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Tag: MERS (Page 1 of 2)

When Banks Break the Law, Families Suffer

Half million dollar house in Salinas, Californ...

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We can see from the full article excerpted below that  the banks’ evasion of State recording statutes and poor internal bookkeeping has led many families to disaster.

I have read some bloggers who talk about deadbeat buyers but where are they now when it is obvious that widespread fraud and incompetence were common in the industry for years?

The decision of a family to buy a home is almost always the single most important financial decision of their lives.

Beginning in 2000, that investment became a chip in a Wall Street game of financial speculation. But the industry found that those chips were heavily regulated by law. Not like modern regulations but regulations older than this nation itself. The rules were that property ownership had to carefully recorded, geographically correct and a chain of ownership clearly established. Owning property was considered a critical part in an individual’s life and was protected by the law from injustice.

But this inhibited trading, so the industry created their own system of property transfer (MERS) and we know from the many lawsuits in sloppy or virtually non-existent records keeping to accelerate the process. Today, those injustices have come back to haunt middle class homeowners.

Please read the attached article and get a fell for what economic injustice feels like when the affliction has human face.

James Pilant

Foreclosure From Old Mortgages ‘Most Egregious Manifestation’ Of Broken Housing Market

Diane Thompson, an attorney with the National Consumer Law Center, says she has defended hundreds of foreclosure cases, and in nearly all of them, the homeowner was not in default. “The record-keeping on the part of the mortgage servicers is not to be trusted.”
The problems grew from a lot of sloppy recordkeeping that began during the housing boom, when Wall Street built a quick-and-dirty back-office operation to process mortgages quickly so lenders could sell as many loans as possible. As the loans were later sold to investors, and then resold around the world, the back office system sidestepped crucial legal procedures.
Now it’s becoming clear just how dysfunctional and, according to several state attorneys general, how fraudulent the whole system was.
Depositions from “affidavit slaves” depict a surreal, assembly-line world in which the banks and their partner firms hired hair stylists, fast-food kids and Wal-Mart floor workers, paying them $10 a day, to pose as bank vice presidents, assistant secretaries and corporate attorneys.

Foreclosure From Old Mortgages ‘Most Egregious Manifestation’ Of Broken Housing Market

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Looking Back at One Media Story about the Foreclosure Crisis

You wake up in the morning hoping and praying that some justice will be meted out to the giant foreclosure industry for the crimes they have committed. In that hope is mixed the great sorrow for all the people who have suffered the loss of their homes in this foreclosure crisis.

Now, let’s go back a little in time and see how the crisis was treated by the public’s stalwart defenders in the press. Obviously, once the stories of owned foreclosed, shabby procedures and busted paperwork trail, the press was eager to fight for the public.

Not exactly, more of a yawn and a condemnation of the homeowners who owed too much.

In mid 2010, the beltway press knew it was all overblown. It has become a bit overblown in some tellings.“ You see, “there’s little evidence that this has resulted in improper foreclosures..” You see, “Anectdotally, these things do seem to have happened…” At that time we had only heard the occasional, once in a while, sort of, story about some poor schmuck losing his property.

This is from the Atlantic Monthly, an article called – The Real Scandal of the Foreclosure Mess – October 8th, 2010 – by Megan McCardle –

The story on the foreclosure mess has become a bit overblown in some tellings. It’s clear that banks have been taking some shortcuts in preparing their foreclosure documents. The banks are obviously overwhelmed with the volume of foreclosures, and the (apparently) many instances in which sloppy securitization has resulted in lost paper trails, obscuring who, exactly has a right to foreclose. Rather than seeking legislative or judicial clarification, they’ve resorted to dubious practices that seem (to my non-legally-trained eye) illegal.

That is bad. But as Arnold Kling points out, there’s little evidence that this has resulted in improper foreclosures: evicting people who’ve paid, or who never had a mortgage with your company. Anectdotally, these things do seem to have happened, but there’s no evidence that they’re frequent, or that they are connected to the procedural irregularities that we’re now discovering with foreclosure documents.

Arnold says that the real scandal is our antiquated title system:

The real scandal is that the process of recording property title is so antiquated, and there are so many interest groups that resist modernizing it. The MERS mortgage database shows what a modern system could look like. But all of the counties that charge fees for title recording, the title “insurance” companies that shake down home buyers to buy “protection” from getting sued to prove that they own their property–these interest groups want to keep the title recording system as expensive and unreliable as possible.

. . . and that it’s taking so long to get people out of homes they can’t afford.

These are my comments on the Atlantic web site –

What!? You don’t see much but “anectdotal” evidence? What were you going to see? No one knew to look until now. You can’t have statistical evidence until you know there is a problem and can look at the numbers.
Anecdotal evidence is the beginning of discovery. Sometimes it turns out that the stories lead nowhere. This time they scored big. And now, and only now, can we find out how big the problem is.
“Only anecdotal evidence” Oh, PLEASE!

And then, about five minutes later, when I got even more angry –

The saddest thing about this article is that in two years after this disaster, this legal catastrophe, when the facts and the numbers are available, no one is going to pull this article out of their Windows’ recycle bin, and wonder what in the hell possessed the author to write it.

According to the article, the “real” scandal of the mortgage crisis is 1) our antiquated title system and 2) “. . . and that it’s taking so long to get people out of homes they can’t afford.” Now, Ms. McArdle is all in agreement with Arnold Kling on the the title system being the real scandal but on the second statement (getting the people out of homes…) she disagrees. I give her full credit for disagreeing with the second statement and therefore my scorn for her writing is only for the first statement.

What?!, the antiquated title system is the real scandal? I cannot generate enough invective for this statement. The world is too short of obscenities for me to throw at it. Let’s just go to the next one.

“… and that it’s taking so long to get people out of homes they can’t afford.”

Let me tell you a story… About ten years ago, housing prices began to go up but strangely the ease of buying them multiplied. Banks began to demand less and less evidence of credit history and salary down to the point where they eventually just filled in the blanks. This lack of oversight was because the great financial institutions of this nation were packaging mortgages as securities and using them as chips in the great game of casino capitalism. It was a strange time, in which the Internet was utterly blanketed by ads calling upon you to refinance your credit card debts – mortgage your home or to refinance your home for a lower rate. By about 2005, that something was terribly wrong was becoming clear. But the the regulatory agencies, the Congress, the Presidency, the financial press or the “Fed” did nothing about it. The selling if anything became more frenzied. Banks hired celebrities to participate in sales meetings in the black communities. Phone banks and mailings to those who rented and those who owned their own homes or even to those who were about to finish paying their mortgages proliferated. The messages was always the same, re-mortgage for lower rates, re-mortgage to pay off debts and the best one, buying a home is cheaper than rent. Many of the ads were carefully aimed at first time home buyers counting on their lack of financial sophistication to smooth the process. In 2006, the boom was pretty much exhausted, but the great financial institutions nursed it along for the next year by trading securities based on mortgages to the foolish as good investments and to each other simply to keep the market going. And then it all fell down.

“… and that it’s taking so long to get people out of homes they can’t afford.”

Simple statement. Factually correct.

They signed the contract, didn’t they? They’re adults. They got in too deep. They have to pay the price.

That is what it looks like if you live in a skycastle. “Skycastles,” that’s where people live so high and so far above the common herd, that they and only they can see what’s real, where the air is clear and the thoughts razor sharp.

From there they watch the little people like bacteria on a petri dish and wonder why God made so many, unless their cold hard intellects have freed them from religious delusions.

I’m down here with the other inconsequential. I say that these people were victimized and deserve mercy. These people did what the government, the media, and the financial industry told them was the intelligent, the correct and the best decision. These people were generally misled, lied to directly and were often the victims of fraud.

But I don’t live in a skycastle.

James Pilant

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Obama Administration Continues to Protect Banks, Ignores Consumers

It seems that I can never get free of this subject. Obama never met  banker he didn’t like and whose interest he didn’t place ahead of everyone else. One of the things that average Americans resent is the lack of prosecution of these rogue banks. Just what did the banks do that makes me so angry? They lied directly in court claiming ownership of properties they did not own. The filed false affidavits lying about their ownership. They defrauded many customers by lying about the terms of the mortgage agreement. The lured investors into securities backed my mortgages that they knew would fail as investments and then bid against those investments with derivatives to make ever more money. To add one further insult, these heartless financial wizards foreclosed on serving veterans’ homes contrary to federal law.

Now get this. These arrogant people created their own system of ownership. Under the law of each State enshrined in American law, ownership of real property is proven by a careful record’s trail kept in most states in each county court house. To evade fees and speed the process, the mortgage machine created a computer system called MERS. They would make a single transaction using the county system then they traded the properties much like the homes in the monopoly board game. Instead of careful record keeping, we have a system where in many cases, no one knows who owns the property. In case you missed it, by using their own private system of property ownership, they never paid a dime of taxes on the transfers defrauding the states out of millions of dollars of taxes.

For more than 200 years, owning property has been the goal of Americans. To be a landowner was a mark of prestige, of achievement and security. But keeping property lines straight, land fraud and busted titles have bedeviled citizens. To curb these abuses laws were established to make as certain as possible land ownership, to protect the right to property. The right to own property is not sacred but it is as close to sacred as laws can make it.

These men, these arrogant men created their own separate legal system ignoring the laws of the government and the rights of citizens. They then used it to evade taxes and speculate like Riverboat gamblers playing with chips.

The law provides penalties so that justice may be served. Those who fail to obey the law are punished. Those are hardly radical thoughts. They are the basis of a system that treat both the small and the great equally. The administration is pushing an agreement which will free the mortgage banks from responsibility for their crimes.

What kind of nation do we live in where a petty shoplifter faces jail time and fines and bankers are freely given immunity without any assurance that I find credible that they will behave better in the future. I mean after engaging in a crime spree that makes organized crime look like a child stealing candy, they walk free. Doesn’t that give then the impression that they are above the law. It gives me that impression.

Can’t we have justice? What did I do? What did my fellow citizens do? Are we some of lesser creation that we must watch in awe and envy while those who evade over and over not just the law but evade their responsibilities of citizens to pay taxes and to act for the common good?

What kind of country are we becoming?

James Pilant

The Obama Administration’s ‘New’ Bank Fraud Deal: Still Unfair, Still Unjust, Still Unbalanced

The Obama White House continues to push for a settlement that would let bankers avoid being punished – or even investigated – for a wave of mortgage-related crimes that includes perjury, tax evasion, and several types of fraud.

Despite the President’s new-found populism – rhetorically, anyway – officials in his Administration continue to push an unfair deal designed to conceal the financial Crime of the Century.

The Financial Times reported on new details of the proposed settlement, whose stated purpose is to punish banks and reduce the amount of money owed by underwater homeowners. But it’s increasingly clear that the deal wouldn’t help homeowners very much and wouldn’t punish bankers at all.

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Coakley Steps up Probe into Foreclosure Fraud (via Marshfield Real Estate)

The mortgage foreclosure crisis continues to grow. We are not talking about just the number of foreclosures. We are discussing active serious wrong doing on the part of banks and foreclosure companies. The use of the MERS electronic system to determine property ownership outside the States’ legal rules is a particularly egregious situation. A number of financial institutions on their own decided to dispense with hundreds of years of property law and create a system that passed title electronically. They did this without legislative or court approval and then proceeded to use it on millions of properties. We should not allow banking institutions to create law on the spur of the moment for their own benefit.

There is plenty of evidence that properties were foreclosed on that banks did not own. I call for justice. I call for a return of these properties to their rightful owners.

James Pilant

Massachusetts Attorney General Martha Coakley is beefing up her investigation into foreclosure fraud, targeting a powerful lender-created company in Virginia that claims to be the official owner of tens of millions of mortgages nationwide. Yesterday, Coakley said she will ask county registers to provide information to see if Mortgage Electronic Registration Systems Inc., known as MERS, is violating Massachusetts laws related to property seizures. … Read More

via Marshfield Real Estate

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Cloud on title forever post foreclosure {but wait the Banks own the title companies} (via Timothymccandless’s Weblog)

Cloud on title forever post foreclosure {but wait the Banks own the title companies} (via Timothymccandless’s Weblog)

This is a (fairly outraged and rightfully so) discussion of MERS from the web site, Timothymccandless’s Weblog , the electronic system used by the foreclosure industry to prove ownership of homes. Depending on the state, it proves a little or a lot. It appears as time has gone by that the faults of the system have become more and more obvious.

Of course, many who lost their homes to companies using this system never really got a day in court since this weakness in the ownership status has only recently become well known. This was not fair and that it produces strong feelings of rage and hopelessness is not surprising.

I hope the thoughts here can help some people get justice.

MERS was not a creation of the state. It was and is a private venture often used to circumvent state fees and the filing process. It grieves me that the mortgage industry has paid so little price for what is essentially self enacted legislation.

James Pilant

From Timothymccandless’s Weblog –

Recently Discovered Flaw in Recording System Clouds Titles on Previously Foreclosed Properties   The modern system of mortgage refinancing and assignments created during the housing boom has left behind a wave of title defects on properties that have ever had a foreclosure in their history, due to a loophole in the property records recording system. This has been detected on a number of properties currently in foreclosure, and found to have … Read More

via Timothymccandless’s Weblog

 

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About Those Notes…Evidence of Securitization Fail (via foreclosuresinmass)

About Those Notes…Evidence of Securitization Fail  (via foreclosuresinmass)

English:

English: (Photo credit: Wikipedia)

I’ve been arguing the same thing, – that there was much more to the mortgage crisis than robosigning. So, give this a read. I like skepticism and intelligence. This article has both.

James Pilant

Since last October, shortly after the robosigning scandal broke, I’ve been talking until I turned blue in the face about robosigning being the tip of the iceberg with mortgage problems and that the real issue was chain of title. Robosigning appeared to be an almost unexpected deposition by-product; the real goal in the depositions that uncovered the robosigning was exposing the backdating of mortgage endorsement. And that they did–the notaries’ … Read More

via foreclosuresinmass

From around the web.

From the web site, Living Lies. (There is really no way to do this article justice by a couple of paragraph quote – Go and read the whole thing. This is good legal writing, clear and concise. The advice is excellent. This is a great web site!)

http://livinglies.wordpress.com/2012/10/23/can-a-broken-chain-lead-to-cancellation-of-instrument-no/

Which brings us to the second break in the chain. “for value received” is so commonplace, nobody reads it or pays any attention to it. But the fact is that the payee on the note never loaned the money nor purchased the loan. So in discovery, when I say follow the money, I mean follow the actual transactions in which the other side can prove money ex changed hands. It didn’t. Nobody paid for anything because the whole scheme was funded by investor-lenders ignorant of how their money was actually being used.

But by creating paperwork that carries with it the assumption or presumption that the assignee of course paid the assignor, the banks and servicers have so far accumulated title to more than 6 million homes most of which with a credit bid from a party who neither funded nor purchased the loan and who therefore could not be a creditor and who was not permitted under statute to submit a credit bid. This break in the chain of title is more akin to civil theft but it qualifies as a break.

From the web site, Findsen Law.

http://findsenlaw.wordpress.com/2012/09/11/prudential-v-goldman-sachs-raises-chain-of-title-in-securitization-of-mortgage-notes/

Several Prudential Insurance companies filed a lawsuit against Goldman Sachs related to a series of mortgage-backed-securities deals, particularly a lot of the GSAMP deals.  Prudential v Goldman here.  It contains some interesting allegations based upon Prudential’s systematic review of the collateral files:

Evidence That Goldman’s Representations Concerning the Mortgage Loans’ Chain of Title Were Systemically False

Goldman’s representations about the valid transfer of title of the Mortgage Loans to the Trusts were false. In many instances, the collateral did not properly secure the underlying Mortgage Loans and the Trusts could not foreclose on delinquent borrowers because Goldman.  Contrary to its representations, Goldman did not properly assign large numbers of the Mortgage Loans to the Trusts. In its rush to securitize loans and thereby offload risky collateral onto investors such as Prudential, Goldman did not comply with the strict rules governing assignment of mortgages and the transfer of promissory notes and loan files.  Goldman lost much of the paperwork relating to the Mortgage Loans underlying the securitizations, or made no attempt to assign the Mortgage Loans and deliver the original mortgage notes to the issuing trusts, as represented.

As part of its loan-level analysis of the Mortgage Loans underlying its Certificates, Prudential also examined if the chain of mortgage assignments was complete with respect to the Mortgage Loans. The review demonstrates that Goldman’s representations regarding the title for the Mortgage Loans were false and misleading, and that Goldman fraudulently failed to disclose problems in the chain of title for the Mortgage Loans.

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MCOA rules that MERS lacks standing to foreclose by advertisement (via Great Lakes Law Blog)

I’ve been a consistent critic of MERS, Mortgage Electronic Registration Systems. I consider incredible that the mortgage industry could set up this monstrosity which was in violation of state laws across the nation without trying to get some legislation from somebody somewhere to at least give it some iota of legality. Instead they just adopted it with an ethical sense very similar to listing your five grey tabby cats as children on your income tax. As far as I’m concerned, MERS is a semi-sorta legal device used to evade paying state registration fees and avoiding the basic work of transferring title by paper and all this so that these mortgages could be used as chips in global speculation.

This is an excellent brief discussion of MERS and the court system in Michigan.

James Pilant

In my introduction to MERS post, I indicated that a lot of litigation revolved around whether the Michigan Electronic Registration System (MERS) has standing as a party.  On April 21, 2011, the Michigan Court of Appeals decided that it did not in Residential Funding Co v Saurman.  The court said that MERS is not a party with an interest in the mortgage and cannot foreclose by advertisement.  MERS, as mortgagee, only holds an interest in the prope … Read More

via Great Lakes Law Blog

Another Successful Foreclosure Fraud Happy Hour (via Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge)

These are some great people. They took up a public fight on a major issue before the media or the government recognized the problem. In fact, the government and the press denied there was a problem. These people are heroes, using the power of the internet as visionaries have hoped.

I wish them well!!

James Pilant

Another Successful Foreclosure Fraud Happy Hour Picture of some of the guests at our latest happy hour. Had another great time. We all wore “Hello My Name Is” stickers. Funny thing, almost everybody there was named Linda Green! It really confused the bartenders, they didn’t know which tab to ring the drinks under… Over the weekend I will be posting the history of all of our happy hours and how you can get them going in your town. I want to see this happen in every city every month until the … Read More

via Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge

Fraudclosures | Federal Reserve: They Broke The Law (via Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge)

For about seven months now, I have argued over and over again that lying to the courts with false affidavits and actions amounting to fraud were prosecutable. I have used the word, crimes, and I meant it.

Why is it that if one of my students breaks the law by stealing a few dollars that he will go to jail and these banks can commit these acts and reap huge profits without fear of prosecution?

I want these law-breakers, these greedy well placed fraudsters, to go to jail, to do the perp walk, to pay enormous fines, and to serve as a warning to every Armani clad crook haunting the board rooms of our great investments banks.

James Pilant

My thanks to “Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge.”

Fraudclosures | Federal Reserve: They Broke The Law The Market Ticker – Federal Reserve: They Broke The Law but nobody cares…. (including us) The reviews found critical weaknesses in servicers’ foreclosure governance processes, foreclosure document preparation processes, and oversight and monitoring of third-party vendors, including foreclosure attorneys.While it is important to note that findings varied across institutions, the weaknesses at each servicer, individually or collectively, resulted … Read More

via Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge

Open Letter Re: Withdrawal of Proposed Consent Orders Regarding Mortgage Servicing Illegalities (via Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge)

I strongly support this. The proposed consent orders fall far short of any fair settlement of the crimes committed by mortgage industry. I hope you are willing to join in this effort to find justice for millions of Americans whose property rights have been violated by a rogue industry that directly violated the law hundreds of thousands of times.

James Pilant

Open Letter Re: Withdrawal of Proposed Consent Orders Regarding Mortgage Servicing Illegalities April 6, 2011 Ben Bernanke, Chairman Board of Governors of the Federal Reserve System John Walsh, Acting Comptroller Office of the Comptroller of the Currency Sheila Bair, Chairman Federal Deposit Insurance Corporation John Bowman, Acting Director Office of Thrift Supervision Re: Withdrawal of Proposed Consent Orders Regarding Mortgage Servicing Illegalities Dear Federal Regulators of the Financial Institutions of the United States: The undersign … Read More

via Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge

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