Florida lawyer warns of deepening foreclosure mess

ROYAL PALM BEACH, Florida (Reuters) – A Florida lawyer at the forefront of legal challenges against foreclosure practices by mortgage lenders says the U.S. housing morass will drag on due to difficulty in determining who owns home loans.

Questions over practices in foreclosure procedures across the United States have forced at least three banks to temporarily halt their proceedings and prompted a growing chorus of calls by lawmakers and regulators for an industry-wide moratorium until problems are resolved.

However, Tom Ice, whose law firm Ice Legal P.A. was among the first to get banking executives to acknowledge shoddy foreclosure practices, said it will be difficult for banks to fix all of the paperwork errors.

“This isn’t just a procedural technicality, it’s exposed the very problem at the heart of the securitization fiasco, which is no one knows who owns what,” he said in an interview on Tuesday.

A record 1.2 million U.S. homes are expected to be taken over by banks this year, up from 1 million last year and 100,000 in 2005, real estate data company RealtyTrac Inc. says.

Faced with a rising tide of foreclosures, lenders employed so-called “robo-signers” — middle-ranking banking executives who signed thousands of affidavits a month claiming they were knowledgeable of the cases.

However, some lenders, prodded by legal challenges, now say officials were not aware of details in all of the cases and vow to resubmit them. It is unclear how many cases are involved but it is believed to be in the tens of thousands.

But Ice said a broader problem was damaging the process of resolving the foreclosures. He said many banks were initiating proceedings without knowing if they in fact own the loans and often failed to produce requested documents.

The securitization of home loans meant many have been sold off to other investors. Banks still own some, but frequently serve as loan servicers on behalf of the actual owner, whether it is another bank or an investor pool.

Some mortgages can be tracked in an electronic system known as MERS, or the Mortgage Electronic Registration Systems, that traces transfers among member banks. But the mechanism is not fully reliable, Ice said.

A recent sample among some 400 foreclosure cases Ice’s law firm is handling revealed 71 percent with possible discrepancies in detailing the owners of clients’ loans.

“Few of these processes followed the rules, shortcuts were used at every step,” he said. “The industry itself doesn’t know who owns what.”

BANKS WARY OF BAD LOAN STIGMA

Some banks may be reluctant to step forward, worried about how it might reflect the amount of bad loans on their balance sheets, Ice added.

Lenders, including JPMorgan Chase and Co., Bank of America Corp and Ally Financial Inc, are now scrambling to defend and improve their foreclosure procedures.

Continue reading…REUTERS

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by Brett Horn | 10-06-10 | 9:09AM | E-mail Note

Lender Processing Services LPS held a conference call Wednesday to discuss its involvement in the mortgage foreclosure controversy and recent allegations against the company. Through its mortgage default services segment, which constitutes about half of the company’s revenue, LPS is deeply involved in processing mortgage foreclosures. Recently, with mortgage foreclosures heating up, there has been controversy surrounding lenders’ foreclosure procedures, which has led a few major mortgage lenders to halt foreclosures until they can verify that they are following the letter of the law. The main source of contention surrounds a practice called robo-signing. Whereas judicial foreclosure requires each foreclosure to be reviewed and vetted by someone knowledgeable about the case, lenders may have had employees signing foreclosures en masse without review. LPS had previously issued a press release stating that it is not involved in this practice, and it reiterated the point on the call. At this point, we see no reason to believe this is not correct, and we don’t see this as a major issue for the company.

The company also discussed two recent lawsuits filed against it, which allege that LPS illegally splits fees with foreclosure lawyers.

[...]

…Continue reading…MORNING STAR

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Related:

LPS 101

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Lender Processing Services Inc. (LPS) Revolving Door To Washington D.C.

© 2010-12 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.
www.StopForeclosureFraud.com

Judge Murphy deserves an applause for the great job of questioning all facts and making no assumptions.

SUPREME COURT – STATE OF NEW YORK
TRIAL TERM. PART 17 NASSAU COUNTY

PRESENT:
Honorable Karen V. Murphv
Justice of the Supreme Court

ONEWEST BANK, FSB
155 North Lake Avenue
Pasadena, CA 91101,
Plaintiff(s),

-against-

ALEXADER ROTH, MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS, INC.
AS NOMINEE FOR E*TRADE WHOLESALE
LENDING CORP., ET AL.,
Defendant(s).

Excerpts:

In this matter Plaintiff failed to establish that it is entitled to the relief sought. It is well settled that a foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of mortgage is a nullity. (Kluge v. Fugazy, 145 A. 2d 537 538536 N. 2d 92 (2d Dept. , 1988)). While Plaintiff alleges that it is the holder of both the note and mortgage, the record before the Court suggests otherwise and raises factual issues as well as issues of credibility that can not be determined herein. (see .J Capelin Assoc. v. Globe Mfg. Corp. 34 N. 2d 338 341 313 N. 2d 776 357 N. 2d 478 (1974)).

The Complaint filed September 4, 2009 stated that Plaintiff is “the owner and holder of a note and mortgage being foreclosed.” Bald assertions of possession of the original note without more, in light of the conflicting evidence, is not sufficient to establish a prima facie case.

Furtermore, the assignment recorded on October 1 , 2009 specifically states that it is an “assignment of mortgage ” and makes no reference to the note. Thus, a question of fact exists as to whether the note was ever assigned or delivered to Plaintiff. It may well be that the note was neither assigned nor delivered to Plaintiff prior to commencement of this action and Plaintiff would then be without authority to bring this action.

A stamp on the copy of the note provided by Plaintiff appears to be an indorsement of the note in blan, by the original lender, and is not dated (U.S. Bank, N.A. v. Collymore, 68 A.D.3d 752 890 N. 2d 578 (2d Dept. , 2009)). Additional issues regarding the timing of that indorsement on the note and whether MERS, at the time it executed the Assignment of Mortgage had authority, let alone the abilty, to assign the note and/or whether, in fact the note had already been assigned at the time of the purported assignment of the mortgage exist (id).

ORDERED that movant shall serve a copy of this Order upon all parties, or their attorneys if represented by counsel and shall there after file affidavits of service with the County Clerk and it is further,

ORDERED that a copy of this Order and proof of service of same be anexed as exhibits to any future applications regarding the subject mortgage and note.

The foregoing constitutes the Order of this Court.

Dated: September 1 , 2010
Mineola, N.
NASSAU COUNTY
COUNTY CLERK’S

ONEWEST BANKS GET THE BOOT, MERS ASSIGNMENT MENTIONS NO NOTE

Scribd

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Secretary Brunner: Please tell President Obama NOT to sign the Interstate Recognition of Notarizations Act

On Monday, September 27, 2010, U.S. Senator Bob Casey (D-PA), on the Senate floor, asked that the Judiciary Committee be discharged from further consideration of a bill that would hurt consumers.

H.R. 3808 requires federal and state courts to recognize notarized documents from other states, including ones that contain electronic notarizations that are not subject to the same consumer safeguards of documents notarized in person. Some financial institutions are using electronic notarizations to process home foreclosure documents.

Sen. Casey asked that the Senate move forward with immediate consideration of the bill with unanimous consent that the bill pass with no other action or debate. The Senate passed the bill without amendment by unanimous consent. It now sits on the President’s desk. I’m asking you to email or call the President at 202-456-1111 to ask him not to sign the bill.

H.R. 3808 is known as the “Interstate Recognition of Notarizations Act.” It passed the House under a suspension of the rules in April 2010. It requires federal and state courts to recognize any notarization that is lawful in the state where the notary is licensed. Now, in one day, it passed in the Senate.

When I learned of it last Thursday, it sounded innocuous to me, but then I started looking at the timing of the bill. GMAC, owned by Ally, had just suspended its foreclosure actions in 23 states, including Ohio. I had already referred Chase Home Finance, LLC, on August 23, 2010, to the U.S. Department of Justice, asking it to review and investigate Chase’s document notarization practices in home foreclosures (18,000 documents per month were being notarized by 8 people, along with other irregularities). I license notaries in the State of Ohio. Even though I don’t have the power under state law to investigate or prosecute, I couldn’t stand idly by without acting. That’s why I’m asking you to email or call the President at 202-456-1111 to ask him not to sign the bill.

Last Wednesday, the day before I announced the DOJ referral, JPMorgan Chase announced it was having third party counsel review its document procedures for foreclosures. Just two days before, the U.S. Senate had rushed through H.R. 3808. Something didn’t seem right. Since then others agree with me.

© 2010-12 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.
www.StopForeclosureFraud.com

JPMorgan, Bank of America Face `Hydra’ of State Foreclosure Investigations

By Margaret Cronin Fisk – Oct 6, 2010 12:01 AM ET

JPMorgan Chase & Co., Bank of America Corp. and Ally Financial Inc., defending allegations of fraudulent home foreclosures from customers and Congress, may face the most financial peril from investigations by state attorneys general.

Authorities in at least seven states are probing whether lenders used false documents and signatures to justify hundreds of thousands of foreclosures, and the number of these inquiries will grow, according to state officials and legal experts.

“You’re going to see a tremendous amount of activity with all the AGs in the U.S.,” Ohio Attorney General Richard Cordray said in an interview. “We have a high degree of skepticism that the corners that were cut are truly legal.”

JPMorgan, Bank of America and Ally have curtailed foreclosures or evictions in 23 states where courts have jurisdiction over home seizures.

While homeowners in those states and elsewhere must usually show damages to win a lawsuit, “attorneys general can just sue over deceptive sales practices and get penalties,” said Christopher Peterson, a University of Utah law professor who specializes in commercial and contract law.

In Ohio, penalties include fines up to $25,000 per violation, with each false affidavit or document considered a violation, according to state law enforcement officials. In Iowa, fines rise to a maximum of $40,000 for each violation.

Foreclosure Freeze

This penalty would apply to “every instance of an affidavit that was filed improperly or every time facts were attested to that weren’t true,” said Cordray. His counterpart in Connecticut, Richard Blumenthal, has called for a freeze on foreclosures and said the submissions are a “possible fraud on the court.”

Officials in Ohio and Connecticut, along with Florida, Texas, North Carolina, Iowa and Illinois, said they are investigating mortgage foreclosure practices.

Continue reading …BLOOMBERG

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