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A Foreclosure Film in the Making Awaits Final Scene

A Foreclosure Film in the Making Awaits Final Scene


American Banker-

What do an insurance agent in Tennessee, a homemaker in Ohio, a private investigator from Wisconsin and a helicopter stunt pilot in Hollywood have in common?  Well, for one thing, they’ve all participated in some fashion in “Foreclosure Diaries,” the documentary that my company, Pacific Street Films, has been producing, in fits and starts, since 2006.

When work first started on the film, the original tag was “Follow the Money,” and the road seemed to lead towards a dark and confusing destination. There was all this talk in the industry about scads of money to be made in servicing “subprime” loans.  There were seminars, conferences, it seemed all the rage. 

[AMERICAN BANKER]

image: macgasm.net

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



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VIDEO: GRETCHEN MORGENSON EXPLAINS MORTGAGE SERVICING, SECURITIZATION

VIDEO: GRETCHEN MORGENSON EXPLAINS MORTGAGE SERVICING, SECURITIZATION


Gretchen Morgenson is a Pulitzer Prize winning journalist. Gretchen is one of the first journalist who began reporting on the mortgage crisis and understands exactly what is happening all around us. We thank Gretchen for all her hard work and we are proud to say she is aware of StopForeclosureFraud.com 🙂

From Pacific Street Films: pacfilm

Gretchen Morgenson, Pulitzer Prize winning New York Times writer, interviewed for Pacific Street’s upcoming feature doc on the financial crisis. Begun in 2007, this film (yet untitled) has strayed in many directions; covered much ground, and, when completed, will offer a very different perspective on the personalities and companies that have played the principal leads in the longest-running soap opera in this country’s financial history. A Ken Burns documentary it is not…

Image credit: ?

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



Posted in foreclosure, foreclosure fraud, foreclosure mills, foreclosures, gretchen morgenson, investigation, MERS, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., securitization, servicers, stopforeclosurefraud.com, Wall StreetComments (1)

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.



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A ‘Little Judge’ Who Rejects Foreclosures, Brooklyn Style: Judge Arthur Schack

A ‘Little Judge’ Who Rejects Foreclosures, Brooklyn Style: Judge Arthur Schack


If other judges knew more of what really is than whats not perhaps they would also know the fraud that is being played in their court rooms.

By MICHAEL POWELL Published: August 30, 2009

The judge waves you into his chambers in the State Supreme Court building in Brooklyn, past the caveat taped to his wall — “Be sure brain in gear before engaging mouth” — and into his inner office, where foreclosure motions are piled high enough to form a minor Alpine chain.

 Nicole Bengiveno/The New York Times

“I don’t want to put a family on the street unless it’s legitimate,” Justice Arthur M. Schack said.

Every week, the nation’s mightiest banks come to his court seeking to take the homes of New Yorkers who cannot pay their mortgages. And nearly as often, the judge says, they file foreclosure papers speckled with errors.

He plucks out one motion and leafs through: a Deutsche Bank representative signed an affidavit claiming to be the vice president of two different banks. His office was in Kansas City, Mo., but the signature was notarized in Texas. And the bank did not even own the mortgage when it began to foreclose on the homeowner.

The judge’s lips pucker as if he had inhaled a pickle; he rejected this one.

“I’m a little guy in Brooklyn who doesn’t belong to their country clubs, what can I tell you?” he says, adding a shrug for punctuation. “I won’t accept their comedy of errors.”

The judge, Arthur M. Schack, 64, fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators and lawyers who file motions by the bale. While national debate focuses on bank bailouts and federal aid for homeowners that has been slow in coming, the hard reckonings of the foreclosure crisis are being made in courts like his, and Justice Schack’s sympathies are clear.

He has tossed out 46 of the 102 foreclosure motions that have come before him in the last two years. And his often scathing decisions, peppered with allusions to the Croesus-like wealth of bank presidents, have attracted the respectful attention of judges and lawyers from Florida to Ohio to California. At recent judicial conferences in Chicago and Arizona, several panelists praised his rulings as a possible national model.

His opinions, too, have been greeted by a cry of affront from a bank official or two, who say this judge stands in the way of what is rightfully theirs. HSBC bank appealed a recent ruling, saying he had set a “dangerous precedent” by acting as “both judge and jury,” throwing out cases even when homeowners had not responded to foreclosure motions.

Justice Schack, like a handful of state and federal judges, has taken a magnifying glass to the mortgage industry. In the gilded haste of the past decade, bankers handed out millions of mortgages — with terms good, bad and exotically ugly — then repackaged those loans for sale to investors from Connecticut to Singapore. Sloppiness reigned. So many papers have been lost, signatures misplaced and documents dated inaccurately that it is often not clear which bank owns the mortgage.

Justice Schack’s take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose.

“If you are going to take away someone’s house, everything should be legal and correct,” he said. “I’m a strange guy — I don’t want to put a family on the street unless it’s legitimate.”

Justice Schack has small jowls and big black glasses, a thin mustache and not so many hairs combed across his scalp. He has the impish eyes of the high school social studies teacher he once was, aware that something untoward is probably going on at the back of his classroom.

He is Brooklyn born and bred, with a master’s degree in history and an office loaded with autographed baseballs and photographs of the Brooklyn Dodgers. His written decisions are a free-associative trip through popular, legal and literary culture, with a sideways glance at the business pages.

Confronted with a case in which Deutsche Bank and Goldman Sachs passed a defaulted mortgage back and forth and lost track of the documents, the judge made reference to the film classic “It’s a Wonderful Life” and the evil banker played by Lionel Barrymore.

“Lenders should not lose sight,” Justice Schack wrote in that 2007 case, “that they are dealing with humanity, not with Mr. Potter’s ‘rabble’ and ‘cattle.’ Multibillion-dollar corporations must follow the same rules in the foreclosure actions as the local banks,savings and loan associations or credit unions, or else they have become the Mr. Potters of the 21st century.”

Last year, he chastised Wells Fargo for filing error-filled papers. “The court,” the judge wrote, “reminds Wells Fargo of Cassius’s advice to Brutus in Act 1, Scene 2 of William Shakespeare’s ‘Julius Caesar’: ‘The fault, dear Brutus, is not in our stars, but in ourselves.’ ”

Then there is a Deutsche Bank case from 2008, the juicy part of which he reads aloud:

“The court wonders if the instant foreclosure action is a corporate ‘Kansas City Shuffle,’ a complex confidence game,” he reads. “In the 2006 film ‘Lucky Number Slevin,’ Mr. Goodkat, a hit man played by Bruce Willis, explains: ‘A Kansas City Shuffle is when everybody looks right, you go left.’ ”

The banks’ reaction? Justice Schack shrugs. “They probably curse at me,” he says, “but no one is interested in some little judge.”

Little drama attends the release of his decisions. Beaten-down homeowners rarely show up to contest foreclosure actions, and the judge scrutinizes the banks’ papers in his chambers. But at legal conferences, judges and lawyers have wondered aloud why more judges do not hold banks to tougher standards.

“To the extent that judges examine these papers, they find exactly the same errors that Judge Schack does,” said Katherine M. Porter, a visiting professor at the School of Law at the University of California, Berkeley, and a national expert in consumer credit law. “His rulings are hardly revolutionary; it’s unusual only because we so rarely hold large corporations to the rules.”

Banks and the cottage industry of mortgage service companies and foreclosure lawyers also pay rather close attention.

A spokeswoman for OneWest Bank acknowledged that an official, confronted with a ream of foreclosure papers, had mistakenly signed for two different banks — just as the Deutsche Bank official did. Deutsche Bank, which declined to let an attorney speak on the record about any of its cases before Justice Schack, e-mailed a PDF of a three-page pamphlet in which it claimed little responsibility for foreclosures, even though the bank’s name is affixed to tens of thousands of such motions. The bank described itself as simply a trustee for investors.

Justice Schack came to his recent prominence by a circuitous path, having worked for 14 years as public school teacher in Brooklyn. He was a union representative and once walked a picket line with his wife, Dilia, who was a teacher, too. All was well until the fiscal crisis of the 1970s.

“Why’d I go to law school?” he said. “Thank Mayor Abe Beame, who froze teacher salaries.”

He was counsel for the Major League Baseball Players Association in the 1980s and ’90s, when it was on a long winning streak against team owners. “It was the millionaires versus the billionaires,” he says. “After a while, I’m sitting there thinking, ‘He’s making $4 million, he’s making $5 million, and I’m worth about $1.98.’ ”

So he dived into a judicial race. He was elected to the Civil Court in 1998 and to the Supreme Court for Brooklyn and Staten Island in 2003. His wife is a Democratic district leader; their daughter, Elaine, is a lawyer and their son, Douglas, a police officer.

Justice Schack’s duels with the banks started in 2007 as foreclosures spiked sharply. He saw a plague falling on Brooklyn, particularly its working-class black precincts. “Banks had given out loans structured to fail,” he said.

The judge burrowed into property record databases. He found banks without clear title, and a giant foreclosure law firm, Steven J. Baum, representing two sides in a dispute. He noted that Wells Fargo’s chief executive, John G. Stumpf, made more than $11 million in 2007 while the company’s total returns fell 12 percent.

“Maybe,” he advised the bank, “counsel should wonder, like the court, if Mr. Stumpf was unjustly enriched at the expense of W.F.’s stockholders.”

He was, how to say it, mildly appalled.

“I’m a guy from the streets of Brooklyn who happens to become a judge,” he said. “I see a bank giving a $500,000 mortgage on a building worth $300,000 and the interest rate is 20 percent and I ask questions, what can I tell you?”

Posted in concealment, conspiracy, corruption, erica johnson seck, foreclosure fraud, foreclosure mills, judge arthur schack, onewest, robo signer, robo signersComments (0)


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