9th Circuit Uses Yvanova Reversing Trial Court

It seems obvious that if a complete stranger to the transaction (see the wording from the San Francisco study), is attempting to enforce a debt or seek a foreclosure, they should have no rights at all. And if a party accepts a modification application, they are making several representations about their authority and what they will do with the application. But the courts have resisted all such notions until very recently.

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see 9th Circuit Quotes Yvanova13-17297

This is the stuff that  makes lay people crazy.

Plaintiff Newman filed a lawsuit in California to stop a foreclosure claiming BONY didn’t have the right to foreclose. The trial court dismissed his case because he supposedly didn’t have standing to raise that issue. Then he filed an appeal. During his appeal, the Yvanova decision was released.

So the 9th Federal Circuit applied Yvanova to the pending appeal and reversed the trial court, adding that there could be an action, as Newman had brought, to hold parties responsible for handling of a modification request. That should be a no-brainer but the courts keep getting twisted up in the idea that the banks need to be protected when it is the homeowners who need protection.

Of course for good measure the decision is announced as not to be used for precedent — but it is difficult to see how it could not be precedent.

The bottom line, I think, is that the Courts are very reluctantly coming around to the view that they will allow those actions or defenses that they must allow while they allow wide latitude to pretender lenders. It’s another step toward equality under the law but we are a still quite some distance to a level playing field.

It seems obvious that if a complete stranger to the transaction (see the wording from the San Francisco study), is attempting to enforce a debt or seek a foreclosure, they should have no rights at all. And if a party accepts a modification application, they are making several representations about their authority and what they will do with the application. But the courts have resisted all such notions until very recently.

The trend over the last decade is giving rise to a new fraudulent industry. Posing as the creditor and even suing upon the debt is cloaked in presumptions that the fabricated documents are true, putting the burden on the average citizen to disprove a nonexistent fact. And accepting a modification application as part of a larger scheme to force the homeowner into foreclosure was and might still be OK, because servicers supposedly are under no duty to do anything — not withstanding Dodd Frank and other statutes and regulations.

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The Strategic Warfare of Mortgage “Servicing”

By William Hudson
You can choose your sexual orientation and even your ethnicity but you can’t change your loan servicer. Mortage “servicing” is the ultimate misnomer. Modern loan servicing has nothing to do with service but instead provides a “disservice” in order to boost profits or engineer a default if at all possible. Being forced to contract with a sketchy loan servicer is like being forced to stay married to a spouse who lies, cheats and steals all your money.

 
The servicer’s job is to collect payments and manage the day to day operations of the loan, but servicers have taken on the new role of “default engineer” and “disinformation agent”. The servicers have found a new way of increasing profits and it is at the expense of a customer who has no choice in regards to who services their mortgage.

 
It is likely that the servicing rights to your loan were sold to either  the lowest bidder, or Pirates-R-Us Loan Servicing who purchased the note at a fire sale for pennies on the dollar with the knowledge that your loan had some major defect. It is even possible that your loan servicer is not a servicer at all but is pretending that they are forwarding your payments to the true owner when instead they are keeping your monthly payments for their own enrichment (and there is no creditor).

 
The typical tools servicers use to create a deliberate default include:
• providing disinformation or conflicting information to the homeowner
• failing to follow through with agreements (modifications or repayment)
• misapplying funds/refusing to take payments
• weeks spent trying to correct an issue (phone transferitis followed by disconnect)
• failure to answer QWR or failure to provide requested answers
• failure to acknowledge rescission
• backdating denial letters so homeowners don’t have sufficient time to challenge the              modification  denial
• forced-place insurance
• assign servicing rights to new servicer
• dual-tracking while modification is under consideration or borrower is in compliance
• revoking modification when homeowner is compliant (no opportunity to appeal)
• bankruptcy payment issues (misapplication of payments pre and post-bankruptcy)
• fabricating document to create the appearance of holder status
• misrepresenting status of relationship to loan
• Fabrication, forgery and other tactics to “perfect” the appearance of holder status

 
All of these activities serve to confuse the homeowner and require significant amounts of time and frustration to resolve as days, weeks and sometimes months are spent on trying to correct the situation (during work hours).   On a regular basis Servicers now participate in calculated fraud in order to create a default. The unsuspecting homeowner can be lulled by their servicer into practices that will increase the chances of foreclosure.

 
Over the past several months, the Lending Lies team has seen a disturbing trend of servicers taking advantage of people who are elderly, obviously mentally incapacitated, and economically vulnerable. Servicers are now aware of who the best victims are and who to pursue with impunity. The elderly who are on fixed incomes are particularly vulnerable, single mothers who are burdened by work and raising children on their own appear to be targets, and we have seen more and more mature single women with few assets except for their homes being given incorrect information to deliberately force them into arrears (many of these women acquired real estate through divorce or a spouse’s death- and are told they have no survivor rights and the bank refuses to accept payment). These people lack the financial resources to obtain legal assistance, and often are so beaten-down emotionally they have no ability to fight back.

 
The servicer’s current weapon of choice continues to be the loan modification offer, when the bank has no intention of granting one. During the loan modification process, paper work will be destroyed, customer service reps will claim to not have received paperwork, and the homeowner will be caught in an endless phone transfer loop (followed by an abrupt disconnect of the call in which the homeowner will be forced to start all over). After months of this nearly futile run-around the bank will claim the homeowner doesn’t qualify for a modification- but will then fail to provide a reason for the modification denial or an opportunity to appeal the servicer’s decision (last week Ocwen was sanctioned by the National Mortgage Settlement for this metric violation). Another tactic is to dual-track the customer (proceed with foreclosure while homeowner is in negotiations for a modification).

 
Unfortunately almost all homeowners are at the mercy of the party who acquires the servicing rights to their Note- and if the homeowner has the misfortunate of their loan being acquired by Ocwen, Nationwide, Bank of America, JPMorgan-Chase, CitiMortgage or Bank of America- the homeowner is almost assured that if they miss one payment during the life of their loan or have some other issue- there will be hell to pay and the bank will make it as difficult as possible to correct the issue.

 

 

Without effective counsel, the homeowner is literally at the servicer’s mercy.
Part of the servicer’s modus operandi is emotional warfare. First of all, mortgage issues are complex and most homeowners have no comprehension of what is going on except for what they are told by low-level employees at the banks that are literally practicing law without a license when speaking to homeowners. By keeping the victim confused, on edge, unable to receive concise answers and other gaslighting techniques- they can exponentially increase default odds in their favor. Most homeowners will follow the directions of their loan servicers without question- and are taken advantage by their naiveté and willingness to comply with the servicer’s demands. It is unconscionable that a loan servicer with a conflict of interest is able to advise vulnerable homeowners about saving their home when the servicer has very clear goals of foreclosure.

 
Over the past nine years, servicers have learned how to “perfect” their default model to ensure foreclosures occur. Now that it is well known that the servicers forge signatures, falsify notarizations, and fabricate documents, the banks have now reverted to “Plan B”. If paperwork they forged and altered over the past six years is a known liability, lenders are now resorting to “lost note” strategies so they can try to start over with a “clean” slate. Once they have convinced the court the note was lost and claim plausible deniability they can use a lost note affidavit to try and correct any earlier issues or oversights that occurred when sloppy fabrication and forgeries were used. The banks can then recreate their foreclosure “storyline”  in order to “perfect” their standing. Don’t be fooled by this tactic.

 
The homeowner’s chance of saving their homes are compromised when their own servicer behaves in predatory ways. Servicers are well aware of how to create a default and who to best target for their crime. The National Mortgage Settlement has proven impotent to stop loan servicers from continuing with their deceptive tactics. Society’s most vulnerable are victimized and have no hope of fighting back against these abusive servicer crime-syndicates with deep pockets, political allies and the courts in their corner. Welcome to the new America.

Relief After Judgment Might Void the Sale

WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation. In order to make it easier to serve you and get better results please take a moment to fill out our FREE registration form https://fs20.formsite.com/ngarfield/form271773666/index.html?1453992450583 
Our services consist mainly of the following:
  1. 30 minute Consult — expert for lay people, legal for attorneys
  2. 60 minute Consult — expert for lay people, legal for attorneys
  3. Case review and analysis
  4. Rescission review and drafting of documents for notice and recording
  5. COMBO Title and Securitization Review
  6. Expert witness declarations and testimony
  7. Consultant to attorneys representing homeowners
  8. Books and Manuals authored by Neil Garfield are also available, plus video seminars on DVD.
For further information please call 954-495-9867 or 520-405-1688. You also may fill out our Registration form which, upon submission, will automatically be sent to us. That form can be found at https://fs20.formsite.com/ngarfield/form271773666/index.html?1452614114632. By filling out this form you will be allowing us to see your current status. If you call or email us at neilfgarfield@hotmail.com your question or request for service can then be answered more easily.
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Article by Hudson Cook

see http://www.lexology.com/library/detail.aspx?g=d48dbdf7-2e5a-438d-97cd-98b59fbd062f

In the maelstrom of musical chairs characterizing most foreclosures, there has been a phenomenon that is not discussed very much. The Judgment of foreclosure has been entered but the parties agree to reinstatement (or possibly even modification) before the sale. Most courts seem to be saying that the foreclosure sale under those circumstances is void, although the Mississippi court described in the above referenced article did state that the purchaser at auction did have standing to challenge the reinstatement or more specifically to ratify his or her purchase of the property.

The ruling seems to make sense from the standpoint of the main parties to the litigation but it does pose problems for those who thought they purchased the property and went to some time and expense to make the purchase. On balance the courts seem to lean heavily in the direction of home retention under these circumstances.

This is just one of a myriad of examples where a pro se litigant might miss an opportunity for home retention. It is quite common for homeowners to receive such offers after judgment and before sale. And it is also getting increasingly common where some settlement is reached for reinstatement and modification. But the question remains as to whether the new arrangement is binding or valid if the offer is from a servicer for a trust that does not own the debt, note or mortgage.

This is to be distinguished from situations where the homeowner attacks the judgment or the wrongful foreclosure based upon fraud like a void assignment or some other element. Courts are much less inclined to vacate their own judgment based upon such allegations, although we have seen instances where they have done so.

Focus for Political Candidates: SHOW ME YOUR KNOWLEDGE About the Mortgage Crisis and the Economic collapse!

see West Coast Workshop Northern California

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For more information please call 954-495-9867 or 520-405-1688.

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I’ve been receiving emails from many candidates for public office, including one recent email calling for the break-up of the big banks — a theme picked up from Elizabeth Warren. They are right. But Bernie isn’t telling the people why that should happen and he isn’t taking the opportunity to resonate with what tens of millions of people already know about our economy, about Wall Street and about government. The system is rigged and people who run against the banks will win if they get specific and demonstrate their knowledge such that the people who are voting have actual confidence that the candidate knows what he or she is talking about and will actually do something to bring this nightmare to an end, restore the American middle class that is the engine of the US economy, and restore social order.

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Dear Bernie,

This message is too vague. You are underestimating the knowledge and intelligence of the American Public. More than 17,000,000 people have been displaced by the process of foreclosure. And there are another 17,000,000 people who will be displaced over the next 5-8 years. In order for that to happen the banks hide the real transactions and have been submitting documents that are fabricated, forged, robo-signed and supported by robo-testimony from people whose only job is to testify — thus insulating the the real players from committing perjury.

Talk about how and why millions of black, Hispanic and under-educated, unsophisticated borrowers were targeted for absurd loan products that ‘reset” to payment levels higher than their household income has ever been. You will cut across all demographic lines from far left to far right and everything in between.

Tens of Millions of people know this. You don’t need to do much teaching. If you want to touch a nerve, talk about how the mortgage process jumped from 4-5 loan products in in the 1970’s to around 450 loan products in the mortgage meltdown period. Talk about how disadvantaged people were targeted for loans because the failure of those loans made the most money for the banks.

Talk about the Miami suit where the city was stuck with brunt of the cost of ZOMBIE HOUSES — phenomenon throughout American cities where hundreds of thousands of homes have bull dozed because the same banks that interfered with a modification, forced the foreclosure then abandoned the property.

Talk about how no prospective borrower could understand the intricate lending process that emerged and that the Federal disclosure laws were inadequate to alert borrowers that they were being lured into loans they could never repay. Talk about how borrowers were lured into “default” with the hope of modifications by the famous “You must be 90 days behind to be considered for modification”, and lured into bankrupting their lives and households by spending every penny they could get their hands on to save their home — all to pay banks who had no interest in their loan and who had no actual authority.

Talk about the great shift (theft) of wealth from the American middle class to the banks who now have the money parked off-shore. Question why the banks supposedly suffered huge losses but are now bigger than ever with reporting earnings that are out-sized compared to any other activity in the our economy —a sure signal that they are cooking the books. Wall Street’s job is to make capital available for business activity. We have had our great recession where GDP for actual goods and services was reduced from 84% of GDP to only 52% of GDP — with the entire balance going to financial services. How could there be a need for more paper (securities) for business activity that declining? Talk about the nearly $1 Quadrillion in the shadow banking market where the illusion of economic activity is kept alive.

And why are the banks going to court relying on paper instruments that talk about transactions that never existed? If the transactions were real, then why don’t they show it? Why do they stonewall easy questions like “who is my creditor?” Why are they winning? Why are judges saying that they don’t care whether the borrower owes money to the party suing him; all that matters, say the judges, is that the borrower stopped paying. Really? If I mistakenly pay you $100 per month for a debt that doesn’t exist TO YOU, under what theory of law, morality or ethics can I be sued for withholding payment when I realize my mistake?

The all inclusive message should be that all the players should be forced to the table and all of them must share in the losses and risks that arose with the tactics employed by banks. Nearly all requests for workouts and modifications are being rejected by banks who have no authority to reject them. But the banks stand to gain billions, perhaps trillions of dollars by forcing homeowners into foreclosure because THEY, not the investors, get the proceeds of the sale through “recovery” of “servicer advances” that (a) completely eviscerate the false claim of default on the loan (the creditor was paid) (b) were never “advanced” by any authorized “servicer” (The money for servicer advances came from the investors’ money in a slush fund accessed by the servicer).

Talk about how virtually all borrowers who have applied for modifications have had their paperwork “lost” or “never received” or “incomplete” and how when the paperwork is sent again, it is now too stale and the process must be started over again — all the while the bank is forcing the homeowner deeper and deeper into a default that does not and never did exist. Talk about the tens of thousands of modifications that were approved and then ignored in order to force the foreclosure of a home that the bank would then abandon..

SHOW YOUR KNOWLEDGE OF THESE THINGS AND PEOPLE WILL COME!

Adam Levitin on Backdating: A Pattern of Conduct at Ocwen and Other Players in the Foreclosure Frenzy

see also http://themreport.com/news/government/01-13-2015/california-moving-suspend-ocwens-mortgage-license

Adam Levitin has definitely established himself as one of the more respected figures in analyzing and commenting on mortgage and foreclosure practices. In this article below, he reveals the fraudulent nature of even the most benign looking foreclosures. Various parties, including Ocwen which he cites in particular, regularly backdated denials of modification and backdated ownership paperwork.

His emphasis is on the pattern of conduct dating back many years which continues unabated despite administrative findings of wrongdoing, and settlements in which they agreed to correct these practices. If you look at Select Portfolio Servicing, formerly Fairfield Capital, (and now owned by Credit Suisse) you will see that they were guilty of fraudulent servicing practices as far back as 2003.In a recent case where Patrick Giunta and I represented the homeowners the court found that there was no authority of the servicer and no loan transfer to the alleged Trust. The Judge specifically expressed her displeasure with the obvious indications of backdating and fabrication of endorsements, assignments and the attempt at using Powers of Attorney that were a fabricated work-around

Levitin is right in his conclusion. And I would add that any “presumption” rebuttable or otherwise, should not be allowed regarding any paperwork that is produced by these players. Levitin should be a regular read for those of you who are following this evolving mess.

http://www.creditslips.org/creditslips/

Corporate Recidivism? Ocwen’s Charter Problems

posted by Adam Levitin
Last month mortgage servicer Ocwen (that’s NewCo backwards) was mauled by the NY State Department of Financial Services. Now the California Department of Corporations is seeking to revoke Ocwen’s license to do business in that state.
Here’s the thing that is often forgotten: this ain’t the first time! Ocwen used to be a federal thrift. In 2005, however, Ocwen “voluntarily” surrendered its thrift charter in the face of predatory lending/servicing investigation. And here we are, a decade later. What’s changed? By the NY and California allegations, not much. In other words, we’re looking at a potential case of corporate recidivism. I’ll refrain from commenting on the merits of the allegations, but there should be zero tolerance for corporate recidivism.
While I’m at it, a word about the substance of the NY allegations and remedy. NYDFS accused Ocwen of backdating loan modification denial letters to borrowers facing foreclosure (and thereby depriving the borrowers of a chance to timely appeal the denial). Sadly, this isn’t the first time backdating has reared its head in the servicing business. Remember how the robo-signing story broke? A GM/Ally employee named Jeffrey Stephan stated in a deposition that he personally signed some 10,000 foreclosure affidavits a month. That was the story that the media glommed onto. But the 10,000 affidavits/month was an unexpected deposition by-product. The real issue uncovered in that deposition was that GM/Ally had been backdating foreclosure documents to show that it had standing at the time it filed foreclosure suits, despite not actually being the noteholder and mortgagee until a subsequent date. Loans were supposedly transferred on Christmas Day, Easter, New Year’s Day, etc. So it would seem that backdating may not be an isolated problem to Ocwen. Lastly, it’s worth comparing the NYDFS remedy with the National Mortgage Settlement. NYSDFS got $150 million in “hard dollar” loan mods (not mods paid for on investors’ dime). Ocwen is subject to an independent monitor’s supervision for three years and cannot acquire any more mortgage servicing rights (MSRs). And, Ocwen’s Chairman must resign and two additional independent board members must be added.
In contrast, the National Mortgage Settlement (NMS) was largely based on “soft dollar” mods, rather than real borrower relief. It did come with an independent monitor, but the NMS monitor isn’t able to be in the banks’ face the way the Ocwen monitor can. The NMS didn’t limit acquisition of MSRs. And it didn’t touch existing bank management or board structure. Put it this way: if the federal government and state AGs had as much spine as Ben Lawsky, Mssrs. Dimon, Moynihan, and Stumpf would be looking for new jobs (or enjoying their retirement). Of course, Ocwen is a scrappy, non-bank, non-SIFI. So it doesn’t enjoy the kid glove treatment.
The NYDFS Ocwen settlement sets out a new potential paradigm for mass consumer financial abuse settlements: real money, serious monitoring, and heave-ho to the old management. If senior management thinks that their job security is at risk for consumer abuse, they might well be more proactive at preventing it in the first place.

Ocwen Settlement with NY AG Could Spell Doom for Servicers

For further information please call 954-495-9867 or 520-405-1688

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The new settlement with New York’s Department of Financial Services calls for resignation of the Chairman (Erbey), payment of a $100 million fine, Payment of $50 million in restitution to borrowers who were wrongfully foreclosed, and a set of rules requiring Ocwen to help borrowers avoid foreclosure. Schneiderman, Attorney General, was prosecuting the case aggressively. This will add to the growing list of questions from judges over rotating servicers and trustees, servicing practices, robo-signing, forgery, fabrication of documents and the refusal of the foreclosing party to simply show the funding for the loan and the consideration paid for the acquisition of the loan.

Why is this important: it reflects an administrative finding that Ocwen has been wrongfully foreclosing on people from 2009 to the present. And it directs money and other assistance to homeowners who find themselves tangled in the complex web of deceit that we call securitization (Adam Levitin calls it “securitization fail” because the loans never actually made it into the trust — because the proceeds of sale of mortgage bonds were never given to the trust by the investment bank who sold them).

The fine is a fraction of what it should be and the amount set aside for victims of wrongful foreclosure is pathetic. And it basically leaves the completed foreclosures to stand even though it is obvious that Ocwen was following the directive “We are in the business of foreclosure, not modification). And while the settlement requires Ocwen to provide the complete loan file on request it fails to state what happens if they don’t and perhaps more importantly it fails to give details of what must be in that loan file even though they are widely known. Specifically, the completed loan file would show wire transfer receipts and wire transfer instructions from a party who was acting as a conduit for the investor money — a party unrelated to the REMIC Trust and not tied to the investors by contract.

Another key provision requires Ocwen to provide a detailed explanation of why and how a request for workout or modification was denied.

But remember this is one state. If all 50 states demanded the same results, based upon the New York findings there could be a global fine of $5 Billion and restitution ($2.5 Billion) for U.S. homeowners who are victims of wrongful foreclosure in the amount of $2.5 billion. And if you add the other servicers who have been doing exactly the same thing as Ocwen, the amounts increase geometrically.

A key provision of the settlement is continued monitoring. So if there is an issue with a foreclosure of a mortgage serviced by Ocwen, a complaint to the office of the attorney general or the office of the New York Department of Financial Services will help — perhaps even if you are not a resident of the state of New York.

One obvious concession to the banks is the reference to the onboarding process. In allowing Ocwen to purchase servicing rights (MSR) the reference is vague as to defining “onboarding.” This phrase is often being used in Court to avoid producing real records and real testimony from real companies who were real servicers. Judges, seeing only what is in front of them, are forced to rule that the records of the new “servicer” are business records within the exception provided under the hearsay rule in most states.

PRACTICE POINTER FOR LAWYERS: If you fail to argue that the business record must contain entries made at or near the time of the transaction, you will most likely end up with records from a “new” party who is not a servicer but whose records contain the alleged records of other servicers. I don’t see how the onboarding process could ever be accepted in lieu of records and testimony from companies who actually did servicing of the account — i.e., receipt of payments from the borrower and remittance to the creditors.

Here are some salient quotes from the article:

ATLANTA, Dec. 22, 2014 (GLOBE NEWSWIRE) — Ocwen Financial Corporation (OCN) (“Ocwen”) today announced that it has reached a comprehensive settlement with the New York Department of Financial Services (“DFS”) related to the agency’s recent investigation.

“We are pleased to have reached a comprehensive settlement with the DFS and will act promptly to comply with the terms,” said CEO Ronald Faris. “We believe this agreement is in the best interests of our shareholders, employees, borrowers and mortgage investors. We will continue to cooperate with the DFS in the implementation of the terms of this settlement which we believe will allow Ocwen to continue to focus on what we do best — helping homeowners.”

Under the terms of the settlement, Ocwen will pay a civil monetary penalty of $100 million to the DFS by December 31, 2014, which will be used by the State of New York for housing, foreclosure relief and community redevelopment programs. The Company will also pay $50 million as restitution to current and former New York borrowers who had foreclosure actions filed against them by Ocwen between January 2009 and December 19, 2014. As previously communicated in the third quarter of 2014, Ocwen recorded a charge of $100 million to increase its legal reserves in anticipation of a potential settlement with the DFS. Ocwen will record an additional $50 million charge in its fourth quarter 2014 financial statements to reflect the final settlement amount.

…. founder William C. Erbey will step down from his position as Executive Chairman of Ocwen, effective January 16, 2015. Barry Wish, a current director of Ocwen, will assume the role of Non-Executive Chairman on that date.

Ocwen has also agreed to non-monetary provisions relating to New York borrower assistance measures, a monitor-led oversight of Ocwen’s operations, interactions with related parties and certain corporate governance measures. MSR acquisitions will be subject to Ocwen meeting specified benchmarks as well as DFS approval.

A summary of the settlement terms is below.

Settlement Summary of Monetary Provisions

  • Ocwen will pay a civil monetary penalty of $100 million to the DFS by December 31, 2014, which will be used by the State of New York for housing, foreclosure relief and community redevelopment programs.
  • Ocwen will also pay $50 million as restitution to current and former New York borrowers in the form of $10,000 to each borrower whose home was foreclosed upon by Ocwen between January 2009 and December 19, 2014, with the balance distributed equally among borrowers who had foreclosure actions filed, but not completed, by Ocwen between January 2009 and December 19, 2014.

Settlement Summary of Non-Monetary Provisions

Borrower Assistance

Beginning 60 days after December 19, 2014, and for two years, Ocwen will:

  • Provide upon request by a New York borrower a complete loan file at no cost to the borrower;
  • Provide every New York borrower who is denied a loan modification, short sale or deed-in-lieu of foreclosure with a detailed explanation of how this determination was reached;
  • Provide one free credit report per year, at Ocwen’s expense, to any New York borrower on request if Ocwen made a negative report to any credit agency from January 1, 2010, and Ocwen will make staff available for borrowers to inquire about their credit reporting, dedicating resources necessary to investigate such inquiries and correct any errors.

Operations Monitor

  • The DFS will appoint an independent Operations Monitor to review and assess the adequacy and effectiveness of Ocwen’s operations. The Operations Monitor’s term will extend for two years from its engagement, and the DFS may extend the engagement another 12 months at its sole discretion.
  • The Operations Monitor will recommend and oversee implementation of corrections and establish progress benchmarks when it identifies weaknesses.
  • The Operations Monitor will report periodically on its findings and progress. The currently existing monitor will remain in place for at least three months and then for a short transitional period to facilitate an effective transition to the Operations Monitor.

Related Companies

  • The Operations Monitor will review and approve Ocwen’s benchmark pricing and performance studies semi-annually with respect to all fees or expenses charged to New York borrowers by any related party.
  • Ocwen will not share any common officers or employees with any related party and will not share risk, internal audit or vendor oversight functions with any related party.
  • Any Ocwen employee, officer or director owning more than $200,000 equity ownership in any related party will be recused from negotiating or voting to approve a transaction with the related party in which the employee, officer or director has such equity ownership, or any transaction that indirectly benefits such related party, if the transaction involves $120,000 or more in revenue or expense.

Corporate Governance

  • Ocwen will add two independent directors who will be appointed after consultation with the Monitor and who will not own equity in any related party.
  • As of January 16, 2015, Bill Erbey will step down as an officer and director of Ocwen, as well as from the boards of Ocwen’s related companies.
  • The Operations Monitor will review Ocwen’s current committees of the Board of Directors and will consult with the Board relating to the committees. This will include determining which decisions should be committed to independent directors’ oversight, such as approval of transactions with related parties, transactions to acquire mortgage servicing rights, sub-servicing rights or otherwise to increase the number of serviced loans and new relationships with third-party vendors.
  • The Board will work closely with the Operations Monitor to identify operations issues and ensure that they are addressed. The Board will consult with the Operations Monitor to determine whether any member of senior management should be terminated or whether additional officers should be retained to achieve the goals of complying with this Consent Order.

MSR Purchases

  • Ocwen may acquire MSRs upon (a) meeting benchmarks specified by the Operations Monitor relating to Ocwen’s onboarding process for newly acquired MSRs and its ability to adequately service newly acquired MSRs and its existing loan portfolio, and (b) the DFS’s approval, not to be unreasonably withheld.
  • These benchmarks will address the compliance plan, a plan to resolve record-keeping and borrower communication issues, the reasonableness of fees and expenses in the servicing operations, development of risk controls for the onboarding process and development of a written onboarding plan assessing potential risks and deficiencies in the onboarding process.

Fannie and Freddie Slammed by Massachusetts AG

Martha Coakley gets it. Read her letter. Being a politician she does not say that the abstract fear of strategic defaults on all loans across the board is absurd. Well, actually she does say it. Principal reductions and ending patently illegal policies preventing homeowners from buying back their own property at auction are at the center of the solution to the foreclosure mess along with one more thing: things will change when we get the answer to the question IF THESE POLICIES HURT LENDERS, INVESTORS AND BORROWERS, WHY WOULD ANYONE LISTEN TO A THIRD PARTY WHO BENEFITS?

fhfa-letter-051414

As the new head of the Federal Agency administrating Fannie and Freddie, Watts, replacing DeMarco, signals a major change in policy and regulations. The question is whether he means it. There is no doubt at the White House that the economy will continue to be dragged down by foreclosures. Their answer to the problem lies in modifications with “principal reductions” and loosening some standards for lending and securitization.

While the modification policies should be changed, this isn’t enough. Modification has been used as a tool of Wall Street to lure unwary borrowers into the illusion of immediate relief only to be faced with terms that are worse than the borrowers had before when underwriting was virtually nonexistent — albeit with some fees and other “skin in the game” restrictions that could slow up some of the continuing securitization fraud.

The issue is still the same and the fear is still there — will the entire system collapse if we stop putting the full brunt of the foreclosure mess on the backs of unsophisticated homeowners who were induced to buy loan products that were filled with false pretenses, false assumptions and nonexistent review, verification and other underwriting procedures.

At this point, considering the rampant appraisal fraud, homeowners should be given an opportunity to regain equity and have some skin in the game — as opposed to the all or nothing proposition they are fighting in court with complete strangers to their transactions 000 alleged by parties relying on evidentiary presumptions rather than real facts of each transaction.

In 2007 I proposed amnesty for everyone and that everyone share in the the losses from civil and perhaps criminal fraud caused by the banks taking money from investors and applying it to loans that were guaranteed to fail and then scaring government into thinking that the world would end if they were called on this predatory and illegal practice on the basis of being too big too fail.

Too big to fail is a myth. First, the banks can’t collapse because they are cash rich off shore. Trillions were siphoned out of pension funds, taxpayers and insurers and guarantors taking so much money that the federal reserve had to engage in various schemes of direct and disguised quantitative easing (like buying mortgage bonds that were worthless at 100% of par value). The losses claimed by the banks were also fictional.

At this point everyone at the levers of power knows the truth. The trusts were never funded and the trusts never acquired the loans. This places the investors in the position of being undifferentiated and unattached creditors for loans they funded but were never  given proper documentation in the form of notes payable tot he investors and mortgages pledging collateral to the investors, leaving them as unsecured creditors.

But now the government is committed financially to a policy of continuing fraud started by the banks which is the same thing that is happening in court. The issue is not whether a deadbeat homeowner will get a free house (that is a choice presented by the banks in a false set of presumptions). despite the dire straits of investors in worthless and fraudulent mortgage bonds, homeowners are mostly willing to offer new notes and new mortgages that reflect economic reality. No, those deadbeats are nothing of the sort. They are hard working, play by the rules people who simply want a fair deal and they are willing to shoulder the loss forced on them by the banks.

Want to test it out? Call us about our AMGAR project — 7 years in the making — in which we call the bluff of the banks. It takes money, but the investors are starting to line up to help, and the homeowners with independent assets to offer the money rather than the foreclosure are racking up wins in case after case. Watch the banks back peddle as they reject the money in favor of their much needed foreclosure judgment and sale so they can report the loan was a bust — and therefore the money the banks received in servicer payments to the investors, insurance tot he banks, guarantees and other proceed from other obligors won’t need to be paid back.

And if played properly, the tax revenue due from the banks for violations of the REMIC provisions, part of which will fall on investors who fail to make their case against the broker dealers who sold them that mortgage crap, will more than offset the lack of revenue on Federal and State levels. All they need to do is give up on too big to fail and give up on thinking that killing the middle class is a good idea because the burden must fall somewhere. In fraud, the burden falls on the perpetrators not the victims although it is rare that restitution ever equals the loss. Virtually every foreclosure is merely the court’s complicity in the continuing fraud.

Remember the playbook of the bank attorneys into undermine your confidence until the very last second when they submit their voluntary dismissal in court. Call their bluff, offer the money based upon YOUR terms or the terms of an investor who is willing to make the commitment. Your terms require proof of ownership and proof of balance after credits for third party payments. you will find they don’t own the loan and the balance of the loan has already been paid down or paid off entirely.

Don’t just file motions to enforce discovery. File motions with affidavits from forensic analysts that explain why you need what you are asking for. You’ll get the order. And as soon as you get the order, the offers of settlement will start pouring in.

For information and further assistance please call 520-405-1688 or 954-495-9867. We provide help and guidance to professionals that know foreclosure defense, foreclosure offense, modifications, short-sales, Hardest Hit Funds and other Federal, State and private programs. Remember to ask about AMGAR. It is time to strike back. Let the other side start feeling the pain.

see http://www.nytimes.com/2014/05/14/business/Melvin-Watt-shifts-course-on-fannie-mae-and-freddie-mac.html?ref=business&_r=0

 

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