2012 February 06 | FORECLOSURE FRAUD | by DinSFLA

Archive | February 6th, 2012

Bruce Judson: Is the Robo-Mortgage Scandal the Back-End of Tax Evasion and Fraud?

Bruce Judson: Is the Robo-Mortgage Scandal the Back-End of Tax Evasion and Fraud?

HuffPO-

The terms for the settlement of the robo-mortgage scandal and the states participating in the settlement are expected to be resolved soon. Unfortunately, as this settlement approaches, new and grave questions have emerged. These questions raise the possibility that the government may be turning a blind eye to tax evasion and fraud.

Last week, I wrote an article titled The Proposed Robo-Mortgage Settlement Might Give Banks A Free Pass. At the time the deadline for states Attorney’s General to sign on to the settlement was February 3. It has now been pushed back to Monday, February 6.

[HUFFINGTON POST]

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Nevada’s Masto Won’t Decide by Today’s Deadline on U.S. Foreclosure Accord

Nevada’s Masto Won’t Decide by Today’s Deadline on U.S. Foreclosure Accord

Bloomberg-

Nevada Attorney General Catherine Cortez Masto won’t decide by today whether to join a nationwide settlement with banks over foreclosure practices, a spokeswoman said. A deadline for joining the accord was today.

Masto’s office is “still reviewing the terms” of a proposed nationwide settlement over bank foreclosure practices, Jennifer Lopez, a spokeswoman for the attorney general said. Masto is “working to address Nevada homeowners’ needs,” Lopez said. Masto said in a Jan. 27 letter to state and federal officials involved in negotiating the accord that she needed answers to 38 questions to evaluate the deal.

[BLOOMBERG]

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Alison Frankel: N.Y. AG’s new MERS suit: Where are the MBS investors?

Alison Frankel: N.Y. AG’s new MERS suit: Where are the MBS investors?

Reuters Legal-

After New York Attorney General Eric Schneiderman filed his new complaint against JPMorgan Chase, Bank of America, Wells Fargo, and the Mortgage Electronic Registry System, I got an email from the AG’s spokesman. “Looking forward to your story on the MERS lawsuit in the wake of your inaccurate conjecture this week,” it said, referring to my column expressing skepticism that the recently-announced joint mortgage-backed securities task force will accomplish more than the individual task force members have.

As I said in that piece, I’m eager for my skepticism to be proved unfounded. I hope the task force tells the world exactly who is responsible for the greed-driven securitization deficiencies already alleged in private MBS suits and in Congressional reports. I hope someone comes up with a legal theory to hold wrongdoers accountable for packaging mortgages that never should have been issued into securities that were (allegedly) not what they were represented to be.

That, however, is not what the AG’s new case does. [...]

[REUTERS LEGAL]

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MERS Responds to Some of Schneiderman’s Claims

MERS Responds to Some of Schneiderman’s Claims

Financial Fraud Law-

We mentioned the other day that New York Attorney General Eric Schneiderman has sued major banks for “deceptive and fraudulent use” of MERS.  MERS has issued a response that we believe merits being repeated here in full: 

“Mortgage Electronic Registration Systems, Inc. (MERS) takes its role as a mortgagee very seriously. The MERS® System is an important part of the mortgage industry and the MERS business model has been consistently validated in all 50 states. All of the activities of MERSCORP and MERS are in compliance with state and federal laws. We are confident that as people understand more about MERS and the role we play, they will see that MERS adds great value to our nation’s system of housing finance in ways that benefit not just financial institutions, the broader economy and the government, but—most of all—homeowners.

[FINANCIAL FRAUD LAW]

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Richard (RJ) Eskow: How to Score a Foreclosure Fraud Settlement Deal

Richard (RJ) Eskow: How to Score a Foreclosure Fraud Settlement Deal

HuffPO-

Once again we’re hearing that a foreclosure fraud deal is about to be announced between major banks, the U.S. government and most or all of the states. We’ve heard that before, only to have the deadline pushed back so that holdout Attorneys General can be brought on board with the agreement.

Deal, or no deal? We’re not sure, but it’s certainly possible we’ll hear something today, tonight or tomorrow.

How will we know if it’s a good deal for the American people? After all, this is an issue with a lot of moving parts. It includes all of the states and multiple agencies within the Federal government, and involves a multitude of allegations involving several different kinds of crime that come under different jurisdictions. Even the statutes of limitations are a moving target.

[HUFFINGTON POST]

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Abigail C. Field: No, the Latest Bailed-Out Bank Giveaway Won’t Help Housing

Abigail C. Field: No, the Latest Bailed-Out Bank Giveaway Won’t Help Housing

Abigail C. Field-

It’s incredibly important that you–voters–understand that you are being lied to right now by your Federal Government and Team Obama.

Today a still secret deal will be announced and signed by the Bailed-Out Banks (B.O.B.s), our Federal Government, and an unknown but probably tragically high number of states attorneys general. You’ll hear this deal called a “Robo-signing settlement”, though it’s impossible to see how it can end the fraudulent manufacture of evidence by creditors in foreclosure cases. You might also hear it called a “mortgage servicer settlement”, because the B.O.B.’s conduct while wearing their mortgage servicing hats is supposedly the focus of the deal. But here’s how it should be known: The United States’s Latest Lavish/Slavish Gift to the Bailed-Out Banks Settlement.

[REALITY CHECK]

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DOCX Faces Foreclosure Fraud Forgery Charges in Mo. Foreclosures

DOCX Faces Foreclosure Fraud Forgery Charges in Mo. Foreclosures

Some tid-bits for you all from DOCX’s website in 1998:

DOCX was established in March of 1993 by its president, Lorraine O. Brown. It’s a privately held Colorado Limited Liability Company. DOCX set up headquarters in Springfield, Ohio. In October 1994, DOCX merged forces with Ontrak Services. Ontrak was a pioneer in the development of outsourcing services for assignment and satisfaction processing. With the acquisition of Ontrak, DOCX expanded its operations to Frederick Maryland. DOCX has recently established a marketing/sales office in Atlanta, Georgia. DOCX operations continue to run in both the Springfield, Ohio and Frederick, Maryland locations.

[...]

DOCX developed two software products; DOCX RID™ (Recorders Information Database) which keeps track of County Recorder fees, and the requirements for recording assignment and satisfaction documents, UCC’s, and to obtain certified true copies of recorded documents. DOCX’s latest software development, DOCX in a BOX™, takes the DOCX RID program significantly further by providing the software to produce the completed and legally-sufficient documents required to process


NYT-

One of the largest companies that provided home foreclosure services to lenders across the nation, DocX, has been indicted on forgery charges by a Missouri grand jury — one of the few criminal actions to follow reports of widespread improprieties against homeowners.

A grand jury in Boone County, Mo., handed up an indictment Friday accusing DocX of 136 counts of forgery in the preparation of documents used to evict financially strained borrowers from their homes. Lorraine O. Brown, the company’s founder and former president, was indicted on the same charges.

Employees of DocX, a unit of Lender Processing Services of Jacksonville, Fla., executed and notarized millions of mortgage documents for big banks and loan servicers over the years. Lender Processing closed the company in April 2010, after evidence emerged of apparent forgeries in these documents, a practice now called robo-signing.

[NEW YORK TIMES]

Scribd

 

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Biden: There will be AG’s going forward with criminal investigations. NY, DE, NV AG’s will pursue criminal conduct charges re: servicing.

Biden: There will be AG’s going forward with criminal investigations. NY, DE, NV AG’s will pursue criminal conduct charges re: servicing.

State Ag’s and Government Stand-Off over Foreclosure Fraud Settlement- I thought MERS was off topic and they would not release them?

I think LPS needs to be included as well!

 

Visit msnbc.com for breaking news, world news, and news about the economy

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FORECLOSURE FRAUD deal faces setbacks, again

FORECLOSURE FRAUD deal faces setbacks, again

Reuters-

A multi-state mortgage settlement in the works for more than a year will likely be pushed back again as dissident U.S. states continue to press specific concerns and ignore a Monday deadline to decide whether they will sign it.

States had been given two weeks to assess a proposed settlement, under which top U.S. banks would pay up to $25 billion in exchange for resolving civil government lawsuits about misconduct in servicing home loans and pursuing faulty foreclosures.

But on Monday, as a close-of-business deadline loomed, many states had not yet reached a decision.

[REUTERS]

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CONFIRMED: LPS included in the 50 State Foreclosure Fraud Settlement Deal

CONFIRMED: LPS included in the 50 State Foreclosure Fraud Settlement Deal

I knew there was something I was suppose to follow up with last week and earlier today I noted that this was unconfirmed, until I finally found it in my “things to do”!

Now exactly who is going to cover the costs for the document mill?

via: Curtis Hertel
Ingham County Register of Deeds

We have even received information in recent days that shows LPS, a document mill included in the proposed settlement, specifically requested to have this criminal investigation converted to a civil lawsuit. It seems clear that they are aware of their vulnerability to these charges, and are attempting to save their company’s stock price by avoiding responsibility.

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OUTRAGEOUS | Massachusetts, Nevada and Arizona Must Withdraw From Bank Suits to Sign On Foreclosure Fraud Settlement

OUTRAGEOUS | Massachusetts, Nevada and Arizona Must Withdraw From Bank Suits to Sign On Foreclosure Fraud Settlement

Rumor (Now Confirmed) behind the scenes points to LPS also being part of the discussions to walk.

This is outrageous!

Business Week-

States that balked at bank liability releases in a proposed $25 billion nationwide settlement over foreclosure practices must decide by today whether its mortgage relief and reforms are worth the legal claims they’ll give up.

While some states have already announced their intention to sign the deal, others including California Attorney General Kamala Harris have yet to publicly commit in part due to terms that protect the banks from future litigation. Without Harris, the deal’s value will drop by several billion dollars, according to a person familiar with the matter.

The agreement is “beyond fixing,” said George Goehl, executive director of National People’s Action, a network of community organizations which advocates for fair lending and affordable housing.

“People are very disappointed in what this is going to be both in terms of dollars and release of claims,” Goehl said in a telephone interview. “We’re giving away the store.”

[BUSINESS WEEK]

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Congressman Conyers Encourages Michigan Attorney General to Reject Flawed Nationwide Mortgage Settlement

Congressman Conyers Encourages Michigan Attorney General to Reject Flawed Nationwide Mortgage Settlement

Feb. 03, 2012

Conyers Encourages Michigan Attorney General to Reject Flawed Nationwide Mortgage Settlement

(WASHINGTON) – Today, Representative John Conyers, Jr. (D-MI) sent a letter to Michigan Attorney General Bill Schutte encouraging him to reject a proposed nationwide settlement between state attorneys general and the Nation’s five largest banks concerning possible fraudulent mortgage origination and servicing practices detrimental to homeowners across the country.  The deadline for the attorneys general to accept the terms of the settlement on behalf of the states is this Monday. 

 

February 3, 2012

 

The Honorable Bill Schutte

Office of the Attorney General 

G. Mennen Williams Building, 7th Floor

525 W. Ottawa St.

P.O. Box 30212

Lansing, MI 48909

 

Dear Attorney General Schutte:

 

I am writing to strongly encourage you to reject the proposed settlement between state attorneys general and the Nation’s five largest banks – Bank of America, JPMorgan Chase, Citibank, Wells Fargo, and Ally Financial – on the grounds that the settlement inadequately addresses the harm they caused to Michigan homeowners through illegal and fraudulent mortgage origination and servicing practices. 

 

Although the actual details of this settlement have yet to be publically disclosed, news reports suggest that the tentative agreement’s terms would only involve $25 billion in total compensation, of which only $17 billion would go towards loan modifications for homeowners.  This is a paltry sum when compared to the scope of the foreclosure crisis in our state.  Over 35 percent of all homeowners in Michigan owe more on their mortgages than their homes are worth.  The settlement would have to provide over $19 billion in relief to Michigan homeowners alone.  This settlement does not provide enough funds to cover damages for our state, let alone the entire country.

 

I also find it troubling that under the proposal, banks may receive greater credit for assisting homeowners when they modify the mortgages of borrowers who owe less than 175 percent of the value of their homes.  These incentives discourage banks from assisting borrowers who are severely underwater – the very people hit the hardest by the illegal behavior the settlement aims to rectify.  Furthermore, in exchange for this onetime payment to homeowners, the proposed settlement would likely release the five banks from liability on the origination and servicing of trillions of mortgages.  This could prevent the state from collecting hundreds of billions of dollars in possible compensation owed to homeowners devastated by the foreclosure crisis. 

 

Moreover, I find it surprising that top law enforcement officials across the country would even consider agreeing to such broad waiver of liability after being presented with clear evidence of widespread fraud.  For example, Delaware Attorney General Beau Biden has stated that a cursory examination of foreclosures in his state showed banks lacked the proper legal paperwork necessary to legally foreclose on a house in one out of four foreclosure proceedings. 

 

This proposed settlement may not do enough to stop ongoing origination and servicing fraud.  According to a Reuters article from February 1, the settlement proposes that state banking regulators take the lead in enforcing the settlement, with North Carolina’s banking commissioner playing a lead role.  But state regulators have an even worse track record than federal regulators when it comes to holding banks accountable.  According to a recent study by the National Bureau of Economic Research:

 

Federal regulators are significantly less lenient, downgrading supervisory ratings about twice as frequently as state supervisors. Under federal regulators, banks report higher nonperforming loans, more delinquent loans, higher regulatory capital ratios, and lower [return on assets].  There is a higher frequency of bank failures and problem-bank rates in states with more lenient supervision relative to the federal benchmark.

 

As long as fraud is pervasive and ongoing, we should not entrust the future well-being of Michigan’s homeowners to state bank commissioners who have historically lacked the will and capacity to police these powerful financial entities. 

 

For all of the above reasons, I believe this proposed settlement will result in nothing more than another bailout for big banks.  A settlement that fails to provide just compensation for hundreds of thousands of Michigan homeowners is not an agreement worth considering.  I ask for full and fair consideration of the concerns expressed in this letter, consistent with applicable law, rules, and regulations. 

 

Sincerely,

 Congressman John Conyers, Jr.

 MEMBER OF CONGRESS

###

Scribd

source: http://conyers.house.gov

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