Home Solution Counselors» Chase

MERS owns your mortgage or not?

admin — Tue, 08 Mar 2011 17:32:35 +0000

MERS is the bane of homeowners who simply want to know who really owns their loan and who might really have their Promissory Note.

The article below from the The New York Times highlights the flaws and misconduct that is going on behind the scenes and helps explain (in part) why you can’t easily determine who owns your mortgage.

For example,

MERS’ board gave its senior vice president, William Hultman, the rather extraordinary power to deputize an unlimited number of “vice presidents” and “assistant secretaries” drawn from the ranks of the mortgage industry.

The “nomination” process was near instantaneous. A bank entered a name into MERS’s Web site, and, in a blink, MERS produced a “certifying resolution,” signed by Mr. Hultman. The corporate seal was available to those deputies for $25.

Can you the homeowner log onto MERS and see who they claim owns your loan. Sure –> Go HERE.

The reality turns out to be a lot messier. Federal bankruptcy courts and state courts have found that MERS and its member banks often confused and misrepresented who owned mortgage notes. In thousands of cases, they apparently lost or mistakenly destroyed loan documents.

Destroyed? Huh?

…not even the mortgage giant Fannie Mae, an investor in MERS, depends on it these days.

“We would never rely on it to find ownership,” says Janis Smith, a Fannie Mae spokeswoman, noting it has its own records.

If you want to negotiate from a position of strength you will need to file suit against your lender and force them to come forward with proper authority. Don’t let them hide behind MERS and its smoke screen.

Click here to see & hear from one of the attorneys we recommend from The Gore Law Firm as he speaks about MERS during a live interview on CBS Radio.

MERS discussion with Randall Macchi from The Gore Law Firm

- The Bank Slayer

MERS? It May Have Swallowed Your Loan

By MICHAEL POWELL and GRETCHEN MORGENSON at The New York Times

FOR more than a decade, the American real estate market resembled an overstuffed novel, which is to say, it was an engrossing piece of fiction.

Mortgage brokers hip deep in profits handed out no-doc mortgages to people with fictional incomes. Wall Street shopped bundles of those loans to investors, no matter how unappetizing the details. And federal regulators gave sleepy nods.

That world largely collapsed under the weight of its improbabilities in 2008.

But a piece of that world survives on Library Street in Reston, Va., where an obscure business, the MERS Corporation, claims to hold title to roughly half of all the home mortgages in the nation — an astonishing 60 million loans.

Never heard of MERS? That’s fine with the mortgage banking industry—as MERS is starting to overheat and sputter. If its many detractors are correct, this private corporation, with a full-time staff of fewer than 50 employees, could turn out to be a very public problem for the mortgage industry.

Judges, lawmakers, lawyers and housing experts are raising piercing questions about MERS, which stands for Mortgage Electronic Registration Systems, whose private mortgage registry has all but replaced the nation’s public land ownership records. Most questions boil down to this:

How can MERS claim title to those mortgages, and foreclose on homeowners, when it has not invested a dollar in a single loan?

And, more fundamentally: Given the evidence that many banks have cut corners and made colossal foreclosure mistakes, does anyone know who owns what or owes what to whom anymore?

The answers have implications for all American homeowners, but particularly the millions struggling to save their homes from foreclosure. How the MERS story plays out could deal another blow to an ailing real estate market, even as the spring buying season gets under way.

MERS has distanced itself from the dubious behavior of some of its members, and the company itself has not been accused of wrongdoing. But the legal challenges to MERS, its practices and its records are mounting.

The Arkansas Supreme Court ruled last year that MERS could no longer file foreclosure proceedings there, because it does not actually make or service any loans. Last month in Utah, a local judge made the no-less-striking decision to let a homeowner rip up his mortgage and walk away debt-free. MERS had claimed ownership of the mortgage, but the judge did not recognize its legal standing.

“The state court is attracted like a moth to the flame to the legal owner, and that isn’t MERS,” says Walter T. Keane, the Salt Lake City lawyer who represented the homeowner in that case.

And, on Long Island, a federal bankruptcy judge ruled in February that MERS could no longer act as an “agent” for the owners of mortgage notes. He acknowledged that his decision could erode the foundation of the mortgage business.

But this, Judge Robert E Grossman said, was not his fault.

“This court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country,” he wrote, “that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law.”

With MERS under scrutiny, its chief executive, R. K. Arnold, who had been with the company since its founding in 1995, resigned earlier this year.

A BIRTH certificate, a marriage license, a death certificate: these public documents note many life milestones.

For generations of Americans, public mortgage documents, often logged in longhand down at the county records office, provided a clear indication of homeownership.

But by the 1990s, the centuries-old system of land records was showing its age. Many county clerk’s offices looked like something out of Dickens, with mortgage papers stacked high. Some clerks had fallen two years behind in recording mortgages.

For a mortgage banking industry in a hurry, this represented money lost. Most banks no longer hold onto mortgages until loans are paid off. Instead, they sell the loans to Wall Street, which bundles them into investments through a process known as securitization.

MERS, industry executives hoped, would pull record-keeping into the Internet age, even as it privatized it. Streamlining record-keeping, the banks argued, would make mortgages more affordable.

But for the mortgage industry, MERS was mostly about speed — and profits. MERS, founded 16 years ago by Fannie Mae, Freddie Mac and big banks like Bank of America and JPMorgan Chase, cut out the county clerks and became the owner of record, no matter how many times loans were transferred. MERS appears to sell loans to MERS ad infinitum.

This high-speed system made securitization easier and cheaper. But critics say the MERS system made it far more difficult for homeowners to contest foreclosures, as ownership was harder to ascertain.

MERS was flawed at conception, those critics say. The bankers who midwifed its birth hired Covington & Burling, a prominent Washington law firm, to research their proposal. Covington produced a memo that offered assurances that MERS could operate legally nationwide. No one, however, conducted a state-by-state study of real estate laws.

“They didn’t do the deep homework,” said an official involved in those discussions who spoke on condition of anonymity because he has clients involved with MERS. “So as far as anyone can tell their real theory was: ‘If we can get everyone on board, no judge will want to upend something that is reasonable and sensible and would screw up 70 percent of loans.’ ”

County officials appealed to Congress, arguing that MERS was of dubious legality. But this was the 1990s, an era of deregulation, and the mortgage industry won.

“We lost our revenue stream, and Americans lost the ability to immediately know who owned a piece of property,” said Mark Monacelli, the St. Louis County recorder in Duluth, Minn.

And so MERS took off. Its board gave its senior vice president, William Hultman, the rather extraordinary power to deputize an unlimited number of “vice presidents” and “assistant secretaries” drawn from the ranks of the mortgage industry.

The “nomination” process was near instantaneous. A bank entered a name into MERS’s Web site, and, in a blink, MERS produced a “certifying resolution,” signed by Mr. Hultman. The corporate seal was available to those deputies for $25.

As personnel policies go, this was a touch loose. Precisely how loose became clear when a lawyer questioned Mr. Hultman in April 2010 in a lawsuit related to its foreclosure against an Atlantic City cab driver.

How many vice presidents and assistant secretaries have you appointed? the lawyer asked.

“I don’t know that number,” Mr. Hultman replied.

Approximately?

“I wouldn’t even be able to tell you, right now.”

In the thousands?

“Yes.”

Each of those deputies could file loan transfers and foreclosures in MERS’s name. The goal, as with almost everything about the mortgage business at that time, was speed. Speed meant money.

ALAN GRAYSON has seen MERS’s record-keeping up close. From 2009 until this year, he served as the United States representative for Florida’s Eighth Congressional District — in the Orlando area, which was ravaged by foreclosures. Thousands of constituents poured through his office, hoping to fend off foreclosures. Almost all had papers bearing the MERS name.

“In many foreclosures, the MERS paperwork was squirrelly,” Mr. Grayson said. With no real legal authority, he says, Fannie and the banks eliminated the old system and replaced it with a privatized one that was unreliable.

A spokeswoman for MERS declined interview requests. In an e-mail, she noted that several state courts have ruled in MERS’s favor of late. She expressed confidence that MERS’s policies complied with state laws, even if MERS’s members occasionally strayed.

“At times, some MERS members have failed to follow those procedures and/or established state foreclosure rules,” the spokeswoman, Karmela Lejarde, wrote, “or to properly explain MERS and document MERS relationships in legal pleadings.”

Such cases, she said, “are outliers, reflecting case-specific problems in process, and did not repudiate the MERS business model.”

MERS’s legal troubles, however, aren’t going away. In August, the Ohio secretary of state referred to federal prosecutors in Cleveland accusations that notaries deputized by MERS were signing hundreds of documents without any personal knowledge of them. The attorney general of Massachusetts is examining a complaint by a county registrar that MERS owes the state tens of millions of dollars in unpaid fees.

As far back as 2001, Ed Romaine, the clerk for Suffolk County, on eastern Long Island, refused to register mortgages in MERS’s name, partly because of complaints that the company’s records didn’t square with public ones. The state Court of Appeals later ruled that he had overstepped his powers.

But Judith S. Kaye, the state’s chief judge at the time, filed a partial dissent. She worried that MERS, by speeding up property transfers, was pouring oil on the subprime fires. The MERS system, she wrote, ill serves “innocent purchasers.”

“I was trying to say something didn’t smell right, feel right or look right,” Ms. Kaye said in a recent interview.

Little about MERS was transparent. Asked as part of a lawsuit against MERS in September 2009 to produce minutes about the formation of the corporation, Mr. Arnold, the former C.E.O., testified that “writing was not one of the characteristics of our meetings.”

MERS officials say they conduct audits, but in testimony could not say how often or what these measured. In 2006, Mr. Arnold stated that original mortgage notes were held in a secure “custodial facility” with “stainless steel vaults.” MERS, he testified, could quickly produce every one of those files.

As for homeowners, Mr. Arnold said they could log on to the MERS system to identify their loan servicer, who, in turn, could identify the true owner of their mortgage note. “The servicer is really the best source for all that information,” Mr. Arnold said.

The reality turns out to be a lot messier. Federal bankruptcy courts and state courts have found that MERS and its member banks often confused and misrepresented who owned mortgage notes. In thousands of cases, they apparently lost or mistakenly destroyed loan documents.

The problems, at MERS and elsewhere, became so severe last fall that many banks temporarily suspended foreclosures.

Some experts in corporate governance say the legal furor over MERS is overstated. Others describe it as a useful corporation nearly drowning in a flood tide of mortgage foreclosures. But not even the mortgage giant Fannie Mae, an investor in MERS, depends on it these days.

“We would never rely on it to find ownership,” says Janis Smith, a Fannie Mae spokeswoman, noting it has its own records.

Apparently with good reason. Alan M. White, a law professor at the Valparaiso University School of Law in Indiana, last year matched MERS’s ownership records against those in the public domain.

The results were not encouraging. “Fewer than 30 percent of the mortgages had an accurate record in MERS,” Mr. White says. “I kind of assumed that MERS at least kept an accurate list of current ownership. They don’t. MERS is going to make solving the foreclosure problem vastly more expensive.”

THE Sarmientos are one of thousands of American families who have tried to pierce the MERS veil.

Several years back, they bought a two-family home in the Greenpoint section of Brooklyn for $723,000. They financed the purchase with two mortgages from Lend America, a subprime lender that is now defunct.

But when the recession blew in, Jose Sarmiento, a chef, saw his work hours get cut in half. He fell behind on his mortgages, and MERS later assigned the loans to U.S. Bank as a prelude to filing a foreclosure motion.

Then, with the help of a lawyer from South Brooklyn Legal Services, Mr. Sarmiento began turning over some stones. He found that MERS might have violated tax laws by waiting too long before transferring his mortgage. He also found that MERS could not prove that it had transferred both note and mortgage, as required by law.

One might argue that these are just legal nits. But Mr. Sarmiento, 59, shakes his head. He is trying to work out a payment plan through the federal government, but the roadblocks are many. “I’m tired; I’ve been fighting for two years already to save my house,” he says. “I feel like I never know who really owns this home.”

Officials at MERS appear to recognize that they are swimming in dangerous waters. Several federal agencies are investigating MERS, and, in response, the company recently sent a note laying out a raft of reforms. It advised members not to foreclose in MERS’s name. It also told them to record mortgage transfers in county records, even if state law does not require it.

MERS will no longer accept unverified new officers. If members ignore these rules, MERS says, it will revoke memberships.

That hasn’t stopped judges from asking questions of MERS. And few are doing so with more puckish vigor than Arthur M. Schack, a State Supreme Court judge in Brooklyn.

Judge Schack has twice rejected a foreclosure case brought by Countrywide Home Loans, now part of Bank of America. He had particular sport with Keri Selman, who in Countrywide’s court filings claimed to hold three jobs: as a foreclosure specialist for Countrywide Home Loans, as a servicing agent for Bank of New York and as an assistant vice president of MERS. Ms. Selman, the judge said, is a “milliner’s delight by virtue of the number of hats that she wears.”

At heart, Judge Schack is scratching at the notion that MERS is a legal fiction. If MERS owned nothing, how could it bounce mortgages around for more than a decade? And how could it file millions of foreclosure motions?

These cases, Judge Schack wrote in February 2009, “force the court to determine if MERS, as nominee, acted with the utmost good faith and loyalty in the performance of its duties.”

The answer, he strongly suggested, was no.

Chase stole mortgage money and foreclosed on troops

admin — Mon, 17 Jan 2011 21:23:58 +0000

If you are a REALTOR working with a homeowner who is in the military and J.P. Morgan Chase is the mortgage servicer then get ready to rumble. If you are not taking advantage and leveraging the Servicemembers Civil Relief Act (SCRA) then you are trying to do your job with a knife while your enemy has a machine gun.

Specifically, if the short sale you were working was lost to foreclosure or the unpaid balance is spiraling out of control, thereby making it nearly impossible to close out the short sale, or maybe making what was a retail sales transaction into a short sale transaction then it is worth auditing the mortgage.

While there is no guarantee the foreclosure sale will be rescinded, at a minimum you can let your “previous” client know about Chase’s misdeeds and alert them to their rights.

If you are struggling with a short sale because the home is facing foreclosure then seek immediate legal assistance with a local and reputable law firm. We work with various law firms that specialize in foreclosure defense and/or predatory lending and can refer you at no cost to local counsel in several states.

While our troops march against the enemy, the mortgage servicers march on their homes. This is sad but true.

The video from the Today show is here…

NBC – Chase overcharged Troops

- The Bank Slayer

No. 2 bank overcharged troops on mortgages

NBC News exclusive: JPMorgan Chase also improperly foreclosed on homes

“We now have a dedicated team in place devoted to servicing home loans for military personnel —the members of our military deserve nothing less. We welcome the opportunity to talk to Captain Rowles and others who would like to discuss their accounts,” she added.

By Lisa Myers and Sarah Heidarpour

NBC News

One of the nation’s biggest banks — JP Morgan Chase — admits it has overcharged several thousand military families for their mortgages, including families of troops fighting in Afghanistan. The bank also tells NBC News that it improperly foreclosed on more than a dozen military families.

The admissions are an outgrowth of a lawsuit filed by Marine Capt. Jonathan Rowles. Rowles is the backseat pilot of an F/A 18 Delta fighter jet and has served the nation as a Marine for five years. He and his wife, Julia, say they’ve been battling Chase almost that long.

The dispute apparently caused the bank to review its handling of all mortgages involving active-duty military personnel. Under a law known as the Servicemembers Civil Relief Act (SCRA), active-duty troops generally get their mortgage interest rates lowered to 6 percent and are protected from foreclosure. Chase now appears to have repeatedly violated that law, which is designed to protect troops and their families from financial stress while they’re in harm’s way.

A Chase official told NBC News that some 4,000 troops may have been overcharged. What’s more, the bank discovered it improperly foreclosed on the homes of 14 military families.

“We are deeply appreciative of those who fight to protect our country and Chase funds a number of programs that provide benefits to military personnel and veterans, and while any customer mistake is regrettable, we feel particularly badly about the mistakes we made here,” Chase chief communications officer Kristin Lemkau said in a statement to NBC News.

She said that beginning this week Chase will be mailing a total of about $2 million in refunds to families that may have been overcharged. She says most of the families improperly foreclosed on have gotten or will get their homes back. A bank official described what happened here as “grim,” but emphasized the mistakes were inadvertent, not malicious.

The news comes as millions of Americans are struggling to keep their homes. Banks have come under fire for allegedly improperly foreclosing on homes across the country.

JP Morgan Chase had over $2.14 trillion in total assets as of September, second only to Bank of America Corp., which had $2.34 trillion.

The overcharges may never have come to light but for Rowles, 31, and his wife, Julia.

“It’s been a nightmare. It’s been my living nightmare,” Julia Rowles said of her experience with Chase, in an interview with NBC News in Beaufort, S.C.

The saga began in 2006 when Rowles went on active duty. Under the SCRA, he could get his mortgage interest rate, which was adjustable and rising, lowered to 6 percent.

But Chase took a few months to lower Rowles’ rate, overcharging the family, Rowles says, by as much as $900 a month. In the fall of 2006, Chase finally began charging Rowles the correct 6 percent rate. For the next year or so, everything went relatively smoothly.

Then, two years ago, the Rowles family says, Chase began hitting them with collection calls that escalated to sometimes three a day, claiming they owed as much as $15,000.

“Saturday, Sundays, middle of the night. It did not matter if it was a holiday,” Julia said. “Collection calls at 3 in the morning. He would state, “I’m in California. I’m stationed here in Miramar. It’s 3 in the morning. What are you doing calling me?” “Well, sir, this is an attempt to collect a debt.”

She said they threatened to take the house and report the family to a credit agency, even though the Rowles family didn’t owe the bank anything and never missed a payment.

The Rowles’ records show that while they kept making payments on their mortgage at 6 percent, the bank wrongly had been charging them at rates above 9 or 10 percent. They kept calling the bank to explain there had been a huge mistake but say no one would listen. They say they kept being harassed for money they did not owe.

Fed up, Capt. Rowles got a lawyer and sued Chase, for himself and other members of the military.

“They ought to only have to worry about fighting the fight and keeping alive, not about whether their wives and children and going to be put out on the street,” said Dick Harpootlian, an attorney for the Rowles family.

The lawsuit is still pending. But a Chase official now tells NBC that Rowles did everything right, and the bank did a lot wrong. (The bank maintains, however, that it previously refunded the initial overcharges of the Rowles family. The couple disputes that.)

“We made mistakes here and we are fixing them,” said Chase spokeswoman Lemkau.

Foreclosure hold is a lie…

admin — Thu, 04 Nov 2010 12:32:29 +0000

Although many of the large banks claimed to have foreclosures on hold while they review their procedures it appears they didn’t “hold” back much in the Greater Houston Area.

While the number of foreclosed property is slightly lower than previous months it not what I would call a HOLD. More like a slow down.

Did I mention that some of the foreclosures were by Bank of America?!?

Harris County shows 786 foreclosed in November vs 1,246 foreclosed in October.

Fort Bend County shows 114 foreclosed in November vs 170 foreclosed in October.

Montgomery County shows 108 foreclosed in November vs 138 foreclosed in October.

Bottom Line: Don’t trust the bank unless you have it in writing and then still watch your back (and the small print).

- The Bank Slayer

*data from Foreclosure Information & Listing Service, Inc.

Chase’s deceptive loan modification

admin — Mon, 18 Oct 2010 14:23:11 +0000

Press hard, third copy is yours. What did you just sign?

Tim Hammond, an experienced REALTOR in the Greater Houston area, posed a question to our team last week. He heard mortgage servicers are mass mailing loan modifications (and/or mass mailing approvals for loan mods), especially to those folks facing foreclosure. Is this true?

Since one of our services is assisting homeowners with loan modification, and yes some of our clients are facing foreclosure, we should be able to see if this recent rumor is real. We’ll watch this during this week and post and update.

Now the interesting part…why. Why would banks that are facing scrutiny about their foreclosure procedures suddenly offer up approvals of loan modifications? The first thing that comes to mind is they don’t want to deal with the added hassle of a foreclosure and are willing to get the homeowner to at least start sending in some money. Maybe, but based on our experience I doubt it.

The dirty secret, which others have pointed out, is this: They NEED you to sign a piece of paper in which you acknowledge that YOU OWE THEM. That’s it. Simple.

Here’s an example. Five years ago you signed a promissory note to Ameriquest on a refinance. The loan and the servicing of the loan was sold and transferred one or more times. In this example, let’s assume you are currently serviced by Chase. Well the boys at J P Morgan Chase have a real problem on their hands. It seems they can’t find your promissory note (or they destroyed it), can’t prove they currently own your mortgage (it was sold to Fannie Mae), or they are too busy to worry about following the law and establishing that they are merely the servicer for Fannie Mae, who in turn sold your loan into Wall Street and Fannie Mae is still making your payments to some bond holder on Wall Street (or AIG’s credit default insurance paid off your loan). So now they have a problem – but they have an easy solution – LOAN MODIFICATION TIME. If they entice you to sign a loan modification with some tricky language in which you ADMIT that you owe the debt to Chase Home Finance, LLC (just the servicer) and GIVE UP & WAIVE all possible claims against Chase, their predecessors, successors and their 5th cousin twice removed, now they don’t need to fabricate foreclosure affidavits or use robo signers. GAME OVER, BANK WINS!

If you are offered a loan modification, there are three solutions to this issue.

Pay off your mortgage. Give them whatever they want and keep every receipt forever. The U.S. Treasury may come looking for their money and you’ll need to prove that you paid off a bank and Uncle Sam needs to file a claim with the bank for your mortgage payments/payoff.
Have an attorney, versed in these matters, review and explain to you the terms of your modification. If you understand and are willing to accept the terms then sign and start paying.
Fight. File suit if necessary to make them prove the ownership of the debt and the amount outstanding (if any).

- The Bank Slayer

Robo-signers: Apply here – No experience necessary

admin — Wed, 13 Oct 2010 15:37:57 +0000

Can’t you just see the ads?

Anyone can now be a foreclosure expert! No experience, license or training required. Yes, you can make money at home (or in an office) with a full time job working for a bank!!

Only requirements for this job are sight and upper limbs, so you can see where to place signatures and the ability to use a pen and/or stamp. Better than stuffing envelopes, this job allows you to make money every thirty to sixty seconds simply stamping and signing papers! Apply today and start working tonight!

Robo-signers were initially thought to be limited to a few dozen rogue bank and/or foreclosure mill folks. At least that is what the banks wanted everyone to believe. Guess what? It ain’t true.

Hundreds, maybe thousands of folks across the country have found employment as robo-signers. Attorney’s representing homeowners across the country are digging deeper and deeper with depositions of signers and finding out as an AP story that came out today (can be found here) :

…the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.

Many Americans think this whole robo-signer deal is nothing more than failure to cross a few t’s and dot some i’s. But the legal implications are serious. Swearing that you have actually read and verified the facts in a document, when you have not, is a legal offense.

The real issue though is who actually owns the underlying debt represented by the mortgage!

Why? How about innocent folks being foreclosed on by accident? It’s happening (look here).

Further, we have had three peple come into our office in the last 30 days who are CURRENT with their payments and one who is AHEAD, (yes paying extra) and have either been threatened with foreclosures and in the case of the person who is ahead was foreclosed upon!

We have folks that are in the process of either being reviewed for HAMP or have actually received a loan modification and are being foreclosed by the new alleged debt owner.

Want an example? We have one client that did a short sale three years ago settling a first and second lien; but now a new alleged debt owner of the 2nd lien claims money is still owed. Something along the lines of they didn’t get the money from the servicer who approved the short sale – three years ago!!! Hear that?

The previous servicer, Fremont, who is long gone supposedly never sent the money onto the owner of the debt? Is it true? Who knows at this stage but the new owner of the home now has a new servicer, Litton trying to make a claim on the old second lien AND the past homeowner, who short sold the house, has their credit being hammered for a debt already settled.

The rush to foreclose homes by using robo-signers impacts not just those who deserve to be foreclosed but those that don’t. Why? Because robo-signers as these depositions have shown:

…barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

I feel sorry for the buyer of a foreclosed property that expects to close and move into or fix it up and is being held up by banks like Chase or Bank of America as they examine the foreclosure signing disaster. I feel sorry for title companies employees and others that are being hurt by this mess but it needs to be fixed.

The title to one’s home must be clean or it hurts everyone involved in the sale or purchase of a home.

People should not be allowed to live for free on the back of someone to whom they owe a debt but if either the debt is NOT owed (current or been paid off) or the wrong creditor is trying to collect it must be stopped.

The AP story is below.

– The Bank Slayer – see our list of short sale homes were currently working on.

Robo-signers: Mortgage experience not necessary

By MICHELLE CONLIN AP Real Estate Writer © 2010 The Associated Press

Oct. 13, 2010, 12:28AM

NEW YORK — In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training, a Florida lawyer says.

In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

“The mortgage servicers hired people who would never question authority,” said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them — earning them the name “robo-signers.”

The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.

Ticktin said he would make the testimony available to state and federal agencies that are investigating financial institutions for allegations of possible mortgage fraud. This comes on the eve of an expected announcement Wednesday from 40 state attorneys general that they will launch a collective probe into the mortgage industry.

“This was an industrywide scheme designed to defraud homeowners,” Ticktin said.

The depositions paint a surreal picture of foreclosure experts who didn’t understand even the most elementary aspects of the mortgage or foreclosure process — even though they were entrusted as the records custodians of homeowners’ loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn’t define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff’s assignor or defendant. She testified that she didn’t know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. “I don’t know the ins and outs of the loan, I just sign documents,” she said at one point.

Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.

Judges are unlikely to look favorably on a bank that claims paperwork flaws don’t matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book “Foreclosures.”

“There has to be a cornerstone of integrity to the process,” Coffey said.

Bank of America responded to Tiktin’s depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. “This review will ensure we have a full understanding of any potential issues and quickly address them,” Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank’s foreclosure customers have not made a payment in more than 18 months.

JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.

Litton Loan Servicing did not respond to a request for comment.

Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.

For a housing recovery to occur, all the foreclosed properties — which could account for 40 percent of all residential sales by 2012 — need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.

“This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?” says Cris deRitis, director of credit analytics at Moody’s Analytics. “We need to fix these issues before the economy can recover.”

Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you’ve reviewed documents you’ve never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.

So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.

But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of “foreclosure king” David Stern, now under investigation by the Florida attorney general’s office. “Pending the outcome of the AG’s investigation, Citi is not referring new matters to this firm,” the bank said in an e-mailed statement.

Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern’s firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.

Stern’s lawyer, Jeffrey Tew, did not respond to a request for comment.

Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.

The Earls and their attorney now allege that they were victims of fraudulent paperwork.

___

Curt Anderson contributed from Miami.

Bank of America’s foreclosure halt hurts many

admin — Tue, 12 Oct 2010 13:01:26 +0000

The fact that Bank of America has claimed to halt foreclosures in all 50 states is significant. It is likely only a matter of time until the other big banks capitulate and offer some type of foreclosure freeze as well.

What will be the outcome? It remains to be seen but for now there are several industries that are grinding to a halt: title companies, Realtors, buyers of foreclosed homes, and the banks trying to unload foreclosures are experiencing either a slow down or a complete stop. Not to mention the bond holders of mortgage backed securities. Try selling them now. I’m no financial guru but I wouldn’t bid much for something that has good cash flow now but what is actually owned and therefore retrievable later is up in the air.

Who are the largest banks involved in this mess? Reauters provided this list.

Watch for these sly foxes to start selling off loans and the servicing of loans that are in default to the smaller guys who don’t show up on the government or media’s radar.

- The Bank Slayer – see what other REALTORS have to say about us.

RE Financial Bubble Coming From Title Insurers

BankSlayer — Mon, 11 Oct 2010 20:55:59 +0000

This article, http://www.cnbc.com/id/39617381, is excellent analysis of what our arguments with the mortgage companies have been about—to the letter. It also addresses how this next wave of uncertainty might affect the real estate market.

One potential exposure that we are concerned about that others haven’t yet pointed out is in the title insurance business. We believe that title companies may stop issuing title insurance for any property that has a foreclosure in its past and no more title insurance for anyone buying a foreclosure. This would essentially render titles to foreclosed homes as unmarketable as the only buyers able to buy would be cash buyers who didn’t want title insurance; therefore driving the prices down much farther below market. In Houston, 1 out of 10 homes currently for sale are “bank owned.” The impact of taking these homes off the market might have a temporary effect of decreasing supply thereby driving up prices but it will be followed by an over-correction when these homes return to the market along with the shadow inventory of homes the banks have been holding so as to not create too much supply. Some speculate the shadow inventory is 2-3x what’s currently on the market.

If people aren’t buying title insurance (or there is a significant decrease in the number); the profits of the title insurance companies will be down. If banks can’t unload properties to get made whole on bad loans; their profits will be down. This would be the perfect storm event to precipitate the second “double dip” in the financial markets that everyone has feared.

How do we minimize the impact? Look for the Fed to buy more debt and issue more guarantees.

Anyone care to speculate on how this might affect the election?

- The Bank Slayer – click here to see our short sale properties currently for sale.

Stewart Title locks down foreclosure sales

admin — Mon, 11 Oct 2010 12:10:52 +0000

In our own backyard of Houston, Texas, Stewart Title clamps down on foreclosures sales. About time!

Shabby title records, no true chain of custody in the property records, bogus affidavits and robo-signer assignments. Hello?

Time to take a stand! Hats off to Stewart for publicly admitting, via a clamp down, that something is fishy in the transfer of documents that secure the interest of lenders (deeds of trust).

Excuse me Mr. Bank of America…why won’t you let us sniff your locker?

Below is the AP release.

- The Bank Slayer

Stewart Title clamps down on foreclosure sales

By MICHELLE CONLIN and JANNA HERRON (AP) – 1 day ago

NEW YORK — Stewart Title Guaranty Co. is clamping down on sales of foreclosed homes that may be linked to flawed documentation.

In an internal memo obtained by The Associated Press, Houston-based Stewart is issuing guidelines to its agents that make it difficult to write policies on property foreclosed upon by four banks whose processes are in question. Those banks are JP Morgan Chase, Bank of America, OneWest Bank or Ally Financial’s GMAC Mortgage unit.

In a statement, Stewart Title said the memo provides guidelines to its issuing offices to enable them to insure foreclosure sales in jurisdictions where lenders or state attorneys general have not issued a moratorium on foreclosures.

“Stewart stands ready to insure these transactions in accordance with these guidelines,” the company said.

A week ago, title insurer Old Republic National ordered its agents to stop offering policies on foreclosed properties owned by GMAC or JPMorgan Chase.

Stewart Title is owned by Stewart Information Services Corp. Title insurance provides protection to the homebuyer and mortgage provider in the case of any unpaid taxes, questionable ownership or other problems.

Title problem arise from robo-signers. Do you have a defective title?

admin — Sat, 09 Oct 2010 16:55:22 +0000

You know it’s bad when your own title company won’t insure properties you foreclosed.

The Palm Beach Post in Florida is reporting that one of the country’s largest foreclosure mill, the Florida Default Law Group’s own title company, New House Title is rejecting properties that FDLG previous foreclosed.

New House Title claims that due to the halting of foreclosures and the review banks are having to do (regarding their fraudulent affidavits and assignments), some banks such as Chase don’t want properties to be sold through and insured via title insurance – just yet.

This makes sense from the bank’s perspective and the title company. How are you going to squirrel away enough money to indemnify all the homeowners and sellers of properties with clear and present breaks in their chain of title.

Tack on the recent article in Bloomberg, where “Defective documentation has created millions of blighted titles that will plague the nation for the next decade,” said Richard Kessler, an attorney in Sarasota, Florida, who conducted a study that found errors in about three-fourths of court filings related to home repossessions.

The affect these defects can have in title can be very costly. “It’s a nightmare scenario,” said John Vogel, a professor at the Tuck School of Business at Dartmouth College in Hanover, New Hampshire. “There are lots of land mines related to title issues that may come to light long after we think we’ve solved the housing problem.”

The costs for title insurers to defend customers and reimburse for lost properties rose 14 percent to $480.5 million in 2010’s first half from a year earlier, according to American Land Title Association, a Washington-based industry group.

Buckle your seat belt. The ride is going to get bumpy.

- The Bank Slayer

Florida foreclosure firm’s title insurer won’t insure firm’s foreclosure titles

By Kimberly Miller
Palm Beach Post Staff Writer

The title insurance arm of one of the state’s largest foreclosure law firms is refusing to cover properties foreclosed on by its own attorneys citing potential defects in court filings.

New House Title, which is owned by the same people who run the Tampa-based Florida Default Law Group, sent notice to a Boca Raton real estate attorney Wednesday that a 2009 foreclosure was off limits.

What Attorney Robert Feldman found interesting in New House’s denial for the Deerfield Beach condominium is the foreclosure was handled by the Florida Default Law Group.

“It is somewhat surprising that now they won’t even insure their own work,” Feldman said.

The New House email faults JPMorgan Chase for the rejection.

Chase is one of three national lenders, including Ally Financial Inc., and Bank of America, that has suspended some foreclosure proceedings to review and correct flawed documents that may have been used to take people’s homes.

“We have become aware of potential defects with affidavits submitted by the servicer, JPMorgan Chase or an affiliate, in foreclosure actions, which raise concerns about the insurability of the title of the subject property,” said the e-mail sent by Fran Morrison, a closing processor with New House Title. “Until these defects have been remedied, we are unable to proceed with the sale or closing of the foreclosed properties.”

Title insurance protects homeowners against financial loss from defects in the title, liens on the title or if the title is not what it is represented to be.

FAQ on Texas AG Demand Letter to Mortgage Servicers to Halt Foreclosure Activity

admin — Wed, 06 Oct 2010 21:40:03 +0000

The following FAQ is a reprint of the FAQ provided to Texas Realtors and on the affect to various types of foreclosure related transactions such as REO sale, Short Sales, Evictions and Foreclosures.

>>>>> TAR – FAQForeclosureMoratorium100610

Much of this remains to be seen but it is worth reading and noting possible issues that may arise.

- The Bank Slayer