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MERS tries to hide. No more foreclosing in MERS’ name.

admin — Tue, 02 Aug 2011 19:45:49 +0000

In Texas we have noticed foreclosures in the name of MERS have suddenly become VERY rare. We haven’t run across one in several months.

Does this mean MERS has vanished?

Nope, but the mortgage servicers are downplaying the role of MERS and trying to shield MERS and themselves from the bright light.

This means you need to dig a little deeper to uncover really what is going on behind the curtain.

The article below from Reuters highlights MERS’ recent announcement to its members and 20,000+ “officers” that they need to leave out MERS’ name in foreclosure proceedings.

If you or someone you know is facing a mortgage hardship or foreclosure contact our office immediately.

- The Bank Slayer

Exclusive: Facing criticism, MERS cuts role in foreclosures

(Reuters) – MERS, the electronic mortgage registry that faces multiple investigations for its role in thousands of problematic foreclosure cases, changed its rules to lower its profile in court-supervised foreclosures.

MERS, a unit of Merscorp Inc. of Reston, Virginia, owns the computerized registry, Mortgage Electronic Registration Systems. Mortgage loan giants Fannie Mae and Freddie Mac and several of the largest U.S. banks established MERS in 1995 to circumvent the costly and cumbersome process of transferring ownership of mortgages and recording the changes with county clerks.

In rule changes announced to MERS members on July 21, the company forbade members to file any more foreclosure actions in MERS’s name.

It also required mortgage servicers to obtain mortgage assignments and record them with county clerks before beginning foreclosures.

Mortgage-loan servicers perform routine duties for the investment trusts that own pools of mortgages, including collecting mortgage payments and, when necessary, filing foreclosures.

Although these trusts are legally required to own the mortgages when they file to foreclose, the servicers in many cases did not obtain documents known as assignments on their behalf until weeks or months after launching a foreclosure action in court, a recent Reuters Special Report found. (link.reuters.com/kyb72s)

Since the collapse of the housing boom, many foreclosure cases were filed in MERS’s name, even though the registry doesn’t really own either the mortgage or the promissory note, the document which states the terms of the mortgage loan.

MERS’s role in foreclosure cases has made it a lightning rod in recent months in court decisions which have held that loan servicers’ use of the registry violates basic real estate and mortgage laws.

In the last week, state attorneys general in Massachusetts and Delaware have announced investigations of MERS, and several other states have broader inquiries into foreclosure practices that include MERS.

It is unclear how much the rule changes will help MERS with its legal problems.

Under the new rules, servicers are required to stop filing foreclosures in MERS’s name, but MERS’s role in foreclosures won’t actually be eliminated. The servicers will continue to obtain the needed mortgage assignments from MERS. In past cases examined by Reuters, such assignments have included ones of questionable legitimacy, such as mortgages owned by now-defunct lenders.

O. Max Gardner III, a North Carolina lawyer who is specialist in foreclosure actions in bankruptcy courts, said the change will have the effect of making MERS’s role in assigning mortgages invisible in court.

The assignments will still come from MERS, but “they just won’t be in the court files any more,” he said.

MERS spokeswoman Janice Smith said the new rules make mandatory a trend that already was under way.

She noted that Fannie Mae, Freddie Mac and several large banks already had stopped filing foreclosures in MERS name. Smith said the change would avoid confusing homeowners facing foreclosure by eliminating MERS, a company they had never heard of, from court documents.

She also said that MERS’ s original purpose was to keep track of changes in servicers and mortgage ownership. “Foreclosure really was not central to MERS’s core business,” she said, adding that MERS received no income from foreclosures.

Mortgage-law specialists say that lenders and servicers for a long time relied heavily on bringing foreclosures in MERS’s name. This helped make possible foreclosures that otherwise might not have taken place because the necessary original documents were missing.

MERS says that it is the holder of record of 32 million, or 60 per cent, of U.S. mortgages. But it has only a handful of employees. Instead, it has designated some 20,000 employees of banks and other servicers as MERS “officers.”

Some courts and homeowners’ lawyers have criticized this system because in effect it enables servicers to assign mortgages to themselves whenever they needed one to foreclose.

The rule change also comes amid a growing movement against MERS among county clerks around the U.S. They have been pressing state attorneys general and local prosecutors to investigate MERS for allegedly failing to record documents with them and pay the associated filing fees. The rule change, by requiring servicers to record mortgage assignments sooner and pay recording fees, will partly address the clerks’ concerns.

(Editing by Michael Williams)

Short Sale Nightmare: Seller & Buyer sued by Fannie Mae & MERS

admin — Thu, 14 Jul 2011 13:50:13 +0000

SHOCKER!! Buyer of a short sale doesn’t own the property he just purchased (or does he?). Seller of the short sale paid off the wrong party (or did he?).

The below email was sent to Neil Garfield at Living Lies. Sadly this is not shocking at we know of two other lawsuits where the seller and the buyer acted in good faith and sold the property and the money was sent to BofA (and MERS was involved as well) and later the “real” owner of the deed of trust came forward and demanded that the transaction be undone due to a mistaken release of the deed of trust by the wrong party.

What does this mean to a real estate agent involved in the transaction?

Get an attorney involved – preferably BEFORE the short sale closes. Why? Quite simply you need to make sure that the transaction is buttoned up tight. Many of the short sales that involve an attorney and litigation against the pretender lender will require a settlement agreement to be signed at closing (or at least have enough documentation that the seller & buyer have some ground to stand on).

But what does a settlement agreement do and how does it help you as the real estate agent?

First, the pretender lender whose is receiving the proceeds of the short sale “swears” they are the real lender or working for the real lender (like Fannie Mae). Second, a well crafted settlement agreement will indemnify the seller (or whichever parties are named) – meaning that the lender getting the money has to defend the seller if they are sued over the specifics related to the settlement, i.e. the short sale.

Does the buyer lose the house and does the real estate agent have to give back their commission?

Very likely the answer is no. But you will have to hire an attorney to fight this battle for you. The title company should be on the hook for the value of the home – meaning they will either have to pay off the “real” lender or the new homeowner. The downside is that it could cost more than the commission just to fight this type of suit AND the title insurance is only good for the amount of the policy (if the house was bought for less than full value or thousands of dollars in updates/remodeling has been performed you could lose this amount).

Bottom Line

Short sales and even purchasing foreclosure can be great equity and value builders for the buyers and assist the seller with disposing of a property but a good title company and good lawyer can help you keep this value hopefully keep your sanity and commission.

Seek legal counsel from a real estate attorney and one who has experience in dealing with short sale and foreclosure.

- The Bank Slayer

Duane DeSalvo

Licensed Real Estate Agent

Camarillo, CA

July 04, 2011

OMG! Just when you think you’ve seen it all, along comes a new horror story that makes the thought of doing short sales even more disgusting than before!!

Because of our intense hatred of all banks (BofA and Chase head the top of the list) we decided to stop doing short sales, and most conventional real estate transaction last summer and have been buying and flipping properties instead!

The last short sale we did was one we were referred to in October of 2009 (no good deed goes unpunished!!). The client (Tom) had recently lost his job due to downsizing and, to make matters worse, his mother had been diagnosed with a life threatening disease. There was no way we could turn this opportunity down to assist him so we took the listing on his one bedroom condo in southern California. He had purchase it in 2007 for $224K and we figured the current value was about $125K. We put it on the market and got an offer for $130K within a couple of weeks! Tom moved out of state to assist his mother in her remaining days on earth and we were happy to have an offer. After 5 months of negotiating with BofA (loan servicer) with 2 different negotiators, we finally got approval for a sale price of $123k!! (First negotiator said it was worth $180K!!!- Surprise)!

We closed the deal in April, 2010 and both the Seller and Buyer were ecstatic! All was right with the world!

Fast forward to July 2011! Last week, we received a document from our Seller that he had received. Are you sitting down? It was a LAW SUIT on behalf of MERS and Fannie Mae (Plaintiffs) against the Seller and Buyer (Defendants) and a possible 23 other defendants, (Does) who are at this point unnamed!

The Law Suit maintains that: ————”The Substitution of Trustee and Full Reconveyance on the County records which purports to reconvey MERS’s interest in the property is a mistake and was not properly prepared or recorded by ReconTrust. An actual controversy has arisen and now exists between Plaintiffs and Defendants concerning their respective rights and duties in that Plaintiffs contend that the Substitution of Trustee and Full Reconveyance is a mistake and, therefore, of no force or effect which should be stricken from the public records and that Fannie Mae’s Deed of Trust is valid and enforceable.!”

WTF!!!! I thought that the movie Too Big To Fail was unbelievable but this is ABSOLUTELY INCREDIBLE!!! Here is MERS (those bastards who were identified on 60 minutes as putting phony signatures on thousands of mortgage documents) maintaining that Recon Trust (not a party to the suit) MADE A FRIGGIN MISTAKE? They did not properly prepare or record the reconveyance of the loan!!!

To top it off, the scum sucking lawyers (and I apologize to any scum out there that may be offended by the comparison) have filed a LIS PENDENS on the property such that the new buyer could not sell the property if she wanted to!!!!!

This lawsuit FAILS to mention that monetary consideration of $123K was ACCEPTED by BofA for the purchase of the property!!

I have to stop because my blood pressure is getting dangerously high!!!!

Has anyone EVER seen this before!!! I suspect that Fannie and MERS are probably putting these lawsuits out en masse in the hope that- WHAT- they get the property BACK so they can sell it now for $89K?

ABSOLUTELY AMAZING!!!!

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.

MERS look-up tool link added!

admin — Wed, 01 Dec 2010 19:34:19 +0000

MERS® InvestorID System is accessible to homeowners to look-up their loan.

MERS (Mortgage Electronic Registration System) has made available to the general public their Servicer Identification System.

While most folks know the name of the Servicer of their mortgage it now identifies the INVESTOR of the loan as well.

It’s easy to look up your loan and see if Freddie, Fannie or some other “investor” claims ownership of your loan.

There are several ways to look up your loan.

First and best way to look up your loan is to use the MIN # (MERS Identification Number)

1. First look at your mortgage documents. Look for the Deed of Trust (Not the Warranty Deed) or go online and look yours up in the property records.

2. Locate the MIN number in the top right hand corner of the document.

3. Go to https://www.mers-servicerid.org/sis/

4. Search by MIN, or if you do not have your MIN number, Go for the 2nd way to search –> Search by Property Address/Borrower Details (not as accurate)

5. It should list your servicer and your investor.

But what if it doesn’t find your loan?

Then either you have no MIN and you are not in the MERS system or you entered it incorrectly.

If you are not in the MERS system you can still check the Fannie Mae & Freddie Mac websites to see if they claim to own your loan.

- The Bank Slayer

Fannie Mae requiring borrower to be more credit worthy. Say it isn’t so!

BankSlayer — Wed, 05 May 2010 16:22:42 +0000

Citing the need to protect borrowers from mortgage payments that potentially balloon out of control, Fannie Mae is putting forward new standards for the purchase and securitization of adjustable-rate mortgage (ARM) products.

Why stop now? You have unlimited U.S. taxpayer money. Everyone NEEDS to have a home. More loans, more loans, more loans. A mortgage loan in every pot. Say it together.

Bottom Line: Until homeowners are educated on the true and total cost of home ownership AND brokers stop gouging folks, a tweak here or there will be countered by lenders needing to make a fast buck and will continue to dupe borrowers.

- The Bank Slayer

Fannie Modifies Criteria for Purchase and Securitization of ARMs

Citing the need to protect borrowers from mortgage payments that potentially balloon out of control, Fannie Mae (FNM ^[1]: 1.22 -3.17%) is putting forward new standards for the purchase and securitization of adjustable-rate mortgage (ARM) products. The government sponsored entity is also tweaking its rules on interst0only products.

“These policy changes reflect our intention to continue providing liquidity to different market segments by ensuring that support for ARM products remains in appropriate circumstances,” said Marianne Sullivan, who works on the single family credit policy and risk management at Fannie Mae.

For ARMs with initial periods of 5 years or less, Fannie Mae will require that borrowers be qualified at the greater of the note rate plus 2 percent or the fully indexed rate (index plus margin).

All loans not meeting the new guidelines must be purchased as whole loans on or before August 31, 2010, or delivered into MBS pools with issue dates on or before August 1, 2010.

Fannie is also going to change criteria on interest-only loan products, capped at 70% loan-to-value ratio with the borrower FICO at 720 or higher. Balloon mortgages will no longer be eligible under the new guidelines.

Posted By JACOB GAFFNE at Housing Wire

No Trust in the Trustee – Rigging foreclosure auctions for profit

BankSlayer — Mon, 03 May 2010 12:25:07 +0000

“There is no trust in this business” said the foreclosure trustee. Scary huh? This isn’t some fictional story. This is real life in Harris County, Houston, Texas.

Recently, members of our team confronted the Trustee that was about to auction off the homestead of one of our clients. In our hand was the Temporary Restraining Order, the ink still wet from a Judge’s signature; effectively stopping the foreclosure sale and saving this home owner.

When the TRO was handed to the Trustee he feigned surprise and acted as if he didn’t care one way or another if some local Judge had ordered the foreclosure sale to stop. Why? He was on a mission for the bank or possible his buddies. Sell the house.

As he glanced at the TRO our team said, “I guess that’s all you need.” The Trustee’s retort, “You going to stick around to see if I still sell the house?” Incredulously we said, “I trust you’re going to follow the Judge’s order.” His curt reply, “There is no trust in this business.”

Amazing huh? Sadly this Trustee who is supposed to sell a home to the highest bidder and show impartiality between the bank and the homeowner is untrustworthy.

Just take a trip down to the foreclosure auctions. You’ll quickly see that homeowners are getting the shaft.

We have witnessed trustees high fiving each other after clearing the sale board. why? Not a single house sold to a third party buyer, in other words they bid back every house to the bank.

Bottom Line: You can’t trust the trustee. Want another example…read on below.

- The Bank Slayer

Department of Justice Press Release – Stockton Real Estate Executive Pleads Guilty to Bid Rigging at Auctions of Foreclosed Properties

For Immediate Release
April 16, 2010 United States Attorney’s Office
Eastern District of California
Contact: (916) 554-2700
From Dan Edstrom:

Stockton Real Estate Executive Pleads Guilty to Bid Rigging at Auctions of Foreclosed Properties

SACRAMENTO, CA—United States Attorney Benjamin B. Wagner and Assistant Attorney General Christine Varney of the Department of Justice’s Antitrust Division announced today that Anthony B. Ghio, 43, of Stockton, pleaded guilty today before United States District Judge Edward J. Garcia to conspiring to rig bids at public real estate foreclosure auctions held in San Joaquin County.

These charges arose from an ongoing federal antitrust investigation of fraud and bidding irregularities in certain real estate auctions in San Joaquin County. The investigation is being conducted by the U.S. Attorney’s Office for the Eastern District of California, the Antitrust Division’s San Francisco Office, the Federal Bureau of Investigation, and the San Joaquin County District Attorney’s Office.

According to Assistant United States Attorneys Robin R. Taylor and Russell L. Carlberg, who are prosecuting the case with assistance from Barbara Nelson and Richard Cohen of the Antitrust Division, Ghio admitted in his guilty plea that he conspired with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County. The primary purpose of the conspiracy was to suppress and restrain competition and obtain selected real estate offered at San Joaquin County public foreclosure auctions at noncompetitive prices.

Court documents show that after the conspirators’ designated bidder bought a property at a public auction, they would hold a second private auction. Each participating conspirator would submit bids in the private auction above the public auction price. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the noncompetitive price at the public auction and the winning bid at the second auction was the group’s illicit profit, and it was divided among the conspirators in payoffs. Ghio participated in the bid-rigging scheme from April 2009 until October 2009.

Ghio is charged with bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victim of the crime, if either of those amounts is greater than the statutory maximum fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The investigation is continuing. Anyone with information concerning bid rigging or fraud related to real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660 or visithttp://www.justice.gov/atr/contact/newcase.htm, or the FBI’s Sacramento Division at 916-481-9110, or the U.S. Attorneys Office for the Eastern District of California at 916-554-2900.

Media inquiries to the U.S. Attorney’s Office should be directed to Lauren Horwood at 916-554-2706. Media inquiries regarding the department’s Antitrust Division should be directed to Gina Talamona at 202-514-2007.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.

IndyMac is a shady operation – HAMP, we don’t need no stinking HAMP

BankSlayer — Sun, 02 May 2010 20:02:58 +0000

IndyMac is a shady operation. One of our staff used to be on the inside working against homeowners but (in my words…turned his life around) and now battles for home owners.

He tells tales of “being trained” on programs like HAMP and seeing blacked out sections. When he asked why IndyMac (now OneWest) redacted the HAMP training guidebook, his supervisor told him, “We don’t agree with those parts so you won’t be trained on them since we aren’t going to implement it.” Nice huh?

As a REALTOR you wonder, “Why don’t these banks follow the rules set out to help homeowners, like HAMP and HAFA?” Because:

#1 they are guidelines, not laws.

#2 they don’t care and do what they want.

If you have an account or mortgage with what was IndyMac, below is info relating to what happened and supposedly who you can contact. Thanks to Neil Garfield. The mortgage companies have MERS. He’s building HERS. Stay tuned.

- The Bank Slayer

Information for IndyMac Bank, F.S.B., and IndyMac Federal Bank, F.S.B., Pasadena,

Introduction

Press Release
Acquiring Financial Institution
Question and Answer Sheet
- En Español
- Chinese Language Version (350 kb PDF File PDF Help)
Banking Services
Loan Customers
Unclaimed Deposits
Possible Claims Against The Failed Institution
- FAQ re IndyMac “No Value” Determination
Priority of Claims
Dividend Information
Brokered Deposits (Institutional Brokers)
Agreements
- Purchase and Assumption Agreement (1.1 mb PDF File – PDF Help)
- Master Purchase Agreement by and among FDIC as Conservator for IndyMac Federal Bank, FSB and IMB HoldCo LLC, and OneWest Bank Group LLC (5.3 mb PDF File – PDF Help)
- Loan Sale Agreement Between the FDIC as Receiver for IndyMac Federal Bank, FSB and OneWest Bank, FSB (3.5 mb PDF File –PDF Help)
- Shared Loss Agreement Between the FDIC as Receiver for IndyMac Federal Bank, FSB and OneWest Bank, FSB (1.7 mb PDF File – PDF Help)
IndyMac Bank, F.S.B., Contact Information
JavaScript is disabled or blocked. Alternatively, you may navigate towww2.fdic.gov/drrip/cs/index.asp and search for the contacts.
Balance Sheet Summary

I. IntroductionOn March 19, 2009, the Federal Deposit Insurance Corporation (FDIC) completed the sale of IndyMac Federal Bank, FSB, Pasadena, California, to OneWest Bank, F.S.B., Pasadena, California. OneWest Bank, FSB is a newly formed federal savings bank organized by IMB HoldCo LLC. All deposits of IndyMac Federal Bank, FSB have been transferred to OneWest Bank, FSB.OnJuly 11, 2008, IndyMac Bank, F.S.B., Pasadena, CA was closed by the Office of Thrift Supervision (OTS) and the FDIC was named Conservator. All non-brokered insured deposit accounts and substantially all of the assets of IndyMac Bank, F.S.B. have been transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA “assuming institution”) a newly chartered full-service FDIC-insured institution. No advance notice is given to the public when a financial institution is closed.

The FDIC has assembled useful information regarding your relationship with this institution. Besides a checking account, you may have Certificates of Deposit, a car loan, a business checking account, a commercial loan, a Social Security direct deposit, and other relationships with the institution. The FDIC has compiled the following information which should answer many of your questions.Back to top

II. Press Release The FDIC has issued the following press releases (PR-56-2008, PR-42-2009) about the institution’s closure. If you represent a media outlet and would like information about the closure, in California, please contactDavid Barr with the Office of Public Affairs at 202-898-6992, in Washington D.C. please contact Andrew Gray at 202-898-7192. Back to top

III. Acquiring Financial InstitutionOn March 19, 2009, all deposits of IndyMac Federal Bank, FSB were transferred to OneWest Bank, FSB, (OneWest Bank) Pasadena, California.On July 11, 2008, all non-brokered insured deposit accounts were transferred to IndyMac Federal Bank, F.S.B. (IndyMac Federal Bank), Pasadena, CA (“assuming institution”) a newly chartered full-service FDIC-insured institution. The OTS appointed the FDIC conservator of IndyMac Federal Bank. All insured deposit accounts will be available as usual during regular business hours starting July 14, 2008.

Principal and interest on insured accounts, through July 11, 2008, are fully insured by the FDIC, up to the insurance limit of $100,000. You will receive full payment for your insured account. Certain entitlements and different types of accounts can be insured for more than the $100,000 limit. IRA funds are insured separately from other types of accounts, up to a $250,000 limit.

All accounts that exceed the $100,000 insurance limit, and/or all accounts that appear to be related and exceed this limit, are reviewed by the FDIC to determine their ownership and insurance coverage. If you think you might have uninsured deposits you should call the FDIC Call Center to arrange for a telephone interview with a Claims Agent at 866-806-5919. The Claim Agent may direct you to download and submit a particular form that will assist in expediting the processing of your claim.

List of Affidavits, Declarations, and Forms available for download

Please return the forms to the FDIC by FAX (facsimile) or mail at the number or address listed for the failed institution.

If it is determined that you have uninsured funds, the FDIC will generate and mail to you a Receiver Certificate. This certificate entitles you to share proportionately in any funds recovered through the disposal of the assets of IndyMac Bank, F.S.B. This means that you will eventually recover some of your uninsured funds. The FDIC declared a 50% advance dividend for uninsured deposits.To find out more about FDIC Deposit Insurance:

Visit EDIE the FDIC’s Electronic Deposit Insurance Estimator
View the FDIC Deposit Insurance Coverage Video

Checks that were drawn on IndyMac Bank, F.S.B. will be honored up to your available balance or the insured amount. You may withdraw funds from any transferred account without an early withdrawal penalty until you enter into a new deposit agreement with IndyMac Federal Bank. A hold may be in place on deposits accounts due to delinquent loans where the depositor is the borrower or guarantor. Additionally, any account pledged as collateral for a loan will be held.Back to top

V. Banking ServicesOn March 19, 2009 there was no break in services.As ofJuly 14, 2008 you may continue to use the services to which you previously had access, such as, online service, safe deposit boxes, night deposit boxes, wire services, etc.

Your checks will be processed as usual. All outstanding checks will be paid against your available insured balance(s) as if no change had occurred. IndyMac Federal Bank will contact you soon regarding any changes in the terms of your account. If you have a problem with a merchant refusing to accept your check, please contact IndyMac Federal Bank, Customer Service Department, at 800-998-2900. An account representative will clear up any confusion about the validity of your checks.

All interest accrued through Friday, will be paid at your same rate. IndyMac Federal Bank will be reviewing rates and will provide further information soon. You will be notified of any changes.

Your automatic direct deposit(s) and/or automatic withdrawal(s) will be transferred automatically to IndyMac Federal Bank. If you have any questions or special requests, you may contact a representative of your assuming institution at 800-998-2900. Back to top

VI. Loan Customers If you had a loan with IndyMac Bank, F.S.B., you should continue to make your payments as usual. The terms of your loan will not change under the terms of the loan contract because they are contractually agreed to your promissory note with the failed institution. Checks should be made payable as usual and sent to the same address until further notice.For all questions regarding new loans and the lending policies of IndyMac Federal Bank, please contact 800-998-2900 or visit the IndyMac Federal Bank website atwww.IndyMac.com. Back to top

VII. Unclaimed Deposits Please note that any deposits that have not been claimed within 18 months of the failure of Indymac Bank was sent to the FDIC by One West Bank. If the FDIC is unable to locate the deposit customer, the unclaimed funds will eventually be escheated to the state or according to Federal Law (12 U.S.C., 1822(e)).

FDIC Unclaimed Deposits
1-877-875-4821 Option #2
Hours of Operation – Pacific Standard Time

Monday through Friday, 8:00 a.m. – 5:00 p.m.

VIII. Possible Claims Against the Failed InstitutionDetermination of Insufficient Assets To Satisfy Claims Against Financial Institution in Receivership

SUMMARY: The FDIC, by its Board of Directors, has determined that insufficient assets exist in the receivership of IndyMac Bank, F.S.B., Pasadena, California and the receivership of IndyMac Federal Bank, FSB, Pasadena, California to make any distribution to general unsecured claims, and therefore such claims will recover nothing and have no value.

DATES: The Board made its determination on November 12, 2009.

FOR FURTHER INFORMATION CONTACT: If you have questions regarding this notice, contact Thomas P. Bolt, Counsel, Legal Division, (703) 562–2046 ortbolt@fdic.gov; Shane Kiernan, Senior Attorney, Legal Division, (703) 562–2632 or skiernan@fdic.gov,

Federal Deposit Insurance Corporation
3501 N. Fairfax Drive
Arlington, VA 22226

SUPPLEMENTARY INFORMATION: On July 11, 2008, IndyMac Bank, F.S.B., Pasadena, California (‘‘IndyMac Bank’’) (FIN # 10007) was closed by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation (‘‘FDIC’’) was appointed as its receiver. In complying with its statutory duty to resolve the institution in the method that is least costly to the deposit insurance fund (see 12 U.S.C. 1823(c)(4)), the FDIC effected a pass-through receivership. Accordingly, the FDIC organized IndyMac Federal Bank, FSB, Pasadena, California (‘‘IndyMac Federal’’), a new federal savings bank for which the FDIC was appointed as conservator. IndyMac Bank’s assets were transferred to IndyMac Federal under an agreement whereby the amount (if any) realized from the final resolution of IndyMac Federal after payment in full of IndyMac Federal’s obligations was to be paid to the IndyMac Bank receivership. On March 19, 2009, IndyMac Federal was placed in receivership and substantially all of its assets were sold. The amount realized from the resolution of IndyMac Federal is insufficient to pay all of its liabilities, and therefore there will be no amount to pay to the IndyMac Bank receivership.Section 11(d)(11)(A) of the FDI Act, 12 U.S.C. 1821(d)(11)(A), sets forth the order of priority for distribution of amounts realized from the liquidation or other resolution of an insured depository institution to pay claims. Under the statutory order of priority, administrative expenses and deposit liabilities must be paid in full before any distribution may be made to general unsecured creditors or any lower priority claims. The FDIC has determined that the assets of IndyMac Bank are insufficient to make any distribution on general unsecured claims and therefore, such claims, asserted or unasserted, will recover nothing and have no value. The FDIC has also determined that the assets of IndyMac Federal are insufficient to make any distribution on general unsecured claims and therefore, such claims, asserted or unasserted, will recover nothing and have no value. //

Federal Register / Vol. 74, No. 221 / Wednesday, November 18, 2009 / Notices59541

FAQ re IndyMac “No Value” Determination Back to top

IX. Priority of ClaimsIn accordance with Federal law, allowed claims will be paid, after administrative expenses, in the following order of priority:

Depositors

General Unsecured Creditors

Subordinated Debt

Stockholders

X. Dividend Information When IndyMac was placed into Conservatorship in July of 2008, the FDIC calculated that the ultimate resolution of IndyMac would result in a recovery of approximately 50% of the uninsured deposits of IndyMac. Based upon that estimate, an advance dividend in that amount was paid to the uninsured depositors at that time. The announced sale of IndyMac to IMB Management Holdings is consistent with the original estimate and no additional dividend will be paid as a consequence of this sale.While no dividends for the uninsured depositors are anticipated at this time, the FDIC will continue to periodically re-assess the financial condition of the receivership to determine if there is additional cash for dividend distributions.

Dividend History on IndyMac Bank, F.S.B.
JavaScript is disabled or blocked. Alternatively, you may navigate to
www2.fdic.gov/DIVWEB/Dividendindex.asp and search for the dividends. Dividend Information on Failed Financial Institutions Back to top

XI. Brokered Deposits The FDIC offers a reference guide to deposit brokers acting as agents for their investor clientele. This site outlines the FDIC’s policies and procedures that must be followed by deposit brokers when filing for pass-through insurance coverage on custodial accounts deposited in a failed FDIC Insured Institution.Deposit Broker Processing Guide

Mr. Debt Collector meet My Little Friend…Steven Katz

BankSlayer — Sun, 02 May 2010 18:28:38 +0000

Can you levy a judgment win against a bank or creditor by applying it to your loan? Your mortgage loan is an asset for the bank so in theory this will work. It’s an interesting idea posed by Neil Garfield.

Regardless, fighting bank that are trying to collect on you is a daunting task unless you know what you are doing. Hats off to Steven Katz, a “credit terrorist”. His website debtorboards may be just the tool you’re looking for to “suit up” in an attack on your debt collector.

Aiding in the fight is the fact that On Wednesday, the Supreme Court made it even easier for consumers to use the courts to fight debt collectors, ruling that collectors cannot be shielded from suits by claiming they made a mistake in interpreting the law.

I’m going to try to get this guy on the radio in a week or so.

- The Bank Slayer

Learning How to Fight the Collector

By ANDREW MARTIN

Among debt collectors, Steven Katz is known as a “credit terrorist.” For years, he has run what he calls the Steven Katz School of Bill Collector Education, otherwise known as the “credit terrorist training camp.”

Mr. Katz, a 58-year-old accountant in suburban Tucson, spends his free time schooling debtors on the finer points of consumer protection law to help them turn the tables on debt collectors. On occasion, he thumbs his own nose at them too.

“How many times can I sue you? Let me count the ways,” he wrote under his pseudonym, Dr. Tax, in a March posting on Inside ARM, a debt collectors’ Web site.

A former bill collector himself, Mr. Katz rebelled after a debt buyer damaged his credit score with what he says was a bogus bill. Mr. Katz sued, and in 2003 he collected his first damage award, a $1,000 check that he now keeps framed behind his desk.

“The bill collectors, when they call, make you feel like the only option you have is to lay down and play dead. That’s not true,” said Mr. Katz said, who does not charge for his advice. “Nothing validates this more than getting a check.”

Call this movement revenge of the (alleged) deadbeats. Even as collectors try to recoup debts from millions of Americans struggling to pay their bills, a small but growing number of lawyers and consumers are fighting back against what they describe as harassment, unscrupulous practices — and, most important to their litigiousness, violations of the Fair Debt Collection Practices Act.

In fact, 8,287 federal lawsuits were filed citing violations of the act in 2009, a 60 percent rise over the previous year, according to WebRecon, a site that tracks collection-related litigation and the most litigious consumers and lawyers on behalf of debt collectors.

On Wednesday, the Supreme Court made it even easier for consumers to use the courts to fight debt collectors, ruling that collectors cannot be shielded from suits by claiming they made a mistake in interpreting the law.

When a consumer stops paying a bill, creditors often try to collect on their own for a few months. In many instances, the creditor hires another company to collect the debt. In other cases, they may dispose of the debt by selling it to a debt buyer for a steep discount.

Debt collectors and debt buyers are the targets of litigious consumers, since the debt collection law primarily applies to third-party collectors.

Peter Barry, a Minneapolis trial lawyer, is so bullish on the future of debt collection litigation that he holds several “boot camps” each year to share his secrets with other lawyers who want in on the action. If the debtor wins a court case under the act, the debt collector must pay the lawyer’s fees.

The next boot camp is being held in early May in San Francisco, at a cost of $2,495 a person for two and a half days of instruction.

“I can’t sue every illegal debt collector in America, although I’d like to try,” Mr. Barry said.

Mr. Katz can also claim some credit for the increase in lawsuits. For six years, he has run a free Web site called Debtorboards.com, where people share tips on topics like keeping a paper trail and recording calls from collectors.

He said the site received two million hits in 2009, a 60 percent increase over the previous year.

“Debtorboards is geared to help people use the laws as they are on the books as both a shield and a sword,” said Mr. Katz, who says he has won $36,000 from his own litigation against collection agencies. (Since many of the settlements are confidential, it is difficult to prove the claims of Mr. Katz and others).

Of course, debt collectors are hardly pleased with the litigation trend.

Rozanne M. Andersen, chief executive of ACA International, a trade association for the debt collection industry, said she was “extremely concerned” about the increase in lawsuits, which she said cost her industry hundreds of millions of dollars a year. She said much of the increase was the result of ambiguous language in the Fair Debt Collection Act.

Debt collectors are required, for example, to identify themselves on a voice message left for a consumer, she said. But they are also prohibited from telling a third party — including someone who might overhear a phone message — about a consumer’s debt.

“We are between a rock and a hard place,” Ms. Andersen said.

Ms. Andersen said she had little patience for Web sites that encouraged consumers to thwart debt collectors.

“We believe those types of Web sites are encouraging people to not take responsibility for just debt,” she said.

Jack Gordon, who runs the fee-based WebRecon site, said it was no wonder lawsuits were increasing, because consumers were being bombarded with ads from lawyers when they searched online for information on debt collection. He said the proliferation of discussion sites like Mr. Katz’s had, to a lesser extent, also contributed to the trend.

On the boards, he said, “There’s a lot of hot air, a lot of people who overinflate their accomplishments.”

Regardless, Mr. Gordon’s database has become a badge of honor among the devotees of Debtorboards.com. As Brandon Scroggin, a 37-year-old from Little Rock, Ark., puts it, “That’s one list I’m a proud card-carrying member of.”

Mr. Scroggin, who provides price estimates at a body shop, said he was the type of person who refused to be taken advantage of, even for petty offenses. For instance, years ago, he said he joined in the class-action suit against the pop group Milli Vanilli, accused of lip synching, and collected a $1.25 check. After a messy divorce, Mr. Scroggin was stuck with a $7,000 bill that he said belonged to his ex-wife. Instead of paying it, he began researching the law and stumbled on Debtorboards.com.

Armed with lessons he learned on the site, he demanded proof of the debt from the collection agency, and the calls stopped. But two and a half years later, they started up again so he sued the collection agency, National Loan Recoveries, for failing to provide proof of the debt, among other things.

The case was settled in 2008. The terms were confidential, but he says he never paid National Loan a dime. “Let’s just say I’m a very happy person,” he said. A lawyer for National Loan, Kathryn Bridges, did not return messages seeking comment.

Mr. Katz said his Web site was not intended to help people avoid paying legitimate debts. But if they do so, so be it — he feels no need to apologize.

He said Congress gave consumers certain rights, and he is simply making people aware of them, sometimes colorfully.

As Mr. Katz says at the bottom of each Dr. Tax posting, “A telephone in the hands of a collector is like a crowbar — it can be used to pry a mouth open wide enough to insert a foot.”

Barbara Thompson, 46, of Atlanta, said she challenged $11,000 in credit card debt using online research about collection laws. She does not dispute the debts but reasons that the credit card company wrote off her charges long ago. By her account, she owes the credit card company, not the debt collector.

“The credit card company, they sell it off, they charge it off, it’s just business as usual,” she said, adding, “I’m adamant about not paying a collection agency.”