We have attached an excellent document produced by Reuters that gives a good overview of not only the problems with robo-signers but explains the facts surrounding missing mortgage paperwork that is suddenly found – albeit maybe with different signatures and fabricated legal affidavits.

Click HERE —>  Mortgage Mess Robo Signers Return – Reuters Report May 2011

If you want to see how the bank or their lawyers can fake your signature check this machine out  —> Auto Signer

Here is an example of different signatures for the same person.

On the surface this looks like a win for the investors who lost billions when they bought lousy and in many cases FAKE mortgage backed securities.   But the question for Henry Homeowner who is wrestling with his own mortgage woes is, what does this mean to me?  Will I benefit from this “win”?

I have posted below comments and editorial from Neil Garfield @ LivingLies, Christine Riccardi @ Housing Wire, and a related post from the Subprime Shakeout website.

As far as my take…Let’s see the specific 530 RMBS to which this cases was pointed.  If your mortgage is inside (or was supposed to be inside) one of these allegedly held in Trust by the Bank of New York Mellon then you should have a leg up on BofA, as to your rights as a borrower and BofA as the servicer.  We’ll see.

- The Bank Slayer

NEIL GARFIELD COMMENTS & NOTE: The investors put up the money for the funding of mortgage transactions with BOA and other investment banking operations brokering the deal. Now BOA is about to pay the largest settlement to investors so far. The real question is that if the investors were the real creditors, which they were, then the obligation from borrowers should be prorated downward. If BOA is buying these pools that were never filled it doesn’t mean that the pools gain any more credibility as having the assets claimed for the pool than they had before.

And if BOA wants to move into the shoes of the investors they are faced with the same conundrum that the investors had when they decided to abandon claims against homeowners and seek redress from BOA, to wit: do they really want to move directly into the line of fire of a hail of defenses, affirmative defenses and counterclaims for predatory and fraudulent lending? And is there anyway that they can say that their claim was secured when the loans were never transferred by proper documentation or delivery?

This is a classic PR move for Wall Street. This is a fake scenario in which the true liability is being masked by a friendly deal. They are taking hundreds of billions and probably trillions in liability and attempting to distill it down to what appears to be a large a number but in reality is less than 1% of the total liability. This isn’t the end of it even if they want it to be.

But in the meanwhile, brokers and investors will be hearing what they want to hear and BOA stock will inch up a bit.

The reality is that these bonds are worthless  and always were worthless. Any balance sheet item anywhere is a fake if it is based upon mortgages or mortgage bonds whose value is derived from mortgage loans.

The loans were not originated in a standard contractual manner — the borrower and the lender were shown, and each agreed, to two different sets of documents. They treated the loans as if they were transferred but never actually transferred them. So the mortgage was invalid at inception and even if it wasn’t, is not perfected as a lien. The amount due is clearly effected by these settlements, but more than that, we can see that the investors as creditors have clearly abandoned their claims against the so-called borrowers

Investors, creditors stand to benefit from BofA settlement (Housing Wire)

Posted By CHRISTINE RICCIARDI On June 29, 2011 @ 12:33 pm | No Comments

The $8.5 billion Bank of America (BAC^[1]: 11.14 0.00%) settlement with investors of residential mortgage-backed securities issued by Countrywide Financial Corp., which the banking giant acquired in 2008, will have positive ramifications for both creditors and investors, according to analysts throughout the industry.

Bank of America reached an agreement^[2] with Bank of New York Mellon (BK^[3]: 25.44 0.00%), which served as trustee for 530 RMBS trust with a total balance of $424 billion, to reimburse investors who lost money on failed securities.

Barclays Capital analysts said Countrywide deals and other nonagency RMBS will now be more attractive to investors because of the potential return. For the most part, Barclays said, nonagency investors only assume small benefits from rep-and-warranty-related repurchases.

“A less negative (or positive) development on any of the (housing) issues could help alleviate price pressures,” Barclays said. “We believe the headline housing data will improve in the coming months, roll rates will continue to improve and this news should help nonagency prices.”

Barclays analysts expect cash flow from the settlement will most likely filter into the trusts that represent 226 deals involved in the complaint, thereby benefiting Countrywide cash flows, “as these effectively come in as faster prepays and reduce total losses.” Cash flows on Alt-A securities might hit senior mezzanine and even junior mezzanine loans, Barclays said. Subprime bonds should also benefit.

“Deals as part of the settlement could see a direct benefit of 8 to 10 points of additional cash flow,” analysts said. “Even if we assume that the settlement covers all of Countrywide outstanding ($285 billion), the benefit would be at least three to five points of additional cash flow.”

The $8.5 billion settlement represents about 10.8% of the $79 billion outstanding on the list of Countrywide deals repurchased by BofA. The original balance of all these securities was $179 billion. BofA is paying about 4.8% of that original balance, Barclays said.

Moody’s Investors Service said the settlement, alongside its $5.5 billion reps and warranties payout, reduces BofA’s potential exposure to higher losses under a stress scenario. And while BofA’s earnings will undoubtedly suffer in the second quarter, Moody’s expects the bank’s capital ratios to remain above the same period of 2010.

“The costs incurred are at the high end of the range that Moody’s had previously estimated Bank of America might be required to pay to resolve these matters,” said David Fanger, Moody’s senior vice president. “However, following today’s settlement and the announced addition to reserves, Moody’s believes that (BofA’s) remaining representation and warranty exposures are no longer a negative credit concern.”

On June 2, Moody’s placed the banking giant on review for possible downgrade^[4], saying analysts will evaluate the bank’s standalone financial strength to see if credit-risk improvements were made over the past few years. Moody’s expects the settlement will have positive credit implications.

BofA’s overall liability for Countrywide assets could reach $24 billion, according to Barclays based on the percentage of deals in the settlement. However, other securities could be concentrated in cleaner vintages, Barclays said.

Bank of America’s stock closed at $10.82 Tuesday after word of the settlement leaked. Shares of the component of the Dow Jones Industrial Average opened at $11.15 Wednesday, and activity in BofA is helping push the DJIA toward three days of gains^[5].

Breaking News: BofA Close to Reaching $8.5 bn Settlement with
BlackRock, PIMCO (100th Post)
Posted By igradman On June 29, 2011 (12:10 am)

As part of the Subprime Shakeout’s 100th Post (woo-hoo!), I bring you an analysis of some big, breaking news: today, the Wall Street Journal reported that Bank of America was closing in on an agreement with the
investor group led by Kathy Patrick to pay $8.5 billion to settle claims over mortgage backed securities.  If true, this would be the largest MBS settlement to date arising out of the mortgage crisis.

I first reported on this investor effort back in October 2010.  You can find my initial take here, a link to the demand letter sent by Patrick here, and a link to the response fired off by BofA here.
While we heard early in 2011 that the parties would extend all deadlines while they negotiated, we had heard very little about the progress of these efforts until today.

While the details of the purported settlement are sketchy, the WSJ report states that the current investor group includes 22 institutions, including BlackRock, PIMCO, the New York Fed, MetLife
and Freddie Mac, which collectively hold $56 billion worth of mid-2000s vintage MBS.  Though it did not report on any impending settlement, Bloomberg also published an article today on these
negotiations, and stated that the value of the securities at issue was $84 billion, while the original principal value of the securities was $182 billion.  While it is not entirely clear how these numbers line
up, my best guess is that the investor group holds approximately $56 billion of the $84 billion outstanding.

What’s also unclear is how much of the reduction in the value of the bonds at issue is as a result of pay-downs and prepayments, and how much is as a result of the trusts taking losses on foreclosed properties.  Thus, it is difficult to assess what percentage of potential damages from investor claims is being born by BofA under the settlement.  My initial reaction is that, while the absolute dollar amount sounds large, this settlement is ultimately fairly small compared to the potential damages.

This result would be consistent with the consensus among commentators regarding this investor group, including some of the comments contained in today’s Bloomberg article and my initial take on this effort: namely, the investors involved have significant other business dealings with BofA (a.k.a. conflicts), and thus would not seek an aggressive settlement.  At the same time, BofA has exhibited a growing interest in resolving its legacy RMBS liability, and thus would be interested in entering into a sweetheart settlement with a prominent group of investors that would set a precedential ceiling on future recoveries and discourage other investors from coming forward.

Without seeing the terms of the settlement and the details of the group’s holdings, it’s impossible to know what claims are being released in this settlement and how the proceeds are to be shared. For example, if the group is being paid outside of the trust waterfalls, and thus receiving the entire $8.5 billion, then the investors would actually be recovering much larger proportion of their potential damages (while potentially throwing the other investors who did not participate in the settlement under the bus, either by purporting to release their claims, or by making it impossible for those other investors to gain standing to sue).

However, sources have indicated that the settlement funds will actually be paid into the trust waterfalls.  This would be ostensibly more equitable, in that all bondholders would be entitled to receive a share of the settlement proceeds, depending on their seniority. However, query how equitable it really is for a portion of the bondholders (and most likely the senior portion, since these are primarily institutional investors) to set the settlement amount for the rest of the non-participating bondholders, and to receive the lion’s share of the benefits based on their more senior bond position. Whether the investor group could or would engineer such a settlement remains to be seen.

Regardless, the fact that these investors got any money at all out of the nation’s largest bank, let alone a material dollar amount, might actually encourage other investors to come forward.  A settlement of this size would reveal that BofA’s initial rhetoric, that it would fight these claims tooth and nail until they were forced to pay, was just that–empty rhetoric.  For example, BofA CEO Brian Moynihan stated
during the company’s third quarter 2010 earnings call that, “we will go in and fight this.  It’s worked to our benefit to—we have thousands of people willing to stand and look at every one of these loans.”  Further, this settlement undermines BofA’s recent estimate that the cost of its legacy RMBS putback issues would not exceed $10 billion.  BofA cannot seriously assume that this is the only large investor group with which it will have to tangle over defective Countrywide loans.

The simple truth is that investors have significant amounts of viable repurchase and Securities Act claims stemming from their purchase of Countrywide-issued or originated MBS, and BofA will be forced to confront many additional claims by investors in the coming years.  These additional investors might not have the same level of business dealings with BofA and thus might be willing to take more aggressive steps in pursuing reimbursement for its losses.  In that case, BofA’s strategy of creating a lowball settlement to discourage investors from coming forward might end up backfiring and further eroding the already strained capital on BofA’s balance sheet.

Article taken from The Subprime Shakeout – http://www.subprimeshakeout.com
URL to article:  breaking-news-bofa-close-to-reaching-8-5-bn-settlement-with-blackrock-pimco-100th-post.html

This is very scary for anyone attempting a mortgage modification and/or short sale.  Imagine thinking that your short sale or loan modification was “in review” (we discuss this review process in another article here) then suddenly find out you are in foreclosure or worse – foreclosed already.

Sadly this happens every month in the Greater Houston area.  We work with families and their REALTORS everyday who tried to get a mortgage situation resolved only to find out they are staring down a foreclosure auction sale date in just a few days.

The article below highlights where attorneys around the nation are crying out that mortgage servicers while claiming to help homeowners AND being paid by HAMP/TARP funds to assist borrowers are instead having no qualms about dumping them into the foreclosure machine; some by accident, some on purpose.

If you are working with a homeowner or are one yourself who is attempting a short sale or mortgage modification you should always check with the foreclosure attorney EACH & EVERY month to determine if the home is posted for sale.

If they say it is on HOLD then danger, danger Will Robinson!  This means it has not been PULLED from sale (which is what you want) but is at the yellow light.  Meaning that if the foreclosure sale date comes and goes while still in hold you are safe but it could simple turn green and your sale is back on.

We have seen mortgage servicers green light foreclosure sales the SAME DAY of the sale while only the day before it was on hold.

- The Bank Slayer

Read on from the Huffington Post

Banks have started foreclosures on more than 2,500 homeowners still in the process of applying for mortgage modifications, according to a new survey of 96 consumer attorneys.

“People every single day are being put into foreclosure while they’re waiting for modifications,” said Ira Rheingold, director of the National Association of Consumer Advocates, which conducted the survey in November with the National Consumer Law Center. “It’s all related to the broken mortgage servicing system.”

The mortgage-servicing system found itself in the spotlight this fall when employees at big banks admitted in sworn depositions to signing off on foreclosure filings without verifying any of the information. Banks and the government have insisted it’s just a paperwork problem and no homeowners have been harmed.

Rheingold and other consumer attorneys argued that the unverified documentation is yet another symptom of a system that routinely seizes homes under false pretenses.

“I’m not sure whether it’s incompetence or intentional venality,” Rheingold said. “The fact they can’t modify someone’s loan and at the same time stop a foreclosure is ridiculous.”

Banks are required to evaluate all delinquent borrowers for the Obama administration’s Home Affordable Modification Program, its signature foreclosure-relief effort, and to solicit applications from borrowers who meet eligibility requirements. The program drastically reduces monthly payments for eligible borrowers, but more have been bounced from HAMP than have received “permanent” five-year modifications.

Homeowners are often shocked and confused when they discover that after they’ve been encouraged to apply for a modification, the foreclosure process has continued — even though a directive from the Treasury department this year forbade servicers from proceeding with foreclosures on HAMP applicants. The Treasury Department has not punished any servicers for breaking the program’s rules, though a watchdog report released this week said Treasury is considering witholding incentive payments for 132 modified loans. Most of the lawyers said their clients had been making payments exactly as they’d been told to by their bank.

Wednesday’s report “means there’s massive noncompliance with HAMP because there’s no enforcement mechanism,” said Diane Thompson, an expert on mortgage servicing and a lawyer for the NCLC.

The 96 attorneys said they represent more than 1,200 homeowners “who had been placed into foreclosure due to misapplication of payments, improper fees, or force-placed insurance,” according to the survey.

“I was surprised at how large the numbers were in every category,” Thompson said. “From not very many attorneys we get more than a thousand homeowners in every category being put into foreclosure wrongly.”

Foreclosure are back with a vengeance in the Greater Houston area- just in time for Christmas.

While November saw a lull in the number of homes posted for the monthly foreclosure auction, December is set to roar back with over 6,700 homes posted for sale.

Posted Homes for Foreclosure

Posted foreclosures for the Greater Houston Area total 6,732 which is a 23% jump from last month’s 5,462.   Montgomery County took the lead with a 35.8% increase over November’s posted foreclosures.  Brazoria is not far behind with a 33.1% increase in postings.  Harris County and Fort Bend County finished neck to neck with increases of 22.2% and 21% respectively.   Galveston County finally slowed down from the last few months with only a 16.8% increase.

Here we go for the December 7, 2010 sale date*.

• 4,712 vs 3,857 for November – Harris County (Houston, Pasadena, Baytown, etc.) +22.2% increase
• 326  vs  279 for November – Galveston County (Galveston, Clearlake, Texas City, etc.) +16.8% increase
• 817 vs. 675 for November – Fort Bend County (Missouri City, Sugar Land, Richmond, etc.) +21% increase
• 334 vs. 251  for November – Brazoria County (Pearland, Alvin, Lake Jackson, etc.) +33.1% increase
• 543 vs. 400 for November – Montgomery County (Montgomery, Conroe, Splendora, etc) +35.8% increase
• 6,732 – TOTAL

*data is derived from Foreclosure Information & Listing Service, Inc and The Gore Law Firm.

While many of the large banks claimed to have foreclosures on hold in October (and yes even November) so they could review their foreclosure procedures it appears they didn’t “hold” back much in the Greater Houston Area.

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).

If your client was involved in a short sale or loan modification and was foreclosed upon anyway you should immediately seek legal help and hammer the bank back into compliance.

Taking the money & the house

Don’t let them steal your real estate commission from a short sale that you worked on in good faith.   Don’t let them get away with a wrongful foreclosure and hurt the homeowner.

- The Bank Slayer

*data from Foreclosure Information & Listing Service, Inc.

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.

Although some of the largest mortgage banks (servicers of mortgages) such as Bank of America, Wells Fargo, Chase and GMAC have announced in varying releases that they are halting foreclosures while they review their procedures, they haven’t stopped posting and prepping to auction off over 5,000 homes in the Greater Houston Area.

How many folks are posted for sale tomorrow?    Yes, tomorrow – November 2, 2010.

Harris : 3,857

Brazoria: 251

Ft Bend: 675

Galveston: 279

Montgomery: 400

Total: 5,462

How many will go tomorrow?  Good question.   On average about 20-25% actually go to sale.   The best commitment most get out of the foreclosure attorneys is “that file is on HOLD.”

On Hold huh?   Like I’m holding this piece of paper…wait, not any more.  I just let it go.

Pulling the sale or postponing the sale is what we want to hear.  On Hold?  Does this mean I need to call back tomorrow and check again?

Whether you are a homeowner facing foreclosure or a concerned REALTOR assisting a family in a tough situation don’t just assume that the “On Hold” means the foreclosure is postponed.  Maybe you’ll still be on hold, maybe you won’t when the clock strikes 10:00AM on Tuesday.

If every mortgage was “on hold” then why did a couple of our homeowner clients need to secure a Temporary Restraining Order last Friday…Hmmmm.

- The Bank Slayer

Wells Fargo admitted it made mistakes in roughly 55,000 foreclosure cases.  Surprise, surprise, surprise!

Wells announced Wednesday that it will quickly “fix” these issues and re-file the necessary documents by the middle of November.

Wells called the mistakes “technical“, and it says “it has no plans to halt the foreclosure process”.

Of course, they won’t stop the foreclosure process.  I mean why stop when you can plow ahead – right or wrong.

What exactly is a technical mistake?  Is that like the time I forgot to put a stamp of my payment and it came back?    Will you credit my payment as on time because of my technical mistake?   I doubt it.   But your “technical” mistake is not just a snafu.  It is a LIE!!!  Affidavits that state items like, “I have personal knowledge of this account and the balance owed.  I have personal knowledge that the owner of the debt is XYZ.”    Really?

Depositions of two Wells Fargo employees have called the company’s foreclosure practices into question. One employee said that she signed between 300-500 foreclosure documents a day, while another employee admitted to only verifying dates on the documents he signed daily.

The entire foreclosure application and judicial process is supposed to be built around substantiated facts.  Rolling into court, holding up a sworn affidavit which no one has read it, and declaring who owns the debt and the amount owed is just wrong.

We're coming for you!

It really gets me fired up when they say, “We don’t believe that there are instances in which the foreclosures would not have occurred otherwise,” Teri Schrettenbrunner, a Wells Fargo spokeswoman, said.

If this is so then why do we have people in our office facing foreclosure when they have MADE THEIR PAYMENTS!   Innocent as well as “guilty” people are being swept up in the rush to foreclose.  The facts need to be verified!

Why don’t we just lock people up because they appear so guilty that it is obvious that they deserve jail time.  What happened to due process?

- The Bank Slayer

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