War on the Home Front | Mortgage Loan Investigations | Securitization Audits

May

I have been meaning to write on several consumer scams so here are a few to avoid.

“We Can Lower Your Home Loan Interest Rate” Scams.

We’ve all gotten the calls at home. “We can lower your interest rate.” “The banks got their bail-out, now get yours.” But imagine what it feels like if you really need that kind of help. The false hope these scams create is criminal. One of my coworkers has been going through a Chapter 13 in which her mortgage payments are really high. She got this card in the mail asking her to call 800-936-4400 and saying that they could lower her mortgage payment (currently over $1,300) to $611.01. She was very hopeful. She called the numbers, which directed her to RMA Legal Network in Holbrook, New York, and RMA turned out to stand for Michael Alarcon. She spoke with a Bruce Thomas, a case consultant manager, who asked her for tons of very personal information. She then hung up and did a google search, which turned up a great deal of negative information on this company, including that they want $1,400 up front to even start to do a deal for you. Red flag!

“We Can Reduce Your Credit Card Balances”

Forget it, it doesn’t work. If I’m wrong, tell me how and where you can get this help legitimately. If you have the time, follow the directions they leave on your phone and report back here.

Work at Home Scams

A third cousin got involved with one of these, and when I say scam, I mean Scam. Again, selling

false hope is big business, but here the Zaken Corporation sold nothing at all. My cousin called 1-800-840-1060 and ordered the Zaken Corporations 90-day Risk free trial work at home kit plus special mystery gift. He was told he could not use a money order but would need to use a pre-paid card, which he got from Green Dot. This will be the subject of another blog. He order this kit on February 1 and as of May 8, he has received nothing. I have spent two afternoons on the phone trying to get his $104 back, talking to real people who somehow managed to get away and not come back to the phone. They all said they’d return my call but no one even has. This would be funny if it wasn’t so sad and sickening. Zaken now claims that they have never heard of him. It is interesting because it looks like they are a real companyand that most people get their kits, though few make money from them. Before you pay anything for a work at home kit, check out the company very extensively on the Internet. There were lots of red flags there for Zaken, if only he'd have checked.

May

Deceptive foreclosure headlines spread like wildfire in Utah

By Mandelman | Housing & Economic Research, News for the Patriot

84898Leave a Comment2012-05-03+09%3A52%3A42Mandelman

Just as has become prevalent in other states, the headlines describing the situation related to future foreclosures in Utah are deceptive… or perhaps misleading is a better word.

On April 12, 2012, Bloomberg/Businessweek ran the headline, “Utah March foreclosures down 31 percent from 2011,” leading one to believe that the crisis is soon to be behind the citizens of that state. And like all “good news,” it spread.

Based on the same date as the Bloomberg story, “Foreclosure rates drop in Utah’s large metros,” was the headline used by the Deseret News on April 25, 2012. And KSL.com, the online version of KSL-TV, found a way to make the story even more positive by using a three-month comparison, under the April 12th headline, “Utah foreclosure rate fall nearly 50 percent.”

I certainly understand the desire for good news on this topic. After all, it’s going on six years since the tsunami of foreclosures began to flood this country with repossessed homes, so at this point it’s understandable that we’d be ready to grasp at any positive port in the continuing storm. And it’s not that I take pleasure being a porcupine in Utah’s balloon factory. In fact, it is much more my nature to be branded an eternal optimist than anything else.

Optimism, however, is when someone looks at the facts of a situation and expects the best outcome possible. It’s not optimism to believe something that’s impossible will happen… that’s called “fantasy.” And, while I also understand that hope springs eternal, false hope only springs disappointment.

Compared to what?

In 2011, mortgage servicers slowed the pace of foreclosures by not proceeding with foreclosures for a variety of reasons, none of which relate to homeowners’ ability to make their mortgage payments. In some cases, servicers foreclosed less as a result of the “robo-signing” or document fraud scandal that started making headlines during the fall of 2010.

Confident that a settlement would ultimately be reached between the five largest servicers and the attorneys general from the fifty states who began investigating servicer practices as a result of document fraud coming to light, and knowing that such a settlement would include amnesty from prosecution for such acts by the states, they simply held off foreclosing until they could do so without the risk of a being sued by a given state.

In several states, recently passed legislation also caused servicers to put foreclosures on hold as they regrouped in order to comply with the new laws, and in some other states, foreclosures were delayed awaiting decisions by state courts. But, the point is, once these barriers were lifted, and the national mortgage settlement was finalized, foreclosures started rising all over the country almost immediately.

The result of the 2011 slowdown in foreclosures is making for some very deceptive headline comparisons, even while all credible forecasts are calling for record numbers of foreclosures across the board both this year and next.

Going up?

Beyond the Utah headline, the Bloomberg article also explains that according to RealtyTrac, the State of Utah’s foreclosure rate “jumped” by 74 percent between this past February and March, resulting in Utah’s foreclosure rate coming in seventh in the nation.

A 74 percent “jump” in foreclosures in a single month of this year would seem to me to be a much more important piece of news than any year over year comparison, although I would readily agree that it doesn’t lend itself to feelings of optimism and therefore would likely garner less readership than the happy headline comparing this year with last.

And, has something that has increased by 74 percent in a single month merely “jumped?” Because I would suggest that it “soared,” or even “rocketed.” I think when describing increases in excess of 20-30 percent, using “jumped” falls into the category of dramatic understatement.

I asked an editor at a major monthly business magazine why they seemed to run this sort of headline as opposed to… well, conveying the real truth of the matter to their readers, and his response was frankly unforgettable. He said…

“Well, we just had an editorial meeting on this topic and I think the consensus was that people don’t buy depressing magazines.”

Well, fair enough, I replied, thinking to myself… I guess the magazine would better be thought of as some sort of business comic book for grown-ups going forward.

Like I said, I don’t like being the bearer of bad news all the time, but in case you haven’t noticed, we’ve been told that prosperity is imminent at least annually ever since the flood of foreclosures began almost six years ago, and all its done is prevent us from putting more pressure on our respective state legislatures to do more to mitigate the damage the crisis is causing.

So, I’m sorry if I spoiled your day… but until we come to accept that there will be no economic recovery until we do more to prevent foreclosures, we’re doomed to continue our race to the bottom.

Foreclosures can only breed foreclosures, I don’t care which state your in, and they don’t just magically stop all by themselves one day. Or maybe the better way to describe that thought is metaphorically. So, try this on for size:

Just like a forest fire that’s been allowed to burn out of control, it won’t stop until it runs out of forest.

Mandelman out.

Mandelman Matters State Specific Content: Utah Foreclosure Resources and Articles

State of Utah Foreclosure Resource Links

Utah Foreclosure Defense Attorney, Walter Keane on a Mandelman Matters Podcast

Mar

MUST SEE TV: WA State Supreme Court Hears Arguments in Case Against MERS

By Mandelman | HAMP, Housing & Economic Research, Loan Modification, News for the Patriot

78734Leave a Comment2012-03-29+16%3A07%3A43Mandelman

“May a party be a lawful ‘beneficiary’ under Washington’s Deed of Trust Act if it never held the promissory note secured by the Deed of Trust?”

That’s the key question the Washington State’s Supreme Court heard arguments in the potentially pivotal case, Bain v. Mortgage Electronic Registration Systems, et al and Selkowitz v. Little “Litton” Loan Servicing, LP, et al. It’s also a form of the same question that’s been asked by countless homeowners and their lawyers as they’ve fought to prevent their homes from being lost to foreclosure over the last 3-4 years.

Go back in time fewer than five years and you’d be hard pressed to find anyone who had ever heard of Mortgage Electronic Registration Systems, but today the acronym “MERS,” is a household dirty word in American homes from coast-to-coast.

Although the mortgage banking industry would say that they created Mortgage Electronic Registration Systems for the benefit of mankind, there’s no question that its creation also provided the industry with a way to avoid having to pay the costs involved in recording mortgage transfers. Lenders permanently list MERS as the “mortgagee of record,” and by doing so the avoid the expense of recording any subsequent transfers.

MERS makes the claim that it is both an “agent” of the lender and the “mortgagee,” but the practice has fueled a firestorm of debate over a wide range of legal issues, and although many courts seem to have accepted the MERS way… it’s often not clear whether such decisions were actually made in favor of MERS, or just against homeowners not making their mortgage payments.

What MERS does is operate a computer database that’s supposed to track mortgage servicing and the ownership rights of mortgage loans throughout the U.S. And when I first heard that explanation, I thought… well, that sounds incredibly boring.

Frankly, as a layperson… the whole thing is kind of insane, especially when you stop to consider that although MERS would readily admit that it doesn’t own any mortgage loans… it is also the recorded owner of over half of the nation’s residential real estate. At least I think that’s right… every time I try to understand it better, the whole thing confuses me and then I have to take a nap.

The best way to understand the issue I’ve seen…

The video below puts you in the courtroom to watch as both sides of the debate present oral arguments related to MERS’ involvement in the foreclosure process in front of the nine justices of the Washington State Supreme Court.

I found it fascinating to watch… almost as good as an episode of “Boston Legal,” in fact, the MERS lawyer kind of reminded me of Bill Shatner’s character on that show, Denny Crane.

You’ll watch the plaintiff’s attorneys who are representing homeowners at risk of foreclosure argue that MERS violates the state’s Deed of Trust Act, among other things… followed by the attorney flown in from Minnesota to appear “pro hac vice,” on behalf of defendant MERS, who basically argues that MERS isn’t the problem no matter what because no one ever needs to know who owns their loan.

I’m paraphrasing, of course, but you’ll see what I’m saying when you watch it. It’s not quite 45 minutes long, but it feels shorter… and afterwards, I’ll pick up the discussion below and share my thoughts on the matter.

~~~

A simplified view of how we got here…

The foreclosure crisis put MERS in the national spotlight as it started filing foreclosure lawsuits on behalf of financiers and servicers against millions of American families.

These people losing homes to something using the name MERS had been told by President Obama that because of his new government program, Making Home Affordable, they would be able to get their loans modified and hence save their homes from foreclosure simply by calling their bank… assuming, of course, they weren’t “irresponsible borrowers.”

So, believing that he was both smart and “a man of the people,” they did what he said they should do… but he wasn’t, and it didn’t work.

But, more than just “didn’t work,” the experience was nothing short of torturous, and in fact, I’m quite certain that many who lived through it, would have jumped at waterboarding as an alternative.

Lawyers representing homeowners who had clearly been wronged tried turning to the courts to enforce the HAMP guidelines, but to no avail. So, they went after anything and everything… TILA/RESPA… MERS and the failings of securitization… and most recently robo-signing related allegations are all the rage…

“I’ll take one securitization audit, and one forensic… oh… and give me one of those fraud reports too… to-go, please… how much? Oh my. Do you take Texaco cards?”

The thinking was obvious… judges and everyone else could see them coming a mile away… cause enough trouble for the servicers and they’d offer to modify loans and hence save homes. And soon… when even that wasn’t working… well, then even just delaying the loss of a home was something of a win, right?

Right… wrong… it didn’t matter… homeowners not making their mortgage payments was the issue at hand, as far as the vast majority of judges went, and today, although the battle rages on fueled by words like “forgery and fraud,” the outcomes are fundamentally the same as far as homeowners at risk of foreclosure are concerned.

Oh sure, some states became better than others, and bankruptcy courts seemed to fare better than others, but homeowners became more and more confused as courts of appeals, in some cases, tooketh away, what lower courts had given.

The OCC turned out to be an acronym for the Office of Ceremonial Complacency.

Many states today have bills on their legislative calendars that could help in some ways, but banking lobbyists don’t give up a single yard without a fight.

And finally it was OCCUPY… the blunt force edition of the foreclosure defense game, but again, to most… sort of a delay with a side of pepper spray.

So… now what? What’s next? The UCC 9 v. UCC 3 argument? Okay, fair enough. Not as exciting as securitization fail and REMICs exploding all over the place, but I’m in… why not?

I don’t like it any more than anyone else, but the fact is that in 2011… a year during which in some states like New Jersey and Nevada, foreclosures were said to be down year over year by something like 80 percent, even with the servicers waiting for the settlement to be reached so they could pick up their “Get Out of Fail Free” card… even with all of the things that caused delays… foreclosures were essentially flat when compared with 2010. Absent anything new that I’m not seeing… can you imagine how bad this year and next are going to be?

Well, of course, there is the $2,000 if you were foreclosed on in 2009-2011… do I have that right? I think so, but every time I type that out my mind says… no, that can’t be right… and then it is.

So, in the Bain case you watched on the video… what happens if the court sides with the plaintiffs? Says that MERS does violate the state’s Deed of Trust Act… does that save homes in a way that I’m not seeing. Or, will the servicers just start foreclosing judicially, as they’ve done in response in Hawaii, for example.

So… I called a couple of lawyers licensed to practice in the State of Washington to ask if their views of the Bain case confirmed mine… and they did.

Please understand what I’m trying to say, because I’m not saying everyone shouldn’t fight this year and next and next and next… and harder than ever, for that matter. I know I will…

BUT, WAIT A MINUTE… some changes have come to pass.

Like what? Like, the new servicer standards, for one.

Remember… the servicers and their propensity to ignore the toothless HAMP guidelines is one of the main reasons we’re all here, right? Well, now we have new servicer guidelines that are part of the settlement agreement between the 49 AGs and the five largest servicers that doesn’t quite exist as yet, but I’m willing to believe if you are.

Ever since the day that the Obama administration prematurely asseverated that the AG settlement had arrived, I’ve had only one thought on my mind… what happens if servicers don’t adhere to the new standards?

Is there a private right of action? I don’t think so… they’re not even laws, right? So what good are ANOTHER set of servicing guidelines related to loan modifications that no one can enforce when they’re ignored? We’ve already got a perfectly good set of servicing guidelines related to loan modifications that no one can enforce when ignored… they’re called HAMP guidelines and they’re like new, hardly used at all. If they were a car they might be a 2009, but they’d have no miles on them and still come with the full factory warranty and that new car smell.

Why are we troubling the servicers with having to come up with another set of guidelines they don’t have to follow? Don’t they have enough on their plates already? I mean… they’ve got all those foreclosures still to get handled… and without several of their biggest mills, like Stern and Baum.

Then there’s designing the next phase of document creation, that’s not going to be done in a day or two. And I hear that some servicers may actually have to get things notarized… no, I mean for real… actually notarized.

I think we should just call the five servicers involved and tell them not to bother with the new guidelines… we don’t need them.

Either that, or we should put some pressure on our AGs and our state legislatures to give the new standards or guidelines the force of law… you know… including a private right of action for homeowners, and a provision for attorneys fees.

What are the banking lobbyists going to say in response to that? There will never be lending again in this state? No chance. Plus, even if the new standards were made into state law, it would be very easy for the banks to not get sued and lose… just don’t break the new law and follow the standards you agreed to follow in the settlement, which you said you’d follow… so, what’s the problem?

To the AGs and state legislators, I would put forth that we don’t need new rules that lack teeth… that no one who agreed to them has to follow. We’ve got plenty of those kinds of rules related to loan modifications already. Why would the AGs oppose taking the terms and making them law?

I realize the states are gong to have “independent monitors,” but I’m not worried about the monitors getting screwed over and losing their homes… monitors aren’t being damaged by rules being broken, it’s the homeowners, silly. They’re the ones that need to be able to assert their rights under the agreement.

And to the homeowners not at risk of foreclosures just yet… forget about the deadbeat cracks, shouldn’t any rules of any federal program or settlement with our government be followed? Period? Of course they should. So, since we KNOW the last set were ignored, let’s make these new standards into a law with a private right of action and a provision for attorneys fees and let’s see what happens from there.

Maybe with such a law and attorneys fees clause, the trial bar will get interested, and they’ve got a lobby in DC that’s pretty effective, I hear.

I know… there are allowable margins for error in the settlement agreement, and extended timeframes for compliance… but, so what? Whatever we’ve got, make it a law… something that must be adhered to, or consequences might result.

Embrace incremental improvements…

If you’re waiting for a BIG BANG, you’re going to be waiting for a long time. It’s become obvious that, as I’ve been saying for so long I’m tired of saying it… it’s a game of inches.

And it’s a simple game. You hit the ball… you catch the ball. Sometimes you win, sometimes you lose and sometimes it rains.

Well, some things are actually better. Over 80 percent of trial modifications become permanent modifications today… that didn’t used to be true. And I’ve checked with lawyers all over the country and they’re seeing what I’m seeing… better modifications… and principal reductions more and more.

Bank of America has started granting principal reductions as part of their loan mods. I’ve seen eight in the last two weeks, and a dozen lawyers from around the country, including Bruce Levitt in New Jersey, have reported the same thing. And how about BofA’s new rent-for-three-years-if-you-can’t-afford-it-any-more program? I call it a soft landing.

And Ocwen is offering shared appreciation modifications (“SAM”) and they’re offering quite a few of them by the way. But they are still awaiting approval from several states… it’s a requirement, I’m told.

And look… I’m not just saying this stuff to protect homeowners from bankers… I’m saying it to protect the bankers and our society too. I just don’t believe many people can take another failed program that happened because no one followed the rules. Last time, well… that’s one thing… it wasn’t pretty, but we made it through.

Not to put too fine a point on it but there are more than a few programs I could reference… like, dozens… that have failed so spectacularly that… and I do mean this literally… their reported outcomes would have been identical had they been administered by farm animals or house pets. And that would be funny, were it not so entirely accurate.

Allow the same exact things to happen back-to-back and I’m not at all sure… all bets could be off.

Or… tell me I’m wrong. I’m always willing to be wrong. I actually like being wrong because I always learn something… and it happens so infrequently these days… lol.

Mandelman out.

Mar

Facing Eviction from Foreclosure, Roswell’s ‘Chicken Man’ Presumed Dead After House Explosion (VIDEO)

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

78250Leave a Comment2012-03-27+13%3A47%3A514closureFraud

Roswell’s ‘Chicken Man’ Presumed Dead After House Explosion: MyFoxATLANTA.com ROSWELL, Ga. – A Roswell man who fought to keep chickens on his property is presumed dead after an explosion rocked his home on Monday. Authorities said Andrew Wordes, who became known as “The Chicken Man,” had fallen behind on his mortgage payments and was facing … Read more Related posts:

Mar

“Irresponsible” Homeowner Eric Eisnaugle Foreclosed – Who is He and Why Do You Care

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

74278Leave a Comment2012-03-06+23%3A30%3A414closureFraud

“We know what happened when we strayed from those values over the past decade – especially when it comes to the massive housing bubble that burst. Millions of families who did the right and responsible thing – who shopped for a home, secured a mortgage, and made their payments each month – were hurt badly … Read more Related posts:

Mar

“Irresponsible” Homeowner Eric Eisnaugle Foreclosed – Who is He and Why Do You Care

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

74264Leave a Comment2012-03-06+22%3A20%3A234closureFraud

Mar

New Jersey Supreme Court’s Guillaume decision meaningless – Should foreclosure defense rethink its strategy?

By Mandelman | HAMP, Housing & Economic Research, Loan Modification, News for the Patriot

73193Leave a Comment2012-03-01+16%3A02%3A47Mandelman

The foreclosure wars have always had two easily identifiable sides. It’s homeowners in one corner… and banks and mortgage servicers in the other. In the beginning the battle was largely over TILA and RESPA claims. After that, we fell into loan modifications, and then into the HAMP guidelines that were never really followed by the servicers, or if they were on occasion, no one could tell.

Lawyers who went to court over HAMP “rules” quickly discovered that they were more like pointers, intimations, tips, or perhaps clues… but whatever they were, HAMP had no teeth, and if there was anything that could be construed as a rule or law, then there was no private right of action. And as far as the HAMP contract between Fannie Mae/Treasury and the participating servicers, well… forget about it because borrowers were not considered third party beneficiaries to that contract.

I never liked any of these decisions one bit… and I still don’t. But I’m no lawyer, so I went along with whatever the foreclosure defense attorneys thought best. Obviously, on these points at least, the fix was in, so I climbed on the bus and went on down the road.

We arrived at the battleground called “securitization fail,” and soon everybody on the homeowner side was learning to sing a new version of their ABCs that went like this… A to B, B to C, C to D, which represented the steps required to properly negotiate a note into a REMIC trust, steps that were almost never followed… or maybe never followed.

The argument, however, was a technical one and judges weren’t exhibiting much patience for the technical learning that was required to understand the argument. It seemed that the judges were having trouble seeing past the 300 cases on their dockets and the homeowner who hadn’t paid their mortgage payments in over two years. The argument may very well have been rock solid, but many lawyers came back from court reporting that their judges had heads that were solid as rocks.

Next up was the media darling “robo-signing,” a practice that created documents to be filed in the records that were forged or signed without knowledge of anything, or illegally notarized, or whatever else you could think of… the paperwork was all wrong.

This debate is still raging, but it hasn’t done a lot of good for many homeowners, truth be told. It certainly has delayed things, in certain instances, and it even slowed the number of foreclosures filed during the year… but it’s certainly not keeping people in their homes in any number.

The bank and servicer side of this argument says that it’s just sloppy paperwork, technicalities causing no harm to borrowers… to which the foreclosure defense side replies, “YOU’RE BREAKING THE LAW… and then in response we hear, “IT DOESN’T MATTER.” “YOU’RE BREAKING THE LAW.” “IT DOESN’T MATTER.” It’s annoying… I’ll certainly give it that.

Good Morning, New Jersey…

Well, yesterday the New Jersey Supreme Court ruled in the Guillaume case, a much-anticipated decision, so I’d been told… and the ruling says that in addition to the servicer’s name and address, the lender’s name and address must appear on the document that states that a bank intends to foreclose on a mortgage. (You’ll find a copy of the case at bottom.)

Earth shattering news? Yes, I thought so too. File this one right next to “Brown v. The Board of Education,” or “Plessy v. Ferguson.” I’m sure law schools all over the nation are rushing to change their curriculums to add a class on the “Much Anticipated but Meaningless.”

140 Elmwood Ave, East Orange, NJ

The case involves an East Orange, New Jersey home owned by Maryse and Emilio Guillaume. The couple received a notice of intention to foreclose in May of 2008, and that notice included the name and address of the mortgage servicer, America’s Servicing Co., but it failed to include the name and address of the lender. And somehow, this issue made it all the way to the state’s Supreme Court.

The state’s high court ruled that because the foreclosure notice that the servicer sent to the Guillaumes did not include the name and address of the lender in addition to that of the servicer, it did fail to comply with New Jersey’s Fair Foreclosure Act.

The court said that, failure to include such information creates the potential for “significant prejudice” to homeowners. According to the high court…

“A misunderstanding about a lender’s identity could prompt a homeowner to make a critical error at a time when he or she is struggling to avert foreclosure.”

From the sounds of that, you’d think that the decision represents some sort of a win for homeowners, right? Not so much.

While the court ruled that the lower court judge was wrong about the need to include the lender’s name and address on the notice of intent to foreclose in addition to the servicer’s, the ruling also said that the lower court was correct to order a default judgment against the couple. Specifically, the court ruled that the couple did not make a case for “excusable neglect” or a “meritorious defense” related to their foreclosure, so the Guillaumes still lose their home.

Additionally, the high court also reversed a separate appellate decision, known as “Laks.”

The Laks decision said that a foreclosure should be dismissed if the notice of intent to foreclose did not comply with New Jersey’s Fair Foreclosure Act, and by reversing that decision, now trial court judges that find a notice that’s fails to comply, will be able to either dismiss the action, or simply order a corrected notice, or even select another solution they deem appropriate.

So, now… after all this… while it’s true that the lenders name and address has to be included on the notice of intent to foreclose along with the name and address of the servicer’s, in the event that the lender’s name is missing, that will no longer necessarily mean that the foreclosure will be dismissed and the servicer will have to start over. Now, the judge will have the discretion to simply order a corrected notice and allow the foreclosure will proceed.

Throughout last year, uncertainty over how the court would ultimately rule in this case led servicers to postpone foreclosures in New Jersey, and as a result foreclosures were down by 80 percent.

Now, I’m not saying that’s necessarily a bad thing, and if it were the goal, then I would call it a success. But, time is the natural enemy of a loan modification, because the longer the delay, assuming no mortgage payments are being made, the greater the amount of arrearages that have to be dealt with in order to modify the loan.

Now consider that reports all indicate that there are at least 100,000 New Jersey foreclosures that were stalled throughout last year, and that will now move forward. That’s 100,000 or more homes that have less chance of being modifiable today than they would have a year ago. So was the delay truly beneficial to homeowners?

I suppose for those that have no chance to save their home by getting their loan modified, they got an extra year living in the house, but even these people might have been better off dealing with it a year ago and today being one year closer to rebuilding their credit and buying their next home, assuming that’s they’re goal. The point is that a delay can be a dual edged sword, because it almost never leads to saving homes from foreclosure.

Lawyers that represent servicers all appeared quite happy with this decision because now a process that’s been clogged by uncertainty has been clarified by the court, and foreclosures will be free to move forward.

But it occurs to me… homeowners would not have been happy regardless of how this decision had gone.

I suppose I could be missing something, but I just don’t see a potential win in this case for homeowners no matter what. It was from its outset, a lose – lose scenario.

Bloomberg, covering news of the decision, quoted Rebecca Schore of Legal Services of New Jersey, an attorney for the Guillaumes, saying that…

“While she was pleased with the ruling on the need to name the actual lender in a notice of intention to foreclose, she was disappointed that the court didn’t require dismissal of the complaint.”

Okay, I hate to say this but… does any of this really matter to homeowners? Aren’t both positions merely a delay, and not much of a delay at that?

I mean, one way the notice of intent to foreclose includes the name and address of the lender in addition to the servicer, and the other way the notice doesn’t.

It seems to me that we’re pretty much exclusively fighting for delays, these days… in the hope of gaining leverage… all to achieve one thing… an affordable and therefore sustainable loan modification, because that is the only way homeowners are remaining in their homes in any number. Everything else seems to carry the odds of a Hail Mary at best.

Why are we giving our government a pass?

In February of 2009, our president introduced a plan that was to provide a path to precisely that, a sustainable loan modification, but when the participating servicers weren’t following that program’s rules, no one was willing to enforce them. And because of that entirely unacceptable and unforgivable unwillingness to enforce the programs rules, our entire nation has endured unspeakable suffering and financial pain.

But we didn’t turn to our legislature to demand that something be done to correct the unjust situation, we followed other paths instead, perhaps for good reason. But the fact remains that we have largely ignored the fact that the failure of HAMP is our government’s failure. As such, it is our government that should be held accountable. And as this is an election year, it seems the timing for such efforts is fortuitous.

I’m certainly not saying that people and their attorneys shouldn’t be doing whatever they can to protect their homes, and I’m sure there are times when a delay is advantageous. All I’m saying is that when the rules set forth by a federal program are being ignored it’s up to our elected representatives to do something to make damn sure those rules are followed because they were written in best interests of the program’s participants.

EPILOGUE…

The rules set forth under HAMP should be followed. Now, with whatever the AG settlement says, we’re about to have a new round of rules… and since it’s possible that Congress will again refuse to enforce those rules, I believe that we should be working to structure and demand a private right of action and attorneys fees to allow homeowners and trial attorneys to turn to the courts for relief.

To be blunt, it seems to me to be insane that our president should be allowed to announce and implement a $75 billion program designed to save homes from foreclosure, in order to rescue our economy and protect our middle class population, and then when program applicants are abused because program rules are not followed, that our legislature sit on their hands pretending that nothing can be done… as we go off to try other approaches.

It also seems ridiculous that a $75 billion program, three years after its launch, has only spent five percent of its budget, and no one says a word. If we had a $75 billion program for rats and mice, and three years later only five percent of the budgeted amount had been spent, there would be people screaming about how we’ve underserved the rats and mice. In fact, I don’t think I’ve ever heard of a government program under-spending to this degree. Has it ever happened before?

Why is there no effort to hold the administration and member of Congress accountable for what has clearly been their failure related to the federal government’s loan modification initiative? Why are we accepting such utter failure and holding them accountable for nothing, when in point of fact, their failure has cost the country trillions, and destroyed the lives of millions?

Instead it seems that we’re being corralled into a position where almost all of our efforts, even if successful, only have the potential to lead to a delay… a delay that in most cases reduces the potential to save the home.

We still have a democracy of sorts, do we not? Isn’t it the responsibility of our elected representatives to protect us from abuses caused by inadequacies in federal programs? Aren’t we supposed to be holding them accountable and demanding they so something. That’s how democracy is supposed to function, is it not? Why are we not trying to force our democracy to function, as it was intended to function… as it has functioned for hundreds of years?

Or, what about at the state level? Our AGs settled and let us down. That much seems water under the bridge, so fine. Well, I for one want the “new” servicer standards or guidelines to be more than mere suggestions… can they be codified at the state level.

I’d certainly feel a lot less let down by the AG’s settlement if the servicer standards were made into law that had a private right of action and a provision for attorneys fees because that would save homes and stop foreclosures, and it would do so more effectively than any amount of money.

Let’s UNITE homeowners around fairness, instead of DIVIDING them over delays…

I’m not talking about bailouts for borrowers, I just want the rules associated with a federal program to be followed and enforced, and I think every homeowner in the country should and would want that too, regardless of whether at risk of foreclosure or not at this moment.

Every homeowner in America should have an interest in federal programs operating as they were intended to operate. It’s not about who is at risk of foreclosure and who isn’t. It’s simply about being in favor of basic fairness in our federal or state programs. And basic fairness, competence and accountability from our elected officials. No one should, and few would, oppose any of those ideals, and those that suffered as a result of being deprived such fairness would engender sympathy from others.

Technically deficient paperwork, on the other hand, as was the crux of the Guillaumes decision by the New Jersey Supreme Court, is an entirely different matter. Guillaumes will appear to many to be a distinction without a difference. Who cares if the lender is mentioned on the notice or not… the answer is most assuredly not many people.

It will also appear to be a transparent a stall tactic, since even if the judge were to dismiss a foreclosure that failed to comply with the state’s Fair Foreclosure Act, the remedy would simply be to begin again. I realize that this would buy a homeowner some time, but it would not buy much, and the time it would buy would make it that much harder to get the loan modified, as time is the enemy of modifications.

The truth is, Guillaumes is what it appears to be… stalling… hoping for leverage, and losing a house to foreclosure. And that does not engender sympathy from homeowners not facing foreclosure. What it does is further divides those in foreclosure from those who are not.

Delays for technical reason are never going to make homeowners in foreclosure look good to those not in foreclosure. Don’t shoot the messenger, but it’s one thing if you’re being treated unfairly… screwed around by a government program where participating servicers who are receiving money from the program are not following the rules. That’s wrong in anyone’s book.

It’s quite another when it appears that all that’s happening is a delay of the inevitable based on what’s perceived as relatively trivial or technical, and that’s what comes to pass. This decision helps no one but servicers, and does significant further harm to the image of homeowners at risk of foreclosures as “deadbeats” postponing the inevitable.

I believe it is to large degree indicative of a need to re-think our strategy on behalf of homeowners and the foreclosure crisis. The track we’re on far too often has no win available, and can cause significant harm to the cause and the individual homeowners we’re trying to help.

I would appreciate responses to the ideas presented in this post, at least the Epilogue… Thank you.

Mandelman out.

US Bank National Association v. Guillaume

Feb

How About Them Fraudsters? Former Cowboy Lockhart Faces 10 Years After Mortgage Fraud Conviction

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

71302Leave a Comment2012-02-21+14%3A47%3A034closureFraud

How About Them Fraudsters? Former Cowboy Lockhart Faces 10 Years After Mortgage Fraud Conviction Lockhart was involved with real estate entities, some formed by him and Tisdale, which had names that were often derived in some fashion from a reference to the Dallas Cowboys, including America’s Team Mortgage; America’s Team Realty; America’s Team Funding Group; … Read more Related posts:

Feb

Attorney Wins “Free House” in Case Before 9th Circuit Court of Appeals – A Mandelman Matters Podcast

By Mandelman | HAMP, Housing & Economic Research, Loan Modification, News for the Patriot

67764Leave a Comment2012-02-04+19%3A59%3A19Mandelman

When it comes to defending homeowners against wrongful foreclosure, or suing banks on behalf of homeowners, Attorney Nathan Fransen, of the firm Fransen & Molinaro in Corona, California is a very smart, experienced and dedicated attorney. This I know for a fact.

How do I know this? It’s simple. Over the last few years, I’ve watched him literally bang his head against the wall as California’s courts have unabashedly approved of MERS, disregarded flaws in the securitization process, not cared one bit who signed what, and in general ignored everything having to do with foreclosure cases except the fact that the borrowers hadn’t made mortgage payments in so many months. He argued complex legal theory and simple fraud… he was honing his approach, and although he had his share of frustrating days, he was careful which cases he took on, never following an unproductive path twice. I’d refer potential clients to him fairly often, and in most cases, he’d talk them out of filing suit against whoever they had thought they had wanted to file suit against.

Don’t tell him I said it, but he’s also just generally a very smart person, you know, paid attention in school kind of person… fairly well-read… knew about things outside his area of expertise… the whole bit. He also had both the patience and ability to explain things about the law to me when I was frustrated over how things weren’t working. When someone can keep complicated things simple, you know they understand them inside and out… and when they can hold their own in a debate with me… well, I’m sorry but that’s saying something.

So, he called me a few weeks back and told me quite nonchalantly that he’d had a very good week. I was happy to hear that someone had. What was so good about it? Well, he had won two of his cases and at least one would result in his client getting a “free house.” The other might be a free house too, or maybe just a pretty good size pile of money. It’s true… Nathan had gone in front of the 9th Circuit Court of Appeals… his first time, by the way… and beaten US Bank, hands down… in Causey v. US Bank.

It seemed to me to be an impressive win, because he was appealing after losing in the lower court. He’s smart, patient and methodical… three things that tend to pay off eventually, but he wasn’t just going up against US Bank… no, he was going up against the dreaded “free house,” meaning that if the court ruled in his favor, his client would no longer have a mortgage secured by real property. At best, the amount owed would be unsecured debt, like credit card debt, and that would mean it could potentially be discharged in bankruptcy.

But, don’t jump to conclusions because it’s not what you’re thinking.

He showed me how I could actually listen to him argue the case in court, the 9th Circuit has audio files of the courtroom proceedings online, and listening to it was fascinating. So I figured out how to download it and then convert it to a file format that I could put inside a podcast. Then I asked him to comment before and after the case so listeners would really get valuable information and be able to learn from his experience.

I don’t want to spoil it, so I won’t say anything more… well, okay I’ll say one more thing. As I listened to him argue his case in court, one thing came through loud and clear: Judges hate the dreaded “free house.”

This is one Mandelman Matters Podcast that you definitely don’t want to miss. Nathan sets it up in the beginning, then you hear the audio of the actual courtroom arguments, both his and the lawyer for US Bank… and then he and I argue various topics such as whether robo-signing should be prosecuted and by whom, along with several other things that I know are frustrating homeowners today.

This is the real deal… you could call it “reality podcasting.” Turn up your speakers, sit back, relax, and listen as three justices from the 9th Circuit Court of Appeals struggle to balance the rule of law against the dreaded “free house.” I hope you enjoy it as much as I did…

CLICK BELOW:

Mandelman Out.

Feb

Abigail Field | Securitization Fail, Or, The Depth of Schneiderman’s Betrayal If Signs the Servicer Settlement, Or, Why DE AG Beau Biden Rocks

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

67450Leave a Comment2012-02-02+20%3A24%3A524closureFraud

“If the Trust doesn’t really own the loans, you see, our deal blows up. If the Trust doesn’t own the loans, the Trust doesn’t have a right to collect and give out the mortgage payments to you. The Trust also doesn’t have the right to foreclose on the homeowners. And any money the Trust pays … Read more Related posts:

Jan

Forced Placed Insurance | Elderly Couple Facing Foreclosure Claims JPMorgan Took Payments for Principal and Interest and Applied it Toward Insurance

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

66245Leave a Comment2012-01-27+17%3A08%3A164closureFraud

Baird couple facing foreclosure claims house payments wrongly uncredited to mortage loan It’s been enough to make Virginia Tollett sick with worry. “If we hadn’t went and got an attorney, they would have auctioned our house on the courthouse lawn,” said Tollett, 72, her voice rising. “They would have sold our house.” Tollett and her … Read more Related posts:

Jan

Should the Government or the Market Set Mortgage Down Payments? A New Study

By Melissa Jacoby | Securitization-MBS

65611Leave a Comment2012-01-24+17%3A47%3A18Melissa+Jacoby

UNC's Center for Community Capital has posted a new analysis of 19.5 million mortgage loans originated between 2000 and 2008 finding that mandatory down payments of 10% would lock out nearly 40% of all creditworthy borrowers while a 20% down payment would exclude 60%. The study finds a significantly higher exclusion rate for African American and Latino borrowers. The authors (Roberto Quercia of UNC, Lei Ding of Wayne State University, & Carolina Reid from the Center for Responsible Lending) do find valuable default-reduction benefits of other forms of strong underwriting as the Dodd-Frank Act already requires (through the "QM" and "QRM" classifications), but signal caution about the significant access costs of government-mandated down payment levels that government regulators may be currently considering.

Jan

What is the Relationship Between Credit Cards and Mortgage Delinquency?

By Melissa Jacoby | Securitization-MBS

62518Leave a Comment2012-01-11+11%3A00%3A00Melissa+Jacoby

Previously I mentioned this new paper on homeowners in bankruptcy in the American Bankruptcy Law Journal. The central goal of the paper was to investigate what makes homeowners more or less likely to have mortgage troubles as they head into bankruptcy. One of the notable findings is that, across all the models, credit access had a significant effect on keeping mortgages current and avoiding foreclosure initiation (specifics listed pp. 302-304). But why?

The study cannot say for sure, so the discussion section (pp. 308-10) explores several hypotheses. Maybe those with continued access to credit cards had better credit histories and were in a stronger relative financial position. Perhaps credit cards filled in other financial gaps so that a debtor could keep a mortgage current. After all, a quarter of filers who missed mortgage payments specifically reported using credit card cash advances as a method of catching up in the two years prior to filing.

But other studies connect the dots differently. For example, some researchers have examined the circumstances under which homeowners prioritize credit card bills over mortgage payments, increasing the likelihood of delinquency. And, before the financial crisis, some authors raised concerns that homeowners put homes at risk by using cash-out refinancing to pay credit card debt.

Some caveats are in order. The paper fully explains the limits of the data and our analysis, and is looking at 2007 bankruptcy filings, so the world looks different today. But if you have a favored hypothesis for this set of findings, please share!

Jan

In or Out of Mortgage Trouble? A Study of Bankrupt Homeowners

By Melissa Jacoby | Securitization-MBS

60975Leave a Comment2012-01-04+17%3A47%3A48Melissa+Jacoby

This is a newly published paper in the American Bankruptcy Law Journal that I was lucky to work on with Daniel McCue and Eric Belsky at the Joint Center for Housing Studies at Harvard University. Using previously unexamined data in the 2007 Consumer Bankruptcy Project, we study what makes homeowners more or less likely to have mortgage troubles as they head into bankruptcy. Although much can be said about the econometric analysis, for now I wanted to mention quickly that the paper includes descriptive details about bankrupt homeowners (debtor-reported) such as numbers of missed mortgage payments, use of adjustable rate mortgages, mortgage broker use, mobile homes, and refinancing or home equity lines of credit. So please check it out!

Jan

In or Out of Mortgage Trouble? A Study of Bankrupt Homeowners

By Melissa Jacoby | Securitization-MBS

60973Leave a Comment2012-01-04+17%3A47%3A48Melissa+Jacoby

Dec

DOLFO v BANK OF AMERICA | Homebuyers Claims BofA Found a New Dirty Trick Illegally Extract Money from Customers, Foreclose

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

55739Leave a Comment2011-12-11+21%3A37%3A294closureFraud

Class of Homebuyers Claims BofA Found a New Dirty Trick SAN DIEGO (CN) – Bank of America found a new way to illegally extract money from customers, according to a federal class action: deduct taxes and insurance from mortgage payments, even though the homebuyers make those payments themselves, then call the mortgage in default for … Read more Related posts:

Dec

19 Payments Later, Bank of America Refuses to Honor Loan Mod after Husband Dies (VIDEO)

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

55740Leave a Comment2011-12-11+21%3A15%3A474closureFraud

“Here I was, paying every month (the amount the bank told me to pay), thinking I was OK and waiting for the OK that the loan would be approved in my name and everything,” said Geffre. “Then they hit me in July saying, ‘We can’t accept your money anymore.’” ~ 4closureFraud.org Tweet Related posts:Bank of … Read more Related posts:

Oct

Our Guide to Obama’s Floundering Foreclosure Programs

By 4closureFraud | Bankruptcy, Foreclosure Fraud, News for the Patriot

42373Leave a Comment2011-10-10+21%3A20%3A384closureFraud

Our Guide to Obama’s Floundering Foreclosure Programs by Lois Beckett ProPublica More than 6 million Americans are behind on their mortgage payments or facing foreclosure [1]. Housing prices have continued to drop [2], and many neighborhoods across the U.S. are filled with foreclosed homes [3]. What exactly has the administration done in the face of … Read more Related posts:

Oct

Only One Paycheck Away from Disaster… No kidding, really? Go figure.

By Mandelman | Housing & Economic Research, Loan Modification, News for the Patriot

41315Leave a Comment2011-10-05+22%3A19%3A58Mandelman

Okay, so I’m sitting here having my morning coffee and I come across Naked Capitalism’s post about a story that I saw in DS News last week, under the headline, “Job Loss Could Put One in Three Out of Their Home.” I didn’t write about it last week because it seemed to me to be anything but “news”.

The story starts out like this…

“One in three Americans would be unable to make their mortgage or rent payment beyond one month if they lost their job, according to the results of a national survey taken in mid-September.”

I’m serious, when I read that last week in DS News the first thought that came to my mind was: Wow… and that’s news to someone?

And the second thing I said to myself was: Yeah, and another one in three would be right there with the first one in three, but they lied when the survey taker called.

The DS News survey went on to say that even people making more than average would be in trouble without their jobs…

“Despite being more affluent, the poll found that even those with higher annual household incomes indicate they are not guaranteed to make their next housing payment if they lost their source of income.”

Golly, well color me surprised. Apparently, ten percent of the survey respondents that earned over $100k a year said they would immediately miss a payment were they to lose their job. And 61 percent said they couldn’t make more than five months of mortgage payments if they found themselves out of work.

It seems that DS News and even Yves over at Naked Cap are surprised… even shocked by these numbers. Me? I find the 61 percent could make it five months shockingly high. I think at least half of the 61 percent were lying in order to feel better about themselves.

See, this is how the real world calculates their net worth, absent a paying job and ever since the banks defrauded and hence destroyed the credit markets and then stood around blathering about irresponsible borrowers and moral hazard long enough to eviscerate all of the home equity on the planet…

Start with available credit on cards. Then, I figure my change jar is good for $500 easy, in a pinch. And then there’s the $1,000 I could get out of a couple weeks of garage sales on Saturdays… that would cover food and gas. After that there’s the gold or silver coins purchased along the way and thrown in my sock drawer. I don’t know what I paid for them, but I know they’re easy to turn into groceries. Then there’s stuff that can be pawned… expensive watches purchased in between stock market bubbles are always good for that sort of thing.

After that it gets harder… like I suppose I could sell my bike or a camera on eBay or Craig’s List, but it could take time, so I shift my thinking to things like guitars or original art bought with a bonus check years ago. You know the kind of things that you shelled out $6500 for, but you could always sell for $350 if you needed to eat.

But, what about my mutual funds? Silly boy… those were gone bubbles ago. My IRA or 401(k)? Well, how the heck do you think I’ve made it from the last meltdown to today?

So, lets see… how many mortgage payments is that? Umm, let’s see… seven minus four, carry the three… hmm… oh, NONE.

And I’ve got another thing to say on this subject, just in case Yves and DS News aren’t aware of this little fact either…

You know how Ben Bernanke says inflation is under control if you take out food and gas. Well, am I the only person out there that hears that and thinks… hang on, all I buy is food and gas, why would we take those things out of the calculation? Does anyone know anyone who is just headed to the mall to idly shop for stuff at Nordies or Saks these days?

And have you noticed the cars on the road have changed? There’s hardly any new ones out there anymore. I live in Southern California, and a few years back, you couldn’t get through a single morning without seeing at least 3 new Mercedes Benz models, a few BMWs, 2 Jags, 6 Lexi (I think that’s plural for Lexuses, right?). Now, if you even see a new car, it’s a Kia or a Hyundai.

Of course, the morons over at DS News are saying:

Job loss has become the primary driver of mortgage defaults.

No they haven’t, you fools… job loss doesn’t cause mortgage defaults… we’ve had job loss on and off for years, but it didn’t come with record, out-of-control foreclosures. After the dot-com bubble burst unemployment was quite high in and around Silicon Valley and Massachusetts. But foreclosures didn’t spike… how come?

Because it used to be if you lost your job you either borrowed on your house to get through it, or worst case you sold your house. Gee… I wonder why neither of those options exist anymore?

Oh, wait a minute… no I don’t… it’s the bankers that broke the world once again.

Of course, DS News is about as banker-friendly a publication as exists anywhere, so it doesn’t surprise me that they’re going to make unemployment the cause of something…

“With the national unemployment rate holding above 9 percent for five straight months and not expected to drop by any significant measure in the foreseeable future, the state of the labor market is one of the biggest obstacles for struggling homeowners and their lenders.”

Don’t you love the way this stuff gets phrased? The national unemployment rate is “holding above 9 percent.” First of all, you bank-friendly clowns at DS News… that’s all crap because you and I both know that the U3 unemployment rate only accounts for those in the labor force that are not working and actively trying to find a job.

U3 leaves out a whole lot of folks, like the ones out of work for so long that they’ve stopped looking for a job and haven’t answered their phone for months, and the ones working part-time and basically starving to death. The U6 unemployment rate is up around 16 percent, and even that is somewhat suspect.

The whole thing is based on a Household Survey of 60,000, and some moderately educated guessing using something that defines opacity called the birth/death model that is used to estimate how many businesses have been born and how many died at a certain point in a modeled recession, based on data about U.S. recessions going back to 1950. The assumption is, for example, that if we’re at a certain point on the modeled recession, then we can estimate how many small businesses are hiring and somehow extrapolate some contribution to the unemployment rate.

I know, that’s not all that clear, but I’m not trying to teach you how to do it, so relax. The important thing to know is that we only started keeping data on this country’s recessions in 1950… and we haven’t had anything but ‘V’ shaped recoveries since 1950. If we had data from 1930, well then it might be an accurate map upon which to plot our economic location, but as it stands… well, not so much. It’s like were looking at a map of Mexico and trying to figure out how to get to New Jersey.

Here’s how all that U1-U6 stuff breaks down:

U1 – This is the percentage of the labor force unemployed for 15 weeks plus, the “chronically unemployed,” as they’re referred to at the Bureau of Labor Statistics (“BLS”)

U2 – This is the percentage of the labor force that lost jobs, or completed temp jobs but are now out of work once again.

U3 – This is the one you can think of as “headline unemployment,” because it’s the number the government always reports. It’s made up of those who are not working but actively seeking employment.

U4 – U4 is U3 plus a dash of “discouraged workers,” which are those folks that have stopped looking for work because there isn’t any and they’re tired of hoping against hope. You know… they’re discouraged.

U5 – Take U4 and sprinkle in “marginally attached workers” and you get U5. What are marginally attached workers? I don’t care…

U6 – This is the real, fully loaded unemployment rate. It uses U5 and adds in the part-time workers who want to work full-time but can’t for economic reasons. The under-employed, as it were.

Okay, so now that we’ve got that out of the way, the DS News article went on to discuss the variety of programs that have come down the pike supposedly to help homeowners who are unemployed. I’ve written a fair amount about these spectacular failures over the last year or so. None of them make any sense whatsoever. I mean, does the idea of loans for people that don’t have jobs sound like it’s going to go swimmingly?

Emergency Homeowners’ Loan Program (EHLP) was supposed to subsidize 30,000 mortgage payments for unemployed homeowners. Official statements coming from HUD say that they don’t expect to meet the original goal of $1 billion, and the New York Times says it won’t be half that amount, but to-date the numbers, as close as I can remember, were coming in at like 250 applications and a handful of approvals. Laughable.

And here’s a quote a really loved:

“An analysis of government records by USA Today shows that a separate federal program which provides money to individual states to assist homeowners who’ve lost their jobs has been slow in ramping up.”

Slow going? I do not suppose you could speed things up? I hate waiting. My Name is Emilio Montoya! You killed my father! Prepare to die! (Come on… didn’t you see “The Princess Bride?”)

Now get this… but for the record I want you to know that I don’t need this sort of charity. I could be funny even without this stuff.

“Through the Treasury’s Hardest Hit Fund, 18 states were awarded a total of $7.6 billion to develop their own localized programs to counter unemployment and falling home prices in the fight against foreclosure.

USA Today says only about 1 percent of this money has actually been distributed to distressed homeowners, 16 months after the program was launched.

The news agency found that as of June 30th, 17 states had used the federal funds to help about 7,500 homeowners.”

Well, bang-up job so far, fellas… LMAO… I’m dying over here. These people need to work with a laugh track. Do you hear that… isn’t that the circus music from Ringling Bros?

So, Yves… the news that people are broke really should not be so “stunning,” as you mentioned it was to you. America’s middle class have been raped and robbed, but slowly over the last 30 years, and then at a faster pace since 2007.

It all started in the mid-1980s when securitization started to make credit flow freely, and collectively we went into a debt nap. When we awoke, we were driving BMWs over to buy a new $400 sweater at Saks, ordering the paté de Fois Gras, and couldn’t seem to remember our neighbor’s last name.

Thirty years later, we had bought so much stuff that the main reason that many people don’t want to walk away from their underwater homes is that they break into a cold sweat just thinking about having to clean out their garages.

Since then, we’ve been bubbled into financial ruin. We bought high and sold low, until our 401(k)s turned into 201(k)s, and then we doubled down on shares of Pets.com, never bothering to question how the company planned to deliver 50 pounds of kibble across the country overnight… for free. When the bubble popped, we promised God that if Cisco Systems would just come half way back, we’d buy nothing but bonds for the rest of our lives.

So, we swore off risky growth stocks and poured our discretionary dough into something safe, something solid… something responsible… real estate, what’s more responsible than real estate. Houses could never go down to zero, don’t you know. We were going to be just fine after all. We’d be property owners, land barons, our counter tops made of marble flown in from Lake Baikal.

Nothing down, stated income, and we’ll refi in a couple years to a fixed rate. What could possibly go wrong? You know… besides EVERYTHING.

And now we’re broke… and someone broke the credit markets… so fine. We’ll just stop buying stuff and learn to save again, like our parents and grandparents always said we should.

Yves is concerned that with all of us sitting out here on the edge of financial ruin, when the next financial shock wave hits, we’re going to need a lot more of those plastic food stamp cards. And she’s probably right… it’s going to be a mess… but you want to know a secret?

We’re going to be okay… I mean us, the homeowners… the broke people… the ones on the edge… we’re going to be absolutely fine no matter what. Even if we lose a house… so what we’ll rent one just as nice… maybe find one with a pool… for less than we were paying, and we won’t be underwater anymore… won’t have the insufferable bankers to fear anymore… no more calls at 8:00 AM on the dot from Chase asking when we plan to make our next payment, no more listening to insensitive idiots calling us “irresponsible borrowers,” because we certainly won’t be anything like that anymore.

Nope, we won’t borrow anymore… debit cards are so cool… oh, and how much is that sweater? Are you kidding me… not a chance!

Did you see my new Kia… paid cash… now I’m going to drive it for at least a decade. Great mileage too. And so small, I can wash it myself over the weekend… it’ll be fun. Then maybe a picnic in the park… play with the dog… get to know our neighbors again, maybe play some Bridge… watch something on cable TV before bed.

Yes indeed… WE HOMEOWNERS ARE GOING TO BE JUST FINE… everyone else, like our politicians… the bankers… those corporate execs… those are the people you should be worrying about Yves, not us. It’s not our futures I’m worried about, it’s theirs. We’ve already fallen and the rest of the way down actually sounds kind of freeing, if you ask me. They, on the other hand should be careful because their first step down is likely to be a doozy.

We’re going to get responsible, stop spending, start saving… no more credit. We’re swearing it off like a bad cold. Back to basics… in fact, it’ll be great. We’ll teach our children to do the same things. Think I’ll open an account at a community credit union. Let the bankers find some other suckers to securitize and scam… ’cause the American middle class has had enough.

I wonder who will miss whom more. I don’t think I’m going to miss the bankers, or the politicians, or the corporate fat cats, but I’m thinking that in the end, they may miss us quite a bit.

And besides, I really did need to clean out my garage anyway.

Mandelman out.

Come on… help me get this documentary done this year… it’s really important because we need to change the way our politicians and others think about the foreclosure crisis, and there’s no time to wait for them to read all 525 of my articles. Take a chance… I wouldn’t ask if it wasn’t important.

Sep

Bank of America approves permanent loan modification. Homeowner makes payments. Trustee sale set Oct. 19th.

By Mandelman | HAMP, Housing & Economic Research, Loan Modification, News for the Patriot

39819Leave a Comment2011-09-29+02%3A18%3A52Mandelman

A homeowner from Tennessee called me today in a panic because she had just been notified that Bank of America is planning to sell her home at auction on October 19th. She was very upset, and even downright scared, truth be told. She’s disabled and has lived in the home for the past 16 years. She doesn’t know where she’d go, and doesn’t see how she could possibly move out in under a month.

Her name is Cynthia McMahan and she lives in Knoxville.

She also admitted to being quite confused, and understandably so, because she’s not in foreclosure. Nor, is she late on her mortgage payments.

I tried to explain to her that none of that mattered. Bank of America obviously wants her out, so she had better start packing.

She became even more upset. She explained that after a positively joyous year spent applying for a loan modification at Bank of America, making all of her trial payments and the rest, three months ago Bank of America offered her a permanent loan modification… and she signed the contract, accepted the deal, and has made all of her payments on time and as agreed.

“So what?” I replied. “Why should any of that mean that you get to keep living in your house?”

Silence. Clearly, I had her.

“But… I signed the contract they sent me, and I made all my payments…” her voice was trembling now and I could tell that she was less and less sure of her position.

“Who said that your home was to be auctioned off on October 19th?” I asked.

“A lawyer from Wilson & Associates PLLC in Little Rock, Arkansas. Her name is Shellie Wallace, Attorney at Law,” she replied.

“And did you call Bank of America to beg and plead?” I inquired.

“Yes,” she said. “But first they left me on hold for an hour, and then when the woman came back on she said there was nothing to worry about because I’m not in foreclosure… that I should put my trust in trust Bank of America and everything would be just fine.”

“Okay, so what’s the problem?” I asked.

“Well, I called that lawyer from Wilson & Associates to tell her that Bank of America said that I’m not even in foreclosure, and that my home isn’t going to be sold on October 19th,” she explained. “But she said the bank was wrong and that I’d be out on the street if I didn’t make some plans to live somewhere else.”

“Okay, so are you making plans to live somewhere else? I mean, that lawyer sounds like she knows what she’s talking about,” I said bluntly.

“But where will I go,” she cried out. I’m disabled. I’ve lived here 16 years. I made all my payments. I have nowhere to go…”

“Look, this is Bank of America we’re talking about here, so I really don’t see that you have much choice,” I said trying to be helpful. “What about a tent, do you own a tent?”

“Isn’t there anything you can do? I read your blog… can’t you help me in any way? Everyone said you’d be able to help,” she pleaded.

“I’m trying to help you… I mean, come on… who was it that came up with the tent idea? Me, right? So, don’t say I’m not trying to help. Sheesh. Okay, what about a homeless shelter? Is there a homeless shelter near where you live? Or, I know… how are you fixed for cardboard boxes?”

“This isn’t fair… it’s not right. Bank of America has been torturing me for over two years… I’ve done everything they asked, over and over again. And after all that… they’re going to sell my house right out from under me and there’s nothing I can do? How can that be? You have to help me… ” Her breathing was getting heavier as she spoke.

“I’m sorry, did you say something… I was just watching a Gomer Pyle re-run,” I explained. The one where Sergeant Carter makes Gomer go on a double date… that show always cracks me up… sorry, go on, what were you saying?”

She was sobbing now…

“Can you hold on for a sec,” I asked. “The dryer just buzzed and I don’t want my shorts to wrinkle. Hang on, I’ll be right back…”

“Oh my God,” she screamed into the phone…

“Okay, okay… don’t get your panties in a bundle… there is one thing I could try…” I said, not really having any idea what I was talking about at the time.

But then… all of a sudden… out of nowhere… it came to me. And the voice said… If you post it, they will come…

Just in case you’ve forgotten, the homeowner’s name is Cynthia McMahan from Knoxville.

And I’m just sure she’d be very appreciative if anyone could lob a call or an email on her behalf over to the nice trust worthy folks at Bank of America and maybe that nice lawyer too. So, what do you think, DOERS?

Let’s hit this one out of the park for Cynthia in Knoxville, shall we? Come on… did you have a frustrating day? Me too. So, here’s something to take all that frustration out on, what do you say? The woman is current… just signed her permanent loan modification three months ago. And now this?

I don’t know about you, but I’m damn tired of Bank of America torturing folks on a daily basis, especially the ones like Cynthia. Let’s do something memorable, shall we?

Shellie Wallace, Attorney at Law

Wilson & Associates PLLC

1521 Merrill Drive, Suite D-220

Little Rock, AR 72211

Phone: 501-219-9388

Email: swallace@wilson-assoc.com

Shellie Wallace is a Partner and Supervising Attorney of the Foreclosure Legal and Foreclosure Title Departments. She received her education from Arkansas Tech University (B.A., 1989, Highest Honors) and the University of Arkansas at Little Rock School of Law (J.D., 1992). She was admitted to the Bar of the State of Arkansas in 1992. She is a member of the Arkansas Bar Association, serving on the Debtor/Creditor and Real Estate Law Committees.

And let us not forget the Grand Poobah at good ole’ Bank of America:

Brian Moynihan, President, CEO & Chairman

Bank of America

Email: brian.t.moynihan@bankofamerica.com

Matthew Task, Executive Relations,  Office of the CEO (At BofA)

Phone: 813-805-4873

The word on the street is that if you call enough, Matthew Task will answer his phone eventually, but that sending emails directly to Bryan Moynihan generally gets a lot more attention.

Oh, and Bryan Moynihan… you should thank me for only sending my DOERS… ‘cause if they don’t take care of this… I’m coming… and hell’s coming with me. Fix this and fix it now…

Mandelman out.

And if you haven’t already donated in support of the documentary I’m in the middle of producing on the foreclosure crisis, you’re letting the rest of the homeowners down. It doesn’t matter how much… send a dollar for heaven’s sake… sign on as someone who wants the voice of homeowners to be heard. Seriously, what’s holding you back?

May

Today’s New… “But, You Didn’t Make Your Payment” Exemption to the Law

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

26545Leave a Comment2011-05-30+00%3A20%3A05Mandelman

I’m not a lawyer, so let’s be very clear about that, but I’m about to tell you how the law has always worked in this country, as far as I have understood it.

If you came to repossess my car, then you were required to be the person or entity that held the pink slip to my car, or you had to be working for the person or entity that held the pink slip to my car. If you were not the person or entity holding my pink slip, then you couldn’t come repossess my car.

In fact, if you came and repossessed my car but were NOT the person or entity holding my pink slip, then we had a phrase to describe that occurrence as well … you were STEALING MY CAR.

Pretty straightforward, right? I don’t even think you need to finish law school if that’s the extent to which you want to understand the law. And don’t let any of the attorneys that may be reading this around you try to make it more complicated, because it’s not. It is that simple… you can’t repossess someone’s car unless you’re the person or entity that holds the pink slip, or title, to that car… or are working for that person or entity, of course.

That’s the same way it’s supposed to work where houses are concerned. If you don’t make your mortgage payments, that doesn’t mean that everyone in the country is allowed to throw you out of your home… only the person or entity that holds your mortgage is supposed to be able to do that, right? Of course that’s right, silly. And don’t play semantics with me, that’s the deal.

But in this country today, there appears to be a new exemption to quite a few laws… it’s called the “But you didn’t make your mortgage payments” exemption, and when it comes into play, nothing else seems to much matter… you just lose.

Like, what if you don’t make your mortgage payments and the entity that comes to evict you from your home is one that you’ve never heard of before. And they have no proof whatsoever that they own your loan or represent the entity that owns your loan. Well, in general it’s tough cheese. The judge just says, “But you didn’t make your mortgage payments,” and that’s the end of that. And most everyone seems to be in agreement with this line of thinking.

You say, “But, your Honor… they’ve broken a dozen laws here… important laws… laws governing the transfer of property rights upon which the country has been built.” And the judge just gets annoyed saying, “But you didn’t make your mortgage payments,” and that’s the end of that. It’s almost like a get out of jail free card.

So, you say, “But your Honor, they’ve forged the documents, falsified the records, committed fraud on your court.” But he says it doesn’t matter… you didn’t make your mortgage payments… you have no rights and the party that’s foreclosing is now exempt from all of the laws that might otherwise apply. In fact, those laws are now reduced to being mere “technicalities.” And no one cares about technicalities as compared to you not making your mortgage payments.

So, I’m just wondering… don’t you think this sets kind of a dangerous precedent?

Let’s say that you’re not making your mortgage payments. And one night after dinner, the doorbell rings and you answer the door and it’s a representative of your mortgage servicer… and he punches you right in the face and then proceeds to beat the crap out of you.

And you end up in court. And the judge says, “But you didn’t make your mortgage payments, “ and dismisses the case. And you say, “But, your Honor… my mortgage servicer beat the crap out of me and that’s against the law, in fact there are all sorts of laws broken by him beating the crap out of me.” But the judge just replies, “But you didn’t make your mortgage payments, “ and that’s the end of that.

Do you think I’m being ridiculous? Why? What’s the difference between ignoring one set of laws and another set of laws? If you’re allowed to foreclose and kick someone out of his or her home without being the party that either owns the loan or represents the person who owns the loan… if you can ignore those laws, why can’t you ignore other laws too? Which laws apply, when one of the parties didn’t make his or her payments?

You see, I think the reason we have laws about the transfer of property is because it was important that someone not lose their property without those laws being followed. Whether one made their payments or not, wasn’t the point… the point was simply that the transfer of property rights has always been seen as a pretty big deal under the law, as far as I can tell.

I think the reason we let things get a little loose concerning foreclosure is that we trusted the bankers who were foreclose. In California, and all of the non-judicial foreclosure states, as far as I know, you don’t need to prove to the court that you hold the title to someone’s home in order to foreclose, and I’m pretty sure that the reason that was okay to our lawmakers was that they trusted the bankers… and they never envisioned not trusting them in that regard.

The problem is that today there is an abundance of evidence that says we cannot trust our bankers… quite often they lie, commit fraud on the courts, and in general are more than willing and able to fabricate and falsify whatever is required to foreclose on someone’s home… period. They don’t care at all… and they don’t get in trouble for it either, which I find the most disturbing part of the whole thing.

So, since its become clear that bankers lie, and cannot be trusted, we’re going to need to bring back the old laws about having to prove you’re the right party to be foreclosing on someone’s home before you’re allowed to do so. Several states have already done this… Hawaii and Arkansas, most recently. Arizona tried to pass such a law, but the banking lobby got to them and killed them both.

California had a bill that would have come close, but the banking lobby killed it in committee, for heaven’s sake. It was too dangerous to even debate in the legislature.

Some have said to me, “But Mandelman… the banks need to be able to foreclose or repossess when people don’t make their house or car payments.” And I reply… “No one is debating that point. Of course they can foreclose when payments are not made. If they’re the party who holds the beneficial interest, as the lawyers says, in the loan. If they lost the pink slip, they’ll have to correct that problem before they can come take back my car.”

It’s no different than if my car gets impounded for being parked in the wrong spot. When I show up to get it out of impound, I better have the registration, right? If I don’t, what am I told by the man at the impound lot? No ticket, no laundry, right?

We have laws about the transfer of property in this country and there are reasons for these laws. None of these laws say anything about banks only being required to follow them when someone is current on his or her payments.

Let’s stop making this more complicated than it needs to be… if the trust can prove that it does hold the note, that the note was properly assigned to that trust, that the note was endorsed… or whatever was supposed to happen according to the laws and rules, did in fact happen, then fine… foreclose away. But if that’s not the case, banker people… then you have to fix it… before you’re allowed to foreclose.

Sorry, and I know how unfair you think this is, but forging the documents isn’t an okay answer to this problem. Like if you want to repossess my car and you lost the pink slip, the acceptable answer is not to fake one on your laser printer and get Linda Green to sign it, got it? That’s not how we fix things in this country, and it doesn’t matter who made payments on time and who didn’t.

If that’s inconvenient, then so be it. And I have to think it’s a damn sight less inconvenient than what’s going on today, and if it’s even more inconvenient than that, then the bankers in this country have really screwed up bad, and we should all be shown what they’ve done.

I ran all of this by a lawyer friend of mine and here is the language from the Deed of Trust (page 23):

“Reconveyance. Upon payment of all sums secured by this security instrument, lender shall request trustee to reconvey the property and shall surrender this security instrument and all notes evidencing debt secured by this security instrument to trustee. Trustee shall reconvey the property without warranty to the person or persons legally entitled to it.”

So, apparently this language appears in EVERY Deed of Trust, including yours, your Honor. So when you want your pink slip/title/note in order to have your mortgage burning party, you may be disappointed to find that no one seems to have it.

And what about title insurance in the future? Will we be able to get it as a result of this whole mess being allowed to go on unchecked? I don’t think anyone really knows the answer to that question.

Lastly, the question always seems to come around to one of damages. How did the note not being properly endorsed to the trust and the trust being permitted to foreclosing anyway damage the homeowner? Again, it’s quite simple, really…

If someone is allowed to repossess my car even though that entity doesn’t hold my pink slip or work for the entity that holds my pink slip, then whoever repossessed my car STOLE IT. And that, by itself, sounds pretty damaging.

But what if someone shows up later and says they have the pink slip? What then? Will they be understanding and say, “Oh, someone else got it. No problem, we’re sorry to have bothered you. We’ll follow up with them.”

Somehow I doubt that will happen that way. And there are several reasons I’m not at all sure that this won’t be the case in the years to come. For one thing, both Taylor Bean & Whittaker and New Century Mortgage were found to have sold mortgages to more than one person at the same time, and others have admitted that it happens all the time.

And for another, I know of several homeowners who have filed quiet title actions and are still waiting for someone to show up and say they own the loan… in one case that’s recently been brought to my attention, it’s been almost a year and still no one has shown up. Does that mean no one will? Or will someone show up years from now? (Here’s the case, click it and you’ll see.)

Harvey v Garbett, Quiet Title Case in Draper Utah

I don’t really know, but wouldn’t it just be easier for the entity foreclosing to be the entity that actually holds the beneficial interest in the loan? You know, just as the law has always intended?

There’s another reason that it makes sense to require the right entity to foreclose… because the right entity, the entity that does in fact hold the beneficial interest in the loan would be much more likely to want to modify the loan as opposed to foreclosing on it, in instances where the payments have not been made.

You see, servicers chose to foreclose because it’s in their own best interests to foreclose, but what about the investor’s best interests? After all the investor is who put up the money in the first place, so what about the investor’s best interests?

Surely the investor would rather have a modified loan, especially in instances where the home is terribly underwater and by foreclosing the investor will realize an enormous loss and then not be able to sell it… perhaps for several years… wouldn’t you think that investor would prefer to modify the loan and get payments again?

Louis Ranieri, who is often referred to as the father of mortgage-backed securities had the following to say about foreclosing:

“The cardinal principle in the mortgage crisis is a very old one. You are almost always better off restructuring a loan in a crisis with a borrower than going to a foreclosure.

In the past that was never at issue because the loan was always in the hands of someone acting as a fiduciary. The bank, or someone like a bank owned them, and they always exercised their best judgment and their interest. The problem now with the size of securitization and so many loans are not in the hands of a portfolio lender but in a security where structurally nobody is acting as the fiduciary.”

Well, what do you know about that? So, it seems there are lots of good reasons that we should make sure that the entity foreclosing is the entity who does in fact own the loan, or at least work for the entity that owns the loan.

So, why are we making this so damn difficult? And why is it such a big problem for a bank-servicer-whatever to show up and actually prove that the trust actually holds the note in question? They don’t really expect us to buy into that whole, “But we lost them, your Honor. All of them, your Honor. It was a mass misplacement, your Honor.”

I mean, come on now… are we really supposed to believe that ALL of the major banks lost ALL of the notes and ALL at the same time? Seriously? I know 14 year-old boys that could tell you that such a story is simply not believable.

It’s time to come clean banker-people. Your story stinks to high heaven and the homeowners, lawyers, investors, and even the government investigators are all getting closer to uncovering the truth every day.

And until the banks start telling the truth, or modifying loans in the best interests of the investors and homeowners like they are supposed to…

… how about we the people pass a bill that requires the entity foreclosing to prove they are the entity that owns the loan… because it’s clear… abundantly clear… that we certainly can’t trust the trustee any more.

Mandelman out.

Mar

In The News: Thousands of Deeds Likely Forgeries

By Matthew D. Weidner, Esq. | Weidner

22518Leave a Comment2011-03-10+11%3A30%3A42Matthew+D.+Weidner%2C+Esq.

As if the country needed more proof of the outlaw behaviors of banks and their agents, The Baltimore Sun‘s Jamie Smith Hopkins reports that 1,000 or more Maryland deeds are likely forgeries, created by a foreclosure mill. A former notary from law firm Shapiro & Burson filed an affidavit with law enforcement and regulators charging that the attorneys’ signatures on the deeds and other important documents were forgeries signed at the express direction of management. The affidavit attached sample signatures.

See full article from DailyFinance: http://srph.it/i3LBqo

And the Baltimore Sun Full Article Here

And with all the allegations of fraud and well documented questionable practices, it’s probably very responsible for every clerk of court in the country to do what the Manatee County Clerk of Court did….Write a Letter to the Editor of the local newspaper and encourage everyone to examine the the title to their home to determine if there are any irregularities.

See The Letter to The Editor Here

The problem is that when people do this more than half will discover that they are sending mortgage payments to a company other than the company whose name is on the mortgage. Now sure at some point in time they might have gotten a letter in the mail advising them to make their check out to another company, but there was no assignment of mortgage recorded, no presentment of the original note and does anyone keep those notices telling you to send mortgage payments elsewhere? No. And even if you did, the law in Florida remains that the borrower has an absolute obligation to pay the named payee on the note….there’s a 1934 Florida Supreme Court case that is still good law. In that case, a borrower paid off the person who they thought owned the note. The problem was, they had just sold the note. The Supreme Court told the borrower, too bad. You had an obligation to see the original note before you made payment…now pay twice…..and this is still the law of the land in Florida.

Now think about that in the context of today’s mortgage practice.

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Mar

Congress Says: Banks May Be Guilty For Service Members Suicide/Homicide/Wrongful Death.

By Matthew D. Weidner, Esq. | Foreclosure Fraud, Weidner

22136Leave a Comment2011-03-03+17%3A47%3A01Matthew+D.+Weidner%2C+Esq.

This whole country should be seething with anger at the banks and criminal syndicates that have corrupted our country. Nothing makes me more angry than how they’ve treated the men and women who serve in our armed forces. It just disgusts me….

Lawmakers argued Feb. 9 that some of the suicides among American troops in recent years were related to financial woes, including failure to meet mortgage payments.

And as far as Rep. Bob Filner, D-Calif., is concerned, those deaths are the fault of banks that put profits ahead of troop welfare.

“I would call it homicide,” said Filner, the House Veterans Affairs Committee’s ranking member, during a hearing into why JP Morgan-Chase overcharged servicemembers’ on their mortgages and foreclosed on some troops’ homes. The bank now admits that it mistakenly charged too much interest on thousands of mortgages of activated troops who had qualified for a 6 percent rate under the Servicemembers Civil Relief Act.

Filner said if he knew of a suicide directly linked to a servicemember going through a foreclosure he “would like to file a charge of wrongful death.”

Congress Blames Servicers

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Jan

GMAC… Payments or Not, The Foreclosure Machine that Just Won’t Stop

By Mandelman | Foreclosure Fraud, HAMP, Housing & Economic Research, Weidner

19289Leave a Comment2011-01-15+06%3A55%3A11Mandelman

Once upon a time…

Our story begins back in 1995 when Michael and Pamella Negrea built their 2400 square-foot, colonial style home in Eastlake, Ohio, and took out a $200,000 mortgage. Michael’s 53 years old, a Willoughby, Ohio police officer for 25 years… Pam, a graphic designer, is 57. They’ve never been late on, much less missed a single mortgage payment. Nary a one… they should be quite proud.

Since that time, however, GMAC has foreclosed on Michael and Pamella Negrea’s home three times… so far. The couple’s attorney, Stephen Futterer, also of Willoughby, says…

“It’s like a foreclosure machine. It won’t stop.”

The first time GMAC foreclosed on the couple’s home was back in 2001. Totally current on their mortgage payments, it must have come as quite a shock. Once in foreclosure, GMAC wouldn’t accept their monthly payments, so each month they deposited them into a bank account and awaited their day in court.

According to the story in the Cleveland Plain Dealer, Michael Negrea explains…

“You’d call and talk to someone and they said they’d look into it. When you called and asked for the person you talked to, they no longer worked for the company. You’d leave a message for a supervisor, and they’d never call you back.”

The attorneys finally worked out a settlement in 2003. Since the couple had never actually missed a payment, the Negreas would only be required to pay the actual payments owed… not a dime in penalties or interest would be charged, and the foreclosure case was dismissed by the court.

In the written settlement agreement, GMAC also agreed to erase the foreclosure and late payments from the couple’s credit reports, although here we are… EIGHT YEARS LATER, and the Negreas say that still has not happened.

The Negreas resumed making normal payments again in early 2004. I imagine they were probably relieved that the whole ordeal was finally over. “Whew! Well, I’m sure glad that nightmare is over,” I can just hear Mr. Negrea saying to himself.

It was June, when GMAC sent the couple yet another default letter. Michael and Pam not only had copies of their canceled checks, but they also had the return receipts from the U.S. Postal Service that showed the exact dates they had sent their payments and when they GMAC had received them. As always, the couple had made all payments on time, as agreed.

A month later, in July, GMAC apologized for their error. Ooopsie! Sorry about that.

The rest of the summer was fairly uneventful, but in October, the Negreas received yet another default letter from their friends at GMAC.

And right after that they got another letter from GMAC, this time saying that their homeowners’ insurance, which was $500 a year, had not been paid. GMAC was notifying them that the bank had taken out a new policy on their home. The new premium would be $3,200 a year.

There was only one small, teensy-weensey, almost insignificant, little detail: The Negrea’s homeowners’ insurance policy HAD NOT lapsed. Like the couple’s mortgage payments, it had been paid as agreed. They’d been with the same insurance company ever since buying the home back in 1995, and although it must have seemed foreign to GMAC, the insurance company’s policy was not to cancel homeowners’ policies when the premiums were paid as agreed.

It got worked out though… and GMAC sent the couple another letter apologizing. Ooopsie, again!

The couple must have been hoping that they could finally have a wonderful Christmas that year, without GMAC foreclosing and all that, but as the month went on, they noticed that the check they’d written to make their December payment had not been cashed. Uh oh… they must have thought. (I wish this was radio and I could play some scary music right about now.)

The very next month, January of 2005, just two short years after the first case was dismissed, GMAC, who is apparently every bit as tenacious as they are incompetent, foreclosed on the couple’s home YET AGAIN. And this time the bank would not back down.

Not much had changed since the last time around. The Negreas were still current on their mortgage payments, darn them… and ultimately the foreclosure would be thrown out of court once again. But this time the couple, quite understandably, had lost some of their patience with the bank, so they sued GMAC for breach of contract, fraud and unfair debt collection… and this time they insisted on going all the way to trial.

Michael Negrea told Cleveland Plain Dealer reporter, Chuck Crow, that as the evidence was presented, “you could hear some of the people on the jury saying, ‘Oh my gosh.’”

The Negreas were awarded $217,000, which you would think would have been enough to wipe out their $200,000 mortgage, but it took GMAC… are you sitting down… THREE YEARS to make the payment as ordered by the court… and by that time, GMAC had added $50,000 in fees to the balance of their loan.

Okay… TIME OUT.

Why the heck didn’t the Negreas go refinance the loan with a real bank… you know the kind that’s supposed to be pretty good at keeping track of money it receives? Were you wondering that as well? Funny story…

They tried to… but they had two foreclosures on their credit report, along with countless late payments. Ooopsie!

Now look… I realize you must be tired. I mean, I’m tired and I’m only writing this story. Reading it must be nothing short of excruciating. But, I’m sorry to tell you… it’s not over yet, so go get some coffee or something… ‘cause god old GMAC… the foreclosure machine… wasn’t done yet.

It was 2008 when the couple received another troubling statement from GMAC.

The bank was now DEMANDING PAYMENT for its attorneys’ fees… the ones incurred by the bank during the second foreclosure case. That’s right… the case that the bank LOST… the case where the Negreas filed the counterclaim and won the $217,000 that took GMAC THREE YEARS to pay… the case where GMAC had to pay the couple’s legal fees.

Michael Negrea asked: “How can you ask for legal fees when you paid our legal fees?”

Oh come on, Michael… with all due respect, do you have a learning disability? You’re lucky GMAC didn’t bill you for the whole $217,000 plus penalties and interest and initiate foreclosure proceedings once again. I don’t know about the rest of you reading this, but I’m thinking that it’s pretty obvious that Mr. Negrea should have just paid the bank’s legal fees and figured he got off easy.

He didn’t, however, and it must have made GMAC awful mad because throughout the last few years, GMAC just keeps accusing the Negreas of not having homeowners’ insurance. And not only that, but right after that the bank started insisting that it had to make monthly home inspections, and started charging the Negreas $700 or more for each such inspection.

GMAC told the couple that the inspections were being done in order to make sure that they still lived there.

Ohhhh, is that why? Now I get it. See… I told you that you should have paid the bank’s legal fees when they asked you to. See what you’ve gone and done? You had to be a troublemaker, didn’t you?

(Hey, I heard that. Don’t you dare think what you’re thinking about me right now… there’ll be a link at the end and you can read the story for your-damn-self. I’m telling it, just like it says. I’m not exaggerating a thing.)

Okay, so the couple goes back to making normal payments throughout much of 2009, when all of a sudden… wonder of wonders, miracles of miracles… GMAC stopped cashing their monthly mortgage payment checks AGAIN.

Oh no they didn’t. Oh yes they did.

This time GMAC said the couple owed nearly $310,000… plus attorneys’ fees… on what was their $208,000 mortgage, and in August of 2009, GMAC filed for foreclosure AGAIN… this time in federal court instead of Ohio’s common pleas court.

The couple’s attorney, Mr. Futterer told the Cleveland Plain Dealer…

“We feel they’re court-shopping.”

Court shopping, Mr. Futterer? I mean, you’re the attorney here, I’m just some lowly homeowner with a blog and some extra time on my hands, but you would even attempt to explain in logical terms what GMAC is doing? And “court shopping,” would be your guess?

Maybe you’re right, but based on what’s transpired over the last (almost) ten years, I’d say that it might be court shopping, or it might be that the bank is fixing to plant kilos of cocaine in your car and call the DEA to have you arrested… or maybe they’re going to fill your trunk with explosives and then ask to borrow it… so they can blow themselves up. Or maybe their plot involves cottage cheese.

Who the hell knows what these people are thinking?

The trial, by the way, is scheduled for later this month.

~~~

Here are a few quotes from the story that ran in the Cleveland newspaper:

“I can’t image how many people lost their houses who didn’t deserve it,” Michael Negrea said.

“I think a lot of people would have just given up,” said Pamella Negrea, a graphic designer.

“Nobody believes us. People think, ‘A bank wouldn’t file for foreclosure if the bank wasn’t right.’”

Michael Negrea says most people he talks with can’t even comprehend their tale.

“You think, ‘You make your payments, and everything is fine.’ You would think this couldn’t possible happen.”

“People ask me, ‘How do you put up with this?’ I have no choice,” Michael Negrea said. “It has cost us a fortune. We don’t make that much. But it’s our home.”

~~~

Now, in terms of full disclosure of the precise facts…

The Negrea’s loan was sold a few years after the couple qualified for it… to Nation’s Credit, and then it was sold to Homecomings Financial, with the loan being serviced by Fairbanks Capital Corp. In 2003, the Federal Trade Commission sued Fairbanks for deceptive and illegal practices, including not posting customer payments, and the company agreed to pay $40 million in damages that year.

Apparently, while Fairbanks was in the picture for the Negreas, two of their mortgage payments didn’t get posted.

The couple’s first foreclosure was filed in 2001 on behalf of Homecomings, which owned the loan at the time. Right around that time, the servicing of the Negrea’s loan was transferred from Fairbanks to GMAC.

I don’t see how any of those facts make the least bit of difference here. GMAC has been servicing the Negrea’s loan since 2001 when the whole incredible nightmare began, and with it being 2011… GMAC has had all the time in the world to fix this and make it right.

And, need I remind you that we… the taxpayers… paid $19 billion to BAIL GMAC OUT? Because, I suppose the story goes… they were too big to fail.

~~~

In Conclusion…

Well, our story has finally come to an end… for now, anyway. And understandably, the couple says they are drained from years of GMAC. If you ask me, it’s a miracle that Michael and Pam Negrea are both still alive… or that GMAC hasn’t blown up… or something else terrible hasn’t happened.

But the Cleveland Plain Dealer story also says that the couple “is ecstatic that GMAC’s practices may finally be coming to light.” (And there’s that link I promised.)

So… on that count, anyway… I’m sure as shootin’ here to help. How about you? Will you help this story get out? I’m thinking that you will…

Oh wait… before you go, there’s one more thing from the story that I forgot to mention…

“A representative for GMAC did not return a phone call seeking comment.”

Mandelman out.

Plenty more where this came from…

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Jan

Strategic Defaults Don’t Really Exist… Who would have thought that? Oh, that’s right… ME.

By Mandelman | HAMP, Housing & Economic Research, Weidner

19110Leave a Comment2011-01-12+13%3A29%3A25Mandelman

Hey, it’s about time! Finally someone who might be listened to has realized that there’s actually NOT a group of homeowners in this country that can afford their mortgage payments no problem, but have just decided not to pay them because they’re underwater. You know, the type with plenty of cash on hand, that hasn’t lost a job or had a real hardship, but just doesn’t like the fact that his or her house is worth less than they owe and so decides renting would be better.

Blogger Rortybomb has published a piece on Seeking Alpha that should set the record straight… finally. It’s titled: Strategic Default: Watch as Elites Freak Out About a Trend That Isn’t Happening.

I swear, I’m thinking of just re-posting my articles from last year, this year… maybe they’ll make more sense to more people the second time around.

Here’s what Rortybomb has to say:

Strategic default is not a phenomenon in any empirical data, but it is a boogeyman that needs to be ruthlessly pounded on before people realize that bankruptcy is something they pay for in their mortgages, and it is their ultimate safeguard against abusive practices. It’s telling to watch financial elites freak out about the prospect of strategic defaults waves, even as they don’t happen. It shows what really worries them about the state of the economy, about where they may not have control.

Talk about a dog that didn’t bark in 2010. The funny part about this rhetorical crackdown is that there’s been no wave of strategic default people can point to. Homeowners really value their promises and are doing anything they can to try and do right by them, and the industry is using that leverage over them anyway they can.

You’ll sometimes hear the number that a third of defaults are strategic. That number comes a survey conducted by Luigi Guiso, Paola Sapienza and Luigi Zingales. They asked random people if they’d strategically default if their home was X% underwater, took their answers, and projected them onto the actual defaults and how underwater they were. There was no actual look at household budgets in creating this number. I’m a fan of Zingales’ writings, but this is simply not useful for the debate. There’s nothing here.

REALLY? WHO WOULD HAVE THUNK IT? BESIDES ME, THAT IS.

I don’t like to do this, but I’ve been trying to point this nonsense out for so many months now, I can’t even keep track. I didn’t need a study to know this, I come up with my conclusions the old fashioned way… by taking the time to actually talk with thousands of America’s homeowners, hundreds every month since 2008. I know… there are plenty that didn’t believe me at the time, but they come around six months later when some study finally points out what I’ve been saying all along.

Here’s what I wrote some months back in reference to Howie Hubler’s idiotic new business venture and it’s new product that was designed to help stop strategic defaults. Here’s a link, in case you missed it, or weren’t able to read far enough into it to get the point. Howie Hubler’s Loan Value Group… Proof That Wall Street Has No Idea What’s Happening on Main Street…

And here’s an excerpt from that article:

Here’s what Loan Value Group’s Website says about why people default on their mortgages:

Once home equity becomes hopelessly negative, it is no longer in the borrower’s interest to continue paying, even if he or she can afford the payments. Some of these borrowers then default.

Today, 29% of all US mortgages, 15 million homes, have negative equity.

Analysis suggests that over 10 million mortgages are at significant risk of strategic default.

Boy, I’d love to take a look at that “analysis” that “suggests that over 10 million mortgages are at significant risk of strategic default,” mostly because that analysis would also have to simultaneously suggest that far fewer people are at risk of foreclosure because they can’t afford their mortgages, which is what President Obama has said is stopping him from offering more help to stabilizing the housing market.

Now, as many of my readers I’m sure know, I’ve spent the last 18 months talking with literally thousands of homeowners from just about all 50 states, and I’m talking seven days a week, with days so long they’ve too often seen me going to bed as the sun comes up. Suffice it to say, I’ve heard and read just about every take on the foreclosure crisis that could be taken. There’s only one thing I have never heard a homeowner say about their primary residence:

Yes, we can afford the payment no problem, but we decided to bail out anyway just because of our negative equity position. Yep, that was it… we just couldn’t sleep at night knowing that we’re underwater.

In fact, to the contrary… I’ve heard from countless homeowners willing to stay in their homes indefinitely if they could just get some sort of modification that will allow them to do so… regardless of how far underwater they are today.

Yet, in stark contrast to my real life experiences talking with homeowners, there is a fast growing story that tells a tale of homeowners simply walking out of their homes and refusing to pay their mortgages… even though they can afford the payments… ostensibly because they’ve pulled out their trusty HP financial calculators and determined, I suppose using some sort of time value of money-net present value calculation as compared with close substitutes and detailed alternative cost analyses, that their financial interests would be better served strategically defaulting. So ultimately, as the story goes, they are moving out, leaving their otherwise affordable mortgage debt behind them, either because they reside in a state that doesn’t allow for deficiency judgments, or via filing for bankruptcy.

NONSENSE. Not a chance. It’s simply not happening… yet, anyway. It may happen en masse at some point in the future, and perhaps it should be happening in larger number today, but to-date… sorry, no… it’s not true.

I said a lot more along those lines in that article, but if you can’t bring yourself to read the whole thing, at least you get the idea…

Next, here’s an excerpt from my article tearing apart of Donald Bisenius, Executive Vice President in charge of Freddie Mac’s Single Family Credit Guarantee Business, Freddie Mac Has a Message for Strategic Defaulters? Yeah, Well I Have a Message for Freddie Mac.

“…a new and growing concern has emerged: strategic defaults. In other words, borrowers who have the financial means to make monthly mortgage payments, but choose not to do so and, instead, purposely default on their loans.”

Yep, that’s exactly what’s happening in this country today. In fact, the entire foreclosure crisis is nothing more than a bunch of aging boomers deciding that it’s so much hipper to rent.

I’ve personally spoken with several thousand homeowners from all over the country, hundreds that have considered walking away from their mortgages, or are now in the process of doing so, and let me assure you, Don-O, your description bears no resemblance to anything that’s actually happening. And a strategic default isn’t a new, growing investment strategy, DB, it’s still someone losing their home.

Not one of the homeowners that I’ve heard from describes their situation in such happy-Sunday-in-the-suburbs type terms. The homeowners I know are undergoing the worst turmoil of their lives, and having exhausted every other avenue (supposedly) available to them, have come to the inescapable conclusion that walking away is their best… no, their only option. Don-Don makes it sound like they reached the decision over highballs at the 19th hole after wrapping up an afternoon on the links. Did I already call him a jackass? Rats.

And then, in my tearing apart of the Fannie Mae, in my article, Well, Would You Look At That… Homeowners Scared the Heck Out of Fannie Mae, I said the following:

No one is walking away from their home because they weren’t willing to make a good faith effort to find an alternative resolution by working with their servicer. Never happens, or happened. And if it has started to happen, which I still don’t believe, it’s only in response to the treatment of homeowners by their servicers. And true to form, the Wall Street Journal writes a story about homeowners happy about their decision to strategically default, some other news program interviews someone going to Hawaii as a result of not having to pay a mortgage payment, and you… you don’t bother to find out what’s really going on… you start with the threats.

I’m quite sure, if I took the time to find them, I could point to a dozen or more article I’ve written that said the same thing, but why bother?

Here’s my real point… up until now there hasn’t been any serious number of so-called “strategic defaulters,” but there will be soon if we don’t do something to stop the foreclosure crisis. In the words of James Earl Jones in the movie, “Field of Dreams”…
They will come, Ray, they will most definitely come.

I’m not guessing, folks, I’m telling you as sure as I’m typing this that there are feelings among homeowners of anger and frustration that are fast becoming utter hopelessness and when that takes hold, strategic default won’t just be the boogey-man, it’ll be very real and very much unstoppable.

It’s funny to me… in a very sad sort of way that last year when I was writing about HAMP not working and loans not getting modified, almost everyone else in the media was saying the opposite. Then the numbers finally came out towards the end of 2009, and all of a sudden the press started saying, “Gee, maybe HAMP isn’t working.”

The problem is that now HAMP and loan modifications are working better than they ever have before, and now the press is convinced that it’s next to impossible to get your loan modified. In point of fact, I can’t remember the last time I saw someone with a REST Report showing they’re qualified for a loan modification, lose a home. But I see what’s happening… people read what the press is saying and are hesitant to even try to get their loan modified. Great… well, isn’t that just friggin’ great.

I don’t know what else I can do… except to say… don’t listen to the press about loan modifications, or anything related to loan modifications. By the time they figure out what’s really going on, it’ll be over or the reverse will be true.

Stay tuned… I’m going to turn things up a notch with an article on The State of Loan Modifications and the REST Report… later this week. Don’t miss it.

Mandelman out.

Jan

Foreclosed Properties Depress Housing Sales Value

By Matthew D. Weidner, Esq. | Weidner

19105Leave a Comment2011-01-12+11%3A35%3A39Matthew+D.+Weidner%2C+Esq.

Like other examples of mass hysteria or misinformation, it is a widely accepted mantra that we’ve got to churn through all these foreclosures to get our economy moving again. THIS IS FLAT OUT WRONG.

We need to fix the fundamental flaws in our economy which will allow people to go back to work so they can make modified mortgage payments in order to prevent homes from being sold in foreclosure. And yet there exists a profound lack of leadership at the state, national and local levels that are focusing on this.

Instead our leaders are focused on, “Damn The Torpedoes- Churn Through Foreclosures”. Now I can tell you this is great for attorneys because every foreclosed home is going to present potential title claims and legal work and the accumulated cases mean this work will continue for years….but this is not good for our country and it is not good for my state in particular.

Check out this video from Zillow for an explanation of this phenomena. The bottom line is people need to go back to work in order for any solution to the foreclosure crisis that grips this country to take hold. We need to stop proceeding with flawed foreclosures and work on solving the fundamental financial problems that exists and force the banks to start exercising more common sense in the foreclosure process.

Zillow Video

ZillowResearchBrief_ForeclosureDelta_1

Tweet this! Share and Enjoy:

Scridb filter

Jan

Geithner Won’t Quit in Battle Over Elizabeth Warren – WE NEED YOU NOW!

By Mandelman | HAMP, Housing & Economic Research, Weidner

18410Leave a Comment2011-01-01+17%3A49%3A59Mandelman

The Wall Street Journal has come out with a story that may signal the end of the road for Elizabeth Warren, and frankly, I find it a disgusting turn of events that the banking lobbyists will likely win this battle and get rid of the only pro-consumer person in the administration. The article, which was in the December 30th edition of the WSJ, titled: U.S. Seeks Chief For Financial Consumer Agency, says:

White House adviser Elizabeth Warren and a top lieutenant are quietly asking business and consumer groups for names of people who might run the new Consumer Financial Protection Bureau, people familiar with the matter said.

The hunt suggests that Ms. Warren, a lightning rod for some bankers, might not be selected to lead the bureau, a centerpiece of the Dodd-Frank financial overhaul bill that passed this summer. Still, many liberal groups will push to get her in the post.

First of all, let me just register my displeasure at how they are branding Ms. Warren “liberal” as opposed to conservative. I have to tell you that if this is how the conservatives want it, then fine. If it’s going to be “liberal” to want someone to look out for the middle class consumer as opposed to the banking lobby in this country, then so be it.

I didn’t realize it was liberal to want to see someone put a stop to the kind of abusive lending behavior that has stripped the middle class of just about everything they had. I guess conservatives are now the people in favor of predatory credit cards with 39.9%, 49.9%, or even 79.9% interest rates, not to mention the hidden fees and outrageous charges and abusive mortgage payments that double without notice, and are generally marketed to the elderly and less educated segments of the population.

That’s conservative, huh? Well, okay… I guess I’m hating “conservatives” then, because those sort of things are destroying the middle class in this country and that’s like destroying America… and I’m against destroying America.

The WSJ story went on to say:

President Barack Obama’s choice could signal how he intends to deal with resurgent Republicans in Congress. The feelers to business groups serve as a reminder that any nominee would likely need support from at least seven Republicans in the Senate to win confirmation.

Among the names being discussed are Iowa’s attorney general, Tom Miller; New York state bank regulator Richard Neiman; and former Office of Thrift Supervision director Ellen Seidman.

Yeah, that’s about perfect. Go ahead and put a banking regulator in the post that’s supposed to protect consumers. After all, Lord knows our banking regulators, and I use that term loosely, have done a bang up job so far at protecting us. Why not? Hey, maybe Kenny Lewis, the ex-CEO of Bank of America, would take the job. I understand he’s not working at the moment.

The WSJ then explained:

The Obama administration weighed nominating Ms. Warren earlier this year but held off amid concern that Republicans who consider her anti-business would block her appointment. Instead, she was named a special adviser to set up the agency, and a decision on a permanent head was put off until 2011.

Several federal agencies are scheduled to transfer their powers to the new agency in July, and the administration wants to have a confirmed chief in place by then. Without a Senate-confirmed director, the agency’s powers would be limited. For example, the agency wouldn’t be able to issue certain new rules on lending.

And with any of the banking regulators in the job, there won’t be any new rules on lending, at least none that will bother the bakers in the least… so, what’s the difference?

You know… the Democrats really are wimps. I mean… really. Elizabeth Warren was literally the creator of the Consumer Financial Protection Bureau… it was her idea, and its been her that has campaigned for it tirelessly. But the Dems get afraid that some of the senate Republicans don’t like her and they don’t even consider fighting to appoint the best person for the job… they run for the hills and start looking for someone that the other side of this issue will like… even though that essentially ensures that the bureau won’t accomplish what it’s intended to accomplish.

I do understand that the essence of politics is compromise, and that you won’t get very far in Washington playing bull to our system’s china shop, but this sort of flagrant political expediency is what has harmed, and quite likely has fatally harmed, the Obama presidency.

So, as the Journal’s story continued, I got sicker to my stomach:

So far, Ms. Warren and her senior adviser, Raj Date, have solicited input from a range of groups, including the Independent Community Bankers of America, the Financial Services Roundtable and the Center for Responsible Lending, according to people familiar with the matter.

The first two groups are two of Washington’s most influential associations for lenders, representing thousands of big and small banks. The Center for Responsible Lending is a North Carolina-based consumer group that pushed for the creation of the new agency and is influential with congressional Democrats.

Soliciting input from the Independent Community Bankers of America and the Financial Services Roundtable as to who should lead the new consumer protection bureau, is something like asking the Illegal Drug Dealers Association and Pablo Escobar to provide input as to who should run the DEA.

What’s the point? In fact, anyone either of these groups would choose for the role should be the basis for not including them on the list of candidates.

Then the Journal’s story said the following:

The process is at an early stage but could escalate quickly, the people said. A concrete list of candidates hasn’t yet been established, and the White House could dismiss any recommendations made by banking or liberal groups. The decision on a nominee will ultimately be made by Mr. Obama, and could come by March, the people said.

Did you notice how they framed the two sides to the argument? “Banking or liberal groups.” Earlier it was “conservatives vs. liberals,” and now it’s “banking vs. liberals.” So, which is it, or is it one and the same. Is it now considered “conservative to be pro-banking,” and liberal to be pro-consumer? It would seem so, especially as from reading the next paragraph in the WSJ story:

Many credit Ms. Warren, a longtime critic of banks and a Harvard law professor, with envisioning the consumer-protection agency in 2007. Liberals pushed to include it in the Dodd-Frank law, saying Washington needed a regulator whose sole focus was protecting consumers from unscrupulous lending practices. Republicans and business groups, particularly the U.S. Chamber of Commerce, tried to kill it and succeeded in scaling it back.

“Liberals pushed to include” the new consumer protection bureau in the Dodd-Frank law, but “Republicans and business groups, particularly the U.S. Chamber of Commerce tried to kill it, and succeeded in scaling it back.”

I don’t know about you, but that’s just a stunning place to have a dividing line, if you ask me. Republicans, business groups and the U.S. Chamber of Commerce are opposed to a consumer protection bureau whose job it will be to look out for consumers, protecting them from unscrupulous lending practices? Really? After what we’ve just been through, I can’t even believe there’s anyone in this country that would be opposed to consumers being protected from unscrupulous lending practices, let alone the Chamber of Commerce and, in general, Republicans.

I owned my own business for close to two decades, and I’ve been a member of my local Chamber of Commerce, and I always thought that my membership was a way of showing that I supported honest and ethical standards in business. Certainly not that I was opposed to consumers being protected from unscrupulous lending practices.

Many of those unscrupulous lending practices,” one might recall, are illegal acts… crimes. Are Republicans all of a sudden the “Pro-Crime Party?” Would someone please direct me to the rabbit hole because I’m looking to climb back up.

The WSJ further explains:

Ms. Warren has said the bureau’s priorities will include simplifying credit card and mortgage disclosures. She also wants to make the prices of financial products more transparent. Critics say the bureau’s actions could limit choices for consumers and burden financial firms with costly new regulations.

Okay, so simplifying disclosures on credit cards and mortgages, and make the prices of financial products more transparent… don’t those things fall under the category of “positive change” for everyone? Why would one side not want people to know what they’re getting into… to be more knowledgeable and aware of the prices of things?

You see, I’m confused because one phrase I’ve heard coming from the Republicans when talking about the foreclosure crisis is that people need to take some “personal responsibility” for their decisions. So, under the banner of being better able to understand what one is committing to when one signs a mortgage or applies for a credit card, wouldn’t simplified disclosures or clearer pricing be something the “personal responsibility” crowd would support?

After all, the personal responsibility crowd is saying that the borrowers weren’t victims, they’re people who should have known better, so why wouldn’t changes that help to make sure that in the future people would be better able to “know better” be a good thing for the future of personal responsibility?

Also, how exactly could clearer pricing of financial service products or simplified disclosures possibly limit the choices available to consumers, except that maybe the consumers wouldn’t have the scams and abusive products from which to choose anymore?

And as to “costly new regulations,” all I can say is take it out of the bankers’ bonus checks.

The WSJ story continues:

Much will depend on who leads the agency. Ms. Warren is revered by many liberal groups, but it would be even more difficult for her to win confirmation in the new Senate, which will have 47 Republicans.

In the new political dynamic, the White House needs broader support from business groups to move nominees and legislation through Congress. If the administration can win early support for a nominee from business, it could smooth the passage for Senate confirmation.

Since when is “business” opposed to consumers being better informed when they borrow money… and for that matter, since when are banks against that?

The thing is… I’m a pro-business guy… all the way. I voted for Reagan, I voted for Bush I. I even voted for Dubya, although I have to say that didn’t exactly work out as I’d hoped. And when I voted for Obama, the only reason I was hesitant was that I thought he’d be too unfriendly towards Wall Street, which as it turns out should go on record as me being the most wrong I’ve ever been in my whole life. Like voting for “Icy Cold” and finding out it was “Boiling Hot”.

But now I find myself on the other side of business? I’m against consumers getting ripped off and stripped of their wealth by bankers and politicians and that in itself makes me an “anti-business liberal?” Holy mackerel, next thing I know is someone going to be inviting me to save the caribou and drive a wind-powered car? ‘Cause I’m going to resist giving up my 4-wheel drive Suburban, I’ll tell you that right now. Global warming? I was always a little chilly anyway.

And another thing… I happen to like the Ten Commandments, so leave ‘em up wherever they are now, and my family happens to enjoy saying a prayer before we eat and at bedtime, so if you don’t like that, tough cookies. I like tax incentives for business because they encourage business to grow, which means more jobs and better jobs. I sure as heck don’t want government telling me what to do every time I turn around, I think I pay plenty of taxes as it stands, and as far as I’m concerned, we should pave Afghanistan and make it overflow parking for our new ChinaLand Shopping & Amusement Complex, how’s that?

Although I’ve said it before, if you want to put a nativity scene on top of the Supreme Court for Christmas, go right ahead. You want Santa in his sleigh over the White House… why not? And go ahead and plug in a big Jewish star over the Treasury building and a neon “Feliz Navidad” atop of the Department of Agriculture too, if that will help balance things out in your mind, I really don’t care.

But it should be abundantly clear to EVERYONE that this country needs a tad more regulation and oversight of our banking and finance industry in order to prevent those involved from raping the middle class while they pay themselves untold billions in bonuses, and use their immense wealth to purchase our republic and hijack our democracy. Because that’s precisely what they’ve done and what they continue to try to do every single day in real life today… and it must be stopped or before we know it, Mexico’s going to be building a fence to stop our illegal emigrants from crossing their border in the dead of night to look for work.

And Elizabeth Warren is absolutely the right person to lead the bureau of which she conceived, and this moment in time she is likely the ONLY right person for the job. Even she will have a monumental challenge in front of her, but anyone else that I can see, will be dead right out of the gate… and then the abuses we have today… we’ll still have tomorrow.

Oh yeah, and Geithner opposes her big time…

Isn’t that alone enough reason to give her your support?

So, this is it. I want everyone click on the blue type and sign the petition, Let Elizabeth Warren Police Wall Street, which says:

PETITION TO PRESIDENT OBAMA: Elizabeth Warren has proven that she is willing to stand up to Wall Street on behalf of consumers and is the logical choice to lead the Consumer Financial Protection Bureau. Tim Geithner is a longtime Wall Street insider, and if he’s recommending against Elizabeth Warren that’s all the more reason to appoint her.

I know, it seems like we’ll probably lose this fight at this point, Geithner and the rest just have too much power and they never give up pushing for their corrupt practices to continue unchecked, but we’ll definitely lose if you don’t sign, so let’s not just throw in the proverbial towel just yet, okay?

Come on… take a moment to click it and sign it ! Let Elizabeth Warren Police Wall Street

Mandelman out.

~~~

(And hat tip to The Daily Bail for bringing the petition and much more to my attention… a really great site, by the way.

And if still unsure, click this and read their article, “The Real Reason Tim Geithner is Afraid of Elizabeth Warren.”)

~~~

And here’s Shahien Nasiripour of the Huffington Post on the Warren appointment:

Financial Reform Coalition Endorses Elizabeth Warren To Head New Consumer Agency

~~~

Here’s Simon Johnson, Baseline Scenario and ex-Chief Economist of the IMF, on Tim Geithner:

Tim Geithner’s Ninth Political Life

~~~

And here’s the Washington Post on Geithner running the Consumer Financial Protection Bureau!

Timothy Geithner’s realm grows with passage of financial regulatory reform

~~~

And her are just a few past articles on Elizabeth Warren from Mandelman Matters:

Elizabeth Warren on the Foreclosure Crisis

TARP Chief Elizabeth Warren: “It’s the Bank Lobbyists vs. American Families”

The Most Damaging Propaganda Campaign in History. And its Aimed at You and Me

Elizabeth Warren’s Appointment In Jeopardy-We Have to Act Now

Bringing Up the Rear: Senator Christopher J. Dodd

Bringing Up the Rear: Treasury Secretary Tim “Transparency” Geithner & his Band of Banking Sadists

Well, Would You Look at That: Elizabeth Warren Might Be Replaced by a Bank Lobbyist

And here’s an oldie, but a goodie… if you don’t remember it, perhaps it’s time to read it again…

Attitudes on Wall Street: Dear God, Give Me Strength

~~~

Hey… why not take a minute and SUBSCRIBE to Mandelman Matters so you’ll get it delivered to your email daily? Don’t worry, you don’t have to read it, if you don’t want to. But you’ll feel better when you do!

Dec

Two Years Waiting for the New York Times to Write About Lawyers & Loan Modifications, and they Still GET IT WRONG.

By Mandelman | HAMP, Housing & Economic Research, Weidner

18141Leave a Comment2010-12-28+18%3A04%3A07Mandelman

When I first read David Streitfeld’s article headline: “Homes at Risk, and No Help From Lawyers,” which ran on December 20^th, in The New York Times

I thought…

Wow, well it’s about time… maybe someone’s finally gotten it.

Then I read the article and now I’m only filled with a sense of profound disappointment, resignation even. Never have I seen anything so inadequately understood by so many for so long. Never have I seen such an absolute failure on the part of my government to address the needs of so many millions Americans.

It’s inexcusable, really. Two years and 381 articles ago I started writing about issues related to loan modifications and the foreclosure crisis, two years ago Christmas Eve, as a matter of fact. What a way to celebrate such a milestone, to find out that whatever I’ve tried to do, few listened or learned a damn thing. And the pain that ongoing ignorance has caused is immeasurable. What a tragedy.

David Streitfeld’s article opens by saying:

“In California, where foreclosures are more abundant than in any other state, homeowners trying to win a loan modification have always had a tough time.

Now they face yet another obstacle: hiring a lawyer.”

The Times’ story then went on to recount the following tale:

“Sharon Bell, a retiree who lives in Laguna Niguel, southeast of Los Angeles, needs a modification to keep her home. She says she is scared of her bank and its plentiful resources, so much so that she cannot even open its certified letters inquiring where her mortgage payments may be. Yet the half-dozen lawyers she has called have refused to represent her.”

“They said they couldn’t help,” said Ms. Bell, 63. “But I’ve got to find help, because I’m dying every day.”

Then Mr. Streitfeld provides a misguided explanation for this problem, as faced by Ms. Bell, saying:

“Lawyers throughout California say they have no choice but to reject clients like Ms. Bell because of a new state law that sharply restricts how they can be paid. Under the measure, passed overwhelmingly by the State Legislature and backed by the state bar association, lawyers who work on loan modifications cannot receive any money until the work is complete. The bar association says that under the law, clients cannot put retainers in trust accounts.”

Okay, this is where Mr. Streitfeld’s article confuses the facts related to California’s “new” law, and therefore proceeds to misstate just about everything he needs to make his key point. I understand how it happened, however, as it’s an easy mistake to make, thanks to the California State Bar’s ongoing refusal to make clear what California’s “new” law prohibits and what it allows.

The “new” California law that Mr. Streitfeld references is known as Senate Bill 94 (“SB 94″) and it was passed by the state legislature in 2009, and signed into law by Governor Schwarzenegger on October 12, 2009. Sen. Ron S. Calderon, Chairman of the Senate Committee on Banking Finance & Insurance, sponsored the bill.

Let’s get this subject straightened out once and for all:

SB 94 DOES NOT REQUIRE lawyers who offer to represent homeowners seeking loan modifications to wait until their clients’ loans are modified before being paid. IT DOESN’T SAY THAT.

Allow me to explain in the most direct way possible. To begin with, California SB 94 impacts two groups: Real Estate Licensees and Attorneys.

As the new law pertains to attorneys, SB 94 created one new section of the Business & Professions Code, and two new sections of the California Civil Code, as follows:

B&P 6106.3 – NEW… This is just the enabling language that states that the State Bar can discipline lawyers for violations of the new law. It doesn’t establish or restrict anything; it is only language that enables some sort of enforcement should the law be violated by an attorney.

Civil Code 2944.6 - NEW… This section states that attorneys must provide a new NOTICE to their clients that they do not have to pay anyone to help them get their loan modified, they may attempt it on their own by contacting their servicer directly, or they may contact a HUD counselor for assistance that’s free of charge.

Civil Code 2944.7 – NEW… This is the language that contains the operative phrase, which states that an attorney cannot: Claim, demand, charge, collect, or receive any compensation until after the person has fully performed each and every service the person contracted to perform or represented that he or she would perform.

As SB 94 pertains to real estate licensees, there are two sections of the Business & Professions Code affected, one is new, the other has been amended.

B&P 10085.6 - NEW… This is a duplicate of the language that also applies to attorneys above that contains the operative phrase: as a real estate licensee, you cannot: Claim, demand, charge, collect, or receive any compensation until after the person has fully performed each and every service the person contracted to perform or represented that he or she would perform.

B&P 10026 - AMENDED… This language modifies the definition of advance fee for real estate licensees, prohibiting said licensees from breaking up the services related to a loan modification.

It is important to note that these sections are in Division 4 of the Business and Professions Code, which applies only to real estate licensees and not to attorneys. Bus. & Prof. Code Section 100116 defines “licensee” as “a person, whether broker or salesman, licensed under any of the provisions of this part.”

Do you see where the confusion is coming from? B&P 10026 has been amended to prohibit real estate licensees from breaking up the services related to a loan modification into component parts. However, there is no corresponding language that applies to attorneys, and therefore attorneys are permitted to break up the services related to a loan modification into component parts.

That means that lawyers helping homeowners obtain loan modifications, can contract to perform a specified set of services related to a loan modification, and be paid for those services once they have been completed. Nowhere in SB 94 does it say that a lawyer must obtain a loan modification for his or her client before being paid for services by that client.

Here is the text of the California Civil Code created by SB 94:

2944.7. (a) Notwithstanding any other provision of law, it shall be unlawful for any person who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower, to do any of the following:

(1) Claim, demand, charge, collect, or receive any compensation until after the person has fully performed each and every service the person contracted to perform or represented that he or she would perform.

And here’s the language, related to charging homeowners fees for helping them obtain a loan modification, that applies to those licensed by the state’s Department of Real Estate:

SEC. 5. Section 10085.6 is added to the Business and Professions Code, to read:

10085.6. (a) Notwithstanding any other provision of law, it shall be unlawful for any licensee who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower, to do any of the following:

(1) Claim, demand, charge, collect, or receive any compensation until after the licensee has fully performed each and every service the licensee contracted to perform or represented that he, she, or it would perform.

And here is the language amending B&P Code 10026:

10026. The term “advance fee” as used in this part is a fee, regardless of the form, claimed, demanded, charged, received, or collected by a licensee from a principal before fully completing each and every service the licensee contracted to perform, or represented would be performed. Neither an advance fee nor the services to be performed shall be separated or divided into components for the purpose of avoiding the application of this section.

Again, this means that a person licensed by the state’s Department of Real Estate who enters into an agreement to assist a homeowner in obtaining a loan modification cannot be paid until the homeowner receives a modification, because the services related to a loan modification cannot be divided into component parts for the purposes of billing for those services.

But an attorney, on the other hand, can contract for some limited set of services related to a loan modification, complete those services, be paid for those services, and then move on to other services as specified by separate contract.

Here’s a link to the final text of California’s SB 94, signed into law by Governor Schwarzenegger on October 12, 2009.

SB 94 vs. AB 764

Another way you can tell that SB 94 doesn’t require lawyers to wait until they obtain a loan modification for their client before being paid for any services, is by looking at the other bill that was passed by the California State Legislature in 2009, at the same time SB 94 was passed, and subsequently signed into law by the governor.

The other bill was AB 764, and like SB 94, it was also the product of a legislative committee on banking and finance, so no surprises there.

Assembly Bill 764, which was proposed by Assembly Committee on Banking and Finance Chair, Pedro Nava (D-Santa Barbara), did state that neither attorneys nor real estate licensees could be paid until a loan modification has been successfully obtained from the homeowner’s lender or servicer.

Senator Ron S. Calderon (D-Montebello), who chairs the Senate Banking Committee and whose committee was responsible for the much more rational SB 94, published an article in the Sacramento Bee in the early fall of 2009, in which he explained why he didn’t choose to take the approach contained in AB 764. In that article he said:

“I considered the approach in AB 764 when drafting SB 94, but ultimately rejected it for three reasons.

First, preventing fee-for-service providers from charging their clients, unless they obtain a modification, will almost certainly increase the fees that fee-for-service providers charge their clients. If fee-for-service providers can only charge certain clients, they will need to increase the fees they charge those clients, to make up for their inability to charge other clients.

Second, the approach in AB 764 is likely to cause fee-for-service providers to cherry-pick their clients. If a provider knows he or she can only get paid if a modification is offered to a borrower, that provider is unlikely to take on the difficult cases, leaving borrowers most in need of help with fewer options for assistance.

Third, AB 764 is likely to force many fee-for-service providers out of business, which is likely to reduce the options for troubled borrowers even further.”

Now, logic should at this point dictate:

There were two bills, and one of them, AB 764, did in fact prohibit both lawyers and real estate licensees from being paid prior to a loan modification being obtained.

The author of the other one, SB 94, would not state publicly that he chose not to go with the approach in AB 764, for the reasons stated, if his bill were accomplishing the same objective in the same way.

Is that making any sense for anyone? Lord, I do hope so, but if not… perhaps it would be helpful to read the governor’s letter to the California State Assembly explaining why he chose to veto AB 764 and sign SB 94 into law. The governor’s message to the State Assembly follows:

To the Members of the California State Assembly:

I am returning Assembly Bill 764 without my signature.

Although I support the prohibition of individuals charging advance fees for mortgage loan modifications, I do not agree with the provision of this bill that will only allow fees to be collected if a modification is successful.

This could adversely affect legitimate businesses that provide loan modification services. As such, I am signing SB 94 that accomplishes this prohibition against advance fees without unnecessarily harming legitimate companies.

For these reasons, I am unable to sign this bill.

Sincerely,

Arnold Schwarzenegger

Can you hear me now? Is that doing it for you? The facts about California attorneys who offer to assist homeowners with loan modifications as presented in the New York Times story are just plain WRONG.

SB 94 does not prohibit an attorney licensed to practice law in California from being paid in conjunction with a loan modification, until a loan modification has been obtained. It only says that attorneys must complete the services they’ve contracted to complete before being paid for those services.

Under the new law, it’s only real estate licensees that are not permitted to charge a homeowner a fee until a loan modification is obtained, because the new law does not allow real estate licensees to divide said services into component parts as related to a loan modification.

David Cameron Carr, a State Bar Defense and Ethics attorney practicing in San Diego, California agrees wholeheartedly with the view of SB 94 as I’ve presented it here, as do numerous other Bar Defense lawyers throughout the state. As to the legislative intent of SB 94, and the validity of lawyers unbundling services, David offers the following:

“The intent of the Legislature and the Governor was not to put legitimate firms out of business, rather it was to ensure that homeowners are only changed for work that has legitimately been done in service of the clients’ goal to modify their mortgage.

Attorneys cannot guarantee the outcome of legal representation and the banks have not made it easy for individuals seeking to modify their loan obligations, whether they are represented by attorneys or not. Staking all of the attorney’s fees on the successful loan modifications will lead to no attorneys willing to even make the effort. This is an access to justice issue clearly recognized by the Governor when he vetoed AB 764.

Allowing consumers to pay for legal services in discrete ‘unbundled’ increments serves the interests of clients and attorneys. Chief Justice Ronald George recently co authored an op-ed article in the New York Times praising unbundled practice as allowing ‘lawyers – especially sole practitioners – to service people who might otherwise have never sought legal assistance.’”

And that, as they say, is all I have your honor. The defense rests.

The New York Times article, however, doesn’t. It goes on to say:

Two years ago, the state bar association had seven complaints of misconduct in loan modifications. By March 2009, there were more than 100 complaints, and a task force was formed to deal with the problem. Soon, there were thousands of complaints.

It was a public relations disaster. The president of the bar association (Howard B. Miller) wrote in a column last year that “hundreds, and perhaps thousands, of California lawyers” were victimizing people “at the most vulnerable point in their lives.”

Now, I couldn’t even count all of the articles I’ve written about these sort of statements at the time (here’s one: Did Attorneys “Turn Bad” in 2009? What… Was there something in the water?), but the bottom line is, that for all the “witch hunting” that went on back then, with lawyers playing the role of the “witches,” the California State Bar, in a state with 206,000 licensed, practicing attorneys, has posted the following results as of September of 2010, according to the California Bar Journal, which is the “Official Publication of the State Bar of California.”

“The bar’s Office of Chief Trial Counsel has obtained the resignations of 12 attorneys involved in loan modification misconduct since creation of the task force in April 2009. Six loan modification trials are pending…”

So, this April it will have been two years since the California State Bar established its Task Force to root out the “hundreds, or perhaps thousands of California lawyers” who were said to be victimizing people “at the most vulnerable point in their lives.” And yet to-date, the California State Bar has obtained the resignations of 12 attorneys involved in loan modification misconduct. Oh yeah, and there are six more trials pending.

I’m certainly not saying there weren’t more illegal operators, scammers, and/or lawyers operating outside the rules, and in fact the California Bar Journal also states that there are 1800 active investigations underway, but with a dozen resignations and six trials pending… after almost two years… the idea that there were ever thousands of California attorneys victimizing people “at the most vulnerable point in their lives,” well… it was just preposterous then and it’s even more so today.

Today, it should be clear that the media and the public believed that sort of obvious fear-based hyperbole back then because back in mid-2009, pretty much everyone believed two things that we now know were far from true:

That President Obama’s plan to save homes from foreclosure would work as advertised, or at least close to as advertised. The president had told the nation that “loan modifications were free,” and that you could “call a HUD counselor,” or “contact your bank directly.” And with the government and the banks reinforcing the message, why would anyone think you’d need a lawyer?
That the banks would deal with homeowners applying for a loan modification in a reasonable way, and follow the rules of the president’s plan to some reasonable degree.

With these two thoughts firmly implanted in the minds of the media and the masses, and with no personal experience to tell them otherwise, it made sense that when someone had paid a company to help them get their loan modified, and their loan did not get modified, it had to be the company’s or the lawyer’s fault… it had to be that the lawyer or company was scamming the homeowner, taking their money and delivering nothing in return.

By the end of 2009, however, it became clear that the president’s program was not working as advertised, and that the banks were not following the program’s rules, or oftentimes any rules, for that matter, and as a result, more and more people started to think that perhaps one should hire a lawyer when applying for a loan modification.

And certainly today, with consumer attorney superstars like Max Gardner and others, making news of banks using robo-signers to create fraudulent paperwork leading to improper foreclosures, along with stories of banks misleading homeowners and even attempting to foreclose on homes they don’t own, it should be abundantly clear that a homeowner should at least consider hiring an attorney when at risk of foreclosure.

But… it’s about to be 2011… and frankly there’s no excuse for this sort of misconception to still be going around… and there’s certainly no reason for any lawyers in California to be afraid to represent a homeowner who is seeking a loan modification based on the requirements of SB 94.

Of course, none of this is to say that hiring a lawyer to represent you when seeking a loan modification offers any sort of guarantee that you’ll get your loan modified, but then you never hire a lawyer when the outcome is certain. You only hire a lawyer when the outcome is uncertain. If the outcome were certain, why would you pay an attorney?

In this case, homeowners that choose to hire a lawyer to help them get their loans modified do so because they believe that their attorney has more experience in the area and will therefore have a better chance at getting the loan modified, and I think this is unquestionably true. In my somewhat vast experience talking with homeowners at risk of foreclosure, and with attorneys that specialize in helping homeowners obtain loan modifications, I have absolutely no question in my mind that many homeowners need professional help getting their loans modified.

For one thing, homeowners at risk of foreclosure are scared and don’t relish the idea of talking with their servicer, who is often rude and unaccommodating. For another, many feel ashamed that they are at risk of losing their homes, and that makes dealing with a mortgage servicer or bank that much more difficult. And lastly, most homeowners don’t know their rights as related to foreclosure, or the rules and guidelines under the HAMP program, and they tend to panic or act irrationally as a result.

From the story in the New York Times:

Lenders were supportive of the bill, Senator Calderon said.

The law is working well, Senator Calderon said. “You do not need a lawyer,” he said.

Look, obviously Senator Calderon has never had a particularly thorough understanding of what’s going on in real life as related to loan modifications and the foreclosure crisis. But we can hardly blame him for that… he’s the California Senate’s Banking and Finance Committee Chair, so what would you expect?

So, allow me to be blunt, so as to avoid any confusion as to the facts of the matter:

The law is not working well… in fact it’s not working at all. It has accomplished almost nothing in regards to protecting consumers from scammers. But then… it never had a chance of working well, or at all, so I suppose in that sense, it is living up to its potential.

And as to Senator Calderon’s claim that you do not need a lawyer to obtain a loan modification, he’s quite right. You don’t NEED a lawyer… it’s not a requirement. But for many people, it sure as heck can help… a lot. Having interviewed over a thousand homeowners and hundreds of attorneys that represent homeowners at risk of foreclosure, I can tell you this… I wouldn’t try it on my own, but again… that’s me. Everyone has to make their own decision as to whether they want or need an attorney. My father prepares his own tax returns, so go figure.

If the State of California wants to eliminate the scammers who prey on distressed homeowners with promises of loan modifications, the answer is not to make it illegal to charge a fee. That only eliminates the legal operators… the scammers don’t care about laws that prohibit them from being paid up front… that’s why they’re called scammers… because they break the laws.

And as I predicted at the time, since SB 94 took effect last year, the scammers shifted into offering products and services not covered by SB 94… oooh, that was a hard one to see coming, wasn’t it? I’m a genius, I realize. They started selling “forensic loan audits,” that often cost thousands of dollars but were about as valuable as the paper they were printed upon.

And then, more recently, business entities calling themselves “Doc Prep” companies arrived on the scene, offering to prepare the documents needed to apply for a loan modification on behalf of a homeowner for several thousand dollars up front.

The point has been rendered moot by the FTC’s recent announcement of its new MARS rule, which is a federal rule that fully takes effect on Jan 30, 2011. MARS governs how “Mortgage Assistance Relief Services” providers may operate and be paid for their services, but for the record, I contacted Tom Pool at the California Department of Real Estate, to find out if these doc Prep companies were operating in violation of SB 94, and his view was they that they are in fact operating in violation of the new law.

There are also companies out there who lure homeowners with all sorts of programs that promise relief from foreclosure. And some are now soliciting homeowners to be participants in various lawsuits for a fee. My only advice is to be careful out there… because SB 94 isn’t going to protect you from smooth talking salespeople looking to make a commission by selling you a pig in a poke. In case it’s helpful, here’s a link to my recent article: How to Tell Legitimate Loan Modification Firm from an Illegal Operation or Scam… The FTC’s New Bright Line MARS Rule.

The point is that if the State of California wants to get rid of the scammers, the answer is to let homeowners know where they can go to get legitimate assistance, and “call your bank directly,” or “contact a HUD counselor,” is neither helpful, nor is it credible.

The State Bar has hidden from SB 94 for over a year now, refusing to come out publicly with any sort of clarification on how they interpret the new law. All they’ve said is that attorneys cannot accept up front funds from a homeowner seeking a loan modification into their attorney trust account… which is absurd, especially when you consider that the new FTC MARS rule REQUIRES lawyers offering to help homeowners obtain loan modifications to put advance fee retainers into their attorney trust accounts. (Although the FTC’s MARS rule is subject to state law, so lawyers representing homeowners seeking loan modifications will continue to practice as they have been under SB 94.)

I’m sorry to have to say this, but by hiding from the new law, the State Bar has made it more difficult for homeowners to hire an attorney, as shown in the New York Times story, and as a result, made it more likely for homeowners to end up getting scammed.

If you want to get rid of scammers, make legitimate loan modification legal assistance available at every Starbucks… no more scammers. It’s not different than getting rid of bootleggers, which you do by putting a liquor store on every corner in town… no more bootlegger. You certainly aren’t going to get rid of scammers by making it harder to find a legitimate attorney, because when people are losing their home, and they can’t find help… they panic. And panic is the fastest path to getting scammed there is.

The truth is, there are scammers around us every single day of our lives. But we don’t get scammed every day, because we’re not in a panic. The first day we are, is the day we’ll find ourselves having been parted with our hard-earned money by some con artist.

So, when Mr. Streitfeld’s New York Times article opens by saying:

“In California, where foreclosures are more abundant than in any other state, homeowners trying to win a loan modification have always had a tough time.

I can’t argue with that, assuming that he’s referring to the banks’ and mortgage servicers’ behavior as related to loan modifications.

I assume that he’s referring to the banks and mortgage servicers disregarding every rule or guideline set forth in the president’s Home Affordable Modification Program, HAMP, along with most of the state laws related to the foreclosure process, and are now being investigated by all 50 state attorneys general for loan modification fraud.

Is that what you meant by “had a tough time,” Mr. Streitfeld?

I could try to list all of the abuses committed by the bankers and mortgage servicers, but I’m not sure one person could do it comprehensively in less than a year. You’d need to put an entire team on it, and they’d likely still miss a few.

At this point, the four largest players in the mortgage market, GMAC, JPMorgan Chase, Wells Fargo Bank, and of course, Bank of America all stand accused of bringing fraud on the courts by submitting their robo-signed affidavits, their forged signatures, and numerous others violations of the laws governing the transfer of property rights in this country.

Most recently, in New Jersey where a judge is presiding over the KEMP v Countrywide suit, Bank of America, in an effort to establish that they should be allowed to foreclose on the Kemp’s home, has tried three times to do so with fraudulent documents, the last time so flagrantly, that BofA’s lawyer had to ask the court to allow the bank to withdraw the evidence they’d submitted.

In point of fact, the banks and servicers are being sued from parties on all sides of the situation… by homeowners, both individually and as members of various class action lawsuits, by investors who claim they were defrauded by a failure to comply with underwriting requirements of the Pooling and Servicing Agreements that govern their investments in the mortgage-backed securities that allegedly hold the mortgages in question. And by various state governments, including Arizona and Nevada, who have each filed suits alleging loan modification fraud against Bank of America as of a few weeks ago.

And on several well-documented occasions, the banks have even foreclosed or attempted to anyway, on homes on which they never even held a mortgage.

So, yes… I think it’s safe to say that homeowners in California and elsewhere have had a “tough time,” when it comes to obtaining loan modifications. And I would think that this sort of “tough time” would lead just about anyone over the age of nine to conclude that homeowners should at least consult with an attorney before attempting to get their loans modified.

In fact, there are only two groups opposed to this idea: the bankers and the politicians clearly in the pocket of the banks. Anyone else opposed to the idea is just a derivative of one of these two groups, and neither is looking out for the best interests of the homeowners when forming their views.

Look, I understand why bankers wouldn’t want homeowners to hire attorneys when at risk of foreclosure; it would make things much, much easier for bankers if homeowners showed up alone and unarmed, after all.

Without an attorney, it’s Bank of America against Mr. & Mrs. Jones, who are emotional, unknowledgeable and afraid… and BofA can mow over them with their foreclosure mill lawyers without any resistance to speak of in their way. Without lawyers, no one would have ever discovered the fraudulent documents being used by the bankers to foreclose on properties, for example, so I absolutely understand why the bankers would be attempting to make it difficult for a homeowner to hire a lawyer to help them prevent foreclosure.

I also find such an impetus despicable and wholly devoid of moral character. If the banks in this country are going to oppose basic fairness, then they should be nationalized and turned into the equivalent of public utilities… and in my opinion they quite likely will one day if they continue on their current path.

Mandelman out.

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You Can’t Eat Gold (Or Bullets)

By Matthew D. Weidner, Esq. | Weidner

17076Leave a Comment2010-12-12+18%3A30%3A09Matthew+D.+Weidner%2C+Esq.

Every thinking person in America is at least considering the possibility of widespread collapse of our society either in the immediate or not too distant future. Whether you believe we are headed to a catastrophic collapse or you think there will be isolated breakdowns in the social, legal and governing structures of this country, it is a useful practical and intellectual exercise to consider how you would protect, provide for and defend your family if your government were not able to do so for short or extended periods of time.

Are You Better off Today?

Look around you. Do you believe our country is headed in the right direction? Do you see economic, social or fiscal policies coming from Washington, DC, your state capital or the financial centers that you believe are leading to greater stability and prosperity in this country? I see only policies that are leading us straight into economic and social Armageddon. I could go all the way back to 1990 and the failure of the “Buy American” movement. For two decades our leaders have worked feverishly to transfer our jobs, our technology, our national treasure to other countries. Surprise, two decades into this failed economic policy and we are a failing country. To me it’s a simple equation. You can’t make mortgage payments in America if you don’t make anything else in America. We made steel and cars and furniture and textiles and food in America and increasingly we make none of those things.

Two Lost Decades

The “prosperity” of the last decade was fiction. We didn’t earn that prosperity by producing value added goods and services, we borrowed that prosperity with credit and mortgages and lines of credit. The Wall Street Wizards didn’t create any new wealth, they pilfered and siphoned and sucked away the wealth and equity that the World War II generation worked their entire lives for. Now think about the billion dollar profits and the million dollar profits of Wall Street over the last several decades and especially just this year. Record profits for Wall Street while middle America suffers like never before. Where did the Wizards of Wall Street get all those profits they’re shoving into their pockets and sending away to offshore accounts? They stole it from the American people. They looted your 401k’s. They robbed your retirement accounts. Do you think the SEC, the Fed, the Treasury has done anything to stop it? Do a little post-mortem examination of the Bernie Madoff scam. Can’t you see just how blatant, apparent and transparent his Ponzi scheme was? Madoff was a simpleton, a charlatan, a novice and he pulled his scam off for decades with no attention at all from the people we foolishly trusted to protect us. Now if he could do it on such a grand level, just what do you think the organized cabals in Wall Street, Zurich, Dubai, Shanghai and Munich have been able to do? Sorry dad, sorry mom your 401k statement is fiction.

Are There Any Hopeful Signs?

In advance of last month’s G20 Summit, our government announced a new policy called QE2 or a second round of quantative easing. This one is the second one because it’s the second time in recent history that our government has tried to spend our way out of the brink of Armageddon by turning on the printing presses. QE2 was absurd and seen as chaotic and desperate. Our allies howled in protest and we sort of backed off it a bit. The most recent example of economic absurdity and the failure of our government to respond to this crisis came just last week. We can neither afford extended unemployment benefits or tax cuts, but we got both…..in my mind that just shows how much trouble we’re in. Listen carefully to Wall Street, to your state capital and to Washington DC. Do you hear any hints or whispers or suggestions of ideas that might start to turn this economy around? I don’t hear a single word or policy or proposal that I think is sending us anywhere in the right direction. And if there are no whispers which suggest we’re heading in the right direction than that can only mean we’re heading in the wrong direction….and that’s scary.

We Need A Plan And We Need One Right Now.

Even if you’ve never even thought of owing a gun and even if you have no idea what gun powder smells like, do yourself and your family a favor and go to a gun fair or walk into a gun store. Even if you find guns repugnant, just do it for the sake of your own education. I’m an avid gun owner, member of the NRA and passionate supporter of our military and law enforcement and even I’m just flabbergasted by what I see at gun shows and gun shops. Your neighbors are arming themselves in unimaginable degrees. A chicken in every pot? Try a militia in every house. The problem is just who are they going to be shooting at and who are they (we) arming themselves against? I’ve heard national security estimates that in a panic situation our food delivery system can supply only 48 hours worth of food. Remember Katrina? Just how many days did it take that isolated, small scale crisis to spin so wildly out of control? And now for all you people hoarding gold and silver. Just what do you think you’re gonna do with your shiny little trinkets when the mobs start mobbing? When people start panicking and I-75 locks down because people can’t go anywhere, do you think you’re going to trade your one Krugerand for safe passage or a loaf of bread? Sorry Charlie, the mob’s gonna shoot you, take all your shiny little objects and move on to the next big Suburban loaded down with provisions and precious metals. And no offense to Glenn Beck and his overpriced “survival food”, what exactly is your plan for when the powdered milk runs out?

The Meek Shall Inherit The Earth

All around this country there are pockets of good, hard working salt of the earth people who are living in some ways the way people did a hundred years ago. I’ve been reaching out and meeting with these folks and I’m enchanted. Part of this fascination started with a glass of grapefuit wine and some eggs from a family in North Florida. Honest to God, the grapefruit wine tasted as good as the $200 bottle of La Dolce Far Niete I had years ago and there was something about seeing the happy little chickens pecking around their little pen that made me happy. Just this week I visited homesteaders who are growing the most amazing vegetables I’ve ever tasted and making sausage and jerky out of everything that moves. So here’s the deal. You can keep your gold, I’m going to invest in the knowledge and the values and the ethics of the hardworking, self-sustaining American homesteaders. Have you heard of the “Locavore” movement? Well think of this as an extension of this. We need to reach out to our farmers and agribusiness communities. The ornamental and decorative farmers have been decimated in this economy, but they can quickly return to food crops. These families are suffering too, but the big shot city folks can help by reaching out in creative and formal ways to help promote and develop their food production and independent-living activities by investing in their efforts now. I have a standing offer to agribusiness homesteaders right now and I want to encourage all you foreclosure defense attorneys out there to do the same….if you’re producing food or have the ability to produce food and you’re supporting a family in my immediate area, I will consider representing you in foreclosure free of charge so that you can keep putting food on the table. If you’re an old school Florida cracker who still knows how to live off the land and still believes that your homestead is sacred ground, but that sacred ground is threatened by foreclosure from a foreign trust or obscure bank, reach out to me….please give me the honor of helping you keep your sacred ground.

For everyone else remember… you can’t eat gold, but if you’re connected you won’t have to try!

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Nov

The New American “Keys-ian” Movement- AMERICANS TELL THE BANKS “GO TO HELL- WE’RE DONE”

By Matthew D. Weidner, Esq. | Weidner

15707Leave a Comment2010-11-11+14%3A49%3A41Matthew+D.+Weidner%2C+Esq.

Prepare to hear much more about this in months to come, but this post is the start of a new movement that accelerates the take back of our country and celebrates the power of the American people.

For those of you who are still making your mortgage payments…..I want you to add one other thing with each new payment…..SEND IN A SET OF KEYS. Go ahead, find an old set of keys lying around and send them in…..at this point in time it’s just symbolic.

BUT THINK ABOUT THE POWER OF THE AMERICAN PEOPLE IF ALL AMERICAN’S STOOD UP, SAID WE’VE HAD IT, TAKE THE KEYS AND JUST COME AND TRY AND TAKE BACK THIS HOME.

THE POWER OF THE BANKS IS A FICTION, A FRAUD, A FARCE THAT WE ARE PERPETUATING AND IF WE CONTINUE, WE ARE COMPLICIT IN THEIR LIES, THE FRAUD, THE CRIMES.

SCREW QE-2, FORGET ABOUT QUANTITATIVE EASING

SUPPORT THE NEW AMERICAN KEYSIAN ECONOMIC MOVEMENT!

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Compared to what?

Going up?

Mandelman Matters State Specific Content: Utah Foreclosure Resources and Articles

“May a party be a lawful ‘beneficiary’ under Washington’s Deed of Trust Act if it never held the promissory note secured by the Deed of Trust?”

~~~

Good Morning, New Jersey…

The state’s high court ruled that because the foreclosure notice that the servicer sent to the Guillaumes did not include the name and address of the lender in addition to that of the servicer, it did fail to comply with New Jersey’s Fair Foreclosure Act.

Additionally, the high court also reversed a separate appellate decision, known as “Laks.”

Okay, I hate to say this but… does any of this really matter to homeowners? Aren’t both positions merely a delay, and not much of a delay at that?

Why are we giving our government a pass?

EPILOGUE…

Let’s UNITE homeowners around fairness, instead of DIVIDING them over delays…

This is the real deal… you could call it “reality podcasting.” Turn up your speakers, sit back, relax, and listen as three justices from the 9th Circuit Court of Appeals struggle to balance the rule of law against the dreaded “free house.” I hope you enjoy it as much as I did…

CLICK BELOW:

Shellie Wallace, Attorney at Law

Wilson & Associates PLLC

And let us not forget the Grand Poobah at good ole’ Bank of America:

Brian Moynihan, President, CEO & Chairman

Bank of America

Email: brian.t.moynihan@bankofamerica.com

~~~

~~~

~~~

Plenty more where this came from…

Oh yeah, and Geithner opposes her big time…

Isn’t that alone enough reason to give her your support?

When I first read David Streitfeld’s article headline: “Homes at Risk, and No Help From Lawyers,” which ran on December 20th, in The New York Times

I thought…

Wow, well it’s about time… maybe someone’s finally gotten it.

SB 94 vs. AB 764

The New York Times article, however, doesn’t. It goes on to say:

From the story in the New York Times:

So, when Mr. Streitfeld’s New York Times article opens by saying:

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When I first read David Streitfeld’s article headline: “Homes at Risk, and No Help From Lawyers,” which ran on December 20^th, in The New York Times