Banks Struggling with Notices of Rescission

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We are starting to get a peek at the strategy the banks will employ in dealing with notices of rescission. In one case the homeowner sent the notice of BOA, who answered that they received it (one problem solved) and that the new servicer is Ocwen (whose business practices have been the subject of a cease and desist order for failing to comply with prior “settlements” and “consent judgments.”)
The obvious strategy of the banks is to try to raise issues that the foreclosure judge can rule upon, in which the notice of rescission is declared void WITHOUT the required lender lawsuit seeking declaratory relief from the rescission — an absolute 20 day requirement under the Truth in Lending Act (TILA). And no matter how much philosophical discussion might ensue, this is precisely why TILA was drafted and passed by Congress and signed into law by the president — all in the wake of the savings and loan scandal that shook the industry in the 1980’s and put over 800 bankers in jail. As the US Supreme Court ruled in a unanimous decision written by Justice Scalia a couple of weeks ago TILA is specific consumer remedy that must be strictly construed.
When they tell you there is another servicer they are trying to re-start the 20 days to file a lawsuit they don’t want to file containing allegations they don’t want to allege, and requiring proof they cannot satisfy. It won’t work. So far, so good. They will probably try to say you sent it to the wrong “servicer” and that therefore your notice of rescission was invalid.

The foreclosure judge will be inclined to accept any argument against the effect of rescission. But TILA is very specific, it is Federal law, and the CFPB regulations under Dodd-Frank make it pretty clear that the shell game won’t work with respect to the notice of rescission. AND their response corroborates your position that they have been continually withholding the information that should have been disclosed at the fake loan closing.

According to CFPB regulations they are all servicers and they are all “good” for service of the rescission letter. You COULD send a COPY of the letter you sent to BOA to Ocwen Certified, return receipt requested. My suggestion is do not send a brand new letter. The clock is ticking. After 20 days has passed we will move to dismiss on the basis of the rescission. The so-called “old servicer” has an obligation to forward the letter to the lender and any other servicers. The 20 days, in my opinion, keeps running from the date of the mailing of the notice.

The long and short of it is that once the notice of rescission is sent (certified mail, return receipt requested) you are now in process on this strategy. The best is that (a) they won’t respond at all which your lawyer can argue they waived the defenses because of the statute of limitations contained in the Truth in Lending Act (TILA) for failing to file the required lawsuit within 20 days or (b) they will write back threatening something, which is not the response called for by TILA or (c) they will bring a lawsuit to declare your rescission void. No matter how this turns out I see it as being potentially beneficial to the homeowner.

If they sue then they need to establish standing and allege facts that they are not being required to allege and prove in foreclosure actions. They have been fighting against being required to plead or prove those facts for 10 years. So we can safely assume they can’t allege those thing and they certainly can’t prove those things.

By “those things” I mean ownership and balance. They have to allege they are the lender or they are representing a lender and SHOW that authorization. Contrary to foreclosure actions where courts have been incorrectly ruling that they only need to prove they are holding the paper, the Declaratory action that must be filed to counter your notice of rescission must allege and prove the identity of the “lender” (i.e., the party who loaned you the money or a true successor — i.e., a successor who actually purchased the debt and wasn’t simply a naked recipient of the the bogus paperwork).

Either way you are

(a) going to get rid of the mortgage and note and you will receive a ton of money just for what you paid the pretender lender at closing or the transferees of the bogus paper — which means that you cancel the note, void the mortgage so it is no longer in your chain of title — AND a receive a ton of money for the payments you made for interest and principal on a monthly basis going back to the inception of the fake loan closing, AND/OR

(b) going to get a ton of information that the foreclosure court might not otherwise allow you to reach in discovery (request for admissions, interrogatories, request to produce, depositions) .

My guess is that they are not ready to file any such lawsuit and will try arguing to the foreclosure judge that they didn’t need to because the rescission letter was defective on its face — usually the statute of limitations or the failure “to identify the violations in the letter.”

On that last point, there is no doubt in virtually all cases across the board that the notice letter need only state your rescission. Any reason for the rescission becomes a question of fact later only if the “lender” challenges the rescission letter within the 20 day period.

As to the statute of limitations, it doesn’t apply if the “lender” withheld the information that should have been disclosed. THAT is a question of fact, and THAT too must be brought up in their lawsuit (which is the ONLY way to comply with TILA on a TILA rescission).

But they will try to lure the state court judges into ruling on the sufficiency of the notice of rescission. The state court judge will be tempted to do it because he or she will see that the house is about to become free of the of the mortgage and that the lender will owe money to the borrower — two results the judges still dislike.

That strategy might work a few times but it won’t work long, in my opinion. TILA is a specific, explicit statutory remedy that cannot be interpreted in the context of common law rescission or any other rescission for that matter. The Court is required to treat these “lender” arguments (and even the question of whether the presenting party is in fact a “lender’) as a question of fact that MUST be raised in a separate lender collateral action seeking declaratory relief in a separate lawsuit.

Appellate Court Wrestling with Inconsistent Facts in Foreclosure Cases

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IT ISN’T BOTCHED PAPERWORK. IT’S FAKE PAPERWORK

It should come as no surprise that Judges have been confused since the dawning of the mortgage crisis launched by Wall Street. Wall Street was counting on it. And the problem they are having is that most courts, including appellate courts, are presuming the loans existed in the first place. You can’t blame for that because nearly everyone still makes that presumption. How could it not be true? What do you mean the loan came from someone else? Then why didn’t that third person  make sure they were made the payee on the note and the mortgagee on the mortgage? The real lenders didn’t know about the loan and would never have approved it? Preposterous!

Yes, I concede it all sounds like nonsense. But here is something that does NOT sound like nonsense. If the loan actually existed (between the named payee on the note and the named mortgagee or beneficiary on the mortgage) there is no circumstances under which a lawyer for the “lender” or “investor” would withhold proof of that transaction to the borrower, the Court or anyone else that was entitled to that information. If they had proof of payment on the loan they would rush to show it. If they had proof of payment on the alleged purchase of the loan, they would rush to show it — because that would make them a holder in due course (where the borrower has virtually no defenses).

The problem is that with the shell game of plaintiffs, servicers and trustees, Judges are getting distracted as they start picking at the foreclosure actions and entering some judgments in favor of the homeowners but failing to even consider the possibility that the entire scheme is fraudulent. Instead we see articles like the one below where the paperwork is considered “botched.” It isn’t botched. It is part of a fraudulent scheme. Look for any case where the underlying monetary transaction has been shown or proven. It isn’t there. 6-7 million foreclosures and still no money changing hands. What lender would endorse a note and assign a mortgage without receiving payment for it? (Unless of course they didn’t pay anything either at the loan closing table).

And why would anyone endorse a note or assign a mortgage without a sale of the loan and without receiving payment for it? The answer is very clear. They wouldn’t.

But the Courts are starting with the premise that the loan, and the transfer of the loan is presumptively legal and valid. And part of that presumption starts with the wrong question in the minds of judges — why would anyone file a foreclosure action if they were not the injured party whose legitimate interests were abridged when the borrower stopped paying? That slippery slope leads them to ratify unsigned, robo-signed, fabricated, forged paperwork in the belief that it really doesn’t matter how much is wrong with the paperwork.

Judges still assume that the underlying transactions must be real; hence judgment for the homeowner is necessary to avoid a windfall. It is circular reasoning to assume that the claim must be true if it was filed — that is what our constitution is all about preventing.

see The Fate of Foreclosure Cases

Will botched paperwork affect the outcome of foreclosure appeals? It depends on the judges.

The decisions in three cases came down to paperwork and procedure Wednesday before the Fourth District Court of Appeal.

For BAC Home Loans Servicing LP, botched documentation at the height of the robo-signing scandal cost it a foreclosure judgment when the court ruled the lender failed to prove standing to sue homeowner Rosanie Joseph.

The appeals court reversed a foreclosure judgment issued by Palm Beach Circuit Judge Diana Lewis since there was no evidence to show Taylor Bean & Whitaker Mortgage Corp. owned the mortgage when filing to foreclose on Joseph in July 2009.

The 2008 mortgage issued by Key Mortgage Associates was attached to the lawsuit, but no note or assignments accompanied the filing by Ocala-based Taylor Bean, a leading wholesale mortgage lender. The company reported the note was lost or stolen.

Taylor Bean, one of the spectacular bankruptcies of the housing crash, later assigned the note to BAC, which picked up the foreclosure ball.

In trial, BAC produced the original note and mortgage. The note offered two endorsements by the same person, Erica Carter-Shaw as a Key Mortgage attorney and Taylor Bean “E.V.P.” Neither endorsement was dated.

“A party must establish its standing to bring a mortgage foreclosure complaint by establishing an assignment or equitable transfer of the note and mortgage prior to instituting the complaint,” Judge Martha Warner wrote for the unanimous panel. Judges Carole Taylor and Mark Klingensmith concurred.

No File Review

A different panel split in similar litigation: Gafoor Jaffer and Nina Jaffer v. Chase Home Finance.

The homeowners claimed Chase attached a mortgage note payable to a third party without any proof of transfer and used an amended foreclosure complaint that failed to state a cause of action. However, the Jaffers waived the question of Chase’s standing by failing to respond to the lawsuit before default was entered.

Chase conceded some of its employees signed affidavits about the loan documents without first reviewing the loan file.

But the Fourth DCA upheld summary judgment issued by Broward Circuit Judge Sandra Perlman.

In the 2-1 unsigned decision, Judges Spencer Levine and Klingensmith concurred. Judge Burton Conner dissented, citing Chase’s failure to file an accurate copy of the mortgage note.

Deutsche Bank National Trust Co. wasn’t as lucky when it moved to overturn Broward Circuit Judge Kathleen Ireland’s ruling in favor of homeowner Theresa Boglioli.

Attorneys say the decisions may further complicate already-lengthy and expensive foreclosure litigation.

“Normally you see discrepancies of this nature within different circuits. But what we’re seeing in the Fourth is discrepancies among themselves,” said foreclosure defense attorney Roy Oppenheim of Weston. “It just makes this more complex. When there is cloudiness, it just creates more ambiguity and delays the conclusion of the foreclosure mess. In the end it doesn’t help anybody when you have inconsistent rules.”

“The judges themselves are coming up with different rationale based on the same facts, which makes for wildly different outcomes.”

Powers of Attorney — New Documents Magically Appear

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BONY/Mellon is among those who are attempting to use a Power of Attorney (POA) that they say proves their ownership of the note and mortgage. In No way does it prove ownership. But it almost forces the reader to assume ownership. But it is not entitled to a presumption of any kind. This is a document prepared for use in litigation and in no way is part of normal business records. They should be required to prove every word and every exhibit. The ONLY thing that would prove ownership is proof of payment. If they owned it they would be claiming HDC status. Not only doesn’t it PROVE ownership, it doesn’t even recite or warrant ownership, indemnification etc. It is a crazy document in substance but facially appealing even though it doesn’t really say anything.

The entire POA is hearsay, lacks foundation, and is irrelevant without the proper foundation be laid by the proponent of the document. I do not think it can be introduced as a business records exception since such documents are not normally created in the ordinary course of business especially with such wide sweeping powers that make no sense — unless you recognize that they are dealing with worthless paper that they are trying desperately to make valuable.

They should have given you a copy of the settlement agreement referred to in the POA and they should have identified the original PSA that is referred to in the settlement agreement. Those are the foundation documents because the POA says that the terms used are defined in the PSA, Settlement agreement or both. I want all documents that are incorporated by reference in the POA.

If you have asked whether the Trust ever paid for your loan, I would like to see their answer.

If CWALT, Inc. or CWABS, Inc., or CWMBS, Inc is anywhere in your chain of title or anywhere else mentioned in any alleged origination or transfer of your loan, I assume you asked for those and I would like to see them too.

The PSA requires that the Trust pay for and receive the loan documents by way of the depositor and custodian. The Trustee never takes possession of the loan documents. But more than that it is important to distinguish between the loan documents and the debt. If there is no debt between you and the originator (which means that the originator named on the note and mortgage never advanced you any money for the loan) then note, which is only evidence of the debt and allegedly containing the terms of repayment is only evidence of the debt — which we know does not exist if they never answered your requests for proof of payment, wire transfer or canceled check.

If you have been reading my posts the last couple of weeks you will see what I am talking about.

The POA does not warrant or even recite that YOUR loan or anything resembling control or ownership of YOUR LOAN is or was ever owned by BONY/Mellon or the alleged trust. It is a classic case of misdirection. By executing a long and very important-looking document they want the judge to presume that the recitations are true and that the unrecited assumptions are also true. None of that is correct. The reference to the PSA only shows intent to acquire loans but has no reference or exhibit identifying your loan. And even if there was such a reference or exhibit it would be fabricated and false — there being obvious evidence that they did not pay for it or any other loan.

The evidence that they did not pay consists of a lot of things but once piece of logic is irrefutable — if they were a holder in due course you would be left with no defenses. If they are not a holder in due course then they had no right to collect money from you and you might sue to get your payments back with interest, attorney fees and possibly punitive damages unless they turned over all your money to the real creditors — but that would require them to identify your real creditors (the investors who thought they were buying mortgage bonds but whose money was never given to the Trust but was instead used privately by the securities broker that did the underwriting on the bond offering).

And the main logical point for an assumption is that if they were a holder in due course they would have said so and you would be fighting with an empty gun except for predatory and improper lending practices at the loan closing which cannot be brought against the Trust and must be directed at the mortgage broker and “originator.” They have not alleged they are a holder in course.

The elements of holder in dude course are purchase for value, delivery of the loan documents, in good faith without knowledge of the borrower’s defenses. If they had paid for the loan documents they would have been more than happy to show that they did and then claim holder in due course status. The fact that the documents were not delivered in the manner set forth in the PSA — tot he depositor and custodian — is important but not likely to swing the Judge your way. If they paid they are a holder in due course.

The trust could not possibly be attacked successfully as lacking good faith or knowing the borrower’s defenses, so two out of four elements of HDC they already have. Their claim of delivery might be dubious but is not likely to convince a judge to nullify the mortgage or prevent its enforcement. Delivery will be presumed if they show up with what appears to be the original note and mortgage. So that means 3 out of the four elements of HDC status are satisfied by the Trust. The only remaining question is whether they ever entered into a transaction in which they originated or acquired any loans and whether yours was one of them.

Since they have not alleged HDC status, they are admitting they never paid for it. That means the Trust is admitting there was no payment, which means they were not entitled to delivery or ownership of the note, mortgage, or debt.

So that means they NEVER OWNED THE DEBT OR THE LOAN DOCUMENTS. AS A HOLDER IN COURSE IT WOULD NOT MATTER IF THEY OWNED THE DEBT — THE LOAN DOCUMENTS ARE ENFORCEABLE BY A HOLDER IN DUE COURSE EVEN IF THERE IS NO DEBT. THE RISK OF LOSS TO ANY PERSON WHO SIGNS A NOTE AND MORTGAGE AND ALLOWS IT TO BE TAKEN OUT OF HIS OR HER POSSESSION IS ON THE PARTY WHO TOOK IT AND THE PARTY WHO SIGNED IT — IF THERE WAS NO CONSIDERATION, THE DOCUMENTS ARE ONLY SUCCESSFULLY ENFORCED WHERE AN INNOCENT PARTY PAYS REAL VALUE AND TAKES DELIVERY OF THE NOTE AND MORTGAGE IN GOOD FAITH WITHOUT KNOWLEDGE OF THE BORROWER’S DEFENSES.

So if they did not allege they are an HDC then they are admitting they don’t own the loan papers and admitting they don’t own the loan. Since the business of the trust was to pay for origination of loans and acquisition of loans there is only one reason they wouldn’t have paid for the loan — to wit: the trust didn’t have the money. There is only one reason the trust would not have the money — they didn’t get the proceeds of the sale of the bonds. If the trust did not get the proceeds of sale of the bonds, then the trust was completely ignored in actual conduct regardless of what the documents say. Which means that the documents are not relevant to the power or authority of the servicer, master servicer, trust, or even the investors as TRUST BENEFICIARIES.

It means that the investors’ money was used directly for fees of multiple people who were not disclosed in your loan closing, and some portion of which was used to fund your loan. THAT MEANS the investors have no claim as trust beneficiaries. Their only claim is as owner of the debt, not the loan documents which were made out in favor of people other than the investors. And that means that there is no basis to claim any power, authority or rights claimed through “Securitization” (dubbed “securitization fail” by Adam Levitin).

This in turn means that the investors are owners of the debt but lack any documentation with which to enforce the debt. That doesn’t mean they can’t enforce the debt, but it does mean they can’t use the loan documents. Once they prove or you admit that you did get the loan and that the money came from them, they are entitled to a money judgment on the debt — but there is no right to foreclose because the deed of trust, like a mortgage, is made out to another party and the investors were never included in the chain of title because the intermediaries were  making money keeping it from the investors. More importantly the “other party” had no risk, made no money advance and was otherwise simply providing an illegal service to disguise a table funded loan that is “predatory per se” as per REG Z.

And THAT is why the originator received no money from successors in most cases — they didn’t ask for any money because the loan had cost them nothing and they received a fee for their services.

The US BANK-BOA-LaSalle-CitiGroup Shell Game

‘The bottom line is that the notice of substitution of Plaintiff in judicial states, or notice of substitution of Trustee in non-judicial states should be the first line of battle. Neither one of them is valid and in both cases you have a stranger to the transaction being allowed to name itself as creditor, name its own controlled entity or subsidiary as trustee, and then ignore the realities of the money paid to the real creditor. They are claiming damages from the borrower — all for a debt that in the ordinary course of things has already been paid several times over. But it is true that it wasn’t paid to THEM because THEY were never and are not now the creditor fulfilling the definition of a creditor who could bid at the foreclosure auction. It is not that the borrower doesn’t owe money when he borrows it, it is that he doesn’t owe it to any of the people who are claiming it. And that is what gives rise to liability of law firms to borrowers.” Neil F Garfield, http://www.livinglies.me

If our information can be corroborated through discovery with a corporate representative of US BANK or Chase Bank as the servicer, it is possible that a solid cause of action can be filed against the law firm that brought the action, particularly if the law firm took its instructions from the Desktop system of LPS.

In that system law firms are instructed to file foreclosures without contact with the actual client. We saw several cases where sanctions were levied against lawyers and their alleged clients, but none so stark as the one in Florida where the lawyer for US Bank as Trustee for XXX, when faced with questions he couldn’t answer admitted that he had never spoken with anyone from U.S> Bank and didn’t know who had retained his firm.

The law firm that brought the foreclosure action and especially the law firm that is demanding an assignment of rent to protect a creditor who has already been paid through non stop servicer advances was most likely not authorized to demand the assignment of rents which might be why there was no written demand as required by statute. I am considering the possibility of an actual lawsuit against one such law firm for interference with contract on both the foreclosure and the assignment of rents issue.

The Banks are being very cagey about this system — one which they would never use for their own portfolio loans, which begs the question of why they would have two entirely different system of accounting and legal process. But the long and the short of it is that LPS in Jacksonville, Florida is used much the same way as MERS. It maintains a database service that requires a user name and password and that gives unlimited access to the client folders. Anyone can go in and authorize the foreclosure based upon a default that is invested by the person entering the data. They leave out any servicer advances or other third party payments and arrive at an amount to reinstate that is just plain wrong. So virtually all notices of default are wrong which means that the required notice is defective.

You should know that many judges appear unimpressed that there was no valid assignment of the mortgage. I think that it is clearly reversible error. The assignment frequently is clearly fabricated and back-dated because of references to events that happened a year after the assignment was executed. The assignment clearly did not exist at the time of the lawsuit and the standing issue is clear under Florida law although some courts are balking at the idea that standing cannot be cured after the lawsuit. The reasoning is quite simple — if it were otherwise, you could file suit against a grocery store for a slip and fall, and the go over to the store to have your slip and fall.

In one of my cases involving multiple properties, they have an assignment that was prepared and executed by Shapiro and Fishman supposedly dated in 2007 —- but it refers to Bank of America as successor by merger to LaSalle. it is backdated, fabricated and fictional, which is to say, fraudulent.

The assignment has two problems –— FACIALLY DEFECTIVE FABRICATION OF ASSIGNMENT:  the first problem is that the alleged BOA merger with LaSalle could not have happened before 2008 — one year after the assignment was executed. So the 2007 assignment refers to a future event that was not reported by BOA until 2008, and was not approved by the Federal Reserve until 2008. On its face, then, based upon public record, the assignment is void as a total fabrication.

The second problem is that it is unclear as to how the merger could have occurred between BOA and La Salle, to wit:. you might need to read this a few times to understand the complexity of the issues involved — issues that few judges or lawyers are interested enough to master.

LASALLE ABN AMRO ACQUISITION:
Since neither entity vanished in the deal it is an acquisition and not a merger. LaSalle and ABN AMRO did a reverse merger in 2007.

That means that while LASalle was technically the acquirer, because it “bought” ABN AMRO, and ABN AMRO became a subsidiary — the reality is that LaSalle issued so many shares for the acquisition of ABN AMRO that the ABN AMRO shareholders received the overwhelming majority of LaSalle Shares compared to the former owners of LaSalle shares.

Hence in substance LaSalle Bank was a subsidiary of ABN AMRO and the consolidated financial statements show it. But in form it appears as the parent.

So if someone, like BOA, was to say they merged with or acquired LaSalle, they would also be saying that included its subsidiary ABN AMRO — and they would have to do the deal with the shareholders of ABN AMRO because those shareholders control LaSalle Bank, which brings us to CitiGroup —-

CITIGROUP MERGER WITH ABN AMRO: Also in 2007, CitiGroup announced and continues to file sworn statements with the SEC that it had merged with ABN AMRO, which means, if you followed the above, that CitiGroup actually owned LaSalle. It looks more like an acquisition than a merger to me but the wording makes it unclear. This would mean that LaSalle still technically exists as a subsidiary of  CitiGroup.

ALLEGED BOA MERGER WITH LASALLE: In 2008 the Federal Reserve issued an order approving the merger of BOA and LaSalle, in which case LaSalle vanishes — but ABN AMRO is the one with all the assets. BUT LaSalle is named as Trustee of the asset pool. And the only other allowable trustee would be another bank that merged with LaSalle as a successor without the requirement of filing more papers to be a Trustee and BOA clearly qualifies on all counts for that. Section 8.09 of PSA.

But the Federal Reserve order states that the identities of ABN AMRO and LaSalle are the same and the acquisition of one is the acquisition of the other — thus unintentionally ratifying CitiGroup’s apparent position that it owns ABN AMRO and thus LaSalle.

Findings of fact by an administrative agency are presumptively true although subject to rebuttal.

Here is the kicker: there is no further mention in any SEC filings of a merger between BOA and LaSalle, unless I missed it. There is no reference to the fact that CitiGroup controlled LaSalle and ABN AMRO at the time of the Federal Reserve order approving the BOA merger with LaSalle Bank in 2008.

CitiGroup has not, to my knowledge ever reported the sale or loss or merger of LaSalle. Since Citi made the acquisition before BOA, and since BOA apparently did not buy LaSalle from Citi, how could BOA claim to be a successor by merger with LaSalle?

Hence there are questions of fact as to whether BOA ever consummated any transaction in which it acquired or Merged with LaSalle, which while technically possible, makes no business sense. UNLESS the OBJECTIVE was to transfer the interest of LaSalle as trustee to BOA, as a precursor to a much wider deal in which BOA then sold its position as Trustee to US Bank as a  commodity and then filed in the Kalam cases a notice of substitution of Plaintiff without amending the pleadings.

US BANK Notice of Substitution of Plaintiff without Any Motion to Amend Pleadings: The reason they filed it as a notice was that they obviously did not want to allege the purchase of “being a trustee”, which would have been a contested issue in the pleadings. But the amendment is required in my opinion and there should be a motion to strike the notice of substitution of Plaintiff without amendment. The motion to strike should state that no objection to granting the order to amend, but that the circumstances should be pled and we should be able to respond with a denial and affirmative defenses if you choose.

Reuters: BOA Paid Bonuses of Target Gift Cards To Modification Employees For Steering Cases Into Foreclosure, Fired Them If They Didn’t Go After the Foreclosure

SIX FORMER BOA EMPLOYEES TESTIFY THAT BOA MODIFICATION AND FORECLOSURE SPECIALISTS WERE PAID AND INSTRUCTED TO LIE TO HOMEOWNERS, PAID WITH GIFT CARDS IF THEY SUCCESSFULLY THREW THE HOMEOWNER INTO FORECLOSURE AND WERE DISCIPLINED OR FIRED IF THEY FAILED TO TURN OVER THE REQUESTS FOR MODIFICATION INTO THE RIGHT NUMBER OF FORECLOSURES.

IF YOU WANT A MODIFICATION, YOU NEED A LAWYER TO CHALLENGE THE REPRESENTATIONS OF LOST DOCUMENTS AND INCOMPLETE APPLICATIONS FOR MODIFICATION. AND YOU ESPECIALLY NEED A LAWYER OR HUD COUNSELOR TO SUBMIT THE COVER LETTER AND THE SPECIFIC PROPOSAL FOR MODIFICATION WITH AFFIDAVITS FROM EXPERTS — (usually absent because the bank doesn’t request it). LIVINGLIES PROVIDES SUPPORT TO ANY ATTORNEY NEEDING ASSISTANCE IN DRAFTING THE COVER LETTER, AFFIDAVITS AND PROPOSAL. CALL CUSTOMER SUPPORT EAST COAST 954-495-9867 OR CUSTOMER SERVICE WEST COAST 520-405-1688 FOR PRICE QUOTES AND REQUIREMENTS. GGKW PROVIDES LEGAL SERVICES ONLY IN FLORIDA.

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available TO PROVIDE ACTIVE LITIGATION SUPPORT to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field. Garfield is a partner of Garfield, Gwaltney, Kelley and White

Danielle Kelley, Esq. is a partner in the firm of Garfield, Gwaltney, Kelley and White (GGKW) in Tallahassee, Florida 850-765-1236

Our very own Danielle Kelley was quoted in a Reuters article yesterday that laid out in exquisite detail the endemic practice of lying, layering, laddering and forcing homeowners into foreclosure when a modification was better for both the homeowner and the investor. The article is by Michelle Conlin and Peter Rudegeair, Reuters, News Agency. Article carried in New York Times and other periodicals. Story picked up by several investigative reporters for in depth reports on TV, radio and other news media.

Since BOA might be successful in killing story, we produce most of it here:

The full article can be found at: FORMER BANK OF AMERICA WORKERS ALLEGE IT LIED TO HOMEOWNERS

EDITOR’S NOTE:  As we have been saying for 6 years, sometimes alone in the wilderness, this is not a conspiracy theory, it is a fact. The entire securitization scheme was a lie, a Ponzi scheme to steal trillions of dollars from the U.S. Economy, and trillions of dollars from other countries around the world.

In order to make it work, the big banks had to set up an infrastructure in which they would lie, cheat and steal, sending the profits off to other jurisdictions and covering up the crimes by using companies at each layer of the scheme who channeled a large portion of investor funds and most of the recovery from insurance, credit default swaps, and government bailouts away from the investors and away from the borrowers.

The essential capstone of the strategy was the foreclosure sale and the expiration of the right of redemption. Without it, the banks could owe as much as $25 trillion back to insurers, credit default swap counterparties, government agencies, government sponsored entities (Fannie and Freddie) and the investors who provided all the money that was used to create the largest liquidity boom in history. And then there were the extra fees for servicing a loan that was deemed non-performing (even though it was the bank who lied to homeowners telling them to stop paying). So far it has been the perfect crime.

And the underpinning of the strategy was that the banks could control the narrative — that it was about borrowers who were intentionally getting into deals they could not afford — when it was just the opposite, to wit: it was the banks acting through many layers of nominees, conduits and intermediaries whose goal was to rid themselves of the money on deposit from investors (money that should have been entirely into a REMIC trust account and never was). Much of the money successfully stolen was in the form of a second tier yield spread premium that was created in the spread between the loans that were promised to investors and the actual loans made to borrowers.

It was all a lie. The borrowers believed the lender was the lender and that the lender would not assume a high risk on a loan that was doomed to fail. The investors believed that since most of them were managed funds who were required to invest only in triple A rated securities that were insured and guaranteed that industry standard underwriting was under way. Nothing could have been further from the truth.

The Banks were lying and paying for others to lie about the property valuation, the safety of the collateral, the existence of the collateral for investors, and the existence of insurance and hedge products for the investors. They lied to investors, they lied to the press, they lied to the government agencies, they lied to the two presidents that were caught in the web of deceit, and they lied to the secretaries of the treasury.

And now, as predicted the tsunami is going the other way as the truth sloshes over all the lies they told. We start with the story of modification of loans which could have resulted on most of the foreclosed homes being modified. Now we have strong evidence from the actual people who worked for BOA and other large financial institutions that their strategy was to use the promise of modification to lure homeowners into default on loans owned by unidentified parties, and stretch out the time so that the hole dug for the homeowner was too deep to get out of, and eventually put a cap on the well that could spray liability all over the mega banks and end their existence.

PRACTICE HINT: WITHOUT EXPERTS IN E-DISCOVERY, YOU WILL BE UNABLE TO WIN YOUR CASES OR GET ENOUGH TRACTION TO FORCE MODIFICATION ON THE TERMS OFFERED BY THE BORROWER. GGKW, IN WHICH DANIELLE KELLEY IS  PARTNER, IS DEVELOPING RELATIONSHIPS WITH PRIVATE INVESTIGATORS AND FORENSIC  COMPUTER SPECIALISTS WHO ASSIST US ON MOST OF OUR CASES. WHEN YOUR GOAL IS TO WIN RATHER THAN DELAY, IT COSTS MONEY. ANTI-FORECLOSURE MILLS CHARGING LOW MONTHLY PAYMENTS ARE EFFECTIVE AT DELAYING THE FORECLOSURE BUT USUALLY INEFFECTIVE AT STOPPING IT OR EVEN WINNING THE CASE. YOU GET WHAT YOU PAY FOR.

 FOLLOW DANIELLE KELLEY, ESQ. ON HER BLOG

Significant quotes from Reuters article:

Borrowers filed the civil case against Bank of America in 2010 and are now seeking class certification. The affidavits, dated June 7, are the latest accusations over the mishandling of mortgage modifications by some top U.S. banks.

Six former Bank of America Corp (BAC.N) employees have alleged that the bank deliberately denied eligible home owners loan modifications and lied to them about the status of their mortgage payments and documents.

The bank allegedly used these tactics to shepherd homeowners into foreclosure, as well as in-house loan modifications. Both yielded the bank more profits than the government-sponsored Home Affordable Modification Program, according to documents recently filed as part of a lawsuit in Massachusetts federal court.

The former employees, who worked at Bank of America centers throughout the United States, said the bank rewarded customer service representatives who foreclosed on homes with cash bonuses and gift cards to retail stores such as Target Corp (TGT.N) and Bed Bath & Beyond Inc (BBBY.O).

For example, an employee who placed 10 or more accounts into foreclosure a month could get a $500 bonus. At the same time, the bank punished those who did not make the numbers or objected to its tactics with discipline, including firing.

About twice a month, the bank cleaned out its HAMP backlog in an operation called “blitz,” where it declined thousands of loan modification requests just because the documents were more than 60 months old, the court documents say.

The testimony from the former employees also alleges the bank falsified information it gave the government, saying it had given out HAMP loan modifications when it had not.

Mortgage problems have dogged Bank of America since its disastrous purchase of Countrywide Financial in 2008. The bank paid $42 billion to settle credit crisis and mortgage-related litigation between 2010 and 2012, according to SNL Financial.

Bank of America and four other banks reached a $25 billion landmark settlement with regulators in 2012, following a scandal in late 2010 when it was revealed employees “robo signed” documents without verifying them as is required by law.

But problems have persisted. Since 2012, more than 18,000 homeowners have filed complaints about Bank of America with the Consumer Financial Protection Bureau, a new agency created to help protect consumers. Recently, the attorney generals of New York and Florida accused Bank of America of violating the terms of last year’s settlement.

The government created HAMP in 2009 in response to the foreclosure epidemic and to encourage banks to give homeowners loan modifications, allowing some borrowers to stay in their homes.

THE BLITZ

The court documents paint a picture of customer service operations where managers roamed the floor with headsets, able to listen into any call without warning. Service representatives were told to lie to homeowners, telling them their paperwork and payments had not been received, when in reality they had.

“This is exactly what’s been happening to homeowners for years,” said Danielle Kelley, a foreclosure defense lawyer in Florida. “No matter how many times they send in their paperwork, or how often they make their payments, they simply can’t get loan modifications. They wind up in foreclosure instead.”

The former employees said they were told to falsify electronic records and string homeowners along in foreclosure as long as possible. The problem was exacerbated because the bank did not have enough employees handling modifications, adding to the backlog of cases purged during the “blitz” operations.

 

 

UTAH AG “Midnight Pardon”! Settles BofA Case and Joins Firm Representing BofA

CHECK OUT OUR DECEMBER SPECIAL!

What’s the Next Step? Consult with Neil Garfield

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).

In classic style, The revolving door between regulators, law enforcement and the Banks just keeps turning. The money is too good for the people to turn down, and it isn’t illegal to prosecute Bank of America, get into a winning position that will cost the Bank billions and give tens of thousands of homeowners relief they deserve, and then enter into a settlement agreement with BofA for pennies on the dollar and leaving homeowners in the dust. And it’s all because the Utah AG is stepping down from his official position and taking a position in a the private sector with a law firm that regularly represents Bank of America.

But maybe it it IS illegal if someone takes a closer look. If the new position is a bribe, the AG should be prosecuted criminally, removed from office now and disbarred.

“Just days before leaving office, Attorney General Mark Shurtleff has reversed the state’s position and personally signed on to a settlement in a foreclosure lawsuit that Bank of America appeared to be losing.

The practical effect of Shurtleff’s move, according to an attorney who filed the lawsuit, is to weaken Utah’s ability to enforce state law. It also weakens the state’s position in other lawsuits challenging foreclosures carried out by ReconTrust Co., Bank of America’s foreclosure arm, Abraham Bates said.”

“U.S. District Judge Bruce Jenkins, who presides over the case, issued a strong ruling in favor of the homeowners’ and the state’s position. The assistant attorneys general conducting the state’s case hoped to keep it alive for a final ruling by Jenkins before a likely appeal to the 10th Circuit Court of Appeals for a definitive decision that would guide other similar lawsuits.”

Midnight Pardon for Bank of America

Hat Tip to Home Equity Theft Reporter

 

Another Pennies on the Dollar Settlement

Editor’s Note: like the post before this one, it is astonishing how these settlements fall so far short of the actual damage that was created by the banks by their intentional illicit and criminal behavior.

This one “relates to conduct at Greenwich Capital, the R.B.S. unit that bundled mortgages into securities and sold them to investors. Nevada found that R.B.S. worked closely with Countrywide Financial and Option One, two of the most aggressive lenders during the boom.” They were categorized as sub-prime even if the borrower was not sub-prime. That way they loaned less of the investor money at a higher nominal rate, charged the borrower for additional underwriting risk when there was no underwriting at all, and kept the excess interest, the excess funding that should  have gone into standard loans properly underwritten according to industry standards.

The trap was teaser rates that borrowers could never decipher: “From 2004 through 2006, R.B.S. packaged $90 billion of these loans, many originated by Countrywide. The mortgages typically began with an artificially low interest rate that rose significantly after a year or two. Under the terms of these loans, borrowers could choose to pay only a fraction of what they owed monthly, resulting in a rising principle balance.”

And the media is all about how the housing problem is ending. That is nonsense. It is coming to a head, but the peak won’t be until perhaps 2014.

Bank Settles Over Loans in Nevada

By

The Royal Bank of Scotland agreed to pay $42.5 million late Tuesday in a settlement with the Nevada attorney general that ends an 18-month investigation into the deep ties between the bank and two mortgage lenders during the housing boom.

Most of the money paid by R.B.S. — $36 million — will be used to help distressed borrowers throughout Nevada. In addition, R.B.S. agreed to finance or purchase subprime loans in the future only if they comply with state laws and are not deceptive.

The settlement between the bank and Catherine Cortez Masto, Nevada’s attorney general, relates to conduct at Greenwich Capital, the R.B.S. unit that bundled mortgages into securities and sold them to investors. Nevada found that R.B.S. worked closely with Countrywide Financial and Option One, two of the most aggressive lenders during the boom.

Officials working with Ms. Masto say that they examined R.B.S.’s activities from 2004 to 2007. During those years, the bank provided funding for more than $100 billion of risky loans, many made by Countrywide and Option One. In 2005 and 2006, R.B.S. was the third-largest securitizer of subprime mortgages and adjustable-rate loans.

“I remain committed to enforcing Nevada’s laws against the players — including those on Wall Street — that contributed to and profited from reckless and deceptive mortgage lending in Nevada,” Ms. Masto said in a statement. “The payment from R.B.S. will alleviate some of the injury to the Silver State and its residents. The changes to its securitization process should help make sure that we do not go down this road again.”

In agreeing to the settlement, R.B.S. neither admitted nor denied the acusations.

During the investigation, Nevada officials examined more than one million pages of documents and interviewed former R.B.S. employees and borrowers. Ms. Masto’s office concluded that the bank had essentially created joint ventures with Countrywide and Option One and that its financing enabled those lenders to make reckless loans that were unlikely to be repaid.

The attorney general also examined whether R.B.S. reviewed the mortgages bought from Countrywide and concluded that the bank bundled and sold loans even after identifying them as problematic. Moreover, at Countrywide’s request, the bank limited the number of loans it reviewed, the attorney general’s office said.

Nevada has been hit hard by the foreclosure crisis. Some 60 percent of borrowers in the state have mortgages of greater value than the properties underlying them, according to Core Logic, a real estate data company.

Ms. Masto’s case comes after several others brought recently by state regulators against firms involved in mortgage securities. Earlier this month, the New York attorney general sued Bear Stearns over its conduct during the boom, and last week, the Massachusetts securities regulator sued Putnam Advisory, a unit of Putnam Investments, for misleading investors who bought a collateralized debt obligation it was managing. Officials at both firms rejected the allegations and said they would vigorously defend themselves in court.

Some securities lawyers say that it is easier for state officials to bring successful actions against banks for questionable activities than it is for federal investigators. That is mostly because of stringent requirements under federal securities laws.

“This strategy sidesteps the need to prove intent to defraud and to detail fraud allegations as is required for similar actions under the federal securities laws,” said Lewis D. Lowenfels, an authority in securities law in New York. According to the Nevada attorney general’s office, R.B.S. was among the larger bundlers of a risky type of loan known as a pay-option adjustable-rate mortgage. From 2004 through 2006, R.B.S. packaged $90 billion of these loans, many originated by Countrywide. The mortgages typically began with an artificially low interest rate that rose significantly after a year or two. Under the terms of these loans, borrowers could choose to pay only a fraction of what they owed monthly, resulting in a rising principle balance.

R.B.S. also worked hard to keep Countrywide generating loans for the bank’s securities, investigators said.

Ms. Masto’s office said that R.B.S.’s mortgage funding operation was widespread across Nevada, which is why most of the settlement will go to borrowers who have suffered harm.

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