News, Research & Insights for American Homeowners, Patriots & Constitutional Conservatives
Yesterday, the American Banker reported that Chase has stopped filing lawsuits to collect consumer debtors. Moreover, they did it quietly and quickly. With concerns over sloppy procedures in debt collection, akin to the robo-signing problems in the mortgage industry, this news was quite interesting.
H/t to our reader who pointed me to the story.
Will Greece reach a voluntary deal with its creditors to write down its debt by 50% in the coming weeks? Will it default? ... or will its official patrons blink, pay up, and let the creditors off the hook? I hear at least two uber-expert Euro-watchers have taken opposite sides of the bet on that one. I bet nobody wins.
This Wall Street Journal article is rather optimistic, and somewhat incoherent on the trade-offs. Apparently private creditors are willing to take a lower interest rate in exchange for a change in governing law from Greek to English (and presumably the ability to sue in London/submission to jurisdiction) in the exit instruments--which makes some sense. But the piece then proceeds to equate English law with available collateral, which comes right out of nowhere. Emerging market sovereigns routinely submit to foreign law, but virtually no one puts up collateral. As a result, all can sue, but none can levy. Just ask Argentina's creditors, who just celebrated the tenth anniversary of the sovereign asset chase under New York, English, and all manner of other foreign laws. But if all it takes is a switch to English law, we have a deal. I doubt it is that simple.
The article is also muddled on the now-notorious business of collective action clauses and their implications for Greek Credit Default Swaps. Although the vast majority of Greece's debt contracts are under Greek law and have no amendment provisions, and although Greece could try to amend these by legislative fiat (risking lawsuits at home and in Europe), the dominant scenario appears to meld contract and legislation: pass a law that allows a super majority of creditors to bind the dissenting minority. The effect of such a law would be to retrofit majority amendment clauses across the Greek debt stock. If the majority binds the minority, the deal goes forward. (The treatment of Greek debt in official hands would be crucial here).
Such a move almost certainly triggers a credit event under Greek CDS contracts: the new terms would be "binding on all" creditors, which is the litmus test under ISDA documentation. Until now, avoiding CDS triggers has been the line in the sand for key official and private players in this drama. Hence the obsession with characterizing the deal as "voluntary." But if coersion is now on the table, why mess around with the inadequate 50% and contract-legislation hybrids? (I suspect the answer is Euro politics.)
As an aside, the article suggests that major banks are lobbying against a credit event--does this mean that they are not hedged? ... that they sold CDS? ... to whom?
One split-the-baby scenario might be to pass the law grafting collective action clauses onto Greek bonds, but then to refrain from using the clauses to coerce creditors into the deal. Plenty of debtors who had collective acion clauses in their contracts did not use them for various reasons; however, the fact that the option was available might have helped creditors make up their minds. I think this route would be too cute to be seriously considered, but you never know.
Mitu Gulati and Jeromin Zettelmeyer have the only sensible take I have seen on the voluntary/involuntary dance: creditors will take a deep haircut voluntarily if they think the alternative is worse. The alternative could be a default, or another restructuring soon, and on nastier terms. Most sovereign restructurings until now have taken place in the shadow of default. In Greece, default was formally taken off the table at the outset for political reasons. But no one can eliminate the possibility of another restructuring--whether that one is voluntary or involuntary need not be decided today. All you need to know is that the next deal would be worse than the deal now on offer. Under the circumstances, the proposition seems like a no-brainer. Can it last?
Republican presidential frontrunner Mitt Romney made it quite clear that he does not support any type of foreclosure relief for the millions of Americans at risk of losing their homes. Incredibly, he criticized President Obama for not foreclosing on America’s homeowners fast enough.
To-date, roughly 7.6 million foreclosures have been completed, and another 7.4 million foreclosures are expected by 2016.
When asked by journalists on the editorial board of the Las Vegas Review Journal, what he would do to jumpstart housing markets, Romney said:
“Don’t try to stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up. The Obama administration has slow walked the foreclosure process … that has long existed and as a result we still have a foreclosure overhang.”
The presidential candidate seems to have overlooked the fact that there has been nothing stopping investors from buying homes, fixing them up and renting them out, and the Obama Administration’s programs to stem the tide of foreclosures have all failed, albeit to varying degree. Likewise, Romney also seems to be oblivious to the now well-documented and widespread fraud that bankers have been accused of perpetrating against homeowners in the foreclosure process.
Various states have already filed lawsuits against several of the nation’s largest banks and mortgage servicers, perhaps most notably by Nevada’s Attorney General, Catherine Cortez, whose second amended complaint is nothing short of a scathing indictment of their illegal practices.
Additionally, many other large banks have been hit with allegations of engaging in unsafe and unsound or even illegal practices, and have received formal regulatory sanctions from federal bank regulators, including the Office of the Comptroller of the Currency. Banks attempting to foreclose on borrowers have routinely forged signatures and fabricated documents, and an Ally Financial employee, Jeffrey Stephens, last fall admitted that he signed 10,000 foreclosure related documents a month without validating their claims.
This process, among others, has resulted in the overstatement of a borrowers’ debt and the charging of erroneous fees. In the most egregious examples of incompetence, banks have attempted to foreclose on homes that have been entirely paid off or owned by other banks.
ProPublica recently reported that, according to a federal audit, Ally Financial, in more than 80 percent of cases, incorrectly calculated the amount of income earned by borrowers applying for loan modifications as part of the HAMP program. Yet, even in the face of such overwhelming evidence of bank malfeasance, Mr. Romney says let the free market take its course.
The Obama Administration lost no time making a political advantage out of Romney’s statements, although there’s no question that the administration’s track record on housing leaves much to be desired. The president had said that his HAMP initiative would help 3-4 million remain in their homes and avoid foreclosure, and although only 657,044 have received permanent modifications through the program, over 2 million homeowners have had their loans modified through in-house programs offered by banks.
Still, the administration has yet to sanction any of the banks for mistreatment of borrowers, which has been disappointing to say the least.
Ben LaBolt, a spokesperson for the Obama campaign, said:
“Mitt Romney’s message to Nevada homeowners struggling to pay their mortgage bills is simple: you’re on your own, so step aside. Instead of offering an opportunity, like President Obama has, for responsible homeowners who were scammed by their lender or trapped by falling housing prices to refinance, Governor Romney believes we should instead let the foreclosure process ‘run its course and hit the bottom’ so that investors can come in and make a quick buck after families lose their homes.”
Reports are that at least one third of US homeowners are currently underwater, although that number is certainly much higher when looking at the most populated areas, and when you consider the number of vacant homes not yet on the market. Factoring in the number of adjustable rate and option ARM loans that have not yet adjusted higher, and it’s easy to envision the number of foreclosures to come being significantly higher than current forecasts indicate.
Most troubling is the reality that no programs intended to mitigate the number of future foreclosures are currently in the works, and with Washington about to be consumed by the 2012 elections, it seems that nothing will even be contemplated until 2013. By then, I’m afraid the current situation will have deteriorated further, causing unemployment to increase and making the problem even more difficult to address.
Mr. Romney seems to be oblivious to any of these factors, preferring to simply allow the free market to do whatever it will do, regardless of the fact that untold numbers of homeowners have been the victims of fraudulent lending or foreclosure practices, and that the cause of the crisis was not the free market, but rather the destruction of the credit markets when investors lost trust in the ratings of securities sold by Wall Street’s investment bankers.
Romney has also offered a 160-page economic program and it offers nothing in terms of specific solutions to the housing crisis and in fact barely mentions it. And at the recently held Republican candidate debate, held in Las Vegas last Tuesday, none of the other candidates mentioned any thing close to a solution to the housing and foreclosure crisis. Besides Romney, only Rick Santorum had something to say:
“People who did things that were wrong, invested in things, took risks, were bailed out. And the folks who acted responsibly are now getting hurt because their houses have gone down in value. We need to let the markets work.”
Mr. Romney’s statements, along with Santorum’s and the absolute silence of the other GOP candidates, make clear that for many homeowners trapped in this tragic situation, the choice of candidate next year will be one of bad or worse. Let’s just hope they manage to see clearly that as bad as the Obama Administration has been, the answer cannot be allowed to be “make things worse,” lest we find that we have left the proverbial frying pan for the unbearable option of a life in fire.
Mandelman out.
Republican presidential frontrunner Mitt Romney made it quite clear that he does not support any type of foreclosure relief for the millions of Americans at risk of losing their homes. Incredibly, he criticized President Obama for not foreclosing on America’s homeowners fast enough.
To-date, roughly 7.6 million foreclosures have been completed, and another 7.4 million foreclosures are expected by 2016.
When asked by journalists on the editorial board of the Las Vegas Review Journal, what he would do to jumpstart housing markets, Romney said:
“Don’t try to stop the foreclosure process. Let it run its course and hit the bottom. Allow investors to buy homes, put renters in them, fix the homes up and let it turn around and come back up. The Obama administration has slow walked the foreclosure process … that has long existed and as a result we still have a foreclosure overhang.”
The presidential candidate seems to have overlooked the fact that there has been nothing stopping investors from buying homes, fixing them up and renting them out, and the Obama Administration’s programs to stem the tide of foreclosures have all failed, albeit to varying degree. Likewise, Romney also seems to be oblivious to the now well-documented and widespread fraud that bankers have been accused of perpetrating against homeowners in the foreclosure process.
Various states have already filed lawsuits against several of the nation’s largest banks and mortgage servicers, perhaps most notably by Nevada’s Attorney General, Catherine Cortez, whose second amended complaint is nothing short of a scathing indictment of their illegal practices.
Additionally, many other large banks have been hit with allegations of engaging in unsafe and unsound or even illegal practices, and have received formal regulatory sanctions from federal bank regulators, including the Office of the Comptroller of the Currency. Banks attempting to foreclose on borrowers have routinely forged signatures and fabricated documents, and an Ally Financial employee, Jeffrey Stephens, last fall admitted that he signed 10,000 foreclosure related documents a month without validating their claims.
This process, among others, has resulted in the overstatement of a borrowers’ debt and the charging of erroneous fees. In the most egregious examples of incompetence, banks have attempted to foreclose on homes that have been entirely paid off or owned by other banks.
ProPublica recently reported that, according to a federal audit, Ally Financial, in more than 80 percent of cases, incorrectly calculated the amount of income earned by borrowers applying for loan modifications as part of the HAMP program. Yet, even in the face of such overwhelming evidence of bank malfeasance, Mr. Romney says let the free market take its course.
The Obama Administration lost no time making a political advantage out of Romney’s statements, although there’s no question that the administration’s track record on housing leaves much to be desired. The president had said that his HAMP initiative would help 3-4 million remain in their homes and avoid foreclosure, and although only 657,044 have received permanent modifications through the program, over 2 million homeowners have had their loans modified through in-house programs offered by banks.
Still, the administration has yet to sanction any of the banks for mistreatment of borrowers, which has been disappointing to say the least.
Ben LaBolt, a spokesperson for the Obama campaign, said:
“Mitt Romney’s message to Nevada homeowners struggling to pay their mortgage bills is simple: you’re on your own, so step aside. Instead of offering an opportunity, like President Obama has, for responsible homeowners who were scammed by their lender or trapped by falling housing prices to refinance, Governor Romney believes we should instead let the foreclosure process ‘run its course and hit the bottom’ so that investors can come in and make a quick buck after families lose their homes.”
Reports are that at least one third of US homeowners are currently underwater, although that number is certainly much higher when looking at the most populated areas, and when you consider the number of vacant homes not yet on the market. Factoring in the number of adjustable rate and option ARM loans that have not yet adjusted higher, and it’s easy to envision the number of foreclosures to come being significantly higher than current forecasts indicate.
Most troubling is the reality that no programs intended to mitigate the number of future foreclosures are currently in the works, and with Washington about to be consumed by the 2012 elections, it seems that nothing will even be contemplated until 2013. By then, I’m afraid the current situation will have deteriorated further, causing unemployment to increase and making the problem even more difficult to address.
Mr. Romney seems to be oblivious to any of these factors, preferring to simply allow the free market to do whatever it will do, regardless of the fact that untold numbers of homeowners have been the victims of fraudulent lending or foreclosure practices, and that the cause of the crisis was not the free market, but rather the destruction of the credit markets when investors lost trust in the ratings of securities sold by Wall Street’s investment bankers.
Romney has also offered a 160-page economic program and it offers nothing in terms of specific solutions to the housing crisis and in fact barely mentions it. And at the recently held Republican candidate debate, held in Las Vegas last Tuesday, none of the other candidates mentioned any thing close to a solution to the housing and foreclosure crisis. Besides Romney, only Rick Santorum had something to say:
“People who did things that were wrong, invested in things, took risks, were bailed out. And the folks who acted responsibly are now getting hurt because their houses have gone down in value. We need to let the markets work.”
Mr. Romney’s statements, along with Santorum’s and the absolute silence of the other GOP candidates, make clear that for many homeowners trapped in this tragic situation, the choice of candidate next year will be one of bad or worse. Let’s just hope they manage to see clearly that as bad as the Obama Administration has been, the answer cannot be allowed to be “make things worse,” lest we find that we have left the proverbial frying pan for the unbearable option of a life in fire.
Mandelman out.
In the inane and insane case the United States does skip a debt payment, please let us skip the comparisons to Greece. Greece is really out of money and probably should have bitten the D-bullet (restructured, re-profiled, whatever) some time ago. We are not out of money, yet might default anyway--which makes us surreally more like Ecuador circa 2008. Like Ecuador's recent D-dalliance, a U.S. failure to pay would be purely discretionary, a rare case of unwillingness, not inability, to pay.
Quick review: sovereign debt is debt with limited enforcement capacity. Sovereigns are immune; therefore, if they default on their debts, creditors will find it virtually impossible to collect. Case in point: Argentina defaulted on about $100 billion in 2001; ten years and thousands of lawsuits later, there has been one attachment of a few million dollars (not sure if anyone has actually been paid). This leads to a theoretical conundrum: if they can default with impunity, why do governments ever repay? (... and why does anyone lend to them?) Mysteriously, even the most hopelessly overindebted governments tend to pay their debts in full and on time until the bitter end, often at a high cost to their economies. The policy challenge has been to get governments to restructure sooner, not to pay better.
The usual answer to the conundrum is that governments worry about their market reputation, and also a dash about enforcement (defending lawsuits and squirreling away assets is a headache, even if you win in the end). But a much, much more interesting explanation comes out of recent empirical research. It turns out that overindebted governments are most worried about the domestic implications of default: bank runs, currency plunges, riots, revolutions, and such. Governments really hate bank runs and revolutions, and so keep paying until the money runs dry and then some.
That is why virtually all sovereign debt restructurings seem to come of credible inability to pay, as measured by conventional metrics, such as debt/GDP, debt/exports etc. Pure unwillingness to pay is wildly rare. Ecuador is arguably the closest it has come in recent years. Although its medium-term prospects were not all rosy, in late 2008, Ecuador had enough oil revenues to make the foreseeable debt payments. Nevertheless, the new government made the political decision (which I discussed here) that much of the debt stock was illegitimately incurred, and told the creditors it would not pay them. With bond prices down on the announcement, Ecuador launched a successful debt buyback a few months later, and got substantial debt relief.
Similarly (!), the United States is not now running out of money, though some might argue about its medium-term prospects if nothing is done about taxing and spending. Defaulting now to make a point about our medium-term prospects is pure unwillingness to pay--indeed, our case would be even purer than Ecuador's.
If all goes to plan, in just a few days or weeks, Ecuador and the United States will go off into the sunset, united in our plunging common currency and theoretical significance for sovereign debt studies. We shall teach the world a lesson: that rich or poor, sovereign ability to pay will always be a function of domestic politics, and awfully hard to tell apart from sovereign willingness to pay ... except when you are really rich.
If the the foreclosure crisis and battle against the banksters was an actual conventional war, you know, like the kind of thing we usually refer to as a “police action,” or “peacekeeping mission,” (white phosphorus, after all is just “Freedom Powder,” right?) then O. Max Gardner III, or Max, when not reading his name off of his business card, would unquestionably be a 5-Star General… I picture a cross between General Patton and Adlai Stevenson… with a voice that sounds like it might have just walked out of Floyd’s barbershop on Mayberry R.F.D.
As most of my readers know, I didn’t come to this battleground from the real estate or mortgage industries, so I’ve had to learn a whole heck of a lot to really understand things, keep up with the latest insanity, and write articles that… well, that matter. There are so many people that have helped me along the way that I couldn’t possibly thank them all, but one stands out above the rest… MAX.
The very first time we spoke on the phone the call lasted over three hours… and this is a lawyer who’s busy beyond belief. During Max’s career, he has tried 102 lawsuits in front of a jury… all but two he won. And one of those two he re-tried and won the second time out. That’s not luck… he’s just that good at what he does… and more than anything else, what he does is what he knows.
Webbley, more commonly known today as the O. Max Gardner House, was the home of a key figure in the State’s famous “Shelby Dynasty,” O. Max Gardner (1882-1947), Max’s grandfather, who was a State Senator, the State’s youngest Lieutenant Governor, and later as Governor – 1929 to 1933.
Since 2006, over 800 attorneys from all over the country have graduated from Max’s Bankruptcy Boot Camp, ready, willing and able to take on the banksters and other creditors and servicers like few others could. They pay thousands of dollars and make the pilgrimage to Shelby, North Carolina to spend over 4 days learning from the best of the best.
I was honored that Max invited me to attend… and although I’m not a lawyer… I can tell any attorney reading this that it’s worth ten-fold what it costs… in fact when you combine the knowledge, the contacts and relationships, and the tangible tools and ongoing support one receives, it’s the definition of priceless. I can’t imagine another way to get what you do in less than a week at Max’s Boot Camp.
And it’s not just about bankruptcy, so don’t let that term fool you. Max is a consumer attorney who finds advantages in bankruptcy court, but I’m quite sure could try cases in any court in the country were there reason to do so. It’s all about the battle against the banksters, the creditors, the servicers, and all the rest who profit from illegal and unethical practices, and egregious and undisclosed fees and charges.
Okay… I’ll shut up now… click the button below… and you’ll hear a Mandelman Matters PODCAST… A PODCAST THAT MATTERS, if you will. From start to finish, it’s unquestionably MAX GARDNER at his candid best.
You’ll hear Max talk about the causes of the financial meltdown and foreclosure crisis… about the robo-signers and what they mean to homeowners and foreclosure defense attorneys… and about the banksters themselves and how they profited immensely from their fraudulent abuse of the the securitization process.
You’ll hear him talk about what’s ahead too… what he thinks lawyers and homeowners should be thinking about today and tomorrow. I don’t think there’s anyone has been doing this as long or as successfully as Max, and therefore no one has his unique perspective on the crisis that is breaking the back of the American working class, and preventing our nation from recovering economically. I hope you enjoy listening to it, even half as much as I enjoyed doing it.
Here he is… my good friend… and yours… Max Gardner!
Mandelman out.
CLICK HERE TO PLAY THE MP3 VERSION OF THE PODCAST: MOST COMPUTERS
CLICK BELOW TO PLAY AN ENHANCED VERSION OF THE PODCAST: FOR MAC USERS
If the the foreclosure crisis and battle against the banksters was an actual conventional war, you know, like the kind of thing we usually refer to as a “police action,” or “peacekeeping mission,” (white phosphorus, after all is just “Freedom Powder,” right?) then O. Max Gardner III, or Max, when not reading his name off of his business card, would unquestionably be a 5-Star General… I picture a cross between General Patton and Adlai Stevenson… with a voice that sounds like it might have just walked out of Floyd’s barbershop on Mayberry R.F.D.
As most of my readers know, I didn’t come to this battleground from the real estate or mortgage industries, so I’ve had to learn a whole heck of a lot to really understand things, keep up with the latest insanity, and write articles that… well, that matter. There are so many people that have helped me along the way that I couldn’t possibly thank them all, but one stands out above the rest… MAX.
The very first time we spoke on the phone the call lasted over three hours… and this is a lawyer who’s busy beyond belief. During Max’s career, he has tried 102 lawsuits in front of a jury… all but two he won. And one of those two he re-tried and won the second time out. That’s not luck… he’s just that good at what he does… and more than anything else, what he does is what he knows.
Webbley, more commonly known today as the O. Max Gardner House, was the home of a key figure in the State’s famous “Shelby Dynasty,” O. Max Gardner (1882-1947), Max’s grandfather, who was a State Senator, the State’s youngest Lieutenant Governor, and later as Governor – 1929 to 1933.
Since 2006, over 800 attorneys from all over the country have graduated from Max’s Bankruptcy Boot Camp, ready, willing and able to take on the banksters and other creditors and servicers like few others could. They pay thousands of dollars and make the pilgrimage to Shelby, North Carolina to spend over 4 days learning from the best of the best.
I was honored that Max invited me to attend… and although I’m not a lawyer… I can tell any attorney reading this that it’s worth ten-fold what it costs… in fact when you combine the knowledge, the contacts and relationships, and the tangible tools and ongoing support one receives, it’s the definition of priceless. I can’t imagine another way to get what you do in ;ess than a week at Max’s Boot Camp.
And it’s not just about bankruptcy, so don’t let that term fool you. Max is a consumer attorney who finds advantages in bankruptcy court, but I’m quite sure could handle any courtroom in the country. It’s all about the battle against the banksters, the creditors, the servicers, and all; the rest who profit from illegal and unethical practices, and egregious and undisclosed fees and charges.
Okay… I’ll shut up now… click the button below… and you’ll hear a Mandelman Matters PODCAST… A PODCAST THAT MATTERS, if you will. From start to finish, it’s unquestionably MAX GARDNER at his candid best.
You’ll hear Max talk about the causes of the financial meltdown and foreclosure crisis. About the robo-sogners and what it means to homeowners and attorneys. About the banksters themselves and how they profited immensely from their fraudulent abuse of the the securitization process.
You’ll hear him talk about what’s ahead too. And what lawyers and homeowners should be thinking about today and tomorrow. I don’t think there’s anyone has been doing this as long or as successfully as Max, and therefore no one has his unique perspective on the crisis that is breaking the back of the American working class, and preventing our nation from recovering economically. I hope you enjoy listening to it, even half as much as I enjoyed doing it.
Here he is… my good friend… and yours… Max Gardner!
Okay, so I’m back from vacation and trying to stay abreast of what’s going on with the Kramer & Kaslow mass joinder lawsuits, which are being tried by attorney Phillip Kramer whom I interviewed in late February after I received copies of mailings from homeowners soliciting participation in a lawsuit settlement that I found deceptive or misleading.
The return address on the mailer indicated that the law firm of Kramer & Kaslow had sent it, but Mr. Kramer clearly stated that he never authorized and had never before seen the mailing that I had received, and that in fact his firm had never marketed itself other that through its website, www.kramer-kaslow.com.
In Mr. Kramer’s own words, as I included in my article:
As we discussed, I became aware of the mass mailing piece bearing my firm’s name when I saw it on your website. I immediately called the toll free number, was outraged to learn that the people handling the calls were falsely purporting to be with my firm, and I asked to speak with a supervisor.
I confirmed that the mailer was prepared by and sent by a law firm that I know. The mailer was NOT approved by me. I did NOT authorize the mailer. I would NOT have authorized the mailer if I had been asked in advance.
My cases are progressing nicely, and I don’t need to mass market every homeowner. I’d rather organically grow my client base.
I’m not opposed to representing a large number of clients in my mass joinder cases. In fact, that is the idea of delivering economy of scale to clients and being able to properly litigate against banks. However, I am opposed to careless and aggressive marketing campaigns, and I never was asked, nor did I approve, that law firm to market under my name, and/or to pose as my law firm when speaking with prospective clients.
In fact, I have never marketed these mass joinder cases, I have not approved any marketing under my name, nor have I authorized anyone to pose as me or to solicit prospective clients under my name. As I become aware of people doing these things, I confront them and shut them down.
I think it was maybe a week later that Phil Kramer sent out, I don’t know how many letters to websites that were not authorized to market participation in his mass joinder lawsuit, demanding that they cease and desist immediately. Additionally, Mr. Kramer also told me during the interview that he had not and would not approve of any outbound telemarketing, saying: “I know of no outbound calling. If asked, I would not approve of that.
Now, the St. Louis Better Business Bureau is warning homeowners to “steer clear” of similar mailings promoting participation in mass joinder lawsuits, said to be capable of forcing mortgage servicers to reduce loan payments.
The St. Louis BBB is reporting that several property owners in Boone County, Missouri, have recently received letters stating that their mortgages “may be eligible for national litigation aimed at fraudulent lender actions,” but the letters did not include any company’s name, nor did they include a return address.
The same identical notice, however, was received by a homeowner in Long Beach, California, and it showed that it was mailed from “Litigation Settlement Department at 3829 Veterans Memorial Parkway, St. Peters, Missouri.”
According to records obtained from Missouri’s Secretary of State, the St. Peters address belongs to two companies: Diversified Financial Protection Agency, which filed for incorporation on February 16, 2011, and Capital Debt Management, which filed in October 2009. John Jacob Ehlinger is listed as president of Capital Debt Management. He is also the only incorporator of Diversified Financial Protection Agency.
The St. Louis BBB issued two warnings about Mr. Ehlinger’s Capital Debt Management company over the last year, in response to consumers complaining that they paid thousands of dollars to Capital Debt Management for assistance with their loan modifications, but received nothing in return. The company’s response has placed the blame on its partners in St. Louis and California that have failed to do the promised mortgage modification work.
A St. Louis BBB investigator paid a visit to the address on Veterans Memorial Parkway only to find Capital Debt Managements signage removed, and on the front door and in the lobby it now read: Diversified Financial Protection Agency. Not surprisingly, the St. Louis BBB says that no one at either company is responding to requests for information.
Investigators have determined that Diversified Financial Protection Agency, Capital Debt Management, or both firms, are apparently now partners of Mass Litigation Alliance of Hawthorne, California, because both the Boon County and California solicitations direct homeowners to call the same toll-free phone number, which was also found listed on the Mass Litigation Alliance website.
The problem is that it’s probably not listed there anymore, because the Mass Litigation Alliance website isn’t there anymore either. Here’s what you’ll find on the site’s only page:
MASS LITIGATION ALLIANCE, PC
A Professional Law Corporation
PH: (424) 456-4080
My name is Matthew Davis, and I am the President of Mass Litigation Alliance, A Professional Law Corporation. It has become clear to me in recent weeks that the role of Mass Litigation Alliance in mass joinder lawsuits has been widely exaggerated. Mass Litigation Alliance is a law firm hired by attorney Philip Kramer, to facilitate intake consultations to prospective clients for mass joinder litigation. This role includes a consultation with an MLA staff attorney to ensure clients have an accurate and thorough understanding of the mass joinder litigation process in order to proceed forward with the lead litigation firm of Kramer and Kaslow PC.
Mr. Kramer is a veteran litigator and has filed a number of mass joinder lawsuits against major lenders. Mass Litigation Alliance is not the firm retained by clients, and does not represent clients in litigation. When Mass Litigation Alliance was asked to begin providing consultations, the clients had already signed retainers and paid fees to the lead litigating attorneys of Philip Kramer and Mitchell Stein. Since that time, MLA began facilitating consultations exclusively for Mr. Kramer. Mass Litigation Alliance has never accepted client funds.
Consequently, Mass Litigation Alliance has never authorized any mailers or unsolicited marketing materials to be sent out. If you have received anything in the mail indicating that it is from Mass Litigation Alliance, or individuals claiming to represent Mass Litigation Alliance, please fax it to my attention at (424) 456-4082 so I may pursue action against them.
Mass Litigation Alliance is not the only firm offering mass joinder litigation services. In fact, the California Department of Real Estate and a number of District Attorneys across the nation have issued warnings to consumers of scam operations making promises of extraordinary home mortgage relief. Some may go so far as to promise the immediate stopping of foreclosure for prospective plaintiffs. I know of no mass joinder cases that are in settlement talks. Therefore, if you are in receipt of any materials that claim settlement funds from your lender are available, or other similar mortgage or foreclosure relief is pending your response, please direct those unlawful solicitations to the authorities.
Mass joinder litigation is a complex legal decision a homeowner should consider only after carefully reviewing the materials authorized to describe the litigation cases. The cases filed by Mr. Kramer represent a legal action against various lenders arguing the fundamental security of the mortgage process. These cases are filed with the court and are all public record. The complaints are well written and outline the causes of action. I encourage current and potential clients to read through these thoroughly. A homeowner should take the time to read all qualified materials in determining if the decision to litigate is right for them.
As of March 31, 2011, contracts between Mass Litigation Alliance and Philip Kramer have expired. Therefore, MLA is not currently providing consultative services on behalf of Mr. Kramer’s firm or participating in Kramer & Kaslow’s mass joinder actions. Rest assured, the expiration of these contracts will not affect clients of Philip Kramer, or his litigation cases. I am confident the law firm of Kramer and Kaslow will continue to try the cases and take the fight to the major lenders and mortgage firms. I have a high respect for Mr. Kramer and wish him great success in his litigation against the banks.
Now, to be clear, my understanding from speaking with Phil was that he had started Mass Litigation Alliance with attorney Matthew Davis to consolidate the process of accepting new clients under one roof in order to exercise tight controls, but that homeowners should only contact his firm’s offices and speak with one of the firm’s attorneys before writing anyone a check or signing any sort of retainer agreement.
Bottom-line: Be careful out there.
So, it does appear that there are still firms out there sending out mailers promoting Kramer’s mass joinder lawsuit in very deceptive ways. The mailer received by the homeowner in Long Beach, California, that was also received by the St. Louis BBB, for example, showed that it was mailed from the:
“Litigation Settlement Department at 3829 Veterans Memorial Parkway, St. Peters, Missouri.”
And the use of the word “settlement” here is beyond inappropriate… in fact, it’s a lie.
Phillip Kramer’s mass litigation lawsuits, of which there appear to be six, are not even close to being “settlements,” in fact the oldest three of his cases were filed in Los Angeles Superior Court on December 30, 2010… Nelson v. Wells Fargo, Marquette v. One West, and Wagner v. Citibank. The three additional lawsuits that have been filed by Mr. Kramer are against defendants Bank of America, JPMorgan Chase and GMAC/Ally Bank, and they were filed in February, March and April of this year, respectively.
Last time I checked, “settlements” don’t occur until a lawsuit is won or the defendant has settled, and I’m pretty sure it’ll be some time before discovery begins or opening arguments are heard, let alone anyone starts talking settlement. Whoever sent that mailer out is not to be trusted.
So, as I said in my first article interviewing Phillip Kramer:
So, if you want more information from Kramer and Kaslow about the “mass joinder” lawsuit, there’s only one way to get it… from the source’s mouth at Kramer & Kaslow. And nowhere else, because no other marketing efforts have been approved, according to Mr. Kramer.
~~~
To get a better idea of what a homeowner might expect in terms of timeframes related to such lawsuits, I recently contacted prominent Los Angeles attorney, Mitchell J. Stein, who is the lawyer that filed the very first lawsuit… and on a pro bono basis by the way… on behalf of multiple homeowners as plaintiffs… against Bank of America/Countrywide in Los Angeles Superior Court, back on March 12, 2009. (That’s over two years ago, and Stein assures me that they’re not talking settlement… yet.)
Stein’s Curriculum Vitae (that’s a resume that went to college) shows that he’s successfully represented many of the world’s largest companies in State and Federal Court over the last 25 years… but most importantly, his list includes something like 300 banks and financial institutions.
The Ronald v. Bank of America case is going forward, Bank of America’s lawyers have demurred twice so Stein is on the third amended complaint at this point, which is by itself impressive to all of the attorneys I spoke with about the case. A demur is like saying that you, the plaintiff, may be right in what you’re saying, but you haven’t presented a valid cause of action. The judge can decide whether to let you amend your complaint after hearing the demur, or he can dismiss it without “leave to amend,” in which case you’re done as far as that cause of action is concerned.
So, having now read the transcripts from January 11, 2011, in LA. Superior Court, The Honorable Judge Highberger, speaking about the Ronald v. Bank of America complaint’s causes of action and defendant’s demurs, had the following to say:
“SO, WE’LL LEAVE TODAY WITH AN AWARENESS THAT SOME CAUSES OF ACTION ARE ALREADY GOOD TO GO AND OTHERS ARE GOING TO GET A CHANCE FOR LITTLE REHAB. I THINK THAT WE SHOULD ALLOW FURTHER DISCOVERY TO GO FORWARD, ALTHOUGH I WANT TO REGULATE DISCOVERY DISPUTES. SO I HOPE TO AVOID WORLD WAR III OF DISCOVERY.”
Well, I’m not expert but that certainly sounds like a lawsuit moving forward to me.
Mitchell Stein’s complaint in the Ronald v. Bank of America lawsuit has been used as the model for suits filed by Phillip Kramer and others. I spoke with Mitch for several hours the other day and I can tell you he’s a really smart guy who knows the intricacies of what the banks have done inside and out. I know this because so am I, and so do I. In fact, he taught me quite a bit, and I’m way past the point of learning from any armchair expert.
So, while I was on vacation, it seems that there’s been all sorts of crap going on between a few of the other attorneys involved in the case and Mitch Stein. In fact, I was nothing short of stunned to find out that they actually tried to have Stein removed from the case he filed two years ago. It didn’t work, however, and the homeowners that are plaintiffs in the case should be thanking their lucky stars for that.
Meanwhile, Stein filed a writ of mandamus about a month ago that, as I understand it, basically asks the Court of Appeals to set aside the Gomez decision and allow Judge Highberger to rule on a TRO motion that would stop Bank of America from foreclosing on plaintiffs in the Ronald suit, and he tells me that it looks good as far as the Appellate Court goes at this point. In addition, a lawyer from Florida who is a well known fraud specialist and that Stein brought in to add muscle to the case has just yesterday been admitted pro hac vice by the court, which is also very good news.
So, want to hear the craziest thing… Mitchell Stein grew up in Squirrel Hill, which is in Pittsburgh, Pennsylvania. Coincidentally, I grew up in Squirrel Hill, too. Now, Pittsburgh is not a city one would describe as a small town, but Squirrel Hill is a predominately Jewish neighborhood… and when I say that I don’t mean that everyone’s running around with long beards and black coats, although there are a few of those running around… I mean Jewish neighborhood as in tree-lined streets, large homes, expensive cars, where kids wear designer clothes, take tennis lessons starting at age 6, vacation in Nantucket, and get dates to the prom based on their SAT scores.
One of Squirrel Hill’s many stately homes…
So, how do you like that… I knew Mitchell Stein back in high school… and I know his cousin Jeff, too. In fact, the house I grew up in is a block from Jeffl’s house. Now, he didn’t remember me right away, which is understandable because he’s two years older than I am, and when you’re in high school, sophomores know the seniors, but the seniors don’t really know the sophomores. But, I told Mitch a story that he couldn’t help but laugh about…
You see, back in high school, Mitch Stein had a few friends that were kind of tough guys… you know, not bullies or anything like that, but they weren’t the kind of guys who got picked on, let’s say that. And they were older than me, so if they were hanging out at Mineo’s Pizza, my friends would probably just hang somewhere else. But, I knew Mitch well enough to say hi, and even though some seniors that I knew wouldn’t admit knowing me in public, he was always a cool enough guy that when I said hi to him, he always said hi back… like he acknowledged that he knew me even in front of his friends… so I could walk in and order pizza without any problem.
Hysterical? Well, it was high school. I also told him that I had told my parents that I had to have rugby shirts, because he used to wear this red and white stripe rugby shirt… and he replied: “Oh my God, I did used to wear a red and white stripe rugby shirt.” It was too funny.
I interviewed Mitchell Stein two days ago and I’ve been reading up on filings ever since, so look for my articles on Mitchell Stein, Ronald v. Bank of America, and how he plans to break the bank, pun intended… starting tomorrow. He’s an attorney who’s going after the banks in the courts, and I’m a… well, whatever I am, I’m going after them my way. Small world… damn straight.
Mandelman out.
I field calls all week long from people who have had their homes broken into by the banks. It’s a terrifying and disgusting that the banks do this now with impunity.
The typical scenario finds the banks drill out the locks and remove whatever property they wish. If a homeowner calls the police, the police will refuse to do anything, they will not even take down a report.
I have lawsuits pending challenging these tactics, but it’s too little too late. It’s a disgusting country we live in now….and it’s only going to get worse. This legislative session in Florida will feature corruption and payola on full display like never before. Just wait till you see what they’re going to come up with…..
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The allegations and the evidence is not new, it’s like a mushroom cloud that will keep growing as more and more people understand their rights and take note of the fact that their rights have been violated. Every defendant in a foreclosure case is entitled to have the lawsuit personally handed to them, but in far too many cases, defendants are not actually receiving the lawsuits. Sometimes they are left on the doorstep, sometimes they receive it in the mail and in some cases, they do not receive it at all.
Title insurance companies and lenders need to be particularly concerned about these allegations because judgments based upon fraudulent service of process ARE VOID FOREVER! That’s right, there is no statue of limitations. There is no time limit to bring the challenge to the judgment and to invalidate the title founded upon that judgment.
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I spent a little time in my tiny, but productive garden this morning, which got me obsessing over one of my growing concerns….the inflation of food prices around the world and the traumatic impact further problems with food pricing and delivery will have on each of us.
I’m not getting out of the fraudclosure fight, but I’m conceding that the problems in our courts and economy are so bad that they cannot be resolved in any orderly fashion. I am losing faith that our courts, and by extension our government, have the will or the ability to solve the systemic and catastrophic problems that are on full display in foreclosure and bankruptcy courtrooms all across this country. And while there are principled attorneys and advocates that are fighting an epic fight to preserve your rights and defend our court and our country from the economic and Constitutional massacre that is occurring, we are losing this war. We’re losing the war every time we are defeated on motions in courtrooms. We’re losing every time a homeowner does not hire an attorney to properly defend their case. We’re losing every time we appear before judges that are granting foreclosure judgments that are contrary to long established rules of law and of court. We’re losing the war when the attorneys and advocates who are fighting this fight are targeted with lawsuits, with intimidation, with Bar complaints.
Speech isn’t Free and Dissent Must Be Punished. Those who run this formerly free country have too much to lose to allow dissent to fester too successfully.
The corporations and interests that own our government will get their settlement. They will indeed moonwalk away from the crimes and the collusion and the corruption. It will not cost them $20 million dollars….it will cost them far less. But make no mistake the settlements, the cover up, the diversions will cost every single one of us and our children and our grandchildren far more than we can comprehend. But enough about all that, let me get to the real heart of this post. You think Wisconsin means something? The numbers they’re arguing over are minuscule compared to what we’re all really facing. Just wait until there is a systemic or economic disruption in our tenuous food supply system. Yesterday, a friend mentioned a conversation with a federal official who confirmed that one of our government’s biggest fears is even a brief disruption in the security and distribution of one particular foodstuff, dairy. Dairy is the biggest concern because it is the most vulnerable to storage and delivery disruptions. But that’s just one area, let’s look at the whole picture:
“Higher food prices set off the revolutions in Tunisia and Egypt and the mass protests in countries like Algeria, Jordan, Yemen, Bahrain and Iran. People in these countries buy more unprocessed foods and spend a much higher percentage of their income on food, so they have been severely impoverished by Bernanke’s QE2.”
Of course, being an American, all I really care about is how it affects me, an American, and American prices, and how in the hell I am going to afford higher prices on my American income which has, as he said earlier, gone down when inflation-adjusted. In that regard, Joel Bowman, Managing Editor here at The Daily Reckoning notes, “Wholesale prices jumped 0.8% in January. The producer price index (PPI) has now jumped 3% over the last four months. And no, that’s not an annualized figure.” I was hurriedly shutting the bunker’s door when I heard Mr. Bowman go on, “Note that the PPI headline number is for ‘finished goods’ – stuff that’s ready to be sold direct to consumers. In the category of ‘crude goods,’ the figures are far worse – up 3.3% in January, and up a staggering 15.8% over the last four months.”
and
Egypt’s problems have been simmering for years, but food inflation has brought it to a boil. Remember: food inflation is behind much of the unrest, not just in Egypt but all over the world. Commodity prices have been rising for months, and many countries have already seen unrest over higher food prices.In November, overall inflation in Egypt topped 8.58 percent for the year, its highest level in 19 months. But food inflation has been much more pronounced.
But enough about all of that. Let’s talk about what we can do to help distract us from the problems that we’re facing. I continue to reach out into our rural communities and particularly those parts of these communities that are producing for themselves and supporting the critical basics that we’ve all disastrously been diverted away from. As I have in so many other posts, I again reach out to the farmers and producers in Florida. If you’re a small farmer producing food and supporting our local economy, I will consider representing you if you’re facing foreclosure or other creditor problems that compromise your ability to fulfill your vital function in this economy. Now take a look at three business that are producing and which are supporting our communities. Let your imagination and dreams fly with thoughts about what how we could start to make things right by getting back to the principles embodied herein:
Myakka Nurseries: Crowley Nursery
We have 20 acres at the end of a dirt road. I had a vision of beautiful gardens. Even though we were far away from the city and experiencing the ups and downs of life, the vision of a nursery became reality. I drove an hour from our home every day to my dream, getting home again in the dark. We finally sold our home, and moved to the property.
We started out by joining the Rare Fruit Society to learn about the edible plants one could grow in Florida. Today, we belong to many Rare Fruit Tree Societies. If you can eat it and grow it here, we have it, or usually, can get it for you. And, if it does not grow here successfully, we will let you know.
Bay Shellfish
Hemmel, 44, is Florida’s clam king. The owner of the Bay Shellfish Co., he collects clams from murky water, studies clams in his lab, and manipulates light and water temperature so his clams will reproduce according to his own busy schedule. At his hatchery, the largest in the South, he annually produces about 300 million baby clams for restoration, research and food. Clam farmers from coast to coast buy from him. His goal: at least a dozen clams in every Florida pot.
Florida Native Plants
We come to know a place by the subtle cues we take from nature. Here it’s pine flatwoods, oak and palm hammocks, sand dunes and sea oats. The Real Florida! Beautiful places are being lost to development. That doesn’t have to be. We can bring back natural Florida by using native plants in our landscapes.In Florida you can be outdoors year-round. It’s a glorious place to garden. Plants don’t take years to mature — you can watch them grow. In three years you can make a difference. What you do matters.
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Rumors are that regulators are floating a $20 million settlement with all the servicers. That’s an obscenely low number and there’s still much to fight about, but some version of this insanity will pass. It’s inevitable. The banks own us and they are going to get away with murder. Our courts are lost. Critics and those who speak out are targets of campaigns of suppression…(I can speak quite directly and personally about that)…..In short, the fix is most definitely in. Those wizards who are crafting this doom don’t seem to mind that in writing off all the wrong that was done, we miss the opportunity to start heading in the direction of repair and reclaiming our country…..more below from reuters:
Banking regulators and a coalition of state attorneys general are trying to forge a settlement with the largest U.S. banks, which have been accused of foreclosing on borrowers without having the necessary paperwork in place.
A settlement would relieve a potentially large legal liability and reputational black eye for the banks, as they could face a myriad of lawsuits and fines without a universal agreement.
Sources familiar with the talks say the various groups disagree on the parameters of a settlement, with bank regulators pushing to outline a settlement plan as soon as mid-March.
Analysts said the discussions highlight the difficulties of reaching a universal settlement as disparate groups are involved in the negotiations.
“It is herding cats, there’s no question about it, and they are not always the most agreeably tempered cats,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics, a firm that advises on regulatory policy.
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The Pino Appeal is Florida’s Ibanez moment. The Florida Supreme Court will soon decide just how serious Florida courts are going to take systematic, repetitive fraud on the Courts of the State of Florida. The bottom line is this….
Will banks and foreclosure mills be given a free pass or will the Rule of Law be upheld in courtrooms across this state?
and
What will our courts do when confronted with evidence of widespread and systematic fraud on the court?
Here are the real issues, directly from the transcript:
MS. GIDDINGS: I’m urging you to consider this case in the grand scheme of things. If you allow courts to go back and open up all of these cases, when it’s clear on the face that there was no affirmative relief obtained, or that the affirmative relief would not have been material, then you’re going to create chaos in the court system.
JUDGE FARMER: So, are you suggesting that this fraud has been that widespread that it –
MS. GIDDINGS: Your Honor, I’m not acknowledging that any fraud occurred. I think that there is — we all know –
JUDGE FARMER: Why would we shrink — as a court system, why would we shrink, no matter how many cases it might involve, from looking out for attempts to defraud courts to publish and utter and use false
instruments? Why wouldn’t we be most vigilant?
JUDGE POLEN: These matters contained in Mr. Stern’s law firm are the subject of an investigation by the Attorney General, are they not?
MR. NIEVES: Yes, they are.
JUDGE POLEN: — to know that not just one, but perhaps dozens or hundreds of lawsuits filed in courts with fraudulent documents are being used as a basis to get foreclosures against people who don’t have the benefit of Mr. Nieves’ law firm to represent them.
JUDGE FARMER: Fraud on the Court is not material?
MS. GIDDINGS: Your Honor, fraud on the Court –
JUDGE FARMER: Publishing false documents is not material?
MS. GIDDINGS: Fraud on the Court did not occur in this case.
JUDGE FARMER: It didn’t.
MS. GIDDINGS: A document was filed, but nothing was ever heard before the Court. And if you look at the service expert’s case –
JUDGE FARMER: Let’s just confront that for a minute. I mean, to the extent that the cases that you talk about, Select, and the others talk about, and that is, achieving affirmative relief and all that stuff, I’m wondering if they’re not just talking about two different things as two separate grounds. In other words, obtaining or using voluntary dismissal after you’ve already gotten relief in some way may be one kind of piece of voluntary dismissal, but not under an entirely separate kind may be fraud or attempted fraud on the Court. I don’t know why we would adopt a rule of our inherent powers to deal with fraud in the Court, why we would engage in a reading that says only if the fraud proves to have been successful. And that is to say if the representee relied, to its detriment, on the fraud and changed their position and did stuff, only then would we allow relief of any kind. That strikes me as not –
JUDGE POLEN: I see a number of distinguishing factors, most important of which the alleged fraud that occurred in that case pertained to two affidavits which were filed by the appellee which the appellant suggested were fraudulent in furtherance of a motion for summary judgment, but only because they’re contesting the factual allegations and apparent inconsistencies that may have existed in those affidavits. Now, that may be considered some kind of fraud. But it’s not the kind of fraud on the Court that would be if the appellant here could prove their allegations, where documents filed in support of a mortgage foreclosure proceeding were fraudulently generated by employees of the attorney hired by your client.
And the bottom line:
To sum everything up, if this Court affirms the
Trial Court, it’s basically saying that it’s okay to
lie, cheat and steal, as long as, when you get
caught, you voluntarily dismiss the case. And that’s
what they’re trying to do, just allow the judges of
Florida to put a little sunshine in these issues, and
you can allow the courts to address the prevailing
fraud. By itself, that would deter a lot of these
abuses, when you empower our judges and allow them to
deal with the issues.
Pino_v._BNY_Mellon_Oral_Argument Transcript
Click below and watch the Oral Arguments
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The American Arbitration Association, Credit Card Disputes and Line of Credit/Mortgage Collection Lawsuits
Increasingly, the banks and mortgage companies, particularly on second mortgages, are not filing foreclosures but are instead just filing breach of contract claims in courts across the country to collect those debts. They don’t want the property back, but they will file suit to get a judgment against you.
Problem is the banks have written a major problem into many of their own contracts that causes them MAJOR problems. If you read these contracts carefully, you will note they have a forum selection clause that mandates all disputes will be resolved through the American Arbitration Association. Problem for our bankster friends is the AAA no longer has this program running anymore, thus the banksters and the credit card companies cannot fulfill the terms of the contract they wrote.
Knowing how to use this to your advantage in any credit card or debt collection case is a great way to stop them dead in their tracks!
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A stunning development has occurred in Lee County—a wave of cases are being dismissed. This is unprecedented and a very curious development. Is this a sign of things to come? Why have multiple firms and many plaintiffs decided to dismiss these across the board? Is this admission from the opposing parties that these cases are so fatally flawed that they cannot continue? And with all these cases dismissed, what does that say about the hundreds/thousands of cases that have been taken to final judgment in preceding months?
1:10 A.M. — Banks in recent weeks have been dropping hundreds of their Southwest Florida foreclosure lawsuits instead of facing defendants at trial, according to local attorneys and court records.
Opinions varied sharply on whether that means banks are just taking a breather before refiling with stronger evidence – or giving up for good on hopelessly flawed cases.
Some foreclosures at large law firms were never actually read by the attorneys who filed them here and elsewhere, and some of the mortgages that ended up in mortgage-backed securities sold to investors were never legally transferred by the banks, defense attorneys have alleged.
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It’s next to impossible to get any information while you’re in foreclosure from the servicer or trustee. Reasonable discovery requests for basic information are objected to and almost never complied with. It’s not just homeowners receiving the cold shoulder…the investors are as well….JUST WHAT ARE THEY HIDING?
JPMorgan Chase & Co.’s EMC Mortgage, facing homeowner lawsuits over foreclosures, was sued by the trustee of a mortgage portfolio for refusing to turn over documents detailing the quality of loans bought by the trust.
Wells Fargo & Co., the trustee, is seeking access to files for more than 2,000 underlying mortgages in the Bear Stearns Mortgage Funding Trust 2007-AR2, according to the complaint filed today in Delaware Chancery Court in Wilmington.
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I believe the answer is yes. I think the problems are so wild and out of control that most of them will come under some kind of investigation or suit eventually. I think the only reason we’re not seeing major action so far is the problems are just too big and unwieldy…but Christmas is over and these problems are not going away…..time for us all to dig in and get to work….
SAN FRANCISCO (Reuters) - Kamala Harris takes over as California’s attorney general next week with dodgy bank foreclosure practices in her sights and lawsuits against major banks in her realm of possibilities.
For the up-and-coming Democratic star — the state’s first woman, South Indian and African American attorney general — her predecessor and California Governor-elect Jerry Brown is a model to follow in cracking down on lenders.
But while Brown scored an early settlement against banks as home foreclosures mushroomed in California, other states have been more aggressive of late. Borrower activists are hoping Harris will make the most populous U.S. state a more powerful ally against the banks.
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It’s happening all over the country…banks breaking into people’s homes, with no court order, with no legal authority, with no right to do so. Taking property, trashing homes, ruining lives….sometimes when there are no mortgages on the property at all…
One of my cases is mentioned in the article, and it’s important for everyone in America to understand that the conduct of these banks has gotten so totally out of hand because we’ve become week, meek, soft and compliant. It is only through the intervention of federal cases that something might be done to reduce such conduct….right now it is rampant and unchecked.
Read from the article below and consider how these lives are destroyed by these practices…what has this country become?
In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing. And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed.
“Every day, smaller wrongs happen to people trying to save their homes: being charged the wrong amount of money, being wrongly denied a loan modification, being asked to hand over documents four or five times,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.
Identifying the number of homeowners who were locked out illegally is difficult. But banks and their representatives insist that situations like Ms. Ash’s represent just a tiny percentage of foreclosures.
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Too bad it’s in New York. I wish judges were doing things like this in Florida, but we see very little of this sort of thing. What we do see is continued abuse by the banks and law firms (I’m still getting complaints that are non-verified even today). As a taxpayer I wonder why this is still allowed to occur. I wonder why there is no consequence to blatantly violating the rules of the Supreme Court of Florida…I find it all so mind blowing….
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The entire country knows that we are right in the middle of a real crisis. It’s a crisis of confidence that is shaking the very foundation of our country as we all question the economic, political and judicial systems we all live under. Clearly there are major problems in each of these systems. I find it interesting that Florida’s Sixth Judicial Circuit on Florida’s West Coast has received a good deal of outside press and other attention about this foreclosure crisis and wanted to dig a little deeper. The good judges of this circuit have had a problem with the way foreclosures have been conducted for a long time….as it turns out now….apparently with very good reason.
The inquiry got me thinking about a case that started long before the crisis, way back in 2005. Way back then one of our good Circuit Court judges had a problem with the way he saw foreclosures being conducted in his courtroom. He specifically had a problem with the way a nominee or straw party, MERS or Mortgage Electronic Registration System, was filing thousands of foreclosure lawsuits and he questioned how MERS could act as the Plaintiff when it did not actually own the note or have a real interest in the underlying debt.
The interesting this is this judge sua sponte or on his own, called up all the cases in his docket where MERS was the Plaintiff. He exercised his judicial authority and conducted an inquiry of the facts and circumstances surrounding MERS’ participation in foreclosure litigation. It should be noted that in this particular case, no Defendant ever appeared or filed any pleading at all. But that did not stop the judge from raising his inquiry. He had questions about what was happening in his courtroom so he pulled all the cases and set up a formal inquiry. YOU MUST READ THE ENTIRE ORDER AND PAY ATTENTION TO THE DEEP INQUIRY BEING CONDUCTED BY THE JUDGE….
After the inquiry, the judge determined that MERS didn’t have the appropriate skin in the game to foreclose, so he dismissed this case AND ALL OTHER CASES in his docket where MERS was the Plaintiff. The Second District Court of Appeals subsequently reversed him on this, but there are several important points. First, the appellate court did not repudiate his entire line of inquiry or reasoning, they only suggested that it was a little too broad based on the facts before them in that particular case. Next, reading the appellate opinion carefully, you will note that in footnote number two the appellate court specifically noted that it was relevant for a Plaintiff to establish how and why it became entitled to enforce a mortgage. Finally, it is critical to note that even though the appellate court reversed the good trial judge in this case, MERS’ practice changed dramatically after this case and they almost never filed as a Plaintiff in the State of Florida again.
Azize was not a “Win” for MERS and the appellate court did not expressly repudiate the legal inquiry being conducted, the appellate court merely pointed out some technical problems with that particular case. The point is this circuit got the issues right long before foreclosures devolved into the morass they are today. Just think of how much better shape we’d all be in today if we had all stopped and paid attention to the questions asked by this judge in this case. What if the lenders and the plaintiffs in all these cases that are clogging our courts had taken the time and spent the effort to get their paperwork straight to show ownership clearly and without question way back in 2005? The mess that clogs our courts and pollutes our system of record title ownership was warned of very clearly and quite specifically long before it all spun so wildly out of control….if only we would have listened…..
Is this the next decision out of the Sixth Judicial Circuit on the Order and Magnitude of Azize?
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We all know that most, if not all, of the subprime lenders that were originating the loans we are now defending for homeowners were engaging in various degrees of widespread fraud and deceit in order to close the loans. Our borrower clients were not sophisticated enough to catch the fraud or participate in it, but every level of the originating lenders were. Take the attached lawsuit against filed by a mortgage insurance company against Countrywide Home Loans for instance, in it,
They admit we didn’t actually review the loans we were insuring, we trusted Countrywide and relied on our “delegated” model for reviewing. (That means we didn’t look at all at the loans, we just issued an insurance policy.) The astonishing this is that there were billions of dollars sloshing around between originating the loans with shady brokers here on the ground level to when they were packaged, insured and sold to trustee, then investors and no one was actually looking at the loans themselves. I was a broker, we made loans and we would never do a loan unless we actually looked at everything, credit, income, visit the home.
The subprime mess was caused because no one, and I mean no one was looking at anything and they were all lying to one another…every player at every step in the process. And they needed unsophisticated players like our clients to start the chain of lies that started when the loans were originated then went all the way to the White House.
There is so much pushback from the remaining servicers and lenders who are fighting and preventing even reasonable modifications from occurring. One fascinating thing that befuddles me is the fact that if the laws on fraud and improper inducement were really followed here that might provide us with real opportunities to use proven allegations of fraud to force the hands in these modifications.
Read the lawsuit and let’s use the swarm strategies to pull all these pieces together.
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When I started defending foreclosures years ago there was no real defense. The homeowner did not pay, the plaintiff was suing and they were eventually going to win. My how things have changed in a short period of time. Today there are widespread and well substantiated allegations of fraud and improper practices on the part of banks, mortgage companies and the law firms and other agents working to throw Americans out into the streets. In so many cases the question is not whether your client is going to lose the case, but how many questionable things can you find in the foreclosure lawsuit.
This leads us to the emerging line of legal questioning the community of Foreclosure Defense Warriors are engaged in and that is whether previously entered judgments are Void or merely Voidable. That question looms like a 800 pound Gorrilla in courtrooms all across this state. When the full specter of issues related to flawed Service of Process is raised, we will have a real sense of how big the most glaring issues of blatantly Void judgments are. All judgments based on fraudulent service are VOID. They don’t exist, they did not happen. To the homeowner living in that new home after purchasing from the bank…..sorry, but you don’t actually own that home, your deed is worthless. To the bank that gave that mortgage to purchase that home, your lien is not valid. This line of inquiry is shaking the title industry to the core as they struggle to play a game of “Not my problem; it’s yours”…trying to pass the liability off on the lenders who foreclosed. Next, the investors are trying to hold the servicers and lenders accountable as evidenced by the recent letter from Deutsche Bank to the servicers stating, “we ain’t gonna be liable for your screw ups”. This showdown is also a focal point of investor lawsuits against the major servicers, most especially Bank of America. They’re all saying, you guys screwed this up and we’re not going to hold the bag. (Bank of America is saying “Screw You” you’re on your own. Obama is saying, “foreclosures are good, we don’t need no moratorium.)
These are not abstract questions that will have no consequences. In fact, during a recent meeting of the judges and attorneys in Florida’s Sixth Judicial Circuit, it was acknowledged that these questions are going to plague our courts for years to come, as you can read in the attached article in the St. Petersburg Times.
“Even when judgments have been entered and sales have happened, they may say, ‘Whoa, that may have been sold improperly,’ ” McGrady said. “We’re going to have title issues and all those things. And every motion, everything that’s brought to the attention of the court will require a hearing of some sort. We’re working through it, but it will take that much longer.”
This issue is part of the larger and important work of a highly specialized group of foreclosure defense attorneys who have a broad range of experiences and who meet in secret locations regularly to discuss such issues and work through the much deeper and more significantly troubling aspects of this foreclosure insanity. The JEDTIS (Jurists Engaged in Defense of Title Integrity) are a group formed by Clearwater attorney Greg Clark and include some of the brightest minds in all areas of the law. If you’re looking to determine whether you have title claims, void (or voidable) judgments or have any number of other claims related to your foreclosure suit, especially any potential appellate cases, contact me for a referral to one of the JEDTI Masters.
For those attorneys who are just beginning your inquiry into VOID or VOIDABLE judgments, please see some of the initial case law research and discussions on the issues. The following is intended to assist attorneys in reviewing and intake of cases, please forward your cases to me for review and consideration by the JEDTI masters who are standing by ready to return the rightful owners to their property after proving up that the current “owners” of homes are merely posessors of the home subject to VOID deeds.
Judgments which are void at the outset, may on motion at any time be vacated. See Fla.R.Civ.P. 1.540 (b).
Diligence to serve by publication: Wiggam v. Bamford, 562 So. 2d 389 (4 DCA 1990), Gans v. Heathgate-Sunflower Homeowners, 593 So. 2d 549 (4 DCA 1992), Hobe Sound Ind. Park v. 1st Union Nat. Bank, 594 So. 2d 334 (4 DCA 1992); Batchin v. Barnett Bank, 647 So. 2d 211 (2 DCA 1994). Forecl judgment entered where sworn statement defective on its face voids sale, even as to non-party bidder. Gans; HOWEVER, see later 4th DCA case Demars, which says it is only voidable. See also Fund Concept, Forecls V. Absentee Owners, Jan 93; and III Fla. Real Property Practice (CLE 1976), s. 5.26. Sworn statement need not set out search facts, but judgment voidable if insuffic diligence, so better practice to set out. Demars v. Village of Sandalwood LAkes, 625 So. 2d 1219 (4 DCA 1993).
If the trial judge were to find the affidavit to be defective on its face, service would be void as to the bona fide purchaser. If the trial judge finds the affidavit sufficient on its face, but were to determine that a diligent search was not performed, the foreclosure would be voidable, not void, as to the bona fide purchaser. See generally 33 Fla. Jur. 2d Judicial Sales § 13 (2009). On the face of the affidavit of diligent search before us, we find that the affidavit is sufficient for purposes of service by publication and that the trial court did not grossly abuse its discretion in so holding. In light of the necessary reliance on the public record by a bona fide purchaser, the affidavit of diligent search was sufficient on its face to establish that an adequate search had been made to locate an address for service upon Lewis prior to effecting constructive service. The resultant foreclosure sale to the bona fide purchaser cannot be set aside. First Home View Corp. v. Guggino, 10 So. 3d 164 (Fla. 3d DCA 2009) (holding that trial court errs in vacating final judgment of foreclosure in sale of property to bona fide purchaser where homeowner is constructively served by publication and affidavit of diligent search is legally sufficient to establish that an adequate search has been made prior to constructive service); Southeast & Assoc. v. Fox Run Homeowners Ass’n, 704 So. 2d 694 (Fla. 4th DCA 1997) (holding that notice by publication is adequate where affidavit of diligent search is facially sufficient and foreclosure sale to bona fide purchaser is merely voidable, and not void, and cannot be set aside)
847 So.2d 555 RINAS v.RINAS; 1D09-2170 SOUTHEAST LAND DEVELOPERS v. ALL FLORIDA SITE AND UTILITIES, INC.,; 625 So.2d 1219 18 Fla. L. Weekly D911, DEMARS v. SANDALWOOD LAKES; 168 So.2d 183 EVANS v. HYDEMAN
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Remember, Press Conference today at 10:30 in Orlando with U.S. Congressman Alan Grayson. If you’re press struggling to grasp how significant the whole ForeclosureGate controversy is…you should attend. If you are a homeowner in foreclosure, you should attend. If you’re just an everyday American who is sick and tired of the abuses of the banks and institutions that now own and run this country, you should attend. What happened to Nancy Jacobini should never, ever happen in this country and what’s still happening to every American stuck in this nightmare should not be allowed to continue.
IT WILL ONLY STOP WHEN WE ALL STAND UP TOGETHER AND DEMAND AN END TO THIS
WAKE UP, RISE UP, STAND TOGETHER AND STAND YOUR GROUND
SEE YOU IN ORLANDO AT 10:30 AM!
Our entire foreclosure process, and now a significant portion of the title to real property in this country now rests on the shoulders of largely unregulated, unpoliced and until now, unnoticed subset of the foreclosure mill/foreclosure cockroach community. The Private Process Servers. Who are process servers? In Florida, a Plaintiff must personally hand an original summons issued by the court, along with the lawsuit to every defendant in a foreclosure case. The Sheriff appoints private parties to serve these lawsuits on these people, but any knucklehead can become a process server. The requirements are to become a process server are defined in Florida Statutes, but here’s the bombshell.
THERE IS SO MUCH BAD SERVICE OF PROCESS FLOATING ACROSS THIS STATE THAT IT’S GOING TO MAKE THE ROBOSIGNER CONTROVERSY SEEM SMALL
What is bad service? Not actually serving the defendant in the case, but lying to the court and saying the person was served. You see, a process server must file with the court an Affidavit of Service, an original document where he swears to the court, “On February 1, 2o10 at 4:10 pm, I personally served Matthew Weidner with a copy of the lawsuit and summons at his home at 1229 Central, St. Petersburg 33705. Weidner was 5 feet 2 inches tall, black and weighed about 200 pounds.”
The problem is Matthew Weidner is white, 6 foot 1, weighs 165 and on February 1, 2010 at 4:10 pm he was on a flight bound for California….that service could never have happened so the process server lied. The big, big, big problem with service such as this example is…..
JUDGMENTS BASED ON FRAUDULENT SERVICE ARE VOID
Let that sink in and think about it. VOID. Not Voidable, but VOID AB INITIO or invalid from the outset. How many tens of thousands of titles to real property across this country are affected by this problem? Impossible to say at this point in time, but anecdotally, I see far too many cases of flawed service than we should ever permit. Elderly people, illiterate people, minorities that couldn’t avoid service or leave their homes even if they wanted to. And yet, the numbers of Affidavits of Diligent Search and Inquiry and Constructive Service in foreclosure cases is HUGE. No one was supervising the process servers. The lowly process server who got paid the same $25 if he was serving (or not serving) a foreclosure complaint on a $50,000 mortgage or a $5,000,000 mortgage. And now the fate of our entire title insurance industry and in fact our entire economy rests on the truth and veracity of the Affidavits of Service of Process that have been filed by these unregulated, unsupervised process servers.
Have a look at just two initial reports that were produced which provide some insight into this problem. How in God’s name have courts permitted this many summons to be lost? How in God’s name have we allowed so many foreclosure lawsuits to proceed based on constructive service? There are no legitimate answers to these questions. But then read the very lax requirements that are in place for process servers in this state. GOD HELP US ALL.
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The banks and institutions that now run this country are running abs0lutely wild and out of control. They do not fear judges or law enforcement. They do not fear any law.
They do not need permission to kick down your front door, steal what they want and throw everything else into the streets.
As one of the owners of a company who specializes in “securing” or “winterizing” properties was recently quoted in the Palm Beach Post said, “Lawsuits don’t phase us anymore.”
I WANT ALL OF AMERICA TO WATCH THE ATTACHED NEWS STORY AND LISTEN TO ALL TEN MINUTES OF THE ATTACHED 911 PHONE CALL.
HEAR THE TERROR IN THIS WOMAN’S VOICE.
THIS WOMAN WAS NOT IN FORECLOSURE. THIS WOMAN’S HOME WAS IN PERFECT, PRISTINE CONDITION. SHE WAS RELAXING COMFORTABLY ON HER COUCH WHEN A BURGLAR CAME KICKING DOWN HER DOOR.
IT WAS A BURGLAR HIRED BY THE BANK BREAKING DOWN HER DOOR.
WATCH THE VIDEO BELOW
http://www.wftv.com/video/25278100/index.html?taf=orlc
LISTEN TO THE FULL 911 PHONE CALL HERE
This is what this country has become people and no one seems to care about it anymore. I truly fear that all hope is lost. These lenders have absolutely no right to do what they are doing yet neither law enforcement nor judges care to do anything about this terrifying phenomena.
Please find and share with me stories such as this. The only hope we have of turning this around is getting the word out there and hoping that our press picks up on these stories.
Please forward this to Realtors, attorneys and activists. No bank has any right to come onto any person’s property and they certainly do not have any right to kick down a person’s door unless and until they have an Order from a judge.
PLEASE SHARE YOUR STORIES WITH ME.
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