Posted Homes for Foreclosure

Posted foreclosures for the Greater Houston Area total 6,689 which is a 43% jump from last month’s 4,478.   Galveston County continues to rocket forward with a 53.7% increase over August’s posted foreclosures.  Fort Bend County was not far behind with a 49.1% increase in postings.  Harris County and Brazoria County finished neck to neck with increases of 38.2% and 36.7% respectively.   If there was a winner it is Montgomery County with only a 30% increase.

Regardless of county, the local Greater Houston Area is seeing a big leap in lenders pursuing foreclosures.

• 309 vs 226 for August – Brazoria County (Pearland, Alvin, Lake Jackson, etc.) +36.7% increase
• 874 vs 586 for August – Fort Bend County (Missouri City, Sugar Land, Richmond, etc.) +49.1% increase
• 375 vs 244 for August – Galveston County (Galveston, Clearlake, Texas City, etc.) +53.7% increase
• 4,649 vs 3,361 for August – Harris County (Houston, Pasadena, Baytown, etc.) +38.2% increase
• 482 vs 371 for August- Montgomery County (Montgomery, Conroe, Splendora, etc) +30.0% increase
• 6,689 – Total

With such a large number of postings, although not every house will be sold, the local real estate market is going to struggle to absorb the increase in foreclosure inventory.  As an example let’s look at the numbers moving through the Houston Association of Realtor Multiple Listing Service.

Currently there are 54,926 properties for sale in the greater Houston area.  Of this number, 4,778 are REO (real estate owned), commonly called foreclosures; this accounts for 8.2% of the market.  Add in Short Sale listings for another 1,807, which is 3.3% of the market and you now have 11.5% of listings which are distressed sales. Distressed sales typically drive down prices.  Especially when roughly one out of every ten homes for sale is a distressed sale.   But if the market can absorb them, in other words they are selling as fast as they come in, then everything is still OK.

Let’s look at how fast the distressed sales are moving.  Last month, in the Greater Houston Area, 941 of the properties in MLS sold as “foreclosures” and another 109 sold as “short sales”.  That means that only 1,050 properties out of the 6,585, or 16% of the distressed sale category actually sold through.  At this rate it would take roughly six months to sell through the distressed inventory – but this assumes that no new properties are listed for sale.  But remember we have 6,689 properties posted for the foreclosure sale.

We’ll have to closely watch the sell through rate as well as the actual number of properties that foreclose to see if our market can handle the inevitable and eventual and likely substantial increase of distressed listings.

Foreclosures for Sale* -4,778

• 264 – Brazoria County (Pearland, Alvin, Lake Jackson, etc.) +3.2% (+0.9% MOM)
• 551 – Fort Bend County (Missouri City, Sugar Land, Richmond, etc.) +8.2% (+12.2% MOM)
• 360 – Galveston County (Galveston, Clearlake, Texas City, etc.) +9.1% (+5.0% MOM)
• 3,155 – Harris County (Houston, Pasadena, Baytown, etc.)  +0.4% (+2.1% MOM)
• 448 – Montgomery County (Montgomery, Conroe, Splendora, etc.) +2.6% (+7.7% MOM)

Short Sales for Sale on MLS – 1,807

• 78 – Brazoria County (Pearland, Alvin, Lake Jackson, etc.) +8.9% (+4.0% MOM)
• 226 – Fort Bend County (Missouri City, Sugar Land, Richmond, etc.) +1.4%  (-5.4% MOM)
• 106 – Galveston County (Galveston, Clearlake, Texas City, etc.) +16.5% (+8.2% MOM)
• 1,260 – Harris County (Houston, Pasadena, Baytown, etc.) + 1.8% (+1.7% MOM)
• 137 – Montgomery County (Montgomery, Conroe, Splendora, etc) -5.6% (-2.8% MOM)

Foreclosures Sold in MLS in July – 1,070

• 47 – Brazoria County (Pearland, Alvin, Lake Jackson, etc.)
• 118 – Fort Bend County (Missouri City, Sugar Land, Richmond, etc.)
• 67 – Galveston County (Galveston, Clearlake, Texas City, etc.)
• 741 – Harris County (Houston, Pasadena, Baytown, etc.)
• 97 – Montgomery County (Montgomery, Conroe, Splendora, etc)

Short Sales Sold in MLS in July – 109

• 3- Brazoria County (Pearland, Alvin, Lake Jackson, etc.)
• 15 – Fort Bend County (Missouri City, Sugar Land, Richmond, etc.)
• 3 – Galveston County (Galveston, Clearlake, Texas City, etc.)
• 77 – Harris County (Houston, Pasadena, Baytown, etc.)
• 11 – Montgomery County (Montgomery, Conroe, Splendora, etc)

Foreclosures Sold in MLS in August- 941

• 46 – Brazoria County (Pearland, Alvin, Lake Jackson, etc.)
• 91 – Fort Bend County (Missouri City, Sugar Land, Richmond, etc.)
• 54 – Galveston County (Galveston, Clearlake, Texas City, etc.)
• 659 – Harris County (Houston, Pasadena, Baytown, etc.)
• 91 – Montgomery County (Montgomery, Conroe, Splendora, etc)

Short Sales Sold in MLS in August – 69

• 3- Brazoria County (Pearland, Alvin, Lake Jackson, etc.)
• 14 – Fort Bend County (Missouri City, Sugar Land, Richmond, etc.)
• 3 – Galveston County (Galveston, Clearlake, Texas City, etc.)
• 42 – Harris County (Houston, Pasadena, Baytown, etc.)
• 7 – Montgomery County (Montgomery, Conroe, Splendora, etc)

* Foreclosures & Short Sales are combination of HAR MLS & non-MLS REO/Corporate sales, averaged over 2 months.

**MOM = Month over preceding Month

Finally, Texas Attorney General Greg Abbott’s office has caught on to these thieves.

Trying to resolve a problem mortgage?  Is the bank breathing down your nneck or threatening foreclosure?

Read our testimonials.  Ask for references.  Then act!!!

Crooks like AHMSI roll over when hammered by negotiators and/or attorneys who know how to deal with predatory servicers.

If your mortgage company is AHMSI call us ASAP and find out what kind kind of success we’ve had with these yahoos.

– The Bank Slayer

Texas AG Charges Servicer With Violating Debt Collection Laws

Tuesday, August 31, 2010

Texas Attorney General Greg Abbott has charged Coppell, TX-based American Home Mortgage Servicing Inc., the nation’s largest independent subprime servicer, with allegedly “using illegal debt collection tactics and improperly misleading struggling homeowners.”

According to a statement released by his office, AHMS collections agents used “aggressive and unlawful tactics to collect payments from Texas homeowners who had difficulty meeting their payment obligations.” State investigators claim the defendant also failed to credit homeowners who properly submitted their payments on time.

The enforcement action charges AHMS with multiple violations of the Texas Debt Collection Act and the Texas Deceptive Trade Practices Act. The state is also seeking civil penalties of up to $20,000 per violation of the DTP.

Philippa Brown, a spokesperson for American Home Mortgage, said the company does not comment on pending litigation.

AHMSI is owned by the New York-based private equity firm WL Ross & Co., which did not return a phone call for comment by deadline today.

On the flip side, if you were involved in a deal with these folks and you knew it wasn’t on the “up and up” don’t call!

- The Bank Slayer

22 Indicted for Illegal Property Flipping

Robert Brooks, 43, his wife, Cheryl Brooks, 41, Lantana, Texas, along with 20 other individuals, have been charged with conspiring to commit wire and mail fraud in a series of “property flip” schemes:

Richard Howard, McKinney, Texas, attorney and principal in Progressive Title & Abstract – a real estate title company Robert Brooks controlled;

George Autobee, straw buyer and former Bexar County sheriff’s deputy;

Cedric Lester and Casey Vaughan, appraisers;

Yvonne Salazar Quintanilla, formerly of San Antonio and now of Dallas, Texas, employee of Pro Processing, an entity Robert Brooks established and controlled that allegedly prepared bogus mortgage applications;

Niesha Manuel, Dallas, Texas, employee of Pro Processing;

Tamatha Buckholt, Dallas, Texas, employee of Pro Processing;

Stacy Owens, Dallas, Texas, a branch manager and escrow officer at Equity Title of Texas;

Geraldine Williams, Dallas, Texas, empployee at Progressive Title & Abstract;

Cesar Gonzales, Dallas, Texas, employee at Progressive Title & Abstract;

Joseph Cooper, San Antonion, Texas, real estate agent;

Vadim Gazanchiyants, Las Vegas, Nevada, a property manager who worked on behalf of Robert Brooks;

Deborah Allen, Bulverde, Texas, who worked at various times for Adkins Financial Group and for Cheryl Brooks;

Mauricio Betes, Inglewood, California, straw buyer;

Stephen Brott, Los Angeles, California, straw buyer;

Rick Russell, Marina Del Rey, California, straw buyer;

Anthony Lorek, Lancaster, California, straw buyer;

Claude Vaughan, Dixon, California, staw buyer;

Glynnwood Bowman, Valley Village, California, straw buyer; and

Stanley Roos, Los Angeles, California, straw buyer.

The indictment alleges that from May 17, 2005, until February 21, 2008, the defendants, under the direction of Brooks, participated in a mortgage fraud scheme whereby he purchased properties at fair market value then resold at an artificially inflated price to straw purchasers. According to the indictment, Brooks recruited his co-defendants-appraisers, loan processors, title company employees, straw purchasers, etc.-and provided them with kickbacks from loan proceeds for their participation in the scheme. Brooks also used the proceeds from the purported sales to various nominees to pay for his initial purchase of real estate, to pay closing costs for both his purchase and sale to the nominee, to pay the nominee’s down-payment, to pay the nominee for the nominee’s participation, and to pay the mortgage for the first 12 months, after which each mortgage went into default. The indictment charges that Brooks‘ mortgage loan scheme involved 40 properties primarily located in the Dallas area and defrauded financial institutions in Dallas, San Antonio and Houston of approximately $20 million. The indictment also seeks the criminal forfeiture of approximately $127,000 in U.S. Currency as well as a 2007 21′ Liberator boat and trailer belonging to Brooks purchased with proceeds from the illegal scheme. The indictment also seeks a monetary judgement against all of the defendants in the amount of $1 million. Court summonses have been issued for these defendants. Conviction on this conspiracy charge is punishable by up to 30 years in federal prison

In a second indictment, a three-count indictment also returned by a San Antonio federal grand jury:

Bruce Irving Redfield, 54, San Antonio, Texas, is charged with two counts of mail fraud and one count of wire fraud based on an estimated $365,000 mortgage loan fraud scheme. The indictment alleges that in the spring of 2006, Redfield provided fraudulent documentation while soliciting a Houston mortgage broker for a $365,000 loan to purchase a San Antonio residence. The indictment further states that Redfield solicited the loan knowing that the actual purchase price for the residence was approximately $45,000 less than the loan amount. The indictment further alleges that Redfield received a kickback of $44,635.62 from the homebuilder after closing on the property. The residence was later foreclosed. Upon conviction, Redfield faces up to twenty years in federal prison per charge.

Finally, three San Antonio, Texas, residents have pleaded guilty and three other San Antonio residents are awaiting a July 19, 2010, jury selection date in connection with an indictment returned last December. Former mortgage broker Justin Zhu; Darnell Mason, owner of PLV Realty and Property Management, L.L.C.; and Diego Rodriguez face wire fraud charges based on an alleged mortgage fraud scheme. According to the indictment, Mason, through Zhu, recruited the other defendants including Rodriguez, Juan Solis, Jimmy Elizondo, and Eli Mendiola as straw purchasers for real estate properties he wanted to buy. Zhu paid the straw purchasers a kickback-usually between $1,500 and $3,000-for their individual roles in the fraudulent scheme. Authorities estimate that this mortgage loan scheme defrauded financial institutions in San Antonio of approximately $1 million. Upon conviction, Zhu, Mason, and Rodriguez each face up to 20 years in federal prison per charge. Solis, Elizondo, and Mendiola each face up to 20 years in federal prison after pleading guilty earlier this year to one count of conspiracy to commit wire fraud. No sentencing dates have been scheduled.

United States Attorney John E. Murphy; Ralph G. Diaz, Special Agent in Charge of the Federal Bureau of Investigation, San Antonio Division; and, William “Bill” Cotter, Acting Special Agent in Charge of the Internal Revenue Service-Criminal Investigation in San Antonio, announced that 29 people have been indicted in the Western District of Texas under “Operation Stolen Dreams”-a nationwide crackdown on mortgage fraud.

“FBI and it’s law enforcement partners will continue to pursue white collar criminals who pose a continued threat to our economy by undermining the mortgage industry. This ongoing crime problem is considered by the FBI to be a national security threat,” stated Ralph G. Diaz, Special Agent in Charge of the Federal Bureau of Investigation, San Antonio Division.

“These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. IRS CI is committed to pursuing individuals who create such havoc,” stated William “Bill” Cotter, Acting Special Agent in Charge of the Internal Revenue Service-Criminal Investigation in San Antonio.

“It is often said that home ownership is the American dream. Far too often these dreams are stolen and hopes are dashed through predatory schemes perpetrated by selfish and greedy fraudsters who victimize the innocent simply to enrich themselves. We will continue to investigate such fraudulent activities and aggressively prosecute those who unlawfully manipulate financial institutions,”

stated United States Attorney John E. Murphy.

These cases are being investigated by agents from the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. They are being prosecuted by Assistant United States Attorneys William R. Harris, James Blankinship and Tom McHugh.

Operation Stolen Dreams was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.

An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.

The Mortgage Bankers Association is reporting that 1 in 10 American households with a mortgage is at risk of losing its home, and the foreclosure crisis could worsen if jobs remain scarce.

The housing market is struggling even as mortgage rates fell to the lowest level in decades for the ninth time in 10 weeks.

Don’t just stand around without helping.  If you or someone you know is struggling with a mortgage payment due to job loss, medical conditions, divorce or just a bad loan please give them our info.

We can restructure their loan even if they can’t qualify for a refinance.

- The Bank Slayer

1 in 10 U.S. households at risk of losing their homes

By ALAN ZIBEL and CHRISTOPHER S. RUGABER Associated Press

Surprise, surprise, surprise. 

USA Today points out that Chase & Bank of America just don’t quite seem to know how to calculate three months.   It seems three is the same as five or six or NEVER!

Unfortunately, this is the norm and not the exception.   If your loan modification is going nowhere or your latest payment has been rejected then contact  professional to resolve the situation.  Be very aware that some of the mortgage servicers such as Flagstar, Wells Fargo & Ocwen are known for canceling your modification mid-stream and then setting the foreclosure sale date for the next month.

Also, make sure that your modification agreement doesn’t waiver future rights to resolve conflicts with your mortgage company.  Many times folks seek help after signing away their rights in a modification.  We recommend that every loan modification agreement be reviewed by an attorney.

The USA Today article is below.

- The Bank Slayer

Some 3-month mortgage modification trials dragging on

By Stephanie Armour, USA TODAY

	By Rick Bowmer, AP
Cancellations in the program are growing because of insufficient documentation from borrowers, missed payments, or because borrowers are found to earn too much to qualify, according to Treasury.

Bank of America (BAC) and JPMorgan Chase (JPM) service the mortgages for half the homeowners who have been awaiting decisions on permanent
mortgage modifications for three months or more, according to a government report.

Through July, the government’s mortgage-aid program had a backlog of 118,000 borrowers  whose trial plans have run at least six months —
three months past the typical duration for determining if they qualified for a permanent modification, the government said Friday. Bank of
America and JPMorgan Chase, the two biggest banks, account for about 59,000 of the cases.

HOUSING MARKET: Outlook remains dim
Under the government’s Home Affordable Modification Program (HAMP), borrowers are supposed to get permanent modifications if they
keep up their adjusted payments for a three-month trial.

But the program has been dogged by controversy.

Servicers blame delays on borrowers who don’t provide necessary documentation and on the government’s frequently changing requirements.
Borrowers complain that the servicers repeatedly lose the paperwork they send and don’t return calls.

Friday’s report said the number of borrowers who have been in trials for six months or more had dropped from 166,000 in June and that servicers
indicate decisions on those remaining should be made in August.

Bank of America expects to make decisions on most of them in August and September, says spokesman Rick Simon.

BofA’s total number of customers in trial modifications dropped from 121,000 in June to 85,000 in July as decisions were made on who
qualified for permanent modifications, he says.

JPMorgan Chase declined to comment on whether it will resolve all of the older trial modifications this month.

One note of caution for those readers in the Houston area.  We still have not found a bankruptcy attorney adept enough to run with Neil’s theories (and win).   There are some excellent BK attorneys in our area but thus far most of the good results we see are in State and Federal Courts cases we are tracking (without having to file BK in most cases).  i.e. using a  law firm like The Gore Law Firm that specializes in consumer/foreclosure defense but not bankruptcy.

If you are a BK attorney and/or know one that subscribes to Neil Garfield or O Max Gardner please contact me ASAP.

- The Bank Slayer

LivingLies UPDATED Plan of Engagement: What to Do

UPDATE: This is THE OUTLINE of a plan that is current in its evolution but by no means complete or the last word. It replaces the entry I made in February of this year. The assumption here is that even without taking mortgage foreclosure cases into consideration, the percentage of cases that actually go to trial is between 5%-15% depending upon how you categorize “cases.” On the other hand, if you are not prepared for trial and counting on settlement, your opposition will generally know it and have the upper hand in negotiating a settlement. They are going to play for keeps. You should too. Don’t assume that the note in front of you is the actual original. Close inspection often reveals it is a color copy.

And for heaven sake don’t stand there with your mouth hanging open when someone says you are looking for a free house. You are looking for justice. You had your purse snatched in this transaction, you know there is an obligation, but you also know that they didn’t perfect the security interest (not your fault) and they received multiple payments from multiple parties on these securitized loans. You want a FULL accounting of all such transactions to determine what balance is due after insurance payments, who is subrogated or substituted on claims, and an opportunity to negotiate a settlement or modification with someone who actually has advanced money on THIS transaction and can show it to be so.

WORD OF CAUTION: IF YOU ARE ALREADY IN PROCESS, YOU ARE REQUIRED TO ACT WITHIN THE TIMES SET FORTH BY STATE LAW, FEDERAL LAW, OR THE LAWS OF CIVIL PROCEDURE. FAILURE TO DO SO LEAVES YOU IN AN UPHILL BATTLE TO REVERSE ACTIONS ALREADY TAKEN. ON THE OTHER HAND ACTIONS ALREADY TAKEN “FIX” THE POSITION OF YOUR OPPOSITION, SINCE THEY CAN NO LONGER ASSERT CHANGES IN CREDITOR, LENDER OR TRUSTEE. THUS IT MIGHT BE EASIER, ACCORDING TO SOME SUCCESSFUL LITIGATORS OUT THERE, TO WAIT UNTIL THE SALE HAS OCCURRED AND THEN ATTACK IT AS A FRAUDULENT SALE, THAN TO TRY TO STOP IT WITH A TEMPORARY RESTRAINING ORDER ETC.

CONSIDER BANKRUPTCY, ESPECIALLY CHAPTER 13, WHERE THERE ARE MORE REMEDIES THAN YOU MIGHT THINK IF YOU FILL OUT YOUR SCHEDULES PROPERLY. WE ARE SEEING BETTER RESULTS IN SOME BANKRUPTCY COURTS THAN FEDERAL OR STATE CIVIL COURT PROCEEDINGS.

1. Get your act together, stop fighting amongst the members of your household and make a decision as to what you want to do — fight or flight?
2. GET SOME HELP NO MATTER WHAT YOU DECIDE. GET THE LOAN SPECIFIC TITLE SEARCH, GET A SECURITIZATION SEARCH, AND GET A LAWYER LICENSED IN THE COUNTY WHERE YOUR PROPERTY IS LOCATED AND MAKE SURE HE/SHE IS NOT STUCK ON THE PROPOSITION THAT YOU SHOULD LOSE.
3. If you choose flight, then by all means try the short-sale or jingle mail strategies that have been discussed on this blog. Do not try to make money on the short-sale, since nobody is going to give it to you. You can make a few dollars by riding out the time in foreclosure without making payments (and hopefully saving the money you would have paid) and by negotiating as high a price (a few thousand dollars)  as you can in a deal known as “cash for keys.” Even for this, you should employ the services of a local licensed attorney — at least for consultation. There are several short-sale options that have evolved. Google Edge Simonsen or Prime financial. I’ve been working on a short-sale-leaseback option that seems to be picking up steam.
4. STRATEGIC DEFAULTS RISING: More and more people of all walks of life including those that have some considerable wealth, are walking away from these properties that were the subject of transactions in which the presumed value of the property was preposterous. This is an option that scare the hair off the pretender lenders because it pouts the power in your hands. They in turn are trying to scare the public with threats of deficiency judgments etc and collections. It is doubtful that many or indeed any deficiency judgments would be awarded, even if they were allowed. But in many cases, particularly in non-judicial states, deficiency judgments are NOT allowed. A version of the strategic default that many people like is to stay as long as possible without paying and then walk. If you are smart about it, you raise your own capital by socking away the payments you would have made.
5. If the decision is fight — then the second decision to make is to answer the question “fight for what?” If you want to buy time, there are many strategies that can be employed, which basically are the same strategies as those used if you are fighting for real. And you might be surprised by the result. Some people get a year or two or even more without payments. You are going to take a FICO hit anyway so why not put some cash in your pocket while you hold back payments.
6. AVOID crazy deals where you give your property or share your property with a stranger. If you persist in engaging such people at least call references and make sure the references are real. Ask questions about their situation and how they feel it worked out to them. Get as much detail as possible.
7. AVOID mortgage modification firms. If you persist in engaging such people at least call references and make sure the references are real. Ask questions about their situation and how they feel it worked out to them. Get as much detail as possible. My opinion is that if they don’t pursue an aggressive litigation strategy the statistical probability of you accomplishing anything by going to them is near zero.
8. In all cases, if at all possible:

(a) Get all your information together along with a short executive summary of your “journal” (even if you create the journal now). That means all closing documents, any information you have on title, recording in the county recorder’s office, the names of all parties who were “at” closing (that means not just the actual people who were there, but he names of companies that were represented or mentioned at closing). Also, include in the file any notices of default(NOD) or notice of Trustee sale (NOTS) or summons from a court.

(b) Get a MORTGAGE ANALYSIS of the loan transaction itself. THIS INVOLVES THREE PARTS — (1) LOAN SPECIFIC TITLE SEARCH AND CHAIN OF TITLE, EXAMINATION OF THE DOCUMENTS, SIGNATURES, AND DATES OF DOCUMENTS PURPORTING TO BE REAL, (2) SECURITIZATION SEARCH THAT CHASES THE MONEY TRAIL AND WILL PROBABLY LEAD YOU TO SOME IMPORTANT ISSUES LIKE THE VERY EXISTENCE OF THE “TRUST” ASSERTING IT HAS THE RIGHT TO FORECLOSE AS WELL AS MONETARY ISSUES SUCH AS APPLICATION OR ALLOCATION OF PAYMENTS RECEIVED BY THE INVESTOR WHO ADVANCED THE FUNDS FOR THE LOAN AND (3) COMMENTARY AND ANALYSIS THAT IS USABLE BY AN ATTORNEY IN COURT SUCH THAT HE/SHE CAN ARGUE THAT THERE ARE QUESTIONS OF FACT ENTITLING YOU TO PURSUE DISCOVERY. IF YOU WIN THAT POINT YOU ARE ON YOUR WAY TO A SUCCESSFUL CONCLUSION. BUT NOBODY IS GOING TO MAKE IT EASY FOR YOU.

(c) Who is your creditor? The TILA Audit alone does nothing without taking further steps. The Trustee’s “Take-down” report should be demanded in non-judicial states and if the house is in foreclosure, your written objection should be sent to the Trustee.

(d) If someone tells you they are “pretty sure” or can “definitely”  stop your foreclosure or promises a favorable outcome, and asks for money up front, then run like hell. This is a scam. IF THEY TELL YOU THEY WILL DO WHAT THEY CAN, AND THEY GIVE YOU SOME EXAMPLES OF WHAT THEY WILL BE DOING FOR YOU THEN LISTEN AND GET REFERENCES.

(e) Only a Court order stops foreclosure or a Trustee Sale. No letter of any form or substance will stop it unless the other side is intimidated into stopping the action, which sometimes happens when they know their paperwork is “out of order.”

(f) Get a Forensic Mortgage Analysis Report OR AN EXPERT DECLARATION that summarizes in a few pages the potential issues that you should be investigating AND WHICH LENDS SUPPORT TOY OUR DENIAL OF THE DEFAULT, DENIAL OF THE RIGHT OF THE OPPOSING PARTY TO CLAIM A DEFAULT, DENIAL OF THE RIGHT OF THE OPPOSING PARTY TO FORECLOSE.

(g) Get an Expert Declaration that uses the forensic report and the expert opinions of specific experts (like appraisers, title analysts) and which identifies the probable chain of securitization and the money trail. You’ll be surprised when you find out there were two yield spread premiums not disclosed to you and that they can total as much or more than the “loan” itself. GET EXPERT OPINION ON PROBABLE DAMAGES INCLUDING RETURN OF UNDISCLOSED FEES, INTEREST, ETC. (SEE LAWYER’S WORKBOOK FROM GARFIELD CONTINUUM).

(h) Send the Forensic Report and expert declaration to the known parties, with an instruction to forward it to all other parties known to them in the securitization chain. Include a Qualified Written Request(QWR) AND a Debt Validation Letter(DVL) (which is really a debt verification letter). Don’t be surprised if your pretender lenders will come back and tell you your QWR is defective or improper in some way, but that’s OK, you have followed statutory procedure and they didn’t. With the help of an attorney and with consultation with your experts decide on what resolution you will demand — damages, rescission, etc.

(i) Don’t believe a word about modification. Practically none of them go through. They are leading you into default so they can collect more service fees, and get money out of you that you think is stopping the foreclosure.

(j) Don’t believe a word that any pretender lender or representative says or represents, even if they are a lawyer, particularly verbal communications that they refuse to confirm in writing. Challenge everything.

(k) Don’t accept any document as authentic. Many documents are being fabricated or forged, including affidavits. This is why you need a lawyer and an expert and a Forensic mortgage analysis — to determine what documents and parties are suspect and what you should be asking for in discovery and in the QWR and DVL.

(l) YOUR FIRST STRATEGY IS TO RAISE NOT PROVE ISSUES OF FACT. BY PRODUCING A FORENSIC REPORT AND EXPERT DECLARATION, NEITHER YOU NOR YOUR LAWYER NEEDS TO ACQUIRE EXPERTISE IN SECURITIZED LOANS. YOU ONLY NEED TO RAISE THE ISSUE OF FACT BY SHOWING THE COURT THAT YOU HAVE EXPERTS WHO SAY THE PRETENDER LENDERS/TRUSTEES ETC. ARE NOT CREDITORS AND NOT AUTHORIZED AGENTS WORKING FOR THE CREDITORS. THEY SAY THEY ARE IN FACT THE CREDITORS OR HAVE SOME AUTHORITY GRANTED BY AN ALLEGED CREDITOR. IT IS NOT FOR THE COURT TO ACCEPT ONE VIEW OR THE OTHER, BUT RATHER TO ALLOW DISCOVERY AND AN EVIDENTIARY HEARING ON THE ISSUE OF STANDING (SEE MANY RECENT CASES REPORTED SINCE FEBRUARY ON THIS BLOG).

(m) Be very aggressive on discovery. They will argue that even if they are not the creditor and even if they refuse to disclose the identity of the creditor, they are still entitled to disclose because they are the holder of the note and/or mortgage. Your argument will probably be that they still have a duty to disclose the identity of the creditor and the source of the their authority to represent the creditor, along with proof that the creditor has received notice of these proceedings.

Sadly this is a harder fight in Texas compared to other states.

Whether you agree with the excellent article below or not, states such as Texas with primarily a NON-JUDICIAL foreclosure process (except cash out refinances and home equity lines of credit), don’t provide homeowners with as many opportunities to defend their home or question the foreclosure process.

What do I mean?  For example, in many states answering a foreclosure lawsuit with a response that MERS doesn’t have the right to foreclosure is straight forward.  But in Texas most foreclosures never go to court.  The mortgage company simply declares you in default and starts a process that can be over within 60 days and your home is gone with NO RIGHT OF REDEMPTION!!

Additionally, the Texas Property PERMITS a “book entry system” to participate in the foreclosure process.     Anyone want to guess the definition of the “book entry system” – “means a national book entry system for registering a beneficial interest in a security instrument that acts as a nominee for the grantee, beneficiary, owner, or holder of the security instrument and its successors and assigns.”   READ = MERS.

If you are facing a foreclosure situation you should seek experienced local assistance ASAP.

- The Bank Slayer

Enjoy the article below…

Ellen Brown
Web of Debt
August 20, 2010

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles—and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.

Victims of predatory lending could end up owning their homes free and clear—while the financial industry could end up skewered on its own sword.

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

That means hordes of victims of predatory lending could end up owning their homes free and clear—while the financial industry could end up skewered on its own sword.

California Precedent

The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). (For more on these earlier cases, see here, here and here.) The court concluded:

Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:

This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.

What Could This Mean for Homeowners?

Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS’ technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.

An August 2010 article in Mother Jones titled “Fannie and Freddie’s Foreclosure Barons” exposes a widespread practice of “foreclosure mills” in backdating assignments after foreclosures have been filed. Not only is this perjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.

In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders’ case in 2004. Five years later, she says, some of the homeowners she’s helped are still in their homes. According to a Huffington Post article titled “‘Produce the Note’ Movement Helps Stall Foreclosures”:

Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action ‘quiets’ all other claims). Charney says she’s helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.

Criminal Charges?

Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used “the artifice of MERS to sabotage the judicial process to the detriment of borrowers;” that “to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;” that the scheme depended on “the MERS artifice and the ability to generate any necessary ‘assignment’ which flowed from it;” and that “by engaging in a pattern of racketeering activity, specifically ‘mail or wire fraud,’ the Defendants . . . participated in a criminal enterprise affecting interstate commerce.”

Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates, filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.

By Their Own Sword: MERS’ Role in the Financial Crisis

MERS is, according to its website, “an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.” Or as Karl Denninger puts it, “MERS’ own website claims that it exists for the purpose of circumventing assignments and documenting ownership!”

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MERS was developed in the early 1990s by a number of financial entities, including Bank of America, Countrywide, Fannie Mae, and Freddie Mac, allegedly to allow consumers to pay less for mortgage loans. That did not actually happen, but what MERS did allow was the securitization and shuffling around of mortgages behind a veil of anonymity. The result was not only to cheat local governments out of their recording fees but to defeat the purpose of the recording laws, which was to guarantee purchasers clean title. Worse, MERS facilitated an explosion of predatory lending in which lenders could not be held to account because they could not be identified, either by the preyed-upon borrowers or by the investors seduced into buying bundles of worthless mortgages. As alleged in a Nevada class action called Lopez vs. Executive Trustee Services, et al.:

Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. Before MERS, it would not have been possible for the Defendant banks and AIG to conceal from government regulators the extent of risk of financial losses those entities faced from the predatory origination of residential loans and the fraudulent re-sale and securitization of those otherwise non-marketable loans. Before MERS, the actual beneficiary of every Deed of Trust on every parcel in the United States and the State of Nevada could be readily ascertained by merely reviewing the public records at the local recorder’s office where documents reflecting any ownership interest in real property are kept….

After MERS, . . . the servicing rights were transferred after the origination of the loan to an entity so large that communication with the servicer became difficult if not impossible …. The servicer was interested in only one thing – making a profit from the foreclosure of the borrower’s residence – so that the entire predatory cycle of fraudulent origination, resale, and securitization of yet another predatory loan could occur again. This is the legacy of MERS, and the entire scheme was predicated upon the fraudulent designation of MERS as the ‘beneficiary’ under millions of deeds of trust in Nevada and other states.

Axing the Bankers’ Money Tree

If courts overwhelmed with foreclosures decide to take up the cause, the result could be millions of struggling homeowners with the banks off their backs, and millions of homes no longer on the books of some too-big-to-fail banks. Without those assets, the banks could again be looking at bankruptcy. As was pointed out in a San Francisco Chronicle article by attorney Sean Olender following the October 2007 Boyko [pdf] decision:

The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

. . . The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail . . . .

Nationalization of these giant banks might be the next logical step—a step that some commentators said should have been taken in the first place. When the banking system of Sweden collapsed following a housing bubble in the 1990s, nationalization of the banks worked out very well for that country.

The Swedish banks were largely privatized again when they got back on their feet, but it might be a good idea to keep some banks as publicly-owned entities, on the model of the Commonwealth Bank of Australia. For most of the 20th century it served as a “people’s bank,” making low interest loans to consumers and businesses through branches all over the country.

With the strengthened position of Wall Street following the 2008 bailout and the tepid 2010 banking reform bill, the U.S. is far from nationalizing its mega-banks now. But a committed homeowner movement to tear off the predatory mask called MERS could yet turn the tide. While courts are not likely to let 62 million homeowners off scot free, the defect in title created by MERS could give them significant new leverage at the bargaining table.

I watched the video on this from Georgia.  Seriously, a Taser shot on the wife? I saw this lady.  It wouldn’t take more than a single officer or two to control this lady.

Not only did she get a Taser shot to the gut but all their belongings were thrown out on the front lawn.

These banks mean business and they’re packing heat.

The press piece on this is below.

- The Bank Slayer

Couple in Duluth SWAT Standoff Speaks

By: MYFOXATLANTA STAFF/myfoxatlanta

DULUTH, Ga. – A couple who lost their home to foreclosure and spent hours locked in a SWAT standoff with police when they refused to leave, talked about the situation Thursday.

The Grabers said they were living their version of the American dream. The Grabers said they owned their home for more than a decade when Howard Graber suffered a massive stroke. The Grabers said that’s when everything changed.

On Wednesday, Gwinnett County deputies went to the Graber’s Davenport Park Lane home to serve an eviction notice after the bank had foreclosed on the property. It turned into a four hour standoff and SWAT teams were called in.

“I was afraid for my life. I was afraid for my disabled husband’s life. There’s no way I was going to go to the front door,” said Noya Lee Graber.

Police eventually stormed the house. Howard Graber spent the night in jail.

“They said, ‘Taser her! Taser her now!’ and I got tasered right on my stomach,” said Noya Lee Graber.

The Grabers said their troubles started more than a year ago when Howard Graber had a massive stroke.

Howard Graber made a good living working with computers, but now he can no longer work and the bills have piled up.

“Sometimes the problem is I twist the words and forget what I’m supposed to say,” said Howard Graber.

“He’s the first one his family to own a home so it meant a lot to him to be able to buy our first home,” Noya Lee Graber.

The plan calls for $2 billion to be directed to the Administration’s list of the “hardest hit areas”; while HUD is going to chip in another $1 billion to “other areas”.

The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.

Yes, you heard it right you can now apply to get up to two years worth of “free” money.

Of course, all of the details are not in place but what we know thus far is there are certain stipulations to qualify including but I’m sure not limited to:

1. Be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years;
2. Have a mortgaged property that is the principal residence of the borrower, and eligible borrowers may not own a second home;
3. Demonstrate a good payment record prior to the event that produced the reduction of income.

Oh, one other noteworthy item…Texas is not on the “hardest hit list” so don’t bother applying.

Maybe we’ll get lucky and end up on the “other areas” list for which HUD is accepting applications.

Below is the official press release from HUD.  Take a peek at which areas are getting our tax dollars.

- The Bank Slayer

WASHINGTON – The Obama Administration today announced additional support to help homeowners struggling with unemployment through two targeted foreclosure-prevention programs. Through the existing Housing Finance Agency (HFA) Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund), the U.S. Department of the Treasury will make $2 billion of additional assistance available for HFA programs for homeowners struggling to make their mortgage payments due to unemployment. Additionally, the U.S. Department of Housing and Urban Development (HUD) will soon launch a complementary $1 billion Emergency Homeowners Loan Program to provide assistance – for up to 24 months – to homeowners who are at risk of foreclosure and have experienced a substantial reduction in income due to involuntary unemployment, underemployment, or a medical condition.

“We remain committed to helping struggling homeowners, and this program will provide additional assistance to states hit hardest by unemployment,” said Assistant Secretary for Financial Stability Herb Allison. “This is part of the Administration’s comprehensive housing policy that has helped to stabilize a fragile housing market and allows responsible homeowners the chance to reduce their monthly mortgage payments to affordable levels.”

“HUD’s new Emergency Homeowner Loan Program will build on Treasury’s Hardest Hit initiative by targeting assistance to struggling unemployed homeowners in other hard hit areas to help them avoid preventable foreclosures,” said Bill Apgar, HUD Senior Advisor for Mortgage Finance. “Together, these initiatives represent a combined $3 billion investment that will ultimately impact a broad group of struggling borrowers across the country and in doing so further contribute to the Administration’s efforts to stabilize housing markets and communities across the country.”

Hardest Hit Fund

President Obama first announced the Hardest Hit Fund in February 2010 to allow states hit hard by the economic downturn flexibility in determining how to design and implement programs to meet the local challenges homeowners in their state are facing.

Under the additional assistance announced today, states eligible to receive support have all experienced an unemployment rate at or above the national average over the past 12 months. Each state will use the funds for targeted unemployment programs that provide temporary assistance to eligible homeowners to help them pay their mortgage while they seek re-employment, additional employment or undertake job training.

States that have already benefited from previously announced assistance under the Hardest Hit Fund may use these additional resources to support the unemployment programs previously approved by Treasury or they may opt to implement a new unemployment program. States that do not currently have Hardest Hit Fund unemployment programs must submit proposals to Treasury by September 1, 2010 that, within established guidelines, meet the distinct needs of their state.

The states eligible to receive funds through this additional assistance, along with allocations based on their population sizes, are as follows:

HUD Emergency Homeowners Loan Program

This new program will complement Treasury’s Hardest Hit Fund by providing assistance to homeowners in hard hit local areas that may not be included in the hardest hit target states. Those areas are still being determined.

The program will work through a variety of state and non-profit entities and will offer a declining balance, deferred payment “bridge loan” (zero percent interest, non-recourse, subordinate loan) for up to $50,000 to assist eligible borrowers with payments on their mortgage principal, interest, mortgage insurance, taxes and hazard insurance for up to 24 months.

Under the program, eligible borrowers must:

1. Be at least three months delinquent in their payments and have a reasonable likelihood of being able to resume repayment of their mortgage payments and related housing expenses within two years;
2. Have a mortgage property that is the principal residence of the borrower, and eligible borrowers may not own a second home;
3. Demonstrate a good payment record prior to the event that produced the reduction of income.

HUD will announce additional details, including the targeted communities and other program specifics when the program is officially launched in the coming weeks.

Whether or not the borrower chooses to lie about their own income and/or buy more house then they can afford is a separate discussion.  Sure, borrowers want to have as much house as possible and yes, many borrowers focused only on monthly payments instead of the overall cost of the loan and house.   That said, the mortgage broker had a duty and an obligation to properly represent the borrowers financial picture.

In the press release below www.mortgagefraudblog.com, the broker, not the borrower, was the one to blame.

If I had a nickel for every time a mortgage broker told us that it was ALL THE BORROWERS FAULT, I’d be gazillionaire.

More and more frequently we are seeing patterns of deception at the broker level.  Greed and deception became just another part of the game for some of these clowns.

- The Bank Slayer

Million Dollar Judgment Issued Against Mortgage Brokerage

Access Mortgage Company, Inc. (Access Mortgage), Seattle, Washington, a mortgage brokerage, has been order by an Ada County, Idaho, judge to pay more than $1 million in penalties and restitution for violating Idaho laws relating to mortgage and financial fraud.

The district judge found that Access Mortgage had engaged in numerous violations of law, to include submitting a false mortgage loan application to a lender, violating an order previously issued against the company by the Department of Finance, misrepresenting information the company provided to the department, refusing to provide the department with information requested during an investigation of the company’s activities in Idaho, originating mortgage loans in Idaho through unlicensed mortgage loan originators on 405 occasions throughout the state with concentrations in Boise and northern Idaho, and failing to provide an elderly Idaho couple with required notices concerning closing costs the couple would be incurring on a mortgage loan obtained for them by Access Mortgage. In a related order, the district judge found that the company’s violations were “aggravated and serious.”

The judgment included a permanent injunction against further violations of the Idaho Residential Mortgage Practices Act and the Idaho Financial Fraud Prevention Act. Moreover, the judgment included a penalty amount of $1,055,000 entered against Access Mortgage, and ordered the company to pay restitution in the amount of $27,322.18 on behalf of the Idaho couple injured by the company’s violations.

Gavin Gee, Director of the Idaho Department of Finance, said he was pleased with the outcome of the lawsuit. “The court’s findings and entry of a million dollar plus money judgment against Access Mortgage sends a clear message to the mortgage industry that financial fraud and unlawful practices will not be tolerated in Idaho.”