Bank of America’s latest move to segregate the “good” mortgages from the “bad mortgages” may be their latest move to stave off all the lawsuits that are flooding into their doors.  Fraud on the alt-a mortgages, adjustable rate mortgages, and subprime loans by Countrywide has been problematic for Bank of America, who took over Countrywide after it fell apart.

But don’t be fooled, Bank of America’s latest move it to protect itself, and not to help homeowners.  Their objective is to write off as much bad debt as possible with these loans they took over, hence separating their assets.

If you’ve been given the run around from Bank of America, Wells Fargo, Citimortgage, or any other mortgage lender, and don’t know where to turn next, consider this legal option which many are turning to as an ultimate solution.

Call (831) 621-1149 for details and reference Troubled Property Solutions.

BofA Segregates Almost Half of its Mortgages Into ‘Bad Bank’
By Dawn Kopecki – Mar 8, 2011 11:43 AM PT  From: Bloomberg News

Bank of America Corp. is segregating almost half its 13.9 million mortgages into a “bad” bank comprised of its riskiest and worst-performing “legacy” loans.

Bank of America Corp. (BAC), the biggest U.S. lender by assets, is segregating almost half its 13.9 million mortgages into a “bad” bank comprised of its riskiest and worst-performing “legacy” loans, said Terry Laughlin, who is running the new unit.  “We are creating a classic good bank, bad bank structure,” Laughlin told investors at a meeting in New York today. He was promoted last month to manage the costs of resolving disputes stemming from the company’s 2008 purchase of Countrywide Financial Corp. “We’re going to get after this, we’re going to do it the right way and we’re going to put it to bed in the next 36 months,” he said.

The legacy portfolio will hold 6.7 million loans with outstanding principal balance of about $1 trillion, according to a presentation to investors today. The split leaves home loan President Barbara Desoer with about half her previous portfolio, as well as new lending going forward.  Laughlin’s portfolio will include loans that are currently 60 or more days delinquent as well as riskier types of loans the bank no longer originates, such as subprime, Alt-A, interest- only and option adjustable-rate mortgages, he said. He said the portfolios will be completely split by March 31 and that his will be liquidated over time. Of the 13.9 million loans Bank of America services, about 3.5 million are held by the company on its balance sheet. The rest are owned by other investors.  “It’s a way to get investors focus on the good,” said Paul Miller, a former examiner with the Federal Reserve Bank of Philadelphia and analyst at FBR Capital Markets in Arlington, Virginia. “It’s a way to talk about good things and ignore the bad.”

JPMorgan, Wells Fargo

Laughlin’s portfolio includes loans the company originated in addition to Countrywide mortgages. That differs from practices at JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC), whose legacy books include only loans they acquired through their respective purchases of Washington Mutual and Wachovia.  “Many of the assets that are coming over into the legacy asset-servicing portfolio are delinquent or are expected to go delinquent over the next three years,” Laughlin said. “As borrowers default, we’ll evaluate them for a loan modification.” Laughlin is also responsible for overseeing foreclosure processes as well as negotiations with investor groups that are demanding the bank buy back faulty loans.

State Probes

State and federal law enforcement agencies are pushing lenders to cut outstanding loan balances as part of a proposed settlement they hope to reach with banks over their mortgage- servicing and foreclosure practices. State attorneys general and federal agencies sent a 27-page settlement proposal last week to Bank of America, Wells Fargo, JPMorgan, Ally Financial Inc. and Citigroup Inc. (C), the five largest mortgage services, which process 59 percent of all U.S. home loans. Iowa Attorney General Tom Miller said regulators and law enforcement agencies want an agreement that leads to more loan modifications for struggling homeowners. Laughlin said regulators have reviewed the bank’s foreclosure processes and “no findings came out of those exams that basically said the foreclosure process was fundamentally flawed.” He said the bank was instituting a standardized affidavit form and providing better oversight of third-party attorneys and vendors. “Certainly there’s always room for improvement in process,” he said.

Bondholder Group

Bank of America may face “material fines” from government probes into possible irregularities in foreclosure processes, it said in its annual earnings report filed with the Securities and Exchange Commission on Feb. 25. The firm also said that a bondholder group including Pacific Investment Management Co. has almost doubled the number of mortgage deals on which it’s challenging the bank. Bank of America set aside about $3 billion late last year to settle certain demands from U.S.-controlled mortgage buyers Fannie Mae and Freddie Mac. The bank said other claims on so- called private label mortgages could cost an additional $7 billion to $10 billion.

From: http://www.bloomberg.com/news/2011-03-08/bofa-segregates-almost-half-its-mortgages-into-bad-bank-under-laughlin.html

Contact Dawn Kopecki in Washington at dkopecki@bloomberg.net

The editor responsible for this story: David Scheer at dscheer@bloomberg.net

trinidad propertiesloan modification successWashington Foreclosures

A West Virginia court found the major mortgage giant Quicken Loans Inc guilty of defrauding a homeowner and was ordered to pay $2.17 million dollars in damage plus $600,000 in legal fees.  Judges are beginning to wake up that the lenders have not necessarily been above reproach when it comes to homeowners and loans that were orginated between 2000 and 2008.  A recent conversation with a forensic loan auditors, said that most of the loans have major violations in them, where a homeowner can seek legal means to get justice.

To find out if your loan has violations in them, a Forensic Loan Audit is a smart place to start.

Many are joining a Class Action Lawsuit, to get justice in a cost-effective manor.

Once your house has been foreclosed upon it is likely too late to get legal justice, so don’t wait!

Judge Orders Quicken Loans to Pay $2.7 Million Award in West Virginia Fraud Case
By Michael Hudson | February 22, 2011, 5:57 pm
Updated: 2/23/2011, 12:43 pm | A West Virginia judge has slapped online mortgage giant Quicken Loans Inc. with more than $2.7 million in punitive damages and legal costs after finding the lender had defrauded a borrower by misleading her about her loan and using an inflated property appraisal.
Ohio County (W.Va.) Circuit Judge Arthur Recht awarded the borrower just under $2.17 million in punitive damages. He also ordered that Quicken pay her attorneys nearly $600,000 in legal fees and costs. In a ruling last year, Recht had called Quicken’s conduct “unconscionable.” James Bordas, one of the attorneys who represented the borrower, said he hoped the award would send a message to struggling homeowners that “big companies can’t just come in and cheat them.” Dan Gilbert, Quicken’s founder and chairman, told the Center for Public Integrity that the judge’s fraud finding and damages award were “irrational and incomprehensible.” “If there was any injustice here,” Gilbert said, “it’s the other way around.” Quicken, he said, was the victim in this case rather than the borrower.
Detroit-based Quicken, the nation’s largest online home lender and fifth largest retail mortgage lender, has come under fire in a variety of legal forums. A Center investigation published earlier this month detailed claims from borrowers and ex-employees who accuse the company of taking advantage of vulnerable homeowners and using bogus appraisals and other falsified information to push through bad deals.
Quicken denies the allegations.
“We always try to do the right thing,” Gilbert said in a telephone interview. “If we truly make an honest mistake, it usually doesn’t even get to court—if we discover it, we make things right.” In the West Virginia case, the judge last year found that Quicken had put 45-year-old Lourie Jefferson, a licensed practical nurse, into a complex mortgage product that would have required her to come up with a $107,000 “balloon payment” at the end of 30 years to finish paying off a loan of just under $145,000. Quicken misled Jefferson about the loan and used an appraisal that inflated the value of her home by nearly 300 percent, according to that decision. The judge followed up that ruling last week with a Feb. 17 opinion ordering Quicken to pay punitive damages and legal fees in the case.
The company said there’s no evidence that Quicken colluded with the appraiser or “did anything usual or anything inconsistent with industry practice.” In court papers, Quicken described the problems with the loan as an “isolated incident” created by “mere excess of zeal by a poorly supervised, low level, former employee.”  In a separate written statement on Tuesday, Gilbert also said the mortgage had been a good deal for Jefferson because it reduced her interest rate and monthly payments and gave her more than $40,000 in cash.
In his statement, Gilbert said the company would “be appealing this wanton injustice and is independently conducting its own investigation as well as be requesting that federal authorities also investigate the shocking and incomprehensible circumstances surrounding this scheme carried out by an unknown amount of people in West Virginia.” In the phone interview, Gilbert said he could not elaborate on the scheme against Quicken.
In another case, now being tried in federal court in Detroit, a group of former Quicken employees seeking overtime pay claim that company executives managed by bullying and intimidation, in some instances pushing them to exaggerate borrowers’ incomes on loan applications and sell overpriced deals to desperate or unwary homeowners.
The company argues that its “mortgage consultants” don’t qualify for overtime pay because they provide expert financial advice to borrowers in much the same way that stock brokers advise investors. In an effort to rebut this argument, the ex-employees’ attorneys contend that the company’s loan consultants aren’t trained to provide advice, but rather to manipulate and mislead.Michael Hudson is a staff writer at the Center for Public Integrity and author of THE MONSTER: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America – And Spawned a Global Crisis.  Full article is found at http://www.publicintegrity.org/blog/entry/2933/

Pay Option Arm Mortgage Resets will be a big problem for homeowners in 2011, since many loans will re-cast and mortgage payments will jump, making many of the ARM Mortgages unaffordable.  California was a leading state for the Pay Option Arm Mortgages – Mortage Reset Central. 

With the origination of the Option arm mortgages lender fraud was rampant.  Most of these loan have serious violations in them, including RESPA and TILA violations that homeowners can use to their advantage when dealing with the lenders and servicers.  With a forensic loan audit, the homeowner may use this to negotiate with the bank, or use as evidence in a class action lawsuit against the lender.  Our clients find the forensic loan audit a great investment to fight back against the foreclosure.

Banks repossess 1 million U.S. homes in 2010
By Associated Press
Banks repossessed more than 1 million homes in 2010, marked the highest annual tally of properties lost to foreclosure on records dating back to 2005, RealtyTrac said.  And this year is expected to be even bleaker. “2011 is going to be the peak,” said Rick Sharga, a senior vice president at foreclosure tracker RealtyTrac Inc. Lenders are poised to take back more homes this year than any other since the U.S. housing meltdown began in 2006. About 5 million borrowers are at least two months behind on their mortgages and more will miss payments as they struggle with job losses and loans worth more than their home’s value, industry analysts forecast. For December, 257,747 U.S. homes received at least one foreclosure-related notice. That was the lowest monthly total in 30 months. The number of notices fell 1.8 percent from November and 26.3 percent from December 2009, RealtyTrac said.

For 2010, one in 45 U.S. households received a foreclosure filing last year, or a record high of 2.9 million homes. That’s up 1.67 percent from 2009. The pace slowed in the final two months of 2010 as banks reviewed their foreclosure processes after allegations surfaced in September that evictions were handled improperly. Under increased scrutiny by the government, lenders temporarily halted taking actions against borrowers severely behind on their payments. However, most banks have since resumed their eviction processes, and the first quarter will likely show a rebound in foreclosure activity, Sharga said.

Foreclosures are expected to remain elevated through the year as homeowners contend with stubbornly high unemployment, tougher credit standards for refinancing and falling home values. Sharga said he expects prices to dip another 5 percent nationally before finally bottoming out. The decline will push more borrowers underwater on their mortgages. Already, about one in five homeowners with a mortgage owe more than their home is worth.

The pain likely will be the most acute in states that have already been hit hard. That includes former housing boom states Nevada, Arizona, Florida and California, along with states that are suffering most from the economic downturn, including Michigan and Illinois.

Nevada posted the highest foreclosure rate in 2010 for the fourth straight year, despite a 5 percent decline in activity from the year before. One in every 11 households received a foreclosure filing last year in the state. In December, foreclosure activity increased 18 percent from November with a 71 percent spike in bank repossessions. Arizona and California also showed sharp December increases in the number of homes banks took back, at 52 percent and 47 percent, respectively. Arizona, along with Florida, finished the year at No. 2 and No. 3 for the highest foreclosure rates. One in every 17 Arizona households got a foreclosure filing last year, while one in 18 received a notice in Florida. California, Utah, Georgia, Michigan, Idaho, Illinois and Colorado rounded out the top ten states with the highest foreclosure rates. More than half of the country’s foreclosure activity came out of five states in 2010: California, Florida, Arizona, Illinois and Michigan. Together, these states recorded almost 1.5 million households receiving a filing, despite year-over-year decreases in California, Florida and Arizona.

RealtyTrac tracks notices for defaults, scheduled home auctions and home repossessions — warnings that can lead up to a home eventually being lost to foreclosure.

According to a recent report between short sales and foreclosures in California – 43% of those sales fit in either the short sale or foreclosure category.  Short sales rose 34% in August.

The number of distress homeowners is not going away, nor is this market, any time soon.  With the recent fraud uncovered by the lender’s part, foreclosing illegally, forging documents, etc we will see a rise in forensic loan audits, class action lawsuits, and homeowners fighting back against the banks.  When banks are not playing fair, forget the loan modification since you will still be in that same contract.  Either get out of the contract with a short sale or fight back through a class action lawsuit or other remedy.  For more information on fighting back call our Oceanside office today.

Nearly one in four home sales a foreclosure

Foreclosure sales down from the first quarter, new data from RealtyTrac
by Lucy Nicholson / REUTERS

A home for sale is seen in Santa Monica, Calif. Nearly one in every four U.S. homes sold in the second quarter was a deeply discounted foreclosed house, RealtyTrac said Thursday.Reuters

NEW YORK — Nearly one in every four U.S. homes sold in the second quarter was a deeply discounted foreclosed house, putting the market on pace to work through distressed properties in about three years, RealtyTrac said.

Banks stepped up foreclosures through the summer and will take over a record 1.2 million homes this year, up from around 1 million last year and about 100,000 in 2005 before the housing bust, according to a forecast from the real estate data company.

Foreclosed homes accounted for 24 percent of all second-quarter sales, at an average price discount of more than 26 percent compared with homes not in the foreclosure process.

“This is the kind of volume of activity that we need to see for the market to heal,” RealtyTrac senior vice president Rick Sharga said in an interview.

“Our projections have been that we will get through the distressed inventory largely by the end of 2013, and these kinds of numbers are on target to get us there,” he said.

The share of foreclosure sales fell from the first quarter when nearly one in three sales was a foreclosed house sold at an average 27 percent discount, RealtyTrac said in the report released on Thursday.

“In a normal market you’re looking at foreclosure sales accounting for low single-digit percentages, probably less than 5 percent of all sales,” said Sharga. For the next few years, “it’s probably going to be somewhere between one-quarter and one-third of all sales.”

Overall housing sales likely will total 4 to 4.5 million a year during this time, he said.

It will take those years to resell homes lost by owners whose jobs or wages were cut or who took out high-risk, unaffordable mortgages. Banks will also need to sell homes from owners who walked away owing more on their mortgage than the house was worth.

Tax credit expires. Julie blogs at
 www.JulieFontaine.com as well.

Unemployment at 9.6 percent, and average home prices that are about 28 percent below 2006 peaks, are keeping the U.S. housing market from staging much of a recovery.

A burst of spring sales to buyers seeking up to $8,000 in tax credits has been followed by a sales plunge after the incentive ended on April 30.

Distressed homes, or ones in foreclosure or short sales, rose to 34 percent of all existing houses sold in August from 32 percent in July and 31 percent a year ago, the National Association of Realtors said last week.

Sales volume rose overall in the second quarter, still boosted by the tax credit.

A total 248,534 properties in some stage of foreclosure — default, scheduled auction or REO — was sold to third parties, up about 5 percent from the first quarter though down 20 percent from the second quarter 2009, according to RealtyTrac.

“Ironically, the higher the percentage of homes that are sold that are distressed properties, and the bigger the number, the quicker we’ll get through this housing downturn,” said Sharga.

Banks sold more than 151,000 homes they owned, up 3 percent from the first quarter but down 28 percent from a year ago. These REOs were 15 percent of total home sales, down from 19 percent in the first quarter and about 29 percent a year ago.

Nevada, Arizona, California, among the biggest boom-and-bust states, had the highest share of foreclosure sales from April to June. About 56 percent of all Nevada sales, 47 percent in Arizona and 43 percent in California were foreclosed homes.

Foreclosures seen slowing as document flaws emerge
Evictions expected to slow as officials shine light on foreclosure methods

By DAVID STREITFELD
The New York Times

The foreclosure machinery that has forced millions of Americans out of their homes is beginning to seize up as some lenders and their lawyers are accused of cutting corners in their pursuit of rapid home repossessions.

Evictions are expected to slow sharply, housing analysts said, as state and national law enforcement officials shine a light on questionable foreclosure methods revealed by two of the country’s biggest home lenders in the last two weeks.

Even lenders with no known problems are expected to approach defaulting homeowners more cautiously and look more aggressively for resolutions short of outright eviction.

Despite the turmoil, some economists said the breakdown could ultimately lay the groundwork for a real estate recovery.

Stricken neighborhoods across the country, for example, could benefit. One big factor undermining home sales is fear of a large number of foreclosed homes coming to the market. If the foreclosures are delayed or never happen, housing prices might find a floor.

“Maybe this is like shock therapy,” said the economist Karl E. Case. “Maybe this will actually get the lenders to the table and encourage them to work out deals that are to the benefit of everybody.”

While such a happy ending is possible, the near term is more likely to produce paralysis and confusion.

As more defaulting homeowners become aware of the lenders’ problems, they are expected to hire lawyers and challenge the proceedings against them. And if completed foreclosures were not properly done, families who bought the troubled homes could be vulnerable to claims by the former owners.

Apparently alarmed about such a possibility, one of the major title insurance companies, Old Republic National Title, has sent a bulletin to agents saying that “until further notice” it would not insure title to properties foreclosed upon by GMAC Mortgage, the country’s fourth-largest home lender and one of the two big lenders at the center of the current controversy.

GMAC declined to comment, and Old Republic representatives did not return calls.

GMAC has acknowledged legal missteps in processing mortgages, and JPMorgan Chase has acknowledged the possibility of missteps, and both have suspended all foreclosures in the 23 states where they need a court’s approval. That’s 56,000 in the case of Chase alone; GMAC declined to provide a number.

Attorneys general in half a dozen states are demanding action or opening investigations. The Treasury Department said Thursday it was asking regulators to look into “these troubling developments.”

“We’re seeing a fundamental breakdown in the system, because no one cared that much about getting things right,” said Representative Alan Grayson, a Democrat of Florida, who unsuccessfully asked the Florida Supreme Court to halt all foreclosures in that state.

Wall Street was examining the impact the disclosures could have on the lenders. Moody’s Investors Service has placed the servicer ratings of GMAC and Chase on review for possible downgrade.

The federal government has been the majority owner of GMAC since supplying $17 billion to prevent the lender’s failure during the financial crisis.

Other lenders said Thursday that their foreclosure filings, including the crucial affidavits, had been properly done.

A Citigroup spokesman said the lender required “annual training for our foreclosure employees on the proper execution of affidavits, including having personal knowledge of the information in the affidavit.”

A Wells Fargo spokeswoman said “the affidavits we sign are accurate.” A spokesman for Bank of America, Rick Simon, said, “We do not have anything to tell you at this time.”

GMAC and Chase are in trouble because, overwhelmed with foreclosures, they tried to process them as quickly and cheaply as possible, defense lawyers say. The companies say they are reviewing their procedures to take care of any violations.

The missteps stemmed from the affidavits the lenders file as they seek a quick or summary judgment in thousands of foreclosure cases. The affidavits state certain facts about the case, including the amount owed, which the signer indicates he has personal knowledge of. Without the affidavit, the lender would have to prove the facts at trial.

In depositions taken by lawyers for homeowners, executives at GMAC and Chase said they or their teams signed 10,000 or more affidavits and related documents a month. That did not give them time to review the cases.

Defense lawyers say the disclosures are symptomatic of the carelessness, if not outright fraud, that lenders have been exhibiting for years in their rush to file cases. Many necessary documents have disappeared, with defense lawyers saying the lenders often do not even have standing to foreclose.

In a number of pending cases in Florida, defense lawyers there said, GMAC has already withdrawn affidavits. The lawyers said they would try to have the cases thrown out for possible fraud, although they acknowledged that might be difficult.

GMAC said it would refile the affidavits. Chase said it had not withdrawn any affidavits.

“The way the plaintiffs’ lawyers have handled this has corrupted our legal system,” said Thomas Cox, a Maine lawyer whose deposition of a GMAC executive in June helped prompt the current disclosures. “They tried to manufacture foreclosures the way you’d manufacture cars, on an assembly line. It can’t be done that way.”

Mr. Cox is representing pro bono a rural woman who is in foreclosure on a $82,000 mortgage. The plaintiff in the case is Fannie Mae, the mortgage holding company that failed during the financial crisis and is now under government conservatorship. GMAC serviced the loan for Fannie Mae.

This week, the judge in the case set aside his summary judgment in favor of Fannie when he read Mr. Cox’s deposition of a GMAC executive, Jeffrey Stephan, who said he never reviewed the file he had signed. The case will now go to trial.

“I don’t think they are going to give up easily,” said Mr. Cox. Julie regularly posts at www.JulieFontaine.com

Under HAMP, eligible borrowers can have their monthly payments lowered to 31% of their pre-tax income as long as its more profitable for the bank to modify the loan than to foreclose. Make note of this – while you may qualify if the bank/investor can make more money now by foreclosing, then it won’t matter if you qualify or not – they will just foreclose. The federal government pays servicers an incentive to participate in the program, but these incentives may not be enough.  Also, proprietary bank modifications are outpacing HAMP adjustments by more than 2-to-1. Many troubled homeowners are falling out of the government program and 44.5% of them are receiving bank modifications. Housing counselors have been wary of direct bank modifications, mainly because there is not a lot of information about them. They caution homeowners to make sure they understand the terms of the adjustment. A Chase spokesman said HAMP is always the first program the bank considers for troubled borrowers “because it lowers the payment more than most other programs.” If they don’t qualify for HAMP, they are reviewed for a proprietary modification.

One small new condition that most banks are adding to the remodified mortgage/contract is that the homeowner will agree to waive all rights to legal remedies after the loan modification is signed.  What does that mean?  It means that if the bank has defrauded you in any way such as charging you illegal fees at closing which will cost you thousands of dollars extra over the life of the loan, you have just given up your legal rights to  to rectify that fraud.  Homeowner beware!!!

It’s a tough real estate market for everyone, particularly in San Diego.  Homeowners in San Diego are being invited by the banks to “meet with them”, but unknown to them these lenders and/or services are just stringing them along to eventually take the house.  I say be prepared for battle! 

Amid mountain of paperwork, shortcuts and forgeries mar foreclosure process
 
By Ariana Eunjung Cha and Brady Dennis
Washington Post Staff Writers
Thursday, September 23, 2010; 2:36 AM

The nation’s overburdened foreclosure system is riddled with faked documents, forged signatures and lenders who take shortcuts reviewing borrower’s files, according to court documents and interviews with attorneys, housing advocates and company officials. The problems, which are so widespread that some judges approving the foreclosures ignore them, are coming to light after Ally Financial, the country’s fourth-biggest mortgage lender, halted home evictions in 23 states this week.

During the housing boom, millions of homeowners got easy access to mortgages while providing virtually no proof of their income or background. Now, as millions of Americans are being pushed out of the homes they can no longer afford, the foreclosure process is producing far more paperwork than anyone can read and making it vulnerable to fraud.

Ally Financial is now double-checking to make sure all documents are in order after lawsuits uncovered that a single employee of the company’s GMAC mortgage unit, a 41-year-old named Jeffrey Stephan, signed off on 10,000 foreclosure papers a month without checking whether the information justified an eviction.

Many of the homeowners in fact might have been in default. Some might have been unfairly targeted. But the flawed process is creating an opening for borrowers to contest some of the more than 2 million foreclosures that have taken place since the real estate crisis began.

The company sought to play down the impact of Stephan’s actions, saying this week that what he did amounted to a “technical” error but that the documents themselves were “factually accurate.” Ally said it had no further comment Wednesday.

Forgeries

Ally wasn’t the only major lender that had a foreclosure process dependent on a few corporate bureaucrats.

Beth Ann Cottrell said in a sworn deposition in May that she signed off on thousands of foreclosures a month for JPMorgan Chase even though she did not verify the accuracy of the information.

In one instance in Palm Beach, Fla., Cottrell signed off on two documents that stated conflicting amounts of mortgage, the court testimony states. Cottrell claimed that both were signed by the borrower at closing. But the homeowner recognized that her signature had been forged, her attorney Christopher Immel said. The attorney added that such forgeries are common among the cases he’s seen. JPMorgan Chase declined to comment.

In Georgia, an employee of a document processing company, Linda Green, for years claimed to be executives of Bank of America, Wells Fargo, U.S. Bank and dozens of other lenders while signing off on tens of thousands of foreclosure affidavits. In many cases, her signature appeared to be forged by different employees.

Green worked for a foreclosure document company owned by Lender Processing Services. The company is being investigated by a U.S. attorney in Florida for allegedly using improper documentation to speed foreclosures.

Lenders have already started to withdraw foreclosures that had Green’s name on them. Green also submitted to courts documents that listed “Bogus Assignee” as the owner of a mortgage instead of the real name. In another case, she signed as the vice president of “Bad Bene,” a made-up company Michelle Kersch, a senior vice president for Lender Processing Services, said in an e-mailed statement Wednesday that the names were just “placeholders.”

“Unfortunately, on occasion, incomplete documents were inadvertently recorded before the missing information was obtained,” she said. “LPS regrets these errors and the use of this particular placeholder phrasing.”

The company declined to comment further, citing the pending criminal investigation.

A large chunk of the nation’s foreclosures are being initiated by three companies owned by the federal government: Ally, Fannie Mae and Freddie Mac. Fannie and Freddie have said they are looking at the matter but refuse to reveal the numbers of affected homeowners.

The Obama administration has repeatedly said it would try to help homeowners facing foreclosure. But its principal mortgage-relief effort is faltering. More than half of those who enrolled in the program are have now fallen out of it, the Treasury Department said Wednesday.

This week, Treasury Secretary Timothy F. Geithner and the Obama administration’s newly appointed consumer protection adviser, Elizabeth Warren, also vowed to simplify the process for getting a mortgage.

But when asked to respond to problems plaguing foreclosures at the companies controlled by the Treasury, a spokesman repeatedly declined to respond to questions, saying only that the agency does not involve itself in the companies’ day-to-day affairs.

Judges’ oversight

Some of the problems in foreclosure paperwork are being created because mortgage loans were repackaged and resold to investors so often that the physical documents become lost. It’s the job of a document processor to present and vouch for the authenticity and accuracy of these papers, but attorneys for homeowners have unearthed examples where critical records are forged.

In theory, a judge should review the files one more time. But after the crisis produced massive numbers of delinquent homeowners, judges in many cases became overwhelmed.

Some simply took at face value the documents handed over to them by the lenders – who in many cases were not checking the files, either, according to interviews with judges, attorneys and consumer groups.

In some Florida courts, for instance, many judges automatically approve a foreclosure unless a borrower can point to a specific problem. Homeowners are given five minutes for a presentation. Often, they do not bother to show up.

Arthur M. Schack, a Kings County Supreme Court judge in Brooklyn, said it’s clear those involved in the foreclosure process are taking the legal requirements too lightly. They forget, he said, that there’s a bigger picture to think about: People are losing their homes.

“There are ramifications on society and neighborhoods,” he said.

Schack has become infamous among some of the nation’s most powerful banks for rejecting foreclosure motions that come across his courtroom – about half of the hundreds of files that he has reviewed over nearly three years. He said Ally’s document-processing violations shouldn’t be dismissed lightly.

“There are procedures to be followed in order to get a foreclosure, and you either get it right or not. Either you’re pregnant or not. There’s no in-between,” he said.

But Judge Isaac Garb, a retired trial judge in Bucks County, Pa., who has heard many foreclosure cases and still oversees mortgage mediations, had a different view.

He said that because foreclosure files contain standard language, document processors such as Stephan do not need to review every page. He added that the signers are verifying only that the information in the file is “true and correct to the best of his/her knowledge, information and belief.”

Often, homeowners are using minor problems in the documents simply to stall the foreclosure process as long as possible, Garb said.

David Berenbaum, chief program officer for the nonprofit National Community Reinvestment Coalition, said companies eager to get bad loans off their books quickly have given rise to a foreclosure system that is as faulty as the excessive lending that created the problem in the first place.

“What’s happened here is that there are these foreclosure machines that don’t do due diligence and that are profiting at the expense of consumers,” he said.

Dennis reported from Doylestown, Pa. Staff researchers Julie Tate and Magda Jean-Louis contributed to this report. Julie regularly posts at her blog as well. www.JulieFontaine.com.

The government’s new solution to the foreclosure crisis – the Home Affordable Foreclosure Alternative (HAFA Program) takes effect today.

What will this do for the homeowner and real estate professionals in San Diego and Orange County? 

The HAFA program is designed to complement the HAMP Program (aka loan modification).   A homeowner needs to go through the HAMP Program and qualify.  If they qualify this is what it will do for the homeowner

1. It will allow up to $1,500 in moving expenses
2. It will give up to $3,000 to junior lien holders to release their lien/s
3. It will result in full satisfaction of the debt without signing a promissory note, provide cash at closing, or have to worry about a deficiency judgement
4. It will ensure the real estate professional helping the homeowner receives full commissions

Here’s where it may all fall apart:

1. All lenders must agree to participate in the HAFA Program.  THe HAMP Program was a dismall failure because of the “voluntary participation” clause. Why will this be any different?
2. It requires the Buyer of the house to hold it for at least 90 days.  What if someone buys it to fix it up and sell it?  This will eliminate most cash buyers in this market. 
3. The homeowner has to qualify for the program.
4. The home must be your primary residence.  If it’s a second home, or rental it doesn’t qualify.

Although it sounds good on paper, stay tuned for the results. 

 If you are tired of being shackled to your debt, and feel you are ready to sell. Call us at (619) 631-4546.   We will work with you to negotiate the debt and get your house sold so you can move on with your life.

Many of the problems with newbie loan modification companies is their lack of understanding of bank policy regarding the modificiation of the loan.  Unfamiliar with the bank policies theses loan mod companies take clients whether they are qualified or not.  The end results is homeowners in foreclosure do not get their loan mod, and lose their home to forclosure.  This has been the case with many San Diego homeowners facing foreclosur, and turning to late night TV advertisers that claim that they can modifiy your loan if you are in foreclosure. 

The new legislature goes into effect October 12, 2009.

You may be able to save the equity in your house using a forensic loan audit.  Apply today.

FORECLOSURE ACTIVITY REMAINS NEAR RECORD LEVEL IN AUGUST 2009

By RealtyTrac Staff   

 Foreclosure Activity Decreases Less Than 1 Percent From Record High in July

Activity Up 18 Percent From August 2008 Despite Year-Over-Year Drop in REOs

 IRVINE, Calif. — September 10, 2009 — RealtyTrac® released its August 2009 U.S. Foreclosure Market Report™, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 358,471 U.S. properties during the month, a decrease of less than 1 percent from the previous month but still an increase of nearly 18 percent from August 2008. The report also shows one in every 357 U.S. housing units received a foreclosure filing in August.

 “The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated,” said James J. Saccacio, chief executive officer of RealtyTrac. “After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”

 Nevada, Florida, California post top state foreclosure rates

 With one in every 62 housing units receiving a foreclosure filing in August, Nevada continued to document the nation’s highest state foreclosure rate despite an 8 percent decrease in foreclosure activity from the previous month. A total of 17,902 Nevada properties received a foreclosure filing during the month, still an increase of 53 percent from August 2008.

 Florida documented the nation’s second highest state foreclosure rate, with one in every 140 housing units receiving a foreclosure filing, and California documented the nation’s third highest state foreclosure rate, with one in every 144 housing units receiving a foreclosure filing.

 A 10 percent month-to-month decrease in foreclosure activity helped lower Arizona’s foreclosure rate from the nation’s third highest in July to fourth highest in August. One in every 150 Arizona housing units received a foreclosure filing in August — still more than twice the national average.

 Six states account for more than 60 percent of national total

 Six states accounted for 62 percent of the nation’s total foreclosure activity in August despite decreasing REOs in all six states. California REOs dropped 32 percent from the previous month, but the state continued to post the highest overall total of any state, with 92,326 properties receiving a foreclosure filing in August. California’s total was down 15 percent from the previous month and was also down 9 percent from August 2009 — the first year-over-year decrease in California foreclosure activity in RealtyTrac’s monthly reports.

 A total of 62,401 Florida properties received foreclosure filings in August, the nation’s second highest state total and an increase of more than 10 percent from the previous month despite a 5 percent decrease in REO filings. Initial default notices in Florida increased 12 percent from the previous month, and scheduled auctions increased 13 percent from the previous month.

 A new law in Michigan requiring lenders to file a separate public notice of default before scheduling a foreclosure auction boosted overall foreclosure activity numbers in the state for August. A total of 9,789 of the new default notices were reported in August, bringing the total number of Michigan properties receiving foreclosure filings to 19,359 for the month — a 134 percent spike from the previous month and third highest among the states. Michigan’s foreclosure rate leapfrogged from 19th highest in July to fifth highest in August.

 With 17,902 properties receiving foreclosure filings in August, Nevada posted the nation’s fourth highest total despite a 24 percent decrease in REO filings from the previous month, and with 17,807 properties receiving foreclosure filings in August, Arizona posted the nation’s fifth highest total despite an 11 percent decrease in REO filings from the previous month.

 Illinois REO filings decreased 15 percent from the previous month, but the state’s total of 13,078 properties receiving foreclosure filings was still sixth highest among all the states in August.

 Other states with totals among the 10 highest in the country were Georgia (11,947), Ohio (11,368), Texas (11,261) and New Jersey (8,316).

 Three states dominate top 10 metro foreclosure rates

 Foreclosure filings were reported on 14,940 Las Vegas properties in August, one in every 53 housing units — more than 6.7 times the national average and the highest foreclosure rate among metro areas with a population of at least 200,000. The city’s foreclosure activity was down 11 percent from the previous month but still up 48 percent from August 2008.

 With one in every 86 housing units receiving a foreclosure filing in August, the Reno-Sparks metro area joined Las Vegas in the top 10, posting the seventh highest metro foreclosure rate.

 Six California metro areas documented foreclosure rates among the top 10 in August. Stockton posted the nation’s second highest metro foreclosure rate — one in every 74 housing units received a foreclosure filing — followed by Merced at No. 3 (one in 78), Riverside-San Bernardino-Ontario at No. 4 (one in 80), Vallejo-Fairfield at No. 5 (one in 82), Modesto at No. 6 (one in 84), and Bakersfield at No. 10 (one in 94).

 Two Florida metro areas documented foreclosure rates among the top 10: Orlando-Kissimmee at No. 8 with one in every 87 housing units receiving a foreclosure filing, and Cape Coral-Fort Myers at No. 9 with one in every 88 housing units receiving a foreclosure filing.