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  • Foreclosure/Standing: final judgment of foreclosure reversed for failure to prove standing at the inception of lawsuit – Verizzo v The Bank of NY Mellon, Case No. 2D15-2508 (Fla. 2d DCA June 21, 2017).
  • 3d DCA June 21, 2017) (involuntary dismissal reversed).
  • Foreclosure/Surplus: pursuant to section 45.033, Florida Statutes, surplus foreclosure proceeds are generally disbursed to owner of record (except in certain limited circumstances) and trial court erred by disbursing the proceeds to purchaser at foreclosure sale – Rodriguez, et al. v Federal National Mortgage Assoc., Case No. 5D17-196 (Fla. 5th DCA June 23, 2017) (reversed and remanded)
  • Foreclosure/Conditions Precedent: testimony of lender’s practice of creating and mailing breach letters and business record reflecting mailing raised a presumption that a breach letter was mailed to the borrower by first class mail in accordance with standards and in compliance with the mortgage’s notice requirements – Citibank, N.A., Trustee, et al. v Manning, et al., Case No. 4D15-4526 (Fla. 4th DCA June 21, 2017)
  • Foreclosure: “[w]ithout evidence showing that a modified credit agreement exists [between a foreclosing bank and a borrower, a] modified mortgage is insufficient to establish the increased amount [the foreclosing bank] claims it is owed” – Chuchian v. Situs Investments, LLC, Case No. 5D15-2125  (Fla. 5th DCA June 2, 2017) (reversed and remanded).
  • Foreclosure/Standing/Lost Note: if plaintiff did not have right to enforce note when lost, plaintiff should present evidence of assignment from payee to plaintiff or affidavit of ownership – Peters v. The Bank of New York Mellon, Case No. 2D15-2222 (Fla. 2d DCA May 26, 2017) (Reversed and remanded with directions.)
  • Foreclosure/Standing/Assignment: assignment of mortgage, but not note, insufficient to prove standing – Peters v. The Bank of New York Mellon, Case No. 2D15-2222 (Fla. 2d DCA May 26, 2017) (Reversed and remanded with directions.)
  • Foreclosure/Standing: lender failed to prove standing because original allonge to note not filed before or at trial – Mathis v Nationstar Mortgage, LLC, Case No. 2D15-2782 (Fla. 2d DCA May 26, 2017) (Reversed and remanded with directions.)
  • Condition Precedent/Foreclosure: notice to borrower of terms of default and action required to cure constitutes substantial compliance with paragraph 22 default notice in mortgage – U.S. Bank National Assoc., Trustee v Doepker, Case No. 2D15-5307 (Fla. 2d DCA May 24, 2017) (Reversed and remanded.)
  • Due Process: violation of procedural due process occurred when trial court considered and adjudicated matters beyond those noticed for hearing – Nationstar Mortgage, LLC v Weiler, Case No. 2D16-1607 (Fla. 2d DCA May 26, 2017) (Reversed and remanded.)
  • Standing/Foreclosure: lender not entitled to evidentiary inference that it possessed original note at time of filing foreclosure action because copy attached to complaint did not have loan numbers and, therefore, was not “identical” to original note, with loan numbers – Friedle v The Bank of NY Mellon, et al., Case No. 4D15-1750 (Fla.  4th DCA May 24, 2017)
  • Vacating Dismissal: voluntary dismissal filed by clerical error should have been vacated pursuant to 1.540(b) where evidence showed inadvertence of filing – Wells Fargo Bank, N.A. v Rojas, Case No. 4D16-4301 (Fla. 4th DCA May 24, 2017) (Reversed and remanded.)
  • Lis Pendens: possible financial harm, by way of loss of potential sale of property, not enough to show requisite irreparable harm imposed by trial court’s denial of motion to dissolve lis pendens – Landmark at Crescent Ridge, L.P. v. Everest Financial, Inc., No. 1D16-4532 (Fla. 1st DCA May 16, 2017) (petition for writ of certiorari dismissed)
  • Proposal for Settlement: proposal for settlement complied with rule 1.442 in inverse condemnation case where plaintiff did not raise any equitable claims for relief in its complaint – Polk County v. Highlands-in-the-Woods, L.L.C., No. 2D15-5642 (Fla. 2d DCA May 19, 2017) (reversed and remanded)
  • Foreclosure/Attorneys’ Fees: plaintiff not entitled to attorneys’ fees where failed to present expert testimony as to reasonableness of attorney’s hourly rate and hours expended – Sciandra v. Pennymac Corp., No. 2D15-5189 (Fla. 2d DCA May 19, 2017) (affirmed in part; reversed in part; remanded with instructions)
  • Foreclosure/Statute of Limitations: accrual of cause of action for each missed monthly installment payment accrues the day after each is due to be paid, not on the date of acceleration of entire balance – Ventures Trust 2013-I-NH v. Johnson, No. 5D16-1020 (Fla. 5th DCA May 19, 2017) (affirmed)
  • Short Sale/Statute of Limitations:  one-year statute of limitations to bring deficiency action, contained in Florida Statute 95.11(5)(h), is not applicable to an action after a short sale – Bush v. Whitney Bank et al., No. 5D16-2344 (Fla. 5th DCA May 19, 2017) (affirmed)
Closing instructions: issue of whether purchaser provided closing instructions and whether instructions were required by law, policy, custom or practice to be in writing is a genuine issue of material fact underlying breach of contract action, where closing agent who was provided with borrower’s verbal closing instructions was title insurer’s escrow, title and closing agent – Johnson v. U.S. Title Agency, Inc., Case No. 103665 (Ohio Dist. Ct. App. May 18, 2017) (reversing and remanding summary judgment)
Closing instructions: borrower has standing to bring action against closing, title and escrow agent for agent’s failure to comply with lender’s closing instructions where instructions contained a provision that agent will be liable for bank’s losses – Johnson v. U.S. Title Agency, Inc., Case No. 103665 (Ohio Dist. Ct. App. May 18, 2017) (reversing and remanding summary judgment)
Created, Suffered or Assumed: insured not required to act intentionally or wrongfully under Exclusion 3(a); rather, the Exclusion applies if the insured either expressly or impliedly assumed or agreed to the defects or encumbrances in the course of purchasing the property involved – Bank of America v. Chicago Title Ins. Co., Case No. 17 C 0407 (N.D. Ill. May 18, 2017) (denying motion to dismiss counterclaim)
Fraudulent Transfers: Utah’s Fraudulent Transfer Act does not provide a cause of action against individual directors of a corporate entity, and unless insurer brings a claim to pierce the corporate veil against the corporate entity causing the transfer it cannot prevail against the principals of the corporation – First American Title Ins. Co. v. Nat’l Title Agency, LLC, Case No. 2:13CV1055DAK (D. Utah, May 19, 2017) (granting summary judgment)
  • Foreclosure/Attorneys’ Fees: mortgage foreclosure plaintiffs seeking attorney’s fees must support their claim with competent, substantial evidence of the number of hours worked and evidence that those hours and hourly rate are reasonable – Henderson v. Onewest Bank FSB, No. 1D16-2670 (Fla. 1st DCA April 18, 2017) (reversed and remanded in part).
  • Foreclosure/Standing: plaintiff failed to provide evidence that indorsee had intent to transfer any interest to plaintiff when note was transferred into trust – Shaffer v. Deutsche Bank National Trust, as Indenture Trustee for American Home Mortgage Investment Trust 2006-1, Mortgage Backed Notes, Series 2006-1, No. 2D14-4205 (Fla. 2d DCA April 19, 2017) (reversed and remanded).
  • Foreclosure/Lack of Prosecution: “close enough” is not “good enough” where plaintiff’s good cause showing was filed 4 days before hearing, as opposed to minimum 5 day requirement under rule 1.420(e) – Held v. U.S. Bank National Association, as Trustee for C-BASS 2007-CB7 Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-CB7, et al., No. 4D15-499 (Fla. 4th DCA April 19, 2017) (reversed and remanded).
  • Foreclosure/Standing: plaintiff, as nonholder in possession, failed to prove series of transactions through which it acquired note starting with first holder of note – Powell v. Wells Fargo Bank, N.A. as Trustee for Structured Asset Mortgage Investments II, Inc., GreenPoint Mortgage Funding Trust 2006-AR2, Mortgage Pass-Through Certificates, Series 2006-AR2, No. 4D15-3013 (Fla. 4th DCA April 19, 2017) (reversed and remanded).
  • Foreclosure/Appeal: order granting summary judgment for borrowers and dismissing case without prejudice to lender’s filing a new foreclosure action was final appealable order – Bank of New York Mellon v. Swain, No. 5D16-139 (Fla. 5th DCA April 21, 2017) (dismissed).
  • Foreclosure/Conditions Precedent: plaintiff’s notice of default substantially complied with notice provision contained in paragraph 22 of mortgage – U.S. Bank Trust, N.A., etc. v. Wellman, No. 3D15-1368 (Fla. 3d DCA Apr. 12, 2017) (reversed and remanded)
  • Dismissal with Prejudice: trial court improperly dismissed with prejudice pro se plaintiff’s complaint against lender for, among other things, unauthorized entry and conversion of personal property, and plaintiff should have been permitted to amend – Hanna-Mack v. Bank of Am., N.A., No. 3D16-1897 (Fla. 3d DCA Apr. 12, 2017) (reversed and remanded to permit amendment of complaint)
  • Foreclosure/Assignment of Rents: where there was no agreement between the parties to assign rents or other basis for sequestering rents, and the rents were not the subject of the litigation, trial court lacked authority to order that rents be deposited into court registry – UV Cite III, LLC v. Deutsche Bank Nat’l Trust Co., as Trustee, No. 3D16-2341 (Fla. 3d DCA Apr. 12, 2017) (reversed and remanded)
  • Foreclosure/Attorneys’ Fees: party that successfully prevailed in obtaining dismissal with prejudice of foreclosure action based on lack of standing pursuant to contract sued upon not entitled to an attorneys’ fees award pursuant to contract’s attorneys’ fee provision – Nationstar Mortg. LLC v. Glass, No. 4D15-4561 (Fla. 4th DCA Apr. 12, 2017) (denying motion for fees, and denying without prejudice request for costs)
  • Foreclosure/Reverse Mortgage: language in reverse mortgage was patently ambiguous regarding whether spouse of decedent was a “borrower” under its terms, and extrinsic evidence was necessary to resolve this factual question – Nationstar Mortg. Co. v. Levine, No. 4D16-615 (Fla. 4th DCA Apr. 12, 2017) (reversing entry of summary judgment)
  • Foreclosure/Business Records Hearsay Exception: bank satisfied predicate necessary for admission of prior servicers’ loan payment histories, having presented detailed testimony regarding the “on-boarding” process utilized by current servicer to verify information received from prior servicers – Bank of New York Mellon f/k/a Bank of New York Successor Trustee v. Vessels, No. 5D15-4248 (Fla. 5th DCA Apr. 13, 2017) (reversed and remanded for new trial on issue of damages)
  • Foreclosure: foreclosing bank’s allegation that borrowers were in a continuing state of default sufficient to satisfy five-year statute of limitations even though stated initial default date was more than five years prior to foreclosure complaint – Desylvester v. Bank of New York Mellon, Case No. 2D15-5053  (Fla. 2d DCA February 22, 2017) (affirmed)
  • Appellate Jurisdiction:  denial of motion to vacate writ of possession not an appealable non-final order because not set forth in Rule 9.130(a)(3) – Nacius v. One West Bank, FSB, Case No. 4D16-2853 (Fla. 4th DCA February 22, 2017) (appeal dismissed)
  • Foreclosure; Intervention: intervention by purchaser of real property after final judgment of foreclosure entered should not have been allowed; trial court departed from essential requirements of law in permitting purchaser to intervene – Federal National Mortgage Association v. Gallant, Case No. 4D16-3152  (Fla. 4th DCA February 22, 2017) (quashing order and remanding)
  • Foreclosure; Paragraph 22: summary judgment improper where foreclosing bank failed to include mention of its paragraph 22 acceleration letter in affidavit in support of summary judgment to show it complied with conditions precedent to foreclose – Galloway v. Suntrust Bank, et al., Case No. 5D14-2878  (Fla. 5th DCA February 24, 2017) (reversed and remanded)
  • Foreclosure/Vacating Judgment: estate failed to either allege or prove any basis under Rule 1.540 to vacate final judgment of foreclosure to which it had consented – The Bank of N.Y. Mellon v. Estate of Peterson, No. 2D16-2405 (Fla. 2d DCA Jan. 18, 2017) (reversing and remanding for reinstatement of final judgment).
  • Foreclosure/Claim for Surplus Funds: sec. 45.031, Fla. Stat. requires that any person claiming a right to surplus funds file a claim with the clerk no later than sixty days after the foreclosure sale itself, not within sixty days of the certificate of sale, and, therefore, bank’s claim for surplus funds untimely  – The Bank of N.Y. Mellon, as Trustee v. Glenville, No. 2D15-5198 (Fla. 2d DCA Jan. 20, 2017) (affirmed)
  • Foreclosure/Vacating Judgment: trial court lacked jurisdiction to entertain borrower’s motion to vacate foreclosure judgment, which asserted lender’s counsel committed fraud on court in representing that borrower and her counsel were not present in the court room for trial when their case was called, because borrower’s motion was filed over a year after entry of judgment and, therefore, was untimely under rule 1.540(b)(3) – Romero v. Wells Fargo Bank, N.A., as Trustee, No. 2D15-5270 (Fla. 2d DCA Jan. 20, 2017) (vacating and remanding with instructions)
  • Deficiency/Subject Matter Jurisdiction: approving the 3d DCA’s opinion that an assignee of a foreclosure judgment can maintain a separate action for deficiency under Florida Statutes, Section 702.06, even when foreclosure court retains jurisdiction to adjudicate deficiency in foreclosure action – Dyck-O’Neal, Inc. v Konstantino, Case No. 2D15-4064 (Fla. 2d DCA Dec. 9, 2016) (reversed and remanded; certifying conflict with Higgins v. Dyck-O’Neal, Inc., 41 Fla. L. Weekly D1376 (Fla. 1st DCA June 9, 2016), certified)).
  • Default: Florida Rule of Civil Procedure 1.500 precludes entry of default when defendant has served response to complaint, even if response was not filed within the time granted by the trial court – Sansbury v Wells Fargo Bank, N.A., Case No. 5D15-1956 (Fla. 5th DCA Dec. 9, 2016) (reversed and remanded).
  • Foreclosure/Conditions Precedent: a breach of a condition precedent does not preclude the enforcement of an otherwise valid contract, absent some prejudice – Liberty Home Equity Solutions, Inc. v Raulston, et al., Case No. 4D15-3652 (Fla. 4th DCA Dec. 7, 2016)
  • Foreclosure/Standing: attaching a copy of the note to the complaint and presenting the original note in the same condition at trial creates an inference that the plaintiff was in actual possession of the note at the time the complaint was filed, which, absent evidence to the contrary, is sufficient to establish standing – The Bank of NY Mellon v Milford, et al., Case No. 4D15-4813 (Fla. 4th DCA Dec. 7, 2016).
  • Foreclosure/Lack of Jurisdiction: trial court lacked jurisdiction to impose sanction against bank for filing allegedly frivolous foreclosure action because bank had voluntarily dismissed the case within the safe harbor period under section 57.105(4), Florida Statutes – Bank of Am. v. Turkanovic, No. 1D16-3416 (Fla. 1st DCA Dec. 1, 2016) (granting bank’s petition for writ of prohibition)
  • Foreclosure/Improper Expert Testimony: trial court, in finding that trust lacked standing, relied solely on improper legal conclusions of borrower’s expert that trust documents did not allow for trust to acquire subject note and that trust was not the holder of the note – Citibank, N.A., etc. v. Olsak, No. 3D15-1032 (Fla. 3d DCA Nov. 30, 2016) (reversing involuntary dismissal, and remanding for further proceedings)
  • Foreclosure/Authenticity of Signature: even though borrower failed to place bank on notice in her pleadings that she was challenging the authenticity or validity of her signature, trial court allowed borrower to present testimony on that issue, and trial court’s ultimate determination that borrower signed the loan documents was supported by competent, substantial evidence – Polonsky v. HSBC Bank USA, N.A., etc., No. 3D16-371 (Fla. 3d DCA Nov. 30, 2016) (affirmed)
  • Foreclosure/Attorneys’ Fees: because defendants ultimately placed plaintiff bank on notice of their unpled claim for attorneys’ fees, and bank failed to timely object to defendants’ failure to plead entitlement, trial court’s judgment awarding attorneys’ fees to defendants was proper – BankUnited, N.A. v. Ajabshir, No. 3D16-872 (Fla. 3d DCA Nov. 30, 2016) (affirmed)
  • Foreclosure/Damages: bank provided competent, substantial evidence of some, but not all, of its damages in foreclosure action – Tervil v. U.S. Bank, Nat’l Ass’n, as Trustee, No. 4D15-2561 (Fla. 4th DCA Nov. 30, 2016) (affirmed in part, reversed in part, and remanded with instructions)
  • Foreclosure/Condition Precedent: trial court erred by requiring borrower to raise bank’s noncompliance with condition precedent, specifically the HUD regulation’s requirement under 24 C.F.R. § 203.604 concerning face-to-face counseling, as an affirmative defense where borrower specifically denied the bank’s compliance with that HUD regulation in her answer, thereby shifting burden back to bank to prove such compliance at trial – Palma v. JPMorgan Chase Bank, Nat’l Ass’n, et al., No. 5D15-3358 (Fla. 5th DCA Dec. 2, 2016) (reversed, and remanded with instructions to enter an involuntary dismissal)
  • Foreclosure/Intervenor: intervenor cannot inject an unpled, waived defense of a defaulted party for the court’s adjudication – Ventures Trust 2013-I-H-R, as successor in interest to JPMorgan Chase Bank, National Association. v. Asset Acquisitions and Holdings Trust, No. 2D15-1923 (Fla. 2d DCA October 28, 2016) (reversed and remanded).
  • Foreclosure/Default Notice/Summary Judgment Evidence: defendants’ summary judgment and dismissal of complaint reversed where defendants’ affidavits were insufficient on their face to establish entitlement to judgment as a matter of law, where affidavits did not address whether plaintiff fulfilled the notice requirement by sending the notice via first class mail – JPMorgan Chase Bank N.A. v. Ostrander, No. 2D15-3935 (Fla. 2d DCA October 28, 2016) (reversed and remanded).
  • Foreclosure/Standing: plaintiff failed to establish it had standing to foreclose, where only proof of standing was a screen shot of a computer-generated document referred to as a Loan Transfer History – Miller v. Bank of America, N.A., et al, No. 5D15-780 (Fla. 5th DCA October 28, 2016) (reversed and remanded).
  • Offers of Judgment/Attorneys’ Fees: offers for settlement that failed to state whether they included attorneys’ and whether attorneys’ fees were part of the legal claim were not invalid where attorneys’ fees were not sought in the pleadings; accordingly, the Florida Supreme Court declined to invalidate offers of judgment solely for violating a requirement of rule 1.442 of the Florida Rules of Civil Procedure that section 768.79, Florida Statutes, does not require – Kuhajda v. Borden Dairy Co. of Alabama, LLC., No. SC15-1682 (Fla. Oct. 20, 2016)
  • Foreclosure/Standing: plaintiff failed to present sufficient proof showing it had standing to enforce a note containing an undated blank endorsement at the time it commenced foreclosure action – Walton v. Deutsche Bank Nat’l Trust Co., as Trustee, No. 1D15-3761 (Fla. 1st DCA Oct. 19, 2016) (reversed and remanded for entry of an order of dismissal)
  • Foreclosure/Subject Matter Jurisdiction: trial court’s jurisdiction in foreclosure action expired prior to entry of summary final judgment because court had previously dismissed bank’s complaint for failure to comply with court order requiring it to file original documents and no rehearing, notice of appeal, or motion for relief was filed – Franklin v. Bank of America, N.A., No. 1D15-4296 (Fla. 1st DCA Oct. 19, 2016) (reversed and remanded for entry of an order of dismissal)
  • Foreclosure/Service of Process: borrower did not waive objection to service of process by making an appearance in case by filing a motion for extension of time to respond to complaint – Keeter v. The Bank of New York Mellon f/k/a The Bank of New York, as Trustee, No. 1D15-1814 (Fla. 1st DCA Oct. 21, 2016) (reversed and remanded for further proceedings)
  • Foreclosure/Jurisdiction: trial court erred in granting motion for leave to amend filed by bank’s successor, which sought to assert counts for breach of promissory note and equitable lien, because a final judgment of foreclosure had already been entered and could not be reversed nor reopened – Garcia v. Christiana Trust, etc., No. 3D16-735 (Fla. 3d DCA Oct. 19, 2016) (granting petition for writ of certiorari and quashing order)
  • Foreclosure: debtor that agreed to “surrender” property in bankruptcy was required to surrender the property to the bankruptcy trustee and secured creditor, and lost right to defend secured creditor’s foreclosure action pending in state court – Failla v Citibank, N.A., Case No. 15-15626 (11 Cir. Oct. 4, 2016) (affirmed)
  • Standing: borrower lacked standing to sue lender for violating statute that required timely recording of satisfaction of mortgage where satisfaction was recorded before borrower filed suit and borrower failed to allege he had suffered damages as a result of the delay – Nicklaw v Citimortgage, Inc., Case No. 15-14216 (11 Cir. Oct. 6, 2016) (appeal dismissed for lack of jurisdiction)
  • Foreclosure/Safe Harbor Limitation on Condo Assessments: holder of note and mortgage, who was not also owner, having foreclosed mortgage on property and purchased it at foreclosure sale, is entitled to the safe harbor limitation of liability on condominium assessments applicable to first mortgagees under section 718.116, Fla. Stat. – Brittany’s Place Condominium Assoc., Inc. v U.S. Bank, N.A., Case No. 2D15-3444 (Fla. 2d DCA Oct. 5, 2016) (affirmed)
  • Foreclosure/Standing: where copy of note attached to foreclosure complaint contained no endorsement and original note presented at trial had endorsement in favor of plaintiff, plaintiff required to prove endorsement occurred prior to filing suit to prove standing – Dhank v. HSBC Bank USA, NA, Trustee, Case No. 2D13-5292 (Fla. 2d DCA Sept. 9, 2016) (judgment reversed)
  • Sanctions/Dismissal With Prejudice: trial court erred by dismissing foreclosure action with prejudice as sanction for plaintiff’s failure to timely file certification of authority prior to mediation, as required by Fla. R. Civ. P. 1.720, where rule provides less severe and more appropriate sanctions – HR Block Bank v. Perry, Case No. 2D15-1351, 1624 (Fla. 2d DCA Sept. 9, 2016).
  • Ejectment: plaintiff proved prima facia case to eject defendant from real property because plaintiff had possession of original deed from grantor, and trial court erred by dismissing claim for plaintiff’s failure to present evidence that grantor was competent at time she signed deed because burden to prove defense fell on defendant – Marcinkewicz v. Quattrocchi, Case No. 3D15-1068 (Fla. 3d DCA Sept. 7, 2016) (affirmed in par, reversed in part and remanded).
  • Foreclosure/Standing: plaintiff failed to prove standing to foreclose mortgage where it did not put in evidence that it had possession of note at time suit filed, and proof that note was part of asset purchase agreement was insufficient to support standing – Diroberto v. Bayview Loan Services, LLC, et al., Case No. 4D15-749 (Fla. 4th DCA Sept. 7, 2016) (judgment reversed)
Unjust Enrichment: Title insurer entitled to judgment on unjust enrichment claim when it was forced to pay off borrower’s prior mortgage to protect insured lender due to borrower’s failure to remit loan proceeds for release of prior mortgage, but damages would be reduced based upon borrower’s reasonable reliance on advice of counsel – Fidelity Nat’l Title Ins. Co. v. Harlow, Adams & Friedman, P.C., Case No. CV1160218695 (Conn. Sup. Ct. Jul. 25, 2016) (memorandum decision)
  • Foreclosure/Standing/Hearsay:  copy of a note with undated allonge containing blank endorsement sufficient to establish standing as a matter of law, even though bank did not have formal assignment of mortgage at time of filing complaint; also, certified copy of a publicly recorded document is self-authenticating; thus objection to lack of foundation, as to mortgage, is without merit – Wells Fargo Bank, N.A. as Trustee, on behalf of the Holders of the Harborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2006-12 v. Ousley et al., No. 1D15-2100 (Fla. 1st DCA June 15, 2016) (reversed and remanded)
  • Foreclosure/Notice of Default: applying substantial compliance standard held in Green Tree Servicing, LLC v. Milam, 177 So. 3d 7, 13 (Fla 2d DCA 2015), court reasoned that comparison of text of notice letter to requirements of paragraph 22 will often be all that is necessary to enable court to determine whether lender substantially complied with its requirements – Federal National Mortgage Association v. Morton et al., No. 2D14-5165 (Fla. 2d DCA June 15, 2016) (reversed and remanded)
  • Foreclosure/Standing: plaintiff failed to establish standing at time foreclosure filed where original note never filed with court and no other evidence of possession presented to court – Cruz v. JPMorgan Chase Bank, National Association, as Successor in Interest to Washington Mutual Bank, formerly known as Washington Mutual Bank, F.A., No. 4D14-3799 (Fla. 4th DCA June 15, 2016) (reversed and remanded)
  • Post-Judgment Interest: 2011 amendment to section 55.03, Fla. Stat., which changed judgment interest rate from a fixed rate established on date of judgment to a variable rate that adjusts January of each year, does not apply to judgments entered prior to effective date of amendment – Townsend v. R.J. Reynolds Tobacco Co., Case No. SC15-722 (Fla. June 9, 2016) (reversed and remanded).
  • Deficiency Judgment: if creditor requests a deficiency judgment in a foreclosure action and court reserves jurisdiction to grant or deny a deficiency, creditor is bared from filing separate action at law to recover on promissory note – Higgins v. Dyck-O’Neal, Inc., Case No. 1D15-4784 (Fla. 1st DCA June 9, 2016) (reversed).
  • Loan Modification: borrower that signed and returned loan modification agreement to lender by mail, and made first three payments due thereunder, which were accepted by lender, was sufficient to support finding of an enforceable agreement, despite evidence that lender had no record of having received signed loan modification – Nowlin v. Nationstar Mortgage LLC, Case No. 2D15-331 (2d DCA June 10, 2016) (reversed and remanded).
  • Attorneys’ Fees: defendant that denied signing note and mortgage could not recover attorneys’ fees upon dismissal of action by lender because only parties could claim rights under the loan documents – Florida Community Bank, N.A., etc. v Red Road Residential, LLC, etc., Case No. 3D15-2039 (Fla. 3d DCA June 8, 2016) (reversed).
  • Standing: substituted plaintiff must prove standing to foreclose by evidence that original plaintiff had standing – Fallon Rahima Jallali v. Christiana Trust, Case No. 4D14-2369 (Fla. 4th DCA June 8, 2016)(reversed and remanded).
  • Standing: loan servicer did not prove standing to foreclose mortgage due to lack of evidence that note secured by mortgage was an asset of prior entity at time it merged into servicer – Vogel v. Wells Fargo Bank, N.A., Case No. 4D15-132 (Fla. 4th DCA June 8, 2016).
  • Standing: if original note presented into evidence is in same condition as copy attached to complaint, court may infer plaintiff had actual possession of original at time of filing and has standing to maintain lawsuit absent evidence to contrary – Meilleur v. HSBC Bank USA, N.A., Case No. 4D15-117 (June 8, 2016).
  • Foreclosure/Requests for Admission: trial court erred by involuntarily dismissing foreclosure action based solely on lender’s failure to respond to requests for admission because lender’s pleadings, discovery responses, and/or trial evidence contradicted technical admissions and no prejudice was demonstrated – HSBC Bank USA, etc., v. Parodi, No. 3D15-652 (Fla. 3d DCA May 4, 2016) (reversed and remanded)
  • Foreclosure/Conditions Precedent: trial court applied incorrect strict compliance standard in evaluating whether lender’s default notice complied with paragraph 22 of mortgage; default notice is sufficient if it substantially complies with mortgage’s default notice provision – Wells Fargo Bank, N.A., etc. v. Hernandez & Silva Enters., Inc., No. 3D15-702 (Fla. 3d DCA May 4, 2016) (reversing summary judgment)
  • Foreclosure/Trial Witness: trial court erred in dismissing lender’s foreclosure action based on unavailability at trial of lender’s same corporate representative designee who was deposed, even though another corporate representative witness was disclosed; prejudice was neither demonstrated nor properly considered by trial court – Nationstar Mortg., LLC v. Castro, No. 3D15-1855 (Fla. 3d DCA May 4, 2016) (reversing and remanded)
  • Equitable Lien: imposition of equitable lien was improper because (1) there was no evidence of written document demonstrating any intent to subject real property at issue to security interest, (2) no evidence supported any conduct on plaintiff’s part that would justify imposition of lien, (3) borrower’s property interest in real property was not enriched by his payment of amounts due under loan documents, and (4) plaintiff was not unjustly enriched by receipt of the payments made by borrower out of portion of funds obtained from purported lienor – Wichi Mgmt. LLC v. Masters, No. 3D15-1873 (Fla. 3d DCA May 4, 2016) (reversed, finding no legal or equitable basis for lien)
  • Foreclosure/Enforcement of Settlement Agreement: lower court should have enforced settlement agreement when both parties mutually assented to the agreement, despite bank’s inability thereafter to produce original note when it sought entry of consent judgment and at trial – U.S. Bank Nat’l Ass’n, as Trustee v. Benoit, No. 4D14-4052 (Fla. 4th DCA May 4, 2016) (reversed and remanded for entry of consent final judgment of foreclosure)
  • Foreclosure/Reestablishment of lost note: plaintiff failed to prove necessary elements to reestablish lost note because it did not prove that it acquired note from a person entitled to enforce note when loss of possession occurred – Robelto v. U.S. Bank Trust, N.A., as Trustee, No. 4D14-4721 (Fla. 4th DCA May 4, 2016) (reversed for entry of judgment for homeowners)
  • Foreclosure/Attorneys’ Fees: stay of second foreclosure action should have been entered until plaintiff paid attorney’s fees award in defendant’s favor from plaintiff’s predecessor’s previously dismissed foreclosure action against same property – Villalona v. 21st Mortg. Corp., No. 4D15-4151 (Fla. 4th DCA May 4, 2016) (granting defendant’s petition for writ of certiorari, and quashing order denying defendant’s motion to stay)
  • Foreclosure/Separate Deficiency Action: post-foreclosure deficiency action was proper notwithstanding foreclosure judgment’s reservation of jurisdiction to consider entry of deficiency in foreclosure action – Cheng v. Dyck-O’Neal, Inc., No. 4D16-57 (Fla. 4th DCA May 4, 2016) (affirming order denying Rule 1.540 motion)
  • Foreclosure/Standing: trial court erred in finding (1) that bank did not have standing to foreclose because evidence showed that loan was never transferred and bank, as a result of merger, had standing, and (2) that note and mortgage were void because original lender was not incorporated when the loan was made, was not a licensed mortgage lender in Florida, and did not have authority to do business in Florida – Bank of Am., N.A., etc. v. Nash, No. 5D14-4511 (Fla. 5th DCA May 6, 2016) (reversing judgment and remanding for entry of judgment in favor of bank)
  • Homestead: Florida’s homestead exemption (protection from creditors) applies to that portion of funds derived from sale of homestead property that (i) seller intends to reinvest in a new homestead within reasonable time, (ii) has not commingled with other funds, and (iii) have been held separate and apart and solely for purpose of acquiring new homestead – JBK Associates, Inc. etc. v. Sill Bros., Inc., et al., No. SC15-977  (Fla. April 28, 2016).
  • Foreclosure: lender not precluded from collecting on defaulted note because prior foreclosure action accelerating payment on default has been dismissed; also, pursuant to 95.281(1)(a), Fla. Stat. (2013), mortgage lien terminates 5 years after date of maturity shown on face of mortgage – Balaguer v. Chase Home Financial, LLC, No. 3D14-2801 (Fla. 3d DCA April 27, 2016) (dismissal affirmed).
  • Dismissal: trial court has neither authority under rule 1.540 nor inherent authority to grant relief from a voluntary dismissal where fraud on the court is alleged but no affirmative relief has been granted to dismissing party – U.S. Bank National Association, etc. v. Gladys Rivera, et al., No. 3D15-1415 (Fla. 3d DCA April 27, 2016) (quashing orders).
  • Foreclosure: final judgment reversed and remanded for further proceedings because included interest, attorneys’ fees and other expenses unsupported by competent substantial evidence – Hovannesian v. Pennymac Corp., et al., No. 4D14-3088  (Fla. 4th DCA April 27, 2016).
  • Abandonment of Relief: trial court had inherent authority to declare post-judgment motion for fees and costs abandoned when motion not set for hearing for 18 months and trial court did not err in denying motion for rehearing – Grosso v. HSBC Bank USA, NA, No. 4D14-3971; Ramos v. Deutsche Bank National Trust Co., Trustee, No. 4D14-3981; Berenson v. Deutsche Bank National Trust Co., Case No. 4D14-3985 (Fla. 4th DCA April 27, 2016).
  • Standing: trial court could not take judicial notice of common known fact of affiliation between servicer and lender where no timely and sufficient request for judicial notice under section 90.203, Fla. Stat. – Reynolds v. Nationstar Loan Services, LLC, No. 4D14-4045 (Fla. 4th DCA April 27, 2016).
  • Foreclosure: trial court erred in entering judgment in favor of lender for past due amounts and foreclosure where lender failed to comply with notice requirements in mortgage; instead, case should have been dismissed – Miller v. The Bank of NY Mellon, et al., No. 4D15-36 (Fla. 4th DCA April 27, 2016).
  • Default/Amended Pleading: lender that added lost note count after it obtained a default against homeowners, but did not serve homeowners with amended complaint, not entitled to judgment on lost note and required reversal of foreclosure judgment – Kitchens v. Nationstar Mortgage, LLC, No. 4D15-617 (Fla. 4th DCA April 27, 2016).
  • Foreclosure/Standing: bank failed to establish through documents or testimony that it owned or held the indorsed note with allonge when bank filed foreclosure complaint –Sorrell v. U.S. Bank Nat’l Ass’n, as Trustee, No. 2D14-3883 (Fla. 2d DCA Apr. 6, 2016) (reversed and remanded for dismissal)
  • Foreclosure/Standing: bank did not prove that endorsement of note occurred and allonge was affixed prior to filing original complaint – Elman v. U.S. Bank, N.A., as Trustee, No. 4D14-2520 (Fla. 4th DCA Apr. 6, 2016) (reversed and remanded for entry of judgment for borrowers)
  • Foreclosure/Business Records: bank failed to prove amounts due and owing because bank’s witness did not lay proper foundation for admission of payment history under business records exception to hearsay – Maslak v. Wells Fargo Bank, N.A., as Trustee, Nos. 4D14-4672, 4D14-4673, 4D14-4707 (Fla. 4th DCA Apr. 6, 2016) (affirming judgment of foreclosure but remanding for further proceedings to establish amounts due and owing)
  • Foreclosure/Reformation: in bank’s action seeking foreclosure and reformation of mortgage, bank introduced clear and convincing evidence showing that a mistake was made, as required for reformation, but did not show what the actual agreement was between originally contracting parties– Losner v. HSBC Bank USA, N.A., as Trustee, No. 4D15-493 (Fla. 4th DCA Apr. 6, 2016) (affirming trial court’s judgment with respect to standing, reversing on reformation count, and remanding for entry of money judgment in lender’s favor)
  • Foreclosure/Standing: trial court did not abuse its discretion in determining bank’s witness was competent to testify and in admitting loan history records into evidence; bank’s notice of default substantially complied with paragraph 22; unclear whether HUD notice and face-to-face meeting conditions precedent applied but borrowers’ evidentiary burden to establish – Diaz v. Wells Fargo Bank, N.A., No. 5D15-1612 (Fla. 5th DCA Apr. 8, 2016) (affirmed)

MERS and Securitization

Investors and borrowers were thus left in a transaction they didn’t know existed and without any documentation to show for it. MERS was essential to fill that void with the creation of fabricated written instruments that appear to be facially valid.
In the end all claims of every nature whose validity relied upon the existence of legal documents and actual transactions were and remain false if those documents and transactions were tied to false claims of securitization.
Get a consult! 202-838-6345 to schedule CONSULT, leave message or make payments.
Excerpt from Garfield’s Guide to Foreclosure Defense
There are three flavors of securitization of loans:
  1. The concept of sharing risk in a large pool of loans
  2. The documents creating the infrastructure for securitization
  3. The actual transactional behavior of the participants
There is nothing wrong, illegal, immoral or unethical with the concept. In theory it creates an environment in which loans become more readily available. The drawback is that loans are generally not approved at the local level. And once the originator sells the loan into the secondary market, workouts of defaults become more difficult or even impossible because it is in the interest of the participants to avoid dismantling the securitization structure around any loan or group of loans. Thus in theory it does create a conflict between laws governing servicing and modification (workout) of loans.
The documents created are generally in three different classes — (a) sales of securities issued by a REMIC Trust or other Special Purpose Vehicle created by a trust instrument or other organizing document (b) the documents of transfer of the loans and the trading of loans and the securities issued by the REMIC Trust and other securities whose value is derived from the certificates issued by the REMIC Trust and (c) the documents prepared for an originator to close and sell the loan being securitized. As we shall see below, a fourth class was created in real life: documents fabricated for foreclosure actions.
In practice it is a virtual certainty that none of the transactions in the above three classes of documents were ever properly settled, thus obscuring the identity of and even the existence of the investors, the Trusts and any group that could be considered a real party in interest. Thus the sale of trust certificates were in fact sham transactions because it wasn’t the Trust who was selling them. Instead of being settled in favor of the issuer the investors money was settled to the benefit of the selling agent. And the “trading” and “transfer” documents of loans and securities were therefore, of necessity, sham transactions because they derived their value from a nonexistent transaction with the issuing Trust. And the money given to or paid on behalf of the homeowner at the “loan closing” was memorialized in loan closing documents that failed to identify the investors or the Trust as the lender and instead identified parties who did not make the loans nor did they have any contractual agency relationship with the Trust or the investors.
The principle around which the securitization of debt revolves is the creation of multiple layers, each of which has multiple entities associated. The bank narrative is that this was required in order to reduce the risk of loss in the event of a default by the borrower. Part of that narrative is true. However the main purpose of each layer was to create “derivative” instruments that could be sold based upon each layer.
Each entity associated with each layer was a conduit, broker or trader. Goldman Sachs coined the term “laddering” to describe the process. Theoretically there is nothing wrong with such an infrastructure – provided that there is an identifiable debtor and an identifiable creditor each of whom are connected with an identifiable loan contract.
The other purpose of layering was to shield all associated entities from liability with respect to the sale of derivative instruments and contracts based on the legitimacy of the original loan and the original “mortgage bond” issued by an entity that existed only on paper, sans bank account or any actual business activity, and “administered” by a trustee who had no duties and who was prohibited from asking about the status of the trust assets.
The “sales” included mortgage bonds, and the sale of increasingly ornate loan products for homeowners. Many participating entities were referred to as “bankruptcy remote”, but in fact the primary purpose was to present an obstacle for liabilities attending to claims of misrepresentation, fraud, fabrication, forgery etc. from either investors or homeowners.
The design of the infrastructure of securitization enabled all associated entities to obscure the movement of actual money and and fill the voids with paper instruments in which entities were named that were several steps removed from any actual movement of money. Such entities had no contractual or other authority between them — or any of the conduits with whom they were passing paper — and the investors or the Trust.
In order to accomplish this goal the strategists on Wall Street created a hub and spoke business plan in which multiple hubs served multiple functions.
We will use MERS as one of the largest hubs and discuss LPS and DocX as another hub, each contributing to the illusion of legal documentation which thus leads to the presumption of actual transactions even in the absence of actual evidence of those transactions. Legal documentation means documentation that refers to real transactions in the real world. Virtually none of the documentation qualifies as legal documents starting from the creation of the REMIC Trust and ending with the supposed loan to homeowners and eventually foreclosure.
The strategists on Wall Street knew that they were going to use mostly conduits and brokers as the apparent originators of loans, but obviously did not want to leave any significant assets in the hands of a thinly capitalized entity. They also knew that the “originators” would not be lending any money of their own even if it appeared that they were underwriting the alleged loans.
Thus they came up with the notion of a “nominee.” Most major financial institutions and several quasi public institutions including government sponsored entities formed MERS, which is ultimately owned and controlled by the international commodities exchange in Iceland. By having an offshore entity control and onshore hub the banks could be sure that regulation would be virtually impossible. Unfortunately with certain Government Sponsored Entities (GSEs) in the list of MERS founders, it was already unlikely that anything would actually be regulated in the United States.
MERS is nothing more than an IT platform that is maintained by about three dozen persons. But it is accessible to tens of thousands of people who work for banks and self-proclaimed servicers. The bank narrative is that MERS is an electronic tracking system for the ownership of mortgage loans. In effect, however, it is essentially a bulletin board that virtually anyone can access, load data, download data as if it was official data from a quasi Government agency, and create instruments that appear to be facially valid designating the user as an officer with signing authority of MERS. First and foremost it must be remembered that the actual purpose of MERS was to provide a credible vehicle to create the illusion of purchases and sales of loans and avoiding the need to record such transfers under the State statutory scheme of recording all transfers of any interest in real property to be recorded — and providing for fines and criminal penalties for recording false documentation or uttering a false instrument.
MERS is named on millions of mortgages as the beneficiary under a deed of trust or the mortgagee under mortgage deed. MERS is not named on any note. MERS does not handle any money from any source in connection with any loan. MERS disclaims any interest in any debt, note or mortgage in which it is named as a nominee. No actual officer of MERS has ever signed any documents in connection with the assignment or transfer of any debt, note, deed of trust or mortgage. No actual authority can or ever has been granted by MERS to parties who were not named on the note or mortgage. It is only the appearance of authority that supports the signature of the employee of an unrelated entity. That authority is created by the person seeking it and it is never withheld.
The bank narrative has successfully argued that MERS is necessary for the securitization of debt and that the securitization of debt creates more open access to capital. In truth, however, if there was an identifiable borrower, and identifiable creditor, and an identifiable loan contract, the existing system within each county of each state in which mortgages and deeds are recorded would have been completely sufficient in an honest system. The argument for “access to capital” was a ruse and remains so. The access only worked to the advantage of the underwriting banks and sellers of certificates issued by nonexistent or empty trusts. And it worked to the distinct disadvantage of all investors and borrowers who, under the single transaction doctrine or the step transaction doctrine were the only real parties in interest in transaction that gave rise to the debt from the homeowner to the investors.
The objective of the false claim of securitization was to throw money at the unwary borrowers so as to create the illusion of a loan contract in which the identity of the creditor was withheld from everyone at the “loan closing table.” The purpose was to create the illusion of a marketplace in which loans were in high demand. In truth, the heavy advertising and the tens of thousands of people who served in a sales capacity to get homeowners or prospective homeowners to affix their signatures speaks loudly to the opposite conclusion — the Banks needed loans so they could make false claims of securitization and then sell multiple layers of derivative products based upon the “value” of loan documents that reflected a nonexistent transaction between the originator named on the note and mortgage and the homeowner.
This enabled the banks to sell “mortgage loans” to unwary investors in transactions that were settled only to the benefit of the banks and not to the benefit of the investors or the vehicles that were used as a pretense for the issuance of marketable securities that were not regulated as securities.
The net result was that investors and homeowners were dragged into a soup of fabricated documents that in the end, left both of them without any documentation for the loan and without any knowledge of who would be paying the real parties whose money was used at the “loan closing” and without any knowledge of the existence of each other. Investors and borrowers were thus left in a transaction they didn’t know existed and without any documentation to show for it. MERS was essential to fill that void with the creation of fabricated written instruments that appear to be facially valid.
In the end all claims of every nature whose validity relied upon the existence of legal documents and actual transactions were and remain false if those documents and transactions were tied to false claims of securitization.

McMansions Are Back And They’re More Hideous Than Ever

The McMansion rose to prominence in the early-to-mid-2000s and to this day is the epitome of the excesses created by the biggest mortgage bubble in the history of mankind.  In suburbs all across America, these 3,000 – 5,000 square foot, cookie-cutter monstrosities, with their foam pillars and lots that were just barely larger than the footprint of the houses themselves, were popping up faster than you could say “subprime mortgage.”



Unfortunately, as we’re forced to report frequently here, Americans tend to have very short-term memories and can’t seem but help but constantly repeat the sins of their past.  As such, it’s hardly a surprise that the average size of new homes in the U.S. is once again skyrocketing at an even faster rate than the early part of this century.

We can do that for you by electing our finance program. It’s quick, easy and hassle free! Invest as little as 25% and take advantage of financing as much as 3-to-1.

Apparently people in the Midwest managed to maintain some level of modesty in the early 2000’s but have since decided ‘modesty’ is massively overrated.

Meanwhile, the return of the McMansion epidemic is also helping to push home prices back to all-time highs.


Meanwhile, if you can’t beat em, as the saying goes, then you might as well mercilessly mock and ridicule them…or something like that.  Luckily, as the Washington Post points out today, that is where “McMansion Hell” comes in.

Kate Wagner, an architecture critic, wishes America would have learned its lesson about McMansions the first time around. She spends her free time tearing apart their architectural anachronisms on her blog, McMansion Hell.

Wagner describes McMansions as a particular artifact of economic history, one whose physical form was the product of a new American pastime: flipping houses.


And, since Americans will never stop building these hideous dwellings, McMansion Hell should be able to provide us with hours of entertainment for years to come.

“They were built to sell in the year they were selling, not for future generations,” said Wagner. “These houses are kind of disfigured, because they were built from the inside out, to have the most amenities to sell faster.”

A culture of house flipping helped to quantify certain home improvements, like the addition of colossal marble islands and palatial foyers designed to grab the attention of buyers. That gave these houses even more of a cookie-cutter feel.

“It’s about invoking the symbolism of having a lot of money, but not spending a lot of money on the house,” says Wagner.


Whoever owns the house above must be poor…not a single column.

Editor’s Note:  Zillow filed a lawsuit and took down the McMansion Hell website because the author’s used a photo from its site.

JPMorgan Chase Bombshell: The Mortgage Liens were Released and then Foreclosed anyways

Transcript Reveals How JPM Chase “Got away with it” — selling loans that were already sold, releasing liens and then foreclosing on nonexistent liens

Get a consult! 202-838-6345 to schedule CONSULT, leave message or make payments.

Hat Tip to Brent Tantillo, Esq.

In our Thursday broadcast of the Neil Garfield Show Mr. Tantillo offered to send us the transcript of a deposition of the person who was in charge of monitoring the National mortgage Settlement and compliance with restrictions and rules concerning the execution of the settlements that were under the purview of the witness.  The transcript shows a continuation of the pattern of setting the illusion of a monitor when in fact the regulator (monitor in this case) was either forced or allowed to rely upon reports generated from Chase.

While somewhat daunting for those who can fall asleep easily while reading, this deposition is very important for those who really want and need more insight into how nearly everything JPM Chase did or said was a carefully constructed lie designed to defraud investors and homeowners who were subjected to foreclosures by parties affiliated with JPMorgan Chase, who had no interest in the loans, while the investors, and the “owners” of derivative hedge products were left holding virtually nothing.

As Mr. Tantillo described on last Thursday’s show, there was major hidden detail to this particular part of the overall fraudulent scheme in which claims were false predicated upon securitization: the mortgage liens were released. Thus while JPMorgan Chase was having lawyers sue in foreclosure on a mortgage lien, it was for “other purposes” releasing and satisfying the liens in order to escape regulations that would have cost money.   By lying on both ends of the stick they got the best of both worlds — until Brent Tantillo came along and filed suit on behalf of the investors who were defrauded.

Brent Tantillo’s contact information is as follows:
Tantillo Law
Attorney Brent Tantillo
Phone: 954-617-8188

Foreclosure Prevention is Paying Off claim the GSEs

The GSEs claim to have prevented more than 49,000 foreclosures in the first quarter, an increase of nearly 5,000 preventions compared to Q4, according to the Federal Housing Finance Agency’s Q1 Foreclosure Prevention Report.  Unfortunately, the majority of these loans that were prevented from being foreclosed upon were held by parties that had no evidence of standing or ownership, and therefore had no right to negotiate.

According to the data, delinquencies, foreclosure starts, and REO inventories were all down in Q1, compared to Q4. Early delinquency (30-59) dropped most sharply, from more than 402,000 in Q4 to just under 318,000 in Q1. Serious delinquencies (above 90 days) dropped from just below 318,000 to almost 293,000. The number of all 60-plus days delinquent loans declined 10 percent to 377,622 at the end of the first quarter, the lowest level since 2008.

The total number of delinquent loans fell 15 percent in the first quarter of 2017. In Ohio, the number of seriously delinquent loans decreased 9 percent during the quarter. Florida’s serious delinquency rates dropped 8 percent; Texas, New Jersey, and Georgia by 7 percent. Total delinquent loans in Ohio dropped by 18 percent. Texas and Pennsylvania saw total delinquencies drop 16 percent in Q1.

The GSEs’ serious delinquency rate in Q1 fell to a flat 1 percent, which also is the lowest level since 2008. This compared with 4.0 percent for Federal Housing Administration loans, 2.1 percent for Veterans Affairs loans, and 2.8 percent for all loans (industry average).

REO inventory nationally was down 8 percent in Q1, to 44,460.

By the end of March, there were about 44,000 home retention actions overseen by the GSEs this year.  In most cases, the GSE has no evidence they purchased these loans.  For all of 2016, there were roughly 164,000 home retention actions. These include actions like loan modifications and repayment plans. Home foreclosure actions (short sales and deeds-in-lieu) dropped 9 percent in the first quarter of 2017 compared with the fourth quarter of 2016. There were 4,936 completed short sales and deeds-in-lieu in Q1.

The FHFA issued a statement saying, “These foreclosure alternatives help to reduce the severity of losses resulting from a borrower’s default and minimize the impact of foreclosures on borrowers, communities, and neighborhoods.”  Nothing could be further from the truth.  These foreclosure alternatives to not reduce the severity of the losses because people end up negotiating unfavorable terms with entities that have no proof that the trust was ever funded. Banks and the GSEs are not in the business of assisting homeowners.

Most modifications require that people negotiate with a loan servicer who has no idea who the true creditor is.  Desperate homeowners end up accepting modifications where they must pay all arrears, the loan is extended beyond its original term and quite often requires a large balloon payment at the end of the modification.  At Livinglies we typically see loan modifications that are economically detrimental for the homeowner.  Most homeowners we counsel would be better off walking away, renting for a short amount of time, and then taking out a new government subsidized mortgage that requires a very low down payment.

There is no data to determine how many of these predatory loan modifications eventually result in default because the terms are unsustainable.  It is well known that the GSE Loans originated from 2001 to 2013 are usually defective and the trusts are empty.  The GSEs can pretend all they want that trillions of dollars of mortgage backed securities they sold to the Federal Reserve are collectiable and backed by real estate- but those of us who examine the documents, read the depositions and follow the money know that the entire GSE system is a facade.  The GSEs are weapons of Mass Destruction for the lower and middle classes.


Healers needed to treat foreclosure pain

 by Richard Mize NEWSOK Published: June 24, 2017

Mama, who was born in 1922, never quit saving margarine tubs.

My wife’s grandmother, Monnie, who was born in 1914, never quit saving scraps of foil.

Mama grew up, and Monnie came of age, during the Great Depression. It left indelible marks on them both.

So, good luck to anyone who thinks a little education on financial literacy will cure the millions of people afflicted with the Housing Heebee Jeebees as a result of living through the subprime mortgage meltdown, housing crash and Great Recession.

They’d just as soon rent, thank you.

Maybe times are different. Maybe millennials are savvier than the Greatest Generation. Maybe there’s an app for that.

It’s hard to say much about the lingering effect of sudden and prolonged economic hardship — and the fear it engenders — especially when life dreams are dashed.

About all you can say is the effect is real, but few folks have been bold enough to say it out loud: A generation of people may have been spooked away from homeownership, some of them for good.

Fresh research commissioned by the National Association of Realtors comes close. It acknowledges “post-foreclosure stress disorder” as one of five main barriers to buying keeping the national homeownership rate at a near 50-year low.

“There are long-lasting psychological changes in financial decision-making, including housing tenure choice, for the 9 million homeowners who experienced foreclosure, the 8.7 million people who lost their jobs, and some young adults who witnessed the hardships of their family and friends,” according to the researchers.

Most Americans “still have positive feelings about homeownership,” according to the study by Rosen Consulting Group, or RCG, and jointly released by the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, Haas School of Business.

But many don’t, they said, and “targeted programs and workshops about financial literacy and mortgage debt could help return-buyers and those who may have negative biases about owning.”

Well, if people are going to be healed of wounds — and that is exactly what has happened to those millions: They’ve been wounded — there better be some healers involved.

I don’t mean preachers and teachers, although sometimes they can help. I mean historians and sociologists and psychologists, people who “get” the kind of social and personal upheaval that such a huge bust, hitting so many people so deeply, can have.

The housing crash wasn’t just an economic bust. For millions, it was a crisis of the spirit. That has to be acknowledged and treated.

The other four barriers to homeownership identified in the study are matters to be worked out by policymakers and the market place:

Mortgage availability: “Credit standards have not normalized following the Great Recession. Borrowers with good-to-excellent credit scores are not getting approved at the rate they were in 2003, prior to the period of excessively lax lending standards. Safely restoring lending requirements to accessible standards is key to helping creditworthy households purchase homes.”

Maybe. Probably. Of course. But all I’ve seen offered is deregulation back to “excessively lax.”

Student loan debt: “Young households are repaying an increasing level of student loan debt that makes it extremely difficult to save for a down payment, qualify for a mortgage and afford a mortgage payment, especially in areas with high rents and home prices.

“As (the National Association of Realtors) found in a survey released last year, student loan debt is delaying purchases from millennials and over half expect to be delayed by at least five years. Policy changes need to be enacted that address soaring tuition costs and make repayment less burdensome.”

Student loan debt is this era’s polio. It should be treated like polio and eradicated for the sake of society.

Single-family housing affordability: “Lack of inventory, higher rents and home prices, difficulty saving for a down payment and investors weighing on supply levels by scooping up single-family homes have all lead to many markets experiencing decaying affordability conditions.

“Unless these challenges subside, RCG forecasts that affordability will fall by an average of nearly 9 percentage points across all 75 major markets between 2016 and 2019, with approximately 5 million fewer households able to afford the local median-priced home by 2019. Declining affordability needs to be addressed with policies enacted that ensure creditworthy young households and minority groups have the opportunity to own a home.”

Affordability is the 900-pound gorilla in the great room.

Single-family housing supply shortages: “Single-family home construction plummeted after the recession and is still failing to keep up with demand as cities see increased migration and population as the result of faster job growth. The insufficient level of homebuilding has created a cumulative deficit of nearly 3.7 million new homes over the last eight years.”

Maybe. I want to see how “demand” is defined here, because multifamily developers haven’t been building all these apartments purely on spec. Where’s their documented demand? How does it overlap with demand for houses? If it’s based on household formation or immigration, are they counting the same people?

Richard Mize

Richard Mize

Real estate editor Richard Mize has edited The Oklahoman’s weekly residential real estate section and covered housing, commercial real estate,… read more ›

Albert Edwards: “Citizens Will Soon Turn Their Rage Towards Central Bankers”

During the populist revolt of 2016, which first led to the “shocking outcomes” of Brexit and then Trump, we cautioned that these phenomena were merely the “silent majority” of the developed world’s middle class expressing their anger and frustration with a world that has left them – and their real disposable income – behind, while rewarding the Top 1% through policies that have led to a relentless and record ascent in global asset prices, largely the purview of the world’s wealthiest. More recently, we also noted that it was only a matter of time before this latest “revolt” fizzled, as the realization that changing one politician with another would achieve nothing, and anger shifted to the real catalyst behind growing global inequality (and anger): central banks.

In his latest note today, Albert Edwards picks up on this theme to write “Theft redux: the citizens will soon turn their rage towards Central Bankers.” The core of his argument is familiar:

While politics in the West reels from a decade of economic crisis and stagnation, asset prices continue to surge on the back of continued rapid growth in G3 QE. In an age of “radical uncertainty” how long will it be before angry citizens tire of blaming an impotent political system for their ills and turn on the main culprits for their poverty – unelected and virtually unaccountable central bankers? I expect central bank independence will be (and should be) the next casualty of the current political turmoil.

That’s just the beginning from Edwards, who appears to be getting increasingly angrier and more frustrated with a market that makes increasingly less sense: his fiery sermon continue with the following preview of the “inevitable catastrophe that lies ahead.”

Evidence of the impact of monetary madness on assets prices is all around if we care to look. I read that a parking spot in Hong Kong was just sold for record HK$5.18 million ($664,200). What about the 3.5x oversubscribed 100 year Argentine government bond? Sure, everything has a market clearing price, even one of the most regular defaulters in history. But what concerned me most about the story was it was demand from investors (“reverse enquires”) that prompted the issue. Is it just me or can I hear echoes of the mechanics of the CDO crisis? But no one cares when the party is still raging and investors, drunk with the liquor of loose money, are blind to the inevitable catastrophe that lies ahead. 

There is a lot of anger out on the streets, as demonstrated most visibly in recent elections. Even in France where investors feel comforted that a “moderate” has gained (absolute?) power, it is salutary to remember that the two establishment parties have just been decimated by a man who had never before stood for public office! This is perhaps even more radical than Trump’s anti-establishment victory under the Republican umbrella. The global political situation is incredibly fluid and unpredictable. While a furious electorate has turned its pent up anger on the establishment political parties, the target for their rage is misguided. I am not completely alone in thinking it is the unelected and virtually unaccountable central bankers who are primarily responsible for the poverty of working people and who will be ultimately held to account in the next crisis.

In the immediate aftermath of the 2008 financial crisis, politicians skilfully diverted the publics’ anger away from themselves by scapegoating “the bankers”. After another eight years of economic stagnation that excuse no longer is tenable and politicians themselves are now taking the flak. But citizen revolutionaries will, I think, soon turn their fire on those who I believe are truly responsible for their plight. We explained back in January 2010 in a note entitled Theft! Were the US & UK central banks complicit in robbing the middle classes? how central banks in the US and UK had deliberately stocked up massive housing bubbles prior to the Global Financial Crisis (GFC) to disguise the rapid rise in income inequality in both countries. Rapidly rising house prices allowed the middle classes to maintain the illusion they were getting richer so that despite stagnant real incomes they could continue to consume by extracting housing equity. We know how that party ended!

After the GFC central bankers have collectively spent the last decade stepping up the pace of money printing to new extremes in an attempt to drown the global economy in liquidity, while couching their actions in plausible theories such as “secular stagnation”. There is no recognition at all by central bankers that it may well be their own easy money and zero interest rate policies that are actually causing the stagnation in growth while at the same time wealth inequality surges to intolerable heights. Yellen et al will inevitably be sacrificed at the altar of political expediency as citizen rage explodes.

Edwards continues, justifying why it has taken his 2010 prediction so long to play out, and predicting that the end result is nothing short of a full systemic break down:

My dire prognostications back in January 2010 proved premature (as usual). It has taken another seven years of economic stagnation and falling living standards of working people, together with the sight of the rich getting richer as a result of central bank QE polices, for the patience of ordinary working people to snap – most visibly in the US and UK elections. That rage has not diminished and, as Bill Gross predicted, the system is in the process of breaking down.

Amidst the current turmoil in the US and UK there is a huge sigh of establishment relief in the eurozone in the wake of the defeat of the far right in recent French and Dutch elections. The establishment hope the tide towards radicalism has turned – at least in continental Europe. That belief is wrong in my view and the current revolution will devour more political and establishment victims before it’s over, most notably the central bankers themselves.

Ultimately, it’s all about wealth inequality however, and here it is central bankers again who are at fault:

Anecdotally we all know wealth inequality has risen due to central bank QE and free money. Although we can see and feel it, it is reassuring to see firm evidence. This week the UK Resolution Foundation published a damning report into rising wealth inequality in the UK (this UK think tank is led by David Willetts, who during his political career was known as one of the most intellectual of MPs – his nickname being “two brains”). The report found the key driver for rising inequality was the collapse in UK home ownership since the 2008 financial crisis to a 30 year low: link and link.

Like so many economic commentators and think tanks, the Resolution Foundation doesn’t seem to want to pin the proverbial tail on the donkey – for it is not the lower homeownership that is the real problem per se but the fact that QE is driving up asset prices that households no longer own! (In addition, zero interest rates have driven up buyto- let investment demand for housing hence reducing the supply of housing for owner occupation). While UK home ownership is now at a 30-year low (link), the US too has seen a similar shocking plunge in home ownership (see chart below).

At least in the run-up to the 2008 GFC, owner occupation in the UK and US surged along with house prices and so working people had the illusion they were getting richer along with the rest of the population. Now there is no such illusion for what has been dubbed “generation rent”. In the US, to add insult to injury, rent inflation has rapidly outstripped CPI since the GFC.

If things are bad in the UK, ?generation rent? has been squeezed far more badly by soaring rents in the US (see chart below). No wonder the JAMs (just about managing) are in revolt.

A rare one-time event has created the final big buying opportunity at such a low price.

There is much more, bust the gist is clear: it is only a matter of time before the general population realizes that it is not politics, but monetary policy. But how long? The simple answer: as long as stocks keep rising, all shalle be well: “no one cares when the party is still raging and investors, drunk with the liquor of loose money, are blind to the inevitable catastrophe that lies ahead.” Which is also why the Fed will do everything in its power to keep the market ascent – and its existence – continue for as long as possible. And then, as a last diversion, they will blame Trump.

In other words, by the time all of this happens, the angry natives may have no choice but to rent their pitchforks…

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