Friday, October 08, 2010

The Foreclosure Scam Is Exploding Before Our Eyes

hat tips - a number of JJP Posters over the past few months.

Do you remember when the mortgage crisis first began, you had the pundits on CNBC and other places had the nerve to try and blame the crisis on loans to minorities and poor people, due to governmental pressures caused by the Community Reinvestment Act. You remember that garbage. Just trying to hide that the 'Masters of the Universe' on Wall Street were gambling, amoral conscienceless thieves.

I'm not an expert. I only know what I read from various sources and what I see on tv. I remember watching Congresswoman Nancy Kaptur on Bill Moyers telling folks in her district undergoing foreclosure to just stay in their homes. It was the first time that I had heard someone say this in all seriousness. That if you were being foreclosed upon, don't give up.

The next big thing that I heard from folks that had their finger on the pulse of this crisis, was to force the banks to PRODUCE THE PAPERS.

Simple concept, isn't it?

Sort of obvious.

To decent people like you and me, and plenty of the people who were getting foreclosed upon across the country. They just knew..

KNEW...

that nobody could be harassing them like the banks were..

or ignoring the letters and calls and please to sit down and renegotiate the terms of the mortgage..

NOBODY could be causing them the ulcer that they were getting..

WITHOUT HAVING THE ABSOLUTE PROOF that they controlled the mortgage..

because to do so would be absolute FRAUD.

...and the banks wouldn't do that. They wouldn't step into court, ready to destroy your financial reputation on lies.....

THE HELL THEY WOULDN'T.






Reading article upon article that I would see linked here, at JJP and elsewhere is giving me this feeling that we're about to bear down and feel the brunt of a hurricane. Too many articles, with bits and pieces here and there. But, the same themes keep on being presented, and the big theme is FRAUD.

Here's a sample of what I mean:

Ohio accuses Ally of 'fraudulent' foreclosures

Ally Financial and its subsidiary GMAC Mortgage are being sued by the Ohio Attorney General for allegedly submitting fraudulent documents in hundreds of foreclosure cases across the state.

The lawsuit, filed Wednesday in Lucas County, comes after Ally halted foreclosures last week in Ohio and the 22 other U.S. states that require judicial approval of the process. The move came after it was revealed that some bank employees had signed foreclosure affidavits without verifying that the documents were accurate, a process now known as "robo-signing."

Attorney General Richard Cordray has requested an injunction that would block Ally from moving forward on any pending foreclosure in Ohio or allowing the home to be sold. He is also asking for civil penalties of up to $25,000 for every violation of Ohio law and for consumer restitution.

Company Stops Insuring Titles in Chase Foreclosures

A major title insurance company has stopped insuring homes foreclosed by JPMorgan Chase, another sign that the controversy over the legal practices of the big lenders is starting to influence the housing market.

The company, Old Republic National Title Insurance, told its agents Friday that it would not write policies on foreclosed Chase properties until “the objectionable issues have been resolved,” according to a memorandum sent out by the firm’s underwriting department.

A Chase spokesman declined to comment. Old Republic executives did not return calls for comment. The title insurer, which is based in Minneapolis, said earlier in the week that it would not write policies for properties that had been foreclosed by another big lender, GMAC Mortgage.

As GMAC and Chase try to deal with questions over their legal methods, they have halted all foreclosures in the 23 states where they need a court’s approval. Late Friday, Bank of America said it would stop all its pending foreclosures in those states as well.

GMAC and Bank of America have declined to say how many cases are involved. Chase said it was halting 56,000 cases. About two million households in the country are in foreclosure, and millions more are on the verge.

Homes in Florida Seized Without Notice of Foreclosure: Suspiciously Large Number of “The Dog Ate My Summons” Filings

I spoke to the individuals who compiled this sample; the roster on the 4ClosureFraud site is from DuVal county only. They’ve pulled records from across the state and find similar high volumes in every county. They have refined their queries to exclude judicial notices that are not germane and are up to nearly 9000 questionable notices of lost summons, nearly all from 2010 (in three counties, they have gone into 2009 records). They are in the process of drilling back in time to come up with a more definitive figure.

Both judicial and non-judicial states require that the person being foreclosed upon receive some sort of notification that they are at risk of losing their home as a result of serious delinquency on their mortgage borrowings. In judicial states such as Florida, the first step is the service of process. As 4ClosureFraud noted:

Proper service of process initially establishes personal jurisdiction of the court over the person served. If the defendant ignores further pleadings or fails to participate in the proceedings, then the court or administrative body may find the defendant in default and award relief to the claimant, petitioner or plaintiff. Service of process must be distinguished from service of subsequent documents (such as pleadings and motion papers) between the parties to litigation.

One has to remember the timetable here: foreclosure notices take place during an active phase of the entire foreclosure process. What are the odds that these “lost” notices reflect legitimate lost documents, as opposed to failure to provide proper notice at all and lying to the court after the fact? The sheer volume strongly suggests the overwhelming majority are the result of the utter disregard of the foreclosure mills for due process. As noted earlier, this sample is from DuVal county (see the CA in the case identifier). And notice how many look bogus; they don’t even have the borrower’s name on them (”for unknown tenants/owners”, “for Mortgage Electronic Registry Services”; many in the name of Jane or John Doe).

It may seem incredible that the foreclosure mills aren’t bothering to provide summons; after all, how hard is it to provide service at someone’s home? All the process server needs to do is slip a notice under the door or tape it to their front door. But the foreclosure mills are processing cases in such volumes that performing this task has, well, become a tad inconvenient.

Connecticut halts all foreclosures for all banks

Connecticut Attorney General Richard Blumenthal on Friday ordered a moratorium on all foreclosures by all banks for 60 days--the most radical action taken by a state on issue of document irregularities.

California also expanded the moratorium on foreclosures it announced last week on Ally Financial foreclosures to include those by J.P. Morgan Chase.

Calling the companies' review of key foreclosure documents "a ruse," California Attorney General Jerry Brown (D) ordered J.P. Morgan to prove it is following the law before it continues foreclosures in the state.

Both J.P. Morgan Chase and Ally have frozen foreclosures in 23 states because some employees had signed off on foreclosure paperwork without properly reviewing the files.

Colorado and Illinois have stopped foreclosures by Ally and at least seven other states have launched probes into the issue. But Connecticut is the first to institute an industry-wide ban.

I had plenty of stories to choose from, but this was just a sampling. When you have states STOPPING foreclosures. When you have insurance companies telling a company the size of Chase - we just don't want your business right now, because you are crooked. When you see the devastation being done by the foreclosure mills in the state of Florida, where it seems due process is just about GONE.....

Something is absolutely building out there. It's been building, and as Main Street watched as Wall Street got bailout upon bailout, and wondered ' what about us?' Houses going underwater in community after community. Watching as entire neighborhoods were being decimated by this mortgage crisis. Watching as people tried to refinance their homes in vein as the banks, who received BILLIONS in taxpayer monies, would stiff arm homeowner upon homeowner.

Now, we are finding out that it is possible that the banks took hundreds of thousands if not MILLIONS of homes with complete FRAUD.

How bad must it be?

The spineless Congress thought they could find a way to bail out the banks from the responsibility of this fraud, with bill H.R. 3808

The bottom line is that it would give cover to the fraud of fake documents and give cover to foreclosure mills like in Florida.

Interstate Recognition of Notarizations Act

the gist of bill H.R. 3808:

Max Gardner, a foreclosure defense attorney, said the timing of the bill was suspicious, considering fraudulent notarization of bogus foreclosure affidavits is at the heart of a scandal that has prompted the nation's largest banks to pause foreclosures in 23 states.

"The timing is just a little curious to me that all of a sudden you can't get anything through the Senate at all and then all a sudden on a voice vote," Gardner said. "This was first introduced in the House in 2007."

The legislation, titled the "Interstate Recognition of Notarizations Act," would "require any Federal or State court to recognize any notarization made by a notary public licensed by a State other than the State where the court is located when such notarization occurs in or affects interstate commerce." The bill would also require courts to recognize electronic notarizations.

"The thing that concerns me about the bill is that the provisions in it that allow for digital notarization by electronic means," said Gardner, "which implies that anyone with the appropriate software could notarize a digital document or image of a document, which would allow someone to notarize a document without seeing someone execute the document or doing the things a notary is supposed to do. In my mind that would lead a broad exception for more fraudulent practices."

Enough concerns were raised to the point where the President did the right thing and issued a veto:

Why President Obama is Not Signing H.R. 3808
Posted by Dan Pfeiffer on October 07, 2010 at 01:15 PM EDT

Today, the White House announced that President Obama will not sign H.R. 3808, the Interstate Recognition of Notarizations Act of 2010, and will return the bill to the House of Representatives. The Interstate Recognition of Notarizations Act of 2010 was designed to remove impediments to interstate commerce. While we share this goal, we believe it is necessary to have further deliberations about the intended and unintended impact of this bill on consumer protections, including those for mortgages, before this bill can be finalized.

Notarizations are important for a large range of documents, including financial documents. As the President has made clear, consumer financial protections are incredibly important, and he has made this one of his top priorities, including signing into law the strongest consumer protections in history in the Wall Street Reform and Consumer Protection Act. That is why we need to think through the intended and unintended consequences of this bill on consumer protections, especially in light of the recent developments with mortgage processors.

The authors of this bill no doubt had the best intentions in mind when trying to remove impediments to interstate commerce. We will work with them and other leaders in Congress to explore the best ways to achieve this goal going forward.

Thank you, Mr. President.

I do believe it's about to get even uglier out there in the real estate landscape with the investigations done on the fraudulent documents. I believe it's system-wide and rampant.

And, what about the original charge that loans to minorities and the poor because the mean old government forced the innocent, helpless bankers to do so because of the Community Reinvestment Act?

Racial predatory loans fueled U.S. housing crisis: study

Predatory lending aimed at racially segregated minority neighborhoods led to mass foreclosures that fueled the U.S. housing crisis, according to a new study published in the American Sociological Review.

Predatory lending typically refers to loans that carry unreasonable fees, interest rates and payment requirements.

Poorer minority areas became a focus of these practices in the 1990s with the growth of mortgage-backed securities, which enabled lenders to pool low- and high-risk loans to sell on the secondary market, Professor Douglas Massey of the Woodrow Wilson School of Public and International Affairs at Princeton University and PhD candidate Jacob Rugh, said in their study.

The financial institutions likely to be found in minority areas tended to be predatory -- pawn shops, payday lenders and check cashing services that "charge high fees and usurious rates of interest," they said in the study.

The study, which used data from the 100 largest U.S. metropolitan areas, found that living in a predominantly African-American area, and to a lesser extent Hispanic area, were "powerful predictors of foreclosures" in the nation.

Even African-Americans with similar credit profiles and down-payment ratios to white borrowers were more likely to receive sub-prime loans, according to the study.

"As a result, from 1993 to 2000, the share of sub-prime mortgages going to households in minority neighborhoods rose from 2 to 18 percent," Massey and Rugh said.

EVEN AFRICAN-AMERICANS WITH SIMILAR CREDIT PROFILES AND DOWN-PAYMENT RATIOS TO WHITE BORROWERS WERE MORE LIKELY TO RECEIVE SUB-PRIME LOANS.

This foreclosure crises has resulted in the largest loss of Black wealth in the history of this country. It was based upon fraud from practically the beginning, with scams and targeting of sub-primes, to now we know fraudulent documents. What they did was fraud, and somebody needs to be in an orange jumpsuit over this.

1 comment:

The Angry Independent said...

Houses being foreclosed without court documents, insurance companies refusing to cover titles because they have lost trust in banks... it just goes on and on. Every week there seems to be another story about just how ugly this thing is. I hope this doesn't turn into a huge S&L scandal 2.0 (a supersized version).

What really annoys me is the racial disparity in lending practices, even when Blacks have similar credit ratings. I had experiences years ago (on a smaller scale) where I was turned down for a car loan... (one which would have been paid in about 18 months or so...short term, for a used car). I was a hardworking young man in his twenties who needed a more reliable way to get to work. I had been on my job approx 4-5 years at the time...and had a steady 5, 6 year work history. Even had a little credit...with my apartment and all. Even provided references. I was going by the TV commercial to potential customers...telling people to come to the car lot... that they would work with anyone. They damn near guaranteed that everyone would be treated right and would have access to financing. Well... when I got there, I was told that they could do nothing for me. No financing available... at least not for me. They wanted to sell me a cash car instead (cash deal to be paid in full) which was a piece of junk that they wanted to get rid of. When I complained.. they finally offered me financing on a decent $3,000-4,000 car with an interest rate of somewhere in the vicinity of 24, 25%+, plus a hefty down payment. They told me that "I was too much of a risk". I took that as meaning... as a Black guy... I was too much of a risk... which is basically what he was telling me. I said Hell no...and left. Oh yeah.... they also promised that if they couldn't get a customer into a car... they would provide the ride home or pay cab fair... needless to say, they lied about that too. (and this was a well respected "reputable" car dealer in St. Louis).

But it bugged me for years because I knew of co-workers who were white young men... who had less time on the job, but were getting good deals without co-signers.

Then my own bank (one that I had been with for about 10 years), turned me down for a car loan.
I left shortly thereafter...and went to a credit union, which appreciates my business...and they approved the loan the same week that I joined. That 5 year loan was paid off a few years ago. (Black folks... if you are a young professional... young blue collar worker, working class and need a financial institution that will back you...go with a credit union).

But I doubted myself and thought all of this was just in my head. I didn't want to believe that this kind of subprime nonsense, and disparities with loans along racial lines still went on. But these more recent reports are telling a different story...

It probably hasn't been my imagination all this time afterall.