It may take at least two months to reach a final agreement, said the person, who declined to be identified because the talks are private. An accord remains out of reach because states want principal reductions for borrowers, which is more than banks agreed to in deals reached with U.S. regulators last week, said Allison Schoenthal, a lawyer at Hogan Lovells in New York.
“Principal reductions I don’t think are going to be agreed to by banks, and I don’t think the banks see a need for a penalty when, in their view, they haven’t done anything wrong,” said Schoenthal, who represents lenders and servicers and isn’t involved in the talks.
Take this home for example. It was originally sold for $289,000.
Prior to Final Judgment, property had two (2) assignments of mortgage for two entities same robo-signer for both via MERS.
At auction it was sold for a MAJOR discount at approx. 75% off. to Indymac via LPS Minnesota address in 2010. We know Indymac has been shut down way before this time.
Why couldn’t they work a deal like this when this person whom I personally know tried over and over to get a modification AT THE TIME?
They had a good job then and still have a good job today.
So why do they not want to work with the borrowers and reduce the principal to reflect today’s REAL and TRUE appraisal of the property?
Make sure you follow the transactions to understand what happened and why it makes no sense where this goes.
Now Here comes more funny business:
Still following?
Property was Quit Claimed/Transferred To Freddie Mac for $100.00 (prepared by David Stern) but consideration shows only $10.00.
Property then sold for $3900.00 more 13 days later $78,000
SAME day flipped for $150,000
Previous records are all gone [compare both images]
Senator Carl Levin (D-MI) and former Goldman Sachs Mortgages Department head Daniel Sparks, Senate Governmental Affairs Subcommittee on Investigations hearing, April 27, 2010
Dylan Ratigan with special guest New York Times’ Louise Story, discussing the 600+ page report uncovering Goldman Sachs scheme to defraud investors. According to Bloomberg, The U.S. Justice Department and regulators will have to determine whether employees and executives of Goldman Sachs Group Inc. violated any laws when they traded securities tied to the housing market and testified to Congress about the transactions, Senator Carl Levin said.
While the attorneys general proposed many similar terms last month, banking regulators didn’t include any requirements for lowering mortgage debt. That may hinder Iowa Attorney General Thomas J. Miller as he leads a group of state officials working with the administration to require lenders to evaluate loan cuts for some borrowers whose homes are worth less than their mortgages.
“I have always been pretty skeptical about the ability of principal reductions to get you much,” said Mark A. Calabria, director of financial-regulation studies at the Cato Institute, a public-policy research group in Washington. “I think we will look back and say this was the death knell.”
Question: Wonder what the regulators thought of when they watched 60 Minutes broadcast of LPS, DOCX and Servicer fraud on national tv with over 12 million viewers?
Just see what the number one popular post has been on this site since the airing of it or do a simple google search like 60 Minutes Docx or 60 Minutes LPS and you’ll see SFF is the first site that comes up. We’re no fools and believe me the entire globe has tuned in, including the regulators.
The nation’s 14 largest mortgage firms must compensate wronged homeowners after federal bank regulators determined the companies broke federal and state laws by improperly foreclosing on an incalculable number of distressed borrowers. The agencies announced such penalties Wednesday, the first in what is likely to be a series of enforcement actions targeting the country’s biggest banks and costing them billions.
Lenders like Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial systematically broke rules and took shortcuts when foreclosing on homeowners last year, the regulators said. Their three-month review launched after documents and videos of so-called robo-signers — people who signed thousands of foreclosure documents a day without reading them or knowing what was in them — surfaced, leading the biggest banks to halt home seizures.
Bank examiners found the firms employed practices that “failed to conform to state legal requirements.” In other words, they broke the law.
The 14 largest U.S. mortgage servicers must pay back homeowners for losses from foreclosures or loans that were mishandled in the wake of the housing collapse, according to a consent decree released today.
The agreement between the servicers and U.S. regulators imposes more substantial penalties than early reports of the deal indicated. It could also help the U.S. Justice Department determine the size and scope of any future fines for the flawed practices, regulators said.
The banks didn’t admit or deny regulators’ findings, according to the orders.
From Fed Press Release:
The Federal Reserve will closely monitor progress at the firms in addressing these matters and will take additional enforcement actions as needed.
In addition to the actions against the banking organizations, the Federal Reserve on Wednesday announced formal enforcement actions against Lender Processing Services, Inc. (LPS), a domestic provider of default-management services and other services related to foreclosures, and against MERSCORP, Inc. (MERS), which provides services related to tracking and registering residential mortgage ownership and servicing, acts as mortgagee of record on behalf of lenders and servicers, and initiates foreclosure actions. These actions address significant compliance failures and unsafe and unsound practices at LPS and its subsidiaries, and at MERS and its subsidiary. The action requires LPS to address deficient practices related primarily to the document execution services that LPS, through its subsidiaries DocX, LLC, and LPS Default Solutions, Inc., provided to servicers in connection with foreclosures. MERS is required to address significant weaknesses in, among other things, oversight, management supervision, and corporate governance. The LPS action is being taken jointly with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Office of Thrift Supervision, while the MERS action is being taken jointly with those agencies and the Federal Housing Finance Agency.
The Federal Reserve Board based its enforcement actions on the findings of the interagency reviews of the major mortgage servicers, LPS, and MERS. A summary of the findings from the reviews of the mortgage servicers is available in the Interagency Review of Foreclosure Policies and Practices,which is simultaneously being released by the Federal Reserve Board and the other agencies.
The rule of law is not even worth 20 basis points. That’s the ultimate message in a recent paper by Charles Calomiris, Eric Higgins, and Joseph Mason evaluating the proposed AG mortgage servicing settlement. Calomiris et al. estimate that the settlement will raise mortgage costs at least 20bps, and they think that’s too much.
Recognize what they’re really saying: that 20-45bps is too high a price to pay for the rule of law. They value the rule of law at less than 20bps. At present conversion rates, that’s about 30 shekels of silver.
The whole Calomiris et al. document is rather strange, as it’s hard to do any serious evaluation of the settlement without knowing the terms. We’ve seen a proposed servicing standards term sheet from the AGs and we’ve seen a CFPB analysis of disgorgement of wrongful profits and the costs of potential principal reductions, but it’s way premature to attempt any sort of real evaluation of a settlement. Unless, of course, the goal is not a serious evaluation of a settlement, but an attempt to forestall a settlement. Which is what this paper is.
It’s going to get really interesting to see how this all plays out with the AG’s role.
According to the New York Times, the the servicers, which violated state and local laws and regulations governing foreclosures, are agreeing to improve their methods in numerous ways. They will be required to have more layers of oversight and proper training of their foreclosure staff. The oversight will extend to third party groups, including the law firms that do much of the actual work of eviction.
[…]
The investigators reviewed the policies and procedures, structure and staffing of the top servicers, as well as their use of law firms and other third parties. They examined 2,800 foreclosures in various stages.
The banks examined were Bank of America, Citibank, GMAC, JPMorgan Chase, Wells Fargo and nine others. The examination found critical deficiencies and shortcomings in foreclosure preparation and oversight, resulting in violations of state and local foreclosure laws, regulations and rules.
The servicers will probably be assessed fines at a later point.
O. Max Gardner III, a lawyer and expert on foreclosure cases handled in bankruptcy courts, said that the OCC must have used an unfairly narrow definition of a wrongful sale.
He said that in most of the hundreds of cases he has handled, banks misstated the amounts homeowners actually owed, failed to record or properly allocate mortgage payments, and tacked on thousands of dollars in unauthorized and excessive fees.
“We see a problem with the dollars and cents in almost every single bankruptcy case that I file,” Gardner said.
We give up…you dead beats really caught us this time. We can’t take any more punishment. You’re destroying our BONUSES!! We just want you ouuut…ouuut…OUT!
Us EMPERORS really don’t have any clothes.
Does any of this make sense? NO. Why don’t we just help you stay in your home? Why not give a principal reduction or anything else other but… like the price we would sell your home for at short sale?? Usually 50% or more of the amount owed.
According to secret spies (joke this has not been confirmed) rumor has it that the five largest US mortgage servicers were told this week at a confidential meeting with regulators to consider paying delinquent borrowers up to $21,000 each as part of a broader settlement of the foreclosure quandary.
The main regulator for the largest U.S. banks is preparing to break from state authorities and settle with lenders over their foreclosure practices, according to a source familiar with the process, dashing hopes for a comprehensive settlement
[SNIP]
The Office of the Comptroller of the Currency, impatient with infighting over the structure and shape of a coordinated settlement, is preparing to move on its own set of fines and business-practice fixes for banks, according to a source, who was not authorized to speak publicly.
The OCC’s settlement could come in the next couple weeks, the source said.
The Honorable Timothy Geithner Secretary of the Treasury Department of the Treasury 1500 Pennsylvania Avenue, N.W. Washington, D.C.
The Honorable Edward DeMarco Director (Acting) Federal Housing Finance Agency (FHFA) 1700 G Street, N.W. 4th Floor Washington, DC 20552
The Honorable Sheila Bair Chairman Federal Deposit Insurance Corporation 550 17th Street N.W. Washington D.C., DC 20006
The Honorable Ben S. Bernanke Chairman Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue N.W. Washington, DC
The Honorable Mary L. Schapiro Chairman Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549
The Honorable John Walsh Comptroller of the Currency (Acting) Administrator of National Banks 250 E Street, S.W. Washington, DC 20219
Dear Secretary Geithner, Chairman Bair, Chairman Shapiro, Acting Director DeMarco, Chairman Bernanke and Controller Walsh:
We are writing to urge that any exception to the credit risk retention requirements of section 941 of the Dodd-Frank Act include rigorous requirements for servicing securitized residential mortgages.
The Act requires that securitizers retain five percent of the credit risk on mortgage-backed securities. The requirement is the subject of a study by Christopher M. James published by the Federal Reserve Bank of San Francisco dated December 13, 2010, and entitled “Mortgage-Backed Securities: How Important Is ‘Skin in the Game’?”, which finds that the requirement will have the intended effect of reducing “moral hazard” and significantly reducing the loss ratios on mortgage-backed securities.
The Act provides for an exception, however, for “qualified residential mortgages” and for other “exemptions, exceptions, and adjustments” to the risk-retention requirement. We strongly urge that you use great care in allowing any exception to the risk retention requirement, and that you be vigilant in assuring that any exception not defeat the purpose of the requirement. Recent experience in financial regulation has been that seemingly modest, reasonable exceptions have swallowed the rules and allowed abusive practices to continue unabated. In considering any requested exception under section 941, please remember that the advocates for rule-swallowing exceptions to other financial regulation have not been entirely candid with regulators or legislators on the likely effect of those exceptions.
The rules adopted pursuant to section 941 must, of course, require rigorous underwriting standards for “qualified residential mortgages” or any other mortgages excepted from the risk retention requirement, but underwriting requirements are not enough. The rules must also address the servicing of securitized mortgages. Much of the turmoil in the housing market, which is largely responsible for the painfully slow recovery, is the result not just of poorly underwritten mortgages, but of conduct by mortgage servicers.
We direct your attention to the “Open Letter to U.S. Regulators Regarding National Loan Servicing Standards” dated December 21, 2010, and signed by 51 people with extensive knowledge of mortgage servicing (the “Rosner-Whalen letter”). We strongly urge that you consider closely the recommendations included in that letter.
The Rosner-Whalen letter makes sensible recommendations regarding the treatment of payments by homeowners, “perverse incentives” in servicer compensation, mortgage documentation, and foreclosure forbearance during mortgage modification efforts.
We especially urge that any exception require that servicers modify mortgages pursuant to established criteria to avoid foreclosure where possible. The statute governing “Farmer Mac” mortgages provides a useful example of such criteria. See 12 U.S.C. 2202a (“Restructuring Distressed Loans”). Foreclosures are catastrophic for homeowners, holders of mortgage-backed securities, the housing market, and the economy as a whole.
The conduct of servicers is largely responsible for much unnecessary hardship. A requirement that servicers modify mortgage according to established criteria to avoid foreclosure can avoid that hardship in the future. Neutral, established criteria will also avoid “tranche warfare” between classes of investors.
We also especially urge that any rule for securitized mortgages require that servicers not be affiliated with the securitizer. There are obvious potential conflicts of interest, and no apparent countervailing justification. At a recent hearing of the House Financial Services Committee, several witnesses from major servicers were unable to offer any advantage in being affiliated with securitizers, other than to offer “full service” to customers. That justification is entirely unpersuasive. Homeowners may select the bank with which they have a credit card or a checking account, but they have no say in who services their mortgage.
In fact, community banks and credit unions have been reluctant to sell the mortgages that they originate to “private-label securitizers” for fear that the mortgages will be serviced by an affiliate of a bank, and the servicer will use that relationship to “cross market” other banking services to the homeowner. Requiring that servicers be independent of banks, therefore, would advance the goal of increasing the availability of credit on reasonable terms to consumers.
The Dodd-Frank Actives provides you ample authority to reform servicing practices, and regulation of mortgage securitization will be ineffective without such reform.
We the undersigned write to you regarding the urgent need to develop national standards for originating, selling and servicing mortgage loans. The private residential mortgage securitization market is frozen as to new issuance. The housing market is suffering from a dearth of credit, which is causing a serious lack of confidence among potential homebuyers.
Widely reported servicer fraud, whether in the foreclosure process or in the systematic assessment of illegal fees against homeowners, is also a serious problem. It’s bad for investors, it’s bad for homeowners, and it’s ultimately bad for a sustainable residential mortgage securitization market and the U.S economy. Fraud is also a symptom of the disease affecting our broader financial system, namely the lack of accountability in the loan servicing industry and the resulting impairment of the value of securities sold to investors.
Wednesday, December 1, 2010
09:30 AM – 01:00 PM
538 Dirksen Senate Office Building
The witnesses for Panel I will be: Ms. Phyllis Caldwell, Chief, Homeownership Preservation Office, United States Department of the Treasury; The Honorable Sheila C. Bair, Chairman, Federal Deposit Insurance Corporation; The Honorable Daniel K. Tarullo, Governor, Board of Governors of the Federal Reserve System; Mr. John Walsh, Acting Comptroller of the Currency, Office of the Comptroller of the Currency; and Mr. Edward DeMarco, Acting Director, Federal Housing Finance Agency. The witnesses for Panel II will be: Mr. Terry Edwards, Executive Vice President, Credit Portfolio Management, Fannie Mae; Mr. Donald Bisenius, Executive Vice President, Freddie Mac; Mr. Tom Deutsch, Executive Director, American Securitization Forum; and Professor Kurt Eggert, Professor of Law, Chapman University School of Law.
Individuals with disabilities who require an auxiliary aid or service, including closed captioning service for webcast hearings, should contact the committee clerk at 202-224-7391 at least three business days in advance of the hearing date.
TESTIMONY OF
JOHN WALSH
ACTING COMPTROLLER OF THE CURRENCY
before the
SUBCOMMITTEE ON HOUSING AND COMMUNITY OPPORTUNITY
of the
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
November 18, 2010
Statement
Introduction
Chairwoman Waters, Ranking Member Capito, and members of the Subcommittee, I appreciate this opportunity to discuss recently reported improprieties in the foreclosure processes used by several large mortgage servicers and actions that the Office of the Comptroller of the Currency (OCC) is taking to address these issues where they involve national banks. The occurrences of improperly executed documents and attestations raise concerns about the overall integrity of the foreclosure process and whether foreclosures may be inappropriately taking homes from their owners. These are serious matters that warrant the thorough investigation that is now underway by the OCC, other federal bank regulators, and other agencies.
<SNIP>
A key objective of theMERS examination is to assess MERS corporate governance, control systems,
and accuracy and timeliness of information maintained in the MERS system. Examiners assigned to MERS
will also visit on-site foreclosure examinations in process at the largest mortgage servicers to
determine how servicers are fulfilling their roles and responsibilities relative to MERS.
We are also participating in an examination being led by the FRB of Lender
Processing Services, Inc., which provides third-party foreclosure services to banks.
We expect to have most of our on-site examination work completed by mid to late
December. We then plan to aggregate and analyze the data and information from each of
these examinations to determine whether or what additional supervisory and regulatory
actions may be needed. We are targeting to have our analysis completed by the end of
January.
We recognize that the problems associated with foreclosure processes and
documentation have raised broader questions about the potential effect on the mortgage
market in general and the financial impact on individual institutions that may result from
litigation or other actions by borrowers and investors.
US Regulators Examining Two Mortgage Processing Firms
By Alan Zibel, Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- Federal bank regulators are conducting examinations of two companies that banks use to process foreclosures, amid concerns that banks cut corners on thousands of foreclosure documents, Acting Comptroller of the Currency John Walsh said Wednesday.
Walsh, in remarks prepared for delivery Thursday, said his agency is examining Reston, Va.-based Mortgage Electronic Registration Systems in conjunction with the Federal Reserve, the Federal Deposit Insurance Corp. and the Federal Housing Finance Agency.
That company, known as MERS, lets lenders package and sell mortgages without recording each transaction with county property offices.
It has come under fire from critics, who say MERS doesn’t have the right to act as the legal representative of the mortgage owner in foreclosure cases.
The Honorable Timothy F. Geithner .The Honorable Sheila Bair
Secretary . Chairman
Department of the Treasury . Federal Deposit Insurance Corporation
1500 Pennsylvania Avenue, . NW 550 17th Street, NW
Washington, DC 20220 . Washington, DC 20429
The Honorable Ben S. Bernanke . The Honorable Mary Schapiro
Chairman . Chairman
Board of Governors of the Federal Reserve System .Securities and Exchange Commission
20th Street and Constitution Ave, .NW 100 F Street, NE
Washington, DC 20551 Washington, DC 20549
The Honorable John G. Walsh .The Honorable Gary Gensler
Acting Comptroller of the Currency .Chairman
Office of the Comptroller of the Currency Commodity Futures Trading Commission
250 E St. SW . 1155 21st St. NW
Washington, DC 20219 .Washington, DC 20581
The Honorable Ed DeMarco .The Honorable Debbie Matz
Acting Director .Chairman
Federal Housing Finance Agency .National Credit Union Administration
1700 G Street, .NW 1775 Duke Street,
Washington, DC 20552 .Alexandria, VA 22314-3428
Dear Secretary Geithner and members of the Financial Stability Oversight Council (FSOC),
The FSOC is tasked with ensuring the financial stability of the United States, which includes identifying and addressing possible systemic risks. There is a well-documented wave of foreclosure fraud sweeping the country that presents such a risk. Bank of America and JP Morgan Chase have both suspended foreclosures in 23 states where that fraud could be uncovered and stopped by the courts. Connecticut has suspended foreclosures.
I write to encourage the FSOC to appoint an emergency task force on foreclosure fraud as a potential systemic risk. I am also writing to ask the members of the FSOC to use their regulatory authority to impose a foreclosure moratorium on all mortgages originated and securitized between 2005-2008, until this task force is able to understand and mitigate the systemic risk posed by the foreclosure fraud crisis.
So far, banks are claiming that the many forged documents uncovered by courts and attorneys represent a simple ‘technical problem’ with foreclosure processes. This is not true. What is happening is fraud to cover up fraud.
The mortgage lending boom saw the proliferation of predatory lending and mortgage fraud, what the FBI called at the time ‘an epidemic of mortgage fraud.’ Much of this was lender-induced.
When lenders – many of whom are now out of business – originally lent money to borrowers, they often did so knowing that the terms of the loans could not possibly be honored. They sought fees, not repayment. These lenders put people in predatory loans, they induced massive amounts of fraud, and Wall Street banks misrepresented these loans to investors when they moved through the securitization chain. They were stealing money from investors, and from homeowners.
Obviously these originators and servicers didn’t keep good records of who owed what to whom because the point was never about getting paid back, it was about moving as much loan volume as possible as quickly and as cheaply as possible. The banks didn’t keep good records, and there is good reason to believe in many if not virtually all cases during this period, failed to transfer the notes, which is the borrower IOUs in accordance with the requirements of their own pooling and servicing agreements. As a result, the notes may be put out of eligibility for the trust under New York law, which governs these securitizations. Potential cures for the note may, according to certain legal experts, be contrary to IRS rules governing REMICs. As a result, loan servicers and trusts simply lack standing to foreclose. The remedy has been foreclosure fraud, including the widespread fabrication of documents.
There are now trillions of dollars of securitizations of these loans in the hands of investors. The trusts holding these loans are in a legal gray area, as the mortgage titles were never officially transferred to the trusts. The result of this is foreclosure fraud on a massive scale, including foreclosures on people without mortgages or who are on time with their payments.
The liability here for the major banks is potentially enormous, and can lead to a systemic risk. Fortunately, the Dodd-Frank financial reform legislation includes a resolution process for these banks. More importantly, these foreclosures are devastating neighborhoods, families, and cities all over the country. Each foreclosure costs tens of thousands of dollars to a municipality, lowers property values, and makes bank failures more likely.
I appreciate your willingness to assess possible systemic risks to the country, and would again encourage you to suspend foreclosures until this problem is understood and its ramifications dealt with.
![[VIDEO] Sen. Levin Grills Goldman Sachs Exec On “Shitty Deal” E-mail](https://stopforeclosurefraud.com/wp-content/themes/gazette/thumb.php?src=wp-content/uploads/2011/04/goldman_sachs_641693a1.jpg&w=100&h=57&zc=1&q=90)
Recent Comments