“The Pendergrass limitation finds no support in the language of the statute codifying the parol evidence rule and the exception for evidence of fraud. It is difficult to apply. It conflicts with the doctrine of the Restatements, most treatises, and the majority of our sister-state jurisdictions. Furthermore, while intended to prevent fraud, the rule established in Pendergrass may actually provide a shield for fraudulent conduct. Finally, Pendergrass departed from established California law at the time it was decided, and neither acknowledged nor justified the abrogation. We now conclude that Pendergrass was ill- considered, and should be overruled.”
For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).
Editor’s Analysis and Practice Tips: In the decision Riverside Cold v Fresno-Madera the California Supreme Court stopped the banks dead in their tracks. Whereas they were able to prevent the borrower from introducing parole evidence (events outside the four corners of a document) the banks are now to be confronted in California and other states that will follow with the probability that their lies and illegal steering people into foreclosure are going to haunt them and defeat them.
We have heard for years how servicers and banks told homeowners to stop making their mortgage payments in order to qualify for mortgage modification. Then comes the lost papers 4-5 times and then comes the inevitable denial of a the mortgage modification — as though anyone had ever considered it and as though the investors were contacted for feedback. The fact is, as the future litigation will point out and reveal in all its splendor, the foreclosers were out to foreclose — not to settle, modify or otherwise resolve the situation.
They would string the borrower along until so many months of non-payment had piled up that between principal interest, taxes and insurance all but the most frugal borrower would be short on money and unable to reinstate. The result has been far lower proceeds from foreclosure than any other means of mitigating damages, and far more foreclosures than there needed to be. And it all started with misrepresentation, lies, deceit and fraud at closing, during he foreclosure process, during the so-called modification process and during the sale at auction, which prevented the homeowner from redeeming the property because the true balance was never disclosed.
All that changes with this very well-reasoned opinion. The Court clearly is beginning to see that the the without strict adherence to all the rules and all considerations of due process, the court system is being used as a vehicle for theft, fraud, forgery, fabrication and the destruction of people’s lives and livelihood.
“If we accept the Bank’s argument, then we are creating new law. Under the new law a borrower would owe money to a non-creditor simply because the non-creditor procured the borrower’s signature by false pretenses. The actual lender would be unable to retrieve money paid to the fake lender and the borrower would receive credit for neither his own payments nor any payment by a third party on the borrower’s behalf.” Neil F Garfield, livinglies.me
For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).
Barry Fagan submitted the Notice below.
Editor’s Notes: Fagan’s Notice gives a good summary of the applicable provisions of the Bill of Rights recently passed by California. The only thing I would add to the demands is a copy of all wire transfer receipts, wire transfer instructions or other indicia of funding or buying the loans. everything I am getting indicates that in most cases they can’t come up with it.
If you went into Chase and applied for a loan and they approved your application but didn’t fund it, you wouldn’t expect Chase to be able to sue you or start foreclosure proceedings for a loan they never funded. It’s called lack of consideration.
If you actually got the loan from BofA but they forgot to have you sign papers, you would still owe the money to them but it wouldn’t be secured because there was no mortgage lien recorded in their name. And BofA would have a thing or two to say to Chase about who is the real creditor — either the one or advanced the money or the one who got documents fraudulently or wrongfully obtained.
So then comes the question of whether Chase could assign their note and lien rights to BofA. If TILA disclosures had been made showing the relationship between the two banks, it might be possible to do so. But in these closings, the actual identity of the creditor (source of funds) was actively hidden from the borrower.
Thus we have a simple proposition to be decided in the appellate and trial courts: can a party who obtains signed loan documentation including a note and mortgage perfect the lien they recorded in the absence of any consideration. The floodgates for fraud would open wide if the answer were yes.
If the answer is NO, then the origination documents and all assignments, indorsements, transfers and allonges emanating from the original transaction without consideration are void. AND if each assignment or transfer recites that it is for value received, and they too had no money exchange hands thus producing lack of consideration, then they cannot even begin to assert themselves as a BFP (Bona Fide Purchaser for value without notice). The part about “without notice” is going to be difficult to sustain in proof since this was a pattern of table funded loans deemed “predatory per se” by Reg Z.
The reason they diverted the document ownership away from the creditor who actually advanced the money was to create the appearance of third party ownership (and transfers, which was why MERS was created) in the documentary chain arising out of the original of the non-existent loan (i.e., no money exchanged hands pursuant to the recitals on the note and mortgage as between the payor and payee). They needed the appearance of ownership was to create the appearance of an ownership and insurable interest.
Thus even though the money did not come from the originator, the aggregator or even the Master Servicer or Trustee of the pool, affiliates of the investment bank who underwrote and sold bogus mortgage bonds, were able (as “owners”) to purchase insurance, credit default swaps, and receive bailouts because they could “document” that they had lost money even though the reality was that the the third party source of funding, and the real creditors were actual parties suffering the loss.
Had those windfall distributions been applied to balances due to the owners of the mortgage bonds, the balance due from the bond would have been correspondingly reduced. AND if the balance due to the creditor had been reduced or paid in full, then the homeowner/borrower’s obligation to that creditor would have been extinguished entitling the homeowner to receipt of a note paid in full and a release of the mortgage lien (or at least cooperation in nullification of the imperfect mortgage lien).
PRACTICE TIP: Don’t just go after the documents that talk about the transaction by which they claim a liability exists from the borrower to one or more pretender lenders. Push for proof of payment in discovery and don’t be afraid to deny the debt, the note or the mortgage.
In oral argument before the Judge, when he or she asks whether you are contesting the note and mortgage, the answer is yes. When asked whether you are contesting the liability, the answer is yes – and resist the temptation to say why. The less said the better. This is why it is better preempt the pretender lenders with your own suit — because all allegations in the complaint must be taken as true for purposes of a motion to dismiss.
Don’t get trapped into disclosing your evidence in a motion to dismiss. If it is set for a motion to dismiss the sole question before the court is whether your lawsuit contains a short plain statement of ultimate facts upon which relief could be granted and all allegations you make must be assumed to be true. When opposing counsel starts to offer facts, you should object reminding the Judge that this is a motion to dismiss, it is not a motion for summary judgment and there are no facts in the record to corroborate the proffer by opposing counsel.
From Barry Fagan:
Re: Notice of “Material Violations” under California’s Newly Enacted Homeowners Bill of Rights pursuant to California Civil Code sections, 2923.55, 2924.12, and 2924.17. See attached and below
Reference is made to Wells Fargo’s (“Defendant”) December 13, 2012 response to Barry Fagan’s (“Plaintiff”) October 25, 2012 request for copies of the following:
(i) A copy of the borrower’s promissory note or other evidence of indebtedness.
(ii) A copy of the borrower’s deed of trust or mortgage.
(iii) A copy of any assignment, if applicable, of the borrower’s mortgage or deed of trust required to demonstrate the right of the mortgage servicer to foreclose.
(iv) A copy of the borrower’s payment history since the borrower was last less than 60 days past due.
Please be advised that I find Defendant’s response to be woefully defective. This letter is being sent pursuant to my statutory obligation to “meet and confer” with you concerning the defects before bringing an action to enjoin any future foreclosure pursuant to Civil Code § 2924.12.
Defendant’s are in violation of both the notice and standing requirements of California law, and the California newly enacted Homeowner Bill of Rights (“HBR”). In July 2012, California enacted the Homeowner Bill of Rights (“HBR”). Among other things, the HBR authorizes private civil suits to enjoin foreclosure by entities that record or file notices of default or other documentsfalsely claiming the right to foreclose. Civil Code § 2923.55 requires a servicer to provide borrowers with their note and certain other documents, if the borrowers request them.
Civil Code § 2924.17 requires any notice of default, notice of sale, assignment of deed of trust, or substitution of trustee recorded on behalf of a servicer in connection with a foreclosure, or any declaration or affidavit filed in any court regarding a foreclosure, to be “accurate and complete and supported by competent and reliable evidence.” It further requires the servicer to ensure it has reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose.
Civil Code § 2924.12 authorizes actions to enjoin foreclosures, or for damages after foreclosure, for breaches of §§ 2923.55 or 2924.17. This right of private action is “in addition to and independent of any other rights, remedies, or procedures under any other law. Nothing in this section shall be construed to alter, limit, or negate any other rights, remedies, or procedures provided by law.” Civil Code § 2924.12(h). Any Notice of Default, or Substitution of Trustee recorded on Plaintiffs’ real property based upon a fraudulent and forged Deed of Trust shall be considered a “Material Violation”, thus triggering the injunctive relief provisions of Civil Code § 2924.12 & § 2924.17(a) (b).
I therefore demand that Wells Fargo Bank, N.A. provide Barry Fagan with the UNALTERED original Deed of Trust along with the ORIGINAL Note, as the ones provided by Kutak Rock LLP on October 13, 2011 to Ronsin Copy Service were both photo-shopped and fraudulent fabrications of the original documents, thus not the originals as ordered to be produced by Judge Tarle under LASC case number SC112044. Attached hereto and made a part hereof is the October 13, 2011 Ronsin Copy Service Declaration with copies of the altered and photo-shopped Note and Deed of Trust concerning real property located at Roca Chica Dr. Malibu, CA 90265.
Judge Karlan under LASC case number SC117023 “DENIED” Wells Fargo’s Request for Judicial Notice of the very same Deed of Trust, Notice of Default, Substitution of Trustee and the Notice of Rescission concerning real property located at Roca Chica Dr. Malibu, CA 90265. Attached hereto and made a part hereof is the relevant excerpt of Judge Karlan’s October 23, 2012 Court Order along with a copy of Wells Fargo’s Request for Judicial Notice of those very same documents. Court Order: REQUEST FOR JUDICIAL NOTICE “DEFENDANT’S REQUEST FOR JUDICIAL NOTICE IS DENIED AS TO EXHIBITS A, B, C, D, K, L, & M.”
As a result of the above stated facts, please be advised that the fraudulently altered deed of trust and photo-shopped Note that you claim to have been previously provided to Barry Fagan shall not be considered in compliance with section 2923.55 and therefore Wells Fargo Bank, N.A. has committed a “Material Violation” under California’s Newly Enacted Homeowners Bill of Rights pursuant to Civil Code sections, 2923.55, 2924.12, and 2924.17 (a) (b).
For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).
Hat tip to Darrel Blomberg who brought Mandelman’s article (below) to my attention.
Editor’s Analysis: In case you you ever wondered where that expression came from, it is pretty simple. It was once the practice to allow the man to bathe first, then the wife then the children in order of their age — all in the same tub without changing the water. By the end of this process the water was so murky that it was actually possible to throw the baby out with the bathwater.
The banks are attempting every maneuver to keep the mortgage and foreclosure process as murky as possible with considerable success, especially when it comes to modification where they are required to “consider” modifications although they are not required to accept a modification proposal.
The truth is they don’t consider it, they intentionally “lose” the paper work a half dozen times before they realize that the person is likely to escalate to litigation, and then they send a notice of rejection.
This rejection, few people realize, is subject to challenge if your allegation is that they rejected it without considering it. If your allegations contain proper pleading about the details you submitted with your modification proposal, including the proceeds to investor under your plan versus foreclosure, and it is an obvious no-brainer, I have evidence that such suits are settled very quickly usually along the same terms as those proposed in the original modification proposal from the borrower.
Now it is true that hundreds of companies have started claiming to do modifications without being able to spell it, and without any license that provides any evidence that they know anything about property rights, mortgages, notes, lending, HARP, HAMP, TARP, TILA or RESPA and it is equally true that these bogus companies have compounded predatory lending with predatory services (fraud). So the states have enacted various laws that ignore the real problem and did what the banks want — prevent access to those who are licensed and who can effectively advocate for their client, before, during or after modification attempts, foreclosure or eviction.
The basic thrust of most such laws is to prevent any such company from collecting fees until the end of their services which means that such companies would need to invest in a mortgage deal, the benefits of which go solely to their client.
The proper way of handling this is through the existing web of lawyers, HUD counselors, realtors etc. who are all properly regulated and if they charge fees that are too high or fail to do the work, their license if disciplined with fines, suspension and even revocation. There are hundreds of thousands of such professionals around that would gladly assist homeowners, but who have no interest in loaning the expenses of representation to clients whom they barely know.
California has now extended this idiotic approach to lawyers as well, which means if the retainer smells like there is a modification possible, they are not allowed to charge any fees until the end. This obviously denies the homeowner from access to counsel, access to the courts, due process and equal protection under the law. Hopefully that rule, passed around November 12, 2012 will be brought before the California Supreme Court will be treated summarily. It’s bad for homeowners, lawyers, and all other licensed professionals who could provide valuable services in litigation, settlements, modifications, short-sales and wrongful foreclosure suits.
So right now, in California, the banks and pretender lenders can all use attorneys, realtors and others and pay then up front, salary, or anything else but the people against whom they are pressing illegal foreclosures are not allowed to hire such professionals because it could end up in a modification, which everyone agrees is the proper end to this mess.
PRACTICE HINT: Any lawyer or group of lawyers may file a rule challenge which MUST go to administrative hearing and then (after exhaustion of administrative remedies) can go to court for contest or confirmation. Hearing officers are not ordinarily allowed to rule on constitutional issues, so you’ll end up in court pretty quick.
For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).
Editor’s Comment: We have seen some of these stories before. What is disconcerting is that the press is not getting the point — some homeowners are winning their cases and getting their house free and clear. The reason is simple: if you try to make the case that you should get a free house, then you are going to lose. But if you attack the would-be forecloser where it hurts, then your chances of getting a favorable result are immeasurably increased. Mark Stopa got 14 Judges to (a) deny the forecloser’s motion for summary judgment and (b) grant final summary judgment to the homeowner. It does happen.
In the final analysis the strategy and tactics are the same as in any civil case — deny each and every allegation that you know is absolutely true, like your name. If you don’t know if the note and mortgage are legitimate or if they are showing a copy of the note and mortgage (or deed of trust) that might be fabricated, deny it. The burden is on the party seeking affirmative relief. Too many times, I see homeowners and attorneys give away the store when they are asked whether there is any issue about the obligation, note or mortgage. Their reply is no “but”….
The fact is there is no “but.” You either deny their right to foreclose or you admit it. If you admit it, then all the argument in the world won’t allow you to win. The Judge has no choice but to allow the foreclosure if your admission, tacit or expressed, goes to all the elements required for a foreclosure.
For reasons that I do not understand the same lawyer that will summarily deny virtually all allegations in the complaint for anything other than a foreclosure action, will be very timid and uncertain about denying allegations and validity of the exhibits in a foreclosure. If you attack the foreclosure after admitting that the elements are there based upon UCC or other arguments attacking the documentary trail, you will most likely lose — unless you accidentally stumble upon an argument that deals with the money trail.
That is why I am continually pushing lawyers and pro se litigants to get advice from lawyers that allows them to deny the validity of the allegations of a judicial foreclosure and deny the validity and authenticity of the substitution of trustee, notice of default and notice of sale in the non-judicial states.
Say as little as possible. The more you allege, the more the burden is on you to prove things that only the other side has in the way of information. I have previously posted an article about that.
The judicial doctrine applies that where the information is exclusively in the care, custody and control of the the opposing side then the mere allegation from you will be sufficient to shift the burden of persuasion onto the forecloser — and their case generally will collapse.
Jacksonville Business Journal by Michael Clinton, Web Producer
In a strange twist of events, a St. Augustine woman has filed foreclosure on a local branch of Wells Fargo after a judge ruled she could keep her home.
The bank tried to foreclose on Rebecca Sharp’s home, but a judge ruled she could keep it and the bank owed her nearly $20,000 for attorney’s fees — eight months later, the bank still hasn’t paid, Action News Jax reports.
“Foreclosure cases are based on borrowers not paying bills. Now, Wells Fargo has not paid its bills. There’s an irony there,” Sharp’s attorney Tom Pycraft told Action News.
Editor’s Comment: Barry Fagan is pulling out the stops and challenging the CA AG to do her job. I am surprised that those who specialize in administrative law have not used the presumed findings of several Federal and State agencies as to a pattern of conduct that is fraudulent and which requires forgery to proffer in court and perjury to testify as to the foundation that would authenticate the invalid documents. Such administrative findings usually carry a presumption of validity.
Here Barry takes it one step further. He is using one specific case and the documents pertaining to only that case to raise the issues that clearly accuse Wells Fargo of criminal misconduct. Such conduct is the custom and practice of the entire foreclosure industry. Notice that I didn’t say the “mortgage industry,” because the foreclosure industry is predicated on getting a deed on foreclosure based upon a false credit bid from a party who neither funded nor purchased the loan.
CALIFORNIA ATTORNEY GENERAL COMPLAINT
CALIFORNIA SENATE BILL NO. 1474 RE: CONVENING GRAND JURY FOR MORTGAGE FRAUD Barry S Fagan
Malibu, California 90265 Complaint Against:
Wells Fargo Bank, N.A.
420 Montgomery Street
San Francisco, California 94104 COMPLAINT
As an Officer of the Court, I am under a continuing obligation to inform both the Court and Law Enforcement of Fraud and Perjury. As a result, I have retained Dr. Laurie Hoeltzel a forensic document examiner with over 20 years of forensic document analysis experience to confirm that three different versions of the same deed of trust exists for my primary residence and on May 11, 2012.
I recorded all three versions of the same deed of trust with the Los Angeles Registrar Recorders Office under instrument no. 2012-0711277. DOCUMENT FRAUD
Wells Fargo Bank has fraudulently altered Barry Fagan’s Deed of Trust and the attached expert opinion dated 1/12/2012 from Forensic Document Examiner Dr. Laurie Hoeltzel specifically explains that the handwritten page 4 has been altered on two separate versions of that original Deed of Trust. Dr. Laurie Hoeltzel makes the following findings of fact with respect to the LA Registrar Recorder’s ‘original office record’.
“Based upon my initial preliminary analysis of the above items, it appears more than one person authored the number 4 on all three documents, which purports to be the same document.” The recorded Notice of Pendency of Action shows three different versions of that same July 9, 2007 Deed of Trust as originally recorded under instrument no. 2007-1622100 and I have submitted credible evidence from a forensic document examiner with over 20 years of experience that multiple fraudulent alterations have occurred on the “Handwritten Number page 4” which is located on page 3/4 of the Deed of Trust.
All of the Deeds of Trust now reflect an entirely different handwritten NUMBER 4, and one of the exhibits also has a snake like line drawn on it, which is not present on the other two exhibits. ACCOUNTING
C.P.A. Shawn P. Adamo stated: “It is my professional opinion that the altered deed of trust is concealing an irrevocable assignment, and explains why Wells Fargo is unable to produce loan level accounting concerning Mr. Fagan’s loan. Wells Fargo claims that any level of detail relating to Mr. Fagan’s mortgage is non- existent. As a result, CPA Shawn Adamo provided two expert opinions, one an affidavit signed under penalty of perjury dated January 24, 2012 and the other is a Feb. 6, 2012 complaint letter addressed to various regulatory agencies. In those two expert opinions, C.P.A Shawn Adamo explains that Wells Fargo Bank has failed to provide a loan level balance sheet accounting and is concealing the fact that they do not own Barry Fagan’s loan. ROBO-SIGNING
Additionally, forensic document Expert Dr. Laurie Hoeltzel has declared under penalty of perjury on January 2, 2012 that Wells Fargo Bank is robo-signing Discovery Responses by using multiple authors of the name Rhonda Bernard Thomas. CONCLUSION
Insofar as Wells Fargo Bank, NA is a loan servicer, it cannot enforce the note in its own right in that according to the information in the documents and the information available through discovery and expert opinions, the loan is owned by an undisclosed investor with which Wells Fargo has concealed and not established its relationship to.
Wells Fargo as the alleged servicer must, in addition to establishing the rights of the true holder, identify itself as an authorized agent for the INVESTOR.
If Wells Fargo Bank is compelled by law enforcement to comply with either of the obligations described above it will subject them (Wells Fargo) to a finding of perjury!
Wells Fargo is a criminal enterprise that is attempting to exercise rights over my primary residence by way of fraudulently altered documents, robo-signed discovery responses, no loan level accounting and Barry Fagan’s loan file needs to be investigated at the highest level within your organization to see that a crime has actually occurred!
The law offices of Kutak Rock LLP located in Irvine, California needs to have Barry Fagan’s Note and Deed of Trust subpoenaed so that the GRAND JURY can inspect those documents to see that they have indeed been fraudulently altered and photo-shopped.
Barry Fagan Esq. CALIFORNIA SENATE BILL No. 1474
Approved by Governor September 25, 2012
SB 1474, Hancock. Grand jury proceedings: Attorney General: powers and duties.
Existing law authorizes the Attorney General to convene the grand jury to investigate and consider certain criminal matters. The Attorney General is authorized to take full charge
of the presentation of the matters to the grand jury, issue subpoenas, prepare indictments, and do all other things incident thereto to the same extent as the district attorney may do.
LivingLies Membership – If you are not already a member, this is the time to do it, when things are changing.
For Customer Service call 1-520-405-1688
If more people from all walks of life came to life in California and across the country, the changes would happen. The reasons these protesters are right is that they got screwed on loans that, thanks to Wall Street chicanery, have already been paid several times over. This is an opportunity for government to step in and save the day for homes, businesses, counties and cities who were all duped into these crazy loans based upon fictitious figures used in fraudulent calculations. It is obvious that these criminal acts are tearing apart our country, ruining our economy and destroying hope and prospects fro the future. Even if you think these homeowners are getting an undeserved “windfall” you should STILL be supporting them because (a) they are the victims of fraud and entitled to restitution and (b) it’s going to hit you one way or the other in the pocket book.
Which would YOU rather have — satisfaction of the doctrine of personal responsibility on facts which you know virtually nothing about (even Allan Greenspan admitted he couldn’t understand these derivative mortgages) OR would rather have a healthy economy with stores opening and money flowing. It’s your choice. I could understand why the 1% would be against giving these people a break even though they are going to get hit too by the decline in the economy, but for people who are one paycheck from eviction to oppose this on some ideological fiction based upon the wrong facts is just plain stupid.
Why would you want the banks, who already received $17 trillion (minimum) to get even more money when the total of all mortgages is only $13 trillion? If you hate these banks why are you supporting them with the false ideology of personal responsibility?
The figures keep coming in while the words keep coming out the mouths of bankers and realtors. The figures don’t match the words. The net result is that the facts show that we are literally drowning in debt, and we see what happens as a result of such conditions with a mere glance at Europe. They are sinking like a stone, and while we look prettier to investors it is only when we are compared to other places — definitely not because we have a strong economy.
Iceland and other “players” crashed but stayed out of the EU and stayed away from the far flung central banking sleeping arrangements with Banks. Iceland knows that banks got us into this and that if there is any way out, it must be the banks that either lead their way out or get nationalized so their assets can take the hit of these losses. In Phoenix alone, we have $39 BILLION in negative equity.
This negative equity was and remains illusory. Iceland cut the household debt in each home by 25% or more and is conitinuing to do so. The result? They are the only country with the only currency that is truly recovering and coming back to real values. What do we have? We have inflated property appraisals that STILL dominate the marketplace.
The absence of any sense of reality is all around us in Arizona. I know of one case where Coldwell Banker, easily one of the most prestigious realtors, actually put lots up for sale asking $40,000 when the tax assessed value is barely one quarter of that amount and the area has now dried up — no natural water supply without drilling thousands of feet or hauling water in by truck. Residents in the area and realtors who are local say the property could fetch at most $10,000 and is unsalable until the water problem is solved. And here in Arizona we know the water problem is not only not going to get solved, it is going to get worse because of the “theory” of global climate change.
This “underwater” mess is political not financial. It wouldn’t exist but for the willingness of the government to stay in bed with banks. The appraisals they used to grant the loan were intentionally falsified to “get rid of” as much money as possible in the shortest time possible, to complete deals and justify taking trillions of dollars from investors. The appraisals at closing were impossibly high by any normal industry accepted standard and appraisers admit it and even predicted it it in 2005. Banks coerced appraisers into inflating appraisers by giving them a choice — either come in with appraisals $20,000 over the contract price or they will never get work again.
The borrower relied upon this appaisal, believing that the property value was so hot that he or she couldn’t lose and that in fact, with values going so high, it would be foolish not to get in on the market before it went all the way out of reach. And of course there were the banks who like the cavalry came in and provided the apparently cheap money for people to buy or refinance their homes. The cavalry was in a movie somewhere, certainly not in the marketplace. It was more like the hordes of invaders in ancient Europe chopping off the heads of men, women and children and as they lie dying they were unaware of what had happened to them and that they were as good as dead.
So many people have chosen death. They see the writing on the wall that once was their own, and they cannot cope with the loss of home, lifestyle and dignity. They take their own lives and the lives of those around them. Citi contributes a few million to a suicide hotline as a PR stunt while they are causing the distress through foreclosure and collection procedures that are illegal, fraudlent, and based upon forged, robosigned documents with robo-notarized attestations that the recording offices still won’t reject and the judges still accept.
There is no real real economic recovery without reality in housing. Values never went up — but prices did. Now the prices are returning back to the values left in the dust during the big bank push to “get rid of” money advanced by investors. It’s a game to the banks where the homeowner is the lowly deadbeat, the bottom of the ladder, a person who doesn’t deserve dignity or relief like the bank bailouts. When a person gets financial relief from the government it is a “handout.” When big banks and big business get relief and subsidies in industries that were already profitable, it is called economic policy. REALITY CHECK: They are both getting a “handout” and economic policy is driven by politics instead of common sense. French arisocrats found that out too late as their heads rolled off the guillotine platforms.
But Iceland and other places in the world have taught us that in reality those regarded as deadbeats are atually people who were herded into middle class debt traps created by the banks and that if they follow the simple precept of restoring victims to their previous state, by giving restitution to these victims, the entire economy recovers, housing recovers and everything resumes normal activity that is dominated by normal market forces instead of the force of huge banks coercing society and government by myths like too big too fail. The Banks are doing just fine in Iceland, the financial system is intact and the government policy is based upon the good of the society as a whole rather the banks who might destroy us. Appeasement is not a policy it is a surrender to the banks.
Cities with the Most Homes Underwater
Michael B. Sauter
Mortgage debt continues to be a major issue in the United States, nearly six years after home prices peaked, according to a report released Thursday by online real estate site Zillow. Americans continue to owe more on their homes than they are worth. Nearly one in three mortgages are underwater, amounting to more than 15 million homes and a total negative equity of $1.19 trillion.
In some of America’s largest metropolitan regions, however, the housing crash dealt a far worse blow. In these areas — most of which are in California, Florida and the southwest — home values were cut in half, unemployment skyrocketed, and 50% to 70% of borrowers now find themselves with a home worth less than the value of their mortgage. 24/7 Wall St. reviewed the 100 largest housing markets and identified the 10 with the highest percentage of homes with underwater mortgages. Svenja Gudell, senior economist at Zillow, explained in an interview with 24/7 Wall St. that the markets with the highest rates of underwater borrowers are in trouble now because of the rampant growth seen in these cities prior to the recession. Once home prices peaked, which was primarily in late 2005 through 2006, all but one of these 10 housing markets lost at least 50% of their median home value.
Making matters worse for families with high negative equity in these markets is the increased unemployment. “If you have a whole lot of unemployment in an area, you’re more likely to see home values continue to decline in the area as well,” says Gudell. While in 2007 many of these markets had average or below average unemployment rates, the recession took a heavy toll on their economies. By 2011, eight of the 10 markets had unemployment rates above 10%, and three — all in California — had unemployment rates of above 16%, nearly double the national average.
24/7 Wall St. used Zillow’s first-quarter 2012 negative equity report to identify the 10 housing markets — out of the 100 largest metropolitan statistical areas in the country — with the highest percentage of underwater mortgages. Zillow also provided us with the decline in home values in these markets from prerecession peak values, the total negative equity value in these markets and the percentage of homes underwater that have been delinquent on payments for 90 days or more.
These are the cities with the most homes underwater.
10. Orlando, Fla. > Pct. homes w/underwater mortgages: 53.9% > Number of mortgages underwater: 205,369 > Median home value: 113,800 > Decline from prerecession peak: -55.9% > Unemployment rate: 10.4% (25th highest)
In 2012, Orlando moved into the top 10 underwater housing markets, bumping Fresno, Calif., to number 11. From its prerecession peak in June 2006, home prices fell 55.9% to $113,800, a loss of roughly $90,000. In 2007, the unemployment rate in the region was just 3.7%, the 17th-lowest rate among the 100 largest metros. By 2011, that rate had increased to 10.4%, the 25th highest. As of the first quarter of this year, there were more than 205,000 underwater mortgages in the region, with total negative equity of $16.7 billion.
9. Atlanta, Ga. > Pct. homes w/underwater mortgages: 55.5% > Number of mortgages underwater: 581,831 > Median home value: $107,500 > Decline from prerecession peak: 38.8% > Unemployment rate: 9.6% (37th highest)
Atlanta is the largest city on this list and the eighth-largest metropolitan area in the U.S. But of all the cities with the most underwater mortgages, it has the lowest median home value. In the area, 55.5% of homes have a negative equity value. With more than 500,000 homes with underwater mortgages, the city’s total negative home equity is in excess of $38 billion. Over 48,000 of these underwater homeowners, or nearly 10%, are delinquent by at least 90 days in their payments, which is also especially troubling. With home prices down 38.8% since June, 2007, the Atlanta area certainly qualifies as one of the cities hit hardest by the 2008 housing crisis.
8. Phoenix, Ariz. > Pct. homes w/underwater mortgages: 55.5% > Number of mortgages underwater: 430,527 > Median home value: $128,000 > Decline from prerecession peak: 54.2% > Unemployment rate: 8.6% (44th lowest)
At 55.5%, Phoenix has the same percentage of borrowers with underwater mortgages as Atlanta. Though Phoenix’s median home value is $21,500 greater than Atlanta’s, it experienced a far-greater decline in home prices from their prerecession peak in June 2007 of 54.2%. This has led to a total negative equity value of almost $39 billion. The unemployment rate also has skyrocketed in the Phoenix area from 3.2% in 2007 to 8.6% in 2011.
7. Visalia, Calif. > Pct. homes w/underwater mortgages: 57.7% > Number of mortgages underwater: 33,220 > Median home value: $110,500 > Decline from prerecession peak: 51.7% > Unemployment rate: 16.6% (3rd highest)
Visalia is far smaller than Atlanta or Phoenix and has less than a 10th the number of homes with underwater mortgages. Nonetheless, the city has been especially damaged by a poor housing market. Home values have fallen dramatically since before the recession, and the unemployment rate, at 16.6% in the first quarter of 2012, is third-highest among the 100 largest metropolitan statistical areas, behind only Stockton and Modesto. Presently, almost 58% of homes are underwater, with these homes carrying a total negative equity of $2.6 billion dollars.
6. Vallejo, Calif. > Pct. homes w/underwater mortgages: 60.3% > Number of mortgages underwater: 44,526 > Median home value: $186,200 > Decline from prerecession peak: 60.6% > Unemployment rate: 11.4% (16th highest)
In the Vallejo metropolitan area, more than 60% of the region’s 73,800 homeowners are underwater. This is largely due to a 60.6% decline in home values in the region from prerecession highs. Through the first quarter of this year, homes in the region fell from a median value of more than $300,000 to just $186,200. Of those homes with underwater mortgages, more than 10% have been delinquent on mortgage payments for 90 days or more.
5. Stockton, Calif. > Pct. homes w/underwater mortgages: 60.3% > Number of mortgages underwater: 60,349 > Median home value: $146,500 > Decline from prerecession peak: 64.3% > Unemployment rate: 16.8% (tied for highest)
With an unemployment rate of 16.8%, Stockton is tied for the highest rate among the 100 largest metropolitan areas. Few cities have been hit harder by the sinking of the housing market than Stockton, where 60.3% of home mortgages are underwater. Though there are only 100,014 houses with mortgages in Stockton, 60,348 of these are underwater and have a total negative home equity of slightly more than $6.9 billion. Meaning, on average, homeowners in Stockton owe at least $100,000 more than their homes are worth.
4. Modesto, Calif. > Pct. homes w/underwater mortgages: 60.3% > Number of mortgages underwater: 46,598 > Median home value: $130,600 > Decline from prerecession peak: 64.5% > Unemployment rate: 16.8% (tied for highest)
Since peaking in December 2005, home prices in Modesto have plunged 64.5%. This is the largest collapse in prices of any large metro area examined. As a result, 46,598 of 77,222 home mortgages in Modesto are underwater. Meanwhile, the unemployment rate rose to 16.8% in 2011. This number was 7.9 percentage points above the national average of 8.9% and almost double Modesto’s 2007 unemployment rate of 8.7%.
3. Bakersfield, Calif. > Pct. homes w/underwater mortgages: 60.5% > Number of mortgages underwater: 70,947 > Median home value: $116,700 > Decline from prerecession peak: 57.0% > Unemployment rate: 14.9% (5th highest)
From its peak in May 2006, the median home value in Bakersfield has plummeted from more than $200,000 to just $116,700, or a 57% loss of value. From 2007 through 2011, the unemployment rate increased from 8.2% to 14.9% — the fifth-highest rate in the country. To date, more than 70,000 homes in the region have underwater mortgages, with total negative equity of just over $6 billion.
2. Reno, Nev. > Pct. homes w/underwater mortgages: 61.7% > Number of mortgages underwater: 46,115 > Median home value: $150,600 > Decline from prerecession peak: 58.3% > Unemployment rate: 13.1%
There are fewer than 75,000 households in Reno, Nevada. Yet 46,115 home mortgages in the city are underwater, accounting for 61.7% of mortgaged homes. From January 2006 through the first quarter of 2012, home prices were more than halved, and negative home equity reached $4.39 billion. Additionally, the unemployment rate almost tripled in rising from 4.5% in 2007 to 13.1% by 2011. In 2007, Reno had the 54th-worst unemployment rate among the 100 largest metros. By 2007, Reno had the eighth-worst unemployment rate.
1. Las Vegas, Nev. > Pct. homes w/underwater mortgages: 71% > Number of mortgages underwater: 236,817 > Median home value: $111,600 > Decline from prerecession peak: 63.2% > Unemployment rate: 13.9%
At 71%, no city has a greater percentage of homes with underwater mortgages than Las Vegas. The area with the second-worst percentage of underwater mortgages, Reno, has less than 62% mortgages with negative. The corrosive effects the housing crisis had on Las Vegas are evident in the more than 200,000 home mortgages that are underwater, 14.3% of which are at least 90 days delinquent on payments. Additionally, home values have dropped 63.2% from their prerecession peak, the third-greatest decline among the nation’s 100 largest metropolitan areas. Largely because of the collapse of the area’s housing market, unemployment in the Las Vegas area has soared. In 2007, the unemployment rate was 4.7%, only marginally different from the nation’s 4.6% rate. Yet by 2011, the unemployment rate had increased to 13.9%, considerably higher than the nationwide 8.9% unemployment rat.e.
The general consensus is that the homeowner borrowers are simply at the bottom of the food chain, not worthy of dignity, respect or any assistance to recover from the harm caused by Wall Street. Now small as it is, the banks have partially settled the matter by an agreement that bars the states from pursuing certain types of claims conditioned on several terms, one of which was the payment of money from the banks that presumably would be used to fund programs for the beleaguered homeowners without whose purchasing power, the economy is simply not going to revive. Not only are many states taking the money and simply putting it into general funds, but Arizona, over the objection of its own Attorney General is taking the money and applying to pay for prison expenses.
Here is the sad punch line for Arizona. The prison system in that state and others is largely “privatized” which is to say that the state “hired” new private companies created for the sole purpose of earning a profit off the imprisonment of the state’s citizens. Rumors abound that the current governor has a financial interest in the largest private prison company.
The prison lobby has been hard at work ever since privatizing prisons became the new way to get rich using taxpayers dollars. Not only are we paying more to house more prisoners because the laws a restructured to make more behavior crimes, but now our part of the housing settlement is also going to the prisons. Another bailout that was never needed or wanted. Meanwhile the budget of Arizona continues to rise from incarcerating its citizens and the profiteers (not entrepreneurs by any stretch of the imagination) are getting a gift of more money from the state out of the multistate settlement.
Only 27 states have devoted all their funds from the banks to housing programs, according to a report by Enterprise Community Partners, a national affordable housing group. So far about 15 states have said they will use all or most of the money for other purposes.
In Texas, $125 million went straight to the general fund. Missouri will use its $40 million to soften cuts to higher education. Indiana is spending more than half its allotment to pay energy bills for low-income families, while Virginia will use most of its $67 million to help revenue-starved local governments.
Like California, some other states with outsize problems from the housing bust are spending the money for something other than homeowner relief. Georgia, where home prices are still falling, will use its $99 million to lure companies to the state.
“The governor has decided to use the discretionary money for economic development,” said a spokesman for Nathan Deal, Georgia’s governor, a Republican. “He believes that the best way to prevent foreclosures amongst honest homeowners who have experienced hard times is to create jobs here in our state.”
Andy Schneggenburger, the executive director of the Atlanta Housing Association of Neighborhood-Based Developers, said the decision showed “a real lack of comprehension of the depths of the foreclosure problem.”
The $2.5 billion was intended to be under the control of the state attorneys general, who negotiated the settlement with the five banks — Bank of America, Wells Fargo, JPMorgan Chase, Citigroup and Ally. But there is enough wiggle room in the agreement, as well as in separate terms agreed to by each state, to give legislatures and governors wide latitude. The money can, for example, be counted as a “civil penalty” won by the state, and some leaders have argued that states are entitled to the money because the housing crash decimated tax collections.
Shaun Donovan, the federal housing secretary, has been privately urging state officials to spend the money as intended. “Other uses fail to capitalize on the opportunities presented by the settlement to bring real, concerted relief to homeowners and the communities in which they live,” he said Tuesday.
Some attorneys general have complied quietly with requests to repurpose the money, while others have protested. Lisa Madigan, the Democratic attorney general of Illinois, said she would oppose any effort to divert the funds. Tom Horne, the Republican attorney general of Arizona, said he disagreed with the state’s move to take about half its $97 million, which officials initially said was needed for prisons.
But Mr. Horne said he would not oppose the shift because the governor and the Legislature had authority over budgetary matters. The Arizona Center for Law in the Public Interest has said it will sue to stop Mr. Horne from transferring the money.
“MERS Cannot be and in fact is not the beneficiary of the
DOT. There is no named beneficiary in the SOT and ANY and ALL beneficiaries
must be named in the SOT. Therefore the SOT (and consequently the NTS) is
seriously defective and void as an instrument to be implemented to supplant
Appellant from his property.”
“Countrywide was an active conspirator as it allowed BondCorp to utilize its
technological assets, its underwriting resources, account numbering system and
other aids and benefits to entrap Appellant into a loan that was damaging, stated
the wrong parties and took illegal and undisclosed fees.”
EDITOR’S NOTE: The 9th Circuit is inching closer and closer to an outright statement that the foreclosures were fraudulent and illegal. And for the first time it is taking issue with the appointment by Bank of America of ReContrust as “trustee” under the deed of trust. Clearly the replacement of the court system with a qualified trustee was intended to expedite due process, not eliminate it. Every time a substitution of trustee is executed it raises the high probability that the would-be forecloser is appointing itself as the trustee in order to escape the reality that it is not a creditor or proper holder of the loan.
“MERS, something of a phantom entity and ReconTrust, subsidiary of BAC and not an independent entity, acting in BAC/BANA/Countrywide’s interests, now are trying to come in and clean up themess made by the fraudulent DOT and Note by BondCorp in a conspiracy with Countrywide, not because they are any real beneficiary and have or will experience any real loss, but rather to gain substantial fees from the SARM 2005-19XS Trust for foreclosing on Appellant’s property.
It is truly curious as to why the proper parties in this matter are not named and Appellant posits that other, unrelated legal actions are likely a reason. That said, Appellant has shown good cause why a trustee’s sale should not proceed so that the status quo is maintained while he presses his case in the District Court.”
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
________________________________________________________ MICHAEL M. CARNEY
BANK OF AMERICA CORP., ET AL.
III. Merits Of Case Are Compelling And Clear And Likely to Be Successful.
It is clear that MERS and ReconTrust act to usurp Appellant’s property
without lawful authority. MERS Cannot be and in fact is not the beneficiary of the
DOT. There is no named beneficiary in the SOT and ANY and ALL beneficiaries
must be named in the SOT. Therefore the SOT (and consequently the NTS) is
seriously defective and void as an instrument to be implemented to supplant
Appellant from his property.
Defendants act hurriedly and without authority not because they are
uninformed or have made an excusable mistake, but rather because they wish to
elude the central facts and claims against them, hold the wrongful trustee’s sale
and gain title and possession of Appellant’s property to gain a superior position.
The facts are that BondCorp, who has yet to respond to any complaint or
motion related to this case, was in fact named as “Grantee” when it never proffered
any funds and was used by Countrywide to both gain secret, concealed fees and
allow Countrywide to further gain based on intentional concealments, lies,
misrepresentations and related actions.
As has been stated, the core of this matter is the claims against BondCorp
acting at the behest of Countrywide. If BondCorp was found to have acted
fraudulently, as asserted and supported by facts, every other claim and defense is
What this court is presented with is a defendant in BondCorp who has
chosen to remain silent in the face of substantial allegations and facts against it,
and a foreclosing entity defendant (MERS) that is acting without authority and in
clear violation of the law.
Meanwhile, Appellant has had to defend and counter all such actions and to
drag out all the facts, all while in the face of losing his family home and efforts to
understand what options would be available to him to avert such a catastrophic
Up until August/September of 2010, Appellant was resigned to the fact that
his misfortune would likely lead to the loss of his family home. It wasn’t until he
received and further researched the information regarding the assignment/transfer
of his DOT and Note to US BANK (June 2010) that was entirely first time news to
him, that he began to understand and realize the fraud, malfeasance and
misfeasance enacted upon him and then which drove him to seek relief and
The facts of the case as pertains to BondCorp are clear and undisputed. BondCorp was not the “lender”. It only acted as such to attain secret fees. BondCorp utilized illegal, fraudulent means to sell and convince Appellant that the loan BondCorp wished to engage him in was in his best interests, when it was not and that all the facts represented to him regarding the alleged loan were true, when they were not and the real facts were concealed from him and that he was defrauded of tens of thousands of dollars in the process.
Countrywide was an active conspirator as it allowed BondCorp to utilize its technological assets, its underwriting resources, account numbering system and other aids and benefits to entrap Appellant into a loan that was damaging, stated the wrong parties and took illegal and undisclosed fees.
MERS, something of a phantom entity and ReconTrust, subsidiary of BAC
and not an independent entity, acting in BAC/BANA/Countrywide’s interests, now
are trying to come in and clean up the mess made by the fraudulent DOT and Note
by BondCorp in a conspiracy with Countrywide, not because they are any real
beneficiary and have or will experience any real loss, but rather to gain substantial
fees from the SARM 2005-19XS Trust for foreclosing on Appellant’s property. It is truly curious as to why the proper parties in this matter are not named and Appellant posits that other, unrelated legal actions are likely a reason. That said, Appellant has shown good cause why a trustee’s sale should not proceed so that the status quo is maintained while he presses his case in the District Court
EDITOR’S NOTE: The race is on — who is going to be the first attorney general to bring the major banks to their knees begging for amnesty instead of demanding it because they are too big to fail? Any politician with future ambitions had better not be cozy with Banks or even favor leniency. If there is a bailout, it had better be to John Q Public.
California attorney general’s office subpoenas Fannie, Freddie
Information is sought on the mortgage giants’ roles as landlords who own thousands of foreclosed properties in California. Also sought are details of their mortgage-servicing and home-repossession practices, a source says.
By Alejandro Lazo and Jim Puzzanghera, Los Angeles TimesNovember 16, 2011, 6:27 p.m.
Reporting from L.A. and Washington—
Investigators with the California attorney general’s office have subpoenaed information from mortgage titans Fannie Mae and Freddie Mac as part of a wide-ranging inquiry into lending and foreclosure practices in the state.
The subpoenas ask the government-controlled finance companies to answer a series of questions about their activities in California, including their roles as landlords who own thousands of foreclosed properties. The attorney general’s office is also seeking details of Fannie and Freddie’s mortgage-servicing and home-repossession practices, according to a person familiar with the matter.
In addition, investigators want to learn more about the companies’ purchases and sponsorship of securities holding “toxic mortgages” in the Golden State, said the person, who was not authorized to speak on the matter and requested anonymity.
Fannie and Freddie declined to comment on the investigation. Shum Preston, a spokesman for state Atty. Gen. Kamala D. Harris, also declined to comment.
Edward Mills, a financial policy analyst at FBR Capital Markets & Co., said Harris has been the most aggressive state attorney general in trying to assist those borrowers who are “underwater” on their mortgages, owing more on their properties than they are worth.
The move to open an investigation into Fannie and Freddie, Mills said, is a creative way to potentially force policy changes from the mortgage giants over the objections of their regulator, the Federal Housing Finance Agency in Washington, which is headed by Ed DeMarco.
“She’s felt that Ed DeMarco has not done enough to help homeowners and has undue influence over what changes are put in place at Fannie and Freddie,” Mills said. “If he’s not going to make those changes, she’s going to force those through the courts.”
The California investigation comes as DeMarco and the chief executives of the two companies faced bipartisan outrage this week over multimillion-dollar salaries and large bonuses at the housing finance giants, which still owe the government a combined $150 billion in the largest financial crisis bailout.
Harris this month pushed for Fannie and Freddie to allow more principal reduction, which is the writing down of the loan balances of troubled borrowers.
“If Mr. DeMarco is unwilling to support principal reduction for these home loans in crisis, he should step aside for someone who will,” Harris said.
DeMarco, in turn, said Wednesday during his congressional testimony that the agency has determined that reducing principal on loans owned by Fannie and Freddie is not “the least-cost approach for the taxpayer” to keep homeowners from foreclosure. In addition, those reductions are not authorized under the law that allowed the firms to be seized, DeMarco added.
“I do believe we are taking all due effort to provide assistance to homeowners, and I do not believe I’ve been authorized to use taxpayer money for a general program of principal forgiveness,” DeMarco told lawmakers.
According to the person familiar with California’s investigation, the central question posed by the California investigators is: To what extent did the two mortgage giants contribute to the foreclosure crisis in California?
Fannie and Freddie hold a vast number of loans in California. The major banks that are employed to act on their behalf — collecting payments from borrowers, foreclosing or evicting borrowers or striking deals with homeowners to modify their mortgages — must adhere to their guidelines.
Harris has made investigating the foreclosure crisis and mortgage meltdown a priority during her first year in office, creating a Mortgage Fraud Strike Force this year. More recently, she has stepped out of negotiations with the nation’s five largest banks, conducted on behalf of state attorneys general across the U.S., saying that the banks were asking for too much legal release in return for too little aid to California borrowers.
The subpoenas, issued Tuesday, deal only with Fannie’s and Freddie’s activities in California. But the investigation could lead other states to look into the firms’ operations, said Guy Cecala, publisher of Inside Mortgage Finance.
“If for some reason California would be successful in any of this, it certainly would encourage other states to go after them because every state has Fannie and Freddie mortgages,” Cecala said.
The two mortgage giants are responsible for about 40% of home loans in the U.S., according to Inside Mortgage Finance.
“I think that this is at least partially an attempt to penetrate that bubble which is hanging over half the market,” Cecala said. “The servicers, the big banks they are dealing with and negotiating with, have no control over the loans that are guaranteed and effectively owned by Fannie Mae and Freddie Mac; the major banks are just third-party contractors when it comes to those.”
State investigators will be looking at three broad areas of practices by Fannie and Freddie in California, according to the person familiar with the matter.
The first will be the two companies’ role as a landlord in the state, where the two own about 12,200 foreclosed properties. In the Los Angeles metro area alone, Fannie and Freddie hold about 2,000 foreclosed properties, and nearly 3,000 in the Inland Empire, according to data published by their regulator this summer.
The subpoenas ask the two companies to answer questions related to their role as the owners of these homes. Foreclosed properties that are neglected can result in blight and be a haven for criminals.
Fannie and Freddie are being asked to supply details about how the loans they own are serviced, how quickly they are foreclosed upon and what kind of relief is offered to homeowners, according to the person familiar with the matter. The questions seek to gain information about what servicers are doing and which are the worst performers.
The two companies own about 4 million loans in California amounting to about $793 billion in mortgages, according to Inside Mortgage Finance.
Investigators are also seeking to determine what role Fannie and Freddie played in selling or marketing mortgage-backed securities. The attorney general’s office has an ongoing probe into potential fraud committed in the so-called secondary market for mortgages that became popular during the boom and helped fuel the bubble in home prices. The office has subpoenaed Bank of America Corp. and Countrywide, as well as Citibank, in relation to this investigation, The Times has previously reported.
Fannie and Freddie have filed a lawsuit against 17 major banks, saying the companies were defrauded by those loans and securities. The attorney general wants to know whether what the two entities have uncovered in their own actions might assist her office.
Although the investigation might help California gain leverage in its efforts to help its homeowners, a direct legal battle seeking damages from the two entities would be difficult and potentially counterproductive, Cecala said, as they are being kept afloat by the federal government.
“They would hire the best attorneys, and you and I would pay for it as taxpayers,” he said. “You can’t really seek any damages out of them because it all comes out of Uncle Sam’s pocket.”
Although Fannie and Freddie may employ practices that run counter to the interest of borrowers as they seek to minimize costs and expedite foreclosures, California might have a more difficult time finding fault with the two companies’ actions as a landlord, Cecala said. The two companies set the “gold standard” in terms of servicing and disposing of distressed real estate, he said.
It also will be difficult to prove that any harm was done to investors, he said, as the loans they securitized are backed up by the government.
Delaware joined what is becoming a growing legal battle against the mortgage industry today, charging in a Chancery Court suit that consumers facing foreclosure were purposely misled and deceived by the company that supposedly kept track of their loans’ ownership.
By operating a shadowy and frequently inaccurate private database that obscured the mortgages’ true owners, Merscorp made it difficult for hundreds of Delaware homeowners to fight foreclosure actions in court or negotiate new terms on their loans, the suit filed by the Attorney General’s Office said.
EDITOR’S NOTE: California has approximately a 1/3 share of all foreclosures. So Harris’ decision to drop out of the talks is a huge blow to the mega banks who were banking (pardon the pun) on using it to get immunity from prosecution. The answer is no, you will be held accountable for what you did, just like anyone else. As I have stated before when the other AG’s dropped out of the talks (Arizona, Nevada et al), this growing trend is getting real traction as those in politics have discovered an important nuance in the minds of voters: they may have differing opinions on what should be done about foreclosures but they all hate these monolithic banks who are siphoning off the lifeblood of our society. And there is nothing like hate to drive voting.
This is a process, not an event. We are at the end of the 4th inning in a 9-inning game that may go into overtime. The effects of the mortgage mess created by the banks are being felt at the dinner table of just about every citizen in the country. The politics here is creating a huge paradox and irony — the largest source of campaign donations has turned into a pariah with whom association will be as deadly at the polls as organized crime.
The fact that so many attorneys general of so many states are putting distance between themselves and the banks means a lot. It means that the banks are in serious danger of indictment and conviction on criminal charges for fraud, forgery, perjury and potentially many other crimes.
IDENTITY THEFT: One crime that is being investigated, which I have long felt was a major element of the securitization scam for the “securitization that never happened” is the theft of identities. By signing onto what appeared to be mortgage documents, borrowers were in fact becoming issuers or pawns in the issuance of fraudulent securities to investors. Those with high credit scores were especially valued for the “cover” they provided in the upper tranches of the CDO’s that were “sold” to investors. An 800 credit score could be used to get a AAA rating from the rating agencies who were themselves paid off to provide additional cover.
But it all comes down to the use of people’s identities as “borrowers” when in fact there was no “Lending” going on. What was going on was “pretend lending” that had all the outward manifestations of a loan but none of the substance. Yes money exchanged hands, but the real parties never met and never signed papers with each other. In my opinion, the proof of identity theft will put the borrowers in a superior position to that of the investors in suits against the investment bankers.
NO UNDERWRITING=NO LOAN: There was no underwriting committee, there was no underwriting, there was no review of the appraisal, there was no confirmation of the borrower’s income and there was no decision about the risk and viability of the so-called loan, because it wasn’t about that. The risk was already eliminated when they sold the bogus mortgage bonds to investors and thus saddled pension funds with the entire risk of loss on empty “mortgage backed pools.” So if the loan wasn’t paid, the players at ground level had no risk. Their only incentive was to get the signature of the borrower. That is what they were paid for — not to produce quality loans, but to produce signatures.
Little did we know, the more loans that defaulted, the more money the banks made — but they were able to mask the gains with apparent losses as an excuse to extract emergency money from the US Treasury using taxpayer dollars without accounting for the “loss” or what they did with the money. Meanwhile the gains were safely parked off shore in “off-balance sheet” transaction accounts.
The question that has not yet been asked, but will be asked as prosecutors and civil litigators drill down into these deals is who controls that off-shore money? My math is telling me that some $2.6 trillion was siphoned off (second level — hidden — yield spread premium) the investors money before the balance was used to fund “loans.”
When all is said and done, those loans will be seen for what they really were — part of the issuance of unregistered fraudulent securities. And you’ll see that the investors didn’t get any more paperwork than the borrowers did as to what was really going on. The banks want us to focus on the the paperwork when in fact it is the actual transactions involving money that we should be following. The paperwork is a ruse. It is faked.
NOTE TO LAW ENFORCEMENT: FOLLOW THE MONEY. IT WILL LEAD YOU TO THE TRUTH AND THE PERPETRATORS. YOUR EFFORTS WILL BE REWARDED.
The multistate attorneys general group working toward a foreclosure settlement with the nation’s biggest banks suffered a blow Friday, when California’s Kamala Harris announced her departure from negotiations.
Harris notified Iowa Attorney General Tom Miller and U.S. Associate Attorney General Thomas Perrelli of her decision in a letter that was obtained and published by the New York Times Friday. According to the letter, Harris is exiting the talks because she opposes the broad scope of the settlement terms under discussion.
“Last week, I went to Washington, D.C., in hopes of moving our discussions forward,” Harris wrote. “But it became clear to me that California was being asked for a broader release of claims than we can accept and to excuse conduct that has not been adequately investigated.”
“[T]his not the deal California homeowners have been waiting for,” Harris adds one line later.
Harris, who earlier this year launched a mortgage fraud task force, says she will continue investigating mortgage practices – including banks’ bubble-era securitization activities – independent of the multistate group.
“I am committed to doing as thorough an investigation as is needed – and to taking the time that is necessary – to set the stage for achieving appropriate accountability for misconduct,” she wrote.
Harris also told Miller and Perrelli that she intends to advocate for legislation and regulations that increase transparency in the mortgage markets and “eliminate incentives to disregard borrowers’ rights in foreclosure.”
Harris’ departure is considered significant given the high number of distressed loans in California. In August, approximately one in every 226 housing units in the state had a foreclosure filing of some kind, according to RealtyTrac data.
EDITOR’S NOTE: Every time a Court actually looks at the documents, examines the pleadings and exhibits and asks the most basic questions, they rule in favor of the borrower. It’s not out of bias that they ruled as they did before nor is out of some new bias for borrowers that the latest rulings favor borrowers. It is just application of simple, basic existing law without any need to treat the issues as novel in any way.
The Banks have completed millions of foreclosures side-stepping the issue of whether or not they are in fact the creditor, whether they could submit a credit bid at the auction, whether the money is owed to them, and if they are acting as “agent” whether they will disclose the principal in the transaction. The courts deferred to the banks for too long. Now the Judges are realizing that they have been hoodwinked and that their prior rulings have enabled the worst property title crisis in U.S. history as well as the worst financial scam. The ultimate cost of these errors cannot be calculated in money alone. Ruined lives, divorces and suicides are not just numbers on a page.
“the Court will not participate in a process where OneWest increases its profits by disobeying the rules of this Court and by providing the Court with erroneous information“
NEW NOTE GAMBIT ANGERS JUDGE
EDITOR’S COMMENT: We’ve been watching this for years. If one document doesn’t work, the pretender comes up with another “original” document. They are all fake, fabricated and forged. People have been asking us since 2007, “If what you are saying why are the Judges going along with it? Why are they not levying sanctions, referring the lawyers to the Bar for discipline and referring the banks to the justice system for criminal prosecution?” The simple answer is that the Judges didn’t believe it. They were stuck in the mental trap of believing that the banks would never intentionally do something in court that amounted to perjury, subornation of perjury and fraud. The Judges could not get their heads wrapped around the idea that the banks were in the process of a fraudulent land grab. It just didn’t make sense to them. It seemed far more likely to them, from their prior experience with foreclosures, that the process was largely clerical, that no bank would foreclose if there wasn’t a good reason and it couldn’t be worked out.
In California this attitude was particularly evident but in other states, Neil Garfield and Living lies was cited as the problem because we were filling the media with false statements of law and fact. Fast forward to the present and you see an increasing number of judges getting increasingly bold in switching their position on the banks and allowing for the possibility, even the probability that the homeowners win and the pretenders lose because they are pretenders, interlopers in a process meant to satisfy the requirements of judicial economy but which was being used (nonjudicial) to get around the basic requirements of black letter law and due process requirements contained in every state constitution and the United States Constitution.
Lawyers saw the references to me and my blog and the derisive wording about me, and they got scared that if they argued the same points they too would be the subject of derision, lose credibility with the court, and lose cases. And in fact, they were losing more cases than they were winning because even if they used the material on this blog, even if they got the COMBO title and securitization search, report and analysis that lays out everything chapter and verse, they were still losing — as a direct consequence of (a) Judges prejudging the cases and (b) the lawyers and litigants failing to object immediately as the first words were coming out of the mouths of the lawyers for the pretenders and failing to object to the first documents proffered. Most of all they were losing because they failed to deny the default, deny the right right of the forecloser to be initiating any collection or foreclosure proceeding, and deny that the originating papers were representative of the actual cash transaction that took place.
If you don’t object to an allegation, you are admitting it. If you don’t object to a document, it comes in as “evidence.” And the reason the lawyers were not objecting was that they had the same mindset as the Judges. How could they deny a default when they knew that the homeowner had not made payments on the note and mortgage that was attached as copies to the pleadings of the pretenders? If you don’t make the payments, you’re in default, right? WRONG! A default occurs only if the creditor fails to receive payment, not when the borrower decides to not make the payment. A default exists only if there is a gap in payments that are due, not payments that are shown on a piece of paper. If the payments were made anyway by a third party, there is no default and none can be declared.
And the declarer of the default must be someone who has an interest in the obligation. And the default must reference the obligation which normally is on the loan documents signed at closing but in the case of table funded loans that are enmeshed in a false securitization scheme, those documents do NOT set forth the terms or the parties involved in the transaction — so they can’t be used. If the loan documents at the so-called “closing” can’t be used we are left with an undocumented transaction between the homeowner, who is not known to the investor-lender, and the investors lender who is not known to the homeowner-borrower. They each got a separate set of documents including terms, conditions guarantees, cross collateralization, insurance and other third party payments (from servicers who keep paying in order to collect higher fees for “non-performing” loans. So in terms of documents there was no deal, and if the truth was told to both real parties in interest there wouldn’t have been a deal.
Nonetheless an obligation arose between the homeowner-borrower and the investor lender because the homeowner-borrower received the benefit of funding from the investor-lender, albeit under false pretenses including appraisal fraud at the loan level and ratings fraud at the investment level. The transaction is both undocumented and unsecured. And the obligation is subject to offset from a menu of affirmative defenses, rescission remedies, and counterclaims from the homeowners borrower. The property is now worth a small fraction of what was represented at the loan level closing and the investment level closing. So the investors are ignoring any remedies against homeowners because they don’t want to get tied up in litigation in which their net recovery is negative — i.e., they owe more to the homeowner than the homeowner owes on the obligation.
Enter the pretenders who figure that if the investors don’t want to go after the homes, then the banks will and who will challenge the banks since they appear to be the lenders in these transactions, even if they are not. Their defects in documentation and the facts (they were not included in the money trail of the loan transaction) were glossed over by lawyers and judges and even the media. Now, the Judges are taking a closer look and finding that not only do these pretenders lack standing, not only are they not the real parties in interest, but that that they and their lawyers are probably guilty of intentional fraud on the court and in this case, as well as others across the country, the Judge is ordering sanctions and fines.
In re: Jessie M. Arizmendi, Debtor.
OneWest Bank FSB, its assignees and/or successors, Moving Party,
Jessie M. Arizmendi, Debtor; Thomas H. Billingslea, Chapter 13 Trustee; and Indymac Mortgage Services, Junior Lien, Respondents.
Bk. No. 09-19263-PB13, RS No. CNR-2.
United States Bankruptcy Court, S.D. California.
May 26, 2011.
Not for Publication
LAURA S. TAYLOR, Bankruptcy Judge
At the trial, the Court carefully considered the demeanor of the various witnesses and the testimony provided. In connection with the trial, the Court also reviewed all other evidence and argument appropriately before the Court. Notwithstanding, however, significant questions continued, and the Court required additional briefing in connection with several issues as outlined in the Order Setting Briefing Schedule, Outlining Preliminary Determinations, and Establishing Procedures for Final Resolution of Issues (Dkt. No. 56) (the “Briefing Order”).
OneWest’s post-trial documents provided the analysis and argument required by the Briefing Order. But, these documents also contained factual assertions inconsistent with the OneWest Declaration and the Claim. OneWest now provided a standing argument based on a new version of the Note (the “Endorsed Note”). The Endorsed Note attached an allonge dated July 24, 2007 evidencing a transfer from Original Lender to “IndyMac Bank, FSB” and bore an endorsement in blank from IndyMac Bank F.S.B. OneWest argued in connection therewith that it had enforcement rights under the Endorsed Note as a holder notwithstanding the admittedly accurate testimony at trial indicating that OneWest is a servicer for Freddie Mac and not the secured creditor. The OneWest post-trial memorandum also references a separate agreement with Freddie Mac, but fails to further evidence or discuss this agreement. The OneWest post-trial memorandum, finally, bases a standing argument on physical possession of the Endorsed Note and OneWest’s alleged status as a trust deed beneficiary based on the Assignment.
But, there are key assumptions that the Court must make in order for this set of facts to withstand scrutiny. And they are that OneWest, in fact, holds the Endorsed Note and held the Endorsed Note at all appropriate points in time. Frankly, the Court is not willing to make such assumptions at this time. OneWest attached the Unendorsed Note to both its Proof of Claim and the Declaration.The Declaration stated under penalty of perjury, that the Unendorsed Note was a true and accurate copy of the Note held by OneWest. The Proof of Claim implicitly stated the same and OneWest, of course, is obligated to provide only accurate information in connection with its Proof of Claim. The problem is that the Unendorsed Note does not bear the endorsement or attach the allonge found on the Endorsed Note, a document produced only after trial and the close of evidence. One West, thus, leaves the Court with the quandary of guessing which promissory note OneWest holds, whether and when One West held the Endorsed Note, and what the explanation is for the failure to provide the Endorsed Note prior to the close of evidence.
A further evidentiary anomaly arises on account of the Assignment; MERS executed this document as a nominee for the Original Lender. But the allonge to the Endorsed Note makes clear that the Original Lender assigned its interests in the Note more than three years prior to execution of the Assignment. And rights under the Trust Deed follow the Note. Polhemas v. Trainer, 30 Cal. 686, 688 (1866). Thus, MERS’ purported assignment of the Trust Deed and the related note as nominee for the Original Lender and without a reference to either IndyMac Bank, FSB or Freddie Mac appears designed to disguise rather than to illuminate the facts.
And finally, even if OneWest’s second post-trial discussion of standing and submission of evidence were accurate, one thing remains clear: OneWest failed to tell the true and complete story in the OneWest Declaration and in the Claim.
The Court is concerned, as a result, that OneWest does not hold the Endorsed Note. But, perhaps more significantly, the Court is concerned that OneWest has determined that business expediency and cost containment are more important than complete candor with the courts. On these points, Ms. Arizmendi has a right to be heard, and the Court has a right to explanation.
Further, this is not the first time that OneWest has provided less than complete information in the Southern District of California. See “Memorandum Decision Re Motion to Vacate Clerk’s Entry of Default and Motion to Dismiss Complaint; Order to Show Cause for Contempt of Court”, docket no. 39, Adv. Pro. 10-90308-MM (In re Doble; Bk. Case No. 10-11296) (Defendants, including OneWest, were neither candid nor credible in explaining failure to respond timely to complaint and submitted multiple and different notes as “true and correct”); “Order to Show Cause Why OneWest Bank, FSB and Its Attorneys Law Offices of Randall Miller and Christopher Hoo Should Not Appear Before the Court to Explain Why They Should Not Be Held in Contempt or Sanctioned”, docket no. 47, In re Carter, Bk. Case No. 10-10257-MM13 (among other things OneWest provides inconsistent evidence as to its servicer status); and “Order After Hearing to Show Cause Why Indymac Mortgage Services; OneWest Bank, FSB; Randall S. Miller & Associates, P.C.; Christopher J. Hoo; Barrett Daffin Frappier Treder & Weiss, LLP; and Darlene C. Vigil Should Not Appear Before the Court to Explain Why They Should Not Be Held in Contempt or Sanctioned”, docket no. 47, In re Telebrico, Bk. No. 10-07643-LA13 (Court concerned that OneWest provided evidence that was either intentionally or recklessly false).
The curious thing about these cases is that OneWest likely would prevail in each of them if it completely and candidly explained the basis for its motion and its standing in connection therewith. Undoubtedly, however, doing so is more costly than using a form declaration that is not customized as to the facts on a case by case basis and that is signed by an uninformed declarant. OneWest perhaps assumes that it really does not matter if the Court provides relief based on erroneous information. But, OneWest should remember an earlier theme in this decision and that is that the law is the law, rules are rules, and both must be obeyed. And, when it becomes clear that OneWest did not obey the rules, the Court can and, indeed, must act.
In short, the Court will not participate in a process where OneWest increases its profits by disobeying the rules of this Court and by providing the Court with erroneous information. The Court, thus, will take two steps. First, the Court will deny the Stay Motion without prejudice based first on the evidentiary problems that make it impossible for the Court to determine that OneWest is properly before the Court and that render evidence critical to OneWest’s prima facie case unreliable and second based on the Court’s inherent authority to regulate and control proceedings. Next, the Court hereafter will issue an order to show cause why One West should not be held in contempt and/or otherwise sanctioned. In connection therewith, the Court will consider a compensatory sanction to include a recovery of any costs Ms. Arizmendi would not have incurred but for OneWest’s improper actions. The compensatory sanction, frankly, could be quite limited. But, the Court also believes that a coercive sanction may well be appropriate. Given the orders to show cause that pre-date the one this Court will issue, it appears that the Court must create an economic disincentive for OneWest that will counter balance the economic benefit of a lack of complete candor. Further detail on the Court’s sanctions considerations will be set forth in the order to show cause and will not be further discussed here.
The Court finally notes that the order to show cause will issue only as to OneWest and possibly as to MERS. OneWest uses a variety of law firms. The Court was in a position to observe the demeanor of the lawyers handling this matter when the witness stated that OneWest was a mere servicer. The Court concludes based on this observation that they were unaware of this fact and unaware that OneWest supplied questionable documentary evidence. And frankly, there is nothing to be gained in pursuing the individual attorneys who must regularly appear in front of this Court. OneWest can simply change counsel and then be less than candid with a new set of attorneys. The Court is interested in modifying OneWest’s behavior at an entity level, and any coercive sanction will be designed to achieve the same.
Based on the foregoing, the Stay Motion is denied without prejudice to the right of OneWest to refile a stay relief motion. In so doing, OneWest must provide declaratory evidence that explains when and how it obtained physical possession of the Endorsed Note and/or Unendorsed Note and that otherwise provides case specific evidence of standing given its servicer status.
COMMENTS ON CALIFORNIA MELLO ROOS FRAUDS PERPETRATED BY LENNAR, RYAND, SUNCAL.
THE BUILDERS AND SUNCAL THE DEVELOPER FUNDED BY LEHMAN BROTHERS GOT THE APPRAISER (IN THE 990 PAGE MELLO ROOS DOCUMENT ATTACHED) TO SAY THAT A RECENTLY SOLD DEVELOPMENT WAS WORTH $81 MILLION.
THIS APPRAISER FRAUD WAS BASED ON SALES PRICES TO THE SOLD BUILDER AREAS A FEW MONTHS BEFORE.
THIS FRAUD DID NOT INCLUDE AREA COMPS BUT COMPS SOLD TO THE SAME PLAYERS. THE BUILDERS RECEIVED CREDITS (KICKBACKS) OF $13-15,000 PER LOT. THE SCHOOL TAX WAS PAID.
OUT OF THE AMOUNT THE DEVELOPER WAS PAID 25% ADMINISTRATIVE HIDDEN FEES, AND WERE REIMBURSED FOR MANY ITEMS ALREADY PAID FOR.
THIS THIEVERY WAS SO OUTRAGEOUS THAT THERE WAS $1.6 MILLION CHARGED BY THE DEVELOPER (SUNCAL SEE WSJ ARTICLE ON LEHMAN HOLDS SUNCAL CEO PERSONALLY FOR BONDS AND OTHER DEBTS) WHICH WERE FOUND TO BE PRIVATE STREETS. THEY WERE REIMBURSED FOR MANY UNQUALIFIED PROJECTS. THAT AMOUNTED TO BREAKING THE TAX FREE STATUS OF THE BOND OFFERING.
THE WORST THING IS THAT THERE WAS AN AREA 2, ADDED TO THIS MELLO ROOS TAX AREA.
AREA 2 WAS NOT PROPERLY ANNEXED, BUT REGARDLESS IT WAS PUSHED THROUGH AND SOUTHWEST SECURITIES, FULLBRIGHT AND JAWROSKI LLP APPROVED IT. THE OFFERING WAS SOLD AND THE FUNDS DISTRIBUTED.
AREA 2 THE INELIGIBLE AREA BY ALL LAND RECORDS AND LAWFUL ANNEXATION PROCEDURES, RECIEVED $6 MIILION OF INFRASTRUCTURE UPGRADES.
THESE WERE BACK BONE STRUCTURES. THEY ARE IN THE GROUND NOW AND THE AREA 1 WHO PAID FOR THEM WILL NEVER BENEFIT. IT WAS A SCAM AND IT IS IN CALIFORNIA.
A GOOD NEWSPAPER COULD EASILY AGREE WITH THE ASSESSMENT. HOWEVER IT IS TOO DIFFICULT.
THIS AREA WAS NOT ANNEXED TO THE DEVELOPMENT PROPERLY. IN FACT THERE WAS A LETTER WHERE BY THE DEPT OF THE INTERIOR SAID THAT THEY DAMAGED ENDANGERED SPECIES.
THEY DID NOT CARE AND THE DEPT OF THE INTERIOR HAS NO POWER ONCE THE CITY WHO FACILITATED THIS MASSIVE CONSPIRACY ALLOWED THE PULLING OF PERMITS.
I HAVE ALL THIS DOCUMENTED. THE OVERSIGHT BODIES ARE WEAK. THIS $26.3 MILLION DOLLAR MELLO ROOS TAX IS NOW ITSELF OVER 2% OF THE TAX AMOUNT.
THAT MAKES THE TOTAL TAX OVER 3.5% FOR THESE PEOPLE. THIS IS WELL DOCUMENTED AND IT IS SO BAD. THIS IS ONLY PART OF THE STORY. THE DEVELOPER/BUILDERS STEERED 70% OF THE LOANS TO THEIR SUBSIDIARIES. FOR A $500,000 HOME THEY MADE $25,000.00.
CALIFORNIA DOES NOT CARE. THE AUTHORITIES DO NOT UNDERSTAND THIS COMPLEXITY, AND IT IS CRIMINAL.
HERE IS THE BOND OFFERING. I HAVE DOCUMENTED THE ENTIRE SCAM. THE CITY HAS DEFEASED $ 3MM OF A SPECIAL ESCROW TAX. THAT WE HAD TO FIGHT SO THE DEVELOPER WOULD NOT GET IT. IF THERE WERE NOT ACTIVISTS HERE WE WOULD HAVE LOST THAT PART ALSO.
Department of the Interior Report for Area 2
United States Department of the Interior
FISH AND WILDLIFE SERVICE
Carlsbad Fish and Wildlife Office
6010 Hidden Valley Road
Carlsbad, California 92009
In Reply Refer To: FWS-ERIV-4301.1
Dec 10 2004
Ms. Susan E. Williams Community Development Services
Building and Safety Director
100 Civic Center Mall
Indio, California 92201
Subject: Notice of Intent to Adopt a Mitigated Negative Declaration and Draft
Environmental Assessment for the Proposed Terra Lago East Project, City of Indio, Riverside County (EA No. 04-11-404)
Dear Ms. Williams:
This letter responds to your request for agency comment on the above referenced Notice of Intent (NOI) and draft Environmental Assessment (EA) for the proposed Terra Lago East project, dated November 4, 2004. The U.S. Fish and Wildlife Service (Service) has reviewed the subject notice and accompanying draft EA, and we offer the following recommendations to assist you in planning for the conservation of sensitive wildlife species and plant communities within the project area. In particular, the Service has concerns regarding impacts to the federally endangered Coachella Valley milk-vetch (Astragalus lentiginosus var. coachellae; hereinafter milk-vetch) and its habitat. This species is known to occur just east of the proposed project boundary and suitable habitat occurs on portions of the project site. We are concerned that impacts have recently occurred to the milk-vetch adjacent to the project site that were to be avoided under the former SunCal project. Furthermore, we are concerned with the lack of effective mitigation measures proposed in the Mitigated Negative Declaration for project impacts on the Palm Springs ground squirrel (Spermophilus tereticaudus chlorus; hereinafter ground squirrel) and the honey mesquite (Prosopis glandulosa) hummock plant community found on-site. Additionally, the Biological Resources section of the draft EA does not address Environmental Evaluation letter f: “Conflict with the provisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan?” This section should be completed and circulated for public review.
According to the EA, the proposed Terra Lago East project is a consolidation of the previously approved Hills (November 1996) and Indian Lakes (May 2000) projects, and is designed to be consistent with the SunCal Indio
Project Master Plan that was approved December 2003. The proposed Terra Lago East project is geographically located within a subset of these previously approved projects. A biological assessment (BA) was prepared for the proposed SunCal project by James Cornett, dated June 28, 2003, which enveloped the project footprint for the proposed Terra Lago East project. A review and update of the 2003 BA was prepared for the Terra Lago East project by AMEC Earth and Environmental, Inc., dated September 20, 2004. We appreciate the opportunity to comment on the NOI and draft EA and our concerns are addressed in detail below.
Coachella Valley Milk-vetch
According to the 2003 BA (page 13) for the SunCal project, milk-vetch was detected in eastern portions of the site adjacent to Dillon Road, and ‘habitat was found to be suitable for this species on portions of the project site.” The conditions of approval (condition number 4) and Mitigation Monitoring and Reporting Program (BS-2) for the SunCal project required the project proponent to confer with the Service regarding acceptable mitigation for the milk-vetch and to ‘provide proof to the City of Indio of consultations held with the U.S. Fish and Wildlife Service regarding any mitigation measure requirements for loss of potential milk-vetch habitat.” However, a letter submitted to our office by the law office of Hewitt & O’Neil, dated March 12, 2004, stated that ‘no mitigation is offered as no impacts to the milk-vetch will occur as a result of SunCal’s project.” Nonetheless, according to the 2004 BA (page 2), site visits conducted by John Green and Dave Kajtaniak in September 2004 found that extensive blading had recently occurred in the eastern portion of the project site. Though the 2004 BA does not clarify if the occupied milk-vetch habitat was disturbed by the blading, the area has been cleared to Dillon Road, which undoubtedly adversely impacted the milk-vetch population on-site. Because the proposed Terra Lago East project is proposed to be consistent with the approved SunCal project, the City’s mitigation measures for milk-vetch have not been complied with, and this outstanding responsibility still needs to be satisfied. Please see our recommendations below.
The eastern boundary of the proposed Terra Lago East project has been moved to the west, apparently to avoid the previously identified milk-vetch occurrences, however, the 2004 updated BA (page 1) states that, ‘Habitat is similar on the adjacent Terra Lago East site, so by natural seed dispersal, there is at least a chance that it could now occur there as well. Focused surveys during the blooming season of this plant would be required to confirm this possibility.” If the grading that occurred earlier this year redistributed and leveled sandy soils without transporting this material off-site, milk-vetch seeds would remain on-site and the seed bank should remain viable, assuming that some of the bank remains within sprouting depth of the soil surface.
Mitigation measures to offset impacts to milk-vetch should be included as permit conditions for the proposed Terra Lago East project. We recommend that the City require the project proponent to restore and protect, with a permanent conservation easement, the entire milk-vetch habitat that was to be avoided, per the letter from the law office of Hewitt & O’Neil. This area includes those lands along Dillon Road that the current project was reconfigured to avoid. Additionally, focused surveys for this species should be conducted on the remainder of the site during the appropriate blooming season and survey reports, including survey methodology, date of surveys, survey results, and surveyor qualifications should be submitted to the Service and the City for review prior to permitting the proposed project. This information is required to adequately evaluate the current status of this species on the project site, and determine the significance of potential impacts and appropriate mitigation measures.
Palm Springs Ground Squirrel and Mesquite Hummocks
The 2003 BA for the SunCal project reports more than 50 observations of the ground squirrel on-site and states that this species can be expected over most of the area surveyed, which includes the proposed Terra Lago East project site. The 2004 updated BA concludes that, despite clearing of many mesquite hummocks (discussed below), ground squirrels are still likely to be present on-site. This species is a candidate for Federal listing (candidate species are those for which the Service has on file sufficient information indicating that listing as threatened or endangered is warranted by the species has not yet been proposed for listing), and is considered a species of special concern by the California Department of Fish and Game (CDFG), because it is a narrow endemic species that largely occurs in the Coachella Valley within sandy habitats, and is most abundant in mesquite hummock habitat. In addition, the ground squirrel is proposed for conservation in the draft Coachella Valley Multiple Species Habitat Conservation Plan (draft CVMSHCP) to avoid the need for future listing, and provide adequate conservation so that if the species were to be listed in the future, additional funding or habitat would not be needed in the plan area.
Though the draft CVMSHCP provides a habitat model for the ground squirrel that suggests relatively widespread distribution in the Valley, the Service has conducted a 2-year study of the ground squirrel and found that it is largely restricted to stands of mesquite, including substantially higher population densities than in other habitat types, and currently appears absent from much of the modeled suitable habitat. Given the substantial reliance of the regional ground squirrel population on mesquite habitat, the future survival of the ground squirrel appears dependent on the conservation of that habitat type. Historically, the amount of mesquite hummocks in the Valley has been dramatically reduced by agricultural and urban development, to the extent that only about 945 acres of such habitat currently remain. Most of this habitat (about 570 acres, as calculated in the draft CVMSHCP) occurs in isolated patches that were excluded from the proposed CVMSHCP reserve design because of disjunct distribution, small size, and lack of connectivity with larger blocks ofhabitat. Therefore, only about 375 acres of mesquite hummocks may be protected in the future if the draft CVMSHCP is approved. However, most of the habitat that is proposed for conservation under the draft CVMSHCP is threatened by groundwater over-draught, and substantial death and degradation of the remaining mesquite habitat currently is evident. As such, the future survival of the ground squirrel in Valley appears to be at high risk, which adds to the significance of conserving those remaining stands of mesquite that still support the ground squirrel. The CDFG considers this community to be a rare vegetation element in California and of significant importance regionally due to high ecological value and increasing rarity/threat. Please see Enclosure 1 for additional information on the regional importance of mesquite hummocks and threats to this vegetation community type.
The 2003 BA for the SunCal project identified mesquite hummocks (some as high as fifteen feet) within the northeastern and southwestern portions of the proposed Terra Lago East project site, and the 2004 updated BA reports “extensive, extant hummocks within the existing golf course, particularly in the eastern portion of the course, north of the canal, and west ofWasteway Number Three” that were not identified in the 2003 BA. According to the 2004 BA (page 2), site visits conducted in September 2004 confirmed that all of the mesquite hummocks in the northeastern project area and some hummocks in the southwestern area had been bladed. Observations by Service biologists in April 2004 found that all of the mesquite hummocks onsite were undisturbed. Therefore, blading occurred between April and September 2004. Based on available information, the bladed area between the eastern boundary of the proposed Terra Lago East project and Dillon Road is no longer part of any proposed project for unexplained reasons. That the former SunCal project boundary was moved farther west in the current Terra Lago East proposal, suggests that an attempt was made to avoid the area previously documented to support the milk vetch. However, why this area would have been bladed before the City and developer completed its coordination with the Service, pursuant to the City’s mitigation requirement for the milk-vetch, is perplexing. The 2004 BA reports that extant mesquite roots that were bladed this summer are
currently resprouting. This regeneration indicates that despite the significant degradation caused by the grading, the mesquite stands remain alive and likely will naturally reestablish if left undisturbed, to again provide suitable habitat for the ground squirrel.
The two BAs and the draft EA do not quantify the acreage of mesquite hummocks that occurred on the property at the time of the 2003 assessment for the SunCal project, the amount of mesquite hummocks that have subsequently been bladed, nor the amount of mesquite hummocks still extant on the proposed Terra Lago East project site. Given the proposed elimination of an unquantified amount of mesquite for housing within the existing golf course matrix, and the documented presence of ground squirrels in the existing golf course/mesquite hummock complex, a thorough assessment of the extent of mesquite and ground squirrel habitat is needed to assess the adverse effects of the project proposal. The Service has performed a preliminary assessment based on available aerial photography to help determine a threshold of significance for these potentialimpacts. Though a more careful assessment is needed, we have initially estimated that at least 50 acres of contiguous mesquite hummocks
occurred in the eastern area of the project site, and this entire area was bladed, as reported in the 2004 updated BA and confirmed per personal communication with John Green ofAMEC on December 10, 2004. We did not estimate the acreage of mesquite hummocks that were reported bladed in the southwestern portion of the proposed site. Additionally, we preliminarily estimate that at least an additional 20 acres of mesquite hummocks are extant within the rest of the project site. Based on the potential significance for adverse effects that this threshold assessment has identified, a more rigorous and accurate analysis is needed to quantify adverse effects so that effective mitigation measures can be formulated.
Given our threshold analysis above, the mesquite hummocks on the project site represent one of the largest remaining contiguous blocks of such habitat in the Coachella Valley. These mesquite hummocks are contiguous with, and part of, the regional habitat linkage that supports and connects the ground squirrel population along Dillon Road with those on the Coachella Valley Preserve. This linkage is identified in the draft 2004 CVMSHCP as part of the East Indio Hills Conservation Area.
Based upon review of our records, it appears that the City did not require mitigation for impacts to the ground squirrel and mesquite hummocks, perhaps based on findings in the 2003 BA (page 17), where Cornett suggested that due to the limited size of onsite mesquite hummocks, their isolation from other such habitats, and off-road vehicle impacts, payment of the $600 per acre Coachella Valley fringe-toed lizard Habitat Conservation Plan (CVFTLHCP) fee is adequate mitigation for loss of this community type on-site. The Service does not agree with this assessment. As described above, the extensive acreage of mesquite hummocks that remain extant and those that were bladed are contiguous with, and part of, an important regional habitat complex that supports and connects the ground squirrel population in this area with the populations to the west in the Coachella Valley Preserve. The CVFTLHCP mitigation fee was designed solely for that species and planning program, which did not address the conservation needs of other species, such as the ground squirrel and milk-vetch. To suppose that mitigation for the fringe-toed lizard also offsets significant adverse effects to other species with different habitat requirements suggests an inappropriate double counting of mitigation credits. Therefore, payment of the CVFTLHCP fee does not offset the significant impacts to the ground squirrel from the proposed project.
The proposed Terra Lago East project is associated with several previously authorized projects (Hills, Indian Lakes, and SunCal), however, it appears that adequate mitigation for impacts to Palm Springs ground squirrel and mesquite hummocks was not provided in the permits associated with these related projects. Furthermore, the
permit condition to avoid impacts to Coachella Valley milk-vetch associated with the SunCal project apparently has been violated. Any impacts that have occurred, or potentially could occur, to sensitive species and habitats should be addressed through the permit requirements for the Terra Lago East project.
Because of the regional biological significance of the project site for the ground squirrel that cannot be mitigated through off-site replacement/fee payment, we recommend that the project (1) be reconfigured to avoid and connect the extant (ungraded) mesquite hummocks throughout the project site, and (2) protect the graded mesquite hummock habitat along Dillon Road that has been avoided in the current project proposal. As discussed above, the bladed mesquite hummocks are resprouting, which we anticipate will reestablish former hummocks over time, to again provide habitat for the ground squirrel and milk-vetch. Given the unaddressed impacts and mitigation responsibilities discussed above, (3) intensive restoration and management also should be required to accelerate natural regeneration and recolonization processes, and (4) all mesquite hummocks that were bladed (both within the proposed project site and east of the project site) should be monitored for recovery. As previously discussed, on-site restoration and preservation is required to achieve conservation of the regionally significant ground squirrel population found on-site; however, any mesquite hummocks that do not recover despite adequate recovery efforts should be mitigated off-site through habitat replacement at a 3:1 ratio, and (5) the on-site and off-site mesquite hummock habitat should be permanently protected through a conservation easement or donation to a public agency. Additionally, (6) all impacts to the Coachella Valley milk-vetch habitat that were to be avoided, per the letter from the law office of Hewitt & O’Neil, should be offset through restoration and protection of the graded area along Dillon Road, as discussed in #2 above.
If the City does not require mitigation adequate to offset significant effects to Palm Springs ground squirrel and Coachella Valley milk-vetch in the Mitigated Negative Declaration, additional environmental analysis and documentation, and coordination with the Service would be needed to address the unmitigated significant effects of the proposed project.
Please contact Sandra Marquez of my staff at 760/431-9440 if you have any questions or comments concerning this letter.
Therese O’Rourke Assistant Field Supervisor
cc: Kim Nicol, CDFG, Bermuda Dunes
I understand from my colleagues in Western Riverside County that you may have more questions about the process on the Terra Lago East project. That
falls within my Division, so I don’t think they will be able to help you. Let me know what your questions are, and I’ll try to come up with some answers!
Carol A Roberts
Division Chief, Coachella and Imperial Valleys Carlsbad Fish and Wildlife Office 6010 Hidden Valley Road, Suite 101 Carlsbad, CA 92011
(760) 431-9440 ext. 271/fax -5902
carol a firstname.lastname@example.org
Title and Escrow complaint to the California Department of Insurance. Lennar the lender, the builder, the title and escrow. the insurance and many more controlled the whole process.
They made many mistakes and covered themself.
He worked for them and acted as though he was on my side. Maybe he is.
He set me up with a meeting with Arthur Silverberg who wants me to sign an nda or non disclosure agreement to work on a class action law suit. Arthur is best friends with the partner of K & L Gates who represents Lennar in my case. See emails.
Illinois and other states consider application of consumer fraud statutes allowing recovery of damages, treble damages and attorney fees.
Texas, Iowa, Illinois Investigate GMAC Foreclosures
By Margaret Cronin Fisk, Lorraine Woellert and Joel Rosenblatt – Sep 24, 2010 4:03 PM ET
Attorneys general in Texas, Iowa and Illinois, following Florida, have started investigations into mortgage practices at Ally Financial Inc.’s GMAC unit while California has ordered the company to prove its foreclosures are legal or halt them.
California Attorney General Jerry Brown said today in a statement that he is “demanding that Ally Financial, the fourth largest home loan institution in the country, demonstrate its compliance with California law or else halt all foreclosure operations in the state.”
Iowa, which leads an 11-state working group of attorneys general and bank examiners exploring ways to prevent foreclosures, opened an inquiry yesterday.
“The integrity of the foreclosure process is of utmost importance and we are very concerned by the issues that have been raised regarding Ally Financial’s treatment of affidavits,” Iowa Assistant Attorney General Patrick Madigan said.
Texas Attorney General Greg Abbott opened an investigation “early this month,” said Tom Kelley, a spokesman for the office. Illinois Attorney General Lisa Madigan asked for a meeting with the company and requested information about how homeowners in the state have been affected, according to a statement.
The action by officials in the four states follows an announcement by Florida Attorney General William McCollum, who last month said he was investigating three Florida law firms handling foreclosures.
Florida investigators issued subpoenas in the case to the Law Offices of Marshall C. Watson PA; Shapiro & Fishman LLP; and the Law Offices of David J. Stern P.A., according to a news release posted on the attorney general’s website.
The law firms were hired by loan servicers to begin foreclosure proceedings when consumers were behind on their mortgages, according to McCollum’s office.
Homeowners facing eviction have accused the companies of filing foreclosure actions without verifying that borrowers actually defaulted or who owns the loans.
GMAC Mortgage notified agents and brokers on Sept. 17 that it had suspended evictions in 23 states. This week, Ally, the Detroit-based auto and home lender, said it found a “technical” deficiency in its foreclosure process allowing employees to sign documents without a notary present or with information they didn’t personally know was true.
GMAC said today in a statement that the problem was identified and then corrected “a few months ago.” The defects didn’t occur in all foreclosure cases in the 23 affected states, according to the statement.
“Regrettably, a procedural error was found to have occurred in certain affidavits required in certain states,” the company said. “The error is not related to the accuracy of the underlying transaction or the ultimate decisions to have exercised the foreclosure proceedings.”
California wasn’t on the list of states where Ally halted foreclosures. These 23 states have a system that requires a court order for foreclosure, unlike California, Brown’s office said in its statement. Ally has continued its foreclosure operations in California, the state said.
California law prohibits lenders from recording defaults on mortgages made from Jan. 1, 2003, to Dec. 31, 2007, unless, with some exceptions, the lender and borrower determine eligibility for a loan modification, Brown said in the statement. Brown cited reports that Ally approved foreclosure documents without confirming that they complied with state law.
Consumer Fraud Act
Illinois’ Madigan said GMAC Mortgage may have violated the state’s consumer fraud act. Madigan requested information about Illinois homeowners affected by GMAC’s suspension and the names of law firms in the state that work with the company on processing foreclosures.
“If I determine that Ally is rubber-stamping affidavits and filing them with our courts as evidence, I will take appropriate action,” Madigan said in the statement. “The law demands that lenders prove their case in foreclosure actions, and Illinois homeowners demand the same.”
Editor’s Note: Judge Lippman is certainly onto something here. There is no doubt that the poor get the short end of the stick when it comes to legal matters. Whether this will have any effect on foreclosures is a question that cannot be answered as yet. With more people moving into the poverty level due to declining real wages and joblessness, it would certainly be a step in the right direction to provide legal assistance to people when it comes to having a roof over their head.
With foreclosures the problem is getting an attorney who understands that most mortgages these days are securitized and that this has important ramifications for defense of foreclosures and evictions. it is entirely possible that the wrong party is acting against the tenant or owner or that the mortgage has been paid in whole or in part through various credit enhancement instruments that protect the creditor (the one who actually advanced the money) from loss.
April Charney is leading the way for Legal Aid and other organizations to provide competent help for indigent or financially challenged persons in the cross hairs of some pretender lender. There is no way for her to do it alone. Inch by inch we seem to be crawling away from this mess. But progress is slow and might be illusory. Recent events in Europe show that these manipulations of exotic financial instruments are wreaking havoc on everyone.
The real answer is to bust the Oligarchy of banking interests who have literally cornered the market on money itself. That takes a lot of will power, a lot of people demonstrating their willingness to engage the banks, and a lot of politicians who need to be coerced into blocking the financial sector from meddling in our lives.
May 3, 2010
Top New York Judge Urges Greater Legal Rights for the Poor
New York’s chief judge called on Monday for a new guarantee of a lawyer for poor people in civil cases, like suits over eviction and other disputes where basic needs are at stake, pushing the state to the forefront of a national effort to expand the right to representation for the indigent.
In a speech in Albany, the chief judge, Jonathan Lippman, said his proposal, the first such plan by a top court official in New York, reflected a commitment by the state’s courts “to bring us closer to the ideal of equal access to civil justice” that he described as one of the foundations of the legal system.
“I am not talking about a single initiative, pilot project or temporary program,” Judge Lippman said, “but what I believe must be a comprehensive, multifaceted, systemic approach to providing counsel to the indigent in civil cases.”
There was no price tag on the proposal, which could cost many millions of dollars. But Judge Lippman sought to avoid having it fall victim to the politics of the recession by announcing that he would hold hearings before pushing a detailed plan forward next year.
The government has been required to provide lawyers for people facing jail because of criminal charges since a landmark ruling by the United States Supreme Court in 1963, Gideon v. Wainwright.
But that protection has never included civil cases. Lawyers for the poor argue that it should because civil courts are where people who cannot afford lawyers often face the loss of the necessities of life in lopsided legal battles. Opponents say more government-paid lawyers for the poor will paralyze the courts with needless disputes.
Some Democratic legislators said they were interested in Judge Lippman’s idea. In a statement, Speaker Sheldon Silver said the Assembly had been a strong supporter of civil legal services for nearly 20 years.
Austin Shafran, a spokesman for the State Senate Democratic leader, John L. Sampson, said the senator had always supported programs that provided lawyers for indigent New Yorkers and was looking carefully at what Judge Lippman had put forward.
Judge Lippman, a longtime court administrator, has set an unabashedly liberal course as chief judge, a position he assumed last year after he was nominated by Gov. David A. Paterson. In addition to a seat on the highest court in New York, the chief judge also has a broad role as the top administrative official of the state’s sprawling court system.
The speech may well give Judge Lippman national prominence in efforts in recent years by lawyers for the poor, consumer advocates and some legislators around the country to expand the right to a lawyer. California passed a law in 2009 intended to expand legal counsel in civil cases.
There have been local bills elsewhere, including in New York City, and lawsuits in several states arguing that the protections of the legal system are often meaningless to people too poor to hire lawyers. In 2006, the American Bar Association said there should be a right to a lawyer in civil cases where basic human needs were at stake, like those dealing with shelter, sustenance, safety, health or child custody.
Advocates for the right to a lawyer in civil cases — some of them call it a “civil Gideon” right, referring to the 1963 ruling for criminal cases — said Monday that Judge Lippman’s speech was one of the most notable steps in their efforts.
“It is a very important statement, both in New York and nationally, about the need for access to justice. I don’t know that any stronger voice has come forward,” said Donald Saunders, a vice president of the National Legal Aid and Defender Association, the largest national group of lawyers for the poor.
In his speech, Judge Lippman said the recession had swelled the ranks of New Yorkers who could not afford lawyers facing civil legal problems to more than two million a year.
Judge Lippman said he would hold hearings beginning this fall in every part of the state to assess the extent and nature of the unmet need for civil legal representation. He said the hearings would end with recommendations to the Legislature of the kinds of civil cases in which legal representation should be required and what financing would meet those needs.
Legal Aid and other providers of civil legal representation to poor people in New York State operate on about $200 million a year, officials say, a combination of federal, state, local and privately raised money. Those organizations said that they were unable to meet the needs but that the extent of the shortfall was not known.
Steven Banks, the attorney in chief of the Legal Aid Society in the city, called it “a huge step” for the leader of the court system to endorse the idea that poor people had a right to a lawyer, whether they found themselves in criminal or civil court.
Three years ago, when this derivative housing mess caught my attention, the reason I started looking into it was that the basic facts didn’t make any sense. Housing prices had been going up at a rate of as much as 20% in one month.
Coming from Wall Street with an M.B.A. and having studied, written about and commented on economics most of my adult life, I looked for obvious answers. Inflation? Nope, not that. Population increase? Nope not that. Migration patterns? A little but not nearly enough to account for the increases quoted by developers and secondary sellers.
So I asked sales people in real estate how they accounted for it. They told me that in Arizona it was being fueled by people selling their homes in California for $2 million and buying the same thing here in Arizona for less than half that amount. OK that would mean some migratory pattern. Are you from California?, I asked many people. Some. OK. Assume that my little non-scientific survey turned out wrong, and we start with the hypothesis of high prices in California fueling the Arizona boom.
More questions. How does that account for other parts of the country. BY the way, who is buying the homes in California? The story I got was that Vietnamese families were moving into expensive neighborhoods and 20 people comprising multiple generations (Gran Torino with Clint Eastwood? Good movie, but hardly the rule) could afford the $2 million price tag.
So after going down about a dozen rabbit holes my suspicions were raised about Wall Street’s involvement. You see they are the only ones who come up with other people’s money, selling them on a great investment opportunity because that is the only way Wall Street makes money.
Ok the rest is history. Prices went up simply because Wall Street was using a power pump forcing money into the system that the system could not absorb.
So like a balloon, it expanded, especially when the number of housing units sold was going down. The only way they could keep pushing out more money was by inflating the appraisals on the property. As the number of balloons declined relative to the supply of “air” (money) they had to blow the balloons up further and further even though everyone knew they would eventually pop. But they had that covered too, as everyone now knows because they made money on the way down through credit default swaps, federal bailouts etc.
Which brings me to my point. All current indications from the economists and experts who study this sort of thing are that in 20 years, (that is in the year 2030) there may be as many as 30 million unoccupied dwellings in the United States, even taking all the best predictions for population growth, migration etc. And you don’t need to employ an expert to see that there are unoccupied houses in your neighborhood and that there are even unoccupied neighborhoods, thanks to the foreclosure mess. So the inescapable conclusion is that we have built too many homes, shopping centers, office buildings etc. The demand is not there and it isn’t going to be there for decades.
So here is my question: Why are houses still being built? Who is financing them and who is buying them? Why are there government programs providing new home building incentives when what we need are new rail systems, new electrical grid, new high-speed internet, and new technology retrofitting homes that waste energy? Is something funny going on, AGAIN?