Our government is still making noises about chasing the bad guys, yes, the mortgage monsters who terrorized Michigan, and the rest of the country, with their practices.

Making noises, yes.  Accomplishing anything?  Not so far.

image by:  Dreamstime

What terrifying mortgage practices?

Robo-signing is a glaring example of greed overcoming all ethics. 

From the linked to story:  “Whether massive robo-signing occurred is no longer in issue. The question that needs to be investigated is why it was being done. The alleged justification—that the bankers were so busy that they cut corners—hardly seems credible given the extent of the practice.”

Uh, yeah.  You (the mortgage industry) are making hundreds of millions of dollars, but, you have to hire people at minimum wage to sign affidavits that a mortgage is in default, and the mill law firm you hired now can use this in a court to foreclose.

People were signing hundreds of affidavits per day.  The signers knew nothing about any of the affidavits they signed.

Gretchen Morgensten’s book, Reckles$ Endangerment, has the best recounting of how the mortgage monsters led the world economy to the brink of destruction.

How would you like to be in the position of losing your house, based on a ten dollar per hour clerk signing a paper that he is familiar with all the records of your mortgage, and you are in default?

Then, when courts started holding their feet to the fire about not having the records of who bought which mortgage when,

image by:  Dreamstime

the mortgage crooks simply started making up documentation of transfers, backdating them, and putting them in the pile for the robo-signers.

I understand it is difficult for law enforcement to wade through the paperwork on these massive frauds.

The SEC chairman said they have looked at 25 million, yes, million, pages of documents and on mortgage fraud issued lots of subpoenas, yada, yada, yada.

How about some indictments?  Some criminal charges against the crooks?

No related posts.

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The foreclosure crisis has hit Michigan as hard as any state.

Like my boat after a rainstorm,

most Michigan homes with a mortgage are underwater, that is, worth less than what is owed

on them.

Uh, this is not newsworthy.

Just today, spoke to a former client who is 64, yes, sixty four months behind on his home, and

the foreclosure process is just starting.  He owes over half a million, yes, $500,000, dollarrs on

a home that may be worth $200,000.

Then a prospective client from Detroit calls.  Trying to get a loan modification to avoid foreclosure, pursuant to his rights under Michigan’s foreclosure law.

House worth maybe $12,000, owes $112,000 on the first mortgage alone, another $40,00 on the

second mortgage.  Wife works part time, and they both get pensions.  And their neighborhood is

no longer safe.

President Obama, in his State of the Union speech talked about chasing the crooks

image credit: dreamstime

who caused the foreclosure crisis.

So, my question, now will the government help foreclosed homeowners?

Uh, sure.

My view is the crooks bought both political parties on the way up, when the bubble was still

inflating.  The real estate bubble, that is.  So, when it popped, back in the summer of 2008,

they never worried about being prosecuted for their crimes.

Hell, the sons of bitches got federal government appointments.  Big ones.

So, this new commission to

“ to investigate misconduct and illegalities that contributed to both the financial collapse and the mortgage crisis.”

is another smoke screen, by the crooks, for the crooks.

I am not a left wing critic of the administration, like Abigail C. Field, but her review is dead on.

This transcends party politics, even political philosophies.

I have yet to meet someone who justifies the looting, fraud, OK, I am close to frothing at the mouth recalling the destruction of the global economy these clowns started.

That is not even a sentence.  My point is, no one excuses the crimes they committed, left, right, Libertarian, Communist, you name it.

Yet, not only do they walk, make that fly, freely among us, they are still living well off the

fruits of their crimes.

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Michigan’s foreclosure law changed dramatically a couple of years ago to

encourage the evil bankers, uh, sorry, responsible mortgage companies to

assist homeowners in keeping their homes.

I have seen no statistical studies.  Based on what I hear from Michigan

bankruptcy and foreclosure clients, not many people actually get modifications

out of this process.  Like all the other government programs.

photo image: dreamstime

It does give you more time, 3 months plus, to adjust your life.

The temporary law has been extended once, and the legislature has passed

another extension with significant changes to the Michigan foreclosure laws.

You can read the bills, there are three of them by clicking on these links:

Michigan foreclosure,   foreclosure law, and foreclosure in Michigan.

The old law required the scumbags, uh, sorry, mortgage companies, to publish

a notice somewhere, always appeared in the Legal News, with your address.

et cetera, advising you of your right to request a modification within 14 days.

The new laws make publishing the notice in a newspaper, optional.

                               image credit: dreamstime

You can bet that will no longer be done, as it enables lawyer, realtors, and

hustlers to send form letters to solicit business from potential foreclosure

victims, and mortgage companies think you know too much about your rights

as it is.

If no timely request, they could get on with the process of taking your house.

If you made the request on time, the mortgage company was required to

provide an agent to meet with you to discuss modification.  You had to give

them financial information about yourself, of course.

Son of a gun, every mortgage company I heard about simply hired the law

firm that did their foreclosures, and, you could go to their office.

New law:  agent has to be a person or someone within the mortgage company.

It will be interesting to see how they manage that.

Benefits to mortgage companies:  homeowners liable for damages incurred

during the redemption period, and, 6 month, down from 12 month, redemption

period for non farms more than 3 acres in size.

What do you think?

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Hope everyone had as great a holiday as I had, largely thanks to Denard Robinson!!!

Back to work.

Yeah, the MERS bad guys are smiling over this one.  The Michigan Supreme Court, in a 4 – 3 vote, overturned the Court of Appeals decision that MERS did NOT qualify under Michigan law to foreclose by publication.

Ah, well.  It was fun while it lasted.

MERS is getting the last laugh.

image credit: dreamstime

To rewind the tape, in April, a Michigan Court of Appeals ruled that MERS did not have standing, a legal term meaning the right to bring a suit or take an action, to foreclose by publication.  If I get hit by a car, and it is the other guy’s fault, I can sue, not you or somebody else.

MERS is at the center of the murky condition mortgage document situation across America.  The sloppy record keeping and practices, like robo-signing, of the mortgage industry, frequently make it difficult to determine who really owns the note, has the actual right to foreclose on a mortgage.

Some mortgages just state that everyone agrees that MERS is the mortgagee, which is the entity that has the right to foreclose.

What MERS did is just foreclose anyway, regardless of what the paperwork said.

So, when the April court ruling tossed that out, the scramble was on, title companies panicked, foreclosure sales were undone, re-sales of foreclosed homes were cancelled.

This being a matter of state law, the state Supreme Court gets the final word, so MERS is back in business.

But, the clock does not go back, so all the undoing remains undone.

If your foreclosure sale was cancelled, it will have to be done over, unless you do a deed in lieu of foreclosure.

Once again, be warned!  DO NOT PAY SOME SCAM COMPANY TO DO A MORTGAGE MODIFICATION!!!

Talk to one of the non-profit counseling agencies, you can get referrals through the Department of Housing and Urban Development.

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The foreclosure crisis, natural fallout from the bursting of the real estate bubble, affects homeowners in St. Clair Shores and Troy Michigan and everywhere else in our state and country.

Why did it happen?

     Before a bubble can burst, it has to be blown up.

As Ron Paul (constantly) says:  the Fed!

   1.  THE FED PRINTED TOO MUCH MONEY

When you think about it, the federal government has a monopoly on printing money.  If you don’t think so, try competing with it and printing up some.  (Note to the Secret Service: just kidding!)

Since 1971, when President Nixon took us off the gold standard, there is no limit on how much money the Fed prints.

As Nobel prize winning economist Milton Friedman said:  Inflation is always and everywhere a monetary phenomenon.  Only the government can cause it.

So, when more money is printed than the economy needs, prices of something go up.

2.  THE FEDERAL GOVERNMENT PUSHED LENDERS INTO LOWERING MORTGAGE LENDING STANDARDS

This is well documented in the Gretchen Morgensen book everyone should read: “mortgage companies would wail “The devil made me do it!” but they were not forced.  They cooked the books, came up with gimic after gimic, SIVs, (Special Investment Vehicles) so they would look solvent to the regulators, 100% loan to value, interest only, 80-20 where they lent you the 20% that used to be the down payment, no doc loans, and so on.

4.  THE RATINGS AGENCIES WENT RIGHT ALONG WITH IT

The ratings agencies, Moodys and Standard & Poors and Fitchs, who do just about all of the ratings of debt, abandoned any pretense of objectivity and actually doing their job, and simply rated the crap mortgage securities that were being sold, without even researching what the hell was being sold.

5.  APPRAISERS SOLD THEIR SOULS

To complete the perfect storm, only appraisers who signed off on whatever value the mortgage broker put on the form got any business, so they did so.  Greed all around.

So, to sum up:  Federal government prints too much money, pushes lenders for more mortgages, lenders lower standards, ratings agencies make it work by giving high ratings to mortgage backed debt, and, on the front lines, appraisers go along with the whole scam.

(image by dreamstime)

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Home prices lowest since 2003, though prices are up in Detroit, and, of course, Washington D.C, home of the political class, which never has a recession.

But, median home prices made their biggest drop ever.

Detroit prices were so low, they attracted investors from outside Michigan.

Or, it could be the proverbial dead cat bounce, what stockbrokers call the market rising after a giant tumble, only to resume the downward trend shortly after.

On a brighter note, instead of going along with the mortgage industry that brought us the foreclosure crisis and brought the world economy to its knees, attorneys general in Delaware and New York are working on a criminal foreclosure investigation.

’bout time.

From the Bloomberg piece linked to above, N.Y. attorney general Schneiderman: “We’re also looking at the conduct of individual institutions and individuals to see if there were misrepresentations made, to see if there was any fraud committed, to see if criminal acts were also a part of this.”

Well, I don’t mean to ruin any suspense, but the answer is, HELL YES!!!

Closer to home, the Ingham county clerk is helping homeowners facing Michigan foreclosure.  The county clerks of America are the ones who were screwed by the whole MERS operation, created solely to avoid paying them recording fees when mortgages were sold or assigned.

Massachussetts has socked it to foreclosing mortgage companies, ruling that if they did not actually hold the mortgage note, they could not foreclose.  This affects two out of three home sales in the last five years, as that is how many involved foreclosed properties.

If the foreclosure sale was bogus, and you bought that house later, too bad.  Anything after that is bad title to the house.

This ruling is based on Massachusettes law, it cannot be appealed to the U. S. Supreme Court.

It will be interesting to see what comes of this one.  Michigan courts are unlikely to treat Michigan foreclosures this way, as our property law is different from Massachusetts.

Darn.

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Hey, if you’ve read me before, you know the answer:  NO!

With the Fed lending the banks money at virtually zero interest, bank profits are high.

The foreclosure crisis in St. Clair Shores, MI, and the rest of our country, was caused by the banks who got the government to greenlight their shoddy lending practices and ripping off of consumers.

Bank of (everything in) America bought the biggest offender, Countrywide, and more revelations of their criminal conduct continue to percolate to the surface.

Employees who questioned inflating applicant’s income and playing with appraisals were told to shut up, transferred, hounded from the job, or fired.

Bank of (everything in) America declines to comment, saying all this stuff happened before they acquired Countrywide.

Well, they should have known about it, would have saved their shareholders a ton of money, they could have backed out of the deal.

Lingering bad news for the mortgage companies, and, more importantly, us, is the shadow inventory out there.

Why are the banks slowing down their foreclosures?

Because they are crooks, that’s why!

OK, I will settle down.

Now that some courts are holding their feet to the fire, in judicial foreclosure cases making them prove they own the paperwork, they are stuck.  Literally.  The paperwork is missing, or in such mess, that they were simply making stuff up to get their foreclosure judgments.  Not so fast!  The jig is up, the courts are starting to examine the crap the mortgage companies have been submitting.

Go back and fix it, the courts say.

Easier said than done.

From the Naked Capitalism story linked to above: “Our Tom Adams has estimated that it would cost $20,000 to $40,000 more per foreclosure (no typo) to dispense with robosigning and prepare court documents properly in judicial foreclosure states.”

Combine that with so many homes being underwater already, and the incentive to foreclose goes down.  And the unsold homes just sitting there goes up.

And the economic doldrums go on.

image credit:  dreamstime

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Hey, there is just something therapeutic about me putting this picture up writing about mortgage companies, and, like today, foreclosure scammers, hustlers, con artists, who fleece people after they already lost out to the mortgage industry.

Yes, this is a repeat topic, but the foreclosure rescue scams are still out there ripping people off, in St. Clair Shores Michigan and across the land.

Most people want to keep their home.  They are frustrated with the run around from their mortgage company.  That is all I hear, day in, day out.

I sent the papers two weeks ago, they said send them again.  I made the temporary payment for 6 months, then they told me I did not qualify.  I got a fed ex package on Friday that they needed the papers by Monday.  Someone new picked up my file and I have to start all over again.  I have been in a temporary modification for 18 months.  And so on.

The scammer ads make it sound like they are part of some government program.  HAMP and the other government efforts are feeble, ineffective, and confusing, so the foreclosure scammers fit right in!

Up front fees to these outfits are now banned by the FTC, but, one of their mottoes is:  Rules are made to be broken.

After reading the Janell Ross story in the Huffington Post linked to above, I realize a lot of the advertisers are just referring leads out to other crooks.  So, they handle the marketing, make their money by charging the crook down the line the fee, and the ultimate foreclosure scammer deals direct with the consumer.

I did know many of the foreclosure scam companies are peopled by crooks, or, in keeping with the photo, rats, who used to work in the sub-prime mortgage industry.

One of their lines is, they know the guy in the back room at the mortgage company, they can get cut through the red tape and get to him.

IF IT SOUNDS TOO GOOD TO BE TRUE, IT IS!

In Michigan, check with the state housing agency for a list of reputable non-profits before you open your wallet.

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