Posted on 13 May 2011.
FOR IMMEDIATE RELEASE:
MAY 13th, 2011
Kevin Harvey, 1st Assistant Register
To: Members of the Media
Fr: Massachusetts Register of Deeds John O’Brien and North Carolina Register of Deeds Jeff Thigpen
Re: FDIC Chair Shelia Bair concurs with O’Brien and Thigpen that damages to consumer’s “has yet to be quantified”
This story has to be told: No settlements with the Big Banks until we know the “extent of the problem” and until the amount of exposure is “quantified”.
FDIC Chairman Sheila Bair
The head of the Federal Deposit Insurance Corp. is warning that flaws may have “infected millions of foreclosures” and questioned whether other regulators’ inquiries into problems at the nation’s mortgage-servicing companies have been thorough enough.
“We do not yet really know the full extent of the problem,” FDIC Chairman Sheila Bair said Thursday in written remarks submitted to a hearing of the Senate Banking Committee. “Flawed mortgage-banking processes have potentially infected millions of foreclosures, and the damages to be assessed against these operations could be significant and take years to materialize.”
Federal and state officials launched numerous investigations last autumn after revelations that, to process foreclosures, banks used “robo-signers” who didn’t review documents prepared by their colleagues. Banking regulators’ have said their reviews of a sample of 2,800 foreclosure cases have found a small number of improper foreclosures.
Acting Comptroller of the Currency John Walsh said last month that the problems were limited in scope. They include cases that shouldn’t have gone forward under a law blocking foreclosures on military personnel, ones in which the borrower was in bankruptcy and cases in which borrowers were already on the verge of having their loans modified.
But Ms. Bair, who is departing her position in July, argued that other regulators likely missed homeowners who should have been provided loan assistance but who were improperly denied such help. The FDIC, she said, has found a “not insignificant” number of such cases. “There needs to be much more aggressive action,” she told lawmakers.
Under consent orders that 14 banks and thrifts reached with regulators in March, financial institutions are required to hire a consultant to review their foreclosures over the past two years to identify any borrowers who were harmed by foreclosure-processing problems.
Ms. Bair, however, questioned whether those reviews will truly be independent. Such consultants “may have other business with [banks] or future business they would like to do with them,” Ms. Bair said. “This is a huge issue.”
Federal Reserve Chairman Ben Bernanke, in response to questions from lawmakers at the hearing, didn’t address this criticism directly, but reiterated that regulators plan to fine banks as a result of the inquiry into foreclosure problems. He noted that the foreclosure crisis is “at some level” a problem of bank regulation, but noted it is “also a macroeconomic problem.”
Ms. Bair also raised the possibility that banks may be forced by government-controlled mortgage giants Fannie Mae and Freddie Mac to buy back more defaulted loans.
Fannie and Freddie have been pressing banks to do so, and numerous investors have filed lawsuits with similar demands. “A significant amount of this exposure has yet to be quantified,” she said in her prepared remarks.
REGISTERS O’BRIEN & THIGPEN SAY “PUT THE BRAKES ON ANY SETTLEMENT WITH THE BIG BANKS … REGISTERS OF DEEDS NEED TO BE AT THE TABLE”
Southern Essex County (MA) Register of Deeds, John O’Brien and Guilford County (NC) Register of Deeds, Jeff Thigpen, are today publicly asking Iowa’s Attorney General, Tom Miller, who has been coordinating the National Association of Attorneys General (“NAAG”) investigation into the banks’ improper mortgage dealings to stop settlement negotiations until there is a full accounting of the damage that the bank’s practices have inflicted upon the land recordation system and consumers chains of title across the nation and have again asked for the Registers of Deeds to have a seat at the negotiation table.
O’Brien and Thigpen, wrote to Miller in early April, asking that the Registers of Deeds be represented at any settlement talks. They have not heard back from Miller, and they find that very disturbing. “We represent Main Street, in contrast to Wall Street, and that constituency needs to be heard” said O’Brien.
Register O’Brien, who is leading the nationwide effort against the Mortgage Electronic Registration System (“MERS”) and its member banks said, “We need to take a long hard look at the damage that these banks have caused, not only to our economy but also to people’s chains of title. There can be no settlement for pennies on the dollar.” O’Brien points to MERS and their failure to record documents in the local registry of deeds in order to avoid paying billions of dollars in recording fees, thereby corrupting the chains of title of hundreds of thousands of homeowners across the country, as well as the alleged fraud associated with the robo-signing, as reasons for putting on the breaks. “That is why it is so important that the Registers of Deeds be brought into the room. We need to bring our knowledge of the land recordation system and consumer’s problematic chain of title issues to the table.” Common sense mandates that if a bridge collapses and there is a meeting to re-build that bridge, that the structural engineers must be invited to the table. “Why the Registers of Deeds have not been involved in these negotiations is puzzling” according to O’Brien and Thigpen
Thigpen’s office sent Attorney General Miller and Federal Regulators 4,500 potentially fraudulent and/or forged documents recorded in his Registry by Doc X. Doc X is owned by Lender Processing Services, which was acting on behalf of Wells Fargo, Bank of America, and MERS, among others. “I am but one county, however I feel confident based upon my research that this is a disaster of epic proportions, for homeowner’s chains of title in the United States. As a result, it needs to be clearly established that citizens can no longer be harmed by the reckless disregard that the major banks and MERS have had for the American consumer and the integrity of public recording offices. People need to be assured that their ownership rights are secure and protected, that people who sign legal documents are who they say they are, and that there is transparency and fair dealing by all. I don’t think we are there yet.” stated Thigpen.
In addition, O’Brien and Thigpen are concerned about the reports that Miller has received hundreds of thousands of dollars in campaign contributions from banks, finance, insurance, and real estate contributors since he announced that he was leading the NAAG investigation. O’Brien and Thigpen said, “Without questioning Millers integrity, Miller should consider either returning the contributions or voluntarily stepping aside so that there would not be even the slightest appearance of a conflict of interest.”
These Registers want to know “Why is there such a rush to have a settlement? “How can the consumers be fully protected when the extent of the damages are still unknown?”
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