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CAVEAT EMPTOR |MERS Transfers May Have Cloud Homeownership With `Blighted Titles’

CAVEAT EMPTOR |MERS Transfers May Have Cloud Homeownership With `Blighted Titles’

This is what this site is about…”ClOUDED TITLES”! This quote below should have added that it was in 65 Million mortgages not in some. I hope you all read my NO. THERE’S NO LIFE AT MERS…I highly recommend it because it came the heart.


In some cases, mortgages were conveyed using the Reston, Virginia-based Mortgage Electronic Registration System, or MERS, designed to cover transfers among system members. Promissory notes also often were endorsed as payable to the bearer to avoid the need for multiple transfers. Both practices have been challenged in court.

Foreclosure Errors Cloud Homeownership With `Blighted Titles’

By Kathleen M. Howley – Oct 1, 2010 12:00 AM ET

U.S. courts are clogged with a record number of foreclosures. Next, they may be jammed with suits contesting property rights as procedural mistakes in those cases cloud titles establishing ownership.

“Defective documentation has created millions of blighted titles that will plague the nation for the next decade,” said Richard Kessler, an attorney in Sarasota, Florida, who conducted a study that found errors in about three-fourths of court filings related to home repossessions.

Attorneys general in at least six states are investigating borrowers’ claims that some of the nation’s largest home lenders and loan servicers are making misstatements in foreclosures. JPMorgan Chase & Co. is asking judges to postpone foreclosure rulings, while Ally Financial Inc. said Sept. 21 its GMAC Mortgage unit would halt evictions. The companies said employees may have completed affidavits without confirming their accuracy.

Such mistakes may allow former owners to challenge the repossession of homes long after the properties are resold, according to Kessler. Ownership questions may not arise until a home is under contract and the potential purchaser applies for title insurance or even decades later as one deed researcher catches errors overlooked by another. A so-called defective title means the person who paid for and moved into a house may not be the legal owner.

‘Nightmare Scenario’

“It’s a nightmare scenario,” said John Vogel, a professor at the Tuck School of Business at Dartmouth College in Hanover, New Hampshire. “There are lots of land mines related to title issues that may come to light long after we think we’ve solved the housing problem.”

Almost one-fourth of U.S. home sales in the second quarter involved properties in some stage of mortgage distress, RealtyTrac Inc. said yesterday. In August, lenders took possession of record 95,364 homes and issued foreclosure filings to 338,836 homeowners, or one out of every 381 U.S. households, according to the Irvine, California-based data seller.

The biggest deficiency in foreclosure suits is missing or improperly handled documents, Kessler found in his study of court filings in Florida’s Sarasota County. When home loans are granted, borrowers sign a promissory note outlining payment obligations and a separate mortgage that puts an encumbrance on the property in the lender’s name. If mortgages are resold, both documents must be properly conveyed to prevent competing claims.

Mortgage Bonds

Most of the document errors involved mortgages that had been bundled into securities sold to investors, Kessler said. At the end of the U.S. real estate boom in 2005 and 2006, about 70 percent of the $6.1 trillion in mortgage lending was packaged into bonds, according to the Securities Industry and Financial Markets Association in New York.

Continue reading…BLOOMBERG

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© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in assignment of mortgage, auction, Bank Owned, bloomberg, bogus, chain in title, CONTROL FRAUD, corruption, deed of trust, DOCX, Economy, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, jpmorgan chase, Lender Processing Services Inc., LPS, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, rmbs, robo signers, securitization, servicers, stopforeclosurefraud.com, sub-prime2 Comments

WANTED: NATIONWIDE TITLE’S ROBO-SIGNERS BRYAN J. BLY | CRYSTAL MOORE DOCUMENTS

WANTED: NATIONWIDE TITLE’S ROBO-SIGNERS BRYAN J. BLY | CRYSTAL MOORE DOCUMENTS

Remember this from 6/20/2010?

By DinSFLA 6/20/2010

Now if this isn’t another means to a massive mandatory recall for any of this robo-signer’s documents, then our judicial systems are playing with an enormous fire getting ready to ignite even more angry individuals who has his documents sworn into court!

Then again, they’re one of the same.

Today Susan Taylor Martin for Tampabay.com wrote an interesting article about a too too familiar robo-signer “Bryan J. Bly”.

In this article She states

“Over the past few years, Bly has signed countless mortgage assignments as either a notary public or “vice president” of various lenders.

In reality, Bly works for Nationwide Title Clearing, a Palm Harbor company. And he was recently reprimanded by state regulators after acknowledging in a sworn statement that Nationwide Title had him notarizing so many documents that he scribbled his initial instead of signing his full name as required by law.

Such a pace, critics say, shows that Bly and other so-called “robo signers” can’t possibly be sure that what they’re signing is accurate.”

Just by these statements alone why aren’t any of these assignments or any documents executed by Mr. Bly being pulled out from court shelves?

It’s quite simple and you don’t need to be an Einstein.

If there is a product that is shown to cause human any harm there is a mandatory recall. So where is this recall on these products? Where on earth is the government to put a stop to all this assembly line?

Does it have to take a Chinese toymaker with toxic paint, a drywall that deteriorates the guts of a home and possibly lead to possible health issues or how about a Japanese car manufacturer that makes faulty brakes? Again, where is the authority looking into these claims? And why are they NOT pulling these defective items out of our records  in the court houses? Exactly who is being notified that these documents can cause harm to you or that if you were a victim of such irresponsibility to come forward?

My point is these documents are making one extremely ill, homeless and even in some cases suicidal. If this isn’t harm than what is?

This is just wrong in every possible way! Fraud is Fraud.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in assignment of mortgage, Bank Owned, Bryan Bly, chain in title, conflict of interest, CONTROL FRAUD, Crystal Moore, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, investigation, Nationwide Title, Notary, notary fraud, note, rmbs, robo signers, STOP FORECLOSURE FRAUD, Trusts, Violations10 Comments

Handcuffs for Wall Street, Not Happy-Talk

Handcuffs for Wall Street, Not Happy-Talk

“If the people cannot trust their government to do the job for which it exists
– to protect them and to promote their common welfare – all else is lost.”
– BARACK OBAMA, speech, Aug. 28, 2006

Zach Carter

Zach Carter

Economics Editor, AlterNet; Fellow, Campaign for America’s Future

Posted: September 12, 2010 02:52 PM

The Washington Post has published a very silly op-ed by Chrystia Freeland accusing President Barack Obama of unfairly “demonizing” Wall Street. Freeland wants to see Obama tone down his rhetoric and play nice with executives in pursuit of a harmonious economic recovery. The trouble is, Obama hasn’t actually deployed harsh words against Wall Street. What’s more, in order to avoid being characterized as “anti-business,” the Obama administration has refused to mete out serious punishment for outright financial fraud. Complaining about nouns and adjectives is a little ridiculous when handcuffs and prison sentences are in order.

Freeland is a long-time business editor at Reuters and the Financial Times, and the story she spins about the financial crisis comes across as very reasonable. It’s also completely inaccurate. Here’s the key line:

“Stricter regulation of financial services is necessary not because American bankers were bad, but because the rules governing them were.”

Bank regulations were lousy, of course. But Wall Street spent decades lobbying hard for those rules, and screamed bloody murder when Obama had the audacity to tweak them. More importantly, the financial crisis was not only the result of bad rules. It was the result of bad rules and rampant, straightforward fraud, something a seasoned business editor like Freeland ought to know. Seeking economic harmony with criminals seems like a pretty poor foundation for an economic recovery.

The FBI was warning about an “epidemic” of mortgage fraud as early as 2004. Mortgage fraud is typically perpetrated by lenders, not borrowers — 80 percent of the time, according to the FBI. Banks made a lot of quick bucks over the past decade by illegally conning borrowers. Then bankers who knew these loans were fraudulent still packaged them into securities and sold them to investors without disclosing that fraud. They lied to their own shareholders about how many bad loans were on their books, and lied to them about the bonuses that were derived from the entire scheme. When you do these things, you are stealing lots of money from innocent people, and you are, in fact, behaving badly (to put it mildly).

The fraud allegations that have emerged over the past year are not restricted to a few bad apples at shady companies– they involve some of the largest players in global finance. Washington Mutual executives knew their company was issuing fraudulent loans, and securitized them anyway without stopping the influx of fraud in the lending pipeline. Wachovia is settling charges that it illegally laundered $380 billion in drug money in order to maintain access to liquidity. Barclays is accused of illegally laundering money from Iran, Sudan and other nations, jumping through elaborate technical hoops to conceal the source of their funds. Goldman Sachs set up its own clients to fail and bragged about their “shitty deals.” Citibank executives deceived their shareholders about the extent of their subprime mortgage holdings. Bank of America executives concealed heavy losses from the Merrill Lynch merger, and then lied to their shareholders about the massive bonuses they were paying out. IndyMac Bank and at least five other banks cooked their books by backdating capital injections.

Continue reading…..The  Huffington Post


© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, citi, conspiracy, Economy, FED FRAUD, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, goldman sachs, hamp, indymac, investigation, jobless, lehman brothers, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., OCC, racketeering, RICO, rmbs, Wall Street, wamu, washington mutual, wells fargo0 Comments

CALL TO ACTION: MERS ASSIGNMENTS

CALL TO ACTION: MERS ASSIGNMENTS

The Time To Act Is NOW!

I am working on a special project & need your help to gather as many MERS Assignments as we can possibly get.

What is especially needed are the Certifying Officers signing these assignments for MERS. I don’t care if it’s old, new, signed, undated, unmarked, lender has gone bankrupt ages ago…I just want them ALL!


Click the Envelope to load up your MERS Assignment(s).

Or Info at stopforeclosurefraud.com

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, bankruptcy, chain in title, concealment, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, forgery, investigation, mbs, MERS, MERSCORP, mortgage, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Mortgage Foreclosure Fraud, Notary, notary fraud, note, quiet title, racketeering, Real Estate, REO, RICO, rmbs, robo signers, securitization, servicers, STOP FORECLOSURE FRAUD, stopforeclosurefraud.com, Supreme Court, trade secrets, trustee, Trusts, Wall Street1 Comment

Homebuyer tax credit: 950,000 must repay

Homebuyer tax credit: 950,000 must repay

LMFAO!! Yet Another Bomb! Thank you for the rise in Real Estate sales…How do you say “bait and switch”! Were these disclosure properly made?

Can’t wait to see the outcome of these sub-prime mortgages when most of the 950K were counting on this!


Les Christie, staff writer, On Thursday September 9, 2010, 2:40 pm EDT

Nearly half of all Americans who claimed the first-time homebuyer tax credit on their 2009 tax returns will have to repay the government.

According to a report from the Inspector General for Tax Administration, released to the public Thursday, about 950,000 of the nearly 1.8 million Americans who claimed the tax credit on their 2009 tax returns will have to return the money.

The confusion comes because homebuyers were eligible for two different credits, depending on when their homes were purchased.

Those who bought properties during 2008 were to deduct, dollar for dollar, up to 10% of the home’s purchase price or $7,500, whichever was less. The catch: The money was a no-interest loan that had to be repaid within 15 years.

Had they waited to buy until 2009, they could have gotten a much sweeter deal. Congress extended the credit and made it a refund rather than a loan.

Continue Reading…YAHOO

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, breach of contract, conflict of interest, FHA, foreclosure, foreclosures, mortgage, note, Real Estate0 Comments

Clogged foreclosure pipeline may lead to DJSP layoffs

Clogged foreclosure pipeline may lead to DJSP layoffs

DinSFLA here: Side note…DJSP recently signed what may be the largest lease in Orlando this year. They plan to open a 12,870-square-foot in Highwoods Properties’ Landmark Center Two, near Lake Eola.

by Austin Kilgore September 9, 2010

The clogged foreclosure pipeline is delaying new foreclosure filings, and Florida-based processing services firm DJSP Enterprises said it’s considering layoffs to deal with the decreased business.

DJSP Enterprises’ main client is The Law Offices of David J. Stern, P.A. (DJSPA). In the DJSP Enterprises second quarter 2010 and mid-year earnings report released this week, the company said a slow down in new foreclosure filings will likely necessitate cost cutting and personnel layoffs. The company said it initially believed file volume would increase in the third quarter, leading to the decision to maintain current staffing levels. However, file volumes continue to be delayed and existing staffing levels are not sustainable indefinitely, the report said.

“While a large portion of our business can only be processed with human capital, we are identifying opportunities where technology and process change can be implemented to create efficiency,” recently-appointed DJSPA President and COO Richard “Rick” Powers said in the financial statement. “We are prepared to create efficiencies and make cuts where appropriate over the next three to six months.”

Continue reading ….REO Insider

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, djsp enterprises, foreclosure, foreclosure mills, foreclosures, jobless, Law Offices Of David J. Stern P.A., mortgage, REO, stock, title company, Wall Street3 Comments

MICHAEL BURRY: THE HOUSING MARKET IS “ARTIFICIAL”

MICHAEL BURRY: THE HOUSING MARKET IS “ARTIFICIAL”

Michael Burry, the former head of Scion Capital LLC who predicted the housing market’s plunge, talks with Bloomberg’s Jon Erlichman about his investments in agricultural land, real estate and gold.

Michael Lewis made him famous in his book “The Big Short”.

(This is an excerpt. Source: Bloomberg)

“I believe that agricultural land, productive agricultural land with water on site, will be very valuable in the future. And I’ve put a good amount of money into that. So I’m investing in alternative investments as well as stocks.”

“I think there is some value in real estate. You have to buy it right. It’s not in general, that’s the problem. I think that there are an awful lot of people out there looking to buy these distressed properties out there and so you need to find special situations. That is how I’ve invested from the beginning. I’m looking for these special situations, these unique ideas and that’s true in real estate too.”

“In my situation I’d rather go long on housing itself, real estate itself. Depending on how you structure it, in the real market, in the physical market, you can get some pretty good deals and I’ve done some of that too.”

“Paulson is big in gold and that is something is interesting to me and given how I see the world playing out. Other than that, I’m just saying, other than gold I haven’t really bought into the other…

Source: Bloomberg TV

Photographer: Tony Avelar/Bloomberg

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, bogus, CONTROL FRAUD, corruption, fannie mae, FED FRAUD, federal reserve board, foreclosure, foreclosure fraud, foreclosures, goldman sachs, heloc, insider, investigation, mbs, mortgage, naked short selling, Real Estate, rmbs, STOP FORECLOSURE FRAUD, stopforeclosurefraud.com, sub-prime, trade secrets, Wall Street1 Comment

‘Jingle Mail’: Developers Are Giving Up On Properties

‘Jingle Mail’: Developers Are Giving Up On Properties

By KRIS HUDSON And A.D. PRUITT

Like homeowners walking away from mortgaged houses that plummeted in value, some of the largest commercial-property owners are defaulting on debts and surrendering buildings worth less than their loans.

Companies such as Macerich Co., Vornado Realty Trust and Simon Property Group Inc. have recently stopped making mortgage payments to put pressure on lenders to restructure debts. In many cases they have walked away, sending keys to properties whose values had fallen far below the mortgage amounts, a process known as “jingle mail.” These companies all have piles of cash to make the payments. They are simply opting to default because they believe it makes good business sense.

“We don’t do this lightly,” said Robert Taubman, chief executive of Taubman Centers Inc. The luxury-mall owner, with upscale properties such as the Beverly Center in Los Angeles, decided earlier this year to stop covering interest payments on its $135 million mortgage on the Pier Shops at Caesars in Atlantic City, N.J.

Taubman, which estimates the mall is now worth only $52 million, gave it back to its mortgage holder.

“Where it’s fairly obvious that the gap is large, as it was with the Pier Shops, individual owners are making very tough decisions,” he said.

These pragmatic decisions by companies to walk away from commercial mortgages come as a debate rages in the residential-real-estate world about “strategic defaults,” when homeowners stop making loan payments even though they can afford them. Instead, they decide to default because the house is “underwater,” meaning its value has fallen to a level less than its debt.

Banking-industry officials and others have argued that homeowners have a moral obligation to pay their debts even when it seems to make good business sense to default. Individuals who walk away from their homes also face blemishes to their credit ratings and, in some states, creditors can sue them for the losses they suffer.

But in the business world, there is less of a stigma even though lenders, including individual investors, get stuck holding a depressed property in a down market. Indeed, investors are rewarding public companies for ditching profit-draining investments. Deutsche Bank AG’s RREEF, which manages $56 billion in real-estate investments, now favors companies that jettison cash-draining properties with nonrecourse debt, loans that don’t allow banks to hold landlords personally responsible if they default. The theory is that those companies fare better by diverting money to shareholders or more lucrative projects.

“To the extent that they give back assets or are able to rework the [mortgage] terms, it just accrues to the benefit” of the real-estate investment trust, says Jerry Ehlinger, RREEF’s co-chief of real-estate securities.

Continue reading…Wall Street Journal

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, commercial, deutsche bank, walk away0 Comments

Million dollar California foreclosures – 35 examples of massive upper-tier foreclosures including one home that is underwater by $2.2 million. Santa Monica housing still in a bubble.

Million dollar California foreclosures – 35 examples of massive upper-tier foreclosures including one home that is underwater by $2.2 million. Santa Monica housing still in a bubble.

I know some people have this notion that somehow California real estate prices are going to miraculously recover simply by sheer determination and the belief in late night infomercial catch phrases. Instead of focusing on larger macro economic trends they will use limited data that doesn’t capture the larger emerging trend. We’ve all seen those TV ads yet data is going in a very different direction. Inventory is increasing in California. Prices are dropping. Problem loans are still filling the pipeline. These are facts and as stubborn as they are, they tell us a more provocative story about real estate in the state. That story revolves around the fact that a large shadow inventory is lingering and the artificial dams of government intervention are having a tougher time holding back the flood. Today, I wanted to focus on the higher end markets of Los Angeles County to show that contrary to a handful of anecdotal cases, overall there is a bigger trend emerging. The mid-tier market is now entering its correction.

Before we look at Santa Monica our targeted city today, I wanted to provide you with 35 specific examples of million dollar prime location foreclosures in Southern California. These are all in Los Angeles County:

Continue reading …Dr. Housing Bubble

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, CONTROL FRAUD, Economy, foreclosure, foreclosures, mortgage, Real Estate, shadow foreclosures, STOP FORECLOSURE FRAUD, walk away0 Comments

Is D-DAY coming to some Banks? More rows of shadow inventory…

Is D-DAY coming to some Banks? More rows of shadow inventory…

Foreclosure Filings on Track to Hit 3 Million Homes. Repos Expected to Reach 1 Million in 2010

by Jann Swanson Mortgage News Daily

Default notices, auction sale notices, and actual bank repossessions were received  on a total of 1,961,894 homes, or one in every 78 households,  during the most recent six month period according to the Mid-Year 2010 U.S Foreclosure Market Report issued by RealtyTrac.

These findings represent a 5 percent decline in filings from the last half of 2009, but an increase of 8 percent from the first half of last year.  Perhaps the good news is that the year-over-year change was almost totally due to a jump in bank repossessions, which were up five percent while default and auction notices were down 10.4 percent since the first half of last year.

In June there were a total of 313,841 filings, a decrease of nearly 3 percent from May and down nearly 7 percent from the previous June.  It was the sixteenth straight month where the total number of properties with foreclosure filings exceeded 300,000.

RealtyTrac’s report incorporates documents filed in all three phases of foreclosure, unfortunately the mid-year review did not break down the data into individual categories (but we’re building our own spreadsheet).

  1. Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current.
  2. Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); If the borrower does not catch up on their payments the lender will file a notice of sale (the lender intends to sell the property). This notice is published in local paper and contains information pertaining to the date, time and subject property address.
  3. Real Estate Owned or REO properties : “REO” stands for “real estate owned” and typically refers to the inventory of real estate that banks and mortgage companies have foreclosed on and subsequently purchased through the foreclosure auction if there was no offer higher than the minimum bid.

During the second quarter of 2010 there were foreclosure filings on 895,521 properties, down from 932,234 in the first quarter, a decrease of 4 percent.  This is 1 percent more filings than in the second quarter one year earlier.

“The second quarter was a tale of two trends,” said James J. Saccacio, chief executive officer of RealtyTrac. “The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. Meanwhile the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.

The midyear numbers put us on pace to exceed 3 million properties with foreclosure filings by the end of the year, and more than 1 million bank repossessions,” Saccacio continued. “The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continue to sit just below the surface, threatening the fragile stability of the housing market.”

As usual, Nevada, Arizona, Florida, California, and Utah topped the list of states in foreclosure activity.  In Nevada, one in 17 housing units (6 percent) received at least one foreclosure filing in the first six months of the year, down 6.2 percent from a year earlier and 13 percent from the last half of 2009.  In Arizona there were filings posted against one in 30 housing units, down 1.6 percent from the second half of 2009 and 1.88 year over year.  Florida follows with one in 32 homes in some stage of foreclosure, a decrease of 8.61 from the most recent half year and an increase of 3.4 percent from one year ago.

Other states with foreclosure rates ranking among the nation’s 10 highest were California (1 in 39 units), Utah (1 in 52), Georgia (1 in 56), Michigan (1 in 58), Idaho (1 in 59), Illinois (1 in 62), and Colorado (1 in 72.)

These were the thoughts MND shared regarding the May data. They are still very relevant…

Plain and Simple: The good news is it seems like the worst is behind us in terms of new defaults. Plus the modest decline in newly scheduled auctions helps out housing on the excess supply front as banks are choosing to hold onto their inventory instead of flood the market with distressed supply (which would drive prices even lower). Perhaps this is a factor of the expiration of the homebuyer tax credit? Now for the bad news. Over the past year, to give HAMP a chance to “work its magic” (which servicers have little incentive to do ) and to reduce the cost of maintaining the condition of foreclosed properties, banks were delaying the foreclosed home liquidation process. This allowed delinquent borrowers to stay in their houses and also allowed banks to avoid asset value write-downs. Unfortunately, with HAMP running out of qualified borrowers, that trend is starting to reverse course. Bank balance sheets are beginning to balloon with REO, shadow inventory is being converted to actual inventory!

This is a negative for two reasons. First it implies more people are being put out of their home and onto the street and second, at some point, the distressed homes banks are adding to their balance sheets will need to be put back up for sale. Once the housing market starts to pick up recovery momentum, banks will begin to slowly liquidate their inventory of foreclosed properties. Hopefully they will do so in a manner that does not greatly disrupt local supply/demand and push prices even lower (which would hurt their own cause). Growing “shadow inventory” is one of two reasons why the housing recovery will likely be a very long process (the other being long term unemployment).

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, foreclosure, foreclosures, shadow foreclosures, STOP FORECLOSURE FRAUD0 Comments

FRANKENSTEIN Real Estate | TRILLIONS in DEBT

FRANKENSTEIN Real Estate | TRILLIONS in DEBT

Frankenstein real estate market – $3.5 trillion in commercial real estate debt and $10.3 trillion in residential real estate debt. Will we reach a 50 percent underwater market where 25 million Americans sit in homes worth less than their mortgage?

The real estate market has morphed into a beast that is largely sinking the overall economy into the ground.  If we combine the commercial real estate market ($3.5 trillion in debt) with residential outstanding mortgages ($10.3 trillion) we arrive at a figure that nears the annual GDP of our country.  What makes the figure even more troubling is the amount of leverage found in the real estate market.  Many of these loans will default yet banks are maintaining the notion that at some point par value will be reached; for many the par value scenario is the worst case they have mapped out, and this is highly optimistic.  We have created a real estate Frankenstein that now has a mind of its own and will do everything it can to stay afloat going forward, even at the expense of the real economy.  In fact, the real estate monster thinks it is the economy.

There is a flip side to housing values falling which seems to be ignored since most of the mainstream rhetoric is guided by the FIRE (finance, insurance, and real estate) experts.  The most obvious benefit is those looking to buy their first home don’t need to put themselves into so much debt that they risk their entire financial future for a home.  The next subtle change is the amount of money diverted from housing related spending to other sectors of the economy.  This last change will take time to sink into the overall economy but there is definitely a benefit of moving away from an economy highly dependent on Wall Street finance and real estate.

If we look at the current nationwide situation, the amount of distressed loans is stunning:

I think that the above disaster in distressed mortgages is causing very little reaction because we have somehow adapted to the current shocking situation.  Over 10 percent of all U.S. mortgages are at least one payment behind and another 4 percent are already in the process of foreclosure.  This figure is incredible given the entire mortgage market is made up of over 51 million active mortgages.  In 2007 if you were to tell someone that prices in California would fall by 50 percent (even 10 percent) many would have ignored you.  Now, it is standard practice for the market.

As a country we are much too reliant on real estate.  Commercial real estate is the next tragic saga in the RE bubble bursting with prices already falling by 42 percent.  At one point, CRE values in the U.S. were up to $6.5 trillion (now this was a rough generous estimate at the time).  Today, CRE values are down closer to $3 to $3.5 trillion; this is roughly the same amount of CRE loans outstanding.  This has pushed defaults through the roof:

The exponential rise is cause for serious concern.  There is little energy or political will to bailout the enormous CRE market.  This probably won’t stop the Federal Reserve and U.S. Treasury to game the system yet again and put taxpayers on the hook.  They created this massive monster and now want the public to fight it off with pitchforks.  The above chart is disturbing and the amount of bank failures we are seeing is directly related to the above trend.  Many smaller banks are deep in the trenches with CRE debt and much of this is now going bad.  How many strip malls do we really need?  Maybe having 20 Taco Bells in a one mile radius probably isn’t such a good idea.  Many of the commercial projects were built in the anticipation of sky high residential prices to justify their absurd underwriting expectations.  The above results have no excuse and are largely a reflection of massive delusional speculation in all things real estate.

Now that expectations are coming more into line and the fantasy world of Alt-A, subprime, and option ARM loans are behind us, most people have to qualify to get a loan with actual real income which many are now finding less of.  Banks lending virtually all government money, are now beholden to stricter (aka basic due diligence) in order to give out loans.  Yet if we look at the negative equity situation, the real estate monster grows scarier:

Over 20 million mortgage holders are underwater.  It is amazing that a few years ago, Deutsche Bank estimated that at the ultimate trough of the housing market, nearly half of all mortgages would be underwater.  This “doomsday” scenario seemed extremely farfetched.  Today, another 10 percent nationwide price decline would put us there.  Even without prices declining further, having 20 million Americans underwater is not a good sign going forward.  You figure over 7 million people are one payment behind or in foreclosure.  But what about the other 13 million?  This enormous group is basically a large cohort of renters but in a worse financial situation.  They are stuck.

Continue reading…DoctorHousingBubble

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, foreclosure, foreclosures, Real Estate, shadow foreclosures0 Comments

Short sales not immune to debt collectors

Short sales not immune to debt collectors

DinSFLA here…take note on this “Banks usually have four years in which to file a deficiency judgment, but they can sell it to a third-party collection agency — “and the collection firms can chase you down for 20 years,” Davis said.”

This being said any of these fool third-party collection agencies that DO NOT do their due diligence will be in a world wind of a surprise! Now not only are they buying of fraud they will have a hard time getting repaid on fraud!

They are going to try to suck the living day lights out of us…Do NOT let your guard down.

ORLANDO, Fla. – July 6, 2010 – With more than half of the Central Florida’s homeowners owing more for their homes than the properties are worth, the question for some has become: How do I get out of this?

Of all the existing-home sales reported by Realtors in the core Orlando market in May, 23 percent were short sales. They are called “short” sales because the sales price come up “short” of, or less than, the amount owed on the mortgage.

What these homeowners, whose loans are “underwater,” may not realize is that they could successfully complete a short sale of their house but then face a lawsuit from their lender for not paying off the entire loan, a shortfall known as a “deficiency.”

At particular risk of being hit with such a debt judgment are owners of second homes and investment properties, homeowners who haven’t faced any kind of financial hardship, and owners who have a second mortgage.

“That’s going to be a huge problem moving forward in the next few years,” said Orlando lawyer Matt Englett, who specializes in home foreclosures. “These people who use Realtors to advise them on the transactions can end up facing deficiencies, and the deficiency notes will go to third-party collections agencies, and they will start suing and progressively pursuing those people.”

Homeowners have several options if they wish to avoid getting calls and lawsuits from debt collectors.

In a mortgage document called the “payoff letter,” a lender may include a blanket provision stating that it reserves the right to sue the seller at any time for unpaid mortgage debt. At the very least, Englett said, sellers need to make sure they do not give lenders that right.

Some lenders, particularly smaller ones, have been willing to state just the opposite — that they will not pursue any mortgage debt from the seller, he added.

Simply asking the lenders to cooperate by removing any wording about collections isn’t enough, Englett said. The seller is usually faced with building a case that details errors and omissions made by the lender in its mortgage documents, to gain leverage and force the lender to forgive the debt.

A new option that emerged in June is a federal program that calls on banks to forgive some of the mortgage debt of certain, qualified short-sale sellers. To qualify, sellers must:

Meet the criteria of the federal government’s Home Affordable Modification Program.

Have the house as their primary residence.

Face a financial hardship, and their mortgage payment must be more than 31 percent of their gross income.

The new program makes short sales a good option for homeowners facing a financial hardship, though it’s not meant for homeowners who can afford their mortgage but want to walk away from an upside-down loan, said Frank Rubino, vice president of the Chase Homeownership Center in Orlando.

“It’s not right. It’s not moral. It’s not the right thing to do,” Rubino said. “Why should customers look to the bank to substantiate a loss for the house they bought? … If they bought the house and sold it for $100,000 more than they paid, they wouldn’t share those profits with the bank.”

The decision of whether to pursue a former homeowner for outstanding debt varies from mortgage servicer to mortgage servicer, Rubino said, and can hinge on such things as whether the customer mismanaged his or her finances, Rubino said.

Sellers with a second mortgage face particular challenges if they try to walk away from a short sale without any remaining debt.

Jennifer Davis, a real estate agent for Lifestyles Home Sales Inc. of St. Cloud, said she recently almost lost a sale because of outstanding debt the seller owed on the house. Fortunately, she said, the buyer wanted the house badly enough to cover the outstanding note.

Banks usually have four years in which to file a deficiency judgment, but they can sell it to a third-party collection agency — “and the collection firms can chase you down for 20 years,” Davis said.

In cases where the seller has a second mortgage or can’t qualify for the federal programs, Davis said, she usually directs them to a real estate lawyer and a tax adviser.

Copyright © 2010, The Orlando Sentinel, Fla., Mary Shanklin, Knight Ridder/Tribune Business News. Distributed by McClatchy-Tribune Information Services.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, deficiency judgement, deficiency judgment, foreclosure, foreclosure fraud, foreclosures, mortgage modification, walk away1 Comment

DIRTY, ROTTEN, SCOUNDRELS

DIRTY, ROTTEN, SCOUNDRELS

Kick a family when they are down why dontcha! Lets see them try to ring my bell or climb my fence…they might encounter a huge pair of enormous 4 legged puppies for trespassing!

Finding Gold in Them Thar Foreclosures

With eye for bargains and stomach for risk, investors sift through wreckage of housing bust

By ADAM GELLER AP National Writer
July 3, 2010 (AP)



GILBERT, Ariz. — If we’re going to search for gold in the wreckage of the mortgage crisis, then 6:57 a.m. in front of 1009 W. Juanita Ave. is as good a time and place as any to start.

The Cooper Ranch subdivision, tucked behind an industrial park 25 minutes from downtown Phoenix, is just beginning to stir. But when Casey Doran pulls his pickup to the curb, the tan stucco house has already seen a steady trickle of visitors. From under the visor of his ball cap, Doran sizes up the first foreclosure of the day.

“Still occupied,” he says, nodding to a green plastic tag hanging from the meter by the garage, proof that someone’s paying the electric bill. He leans on the bell; when no one answers, he tries the door. The house resists his advances, leaving Doran squinting into the darkness behind the blinds. He tugs on the back gate, peering over the wall into a yard corralling chest-high tumbleweeds.

“He isn’t much of a grass person,” Doran says, snapping pictures with his iPhone.

In a little more than three hours, the intelligence Doran gathers in these 10 minutes of reconnaissance will be put to the test. That’s when 1009 W. Juanita and nearly 600 homes like it are scheduled for auction to the highest bidder.

Maybe, with bidding set to open at $105,000, the house is a bargain.

Or maybe it’s a mistake, waiting to drag an investor under.

Either way, there’s little time to ponder this 1,631-square-foot gamble. But there will certainly be other chances.

After all, 50,000 homes clog the county’s foreclosure pipeline and more are added every day. But before you jump to buy, know that you’ll have plenty of company.

At the top of the housing boom, certain cities drew investors like magnets. In Phoenix, speculators bought up houses, largely with borrowed cash, trying to take advantage of fast-rising prices. Those who didn’t sell in time were stung when the market collapsed.

But early last year, a new crop of investors — many buying with their own cash — ventured in, sensing opportunity. In the months since, the share of homes bought by investors at daily auctions has multiplied more than fivefold.

“These are unique times. Very, very unique times,” says Tom Ruff of The Information Market, which analyzes Valley real estate data. “I think the best way to describe it is the Wild West.”

The scene unsettles some, wary that investors could dump homes if the market weakens or take advantage of individual buyers or renters. Others are troubled at banks’ willingness to settle for less at auction rather than give more substantial concessions to homeowners locked into crushing loans. But something’s got to be done with all these overmortgaged, underappreciated houses.

“The investors are a tool to help get those properties moved into new hands,” says Diane Drain, a Phoenix bankruptcy attorney and real estate trustee. “At this point, the dam is so broken. How do you stop the flow? I don’t know how you do it other than one little stick at a time.”

___

During the boom, Steve Vadas sold title insurance on thousands of homes. Now, with business dried up, he’s landed back at the job that gave him his start — in the shadow of the Maricopa County Courthouse, auctioning foreclosures.

It’s hard to recognize the place.

In the old days, Vadas stood on the courthouse steps reading lists of foreclosed homes aloud and almost always only to himself, eyed like a crazy man by the occasional passer-by.

“Nobody would bid on them,” he says. “I literally was reading them to the air.”

No more. On a May afternoon nine years later, a crowd of 60 churns the plaza outside the courthouse doors in downtown Phoenix. Dressed in board shorts and wraparound shades, they scan pages-long printouts of houses and talk furtively into headsets to unseen investors. Five auctioneers compete simultaneously for their attention.

Once Vadas, who conducts sales for Trustee’s Assistance Corp., handled 60 to 70 foreclosures a month. Some days now, he and fellow auctioneers run through that many in an hour or two.

Even in good times, some homeowners failed to pay their mortgages, requiring a process for lenders to recoup losses. In Arizona, they’re called trustee’s sales, and in a steady economy most were little more than formalities. Foreclosed homes were usually offered for the amount owed and, with few bidders, nearly always claimed by the bank holding the loan.

But that was before home prices here plunged by half. Before debt-saddled homeowners started abandoning houses in the dark. Before lenders who never intended to get into the real estate business ended up holding the keys.

In the last year, they’ve done what any merchant with few customers and shelves full of stuff of sometimes dubious quality would do to avoid taking delivery of even more: Slash prices. Cash only. No guarantees. No refunds.

“It’s capitalism at its finest — or at its worst,” Vadas says.

This is not a game for the faint of heart or wallet. Stories circulate of buyers who thought they were getting a deal only to realize they’d bought a second loan, when the first loan holder gets the house. Or of investors who bought a house with a tenant who wouldn’t leave — or had already left, taking cabinets, toilets, even the pipes.

“You can tell all the newbies,” says Randy Lewis, who runs bidding service 3rd Party Buyer LLC, scanning the crowd clumped around the auctioneers. “They’re all up at the front, but not bidding.”

But plenty of others have jumped in, posting the required $10,000 cashier’s check and trying to leverage bits of insider knowledge, marketplace dynamics and a tolerance for risk. The result is a furious chase repeated daily — Lewis calls it “chaos by statute” — that begins as soon as the opening bids are posted for the following morning’s sales.

“You’ve heard of storm chasers?” he says. “We’re deal chasers.”

___

On to the third house of Doran’s morning: 1508 E. Weathervane Lane. Opening bid: $130,100.

A competitor exits the gate of the white stucco house just as Doran, who scouts homes for bidding service Posted Properties.com, pulls up. “It’s vacant,” he says. “You can go inside.”

Just past the pool — veined with cracks that formed as it stood empty under the desert sun (note to investor: could cost $5,000 to repair) — the sliding door yields easily. The place is empty of life except for a moldy loaf of raisin bread in the refrigerator.

On the back door, someone has left a memento of affection painted on the glass: “You rock. I love you.”

Doran takes a few notes about this house, bought in December 2006 for $300,000. On the way out, he runs into a woman from next door. She tells him the former residents have been “stealing” fixtures out of the house for the past month.

“Hopefully soon we’ll have a new neighbor,” she says.

___

By the summer of 2008, Trish Don Francesco was ready to try the Phoenix housing market again.

Her company, Metropolitan Marketing & Management, had spent the boom assembling portfolios of houses for wealthy investors. In 2004, she urged her clients to sell, believing the market had peaked. Instead, most held tight as prices continued to crest, then plunged.

Now, though, seeing houses listed for less than $100,000, she was intrigued. On a Saturday morning that August, Don Francesco and a few of her employees drove to the Camelback Inn to check out an auction of houses.

“It was like being in a candy store,” says daughter Makayla Don Francesco, also a broker. Houses were going for as little as $55,000. In a few hours, Metropolitan snapped up 17.

“I said to myself either the world is coming to an end or we’re going to be really, really rich. I don’t know which,” Trish Don Francesco recalls.

The company found even more enticing deals buying homes directly out of foreclosure. In the months since, Don Francesco has bought nearly 350 homes, spending a few thousand dollars to fix each one and then rent them, often to families who surrendered a previous home to foreclosure. Over the next year, it plans to increase its stake to 1,500 houses, buying at trustee’s sales on behalf of investors looking for a steady income stream from rents.

But investors are far from the only players in this game, which trades in the currency of information as much as cash.

It begins each weekday afternoon, when trustees post the opening bids for as many as 1,000 houses. By the next morning, bidders have whittled down their list of targets. Around dawn, Doran and other property runners zigzag across the Valley to check out houses, starting with those slated for 10 a.m sale. They report back to companies like Posted Properties, which charges investors a fee to bid and buy at auction.

Other drivers work for wholesalers, who buy up armfuls of homes and flip them to investors, often within hours, for a quick profit. Still other homes are bought by fix-and-flippers, who renovate and resell for a short-term gain, or investors who buy to rent and hold for a few years.

When a family buys a house, it’s all about emotion. But foreclosure investing requires setting feelings aside, players say, and making a cold calculation on square footage, location and fixup costs. On the courthouse steps, bidders trade bets with seeming disinterest. When the price goes too high, they walk away.

But to say that all emotion is shelved overlooks the X factor drawing bidders. It’s the edginess of the gamble and the pursuit of a deal.

Doug Hopkins, Posted Properties’ CEO, recalls the morning he tagged along with a friend for his first trustee’s sale 11 years ago.

“I went down there and saw what houses were selling for and I had never known that that existed,” Hopkins said. “I remember coming out of there and calling my dad and I said, ‘My life just changed.'”

___

At first, Doran isn’t sure what to make of today’s fifth house: 6233 S. Parkside Drive. Opening bid: $67,000.

Fresh oil stains the floor of the carport. A package from Amazon.com sits unclaimed on the step. No one answers.

It’s an open secret in Phoenix foreclosure investing that, facing a door that won’t budge, some runners simply drill the lock.

“Applicant will be required to do what it takes to get the maximum amount of information for our investors,” one bidding service stipulated in a recent ad for drivers on Craigslist. “This is not for a meek person. Must be an outgoing, forward and fearless individual.”

To Doran, whose real estate license lets him key in to some houses, the tactics of a few tar his trade unfairly. But at Parkside, the back door slides open without resistance. Whoever lived here is gone, leaving only a copy of “Dear Tooth Fairy” on a windowsill. Doran scans the kitchen.

“I’m always afraid I’m going to find a dead body in one of these,” he says, chuckling as he reaches for the refrigerator handle.

Not yet. But he has found cats and lizards floating in abandoned pools, and once, a dead puppy. A few weeks ago, at an empty house in Chandler, he found an Alaskan husky, very much alive, left behind with a bag of dog food.

At this stop, though, the biggest complications are a roof that needs replacing and the house’s size — it has just two bedrooms and a single bath, limiting its appeal.

“Somebody will buy it … for a rental,” he says.

___

During the boom, borrowing was relatively quick and easy. But buying at a trustee’s sale demands payment in full by 5 p.m. the next day, without an appraisal. Forget about asking a bank for a loan.

That’s where Scott Gould comes in.

At 8:40 a.m. on a Wednesday, Gould tilts back in a black office chair, waiting for two phones and a Blackberry to ring so he can put his money to work. Dressed in shorts, sneakers and white golf shirt, he looks more like the gymnast he once was than a banker. On the wall hangs a gift from his wife — a “loan shark” assembled from Monopoly money.

Gould is a “hard money” lender, by some account’s the valley’s busiest. Last year he loaned investors the cash to buy 1,300 homes at trustee’s sales, at an annualized interest rate of 18 percent, although most repay within a few months. Call Gould for a loan and the answer comes back in 20 minutes, once his staff reviews sales of comparable homes.

“The most important thing at the end is, do we think the guy can make money,” he says.

Gould started managing money at 11, already earning the equivalent of a teacher’s paycheck mowing yards and house sitting. He jumped into lending after the Black Friday stock collapse in 1987, when the Phoenix real estate market was tanking. Today, at 52, he and his partners have $85 million in loans out and a goal of $700,000 in new deals each day.

The phone rings. A fix-and-flip investor asks Gould for his opinion about a house in Mesa.

“The inside, from what we could see, looked good. It smelled good,” the man says.

Gould is skeptical, noting the investor is relying on just one other recent sale to gauge value. He counsels bidding $1 over the asking price and no more.

The phone rings again.

“Good morning, Brad. I got a check sitting here hot for you,” Gould says.

This morning, though, is slow, with just three new loans for homes auctioned the previous day. But at the office of Metropolitan Marketing and Management, a few miles away, a new round of sales keeps Makayla Don Francesco’s ear to the phone.

In pursuit of homes that will rent easily with minimal maintenance, she bids only on those built in 1995 or later, between 1500 and 3300 square feet. A few other criteria narrow the day’s list of 618 scheduled sales to just 17 targets. Don Francesco pares the list to 9, eliminating any backing up to major roads or high-tension lines.

When the auctions begin, Metropolitan staffers on site are outbid on two houses and in the chaos, miss two more. But at the 10 a.m. sale, a house in Phoenix opens at $70,000 and Don Francesco grabs it for $72,300, before discovering it has two bedrooms and a den, limiting its appeal to family renters. Then, at the 11 a.m. sale, a house in Buckeye opens at $63,218 and she snags it for $66,000, despite uncertainty about whether it has three or four bedrooms.

“There’s a lot of risk and you are playing with somebody else’s money,” Don Francesco says. “Some days it is terrifying.”

But then she reminds herself that, at these prices, the deals may last for only so long.

___

It’s almost noon and this will be the 10th and final house of Doran’s morning: 2701 Val Vista Drive. Opening bid: $387,600.

“Holy moly,” he says, pulling in. The house is very big. So are the mounds of discarded mattresses and other garbage piled in the overgrown yard. Two cars sit in the driveway.

“It looks like they started on it and quit,” he says, pointing to a recently replastered wall painted in three different shades. He knocks on the back door, then the front. Not a sound. But the place is unlocked. Doran rolls his eyes and walks in.

“Somebody’s still living here,” he says, walking past dishes in the sink and rooms almost devoid of furniture. “This is odd as hell.”

At the living room, he stops and tilts his head. Music floats up from downstairs — and a pair of men’s voices. Doran takes one last picture, then moves quickly and quietly toward the door.

“Not worth getting shot over, I can tell you that,” he says.

___

By Thursday, workmen have ripped out and replaced the ceiling in the house on Weathervane that Doran checked out two mornings ago. And in a kitchen in Scottsdale, Neil Lende, a real estate agent who invests in houses given up for lost, is trying to decide where to begin.

The house, bought at a trustee’s sale Tuesday and paid for Wednesday with a hard money loan, has gold-tone ceiling fans and a “popcorn” ceiling that will have to go. The pool is so green with algae it might as well be bottomless.

It’s hardly a wreck. But in a valley full of empty houses, what makes this one — or any of the hundreds of others for sale on the courthouse steps — a singular opportunity?

It’s clear only when Lende opens the door to another investment in a subdivision called Paradise Manor, 10 minutes away

“When we first came to this one, this stuff was growing all the way out to here,” says Charlie Sugarman, project manager for Lende’s fix and flip business, pointing to shrubs that blocked the path to the door. Neighbors reported that the previous owner, a chiropractor, moved out in the middle of the night. Inside, Lende found the kitchen plastered with coffee grounds.

Now, the interior is repainted in silver sage, fitted with brushed metal door knobs. The kitchen cabinets, refinished in cream and mocha, snuggle against stainless steel appliances. A sign over the counter welcomes the next chef. “Live. Laugh. Love,” it says.

Lende paid $194,651 for the house in early March, then spent $35,000 to renovate. “We knew we could make it really cute,” he says.

The first weekend on the market, he had two offers. Tomorrow it goes to closing, sold to a retiree couple from New Jersey. For two months work — and risk — he’ll pocket a $40,000 profit.

But while the new owners know they’re buying a foreclosure, they almost certainly don’t realize the pipeline it has traveled.

“I don’t think they can envision it how it used to be, which is good,” Lende says. “Because this is the reality now.”

Adam Geller is a national writer for The Associated Press based in New York. He can be reached at features(at)ap.org.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in auction, Bank Owned, foreclosure, foreclosures1 Comment

Video: It’s time for banks to do more to help homeowners in foreclosure

Video: It’s time for banks to do more to help homeowners in foreclosure

This is exactly what is going on with these Scams. Just as in this post I made prior this homeowner tried to do all they can to work with their lender to get help, modify and pay them current market value. Instead they foreclosed.

In this case they owed about 300K, according to tax records LPS, yes Lender Processing Services inc. came in and purchased it for $74,100 at the auction. Now the  home is pending sale for $59K. Sold it for less in a matter of a month??? Okkkaaaay?

How does this make ANY kind of sense? I can only see it making FRAUD sense…these homeowners vouch not to give up contacted the listing agent about the scam as well as mentioning Law Offices of David J. Stern the foreclosing firm for the lender. This does not make ANY sense what so ever and we need to continue exposing this fraud!

David Lazarus June 24, 2010 | 10:56 pm Los Angeles Times

Consumer columnist David Lazarus says banks should end their one-size-fits-all policies and help more homeowners who are in foreclosure.

Take the Fontana woman he writes about In his latest column. She wasn’t obligated to meet the mortgage obligations her husband left when he was killed in a car accident. But she wanted to stay in the home and tried negotiating lower payments with the bank.

Should the bank do more to  help her?

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in auction, Bank Owned, conspiracy, CONTROL FRAUD, foreclosure, foreclosure fraud, foreclosures, mortgage modification, shadow foreclosures0 Comments

QUEENS have shadows too

QUEENS have shadows too

Now, if this is only a piece of the American Pie that was created…Imagine this is a fraction of the 8 million waiting in the shadow foreclosure inventory looming in the highest states such as Arizona, California, Florida etc. Sellers need to price their homes aggressively or risk losing to these shadows.

In my opinion what these banks are doing now is committing fraud. Why? Because they are not disclosing this inventory and are making loans to unsuspecting buyers when they know for a FACT the values are still heading south!

A Housing Price Collapse in Queens New York Is Almost Certain

Keith Jurow

Posted by Keith Jurow 06/21/10 8:00 AM EST

Many commentators continue to describe the housing market in Queens as surprisingly resilient.  Hardly any has warned of a possible collapse.  Is this a disservice to both sellers and buyers?  Let’s take a close look and see.

Introduction to the Queens Housing Market

The borough of Queens in New York City has a population of roughly 2.2 million.  For nearly a century, it has been the bastion of the middle class in the Big Apple.  To put things in perspective, you could have bought a nice two-story attached brick house in south Queens for $16,000 in 1950.  Twenty-five years later, the cost of this same house was still under $30,000.

That began to change as inflation soared into double digits in the late 1970s. At the start of the new millennium, the median price of home sales in Queens had climbed to roughly $168,000 according to trulia.com.  During the bubble years of 2003-2006, home sales soared in Queens and throughout New York City (NYC).  Prices really skyrocketed.

Between 1996 and 2006, the annual number of first lien purchase mortgages originated in NYC more than doubled.  Citywide, a record of more than 50,000 owner-occupied homes were sold in 2006.  That year, the median size of a first lien purchase mortgage climbed to $384,000 according to the Furman Center for Real Estate and Urban Policy.  That nice brick house in south Queens actually sold in 2005 for a whopping $360,000.

As we saw in a previous REAL ESTATE CHANNEL article, the mortgage problem was exacerbated by the growing use of piggyback second liens to cover the 15-20% of the purchase price which the first mortgage did not.  In 2006, 28% of all New York City buyers took out piggyback seconds.  The Furman Center found that 43% of purchasers with incomes from $100,000 to $150,000 used a piggyback second mortgage.

According to trulia, home sales in Queens soared to a record of more than 20,000 in 2005.  The following year, the median price of all existing homes sold reached roughly $500,000.

While most bubble housing markets weakened in 2006 and then plunged in 2007-2008, the NYC market remained relatively robust because of the roaring stock market.  But quite unnoticed, sales volume began declining.  After the stock market peaked in the summer of 2007, the housing market began to unravel.

The Looming Default Disaster in Queens

According to RealtyTrac.com, as of June 16 there were 9,054 Queens residences which the banks had placed into default since the middle of February 2009.  Of these, 2,550 have been in default for more than a year.  None has been foreclosed by the banks yet.  Every one of these owners who is occupying the property has been living basically rent-free since stopping the mortgage payment.

More than 4,000 of these homes have outstanding mortgage debts in excess of $400,000.  Over 2,500 have mortgage liens of more than $500,000.

When RealtyTrac is unable to obtain the outstanding mortgage debt figure, it lists the amount for which the owner is in arrears.  Here is the real shocker.  More than 3,500 properties have arrearages listed, some as high as $100,000.  Roughly 280 of these owners owe anywhere from $25,000 to $100,000 in delinquent mortgage payments.  Those with arrearages of roughly $100,000 have not paid a cent to the lender in about three years.  Nice deal isn’t it?  Let’s not feel too sorry for these poor folks.

Without a doubt, the word has spread throughout Queens that the banks are not foreclosing on owners who stop making mortgage payments.  It is not very surprising, then, that an incredible 11.2% of all borrowers are now delinquent in their payments by 60 days or more.  This figure comes from Trans Union, the credit-reporting firm, which puts out a quarterly mortgage delinquency study based on a database of 27 million anonymous credit reports.  That is up from only 7.2% a year earlier.  The chart below shows how the serious delinquency rate has skyrocketed in the last three years.

queens-mortgage-06212010-chart.jpg

How many delinquent owners are we talking about?  The borough has roughly 250,000 single-family homes and another 240,000 units in 2-4 family houses owned by investors.  Even assuming that roughly 1/3 of these owners are mortgage-free, at least 25,000 properties are seriously delinquent now.  We know from Core Logic’s monthly mortgage report that nearly all of these seriously delinquent borrowers will eventually default.  That is 25,000 additional properties which will eventually have to be foreclosed and repossessed by the banks.  Meanwhile, they are living rent-free and pocketing perhaps $3,000-$4,000 a month.  Investors who own 2-4 family houses may also still be collecting rent.  Sort of makes your blood boil, doesn’t it?

What About the Foreclosed Properties Owned by the Banks?

You would think that with so many delinquent and defaulted homeowners in Queens, there would now be a huge number of homes owned by the banks and sitting in their inventory (REOs).  Wrong.

RealtyTrac showed a total of only 1,389 homes in the banks’ repossessed inventory as of June 16.  Nearly 400 have an outstanding mortgage debt exceeding $500,000.  Dozens of these properties have been owned by the banks for more than two years.

You may have read something lately about how banks nationwide are unloading their REOs at a faster pace now.  Not in Queens.  RealtyTrac lists a total of 12 properties which the banks have up for sale now.  That’s right – 12.  Why only twelve?  Who knows?  The banks are clearly concerned that if they dump too many of their REOs onto a housing market that is now so thin, this will severely depress prices.  They would also have to write down the actual losses on their balance sheet.

What is the State of the Housing Market Now in Queens?

As of June 16, Trulia listed 12,777 properties for sale.  Of these, 672 were added in the previous seven days.  The average listing price was $438,000.

Are homes selling now in Queens?  Hardly.  According to MDA DataQuick, which culls its figures from county recorder offices, the median price of all new and existing single-family homes and condos sold in the first quarter of 2010 was $403,000.  That isn’t too bad a drop from the peak, right?  The problem is that only 1420 new and existing single-family properties were sold during this latest quarter.  That is an average of only 473 per month.  We are talking about a county with 2.2 million people and nearly 500,000 housing units (excluding multi-family apartment buildings).

By way of comparison, let’s take a look at Houston with a population slightly smaller than Queens.  According to the Houston Association of Realtors, sales of all existing homes in the Greater Houston area in May totaled 6,659.  Why such a difference?  Simple.  The median price of Houston sales was only $155,000.

With the market in Queens so awful, are home sellers cutting their asking price?  Not really.  Trulia reveals that only 24% of all homes listed there now have had the asking price dropped by the owner since being posted on the website.  That seems crazy, doesn’t it?  True, some of these owners are probably not what we might call serious sellers.  They don’t have to sell and are just “testing the waters.”

What about those who either really want to sell their home or are distressed and must sell the property?  Don’t they need to lower their asking price, perhaps substantially, in order to find a buyer?  Absolutely.

Even more important, what happens when the banks start putting into default the 25,000 seriously delinquent homeowners and foreclosing on the 9,000+ properties currently in default?  This overhang waits like a potential tsunami that we know will follow when an earthquake measuring 9.1 erupts underwater as it did in late 2004.

Sooner or later, the banks will have to begin whittling down the growing number of delinquent and defaulted properties in Queens.  What will happen to prices when the banks finally start to place this potentially enormous REO inventory on the market?  Simple.  Prices will plunge.  Make no mistake, it will be ugly.

Those who currently have their home on the market in Queens need to see what’s coming down the road.  If they refuse to lower their asking price substantially, they will almost certainly regret that decision in the next year or two.  Furthermore, prospective buyers probably ought to seriously consider whether waiting might be the more prudent course of action.

To a lesser extent, this analysis also applies to the three other outlying boroughs of Brooklyn, the Bronx, and Staten Island.

Posted in Bank Owned, concealment, conspiracy, CONTROL FRAUD, foreclosure, foreclosure fraud, foreclosures, Real Estate2 Comments

Statute of Limitations coming for Foreclosures?

Statute of Limitations coming for Foreclosures?

Mortgage Players Look to Soften Bill

By NICK TIMIRAOS JUNE 21, 2010 NYTimes

As Congress moves to finalize new financial regulations, the mortgage industry is working to soften a series of provisions that reshape how most Americans obtain home loans.

The provisions in the legislation seek to eliminate questionable practices that proliferated during the housing boom by outlining clear underwriting standards, holding lenders more responsible for loans, and changing the way loan originators are paid. In addition, consumers would get new rights to seek damages when the mortgage process goes awry.

New Rules Take Shape

Requirements in proposed legislation:

  • Lenders required to hold 5% of the loans they originate that are sold to investors as securities
  • Borrowers get greater protections when the mortgage process goes awry
  • Fees must be charged upfront or reflected in the mortgage interest rate, but not both

Changes wanted by mortgage industry:

  • Exception for “qualified mortgages” that meet certain underwriting standards
  • Lenders get greater protection from lawsuits if they satisfy tougher loan standards
  • Ability to charge fees upfront and to embed them in the mortgage interest rate

Industry officials are trying to limit their liability on new consumer-friendly provisions while pushing for greater flexibility on rules that aim to improve underwriting standards by forcing the original mortgage lender to keep a stake in the loan.

A panel of lawmakers reconciling the differences between the House and Senate bills is set to take up the mortgage provisions on Tuesday.

Both bills would require lenders to retain a 5% stake in loans that are bundled with others and sold in pieces to investors. The idea is that if lenders hold on to a stake, they are more likely to make sound loans.

Lenders want to secure a provision, included in the Senate bill, to exempt mortgages that meet certain underwriting standards from the risk-retention requirement that they keep 5% of loans they sell off. Such loans would have to fully document a borrower’s income and assets and couldn’t include features such as interest-only payments, negative amortization or balloon payments. Loans would also have to cap certain mortgage-origination fees at 3% of the loan.

Risk-retention rules are likely to raise the costs of making loans because banks will be required to hold more capital, a particular challenge for smaller lenders.

While consumer groups generally support exceptions for certain loans perceived as safer, some analysts say the provision would effectively promote certain loan types over others.

“One thing that disappoints me is that it revives the fetish of the traditional, fixed-rate, 30-year loans … without examining any of the risks of those loans,” such as higher interest-rate costs, said Todd Zywicki, a professor of law at George Mason University in Fairfax, Va.

Already, both bills would limit the ability of mortgage lenders to charge borrowers fees if they refinance or pay off their loans early.

The proposed legislation would also require lenders to ensure that borrowers can repay their loans and to prove that any refinancing provides a “net tangible benefit” to the borrower.

The industry wants to limit lenders’ legal liability when they make loans that meet the new standards. “If you comply with the provisions in the law…the borrower shouldn’t be able to challenge you later on,” said Glen Corso, managing director of the Community Mortgage Banking Project, which represents independent nonbank mortgage lenders.

Consumer groups oppose efforts to weaken the ability of borrowers to take legal action if they believe lenders have run afoul of the new rules.

Lenders also want to limit the amount of time that borrowers can dispute a foreclosure if they later find that their loan didn’t satisfy the new standards. Right now, the bill doesn’t include a statute of limitations on those claims. Consumer groups say time limits shouldn’t be added because some loans could contain features that don’t take effect for several years. But lenders say that a loan that defaults long after its origination isn’t likely to fail because of underwriting defects.

All together, the measures should lead banks to become more diligent about documenting a borrower’s income and assets. While that will curtail the abuse of “liar’s loans” that saw many borrowers and brokers report false incomes on loan applications during the past decade, the tougher standards could make it harder or more expensive for self-employed borrowers to get a loan.

Another key provision in the bill would change the compensation model for loan originators and mortgage brokers to prevent them from steering borrowers into loans with a higher rate. The bill would bar lender-paid commissions based on the rate or type of loan; origination costs would have to be paid upfront or over the life of the loan in a higher rate, but not a mix of both.

Brokers say that the rule would make it harder for them to compete with banks and that it would reduce competition, raising costs for consumers. “Most mortgage brokers will have to charge their fees upfront, which means the competitive landscape just shifted to banks and lenders,” said Roy DeLoach, chief executive of the National Association of Mortgage Brokers.

Consumer advocates say the changes will make it easier for borrowers to shop for loans and compare prices.

The new provisions will shift the burden of proof “from the consumers having to protect themselves from unreasonable fees to the providers of services justifying their costs,” said Barry Zigas, director of housing policy for the Consumer Federation of America.

“The whole market should be much safer now,” said Julia Gordon, senior policy counsel at the Center for Responsible Lending.

Meanwhile, brokers and real-estate-industry lobbyists want to relax new home-valuation rules imposed last year to ensure appraiser independence. Those rules bar mortgage brokers and loan officers from selecting appraisals by requiring the use of third-party appraisal management firms. Many banks, which own or have stakes in those firms, oppose the effort to alter the rules, as do consumer groups that say any attempt to weaken them could lead to appraisal fraud.

But brokers and real-estate agents say the rules have produced unrealistic appraisals from individuals who aren’t familiar with specific neighborhoods. Brokers say a new system should be created that allows them to order appraisals without being able to select the actual appraiser, and that consumers should be free to use an appraisal ordered by one lender even if they decide to get a loan from a different lender.

Write to Nick Timiraos at nick.timiraos@wsj.com

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, foreclosure, foreclosure fraud0 Comments

Banks Getting Worried About Rising Challenges to Foreclosures?

Banks Getting Worried About Rising Challenges to Foreclosures?

As many have seen SFF was the first to expose this Bogus Assignment scandal via a YouTubeVideo.

Via: NakedCapitalism by Yves Smith

I’m not quite certain how to calibrate journalism American Banker style, but I found this article, “Challenges to Foreclosure Docs Reach a Fever Pitch,” (sadly, subscription only, e-mailed by Chris Whalen), to be both interesting and more than a tad disingenuous.

The spin starts with the headline, it’s a doozy. The “challenge to foreclosure documents” message persists throughout the article, and it’s perilously close to a misrepresentation:

Because the notes were often sold and resold during the boom years, many financial companies lost track of the documents. Now, legal officials are accusing companies of forging the documents needed to reclaim the properties.

On Monday, the Florida Attorney General’s Office said it was investigating the use of “bogus assignment” documents by Lender Processing Services Inc. and its former parent, Fidelity National Financial Inc. And last week a federal judge in Florida ordered a hearing to determine whether M&T Bank Corp. should be charged with fraud after it changed the assignment of a mortgage note for one borrower three separate times…

In many cases, [plaintiff attorney] Kowalski said, it has become impossible to establish when a mortgage was sold, and to whom, so the servicers are trying to recreate the paperwork, right down to the stamps that financial companies use to verify when a note has changed hands…

In a notice on its website, the Florida attorney general said it is examining whether Docx, an Alpharetta, Ga., unit of Lender Processing Services, forged documents so foreclosures could be processed more quickly.

“These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the demands of the institution that does not, in fact, have the necessary documentation to foreclose according to law,” the notice said..

Yves here. Let’s parse the two messages:

1. Note how the problem is presented as one of “documentation”, implying it is not substantive.

2. Because everyone knows mortgages were sold a lot, (which is clearly mentioned in the piece) the idea that some somehow went missing (or as the piece suggests, the “documentation” is missing even though the parties are presented as if they know who really owns the mortgage) is presented as something routine and not very alarming.

OK, let’s dig a little deeper. Even though the media refers to “mortgages”, under the law there are two pieces: the note, which is the indebtedness, and the mortgage (in some states, a “deed of trust”), which is the lien against the property. In 45 of 50 states, the mortgage follows the note (it is an “accessory”) and has no independent existence (as in you can’t enforce the mortgage if you don’t hold the note. You need to have both the note and the mortgage. This is a bit approximate, but will do for this discussion).

Now, the note is a bearer instrument if it is endorsed in blank (as in signed by current owner but not specifically made payable to the next owner, which was common for notes that were sold). It isn’t some damned “documentation”. Remember the days of bonds, when you had the real security, or stock certificates? This is paper with a hard monetary value, the face amount of the note (as long as it’s current, anyhow).

So now go back and look at that little extract. This “oh business was so busy we mislaid a lot of paper” isn’t some mere filing error. It’s like saying you left an envelopes full of cash in the subway on a regular basis. In the late 1960s back office crisis on Wall Street, when the volume of stock trading overwhelmed delivery and settlement infrastructure, a LOT of firms went out of business, in the midst of a bull market.

OK, now the second item with the article finesses is the sale of mortgages versus the role of the servicer. For the overwhelming majority of first mortgages, and I believe about 50% of second mortgages and HELOCs, the servicer is working for a trust that holds the notes pursuant to a securitization.

The standard documentation for a RMBS calls for the trust to gave a certification at closing that it has all the notes and it has to recertify that it has all the assets at two additional future dates, usually 90 days out and a full year after closing.

So this “notes were flyin’ around, yeah we lost track” is presumably impossible if we are discussing securitizations. Or put it another way: it means the fraud here is much more extensive than servicers making up documents ex post facto. It means the fraud extended back into how the securitization took place (as in what investors were told v. what actually happened).

And before you say these reports are exaggerated, my limited sample and my discussions with mortgage professional (not merely plaitiff’s attorneys but mortgage industry lifers) suggests the reverse.

But what about the second claim in the headline, that this activity has reached a “fever pitch”? Wellie, that’s a distortion too, perhaps to energize those who would be enraged by visions of deadbeat borrowers staying in houses due to fancy legal footwork. Trust me, there are FAR more overextended borrowers living in “free” housing due to banks slowing up the foreclosure process than due to legal battles.

First, the story is ONLY about Florida, despite the hyperventilating tone. And Florida is way ahead of other jurisdictions. There is a group of lawyers that are sharing G2 on these cases, and there are also a fair number of sympathetic judges. Note some states (Minnesota in particular) have both extremely pro bank laws and a business friendly bar. So it’s misleading to make sweeping generalizations; you need to get a bit more granular, which this article fails to do.

Second, the “fever pitch” headline also conveys the impression that this is an epidemic, ergo, these cases are widespread. While it is hard to be certain (this activity is by nature fragmented), at this point, that looks to be quite an exaggeration. The vast majority of borrowers, when the foreclosure process moves forward, don’t fight. They lack the energy and the resources. And when the borrower prevails, the case is typically dismissed “without prejudice”, meaning if the servicer and trustee get their act together, they can come back to court and try again.

Most of the battles against foreclosure appear to fall into one of two categories:

1. The borrower can afford the mortgage, but has fallen behind due to what he thinks is a servicing snafu. I can give you the long form, but the way servicers charge extra fees is in violation of Federal law and is designed to put the borrower on a treadmill of escalating fees. And they do not typically inform the borrower that fees have compounded until 6 or more months into the mess, and by that time, the arrearage can be $2000 or more. The borrower is unable to fix the servicing error, the fees continue to escalate, and the house goes into foreclosure.

2. The borrower has filed for a Chapter 13 bankruptcy, but the trustee is fighting the bankruptcy stay and trying to seize the house.

So why this alarmist American Banker article? Even if the numbers of successfully contested foreclosures are not (yet) large, the precedents being set are very detrimental to the foreclosure mills, the servicers, and the trustees. Moreover, the costs of fighting these cases can quickly exceed the value of the mortgage. So it would not take much of an increase in this trend to wreak havoc with servicer economics, and ultimately, the losses on the trust, particularly on prime mortgages, where the loss cushions were considerably smaller than on subprime.

I suspect the real reason for alarm isn’t the “fever pitch,” meaning the current level of activity. It’s that a state attorney general is throwing his weight against the servicers, and what he is uncovering is every bit as bad as what the critics have been saying for some time. That may indeed kick up anti-foreclosure efforts in states with open-minded judges to a completely new level.

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© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, bogus, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, insider, investigation, Real Estate, securitization0 Comments

OMG!! Want to leave your mortgage behind and make $10K in less than 30 days?

OMG!! Want to leave your mortgage behind and make $10K in less than 30 days?

6/9/2010 by DinSFLA

This week Housingwire wrote an article about how Bank of America is putting short sales ahead of REO’s. Matt Vernon, who is the short sale and REO executive at BOF made this statement.

“We’re going to do everything possible to liquidate property prior to foreclosure,” Vernon said. “REO will still be available, but we will do everything we can to do short sales.” Vernon said the goal is to get as close to market value as possible, or even over market value. “Short sales is not an investment strategy to get homes on the cheap,” he said.

He added that agents who want a part of that market need to make short sales a major part of their business strategy through 2010 and into 2011.

Does he even have the slightest clue as to what these short sales have done to many agents? Well let me explain in one word…FORECLOSURE!

Why? You may ask. Simply because BOF like many others took their sweet ole, no good, money hungry ass time, I mean 6-12 months to get approvals and by this time anxious buyers lost their financing not once but maybe 3-4 times.

Last week The Wall Street Journal got an overwhelming viewer response on David Streitfeld’s article Owners Stop Paying Mortgages, and Stop Fretting, which leads me to my point.

Are banks growing desperate and concerned that if people begin to walk a way, this will turn them into toast? I’m afraid so.

Well to make another point. A friend of mine in New York got this letter (below) from Wells Fargo asking them if they want to leave their existing mortgage behind? In return Wells with their “direct transfer option” will let you walk a way with $10,000.00! Basically sign, transfer over the title.

Only there is 34 problems, you see there is a video going around that shows how to Cash Out Before You Dash Out…34 ways to make $39K before giving back the house!

I think Wells Fargo needs to step it up a little. Perhaps they lost your note!

Wells Fargo Letter:

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Bank Owned, deed in lieu, foreclosure, foreclosures, wells fargo0 Comments


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