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Tag Archive | "lenders"

Debtor’s prison 2.0: Jail for delinquent homeowners?

Debtor’s prison 2.0: Jail for delinquent homeowners?


HSH-

Readers of Victorian novels know what debtor’s prison is–a scabrous place where distressed maidens, handsome heroes and pitiable children who owe as little as 60 cents are locked up until their debts are paid. The U.S. abolished federal imprisonment for unpaid debts in 1833, and today, most of us are pretty sure that we can’t be sent to the pokey for blowing off a creditor.

We’d be wrong.

Creditors work the system to jail debtors

While we can’t be sent to a federal prison for ignoring bills, many states allow citizens to be popped into state or local lockups for unpaid debt. Savvy collection agencies use this process to do an end run around the Fair Debt Collection Practices Act. Here’s how it works:

  • The collection agency sues the debtor, often in small claims court, with perhaps only a mailed summons (legal in some states, Illinois for example) or, worse, an imaginary notice referred to as “sewer service”
  • The debtor tosses the paper threat unread or misunderstands its implications. The debtor automatically loses the case because he doesn’t show up in court. He’s ordered to pay the collection agency, and the judge issues a arrest warrant for failing to appear and/or make the court-ordered payments
  • Mr. Debtor is dragged out of a PTA meeting on the outstanding warrant and goes to jail
  • He makes bail, which is (amazingly!) set at the exact amount owed
  • The bail is turned over to the creditor. Taxpayers foot the bill for arresting and jailing the “evildoer”
  • If unable to come up with the money owed, Mr. Debtor rots in jail. According to a Minnesota Star Tribune article, an Illinois man was sentenced “to indefinite incarceration” until he paid his $300 lumber yard debt

What about mortgage lenders?

[…]

[HSH FINANCIAL NEWS BLOG]

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CoreLogic’s New Credit Score Exposes Even More of Your Financial Life – NYTimes.com

CoreLogic’s New Credit Score Exposes Even More of Your Financial Life – NYTimes.com


NYTIMES-

There’s no hiding now.

Anyone who has recently applied for a mortgage knows that lenders are already looking much more closely at your financial affairs. But soon, they’ll be able to easily delve into the deepest recesses of your financial life, accessing information that never before appeared on your credit report.

[NEW YORK TIMES]

image: smallbiztrends

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Low Mortgage Rates Insufficent, Lenders Cry Foul Because of Repurchase Bad Mortgages from Fannie Mae and Freddie Mac

Low Mortgage Rates Insufficent, Lenders Cry Foul Because of Repurchase Bad Mortgages from Fannie Mae and Freddie Mac


Unreal and they wonder why anyone would do business with these fools. Perhaps the market won’t turn around because many not all lenders did fraudulent activities with these loans.

Seems they are trying to go back to the easy billions they are used to making.

They aren’t billionaires because they were hard working or smart :)

BLOOMBERG-

Government efforts to make lenders pay for soured mortgages may be keeping potential borrowers from record-low interest rates, slowing home sales and refinancing as banks tighten standards to avoid more demands for refunds.

Lenders are insisting on higher credit scores and more documents than required by the Federal Housing Administration and government-backed Fannie Mae and Freddie Mac. Quicken Loans Inc. and Vision Mortgage Capital are among firms saying they are increasing scrutiny of would-be borrowers in response to pressure to cover losses incurred on U.S.-backed housing debt.

“You’ve got to take measures now to protect yourself,” John B. Johnson, chief executive officer of Birmingham, Alabama- based MortgageAmerica Inc., said during a panel discussion this month. Demands that lenders repurchase bad mortgages from Fannie Mae and Freddie Mac are “casting a pall over the market. I fear that it will face a much longer recovery because of this.”

[BLOOMBERG]

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Re-Wind | Judges to weigh mortgage document destruction

Re-Wind | Judges to weigh mortgage document destruction


Any follow up to this story from back in January 2011?

By Scot J. Paltrow

WASHINGTON | Sun Jan 23, 2011 2:50pm EST

WASHINGTON (Reuters) – Federal bankruptcy judges in Delaware are due to hold separate hearings Monday on requests by two defunct subprime mortgage lenders to destroy thousands of boxes or original loan documents.

The requests, by trustees liquidating Mortgage Lenders Network USA and American Home Mortgage, come despite intense concerns that paperwork critical to foreclosures and securitized investments may be lost.

A series of recent court rulings have increased the importance of original loan documents, holding that they are essential for investors to prove ownership of mortgages and to have the right to foreclose.

In the Mortgage Lenders case, the U.S. Attorney in Delaware has formally objected to the requested destruction because loss of the records “threatens to impair federal law enforcement efforts.”

The former subprime lender shut down in February 2007. In a January 6, 2010, motion, Neil Luria, the liquidating trustee, asked Bankruptcy Judge Peter J. Walsh for permission to destroy nearly 18,000 boxes of records now warehoused by document storage company Iron Mountain Inc.

Luria stated that destruction is necessary to eliminate $16,000 per month in storage costs as he disposes of the last assets of the bankrupt company.

In the American Home Mortgage case, the liquidating trustee, Steven Sass, has asked Bankruptcy Judge Christopher Sontchi to approve destruction of 4,100 boxes of loan documents stored in a dank parking garage beneath the company’s former headquarters in Melville, Long Island.

[REUTERS]

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In Shift, Prosecuters Are Lenient as Companies BREAK the LAW

In Shift, Prosecuters Are Lenient as Companies BREAK the LAW


“Traditionally, a bank would tell the Department of Justice when an employee engaged in crimes, but what do you do when the bank itself is run by a criminal enterprise?” said Solomon L. Wisenberg, former chief of a Justice Department financial institutions fraud unit.

NYT-

As the financial storm brewed in the summer of 2008 and institutions feared for their survival, a bit of good news bubbled through large banks and the law firms that defend them.

Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.

Continue reading [THE NEW YORK TIMES]

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Tennessee BK Trustee Says In 60 Cases This Year, Lenders Couldn’t Produce Original Note

Tennessee BK Trustee Says In 60 Cases This Year, Lenders Couldn’t Produce Original Note


SHOW ME THE NOTE!!

Bizjournals Nashville-

Federal legislation introduced last week is giving credence to a battle being fought in Middle Tennessee by bankruptcy trustee Henry “Hank” Hildebrand.

The Bill can be found in the link below…

VT Senator Patrick Leahy Introduces Bill To Fight Creditor Fraud In Bankruptcy Courts

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THEY ONCE WERE LENDERS – Understanding government’s failure to stop bankers OR scammers from destroying homeowners.

THEY ONCE WERE LENDERS – Understanding government’s failure to stop bankers OR scammers from destroying homeowners.


via Mandelman Matters-

Preface…

Sit down and relax… you’re going to need a comfortable chair.  But, I promise you… it’ll be worth it.

In the fall of 2008, news stories about “scammers” taking advantage of homeowners at risk of foreclosure started appearing frequently in the media.  I remember watching a prime-time national news magazine type program, I think it was 20/20, that was airing a story that featured a sleazy looking middle-age man in Denver, hurriedly walking from a small, strip mall store front to his car, his hand covering his face, as a reporter tried to ask him questions that he obviously did not plan to answer.

The story involved a company that had charged a handful of homeowners several thousand dollars up front to help them negotiate with their banks to get their mortgages modified.  The core issue being raised by the show’s host was that the homeowners had been victims of a scam because, as a couple of the homeowners interviewed were saying, their loans had not yet been modified.

I remember wondering, to begin with, how in the world such a story had become the subject of a national news magazine television program.  I mean, “Three homeowners get ripped off by small business in Denver,” is not usually the sort of event that makes national headlines.  The implication being made was that this case was emblematic of a more widespread problem, but nothing further was offered in the way of proof… no statistics, no additional facts… just statements about how homeowners should NEVER pay anyone up front to help them negotiate with their bank over a loan modification because they were “scammers.”


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HUFFPOST | Fed Official Calls For Major Foreclosure Reforms

HUFFPOST | Fed Official Calls For Major Foreclosure Reforms


.

WASHINGTON — A top federal regulator told bankers on Friday that a major investigation into Wall Street’s foreclosure system has revealed a “broken” process that takes advantage of homeowners, further intensifying the debate over regulatory remedies to potential foreclosure fraud.

Mortgage companies have been accused of submitting fraudulent paperwork in the foreclosure process, prompting a brief suspension of foreclosures by several major servicers in the fall. This spectacle has undermined public faith in President Barack Obama’s signature foreclosure-relief effort, the Home Affordable Modification Program, which relies on servicers to implement all of its critical components. The National Consumer Law Center estimates that half of the foreclosure cases it takes on are driven by improper actions by mortgage servicers, rather than fundamental problems with a borrower’s ability to pay off a mortgage.

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Are Realtor Class Actions Against Servicers Next On The List?

Are Realtor Class Actions Against Servicers Next On The List?


“Even the processor at the lender – Flagstar Bank – she thought, ‘Hey, you got an offer full price, we’ll get the foreclosure stopped; we’ll make it go away; we’ll have a sale.’ She calls me back and says, ‘sorry.’”

Realtor, home seller baffled when bank rejects its own offer

By Dan Tilkin KATU News and KATU.com Staff

Story Published: Feb 5, 2011 at 12:57 AM PST Story Updated: Feb 5, 2011 at 1:21 AM PST

VANCOUVER, Wash. – Stacy Baker fought for two years to sell her father’s house and to keep it from being auctioned off, but lost the fight even after her real estate agent said an offer was made to the bank that met its own conditions.

Baker’s father was 61 when he succumbed to complications from a heart transplant, and she said her father probably realized “it was the wrong decision after he bought it.”

Baker’s real estate agent, Aaron Signor, first tried to sell the house for about what was owed, but at $179,000 it didn’t sell. Over the following months, they lowered the price and got an offer at $134,000.

But Flagstar Bank, which services the mortgage on the house, rejected the offer, saying the house was worth $150,000.

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US judge temporarily delays loan document shredding

US judge temporarily delays loan document shredding


Mon Jan 24, 2011 1:57pm EST

* Two defunct lenders seeking to destroy boxes of records

* One judge temporarily blocks document destruction

* In separate hearing, destruction partially allowed

* Rulings come amid wide concerns of missing loan docs

By Scot J. Paltrow

WILMINGTON, Del., Jan 24 (Reuters) – A U.S. bankruptcy judge temporarily blocked bankrupt subprime lender Mortgage Lenders Network USA from destroying 18,000 boxes of original loan files after federal prosecutors said documents in them may be needed as evidence in more than 50 criminal investigations.

In a hearing Monday before U.S. Bankruptcy Judge Peter J. Walsh, a representative from the Delaware U.S. Attorneys’ Office said she did not know details of any of the investigations.

But she said prosecutors and FBI offices around the country had requested time to access to the boxes and assess whether the contents contain needed evidence before the judge permits any destruction.

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Judges to weigh mortgage document destruction

Judges to weigh mortgage document destruction


By Scot J. Paltrow

WASHINGTON | Sun Jan 23, 2011 2:50pm EST

WASHINGTON (Reuters) – Federal bankruptcy judges in Delaware are due to hold separate hearings Monday on requests by two defunct subprime mortgage lenders to destroy thousands of boxes or original loan documents.

The requests, by trustees liquidating Mortgage Lenders Network USA and American Home Mortgage, come despite intense concerns that paperwork critical to foreclosures and securitized investments may be lost.

A series of recent court rulings have increased the importance of original loan documents, holding that they are essential for investors to prove ownership of mortgages and to have the right to foreclose.

In the Mortgage Lenders case, the U.S. Attorney in Delaware has formally objected to the requested destruction because loss of the records “threatens to impair federal law enforcement efforts.”

The former subprime lender shut down in February 2007. In a January 6, 2010, motion, Neil Luria, the liquidating trustee, asked Bankruptcy Judge Peter J. Walsh for permission to destroy nearly 18,000 boxes of records now warehoused by document storage company Iron Mountain Inc.

Luria stated that destruction is necessary to eliminate $16,000 per month in storage costs as he disposes of the last assets of the bankrupt company.

In the American Home Mortgage case, the liquidating trustee, Steven Sass, has asked Bankruptcy Judge Christopher Sontchi to approve destruction of 4,100 boxes of loan documents stored in a dank parking garage beneath the company’s former headquarters in Melville, Long Island.


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Judge holds bankers in contempt, threatens jail

Judge holds bankers in contempt, threatens jail


Jose Pagliery Daily Business Review January 13, 2011

Representatives from six major banks that skipped a hearing in a Miami condo association receivership case could face the wrath of Miami-Dade Circuit Judge Jennifer Bailey today if they fail to show up a second time.

The judge already has declared lenders that own or are foreclosing on units at Bird Grove Condo are on the hook for $105,999 in expenses for the court-appointed receiver for the association. She also held the six in contempt of court.

Bailey last month granted a request by the receiver, Miami attorney Lisa Lehner, to be paid for pulling the building — an asset for the foreclosing banks — back from the brink of condemnation.

When Lehner was appointed in March, garbage hadn’t been collected for weeks, electricity was about to be cut off, the building had no insurance, and an elevator was broken. She turned it around in months.

“They have property and collateral that if I walk away from turn into nothing,” Lehner said. “Here I am, sitting as their property manager, working for free after practicing law for 28 years. It’s just not fair.”

Lehner’s demand for $5,579 in expenses per unit went uncontested at a Dec. 1 show cause hearing where Bank of America was the only lender to send a representative. Missing were Flagstar Bank, GMAC, PNC Bank, SunTrust Bank, U.S. Bank and Wells Fargo.

In November, banks owned two units and were foreclosing on another 17 units in the 39-unit building at 2734 Bird Ave. between a gas station and a gallery. A one-bedroom, one-bath unit is listed for sale for $50,000. Bank of America filed nine foreclosure cases, followed by GMAC with five.

The six lenders were ordered to send non-attorney representatives to today’s hearing, when Bailey will discuss whether the banks also should be required to pay the receiver’s upcoming maintenance fees. Bailey’s order threatened to have bankers arrested if they didn’t show, and she warned, “You may be held in jail up to 48 hours before a hearing is held.”


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LENDERS TURNING TO OLD FASHION WAY OF “PAPER”, TURN AWAY FROM MERS

LENDERS TURNING TO OLD FASHION WAY OF “PAPER”, TURN AWAY FROM MERS


Thanks to a tip from California’s hero Brian Davies:

Lenders Turning Their Backs on MERS, Going Back to Paper

With more borrowers filing legal challenges to foreclosure, many mortgage lenders have turned their back on using MERSCORP Inc., which operates an electronic loan registry, to bring foreclosure actions. Some lenders are even returning to the old-fashioned, paper-based system of physically recording mortgage assignments at county recorder offices to ensure an unbroken chain of title.

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DEUTSCHE BANK TRUST NATIONAL LETTER TO SERVICERS REGARDING FORECLOSURES

DEUTSCHE BANK TRUST NATIONAL LETTER TO SERVICERS REGARDING FORECLOSURES


To: ALL HOLDERS OF RESIDENTIAL MORTGAGE BACKED SECURITIES FOR WHICH DEUTSCHE BANK NATIONAL TRUST COMPANY OR DEUTSCHE BANK TRUST COMPANY AMERICAS ACTS AS A SECURITIZATION TRUSTEE

FROM: DEUTSCHE BANK TRUST NATIONAL COMPANY, AS TRUSTEE AND DEUTSCHE BANK TRUST COMPANY AMERICAS, AS TRUSTEE (the “Trustee”)

Date: October 25, 2010


Re: Certain Allegations Regarding Loan Servicer Foreclosure Practices

[ipaper docId=40118047 access_key=key-ip8rlx60flja8xmwp35 height=600 width=600 /]

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VIDEOS YOU MUST WATCH! IT ALL BEGAN w/ MARCY KAPTUR

VIDEOS YOU MUST WATCH! IT ALL BEGAN w/ MARCY KAPTUR


Back in January 15, 2009 Marcy Kaptur told Foreclosure Victims “Don’t Leave your Home” because we will find out that they don’t have the mortgage.

“They can’t find the paper up there on Wall Street”

You can feel it through her passion she knows what she’s talking about. I have a feeling I may know who might be consulting her :)

Go to 3:05 where they clearly mention the problems with MERS

Barry Ritholtz goes at it with Diana Olick

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Posted in assignment of mortgage, foreclosure, foreclosure fraud, foreclosures, mbs, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., note, robo signers, scam, securitization, servicers, STOP FORECLOSURE FRAUD, Trusts, Wall StreetComments (1)

FL Defense Attorney Tom Ice Speaks to Reuters on the Foreclosure Mess

FL Defense Attorney Tom Ice Speaks to Reuters on the Foreclosure Mess


Florida lawyer warns of deepening foreclosure mess

By Kevin Gray

ROYAL PALM BEACH, Florida | Wed Oct 6, 2010 2:58pm EDT

ROYAL PALM BEACH, Florida (Reuters) – A Florida lawyer at the forefront of legal challenges against foreclosure practices by mortgage lenders says the U.S. housing morass will drag on due to difficulty in determining who owns home loans.

Questions over practices in foreclosure procedures across the United States have forced at least three banks to temporarily halt their proceedings and prompted a growing chorus of calls by lawmakers and regulators for an industry-wide moratorium until problems are resolved.

However, Tom Ice, whose law firm Ice Legal P.A. was among the first to get banking executives to acknowledge shoddy foreclosure practices, said it will be difficult for banks to fix all of the paperwork errors.

“This isn’t just a procedural technicality, it’s exposed the very problem at the heart of the securitization fiasco, which is no one knows who owns what,” he said in an interview on Tuesday.

A record 1.2 million U.S. homes are expected to be taken over by banks this year, up from 1 million last year and 100,000 in 2005, real estate data company RealtyTrac Inc. says.

Faced with a rising tide of foreclosures, lenders employed so-called “robo-signers” — middle-ranking banking executives who signed thousands of affidavits a month claiming they were knowledgeable of the cases.

However, some lenders, prodded by legal challenges, now say officials were not aware of details in all of the cases and vow to resubmit them. It is unclear how many cases are involved but it is believed to be in the tens of thousands.

But Ice said a broader problem was damaging the process of resolving the foreclosures. He said many banks were initiating proceedings without knowing if they in fact own the loans and often failed to produce requested documents.

The securitization of home loans meant many have been sold off to other investors. Banks still own some, but frequently serve as loan servicers on behalf of the actual owner, whether it is another bank or an investor pool.

Some mortgages can be tracked in an electronic system known as MERS, or the Mortgage Electronic Registration Systems, that traces transfers among member banks. But the mechanism is not fully reliable, Ice said.

A recent sample among some 400 foreclosure cases Ice’s law firm is handling revealed 71 percent with possible discrepancies in detailing the owners of clients’ loans.

“Few of these processes followed the rules, shortcuts were used at every step,” he said. “The industry itself doesn’t know who owns what.”

BANKS WARY OF BAD LOAN STIGMA

Some banks may be reluctant to step forward, worried about how it might reflect the amount of bad loans on their balance sheets, Ice added.

Lenders, including JPMorgan Chase and Co., Bank of America Corp and Ally Financial Inc, are now scrambling to defend and improve their foreclosure procedures.

Continue reading…REUTERS

.

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MUST READ | Finding The Missing Piece In The Reconveyance Puzzle

MUST READ | Finding The Missing Piece In The Reconveyance Puzzle


State-level legislation introduced earlier this year proposed that the beneficiary of a trust deed have only 30 days after payoff to deliver a written request to the trustee to reconvey the property back to the grantor.

If the beneficiary delayed delivery of the request and missed the 30-day deadline by even one day, the beneficiary would be liable to the grantor for $500, the legislation stated. This amount would be in addition to all actual damages incurred by the grantor.

Consequently, if a prospective sale of the property was lost because of a delay in following through with the reconveyance, the beneficiary would be held liable for substantial damages.

This can be a real trap if it takes more than 30 days to forward a request for reconveyance. The $500 fine could be just the beginning. In the opinion of George C. Reinmiller Trustee Inc., beneficiaries, loan servicers and trustees will probably see more of this type of legislation around the country, because a limited few have been slow in completing reconveyances.

The penalties and monetary losses don’t stop there.

With the rise in foreclosures and an increase in budget cutbacks, lenders and servicers have been seeing a higher demand to have complete and accurate collateral files to certify their pools of loans.

By completing an audit and ensuring everything is there, servicers will find it easier to close on the sale of the pool and will see a decrease in requests for the repurchase of certain assets in the file. These certified pools of loans are considered more valuable and are, therefore, sold relatively easily.

In today’s market, purchasers of pools look for any number of reasons for a seller to repurchase loans. One such reason – in fact, the most common reason – is incomplete files.

If there are problems within a pool, lenders and servicers can spend huge amounts of money trying to discover the missing pieces. Another possible headache is the time and money involved to go back and forth with the attorney trying to resolve these types of issues should the loan fall into foreclosure. If the issues cannot be resolved quickly, the seller may have to buy back the loans, which is something a struggling company shudders to hear.

What can lenders and loan servicers do to quickly correct these types of problems or keep them from occurring in the first place?

The more time that passes between origination and file verification, the more costly and difficult it becomes to obtain any missing documents. Sometimes, with cutbacks (such as loss of human resources) or, as we see happening more frequently these days, the relocation of offices, documents can be forgotten or misplaced and can end up sitting incomplete in an abandoned filing cabinet that will probably go untouched until someone accidentally comes across it.

Servicers should take aggressive document control and verify they have the documents they need in each file as soon as possible. If documents are missing, there are still strategies that can be employed.

Finding and obtaining missing original documents that have to be publicly recorded (e.g., mortgages, assignments and assumptions) are fairly easy to retrive. For instance, you can get a certified copy from the county recorder where the property is located, as long as the document was originally recorded.

Research can be done to verify whether the document was recorded by searching the county’s Web site or speaking with the recorder’s office. You may obtain a certified copy by phone or by mailing in a certified copy request to the county recorder. However, there are a few recording districts that require an abstractor to physically come in to research and/or request a copy of a document.

Obtaining copies of missing documents that were never recorded on the public record – such as title policies – can get much more complicated. One can always go directly to the title company or title agent that issued the policy, but with current conditions in the economy and mortgage industry, title companies have been closing their doors.

The next step is to contact the underwriter. Most underwriters will not send the original policy, because they normally do not have it. However, they should be able to send a certified copy. Because each purchaser is different and may have a different concept of what is acceptable, specificity is key. Get a clear definition of what a certified copy of a title policy is from the purchaser before obtaining one from the underwriter.

There is a chance that the underwriter may not have the policy, either. In that case, the underwriter might have to re-issue it, which can get pretty costly. To re-issue the policy, the underwriter will normally require a complete chain of assignments. Most underwriters will only reissue a title policy directly from the current beneficiary of the mortgage and will use the assignments on record to verify that person’s identity.

With Mortgage Electronic Registration Systems (MERS), missing assignments have, in recent years, become less of a problem for some, but there are still many mortgages that are not registered with MERS. With the countless number of banks and mortgage companies being sold or closing, it can become a Sherlock Holmes case trying to find an entity that can sign and, therefore, complete the assignment chain. It usually starts with searching various Web sites and tracking down the current holder or entity of the company.

When all else fails
Then the phone calls start in an attempt to find the right person to sign the document. What happens if you can’t find anyone to sign? In many cases, when there is no one left that can sign an assignment, a lost assignment affidavit is a possible resolution. But keep in mind that only certain states and/or recording jurisdictions allow these affidavits. If all else fails, then it is up to the courts to resolve the problem, which is when the expenses start to increase once again.

By having all loan files complete, one is able to move quickly if a loan is paid in full, as well. Steep penalties can be avoided in certain states by providing a release or reconveyance in a timely manner. This is especially important if Reinmiller’s opinion holds true and the trend of shortened compliance time frames grows further.

Lenders and servicers should take a proactive approach in their daily functions and do whatever it takes to ensure that their files are complete from the start to avoid costly mistakes with unpredictable results.

Jessica Woods is vice president of Richmond Monroe Group Inc., an outsource services provider offering processing and technology solutions to the servicing industry. She can be reached at (417) 447-2931 or jessicaw@richmondmonroe.com.


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Posted in conflict of interest, foreclosure, foreclosures, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., STOP FORECLOSURE FRAUD, title company, trade secretsComments (1)

Are Lenders digging into noncredit proprietary databases such as those maintained by Papa John’s or Victoria’s Secret legally?

Are Lenders digging into noncredit proprietary databases such as those maintained by Papa John’s or Victoria’s Secret legally?


Lenders’ data mining goes deep

Mortgage makers are going beyond tax returns and bank statements to determine whether you’re a good risk. They’re checking such things as where you have pizza delivered and where you shop online.

By Lew Sichelman
July 18, 2010

Reporting from Washington —
That pizza you had delivered the other night could mean the difference between whether you are approved for a mortgage or rejected.

There’s a big stretch between making a house payment and paying for a pizza. But it’s not what you pay for carryout that matters, at least not in the eyes of lenders. It’s where the food was delivered.

Ordering takeout proves that you live where you say you do, and that helps lenders uncover the crook who claims to live in the property he is trying to refinance when he really lives hundreds of miles away. Or expose the 35-year-old who says he has a $1,200-a-month apartment when he really lives rent-free with Mom and Dad.

When you order food online, you become part of a vast database that lenders might tap to help them determine whether you are a good risk. Moreover, all sorts of these data reservoirs exist, and none of them is off-limits to lenders who are coming off the worst financial debacle since the Great Depression.

“If the data is available and it can be obtained legally, I’m going to test it,” says Alex Santos, president of Digital Risk, an Orlando, Fla., analytics firm that works with lenders and investors to build better underwriting mousetraps. “If it is inexpensive and makes my credit model better, I’m going to use it.”

Digital Risk is just one of numerous risk-management companies that are continuously probing for ways to help clients quantify their risk, prevent fraud and otherwise ensure the quality of their loans. And they’re going to extraordinary lengths to do so.

For example, they might peek into your online-buying habits. After all, the reasoning goes, someone who buys his shirts from a Brooks Brothers catalog may have more disposable income than someone who shops at JCPenney.

“At least that’s a theory we can test,” Santos says. “We’re looking for any type of data source that you can plug into a computer. It takes only a month of trial and error to determine whether the information can help [determine credit risk] or not. We have a hypothesis, push a button, and the computer tells us whether the data is predictive or not.”

This sort of data mining goes way beyond your credit score, that financial snapshot that measures your ability and willingness to repay your debt. And, Santos says, “there’s a tremendous amount of this kind of analytics going on right now.”

Lenders are still checking credit histories, not just when you apply for a mortgage but also a second time a day or two before the loan closes. But your credit score — known as a FICO score for the name of the company that created the scoring formula — is now considered “too broad.” Consequently, it has moved down in the hierarchy of tests that lenders are using to make certain that someone isn’t hoodwinking them.

First and foremost, lenders are pulling copies of your tax returns directly from Uncle Sam.

Don’t be alarmed. You give the lender permission to do that when you sign Form 4506-T. The idea here is to make sure that you haven’t altered the copy of your last two years’ tax returns that you provided when you signed your loan application. Lenders want to know if you might have exaggerated how much you earned.

Continue reading….LA Times
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Posted in credit score, fair isaac corporation, fico, non disclosureComments (0)

$8k to deliver pizzas? I’ll buy that | By Gretchen Morgenson

$8k to deliver pizzas? I’ll buy that | By Gretchen Morgenson


If trust in capital markets is to return, investors must be able to believe due diligence has been conducted

by GRETCHEN MORGENSON 05:55 AM Jul 14, 2010

Investors who lost billions on boatloads of faulty mortgage securities have had a hard time holding Wall Street accountable for selling the things in the first place.

For the most part, banks have said they cannot be called out in court on any of this because they had no idea that so many of these loans went to people who lacked the resources to make even their first mortgage payment.

Wall Street firms were intimately involved in the financing, bundling and sales of these loans, so their defence rings hollow. They provided hundreds of millions of dollars in credit to dubious underwriters and some even had their own people on site at the loan factories. Many Wall Street firms owned mortgage lenders outright.

Because many of the worst lenders are now out of business, investors in search of recoveries have turned to the banks that packaged the loans into securities. But successfully arguing that Wall Street aided lenders in a fraud is tough under United States federal securities laws. This is largely a result of Supreme Court decisions barring investors from bringing federal securities fraud cases that accuse underwriters and other third parties as enablers.

Where there’s a will, however, there’s a way. And state courts are proving to be a more fruitful place for mortgage investors seeking redress, legal experts say.

Late last month, for example, Massachusetts Attorney-General Martha Coakley extracted US$102 million ($140 million) from Morgan Stanley in a case involving Morgan’s extensive financing of loans made by New Century, a notorious and now-defunct lender that was based in California.

Morgan packaged the loans into securities and sold them to clients, even after its due diligence uncovered problems with the underlying mortgages that New Century fed to the firm, Ms Coakley said. In settling the matter, Morgan neither admitted nor denied the allegations. The investigation is continuing.

On Friday, an investment management firm that lost US$1.2 billion in mortgage securities it bought for clients filed suit in Massachusetts state court against 15 banks, accusing them of abetting a fraud.

The firm, Cambridge Place Investment Management of Concord, Massachusetts, purchased US$2 billion in mortgage securities from the banks and it says the banks misrepresented the risks in the underlying loans – both in prospectuses and sales pitches (see box).

The complaint says the banks misled Cambridge Place by maintaining that the mortgages in the securities it bought had met strict underwriting requirements related to the borrowers’ ability to repay the loans. Cambridge also contends it relied on the banks’ claims of having conducted due diligence to verify the quality of the loans bundled into the securities.

Continue Reading…TODAYonline

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Cambridge Place Investment Management, case, CONTROL FRAUD, investigation, lawsuit, STOP FORECLOSURE FRAUDComments (0)

COULD FORECLOSURE NOTES & MORTGAGES BE KEPT HERE?

COULD FORECLOSURE NOTES & MORTGAGES BE KEPT HERE?


According to a prospectus

will not physically segregate the mortgage files in XXXXX custody but the mortgage files will be kept in shared facilities. However, XXXXXX’s proprietary document tracking system will show the location within XXXXXX’s facilities of each mortgage file and will show that the mortgage loan documents are held by the Trustee on behalf of the trust.

This is LPS’s mail center in Minnesota. This is where many of the settlement documents get sent to for scanning and uploading. Take a listen and maybe this is where all the documents are kept for safe keeping?

Just saying…because this is a warehouse and they have plenty of room.

You have to watch it entirely… or go to 4:24 and start from there.

If you look click this post below you will see title is sent to LPS in MN…see my point———>

LENDER PROCESSING SERVICES (LPS) BUYING UP HOMES AT AUCTIONS? Take a look to see if this address is on your documents!

© 2010-15 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in Lender Processing Services Inc., LPS, mortgage, note, securitization, TrustsComments (1)

VIDEO: What does LENDER PROCESSING SERVICES (LPS) exactly do: LPS CEO JEFF CARBIENER

VIDEO: What does LENDER PROCESSING SERVICES (LPS) exactly do: LPS CEO JEFF CARBIENER


Date of Video: 7/2/2008

[youtube=http://www.youtube.com/watch?v=uddq3NJ3n7Q]

Posted in FIS, foreclosure fraud, Lender Processing Services Inc., LPSComments (0)


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