U.S. mortgage lenders and real-estate agents are growing concerned a new set of mortgage-lending standards under development by a new consumer regulator will imperil the fledgling housing recovery and limit the availability of home loans.
In recent weeks, after meetings with consumer bureau officials, several real-estate industry groups and some consumer advocacy organizations have grown worried about how the Consumer Financial Protection Bureau could interpret the mortgage lending rules, which it is aims to finish by this summer.
In a letter to be sent to the consumer bureau Monday, 33 lobbying groups, including the National Association of Realtors, Mortgage Bankers Association and American Bankers Association, warn against an overly restrictive interpretation of the “qualified mortgage” lending rules, which are required by the 2010 Dodd-Frank financial overhaul law.
New York’s top judge is not done smacking around foreclosure mills for their bad behavior.
Chief Judge Jonathan Lippman, faced with thousands of stalled foreclosure cases clogging his courts, is expected to soon start a pilot program that will force these foreclosure mills and their bank clients to the bargaining table in an attempt to modify the muddled mortgages.
Homeowners across the state — including as many as 5,000 in Brooklyn and Queens alone — have been victimized by these mills, which file lawsuits and then, fearful of swearing to the truthfulness of the claims in the suit, let them lie dormant in the courts.
Nearly 7,000 stagnating foreclosure cases lie dormant in Palm Beach County’s courts, creating a payment-free limbo for some homeowners but a stain of vacant and abandoned homes in deteriorating neighborhoods.
These sleeper files, which have remained inactive for a year or longer, date as far back as 1997, according to documents provided to The Palm Beach Post by the clerk of courts.
But most are from the early years of the housing crash when lenders feverishly sought to repossess homes, unaware that the frenetic pace would cause a second crisis based on faulty documents and unlawful corner-cutting.
While an unknown number of dormant files are mistakes, such as one party forgetting to request a dismissal after an agreement is reached, others remain open but unmoving because of homeowner bankruptcy, loan modification negotiations or bank neglect.
Monkey business as usual and sounds familiar. I guess this is a pattern throughout the U.S.!
Texas Tribune-
In 91 criminal cases in Texas since 2004, the courts decided that prosecutors committed misconduct, ranging from hiding evidence to making improper arguments to the jury, according to data that the Innocence Project will release today.
None of those prosecutors has ever been disciplined.
“It paints a bleak picture about what’s going on with accountability and prosecutors,” said Cookie Ridolfi, founder of the Northern California Innocence Project, who researched misconduct data in Texas and other states.
Bank Hapoalim has filed a massive $720 million suit against Bank of America, Merrill Lynch and Countrywide over its losses in the U.S. subprime crisis, alleging that the U.S. institutions misled and defrauded it.
Among Israel’s financial institutions, Hapoalim suffered the worst losses in the subprime crisis due to its investments in mortgage-backed securities.
Between 2005 and 2007, the bank, led by Shlomo Nehama and Zvi Ziv, snapped up mortgage-backed securities in an attempt to meet its goal of a 15% return on equity by 2007.
Wall Street wants to free itself from the past decade’s regulatory reforms, and Eliot Spitzer says President Barack Obama is too willing to oblige. The former New York attorney general says, with the passing of the JOBS Act, banks are at the public trough once again. (April 13, 2012)
This demonstrates who’s side the government is on.
This being a warning to the banks is an example of stupidity, why even bother if you’re willing to let them stay in business?
False alarm!
Market Watch-
A new U.S. financial regulator is putting banks on notice that they can and will be penalized for their outside vendors’ misdeeds.
In a bulletin Friday, the Consumer Financial Protection Bureau warned the financial industry to make sure third-party vendors–such as foreclosure-law firms, technology firms, appraisal companies and default-service companies–are following the nation’s consumer-protection laws.
“Consumers are at a real disadvantage because they do not get to choose the service providers they deal with–the financial institution does,” said Richard Cordray, the bureau’s director.
Most banks hire outside service providers to carry out a range of duties such as processing credit cards, handling mortgage and student-loan payments, maintaining call centers or taking care of billing issues. The agency’s notice emphasizes financial institutions can be held responsible if these contractors engage in practices that hurt consumers.
Banking officials said they already are committed to making sure their vendors meet consumer-protection obligations.
“This is largely business as usual for banks,” said Richard Riese, the American Bankers Association’s senior vice president for regulatory compliance.
Eva Friedman, JACOB FRANKFURTER, NEW YORK CITY ENVIRONMENTAL CONTROL BOARD, and “JOHN DOE”and “JANE DOE”, the last two names being fictitious, said parties intended being tenants or occupants, if any, having or claiming an interest in, or lien upon the premises described in the complaint, Defendants.
130486/11
Thomas P. Aliotta, J.
The following papers were marked fully submitted on the 19th day of January, 2012:
Pages
Numbered
Notice of Motion to Dismiss
by Defendants Eva Friedman and Jacob Frankfurter,
with Supporting Papers, Exhibits and Memorandum of Law
(dated September 1, 2011)………………………………………………………………………….1
Affirmation in Opposition
by Plaintiff, with Supporting Papers and Exhibits
(dated November 8, 2011)………………………………………………………………………….2
Affirmation in Reply
(dated December 12, 2011)…………………………………………………………………………3
Upon the foregoing papers, the motion is granted and the complaint is dismissed.
This is an action to foreclose a mortgage in which plaintiff PNMAC Mortgage Co., LLC. (hereinafter “plaintiff”) alleges that defendants Eva Friedman and Jacob Frankfurter (hereinafter “defendants”) are in default as a result of their having failed to make the required payments since June 1, 2008. To the extent relevant, defendants executed a mortgage in favor of nonparty Mortgage Electronic Registration Systems, Inc (hereinafter “MERS”) as nominee for American Brokers Conduit (hereinafter “ABC”) as security for a note in the principal sum of $440,000 given to fund their purchase of the premises known as 502 Weser Avenue on Staten Island (see Defendants’ Exhibit “C”). Both the mortgage and an “Interest First Adjustable Rate Note” (hereinafter “note”) in favor of ABC were executed on August 29, 2005 (id.).
It is undisputed that the above note was thereafter endorsed to nonparty Wells Fargo Bank, NA (hereinafter “Wells Fargo”). However, plaintiff contends that this endorsement “was erroneous”, and that the note in question either was never delivered or was returned to ABC (see Affirmation of Daniel H. Richland, Esq., para 10). Insofar as it appears, the note was subsequently endorsed “en [*2]blanc by allonge” and physically delivered to nonparty CitiMortgages, Inc. (id. at 11), which acquired ABC’s interest in the subject mortgage via assignment by MERS on behalf of ABC on January 27, 2009 (id. at 12; see Plaintiff’s Exhibit “B”). Following these transfers, MERS sought to foreclose on the subject mortgage, but its action was dismissed with prejudice, as it was the holder of neither the note or mortgage at the time the action was commenced.[FN1] The ensuing order of dismissal, entered on August 4, 2010, also directed the County Clerk to cancel the notice of pendency (see Plaintiff’s Exhibit “C”). CitiMortgage, Inc. subsequently assigned its rights under the above mortgage to plaintiff on March 15, 2011 (see Plaintiff’s Exhibit “B”), which commenced the instant foreclosure action on or about June 21, 2011 (see Defendants’ Exhibit “A”).
In a pre-answer motion to dismiss the complaint, defendants maintain, inter alia, (1) that plaintiff lacks standing; (2) the action is barred under the doctrines of collateral estoppel and/or res judicata; and (3) the complaint fails to state a cause of action (see CPLR 3211[a][3], [5], [7]). In addition, defendants seek an order directing the County Clerk to cancel the notice of pendency and to enter an order pursuant to CPLR 6514(a) declaring the mortgage to be unenforceable because “it has become bifurcated from the note”.
A prima facie case in foreclosure is established by the mortgagee’s production of the mortgage, the unpaid note and evidence of the mortgagor’s default. However, where, as here, a plaintiff’s standing has been placed in issue, it bears the initial burden of proving same before it is entitled to any relief (see Citimortgage, Inc. v. Stosel, 89 AD3d 887 [2nd Dept 2011]).
A plaintiff establishes its standing in a mortgage foreclosure action by demonstrating that it is the holder or assignee of both the mortgage and underlying note, “either by physical delivery or execution of a written assignment prior to the commencement of the action” (id. at 888 [internal quotation marks omitted]). While the mortgage passes with the debt as an inseparable incident thereof (see US Bank NA v. Sharif, 89 AD3d 723, 725 [2nd Dept 2011), the reverse is not true, i.e., an assignment of the mortgage without the underlying note is a nullity (id., see Citimortgage, Inc. v. Stosel, 89 AD3d at 888).
In the instant case, plaintiff asserts its ownership of the note by claiming that the erroneous endorsement to nonparty Wells Fargo was properly voided when the endorser, ABC, subsequently added an “allonge endorsed en blanc” while in possession of the note (see Affirmation of Daniel H. Richland, Esq., paras 23-25).[FN2] The “allonge” submitted by plaintiff provides that “[t]his Note Allonge is attached to and made a part of the Note, for the purpose of Noteholder Endorsement to evidence a transfer of Interest”. It names “American Brokers Conduit” as the originator and is made payable to “to the Order of Without Recourse American Brokers Conduit by: Roger Kistler, Assistant Treasurer” (see Plaintiff’s Exhibit “A”). The document is undated, but must have been added after the erroneous endorsement to Wells Fargo. According to plaintiff, this endorsement was sufficient under Uniform Commercial Code (“UCC”) §3-208, which provides, in relevant part, that “[w]here an instrument is returned to or reacquired by a prior party he may cancel any indorsement which is not necessary to his title and reissue or further negotiate the instrument”.
Nevertheless, there is no proof in the papers presently before the Court as to when the subject note was negotiated or transferred to plaintiff. As a result of this failure to establish that it was the [*3]lawful holder of both the note (whether by delivery or assignment) and mortgage prior to the commencement of this action, plaintiff has failed to sustain its burden of demonstrating its standing to commence this foreclosure action (see US Bank NA v. Sharif, 89 AD3d at 725; Deutsche Bank Natl Trust Co v. Barnett, 88 AD3d 636, 637-638 [2nd Dept 2011]). Accordingly, defendants’ motion to dismiss is granted.
The action being dismissed for lack of standing, there is no occasion for the Court to consider any further issue.
Accordingly, it is
ORDERED that the motion to dismiss is granted, without prejudice; and it is further
ORDERED that the complaint and any cross claims are dismissed; and it is further
ORDERED that the Clerk is directed to cancel the Notice of Pendency filed in connection herewith and mark his records accordingly.
ENTER,
_/s/ Hon. Thomas P. Aliotta_________
J.S.C.
DATED:March 21, 2012
Footnotes
Footnote 1:See Mortgage Electronic Registration Systems, Inc. as Nominee for American Brokers Conduit v. Eva Friedman, Jacob Frankfurther, et al., Index No. 131345/2009.
Footnote 2:UCC §3-204(2) provides that “An indorsement in blank specifies no particular indorsee and may consist of a mere signature. An instrument payable to order and indorsed in blank becomes payable to bearer and may be negotiated by delivery alone until specially indorsed.”
DAVID M. LOUIE ………………RUSSELL A. SUZUKI ATTORNEY GENERAL……….1st DEPUTY AG Phone: (808) 586-1500
For Immediate Release: April 12, 2012 News Release 2012-10
STATE OF HAWAII FILES LAWSUIT AGAINST SEVEN MAJOR CREDIT CARD COMPANIES
HONOLULU – Today the Attorney General of the State of Hawaii filed lawsuits in First Circuit Court against seven major credit card companies, alleging that these companies improperly charged their Hawaii customers for products not requested or for products that did not provide the benefits claimed.
The suits are being brought by the State of Hawaii by Attorney General David M. Louie, with the State of Hawaii being represented by local attorney Rick Fried in association with two mainland firms, Golomb & Honik of Philadelphia, and Baron & Budd of Dallas.
An example of an alleged improper charge is where a credit card company bills a consumer for something called “payment protection” or something similar, which supposedly pays the cardholder’s required minimum monthly payments in certain circumstances. The consumer is not told of the numerous restrictions, and often the consumer doesn’t qualify for the product in the first place. Solicitations for these products are often telemarketing calls using predatory tactics to sign up customers for services they either don’t want or don’t qualify for. The suits point out that, unlike other telemarketers, these credit card companies already have their customers’ credit card information and therefore are able to charge their customers for products without their knowledge or consent.
The seven credit card companies that have been named as defendants are Bank of America, Barclays, Capital One, Chase, Citi, Discover, HSBC, and their subsidiaries. The State has requested injunctive relief to stop the alleged illegal practices, full restitution for all affected consumers, and penalties, which could subject the credit card companies to up to $10,000 per violation. If awarded, restitution funds would go directly to consumers and penalties would go to the state’s general fund.
Please call Rick Fried at (808) 524-1433, if you believe you have been a victim of such conduct. When you call, please mention that your call relates to possible payment protection fraud.
###
For more information contact: Joshua Wisch Special Assistant to the Attorney General (808) 586-1284 joshua.a.wisch@hawaii.gov http://hawaii.gov/ag/
Are you concerned about growing income inequality in America? Are you resentful of all that wealth concentrated in the 1 percent? I’ve got the perfect solution, a modest proposal that involves just a small adjustment in the Federal Reserve’s easy monetary policy. Best of all, it will mean that none of us have to work for a living anymore.
For several years now, the Fed has been making money available to the financial sector at near-zero interest rates. Big banks and hedge funds, among others, have taken this cheap money and invested it in securities with high yields. This type of profit-making, called the “carry trade,” has been enormously profitable for them.
Remember that mortgage securitization task force that would supposedly satisfy the public’s deep yearning for some basic law enforcement by prosecuting the banks for securities fraud? Well, lately people have been pointing out that the task force isn’t showing many signs of life, and is showing every indication of being slow walked by the Feds. For starters, more than two months after the task force’s creation, it hasn’t been staffed with the 55 people its budget calls for. How’s that for serious commitment from the Feds?
Well, yesterday the Administration pushed back, telling Reuters about the subpoenas the task force has issued. Turns out the Administration has picked a good law to use, FIRREA, which was designed in the wake of the S&L crisis specifically to make going after banks for fraud easier. And that’s great.
Good! Maybe we can get them all… one by one to testify!
Reuters-
A New York judge has ruled that Bank of America (BAC.N) CEO Brian Moynihan must testify in a lawsuit brought by bond insurer MBIA Inc.(MBI.N) which claims the bank fraudulently induced it to insure risky mortgage-backed securities.
The judge said Moynihan could provide relevant testimony in the case due to his position as CEO, former president of investment banking and the fact that he oversaw the process of integrating Countrywide into Bank of America.
Bank of America acquired mortgage lender Countrywide in July 2008. MBIA filed a Countrywide later that year. In 2009, MBIA claimed Bank of America was liable for Countrywide’s conduct.
This isn’t the way. Don’t let the banks win by ending your life.
Eviction leads to standoff and deadly shooting, killing 2
HuffPO-
A sheriff’s deputy and a civilian were killed Thursday when gunfire broke out as authorities tried to serve an eviction notice at a Central California apartment complex, officials said.
The shooting led to a standoff with a suspect who was believed to be holed up inside an apartment at the Whispering Woods development in Modesto.
More than 100 law enforcement officers from the Central Valley arrived at the scene. FBI and SWAT teams surrounded the building and authorities evacuated nearby residents while others remained in their homes.
The sweetheart deals just keep coming. Lawbreakers at one bank after another are let off the hook as their shareholders write a check. And then they go out and repeat the illegal behavior they promised not to do in the last settlement.
It shouldn’t be surprising that this keeps happening over at the SEC – especially as long as Robert Khuzami continues to serve as Director of the Commission’s Division of Enforcement.
But while each of these deals has been shameful, destructive, and outrageous, the $22 million agreement with Goldman Sachs which the SEC announced today – another one in which the guilty party “neither confirms nor denies wrongdoing” – looks like the worst one yet.
The SEC has the power to shut Goldman Sachs down for what it did, and the offenses it describes are felonies. But they just gave out another slap on the wrist – no, make that a pat on the wrist – with today’s announcement.
An Obama administration task force established to investigate misconduct that fueled the financial crisis is turning to a little-used statute that may make such cases easier to bring, according to people familiar with the matter.
The federal statute, FIRREA, was passed in the wake of the savings-and-loan scandals in the 1980s. It requires a lower burden of proof than criminal charges, has a longer statute of limitations than other financial laws and potentially could bring big fines.
But it has appeared in only a few dozen cases since it was enacted in 1989.
The task force, which is in the Justice Department, used FIRREA earlier this year when it issued more than a dozen civil subpoenas to top financial institutions, including Citigroup, the people familiar with the matter said.
Bank of America Corp (BAC.N) and U.S. Bancorp (USB.N) have been sued by a Chicago pension fund that said they failed to protect investors in their roles as trustees for mortgage-backed securities for Washington Mutual Inc.
Wednesday’s complaint was filed eight days after U.S. District Judge William Pauley in Manhattan let four pension funds pursue similar claims against Bank of New York Mellon Corp (BK.N) over its role as trustee for Countrywide Financial Corp mortgage debt.
Remember that the 1st holder most of the times also owns the second. This creates a conflict.
Naked Capitalism-
Over the past three years, the big four servicers have been keeping hundreds of billions of dollars of second mortgages on their books (mostly in the form of Home Equity Lines of Credit, or HELOCs). Many of these mortgages would seem effectively worthless, because a home equity line of credit or second mortgage on top of an already deeply underwater first mortgage has no value. You can’t use it to foreclose, because you’d get nothing out of the foreclosure – all of that would go to the first mortgage holder (usually some investor in a pension fund somewhere). It has only “hostage value”, or the ability to stop a modification or write-down from happening. The best way to clean up this situation is to have the regulators (FDIC, OCC, Federal Reserve) simply tell the banks that they must write down their second mortgages on collateral that has been impaired. That way, the incentive problem goes away. By forcing the bank to recognize the loss now, the bank will no longer stop a modification on a first mortgage. And in fact, the regulators pretty much agreed that this is what their examiners should do, when they issued new rules earlier this year on accounting for second liens.
It’s a quiet story that most progressive groups operating out of Washington, DC don’t want to talk about: they can’t attract votes anymore. In two recent primary races, in Illinois and Maryland, the more liberal candidate was overwhelmed by the establishment, despite widespread support from labor and online progressive groups. Since a high-water mark in 2006, when netroots activists helped to defeat Joe Lieberman in a Democratic Senate primary in Connecticut, that netroots coalition has absorbed loss after loss. They strike no fear in the hearts of the establishment, because they have proven time and again to be utterly incapable of challenging them. They cannot win even reliably liberal seats at the Congressional level. And so the establishment, confident in their dominance, stops listening to their complaints.
There are lots of reasons for this. Matt Stoller goes over some of them. The current organizers have failed at their tasks, sure. The triviality of progressive media – with their primary focus on a foregone conclusion of a GOP primary election for the last six months rather than building progressive power – and the end of the blogosphere is another major reason. Democratic fecklessness has tarnished a progressive brand with few victories to talk up. A poverty of imagination and new ideas, rather than recycling old ideas from the Heritage Foundation that might just pass Congress, tends to alienate.
From 24/7 Wall St.: When times are hard, fraud often gets worse. Americans are under great financial pressure, and there is no shortage of criminals waiting to take advantage of it. According to the most recent report published by the Federal Trade Commission, there were more than 1.8 million complaints of fraud, identity theft or some other deceptive business practices last year. This is up roughly 40 percent from 2010. 24/7 Wall St. examined the 10 states that had the most complaints in proportion to the size of their populations.
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