So is the end of HAMP near?  Looks like Congress is making a run at ending HAMP.

Sadly, HAMP never lived up to its touted goals and in fact mainly served as a way for servicers to line their folks while dragging homeowners through mountains of paperwork which was required to be faxed over and over.

Likely the short sale component of HAMP called HAFA will be disappearing as well.

Will this help or hurt homewoners?  Too early to tell.

- The Bank Slayer

The Fox News story is below:

House Committee to Push Bill Ending Obama Foreclosure Program

Published February 24, 2011 | Associated Press

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WASHINGTON — A House committee plans to write legislation next week ending the Obama administration’s flagship effort for helping struggling homeowners avoid foreclosure and abolishing three other housing assistance programs.

At its meeting next Thursday, the highest-profile target of the Republican-run House Financial Services Committee will be the Home Affordable Modification Program. The Treasury Department has acknowledged the program won’t meet its original goal of preventing 3 million to 4 million foreclosures, and last month a federal inspector general said it has been a failure.

The bill comes at a time when Republicans are proposing deep spending cuts across the federal budget. They have already pushed legislation through the House cutting this year’s spending by $61 billion, despite opposition by President Obama and congressional Democrats.

The committee will also vote on GOP plans to terminate programs that help state and local governments buy foreclosed properties and sell or rent them, provide loans to unemployed people who have fallen behind in their mortgage payments, and help restructure mortgages for people who owe more than their homes are worth.

Democrats are expected to oppose the Republican effort. House Democratic aides and Treasury spokesmen did not immediately respond to requests for comment.

Financial Services Chairman Spencer Bachus, R-Ala., who announced his committee’s meeting on Thursday, said the targeted programs have had little impact, have increased some homeowners’ debts and may have led to additional foreclosures.

“In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners,” Bachus said in a written statement.

The Home Affordable Modification Program is designed to help financially troubled homeowners reduce their monthly mortgage payments by offering them lower interest rates and longer repayment periods.

Foreclosures have remained high, with the foreclosure listing firm RealtyTrac Inc. saying there were 2.9 million foreclosure filings last year and over 3 million expected this year.

Even so, the modification program is expected to ultimately complete only 700,000 to 800,000 permanent modifications, according to a report issued last month by the government’s special inspector general overseeing the program.

The program “continues to fall dramatically short of any meaningful standard of success,” the report said.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

AMAZING!  Anyone attempting a loan modification or short sale more than once with Wells Fargo can attest to “The Black Hole”.

The following article is from Neil Garfield’s website and is very revealing.  Wells Fargo as well as other large banks tend “lose” documents on a regular basis.

- The Bank Slayer

EDITOR’S COMMENT: LIVINGLIES HAS INDEPENDENTLY VERIFIED EVERY STATEMENT OF THIS WHISTLE-BLOWER. IT OPENS THE DOOR TO A WHISTLE-BLOWER LAWSUIT, A QUI TAM ACTION IN WHICH THE RELATER OR WHISTLE-BLOWER CAN RECEIVE HUNDREDS OF MILLIONS OF DOLLARS AS WILL THE LAWYERS. I’m sure that some smart people will follow up on this. The ramifications are huge.

AN INCREDIBLE, HONEST, REVEALING POST BY AN ANONYMOUS WELLS FARGO EMPLOYEE. WOW. THANK YOU.

Documents are destroyed in “The Black Hole.” The people you talk to when you are seeking a loan modification have no knowledge of it. Many of them are temps, lacking experience in loan processing. It never registers with most of them that something strange is going on. The Black Hole is kept completely isolated from Wells Fargo servicing staff. Even if they realize it exists, they have no idea of its location.

I think it unlikely The Black Hole is actually in Wells Fargo. They have to keep it separate from their own staff, and separation provides a layer of insulation from discovery in lawsuits. It’s likely a service provided by LPS. It’s curious that other servicers who are LPS clients have a public record of the same kinds of loan modification document disappearance. My best guess for the name of the LPS product (software) that does this is LPS HAMP Solutions.

Taking someone’s money with no intention of performing any service or delivering a product  is not only unethical but in mose cases illegal.

Last month the Attorney General of Arizona decided that enough is enough.  Bank of America has simply been stealing money from unsuspecting homeowners.  Not only are they stealing money but they are tricking them into believing they are making progress or “buying” their way to a loan mod.

Time and time again we see these large banks or mortgage servicers duping homeowners into paying for something they are not getting.  If a borrower makes payments under the auspices of a modification plan that is given and orchestrated by the lender there should be a clear outcome and the plan should be according to clearly understood rules.

If you never intended to give the homeowners a loan modification then just come out and tell them versus leading them on for months while taking their hard earned money which you don’t apply to principle but just fees.   Sickening.

If you or someone you know has dutifully made payments to their mortgage company yet fell victim to this bank scam please contact our office immediately.  713-595-8200

Below is the official press release.

- The Bank Slayer

Bank of America Corp. violated Arizona’s consumer fraud law by misleading consumers trying to get home loan modifications, state Attorney General Terry Goddard said Friday as he filed a civil lawsuit against the bank.

The bank also violated the terms of a 2009 consent agreement it signed requiring the bank’s Countrywide mortgage subsidiary to implement a loan modification program, Goddard said.

Hundreds of homeowners kept making their mortgage payments because Charlotte, N.C.-based Bank of America repeatedly assured them their loan was being modified, he said. Instead, many lost their homes anyway.

“Those people could have used that money for something else,” Goddard said. “They were deceived into continuing to make mortgage payments when they had no hope of saving their homes.”

The attorney general’s office was deluged with consumer complaints and launched an investigation more than a year ago, Goddard said. Settlement talks with the bank that began in April ultimately collapsed Thursday.

Calls seeking comment from Bank of America were not immediately returned.

The lawsuit, filed in Maricopa County Superior Court, alleges that the bank has repeatedly violated terms of the consent agreement. The pact was expected to lead to loan modifications for thousands of Countrywide customers in Arizona, which had the nation’s fourth- highest foreclosure rate last month, according to RealtyTrac Inc. But the company failed to make   timely decisions on modification requests and went ahead with foreclosures, Goddard said.

Goddard said Nevada is expected to file a similar lawsuit later Friday.

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.”

The total lack of oversight and teeth in the “enforcement” of HAMP is a Fatal Flaw according to Steve Gillan.  We agree.

Over and over we hear from homeowners,  “I am in HAMP and have made seven on time payments in a row but am now facing foreclosure.  The bank said I was still in review.  What do I do?”    This is sad but ridiculous.

When a homeowner is denied a HAMP modification or the process is taking ten to twenty months to complete, no one is checking on the servicer.   NO KIDDING!!!!

It is frustrating for homeowners who are required over & over & over & over to fax in documents similar to what it would take to refinance their loan only to be told by their lender, “Sorry, we didn’t receive your paperwork.”   When called on the carpet by the homeowner, the mortgage servicer simply makes up a story (READ: lies) or says the loan modification is in review.

What does “the file is in review” mean? In review by who?  When did it go into review?  What are they reviewing?   All very basic questions (especially if this was a straightforward refinance) which should be easily answered.

The difference is that in a standard refinance, the mortgage broker or loan officer GETS PAID WHEN IT CLOSES to the tune of 2-4% the size of your loan.  Yes, thousands of dollars to get your loan closed.  But in a loan modification the “agent” or negotiator is many times paid very little and is judged on how many files are RESOLVED.  In other words, approved, denied, closed, or opened – whatever, as long as the file is moved off his/her desk.

Who is monitoring the process to ensure borrowers are not being dragged on for financial gain?

The Treasury has clearly stated it has no intention of performing this function even though it is mandated by HAMP.

Why is it that so many borrowers trying to get a loan mod (and doing everything they are told to do) need to hire an attorney to force the bank to actually review the documents and make a decision?   The answer  – because Uncle Sam is letting them get away with it.

Don’t let you mortgage servicer give you the run around.  Take action today!

Hats of to Steve for the article below.

- The Bank Slayer

The Fatal Flaw in HAMP: Lack of Servicer Oversight

by Steve Gillan is Executive Director of AAHMP, American Alliance of Home Modifications Professional

Twenty months into HAMP, nagging administrative issues are still prevalent and the program seems to have run out of steam.  This is evident from the plethora of processing problems we see and hear on a daily basis. From lost documents, improper calculation of income, poor knowledge and implementation of underwriting guidelines, long approval times, and more recently the robo-signing scandal. The list goes on and on…

To Treasury’s credit they have put forth an effort to work out some of these problems.  They implemented directive after directive to deal with the challenges and shortfalls of the original program. But no progress has been made. Servicers say they are doing everything possible to comply, but in the end they claim their operations to not be set up for broad based loss mitigation programs.

The troubling part is that during the foreclosure escalation process, no one oversees the servicer’s actions. When a homeowner is denied a HAMP modification or the process is taking ten to twenty months to complete, no one is checking on the servicer.  No one requests to see the files to determine if that homeowner does or does not actually meet the guidelines.  Again are we just to believe the servicer performed their underwriting role correctly. Who is monitoring the process to ensure borrowers are not being dragged on for financial gain?

This lack of oversight is the “Fatal Flaw” in HAMP.   How can Treasury assure American homeowners or the American taxpayer that everything is being done to appropriately address the foreclosure crisis if no one is double checking whether or not each loan modification was underwritten properly? If servicers have willingly taken part in robo-signing, why is anyone to believe they did not cut corners in the underwriting process?  Based on all the evidence, this is a forgone conclusion but what is Treasury to do? They can leave it up to the courts and individual Attorney Generals but it will take years to clear out the backup that is already in place at county courthouses.

Treasury could implement a component in HAMP that better addresses compliance.  This job is contractually the responsibility of Freddie Mac and requires them to review the servicer operation and procedures to assure that all applications for HAMP are given the same treatment. This compliance operation is part of the Participating Servicing Agreement (PSA) that over one hundred servicers have signed with Treasury. Part of this guideline is the “Escalation” process where a homeowner that has been denied a modification has the ability to have their case reviewed by Treasury.  Treasury has hired Homeownership Preservation Foundation (HPF) to handle those calls.  According to Treasury it is the job of HPF to work with the homeowner and servicer to try and iron out differences, to act as an advocate of the homeowner with the servicer.

A strong “Escalation” process performed by a neutral third party can either affirm or dispute those findings.  In a case where the servicer did in fact make a mistake, a completed modification application, fully underwritten by a HUD Direct Endorsed Underwriter would be given to the servicer for review and completion. This escalation process would also give Treasury the information they need to verify whether or not the servicer had done their job. It would also send a message of accountability to the servicing industry.

Unfortunately at this time, Treasury has clearly stated it has no intention of performing this function even though it is mandated by HAMP.  Doesn’t it make sense to actually “review” a file for accuracy?  Without this, what recourse is left to the investor and homeowner?  The answer is possibly “the Courts,” but that would only slow the housing recovery process even more.  This does not benefit anyone but the servicer. This “Fatal Flaw” needs to be corrected.

Looks like Loan Mods R Us and other scammers (and even some legitimate companies) will be going bye-bye.  FINALLY!!

Highlight are:

We have been saying this for quite some time.  If you want your loan modified then you need a lawyer.  Real lawyers.  With real litigation experience.  With wins versus the big banks.

- The Bank Slayer

www.washingtonpost.com

By Kenneth R. Harney

You’ve probably seen the pitches on TV and the Internet or found them stuffed in your mailbox: official-looking communications complete with logos and letterheads that look vaguely like those used by the Treasury, Internal Revenue Service and other federal agencies.

The promoters have names that resemble those of well-known, legitimate federal foreclosure-intervention programs such as Making Home Affordable or Home Affordable Modification. Some even use photos of President Obama or the Great Seal of the United States.

They are instead criminal enterprises posing as do-gooders who promise to get you out of the mortgage jam you’re in, whether you’re severely delinquent or deeply underwater. They claim they can persuade your lender to cut your monthly payments, forgive all penalties, slash your interest rate and even get your loan balance reduced. If your lender won’t cooperate, they say, they will perform “forensic audits” on your mortgage and persuade a court to cancel your loan transaction because of technical mistakes in the paperwork.

Bogus firms always insist on getting your money upfront – often thousands of dollars – and then do little or nothing. But now the Federal Trade Commission is cutting off the main fuel supply for mortgage-modification scammers. Under new rules outlined on Nov. 19, the agency plans to ban virtually all upfront payments, institute mandatory disclosure rules and clamp new federal restrictions on lawyers who participate in mortgage-modification schemes.

Under these rules, companies offering mortgage relief will have to contact your lender or servicer and present you with a written proposal describing the key changes to your mortgage terms that the note holder is willing to make before any money can be collected in advance.

Modification companies also will be required to make clear that they have no connection to any government agency or program, and that customers are free to reject any offer from the lender, with no requirement to pay a fee.

The rule also prohibits modification firms from using one of their most common and destructive ploys: instructing clients to stop communicating with their lender or servicer. Many scammers not only urge unwary consumers to let them handle all negotiations but also direct them to stop sending in payments – or worse, tell them to send all payments to a modification company. Typically that has the effect of rendering any ultimate modification with the lender or servicer even less likely.

The FTC estimates that bogus modification companies have stolen millions from unwary homeowners in the past two years. Ironically, there has been a huge increase in the number of abusive schemes in the wake of the federal government’s efforts to create legitimate foreclosure-relief programs. The FTC has brought more than 30 cases against these operations, but until now the agency has had no way to control the pervasive advance-fee requirements that cost consumers so much.

Now, when that portion of the new rule takes effect on Jan. 31, the FTC will be able to proceed against any firm that collects upfront fees without obtaining the required written proposals at no charge from lenders. It will be a litmus test: If a firm seeks to charge anything or collects money upfront, it will be in violation of federal law and subject to harsh civil penalties.

The only exception will be for lawyers, who typically require retainers before they begin negotiating on a client’s behalf. They will be permitted to collect retainer fees for modification efforts but only if they deposit the money into “client trust accounts” under state bar regulations. Lawyers who charge advance fees also must be licensed by state authorities and be in compliance with state laws and regulations governing professional conduct.

Joel Winston, the FTC’s associate director of financial practices and a lawyer himself, said in an interview that “a disappointingly high percentage of fraudsters [in FTC loan-modification cases] have been lawyers – they’re just fraudsters with law degrees.” Nonetheless, Winston said, the agency recognizes that “legitimate practitioners” can play a valuable role in negotiating modifications for consumers, and the FTC doesn’t want to cut this off by banning upfront retainer payments outright.

Some states, such as California, have moved against lawyers running loan-mod scams, he said, but once the new FTC rule takes effect nationwide, every state will get “federal teeth” behind their efforts to crack down on law firms that abuse homeowners in mortgage trouble.

“You won’t be able to fly under the radar anymore hoping that state disciplinary boards won’t spot you,” Winston said. “Now [fraudster lawyers] are going to have the federal government to contend with – and we will be looking for them.”



A class action lawsuit filed by New York law firm Harwood Feffer alleges that Wells Fargo-owned mortgage servicer, America’s Servicing Company, induced distressed borrowers into defaulting on their payments supposedly in order to get a loan modification all the while accruing late fees and penalties.  READ:  Enriching themselves at borrower’s expense.

This isn’t the first time we’ve heard this and ASC is not the only servicer that tells homeowners to stop making payments so that they can get a loan mod.  But looking only at Wells Fargo it is easy to prove these tactics – and not just for loan mods but deed-in-lieu and short sales.

For example, on Tuesday this week, a negotiator at Wells Fargo  emailed us the following (concerning a short sale):

Please be advised the property must be 31 days delinquent at the time of closing…

Hmmm… this clearly indicates the borrower is being told by the owner of the mortgage debt (or the agent of that owner) to purposely default.

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

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

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

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

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

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

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

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

- The Bank Slayer

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.”