SUPREME COURT OF
THE STATE OF WASHINGTON

KRISTIN BAIN

vs

METROPOLITAN MORTGAGE GROUP INC. et al

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HERALD NEWS-

The Bristol County Board of Commissioners moved on Tuesday to file a lawsuit to reclaim millions of dollars from Mortgage Electronic Registration Systems, commonly known as MERS, for allegedly skirting public recording laws at the expense of the county’s three property registries.

Commissioner John Mitchell said Bristol County is joining with Norfolk and Plymouth counties in filing lawsuits against MERS.

“MERS has hidden all the assignment of mortgages,” Mitchell said. “This (lawsuit) is to get fees back for the recording of assignments of mortgages. You don’t know how many times they did it. They did it privately. Supposedly, somewhere, this MERS has a registry of their own assignments of mortgages which show who is the true owner of a mortgage, except I guess in practice they don’t really have it. And that’s been a problem with foreclosures. When a bankruptcy court says, ‘Who owns the mortgage now?,’ they haven’t always been able to come up with it.”

Mitchell said it has been a “substantial” problem, but the county won’t be sure about how much money they are actually looking to collect until the discovery process of litigation — rough estimates put together by county registries last year indicate that the loss of revenue ranges well into the millions of dollars.

[HERALD NEWS]

Market Watch-

The investigation concerns whether the Company or its fiduciaries breached their fiduciary duties by improperly processing mortgages and mortgage foreclosures. A civil lawsuit filed in December 2011 by the Office of the Attorney General of the State of Nevada alleges that LPS and certain of its subsidiaries: (1) engaged in a pattern and practice of falsifying, forging and/or fraudulently executing foreclosure related documents, resulting in numerous foreclosures that were predicated upon deficient documentation; (2) fraudulently notarized documents without ensuring that the notary did so in the presence of the person signing the document; (3) implemented a widespread scheme to forge signatures on key documents, to ensure that volume and speed quotas were met; (4) concealed the scope and severity of the fraud by misrepresenting that the problems were limited to clerical errors; (5) improperly directed and/or controlled the work of foreclosure attorneys by imposing inappropriate and arbitrary deadlines that forced attorneys to churn through foreclosures at a rate that sacrificed accuracy for speed; (6) improperly obstructed communication between foreclosure attorneys and their clients; and (7), demanded a kickback/referral fee from foreclosure firms for each case referred to the firm by LPS and allowed this fee to be misrepresented as “attorney’s fees” on invoices passed on to Nevada consumers and/or submitted to Nevada courts.

[MARKET WATCH]

They aren’t ready…they’re still figuring out how to add the finishing touches to screw you!

HW-

The state attorneys general and federal prosecutors will likely file the actual $25 billion foreclosure settlement documents in court by the end of the month, according to a source familiar with the deal.

The top five servicers agreed to general terms in the settlement last week, which would include billions in principal reduction, refinances, and even pay outs to homeowners affected by missteps in the process.

Questions arose recently over whether the finalization of the deal would its change the scope.

Rich Andreano, who co-leads the mortgage banking group at law firm Ballard Spahr, said while it will be difficult for analysts and officials to anticipate precisely how much aid each state will get from the deal until the documents are filed, results should not vary too significantly from the announcement made last week.

“I got the sense last week that they weren’t really ready. They weren’t done. It was one of those things where they were moving so fast that they had to announce it because it was getting leaked out,” Andreano said in an interview.

[HOUSING WIRE]

This is interesting since all responsible for Foreclosure Fraud are being investigated or sued for some breach of fiduciary duty including LPS for robosigning, whom by the way executed most of the documents…

Alison Frankel-

The big question for the other banks that signed the nationwide foreclosure settlement, though, is whether Illston’s robosigning ruling improves the prospects for shareholder derivative suits against them. JPMorgan Chase, for example, was just hit with a Manhattan State Supreme Court robosigning derivative complaint filed by Robbins Geller, one of the plaintiffs’ firms in the Wells Fargo case. Earlier this month, shareholders in a consolidated derivative class action against Bank of America in Manhattan federal court voluntarily dismissed their robosigning-based case, but said they planned to refile in Delaware Chancery Court. Two derivative suits against Citigroup alleging flawed foreclosure practices were consolidated in Manhattan federal court in December, but the docket indicates no activity since then.

But those banks, according to the plaintiffs’ allegations in the Wells suit, were quicker to renounce robosigning than Wells Fargo. JPMorgan Chase and Ally Financial were the first to halt foreclosures to investigate robosigning allegations, doing so in September 2010. Bank of America followed in October. Wells Fargo was still insisting at the time that its foreclosure practices were sound. According to the shareholder complaint, Wells continued to permit robosigning of foreclosure documents well into 2011, after it told shareholders it was cooperating with the government investigation.

[REUTERS LEGAL]

Scribd

The chief regulator and conservator of Fannie Mae and Freddie Mac is adamantly opposed to principal forgiveness, a key element of the foreclosure settlement. But analyses show he’s wrong.

LA TIMES-

You can love or you can hate the recent $25-billion federal-state mortgage foreclosure settlement, but there’s no getting around one simple fact: There’s a huge, gaping hole right in the middle of it.

The hole is that if your home loan has been bought from your lender by Fannie Mae or Freddie Mac, you’re not eligible for the mortgage relief encompassed by the deal.

Since Fannie and Freddie control well more than half of all outstanding mortgages, this shortcoming looks to be what engineers would call “non-trivial.”

[LA TIMES]

What has changed in the world of mortgage assignments since the FDIC/OCC/Treasury Consent Orders?

When is a mortgage assignment actually an Affidavit posing as a mortgage assignment?

When will all Recorders of Deeds file Declaratory Judgment actions seeking to enjoin the filing of mortgage assignments by document preparers:

1. that falsely state the employer and/or address of the preparer or signer (or that only use the MERS title when the signer is not directly employed by MERS);

2. that fail to plainly set forth the date the mortgage was assigned to the assignee; or

3. that contain language about the holder of the note, such language being extraneous to an Assignment of Mortgage.

Why are such Declaratory Judgment actions needed?

This is the new language appearing on many mortgage assignments where Deutsche Bank National Trust Company is the Trustee the Trust is the Assignee and MERS is the Assignor:

This loan was held by the Assignee prior to the Assignee filing a foreclosure action on May 21, 2008. The date of the execution of this Assignment of Mortgage by the Assignor is not reflective of the date the loan was transferred to the Assignee. The execution of this document is a ministerial act to comply with the state law as to how the transfer is to be documented and is not reflective of the transfer date itself.

(Instrument #2011383648, Official Records, Hillsborough County, Florida.)

This is signed by Srbui Muradyan who is identified as Assistant Secretary, Mortgage Electronic Registration Systems, Inc., as Nominee for WMC Mortgage Corp. This document was notarized in Ventura County, CA, on October 25, 2011.

According to a statement in the upper left-hand corner of the document, the preparer was Tanya D. Simpson, Esq., of the law firm Smith, Hiatt & Diaz, P.A., a foreclosure mill in Ft. Lauderdale, Florida.

The receiving trust is Soundview Home Loan Trust 2007-WMC1.

When was the mortgage assigned to the trust? That essential question is not addressed by the Mortgage Assignment.

The signer and preparer purport to know that the loan (note: not the mortgage – the loan – that is, the promissory note) was held by Deutsche Bank as Trustee prior to May 21, 2008.

How is a Bank of America employee competent to state when Deutsche Bank National Trust Company acquired a loan?

In reality, Srbui Muradyan works for Bank of America in California. On many other mortgage assignments, Muradyan’s name appears as the preparer and the address for Muradyan is 450 E. Boundry Street, Chapin, SC – the address of Corelogic, one of the newest and largest document preparers in the country. (See Assignment of Mortgage, Book 2011, Page 13758, Pottawattamie County, Iowa – available through a Google search.)

Muradyan’s signature is always notarized in Ventura County, CA.

These new Assignments fail to plainly set forth the date that the mortgage was assigned; the individuals signing use a MERS title, never revealing their actual employers; the address of the signers is either not provided or wrongly stated, making it that much more difficult for a homeowner in foreclosure to take a simple deposition.

The OCC Review Process is not working; banks and trusts continue to use the MERS guise to seize properties without proof of ownership. The language has become even more convoluted. Tens of thousands of MERS Mortgage Assignments continue to be filed each month throughout the country.

Attorneys General Beau Biden of Delaware, Martha Coakley of Massachusetts and Eric Schneiderman of New York have all sued MERS and a declaratory judgment and injunctive relief may be part of their overall strategy. Their actions, however, will only help the citizens of Delaware, Massachusetts and New York.

While the many Linda Greens may have retired their pens in Alpharetta, there are hundreds more taking their places, still using MERS titles, still pretending to be bank officers when they are untrained clerks working for document mills.

Another solution is legislative: the Truth in Mortgage Documents Act previously discussed in Fraud Digest.

The simplest solution is for judges everywhere to reject these misleading documents and sanction the filers.

The end of MERS is long overdue.

As Neil Barofsky asked Nick Timiraos “So perhaps that’s why the settlement was announced before even a term sheet was hammered out? To cover up FHA budget hole“?

WSJ-

The Federal Housing Administration will exhaust its reserves over the coming year, according to budget projections released Monday, which would require a Treasury infusion for the first time in its 78-year history.

But Obama administration officials said more recent developments, including fines that will go to the FHA from last week’s $25 billion mortgage settlement with five major banks, could cover any shortfall and obviate the need for taxpayer funding.

The FHA has burned through its reserves over the past three years as defaults mount on loans it guaranteed as housing markets deteriorated. FHA-backed mortgages are an attractive option for borrowers because they can make down payments as low as 3.5%. But as home prices continue to fall, many of those borrowers have fallen underwater, where they owe more than their homes are worth and are at greater risk of default if they experience income shocks.

[WALL STREET JOURNAL]

WSJ-

Servicing standards: The 42-page servicing standards “term sheet” lists various requirements for banks’ documents used in foreclosure and bankruptcy proceedings; documentation of borrowers’ account balances; and ensuring integrity of the chain of title. It also includes requirements around how borrowers must be treated when they’re being evaluated for a modification or short sale, as well standards around the appropriateness of servicing fees and the use of force-placed insurance.

Borrower relief: A separate 12-page document outlines how banks have to satisfy the $20 billion portion of the deal that requires them to help homeowners. At least half of that portion must go towards writing down loan balances for homeowners that are at risk of foreclosure. Another $3 billion must be used to help homeowners who owe more than their homes are worth but are current on their loans to refinance. The remaining $7 billion can go towards anti-blight provisions, forbearance for unemployed homeowners, and short sale assistance.

Menu of “credits”: Complex formulas spell out exactly how much credit banks will receive for that aid. For example, every $1 of principal write-downs earns $1 of credit on loans that they own. However, they receive less credit for writing down second-lien mortgages that are severely delinquent.

[WSJ]

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