Highlights:

What GAO Found

In an effort to help the millions of homeowners struggling to keep their homes, a range of federal programs have offered relief in the form of loan modifications and refinancing into loans with lower interest rates, among other things. Under Treasury’s Home Affordable Modification Program (HAMP), initiated in early 2009, servicers have modified almost 1 million loans between 2009 and 2011. During the same period, servicers modified nearly 1 million additional loans under programs administered by the Departments of Agriculture (USDA) and Veterans Affairs (VA), Federal Housing Administration (FHA), and Fannie Mae and Freddie Mac (the enterprises). Servicers have also modified about 2.1 million loans under nonfederal loan modification programs resulting in a total of about 4 million modifications between 2009 and 2011. However, a large number of borrowers have sought assistance, but were unable to receive a modification. For example, approximately 2.8 million borrowers had their HAMP loan modification application denied or their trial loan modification canceled. Further, the volume of federal modifications has declined since 2010. Recent efforts have expanded refinancing programs. However, low participation rates in FHA’s program raise questions about the need for Treasury’s financial support, which could reach a maximum of $117 million.

Recommendations for Executive Action

Statesman Journal-

As the firm representing the homeowners in the recent Oregon Supreme Court case of Brandrup et al. v. ReconTrust et al., we would like to offer our inside analysis of the case and what it means for homeowners.

First, it is important to note that the court’s ruling is not an unequivocal win for either homeowners or lenders. While homeowners prevailed in three of the four questions before the court, lenders prevailed on one issue.

So where does this decision leave homeowners facing non-judicial (out of court) foreclosures?

First, the court completely adopted homeowners’ arguments regarding Mortgage Electronic Registration Systems Inc. (MERS). Homeowners argued that MERS could not be a beneficiary under the Oregon Trust Deed Act. The court agreed that MERS does not qualify as a beneficiary, regardless of what is stated in the trust deed.

[STATESMAN JOURNAL]

Listen to the shocking words that come out of the Attorney General Horne’s mouth!

WOW!!

ABC 15-

Thousands of Arizona families have lost their homes to illegal foreclosures.

Illegal foreclosures are based on forged, faked and phony documents.

According to Arizona Attorney General Tom Horne, “There’s been a major, really major effort to clean up that situation.”

But that’s not what we found.

The ABC15 Investigators spoke to victims and their attorneys who say bogus documents are still being used to put people out of their homes right here in the Valley.

We wanted to know why laws that make it a crime to submit forged documents in court don’t apply to those who are using phony records to foreclose on Arizona families. 

A VALLEY COP AND A DEVOTED MOTHER FINDS FORGED DOCUMENTS

Gabriella Westfall has served her community as a police officer for more than 25 years.

Read more: http://www.abc15.com/dpp/news/local_news/investigations/arizona-homeowners-losing-their-homes-to-foreclosure-through-forged-documents#ixzz2WqxLV3kg

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Oh yeah, housing is sure getting better.

HW-

Twenty percent of foreclosures nationwide sit empty after an owner vacated the premises, representing 167,000 distressed properties across the country, RealtyTrac announced Thursday.

While it’s imperative these properties move quickly through the process to cushion surrounding real estate values, in many states, it’s just not happening, says Daren Blomquist, vice president of RealtyTrac, a research firm that published the report.

Instead, laws designed to keep the housing market afloat and to prevent a flood of distressed assets make it more difficult to move assets that could benefit from full-time ownership.

[HOUSING WIRE]

I wonder if Erica Johnson Seck & Roger Stotts will be on the list amongst others who worked for IndySmack in the days?

Whistle-Blowers to the front of the line.

Abc Local-

Executives with OneWest Bank have announced that more than 700 workers will lose their jobs as the company is acquired as part of a $2.53 billion deal.

The Austin American-Statesman reports Monday that the majority of the 725 employees work at a call center.

[ABC LOCAL]

AND how many times exactly did the foreclosure mills and banks lie to the courts?

My Palm Beach Post-

A Tequesta homeowner is facing contempt charges after attempting to cancel the mortgage on his beachside home through a quiet title action — an Internet-promoted legal process that some lawyers say is bogus.

Last week, Palm Beach County Circuit Court Judge Jack Cox ordered homeowner Charles Flanagan to explain why he shouldn’t be found in indirect criminal contempt for allegedly lying in pleadings and scheming to defraud the court with his pro se lawsuit filed in December.

[MY PALM BEACH POST]

June 19 (Bloomberg Law) — Eliot Spitzer, former Governor and Attorney General for the State of New York, talks with Bloomberg Law’s Lee Pacchia about the so-called revolving door between the public and private spheres. While he doesn’t think the entire concept requires regulatory change, he does feel particular examples have shown an enormous problem of individuals improperly internalizing defenses of the private sector when they go to work for the government. Spitzer feels the issue is more about a person’s capacity to change with their given roles. “Can people separate, emotionally and intellectually, one job from the past job…that’s a very hard thing to do,” he says.

Asked whether the broad discrepancy in pay between private and public sector jobs is making the situation worse, Spitzer points to the non-monetary benefits of working in government. “[Government workers] are a lot happier…lawyers in the government tend to draw their joy and satisfaction not from their paycheck but from, theoretically, the existential joy of what they are doing”, he says.

Spitzer adds that he is “disappointed” in the government’s current slate of regulators, pointing to what he sees as an “overstated fear” of the economic consequences of prosecuting systemically important companies. Spitzer also gives his thoughts on the upcoming mayoral election in New York City.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT

JOE DiSALVO, III, and ELIZABETH ANN
DiSALVO,

Appellants,

v.     Case No. 2D11-2707

SUNTRUST MORTGAGE, INC.,

Appellee.

Opinion filed June 19, 2013.
Appeal from the Circuit Court for
Hillsborough County; J. Rogers Padgett,
Sr., Senior Judge.

Michael E. Rodriguez of Foreclosure
Defense Law Firm, PL, Tampa, for
Appellants.

Tricia J. Duthiers and Frank P. Cuneo of
Liebler, Gonzalez & Portuondo, P.A.,
Miami, for Appellee.

WALLACE, Judge.

Joe DiSalvo, III, and Elizabeth Ann DiSalvo challenge the entry of a
summary judgment resulting in a final judgment of foreclosure. Because the
mortgagee, SunTrust Mortgage, Inc., failed to present competent evidence that it
provided the DiSalvos with the requisite notice and an opportunity to cure the default
before the acceleration of the mortgage debt, we reverse.

In July 2009, SunTrust filed a complaint seeking to foreclose a mortgage
made by the DiSalvos. Paragraph 9 of the complaint contained a general allegation that
all of the conditions precedent to the acceleration of the mortgage had been performed.
Soon after, SunTrust filed a motion for final summary judgment of foreclosure.

In their answer, the DiSalvos denied paragraph 9 of the complaint. The
answer recited the terms of the mortgage contract contained in Section 22, which
provided that the lender was required to give notice to the borrower before acceleration
and that the notice must specify the default, the action required to cure the default, and
a date final for cure of the default. The notice must also inform the borrower that the
failure to cure the default before the specified date could result in acceleration or
foreclosure. In addition, Section 22 provided that the notice must inform the borrower of
the right to reinstate the mortgage after acceleration and the right to assert the
nonexistence of default or any other defense in a subsequent foreclosure proceeding.

The DiSalvos denied that they had received the required notice and alleged that
SunTrust had not complied with any of the conditions precedent expressed in Section
22 of the mortgage. The DiSalvos’ affirmative defense #5 contained essentially the
same language as the denial paragraph in their answer.

In January 2010, SunTrust filed a copy of a default letter with the trial court
and simultaneously moved to strike the DiSalvos’ affirmative defenses. With regard to
the DiSalvos’ fifth affirmative defense, SunTrust’s motion alleged:

Defendant was served with this complaint on July 24, 2009.
Plaintiff served its notice of the default and the amount owed
under the subject note and mortgage more than 30 days
from the date the complaint was served as evidenced by a
copy of the letter filed under separate cover.

On November 30, 2010, the trial court granted SunTrust’s motion to strike the DiSalvos’
affirmative defenses without a hearing. In April 2011, the DiSalvos moved for leave to
file an amended answer and affirmative defenses, but the motion was never set for a
hearing. On May 12, 2011, the trial court held a hearing on SunTrust’s motion for
summary judgment. After the hearing, the trial court granted SunTrust’s motion for
summary judgment and subsequently entered a final judgment of foreclosure.

We conclude that the trial court erred in granting summary judgment and
in entering a final judgment of foreclosure for two reasons. First, a mortgagee’s right to
the security for a mortgage is dependent upon its compliance with the terms of the
mortgage contract, and it cannot foreclose until it has proven compliance. See F.A.
Chastain Constr., Inc. v. Pratt, 146 So. 2d 910, 913 (Fla. 3d DCA 1962). But the filing of
a copy of the default notice by SunTrust, without proper authentication, failed to prove
such compliance:

The unauthenticated copies of default letters
purportedly sent to Bryson by BB & T were insufficient for
summary judgment purposes because only competent
evidence may be considered in ruling on a motion for
summary judgment.

. . . In this case, the letters at issue were not admitted
by the pleadings, nor were they accompanied by an affidavit
of a record custodian or other proper person attesting to their
authenticity or correctness.

Bryson v. Branch Banking & Trust Co., 75 So. 3d 783, 786 (Fla. 2d DCA 2011)
(citations omitted); see also Finnegan v. Deutsche Bank Nat’l Trust Co., 96 So. 3d 1093,
1094 (Fla. 4th DCA 2012) (“While the bank filed copies of letters allegedly sent to her,
these were not sworn and could not be considered on a motion for summary
judgment.”); Morrison v. U.S. Bank, N.A., 66 So. 3d 387, 387 (Fla. 5th DCA 2011)
(holding that the bank’s filing of an unauthenticated notice letter failed to support
summary judgment where the defendant asserted she had not received a notice of
default); BiFulco v. State Farm Mut. Auto. Ins. Co., 693 So. 2d 707, 709 (Fla. 4th DCA
1997) (“Merely attaching documents which are not ‘sworn to or certified’ to a motion for
summary judgment does not, without more, satisfy the procedural strictures inherent in
Fla. R. Civ. P. 1.510(e).”). In this case, at the hearing on its motion for summary
judgment, SunTrust argued that the notice it had filed was sufficient and “meets its
burden as far as Paragraph 22″ (referring to section 22 of the mortgage contract). This
statement was incorrect, and the trial court’s reliance on the unauthenticated copy of the
notice as evidence supporting summary judgment was error.

Second, the trial court erred in finding that no issues of material fact
remained which would prevent it from granting SunTrust’s motion for summary
judgment. At the hearing, counsel for SunTrust argued as follows:
Furthermore, there is no answer and affirmative
defenses in this case as of right now. His affirmative
defenses have been stricken since November. There is no
affidavit from the defense counsel or from his – – from the
borrower stating these things. The only evidence before the
Court at this motion for summary judgment is the affidavit of
indebtedness from the bank. The original note has been
filed. A copy of the mortgage was filed with the complaint.

We also supplemented with the original mortgage . . . .
. . . There’s [sic] no issues as to standing. There’s
[sic] no issues before the Court whatsoever.

The trial court agreed and announced that it would grant summary judgment. But
despite the striking of the DiSalvos’ affirmative defenses, the argument that there were
no issues before the court at the time of the hearing on SunTrust’s motion was wrong.

The trial court only struck the DiSalvos’ affirmative defenses; it did not strike their
denials of the allegations of the complaint. Moreover, the DiSalvos’ denial of paragraph
#9 of the complaint was made with sufficient specificity and particularity to comply with
Florida Rule of Civil Procedure 1.120(c) (“A denial of performance or occurrence [of a
condition precedent] shall be made specifically and with particularity.”). See Frost v.
Regions Bank, 15 So. 3d 905, 906 (Fla. 4th DCA 2009) (holding that the bank failed to
prove that the Frosts’ defense of lack of notice and opportunity to cure was legally
insufficient, despite the omission by the Frosts—unlike in the instant case—to cite
specifically the language from the mortgage in their answer to the complaint).

On appeal, SunTrust also argues, as it did at the summary judgment
hearing, that “[t]he [Property Owners] . . . did not make a showing in support of their
claim as they failed to file any affidavits and/or other materials in opposition to the
[motion for summary judgment].” This argument misses the mark because there is no
requirement for a party to file a competing affidavit or any other “materials” to defeat a
motion for summary judgment. See Cerron v. GMAC Mortg., LLC, 93 So. 3d 456, 457
(Fla. 2d DCA 2012):

GMAC maintains that Cerron had the burden to file an
affidavit stating that he never received a notice of default, at
which point GMAC would have been required to refute the
contention with contrary evidence. That is incorrect. A
plaintiff moving for summary judgment must either
conclusively refute the factual bases for the defendant’s
affirmative defenses or show that the defenses are legally
insufficient. . . . [W]hen Cerron alleged GMAC’s failure to
provide a contractually required notice of default, GMAC’s
burden on summary judgment was to show that it had
satisfied this condition precedent. It failed to do so.

See also Frost, 15 So. 3d at 906 (holding that the defendants’ argument that the bank
had failed to address their affirmative defense of lack of notice was sufficient to counter
the bank’s motion for summary judgment, despite the failure of the defendants to file
any papers or affidavits in opposition).

Accordingly, because the copy of the notice-of-default letter did not
constitute admissible evidence and because the DiSalvos’ answer was legally sufficient
to dispute SunTrust’s allegation that all conditions precedent had been met, a genuine
issue of material fact remained preventing the entry of summary judgment.

Reversed and remanded for further proceedings.
CASANUEVA and MORRIS, JJ., Concur.

Why is it so hard to protect the people unless you’re not looking out for their interest.

Business Week-

A federal appeals court threw more than 700 Rhode Island foreclosure cases into uncertainty by concluding that there are problems with how a judge set up a program designed to force homeowners and banks into mediation.

The 1st U.S. Circuit Court of Appeals said U.S. District Judge John McConnell did not follow the proper procedures when he instituted his unique order governing foreclosures. A lawyer who represents hundreds of families suing to stop from being foreclosed upon says he fears the appeals court is jeopardizing a program that is helping people.

McConnell signed an order on Aug. 16, 2011, in which he took over all mortgage foreclosure cases in federal court in Rhode Island. The order halted the cases, suspended all deadlines and required homeowners and financial institutions to engage in “directed and serious settlement discussions” before he would allow any individual case to proceed. He placed no time limits on the discussions.

[BUSINESS WEEK]

NY MAG-

Two years ago, the New York State Department of Financial Services didn’t exist. Today, it’s becoming Wall Street’s most feared enemy.

The tiny, state-run agency, which was created in late 2011, isn’t supposed to be any more powerful than any other Wall Street regulator. It doesn’t have the resources of the Securities and Exchange Commission or the prosecutorial power of the Justice Department. But Benjamin Lawsky, a tough-talking former terrorism prosecutor who became the agency’s first head, has turned the New York DFS into a fraud-fighting machine, one that doles out real punishment to the firms it goes after.

Today, Lawsky has gotten a scalp from the financial services unit of the accounting megafirm Deloitte, which agreed to pay a $10 million fine and be banned from consulting with any New York-regulated banks for a year for helping Standard Chartered, a British bank, conceal evidence of money-laundering arrangements with the Iranian government. Per the Cuomo administration’s press release, Deloitte FAS will also have to “implement a set of reforms designed to help address conflicts of interest in the consulting industry.”

[NY MAG]

Check out the full Bank of America whistleblower details

In an absolute bombshell filing in federal court, sworn affidavits describe an intentional strategy on the part of Bank of America to systematically lie to struggling homeowners right up to the point of foreclosure. Chris Hayes details the revelations with the All In panel.

HuffPO-

The government-appointed monitor overseeing mortgage practices as part of last year’s robo-signing settlement between five big U.S. banks and dozens of government agencies found few violations after grading the banks’ compliance with ambitious new standards, according to court documents filed Tuesday.

The finding of just three audited failures by Joseph Smith, the government-appointed watchdog heading the Office of Mortgage Settlement Oversight, may prompt criticism by borrower advocates, consumer attorneys, and members of Congress after numerous reports by state attorneys general and housing advocates of pervasive noncompliance with the new mortgage servicing rules the banks agreed to implement as part of the 2012 settlement.

Smith plans to point out five additional unaudited violations that were self-reported by the banks, according to people who have reviewed a report he plans to release on Wednesday. His office has yet to double-check the findings.

[HUFFINGTON POST]

Check out the full Bank of America whistleblower details (affidavits)

Read former staff describe getting Target gift cards as a prize for foreclosing on people, and other awful schemes

By David Dayen, SALON

Read the editorial below slowly and one has to wonder where in the world is Pamela Bondi?

WSJ-

Regarding your editorial “What Doesn’t Stay in Vegas” (June 12): In December 2012 the state of Nevada sued Lender Processing Services, LPS Inc. (LPS) for fraudulently executing more than 100,000 mortgage documents. LPS, a Florida corporation, handles more than half of the nation’s foreclosures. Its conduct—generally called “robosigning”—has contributed significantly to Nevada’s foreclosure crisis, from which we are still suffering. Our lawsuit will recover penalties provided by law for LPS’s misconduct.

To assist in this vital legal fight, the Nevada attorney general’s office hired private counsel. The contract was approved by all necessary state entities. Since we filed the case on Dec. 15, 2011, LPS has unsuccessfully sought—twice—to dismiss the state’s lawsuit. LPS filed—and lost—its own lawsuit against the state in federal court. LPS’s latest tactic is to try and weaken the state’s resources against it.

[WALL STREET JOURNAL]

Maxine Waters isn’t the only one take a look at what Neil Barofsky, former SigTarp Watchdog had to say

@alexisgoldstein @Salon SIGTARP could conduct investigation and refer to DOJ (to prosecute) and to Treasury (to claw back).

— Neil Barofsky (@neilbarofsky) June 18, 2013

Business Week-

Bank of America Corp. (BAC), the second-biggest U.S. lender, should be investigated for its treatment of distressed homeowners, said Representative Maxine Waters, the top Democrat on the House Financial Services Committee.

Employees say the lender told them to delay applications to the Home Affordable Modification Program, or HAMP, to increase fees and send customers into foreclosure, Waters wrote today in a letter to the watchdog for the U.S. government’s bailout program. She cited a June 14 Bloomberg article based on court documents in making the request.

“Foreclosure is often the most profitable end result for a servicer that does not own the loan they are servicing,” the California Democrat wrote to Christy Romero, the special inspector general of the Troubled Asset Relief Program. “It goes without saying that this is an outright abuse of consumers and government mortgage-assistance programs.”

[BUSINESS WEEK]

Deutsche Bank has to since we’re finding out that DB is ‘horribly undercapitalized’!

Business Week-

Deutsche Bank AG (DBK) settled a lawsuit brought by the city of Los Angeles accusing the bank of acting like a “slumlord” and letting foreclosed homes in low-income neighborhoods fall into disrepair.

The bank and the Los Angeles city attorney filed a joint notice of settlement yesterday in California state court. The two sides reached an agreement in principle and are in the process of completing the documentation, according to the filing.

Terms of the settlement of the two-year-old lawsuit, which also accused Deutsche Bank of illegally evicting tenants, weren’t disclosed in the filing.

[BUSINESS WEEK]

NYT-

FOR the last two weeks, a justice in New York State Supreme Court has heard testimony in one of the most pivotal cases of the financial crisis. The hearings will tell whether Bank of America can extinguish legal liability for more than a million Countrywide Financial loans by paying $8.5 billion in cash and agreeing to loan servicing improvements in a settlement struck with 22 investors in 2011.

But the case, being heard by Justice Barbara R. Kapnick, extends far beyond the impact of the settlement on Bank of America’s balance sheet. It is also laying bare an industry practice that has put investors in mortgage securities at a disadvantage and reduced their financial recoveries in the aftermath of the home loan mania.

The practice at issue involves trustee banks overseeing the vast and complex mortgage pools bought by pension funds, mutual funds and others. Trustees like Bank of New York Mellon were paid by investors to make sure that the servicers administering these mortgage deals, known as trusts, treated them properly. Trustees receive nominal fees — less than a penny on each dollar of assets — for the work.

[NEW YORK TIMES]

William David Newman Jr., of Choice Legal Group, P.A., Fort Lauderdale, for Appellee.

PER CURIAM.

Ronald and Bleuette Steinberg appeal a final judgment of foreclosure. BAC Home Loans Servicing, L.P., f/k/a Countrywide Home Loans Servicing, L.P., responded to the Steinbergs’ initial brief by filing a confession of error, admitting that the case was controlled by Bryson v. Branch Banking and Trust Co., 75 So. 3d 783 (Fla. 2d DCA 2011). It suggested that we direct the lower court clerk to vacate the certificates of sale, disbursements, and title. It agreed that the final judgment should be vacated.

To avoid delay, this court issued an order relinquishing jurisdiction to the circuit court to vacate the certificates. We have now received a status report establishing that the certificates have all been vacated. Pursuant to the confession of error, we reverse the judgment on appeal and remand for further proceedings.

Reversed and remanded.

ALTENBERND, KELLY, and LaROSE, JJ., Concur.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

How they’re still operating instead of being shut down is beyond me.

Salon-

On May 20, a massive EF5 tornado whipped through heavily populated Moore, Oklahoma, killing 24 and injuring nearly 400. That tragedy has now shifted into the drudgery of recovery. According to the state’s Insurance Department, claims from the tornado in Moore and a subsequent twister in the city of El Reno have topped 60,000. The damage is expected to reach $2 billion.

But residents of Moore may be shocked when they receive their insurance checks in the coming weeks. Like survivors of previous natural disasters, they will encounter a major obstacle to rebuilding their homes and putting the catastrophe behind them: their mortgage servicer. Turns out the same companies that ripped off homeowners during the foreclosure crisis are, after disasters like the Moore tornado, withholding repair money, often to force homeowners to use the proceeds to pay their mortgage.

[SALON]

Reuters-

A top U.S. banking regulator called Deutsche Bank’s capital levels “horrible” and said it is the worst on a list of global banks based on one measurement of leverage ratios.

“It’s horrible, I mean they’re horribly undercapitalized,” said Federal Deposit Insurance Corp Vice Chairman Thomas Hoenig in an interview. “They have no margin of error.”

Hoenig, who is second-in-command at the regulator, said global capital rules, known as the Basel III accord, allow lenders to appear well-capitalized when they are not. That is because the rules allow the banks to use complicated measurements of how risky their loans are to determine the capital they must hold, he said.

[REUTERS]

NYT-

More than 50,000 New Yorkers slept in city homeless shelters and on the streets last night. About 21,000 were children. These numbers are huge and appalling, higher than they were in 2002, when Mayor Michael Bloomberg took office, higher than in the dismal days of the fiscal crisis, the Reagan ’80s and the surly administration of Rudolph Giuliani.

New Yorkers who have no permanent place to live form a small city unto themselves — an abandoned one. The shelter population has risen 61 percent while Mr. Bloomberg has been mayor, propelled by a 73 percent increase in homeless families, according to the Coalition for the Homeless, whose relentless advocacy has been provoking mayoral fury since the 1980s. These surging numbers — of families with children, especially — undercut claims that New York is steadily becoming a better place to live, and that its government has gotten better at helping its most vulnerable citizens meet their most basic needs.

[NEW YORK TIMES]