowers who just can’t seem to do a Gad damn thing right.  Leave it to a borrower to be unable to send in the right paperwork six or seven times, unwilling to wait on hold for 4.5 hours in order to be disconnected, and unable to prove their income with anything but paycheck stubs, financial statements, and tax returns.

Clearly, all you have to do is read the testimony of those very credible bankers and it’s homeowners that are the problem here… they’re the ones that caused this whole economic collapse in the first place, and then when the Obama Administration went out of its way to come up with a program to save these poor saps from foreclosure, wouldn’t you know it… the homeowners screw it all up just like they’ve screwed up everything else in their paltry, unremarkable lives.

Honestly, after reading what the bankers testified to, I don’t know why I even talk to you people… you homeowners.  Losers!  If you guys would stop making a mess of HAMP and just let the banks take control, they could modify your loan and preserve home ownership in this country in no time at all, we can all see that very clearly now.  Why do you homeowners insist on being such an impediment to the President’s program’s success?  You just want Obama to fail, don’t you?  You must all be Republicans.

Just look at a few of the things that Mr. David Lowman, the Chief Executive Officer of Chase Home Finance had to say:

“CHASE has consistently been among the leaders in implementing HAMP and other modification solutions for homeowners.”

Well, that’s certainly true, right?  I don’t think there’s any question about that.  CHASE has definitely been “among the leaders.”  Every time you see the leaders hanging out, look left or right and there’s CHASE.  Got to give it to them there.  Point taken.  Move on.

“CHASE has handled over 18 million inbound calls to our call centers from homeowners seeking foreclosure prevention assistance in 2009 and through May 2010, including 3.8 million calls to our dedicated customer hotline for modification inquiries.”

People, look… that’s a lot of phone calls.  I’d like to see a homeowner handle that many phone calls.  Let’s give credit where credit is… you know, that may not be such a useful expression going forward.  Just thinking out loud over here.

“Mailed over two million letters to invite Chase customers to discuss their situation or help them complete their HAMP documents.”

Oh my Lord… now I did not know this, did you?  They mailed over two million letters to CHASE customers inviting them to come discuss things?  That’s a lot of work all by itself.  Don’t scoff… do you know how many envelopes their employees must have had to lick?  Yuck!

“Hosted and participated in more than 711 homeowner events in 2009 and through May 2010 to educate and inform homeowners about the loan modification process and assist in the completion of required documents.”

For heaven’s sake… how much “hosting and participating” can one bank be expected to do over two years.  I know my wife and I can only handle attending one or two Bar Mitzvahs a year and we’re burned out.  I can only imagine what it’s like to be constantly hosting and participating, hosting and participating.

And why do they do it?  To educate and inform stupid homeowners about the process and how to complete the required documents, and obviously we’ve got some remedial learners owning homes in this country, because they haven’t learned a damn thing, it seems.

“CHASE is committed to keeping families in their homes”

What more do you want… blood?  They’re committed, homeowners.  Committed to keeping your dumb, broke families in their shoddy little homes… that you shouldn’t have been allowed to buy in the first place.  How many favors can JPMorgan CHASE do for you people?

“At CHASE we are working very hard to help families meet their mortgage obligations and keep them in their homes by making their home payments affordable. As a national leader in foreclosure prevention, we have continued to expand upon and improve our programs to keep families in their homes.”

Well, I just don’t know what else Mr. Lowman could say.  Here you have a company working not just hard, but VERY HARD to help families meet their obligations by making their payments affordable.  And you’re complaining?  Don’t you think all you homeowners are being just a tad ungrateful here?

I mean, really… this is the testimony of a very busy man.  He didn’t have to come testify, he could have just said he got fogged in, or whatever.  He’s running a national leader in foreclosure prevention, and he’s busy expanding and improving in order to keep people in their homes.  So, do you think you could stop being so critical, and let him get back to expanding and improving?

“We have made solid progress in offering HAMP trial plans to about 257,000 homeowners and have over 87,000 homeowners in active HAMP trial plans through May 2010. We are now working very hard to convert homeowners to permanent HAMP modifications and have successfully converted about 48,000 homeowners, but – like other servicers – we have faced challenges in getting documentation required from borrowers to complete the modification.”

See, stupid homeowners.  It’s your fault.  I mean, according to CHASE’s published figures, CHASE offered 846,542 loan modifications since the beginning of 2009.  And here we are, only 18 months later, and they’ve made solid progress, with about 48,000 permanent HAMP modifications on the scoreboard.  Hey, when you think about the challenges of dealing with stupid homeowners who can’t spell documentation, that’s pretty darn good, I think.

I mean, it’s not like they’ve only permanently modified like five percent of the total.  That would suck.  Not my CHASE, baby… they’ve modified 5.6% of the total, so the gloating lamp is lit, ladies and gentlemen.  Hey CHASE… you go girl.

“Launched a program for discounted sales and donations of foreclosed properties, through which we have completed over 700 transactions with 182 non profit agencies in 30 states.”

Had you heard about this?  I hadn’t heard about this.  These guys are just overachievers.  On top of having all those homeowners throwing challenges in their way as far as modifying loans goes, CHASE had time to launch a program for discounted sales, and for donations of foreclosed properties?  And they did 700 transactions?

You mean to tell me that there have been 700 people in this country that donated their foreclosed properties to non-profits in 30 states?  They didn’t want to reduce the principal for the people living there?  They’d prefer to take it back and then donate it to a nonprofit?  Wow.  I’m getting all teary eyed over here.  Really makes me proud to be an American.

(Side Note: Someone find me one of these pieces of garbage that refused to write down the loan’s principal for the homeowner, foreclosed, and then gave the house away to some non-profit… and I will fly there and beat the crap out of whoever it is.  Think I’m kidding… go ahead, find me the person who did that and we’ll see who’s kidding.)

“Based on the actual re-performance of permanent modifications completed by Chase, payment reduction appears to be the primary driver of post modification re-performance.”

See, and they’re learning stuff at CHASE too.  They studied it for a couple of years and they’ve come to the conclusion that when it comes to modified loans, payment reduction APPEARS to be “the primary driver of post modification re-performance”.  They can’t be sure, of course, and no one would expect them to be.  But, at this point in the game… it looks like if you lower the payment, damn if those stupid, broke, irresponsible homeowners don’t appear to actually make their payments.  Who would have ever thunk it?  Go figure.

You see… the first year they did modifications, 60% of them made the payments go up, but then… and quite surprisingly, I might add… 60% of those modifications re-defaulted a year later.  For a while it was a real mystery, but then those innovative and inquiring minds at JPMorgan CHASE did some hard ciphering and came up with an idea: let’s lower the payments and see what happens then.  Of course, there was a lot of disagreement in the boardroom, but to their credit they took the chance and by golly… it APPEARS to have worked.

“2MP – CHASE was one of the first major servicers to initiate the Treasury Department’s Second Lien Modification Program (2MP), which we began in May 2010. 2MP is a systematic approach to modifying all second liens where the underlying first lien has been modified under HAMP.”

Well, technically speaking, I don’t believe that any second liens have actually been modified under the 2MP program, but hey… at least CHASE was one of the first major servicers to participate.  That’s something.

“There are many reasons borrowers face affordability issues.  In our experience, the number one reason is a recession-driven decline in income, whether it is a spouse losing a job, fewer hours at work, underemployment, or finding a new job that pays less than the previous one.  Data from the Federal Housing Finance Agency suggest that 75% of mortgage defaults nationwide are caused by issues of affordability: borrowers default when a life event (or cumulative life events) causes them not to be able to pay their mortgage with income and savings.”

See, there’s more of that learning happening again.  75% of mortgage defaults are caused by issues of affordability… so, borrowers default when they can’t pay!  Good for you guys at CHASE!  And the number one reason is “a recession driven decline in income”.  Very good, as well!

And what was it that caused the worst recession in 70 years… the sharpest and deepest downturn in our economy since the Great Depression?  Come on… you can do it… it was the incomprehensibly greedy and entirely unregulated asshats like you guys at JPMorgan CHASE!  Yay!  Very, very good!  It’s the circle of life, Simba.

The only difference is, that when you guys went bankrupt, you bankrupted the entire global financial system and our government was so scared that we couldn’t live without you that you all got bailed out 100 pennies on every dollar.  Even better that that… you got huge bonuses for being the biggest crooks and failures in the history of the world.  And in fact, you guys at CHASE are still feeding at the taxpayer’s teat, aren’t you?  Why yes you are.  I know you are because my nipples are still sore.

Look, I could go on and reprint the testimony of the woman from Bunk of America… she complains a lot about how difficult it was to integrate all those messy Countrywide loans into BofA’s system.  After that, however, she goes on to say pretty much the same unadulterated crap that Davey Lowman said above… so why bother.  You can read it for yourself… just scroll back up and click the link, and then scroll down and you’ll see transcripts of each of their testimonies, and I use that term very loosely.

There was one person testifying at the hearing though, that wasn’t a clone of the others, and his name is Edward J. Pinto.  I’ve actually emailed back and forth with Mr. Pinto, mostly because of his response to my calling him a jackass, or possibly a moron in one of my past articles.  It seems that he didn’t like my calling him whatever I called him, and said that I shouldn’t call him those things because he’d been doing his research into HAMP “pro bono,” which means free, if you went to college, or are visiting from ancient Rome.

I didn’t understand his reasoning at the time, to tell you the truth, unless by “pro bono” he actually meant “okay to be sloppy and ill informed”.  For a couple years, Pinto was the Chief Credit Officer for the now entirely bankrupt, and by that I mean both morally and fiscally, Fannie Mae, where perhaps he also worked “pro bono”.  For the record, I was Pro Bono years ago when I lived out in the Palm Springs area.  But then Sonny died in a skiing accident and so I became Pro Bono’s wife.  And no, I’m not sorry about that… it’s late.

I do have to say that Mr. Pinto, in many ways, redeemed himself in my eyes with his testimony, meaning that it was at least much more honest and wasn’t totally insipid and inane.  Speaking about HAMP he did make the following statements:

“The truth is HAMP has been a spectacular failure when measured against the original goal of helping 3-4 million homeowners avoid foreclosure.”

He also pointed out Treasury’s propensity for “applying a rosy gloss,” by showing that the May HAMP report stated:

“Most homeowners in canceled trials became current on mortgage payments or enter an alternative modification.”

But according to Mr. Pinto, and I’m confident that his numbers are right this time:

“It turns out that of the 194,000 canceled trial modifications with a disposition path, only 19,000 or 9.8% were current. Not quite as reassuring as Treasury’s statement.  It turns out that some 95,000 or about 50% are in “alternative modification”.

Now, will you lookie at that.  I believe what you have right there is the Treasury Department lying its ass off… again.  Yoohoo… Mr. Geithner… why can’t you ever tell the truth about anything?  It makes me sad.  You make me miss our ex-Attorney Generral, Alberto “I-can’t-recall” Gonzales.

Then Pinto does it again, but right at the end he made me spit my coffee all over my desk.  He said:

“The Treasury Department also promised “clear and consistent loan modification guidelines that the entire mortgage industry can use.  There are only two words to describe HAMP’s guidelines: numbing complexity.  At last count HAMP had 800 requirements and servicers are expected to certify compliance.  With ever changing regulations, a constant need to re-evaluate past decisions in light of new regulations, and multiple appeals, it is no wonder that the HAMP pipeline became clogged through no substantial fault of servicers.”

At no fault of whom, Mr. Pinto?  No fault of servicers?  Why did you have to go and say something like that?  I was being nice… was going to be nice to you through the whole article.  And then you have to go running off at the mouth saying it wasn’t the fault of servicers.  Okay dumbass… I want to know how many street level modifications you’ve seen up close.  How many homeowners have you spoken with, and how many hours have you sat on hold waiting for Bank of America to answer the damn phone.  BofA has 44 million credit card holders and they manage to answer those phone calls.

He even cites the GAO as proof that what he was saying was right:

The GAO observed: “Servicers faced challenges implementing HAMP because of the number of changes to the program, some of which have required servicers to readjust their business practices, update their systems, and retrain staff.”

Oh, so what Ed.  The crisis has been going on three years, and we’ve given the banks and servicers a blank check to help them with their many “challenges”.  It was like… when I was reading the Bank of America woman whine about Countrywide integration, I wanted to throw up, or smack her hand with a ruler.  You bought Countrywide for $4 billion, as I remember it, Ms. President, or at least that moron Kenny Lewis did, so deal with it.  Nobody forced you to buy it, although we realize that your bank was pretty easy to talk into anything.  The point is, we’ve got something north of $100 billion into your insolvent bank, so go borrow a trillion at 0% and fix it, whatever it is.

Pinto also blames the failure of HAMP for creating strategic defaults, but even though I’d like to blame just about anything on HAMP, and the Obama Administration’s stupidity and insensitivity in allowing it to go on this long, I don’t know if you can blame HAMP for strategic defaults.  I think strategic defaults are caused purely by homeowners with above average intelligence, actually using their noggins.  They walk away because they should walk away.

And I know, Fannie wants to punish them by not letting them buy another home with a Fannie Mae loan for seven years, but besides the fact that no one cares about threats made by a bankrupt mortgage company that won’t even be around in seven years… in fact I’d be shocked it Fannie was still around next year or the year after at this time.  And who are they going to sue… and how will they prove what happened?  Nope, Fannie is just another barking dog trying to intimidate American homeowners, after being a big part of the problem in the first place.

I’ll tell you one thing their threat did for me… it made me want to strategically default, and since our homes that had appraised for $925,000 in 2005, just had a neighbor short sale sell for $360,000, I very well may just get my chance.  I’m so looking forward to it.  I’m thinking about blogging and Twittering all about it as it unfolds.  What fun, don’t you think Fannie Mae?

Lastly, Herb Allison, the man from Treasury that simply cannot keep his mouth shut, had to weigh in with his “everything is going according to plan” speech.  Yes, it’s Mr. Herb Allison, another past focus of mine.  If you believe anything Herb says, and I’m pretty sure no one does, then HAMP wasn’t supposed to help 3-4 million homeowners avoid foreclosure.  Are you sitting down, because this is going to give you Exedrin Headache #22.

You might remember me writing about Herb Allison’s testimony from March 25, 2010, but click that link and you can relive how distorted a human being’s though process can become.

“At the time we launched HAMP in March 2009, President Obama said that the program would “enable as many as 3 to 4 million homeowners to modify the terms of their mortgages.”

“The President’s statement about ‘enabling’ modifications is the reason that we have continued to report offers of trial modifications – the offer is when a homeowner is able to get a modification, and 1.4 million offers have been extended in the first twelve months.”

“A very similar picture of progress arises from the number of actual trial modifications begun, over 1.1 million in twelve months. Actual trial modifications are the point at which homeowners begin a lower mortgage payment — an average reduction of around $500 per month.”

“In a program scheduled to last nearly four years (March 2009 until the end of 2012), either the 1.1 million or 1.4 million in the first year places the program well on schedule to the goal announced by President Obama.”

“The Administration has never said that the program would implement 3 to 4 million permanent modifications, which take place only after the homeowner has been offered a trial modification, has performed for at least three months in a trial modification, and has met the full documentation requirements for the permanent modification.

One important reason for having permanent modifications in the first place was a recognition that not all trial modifications would become permanent, such as when a borrower does not make the three payments needed to receive a permanent modification.

Herb, Herb, Herb… no you didn’t.  You did not just say that when President Obama said that HAMP would help 3-4 million homeowners by modifying their mortgages, he wasn’t talking about “PERMANENT” modifications, he was talking about trial modifications?  Herb, do you understand that even the “permanent modifications,” offered under HAMP are really only lowered for five years, after which time the interest rates do go up again?  So, even HAMP’s permanent modifications are only temporary, Herb.  And now you’re saying that Obama only meant 3-4 million trial modifications?  You are a jackass, Herb.

When you get home after work does your dog bark at you?  It’s because he doesn’t trust you, Herb.

So, you see everybody… everything’s going just great with HAMP and the whole foreclosure thing.  Stop being such Gloomy Gus’s, or Downer Dan’s… We held a hearing and the bankers said everything is fine… it was even on C-Span.  One crazy guy named Pinto made some points but obviously there’s nothing to worry about.

And there’s no way that 20 million foreclosures, trillions in evaporated equity, near 20% unemployment and a basket of insolvent financial institutions could ever turn into another Great Depression.  We’re fine I tell you… there’s nothing to fix here.  What foreclosure crisis?  I don’t see any foreclosure crisis.  And don’t worry… I’m sure Congress will check with the bankers in a few months if they’re unsure how things are going.

I guess I’m going to have to find something else to write about.  Bummer.

In a related story, I understand that the Gulf of Mexico is actually doing very well also.  Yes, it’s true… people are swimming in it again.  Apparently our guys in Congress asked the oil barons and they said…

Click here to read the complete story at Mandelman Matters.

Notice of Appeal Filed – Stay of Court Order to Vacate Injunction
Stopping Bank of America Foreclosures in Utah Requested
by Morgan Skinner, KCSG News1 day 14 hrs ago | 511 views | 0  | 8  |  |
10th Circuit Court, Denver (USC/photo)slideshow (St. George, UT) – A
Notice of Appeal to Federal Judge Clark Waddoups court order vacating
an Injunction against Bank of America and its subsidiary ReconTrust
Company halting all foreclosures in Utah was filed Friday, June 25,
2010 by St. George attorney John Christian Barlow.

Barlow told KCSG News he was “troubled by Court ruling but unrelenting
in pursuit of redress for his client (Cox) and other homeowners who
have become victims of mortgage lending gone mad.” Barlow said he has
motioned the court to allow Cox’s complaint to include a “Class of
Citizens” currently in foreclosure in Utah. Barlow contends his
client’s rights to remedies were taken away from her by a faceless
lender who continues to overwhelm homeowners and the judicial system
with motions and petitions as a remedy instead of making a good-faith
effort in face-to-face negotiations to help homeowners as the Utah
legislature intended. The David and Goliath legal battle over federal
versus states-citizens rights is headed to the 10th Circuit Court.

Judge Waddoups’ Memorandum of Explanation in support of vacating a
statewide Preliminary Injunction halting all foreclosures by the Bank
of America only served to raise more questions.

Some of the questions include:

1.) Why is the judge’s ruling at variance with his previous rulings
this year as noted in a Letter to Judge Waddoups submitted to the
court June 10th, 2010 by the Plaintiff’s counsel John Christian
Barlow, Esq. and E. Craig Smay, Esq. and posted June 21, 2010 in the
court docket, after the Ruling and Memorandum of Explanation.

2.) Why did Judge Waddoups essentially brush aside the Plaintiff’s
pleading that included the Supreme Court decision Cuomo vs. Clearing
House Association in which the Court said…“If a State chooses to
pursue enforcement of its laws in court, its targets are protected by
discovery and procedural rules” meaning a state has a right to enforce
its own laws against national banks.

3.) Why hasn’t Judge Waddoups recused himself from all Bank of America
or ReconTrust Company related cases since he was a senior partner in
the law firm Parr, Waddoups, Brown, Gee & Loveless now Parr, Brown,
Gee & Loveless that represented the Bank of America in Utah Fourth
District Court, Case No. 070402786 before he took the bench. And, the
law firm continues to represent the Bank of America and its
subsidiaries. According to the Code of Conduct for US Judges, a judge
should recuse himself when there may be a conflict of interest.

4.) Why shouldn’t Judge Waddoups recuse himself from any case in which
his old law firm represents either the plaintiff or the defendant
until he takes full distribution of his retirement fund with the law
firm as disclosed in Judge Waddoups most recent Financial Disclosure
Statement that shows he only took a partial distribution of his
retirement from the firm’s 401K

“Bank of America acquired the bankrupt Countrywide Home Loan portfolio
in a stock deal June 3, 2009. And, according to the ReconTrust
website, the Bank of America has over 1113 Utah homeowners in
foreclosure this month, and the numbers keep growing,” Barlow said.

The second part of the Plaintiff’s complaint has yet to be addressed.
It alleges neither the lender, nor MERS*, nor Bank of America, nor any
other Defendant, has any remaining interest in the mortgage promissory
note. The note was bundled with other notes and sold as
mortgage-backed securities or otherwise assigned and split from the
Trust Deed. Barlow said he has begun a quiet title action and expects
the court to adjudicate it according to the facts of evidence which
will clearly demonstrate lenders bundling notes into securities and
trading in the financial markets have created the underlying
homeowner’s mortgage nightmare.

*MERS(Mortgage Electronic Registration System) is a process designed
to simplify the way mortgage ownership and servicing rights are
originated, sold and tracked created by the real estate finance
industry. MERS eliminates the need to prepare and record assignments
when trading residential and commercial mortgage loans as securities.

Read more: KCSG Television – Notice of Appeal Filed and Stay of Court
Order Vacating Injunction Stopping Bank of America Foreclosures in
Utah Requested

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

Today, June 21, 2010, 31 minutes ago | Foreclosure Fraud “Indeed, it appears as though many loans and other mortgage-related assets have been double and even triple-pledged to various constituencies“

6 21 10-Freddie-Objection-to-Boa-in-Re-Taylor-Bean-amp-Whitaker-Mortgage-Corp1

6 21 10 Boa-Answer-to-Freddie-Objection-in-Re-Taylor-Bean-amp-Whitaker-Mortgage-Corp1

By Nye Lavalle

In my 1999 21st Century Loan Sharks Report, I coined and defined the term “Predatory Mortgage Securitization” (see

http://en.wikipedia.org/wiki/Predatory_mortgage_securitization)  in my report from MY PERSONAL RESEARCH AND ANALYSIS I DEFINED SOME THE FOLLOWING PRACTICES THAT DEFINED Predatory Mortgage Securitization….

Securitizations that are termed and classified as “whole loan” and “true” sales “without recourse” that are really financing mechanisms with undocumented side deals and agreements for recourse which may not be able to be classified as investments in real estate and may have tax and reporting consequences for purchasers; Stamping, filing and recording loan and mortgage instruments that indicate loan was sold “without recourse” when in fact there were recourse provisions; Failing to record in country records the true and real ownership, assignment and endorsements of promissory notes, deeds and other mortgage documents which were part of sale, assignment or transfer; Knowingly accepting via computer tapes the principal balances of loans offered for securitization when the servicers, investment bank or securitizer has knowledge that problems or potential fraud existed in the servicing operation of the bank, servicer, broker originating, selling, assigning or transferring the loan; Knowingly accepting via computer tapes the principal balances of loans offered for securitization when the servicers, investment bank or securitizer has knowledge that problems or potential fraud existed in the servicing operation of the bank, servicer, broker originating, selling, assigning or transferring the loan and the new owners, servicer and assignee securitizing the loan pool does not possess the full and complete loan transaction histories for each borrower; Knowingly accepting loans and not disclosing to investors problems with loan documentation; missing, altered or fraudulent documentation in loan file; chain of titles and ownership; threatened legal actions; current regulatory actions or complaints made about loans assigned; Reporting problems or improper custody, maintenance and control of promissory notes, deeds and other loan documents; Offering for sale and securitization interests in notes, deeds or other mortgage instruments that the servicer or securitizer does not have a real interest in; Offering for sale and securitization interests in notes, deeds or other mortgage instruments that the servicer or securitizer does not have in their custody or control; Offering for sale and securitization interests in notes, deeds or other mortgage instruments that the servicer or securitizer has offered for sale to someone else; Offering for sale and securitization interests in notes, deeds or other mortgage instruments that the servicer or securitizer is owned by someone other than party identified in the prospectus; In essence on thousands of occasions I stated to regulators, CEOS, banks, Fannie and Freddie that the practices of the banks were that they were double and multi-pledging assets and pledging paid off and refinance notes to securitizations.  This is something April, Max and I have discussed for years now.  Now, they come and admit that each of my allegations were true  Without analyzing the deal, as complex as they are, you WILL NEVER KNOW IF THE FORECLOSING PARTY HAS “ANY” RIGHT TO FORECLOSE!!!

The motives I identified for the “Blank Endorsements” and missing assignments and “pre-notarized” “Blank Assignments” and “Blank Allonges” that “were placed into the “custodial/collateral” files were to be able to:

Multi-pledge collateral (Notes) so as to cook the books; In case of bankruptcy, allow the entity in possession of the notes to simply transfer to another entity to be decided or themselves the notes etc… so as to keep out of the bankruptcy estate of the bankrupt creditor; To pretend to show that a “true sale” occurred when in reality the so-called lenders were financing their receivables; Complete and change chains in titles to notes that were toxic where fraud was known and HDC could be achieved; Shuffle the ball (note) under the shell (owner) so as to subvert TILA, RESPA, and FDCPA claims and other lawsuit claims and any related HDC and assignee liability issues.

Now, in BOA’s Motion in the TBW case, they prove my allegations that the notes were multi-pledged and my statement for years that unless you see where each note comes on and off the books, and review the custodial documents, you will NEVER KNOW WHO OWNS THE NOTE and has any right to accelerate, amend, modify, settle, payoff, satisfy, return, and cancel the note, let alone authority or standing to foreclose.

Here is the key part from the motion….

On numerous occasions, the Debtor has informed the Court and other parties in interest that one of the biggest challenges in this case will be sorting out the competing claims to cash and other assets that flowed through the Debtor’s accounts prior to the bankruptcy filing.

Indeed, it appears as though many loans and other mortgage-related assets have been double and even triple-pledged to various constituencies. According to the Debtor, the largest single source of disputed funds—more than $548 million according to the Debtor’s Second Interim Reconciliation Report—relates to Freddie Mac. Indeed, BofA believes that there were improper diversions of Ocala loans and assets from TBW to Freddie Mac, and Ocala may have valid ownership claims with respect to a substantial portion of assets that relate to Freddie Mac. Accordingly, there can be little doubt that BofA, in its representative capacities with respect to Ocala, has a valid and pressing need for information regarding Freddie Mac’s extensive relationship with the Debtor, which is directly relevant and necessary to evaluate the Debtor’s property, liabilities, and financial condition. In just a few weeks, the Debtor intends to file an Asset Reconciliation Report that will identify with greater specificity (but, importantly, not resolve) the remaining issues with respect to ownership rights. As a result, the need for BofA to gain access to documents in Freddie Mac’s possession has become particularly urgent.

Among other things, BofA needs to obtain documents from and examine witnesses at Freddie Mac to (1) evaluate competing claims against the estate, (2) test the assumptions contained in the Asset Reconciliation Report, and (3) examine Freddie Mac’s claim of ownership with respect to certain mortgage assets and its custodial arrangements with Colonial Bank for those assets. Despite these time sensitivities, Freddie Mac has so far blocked BofA’s ability to obtain any of this information, including those documents that have already been produced to the Debtor and counsel for the Committee. In its objection, Freddie Mac goes to great lengths to characterize the BofA 2004 Motion as overly burdensome, massively expensive, improperly motivated, and generally disruptive to the ongoing discovery between the Debtor and Freddie Mac. Even if such arguments had any merit under the circumstances (which they do not), the simple fact remains: nearly three months after the Court entered its order on the Debtor’s Rule

2004 motion authorizing and directing examination of Freddie Mac, BofA has not been able to review a single document… Be sure to sift through the files below… Fascinating…

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

Whew… I was so relieved today when I read the results of a study just published by the Center for Responsible Lending on the foreclosure crisis.  You see, up until now, and having written almost 300 articles on the topic, I’ve been struggling to understand why we as a nation have allowed the foreclosure crisis to go on unchecked.

I mean, come on… not only has not one government program worked in the least, but at this point we don’t even have anything in place that MIGHT work to stem the tide of foreclosures that quite literally threatens our country’s economic stability, and therefore that of the entire world.

Think about it… according to the Obama Administration and a whole gaggle of media pundits, we managed to figure out how to save a multi-trillion dollar banking system that was only days away from imploding.  We turned around the worst economic and financial meltdown in 70 years… in less than one year!  Even General Motors, which was bankrupt a few months ago and about to cause starvation in a large part of the Midwest, as I recall, is not only back on its feet, but its about to have a banner year.  Banks like Citibank, Bank of America and others, went from being practically penny stocks a year ago, to handing out record bonuses only months later!

The stock market bounced like a Superball, coming up from the depths of panic to break through the 10,000 mark like it was tissue paper.  Interest rates are at record lows… there’s no threat of inflation… the housing market has bottomed out… in fact, Realtors and mortgage brokers are telling me that things are going gangbusters.  Around the world, entire countries are defaulting as they drown in debt, but not only did we get our economy back into recovery mode, but we even had time last year to fix our health care system!  We’re absolutely incredible!  USA…. USA… USA!  Come on, chant with me!

Even while fighting a seemingly un-winnable, protracted war in Afghanistan, we happen upon the largest underground treasure chest on the planet.  I mean, it’s like then one day we were shootin’ at some food, and up through the ground came a bubblin’ crude… oil, that is… black gold… Texas Tea.  Next thing we knew, why Jed’s a trillionaire!  And we’re not God’s chosen nation?  Please!

So, you can imagine how surprised I’ve been that when it comes to the biggest problem we have, the foreclosure crisis, its been pretty much left alone to eat away and the financial and societal fabric of our country.  It would be like finding out that we’ve decided to just leave the oil in the Gulf of Mexico where it floats.

Well, as of today, the Center for Responsible Lending (“CRL”) has straightened it all out for me, and I’m so relieved that I’m taking the weekend off to finally relax a bit.  We’re not fixing it because it’s mostly affecting brown people!  Oh, thank God… and here, I’ve been worried about almost nothing… aren’t I embarrassed.  It’s like the fence that we keep talking about building to stop illegal immigration into this country that’s NOT along the Canadian boarder.

The Center’s study showed that a home owned by a black family is 76% more likely to go through foreclosure than a home owned by a white family.  Gotcha’!  It’s like the Rodney King riots in LA so many years ago.  The riots went on like a National Geographic Special until late in the day when someone threw a beer bottle across Wilshire Blvd. landing in Beverly Hills… and they called out the National Guard.

The study also showed “worrying evidence” that the crisis will “wipe out a generation of wealth in communities of color and exacerbate the existing income gap between white and non-white families.”

So, I guess white families don’t have that much to worry about.  No matter what, they’ll still be doing a whole lot better than the non-white families.  That’s good news, right?  Relax, white people!

The study then says the following:

“Once the foreclosure crisis is complete, as many as 10 million homes will go through the foreclosure process, which has cut across all demographic and income groups, from trailers to McMansions, from homes with sub-prime loans to homes with vanilla mortgages.”

Okay, before I comment on the message here… who wrote that paragraph?  Is it someone afflicted with Down Syndrome, or perhaps autism, because if so, then “good job!”  If not, then whoever wrote that paragraph… you’re an asshat.

For one thing, the foreclosure crisis doesn’t become “complete”.  What do you think happens… someone rings a bell and that’s it… it’s over now?  Foreclosures breed foreclosures breed foreclosures.

Reduced equity is what drives foreclosures, because when life events occur, and they most definitely do occur, people can’t sell their underwater homes so they end up in foreclosure, which furthers the reduction in home values in the surrounding area.

Reduced equity also reduces the level of consumer spending, which reduces corporate profits, which tends to increase and worsen unemployment… which in turn leads to more foreclosures.  And all of this is to say nothing of the bonds that default as the payment streams inside the mortgage backed securities dry up, thus triggering the credit default swap liabilities that we’re going to be paying for the rest of my life on behalf of AIG.

And should we even bother talking about the toxicity of the assets that are STILL clogging up the balance sheets of our too-big-to-fail, too-big-to-save banks?  I know, Geithner at Treasury and Bair at FDIC have suspended the accounting requirements for banks, so they don’t have to recognize the losses by writing down assets to their actual value, but that’s not a permanent change, right?  So, as values fall will the banks get better or worse, from a financial perspective?  Class?  Right… worse!

What would cause the foreclosure crisis to be “complete”?  Immigration to this country?  Can’t be that, ‘cause obviously those people would be largely be brown and we’ve already established how well that color does when trying to hold onto a home.  So, you see, brown couldn’t really do that much for us.  (Sorry about that one, couldn’t resist.)

And might I mention… “from homes with sub-prime loans to homes with vanilla mortgages.” From sub-prime to vanilla?  Why not just go with “from chocolate to vanilla,” and be done with it.  I’d like to suggest that you are obsessed with color and need at least a vacation, and probably years of therapy.

The CRL shows that, “all in all, 17 percent of Latino homeowners, 11 percent of black homeowners, and 7 percent of white homeowners have lost their homes to foreclosure since 2007, or are at imminent risk.”

Okay, let’s do the math…

According to the U.S. Census Department, here’s how the color chart in this country breaks down as of 2000, which we can assume hasn’t changed all that much compared with today in percentage terms.  And please know that I did not write the words below, it’s how the Census describes things.

White alone, non-Hispanic:            199,491,000

Black, or African American:             41,127,000

Hispanic or Latino                        46,944,000

So…

7 percent of white families is: 13,964,370.

11 percent of black or African American families is: 4,523,970

And 17 percent of Hispanic or Latino families is: 7,980,480

Want to know what those numbers show more than anything else?  They show that more than 25 million American families are about to be wiped out, and endure a life changing event because Wall Street’s bankers abused the mortgage securitization process, knowingly creating bonds that appeared to ratings agencies to be “triple A” but weren’t, which was necessary in order to sell them to pension plan investors, because at the same time they distorted and abused the usage of credit default swaps that allowed them to place bets against the defective bonds at 50:1 odds.

These same banks leveraged themselves 30 and 40 to one, based on the absurd belief that housing prices would never reverse themselves.  These same banks and their commercial lenders and retail mortgage companies, created toxic mortgage products designed for nothing more than refinancing in a year or two, and then used predatory lending strategies and tactics to take advantage of people of ALL COLORS, of all ethnicities.

Did the predatory lending, however, target the inner city, lower income African American communities?  You bet it did.  In fact, I wrote an article about that abomination last year, titled: “Wells Fargo’s Ghetto Loans and the Mud People.”  And if you haven’t read it, you should.  Everyone should.

But, our foreclosure crisis is not a race issue.  And, at the same time, it very clearly is.

First of all, the foreclosure crisis is an American tragedy that, as we stand here today, is sure to be monumentally catastrophic on an historic scale… for tens of millions of American families in every conceivable shade of brown, at every economic level, and for our nation and its economy as a whole.

To think that it is somehow possible for tens of millions of American families to endure such a tragedy… while watching a handful of elite Wall Street bankers, directly responsible for the crisis, not only walk away unscathed, but encouraged to remain in their positions and allowed enormous profits as a result… to think that such a thing can happen without impact to our society as a whole is utter foolishness.

This is not a tragedy that discriminates.  The race diminished as a result of what is being allowed to transpire will be “human”.  To suggest otherwise is not only insensitive at a level that makes one cringe, but additionally, will only serve to divide people further, at a time when the nation is already struggling under the unfounded and erroneous belief that it is only “irresponsible borrowers” who find themselves in foreclosure, and they are therefore deserving of their fate.

As the CRL study correctly states:

“The costs of foreclosure are extensive, multifaceted, and long-term, extending far beyond individual families to their neighbors, communities, cities and states.”

However, while the CRL study correctly points out that, African Americans, Latinos and other ethnic minorities will pay a higher price as a result of the crisis widening.  But it will be the legacy of disparity in incomes and education that will be the cause.  This effect will not be the result of the crisis discriminating but from the realities of life in America, a nation still trying to recover from slavery and segregation.

At the same time, I do believe that there have been racial undertones preventing our society from taking faster action to prevent this crisis.  This crisis was initially mischaracterized as being a “sub-prime” crisis, and because there are racial undertones and racial realities associated with the term “sub-prime,” it is also, I believe, unquestionably true that that our nation has done less to address the crisis to-date than we would have had the affected segment of society been seen as predominantly “white”.  And to the extent that’s the case, all involved should be deeply ashamed.

Lastly, the CRL study estimates that between 2009 – 2012, there will be indirect losses in wealth resulting from depreciation of nearby properties of close to $400 billion in African American and Latino communities, but based on the report’s other conclusions, I think it’s far more meaningful to realize that the number will be far in excess of $1 trillion, all communities combined.  These losses will not accrue to those losing homes, but by those near by.  And yet many in this group still maintain that those in financial distress now, should not be helped.

When you add in the direct losses of those losing homes, and the directly related deterioration of the bonds and credit derivatives, the numbers climb into the tens of trillions of dollars, and very quickly the scope of the problem becomes both apparent and overwhelming.

Then look at our country’s core problem: unsupportable levels of debt… government, personal and corporate. Consider the aging and massive baby boomer generation that is declining in its propensity to earn and spend, has not saved enough for retirement, and will need to access the unfunded promises of pensions and Medicare. We cannot spend, borrow, or grow ourselves out of this debt.  As Chairman Bernanke said just a week ago while testifying to Congress, we are on an “unsustainable path”.

Those that believe we can grow our way back to prosperity as we have before are misinterpreting history.

The result of the Great Depression and war years was a debt-free population that had saved through the war.  The post-WWII baby boom, coupled with the fact that our country’s manufacturing capacity was not destroyed during the war, is what drove our country to the economic prosperity we’ve known for the last 50 years.  Conversely, today’s college students are looking at graduating to no jobs, six-figure debt loads, and as a result, are in no rush to start the families that provide the foundation for economic expansion.

Those that believe we can spend our way back are just as mistaken.  Any amount of fiscal stimulus, eventually runs out, and when it does all we have to show for it is more debt.  Japan, for example, tried massive amounts of stimulus spending, and the result is a country with debt to GDP of 200%, but no economic growth.

We passed a $700 billion stimulus bill just a little over a year ago and while we succeeded at fixing our roads and bridges, we failed to create jobs or any lasting impact.  We stimulated housing with tax credits, government spending, and the purchase of mortgage backed securities, and the moment those programs stopped the real estate market literally fell off a cliff and is again poised to continue its inevitable decline.

And, certainly most memorably, we sacrificed transparency in order to go dramatically further into debt.  We pumped trillions of dollars into failed financial institutions, embraced childish policies, like “extend and pretend” and the suspension of mark-to-market accounting, and circumventing our legislative process, we allowed banks to borrow from the Fed and loan to Treasury in order to make the spread, which we allowed the banks to call “profits”.

These programs and policies have led to three notable outcomes:

1. Our banking system didn’t fail, but the toxic assets that were threatening the solvency of our institutions are right where they were in the fall of 2008.

2. We are much deeper in debt as a result of the massive borrowing and spending associated with “saving” institutions that remain insolvent absent government support.

3. The money that made the banks appear profitable, combined with no lending and essentially risk-free trading, resulted in a citizenry forced to watch literally hundreds of billions in bonuses handed out to the very individuals that caused the crisis in the first place.

After almost 20 years, Japan should have shown us by now that you can in fact deficit spend for decades without result.  Greece, Spain and others to be named later should show us what happens when the ability to do so runs out.

The problem we face is unsustainable levels of debt throughout every aspect of our society.  If we are to ever break the deflationary spiral we have allowed to take hold, we have no choice but to fix the structural problems that can only continue to make any sort of real recovery impossible.

The cuts will be painful and perhaps politically unpalatable, but they are at the same time, anything but optional.  Reducing the amounts promised by public pensions, cutting government wages, the restructuring of public programs like Social Security and Medicare, a reduction and perhaps elimination of corporate taxes, and changes to the tax code that eliminate the incentives to send jobs overseas, and the unwavering commitment to eliminate debt in government and throughout our society… all are areas worthy of our immediate attention.

Just think where we as a nation might already be today, had we followed a different path coming out of the financial meltdown.  We could have dedicated a portion of the stimulus, government spending and tax credit programs to stabilize the housing market. A stabilized housing market would have buoyed consumer spending, which would have in turn reduced unemployment thereby preventing additional and unnecessary foreclosures.

Of course, on the other side of the coin, absent the trillions of dollars we pumped into failed financial institutions, our banks would be somewhat smaller, but I think most of us could have gotten by with that reality for a while.  And we could have enacted real financial reforms that would eliminate the problem of “too big too fail” for future generations… like our son’s and daughter’s, for example.

Lastly, to those who believe that there is an upside to our foreclosure crisis… that they will one day be among those able to scoop up near limitless opportunity born from the losses of their fellow citizens, I can only offer that they are sadly quite mistaken.

While few in this group may realize it today, that sort of thinking can only lead to their inclusion in our country’s race to the bottom.

Other Mandelman Matters articles you might like… in fact you probably will… Oh, come on… why not try clicking at least one?

Click here to understand Securitization, the Bond Market & Mortgage Backed Securities.

Get Smarter Here: Books I’ve Loved Reading – The Great Depression Diary, by Benjamin Roth.

Mandelman’s How and Why to Use the REST Report When Applying for a Loan Modification

Mandelman’s Senate Investigation Says Banks Caused Crisis, Not Borrowers

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Click here to read the complete story at Mandelman Matters.

Well, it looks like the day has finally come, and the world finally feels like it might someday soon make sense once again.  The banks are finally going on trial over their handling of HAMP loan modifications.  Here’s a trial I’d like to be able to order on Pay-Per-View.

The Boston-based, nonprofit, and EXTREMELY formidable National Consumer Law Center (“NCLC”), along with co-counsel, has brought four class action lawsuits on behalf of the residents of Massachusetts that challenge the failure of Wells Fargo Bank, Bank of America, J.P. Morgan Chase Bank and IndyMac Mortgage Servicers/OneWest Bank to honor their agreements with borrowers to modify mortgages and prevent foreclosures under the United States Treasury’s Home Affordable Modification Program (“HAMP”).

Yes, you read that right.  NCLC, et al, are suing the banks over the travesty that is HAMP.  We’ve all been waiting for this day for a long time now, and it finally arrived.  So, don’t rush through this article, revel in it.

It’s like I always say:

If anything good ever happens in the foreclosure crisis… celebrate immediately!

The complaints, filed in the United States District Court for the District of Massachusetts, assert such claims as breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel under Massachusetts common law arising from the financial institution’s alleged failure to keep its promises to modify eligible loans in order to prevent foreclosures against homeowners who have lived up to their end of the bargain as required by HAMP.

Go ahead… I know you want to read that paragraph again.  I know you want to… so, here it is:

The complaints, filed in the United States District Court for the District of Massachusetts, assert such claims as:

• Breach of contract
• Breach of the implied covenant of good faith and fair dealing
• And promissory estoppel under Massachusetts common law arising from the financial institution’s alleged failure to keep its promises to modify eligible loans in order to prevent foreclosures against homeowners who have lived up to their end of the bargain as required by HAMP.

This looks to me to be the real deal.  There’s no question that NCLC is an organization to be taken very seriously.  Here’s how they describe themselves:

The National Consumer Law Center is the nation’s consumer law expert, helping consumers, their advocates, and public policymakers use powerful and complex consumer laws on behalf of low-income and vulnerable Americans seeking economic justice.  A top priority for NCLC is providing support on issues involving consumer fraud, debt collection, consumer finance, energy assistance programs, predatory lending, and sustainable home ownership programs.

NCLC is governed by a volunteer national board of directors which includes Mike Ferry, president, as well as bar associations representatives from the private bar, and clients from the communities we serve.

NCLC has been awarded a four-star rating for sound fiscal management by Charity Navigator, one of the country’s premier charity evaluators. This exceptional rating reflects NCLC’s ability to efficiently manage and grow its finances. To look at the complete rating, visit www.charitynavigator.org.

Are you getting all hot and bothered?  I am.  Want to make a donation? Support the cause, as it were?  Honestly, I can’t think of a better one at the moment… I know there’s the oil in the Gulf, but shouldn’t BP, the 4th largest corporation in the world be taking care of that unthinkable mess.  Click the link below:  I’m sure any amount will be appreciated, and put to good use.

HELP NCLC HOLD THE BANKS ACCOUNTABLE FOR WHAT THEY’VE DONE UNDER HAMP:

DONATE TO NCLC!

And, in the “Comments” box on the donate form please type in “Mandelman Matters”.  I have no idea why, I just feel like I want them to know your donation came from here.  (If you wouldn’t mind, of course.  If it bothers you, for whatever reason… then never mind.)

If nothing else, may I suggest…

Click here to read the complete story at Mandelman Matters.

A homeowner wrote to me the other day, and I could tell from her emails that she had been through the ringer trying to get a loan modification. I’ve heard from so many thousands of homeowners over the last year that I could probably guess the lender or servicer just from the tone of the email.

This particular homeowner, however, kept notes of her journey with Bank of America into The Loan Modification Zone, and I couldn’t help but share them… you’ll see why.  Usually I’d comment more, but this one speaks for itself, over and over and over again.

Oh, and one more thing… Yoohoo!  Bank of America people!  Are you listening?  Well, that’s a silly question, I know you’re not.  Here’s a better one:

ARE YOU ASHAMED?

Because you damn well should be.

Nice slogan, by the way.  What does it refer to?

My Journey to Get a Bank of America Loan Modification

1/14/09 - Hired a lawyer to help with the loan modification.  He made me do all the work on home values in my area. Submitted my income and expenses and wrote a hardship letter. My mortgage was not behind at this time.

2/23/09 – @5pm – My lawyer said he had been calling Bank of America but was not getting anywhere, so I decided to make a call to Bank of America.  I spoke with Crystal and she said the only thing she could offer was for me to request forbearance, but not a modification because I wasn’t behind on mortgage payments.

3/10/09 - My lawyer still could not provide me any answers and said I should keep trying to call as well. So I did.

4/10/09 - My lawyer told me he can’t get anywhere with B of A and said since I was getting more information than he was from B of A, then I should keep trying on my own.  I asked if I could get a refund since nothing was done, but the answer was No.

6/1/09 – Missed my first mortgage payment

6/8/09 - Received a letter from B of A stating “there are no options available” for me to modify.

7/9/09 – Bank of America told me to resend income and hardship letter asking for a modification so I faxed it in again.

9/20/09 - Called B of A about status since now  injured at work and was taken off work.  No update at this time.

11/17/09 - 11am- Spoke with Crystal. She requested I resent my income and hardship letter again. SO I DID.

12/1/09 - Via automated phone line. Collection activity suspended until 12/22/09. Work out info still in review.

12/21/09 - Called B of A. Modification still in review.  Told B of A I was going to have to file for BK and was instructed to get a letter from my lawyer so the modification process can continue.

1/22/10 - Filed for BK

2/23/10 - Called and spoke with Crissy. They received letter from the lawyer, but no update at this time

2/24/10 - Called again. Spoke to Paris (BK dept). Need to resend all the documents again.

3/1/10 - Called to verify B of A received the documents. They did “again”.

4/2/10 -Received a letter from B of A stating “no options available” for modification.

4/5/10 - Called B of A. Spoke with Justin. Resend updated income and expense information. Also told to contact HUD for counseling.

4/8/10 - Called and spoke to Bill for status update. Was told there were “no options available”. Asked to speak to a supervisor. Spoke with Iris to find out why I didn’t qualify.  She couldn’t give me an answer, but said “you probably don’t make enough”, and said I should refax my income and expenses again. Then call in 3 days to see if they received it.

4/14/10 - Received a letter from B of A stating “no options available.

4/19/10 – Call HUD. Spoke to Delores. Told about denial letter from B of A. He went over my numbers with me and said I SHOULD of qualified for HAMP. She conferenced in B of A to ask why I was denied.  They couldn’t tell her, but they said I did not qualify BECAUSE  I WAS BEHIND ON MY MORTGAGE.  HUD was very firm with B of A and quoted the preliminary qualifications to her. B of A placed us on hold and then we got cut off. Deloris tried to call back, but was only able to leave a message this time.

4/20/10 - Call and left a message for Delores at HUD.

4/22/10 – Call HUD and spoke to  Cecilia.  She conferenceD in with B of A and we spoke with Desiree Delgado in the BK dept to get the reason for the denial.  No answer was given by B of A, but was told to refax all the income and expenses, hardship letter, etc. to the same number that I’d been faxing things all along.

4/27/10 - Called B of A to verify that they received the whole package. Spoke with John. Packet was received. I was transferred to the Bankruptcy Dept. and spoke with Rashida.  She said its “In review”, and to call back in 2 weeks.

4/30/10 - Call HUD, spoke with Ann. Will call me back. She said the “Escalation” dept of HUD is handling this with the B of A management.

5/10/10 - Called HUD Escalation team. Spoke with Nancy. She is going to review all the notes and call me back.

5/10/10 - HUD, Michelle called back and conferenced in B of A. Spoke with Julie. Said the file was still in review and then the call was dropped… or she hung up.  Couldn’t tell which.

5/11/10 - Call B of A Rania. Was transferred to the BK Dept. I sent in 2 mortgage payments and was making sure they were credited. Also inquired about status of modification. Transferred to Brianna- no update available on modification.

5/11/10 - HUD told me to call HOPE and do the counseling so it could be documented. Did that with Money Management International. Notes were sent to B of A.

5/17/10 - Call B of A. No update. No notes about notice of intent to accelerate or foreclosure notices at this time.

5/19/10 – Call HUD. Spoke with Steve. Conferenced with B of A and spoke with David. Verified that workout file is “in review”.  Also B of A verified some of the information I sent in and then said he was referring my file to the HAMP program for the next review. Stated I should receive a packet in the mail within 30 days to discuss the trial payments.

5/25/10 – Call B of A  on status. Spoke with Jason. Still under review.

6/3/10 – Called B of A. Spoke with Stella. File still under review.

6/4/10 - Wrote to Mandelman Matters about “who can I trust” to help me in my plight to get a loan mod.  We wrote back and forth a few times and he was prompt answering my questions.  Martin even told me to call if I wanted to talk about the situation.   I almost fell out of my chair when I read that because I didn’t know if I was in for a “sales” pitch.

6/6/10- 9pm - Decided to call Martin Aandelman with additional questions.  I couldn’t believe he said it was ok to call him so late on a Sunday night. We spoke for about an hour and then Martin thought I could get some solid help and advice from Julie Greenfield (a lawyer that deals with loan mods).  He texted her around 10pm to see if she could talk, especially being so late.  Martin conferenced her in with me and explained my whole dilemma.  She immediately had thought B of A had sent my file to the “transfer around the building party”.  I don’t know how the over 400 pages I had sent them, and resent them a dozen times could actually have ended into the wrong department. Julie offered to make an inquiry call for me to check on the status.  Julie would send me an authorization the next day to give her legal permission to speak with B of A.  I actually could not BELIEVE there were actual good people that would help me in my time of chaos with B of A, and not get paid for it.   THERE IS A GOD!

6/7/10 - Made my usual call to B of A, which seems to almost be daily now, about my loan mod status. Spoke with David.  I was placed on hold for a while so he could “review” the notes. He stated a negotiator was assigned (Oscar Nunez) to negotiate with the investor and then I should be receiving a packet by next Wednesday (6/16/10) or the following Wednesday. He explicitly told me to call back if I don’t receive it.

6/7/10 – Received the authorization from Julie Greenfield (the lawyer). Faxed it back to her and she said she would call someone at B of A the next day.

6/8/10 – Julie wrote me after she called B of A.  It seems now that my case had been assigned to a different negotiator from the one they told me about the day before. So now Valarie Kemp is reviewing the file for HAMP and Non-HAMP programs. However, now it could take another 30 days for review, which is A LOT different than “I’m supposed to get my documents by next Wednesday”.  At this point I don’t believe anything B of A tells me because if they think they can tell me one thing to get me off their back, and then tell an attorney another thing, which was probably the truth.  So, I’m still frustrated, but I finally feel I have someone to trust with my case. THANK YOU MARTIN AND JULIE.

You are quite welcome, and it was no problem… happy to help… and Julie’s not only one of my favorite people on the planet but she’s super smart about all things mortgage banking.

~~~~~~~~~

Here’s a good one…

Q. What do you get when you mix Bank of America with Countrywide and Merrill Lynch?

A. TARP Funds.

Or how about this one…

Q. What do you get when you mix Bank of America with Countrywide and Merrill Lynch?

A. A little over twenty million bucks, $20,404,009 to be precise.

~~~~~~~~~~

Read it and weep, people, read it and weep.  Torch or Pitchfork?

While CEO of Bank of America in 2007, Kenneth D. Lewis earned a total compensation of $20,404,009, which included an annual base salary of $1,500,000, a cash bonus of $4,250,000, stocks granted of $11,065,798, and options granted of $3,376,000.

But wait… there’s more!

He is also leaving with more than $135 million in retirement benefits, including the pension and $10 million in life insurance benefits, according to an analysis of corporate filings by James F. Reda & Associates, an independent consulting firm.

Lewis is a graduate of Georgia State University, where he earned a bachelor of arts degree in finance  from J. Mack Robinson College of Business. He is also a graduate of the executive program at Stanford University.

Wow… now that’s truly impressive. Not only did Kenny earn his bachelors in finance from Georgia State, but he hungered for knowledge, so he also took a couple of weeks off one summer to attend an executive program at Stanford?  Now you see, that I did not know.  Makes me feel kind of bad for calling him a spineless, yet dangerous moron for the last couple of years.

Actually, Kenny’s educational background has motivated me to sign up for one of those “executive programs,” but I’ve decided to attend the HARVARD EXECUTIVE PROGRAM.   (Now that’s what I call “HIGHER LEARNING!”)

Ergo Bibamus!

Click here to read the complete story at Mandelman Matters.

GET LOAN SPECIFIC RECORDS PROPERTY SEARCH AND SECURITIZATION SUMMARY

FTC v Countrywide Home Loans Incand BAC Home Loans ServicingConsent Judgment Order 20100607

Bank of America to Pay $108 Million in Countrywide Case

By THE ASSOCIATED PRESS

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

You know, it really must be true what they say.  It must begin innocently enough.

First, perhaps it’s a small charge for a car rental discount plan the customer already canceled.  Then, maybe it’s an overdraft fee here and there.  After that you just boost the APR a point higher on a credit card… after all, who’s going to know.

Then, why not deduct a few hundred each in management fees from the IRAs or 529 plans.  How about extra fees hidden in the small print of business checking accounts?  Heck, even if someone catches it, it’s too hard to move a business account anyway.  And junk fees on mortgages?  Sure, load ‘em up… why not?

Before you know it, what started out innocently enough as just trying to pick up a few extra bucks to cover the company picnic, or maybe painting new lines in the parking lot, and before you know it, someone is asking you where you spent the $40 billion in TARP funds, and you’re dodging calls from reporters at The New York Times.

But, by now the excitement is just too much… you just have to be stealing and screwing someone in order to feel normal.  You look around for virgin ground… customers… no, nothing more you can do to them… already stole most of their houses.  And then it dawns on you… the employees… you haven’t tapped the employees yet.  Yeah, that’s the ticket… how can you steal from the employees.  And start at the bottom, where they’ll be scared to even bring it up.  Then move upward to the branch managers… ooohhh… this is getting exciting, don’t you think?

Well, today Bank of America employees in Kansas City, Los Angeles, Charlotte and other cities around the country have filed a lawsuit alleging that our nation’s largest bank cheated its employees out of $100 million in overtime pay.  The bank never wanted anyone looking too closely at how much they pay their top executives, but now they also don’t want us looking at what they pay their hourly workers either.

According to the Kansas City Star:

“Tellers, customer service managers, and call center workers at branches across the country allege they were ordered to work extra hours without pay, cheated out of overtime compensation, and regularly forced to work through lunch breaks. In short, bank employees in Kansas City, Los Angeles, Charlotte, and other cities claim the bank was padding its bottom line by stealing money from their paychecks, to the tune of $100 million.”

And, Bank of America’s white-collar workers say they face the same things, “from doctored time cards to stolen lunch breaks.”

Plaintiff’s attorney George Hanson, quoted in the Kansas City Star, aptly sums up the situation:

“The cases are reflective of what’s happening in the labor market. People’s wages are being chiseled but they’re afraid to complain because of fear of losing their jobs. It’s become par for the course for large employers, with a more-or-less captive employee base, to find ways to cut payroll corners.”

The KC Star noted that the stealing is likely to be contagious: “If large companies illegally skimp on wages, smaller firms will find it hard to compete without similarly shortchanging their workforce. It’s a recipe for a race to the bottom.”

See, my mother was right again.  It all must start innocently when they’re young banksters.  One minute your watering down the lemonade you’re selling for 20¢, and telling people you don’t have change for a quarter.

Next thing you know you’re bilking homeowners out of billions in trial payments, and can’t seem to remember where the TARP funds went.

Ergo bibamus…

Click here to read the complete story at Mandelman Matters.

Bombshell – Judge Orders Injunction Stopping ALL Foreclosure Proceedings by Bank of America; Recontrust; Home Loan Servicing et al Today, June 06, 2010, 2 hours ago | Foreclosure Fraud

(St. George, UT) June 5, 2010 – A court order issued by Fifth District Court Judge James L. Shumate May 22, 2010 in St. George, Utah has stopped all foreclosure proceedings in the State of Utah by Bank of America Corporation, ; Recontrust Company, N.A; Home Loans Servicing, LP; Bank of America, FSB; www.envisionlawfirm.com. The Court Order if allowed to become permanent will force Bank of America and other mortgage companies with home loans in Utah to adhere to the Utah laws requiring lenders to register in the state and have offices where home owners can negotiate face-to-face with their lenders as the state lawmakers intended (Utah Code ‘ 57-1-21(1)(a)(i).). Telephone calls by KCSG News for comment to the law office of Bank of America counsel Sean D. Muntz and attorney Amir Shlesinger of Reed Smith, LLP, Los Angeles, CA and Richard Ensor, Esq. of Vantus Law Group, Salt Lake City, UT were not returned.

The lawsuit filed by John Christian Barlow, a former Weber State University student who graduated from Loyola University of Chicago and receive his law degree from one of the most distinguished private a law colleges in the nation, Willamette University founded in 1883 at Salem, Oregon has drawn the ire of the high brow B of A attorney and those on the case in the law firm of Reed Smith, LLP, the 15th largest law firm in the world.

Barlow said Bank of America claims because it’s a national chartered institution, state laws are trumped, or not applicable to the bank.

That was before the case was brought before Judge Shumate who read the petition, supporting case history and the state statute asking for an injunctive relief hearing filed by Barlow. The Judge felt so strong about the case before him, he issued the preliminary injunction order without a hearing halting the foreclosure process. The attorney’s for Bank of America promptly filed to move the case to federal court to avoid having to deal with the Judge who is not unaccustomed to high profile cases and has a history of watching out for the “little people” and citizen’s rights.

The legal gamesmanship has begun with the case moved to federal court and Barlow’s motion filed to remand the case to Fifth District Court.

Barlow said is only seems fair the Bank be required to play by the rules that every mortgage lender in Utah is required to adhere; Barlow said, “can you imagine the audacity of the Bank of America and other big mortgage lenders that took billions in bailout funds to help resolve the mortgage mess and the financial institutions now are profiting by kicking people out of them homes without due process under the law of the State of Utah.

Barlow said he believes his client’s rights to remedies were taken away from her by faceless lenders who continue to overwhelm home owners and the judicial system with motions and petitions as remedies instead of actually making a good-faith effort in face-to-face negotiations to help homeowners. “The law is clear in Utah,” said Barlow, “and Judge Shumate saw it clearly too. Mortgage lender are required by law to be registered and have offices in the State of Utah to do business, that is unless you’re the Bank of America or one of their subsidiary company’s who are above the law in Utah.”

Barlow said the Bank of America attorneys are working overtime filing motions to overwhelm him and the court. “They simply have no answer for violating the state statutes and they don’t want to incur the wrath of Judge Shumate because of the serious ramifications his finding could have on lenders in Utah and across the nation where Bank of America and other financial institutions, under the guise of a mortgage lender have trampled the rights of citizens,” he said.

“Bank of America took over the bankrupt Countrywide Home Loan portfolio June 3, 2009 in a stock deal that has over 1100 home owners in foreclosure in Utah this month alone, and the numbers keep growing,” Barlow said.

The second part of the motion, Barlow filed, claims that neither the lender, nor MERS*, nor Bank of America, nor any other Defendant, has any remaining interest in the mortgage Promissory Note. The note has been bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. When the note is split from the trust deed, “the note becomes, as a practical matter, unsecured.” Restatement (Third) of Property (Mortgages) § 5.4 cmt. a (1997). A person or entity only holding the trust deed suffers no default because only the Note holder is entitled to payment.

Basically, “[t]he security is worthless in the hands of anyone except a person who has the right to enforce the obligation; it cannot be foreclosed or otherwise enforced.” Real Estate Finance Law (Fourth) §

5.27 (2002).

*MERS is a process that is designed to simplifies the way mortgage ownership and servicing rights are originated, sold and tracked.

Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans. www.mersinc.org

–

Jake Naumer  Union Capital

Licensed Financial Advisor

3187 Morgan Ford

St Louis Missouri 63116

314 961 7600

Fax Voice Mail 314 754 9086

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

by  Matis H. Abravanel, Esq.

Some short background information on this pleading, it’s an emergency motion to cancel a final sale based upon Fraud on the Court.  This client came to us a month before his final sale date, and already had a default and a final summary judgment entered against him.  Besides non-compliance with the pooling and servicing agreement, we uncovered notary fraud (see paragraphs 1-4 and attached exhibits) and a fraudulent assignment and endorsement of a note that was dated in January of 2006, to U.S. Bank National Association, as successor Trustee to Bank of America, National Association as successor by merger to LaSalle Bank, N.A..  However its interesting to note that Bank of America didn’t take over LaSalle Bank until October of 2007, over 1 and 1/2 years later!  (see paragraph 17 and attached exhibits).   Once the ‘pretender lender’ received our motion they immediately called us and cancelled the sale, and we haven’t heard back from them since.  We are waiting to have our evidentiary hearing for Fraud on the Court.

Matis H. Abravanel, Esq.
Loan Lawyers, LLC.
www.FIGHT13.com
1 888 FIGHT 13

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

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

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

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

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

So, banking and government people… what’s up? How are you? Are you reading me because you hate what I’m saying? Or, because you hate what you’re doing? Something in the middle?

I have heard from a few of you. How come not more? Do you feel I’m being unfair about anything? Or, am I pretty much nailing it? I’m not talking about my facts, I know my facts are right. But what about my opinions? Am I out of line? You can tell me if you think so, you know. I don’t get upset because someone has a different view than my own, but it should be a well thought out view. I don’t really do stupid.

Here’s the real question: Can I do more to help homeowners in some way that you know about, but I don’t. I mean, maybe your bank or government agency is actually trying to do good, but somehow struggling for legitimate reasons and maybe I could help in some way.

I don’t really know what I’m thinking about when I say that, but I’m certainly open to the possibilities. And I wanted you all to know that I’m very easy to reach and very easy to talk to.

If you want your identity kept secret, no problem. I won’t say a word about who you are. You can reach out to me and know that I’m only interested in helping homeowners get through this mess, and I’m only trying to do that because few others seem to be.

This crisis is complex and difficult to understand for most people and I’m kind of good at explaining complicated things in a simple way, and people say I’m funny, so I think I have to try to help. Because when the people of this country catch up with what’s gone on here, and then realize that it’s going to be going on for a long time, well… a number of them are going to be quite upset.

I know that a number of banking and government people think that the way home is through our banking system, and that the average homeowner is somehow at fault and therefore somehow undeserving of help, but it’s not true. Without addressing the needs of American citizens, something we have not done well thus far, we are all in trouble.

You guys started it when you came out blaming “irresponsible sub-prime borrowers” as being the cause of the crisis. That was pretty stupid, you must admit, and I wrote to a bunch of you back then telling you it was a mistake. Now you’re having trouble getting the political support you need to change what needs to be changed because you told everybody it was something that it wasn’t.

You guys all now know that this thing had about as much to do with sub-prime borrowers as World War II. Unless you can point out a sub-prime borrower who was selling synthetic CDOs in Iceland, I think we’re done with that conversation, don’t you?

And how comfortable are you with what Bernanke’s got going at the Fed, with the help of Treasury, of course? I mean, you do agree that we’re blatantly circumventing the legislative process in order to pump trillions into banks without that messy congressional thing, right?

Okay, so fine. I’m willing to look the other way on all of that, but we have to meet somewhere in the middle. At this point, homeowners don’t believe anyone on your side of the table cares at all. They all think you’re evil and willing to see millions thrown out of their homes without blinking an eye. And if that’s the case, then there’s no reason for us to talk.

But that can’t be right, right? I can’t believe that either political party thinks they can possibly get reelected by continuing down that path, do they? It’s a bad idea. So far, the foreclosure crisis is affecting roughly 15% of American homeowners, but that number will exceed 20% in a year, or perhaps 18 months. And then all bets are off. There’ll be no going back then.

I guess that’s it. I just wanted to let you know that I’m here and I’m open to doing whatever might be productive and helpful. You don’t have to worry about me being in this for the money, because I don’t make any and I’m going broke fast over here. But I won’t quit… I promise you that.

So… feel free to get in touch of you have anything to say. My email is mandelman@mac.com and I promise to be a lot more reasonable than I probably come across in many of my articles. Truth be told, I’ve learned that subtlety does little to advance my cause.

If not, not. Feel free to continue reading me without reaching out. At least I feel better for inviting you into the discussion. And I do hope some of you will take me up on it.

Martin Andelman
Mandelman Matters
mandelman@mac.com

Click here to read the complete story at Mandelman Matters.

“This will go on for a long time and a lot of people will be indicted,”

Editor’s Note: If you read this carefully, you get a flavor of how the derivative scam adventure involved everyone except its victims. Mind you, there is nothing wrong and probably everything right about derivatives. The problem is not the instrument, it is how it was used and who used it. Banks shouldn’t be allowed to underwrite, sell, trade and take investment positions contrary to the interests of the clients who buy those securities.  No trading in derivatives should be subject to the description “opaque debt investment. All trading needs to be transparent when it comes to underwriters. And complex derivatives should not be used as a cover for fraud.

Conspiracy of Banks Rigging States Came With Crash (Update1)

May 18 (Bloomberg) — A telephone call between a financial adviser in Beverly Hills and a trader in New York was all it took to fleece taxpayers on a water-and-sewer financing deal in West Virginia. The secret conversation was part of a conspiracy stretching across the U.S. by Wall Street banks in the $2.8 trillion municipal bond market.

The call came less than two hours before bids were due for contracts to manage $90 million raised with the sale of West Virginia bonds. On one end of the line was Steven Goldberg, a trader with Financial Security Assurance Holdings Ltd. On the other was Zevi Wolmark, of advisory firm CDR Financial Products Inc. Goldberg arranged to pay a kickback to CDR to land the deal, according to government records filed in connection with a U.S. Justice Department indictment of CDR and Wolmark.

West Virginia was just one stop in a nationwide conspiracy in which financial advisers to municipalities colluded with Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Wachovia Corp. and 11 other banks.

They rigged bids on auctions for so-called guaranteed investment contracts, known as GICs, according to a Justice Department list that was filed in U.S. District Court in Manhattan on March 24 and then put under seal. Those contracts hold tens of billions of taxpayer money.

California to Pennsylvania

The workings of the conspiracy — which stretched from California to Pennsylvania and included more than 200 deals involving about 160 state agencies, local governments and non- profits — can be pieced together from the Justice Department’s indictment of CDR, civil lawsuits by governments around the country, e-mails obtained by Bloomberg News and interviews with current and former bankers and public officials.

“The whole investment process was rigged across the board,” said Charlie Anderson, who retired in 2007 as head of field operations for the Internal Revenue Service’s tax-exempt bond division. “It was so commonplace that people talked about it on the phones of their employers and ignored the fact that they were being recorded.”

Anderson said he referred scores of cases to the Justice Department when he was with the IRS. He estimates that bid rigging cost taxpayers billions of dollars. Anderson said prosecutors are lining up conspirators to plead guilty and name names.

“This will go on for a long time and a lot of people will be indicted,” he said in a telephone interview.

Bidding Encouraged

The U.S. Treasury Department encourages public bidding for GIC contracts to ensure that localities are paid proper market rates. Banks that conspired in the bid rigging for GICs paid kickbacks to CDR ranging from $4,500 to $475,000 per deal in at least 10 different transactions, government court-filed documents say.

A GIC is similar to a certificate of deposit, but its rates aren’t advertised publicly. Instead, towns rely on advisory firms such as CDR to solicit competing offers.

In the bid-rigging deals, CDR gave false information to municipalities and fed information to bankers allowing them to win with lower interest rates than they were otherwise willing to pay, the indictment says. Banks took their illegal gains from the additional returns and paid CDR kickbacks, according to the indictment.

Not Guilty Plea

Wolmark, 54, who was indicted by a federal grand jury in Manhattan on antitrust, conspiracy and wire fraud charges, to which he pleaded not guilty, declined to comment when reached by telephone at CDR’s office. Goldberg, who hasn’t been charged, declined to comment, says his attorney, John Siffert.

Court records in the broadest-ever criminal investigation of public finance shed new light on how Wall Street’s biggest banks were cheating cities and towns during the same decade in which they were setting the stage for a global economic collapse.

As the banks were steering the world’s financial system to the brink of catastrophe by loading more than $1 trillion of subprime mortgage loans into opaque debt investments, they were also duping public officials across the U.S.

Many of the same bankers and advisers who sold public officials interest-rate swap deals that backfired for taxpayers are now subjects of the criminal antitrust investigation involving GICs.

The swaps are derivatives designed to keep monthly interest payments low as lending rates change. Municipal- derivative units of the largest U.S. banks also sold the contracts, public records across the nation show.

Key Witness

Derivatives are financial instruments used to hedge risks or for speculation. They’re derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates. Options and futures are the most common types of derivatives.

A key witness in the government’s case is a former banker whom the government hasn’t named, according to a civil lawsuit filed by Baltimore, Maryland, and six other municipal borrowers against Bank of America, JPMorgan and nine other banks. The banker is providing evidence against his peers.

The witness, who was employed by Bank of America Corp. starting in 1999, has laid out the inner workings of the scheme in confidential meetings with investigators, according to the civil lawsuit.

Bank of America, based in Charlotte, North Carolina, has also been providing prosecutors with evidence since at least 2007. The bank voluntarily reported its own illegal activity and agreed to cooperate with the Justice Department’s antitrust division, according to a press release from the company.

Amnesty Agreement

In exchange, the government promised in an amnesty agreement not to prosecute the bank. Bank of America spokeswoman Shirley Norton in San Francisco said in an e-mail the firm is continuing to cooperate.

The banker who has been cooperating with the Justice Department said he overheard his colleagues change Bank of America’s bids after coaching from brokers or other banks bidding on the same deal, according to information that the firm provided to plaintiffs in the civil case filed by seven municipalities.

At least five former bankers with New York-based JPMorgan, the second-biggest U.S. bank by assets, conspired with CDR to rig bidding on investment deals sold to local governments, according to the Justice Department list now under seal.

At least three other former JPMorgan bankers are targets of the investigation, according to filings with the Financial Industry Regulatory Authority. Six bankers with Bank of America, the biggest U.S. lender, are also named in the sealed Justice Department list as participants.

16 Companies

Eighteen employees at 16 other companies, including units of General Electric Co., UBS AG and FSA, then a unit of Brussels lender Dexia SA, are also cited as co-conspirators by the Justice Department, according to the list under seal. None have been charged in the case.

Citigroup spokesman Alex Samuelson, Dexia spokesman Thierry Martiny, GE spokesman Ned Reynolds, JPMorgan spokesman Brian Marchiony, UBS spokesman Doug Morris, and Ferris Morrison, a spokeswoman for Wells Fargo & Co., which acquired Wachovia in 2008, declined to comment.

Former CDR employees Douglas Goldberg, Daniel Naeh and Matthew Rothman, pleaded guilty in federal court in Manhattan in February and March to wire fraud and conspiracy to rig bids.

In October, CDR was charged with criminal conspiracy and fraud, along with Chief Executive Officer David Rubin, 48, vice president Evan Zarefsky and Wolmark. They pleaded not guilty. Rubin, who was also charged with making fraudulent bank transactions, faces as much as $3 million in fines and more than 30 years in jail if convicted.

No Law Broken

Rubin declined to comment in a telephone call.

“Mr. Rubin doesn’t think that CDR broke the law in any of these transactions,” said Laura Hoguet, his attorney in New York.

Daniel Zelenko, a lawyer for Zarefsky in New York, said he was confident his client will prevail at trial.

“The government continues to show that it simply doesn’t understand how this market operated,” Zelenko said in an e- mail.

During more than three years of investigation, federal prosecutors amassed nearly 700,000 tape recordings and 125 million pages of documents and e-mails regarding public finance deals.

$400 Billion

Municipalities and states raise $400 billion a year by selling bonds. They invest much of those proceeds in GICs, sold by banks or insurance companies. Those accounts hold taxpayer money and earn interest before public agencies spend it.

Banks and advising firms illegally siphoned money from taxpayers by paying artificially low interest rates in the GICs, the CDR indictment says. The money was intended to build schools, hospitals, roads and sewers and refinance higher-cost debt.

The bid-rigging schemes were orchestrated by CDR and other advisory firms, according to the indictment and the civil suits. Advisers are unregulated private firms hired by local governments to consult on public finance deals — and are almost always paid by the banks that arrange the transactions or manage the GICs.

Wilshire Boulevard

CDR, which was located on Wilshire Boulevard in Beverly Hills, California, during the transactions under investigation, has provided advice on more than $158 billion in public transactions since it was founded in 1986, according to its website.

CDR helped arrange deals in which financial firms took millions of dollars in profits from GICs, Bloomberg News reported in October 2006. Almost all of the deals were shams: As much as $7 billion in bond-issue proceeds were invested in GICs but never spent for the intended purpose of providing services to taxpayers.

CDR signed off on interest-rate swaps to municipalities, as banks took hidden fees sometimes 10 times as much as they charged on fixed-rate bond deals, according to data compiled by Bloomberg. For the public, the swaps were fraught with risks.

In the past decade, banks have peddled swaps the world over, from Jefferson County, Alabama — which was forced to the brink of bankruptcy — to the hill towns of the Umbria region of Italy. Many of these swaps soured when the credit crisis began in 2007.

Getting Out

Dozens of municipalities have paid banks billions to get out of swap contracts. The agency that oversees the San Francisco-Oakland Bay Bridge said it spent $105 million to escape its deal in July 2009.

“They were gouging the municipalities,” said retired IRS investigator Anderson, 59. “Beside the excessive fees, some of the swap deals just didn’t work. It was just awful. The same people were involved in the GIC end of the market.”

Bid rigging not only cheated cities and towns, it also illegally denied the IRS required taxes from GIC income, Anderson said. The evidence is clear in telephone recordings made on GIC desks, he said. “We could hear people talking about how everyone knew who was going to win the bid. You could tell it was just everyday business.”

The Securities and Exchange Commission is conducting a probe of bid rigging from its Philadelphia office that’s parallel to the Justice Department investigation.

More Probes

State attorneys general in California, Connecticut and Florida are also investigating. Bank of America, JPMorgan, Fairfield, Connecticut-based GE, and Zurich-based UBS have disclosed in regulatory filings that they may be sued by the SEC.

The Federal Bureau of Investigation has raided at least two of CDR’s competitors, Pottstown, Pennsylvania-based Investment Management Advisory Group Inc., known as Image, and Eden Prairie, Minnesota-based Sound Capital Management. Neither has been charged.

Robert Jones, a managing director of Image, declined to comment, after answering a call to the firm’s office. Johan Rosenberg of Sound Capital didn’t return calls seeking comment.

Tape recordings cited in a letter by Justice Department prosecutor Rebecca Meiklejohn show how those deals worked. In two GIC bids for the Utah Housing Corp., CDR’s Zarefsky advised an unidentified trader that his firm could lower its offer by “a dime,” or 10 basis points (a basis point is 0.01 percentage point).

‘A Couple Bucks’

The West Valley City-based housing agency accepted contracts with GE’s FGIC Capital Market Services division for 5.15 percent and 3.41 percent in 2001, public records show. Zarefsky didn’t return calls seeking comment.

“I can actually probably save you a couple bucks here,” Zarefsky told the trader, according to the letter citing the tape recording.

The Utah agency, which finances mortgages for low-income residents, didn’t know that financial firms were cheating it out of money that could have been used to help home buyers, said Grant Whitaker, who runs the agency. “It sounds like somebody got a better deal than we did,” he said in a telephone interview.

Such deals could produce large illegal profits by banks, said Bartley Hildreth, public finance professor at the Andrew Young School of Policy Studies at Georgia State University in Atlanta.

A New Wrinkle

“Just a basis point on many of these deals is tens to hundreds of thousands of dollars,” he said.

This isn’t the first time Wall Street has faced accusations of reaping excessive fees on investment deals with public officials. Goldman Sachs Group Inc., Lehman Brothers, which filed for bankruptcy in 2008, Merrill Lynch & Co. and other securities firms agreed by 2000 to pay more than $170 million to settle SEC charges that they had sold overpriced Treasury bonds to municipalities.

The so-called yield burning drove down the returns that local governments earned and trimmed required payments to the IRS. The firms neither admitted nor denied wrongdoing.

Even as the banks were settling with regulators, they devised another way to burn yield, this time by skimming money from GICs, according to the indictment, which said the conspiracy went from 1998 to at least 2006.

In the lawsuit against Bank of America and JPMorgan filed in New York in June 2009, the city of Baltimore, two Mississippi universities and four other municipal borrowers say that bankers from those two companies colluded in bidding for GIC contracts in Pennsylvania.

Holiday Party

At a holiday party sponsored by advising firm Image at Sparks Steak House in Manhattan early in the past decade, the Pennsylvania deals were discussed by the Bank of America trader who is cooperating with prosecutors and Sam Gruer of JPMorgan, the civil antitrust lawsuit says.

The Bank of America trader told Gruer that he was happy that the two banks weren’t “kicking each other’s teeth out” on bidding for certificates of deposits for bond proceeds, the suit says. That information was provided by Bank of America to the plaintiffs.

Gruer, who was informed by prosecutors in 2007 that he was a target of the investigation, declined to comment.

Coaching a Bidder

The trader who is now a federal witness joined Bank of America after being recommended by Image, according to information that the bank turned over to the Baltimore-led plaintiffs. He was assigned by Phil Murphy, who headed the municipal trading desk, to be Bank of America’s point person for investment contracts bid by Image, the lawsuit says.

Image coached Bank of America in winning an investment contract in Pennsylvania, according to an internal e-mail exchange in May 2001 between Bank of America trader Dean Pinard and Image’s Peter Loughhead that was obtained by Bloomberg News. The e-mail was provided to Bloomberg by a person who got it from Bank of America and asked to remain unidentified.

Loughead, who ran bids for Image, advised Pinard on how much to offer for managing the cash fund for a $10 million bond issued by the sewer authority of Springfield Township, York County, 100 miles (161 kilometers) west of Philadelphia.

‘Don’t Fall on Any Swords’

Pinard said in the e-mail to Loughead that Bank of America was willing to pay the town as much as $40,000 upfront to win the deal. Loughead wrote that the bank didn’t need to pay that much.

“Don’t fall on any swords,” Loughead wrote to Pinard the day before bids were submitted. He suggested that the bank could win the contract with a bid of slightly more than $30,000. The next day, Bank of America offered $31,000. It won the bidding, authority records show.

Loughead didn’t return calls seeking comment. Pinard didn’t respond to telephone requests for an interview and no one responded to a knock on the door at his Charlotte home.

Image ensured that Bank of America would dominate GIC deals in Pennsylvania by soliciting sham bids from other banks to make the process look legitimate, according to testimony from the trader cooperating with the Justice Department.

Bank of America would return the favor to Image by submitting so-called courtesy bids at the adviser’s request, allowing JPMorgan to win some of the deals, according to information that Bank of America gave plaintiffs’ attorneys.

Switching Jobs

Bank of America has cooperated with the municipalities that were suing the bank as part of its 2007 amnesty agreement with the Justice Department.

Traders such as FSA’s Goldberg often had worked for several banks and insurance companies that had a role in GIC contracts, according to employment records with Finra, the self-regulator of U.S. securities firms. CDR employees went on to work in the derivative departments of Deutsche Bank AG and UBS, the records show.

Before joining Bank of America, Pinard, 40, worked at Wheat, First Securities Inc. in Philadelphia with two bankers who would later join Image, according to broker registration records.

“Few people understand this part of public finance,” Georgia State’s Hildreth said. “It is a very small band of brothers who know the market. So, of course, they are going to reap the benefits.”

34 States

For nearly a decade, CDR founder Rubin, Wolmark, and Zarefsky helped fix prices on investment deals that cheated taxpayers in at least 34 states, according to their indictments and records filed in the case.

FSA’s Goldberg, who received a bachelor’s degree in accounting from St. John’s University in Queens, New York, worked with CDR employees on GIC deals, according to the indictment and public records. Goldberg worked from 1999 to 2001 at GE, which gets 35 percent of its revenue from financial services.

Goldberg was referred to only as “Marketer A” in the CDR indictment. “Marketer A” was then later identified as FSA’s Steven Goldberg in the Justice Department list of co- conspirators.

At GE, Goldberg worked with Dominick Carollo, a senior investment officer for FGIC, and Peter Grimm, who worked there from 2000 until at least 2006, according to court documents and public records. GE sold FGIC in 2003 to a group led by mortgage insurer PMI Group Inc.

Funneling Kickbacks

Goldberg and Grimm worked with CDR to increase their gains on GIC deals, according to the CDR indictment and conspirator list. Carollo left GE in 2003, joining the derivatives unit of Royal Bank of Canada. Grimm and Carollo didn’t respond to telephone calls and e-mails seeking comment.

Goldberg continued to participate in the conspiracy after he left for FSA in 2001 and used swap deals with Toronto-based Royal Bank of Canada and UBS to funnel kickbacks to CDR, according to the indictments and the Justice Department list of conspirators. Royal spokesman Kevin Foster said the company is cooperating the government.

FSA, Royal Bank of Canada and UBS all worked on public finance deals in West Virginia that prosecutors say involved bid rigging.

At least three times, Goldberg conspired with CDR to pick up deals with West Virginia agencies, according to a guilty plea by former CDR employee Rothman and other records filed in federal court in Manhattan. Among them was a $147 million investment contract with the West Virginia School Building Authority.

‘Raw Greed’

That state’s schools need every penny they can get, said Mark Manchin, executive director of the school authority. With 17 percent of West Virginians below the poverty line in 2008, the state was 45th among the 50 U.S. states, according to a 2009 Census Bureau report. Manchin said some students study in dilapidated, century-old buildings.

“It’s just raw greed at the expense of the most vulnerable,” he said in a telephone interview. “With deteriorating facilities all over the state, that money is what we use to build schools.”

Bank of America’s municipal derivatives division, which was formed in 1998, worked on the 14th floor of the Hearst Tower in Charlotte. The space was so tight that the banker who’s cooperating with the Justice Department said he could hear others in the office change their bids when they got word from financial advisers, according to information Bank of America gave Baltimore.

Bank of America’s Murphy told the banker helping prosecutors that Image would use sham auctions to steer deals to Bank of America if the employee told Image that he “wanted to win” and “would work with” Image, according to the civil suit filed by Baltimore. Murphy declined to comment.

Verbal Cues

They would use verbal cues to communicate. The banker would ask whether the bid was a “good fit” to get information on competing bids from Image. Sometimes Image’s Martin Stallone said Bank of America’s bids were “aggressive,” or too high, and had to be reworked.

At other times, Stallone would ask the banker to bid a specific number, according to the civil suit.

Stallone didn’t respond to messages left for him at work or to a list of questions faxed and e-mailed to Image.

Like Financial Security Assurance, Bank of America also paid kickbacks to brokers for their help in getting deals, according to the Baltimore lawsuit, which based its allegations on information provided by Bank of America.

On June 28, 2002, Douglas Campbell, a former municipal derivatives salesman at Bank of America, wrote in an e-mail to his boss, then managing director Murphy, that he had paid $182,393 to banks and brokers not tied to any particular deals.

‘Better Relationship’

Three payments totaling $57,393 went to CDR, which played no role in any transaction connected to that amount. A copy of the e-mail was contained in a North Carolina lawsuit filed by Murphy against Bank of America in 2003.

“The CDR fees have been part of the ongoing attempt to develop a better relationship with our major brokers,” Campbell wrote.

The bid rigging in GIC contracts has reduced public funding for schools and housing across the U.S.

“If this was going on in a small state like West Virginia, it must have been huge elsewhere,” the state’s Assistant Attorney General Doug Davis said.

To contact the reporters on this story: William Selway in San Francisco at wselway@bloomberg.net; Martin Z. Braun in New York at mbraun6@bloomberg.net

Last Updated: May 18, 2010 08:55 EDT

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

This NY decision lays out the legal reasoning for dismissing cases for problematic assignments:

Decided on April 19, 2010
Supreme Court, Kings County
The Bank of New York, as trustee for the benefit of the
Certificateholders, CWABS, Inc., Asset Backed Certificates, Series 2007-2, Plaintiff,
against
Sameeh Alderazi, Bank of America, NA, New York City Environmental Control
Board, .
Plaintiff submits anet al

Upon reading the Affirmation of Linda P. Manfredi, Esq., counsel for the
Plaintiff, dated November 20, 2008, together with Plaintiff’s Memorandum of
Law, dated November 19th, 2008, together with the proposed Ex Parte Order
Appointing a Referee to Compute, and all exhibits annexed thereto, the
application is denied without prejudice, with leave to renew upon providing the
Court with proof of the grant of authority from the original mortgagee to
MERS specifically to act in its interest as related to the secured loan
which is the subject of this action.
Plaintiff seeks summary judgment to foreclose upon the property located at
639 East 91st Street, (Block 4751, Lot 31), in Kings County.
In order to establish prima facie entitlement to summary judgment in a
foreclosure action, a plaintiff must submit the mortgage and unpaid note,
along with evidence of default. Capstone Business Credit, LLC v. Imperial
Family Realty, LLC, 70 AD3d 882
, 895 NYS2d 199 (2nd Dept 2010). The Second
Department has also required a showing that the mortgage was valid. Washington Mut.
Bank, FA v. Peak Health Club, Inc., 48 AD3d 793
, 853 NYS2d 112 (2nd
Dept.2008).
In this case, Defendant Sameeh Alderazi borrowed $408,000.00 from
“America’s Wholesale Lender” on January 25, 2007. The mortgage was recorded in the
Office of the City Register, New York City Department of Finance on
February 14, 2007. MERS was referred to in the mortgage as nominee of the
mortgagee, America’s Wholesale Lender, for the purpose of recording the mortgage.
MERS purported to assign the mortgage to Plaintiff BANK OF NEW YORK on
July 23, 2008. The assignment was recorded on September 19, 2008. The
assignment was executed by “Keri Selman, Assistant Vice President of MERS, as
“authorized agent pursuant to Board of Resolutions and/or appointment”. However,
no resolution nor other proof of authority was recorded with the
assignment or submitted to the Court.
A party cannot foreclose on a mortgage without having title, giving it
standing to bring the action. (See Kluge v. Fugazy, 145 AD2d 537, 538 (2nd
Dept 1988 ), holding that a “foreclosure of a mortgage may not be brought by
one who has no title to it and absent transfer of the debt, the assignment of
the mortgage is a nullity”. Katz v. East-Ville Realty Co., 249 AD2d 243
(1st Dept 1998), holding that “[p]laintiff’s attempt to foreclose upon a
mortgage in which he had no legal or equitable interest was without foundation
in law or fact”.
“To have a proper assignment of a mortgage by an authorized agent, a power
of attorney is necessary to demonstrate how the agent is vested with the
authority to assign the mortgage.” [*2]HSBC BANK USA, NA v. Yeasmin, 19 Misc
3d 1127(A), 866 NYS2d 92 (Table) N.Y.Sup.,2008. “No special form or
language is necessary to effect an assignment as long as the language shows the
intention of the owner of a right to transfer it”. Emphasis added, Id.,
citing Tawil v. Finkelstein Bruckman Wohl Most & Rothman, 223 AD2d 52, 55 (1st
Dept 1996); Suraleb, Inc. v. International Trade Club, Inc., 13 AD3d 612
(2nd
Dept 2004).
The claim in this case is that the mortgage was assigned by MERS, as the
nominee, to the Plaintiff. However Plaintiff submits no evidence that
America’s Wholesale Lender authorized MERS to make the assignment. MERS submits
only its own statement that it is the nominee for America’s Wholesale
Lender, and that it has authority to effect an assignment on America’s Wholesale L
ender’s behalf.
The mortgage states that MERS is solely a nominee. The Plaintiff, in its
Memorandum of Law, admits that MERS is solely a nominee, acting in an
administrative capacity.
In its Memoranda, Plaintiff quotes the Court in Schuh Trading Co., v.
Commisioner of Internal Revenue, 95 F.2d 404, 411 (7th Cir. 1938), which
defined a nominee as follows:
The word nominee ordinarily indicates one designated to act for another as
his representative in a rather limited sense. It is used sometimes to
signify an agent or trustee. It has no connotation, however, other than that of
acting for another, or as the grantee of another.. Id. Emphasis added.
Black’s Law Dictionary defines a nominee as “[a] person designated to act
in place of another, usually in a very limited way”. Agency is a fiduciary
relationship which results from the manifestation of consent by one person
to another that the other shall act on his behalf and subject to his
control, and consent by the other so to act. Hatton v. Quad Realty Corp., 100
AD2d 609, 473 NYS2d 827, (2nd Dept 1984). “[A]n agent constituted for a
particular purpose, and under a limited and circumscribed power, cannot bind his
principal by an act beyond his authority.” Andrews v. Kneeland, 6 Cow. 354
N.Y.Sup. 1826.
MERS, as nominee, is an agent of the principal, for limited purposes, and
has only those powers which are conferred to it and authorized by its
principal.
In the mortgage in this case, MERS claims, as nominee, that it was granted
the right “(A) to exercise any or all of those rights, including, but not
limited to the right to foreclose and sell the Property, and (B) to take
any action required of the Lender including, but not limited to, releasing
and canceling this Security Instrument.” However, this language quoted by
MERS is found in the mortgage under the section “BORROWER’S TRANSFER TO LENDER
OF RIGHTS IN THE PROPERTY” and therefore is facially an acknowledgment by
the borrower. The fact that the borrower acknowledged and consented to MERS
acting as nominee of the lender has no bearing on what specific powers and
authority the lender granted MERS. The problem is not whether the borrower
can object to the assignees’ standing, but whether the original lender,
who is not before the Court, actually transferred its rights to the
Plaintiff. To allow a purported assignee to foreclosure in the absence of some proof
that the original lender authorized the assignment would throw into doubt
the validity of title of subsequent purchasers, should the original lender
challenge the assignment at some future date.
Furthermore, even accepting MERS’ position that the lender acknowledges
MERS’ authority exercise any or all of the lenders’ rights under the
mortgage, the mortgage does not convey the specific right to assign the mortgage.
The only specific rights enumerated in the [*3]mortgage is the right to
foreclose and sell the Property. The general language “to take any action
required of the Lender including, but not limited to, releasing and canceling
this Security Instrument” is not sufficient to give the nominee authority to
alienate or assign a mortgage without getting the mortgagee’s explicit
authority for the particular assignment. Alienating a mortgage absent specific
authorization is not an administrative act.
Plaintiff submitted no other documents which purport to authorize MERS to
assign or otherwise convey the right of the mortgagor to assign the
mortgage to another party.
A party who claims to be the agent of another bears the burden of proving
the agency relationship by a preponderance of the evidence, Lippincot v.
East River Mill & Lumber Co., 79 Misc. 559, 141 NYS 220 (1913), and “[t]he
declarations of an alleged agent may not be shown for the purpose of proving
the fact of agency”. Lexow & Jenkins, P.C. v. Hertz Commercial Leasing
Corp., 122 AD2d 25, 504 NYS2d 192 (2nd Dept 1986). See also Siegel v. Kentucky
Fried Chicken of Long Island, Inc., 108 AD2d 218, 488 NYS2d 744 (2nd Dept
1985), Moore v. Leaseway Transp. Corp., 65 AD2d 697, 409 NYS2d 746 (1st Dept
1978). “The acts of a person assuming to be the representative of another
are not competent to prove the agency in the absence of evidence tending to
show the principal’s knowledge of such acts or assent to them”. (2 NY Jur
2d, Agency and Independent Contractors, 26).
Plaintiff has submitted no evidence to demonstrate that the original
lender, the mortgagee America’s Wholesale Lender, authorized MERS to assign the
secured debt to Plaintiff.
Thus, Plaintiff has not made out a prima facie case that it is entitled to
foreclose on the mortgage in question.WHEREFORE, it is ORDERED that the
Plaintiff’s application for an Order appointing referee to compute amounts
due to the Plaintiff is denied with leave to renew upon proof of authority.
This shall constitute the decision and order of this Court.

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

Editor’s Note: Excellent Pleading on HAMP, TARP and related matters. They also bring up unjust enrichment which might also be applicable to the receipt and non-disclosure of third party payments.

Good facts on illicit “modification” practices and the reasons why the modifications usually don’t become permanent.

KAMIE KAHLO and DANIEL KAHLO, on
behalf of themselves and all others similarly
situated,
Plaintiffs,
v.
BANK OF AMERICA, N.A. and BAC

HOME LOANS SERVICING, LP,
Defendants

HAGENS BERMAN SOBOL SHAPIRO LLP
By: s/ Steve W. Berman
Steve W. Berman, WSBA #12536
Ari Y. Brown, WSBA #29570
HAGENS BERMAN SOBOL SHAPIRO LLP
1918 Eighth Avenue, Suite 3300
Seattle, Washington 98101
(206) 623-7292
steve@hbsslaw.com
ari@hbsslaw.com

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

Editor’s Notes: Bank of America is smarter than most. It has created a web of companies whose function is to perform activities that hide the fact that it is Bank of America, and there are other pretender lenders who hide behind this entity who suddenly appears as “trustee” or some other entity claiming the right to enforce the note, foreclose the mortgage, lift the stay or whatever. Recontrust is one of them, and it agrees with its “customers” that it will never make a REAL claim to the obligation, note or mortgage. But it also agrees to make claims and pursue foreclosures as though they were the creditor, reporting back later on what happened.

RECONTRUST APPARENTLY HAS 12 EMPLOYEES. Yet it handles virtually the whole country for Countrywide Loans, BofA and others. From what I can see it is a sham corporation with sham functions much the same as MERS and other players invented to make this process more complicated. Taking the cue from one of our readers, I did some additional research and found no less than four addresses in four states for this company, obviously designed to give you the run-around. So if you contact one office you are told to contact another. And if you contest their right to issue a notice of default, notice of sale or file a foreclosure lawsuit or defend your own lawsuit to stop them they have plenty of newly fabricated paperwork to justify their position, because that is apparently all they do.

If you want to test this, just call them and ask about a property that is not in foreclosure. They have nothing. So the only reason we see them is to provide cover for the pretender lenders and give them plausible deniability if they come up against a judge or has their number and now wants to award damages, attorney fees, or fines.

Lien Release Services: Consistent. Accurate. Timely.

Lien Release Services

Phone:1-866-207-0573

Address:

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Mail Stop: TPSA-88

Default and Special Release Services

Phone:1-800-281-8219

Address:

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Mail Stop: RGV-C4-450

Real Estate Owned (REO)
If you have questions or inquiries regarding REO purchases, unlisted purchases, investor-owned information, city violations, REO broker applications, REO vendor management, or broker complaints please call the REO Customer Escalation Team at: (866) 781-0029.

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Our lien release departments, located in Simi Valley, CA, and Tempe, AZ, record documents in more than 3,600 jurisdictions.

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Let our experienced staff handle your lien release from start to finish. We’ll help you achieve timely releases and reinstatements and improve productivity and efficiency while reducing expenses and boosting your bottom line. We have the capabilities and experience to process reconveyances and lien releases nationwide, regardless of location or volume.

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Lien releases must be filed and recorded within a very short time following the satisfaction of a lien. We don’t just promise timely turnarounds—we deliver on that promise. When you outsource your lien release program to ReconTrust, you get a partner that’s committed to reducing your liability and administrative costs while providing accurate, compliant results.
We control financial risk by adhering to strict compliance standards at state and local levels. That means your files are processed on time within compliance statutes in all jurisdictions. Using state-of-the-art technology, we also provide accurate, efficient document preparation and management to help you meet required deadlines.

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Our team of experts handles releases nationwide, resolves exception files and clears backlogs. We offer an array of customized solutions to resolve your lien release concerns.
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The benefits of lien release outsourcing are many. You save time and money, because we help mitigate rising staffing costs and fluctuating workloads. When you need a partner in lien release services, turn to ReconTrust.

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Rising foreclosure activities can be a distraction for any servicer. If you’re not positive your business is prepared to handle the rising numbers, let’s talk. ReconTrust’s default management services could take the weight off your operations, so you can focus on your core business.
We provide foreclosure services in 16 states.

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Unaffiliated companies or web sites may report on ReconTrust’s business activities. However, for the most reliable and current information regarding ReconTrust’s business, please contact us directly at (800) 281-8219 or by mail at 1800 Tapo Canyon Road, Simi Valley, CA 93063.

Home > Contact Us
Corporate Headquarters:
Default and Special Release Services

Phone:1-800-281-8219
Address:
2380 Performance Drive,
Richardson, TX 75082
Mail Stop: RGV-C4-450

Real Estate Owned (REO)
If you have questions or inquiries regarding REO purchases, unlisted purchases, investor-owned information, city violations, REO broker applications, REO vendor management, or broker complaints please call the REO Customer Escalation Team at: (866) 781-0029.

Headquartered in Thousand Oaks, CA, ReconTrust is a member of the Bank of America family of companies. That means when you turn to ReconTrust, you leverage the resources, technology, scale, and strength of one of the largest financial services companies in the world.
We understand the needs of the mortgage industry, and we are committed to delivering top-flight results. What is more, we share our parent company’s dedication to quality and continuous improvement. To that end, we are committed to offering our clients the highest levels of service, responsiveness, and accuracy.
Our goal is to boost your bottom line by reducing costs, increasing the efficiency of your business and improving the effectiveness of your mortgage operations. In short, we make your best execution happen.
ReconTrust is the name you can trust, and a partner you can rely on. Call us today to find out how to put our expertise to work for you.

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

Editor’s Note: Another example of attorney as MERS Assistant Secretary through access to password and user ID. She is an attorney with Marshall Watson and has appeared on numerous documents signing also as having limited power of attorney for Bank of America, Countrywide, Wells Fargo and probably others. Check your documents in Florida. If you see an assignment or any other document signed by her other than a pleading it is suspect, to say the least. You have the right to see the original, the basis for the “authorization,” and to conduct discovery — interrogatories, request to produce, request for admissions, depositions upon written questions and live deposition.

Caryn A. Graham – MERS Assistant Secretary

Caryn A. Graham – Attorney at Law at foreclosure mill Marshall Watson Fort Lauderdale, FL

Also listed on “Limited Power of Attorney” at Broward county records for BoA, Countrywide, and Wells Fargo.

JOHN KENNERTY-Signed for MERS as VP of Documentation on MERS assignments

JOHN KENNERTY-Signed as VP of Communications for America Servicing Company [owned by Wells Fargo] on other docs

JOHN KENNERTY-Signed as VP for Wells Fargo on other docs

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

Charles Koppa (Poppa Kappa) has done some investigative reporting on this case and we find numerous discrepancies between the police and media version of the event from actual facts. The case was typical until it ended in the homeowner’s untimely death in what police reported was a gun battle. Current reports indicate that the property is “investor hold.”

Kurt Aho was a 64 year old man with cancer. His illness made him walk awkwardly but he was completely lucid according to his daughter. Police swat team members shot him dead outside his home apparently under the mistaken belief that he was drunk (by observing his uneven gait when he walked) and that this was a case of Suicide by Cop.

Aho was in modification negotiations with Bank of America, who took over Countrywide loan servicing in the merger of those companies. His daughter reports that he thought the modification was done and that the matter was settled. But that didn’t stop a paneled truck from driving up with two occupants claiming they owned the house as a result of a foreclosure sale that day which Aho had been told was canceled due to the modification. Koppa reports that when he recently called the servicing agent they reported that the property was “on beneficiary hold.”

The title record is unclear, but it seems that the men who said they own the property were told they were “given” the property in exchange for fees worth $105,000. The fair market value of the home was $220,000 even at distressed prices.

According to Aho’s daughter he challenged the men on their right to be on his property, asking them for proof of the sale. They admitted they had no such proof since the “paperwork” had not been completed. He ordered them off the property and they refused to leave. He called his daughter to report what was going on and then grabbed his weapon and told the men if they didn’t get off his property he would shoot the tires on their van. They apparently remained, and he fulfilled his promise — he shot the tires on the van.

At this time, without a police report, we are unsure who called the police. Six squad cars including a SWAT team showed up and Aho and his house were under siege. He was calm, sitting on his air conditioning compressor when a rubber bullet hit him, obviously fired by police. He fired back with neighbors saying he obviously was aiming at the top of the police van. Police returned fire and he was dead.

Now Tiffany and Bosco, the law firm that handles the largest number of foreclosures in the area, is attempting to evict Kurt Aho, even though he is dead. His daughter has moved into the house and is attempting to fend off the attempt but needs help. From what we have seen the loan was securitized and the entire foreclosure procedure was improper even if there had been no negotiations on modification.

So to Recap, we have an improper foreclosure based upon the usual array of fabricated assignments in a securitized loan where the real creditors (investors) were neither identified nor even notified. Aho’s daughter wishes to pursue a wrongful death claim against BofA, Tiffany and Bosco, and law enforcement.

Man killed after shooting at police, neighbors ask why

Phoenix PD: Man killed after shooting at police identified

Slideshow

PHOENIX – The day after the shooting of a 64-year-old man, neighbors are asking if it had to happen.

Kurt Aho was shot and killed Tuesday night near 31st Avenue and Bell Road.

He had been living in his home for nearly 30 years, but the home had recently fallen into foreclosure and was sold at a public auction on Tuesday.

When the new owners arrived at the property, they told 64-year-old Aho they were the new owners, and asked if he needed help moving out.

Police say Aho became distraught about losing his home and began to open fire, firing four rounds at the two men’s cars. The two men, a 49-year-old and a 42-year-old, then called police.

Officers arrived at the scene, near Bell Road and 35th Avenue, around 4:30 p.m. and said they saw Aho standing in the cul de sac with a gun in his hand.

Police tried talking to Aho for over an hour and reportedly asked him to put the weapon down as he walked in and out of the house before approaching the police department’s “Bearcat”, a specialty vehicle for officer protection, in a threatening manner.

Police said Aho began shooting at officers’ vehicles, so police shot at the man using rubber bullets.

According to officials, the rubber bullets were ineffective, and Aho raised his handgun and began firing at the vehicle and officers. That is when police reportedly shot and killed him.

Aho was pronounced dead at the scene.

Neighbors told ABC 15 that Aho had been trying to work with the mortgage company to keep his house.

Denise Montesquiou says, “He knew he was in trouble and he was trying to work it out. I don’t have a bad word to say about Kurt, right or wrong.”

Another neighbor, Yair Lavi, heard that Aho was dealing with cancer, for the second time.

Lavi says there was no reason to kill Aho.

“They had a sharpshooter on top of this house, on top of that house, and three of them behind a tree. Just shoot him in the hand and he’s no longer a threat.”

Police say the investigation is continuing.

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

Bank of America to Reduce Mortgage Balances

By DAVID STREITFELD and LOUISE STORY

Bank of America said on Wednesday that it would begin forgiving some mortgage debt in an effort to keep distressed borrowers from losing their homes.

The program, while limited in scope and available by invitation only, signals a significant shift in efforts to deal with the millions of homeowners who are facing foreclosure. It comes as banks are being urged by the White House, members of Congress and community groups to do more to stem the tide.

The Obama administration is also studying whether to provide more help to people who owe more on their mortgages than their homes are worth.

Bank of America’s program may increase the pressure on other big banks to offer more help for delinquent borrowers, while potentially angering homeowners who have kept up their payments and are not getting such aid.

As the housing market shows signs of possibly entering another downturn, worries about foreclosure are growing. With the volume of sales falling, prices are sliding again. When the gap increases between the size of a mortgage and the value that the home could fetch in a sale, owners tend to give up.

Cutting the size of the debt over a period of years, however, might encourage people to stick around. That could save homes from foreclosure and stabilize neighborhoods.

“Banks are willing to take some losses now to avoid much greater losses later if the housing market continues to spiral, and that’s a sea change from where they were a year ago,” said Howard Glaser, a housing consultant in Washington and former government regulator.

The threat of a stick may be helping banks to realize that principal write-downs are in their ultimate self-interest. The Bank of America program was announced simultaneously with the news that the lender had reached a settlement with the state of Massachusetts over claims of predatory lending.

The program is aimed at borrowers who received subprime or other high-risk loans from Countrywide Financial, the biggest and one of the most aggressive lenders during the housing boom. Bank of America bought Countrywide in 2008.

Bank of America officials said the maximum reduction would be 30 percent of the value of the loan. They said the program would work this way: A borrower might owe, say, $250,000 on a house whose value has fallen to $200,000. Fifty thousand dollars of that balance would be moved into a special interest-free account.

As long as the owner continued to make payments on the $200,000, $10,000 in the special account would be forgiven each year until either the balance was zero or the housing market had recovered and the borrower once again had positive equity.

“Modifications are better than foreclosure,” Jack Schakett, a Bank of America executive, said in a media briefing. “The time has come to test this kind of program.”

That was the original notion behind the government’s own modification program, which was intended to help millions of borrowers. It has actually resulted in permanently modified loans for fewer than 200,000 homeowners.

The government program, which emphasizes reductions in interest rates but not in principal owed, was strongly criticized on Wednesday by the inspector general of the Troubled Asset Relief Program for overpromising and underdelivering.

“The program will not be a long-term success if large amounts of borrowers simply redefault and end up facing foreclosure anyway,” the inspector general, Neil M. Barofsky, wrote in his report. One possible reason is that even if they get mortgage help, many borrowers are still loaded down by other kinds of debt like credit cards.

Bank of America said its new program would initially help about 45,000 Countrywide borrowers — a fraction of the 1.2 million Bank of America homeowners who are in default. The total amount of principal reduced, it estimated, would be $3 billion.

The bank said it would reach out to delinquent borrowers whose mortgage balance was at least 20 percent greater than the value of the house. These people would then have to demonstrate a hardship like a loss of income.

These requirements will, the bank hopes, restrain any notion that it is offering easy bailouts to those who might otherwise be able to pay. “The customers who will get this offer really can’t afford their mortgage,” Mr. Schakett said.

Early reaction to the program was mixed.

“It is certainly a step in the right direction,” said Alan M. White, an assistant professor at Valparaiso University School of Law who has studied the government’s modification program.

But Steve Walsh, a mortgage broker in Scottsdale, Ariz., who said he had just abandoned his house and several rental properties, called the program “another Band-Aid. It probably would not have prevented me from walking away.”

Even before Bank of America’s announcement, reducing loan balances was growing in favor as a strategy to deal with the housing mess. The percentage of modifications that included some type of principal reduction more than quadrupled in the first nine months of last year, to 13.2 percent from 3.1 percent, according to regulators.

Few of these mortgages were owned by the government or private investors, however. Banks tended to cut principal only on mortgages they owned directly. Wells Fargo, for instance, said it had cut $2.6 billion off the amount owed on 50,000 severely troubled loans it acquired when it bought Wachovia.

Bank of America said it would be offering principal reduction for several types of exotic loans. Some of the eligible loans are held in the bank’s portfolio, but the program will also apply to some loans owned by investors for which Bank of America is merely the manager.

The bank developed the program partly because of “pressure from everyone,” Mr. Schakett said. Even the investors who owned the loans were saying “maybe we should be doing more,” he said.

Substantial pressure came from Massachusetts, which won a significant suit last year against Fremont Investment and Loan, a subprime lender. The Supreme Judicial Court ruled that some of Fremont’s loans were “presumptively unfair.” That gave the state a legal precedent to pursue Countrywide.

“We were prepared to bring suit against Bank of America if we had not been able to reach this remedy today, which we have been looking for for a long time,” said the Massachusetts attorney general, Martha Coakley.

Bank of America agreed to a settlement on Wednesday with Ms. Coakley that included a $4.1 million payment to the state.

Reducing principal is widely endorsed, in theory, as a cure for foreclosures. The trouble is, no one wants to absorb the costs.

When the administration announced a housing assistance program in the five hardest-hit states last month, officials explicitly opened the door to principal forgiveness. Despite reservations expressed by the Treasury, the White House and Housing and Urban Development officials have continued to study debt forgiveness in areas with lots of so-called underwater homes, according to two people with knowledge of the matter.

On a national scale, such a program risks a political firestorm if the banks are unable to finance all the losses themselves. Regulators like the comptroller of the currency and the Federal Reserve have been focused on maintaining the banks’ capital levels, which could be hurt by large-scale debt forgiveness.

“You have to be very careful not to design a program that would change people’s fundamental behavior across the country in a destabilizing way or would be widely perceived as unfair to people who are continuing to pay,” Michael S. Barr, an assistant secretary of the Treasury, said early this year.

Policy makers have been hoping the housing market would improve before any significant principal reduction program was needed. But with the market faltering again, those wishes seem to have been in vain.

Bank of America’s announcement came within hours of a fresh report that underscored the renewed weakness. Sales and prices are dropping, leaving even more homeowners underwater.

Sales of new homes fell in February to their lowest point since the figures were first collected in 1963, the Commerce Department said. Sales are about a quarter of what they were in 2003, before the housing boom began in earnest.

“It’s shocking,” said Brad Hunter, an analyst with the market researcher Metrostudy. “No one would ever have imagined it would go this low.”

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

Bank of America – Mortgage – Business – Financial Services – Banking Services

The case, filed in U.S. District Court, claims that Bank of America systematically slows or thwarts Washington homeowners’ access to Troubled Asset Relief Program (TARP) funds by ignoring homeowners’ requests to make reasonable mortgage adjustments or other alternative solutions that would prevent homes from being foreclosed.

Bank of America accepted more than $25 billion in government bailout money financed by taxpayer dollars earmarked to help struggling homeowners avoid foreclosure. One in eight mortgages in the United State is currently in foreclosure or default.

Bank of America, like other TARP-funded financial institutions, is obligated to offer alternatives to foreclosure and permanently reduce mortgage payments for eligible borrowers struck by financial hardship but, according to the lawsuit, hasn’t lived up to its obligation.

Bank of America services more than 1 million mortgages that qualify for financial relief, but have granted only 12,761 of them permanent modification, reported the U.S. Treasury Department.

According to the TARP regulations, banks must gather information from the homeowner, and offer a revised three-month payment plan for the borrower. If the homeowner makes all three payments under the trial plan, and provides the necessary documentation, the lender must offer a permanent modification.

Bank of America continues to ignore TARP regulations and instead creates more financial pressure on homeowners, the court filing states.

The lawsuit charges that Bank of America intentionally postpones homeowners’ requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by taxpayer dollars financing TARP-funds and also collects higher fees and interest rates associated with stressed home loans.

If you received an inadequate response from Bank of America for a home loan modification request after April 13, 2009, you are encouraged to join the suit.

Please visit: http://www.hbsslaw.com for more info.

About Hagens Berman

Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in San Francisco, Seattle, Chicago, Boston, Los Angeles, and Phoenix. Since 1993, HBSS continues to successfully fight for consumer rights in large, complex litigation. More about the law firm and its successes can be found at http://www.hbsslaw.com.

4closureFraud

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

Editor’s Note: The primary reason for foreclosing on the wrong house is that the wrong party (not the creditor) is initiating the foreclosure and therefore lacks sufficient information about the loan, the property or the debtor.

These events are corroboration of stories previously published showing that loans were placed in “pools” even though they never closed and therefore didn’t exist. The mere application of a loan was sufficient for “assignment” of the “loan.” And let’s not forget that the “assignment” typically violates even the terms of the PSA either as to time cut-off or the requirement of recording or recordable form.

Repossession hell: 5 extremely wrongful foreclosures

The Pittsburgh woman whose bank ‘accidentally’ took everything she owned—even her macaw parrot—plus 4 more homeowner horror stories

Home foreclosures: The opposite of the American dream. Photo: Corbis

A Pittsburgh woman is suing the Bank of America after it wrongfully foreclosed on her home, ransacking her possessions, cutting power lines, padlocking her doors, and confiscating her pet parrot. Angela Iannelli, 46—who was away when repo men made off with her beloved blue macaw, Luke—says she’s now “afraid to set foot in her house.” She’s filed a civil suit claiming that bank representatives refused to reveal Luke’s “whereabouts” and told her they “were tired of hearing from her.” (Watch an ABC report about Angela Iannelli’s foreclosed home.) Here, four more victims of erroneous repossession:

They took her wedding dress
Last December, Nilly Mauck, 31, came home to find her décor brutally simplified. Contractors assigned to repossess condo No. 1156 had mistakenly emptied No. 1157, her Las Vegas apartment of two years. Though she’s demanded “$100,000 to $200,000″ in compensation for them taking, well, everything (including her wedding dress), the Realtor has offered only $5,000. Mauck says she’s seeking legal advice and learning “to live with the clothes on her back.”

Wrong house, but thanks for rotten halibut
Dr. Alan Schroit got a “putrid” surprise when he arrived at his Galveston, Texas, vacation home last October. Bank of America (“with which he has neither a relationship nor a mortgage”) had repossessed his home and turned off the utilities, leaving 75 pounds of frozen salmon and halibut (spoils of an Alaskan fishing trip) to rot in the fridge. Schroit, who’d been planning to grill the fish for 30 guests the next night, is suing the bank.

Luckily, he was not in a mood to swim
Kissimmee, Fla., resident Denroy Bell was living in London, England, when a confused Kissimmee bank attempted to foreclose on his Florida home in 2008. The sloppy institution, Citi-Residential, changed the locks and drained the swimming pool. “It was like an army came up and took over the house,” said Esther Goshop, Bell’s neighbor. Unusually gracious, Bell has asked only that Citi-Residential refill his pool and restore his locks.

Promises, promises …
A jury punished Countrywide Home Loans in January 2009 for failing to notice that it was repossessing and selling the wrong Las Vegas condo back in 2003. Sgt. Gerald Thitchener and his wife, Katrina, absent at the time, were awarded $3.4 million in damages. “[Countrywide] never even said they were sorry,” noted one juror, “[though they did say] it would never happen again.”

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BofA Title claims

BofA Wants $535M From Title Insurers

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