Nineteen months. That has how long it has been since I last made a house payment. Some would tell me to pay, and to those people, I ask one simple question: Who am I supposed to pay?
I signed a mortgage with a company we will call Mortgage Trust Company*, and paid on it for two and a half years. It turns out, the mortgage was sold by Mortgage Trust Company, to Fannie Mae just 4 months after I bought the house. Mortgage Trust Company was the servicer. The problem is, Mortgage Trust Company didn't tell anyone that it had been sold. Actually, not only did they fail to tell anyone, they even testified in court, producing (faked, forged) documentation to say that they still owned the note and mortgage. Fraud. Perjury. Forgery.
I sued them for that. They paid me a 5 figure settlement amount to keep that out of court.
Then, it turned out that Mortgage Trust Company had actually sold the note and mortgage twice. Not only to Fannie Mae, but to Nationstar mortgage. I don't know how that was legal, since the note and mortgage had already been sold to Fannie Mae, but Mortgage Trust Company hasn't seemed to care a whole lot about the truth.
There are now three different banks who claim to own my note and mortgage, but none of them can produce the original paperwork. Since the original note is a negotiable instrument much like an endorsed check, anyone wishing to foreclose must either produce the original, or be able to testify that the original was in their possession when it was lost or destroyed. Since no one can do that, I have thus far been in a free house.
Even if I had a desire to pay, or to turn the house over to the bank, which one do I compensate? This is why we are in the mess we are in now.
* Names have been changed to comply with the terms of a settlement agreement
Showing posts sorted by relevance for query mortgage. Sort by date Show all posts
Showing posts sorted by relevance for query mortgage. Sort by date Show all posts
Friday, April 8, 2011
Friday, May 3, 2013
Banks screwing up
For those who may not remember or are new to this blog, I was swept up in the mortgage mess that started our economic downturn. You can read about the summary here. I declared bankruptcy in 2009 as a result. My mortgage bank lied and provided false documents in court, and I was able to prove it. I sued them in Federal Court, and we settled out of court for $7,500. They paid me to go away. Then, in June of 2011, I won the foreclosure case after a year and a half of acting as my own attorney as I fought it in court.
Because no one knows who owns the mortgage, there are three different entities who have a potential claim:
1 The original bank. (Let's call them Mortgage Trust Company) They are the ones that I beat in court. They claimed to own my mortgage, sold it, filed the assignment with the courthouse, but still claim to be the mortgage holder.
2 Fannie Mae (FNMA) They also claim to be the owner, and they claim that Mortgage Trust Company is acting on their behalf. Like Mortgage Trust Company, they cannot produce a single document to show that they are the owners of the note or mortgage.
3 Nationstar mortgage. There is a recorded document at the courthouse that names Nationstar as the mortgage holder, and it is signed by Mortgage Trust Company's agent, MERS. The problem here is that Nationstar has no record of this.
Clear as mud? So last year, they started trying to collect money again. So, last month, I filed another lawsuit in Federal Court. This time, I was able to get an attorney. Let's see how much money we get this time.
I am not alone. In Florida, the banks are still lying and committing fraud to steal people's homes. This needs to stop, but I am not counting on our corrupt government to stop it. This family has been messing with it for two years:
Because no one knows who owns the mortgage, there are three different entities who have a potential claim:
1 The original bank. (Let's call them Mortgage Trust Company) They are the ones that I beat in court. They claimed to own my mortgage, sold it, filed the assignment with the courthouse, but still claim to be the mortgage holder.
2 Fannie Mae (FNMA) They also claim to be the owner, and they claim that Mortgage Trust Company is acting on their behalf. Like Mortgage Trust Company, they cannot produce a single document to show that they are the owners of the note or mortgage.
3 Nationstar mortgage. There is a recorded document at the courthouse that names Nationstar as the mortgage holder, and it is signed by Mortgage Trust Company's agent, MERS. The problem here is that Nationstar has no record of this.
Clear as mud? So last year, they started trying to collect money again. So, last month, I filed another lawsuit in Federal Court. This time, I was able to get an attorney. Let's see how much money we get this time.
I am not alone. In Florida, the banks are still lying and committing fraud to steal people's homes. This needs to stop, but I am not counting on our corrupt government to stop it. This family has been messing with it for two years:
Sunday, February 12, 2017
The end of my mortgage story
For those of you who are not familiar with the story of my mortgage, here is the tl;dr version:
I had a house that lost two thirds of its value in the real estate crash. With no other way to stop the bleeding, I declared bankruptcy and was going to turn the house over to the bank. The bank testified to the bankruptcy court that they were the owner of the note and the mortgage, but were lying. They had sold the note and mortgage to Fannie Mae two years earlier.
I sued them for fraud and we settled out of court for almost $10,000. The mortgage holder that wasn't then sold the note and mortgage again, this time to Nationstar mortgage. They recorded the sale in the county clerk's office. At this point, there were at least four different entities that had claims to this mortgage: MERS, Nationstar, Fannie Mae, and the originating bank.
Then the originating bank tried to foreclose. The foreclosure was dismissed, and Nationstar claimed to not have any record of owning the mortgage.
The feds stepped in and sued the banks. I got another $4,000 in THAT lawsuit.
The originating bank continued to send me demands for payment, even though prohibited from doing so by the bankruptcy court, and the fact that they no longer own the note and mortgage. So after a few years of this, I got tired of it and sued several more times over the next few years. I wound up getting another $25,000 in damages from those suits.
Then, with only a month left until the statute of limitations was to kick in, the original bank filed papers transferring the mortgage from NationStar and Fannie Mae back to themselves. The only problem was that I had letters from both of them saying that they had no knowledge of these transfers.
The original bank then filed for foreclosure, claiming that they had lost the original note and mortgage, but (trust us, they said) we are entitled to foreclose.
I was all set to fight them in court. I had proof that they were lying, and I was going to keep the house. If I won, the statute of limitations would have passed, and the house would have been mine to keep.
They got a federal judge to rule that the bank's lying was immaterial, because I had declared bankruptcy. A person who has declared bankruptcy, he wrote, cannot fight lawsuits from creditors, even ones who were only creditors because of their own fraudulent activity and statements, without undoing the bankruptcy. I was told by the judge's staff that he wasn't about to give away free houses. This would have exposed me to my old debts, along with 5 years of interest and penalties. I had to give in, and they got the house.
At least they have finally left me alone, paid me a total of about $50,0000, and I got to live in that house for five years, rent free. Still, they committed fraud and got away with it.
Don't feel sorry for the banks. They made hundreds of billions of dollars.
I had a house that lost two thirds of its value in the real estate crash. With no other way to stop the bleeding, I declared bankruptcy and was going to turn the house over to the bank. The bank testified to the bankruptcy court that they were the owner of the note and the mortgage, but were lying. They had sold the note and mortgage to Fannie Mae two years earlier.
I sued them for fraud and we settled out of court for almost $10,000. The mortgage holder that wasn't then sold the note and mortgage again, this time to Nationstar mortgage. They recorded the sale in the county clerk's office. At this point, there were at least four different entities that had claims to this mortgage: MERS, Nationstar, Fannie Mae, and the originating bank.
Then the originating bank tried to foreclose. The foreclosure was dismissed, and Nationstar claimed to not have any record of owning the mortgage.
The feds stepped in and sued the banks. I got another $4,000 in THAT lawsuit.
The originating bank continued to send me demands for payment, even though prohibited from doing so by the bankruptcy court, and the fact that they no longer own the note and mortgage. So after a few years of this, I got tired of it and sued several more times over the next few years. I wound up getting another $25,000 in damages from those suits.
Then, with only a month left until the statute of limitations was to kick in, the original bank filed papers transferring the mortgage from NationStar and Fannie Mae back to themselves. The only problem was that I had letters from both of them saying that they had no knowledge of these transfers.
The original bank then filed for foreclosure, claiming that they had lost the original note and mortgage, but (trust us, they said) we are entitled to foreclose.
I was all set to fight them in court. I had proof that they were lying, and I was going to keep the house. If I won, the statute of limitations would have passed, and the house would have been mine to keep.
They got a federal judge to rule that the bank's lying was immaterial, because I had declared bankruptcy. A person who has declared bankruptcy, he wrote, cannot fight lawsuits from creditors, even ones who were only creditors because of their own fraudulent activity and statements, without undoing the bankruptcy. I was told by the judge's staff that he wasn't about to give away free houses. This would have exposed me to my old debts, along with 5 years of interest and penalties. I had to give in, and they got the house.
At least they have finally left me alone, paid me a total of about $50,0000, and I got to live in that house for five years, rent free. Still, they committed fraud and got away with it.
Don't feel sorry for the banks. They made hundreds of billions of dollars.
Sunday, April 4, 2010
The foreclosure ripoff
Last month, I wrote a post about the foreclosure problem here in Florida and across the nation. When the financial problem began, I was a part of the crowd that was drinking the Conservative Kool-Aid and blaming government regulation and interference, with a heaping helping of blaming people for taking out loans they could not afford.
I have since reevaluated that position. There is blame enough for everyone, and the biggest crooks here are in the Nation's Financial Sector. Let me walk you through this (all names used here with the Exception of MERS are fictional for illustrative purposes, and are not intended to represent real or imagined people or businesses):
First National Federal Bank of Florida makes a loan to the Smith family so they can buy a home. That loan is written down as a "note" and the "note" is secured by a mortgage on the Smith home. The Mortgage states that if the note is not paid, the owner or holder of the note is entitled to force the sale of the home, and the proceeds are used to pay off the note, with the balance of the funds going to the Smiths. The mortgage is recorded at the County Clerk's office as an official record for about $10.
The bank sells that loan to a trust, where it is securitized, bundled with a few hundred other loans, and resold as an investment to the Franklin Secure Real Estate Investment Trust. The bank has made their money, and their risk is covered. There is no incentive for First National Federal Bank of Florida to make sure that the Smiths can pay the note, because the note will be sold long before the Smiths default. The only real motivation for the bank, is for them to originate as many loans as possible, and sell them quickly before they default. That is how an assistant manager at McDonalds qualifies to buy 5 houses.
The Franklin Secure REIT sells the notes to Richards and Company Investment REIT, who sells them to the Wells and Frederick REIT. The consumer never knows this, because the note is still serviced by the First National Federal Bank of Florida, who takes their payments and forwards them to the owner through a shell company (more on that in a minute).
There are thousands of mortgage transfers made each day in Florida alone, and continually recording these transactions at the County Clerk's office at $10 a pop is costing banks $600 million a year. They decide that there MUST be an easier way. This is the "way" that they came up with:
So, in 1999 a Corporation called Mortgage Electronic Registrations Systems (MERS) was formed. MERS is a shell corporation that is jointly owned by the Nation's large banks, has no financial stake in the real estate mortgages, but mortgages are all registered to MERS, and the 44 employees of MERS keep track of who actually owns what Mortgage. MERS is the registered holder on over 55 million mortgages. They avoid the $10 fee, and save the banking industry billions. The problem is that they have taken our Nation's Public records system, and made it so no one knows exactly who owns what, and during all the transferring that went on, the original note is lost. This makes it impossible in many cases for a bank (any bank) to prove they own the note, but that doesn't stop them from trying.
This allows mortgage fraud on a scale that was unheard of for the thousands of years of property law that existed before MERS came along. Fake assignments, contracts, affidavits, and other evidence has been used to take homes that banks had no right to take.
The reason why I support people fighting this is that since no one knows for sure who owns what, there is a chance that settling with who you think is the owner of your mortgage may result in the REAL holder taking your home when the note IS eventually found, or may result in more than one bank claiming that you owe them money. In one case here in Lee County, Florida, a homeowner was foreclosed upon by two different banks, both of whom claimed to be the owner of the mortgage and note, and both of whom had paperwork and "evidence" to prove it. (The cases are American Home Mortgage Servicing v. Joanne Fredenburg Case 08-CA-050001, and Deutsche Bank National Trust Co. v. Joanne Fredenburg Case 08-CA-051319)
There will be more to follow on this...
I have since reevaluated that position. There is blame enough for everyone, and the biggest crooks here are in the Nation's Financial Sector. Let me walk you through this (all names used here with the Exception of MERS are fictional for illustrative purposes, and are not intended to represent real or imagined people or businesses):
First National Federal Bank of Florida makes a loan to the Smith family so they can buy a home. That loan is written down as a "note" and the "note" is secured by a mortgage on the Smith home. The Mortgage states that if the note is not paid, the owner or holder of the note is entitled to force the sale of the home, and the proceeds are used to pay off the note, with the balance of the funds going to the Smiths. The mortgage is recorded at the County Clerk's office as an official record for about $10.
The bank sells that loan to a trust, where it is securitized, bundled with a few hundred other loans, and resold as an investment to the Franklin Secure Real Estate Investment Trust. The bank has made their money, and their risk is covered. There is no incentive for First National Federal Bank of Florida to make sure that the Smiths can pay the note, because the note will be sold long before the Smiths default. The only real motivation for the bank, is for them to originate as many loans as possible, and sell them quickly before they default. That is how an assistant manager at McDonalds qualifies to buy 5 houses.
The Franklin Secure REIT sells the notes to Richards and Company Investment REIT, who sells them to the Wells and Frederick REIT. The consumer never knows this, because the note is still serviced by the First National Federal Bank of Florida, who takes their payments and forwards them to the owner through a shell company (more on that in a minute).
There are thousands of mortgage transfers made each day in Florida alone, and continually recording these transactions at the County Clerk's office at $10 a pop is costing banks $600 million a year. They decide that there MUST be an easier way. This is the "way" that they came up with:
So, in 1999 a Corporation called Mortgage Electronic Registrations Systems (MERS) was formed. MERS is a shell corporation that is jointly owned by the Nation's large banks, has no financial stake in the real estate mortgages, but mortgages are all registered to MERS, and the 44 employees of MERS keep track of who actually owns what Mortgage. MERS is the registered holder on over 55 million mortgages. They avoid the $10 fee, and save the banking industry billions. The problem is that they have taken our Nation's Public records system, and made it so no one knows exactly who owns what, and during all the transferring that went on, the original note is lost. This makes it impossible in many cases for a bank (any bank) to prove they own the note, but that doesn't stop them from trying.
This allows mortgage fraud on a scale that was unheard of for the thousands of years of property law that existed before MERS came along. Fake assignments, contracts, affidavits, and other evidence has been used to take homes that banks had no right to take.
The reason why I support people fighting this is that since no one knows for sure who owns what, there is a chance that settling with who you think is the owner of your mortgage may result in the REAL holder taking your home when the note IS eventually found, or may result in more than one bank claiming that you owe them money. In one case here in Lee County, Florida, a homeowner was foreclosed upon by two different banks, both of whom claimed to be the owner of the mortgage and note, and both of whom had paperwork and "evidence" to prove it. (The cases are American Home Mortgage Servicing v. Joanne Fredenburg Case 08-CA-050001, and Deutsche Bank National Trust Co. v. Joanne Fredenburg Case 08-CA-051319)
There will be more to follow on this...
Tuesday, November 16, 2010
Free house?
Probably not, but here is my story:
I bought my home in April of 2007 for about $240,000. I was intending to live there once I married my fiance. Together, we were making $110,000 a year, and we could easily afford the $1800 a month payments. The problem was that the bottom fell out a year later.
Being an employee of local government, my income is based upon an employer who derives income from local property taxes. Since property values were falling like a stone, our hours were being cut. By September of 2009, we were making $20,000 a year less than we were when we bought the house. Worse, the house was now worth less than half of what it was when we bought it. To make matters worse, my wife's student loans came due, and she lost her job a month later. Stuck with a falling paycheck and a depreciating asset, we made the decision to declare bankruptcy. During the bankruptcy, my mortgage bank provided copies of my promissory note and mortgage, stated that they were the owner of the mortgage and the note, and asked the judge for permission to begin foreclosing on the house. This is where things get interesting.
I had intended on returning the house to the bank as soon as they foreclosed on it. I figured that would take six months, at the most. They filed a foreclosure suit against me, and provided me with copies of the note and mortgage as proof to the court that they were entitled to foreclose on the house. The only problem? The note in the foreclosure was a different piece of paper than the one they gave the bankruptcy court. It turns out that my note and mortgage were sold to Fannie Mae in 2007, and my mortgage bank was just servicing the loan- that is, taking my payments and forwarding them on. Who knows which mortgage company Fannie Mae sold it to after that, no one knows. In other words, they committed perjury. (For my Republican/Conservative readers: Remember that perjury was considered to be enough of a crime to impeach President Clinton, so don't lecture me on how requiring that a mortgager not fabricate things in court is just a "hyper technical" legal loophole.)
I sued my mortgage bank, and they have agreed to settle out of court. It looks like they are going to write me a large check. The rub here is that no one knows who owns the rights to foreclose on my home. Until someone can prove that they are the one with the right to foreclose, I live here for free. We are at 15 months and counting.
I bought my home in April of 2007 for about $240,000. I was intending to live there once I married my fiance. Together, we were making $110,000 a year, and we could easily afford the $1800 a month payments. The problem was that the bottom fell out a year later.
Being an employee of local government, my income is based upon an employer who derives income from local property taxes. Since property values were falling like a stone, our hours were being cut. By September of 2009, we were making $20,000 a year less than we were when we bought the house. Worse, the house was now worth less than half of what it was when we bought it. To make matters worse, my wife's student loans came due, and she lost her job a month later. Stuck with a falling paycheck and a depreciating asset, we made the decision to declare bankruptcy. During the bankruptcy, my mortgage bank provided copies of my promissory note and mortgage, stated that they were the owner of the mortgage and the note, and asked the judge for permission to begin foreclosing on the house. This is where things get interesting.
I had intended on returning the house to the bank as soon as they foreclosed on it. I figured that would take six months, at the most. They filed a foreclosure suit against me, and provided me with copies of the note and mortgage as proof to the court that they were entitled to foreclose on the house. The only problem? The note in the foreclosure was a different piece of paper than the one they gave the bankruptcy court. It turns out that my note and mortgage were sold to Fannie Mae in 2007, and my mortgage bank was just servicing the loan- that is, taking my payments and forwarding them on. Who knows which mortgage company Fannie Mae sold it to after that, no one knows. In other words, they committed perjury. (For my Republican/Conservative readers: Remember that perjury was considered to be enough of a crime to impeach President Clinton, so don't lecture me on how requiring that a mortgager not fabricate things in court is just a "hyper technical" legal loophole.)
I sued my mortgage bank, and they have agreed to settle out of court. It looks like they are going to write me a large check. The rub here is that no one knows who owns the rights to foreclose on my home. Until someone can prove that they are the one with the right to foreclose, I live here for free. We are at 15 months and counting.
Wednesday, September 18, 2013
Continuing Shenanigans
For those just joining us:
I had a house that lost its value in the real estate crash. I declared bankruptcy, and was going to turn the house over to the bank. The bank testified in court that they were the owner of the note and the mortgage, but I caught them lying. They had sold the note and mortgage to Fannie Mae, two year earlier. I sued, and we settled out of court for almost 10 grand. They then sold the note and mortgage again, this time to Nationstar mortgage. They recorded the sale in the county clerk's office.
Then SunTrust tried to foreclose. The foreclosure was dismissed, and Nationstar claimed to not have any record of owning the mortgage.
The feds stepped in and sued the banks. I got another $4,000 in THAT lawsuit.
SunTrust continued to send me demands for payment, even though prohibited from doing so by the bankruptcy court, and the fact that they no longer own the note and mortgage. So after a few years of this, I got tired of it and sued again in May of this year (the hearing was in June). This time, the court awarded me $14,700 and instructed SunTrust to have no further contact with me.
The next day, SunTrust began sending letters and leaving notes on my door. Since that court date in June, I have gotten 2 letters, 5 notes on my door, and two phone calls.
Today, I get a letter from SunTrust, telling me that they have sold my note and mortgage, and effective October 1, 2013, I should send my payments to yet another bank. I am thinking that this is going to be my new career.
Bankruptcy is supposed to allow you to start over. It has been four years, and this bank STILL will not leave me alone.
I had a house that lost its value in the real estate crash. I declared bankruptcy, and was going to turn the house over to the bank. The bank testified in court that they were the owner of the note and the mortgage, but I caught them lying. They had sold the note and mortgage to Fannie Mae, two year earlier. I sued, and we settled out of court for almost 10 grand. They then sold the note and mortgage again, this time to Nationstar mortgage. They recorded the sale in the county clerk's office.
Then SunTrust tried to foreclose. The foreclosure was dismissed, and Nationstar claimed to not have any record of owning the mortgage.
The feds stepped in and sued the banks. I got another $4,000 in THAT lawsuit.
SunTrust continued to send me demands for payment, even though prohibited from doing so by the bankruptcy court, and the fact that they no longer own the note and mortgage. So after a few years of this, I got tired of it and sued again in May of this year (the hearing was in June). This time, the court awarded me $14,700 and instructed SunTrust to have no further contact with me.
The next day, SunTrust began sending letters and leaving notes on my door. Since that court date in June, I have gotten 2 letters, 5 notes on my door, and two phone calls.
Today, I get a letter from SunTrust, telling me that they have sold my note and mortgage, and effective October 1, 2013, I should send my payments to yet another bank. I am thinking that this is going to be my new career.
Bankruptcy is supposed to allow you to start over. It has been four years, and this bank STILL will not leave me alone.
Friday, June 26, 2015
Judges
Nearly six years ago, I found myself in some financial trouble because of the housing crash. I filed for Chapter 7 bankruptcy, and agreed to surrender the house to the mortgage holder. I figured that I would be out of there within six months. I'm still in the house, but my entire financial future is in jeopardy, because judges are ruling on what they think the law should be, rather than what it says.
It turned out that the bank who was claiming to be the mortgage holder was not, in fact, the holder of the mortgage. I asked for sanctions, and the bank settled out of court for just under 5 figures.
The bank opened a foreclosure case, which was then dismissed a year and a half later because their attorney never pursued the case, after he was caught manufacturing evidence and was subsequently disbarred. The bank was caught in their fraud by the Feds and had to pay me another $4K in a settlement. The mortgage was then sold to another bank.
That bank didn't do anything with the mortgage for over three years. In May of 2015, more than 5 years after the conclusion of my bankruptcy, a judge in Tampa came down with a ruling that says people who file bankruptcy cannot defend themselves against foreclosures, and if they do, the court will retroactively void their bankruptcy.
As soon as they heard this, the original bank bought the mortgage back, and again filed suit for foreclosure. As soon as I was served, I hired an attorney. Now the bank is threatening to get this judge to retroactively void my bankruptcy by claiming that I am stalling the process. even though it is their own fault that the house has not been foreclosed upon: they are the ones who committed fraud, their attorneys are the ones who were disbarred, and they are the ones who sat on their hands for over 5 years without pursuing the case.
The judiciary is out of control.
It turned out that the bank who was claiming to be the mortgage holder was not, in fact, the holder of the mortgage. I asked for sanctions, and the bank settled out of court for just under 5 figures.
The bank opened a foreclosure case, which was then dismissed a year and a half later because their attorney never pursued the case, after he was caught manufacturing evidence and was subsequently disbarred. The bank was caught in their fraud by the Feds and had to pay me another $4K in a settlement. The mortgage was then sold to another bank.
That bank didn't do anything with the mortgage for over three years. In May of 2015, more than 5 years after the conclusion of my bankruptcy, a judge in Tampa came down with a ruling that says people who file bankruptcy cannot defend themselves against foreclosures, and if they do, the court will retroactively void their bankruptcy.
As soon as they heard this, the original bank bought the mortgage back, and again filed suit for foreclosure. As soon as I was served, I hired an attorney. Now the bank is threatening to get this judge to retroactively void my bankruptcy by claiming that I am stalling the process. even though it is their own fault that the house has not been foreclosed upon: they are the ones who committed fraud, their attorneys are the ones who were disbarred, and they are the ones who sat on their hands for over 5 years without pursuing the case.
The judiciary is out of control.
Thursday, May 13, 2010
More Foreclosure problems to come
A report on what happened, and what is likely to happen. Amazingly, it appears like my analysis was spot on. From the report:
What Happened?
For the Second Half of the 20thCentury, Housing Was a Stable Investment…And Then Housing Prices Exploded
Prices Exploded Because the Borrowing Power of a Typical Home Purchaser More Than Tripled from 2000-2006
Americans Have Borrowed Heavily Against Their Homes Such That the Percentage of Equity Has Fallen Below 50% for the First Time
Housing Became Unaffordable in Many Areas Using a Typical 30-Year Fixed-Rate Mortgage, Which Led Many Borrowers to Take Exotic Mortgages
There Was a Dramatic Decline in Mortgage Lending Standards from 2001 through 2006
Why Did It Happen?
Among the Many Causes of The Great Housing Bubble, Two Stand Out:
1) The lenders making crazy loans didn’t care if the homeowner ended up defaulting
2) The entire system –real estate agents, appraisers, mortgage lenders, banks, Wall St. firms and rating agencies –became corrupted by the vast amounts of quick money to be made
The Enormous Amounts of Money to Be Made Corrupted Our Financial System
Deregulation of the Financial Sector Led to a Surge of Compensation, Leverage and Profits
Wall Street Firms Were Making a Fortune Securitizing Loans
Mortgages Were Pooled into RMBSs, Tranches of Which Were Pooled into CDOs
The Rating Agencies Were Making a Fortune Rating Structured Finance Products
What is coming?
The wave of resets of subprime mortgages is mostly behind us, but the mortgage crisis is shifting from defaults driven by resets, to one driven by underwater mortgages and job losses.
Fannie and Freddie prime mortgage defaults are 8 times higher in Q4 2009 than they were in Q3 2008.
Two Waves of Losses Are Behind Us… But Three Are Looming…
What Happened?
For the Second Half of the 20thCentury, Housing Was a Stable Investment…And Then Housing Prices Exploded
Prices Exploded Because the Borrowing Power of a Typical Home Purchaser More Than Tripled from 2000-2006
Americans Have Borrowed Heavily Against Their Homes Such That the Percentage of Equity Has Fallen Below 50% for the First Time
Housing Became Unaffordable in Many Areas Using a Typical 30-Year Fixed-Rate Mortgage, Which Led Many Borrowers to Take Exotic Mortgages
There Was a Dramatic Decline in Mortgage Lending Standards from 2001 through 2006
Why Did It Happen?
Among the Many Causes of The Great Housing Bubble, Two Stand Out:
1) The lenders making crazy loans didn’t care if the homeowner ended up defaulting
2) The entire system –real estate agents, appraisers, mortgage lenders, banks, Wall St. firms and rating agencies –became corrupted by the vast amounts of quick money to be made
The Enormous Amounts of Money to Be Made Corrupted Our Financial System
Deregulation of the Financial Sector Led to a Surge of Compensation, Leverage and Profits
Wall Street Firms Were Making a Fortune Securitizing Loans
Mortgages Were Pooled into RMBSs, Tranches of Which Were Pooled into CDOs
The Rating Agencies Were Making a Fortune Rating Structured Finance Products
What is coming?
The wave of resets of subprime mortgages is mostly behind us, but the mortgage crisis is shifting from defaults driven by resets, to one driven by underwater mortgages and job losses.
Fannie and Freddie prime mortgage defaults are 8 times higher in Q4 2009 than they were in Q3 2008.
Two Waves of Losses Are Behind Us… But Three Are Looming…
Thursday, December 12, 2013
Mortgage
Even though SunTrust Mortgage has paid me money for damages 4 times over the past four years (once in 2010, once in 2012, and two times this year already) for
trying to collect on a mortgage when they don't even have a mortgage on
my home, they have
continued to send people to my door, call me, send bills, and threaten
foreclosure. To date, they have directly or indirectly paid me nearly $40,000, in addition to the fact that I have lived in this house for over 4 years without making a house payment.
Why? Because they got greedy, and were a part of the nationwide banking scam that committed fraud on an unprecedented scale and was responsible for the largest transfer of wealth in human history.
SunTrust Mortgage has sent me a dozen letters and sent 7 collectors to my house since the last lawsuit concluded in July.
As a result, I filed my third lawsuit in the past year against them this morning. I can't help but wonder how many times we have go through this before they realize that they should leave me alone. I am sure that the judge is tired of them as well.
Why? Because they got greedy, and were a part of the nationwide banking scam that committed fraud on an unprecedented scale and was responsible for the largest transfer of wealth in human history.
SunTrust Mortgage has sent me a dozen letters and sent 7 collectors to my house since the last lawsuit concluded in July.
As a result, I filed my third lawsuit in the past year against them this morning. I can't help but wonder how many times we have go through this before they realize that they should leave me alone. I am sure that the judge is tired of them as well.
Saturday, October 9, 2010
Mortgage Bankers Association Strategic Default
I wrote several posts over the past few months talking about the downright fraud that the banks have perpetuated against the American Public, and claiming that the most sensible thing to do from a financial standpoint might be strategic default, depending on your own situation.
The conservative talking point on this, is that you signed a contract and are morally obligated to pay what you owe. The Mortgage Bankers Association takes this as their official position.
In 2007, the Association put a $4 million down payment on their $79 million headquarters, and borrowed the other $75 million. When the market tanked and the Mortgage Bankers Association went underwater on its mortgage, they abandoned the property and rented another place 5 blocks away. In other words, they defaulted strategically. See the story from the Today Show by clicking here. The John Stewart show does a follow up, and knocks one out of the park. So much for the morality of bankers.
Strategic default, like any financial decision, should be based on fact, rather than emotion. Claiming that paying on a depreciating asset is the moral thing to do, is the bankers playing on your emotions to squeeze more money out of you.
John Stewart does another piece, and here it is.
The conservative talking point on this, is that you signed a contract and are morally obligated to pay what you owe. The Mortgage Bankers Association takes this as their official position.
But it isn't just a matter of the borrower's personal interest, says John Courson, President and CEO of the Mortgage Bankers Association, a trade group. Defaults hurt neighborhoods by lowering property values, he says, adding: "What about the message they will send to their family and their kids and their friends?"
In 2007, the Association put a $4 million down payment on their $79 million headquarters, and borrowed the other $75 million. When the market tanked and the Mortgage Bankers Association went underwater on its mortgage, they abandoned the property and rented another place 5 blocks away. In other words, they defaulted strategically. See the story from the Today Show by clicking here. The John Stewart show does a follow up, and knocks one out of the park. So much for the morality of bankers.
Strategic default, like any financial decision, should be based on fact, rather than emotion. Claiming that paying on a depreciating asset is the moral thing to do, is the bankers playing on your emotions to squeeze more money out of you.
John Stewart does another piece, and here it is.
Monday, March 29, 2010
Florida's foreclosure crisis
Millions of Floridians are losing their homes due to foreclosure. It would be easy to just say "pay your mortgage, deadbeat" as many people have, but things are not as easy to solve as that statement would indicate. Matt Weidner, a Tampa area attorney, has a blog that spends a good deal of time and bandwidth explaining the problem:
The lenders of Florida, and the firms that bought mortgage backed securities, have traded, sold, spindled and mutilated the mortgage notes and mortgages in this state in such a fashion as to make it impossible for anyone to determine or prove who owes what to whom. When confronted in court, many of the lenders and their attorneys are manufacturing the evidence they need to take the home. They have been caught doing this so often that the Florida Supreme Court had to issue rules that apply to these foreclosures in an attempt to curb some of the lies, fraud, and manipulation that is going on.
Reading Mr Weidner's blog made me truly understand why the mortgage, insurance, and bank failures that caused our current recession occurred. The banks and mortgage lenders have been lying, cheating, and stealing their way to billions in undeserved profits by enticing lawmakers and the courts to game the system in their favor.
Now we come to the reason for this post. As the courts begin to catch on to the fraud being carried out here, the banks are beginning to lose foreclosure cases all over the state. They have responded by getting legislators to introduce a new bill ironically called Florida Consumer Protection and Homeowner Credit Rehabilitation Act. The purpose of this proposed law is to change Florida from a Judicial foreclosure state (requiring a bank to take you to court to in order to take your home, thus allowing you your day in court) to a non-judicial foreclosure state, essentially allowing people using "Operation Repo" style tactics to take your home without you ever getting your day in court.
If you think things are going to improve in our economy anytime in the near future, you are sorely mistaken.
The lenders of Florida, and the firms that bought mortgage backed securities, have traded, sold, spindled and mutilated the mortgage notes and mortgages in this state in such a fashion as to make it impossible for anyone to determine or prove who owes what to whom. When confronted in court, many of the lenders and their attorneys are manufacturing the evidence they need to take the home. They have been caught doing this so often that the Florida Supreme Court had to issue rules that apply to these foreclosures in an attempt to curb some of the lies, fraud, and manipulation that is going on.
Reading Mr Weidner's blog made me truly understand why the mortgage, insurance, and bank failures that caused our current recession occurred. The banks and mortgage lenders have been lying, cheating, and stealing their way to billions in undeserved profits by enticing lawmakers and the courts to game the system in their favor.
Now we come to the reason for this post. As the courts begin to catch on to the fraud being carried out here, the banks are beginning to lose foreclosure cases all over the state. They have responded by getting legislators to introduce a new bill ironically called Florida Consumer Protection and Homeowner Credit Rehabilitation Act. The purpose of this proposed law is to change Florida from a Judicial foreclosure state (requiring a bank to take you to court to in order to take your home, thus allowing you your day in court) to a non-judicial foreclosure state, essentially allowing people using "Operation Repo" style tactics to take your home without you ever getting your day in court.
If you think things are going to improve in our economy anytime in the near future, you are sorely mistaken.
Tuesday, April 13, 2010
Our situation summed up in one story
I am writing this post because I feel the need to show something to a Blogger friend. This post is for TOTWTYTR, who recently posted a comment to this blog:
Now this post is not a flame, I am just hoping that I can convince those of you who feel the same way that you are being deceived. Here is my proof:
This home right here, a 576 square foot home with 2 bedrooms and one bath, was used as collateral for a $103,000 loan, according to the Wall Street Journal. Less than two years ago, Integrity Funding LLC gave a $103,000 mortgage to the owner, Marvene Halterman, an unemployed woman with a long list of creditors and, by her own account, a long history of drug and alcohol abuse. At one time, Ms. Halterman says, 23 people were living in the tiny house or various ramshackle outbuildings. Ms. Halterman hasn't had a job for about 13 years, she says. She receives about $3,000 a month from welfare programs, food stamps and disability payments related to a back injury.
Now the Republican talking point states that the banks are not to blame, because they were FORCED to loan to minorities by the Democrats. Here is a picture of Ms. Halterman:
Oops. Not a minority. The motive here was not complying with some rule about minority lending, it was about money. The lending company was owned by Barry Rybicki, 37, a former loan officer who started it in 2003. Of the boom years, he says: "If you had a pulse, you were getting a loan."
When an Integrity telemarketer called Ms. Halterman in 2006, she was cash-strapped, owing $36,605 on a home-equity loan. The firm helped her get a $75,500 credit line from another lender.
Ms. Halterman used it to pay off her pickup, among other things. But soon she was struggling again.
In early 2007, she asked Integrity for help, Mr. Rybicki's records show. This time, Integrity itself provided a $103,000, 30-year mortgage. It had an adjustable rate that started at 9.25% and was capped at 15.25%, according to loan documents.
It was one of 197 loans Integrity originated in 2007, totaling almost $47 million.
At closing, on Feb. 26, 2007, Integrity collected $6,153 in underwriting, broker, loan-origination, document, application, processing, funding and flood-certification fees, mortgage documents show. A few days later, Integrity transferred the loan to Wells Fargo, earning $3,090 more, Mr. Rybicki says.
Now picture this, Integrity made a $103,000 loan, and collected $9,243 in fees, and only loaned the money to her for a few days, selling the loan before the first payment was even due. That is exactly what I said was going on, in my series of posts on the lending crisis. The payments on this loan were $881 a month, for a woman who only had an income of $3,000 a month in disability, welfare, and food stamp payments and had not held a job in over 13 years.
The home was valued at $132,000 by the appraiser, even though there is no record of similar homes in the area selling for that price. What makes this case so typical of all this subprime garbage are all the fees that were made by people who had no stake in it: The appraiser made money, then Integrity made money, and Wells Fargo made more when it was sold to HSBC, which also took a cut before dumping it on investors in mortgage backed securities that were inexplicably rated AAA by rating agencies that were somewhere between crooked and incompetent.
Actually, the piece perfectly illustrates the greedy, deceitful practices that has since brought our economy to its knees. It's a great piece of reporting.
Sure, it is easy to lay all of this at the feet of the borrower, but you would be dishonest in not pointing a few fingers at the lenders who should have known better, but were instead blinded by greed and profit. Three different lenders loaned her money on the "equity" of this nearly worthless home: The first for $36,000, then one for $75,500 to pay off the first, and then another for $103,000 to pay off the second. Each time, she got money at closing, and the lender passed the loan off on investors.
Read the linked article and realize one thing: Just because the Democrats are your enemy does not make the Republicans your friends, and just because the Democrats are lying does not mean that the Republicans are telling the truth.
Maybe I'm just drinking the conservative Kool Aid, but a close friend of mine who makes money from the financial industry, but not mortgages, explained it all to me. In addition I read up on it.
It started during the Carter Administration, but has gotten worse with each one since. Not only were banks and mortgage companies told that the government would make good on their losses, people like the excrable Barney Frank and Chris Dodd told the lending institutions they'd be labeled as racist if they didn't lend money to minorities who almost certainly couldn't pay it back.
As I said, there is plenty of blame to go around, but it's the politicians, not the banks that deserve the most blame.
Now this post is not a flame, I am just hoping that I can convince those of you who feel the same way that you are being deceived. Here is my proof:
This home right here, a 576 square foot home with 2 bedrooms and one bath, was used as collateral for a $103,000 loan, according to the Wall Street Journal. Less than two years ago, Integrity Funding LLC gave a $103,000 mortgage to the owner, Marvene Halterman, an unemployed woman with a long list of creditors and, by her own account, a long history of drug and alcohol abuse. At one time, Ms. Halterman says, 23 people were living in the tiny house or various ramshackle outbuildings. Ms. Halterman hasn't had a job for about 13 years, she says. She receives about $3,000 a month from welfare programs, food stamps and disability payments related to a back injury.
Now the Republican talking point states that the banks are not to blame, because they were FORCED to loan to minorities by the Democrats. Here is a picture of Ms. Halterman:
Oops. Not a minority. The motive here was not complying with some rule about minority lending, it was about money. The lending company was owned by Barry Rybicki, 37, a former loan officer who started it in 2003. Of the boom years, he says: "If you had a pulse, you were getting a loan."
When an Integrity telemarketer called Ms. Halterman in 2006, she was cash-strapped, owing $36,605 on a home-equity loan. The firm helped her get a $75,500 credit line from another lender.
Ms. Halterman used it to pay off her pickup, among other things. But soon she was struggling again.
In early 2007, she asked Integrity for help, Mr. Rybicki's records show. This time, Integrity itself provided a $103,000, 30-year mortgage. It had an adjustable rate that started at 9.25% and was capped at 15.25%, according to loan documents.
It was one of 197 loans Integrity originated in 2007, totaling almost $47 million.
At closing, on Feb. 26, 2007, Integrity collected $6,153 in underwriting, broker, loan-origination, document, application, processing, funding and flood-certification fees, mortgage documents show. A few days later, Integrity transferred the loan to Wells Fargo, earning $3,090 more, Mr. Rybicki says.
Now picture this, Integrity made a $103,000 loan, and collected $9,243 in fees, and only loaned the money to her for a few days, selling the loan before the first payment was even due. That is exactly what I said was going on, in my series of posts on the lending crisis. The payments on this loan were $881 a month, for a woman who only had an income of $3,000 a month in disability, welfare, and food stamp payments and had not held a job in over 13 years.
The home was valued at $132,000 by the appraiser, even though there is no record of similar homes in the area selling for that price. What makes this case so typical of all this subprime garbage are all the fees that were made by people who had no stake in it: The appraiser made money, then Integrity made money, and Wells Fargo made more when it was sold to HSBC, which also took a cut before dumping it on investors in mortgage backed securities that were inexplicably rated AAA by rating agencies that were somewhere between crooked and incompetent.
Actually, the piece perfectly illustrates the greedy, deceitful practices that has since brought our economy to its knees. It's a great piece of reporting.
Sure, it is easy to lay all of this at the feet of the borrower, but you would be dishonest in not pointing a few fingers at the lenders who should have known better, but were instead blinded by greed and profit. Three different lenders loaned her money on the "equity" of this nearly worthless home: The first for $36,000, then one for $75,500 to pay off the first, and then another for $103,000 to pay off the second. Each time, she got money at closing, and the lender passed the loan off on investors.
Read the linked article and realize one thing: Just because the Democrats are your enemy does not make the Republicans your friends, and just because the Democrats are lying does not mean that the Republicans are telling the truth.
Wednesday, January 1, 2014
Law change will cost you
As of today, the Mortgage Forgiveness Debt Relief Act expires, as it was not renewed by Congress. This is a HUGE problem for underwater homeowners. Let me explain:
Underwater homeowners often try to negotiate with their bank so that they can sell their homes for less than they owe in a short sale or have their mortgage balance reduced. But the difference between what the homeowner owes and the lower sales price approved by the bank is considered income for the homeowner and subject to tax by the Internal Revenue Service.
For example, someone with a $100,000 mortgage who is allowed to sell their house for $80,000 is supposed to pay taxes on the remaining $20,000.
But the Mortgage Forgiveness Debt Relief Act saved such homeowners from the tax burden. Last year, Congress rushed to extend the law during negotiations about the fiscal cliff but only through the end of 2013.
They did not do so this year. This means that the IRS will consider a short sale to be INCOME, even though the homeowner took a loss in selling his home for less than what he paid for it.
So let's say that you borrowed $240,000 for your home in 2007. The bank allows you to short sell it in 2014, and you get $100,000. That $140,000 difference will count as income, and if you are married and each earn around $45,000 a year, you are now considered subject to the taxes that the evil rich must pay. Your tax bill will be about $45,000 higher than it otherwise would.
Hope this doesn't keep you up at night.
Underwater homeowners often try to negotiate with their bank so that they can sell their homes for less than they owe in a short sale or have their mortgage balance reduced. But the difference between what the homeowner owes and the lower sales price approved by the bank is considered income for the homeowner and subject to tax by the Internal Revenue Service.
For example, someone with a $100,000 mortgage who is allowed to sell their house for $80,000 is supposed to pay taxes on the remaining $20,000.
But the Mortgage Forgiveness Debt Relief Act saved such homeowners from the tax burden. Last year, Congress rushed to extend the law during negotiations about the fiscal cliff but only through the end of 2013.
They did not do so this year. This means that the IRS will consider a short sale to be INCOME, even though the homeowner took a loss in selling his home for less than what he paid for it.
So let's say that you borrowed $240,000 for your home in 2007. The bank allows you to short sell it in 2014, and you get $100,000. That $140,000 difference will count as income, and if you are married and each earn around $45,000 a year, you are now considered subject to the taxes that the evil rich must pay. Your tax bill will be about $45,000 higher than it otherwise would.
Hope this doesn't keep you up at night.
Saturday, September 25, 2010
GMAC caught in fraud, has to suspend foreclosures
This year, I have done quite a few posts illustrating how much fraud took place on the part of mortgage lenders. There are many conservative bloggers who have spent a lot of bandwidth spreading the theory that "the homeowners owe money to someone, so they should just pay. It is the homeowners' fault for taking out loans they couldn't repay," all the while denying that the banks had any responsibility in the mess we are in.
Those same people will probably not want to see this:
That is just from one paperwork factory. There are hundreds of these companies out there. But hey, those deadbeat homeowners should pay. The lawyers are never wrong. The courts use this paperwork, generated in less than a minute, to justify holding a hearing under "rocket docket" rules, where each homeowner is given an average of 60 seconds to argue his case, and that even assumes that the bank isn't granted summary judgment without a hearing, based upon the forged paperwork.
The same conservatives who complain that we can't trust the courts to safeguard our right to keep and bear arms, our freedom of religion, and our right to free speech trust the court to decide who takes a home and who doesn't.
Those same people will probably not want to see this:
Some of the nation's largest mortgage companies used a single document processor who said he signed off on foreclosures without having read the paperwork - an admission that may open the door for homeowners across the country to challenge foreclosure proceedings.In other words, these document factories are producing paperwork on demand, as the lawyer handling the foreclosure needs it. Read on:
The legal predicament compelled Ally Financial, the nation's fourth-largest home lender [ed. note: Ally used to go by the name GMAC], to halt evictions of homeowners in 23 states this week. Now Ally officials say hundreds of other companies, including mortgage giants Fannie Mae and Freddie Mac, may also be affected because they use Ally to service their loans.
As head of Ally's foreclosure document processing team, 41-year-old Jeffrey Stephan was required to review cases to make sure the proceedings were legally justified and the information was accurate. He was also required to sign the documents in the presence of a notary.10,000 times a month, this man testified in a sworn affidavit that he personally reviewed the records, and determined that the person whose home was being taken was rightfully losing his home. TEN THOUSAND TIMES A MONTH. That works out to over 500 people every business day who lost homes based upon FRAUD. At 8 hours per business day, this man reviewed the paperwork for each foreclosure and signed an affidavit swearing it was accurate in an average of 55 seconds per foreclosure. It is obvious that a person cannot review all of the mortgage paperwork and testify to its accuracy in only 55 seconds. For five years. This one man's fraud and lies were used to take 600,000 homes.
In a sworn deposition, he testified that he did neither.
The reason may be the sheer volume of the documents he had to hand-sign: 10,000 a month. Stephan had been at that job for five years.
That is just from one paperwork factory. There are hundreds of these companies out there. But hey, those deadbeat homeowners should pay. The lawyers are never wrong. The courts use this paperwork, generated in less than a minute, to justify holding a hearing under "rocket docket" rules, where each homeowner is given an average of 60 seconds to argue his case, and that even assumes that the bank isn't granted summary judgment without a hearing, based upon the forged paperwork.
The same conservatives who complain that we can't trust the courts to safeguard our right to keep and bear arms, our freedom of religion, and our right to free speech trust the court to decide who takes a home and who doesn't.
Thursday, April 8, 2010
Foreclosure Ripoff, Part III
This is a continuation of Foreclosure Ripoff, Part I and Foreclosure Ripoff, Part II. You can read the rest of the story by following those links.
So the mortgage brokers, aided by the Realtors, began the fraud when they concocted information about income/assets and value of property on the individual loan applications. I know my mortgage broker fudged a few things, and at that he was more honest than most. He had a special appraiser that he used, and he told me that it was to my benefit- a too high appraisal, and my property taxes would be too high, too low and I wouldn't get the loan. Wouldn't you know, the appraisal was EXACTLY the agreed upon sale price for the house.
As a result, the mortgage brokers made thousands on each sale, billions as an industry.
Then the banks made billions when they originated the loans and then sold them to Wall Street Brokers. The asking price was usually about 102.5% of the loan amount. That means that a $200,000 loan was sold for about $205,000- usually within a few weeks of being written.
Wall street then sold them as mortgage backed securities to various funds around the world. These REITs made billions.
Then investors like myself, with their retirement money tied up in mutual funds, 401K funds, and retirement accounts that were professionally managed and heavily invested in these REITs see the value of their investments nosedive. As a result, my employer is going to cut retirement in half in the near future, meaning that I will soon have to make a decision to retire and look for another job, or face the prospect of having a much reduced retirement package in my later years. (The current math shows that if I retire now, I will make the same in retirement as if I stay another 10 years,)
The big investors got bailed out with tax money from my future, and the future of my children and grandchildren. Where is my bailout? To make it worse, the very banks and institutions that caused all of this are being paid by the government to fix the very problem that they created.
Then when it comes time to foreclose, the banks have lost the paperwork, so they simply forge and create new paperwork, and take your home.
The double whammy here is that my 401K is worth about 40% of what it was in 2007, and the triple whammy is that my home is worth about 40% of what I owe on it.
Doing the math, it is impossible for me to retire EVER under those circumstances. I will have to work until the day I die. There is only one way out-
Continued yet again
So the mortgage brokers, aided by the Realtors, began the fraud when they concocted information about income/assets and value of property on the individual loan applications. I know my mortgage broker fudged a few things, and at that he was more honest than most. He had a special appraiser that he used, and he told me that it was to my benefit- a too high appraisal, and my property taxes would be too high, too low and I wouldn't get the loan. Wouldn't you know, the appraisal was EXACTLY the agreed upon sale price for the house.
As a result, the mortgage brokers made thousands on each sale, billions as an industry.
Then the banks made billions when they originated the loans and then sold them to Wall Street Brokers. The asking price was usually about 102.5% of the loan amount. That means that a $200,000 loan was sold for about $205,000- usually within a few weeks of being written.
Wall street then sold them as mortgage backed securities to various funds around the world. These REITs made billions.
Then investors like myself, with their retirement money tied up in mutual funds, 401K funds, and retirement accounts that were professionally managed and heavily invested in these REITs see the value of their investments nosedive. As a result, my employer is going to cut retirement in half in the near future, meaning that I will soon have to make a decision to retire and look for another job, or face the prospect of having a much reduced retirement package in my later years. (The current math shows that if I retire now, I will make the same in retirement as if I stay another 10 years,)
The big investors got bailed out with tax money from my future, and the future of my children and grandchildren. Where is my bailout? To make it worse, the very banks and institutions that caused all of this are being paid by the government to fix the very problem that they created.
Then when it comes time to foreclose, the banks have lost the paperwork, so they simply forge and create new paperwork, and take your home.
The double whammy here is that my 401K is worth about 40% of what it was in 2007, and the triple whammy is that my home is worth about 40% of what I owe on it.
Doing the math, it is impossible for me to retire EVER under those circumstances. I will have to work until the day I die. There is only one way out-
Continued yet again
Monday, February 13, 2017
Mortgage scam
There are a few misconceptions in the comments to my last post, so I thought I would clear them up. See, I used to believe that the homeowners were just as much at fault as the banks. Maybe some of them are, but I have come to believe that the majority of them were defrauded by the banks. Let me explain:
I bought a house in the early part of 2007, right at the center of the housing bubble, although I didn't at the time know it was a bubble. I paid about $250,00 for a house. This was not outrageous, as I was making $85,000 a year at the time. I could easily afford the payments, so I was not being greedy, nor did I have any intent to defraud anyone. Later that year, the bubble burst. Within 2 years, my house was worth less than half of that amount.
At the same time, many other homes in the area saw declining value, meaning that the taxes paid on those homes decreased to the point where the Fire Department began closing stations for the day, rather than pay firefighters to staff them. This caused me to take a 25% cut in pay. I tried to work a deal with the bank, they refused.
Stuck with a depreciating asset and declining wages, I took the only viable option available: I filed bankruptcy. For those who are not familiar with it, Chapter 7 is not some painless process where you get to walk away from debts, no questions asked. There is a means test, where the court investigates your income. Then there are hearings where your creditors, the Trustee, and the Bankruptcy Judge try to liquidate your assets to pay your creditors. The Federally appointed Trustee gets a commission for any assets that he finds, so he is motivated. After all of this, you lose pretty much everything you own. Certainly nor painless.
It was during these hearings that my Original Mortgage holder lied and claimed that they still owned the mortgage and the note. THEY committed fraud, in that they lied IN COURT in order to make money. When I discovered that, I began doing research. I sued them, and they paid me nearly ten grand to drop the case.
Then they tried to foreclose. It turns out that they were not the owners of the note and mortgage. They tried to falsify the papers, and their lawyer was disbarred. He wound up fleeing the country with gobs of stolen cash. The foreclosure was dismissed.
This was all a scheme by the banks to get money using the government and a major fraud scheme. They lied and overvalued houses in order to make loans for FAR more than the homes were worth, to people who couldn't afford, nor qualify for them. The sold those soon to fail loans to investors, most of whom were pension plans and 401k retirement funds. hundreds of billions of dollars in the form of retirement nest eggs disappeared overnight.
The conservative talking point is that all of this was caused by a requirement for banks to lend to low income recipients. That is false. It was a bipartisan payoff where key members of both parties were paid off to change key laws and help the banks rake in profits.
With all of that, don't lecture me about moral obligations.
I bought a house in the early part of 2007, right at the center of the housing bubble, although I didn't at the time know it was a bubble. I paid about $250,00 for a house. This was not outrageous, as I was making $85,000 a year at the time. I could easily afford the payments, so I was not being greedy, nor did I have any intent to defraud anyone. Later that year, the bubble burst. Within 2 years, my house was worth less than half of that amount.
At the same time, many other homes in the area saw declining value, meaning that the taxes paid on those homes decreased to the point where the Fire Department began closing stations for the day, rather than pay firefighters to staff them. This caused me to take a 25% cut in pay. I tried to work a deal with the bank, they refused.
Stuck with a depreciating asset and declining wages, I took the only viable option available: I filed bankruptcy. For those who are not familiar with it, Chapter 7 is not some painless process where you get to walk away from debts, no questions asked. There is a means test, where the court investigates your income. Then there are hearings where your creditors, the Trustee, and the Bankruptcy Judge try to liquidate your assets to pay your creditors. The Federally appointed Trustee gets a commission for any assets that he finds, so he is motivated. After all of this, you lose pretty much everything you own. Certainly nor painless.
It was during these hearings that my Original Mortgage holder lied and claimed that they still owned the mortgage and the note. THEY committed fraud, in that they lied IN COURT in order to make money. When I discovered that, I began doing research. I sued them, and they paid me nearly ten grand to drop the case.
Then they tried to foreclose. It turns out that they were not the owners of the note and mortgage. They tried to falsify the papers, and their lawyer was disbarred. He wound up fleeing the country with gobs of stolen cash. The foreclosure was dismissed.
This was all a scheme by the banks to get money using the government and a major fraud scheme. They lied and overvalued houses in order to make loans for FAR more than the homes were worth, to people who couldn't afford, nor qualify for them. The sold those soon to fail loans to investors, most of whom were pension plans and 401k retirement funds. hundreds of billions of dollars in the form of retirement nest eggs disappeared overnight.
The conservative talking point is that all of this was caused by a requirement for banks to lend to low income recipients. That is false. It was a bipartisan payoff where key members of both parties were paid off to change key laws and help the banks rake in profits.
With all of that, don't lecture me about moral obligations.
Friday, April 16, 2010
Political and legal roots of the foreclosure mess and the recession
I have recently been on a kick of looking at the mortgage foreclosure crisis that started the whole recession going. Part 1, Part 2, and Part 3, looked at securitization, and Part 4 looked at the strategic default. I also wrote a post here about the greed of originators who loaned money to people that they knew couldn't pay, knowing that the loan would be sold off to investors long before the first payment was due, thus removing all incentive for originators to make sure people could actually pay the loans back.
This post will look at why the process was so profitable, or to be more accurate, why did this happen so recently, and what changed that made it happen. The Republicans would have you believe that the Democrats are to blame, claiming that banks were required by the Clinton administration to loan to minorities. The truth is far more sinister.
The blame has its roots in the Great Depression, and the banking act of 1933, most commonly called the Glass-Steagall Act. The act separated the Commercial Banking and Investment worlds. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors' money.
Commercial banks were accused of being too speculative in the pre-Depression era, not only because they were investing their assets, but also because they were buying new issues for resale to the public. Thus, banks became greedy, taking on huge risks in the hope of even bigger rewards. Banking itself became sloppy and objectives became blurred. Unsound loans were issued to companies in which the bank had invested, and clients would be encouraged to invest in those same stocks.
The Glass-Steagall Act prevented the banks from making these risky investments, and prevented another crash caused by greed and sloppy lending practices. At least until the Gramm Leach Bliley Act came along in 1999. This law relaxed the regulation and interinvestment restrictions between the Banking, Insurance, and Securities Companies, allowing loans to be converted into securities and sold to investors.
The bill was introduced by Phil Gram (R-Texas), Jim Leach (R-Iowa), and Thomas Bliley (R-Virginia). The bill passed with Yea votes coming from both parties- 90 to 7 with 2 abstentions in the Senate, and 362 to 57 with 15 abstentions in the House. This was a true bipartisan effort. It was signed into law by President Clinton in November of 1999.
This law allowed mergers of companies like Citi Bank (Banking) and Travellers Group (Insurance) to form Citi Group ( a failed company that needed bailout), with brands like Smith Barney, Travelers, Citibank, and Primerica.
The year before (1998) sub-prime loans were just 5% of all mortgage lending, but by the time of the mortgage crisis in 2008, the number of sub prime mortgages was near 30%.
According to the Congressional record, top Citigroup officials were allowed to review and approve drafts of the legislation before it was formally introduced. After resigning as Clinton's Treasury Secretary and while secretly in negotiations to head Citigroup, Robert Rubin helped broker the final deal to pass the bill, and he later became one of three CEOs that headed up CitiCorp, and also served as Citigroup's chairman until 2007. Robert Rubin received over $17,000,000 in compensation from Citigroup and a further $33,000,000 in stock options as of 2008. Rupin also was a part of the Enron scandal, but wascleared of all charges that he used influence with the Treasury to keep Enron's status from being downgraded so Citi would not lose money.
So there you have it- both parties sold us down the river.
This post will look at why the process was so profitable, or to be more accurate, why did this happen so recently, and what changed that made it happen. The Republicans would have you believe that the Democrats are to blame, claiming that banks were required by the Clinton administration to loan to minorities. The truth is far more sinister.
The blame has its roots in the Great Depression, and the banking act of 1933, most commonly called the Glass-Steagall Act. The act separated the Commercial Banking and Investment worlds. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. According to that reasoning, commercial banks took on too much risk with depositors' money.
Commercial banks were accused of being too speculative in the pre-Depression era, not only because they were investing their assets, but also because they were buying new issues for resale to the public. Thus, banks became greedy, taking on huge risks in the hope of even bigger rewards. Banking itself became sloppy and objectives became blurred. Unsound loans were issued to companies in which the bank had invested, and clients would be encouraged to invest in those same stocks.
The Glass-Steagall Act prevented the banks from making these risky investments, and prevented another crash caused by greed and sloppy lending practices. At least until the Gramm Leach Bliley Act came along in 1999. This law relaxed the regulation and interinvestment restrictions between the Banking, Insurance, and Securities Companies, allowing loans to be converted into securities and sold to investors.
The bill was introduced by Phil Gram (R-Texas), Jim Leach (R-Iowa), and Thomas Bliley (R-Virginia). The bill passed with Yea votes coming from both parties- 90 to 7 with 2 abstentions in the Senate, and 362 to 57 with 15 abstentions in the House. This was a true bipartisan effort. It was signed into law by President Clinton in November of 1999.
This law allowed mergers of companies like Citi Bank (Banking) and Travellers Group (Insurance) to form Citi Group ( a failed company that needed bailout), with brands like Smith Barney, Travelers, Citibank, and Primerica.
The year before (1998) sub-prime loans were just 5% of all mortgage lending, but by the time of the mortgage crisis in 2008, the number of sub prime mortgages was near 30%.
According to the Congressional record, top Citigroup officials were allowed to review and approve drafts of the legislation before it was formally introduced. After resigning as Clinton's Treasury Secretary and while secretly in negotiations to head Citigroup, Robert Rubin helped broker the final deal to pass the bill, and he later became one of three CEOs that headed up CitiCorp, and also served as Citigroup's chairman until 2007. Robert Rubin received over $17,000,000 in compensation from Citigroup and a further $33,000,000 in stock options as of 2008. Rupin also was a part of the Enron scandal, but wascleared of all charges that he used influence with the Treasury to keep Enron's status from being downgraded so Citi would not lose money.
So there you have it- both parties sold us down the river.
Friday, June 28, 2013
Shenanigans
For those that have been following this blog, you know that I bought a home in 2007 for $240,000. In 2009, I realized that I was having my financial life ruined by my possession of a depreciating asset. My home was worth less than half of what I had paid for it. I decided to cut my losses and declare bankruptcy and give the house back to the bank.
The problem is that the bank I borrowed the purchase money from, and had been making payments to, was not the owner of the note and mortgage, even though they had testified in bankruptcy court that they were. Not only that, but they continued to try and collect money from me, even though the debt had been discharged in the bankruptcy. They left notes on my door asking me to call them. I would call, and they would ask me to pay. They would mail bills to me. Since this isn't allowed after a bankruptcy, I sued them, and we settled out of court. They paid me a large sum of money to drop the case.
They tried to foreclose on the house, but could not, because they don't own the mortgage. The foreclosure was dismissed.
They were one of the banks that the government was investigating for forging legal documents. As a result of that, I was paid another $4,000 in a settlement.
They continued to badger me for money for two more years, so I sued them again two months ago. I won another $14,700 from them. The judge also ordered them to have no contact with me. The day after we went to court, I found a note on my door just after lunch, asking me to call them. The day after that, I got a letter demanding money.
I guess we are going to give them some time to violate the court's order a some more, and then we will be going back to court.
So far:
I've been living in this house for free for four years.
They have paid my property taxes for the last 4 years, even though they are not the mortgage holder, and I did not ask them to pay them.
They have paid me approximately $30,000 in settlements and sanctions.
and yet, they continue to break the law and violate the court's orders
The problem is that the bank I borrowed the purchase money from, and had been making payments to, was not the owner of the note and mortgage, even though they had testified in bankruptcy court that they were. Not only that, but they continued to try and collect money from me, even though the debt had been discharged in the bankruptcy. They left notes on my door asking me to call them. I would call, and they would ask me to pay. They would mail bills to me. Since this isn't allowed after a bankruptcy, I sued them, and we settled out of court. They paid me a large sum of money to drop the case.
They tried to foreclose on the house, but could not, because they don't own the mortgage. The foreclosure was dismissed.
They were one of the banks that the government was investigating for forging legal documents. As a result of that, I was paid another $4,000 in a settlement.
They continued to badger me for money for two more years, so I sued them again two months ago. I won another $14,700 from them. The judge also ordered them to have no contact with me. The day after we went to court, I found a note on my door just after lunch, asking me to call them. The day after that, I got a letter demanding money.
I guess we are going to give them some time to violate the court's order a some more, and then we will be going back to court.
So far:
I've been living in this house for free for four years.
They have paid my property taxes for the last 4 years, even though they are not the mortgage holder, and I did not ask them to pay them.
They have paid me approximately $30,000 in settlements and sanctions.
and yet, they continue to break the law and violate the court's orders
Saturday, October 2, 2010
Bank of America admits fraud, just not in so many words
First, it was GMAC that had to suspend foreclosures because they were caught manufacturing the paperwork needed to take people's homes.
Then, JPMorgan Chase was forced to do the same, citing problems with documentation. From the Chase article:
Now, Bank of America is following suit. These banks, their employees, and their attorneys are being caught committing perjury, yet there are still people out there who are blaming this economic meltdown on the borrowers by accusing them of borrowing money they couldn't afford to repay. They blame the Government for "requiring" banks to lend to people who couldn't pay.
They blame everyone except the banks, who took in trillions in profits by making sub-prime loans, then got a government bailout when the loans collapsed, and are now committing fraud to take people's homes.
Why aren't people being put in jail for this? Why are these lawyers not being disbarred?
Another problem being overlooked is this: When a foreclosure is found to have been awarded because of fraud, that foreclosure is void or voidable. When a lawyer, who is considered to be an officer of the court, is found to have fraudulently presented facts to court so that the court is impaired in the impartial performance of its legal task, the act, known as “fraud upon the court”, is a crime deemed so severe and fundamentally opposed to the operation of justice that it is not subject to any statute of limitation.
What does this mean for the future of Real Estate? That means that no one can issue title to a single piece of property without considering the possibility that someone can have a previous foreclosure voided, and that property returned to the previous owner. Think about the implications of this, and the effect it will have on prices.
The 10 largest mortgage lenders in the Nation control 78% of the mortgages. They are:
1 Bank of America- 26% market share - suspended foreclosures due to fraudulent documentation
2 Wells Fargo - 24% market share
3 JP Morgan Chase- 10% market share - suspended foreclosures due to fraudulent documentation
4 GMAC- 4% market share- suspended foreclosures due to fraudulent documentation
5 Citigroup - 3.5% market share
6 US Bank Home Mortgage - 3% market share
7 PHH Home mortgage - 2.5% market share
8 SunTrust - 1.75% market share
9 Provident Funding -1.65%
10 Branch Banking and Trust 1.6%
Then, JPMorgan Chase was forced to do the same, citing problems with documentation. From the Chase article:
The Associated Press said that the company has acknowledged its employees "signed some affadavits about loan documents without personally verifying the files," and said the bank has asked judges to hold off on entering judgments on the foreclosures in question until its review is complete.
Now, Bank of America is following suit. These banks, their employees, and their attorneys are being caught committing perjury, yet there are still people out there who are blaming this economic meltdown on the borrowers by accusing them of borrowing money they couldn't afford to repay. They blame the Government for "requiring" banks to lend to people who couldn't pay.
They blame everyone except the banks, who took in trillions in profits by making sub-prime loans, then got a government bailout when the loans collapsed, and are now committing fraud to take people's homes.
Why aren't people being put in jail for this? Why are these lawyers not being disbarred?
Another problem being overlooked is this: When a foreclosure is found to have been awarded because of fraud, that foreclosure is void or voidable. When a lawyer, who is considered to be an officer of the court, is found to have fraudulently presented facts to court so that the court is impaired in the impartial performance of its legal task, the act, known as “fraud upon the court”, is a crime deemed so severe and fundamentally opposed to the operation of justice that it is not subject to any statute of limitation.
What does this mean for the future of Real Estate? That means that no one can issue title to a single piece of property without considering the possibility that someone can have a previous foreclosure voided, and that property returned to the previous owner. Think about the implications of this, and the effect it will have on prices.
The 10 largest mortgage lenders in the Nation control 78% of the mortgages. They are:
1 Bank of America- 26% market share - suspended foreclosures due to fraudulent documentation
2 Wells Fargo - 24% market share
3 JP Morgan Chase- 10% market share - suspended foreclosures due to fraudulent documentation
4 GMAC- 4% market share- suspended foreclosures due to fraudulent documentation
5 Citigroup - 3.5% market share
6 US Bank Home Mortgage - 3% market share
7 PHH Home mortgage - 2.5% market share
8 SunTrust - 1.75% market share
9 Provident Funding -1.65%
10 Branch Banking and Trust 1.6%
Saturday, August 21, 2010
The AG has finally taken notice
You hear it all the time in the mortgage debate when dealing with the foreclosure mess and the plague of bogus affidavits and other legal documents: “we should not give some deadbeat a free home because they signed the mortgage notes and received the funds to buy their homes, so they must owe the money. I mean after all, you should not have borrowed money that you cannot repay!" How can those losers deny that they owe the money? That money is owed to someone; the mortgage notes are somewhere; and someone, somewhere actually and lawfully owns the notes. The real question is: Who?
Many of the people advancing these “free home” arguments are the same people that didn't scream or shout when Wall Street stopped making money and the American taxpayer came to rescue with hundreds of billions of dollars to save their collective asses. After all, it was all just a mistake by the smartest guys in the room. These were the guys who failed to take into account that a lot of these adjustable rate mortgages might not perform once they adjusted. These were also the same people who assumed that the value of residential real estate would continue to appreciate forever at an annual rate of at least 15% per year.
Who exactly suggested that Florida or any other state for that matter is a pro borrower jurisdiction? The facts are that about 95% of the Florida foreclosure cases are won and homes are lost without a fight. The foreclosure attorneys don’t even come into court to get their summary judgments in many cases, they just call them in to the judge. These lawyers are very busy and due process and proper evidence are just technicalities to be overcome.
The banks in many cases cannot prove who owes money to whom, and so their law firms have been busy manufacturing the evidence needed.
How about here, where the bank produced what was purported to be the same note twice, but with certain... irregularities:
If you can't prove it, photoshop it:
Well, the Attorney General's office of Florida has finally taken notice and is investigating the fraud that is occurring. It is about time. I wonder how many homes were illegally and fraudulently taken in the meantime?
A tip of the hat to 4closurefraud.org
Many of the people advancing these “free home” arguments are the same people that didn't scream or shout when Wall Street stopped making money and the American taxpayer came to rescue with hundreds of billions of dollars to save their collective asses. After all, it was all just a mistake by the smartest guys in the room. These were the guys who failed to take into account that a lot of these adjustable rate mortgages might not perform once they adjusted. These were also the same people who assumed that the value of residential real estate would continue to appreciate forever at an annual rate of at least 15% per year.
Who exactly suggested that Florida or any other state for that matter is a pro borrower jurisdiction? The facts are that about 95% of the Florida foreclosure cases are won and homes are lost without a fight. The foreclosure attorneys don’t even come into court to get their summary judgments in many cases, they just call them in to the judge. These lawyers are very busy and due process and proper evidence are just technicalities to be overcome.
The banks in many cases cannot prove who owes money to whom, and so their law firms have been busy manufacturing the evidence needed.
How about here, where the bank produced what was purported to be the same note twice, but with certain... irregularities:
If you can't prove it, photoshop it:
Well, the Attorney General's office of Florida has finally taken notice and is investigating the fraud that is occurring. It is about time. I wonder how many homes were illegally and fraudulently taken in the meantime?
A tip of the hat to 4closurefraud.org
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