“This is the ultimate discovery mechanism that the Banks have been avoiding for 6 years. If it is used properly, at the end of the day everyone will know everything they need to know — where the money came from and where it went, where the documents came from and where they went, who signed them and with what authority, with what knowledge etc. You can ask for proof of the formation and current existence of the trust, its status and an accounting from the Trust for money in and out. If the Banks are forced to actually give up this information both the investors and the borrowers are going to see exactly how they have been screwed.” Neil Garfield, livinglies.me
THE MORE INFORMATION YOU ALREADY HAVE (FROM THE COMBO TITLE AND SECURITIZATION REPORT, LOAN LEVEL ACCOUNTING, FORENSIC ANALYSIS ETC), THE MORE POINTED YOUR QUESTIONS. DO YOUR HOMEWORK!
SEE IMPORTANT WHITE PAPER: National Consumer Law Firm Servicers Why They Foreclose
YOU MUST WRITE DEMAND FOR REVIEW
EDITOR’S NOTE: In an important step (maybe), the Federal regulators are now showing their ire at the Banks who entered into consent decrees in which they were ordered to conduct thorough audits of the accounts they claim they service or own. The Banks have not done it for the same reason they have fought so hard to resist discovery attempts in court — the results will be devastating to the position of the Banks in their court filings, their SEC filings and their reports to regulators. There are several elements listed but the complete list of items are in the actual orders that are posted on this Blog and at OCC website.
A key component I think in this process is that you demand that they explain discrepancies that you have already found and that you ask them about other things that you believe apply to your loan. It is very much like a QWR. You can use the QWR form free on this blog as a form and adapt it. Get a lawyer to draft it and I would suggest that it go out under a lawyer’s letterhead. Make sure the lawyer is licensed in the jurisdiction in which the property is located.
The Banks are already behind schedule on this and they are continuing to stone wall — because in the past it has always worked with the agency accepting far less than what was ordered. You can make the difference by demanding answers and when you don’t get them reporting it to the OCC and Federal Reserve. But better yet, these documents and the method that was used to audit the accounts, must be made available to you. You can demand them from the servicer, the purported owner of the loan, the Federal reserve and the OCC (or OTS if that applies).
I would recommend that in your discovery you ask them to produce their responses to this requirement in the OCC orders, that you question them in interrogatories as to who is in charge of the audit process at the Bank, what their plan is (and provide a copy), who is involved in the audit process at the Bank, what independent consultants they have used — note that they all announced they would use independent consultants), requests for admission based upon their failure to comply with the OCC, OTS and Federal Reserve Consent Decrees, and notices for deposition of the people who are identified as being in charge of the audit process for the Bank. It isn’t enough that they say they outsourced it. Who at the Bank signed the outsource contract? What did the contract say and who has it? To whom does the outsource contractor report? You get the idea, I hope.
Whatever opposition the Bank raises to these questions and demands for discovery should be reported to the regulators as direct proof that the Banks are refusing to comply with the intent of the Order — which is to allow borrowers to know the facts about their mortgage loan — or to be more precise the facts about the origination and chain of events before, during and after the transaction in which their obligation arose.
Here are some questions I would like to see answered on each closing:
- Using UCC as guideline, who was the creditor at the time of the closing?
- Where did the money for the closing come from?
- Where did the money go (the money that was paid by borrower, by third parties, etc.)
- How much money was received from each category of insurance and credit enhancement? By whom was it received?
- What reports were issued to investors? What accounting?
- Relative to the initial money borrowed from investors, what is the current balance due to those investors? How was this figure determined? By whom?
- Is the Bank or Servicer claiming to be an agent of the investors?
- What entity is authorized to sign a satisfaction of mortgage (or release and reconveyance) by virtue of the fact that the amount due to that entity has been paid?
- What are the duties of the trustee with respect to foreclosure on your property?
- What fees and profits were paid to the servicer, trustees, and other third parties in connection with processing your loan origination, processing payments from all sources, and processing foreclosure?
- Have any documents been filed in court or in the title registry that contained signatures of people who were unauthroized to sign on behalf of the entity receiving the benefit of the document filed?
- Have any documents been filed in court or the title registry that contained the signatures of people who had no knowledge of the contents of the document or any data or information supporting the contents of the document?
- Have any documents been filed in court or the title registry that contained information that was untrue? OK, how about information that the servicer or Bank doesn’t know if it was true or not?
- What is the procedure by which information was obtained to initiate foreclosure? Who was in charge of that?
- What is the procedure by which information was obtained to draft affidavits filed in court? who was in charge of that?
- What is the procedure by which modifications are considered? Who is in charge of that?
- What evidence exists that the investors were told of the existence of a modification offer?
- What method was used to evaluate the relative merits of foreclosure versus modification? By whom?
- What are the financial reasons for turning down a modification or short-sale? How is that determined? By whom?
- What are the legal reasons for turning down a modification or short-sale? How is that determined? By whom?
Regulators Begin Offering Foreclosure Reviews to Borrowers
By Lorraine Woellert
(Updates with industry and regulator comments starting in the sixth paragraph.)
Nov. 1 (Bloomberg) — U.S. mortgage servicers have begun offering case reviews to borrowers who may have suffered financial injury from errors and misrepresentations during foreclosure proceedings in 2009 and 2010, according to the Office of the Comptroller of the Currency.
The reviews, announced by the OCC in a statement today, are required under a settlement regulators reached with 14 of the biggest mortgage-servicing firms to resolve complaints over mishandled home seizures. The OCC was joined by the Federal Reserve and the Office of Thrift Supervision in the reaching the April accord with companies including JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co.
The companies have hired independent consultants to review foreclosure actions to determine whether borrowers were harmed and recommend appropriate remediation where necessary, the OCC said today. Letters explaining the review process are being sent to an estimated 4.5 million eligible borrowers, who may request reviews through April 30, 2012, the agency said.
“The challenge is substantial, but the steps we have required the servicers to take are vitally important to resolving these issues in a way that respects the rights of those who have been harmed and helps to restore confidence in the system,” John Walsh, acting Comptroller of the Currency, said in the OCC’s statement.
A record 2.87 million homeowners received foreclosure filings in 2010, surpassing the 2.82 million total for 2009, according to Irvine, California-based RealtyTrac Inc.
The first letters went out today, according to Joe Evers, the OCC’s deputy comptroller for large banks. Borrowers also can request a review at http://www.independentforeclosurereview.com.
Mortgage servicers will run an advertising campaign later this year and work with housing counselors to get word out to eligible borrowers, said Paul Leonard, a Financial Services Roundtable lobbyist who is serving as a spokesman for the firms.
It’s impossible to predict how many borrowers might be awarded compensation or when they might receive it, Leonard said today on a conference call. Regulators will make the final decision on whether borrowers have suffered harm and the amount of any remediation, he said.
The Fed and the OCC, which absorbed the OTS in July, haven’t offered said what might constitute harm to borrowers. Consultants will review company records and homeowner information to make decisions about compensation, according to Evers.
“Between the two sets of information, they should be able to determine if there’s injury or harm,” he told reporters on a conference call.
Companies are being required to conduct the reviews under terms of the consent agreement they reached with regulators to resolve claims that they botched foreclosure paperwork amid the wave of foreclosures stemming from the subprime mortgage crisis. Reports of document robo-signing prompted several lenders to temporarily suspend foreclosures last year.
Servicers signing the accords included JPMorgan, Wells Fargo, Bank of America Corp., Citigroup, Ally Financial Inc.’s GMAC unit, Aurora Bank FSB, EverBank Financial Corp., HSBC Holdings Plc, OneWest, MetLife Inc., PNC Financial Services Group Inc., Sovereign Bank, SunTrust Banks Inc. and US Bancorp.
In addition to compensating harmed borrowers, the banks agreed to improve their foreclosure, loan modification and refinancing procedures by hiring staff, upgrading tracking systems, assigning each borrower a single point of contact, and policing lawyers and vendors.
State attorneys general and the U.S. Justice Department are continuing their own talks with servicers to seek additional relief for homeowners.
–Editor: Gregory Mott
To contact the reporter on this story: Lorraine Woellert in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Lawrence Roberts at email@example.com
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: Ally Financial Inc.’s GMAC unit, Aurora Bank FSB, Bank of America Corp, bankruptcy, borrower, Citigroup, countrywide, disclosure, EverBank Financial Corp., foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, HSBC Holdings Plc, JPMorgan, LOAN MODIFICATION, MetLife Inc., modification, OneWest, PNC Financial Services Group Inc, quiet title, rescission, RESPA, securitization, Sovereign Bank, SunTrust Banks Inc., TILA audit, trustee, US BANK, WEISBAND, Wells Fargo | 31 Comments »