Archive for October, 2010

by RICH VETSTEIN

 

“Are title insurance companies still insuring foreclosure properties?”– James In Cambridge
 
Answer: Yes, they are.
 
Initially, the press reported that some major title insurers had temporarily stopped insuring foreclosure titles from JP Morgan Chase, Ally Financial, and Bank of America. However, my understanding is that all title insurers have resumed insuring all foreclosure properties in the wake of several major agreements between national title insurance companies and lenders. These warranty and indemnification agreements would essentially shift the risk of loss from irregular/defective foreclosures back onto the foreclosing lenders.
 
From the conveyancing side, I can definitely tell you that title insurers have advised their attorney agents to go through foreclosure titles with a fine tooth comb and to be especially diligent in examining and certifying foreclosure titles. Buyers of foreclosure properties should be prepared for delays in getting their transactions closed.
 
“How is robo-signing different from the Ibanez case situation”?–Scott
 
Answer:  ”Robo-signing” and the Massachusetts Ibanez foreclosure case are two different situations, but the root of the problem — the complexity of the securitized mortgage industry and the sheer volume of foreclosure paperwork to be processed — remains a contributing cause of both problems.
 
“Robo-signing,” as one of the leading foreclosure defense attorneys has claimed to the Huffington Post, refers to how financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training to sign sworn documents submitted to courts. According to depositions released in Florida and the Post, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits, and that they agreed with the defense lawyers’ accusations about document fraud.
 
This is obviously a major problem in states such as Florida which require a judge’s approval of a foreclosure based on sworn documents. However, Massachusetts is not such a state. Other than verifying the borrower is not in the military, Massachusetts state law doesn’t require any sworn verification that the foreclosure is kosher (if you will). That may change after lawmakers and the Attorney General’s office react this foreclosure mess. In fact, the AG announced this week she is investigating on of the largest “foreclosure mills” in the state for alleged non-compliance with the new tenant foreclosure law.
 
The Ibanez problem occurs when mortgage loan documentation recorded with the Registry of Deeds lagged far behind the actual ownership of the loan, due to complex mortgage securitization agreements and sloppy follow up. Land Court Judge Keith Long’s ruling effectively invalidated thousands of foreclosures which suffered from this newly recognized “defect.” The Ibanez situation is not a product of fraud, like robo-signing, in my opinion. In fact, the practice of recording mortgage assignments “late” was long accepted by the title examination community prior to the Ibanez ruling. So it caught a lot of folks off-guard.Getting title insurance on an Ibanez-afflicted property is near impossible these days, and the robo-signing controversy certainly doesn’t help alleviate  the risk tolerance of anxious title insurance underwriters.
 
To be sure, both Ibanez and the robo-signing controversy have reverberated through the real estate community, and have impacted foreclosure sales on a number of levels. If you are considering purchasing a foreclosed property, please contact us so we can guide you through the complicated process and protect your interests.
 
 
For more: http://bit.ly/apo6Tu
 
by RICH VETSTEIN

 

The Fed Bought Fraud and Plans To Buy More

 
By Greg Hunter
 

In the wake of the financial meltdown of 2008, the Federal Reserve announced it would buy mortgage-backed securities, or MBS.  The January announcement by the Fed said it would buy MBS from failed mortgage giants Fannie Mae and Freddie Mac in the amount of $1.25 trillion.  
 
At the time, the Fed said in a press release, “The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally.”  (Click here for the full Fed statement.) It did provide “support” to the mortgage market, but did it also buy fraud and cover the banks that sold it?  The evidence shows, at the very least, it bought massive amounts of fraud.
 
We now know the Fed definitely bought valueless MBS because it has joined other ripped-off investors to demand Bank of America buy back billions in sour home debt.  A Bloomberg story from just last week, featuring Philadelphia Fed President Charles Plosser,  reports, “The New York Fed, which acquired mortgage debt in the 2008 rescues of Bear Stearns Cos. and American International Group Inc., has joined a bondholder group that aims to force Bank of America Corp.to buy back some bad home loans packaged into $47 billion of securities.  On the one hand, the Fed has “a duty to the taxpayer to try to collect on behalf of the taxpayer on these mortgages,” Plosser said today at an event in Philadelphia.”
 
Mr. Plosser lamented the “difficult spot” the central bank is in because it is both bank regulator and plaintiff.  He said, “Should we be in the business of suing the financial institutions that we are in fact responsible for supervising?” (Click here to read the complete Bloomberg story.) To that question, I ask shouldn’t the Fed have done a much better job of supervising the big banks in the first place?
 
The whole financial and mortgage crisis from sour securities to foreclosure fraud is in the process of blowing sky high.  The entire mess is clearly the biggest financial fraud in history!  It looks to me like the regulators were just supervising their pay checks being deposited into the bank.
 
And remember, the $1.25 trillion of mortgage-backed securities the Fed bought from Fannie and Freddie?  How much of that is fraud?  William Black, the outspoken Professor of Economics from the University of Missouri KC, says all the big banks were committing “major frauds”in the mortgage-backed security market.  Black says, at Citicorp, for example, “. . . 80% of the mortgage loans it sold to Fannie and Freddie were sold under false representations and warranties.” (Click here for the complete Black interview.) Black claims the frauds increased at some banks, and it is sill going on today!   (I admit I used this same video in a recent post.  I use it again, because it is the single most important and damning indictment of the big banks out there.  Professor Black defines the size of the entire fraudulent mortgage mess.)
 
If he’s right, and I think he is, that means the Fed just spent the last 20 months (the  program ended in August 2010) buying a trillion dollars in mortgage fraud!  
 
That is a staggering amount even for the most powerful central bank in the world.  
 
Could the Federal Reserve have bought that amount of fraudulent MBS and not have known it?  
 
Could the Fed have been buying that amount of rotten worthless debt to cover the banksters in the syndicate?  


Who knows if we will ever find that out because the Federal Reserve cannot be independently audited.
 
And who knows what else it bought in sour debt to bail out their banking syndicate buddies because the Federal Reserve cannot be independently audited!
 
It has never been audited in its 97 year history.
 
I know one thing, if the Fed is going to keep its banking cartel alive, it is going to be forced to print massive amounts of money out of thin air to buy a heck of a lot more fraudulent mortgage-backed securities.  
 
That’s what worries and scares me the most.
 
Greg Hunter
 
For more: http://bit.ly/dkjp2s

 Wells Fargo said that current reviews found that bank employees had failed to “strictly adhere” to its required procedures during a final step in its documentation processes. It also acknowledged that “some aspects of the notarization process” had not always been properly followed, creating the potential for paperwork errors.

 
After several weeks of insisting its foreclosure processes were sound, Wells Fargo & Company said on Wednesday that it planned to correct and resubmit up to 55,000 improperly filed documents by mid-November.
 
Wells Fargo said that current reviews found that bank employees had failed to “strictly adhere” to its required procedures during a final step in its documentation processes. It also acknowledged that “some aspects of the notarization process” had not always been properly followed, creating the potential for paperwork errors.
 
Wells officials said that the bank started to correct the 55,000 questionable files, and “out of an abundance of caution,” planned to resubmit them in 23 states where foreclosures require court approval. Bank officials maintained that the underlying information in the loan files was accurate and that the bank had not improperly foreclosed on any troubled homeowners.
 
Wells Fargo also said that it had no plans to temporarily freeze foreclosure sales, an action previously taken by its rivals Bank of America and GMAC.
 
Still, the revelations that Wells had identified as many as 55,000 improper foreclosure files add to the mortgage morass. Attorneys general in all 50 states are conducting a sweeping investigation into the industry’s practices, while a White House task force and several federal regulators have embarked on similar reviews.
 
In addition to Wells Fargo, four other large mortgage players are resubmitting tens of thousands of cases in large swaths of the country. Chase said it was looking at about 115,000 files in 41 states. Bank of America is looking at 102,000 in 23 states, where foreclosures require court approval. GMAC and PNC Financial have come forward to say they are resubmitting files with improper paperwork, too.
 
Still, Wells Fargo’s announcement was the second time a bank had backtracked on statements it had made about the extent of its foreclosure problems. After weeks of insisting that its review had not turned up any serious errors, Bank of America acknowledged a number of paperwork errors, including incorrect data and misspelled names.
 
Wells Fargo had previously taken an even more combative stance. In its Oct. 20 conference call with investors, bank officials said they were confident that the foreclosure processes and controls were sound. That statement gave the impression that there were few if any problems but left room for the possibility that the bank might have to fix a small number of mistakes.
 
During the conference call, Wells officials dismissed concerns that the bank had systematically engaged in so-called robo-signing, where a single employee would sign thousands of loan documents without verifying their contents, as the law requires. Instead, the bank emphasized that their policies called for the same employee who compiled the foreclosure file to sign off on it — a crucial legal requirement in many states.
 
But revelations in an obscure Florida lawsuit and elsewhere raised concerns about whether that process was always followed. Under questioning, Xee Moua, a Wells Fargo manager, said she would sign off on as many as 500 foreclosure files a day without verifying the accuracy of their contents. “We don’t go into the details with these affidavits,” she said in a deposition.
 
Oscar Suris, a Wells Fargo spokesman, declined to comment on whether any of the problems the bank identified stemmed from such violations. He previously called Ms. Moua’s testimony “one isolated case” that is being disputed in the courts.
 
Wells officials also acknowledged the possibility of notarization errors. Previously, Wells officials said they believed that their notarization procedures complied with the law in South Carolina, where the bank’s loan foreclosure operations were based. As a result of the reviews, bank officials now say they are taking into consideration the unique requirements of different counties and states.
 
By ERIC DASH
For more: http://nyti.ms/bs89x7
Indiana Attorney General Greg Zoeller and a team of his attorneys fanned across nine counties to sue 10 so-called foreclosure counselors Thursday.
 
Zoeller said it was the next step in his campaign to beef up consumer protection statewide. Last month, the attorney general sued two local for-profit credit counseling companies for what he described as fraudulent practice.
 
Zoeller said his team is also taking a close look at banking behemoths like Chase and Bank of America after word of their representatives "robo-signing," or blindly signing foreclosure documents, tantamount to legal affidavits, on thousands of homeowners nationwide, including a fair number in Indiana.
 
With Lake County Clerk Mike Brown by his side, Zoeller filed a complaint in Lake Circuit Court for an injunction and restitution against Santa Ana, Calif., based Meridian Law Center, run by attorney Kamran Yusuf Malik, for trying to get $2,000 from Sandra Dobson for foreclosure help.
 
"I had way more sense than to send those people any money," said Dobson, from the home she’s owned for 33 years. "I filed a complaint with the Indiana Attorney General’s office last year because the package they sent me looked fraudulent."
 
According to Zoeller, the 10 companies his investigators and attorneys sued have been taking money from people in financial straits and promising to help them save their homes from foreclosures or lower their mortgage rates.
 
Zoeller said the companies did not register to do business in Indiana, did not obtain $25,000 bonds mandated by the state and violated the Consumer Protection Act and other deceptive practices laws.
 
He accused the companies of having agents who seek targets based on foreclosure filings.
 
"Each of the companies have the same modus operandi," Zoeller said. "They’re preying on people who are in financial trouble."
 
Zoeller said collecting any money in restitution or costs from such companies is difficult, but the action at least sends out a warning to unsuspecting homeowners.
 
Dobson said she was in no financial trouble when she received a glossy, "important looking package" from Meridian Law Center Aug. 24, 2009, and immediately filed a complaint with the Attorney General’s office. The last time she was in any foreclosure proceedings was more than 25 years ago, Dobson added.
 
Dobson still praised Zoeller and his actions.
 
"I just think it’s wonderful because we’re just little people, and it’s about time somebody steps up to protect little people," she said. "They’re just con artists ripping off people trying to lead a decent life."
 
Zoeller said he is headed to Oregon for a meeting with of the states’ attorneys general to address the "robo-signing" scandal, but he declined to comment on specific cases in Indiana.
 
"Maybe all the documents are correct, but, in my mind, when you sign your name on those papers, you’re signing a legal affidavit."
 
For more on this article:  http://bit.ly/dDkZFO
 
Please Share Your Comments Below

GOLD Member Roger Taylor just sent me this very interesting article.

My hometown has a neighborhood in the TOP 25. Beth and her mother think Louisville is safe.

What do you think?

Please VOTE for your most dangerous neighborhood in America!

——————————————————————————————

 

Top 25 Most Dangerous Neighborhoods In USA

Do You Agree?

1. Chicago, Ill.
Neighborhood: W. Lake St.
Found within ZIP code: 60612
Predicted annual violent crimes: 297
Violent crime rate (per 1,000): 257.72
My chances of becoming a victim here (in one year): 1 in 4

2. Cleveland, Ohio
Neighborhood: Scovill Ave.
Found within ZIP code: 44104
Predicted annual violent crimes: 307
Violent crime rate (per 1,000): 165.56
My chances of becoming a victim here (in one year): 1 in 6

3. Las Vegas, Nev.
Neighborhood: Balzar Ave.
Found within ZIP code: 89106
Predicted annual violent crimes: 351
Violent crime rate (per 1,000): 145.98
My chances of becoming a victim here (in one year): 1 in 7

4. Las Vegas, Nev.
Neighborhood: N. 28th St.
Found within ZIP code: 89101
Predicted annual violent crimes: 875
Violent crime rate (per 1,000): 135.09
My chances of becoming a victim here (in one year): 1 in 7

5. Atlanta, Ga.
Neighborhood: Carter St.
Found within ZIP code: 30314, 30313
Predicted annual violent crimes:118
Violent crime rate (per 1,000): 126.77
My chances of becoming a victim here (in one year): 1 in 8

6. Philadelphia, Pa.
Neighborhood: N. 13th St.
Found within ZIP code: 19123
Predicted annual violent crimes: 488
Violent crime rate (per 1,000): 117.19
My chances of becoming a victim here (in one year): 1 in 9

7. Atlanta, GA
Neighborhood: Marietta St.
Found within ZIP code: 30313, 30303
Predicted annual violent crimes: 307
Violent crime rate (per 1,000): 114.18
My chances of becoming a victim here (in one year): 1 in 9

8. Las Vegas, Nev.
Neighborhood: D St.
Found within ZIP code: 89106, 89101
Predicted annual violent crimes: 392
Violent crime rate (per 1,000): 113.53
My chances of becoming a victim here (in one year): 1 in 9

9. Washington, D.C.
Neighborhood: L St. SE
Found within ZIP code: 20003
Predicted annual violent crimes: 240
Violent crime rate (per 1,000): 111.34
My chances of becoming a victim here (in one year): 1 in 9

10. Chattanooga, Tenn.
Neighborhood: King St.
Found within ZIP code: 37402, 37403, 37408
Predicted annual violent crimes: 114
Violent crime rate (per 1,000): 110.79
My chances of becoming a victim here (in one year): 1 in 9

11. Charlotte, N.C.
Neighborhood: N. Tryon St.
Found within ZIP code: 28206
Predicted annual violent crimes: 352
Violent crime rate (per 1,000): 108.94
My chances of becoming a victim here (in one year): 1 in 9

12. Memphis, Tenn.
Neighborhood: Florida St.
Found within ZIP code: 38106
Predicted annual violent crimes: 203
Violent crime rate (per 1,000): 108.91
My chances of becoming a victim here (in one year): 1 in 9

13. North Charleston, S.C.
Neighborhood: Echo Ave.
Found within ZIP code: 29403, 29405
Predicted annual violent crimes: 233
Violent crime rate (per 1,000): 108.86
My chances of becoming a victim here (in one year): 1 in 9

14. Louisville, Ky.
Neighborhood: E. Breckinridge St.
Found within ZIP code: 40203, 40204
Predicted annual violent crimes: 226
Violent crime rate (per 1,000): 106.01
My chances of becoming a victim here (in one year): 1 in 9

15. Fort Worth, Texas
Neighborhood: E. Lancaster Ave.
Found within ZIP code: 76102, 76111, 76103
Predicted annual violent crimes: 284
Violent crime rate (per 1,000): 98.12
My chances of becoming a victim here (in one year): 1 in 10

16. Winston-Salem, N.C.
Neighborhood: E. 21st St.
Found within ZIP code: 27105
Predicted annual violent crimes: 175
Violent crime rate (per 1,000): 95.79
My chances of becoming a victim here (in one year): 1 in 10

17. Atlanta, Ga.
Neighborhood: Richardson St.
Found within ZIP code: 30312, 30303
Predicted annual violent crimes: 119
Violent crime rate (per 1,000): 94.94
My chances of becoming a victim here (in one year): 1 in 11

18. Chicago, Ill.
Neighborhood: 4000 S. Federal St.
Found within ZIP code: 60609
Predicted annual violent crimes: 202
Violent crime rate (per 1,000): 93.04
My chances of becoming a victim here (in one year): 1 in 11

19. Memphis, Tenn.
Neighborhood: N. Danny Thomas Blvd.
Found within ZIP code: 38105
Predicted annual violent crimes: 147
Violent crime rate (per 1,000): 90.42
My chances of becoming a victim here (in one year): 1 in 11

20. Cleveland, Ohio
Neighborhood: Chestnut Pl.
Found within ZIP code: 44104, 44115
Predicted annual violent crimes: 156
Violent crime rate (per 1,000): 90.38
My chances of becoming a victim here (in one year): 1 in 11

21. Galveston, Texas
Neighborhood: Church St.
Found within ZIP code: 77550
Predicted annual violent crimes: 84
Violent crime rate (per 1,000): 88.1
My chances of becoming a victim here (in one year): 1 in 11

22. Atlanta, Ga.
Neighborhood: Humphries St. SW
Found within ZIP code: 30310
Predicted annual violent crimes: 119
Violent crime rate (per 1,000): 82.96
My chances of becoming a victim here (in one year): 1 in 12

23. Kansas City, Mo.
Neighborhood: Independence Ave.
Found within ZIP code: 64106
Predicted annual violent crimes: 82
Violent crime rate (per 1,000): 81.97
My chances of becoming a victim here (in one year): 1 in 12


24. Cincinnati, Ohio

Neighborhood: Moore St.
Found within ZIP code: 45210
Predicted annual violent crimes: 150
Violent crime rate (per 1,000): 81.92
My chances of becoming a victim here (in one year): 1 in 12


25. Orlando, Fla.

Neighborhood: W. Central Blvd.
Found within ZIP code: 32805, 32801
Predicted annual violent crimes: 299
Violent crime rate (per 1,000): 79.83
My chances of becoming a victim here (in one year): 1 in 13

 

Thanks to Roger and Wallet Pro
Read more of this article: http://bit.ly/Top25DangerousNeighborhoods  

PLEASE VOTE!

For Your Most Dangerous Neighborhood in America!

Fire Away… I Want To Read Your Comments!
 

 Battle Lines Forming in Clash Over Foreclosures

 
That clash — expected to be played out in courtrooms across the country and scrutinized by law enforcement officials investigating possible wrongdoing by big lenders — leaped to the forefront of the mortgage crisis this week as big lenders began lifting their freezes on foreclosures and insisted the worst was behind them. 
 
Battle Lines Forming in Clash Over Foreclosures
 
 
About a month after Washington Mutual Bank made a multimillion-dollar mortgage loan on a mountain home near Santa Barbara, Calif., a crucial piece of paperwork disappeared.
 
Cynthia Veintemillas, a lawyer in Florida, met with a client, Patrick Jeffs, on Wednesday.
 
Herbert Newlands Jr. of Temple Terrace, Fla., getting foreclosure advice from his lawyer on Tuesday. Florida has been hit hard by foreclosures.
 
But bank officials were unperturbed. After conducting a “due and diligent search,” an assistant vice president simply drew up an affidavit stating that the paperwork — a promissory note committing the borrower to repay the mortgage — could not be found, according to court documents.
 
The handling of that lost note in 2006 was hardly unusual. Mortgage documents of all sorts were treated in an almost lackadaisical way during the dizzying mortgage lending spree from 2005 through 2007, according to court documents, analysts and interviews.
 
Now those missing and possibly fraudulent documents are at the center of a potentially seismic legal clash that pits big lenders against homeowners and their advocates concerned that the lenders’ rush to foreclose flouts private property rights.
 
That clash — expected to be played out in courtrooms across the country and scrutinized by law enforcement officials investigating possible wrongdoing by big lenders — leaped to the forefront of the mortgage crisis this week as big lenders began lifting their freezes on foreclosures and insisted the worst was behind them.
 
Federal officials meeting in Washington on Wednesday indicated that a government review of the problems would not be complete until the end of the year.
 
In short, the legal disagreement amounts to whether banks can rely on flawed documentation to repossess homes.
 
While even critics of the big lenders acknowledge that the vast majority of foreclosures involve homeowners who have not paid their mortgages, they argue that the borrowers are entitled to due legal process.
 
Banks “have essentially sidestepped 400 years of property law in the United States,” said Rebel A. Cole, a professor of finance and real estate at DePaul University. “There are so many questionable aspects to this thing it’s scary.”
 
Others are more sanguine about the dispute.
 
Joseph R. Mason, a finance professor who holds the Louisiana Bankers Association chair at Louisiana State University, said that concerns about proper foreclosure documentation were overblown. At the end of the day, he said, even if the banks botched the paperwork, homeowners who didn’t make their mortgage payments still needed to be held accountable.
 
“You borrowed money,” he said. “You are obligated to repay it.”
 
After freezing most foreclosures, Bank of America, the largest consumer bank in the country, said this week that it would soon resume foreclosures in about half of the country because it was confident that the cases had been properly documented. GMAC Mortgage said it was also proceeding with foreclosures, on a case-by-case basis.
 
While some other banks have also suggested they can wrap up faulty foreclosures in a matter of weeks, some judges, lawyers for homeowners and real estate experts like Mr. Cole expect the courts to be inundated with challenges to the banks’ actions.
 
“This is ultimately going to have to be resolved by the 50 state supreme courts who have jurisdiction for property law,” Professor Cole predicted.
 
Defaulting homeowners in states like Florida, among the hardest hit by foreclosures, are already showing up in bigger numbers this week to challenge repossessions. And judges in some states have halted or delayed foreclosures because of improper documentation. Court cases are likely to hinge on whether judges believe that banks properly fulfilled their legal obligations during the mortgage boom — and in the subsequent rush to expedite foreclosures.
 
The country’s mortgage lenders contend that any problems that might be identified are technical and will not change the fact that they have the right to foreclose en masse.
 
“We did a thorough review of the process, and we found the facts underlying the decision to foreclose have been accurate,” Barbara J. Desoer, president of Bank of America Home Loans, said earlier this week. “We paused while we were doing that, and now we’re moving forward.”
 
Some analysts are not sure that banks can proceed so freely. Katherine M. Porter, a visiting law professor at Harvard University and an expert on consumer credit law, said that lenders were wrong to minimize problems with the legal documentation.
 
“The misbehavior is clear: they lied to the courts,” she said. “The fact that they are saying no one was harmed, they are missing the point. They did actual harm to the court system, to the rule of law. We don’t say, ‘You can perjure yourself on the stand because the jury will come to the right verdict anyway.’ That’s what they are saying.”
 
Robert Willens, a tax expert, said that documentation issues had created potentially severe tax problems for investors in mortgage securities and that “there is enough of a question here that the courts might well have to resolve the issue.”
 
As the legal system begins sorting through the competing claims, one thing is not in dispute: the pell-mell origination of mortgage loans during the real estate boom and the patchwork of financial machinery and documentation that supported it were created with speed and profits in mind, and with little attention to detail.
 
Once the foreclosure wheels started turning, said analysts, practices became even shoddier.
 
For example, the foreclosure business often got so busy at the Plantation, Fla., law offices of David J. Stern — and so many documents had to be signed so banks could evict people from their homes — that a supervisor sometimes was too tired to write her own name.
 
When that happened, Cheryl Samons, the supervisor at the firm, who typically signed about 1,000 documents a day, just let someone else sign for her, court papers show.
 
“Cheryl would give certain paralegals rights to sign her name, because most of the time she was very tired, exhausted from signing her name numerous times per day,” said Kelly Scott, a Stern employee, in a deposition that the Florida attorney general released on Monday. A lawyer representing the law firm said Ms. Samons would not comment.
 
Bill McCollum, Florida’s attorney general, is investigating possible abuses at the Stern firm, a major foreclosure mill in the state, involving false or fabricated loan documents, calling into question the foreclosures the firm set in motion on behalf of banks.
 
That problem extends far beyond Florida.
 
As lenders and Wall Street firms bundled thousands of mortgage loans into securities so they could be sold quickly, efficiently and lucratively to legions of investors, slipshod practices took hold among lenders and their representatives, former employees of these operations say.
 
Banks routinely failed to record each link in the chain of documents that demonstrate ownership of a note and a property, according to court documents, analysts and interviews. When problems arose, executives and managers at lenders and loan servicers sometimes patched such holes by issuing affidavits meant to prove control of a mortgage.
 
In Broward County, Fla., alone, more than 1,700 affidavits were filed in the last two years attesting to lost notes, according to Legalprise, a legal services company that tracks foreclosure data.
 
When many mortgage loans went bad in the last few years, lenders outsourced crucial tasks like verifying the amount a borrower owed or determining which institution had a right to foreclose.
 
Now investors who bought mortgage trusts — investment vehicles composed of mortgages — are wondering if the loans inside them were recorded properly. If not, tax advantages of the trusts could be wiped out, leaving mortgage securities investors with significant tax bills.
 
For years, lenders bringing foreclosure cases commonly did not have to demonstrate proof of ownership of the note. Consumer advocates and consumer lawyers have complained about the practice, to little avail.
 
But a decision in October 2007 by Judge Christopher A. Boyko of the Federal District Court in northern Ohio to toss out 14 foreclosure cases put lenders on notice. Judge Boyko ruled that the entities trying to seize properties had not proved that they actually owned the notes, and he blasted the banks for worrying “less about jurisdictional requirements and more about maximizing returns.”
 
He also said that lenders “seem to adopt the attitude that since they have been doing this for so long, unchallenged, this practice equates with legal compliance.” Now that their practices were “put to the test, their weak legal arguments compel the court to stop them at the gate,” the judge ruled.
 
Yet aside from the actions of a few random judges, little was done to force lenders to change their practices or slow things down. Since March 2009, more than 300,000 property owners a month have received foreclosure notices or lost their home in a foreclosure, according to RealtyTrac, which tracks foreclosure listings.
 
What finally prompted a re-examination of the foreclosure wave was the disclosure in court documents over the last several months of so-called robo-signers, employees like Ms. Samons of the Stern law firm in Florida who signed affidavits so quickly that they could not possibly have verified the information in the document under review.
 
Lenders and their representatives have sought to minimize the significance of robo-signing and, while acknowledging legal lapses in how they documented loans, have argued that foreclosures should proceed anyway. After all, the lenders say, the homeowners owe the money.
 
People who have worked at loan servicers for many years, who requested anonymity to protect their jobs, said robo-signing and other questionable foreclosure practices emanated from one goal: to increase efficiency and therefore profits. That rush, they say, allowed for the shoddy documentation that is expected to become evidence for homeowners in the coming court battles.
 
For example, years ago when banks made loans, they typically stored promissory notes in their vaults.
 
But the advent of securitization, in which loans are bundled and sold to investors, required that loan documents move quickly from one purchaser to another. Big banks servicing these loans began in 2002 to automate their systems, according to a former executive for a top servicer who requested anonymity because of a confidentiality agreement.
 
First to go was the use of actual people to determine who should be liable to a foreclosure action. They were replaced by computers that identified delinquent borrowers and automatically sent them letters saying they were in default. Inexperienced clerical workers often entered incorrect mortgage information into the computer programs, the former executive said, and borrowers rarely caught the errors.
 
Other record-keeping problems that are likely to become fodder for court battles involve endorsements, a process that occurs when notes are transferred and validated with a stamp to identify the institution that bought it. Eager to cut costs, most institutions left the notes blank, with no endorsements at all.
 
Problems are also likely to arise in court involving whether those who signed documents required in foreclosures actually had the authority to do so — or if the documents themselves are even authentic.
 
For example, Frederick B. Tygart, a circuit court judge overseeing a foreclosure case in Duval County, Fla., recently ruled that agents representing Deutsche Bank relied on documents that “must have been counterfeited.” He stopped the foreclosure. Deutsche Bank had no comment on Wednesday.
 
Cynthia Veintemillas, the lawyer representing the borrower in the case, Patrick Jeffs, said the paperwork surrounding her client’s foreclosure was riddled with problems.
 
“Everybody knows the banks screwed up and loaned out money to people who couldn’t pay it back,” she said. “Why are people surprised that they don’t know what they are doing here either?”
 
Meanwhile, another judge on Wednesday indicated that the courts would not simply sign off on the banks’ documentation. Jonathan Lippman, the chief judge of New York’s courts, ordered lawyers to verify the validity of all foreclosure paperwork.
 
“We cannot allow the courts in New York State to stand by idly and be party to what we now know is a deeply flawed process, especially when that process involves basic human needs — such as a family home — during this period of economic crisis,” Judge Lippman said in a statement.
 
For more: http://nyti.ms/clFAba
 

 

 
The owner’s policy assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those which are listed as exceptions in the policy or are excluded from the scope of the policy’s coverage. 
 
Title Insurance and Why It Is A Must
 
 
"Prior to the invention of title insurance, buyers in real estate transactions bore sole responsibility for ensuring the validity of the land title held by the seller. If the title were later deemed invalid or found to be fraudulent, the buyer lost his investment".
 
 
 
Standardized forms of title insurance exist for owners and lenders. The lender’s policies include a form specifically for construction loans, though this is rarely used today.
 
Owner’s policy
 
The owner’s policy assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those which are listed as exceptions in the policy or are excluded from the scope of the policy’s coverage. It also covers losses and damages suffered if the title is unmarketable. The policy also provides coverage for loss if there is no right of access to the land. Although these are the basic coverages, expanded forms of residential owner’s policies exist that cover additional items of loss.
 
The liability limit of the owner’s policy is typically the purchase price paid for the property. As with other types of insurance, coverages can also be added or deleted with an endorsement. There are many forms of standard endorsements to cover a variety of common issues. The premium for the policy may be paid by the seller or buyer as the parties agree; usually there is a custom in a particular state or county on this matter which is reflected in most local real estate contracts. Consumers should inquire about the cost of title insurance before signing a real estate contract which provide that they pay for title charges. A real estate attorney, broker, escrow officer (in the western states), or loan officer can provide detailed information to the consumer as to the price of title search and insurance before the real estate contract is signed. Title insurance coverage lasts as long as the insured retains an interest in the land insured and typically no additional premium is paid after the policy is issued.
 
Lender’s policy
 
This is sometimes called a loan policy and it is issued only to mortgage lenders. Generally speaking, it follows the assignment of the mortgage loan, meaning that the policy benefits the purchaser of the loan if the loan is sold. For this reason, these policies greatly facilitate the sale of mortgages into the secondary market. That market is made up of high volume purchasers such as Fannie Mae and the Federal Home Loan Mortgage Corporation as well as private institutions.
 
The American Land Title Association ("ALTA") forms are almost universally used in the country though they have been modified in some states. In general, the basic elements of insurance they provide to the lender cover losses from the following matters:
 
The title to the property on which the mortgage is being made is either
  • Not in the mortgage loan borrower,
  • Subject to defects, liens or encumbrances, or
  • Unmarketable.
  • There is no right of access to the land.
  • The lien created by the mortgage:
  • is invalid or unenforceable,
  • is not prior to any other lien existing on the property on the date the policy is written, or
  • is subject to mechanic’s liens under certain circumstances.
  • As with all of the ALTA forms, the policy also covers the cost of defending insured matters against attack.
 
Elements 1 and 2 are important to the lender because they cover its expectations of the title it will receive if it must foreclose its mortgage. Element 3 covers matters that will interfere with its foreclosure.
 
Of course, all of the policies except or exclude certain matters and are subject to various conditions.
 
There are also ALTA mortgage policies covering single or one-to-four family housing mortgages. These cover the elements of loss listed above plus others. Examples of the other coverages are loss from forged releases of the mortgage and loss resulting from encroachments of improvements on adjoining land onto the mortgaged property when the improvements are constructed after the loan is mad
 
 
 
For more: http://bit.ly/bj1GgO

 Mortgage Mess May Cost Big Banks Billions

 
“I don’t see how it can be cleared up in a short period of time,” said Richard X. Bove, an analyst with Rochdale Securities. “The moratorium won’t last that long but the problem will last at least four or five years, maybe a decade.” In the short term, he said, “it could easily cost $1.5 billion per quarter.” 
 
After scratching their heads for weeks over how much the foreclosure mess will hurt banks’ bottom lines, investors got out their calculators Thursday to tally the potential costs — and sent bank stocks plunging.
 
Analyst estimates of the possible toll varied widely, but the fear was evident in the stock market. The share price of Bank of America fell 5.2 percent, while shares of JPMorgan Chase sank almost 2.8 percent.
 
“The market never likes uncertainty, and it seems like every day we’re adding to the list of things we need to worry about with the financials,” said Jason Goldberg, an analyst with Barclays Capital. “The industry needs to work quickly to put this issue behind them.”
 
Wall Street initially hoped the banks would do just that but as the political furor grew, a quick end to the crisis was looking less and less likely. On Wednesday, 50 state attorneys general announced they were investigating the practices of the mortgage servicing industry, while Florida’s attorney general subpoenaed the nation’s largest mortgage processor, L.P.S., as part of a broader investigation.
 
In some cases, officials at mortgage servicers signed hundreds of documents a day with barely a chance to review them — the so-called robo-signers — while doubts have arisen about the veracity of the original documents compiled as part of the foreclosure process.
 
“I don’t see how it can be cleared up in a short period of time,” said Richard X. Bove, an analyst with Rochdale Securities. “The moratorium won’t last that long but the problem will last at least four or five years, maybe a decade.” In the short term, he said, “it could easily cost $1.5 billion per quarter.”
 
Meanwhile, the foreclosure machinery in many states has ground to a halt. Major institutions like Bank of America, JPMorgan and GMAC Mortgage have halted foreclosures in many states, and have not said when they would resume. As a result, foreclosed homes will remain on the bank’s books while racking up thousands of dollars a month in extra costs.
 
Until Thursday, Wall Street regarded the foreclosure issue as a risk to the banks’ reputations, rather than their bottom lines. Indeed, some analysts insisted it was unlikely that wide-scale abuses would be found.
 
“It’s inexcusable that the banks didn’t staff up to meet the surge in foreclosures,” said Christopher Kotowski, an analyst with Oppenheimer. “On the other hand, we need to look at whether they are filing foreclosures on a massive basis against people who are not delinquent. So far, I haven’t seen any evidence that they are.”
 
Inside the investment houses, several traders said nerves were frazzled further by worries that banks could face much bigger mortgage related losses, not from foreclosures, but because of questions about how the money was lent in the first place. If it turns out that mortgages were bundled together and sold improperly, more holders could sue the banks and force them to buy back tens of billions in mortgage-backed securities.
 
An alarming report on Bank of America, compiled by Branch Hill Capital, a San Francisco hedge fund, circulated widely on Wall Street on Thursday. Branch Hill suggested that the bank, the nation’s largest, could be facing more than $70 billion in losses from mortgage securities that it may have to repurchase from Fannie Mae and Freddie Mac, as well as private investors.
 
“We think this is a very important issue, and the liability will be substantial,” said Manal Mehta, a partner at Branch Hill. “There has been pervasive bad behavior throughout the system.” The fund is betting that Bank of America shares could decline because of the potential liability.
 
Bank of America declined to comment Thursday. But the company’s chief executive, Brian T. Moynihan, said last month at an investor conference that adequate reserves had been taken to protect against any losses that could materialize if it was forced to repurchase mortgage securities. “This will be manageable over time, but it has cost us a lot of money so I’m not making light of it,” he said. “We’ll continue to manage it.”
 
On Wednesday, JPMorgan said it had added $1 billion to its reserves to cover faulty home loans that it was obligated to repurchase from Fannie Mae, Freddie Mac and private insurers. It has set aside a total of $3 billion for potential repurchases.
 
Even if the larger losses envisioned by Mr. Mehta do not materialize, the foreclosure issue remains a worry. In a report, Paul Miller, an analyst with FBR Capital Markets, forecast that the controversy would cost the banking industry $6 billion to $10 billion. He estimated that each month’s delay cost the banks $1,000 per home loan, so if there was a three-month delay on the roughly two million homes currently in foreclosure, that translated into a $6 billion hit.
 
In addition to the losses directly caused by the delay, Mr. Miller foresees additional charges totaling $3 billion to $4 billion to cover lawsuits stemming from faulty foreclosure procedures.
 
For now, bank executives are not making any predictions how long the foreclosure halt will last.
 
“If you’re talking about three or four weeks it will be a blip in the housing market,” said Jamie Dimon, chief executive of JPMorgan Chase, in a conference call on Wednesday. “If it went on for a long period of time, it will have a lot of consequences, most of which will be adverse on everybody.”
 
For more: http://nyti.ms/diFs2w

This is what we can expect if ‘CAP & TRADE" legislation is enacted:

We thought we were angry before!  This is getting even scarier! 
 
Well read this one, it is all snoped and links are at the bottom of the page. If Congress strong arms this through America is finished!!! Hope you pass this on to every single person you know. Our government is totally out of control. 
 
A License Required for your HOUSE? 
 
Thinking about selling your house?  Take a look at H.R. 2454 (Cap and Trade bill), that has passed the House of Representatives and being considered by the Senate. 
 
Home owners take note & tell your friends and relatives who are home owners! 
 
Beginning 1 year after enactment of the Cap and Trade Act, you won’t be able to sell your home unless you retrofit it to comply with the energy and water efficiency standards of this Act. 
 
H.R. 2454, the "Cap & Trade" bill will be the largest tax increase any of us has ever experienced. 
 
The Congressional Budget Office (supposedly non-partisan) estimates that in just a few years the average cost to every family of four will be $6,800 per year. No one is excluded. 
 
A year from now you won’t be able to sell your house
 
The caveat is that if you have enough money to make required major upgrades to your home, then you can sell it. But, if not, then forget it. Even pre-fabricated homes ("mobile homes") are included. In effect, this bill prevents you from selling your home without the permission of the EPA administrator. 
 
To get this permission, you will have to have the energy efficiency of your home measured. Cost $200 to start. Then the government will tell you what your new energy efficiency requirement is and you will be forced to make modifications to your home under the retrofit provisions of this Act to comply with the new energy and water efficiency requirements, which easily could cost over $50,000. 
 
Then you will have to get your home measured again and get a license 
(called a "label" in the Act) that must be posted on your property to show what your efficiency rating is; sort of like the Energy Star efficiency rating label on your refrigerator or air conditioner. If you don’t get a high enough rating, you can’t sell. 
 
And, the EPA administrator is authorized to raise the standards every year, even above the automatic energy efficiency increases built into the Act. 
 
The EPA administrator, appointed by the President, will run the Cap & Trade program  (AKA the "American Clean Energy and Security Act of 2009") and is authorized to make any future changes to the regulations and standards he/she alone determines to be in the government’s best interest. 
 
Requirements are set low initially so the bill will pass Congress; then the Administrator can set much tougher new standards every year. 
 
The Act itself contains annual required increases in energy efficiency for private and commercial residences and buildings. However, the EPA administrator can set higher standards at any time.Sect. 202 Building Retrofit Program mandates a national retrofit program to increase the energy efficiency of all existing homes across America. 
 
The label will be like a license for your car. You will be required to post the label in a conspicuous location in your home and will not be allowed to sell your home without having this label. And, just like your car license, you will probably be required to get a new label every so often – maybe every year. 
 
The government estimates the cost of measuring the energy efficiency of your home should only cost about $200 each time. Remember what they said about the auto smog inspections when they first started: that in California it would only cost $15. 
 
That was when the program started. Now the cost is about $50 for the inspection and certificate; a 333% increase. Expect the same from the home labeling program. 
 
CHECK OUT Just a few of the sites; 
 
Cap and Trade: A License Required for your Home 
 
http://www.nachi.org/forum/f14/cap-and-trade-license-required-your-home-44750/ 
 
HR2454 American Clean Energy & Security Act: http://www.govtrack.us/congress/bill.xpd?bill=h111-2454 
 
Cap & Trade A license required for your home: http://www.prisonplanet.com/cap-and-trade-a-license-required-for-your-home.html 
 
Cap and trade is a license to cheat and steal: http://www.sfexaminer.com/opinion/columns/oped_contributors/Cap-and-trade-is-a-license-to-cheat-and-steal-45371937.html 
 
Cap and Trade: A License Required for your Home: http://www.freerepublic.com/focus/news/2393940/posts 
 
Thinking about selling you House? Look at HR 2454: http://www.federalobserver.com/2009/10/01/thinking-about-selling-your-house-a-look-at-h-r-2454-cap-and-trade-bill/ 
If you own a Home, Read this!!

 Mortgage Broker Fined, Sentenced

 
The 188-month sentence is a clear sign that those responsible for mortgage fraud are being held accountable, Robert O’Neill, United States Attorney for the Middle District of Florida, said in a press statement. 
 
A federal judge sentenced Peter Bakowski to more than 15 years in federal prison, and ordered him to pay $16.1 million in restitution, after he pled guilty on charges related to a mortgage fraud scheme.
 
The 188-month sentence is a clear sign that those responsible for mortgage fraud are being held accountable, Robert O’Neill, United States Attorney for the Middle District of Florida, said in a press statement.
 
Bakowski, a Tampa resident and a Florida-licensed mortgage broker, was involved in a Ponzi-type scheme, the statement said.
 
Since 2004, he was involved in multiple sales of the same mortgage to more than one person, and in order to keep the scheme afloat, he would pay returns on the preceding investor’s investments with money from subsequent investors.
 
There were more than 30 victims, including investors and institutions, and more than 150 properties involved, the statement said.
 
 
Read more: Mortgage broker fined, sentenced – Tampa Bay Business Journal 
 
For more: http://bit.ly/aKDrlb
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