A metro Detroit homeowner received a temporary victory in court April 16 against a possible illegal eviction.
Attorney Vanessa Fluker argued in Wayne County Circuit Court that Deutsche Bank is using forged documents to claim ownership of her client’s home. Fluker’s client, who asked that her name not be released to the press, is facing eviction despite seeking loan modifications and attempting to buy her home after a sheriff’s sale.
Deutshe Bank is one of several large financial institutions foreclosing on homeowners without knowing who legally possesses the title, Fluker argued before Judge John MacDonald. Fluker was in court to defend her client from Deutsche Bank.
Fluker says her client is a victim of an epidemic of robo-signings — the practice of banks signing thousands of documents and affidavits without verifying the information.
Sheila Bair, former head of the FDIC is just about the only one in Washington who gets the irony of the continuing foreclosure crisis. A couple of weeks ago she published a tongue-in-cheek call for the Fed to provide a $10 million interest-free loan to every American household:
Every underwater household could pay off the crappy and fraudulent mortgages that the bankster thieves are using as a pretext for illegally foreclosing on homes. They’d still have plenty of money left over to buy US Treasuries to generate some interest income. And they could pay off credit card debt and the ballooning student loan debt while they’re at it.
Why, households could put their finances into better shape than the banksters have managed to do with the $29 TRILLION that the Fed provided to them! And while the help the Fed provided to the banksters has done absolutely no good whatsoever, loans to households would put the US on the path to recovery.
In the last decade, the United States experienced the biggest housing bubble in the history of the world. When the bubble burst, Americans lost $7 trillion in household wealth, millions of jobs disappeared and the nation was plunged into the deepest and longest recession in 70 years.
There have recently been some mischaracterizations of the mortgage-backed securities working group created in January by President Obama to investigate the roots of this crisis — a working group I am proud to co-chair.
Here are the facts.
My office — along with the Justice Department, the SEC, the Consumer Financial Protection Bureau, the IRS and our other partners — is working aggressively to provide accountability for any misconduct that contributed to the bubble and crash in the housing market. More than 50 attorneys, investigators and analysts have already been deployed to support our investigations, with many more on the way. The President has requested a congressional appropriation of an additional $55 million to ensure that we have the resources to do a thorough job.
However, this is a law enforcement exercise, not a public policy decision, and must proceed in a rigorous and deliberate fashion. Like any ongoing investigation, the details about the scope of our inquiry are confidential. But I remain committed to following the facts wherever they may lead.
FSB Principles for Sound Residential Mortgage Underwriting Practices
Definitions Definitions often differ across jurisdictions. For the purposes of these Principles, the following definitions are used:
Appraisal: A comprehensive assessment of the property characteristics, which will include determining an opinion of the collateral’s value. In some countries the same process is known as a “valuation” or the terms are used interchangeably.
Balloon payment: The remaining amount of principal that becomes due and payable on the final instalment payment for a loan that is not fully amortised.
Collateral: The property or property rights upon which the residential mortgage loan is secured.
Collateral management: For purposes of these Principles, collateral management concerns all tasks and processes within the mortgage underwriting process where collateral is involved, e.g. appraisal of collateral, the constitution of collateral, review of its legal existence and enforceability and entry of collateral-related data in the lender’s information technology systems.
Debt-to-income (DTI): Annual or monthly total debt servicing requirements, including principal, interest, taxes and insurance, as a percentage of annual or monthly income that is available to repay the debt.
Down payment: Up-front payment from the buyer for a portion of the purchase price, which reduces the balance of the loan against the property.
Equity: Difference between the appraised value of the property and the total claims held against the property.
Loan-to-income (LTI): Annual or monthly mortgage loan servicing requirements as a percentage of annual or monthly income that is available to repay the loan.
Loan-to-value (LTV): The ratio of the amount of the loan outstanding to the appraised value of the residential property.
Mortgage loan: A loan that is collateralised against a residential property, including purchase, home equity loans, home equity lines of credit (HELOCs) and refinancings.
Mortgage insurance: A type of insurance where the lender receives compensation against loss from default on the part of a borrower on a mortgage loan (also known as mortgage default insurance or mortgage guaranty insurance).
Variable rate mortgage: A loan in which the interest rate rises and falls possibly based on the movement on an underlying index. The term variable rate mortgage is used interchangeably with adjustable rate mortgage.
I. Introduction
In March 2011 the Financial Stability Board (FSB) published a thematic review of residential mortgage underwriting and origination practices.1 Based on the findings of the review, six recommendations were set out, one of which asked the FSB to develop an international principles-based framework for sound underwriting practices. After providing sufficient time for implementation, the FSB will conduct a follow-up review to assess progress made in implementing the framework. Given that the underlying risks can differ across jurisdictions, the Principles are high-level rather than aimed at detailed international standards. As the global crisis demonstrated, the consequences of weak residential mortgage underwriting practices in one country can be transferred globally through securitisation of mortgages underwritten to weak standards. As such, it is important to have sound underwriting practices at the point at which a mortgage loan is originally made. In response to the crisis, a number of FSB members have encouraged stricter underwriting practices so as to limit the risks that mortgage markets pose to financial stability and to better safeguard borrowers and investors. Internationally agreed Principles will help to strengthen residential mortgage underwriting practices and enable supervisors to more effectively monitor and detect the erosion of underwriting practices particularly when the housing market is booming.
The FSB Principles are intended to apply to loans to individuals (consumers) that are (i) secured either by residential mortgage or by another comparable security commonly used in some jurisdictions on immovable residential property; (ii) secured by a right related to immovable residential property; and (iii) loans for which the purpose is to acquire or retain rights in immovable residential property. However, some or all of the Principles may not necessarily be appropriate or applicable for certain niche forms of finance.2 Jurisdictions should nonetheless seek to apply all Principles that are relevant. In all instances, a robust and effective assessment of individual affordability must underpin any sustainable lending model. It is important to note that the Principles focus on the credit granting decision rather than wider issues of credit risk management.
Jurisdictions should ensure that entities that originate a mortgage, or own the resulting risk, adhere to these FSB Principles, including any entities involved in outsourcing of mortgage underwriting. The Principles span the following areas, some of which proved to be particularly weak during the global financial crisis that started in 2007: (i) effective verification of income and other financial information; (ii) reasonable debt service coverage; (iii) appropriate loan-to-value ratios; (iv) effective collateral management; and (v) prudent use of mortgage insurance. The report also sets out an implementation framework to promote minimum residential mortgage underwriting standards, and describes tools that could be used to monitor and supervise these standards.
In general, the range of residential mortgage underwriting practices reflects the distinct real estate markets, cultural differences and socioeconomic policies that shape each jurisdiction’s mortgage market. Hence, these Principles should be implemented according to national circumstances, and as appropriate to national institutional arrangements, whether through legislative, regulatory or supervisory measures, or through industry practices.
II. Principles
The FSB Principles for Sound Residential Mortgage Underwriting Practices aim to provide a framework for jurisdictions to set minimum acceptable underwriting standards. Jurisdictions should ensure that lenders adopt sound mortgage underwriting standards against which supervisors can monitor and supervise. Lenders may choose to outsource aspects of the activities covered by these Principles, for example to credit intermediaries, credit bureaus and appraisers, but jurisdictions should ensure that lenders retain responsibility for all such tasks. The examples presented in italics provided throughout the Principles should be interpreted as such, and jurisdictions should implement the Principles accordingly.
The Principles will assist FSB members in their efforts to improve financial stability and prudential standards. They also refer to consumer protection issues that contribute to these objectives, but the Principles are not intended to be a statement of consumer protection standards. Jurisdictions will want to adopt the consumer protection standards that are appropriate to them.
INTRODUCTION The Court retained this case so that it could give needed guidance to trial courts and other litigants by its answer to a certified question arising from a mortgage foreclosure action. As the Court wrote: The question certified . . . transcends the individual parties to this action because it has the potential to impact the mortgage foreclosure crisis throughout this state and is one on which Florida’s trial courts and litigants need guidance. The legal issue also has implications beyond mortgage foreclosure actions. Pino v. Bank of New York, 36 Fla. L. Weekly S711 (Fla. Dec. 8, 2011). Florida Land Title Association (“FLTA”) and American Land Title Association (“ALTA”) file this brief to address the need for this Court to give guidance to trial courts and litigants on the importance of protecting the rights of third parties that have justifiably relied on the finality of a prior court action when buying, extending financing on, or insuring title to real property.
SUMMARY OF ARGUMENT The Court can expressly limit its decision in this case to the setting aside of a voluntary dismissal in a case where no third party interest in real estate is implicated. Should it choose to do so, FLTA and ALTA have no issues to address. However, if the Court decides to write more broadly, we respectfully ask the Court to emphasize the need to protect the rights of affected third parties when collateral attacks are brought against otherwise final court judgments, orders, decrees or proceedings. The residential mortgage foreclosure crisis has caused a host of problems for homeowners, lenders, and Florida’s court system. The Court addressed many of these problems by forming the Task Force on Residential Mortgage Foreclosures in 2009 and by adopting its recommended amendments to the Florida Rules of Civil Procedure in 2010. However, unlike some other states, the Court has not adequately addressed the protection of third party interests when otherwise final court proceedings are collaterally attacked, especially the interest of those who have purchased foreclosed real estate.
Respectfully, if the Court is to give guidance to trial courts and litigants regarding collateral attacks against foreclosure actions (whether relief is sought under rule 1.540(b) or the use of inherent judicial powers) beyond the narrow facts of this case, it should give guidance on protecting the interests of third parties that purchase, finance and insure title to foreclosed properties. Recognition and protection of these neglected interests is vital to the integrity of our judicial system and to the ultimate resolution of the mortgage foreclosure crisis.
Please do not mistaken Rep. Miller with the Bank-owned Iowa Tom Miller. Rep. Miller would have thrown Wall Street in jail.
The Nation-
A central focus for progressives that want to see the Residential Mortgage Backed Securities working group get tough on the financial industry has been the role of executive director. Currently, the group has five co-chairs from four different federal and state agencies, and the staffers are spread through ten different US Attorney offices and several more state attorney general offices—that is, there are a lot of chefs in the kitchen.
A strong executive director could focus the work of the task force and help smooth over any potential disagreements between the varying departments and chairmen. Several progressive activists pushed early on for Representative Brad Miller, a Democrat from North Carolina, to get the job. He has a strong record of getting tough on Wall Street from his seat on the House Financial Services Committee, and is also a Columbia Law School graduate with twenty years of private litigation experience before coming to Congress.
But David Dayen reported earlier this month that Miller would not get the job. In a phone interview last night, Miller told me about his experience with the working group and the reasons he believed he was not selected—reasons that will likely give advocates for getting tough on Wall Street some serious heartburn.
Miller said he received a phone call from the office of New York Attorney General Eric Schneiderman only two days after this year’s State of the Union address, in which President Obama announced the formation of the working group and named Schneiderman a co-chair. “It was out of the blue for me. I was not expecting a call like that,” Miller said.
The Nueces County Commissioners Court approved a contract with two law firms to file a lawsuit over hundreds of thousands of dollars in unpaid filing fees.
Attorneys fees to the law firms — San Antonio-based Watts Guerra Craft and Corpus Christi-based Hilliard Muñoz Gonzales — won’t be paid unless the county is able to recover the fees. However, the county will be required to reimburse the firms if they are awarded less than 19 percent of the fees.
In December, County Attorney Laura Jimenez estimated the uncollected fees related to the processing of documents at between $400,000 and $800,000. She said Wednesday the county hasn’t finished going through related paperwork and the estimate could be low.
Dallas County filed a lawsuit in September accusing Mortgage Electronic Registration Systems of falsely listing itself as the beneficiary or lender in transactions.
Thomas Gricks of Schnader Harrison Segal & Lewis is a trained engineer with an abiding faith in technology. He’s also a former in-house lawyer for Westinghouse who understands that clients don’t like to spend more than they have to on discovery. So it’s probably not a surprise that for more than a year, Gricks, who heads the firm’s e-discovery practice, has been waiting for an opportunity to ask a judge to approve the use of predictive coding — the artificial intelligence technique that supposedly searches for responsive documents with far more speed and precision than ordinary keyword searches.
Gricks got his chance this month, in a Virginia state-court consolidated case called Dulles Jet Center Litigation. Schnader Harrison and Baxter, Baker, Sidle, Conn & Jones represent Landow Aviation, which is the defendant in 10 suits claiming damages from the collapse of three hangars at Dulles airport in a snowstorm in February 2010. According to an April 9 brief Landow submitted to Loudon County Circuit Judge James Chamblin, the case involves about 200 gigabytes of electronically stored information, or about 2 million documents. For a team of lawyers to review all those pages, it would be time-consuming, expensive, and not especially effective, Landow argued. Computer-assisted keyword searches cost less, the brief said, but are no more effective. Instead, according to the brief, “the most effective and economical means of reviewing large ESI collection is a technology known as predictive coding.”
In researching a major case for a client and friend in South Carolina, I was forwarded this great pleading from a great law firm in the South that is as instructional as it is informational about Citi and other lenders and the accounting and transfer schemes they promulgated.
Remember what I have always said! “Its the accounting dummy!!!”
Nye
In RE: CITIGROUP INC. SECURITIES LITIGATION
Excerpt:
Plaintiffs, by and through their undersigned counsel, on behalf of themselves and a class of investors (the “class”) who acquired Citigroup Inc. (“Citigroup”) common stock during the period beginning January 1, 2004 through and including January 15, 2009 (the “class period”), allege the following for their class action complaint (the “complaint”) for violations of the Securities Exchange Act of 1934 (“Exchange Act”). These allegations are based on personal knowledge as to plaintiffs’ own acts, and are based upon information and belief as to all other matters alleged herein.
Plaintiffs’ information and belief is based upon, inter alia, the investigation by counsel into the facts and circumstances alleged herein including without limitation review and analysis of: (1) press releases, public statements, news articles and other publications disseminated by or concerning Citigroup and the other defendants named herein; (2) Citigroup’s analyst conference calls and conference presentations, and corresponding transcripts thereof; (3) the filings that Citigroup and related parties made with the Securities and Exchange Commission (the “SEC”), the London Stock Exchange (“LSE”), and the Irish Financial Services Regulatory Authority; (4) securities analysts’ reports concerning Citigroup and its operations; (5) analyses, presentations, reports and other published materials, concerning Collateralized Debt Obligations (“CDOs”), Residential Mortgage-Backed Securities (“RMBS”), Structured Investment Vehicles (“SIVs”), and the U.S. mortgage markets authored, inter alia, by investment banks, credit rating agencies, expert market practitioners, academic experts, and various governmental/regulatory organizations; (6) Congressional testimony concerning CDOs, RMBS, SIVs and the U.S. mortgage markets; and (7) interviews with dozens of former employees of Citigroup and its operating subsidiaries. Many additional facts supporting the allegations herein are known only to the defendants and/or are within their exclusive custody and control. Plaintiffs believe that additional evidentiary support for the allegations herein will emerge after a reasonable opportunity to conduct discovery.
INTRODUCTION 1. This complaint concerns Citigroup’s practices with respect to mortgages and mortgage-related securities, including principally a class of securities known as Collateralized Debt Obligations, or “CDOs”. The complaint also concerns Citigroup’s practices with respect to auction rate securities, leveraged loans, and special investment vehicles (“SIVs”). This action does not complain of lack of foresight. It does not depend at all on Citigroup’s poor investment decisions. The complaint arises because Citigroup responded to the widely-known financial crisis by concealing both the extent of its ownership of toxic assets – most prominently, CDOs backed by nonprime mortgages – and the risks associated with them. Defendants omitted to disclose the existence or acknowledge the market value of or risks associated with tens of billions of dollars of financial instruments. In addition to the conventional failures of disclosure, Citigroup concealed the true facts by the use of shamelessly fraudulent schemes that had the effect of creating the false impressions that sales had been made when they had not been, and that risks had been eliminated, spread or hedged when they had not been.
2. During the class period, Citigroup’s public statements and financial statements created an impression of a state of financial affairs that differed materially from what actually existed. During the class period, Citigroup issued a stream of false positives – revenue growth, earnings growth, improved returns on capital and returns on risk, and strong capitalization ratios speaking to the company’s fundamental financial condition. Citigroup knew, concealed or distorted these representations by concealing or distorting its possession of these securities, their associated values, and risks. How did defendants accomplish this?
CAUSATION AND CIVIL RICO STANDING: WHEN IS A PLAINTIFF INJURED “BY REASON OF” A RICO VIOLATION?
LAURA GINGER*
* Associate Professor of Business Law, Indiana University School of Business. B.A. 1976; DePauw University, J.D. 1979, The University of Chicago Law School.
INTRODUCTION
Among the remedies included by Congress in the Racketeer Influenced and Corrupt Organizations Act (“RICO”),’ is a private right of action for treble damages available to “[a]ny person injured in his business or property by reason of a violation of section 1962 “2 of the Act. Thus, to have standing to sue under civil RICO, a private plaintiff must prove injury to business or property “by reason of” a RICO violation. This requirement poses a question of causation: what nexus between the plaintiff’s injury and the defendant’s RICO violation must exist before one can say that the injury occurred “by reason of” the violation? 3
The meaning of the phrase “by reason of” in this context, has proved problematic. The statute provides no guidance as to its proper interpretation, and the courts have been unable to fashion a uniform or comprehensible definition. The United States Supreme Court’s decision in Sedima, S.P.R.L. v. Imrex Co.,4 which dealt in part with civil RICO standing requirements, did not clearly identify the subsections of section 1962 to which its holding applied; it therefore left unanswered many important questions regarding standing.5 Moreover, the Court’s recent denial of certiorari in a case presenting that precise issue avoided an opportunity to clarify the Sedima decision.’
Left to their own devices, the lower federal courts have differed as to the type of causal nexus between a plaintiff’s injury and a defendant’s racketeering activities which is required for civil RICO standing. Some courts have fashioned causation rules which apply generally to private civil RICO actions,7 while others have developed rules which apply only to certain classes of plaintiffs8 or to particular subsections of section 1962.9 As a result, the current state of the law in this area remains in an extreme state of chaos.
These conflicting lower court decisions have, in effect, restricted the class of private plaintiffs entitled to recover under RICO. This restriction neither comports with the language in Sedima’° nor satisfies those who would prefer to see civil RICO’s current strength and availability preserved. However, other courts and commentators applaud the limitation of private civil RICO suits.’: As a result, each of the conflicting approaches, if formally implemented, would have a significant, if differing, impact on the Act’s standing requirements. Although few RICO reformers directly consider the requisite type of causation, various proposals have been made elsewhere to amend the Act’s standing requirements. 2
This Article will explore the issue of causation and civil RICO standing from several perspectives. In examining the various judicial interpretations of the statutory language, this Article will give particular attention to the Supreme Court’s discussion in the Sedima case, as well as to the varying rules developed by the lower courts. Moreover, this Article will provide an analysis of current reform proposals and advocate that the RICO statute be amended to implement a definite and clear standing rule.
MERS and several banks who were sued by New York’s attorney general for allegedly initiating faulty foreclosure actions have struck back in the high-profile litigation by strongly defending their practices and discounting the office’s assertions as factually and legally deficient.
In February, Attorney General Eric Schneiderman sued MERS—Mortgage Electronic Registration Systems—and several major banks and mortgage servicers, including JPMorgan Chase, Bank of America and Wells Fargo. The action contended the defendants’ use of the MERS system resulted “in the filing of improper New York foreclosure proceedings, undermined the integrity of the judicial process, created confusion and uncertainty concerning property ownership interests, and potentially created clouds of title on properties” across the state (NYLJ, Feb. 6).
You can understand why they needed MERS to function then and now…
Money, Power and Wall Street continues next Tuesday, with an inside look at how the Obama administration, including a divided economic team, has handled the crisis and how the financial world has returned to many of the practices that created the meltdown in the first place.
Homeowners aren’t the only ones who undergo challenges and struggles as a result of foreclosure. Their children are also likely to suffer due to the loss of the family home. Of the 2.3 million children who have lost their homes to foreclosure, one out of every 10 have been negatively affected, according to a report released by Julia B. Isaacs, Brookings Institution.
The report also includes statistics citing an additional 3 million children of families who are at risk of foreclosure, as well as 3 million who are relocated due to rental evictions. While foreclosure and relocation can impact children in many different ways, Isaacs specifically addresses the top four:
Keep in mind, this is LPS and NOT DocX’s doing. So they cannot try to push the blame on a now defunct sister corp. they once had. Also, who is creating a legal document such as a Quit Claim Deed? Lying to the court with false documents?
Lender Processing Services (LPS) Internal Email Accidentally Leaked in a Fraudclosure Case
4closureFraud.org has received a very interesting court-certified document to share with our readers. An affidavit from Bank of America representative, Kimberly Sue Daley, refers to attached business records. The documents attached to the affidavit included a printout of email exchanges with the LPS Desktop logo.
The conversation evolves like this:
“Yikes! The name of the foreclosing party (HSBC as Trustee for Deutsche Bank Alt-A 2007-BAR1) matches the name on the affidavit of amount owed BUT that name doesn’t match what is in our system. It’s pretty far into the legal foreclosure process. What should we do now?”
“Hey, no problemo! We have two options; 1) change the name now and possibly be hit with higher homeowner association fees or 2) quit claim deed the home over to the right name after the sale, but that will cost documentary stamp taxes. The doc stamp taxes will probably be less costly than the HOA fees. Please advise.”
“Go with the quit claim deed (QCD). After the foreclosure sale to the trust, just deed the home over to Bank of America! Problem solved.”
Text and PDF copies of the documents below courtesy of 4ClosureFraud.org
No. 10-1442 ____________________________ IN THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT ____________________________ JEAN C. ROSENFIELD, Plaintiff-Appellant, v. HSBC BANK, USA, ET AL., Defendants-Appellees.
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO The Honorable Marcia S. Krieger ____________________________ BRIEF OF THE CONSUMER FINANCIAL PROTECTION BUREAU AS AMICUS CURIAE IN SUPPORT OF PLAINTIFF-APPELLANT AND REVERSAL ____________________________ Leonard J. Kennedy General Counsel To-Quyen Truong Deputy General Counsel David M. Gossett Assistant General Counsel Rachel Rodman Senior Counsel Peter G. Wilson Kristin Bateman Attorneys Counsel for Amicus Curiae
CONSUMER FINANCIAL PROTECTION BUREAU 1700 G Street, NW Washington, D.C. 20552 (202) 435-7237 March 26, 2012
EXCERPT:
QUESTION PRESENTED
Section 125 of the Truth in Lending Act (TILA or Act), 15 U.S.C. § 1601 et seq., provides consumers a statutory right to rescind certain types of mortgage loans. This rescission right expires three days after consummation of the loan, unless a lender fails to provide the consumer with disclosures mandated by the Act. 15 U.S.C. § 1635(a).
In that case, the right to rescind is extended until the lender provides the disclosures. Id. If the disclosures are never provided, the right to rescind expires three years after consummation of the loan or upon sale of the home, whichever occurs first. Id. § 1635(f). The consumer exercises the right to rescind “by notifying the creditor, in accordance with regulations of the [Consumer Financial Protection] Bureau, of his in-tention to do so.” Id. § 1635(a).
This appeal presents a question concerning the timeliness of lawsuits arising out of a consumer’s exercise of the right to rescind under the Act: When a consumer timely exercises an allegedly valid right of rescission by providing notice to the lender within three years, but the lender does not recognize the rescission, must the consumer also file a lawsuit against the lender within three years?
In a recent series of college lectures, Ben Bernanke sounded a positive note, extolling the Fed’s low-interest-rate policy and predicting sustainable economic growth. I want to believe him, but his words echo the confidence exuded by the Fed in late 2006 when it missed the housing bubble. Is it missing the bond bubble now?
CNN FORTUNE-
In a recent series of college lectures, Ben Bernanke sounded a positive note, extolling the Fed’s low-interest-rate policy and predicting sustainable economic growth. I want to believe him, but his words echo the confidence exuded by the Fed in late 2006 when it missed the housing bubble. Is it missing the bond bubble now?
In February 2011, one month after he’d been sworn in as New York state’s attorney general, Eric Schneiderman sat down with the staff attorney who’d been delegated to track the negotiations that the 50 state attorneys general and the Obama administration were conducting with five of the country’s biggest banks. A few months earlier, the story had broken that the banks had been “robo-signing” thousands of notices foreclosing on homes. Instead of assessing how far behind in their payments the homeowners had fallen or seeking to modify the terms of their mortgages, the banks had employed junior staffers, some hired right off the street, to sign hundreds of foreclosure documents daily, though the banks’ title to many of the properties was uncertain. Even when the banks’ claims to ownership were clear, robo-signing violated numerous state laws requiring due diligence before a bank can foreclose on a home.
The scandal had prompted a number of banks—Bank of America most prominently—to suspend their foreclosures for a while. The Justice Department, the Department of Housing and Urban Development, and the state attorneys general had initiated talks with Bank of America, as well as JPMorgan Chase, Citibank, Wells Fargo, and Ally Financial to arrive at a settlement for these abuses. As the only state law-enforcement official with direct jurisdiction over Wall Street, Schneiderman had been named to the committee the attorneys general had established to negotiate with the banks. He asked his aide how the talks were going.
“I was told it was being handled,” he says. The administration, his aide informed him, had proposed that the banks come up with $20 billion for aggrieved homeowners and former homeowners. Schneiderman wasn’t satisfied. What documents, he asked, had been subpoenaed? None, he was told. Who’d been called in to testify? Nobody, he was told. Most important, what did the banks want in return for paying the penalty? The aide responded that the issue had never been raised. Schneiderman was shocked.
“This didn’t make any sense,” he says. “You can’t negotiate anything like this without knowing what you’re giving up. We get $20 for what? A tie clip? A car?”
Schneiderman had been a successful Wall Street attorney before he turned to public-interest law and then served 12 years as the de facto leader of liberal Democrats in the New York Senate. He’d represented banks and exchanges in complex fraud litigation. He knew that the banks wouldn’t enter negotiations without expecting, at the very least, immunity from any lawsuits emanating from the robo-signing.
TO DEFAULT, OR NOT TO DEFAULT William Banzai Shakespeare
To default, or not to default: that is the question: Whether ’tis nobler at this time to suffer The slings and arrows of outrageous financial misfortune, Or to take arms against a sea of debts, And by opposing end them? To die: to sleep; No more; and by a sleep to say we end The heart-ache and the thousand market cuts, That insolvent flesh is heir to, ’tis a debenture recomposition Devoutly to be wish’d. To die, to sleep; To sleep: perchance to dream: ay, there’s the nub; For in that sleep of fiscal death what disastrous dreams may come When we have lanced off the bankrupt boil, Must give us pause: there’s the disrespect That makes calamity of yields to maturity, For who would bear the whips and scorns of fiat debasement, The creditor’s wrong, the borrowing idiot’s contumely, The pangs of despised austerity, the law of gravity’s delay, The insolence of office and the spurns That impatient murmurs of money changing snakes, When he himself might his quietus make With a debt addicts bodkin? who would loan fardels bear, To grunt and sweat under a weary life of indentured servitude, But that the dread of something after redemption prior to maturity, The undiscover’d wasteland from whose bourn No politician returns, puzzles the will And makes them rather bear those monetary ills we have Than fly to others that they know not of? Thus ignorance does make cowards of them all; And thus the native hue of fiscal resolution Is sicklied o’er with the pale cast of votes bought, And swindling enterprises of great Ponzinomic moment With this regard their ratings turn awry, And lose the name of action. – Vote you now! The debt ceiling hysteria! Banksta pimps, in thy orfices Be all our financial sins remember’d.
As Josh Rosner put it. “Talk about f’ing nerve as we pay his legal bills. He is disgusting and should crawl back into his spider hole.”
WSJ-
The former chief executive of Fannie Mae, in a rare public appearance Friday, argued that government policies weren’t the main cause of the housing bust, and that the government shouldn’t stop pushing to expand home ownership.
Speaking on a panel at a conference in Washington held by the National Community Reinvestment Coalition, a consumer group, former Fannie CEO Franklin Raines argued that an influx of investors into the housing market — rather than government policy — was the main cause of the market’s collapse.
“This has nothing to do with the average American family wanting to own a home,” Mr. Raines said. “This was rank speculation that was being financed out of Wall Street with no questions asked. That is what caused this crisis. Blaming people — ordinary people — who tried to own a home for this crisis is simply wrong.”
Let’s get something straight: we did not have a housing “bubble”, in the usual sense of the word. The mainstream narrative of crazed, greedy, irresponsible homeowner-wannabes driving prices unsustainably high, causing the still ongoing crash is wrong. Yes, we had a housing “bubble” in one sense; prices soared way beyond reality because excess demand fueled irrational bidding wars. The lie deals with why we had a housing bubble. The lie matters because like all problem-defining narratives, it shapes the policy solutions offered. So let’s take a look at the lie.
Consumer Driven Bubbles
The classic example of a demand-driven bubble is …
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT
ELENA GONZALEZ, Appellant,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY AS INDENTURE TRUSTEE FOR AMERICAN HOME MORTGAGE INVESTMENT TRUST 2006-1, MORTGAGE-BACKED NOTES, SERIES 2006-1; MANUEL GONZALEZ; CITY OF CAPE CORAL, FLORIDA; BOARD OF COUNTY COMMISSIONERS OF LEE COUNTY, FLORIDA; UNKNOWN TENANT # 1; UNKNOWN TENANT # 2; UNKNOWN TENANT # 3; UNKNOWN TENANT # 4, Appellees.
Opinion filed April 20, 2012.
Appeal from the Circuit Court for Lee County; Hugh E. Starnes, Judge. Michael C. Tice, Fort Myers, for Appellant. Mariya Weekes of Robertson, Anschutz & Schneid, P.L., Boca Raton (Debra Rescigno and Kevin Garbowit substituted as counsels of record), for Appellee Deutsche Bank National Trust Company. No appearance for remaining Appellees. DAVIS, Judge.
Elena Gonzalez challenges the trial court’s final order denying her motion for relief from judgment in which she challenged the final summary judgment of mortgage foreclosure that the court had entered against her and in favor of Deutsche Bank National Trust Company.1 Because a genuine issue of material fact remains with regard to when Deutsche Bank took possession of the note, we reverse and remand for further proceedings.
On January 16, 2009, Deutsche Bank filed a two-count complaint against Gonzalez seeking to foreclose her mortgage and to reestablish the note. In its complaint, Deutsche Bank specifically alleged that “[t]he subject promissory note has been lost or destroyed and is not in the custody or control of the Plaintiff who is the owner and holder of the subject Note and mortgage and its whereabouts cannot be determined.”
However, on March 27, 2009, Deutsche Bank filed a Notice of Filing Original Note and Original Mortgage, attaching those documents and voluntarily dismissing count two of its complaint to reestablish the note. The last page of the attached note is a signature page signed by Gonzalez as the borrower. No other signatures appear on the page, but it is stamped “pay to the order of ___________ without recourse by: American Home Mortgage Acceptance, Inc. Rosa Montella Asst. Secretary.” “Deutsche Bank National Trust Company CS Indenture Trustee” is handwritten in the blank, and it appears that Rosa Montella has initialed the notation. Neither is dated, however.
On August 4, 2009, Deutsche Bank filed a notice of filing the assignment of mortgage by which Mortgage Electronic Registration Systems, Inc., assigned the instant mortgage to Deutsche Bank effective December 27, 2009—nearly a year after the foreclosure complaint was filed.
Gonzalez then filed her answer and affirmative defenses, alleging among other things that “the complaint fails to adequately show the chain of the title demonstrating that Plaintiff is in fact the real party in interest with standing to bring this action.”
Deutsche Bank ultimately moved for final summary judgment of foreclosure, and in opposition, Gonzalez argued that summary judgment is improper because the pleadings raise a question of material fact as to whether Deutsche Bank was the real party in interest at the time of the filing of the foreclosure action.
Following a hearing,2 the trial court entered its final judgment of mortgage foreclosure. Gonzalez then filed a motion entitled “Motion from Relief From Final Judgment,” in which she cited Florida Rules of Civil Procedure 1.540 and 1.530. With respect to rule 1.530, Gonzalez argued that she was entitled to rehearing because
the exhibits attached to Plaintiff’s complaint and filed in support of its motion for summary judgment are inconsistent with Plaintiff’s allegations as to ownership of the subject promissory note and mortgage, Plaintiff has failed to establish itself as the real party in interest and has failed to state a cause of action. When exhibits are inconsistent with the plaintiff’s allegations of material fact as to whom the real party in interest is, such allegations cancel each other out. The trial court denied Gonzalez’s motion.
On appeal, Gonzalez argues that the trial court erred because the December 27, 2009, mortgage assignment that Deutsche Bank relied on to establish its standing to maintain the foreclosure action was insufficient in that it did not take effect until well after the foreclosure action was initiated. She also argues that a genuine issue of material fact remains as to when the special endorsement assigning the note to Deutsche Bank was signed.
Deutsche Bank responds that the mortgage assignment is irrelevant and that when it filed the original promissory note on March 27, 2009, it perfected its status as the real party in interest because the last page of the note included an assignment of the note from American Home Mortgage Acceptance to Deutsche Bank.
We start with the basic premise that “[t]he holder of a note has standing to seek enforcement of the note.” Mortg. Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007). And we do agree with Deutsche Bank that the fact that the assignment of the mortgage is not effective until December 27, 2009, is irrelevant and that the true issue is whether Deutsche Bank is the holder of the note. See WM Specialty Mortg., LLC v. Salomon, 874 So. 2d 680, 682 (Fla. 4th DCA 2004) (” ‘If the note or other debt secured by a mortgage [is] transferred without any formal assignment of the mortgage, or even a delivery of it, the mortgage in equity passes as an incident to the debt, unless there [is] some plain and clear agreement to the contrary . . . .’ “ (quoting Johns v. Gillian, 184 So. 140, 143 (Fla. 1938))).
However, we also agree with Gonzalez that the trial court erred in granting Deutsche Bank’s motion for summary judgment because a genuine issue of material fact existed.
The standard of review on a summary judgment is de novo.[3] Estate of Githens ex rel. Seaman v. Bon Secours- Maria Manor Nursing Care Ctr., 928 So. 2d 1272, 1274 (Fla. 2d DCA 2006). . . . The movant has the burden to prove the absence of a genuine issue of material fact, and “this court must view ‘every possible inference in favor of the party against whom summary judgment has been entered.’ ” Id. (quoting Maynard v. Household Fin. Corp. III, 861 So. 2d 1204, 1206 (Fla. 2d DCA 2003)). And, “if the record raises even the slightest doubt that an issue might exist, that doubt must be resolved against the moving party and summary judgment must be denied.” Nard, Inc. v. DeVito Contracting & Supply, Inc., 769 So. 2d 1138, 1140 (Fla. 2d DCA 2000). Furthermore, . . . [a plaintiff seeking summary judgment] “must either factually refute the affirmative defenses or establish that they are legally insufficient.” Konsulian v. Busey Bank, N.A., 61 So. 3d 1283, 1285 (Fla. 2d DCA 2011). Taylor v. Bayview Loan Servicing, LLC, 74 So. 3d 1115, 1116-17 (Fla. 2d DCA 2011).
Here, a genuine issue of material fact remains as to whether the note was assigned prior to Deutsche Bank instituting the foreclosure suit. Gonzalez placed the standing issue before the trial court by raising it in her affirmative defenses. Deutsche Bank then filed with the trial court the original note with the stamped assignment on the last page. The first page of the note does indicate a date of October 5, 2005, and presumably that is the date on which Gonzalez signed the note and closed on her property. The problem is that the additional stamp and handwritten notation transferring the note from American Home Mortgage to Deutsche Bank is not dated. Accordingly, Deutsche Bank failed to establish its standing by showing that it possessed the note when it filed the lawsuit. See Country Place Cmty. Ass’n v. J.P. Morgan Mortg. Acquisition Corp., 51 So. 3d 1176, 1179 (Fla. 2d DCA 2010) (“Because J.P. Morgan did not own or possess the note and mortgage when it filed its lawsuit, it lacked standing to maintain the foreclosure action.”). As a result, Deutsche Bank has not refuted Gonzalez’s affirmative defense, and a genuine issue of material fact exists that should have precluded the entry of summary judgment.
Accordingly we must reverse and remand for further proceedings.
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