The nightmare of foreclosures and all their bad consequences continues to inflict our state of Michigan, from St. Clair Shores to Troy to Redford to Grand Have to the U. P.

Its been awhile between posts here, sorry, holidays, and working on a bunch of Chapter 11 cases.

Nothing good to report!

(image credit luigi diamonti)

Creditslips details the failure of the OCC, Office of the Comptroller of the Currency, to make even a token effort at reviewing the compliance of the bastards, uh, excuse me, mortgage companies, that caused this mess.

They use law firms who represent mortgage companies, to review whether mortgage companies complied with applicable foreclosure laws.

Gee, wonder if you could make book in Vegas on what their findings will be?

Adam Levitin goes on with chapter and verse, and does not pretend he has an exhaustive list of the conflicts of interest and huge areas that are just being overlooked.

I wish I could say I was surprised at some, any, of the revelations of what the rats

did, and continue to do.

I have seen the work of Countrywide, the worst offender, for years, up close and personal, as they used to say on TV.

They just got whacked for another $355 million, with the usual statement that they did nothing wrong.  Nope.  Just had $355 million laying around they wanted to give away.

And, of course, this was all done by Countrywide BEFORE Bank of (everything in) America acquired them, so don’t go thinking Bank of (everything in) America ever did or does or countenances any wrongdoing.  No sirreee Bob.

This one is for discriminating against minorities.

(image credit: David Castillo Dominici)

People were smiling like this when Countrywide gave them that loan.

Not so much when they found out, oh, the interest rate was higher than what the mortgage broker told them, and higher than if they were white.

Well, only so much bad news per post.

More to come.

Happy New Year!

I hope we really get the bastards in 2012.

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RESPA stands for Real Estate Settlement and Procedures Act.

Some provisions relate to how mortgage companies must handle escrow accounts, and various notices they must provide, and the timing for same.

My favorite part requires mortgage accounting, if you send a QWR (lawmakers love acronyms) qualified written request.

Now, why would you need an accounting from your mortgage company?

Do you have a dispute with them over how much you owe, whether you are behind?

Are you trying to get a modification, and disagree on the numbers?

You do need a basis to send the QWR, so if you are paying on time every month, and they are not claiming you are behind, don’t waste your time.

But if they are playing games with your insurance escrow, or paying taxes you already paid, send the letter.

If they are billing you for late charges for payments you made on time, if they are not crediting payments you sent, send the QWR.

If you just came out of a Chapter 13 bankruptcy which brought you up to date on your mortgage payments, and they are threatening to foreclose, send the QWR.

The law still gives them 20 days to acknowledge they received the letter, and 60 business days to send you the mortgage accounting.

They owe you a complete accounting, every penny you sent in, and where they applied that penny.

Dollars to donuts, the accounting they send you will not make sense.

That is, it will not add up correctly.

Most of the mortgage companies use an invention of theirs, the Suspense Account.

This is where they stick your money rather than returning it, when they decide it is not enough.

I have seen mortgage accountings that leave out all Suspense Account entries.

If the accounting does make sense, great, problem solved!

If not, this is a fee shifting statute, so, if you sue and win, and I have not lost one of these yet, the mortgage companies has to pay your attorney fees and costs.

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The sellout continues, as the state and federal governments appear ready to let the Big Banks off the hook for the foreclosure crisis they caused, which ruined home values in St. Clair Shores and the rest of Michigan.

No one has covered the foreclosure crisis like Gretchen Morgenson of the New York Times, whose book is essential to understanding what happened.  Or, more accurately, how we were screwed.  foreclosure fraud, this site is full of stories on the specifics behind the foreclosure crisis.

Rumors of an imminent deal have flown before, so this may not pan out.

However, as Ms. Morgensen aptly notes:  “Cutting to the chase: if you thought this was the deal that would hold banks accountable for filing phony documents in courts, foreclosing without showing they had the legal right to do so and generally running roughshod over anyone who opposed them, you are likely to be disappointed.”

The deal does not even include Fannie Mae and Freddie Mac loans, which are close to a majority now.

Suppose you were a victim of a wrongful foreclosure.  You lose your right to sue the banks, who caused the foreclosure crisis, and, you get, drumroll:  $1,500.

Actually, if your home were foreclosed after September, 2008, you get $1,500.  Wrongful or not.

So, even if the foreclosure were totally legit, you get 1500 bucks.  Conversely, if you got screwed, you get $1,500.  And nothing else.

A little late for this warning, but, the more I read about this, the more I lose my appetite.

“The rest of the cash that would be paid by the banks is expected to be split this way: the federal government would get about $750 million, state bank regulators about $90 million. Participating states would share about $2.7 billion. That money is expected to finance legal aid programs, housing counselors and other borrower support. If 45 states participated, that would work out to about $60 million apiece.”  (from the N Y Times article)

Yikes.

That is all I can stand for now.

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(I just love these guys!)

Adolf Ratler and Benito Mouselini, pictured above, are well known robo-signers and purveyors of fraudulent mortgage documents.  Fake notarizations, people signing other people’s names, attesting to facts about which they had no knowledge.

Mortgage companies have done this all across the country, including our fair state of Michigan.

“– In Michigan, the state attorney general has sent criminal subpoenas to three companies that processed mortgage paperwork after 24 local recorders of deeds looked through their files and found rampant robo-signing.”

Read more: Fraudulent mortgage documents fill county files – Pittsburgh Tribune-Review http://www.pittsburghlive.com/x/pittsburghtrib/s_756088.html#ixzz1XyyM4GZr

The banks and mortgage companies have refused to show their real books.  I believe most of them are insolvent.  That is why the TARP money and Federal Reserve bailouts did not put money into the economy; the banks happily kept it to strengthen their balance sheets.

Not only did they invest in horrible mortgages, they multiplied their exposure with derivative investments, to leverage their bets by 1,000% or more.

Somehow, the regulators let them use SIVs, Special Investment Vehicles, that were off the books, to hold these risky investments.

Also concealed is just how they managed to handle the tremendous outburst of lending, which was, paying people to sign their names hundreds of times a day to documents they did not even have time to read, having one person sign the name of 3 or 4 or more different people, having documents notarized before they were signed, or, notarizing that same signature used on multiple names.

The mortgage companies want to settle all possible claims for this criminal conduct, so they can continue foreclosing.  They do not want to be bothered with the detail of complying with state foreclosure law.

To beat the drum again, no settlement will work unless it requires mortgage modifications that write mortgages down to something close to the actual value of the home.

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Short sale = sale of your home for less than what you owe on it, so, short of the amount necessary to pay the mortgage or mortgages and any other liens, like property taxes.

Over half the homes with mortgages are worth less than what is owed.  I am sure that more that is worse here in Michigan.

Short sales in Michigan are common these days.

The mortgage company has a lien on your home; you cannot sell it without them releasing the lien.  It is up to them if they want to do that for less than what you owe.  If they do agree, they still may require you to sign a note to pay them the difference between the short sale price and the balance on the mortgage.

That way, if you owe $150,000, and sell if for $100,000, you still sign a contract to pay them the $50,000 at so much per month.

Short sales are extra hassle for you, whether buying or selling, and for the realtor.

I know, I am married to one.

You have to jump through the hoops the mortgage company puts out there, as you have no right to force them to agree to a short sale.

You used to have to list it for at least what you owed for a period of time, then gradually lower the sale price, to prove to them you could not get enough to pay them off.

As with bank owned homes, it takes longer to get approval of a purchase agreement.  Sometimes so long that you lose your buyer, who gets tired of waiting.

But the federal government put some incentives in to mortgage companies to speed up short sales last year.

And, don’t forget the tax consequences of a short sale.

For now, it is not taxable if they do forgive the balance of the mortgage, IF the money borrowed was used for the home.

If you had a second mortgage to put money into your business, or pay credit cards, whatever is forgiven in a short sale may show up as taxable debt forgiveness income to you.

Consult your tax adviser.

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First Michigan law firm implicated in fraudulent foreclosure affidavits.

Michigan attorney general involved in chasing mortgage servicers for robo-signing.

I have written about robo-signing before; I can’t tell you how great it is to see a politician do something about it.

We all know the drill:  massive over-lending, subsidized by the government, predatory mortgages, tossing out underwriting standards, (if you could fog a mirror you could get a mortgage) the real estate bubble pops, people cannot re-finance anymore, foreclosures explode.

So, there was a system in place for processing foreclosures.

And it was running x foreclosures per month.

Then, foreclosures doubled or tripled, so now you are running 2x or 3x the foreclosures you had before.

So, you need two or three times as many employees, right?

Well, that cost money.

Or, the people you have can just process two or three times as many foreclosures, by doing two or three times as much work in the same time frame.

I don’t think we can go from 8 hour days to 16 or 24 hour work days.

Which way did the mortgage industry opt to go?

Yes! Double and triple the work load.

The same amount of time cannot be squeezed out of each task involved in foreclosure.

In states with judicial foreclosure, an easy shortcut is rubber stamping the affidavits stating you have personal knowledge of the details of the mortgage and the payment history, that is, when the homeowner signed it, the interest rate, balance, amount behind, and so on.

Michigan has both judicial foreclosure and foreclosure by advertisement.

It seems the current issues for the Orlans firm arise in judicial foreclosure states in which they also operate.

But, the general rule applies, the more stuff you try to do in the same amount of time, the more mistakes you make.

Signing false affidavits to use in a court is a crime, one of many in the foreclosure crisis, I am glad to see law enforcement finally taking some action.

What do you think?

photo credit:  nayrb7

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For this holiday weekend, just linking to a post I did on another site on the above topic.

Click here.

Happy holiday to all.

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Cold, and getting colder.

Over 10% of U. S. homes are now empty.

More trouble for MERS, as Freddie Mac joins Fannie Mae in prohibiting foreclosures in its name.

There is a multi-year supply of “shadow inventory,” homes through the foreclosure process that the banks have not even offered for re-sale yet.

Our government, which caused the crisis, continues to interfere in the housing market, preventing real estate from hitting a bottom from which it can commence to recover.

The FHA is powering such sales as are occurring.

The HAMP program has been an abysmal failure at keeping people in their homes and stopping the foreclosure crisis.

I blog about it all the time, more foreclosures, more supply, suppresses the price, more homes underwater, more foreclosures, and so on.

HAMP was a sop that the mortgage industry wanted, to keep Congress from enacting judicial mortgage modification through amendments to the Chapter 13 bankruptcy law.

The crooks who brought us the foreclosure crisis, the too big to fail banks and mortgage companies, have been bailed out by us taxpayers, instead of being prosecuted for their crimes.

The government aided and abetted the inflating of the real estate bubble, with Fannie Mae and Freddie Mac buying the toxic mortgage loans that the big players marketed to America.

Had the government let the big boys fail in 2008, as they so richly deserved, the market would have hit a bottom and we would be coming out of it by now.

Instead, the federal government has been trying to artificially inflate home prices, interfering in the market, increasing the economic losses enormously, prolonging the foreclosure crisis and forestalling genuine recovery.

The truth is, though it is a buyer’s market, you are probably better off renting than buying right now.

You need people with jobs to buy houses, and we have been losing those in Michigan for about 7 years.

There is a large amount of what the realtors call “inventory,” unsold houses, that has to work through the market before prices can rebound.

The Real Truth About Foreclosures And The Residential Real Estate Market

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Foreclosure fraud had to be perpetrated by someone, and, at least in states that require judicial foreclosure, lawyers had to help.

Readers know I have been harping on this, for, well, years.

The evidence mounts.

I still think underneath this we will find multiple first mortgages on the same house, and mortgages on houses which do not exist.

The latter I have seen already.

Instead of prosecuting the criminals at the big mortgage companies, who knew they were pedling crap, Obama came up with HAMP, a program to pay the mortgage companies to modify some of their bad loans.

As the bubble inflated, lending standards eroded until they were, in practice, gone.

Anyone who could fog a mirror could get a mortgage by 2007.

Appraisers got no business unless the homes appraised out for the mortgage brokers.

The brokers got paid at closing, whether the mortgage loan ever got even one payment, or not.

The Federal government made it all go with Fannie and Freddie buying almost everything.

Now we see the fraud continued at the other end of the spectrum, the foreclosure process.

As the mortgage companies were working dawn til dusk and beyond pushing mortgages out the door, and peddling them, they did not keep such good track of the paperwork.

If you are a lawyer, paperwork is important.

When you are trying to take away someone’s house, courts like to see that you are, in fact, representing the owner of the mortgage on that house, and, that the mortgage is in default.

Details, details.

David Stern, fallen Florida foreclosure king, could not be bothered.

Mortgage companies want to save money on foreclosures, just like any other stage of the mortgage process, origination, servicing, whatever.

In pursuit of bigger and bigger bucks, Mr. Stern’s firm cut corners, big time.

To quote from the ABC story linked to above:

“Stern’s employees churned out bogus mortgage assignments, faked signatures, falsified notarizations and foreclosed on people without verifying their identities, the amounts they owed or who owned their loans, according to employee testimony.”

Employees signing affidavit after affidavit that they had not read.

Though, what the hell is the difference?

They had no knowledge of what was in the affidavit anyway, whether that mortgage was actually in default or not.

As my friend April Charney says, there is one in every state, some states have more than one.

One down, how many to go?

Florida Foreclosure Fraud King – Is Dead

Florida Foreclosure Fraud King – Is Dead

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Foreclosure is difficult to fight in states, like Michigan, that allow non-judicial foreclosure.

In court, whoever is suing, the plaintiff, as we call it, has to prove its case.

So, if the mortgage company forecloses in court, they have to prove they own the mortgage.

The top court of Massachusetts held this past week that Wells Fargo could not win a foreclosure suit without proving they crossed the t’s and dotted the i’s on the paperwork.

But, in Michigan, Wells Fargo can foreclose by advertisement without proving anything.

However, they do have to go to court to evict the  homeowner.

Michigan law does not give the mortgage company title to your property until 6 months after a foreclosure sale.

If you are still living in the house at that time, the mortgage company must file an eviction lawsuit to get you out of the house.

That has to go through a court.

Now you may be able to attack the validity of the mortgage sale, make them prove they were entitled to foreclose.

These issues have not been heavily litigated in Michigan, and there are no higher court rulings over what can be properly raised as defenses to eviction.

In an eviction suit, the plaintiff, the mortgage company, is saying this is our house now, get these people out of it.

Courts might just rubber stamp the foreclosure sale, and not look behind it.

It is unbelievable the games the mortgage industry is playing.

Foreclosure sales are started in the name of the wrong company, affidavits are created  after the fact to “fix” it, mortgages are transferred during the redemption period,

Corners were cut to save money, forms were left blank to be filled in later, were lost, as mortgages were bought and sold and bundled and so on.

You may be able to keep your house if the eviction court will force the mortgage company to prove they do actually own your mortgage.

Fighting Mortgage Companies After Foreclosure

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