- The Bank Slayer

Florida Default Law Group, representing Chase Home Finance LLC, has filed two (2) alleged “original” promissory notes in the same open case on two different dates, with the borrower’s signature being completely different on both “originals”.

Obviously there is only one true “original” promissory note, which may or may not be one of the two “originals” filed. Obviously one of them is a forgery, and it may be that both are “photoshop” forgeries.

- The Bank Slayer

Paul Egan / The Detroit News – Man Threatens to Fly Plane into Chase building

Utica — A Monday detention hearing is set for a Utica man arrested Friday after he allegedly threatened to fly an airplane into a Chase Bank building in Houston.

“Chase Bank employees were frightened by this threat since several weeks ago, a plane had been flown into an Internal Revenue Service building in Austin, Texas,” FBI Special Agent Juan Herrera said in an affidavit that was attached to documents charging Sean Timothy Donnelly with making an interstate threat.

Donnelly, 40, a real estate appraiser also known as Sean Timothy O’Neill, refused for nearly two hours to come to the front door when federal agents visited his home Friday. He allegedly made the phone threat on Thursday, the affidavit said.  ”After nearly one dozen law enforcement officers, including FBI agents, detectives and officers of the Utica Police Department, were present at the residence, Donnelly exited,” the affidavit said.

Donnelly, who appeared in U.S. District Court in Detroit late Friday and was ordered held for a detention hearing Monday, was reportedly upset about a real estate appraisal Chase Bank had conducted and told the operator at the bank’s Houston call center he was “ready to fly an airplane into your building.”

The 11-minute telephone conversation was recorded, the affidavit said.

Donnelly, a registered sex offender, has an extensive criminal record including two felony arson convictions, officials said. Making an interstate threat is a five-year felony.

Home owners are so exasperated by the entire process that many times they are on the verge of giving up and letting the house go rather than battle with these knuckleheads.   Read on and if these examples give you the déjà vue then give us a call to find out how to get your situation under control.

-          The Bank Slayer

How Chase Bank Has Left Homeowners in Limbo

By Paul Kiel, ProPublica, February 15, 2010

On the Saturday before Thanksgiving, Lesa Herron of Santa Rosa, Calif., opened a letter from Chase Home Finance (PDF). She’d been denied a permanent modification under the federal government’s loan-mod program, Chase said, because “Your hardship is not of a permanent nature.” No other reason was given.

For Herron, that was hard to understand. She was working two jobs and her mortgage payment still amounted to more than half of her income. She’d fallen two payments behind. If her money troubles were only temporary, it was news to her.

We at ProPublica reported last month that mortgage servicers are often not following the Treasury Department’s rules for the program and provided three examples. One involved another homeowner who, like Herron, had been denied a modification because his hardship was not “permanent.”

Since that story, we have found several other similar cases: homeowners who may well be eligible for the program but who were denied because their troubles were not deemed “permanent.”

The cases ProPublica found all occurred before Treasury explicitly barred such denials in December. Despite the change in guidelines, however, those homeowners are still in limbo. Some face the possibility of foreclosure.

Through interviews with housing counselors and homeowners, we found six cases in which homeowners were denied because the hardship was found not to be “permanent.” All were in November. All were denied by Chase Home Finance, JPMorgan Chase’s mortgage servicing arm.

Chase seems to be alone among the largest servicers in having used that reason for denial. It’s unclear just what criteria Chase used to judge a hardship temporary.

Housing counselors told us that homeowners denied a modification for that reason should reapply. The program does not allow homeowners to appeal denials, and housing advocates have often criticized the program for not providing an effective way to challenge servicers’ determinations.

Christine Holevas, a spokeswoman for Chase, said that the company “adapts as quickly as possible” to Treasury’s guidelines. When asked, she did not say whether Chase would review the applications of homeowners who’d been denied because their hardships were considered temporary.

As we reported last month, the largest servicers have lagged in approving homeowners for modifications. Together, those servicers account for more than 60 percent of the 3.4 million mortgages eligible for the program, but very few homeowners have been approved for lasting modifications. About 425,000 Chase customers are eligible for loan mods,according to the Treasury Department. Only a little more than 7,000 have received permanent modifications.

The Treasury Department has laid out extensive guidelines for the $75 billion program in an attempt to standardize servicers’ evaluations of applicants. When a servicer joins the program, it signs a contract that says it will abide by those guidelines. In return, the servicers receive incentive payments from the government for each modified mortgage.

To receive a modification under the program, homeowners must demonstrate that they can’t afford their mortgage payments. But Treasury’s guidelines, first issued last April and updated repeatedly since, never mentioned testing the permanence of a homeowner’s difficulties when evaluating an application. Last December, a new guideline explicitly prohibited servicers from distinguishing “between short-term and long-term hardships.”

A Treasury spokeswoman said that since the program’s launch, servicers had developed “varying interpretations of the guidelines” and that Chase’s use of the “temporary hardship” denial before the guideline update was “reasonably consistent” with the program’s rules. She said that homeowners who’d been denied for that reason can contact a hotline staffed with housing counselors for help.

It’s impossible to say how many homeowners were denied for that reason. Servicers were not required to systematically collect and report the reason for denials before December. The reporting system includes only 14 possible reasons for denial; having only a temporary hardship is not one of them. Holevas did not respond to a question about the number of denials.

Jennifer Murphy, director of servicer relations at the nonprofit Center for New York City Neighborhoods, said that she had often seen homeowners rejected for modifications because their hardships were deemed “not permanent”—both before and after the launch of the federal modification program last year. As a result, she said, she advises homeowners to state that their hardships are permanent when they apply.

ProPublica could not find an example of any of the other top three largest servicers using the same denial. Spokespeople for Wells Fargo and Citigroup’s servicing arm said they do not evaluate the duration of the hardship for the purposes of the program. A spokesperson for Bank of America gave a more general reply and said the bank follows the program’s guidelines when evaluating homeowners.

Homeowners must meet certain basic qualifications to be eligible for a modification under the program: the home must be the primary residence and the homeowner must be able to show she can’t afford the mortgage payments. If those hurdles are cleared, the servicer is supposed to run a secret formula developed by the Treasury Department to determine whether the investor would make more money modifying the loan or not. The program lowers the mortgage payments to 31 percent of the homeowner’s monthly income. If modification is likely to be more profitable, the servicer is obligated to offer the homeowner a modification.

Chase’s criteria for a “hardship … of a permanent nature,” meanwhile, aren’t so easily explicable. The denial seems to have been applied in a range of cases. Some homeowners had been current on their payments when they applied for a modification, some were months behind. Some had been denied even a trial modification, while some had been denied after making trial payments for over half a year. The program is supposed to feature a three-month trial period before modifications are made permanent (as we’ve reported, trials frequently stretch much longer).

In the example we reported on last month, Chase told a mortgage broker named Nathan Reynolds that he’d been denied a modification because Reynolds had expressed optimism that the administration’s policies might rescue the housing market and thus boost his income. He told ProPublica that he’d likely declare bankruptcy if he didn’t receive a modification.

Yves Andre Vital, a housing counselor with Brooklyn Housing & Family Services, told ProPublica that Chase had denied one of his clients on the rationale that unemployment was only a temporary hardship.

In Lesa Herron’s case, she says a Chase employee told her she’d been denied because her gross income had not decreased since she refinanced into her loan in 2006. Herron works as an X-ray technician at a state-run center for people with developmental disabilities, but has supplemented her income by delivering pizza three nights a week for the past nine years.

Since last fall, she’d struggled to keep current on her loan, which carries a 9.5 percent interest rate and amounted to more than half of her income. But when she couldn’t cover the property tax, she fell two months behind. She was accepted to the federal program last May and was able to make the trial payments, because they’d been cut almost in half, from $3,350 to about $1,778.

Herron made six of those monthly payments before she received the denial letter for a permanent modification last November. She didn’t know what to do next. “I stopped paying my mortgage so that my family and I could get the money together to move when the bank made their next move.” She says she might try reapplying now that she knows her denial is against the federal program’s guidelines.

Paul Kiel is a reporter for ProPublica.

Thanks to Chase-sucks.com for this info.

1. “How did my neighbor get into HAMP (and/or get a loan modification) but I can’t?
2. “Do I have to be delinquent to get a workout plan?”

The best answers typically are:

1. The secret Black Box recipe may not mix well with your situation (read more here on this) because your loan may be very different from your neighbor. ex. FHA vs Conventional, Mortgage Insurance vs none, Freddie vs Fannie, 80/20 vs 90/10, etc.
2. You don’t have to be delinquent but the mortgage companies encourage it. (we have this in writing and in audio)

Add to it that most Mortgage Servicers (the ones collecting your payment):

• give borrowers poor advice based upon the banks own lack of understanding as to what is the best components of HAMP and HAFA in which to place your file;
• are motivated to foreclose as they have bought your loan at a deep discount and now want to flip the home for a profit;
• know that they can keep you in an endless loop of faxing and re-faxing while enticing you to send them some more of you hard earned dollars.

Finally, even the Treasury department is coming to the conclusion that the magic of HAMP is failing to perform as desired.

- The Bank Slayer

From HousingWire

Seth Wheeler, senior adviser to the US Treasury Department, said that one of the main goals of the Obama Administration is to fix the mortgage market in the United States, although federally subsidized modifications may not be appropriate for many borrowers.

Speaking at the American Securitization Forum (ASF) 2010 conference in Washington DC, Wheeler said the focus of the Administration is shifting somewhat away from modifications, as getting borrowers into the Home Affordable Modification Program (HAMP) is not always the best solution.

“Short sales, deeds in lieu are other ways to prevent foreclosures to help achieve [housing] stability,” he said. “Modifications are only for a certain subset of distressed homeowners.”

The Administration’s foreclosure alternative program – the Home Affordable Foreclosure Alternatives program,  or HAFA – will provide incentives to servicers and borrowers that pursue short sales rather than foreclosure. As HousingWire magazine reports ^[1], critics of HAFA say it will dull short sale experts’ competitive edge while other sources warn homeowners will still see short sales as the loss of homeownership.

“They can’t keep their home, but they can avoid foreclosure,” explained Colleen Hernandez, CEO of the Homeownership Preservation Foundation (HPF) – a nonprofit that partners with local governments, borrowers and lenders to facilitate foreclosure alternatives and promote homeownership.

“We are seeing middle class unemployed,” Hernandez said, adding the emerging class of struggling homeowners are unused to financial hardship. “They are slow to apply for benefits, slow to pick up a job that pays less, slow to take up the new world order.” HPF’s services help these borrowers get their arms around total finances as this class tends to be highly indebted with not only credit cards, but also outstanding student loans and car payments. “We help them  prioritize” the wind-down of their obligations, Hernandez added.

“HAMP can not be seen as the only solution,” said Doug Potolsky, a senior vice president at Chase Home Finance. “Chase has aggressive programs that deal with loans that fail HAMP.” Clearly, he said, other solutions are necessary as, in his department, HAMP is not particularly successful. Nearly one-third of Chase HAMP trial modifications result in no repayment, and only 20% ever reach permanent modification status, Potolsky said. “HAMP is not perfect, but improving. I think as a servicer we have to work on building our own [modification] program.” In terms of trying to follow the administrations directive to fix mortgage markets, Potolsky added that option ARM mortgages are particularly challenging to modify.

HAMP servicers completed a total 66,465 permanent modifications through December, according to the latest Treasury report ^[2].

Other panelists at ASF this week feel a heavy reliance on HAMP could even result in a second housing dip. The warning comes after a special inspector on the Treasury’s asset-relief efforts recently warned of a government-induced second housing bubble ^[3]. Another challenge facing the administration, according to ASF director Tom Deutsch, is the 30% of US borrowers that are underwater and facing strategic defaults ^[4]. And this is perhaps the biggest challenge facing the market.

Laurie Goodman, a managing director of Amherst Securities – and a vocal critic of HAMP for its failure to address negative equity ^[5] – responded to Deutsch: “If you have negative equity, you are very, very likely to default.” Goodman added: “Negative equity is the single most driver of defaults.”

Negative equity may be just one of the predictors of borrower mentality leading to strategic default ^[6], an issue HousingWire studies in-depth in the February magazine issue ^[7].

Nancy Mueller Handal, managing director of structured fiance at MetLife, also said at ASF that solving the issue of shadow inventory – homes at danger of default, which Goodman’s team recently estimated to range around 7m units ^[8] – will require a viable non-agency refinancing program in order to prevent the home again reaching default status in two to five years. Under this program, the private market for the mortgage-backed securities (MBS) could re-open, providing need liquidity into the market.

Written by Jacob Gaffney.  Diana Golobay contributed to this report.

NEW HOURS  - Monday – Thursday – 8:00 – 2:00pm.

Wow!!!  How generous!!!  Helping homeowners during the time period they should be at a job!!    Super effort guys.  Keep it up.

- The Bank Slayer

Why? Quite simply it doesn’t help you one bit.

I will make a fearless promise…ready…no one in the State of Texas will be foreclosed upon from now until January 5^th! I’m going to give everyone in Texas an extra day past their December 21, 2009 through January 3, 2009 moratorium.  Look how easily I one upped these big banks.

How?  No foreclosures can take place except on the first Tuesday of each month.  So the next possible date is…drum roll…January 5^th!   I know it is a shocker but some of these big banks issue positive looking press releases and commitments even when the promises are hollow.

If you or someone you know is facing a foreclosure situation, don’t count on these guys giving you the extra time you need to get your ducks in a row.  Act now!!

-          The Bank Slayer

The second nasty title cloud appears when homeowners have modified their loan or taken the dreaded “HomeSaver Advance” which was rampant the last few years.

Let’s examine the result of a typical HomeSaver Advanced deal.  Imagine falling several payments behind and now you owe the bank $8,000 in past due payments.  We know most of these payments are mainly interest with a tad of principle tossed in (in the early stages of the loan).  So now you have roughly $7,999 in past due interest.  The bank rolls out the HomeSaver Advance.  You sign on the dotted line, mail it back and “POOF” you are now current again.   What happened?  You just agreed to take the past due payments and convert it all to principle and add it to your loan balance.  It will now show up a second or third lien on your home which will need to be paid off when selling or refinancing the home.  This can quickly erode equity.

What about loan mod?  Ok, let’s see…you borrower the money for the purchase from AmeriQuest, made payments to Countrywide, refinanced with Chase and now make payments to AHMSI.   You fall behind and want a loan modification.  AHMSI rolls out the red carpet for a HAMP loan modification.  You sign away and make your trial payments.  You decide you can’t make the payments and you need to sell.  You get an offer and are ready to go to closing…but wait the Deed of Trust recorded on your home has one of the three previous banks and not AHMSI.   Tack on a new “loan modification agreement” signed by you and recorded by AHMSI saying you agree you owe a huge amount and that it is all owed to AHMSI.

Can you see where this is going?  Did AHMSI deliver to you a copy of the assignment of your Note from your previous lender?  Did Chase release the refinance Note?  These situations can be deal killers for selling the home.

-       The Bank Slayer

Testimony from a “copy” is inadmissible. Testimony is inadmissible unless it comes from a witness accepted by the court — not some lawyer lathering up his mouth and using finesse to escape the rules of evidence.   Every witness must be sworn, must have personal knowledge of the contents, must remember it ALL and be able to communicate it with specificity such that a court could rule without the court creating a document that had never been in existence before the evidentiary hearing.

Ever hear the old “buyers are liars”?  Some of attorneys are right there with ‘em. As soon as the Lawyer starts talking you should probably be objecting since he is not sworn, not a witness and never will be.

So what this means is that an affidavit that is sworn must be the “testimony” of a witness accepted by the court who has personal knowledge and is not reporting what was told to them by someone else and not be reporting what they read in another document.

Hats off to our friend Neil Garfield at Livinglies for a great piece on evidence.      Show me the proof!!!

Chase called one of our clients and tried to convince her that they didn’t need a third party negotiator and they sure didn’t need to an attorney to assist them in working out a deal to save the house from foreclosure.

The nerve of these folks!  I’m not sure how they sleep at night.  Where was Chase’s helping hand when the house was barreling towards the foreclosure sale.  Where was the help when she needed a new payment plan?  Of course, now they’re trying to “play nice” when we have them backed into a corner.

If you have experienced the helping hand of Chase feel free to leave your own story here.  What scumbags!

- The Bank Slayer