Class Action to Move Forward and Judges Give the Thumbs Up

For those that have been following the building of the Class Action Lawsuit against the Lenders below is the latest update!  If you still own your property, have been given the run around from the bank (who hasn’t!), and had got a restidential mortgage loan between 2000 and 2010, then this may be the remedy you are looking for. 

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

•  60 Minutes has provided us with a informational documentary on the lender fraud.
• Inside Job Film Documentary – Academy Award Winning Film – the Film Makers Wonders Why No Bank Executive Has Yet to Go to Jail
• Foreclosure Fraud – A website dedicated to uncovering the dirty laundry of the lenders

After nearly two years of building evidence, and amassing the facts for the template for the cases the attorneys will be pursuing, the final template is complete. The first test file based on that template has been submitted to the court as an individual case.

This case has now been approved by the Federal Court for RICO FILING. What that means is that the court has reviewed the filing of the case and has found that it meets the test for bringing RICO FRAUD CHARGES against the defendants.

This is a complex and extensive test of the evidence which must meet the court standards to comply with Federal Rules of Evidence to be considered a valid RICO case. This is now completed.

Additionally, because of the massive amounts of evidence contained in the case, counsel has also expanded the case to include CRIMINAL CHARGES. This also has been accepted by the court.

Many attorneys will tell you that it is not possible to file criminal charges in a civil case; but this is not true.

Our message to you today is that our cases moving forward WILL contain RICO and CRIMINAL CHARGES. Additionally, we are telling you that the template upon which all the group cases will be based has been completed and the first case built on that template HAS BEEN SUCCESSFULLY FILED with BOTH RICO and CRIMINAL CHARGES.

That case is now filed and approved for motion forward in the Federal Court.

What does this mean to you?

First - it means the attorneys have accomplished the first major step in our process of bringing these issues to court in a Federal jurisdiction to achieve proper legal remedy for all of us.

Second – it means it’s now time to get off the fence and make a decision on whether you are going to participate or be left behind.  This is no ordinary Class Action – you assist in building further evidence and you will be receiving more of the benefits from the outcome of a successful case (unheard of for Class Actions).

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

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

We’ve had a stenography masquerading as reporting on the results of the recent Foreclosure Task Force “review” of servicer practices. After looking at 2800 severely delinquent loans, it found only some operational shortcomings and no unjustified foreclosures. Given that all that this cross agency effort did was to have tea and cookies with the servicers while reviewing their documents, as opposed to doing any validation of their data, this means the “exam” was a garbage in, garbage out exercise.

Similarly, today the Fed made the similarly ludicrous statement that there were “no wrongful foreclosures” based on a review of a mere 500 loan files. Given that there are 14 major servicers, that means it looked at 36 files on average per servicer. Heck of a job, Brownie!

Aside from the fact that there have been numerous reports of colossal errors that should be impossible in a system with any integrity (homes with no mortgages or where the mortgage had been paid off, where borrowers had been given letters that they had been approved for permanent HAMP mods being foreclosed upon), there are also numerous accounts of servicer-driven foreclosures. As Karl Denninger noted:

We have myriad reports of homeowners who are told to intentionally default by servicers, a clear act of bad faith. We have documented instances of banks breaking into homes that are occupied, an apparent serious state felony. We have documented instances of banks playing games with forced-placed insurance, escrow accounts and similar acts leading to foreclosure.

But the most telling contradiction of the banking regulators’ “nothing to see here” stance is the Administration’s aggressive pursuit of servicing abuses against active duty soldiers. When a Congressional hearing focused on how JP Morgan illegally foreclosed on soldiers, the bank went into overdrive to do damage control. As David Dayen reported:

The big bank went out of their way to fix the problem yesterday, knowing that abusing service members could get you in big trouble in this country, and lead to further scrutiny of their abusive practices. Calling these violations a “painful aberration” on a track record of honoring military families, JPM CEO Jamie Dimon announced:

• New pricing. Under the Servicemembers Civil Relief Act, servicers are required to cap mortgage interest rates for active duty personnel at 6%. JPM will lower that cap to 4%.

• Military modification program. JPM will go beyond HAMP requirements for all personnel who served on active duty going back to 9/11. If the borrower has a second lien with them, they will reduce the interest rate on it to 1%.

• No foreclosures. JPM will not foreclose on any active duty military personnel overseas. Anyone who was wrongly foreclosed upon previously will not only get their home back, but JPM will forgive all remaining home debt. They promise to do that in the future with any other wrongful foreclosure of a military family.

• Donations. JPM will donate 1,000 homes to military and veterans, through a non-profit partner, over the next five years.

• Jobs. They will commit to hiring 100,000 military and veterans over the next ten years. They will also offer a Technology Education certificate for veterans to take free to get technology training for future careers.

• Advisory Council. They’ll form an Advisory Council to determine other ways to help military families. They’re also opening a bunch of Homeownership Centers near military bases to assist families.

Needless to say, this is a PR gambit to the nth degree. But look how incredibly scared JPM is that anyone will look past the abuse of military families. They are going out of their way to burnish and repair their public image on this one, and the goal is to whitewash the fact that they were merely engaging in standard servicer practices of abusing homeowners and illegally foreclosing.

To underscore Dayen’s point, servicers are factories with highly routinized, bad procedures. If you see one abuse reported more than a time or two in the media, like force placed insurance or fee pyramiding, it is not a mistake. It’s policy.

Not surprisingly, JP Morgan appears to have company in the “grinding up servicemen for fun and profit” school of banking. And while the Administration has bent over backwards to protect servicers by disputing any suggestion that they’ve made unwarranted foreclosures, they’ve been fast to saddle up the Department of Justice to investigate over the very same issue,20 probably impermissible foreclosures at Saxon, a servicer owned by Morgan Stanley, because it involved active duty personnel. From the New York Times:

The Justice Department is investigating allegations that a mortgage subsidiary of Morgan Stanley foreclosed on almost two dozen military families from 2006 to 2008 in violation of a longstanding law aimed at preventing such action.

A department spokeswoman confirmed on Friday that the Morgan Stanley unit, Saxon Mortgage Services, is one of several mortgage and lending companies being investigated by its civil rights division. The inquiry is focused on possible violations of a federal law that bars lenders from foreclosing on active-duty service members without a court hearing.

Mark Lake, a Morgan Stanley spokesman, declined on Friday to comment on the investigation. However, in the fine print of a recent regulatory filing, Morgan Stanley disclosed that it was “responding to subpoenas and requests for information” from various government and regulatory agencies concerning, among other issues, its “compliance with the Servicemembers Civil Relief Act,” the law that governs the actions creditors can take against service members on active duty.

This two-tier approach is intriguing: aggressive pursuit of abuses when members of the armed forces are the victims, flat-out denials for the rest of us. Dave Dayen thinks it’s politics, but I wonder if something deeper is at work. The Pentagon has been aggressive in blocking other forms of exploitation of soldiers, such as locating payday lenders near military bases (the Pentagon sought and won interest rate ceiling. My 2007 post on that tussle was “The Pentagon as Financial Regulator.” Maybe that’s an idea we need to entertain more seriously. It seems to be the only body with the authority and firepower to take on the mortgage industrial complex.

For millions of Americans that had Countrywide Loans, now serviced by Bank of America, and realized the loans they were given are – to put it nicely – not the best loans in the world, or to put it not so nicely – a piece of crap, at least we can rest assured that Bank of America is on the defense.  Bank of America is being sued left and right after they took over Countrywide.  Fraud is everywhere in these loans, and most Americans that have Countrywide loans know that is a fact.   The article below provides a good summary why we need WikiLeaks, and why banks, including Bank of America, Citimortgage, Wells Fargo, JP Morgan Chase, and other lenders are on the defense.

The question is what can the average American do about all this fraud against homeowners like us?  If you have a lot of money  you can file your own lawsuit against your lender, but just one person against these large powerful banks is a huge uphill battle.  Or you can join the masses and be part of a Class Action Lawsuit.  Watch the video for details.

The Voice of the White House
TBR News February 20, 2011

Washington, D.C., February 20, 2011: “The most hated person today in Washington is Julian Assange, head of the WikiLeaks. An overall view of the Bank of America material now held by WikiLeaks reveals that starting in 2008, the Bank of America acquired Countrywide Mortgage, a very aggressive mortgage company that specialized in creating fraudulent loans to individuals that were unable to make continuing payments on their mortgages. Countrywide then sold these fraudulent mortgages to larger banking houses like Bank of America, JP Morgan Chase, Goldman Sachs and others.  The results of this takeover of Countrywide? Bank of America now has over 1.3 mortgage holders in foreclosure.  Bank of America was subsequently sued by California, Illinois and eight other states over its predatory lending policies. The bank was forced to produce a settlement of over $8.4 billion in loan relief plans for those victims holding Countrywide mortgages.

• In June of 2010, Bank of America had to pay out $108 million because of a suit by the Federal Trade Commission (FTC) for “having extracted excessive fees” from their borrowers facing foreclosure.
• In August of 2010, Bank of America was forced to pay out $600 million to settle shareholder lawsuits which claimed that Bank of America’s Countrywide Mortgage had “concealed the riskiness” of its lending standards.
• In June of 2010, the State of Illinois once more had to sue the Bank of America for “racial discrimination” in its lending practices.

The WikiLeaks documentation shows thousands of in-house emails circulating among top Bank of American personnel showing with shocking clarity that the bank was not only fully cognizant of the illegality of their actions but were, in fact, continuing these actions because of the assurance of protection by “senior American legislators and officials.”

Additional material in the WikiLeaks found concerns the brokerage house of Merrill Lynch which Bank of America acquired for $50 billion in January of 2009. The aforesaid “senior American legislators and officials: quickly loaned the Bank of America $20 billion in loans to facilitate this purchase. Subsequently, it was revealed that Merrill Lynch had lost over $16 billion at the end of 2008 but had paid out over $4 billion in bonuses to all the top Merrill Lynch personnel. In sum, the Merrill Lynch people, secure in the knowledge of a connived Federal bailout, took the funds for personal gain. The WikiLeaks documents clearly show all of this in detail, complete with boasting emails on the part of the recipients of the monies.

As another aspect of this enormous financial scandal furthered purely for gain, corporate and personal, the Bank of America has been the instigator of the so-called “robo-signing” scanda.l As a single example of this illegal conduct, in February of 2010, a Bank of American employee testified on deposition that they had personally signed over 8,000 official foreclosure documents without ever reading any of them. This is a clearcut violation of the law but there are so many such examples of this, not limited to the Bank of America alone, that there is not sufficient space to list them all. The WikiLeaks documents clearly show that these illegal actions were fully known to senior Bank of America officials and that extensive cover-ups were ordered from the very top levels of that bank.

WikiLeaks documentation shows clearly that the “senior American legislators and officials.” Who connived with the Bank of America include the leadership of the Federal Reserve, top Congressional leaders (mostly Republican) and even senior members of the White House staff, both in the Bush and Obama administrations. With this pending dam collapse release to the public, it is no wonder that the government itself, the officials of the Bank of America and the U.S. Chamber of Commerce, the most powerful, arch-conservative business cabal would all join forces in an attempt to discredit or permanently silence Assange and his organization.

The front organization, HBGary Federal, a specialist in computer manipulations, was hired by the U.S. Chamber of Commerce and the Bank of America to attempt to plant false information with WikiLeaks, double-heading frantic government attempts to get Assange physically into their hands. When WiliLeaks struck back and, in turn, infiltrated the government and private sector’s attempts to infiltrate them, it was discovered that HBGary Federal was involved with Stuxtnet, a very sophisticated computer virus developed by Israeli and American experts and designed to infiltrate and destroy computer systems deemed “unacceptable” to Washington.

Bank of America officials have been warning Washington that if they crash, the damage to the American ecnomoy wouild be catastrophic because of their size and pervasiveness and this message has resonated very clearly in official circles, prompting frantic but clumsy attacks on Assdange and his organization.”

Still for many, banks are unwilling to help homeowners, and the only way to force their hands is to take legal action.  For more details on the fraud, and what you can do about it click here watch these videos:  Lender Fraud.

Ohio Judges Halt Foreclosure Proceedings In Fraud Search
The Huffington Post Yepoka Yeebo First Posted: 01/31/11 11:09 AM Updated: 02/ 1/11 03:52 PM

Three Ohio judges are forcing lawyers to double-check foreclosure documents.  Judges in Franklin County, Ohio, are making lawyers verify documents for residential foreclosures, and asking lawyers to sign certifications that verify that clients said the documents were accurate. The Columbus Dispatch reports:

The judges told the lawyers that they must “personally certify the authenticity and accuracy of all documents” in support of a residential-foreclosure filing. If a lawyer doesn’t comply, the judge will not grant a motion for default or summary judgment, but will instead schedule the case for trial. Lawyers are arguing that the order forces them to reveal communications protected by attorney-client privilege, and are fighting the order, the paper said. “Before we sign off on foreclosures, we want to make sure we are diligent in confirming the accuracy of those filings,” judge Kimberly Cocroft told the Dispatch. “It’s a life-changing event.”

The move is a response to families being fraudulently foreclosed on, after it was revealed that mortgage providers and law firms failed to follow procedures. Bank employees in mortgage departments inundated with foreclosures say they signed foreclosure affidavits without reviewing the cases, or in some cases, without even looking at the documents — earning the label “robo-signers.”

In October, regulators from all 50 states launched an investigation into possibly deceptive foreclosure practices that may have illegally evicted families from their homes. The investigation has found families who were not in default foreclosed on, and lenders foreclosing on loans they did not hold.

Lawyers in New York State have been required to check that foreclosure documents are accurate since October. In Nevada, judges are blocking foreclosures by Bank of America-owned companies after complaints that homes are being fraudulently foreclosed on.

If you have been given the runaround by your lender there is a solution.

Get Details by Calling (831) 621-1149

and reference Troubled Property Solutions. 

The notaries, who apparently signed the foreclosure documents, are now invoking their 5th Ammendment Right against self-incrimination, but aren’t facing prosecution (yet!).   The incriminating evidence that banks have forged signatures, amongst other things is coming out in the open, and banks are on the defense.

…and they should be.  The evidence is there. 

What’s next for homeowners?  Most are now looking into legal means of stopping the banks.  There is no other way, since servicers and lenders are blatently violating state and federal law.   To defend yourself against the bank, many are choosing to join in a Class Action Lawsuit. Call (831) 621-1149 for details and reference Troubled Property Solutions.

By Abigail Field
The Daily Finance

Among the many legal problems now being discovered with the foreclosure documents that banks have been using are false notarizations. The most typical variety of this problem occurs when a notary certifies that the person whose signature appears on a document really did sign it, even though the notary didn’t witness the signing. 

While such false notarizing is criminal, I’ve not yet heard of any notaries being charged. However, in Maryland, Steve Lash of The Daily Record reports that 18 current and former notaries have invoked their Fifth Amendment right against self-incrimination in a foreclosure case.

The notaries were brought before the court in proceedings involving a lawyer who didn’t actually sign numerous foreclosure documents that were nonetheless notarized saying he did. The judge excused the notaries from the proceedings after they took the Fifth, and apparently, they aren’t facing prosecution.

Title Issues Trip Up Innocent Buyers

Nonetheless, the ramifications of those false certifications are significant. Because the lawyer — Thomas P. Dore — didn’t sign the documents as certified, the judge has dismissed five foreclosures, although the banks can refile. In addition, the judge is considering what to do in 15 other cases where Dore isn’t sure whether or not he signed the documents, and the judge is also weighing what to do about 12 Dore foreclosures that were completed in which the properties have since been sold. This is a striking situation when you consider the judge’s options. Might he rescind the sales? Void the foreclosures, but let the sales stand?

For Full Article DailyFinance: http://srph.it/ihdnyK

This time from Life Insurance Policies  in which it is alleged that Countrywide sold a lot of bogus paper to pretty much every large insurance company in the world.  Whereas Countrywide told these investors that they were selling good paper, but in effect it was a load of crap.   Remember that Countrywide bundled the loans when they were originated (or sometimes before as the forensic loan audits are revealing) – then they sold them off as mortgage backed securities to investors on Wall Street.  The paper was ranked – apparently not correctly since BofA is getting sued left and right on all sides.  The article may be a bit technical for most, but the bottom line is that Countrywide, Bank of America, and a suite of other lenders and servicers are facing lawsuits for fraud, misrepresentation, etc on all sides.  Most likely if you have a Countrywide or Bank of America loan your loan is in one of these mortgage backed securities. 

 Previous articles that we wrote tell that these type of loans techinically should be almost impossible to foreclose on.  But foreclosures are happening anyways. If you are trying to save your home, or if you have a bad loan you don’t have to sit back and let the banks win.  You have options.

1. Start with a forensic loan audit to know what’s really going on with your loan.

2. Then take action.  A Class Action Lawsuit is the most cost effective, and safe way to move forward legally. Banks have deep pockets, and so joining together with other homeowners is a smart decision.  Call (831) 621-1149 and reference Troubled Property Solutions for details.

Here’s their allegations – the basis of the lawsuit:
Article Posted 2011-01-24 18:41
Market Tickler
by Karl Denninger

Countrywide Failed To Ensure That Title To The Underlying Loans Was Effectively Transferred

The rules for these transfers are governed by the law of the state where the property is located, by the terms of the pooling and servicing agreement (“PSA”) for each securitization, and by the law governing the issuing trust (with respect to matters of trust law). Generally, state laws and the PSAs require the promissory note and security instrument to be transferred by indorsement, in the same way that a check can be transferred by indorsement, or by sale. In addition, state laws generally require that the trustee have physical possession of the original, manually signed note in order for the loan to be enforceable by the trustee against the borrower in case of default.

In order to preserve the bankruptcy-remote status of the issuing trusts in RMBS transactions, the notes and security instruments are generally not transferred directly from the mortgage loan originator to the trust. Rather, the notes and security instruments are generally initially transferred from the originator (e.g., Countrywide Home) to the depositor (e.g., CWALT), either directly or via one or more special-purpose entities established by Countrywide Financial. After this initial transfer to the depositor, the depositor transfers the notes and security interests to the issuing trust for the particular securitization. Each of these transfers must be valid under applicable state law in order for the trust to have good title to the mortgage loans.

In addition, the PSA generally requires the transfers of the mortgage loans to the trust to be completed within a strict time limit after formation of the trust in order to ensure that the trust qualifies as a tax-free real estate mortgage investment conduit (“REMIC”).

 The applicable state trust law generally requires strict compliance with the trust documents, including the PSA, so that failure to comply strictly with the timeliness, indorsement, physical delivery, and other requirements of the PSA with respect to the transfers of the notes and security instruments means that the transfers would be void and the trust would not havegood title to the mortgage loans.

The Offering Documents for each offering of the Certificates represented in substance that the issuing trust for that offering had obtained good title to the mortgage loans comprising the pool for the offering. In reality, however, Countrywide routinely failed to comply with the requirements of applicable state laws and the PSAs for valid transfers of the notes and security instruments to the issuing trusts. In Kemp .v. Countrywide Home Loans, Inc., Bkrtcy. No. 08-18700 (D.N.J.), Countrywide sought to prove that the Bank of New York, as trustee for an RMBS issuing trust that purportedly held Mr. Kemp’s mortgage, was entitled to enforce the mortgage. Countrywide presented testimony by Linda DeMartini, who had been employed by Countrywide Servicing for almost ten years as of August 2009 and was then a supervisor and operational team leader for the Litigation Management Department of Countrywide Servicing. Ms. DeMartini testified that, in her extensive career in the mortgage loan servicing business of Countrywide, “I had to know about everything . . . .” She testified that Countrywide Home originated Kemp’s loan in 2006 and transferred it to the Bank of New York as trustee for the issuing trust, but that Countrywide Servicing retained the original note in its own possession and never delivered it to the Bank of New York because Countrywide Servicing was the servicer for the loan.

For the full article and a copy of the lawsuit go to: http://market-ticker.org/akcs-www?post=178151

Lawsuits are being filed all over the country by homeowners, and now investors who own the mortgage backed securities, against the major lending institutions based upon claims of wrongdoings by the banks and their servicers.   These banks can no longer just ignore homeowner complaints, as many are taking to the court system for fraud, misrepresentation, and violations of federal law. 

Mortgage fraud is rampant.  Homeowners across the nation are turning toward legal action in defending themselves against the bank. Many are joining a Class Action Lawsuit. Call (831) 621-1149 for details and reference Troubled Property Solutions. 

JPMorgan’s EMC Mortgage Sued Over Home Loan Documents
By Sophia Pearson – Jan 18, 2011 11:30 AM PT
Bloomberg Press

JPMorgan Chase & Co.’s EMC Mortgage, facing homeowner lawsuits over foreclosures, was sued by the trustee of a mortgage portfolio for refusing to turn over documents detailing the quality of loans bought by the trust.  Wells Fargo & Co., the trustee, is seeking access to files for more than 2,000 underlying mortgages in the Bear Stearns Mortgage Funding Trust 2007-AR2, according to the complaint filed January 18, 2011 in Delaware Chancery Court in Wilmington.  “The trustee has repeatedly requested that EMC provide access to the subject documents,” Wells Fargo said in the complaint. “EMC has played proverbial ‘rope a dope’ and otherwise continued to drag its feet, and has produced nothing.”

Claims of wrongdoing by banks and loan servicers triggered a 50-state investigation last year into whether hundreds of thousands of foreclosures were properly documented as the housing market collapsed. Lending practices have also pitted mortgage-bond investors against banks over misrepresentations such as overstatements of borrowers’ income and inflated appraisals.  Christine Holevas, a spokeswoman for New York-based JPMorgan, declined to comment.

Wells Fargo said it needs access to the documents to answer “serious” questions raised by investors in the trust about whether EMC breached representations and warranties regarding the quality of option-adjustable rate mortgage loans the trust bought.

Investor Questions

An investor in the trust, who owns 42 percent of the outstanding face amount of the portfolio’s certificates, questioned the condition of underlying loans, Wells Fargo said in the complaint, citing an August letter it received from David Grais, the investor’s attorney.  Grais, a partner at New York-based Grais & Ellsworth LLP, represents the federal Home Loan Banks of Seattle and San Francisco and Charles Schwab Corp. in litigation seeking to force banks including Bank of America Corp. and JPMorgan to repurchase mortgage-backed securities because they allegedly misrepresented the quality of the loans.

In a September interview, Grais said he was also working with two hedge funds that hadn’t filed suits and had contacted trustees with similar complaints. He wouldn’t name the funds.  In the Aug. 31, 2010, letter to San Francisco-based Wells Fargo, Grais said he had investigated 1,317 of the loans held by the trust and determined that EMC appeared to have violated its representations with respect to 938 loans, according to the complaint.  Grais didn’t immediately return a phone call today seeking comment on the complaint.

400 Loans

Wells Fargo began requesting the documents in January last year and reached an agreement with EMC in December on access to files for 400 loans. EMC had until Jan. 12 to produce documents on the first 100 loans, according to the complaint. EMC failed to produce the documents “culminating more than a year of good-faith negotiations and misplaced patience by the trustee in a futile attempt to avoid litigation,” Wells Fargo said in the complaint. The case is Bear Stearns Mortgage Funding Trust 2007-AR2 by Wells Fargo Bank N.A. as Trustee v. EMC Mortgage Corp., CA6132, Delaware Chancery Court (Wilmington).

To contact the reporter on this story: Sophia Pearson in Wilmington, Delaware, at spearson3@bloomberg.net.

The Massachusetts Supreme Court recently ruled against U.S. Bank and Wells Fargo and recinded two foreclosures after paperwork indicated they had no right to foreclose.  The securitization of the note was and will be the biggest problem for banks to foreclose on homes.  Millions of loans were sold as mortgage back securities into Wall Street – sometimes even before the loan was taken out!  In the case below, even if the banks had produced a trust agreement or pooling and servicing agreement—proof that a mortgage pool was sold and assigned to the trust—they would still have to provide records detailed enough to show that the actual mortgage in question is contained in that mortgage pool.  And that is not happening.

What does that mean for all homeowners?  Each state is different, but this could set the standard for all future forclosures.

• How can you find out if your loan has been securitized?  A Forensic Loan Audit - that includes a Sercuritization Audit – will give you those details.
• What can you do with this information?  The homeowner has choices.  Participating in a Class Action Lawsuit is one smart choice a homeowner can make. Class Action Lawsuit video.

Want your Situation to Be Like these  Two Cases Cited Below?  Get Started Today!

Why the Massachusetts Supreme Court Voided Two Foreclosures and What It Could Mean for Banks

by Marian Wang ProPublica, Jan. 20, 2011

When Massachusetts’ highest court ruled against U.S. Bank and Wells Fargo earlier this month and invalidated two foreclosures, the decision was hailed by some as an important precedent for courts seeking to resolve foreclosure disputes.

While the decision’s impact isn’t entirely clear, even Wall Street analysts who downplayed its applicability acknowledged its troubling implications for banks trying to foreclose with missing or insufficient documentation for the mortgage loans securitized and sold to investors.

The Massachusetts court, in its decision against the banks, ruled that in two very similar foreclosure cases, neither bank had been able to prove that it had the right to foreclose on the homeowner due to an incomplete chain of title. In other words, the banks couldn’t prove they had legal standing to foreclose because the transfers of ownership weren’t properly documented each time the mortgage changed hands—or was assigned to a new party—during the securitization process.

Here’s a handy chart from the ruling, showing how the chain of title should have been documented with the Ibanez mortgage:

U.S. Bank, as the chart shows, wasn’t the mortgage originator or the servicer in this case—it was the trustee of the mortgage-backed security (responsible for distributing funds to investors in the security). The Financial Times’ Alphaville blog explains how U.S.Bank’s documentation fell short:

One of the issues is the so-called “mortgage in blank” procedure. In the Ibanez case, for instance, the last mortgage assignment with a full set of names on it is from Rose Mortgage to Option One. After that, the mortgage is assigned in blank throughout the securitisation. There’s no assignment with “US Bank” on it anywhere, though the bank did try to go back and finish off the assignment after it moved to foreclose.

Banks, in order to smooth over the problem of missing assignments, will often do “confirmatory assignments” after a foreclosure has been initiated. It’s standard practice in Massachusetts, FT Alphaville reported.

But these “confirmatory assignments” only work when “there is a prior valid assignment to confirm,” bankruptcy lawyer and foreclosure expert Max Gardner explained to me. Even though the lower court gave both banks time to produce evidence of earlier assignments, the banks weren’t able to cough up the proof.

They did, however, produce some securitization documents that the court said did not suffice as proof of legal standing in this case. U.S. Bank submitted the offering documents for the mortgage-backed security, which the court said showed an “intent to assign mortgages to U.S. Bank, not proof of their actual assignment.”

The court went on to say that even if the banks had produced a trust agreement or pooling and servicing agreement—proof that a mortgage pool was sold and assigned to the trust—they would still have to provide records detailed enough to show that the actual mortgage in question is contained in that mortgage pool.

The American Securitization Forum chose to take a glass-half-full approach to interpreting the ruling. It issued a statement  saying it was “pleased that the Court validated the use of the conveyance language in securitization documents as being sufficient to prove transfers of mortgages” under Massachusetts law.

(Georgetown University associate law professor Adam Levitin, meanwhile, looked at securitization documents for other mortgage securities and concluded that many would probably fall similarly short.)

Wall Street has nonetheless argued that the Massachusetts ruling was limited in scope. Paul Jablansky, an asset-backed securities strategist at the Royal Bank of Scotland, issued a report stating that “we do not believe that this case will be a broadly applicable landmark.”

That could be true. The ruling only has direct implications for foreclosures in Massachusetts, and state courts elsewhere could rule differently on a similar set of facts. That’s up to the courts to decide.

CNBC points out that the problems may be close to impossible for the banks to fix. Take the Ibanez mortgage as an example—the chain of title was supposed to include assignments to and from Lehman Brothers, which collapsed in 2008:

Getting someone at Lehman to go through the process of executing the assignment is going to be very difficult. It’s not even clear if anyone at Lehman Brothers has the legal authority to execute an assignment now, while Lehman is bankrupt.

In any case, getting the assignment from Lehman wouldn’t really help you. You’d still have a gap in the chain from Option One to Lehman. It’s probably best to skip over Lehman all together and go directly to Option One to ask for the assignment.

But you have a bit of a problem. You didn’t buy the mortgage from Option One. They aren’t under any contractual obligation to you to execute any documents.

On top of that, the basic rules of securitization could be another obstacle for banks hoping to fix their mistakes by simply assigning mortgages years after the fact. The trusts were formed under tax rules passed in 1986 that gave them tax-exempt status so long as they “do not acquire any new assets after the trust closes,” according to FT Alphaville.

If the trusts violate these rules, they could potentially be required to pay penalties, taxes and interest, Gardner told me—ultimately wiping out investors.

No one’s sure what the Ibanez ruling will mean just yet, but one thing is clear: Foreclosing on mortgages that were securitized with insufficient documentation will continue to be tricky business for the banks.