1,475,000 Visits and moving fast. Thank You Readers!!

Don’t be so fast to leave your home just because you are “behind”. Those payments might not be due at all or if they are, they are probably not owed to the people you are paying.

We are very pleased with the responses from our devoted readers, many of whom are direct contributors to this site. The insights, forms and analysis from the many soldiers — lawyers and laymen alike has made this site the premier resource for assisting distressed homeowners in gaining relief — sometimes total relief — from Mortgages based upon false appraisals, using predatory lending practices and withholding vital information from borrowers at the closing table.

How many borrowers would have signed on the dotted line if they had known that they were signing a ticket for unprecedented and unjustified fees and profits earned by unknown parties — sometimes as much as the mortgage itself?

How many investors would have put up the money if they had known that only some of it was being used to fund mortgage transactions and that the rest was being kept as fees, profits and reserves to pay them out of their own money?

The victims here are all homeowners and all consumers and all investors and all  taxpayers. The companies seeking to foreclose never owned the mortgage, note or obligation. They have no right to your property or the proceeds of sale to your property. Use this blogsite as your resource to educate yourself. Consult with local counsel start with the listing of “Lawyers that Get It”. Get a forensic review NOT just a “TILA loan audit” and challenge EVERYTHING!

Ohio Sues Rating Firms for Losses in Funds: Fraud Catching Up with Swindlers

NOW AVAILABLE ON KINDLE/AMAZON

WHY THIS IS IMPORTANT TO FORECLOSURE DEFENSE AND OFFENSE: OK I know the last thing you want to hear is how complex this scheme was. But if you can get over the intimidation factor, you will see how the lawsuits filed by individual homeowners, attorney generals, and class actions are picking apart the whole scheme, coming up with the inconvenient answers that Wall Street is working to avoid and that many government officials are too lazy or paid off or whatever to get involved.

So here we focus on the rating agencies and you might be asking why do I care if I wasn’t an investor who bought those empty bonds that funded my loan? The reason is that others with far greater resources than you are doing your work for you.

The SINGLE transaction, starting with the sale of the bond to the investor and then to the sale of the financial loan product to the homeowner and then ending with the false foreclosures and unconscionable proceeds of credit default swaps could ONLY have been achieved with the active participation from the rating agencies.

By selling their reputation for objectivity to the highest bidder, by misusing their skill in assessing credit risk,  the rating agencies enabled those bonds to be sold under the pretense that they were AAA sound investments. But for that the mortgage meltdown would never have occurred. But for that, you would not be in the upside down position, or delinquency, default or foreclosure in which you find yourself.

But for the free flow of free money there would have been no pressure to get rid of it in order to make Wall Street’s unconscionable profits. And without that pressure, housing prices would have remained relatively stable instead of shooting up to unprecedented (by any measure) unsustainable levels that were not reflective of what the homeowner would get when Wall Street’s scheme was over.

Your home loan was rated by these rating agencies. They looked the other way and changed underwriting standards from common sense to common fraud. The ONLY way the bonds sold to investors could have been rated so high was by rating the underlying mortgages and notes. No REAL analysis would have done anything except raise red flags bringing the rating down to junk. Just starting with the appraisal” on the house which was also a form of rating, no reasonable person could possible look at the history of housing prices and believe that the 30% jump in 4 months was sustainable. Nobody using their own money would fund a deal based on that. It is only because the originating “lenders” (i.e, straw-men, conduits) were not using their own capital that these loans were made.

We were all duped by the appraisers and the rating agencies who sold their integrity to the highest bidder. And in the process of tragedy of astonishing severity is unfolding, getting worse and fooling the American public — until it reaches each and every one of us, which it will.

At some point the homeowners should be suing the rating agencies and appraisers for their part in all this. The counterclaim is both fraud in the inducement and fraud in the execution. Fraud in the execution because you thought you were just taking out a loan when in fact you were purchasing a financial loan product that was a security promising you passive returns whose value was intentionally misrepresented. Fraud in the inducement because had you known the true value of the property you would never have assumed that you could cover the loan terms, which were also illegal and predatory.

The game is on. If you reach the truth before Goldman et al are done, you can stop it, reverse it, and set the country back on the path of confidence in an economy that is based upon something other than $500 trillion in derivative vapor.

November 21, 2009

Ohio Sues Rating Firms for Losses in Funds

By DAVID SEGAL

Already facing a spate of private lawsuits, the legal troubles of the country’s largest credit rating agencies deepened on Friday when the attorney general of Ohio sued Moody’s Investors Service, Standard & Poor’s and Fitch, claiming that they had cost state retirement and pension funds some $457 million by approving high-risk Wall Street securities that went bust in the financial collapse.

The case could test whether the agencies’ ratings are constitutionally protected as a form of free speech.

The lawsuit asserts that Moody’s, Standard & Poor’s and Fitch were in league with the banks and other issuers, helping to create an assortment of exotic financial instruments that led to a disastrous bubble in the housing market.

“We believe that the credit rating agencies, in exchange for fees, departed from their objective, neutral role as arbiters,” the attorney general, Richard Cordray, said at a news conference. “At minimum, they were aiding and abetting misconduct by issuers.”

He accused the companies of selling their integrity to the highest bidder.

Steven Weiss, a spokesman for McGraw-Hill, which owns S.& P., said that the lawsuit had no merit and that the company would vigorously defend itself.

“A recent Securities and Exchange Commission examination of our business practices found no evidence that decisions about rating methodologies or models were based on attracting market share,” he said.

Michael Adler, a spokesman for Moody’s, also disputed the claims. “It is unfortunate that the state attorney general, rather than engaging in an objective review and constructive dialogue regarding credit ratings, instead appears to be seeking new scapegoats for investment losses incurred during an unprecedented global market disruption,” he said.

A spokesman for Fitch said the company would not comment because it had not seen the lawsuit.

The litigation adds to a growing stack of lawsuits against the three largest credit rating agencies, which together command an 85 percent share of the market. Since the credit crisis began last year, dozens of investors have sought to recover billions of dollars from worthless or nearly worthless bonds on which the rating agencies had conferred their highest grades.

One of those groups is largest pension fund in the country, the California Public Employees Retirement System, which filed a lawsuit in state court in California in July, claiming that “wildly inaccurate ratings” had led to roughly $1 billion in losses.

And more litigation is likely. As part of a broader financial reform, Congress is considering provisions that make it easier for plaintiffs to sue rating agencies. And the Ohio attorney general’s action raises the possibility of similar filings from other states. California’s attorney general, Jerry Brown, said in September that his office was investigating the rating agencies, with an eye toward determining “how these agencies could get it so wrong and whether they violated California law in the process.”

As a group, the attorneys general have proved formidable opponents, most notably in the landmark litigation and multibillion-dollar settlement against tobacco makers in 1998.

To date, however, the rating agencies are undefeated in court, and aside from one modest settlement in a case 10 years ago, no one has forced them to hand over any money. Moody’s, S.& P. and Fitch have successfully argued that their ratings are essentially opinions about the future, and therefore subject to First Amendment protections identical to those of journalists.

But that was before billions of dollars in triple-A rated bonds went bad in the financial crisis that started last year, and before Congress extracted a number of internal e-mail messages from the companies, suggesting that employees were aware they were giving their blessing to bonds that were all but doomed. In one of those messages, an S.& P. analyst said that a deal “could be structured by cows and we’d rate it.”

Recent cases, like the suit filed Friday, are founded on the premise that the companies were aware that investments they said were sturdy were dangerously unsafe. And if analysts knew that they were overstating the quality of the products they rated, and did so because it was a path to profits, the ratings could forfeit First Amendment protections, legal experts say.

“If they hold themselves out to the marketplace as objective when in fact they are influenced by the fees they are receiving, then they are perpetrating a falsehood on the marketplace,” said Rodney A. Smolla, dean of the Washington and Lee University School of Law. “The First Amendment doesn’t extend to the deliberate manipulation of financial markets.”

The 73-page complaint, filed on behalf of Ohio Police and Fire Pension Fund, the Ohio Public Employees Retirement System and other groups, claims that in recent years the rating agencies abandoned their role as impartial referees as they began binging on fees from deals involving mortgage-backed securities.

At the root of the problem, according to the complaint, is the business model of rating agencies, which are paid by the issuers of the securities they are paid to appraise. The lawsuit, and many critics of the companies, have described that arrangement as a glaring conflict of interest.

“Given that the rating agencies did not receive their full fees for a deal unless the deal was completed and the requested rating was provided,” the attorney general’s suit maintains, “they had an acute financial incentive to relax their stated standards of ‘integrity’ and ‘objectivity’ to placate their clients.”

To complicate problems in the system of incentives, the lawsuit states, the methodologies used by the rating agencies were outdated and flawed. By the time those flaws were obvious, nearly half a billion dollars in pension and retirement funds had evaporated in Ohio, revealing the bonds to be “high-risk securities that both issuers and rating agencies knew to be little more than a house of cards,” the complaint states.

Swindlers’ Waltz to the Sounds of a Crash

Government officials, perhaps influenced by spending too much time with bankers, forgot that if you want to govern effectively you have retain the trust of the people. And by treating the financial industry — which got us into this mess in the first place — with kid gloves, they have squandered that trust.

During the bubble years, many financial companies created the illusion of financial soundness by buying credit-default swaps from A.I.G. — basically, insurance policies in which A.I.G. promised to make up the difference if borrowers defaulted on their debts. It was an illusion because the insurer didn’t have remotely enough money to make good on its promises if things went bad. And sure enough, things went bad.

By making what was in effect a multibillion-dollar gift to Wall Street, policy makers undermined their own credibility — and put the broader economy at risk.

finishing the job has become nearly impossible now that the public has lost faith in the government’s efforts, viewing them as little more than handouts to the people who got us into this mess.

November 20, 2009

Op-Ed Columnist

The Big Squander

By PAUL KRUGMAN

Earlier this week, the inspector general for the Troubled Asset Relief Program, a k a, the bank bailout fund, released his report on the 2008 rescue of the American International Group, the insurer. The gist of the report is that government officials made no serious attempt to extract concessions from bankers, even though these bankers received huge benefits from the rescue. And more than money was lost. By making what was in effect a multibillion-dollar gift to Wall Street, policy makers undermined their own credibility — and put the broader economy at risk.

For the A.I.G. rescue was part of a pattern: Throughout the financial crisis key officials — most notably Timothy Geithner, who was president of the New York Fed in 2008 and is now Treasury secretary — have shied away from doing anything that might rattle Wall Street. And the bitter paradox is that this play-it-safe approach has ended up undermining prospects for economic recovery. For the job of fixing the broken economy is far from done — yet finishing the job has become nearly impossible now that the public has lost faith in the government’s efforts, viewing them as little more than handouts to the people who got us into this mess.

About the A.I.G. affair: During the bubble years, many financial companies created the illusion of financial soundness by buying credit-default swaps from A.I.G. — basically, insurance policies in which A.I.G. promised to make up the difference if borrowers defaulted on their debts. It was an illusion because the insurer didn’t have remotely enough money to make good on its promises if things went bad. And sure enough, things went bad.

So why protect bankers from the consequences of their errors? Well, by the time A.I.G.’s hollowness became apparent, the world financial system was on the edge of collapse and officials judged — probably correctly — that letting A.I.G. go bankrupt would push the financial system over that edge. So A.I.G. was effectively nationalized; its promises became taxpayer liabilities.

But was there any way to limit those liabilities? After all, banks would have suffered huge losses if A.I.G. had been allowed to fail. So it seemed only fair for them to bear part of the cost of the bailout, which they could have done by accepting a “haircut” on the amounts A.I.G. owed them. Indeed, the government asked them to do just that. But they said no — and that was the end of the story. Taxpayers not only ended up honoring foolish promises made by other people, they ended up doing so at 100 cents on the dollar.

Could things have been different? Some commentators argue that government officials had no way to force the banks to accept a haircut — either they let A.I.G. go bankrupt, which they weren’t ready to do, or they had to honor its contracts as written.

But this seems like a naïve view of how Wall Street works. Major financial firms are a small club, with a shared interest in sustaining the system; ever since the days of J.P. Morgan, it has been common in times of crisis to call on the big players to forgo short-term profits for the industry’s common good. Back in 1998, it was a consortium of private bankers — not the government — that put up the funds to rescue the hedge fund Long Term Capital Management.

Furthermore, big financial firms have a long-term relationship, both with the government and with each other, and can pay a price if they act selfishly in times of crisis. Bear Stearns, the investment bank, earned itself a lot of ill will by refusing to participate in that 1998 rescue, and it’s widely believed that this ill will played a major factor in the demise of Bear Stearns itself, 10 years later.

So officials could have called on bankers to offer a better deal, for their own sake, and simultaneously threatened to name and shame those who balked. It was their choice not to do that, just as it was their choice not to push for more control over bailed-out banks in early 2009.

And, as I said, these seemingly safe choices have now placed the economy in grave danger.

For the economy is still in deep trouble and needs much more government help. Unemployment is in double-digits; we desperately need more government spending on job creation. Banks are still weak, and credit is still tight; we desperately need more government aid to the financial sector. But try to talk to an ordinary voter about this, and the response you’re likely to get is: “No way. All they’ll do is hand out more money to Wall Street.”

So here’s the real tragedy of the botched bailout: Government officials, perhaps influenced by spending too much time with bankers, forgot that if you want to govern effectively you have retain the trust of the people. And by treating the financial industry — which got us into this mess in the first place — with kid gloves, they have squandered that trust.

NY Judges ROCK! Indymac Bank F.S.B. v Yano-Horoski

NY JUDGES ROCK

Indymac Bank F.S.B. v Yano-Horoski
2009 NY Slip Op 52333(U)
Decided on November 19, 2009
Supreme Court, Suffolk County
Spinner, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on November 19, 2009

Supreme Court, Suffolk County

Indymac Bank F.S.B., Plaintiff

against

Diana Yano-Horoski, Wells Fargo Bank Minnesota National Association as Trustee for Soundview Home Equity Loan Trust 2001-1 and Kimberly Horoski, Defendants.

2005-17926

Steven J. Baum P.C.

Attorney for Plaintiff

P.O. Box 1291

Buffalo, New York 14240

Diana Yano-Horoski

Defendant Pro Se

8 Oakland Street

East Patchogue, New York 11772-5767

Jeffrey Arlen Spinner, J.

This is an action wherein the Plaintiff claims foreclosure of a mortgage dated August 4, 2004 in the original principal amount of $ 292,500.00 recorded with the Clerk of Suffolk County, New York in Liber 20826 of Mortgages at Page 285. The mortgage secures an adjustable rate note of the same amount with an initial interest rate of 10.375%. The mortgage encumbers real property commonly known as 8 Oakland Street, East Patchogue, Town of Brookhaven, New York and described as District 0200 Section 979.50 Block 05.00 Lot 001.000 on the Tax Map of Suffolk County. Plaintiff commenced this action by filing a Summons, Verified Complaint and Notice of Pendency on July 27, 2005. The Notice of Pendency was extended by Order dated April 28, 2008 and a Judgment of Foreclosure & Sale was granted on January 12, 2009.

Thereafter and in accordance with the Laws of 2008, Ch. 472, Sec. 3-a and in view of the fact that the loan at issue was deemed to be “sub-prime” or “high cost” in nature, Defendant seasonably requested that the Court convene a settlement conference. That request was granted and a conference was commenced on February 24, 2009 which was continued five times in a series of unsuccessful attempts by the Court to obtain meaningful cooperation from Plaintiff. In view of Plaintiff’s intransigence in its continuing failure and refusal to cooperate, both with the Court and with Defendant’s multiple and reasonable requests, the Court directed that Plaintiff produce an officer of the bank at the adjourned conference scheduled for September 22, 2009.

At the conference held on September 22, 2009, Karen Dickinson, Regional Manager of [*2]Loss Mitigation for IndyMac Mortgage Services, division of OneWest Bank F.S.B. (“IndyMac”) appeared on behalf of Plaintiff. IndyMac purports to be the servicer of the loan for the benefit of Deutsche Bank who, it is claimed, is the owner and holder of the note and mortgage (though the record holder is IndyMac Bank F.S.B., an entity which no longer is in existence). At that conference, it was celeritously made clear to the Court that Plaintiff had no good faith intention whatsoever of resolving this matter in any manner other than a complete and forcible devolution of title from Defendant. Although IndyMac had prepared a two page document entitled “Mediation Yano-Horoski” which contained what purported to be a financial analysis, Ms. Dickinson’s affirmative statements made it abundantly clear that no form of mediation, resolution or settlement would be acceptable to Plaintiff. IndyMac asserts the total amount due it to be in excess of $ 525,000.00 and freely concedes that the property securing the loan is worth no more than $ 275,000.00. Although Ms. Dickinson insisted that Ms. Yano-Horoski had been offered a “Forbearance Agreement” in the recent past upon which she quickly defaulted, it was only after substantial prodding by the Court that Ms. Dickinson conceded, with great reluctance, that it had not been sent to Defendant until after its stated first payment due date and hence, Defendant could not have consummated it under any circumstances (Defendant, through Plaintiff’s duplicity, found herself to be in the unique and uncomfortable position of being placed in default of the “agreement” even before she had received it). Plaintiff flatly rejected an offer by Plaintiff’s daughter to purchase the house for its fair market value (a so-called “short sale”) with third party financing. Plaintiff refused to consider a loan modification utilizing any more than 25% of the income of Plaintiff’s husband and daughter (both of whom reside in the premises with her), the excuse being that “We can’t control what non-obligors do with their money” (the logical follow up to this statement is how does the bank control what the obligor does with her money?). The Court found IndyMac’s position to be deeply troubling, especially since a plethora of sub-prime loans in this County’s Foreclosure Conference Part have been successfully modified with the lender’s reliance upon the income of non-obligors who reside in the premises under foreclosure. The Plaintiff also summarily rejected an offer by both Plaintiff’s husband and daughter to voluntarily obligate themselves for payment upon the full indebtedness, thus committing their individual incomes expressly to the purpose of a loan modification. It should be noted here that Defendant did not even request any waiver or “forgiveness” of the indebtedness aside from some tinkering with the interest rate, just a modification of terms so as to enable her to repay the same. It was evident from Ms. Dickinson’s opprobrious demeanor and condescending attitude that no proffer by Defendant (short of consent to foreclosure and ejectment of Defendant and her family) would be acceptable to Plaintiff. Even a final and desperate offer of a deed in lieu of foreclosure was met with bland equivocation. In short, each and every proposal by Defendant, no matter how reasonable, was soundly rebuffed by Plaintiff. Viewed objectively, it is apparent that Plaintiff’s conduct in this matter falls within the definitions set forth in 22 NYCRR § 130-1.1( c)(2), which might well warrant the imposition of monetary sanctions.

On the Court’s own motion, a hearing was held on November 18, 2009 in order to explore the issues herein. At the hearing, Ms. Dickinson appeared as well as Mr. Horoski. IndyMac claimed a balance due, as of September 22, 2009 of $ 527,437.73 which included an escrow overdraft of $ 46,627.88 for taxes advanced since the date of default but did not include attorney’s fees and costs.. Plaintiff was unable to tell the Court the amount of the principal [*3]balance owed. Mr. Horoski advised the Court that according to two letters received from Plaintiff, the principal balance was said to be $ 285,381.70 as of February 9, 2009 and $ 283,992.48 as of August 10, 2009. Plaintiff stated was that Defendant must have made payments though it was conceded that in fact no payment had been made.Plaintiff insisted that it had remained in regular contact with Defendant in an effort to reach an amicable resolution, that it had extended two modification offers to Defendant which she did not accept and further, that due to her financial status she was not qualified for any modification, even under the Federal HAMP guidelines. Plaintiff denied that it had “singled out” Defendants, simply stating that her status was such that she fell outside applicable guidelines. All of these assertions were disputed by Defendant.

That having been said, the Court is greatly disturbed by Plaintiff’s assertions of the amount claimed to be due from Defendant. The Referee’s Report dated June 30, 2008, which has its genesis in a sworn affidavit by a representative of Plaintiff (presumably one with knowledge of the account), reflects a total amount due and owing of $ 392,983.42. The principal balance is reported to be $ 290,687.85 with interest computed at the rates of 10.375% from November 1, 2005 through August 31, 2006 ($ 25,118.62), 12.50% from September 1, 2006 to February 28, 2007 ($ 18,018.66), 12.375% from March 1, 2007 to March 31, 2008 ($ 39,126.39) and 11.375% from April 1, 2008 to June 24, 2008 ($ 7,700.24) totalling $ 89,963.91. Plaintiff also claims $ 20.00 in non-sufficient funds charges, $ 295.00 in property inspection fees and $ 12,016.66 for tax and insurance advances. The Judgment of Foreclosure & Sale dated January 12, 2009 was granted in the amount of $ 392,983.42 with interest at the contract rate from June 24, 2008 through January 12, 2009 and at the statutory rate thereafter plus attorney’s fees of $ 2,300.00 and a bill of costs in the amount of $ 1,705.00. Even computing the accrual of pre-judgment interest of $ 18,299.18 (using Plaintiff’s per diem rate in the Referee’s Report) together with post-judgment interest at a statutory 9% through November 19, 2009 (an additional $ 31,740.90), the application of simple addition yields a total amount due of $ 447,028.50. This figure is $ 80,409.23 less than the $ 527,437.73 asserted by Plaintiff to be due and owing from Defendant. The Court is astounded that Plaintiff now claims to be owed an escrow advance amount of $ 46,627.88 when, under oath, its officer swore that as of June 24, 2008 that amount was actually $ 34,611.22 less. Moreover, it now appears that the elusive principal balance is either $ 290,687.85, $ 285,381.70 or $ 283,992.48.

It is the province and indeed the obligation of the trial court to assess and to determine issues regarding credibility, Morgan v. McCaffrey 14 AD3d 670 (2nd Dept. 2005). In the matter before the Court, the pendulum of credibility swings heavily in favor of Defendant. When the conduct of Plaintiff in this proceeding is viewed in its entirety, it compels the Court to invoke the ancient and venerable principle of “Falsus in uno, falsus in omni” (Latin; “false in one, false in all”) upon Defendant which, after review, is wholly appropriate in the context presented, Deering v. Metcalf 74 NY 501 (1878). Regrettably, the Court has been unable to find even so much as a scintilla of good faith on the part of Plaintiff. Plaintiff comes before this Court with unclean hands yet has the insufferable temerity to demand equitable relief against Defendant.

The Court, over the course of some six substantive appearances in seven months, has been afforded more than ample opportunity to assess the demeanor, credibility and general state [*4]of relevant affairs of Defendant and Plaintiff. Although not actually relevant to the disposition of this matter, the Court is constrained to note that Defendant is afflicted with multiple health problems which outwardly manifest in her experiencing great difficulty in ambulation, necessitating the use of mechanical supports. Moreover, Defendant’s husband, Mr. Gregory Horoski, suffers from a myriad of serious medical conditions which greatly impede most aspects of his daily existence. Nonetheless, both of these persons, together with their adult daughter who resides with them and who is substantially and gainfully employed, receive income which they are more than willing to commit, in good faith, toward repayment of the debt to Plaintiff and indeed, despite their physical challenges, they have appeared at each and every scheduled conference before this Court. At each appearance, they have assiduously attempted to resolve this controversy in an amicable fashion, only to be callously and arbitrarily turned away by Plaintiff. This has been so even in spite of the Court’s continuing albeit futile endeavors at brokering a settlement.

As a relevant aside, the scenario presented here raises the specter of a much greater social problem, that of housing those persons whose homes are foreclosed and who are thereafter dispossessed. It is certainly no secret that Suffolk County is in the yawning abyss of a deep mortgage and housing crisis with foreclosure filings at a record high rate and a corresponding paucity of emergency housing. While foreclosure and its attendant eviction are clearly the inevitable (and in some cases, proper) result in a number of these situations, the Court is persuaded that this need not be the case here. In this matter, Defendant is plainly willing to make arrangements for repayment and both her husband and daughter are likewise willing to allocate their respective incomes in order to reach the same end. Were Plaintiff amenable, she would presumably continue to maintain the property’s physical plant, pay taxes thereon and the property would retain or perhaps increase its market value. Plaintiff would receive a regular income stream, albeit with a reduced rate of interest and without sustaining a loss of several hundred thousand dollars. In addition, no neighborhood blight would occur from the boarding of the property after foreclosure which would, in turn, avert problems of litter, dumping, vagrancy and vandalism as well as a corresponding decline in the property values in the immediate area. In short, a loan modification would result in a proverbial “win-win” for all parties involved. To do otherwise would result in virtually certain undomiciled status for two physically unhealthy persons and their daughter, leading to an additional level of problems, both for them and for society.

Since an action claiming foreclosure of a mortgage is one sounding in equity, Jamaica Savings Bank v. M.S. Investing Co. 274 NY 215 (1937), the very commencement of the action by Plaintiff invokes the Court’s equity jurisdiction. While it must be noted that the formal distinctions between an action at law and a suit in equity have long since been abolished in New York (see CPLR 103, Field Code Of 1848 §§ 2, 3, 4, 69), the Supreme Court nevertheless has equity jurisdiction and distinct rules regarding equity are still extant, Carroll v. Bullock 207 NY 567, 101 NE 438 (1913). Speaking generally and broadly, it is settled law that “Stability of contract obligations must not be undermined by judicial sympathy…” Graf v. Hope Building Corporation 254 NY 1 (1930). However, it is true with equal force and effect that equity must not and cannot slavishly and blindly follow the law, Hedges v. Dixon County 150 US 182, 192 (1893). Moreover, as succinctly decreed by our Court of Appeals in the matter of Noyes v. [*5]Anderson 124 NY 175 (1890) “A party having a legal right shall not be permitted to avail himself of it for the purposes of injustice or oppression…” 124 NY at 179.

In the matter of Eastman Kodak Co. v. Schwartz 133 NYS2d 908 (Sup. Ct., New York County, 1954), Special Term stated that “The maxim of “clean hands” fundamentally was conceived in equity jurisprudence to refuse to lend its aid in any manner to one seeking its active interposition who has been guilty of unlawful, unconscionable or inequitable conduct in the matter with relation to which he seeks relief.” 133 NYS2d at 925, citing First Trust & Savings Bank v. Iowa-Wisconsin Bridge Co. 98 F 2d 416 (8th Cir. 1938), cert. denied 305 US 650, 59 S. Ct. 243, 83 L. Ed. 240 (1938), reh. denied 305 US 676, 59 S Ct. 356 83 L. Ed. 437 (1939); General Excavator Co. v. Keystone Driller Co. 65 F 2d 39 (6th Cir. 1933), cert. granted 289 US 721, 53 S. Ct. 791, 77 L. Ed. 1472 (1933), aff’d 290 US 240, 54 S. Ct. 146, 78 L. Ed. 793 (1934).

In attempting to arrive at a determination as to whether or not equity should properly intervene in this matter so as to permit foreclosure of the mortgage, the Court is required to look at the situattion in toto, giving due and careful consideration as to whether the remedy sought by Plaintiff would be repugnant to the public interest when seen from the point of view of public morality, see, for example, 55 NY Jur. Equity § 113, Molinas v. Podloff 133 NYS2d 743 (Sup. Ct., New York County, 1954). Equitable relief will not lie in favor of one who acts in a manner which is shocking to the conscience, Duggan v. Platz 238 AD 197, 264 NYS 403 (3rd Dept. 1933), mod. on other grounds 263 NY 505, 189 NE 566 (1934), neither will equity be available to one who acts in a manner that is oppressive or unjust or whose conduct is sufficiently egregious so as to prohibit the party from asserting its legal rights against a defaulting adversary, In Re Foreclosure Of Tax Liens 117 NYS2d 725 (Sup. Ct. Kings County, 1952), aff’d on other grounds 286 AD 1027, 145 NYS2d 97 (2nd Dept. 1955), mod. on other grounds on reargument 1 AD2d 95, 148 NYS2d 173 (2nd Dept. 1955), appeal granted 7 AD2d 784, 149 NYS2d 227 (2nd Dept. 1956). The compass by which the questioned conduct must be measured is a moral one and the acts complained of (those that are sufficient so as to prevent equity’s intervention) need not be criminal nor actionable at law but must merely be willful and unconscionable or be of such a nature that honest and fair minded folk would roundly denounce such actions as being morally and ethically wrong, Pecorella v. Greater Buffalo Press Inc. 107 AD2d 1064, 468 NYS2d 562 (4th Dept. 1985). Thus, where a party acts in a manner that is offensive to good conscience and justice, he will be completely without recourse in a court of equity, regardless of what his legal rights may be, Eastman Kodak Co. v. Schwartz 133 NYS2d 908 (Sup. Ct., New York County, 1954), York v. Searles 97 AD 331, 90 NYS 37 (2nd Dept. 1904), aff’d 189 NY 573, 82 NE 1134 (1907).

An objective and painstaking examination of the totality of the facts and circumstances herein leads this Court to the inescapable conclusion that the affirmative conduct exhibited by Plaintiff at least since since February 24, 2009 (and perhaps earlier) has been and is inequitable, unconscionable, vexatious and opprobrious. The Court is constrained, solely as a result of Plaintiff’s affirmative acts, to conclude that Plaintiff’s conduct is wholly unsupportable at law or in equity, greatly egregious and so completely devoid of good faith that equity cannot be permitted to intervene on its behalf. Indeed, Plaintiff’s actions toward Defendant in this matter have been harsh, repugnant, shocking and repulsive to the extent that it must be appropriately [*6]sanctioned so as to deter it from imposing further mortifying abuse against Defendant. The Court cannot be assured that Plaintiff will not repeat this course of conduct if this action is merely dismissed and hence, dismissal standing alone is not a reasonable option. Likewise, the imposition of monetary sanctions under 22 NYCRR § 130-1.1 et. seq. is not likely to have a salubrious or remedial effect on these proceedings and certainly would not inure to Defendant’s benefit. This Court is of the opinion that cancellation of the indebtedness and discharge of the mortgage, when taken together, constitute the appropriate equitable disposition under the unique facts and circumstances presented herein.

After careful consideration, it is the determination of this Court that the indebtedness evidenced by the Adjustable Rate Note dated August 4, 2004 in the original principal amount of $ 292,500.00 made by Diana J. Yano-Horoski in favor of IndyMac Bank F.S.B. should be cancelled, voided and set aside. In addition, the Mortgage which secures the Adjustable Rate Note, given to Mortgage Electronic Registration Systems Inc. As Nominee For IndyMac Bank F.S.B. dated August 4, 2004 and recorded with the Clerk of Suffolk County on August 16, 2004 in Liber 20826 of Mortgages at Page 285, as assigned by Assignment recorded with the Clerk of Suffolk County in Liber 21273 of Mortgages at Page 808 should be cancelled and discharged of record. Further, Plaintiff, its successors and assigns should be forever barred and prohibited from any action to collect upon the Adjustable Rate Note. In addition, the Judgment of Foreclosure & Sale granted on January 12, 2009 and entered on January 23, 2009 should be vacated and set aside and the Notice of Pendency should be cancelled and discharged of record. For this Court to decree anything less than the foregoing would be for the Court to be wholly derelict in the performance of its obligations.

Upon the Court’s own motion, it is

ORDERED that the Adjustable Rate Note in the amount of $ 292,500.00 dated August 4, 2004 made by Diana J. Yano-Horoski in favor of IndyMac Bank F.S.B. shall be and the same is hereby cancelled, voided, avoided, nullified, set aside and is of no further force and effect; and it is further

ORDERED that the Mortgage in the amount of $ 292,500.00 which secures said Adjustable Rate Note given by Diana J. Yano-Horoski to Mortgage Electronic Registration Systems Inc. As Nominee For IndyMac Bank F.S.B. dated August 4, 2004 and recorded with the Clerk of Suffolk County on August 16, 2004 in Liber 20826 of Mortgages as Page 285, as assigned to IndyMac Bank F.S.B. by Assignment recorded with the Clerk of Suffolk County in Liber 21273 of Mortgages at Page 808 shall be and the same is hereby vacated, cancelled, released and discharged of record; and it is further

ORDERED that the Plaintiff, its successors and assigns are hereby barred, prohibited and foreclosed from attempting, in any manner, directly or indirectly, to enforce any provision of the [*7]aforesaid Adjustable Rate Note and Mortgage or any portion thereof as against Defendant, her heirs or successors; and it is further

ORDERED that the Judgment of Foreclosure & Sale granted under this index number on January 12, 2009 and entered in the Office of the Clerk of Suffolk County on January 23, 2009 shall be and the same is hereby vacated and set aside; and it is further

ORDERED that the Notice of Pendency filed with the Clerk of Suffolk County on July 27, 2005 under sequence no. 172456, which was extended by Order dated September 2, 2008 shall be and the same is hereby cancelled, vacated and set aside; and it is further

ORDERED that the Notice of Pendency filed with the Clerk of Suffolk County on August 29, 2008 under sequence no. 199616, shall be and the same is hereby cancelled, vacated and set aside; and it is further

ORDERED that the Clerk of Suffolk County shall cause a copy of this Order & Judgment to be filed in the Land Records so as to effectuate of record each and every one of the provisions hereinabove set forth with respect to cancellation of the instruments and items of record; and it is further

ORDERED that Plaintiff shall pay to the Clerk of Suffolk County, within ten (10) days from the date of entry hereof, any and all fees and costs required to effect cancellation of record of the Mortgage, Notices of Pendency and any other fees so levied; and it is further

ORDERED that within ten (10) days of the date of entry hereof, Plaintiff’s counsel shall serve a copy of this Order upon the Clerk of Suffolk County and the Defendant.

This shall constitute the Decision, Judgment and Order of this Court.

Dated: November 19, 2009

Riverhead, New York

E N T E R:

______________________________________

JEFFREY ARLEN SPINNER, J.S.C.

The Emperor’s New Clothes: THOSE FORECLOSURES ARE NOT REAL FOLKS, GET IT?

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The Emperor\’s New Clothes: THOSE FORECLOSURES ARE NOT REAL FOLKS, GET IT?

1-in-10-u-s-mortgage-delinquencies-reach-a-record-high-going-up

The Emperor is still strutting around as though he was fully clothed in the best silk, color and design. Wall Street is still the darling of government and a whole lot of other people, even if it was a little bad these past few years. We’ve been through the part where the swindler’s came to town, where the government officials ashamed of their apparent blindness and ignorance raved about the new derivative innovations, and the parade of foreclosures based upon invisible clothes. But we have not arrived at the part in the story where the little child yells out that the old fool has no clothes on. And we still don’t hear everyone laughing at wall Street and sending them home to lick their own wounds instead of inflicting it on everyone else.

The swindlers are still in town selling invisible clothes to everyone gullible enough to buy nothing and call it something. We are running on vapor since 1983 when derivatives were zero. Now we have credit derivatives with a nominal value of somewhere over $500 Trillion — that is ten times the total money in circulation from government origins. That’s “nominal value” because they don’t exist and they have no value. There is no substance to them to the extent that they are based on secured debt and possibly all other debt. There is no mortgage, there is no note, although there might be an obligation. But if there is an obligation it probably has been extinguished by either set off for predatory “lending” (actually illegal sale of unregistered securities fraudulently masquerading as loan products) or extinguished by payment directly or indirectly from Uncle Sam, more investors or others. In this fairy tale (national nightmare), the swindler’s take over the government instead of sneaking out of town with their hoard of ill-gotten gains.

Think about it. If virtually ALL of the securitized residential mortgages that were originated for the last 10 years are in some sort of trouble, how much brain power does it take to conclude that there was something wrong with them to begin with?

If virtually ALL of the mortgage backed securities that were created and sold in the last 10 years went into default, how much brain power does it take to conclude that there was something wrong with them to begin with?

So if virtually all the transactions originating the source money and all the transactions that were funded from the source money went bad, how much brain power does it take to conclude that there was no substance to the transaction and that the whole thing was a fantasy from Wall Street, who are now strutting around with their pockets bulging with the all the money everyone else (investors and “borrowers”) lost?

I’ve been as gentle as I could, giving everyone a chance to catch up but we are now on the precipice of a cliff far deeper than anything we have seen before including one year ago. And nobody on the side lines is really getting it. We continue our march toward the edge of the cliff, push the ones in front off, in the hope or belief that we won’t ever get there. So here it is, my opinion to be sure, but anyone who has been following my writings since April, 2007 knows that I called the stock market crash, the credit freeze and the collapse of the world economies and why. So it’s not like I don’t have a track record. I wasn’t the only one and people with far more credibility than me spotted the same things and continue to scream bloody murder, “the emperor has no clothes!” See comments by Roubini, Krugman, Volcker et al.

1. Geithner and Summers have to go. They are the emperor’s closest confidants who don’t want to look stupid even if it destroys the entire country. The current emperor is still on a learning curve so we have to cut him some slack. The prior ones, well….read on.
2. The recession is real but most of it could be reversed by simply admitting the obvious: those derivatives have no value, the mortgages are mostly invalid, the notes are mostly invalid, and the obligations are mostly extinguished by the swindlers’ own chicanery with Federal bailouts and Credit Default Swaps, which were the cloth of the Emperor’s invisible clothes.
3. The need for the AIG bailout can be argued. But nobody can argue that the people who benefited from it are the same people who got us into this mess. They took a system that was working and turned it into a system that couldn’t work. They turned mortgage lending on its head: mortgages that were likely to perform were valuable only as cover for most of the illegal activities underneath. The real incentive was to create mortgage pools that would fail and where they could collect on credit default swaps worth as much as 30 times the original nominal value. Vapor on Vapor.
4. That means they have every motivation to make certain you go into default and no motivation whatsoever to modify, settle, allow short-sale or do anything for the benefit of a homeowner who wants to settle the matter honorably. You can’t do that when you are dealing with dishonorable people with motives that amount to acts of domestic terrorism. There is no talking to them because if they can get you to default on that $300,000 loan they probably are going to get paid $9,000,000 just on your default. How do you like them apples? Check it out. It is true.
5. Any obligation — whether it is a loan for refinancing a house, buying a house, student loan, auto loan etc. that have the attributes discussed in this blog — does NOT have any security or note that can be enforced and all of them can be extinguished in bankruptcy — probably even including the nondischargeable student loans. (More on that another time).
6. Therefore, much of the recession, all of the foreclosures and much of the lost wealth that is “missing” is legally, morally and ethically and in actuality and reality, a fantasy. Some 20 million homeowners or more with these residential mortgages securitized through a money laundering scheme are sitting on wealth they have been convinced they don’t have. But they do. Those houses are free and clear — legally, morally and ethically.
7. All the homes in the MERS database are probably free from any encumbrance legally, ethically and morally. Trillions of dollars of wealth that is claimed as “lost” is still possessed by people who don’t know they have it and the game is on to make sure that if they ever figure it out it will be too late.
8. Imagine the purchasing power in our consumer economy if the mortgage obligations and other obligations simply vanished. What would happen to the recession? What would happen to unemployment? What would happen to tax revenues without ever raising the rate of taxation? It would all self correct. And speaking of taxes, how about all those trillions of dollars in “fees” and “profits” that were sequestered off shore, never reported and thus never taxed? what would happen to the national and state deficits?
9. All this is happening because the wrong people are controlling the conversation and most people are listening because the “experts” because they are so smart “must know better.” Consider me the child who yelled “But the Emperor has no clothes.” A million experts with long resumes, PhD’s and persuasive catch words can’t change the fact that the money laundering scheme of the last 10 years was clothed in “Apparent” legality but in substance was simply fraud perpetrated by people who were not any smarter or better than the common swindler. They did, however, have one ace in the hole — the Emperors were in on it. Maybe we have a chance with the current administration, maybe not.
10. Unless we do something about this, we will suffer the indignity of decline into third world status as the wealthy few squeeze the life out of the rest of the country. Is this too extreme for you? Go to the International Money Fund website or the World Bank website or any other website or book that addresses basic economics. You won’t find anything different there. Just words, like these, with a little more polish and a little more academic tone, with the same message.

Wells Fargo to Repurchase $1.4 Billion of Securities: WHAT THAT MEANS TO YOU

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You can use this information by establishing “probable cause” in the mind of the Judge or jury right off the bat — we know they lied to investors, are we now supposed to believe they told the truth to the homeowners?

This is the kind of news article buried deep into a newspaper or far down on the list of on-line articles that leaves everyone — homeowners, attorneys, judges, legislators and regulators — in the dark. Wells Fargo is settling one of many claims that it lied to investors about the mortgage backed securities they bought which funded your loan and which filled the pockets of Wall Street “innovators” for years. It doesn’t actually tell us what they lied about — you’ll need to look up the complaint (which I hope someone will do and send to me in pdf format) but it does say that those investors are now paid off in full and that Wells Fargo is buying back what they sold.

Now Wells Fargo will attempt to use that purchase as proof that it is the “INVESTOR” ignoring the ill-gotten gains that preceded it, and attempting to establish itself as the holder in due course, long after the securities were in default, long after the underlying asset mortgages were in default, and long after Wells Fargo received payoffs in credit default swaps that easily cover what they paid the investors and then some.

The point here is that the shell game continues. The regulators are not sophisticated or motivated enough to actually express this for what it is. Even the media gets totally confused. Instead of saying that many loans were paid off or sold back to Wells Fargo for $1.4 billion, it says something about “auction rate securities” which means nothing to practically everyone. What this REALLY means is that you have a defendant (actually several of them — see below) who has actually and demonstrably committed fraud as part of the securitization scheme that funded the financial loan products sold to homeowners — except that so far everyone is concentrating on the fraud on investors. Why is that? The little guy who was lied to, abused and shaken by this ordeal doesn’t matter. It’s just the people with the money that count. You can use this information by establishing “probable cause” in the mind of the Judge or jury right off the bat — we know they lied to investors, are we now supposed to believe they told the truth to the homeowners?

Wells Fargo to Repurchase $1.4 Billion of Securities

By CYRUS SANATI

Wells Fargo & Company said on Wednesday that it had agreed to buy back $1.4 billion in auction-rate securities it sold to investors before the market for those securities dried up last year.

The decision settles a lawsuit brought against the firm by California’s attorney general, which accused it of violating the state’s securities laws. Wells Fargo, which is based in San Francisco, also agreed to pay the state’s expenses related to the lawsuit.

The brokerage arm of the bank marketed the securities, which resemble corporate debt and whose interest rates were regularly reset by auctions, as an alternative to cash for years, even after analysts warned that the market could freeze up. In February 2008, banks stopped participating in the auctions and effectively locked up investors’ cash.

The suit, brought by the California attorney general, Jerry Brown, contended that Wells Fargo had routinely misrepresented, marketed and sold auction-rate securities as safe, liquid and cashlike investments, omitting material facts.

“Wells Fargo convinced thousands of investors to purchase auction-rate securities with promises of robust returns and liquidity, but when the market collapsed, investors were left out in the cold,” Mr. Brown said in a statement. “Based on misleading advice, investors bought these risky securities. Now, retail investors and small businesses are finally getting their money back.”

Under the terms of the settlement, Wells Fargo agreed to buy back at par value by April 2010 all auction-rate securities bought through its brokerage unit by investors before the market froze up.

About half of the auction-rate securities sold by Wells, which is based in San Francisco, were bought by California residents.

Mr. Brown and Wells reached a settlement agreement Tuesday night, people briefed on the matter said.

The settlement arises in part from an investigation led by Washington State’s Department of Financial Institutions, according to a statement by the North American Securities Administrators Association. Washington State filed an administrative action against Wells before California filed its own case. That matter has also been settled.

State regulators have secured settlements in which banks have agreed to repurchase more than $61 billion in auction-rate securities from investors. Among the firms that have settled these lawsuits are UBS, Bank of America, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup and Credit Suisse.

1 in 10: U.S. Mortgage Delinquencies Reach a Record High — Going UP?

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Editor’s Note: While the media, Wall Street and government sources try to placate us, there are inescapable truths right now and inescapable consequences right around the corner. Other than people who own their home outright or who are relatively close to that point, nearly every homeowner in America has several problems: (1) title is clouded if they refinanced or purchased a home in the last 10 years unless their loan product was local and thus not securitized and (2) they are hopelessly lost in debt that was fabricated by the sellers of Wall Street loan products because whether they know it or not, their home is worth less right now than what they owe, especially after you take into consideration the costs of sale (brokerage commissions etc.) and costs of closing.

The future is even more bleak as prices continue to fall under pressure from an increasing number of homes in inventory. If we stopped building now it would probably take close to 10 years to sell all the houses that are actually in the pipeline. Many of them are not counted right now as “inventory” but they are there nonetheless. Prices will fall under even more pressure as an increasing number of people, their real income decreasing for the last 30 years, simply pick up sticks and leave the keys on the counter. They can rent or even own a home for far less than the payments being demanded on their existing home. In many cases it is a simple calculation of whether to take a “hit” on their FICO score or try to pay hundreds of thousands of dollars they might never recover. As stated, they can’t pay it anyway because median income is dropping. In other words inventory will increase just from voluntary abandonments. Just staying in the house a few months during the process of foreclosure and eviction can put some money back on the table for the homeowner who is already strapped whether payments are being made or not.

Housing prices are tied to median income more than anything else. Unemployment, underemployment, and decreasing wages —actual dollars as well as relative purchasing power is lowering REAL median income every month. Those FOR SALE signs and the prices being asked are not real. Sure some buyers might bite, but most are going to wait until there is some indication that we have hit bottom. So prices will come under increasing pressure from lower median income and an absence of buyers. Using Schiller’s inflation adjusted index, it is obvious when we are still 15%-25% from the bottom using today’s “asking” prices as the baseline.

So that house that the seller thinks is “worth” $300,000 because they bought it for $450,000 is actually only going to fetch perhaps $250,000, less expenses. In all probability the Seller does not have the resources to make up the difference between the actual net selling price or proceeds and the alleged amount due (ignoring the fact that the amount due has probably been paid several times over to the investors who advanced the money that went mostly into the pockets of the Wall Street masters of the universe and partly into the funding of the loan). The only options are short-sale with permission from an entity that does not have any authority to approve it, loan modification with principal reduction with the same authority problem, attack the pretender lenders using the tools provided here, or walk from the house and forget about the whole thing. It doesn’t take a rocket scientist to figure out what many people will elect out of those choices.

November 20, 2009

U.S. Mortgage Delinquencies Reach a Record High

By DAVID STREITFELD

The number of people at least one month behind on their house payments rose to a record in the third quarter, the Mortgage Bankers Association said Thursday.

Nearly 10 in 100 homeowners are delinquent, according to the association’s data, up from about seven out of 100 in the third quarter of 2008.

These numbers do not include those who are actually in foreclosure, a figure that also rose sharply. The combined percentage of those in foreclosure as well as delinquent is 14.41 percent, or about one in seven of mortgage holders.

“Despite the recession ending in mid-summer, the decline in mortgage performance continues. Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in G.D.P.,” Jay Brinkmann, the association’s chief economist, said in a statement.

The data indicates that borrowers in trouble are no longer just those who took out subprime loans. High-quality prime fixed-rate mortgages now represent the largest share of new foreclosures.

The survey is based on a sample of more than 44 million mortgage loans serviced by mortgage companies, commercial banks, thrifts, credit unions and others. The association’s records date back to 1972.

Philadelphia Gives Homeowners a Way to Stay Put

The real story with real solutions or at least partial solutions. Sheriff Green started all this. Bravo. Now start thinking of all the profits, transfers and records that should have been reported, filed and taxed and the state budget problems will be over.

November 18, 2009

By PETER S. GOODMAN

PHILADELPHIA — Christopher Hall stepped tentatively through the entranceway of City Hall Courtroom 676 and took his place among dozens of others confronting foreclosure purgatory. His hopes all but extinguished, he fully expected the morning to end with a final indignity: He would sign over the deed to his house — his grandfather’s two-story row house; the only house in which he had ever lived; the house where he had raised three children.

“This is devastating,” he said last month as he sat in the gallery awaiting his hearing. “This is my childhood home. I grew up there. My mother passed away there. My grandfather passed away there. All of my memories are there.”

A union roofer, Mr. Hall, 42, had not worked since August 2008, when the contractor that employed him as a foreman went broke and laid off more than 40 people. He had not made a mortgage payment in more than a year, and his lender, Bank of America, was threatening to auction off his house through the sheriff’s office.

In most American cities, that probably would have been the end of the story: another home turned into distressed bank inventory by the national foreclosure crisis. But in Philadelphia, under a program begun last year to try to keep people in their homes, Mr. Hall entered the courtroom with a reasonable chance of hanging on.

Under the rules adopted by Philadelphia’s primary civil court, no owner-occupied house may be foreclosed on and sold by the sheriff’s office before a “conciliation conference,” a face-to-face meeting between the homeowner and the lender aimed at striking a workable compromise. Every homeowner facing a default filing is furnished with counseling, and sometimes legal representation.

So, as Mr. Hall stepped into the ornate courtroom just after 9 o’clock, he was swiftly provided with a volunteer lawyer, Kristine A. Phillips. She huddled briefly with a lawyer for Bank of America and returned with a useful promise. The bank would leave him alone for six more weeks while his housing counselor pursued further negotiations in an attempt to lower his payments permanently.

“You’ve got more time,” Ms. Phillips told him. “We’ll get this all worked out,” she said.

“Thank you so much,” Mr. Hall said softly, his body shaking with pent-up anxiety now tinged with relief. “It’s a lot of weight off of my shoulders.”

In a nation confronting a still-gathering crisis of foreclosure, Philadelphia’s program has emerged as a model that has enabled hundreds of troubled borrowers to retain their homes. Other cities, from Pittsburgh to Chicago to Louisville, have examined the program and adopted similar efforts.

“It brings the mortgage holder and the lender to the table,” said City Councilor John M. Tobin Jr. of Boston, who is planning to introduce legislation to enact a program in his city modeled on Philadelphia’s. “When people are face to face, it can be pretty disarming.”

When homeowners in Philadelphia receive legal default notices from their mortgage companies, the court system schedules a conciliation hearing. Canvassers working for local nonprofit agencies visit foreclosed homeowners, distributing fliers that inform them of their rights to a conference, and urging them to call a hot line that can direct them to free housing counselors.

“You can feel a certain sense of relief from their just being able to speak to someone about the program,” said Anna Hargrove, who works as a canvasser in West Philadelphia.

Every Thursday morning, the courtroom on the sixth floor of the regal City Hall here is given over to the conciliation conferences. It fills up with volunteer lawyers in jogging shoes, who are representing homeowners; gray-suited corporate lawyers working for mortgage companies; and all variety of delinquent borrowers — elderly citizens leaning on canes, construction workers in coveralls, parents with bored children in tow. The lawyers exchange preliminary settlement terms, while the homeowners fill out papers and wait.

In some cases, deals are struck that lower monthly payments for borrowers and allow them to retain their homes. When a homeowner cannot afford the home even at modified terms, the program helps to create a graceful exit, in which the borrower accepts cash for vacating the property or signs over the deed in lieu of further payment.

Those outcomes are similar to the ones produced by the Obama administration’s $75 billion program aimed at stemming foreclosures, which gives cash subsidies to mortgage companies as an inducement to accept lower payments. But in Philadelphia there is one crucial difference: the mortgage companies have no choice but to participate. They have to attend the conferences and negotiate in good faith or they cannot proceed with a sheriff’s sale.

Since the administration’s program was begun in March, it has been plagued by complaints of bureaucratic confusion and the indifference of mortgage companies. Many homeowners who have applied for loan modifications complain that their documents have been lost repeatedly or that they have been rejected without explanation.

Right to Mediation

The Philadelphia program forces an outcome by bringing together all the principals in one room. If the mortgage company proves intractable, the homeowner has the right to request mediation in front of a volunteer lawyer serving as a provisional judge, who relays recommendations to the program’s supervising judge. If the judge finds that the mortgage company is not acting in good faith, she can hold the house in limbo by denying permission for a sheriff’s sale.

While data is scant, a legal aid group, Philadelphia Volunteers for the Indigent Program, has complete information on 61 of the 309 cases it has resolved since October 2008 through the anti-foreclosure program. Only five resulted in sheriff’s sales, while 35 ended with loan modifications that lowered payments, the group says. The remaining 21 cases were divided among bankruptcies, loan forbearance and repayment arrangements, graceful exits and straightforward sales.

Some suggest the city’s program is plagued by the same basic defect as the Obama rescue plan: Nearly all the loans that have been modified have been altered on a trial basis, requiring homeowners to reapply for an extension of the terms after only a few months — a process that appears rife with obstacles, according to participants.

“There’s no teeth to the conciliation program,” said Matthew B. Weisberg, a Philadelphia lawyer who represents homeowners in cases involving alleged mortgage fraud. “It’s a largely ineffective stopgap prolonging what appears to be the inevitable, which is the loss of homes.”

Still, Mr. Weisberg grudgingly praised the plan.

“It’s arbitrary and unpredictable,” he said, “but it’s better than what anybody else is doing.”

Sheriff Delays Auction

 

Philadelphia’s Residential Mortgage Foreclosure Diversion Pilot Program began with a resolution passed by the City Council in March 2008, calling on Sheriff John D. Green to scrap the sheriff’s sale scheduled for April. Low-income neighborhoods were already experiencing a surge of foreclosures involving subprime loans given to people with tainted credit. With unemployment growing, lost paychecks were now pushing people into delinquency, reaching into middle-class and even wealthy neighborhoods. In early 2008, nearly 200 homes a month were being auctioned by the sheriff’s office, about one-third more than in 2006.

In West Philadelphia, Councilman Curtis Jones Jr., one of the sponsors of the resolution, watched his childhood neighborhood consumed by foreclosure, as the homes of working families — their porches once lined with flower pots — were boarded up with plywood.

“It becomes a blight on your entire community,” Mr. Jones said. “It creates an environment that fosters everything bad, from prostitution to drug dealing to wildlife, like raccoons taking over whole houses. One house becomes 10, and 10 becomes the whole block.”

In response to the resolution, Sheriff Green canceled the April sale. Meanwhile, Judge Annette M. Rizzo, who oversaw a local task force on stemming foreclosures, joined with the president judge of Philadelphia’s Court of Common Pleas to develop the program.

For Judge Rizzo, a high-energy woman who has long taken an interest in housing policy, the moratorium presented both a crisis and an opportunity. The sheriff was effectively refusing to fulfill his mandated responsibilities, leaving his office vulnerable to legal challenge. But if the mortgage companies could be persuaded to participate in an alternative way of addressing foreclosures, more people could stay in their homes.

“I realized we’re either going to go down in flames or we’re going to be a national model,” Judge Rizzo said. “We’re going to look at these cases and see what we can work out.”

Mr. Hall knew none of this. What he knew was that his life seemed to be unraveling.

Home to Four Generations

Ever since he was a teenager, he had earned a middle-class living with his hands. He had been raised by his grandfather in his three-bedroom house on Akron Street, in a predominantly Irish Catholic working-class neighborhood in Northeast Philadelphia.

He had attended St. Martin’s, the Catholic school around the corner, married his childhood sweetheart and still remained in his grandfather’s house, sending his own children — two boys (now in their 20s) and a 12-year-old girl — to the same school.

Mr. Hall, a soft-spoken yet intense man with a silver-tinged goatee, had worked seven days a week for much of this decade, bringing home weekly pay of about $1,000 — enough to build a deck in his backyard; enough to obtain a fixed-rate mortgage and buy the house for $44,000 when his grandfather succumbed to Alzheimer’s disease in the mid-1990s; enough for a motorcycle and a boat.

But three years ago, Mr. Hall committed the sort of mistake that has upended millions of households. At the recommendation of a for-profit credit counselor, he took out a new mortgage — a variable-rate loan from Countrywide Financial, which is now owned by Bank of America. He paid off some credit card debt, and he borrowed an extra $15,000 to renovate his home, expanding his mortgage balance to $63,000.

The loan began with manageable payments of about $500 a month. But Mr. Hall’s interest rate soon soared — something he says was never explained to him — lifting his payments to $950 a month.

“When I got the mortgage, I didn’t really understand it,” he said. “They told me this would improve my credit and that was it. It was just, ‘sign here,’ and ‘initial here.’ ”

No More Construction Work

He might still have managed had construction not come to a halt. By 2007, Mr. Hall’s employer was cutting work hours. In August 2008, it shut down, turning his $1,000 weekly paycheck into an $800 monthly unemployment check.

Every day, he set the alarm clock and headed to the union hall at 5 a.m., waiting and hoping for work. Every day, he went home, still jobless and discouraged, now confronting the displeasure of his wife, who worked as a nurse, and who he said never came to terms with their diminished spending power. After months of bickering, she left him last December, taking their daughter.

“She was saying, ‘How are we going to have Christmas? How are we going to go on vacation?’ ” he recalled. “She just seen it getting worse instead of better, and she got depressed.”

In January, his truck was repossessed, leaving him to walk through the winter dawn to the union hall for his daily ritual of defeat.

He watched the For Sale signs proliferating on his block, as mostly elderly neighbors found themselves unable to make their mortgage payments. He saw their belongings piled up on their front lawns as they abandoned their homes to foreclosure.

In September, the envelope finally landed with his default notice. A canvasser knocked on his door, proffering a flier urging him to call the city hot line. When he called, a housing counselor helped him assemble the paperwork for a loan modification and prepare for his conciliation conference.

When he arrived inside courtroom 676 in October, Mr. Hall carried a sheaf of wrinkled papers in a white plastic grocery bag. He occupied a solid wooden chair as an announcer called off cases for hearing. “Number 27, Wachovia Mortgage versus … .” A girl no older than 6, with flower-shaped plastic barrettes in her hair, fidgeted as her mother applied for legal representation.

Mr. Hall was struggling to come to terms with what he assumed was the end.

“I put my whole life into this house,” he said. “After I do all this work, they want to take it from me. You’ve got to regroup and move, but where? If I can’t pay my mortgage, how am I going to pay rent? And I have a whole house full of furniture.”

When he got the news that he had a few weeks’ reprieve, relief quickly gave way to the worry that had dominated his thoughts for months.

“It’s postponing the inevitable,” he said.

“I’m a man,” he kept saying, trying to make sense of how a lifetime of working on other people’s homes had put him here, staring at the potential loss of his own home; still hoping for relief.

“I don’t want no handouts,” he said. “I just want a reasonable loan that I can afford to pay so I can get on with my life.”

MERS History Re-Re-Revised

Several comments have been posted in addition to other information about MERS which is bringing the entire MERS issue over the brink of the absurd. Who, what where is MERS? Write in with your MERS stories. Take note that we are dealing with at least four entities that I am now aware of —MERS, MERSCORP, Mortgage Electronic Registration Systems, Inc., (note plural), Mortgage Electronic registration System, Inc. (note singular). Who are they? What are they in this shell game of “bankruptcy remote vehicles and why are the courts so deaf to the obvious implications of this game on the quality of title on each and every one of the 60 million homes that MERS alleges to have in its data base? Is our judiciary being run by politics — the one branch of government that is supposed to be independent of the executive and legislative branches that have been so useless in this crisis?

In a classic reverse of fortunes, the bad guys have taken control of the dialogue and using legal technicalities and their formidable size and names to impress the judge that it is the hapless borrower who is trying to get away with something on a legal technicality. In a perversion of lady justice, these people take homes that satisfy no obligation and keep the proceeds as a tip for keeping their mouths shut about the pornographic profits earned by Wall Street when these financial products were sold upstream to investors and down stream to homeowners. It is hush money to maintain the cone of silence about the huge profits earned on the down side when the mortgages went into default, just as they were always planned to do.

One reader writes in about Ohio: “I find it very interesting that here in Summit County Ohio, MERS USED to be listed as the Plaintiff in foreclosure actions within our court system. NOW, they are always listed as a Defendant. It’s like playing a game of MONOPOLY with my little brother here. When he found himself on the losing end of the game, he simply changed the rules.They CANNOT have it both ways.”
Another reader wrote in that in Florida the ONLY way MERS is registered to do business is as registered agent to receive service of process. If that is true their representations in hundreds of thousands of foreclosures has been false, fraudulent and flagrant. But of course we know that isn’t the only reason their representations have been false, fraudulent and flagrant.

Yet Minnesota seems to be sensitive to the banking interests, passing laws and interpreting statutes to give MERS status it was never meant to have. Bypassing those annoying provisions of the 5th and 14th amendment about due process, and 500 years of common law, they allow MERS to foreclose on a home and keep the house distributing the title and proceeds anyway it wants even though no MERS entity has EVER put one dime into the transaction and even though MERS is a total stranger to the transaction other than being named, without its knowledge but with its consent in tens of millions of real estate closings.

And California is allowing Judges to abandon 500 years of common law in allowing someone who is a stranger to the transaction to make claims at the cost, detriment and prejudice to the real parties to that transaction. Further, California continues to allow the procedural shell game in unlawful detainers wherein they use the law that was meant to be used in normal evictions and misapply to foreclosures in which the actors are impostors, blocking the homeowner from access to the courts or the right to be heard, and preventing the exercise of his/her rights to due process.

How do we know? Because if you go to the MERS website they tell you. And what they tell you is that they are a bankruptcy remote vehicle to be utilized in evading or avoiding laws on taxes, recordation, fees, and reporting. They tell the banks not to worry, they will never make a claim for the mortgage or the note or the obligation. They say they are only a bookkeeping service.

And from other sources we know they have about 17 employees, they have an automated attendant system to deputize anyone who knows how to access their system, and that ANYONE can sign as an officer of MERS even if none of the 17 people who work there ever heard of you or ever will hear of you.
It’s a shell game, and lawyers and Judges should be concentrating on this not because it is a legal technicality but because if we are a nation of laws, the protection of ALL interested parties should be our paramount concern. In each and every legal action neither the borrower nor the actual lender who advanced the cash for the loan is part of that equation.

In a classic reverse of fortunes, the bad guys have taken control of the dialogue and using legal technicalities and their formidable size and names to impress the judge that it is the hapless borrower who is trying to get away with something on a legal technicality. In a perversion of lady justice, these people take homes that satisfy no obligation and keep the proceeds as a tip for keeping their mouths shut about the pornographic profits earned by Wall Street when these financial products were sold upstream to investors and down stream to homeowners. It is hush money to maintain the cone of silence about the huge profits earned on the down side when the mortgages went into default, just as they were always planned to do.

This isn’t hard to understand. It is hard to accept. It is a challenge to us as citizens regardless of our political persuasions, to break up the oligopoly that controls Washington in BOTH political major parties and reinstate government for the people and by the people. I’m doing my part, what are you doing?

Audit Faults New York Fed in A.I.G. Bailout

Editor’s Note: In this article you have the nub of the problem for the investors, for the foreclosers, for the pretender lenders. What did the taxpayer actually pay for and what did they get for it? And if the money all went to pay off credit default swaps at 100 cents on the dollar then are those obligations to be considered paid or still outstanding, due and owing. And if they are still due and owing, to whom?

Remember that in addition to the windfall hidden yield spread premium between the aggregating pool and the SPV pool that amounted to as much as multiples of the loan amounts, these investment banks placed bets (credit default swaps) on the failure of those pools. These were pools they created (or that they had inside information on) and they “traded” with other investment houses (creating plausible deniability that they had done anything wrong). Based on the certainty that the pools would fail they purchased as many as 30 bets that the loan would fail and under the rules, they were allowed to collect 30 times the loss amount.

So that is why I have repeatedly said that the only incentive amongst the pretender lenders and all the other sharks posing as conduits or intermediaries, was to make certain that the loans went into default. Unless a solid percentage went into default, the credit default swaps didn’t pay off. Loan modifications don’t pay off, short-sales don’t pay off, settlements don’t pay off. Only defaults brings the ridiculous profits to the doorstep of these companies who are the only ones making money off this debacle. And the NY Fed either didn’t understand it or did understand it. Either way the NY Fed needs to be brought to task about this and the question of Geitner’s continued tenure as Treasury secretary needs to be addressed.

But this is not going to be settled in the court of public opinion. It is only going to be settled in the courts of competent jurisdiction. Somehow we have to get the message across that these people are making king’s ransoms off the defaulting loans and that they are taking the houses too as the cherry on top of their self-created gluttonous cake.

November 17, 2009

By MARY WILLIAMS WALSH

The Federal Reserve Bank of New York gave up much of its power in high-pressure negotiations with the American International Group’s trading partners last year, according to a government report made public on Monday.

Just two days before the New York Fed paid A.I.G.’s partners 100 cents on the dollar to tear up their contracts with the insurance giant, one bank volunteered to take a modest haircut — but it never got the chance.

UBS, of Switzerland, alone offered to give a break to the New York Fed in the negotiations last November over how to keep A.I.G. from toppling and taking other banks down with it. It would have accepted 98 cents on the dollar.

But UBS’s good-faith gesture was quickly drowned out by Goldman Sachs and the top French bank regulator. They argued, with others, that it would be improper and perhaps even criminal to force A.I.G.’s trading partners to bear losses outside of bankruptcy court.

The banks and the regulator were confident that the New York Fed was not willing to push A.I.G. into bankruptcy, because earlier in the fall the New York Fed had stepped in with $85 billion to prop up the insurer.

The New York Fed, led then by Timothy F. Geithner, who is now the Treasury secretary, therefore had little leverage in the negotiations, according to a post-mortem of what has emerged as the most inflammatory episode in the rescue of A.I.G.

The Fed “refused to use its considerable leverage,” Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, wrote in a report to be officially released on Tuesday, examining the much-criticized decision to make A.I.G.’s trading partners whole when people and businesses were taking painful losses in the financial markets.

There have been suggestions that the Fed chose to negotiate weakly, Mr. Barofsky said, to give a “backdoor bailout” to A.I.G.’s banks. He said Mr. Geithner and the Fed’s lawyers had denied this, but added that “irrespective of their stated intent,” there was no doubt about the result: “Tens of billions of dollars of government money was funneled inexorably and directly to A.I.G.’s counterparties.”

Among its notable findings, the report challenged Goldman’s position that it should not have been forced to bear losses on its dealings with A.I.G. because it had successfully hedged away any exposure. Mr. Barofsky said that Goldman’s hedges were unlikely to have held up amid the market turbulence of late last year.

A spokesman for Goldman took issue with that finding, saying that the bank believed it had, in fact, successfully hedged its exposure to A.I.G. up until the point in November when the Fed was seeking a way to terminate all the trading partners’ contracts with A.I.G.

He said any additional exposure to A.I.G.’s losses was a moot point, because the Fed’s intervention had eliminated the risk.

The report concluded that the Fed’s efforts to negotiate concessions from A.I.G.’s trading partners had no chance of success because of several crucial positions taken by the Fed.

First, the Fed considered itself a creditor of A.I.G., rather than a regulator that could impose its will on banks. It approached A.I.G.’s trading partners with a request for “voluntary” concessions. Mr. Barofsky said this differed from the government’s role in the auto industry, where it lent the car makers money but also negotiated aggressively and won substantial concessions from other creditors.

The Fed also decided it could not treat foreign banks differently from American banks, for fear of setting off foreign retaliation.

While seeking concessions from the various banks, the Fed contacted the Commission Bancaire, a French regulator, to request support in its negotiations with two French institutions, Société Générale and Calyon.

The Commission Bancaire responded “forcibly” that unless A.I.G. were in bankruptcy, the French banks were “precluded by law from making concessions and could face potential criminal liability” if they helped.

By that time, seven of the eight banks had also refused to grant concessions. Officials at the Fed then met with Mr. Geithner. The officials recommended that the Fed stop seeking concessions.

The report said Mr. Geithner did not recall being told one bank was willing to take a haircut, but did not challenge the account of those on his staff.

The report also shed new light on the effect the rating agencies had on the way the Fed handled the A.I.G. emergency. The company’s run-on-the-bank disaster began with a major credit downgrade in September; the Fed quickly responded with an $85 billion loan.

But because the Fed moved so quickly, it recycled a set of lending terms that had previously been devised for A.I.G. by lenders in the private sector. The interest rate was too high, given A.I.G.’s distress, and so the loan that was supposed to rescue the insurer ended up putting it at risk of a second credit downgrade. That, in turn, could have set off a second run-on-the-bank episode.

The Fed got caught in a no-win situation, the report said. While it might have been able to win concessions by threatening to withdraw support from A.I.G., it also ran the risk that the credit agencies would take the threat too seriously and impose another catastrophic downgrade.

Mr. Barofsky said the facts also undermined the Fed’s arguments that banking secrecy was an essential part of bank stability.

“The default position, whenever government funds are deployed in a crisis to support markets or institutions, should be that the public is entitled to know what is being done with government funds,” he said.

“The Prosperity Gospel”: Pastors Took Bribes From Mortgage Originators — $350 per subprime mortgage

And probably people “of the cloth” from all denominations.

We are a nation of faith. Jesus angrily drove the money lenders out of the temple. How can we stand by and allow the borrowers to be driven out of their homes?

The fact is most of these victims were hunted down like a foxhunt, with strangers knocking on doors, experts giving them quiet assurance of how wonderful their house was and how much it was worth, how wonderful it was that the bank would approve such generous terms (because they weren’t playing with their own money), and with undisclosed yield spread premiums of unimaginable size sometimes in multiples of the mortgage amount itself.

I have already spoken about how in Florida they hired and got licenses for 10,000 mortgage brokers to act as bird dog originators — all 10,000 of them were convicted felons, mostly for economic crimes, many of whom just got out of jail. Translation: they needed people who would be willing to lie in order to get borrowers to sign. Yet that was not enough. “One theme emerging from these suits is how banks teamed up with pastors to win over new customers for subprime loans.”

It is probably not politically correct and even offensive to say that American society has one faith in common: money. Belief in money and in particular that almighty dollar is something that all of us seem to converge on from disparate facets of life, class levels and religious faith. The protestant ethic on which our country supposedly rests, is all but dead. People who conduct their lives according to the principles of hard work, building a foundation of quality and prospering in the end usually are derided as old-fashioned or even naive in “today’s marketplace.”

If you really want to know why this nonsensical mortgage meltdown could occur, look no further. For all the cries of “shame” and demands for justice, our society, as a whole is doing virtually nothing about making sure it never happens again and in fact has already launched the next round of speculation based upon a government bailout of the losses when they occur.

It no longer matters if you work hard. It doesn’t matter if you are honest. It doesn’t even matter if what you do is successful. You will be paid a king’s ransom as long as you are playing “the game.” When the cards come tumbling down, it doesn’t matter — you are rich beyond your wildest dreams and even if you have nothing left to do, you don’t need to work anyway. The fact that tens of millions of people can’t work, are NOT rich, and have no income or safety net is of no concern. It isn’t that these people all lack conscience. The inconvenient truth is that they are following the rules of our society.

One recurring theme coming up in many lawsuits is “business Model” adopted by the Top Dogs (Bank of America, Countrywide, Wells Fargo etc.) who simply repeated the multilevel marketing schemes that proliferate across our great land in search of another unearned dollar.

I have already spoken about how in Florida they hired and got licenses for 10,000 mortgage brokers to act as bird dog originators — all 10,000 of them were convicted felons, mostly for economic crimes, many of whom just got out of jail. Translation: they needed people who would be willing to lie in order to get borrowers to sign. Yet that was not enough. “One theme emerging from these suits is how banks teamed up with pastors to win over new customers for subprime loans.”

Just look at how much trouble we are having distributing flu shots and getting people to accept the flu shot. Channels of every type and place imaginable are hawking the shots (which by the way I think is a good thing, and yes, I got one) at tens of thousands of outlets and delivery points. MERS says it has 60+ million mortgage transactions in its data records. How do you reach 60 million homeowners?

Well it turns out to be easy in country where the overwhelming majority of the populace are people of “faith.”

I invite you all to take a look at “Did Christianity Cause the Crash?” by Hanna Rosin published in the current issue of The Atlantic, December 2009 at page 39.

A Case in Point: Beth Jacobson, witness for the prosecution in City of Baltimore vs. Wells Fargo. Just the facts Ma’am. Virtually none of the mortgage “specialists” any of us spoke to over the phone had any education, training or experience in mortgages, finance or even bookkeeping. They were trained on how to look like they were experts. They would lie to you eye to eye. And they were rewarded. “Sometimes the bank would send a Hummer limo to pick up Jacobson for a celebration, she says. She’d arrive at a bar and find all her co-workers drunk and her boss “doing body shots off a waitress.”

Like any “good idea” (without any sens of “enough”) the marketing model of establishing sales channels through houses of worship was irresistible. After all, congregants were in a vulnerable mood when they went to church, they were easily pacified by their faith in their clergyman, and any “Wealth Now” seminar assumes an aura of both credibility at the least and mandate from God at most. And the Pastor, the Church or some “program” of the church would get a $350 “donation.” It didn’t take long for those in the congregation who were prospecting for the next person they could fool to get the point — bring subprime mortgage candidates to the bank and get paid $350 per mortgage. So if they did 10 mortgages per week, they earned themselves $3500 per week.

The results are well known, but not particularly flushed out. People who are living lives of quiet desperation under a mountain of debt they would never escape suddenly saw the jackpot. And so while the mortgage meltdown was in its hay day their income jumped from what had been $35,000 per year to an av erage of $350,000 per year. And after 2-3 years they were convinced that they now were big earners. When the crash occurred, they were slow to realize or believe that they were no six figure earners and they never were. They were low five figure earners, and those jobs were no longer available so now they would need unemployment or other public assistance.

What bothers me is not that people of the cloth are like anyone else — subject to temptation and possibly who got there because of the protection it provides for all sorts of deviants or corruption. N0, what bothers me is that even as mainstream media publishes these stories, the underlying assumption is that the mortgage mess is still MOSTLY the fault of consumers whose eyes were too big for their stomachs.

The fact is most of these victims were hunted down like a foxhunt, with strangers knocking on doors, experts giving them quiet assurance of how wonderful their house was and how much it was worth, how wonderful it was that the bank would approve such generous terms (because they weren’t playing with their own money), and with undisclosed yield spread premiums of unimaginable size sometimes in multiples of the mortgage amount itself. And yet the victims continue to be portrayed as gamers who lost. That bothers me because until we get all the facts out on the table, there never be a solution to this mess, this confabulation.

Until there is real understanding of the facts, we will continue to protect the large banks that are “too big to fail” and continue to ignore the plight of the common man and woman. As long as we persist, we will not rebuild the middle class. Without a stable prospering middle class, we are nothing. That’s the real irony. The wealth needs to be in the middle class to have society that survives itself. Legally I have no doubt that the wealth is there but it has not been claimed. Practically, until Judges and lawyers and homeowners “get it” they will continue to blame the “borrower” and let the pretender lender do body shots “off the waitress.”