Flagstar Bank, GMAC, PNC Bank, SunTrust Bank, U.S. Bank and Wells Fargo must be “special” as they apparently don’t think they need to show up to court.

Miami-Dade Circuit Judge Jennifer Bailey was hopping mad at the lack of respect shown her court by these banks.   She warned, “You may be held in jail up to 48 hours before a hearing is held.”

Granted scheduling accidents can occur.  Maybe one party doesn’t get proper notice or somehow misses the hearing but Bank of America showed up as did the property association rep.

On the heels of the Massachusetts Supreme Court case that whacked Wells Fargo for failing to follow proper procedure, you would think that banks would be on the ir best behavior but apparently not.  Enjoy the read from the Daily Business Review below.

- The Bank Slayer

Judge holds bankers in contempt, threatens jail

Jose Pagliery

Daily Business Review

January 13, 2011

Jennifer Bailey

Representatives from six major banks that skipped a hearing in a Miami condo association receivership case could face the wrath of Miami-Dade Circuit Judge Jennifer Bailey today if they fail to show up a second time.

The judge already has declared lenders that own or are foreclosing on units at Bird Grove Condo are on the hook for $105,999 in expenses for the court-appointed receiver for the association. She also held the six in contempt of court.

Bailey last month granted a request by the receiver, Miami attorney Lisa Lehner, to be paid for pulling the building — an asset for the foreclosing banks — back from the brink of condemnation.

When Lehner was appointed in March, garbage hadn’t been collected for weeks, electricity was about to be cut off, the building had no insurance, and an elevator was broken. She turned it around in months.

“They have property and collateral that if I walk away from turn into nothing,” Lehner said. “Here I am, sitting as their property manager, working for free after practicing law for 28 years. It’s just not fair.”

Lehner’s demand for $5,579 in expenses per unit went uncontested at a Dec. 1 show cause hearing where Bank of America was the only lender to send a representative. Missing were Flagstar Bank, GMAC, PNC Bank, SunTrust Bank, U.S. Bank and Wells Fargo.

In November, banks owned two units and were foreclosing on another 17 units in the 39-unit building at 2734 Bird Ave. between a gas station and a gallery. A one-bedroom, one-bath unit is listed for sale for $50,000. Bank of America filed nine foreclosure cases, followed by GMAC with five.

The six lenders were ordered to send non-attorney representatives to today’s hearing, when Bailey will discuss whether the banks also should be required to pay the receiver’s upcoming maintenance fees. Bailey’s order threatened to have bankers arrested if they didn’t show, and she warned, “You may be held in jail up to 48 hours before a hearing is held.”

Lawyers for the six banks did not return calls for comment before deadline. They include Hollywood’s David G. Cornell with Ben-Ezra & Katz, Weston’s Elsa Hernandez Shum with the Law Offices of David J. Stern and Tampa attorney Erik DeL’Etoile with Florida Default Law Group.

It’s possible future expenses may not be billed by Lehner, who plans to step down from the post.

“I’m withdrawing. It’s their property. They’re going to have to figure out what to do with it if they want to save it,” she said. “I certainly was prepared to not be paid for a long time.” But, she said, she did not think she would be spending 11 months without pay.

Justifying Fees

Lehner’s dilemma is similar to many cases involving foreclosing banks and troubled homeowner or condo associations, in which a judge appointed a receiver at the request of the association. But in this instance, the association was almost broke; in March, it had only $6,316 left to operate a building that Lehner estimates costs $10,000 a month to maintain.

The association counted more than $143,000 in accounts receivable, “all of which clearly presented a serious cash-flow problem,” Lehner wrote in a July 30 motion.

She would be working for free for an undetermined period of time even though associations typically pay for receiverships.

Demanded Expenses

After spending months ordering repairs, collecting association fees and paying the building’s overdue bills, Lehner demanded her expenses, arguing banks were getting a free ride.

Bailey asked her to distinguish her case from a 3rd District Court of Appeal decision in 2009, which determined lenders in the process of foreclosure aren’t responsible for unpaid association fees until they take title, regardless of how long they delay final judgment.

Lehner’s attorney, Lipscomb Eisenberg partner Deborah Baker, cited a 1911 Florida Supreme Court decision, a 1959 legal treatise and a 1992 opinion from the 11th U.S. Circuit Court of Appeals.

That was enough to convince Bailey, who congratulated Lehner and Baker for their work in court on Nov. 1.

“In all candor, the efforts of the receiver and her attorney have been nothing short of heroic in connection with this building,” the judge said.

“No doubt,” responded Bank of America’s representative, Akerman Senterfitt shareholder Jeff Trinz.

Trinz was the only representative to appear at the show cause hearing the next month.

Lehner and Baker also credited Trinz as being the only bank representative to cooperate with them.

Association Law Group partner David C. Arnold, a North Bay Village attorney who represents condo associations and is not involved in the Miami case, has his doubts about Bailey’s ruling.

“How they would hold the banks liable for the receiver, I think, is a stretch. I don’t think it’s going to hold up. It’s innovative thinking, but I just don’t see how the 3rd DCA’s going to affirm any type of action like that,” he said.

State laws governing condo associations ensure common expenses are assessed against unit owners, not the banks holding mortgages, he said.

Undercutting the receiver’s arguments is the fact that efforts to save the building might not benefit the banks, Arnold said.

“They don’t have to foreclose at all. A lot of them just walk away and give up their mortgages,” he said.

The way Lehner described lenders’ attitudes in her case could point to that end game.

“Most of the banks don’t seem to want to do anything about it,” she said. “Without any thought of any consequences, not to care about the human cost? All right, I get that. But not to care about their property? I just don’t get that.”

Jose Pagliery can be reached at (305) 347-6648.

This is very troubling.  Every foreclosure attorney that is on the other side from us, including GMAC / Ally & Bank of America is reporting to us that they are being directed by their clients – READ: Banks – that the November 2, 2010, foreclosure sales are still on.

YES, THEY PLAN TO FORECLOSE PROPERTIES IN TEXAS IN 14 DAYS.

At the beginning of October, all banks except GMAC /Ally, still held their scheduled foreclosure sales, although the Texas Attorney General’s office requested a hold before the October sale date.

In fact, RealtyTrac reported that,

“Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months,” said James J. Saccacio, chief executive officer of RealtyTrac.

Although we are watching this very carefully, if you or someone you know is (or was) facing a foreclosure situation or even thinks they might be in danger of foreclosure they need to act now.

What do you do?

1. Call your mortgage company and ask point blank, “What is my foreclosure sale date?”   Don’t beat around the bush!  If they give you any other date than the first Tuesday of a month they are lying.  Unless you are not in default.
2. Ask the bank for the phone number and name of the law office handing your file.  Then call them, regardless of whether the bank says you are in foreclosure or not.  RECORD THE CALL.  Find out if you are facing foreclosure and get the date.  If you can get it in writing do so.

If you are facing a scheduled foreclosure sale date you have three options:

1. Give them whatever money they require.  As Neil Garfield says, the only sure defense to collection is payment.
2. File bankruptcy.  Be warned, this is usually at best a delay tactic and it is the gift that keeps on giving.  A BK stays on your credit for 7-10 years!!
3. File suit and attempt to get a Temporary Restraining Order against the bank to buy time for you to resolve your issues.

Bottom Line is that if the bank considers you are in default, whether from your own failure to make payments or not (yes, every month we help folks that are CURRENT and still facing foreclosure) you must act now!

If you are a REALTOR assisting a homeowner with a short sale or loan modification make sure your client takes steps to stop the foreclosure.   To see a list of some of the REALTORS that we’re working with to close their short sales and keep the house out of foreclosure click here >>  Short Sales in play

If you can’t pay off the banksters then seek qualified legal help.

- The Bank Slayer

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.

Copyright © 2010 The Associated Press. All rights reserved.

Stay tuned as Bank of America has started pulling foreclosures in 23 states just as Chase & GMAC/Ally.

On the other hand, Wells Fargo claims that they have the documents in order.   Really, hey Wells Fargo, watch this blog as on Monday I’ll post your fraudulent Notice of Sales here in Texas.

- The Bank Slayer

Bank of America Halts Foreclosures in 23 States

An Official at Bank of America Acknowledged She Signed Up to 8,000 Foreclosure Docs a Month and Typically Didn’t Read Them

Bank of America will halt foreclosures in 23 states because of document problems. A Bank of America official acknowledges in a legal proceeding that she signed up to 8,000 foreclosure documents a month and typically didn’t read them.

The executive’s admission adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

Two other companies, Ally Financial Inc.’s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public

The Bank of America executive said in a February deposition in a Massachusetts bankruptcy case that she signed 7,000 to 8,000 foreclosure documents a month.

“I typically don’t read them because of the volume that we sign,” the executive said.

In statement, Bank of America said, “We have been assessing our existing processes. To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment in the 23 states where courts have jurisdiction over foreclosures.”

The disclosure comes two days after JPMorgan said it would temporarily stop foreclosing on more than 50,000 homes so it can review documents that might contain errors. Last week, GMAC halted certain evictions and sales of foreclosed homes in 23 states to review those cases after finding procedural errors in some foreclosure affidavits.

After GMAC’s announcement, state attorneys general in California and Connecticut told the company to stop foreclosures until it proves it’s complying with their state laws. The Ohio attorney general this week asked judges to review GMAC foreclosure cases.

And in Florida, the state attorney general is investigating four law firms, two with ties to GMAC, for allegedly providing fraudulent documents in foreclosure cases.

In some states, lenders can foreclose quickly on delinquent mortgage borrowers. But 23 states use a lengthy court process for foreclosures. They require documents to verify information on the mortgage, including who owns it. Florida, New York, New Jersey and Illinois are the biggest states with this process.

J.P. Morgan Chase, who only weeks ago was busted AGAIN for fraudulent and fabricated documents halts foreclosures just like GMAC (Ally).

Fitch Ratings, which is a credit-rating firm has said that “defects”, i.e. fraud, have been found in foreclosure documents at Chase and that these type of “defects” are industry-wide.  DUH??

It has been widely circulated that Beth Ann Cottrell in her deposition admitted to orchestrating the signing of over 18,000 documents without reviewing them.

The sad but funny part is that J.P. Morgan spokesman Tom Kelly said that he “does not expect to find any factual problems or that customers have been harmed, but if we do find any cases we will take appropriate action.”  REALLY?  Like what, put up a bond to cover the homeowner when Fannie Mae, Freddie Mac or the Treasury department comes looking for the house that Chase stole.   There have been multiple cases of more than one “owner” of the debt looking to collect.

Want an example…I’m looking at a foreclosure notice in my office for one of our clients that “claims” that Bank of America, through BAC Home Loans Servicing, L.P., owns the mortgage debt and has the right to foreclosure, in other words has the Note and the Deed of Trust for this borrower.

Hi, I'm Bank of America. I own you!

Problem is that they DON’T.  Want proof, look here.

Hi, I'm Freddie Mac and I own you

Hi, I'm Freddie Mac and I own you 2

Freddie Mac bought the debt and most likely sold it into the securities market.  But at a minimum BofA doesn’t have it.

This kind of junk is wide-spread and the norm for most of these mortgage servicers.

If you or someone you know is facing a foreclosure or trying to get a short sale pushed through then get an attorney who specializes in SUING banks not just some yahoo with a J.D. that claims he knows how to do loan mods or short sales and/or deed-in-lieu’s.

These deals can be won with litigation.  Proof is in the pudding (or in this case in the courts.)

Below is the article from today in the Washington Post.

- The Bank Slayer

J.P. Morgan will halt foreclosures

By Ariana Eunjung Cha
Washington Post Staff Writer
Thursday, September 30, 2010; A1

J.P. Morgan Chase, one of the nation’s leading banks, announced Wednesday that it will freeze foreclosures in about half the country because of flawed paperwork, a move that Wall Street analysts said will pressure the rest of the industry to follow suit.

The bank’s decision will affect 56,000 borrowers in 23 states where allegations of forged documents and signatures and other similar problems are being used to try to overturn court-ordered evictions. Yet the impact may be much broader, given J.P. Morgan’s stature in the industry. If other banks adopt the same approach, the foreclosure process in many parts of the country will grind to a halt.

Officials at Fitch Ratings, a credit-rating firm that measures the health of companies, said the “defects” found in foreclosure documents at J.P. Morgan are industry-wide. Underscoring that concern, Fitch said it is considering whether to lower the grades it gives to the mortgage servicing divisions of the nation’s largest lenders.

“Over the next few weeks, we expect to see more and more companies come out with similar announcements,” said Diane Pendley, a managing director at Fitch.

The paperwork problems at J.P. Morgan mirror those uncovered last week at another large mortgage lender, Ally Financial. But J.P. Morgan’s decision is expected to have a much greater effect on the industry because it is held in high regard by its peers. By contrast, Ally, formerly known as GMAC, is still under the cloud of a $17 billion federal bailout package that it has been unable to pay back.

Both firms are investigating whether foreclosure files were improperly assembled, and whether their employees failed to review the documents even as they signed off on them. A growing number of homeowners – even those who missed their mortgage payments – are now scrambling to challenge the proceedings, weighing down an already overburdened court system.

J.P. Morgan had declined to address the matter until Wednesday. But in a sworn deposition, one of the bank’s employees, Beth Ann Cottrell, admitted that she and her team signed off on about 18,000 foreclosures a month without checking whether they were justified.

J.P. Morgan spokesman Tom Kelly said Wednesday that the firm “does not expect to find any factual problems or that customers have been harmed, but if we do find any cases we will take appropriate action.”

In addition to the measures that private lenders have taken, four states – California, Colorado, Connecticut and Illinois – have called for a moratorium on all foreclosures initiated by Ally, while attorneys general in seven other states have opened civil or criminal investigations related to flawed foreclosures.

Even as the extent of the problems has become more apparent, the Treasury Department has declined to answer specific questions about the matter since it surfaced last week.

On Wednesday, Treasury spokesman Mark Paustenbach said that officials have been in touch with Ally and that they expect it to take “prompt action to correct any errors.” He added that the agency is “monitoring their progress.”

Treasury officials raised the issue personally with Ally chief executive Michael Carpenter during a recent meeting, according to an administration official.

Yet the agency’s response has frustrated some consumer advocates. A few lawmakers have also called for investigations of whether homeowners are being improperly removed from their homes.

Sen. Al Franken (D-Minn.) said Wednesday that the Treasury Department and relevant federal agencies should begin their own inquiry.

“With millions of families losing their homes, it’s inexcusable for companies like Ally to be this patently negligent,” he said. “I want the federal government to hold Ally accountable and ensure that homeowners who wrongly received foreclosure get the compensation they deserve.”

Ira Rheingold, director of the National Association of Consumer Advocates, criticized the Treasury Department, saying it has not been forthcoming about what actions it is taking to the remedy the situation.

The agency has been “protecting servicers and investors and doing what is minimally possible to help homeowners,” he said.

Other consumer advocates say administration officials face a no-win situation. If they determine there is no reason to take action, they may be criticized for not helping homeowners. But taking extreme measures such as calling for a national moratorium on foreclosures could hurt the economy and damage the housing market.

Mark Zandi, chief economist for Moodys.com, said that, in the worst-case scenario, the document-processing problems could lengthen the foreclosure process from three years to as long as a decade, especially if homeowners use the flawed paperwork to appeal their evictions.

The long holdup could have “macroeconomic consequences” as a destabilizing force on housing prices. Banks could become more unwilling to extend credit to households or to small-business owners who use homes as collateral. And investors who had been keeping home prices propped up by buying foreclosures may stop and never come back.

He added, however, that it is still an open question how the courts will handle the paperwork problems.

Ally officials on Wednesday declined to comment on any ongoing or potential investigations, but they have said that they are confident that “the processing errors did not result in any inappropriate foreclosures.”

Company officials have declined to disclose how many loans may be affected and how much remedying the issue might cost, but spokeswoman Gina Proia said the firm “does not anticipate significant adverse effect on Ally related to this matter.”

This may be one of the most important posts I have ever published.

We have reached a point in the housing crisis where we must decide:  Continue to cower before and believe whatever the bank’s attorneys claim OR ask for proof of their claims?

Quite simply, why won’t you let the dog sniff your locker?

Right now we’re assisting a homeowner who has three different “banks” all pursing him for the SAME loan!!

Time and time again the foreclosure mills and/or the banks they represent them seem to have no problem fabricating the documents necessary to “claim” ownership of the mortgage.

Take a trip with us down to the courthouse and see the shenanigans these people play.

Below is an article highlighting how JP Morgan Chase is no different than any of the other large banks and is willing to do whatever they see as fit to establish their claims and legitimize their seizure of a person home many time AFTER the loan has been paid off.

GMAC is making headline news for their role in supporting an industry that makes its living pumping out fabricated documents at the rate of 10,000+ a month or 1 per minute.

I incorporated Neil Garfield’s comments from his site as well as they are important in understanding what is happening.

Just think…we’re supposed to trust these people with our money?!?

- The Bank Slayer

“As basis for the legal case, WaMu had submitted an assignment of mortgage, which however the court just found never actually belonged to WaMu, and instead was carried on the books of Fannie Mae.”

NEIL GARFIELD’S NOTE: It’s an old story to us but it’s news to everyone else. Yes it IS fraud, and all you have to do is look, inquire and aggressively press the opposition.

Just like Wells Fargo in Massachusetts, GMAC now in 23 states so far, the story is always the same — the lawyer doesn’t know who he/she represents and doesn’t care, the documents submitted are fabricated and forged and the representation that the would-be forecloser is a creditor is a plan and simple lie — only revealed AFTER they are pressed to support their claim of standing, real party in interest, holder of the note etc.

ALL the foreclosures and notices of sale, motions to lift stay, motions for summary judgment start the same way. Some party picked at random from the securitization chain comes in and starts a foreclosure sale (non-judicial) or a foreclosure lawsuit after documents are fabricated showing a chain of title that never happened and doesn’t exist.

MOST of the time borrowers and the Courts are intimidated by the presence of a “Bank” (which is neither acting as a bank nor was it the lender, creditor, or payee at any point in the process of the closing of the transaction between the homeowner as borrower and the investor as lender).

SOME of the time, borrowers are successful in their challenges to the foreclosure. The reason is not that the rest of the foreclosures are proper, right, legal or equitable. The reason is that in those cases where the borrower is successful they managed to get the Judge to pause long enough to actually look at the documents being presented and to allow the borrower to inquire as to their authenticity and authority. If there is such an inquiry the borrower wins. If there is no such inquiry, the borrower loses.

ALL of the proceedings in which foreclosures were initiated in both non-judicial and judicial states are fatally defective and has resulted in a pile of debris called “title” when in fact no title has been transferred, no credit bid was ever submitted and no deed was issued with authority from a party who possessed the right to convey title.

Each day an angry judge realizes he/she has been duped for years by these antics of people he knew and trusted. Criminal acts, contemptuous of the law and the Courts have been committed in millions of foreclosures.

None of the agencies that are charged with responsibility to regulate the activities of these banks, institutions or companies has lifted a finger to impose existing rules and regulations that were designed to prevent this behavior and punish it when it occurs. None of the Courts want to apply clear Federal law on the subject in the Truth in Lending Act and the Real Estate Settlement and Procedures Act. Because when it comes right down to it, the facts unfolding in the lead news stories and in the court orders being entered are downright unthinkable.

We have now come to that fork in the road where we must stop anyone who asks”why would they lie?” and simply admit that it has ALL been a BIG LIE and we have been living this lie for 10 years, hence the name of this blog.

So there is no mistake about it I am stating the opinion that NONE of the foreclosure sales on residential property in which the loan was originated as part of a securitization scheme are valid. They are void. If you think you lost your home you’re wrong no matter what anyone tells you. Any lawyer who studies this instead of responding from a knee-jerk “I remember that issue from law school” will come to the same conclusion — the title chain is not just clouded, it is fatally defective. That means the foreclosures were void according to existing law. It is the same effect as if I signed a warranty deed conveying title to YOUR home now. Such a document might LOOK good, but it is fraudulent, because I don’t have the title to convey much less warrant that it is good title.

But if Judge won’t let you speak or won’t even consider the possibility that I would flat out lie and file a totally fraudulent deed, I’ll win and you’ll lose. That’s what is happening.

JPMorgan Brings Foreclosure Case In Mortgage In Which It Was Just A Servicer, Court Finds Bank Committed Fraud

Submitted by Tyler Durden on 09/16/2010 16:37 -0500

• Fannie Mae
• Florida
• WaMu

An interesting development out of Jean Johnson, Circuit Judge in Duval Country, Florida, where in a case filed by JPMorgan/WaMu, as Plaintiff, and law firm of Shapiro and Fishman, attempted to evict defendants Hank and Marilyn Pocopanni. As basis for the legal case, WaMu had submitted an assignment of mortgage, which however the court just found never actually belonged to WaMu, and instead was carried on the books of Fannie Mae.

Once this was uncovered is where this case gets really interesting: In point 5 of the filing we read that the “plaintiff predecessor counsel made “clerical errors” when it represented to the Court that the plaintiff was the owner and holder of the note and mortgage rather than the servicer for the owner.”  Which means that only Fannie had the right to foreclose upon the Pocopannis, yet JPM, as servicer, decided to take that liberty itself.

And here the Judge got really angry: “The court finds WAMU, with the assistance of its previous counsel, Shapiro and Fishman, submitted the assignment when [they] knew that only Fannie Mae was entitled to foreclose on the Mortgage, and that WAMU never owned or held the note and Mortgage.” And, oops, “the Court finds by clear and convincing evidence that WAMU, Chase and Shapiro & Fishman committed fraud on this Court” and that these “acts committed by WAMU, Chase and Shapiro amount to a “knowing deception intended to prevent the defendants from discovery essential to defending the claim” and are therefore fraud.

While the Judge in this case did not also find declaratory damages against the plaintiff, and while the case of the defendants is unclear (we would expect Fannie to file a foreclosure act on its own soon enough), the question of just how pervasive this form of “fraud” in the judicial system is certainly relevant. Because if JPM takes the liberty of foreclosing on mortgages as merely servicer, when it has no legal ground for such an action, who knows how many such cases the legal system is currently clogged up with. The implications for the REO and foreclosures track for banks could be dire as a result of this ruling, as this could severely impact the ongoing attempt by banks to hide as much excess inventory in their books in the quietest way possible.

Our advice to any party caught in a foreclosure process is to immediately go to www.fnma.com and use the Lookup Tool to see if Fannie is still mortgage owner of record, if a foreclosure suit has been brought up by a plaintiff other than the GSE. (Neil  Garfield’s Note: He’s not exactly right here. All you will know is that FNMA claims on its site that it is the owner. The “owner of record” is the party who shows up in the title search of the only place that counts — the county recording office — which is why we tell everyone to get that from us or another party. 99 times out of 100 the “owner of record” is the originating lender who is often out of business — and THAT is why I insist on repeating that these loans are not and never were secured and that no security instrument has ever or could be filed for perfecting a lien on the home.)

A reader and rabid investigator sent this piece to me just moments ago.

Tom Cox an attorney in Portland Maine has succeeded in getting Jeffrey Stephan’s Summary Judgment overturned and substitute trustee affidavits withdrawn.

This is a result of several depositions taken with Jeffrey Stephan at GMAC.  Stephan admitted to signing up to 10,000 of the assignments of Deeds and Mortgages a month with his 13 man team.

This computed to 1 a minute.  He admitted to not verifying who the noteholder is, and he admitted to notary fraud.

As a result, GMAC has withdrawn foreclosures in 23 states as of today.  The Maine attorney general is investigating this matter for perjury charges and other criminal charges against Stephan and others.

Bloomberg is reporting (as seen below) the specific states that are affected by this situation.  If GMAC is your mortgage servicer EVEN in Texas, which is not on the list, you may have grounds for slowing and/or halting a foreclosure sale.

- The Bank Slayer

Ally’s GMAC Mortgage Halts Home Foreclosures in 23 States

Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.

GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to stop evictions, cash-for-key transactions and lockouts, regardless of occupant type, with immediate effect, according to the document, addressed to GMAC preferred agents.

The company will also suspend sales of properties on which it has already foreclosed. The letter tells brokers to notify buyers that the company will extend the closing date on all sales by 30 days. Buyers will be able to cancel their agreement to purchase and get their deposit back, according to the letter.

GMAC Mortgage ranked fourth among U.S. home-loan originators in the first six months of this year, with $26 billion of mortgages, according to industry newsletter Inside Mortgage Finance. Wells Fargo & Co. ranked first, with $160 billion, and Citigroup Inc. was fifth, with $25 billion.

GMAC was created in 1919 to provide financing for buyers of General Motors Co.’s vehicles. GMAC converted into a bank holding company in 2008 as it received more than $17 billion of government funds during the financial crisis. It rebranded itself Ally Financial last year, and continues to offer auto loans and mortgages.

Following is a table of the affected states.

Connecticut
Florida
Hawaii
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Nebraska
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
South Carolina
South Dakota
Vermont
Wisconsin



The answer is very likely YES; as in both.

If you are listing and selling short sales then your seller very likely needs not only you as a licensed agent to sell the real estate (and we recommend only the use of REALTORS in good standing with their local boards and MLS) but also the use of an attorney.

Why?  Very simply you as the listing agent are inherently making recommendations to the seller about the outcome of his debt associated with his or her’s mortgage.  During a short sale, you are drawing, delivering and recommending to the seller a legal conclusion and the impacts it may have on his obligations to the debt.

Most large mortgage banks such as Bank of America, Chase, Citi, GMAC & Wells Fargo are pursing the seller for the deficiency between the net to them during the sale and the amount owed by the homeowner.  As the REALTOR you don’t want any part of suggesting to a homeowner that a short sale will resolve the situation.

What to do about it?

1. Don’t create your own “special forms” or copy others to use in your seller’s short sales.  This is strictly forbidden.
2. Have the seller hire the attorney to do the “legal” work.  While you focus on seller the home.
3. Don’t try to sneak extra fees by the bank that you are not licensed to collect.

As most licensed agent know, lawyers are prohibited from receiving commission as part of a real estate transaction (unless the have a real estate license).  Furthermore, most reputable lawyers don’t want to practice real estate.  They simply want the best deal for the client (seller).

Below is information from the mandated Legal Update that most agents are required to take for MCE.

- The Bank Slayer

Brokers and the Unauthorized Practice of Law

Chapter 81 of the Government Code defines the practice of law and prohibits persons who are not licensed attorneys from practicing law.

TREC rules are clear on limitations that licensees must follow with respect to such matters.

TREC rules (22 TAC §537.11) state that when negotiating contracts binding the sale, exchange, option, lease or rental of any interest in real property, a real estate licensee shall use only those contract forms promulgated by TREC.

The only exceptions to the foregoing rule are:

• transactions in which the licensee is functioning solely as a principal, not as an agent;
• transactions in which a governmental agency requires a different form;
• transactions for which a contract form has been prepared by the property owner or prepared by an attorney and required by the property owner;
• transactions for which no form has been promulgated by TREC, and the licensee uses a form prepared by a Texas-licensed attorney and which is approved by the attorney for the particular kind of transaction involved.

The rule continues and provides that the licensee may NOT:

• practice law, offer, give nor attempt to give legal advice, directly or indirectly;
• act as a public conveyance;
• give advice or opinions as to the legal effect of any contracts or other such instruments;
• give opinions concerning the status or validity of title to real estate;
• attempt to prevent nor discourage any principal from employing a lawyer; and
• draw or prepare documents fixing and defining the legal rights of the principals to a transaction.

The foregoing does not limit the licensee’s fiduciary obligation to disclose all pertinent facts that are within the knowledge of the licensee, including such facts that might affect the status of or title to real estate. When completing real estate forms, the licensee may fill in only the blanks provided. The licensee may not add to or strike matter from the form except that the licensee may add factual statements and business details desired by the principals and may strike only matter that is desired by the principals and as is necessary to conform the instrument to the intent of the parties.

If there is a promulgated addendum, lease or other form that addresses a factual statement or business detail, the licensee must use that form to address the factual statement or business detail.

The rules do not prevent the licensee from explaining to the parties the meaning of the factual statements and business details contained as long as the licensee does not offer or give legal advice.

The rules also expressly state that when it appears that there are unusual matters involved in the transaction (which should be resolved by legal counsel before the instrument is executed) or that the instrument is to be acknowledged and filed for record, the licensee shall advise the principals that each should consult an attorney.

Finally, a licensee may not employ, directly or indirectly, an attorney nor pay for the services of an attorney to represent any principal to a real estate transaction in which the licensee is acting as an agent. The licensee may employ and pay for the services of an attorney to represent only the licensee in a real estate transaction, including preparation of the contract, agreement, or other legal instruments to be executed by the principals to the transactions.

It is interesting to note that the subject of the vast majority of litigation involving TREC forms has been the language inserted into special provisions or other blanks in the contract forms. A poorly drafted clause can lead to placing the licensee in a precarious position if the language inserted in special provisions or other blanks is the cause or source of the dispute.

Homeowners & agents nationwide are confused.  What is Equator and how does it impact my short sale?   In this blog let’s examine the negatives and then finally what to do with Equator.

Thinking about taking on a new short sale?  REALTORS take note, Equator is the new “in thing” for Bank of America and now GMAC as well.  What used to be REOTrans has been upgraded and is now the new Short Sale Equator system.  We have been testing as well as using it for months and here is what we have discovered.

The negatives?

1. Internet access required.  The homeowner must create a userid on the system and have regular access to respond and upload docs.  I guess they assume all homeowners have unlimited access to scanners and the internet, but if not they must have extra money to buy what they need, right?
2. Behind the curtain, the process is still the same.  It is really nothing more than an automated hurry up and wait system.   You knock off all the tasks (like faxing, calling, and emailing the old way) and then wait on the bank for someone to be assigned to the account and review the uploaded docs.
3. It’s very impersonal.  The negotiators hide behind Equator and/or use it as an excuse for not responding.  Before Equator, the negotiators resisted giving out their email address but sometimes would and eventually you could have a conversation with a real thinking human being.  Now, everything has to be input into Equator virtually limiting as much as possible the human to human interaction.
4. Unreasonable demands.  The bank can and does take as much time as they want but every communication in Equator concludes with “if this is not responded to within 24 hours the file will be closed.”  Remember the part about “better make sure your seller has constant access to the internet?”
5. Unilateral negotiations.  Counteroffers by the negotiator through Equator are not always “accurate” per management or the investor’s (Freddie, Fannie and others) guidelines.  This leads to acceptance of an offer or counter and then it later being reneged upon.
6. Unfair trade practices.  The negotiator will attempt to reduce the REALTOR’s commission to the “standard” 4% or 5% or refuse to pay for seller’s portion of title insurance or eliminate entirely all title company fees or make unreasonable demands of other lien holders or POAs and HOAs.
7. Escalation improbable.  Not satisfied with a response or feel you’re not being treated fairly?  Please enter your complaint in the following field, include your name, number, best time to call and exact nature of your complaint, any incomplete forms will limit our ability to respond–limit your response to 24 characters.  Ok, the 24 characters part is not true.
8. GMAC has to submit its own files in Equator versus the agent doing it and starting the process.
9. If you like Equator it is not available (currently) for FHA-insured short sales.

- The Bank Slayer

This is an update on Equator.  We now have the top Tips and Trap to be sucessesful versus failure.  CLICK HERE FOR BANK INSIDERS TIPS & TRAPS.

Homeowners & agents nationwide are confused.  What is Equator and how does it impact my short sale?   In this blog let’s examine the positives…up next the negatives and then finally what to do with Equator.

PART 1

Thinking about taking on a new short sale?  REALTORS take note, Equator is the new “in thing” for Bank of America and now GMAC as well.  What used to be REOTrans has been upgraded and is now the new Short Sale Equator system.  We have been testing as well as using it for months and here is what we have discovered.

Let’s start with the positives, in theory.

1. No more long hold times and mysterious disconnects.  In a nutshell, they are pushing the loss mitigation work out of the bank and down to the homeowner, attorney, REALTORS, loss mitigation counselors and anyone else in the loop.  If you have the time, a good scanner and fast internet connection AND the homeowner does as well AND you are really on top of your game this could be reason enough to celebrate.
2. BYE, BYE fax machine and “we never got your fax”.  We used to hear this often during negotiations of short sale and loan mods with Bank O’ UnAmerica.    Their theory is an “upload” of the docs instead of faxing 90+ pages and then waiting for the bank to “scan and file” will streamline the process.
3. The system is online and thus always available.  Provided there are no scheduled, or unscheduled, maintenance windows.  Recall how the old system was always “slow” or “unavailable” at the end of the month?
4. Faster access to decision makers.  The negotiators should be assigned more quickly than before Equator.  This could be a real bonus since the front-line customer service processors  can’t do anything.
5. Faster response time.  Since the bank has less responsibility because they have pushed all the tasks out to you, they should be able to respond more quickly.  Sounds nice doesn’t it.
6. Costs less.  More automation, fewer people and less human-customer interaction are all good for the bottom line, Bank of America’s bottom line that is.
7. Tastes great.  Giving the customer access to the “system” makes them feel more involved and more empowered.  Fake silk feels just as nice as real silk, only it’s not.
8. Since Equator requires the internet, you and the homeowner can surf the net or play online poker while at work and not get in trouble for goofing off since you need to “check Equator” for your next task.
9. If you hate Equator, currently FHA-insured short sales are not permitted to go through Equator.

- The Bank Slayer